L A KE TAU P Ō
Forest Trust ANNUAL REPORT
2019
Contents 0 2 – 0 3
VISION, MISSION A N D S T R AT E GY
0 4 – 0 7
CHAIRMAN’S REPORT
0 8 – 0 9
2019 HIGHLIGHTS
T R U S T E E S A N D S TA F F
12–13
OWNERS’ REPORT
14–18
C H A R I TA B L E T R U S T
10–11
2 0 – 2 1
ABOUT THE TRUST
FORESTRY HIGHLIGHTS
2 2 – 4 3
FORESTRY REPORT
4 4 – 4 5
FINANCIAL REPORT
4 6 – 4 7
I N V E S TM E N T R E P O R T
5 0 – 5 7
SUMMARISED FINANCIAL S TAT E M E N T S
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G R O U P D I R E C TO R Y
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THE TRUST ORDER
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L A N D B LO C K S
Lake Taupō Forest Trust
Annual Report 2019
Our Vision Kia ū ki te whenua Tū tangata ki te ao
To be a diversified and sustainable global land and asset manager centred in Aotearoa, while being a responsible investor for the wellbeing of our people
Strategy 2018–23 POU TIKANGA
The way we do things is led by our Tūwharetoa tikanga • We will understand our tikanga • We will live by our tikanga
POU TANGATA
Enabling meaningful benefits for our people • Engagement with our people • Delivery of benefits • Knowing our people
POU WHENUA
We are enabling sustainable land use that is consistent with our tikanga • Knowing our natural taonga • Pursuing excellence in land management • Being active kaitiaki
POU TAHUA
We are an organisation that is fit for purpose and has a team to enable the business to grow
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• Investment • Our teams • Our culture • Manaakitanga
Lake Taupō Forest Trust
Ki te hoe tonu i te waka moemoeā o rātou kua ngaro, kia whai hua hoki ngā wawata o ngā uri whenua
Annual Report 2019
Our Mission
To realise the dreams of those who have gone before us by fulfilling their expectations to build a competitive business, respect their customary values, and protect their lands and assets in order to deliver real benefits to their descendants
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Lake Taupō Forest Trust
Annual Report 2019
Chairman’s Report
INTRODUCTION Earlier this year, we celebrated a 50-year lease agreement, a partnership with the Crown that saw our lands placed into a forestry venture for a term of two rotations. During those 50 years, that term was reduced to one rotation. We have contributed more than $80 million towards dividend and grant distributions to owners; we have seen our asset base grow to $428 million; and we have increased the number of Māori land blocks under Trust administration from 58 to 68 and added 13 general land blocks. I remind you of these achievements because it helps set the scene as we continue our journey of growing and developing our asset base and creating better outcomes for you, the owners. We have learnt much from the past 50 years. We know what works well, and we know what we can do better. We also know that there are challenging times ahead – climate change, water quality, pest management and providing more meaningful outcomes for our owners. We will need your continued support in meeting those challenges head on and bringing about positive change.
STRATEGY
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As we near full exit of the Crown from Lake Taupō Forest Trust lands in 2022, it is important that we remain focused on our transition strategy in taking full control of our forests. Earlier this year, we signalled the need to change the Trust Order to make it fit for purpose by removing clauses that are no longer relevant and updating other clauses
Lake Taupō Forest Trust
Annual Report 2019
He hōnore he korōria ki te Atua He maungārongo ki te mata o te whenua He whakaaro pai ki ngā tāngata katoa E ngā iwi, arā, koutou katoa e whai pānga ana ki te ngahere o Taupō Moana Arā koutou katoa kua tae mai nei ki te whakarongo ki ngā mahi kua oti nei i tēnei tau, tēnā koutou katoa E maumahara ana ki ō tātou mate Arā, rātou kua huri atu ki tua o te ārai Haere, moe mai i runga i te rangimārie Moe mai i roto i te Ariki Nō reira, Kia ora tātou katoa.
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Lake Taupō Forest Trust
Annual Report 2019
• kaitiakitanga – protection support and caring systems;
measures,
• rangatiratanga – leadership. These four protocols are supported by the principles of pono, manaaki, pūmau and mana. Rolling out the policy will initially involve a full induction for the Trustees, staff, directors of subsidiary companies and subsidiary staff.
POU TANGATA
that allow flexibility for owners to make changes without the need to seek approval from the Māori Land Court. In addition to the proposed changes to the Trust Order, the Trustees have been working closely with advisors to establish a commercial entity, made up of experienced and qualified commercial directors, that can evaluate and progress value-added opportunities. We see this as a pivotal change for the Trust: the governance and management of our commercial assets will be held at the commercial entity level while overall governance of the Trust and ownership of the commercial entity will remain with the Trustees. This means the Trustees can ‘look in but can’t touch’. We are working closely with our legal and strategic advisors to make sure there are appropriate parameters and safety measures in place for the commercial entity to operate and to ensure that our expectations are clearly met. We will update owners more about these changes at the annual general meeting.
POU TIKANGA During the year, we finalised our tikanga policy, and we will begin a full roll-out of that policy over the coming months. The policy consists of four protocols:
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• whakapapa – identity, connections, awareness, familiarity and active respect for others; • whanaungatanga – linkages to others who have a vested interest in the Forest Trust;
This year, the Trust paid an annual distribution of $5 million to owners. With each successive generation, the individual payment made to an owner decreases. The ongoing challenge for the Trustees is how to provide meaningful benefits to owners that will help transform or improve their lives and overall wellbeing. For many of our owners, the annual distribution does little. Of the 13,600 owners in the Trust, 67 per cent did not receive a payment from this year’s $5 million annual distribution despite the distribution level increasing by 25 per cent. This simply reflects that shareholdings for most owners are so small that their collective value is less than $10, and successors, for whatever reasons, have not filed an application with the Māori Land Court and registered with the Trust. The situation will worsen over time regardless of any future increases in annual dividend distributions. The Trustees, in tandem with work carried out on establishing the commercial entity, will be evaluating and assessing how it can improve overall outcomes for owners in the coming months, so watch this space.
POU WHENUA I am very pleased with the mahi being carried out by our team of environmental and pest control experts to develop the pest management strategy. The first stage of this has been to hold a series of wānanga with owners to understand the values we want to protect – in other words, to identify why we want to do any pest control. This has identified that protecting the areas of native bush and native birdlife on our lands are the highest priority, with protection of our
We are aware that the main tool used by OSPRI – aerial 1080 – is not favoured by some of our owners, but the experts confirm that its use on our lands over recent decades has been very successful in keeping pests to very low levels, and they have not identified any detrimental impacts from its use. The tools that the strategy team will recommend for the future have not yet been identified, but all options are on the table. It is probable that different techniques will be recommended for different areas, from ground-based trapping in the more accessible and less environmentally sensitive areas, through to aerial 1080 where maintaining minimal pest numbers is vital. We will keep you updated as we progress through this pest control strategy work.
POU TAHUA The establishment of a commercial company to manage our commercial assets and making changes to the Trust Order to ensure it is fit for purpose are the two main activities the Trustees initiated during the year. By the
Lake Taupō Forest Trust
The main pest species we have on our lands are possums, rats, stoats and mice, and all will need some degree of control if we are to achieve our goals. The strategy team is now working on stage two of the project, which is to come up with a plan for achieving our pest control goals in an effective and affordable manner. This work will again involve wānanga with owners and Trustees. The work is not complete, but early signs are that the types of pest control required will vary across different parts of the lands, depending on what values are identified as important in those areas.
time of the annual general meeting, we will be in a good position to provide owners with an overview of what those changes mean.
Annual Report 2019
commercial assets (pine trees) secondary. At the same time, there is a strong desire to maintain pigs and deer on at least some parts of the lands as these are an important food resource, despite understanding that these animals can be detrimental to the native forest. Aspirational goals identified in the process include the desire to have the natural environment return to what it was like 50 or 100 years ago, so we can see flocks of key bird species such as kererū and kākā, and potentially have enough of these to consider a cultural harvest.
‘It is imperative that we remain focused on our strategy to ensure stability and continuity.’ The Trust’s triennial election is scheduled for November 2019. Seven positions are available, with three of those available because of rotation. As we move through this transition phase, it is imperative that we remain focused on our strategy to ensure stability and continuity.
ACKNOWLEDGEMENTS As always, there are several people I would like to acknowledge. Without their dedication, loyalty and support, delivering our longterm vison would be impossible. First, I acknowledge the hard work and support of my fellow Trustees and their unwavering commitment to ensuring we stay focused on the kaupapa ahead. Thanks to our Chief Executive Officer, John Bishara, Group Manager, Amy Walker, and their team of administrators for their professionalism and dedication. Thanks also to Lake Rotoaira Forest Trustees for their support as well as Lake Taupō Forest Management Ltd and NZ Forest Managers Ltd for helping us achieve our vision. On a final note, I thank you, the owners, for your continued support and encouragement.
Nō reira, Ka nui te mihi ki a koutou katoa
Binky Ellis Chairman
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Lake TaupĹ? Forest Trust
Annual Report 2019
2019 Highlights
$49,800,000 Increase in the value of the wholly owned forest
8 WEEKS
8
39
Tertiary grants and 3Â scholarships awarded to successful recipients studying in a forestry-related programme
Recreational land access permit period
13,822
Total number of owners at 30 June 2019
Lake Taupō Forest Trust
Annual Report 2019
25%
Increase in the annual dividend distributions to owners from $4 million to $5 million
Commercial Company Work begins on establishing a new commercial company to manage the Trust’s commercial assets
$80,000,000 More than $80 million towards dividend and grant distributions to owners over the last 50 years
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Lake Taupō Forest Trust
Annual Report 2019
Our Trustees BINKY ELLIS Chairperson
HEEMI BIDDLE
JUDY HARRIS
TE KANAWA PITIROI
JOHN TUPARA
DAVID FLIGHT
Deputy Chairperson
Trustee
Trustee
Trustee
Trustee
TINA POROU
MARTIN WIKAIRA
MIKAERE PITIROI
HEMI BIDDLE
Trustee
Trustee
Trustee
Trustee
ABOUT THE TRUST The Lake Taupō Forest Trust (LTFT) was established by Māori Land Court Order in December 1968 to represent the interests of the owners of 58 separate Māori land titles on the eastern shores of Lake Taupō. The Trust now acts on behalf of 13,800 beneficial owners who retain their shares in the lands.
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The Trust now administers 68 blocks of Māori freehold land and 13 blocks of general freehold land. The blocks were leased to the Crown and planted in forest, with the stumpage shared between the Trust and the Crown at harvest. The lease is being
surrendered progressively by the Crown so that at the end of first rotation harvesting the Trust will own all of the forest. Education grants and Marae grants started in 1994, and distributions of income have been paid to the beneficial owners of the Trust lands since 1996. The Trust has established subsidiary companies to deal with specific areas of the Trust’s activities. It also established and funds the Lake Taupō Charitable Trust to organise community-purposes funding for education, kaumātua assistance and other projects to benefit owners. The structure of the Trust and its subsidiaries is shown opposite.
Lake Taupō Forest Trust
Annual Report 2019
Our People JOHN BISHARA Chief Executive Officer
AMY WALKER
SANDY GIBBISON
SHANYN WARENA
Group Manager
Executive Assistant to CEO
Team Leader, Owners’ Services
CASEY THOMPSON
LOGAN DAVIS
MAUREEN SMITH
Support Services Administrator
Support Services Administrator
Trust Accountant
J A R E D M AT U A U TO
GEOFF THORP
PAT R I C K N E P I A
Assistant Accountant
Director, Forest Operations Manager
Assistant Forest Manager
T E M I H I ATA HAKIWAI-WHAANGA
RAUKURA DUNSTER
Owners’ Services Officer
Team Leader, Support Services
TA R I TA K I N G I RIHARI
THERESA DERBY-HEMA
Assistant Accountant
Assistant Accountant
Beneficial Owners
Taupō Moana Investments Trading as IWIinvestor LTD
Tūwharetoa Nominees Ltd
The Weighbridge Company Ltd
Lake Taupō Forest Trust (The Trust) 11 Trustees
Lake Taupō Charitable Trust (LTCT)
Lake Taupō Forest Management Ltd
LTFT Land Holdings Ltd
Hautū Rangipō Limited Partnership 60.5% LTFT/LRFT
Old Forrest Lumber Company (Te Ngahere Ataahua)
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Lake Taupō Forest Trust
Annual Report 2019
Owners’ Report OWNER STATISTICS The total number of owners at 30 June 2019 is 13,822. Some 8,081 (58 per cent) are registered. Most owners are resident in New Zealand, but around 4 per cent are living overseas, mostly in Australia.
2019 ANNUAL DISTRIBUTION As reported in the Finance Report, the Trust declared a distribution of $5 million. This was a taxable distribution. If you did not provide the Trust with your IRD number, then the Trust was obliged to deduct tax at 33 per cent. Approximately 57 per cent of the distribution was paid to 4,448 Lake Taupō Forest Trust owners. The unpaid portion of the distribution is left in the Trust’s Lake Taupō Income Fund (LTI), more commonly known as the unclaimed distributions fund, until the details of the rightful owners are identified, and the funds
are distributed. The interest earned on the LTI is used to fund the Trust’s charitable arm, Lake Taupō Charitable Trust, which is responsible for distributing charitable grants to kaumātua and establishing charitable programmes.
PŪTEA AROHA GRANTS In 2000, the Trust established the Tangihanga Fund. The purpose of the fund is to allow for Tangihanga grants to be paid to whānau of registered owners who have died. The grant is worth $2,000 and is normally paid to the person who has been nominated by the owner to uplift the grant or to the person responsible for paying the funeral expenses. This year, the Trust paid $216,000 to 108 whānau of deceased owners. We encourage owners to register with the Trust and to complete a nomination form. This helps to administer the grant in a timely and less complicated manner.
KEY FIGURES
57%
of distribution was paid to 4,448 Lake Taupō Forest Trust owners
$216,000
FIGURE 1
Registered/Unregistered Owners 16,000
12,000
8,000
4,000
This year, the Trust paid $216,000 to 108 whānau of deceased owners.
0
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2016–17 TOTAL OWNERS
2017–18
2018–19
REGISTERED OWNERS UNREGISTERED OWNERS
Owners are reminded to contact us each time they change their address or change their bank account details.
AKU H ATA Akaneta
As is the call each year, we are interested in identifying, locating and registering all owners who hold interests in Lake TaupĹ? Forest Trust blocks so that they receive the benefits they are entitled to and we can pay outstanding distributions that are held in our unclaimed distributions fund.
BATTIN
H U R AE
Hungahunga Richard
We are particularly interested in identifying the owners listed in the table opposite. The Trust holds substantial funds, and in some cases more than $20,000, on behalf of these owners. If you know any of these people or their descendants, please have them contact this office so we can arrange registration and payment.
H U R IN U I
Teresa Hara
K AP E
Ivan Mattam
The Trust has a list of all owners for whom unclaimed monies are held. Visit our website www.ltft.co.nz for further details or contact this office.
Lake TaupĹ? Forest Trust
Annual Report 2019
UNCLAIMED DISTRIBUTIONS
Kim Irihapeti Horiana
E R U E TI Maeke H AD D O N
Wahinepai Bernice
H AP U KU Harata H IN E TAI
Te Raukohe
H IN E U R U Ngawae H IN GAIA Kahukirangi
M IH AE R A Ngarangi N AP IA
Chrystal Louise
N E P IA Kerehi
Owners of Significant Funds N GAH U IA Mariana N GAP IN E Hinekura N U KU Tangiora PAR ATI Tawhi P ITIH IR A
Temetera Tini
R AWH ITI Tutakamaiwaho TAH AU Ivan TAU R I Caroline TE K AE WA Tuturu TE K AP UA Maro TE M ATAR IN A Takihi TE P UAN GA Tomara TO H U TO H U
Te Horiwai
TU H IN GAROTO Marewaiterangi
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Lake Taupō Forest Trust
Annual Report 2019
Charitable Trust The Lake Taupō Charitable Trust (LTCT) continues to meet its primary objectives in delivering benefits to Lake Taupō Forest Trust owners and their descendants. We have distributed approximately 1,000 Kaumātua grants, and He Māhuri Toa programme has given tamariki and rangatahi the opportunity to visit organisations around the country to gain knowledge and new experiences. Highlights of our work include: • partnering with Scion Research on the Curious Minds project, also known as Tāne’s Tamariki Science Programme; • implementation of He Āwhina Trade Training Programme (Level 2 and Level 3); • successful completion of the inaugural He Pūtea Mātauranga Scholarship Three-year Programme; • implementation of Ngā Karahipi Uru Rākau Training Programme (Level 4).
TĀNE’S TAMARIKI SCIENCE HOLIDAY PROGRAMME Tāne’s Tamariki ‘Ngā Tamariki o Te Waonui a Tāne’ Science Holiday Programme is delivered in a partnership between the Lake Taupō Charitable Trust and Scion Research with support received from the Ministry of Business, Innovation and Employment. The programme is aimed at tamariki of Te Arawa and Ngāti Tūwharetoa descent aged 9–16 years, and it focuses on science, technology, engineering and mathematics education.
April 2019
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The 2019 programme commenced in April with a two-day schedule for 50 eligible tamariki, parent support and partnership representatives. The two days included a site tour of the Tongariro National Trout Centre, a visit to Otukou Marae to complete a tuna restoration workshop and a site tour of the Wairakei and Te Mihi power station sites and steam fields.
Lake TaupĹ? Forest Trust Annual Report 2019
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Lake Taupō Forest Trust
Annual Report 2019
that every one of us has the potential to succeed if we put our minds to it. They spoke about starting from an idea and having the right attitude and mindset to turn an idea into reality. We could relate to them as Māori.’
TAURANGA PORT VISIT On Friday, 16 August, students from Tongariro School visited the Port of Tauranga. After the health and safety briefing, they were given a guided tour of the port. Students saw the way ships come into and out of the port using tugboats and saw a variety of goods being loaded and unloaded, including animal feed, logs and containers. The tour gave everyone a good idea of how the port functions and the many different jobs and roles involved.
July 2019 In July, 60 tamariki aged 9–16 years from Tūrangi, Taupō and Taumarunui attended a three-day holiday programme in Rotorua facilitated by Scion. The visit involved trips to Scion research company, Redwoods Forest and Te Rangihakahaka Centre for Science and Technology, and we stayed at Te Pākira Marae in Whakarewarewa. The trip was thoroughly enjoyed by all (adults included), and most would love to come back and attend our October programme.
MATARIKI X EXPO On Friday, 26 July, students from Tongariro school headed to Rotorua to be a part of Matariki X, which offered Māori innovators and entrepreneurs the chance to connect with others, share new ideas and learn how to better manage and grow their businesses.
‘We could relate to them as Māori.’
— MATARIKI X EXPO
One attendee said: ‘The speakers were friendly, well organised and what they had to say made us realise
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UNIVERSITY OF C A N T E R B U RY, S C H O O L OF FORESTRY VISIT Two of our senior school students visited the University of Canterbury in Christchurch to explore the university, and especially the School of Forestry. A highlight was meeting their Tūwharetoa whānau and finding out what they were studying and how they found life at the university. Both students are keen to pursue a forestry degree through the university and are planning to enrol in a forestry course in 2020.
ACKNOWLEDGEMENTS The Trustees acknowledge the ongoing commitment from LTCT kaitiaki Te Kanawa Pitiroi and Hemi Biddle and their valued contribution. Also, we acknowledge David Flight who will be formally retiring as a Trustee at the end of this year. David has provided invaluable support and service to the Trust in helping to deliver He Māhuri Toa Forest Management Programme. More information about the mahi of the Lake Taupō Charitable Trust can be found on their website www.ltct.co.nz.
ANGELA GRANT
Bachelor of Laws
ASJAH DOCTOR
Bachelor of Engineering
BLAKE JENSEN
Lake Taupō Forest Trust
Bachelor of Business
Annual Report 2019
AISHA SHORT
Bachelor of Applied Information Technology
CANDACE TE RANGI
Bachelor of Business
CHARNELLE WESTON
NZ Diploma in Business
DANIEL MARTIN
NZ Diploma in Digital Media and Design
DEANA WILSON
Bachelor of Science
DELISE PUHI
Postgraduate Diploma in Environmental Management
DENISE DOCTOR
Bachelor of Applied Management
DUSKY-ROSE TAWHAI GEORGIA GRACE
Bachelor of Laws
Bachelor of Science – Environmental Science
HINE-A-RANGI JONES
Bachelor of Engineering Honours
HUIARAU STEWART INDIGO PHILLIPS ISAIAH SIO
Master in Business Administration Bachelor of Information Technology
NZ Certificate in Forest Harvesting Operations Level 3
JAEDYN HAHIPENE
Bachelor of Commerce
Tertiary Education Grants JESSICA WIPERI JOELLA TAHI
Graduate Diploma in Chartered Accounting Bachelor of Business
JONAH ANDERSON
National Certificate in Engineering Level 4
KAHUMOERANGI TE KANI KATARINA SCOTT
Bachelor of Laws
KERIRA TAPENE LEAH VOLAU
Bachelor of Science
Bachelor of Commerce Bachelor of Laws
MAHINAARANGI MARRINER MAXIMUS DUNSTER
Bachelor of Science – Environmental Science
NZ Certificate in Heavy Automotive Engineering
NATALIE NGAMOTU-HEALEY
Bachelor of Laws
NUMIA KOREWHA
Bachelor of Accounting
OLIVIA WALDRON
Bachelor of Commerce
PARIS HEREMAIA
Bachelor of Criminal Justice (Law)
PUNA MANIAPOTO-LOVE RENEE REYNOLD
Bachelor of Laws and Arts
New Zealand Diploma in Forest Management
SAMUEL BOYLE
Bachelor of Commerce
SHAUN MCNEIL
Bachelor of Science
STEVEE RIHIA
Graduate Diploma in Sustainable Management
TAITAUI KEREOPA
NZ Certificate in Forest Harvesting Operations Level 3
TE HERENGA TAHERE-WILLIAMS TE PUAWAI WILSON-LEAHY TOM TAIAROA
Bachelor of Science
Bachelor of Laws and Arts
Bachelor of Commerce
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Lake Taupō Forest Trust
Annual Report 2019
He Pūtea Mātauranga 16+ Years He Pūtea Mātauranga advocates a direct commitment to forestry that requires investment in a high-level forest management qualification.
TERTIARY EDUCATION SCHOLARSHIPS 2 0 1 8–1 9 R E C I P I E N T S :
MARIA BABBINGTON
MATIU WIKAIRA
New Zealand Diploma in Forest Management
Bachelor of Forest Management
(Toi Ohomai Institute of Technology)
REIHANA FISHER Bachelor of Forest Management Hons (University of Canterbury)
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(University of Canterbury)
Forestry Highlights
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$14,573,000
Stumpage share of income
22,141 ha
Trust wholly owned planted area
2,872
Permits issued during the year
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Lake Taupō Forest Trust
Annual Report 2019
Forestry Report SECOND ROTATION CROP INCREASES BY 880 HECTARES The Lake Taupō Forest Trust controls an area of 33,733 hectares, including 30,804 hectares (93 per cent) originally leased to the Crown for forestry and a further 2,929 hectares of land that were never part of the Crown lease. The land comprises 68 Māori land blocks and 15 blocks owned freehold by the Trust. Of this area, 24,465 hectares (72 per cent) is afforested. The high proportion of unplanted area (28 per cent) reflects the conservation and environmental protection objectives of both the Trust and the Crown at the time of the original lease (1969). Further information on the Trust and its lands can be found at www.ltft.co.nz.
now owns 22,141 hectares of plantation, comprising 20,319 hectares of ex-lease (second rotation) forest and 1,822 hectares planted on its other blocks. Around 98 per cent of the forest is planted in Pinus radiata, and the remaining 2 per cent is mainly Douglas fir, eucalyptus, cypress and larch. Planting commenced in 1969 and was completed by the late-1980s. Harvesting commenced in 1994, and the harvested areas are being replanted each year, thus creating the second rotation crop.
STEADY PROGRESS TOWARDS CROWN EXIT IN 2021 This section provides a progress report on the 21-year programme under which the Crown is scheduled to exit its involvement in Lake Taupō Forest, initiated in 2000 when the two parties agreed to vary the lease. The process of the Crown surrendering land as the trees are harvested, leading towards their exit at the end of the first rotation, is progressing smoothly and is on track. September 2018 saw the eighteenth annual surrender of land from the Crown lease. The 2018 surrender enabled the planting of 880 hectares last winter and brings the Trust’s area of ex-lease land to 20,319 hectares (planted area), which is 91 per cent of the total planted area of the original lease forest. Together with the other Trust-owned forest areas (Te Rangiita Blocks, Te Whenua Block, Te Whakao 1, 2 and 3 blocks, the Waiotaka blocks and the Mangakoura blocks), the Trust now has a total planted area of 22,141 hectares.
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In 2000, the Crown and Trust agreed to change the terms of the lease from a 70-year, two-rotation arrangement to a one-rotation lease. As a result, leased land is now returned to the Trust following the harvest of the first rotation crop. Through this process, the Trust
In accepting the lease variation in 2000, the Trustees first needed to be confident that their 35 per cent share of stumpage would be enough to pay for the replanting and management of the second rotation, and also to pay annual distributions, even if the worst case scenario eventuated. The worst
FIGURE 2
Lake Taupō Forest - Areas by Age Class JUNE 2019
1600
Lake Taupō Forest Trust
Annual Report 2019
KEY FIGURES
1400 1200
A r e a ( h a)
1000 800 600 400 200 0 1
3
5
7
9
11
13 15 17 19 21 Stand Age at June 2019
TRUST-OWNED STANDS
23
25
27
29
31
33
35
37
CROWN-OWNED STANDS
FIGURE 3
Early Crown Exit Forecast Stumpage vs Actual Stumpage
Trust Stumpage Income ($ million)
18 16 14 12 10 8 6 4 2 0 2000
2002 BASE CASE
2004
2006
2008
2010
2012
WORST CASE SCENARIO
case scenario is a forecast of the lowest income the Trust could reasonably expect to receive if conditions such as log prices, fire and wind damage, disease and costs all conspired to reduce Trust profits. The outcome was agreement that the process was affordable provided enough funds were invested off-forest to cover any difficult times. A forestry reserve fund was set up with Lake Taupō Funds (now Taupō Moana Group) for this purpose. It is now 19 years since the Trust started to take over forest ownership. Over the first decade of this period, log markets fluctuated from being considerably higher than budgeted to being worse than at any time in recent decades. As is discussed later, markets gradually recovered, and the last five years
2014
2016
2018
2020
ACTUAL STUMPAGE
have seen strong returns from our log sales. As a result, the Trust’s stumpage has in recent years been above the base case level projected in 2000. We can expect returns to continue to fluctuate, but we remain satisfied that the base case figures are reasonable longer-term expectations. In addition, the Trust has invested in several new forest opportunities over the last six years – planting on Waiotaka and Mangakoura Farm Trust lands at the southern end of the forest, and, in joint venture with the Lake Rotoaira Forest Trust, on Opepe Farm Trust lands, on Hautū Rangipō Whenua lands (ex-Corrections lands) and now the three forests of Taurewa, Waituhi and Pureora South, which were purchased from the Tūwharetoa Settlement Trust. Typical of
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Lake Taupō Forest Trust
Annual Report 2019
forestry investments, these will take 25–30 years before generating income. Despite this, the Trust is confident it can afford these business streams and that they will ensure a very positive financial outlook for the owners in the future. When the Trustees met with owners in late 2014 to discuss the purchase of the Hautū Rangipō lands, it was explained that even after investing in these lands, the Trust was budgeting on being able to afford ongoing annual distributions of at least $3 million through to the end of the Crown lease term (2021). The Trustees were very pleased to increase this to $5 million for the 2018–19 year on the strength of our record high stumpage income. To ensure its forest resumption plans remain affordable regardless of annual fluctuations, the Trust has built up a forestry reserve fund. The fund is designed so that the Trust can cope with income persisting at the worst case scenario level shown in Figure 3. The amount required in the fund has been re-calibrated given the purchase of the Hautū Rangipō lands and the forecast costs of the Trust’s new planting and replanting on these lands.
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With only two years to go until the Crown lease finishes, we calculated we needed a minimum of around $6.4 million in the reserve fund at the end of the 2018–19 year. Strong log markets in the last four years in particular have helped the Trust’s cash flow, and despite ongoing contributions to the other forest investments referred to above, the balance in the forestry reserve fund increased to $13.2 million at year end. There are two years to go until the Crown departs, and we cannot guarantee log prices will remain as strong over that period as they have in recent years. As we have very limited ability to increase income, we need to ensure efficiency in all expenditure, and all areas – forestry expenditure, Trust overhead costs and distributions – continue to receive close attention in this regard. However, after taking into account all strands of its income and expenditure, the Trust remains confident that it can afford to continue replanting and managing Lake Taupō Forest, continue its investments in the Opepe Forest, Kaimanawa Forest (the forest being created on the Hautū Rangipō lands), and Taurewa, Waituhi and Pureora South
Lake Taupō Forest Trust
Annual Report 2019
less productive sites as the slower tree growth reduces the return on the pruning investment. Similarly, the stands on some sites have a history of wind damage, which is influenced by their specific geography. We can reasonably expect more such wind events over time, so we generally do not invest in pruning these areas. Instead, these sites are managed on a framing (non-pruning) regime. In addition to the straight financial analysis of whether to prune, we are acutely aware of the social implications of reducing this work, knowing that most of the people working in the pruning crews are our owners. We are also aware that these same crews undertake our planting work in the winter months. If we significantly reduced our pruning programme, we would need to find workers for three months to do the planting, which we know would be challenging. Forests, as well as continuing to declare annual distributions to owners of at least $3 million per annum.
MANAGING THE SECOND ROTATION FOREST The Trust’s forest is managed under contract by NZ Forest Managers Ltd, whose work is audited on behalf of the Trust by Lake Taupō Forest Management Ltd. The establishment and management of the second rotation crop is progressing well, and early signs are that this crop will produce considerably higher volumes than the first. This is largely due to the improved quality of planting stock used and also due to advances in forest management learnt by the industry over the last 30 years. Around 70 per cent of the second rotation crop is managed under a clearwood (pruning) regime, entailing two pruning operations, typically between ages five and nine years. We continue to analyse what level of pruning investment is right for us. Several of the larger forest growers in the central North Island region have stopped pruning altogether, but we do not think this is appropriate for our forest. Pruning profitability is also influenced by the growth rates, and we tend not to prune the
KEY FIGURES
33,733 ha
Lake Taupō Forest Trust controls an area of 33,733 hectares, 93 per cent originally leased to the Crown.
28%
The proportion of unplanted area reflects the environmental protection objectives of both the Trust and the Crown.
22,141 ha
Lake Taupō Forest Trust now owns 22,141 hectares of plantation.
$14,573,000 Share of stumpage income in 2019
25
Lake Taupō Forest Trust
Annual Report 2019
The Trust spent $6 million on developing and managing its forests during the year, which was slightly more than the average for the last three years. Areas treated in the 2018–19 year are shown in Figure 4. Note that the planting areas do not match the full 2018 winter planted area of 880 hectares as the planting season typically crosses the financial year-end. The Trust continues to have a good relationship with its forest managers, NZ Forest Managers Ltd. This company has a strong and stable workforce, and it frequently goes beyond the terms of its contract with the Trust to ensure that our interests are recognised, including protecting the health and safety of both the workforce and the recreational land users and lobbying on such things as regional and district plans. NZ Forest Managers’ respect for and strict operational practices around wāhi tapu also give confidence to the Trustees. Many of their staff have a long history of working in the forest, which proves very useful in both bigger picture matters and in specific issues that require institutional memory.
HARVEST UPDATE The logs harvested in Lake Taupō Forest come from the Crown lease parts of the forest. The Trust’s own trees will not be ready for harvesting until late 2021. NZ Forest Managers are responsible for the sales and marketing of the harvested logs. Log sales in the year to June 2019 totalled 527,406 m3, which was right on budget. As we approach the end of the Crown lease, the requirement for the Crown to complete harvesting all its trees by 2021 is starting to dictate the annual harvest, and it appears there is slightly more volume available than previously estimated, which is good news for both the Crown and the Trust. Harvesting was generally concentrated in the northern portion of the forest.
26
The total stumpage income for Lake Taupō Forest in 2018–19 was $41.5 million. As prescribed in the lease, Lake Taupō Forest Trust received a 35 per cent share of this income and thus received $14.6 million. This was a high return for the Trust and was second only to the previous year’s $16 million. We do not expect our returns will be as high over the remaining two years of the Crown
lease; indeed, the market softened in July– September 2019, and we have budgeted to receive $10.6 million in stumpage income in 2019–20. Our 2018–19 stumpage income can be calculated as follows: Gross log income Less: Harvesting costs Transport costs Export costs Temporary access roads Net stumpage income Trust’s 35% stumpage share
$/m3 137.05
$ Million 72.28
25.46 24.23 7.60 0.97 78.78 25.98
13.43 12.78 4.01 0.51 41.55 14.57
Harvesting in Lake Taupō and Lake Rotoaira forests is done by a contingent of seven harvesting gangs, five of which are run by owners in the forest. The actual work is contracted out by NZ Forest Managers, who, in turn, are contracted by the Crown to harvest their (first rotation) trees. The Trusts have no direct role in the harvesting of the first rotation crop, but they are nevertheless keen to have owner-contractors involved as much as possible, providing they are up to standard. Harvesting work is steadily becoming more mechanised, improving both productivity and health and safety. Today, most trees are felled by machine rather than with a chainsaw, and much of the log-making (cutting the full stems into individual log grades for sale) is also done this way.
ANOTHER STRONG YEAR IN LOG MARKETS The 2018–19 year saw a variety of influences on the returns we received from the logs we sold. Ultimately, the net returns of around $79/m3 were very high by historic standards. Again, it has been China that has dominated the market demand for New Zealand radiata. Around half of all logs harvested in New Zealand are exported in log form to China. While the Trust does not sell any logs into China, the prices paid by Chinese customers largely dictated the prices paid in other markets – including the domestic New Zealand market – for most unpruned log grades (which comprise around 65 per cent of our logs).
FIGURE 4
Lake Taupō Forest – Areas Treated 2 0 1 8 –1 9
Planting
First Prune
Second Prune
Third Prune
Thinning
920 HA
1,063 HA
887 HA
30 HA
930 HA
508 HA WINTER 2018
Lake Taupō Forest Trust
Annual Report 2019
KEY FIGURES
412 HA
WINTER 2019
FIGURE 5
Lake Taupō Forest Trust – Stumpage Income 30 JUNE 2019
18 16 14
$ Million
12 10 8 6 4 2 0
2001
2003
2005
2007
2009
China’s demand for wood was strong throughout the year. Returns were further assisted by the relatively low New Zealand dollar against the United States dollar, which averaged around $0.67 for the year. As export sales are traded in United States dollars, this was a positive impact on the returns we received. When coupled with fairly low ocean freight rates (although they did increase a bit over the year), everything aligned well for forest owners to produce the high returns. While some of the radiata exported to China and New Zealand’s other main export markets of Korea, India and Japan is remanufactured and then re-exported, much is used domestically in generally lowend uses such as concrete boxing, pallets and packaging. New Zealand’s total wood processing capacity is only sufficient to absorb around half of the current total harvest, so these export markets are vital for our industry. While the Trust would like to see
2011
2013
2015
2017
2019
more domestic processing, at present the export markets are providing the best returns for much of New Zealand’s wood and are helping maintain strong domestic prices. South Korea is a steady purchaser of New Zealand logs, though not at the high volumes of a decade ago. We sell wood into Korea KEY FIGURES
$6,000,000 The Trust spend on developing and managing its forests
527,406 m3
Log sales in the year to June 2019 – which was right on target
27
Lake Taupō Forest Trust
Annual Report 2019
through DK Korea, their largest importer, with whom we have been trading for over 20 years. Japan also continues to be a steady buyer of New Zealand radiata logs, and we have a long and strong relationship with the country’s largest radiata buyer, Orvis. India has also increased its demand for radiata logs over the last few years and is currently the third largest buyer of New Zealand’s logs. However, demand from India can be fickle, with the buyers very much driven by price rather than quality. We have been selling logs into India for eight years now, in a joint arrangement with the large forest owner Rayonier Matariki, and this is working well. Most logs from Lake Taupō Forest are sold in New Zealand, and prices paid by our domestic customers (mainly sawmills and pulp mills) were also high by historic standards. Figure 6 shows the average price received for all Lake Taupō Forest log sales (domestic and export) since 2002, with the 2018–19 year shown in the white band. While log exports generally comprise around 35 per cent of the annual sales from Lake
KEY FIGURES FIGURE 6
Average Mill Door Log Price J U LY 2 0 0 2 – J U LY 2 0 1 9
140
130
120
$/m³
110 100
90
80 70
60
28
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
Log prices in the first few months of the 2019–20 financial year have fallen by around $25/m3 on average. The trade dispute between China and the United States started to create uncertainty in the market from early 2019, but prices did not start falling until July (in the 2019–20 year). At the time of writing this report (late October), export prices have recovered somewhat, and while they are still below the levels of the last few years, we are cautiously optimistic that the year will end up producing reasonable returns. Domestic sawmillers have understandably welcomed the price fall, having struggled a bit with the previously record high prices. Our own production costs are another key factor influencing our returns. Harvesting the northern parts of Lake Taupō Forest presents a mixture of easy and steep terrain, while the old age of the stands being harvested (an average of around 33 years) is resulting in large trees that are relatively efficient to harvest. Overall production costs have been flat for six years now. This has been assisted by increased mechanisation and a shorter cart distance to most of our markets compared with areas in the middle or southern end of the forest. The recent fall in market prices means that the 2019–20 stumpage income is predicted to be a bit lower than that achieved in the previous three years.
Lake Taupō Forest Trust
However, despite a total of 59 per cent of logs being sold domestically, the prices we receive are largely determined by international market factors. This reflects the fact that logs are an international commodity, and although some distance away from our main competitors, we are certainly not operating in isolation from their influence. Furthermore, most of the product sold to New Zealand sawmills will eventually end up being exported in one form or another, so it must also compete on the international market.
Wood from Lake Taupō Forest must also compete with other growers in the central North Island region. While we have no concerns about competing on quality – indeed our wood has a very good reputation in this regard – the sheer volume of wood in the region makes competition strong. Over the last few decades, the region’s increase in annual harvest volume has been larger than its increase in wood processing capacity, which has led to increased log exports.
Annual Report 2019
Taupō Forest, the softening of the domestic market and closure of some mills in recent years meant that there was little option but to increase exports. In 2018–19, a total of 37 per cent of the logs harvested from Lake Taupō Forest were exported directly, and a further 4 per cent were sold to New Zealand agents who then exported the logs.
The Trust is continually trying to encourage new players to enter the processing industry in this region. While there have not been any new mills built recently, we are aware of a few proposals being considered, and there have also been a few significant upgrades that have got underway or been completed, including the Red Stag Mill in Rotorua and Carter Holt Harvey in Kawerau. Like the other major forest owners, we like to maintain some tension between the export and domestic markets as we see this as the KEY FIGURES
$79/m
3
Net returns from the logs sold in 2018–19. Ultimately the net returns – around $79/m3, were very high by historic standards.
59%
Logs harvested sold into domestic markets
$249.9 million
Value of the Trust’s wholly owned forest as at 30 June 2019
28%
Increase in value from 30 June 2018 ($51.9 million)
29
Lake TaupĹ? Forest Trust
Annual Report 2019
best way to maximise returns for our logs. If either market dominated too heavily then forest growers such as the Trust would be in a weak position when negotiating log sales prices.
30
The significant drop in harvest in many Asian countries coupled with the steady increase in wealth (and wood consumption) of those countries are very positive signals for our future markets. The responsible and sustainable management of forests such as Lake TaupĹ? Forest is gradually beginning to be recognised as an important factor in the marketability of our produce, with more and more buyers demanding Forest Stewardship Council (FSC) certified wood. Similarly, there is a gradual recognition of the environmentally friendly characteristics of wood as a building material compared with most alternatives, such as concrete and steel. This is leading to increased interest in building multi-storey buildings from wood, mainly using engineered wood products such as cross-laminated timber. These are all very positive signals for the forest industry, albeit they are medium- to long-term trend outlooks and unlikely to lead to dramatic increases in prices in the short term.
Of course, not all signs are positive. The competition from plantations in South America will continue to influence our markets, particularly in North America. Gradual increases in all sorts of regulation in New Zealand impact on our costs, as will oil prices, which have risen over the last few months. Log exports from New Zealand are facing increasing regulatory challenges, particularly around the chemicals commonly used to fumigate logs to kill any insects they may harbour. At the same time, international shipping regulations are changing to require the use of low-sulphur fuels, which is great for the globe but will add possibly around $6/m3 to average shipping costs. Climate change introduces more uncertainty. Increased temperatures and more frequent rainfall may actually improve our growth rates in the central North Island, but countering this would be the potential negative impacts of more storms and higher fire risk. As always, the business of forestry remains somewhat an act of faith and one that requires a long-term outlook. Land needs to be committed and money spent around 30 years before the time of sale. It is impossible
The Trust is required to assess the value of its forest each year. This year’s valuation was again undertaken by Indufor Asia Pacific Ltd, an international forest consulting company with an office in Auckland. The valuation modelled the long-term management and harvesting plans to determine future cash flows and extracted from that the current value of the Trust’s share of the Crown lease forest and the value of the Trust’s wholly owned forest. These forest values are required for accounting purposes only (book values); more important to the Trust’s business is the annual cash flow, which mainly depends on the state of the log markets during any given year. The valuation represents the amount an independent buyer would pay to purchase our forests – not a situation that we envisage happening. The valuation methodology for the forest remained the same as in the previous year, including the application of an 8.0 per cent discount rate on the forecast pre-tax cash flows. The Trust’s wholly owned forest, with a total planted area of 22,141 hectares, was valued at $249.9 million at 30 June 2019. This was a $51.9 million (28 per cent) increase on the value at June 2018. The rise in value was partly due to the area increasing by 880 hectares, being the area replanted during the winter of 2018. The rest of the forest grew one year older and one year closer to harvest, and this also increases its value. The considerable sum spent on the forest this year also contributed to its higher value, as did the recent high log prices, which led the valuer to increase its forecast of the prices we will realise when we harvest. The value of the Trust’s share of the remaining Crown lease forest at 30 June 2019 was
Lake Taupō Forest Trust
FOREST VALUATION
$24.3 million, which was $12.1 million (33 per cent) lower than at 30 June 2018. We generally can expect this value to decrease each year as the remaining lease forest is steadily harvested through to 2021, and there is less forest to be valued each year.
Annual Report 2019
to predict accurately how markets will look at such a time. The Trustees continue to look closely at the current situation and appraise future signals. We remain confident that the long-term outlook for forestry is positive and that plantations are the best use for most of the Trust lands. Overall, plantation forestry as practised by Lake Taupō Forest Trust is a safe and steady investment that will produce good returns for its owners.
The combined value of the Trust’s forest assets at 30 June 2019 is $274.2 million, which is up $39.8 million (18 per cent) on the previous year. This value excludes the value of the land on which the trees are growing.
RECREATIONAL USE OF TRUST LANDS A total of 2,872 permits were issued to owners or descendants of owners during the 2018–19 year, which was a decrease on last year. This is related to the change introduced in December 2017 from two-week permits to two-month permits. Despite this change, the number of permits is still considerably higher than in the years before 2017. This is a consequence of the new access policy and gates being placed at key access points to parts of the forest, which is discussed further below. Owner access permits to Lake Taupō Forest lands were obtained by 809 individuals during the year, which is an almost 50 per cent increase on numbers in recent years. This too reflects the new access arrangements. While half of these people obtained only one, two or three permits during the year, 186 people received six or more permits. The Trustees are pleased to see that access onto the lands continues to be important to so many owners and that strong connections with the whenua are being maintained. Hunting continues to be the most common activity for which owners request permits, with pig and deer hunting being the primary reason for around 95 per cent of last year’s permits (Figure 7). While collection of firewood is given as the main reason of access for less than 10 per cent of those seeking permits, we know that it is far more important than this implies. Owners are reminded that firewood may only be taken from the forest’s designated firewood yard, which is located at the corner of Kiko and Waimarino roads. The Trust has also been delivering firewood logs to a number
31
Lake Taupō Forest Trust
Annual Report 2019
KEY FIGURES FIGURE 7
Trends in Recreational Permits Issued 2 0 0 4–2 0 1 9
3,500
3,000
No. Permits Issued
2,500
2,000
1,500
1,000
500
0 2004
2005
2006
PIG HUNTING
32
2007
2008
2009
DEER HUNTING
2010
2011
2012
ACCESS
2013
2014
FIREWOOD
2015
2016 OTHER
2017
2018
2019
From 1 December 2017, the Lake Taupō and Lake Rotoaira forest trusts changed the times that owners could access their lands to after 4 p.m. on weekdays and normal times (daylight hours) on weekends and public holidays. Permit holders must leave the forest by 11 p.m. in summer and 7 p.m. in winter. As was discussed in previous annual reports, the new Health and Safety Act led the Trusts to take legal advice on our operations in general, including our recreational policies. The advice has made it clear that our current rules are very open compared with other forests throughout the country and that allowing owners to access the lands at the same time our workers are operating is putting both our workers and our owners at risk. While the Trustees do want to make it as easy as possible for our owners to access their lands, they are also very aware of their obligation to protect everyone who goes onto the lands, be it for work or recreation. The previous rules, which allowed recreational access in daylight hours seven days a week, were not achieving this. We typically have around 200 people working in our forests on any day. While many are highly visible, such as harvesting gangs, there are others who are less so, such as pruning gangs and people measuring the forest for various factors. In addition, there is the heavy use of our forest roads by around 100 logging trucks a day on average, plus the vehicles used by the forest workers, the forest managers, the many entities who support the harvesting crews and the third parties who have access rights, such as power companies and the Department of Conservation. We have had many incidents, such as near misses between recreational users and logging trucks, recreational users driving through the middle of harvesting operational areas and hunters firing guns close to silvicultural workers. Thankfully, there have not been any serious accidents to date, but that is through luck. Unless access was
Owners are reminded that while most workers will be out of the forest by 4 p.m. on weekdays, there may be workers and logging trucks still in the forest, so owners must still be cautious. Similarly, there may be some work happening on weekends, though at a much lower level than on weekdays, and signs will be put out to advise of such work.
Lake Taupō Forest Trust
ACCESS HOURS
restricted, it would only be a matter of time before something unfortunate happened.
Annual Report 2019
of marae in the area, and some owners may prefer to get their firewood from these.
The Trustees are very aware that some owners are disappointed at having their access hours restricted, and we continue to explore ways to enable our owners to have more hours of access. However, we are getting lots of positive feedback about how the new access rules are working. The workers in our forest are feeling much safer, and owners are reporting far fewer incidents of non-owners accessing the lands. You are reminded that those eligible for permits are owners, their descendants and spouses of owners. To obtain a permit, a person must first register with the Trust office and provide various details to determine eligibility for access. Once that has been done, permits can be obtained at any time from the Trust office, our forest manager’s office (NZ Forest Managers Ltd – Atirau Road, Tūrangi) or the Tūwharetoa Māori Trust Board office (81 Horomatangi Street, Taupō). Electronic fob keys are available at the NZ Forest Managers’ and Tūwharetoa Māori Trust Board offices only. If you are getting a fob for the very first time, you will need to go to the NZ Forest Managers’ office so you can be appropriately registered onto the fob system.
ENVIRONMENTAL PROTECTION While the Trust is responsible for significant commercial forestry activities on our lands, there is also a strong recognition of the need to protect and enhance the taonga tuku iho, and the Trust Order and the Crown lease also emphasise these imperatives. The Trustees want to ensure that the land and everything on it, including those who work and play on it, are managed in a sustainable way consistent with the principles of kaitiakitanga. Like much of the country, our land and forests are
33
Lake Taupō Forest Trust
Annual Report 2019
impacted on by pests, particularly possums, stoats and rats and invasive weed species. The Trust is working to reduce the damage caused by these, and some of the initiatives are outlined below. Lake Taupō and Lake Rotoaira forests received FSC certification in 2002. This is a voluntary initiative under which independent auditors assess our forests and their management against a set of environmental, economic, social and cultural criteria. As well as providing independent confirmation that our forest and lands are being managed in a sustainable manner, FSC certification is increasingly being requested in the markets where wood products made from our logs are ultimately sold, particularly in the United States and Europe. FSC certified wood is increasingly being demanded in Asia also, generally because it will be used to make products that are then re-exported to the United States and Europe. Several initiatives are being undertaken to better understand our environment, and information on our forest and associated ecosystems is steadily building. Together, these all help to ascertain and confirm the sustainability of our land, forest and ecosystem management. Many of these initiatives started prior to FSC certification, and many are also simply part of the dayto-day management of the forest, and it is thus difficult to be definitive on whether the work is specifically a result of our being FSC certified. Work over the last year has included the following initiatives.
Water Quality Monitoring
34
NZ Forest Managers carries out a regular water quality monitoring programme within Lake Taupō Forest. River monitoring commenced in 1994 for the Waimarino River and a sub-catchment of the Waimarino River and began in 1996 for the Mangakowhitiwhiti Stream (a tributary of the Tauranga Taupō River). The potential impacts of harvesting are determined by measuring suspended sediment, nitrogen and phosphorus concentrations and water clarity at three sites. The monitoring sites cover the native forest catchment only (upstream of plantation forest), the mid-point in the plantation forest,
and where the stream exits the plantation forest. Rainfall and stream flow data are also collected. The most recent results (2018 report) for the water monitoring in Lake Taupō Forest were either within the normal range for the catchment or were similar to the longterm averages. Harvesting and replanting occurred in the three catchments at various times in the 1990s and early 2000s, with more area in the Waimarino catchment harvested in 2017. Total nitrogen concentrations in the water rose around the harvesting period, but within a few years it reduced to pre-harvest levels. In the Waimarino catchment, though, there appear to be other influences on the nitrogen levels as similar trends in these levels were measured upstream in the native forest area. Suspended sediment levels are generally low in all sites (though, as expected, they rise at times of high flow or in flood events), while phosphorus levels are within the normal range for all three catchments.
NZ Forest Managers Annual Workforce Survey The NZ Forest Managers workforce survey is completed annually by the workforce in Lake Taupō and Rotoaira forests. Data is collected on a number of topics and various trends are analysed, such as local employment rates, crew turnover rates, the number of dependants supported from the forest, other uses of the forest, training courses completed and qualifications held. The 2018 survey returns showed trends similar to those in recent years. In most categories, the Trust is happy with the outcome, such as the proportion of Māori workers and the number of Tūwharetoa workers and owners, though we are always keen to get an even greater proportion of our own people working in the forests.
Frost Flat Indigenous Vegetation Habitat The Lake Taupō Forest frost flat habitat assessment was completed at the end of 2018. The assessment showed that the frost flat areas in the forest are in relatively good health and condition. These areas are
As they meet the FSC definition of high conservation value (HCV) forest due to their
Lake Taupō Forest Trust
The assessment report included conservation management recommendations and prioritisations, which have been used to guide the development of a habitat management plan. The management plan includes an annual survey of the frost flat areas as well as plant pest control. NZ Forest Managers are also exploring whether additional funding to manage this habitat can be obtained from outside entities.
regional significance, the frost flat habitats in Lake Taupō Forest have been included as an HCV forest in the FSC certificate.
Annual Report 2019
significant in both the Taupō district and the Waikato region. This is primarily due to the clearance of much of the frost flat vegetation in and around Taupō historically.
Waimarino River Whio Protection Project This project began during winter 2014, but it is also informed by a survey of the habitat done in 2011–12. The project is managed by ecologist Nicholas Singers on behalf of the Lake Taupō Forest Trust, Crown Forestry and NZ Forest Managers. The project is additionally supported by funding grants from the Central North Island Blue Duck Charitable Trust, Waikato Catchment Ecological Enhancement Fund and Waikato Regional Council’s Environmental Initiatives fund.
Workforce Survey Key Statistics 2018
206 70% Number of workers surveyed
Percentage of Māori in workforce
30% 37% Workers with beneficial ownership rights
35%
Workers who have been with their employer >10 years
296
Number of children/ dependants supported by the workforce
Workers who affiliate with Ngāti Tūwharetoa
19% 14% 21–25 years
Most common age bracket
Number of respondents aged over 50 years
42%
Workers with >20 years’ experience in the forest industry
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Lake Taupō Forest Trust
Annual Report 2019
productivity is probably due to stable river Whio or blue duck are an endangered flows during nesting and to successful species with a national population estimated stoat control; at approximately 2,000–3,000 birds and have a threat classification of nationally • Intensive trapping along the river margins vulnerable. A significant cause of this status is has resulted in a significant decrease in introduced predators. predator populations over the project term. From over 900 pests being caught The primary objective of the project is to in the first year of the project (mainly rats restore whio to the lower Waimarino River but also stoats, weasels, hedgehogs, mice within Lake Taupō Forest, mainly through and possums), around 330 pests were predator trapping and by release of juvenile caught last season. This has clearly had ducks. Several Lake Taupō Forest Trustees had an influence on the whio population on witnessed the local extinction of whio from the Waimarino River; the lower reaches of the Waimarino River and were keen to see them return.
• The population density at 1.7 pairs per kilometre is nearly twice that found on the Tongariro River though it is not quite as high as on the Mangatepopo River. The Waimarino River above the waterfall is now probably close to carrying capacity; • Despite the success of the programme in the upper river, whio pairs have not established below the waterfall, which is the section of the river in Lake Taupō Forest Trust lands. This is despite the release of eight juvenile whio into the lower river in recent years and high fledging productivity upstream. This strongly suggests that the lower river habitat is not preferred by whio.
Findings from the 2018–19 population assessment report include the following: • Since the 2011–12 season, the monitored whio population increased from 19 to 76 whio (including all fledglings), while the number of pairs has doubled from 8 to 16;
36
• Of the 16 pairs, 13 bred this season – the largest number of breeding pairs since monitoring began – resulting in the fledging of 44 ducklings, which is also a record. Many of these offspring will probably populate other rivers in the Kaimanawa Range, including the Tauranga Taupō River. The high
The cause of this is unknown and multiple factors could be involved. Competition for invertebrates by trout is likely to be a significant factor from July to November during the spawn run from Lake Taupō, and it may be driving young male whio who are looking to establish their own territory to simply disperse to a more suitable habitat. This is the final season for the initial five-year project, and we are now assessing whether to continue with it, either in its current form or with some amendments.
2019 FSC Surveillance The annual NZ Forest Managers FSC reassessment took place in early April 2019. The reassessment was very successful though the auditors raised three Corrective Action Requests (CARs). All were minor concerns, mainly relating to administrative tasks, and were straightforward to rectify.
HAUTŪ RANGIPŌ LANDS INVESTMENT It is now four years since the two forest trusts invested in Hautū Rangipō Whenua Ltd (HRWL), the company that purchased the Corrections lands near Tūrangi and the neighbouring Mangamawhitiwhiti Farm. The Lake Taupō Forest Trust has a 42.3 per cent share of HRWL, and the Lake Rotoaira Forest Trust has 18.2 per cent. These two shareholdings are managed through the two Trusts’ subsidiary company, Lake Taupō Forest Management Ltd (LTFM). The other HRWL shareholders are the Tūwharetoa Settlement Trust with 19.7 per cent, and three farm trusts, Waihī Pukawa, Puketapu 3A and Oraukura 3 with 6.6 per cent each. The purchase secured the lands back into Tūwharetoa ownership, and this was a key consideration for all the investors.
Lake Taupō Forest Trust
Annual Report 2019
As mentioned, many of the environmental initiatives are managed by NZ Forest Managers, and a large part of the certification workload also falls on them. Their website (http://www.nzfm.co.nz) outlines all NZ Forest Managers’ operations and is useful to check progress on our FSC initiatives.
In addition, the purchase will, in time, increase the scale and efficiency of the Trusts’ forestry businesses, and it also opens up the ability to take advantage of other synergies between the two Trusts. HRWL continues to operate successfully, adhering to the general approach of being a passive landowner that leases the lands out to other users. Of the total approximately 9,000 hectare estate: • 750 hectares, mainly farmland, are under a permanent lease to the Corrections Department, which continues to operate a prison and farm in the northern (Hautū) part of the land; • 3,500 hectares of forested land are leased to forestry investor New Forests, which, through their local off-shoot Taupō Estates Ltd, has a one-rotation lease and will gradually harvest the trees over 30 years; • 900 hectares of farmland is leased to Tuatahi Farming, which is a subsidiary company of Puketapu 3A and Oraukura 3; • 2,000 hectares is leased to Lake Taupō Forest Management, which is planting
37
Lake Taupō Forest Trust
Annual Report 2019
some of the pastureland as part of HRWL’s arrangement to reduce nitrogen emissions and is also replanting land after New Forests completes its harvesting. The remaining lands are non-productive though they do generate income through bee-keeping leases. HRWL is continuing to look at options for the four 60-bed prison units and associated buildings that it has inherited. Most, however, are in a very poor state of repair, and any ongoing use will not only require considerable investment but also require maintaining quite onerous and expensive resource consents for waste-water disposal and power supply. Some are able to be relocated, and in the last year we have started separating and selling old cells from one of the units to members of the local hapū at cost. The Lake Taupō and Lake Rotoaira forest trusts effectively have two components to their investment: KEY FIGURES
$452,000
Lake Taupō Forest Management Ltd received $452,000 in distributions from Hautū Rangipō Whenua Ltd in 2018–19.
$734,000 The Trust’s investment into developing Kaimanawa Forest 2018–19
$4.23 million The Trust’s share of the Opepe Forest valuation 2018–19
38
1,376,000
The Trust has received 1,376,000 carbon credits (known as New Zealand Units or NZUs).
• their combined 60.5 per cent shareholding in HRWL – from which they will get an ongoing share of annual distributions: o Lake Taupō Forest Management received $452,000 in distributions from HRWL in 2018–19. Lake Taupō Forest Trust receives a 70 per cent share of this ($317,000), and Lake Rotoaira Forest Trust receives a 30 per cent share; and • the lease by the Trusts’ subsidiary Lake Taupō Forest Management of land for forestry. The forest that is being created through this process is called Kaimanawa Forest, and it is discussed below. The HRWL Board is still investigating how best to allow for owner access to the forestry and undeveloped parts of the lands. In the meantime, the land has been made available on request from relevant marae to allow teams to go in to hunt for kai for tangihanga.
KAIMANAWA FOREST Kaimanawa Forest is the name given to the forest that Lake Taupō Forest Management, on behalf of its parent entities Lake Taupō Forest Trust and Lake Rotoaira Forest Trust, is creating on the Hautū Rangipō Whenua land. The investment is funded 70 per cent by Lake Taupō Forest Trust and 30 per cent by Lake Rotoaira Forest Trust and is formalised through a Forestry Right Agreement held by Lake Taupō Forest Management. This entity pays an annual rental to HRWL for the use of the land for this forest. Through their ownership of a significant shareholding in HRWL, though, the forest trusts effectively get a good portion of this rent back. At present, Kaimanawa Forest has a planted area of around 1,840 hectares. This comprises around 1,420 hectares of land that was previously in pasture and has now been afforested plus around 420 hectares of forest harvested by previous owner New Forests and since replanted by Lake Taupō Forest Management. The 1,420 hectare planting into pasture programme was completed in the winter of 2018, while the replanting of the existing forest will take around 30 years to complete and will then total around 4,100 hectares. The
The two Trusts invested $1,018,000 (including rent) on developing Kaimanawa Forest in 2018–19. Lake Taupō Forest Trust’s share of these costs was around $734,000. Kaimanawa Forest was valued at $3.41 million at 30 June 2019. Lake Taupō Forest Trust’s 70 per cent share of this value is around $2.39 million.
After discussion with the Tūwharetoa Settlement Trust and with the forest hapū clusters who have mana whenua over the
Lake Taupō Forest Trust
the Tūwharetoa Settlement Trust replanted around 1,700 hectares, following the harvest by the previous owner of the trees.
Annual Report 2019
eventual area of Kaimanawa Forest will be around 5,500 hectares, which adds around 17 per cent to the Trusts’ combined forest area.
FOREST INVESTMENT ON OPEPE FARM TRUST LANDS The joint forestry investment on Opepe Farm Trust lands by the Lake Taupō and Lake Rotoaira forest trusts is progressing well. This investment is funded 70 per cent by Lake Taupō Forest Trust and 30 per cent by Lake Rotoaira Forest Trust, and it is formalised through a Forestry Right Agreement held by Lake Taupō Forest Management. The project began in in 2012 and has involved the forest trusts purchasing 250 hectares of young trees from Opepe Farm Trust. Over the next three years, the project replanted 650 hectares of harvested forest and undertook new planting of around 500 hectares of pasture land. The forest has a total area of around 1,400 hectares. During 2018–19, Lake Taupō Forest Management invested a total of $632,000 in Opepe Forest, mainly on pruning, thinning and rent. Lake Taupō Forest Trust’s share of these costs was around $442,000. Harvesting is scheduled to start in 2038 and should be complete by around 2045. The Opepe Forest was valued at $6.04 million at 30 June 2019. Lake Taupō Forest Trust’s 70 per cent share of this value is around $4.23 million.
INVESTMENT IN TAUREWA, WAITUHI AND PUREORA SOUTH FORESTS It is now one year since the Trusts purchased the second rotation stands in Taurewa, Waituhi and Pureora South Forests. The land under these forests came back in the Central North Island Forests Iwi Collective Deed of Settlement in 2008, and since then
lands, all parties approved the proposal that the forest trusts would purchase the plantations through Lake Taupō Forest Management, which ensured their ownership remained within Tūwharetoa. Lake Taupō Forest Management entered into a one rotation forestry right (effectively a lease) over the lands. We do not control owner access to these lands, and this matter
39
Lake Taupō Forest Trust
Annual Report 2019
continues to be negotiated by the forest hapū clusters and CNI Iwi Holdings Ltd. We pay rent annually to CNI Iwi Holdings Ltd, and this is passed back via the Tūwharetoa Settlement Trust to the forest hapū clusters. A further 1,200 hectares of first rotation crop, owned by an off-shore forestry company, remains across the three forests, and Lake Taupō Forest Management will replant these as and when they are harvested. During 2018–19, Lake Taupō Forest Management invested a total of $336,000 in these three forests, mainly on general maintenance, Dothistroma control, rent and, in Pureora South Forest, land preparation. Lake Taupō Forest Trust’s share of these costs was around $235,000. All the stands in these forests are six years or younger, so harvesting is not scheduled to commence until around 2040. The three Tūwharetoa Settlement Trust Forests were valued at $5.75 million at 30 June 2019. Lake Taupō Forest Trust’s 70 per cent share of this is around $4.03 million.
EMISSIONS TRADING SCHEME The Emissions Trading Scheme (ETS) is the New Zealand Government’s response to global climate change. It is a scheme under which industries that emit greenhouse gases, such as those producing oil and power, and most industries, have to offset their emissions by buying carbon credits. Forests absorb greenhouse gases from the atmosphere and help reduce the impact of climate change. The world wants more forests, which had led the New Zealand Government to introduce rules that ensure forest area is not reduced and encourage more forests to be established. The ETS as it relates to plantation forestry divides plantations into two categories: pre1990 forests and post-1989 forests. Most of Lake Taupō Forest was established before 1990, so it qualifies as pre-1990 forests. The Trust also has 510 hectares of post-1989 forest registered.
40
The ETS locks pre-1990 forest land into forestry by requiring payment of a deforestation tax if the land is not replanted after harvest. As
Lake Taupō Forest Trust
Annual Report 2019
partial compensation, owners of these lands were awarded carbon credits, which they can sell to industries that emit greenhouse gases. The Trust has around 23,700 hectares of pre1990 forest registered under the ETS, and in return, the Trust has received 1,376,000 carbon credits (known as New Zealand Units or NZUs). The Trust registered around 600 hectares of post-1989 forest, being the forests planted in the mid-1990s on what were Te Rangiita farm blocks. The Trust then claimed 106,000 NZUs for the carbon stored in these trees as they grew during the years of the first commitment period of 2008–2012. We freed-up those units by taking the forest out of the ETS then re-registering it, meaning Lake Taupō Forest Trust had around 1.5 million NZUs. After some in-depth strategising on what we should do with these NZUs, including getting advice from a number of experts in the field, the Trust has elected to sell around 50 per cent of the units over the next two years and hold the rest while we track how their value moves. At 30 June 2019, we had sold 50,000 NZUs, receiving $1.27 million ($25.35/NZU). By 30 October 2019, a further 100,000 units had been sold for similar returns. The buyers for these units are entities who have large emissions, such as power and oil companies, that they are required to offset. The allocation of NZUs to the Trust’s pre-1990 forests was a one-off event. They can be sold only once, so when and how many to sell are therefore key decisions. After a period of low prices, a strengthening of the New Zealand Government’s commitment to fighting climate change saw NZUs return to over $20 in late 2018. The Trustees consider that such prices are at a level where we should start selling. Many commentators believe that the value of NZUs will continue to climb in forthcoming years though we also recognise that the New Zealand Government has some influence over that price through its ETS policies, which are periodically reviewed. Looking ahead, there are uncertainties about the market, both in the New Zealand Government’s domestic trading rules and whether any international carbon credit units may be allowed to be traded here. Despite these uncertainties, the general consensus is that prices are likely to rise further.
43
Lake Taupō Forest Trust
Annual Report 2019
Financial Report
NET SURPLUS AFTER TAX
The Trust generated a profit before tax and revaluations of $8 million from revenue of $19.9 million less expenses of $11.8 million.
The Trust finished the 2019 financial year with a net after tax profit of $38.2 million. Most of this was the result of an increase in forest valuation of $38 million. This has been another profitable year for the logging industry as a whole, and this is reflected in the valuation and improved profit. The forest valuation was undertaken by Indufor Asia Pacific Ltd.
REVENUE
Distributions and Grants
Operating revenue of the Lake Taupō Forest Trust Group for 2018-19 is $19.9 million.
The Trust declared a gross taxable distribution to owners of $5 million, which was paid to owners in April 2019. This was the highest declared distribution to owners since the establishment of the Trust.
The Trust’s financial performance for the year ended 30 June 2019 is summarised in the Financial Statements.
This is a 5 per cent decrease on 2018 and reflects the slowdown on the previous year’s high stumpage returns. Strong prices and low costs continued, but the production volumes have returned to their normal levels after the large volumes of logs processed in the previous two years. This year saw the first sale of the Trust’s NZ Units under the Emissions Trading Scheme. At a per unit price of $25.35/NZU, 50,000 units were sold and realised $1.27 million for the Trust. Figure 8 shows that 73 per cent of the Trust revenue was for forest stumpage: $14.6 million. Full details are provided in the Forestry Report. Investment income from dividends, interest and changes in market valuation generated $1.4 million in income for the Trust, reflecting another positive year in the investment markets. This is closely monitored by our investment advisors at IWIinvestor. The Weighbridge Company is jointly owned with Lake Rotoaira Forest Trust and commenced operations in April 2005. This year the Weighbridge Company generated $0.13 million profit and paid a dividend to the Trust of $0.113 million. Lake Taupō Forest Trust owns a 75 per cent share in the Weighbridge Company.
EXPENDITURE
44
overview of the forest costs and performance is provided in the Forestry Report.
Total operating expenses of $11.8 million were 22 per cent up on the previous year. Forest costs accounted for 51 per cent of the Trust expenditure at $6.0 million. The remaining expenses relate to Trust operating costs. An
Grants For the year ended June 2019 Pūtea Aroha (Tangihanga) grant payments of $0.21 million were made to owners. See full details in the Owners’ Report. A total of $0.17 million was paid as Marae grants to the 10 marae listed in the Third Schedule of the Trust Order. The community purposes grant of $0.18 million was paid to the Lake Taupō Charitable Trust to help achieve its strategic objectives for beneficiaries of Lake Taupō Forest Trust. The Charitable Trust distributed a total of $0.24 million in Kaumātua and Paramountcy grants, and a further $0.12 million on the forestry education programme. See the Charitable Trust report for further information on its grants this year.
TRUST ASSETS The Trust Group’s total assets were valued at $428 million at 30 June 2019. The 22 per cent increase relates mainly to the increase in the forest valuation this year of $38 million and the addition of the NZU carbon asset to the property, plant and equipment category. The forest crop makes up the most significant portion of the Trust’s asset valuations at 64 per cent. Property, plant and equipment include the value of the land and buildings and the carbon intangible asset and make up 25 per cent of the total Trust assets at 30 June
The Trust’s investment portfolios are managed by IWIinvestor and are made up of four portfolios: the Lake Taupō Growth Fund (LTG), LTG Managed Cash (LTGMC), Lake Taupō Income Fund (LTI) and NZU, which is a new fund established in 2019 with the income received from the sale of NZUs. The LTG fund (also referred to as the forest contingency fund) has a long-term focus and is designed to offset forestry risk. During the year, the only withdrawal was to pay the annual distribution to owners of $5 million and Marae grants of $0.17 million. The Growth fund was valued at $11.3 million at 30 June 2019. The LTGMC fund holds the shorter-term money market deposits in order to facilitate the annual distribution to owners. The value of the LTGMC is $1.8 million. The Trust holds unclaimed distributions in the LTI fund. This fund was valued at $17.1 million
Lake Taupō Forest Trust
INVESTMENT PORTFOLIOS
at 30 June 2019. LTI is a low risk defensive fund designed to generate income, the interest of which is then used to fund the Lake Taupō Charitable Trust. The new NZU fund holds the income from the first sale of NZUs and was valued at $1.27 million. The combined balance of the four funds (LTI, LTG, LTGMC and NZU) was $31.6 million at 30 June 2019.
Annual Report 2019
2019. The Forestry Report contains a thorough breakdown of the Emissions Trading Scheme and the carbon credit entitlement that the Trust has accumulated.
TRUST EQUITY This year, equity in the Trust Group increased by 23 per cent from $295 million to $364 million. Equity represents the remaining funds after deducting all liabilities from the assets. This year, the change in equity reflects the increase in forest valuation, addition of the carbon intangible asset into the accounts and a moderate profit, less the distribution to owners ($5 million). Figure 11 shows the movements in equity since 2015. Details of the Trust’s equity and the distribution to owners for the year ended 30 June 2019 are shown in the Statement of Changes in Equity in the summarised financial statements.
KEY FIGURES FIGURE 8
FIGURE 9
Revenue
Expenditure
$ 19.9 M I L L I O N
$ 11.9 M I L L I O N
Stumpage 73%
Gains/losses 5%
Fo r e s t c o s t s 5 1 %
Administration and rental income 11%
Other income 3%
Administration and other expenses 30%
I n ve s t m e n t i n c o m e 7 %
Share of subsidiaries income 1%
Depreciation and amortisation 3% Finance costs 2%
Personnel costs 14%
FIGURE 10
FIGURE 11
Trust Assets
Movements in Equity
$428 MILLION
$364 MILLION
400 350
364
Millions ($)
300
Fo r e s t c r o p 6 4 % P r o p e r t y, p l a n t a n d equipment and intangible assets 25%
I n ve s t m e n t p o r t f o l i o s 8% Current assets 3%
295
250 200
260 229 201
150 100 50 0
2015
2016
2017
2018
2019
45
Lake Taupō Forest Trust
Annual Report 2019
Investment Report
(SIPO) for the Growth and Income portfolios has identified your strategies within your accepted risk tolerance and capacity.
Lake Taupō Forest Trust has four investment accounts that have distinctly different objectives. The Growth portfolio is required to cover operating costs and replanting in the event of reduced income from forestry operations. The Income portfolio purpose is to hold unclaimed dividends and provide income from the interest earned to support the activities of the Charitable Trust. There are two cash portfolios: one supports the cash flow requirements of the Trust as well as building up cash for the annual dividend payment, and the second holds the proceeds from the sale of NZUs for potential reinvestment. The cash accounts have the benefit of lower fees and access to wholesale term deposit rates. Lake Taupō Forest Trust Statement of Investment Parameters and Objectives
The IWIinvestor Investment Committee and management team ensure that your portfolios contain quality investment funds. These portfolios are diversified across equities and fixed interest as well as domestic and offshore markets, enabling steady gains and minimising risk.
PORTFOLIO REVIEW Growth Portfolio The Growth portfolio has a conservative risk profile. Its primary function is long-term growth while mitigating any forestry risk. The portfolio showed a return on investment of 6.49 per cent after fees and taxes for the 2018–19 financial year. The portfolio has averaged 5.37 per cent net per year since inception. Figure 17 shows Lake Taupō Forest Trust’s gross returns to 30 June 2019 since inception.
FIGURE 12
FIGURE 13
Growth Portfolio
Income Portfolio
2 0 1 8–1 9
2 0 1 8–1 9
$11,309,789 TOTAL ASSET VALUE
$ 1 7,1 6 3 , 6 9 6 TOTA L A S S E T VA LU E
Cash 3%
Target 2%
$3 2 1,3 81
Cash 11%
Ta rget 5 %
$1, 9 0 9 , 9 8 0
NZ Fixed Int 22%
Target 23%
$2 ,4 84 ,2 2 0
NZ Fixed Int 21%
Ta rget 2 3 %
$3 , 6 8 7, 6 72
Global Fixed Int 44%
Ta rget 46%
$4 ,94 9,2 02
Global Fixed Int 43%
Ta rget 4 7 %
$7, 41 3 , 558
NZ Equities 4%
Target 4%
$4 4 9,5 3 5
NZ Equities 10%
Ta rget 10%
$1, 76 2 , 8 6 8
AUS Equities 1%
Ta rget 1%
$15 6 ,7 07
DM Equities 7%
Ta rget 8%
$1,1 8 1 , 8 0 2
DM Equities 17%
Ta rget 16%
$1,902 ,96 3
EM Equities 2%
Ta rget 2 %
$3 3 3 , 571
EM Equities 4%
Target 5 %
$4 5 2 ,6 2 1
Global Property 5%
Ta rget 5 %
$8 74, 2 45
Global Property 5%
Target 5 %
$5 93 ,15 9
FIGURE 15
FIGURE 14
NZU Cash Portfolio
MC Cash Portfolio 57% Cash
$1,075,617
43%
N Z M o n e y M a r ke t $ 8 2 0 , 2 1 0
50% Cash
$ 6 2 5 ,1 9 0
50% N Z M o n e y M a r ke t $ 6 2 5 ,1 1 3
FIGURE 16
46
Total Assets Invested 36% I n c o m e $ 1 7,1 6 3 , 6 9 6
Growth
$11,309,789
54% MC Cash $1,895,827
NZU Cash $1,250,303
6%
4%
To counter that risk, most central banks (like our Reserve Bank) have been lowering interest rates in an effort to arrest their respective slowing economies. However, as interest rates fall to current low levels, their ability to stimulate the economy weakens, particularly when the cause of the slowdown persists.
The Income portfolio has a defensive highyield risk profile. This portfolio captures all unclaimed dividends. The portfolio showed a return on investment of 5.95 per cent after fees and taxes for the 2018–19 financial year. The portfolio has averaged 6.56 per cent net per year since inception.
INVESTMENT OUTLOOK
Lake Taupō Forest Trust
Income Portfolio
Annual Report 2019
partners, and we have seen global growth slowing and the possibility of recession in the next few years.
We have compared it to gross 90-day bank bill.
The financial market is in a conundrum as both the equity and the fixed interest markets are at record high levels, but both have opposite views on the economic outlook. The equity markets are banking on the low interest rates reviving the economies, while the fixed interest markets are not convinced and anticipate further economic weakness.
Ever since the United States administration imposed tariff (tax) on Chinese exports to the United States, the global economy has been impacted by the uncertainty of its escalation and the adverse impact on these two largest economies in the world. These adversities have eventually flowed to their trading
FIGURE 17
Lake Taupō Forest Trust – Growth GROSS PERFORMANCE SINCE INCEPTION
Average Gross Return per annum 6.30%
Cumulative Returns %
300% 250% 200% 150% 100% 50% 0% 1998 1 Year 3 Years 7 Years Inception
2000
2002
GROSS RETURN 6.36% 7.00% 7.43% 6.30%
2004
2006
2008
2010
2012
2014
NET RETURN 5.79% 6.29% 6.62% 5.37%
2016
2018
90 Day LTG Gross
Performance since inception – average gross return: 6.30%
|
Long-term expected return for a conservative portfolio: 6.20%
FIGURE 18
Lake Taupō Forest Trust – Income GROSS PERFORMANCE SINCE INCEPTION
Average Gross Return per annum 7.28%
350%
Cumulative Returns %
300% 250% 200% 150% 100% 50% 0% 1998 1 Year 3 Years 7 Years Inception
2000
2002
GROSS RETURN 6.59% 6.84% 7.60% 7.28%
2004
2006
2008
NET RETURN 5.95% 5.91% 6.55% 6.56%
Performance since inception – average gross return: 7.28%
2010
2012
2014
2016
2018
90 Day LTI Gross
|
Long-term expected return for a defensive high-yield portfolio: 5.90%
47
Summarised Financial Statements 52
53
54
S U M M A R I S E D S TAT E M E N T O F
COMPREHENSIVE INCOME S U M M A R I S E D S TAT E M E N T O F
CHANGES IN EQUIT Y SUMMARISED
BALANCE SHEET
54
S U M M A R I S E D S TAT E M E N T O F
5 5 – 5 7
NOTES TO THE
CASH FLOWS FINANCIAL S TAT E M E N T S
The Trustees are pleased to present the Summarised Financial Statements of the Lake Taupō Forest Trust for the 12 months ended 30 June 2019. Authorised for and on behalf of the Board of Trustees on 10 December 2019.
Binky Ellis Chairman
Judy Harris Chairperson Audit Committee
Lake Taupō Forest Trust
Annual Report 2019
Independent auditor’s report to the Beneficiaries of Lake Taupo Forest Trust Report on the Summary Financial Statements OPINION
The summary financial statements on pages 52 to 57, which comprise the summarised balance sheet as at 30 June 2019, the summarised statement of comprehensive income, summarised statement of changes in equity and summarised statement of cash flows for the year then ended, and related notes, are derived from the audited financial statements of Lake Taupō Forest Trust (“the Trust”) and its subsidiaries (together “the Group”) for the year ended 30 June 2019. In our opinion, the accompanying summary financial statements are consistent, in all material respects, with the audited financial statements, in accordance with FRS-43: Summary Financial Statements issued by the New Zealand Accounting Standards Board.
SUMMARY FINANCIAL STATEMENTS
The summary financial statements do not contain all the disclosures required for full financial statements under generally accepted accounting practice in New Zealand. Reading the summary financial statements and the auditor’s report thereon, therefore, is not a substitute for reading the audited financial statements and the auditor’s report thereon. The summary financial statements and the audited financial statements do not reflect the effects of events that occurred subsequent to the date of our report on the audited financial statements.
THE AUDITED FINANCIAL STATEMENTS AND OUR REPORT THEREON
We expressed a qualified audit opinion on the audited financial statements in our report dated 10 December 2019. As explained in note 10 of the audited financial statements, the Group’s land and land improvements with a carrying value of $72,609,406 are stated at the most recent Government Valuations. This is a departure from New Zealand Equivalent to International Accounting Standard 16 (NZ IAS 16) which, when property, plant and equipment assets are subject to revaluations, requires such assets to be recognised at fair value. We have been unable to satisfy ourselves regarding the fair value of the land and land improvements and therefore are unable to quantify the effect of this departure from generally accepted accounting practice on the financial performance and financial position of the Group. This matter has no impact on the reported cash flows of the Group. This matter is also disclosed in Note 1 of the summary financial statements.
THOSE CHARGED WITH GOVERNANCE RESPONSIBILITIES FOR THE SUMMARY FINANCIAL STATEMENTS
Those charged with governance are responsible on behalf of the entity for the preparation of the summary financial statements in accordance with FRS-43: Summary Financial Statements.
AUDITOR’S RESPONSIBILITY
Our responsibility is to express an opinion on whether the summary financial statements are consistent, in all material respects, with the audited financial statements based on our procedures, which were conducted in accordance with International Standard on Auditing (New Zealand) (ISA (NZ)) 810 (Revised): Engagements to Report on Summary Financial Statements. Ernst & Young provides taxation advice and financial statement compilation services to the Group. We have no other relationship with, or interest in, the Group. Partners and employees of our firm may deal with the Group on normal terms within the ordinary course of trading activities of the business of the Group.
Chartered Accountants Wellington 10 December 2019
51
Lake TaupĹ? Forest Trust
Annual Report 2019
SUMMARISED STATEMENT OF
Comprehensive Income For the year ended 30 June 2019
Group 2019 $ Revenue Share of surplus of associate Total operating revenue Other income Interest expense Other expenses Total operating expenses Profit before forest crop revaluation and taxation
Group 2018 $
18,863,961
20,358,770
-
96,912
18,863,961
20,455,682
1,033,666
228,393
(137,813)
(75,951)
(11,599,506)
(9,612,404)
(11,737,319)
(9,688,355)
8,160,308
10,955,720
Forest crop revaluation
38,203,610
35,086,802
Profit before income tax
46,363,918
35,086,802
Income tax expense
(8,138,025)
(6,805,306)
Net profit for the period
38,225,893
39,277,216
35,590,292
-
Other comprehensive income Intangible carbon asset revaluation
48,331
-
Other comprehensive income for the period
Financial assets at fair value through other comprehensive income
35,638,623
-
Total comprehensive income for the period
73,864,516
39,277,216
975,237
1,052,595
Profit for the period is attributable to: Non-controlling interest Owners of the Parent
37,250,656
38,224,621
38,225,893
39,277,216
975,237
1,052,595
72,889,279
38,224,621
73,864,516
39,277,216
Total comprehensive income for the period is attributable to: Non-controlling interest Owners of the Parent
The above summarised statement of comprehensive income should be read in conjunction with the accompanying notes.
52
Changes in Equity
Lake TaupĹ? Forest Trust
Annual Report 2019
SUMMARISED STATEMENT OF For the year ended 30 June 2019
Balance at 1 July 2018
Non-
Financial
Carbon
Land
revaluation revaluation assets at fair
Retained
Owners of
controlling
reserve
reserve
value reserve
earnings
the Parent
interest
Total
$
$
$
$
$
$
$
8,810,004
-
-
274,241,432
283,051,436
12,382,353
295,433,789
Profit for the period
-
-
-
37,250,656
37,250,656
975,237
38,225,893
Other comprehensive income
-
35,590,292
48,331
-
35,638,623
-
35,638,623
Total comprehensive income for the period
-
35,590,292
48,331
37,250,656
72,889,279
975,237
73,864,516
(5,151,063)
(5,151,063)
(311,338)
(5,462,401)
48,331
306,341,025 350,789,652
13,046,252
363,835,904
Asset revaluation
Retained
Owners of
controlling
reserve
earnings
the Parent
interest
Total
$
$
$
$
$
Transactions with owners in their capacity as owners: Distributions Balance at 30 June 2019
8,810,004
35,590,292
Non-
Balance at 1 July 2017
8,810,004
240,016,810
248,826,814
11,603,538
260,430,352
Profit for the period
-
38,224,621
38,224,621
1,052,595
39,277,216
Other comprehensive income
-
-
-
-
-
-
38,224,621
38,224,621
1,052,595
39,277,216
Distributions
-
(3,999,999)
(3,999,999)
(273,780)
(4,723,779)
Balance at 30 June 2018
8,810,004
274,241,432
283,051,436
12,382,353
295,433,789
Total comprehensive income for the period Transactions with owners in their capacity as owners:
The above summarised statement of changes in equity should be read in conjunction with the accompanying notes.
53
Lake TaupĹ? Forest Trust
Annual Report 2019
SUMMARISED
Balance Sheet As at 30 June 2019
Current assets Current liabilities Net current liabilities Non-current assets
Group 2019
Group 2018
$
$
11,129,740
14,399,033
(18,757,248)
(16,975,958)
(7,627,508)
(2,576,925)
416,689,220
336,587,283
Non-current liabilities
(45,225,808)
(38,576,569)
Total net assets
363,835,904
295,433,789
306,341,025
274,241,432
FUNDS ATTRIBUTABLE TO BENEFICIARIES Retained earnings Financial assets at fair value reserve Land revaluation reserve Carbon revaluation reserve Beneficiaries’ interests Non-controlling interests Total equity
48,331
-
8,810,004
8,810,004
35,590,292
-
350,789,652
283,051,436
13,046,252
12,382,353
363,835,904
295,433,789
For and on behalf of the Board of Trustees, who authorised the issue of these summarised financial statements on 10 December 2019. The summarised group financial statements have been extracted from the full audited group financial statements of the Trust for the year to 30 June 2019.
Binky Ellis Chairman 10 December 2019
Judy Harris Chairperson Audit Committee 10 December 2019
The above summarised balance sheet should be read in conjunction with the accompanying notes.
SUMMARISED STATEMENT OF
Cash Flows For the year ended 30 June 2019
Group 2019
Group 2018
$
$
Cash flows from operating activities Net cash inflow from operating activities
6,237,515
12,636,270
(3,899,774)
(8,793,748)
(5,062,171)
(385,163)
(2,724,430)
3,457,359
Cash flows from investing activities Net cash outflow applied to investing activities Cash flows from financing activities Net cash outflow applied to financing activities Net increase/(decrease) in cash held
54
Balance 1 July
6,009,855
2,552,496
Balance as at 30 June
3,285,425
6,009,855
The above summarised statement of cash flows should be read in conjunction with the accompanying notes.
1. STATEMENT OF COMPLIANCE AND BASIS OF PREPARATION The summary financial statements of Lake Taupō Forest Trust and subsidiaries (the ‘Group’) have been prepared in accordance with Financial Reporting Standard 43: Summary Financial Statements. The full financial statements comply with New Zealand equivalents to International Financial Reporting Standards (NZ IFRS) and other applicable Financial Reporting Standards, as appropriate for profit-oriented entities except for the Group’s land and land improvements with a carrying value of $72,609,406 are stated at the most recent Government Valuations which are values based on vacant possession of the land. This is a departure from New Zealand Equivalent to International Accounting Standard 16 (NZ IAS 16) which, when property, plant and equipment assets are subject to revaluations, requires such assets to be revalued to fair value. For the purposes of complying with NZ GAAP, the Group is eligible to apply Tier 2 ForProfit Accounting Standards (New Zealand equivalents to International Financial Reporting Standards – Reduced Disclosure Regime (‘NZ IFRS RDR’)) on the basis that it does not have public accountability and is not a large for-profit public sector entity. The Group has elected to report in accordance with NZ IFRS RDR and has applied disclosure concessions. The full financial statements comply with NZ IFRS RDR except that the Group’s land and land improvements with a carrying value of $72,609,406 are stated at the most recent Government Valuations which are values based on vacant possession of the land. This is a departure from New Zealand Equivalent to International Accounting Standard 16 (NZ IAS 16) which, when property, plant and equipment assets are subject to revaluations, requires such assets to be revalued to fair value. The Group has not made an explicit and unreserved statement of compliance with IFRS in its full financial statements.
Lake Taupō Forest Trust
Financial Statements
Annual Report 2019
NOTES TO THE
The summary financial statements are presented in New Zealand dollars and all values are rounded to the nearest dollar. The summary financial statements are prepared on the historical cost basis, except for forestry assets, intangible carbon assets and certain financial assets that are carried at fair value. The specific disclosures included in these summary financial statements have been extracted from the full financial statements. No information extracted from the full financial statements has been restated or reclassified.
2. SUMMARY FINANCIAL STATEMENTS The full financial statements, which were authorised for issue on 10 December 2019, have been subject to audit by Ernst & Young and a qualified audit report was issued dated 10 December 2019. The summary financial statements have been examined by the auditor for consistency with the full financial statements. The audit report qualification relating to the full financial statements was in respect of non-compliance with NZ IAS 16, whereby land owned by the Trust is included in the financial statements at Government Valuation which is not fair value as required by NZ IAS 16. The summary financial statements cannot be expected to provide as complete an understanding as that provided by the full financial statements. The full financial statements can be obtained from the office of Lake Taupō Forest Trust, Box 102, Tūrangi on request.
3. CARBON INTANGIBLE ASSETS The Trust re-assessed its accounting for carbon intangible assets. The Group has previously measured all carbon intangible assets using the cost model, whereby after initial recognition the asset was carried at cost less accumulated impairment losses. The Trust elected to change the method of accounting for carbon intangible assets as the Trust believes the revaluation model more effectively demonstrates the financial
55
Lake Taupō Forest Trust
Annual Report 2019
position of the carbon intangible assets. In addition, the market for carbon credits in New Zealand is sufficiently liquid, which provides observable market data on which reliable fair value estimates can be derived. For the year ended 30 June 2019, the Group applied the revaluation model, whereby carbon intangible assets are mweasured at fair value at the date of the revaluation. The Trust has registered its 23,774 hectares of pre-1990 forest land and has received
4. FORESTRY ASSET
its full allocation of 1.376 million carbon credits relating to that land. During 2013– 14, the Trust deregistered approximately 600 hectares of post-1989 forests from the Ministry for Primary Industries Emissions Trading Scheme. Through this deregistration process, the Trust secured net 106,186 carbon credits. The fair value of the Group’s carbon intangible assets recognised as at 30 June 2019 is $34.3 million (2018: nil). Group 2019
Group 2018
$
$
Forest crop – Trust’s share of joint venture forest Asset at 1 July Harvest Current year increase in valuation Forest market value at 30 June
36,426,950
39,471,650
(14,573,035)
(16,481,192)
2,483,785
13,436,492
24,337,700
36,426,950
198,000,233
156,004,747
49,826,927
37,818,577
Forest crop – Trust’s forest Asset at 1 July Current year increase in valuation Harvest Capitalised costs
465,933
302,631
1,585,810
574,278
Additions during the year Forest market value at 30 June Total forest crop market value at 30 June 2019
-
3,300,000
249,878,903
198,000,233
274,216,603
234,427,183
The Group holds the forestry asset for the purpose of harvest.
Lake Taupō Forest Trust and the Ministry for Primary Industries have a joint venture agreement whereby land harvested each year is surrendered from the lease and returned to full Trust control. By 2021 the Trust will be 100 per cent owners of the 23,000-hectare forest estate. At 30 June 2019, the Trust had full control of 90.9 per cent (2018: 88.4 per cent) of the initial Crown lease component of the forest.
Valuation at 30 June
56
The trees in the joint venture forest are all aged over 26 years. Sales of trees harvested during the current reporting period totalled 527,000 m3 (2018: 547,088 m3). The fair value of this harvested product was $41,637,243 (2018: $46,959,087) of which Lake Taupō Forest Trust received a 35 per cent share.
Indufor Asia Pacific Limited (an independent valuer) has calculated the Trust’s share of value of the remaining hectares of joint forest crop as at 30 June 2019 at $24,337,700 (2018: $36,426,950). The valuation is based on the pre-tax net present value (NPV) of the future stumpage receipts, of which 35 per cent goes to Lake Taupō Forest Trust and 65 per cent to the Crown. In calculating the value, Indufor applied an 8.0 per cent (2018: 8.0 per cent) discount rate to the future cash flows. Group 2019
Group 2018
$
$
24,337,700
36,426,950
The Trust’s own forest has a total stocked area of 23,712 hectares (2018: 21,858), ranging in age from 1 to 23 years. Indufor Asia Pacific Limited has valued these at 30 June 2019 at $249,878,903 (2018: $198,000,233). This value includes a share of a plantation investment with the Lake Rotoaira Forest Trust owning
Group 2019 Valuation at 30 June
Lake Taupō Forest Trust
Also included, is a share of a plantation investment with the Lake Rotoaira Forest Trust owning the other share on Tūwharetoa Settlement Trust lands being Taurewa, Waituhi and Pureora South Forests. These were purchased at 30 June 2018 at their fair value of $3.3 million. At June 2019 these forests are valued at $4,027,860.
Annual Report 2019
the other share on Opepe Forest Trust lands. Indufor Asia Pacific Limited has valued the Trust’s share of this forest at 30 June 2019 at $4,230,541 (2018: $3,990,249). Also included is a plantation investment with the Lake Rotoaira Forest Trust owning the other share on Hautū Rangipō Whenua Lands called Kaimanawa Forest. Indufor Asia Pacific Limited has valued the Trust’s share of this forest at 30 June 2019 at $2,390,388 (2018: $1,604,736).
Group 2018
$
$
249,878,903
198,000,233
The inputs applied in the valuation of the Trust’s forest crop have been categorised as level 3 in the fair value hierarchy.
cash from the sale of logs to third parties. The Group’s strategy to manage this financial risk is to actively review and manage its working capital requirements. In addition, the Group The Group is exposed to financial risks maintains credit facilities at a level sufficient in respect of agricultural activity. The to fund the Group’s working capital during agricultural activity of the Group consists of the period between cash expenditure and the management of forests to produce logs. cash inflow. The Group’s investment strategy The primary financial risk associated with includes a Growth Portfolio of investments this activity occurs due to the length of time called the Forestry Reserve Fund, which is between expending cash on the purchase available to support any cash flow or financial or planting and maintenance of trees and risk from forestry. Currently this is valued at on harvesting trees, and ultimately receiving $13.2 million (2018: $15.7 million).
57
Lake Taupō Forest Trust
Annual Report 2019
Group Directory Lake Taupō Forest Trust CHIEF EXECUTIVE OFFICER
John Bishara
GROUP MANAGER
Amy Walker
Lake Taupō Forest Management Limited DIRECTORS
Bill Liley, John Van Der Leden, Clinton Ellis DIRECTOR AND FOREST OPERATIONS MANAGER
TRUST ACCOUNTANT
Geoff Thorp
TEAM LEADER OWNERS’ SERVICES
Patrick Nepia
Maureen Smith
Shanyn Warena
TEAM LEADER SUPPORT SERVICES
Raukura Dunster
EXECUTIVE ASSISTANT TO CEO
Sandy Gibbison
ASSISTANT ACCOUNTANTS
Tarita Kingi-Rihari, Theresa Derby-Hema, Jared Matuauto OWNERS’ SERVICES OFFICER
Te Mihiata Hakiwai-Whaanga
SUPPORT SERVICES ADMINISTRATORS
Casey Thompson, Logan Davis
Lake Taupō Charitable Trust KAITIAKI
Te Kanawa Pitiroi, David Flight, Judy Harris, Hemi Biddle PO Box 219, Tūrangi 3353 Phone: 07 386 0389 Fax: 07 386 0390 Email: frankie@ltct.co.nz or elizabeth@ltct.co.nz Website: www.ltct.co.nz
ASSISTANT MANAGER
The Weighbridge Company Limited DIRECTOR
Judy Harris DIRECTOR AND OPERATIONS MANAGER
Geoff Thorp
LTFT Land Holdings Limited DIRECTORS
Clinton Ellis, Judy Harris
Taupō Moana Investments Limited Trading as IWIinvestor
DIRECTORS
Debra Birch (Chair), John Bishara, Stephen Napier, Natvar Vallabh GENERAL MANAGER AND ADVISER
Linda Mastny
INVESTMENT OPERATIONS MANAGER/ CLIENT SERVICES
Ariana Dais
OFFICE MANAGER
Lisa te Heuheu
COMPLIANCE MANAGER
Nicole Pask
TAUPŌ OFFICE
72 Totara Street, PO Box 688, Taupō 3351 Phone: 07 378 7644 Fax: 07 378 7647 Email: info@iwiinvestor.co.nz Website: www.iwiinvestor.co.nz
58
Governance of the Trust is carried out in accordance with the Trust Order issued by the Māori Land Court and with Te Ture Whenua Māori Act 1993 and the Trustee Act 1956. For the Trustees and owners, the Trust Order is their constitution. It provides for: • power to carry out the Trust business; • financial management; • election of Trustees; • owners’ meetings. The Trustees’ duties and powers are set out in the Trust Order. Their work and the work carried out by the Trust’s management and staff must comply with the Order. The Order sets out the process for the appointment of Trustees, including an election every three years by postal ballot. In 2016, the Trust changed to a rotation policy whereby five Trustees (the longest serving) retire, and the remaining six continue for a further threeyear term. Those retiring may seek reelection. The next election is due to take place in November 2019. While it allows for other development approved by the owners, the Trust Order
Lake Taupō Forest Trust
Annual Report 2019
The Trust Order makes it clear that the core business of the Trust is forestry. The Order allows for the operations of subsidiaries, and these subsidiaries are used for the forestry and investment arms of the Trust’s business (see the Lake Taupō Forest Trust structure in the section About the Trust). It also allows for community-purposes funding to be administered through the Lake Taupō Charitable Trust (see the Charitable Trust report).
FINANCIAL All authorities for payments from the Trust’s funds originate in the Trust Order. Among other details, it sets out: • provision for capital reserves for future forestry developments; • the formulae for allocation of community purposes funding, including the annual Marae grants, the Charitable Trust’s projects and grants and Pūtea Aroha; • the formula for distributions to owners; • provision for Trustees’ fees and expenses; • the requirements for annual financial reporting and audit.
59
Lake Taupō Forest Trust
Annual Report 2019
1
Hautū 1A1
23 Hautū C
2
Hautū 1A2
24 Hautū D
3
Hautū 1A3
25 Opawa Rangitoto 1A
4
Hautū 1A4
26 Opawa Rangitoto 1B
5
Hautū 1A5
27 Opawa Rangitoto 1C
6
Hautū 1A6
28 Opawa Rangitoto 1D
7
Hautū 1A7
29 Opawa Rangitoto 2B
8
Hautū 1A8
30 Opawa Rangitoto
9
Hautū 1B1B2A1
10
Hautū 1B1B2A2
11
Hautū 1B1B2B1E1
32 Opawa Rangitoto 2G
12
Hautū 1B1B2B1E1A-C & Hautū 1B1B2B1F
33 Opawa Rangitoto 3
13
Hautū 1B1B2B3
14
Hautū 1B1B2B4
15
Hautū 1B1B2B5B1
16
Hautū 1B3
17
Hautū 2B1B2D2
18
Hautū A1
19
Hautū A2
20 Hautū A3
2D2
31
Opawa Rangitoto 2D3B2
34 Opawa Rangitoto 4 35 Opawa Rangitoto 5
45 Tauranga Taupō 1A2
67 Hautū 1B1B1A
36 Pahikohuru 2
46 Tauranga Taupō
68 Hautū 2B1B2B
37 Pahikohuru 3
47 Tauranga Taupō
38 Pahikohuru 4 39 Pahikohuru 5 40 Pahikohuru 6 41
Tauhara Middle 4A2B2C
Hautū A4
42 Tauhara South B1
22 Hautū A5
43 Tauhara South B2
21
44 Tauranga Taupō 1A1
1B1B2 1B1C
48 Tauranga Taupō 1B1D
49 Tauranga Taupō 1B2B2
69 Lot DP 480856 70 Lot DP 489535 71
Lot DP 480856
TREMAINE BLOCK
50 Tauranga Taupō 2A1
72 Te Whakao 1
51
LTFT OFFICE
Tauranga Taupō 2A2
52 Tauranga Taupō 2B1A
53 Tauranga Taupō 2B1B
54 Tauranga Taupō 2B1C
55 Tauranga Taupō 2B1D
60
TE WHENUA BLOCKS
73 Lot 1 Deposited Plan 60862
ENCLAVES
74 Section 1 SO 32019 75 Section 1 SO 30614 76 Sections 2–3 SO 356127
77 Section 3 SO 36628
Land Blocks
56 Tauranga Taupō
58 Tauranga Taupō
Waitahanui Survey District
The land blocks vested in the Trust by the Māori Land Court are listed in the schedule to the Trust Order. The original Trust Order included 58 land blocks in the Trust. Over the years, the Trust has acquired further lands so that it now holds 68 Māori land blocks under its Trust Order and 13 general land blocks.
59 Tauranga Taupō
80 Section 4 Block XIII
2B1E
57 Tauranga Taupō 2B2M1
78 Section 3 SO 33327(a)
79 Section 3 Block XIII
2B2M5
Waitahanui Survey District
3B1B
60 Tauranga Taupō D2 61
Tauranga Taupō Y
62 Te Kopiha 63 Te Whakao 2 64 Te Whakao 3 65 Te Whataroa 66 Turutururoa
81
Part Tauranga Taupō 2A
Head Office 81 Town Centre PO Box 102 TÅ«rangi, New Zealand Telephone: 07 386 8839 Fax: 07 386 0188 Website: www.ltft.co.nz