CDCHL Statement of Intent 2016-19 - ChristchurchNZ ... Statement of Intent 2016 - 19 Page | 1 of 30 ANTERURY DEVELOPME NT ORPORATION HOLDINGS LIMITED 2016 – 2019 STATEMENT OF INTENT

CDCH Statement of Intent 2016 - 19 Page | 1 of 30

CANTERBURY DEVELOPMENT CORPORATION

HOLDINGS LIMITED

2016 – 2019 STATEMENT OF INTENT

FOR THE YEAR ENDING 30 JUNE 2017


CONTENTS

DIRECTORY .......................................................................................................................................................4

DOCUMENT PURPOSE .......................................................................................................................................4

OWNERSHIP AND GOVERNANCE STRUCTURE ....................................................................................................5

STRATEGIC FRAMEWORK ..................................................................................................................................5

STRATEGIC CONTEXT 2016 – 2019 .....................................................................................................................8

CDC’S STRATEGIC PRIORITIES 2016 – 2019 .........................................................................................................9

STRATEGIC PRIORITIES & PERFORMANCE OBJECTIVES ......................................................................................10

FINANCIAL PERFORMANCE TARGETS ...............................................................................................................11

CORPORATE GOVERNANCE .............................................................................................................................12

ACCOUNTING POLICIES ...................................................................................................................................14

DISTRIBUTIONS ..............................................................................................................................................14

ACQUISITION/DIVESTMENT PROCEDURES .......................................................................................................14

INFORMATION TO BE PROVIDED TO SHAREHOLDERS .......................................................................................14

COMPENSATION FROM LOCAL AUTHORITY .....................................................................................................15

VALUE OF SHAREHOLDERS’ INVESTMENT ........................................................................................................15

ROLE IN THE CCC GROUP AND REGIONAL ECONOMY ........................................................................................15

ATTESTATION .................................................................................................................................................15

APPENDIX ONE - Performance Standards Levels of Service ..............................................................................16

APPENDIX TWO - CRIS Ltd Statement of Intent ................................................................................................19

DIRECTORY .....................................................................................................................................................21

INTRODUCTION ..............................................................................................................................................21

PURPOSE .......................................................................................................................................................22

BACKGROUND TO CRIS LIMITED ......................................................................................................................22

CURRENT FUNDING MODEL ............................................................................................................................22

STRATEGIC CONTEXT 2016 - 2019 ....................................................................................................................23

SUBSIDIARY & ASSOCIATED ENTITIES ..............................................................................................................24


KEY PERFORMANCE INDICATORS ....................................................................................................................25

REPORTING & MONITORING ...........................................................................................................................27

CORPORATE GOVERNANCE .............................................................................................................................27

DISTRIBUTIONS ..............................................................................................................................................29

ACQUISITION/DIVESTMENT PROCEDURES .......................................................................................................29

INFORMATION TO BE PROVIDED TO SHAREHOLDERS .......................................................................................29

COMPENSATION FROM LOCAL AUTHORITIES ...................................................................................................29

VALUE OF SHAREHOLDERS’ INVESTMENT ........................................................................................................29

ROLE IN THE CCC/CCHL GROUP AND REGIONAL ECONOMY ..............................................................................30

ATTESTATION .................................................................................................................................................30


DIRECTORY Address: Canterbury Development Corporation Holdings Limited PO Box 2962 Christchurch 8140 Registered Office: Level 1 99 Cashel St Christchurch Board: Dr Garth Carnaby (Chair) Mr Peter Barrowclough (Deputy) Dr Grant Ryan Ms Louise Edwards Cr David East Cr Paul Lonsdale Cr Andrew Turner Chief Executive: Mr Tom Hooper Auditors: Grant Thornton Audit Partnership (NZ) Limited Contact: Telephone 03 379 5575 Email [email protected] Web www.cdc.org.nz

DOCUMENT PURPOSE This Statement of Intent (SOI) is approved by the CDCH Board and then as determined by the Memorandum Of Understanding between Canterbury Development Corporation, Christchurch City Holdings Limited (CCHL) and the Christchurch City Council (CCC), provided to CCHL and ultimately to its shareholder, CCC in accordance with Section 64(1) of the Local Government Act 2002. The Statement of Intent defines for CDCH and its subsidiary entities, the objectives, nature and scope of activity, the performance targets and other measures by which the organisation may be judged in relation to its objectives over the next three years. The SOI provides an opportunity for CCHL, CCC and the CDCH Board to define CDCH’s focus consistent with the Council’s Long Term Plan (LTP) process, with review of delivery objectives occurring in intermediate years.


OWNERSHIP AND GOVERNANCE STRUCTURE CDCH is wholly owned by the Christchurch City Council and, as such, is a Council Controlled Organisation (CCO). Christchurch City Holdings Limited (CCHL), the commercial arm of CCC, monitors the governance functions of CDCH on its behalf under the terms of a Memorandum of Understanding. The Christchurch City Council (CCC) has a goal for the city in its Long Term Plan of a prosperous economy and identifies the following community outcomes:

The Canterbury Development Corporation (CDC) is a wholly owned subsidiary of CDCH and the economic development agency for Christchurch City Council. CDC’s role is to support, encourage and influence the economic success of greater Christchurch, working to achieve the CCC community outcomes CDC, alongside Christchurch and Canterbury Tourism (CCT), leads many of the economic development activities identified in the CCC Long Term Plan under an agreed Level of Service.

STRATEGIC FRAMEWORK CDC’s strategic framework describes the organisational vision, priorities and approach in the context of the Christchurch Economic Development Strategy (CEDS).


It is expected that the implementation of the visitor strategy delivery model will require a review of the CDC strategic framework to ensure that increased delivery obligations of the organisation are considered. CDC’s interventions are motivated by the public good. CDC intervenes where it can catalyse actions and connections in the economy which would not otherwise happen to the scale, at the speed or at all without CDC’s involvement. These interventions are required to provide more benefit the region than they cost to delivery. We work in partnership with others to deliver projects, increase capability, disseminate relevant knowledge and make things happen.

The Christchurch Economic Development Strategy (CEDS) CDC is mandated through its Level of Service Agreement with CCC to develop and monitor the Christchurch Economic Development Strategy (CEDS). CEDS is sets out a long term vision for the economic development of Christchurch and is developed and implemented in partnership with our stakeholders including government agencies and business representatives. The strategy is a collective piece of thinking and not owned by any single entity. CEDS is aligned and consistent with the Canterbury Regional Development Strategy (CREDS). This collaborative approach provides confidence for city and external audiences about the clarity and focus of Christchurch’s collective economic development priorities. This enables us to attract external funding for economic development activities in the region, significantly leveraging the operational funding provided to CDC by Council. Key aspects of CEDS are as follows:

CEDS is a city strategy, but recognises the regional context for the Christchurch economy.

CEDS is evidence-based; informed by data and statistics tested and informed by business community knowledge and experience.

CEDS includes all of the economic development projects in greater Christchurch, led by over 30 different agencies. CDC leads some projects, participates in others but monitors and updates the overall programme.

CEDS informs the activities of agencies over a three to five year period.

CEDS provides an agile framework on which targeted interventions are based; using CDC’s monitoring of the entire programme, regular reporting and engagement with stakeholders to enable a timely response to changes in the economic environment and reallocation of resources as required.

CEDS provides direction for CDC in developing meaningful interventions through business and sector development projects and innovation.

CEDS is the reference point for all CDC’s activities and investment decisions, ensuring we are focussed on the best outcomes for the economy. CDC is currently undertaking a revision of the 2013 strategy, which will be completed during the term considered by this Statement of Intent. The revision of CEDS will recognise the visitor sector as a key part of the economy and look at ways that both tourism and major events can be optimised to catalyse better overall results for both the economy and the wider community.

Visitor Strategy A Visitor Strategy for Christchurch has been developed under the leadership of the Christchurch City Council and at the time of writing of this Statement of Intent, is the subject of an industry consultation process. The Visitor Strategy will inform some of the priorities and activities of CDC Holdings and its delivery agencies for the period of this Statement of Intent.


OWNERSHIP & GOVERNANCE STRUCTURE

Subsidiaries and Related Entities

Existing subsidiaries and related entities CRIS Limited is a wholly owned CDC subsidiary and holds a portfolio of investments and contractual commitments that support the delivery of innovation commercialisation initiatives within the region. CDC co-owns Canterbury Regional Business Partners Limited in a joint venture with the Canterbury Employers Chamber of Commerce. This Joint Venture initiative is funded by Callaghan Innovation and the Ministry of Business, Innovation and Employment to co-ordinate business capability building and research and development related activities across the Canterbury region. In addition to these ownership interests, CDC facilitates the establishment and supports the operation of, other entities that deliver targeted activity to drive growth in key sectors. These entities also attract funding from central government and private sources for their economic development activity in the region. Change proposal to align Economic Development, Tourism and Major Events During the course of the three-year period of the Statement of Intent, it is expected that some significant changes will be made to the CDCH Group structure under the direction of the shareholder and governance oversight of CCHL.

Monitoring & Governance Oversight


Following the development of a Visitor Strategy for Christchurch during the current period, and the Great for Christchurch review process undertaken by CCC, it is proposed that CDC Holdings Ltd be used as the vehicle to amalgamate tourism, events and economic development activity for the City It is proposed that an initial step in the ultimate amalgamation of functions, be the transfer of the shares in Christchurch & Canterbury Marketing Ltd (CCT) from its current Trust ownership, via CCC to CDC Holdings. Following the completion of the share transfer, it is expected that strategic direction and composition of the CDC Holdings board will alter to consider the new, broader role of CDC Holdings, now incorporating the Tourism function. Recruitment activity by CCHL is well advanced in terms of identifying a suitable appointment to replace Peter Barrowclough and to act as the Chair Elect for CDC Holdings. During the Statement of Intent period, CDC Holdings also expects to receive direction from CCC around the provision of Major Event’s service delivery which would see a transition negotiated at executive level, of services and funding from CCC to CDC Holdings or the amalgamated subsidiary operating entity as may be appropriate. This new service level may require further Board composition and strategy amendments guided by the Shareholder via Christchurch City Holdings Limited. The first principle of an alignment of economic development, tourism and events is that knowledge, relationships and value within the existing entities/business units should be protected and retained, ensuring an optimised wider and new looking group solution that builds synergy, alignment and efficiencies on top of existing strengths. An incoming CDC Holdings Chair will need a skill set encompassing Economic Development, Tourism and Events, and will need to understand the value in the existing assets and operations before initiating wholesale changes. This governance transition is expected to be complete by November 2016. Alignment of CCT and CDC functions will follow a transition period during which CDC Holdings acquires greater in depth understanding of the two functions and its future management imperatives.

STRATEGIC CONTEXT 2016 – 2019 The Christchurch economic environment includes its physical infrastructure, key institutions and the connectivity and alignment between those involved in economic activity. This is the environment in which CDC operates and it continues to change rapidly. The key themes that are influencing CDC’s priorities over the next three years are:

The importance of the underlying economy in the post rebuild era and ensuring our key long term economic sectors are well positioned for growth.

The importance of innovation as a response to technological, societal and environmental change:

Rapid technological change is driving new business models, shorter innovation cycles and greater integration across sectors.

Changing consumer expectations and an emphasis on environmental sustainability are driving the need for, and uptake of, technological solutions for rural production and business activity.

Greater Christchurch is rich in innovation assets and has high levels of research, entrepreneurship and technology and knowledge intensive employment. The development of the Innovation Precinct and the Canterbury regional innovation strategy provide opportunities for Christchurch to further optimise and profile its innovation system capability.


The importance of having a city which is attractive to skilled and wealth-creating people, business and investment:

Mitigate the impact of an aging population. CDC estimates that Canterbury will need to attract around 106,000 additional people by 2031 to replace retiring workers and maintain historic economic growth rates.

Continue, and in some cases accelerate the investment in amenity, social infrastructure and business to enhance the attractiveness of Christchurch as a place to live, work, do business, study and visit.

Ensure the transition to a city-led regeneration model is effective and maintains momentum.

Being an attractive city with a strong city profile will be critical.

Recognition that the visitor economy is an important part of the wider economy and that in particular:

Growing visitor spend supports a greater range of hospitality and leisure amenity in the city.

The close inter-relationships between visitor, migrant and investor attraction, and also retention.

CDC’S STRATEGIC PRIORITIES 2016 – 2019 CDC’s strategic priorities are informed by CEDS in conjunction with our engagement with Council in the Long Term Planning process and our understanding of the government growth agenda. Priorities are assessed against our capability to influence to maximise outcomes. CDC is operating in a constrained fiscal environment. We must focus our effort on delivering core activities, as set out in its Level of Service with Council and central government funding contracts and seeking ways to do this as effectively and efficiently as possible. Our core activity over the next three years can be categorised as follows:

STRATEGY - Lead the refresh of the Christchurch Economic Development Strategy and monitor implementation.

INFLUENCE - Contribute insights from economic research, business community engagement and economic development expertise to inform central and local government policy.

KNOWLEDGE SHARING - Disseminate regular economic monitoring and research about the Christchurch economy, with a focus on workforce, innovation and key growth sectors to inform the local business community and others interested in the Christchurch economy.

BUSINESS SUPPORT - Continue to deliver value to our business clients through our business services and facilitating networks and relationships – focus on capability development, workforce, innovation and productivity.

CONTRACT DELIVERY - Deliver against the CDC Regional Business Partners programme and Business Mentors contract with NZTE; deliver other contracts as agreed and aligned to our economic development mandate.

INNOVATION SYSTEMS - Improve the effectiveness of the regional innovation system by facilitating better connections between innovation assets. CDC’s priorities will be informed by the Canterbury Regional Innovation Strategy and our commitments under our Commercialisation Partner Network contract with MBIE.

ATTRACTION - Increased focus on people, investment and business attraction to the city through working in partnership with other agencies to ensure Christchurch has a strong, consistent and compelling city profile.

ALIGNMENT WITH TOURISM & MAJOR EVENTS ACTIVITY - Ensure an aligned and efficient approach to delivery of Economic Development, Tourism and Major Events.


STRATEGIC PRIORITIES & PERFORMANCE OBJECTIVES

1 This table includes key CCC Level of Service measures. A full set of CDC’s Level of Service deliverables with CCC are included in Appendix 1. 2 The delivery of business support services to Christchurch businesses is part funded by CCC, NZTE and Callaghan Innovation through the Regional Business Partner Network at a rate of 1:3 3 The support & development of the Canterbury Regional innovation system is jointly funded by CCC and MBIE through the Commercialisation Partner Network at a rate of 1:1

Strategic Priority

Outcome Activity Funded

by1

2016/17 2017/18 2018/19

Influence the environment for economic growth in Christchurch

Consensus exists among key

organisations and there is demonstrated commitment to work

together to achieve a shared vision for

the economic future of Christchurch

CEDS is re-endorsed by Council and key

partner agencies as the guiding document for all economic development

activity in Christchurch

CCC Strategy

endorsed

Implementation

monitored

Implementation

monitored

Confidence about the city’s economy and progress towards the CEDS goals

is increased

Economic updates for the City and region including rebuild are produced

and communicated to relevant

audiences Reports on key issues facing the

economy are produced and distributed

CCC

CCC

CCC

4 quarterly updates

12 monthly snapshots

3 reports

4 quarterly updates

12 monthly snapshots

3 reports

4 quarterly updates

12 monthly

snapshots

3 reports

CDC impacts the economic environment to move the

Christchurch economy toward the

achievement of the CEDS goals

CDC meets Levels of Service targets set out in the CCC LTP.

CDC leads or participates in CEDS

projects

CCC

CCC

100% achieved 15 projects



Targeted support and infrastructure is

available to key sectors and high-growth businesses

Provide practical support to targeted

organisations to ensure their presence in the region and ability to catalyse long

term economic growth

CCC 4 organisations 4 organisations 4 organisations

Support businesses to accelerate their growth

Business have access to a range of

valued services tailored to address specific business needs including

management capability, attracting

and retaining workforce, productivity and innovation

Business Mentoring Services are

provided to local business and organisations

A capability building programme is

delivered to businesses

Intensively case managed businesses

Business improvement services are

provided to medium to large businesses

CCC/ RBP2

CCC/ RBP

CCC

CCC

600

250 businesses

40 businesses

10 businesses

600

250 businesses

40 businesses

10 businesses

600

250 businesses

40 businesses

10 businesses

Attraction of business, people and investors

Businesses, investors and people are

attracted to Christchurch as a place to do business, invest and live

CDC works with partners to develop and

implement a city attraction strategy

CCC Strategy &

delivery model agreed

Strategy

implemented

Strategy

implemented

Commercial outcomes from new ideas

Necessary infrastructure is in place to support the development of core

aspects of the innovation ecosystem

Entrepreneurs in Christchurch have access to support to commercialise

their ideas

Knowledge transfer within the innovation system occurs effectively

CDC works with partners to develop and implement the Regional Innovation

Strategy

CPN contract deliverables are achieved

Start-up support is provided through Greenhouse – start-up businesses

utilising the facility

CCC/ MBIE3

CCC/ MBIE

CCC/ MBIE

Strategy agreed

Deliverables

achieved

75% utilisation

Strategy implemented

Deliverables

achieved

75% utilisation

Strategy implemented

Deliverables

achieved

Additional funding is

sourced


FINANCIAL PERFORMANCE TARGETS

CDCH Financial Objectives

Objective Performance

1. CDCH Financial Performance meets shareholder expectations (budget).

CDC meets or exceeds budgeted key performance measures. 2017 2018 2019

$000 $000 $000

CCC Funding 4,441 4,352 4,352

Other Funding 2,523 2,362 2,438

Shareholders’ Funds/Total Assets 80% 79% 78%

Cash Balances – maintain sufficient funds to meet working capital commitments over the course of the three year period and Reserves held to meet at least six months of operations and all outstanding commitments in the event of funding cessation

2. CDCH’s capital structure and funding model is appropriate for the nature of its business.

CDC will utilise CCC funding for the objectives as set out in the LTP and secure additional funding from appropriate sources to complete specific projects as required, utilising capital reserves retained by CRIS Ltd as available and required to leverage other funding sources. CDC maintains an adequate level of reserves to meet on-going commitments (circa six months of operations).

3. CDCH’s treasury management policies and practices are consistent with best practice.

CDC to review its Treasury Policy biennially.

4. CDCH Accounting Policy is consistent with shareholder requirements and complies with IPSAS.

Annual external audit reviews do not highlight any material issues.

Group Financial Objectives

1. Subsidiary performance is in line with expectations.

Subsidiaries achieve budget and objectives set out in their Annual Operating Plans.

2. The capital structure and funding model of CDCH subsidiaries is appropriate for the nature of its business.

CRIS provides a source of capital to fund economic development initiatives. Subsidiary governance arrangements are reviewed and rationalised as appropriate

3. The Accounting Policies of CDCH Subsidiaries are consistent with shareholder requirements and comply with IPSAS.

Annual external audit reports are completed and do not highlight any material issues.

CDC Holdings Limited – Statement of Intent 12

CORPORATE GOVERNANCE A Memorandum of Understanding between CCC, CDCH and Christchurch City Holdings Limited (CCHL) has been agreed that sets out the governance monitoring role and reporting lines between the three entities.

Public Benefit Entity CDC is non-profit entity and acts for the public good. CDC considers the environment and the community in all of its activities.

Role of the Board of Directors The Board is ultimately responsible for setting the strategic direction of the company, oversight of the management of the company and direction of its business strategy, with the ultimate aim being achievement of the shareholder’s vision and wishes for the economic development of Christchurch city and the city’s surrounding area of interest. The Board is accountable to the shareholder and CCHL for the performance of the company and will act in accordance with any letter of Shareholder expectation received. The Board draws on relevant corporate governance best practice principles to assist and contribute to the performance of CDC. The functions of the Board include: 1 Seek advice from CCHL and CCC on matters of policy and strategic direction, agrees intervention logic with

CCC as shareholder and key funder. 2 Providing strategic direction for, and approving, the company’s business strategies and objectives; 3 Reviewing and approving the company’s budgets and business plans and monitoring the management of the

company’s capital, including the progress of any major capital expenditure, acquisitions or divestitures; 4 Providing leadership of the company within a framework of prudent and effective controls which enables risk

to be assessed and managed; 5 Identifying the principal risks faced by the company and taking reasonable steps designed to ensure that

appropriate internal controls and monitoring systems are in place to manage and, to the extent possible, reduce the impact of these risks;

6 Monitoring the operational and financial position and performance of the company; 7 Requiring that financial and other reporting mechanisms are put in place by the Chief Executive which result

in adequate, accurate and timely information being provided to the Board and the company’s shareholder and the financial market as a whole being fully informed of all material developments relating to the company;

8 Appointing and, where appropriate, removing the Chief Executive, approving other key executive appointments, planning for executive succession and monitoring the performance of the Chief Executive and other senior executives, having regard to the company’s strategic direction and goals;

9 Reviewing and approving the company’s remuneration policies; 10 Establishing procedures to ensure that financial results are appropriately and accurately reported on a timely

basis in accordance with all legal and regulatory requirements; 11 Adopting appropriate procedures to ensure compliance with all laws, governmental regulations and

accounting standards; 12 Approving and regularly reviewing the company’s internal decision making and compliance policies and

procedures, including any codes of conduct, this Charter and the charters of the Board’s Committees; 13 Ensuring that the company’s internal decision making and compliance policies and procedures are adhered

to, to ensure that the business of the company is conducted in an open and ethical manner; and; 14 Appointing board members or representatives for the subsidiary entities in conjunction with CCHL and CCC

where appropriate.


All Directors are required to comply with a formal Code of Conduct which is based on the New Zealand Institute of Directors’ Code of Proper Practice for Directors. The Board generally meets at monthly intervals and at other times as required.

Board Committees The Board may, from time to time, establish committees to assist it in carrying out its responsibilities. For each committee the Board adopts a formal charter that sets out the delegated functions and responsibilities for, and the composition and any administrative matters relating to, that committee. An Audit and Risk Committee and a Remuneration Committee have been established. The Board is responsible for the oversight of its committees. This oversight includes, in relation to each committee, determining and reviewing its composition and structure and regularly reviewing its performance against its charter.

Delegation of Responsibilities to Management The Board has delegated management of the day-to-day affairs and management responsibilities of the company to the executive team to deliver the strategic direction and goals determined by the Board. The Board has also developed a statement of their ‘Reserved Powers’. Directors and Board committees have the right, in connection with their duties and responsibilities, to seek independent, professional advice at CDC’s expense, subject to Board approval.

Board Composition and Fees The composition of the Board of Directors is determined by CCHL under the CCC policy on Council Controlled Organisations (CCO) board appointments. Directors’ fees are reviewed periodically as part of the CCHL process.

Subsidiary Board Members All directors of subsidiary companies are selected for their commercial expertise and aptitude. It is established practice for representatives of the subsidiary board and management to meet with CDC at least twice a year, to discuss the company’s strategic direction and any significant issues that arise. The CDC Board also receives such other reports as are necessary to perform its monitoring function; however, CDC does not involve itself in the management of subsidiary companies.

Reporting and monitoring CDC reports monthly to CCC management against its levels of service and meets a minimum of twice yearly with council as part of the commitment made via the MOU between CDCH, CCC and CCHL. Financial results and operational activity KPI’s are reported to CCHL quarterly. Via the MOU, CCHL monitors the performance of CDC on behalf of the council and deals with accountability and governance relationship issues.


ACCOUNTING POLICIES CDCH has defined itself as a Public Benefit Entity (PBE) for the purposes of financial reporting. The financial statements are prepared in accordance with the PBE Standards Reduced Disclosure Regime for a Tier 2 entity. The company’s current accounting policies are consistent with New Zealand International Public Sector Accounting Standards, generally accepted accounting practice and in accordance with the Companies Act 1993 and the Financial Reporting Act 1993 and any amendments thereto. A full statement of CDCH’s accounting policies is included in CDCH’s Annual Report for 30 June 2015 on the CDC website www.cdc.org.nz . CHCH’s accounting policies are unchanged and are expected to be consistently applied.

DISTRIBUTIONS

Company not carried on for Private Pecuniary Profit None of the capital or income of the company shall be paid or transferred directly or indirectly by way of dividend, distribution or otherwise for the private pecuniary profit of any individual. This does not prevent the payment in good faith of reasonable remuneration to any directors or employees of the company, to any other person for services rendered to the company or to subsidiary entities in the furtherance of the objectives of the company.

ACQUISITION/DIVESTMENT PROCEDURES The subscription or acquisition of securities in any company or organisation, or a divestment of part of the parent will only be considered where it is consistent with the long term objectives of the shareholder. When the subscription, acquisition or divestment is considered by directors to be significant to the company’s business operations, it will be subject to consultation with the shareholder (CDC). Major transactions as defined in the Companies Act 1993, s 129(2) will be subject to shareholders’ approval by special resolution. (In respect of the subsidiary entity CRIS Limited, which is an investment vehicle, acquisitions and divestments are subject to the CRIS Limited Constitution, consistent with the long term objectives of the CRIS Limited board and shareholder).

INFORMATION TO BE PROVIDED TO SHAREHOLDERS CDCH will provide information requested by the shareholder in accordance with the requirements of the Local Government Act 2002. CDCH will disclose as much information on its operations as is practical and consistent with commercial and confidentiality considerations under the covenants of its SOI with CCC and MOU with CCHL and other third party contractual obligations. CDC will operate on a “no surprises” basis in respect of significant shareholder related matters, to the extent possible in the context of commercial sensitivity and confidentiality obligations. As a minimum this will involve:

1 Annual report and audited financial statements within 90 days of balance date 2 Report against performance indicators 3 Business Plan in place by 31 May each year for the following financial year

http://www.cdc.org.nz/


4 Annual report of CCC and LTP reporting process 5 A quarterly report including a financial and activity update and information on the health and safety

practices and performance of the organisation. 6 A monthly activity highlights report 7 Monthly Levels of Service status update

COMPENSATION FROM LOCAL AUTHORITY The CDCH group currently receives funding from CCC of $4.4m annually. This is currently allocated as $331,000 to CRIS Limited and $4.069m to CDC for the year ended 30 June 2017 and is anticipated to decrease in year 2018 before becoming static. The activity undertaken in exchange for this compensation are set out in the CCC three year plan and form part of the operating objectives set out in this document.

VALUE OF SHAREHOLDERS’ INVESTMENT The CDCH directors estimate that the value of the shareholder investment in the group is at least that which is stated as “shareholders’ equity” in the latest available audited financial statements. This value is reassessed annually as part of the preparation of the audited financial statements.

ROLE IN THE CCC GROUP AND REGIONAL ECONOMY

Commercial relationships within the CCC Group Wherever possible, CDCH will work with other group companies to benefit the CCC Group and the Canterbury region.

Role in the growth of the regional economy As part of its role as the Economic Development Agency for the City, CDCH will work proactively with other regional EDAs and the CCC Group to drive regional economic growth. CEDS establishes a direct correlation between the region’s agricultural hinterland and the economic strength of the City.

Other Matters Requiring the Approval of the Shareholder CDC will bring to the attention of the shareholders;

Any matters of critical concern

Major transactions as defined in the Companies Act

ATTESTATION

Chairperson Signed for and on behalf of the Board of Directors


APPENDIX ONE - PERFORMANCE STANDARDS LEVELS OF SERVICE

Performance Standards Levels

of Service

2016/17 2017/18 2018-2025

5.1.2 CDC provides

economic

development

leadership for

Christchurch

5.1.2.1 Review and update the

Christchurch Economic

Development Strategy with

Council. CEDS revision

completed by 30 June 2018

There is a wide understanding

in the business and

government community of the

key city and regional economic

drivers

5.1.2.2 Economic knowledge and

insights are regularly delivered

to stakeholders via website,

publications and update events

by minimum quarterly

Economic knowledge and

insights are regularly delivered

to stakeholders via website,

publications and update

events by minimum quarterly

The City and business

community has an economic

development plan which has

up-to date information on all

development related activity

5.1.2.3 Christchurch has a strong

culture of innovation in

business. Christchurch has

more export focused

businesses than other regions

5.1.2.4 Economic knowledge and

business insights is contributed

to external forums and

workshops (non CDC) that

support the city’s economic

development objectives a

minimum of quarterly

Economic knowledge and

business insights is

contributed to external forums

and workshops (non CDC) that

support the city’s economic

development objectives a

minimum of quarterly

5.1.3 CDC

maintains Centres

of Expertise in

Economic

Research,

Workforce, and

Infrastructure

5.1.3.1 Economic futures model is used

in the review of GDP and

population forecasts. Reviewed

annually by 30 June.

Economic futures model is

used in the review of GDP and

population forecasts.

Reviewed annually by 30 June.

Business and government

relies on economic and

business trends, training,

insights, reports and

knowledge for strategy and

business decisions.

5.1.3.2 Two projects that support the

rural economy and its

connection to the Christchurch

economy are delivered each

year

Two projects that support the

rural economy and its

connection to the Christchurch

economy are delivered each

year

There is strong links between

business and education.

5.1.3.3 There is a shared process that

aligns the skills and

qualifications needs of sectors

with education.

5.1.3.4 Produce 3 economic reports

using the CDC knowledge base

per year.

Produce 3 economic reports

using the CDC knowledge base

per year.

5.1.3.5 Maintain and publish the

Canterbury economic

infrastructure situation report

quarterly

Maintain and publish the

Canterbury economic

infrastructure situation report

quarterly

5.1.3.6 Prioritisation model for large

infrastructure projects is

reviewed annually

Prioritisation model for large

infrastructure projects is

reviewed annually

Infrastructure projects are

optimal for the Christchurch

economy and residents.

5.1.4 CDC monitors

and implements

priority economic

5.1.4.1 CDC monitors and reports

quarterly on the whole CEDS

programme

CDC monitors and reports

quarterly on the whole CEDS

programme

An economic development

framework that is trusted and

is used to leverage private and


development

projects identified

through the

Christchurch

Economic

Development

Strategy

5.1.4.2 Annually: 80% of projects in

CEDS are on track for

completion

Annually: 80% of projects in

CEDS are on track for

completion

other sources of investment

domestically and

international.

5.1.4.3 CEDS projects and

opportunities list is reviewed

and updated annually by a

stakeholder group

CEDS projects and

opportunities list is reviewed

and updated annually by a

stakeholder group

5.1.4.4 CDC leads or participates in

over 15 projects annually which

are prioritised

CDC leads or participates in

over 15 projects annually

which are prioritised

5.1.5 CDC Leads

the Canterbury

Regional

Innovation System

(CRIS)

5.1.5.1 CDC innovation provides access

to capital, funding and

resources for start-up ventures

and innovation platforms in the

region. At least 6 ventures or

initiatives per year are

identified and invested in.

CDC innovation provides

access to capital, funding and


and innovation platforms in

the region. At least 6 ventures

or initiatives per year are

identified and invested in.

Canterbury has the most

effective innovation and

commercialisation system in

New Zealand which leads to

more opportunities, wealth

and jobs in knowledge

intensive areas.

The region has the best access

to capital, funding and


and commercialisation.

A full suite of early stage

business support is available to

support innovative business

ideas in the region.

5.1.5.2 In conjunction with the MBIE,

CDC Innovation provides and

innovation hub for use by early

stage business & entrepreneurs

in the region.

In conjunction with the MBIE,

CDC Innovation provides and

innovation hub for use by early

stage business &

entrepreneurs in the region.

5.1.5.3 Food South building completed

by 30 June 2017

Minimum of six businesses

utilise the Food South building

for food programmes

Number of businesses utilising

the Food South building for

food programmes is 12 pa by

2025

5.1.5.4 Regional R&D is connected to

business and commercialisation

expertise (5 pieces of

innovation per annum)

Regional R&D is connected to

business and

commercialisation expertise (5

pieces of innovation per

annum)

5.1.23 CDC

facilitates the

development of

selected key

sectors that align

with the national

growth agenda and

CEDS.

5.1.23.1 Support 4 collaborative

organisations in key sector

aimed at increasing sector

growth and productivity.

Support 4 collaborative

organisations in key sectors

aimed at increasing sector

growth and productivity to

operate without relying on

CDC by 30 June 2018

Sector performance is driven

by coordinated planning which

is reviewed regularly. There is

strong sector collaboration on

projects.

5.1.23.2 Deliver 2 projects or initiatives

that align with the sector

growth strategy for each sector

and contribute to realising

growth in key sectors.

Deliver 2 projects or initiatives

that align with the sector

growth strategy for each

sector and contribute to

realising growth in key sectors.

There is cross sector planning

on key themes such as

workforce and technology.

5.1.6 CDC

facilitates the

development of

selected high

growth potential

businesses that

align with the

Government

growth agenda and

CEDS.

5.1.6.1 A capability building

programme is delivered to

businesses.

A capability building

programme is delivered to

businesses.

Business growth and export is

accelerated. They have access

to training and resources to

ensure they are innovating and

exporting better than other

regions.

5.1.6.2 Business mentoring services are

provided to 600 businesses per

year.

Business mentoring services

are provided to 600 businesses

per year.

5.1.6.3 40 clients per annum will be

intensively case managed

40 clients per annum will be

intensively case managed

5.1.6.4 At least 100 clients will be

engaged in a broader industry

sector program.

At least 100 clients will be

engaged in a broader industry

sector program.


5.1.6.5 Facilitate international trade

(with a special emphasis on

China) by hosting incoming

delegations and participating in

both on-shore and offshore

trade related events, a

minimum of 6 local businesses

per annum are introduced to

international trade

opportunities

Facilitate international trade

(with a special emphasis on

China) by hosting incoming

delegations and participating

in both on-shore and offshore

trade related events, a

minimum of 6 local businesses

per annum are introduced to

international trade

opportunities

5.1.6.6 Business improvement services

are provided to 10 medium to

large Christchurch businesses

per annum

Business improvement

services are provided to 10

medium to large Christchurch

businesses per annum

5.1.6.7 Support local companies to

supply goods and services as

part of the domestic supply

chain with a minimum of 10

connections or initiatives per

year.

Support local companies to

supply goods and services as

part of the domestic supply

chain with a minimum of 10

connections or initiatives per

year.

5.1.24 CDC works with partner

agencies to support the

development of suburban

centres in Christchurch

CDC participates in the

development and delivery of at

least one suburban precinct

initiative

CDC participates in the

development and delivery of

at least one suburban precinct

initiative

Business and residents are

working towards common

suburban plans and have

confidence in where they live,

work and run businesses.

5.1.25 CDC builds strong

connections between education

and business

Deliver 2 programmes that

enhance the connection

between a key ChCh sector and

at least one education group.

This may be programmes that

result in greater internship

linkages, apprenticeship

programmes, work place skills

development programmes or

other work placement activity.

Deliver 2 programmes that

enhance the connection

between a key ChCh sector

and at least one education

group. This may be

programmes that result in

greater internship linkages,

apprenticeship programmes,

work place skills development

programmes or other work

placement activity.

There are strong links between

business and education.

There is a shared process that

aligns the skills and

qualifications needs of sectors

with education.

5.1.26 Supporting the

development and

implementation of the Recovery

Transition Plan

An economic recovery activity is

transitioned to CDC by 30 April

2016

All economic recovery

activities have been

transitioned to CDC by 30 June

2018


APPENDIX TWO - CRIS LTD STATEMENT OF INTENT

CRIS Limited

STATEMENT OF INTENT

For the year ending 30 June 2017

Date of Creation: 22 January 2016

Last Saved on: 1 July 2016

Prepared by: Tom Hooper

Status Final for Board Approval

Filepath: n:\cris\board & governance\board papers\Feb 2016\CRIS SOI 2016.docx


Contents

DIRECTORY ................................................................................................................................................. 21

INTRODUCTION ........................................................................................................................................... 21

PURPOSE .................................................................................................................................................... 22

Background to CRIS Ltd ....................................................................................... Error! Bookmark not defined.

Current Funding Model ....................................................................................... Error! Bookmark not defined.

Strategic Context 2016 - 2019 ...................................................................................................................... 23

Subsidiary and associated entities ....................................................................... Error! Bookmark not defined.

Key Performance Targets .................................................................................... Error! Bookmark not defined.

REPORTING & MONITORING ....................................................................................................................... 27

Corporate Governance ........................................................................................ Error! Bookmark not defined.

Distributions ....................................................................................................... Error! Bookmark not defined.

Acquisition/Divestment Procedures .................................................................... Error! Bookmark not defined.

Information to be Provided to Shareholders ........................................................ Error! Bookmark not defined.

Compensation from Local Authority .................................................................... Error! Bookmark not defined.

Value of Shareholders’ Investment ...................................................................... Error! Bookmark not defined.

Role in the CCC/CCHL Group and Regional Economy .................................................................................... 30

ATTESTATION .............................................................................................................................................. 30


DIRECTORY

Address PO Box 2962

Christchurch 8140 Registered office Level 1 99 Cashel Street Christchurch Board Dr Garth Carnaby (Chair) Mr Peter Barrowclough (Deputy) Dr Grant Ryan Ms Louise Edwards Mr Tom Hooper (Managing Director) Cr Paul Lonsdale Mr John Walley Managing Director Mr Tom Hooper Telephone no. 03 379 5575 Email [email protected]

INTRODUCTION

This Statement of Intent (“SOI”) is submitted to the Canterbury Development Corporation (CDC) Board as Shareholder and forms part of the wider CDC Holdings Ltd Statement of Intent; as determined by the Memorandum of Understanding between CDC, Christchurch City Holdings Ltd (CCHL) and Christchurch City Council (CCC), the CDC Holdings Statement of Intent is reviewed in the first instance by CCHL and subsequently submitted by them, to CCC as ultimate Shareholder. This SOI is prepared in accordance with Section 64(1) of the Local Government Act 2002. The SOI specifies the objectives, the nature and scope of the activities to be undertaken, and the performance targets and other measures by which the performance of the company may be judged in relation to its objectives, amongst other requirements. The CRIS Ltd SOI covers the activities of CRIS and its partially owned subsidiary entity New Zealand Food Innovation (South Island) Limited (FoodSouth). The process of negotiation and determination of an acceptable SOI is a public and legally-required expression of the accountability relationship between the company, its ultimate Shareholder (CCC) and CCHL as it exercises governance oversight on behalf of CCC in accordance with the MOU. The SoI will be reviewed annually with the Shareholder and covers a three-year period. CRIS Ltd and FoodSouth are council-controlled organisations (‘CCO’s’) for the purposes of the Local Government Act 2002.


PURPOSE

CRIS Ltd is a vehicle by which the company’s sole shareholder, Canterbury Development Corporation (CDC), has attracted funding to support the development of Canterbury’s regional innovation system and uses to hold reserves that enable CDC to enter into long term commitments to support economic development initiatives in the region. ROLE CRIS Ltd holds a portfolio of investments and contractual commitments with Central Government that enable the delivery of innovation and commercialisation initiatives within the region.

BACKGROUND TO CRIS LIMITED

CRIS Limited was incorporated by the Canterbury Development Corporation (CDC) in April 2012 for the purpose of receiving the assets and commitments of the Canterbury Economic Development Trust Fund (CEDF). CEDF was settled by the Christchurch City Council in 2003 with the Canterbury Development Corporation appointed as the establishment trustee. The purpose of CEDF was also to support economic growth in the region. In recent years, the CEDF and CRIS Limited have focused on providing support to entrepreneurship and the commercialisation of intellectual property (IP), both Crown and business generated, for competitive advantage and economic benefit for Canterbury.

CURRENT FUNDING MODEL

Operational Funding The Ministry of Business, Innovation & Employment (MBIE), have invested in a range of soft infrastructure in the region to support entrepreneurship and commercialisation of intellectual property and CDC via CRIS Limited has partnered with MBIE and its subsidiary agencies on these initiatives as co-funder and expert on the local economic environment. Key contracts and assets currently held include the following:

o Commercialisation Partner Network membership o Powerhouse Ventures Limited – Technology Incubator o FoodSouth

Legacy assets and commitments exist from these initiatives, however as the need to continue equity investment in early stage technology based start-ups has ceased, it is the intent of CRIS Limited to transfer responsibilities for delivery and monitoring of these contracts to CDC. Investment Capital The CRIS Ltd portfolio of investments has now been rolled up to sit as a single investment in Powerhouse Ventures Limited, a Christchurch based Technology Incubator. This consolidation of investment holdings has enabled CRIS Limited to reassess its operating model and simplify governance and management arrangements as it seeks to realise the capital held. As Powerhouse progresses toward becoming an investment company of scale (and possible public listing), it is expected that CRIS Limited will realise cash returns over time that can be utilised for capital investment in the wider innovation eco-system or some other economic development purpose following appropriate consultation with the Shareholder.


Significant cash realisation is not expected in the short term with a post listing escrow term of 24 months indicated by Powerhouse. However, it is also not envisaged either that CRIS Ltd will require any further capital contributions to its Investment Capital Fund.

STRATEGIC CONTEXT 2016 - 2019

Regional Innovation System Focus The Christchurch Economic Development Strategy (CEDS) identifies “improving productivity through innovation” as one of five game changer priorities for Christchurch. This is consistent with central government’s focus, which identifies innovation as one of five pillars within its national economic development strategy, the Business Growth Agenda. In recent years central government has come to recognise the “regionally focused innovation support model” as best practice and is actively encouraging the adoption of the model into other regions, identifying CDC and CRIS Ltd as the exemplar to follow. Utilising the agile strategic platform provided by the Christchurch Economic Development Strategy (CEDS), the focus of CRIS Ltd’s investment in “soft infrastructure” has evolved to avoid crowding out of other initiatives, whilst ensuring a continuum of support so that good ideas are neither shelved due to lack of resources, or fall through the cracks due to lack of skill and experience or implementation of a cohesive strategy. The Canterbury Regional Innovation Strategy due to be completed by June 2016, will inform CDC’s innovation strategy and as a result, the focus for the CRIS Ltd’s investment in the future. Powerhouse Ventures Powerhouse Ventures has made excellent progress toward becoming self-sustaining over the previous year. If Powerhouse is successful in the implementation of its growth strategy, CRIS capital may become available towards the end of the SOI period. In the event of this occurring, CRIS Ltd will consult its Shareholder and CCHL as primary overseer of its governance and through them, CCC as to priorities for the use of this capital to support economic development initiatives. Commercialisation Partner Network Contract CRIS Ltd’s Commercialisation Partner Network $4.1M contract with MBIE supports the delivery of CDC’s innovation strategy. The contract has five key delivery areas as follows:

1. Increased commercialisation via existing business through provision of soft infrastructure 2. A coordinated Canterbury regional innovation system 3. Increased commercialisation from Canterbury based PROs (UC, LU, CDHB and CRIs) 4. Growth in the scale and capability of the high value manufacturing and services in Canterbury through

provision of services and initiatives which support business innovation 5. Increased private sector engagement with Public Research Organisations (PROs)

It is our intent that the delivery obligations of this contract will be met by CDC with the transfer of CCC funding to CRIS Limited to be passed through to CDC to support the matched funding obligation of this contract. New Zealand Food Innovation (South Island) Limited (FoodSouth) Contract CRIS Ltd is contracted to provide operational funding to Food South over the next three years.


SUBSIDIARY & ASSOCIATED ENTITIES New Zealand Food Innovation (South Island) Limited (FoodSouth) CRIS holds 50.1% of the shares in New Zealand Food Innovation (South Island) Limited (FoodSouth). FoodSouth was incorporated by CDC in 2010 for the purpose of entering into a funding agreement with the then Ministry of Economic Development (now part of the Ministry of Business Innovation and Employment). FoodSouth is a member of the national Food Innovation Network and holds 25% of the shares in the network company and provides resources under the terms of a contractual agreement with the network for the delivery of some network services. The purpose of FoodSouth is to increase exports of Food & Beverage products from New Zealand via the provision of a South Island food processing pilot plant and a complementary suite of services. Powerhouse Ventures Limited (Powerhouse) CDC was an establishment shareholder of Powerhouse when the company was formed in 2008 to meet an identified market failure at that time, to provide a source of capital for intellectual property based, early-stage ventures. CRIS Ltd now maintains a minority interest in the entity on CDC’s behalf. Powerhouse is the Fund Manager for CRIS Ltd under the terms of a Fund Management Agreement entered into between Powerhouse and CEDF (subsequently assigned to CRIS Ltd). CRIS Ltd has made investment decisions based on the recommendation of Powerhouse, within the scope of the CRIS mandate to support economic development activity in the region. However, Powerhouse has evolved to become a national technology incubator headquartered in Christchurch and holds a funding contract with Callaghan Innovation that provides support of its operations and enables Powerhouse to access repayable grant funding of up to $450k per venture. CRIS Ltd has previously supported the activity of Powerhouse by investing in the early stage technology companies identified by Powerhouse. CRIS Ltd investment has been leveraged via this model on at least a 4:1 basis, with the CRIS investment attracting investment dollars to the region, including the Callaghan repayable grants, along with funds from both the national Seed Co-Investment Fund (SCIF) and private sector investors. Powerhouse are now in a position to continue this activity without further direct investment support from CRIS Ltd. During the year Powerhouse has progressed its plans to become a publically listed investment company and this strategy is expected to be implemented during the coming three-year period. Supporting Powerhouse to achieve this strategy is an identified priority for CRIS Ltd. CRIS Ltd has now transferred its portfolio of investment interests into the restructured Powerhouse investment vehicle; ensuring that Powerhouse will have the asset base required to progress its plans to raise capital on a much larger scale and ultimately become self-sustaining. CRIS Ltd has retained its shareholding in Powerhouse to support the company through to the achievement of a public listing and beyond, as required to ensure the success of the listing process. However, the planned Powerhouse process involves significant risks and there remains potential downside risk as well as hoped for potential uplift. CRIS Ltd’s percentage shareholding will decrease over time through both further capital raises by Powerhouse and phased liquidation of shareholding as appropriate.


KEY PERFORMANCE INDICATORS

Operational targets are compiled from a combination of activities required to deliver the outcomes identified in the three-year plan and to meet the requirements of external funding contracts.

Strategic Priority Activity 2016/17 2017/18 2018/19

Maintain sufficient capital to enable CDC to catalyse and invest in economic development initiatives

Maintain investment in Powerhouse Ventures without further investment

Cease new investment

Cease new investment

Seek managed

recovery of capital

Support Powerhouse ventures to grow and become self-sustaining via a public listing

Maintain

Maintain Maintain

Operational delivery of CRIS funding contracts is transferred to CDC

CPN contract performance obligation is delivered by CDC

Sub-contract in place

Sub-contract in place

n/a

Food South operational funding contract is monitored by CDC executive

Monitor Monitor Monitor

FoodSouth

FoodSouth is effectively governed

Transition from establishment Board

Appoint new Directors and

Chair

Monitor Monitor

National Food Innovation Network Company is transitioned to National Ownership

Coordinate longer term strategy with Callaghan Innovation

Transition FIN Co. to CI run

structure

Maintain operating

relationship with FIN

Maintain operating

relationship with FIN

Support is available for South Island food and beverage businesses

South Island Food Processing Pilot Plant is being utilised by businesses in Christchurch & Canterbury

20 businesses using facility



A suite of services is delivered to businesses

Deliver Deliver Deliver


Financial Performance Targets

CRIS Financial Objectives

Objective Performance

1. CRIS Financial Performance meets shareholder expectations (budget).

CRIS meets or exceeds budgeted key performance measures.

2016 2017 2018

$000 $000 $000

Other Funding 100 100 100

Shareholders Funds/

Total Assets 80% 79% 78%

Cash Balances – maintain sufficient funds to meet working capital commitments over the course of a five-year period.

2. CRIS’s capital structure and funding model is appropriate for the nature of its business.

CRIS moves to reduce overhead costs to minimum level following assignment of operational commitments to CDC

3. CRIS’s treasury management policies and practices are consistent with best practice.

CRIS to review its Treasury Policy biennially.

4. CRIS’s Accounting Policy is consistent with shareholder requirements and complies with IPSAS.

Annual external audit reviews do not highlight any material issues.

FOODSOUTH Financial Objectives

1. FoodSouth’s performance is in line with expectations.

FoodSouth achieves budget and objectives set out in their Annual Operating Plans.

2. FoodSouth retains sufficient reserves to meet its obligations as they fall due.

3. The Accounting Policies of CRIS Subsidiaries are consistent with shareholder requirements and comply with IPSAS.

Annual external audit reports are completed and do not highlight any material issues.


REPORTING & MONITORING CRIS reports Quarterly to CDC on operational and financial results and the activity of FoodSouth. FoodSouth reports Quarterly to CRIS Ltd & Callaghan Innovation against its contractual deliverables and Quarterly to Callaghan Innovation and the CRIS Limited board regarding progress against its business plan

CORPORATE GOVERNANCE

The CRIS Board of Directors is currently comprised of the independent members of the CDC board, the CDC Chief Executive, one Councillor Director and one additional independent director. It is proposed that an Executive Board be appointed in place of the existing independent Board. A dual reporting framework will be developed to ensure effective input and monitoring of this entity by the CDC Board. The FoodSouth board make up is determined by the terms of a Shareholders Agreement between CRIS Ltd & Callaghan Innovation. CRIS Ltd holds the right to appointment a majority of board members with Callaghan and Lincoln University each holding the right to appointment a board member. CRIS Ltd will ensure that the board representation appointed on its behalf has an appropriate level of food industry and commercialisation experience, while retaining an alignment between the objectives of FoodSouth and CRIS Ltd. Public Benefit Entity CRIS Ltd and FoodSouth are not for profit entities that act for the public good. FoodSouth exists for the purpose of providing targeted support for the SI high-tech food and beverage sector. CRIS Ltd and FoodSouth consider the community and environment in all of their activities. Role of the Board of Directors (this section relates to both the governance activity of CRIS Ltd and FoodSouth) The Board is ultimately responsible for setting the strategic direction of the company, oversight of the management of the company and direction of its business strategy; with the ultimate aim being to make a significant contribution to the shareholder’s vision and wishes for the economic development of Christchurch city and the city’s surrounding area of interest. The Board is accountable to the shareholder for the performance of the company. The Board draws on relevant corporate governance best practice principles to assist and contribute to the performance of CRIS Ltd and FoodSouth. The functions of the Board include: 2. Seeking advice from shareholders on matters of policy and strategic direction; 3. Providing strategic direction for, the company’s business strategies and objectives; 4. Reviewing and approving the company’s budgets and business plans and monitoring the management of the

company’s capital, including the progress of any major capital expenditure, acquisitions or divestitures; 5. Providing leadership of the company within a framework of prudent and effective controls which enables risk

to be assessed and managed; 6. Identifying the principal risks faced by the company and taking reasonable steps designed to ensure that

appropriate internal controls and monitoring systems are in place to manage and, to the extent possible, reduce the impact of these risks;

7. Monitoring the operational and financial position and performance of the company; 8. Requiring that financial and other reporting mechanisms are in place which result in adequate, accurate and

timely information being provided to the Board and the company’s shareholder and the financial market as a whole being fully informed of all material developments relating to the company;


9. Appointing the Chief Executive, where appropriate, approving other key executive appointments, planning for executive succession and monitoring the performance of the Chief Executive and other senior executives, having regard to the company’s strategic direction and goals;

10. Reviewing and approving the company’s remuneration policies; 11. Establishing procedures to ensure that financial results are appropriately and accurately reported on a timely

basis in accordance with all legal and regulatory requirements; 12. Adopting appropriate procedures to ensure compliance with all laws, governmental regulations and

accounting standards; 13. Approving and regularly reviewing the company’s internal decision making and compliance policies and

procedures, including any codes of conduct, this Charter and the charters of the Board’s Committees; 14. Ensuring that the company’s internal decision making and compliance policies and procedures are adhered

to, to ensure that the business of the company is conducted in an open and ethical manner; and; 15. Appointing board members or representatives for the subsidiary entities.

All Directors are required to comply with a formal Code of Conduct which is based on the New Zealand Institute of Directors’ Code of Proper Practice for Directors. The Board generally meets at regular intervals as set out in the Annual Board Work Plan and at other times as required. Board Committees The Board may, from time to time, establish committees to assist it in carrying out its responsibilities. For each committee the Board adopts a formal charter that sets out the delegated functions and responsibilities for, and the composition and any administrative matters relating to, that committee. Board Composition and Fees The composition of the Board of Directors is determined by CDC as shareholder, in the case of CRIS Limited and in accordance with the Shareholders Agreement in the case of FoodSouth. Directors’ fees are set by the board and consider advice from CCHL. Board fees are not payable to Executive Directors and in the case of FoodSouth, require Shareholder approval. Subsidiary Board Members All directors of subsidiary companies are selected for their commercial expertise and aptitude. It is established practice for representatives of the subsidiary board and management to meet with the Shareholder at least twice a year, to discuss the company’s strategic direction and any significant issues that arise. The Shareholder Board also receives such other reports as are necessary to perform its monitoring function; however, the Shareholder does not involve itself in the management of subsidiary companies. Accounting Policies CRIS Ltd and FoodSouth have defined themselves as a Public Benefit Entity (PBE) for the purposes of financial reporting. The company’s current accounting policies are consistent with New Zealand International Public Sector Accounting Standards, generally accepted accounting practice and in accordance with the Companies Act 1993 and the Financial Reporting Act 1993 and any amendments thereto. A full statement of the CRIS Limited accounting policies is included in Annual Report for 30 June 2015 on the CDC website www.cdc.org.nz . The accounting policies of CRIS are unchanged and are expected to be consistently applied.

http://www.cdc.org.nz/


DISTRIBUTIONS

Company not carried on for Private Pecuniary Profit None of the capital or income of the company shall be paid or transferred directly or indirectly by way of dividend, distribution or otherwise for the private pecuniary profit of any individual. This does not prevent the payment in good faith of reasonable remuneration to any directors or employees of the company, to any other person for services rendered to the company or to subsidiary entities in the furtherance of the objectives of the company.

ACQUISITION/DIVESTMENT PROCEDURES

Part of the role of CRIS Limited is that of an investment vehicle. Acquisitions and divestments will occur in the ordinary course of operations and unless significant will not be a matter for shareholder consultation. Acquisition and divestments are subject to the CRIS Limited Constitution and must be consistent with the long term objectives of the CRIS Limited board and shareholder. When the subscription, acquisition or divestment is considered by directors to be significant to the company’s business operations, it will be subject to consultation with the shareholder (CDC). Major transactions as defined in the Companies Act 1993, s 129(2) will be subject to shareholders’ approval by special resolution and CDC will act in accordance with its own obligations to CCC as the ultimate controlling entity in this regard.

INFORMATION TO BE PROVIDED TO SHAREHOLDERS

CRIS will provide information requested by the shareholder in accordance with the requirements of the Local Government Act 2002. CRIS will disclose as much information on its operations as is practical and consistent with its nature as a wholly owned subsidiary. CRIS will always operate on a “no surprises” basis in respect of shareholder related matters, As a minimum this will involve: 1. Annual report and audited financial statements within 90 days of balance date 2. Annual report against performance indicators 3. A quarterly update report including a financial and activity update 4. A quarterly report on the health and safety practices and performance of the business.

COMPENSATION FROM LOCAL AUTHORITIES

The CRIS Ltd group currently receives funding from CCC of $343,000 annually. Services performed in exchange for this compensation are set out in the CCC three-year plan and are included in the operating objectives set out in this document. It is intended that this funding be passed to CDC to support the delivery of operational activity, to be assigned from CRIS Limited to CDC.

VALUE OF SHAREHOLDERS’ INVESTMENT

The CRIS directors estimate that the value of the shareholder investment in the group is at least that which is stated as “shareholders’ equity” in the latest available audited financial statements. This value is reassessed annually as part of the preparation of the audited financial statements.


ROLE IN THE CCC/CCHL GROUP AND REGIONAL ECONOMY

Commercial relationships within the CCC/CCHL Group Wherever possible, CRIS and FoodSouth will work with other group companies to benefit the CCC and CCHL Group and the Canterbury region.

Role in the growth of the regional economy CRIS and FoodSouth will work proactively with other organisations, business and the CCC and CCHL Group to drive regional economic growth. Other Matters Requiring the Approval of the Shareholder CRIS will bring to the attention of Shareholders:

Any matters of critical concern

Major transactions as defined in the Companies Act

ATTESTATION

Chairperson Signed for and on behalf of the Board of Directors

Documents

CDCHL Statement of Intent 2016-19 - ChristchurchNZ ... Statement of Intent 2016 - 19 Page | 1 of 30 ANTERURY DEVELOPME NT ORPORATION HOLDINGS LIMITED 2016 – 2019 STATEMENT OF INTENT