CHATHAM ISLANDS ENTERPRISE TRUST AND SUBSIDIARIES FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008 CONTENTS Chaian's and Chief Bxccuive Reports Companict Repo Income Seatment Satement of Change in Ely Bates Sheet Seement of Cath Hows “Trading Compania [Notes othe Finaneal Statens Audie Report 2 % 14-19 20-46 47248 i(CHATHAM ISLANDS ENTERPRISE TRUST REPORT OF THE CHAIRMAN Chatham Itandk Frese Trust hat eon opeciing since 1 December 1981. Chatham Islanders can fol very proud of te contoution since chis date fir taking te fll responsibly of previouly funded and admiaieored cerponsibilies of cham Islands Counel and che Department OF Internal sffies which in 1991 weee coming the New Zealand texpyens $52 allion anual. ‘The 17% annual eeport of the Chatham tslnds Enterprise ‘Trust shows s last of $1,085,810 and a ceductin inthe Tut suet bane of $7633 116 ‘We sce continually cviewing our opeeations tn ensure effin and thac we can mect the requirements of our ‘Tsk doe. ‘While the deed objects appeae all encompatsing we requ ‘the capital to ensute those objects can he met snd in this soc, fill oF expt belies the Trust an indeed the communis’ problem. Tn 2007/08 the ‘Trust and companies Author submitted to government for atittinee towsnly improvement in fnfeastructue acess and asinance in alping ro devolop the busines ess for these, Thete being energy, communications, port snd aispart flies chat eoquie significant improvoment and funding to pu resident of Chatham Ilade both on an quinble footing w thei malcland counterparts and to entice we ca achive mutrnnble grow, We have boon informed ther i aa Informal Minstdal Working Group considering our xu. ‘The eaimted enats ofthese peojeers sre berwcen $35 and $45 milion doles. This reomé a Jot of money for 636 zesidenrs ‘bur the forgonten fcr are ‘We aoa viable South Pacific Ilan 820ker est oF male New Zealand (Chatham's aid nat enjoy he bent of taxpayer funded infarct in hyo dams, poweeseiclation, modern telesomnuieations thtt rhe rest of New Zealand recived {We have ne pactneships with the crown in intents Fie ‘We have no partnecship withthe erowe to craure lgisaton doce not dindvnatnge ove island come sway acest fo the Het. $128milion sh caught within the Chatham's 200 mile BEZ ‘The ext 4110 millon CPI adjusted avoided subsidized cost tothe crown bythe ‘it, community and service provider since 1991 We were encouraged by government in this and have invested over $800k of community funds develoing Durines plant foe energy and brosdbend, Chatham’ lke anpheee use eranot have sustainable economic and sacl growth without viable infseracte ‘eas cleadly suc in 1991 thar che ests Hinied capital fu seceived from Cenreal Goveenent milion) ‘nd 1200/onnes af development wet Gh vested withthe Tawa ass camenuaiy organisation oa behalf of ‘Chnehim Yalan Gsheor wuld never be afficient ro maintsin# brant PlficIaland exomomy. Jf Goveenment isto be a tur partner with Chatham Islands then they mist hold to heir end ofthe bitin. This ‘being that Chatham fands is che exstom sinc on the New Zealand fg, in ccengriseda¢ a viable South Pacific Tend sed cools fi nace ro ensure contiowes to ad yl 8 the NZ. economy. In 2007-08 Trostecs and Dicectors have been reviowing thle respective strategic plans and operations to ensure we ace performing 1 not only our expectations but thoxe expecred foe a dynamic community Last year we indicsted thar duc ro our infestverare comminments and the iniily of cue community o filly fd thee swe would seca decine in che Trust carh reserves PROMOTING ECONOMIC DEVELOPMENT AND WELLBEING 2“Thine occuring. "Tevst asset base hat deelicd with the wodd wide deine in eqs ani a decline in ager vais de impalement of rand the requirement we mare ro New Zealand Interasonal Financial Reporting Standacd (NZIPRS) for 2007-08. The financial atementsdscave dhe impact or converting ro eeporting under NZIFRS and in particular Quota hat had 6 ‘oe restated nt cost athe than market valve ne dane in previous yon. ‘We have ween down ove Forestry assets dve to poor market oulook. ts due to NZIFRS eequiremant to he sented a coe, ‘We have writen down ae Fish quota ‘We have weitten down ur Waitangi Whacf Patty due ro asset impricment, namy “concrete cancer". CCl Aisport Limited peeformed wll this yen, though made na operating loss. We enerinus wo disuse with Ais Chathamns requierenss ro improve peofinblity and to cnsure roquiements for them to opetatecffcently are met. In September 2007 we approached the Goverement to consider taking 2 chacchalding inthis company as cy have ina number of other regional apport with the consideration they assist ux in meeting the curent and furwe fequitements to ensure this ‘important export link meets our counmunity requirements. Wl mwait progres on this. ‘Chatham Inds Porte Led had signalled nwo sje concerns which we sought resolution on in 2007-08, The conerete “eancee” peeblem affecting tho whiefstrucrce and the nea for all wenther accent to enee veeelé can work ina anf and frsrional en witht dy. “The curtens “open roadstene™ faclicy cost the shipping service operators ~4250,000 annual, cnet which affct thee ‘basioess planing and vablry which ulimatly must be passed antn our comma, We recived eeparts on the Waitangi whet fair. The “eoneete emnce ufecing the herd wil nea to be addressed ‘over a period of 510 years. The idiestive cor fr this woek being $6.6 millon. The “weoden stock access way” was in need of epai and we should iowmedintelyceduce the wright imit on this. "his we have done. The indeatve cust foe epic balng $800,000 "The reakwste” coneepy, to halp cemedy wharf ll weather acces hne an indeaive cost of $10 mulion ‘We aso propnsed 2 "fore proot” concept ofa cll an sal off (ore) ata cat of $22 million We seni progress om this, ‘The ecltyehat both the Port xo Aigport ave esental nfstructural sssets Foe Chathon Ilan, They are our natinal igh. The sir and sen opertions contin to dicate economie growth for Chatham Ilands {eis sbuoluely vital that these ae econemiznly viable and meet our community sogurements, tr has been a dificul yeae foe both service opeator and the community with increased ens oF emerson, ‘The Tru, the Shipping Review Group (SRC) and Blick Robin Vecighter id have struggled to find a complete gelation to ‘ow shipping needs. The SRG made further represemation to Goveenment 10 cck opportunity foc forign fag sevice coptiona cueenty denied unde $198 of the Mace raneport et Tt is estential we work together eo enmure cconnmle ‘opportunity i avalible to both the community an the serves peavidee, Cl Koresity Limited i cerently reviewing stmtegcs and heir investment. We revalued our Mahia Forest ineesoment ddownwanls. ‘The cuceent surplus in woed wood supplies, deprested log prices and increme inthe ena of shipping have dlecrensed al forestry valves and it ie prudent chi be ceflcred in the anrual report. We have abvays taken the view that Foecsey it a long teem inverters: Mahia pine foes being 13 ro 20 year to sutucty withthe experaton this investment ‘would provide a cxpial injection funds inv Tate opera at cha ne. We are considering the appropriateness nf saling Mahi. The Chatham's maerucaepa forest isan on going peojet rowing joel eppoeranity with mat on ealy planted tees vome 25 19 30 ene cue, PROMOTING ECONOMIC DEVELOPMENT AND WELLBEING a 4h