td a a L r e P t 9 - Port Taranaki · a a L r e P t 9 Directors ... A Liebherr LHM 1200 crane was ... Some significant heavy lifts were handled by the two Liebherr LHM 400 cranes

Port taranaki Limited annuaL rePort 2009

Port taranaki Limited annuaL rePort 2009

Directors

John Young JP, Chairman

John Auld, Deputy Chairman

Peter Horton

Neil Leuthart (retired 26 September 2008)

David MacLeod

Craig Norgate

David Walter QSO, JP

Company Secretary

Bronwyn Clement

Executive Officers

Roy Weaver, Chief Executive

Ray Barlow, Operations Manager

Bronwyn Clement, Corporate Support Manager

Jon Hacon, Business Development Manager

Noel Henderson, Human Resource Manager

David Sharman, Chief Financial Officer

Auditors

Deloitte on behalf of the Auditor-General

Bankers

Bank of New Zealand Limited

Westpac Banking Corporation

Solicitors

Govett Quilliam

Contact Details

Breakwater Road

PO Box 348

New Plymouth 4340

New Zealand

Telephone: 64 6 751 0200

Facsimile: 64 6 751 0886

Website: www.porttaranaki.co.nz

Email: [email protected]

rePort 2009Port taranaki Limited and GrouP

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“PROVIDING SUBSTANCE TO TARANAKI’S ECONOMY BY OPERATING A SUCCESSFUL AND SUSTAINABLE BUSINESS”MISSION STATEMENT OF PORT TARANAKI LIMITED

Highlights 2

2008/2009 Review 3-8

Statutory Information 9

Environmental Report 10-11

Social Report 12-13

Financial Statements 14-39

Report of the Auditor-General 40

Comparative Review 41


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HIGHLIGHTS

2009 2008

Revenue ($m) 46.59 42.79

Profit before interest and taxation ($m) 10.87 11.28

Net profit after taxation ($m) 5.42 4.76

Total shareholder’s equity ($m) 90.78 89.26

Interest bearing debt ($m) 40.56 35.30

Shareholder’s equity to total assets ratio 65.39% 67.97%

Net profit before tax to equity ratio 8.99% 8.97%

Interest bearing debt to equity ratio 44.68% 39.55%

Total dividends ($m) 3.90 1.80

Dividends per share (¢ per share) 7.50 3.46

Number of employees at period end 129 122

Total trade (millions of freight tonnes) 3.52 3.38

Vessel arrivals (over 100 GRT) 695 927

Total gross registered tonnage (GRT)(millions) 6.39 7.2

Berth Occupancy:

General berths 25% 50%

Tanker terminal berths 19% 19%

Service berths 29% 34%


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2008/2009 REVIEW

We are pleased to present this twenty-first annual report on the affairs of Port Taranaki Limited to 30 June 2009.

FINANCIAL PERFORMANCERevenue from operations increased 9.01% from $42.75M in 2008 to $46.6M on account of higher liquid bulk volumes, higher drystore and coldstore utilisation, and associated container facility throughput. Revenue increases also resulted from increased plant and equipment utilisation related to the oil and gas offshore programme, particularly the Awakino South drilling.

Net profit after tax was $5.42M in 2009 in contrast to the 2008 figure of $4.76M on account of the improved revenue achieved.

Net profit after tax represented a 5.97% return on shareholder’s equity of $90.78M. The shareholder’s equity to total assets ratio remains strong at 65.39%.

Cashflows from operations amounted to $14.41M in 2009 which, when supplemented with an increase in borrowing of $5.26M, allowed for fixed asset investment of $15.78M and the payment of $3.9M in dividends to the shareholder (up from $1.8M in 2008).

The company’s $50M banking facility with Westpac was renegotiated in May 2009 and the term of the facility extended to 31 October 2012.

TRADING ENVIRONMENTThe port’s trading year was again a positive one with 3.9% growth from the 2008 result in actual volumes handled. The upturn in total cargo volumes through the port that began in 2007 has continued through 2008 and into the 2009 financial year, despite the global financial crisis. Volumes have been buoyed again by increased activity principally in the energy sector.

The recommissioning of methanol production assets offset a downturn in crude oils shipped resulting in an overall increase in bulk liquid volumes shipped, from 2.24 million tonnes in 2008 to 2.44 million tonnes.

Hydro-electric lake levels during the winter remained high thus lowering gas uptake by the power generation industry. Consequently, crude oil production was affected by the decreased gas uptake and volumes declined by 80,000 tonnes from those recorded last year.

LPGs recorded another decrease in line with budget expectancy, however, a lift in volumes is expected in the current financial year with the coming on stream of the Kupe field.

Petrol and Oil volumes predictably fell with higher pump prices reducing consumer uptake.

Major trade variances in petrochemicals were:

• Methanol,up71% • LPGs,down58% • PetrolandFuelOil,down19% • Bitumen,down53%

Fertiliser trades dropped away for the second year in succession to just a third of their 2007 levels.

TOTAL TRADE VOLUMES 2005-2009

4,000

3,500

3,000

2,500

2,000

1,500

1,000

500

0

(000

s ton

nes)

2005 2006 2007 20092008

BULK LIQUIDS 2005-2009

3,000

2,500

2,000

1,500

1,000

500

0

(000

s ton

nes)

2005 2006 2007 20092008

CONTAINER VOLUMES 2001-2009

70,000

60,000

50,000

40,000

30,000

20,000

10,000

0

TEU

2001 2002 2003 2004 2005 2006 2007 20092008


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The port posted a new record in containers with 65,168 TEU handled during the year.

Forecast volumes in the petrochemical industries for the next three years look promising and indicate continued growth.

The port continues to promote its strategic positioning and is looking forward to the results of the government sponsored Blue Highways study which is examining the freight task and intermodal solutions for New Zealand’s western seaboard. The results of the study should be known by early 2010.

Our thanks, again, to our customers for their support and for successes past and future.

OPERATIONSThe year started with the delivery of launch Rawinia for a contract with Shell Todd Oil Services Limited (STOS) to transfer maintenance crews and their equipment to the Pohokura Platform B. Rawinia is a 17.5 metre alloy rigid inflatable crew boat built to exacting oil industry standards providing motion damped seating for ten passengers and two crew, full self righting capability, and is capable of being sealed off in an inflammable gas cloud and sustaining life with a built-in emergency air supply.

A Liebherr LHM 1200 crane was purchased from PrimePort

Timaru to service the supply base contract with OMV for the Maari development.

Adverse weather in July 2008 caused siltation of the shipping channel which required dredge Pelican to be called in to undertake an emergency dredging campaign to remove 30,000 cubic metres to return the channel to the design depth. This is the first occasion that this has been required since dredging was contracted out in 1987.

The MetOcean forecast system, the recently upgraded environmental monitoring system, and the Dynamic Under Keel Clearance system proved to be invaluable tools in managing operations during these adverse weather conditions.

Tug Rupe was involved in assistance to off-take tankers and the FPSO Umuroa on 18 occasions and tug Tuakana twice during the year. This was less than 50% of the previous year due to reduced production from the Tui field and the loading of more product onto individual ships at each hook up.

The acquisition of tug Kupe from Centreport allowed the company to take up a four month contract for a safety standby vessel for the drilling of the Awakino South well utilising the Tuakana.

The Tuakana also undertook towage of the rig Ensco 56 on and off location at Awakino, a tow to Admiralty Bay as well as


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2008/2009 REVIEW

the rig float on operation at Admiralty Bay. Earlier in the year the vessel was used to assist operations for Origin Energy Resources (Kupe) Limited (Origin Energy) on the Kupe site. The Centreport tug Toia was hired to replace the Tuakana for the duration of the contract.

The impact of greater draft being available again impacted on Newton King Tanker Terminal (NKTT) as larger parcels were the norm, particularly for methanol. The deepest draft vessel ever handled was the methanol tanker Midnight Sun in February 2009 at 12.25 metres.

The vehicle carrier Tampa visited the port in May 2009 to discharge cargoes for the Stratford Peaker Project and was the largest ship by gross tonnage (66,635 GT) to ever visit the port.

The port has been the shore base for the ongoing development drilling of the Maari oil field, the base for an exploration well at Awakino South for STP Energy Limited, and the ongoing base for support of the Maui, Tui, Kupe, and Pohokura fields.

Origin Energy’s new condensate export pipeline to link their new Omata tank farm storage with NKTT was under construction during the year.

The port assisted with an audit of STOS marine operations by a business review team from STASCO London and The Hague. A structural review was conducted of NKTT to meet the new international standards required by Intertanko. Blyde 3 was treated similarly.

The port continued to provide a secure environment with no security breaches and a clean security audit by Maritime New Zealand during the year. An average of 9,000 vehicles per week come in and out of the port.

A total of 1,434 persons attended site safety inductions during the year. The company’s ‘permit to work’ system was under review to provide alignment with changes in the petro-chemical industry standards and best practice.

Blyde Terminal had a record year and during the peak season up to 10,000 TEU were stored either on the terminal, on other areas within the port gates, or on the Eastern Reclamation.

Two new reach stackers and one empty-stacker were purchased. A further 108 reefer plugs on a four high reefer gantry were commissioned to meet the increasing business and to reduce the reliance on diesel powered generators.

Some significant heavy lifts were handled by the two Liebherr LHM 400 cranes including the Taharoa single buoy mooring (SBM) weighing 178 tonnes lifted out for maintenance and the Fitzroy super yacht Salperton IV launched at a weight of 231 tonnes.

PROPERTYABB Grain (NZ) Limited’s dry store facility on the Eastern Reclamation was completed in late 2008.

Demand for short term leases on the Eastern Reclamation continued with laydown for project cargoes for the Kupe project, the refurbishment of the Taharoa SBM, and the construction of additional concrete mattresses for the Pohokura pipeline.

The site at 91-99 Breakwater Road was cleared and grassed. This block, along with the adjoining site at 20-22 Pioneer Road, is now available for port related development.

There were three meetings of the Ngamotu Port Taranaki Liaison Group for the Port Areas of Mutual Interest (PAMI) during the year. Updates on port developments were provided at each meeting.

The recreational areas continued to be popular with all groups. The triathlon festival was held 3-5 April 2009.

Submissions were made on the New Plymouth District Council’s Long Term Community Plan including the Eastern Harbour development, the Lee Breakwater toilets, the extension of the coastal walkway between the Lee Breakwater and Pioneer Park ramp, and the Belt Road extension. As a result Council has budgeted for the construction of new toilets at the Lee Breakwater in 2009/2010.

The Port Taranaki Centre in Bayly Road is scheduled for completion in August 2009.


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PERSONNELThe port operates 24 hours a day, seven days a week, 365 days per year, and it requires a lot of commitment, skill and flexibility in all of its activities. Port Taranaki endeavours to employ the best people available to work in this challenging environment.

It has been a busy year for everyone. Thank you to all staff for the way in which challenges have been met. New systems and advanced technology continue to develop but people will always remain the cornerstone of our business. Staff can be proud of their achievements in the last year.

Developments in the offshore oil and gas continued to keep

staff busy for most of the year as requirements gradually changed from one of servicing construction needs to servicing the production requirements of the three new offshore production facilities for the Pohokura, Tui, and Maari fields.

Permanent staff numbers increased by two to 129 permanent fulltime employees. There were seven permanent part-timers plus five fixed-term employees to cover for parental leave and project work. Casual employees total seventeen.

The company has continued to celebrate milestones which recognise the long service of many employees – 23% have now worked for the company in excess of 20 years and 15% in excess of 10 years. Turnover continues to be low and is largely

6rePort 2009Port taranaki Limited and GrouP

From left to right: Back – David MacLeod, Peter Horton, Ray Barlow, John Young, Peter Atkinson, Craig Norgate, David Walter and Noel Henderson. Front – John Auld, Jon Hacon, Roy Weaver, David Sharman and Bronwyn Clement.

BOARD OF DIRECTORS AND EXECUTIVE OFFICERS


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2008/2009 REVIEW

due to people leaving for retirement.

Communications is an ongoing challenge and one that the company is constantly working to improve. After seven years of publication the weekly staff newsletter still continues to be very popular and remains, to a large degree, the major communication contributor within the port.

The Chief Executive made two “State of the Nation” presentations during the year to update all staff on the company’s performance, future developments, and other topics of significance and interest.

In the 2008/2009 year three more Cargo Handlers completed their National Certificate in Cargo Handling.

The Health & Safety Co-ordinator continued to attend the quarterly meetings of the National Ports Health & Safety Forum during the year. This forum was set up to maximise shared resources in order to raise the health and safety bar

across all ports. Such has been its contribution to ports on a national basis that the forum has been extended to include stevedoring companies. The forum is not only recognised by the port industry but also by organisations such as Maritime New Zealand and the Department of Labour Occupational Safety and Health (OSH) Unit.

A number of the company’s employees continued to provide consultancy service/advice in the field of industrial relations, mooring systems, health and safety, marine accident investigation, and servicing requirements for the offshore oil and gas industry.

At the Westpac Taranaki Chamber of Commerce Business Awards in September 2008, Port Taranaki was presented with the Westpac Supreme Business and Taranaki Chamber of Commerce Extra Large Business Awards. The company was also commended for the Implement Employer of Choice Award.

BOARD OF DIRECTORS


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GOVERNANCEAt the September 2008 annual meeting, David MacLeod was re-elected as director of the company. Neil Leuthart did not seek re-election. Eight board meetings were held during the year.

As provided by section 42 of the company’s constitution, John Auld and Craig Norgate retire by rotation at the upcoming twenty-first annual meeting of the company. David Walter retires at the annual meeting.

The board’s audit committee comprising John Auld (Chairman), Peter Horton, David MacLeod, and Craig Norgate met on three occasions during the year.

The board’s personnel committee comprised John Young (Chairman), David MacLeod, Craig Norgate, and David Walter. They met on four occasions.

OUTLOOK FOR 2009/2010The Port has over the past decade developed five key business areas. These are:-

n bulk liquids handling (NKTT); n offshore support for oil and gas exploration; n bulk dry cargo handling (animal feeds/fertilisers); n container and general cargo handling; and n storage and property activities.

The outlook for the 2009/2010 financial year is for a very challenging year. Bulk liquids flowing over NKTT are forecast to be slightly above last year’s levels. Offshore support will be at lower levels than last year due to a drop in programmed work in offshore oil and gas exploration and development.

Bulk dry cargo handling is also expected to be down due primarily to weaker global economic conditions leading to

tougher times for farmers and reduced demand for imported animal feed and fertiliser.

Container handling is anticipated to be down by 35% due to Fonterra’s decision to ship Whareroa’s South-east Asian product by rail to Auckland, Tauranga, and Napier ports to gain access to a wider choice of shipping services. Port Taranaki will continue to handle Fonterra’s North Asian and Australian cargoes. Fonterra has signalled that Port Taranaki will gain the handling of Eltham processed cheese exports to Australia. Cold and dry storage activities associated with containers will be down on last year reflecting the lower container throughput.

Property activities are anticipated to remain at last year’s levels.

Overall profitability will be impacted by weaker trading conditions, however, the year end result is anticipated to reflect the robust nature of Port Taranaki’s revenue streams.

The 2009/2010 year will be one of adjusting to new circumstances in the container trade and continuing to build and diversify into areas of known opportunity.


John Young ChairmanRoy Weaver Chief Executive


STATUTORY INFORMATION

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STATUTORY INFORMATIONComparison of Performance with Statement of Corporate Intent

As required under section 16 (4)(a) of the Port Companies Act 1998, a comparison of the performance target in the Statement of Corporate Intent for the period 1 July 2008 to 30 June 2011 is shown below:

2009 Target Actual Achieved

Financial:Return on average total assets (EBIT/ATA) 5% 8% YesReturn on average shareholder’s funds (NPAT/ASF) 4% 6% Yes

Non-financial:Wharf Utilisation

Moturoa 1 and 2 40-50% 26% No Newton King 25-35% 19% No Blyde 1 and 2 20-25% 26% Yes Breakwater 1 and 2 40-50% 39% No

Wharf utilisations did not meet targets due to a reduced number of offshore supply vessels at Moturoa 1, a decrease in the number of fertiliser and grain vessels at Moturoa 2, below budget volumes for Newton King, and the completion of most offshore support contracts for Breakwater 1 and 2.


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ENVIRONMENTAL REPORT

KEY PERFORMANCE INDICATORS(1) Non Compliance Notices for Port Taranaki’s Activities

This year the port’s incident recording system logged 15 incidents of an environmental nature as set out in the table below. A review of these incidents reveals that most were generated by third parties working in the port area and points to good environmental awareness amongst Port Taranaki Limited’s staff and the need for vigilant oversight of the activities of others.

No compliance notices were issued in respect of any of these incidents. The discharges to land and water usually involved small spills of oil from vessels or plant.

Discharges to air arose from a variety of causes including smoke from a vessel, truck generated dust, cargo handling, and sandblasting. Three of the incidents resulted in complaints from

the port’s neighbours. All were dealt with quickly to ensure that no long lasting effects were experienced.

Two noise complaints arose and these were associated with cargo operations at night. These incidents resulted in the engagement of an independent consultant to review practices and identify the means to reduce noise generation. The recommendations have resulted in increasing the awareness of port staff and port users of the potential for noise generation and the institution of practices to reduce noise events. The complainants were involved in this review process and expressed their appreciation for the efforts made to deal with the issue.

It is pleasing to note that the level of environmental incidents is down on previous years.

(2) Ngamotu Beach Water Quality

Ngamotu Beach is well used over the summer months for recreational purposes. State of Environment sampling by the Taranaki Regional Council indicated that bacteriological water quality was generally good with 18 of 20 samples collected over the 2008-2009 summer falling below guideline ‘Alert’ levels. One sample exceeded ‘Alert’ guidelines, while one sample exceeded ‘Action’ guidelines. Both of the elevated samples were found to have lowered conductivities, indicating freshwater intrusion as the source of the bacteria.

The current Environmental Management Plan was promulgated in December 2003 and a review commenced during the year. The purpose of the review is to ensure that the plan continues to deliver appropriate levels of environmental performance for the company which are consistent with the port’s environmental impacts and sustainability objectives.


InCIdEnt typE InCIdEntS InCIdEntS non- ComplIAnCE lASt yEAR tHIS yEAR notICES

dISCHARGE to lAnd 8 3 nonEdISCHARGE to wAtER 3 5 nonEdISCHARGE to AIR 5 4 nonEnoISE 6 2 nonEotHER 2 1 nonETOTAL 24 15 NONE

ENVIRONMENTAL POLICYPort Taranaki places a high value on the quality and long term sustainability of the environment in which it operates. Accordingly, Port Taranaki gives a commitment to its stakeholders ensuring that its activities are conducted in a manner that will avoid, remedy, or mitigate, to the most practical extent, any adverse effect on the environment.


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ENVIRONMENTAL REPORT


(3) Marine Pollution Incidents and Accidents

There were no marine pollution incidents and accidents except as noted above.

COMPLIANCE MONITORING AND STATE OF THE ENVIRONMENTThroughout the year the Port has been the subject of two monitoring reports by the Taranaki Regional Council (TRC). The first has been the annual resource consent compliance monitoring and the second has been the port state of environment data collection programme.

The annual compliance monitoring programme has concluded that:

During the year Port Taranaki Ltd demonstrated a good level of environmental performance and compliance with resource consents. There were three unauthorized incidents associated with Port Taranaki, contingency procedures were followed and no significant adverse environmental effects occurred.

The state of the environment data collection programme is part of the port’s Environmental Management Plan activities.The project collected data on a wide variety of water quality parameters to provide a measure of the environmental foot print with respect to the water quality of the port. Data was collected on:-

➢ sediment quality; ➢ bioaccumulation of chemicals;➢ intertidal ecology; ➢ water quality; and ➢ invasive species.

The draft report included information that allows the following conclusions to be drawn.

➢ Levels of hydrocarbons, arsenic, and cadmium in sediments collected from sites within Port Taranaki did not indicate significant contamination. Levels of DDT, TBT and zinc were also low when compared to ANZECC1 and ARC ERC2’s guidelines. Copper, while below AZECC guidelines in every sample, was above ARC ERC values.

➢ The results of tissue analysis did not indicate contamination of mussel populations in Port Taranaki (and hence water quality) with most metal concentrations either below ANZFSC3 guidelines (lead, cadmium) or, where no guideline exists, concentrations were undetectable (chromium) or found at levels similar to the control samples. Arsenic, however, was an exception with, levels above ANZFSC guidelines for food in both samples collected at the port and the control site (Arakaitai Reef ). However, these results were low by comparison with overseas survey findings and information from Food Standards Australia New

Zealand indicates no plausible risk.

➢ The diversity and abundance of intertidal species within the port was found to be much less than on the natural reef outside the port (Kawaroa). This was an expected result because of the different substrate environments of the two sites.

➢ Bacteriological water quality was found to be generally very good at all sampled sites within the port during fine weather, comparing well with control sites outside of the port. As with most locations around Taranaki, samples collected after significant rainfall often contained high levels of bacteria.

➢ Biosecurity New Zealand has undertaken surveys to determine a baseline inventory of native, non indigeneous, and cryptogeninc marine species in New Zealand. The only species on the register of unwanted organisms in New Zealand within Port Taranaki was the Asian kelp, Undaria pinnatifida. Other non indigenous species within the port were likely introduced by international shipping. The predominance of hull fouling species in the introduced biota of the port is consistent with findings from similar overseas ports.

This report is a very useful document which will enable Port Taranaki to monitor the effects of its activities and those of others that contribute contaminants to port waters in the future. It identifies some challenging areas (invasive species) as well as providing sound data on which to conclude that Port Taranaki’s environment is not being subjected to severe adverse impacts. This data collection programme will take place at regular intervals in the future to enable ongoing monitoring of the port’s impact on the environment.

In addition, the TRC monitoring of the Port’s coastal permit for inshore disposal of maintenance dredging has not detected any adverse effects on the abundance and diversity of intertidal species.

OTHERThe recycling of printer toners through the Toner Recycle Centre has continued.

The company sponsored the Department of Conservation’s “Seaweek” and the New Zealand Coastal Society’s conference in New Plymouth.

Company representatives attended the Moturoa School ‘Trees for Survival’ open day on 10 September 2008. Moturoa School joined the nationwide ‘Trees for Survival’ programme in 1996 with the propagation unit being assembled by New Plymouth Rotary West and funding from Port Taranaki.

¹ Australian and New Zealand Environmental and Conservation Council ² Auckland Regional Council Environmental Response Criteria ³ Australian New Zealand Food Standards Code (2002)

SOCIAL REPORT

COMMUNITY• Paiddividendof$3.9Mtoitssoleshareholder,Taranaki

Regional Council.

• SponsoredTriathlonNewZealand$75,000,theTaranakiRugby Union $25,000, and the Taranaki Arts Festival $12,000.

• ContinuedtosponsortheTaranakiVolunteerCoastguardvessel, Westgate Rescue.

• Continuedtoprovidepeppercornleaserentalchargesto New Plymouth District Council, the Department of Conservation, and the Taranaki Volunteer Coastguard.

• Continuedtodiscountleaserentalchargestocommunityorganisations.

• Providedandmaintainedaccesstopublicareasincludingthe boat ramp, jetties, and car/trailer parking at the Lee Breakwater for public enjoyment.

• Continuedtoprovidelawn-mowingservicesatWaitapuCemetery, Bayly Road, for Waitapu Urupaa Trustees.

• Sponsoredsportingactivitiesincluding:-CliftonRowingClub for the Taranaki Secondary Schools Rowing Regatta, Flannagan Cup Open Water Swim, Icebergs Swim Squad, Manukoriki Golf Club for the driving range, New Plymouth

Boardriders Club (juniors), New Plymouth Yacht Club, New Zealand Kiteboarding Nationals, Okato fun run/walk, Taranaki Multisport & Triathlon Club, and Taranaki’s Surf Life Saving organisations.

• SponsoredtheconstructionofalocalmemorialattheCapeEgmont Lighthouse.

• ContinuedtoconsultwiththeNewPlymouthDistrictCouncil and Ngati Te Whiti on the development and management of recreational areas in the vicinity of Ngamotu Beach (Port Areas of Mutual Interest) through the Ngamotu – Port Taranaki Liaison Group.

• ProvidedthevenuefortheNewPlymouthTriathlonfestivalincluding the Weetbix Tryathon and Continental Cup in April 2008, and other community activities.

• Hostedthebi-annualsearchtrainingforTheRoyalNewZealand Army Engineers dive team.

• Providedforopendaystobeheldonthepowerboat “Earth Race”.

• ProvidedtheregularmeetingvenuefortheMoturoaToastmaster’s Club.

• Conductedporttoursandmadepresentationstovariouscommunity groups.

Over the last year Port Taranaki has continued to work with the community, its customers, and staff.


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SOCIAL REPORT

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CUSTOMERS• Continuedtoprovideforumsfordiscussiononport-related

matters including environmental, health and safety, risk management, and security through the Port Taranaki Safety Advisory Group, Port Taranaki Security Committee, and the NKTT User’s Safety Group.

• ContinuedtobeanactivememberoftheTaranakiTransportNetwork.

• PublishedthreeissuesofthePortTaranakimagazine,‘PORTAL’ , with feature articles on customers.

• TheChiefExecutivecontinuedastheChairmanofEngineering Taranaki Consortium, the Chairman of CApENZ, and a trustee of Venture Taranaki Economic Development Agency.

• TheNKTTManagercontinuedasChairmanoftheOilandGas Specialist Technologies Group.

• ThecompanywasrepresentedontheboardoftheTaranakiChamber of Commerce.

• ProvidedajudgefortheTaranakiChamberofCommerceBusiness Awards.

• HeldacustomerfunctionwithShellToddOilServicesLimited in September 2008 for the commissioning of the marine access craft, Rawinia.

• Conductedporttoursandmadepresentationstocustomers.

• Providedsponsorshipsanddonationsincluding:-CApENZ,Engineering Taranaki Apprenticeship Awards, Maersk Annual Golf Tournament, Port Taranaki Limited Shippers and Exporters Golf Tournament, Taranaki Chamber of Commerce, and Taranaki Federated Farmers Annual Conference.

STAFF• Publishedtheweeklystaffnewsletter,“PortTalk”,andthe

quarterly health and safety newsletter.

• Two“StateoftheNation”presentationsweremadebytheChief Executive to all available staff.

• ContinuedtheavailabilityofEmployeeAssistanceProgramme (EAP) Services to staff and their families.

• Fluinjectionswereofferedtoallstaff.

• Opportunitiescontinuedforstafftojoingroupmedicalinsurance schemes, a subsidised superannuation scheme and Kiwisaver, and the “Westpac Employee Pac”.

• TheChiefExecutivecontinuedasatrusteeoftheNewZealand Harbours Superannuation Plan.

• TheSocialCluborganisedarangeofactivitiesincluding mid and end of year functions and a children’s Christmas party.

• Providedsocialclubfacilitiesandanonsitegymnasium.

• Continuedtoprovidesummervacationemploymentfortertiary students (children of current employees).

• TwoemployeesattendedtheOutwardBoundcourseatAnakiwa.

• SponsoredtheHarryBlydegolftournament.

• SponsoredstaffasmembersofMoturoaToastmaster’sClub.

SOCIAL REPORT


Statement of Comprehensive Income

FOR THE YEAR ENDED 30 JUNE 2009 PARENT & GROUP PARENT & GROUP 2009 2008 NOTE NZ$ NZ$

Continuing operations

Revenue from operations 2 46,585,467 42,749,544

Operating expenses 2 (35,717,739) (31,467,925)

Operating profit before finance income and expenses 10,867,728 11,281,619

Finance income 2 5,352 39,279

Finance expenses 2 (2,715,090) (3,312,010)

Net finance expense (2,709,738) (3,272,731)

Profit Before Taxation 8,157,990 8,008,888

Income tax expense 3 (2,738,914) (3,246,220)

Profit from continuing operations 5,419,076 4,762,668

Profit for the Period (attributable to owners of the company) 5,419,076 4,762,668

Other comprehensive income Revaluation of property, plant and equipment 17 - 14,730,896

Other Comprehensive Income for the Period, Net of Income Tax - 14,730,896

Total Comprehensive Income for the Period (attributable to owners of the company) 5,419,076 19,493,564

Earnings per share basic and diluted (cents per share) 6 10.42 9.16

Statement of Changes in Equity

FOR THE YEAR ENDED 30 JUNE 2009

Issued Retained Revaluation Total Minority Total Capital Earnings Reserve Interest Equity NZ$ NZ$ NZ$ NZ$ NZ$ NZ$

As at 1 July 2007 26,000,000 23,682,301 21,880,937 71,563,238 - 71,563,238

Changes in Equity for 2008

Total comprehensive income - 4,762,668 14,730,896 19,493,564 - 19,493,564 for the period

Dividends - (1,800,000) - (1,800,000) - (1,800,000)

As at 30 June 2008 26,000,000 26,644,969 36,611,833 89,256,802 - 89,256,802

Changes in Equity for 2009

Total comprehensive income - 5,419,076 - 5,419,076 - 5,419,076 for the period

Dividends - (3,900,000) - (3,900,000) - (3,900,000)

As at 30 June 2009 26,000,000 28,164,045 36,611,833 90,775,878 - 90,775,878

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FINANCIAL STATEMENTS Statement of Financial Position

AS AT 30 JUNE 2009 PARENT & GROUP PARENT & GROUP 2009 2008 NOTE NZ$ NZ$

Current Assets

Cash and cash equivalents 7 168,020 255,520

Trade and other receivables 8 4,459,996 5,812,606

Inventories 9 225,051 159,141

Loan - Jebsens 10 - 48,336

4,853,067 6,275,603

Non Current Assets

Other intangible assets 12 1,163,985 162,916

Property, plant and equipment 11 131,688,195 123,604,872

Deferred tax asset 5 1,122,336 1,274,584

133,974,516 125,042,372

Total Assets 138,827,583 131,317,975

Current Liabilities

Trade and other payables 13 3,684,746 3,590,785

Provisions 14 1,941,603 1,643,973

Borrowings 15 - 35,300,000

Taxation payable 4 425,039 72,415

6,051,388 40,607,173

Non Current Liabilities

Borrowings 15 40,557,317 -

Provisions 14 1,443,000 1,454,000

42,000,317 1,454,000

Equity

Issued capital 16 26,000,000 26,000,000

Asset revaluation reserve 17 36,611,833 36,611,833

Retained earnings 18 28,164,045 26,644,969

90,775,878 89,256,802

Total Equity and Liabilities 138,827,583 131,317,975

The accompanying notes form part of these financial statements.

For and on behalf of the Board

Director Director

Dated 19 August 2009

15


Statement of Cash Flows

FOR THE YEAR ENDED 30 JUNE 2009 PARENT & GROUP PARENT & GROUP 2009 2008 NOTE NZ$ NZ$

Cash Flows From Operating Activities

Receipts from customers 54,364,771 46,828,774

Interest received 5,352 8,889

54,370,123 46,837,663

Payments to suppliers and employees (35,043,851) (29,964,586)

Interest paid (2,683,910) (3,244,584)

Income tax paid (2,234,042) (4,413,749)

(39,961,803) (37,622,919)

Net cash provided by operating activities 21 14,408,320 9,214,744

Cash Flows From Investing Activities

Sale of property, plant and equipment and software (net of disposal costs) 105,586 133

Loan repayment from Jebsens - 566,830

105,586 566,963

Purchase of property, plant and equipment and software (15,783,732) (5,942,984)

Capitalised interest on purchase of property, plant and equipment (174,991) -

and software

(15,958,723) (5,942,984)

Net cash (used in)/provided by investing activities (15,853,137) (5,376,021)

Cash Flows From Financing Activities

Proceeds from borrowings 5,257,317 -

Repayment of borrowings - (2,000,000)

Interim dividend (2,000,000) (800,000)

Final dividend (1,900,000) (1,000,000)

Net cash (used in)/provided by financing activities 1,357,317 (3,800,000)

Net Increase/(Decrease) in Cash and Cash Equivalents (87,500) 38,723

Cash and Cash Equivalents at the Beginning of Year 255,520 216,797

Cash and Cash Equivalents at the End of Year 7 168,020 255,520

The accompanying notes form part of these financial statements.

16


17

STATEMENT OF ACCOUNTING POLICIESGENERAL ACCOUNTING POLICIES

Port Taranaki Limited (the “Company”) is a sea port company incorporated and domiciled in New Zealand.

The Company’s parent and sole shareholder is The Taranaki Regional Council.

The Company and its non-trading subsidiaries Greyport Terminals Company Limited and West Coast Coal Company Limited form the “Group”.

The financial statements for the Group were authorised for issue by the directors on 19 August 2009.

The principal activities of the port are described in Note 1.

Statement of Compliance

These are the financial statements of the Group presented in accordance with the Port Companies Act 1988 and the Companies Act 1993, prepared in accordance with the Financial Reporting Act 1993, and in accordance with New Zealand generally accepted accounting practice (NZ GAAP). They comply with New Zealand equivalents to International Financial Reporting Standards (NZ IFRS), International Financial Reporting Standards (IFRS) and other applicable Financial Reporting Standards. The Group is a profit oriented entity.

Basis of Preparation

The financial statements are presented in New Zealand dollars, which is the Group’s functional and reporting currency, rounded to the nearest dollar.

They are prepared on the historical cost basis apart from certain assets which are stated at their fair value.

The accounting policies set out below have been applied consistently to all periods presented in these financial statements.

SIGNIFICANT ACCOUNTING POLICIES

(a) Cash and Cash Equivalents

Cash and cash equivalents comprise cash on hand, cash in banks and investments in money market instruments. Bank overdrafts are shown within current liabilities in the balance sheet.

(b) Foreign Currency Monetary Balances

Transactions in foreign currencies are converted at the exchange rate ruling at the date of the transaction. At balance date all foreign currency monetary assets and liabilities are translated to New Zealand dollars using the prevailing spot rate of the day. Any gain or loss is recognised in the profit or loss in the reported financial period in which they arise.

(c) Financial Instruments

(c) (i) Derivative

A derivative is a financial instrument or contract whose value changes in response to the change in a specified interest rate, financial instrument price, commodity price, foreign exchange rate, credit index or other variable. It requires no or a nominal initial investment and is settled at a later date.

Derivative financial investments are initially recognised at fair value on the date a derivative contract is entered into and are subsequently measured at their fair

value at each balance sheet date. The gain or loss on remeasurement to fair value is recognised immediately in the profit or loss. The Group does not undertake hedge accounting in accordance with NZ IAS 39.

The Group may enter into foreign currency forward exchange contracts, to hedge foreign currency transactions when purchasing major fixed assets and when payment is denominated in foreign currency. Gains and losses on such contracts are recognised in the profit or loss each year at balance date or date of completion by restating the liability to fair value at balance date or at the time of settlement.

No derivative financial instruments were in place at year end.

(c) (ii) Financial Assets and Liabilities

Financial Assets

Investments are recognised and derecognised on trade date where the purchase or sale of an investment is under a contract whose terms require delivery of the investment within the timeframe established by the market concerned, and are initially measured at fair value, net of transaction costs. Subsequent to initial recognition, investments in associates are accounted for under the equity method in the financial statements. Other financial assets are classified into the following specified categories: financial assets ‘at fair value through the profit or loss’, ‘held to maturity investments’, ‘available for sale’ financial assets, and ‘loans and receivables’. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.

Financial Assets at Fair Value Through Profit or Loss

A financial asset may be designated as at fair value through profit or loss upon initial recognition if:

a) such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or

b) the financial asset forms part of a group of financial assets or financial liabilities or both, which is managed and its peak performance is evaluated on a fair value basis, in accordance with the Group’s documented risk management or investment strategy, and information about the grouping is provided internally on that basis; or

c) it forms part of a contract containing one or more embedded derivatives and NZ IAS 39 ‘Financial Instruments: Recognition and Measurement’ permits the entire combined contract (asset or liability) to be designated at fair value through profit or loss.

Financial assets at fair value through profit or loss are stated at fair value, with any resultant gain or loss recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any dividend or interest earned on the financial asset. Fair value is determined in the manner described in note 20.


Loans and Receivables

Trade receivables, loans, and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as ‘loans and receivables’. Loans and receivables are measured at amortised cost using the effective interest method less impairment. Interest is recognised by applying the effective interest rate.

Impairment of Financial Assets

Financial assets, other than those at fair value through profit or loss are assessed for indicators of impairment at each balance sheet date. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been impacted.

For financial assets, objective evidence of impairment could include:

a) significant financial difficulty of the issuer or counterparty; or

b) default or delinquency in interest or principal payments; or

c) it is becoming probable that the borrower will enter bankruptcy or financial re-organisation.

Certain categories of financial assets, such as trade receivables, that are assessed not to be impaired individually are subsequently assessed for impairment on a collective basis. Objective evidence of impairment for a portfolio of receivables includes the Group’s past experience of collecting payments, as well as observable changes in national or local economic conditions that correlate with default on receivables and expected uncollectable items.

For financial assets carried at amortised cost, the amount of the impairment is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited off against the allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss.

If in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.

Other Financial Liabilities

Other financial liabilities, including borrowings, are initially measured at market value, net of transaction costs.

Other financial liabilities are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis.

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or, where appropriate, a shorter period, to the net carrying amount of the financial liability.

(d) Inventories

Stocks of maintenance materials and supplies are valued at the lower of weighted average cost or net realisable value.

(e) Property, Plant and Equipment

Owned Assets

All items of property, plant and equipment except land are stated at cost less accumulated depreciation and impairment.

After recognition as an asset at date of transition to NZ IFRS an item of land whose fair value can be measured reliably shall be carried at a revalued amount, being its value at the date of the revaluation less any subsequent accumulated impairment losses. Revaluations shall be made with sufficient regularity to ensure that the carrying amount does not differ materially from that which would be determined using fair value at balance date.

Any revaluation increase arising on the revaluation of land is credited to a revaluation reserve, except to the extent that it reverses a revaluation decrease for the same asset previously recognised as an expense in the profit or loss, in which case the increase is credited to the profit or loss to the extent of the decrease previously charged. A decrease in carrying amount arising on the revaluation of land is charged as an expense in the profit or loss to the extent that it exceeds the balance, if any held in the revaluation reserve relating to a previous revaluation of that asset. On the subsequent sale or retirement of a revalued property, the attributable revaluation surplus remaining in the revaluation reserve, is transferred directly to retained earnings.

After recognition as an asset, an item of property, plant and equipment other than land shall be carried at its cost less any accumulated depreciation and any accumulated impairment losses.

Maintenance Dredging

The cost of maintenance dredging incurred is expensed over the period of benefit through to the commencement of the next dredging campaign. The value of the unexpired portion of maintenance dredging at balance date is reflected in property, plant and equipment.

18


19

STATEMENT OF ACCOUNTING POLICIESSubsequent Costs

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that the future economic benefits associated with the item will flow to the Group and the cost can be measured reliably. All other costs are charged to the profit or loss during the financial period in which they are incurred.

(f ) Intangibles

Intangible assets acquired by the Group comprise computer software and are stated at cost less accumulated amortisation and impairment losses.

Subsequent expenditure on capitalised intangible assets is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is expensed as incurred.

(g) Impairment

Assets are reviewed for impairment at each reporting date for events or changes in circumstances that indicate that the carrying amount may not be recoverable. An impairment loss is recognised in the profit or loss and is determined as the amount by which the asset’s carrying value exceeds it’s recoverable amount. The recoverable amount is the higher of an asset’s fair value, less costs to sell, and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units).

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the assets for which the estimates of future cash flows have not been adjusted. If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised in the profit or loss immediately, unless the relevant asset is carried at fair value, in which case the impairment loss is treated as a revaluation decrease.

Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognised in the profit or loss immediately, unless the relevant asset is carried at fair value, in which case the reversal of the impairment loss is treated as a revaluation increase.

(h) Employee Benefits

(h) (i) Long Term Benefits

The Group’s net obligation in respect to future benefits that can extend up to the date of retirement for all

existing employees are long term benefits. They relate to benefits that employees have earned in return for their service in the current and prior periods, although they may or may not have vested at balance sheet date. The obligation is calculated using an actuarial method and is discounted to its present value. The discount rate the Group uses is the market yield on long term New Zealand Government bonds as at balance sheet date. The probability of the Group’s obligation to pay the future benefit is then determined actuarially.

Long term employee benefits for the Group include: ACC residual claims levies, long service leave, and retirement allowances.

Long Service Leave

The Group has long service milestones of 15, 25, 30 and 35 years of service. Leave entitlement accrued towards milestones not yet achieved are calculated in accordance with the long term benefits policy. No benefit is payable to an employee upon leaving the Group for any milestone worked towards but not achieved, however the probability of attaining vested status is determined and applied in calculating the expected liability amount.

Retirement Allowance

The Group has a retirement policy in place which provides for a retirement allowance. Actuarial calculations are made to assess both the amount projected to be paid (in accordance with the Group’s policy) and the probability that the employee will qualify for the allowance.

(h) (ii) Post Employment Benefits

Defined Benefit Plans

The Group is a participating employer in the National Provident Fund Defined Benefit Plan Contributors Scheme (“the Scheme”) which is a multi-employer defined benefit scheme. If the other participating employers ceased to participate in the Scheme, the employer could be responsible for the entire deficit of the Scheme (see note 29). Similarly, if a number of employers ceased to participate in the Scheme, the employer could be responsible for an increased share of the deficit.

(h) (iii) Short Term Benefits

Short term benefits represent the Group’s net obligation with respect to benefits for services performed that are expected to be paid in the ensuing 12 months. These accruals are calculated based on existing remuneration rates expected to be in place when the benefits are paid.

Short term employee benefits for the Group include: vested leave, sick leave, and the current portions of ACC residual claims levy, long service leave and retirement allowance provision.

Vested Leave

Where an employee has rendered service to the Group and has attained the right to paid leave, the undiscounted amount expected to be paid, is recognised as a current liability as all accumulated leave is expected to be used within 12 months of balance


20

sheet date. The remuneration rates expected to be in place when the benefits are paid is applied to the time owed for entitlements to holiday pay earned, and alternate days owing where statutory days have been worked, and long service leave where the milestone has been achieved.

Sick Leave

The Group measures the amount of additional payments that are expected to arise solely from the fact that the benefit accumulates. The accrual is for the amount estimated it will cost the Group for any employee taking leave in excess of their annual entitlement. It is calculated based on the average expected daily rate of all employees, and the actual number of sick days taken collectively by employees in excess of annual entitlement in the previous twelve months.

ACC

As a port operator, the Group is liable to pay residual claims levies to the ACC. The ACC actuary advises that the residual claims fund is expected to be fully funded by 2014. A provision is made at balance date reflecting the estimated amount payable through to 2014 based upon current residual levy rates. The assessed figure is discounted at the 10 year government bond rate to determine the final provision.

The current portion of the ACC provision, sick leave provision, the long service leave provision, and retiring allowance provision are presented as current employee benefit provisions.

(i) Provisions

A provision is recognised in the balance sheet when the Group has a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.

(j) Trade and Other Payables

Trade and other accounts payable are recognised when the Group becomes obliged to make future payments resulting from the purchase of goods and services. Subsequent to initial recognition, trade payables and other accounts payable are recorded at amortised cost. Given the nature of these liabilities amortised cost equals their notional principal.

(k) Interest Bearing Borrowings

All loans and borrowings are initially recognised at fair value, net of transaction costs. Subsequent to the initial recognition, loans and borrowings are carried at amortised cost with any difference between the initial recognised amount and the redemption value being recognised in the profit and loss over the period of the borrowing using the effective interest rate method. Borrowing costs are recognised as an expense when incurred, except that they are capitalised in accordance with (r), (see page 21).

All interest bearing loans and borrowings are measured at amortised cost using the effective interest rate method which allocates the cost through the expected life of the borrowing. Amortised cost is calculated taking account of any establishment costs.

Borrowings are classified as current liabilities (either advances and deposits or current portion of term debt) unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date.

(l) Income Tax

Income tax on the profit or loss for the year comprises current and deferred tax. Income tax is recognised in the profit or loss except to the extent that it relates to items of other Comprehensive Income, in which case it is recognised in other Comprehensive Income.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at balance sheet date, and any adjustment to tax payable in respect of previous years.

Deferred tax is provided using the comprehensive balance sheet liability method, for temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred taxation assets attributable to tax losses or deductible temporary differences are recognised when realisation is probable. Deferred taxation liabilities attributable to taxable temporary differences are amounts of income taxes payable in future periods. However, deferred tax assets and liabilities are not recognised if the temporary differences giving rise to them arise from the initial recognition of assets and liabilities (other than as a result of a business combination) which affects neither taxable income nor accounting profit. Deferred tax assets and liabilities are calculated using the tax rates expected to apply when the assets are recovered or liabilities settled, based on those tax rates which are enacted or substantively enacted at balance sheet date.

The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities. Current and deferred tax is recognised as an expense in the profit or loss except when it relates to items of other Comprehensive Income. Deferred taxation assets and liabilities can be offset when they relate to income taxes levied by the same taxation authority.

(m) Dividends

Provisions for dividends are recognised in the period in which they are authorised and approved.

(n) Goods and Services Tax (GST)

All items in the balance sheet are stated exclusive of GST with the exception of receivables and payables, which include GST. All items in the Statement of Comprehensive Income are stated exclusive of GST. Cash flows are included in the cash flow statement


21

STATEMENT OF ACCOUNTING POLICIESon a gross basis. The GST component of cash flows arising from investing and financing activities which is recoverable from, or payable to the taxation authority is classified as operating cash flows.

(o) Revenue Recognition

Revenue is measured at the fair value of the consideration received or receivable.

Rendering of services

The Group recognises revenue for the rendering of services when the amount can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity, the stage of completion of the transaction at balance sheet date can be measured reliably and the costs incurred or to be incurred can be measured reliably.

Interest Revenue

Interest revenue is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount.

(p) Associates and Subsidiaries

(p) (i) Associates

Associates are those entities in which the Company has significant influence, but not control, over the financial and operating policies. The financial statements include the Company’s share of the total recognised gains and losses of associates on an equity accounted basis, from the date that significant influence commences until the date that significant influence ceases. When the Company’s share of losses exceeds its interest in the associate, the Company’s carrying amount is reduced to nil and recognition of further losses is discontinued except to the extent that the Company has incurred legal or constructive obligations or made payments on behalf of the associate.

Under the equity method, the investment in the associate is initially recognised at cost and the carrying amount is increased or decreased to recognise the Company’s share of the profit or loss of the associate after the date of acquisition. The Company’s share of profit or loss is included in the profit or loss. Dividends received from the associate company reduce the carrying amount of the investment.

(p) (ii) Subsidiaries

Subsidiaries are those entities in which the Company has control over the financial and operating policies. The financial statements are consolidated from the date that control commences until the date that control ceases. Consolidated financial statements are presented as those of a single economic entity, (the “Group”).

(q) Research and Development

Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, is recognised in the profit or loss when incurred. Expenditure on developing the application of any research findings will only be

capitalised if able to demonstrate all of the following conditions: It is technically feasible to complete so it will be available for sale or use, intended to be completed, able to be used or sold, will generate probable future economic benefits, there are adequate technical, financial and other resources to complete the development to use or sell, and can be measured reliably during its development.

(r) Borrowing Costs

The Group recognises as an expense within the profit or loss all borrowing costs incurred, with the exception of interest costs incurred during construction/assembly of major capital projects, which is capitalised as part of the initial cost of the respective assets.

(s) Depreciation

Property, plant and equipment other than land are depreciated on a straight line basis over their estimated useful lives.

Depreciation periods are:

Buildings 5 to 33 years Port installations 5 to 66 years Plant, equipment and fittings 2.5 to 25 years Floating plant 3 to 25 years Maintenance dredging 2 years Capital dredging 50 years

The residual values, and the useful lives of assets are reviewed at least annually and, if expectations differ from previous estimates, the change shall be accounted for as a change in accounting estimate in accordance with NZ IAS 8.

(t) Amortisation

Amortisation is charged to the profit or loss on a straight-line basis over the estimated useful life of the intangible assets unless the estimated useful life is indefinite. There are no indefinite life intangible assets held at balance sheet date. Other intangible assets are amortised from the date they are available for use. The estimated useful lives are as follows:

Computer Software 2 - 4 years

(u) Operating Leases

An operating lease is one where the lessor retains significant risks and rewards of ownerships of the leased asset.

i) Payments made under operating leases are recognised in the profit or loss on a straight-line basis over the term of the lease, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

ii) Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease.

(v) Statement of Cash Flows

Cash flows from operating activities are presented using the direct method.


22

Definitions of terms used in the Statement of Cash Flows:

- Cash means cash on deposit with banks, net of outstanding bank overdrafts.

- Investing activities comprise the purchase and sale of property, plant and equipment, investment properties and investments.

- Financing activities comprise the change in equity and debt capital structure of the Group and the payment of cash dividends.

- Operating activities include all transactions and events that are not investing or financing activities.

CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATES

In the application of NZ IFRS management is required to make judgments, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstance, the results of which form the basis of making the judgments. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Management have made judgments that relate to the estimated useful life of plant, property and equipment, its fair value, and the value of receivables. The judgements are disclosed in Statement of Accounting Policies (s), and Notes to the Financial Statements, note 8 provision for impairment and note 11 carrying amount, revaluations and other disclosures.

ADOPTION OF NEW AND REVISED ACCOUNTING STANDARDS

In the current year the Group has adopted all of the Standards and Interpretations issued by the International Accounting Standards Board (the IASB) and the International Financial Reporting Interpretations Committee (IFRIC) of the IASB and ASRB that are relevant to its operations and effective for the current reporting period.

The Group opted for early adoption of NZ IAS 1 - Presentation of Financial Statements issued by the Financial Reporting Standards Board (FRSB) of the New Zealand Institute of Chartered Accountants (NZICA) and approved by the Accounting Standards Review Board (ASRB) in November 2007 under the Financial Reporting Act 1993. This Standard is mandatory for annual periods beginning on or after 1 January 2009.

At the date of authorisation of the financial report, the following Standards and Interpretations were on issue but not yet effective:

Effective for annual Expected to be reporting periods initially applied in the beginning on or after financial year ending

- NZ IFRS 1 - First-time Adoption of New Zealand Equivalents to International Financial Standards - Amendments 1 January 2009 30 June 2010

- NZ IFRS 2 - Share-Based Payment - Vesting Conditions and Cancellations - Amendments 1 January 2009 30 June 2010

- NZ IFRS 2 - Share-Based Payment - Group Cash-Settled Share- Based Payment transactions 1 January 2010 30 June 2011

- NZ IFRS 3 - Business Combinations - Revised 2008 1 July 2009 30 June 2010

- NZ IFRS 4 - Insurance Contracts - The Scope of Insurance Activities and Differential Reporting Concessions - Amendments 1 January 2009 30 June 2010

- NZ IFRS 7 - Financial Instruments: Disclosures - Improving disclosures about financial instruments (Amendments) 1 January 2009 30 June 2010

- NZ IFRS 8 - Operating Segments 1 January 2009 30 June 2010

- NZ IFRS - Improvements (2008) Various 30 June 2010

- NZ IFRS - Improvements (2009) Various 30 June 2011

- NZ IAS 1 - Presentation of Financial Statements - Puttable Financial Instruments and Obligations Arising on Liquidation - Revised Amendments 1 January 2009 30 June 2010

- NZ IAS 23 - Borrowing Costs - Revised 2007 1 January 2009 30 June 2010

- NZ IAS 27 - Consolidated and Separate Financial Statements - Revised 2008 1 July 2009 30 June 2010

- NZ IAS 27 - Consolidated and Separate Financial Statements - Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate - Amendments 1 January 2009 30 June 2010

- NZ IAS 32 - Financial Instruments: Presentation - Revised amendments 1 January 2009 30 June 2010

- NZ IAS 39 - Financial Instruments: Recognition and Measurement - Eligible hedged items. Amendments 1 July 2009 30 June 2010

- Omnibus Amendments (2008) 1 January 2008 30 June 2010

- Omnibus Amendments (2009) 1 July 2009 30 June 2010

- NZ IFRIC 15 - Agreements for the Construction of Real Estate 1 January 2009 30 June 2010

- NZ IFRIC 16 - Hedges of a Net Investment in a Foreign Operation 1 October 2008 30 June 2010

- NZ IFRIC 17 - Distribution of Non-cash Assets to Owners 1 July 2009 30 June 2010

- NZ IFRIC 18 - Transfers of Assets from Customers 1 July 2009 30 June 2010

Application of the Standards, Amendments and Interpretations is not expected to have a material impact on the financial statement account balances of the Group but may require additional financial statement disclosures.


FOR THE YEAR ENDED 30 JUNE 2009 NOTES TO THE FINANCIAL STATEMENTS

23

Notes to and forming part of the Financial Statements FOR THE YEAR ENDED 30 JUNE 2009

1 SEgmENTAL REpORTiNg

The Group operates in one economic and geographic segment, that being the facilitating of export and import activities

through Port Taranaki.

PARENT & GROUP PARENT & GROUP 2009 2008 NZ$ NZ$

2 pROfiT fROm OpERATiONS

(a) Revenue

Port operating revenue from sale of services 44,814,289 40,914,690

Lease and rental revenue 1,771,178 1,834,854

46,585,467 42,749,544

Interest revenue 5,352 39,279

Total revenue 46,590,819 42,788,823

(b) Profit before taxation

Profit before tax for the year has been arrived at after

charging the following:

Employee benefits 12,653,743 11,387,105

Cost of services used 1,622,732 1,772,959

General expenses 4,210,371 5,160,832

Interest expense 2,715,090 3,312,010

Maintenance dredging - depreciation 1,139,738 1,067,478

Maintenance dredging other costs 71,917 80,222

Repairs and maintenance 10,138,785 7,532,922

Depreciation and amortisation (refer notes 11 and 12) 4,859,399 4,464,975

(excludes maintenance dredging)

Net loss on disposal of property, plant and equipment 1,021,054 1,432

38,432,829 34,779,935

Included in general expenses were the following expenses:

Change in estimated doubtful debts (32,000) 31,000

Translation adjustments comprising:

Net loss on Jebsens loan - 2,049

Net loss on foreign currency bank balances - 24,899

Net gain on cash and cash equivalents (1,767) (27)

Payments to auditor

Audit fees 55,439 54,013


FOR THE YEAR ENDED 30 JUNE 2009FOR THE YEAR ENDED 30 JUNE 2009

24

PARENT & GROUP PARENT & GROUP 2009 2008

NZ$ NZ$

Included in employee benefits were the following expenses:

Payments to directors

J S Auld 26,500 27,000

P D Horton 21,000 11,373

N D Leuthart 5,125 20,500

D N MacLeod 21,000 20,500

M C Norgate 21,000 20,500

D E Walter 21,000 20,500

E J Young 35,000 34,000

150,625 154,373

3 iNcOmE TAx ExpENSE/(cREdiT)

a) Income tax recognised in the Statement of Comprehensive Income

Current tax expense 2,586,666 4,018,881

Deferred tax on temporary differences 152,248 (772,661)

Income tax expense/(credit) per Statement of Comprehensive Income 2,738,914 3,246,220

Income tax is calculated at an average effective tax rate of 30 (2008: 33) percent of the estimated assessable profit

for the year.

On 17 May 2007, the New Zealand Government announced in its annual budget that the corporate tax rate of New

Zealand would be reduced from 33% to 30% with effect from 1 April 2008. For the Group the reduction in tax rate

occured from 1 July 2008.

b) Reconciliation of Accounting Profit before Tax and Income Tax Expense/(Credit)

Profit before taxation 8,157,990 8,008,888

Income tax expense calculated at 30% (2008: 33%) 2,447,397 2,642,933

Tax effect of non deductible expenses in profit before tax 278,794 547,705

Tax effect of rate change on future tax benefits 1,095 109,115

Prior period adjustments impacting income expense under/(over) 11,628 (53,533)

Income tax expense per Statement of Comprehensive Income 2,738,914 3,246,220

4 TAxATiON REfuNdAbLE/(pAyAbLE)

Opening balance (72,415) (467,283)

Prior year tax paid/(refund) 84,042 413,749

Prior period adjustment (11,628) 53,533

Current taxation payable (2,575,038) (4,072,414)

Provisional taxation paid 2,150,000 4,000,000

Taxation refundable/(payable) (425,039) (72,415)



25

NOTES TO THE FINANCIAL STATEMENTS5 dEfERREd TAx ASSET

Depreciation/ Provisions/ Receivables/ Amortisation Payables Prepayments Total NZ$ NZ$ NZ$ NZ$

As at 1 July 2007 (279,473) 825,946 (44,550) 501,923

(Charged)/credited to profit or loss in the Statement of Comprehensive Income 646,082 121,930 4,649 772,661

As at 30 June 2008 366,609 947,876 (39,901) 1,274,584

(Charged)/credited to profit or loss in the Statement of Comprehensive Income (244,064) 98,415 (6,599) (152,248)

As at 30 June 2009 122,545 1,046,291 (46,500) 1,122,336

There are no income tax losses carried forward.

6 EARNiNgS pER ShARE

Basic earnings per share is calculated by dividing the profit for the period by the weighted average number of ordinary

shares on issue during the period.

Diluted earnings per share is calculated by adjusting the profit for the period and the weighted average number of

ordinary shares on issue during the period, for the effects of all dilutive instruments, of which there were none during

the period.


Profit for the period 5,419,076 4,762,668

Weighted average number of shares on issue 52,000,000 52,000,000

Basic and diluted earnings per share (cents per share) 10.42 9.16

7 cASh ANd cASh EquivALENTS

Cash at bank and on hand 168,020 255,520

The carrying amount for cash and cash equivalents equals fair value.

8 TRAdE ANd OThER REcEivAbLES

a) Current

Trade receivables 3,945,550 5,613,027

Provision for impairment (8,000) (40,000)

Net trade receivables 3,937,550 5,573,027

Other receivables 410,210 229,809

Prepayments 109,071 8,018

Related party receivables (note 24) 3,165 1,752

4,459,996 5,812,606

The fair value of trade and other receivables approximates their carrying value.

The average credit period on sales of goods is 30 days (2008: 49 days). The parent reserves the right entirely at its

discretion to apply an interest charge at 2.5% per month compounding on overdue accounts, as per ‘Standard

conditions of business’ 4.5(c) issued by Port Taranaki Limited. If credit has been granted, then payment for services

rendered is due by the 20th of the month following invoice. The Group has provided in full for any receivables over



26

90 days old which are considered potentially unrecoverable. All other debtors are provided for based on estimated

irrecoverable amounts determined by reference to past default experience.

Included in the Group’s trade receivable balance are debtors with a carrying amount of $228 thousand

(2008: $916 thousand) which are past due at the reporting date for which the Group has not provided as there

has not been a significant change in credit quality and the Group believes that the amounts are still considered

recoverable. The Group does not hold any collateral over these balances. The average age of these receivables is

53 days (2008: 44 days).


Movement in the provision for impairment

Balance 1 July 40,000 9,000

Increase/(Decrease) in impairment provision recognised in profit or loss (32,000) 31,000

Balance 30 June 8,000 40,000

In determining the recoverability of a trade receivable the Group considers any change in the credit quality of the trade

receivable from the date credit was initially granted up to the reporting date. The concentration of credit risk lies in trade

debtors of which 33.33%, 20 (2008: 28.75%, 23 ) by number of trade debtors representing 90.36% (2008: 90.92%) of the

total amount of trade debtors. Only 5.78% (2008: 16.31%) of trade receivables were overdue but not impaired at balance

sheet date. 0.2% (2008: 0.71%) of trade receivables were considered impaired. No collateral, security or other credit

enhancements are held by the Group. The directors believe that there is no further credit provision required in excess of

the provision for impairment.

9 iNvENTORiES

Maintenance consumables 225,051 159,141

10 LOAN - JEbSENS

Balance at 1 July 48,336 586,825

Interest write offs during the year (48,336) -

Repayments - (566,830)

Interest - 30,390

Translation (loss)/gain - (2,049)

Balance at 30 June - 48,336

The carrying amount for the loan approximates fair value.

The denominated foreign currency of this asset is US dollars. At balance sheet date the balance is Nil

(2008: $US36,648).

2008: The balance is interest accrued to the settlement date of the principal amount on17 January 2008. Interest rate

applicable to this loan was 9.7%.




27


11 pROpERTy, pLANT ANd EquipmENT

Land

Carrying amount at 1 July 46,976,670 32,244,953

Additions - 821

Revaluations - 14,730,896

Carrying amount at 30 June 46,976,670 46,976,670

Buildings

As at 30 June previous year

Cost 16,626,775 16,606,937

Accumulated depreciation (8,785,313) (8,198,807)

Net book value previous year 7,841,462 8,408,130


Additions 249,879 19,971

Disposals (834,806) (133)

Depreciation (540,496) (586,506)


Maintenance dredging


Cost 2,280,054 2,280,054

Accumulated depreciation (1,442,757) (375,279)

Net book value previous year 837,297 1,904,775

Carrying amount at 1 July 837,297 1,904,775

Additions 2,555,896 -

Depreciation (1,139,738) (1,067,478)

Carrying amount at 30 June 2,253,455 837,297

Port Installations


Cost 37,465,566 36,884,538




Additions 2,234,665 650,526

Depreciation (1,523,758) (1,474,888)




28


Plant, equipment and fittings


Cost 25,937,283 24,040,427




Additions 3,263,215 1,897,158

Disposals (291,836) (1,432)

Depreciation (1,553,331) (1,371,719)


Floating plant


Cost 12,496,963 11,467,834




Additions 1,963,938 1,029,129

Depreciation (610,726) (492,121)


Capital dredging


Cost 21,488,916 21,329,901

Accumulated depreciation (501,253) (71,475)



Additions 16,277 159,015

Depreciation (430,104) (429,778)


Capital works in progress


Additions 16,210,169 5,899,725

Transferred upon completion (11,485,921) (3,828,045)


Total property, plant and equipment 131,688,195 123,604,872



29

NOTES TO THE FINANCIAL STATEMENTS As at 30 June 2009 Cost Accumulated Carrying

depreciation amount

Land (including revaluations) 46,976,670 - 46,976,670

Buildings 15,814,756 (9,098,717) 6,716,039

Maintenance dredging 2,713,612 (460,157) 2,253,455

Port installations 39,700,231 (17,164,703) 22,535,528

Plant, equipment and fittings 28,758,408 (14,964,557) 13,793,851

Floating plant 14,460,902 (3,866,930) 10,593,972

Capital dredging 21,505,193 (931,357) 20,573,836

Capital works in progress 8,244,844 - 8,244,844

Total plant, property and equipment 178,174,616 (46,486,421) 131,688,195

Revaluations

Land assets have been valued on their highest and best use taking into account the existing zoning, potential for

utilisation and localised port market. All land holdings are used or held for port operational requirements and as such

are valued under the requirements of NZ IAS 16 using fair value (market value).

Land was revalued at 30 June 2008 by Mr Ian Baker, a registered valuer with Telfer Young (Taranaki) Ltd, New Plymouth.

Telfer Young have been contracted by Port Taranaki as independent valuers. The revalued amount of land used in this

report amounts to $46,976,670 using the Direct Sales Comparison Approach methodology.

The carrying amount of land had it been recognised under the cost model is as follows:


10,364,837 10,364,837

Other disclosures

(i) There are no items of property, plant or equipment which are not in current use.

(ii) There have been no impairment losses recognised or reversed in the current period.

(iii) There have been borrowing costs of $174,991 (2008: Nil) capitalised during the period. The weighted average

capitalisation rate on funds borrowed during the year was 6.31%.

(iv) There are no restrictions in titles relating to property, plant and equipment or items pledged as security for liabilities

apart from those held by Westpac Banking Corporation. Refer to note 15.


12 OThER iNTANgibLE ASSETS – computer Software


Cost 1,613,165 1,613,165

Accumulated Amortisation (1,450,249) (1,411,710)

Net book value previous year 162,916 201,455

Carrying amount at 1 July 162,916 201,455

Additions 1,202,053 71,424

Amortisation (200,984) (109,963)

Carrying amount at 30 June 1,163,985 162,916





13 TRAdE ANd OThER pAyAbLES

Related parties payables and accruals 13,995 -

Employee benefits 73,057 34,827

Interest payable - weighted average cost 5.98% (2008: 9.04%) 369,077 386,232

Trade payables and accruals 3,228,617 3,169,726

3,684,746 3,590,785

Terms of credit are payment on the 20th of the month following invoices unless other terms are specified by suppliers.

The Group has financial risk management systems in place to ensure that all payables are paid within the credit

timeframe.

14 pROviSiONS - EmpLOyEE bENEfiTS

a) Current liabilities

Sick leave 53,000 38,000

Retiring allowance 260,000 229,000

ACC residual claims 209,000 179,000

Annual leave 1,041,643 910,854

Long service leave 137,960 107,901

Other benefits 240,000 179,218

Closing balance 1,941,603 1,643,973

b) Non current liabilities

Retiring allowance 545,000 497,000

ACC residual claims 713,000 758,000

Long service leave 185,000 199,000

Closing balance 1,443,000 1,454,000

3,384,603 3,097,973

The provision is affected by a number of estimates including the expected employment period of employees and the

timing of employees utilising the benefits. Benefits are recalculated annually, retiring allowance and long service leave

by an actuary, and all non current portions are discounted using the 10 year bond rate applicable at balance sheet date.

All movements are recorded in operating expenses.

30




31


15 bORROwiNgS

a) Current Liabilities

Secured Loans - Westpac - 35,300,000

Weighted average interest rate - 9.04%

b) Non Current Liabilities

Secured Loans - Westpac 40,700,000 -

Less Deferred Loan Facility Fee (142,683) -

Secured Loans - Westpac 40,557,317 -

Weighted average interest rate 5.98% -

Other disclosures

i) The non current loans are due within 4 years.

ii) The carrying amount for current and non current loans and their fair values are disclosed in note 20.

iii) The carrying amount for current and non current loans is denominated in New Zealand dollars.

iv) The secured loans are obtained under a $50M (2008: $50M) funding facility provided by Westpac Banking

Corporation. As at 30 June $9.3M (2008: $14.7M) was undrawn.

v) During the year there had not been any defaults or breaches of bank covenants.

vi) The sole security interest, fixed charge and agreement to mortgage is to Westpac Banking Corporation for a priority

amount of $80M (2008: $50M). The security interest is in Port Taranaki’s Personal Property (present and after acquired)

and the fixed charge and agreement to mortgage is granted over Other Property (present and future rights). Other

Property is defined as any other land or assets not deemed Personal Property. Personal Property can be considered to be

any property other than land.

vii) The weighted average interest rate is based on the applicable fixed rates and floating rates for call accounts as at

balance sheet date.


16 iSSuEd cApiTAL

Balance 1 July 26,000,000 26,000,000

Balance 30 June 26,000,000 26,000,000

The total number of shares authorised, issued and fully paid at 30 June 2009 was 52,000,000 (30 June 2008 was

52,000,000). The shares have no par value.

All shares rank equally in terms of voting rights, rights to fixed dividends and rights to share in any surplus on wind up of

the Group.

There is no right of redemption attached to these shares.



32



17 ASSET REvALuATiON RESERvE

The asset revaluation reserve arises on the revaluation of land. Where revalued land is sold, that portion of the asset

revaluation reserve which relates to that asset and is effectively realised, is transferred directly to retained earnings.

Balance 1 July 36,611,833 21,880,937

Revaluation increments/decrements - 14,730,896

Balance 30 June 36,611,833 36,611,833

18 RETAiNEd EARNiNgS

Balance 1 July 26,644,969 23,682,301

Profit for the period 5,419,076 4,762,668

Dividends (note 19) (3,900,000) (1,800,000)

Balance 30 June 28,164,045 26,644,969

19 dividENdS pAid 2009 2008 2009 2008 cents per share NZ$ NZ$

Prior year dividend 3.654 1.538 1,900,000 800,000

Interim dividend 3.846 1.923 2,000,000 1,000,000

3,900,000 1,800,000

All dividends were paid in cash and fully imputed.

20 fiNANciAL iNSTRumENTS ANd RiSk mANAgEmENT

a) Capital risk management

The Group manages its capital to ensure it is able to continue as a going concern while maximising the return to

stakeholders through the optimisation of the debt and equity balance.

The capital structure of the Group consists of debt, which includes the borrowings disclosed in note 15, and equity

attributable to the shareholder, comprising issued capital, reserves and retained earnings as disclosed in notes 16, 17

and 18.

The Group’s board of directors monitors and reviews the capital structure annually through the statement of corporate

intent process and treasury policy review. Through these two processes the Group seeks to balance the growth

objectives of the Group with the Group’s dividend policy objective. Due to the strength of the Group’s balance sheet all

new business ventures of the Group can currently be debt funded.



33

b) Categories of financial instruments

The estimated fair values of financial instruments are as follows:

PARENT & GROUP PARENT & GROUP PARENT & GROUP PARENT & GROUP 2009 Carrying 2009 Fair 2008 Carrying 2008 Fair Amount Value Amount Value NZ$ NZ$ NZ$ NZ$

Financial Assets

Designated at fair value

Foreign currency bank balances 19,362 19,362 17,772 17,772

Loans and receivables

Cash and cash equivalents 148,658 148,658 237,748 237,748

Receivables 4,350,925 4,350,925 5,804,588 5,804,588

Loan to Jebsens - - 48,336 48,336

Financial Liabilities

At amortised cost

Payables and accruals 3,684,746 3,684,746 3,590,785 3,590,785

Interest bearing loans - Westpac 40,557,317 40,551,998 35,300,000 35,301,685

At balance sheet date the Group had no financial assets or liabilities in the following categories:

Held for trading

Held to maturity investments

Available for sale

Derivatives designated as fair value hedging instruments

Derivatives designated as cash flow hedging instruments

Investments accounted for using the equity method

The following methods and assumptions were used to estimate the fair value of each class of financial instrument:

Cash and cash equivalents, foreign currency balances, receivables and short term payables and accruals:

The carrying value of these items is equivalent to the fair value.

Interest bearing loans and loan to Jebsens

The fair value of the current loans and term loans are estimated based upon the market prices available for similar debt

securities obtained from the lender at balance sheet date.

The fair value of the loan to Jebsens is considered to be equivalent to the carrying value given that a market interest rate

was charged on this loan.

c) Financial risk management objectives

The finance department of the Group provides treasury services to the Group, monitoring and reviewing financial risk

through internal management reporting. These risks include market risk (including currency risk and fair value interest

rate risk), credit risk, liquidity risk and cash flow interest rate risk.

The Group seeks to minimise the effects of these risks by adhering to a treasury policy reviewed by the Group’s board of

directors. The treasury policy provides written guidelines on foreign exchange risk, interest rate risk and credit risk. All

surplus funds are applied against Group borrowings minimising surplus liquidity.

The Group does not enter into, or trade financial instruments, including derivative financial instruments for speculative

purposes.



34

d) Market risk

The Group’s activities expose it to interest rate movement risk principally, and occasionally to foreign exchange risk

when capital assets are purchased in foreign currency. These risks are minimised by adherence to the Group’s treasury

risk policy which endeavours to minimise risk by:

i) Ensuring a minimum of 50% of the Group’s interest bearing debt is fixed term or fixed by way of financial derivative.

ii) Ensuring that any capital asset purchase of $250,000 or greater sourced in foreign currency is fully hedged within two

days of unconditional purchase.

There are no interest rate swaps or forward rate agreements that have been entered into at balance sheet date.

At balance sheet date the foreign currency exposure was limited to foreign currency bank balances listed in (b) above.

The Group was mainly exposed to US dollars from the external loan to Jebsens. At balance sheet date the balance

outstanding was nil (2008: $48,336) meaning that a 10% movement in the applicable foreign currency exchange rate

would lead to an increase of nil (2008: $4,394) or a decrease of nil (2008: $5,371) to the profit or loss before tax.

As at 30 June 2009, if interest rates at that date had been 10 basis points lower with all other variables held constant,

post-tax profit for the year would have been $5,250 (2008: $12,300) higher, arising as a result of lower interest expense

on average variable borrowings. If interest rates had been 10 basis points higher, with all other variables held constant

post-tax profit would have been $5,250 (2008: $12,300) lower, arising as a result of higher interest expense on variable

borrowings. Profit is equally sensitive to interest rate decreases as increases. The sensitivity is lower in 2009 than in 2008

due to lower average variable interest rate borrowings.

e) Credit risk management

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to

the Group. The Group has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient

collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults. The Group’s exposure

and the credit worthiness of its counterparties are continuously monitored and the aggregate value of transactions

concluded is spread amongst approved counterparties.

In the normal course of its business the Group incurs credit risk from trade debtors and financial institutions. The extent

of concentration of credit risk lies in trade debtors. Refer to note 8.

Except, as currently provided for, the Group does not expect the non performance in respect of any outstanding

obligations at balance date.

The carrying amount of financial assets recorded in the financial statements, net of any allowances for losses, represents

the Group’s maximum exposure to credit risk without taking account of any collateral obtained, except as listed below.

Maximum credit risk


Trade and other debtors (net of impairment provision) 4,350,925 5,804,588

Loan to Jebsens - 48,336

No security is held on any of the above amounts.

f ) Liquidity risk management

Ultimate responsibility for liquidity risk management rests with the board of directors, who have built an appropriate

liquidity risk management framework for the management of the Group’s short, medium and long-term funding and

liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves, banking




35

facilities and reserve borrowing facilities by continuously monitoring forecast and actual cash flows and by monitoring

working capital turnover. Included in note 15(iv) is a list of additional undrawn facilities that the Group has at its disposal

to further reduce liquidity risk.

Liquidity and interest risk tables - Financial liabilities

The following tables detail the Group’s remaining contractual maturity for its non-derivative financial liabilities. The

tables below have been drawn up based on the undiscounted contractual liabilities including interest that will accrue to

those liabilities except where the Group is entitled and intends to repay the liability before its maturity. The adjustment

column represents the possible future cash flows attributable to the instrument included in the maturity analysis which

are not included in the carrying amount of the financial liability on the balance sheet.

2009Interest risk table financial liabilities

Weighted average effective Less than 1-3 3 months 1-5 5+ Adjustment Total interest rate 1 month months to 1 year years years % NZ$ NZ$ NZ$ NZ$ NZ$ NZ$ NZ$

Trade and Other Payables 0 3,684,746 - - - - - 3,684,746

Fixed interest rate instruments 5.992 - - 20,464,030 23,516,522 - (3,480,552) 40,500,000

Variable interest rate instruments 3.950 200,022 - - - - (22) 200,000

3,884,768 - 20,464,030 23,516,522 - (3,480,574) 44,384,746



Trade and Other Payables 0 3,590,785 - - - - - 3,590,785

Fixed interest rate instruments 9.035 - - 25,761,168 - - (761,168) 25,000,000

Variable interest rate instruments 9.051 10,302,554 - - - - (2,554) 10,300,000

13,893,339 - 25,761,168 - - (763,722) 38,890,785

Interest risk tables - Financial assets

The following table details the Group’s expected maturity for its non-derivative financial assets. The tables below have

been drawn up based on the undiscounted contractual assets including interest that will be earnt on those assets except

where the Group anticipates that the cash flow will occur in a different period. The adjustment column represents the

possible future cash flows attributable to the instrument included in the maturity analysis which are not included in the

carrying amount of the financial asset on the balance sheet.



Cash and cash equivalents variable 168,029 - - - - (9) 168,020

Trade and Other Receivables 0 4,459,996 - - - - - 4,459,996

Loan Jebsens fixed interest rate 0 - - - - - - -

4,628,025 - - - - (9) 4,628,016



36


2008 Interest risk table financial liabilities


Cash and cash equivalents variable 255,536 - - - - (16) 255,520

Trade and Other Receivables 0 5,812,606 - - - - - 5,812,606

Loan Jebsens fixed interest rate 0 - - 48,336 - - - 48,336

6,068,142 - 48,336 - - (16) 6,116,462


21 REcONciLiATiON Of pROfiT fOR ThE pERiOd TO NET cASh fLOwS fROm OpERATiNg AcTiviTiES

Profit after taxation 5,419,076 4,762,668

Plus/(less) non-cash items:

Depreciation and amortisation 5,999,137 5,532,453

Decrease/(Increase) in deferred tax balances 152,248 (772,661)

Net loss on disposal of property, plant and equipment 1,021,055 1,432

7,172,440 4,761,224

Changes in net assets and liabilities

(Increase)/Decrease in assets:

Trade and other receivables 1,400,945 (1,061,364)

Inventories (65,910) (23,207)

Increase/(Decrease) in liabilities:

Provisions 286,630 605,811

Trade and other payables 93,964 549,561

Taxation payable 352,624 (394,868)

2,068,253 (324,067)

Plus/(Less) items classified as investment activities:

Non-cash item in relation to investing/financing activities - (28,340)

Movement in fixed asset creditors (251,449) 43,259

(251,449) 14,919

Net cash provided by operating activities 14,408,320 9,214,744



37

NOTES TO THE FINANCIAL STATEMENTS PARENT & GROUP PARENT & GROUP

2009 2008 NZ$ NZ$

22 OpERATiNg LEASES

a) Non-cancellable operating leases as lessee

Lease commitments due as follows:

Within 1 year 220,770 121,035

Between 1-5 years 184,935 85,200

Greater than 5 years 10,650 42,600

416,355 248,835

Lease payments under operating leases recognised as an expense during the year.

220,770 217,039

Operating lease payments represent rentals payable by Port Taranaki Limited for the lease of land and buildings. All

operating lease contracts contain market review clauses in the event that Port Taranaki Limited exercises its option

to renew. Port Taranaki Limited does not have an option to purchase any of the leased assets at the end of the lease

periods.

b) Non-cancellable operating leases as lessor

Future minimum lease payments under non-cancellable leases are as follows:

Within 1 year 1,626,963 1,002,030

Between 1-5 years 3,281,467 2,694,424

Greater than 5 years 7,028,750 7,216,169

11,937,180 10,912,623

Port Taranaki Limited leases a range of land and buildings to a number of customers. The majority of leases include

rights of renewal for periods of up to seven years, with several land leases containing rights of renewal from 20 up to 50

years. There were no contingent rents recognised as income in the 2008 and 2009 years.


23 impuTATiON cREdiT AccOuNT

Balance 1 July 8,825,085 5,297,903

Imputation credits attached to dividends paid during the year (1,920,896) (886,567)

Income tax payments (net of refunds) during the year 2,234,042 4,413,749

Balance 30 June 9,138,231 8,825,085

24 RELATEd pARTy TRANSAcTiONS

The Group has a related party relationship with its parent, subsidiaries, directors and executive officers.

a) Transactions with parent

Port Taranaki Limited was a 100% owned subsidiary of the Taranaki Regional Council (TRC) at all times during the year.

Apart from dividends (see note 19) the following transactions occurred between Port Taranaki Limited and TRC during

the year.




i) Sale of goods and services to parent 36,755 40,202

ii) Purchase of goods and services from parent 47,659 45,453

iii) Current payables to parent at balance date 13,995 -

iv) Current receivables from parent at balance date 3,165 -

v) There was no taxation grouping arrangement in 2008 or 2009

vi) There are no guarantees or bad debts

b) Transactions with subsidiary

Port Taranaki Limited owned 100% of Greyport Terminals Company Limited (GTC) at all times during the year and has

75% effective ownership of West Coast Coal Company Limited (WCCC) through it’s direct holding in WCCC and via its

100% ownership of GTC.

2009: No transactions occurred between the parent and subsidiaries during the year.

2008: Set up costs of $434,927 incurred by Port Taranaki Limited on behalf of GTC were recovered from Port Westland

Limited (PWL).

As Port Taranaki has two non-trading subsidiaries, the parent and group financial statements are the same.

c) Transactions with key management personnel

The compensation of the directors and executives, being the key management personnel of the Group is set out below:


Short term employee benefits 1,502,107 1,402,218

Other long term benefits 11,000 18,300

Post employment benefits 21,000 5,200

1,534,107 1,425,718

25 buSiNESS cOmbiNATiONS

West Coast Coal Company Limited

2009: On the 12th June 2009 a final settlement agreement was signed between WCCC and Pike River Coal Limited (PRC).

The settlement did not allow for any of the claims by either WCCC or GTC detailed below in 2008 to be settled by PRC.

Whilst steps to formally dissolve WCCC have commenced subsequent to balance date formal notification of dissolution

is not expected prior to date of signing of these financial statements.

2008: Following the termination of the Transport Services Agreement between WCCC and PRC in November 2007 WCCC

has not commenced trading and will be dissolved once certain claims by the WCCC shareholders are remedied by

PRC. These claims include the loan from Jebsens referred to in Note 10 amounting to $48,336 and a half share of GTC

formation expenses incurred by Port Taranaki Limited amounting to $434,927 which have been expensed to date.

Greyport Terminals Company Limited

2009: GTC a shareholder of WCCC referred to above has not traded due to the reasons given above. Once formal

notification has been received of the dissolution of WCCC the dissolution of GTC will commence.

38



FOR THE YEAR ENDED 30 JUNE 2009 NOTES TO THE FINANCIAL STATEMENTS 2008: GTC a shareholder of WCCC referred to in WCCC comments above will not trade due to the reasons given above.

GTC will be dissolved once claims that it has with PRC are remedied via WCCC the holder of the Transport Services

Agreement (TSA). These claims amount to $873,358 at balance sheet date of which Port Taranaki Limited is claiming a

half share.


26 cOmmiTmENTS

Estimated capital expenditure contracted for at balance date but not

provided, $1,400,000 (2008: $488,000 for floating plant and plant delivery

costs) for completion of new Port Offices. 1,400,000 488,000

27 EvENTS SubSEquENT TO bALANcE dATE

On the 13th August 2009 Fonterra Dairy Co-operative Limited announced changes to its transportation of dairy

products to market. An early assessment of these changes indicates that a net loss of between fifteen to eighteen

thousand containers (TEU) from the 2009 year could be expected. The financial effect of these changes and the

company response is not able to be quantified at this time but could be material. (2008 nil).

28 cONTiNgENT LiAbiLiTiES

2009: The Group is a participating employer in the NPF DBP Contributors scheme (“the Scheme”) which is a multi-

employer defined benefit scheme. If the other employers ceased to participate in the Scheme, the employer could be

responsible for the entire deficit of the Scheme (see note 29). Similarly, if a number of employers ceased to participate in

the Scheme, the Group could be responsible for an increased share of the deficit.

2008: The Group is a participating employer in the NPF DBP Contributors scheme (“the Scheme”) which is a multi-

employer defined benefit scheme. If the other employers ceased to participate in the Scheme, the employer could be

responsible for the entire deficit of the Scheme (see note 29). Similarly, if a number of employers ceased to participate in

the Scheme, the Group could be responsible for an increased share of the deficit.

29 dEfiNEd bENEfiT pLAN

The multi-employer defined benefit plan with National Provident Fund (NPF) entitles two employees to retirement

benefits. No other post retirement plans are provided by the Group. The total expenses recognised in the profit or loss of

$17,251 (2008: $30,202) represents contributions paid to the plan. The Group has no other known liability in respect to

the scheme.

The Schemes Actuary has advised that insufficient information is available to use defined benefit accounting as it is not

possible to determine, from the terms of the Scheme, the extent to which the deficit will affect future contributions by

employers, as there is no prescribed basis for allocation.

As at 31 March 2008, the Scheme had a past service surplus of $28.3M (2007:$33.7M), 9.9% (2007:11.4%) of the liabilities.

This amount is exclusive of Specified Superannuation Contribution Withholding Tax. This surplus was calculated using

a discount rate equal to the expected return on the assets, but otherwise the assumptions and methodology were

consistent with the requirements of NZ IAS 19.

The Actuary to the Scheme has recommended the employer contribution continues at 1.0 times contributors’

contributions. The 1.0 is inclusive of Specified Superannuation Contribution Withholding Tax. The 1.0 times contributors’

contributions has been applied since 1 April 2008. From 1 April 2007 to 31 March 2008, employers were required to

make contributions at a rate of 2.0 times the contributors’ contributions, inclusive of withholding tax.

30 OThER ANNuAL REpORT diScLOSuRES

The shareholder has resolved not to require disclosure of the matters listed in section 211 (1), (e) and (g) of the

Companies Act 1993.

39


REPORT OF THE AUDITOR-GENERAL

40

The Auditor-General is the auditor of Port Taranaki (the company) and group. The Auditor-General has appointed me, Graham Naylor, using the staff and resources of Deloitte, to carry out the audit of the financial statements of the company and group, for the year ended 30 June 2009.

Unqualified Opinion

In our opinion:

- The financial statements of the company and group on pages 14 to 39:

- comply with generally accepted accounting practice in New Zealand; and

- comply with International Financial Reporting Standards; and

- give a true and fair view of:

- the company and group’s financial position as at 30 June 2009; and

- the results of operations and cash flows for the year ended on that date.

- Based on our examination the company and group kept proper accounting records.

The audit was completed on 19 August 2009, and is the date at which our opinion is expressed.

The basis of our opinion is explained below. In addition, we outline the responsibilities of the Board of Directors and the Auditor, and explain our independence.

Basis of Opinion

We carried out the audit in accordance with the Auditor-General’s Auditing Standards, which incorporate the New Zealand Auditing Standards.

We planned and performed the audit to obtain all the information and explanations we considered necessary in order to obtain reasonable assurance that the financial statements did not have material misstatements, whether caused by fraud or error.

Material misstatements are differences or omissions of amounts and disclosures that would affect a reader’s overall understanding of the financial statements. If we had found material misstatements that were not corrected, we would have referred to them in our opinion.

The audit involved performing procedures to test the information presented in the financial statements. We assessed the results of those procedures in forming our opinion.

Audit procedures generally include:

- determining whether significant financial and management

controls are working and can be relied on to produce complete and accurate data;

- verifying samples of transactions and account balances;

- performing analyses to identify anomalies in the reported data;

- reviewing significant estimates and judgements made by the Board of Directors;

- confirming year-end balances;

- determining whether accounting policies are appropriate and consistently applied; and

- determining whether all financial statement disclosures are adequate.

We did not examine every transaction, nor do we guarantee complete accuracy of the financial statements.

We evaluated the overall adequacy of the presentation of information in the financial statements. We obtained all the information and explanations we required to support our opinion above.

Responsibilities of the Board of Directors and the Auditor

The Board of Directors is responsible for preparing financial statements in accordance with generally accepted accounting practice in New Zealand. The financial statements must give a true and fair view of the financial position of the company and group as at 30 June 2009. They must also give a true and fair view of the results of operations and cash flows for the year ended on that date. The Board of Directors’ responsibilities arise from the Port Companies Act 1988 and the Financial Reporting Act 1993.

We are responsible for expressing an independent opinion on the financial statements and reporting that opinion to you. This responsibility arises from section 15 of the Public Audit Act 2001 and section 19 of the Port Companies Act 1988.

Independence

When carrying out the audit we followed the independence requirements of the Auditor-General, which incorporate the independence requirements of the Institute of Chartered Accountants of New Zealand.

Other than the audit, we have no relationship with or interests in the company or any of its subsidiaries.

Graham Naylor Deloitte On behalf of the Auditor-General Hamilton, New Zealand

TO THE READERS OF PORT TARANAKI LIMITED AND GROUP’S FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009

This audit report relates to the financial statements of Port Taranaki and Group for the year ended 30 June 2009 included on Port Taranaki’s website. The Board of Directors is responsible for the maintenance and integrity of Port Taranaki’s website. We have not been engaged to report on the integrity of Port Taranaki’s website. We accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website. The audit report refers only to the financial statements named above. It does not provide an opinion on any other information which may have been hyperlinked to/from these financial statements. If readers of this report are concerned with the inherent risks arising from electronic data communication they should refer to the published hard copy of the audited financial statements and related audit report dated 19 August 2009 to confirm the information included in the audited financial statements presented on this website. Legislation in New Zealand governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Audit procedures generally include:

- determining whether significant financial and management controls are working and can be relied on to produce complete and accurate data;

- verifying samples of transactions and account balances;

- performing analyses to identify anomalies in the reported data;

- reviewing significant estimates and judgements made by the Board of Directors;

- confirming year-end balances;

- determining whether accounting policies are appropriate and consistently applied; and

- determining whether all financial statement disclosures are adequate.

We did not examine every transaction, nor do we guarantee complete accuracy of the financial statements.

We evaluated the overall adequacy of the presentation of information in the financial statements. We obtained all the information and explanations we required to support our opinion above.

Responsibilities of the Board of Directors and the Auditor

The Board of Directors is responsible for preparing financial statements in accordance with generally accepted accounting practice in New Zealand. The financial statements must give a true and fair view of the financial position of the company and group as at 30 June 2008. They must also give a true and fair view of the results of operations and cash flows for the year ended on that date. The Board of Directors’ responsibilities arise from the Port Companies Act 1988 and the Financial Reporting Act 1993.

We are responsible for expressing an independent opinion on the financial statements and reporting that opinion to you. This responsibility arises from section 15 of the Public Audit Act 2001 and section 19 of the Port Companies Act 1988.

Independence

When carrying out the audit we followed the independence requirements of the Auditor-General, which incorporate the independence requirements of the Institute of Chartered Accountants of New Zealand.

Other than the audit, we have no relationship with or interests in the company or any of its subsidiaries.

Graham Naylor Deloitte On behalf of the Auditor-General Hamilton, New Zealand

41

2009 2008 2007 2006 2005 2004 2003 2002 2001 2000

Operations

Trade (millions of freight tonnes)

Imports 0.76 0.85 0.77 0.61 0.77 0.59 0.61 0.59 0.58 0.57

Exports 2.76 2.53 2.51 2.04 2.68 2.89 4.42 5.05 4.81 5.05

Total 3.52 3.38 3.28 2.65 3.45 3.48 5.03 5.64 5.39 5.62

Vessel arrivals (over 100 GRT) 695 927 897 677 562 612 688 618 635 807

Total gross registered tonnage (GRT)(millions) 6.39 7.20 7.06 6.29 6.32 6.98 7.21 6.43 5.05 5.87

Permanent employees 129 122 116 113 110 109 107 96 92 100

Financial ($millions)

Revenue 46.59 42.79 36.95 29.93 27.96 28.08 29.89 28.25 24.04 27.33

Total interest expense 2.72 3.31 1.55 1.57 1.48 1.39 1.48 1.31 0.73 0.98

Earnings before interest, subvention payments 10.87 11.28 8.96 3.65 3.68 5.12 8.39 8.32 7.05 5.97

and taxation (EBIT)

Taxation 2.74 3.25 2.67 1.42 0.70 1.14 2.16 2.61 1.97 1.60

Net profit after taxation 5.42 4.76 4.78 2.23 1.45 2.52 4.65 4.40 4.34 3.39

Dividends 3.90 1.80 1.00 0.84 2.20 2.60 2.50 3.20 16.10 2.20

Capital expenditure and acquisitions 16.21 5.90 20.34 11.34 5.68 4.10 4.74 10.65 2.30 2.93

Equity 90.78 89.26 71.56 67.79 67.28 53.23 53.32 51.16 44.90 56.66

Interest bearing debt 40.56 35.30 37.30 26.00 21.30 21.60 21.80 25.00 18.20 13.70

Total tangible assets 137.66 131.16 114.66 99.08 92.68 77.73 78.61 79.77 65.62 78.12

Earnings per share (¢) 10.42 9.16 9.19 4.29 2.79 4.84 8.95 8.46 8.35 6.51

Ordinary dividends per share (¢) 7.50 3.46 1.92 1.62 4.23 5.00 4.81 6.15 30.96 4.23

Net assets per share (¢) 175 172 138 130 129 102 103 98 86 109

Equity (%) 65.39 67.97 62.30 68.23 72.59 68.49 67.83 64.14 68.42 72.53

Return on equity (%) 5.97 6.34 6.67 3.29 2.15 4.73 8.73 8.60 9.67 5.98

Return on assets (%) 3.94 3.63 4.16 2.25 1.56 3.24 5.92 5.52 6.62 4.34

Operating cashflow 14.41 9.21 10.57 6.15 7.42 6.67 9.88 9.00 14.73 6.23

Interest cover (times covered by net profit after taxation) 1.88 1.44 1.80 1.24 0.98 1.81 3.15 3.36 5.94 3.47

Port Taranaki adopted NZ IFRS for the year commencing 1 July 2006. The earliest year that has been restated under NZ IFRS for the comparatives

above is 2006.

1900

TRADE HISTORY

TONNES [MILLIONS]

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COMPARATIVE REVIEW

design & Print: GeonPhotography: Pip GuthrieannuaL rePort 2009

Documents

td a a L r e P t 9 - Port Taranaki · a a L r e P t 9 Directors ... A Liebherr LHM 1200 crane was ... Some significant heavy lifts were handled by the two Liebherr LHM 400 cranes