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Retrieving Data

Note 36: Related Party Transactions

Key management personnel

The key management personnel compensation (including Directors’ fees) is as follows:

GROUP

PARENT

2014

$000

2013

$000

2014

$000

2013

$000

Salaries and other short-term employee benefits

4,518

4,523

4,518

4,523

Share based payments

 

-

63

-

63

 

 

4,518

4,586

4,518

4,586

$870,000 of this amount was unpaid at 31 March 2014 (2013: $910,000).

All key management personnel participate in a cash settled, share based incentive scheme. This scheme was introduced in 2007 (refer to note 37).

Subsidiaries

Advances have been made to/from subsidiaries (refer to note 22) and are payable on demand. These advances are not expected to be repaid in the coming year. Advances to New Zealand based subsidiaries are interest free while interest is charged to overseas based subsidiaries at a market rate. The net advances as disclosed in note 22 include the balances due to/from subsidiaries in respect of the following transactions.

The Parent has a lease contract with its subsidiary Tararua Wind Power Limited for the use of the subsidiary company’s generation assets. This commitment cannot be quantified because it is dependent on subsidiary asset valuations and capital expenditure.

The Parent has an insurance contract with its subsidiary Trustpower Insurance Limited which is renewed annually.

The impact of transactions with subsidiaries on the profit of the Parent and Group is shown below.

GROUP

PARENT

2014

$000

2013

$000

2014

$000

2013

$000

Operating lease costs

-

-

(19,430)

(18,941)

Insurance costs

 

-

-

(2,826)

(2,685)

Interest revenue

 

-

-

3,689

2,425

Impact on profit before income tax

 

-

-

(18,567)

(19,201)

Shareholders

The Group is controlled by Infratil Limited (incorporated in New Zealand) which owns 51.0% of the Company’s voting shares. The Tauranga Energy Consumer Trust owns 33.2% and the residual balance of 15.8% is widely held.

A related entity of H.R.L. Morrison & Co Limited manages Infratil Limited and M Bogoievski, a Director of Trustpower Limited, is the Chief Executive of H.R.L. Morrison & Co Limited. Infratil Limited is the parent of Trustpower Limited and $14,000 (2013: $8,000) was paid to H.R.L. Morrison & Co Limited and related entities during the year for consultancy services. As at 31 March 2014 no balance was outstanding
(2013: nil).

Consultancy fees of $11,000 (2013: $7,000) were paid to Lumo Energy Pty Ltd which is a subsidiary of the Group’s ultimate parent. As at
31 March 2014 all of this amount was outstanding (2013: nil).

Directors

All Directors participate in a share purchase plan where the Directors purchase shares in the Company to the value of half of their annual Directors’ fees. During the year all Directors purchased their shares directly from the Company at the average market price for the preceding
20 business days from the treasury stock that the Company was holding. A total of 43,000 shares (2013: 36,000) were purchased for $298,000 (2013: $290,000) (see note 14).

Mr RH Aitken, a Director of Trustpower Limited, is the Executive Chairman of the engineering firm Beca Limited. $165,000 was paid to Beca Limited for engineering services (2013: $281,000). As at 31 March 2014 $3,000 of this amount was unpaid (2013: $50,000).

Mr RWH Farron, Chief Financial Officer and Company Secretary of Trustpower Limited, is a director of the engineering supplies firm BGH Group Limited and its New Zealand based subsidiaries. $18,000 has been charged by subsidiaries, Bay Engineers Supplies Limited and Hose Supplies New Zealand Limited (2013: $5,000). As at 31 March 2014 none of this amount was unpaid (2013: $1,000).

Other

Trustpower Limited owns 20.0% of the ordinary shares of Rangitata Diversion Race Management Limited (RDR) which owns and operates an irrigation canal in Canterbury. RDR’s operating and capital expenditure is funded by advances from its shareholders. In 2014 the Group advanced RDR nothing (2013: nil) and the total balance of the advance at 31 March 2014 was $1,884,000 (2013: $1,884,000). This balance is included in other investments in the statement of financial position.

Except as noted above, no transactions took place with related parties during the year. Other than interest free intercompany advances all transactions with related parties take place on an arms length basis. No related party debts were forgiven or written off during the year. Except as noted above there are no amounts outstanding at 31 March 2014 (2013: nil).