South Port NZ Ltd – 2018 Annual Report

2018 Annual Report
GROWING OUR
SERVICES
INVESTING FOR
OUR FUTURE
WWW.SOUTHPORT.CO.NZ
Island Harbour, PO Box 1,
Bluff 9842, New Zealand
 +64 3 212 8159
 reception@southport.co.nz
 South Port NZ

Financial Calendar Below
Company Profile and South Port Facts Opposite
Significant Events 04
Financial Results in Brief 05
Review of Operations 06
Business Improvement 10
Directors’ Profiles 16
Statutory Report of Directors 18
Statutory Disclosure in Relation to Shareholders 20
Corporate Governance Statement 21
Mediterranean Shipping Company – Service Overview 32
Infrastructure/Port Improvement 34
Health & Safety Achievements 36
Contents
Port Infrastructure 38
Auditors’ Report 40
Statement of Comprehensive Income/
Statement of Changes in Equity 43
Statement of Financial Position 44
Statement of Cash Flows 45
Notes to the Financial Statements 46
Financial and Operational Five Year Summary 65
Management Profiles 66
Glossary of Port and Shipping Terms 68
Directory 69
Southern Region Production/Cargo Locations 70
Financial Calendar
23 AUGUST 2018
2018 Full Year Profit Announcement
23 OCTOBER 2018
Proxies must be lodged by 11:00am
25 OCTOBER 2018
Annual Meeting – 11:00am
Venue: South Port Board Room
Island Harbour, Bluff
26 OCTOBER 2018
Close of Share Register for
Entitlement to Final Dividend
6 NOVEMBER 2018
Final Dividend Payment
11 FEBRUARY 2019
2018 Interim Profit Announcement
MARCH 2019
2019 Interim Dividend Payment
30 JUNE 2019
2019 Financial Year End
A record number of woodchips were handled across the wharf during the past 12 months.
02
SOUTH PORT ANNUAL REPORT 2018

TOTAL CARGO VOLUME THROUGH BLUFF
SET A FURTHER RECORD OF 3,445,000
TONNES (FY17 3,053,000 TONNES) DUE TO
STRONG GROWTH IN BULK CARGOES AND
A POSITIVE DEVELOPMENT IN SHIPPING LINE
CONNECTIVITY.
“
“
BULK FORESTRY CARGO (LOGS AND
WOODCHIPS) FOR THE FIRST TIME IN THE
PORT’S HISTORY, HAVE ECLIPSED THE ONE
MILLION TONNE MARK AND IS NOW THE
LARGEST CONTRIBUTOR TO THE PORT’S
VOLUME AND PROFIT.
“
“

2017/18 Significant Events
öNPAT of $9.66 million (2017 -
$8.45 million), a 14% increase
on last year and a record result
öTotal cargo of 3.44 million
tonnes (2017 3.05 million
tonnes) up 13% to another
record volume
öBulk forestry cargoes exceeded
1 million tonne mark for the
first time
öLog exports were 671,000
tonnes a record volume and a
20% increase on the prior year
throughput
öA record volume of woodchips
exported of 343,000 tonnes
representing a 21% increase on
the prior year throughput
öA dry summer saw a record
volume of stock food imported
through the Port of
212,000 tonnes
öTotal container throughput of
39,000 20–foot equivalent 1%
down on last year’s volumes
(includes empty and full
containers)
öA record throughput of full
containers at the Port of
24,200 20–foot equivalent a
4% increase on the previous
year
öA full year dividend of
26.0 cents maintained
(2017 – 26.0 cents)
öA $2.7 million paving
upgrade to a log storage
area completed that provides
improved efficiencies, health
and safety outcomes and
environmental impacts
öThe completion of the
Common User Safety Protocol
(CUSP) which outlines the
duty of care for all parties
on environmental, health
and safety rules that apply
when working in South Port
operational areas
öAnnouncement by New
Zealand’s Aluminium Smelter
(NZAS) that they are restarting
Potline 4.
öMSC restructure of the
Capricorn Container Service
providing additional capacity
for Southern region exporters
and importers
öHigher R&M expenditure
on the Island Harbour
infrastructure as previously
signalled
öThe Intermodal Freight Centre
performing to expectations and
providing a competitive option
at Invercargill for importers and
exporters
öIncreased frequency of health
and safety forums being
undertaken with port users
providing an excellent means
of communication
öAnnouncement that the
Foreshore Road Cold Store
Lease Agreement is not to be
renewed with all customers
being consolidated at the
Island Harbour facility
öIsland Harbour Cold Stores
load-out and load-in
infrastructure being upgraded
to improve handling
efficiencies
öA blast freezer being installed
adding to the Island Harbour
Cold Store service offerings
öSuccessful insurance renewal in
a tight insurance market after
recent earthquakes in
New Zealand and weather
events to offshore port
companies
öSignificant maintenance work
occurring in the next financial
year for the Port tug, Hauroko
öRoyal Dutch Shell sells their
remaining New Zealand
business to OMV (Austrian oil
and gas giant), including their
share in the GSB Exploration
Permit 50119
öMataura Valley Milk has
commissioned its purpose-
built nutrition plant at McNab
near Gore
öSouth Port Directors involved
in the Southland Regional
Development Strategy (SoRDS)
Aquaculture Team
Ultimate
Goal
SOUTH PORT WILL BE THE BEST
CARGO DISTRIBUTION OPTION FOR ALL
SOUTHERN BUSINESSES THROUGH THE
APPLICATION OF QUALITY PROCESSES
AND INNOVATION.
öTo increase customer usage
of South Port and improve
customer satisfaction.
öTo make the best use of South
Port’s resources and develop
the assets of Bluff Harbour.
öTo improve returns to
shareholders and create
positive value.
öTo provide a safe workplace
and respect the environment.
öTo achieve differentiation
in the market and gain
competitive advantage
over other operators in the
transport sector.
öTo assist the establishment of
new industry and the growth
of existing businesses in the
southern region.
Key Objectives
South Port New Zealand Ltd (South
Port) is the southernmost commercial
port in New Zealand, located at Bluff
and operating on a year round, 24
hour basis. It is situated in the rich
productive province of Southland,
which is responsible for generating a
sizeable proportion of New Zealand’s
total exports by value. The region’s
major cargo producing sites are
situated within 30 to 80 kms of the
Port.
The Port of Bluff has been operating
since 1877, while the Company was
formed in 1988 having taken over
the assets and liabilities of the former
Southland Harbour Board.
South Port was listed on the NZ Stock
Exchange (NZX) in 1994 and has
Environment Southland, the region’s
local government environmental
agency, as its 66% majority
shareholder.
South Port established its off-port
Intermodal Freight Centre (IFC) in July
2016. Strategically located adjacent
to the KiwiRail railhead in Invercargill,
the IFC allows importers and
exporters in the Southland and Otago
regions to distribute their products in
a timely and efficient manner.
Company Profile
öOwns and manages assets which have a
book value of $54 million
öDirectly utilises more than 120 full time
equivalent staff
öIs the only Southland based company listed
on NZX – market capitalisation as at 30 June
2018 equated to $184 million
öHandles in excess of 3.4 million tonnes of
cargo in a normal trading year
öOffers full container, break bulk and bulk
cargo capability and services the following
main cargoes:
öimport – alumina, petroleum products,
fertiliser, acid, stock food and cement
öexport – aluminium, timber, logs, dairy,
meat by-products, fish and woodchips
öHas split its land-based operating resource
into four main divisions – dairy warehousing,
containers, cool and cold storage and
general cargo
öUndertakes its primary port operation on a
40 ha. man-made Island Harbour situated
at Bluff
öOperates a separate dedicated fuel berth
at Bluff Town Wharf plus provides the Tiwai
Wharf facility to NZAS under a long term
licence
öOwns and operates an off-port container
packing/unpacking facility adjacent to the
railhead at Mersey Street, Invercargill. The
8,000 m
2
site houses a 4,000 m
2
customs
controlled and MPI transitional facility
öServices vessels carrying approximately
1 million tonnes of cargo destined for
movement across the Tiwai Wharf each year,
of which two thirds is raw material imports
while one third is finished aluminium
product
öHas approximately 3 ha. of on-port land
available for further port development or
industry establishment
South Port Facts
“
”
03
SOUTH PORT ANNUAL REPORT 2018
04
SOUTH PORT ANNUAL REPORT 2018

Financial Results in Brief
In Thousands of New Zealand Dollars 2018 2017
Revenue $41,017 $36,997
Surplus after tax $9,658 $8,448
Cashflow from operating activities $12,342 $12,068
Total assets $54,110 $52,555
Total equity $40,060 $37,223
Shareholders’ equity ratio 74.0% 70.8%
Earnings per share 36.8c 32.2c
Dividends declared per share 26.0c 26.0c
Net asset backing per share $1.53 $1.42
Return on shareholders’ funds 25.0% 23.2%
Cargo throughput (000’s tonnes) 3,445 3,053
SURPLUS AFTER TAXOPERATING CASH FLOW
RETURN ON EQUITYRETURN ON ASSETS
EQUITY RATIO
DIVIDENDS PER SHARE
2016$8.7m
2014$6.7m
2015$7.7m
2017$8.4m
2016$11.9m
2014$8.8m
2015$12.0m
2017$12.1m
201626.00c
201422.00c
201524.00c
201726.00c
201667.1%
201468.7%
201570.7%
201770.8%
201625.3%
201421.6%
201523.9%
201723.2%
201625.4%
201422.8%
201524.8%
201723.5%
2018$9.6m
201874.0%
201825.0%
201826.3%
201826.00c
2018$12.3m
05
SOUTH PORT ANNUAL REPORT 2018

Review of Operations
OVERVIEW AND CARGO
The reported after-tax profit of $9.66
million (2017 - $8.45 million) is a 14%
increase on last year which is an excellent
result for the Port, underpinned by a 13%
increase in cargo flows. Total cargo was
3,445,000 tonnes (2017 3,053,000 tonnes)
representing another record volume and a
significant uplift from previous years.
The mainstay of our business continues to
be bulk cargoes representing 85% of all
volumes handled across the Port wharves.
Bulk forestry cargo (logs and woodchips)
for the first time in the Port’s history, have
eclipsed the one million tonne mark and
is now the largest contributor to the Port’s
volume and profit. Favourable market
conditions in both China and India have
supported the increase in log trade and
the export of eucalyptus woodchip into
Japan has remained buoyant.
Due to a particularly dry summer and poor
pasture growth, the import of stock food
increased this past year by 80% on the
previous period. Stock food has been
imported into the region for a number of
years, primarily as supplementary feed for
the dairy industry. Specialised products
are typically shipped in containers with
bulk coming in the form of molasses and
palm kernel.
In March 2018, the Mediterranean
Shipping Company (MSC) who call at
South Port on a weekly basis with their
Capricorn Container Service, announced
that they would be enhancing their South-
East Asia – Oceania network. This entailed
splitting the current service into two
separate loops, one to cover the South
Island and the other the North Island. This
change greatly improves the service out
of Bluff with increased capacity to load/
discharge more cargo and provides
faster transit times to markets worldwide.
These changes have already delivered an
increase in containerised cargoes handled
through the Port.
This year South Port, MSC and customers
also celebrated the 10th anniversary of
the Capricorn Container Service first call
into Bluff (MSC Hobart arriving on 28 May
2008). The Capricorn call has been an
integral part of the service offerings into
the Port during this time and provides a
much needed competitive option to the
importers and exporters of the region.
New Zealand’s Aluminium Smelter (NZAS)
is an important manufacturing business for
the Southland region and export earner
for the New Zealand economy. Although
paying extremely high transmission costs,
in recent times NZAS has delivered record
export volumes and been profitable in
Rex Chapman, Chairman and Nigel Gear, Chief Executive
challenging trading conditions. It was
therefore especially pleasing when NZAS
recently announced the decision to restart
its fourth potline. This was made possible
by securing a power contract for an
additional 50 MW until 2022 with potential
to renew the contract past this date. This is
an exciting time for NZAS, South Port and
the region with the announcement of 32
new jobs and the increase in production
of an additional 85 tonnes of metal per day
or around 31,000 tonnes per annum. It is
expected to take six months to get Line 4
up and running.
The Intermodal Freight Centre (IFC) has
been operating successfully for two years,
based at Mersey Street and adjacent
to the KiwiRail container transfer site at
Invercargill. The IFC was set up initially to
service the containerised import cargo
flows coming into the region, moving
containers from port by rail and then
distributing unpacked goods to customers
by road. The ability to deliver imported
containers into Invercargill by rail has been
a great success, saving road transporters
the additional time of the journey to/
from Bluff to collect their cargo. While
imports have previously been the focus,
this year there will be greater emphasis
on balancing out the trade at this site and
growing the export base through the
facility.
06
SOUTH PORT ANNUAL REPORT 2018

CRANE PRODUCTIVITY
31.5
(Gross container
moves per hour)
39,100
(20 foot container equivalents)
CONTAINERS PACKED/
UNPACKED
9,900
SHIP CALLS
319
431,000
Tonnes
2,719,000
Tonnes
295,000
Tonnes
NUMBER OF
CONTAINERS
BREAK BULK
BULK
CONTAINERS
BREAKDOWN OF CARGO
CRANE PRODUCTIVITY
(Gross container moves per hour)
1: Significant increase reflects the introduction of the
two mobile crane operating model part way through
the financial year.
201630.6
201417.1
201527.0
201732.8
201831.5
1
CONTAINERS
(Packed/Unpacked)
20169,600
20147,800
20158,400
20179,900
20189,900
316
312
SHIP CALLS
2016
2014
2015
2017
2018319
317
301
CONTAINERS
(Tonnage)
2016390,000
2014351,000
2015399,000
2017415,000
2018431,000
BULK
(Tonnage)
2016
2,428,000
2014
2,125,000
2015
2,225,000
20172,371,000
20182,719,000
(Tonnage)
BREAK BULK
2016
230,000
2014
244,000
2015
237,000
2017267,000
2018295,000
NUMBER OF CONTAINERS
(20 foot container equivalents)
201635,100
201432,700
201535,800
201739,300
39,1002018
BREAKDOWN OF CARGO
07
SOUTH PORT ANNUAL REPORT 2018

COMPARATIVE CARGO
BREAKDOWN 2018
EXPORTS46%
24%
NZAS Imports
6%
Stock Food
11%
Fertiliser
2%
Sulphuric Acid
8%
Petroleum
3%
Other Imports
31%
Forestry
4%
Agriculture
2%
Other Exports
9%
NZAS Exports
IMPORTS
54%
COMPARATIVE CARGO
BREAKDOWN 2017
EXPORTS46%
27%
NZAS Imports
4%
Stock Food
11%
Fertiliser
2%
Sulphuric Acid
8%
Petroleum
2%
Other Imports
29%
Forestry
5%
Agriculture
2%
Other Exports
10%
NZAS Exports
IMPORTS
54%
Imported fertiliser volumes remained strong over the past 12 months.
08
SOUTH PORT ANNUAL REPORT 2018

INFRASTRUCTURE TO
SUPPORT CARGO FLOWS
The development and refurbishment of
new and existing infrastructure on the
Island Harbour is important to encourage
new cargo volumes across the wharves
and to improve the quality of the existing
operations. Land around ports in New
Zealand is becoming a scarce resource
and it is important that any decisions on
development are made with an eye to the
future.
Log Storage
During the past year the paving of a
15,000 m
2
log storage area was completed
on the Island Harbour. This project
involved extensive consultation with our
log export customer base and delivers
quality storage infrastructure. There are
a number of benefits derived from this
development including improvements to
safe working conditions for mobile plant
operators, the separation of log truck
discharge activity from general traffic on
the Island Harbour, a cleaner work surface
and an improved environmental outcome
from the introduction of a filter system in
the drainage network.
Fuel Berth
Design specifications have been finalised
for the $5.0 million upgrade to the Town
Wharf fuel import berth. Construction
is due to begin in February 2019 and is
expected to take 12 months from start to
completion. This significant project will
future proof the wharf infrastructure for the
next 50 years and allow for the continued
efficient distribution of fuel imports into
the Southland region and Wakatipu Basin.
Cold Stores
Over the last five years South Port has
operated two cold storage facilities,
one owned on the Island Harbour and a
leased store on the Foreshore Road in the
Bluff Township. The decision was made
in March 2018 not to renew the Foreshore
Road cold store lease and to consolidate
the two operations on the Island Harbour.
To accommodate the increased business
activity on the Island Harbour $2.2 million is
being spent on increasing the operational
efficiency of the cold stores. This includes
the addition of a new blast freezer, an
operation that has traditionally occurred
off site in the past.
Maintenance
It is 58 years since the completion of the
Island Harbour in 1960. As has been
signalled in previous Annual Reports, there
are a number of assets that are now at or
near the end of their physical useful life.
South Port has an Asset Management Plan
that details programmed maintenance
spend on the Island Harbour infrastructure
for a 20 year period. To extend the life of
a number of these assets, maintenance
expenditure has been lifted and will
continue to increase over the next five
years.
MARINE PLANT UPGRADE
Marine plant such as our harbour tugs
periodically have to be lifted out of the
water and placed on hardstand for survey,
engine maintenance and upgrades. This
year the South Port tug Hauroko was
docked on the Company’s syncrolift facility
in July. The planned work was completed
by a number of local engineering firms
and includes the removal and servicing of
a Voith unit (specialised marine propulsion
system for harbour tugs) as well as an
overhaul of one of the main engines. To
allow the marine activity to continue, a
replacement tug was hired from Port
of Marlborough for the period of the
docking.
INSURANCE MARKET
The insurance market continues to be
tight and a considerable amount of time
was spent negotiating an acceptable
agreement, especially for material damage
cover. Recent earthquake damage to both
Lyttelton Port Company and CentrePort in
addition to weather events at offshore port
companies has made these negotiations
challenging.
However, South Port has recently been
successful in renewing its insurance cover,
including material damage up to
$250 million.
Insurance companies are now raising
the issue of whether ports need to carry
out additional strengthening work on
critical assets in coming years to maintain
insurance cover. This could have
significant cost implications for the Port
and the Leadership team has started to
investigate these requirements.
Logs being prepared for export.
09
SOUTH PORT ANNUAL REPORT 2018

BUSINESS IMPROVEMENT
Health & Safety (H&S)
The Company continually strives to
ensure systems are in place to safeguard
employees, contractors, suppliers, port
users and customers upon entering the
port environment. One such system that
has recently been adopted is the Common
User Safety Protocol (CUSP).
The CUSP applies to all Persons
Conducting a Business or Undertaking
(PCBUs) and workers that enter South
Port’s operational areas and common
users’ sites to perform work related
duties. The document outlines the
collective responsibility and duty of care
for all parties on the health, safety and
environmental rules and requirements that
apply when working in shared South Port
operational areas.
Effective engagement is a crucial aspect
to obtain buy-in from PCBUs and workers
entering the Port. This year the Company
has held a number of on-Port meetings to
encourage communication and to share
ideas. These include:
öContractors Health and Safety Forum
öQuarterly Port Users Forum
öSyncrolift Users Forum
öLog Hoist Forum
These meetings provide an effective
forum to discuss not only health and safety
but all other issues that we deal with on a
day to day basis on the Port.
A PCBU project has been underway
for 12 months. The project involves
identifying all third party interactions,
classifying contractual relationships and
documenting health and safety obligations
of the respective parties. This is a huge
undertaking and it is pleasing that a
draft procedural document has been
completed and is now under review.
Once the review is finalised, the next step
is to formalise contractual obligations for
each PCBU entering the Port.
Environment
There has been much activity in the
environmental sector both nationally and
internationally.
New Zealand has recently formalised its
first Determined Contribution under the
Paris Agreement to reduce emissions
by 30 percent below 2005 levels by
2030. In April this year the International
Maritime Organisation (IMO) also officially
committed to reducing international
shipping Greenhouse Gas (GHG)
emissions by at least 50% by 2050.
On 28 April, the Productivity Commission
released a draft ‘Low-emissions economy’
report which includes recommendations
such as introducing mandatory GHG
emissions reporting and financial
disclosures about climate risk for all
sectors.
South Port will be taking a watching
brief to determine the outcome
of the Productivity Commission’s
recommendations in the coming months,
and will continue to take measures
ensuring that any investment decision
made has the potential impact on the
environment as a key consideration.
Environmental Sustainability
Some initiatives that South Port has
implemented during the past year to
minimise the Company’s impact on the
environment and reduce our carbon
emissions include:
öPutting new antifoul on the hulls of
our tugs and pilot vessel resulting in
reduced fuel usage;
öInstalling a new compressor in our
cold store engine room to reduce our
electricity consumption;
öInstalling LED lighting in various
locations around the port and in our
warehouses (with further work to
come);
öRecycling the pallet wrap used in our
warehousing operations.
In the near future South Port will establish
benchmarks for our annual environmental
emissions performance (baseline carbon
foot printing) and voluntarily report our
greenhouse gas emissions.
Ultimately this will lead on to a South Port
specific Carbon Reduction Plan being
produced.
MSC Banu departing Bluff after exchanging containers.
10
SOUTH PORT ANNUAL REPORT 2018

Port Achieving Combined
Excellence (PACE)
The PACE programme continues to
deliver efficiency gains in the work place
with staff playing an important role in
the improvements in operations. Many
aspects of the PACE programme are now
ingrained in the way we do business. One
of the more pleasing aspects developing,
is the workforce identifying “opportunities
for improvement” (OFIs) and proactively
addressing these opportunities, rather
than having the PACE Committee provide
direction.
PEOPLE
South Port currently has 100 permanent,
21 fixed-term and can have up to 20 casual
employees working during the peak of
the agricultural season. The majority of the
Port’s operational employees work in the
warehousing division, container terminal,
marine department and the IFC.
In the coming year a staff engagement
survey will be undertaken to gain
feedback from all levels within the
organisation on how they perceive the
Company is performing across a number
of areas. The results of this survey will
then filter into a values exercise to be
carried out later in the year (involving all
employees up to and including the Board).
These core values will be used to help
support our vision and shape the culture
of the Company into the future.
The subject of diversity is becoming more
topical in the workplace especially with the
increase of immigrants into the provincial
sectors of New Zealand.
South Port recognises that building a
diverse and inclusive workforce provides
significant opportunities to leverage
engagement, innovation, productivity
and improved service to our customers.
While the “best person for the job” will
always take precedence, the Port will be
developing measureable objectives over
the coming 12 months to track diversity
within each sector of our operation.
The Company would like to thank all staff
for the considerable time and effort spent
at work to ensure the business functions
safely, efficiently and to a high standard
over what has been a very busy year.
CORPORATE SOCIAL
RESPONSIBILITY (CSR)
South Port has begun the process
of integrating CSR into our business
model. CSR is a business approach that
contributes to sustainable development
by delivering economic, social and
environmental benefits for all stakeholders.
Implementation of more CSR measures
will occur in the coming 12 months and
be reported on in our June 2019 Annual
Report. This Annual Report covers some
of the work we are already undertaking in
this area including commentary on H&S
and the environment, as well as a section
on community, regional and national
partnerships the Company is involved in.
FINANCIAL
2018 Financial Result (comparatives shown
in brackets)
öRevenue from port and warehousing
operations equated to $40.7 million
($36.9 million), an increase of 10%.
öAs a result of higher volumes through
the port, operating profit before
financing costs and tax increased by
13% to $13.8 million ($12.3 million).
öNet financing costs for the Group were
$579,000 ($449,000).
öThe Group’s overall result was a surplus
of $9.66 million ($8.45 million), which
represented a 14% increase on the
previous year.
öBased on the reported result, earnings
per share were 36.8 cents (32.2 cents
per share).
öTotal equity is $40.1 million ($37.2
million) after allowing for dividend
payments during the period of
$6.82 million ($6.82 million).
öGroup equity includes issued capital of
$9.4 million ($9.4 million), made up of
26,234,898 ordinary shares.
öTotal Group assets at $54.1 million
($52.6 million).
öNet tangible asset backing per share
equates to $1.53 ($1.42 per share).
öCurrent assets amount to $6.6 million
($6.0 million), with current liabilities at
$6.1 million ($5.0 million). This creates a
net working capital position of positive
$0.5 million versus positive $1.0 million
last year.
öTerm liabilities total $7.9 million
($10.4 million).
öProperty, Plant and Equipment was at
$47.5 million ($46.6 million).
11
SOUTH PORT ANNUAL REPORT 2018

$4.60
$4.40
$5.00
$4.80
$5.40
$5.20
$5.60
$6.00
$5.80
$6.20
$6.40
$6.80
$6.60
$7.00
$7.20
$4.00
$4.20
$3.80
$3.60
$3.40
20182014201520162017
From 1 July 2014 to 30 June 2018
SHARE PRICE
DIVIDENDS
As shareholders are aware, the Directors
have adopted an ongoing policy of
assessing South Port’s dividend flow
after taking into consideration both its
Free Cash Flows (FCF) and its reported
profits. For the purpose of this policy, FCF
is interpreted as being annual operating
cash flow less net maintenance capital
expenditure in the same period.
In establishing the dividend payment
level, Directors took into account the
Company’s annual profit movement
plus future maintenance requirements
that are expected to impact profitability.
Accordingly, the Board elected to pay a
consistent dividend of 18.5 cents. This
translates to a full year dividend of 26.0
cents (2017 – 26.0 cents).
Full imputation credits will be attached to
all distributions. The dividend payment
represents a gross return of 5.2% (net
3.7%), based on a share price of $7.00 as at
30 June 2018. A dividend pay-out ratio of
71% results for 2018 (using reported NPAT)
and equates to 61% of FCF.
BOARD COMPOSITION
Mr Richard Christie and Mr Thomas Foggo
retire this year by rotation, and being
eligible, offer themselves for re-election.
The Company has received no other valid
Director nominations.
LEADERSHIP TEAM
Following the appointment of Nigel Gear
to the Chief Executive position in 2017,
three new Managers were promoted to
the Leadership team; Hayden Mikkelsen
– Container Manager, Helen Young –
Human Resources Manager and Jamie
May – Business Development Manager.
Also, Geoff Finnerty was appointed Port
General Manager and to the role of Acting
Chief Executive when required.
REGIONAL PROJECTS
UPDATE
Mataura Valley Milk (MVM)
Located at McNab near Gore, the MVM
purpose-built nutrition plant, one of the
world’s most technologically advanced,
is currently undergoing production
testing. MVM (major shareholder China
Animal Husbandry Group) has a vision
to be one of the world’s best businesses
in the manufacturing and production of
premium nutritional powders and creams
for high-end markets. South Port will
continue to work with MVM in the coming
months to determine whether we can
provide an efficient and cost competitive
distribution channel for their import and
export cargoes.
Great South Basin (GSB)
The recent announcement by the coalition
government to ban future offshore oil and
gas exploration will have a negative impact
on international oil companies when
making future investment decisions in New
Zealand (this decision does not impact
awarded permits).
12
SOUTH PORT ANNUAL REPORT 2018

Royal Dutch Shell recently made the
decision to sell their remaining New
Zealand business to OMV (Austrian oil and
gas giant), including their share in the GSB
Exploration Permit 50119.
South Port will look to establish
communication channels with OMV to
determine whether the Port can be of any
assistance in the coming years.
OUTLOOK
At the time of writing this Report,
international markets are in a state of flux
with the United States of America (USA)
and China embarking on a tariff war that
has no immediate end in sight. The USA
appears however to be softening their
stance on both North American and
European trading partners which could
eventually lead to a truce with China.
Brexit continues to be the major shake-up
for the European Union (EU) with Britain
due to leave the EU by March 2019.
Locally, the New Zealand government
continues to work on free trade
agreements including the Comprehensive
and Progressive Agreement for Trans-
Pacific Partnership (CPTPP) and a number
of other agreements that aim to improve
our exporters’ access to international
markets and a more balanced playing field
with Australia, especially into markets such
as Japan.
Trade forecasts for the Port remain steady
with forestry exporters still predicting
healthy export market conditions in China,
India and Japan. The dairy industry has
increased their forecasted farm-gate milk
price for the coming season while sheep
and beef prices remain strong. This bodes
well for agricultural inputs that are shipped
into the region annually such as fertiliser,
stock food and fuels.
It is expected that increased expenditure
this year will continue to be a factor
that will have a bearing on profitability.
Increased infrastructure maintenance
activity (as signalled over the past couple
of years), the docking of the Port tug,
Hauroko, and insurance renewals will all
have an impact in the next financial year.
Based on all known factors at the date of
compiling this Report, South Port estimates
that earnings in the next financial year
will likely be approximately 10% lower.
Notwithstanding this lower earnings profile
and in the absence of any unforeseen
circumstances, the Directors will be
endeavouring to maintain the current level
of dividend payment.
REX CHAPMAN
Chairman
NIGEL GEAR
Chief Executive
HISTORICAL TRADE FIGURES 1960-2018
1
2
1 – 1993 9 month period due to change in financial year end
2 – 2009 drop in tonnage due to 30% decrease in NZAS throughput attributable to a pot-line outage

196519701975198019851990200020052010
3,000,000
2,500,000
2,000,000
1,500,000
1,000,000
500,000
0
2018
3,500,000
(tonnes)
196019952015
13
SOUTH PORT ANNUAL REPORT 2018

Community, Regional and
National Partnerships
Rex Chapman (left)
and Nigel Gear (right) presenting
scholarship cheques to the 2018 recipients,
Maria Sutherland and Katarina Coote
COMMUNITY AND
REGIONAL ASSISTANCE
Sponsorship of sporting, cultural and
community groups is part of a long-
term commitment to support the local
community and region in which South
Port operates. The Company also
supports employees that give up their
valuable time to work in the volunteer
fire fighting and ambulance services
which are crucial to the local Bluff
community.
Organisations that received
sponsorship assistance over recent
financial years include:
öBadminton Southland
öBluff Bowling Club
öBluff Hill / Motupōhue Environment
Trust
öBluff Kindergarten
öBluff Netball Club
öBluff Oyster Festival
öBluff Promotions
öBluff Rugby Club
öBluff Schools
öBluff Yacht Club
öBluff Volunteer Fire Brigade
öBurt Munro Challenge (Bluff Stage)
öCoastguard Bluff
öGraeme Dingle Foundation
(Kiwi Can at Bluff School)
öHospice Southland
öInvercargill Harness Racing Club
(Bluff Race Day)
öInvercargill Lions Club
öPolice Managers Guild Trust
öPort Softball Club
öQueens Park Golf Club
öRugby Southland
öSt John Ambulance Service Bluff
öSouthland Cancer Society
öSouthland Cricket Association
öSouthland Football
öSouthland Sharks
öSouthland Spirit of a Nation
öTe Ara O Kiwa Sea Scouts Bluff
öTour of Southland (Bluff Stage)
COMMUNITY SCHOLARSHIP
Maria Sutherland – Maria finished
High School at Verdon College at the
end of 2017 and has chosen to study
a Bachelor of Visual Arts at Otago
Polytechnic. She has always been the
creative type and a career in the arts is
what she is passionate about pursuing.
Ultimately, Maria would like to become
an art teacher, so this will require further
study at the Otago University College
of Education.
Maria has participated in both sporting
and cultural activities, including
coaching and playing netball, rowing,
jazz band, choir, played lead roles in
school productions, has completed
her Bronze Duke of Edinburgh Service
Award and was an active member of
the Te Ara O Kiwa Sea Scouts.
Maria is naturally very talented and
there is no doubt that with her
proven academic ability, drive and
determination her well thought out
goals will be realised.
STAFF SCHOLARSHIP
Katarina Coote – Katarina graduated
from Southland Girls’ High School in
2014 and has been attending University
of Otago, Dunedin undertaking a
Bachelor of Law. She is the daughter of
one of South Port’s Pilots, Bob Coote.
She has already completed two years of
a four year degree which will set her in
good stead towards her chosen career
path.
Katarina is a very motivated person
who continually strives to better herself
and has demonstrated this through
her studies, on the netball court and
touch rugby field. Her other interests
include the performing arts, amnesty
international and she is a member of
the Students Against Dangerous Driving
(SADD) Committee.
Katarina is a genuine, positive,
respectful and determined young
woman and it is these qualities which
will enable her to achieve every goal
she sets herself.
14
SOUTH PORT ANNUAL REPORT 2018

South Port is proud to be
associated with the Bluff Hill /
Motupōhue Environment Trust. The
Trust is currently in the planning
stages of clearing more trap lines
on the border of the farmland and
the protected forest so when the
traps are ready, they will be the
first line of defence. South Port’s
contribution was 28 new traps
for the project.
Courtney Forde (South Port Marketing
Analyst) in the foreground with members
of the Bluff Hill / Motupōhue
Environment Trust.
The Company has had a long
standing relationship with the
Bluff Rugby Club. Being the
primary sponsor of the club
gives South Port a real feel
of community belonging at
grass roots level. A number
of the work force is actively
involved in the playing and
administration of the club.
From left: Geoff Finnerty (Port
General Manager) and Bluff Rugby
Club President, Shane Pearsey.
In recent times South Port has
become involved in supporting
the Southland Sharks basketball
team. This contribution means
staff are given the opportunity
to attend each home game
via random draw, as well as the
ability to invite customers to games
courtside.
From left: Judd Flavell (Sharks Coach),
Frank O’Boyle (South Port Infrastructure
Manager) and Captain Reuben Te Rangi
courtside at ILT Stadium Southland.
The New Zealand Port industry is a
close knit group and when disasters
like the Lyttelton earthquakes strike
it results in communities rallying
around each other. As such the
commonalities between Bluff
and Lyttelton meant it just
‘made sense’ to be involved in
a community project like the
redevelopment of the
Skate Park.
South Port Business Development
Manager Jamie May, Marketing
Analyst Courtney Forde and Deputy
Mayor of Christchurch Andrew Turner
accepting the donation on behalf of
the Lyttelton Skate Park.
15
SOUTH PORT ANNUAL REPORT 2018

Directors’ Profiles
PHILIP WADE
CORY-WRIGHT
REX THOMAS
CHAPMAN
LLB, Chairman, CMInstD
Mr Chapman is a Senior Partner in
Southland/Queenstown Law Firm
Cruickshank Pryde based in Invercargill.
He has been in legal practice in Invercargill
for 37 years. Mr Chapman’s practice
covers a wide range of legal services
including commercial and company law,
litigation, dispute resolution and resource
management. He is also a member of the
Southland Aquaculture Working Group
which is investigating and promoting new
water space for aquaculture in Southland.
BCA, LLB (Hons), CFInstD
Mr Cory-Wright is a Company Director and
a Strategic Adviser based in Auckland. He
is inaugural Chairman of Papa Rererangi
i Puketapu (New Plymouth Airport) and a
Director of the Local Government Funding
Agency. Mr Cory-Wright was previously
a member of the Local Government
Infrastructure Expert Advisory Group. He
has specialised in infrastructure businesses
and recent roles include being acting
Chief Financial Officer of Restaurant
Brands, and an Adviser to Kordia, Ballance
Agri-Nutrients, Auckland Airport, ACC and
Higgins Group Holdings.
MSc (Hons), CFInstD, CRSNZ
Mr Christie is a Company Director based
in Wellington. He is currently Chairman
of Service IQ, ikeGPS and independent
Chairman of NeSI. He is a Director
of powerHouse Ventures Ltd, Solnet
Solutions Ltd and he is a Trustee of the
Victoria University Foundation. Prior to
becoming a professional Director, Mr
Christie held a number of government
appointments and was a Chief Executive
of a number of companies in the private
sector. In 2011 he was made a Companion
of the Royal Society of New Zealand.
RICHARD
(RICK) GORDON
MAXWELL
CHRISTIE
16
SOUTH PORT ANNUAL REPORT 2018

Mr Foggo moved to semi-retirement from
Sanford Limited in late 2017. After 39 years
in Senior Management positions in the
seafood industry and holding a number of
governance positions, his future focus is to
concentrate on professional governance
opportunities. Mr Foggo is also Chairman
of Invercargill Airport.
THOMAS MCCUISH
FOGGO
BCom, CA, MInstD
Mr McClean is a practising Chartered
Accountant in Southland. He is a Principal
in Invercargill accounting firm Malloch
McClean Ltd, holds a Public Practice
Certificate with Chartered Accountants
Australia & New Zealand and is a Justice
of the Peace. Mr McClean has provided
business advice to a number of Southland
rural and urban businesses for more than
30 years.
JEREMY JAMES
M
C
CLEAN
BAgSci, CMInstD
Mrs Kearney holds a degree in Agricultural
Science, majoring in Farm Business
Management and Dairy Science. She
holds a Masters of Professional Studies
having completed her Masters’ thesis on
Governance in 2013 and is a Justice of
the Peace.
Mrs Kearney is Chairperson of Sport
Otago, the Waitaki Safer Community
Trust and former Director and Chair of
Network Waitaki Ltd. Mrs Kearney was the
winner of the Institute of Directors Otago
Branch Aspiring Director Award in 2014.
In recognition of this award Mrs Kearney
acted as an observer director to the
Dunedin City Holdings subsidiary
company Taieri Gorge Railway Ltd
during 2015.
CLARE MARGARET
KEARNEY
17
SOUTH PORT ANNUAL REPORT 2018

PRINCIPAL ACTIVITIES
The Company is primarily engaged in the
commercial operation of the Port of Bluff.
There has been no significant change
in the nature of the Company’s business
during the year.
ACCOUNTING PERIOD
The financial statements are for the
12 month period from 1 July 2017 to
30 June 2018.
RESULTS
The Company recorded a surplus for the
period of $9,658,000.
DISCLOSURE OF SHARE
DEALING BY DIRECTORS
Directors acquired no additional equity
securities in the Company since the date of
the last Annual Meeting.
DIVIDEND
The Directors have declared an ordinary
dividend of $6,821,000 for the period
ended 30 June 2018 including the final
dividend amount of $4,854,000 payable in
November 2018.
DIRECTORS’ AND OFFICERS’
LIABILITY INSURANCE
The Company has arranged Directors’
and Officers’ Liability Insurance with Vero
Liability Insurance Limited. This cover
insures Directors against liabilities to other
parties that may arise from their positions
as Directors. The insurance does not cover
liabilities arising from criminal actions.
REMUNERATION OF
DIRECTORS
Directors’ remuneration for the 12 month
period ended 30 June 2018 was as
follows:
No other benefits have been provided
by the Company to a Director or in any
other capacity. No loans have been made
by the Company to a Director nor has the
Company guaranteed any debts incurred
by a Director.
DIRECTORS’ SHAREHOLDING
There is currently no beneficial
shareholding held by Directors.
REMUNERATION OF
EMPLOYEES
Section 211(1)(g) of the New Zealand
Companies Act 1993 requires disclosure
of remuneration and other benefits,
including redundancy and other payments
made on termination of employment,
in excess of $100,000 per year, paid
in respect of the current year by the
Company to any employees who are not
Directors of the Company.
Statutory Report of Directors
THE DIRECTORS HAVE PLEASURE IN SUBMITTING THEIR 2018
REPORT AND FINANCIAL STATEMENTS
R T Chapman $70,000
RGM Christie $40,000
P W Cory-Wright $40,000
T M Foggo $40,000
C M Kearney $40,000
J J McClean $40,000
Remuneration
$100,001-$110,000 3
$110,001-$120,000 3
$150,001-$160,000 1
$170,001-$180,000 2
$180,001-$190,000 1
$210,001-$220,000 1
$230,001-$240,000 2
$250,001-$260,000 2
$260,001-$270,000 1
$270,001-$280,000 1
Number of
Employees
The Chief Executive Officer’s Employment
Contract is reviewed annually by the
Board. It is not a fixed term Contract.
The remuneration of senior management
is reviewed annually and is determined
in a transparent, deliberate and objective
manner.
NOTICE AND PAUSE
PROVISIONS
The Company has adopted “notice and
pause” provisions in its Constitution.
ACCOUNTING POLICIES
There were no changes in accounting
policies during the period. All policies
are consistent with those applied in the
previous year.
18
SOUTH PORT ANNUAL REPORT 2018

Position
Mr R T Chapman
Cruickshank Pryde Partner
Forklifts NZ Ltd Solicitor
Niagara Sawmilling Company Ltd Solicitor
Prime Range Meats Ltd Solicitor
Pyper’s Produce Ltd Solicitor
Rakiura Adventures Ltd Solicitor
SoRDS Aquaculture Working Group Member
Winton Stock Feed Ltd Solicitor
Mr RGM Christie
ikeGPS Chairman
New Zealand eScience Infrastructure (NeSi) Chairman
Service IQ Chairman
Solnet Solutions Ltd Director
powerHouse Ventures Ltd Director
Mr P W Cory-Wright
Local Government Funding Agency Director
New Plymouth Airport Chairman
Mr T M Foggo
Invercargill Airport Ltd Chairman
Sanford Ltd Consultant
SoRDS Aquaculture Working Group Member
Mrs C M Kearney
Nil
Mr J J McClean
Malloch McClean Ltd Partner
Dated 23 August 2018
AUDIT & RISK COMMITTEE
The Company has a formally
constituted Audit & Risk Committee
comprising Messrs J J McClean
(Chairman), R T Chapman and P W
Cory-Wright.
It is the role of the Audit &
Risk Committee to review the
Company’s financial statements and
announcements, liaise directly with
the Company’s Auditors and review
the Company’s accounting policies,
practices and related matters.
AUDITOR’S
REMUNERATION
During the year $53,911 was paid
to the Company’s Auditors, Crowe
Horwath, for audit services carried
out as agent for the Controller and
Auditor General. The Company did
not pay the Auditors for any advice or
guidance on other matters.
INTEREST REGISTER
The Company maintains an Interest
Register in which particulars of certain
transactions and matters involving
the Directors are recorded. Entries
in the Interest Register must in turn
be disclosed in the Annual Report.
No material transaction entries were
recorded in the Interests Register for
the period 1 July 2017 to 30 June 2018.
DISCLOSURE OF INTEREST
Pursuant to Section 140 of the
Companies Act 1993, Directors have
disclosed interests in the following
entities which the Company conducts
or may conduct business from time
to time:
R T CHAPMAN
Chairman of Directors
J J MCCLEAN
Director
19
SOUTH PORT ANNUAL REPORT 2018

SIZE OF HOLDING
1 - 1,000 311 198,038 0.76
1,001 - 5,000 406 1,091,162 4.16
5,001 - 10,000 90 679,618 2.59
10,001 - 50,000 59 1,201,568 4.58
50,001 - 100,000 6 383,249 1.46
100,001 and over 8 22,681,263 86.45
Total Number of Shareholders: 880 26,234,898 100.00
Size of HoldingNumber of ShareholdersOrdinary ShareholdingPercent Holders
PRICES FOR SHARES TRADED DURING THIS YEAR
TOP TWENTY ORDINARY SHAREHOLDINGS
Shareholder Holding Percent
Southland Regional Council (Environment Southland) 17,441,573 66.48
J I Urquhart Family Trust 1,370,000 5.22
K & M Douglas Trust 1,021,684 3.89
HSBC Nominees (New Zealand) Ltd 955,838 3.64
Douglas Family Trust 516,787 1.97
Douglas Irrevocable Descendants Trust 506,192 1.93
JPMorgan Chase Bank N.A. 441,121 1.68
Daniel Martin Noonan 175,364 .67
Citibank Nominees (NZ) Ltd 125,667 .48
Howard Cedric Zingel 113,556 .43
Kenneth Ritchie Anderson 77,184 .29
Pauline Ann Stapel & Stephen Thomas McKee 70,881 .27
JBWere (NZ) Nominees Ltd 68,238 .26
Custodial Services Ltd 57,906 .22
David Grindell 56,850 .22
Custodial Services Limited 52,190 .20
Glenn Owen Johnston 50,000 .19
Forsyth Barr Custodians Ltd 49,400 .19
Ian Gerald Arnot 43,978 .17
JP Thull Trust 40,824 .16
SUBSTANTIAL SECURITY HOLDERS
According to notices given to the Company under the Financial Markets Conduct Act 2013, as at 30 June 2018, the substantial product
holders in the Company and their relevant interests are noted below:
Holder No. of Shares % of Issued Capital Date of Notice
Southland Regional Council (Environment Southland) 17,441,573 66.48 20 October 2000
K & M Douglas Trust, Douglas Family Trust,
Douglas Irrevocable Descendants Trust 2,044,663 7.79 24 December 2009
J I Urquhart Family Trust 1,334,731 5.09 28 October 2010
Statutory Disclosure in Relation to Shareholders
AS AT 30 JUNE 2018
As At 30 June 2018 High Low
$7.00 $7.15 $5.71
20
SOUTH PORT ANNUAL REPORT 2018

The Board and Senior Management of
South Port New Zealand Limited
(South Port) are committed to maintaining
the highest standards of governance by
implementing best practice principles
and policies. This Corporate Governance
Statement sets out the corporate
governance policies, practices and
processes adopted and followed by
South Port as at 30 June 2018 and has
been approved by the Board.
The best practice principles and
underlying recommendations used in
determining the governance approach
of South Port are the principles set out
in the NZX Corporate Governance Code
2017 (NZX Code). The Board’s view is
that South Port’s corporate governance
policies, practices and processes generally
follow the recommendations set by the
NZX Code. This Corporate Governance
Statement includes disclosure to the extent
to which South Port has followed each of
the recommendations of the NZX Code
or, if applicable, an explanation of why a
recommendation was not followed and
any alternative practices followed in lieu of
the recommendation.
The Company’s Constitution, the Board
and Committee charters, codes and
policies referred to in this statement
are available to view on the Company’s
website, www.southport.co.nz.
These documents should be read in
conjunction with this statement:
öConstitution
öBoard Charter
öAudit & Risk Committee Charter
öCode of Ethics
öProtected Disclosures / Whistleblowing
Policy
öContinuous Disclosure Policy
öSensitive Expenditure Policy
öDiversity and Inclusion Policy
öDirector and Executive Remuneration
Policy
öHealth and Safety Policy
öSecurities Trading Policy and Guidelines
öExternal Auditor Relationship
Framework
PRINCIPLE 1
CODE OF ETHICAL
BEHAVIOUR
“Directors should set
high standards of ethical
behaviour, model this
behaviour and hold
management accountable
for these standards being
followed throughout the
organisation.”
CODE OF ETHICS
Recommendation 1.1: The board should
document minimum standards of ethical
behaviour to which the issuer’s directors
and employees are expected to adhere
to (a code of ethics) and comply with the
other requirements of recommendation
1.1 of the NZX Code.
South Port expects its directors, senior
management and employees to maintain
the highest standards of honesty, integrity
and ethical conduct in day-to-day
behaviour and decision making. The Code
of Ethics sets out the standard of conduct
expected of everyone working at South
Port including directors, management,
staff and contractors. The Code of Ethics
provides a guide to the conduct that
is consistent with the company’s values
and behaviours, business goals and
legal obligations. It also outlines internal
reporting procedures for any breaches
and incorporates the other requirements
of Recommendation 1.1 of the NZX
Code. An introduction to the Code of
Ethics forms part of the induction and
training process of new employees. This
key corporate governance document is
available on the company’s website.
SENSITIVE EXPENDITURE
POLICY
This policy sets out the company’s
expectations on sensitive or discretionary
expenditure incurred by directors or
employees and is available on the
company’s website.
SECURITIES TRADING POLICY
Recommendation 1.2: An issuer should
have a product dealing policy which
applies to employees and directors.
The company is committed to transparency
and fairness in dealing with all of its
stakeholders and to ensure adherence to
all applicable laws and regulations. The
Securities Trading policy governs trading
in the company’s securities by directors,
employees and other associated persons.
This policy can be found on the company’s
website.
PRINCIPLE 2
BOARD COMPOSITION AND
PERFORMANCE
“To ensure an effective
board, there should
be a balance of
independence, skills,
knowledge, experience
and perspectives.”
BOARD CHARTER
Recommendation 2.1: The board of
an issuer should operate under a
written charter which sets out the roles
and responsibilities of the board. The
board charter should clearly distinguish
and disclose the respective roles and
responsibilities of the board and
management.
The Board has adopted a formal Board
Charter to ensure compliance with the
NZX Code. The charter sets out the roles,
responsibilities and structure of the board
and provides guidance for the effective
oversight of the company by the board.
The board is responsible for setting the
company’s strategic direction, overseeing
the management of the company and
directing performance by optimising the
short-term and long-term best interests
of the company and its shareholders.
The board delegates management of
the day-to-day affairs and management
responsibilities of the company to
achieve the strategic direction and goals
determined by the board.
Corporate Governance Statement
21
SOUTH PORT ANNUAL REPORT 2018

NOMINATION AND
APPOINTMENT OF
DIRECTORS
Recommendation 2.2 and 2.3: Every
issuer should have a procedure for the
nomination and appointment of directors
to the board. An issuer should enter into
written agreements with newly appointed
directors establishing the terms of their
appointment.
The board’s procedure for the nomination
and appointment of directors to the board
is set out in the Board Charter. Careful
consideration is given to the composition
of the board in relation to the company’s
needs and operating environment.
The board should at all times comprise
members whose skills, experience and
attributes together reflect diversity,
balance, and cohesion and match the
demands facing the company. This also
applies to the consideration of additional
or replacement directors. Priority is given
to ensuring the skills, experience and
diversity necessary for the board to fulfil
its governance role and to contribute
to the long-term strategic direction of
the company. The board may engage
consultants to assist in the identification,
recruitment and appointment of suitable
candidates.
DIRECTOR PARTICULARS
Recommendation 2.4: Every issuer should
disclose information about each director
in the annual report or on its website,
including a profile of experience, length
of service, independence and ownership
interests.
The board currently comprises of six
independent non-executive directors
including a non-executive Chairman. The
biography of each board member is set
out in the “Directors’ Profiles” section of
this Annual Report and is also available on
the company’s website.
The size and composition of the board
is subject to the limits imposed by South
Port’s Constitution and in accordance with
the provisions of the Port Companies
Act 1988. The Constitution requires the
board to comprise of a minimum number
of six directors. Under the NZX Listing
Rules the board is required to maintain
at least two independent directors. The
criteria for director independence are
outlined in the Board Charter.
Pursuant to the company’s Constitution,
one third of the directors retire by rotation
at each annual meeting, but are eligible
for reappointment by shareholders.
DIVERSITY
Recommendation 2.5: An issuer should
have a written diversity policy which
includes a requirement for the board or
a relevant committee of the board to
set measurable objectives for achieving
diversity (which, at a minimum, should
address gender diversity) and to assess
annually both the objectives and the
entity’s progress in achieving them. The
issuer should disclose the policy or a
summary of it.
The company and its board recognise
and believe that building a diverse and
inclusive workforce provides significant
opportunity to leverage engagement,
innovation, productivity and improved
service to our customers.
South Port is committed to providing
a work environment that recognises
and values different skills, ability and
experiences and where people are
treated fairly in order to attract and retain
talented people who will contribute to the
achievement of South Port’s commercial
success.
Diversity and inclusion is a commitment to
recognising and appreciating the variety
of characteristics that make individuals
unique, for example gender, age, race,
South Port’s two mobile harbour cranes exchanging
containers in the Bluff terminal.
22
SOUTH PORT ANNUAL REPORT 2018

ethnicity, culture, disability, education and
background.
The South Port Diversity and Inclusion
Policy is disclosed on the company’s
website.
Only one specific KPI measure is currently
in place with respect to diversity, being
that it is the company’s desire to have
female representation at both board and
senior management level. The intention is
to determine what other measures should
be in place and this will be addressed in
the 2018/19 financial year.
The following table sets out the gender
composition of South Port’s directors and
officers at balance date:
2018 Male Female Total
Directors 5 1 6
Senior
Management 6 2 8
11 (79%) 3 (21%) 14
2017 Male Female Total
Directors 5 1 6
Senior
Management 5 1 6
10 (83%) 2 (17%) 12
DIRECTOR TRAINING
Recommendation 2.6: Directors should
undertake appropriate training to remain
current on how to best perform their duties
as directors of an issuer.
South Port’s Directors are expected
to undertake continuous education to
remain current on how best to perform
their responsibilities and keep abreast
of changes and trends in governance
practices around economic, political,
social, financial and legal climates. The
board also ensures that new directors are
appropriately introduced to management
and the business, that all directors
are updated on relevant industry and
company issues and receive copies of
appropriate company documents to
enable them to perform their duties.
EVALUATION OF
PERFORMANCE OF
DIRECTORS
Recommendation 2.7: The board
should have a procedure to regularly
assess director, board and committee
performance.
The Chair of the board leads an annual
performance review and evaluation of
the board as a whole and of the board
committees against the board and
committee charters including seeking
director’s views relating to board and
committee process, efficiency and
effectiveness, for discussion by the
full board. The Chair of the board also
engages with individual directors to
evaluate and discuss performance and
professional development. While there
is no prescribed process in place this will
be formalised during the 2018/19 financial
year.
SEPARATION OF THE BOARD
CHAIR AND CHIEF EXECUTIVE
OFFICER (CEO)
Recommendation 2.8: The Chair and CEO
should be different people.
The positions of the Chair and the CEO of
South Port are held by different people.
PRINCIPLE 3
BOARD COMMITTEES
“The board should use
committees where
this will enhance its
effectiveness in key areas,
while still retaining board
responsibility.”
AUDIT & RISK COMMITTEE
Recommendation 3.1: An issuer’s audit
committee should operate under a
written charter. Membership on the
audit committee should be majority
independent and comprise solely of non-
executive directors of the issuer. The chair
of the audit committee should not also be
the chair of the board.
The Audit & Risk Committee provides
the board with assistance in fulfilling
their responsibilities to shareholders,
the investment community and others
for overseeing the company’s financial
statements, financial reporting processes,
internal accounting systems, financial
controls and South Port’s relationship with
its independent auditors.
The Committee is governed by an Audit &
Risk Committee Charter which is available
on the company’s website. The Board
regularly reviews the performance of the
Committee in accordance with the Charter.
The company has developed an External
Auditor Relationship Framework to ensure
external audit independence in line
with best practice to ensure reliable and
credible reporting. This framework is
disclosed on the company’s website.
The Committee comprises of three
independent non-executive members of
the board of directors.
The Committee Chairman, also appointed
by the board, cannot also be the Chairman
of the company. Jeremy McClean is the
Audit & Risk Committee Chairman. At least
one member of the Committee must have
an accounting or financial background;
Jeremy McClean is a Chartered Accountant
and a member of Chartered Accountants
Australia & New Zealand.
Recommendation 3.2: Employees should
only attend Audit Committee meetings at
the invitation of the audit committee.
The Chief Executive and Finance Manager
attend the Audit & Risk Committee
meetings by invitation. South Port’s
external auditor also attends the
Committee meeting by invitation. During
each meeting, all management leave the
meeting for a period of time to enable
the board to have open discussions with
the external auditor without management
present.
REMUNERATION COMMITTEE
Recommendation 3.3: An issuer should
have a remuneration committee which
operates under a written charter (unless
this is carried out by the whole board).
At least a majority of the remuneration
committee should be independent
directors. Management should only
attend remuneration committee meetings
at the invitation of the remuneration
committee.
The board does not operate a separate
remuneration committee as director
and senior management remuneration
is considered by the entire board. The
Director and Executive Remuneration
23
SOUTH PORT ANNUAL REPORT 2018

Policy outlines the structure of director and
executive/management remuneration,
the formal process for shareholder review,
transparency and reporting of actual
remuneration paid and bi-annual review of
the remuneration policy and process.
NOMINATION COMMITTEE
Recommendation 3.4: An issuer should
have a nomination committee to
recommend director appointments to
the board (unless this is carried out by
the whole board), which should operate
under a written charter. At least a majority
of the nomination committee should be
independent directors.
The board does not operate a separate
nomination committee. The process
and procedure for appointment of
directors to the board is outlined in
the Board Charter. The appointment
of a director is a shareholder decision.
Director nominations are called for from
shareholders in accordance with the
Rules. The board will then consider the
candidates who have been nominated
for appointment as a director. Directors
are selected based on a range of factors
including the needs of the board at the
time.
OVERVIEW OF BOARD
COMMITTEES
Recommendation 3.5: An issuer should
consider whether it is appropriate to
have any other board committees. All
committees should operate under written
charters. An issuer should identify the
members of each of its committees, and
periodically report member attendance.
The board does not operate any other
committees apart from the Audit & Risk
Committee. Consideration has been
given as to whether any other standing
board committees are appropriate and
determined they are not required.
DIRECTORS’ ATTENDANCE AT
MEETINGS – 1 JULY 2017 TO
30 JUNE 2018
Audit Committee
Total Meetings 1 9 2
R T Chapman 1 9 2
RGM Christie 1 9 -
P W Cory-Wright 1 9 2
T M Foggo 1 9 -
C M Kearney - 7 -
J J McClean 1 9 2
Annual MeetingBoard Meeting
TAKEOVER PROTOCOLS
Recommendation 3.6: The board should
establish appropriate protocols that set
out the procedure to be followed if there
is a takeover offer for the issuer including
any communication between insiders
and the bidder. It should disclose the
scope of independent advisory reports
to shareholders. These protocols should
include the option of establishing an
independent takeover committee, and the
likely composition and implementation of
an independent takeover committee.
Magpie SW discharging stock food at Berth 5 in November.
24
SOUTH PORT ANNUAL REPORT 2018

The Board has not established protocols
for setting out procedures to be followed
in the event of a takeover offer. This is
because the board considers receipt of a
takeover offer to be an extremely unlikely
event in light of the Southland Regional
Council (Environment Southland) majority
shareholding in the company.
PRINCIPLE 4
REPORTING AND
DISCLOSURE
“The board should demand
integrity in the financial and
non-financial reporting,
and in the timeliness and
balance of corporate
disclosures.”
The Board is committed to providing full
and timely financial and non-financial
information that is accurate, balanced,
meaningful and consistent. As a listed
company, keeping the market informed is
a key component to ensure securities are
fairly valued.
CONTINUOUS DISCLOSURE
Recommendation 4.1: An issuer’s board
should have a written continuous
disclosure policy.
South Port has a Continuous Disclosure
Policy, which is available on the company’s
website.
South Port is committed to providing
accurate, timely and consistent disclosures
that comply with its continuous disclosure
regime, in accordance with the NZX
Listing Rules. The company is required to
disclose to the market matters which could
be expected to have a material effect
on the price or value of the company’s
shares. Management processes are in
place to ensure that all material matters
which may require disclosure are promptly
reported to the board through established
reporting lines. Matters reported are
assessed as and when required by the NZX
Listing Rules and advised to the market.
The Chairman and CEO are responsible for
communications with NZX and for ensuring
that such information is not provided to
any person or organisation until NZX has
confirmed its release to the market.
All material announcements are posted on
the company’s website.
CHARTERS AND POLICIES
Recommendation 4.2: An issuer should
make its code of ethics, board and
committee charters and the policies
recommended in the NZX Code,
together with any other key governance
documents, available on its website.
Information about South Port’s corporate
governance framework (including the
code of ethics, board and committee
charters and other selected key
governance codes and policies) is
available to view on the South Port website
– www.southport.co.nz.
A rake of rail wagons being positioned into the container
terminal.
25
SOUTH PORT ANNUAL REPORT 2018

26
SOUTH PORT ANNUAL REPORT 0234

FINANCIAL REPORTING AND
NON-FINANCIAL REPORTING
Recommendation 4.3: Financial reporting
should be balanced, clear and objective.
An issuer should provide non-financial
disclosures at least annually, including
considering material exposure to
environmental, economic and social
sustainability risks. It should explain how
it plans to manage these risks and how
operational and non-financial targets are
measured.
FINANCIAL REPORTING
The Audit & Risk Committee oversees
the quality and integrity of external
financial reporting including the accuracy,
completeness and timeliness of financial
statements. The Committee is committed
to balanced, clear and objective financial
reporting.
It reviews half-yearly and annual financial
statements and makes recommendations
to the board concerning accounting
policies, areas of judgement, compliance
with accounting standards, stock exchange
and legal requirements, and the results of
the external audit.
Management accountability for the
integrity of the company’s financial
reporting is reinforced by the certification
from the Chief Executive and the Finance
Manager. The Chief Executive and the
Finance Manager have provided the
board with written confirmation that the
company’s financial report presents a true
and fair view, in all material respects, of
the company’s financial position for the
year ended 30 June 2018, and that the
operational results are in accordance with
relevant accounting standards.
NON-FINANCIAL REPORTING
- SUSTAINABILITY
South Port assesses its exposure to
environment, economic and social
sustainability as part of an overall
framework for managing risk (see Principle
6 – Risk Management). The company
is committed to improving standards of
environmental performance to enable
a more efficient and sustainable future.
Accordingly, the following initiatives have
been developed which are incorporated
into regular management reporting to the
board.
Currently the Company’s sustainability
initiatives cover:
öCompliance with Environment
Southland’s ‘Discharge Agreement’;
öManaging and reporting on key risks
facing the business;
öConsideration of environmental impacts
when undertaking new capital projects;
öRegular reporting on health and safety
initiatives;
öReporting on the impact of the
company’s process improvement
programme ‘PACE’ to highlight
continuous improvements and
efficiencies implemented in the
business;
öReporting on time spent assisting local
organisations such as the Southland
Chamber of Commerce, Southland
Export Forum and SoRDS;
öReporting on community and regional
assistance including sponsorship and
donations (both monetary and time
resource).
PRINCIPLE 5
REMUNERATION
“The remuneration of
directors and executives
should be transparent, fair
and reasonable.”
BOARD OF DIRECTORS
REMUNERATION
Recommendation 5.1: An issuer should
recommend director remuneration to
shareholders for approval in a transparent
manner. Actual director remuneration
should be clearly disclosed in the issuer’s
Annual Report.
Director remuneration is paid in the form
of director’s fees. On 20 October 2016 the
shareholders approved the directors’ fee
pool limit of $270,000 per annum.
Information on director remuneration is
available in the South Port Annual Report
2018; refer “Statutory Report of Directors”
(page 18). It includes a breakdown of
remuneration for board fees. There are no
separate fees provided for members of
the Audit & Risk Committee. Directors are
entitled to reimbursement of reasonable
travel and other expenses incurred by
them in connection with their attendance
at Board or Annual Meetings, or otherwise
in connection with South Port business.
REMUNERATION POLICY
Recommendation 5.2: An issuer should
have a Remuneration Policy for the
remuneration of directors and officers,
which outlines the relative weightings of
remuneration components and relevant
performance criteria.
South Port has adopted a remuneration
policy which sets out the guiding
principles and structure of South Port’s
remuneration to the board and executives,
together with the review process and
reporting requirements to ensure that
remuneration is transparent, fair and
reasonable to meet the needs of the
business, corporate governance bodies
and shareholders. The board seeks to
ensure that directors and executives
receive remuneration that is fair and
reasonable in a competitive market for the
skills, knowledge and experience required
by the company.
EMPLOYEES’ REMUNERATION
The board is responsible for reviewing
the remuneration of the company’s
senior management in consultation with
the Chief Executive of the company.
The remuneration packages of senior
management consist of a mixture of a
base remuneration package and a variable
remuneration component based on
relevant performance measures, designed
to attract, motivate and retain high quality
employees who will enable the company
to achieve its short and long-term
objectives.
Details relating to the number of
employees and former employees who
received remuneration and other benefits
in excess of $100,000 during the year
ended 30 June 2018 is available in the
South Port Annual Report 2018, refer
“Statutory Report of Directors” (page 18, in
various escalating bands).
Left: A record number of logs were handled during the
2017–18 financial year.
27
SOUTH PORT ANNUAL REPORT 2018

The short-term incentive (STI) is set at
a maximum of $40,000 per annum for
the Chief Executive. Fifty percent of the
STI is linked to the Company’s financial
performance with the actual opportunity
in the range of 0% to 100%. Fifty percent
is based on achieving strategic objectives
with the actual opportunity in the range
of 0% to 100%. Objectives are set each
year by the board and for the 2018 year
included financial and other targets for
the company overall, as well as personal
objectives and targets, appropriate for the
role.
PRINCIPLE 6
RISK MANAGEMENT
“Directors should have a
sound understanding of
the material risks faced
by the issuer and how to
manage them. The board
should regularly verify that
the issuer has appropriate
processes that identify
and manage potential and
material risks.”
CHIEF EXECUTIVE
REMUNERATION
Recommendation 5.3: An issuer should
disclose the remuneration arrangements in
place for the Chief Executive in its Annual
Report. This should include disclosure of
the base salary, short-term incentives and
long-term incentives and the performance
criteria used to determine performance-
based payments.
The Chief Executive’s remuneration is
made up of fixed remuneration and
variable remuneration (short-term
incentives only). Variable remuneration
refers to remuneration that is “at risk”
and linked to individual and organisation
performance with clearly defined metrics.
The Chief Executive’s remuneration is
reviewed annually by the board and an
external consulting firm is engaged as
appropriate to review market relativity and
comparability against peer groups.
The fixed remuneration is determined
in relation to the market for comparable
sized and performing companies, and
includes all benefits and allowances. The
position in the market will normally be
comparable to the median. Adjustments
are not automatic and are determined by
performance which is reviewed annually
by the board.
Current Chief Executive
– Appointed 11/09/2017
Fixed Remuneration
(FY18) $188,708
Short Term Incentive
(FY17) —
Long Term Incentive —
Total $188,708
Former Chief Executive
– Retired 10/11/2017
Fixed Remuneration
(FY18) $166,248
Short Term Incentive
(FY17) $21,600
Long Term Incentive —
Total $187,848
The Chief Executive’s remuneration for the
year ended 30 June 2018 was made up as
follows:
IVS Sunbird at Berth 5 after being loaded with logs for export.
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SOUTH PORT ANNUAL REPORT 2018

RISK MANAGEMENT
FRAMEWORK
Recommendation 6.1: An issuer should
have a risk management framework for
its business and the issuer’s board should
receive and review regular reports. A
framework should also be put in place to
manage any existing risks and to report
the material risks facing the business and
how they are being managed.
Risk is the chance of something happening
that will have an impact on business
objectives. Effective management of all
types of risk (financial and non-financial)
is a fundamental part of the company’s
business strategy. The board and senior
management have identified, analysed
and evaluated a number of key risk areas
and a strategy has been developed to
appropriately manage the key risks.
RISK MANAGEMENT AND
RESPONSIBILITIES
The Board is ultimately responsible for
reviewing and approving the company’s
risk management strategy.
The Audit & Risk Committee is responsible
for overseeing risk management practices
and works closely with management,
external advisors and the company’s
auditors to ensure that risk management
issues are properly identified and
addressed.
The board delegates day-to-day
management of risk to the Chief
Executive, who may further delegate such
responsibilities to the executive and other
officers.
RISK MONITORING AND
EVALUATION
The Audit & Risk Committee reviews the
reports of management and the external
auditors on the effectiveness of systems
for internal control, financial reporting and
risk management.
The company has a separate Risk
Management Committee which meets
annually to review changes to the risk
profile of the business and to consider
ways of mitigating additional risks
identified. Mr Jeremy McClean, as a
director currently sitting on the Audit &
Risk Committee is appointed to the Risk
Management Committee as a board
representative.
HEALTH & SAFETY
Recommendation 6.2: An issuer should
disclose how it manages its health and
safety risks and should report on their
health and safety risks, performance and
management.
Health and Safety (H&S) continues to be a
key focus of the company and continuous
improvement has been made in this area
over recent years. The company presently
has two full-time personnel dedicated to
H&S matters in addition to all personnel
having responsibility for H&S in their daily
work processes.
The Board operates a H&S Panel which
consists of the full board, both H&S
personnel, together with two senior
managers and two staff representatives.
The H&S Panel’s function is to establish
a H&S strategic plan, monitor its
implementation, undertake scheduled
operational site visits and address key
H&S issues facing the business, with
the objective of achieving continuous
improvement. The H&S Panel meets at
least two times each year.
Another important tool used to deliver
H&S improvement is the company’s PACE
Programme, with the H&S component
being driven by the South Port H&S
Committee. Output from the PACE
Programme and the H&S Committee
is fed through to the H&S Panel for
consideration.
ENVIRONMENTAL SOCIAL
AND GOVERNANCE (ESG)
FACTORS
The Board does not believe that the
company has any material exposure
to economic, environmental or social
sustainability risks that are not appropriately
managed. The material risks which may
impact the company’s ability to achieve its
strategic objectives and secure its financial
prospects, are managed through the
strategic planning process.
PRINCIPLE 7
AUDITORS
“The Board should
ensure the quality and
independence of the
external audit process.”
EXTERNAL AUDIT
Recommendation 7.1 and 7.2: The board
should establish a framework for the
issuer’s relationship with its external
auditors. This should include procedures
prescribed in the NZX Code. The external
auditor should attend the issuer’s annual
shareholders meeting to answer questions
from shareholders in relation to the audit.
The independence of the external auditor
is of particular importance to shareholders
and the board. The Audit & Risk
Committee is responsible for overseeing
the external audit of the company.
Accordingly, it monitors developments
in the areas of audit and threats to audit
independence to ensure its policies and
practices are consistent with emerging
best practice.
The board has adopted a policy on audit
independence, the key elements which
are:
öthe external auditor must remain
independent of the company at all
times;
öthe external auditor must monitor its
independence and annually report
to the board that it has remained
independent;
öthe audit firm is permitted to provide
non-audit services that are not
considered to be in conflict with the
preservation of the independence of
the auditor; and
öthe Audit & Risk Committee must
approve significant permissible
non-audit work assignments that are
awarded to the external auditor.
ENGAGEMENT OF THE
EXTERNAL AUDITOR
The Auditor-General is the auditor of South
Port. The Auditor-General has appointed
Crowe Horwath New Zealand Audit
Partnership to carry out the audit of the
consolidated financial statements of the
Group on his behalf.
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SOUTH PORT ANNUAL REPORT 2018

ATTENDANCE AT THE
ANNUAL MEETING
Crowe Horwath, as auditor of the 2018
financial statements, has been invited to
attend the Annual Meeting and will be
available to answer questions about the
conduct of the audit, preparation and
content of the auditor’s report, accounting
policies adopted by South Port and the
independence of the auditor in relation to
the conduct of the audit.
INTERNAL AUDIT
Recommendation 7.3: Internal audit
functions should be disclosed.
Due to its size, the company does
not have an internal audit function as
recommended by the NZX Code. The
Chief Executive is accountable for all
operational and compliance risk across
the company operations. The Finance
Manager has management accountability
for the effective implementation and
improvement of internal systems and
controls.
PRINCIPLE 8
SHAREHOLDER RIGHTS
AND RELATIONS
“The Board should
respect the rights of
shareholders and foster
constructive relationships
with shareholders that
encourage them to engage
with the issuer.”
INFORMATION FOR
SHAREHOLDERS
Recommendation 8.1: An issuer should
have a website where investors and
interested stakeholders can access
financial and operational information and
key corporate governance information
about the issuer.
South Port seeks to ensure its shareholders
are appropriately informed of its
operations and results, with the delivery
of timely and focused communication,
and the holding of shareholder meetings
in a manner conducive to achieving
shareholder participation.
To ensure shareholders have access to
relevant information, the company:
öProvides a website which contains
media releases, current and past annual
reports, share price information, notices
of meeting and other information
about the company;
öMakes available printed half-year
and annual reports and encourages
shareholders to access these
documents on the website and to
receive advice of their availability by
email;
öPublishes press releases on issues/
events that may have material
information content that could impact
on the price of its traded securities;
öIssues additional explanatory
memoranda where circumstances
require, such as explanations
of dividend changes and other
explanatory memoranda as may be
required by law;
öMaintains regular contact with leading
analysts and brokers who monitor the
company’s activities.
COMMUNICATING WITH
SHAREHOLDERS
Recommendation 8.2: An issuer should
allow investors to easily communicate with
the issuer, including providing the option
to receive communications from the issuer
electronically.
Shareholders have the option of receiving
their communications electronically,
including via email or through South
Port’s ‘Investors Centre’ section on the
company’s website. The board welcomes
investor enquiries.
SHAREHOLDER VOTING
RIGHTS
Recommendation 8.3 and 8.4:
Shareholders have the right to vote on
major decisions which may change the
nature of the company in which they are
invested in. Each person who invests
money in the company should have one
vote per share of the company they own
equally with other shareholders.
In accordance with the Companies Act
1993, the company’s Constitution and the
NZX Listing Rules, South Port refers any
significant matters to shareholders for
approval at a shareholder meeting. Where
shareholder votes are conducted by poll,
each shareholder is entitled to one vote
per share.
NOTICE OF ANNUAL MEETING
Recommendation 8.5: The board should
ensure that the annual shareholders
notice of meeting is posted on the issuer’s
website as soon as possible and at least
28 days prior to the meeting.
South Port posts any Notices of
Shareholder Meetings on the website and
as soon as these are available. The general
practice is to make these available not less
than four weeks prior to the shareholder
meeting.
Shareholder meetings are generally
held at the company’s place of business
(Bluff) at a time which best ensures full
participation by shareholders.
Full participation of shareholders at
the Annual Meeting is encouraged to
ensure a high level of accountability
and identification with the company’s
strategies and goals. Shareholders have
the opportunity to submit questions
prior to each meeting and senior
management and auditors are present to
assist in answering any specific queries
raised. There is also an opportunity for
informal discussion with directors and
senior management for a period after the
meeting concludes.
Right: Project cargo being twin lifted by the Port’s two
mobile harbour cranes onto a waiting transporter.
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SOUTH PORT ANNUAL REPORT 0234

Port Chalmers
Bluff
Lyttelton
Wellington
Napier
Tauranga
Auckland
Nelson
Noumea
Brisbane
Sydney
Melbourne
Adelaide
Fremantle
Jakarta
Singapore
Hong Kong
Kaohsiung
Yantian
Ningbo
Shanghai
Qingdao
Busan
Osaka
Yokohama
Oakland
Long Beach
Charlseton
Philadelphia
Balboa
Cristobal
Salalah
Colombo
King Abdullah Port
Valencia
Le Havre
Fos-Sur-Mer
La Spezia
Naples
Gioia Tauro
Port Louis
Bell Bay
Tanjung Pelapas
Xiamen
Nansha
Djibouti
Antwerp
London Gateway
Pointe De Galets
Esperance
NorthPort
WEEKLY CONTAINER LINE SERVICING BLUFF
Mediterranean
Shipping Company
Capricorn
Singapore - Jakarta - Fremantle -
Adelaide - Bell Bay - Melbourne -
Bluff - Port Chalmers - Lyttelton-
Nelson - Tauranga - Tanjung
Pelepas - Singapore
Australia Express
Sydney - Melbourne - Adelaide -
Esperance (Fortnightly) -
Fremantle - Singapore -
Colombo - Salalah - Djibouti -
King Abdullah Port (Saudi Arabia) -
Gioia Tauro - Valencia -
London Gateway - Antwerp -
Le Havre - Fos-Sur-Mer -
La Spezia - Naples - Gioia Tauro -
Pointe Des Galets - Port Louis -
Sydney
Panda
Kaohsiung - Xiamen - Nansha -
Hong Kong - Yantian - Melbourne -
Sydney - Brisbane - Kaohsiung
Wallaby
Ningbo - Brisbane - Sydney -
Melbourne - Sydney - Brisbane -
Yokohama - Osaka - Busan -
Qingdao - Shanghai - Ningbo
SERVICE
OVERVIEW

Port Chalmers
Bluff
Lyttelton
Wellington
Napier
Tauranga
Auckland
Nelson
Noumea
Brisbane
Sydney
Melbourne
Adelaide
Fremantle
Jakarta
Singapore
Hong Kong
Kaohsiung
Yantian
Ningbo
Shanghai
Qingdao
Busan
Osaka
Yokohama
Oakland
Long Beach
Charlseton
Philadelphia
Balboa
Cristobal
Salalah
Colombo
King Abdullah Port
Valencia
Le Havre
Fos-Sur-Mer
La Spezia
Naples
Gioia Tauro
Port Louis
Bell Bay
Tanjung Pelapas
Xiamen
Nansha
Djibouti
Antwerp
London Gateway
Pointe De Galets
Esperance
NorthPort
Kiwi
Singapore - Jakarta - Brisbane -
Sydney - Auckland - Tauranga -
Wellington - Napier - Auckland -
Northport (Fortnightly) -
Brisbane - Tanjung Pelepas -
Singapore
Noumea Express
Sydney - Noumea - Sydney
Transhipments to:
via Singapore: South East Asia
via Cristobal: Canada, South America, Central America
via Colombo: Africa, Middle East
Oceanic Loop 1
Melbourne - Sydney - Tauranga -
Oakland - Long Beach - Auckland -
Melbourne
Oceanic Loop 2
Sydney - Melbourne -
Port Chalmers - Napier -
Tauranga - Auckland - Cristobal -
Philadelphia - Charleston -
Balboa - Auckland - Sydney

Infrastructure/
Port Improvement
LOG PAVING
This project involved converting
approximately 1,500 m
2
of gravel
hardstand into an asphalt pavement
log storage facility. As a result of the
conversion, the adjacent stormwater
reticulation needed to be upgraded to
handle the additional runoff from the yard.
Included in this drainage upgrade was the
introduction of a primary and secondary
stormwater treatment system to improve
the characteristics of the stormwater
discharge entering the receiving
environment.
This project has increased storage
capacity, improved handling efficiencies
and reduced equipment maintenance
costs for the log marshalling company
operating onsite. The drainage upgrade
has alleviated the flooding which occurred
in the area following a significant rainfall
event.
The total cost of the project was
$2.8M of which over $0.7M was for the
drainage upgrade.
FUEL BERTH
Vehicle access on to the Town Wharf
has been restricted since 2016. As it is a
requirement of the fuel companies that
vehicle access is provided to the discharge
platform, South Port will be investing $5M
on upgrading the eastern end of the
town wharf (fuel berth). This will involve
the construction of a piled accessway and
pipe corridor as well as upgrading the
discharge platform itself.
This project is currently in the design
phase with the tender phase scheduled
for September/October period. It is
unlikely construction will start in 2018 but
we expect that the contractor will establish
on site during the first quarter of 2019.
öPhase One - May 2017 – 9 Cameras.
öPhase Two – Feb 2018 – 13 Cameras.
öTotal of 22 cameras now on Island
Harbour.
öAnother 3 ready to install.
öAllows us to view the berths, vessels
loading/unloading, all movements on or
off the Island, roadways etc.
öHave assisted with Health & Safety,
training, incident investigations,
contractor management, general security
for staff and the wider community.
CCTV CAMERAS
34
SOUTH PORT ANNUAL REPORT 2018

FINGER PIERS & TOWN
WHARF FISHING BERTH
South Port has been undertaking a full
review of its infrastructure over the past
2 years. Part of this review focused on
the finger pier facility (Legs A, B & C) and
the west end of the Town Wharf which
accommodates several fishing vessels.
The review findings are as follows:
a) The finger piers will be “non-
operational” within the next 2 to 5 years
without significant capital upgrade and
ongoing maintenance investment.
b) The Town Wharf structure is at the end
of life and in the near future will become
unsuitable for berthing vessels.
Following this review, SPNZ evaluated the
long term financial viability of the finger
pier facility and Town Wharf fishing berths.
In order to retain these structures South
Port will be investing approximately $1M
over the next 2 years on piling, handrails,
timber deck, fenders and lighting.
ENVIRONMENTAL
LOADOUT AREA AND
BLAST FREEZER
öFollowing the lease expiry of the South
Port operated Foreshore Road Cold
Store complex the storage operation has
been amalgamated into the Port’s Island
Harbour Cold Store.
ö To accommodate the increased activity
a capital works program is underway
that doubles the product receival and
loadout areas and provides a new
20 tonne/day blast freezing facility and
will be fully commissioned by
1 December 2018.
öIt further provides sealed docks for both
containers and trucks that comply with all
export regulations.
öThe new layout design will improve
productivity and the H&S of all staff.
LIGHTING UPGRADE
The infrastructure team are developing
a port wide lighting upgrade plan which
will improve visibillity across the Island
Harbour significantly. It is intended that
this upgrade will be rolled out over the
next few years with the key operational
areas targeted first. Berth 5 and 8 are to
be upgraded during FY19. The upgrades
will be a mixture of installing new LED
bulbs on existing light columns as well as
installing completely new light columns in
other operational areas.
There are several operational,
environmental and health & safety benefits
with LED lighting, with some of these
being:
öImproved lighting quality and reliability.
öReduced energy consumption.
öAutomated system allows lights to be
dimmed and turned on and off quickly.
öLED lights last longer resulting in fewer
bulb changes which means less working
at height activity.
35
SOUTH PORT ANNUAL REPORT 2018

Health & Safety
Achievements
DEVELOPMENT OF
HSE PASSPORT
TRAFFIC
MANAGEMENT PLAN
Three strikes policy, In
excess of 150 strikes issued.
Extra security resource for
onsite monitoring.
2.5 FTE safety team,
increasing to 3.5 FTE.
PCBU POLICY
DEVELOPMENT IN
PROGRESS
Site gym, bi-annual
medicals, drug and alcohol
policy, fatigue project, physio
presentation on back strains,
stop smoking programmes.
Regional Contractor
Pre-qualification and
generic induction
IMPLEMENTATION OF 25
MONITORING CAMERAS
WELLBEING
SYSTEMS
DEVELOPMENT OF
GOLDEN RULES
Westpac Business H&S
Award winners
H&S PACE PROJECT
INCLUDING H&S OFI
COMMITTEE
H&S FORUMS
PERMIT TO WORK
(PTW) SYSTEM
DEVELOPMENT
(MADE AVAILABLE
TO OTHER
COMPANIES)
4 PORTS MEMBER
FORMATION OF BOARD
H&S PANEL
ASSISTANCE
TO SMALL
CONTRACTORS
To implement H&S
systems. Ongoing
guidance to site operators
to lift general regional
H&S performance.
PACE BRIEFINGS,
STAFF NEWSLETTERS,
TOOLBOX MEETINGS
For regular contractors,
port users, syncrolift and
log hoist.
Including employee
representatives at
board meetings.
Includes board
departmental
walks.
Safety agreements
GROWING
H&S TEAM
Prizes supplied
to attendees of
briefings.
Critical risk project –
Bowtie software
36
SOUTH PORT ANNUAL REPORT 2018

ATTENDANCE AT
QUARTERLY NZ PORTS
FORUM
LED LIGHTING PROJECT
UPGRADES UNDERWAY
VAULT UPGRADE
UNDER WAY
Including reporting via smart
phone including reporting via
smart phone.
7,000+ PERSONS
INDUCTED TO SITE
Up to 1,000 inwards traffic
movements on to site each day,
1,200 PCBU’s registered for site.
TRANSPORT
SYSTEM
IMPLEMENTED
Contractor audit process,
Site walk audits by H&S
committee, board, and
managers.
NZ PORTS
TOOL
BUSINESS H&S
LEADERS FORUM
MEMBERS
SITEWISE GREEN
STATUS ACCREDITATION
DEVELOPMENT OF
COMMON USER
SAFETY PROTOCOL
(CUSP)
SAFEGUARD
CONFERENCE
ATTENDANCE
Working with site users
to meet AS/NZS PPE
standards for all port
visitors.
Industry consultation
with regulators.
For ships crew to gate.
PPE STANDARDS
H&S AUDITS
Displayed on website
and promoted with
site operators.
A PORT IS A VERY DYNAMIC WORKING ENVIRONMENT.
THE KEY TO A SAFE, EFFICIENT AND HAPPY WORKPLACE
IS A HIGH LEVEL OF COMMUNICATION, COOPERATION AND
COMMITMENT FROM ALL STAKEHOLDERS.
CONTRACTOR
SUPPORT,
H&S SYSTEM
DEVELOPMENT
ACC WORKPLACE
SAFETY MANAGEMNET
PRACITCES (WSMP)
TERTIARY ACCREDITATION
HOLDER
37
SOUTH PORT ANNUAL REPORT 2018

Vacant Land for
Development
Log Storage
Syncrolift
Dry Dock
Woodchip
Stockpile
Dry Warehouse
No.7 - 5,900m
2
Dry Warehouse
No.4 - 5,900m
2
Dry Warehouse
No.5 - 5,500m
2
Cold Stores
Island Harbour
39,500m
3
Tiwai Wharf
owned by South Port and leased
under a licence agreement to NZAS
Log
Storage
Port Infrastructure
38
SOUTH PORT ANNUAL REPORT 2018

Rail
Marshalling
Ya rd
Bulk Liquid
Storage Facilities
Dedicated Container
Servicing Pad
R&D
Office
Administration
Building
Vacant Land for
Development
Island Harbour
Access Bridge
Fishing
Boat Piers
Cold Stores Foreshore
Road 40,600m
3
Town Wharf
Dry Warehouse
No.1 - 2,000m
2
Bulk Liquid
Storage
Facilities
Dry Warehouse
No.2 - 1,400m
2
Dry Warehouse
No.3B - 3,300m
2
Dry Warehouse
No.3A - 4,500m
2
Dry Warehouse
No.3 - 2,200m
2
Dry Warehouse
No.6 - 1,500m
2
Log
Storage
Vacant Land for
Development
Petroleum
Import Berth
Dry Warehouse
No.3C - 1,900m
2
Inset – South Port Intermodal Freight
Centre (IFC), a 4,000m
2
warehouse
with rail connection servicing the
Otago and Southland regions,
strategically located adjacent to the
Invercargill KiwiRail rail head.

INDEPENDENT AUDITOR’S REPORT
TO THE SHAREHOLDERS OF SOUTH PORT NEW ZEALAND LIMITED
The Auditor-General is the auditor of South Port New Zealand Limited and its subsidiary
(the Group). The Auditor-General has appointed me, Ken Sandri, using the staff and
resources of Crowe Horwath New Zealand Limited Partnership, to carry out the audit of
the consolidated financial statements of the Group on his behalf.
Crowe Horwath
New Zealand Audit Partnership
Member Crowe Horwath International
173 Spey Street
Invercargill 9810 New Zealand
Private Bag 90106
Invercargill 9840 New Zealand
Tel +64 3 211 3355
Fax +64 3 218 2581
www.crowehorwath.co.nz
Key Audit MatterHow we addressed the Key Audit Matter
Property, plant and equipment
As outlined in note 11 of the financial statements, the carrying
amount of the Group’s property, plant and equipment is
$47,471,000.
Amounts are capitalised to property, plant and equipment and
the Group assesses the recoverable amount of these assets in
accordance with the accounting policies outlined in notes 3(e) and
3(f) of the financial statements.
We treated the application of these accounting policies as a Key
Audit Matter because of the:
▪Significance of the property, plant and equipment in the
statement of financial position,
▪Importance to the Group of maintaining these assets in order to
continue to provide expected service levels to customers, and
▪Degree to which these assets may be susceptible to impairment.
Our procedures included:
▪Reviewing minutes and reports of the directors and management
to identify any critical maintenance discussions,
▪Assessing that the Group is adhering to its long term property
maintenance plan, by comparing actual results against the
approved plan,
▪Assessing the nature of costs incurred in capital projects
by testing a sample of costs and determining whether the
expenditure met the capitalisation criteria,
▪ Assessing the nature of costs incurred in repairs and maintenance
projects by testing a sample of costs and determining whether
the expenditure met the repairs and maintenance criteria,
▪Reviewing the profitability of the Group’s operations for
indicators of potential impairment, and
▪Reviewing the Group’s assessment of useful lives allocated to all
major assets.
Opinion
We have audited the consolidated financial statements of the Group on pages 43 to 64, that comprise the consolidated statement of
financial position as at 30 June 2018, and the consolidated statement of comprehensive income, consolidated statement of changes in
equity and consolidated statement of cash flows for the year then ended, and the notes to the consolidated financial statements, including
a summary of significant accounting policies.
In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group
as at 30 June 2018, and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with
New Zealand equivalents to International Financial Reporting Standards and International Financial Reporting Standards.
Basis for opinion
We conducted our audit in accordance with the Auditor-General’s Auditing Standards, which incorporate the Professional and Ethical
Standards and the International Standards on Auditing (New Zealand) issued by the New Zealand Auditing and Assurance Standards Board.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the consolidated financial
statements section of our report. We are independent of the Group in accordance with the Auditor-General’s Auditing Standards, which
incorporate Professional and Ethical Standard 1 (Revised) Code of Ethics for Assurance Practitioners issued by the New Zealand Auditing
and Assurance Standards Board, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Other than in our capacity as auditor, we have no further relationship with, or interests in, the South Port New Zealand Limited Group
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated financial
statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a
whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
40
SOUTH PORT ANNUAL REPORT 2018

Other information
The directors are responsible on behalf of the Group for the other information. The other information comprises the information included
on pages 2 to 39 and 65 to 71, but does not include the consolidated financial statements and our auditor’s report thereon.
Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of audit
opinion or assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in
the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material
misstatement of this other information; we are required to report that fact. We have nothing to report in this regard.
Directors’ responsibilities for the consolidated financial statements
The directors are responsible on behalf of the Group for the preparation and fair presentation of the consolidated financial statements in
accordance with New Zealand equivalents to International Financial Reporting Standards and International Financial Reporting Standards,
and for such internal control as the directors determine is necessary to enable the preparation of consolidated financial statements that are
free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the directors are responsible on behalf of the Group for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting
unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.
The directors’ responsibilities arise from the Financial Markets Conduct Act 2013.
Auditor’s responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Auditor-
General’s Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of
shareholders taken on the basis of these consolidated financial statements.
As part of an audit in accordance with the Auditor-General’s Auditing Standards, we exercise professional judgement and maintain
professional scepticism throughout the audit. We also:
▪Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and
perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for
our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud
may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
▪Obtain an understanding of internal control relevant to the audit 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 the Group’s internal control.
▪Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures
made by management.
▪Conclude on the appropriateness of the use of the going concern basis of accounting by the directors and, based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s
ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our
auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or
conditions may cause the Group to cease to continue as a going concern.
41
SOUTH PORT ANNUAL REPORT 2018

Crowe Horwath New Zealand Audit Partnership is a member of Crowe Horwath International, a Swiss verein. Each
member firm of Crowe Horwath is a separate and independent legal entity.
Ken Sandri
Crowe Horwath New Zealand Audit Partnership
On behalf of the Auditor-General
Invercargill, New Zealand
23 August 2018
▪Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether
the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
▪Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to
express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the
group audit. We remain solely responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit
findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and
to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where
applicable, related safeguards.
From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the
consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s
report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that
a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to
outweigh the public interest benefits of such communication.
Our responsibilities arise from the Public Audit Act 2001.
42
SOUTH PORT ANNUAL REPORT 2018

NOTEGROUP
Statement of Comprehensive Income
OF SOUTH PORT NEW ZEALAND LIMITED FOR THE YEAR ENDED 30 JUNE 2018
Statement of Changes in Equity
OF SOUTH PORT NEW ZEALAND LIMITED FOR THE YEAR ENDED 30 JUNE 2018
GROUP
Share CapitalRetained EarningsTotal Equity
In Thousands of New Zealand Dollars 2018 2017
Total operating revenues from port services 40,705 36,868
Total operating expenses 7 (23,258) (21,549)
Gross profit 17,447 15,319
Administrative expenses (3,650) (3,060)
Operating profit before financing costs 13,797 12,259
Financial income 22 127
Financial expenses (601) (576)
Net financing costs 6 (579) (449)
Other income 5 290 2
Surplus before income tax 13,508 11,812

Income tax (3,850) (3,364)
Total income tax 10 (3,850) (3,364)
Net surplus after income tax 9,658 8,448
Other comprehensive income — —
Total other comprehensive surplus/(loss) after income tax — —
Total comprehensive surplus/(loss) after income tax 9,658 8,448
Basic earnings per share 16 $0.368 $0.322
In Thousands of New Zealand Dollars
Balance 1 July 2016 9,418 26,178 35,596
Profit/(loss) after income tax — 8,448 8,448
Other comprehensive income — — —
Total comprehensive income — 8,448 8,448
Contributions by and distributions to owners
Dividends paid during the period (refer to note 14) — (6,821) (6,821)
Balance as at 30 June 2017 9,418 27,805 37,223
Balance 1 July 2017 9,418 27,805 37,223
Profit/(loss) after income tax — 9,658 9,658
Other comprehensive income — — —
Total comprehensive income — 9,658 9,658
Contributions by and distributions to owners
Dividends paid during the period (refer to note 14) — (6,821) (6,821)
Balance as at 30 June 2018 9,418 30,642 40,060
43
SOUTH PORT ANNUAL REPORT 2018

Statement of Financial Position
OF SOUTH PORT NEW ZEALAND LIMITED as at 30 JUNE 2018
On behalf of the Board
Dated 23 August 2018
Chairman of DirectorsDirector
The accompanying notes form part of these financial statements
In Thousands of New Zealand Dollars 2018 2017
TOTAL EQUITY 14 40,060 37,223
NON-CURRENT ASSETS
Property, plant and equipment 11 47,471 46,570

Total non-current assets 47,471 46,570
CURRENT ASSETS
Cash 12 991 1,675
Trade and other receivables 13 5,648 4,310
Total current assets 6,639 5,985
Total assets 54,110 52,555
NON-CURRENT LIABILITIES
Employee entitlements 18 47 67
Deferred tax liability 10(d) 301 441
Borrowings 17 7,200 9,600
Financial liabilities 20 353 254
Total non-current liabilities 7,901 10,362
CURRENT LIABILITIES
Current borrowings 17 — —
Trade and other payables 19 3,388 2,898
Employee entitlements 18 1,132 868
Provision for taxation 10(c) 1,629 1,204
Total current liabilities 6,149 4,970
Total liabilities 14,050 15,332
TOTAL NET ASSETS 40,060 37,223
Net asset backing per share $1.53 $1.42
NOTEGROUP
44
SOUTH PORT ANNUAL REPORT 2018

The accompanying notes form part of these financial statements
Statement of Cash Flows
OF SOUTH PORT NEW ZEALAND LIMITED FOR THE YEAR ENDED 30 JUNE 2018
In Thousands of New Zealand Dollars 2018 2017
CASH FLOWS FROM OPERATING ACTIVITIES
Cash was provided by (applied to):
Receipts from customers 39,366 37,302
Payments to suppliers and employees (22,614) (21,738)
Interest received 22 10
Interest paid (505) (572)
Income taxes paid (3,564) (3,185)
Net goods and services tax paid (363) 251

Net cash flow from operating activities 23 12,342 12,068
CASH FLOWS FROM INVESTING ACTIVITIES
Cash was provided by (applied to):
Proceeds from disposal of non-current assets 388 2
Acquisition of other non-current assets (4,193) (3,382)
Net cash used in investing activities (3,805) (3,380)
CASH FLOWS FROM FINANCING ACTIVITIES
Cash was provided by (applied to):
Dividend paid (6,821) (6,821)
Drawdown/(repayment) of borrowings (2,400) (1,100)
Net cash used in financing activities (9,221) (7,921)
NET INCREASE (DECREASE) IN CASH HELD (684) 767
Add cash at beginning of year 1,675 908
Net foreign exchange differences — —
TOTAL CASH AT END OF YEAR 12 991 1,675
NOTEGROUP
45
SOUTH PORT ANNUAL REPORT 2018

Notes to the Financial Statements
OF SOUTH PORT NEW ZEALAND LIMITED FOR THE YEAR ENDED 30 JUNE 2018
1 REPORTING ENTITY
South Port New Zealand Limited (the “Company”) is a company
domiciled in New Zealand, registered under the Companies Act 1993
and listed on the New Zealand Stock Exchange (“NZX”). The Company is
an issuer in terms of the Financial Reporting Act 2013.
The consolidated financial statements of South Port New Zealand
Limited as at and for the period ended 30 June 2018 comprise the
Company and its subsidiary Awarua Holdings Ltd (together referred
to as the “Group”). South Port New Zealand Ltd is primarily involved in
providing and managing port and warehousing services.
2 BASIS OF PREPARATION
(a) Statement of Compliance
The Parent Company is a Financial Markets Conduct (FMC) reporting
entity for the purposes of the Financial Reporting Act 2013 and the
Financial Markets Conduct Act 2013. These financial statements
comply with these Acts and have been prepared in accordance with
the New Zealand Equivalents to International Financial Reporting
Standards (NZ IFRS) and other applicable Financial Reporting
Standards, as appropriate for profit-oriented entities. These
financial statements comply with International Financial Reporting
Standards (IFRS).
The financial statements were approved by the Board of Directors
on 23 August 2018
(b) Basis of Measurement
The financial statements have been prepared on the historical cost
basis except for the following:
• financial instruments measured at fair value
The methods used to measure fair values are discussed further in
Note 4.
(c) Functional and Presentation Currency
These financial statements are presented in New Zealand dollars ($),
which is the Group’s functional currency. All financial information
presented in New Zealand dollars has been rounded to the nearest
thousand.
(d) Use of Estimates and Judgements
The preparation of financial statements requires management
to make judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts of
assets, liabilities, income and expenses. Actual results may differ
from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised in the
period in which the estimate is revised and in any future periods
affected.
There were no estimates and assumptions that have a significant risk
of causing a material adjustment to the carrying amounts of assets
and liabilities within the next financial year.
In particular, information about significant areas of estimation
uncertainty and critical judgements in applying accounting policies
that have the most significant effect on amounts recognised in the
financial statements are as detailed below:
• Long Service Leave (Note 18)
• Commitments and Contingent Liabilities (Note 22)
• Financial Instruments (Note 21)
• Valuation of Derivatives (Note 21)
3 SIGNIFICANT ACCOUNTING POLICIES
The accounting policies set out below have been applied consistently
to all periods presented in these financial statements, and have been
applied consistently by Group entities.
(a) Basis of Consolidation
Consolidation of a subsidiary begins when the Group obtains
control over the subsidiary and ceases when the Group loses
control of the subsidiary. Assets, liabilities, income and expenses of
a subsidiary acquired or disposed of during the year are included
in the statement of comprehensive income from the date the
Group gains control until the date the Group ceases to control the
subsidiary.
Control is achieved when the Group is exposed, or has rights, to
variable returns from its involvement with the investee and has the
ability to affect those returns through its power over the investee.
The financial statements of subsidiaries are prepared for the
same reporting period as the parent company, using consistent
accounting policies.
In preparing the consolidated financial statements, all inter-
company balances and transactions, income and expenses and
profit and losses resulting from intra-group transactions have been
eliminated in full.
Subsidiaries are fully consolidated from the date on which control is
obtained by the Group and cease to be consolidated from the date
on which control is transferred out of the Group.
(b) Foreign Currency
Transactions in foreign currencies are translated to the respective
functional currencies of the Group at exchange rates at the dates
of the transactions.
(c) Goods and Services Tax (GST)
All financial information is expressed exclusive of GST, except for
trade and other receivables, and trade and other payables, which
are expressed inclusive of GST in the Statement of Financial Position.
46
SOUTH PORT ANNUAL REPORT 2018

(d) Financial Instruments
(i) Non-derivative financial instruments
The Group is party to financial instruments as part of its normal
operations. These financial instruments include cash and cash
equivalents, trade and other receivables, loans and borrowings,
and trade and other payables.
Non-derivative financial instruments are recognised initially at
fair value on transaction date plus, for instruments not at fair value
through the profit or loss, any directly attributable transaction
costs. Subsequent to initial recognition non-derivative financial
instruments are measured as described below.
A financial instrument is recognised if the Group becomes a
party to the contractual provisions of the instrument. Financial
assets are derecognised if the Group’s contractual rights to
the cash flows from the financial assets expire or if the Group
transfers the financial asset to another party without retaining
control or substantially all risks and rewards of the asset.
Purchases and sales of financial assets are accounted for at
trade date. Financial liabilities are derecognised if the Group’s
obligations specified in the contract expire or are discharged
or cancelled.
Cash and cash equivalents comprise cash balances and call
deposits.
Trade and other receivables
Trade and other receivables are stated at their cost less
impairment losses.
Interest-bearing borrowings
Borrowings are initially recognised at fair value, net of transaction
costs incurred. After initial recognition, interest-bearing loans
and borrowings are subsequently measured at amortised cost
using the effective interest method. Borrowings are classified
as current liabilities unless the Group has an unconditional right
to defer settlement of the liability for at least 12 months after the
balance sheet date.
Trade and other payables
Trade and other payables are stated at cost.
(ii) Derivative financial instruments and hedging activities
The Group uses derivative financial instruments to hedge its
exposure to foreign exchange and interest rate risks arising
from financing and investment activities.
In accordance with its treasury policy, the Group does not hold
or issue derivative financial instruments for trading purposes.
However, derivatives that do not qualify for hedge accounting
are accounted for as trading instruments.
Derivative financial instruments qualifying for hedge accounting
are classified as non current if the maturity of the instrument
is greater than 12 months from reporting date and current if
the instrument matures within 12 months from reporting date.
Derivatives accounted for as trading instruments are classified
as current.
Derivative financial instruments are recognised initially at
fair value and transaction costs are expensed immediately.
Subsequent to initial recognition, derivative financial instruments
are stated at fair value. The gain or loss on re-measurement to
fair value is recognised immediately in profit or loss. However,
where derivatives qualify for hedge accounting, recognition of
any resultant gain or loss depends on the nature of the hedging
relationship.
Cash Flow Hedges
Changes in the fair value of the derivative hedging instrument
designated as a cash flow hedge are recognised directly in cash
flow hedge reserve to the extent that the hedge is effective. To
the extent that the hedge is ineffective, changes in fair value are
recognised in profit or loss.
If the hedging instrument no longer meets the criteria for
hedge accounting, expires, or is sold, terminated or exercised,
then hedge accounting is discontinued prospectively. The
cumulative gain or loss previously recognised in the hedging
reserve remains there until the highly probable forecast
transaction, upon which the hedging was based, occurs.
When the hedged item is a non financial asset, the amount
recognised in the hedging reserve is transferred to the carrying
amount of the asset when it is recognised. In other cases the
amount recognised in the hedging reserve is transferred to the
profit or loss in the same period that the hedged item affects
the profit or loss.
Interest rate swaps
Derivative financial instruments also include interest rate swaps
to hedge (economically but not in accounting terms) the
Group’s risks associated with interest rate fluctuations. Such
derivative financial instruments are initially recognised at fair
value on the date on which a derivative contract is entered into
and are subsequently remeasured to fair value. Derivatives are
carried as assets when their fair value is positive and as liabilities
when their fair value is negative.
Any gains or losses arising from changes in the fair value of
interest rate swaps are taken directly to profit or loss for the year.
The fair values of interest rate swap contracts are determined by
reference to market values for similar instruments.
(e) Property, Plant & Equipment
(i) Recognition and measurement
Items of property, plant and equipment are measured at cost,
less accumulated depreciation and impairment losses. Land is
not depreciated.
The initial cost includes the purchase price and any costs
directly attributable to bringing the asset to the state of being
ready for use in location. These costs can include installation
costs, borrowing costs, cost of obtaining resource consents etc.
Any feasibility costs are expensed.
(ii) Subsequent expenditure
Subsequent expenditure is added to the gross carrying amount
of an item of property, plant or equipment, if that expenditure
increases the future economic benefits of the asset beyond
its existing potential, or is necessarily incurred to enable
future economic benefits to be obtained and its cost can be
measured reliably.
47
SOUTH PORT ANNUAL REPORT 2018

(iii) Disposal of property, plant and equipment
Where an item of such is disposed of, the gain or loss is
recognised in the Statement of Comprehensive Income at the
difference between the net sale price and the net carrying
amount of the item.
(iv) Depreciation
Depreciation is calculated on a straight line basis to allocate the
cost of an asset, less its residual value, over its useful life. The
estimated useful lives of property, plant and equipment are:
• Buildings 15-50 years
• Plant & Equipment 3-50 years
Depreciation methods, useful lives and residual values are
reassessed at the reporting date.
(f) Impairment
The carrying amounts of the Group’s assets are reviewed at each
balance sheet date to determine whether there is any objective
evidence of impairment.
An impairment loss is recognised whenever the carrying amount of
an asset exceeds its recoverable amount. Impairment losses directly
reduce the carrying amount of assets and are recognised in the
Statement of Comprehensive Income.
(i) Impairment of receivables
Accounts receivable for the Group are valued at their anticipated
realisable value after writing off amounts considered to be
irrecoverable and making adequate provision for doubtful
debts.
(g) Provisions
A provision is recognised if, as a result of a past event, the Group
has a present legal or constructive obligation that can be estimated
reliably, and it is probable that an outflow of economic benefits will
be required to settle the obligation.
(h) Revenue
Revenue is measured at the fair value of the consideration received
or receivable, net of allowances, trade discounts and volume
rebates, and recovery of the consideration is probable.
(i) Services
Revenue from services rendered is recognised in the Statement
of Comprehensive Income in proportion to the stage of
completion of the transaction at the reporting date.
(ii) Rental Income
Rental income from property is recognised in the Statement of
Comprehensive Income on a straight-line basis over the term
of the lease.
(iii) Deferred Revenue
Deferred revenue is revenue received in advance which is
recorded as a liability and amortised to income on a straight
line basis over the period to which the revenue relates.
(i) Lease Payments
Payments made under operating leases are recognised in the
Statement of Comprehensive Income on a straight-line basis over
the term of the lease.
(j) Finance Income and Expenses
Finance income comprises interest income on funds invested,
dividend income, foreign currency gains and changes in the fair
value of financial assets at fair value through profit or loss.
Interest income is recognised as it accrues, using the effective
interest method. Dividend income is recognised on the date that
the Group’s right to receive payment is established.
Finance expenses comprise interest expense on borrowings,
foreign currency losses, interest rate swap losses, and impairment
losses recognised on financial assets. All borrowing costs are
recognised in the Statement of Comprehensive Income using the
effective interest method, apart from interest expenses relating
to interest rate caps which are recognised in the Statement of
Comprehensive Income on a straight-line basis over the term of the
cap arrangement.
(k) Income Tax Expense
Income tax expense comprises current and deferred tax. Income tax
expense is recognised in the Statement of Comprehensive Income
except to the extent that it relates to items recognised directly in
equity, in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for
the year, using tax rates enacted or substantively enacted at the
reporting date, and any adjustment to tax payable in respect of
previous years.
Deferred tax is recognised using the balance sheet method,
providing for temporary differences between the carrying amounts
of assets and liabilities for financial reporting purposes and the
amounts used for taxation purposes.
Deferred tax is not recognised for the following temporary
differences: the initial recognition of assets or liabilities in a
transaction that is not a business combination and that affects
neither accounting nor taxable profit, and differences relating to
investments in subsidiaries to the extent that they probably will not
reverse in the foreseeable future.
Deferred tax assets and liabilities are measured at the tax rates that
are expected to be applied to the temporary differences when they
reverse, based on the laws that have been enacted or substantively
enacted by the reporting date.
A deferred tax asset is recognised to the extent that it is probable
that future taxable profits will be available against which temporary
differences can be utilised. Deferred tax assets are reviewed at each
reporting date and are reduced to the extent that it is no longer
probable that the related tax benefit will be realised.
Additional income taxes that arise from the distribution of dividends
are recognised at the same time as the liability to pay the related
dividend is recognised.
48
SOUTH PORT ANNUAL REPORT 2018

(l) Earnings per Share
The Group presents basic earnings per share (EPS) data for its
ordinary shares. Basic EPS is calculated by dividing the net surplus
after income tax attributable to ordinary shareholders of the
Company by the weighted average number of ordinary shares
outstanding during the period.
There is no value difference between basic EPS and diluted EPS.
(m) Segment Reporting
Operating segments are reported in a manner consistent with
the internal reporting provided to the chief operating decision
maker. The chief operating decision maker, who is responsible for
allocating resources and assessing performance of the operating
segments, has been identified as the Chief Executive.
The Group operates solely in the port industry and all operations
are carried out in the Southland region.
(n) Amendments to NZ IFRS
There are no new, revised or amended accounting standards
issued by the International Accounting Standards Board (IASB)
and the New Zealand Accounting Standards Board (NZASB) that
are mandatory for application by the Group for the financial year
beginning 1 July 2017.
(o) NZ IFRS issued but not yet effective
A number of new standards, amendments to standards and
interpretations are effective for annual periods ending after 30 June
2018 and have not been applied in preparing these consolidated
financial statements. Those which may be relevant to the Group
are set out below. The Group does not plan to adopt these
standards early.
• NZ IFRS 9: Financial Instruments – this standard will replace NZ
IAS 39: Financial Instruments – Recognition and Measurement
and is expected to be adopted by the Group in the financial
statements for the year ending 30 June 2019 (effective date 1
January 2018).
NZ IFRS 9 introduces new requirements for the classification and
measurement of financial assets. Financial assets are classified
and measured based on the business model in which they are
held and the characteristics of their contractual cash flows. The
standard introduces additional changes relating to financial
liabilities. It also amends the impairment model by introducing
a new “expected credit loss” model for calculating impairment.
NZ IFRS 9 also includes a new general hedge accounting
standard which aligns hedge accounting more closely with risk
management. This new standard does not fundamentally change
the types of hedging relationship or the requirement to measure
and recognise the ineffectiveness, however, it will provide more
hedging strategies that are used for risk management to qualify
for hedge accounting and introduce more judgement to assess
that effectiveness of hedging relationships.
The Group does not expect the standard to have a material
impact on the financial statements and will likely result in small
changes being required in the Group’s disclosures in regard to
the classification of financial assets.
• NZ IFRS 15: Revenue from Contracts with Customers – this
standard is expected to be adopted by the Group in the financial
statements for the year ending 30 June 2019 (effective date 1
January 2018).
NZ IFRS 15 establishes principles for reporting about the nature,
amount, timing and uncertainty of revenue arising from an
entity’s contracts with customers. The model features a contract-
based five step analysis of transactions to determine whether,
how much and when revenue is recognised.
The Group does not expect the standard to have a material
impact on the measurement of the Group’s revenue.
• NZ IFRS 16: Leases – this standard is expected to be adopted by
the Group in the financial statements for the year ending 30 June
2020 (effective date 1 January 2019).
NZ IFRS 16 abolishes the concept of the operating lease and
effectively requires all leases to be treated as finance leases.
The standard requires lease agreements (for lessees) to be
recognised on balance sheet as a right-to-use asset, with a
corresponding liability.
The Group does not expect the standard to have a material
impact on the financial statements as most leases held by the
Group are as lessor. There is likely to be only one land lease that
will have to be recognised on the balance sheet as a right-to-use
asset (with a corresponding liability) and this lease is not material.
No other standards, amendments or interpretations that have been
issued but are not yet effective are expected to materially impact the
Group’s financial statements.
4 DETERMINATION OF FAIR VALUES
A number of the Group’s accounting policies and disclosures require
the determination of fair value, for both financial and non-financial
assets and liabilities. Fair values have been determined for measurement
and/or disclosure purposes based on the following methods. Where
applicable, further information about the assumptions made in
determining fair values is disclosed in the notes specific to that asset
or liability.
(a) Derivative Financial Instruments
The fair value of forward exchange contracts and interest rate
derivatives are determined using quoted rates at balance date.
(b) Other Non-Derivative Financial Instruments
The carrying values less impairment provisions of trade receivables
and payables are assumed to approximate their fair values.
The carrying values of loans and borrowings approximate their
fair values.
49
SOUTH PORT ANNUAL REPORT 2018

5 OTHER INCOME
In Thousands of New Zealand Dollars 2018 2017
Gain on sale of property, plant and equipment 290 2
Total other income 290 2
GROUP
6 FINANCE INCOME AND EXPENSES
In Thousands of New Zealand Dollars 2018 2017
Income
Interest income 22 10
Dividend income — —
Change in fair value of interest rate swap — 117
Total financial income 22 127
Expenses
Interest expense (501) (576)
Change in fair value of interest rate swap (100) —
Total financial expenses (601) (576)
Net finance costs (579) (449)
GROUP
7 OPERATING EXPENSES
In Thousands of New Zealand Dollars 2018 2017
Auditors’ remuneration for audit services 54 50
Auditors’ remuneration for other guidance — —
Amount paid for employment consultancy services
(to associated entity of auditors) — 1
Bad debts written off — 11
Depreciation of property, plant & equipment 3,361 3,291
Directors’ fees 270 273
Donations 4 4
Rental and lease expenses 178 380
Increase/(decrease) in liability for long-service leave (21) 30
Loss on disposal of assets 47 5
GROUP
The following items of expenditure are included in total operating expenses:
8 EMPLOYEE BENEFITS EXPENSE
In Thousands of New Zealand Dollars 2018 2017
Salaries and wages 9,505 9,249
Defined contribution plans 319 299
Other employee benefits 156 181
9,980 9,729
GROUP
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SOUTH PORT ANNUAL REPORT 2018

9 KEY MANAGEMENT PERSONNEL COMPENSATION
In Thousands of New Zealand Dollars 2018 2017
Short-term employee benefits 1,822 1,499
Defined contribution plans 55 68
Other long-term employee benefits 33 21
1,910 1,588
GROUP
The compensation of the Directors, Chief Executive and other senior management, being the key management personnel
of the entity, is set out below:
10 INCOME TAXES
In Thousands of New Zealand Dollars 2018 2017
(a) INCOME TAX RECOGNISED IN PROFIT OR LOSS
Tax expense/(income) comprises:
Current tax expense / (credit):
Current year 3,996 3,319
Adjustments for prior years (6) (17)
3,990 3,302
Deferred tax expense / (credit)
Origination and reversal of temporary differences (140) 62
Adjustments for prior years — —
(140) 62
Total tax expense / (income) 3,850 3,364
The prima facie income tax expense on pre-tax
accounting surplus reconciles to the income tax
expense in the financial statements as follows:
Surplus / (deficit) before income tax 13,508 11,812
Income tax expense (credit) calculated at 28% 3,782 3,307
Temporary differences 21 15
Non-deductible expenses 63 59
Non assessable income (10) —
3,856 3,381
Adjustments for prior years — —
(Over) / under provision of income tax in previous year (6) (17)
Income tax expense (credit) 3,850 3,364
GROUP
The tax rate used in the above reconciliation is the corporate tax rate of 28% payable on taxable profits under New
Zealand tax law. There has been no change in the corporate tax rate when compared with the previous reporting
period.
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SOUTH PORT ANNUAL REPORT 2018

Note 10 continued...
(b) INCOME TAX RECOGNISED DIRECTLY IN EQUITY
There was no current or deferred tax charged / (credited) directly to equity during the period.
In Thousands of New Zealand Dollars 2018 2017
(c) CURRENT TAX ASSETS AND LIABILITIES
Current tax refundable:
Current tax refundable — —
Current tax payable:
Current tax payable 1,629 1,204
(d) DEFERRED TAX BALANCES COMPRISE:
Taxable and deductible temporary differences arising from the following:
In Thousands of New Zealand Dollars
Gross deferred tax liabilities:
Other financial assets — — — —
Property, plant and equipment (638) 73 — (565)
(638) 73 — (565)
Gross deferred tax assets:
Other financial assets / liabilities — — — —
Employee entitlements 197 67 — 264
197 67 — 264
Net deferred tax asset / (liability) (441) 140 — (301)
GROUP
1 July 2017
Opening Balance
Recognised in
profit/loss
Recognised in
equity
30 June 2018
Closing Balance
2018
GROUP
1 July 2016
Opening Balance
Recognised in
profit/loss
Recognised in
equity
30 June 2017
Closing Balance
2017
In Thousands of New Zealand Dollars
Gross deferred tax liabilities:
Other financial assets — — — —
Property, plant and equipment (638) — — (638)
(638) — — (638)
Gross deferred tax assets:
Other financial assets / liabilities — — — —
Employee entitlements 259 (62) — 197
259 (62) — 197
Net deferred tax asset / (liability) (379) (62) — (441)
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SOUTH PORT ANNUAL REPORT 2018

In Thousands of New Zealand Dollars 2018 2017
(e) IMPUTATION CREDIT ACCOUNT BALANCES
Balance at beginning of year 9,082 8,434
Less Taxation (payable) receivable 2017 (1,204) (1,087)
Taxation paid 3,564 3,184
Attached to dividends paid (2,653) (2,653)
Add Taxation payable (receivable) 2018 1,629 1,204
Balance at end of year 10,418 9,082
GROUP
11 PROPERTY, PLANT AND EQUIPMENT
2018
Cost
1 July 2017
AdditionsAdditions
through
Business
Combinations
DisposalsOtherCost 30 June
2018
Accumulated
Depn and
Impairment
charges
1 July 2017
Depn
Expense
Accumulated
Depn
reversed on
Disposal
OtherAccumulated
Depn and
Impairment
charges
30 June 2018
Carrying Amt
30 June 2018
Land 2,944 134 — — — 3,078 — — — — — 3,078
Buildings 20,065 569 — (4) — 20,630 6,102 421 (3) — 6,520 14,110
Plant & 66,520 3,682 — (1,435) — 68,767 36,857 2,940 (1,304) (9) 38,484 30,283
89,529 4,385 — (1,439) — 92,475 42,959 3,361 (1,307) (9) 45,004 47,471
machinery
In Thousands of
New Zealand
Dollars
2017
Impairment – During the year ended 30 June 2018 there were no impairment losses (2017: nil) which were recorded in the
Statement of Comprehensive Income.
12 CASH AND CASH EQUIVALENTS
In Thousands of New Zealand Dollars 2018 2017
Bank balances 991 1,671
Call deposits — 4
Cash and cash equivalents 991 1,675
Bank overdrafts used for cash management purposes — —
Cash and cash equivalents in the statement of cash flows 991 1,675
GROUP
Cost
1 July 2016
AdditionsAdditions
through
Business
Combinations
DisposalsOtherCost 30 June
2017
Accumulated
Depn and
Impairment
charges
1 July 2016
Depn
Expense
Accumulated
Depn
reversed on
Disposal
OtherAccumulated
Depn and
Impairment
charges
30 June 2017
Carrying Amt
30 June 2017
Land 2,932 12 — — — 2,944 — — — — — 2,944
Buildings 20,796 464 — — (1,195) 20,065 5,691 411 — — 6,102 13,963
Plant & 63,680 2,027 — (382) 1,195 66,520 34,349 2,880 (377) 5 36,857 29,663
87,408 2,503 — (382) — 89,529 40,040 3,291 (377) 5 42,959 46,570
machinery
In Thousands of
New Zealand
Dollars
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SOUTH PORT ANNUAL REPORT 2018