Port Nelson Annual Report 2012 (pdf)

annual report 2012

vision
Become the Benchmark – through continuous improvement
The six pillars of our vision appear on the photo pages
vision
throughout this report.
2
Executive Officers (from left): Martin Byrne, Chief Executive Officer; Parke Pittar, Chief Commercial Officer;
Digby Kynaston, Port Logistics Manager; Matt McDonald, Infrastructure Manager; Melisa Kappely, Employee Relations Manager.

content
Directors’ Report............................................................................................................................................................................................................................................5
CEO’s Report....................................................................................................................................................................................................................................................6
Community......................................................................................................................................................................................................................................................9
Governance......................................................................................................................................................................................................................................................9
Environment................................................................................................................................................................................................................................................. 10
Port People.................................................................................................................................................................................................................................................... 13
Directors......................................................................................................................................................................................................................................................... 14
Financial Report.......................................................................................................................................................................................................................................... 15
Auditor’s Report.......................................................................................................................................................................................................................................... 16
Statutory Information............................................................................................................................................................................................................................... 17
Statement of Corporate Intent.............................................................................................................................................................................................................. 19
Statement of Comprehensive Income................................................................................................................................................................................................ 20
Statement of Movements in Equity..................................................................................................................................................................................................... 20
Balance Sheet............................................................................................................................................................................................................................................... 21
Statement of Cash Flows......................................................................................................................................................................................................................... 22
Summary of Significant Accounting Policies.................................................................................................................................................................................... 24
Notes to the Accounts.............................................................................................................................................................................................................................. 28
Directory........................................................................................................................................................................................................................................................ 40
purpose
To facilitate regional prosperity
mission
To operate Port Nelson as a successful business providing cost efficient, effective and competitive services and facilities for port
users and shippers.
To provide for the present and future needs of Port Nelson in ways that are sensitive to people, use resources wisely, and are in
harmony with the environment of an export port.
objectives
• To operate as a successful business.
• To be a good employer.
• The debt equity ratio not to exceed 66.67% (40/60).
• To aim to grow the business through stimulation of throughput, added value services and related business activities, so leading to
increased revenue.
• To achieve a commercially acceptable rate of return on shareholders’ funds in accordance with meeting the objectives herein.
• To ensure that port development takes place which meets the needs of the region.
• To ensure that high environmental standards are maintained.
• To strive for continuous improvement in everything that we do.
3

performance
performance review - Port Nelson Limited
2012 2011 2010 2009 2008
Operations
Trade (millions of cargo tonnes) 2.65 2.71 2.75 2.76 2.68
Container throughput (TEUs) 86,178 83,800 85,735 82,272 77,561
Vessel arrivals (over 100GT) 733 850 835 921 921
Total Vessel GT calling (millions) 6.9 7.9 8.1 8.3 8.3
Employees (FTEs) 135 136 141 148 137
Financial ($ millions)
Revenue* $38.8 $38.3 $37.9 $38.0 $36.2
EBITDA** $19.1 $16.9 $16.7 $14.8 $17.8
Earnings before interest
and taxation (EBIT) $14.4 $12.6 $12.5 $10.7 $13.9
Net interest expense $2.5 $2.7 $2.7 $3.1 $3.3
Taxation $1.6 $3.4 $6.3 $2.7 $3.2
Net surplus after taxation $10.4 $6.6 $3.4 $4.9 $7.5
Dividends declared $12.2 $4.2 $4.1 $4.0 $3.8
Capital Expenditure $3.3 $10.3 $4.1 $8.5 $10.1
Net interest bearing debt $39.9 $39.3 $36.5 $43.0 $41.0
Total non-current tangible assets $185.6 $186.8 $181.4 $182.8 $152.3
Shareholder return metrics
Earnings per share (cents) 40.8 25.9 13.5 19.4 29.5
Dividend per share (cents) 48.0 16.5 16.1 15.7 15.0
Net assets per share $5.27 $5.38 $5.27 $5.26 $5.29
Equity 69.9% 70.6% 71.2% 69.6% 71.2%
Return on average equity 7.7% 4.9% 2.6% 3.7% 6.1%
Return on average assets 7.5% 6.6% 6.5% 5.6% 8.0%
* Revenue includes investment property revaluations
** Earnings before interest, tax, depreciation and amortisation
processes
An efficient and consistent approach to the way we do things
• Embed a culture of continuous improvement
vision
• Ensure the integrity of source data
• Provide for an accurate flow of information between systems
• Streamline processes to achieve zero wastage
• Standardise, document and train in what we do
4

directors’ report
As Chairman of Port Nelson Limited (Port Nelson), it gives me great
pleasure to report on a good year for the company, particularly when
taking into account the ongoing challenging conditions in the wider
economy.
Port Nelson has produced another strong financial result, with earnings
before interest and tax of $14.4 million, some $1.4 million above budget.
One of the main influences on the result was the strong performance of
the Unimar business over the last 12 months, as mentioned below.
Operating revenue for the last 12 months was marginally under budget,
but was compensated for by lower-than-budgeted operating expenses
and by maintenance costs coming in around $600,000 lower than
anticipated.
The main points to note regarding the revenue and expenses figures
are as follows:
•Cargo volumes were 131,000 tonnes lower than budgeted, due
mainly to the drop off in log exports to China
• Container volumes at 86,178 TEU* were just above the previous
record figure of two years ago
• Maintenance costs were well contained for the year, with dredging
expenses in particular not as high as had been expected
• Tax expense was significantly reduced due to the recognition of
buildings and building fit outs previously not depreciable now
being depreciable for tax purposes. This adjustment resulted in
a reduction in tax expense of $0.65 million. Additionally a further
$0.35 million tax expense reduction was recognised due to a
previous period adjustment.
Total cargo for 2011/12 was 2.65 million tonnes, down very slightly on
the previous year and also below what had been budgeted. The main
reason for this, as mentioned above, was the reduction in log exports to
China from the region, from the middle of 2011 onwards.
MDF, fish and wine volumes were all above budget during this period,
with sawn timber and fruit being at slightly lower levels than had been
expected.
We have continued our ongoing programme of maintaining, and where
necessary upgrading, equipment and facilities to ensure the business is
sustainable and reliable for the long term. Major items this year included
purchase of a new Empty Container Handler (ECH), and pavement
upgrading in sections of the container yard and log storage area. We
also completed the camera installation project around the port area,
resulting in vastly improved coverage with operational and security
benefits.
From a property-holding perspective, the major development we
undertook in the last year was the upgrading of the Steel and Tube
leased property. This meant lesees could consolidate two sites they
had around the wider Nelson area into one within the port precinct. As
the commercial property market in Nelson picks up, it is hoped we can
attract more such tenants to the port area, with the advantages that it
can offer.
While still on the subject of property, during the year, Nelson City
Council purchased the former Reliance Engineering and Four Seasons
buildings and sites from Port Nelson. Long term, these were not seen as
being of operational use to us and this sale fits in with the council plan
to further connect the city to the sea.
The performance of the partly Port Nelson-owned Unimar Limited
has been a highlight of the last 12 months, with the company heavily
involved in the salvage of cargo from the stricken vessel Rena off the
coast of Tauranga. As the New Zealand representative for UK-based
Braemar Howells, Unimar has been intricately involved in a large amount
of recovery work. This has seen the fortunes of the business change
significantly from only 12 months earlier, and it has been pleasing to see
a Nelson-based company at the forefront of the salvage project.
This year’s net surplus after tax, significantly inflated by the one-off
effect of the Unimar work on the Rena and the aforementioned tax
adjustments, resulted in an average return of shareholders’ funds of 7.7
per cent, and dividends declared for the full year of $12.2 million.
These dividends were made up of the normal annual dividend plus
an additional special dividend of a further $8 million that the Board
also declared. This put the total dividends paid out to shareholders
since Port Nelson Limited was formed in 1988 in the region of $122
million. The special dividend was paid after the Board undertook a
comprehensive review of the company’s position.
As the financial year came to an end, the main focus was on the continued
uncertainty over container shipping services and the challenges this
brings to regional ports in particular. After much speculation and
considerable lobbying by a number of key Nelson exporters and others
including Port Nelson, Maersk made the decision to retain a Nelson
call, with the introduction of calls from their NZ1 service from early
August. While this announcement was pleasing for all concerned, the
uncertainty that the service changes created only served to emphasise
the vulnerability of regional ports in retaining ongoing services, a
continued concern for us all.
As we head into another financial year, it is clear that 2012/13 will be a
difficult one, with cargo volumes predicted to remain static and costs
such as insurance and electricity continuing to rise. Port Nelson is
committed to continuing to work hard to provide our customers with
the most efficient service we can offer, recognising this is an ongoing
process as customer expectations continue to increase.
In closing, I would like to thank our management team and all our
staff for their efforts over the last year. I would also like to extend our
continued appreciation to our customers, whether they be importers,
exporters or shipping lines, for their continued custom. We also value
and appreciate the ongoing contribution from our two shareholders
Tasman District Council and Nelson City Council. Finally, my thanks go
out to my fellow directors for their contribution over the previous 12
months.
Nick Patterson
Chairman, Port Nelson Limited.
*TEU = Twenty-foot Equivalent Container Unit.
5

chief executive officer’s report
The financial year just ended has been a further challenging 12 months
for us, on the back of a drop-off in some cargo volumes, continuing
reviews of shipping services and the ongoing financial challenges
faced in many markets served by exporters from the region.
On the cargo side, log volumes for the year were around 636,000
tonnes, well down on the 723,000 handled in the previous year and
even further below the expected budget. The softening of the Chinese
market in particular has been very apparent to exporters in the Nelson-
Tasman area, and it appears the current volumes are likely to be the
reality for some time to come.
Apple volumes were also lower than the previous year, due to a
combination of a smaller crop and fruit being later this year following
a cooler-than-usual summer. On a more positive note, at the time
of preparing this report, pipfruit prices in major overseas markets
seemed to be more robust than in recent years, which is a positive for
the horticultural industry.
Fish volumes have also held up well this year after a good hoki season,
and it is hoped, with continued good catches and the addressing of
some storage issues for diesel supplies on the reclamation that fish
volumes will continue to grow in the coming years.
Processed wood volumes were in line with expectations, wine volumes
remained strong and fertiliser and gypsum imports were also at
pleasing levels.
On the container side, while the figures for the year were slightly below
budget, at 86,178 TEU, this was the highest number of containers
handled annually through the port to date.
Vessel visits, at 733, were well down on the previous year’s total of
850. This was partly due to the withdrawal of Strait Shipping’s weekly
Nelson-to-Wellington service in June 2011, and the absence of extra
loader vessels calling during the export fruit season this year.
As mentioned in the Directors’ Report on the previous page, the
decision of Maersk to review their Nelson weekly service caused
considerable consternation in the export community during the
month of June. While the final result of Nelson receiving a regular
call on the NZ1 service was a positive one, the decision of Maersk to
withdraw their Timaru service further emphasised the continual state
of change prevalent in the industry.
We firmly believe that the wide and varied cargo base available for
shipping lines in this region is a major point of difference from some
other regional ports, and is one that the lines themselves acknowledge.
The continuining increase in container vessel sizes is of ongoing
concern to us, given the physical limitations of Port Nelson and the
unrealistic cost of deepening beyond our present limitations. That
having been said, we remain firmly of the opinion that cargo moving
over our wharves, whether by the use of feeder or direct services, and
probably a combination of both, is the logical means for the bulk of
Nelson export cargo to make its way to overseas destinations.
see Gary Rae from Incite Ltd and Nelson City Council jointly win the
New Zealand Planning Institute Award for the implementation of the
Port Noise Variation. While not a direct recipient of the award itself,
PNL staff undertook much of the work that went on behind the scenes
to make the Variation workable, and it was very satisfying to see this
recognised at a national level.
Noise complaints for the year were down to eight, which remains
encouraging, and is a testament both to the efforts of our staff and also
to the ongoing assistance and understanding of Port Hills’ residents,
including the representatives on the Noise Liaison Committee.
We take this opportunity to thank the members of the Environmental
Consultative Committee for their ongoing work as well.
In the wider community, earlier this year, we commenced monthly
visits to the port from school groups and community groups such as
Probus and Rotary Clubs. This programme has proven very popular and
we currently have bookings right through until the end of this year. In
the past, we have run open days every three to four years, but this new
initiative gives us an additional regular opportunity to interact with a
wide range of people and to show them exactly what goes on within
our port confines. Feedback to date has been tremendous.
Internally, much of our focus at present is around what we term our
Journey to Excellence (J2E) which has a major emphasis on reducing
wastage and increasing efficiency and productivity through utilising
the ideas of our people. Part of this wider process has been working
through our Vision, which is based around the six pillars of our
business, which are people, processes, customers, financial results,
the community and the environment. These are tied into our Purpose,
which we clearly see as being to help facilitate regional prosperity.
Clearly, in the current economic climate, achieving that is challenging,
but I am convinced that we have the people within our organisation to
drive the business forward.
In closing, I would like to once again express my thanks to our Board
of Directors for their support over the last 12 months, and my sincere
appreciation to our staff without whom this business would not
function. I would also like to thank the importers and exporters of
Nelson-Tasman and Marlborough who put cargo over our wharves and
support us through many challenges such as the Maersk service review
mentioned above. That process proved the influence that all of us can
have when working together as a cohesive unit. We wish you all the
best for a successful 2012/13.
Martin Byrne
Chief Executive Officer, Port Nelson Limited.
The last year has seen us make further positive steps in continuing to
enhance our environmental credentials within the region and in the
wider port industry. Recertification of our ISO 14001 management
system was a positive sign that we continue to perform well
environmentally, and an endorsement of the work undertaken by our
Environmental Officer Thomas Marchant. It was also very pleasing to
6

financial results
A sustainable business delivering value to our shareholders
• Consistently meet our agreed targets
vision
• Minimise reliance on one off events
• Minimise waste to reduce our costs
• Identify new opportunities to grow our revenue
• Reduce business risk through diversity

community
A sense of great pride in the role we play in our community
• Have a sponsorship programme that supports our local region
vision
• Make opportunities for our people to volunteer in
our community
• Provide access for the community to the Port
• Deliver external communications that inform and engage

community
governance
highlights
Some of our sponsorships include:
Sports: FC Nelson, multi-sports events PNL Blokes Day Out
and PNL Kauri Kids, Beach Volleyball, Port Nelson
Street Races
Community: Richmond Santa Parade, Nelson Film Society, Blessing
of the Fleet
Charitable: Life Education Trust, Lions International, Relay for
Life, Fifeshire Foundation
Business: Nelson Tasman Chamber of Commerce Cornerstone
Sponsorship and Business Awards, Port Nelson
Fisherman’s Association, Sealord Marine Rescue
Centre.
supPORTing our region
Whether it’s buying petrol, eating seafood, picking fruit or sitting on
the lawn enjoying summer jazz, Port Nelson touches the lives of most
people in the Nelson region most days.
The Port Company is the region’s gateway to the world, and its role in
the region’s export-led economy is vital. Nelson’s exports provide jobs
in forestry and wood processing, fishing and aquaculture, orchards
and coolstores and in the research and marketing associated with
these key industries. Port Nelson is also active at a lesser level in
tourism, and this year led an initiative to market Nelson offshore to the
lucrative luxury yacht sector.
We are also privileged and proud to be able to support a range of
groups and projects, and maintained our spend of $150,000 on
sponsorships this year. This is particularly noteworthy, and very
much appreciated by the organisations we support, given that the
current tough economic climate has seen many other businesses
slashing their sponsorship budgets. We aim to cover a spectrum with
this funding, setting a balance between sports, charitable groups,
community projects and the business sector.
We broadened our focus on support for youth catchments of major
winter codes by continuing as the major sponsor of the Tasman
Makos’ Rugby Academy, and picking up a three-year commitment
as a cornerstone sponsor of FC Nelson. This support has supplied
equipment and kept participation free for after-school weekday
football. At the other end of the age spectrum, we backed the South
Island Masters Games held in Nelson in October. Our support for the
Summer Sea Swim Series is now in its sixth year and has been key to
the growth in participation and status of these events.
In line with our own environmental endeavours, we continued to
support the Sustainable Business Network, and picked up local
support of Paper4trees, an initiative that encourages children to
recycle paper through providing green bins for classrooms, with
native trees for school grounds as a reward. This year’s proceeds from
our Nelson Port and Transport Industry Charity Golf Tournament went
to the Jack Inglis Friendship Hospital in Motueka.
The Finance and Risk Committee and the Remuneration Committee
met as required by their respective Terms of Reference and have been
effective in dealing with matters that may not warrant full Board
attention. Both committees report to the Board.
director changes
Mr Patterson and Mr Lough both retired by rotation and were
reappointed for a further three years in September 2011.
board and sub commit tee composition
as at 30 june 2012
Board
Nick Patterson (Chair) Phil Lough (Deputy Chair)
Tim King (Director)
Paul Le Gros (Director)
Bronwyn Monopoli (Director) Peter Schuyt (Director)
Finance and Risk Committee
Peter Schuyt (Chair)
Bronwyn Monopoli (Director)
Tim King (Director)
Remuneration Committee
Nick Patterson (Chair)
Paul Le Gros (Director)
Meeting attendance
Phil Lough (Director)
Meeting type
Board Finance & Risk Remuneration
Meetings held 12 4 2
T King 11 3 -
P Le Gros 12 - 2
P Lough 10 - 2
B Monopoli 11 4 -
N Patterson 12 - 2
P Schuyt 11 4 -
further governance matters
Port Nelson operates under Port Nelson’s Corporate Governance
Code of Practice. The Code specifies matters such as:
• Ethical Standards
• Role of the Board
• Composition and Performance of the Board
• Directors (duties and responsibilities)
• Committees of the Board
• Finance and Risk
• Role of the Chairperson
• Role of the CEO
• Shareholder Relations and Statement of Corporate Intent
• Reporting and Disclosure.
Both sub-committees have undertaken a review of their respective
terms of reference in the last 12 months. The full Board has also
undertaken a self review in the period. The Port Nelson subcommittees
and full Board have been active in reviewing Port Nelson
policies and amending where deemed appropriate. The Board
continuously monitors for conflicts of interest.
9

environment
highlights
• Port Noise Variation now ratified and operative
• Recognition for the implementation of the Port Noise Variation
through a New Zealand Planning Institute Best Practice Award
• Continued reduction in the number of noise complaints
• Obtaining Ministry for the Environment (MFE) funding for
remediation planning for the Calwell Slipway Basin contamination.
Although we have been operating as though the Variation was operative
for a number of years, the ratification of the Variation means that Port
Nelson now has certainty with regards to our obligations for noise
generated at the port. The preparation of the Variation commenced in
the mid-2000s and its development has required signficant input from
not only Port Nelson but also NCC and our respective noise, planning
and legal consultants. There has also been significant input from the
local community. This hard work and the success of the Variation as an
approach for noise management was recognised during the year with
the awarding of a New Zealand Planning Institute Best Practice Award
to NCC and its planning consultant Gary Rae.
The past year has seen us continue to take a wider view of our
approach to environmental management and, in particular to focus
on the environmental sustainability of the business. The inclusion
of ‘Environment’ in our Vision is a clear indication of this and of our
intention to be a leader in sustainable environmental management in
the New Zealand port industry.
Port Nelson has continued its involvement with the Mayoral Taskforce
for Sustainability, which is overseeing the development of the
Community Sustainability Strategy for Nelson. Engaging effectively
with our local community around our environmental issues will
continue to be an important obligation for Port Nelson to meet both
in the short and long term.
At an operational level, our Environmental Management System was
re-certified as meeting the requirements of ISO 14001. This system
continues to drive our day-to-day environmental management. We
have continued our focus on our most significant environmental
aspect, which is port noise, and we are pleased that we have continued
to make progress in this area.
Indicators of Environmental Performance
port noise variation
The past year has seen the acheivement
of a major milestone with
Nelson City Council (NCC) ratifying
the Port Noise Variation. The Variation
has three key elements: a committee
comprising representatives from
both Port Nelson and the local
community; a Noise Management
2006/7 2007/8 2008/9 2009/10 2010/11 2011/12 Plan, which describes how we manage
noise at the port; and a Noise Mitigation Plan, which describes how we
carry out the noise insulation of affected properties on the Port Hills.
calwell slipway basin contamination
The Calwell Slipway Basin is an area of the port that has become
contaminated from vessel repair activites in and around the basin
since the development of the slipway in the 1970s. The ongoing
shallowing of the basin has resulted in the need to dredge the area;
however, the contaminated sediments are unable to be disposed of at
our usual site for dredge spoil in Tasman Bay.
In a joint application with NCC, we have successfully obtained funding
from the MFE Contaminated Sites Remediation Fund to identify
the preferred option for the remediation of the site. The work is
being funded 50/50 by Port Nelson/MFE, with NCC providing in-kind
support. We intend to have that work completed by the end of the
2012 calendar year. It is then hoped that a further application can
be made to the fund, to support the completion of the preferred
remediation option. We are positive that this project is an opportunity
to remediate an area of historic contamination and improve the
marine environment at the port.
indicators of environmental
performance
Our performance indicators are provided in both actual units and in
TEU to provide a measure of the improvements in efficiency. Most
indicators are showing that PNL is making good progress in reducing
its environmental footprint.
environmental issues register 2011/12
In total, 26 incidents were recorded, a significant decrease on last
year. This is mainly due to the drop in the number of noise complaints,
thanks to the continued emphasis on the management of port noise.
Environmental Issues
Aspect Indicator Baseline: 2009/10 2010/11 2011/12
Fuel Fuel use (litres) per TEU* of cargo handled 7.13 (613,459) 7.23 (606,047) 7.05 (607,774)
Power Electricity use (kw hours) per TEU of cargo handled 48.39 (4,163,012) 55.43 (4,645,683) 55.39 (4,775,071)
Waste Waste generated per FTE employee** (m3) 3.56 (501) 4.35 (592) 3.9 (534)
Methyl Bromide Quantity of methyl bromide used at Port Nelson (tonnes) 4.0 3.7 3.4
Noise Number of noise complaints 29 9 8
Oil Spills Number of oil spills when bunkering 0 0 1
Dust Number of dust complaints 1 2 0
Codes of Practice Number of audit reports completed 4 7 13
Number of non-conformances identified 2 4 13
Number of non-conformances resolved 2 4 5
Continuous improvement Number of targets reported on 15 15 15
Number of new initiatives 20 15 12
Water Water use (m3) per TEU (site use excluding ships) 0.29 (24,961) 0.22 (19,113) 0.21 (18,402)
* Twenty-foot equivalent container units for 2011/12 = 86,200. ** Full-time equivalent employees for 2011/12 = 135.
10

Photo: Nelson Mail
environment
A leader in sustainable environmental management in the NZ
Port industry
• Implement best practice environmental management
vision
• Minimise the impact of our operations
• Integrate sustainability into what we do
• Raise environmental awareness
• Measure, report and improve our performance

people
An engaged and highly capable team at Port Nelson
• Increase the engagement of our people
• Provide opportunities for ongoing training and learning
vision
• Drive a culture of zero harm
• Maximise career options
• Increase the utilisation of our talent
• Provide opportunities for our families to see what we do

our vision
port people
Percentage of Positives
4.5%
This year we set out defining our Vision and Purpose. In order to
ensure that we captured input from all our people, we held companywide
workshops and asked the fundamental questions of ‘why are we
here?’ and ‘where are we going?’.
The result was that our Purpose is clearly defined as ‘To facilitate
regional prosperity’ and our Vision is to ‘Be the Benchmark – through
continuous improvement’ with both encapsulating a strong part of
our history and focus for the future.
The Vision is underpinned by six pillars and a brief statement about
what we want to achieve in these key areas over the next five years, as
detailed throughout this report.
Pre-implementation
of Random Testing
Post-implementation
of Random Testing
4.0%
3.5%
3.0%
2.5%
2.0%
1.5%
1.0%
.5%
0%
developing capabilities
New staff joining us, and increasing Port Nelson’s expertise, include:
• Rob Hawkes, our new Customer Relations and Business Development
Manager, brings a wealth of logistics experience in both marine and
shore-based environments.
• Our new Health and Safety Advisor, Lee-anne Ricketts, has been
working with a wide range of the PNL team to identify future
initiatives towards ‘zero harm’.
• Nevin Price transferred from a marine role into project management
and is working to progress our ‘Journey to Excellence’ (J2E) programme,
identifying improvements to reduce waste using the team’s own ideas.
Also joining us in permanent positions were Barry Cross, Workshop;
Josef Beyer-Rieger, Security; Odile Gibbs, Finance and Administration;
and Mike Cresswell, Stevedoring.
health and safety training
Continuing with the development of our Health and Safety (H&S)
representatives, congratulations to both Paul Stent from Quaypack and
Peter Moore from Stevedoring who attended Level 1 H&S representative
training in May. Additionally, we rolled out our first tailored fall arrest
systems on building and construction sites to our stevedores in August.
Overall, the feedback from the course attendees was positive and all
gained further skills in working safely at heights. Congratulations to all
ten course attendees in achieving the unit standard.
lost time injury
We had seven LTIs this year, yielding an LTI Frequency Rate of 2.48
compared to 3.89 in June 2011 and 2.75 in June 2010. While it is positive
to see this reducing, there have still been seven of our people who have
sustained an injury serious enough to require time off work. Reducing
our accident rate to zero requires the ongoing focus of everyone in the
prevention of accidents through proactive hazard management, being
aware and alert on our safety-sensitive site, acting safely and watching
out for each other. ‘Good Safety is Good Business’.
random testing
The random drug and alcohol testing programme is now well
implemented at Port Nelson, having been in place since March 2011.
The programme is an important monitoring tool for ensuring that
our people are coming to the workplace fit for work. The following
graph has been created using data from the last three financial years,
with the information being split into pre and post-implementation of
random testing.
The graph provides a clear indication of the impact our random
testing programme has had on our results.
training
Our training processes, trainer competency and module development
have been the focus for the last year. In the past 12 months, we have
developed and implemented 16 new Learner Guides for operational
positions across Stevedoring, Marine and Logistics, that need to be
completed before the trainee is deemed competent to work safely
and efficiently alongside their fellow crew members.
Our training team has increased in size by four people, as we’ve
identified new trainers from Marine, Stevedoring, Logistics and
Quaypack. All of our trainers have upskilled by attending training
sessions on: How Adults Learn, Giving Trainees Effective Feedback
and Creating Interest in Training.
We have four staff that are 90 per cent through their National
Certificate in Stevedoring and Ports, Level 3 with a completion date
of December 2012. Our intention is that more staff will acquire this
qualification.
The Vault software system is now well established as our way of
storing all company training information, and we are now entering all
Health and Safety, personal protective equipment, lifting equipment
registers and contractor details into the system.
employee survey
In late 2011, we reported on the results of our Employee Survey, which
was carried out by an independent survey company, JRA. The survey
measures overall engagement levels and benchmarks the results
against the best workplaces in New Zealand. We have an excellent
response rate with 84 per cent of employees completing the survey.
In terms of engagement, our results on employees who are prepared
to ‘go the extra mile’ were similar to other companies. The survey
confirmed that there is a general sense that our people enjoy
the teamwork they experience in their roles. In addition, there
were pleasing results around the priority placed on safety, the
understanding and belief in our ASPIRE values, the expectations
of a high level of performance, and awareness of how each role
contributes to the success of the organisation.
The survey also identified areas we can improve on, including
providing more development opportunities, dealing effectively with
poor performance, and better utilising our talent.
13

directors
Nick
Patterson
Nick is the
Managing Director
of Wai-West
Horticulture Ltd,
an integrated
horticulture company
with extensive
plantings and post-harvest investments in
the Nelson district. Nick is a director of Cold
Storage Nelson Ltd, Freshco Nelson Ltd and
other associated companies.
Paul
Le Gros
Paul used to be a
partner with Duncan
Cotterill, and is now a
consultant with that
firm. He holds other
business and board
appointments. Over
the past 30 years, Paul has been extensively
involved with the YMCA movement, in Nelson,
nationally and internationally.
B r o nw y n
M o n o p o l i
Bronwyn is
a Chartered
Accountant, with her
Richmond-based
practice providing
specialist accounting
and financial advice
to mainly rural businesses. She is also a
director of the Animal Health Board and a
trustee of several arts-related organisations.
T i m
King
Tim is Deputy Mayor
of the Tasman
District Council and
chairs its Corporate
Services Committee.
He farms on the
Waimea Plains
and has governance roles on a range of
community organisations, including the
Waimea Rural Fire Authority and the Wakefield
and Community Health Centre Trust.
Peter
Schuyt
Peter is a professional
director and holds
directorships
in a number of
organisations across
a range of different
business sectors. He
has previously been Chief Financial Officer of
several major New Zealand companies.
P h i l
Lough
Phil is currently
Chair of Methven Ltd
and Quotable Value
Ltd, and also holds
directorships with a
range of other New
Zealand companies.
He was previously CEO of the Sealord Group
and is based in Nelson.
2012 financial highlights
Financial Highlights
2012 2011 2010 2009 2008
Revenue (millions) $38.8 $38.3 $37.9 $38.0 $36.2
Net surplus after taxation* (millions) $10.4 $6.6 $3.4 $4.9 $7.5
Dividend (millions) $12.2 $4.2 $4.1 $4.0 $3.8
Basic earnings per ordinary share (cents) 40.8 25.9 13.5 19.4 29.5
Return on average shareholders’ funds 7.7% 4.9% 2.6% 3.7% 6.1%
Net asset backing per share $5.27 $5.38 $5.27 $5.26 $5.29
Dividend – recommended per share (cents) 48.0 16.5 16.1 15.7 15.0
Return on average total assets** 7.5% 6.6% 6.5% 5.6% 8.0%
Ratio of shareholders’ funds to total assets 69.9% 70.6% 71.2% 69.6% 71.2%
Trade Highlights
2012 2011 2010 2009 2008
Cargo tonnes (millions) 2.65 2.71 2.75 2.78 2.68
Vessel arrivals 733 850 835 921 921
Container throughput (TEUs) 86,178 83,800 85,735 82,272 77,561
* Net Surplus is prior to Other Comprehensive Income
** Based on EBIT
14

2012 financial report
customers
An organisation that delivers real value to its customers
• Understand our customers and their needs
• Continually engage with our customers
vision
• Deliver consistent service
• Develop active and engaged working groups
• Build strategic alliances with our key customers
• Grow the business through attracting new customers

audit report
Independent Auditor’s Report
To the readers of Port Nelson Limited’s financial statements for the year ended 30 June 2012
The Auditor-General is the auditor of Port Nelson Limited (Port Nelson). The Auditor-General has appointed me, Julian Tan, using the staff and
resources of Audit New Zealand, to carry out the audit of the financial statements of Port Nelson on her behalf.
We have audited the financial statements of Port Nelson on pages 20 to 39, that comprise the balance sheet as at 30 June 2012, the statement
of comprehensive income, statement of changes in equity, statement of cash flows and the summary of significant accounting policies for the
year ended on that date and the notes to the financial statements that include other explanatory information.
Opinion
Financial statements
• In our opinion the financial statements of Port Nelson on pages 20 to 39:
• comply with generally accepted accounting practice in New Zealand;
• give a true and fair view of Port Nelson’s:
• financial position as at 30 June 2012; and
• financial performance and cash flows for the year ended on that date.
Other legal requirements
In accordance with the Financial Reporting Act 1993 we report that, in our opinion, proper accounting records have been kept by Port Nelson
as far as appears from an examination of those records.
Our audit was completed on 28 September 2012. This is the date at which our opinion is expressed.
The basis of our opinion is explained below. In addition, we outline the responsibilities of the Board of Directors and our responsibilities, and
explain our independence.
Basis of opinion
We carried out our audit in accordance with the Auditor-General’s Auditing Standards, which incorporate the International Standards on
Auditing (New Zealand). Those standards require that we comply with ethical requirements and plan and carry out our audit to obtain
reasonable assurance about whether the financial statements are free from material misstatement.
Material misstatements are differences or omissions of amounts and disclosures that would affect a reader’s overall understanding of the
financial statements. If we had found material misstatements that were not corrected, we would have referred to them in our opinion.
An audit involves carrying out procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The
procedures selected depend on our judgement, including our assessment of risks of material misstatement of the financial statements whether
due to fraud or error. In making those risk assessments, we consider internal control relevant to the preparation of Port Nelson’s financial
statements that give a true and fair view of the matters to which they relate. We consider internal control in order to design audit procedures that
are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of Port Nelson’s internal control.
An audit also involves evaluating:
• the appropriateness of accounting policies used and whether they have been consistently applied;
• the reasonableness of the significant accounting estimates and judgements made by the Board of Directors;
• the adequacy of all disclosures in the financial statements; and
• the overall presentation of the financial statements.
We did not examine every transaction, nor do we guarantee complete accuracy of the financial statements. In accordance with the Financial
Reporting Act 1993, we report that we have obtained all the information and explanations we have required. We believe we have obtained
sufficient and appropriate audit evidence to provide a basis for our audit opinion.
Responsibilities of the Board of Directors
The Board of Directors is responsible for preparing financial statements that:
• comply with generally accepted accounting practice in New Zealand;
• give a true and fair view of Port Nelson’s financial position, financial performance and cash flows.
The Board of Directors is also responsible for such internal control as it determines is necessary to enable the preparation of financial statements
that are free from material misstatement, whether due to fraud or error.
The Board of Directors’ responsibilities arise from the Financial Reporting Act 1993 and the Port Companies Act 1988.
Responsibilities of the Auditor
We are responsible for expressing an independent opinion on the financial statements and reporting that opinion to you based on our audit.
Our responsibility arises from section 15 of the Public Audit Act 2001and section 19 of the Port Companies Act 1988.
Independence
When carrying out the audit, we followed the independence requirements of the AuditorGeneral, which incorporate the independence
requirements of the New Zealand Institute of Chartered Accountants.
Other than the audit, we have no relationship with or interests in Port Nelson.
Julian Tan
Audit New Zealand
On behalf of the AuditorGeneral
Christchurch, New Zealand
16

statutory information
to the shareholders, on the affairs of port nelson limited
for the year ended 30 june 2012
principal activities
Port Nelson is primarily engaged in the commercial operation of the port of Nelson. There has been no significant change in the
nature of Port Nelson’s business during the year.
review of activities
A review of the year’s operations is contained in the Chairman’s Report and the Chief Executive Officer’s Review.
review of operations
The net surplus for Port Nelson for the year was $10.367 million (2011 $6.584 million).
dividends
Dividends of $12,200,000 were recognised in the 2012 financial year ($1,000,000 interim dividend, $8,000,000 special dividend and
a provision for $3,200,000 final dividend for the 2012 financial year). Dividends of $12,200,000 were paid during the 2012 financial
year ($3,200,000 final dividend for the 2011 financial year, $1,000,000 interim dividend and $8,000,000 special dividend for the 2012
financial year).
directors
In accordance with Port Nelson’s constitution Messrs P M Schuyt and B A Monopoli will retire by rotation at the AGM in September 2012.
remuneration of directors
Fees paid to Directors during the year were as follows:
A O Patterson $60,800
P D Le Gros* $38,800
T B King $32,200
P V Lough $31,300
B A Monopoli $32,200
P M Schuyt $32,200
Total $227,500
statutory information
P D Le Gros was paid an additional $7,500 in director’s fees as recognition for services rendered on behalf of the board dealing with
an ad-hoc commercial matter that required board input. Without the additional fee, the amount paid to P D Le Gros fees would be
$31,300 and total director fees $220,000.
directors’ insurance
Port Nelson has arranged policies of Directors’ Liability Insurance to ensure that as far as possible Directors will not personally incur
any monetary loss as a result of actions undertaken by them as Directors. Certain actions are specifically excluded, for example the
incurring of penalties and fines that may be imposed in respect of breaches of the law.
directors’ interest
The following notices have been received from Directors disclosing their interests in other companies with whom the group may have
transactions. All transactions with these companies are conducted on normal commercial terms.
• 
Ms B A Monopoli has the following entries in the Register of Directors’ Interests: Director of the Animal Health Board Inc. Trusteeships;
Chairman of Nelson Millennium Centre Trust, Trustee of Wearable Arts Development Charitable Trust, Trustee of New Zealand International
Arts Festival Trust, Trustee of the Wellington Jazz Festival Trust. Other; Principal of Bronwyn Monopoli Chartered Accountant.
• 
Mr A O Patterson has the following entries in the Register of Directors’ Interests: Directorships; Director of Cold Storage Nelson Ltd,
Director of Freshco Nelson Ltd, Chairman of Wai-West Horticulture Ltd, Director of Wai-West Farms Ltd, Director of Nayland Road
Cool Storage Ltd, Chairman of Saxton Fruit Limited, Chairman of Tasman Rugby Union. Trusteeships; Nil. Other; Nil.
• 
Mr P M Schuyt has the following entries in the Register of Directors’ Interests: Directorships; Director of Dairy Investment Fund Ltd,
Director of Golden Bay Fruit 2008 Ltd, Director of Landcare Research Ltd, Director of Tatua Co-operative Dairy Company Ltd, Chairman
of carbonZero Ltd. Trusteeships; Trustee of World Wildlife Fund, Trustee of Wellington College. Other; Councillor of Waikato University.
• 
Mr P V Lough has the following entries in the Register of Directors’ Interests: Directorships; Director of LIC Ltd, Director od Fisher
and Paykel Appliances Ltd, Chairman of Methven Limited, Chairman of Quotable Value Limited. Trusteeships; Nil. Other; Nil.
• 
Mr P D Le Gros has the following entries in the Register of Directors’ Interests: Directorships; Director of Unimar Limited, Director
of Fico Finance Limited, Director of Duncan Cotterill Nelson Trustees (2008) Limited, Director of Nelson Electricity Limited, Director
of Building Connexion Limited. Trusteeships; Trustee of Nelson YMCA. Other; Nil.
• 
Mr T B King has the following entries in the Register of Directors’ Interests: Directorships; Waimea Rural Fire Authority. Trusteeships;
Trustee of Kaiteriteri Recreation Reserve Board. Other; Deputy Mayor of Tasman District Council, which is a shareholder of Port
Nelson, member of the Waimea Water Augmentation Committee and National Rural Fire Authority.
17

statutory information
to the shareholders, on the affairs of port nelson limited
for the year ended 30 june 2012
statutory information
directors’ loans
There were no loans by Port Nelson to Directors.
shareholding by directors
No Directors hold shares in Port Nelson.
use of company information
During the year the Board received no notices from Directors requesting to use Company information received in their capacity as
Directors that would not otherwise have been available to them.
committees of the board
The Board has established a Finance and Risk Committee to assist the Board in carrying out its responsibilities under the Companies
Act 1993 and the Financial Reporting Act 1993 and a Remuneration Committee.
auditors
Under section 14 of the Public Audit Act 2001 and section 19 of the Port Companies Act 1988, the Auditor-General is the Auditor of
Port Nelson. The Auditor-General has appointed Audit New Zealand to undertake the audit on its behalf. Fees paid to the Auditors
are disclosed in the Financial Statements.
performance indicators
As required under Section 16 of the Port Companies Act 1988, performance indicators in the Statement of Corporate Intent are given
on page 19.
donations
Donations made during the year are disclosed in the Financial Statements.
employee remuneration
Port Nelson has remunerated employees in excess of $100,000 per annum in the following bands:
Remuneration Number of employees Number of employees
2012 2011 2012 2011
$100,000 to $110,000 1 1 $170,000 to $180,000 1 2
$110,000 to $120,000 1 - $180,000 to $190,000 1 1
$120,000 to $130,000 - 2* $190,000 to $200,000 1 -
$130,000 to $140,000 2 2 $210,000 to $220,000 - 1
$140,000 to $150,000 1 - $220,000 to $230,000 1 -
$150,000 to $160,000 - - $320,000 to $330,000 - 1
$160,000 to $170,000 - - $340,000 to $350,000 1 -
* Includes employment cessation payments.
changes in accounting policies
FRS-44 New Zealand Additional Disclosures and Amendments to NZ IFRS was adopted during the year to harmonise with source
IFRS and Australian Accounting Standards (Harmonisation Amendments). The purpose being to eliminate many of the differences
between the accounting standards in each jurisdiction. Apart from this additional policy adoption there have been no other changes
in accounting policies during the financial year disclosed in the Financial Statements.
Nick Patterson
Chairman of Directors
For and on behalf of the Board
Date: 28 September 2012
Peter Schuyt
Director
18

statement of corporate intent
mission statement
• 
To operate Port Nelson as a successful business providing cost efficient, effective and competitive services and facilities for port
users and shippers.
• 
To provide for the present and future needs of Port Nelson in ways that are sensitive to people, use resources wisely, and are in
harmony with the environment of an export port.
objectives
1. To operate as a successful business.
2. To be a good employer.
3. The debt equity ratio not to exceed 45.0% (31/69).
4. To aim to grow the business through stimulation of throughput, added value services and related business activities, so leading
to increased revenue.
5. To achieve a commercially acceptable rate of return on shareholders’ funds in accordance with meeting the objectives herein.
6. To ensure that port development takes place which meets the needs of the region.
7. To ensure that high environmental standards are maintained.
8. To strive for continuous improvement in everything that we do.
measure of performance against objectives
Target 2012 2011 2010 Target Met?
Lost Time Injury Frequency Rate *

statement of comprehensive income
for the year ended 30 june 2012
income and equity head
Notes 2012 2011
$000 $000
revenue
Operations 32,833 32,371
Property 5,974 5,937
Operating Revenue 1 38,807 38,308
expenses
Employee Wages and Related Expenses 9,337 9,130
Depreciation and Amortisation 4,677 4,234
Other Operational and Property Expenses 2 12,455 12,206
Total Expenses from Operating and Property Activities 26,469 25,570
Results from Operating and Property Activities 12,338 12,738
Finance Income 58 18
Finance Expenses 2,524 2,664
Net Finance Costs 2,466 2,646
Profit after Financing Costs 9,872 10,092
Expenses Associated with Noise Mitigation 21 85 (37)
Profit before Share of Associate Loss 9,787 10,129
Share of Profit / (Loss) from Associate 7 1,881 (149)
Gain on Convertible Notes from Associate 7 272 -
2,153 (149)
NET SURPLUS BEFORE TAXATION 11,940 9,980
Less Taxation Expense 3 1,573 3,396
NET SURPLUS (Attributable to Owners) 10,367 6,584
other comprehensive income
First Time Recognition of Infrastructural Assets 9b - 1,554
Movements in Deferred Tax 6 (435)
Movements in Hedging Reserve 9h (1,014) (87)
Movements in Revaluation Reserve - Unimar 7 (34) (606)
TOTAL COMPREHENSIVE INCOME (Attributable to Owners) 9,325 7,010
statement of movements in equity
for the year ended 30 june 2012
2012 2011
$000 $000
Balance at 1 july 136,751 133,935
Total Comprehensive Income Attributable to Owners 9,325 7,010
Dividends 9b (12,200) (4,200)
Deferred Tax Adjustment 9b (3) 6
balance at 30 june 133,873 136,751
20
The Summary of Significant Accounting Policies and Notes to the Accounts on pages 24 to 39 form part of these Financial Statements.

alance sheet
as at 30 june 2012
Notes 2012 2011
$000 $000
current assets
Cash and Cash Equivalents 10 - 504
Trade and Other Receivables 11 4,705 4,455
Inventories 12 306 365
Prepayments and Accruals 295 131
Advance to Associate 8 - 611
Properties Intended for Sale 6 - -
Hedging Asset 16 - 37
5,306 6,103
less current liabilities
Bank Overdraft 10 46 -
Trade and Other Payables 13 2,229 1,749
Employee Benefit Liabilities 20 1,083 967
Tax Payable 1,220 1,361
Dividend Payable 9b 3,200 3,200
Hedging Liability Current Portion 16 144 -
Noise Mitigation Current Portion 21 54 97
7,976 7,374
head balance
working capital (2,670) (1,271)
non-current assets
Property, Plant and Equipment 14 169,613 173,422
Intangible Assets 15 728 799
Investment Properties 5 12,527 12,682
Investments in Associates 7 3,477 693
186,345 187,596
non-current liabilities
Employee Benefit Liabilities 20 163 110
Deferred Tax Liability 4 6,038 7,674
Term Loan 16 39,900 39,300
Hedging Liability Non-Current Portion 16 3,152 1,979
Noise Mitigation Non-Current Portion 21 549 511
49,802 49,574
TOTAL NET ASSETS 133,873 136,751
shareholders’ funds
Issued Capital 9a 6,046 6,046
Retained Earnings 9b 40,487 41,247
Asset Revaluation Reserves 9f 89,562 90,631
Other Reserves 9g 151 186
Hedging Reserve 9h (2,373) (1,359)
TOTAL SHAREHOLDERS’ FUNDS 133,873 136,751
Nick Patterson
Chairman of Directors
For and on behalf of the Board
Date: 28 September 2012
Peter Schuyt
Director
The Summary of Significant Accounting Policies and Notes to the Accounts on pages 24 to 39 form part of these Financial Statements.
21

statement of cash flows
for the year ended 30 june 2012
cashflows
cash flows from operating activities
Cash was provided from:
2012 2011
$000 $000
Receipts from Customers 32,457 32,304
Rent Received 5,956 5,731
Interest Received 5 18
Cash was applied to:
38,418 38,053
Payments to Suppliers and Employees (21,518) (21,007)
Interest Paid (2,584) (2,607)
Taxes Paid (3,001) (3,071)
Net GST (Paid)/Received 483 (566)
(26,620) (27,251)
Net Cash In Flows from Operating Activities 11,798 10,802
cash flows from investing activities
Cash was provided from:
Property Plant and Equipment Sold 2,553 1,159
Cash was applied to:
Purchase of Property Plant and Equipment (3,018) (9,548)
Purchase of Intangibles (283) (142)
Purchase of Investment - (611)
(3,301) (10,301)
Net Cash Out Flows from Investing Activities (748) (9,142)
cash flows from financing activities
Cash was provided from:
Loans Raised 600 2,800
Cash was applied to:
Dividend Paid (12,200) (4,100)
Net Cash Out Flows from Financing Activities (11,600) (1,300)
Net Increase/(Decrease) in Cash Held (550) 360
Cash at 1 July 504 144
CASH AT 30 JUNE (46) 504
Represented by:
Cash at Bank - 504
Call Advance (Overdraft) (46) -
CASH AT 30 JUNE (46) 504
The GST (net) component of operating activities reflects the net GST paid and received with the Inland Revenue Department. The
GST (net) component has been presented on a net basis, as the gross amounts do not provide meaningful information for financial
statement purposes.
22 The Summary of Significant Accounting Policies and Notes to the Accounts on pages 26 to 39 form part of these Financial Statements.

statement of cash flows
for the year ended 30 june 2012
2012 2011
$000 $000
reconciliation with net surplus
Net Surplus 10,367 6,584
Add Non Cash Items:
Depreciation and Amortisation 4,677 4,234
Increase (Decrease) in Deferred Tax (1,275) 35
Less:
Noise Mitigation Provision (5) (92)
3,397 4,177
Add (Less) Movements in Other Working Capital Items:
(Increase)/Decrease in Accounts Receivable (250) (338)
(Increase)/Decrease in Inventory 59 28
(Increase)/Decrease in Prepayments and Accruals (164) (31)
Increase/(Decrease) in Accounts Payable (excluding Assets Payable) 480 (861)
Increase/(Decrease) in Current Employee Benefit Liabilities 116 (83)
Increase/(Decrease) in Tax Payable (141) 244
100 (1,041)
Add (Less) Items Classified as Investing Activities:
Movement in Employee Benefit Liabilities Non-Current 53 (57)
Net (Profit) Loss on Sale of Assets including Investing Activities 67 142
Impairment of Investment Property 155 415
Movement in Capital Creditors (135) 175
Accrued Interest on Notes Capitalised (53) -
Gain on Conversion of Notes (272) -
Share of (Gain)/Loss from Investment in Associate (1,881) 149
Writedown of Goodwill - 258
(2,066) 1,082
Net Cash Inflow From Operating Activities 11,798 10,802
cashflows
The Summary of Significant Accounting Policies and Notes to the Accounts on pages 26 to 39 form part of these Financial Statements.
23

summary of significant accounting policies
policies
reporting entity
Port Nelson Limited (Port Nelson) is registered under the Companies Act 1993 and created pursuant to the Port Companies Act 1988.
Port Nelson is a reporting entity in terms of the Financial Reporting Act 1993. The financial statements of Port Nelson have been
prepared in accordance with the Financial Reporting Act 1993.
basis of preparation
The financial statements have been prepared in accordance with Generally Accepted Accounting Practice in New Zealand (‘NZ GAAP’).
They comply with New Zealand equivalents to International Financial Reporting Standards (‘NZ IFRS’) and other applicable reporting
standards as appropriate for profit-orientated entities.
The financial statements are presented in New Zealand dollars and the functional currency of Port Nelson is New Zealand dollars.
The financial statements were authorised for issue by the directors on 28 September 2012.
standards and interpretations issued and not yet adopted
There are no standards, interpretations and amendments that have been issued, that are not yet effective, and that are relevant to
Port Nelson that Port Nelson has not yet applied except for NZ IFRS 8. NZ IFRS 8 provides guidance on the disclosure requirements
in respect of the operating segments of the entity. Port Nelson is awaiting the outcome of a proposed change in the standard by the
Financial Reporting Standards Board that may result in Port Nelson being outside the scope before assessing the impact.
The amendments to the following standards and interpretations are not relevant to Port Nelson’s operations and are not expected to
have any significant impact:
Effective for the
financial year ending:
NZ IFRS 7 Disclosures – Transfers of Financial Assets (Amendments) 2013
NZ IAS 12 Income Taxes – Deferred Tax Recovery of Underlying Assets (Amendments) 2013
NZ IAS 1 Presentation of Items of Other Comprehensive Income – Amendment to NZ IAS 1 2014
NZ IAS 19 Employee Benefits (Revised) 2014
NZ IAS 28 Investments in Associates and Joint Ventures 2014
NZ IFRS 12 Disclosure of Interests in Other Entities 2014
NZ IFRS 13 Fair Value Measurement 2014
NZ IFRS 9 Financial Instruments – Classification and Measurement 2016
accounting policies
FRS-44 New Zealand Additional Disclosures and Amendments to NZ IFRS was adopted during the year to harmonise with source
IFRS and Australian Accounting Standards (Harmonisation Amendments). The purpose being to eliminate many of the differences
between the accounting standards in each jurisdiction. Apart from this additional policy adoption there have been no other changes
in accounting policies during the financial year disclosed in the Financial Statements.
measurement system
Those accounting principles considered appropriate for the measurement and reporting of results and financial position under the
historical cost method, modified by the revaluation of land, buildings, wharves, offshore vessels and investment property, have been
followed.
rounding of amounts
Amounts in this report have, unless otherwise indicated, been rounded to the nearest 1,000 dollars.
specific accounting policies
The accounting policies adopted in the financial statements which have a significant effect on the result and the financial position
disclosed are set out below:
1.1 Revenue Recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to Port Nelson and that revenue
can be reliably measured as follows:
Cargo and Marine revenue – is recognised based on departure of the vessel.
Stevedoring – is recognised based on partial completion of the vessel at balance date.
Property lease revenue – is recognised on an accrual basis at balance date. Rentals are payable in advance.
Interest revenue – is recognised on a time proportion basis using the effective interest method.
1.2 Provisions
Provisions are recognised when a present obligation exists as a result of a past event, the future sacrifice of economic benefits
24

summary of significant accounting policies
is probable, and the amount of the provision can be measured reliably. The amount recognised as a provision is the best
estimate of the consideration required to settle the present obligation at reporting date, taking into account the risks and
uncertainties surrounding the obligation.
1.3 Property Plant and Equipment and Depreciation
Property, Plant and Equipment, except land, buildings, wharves and offshore capable floating plant are stated at valuation
taken over from the Nelson Harbour Board on 1 October 1988 and subsequent additions at cost. Depreciation is written off
depreciable assets on a straight line basis over the estimated economic lives of the assets, ranging as follows:
Y years years
Wharves, Quays and Berths 20-72 Software 5
Vessels (inshore) 20 Buildings 50-100
Vessels (offshore capable) 20 Cranes 15-20
Forklifts 15-25 Tractors and Vehicles 10
Sundry Plant and Equipment 5-20 Navigation and Pilot Equipment 3-40
Office Equipment 5-15 Hard Standing 50
Infrastructural Assets 50-80 Building Fit-out 10
Capital dredging is not amortised. The cost of maintaining the dredged depth is expensed.
Land is valued at least every three years. Land is included at the valuation as at 30 June 2008. As at 30 June 2012, Port
Nelson engaged TelferYoung, an independent valuer to complete a fair value assessment, which indicated no revaluation
was required. The carrying value reflects the fair value. Land owned and leased to third parties is valued at the market value
of the lessor’s interests. Non leased land is recorded at market value. Additions between valuations are recorded at cost. The
land valuation was completed by Ian McKeage, Registered Valuer, FNZIV, FPINZ of TelferYoung. Land will be revalued at 30
June 2013.
Buildings are stated at fair value. Fair value was determined as at 30 June 2008 using either a market-based approach (where
evidence can be reliably analysed) or optimised depreciated replacement cost. Additions between valuations are recorded
at cost. Buildings are valued at least every five years. The buildings’ valuation was completed by Ian McKeage, Registered
Valuer, FNZIV, FPINZ of TelferYoung. Buildings will be revalued at 30 June 2013.
Wharves are stated at fair value as determined by Port Nelson’s engineering staff and reviewed by Ian McKeage, Registered
Valuer, FNZIV, FPINZ of TelferYoung. Fair value was determined as at 30 June 2008 using optimised depreciated replacement
cost. Wharves are valued at least every five years. Additions between valuations are recorded at cost. Wharves will be
revalued at 30 June 2013.
Infrastructural assets include stormwater, sewerage and water reticulation located underground.
The asset classes that are subject to revaluation are assessed at each balance date to ensure that the values are not materially
different from fair value. Where the carrying value is materially different from fair value a revaluation is undertaken. Gains
and losses on disposals are determined by comparing the proceeds with the carrying amount of the asset. Gains and losses
are included in the Statement of Comprehensive Income. When revalued assets are sold, the amounts included in asset
revaluation reserves in respect of those assets are transferred to retained earnings.
Cost incurred subsequent to initial acquisition are capitalised only when it is probable that future economic benefits or service
potential associated with the item will flow to Port Nelson and the cost of the item can be reliably measured.
1.4 Investment Properties
Investment Property which is property held to earn rentals and/or capital appreciation is measured at its fair value at the
reporting date. Gains or losses from changes in the fair value of investment property are included in the profit or loss in the
period in which they arise. Investment Properties are not depreciated.
1.5 Properties Intended for Sale
At each reporting date, Port Nelson reviews the carrying amount of any Properties Intended for Sale to determine whether
there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable
amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Properties Intended for Sale
are not depreciated. Properties are actively marketed and there is probable sale within one year.
1.6 Cash and Cash Equivalents
Cash and cash equivalents comprise cash on hand, cash in banks and investments in money market instruments, net of
outstanding bank overdrafts. Bank overdrafts are disclosed separately in current liabilities in the balance sheet.
policies
25

summary of significant accounting policies
policies
1.7 Trade and Other Receivables
Trade and Other Receivables are valued at fair value and subsequently measured at amortised cost using the effective
interest method, less any provision for impairment.
A provision for the impairment of receivables is established when there is objective evidence that all amounts due will not be
able to be collected as per the original terms of the receivables. The amount of the provision is the difference between the
asset’s carrying amount and the present value of estimated future cash flows, discounted using the effective interest method.
1.8 Inventories
Inventory is valued at the lower of cost using the weighted average method and net realisable value. Full provision has been
made for obsolescence where applicable. Inventory is held for internal maintenance and construction work only.
1.9 Intangible Assets
Intangible assets are limited to computer software. On acquisition they are capitalised at cost which equates to fair value.
The computer software will have a finite life. Amortisation is to be charged to the Statement of Comprehensive Income
based on the finite life of the asset. Software is amortised on a straight line basis over five years. Intangible assets will be
tested for impairment where an indicator of impairment exists and useful lives will be assessed on an annual basis.
1.10 Impairment of Assets
At each reporting date, Port Nelson reviews the carrying amount of its tangible and intangible assets to determine whether
there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable
amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
Where the carrying amount of the asset exceeds its recoverable amount the asset is considered impaired and is written
down to its recoverable amount. For revalued assets the impairment loss is recognised against the revaluation reserve for
that class of asset. Where that results in a debit balance in the revaluation reserve, the balance is recognised in the Statement
of Comprehensive Income. For assets not carried at a revalued amount the impairment loss is recognised in the Statement
of Comprehensive Income.
The reversal of an impairment loss on a revalued asset is credited to the revaluation reserve. However, to the extent that
an impairment loss for that class of asset was previously recognised in the Statement of Comprehensive Income, a reversal
of the impairment loss is also recognised in the Statement of Comprehensive Income. For assets not carried at a revalued
amount, the total impairment loss is recognised in the Statement of Comprehensive Income.
1.11 Goods and Services Tax
All items in the financial statements are exclusive of goods and services tax (GST) with the exception of receivables and
payables which are stated with the GST included. Where GST is not recoverable as an input tax then it is recognised as part
of the related asset or expense.
The net amount of GST recoverable from, or payable to, the Inland Revenue Department (IRD) is included as part of
receivables or payables in the Balance Sheet.
The net GST paid to or received from the IRD, including the GST relating to investing and financing activities, is classified as
an operating cash flow in the Statement of Cash Flows. Commitments and contingencies are disclosed exclusive of GST.
1.12 Income Tax
The income tax expense for the period is the tax payable on the current period’s taxable income based on the income tax
rate and adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax
bases of assets and liabilities and their carrying amounts in the financial statements and for unused tax losses (if any).
Deferred tax assets and liabilities are recognised for temporary differences at the rate expected to apply when the assets are
recovered or liabilities are settled. The tax rate is applied to the cumulative amounts of deductible and taxable temporary
differences to measure the deferred tax asset or liability.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those temporary differences and losses.
Deferred tax is charged or credited to the Statement of Comprehensive Income, except where it relates to items charged or
credited directly to equity, in which case the tax is dealt with in other comprehensive income.
1.13 Borrowings
Borrowings are initially recognised at their fair value. After initial recognition, all borrowings are measured at amortised cost
using the effective interest method where this differs from face value.
1.14 Derivative Financial Instruments
Port Nelson uses derivative financial instruments such as interest rate swaps to hedge against interest rate fluctuations. Port
Nelson does not hold or issue derivative financial instruments for trading purposes. Such derivative financial instruments are
stated at fair value. The fair value of interest rate swaps is determined by reference to market values. The effective portion
26

summary of significant accounting policies
of changes in the fair value of the derivative financial instruments that are designated and qualify as cash flow hedges are
deferred in equity.
If a hedging instrument is sold, terminated, revoked or no longer meets the criteria for hedge accounting, the cumulative
gain or loss that remains recognised directly in equity from the period when the hedge was effective will be recognised in
the Statement of Comprehensive Income.
1.15 Financing Costs
Finance costs are recognised as an expense when incurred. Financing costs directly attributable to the acquisition, construction
or production of qualifying assets, which are assets that take a substantial period of time to get ready for their intended use,
are added to the cost of those assets until such a time as the assets are substantially ready for their intended use.
1.16 Employee Entitlements
Provision is made in respect of Port Nelson’s liability for annual leave, long service leave and retirement gratuities. Annual
leave and long service leave have been calculated on an actual entitlement basis at current rates of pay and retirement
gratuities calculated at current rates of pay assuming the payment will be made upon retirement.
1.17 Foreign Exchange Transactions
Transactions in foreign currencies are converted at the New Zealand rate of exchange ruling at the date of the transaction.
Capital items are converted at the exchange rate ruling at balance date or the forward exchange contract rate where
applicable.
1.18 Leases
Leases of plant and equipment are classified as operating leases. Operating lease payments are charged as an expense in
the period in which they are incurred, as this represents the pattern of benefits derived from the leased assets.
1.19 Dividends
Provision is made for the amount of any dividend declared on or before the end of the financial year but not distributed at
balance date.
1.20 Critical Judgements
In preparing these financial statements Port Nelson has made estimates and assumptions concerning the future. These
estimates and assumptions may differ from the subsequent actual results and are continually being evaluated based on
historical experience and other factors, including expectations or future events that are expected to be reasonable under
the circumstances. The estimates and assumptions that have a risk of causing a significant adjustment to the carrying
amounts of assets and liabilities within the next financial year are the provision for noise mitigation and the carrying value
of the investment in associate.
The provision for noise mitigation is based on a number of variables such as the costs to mitigate, number of houses requiring
mitigation, and period over which mitigation will occur. The provision is Port Nelson’s best estimate at this point in time, and
will be updated as more information is obtained.
For comparative purposes, judgements for the investment in associate has been assessed considering past financial
performance and future financial forecasts underpinned by such factors as vessel valuations (based on likely realisation),
vessel utilisation and foreign exchange rates which are subject to sensitivity of assumptions. The forecasts indicate that the
carrying value in the financial statements is appropriate. Any difference in the future profitability of the associate compared
to that forecast will result in Port Nelson needing to reassess the carrying value.
1.21 Associates
Port Nelson’s associate investment is accounted for in the financial statements using the equity method. An associate is an
entity over which Port Nelson has significant influence and that is neither a subsidiary nor an interest in a joint venture. The
investment in an associate is initially recognised at cost and the carrying amount in the financial statements is increased or
decreased to recognise Port Nelson’s share of the surplus or deficit of the associate after the date of acquisition. Distributions
received from an associate reduce the carrying amount of the investment.
If the share of deficits of an associate equals or exceeds its interest in the associate, Port Nelson discontinues recognising its
share of further deficits. After Port Nelson’s interest is reduced to zero, additional deficits are provided for, and a liability is
recognised, only to the extent that Port Nelson has incurred legal or constructive obligations or made payments on behalf
of the associate. If the associate subsequently reports surpluses, Port Nelson will resume recognising its share of those
surpluses only after its share of the surpluses equals the share of deficits not recognised.
Where Port Nelson transacts with an associate, surplus or deficits are eliminated to the extent of Port Nelson’s interest in the
associate. Dilution gains or losses arising from investments in associates are recognised in the surplus or deficit.
policies
27

notes to the accounts
notes
note 1: operating revenue
2012 2011
Includes the following revenue: $000 $000
port operations
Port Operations 32,815 32,368
Gain on Sale of Assets 18 3
Total Port Operations 32,833 32,371
property
Property Leases and Licences 4,996 4,910
Investment Property 978 1,027
Total Property 5,974 5,937
Total operating Revenue 38,807 38,308
All revenue relates to continuing operations.
note 2: other operational and property expenses
2012 2011
Includes the following expense: $000 $000
Administration Related 3,206 2,323
Audit Fees - Prior Year - 10
Audit Fees - Current Year 58 57
Bad Debts Written Off 5 13
Directors’ Fees 228 216
Donations/Corporate Sponsorship 151 146
Net Fair Value Write-Down on Investment Property 155 415
Goodwill Write-down in Associate - 258
Investment Property Expenses 15 17
Loss on Sale of Assets 85 145
Operating Leases 18 22
Other Operating Expenses 8,533 8,584
Total Expense 12,455 12,206
All expenses relate to continuing operations.
note 3: provision for taxation
2012 2011
$000 $000
Current Tax 3,200 3,361
Prior Year Adjustment (351) 35
Deferred Tax (622) (134)
Deferred Tax Adjustment for Reduction in Tax Rate - 20
Deferred Tax Adjustment for Reinstatement of Tax Depreciation on Buildings (654) 114
TAX EXPENSE 1,573 3,396
Profit from Continuing Operations 11,940 9,980
Tax at 28% (2011: 30%) 3,343 2,994
Prior Year Adjustment (351) 35
Non Deductible Expenses 108 268
Non Taxable Income (633) (35)
Deferred Tax Adjustment for Reduction in Tax Rate - 20
Deferred Tax Movement (240) -
Deferred Tax Adjustment for Reinstatement of Tax Depreciation on Buildings (654) 114
TAX EXPENSE 1,573 3,396
28

notes to the accounts
note 4: deferred tax (assets) and liabilities
Employee Intangible
PP&E Provision Derivatives Entitlements Assets Total
2012 $000 $000 $000 $000 $000 $000
Opening Balance 8,549 (168) (544) (304) 141 7,674
Charged to Profit and Loss (581) (1) - (16) (24) (622)
Building tax change to Profit and Loss (654) - - - - (654)
Charged to Equity 19 - (379) - - (360)
balance AT 28% 7,333 (169) (923) (320) 117 6,038
notes
2011
Opening Balance 8,237 (272) (546) (357) 140 7,202
Charged to Profit and Loss (272) 104 - 33 1 (134)
Building tax change to Profit and Loss 114 - - - - 114
Charged to Equity 435 - (37) - - 398
balance AT 28% 8,549 (168) (583) (324) 141 7,615
Tax rate adjustment
Charged to Profit and Loss - - - 20 - 20
Charged to Equity - - 39 - - 39
CLOSING balance 8,549 (168) (544) (304) 141 7,674
note 5: investment property
2012 2011
$000 $000
Opening Balance 12,682 13,097
Additions - -
Revaluations (155) (415)
Reclassification - -
Properties Intended for Sale - -
Properties Sold - -
Closing Balance 12,527 12,682
Basis of Valuation
Investment Property is stated at fair value. Fair value was determined as at 30 June 2012 being the market value of the lessor’s interests
as at 30 June 2012, and is valued annually. Valuation was completed by Ian McKeage, Independent Registered Valuer, FNZIV, FPINZ of
TelferYoung.
note 6: properties intended for sale
2012 2011
$000 $000
Opening Balance - 1,073
Additions - -
Disposals - (1,073)
Impairment - -
Closing Balance - -
Properties Intended for sale
Port Nelson was required to purchase three properties in the 2009 financial year as part of its obligation in respect of the Nelson City
Council Resource Management Plan Noise Variation. Subsequent remedial noise mitigation work has been undertaken on the three
houses. Two of these properties were sold in 2010. The third property was sold in 2011. An additional property not associated with the
Noise Variation was held at the 30 June 2010 balance date as Intended for Sale. This property was also disposed of in the 2011 year.
29

notes to the accounts
notes
note 7: investment in associates
Investment in Unimar Group
2012 2011
$000 $000
Total 3,477 693
Movements in the Carrying Amount of Investment in Associate
Opening Balance 693 1,707
New Investments 666 -
Disposal of Investments - -
Share in Revaluation Reserve Movement (35) (606)
Goodwill Write-off - (259)
Gain on conversion of notes 272 -
Share of recognised revenues and expenses 1,881 (149)
Closing Balance 3,477 693
Summarised Financial Information of Associate Company
Assets 15,039 19,100
Liabilities 7,094 16,649
Revenues 50,899 13,221
Surplus (deficit) for 2012 4,298 (596)
Port Nelson Interest 44% 25%
2012
Unimar had a trading surplus of $4,298,000. Additionally during the year the vessel Marsol Pride was sold realising the equity portion
invested via the financial lease on the vessel. Port Nelson also exercised its conversion rights on the convertible notes realising a gain
on conversion of $272,000.
2011
Unimar had a trading deficit of $595,637. Unimar undertook a Convertible Notes issue in 2010 to assist with funding operations. The
vessel leased by Unimar has a conditional back to back purchase and sales contract on it which will see Unimar realise the investment
in the vessel accrued from the time of lease to date of sale. The funds realised will allow Unimar to continue operating and provide
for the repayment of the Convertible Notes.
note 8: advance to associate
Advance to Unimar Group
2012 2011
$000 $000
Total - 611
Movements in Advance to Associate
Opening Balance 611 -
Capitalisation of interest 53 -
Conversion of notes (664) -
Advance - 611
Closing Balance - 611
2012
On the 9th December 2011 Port Nelson converted the first tranche of convertible notes at an exercise price of $0.75 per share. The amount
converted consisted of $333,000 advance and $53,645 interest receivable capitalised resulting in the issuing of 515,527 shares and taking Port
Nelson’s shareholding to 39.69%. On the 31st May 2012 Port Nelson converted the second tranche at an exercise price of $0.75 per share. The
amount converted was $277,778 resulting in the issuing of a further 370,371 shares and taking Port Nelson’s shareholding to 43.76%.
2011
Advances were made to Unimar totalling $610,778 by way of two tranches. These were made on the 15th October 2010 ($333,000) and
the 31st March 2011 ($277,778). The advances are in the form of Convertible Notes. The Convertible Notes have an exercise price of $0.75c
per share and attract an interest rate of 14.0% per annum. The Convertible Notes are convertible at the option of the note holder. It is not
anticipated that any further advances will have to be made.
30

notes to the accounts
note 9: equity
2012 2011
(a) Share Capital $000 $000
Opening Balance 6,046 6,046
Redeemed During the Year - -
Balance at 30 June 6,046 6,046
At 30 June 2012 Port Nelson has 25,415,404 ordinary shares. All shares are fully paid and have no par value. All shares carry equal voting
rights and the right to share in any surplus on winding up of the company. None of the shares carry fixed dividend rights.
notes
(b) Retained Earnings
Retained Earnings 41,247 37,413
Net Surplus 10,367 6,584
Dividends Paid (9,000) (1,000)
Transfer to Dividend Payable (3,200) (3,200)
Infrastructural Assets Recognised for the First Time - 1,554
Deferred Tax - Prior Period 3 6
Deferred Tax - Infrastructural Assets (6) (435)
Transfer – Revaluation Reserve 18 -
Transfer - Revaluation Reserve Properties Sold 1,058 325
Retained Earnings at 30 June 40,487 41,247
(c) Asset Revaluation Reserve (Land and Improvements)
Opening Balance 78,376 78,701
Revaluation Movement - -
Transfer to Retained Earnings - Properties Sold (1,058) (325)
Deferred Tax Movement - -
Transfer to Retained Earnings - -
Closing Balance 77,319 78,376
d) Asset Revaluation Reserve (Wharves)
Opening Balance 10,246 10,248
Revaluation Movement - -
Revaluation Movement - Wharf Reclassification - -
Deferred Tax Movement - -
Transfer to Retained Earnings - (2)
Closing Balance 10,246 10,246
(e) Asset Revaluation Reserve (Buildings)
Opening Balance 2,009 2,009
Revaluation Movement (19) -
Deferred Tax Movement 6 -
Transfer to Retained Earnings - -
Closing Balance 1,997 2,009
(f) Asset Revaluation Summary
Opening Balance 90,631 90,957
Revaluation Movement (19) -
Transfer to Retained Earnings - Properties Sold (1,058) (325)
Deferred Tax Movement 6 -
Transfer to Retained Earnings 2 (1)
Closing Balance 89,562 90,631
31

notes to the accounts
notes
note 9: equity (...continued)
2012 2011
(g) Associate’s Revaluation Reserve $000 $000
Opening Balance 186 793
Revaluation Movement (35) (607)
Deferred Tax Movement - -
Transfer to Retained Earnings - -
Closing Balance 151 186
(h) Hedging Reserve
Opening Balance (1,359) (1,274)
Fair Value Movement (1,354) (122)
Deferred Tax Movement 340 37
Closing balance (2,373) (1,359)
The Revaluation Reserves relate to the revaluation of land, wharves, buildings and Port Nelson’s associate.
The Hedging Reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedging instruments related
to hedged transactions that have not yet occurred.
The Associate’s Revaluation Reserve relates to Port Nelson’s share of the associate’s equity reserve balances.
note 10: cash and cash equivalents 2012 2011
$000 $000
Cash On Hand 2 2
General Account (48) 502
Total (46) 504
note 11: trade and other receivables 2012 2011
$000 $000
GST Receivable - 173
Trade Receivables 4,700 4,226
Related Party Receivables 5 56
Total 4,705 4,455
The status of the receivables as at 30 June are detailed below:
Not Past Due 3,055 2,809
Past Due 1-31 Days 1,409 1,309
Past Due 32-61 Days 110 112
Past Due 62-92 Days 88 9
Past Due > 92 Days 43 43
Total 4,705 4,282
note 12: inventories 2012 2011
$000 $000
Opening Balance 365 383
Purchases 603 768
Expensed (662) (796)
Closing Balance 306 365
No inventories are pledged as security for liabilities nor are any inventories subject to retention of title clauses.
32
note 13: trade and other payables 2012 2011
$000 $000
Accruals 628 783
GST Payable 322 -
ACC Payable 244 216
Trade Payables 1,020 740
Related Party Payables 15 10
Closing Balance 2,229 1,749

notes to the accounts
note 14: property plant and equipment
2012 asset class
Accumulated
Accumulated
Depreciation Current Current Depreciation
and Current Year Year Cost/ and
Cost/ Impairment Carrying Year Current Impair- Depre- Revalu- Revalu- Impairment Carrying
Revaluation Charges Amount Additions/ Year ment ciation ation ation Charges Amt
1/07/11 1/07/11 1/07/11 Transfers Disposals Charges Charges Surplus 30/6/12 30/6/12 30/6/12
$000 $000 $000 $000 $000 $000 $000 $000 $000 $000 $000
Mobile Plant 19,687 (11,716) 7,971 6,667 (120) - (1,362) - 25,826 (12,670) 13,156
Floating Plant 5,819 (4,113) 1,706 97 - - (153) - 5,830 (4,180) 1,650
Wharves & Berths 25,464 (2,744) 22,720 83 - - (889) - 25,546 (3,632) 21,914
Wharves Leased 3,021 (683) 2,338 - - - (216) - 3,021 (899) 2,122
Plant, Furniture & Fittings 12,627 (7,488) 5,139 260 (16) - (742) - 12,705 (8,064) 4,641
Infrastructural Assets 1,554 - 1,554 3 - - (78) - 1,557 (78) 1,479
IT Equipment 1,593 (1,221) 372 158 - - (138) - 1,751 (1,359) 392
Hardstanding & Roadways 8,713 (1,498) 7,215 629 (1) - (191) - 9,341 (1,687) 7,654
Dredging 2,105 - 2,105 12 - - - - 2,117 - 2,117
Buildings 9,595 (743) 8,852 (1,077) (130) - (237) - 8,321 (913) 7,408
Building Fit-Out - - - 1,160 - - (96) - 1,449 (385) 1,064
Buildings Leased 7,657 (608) 7,049 (44) (1,155) - (222) - 6,246 (618) 5,628
Land 55,321 - 55,321 29 - - - - 55,350 - 55,350
Land Leased 45,097 - 45,097 - (1,200) - - - 43,897 - 43,897
Work in Progress 5,983 - 5,983 (4,842) - - - - 1,141 - 1,141
204,236 (30,814) 173,422 3,135 (2,620) - (4,324) - 204,098 (34,485) 169,613
notes
2011 asset class
Mobile Plant 19,252 (11,317) 7,935 1,370 (226) - (1,108) - 19,687 (11,716) 7,971
Floating Plant 5,434 (3,983) 1,451 385 - - (130) - 5,819 (4,113) 1,706
Wharves & Berths 25,464 (1,857) 23,607 - - - (887) - 25,464 (2,744) 22,720
Wharves Leased 3,021 (456) 2,565 - - - (227) - 3,021 (683) 2,338
Plant, Furniture & Fittings 12,095 (6,728) 5,367 542 - - (770) - 12,627 (7,488) 5,139
Infrastructural Assets* - - - 1,554 - - - - 1,554 - 1,554
IT Equipment 1,474 (1,089) 385 124 (2) - (135) - 1,593 (1,221) 372
Hardstanding & Roadways 7,988 (1,318) 6,670 724 - - (179) - 8,713 (1,498) 7,215
Dredging 2,105 - 2,105 - - - - - 2,105 - 2,105
Buildings 9,595 (497) 9,098 - - - (246) - 9,595 (743) 8,852
Buildings Leased 7,241 (402) 6,839 416 - - (206) - 7,657 (608) 7,049
Land 55,321 - 55,321 - - - - - 55,321 - 55,321
Land Leased 44,704 - 44,704 393 - - - - 45,097 - 45,097
Work in Progress 409 - 409 5,574 - - - - 5,983 - 5,983
194,103 (27,647) 166,456 11,082 (228) - (3,888) - 204,236 (30,814) 173,422
Note: All assets are held primarily for the operating of port facilities.
Land, buildings and wharves were valued as at 30 June 2008. As at 30 June 2012, Port Nelson engaged TelferYoung, an independent valuer to
complete a fair value assessment, which indicated no revaluation was required. The carrying value reflects the fair value.
Port Nelson is required to undertake seismic assessments of some of its buildings in accordance with the Building Act and Nelson City Council’s
Policy for Earthquake Prone, Dangerous and Insanitary Buildings. These assessments are being undertaken by independent consultants. It is
likely that some buildings will be assessed as Earthquake Prone. Buildings assessed as Earthquake Prone will either require seismic strengthening
or demolition in the longer term. Port Nelson therefore expects that these seismic assessments will lead to the impairment of some buildings in
coming years. Port Nelson expects that the programme to complete all of the required assessments will extend over a number of years.
* Infrastructural Assets, including stormwater, sewerage and water reticulation assets located underground have been recognised for the first
time in 2011. The valuation performed by an independent valuer, Darroch Limited, brings into account assets previously owned by the former
Nelson Harbour Board, that did not get recognised on the formation of Port Nelson Limited on the 1st October 1988. The valuation method
used for recording cost is depreciated replacement cost. The amounts recognised are deemed to be cost and no subsequent valuations will
be performed. There has been no tax deductibility allowed for any additional depreciation associated with the infrastructural assets being
recognised.
33

notes to the accounts
notes
note 15: intangible assets
Accumulated
Accumulated
Ammortisation Current Current Ammortisation
and Current Year Year Cost/ and
Cost/ Impairment Carrying Year Current Impair- Ammort- Revalu- Impairment Carrying
Revaluation Charges Amount Additions/ Year ment isation ation Charges Amt
1/07/11 1/07/11 1/07/11 Transfers Disposals Charges Charges 30/6/12 30/6/12 30/6/12
$000 $000 $000 $000 $000 $000 $000 $000 $000 $000
2012 asset class
Software 3,525 (2,726) 799 283 - - (354) 3,808 (3,080) 728
3,525 (2,726) 799 283 - - (354) 3,808 (3,080) 728
2011 asset class
Software 3,383 (2,381) 1,002 142 - - (345) 3,525 (2,726) 799
3,383 (2,381) 1,002 142 - - (345) 3,525 (2726) 799
All Intangible Assets are externally generated.
note 16: financial instruments
Financial Risk Management Objectives
Port Nelson does not enter into or trade financial instruments, including derivative financial instruments for speculative purposes. Treasury
functions are governed by a Treasury Policy approved by the Board of Directors. Approved instruments include:
• Forward rate agreements
• Options on a swap
• Interest rate collars
• Interest rate swaps
• Interest rate options
• Spot and forward foreign exchange
Fixed rate hedging parameters are as follows:
Term Minimum Fixed Rate Amount Maximum Fixed Rate Amount
Less than 1 year 50% 100%
1 year to 4 years 30% 70%
5 years to 10 years 0% 50%
Market Risk
Currency Risk
Port Nelson purchases plant and equipment from time to time from overseas which require it to enter into forward foreign exchange
contracts to hedge the foreign currency risk exposure. This means that Port Nelson is able to fix the New Zealand dollar amount payable
prior to delivery of the plant and equipment from overseas. As at balance date Port Nelson had NIL currency risk exposure.
Cash flow interest rate risk
Cash flow interest rate risk is the risk that the cash flows from a financial instrument will fluctuate due to changes in market interest rates.
Borrowings issued at variable interest rates expose Port Nelson to cash flow interest rate risk.
Port Nelson’s Treasury Policy is to maintain a portion of its borrowings using interest rate swap instruments within the parameters as set
out in the Hedging Parameter table disclosed under the Financial Risk Management Objectives section. Under the interest rate swaps, Port
Nelson agrees with other parties to exchange, at specified intervals, the difference between fixed contract rates and floating-rate interest
amounts calculated by reference to the agreed notional principle amounts.
Credit Risk
Port Nelson is exposed to credit risk from the possibility of counter-parties failing to perform their obligations.
Credit risk exposure on financial assets other than cash at bank and at call has been recognised in the balance sheet net of any provision for
doubtful debts. Principally any risk is in respect of cash and bank, and accounts receivable.
The major components of debtor exposure are to shipping companies and forestry exporters. Terms of trade are either payment on the 20th
of the month following or 7 working days. The majority of debtors are major international companies with extensive histories of payment.
There are no major concentrations of credit risk with respect to accounts receivable and any single debtor.
34

notes to the accounts
note 16: financial instruments (...continued)
Maximum exposures to credit risk at balance date are: 2012 2011
$000 $000
Cash and Cash Equivalents - 504
Trade and Other Receivables 4,705 4,455
Advance to Associate - 611
TOTAL CREDIT RISK 4,705 5,570
notes
The above maximum exposures are net of any recognised provision for losses on these financial instruments. No collateral is held on the
above accounts.
The Directors do not consider there is any significant exposure to interest rate risk on its investments.
Credit Quality of Financial Assets
The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to Standard and Poor’s credit rating
(if available) or to historical information about counterparty default rates:
2012 2011
$000 $000
Cash and Cash Equivalents
AA - 504
Debtors and receivables arise in the ordinary course of Port Nelson’s business. There are no procedures in place to monitor or report the
credit quality of debtors and other receivables with reference to internal or external credit ratings. Port Nelson does instigate a credit check
on new debtors prior to providing business on Port Nelson Standard Terms and Conditions.
Liquidity Risk
Management of liquidity risk
Liquidity risk is the risk that Port Nelson will encounter ‘difficulty’ raising funds to meet commitments as they fall due. Prudent liquidity risk
management implies maintaining sufficient cash, the availability of funding through an adequate amount of committed credit facilities and
the ability to close out market positions. Port Nelson aims to maintain flexibility in funding by keeping committed credit lines available.
Port Nelson has financing arrangements with Westpac Banking Corporation. The total facility is $50,000,000 for a term of 2 years. (2011:
$50,000,000 for a term of 2 years).
Security for the multi-option credit facility is by a first and exclusive debenture charge over the assets and undertakings of Port Nelson.
The following table details the notional principal amounts and remaining terms of interest rate swap contracts outstanding as at reporting
date.
Note: Swaps expiring within 12 months are treated as core debt and will be replaced with another approved instrument.
2012 (at balance date)
Notional Amount Fair Value Interest 0 to 1 1 to 2 2 to 3 3 to 4 4 to 5 6 to 7 8 to 9 9 to 10
($000’s) gain/(loss) rate %* year years years years years years years years
$4,000 Swap (144) 6.95 4,000 - - - - - - -
Total Current (144) 4,000 - - - - - - -
$9,000 Swap (412) 6.19 - 9,000 - - - - - -
$4,000 Swap (252) 6.34 - - 4,000 - - - - -
$5,000 Swap (434) 6.50 - - - - 5,000 - - -
$6,000 Swap (819) 6.49 - - - - 6,000 - - -
$5,000 Swap (170) 5.70 - - - - - 5,000 - -
$5,000 Swap (747) 5.99 - - - - - 5,000 - -
$4,000 Swap (212) 5.90 - - - - - - 4,000 -
$5,000 Swap (56) 5.35 - - - - - - - 5,000
$4,000 Swap (49) 3.99 - - - - - - - 4,000
Total Non-Current (3,151) - - - - - - - - -
2012 Total (3,295) - 4,000 9,000 4,000 - 11,000 10,000 4,000 9,000
2011 Total (1,942) - - 4,000 9,000 4,000 - 11,000 - 10,000
*Interest rate is exclusive of margin and line of credit fee.
All interest rate options and interest swap options are on 90 day roll-over terms.
The following table summarises the Port Nelson exposure to interest rate risk as at 30 June 2012.
35

notes to the accounts
notes
note 16: financial instruments (...continued)
2012
(000’s) Weighted Fixed Maturity Dates
Average
Non
Financial Effective Floating 0 to 1 1 to 5 5+ Interest
Instruments Interest Rate Interest Year Years Years Bearing Total
financial assets
Loans and Receivables:
Cash and Cash Equivalents - - - - - - -
Trade and Other Receivables - - - - - 4,705 4,705
Total Loans and other receivablEs - - - - 4,705 4,705
financial liabilities
Financial Liabilities at amortised Cost:
Bank Overdraft 5.70% 46 -
Borrowings 6.38% 11,946 4,000 15,000 9,000 - 39,946
Trade and Other Payables - - - - - 2,229 2,229
Total Financial liabilities
at Amortised cost 11,992 4,000 15,000 9,000 2,229 42,175
2011
(000’s) Weighted Fixed Maturity Dates
Average
Non
Financial Effective Floating 0 to 1 1 to 5 5+ Interest
Instruments Interest Rate Interest Year Years Years Bearing Total
financial assets
Loans and Receivables:
Cash and Cash Equivalents 2.00% 504 - - - - 504
Trade and Other Receivables - - 611 - - 4,455 5,066
Total Loans and other receivablEs 504 611 - - 4,455 5,570
financial liabilities
Financial Liabilities at amortised Cost:
Borrowings 7.03% 15,300 - 13,000 11,000 - 39,300
Trade and Other Payables - - - - - 1,749 1,749
Total Financial liabilities
at Amortised cost 15,300 - 13,000 11,000 1,749 41,049
Sensitivity Analysis
The following table illustrates the potential profit and loss and equity impact for reasonably possible market movements, with all
other variables held constant, based on Port Nelson’s financial instrument exposure at the balance date.
Carrying
Interest rate
amount
NZD 000’s -100bp -100bp +100bp +100bp
Financial assets Profit Equity Profit Equity
Cash and Cash Equivalents - - - - -
Derivatives – designated as cash flow hedges - - - - -
Financial liabilities
Borrowings 11,946 119 119 (119) (119)
Derivatives – designated as cash flow hedges 3,296 (1,735) 1,904
Fair Values
Cash and Cash Equivalents are valued as the amount of the deposit or the purchase of the underlying security.
Receivables are carried at the nominal amount due, less any provision for doubtful debts which represents the assessed credit risk.
Liability to trade creditors is recognised on receipt of goods and services at nominal value. Payment would normally occur within 30 days.
The following table details the fair value comparison of the long term borrowings as at 30 June 2012.
36

notes to the accounts
note 16: financial instruments (...continued)
Carrying Value
Fair Value
2012 2011 2012 2011
financial liabilities $000 $000 $000 $000
Term Debt 39,900 39,300 39,900 39,300
Fair Value Movement (Net) - - 3,296 1,942
Total Financial Liabilities 39,300 39,300 43,196 41,242
notes
note 17: term loan
Interest Rate Contracts:
The notional principal amounts of interest rate contracts outstanding at 30 June 2012 are as follows:
1. $4,000,000 for 4 years @ 6.95% p.a. terminating 31 May 2013
2. $9,000,000 for 2 years @ 6.19% p.a. terminating 29 November 2013
3. $6,000,000 for 9 years @ 6.49% p.a. terminating 30 November 2016
4. $5,000,000 for 10 years @ 5.99% p.a terminating 31 July 2019
5. $4,000,000 for 10 years @ 3.99% p.a terminating 29 April 2022
Swaps expiring within 12 months are treated as core debt and will be replaced with another approved instrument.
note 18: commitments
2012 2011
The following expenditure was contracted for at balance date: $000 $000
Capital Development 8 598
note 19: operating leases
2012 2011
Non-cancellable operating leases as lessee $000 $000
Not later than one year 14 14
Later than one year and not later than five years 10 24
Total Non-Cancellable Operating Lease 24 38
Non-cancellable operating leases as lessor
Not later than one year 5,478 4,857
Later than one year and not later than five years 14,992 14,530
Later than five years 7,314 6,975
Total Non-Cancellable Operating Lease 27,784 26,392
note 20: employee benefit liabilities
2012 2011
$000 $000
Accrued Pay 182 100
Annual Leave 694 666
Long Service Leave 157 97
Retirement Gratuities 47 47
Other Benefits 166 168
Total Employee Benefit Liabilities 1,246 1,078
Comprising:
Current 1,083 968
Non-current 163 110
Total Employee Benefit Liabilities 1,246 1,078
37

notes to the accounts
notes
note 21: noise mitigation provision 2012 2011
$000 $000
Opening Balance 608 700
Additional Provisions Made in the Period 85 -
Decrease to Existing Provisions - (55)
Provision Used (90) (37)
Total NOISE MITIGATION PROVISION 603 608
Comprising:
Current 54 97
Non-current 549 511
Total NOISE MITIGATION PROVISION 603 608
2012
Port Nelson reviews its Noise Liability provision each year as the mitigation work is undertaken. The year end provision balance of
$603,000 is for Stages One, Two and now also includes Stage Three. Under the Noise Variation which is now operative, Port Nelson
has an obligation to Stage Three property owners to provide technical advice, where requested, and to consider providing financial
assistance for mitigation works (up to 50 percent of costs). The decision on whether to provide financial assistance will be based on a
recommendation made to Port Nelson by the Port Noise Liaison Committee on a case by case basis. Port Nelson has now quantified
the costs of this obligation as at 30 June 2012.
The Noise Variation within the Nelson City Resource Management Plan was notified with effect on 14 July 2008 and was adopted by the
Nelson City Council on the 23rd February 2012. Port Nelson has an obligation to assist with noise mitigation works for noise affected
properties adjacent to the Port. These properties are separated into three stages based on the level of Port Noise received. In Stage
One (these are houses that are exposed to night time Ldn from port generated noise of 65 dBa or more) Port Nelson is required to make
offers to either fully fund noise mitigation work or to purchase the eleven Stage One properties and at 30 June 2012 nine of these eleven
properties have had this obligation met. For the properties in the 55 to 59.9 dBa and 60 to 64.9 dBa areas (Stage Two), offers have been
made by Port Nelson to owners in these areas to cover 50 percent of the noise mitigation cost. There is no offer for the purchase of these
properties required. For properties in Stage Two Port Nelson is required to approach all owners with this offer. For properties in the 55
to 59.9 dBa area (Stage Three) the owners are required to approach Port Nelson and seek approval for this. Offers will include 50 percent
of the costs of building work, any professional fees, building consents, preparation of drawings and project management.
2011
Port Nelson has made a Noise Liability provision of $608,000. The year end provision balance is for Stages One and Two. Stage Three
has been recognised as a contingent liability (see note 22). Port Nelson has an obligation to Stage Three property owners to provide
technical advice, where requested, and to consider providing financial assistance for mitigation works (50 percent of costs). The
decision on whether to provide financial assistance will be based on a recommendation made to Port Nelson by the Port Noise Liaison
Committee. Port Nelson cannot currently quantify the cost of this obligation at 30 June 2011.
note 22: contingent assets and liabilities
2012
The Calwell Slipway basin contains contaminated seabed sediments. Port Nelson has title to this area of seabed. While the marine
engineering and vessel coating industries in and around the slipway area are now controlled the historical contamination still persists
in the sediments. The on-going sedimentation of the basin now requires dredging to allow for the on-going operation of the slipway.
Port Nelson, together with the Nelson City Council, has obtained funding from the Ministry for the Environment (MFE) to undertake
Remediation Planning (Phase Three) work to establish a preferred approach for remediation of the contaminated sediments. It is
hoped that once Phase Three is successfully completed funding from MFE for Site Remediation (Phase Four) will also be obtained.
Phase Three is scheduled to be completed in the 2013 financial year and at that stage Port Nelson hopes to able to quantify any liability
associated with the eventual remediation works.
2011
Port Nelson continues to have an obligation to Stage 3 property owners to provide technical advice, where requested, and to consider
providing financial assistance for mitigation works (50 percent of costs). The decision on whether to provide financial assistance will
be based on a recommendation made to Port Nelson by the Port Noise Liaison Committee. Port Nelson cannot currently quantify the
cost of this obligation at 30 June 2011. The Noise Variation within the Nelson City Resource Management Plan was notified with effect
on 14 July 2008. Port Nelson is required to make offers to either fully fund noise mitigation work or to purchase 11 closest properties
in the residential zone adjacent to the port. (These are houses that are exposed to night time Ldn from port generated noise of 65 dBa
or more). For the properties in the 55 to 59.9 dBa and 60 to 64.9 dBa areas, offers have been made by Port Nelson to owners in these
areas to cover 50 percent of the noise mitigation cost. There is no offer for the purchase of these properties required. For properties
in the 60 to 64.9 dBa area Port Nelson is required to approach all owners with this offer. For properties in the 55 to 59.9 dBa area the
owners are required to approach Port Nelson and seek approval for this. Offers will include 50 percent of the costs of building work,
any professional fees, building consents, preparation of drawings and project management.
The contingent asset associated with Unimar in 2010 and the vessel the Marsol Pride was not realised.
38

notes to the accounts
note 23: related party disclosure 2012 2011
$000 $000
Nelson City Council Services Provided by Port Nelson 45 12
Services Provided to Port Nelson 398 433
Accounts Payable by Port Nelson 12 8
Accounts Receivable by Port Nelson 3 2
*Dividends Paid by Port Nelson 6,100 2,050
Tasman District Council Services Provided by Port Nelson 1 1
Accounts Receivable by Port Nelson 1 -
*Dividends paid by Port Nelson 6,100 2,050
Nelmac Services Provided to Port Nelson 53 38
Accounts Payable by Port Nelson 3 2
Unimar Services Provided by Port Nelson 180 144
Accounts Receivable by Port Nelson 2 54
Nelmac - Nelmac is 100% owned by Nelson City Council and is therefore a related party.
Unimar Group - The Unimar Group is 44% owned by Port Nelson. Unimar has the following 100% owned subsidiaries, Maritime Services
Ltd, Calwell Slipway Nelson Ltd and Maritime and Industrial Ltd. Port Nelson invested in Unimar on the 23rd of December 2008.
All Related Parties - There were no NIL or nominal value transactions between Port Nelson and related parties (2011 NIL).
No inter-entity debt has been forgiven or written off (2011 NIL).
Directors - Mr A O Patterson is a director of Cold Storage Nelson Ltd that leases land from Port Nelson. The amount received from Cold
Storage Nelson Ltd was $448,033 for the year (2011 $438,557), and NIL was receivable at year end (2011 NIL). The amount paid to Cold
Storage Nelson Ltd was $NIL (2011 $425) for the year, and $NIL was payable at year end (2011 $NIL).
Key Management Personnel - Details of compensation paid to key management personnel and directors during the financial year:
2012 2011
$000 $000
Salaries and Other Short-Term Benefits 1,392 1,344
Total 1,392 1,344
notes
note 24: financial reporting by segments
Port Nelson operates in one industry and one geographical segment providing and managing port facilities, marine services, cargo
handling operations, and investment properties at the port of Nelson.
note 25: imputation credits
2012 2011
Imputation credits to shareholders $000 $000
CredITS AVAILABLE FOR FUTURE USE 14,449 16,335
note 26: events occurring after balance date
2012
Unimar declared a dividend for payment on 26 September 2012. Port Nelson will receive $487,172 fully imputed ($676,628 gross) in
relation to its share of Unimar. Apart from this, there are no events after balance date that requires adjustment or disclosure in the
financial statements.
2011
Unimar has entered into a contract to buy the vessel Marsol Pride (previously leased). On the same day (1 July 2011), Unimar entered
into an agreement to sell the vessel.
39

directory
Board of Directors
Nick Patterson, Chairman
Tim King
Paul Le Gros
Phil Lough, Deputy Chairman and Chairman Remuneration Committee
Bronwyn Monopoli
Peter Schuyt, Chairman Finance and Risk Committee
Secretary
Parke Pittar
Executive Officers
Martin Byrne, Chief Executive Officer
Digby Kynaston, Port Logistics Manager
Matt McDonald, Infrastructure Manager
Melisa Kappely, Employee Relations Manager
Parke Pittar, Chief Commercial Officer
Registered Office
10 Low Street, Port Nelson
PO Box 844, Nelson 7040 New Zealand
Tel. (03) 548 2099, Fax. (03) 546 9015
info@portnelson.co.nz
www.portnelson.co.nz
Auditors
Audit New Zealand, on behalf of the Auditor-General
Solicitors
Pitt & Moore, Barristers and Solicitors, PO Box 42, Nelson 7040
Simpson Grierson, Barristers and Solicitors, PO Box 2402, Wellington 6140
Bankers
Westpac Banking Corporation, PO Box 643, Nelson 7040
www.portnelson.co.nz