CENTRAL PLAINS WATER TRUST
ANNUAL REPORT
FOR THE YEAR ENDED 30 JUNE 2006
Table of Contents
DIRECTORY .......................................................................................................... 3
CHAIRPERSON’S REPORT ................................................................................. 4
FINANCIAL STATEMENTS ................................................................................ 8
Statement of Financial Performance ................................................................. 9
Statement of Movements in Equity ................................................................... 9
Statement of Financial Position ........................................................................ 10
Statement of Cash Flows ................................................................................... 11
Statement of Accounting Policies ..................................................................... 12
Notes to the Financial Statements .................................................................... 14
AUDITOR’S REPORT ............................ ERROR! BOOKMARK NOT DEFINED.
Annual Report 2006
Central Plains Water Trust
Directory
For the year ended 30 June 2006
Trustees
Doug Marsh (Chairperson)
Doug Catherwood
Derek Crombie *
Dick Davison (reappointed 30 June 2006)
John Donkers (retired 30 June 2006)
David Haslam
Bruce Irvine (retired 30 June 2006)
Claire Mulcock (term expires 30 June 2006 nominated by Parliamentary Commissioner for the
Environment and appointed by the Councils)
Denis O’Rourke
Willie Palmer
Viv Smart (appointed by Ngai Tahu)
Clare Williams (reappointed by Ngai Tahu on 30 June 2006)
* The Trust has approved a leave of absence from 7 April 2005
Trust Settlors
Christchurch City Council (50%)
Selwyn District Council (50%)
Auditors
Audit New Zealand
On behalf of the Auditor-General
PO Box 2
CHRISTCHURCH
Solicitors
Buddle Findlay
PO Box 322
CHRISTCHURCH
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Annual Report 2006
Central Plains Water Trust
Chairperson’s Report
Highlights

Resource and land use consent applications lodged.

Resource consent applications publicly notified by Environment Canterbury (ECAN)

Sustainability Code progressed.

Recreation potential identified.

A culture and philosophy of open transparent stakeholder community driven
consultation maintained.

Close consultation and collaboration with Central Plains Water Limited maintained.

Scientific studies to support consent application notification process initiated.

Consultation continuing with a wide range of interest groups.
The natural advantages of Canterbury for water enhancement and agriculture are not equalled
any where in the world nor are the opportunities afforded to the Central Plains Water Trust
(CPWT) for protecting water quality, restoring degraded waterways, over-allocated aquifers, while
pursuing ecological, recreational, cultural and social sustainability with regional economic growth.
The year ending June 2006 was a milestone for Central Plains Water and one step closer towards
achieving Councils’ vision for Canterbury’s economic transformation while enhancing
environmental and recreational values.
The Central Plains Water Trust was established by the Christchurch City and Selwyn District
Councils to facilitate sustainable development of Central Canterbury’s water resource. This
evolved to become a large scale community water enhancement scheme providing water for
irrigation between the Rakaia and the Waimakariri Rivers.
Trust Performance
The Trustees met their obligations through managing the affairs of CPWT strictly in accordance
with the objectives and terms of the CPWT trust deed and communicating regularly and
comprehensively to both Councils through quarterly reports, supplementary reports, seminars
and the half-yearly report.
In accordance with the Memorandum of Agreement approved by Councils, the Trust contracted
Central Plains Water Limited (CPWL) to prepare and make application for resource consents for
the Scheme.
As at 30 June 2006 good progress was made by CPWL as it addressed the issues that needed to
be resolved before consent applications for the Base Scheme could be lodged and notified.
The Memorandum of Understanding between the Trust and the Company provides that the
conduct of the resource consent application by CPWL will be “in conjunction with and close
consultation with the Trust”.
The Trust established non-negotiable absolutes for this process and defines “close consultation”
as meaning.

4
Adherence to best practice environmental standards (as contained in the
Memorandum of Agreement)
Annual Report 2006
Central Plains Water Trust

The culture and philosophy of open transparent stakeholder community driven
collaboration, sustainable development principles and triple bottom line values.

Joint decision-making on all major issues, mitigation, consent strategy, proposals and
milestones.

Joint decision-making in respect to:
- Critical Path Planning
- Budget
- Risk sensitivity analysis
- Milestone timing

Adherence to budget.

Full and timely disclosure of all pertinent information and data concerning the scheme
and decision-making inputs to the Executive.
Some may construe close consultation as potential for conflict of interest whereas the
collaborative approach ensures that sustainability principles will be balanced with economic,
cultural, social and environmental values.
Only if and when consents are granted will there be a Scheme, until that time it remains a
conceptual vision. At the point consents are granted, and in accordance with recommendations
made previously to both Councils, the Trust should be restructured reflecting its changing role
and purpose.
Governance
Claire Mulcock has withdrawn from the Project Management Team and resumed her role as a
Trustee. Her term of appointment recommended by the Parliamentary Commissioner for the
Environment expired on 30 June 2006 Dr. Rod East the other PCE appointee who retired in
2005 has not been replaced by the Councils.
The Trust was advised by Christchurch City Council staff that in November 2002 the Council
passed a resolution requiring the yet to be formed Trust to submit the Assessment of
Environmental Effects to Christchurch City Council and Selwyn District Council for approval
before lodging with Environment Canterbury. This resolution was not properly communicated
nor was it included in the Trust Deed or Memorandum of Understanding that established the
Trust. Both documents were approved and signed by the Christchurch City Council.
While advice has been received that Selwyn District Council approved the Statement of Intent
for the period ending 30 June 2007, Christchurch City Council’s position is unclear.
The question of conflict of interest has arisen as a consequence of certain Trustees (three from a
total of nine Trustees) who also serve as directors of Central Plains Water Limited. Those
concerned include Doug Marsh, Doug Catherwood and Willie Palmer.
The Trust, recognising that commonality exists between the two entities; namely, the obtaining of
resource consents, recommended to both Councils in 2003 that the Trust be restructured
following the consent process. The restructure is to include trustee composition having regard to
the changed role of the Trust and future competency and capability profiles.
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Annual Report 2006
Central Plains Water Trust
Conflicts of interest are dealt with in accordance with the Trust Governance Best Practice Code
which provides as follows:
“Conflicts of Interest
A Trustee should not have any significant conflict of interest that is potentially detrimental to the Trust
including


Affiliations with a competitor.
Affiliations with parties that contract or provide services to the Trust.
A Trustee who is interested in a transaction entered into, or to be entered into by the Trust;



Shall declare that interest to the Trust immediately the Trustee becomes aware of the interest.
Shall refrain from voting
If requested withdraw from the meeting during discussion.
The Trust shall maintain an interests register in which shall be entered the required disclosures made by
Trustees. Entries in the register shall be available for disclosure.
Trustees who are also Directors of CPWL acknowledge that they serve in dual capacities only until consents
hearings take place. This recognizes both entities commonality of purpose as expressed in the MOU; namely, that
consents applications will be pursued having regard to environmental, social, recreational, and cultural values as
well as economic drivers”.
Trust Strategic Direction
The Trust’s goals remain consistent with the Trust Deed and target the following outcomes:

Sustainable development of the region’s water resource

Facilitate opportunities for agricultural and horticultural diversity

Facilitate education of water issues affecting the region

Balance enhancement of economic benefit with ecological, social and recreational
values.
Following the confirmation of the resource consents, the Trust’s focus will be directed towards
sustainable development of the water resources and executing agreements with Central Plains
Water Limited to make the consents available to the Company on agreed terms and conditions.
This will comprise:

Establishing protocols necessary to monitor the activities of CPWL

Establishing and operating a public complaints procedure

Establishing protocols necessary to:
-
monitor the users of the Scheme in respect of Water Use Agreements and
resource consent conditions and
-
dealing with non-compliance
A secondary goal will be identifying projects to further pursue the Trust’s charitable and
environmental objectives and to seek funding from the Company including an environmental
levy to be administered by the Trust.
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Annual Report 2006
Central Plains Water Trust
The Trust, recognising that the health and well-being market is one the world’s fastest growing
sectors, will champion the application of science & technology as drivers of agricultural,
horticultural diversity. A vision of what Canterbury is capable of becoming. The pursuit of new
generation, high value bio-foods, nutriceuticals and bio-medical alternatives to agriculture
commodities as a catalyst for land use change.
Acknowledgements
Central Plains Water achievements are the culmination of a hard working team of Trustees and
professionals who have collectively contributed immeasurably to the year’s success.
The advisory input and financial services from the Selwyn District Council and in particular
Marion Seyb are gratefully acknowledged as is the strategic wisdom provided by Geoff Barnes,
Christchurch City Council and Douglas Marshall, Selwyn District Council.
For and on behalf of Central Plains Water Trust
Doug G Marsh
Chairman
27 September 2006
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Annual Report 2006
Central Plains Water Trust
FINANCIAL STATEMENTS
For the year ended 30 June 2006
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Annual Report 2006
Central Plains Water Trust
Statement of Financial Performance
For the year ended 30 June 2006
2006
$
2005
$
Operating Revenue
Management and Administration Fees
40,276
113,424
Total Revenue
40,276
113,424
Operating Expenditure
Trustee Honorarium
Trustee Meeting Fees
Trustee Expenses
Administation
Audit Fee
Consultants
Insurance
26,504
7,955
2,102
150
1,000
2,565
45,289
31,733
9,584
1,944
1,000
20,274
3,600
Total Expenditure
40,276
113,424
Net Surplus/(Deficit)
$
-
$
-
Statement of Movements in Equity
For the year ended 30 June 2006
2006
$
2005
$
Equity at the Start of the Period
1
1
Surplus for the Period
-
-
Total Recognised Revenues and Expenses for the period
-
-
Contributions from owners during the period
-
-
Equity at the End of the Period
$
1
$
1
The accompanying Statement of Accounting Policies and Notes to the Financial Statements form part of and are
to be read in conjunction with these financial statements
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Annual Report 2006
Central Plains Water Trust
Statement of Financial Position
As at 30 June 2006
2006
$
2005
$
1
1
Equity
General Reserves
TOTAL EQUITY
$
1
$
1
Represented by:
Current Assets
Cash and Bank
Accounts Receivable
1
Total Current Assets
111,311
839
30,324
50,884
112,150
81,208
2,704
109,445
81,207
-
112,149
81,207
Current Liabilities
Accounts Payable
Revenue in Advance
2
3
Total Current Liabilities
NET ASSETS
$
1
D G Marsh
Chairperson
D O’Rourke
Trustee
27 September 2006
27 September 2006
10
$
1
The accompanying Statement of Accounting Policies and Notes to the Financial Statements form part of and are
to be read in conjunction with these financial statements
Annual Report 2006
Central Plains Water Trust
Statement of Cash Flows
For the year ended 30 June 2006
2006
$
2005
$
196,900
196,900
214,454
214,454
110,432
5,481
115,913
181,755
11,688
193,443
80,987
21,011
Net Cash from Investing Activities
Net Cash from Financing Activities
-
-
Net increase/(decrease) in cash
Plus opening cash balance
80,987
30,324
21,011
9,313
Operating Activities
Cash was provided from:
Receipts from Customers
Cash was distributed to:
Trustees/Suppliers
Net GST
Net Cash from Operating Activities
Closing Cash Balance
9
$
Consists of:
Cash and Bank
Closing Cash Balance
111,311
$
30,324
111,311
$
111,311
30,324
$
30,324
The accompanying Statement of Accounting Policies and Notes to the Financial Statements form part of and are
to be read in conjunction with these financial statements
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Annual Report 2006
Central Plains Water Trust
Statement of Accounting Policies
For the year ended 30 June 2006
Statement of Reporting Entity
Central Plains Water Trust was formed through a Declaration of Trust on 4 April 2003. The
Trust is a Council Controlled Organisation, as defined by Section 6 of the Local Government Act
2002. The Trust is jointly controlled by Christchurch City Council (50%) and Selwyn District
Council (50%).
The financial statements of Central Plains Water Trust have been prepared in accordance with
the requirements of the Local Government Act 2002 and Financial Reporting Standards issued
by the New Zealand Institute of Chartered Accountants.
Measurement Base
Accounting policies recognised as appropriate for the measurement and reporting of the financial
performance and financial position under the historical cost method have been followed in the
preparation of these financial statements.
Accounting Policies
The following specific accounting policies, which have a material effect on the measurement of
the financial performance and financial position, have been applied.
Revenue Recognition
Revenue is recognised on an accruals basis.
Revenue in Advance
Revenue in Advance is recognised as revenue when expenditure is incurred. This practice is
based on the Reimbursement Agreement with Central Plains Water Limited dated 6 May 2004.
Income Tax
As the Trust is a Charitable Trust it is exempt from income tax under sections CB 4(1)(c) and
CB 4(1)(e) of the Income Tax Act 1994.
Goods and Services Tax
These financial statements have been prepared on a GST exclusive basis except for Accounts
Payable and Accounts Receivable which are stated GST inclusive.
Accounts Receivable
Accounts Receivable is stated at estimated realisable value after an allowance for amounts which
are not considered recoverable.
Financial Instruments
The Trust is party to financial instrument arrangements as part of its everyday operations. These
financial instruments include bank deposits, debtors and creditors.
Revenue and expenditure in relation to all financial instruments is recognised in the Statement of
Financial Performance.
All financial instruments are recognised in the Statement of Financial Position at their fair value.
The Trust has not entered into any off-balance sheet instruments.
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Annual Report 2006
Central Plains Water Trust
Statement of Cash Flows
Cash means cash balances on hand, held in bank accounts, demand deposits and other highly
liquid investments in which the Trust invests as part of its day-to-day cash management.
Operating activities include cash received from all income sources of the Trust and record the
cash payments made for the supply of goods and services.
Investing activities are those activities relation to the acquisition and disposal of non-current
assets.
Financing activities comprise activities that change the equity and debt capital structure of the
Trust.
Changes in Accounting Policies
In the prior years the Trust has prepared its financial statements based on the differential
reporting requirements of the Financial Reporting Standards issued by the New Zealand Institute
of Chartered Accountants.
In the current year the Trust has prepared financial statements in accordance with the full
requirements of the Financial Reporting Standards. The Trust has moved to full compliance on
the basis that full disclosure could be achieved at minimal cost while providing additional
information to stakeholders.
Full compliance with the Financial Reporting Standards has required additional disclosure in the
accounting policies and notes for Financial Instruments. It has not impacted on the disclosure or
method of preparing any of the figures in the financial statements.
All other policies have been applied on a basis consistent with the prior year.
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Annual Report 2006
Central Plains Water Trust
Notes to the Financial Statements
For the year ended 30 June 2006
1. Accounts Receivable
Central Plains Water Limited
GST Receivable
Christchurch City and Selwyn District Councils
(Capital)
2006
$
2005
$
838
1
47,179
3,704
1
839
50,884
2006
$
2005
$
1,654
1,050
58,151
13,435
8,571
1,050
2,704
81,207
2. Accounts Payable
Selwyn District Council
Trustees of Central Plains Water Trust
Trade Creditors
Other Accruals
3. Revenue in Advance
The Trust provides assistance to Central Plains Water Limited to raise the capital
required to carry on its business and obtain the resource consents necessary for the
operation of the Scheme. The Trust has also promised to make the resource consents
available to the Company on various terms.
In consideration for this the Company has agreed to reimburse the Trust for all trustee
payments incurred up to the date the resource consents are obtained. This agreement is
documented in the Reimbursement Agreement dated 6 May 2004.
In prior year’s the Trust periodically invoiced the Company for reimbursement of
expenditure as it was incurred. During the 2005/2006 financial year the Company
advanced the budgeted expenditure of the Trust until 31 March 2008 to the Trust.
The Revenue in Advance amount of $109,445 represents the remaining balance of the
Company’s advance.
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Annual Report 2006
Central Plains Water Trust
4. Transactions with Related Parties
During the reporting period Central Plains Water Trust entered into the following
transactions with related parties:
Central Plains Water Limited
The following Trustee’s are also directors of Central Plains Water Limited:
- Doug Marsh
- Doug Catherwood
- John Donkers
- Bruce Irvine
- Willie Palmer
During the year, the Trust provided management and administration services to the
Company to the value of $40,276 (2005: $113,424). The Company has paid the Trust in
advance for its services to 31 March 2008. At year end the revenue in advance balance
was $109,445 (2005: Nil).
Selwyn District Council
Selwyn District Council makes payments to suppliers on behalf of the Trust who then
reimburse the Council. These payments total $63,475 for the reporting period
(2005: $99,464). The Council is owed nil at balance date (2005: $58,151).
Selwyn District Council completed accounting services for the Trust for which no charge
is made.
Trustees
There were no transactions directly with the Trustees other than the payment of
honorarium, meeting fees and expenses.
Mr W J Palmer is a trustee of Central Plains Water Trust and partner in Buddle Findlay.
Buddle Findlay acts for the Trust as required. During the reporting period there were no
transactions between the Trust and Buddle Findlay (2005: Nil).
Mr W D M Crombie is a trustee of Central Plains Water Trust and employee of G H D
Limited. Mr Crombie has been granted a leave of absence from the Trust from 7 April
2005. There were no transactions between G H D Limited and the Trust during the
reporting period (2005: $19,394). The amount owed by the Trust at balance date is nil
(2005: $7,651).
5. Financial Instruments
Credit Risk
Financial instruments, which potentially subject the Trust to credit risk, principally
consist of bank balances and debtors.
The maximum exposure to credit risk at balance date is the fair value of the financial
instruments as stated in the Statement of Financial Position. Significant concentrations
of credit risk apply principally in respect of cash. The Trust reduces this risk by investing
with high credit rating institutions.
Interest Rate Risk
The Trust has no interest rate risk as it has no non-current liabilities.
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Annual Report 2006
Central Plains Water Trust
Fair Value
The fair value of financial instruments is equivalent to the carrying amount as stated in
the Statement of Financial Position.
Currency Risk
The Trust has no currency risk since all financial instruments are dealt with in New
Zealand dollars.
6. Statement of Commitments
The Trust has no capital or lease commitments as at 30 June 2006 (2005: Nil).
7. Statement of Contingencies
The Trust has no contingent assets or liabilities as at 30 June 2006 (2005: Nil).
8. Post Balance Date Events
There have been no significant post balance date events.
9. Reconciliation of Surplus to Statement of Cash Flows
2006
$
Deficit after Taxation
Movement in Working Capital items:
Accounts Receivable
Accounts Payable
Revenue in Advance
Net Cash Flow from Operating Activities
2005
$
-
-
50,045
(78,503)
109,445
109,343
(88,332)
-
80,987
21,011
10. Performance Information
Performance Indicator 1
To provide assistance to, and monitor the progress of, Central Plains Water Limited as it
pursues resource consent for the Central Plains irrigation scheme on behalf of the Trust.
Achievement 1
The consent application was lodged in December 2005, however work is continuing on
the scientific studies necessary to support the application notification process.
Consultation is continuing with a wide range of interest groups.
Resource consent applications were publicly notified by Environment Canterbury on
24 June 2006.
Applications for Land Designation and Land Use resource consents were lodged on
12 June with Selwyn District Council. This was accompanied by a substantial effort to
notify all stakeholders including affected landowners and both Councils.
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Annual Report 2006
Central Plains Water Trust
If Selwyn District Council notifies within 30 days and allows a 20 working day
submission period, closing dates for both Environment Canterbury and SDC hearing
submissions will be very close.
Ngai Tahu Property Ltd
The request for a declaration on Waimakariri River water priority was heard on 26 June
2006. An Environment Court decision is expected by September 2006.
Performance Indicator 2
Monitor the Sustainable Farming Fund (SFF) project to develop a draft generic
sustainability code in consultation with core stakeholders.
Achievement 2
The code has been adopted in principle and has determined the extent to which Trust
stakeholder/community expectations are met. Progress is continuing on the draft SFF
Irrigation Scheme Sustainability Code that addresses the following;
 Scheme Sustainable Management Policy
 Sustainable Management Agreement
 Sustainable Irrigation Plan
 Monitor/Review/Revise
The framework is receiving favour with stakeholders consulted including the Water
Rights Trust, Fish and Game, Environment Canterbury Water Portfolio Group and Ngai
Tahu.
Two further research studies under the umbrella of the Sustainable Farming Fund and
Ritso Society have commenced:
 Market Based Instruments to achieve resource use efficiency. This study will
include water trading and consider transfer systems as well as credit or nonmonetary rewards.
 Open channel versus piped distribution systems for both existing and new largescale water enhancement projects in New Zealand.
The Ashburton Community Water Trust (ACWT), Central Plains Water Trust and
Central Plains Water Limited have all signed the agreement setting out how Rakaia River
water will be shared between Central Plains Water and ACWT – essentially 50/50 or 20
cubic metres each if a 40 cubic metre take is granted.
Discussions between the parties including Ashburton District Council (ADC) and
Selwyn District Council have taken place. This has resulted in a new draft cost sharing
agreement providing for a $500,000 contribution paid by ADC and ACWT to Central
Plains Water. This contribution is to recognise historic contributions made by Central
Plains Water in ACWT’s interests and also the work CPW will do to secure the Rakaia
River take of 40 cubic metres. This agreement lies with ADC/ACWT waiting ratifying
by the ADC.
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Annual Report 2006
Central Plains Water Trust
Performance Indicator 3
To identify and promote the Scheme’s recreational opportunities and environmental/
community enhancers.
Achievement 3
The services of acclaimed multi-sport athlete Steve Gurney have been contracted to
examine the potential recreational benefits of the Scheme, creating a world class
adventure exponential hub and gate way to the Southern Alps
The study is complete and under consideration. It is proposed to incorporate a range of
recreational benefits into the Scheme’s ultimate design and operation including off-road
walking and cycling, artificial white and flat water kayaking, yachting, windsurfing and
rowing on the headrace canal and storage lake infrastructure.
Final decisions on what will be built will be developed in consultation with shareholders,
local communities and user groups.
18