PLANNING TODAY FOR AN EVEN BETTER PORT TOMORROW - 2017 AnnualReport - South Port NZ
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2017 Annual Report
PLANNING TODAY
FOR AN EVEN
BETTER PORT
TOMORROW
02 SOUTH PORT ANNUAL REPORT 2017
Contents
Financial Calendar Below Port Infrastructure 32
Company Profile and South Port Facts Opposite Auditors’ Report 34
Significant Events 04 Statement of Comprehensive Income/
Statement of Changes in Equity 37
Financial Results in Brief 05
Statement of Financial Position 38
Review of Operations 06
Statement of Cash Flows 39
Directors’ Profiles 18
Notes to the Financial Statements 40
Statutory Report of Directors 20
Financial and Operational Five Year Summary 59
Statutory Disclosure in Relation to Shareholders 22
Glossary of Port and Shipping Terms 60
Corporate Governance 23
Directory 61
Mediterranean Shipping Company – Service Overview 26
Southern Region Production/
Infrastructure – The Plan 28
Cargo Locations Inside back cover
Forestry Focus 30
Financial Calendar
24 AUGUST 2017 27 OCTOBER 2017 MARCH 2018
2017 Full Year Profit Announcement Close of Share Register for 2018 Interim Dividend Payment
Entitlement to Final Dividend
24 OCTOBER 2017 30 JUNE 2018
Proxies must be lodged by 10:45am 7 NOVEMBER 2017 2018 Financial Year End
Final Dividend Payment
26 OCTOBER 2017
Annual Meeting – 10:45am 7 FEBRUARY 2018
Venue: South Port Board Room 2017 Interim Profit Announcement
Island Harbour, Bluff
03
SOUTH PORT ANNUAL REPORT 2017 03 04 SOUTH PORT ANNUAL REPORT 2017
2016/17 Significant Events
Ultimate “ SOUTH PORT WILL BE THE BEST CARGO DISTRIBUTION
Goal
OPTION FOR ALL SOUTHERN BUSINESSES THROUGH THE
APPLICATION OF QUALITY PROCESSES AND INNOVATION.” öö Achieved NPAT of $8.45
million (2016 $8.71 million).
öö Company embarked on major
PCBU [Person Conducting
öö Two major infrastructure
projects will be undertaken
Represented better than a Business or Undertaking] in FY2018 – provision of
expected result given higher project, likely to take 24 replacement access structure
R&M expenditure [+18% YOY]. months - involves identifying for Fuel Berth at Town Wharf
all third party interactions, plus sealing of 1.0 ha of log
öö Paying consistent 26.0 cents classifying contractual storage area and drainage
total dividend (2016 26.0 cents). relationships and documenting upgrade on Island Harbour.
Company Profile Key Objectives South Port Facts H&S obligations.
öö Cargo volume of 3.05 million öö Additional warehousing
South Port New Zealand Ltd (South öö To increase customer usage öö Owns and manages assets which have a öö Invercargill-located Intermodal services provided to Open
tonnes matched prior year’s
Port) is the southernmost commercial of South Port and improve book value of $53 million
record volume Freight Centre (IFC) Country Dairy with review
port in New Zealand, located at Bluff customer satisfaction.
and operating on a year round, 24-
öö Directly utilises more than 120 full time (2016 - 3.05 million). commenced operating August of operating model to occur
öö To make the best use of South equivalent staff 2016 – site is performing well during FY2018.
hour basis. It is situated in the rich
Port’s resources and develop
productive province of Southland, öö Is the only Southland based company listed öö Categories showing largest offering logistical services.
the assets of Bluff Harbour.
which is responsible for generating a on NZX – market capitalisation as at öö All dry warehouses located
gains were logs, NZAS exports
sizeable proportion of New Zealand’s öö To improve returns to 30 June 2017 equated to $155 million
and dairy (both export and öö 2017 log volume generated on Island Harbour were fully
total exports by value. The region’s shareholders and create
major cargo producing sites are positive value.
öö Handles in excess of 3.0 million tonnes of ingredients). new record of 560,000 tonnes, tenanted during the 2017
cargo in a normal trading year a lift of 84,000T on prior year. financial period.
situated within 30 to 80 kilometres of
öö To provide a safe workplace
the Port. öö Offers full container, break bulk and bulk öö Offsetting cargo declines
and respect the environment.
cargo capability and services the following occurred for NZAS imported öö Stock food imports continued öö Mataura Valley Milk
The Port of Bluff has been operating öö To achieve differentiation main cargoes:
since 1877, while the Company was materials, stock food and to decline (reduction of 30,000 establishing $200M dairy
in the market and gain öö import – alumina, petroleum products,
formed in 1988 having taken over competitive advantage petroleum products. tonnes or 20% fall) despite processing plant in Eastern
fertiliser, acid, stock food and cement
the assets and liabilities of the former over other operators in the a rebuild phase in the dairy Southland to manufacture
Southland Harbour Board. öö export – aluminium, timber, logs, dairy,
transport sector. öö Maintaining activity above sector. infant formula/UHT cream
meat by-products, fish and woodchips
South Port was listed on the öö To assist the establishment of a 3.0 million tonne cargo provides a potential new cargo
öö Has split its land-based operating resource opportunity.
New Zealand Stock Exchange (NZX) in new industry and the growth threshold is significant for öö Container throughput record
into four main divisions – dairy warehousing,
1994 and has Environment Southland, of existing businesses in the
containers, cool and cold storage and the business. Demonstrates established of 39,300 TEU
the region’s local government southern region. (35,100), driven by dairy sector, öö Cold storage margins
general cargo consistent period of growth
environmental agency, as its 66%
since 2009 when cargo was cement and fertiliser/farm significantly lower due to
majority shareholder. öö Undertakes its primary port operation on a
40 ha. man-made Island Harbour situated 1.86 million tonnes. nutrition increases. product remaining in store for
South Port established its off-port at Bluff less time and higher
Intermodal Freight Centre (IFC) in July operating costs.
öö Operates a separate dedicated fuel berth at öö As previously signalled, higher öö Restructure of Marine Division
2016. Strategically located adjacent
to the KiwiRail railhead in Invercargill, Bluff Town Wharf plus provides the R&M expenditure became a undertaken to deliver more
the IFC allows importers and Tiwai Wharf facility to NZAS under a long reality. consistent and safer resources öö Continuous improvement
exporters in the Southland and Otago term licence within this area of the business. principles continue to be
regions to distribute their products in öö Owns and operates an off-port container öö Continued emphasis on Health applied through “Port
a timely and efficient manner. Achieving Combined
packing/unpacking facility adjacent to the and Safety (H&S) performance öö Insurance market tightened
railhead at Mersey Street, Invercargill. The saw revised risk scoring system noticeably for NZ port sector Excellence” (PACE) Programme.
8,000 m2 site houses a 4,000 m2 customs
implemented, enhanced Permit following November 2016
controlled and MPI transitional facility
To Work process adopted Kaikoura earthquake, forcing öö South Port Directors and
öö Services vessels carrying approximately rethink of cover approach. management involved
and more rigorous contractor
1 million tonnes of cargo destined for
monitoring. in Southland Regional
movement across the Tiwai Wharf each year,
of which two thirds is raw material imports öö Sale of surplus tug, Monowai Development Strategy
while one third is finished aluminium product occurred post year-end. This (SoRDS) Aquaculture Team.
öö Has approximately 7 ha. of on-port land plant was retained for a period
available for further port development or to enable major R&M on
industry establishment other tugs.
SOUTH PORT ANNUAL REPORT 2017 05 Financial Results in Brief SURPLUS AFTER TAX OPERATING CASH FLOW 2017 $8.4m 2017 $12.1m 2016 $8.7m 2016 $11.9m 2015 $7.7m 2015 $12.0m 2014 $6.7m 2014 $8.8m 2013 $6.5m 2013 $8.9m EQUITY RATIO DIVIDENDS PER SHARE 2017 70.8% 2017 26.00c 2016 67.1% 2016 26.00c 2015 70.7% 2015 24.00c 2014 68.7% 2014 22.00c 2013 74.1% 2013 22.00c RETURN ON EQUITY RETURN ON ASSETS 2017 23.2% 2017 23.5% 2016 25.3% 2016 25.4% 2015 23.9% 2015 24.8% 2014 21.6% 2014 22.8% 2013 21.6% 2013 25.0% In Thousands of New Zealand Dollars 2017 2016 Revenue $36,997 $36,903 Surplus after tax $8,448 $8,709 Cashflow from operating activities $12,068 $11,863 Total assets $52,555 $53,019 Total equity $37,223 $35,596 Shareholders’ equity ratio 70.8% 67.1% Earnings per share 32.2c 33.2c Dividends declared per share 26.0c 26.0c Net asset backing per share $1.42 $1.36 Return on shareholders’ funds 23.2% 25.3% Cargo throughput (000’s tonnes) 3,053 3,048
06 SOUTH PORT ANNUAL REPORT 2017
Review of Operations
A FURTHER YEAR OF STRONG CARGO FLOWS AND ROBUST
CUSTOMER SUPPORT ENABLED THE COMPANY TO MATCH THE
RECORD VOLUME OF 3.05M TONNES ACHIEVED IN FY2016.
OVERVIEW AND CARGO This cargo flow was made possible by a
range of important export customers, the
A new container throughput record of
39,300 TEU (35,100) was achieved in
largest of which is Rayonier/Matariki Forests. FY2017. This lift was created by increased
The reported after-tax profit of $8.45M
cargo flows by the dairy processing
was down slightly on the prior year but New Zealand’s Aluminium Smelter (NZAS) sector, inbound cement, fertiliser and farm
was noticeably higher than the level achieved record production from its nutrition products.
projected when reporting the FY2016 three main reduction lines (potlines) in
profit outcome. As previously signalled, the 12 months to 31 December 2016. The In contrast, stock food imports continued
the overall maintenance spend on fixed smelter is economically significant both to decline despite the dairy sector
infrastructure had been programmed to from a regional and a national perspective, going through a rebuilding phase. This
lift and this was clearly evident in FY2017. and it continues to demonstrate a high demonstrates that it may take further time
level of resilience despite facing a before farmers return to the operating
Bulk cargo activity remains the back bone
number of challenging external factors. In models that existed prior to the recent
of the business and the key product
particular NZAS continues to face very high industry payout level slump. Import levels
flows of forestry, NZAS-related materials,
transmission costs and the Transmission into Bluff Port fell by 30,000 tonnes or
fertiliser, petroleum and other agri-
Pricing Methodology (TPM) review process is 20% YOY.
products continue to demonstrate either
now facing more delays. Initially the process
growth or stability. Breaking the 3.0 million tonne cargo
was stalled when flaws were discovered
in the supporting cost benefit analysis and threshold was a significant milestone for
Forestry production (logs/woodchips/
now further delays are expected while new South Port and comes on the back of
sawn timber) exported through South Port
board members come up to speed with consistent growth achieved over several
took a further climb and now represents
the underpinning principles of the reform. years. To put the latest year’s volume
almost 30% of the business throughput.
Despite these frustrating ongoing delays, in context, during the first half of the
Logs in particular are now a significant part
NZAS and South Port believe the new board previous decade, the Company’s cargo
of the Port landscape and registered a
members have the skill and expertise to total remained within a range of 2.0 million
fresh annual high of 560,000 tonnes.
realise the Authority’s aim of introducing to 2.1 million tonnes. Over the past ten
fairer and more sustainable pricing for years the Company’s freight volumes have
transmission. climbed steadily alongside a wider range
of services being offered to the market.
“REMAINS
BULK CARGO ACTIVITY
THE BACK BONE OF THE
BUSINESS AND THE KEY PRODUCT
FLOWS OF FORESTRY, NZAS-
RELATED MATERIALS, FERTILISER,
PETROLEUM AND OTHER
AGRI-PRODUCTS CONTINUE TO
DEMONSTRATE EITHER GROWTH
OR STABILITY. ”
Mark O'Connor, Chief Executive and Rex Chapman, Chairman
SOUTH PORT ANNUAL REPORT 2017 07
CRANE PRODUCTIVITY SHIP CALLS BREAKDOWN OF CARGO CONTAINERS
312 415,000 (Tonnage)
CONTAINERS
BREAKDOWN OF CARGO BULK
9,900(Packed/Unpacked)
2,371,000
32.8
(Tonnage)
NUMBER OF CONTAINERS
BREAKDOWN OF CARGO BREAK BULK
(Gross container moves per hour)
267,000
39,300
(Tonnage)
(20 foot container equivalents)
CRANE PRODUCTIVITY SHIP CALLS BREAKDOWN OF CARGO CONTAINERS (Tonnage)
(Gross container moves per hour)
2017 415,000
2017 32.8 2017 312 2016 390,000
2016 30.6 2016 317 2015 399,000
2015 27.0 1 2015 301 2014 351,000
2014 17.1 2014 316 2013 323,000
2013 17.1 2013 336
1: Significant increase reflects the introduction of the two mobile
BREAKDOWN OF CARGO BULK (Tonnage)
crane operating model part way through the financial year. 2017 2,371,000
2016 2,428,000
NUMBER OF CONTAINERS CONTAINERS 2015 2,225,000
(20 foot container equivalents) (Packed/Unpacked) 2014 2,125,000
2017 39,300 2017 9,900 2013 1,944,000
2016 35,100 2016 9,600
BREAKDOWN OF CARGO BREAK BULK (Tonnage)
2015 35,800 2015 8,400
2017 267,000
2014 32,700 2014 7,800 2016 230,000
2013 34,800 2013 7,200 2015 237,000
2014 244,000
2013 247,000
08 SOUTH PORT ANNUAL REPORT 2017
COMPARATIVE CARGO BREAKDOWN 2017 COMPARATIVE CARGO BREAKDOWN 2016
10% 9%
47% EXPORTS NZAS Exports
43% EXPORTS NZAS Exports
2% 1.5%
Other Exports Other Exports
5% 5%
Agriculture Agriculture
27% 28%
NZAS Imports NZAS Imports
29% 27%
Forestry Forestry
4% 5%
Stock Food Stock Food
2% 11% 1.5% 11%
Other Imports Fertiliser Other Imports Fertiliser
8% 9%
Petroleum 2% Petroleum
3%
Sulphuric Acid
53% IMPORTS Sulphuric Acid 57% IMPORTS
NZAS export Ingot ready for loading
SOUTH PORT ANNUAL REPORT 2017 09
HEALTH & SAFETY ENVIRONMENT
South Port has been a committed member Specific projects that were completed in No events occurred during the past
of the Business Leaders’ Health & Safety the H&S area during FY2017 included: 12 months that had a detrimental effect on
Forum for approximately six years. Part of the environment in which South Port and
öö Implementing a revised risk scoring
the stated intention of membership is to: its people operate.
system;
öö Constantly improve health and safety In October 2016, the Invercargill City
öö Continuing regular port user
(H&S) performance; Council released decisions regarding the
engagement via the operation of a Port
öö To be held accountable before your Users Forum; Proposed District Plan. The Proposed
peers by sharing H&S results; District Plan sets out the rules that govern
öö Adopting an enhanced Permit To Work the use and development of land
öö Champion H&S through inspiring our (PTW) process; and throughout the district.
people, suppliers and customers to
öö Applying more rigorous monitoring
create zero harm workplaces; and South Port has appealed various elements
and measuring of contractor
of the Proposed District Plan, including
öö Build systems which guarantee performance.
the Council’s decision to rezone South
reported incidents are investigated and
In addition, the Company embarked Port’s Foreshore Road landholdings from
action taken.
on a major PCBU [Person Conducting a “Seaport Zone” to “Seaport 2 Zone”. The
During FY2017 the Board formed a Business or Undertaking] project, which Seaport 2 Zone provides less flexibility for
H&S Panel comprising of the full Board, is likely to take 24 months to complete. port related undertakings and imposes
together with management and staff The project involves identifying all third restrictions on the type and scale of
representatives. The Panel’s function is party interactions, classifying contractual activities that can occur in this area without
to establish a H&S Strategic Plan, monitor relationships and documenting H&S a resource consent. South Port is currently
its implementation, undertake scheduled obligations of the respective parties. working with the Council to maintain
operational site visits and address key flexibility and resolve the rezoning issue
H&S issues facing this business. Another through Environment Court mediation.
important tool used to deliver H&S
The Island Harbour remains unaffected by
improvement is the Company’s PACE
the changes to the Proposed District Plan.
(Process Improvement) Programme, with
the H&S component being driven by the
South Port H&S Committee.
LOST TIME INJURY AND TOTAL RECORDABLE INJURY FREQUENCY RATES LTIFR
Injuries per 100,000 work hours - 12 month rolling TRIFR
6
6
7
7
7
7
7
7
1
6
-1
-1
1
-1
r-1
1
1
v-
b-
n-
n-
ay
ec
ar
Ap
Fe
Ju
Ja
M
M
D
5
4
3
2
1
LTIFR
TRIFR
0
6
6
6
16
6
7
7
7
7
7
6
7
-1
-1
-1
-1
1
-1
r-1
-1
-1
1
l-1
b-
p-
n-
g
ov
ay
ec
ar
n
ct
Ap
Ju
Au
Fe
Ju
Se
Ja
O
M
M
D
N
10 SOUTH PORT ANNUAL REPORT 2017
INFRASTRUCTURE INSURANCE MARKET
South Port is an infrastructure-based business TIGHTENING
and accordingly has a particular focus on the
The Company recently concluded its claims totalling in excess of the collective
planned maintenance (R&M) required for a
annual insurance negotiations and cover. Both insurance premiums and
wide range of structures and assets.
observed that the current insurance excesses have increased significantly and
Shareholders were previously informed that environment provides challenges to there are concerns that in future the form
a higher level of R&M expenditure has been securing appropriate material damage of comprehensive insurance previously
programmed for FY2017 and the next several cover. This is due to significant seismic available for New Zealand ports may no
years. This relates to a number of significant events occurring in New Zealand in longer be achievable.
infrastructural assets being at or near the recent years. With large losses sustained
end of their physical useful life. In order by both Lyttelton Port in 2011 and more The Company’s insurance broker, Aon,
to extend the effective life of these assets, recently CentrePort in Wellington (as a had its Risk Engineer undertake loss
a much greater level of R&M resource will result of the Kaikoura earthquake), both modelling for South Port. This exercise
need to be applied to these structures. local and international insurers are hesitant indicated if there was a large earthquake
to offer cover to New Zealand ports that that impacted Bluff, the level of loss
Two significant capital projects will also are built on reclaimed land and therefore would likely fall below the $250 million
be undertaken in the coming 12 months. susceptible to liquefaction. cover now in place. The Board and
Firstly, a replacement access structure will be management have assessed the value
constructed for the Town Wharf fuel import South Port is part of a NZ Port Collective required to reinstate essential port assets
berth (estimated cost $5.0 million). This (six ports) that traditionally purchases and are comfortable that there is adequate
structure services the inbound petroleum combined asset cover of $500 million, cover in place for the Port to re-establish
products for both Southland and the with some ports then purchasing cover critical assets if there was a large seismic
Wakatipu Basin. Secondly, to assist the above this level. The current renewal has event that caused extensive damage. The
growth of log exports, a 1.0 ha. log storage been difficult with collective cover of only financial book value of South Port’s total
area will be paved in conjunction with an $250 million being secured. This leaves assets was $53 million (as at 30 June 2017)
upgrade of adjoining drainage systems some exposure if there was a seismic event while the Company’s market capitalisation
(estimated cost $2.2 million). that impacted multiple ports and triggered was $155 million.
‘Aurora Australis’ (Southern Lights) adorning the night sky over the Port and BluffSOUTH PORT ANNUAL REPORT 2017 11
“ TO ASSIST THE GROWTH OF LOG EXPORTS, A 1.0 HA. LOG STORAGE
AREA WILL BE PAVED IN CONJUNCTION WITH AN UPGRADE OF
ADJOINING DRAINAGE SYSTEMS (ESTIMATED COST $2.2 MILLION).”
NFA grab stacking logs (on Port) for export12 SOUTH PORT ANNUAL REPORT 2017
Above: Tug Monowai being farewelled as she departs
South Port for her new home at Port Marlborough
OTHER OPERATIONAL EVENTS
Invercargill Container Packing/Unpacking Cold Storage – Operating margins from Sale of Surplus Harbour Tug – Subsequent
Development – This facility known as this area of the business came under to year end, the Company concluded a
the Intermodal Freight Centre (IFC) pressure. This was due to limited carry- sale of its surplus third tug Monowai to
commenced operations in early FY2017 over of product from the previous season, Port Marlborough. This tug had been
and has provided a varied range of less total volume requiring cold storage retained for approximately 20 months in
services to freight forwarders, transport and the rapid movement of product order to allow scheduled maintenance
operators and a mix of import and to market. This situation was further to occur on South Port’s two larger tugs,
exports parties. Focusing predominantly complicated by parts of South Port’s Te Matua and Hauroko.
on import cargoes, containerised leased cold store facility at Foreshore Road
volumes have tracked budget which in Bluff being rendered non-operational Marine Division Restructured – During
was particularly pleasing considering the as a result of frost heave. Engineering FY2017 a total operational review of
reduced farm expenditure in a recovering reports sourced by the Company and the Marine Division occurred. This has
dairy sector. Increased regional logistical its insurer indicate that this problem is resulted in a number of role changes and
service competition has also benefited attributable to the original design of the a revision to the roster structure for tug
import and export businesses operating in store which is the responsibility of the operating and vessel berthing activities.
Southland. landlord. These changes will allow the business to
deliver a more consistent and safer marine
Container Shipping Market – As Additionally one of South Port’s seasonal service resource.
anticipated, further consolidation of customers, pet food processor Wilbur Ellis,
container shipping lines and the creation sustained a serious fire at its Bluff based PACE Process Improvement Programme
of new alliances occurred during the plant in April 2016. This has resulted in no – South Port personnel continued to
past 12 months. Although no noticeable storage being required by this customer actively participate in the PACE (Port
international rate improvement is evident until early 2017, when the plant became Achieving Combined Excellence) Process
to date, it is highly likely that this will be operational again. Improvement Programme. Designed
necessary if the container lines are to around the review of historic processes,
achieve sustainable profitability. Incremental Dairy Activity and the sorting of physical operating
Warehousing – Additional dairy environments and the elimination of waste,
warehousing capacity was provided for this Programme has already delivered
Open Country Dairy (OCD) to cater for the positive value for both the Company and
lift in milk volume processing at its Awarua its employees. PACE delivers systems
site. OCD occupies a sizeable footprint on which encourage a continuing focus on
South Port’s Island Harbour and is a valued operational improvement, better use of
containerised cargo customer. All other existing resources and the creation of a
dry warehouses located on the Island solid platform for future growth.
Harbour were fully tenanted during the
2017 financial period.SOUTH PORT ANNUAL REPORT 2017 13
2017 FINANCIAL RESULT DIVIDENDS
(Comparatives shown in brackets)
As shareholders are aware, the Directors
öö Revenue from port and warehousing öö Group equity includes issued capital of
have adopted an ongoing policy of
operations equated to $36.9 million $9.4 million ($9.4 million), which is made
assessing South Port’s dividend flow
($36.7 million) representing an up of 26,234,898 ordinary shares.
after taking into consideration both its
increase of 1%. öö Total Group assets remain consistent at Free Cash Flows (FCF) and its reported
öö As a result of higher maintenance $53.0 million ($53.0 million). profits. For the purpose of this policy, FCF
expenditure, operating profit before is interpreted as being annual operating
öö Net tangible asset backing per share
financing costs and tax decreased by cash flow less net maintenance capital
equates to $1.42 ($1.36 per share).
3% to $12.3 million ($12.7 million). expenditure in the same period.
öö Current assets amount to $6.0 million
öö Net financing costs for the Group were ($5.6 million), with current liabilities In establishing the dividend payment
$450,000 ($700,000). at $5.0 million ($12.6 million). This level, Directors took into account the
creates a net working capital position Company’s annual profit movement
öö The Group’s overall result was a surplus
of positive $1.0 million versus negative plus future maintenance requirements
of $8.45 million ($8.71 million), which
$7.0 million last year. that are expected to impact profitability.
represented a 3% decrease on the
Accordingly, the Board elected to pay a
previous year. öö Term liabilities total $10.4 million consistent final dividend of 18.5 cents.
öö Based on the reported result, earnings ($4.8 million). This translates to a full year dividend of
per share were 32.2 cents (33.2 cents öö Property, Plant and Equipment stood at 26.0 cents (2016 – 26.0 cents).
per share). $46.6 million ($47.4 million).
Full imputation credits will be attached to
öö Total equity is $37.2 million ($35.6 million) all distributions. The dividend payment
after allowing for dividend payments represents a gross return of 6.1% (net
during the period of $6.82 million 4.4%), based on a share price of $5.93 as at
($6.43 million). 30 June 2017. A dividend payout ratio of
81% results for 2017 (using reported NPAT)
and equates to 65% of FCF. This level of
income distribution is similar to the prior
year payout ratio of 78%.
SHARE PRICE
From 1 July 2013 to 30 June 2017
$6.20
2013 2014 2015 2016 2017
$6.10
$6.00
$5.90
$5.80
$5.70
$5.60
$5.50
$5.40
$5.30
$5.20
$5.10
$5.00
$4.90
$4.80
$4.70
$4.60
$4.50
$4.40
$4.30
$4.20
$4.10
$4.00
$3.90
$3.80
$3.70
$3.60
$3.50
$3.40
$3.30
$3.20
$3.10
$3.0014 SOUTH PORT ANNUAL REPORT 2017 South Port’s two Liebherr Mobile Harbour Cranes standing at attention
SOUTH PORT ANNUAL REPORT 2017 15
Above: Rex Chapman, Mark O’Connor and
Clare Kearney presenting scholarship cheques to
the 2017 recipients, Billy Barrow and Lachlan Wood
STAFF CONTRIBUTION MANAGEMENT TEAM COMMUNITY AND REGIONAL
Employee numbers remained relatively Long serving CEO, Mark O’Connor, ASSISTANCE
constant within the business, tracking announced his resignation in May of this
Sponsorship of sporting, cultural and
the consistent levels of operational and year having signalled to the Board some
community groups is part of a long-
support resources needed to service time ago that he intended to step away
term commitment to support the local
customers. Total full time roles increased from full time employment when he
community and region in which South
from 95 to 97 over the past financial year. reached 55 years of age. A recruitment
Port operates. Organisations that received
At year end a number of positions were in process involving an external consultant
sponsorship assistance over recent
the process of being filled. was completed and the South Port
financial years included:
Board announced in August that Nigel
The Company conveys thanks to all staff for Gear would be appointed the new CEO öö Bluff Community Charitable Trust
the consistent effort and energy that has effective 1 October 2017. Nigel is currently (managing swimming pool upgrade
been delivered during the past 12 months. the Commercial Manager of South Port project)
Without this level of commitment and and has also held management positions
enthusiasm, South Port would not be öö Bluff Hill/Motupohue Environment Trust
in Operations, Warehousing and Finance
in a position to service the region’s – pest eradication programme
in addition to previous roles within the fuel
cargo providers and ultimately generate and meat processing sectors. öö Bluff Kindergarten
commercial returns to its shareholders.
The PACE Programme continues to The Board acknowledged it was a öö Bluff Maritime Museum
provide employees with a greater ability testament to current management that at öö Bluff Oyster & Food Festival
to influence the outcomes of both existing the conclusion of the recruitment process
and new work processes. they had been able to find a successor öö Bluff Rugby Club
from within the existing team. Nigel is öö Bluff Schools
already well known to the South Port
BOARD COMPOSITION customer base and has been part of a very
successful management team operating
öö Bluff Yacht Club
öö Bluff Promotions and various other local
Mr Rex Chapman (current Chairman) during the Company’s recent period of
organisations
and Mr Jeremy McClean retire this year growth. Further, the Board emphasised
by rotation, and, being eligible, offer that it was looking forward to working with öö Burt Munro Challenge (Bluff stage)
themselves for re-election. and supporting Nigel in his new role.
öö Coastguard Bluff
The Company has received no other valid öö Fight for Kidz
Director nominations.16 SOUTH PORT ANNUAL REPORT 2017
öö Foundation for Youth Development Lachlan Wood and Billy Barrow. Lachlan Kaiwera Downs Wind Farm located across
(FYD) – Bluff Schools has already completed three years of a 2,568 ha. of farmland, about 15 km south
four year degree at Lincoln University, east of Gore. Resource consents have
öö Graeme Dingle Foundation via Kiwican
undertaking a Bachelor of Agricultural been granted by the Gore District Council
Programme at Bluff School
Science. This will set him in good stead and the Southland Regional Council with
öö Invercargill Harness Racing Club (Bluff towards his chosen career path. Billy’s these consents allowing for a maximum of
businesses race day) career intentions are in the specific fields 83 wind turbines. If this generation project
of computer programming plus network is to proceed, then any development is
öö Port Softball Club
engineering and the Southern Institute unlikely to occur before 2019 and may well
öö Queens Park Golf Club of Technology’s Diploma in Information progress in several stages.
Technology will steer him towards
öö Rugby Southland Southland Regional Development
achieving this goal.
öö Southland Cricket Association Strategy (SoRDS) – This regional strategic
plan established a target of lifting
öö Southland Sharks
öö Te Ara o Kiwa Sea Scouts, Bluff
REGIONAL PROJECTS UPDATE Southland’s population by 10,000 people
by 2025. The challenges facing southern
Mataura Valley Milk (MVM) – Construction New Zealand are similar to other regional
öö Te Ara o Kiwa Venturers, Bluff centres and these have been highlighted
of MVM’s infant formula plant commenced
öö Tour of Southland (Bluff stage) in the fourth quarter of 2016. Located in the SoRDS strategic document. It
at McNab in Eastern Southland, the is critical that Local Government now
öö Venture Southland – Spirit of a Nation pushes forward with the necessary steps
facility will have an initial capacity of
(Spirit Army) to support the Action Plan linked to this
46,000 tonnes and is scheduled to be
processing by Spring 2018. The company Strategy. This includes the creation of
öö Young Enterprise Scheme (YES)
was formed and promoted by prominent an Economic Development Agency that
South Port also continued its primary local businessman Inky Tulloch and now also draws on business and community
sponsorship of Export Southland, has as its majority shareholder the state organisations for strategic input.
providing financial assistance to administer owned Chinese company China Animal
South Port has been encouraged by the
this organisation and facilitate the holding Husbandry Group (CAHG). South Port will
level of effort contributed by business and
of a number of events including the be working with this party in the coming
other parties to ensure SoRDS succeeds
bi-annual Export Recognition Dinner. In months to establish whether it can deliver
and that Southland remains a healthy and
addition, the Company also assisted with services in MVM’s supply chain.
vibrant part of New Zealand. South Port
funding the Southern Wood Council
Wind Farm Projects – Trustpower Directors and management have been
Forestry Awards. It is an active member
announced in late 2015 that it would split involved in formulation of the SoRDS
of the Southland Chamber of Commerce
off its existing wind generation assets plus Strategy and more recently with the
and the Otago Southland Timber Industry
its wind and solar developments into a activities of the Aquaculture Reference
Association.
new entity called Tilt Renewables (Tilt). Group, operating under the SoRDS
The Company’s commitment to provide This new company came into existence umbrella.
for scholarship assistance continues. An in October 2016 and continues to review
annual staff and community scholarship is the economic viability of a proposed
offered, with this year’s being awarded to
Wood chip conveyor operating with the Flat Hill wind farm as a backdrop (turbines previously project cargo at the Port)SOUTH PORT ANNUAL REPORT 2017 17
OUTLOOK
Notwithstanding the presence of greater outlays are predicated on further cargo are likely to remain stable. In light of this
volatility due to international political gains occurring over a 4-5 year term, with steady earnings profile, Directors will be
events (Brexit and President Trump), the necessary growth being more difficult to aiming to maintain the current level of
New Zealand economy and key export forecast over an extended period of time. dividend payment.
markets have remained resilient. A further
unknown at this time is the outcome of the South Port’s main cargo flows (logs/
New Zealand General Election and what NZAS/dairy exports/petroleum/fertiliser)
the make-up of the governing parties will are expected to show modest upside in
look like. the coming 12 months. The dairy sector R T CHAPMAN
in particular looks to be experiencing Chairman
A long-run positive economic cycle has improved profitability and this should
provided South Port with a relatively stable assist the regional economy.
platform to service its cargo base and
support some of the recent growth-capital Based on all known factors at the date of
compiling this report, South Port estimates M P O’CONNOR
expenditure. As previously explained
that earnings in the next financial year Chief Executive
to shareholders, some of these capital
HISTORICAL TRADE FIGURES 1922-2017
(tonnes)
3,000,000
2,500,000
2,000,000
2
1,500,000
1
1,000,000
500,000
0
1922 1928 1934 1940 1946 1952 1958 1964 1970 1976 1982 1988 1994 2000 2006 2012 2017
1 – 1993 9 month period due to change in financial year end
2 – 2009 drop in tonnage due to 30% decrease in NZAS throughput attributable to a pot-line outage18 SOUTH PORT ANNUAL REPORT 2017
Directors’ Profiles
REX THOMAS RICHARD (RICK) PHILIP WADE
CHAPMAN GORDON MAXWELL CORY-WRIGHT
LLB, Chairman
CHRISTIE BCA, LLB (Hons)
Mr Chapman is a Senior Partner in Mr Cory-Wright is a Company Director and
MSc (Hons), AFInstD, CRSNZ
Invercargill law firm Cruickshank Pryde. a Strategic Adviser based in Auckland. He
He has been in legal practice in Invercargill Mr Christie is a Company Director based is inaugural Chairman of Papa Rererangi i
for 36 years. Mr Chapman’s practice in Wellington. He is currently Chairman Puketapu (New Plymouth Airport), and a
covers a wide range of legal services of Service IQ, ikeGPS and independent Director of the Local Government Funding
including commercial and company law, Chairman of NeSI. He is a Director of Agency and Matariki Forests.
litigation, dispute resolution and resource Powerhouse Ventures Ltd, Solnet Solutions
management. He is a member of the Mr Cory-Wright was previously a member
Ltd and he is a Trustee of the Victoria
Southland Regional Development Strategy of the Local Government Infrastructure
University Foundation. Prior to becoming
(SoRDS) New Industries Team and the Expert Advisory Group. He has specialised
a professional Director, Mr Christie held
Southland Aquaculture Reference Group in infrastructure businesses and recent
a number of government appointments
(SARG). roles include being acting Chief Financial
and was a Chief Executive of a number of
Officer of Restaurant Brands, and an
companies in the private sector. In 2011
Adviser to Kordia, Ballance Agri-Nutrients,
he was made a Companion of the Royal
Auckland Airport, ACC and Higgins Group
Society of New Zealand.
Holdings.SOUTH PORT ANNUAL REPORT 2017 19
THOMAS MCCUISH CLARE MARGARET JEREMY JAMES
FOGGO KEARNEY MCCLEAN
Mr Foggo is based in Invercargill and is BAgSci BCom, CA
the Salmon & Aquaculture Development
Manager for Sanford. He has held senior Mrs Kearney holds a degree in Agricultural Mr McClean is a practising Chartered
management positions and Directorships Science, majoring in Farm Business Accountant in Southland. He is a Principal
in the seafood industry for over 38 years Management and Dairy Science. She in Invercargill accounting firm Malloch
and, for the past 20 years, has been a holds a Masters of Professional Studies, McClean Ltd, holds a Public Practice
Director of Live Lobster Southland. He is having completed her Masters’ thesis on Certificate with Chartered Accountants
also Chairman of Invercargill Airport. Governance in 2013. Australia & New Zealand and is a Justice
of the Peace. Mr McClean has provided
Mrs Kearney is Chairperson of Sport business advice to a number of Southland
Otago, the Waitaki Safer Community Trust rural and urban businesses for more than
and has recently retired from the Board 30 years.
of Network Waitaki Ltd. Mrs Kearney was
the winner of the Institute of Directors
Otago Branch Aspiring Director Award
in 2014. In recognition of this award Mrs
Kearney acted as an observer director
to the Dunedin City Holdings subsidiary
company Taieri Gorge Railway Ltd during
2015. She is a Chartered Member of the
Institute of Directors.20 SOUTH PORT ANNUAL REPORT 2017
Statutory Report of Directors
THE DIRECTORS HAVE PLEASURE IN SUBMITTING
THEIR 2017 REPORT AND FINANCIAL STATEMENTS.
PRINCIPAL ACTIVITIES DIRECTORS’ AND OFFICERS’ REMUNERATION OF EMPLOYEES
The Company is primarily engaged in the LIABILITY INSURANCE Section 211(1)(g) of the New Zealand
commercial operation of the Port of Bluff. Companies Act 1993 requires disclosure
The Company has arranged Directors’
There has been no significant change of remuneration and other benefits,
and Officers’ Liability Insurance with Vero
in the nature of the Company’s business including redundancy and other payments
Liability Insurance Limited. This cover
during the year. made on termination of employment,
insures Directors against liabilities to other
in excess of $100,000 per year, paid
parties that may arise from their positions
in respect of the current year by the
ACCOUNTING PERIOD as Directors. The insurance does not cover
liabilities arising from criminal actions.
Company to any employees who are not
Directors of the Company.
The financial statements are for the
Number of
12 month period from 1 July 2016 to
30 June 2017. REMUNERATION OF DIRECTORS Remuneration Employees
Directors’ remuneration for the 12 month $100,001-$110,000 4
$110,001-$120,000 1
RESULTS period ended 30 June 2017 was as follows:
$130,001-$140,000 1
R T Chapman $70,000
The Company recorded a surplus for the $150,001-$160,000 2
period of $8,448,000. RGM Christie $40,000 $160,001-$170,000 1
$210,001-$220,000 2
P W Cory-Wright $40,000
DISCLOSURE OF SHARE $220,001-$230,000
$230,001-$240,000
1
3
DEALING BY DIRECTORS T M Foggo $40,000
$360,001-$370,000 1
G D Heenan $13,333
Directors acquired no equity securities
The Chief Executive Officer’s Employment
in the Company since the date of the last
C M Kearney $30,000 Contract is reviewed annually by the
Annual Meeting.
Board. It is not a fixed term Contract.
J J McClean $40,000
The remuneration of senior management
DIVIDEND No other benefits have been provided
is reviewed annually and is determined
in a transparent, deliberate and objective
The Directors have declared an ordinary by the Company to a Director or in any manner.
dividend of $6,821,000 for the period other capacity. No loans have been made
ended 30 June 2017 including the final by the Company to a Director nor has the
dividend amount of $4,854,000 payable in
November 2017.
Company guaranteed any debts incurred
by a Director. NOTICE AND PAUSE
PROVISIONS
DIRECTORS’ SHAREHOLDING The Company has adopted “notice and
pause” provisions in its Constitution.
There is currently no beneficial
shareholding held by Directors.
ACCOUNTING POLICIES
There were no changes in accounting
policies during the period. All policies
are consistent with those applied in the
previous year.SOUTH PORT ANNUAL REPORT 2017 21
Position
AUDIT & RISK COMMITTEE Mr R T Chapman
The Company has a formally Forklifts NZ Ltd Solicitor
constituted Audit & Risk Committee Niagara Sawmilling Company Ltd Solicitor
comprising Messrs J J McClean Prime Range Meats Ltd Solicitor
(Chairman), R T Chapman and SoRDS Aquaculture Working Group Member
P W Cory-Wright. Winton Stock Feed Ltd Solicitor
It is the role of the Committee to
review the Company’s financial Mr RGM Christie
statements and announcements, liaise IkeGPS Chairman
directly with the Company’s Auditors New Zealand eScience Infrastructure (NeSI) Chairman
and review the Company’s accounting
Service IQ Chairman
policies, practices and related matters.
Solnet Solutions Ltd Director
powerHouse Ventures Ltd Director
AUDITOR’S REMUNERATION Mr P W Cory-Wright
During the year, $50,123 was paid Local Government Funding Agency Ltd Director
to the Company’s Auditors, Crowe Matariki Forests Ltd Director
Horwath, for audit services carried
New Plymouth Airport Chairman
out as agent for the Controller and
Auditor General. The Company did
not pay the Auditors for any advice or Mr T M Foggo
guidance on other matters. Barnes Oysters Ltd Director
Bluff Oyster Management Co. Ltd Director
Foundation for Youth Development Southland Chairman
INTEREST REGISTER Invercargill Airport Ltd Chairman
Live Lobster Southland 1995 Ltd Director
The Company maintains an Interest
Register in which particulars of certain Sanford Ltd Aquaculture Manager
transactions and matters involving SoRDS Aquaculture Working Group Member
the Directors are recorded. Entries
in the Interest Register must in turn Mr G D Heenan
be disclosed in the Annual Report. InterCity Group Ltd Chairman
No material transaction entries were
recorded in the Interests Register for
the period 1 July 2016 to 30 June 2017. Mrs C M Kearney
Nil
DISCLOSURE OF INTEREST Mr J J McClean
Nil
Pursuant to Section 140 of the
Companies Act 1993, Directors have
disclosed interests in the following
entities which the Company conducts
or may conduct business from time
to time: R T CHAPMAN J J MCCLEAN
Chairman of Directors Director
Dated 24 August 201722 SOUTH PORT ANNUAL REPORT 2017
Statutory Disclosure in Relation to Shareholders
AS AT 30 JUNE 2017
SIZE OF HOLDING
Size of Holding Number of Shareholders Ordinary Shareholding Percent Holders
1 - 1,000 300 192,501 0.73
1,001 - 5,000 413 1,104,926 4.21
5,001 - 10,000 92 702,731 2.68
10,001 - 100,000 63 1,517,517 5.79
100,001 and over 8 22,717,223 86.59
Total Number of Shareholders: 876 26,234,898 100.00
PRICES FOR SHARES TRADED DURING THIS YEAR
As At 30 June 2017 High Low
$5.93 $6.15 $4.60
TOP TWENTY ORDINARY SHAREHOLDINGS
Shareholder Holding Percent
Southland Regional Council (Environment Southland) 17,441,573 66.48
J I Urquhart Family Trust 1,370,000 5.22
K & M Douglas Trust 1,021,684 3.89
HSBC Nominees (New Zealand) Ltd 992,299 3.78
Douglas Family Trust 516,787 1.97
Douglas Irrevocable Descendants Trust 506,192 1.93
JPMorgan Chase Bank N.A. 451,280 1.72
Daniel Martin Noonan 175,364 .67
Howard Cedric Zingel 113,556 .43
Citibank Nominees (NZ) Ltd 111,067 .42
Kenneth Ritchie Anderson 77,184 .29
Pauline Ann Stapel & Stephen Thomas McKee 70,881 .27
JBWere (NZ) Nominees Ltd 68,238 .26
Custodial Services Ltd 56,872 .22
David Grindell 56,850 .22
Forsyth Barr Custodians Ltd 51,400 .20
Glenn Owen Johnston 50,000 .19
Ian Gerald Arnot 43,978 .17
Donald Gordon Spencer 42,949 .16
Custodial Services Ltd 39,375 .15
SUBSTANTIAL SECURITY HOLDERS
According to notices given to the Company under the Financial Markets Conduct Act 2013, as at 30 June 2017, the substantial product
holders in the Company and their relevant interests are noted below:
Holder No. of Shares % of Issued Capital Date of Notice
Southland Regional Council 17,441,573 66.48 20 October 2000
K & M Douglas Trust, Douglas Family Trust,
Douglas Irrevocable Descendants Trust 2,044,663 7.79 24 December 2009
J I Urquhart Family Trust 1,334,731 5.09 28 October 2010SOUTH PORT ANNUAL REPORT 2017 23
Corporate Governance
The Board of South Port New Zealand
Limited is committed to ensuring that RESPONSIBILITIES BOARD COMPOSITION
the Company adheres to best practice OF THE BOARD At present, there are six independent non-
governance principles and maintains
executive Directors on the Board including
the highest ethical standards. The Board The business and affairs of the Company
a non executive Chairman. The biography
believes that good governance is based are managed under the direction of
of each Board member is set out in the
on a set of principles and behaviours that the Board of Directors. The South Port
“Directors’ Profiles” section of this
provide a clear basis for the Company’s Board is collectively accountable to
Annual Report.
everyday activities to ensure transparency, shareholders for the performance of
fairness and recognition of the interests of the Company. Directors, in carrying out The size and composition of the Board
South Port’s stakeholders. their responsibilities, undertake to act is subject to the limits imposed by South
in the best interests of the Company, its Port’s Constitution and in accordance
The Board has adopted a Code of shareholders and its other stakeholders in with the provisions of the Port Companies
Corporate Governance which is available at accordance with applicable law. Act 1988. The Constitution requires the
www.southport.co.nz. The Code has been
Board to comprise of a minimum number
developed after considering contemporary Key responsibilities of the Board include:
of six Directors. Under the NZX Listing
best practice and principles contained
öö to review and approve the strategic, Rules the Board is required to maintain at
in the NZX Corporate Governance Best
business and financial plans prepared least two independent Directors.
Practice Code issued in October 2013 and
by management and to develop a
the Port Companies Act 1988. The criteria for Director Independence
depth of knowledge of the Company’s
business, so as to understand and are outlined in the Company’s Corporate
South Port New Zealand Limited’s Code of
question the assumptions upon which Governance Code.
Corporate Governance does not materially
differ from the Corporate Governance Best such plans are based;
Pursuant to the Company’s Constitution,
Practice Code found at Appendix 16 of the öö to monitor the Company’s performance one third of the Directors retire by rotation
NZX Main Board Listing Rules. against its approved strategic, business at each annual meeting, but are eligible
and financial plans; for reappointment by shareholders.
CODE OF ETHICS öö to review the Company’s Code of
Ethics from time to time;
The Board conducts regular performance
reviews to consider the appropriate mix of
The Company expects its employees and öö to select and appoint (and, if skills required by the Board to maximise its
Directors to maintain high ethical standards. appropriate, remove from office) the effectiveness and its contribution to
A Code of Ethics has been adopted Chief Executive, determine his/her the Company.
as part of the corporate governance conditions of service and monitor his/
The following table sets out the gender
framework and is monitored by the her performance against established
composition of South Port’s Directors and
Board. The Company’s Code of Ethics has objectives;
Officers at balance date:
been published and made available to
all Directors and staff. This key corporate öö to review the Company’s remuneration
governance document is available on the policy at least annually; and
Company’s website, www.southport.co.nz. öö to monitor South Port’s regulatory 2017 Male Female Total
and legislative compliance and risk
The Code of Ethics addresses, amongst management processes, including Directors 5 1 6
other things: health and safety. Senior
öö conflicts of interest;
Management 5 1 6
öö receipt of gifts; The Board delegates management of
the day-to-day affairs and management 10 2 12
öö corporate opportunities; responsibilities of the Company to
öö confidentiality; achieve the strategic direction and goals
öö expected behaviours; determined by the Board.
öö delegated authority; 2016 Male Female Total
öö director responsibilities; and
Directors 6 - 6
öö reporting issues regarding breaches of
Senior
the Code of Ethics, legal obligations and
Management 5 1 6
other policies of the Company.
11 1 12
The South Port Board and management are
not aware of any breaches of the Code of
Ethics during the period.24 SOUTH PORT ANNUAL REPORT 2017
Above: La Guimorais unloading fertiliser
AUDIT & RISK COMMITTEE RISK MANAGEMENT
The Audit & Risk Committee provides The Committee Chairman, appointed by Effective management of all types of
the Board with assistance in fulfilling the Board, cannot also be the Chairman risk (financial and non-financial) is a
their responsibilities to shareholders, of the Company. Jeremy McClean is the fundamental part of the Company’s
the investment community and others Audit & Risk Committee Chairman. At least business strategy. The Audit & Risk
for overseeing the Company’s financial one member of the Committee must have Committee is responsible for overseeing
statements, financial reporting processes, an accounting or financial background; risk management practices and works
internal accounting systems, financial Jeremy McClean is a Chartered Accountant closely with Management, external
controls and South Port’s relationship with and a member of Chartered Accountants advisors and the Company’s auditors to
its independent auditors. Australia & New Zealand. ensure that risk management issues are
properly identified and addressed.
The Committee is governed by an Audit Directors’ Attendance at Meetings –
& Risk Committee Charter adopted by the 1 July 2016 to 30 June 2017 The Company has a separate Risk
Committee
Board in August 2004 which is available Management Committee which meets
Meeting
Meeting
on the Company’s website annually to review changes to the risk
Annual
Board
Audit
(www.southport.co.nz) as an appendix to profile of the business and to consider
the Corporate Governance Code. The ways of mitigating additional risks
Board regularly review the performance Total Meetings 1 9 2 identified. Mr Jeremy McClean, as a
of the Committee in accordance with Director currently sitting on the Audit &
the Charter. R.T. Chapman 1 9 2 Risk Committee is appointed to the Risk
R.G.M. Christie 1 8* - Management Committee as a Board
The Audit & Risk Committee Charter representative.
includes an external audit policy to P.W. Cory-Wright 1 9* 1
ensure there are processes in place to T.M. Foggo 1 9 -
satisfy the Board as to the quality and G.D. Heenan 1 2** 1
independence of the external auditors.
C.M. Kearney 1 6** -
The Committee comprises of three J.J. McClean 1 9 2
independent non-executive members
of the Board of Directors. * Joined one meeting by conference call
** G.D. Heenan retired and C.M. Kearney duly
elected in October 2016.SOUTH PORT ANNUAL REPORT 2017 25
HEALTH & SAFETY PANEL SHAREHOLDER SENIOR MANAGEMENT
Health and Safety (H&S) continues to be a COMMUNICATION REMUNERATION
key focus of the Company and consistent
South Port seeks to ensure its shareholders The Board is responsible for reviewing
improvement has been made in this area
are appropriately informed of its the remuneration of the Company’s senior
over recent years. The Company presently
operations and results, with the delivery management in consultation with the Chief
has two full time personnel dedicated to
of timely and focused communication, Executive of the Company.
H&S matters in addition to all personnel
and the holding of shareholder meetings
having responsibility for H&S in their daily The remuneration packages of senior
in a manner conducive to achieving
work processes. management consist of a mixture of a
shareholder participation.
base remuneration package and a variable
The Board operates a H&S Panel which
To ensure shareholders have access to remuneration component based on
consists of the full Board, together
relevant information, the Company: relevant performance measures.
with two management and two staff
representatives. The H&S Panel’s function öö Provides a website which contains The remuneration policy for senior
is to establish a H&S Strategic Plan, monitor media releases, current and past annual management is designed to attract,
its implementation, undertake scheduled reports, dividend histories, notices of motivate and retain high quality
operational site visits and address key meeting and other information about employees who will enable the Company
H&S issues facing the business, with the Company; to achieve its short and long term
the objective of achieving continuous objectives.
öö Makes available printed half year
improvement. The H&S Panel meets at
and annual reports and encourages
least three times annually. A general and wider disclosure of
shareholders to access these
senior management and other staff
Another important tool used to deliver documents on the website and to
remuneration is included in the “Employee
H&S improvement is the Company’s PACE receive advice of their availability by
Remuneration” section set out in the
Programme, with the H&S component email;
Statutory Information section of this Annual
being driven by the South Port H&S öö Publishes press releases on issues/ Report, where the Company has disclosed
Committee. Output from the PACE events that may have material in various escalating remuneration bands
Programme and the H&S Committee information content that could impact the number of employees and former
is fed through to the H&S Panel for on the price of its traded securities; employees whose remuneration, including
consideration. benefits, exceeds $100,000.
öö Issues additional explanatory
memoranda where circumstances
CONTINUOUS DISCLOSURE require, such as explanations
of dividend changes and other BOARD OF DIRECTORS
In accordance with the NZX Listing Rules, explanatory memoranda as may be
required by law,
REMUNERATION
the Company is required to disclose
to the market matters which could be öö Maintains regular contact with leading According to the Company’s remuneration
expected to have a material effect on the analysts and brokers who monitor the policy, directors should receive
price or value of the Company’s shares. Company’s activities. remuneration that is fair and reasonable
Management processes are in place to in a competitive market for the skills,
ensure that all material matters which Shareholder meetings are generally knowledge and experience required by
may require disclosure are promptly held at the Company’s place of business the Company.
reported to the Board through established (Bluff) at a time which best ensures full
reporting lines. Matters reported are participation by shareholders. Further detail can be found in the
assessed as and when required by the remuneration policy included in the
NZX Listing Rules and advised to the Full participation of shareholders at Company’s Corporate Governance Code.
market. The Chairman and Chief Executive the Annual Meeting is encouraged to
are responsible for communications ensure a high level of accountability
with NZX and for ensuring that such and identification with the Company’s
information is not provided to any person strategies and goals. Shareholders have
or organisation until NZX has confirmed its the opportunity to submit questions
release to the market. prior to each meeting and senior
management and auditors are present to
All material announcements are posted assist in answering any specific queries
on the Company’s website raised. There is also an opportunity for
www.southport.co.nz. informal discussion with Directors and
senior management for a period after the
meeting concludes.You can also read
