Hawke’s Bay Regional Investment Company
Board of Directors
Meeting held Friday 16 March 2012, 9am
HBRC Offices @ 159 Dalton Street
Minutes
1. Present:
Andy Pearce (Chairman), Sam Robinson, Fenton Wilson,
Andrew Newman, Alan Dick, Christine Scott, Jim Scotland
In attendance:
Paul Drury (HBRC), Leeanne Hooper (Minute Secretary)
2. Confirmation of 20 February 2012 Minutes
Resolution 2012/0316.1
The minutes of the Board of Directors meeting held
20 February 2012, having been circulated prior to the meeting,
were taken as read and confirmed as a true and accurate
record as amended.
Scott/Dick
CARRIED
2a. Matters Arising from 20 February 2012 meeting minutes
Legal advice is to be sought in relation to resolution 2012/0220.13 (pg7) – to
clarify that the interactions between the constitution, Statement of Intent and
policies of Council, HBRIC and PONL make clear sense and don’t conflict.
PONL revaluation is complete and the Board is meeting on 19 March to adopt it.
The PONL Board will then make a recommendation to Council in regard to how
that value is reflect on Council’s balance sheet.
Action:
1. Seek legal advice in regards to ‘deemed directors’ issues and
interactions between the constitution, Statement of Intent and
policies of Council, HBRIC and PONL; and recommend that Council
seeks similar legal advice (Paul Drury)
3. Conflict of Interest Declarations
A conflict of interest was advised by Andy Pearce in relation to item 6b RFP for
Advisory Services and short list, as a BNZ Director. As today’s discussions would
be solely around process Andy is able to participate in those discussions,
however will not take part in any of the decision making activities and will not
receive any of the information on which the decision of preferred provider will be
based.
4
HBRC’s Long Term Plan 2012-22
Well constructed, well written document. Some minor amendments relating
directly to HBRIC suggested.
Resolution 2012/0316.2
That the Board of HBRIC notes HBRC’s draft Long Term Plan
2012-22 and the content relating to the direction and intent
of Council’s investment strategy.
Scotland/Scott
CARRIED
Action:
2. Make amendments to draft LTP document as agreed, prior to
final audit review (Paul Drury)
5
HBRIC Statement of Intent and Related Policy Matters
A draft SOI was considered by Council at its meeting held 29 February 2012, in
order to meet LGA requirements for draft SOI documents to be lodged by
1 March each year.
From here, it is suggested that the Board of Directors review the draft and
amend as agreed, prior to lodging a ‘final draft’ for Council’s consideration at the
18 April 2012 meeting. This then provides Council with the opportunity consider
the document and give feedback to the Board for consideration in finalising the
Statement of Intent before the 30 June 2012 LGA deadline.
Mission Statement
Remains as is – reiteration of Council’s Mission Statement.
Dividend Policy
To be amended/updated to align with the Policy included in the PONL SOI.
Rotation of Independent Directors
This will be amended to align with section 8.8h of the Constitution.
Nature and Scope of Activities to be Undertaken
Suggested amendments from Council accepted.
Borrowing and Capital Return
Amendments for clarification accepted.
Resolution 2012/0316.3
That the HBRIC Statement of Intent 2012-13 be amended
as per discussions and agreement at this meeting, for
acceptance at the 4 April 2012 Board of Directors meeting
to enable HBRC’s feedback being sought at the 18 April
2012 Regional Council meeting.
Pearce/Wilson
CARRIED
Action:
3. Make amendments to Constitution to correct dates for rotation of
Independent Directors as per dates in SoI (Paul Drury)
Action:
4. Make amendments to the document using track changes, for
providing to directors for final amendments/approval at the 4 April
meeting (Andy Pearce, Leeanne Hooper)
6
Accounting Services & Budget/Cash Flows
Separate ledger & Chart of Accounts established within HBRC accounting
system. HBRC finance staff will process transactions and compile financial
reports. BNZ accounts the IRD, GST and Employer registration processes
underway.
Resolution 2012/0316.4
That the Board of HBRIC agrees to the establishment of the
bank accounts with the Bank of New Zealand and signs the
required forms accordingly.
Dick/Wilson
CARRIED
7
Company Manager
Some concern expressed around the optics of the role as presented in the
Agenda papers, which read as a ‘clerical’ role. Directors were expecting the
Company ‘Manager’ role to be pitched at a higher level to engage someone with
strategic ability, able to act independently and argue their case.
Mr Newman pitched the task list at this level so that someone relatively ‘junior’
could step in now, and liaise with professional advisors for the higher level tasks.
Through discussion, Heath Caldwell (HBRC Management Accountant) was
suggested as a suitable applicant. This would be an ‘interim’ position while the
company was going through this initial establishment phase and the
requirements for a ‘company manager’ were developed more thoroughly. The
PONL CFO has offered assistance and/or mentoring for this role.
It was agreed that Andrew Newman and Andy Pearce would interview the
potential candidate for this ‘interim’ position and to review the role at the end of
June 2012.
Resolution 2012/0316.5
That the Board of HBRIC accepts the Company Secretary
Person Specification and Task List as amended, and instructs
the HBRIC Managing Director and Chairman to interview
Heath Caldwell.
Scotland/Robinson
CARRIED
8
Ruataniwha Project Looking Forward
To date, the feasibility study has:
locked in a storage site and developed a technically feasible dam design
established the value of hydro-electricity and run scenarios on the on farm
economic values
established a broad feel of the value of irrigation to various processing
sectors and regional economic benefit
identified environmental issues and solutions within the storage ,
reticulation and river areas
identified broad non economic values for the storage site
broadly (with the plan change project) established the positive impact on
summer river flows
generated a degree of community awareness and general support, and a
high degree of initial interest from potential investors and established a
lead position in terms of potential water storage infrastructure projects in
New Zealand.
Feasibility study is close to:
establishing the specifics of the distribution network in zones A to D (with
the exception of zones m & n) and broadly establishing the cost of off
farm infrastructure
(with the plan change project) establishing catchment nutrient limits for
activities and mitigation measures.
9
RFP for Advisory Services & Short List
A Request for Proposal (RFP) for Commercial Feasibility Assessment, Asset
Procurement and Capital Raising Services was sent out and proposals received
from: Bank of New Zealand (in collaboration with NAB); Deloitte (in collaboration
with Cameron Partners); PricewaterhouseCoopers; and ANZ Bank.
The services requested under the RFP are to be performed in two phases. Phase
1 is directed at establishing the commercial feasibility of the Project/WaterCo
and should be completed by 29 June 2012. Phase 2 (capital raising/asset
procurement) is conditional on the Phase 1 establishing the feasibility of the
Project/WaterCo sufficiently to the satisfaction of HBRC and HBRIC, and the
decision to proceed to Phase 2 will be at the sole discretion of Council.
Resolutions
That the Board, subject to receiving Council’s request to undertake the process:
2012/0316.6
Subject to a positive response to the RFP and taking into
account advice from staff and presentations from bidders,
determines, via a sub-committee consisting of all Directors
except Dr Any Pearce, which party it wishes to retain both for
the balance of the feasibility phase and, subject to a decision
to continue, the balance of the project and makes a formal
recommendation to Council.
2012/0316.7
Upon Council approval to appoint the successful provider,
requests that the HBRC Chief Executive and staff complete
detailed negotiations and contracting with the successful
party, taking into account any specific aspects the Board
determines are essential in the contractual arrangement.
2012/0316.8
Recommends to Council that the Managing Director works
directly with MAF to establish a funding stream from MAF to
assist with the advisory service.
2012/0316.9
Formally advises HBRC of the need to consider both the
expense to complete feasibility and the potential need to
transfer $3M of funding from 2013/14 to 2012/13 to fund
financial and design advisory services.
Scott/Wilson
CARRIED
Action:
5. Late agenda item to go to the 21 March Regional Council meeting
to formally have Council request the HBRIC Board to carry out the
RFP assessment process (Fenton, Andrew, Leeanne)
Action:
6. Ruataniwha Water Storage Project workshop for Council, to
traverse the decision making responsibility transfers and at what
stages (Andrew Newman, Graeme Hansen, Leeanne Hooper)
Andrew Newman was excused at 1.25 pm
10 Directors’ & Officers’ Liability Indemnification & Insurance
Based on advice from Jardine Lloyd Thompson, the Board decided to accept the
terms offered by Vero Liability Insurance to provide insurance with an aggregate
limit of liability of $5M, at the quoted $6k +GST premium for the first year’s
cover.
Resolutions
That the Board:
2012/0316.10
Acknowledges HBRIC’s indemnification of each and every
director for any costs referred to in Section 162(3) of the
Companies Act 1993 and any liability or costs referred to in
Section 162(4) of the Companies Act 1993, as provided for in
terms of Section 13.1 of the Company’s Constitution and
requests that the company provides a ‘Deed of Indemnity’ for
each.
2012/0316.11
Accepts the terms and conditions outlined in this paper and
the attached documents for effecting a Directors and Officers
Liability insurance with Vero Liability insurance carrying a
$5million limit of liability, as quoted by Jardine Lloyd
Thompson on 12 March 2012 and authorises payment of the
first year annual premium of $6,000 plus GST.
2012/0316.12
Agrees that the costs of the indemnity are fair to the
company and provides certification of that agreement.
2012/0316.13
Reconsiders an appropriate level of cover prior to renewing
the policy on 20 February 2013.
Robinson/Scotland
CARRIED
Action:
7. Provide the necessary ‘Deed of Indemnity’ for each Director and
make the payment required to activate the policy (Paul Drury,
Heath Caldwell)
Action:
8. Produce, and have directors sign, a certificate that the cost of the
insurance cover is fair to the company (Heath Caldwell)
There being no further business to discuss, the meeting closed at 2pm
Signed as a true and correct record.
………………………………………………………….
………………………………………………
Chairman
Date
