The Trust has been monitoring and reporting on progress against our existing strategic plan over the past three years. With the changes in our staff and increased focus on land utilisation and diversification, we have decided to reconceptualise the strategy in 2017. I am proud to say that work is well underway, and we will report some of that thinking here.
Under the current strategic plan, we constituted a Strategy Audit and Risk Committee that oversees budget and project initiatives for our Project Manager. Although our balance sheet is still small compared with other organisations, we feel that it is important to utilise a committee structure and vigour around investments. I chaired the committee for two years, and we have recently appointed Richard O’Conner to the role. Richard has a strong commercial and financial background.
Health and Safety
Since the introduction of new health and safety regulations in April 2016, the Trust has taken a more proactive approach to managing health and safety on our lands. One key concern is the presence of owners on our lands during forestry operational hours. The Trustees of Lake Rotoaira Forest and Lake Taupō Forest have discussed at length the potential risks to forestry workers when hunting with firearms during operational hours and the risk of collisions between owner vehicles and forestry logging trucks on forestry roads. For these reasons, the Trustees of both Trusts have decided to restrict access to Trust lands to after 4 p.m. Monday to Friday. Although this limits certain activities from occurring until after 4 p.m., we believe it is a prudent approach to protecting both forestry workers and owners from potential harm during operational hours. Weekend access remains unchanged.
Lake Rotoaira Easement
This year the Trust received $37,000 through the Relationship Agreement between Lake Rotoaira Trust, Lake Rotoaira Forest Trust, and Genesis Energy Ltd. The funds are held in trust on behalf of the owners. The Trust also holds the share of funds for the non-Lake Rotoaira Forest Trust land owners. This year meetings with the non-Lake Rotoaira Forest Trust land block owners resulted in changes to the trustees for some of these blocks. Their appointments will be confirmed in October. The next step will be to facilitate further discussions with the new trustees about the Easement Agreement.
Lake Taupō Charitable Trust — Forest Management Programme
Lake Rotoaira contributed $90,000 towards this programme during the year. Investing in our rangatahi jointly with Lake Taupō Forest Trust is a privilege for our Trust, and we would like to acknowledge the Lake Taupō Charitable Trust for all its hard work in making the programme successful.
This has been a good year for Lake Rotoaira Forest Trust despite the slight decrease in stumpage income. The income we received from stumpage was $4.2 million, compared with $4.3 million last year. We also declared another gross distribution of $750,000 to owners. Marae grants and Kaumātua Health grants totalled $137,000 for the year. Our asset base also increased from $60 million to $68 million this year, reflecting changes in the forest valuation.
Taupō Properties Investment
Owners will recall that in 2013 the Trustees, through their subsidiary Lake Rotoaira Forest Trust Land Holdings Ltd, made an investment of $300,000 in a limited partnership arrangement with Tūwharetoa Settlement Trust Limited Partnership in the Department of Education property leases. During the year, the Trustees made a further investment of $200,000 in this partnership. The Trust received a $25,500 return in dividends this year, increasing the total dividend returns to $73,000 since the initial investment.
Hautū Rangipō Investment
Our investment in Hautū Rangipō Whenua Ltd is progressing well. Lake Rotoaira Forest Trust and Lake Taupō Forest Trust have a joint shareholding of 60.5 per cent. This year, the Trust received $123,000 (30 per cent) for its share of the joint investment. We would like to acknowledge Deputy Chair Bubs Smith for his hard work as a director on the company.
Annual Distributions
Identifying and locating eligible owners to pay distributions to is fraught with difficulties. Many owners are deceased and no succession has taken place; owners simply don’t know that they are owners; addresses and bank accounts change; or the amount of the distribution is so small it’s hardly worth the effort and cost of making a succession application to the Māori Land Court and registering with the Trust. The result is that unclaimed or unpaid distributions continue to grow with no downward movement on the unclaimed fund from year to year.
Around 56 per cent of the annual distribution is paid, and of the 11,300 owners, only 23 per cent or 2,700 are actually paid. This means almost 80 per cent of our owners do not receive a share of the annual distribution. The Trustees can use these funds to generate interest income for Māori community purposes grants such as Kaumātua Health and Marae grants.
The Trustees are currently considering an alternative option to the annual distribution that will provide greater benefit to owners without the ongoing problem of increasing unclaimed distributions. We hope to report back to owners on this at the annual general meeting.
‘The Trustees are currently considering an alternative option to the annual distribution that will provide greater benefit to owners without the ongoing problem of increasing unclaimed distributions.’
Trustees are very conscious that much of our revenue comes from forestry, so it is very important for us to think through how we can diversify our commercial interests to spread our risk. Tiwana Tibble as the Trust’s Project Manager has been working on a range of direct investment opportunities on all your Lake Rotoaira Forest Trust properties. An update on these will be provided at the upcoming annual general meeting of owners in January.
‘Much of our revenue comes from forestry, so it is very important for us to think through how we can diversify our commercial interests.’
Lake Rotoaira Forest Trust and Lake Taupō Forest Trust are managed largely as one forestry operation. We also own common assets and interests through Lake Taupō Forest Management, the Weighbridge Company and our investment in the Hautū Rangipō Limited Partnership. It is therefore no surprise that we share a similar vision.
Lake Taupō Forest Trust take control of their forests in 2021, and we take control of our forests in 2026. Although there is a five-year lag between the two Trusts, we are looking at opportunities for efficiencies and obvious synergies to achieve our mutual vision. We have been and will continue discussing what the transition to a fully integrated, commercial forestry business will take.
‘Between the two Trusts, we are looking at opportunities for efficiencies and obvious synergies to achieve our mutual vision.’
I would like to acknowledge the hard work and support of my fellow Trustees for progressing the work of the Trust. Thank you all for your dedication and commitment to the Trust and your collective ability to sound out potential risks and opportunities so we are able to make prudent decisions on behalf of the owners.
I’d like to acknowledge the contribution of our Project Manager, Tiwana Tibble, who continues to investigate alternative economic opportunities from our lands.
I’d also like to thank the team at Lake Taupō Forest Trust that provides our financial and administration services and Lake Taupō Forest Management Ltd that provides our forestry investment and management advice.
Finally, I’d like to thank you, the owners, for supporting the Trust to build our business and our organisation so, in turn, the Trust is able to provide opportunities and support for our future generations.
Nō reira,
Tēnā koutou, tēnā koutou, tēnā koutou katoa.
Dr Charlotte Marewa Severne
Chairperson
2017
2020
2026
Lake Rotoaira Forerst Trust held their Annual General Meeting of Owners at Hīrangi Marae, Tūrangi on 21 January 2017. The minutes of that meeting can be downloaded as a pdf here.
The Trustees are pleased to present the Summarised Financial Statements of the Lake Rotoaira Forest Trust for the 12 months ended 30 June 2017. Authorised for and on behalf of the Board of Trustees on 5 December 2017.
The Financial Statements can be downloaded as a pdf here.
