Local Government Act 2002

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Schedule 8 Statements of intent

ss 64(1), (4), 65(2)

1 Purpose of statement of intent

The purpose of a statement of intent is to—

(a)

state publicly the activities and intentions of a council-controlled organisation for the year and the objectives to which those activities will contribute; and

(b)

provide an opportunity for shareholders to influence the direction of the organisation; and

(c)

provide a basis for the accountability of the directors to their shareholders for the performance of the organisation.

2 Statements of intent for council-controlled organisations

The board of a council-controlled organisation must deliver to its shareholders a draft statement of intent on or before 1 March each year.

Compare: 1974 No 66 s 594S

3 Completion of statements of intent

The board must—

(a)

consider any comments on the draft statement of intent that are made to it within 2 months of 1 March by the shareholders or by any of them; and

(b)

deliver the completed statement of intent to the shareholders on or before 30 June each year.

Compare: 1974 No 66 s 594U

4 Modifications of statements of intent by board

The board may, by written notice, modify a statement of intent at any time if the board has first—

(a)

given written notice to the shareholders of the proposed modification; and

(b)

considered any comments made on the proposed modification by the shareholders or by any of them within—

(i)

1 month after the date on which the notice under paragraph (a) was given; or

(ii)

any shorter period that the shareholders may agree.

Compare: 1974 No 66 s 594V(1)

5 Modifications of statements of intent by resolution of shareholders

(1)

Despite any other provision of the Act or of the constitution of any council-controlled organisation, the shareholders of a council-controlled organisation may, by resolution, require the board to modify the statement of intent by including or omitting any provision or provisions of the kind referred to in clause 9(1)(a) to (i), and any board to whom notice of the resolution is given must comply with the resolution.

(2)

Before giving notice of the resolution to the board, the shareholders must consult the board concerned as to the matters to be referred to in the notice.

Compare: 1974 No 66 s 594V(2)

6 Statement of intent required if exemption granted under section 7 revoked

If an exemption granted under section 7 is revoked, the council-controlled organisation must,—

(a)

if there is more than 6 months remaining in the financial year, prepare a statement of intent for that financial year; or

(b)

if there is not more than 6 months remaining in the financial year, prepare a statement of intent for the following financial year.

7 Obligation to make statements of intent available

A completed statement of intent and each modification that is adopted to a statement of intent must be made available to the public by the board within 1 month after the date on which it is delivered to the shareholders or adopted, as the case may be.

Compare: 1974 No 66 s 594W

8 Savings of certain transactions

A failure by a council-controlled organisation to comply with any provision of this schedule or with any provision in a statement of intent does not affect the validity or enforceability of any deed, agreement, right, or obligation entered into, obtained, or incurred by that organisation.

Compare: 1974 No 66 s 594Y

9 Contents of statements of intent

(1)

A statement of intent must, to the extent that is appropriate given the organisational form of the council-controlled organisation, specify for the group comprising the council-controlled organisation and its subsidiaries (if any), and in respect of the financial year immediately following the financial year in which it is required by clause 3(b) to be delivered and each of the immediately following 2 financial years, the following information:

(a)

the objectives of the group; and

(b)

a statement of the board’s approach to governance of the group; and

(c)

the nature and scope of the activities to be undertaken by the group; and

(d)

the ratio of consolidated shareholders’ funds to total assets, and the definitions of those terms; and

(e)

the accounting policies of the group; and

(f)

the performance targets and other measures by which the performance of the group may be judged in relation to its objectives; and

(g)

an estimate of the amount or proportion of accumulated profits and capital reserves that is intended to be distributed to the shareholders; and

(h)

the kind of information to be provided to the shareholders by the group during the course of those financial years, including the information to be included in each half-yearly report (and, in particular, what prospective financial information is required and how it is to be presented); and

(i)

the procedures to be followed before any member or the group subscribes for, purchases, or otherwise acquires shares in any company or other organisation; and

(j)

any activities for which the board seeks compensation from any local authority (whether or not the local authority has agreed to provide the compensation); and

(k)

the board’s estimate of the commercial value of the shareholders’ investment in the group and the manner in which, and the times at which, that value is to be reassessed; and

(l)

any other matters that are agreed by the shareholders and the board.

(2)

If a council-controlled organisation has undertaken to obtain or has obtained compensation from its shareholders in respect of any activity, this undertaking or the amount of compensation obtained must be recorded in—

(a)

the annual report of the council-controlled organisation; and

(b)

the annual report of the local authority.

(3)

Any financial information, including (but not limited to) forecast financial information, must be prepared in accordance with generally accepted accounting practice.

Compare: 1974 No 66 s 594T

10 Additional content of statements of intent

(1)

This clause applies to a council-controlled organisation that provides services in relation to the following groups of activities:

(a)

water supply:

(b)

sewerage and the treatment and disposal of sewage:

(c)

stormwater drainage:

(d)

flood protection and control works:

(e)

the provision of roads and footpaths.

(2)

The council-controlled organisation’s statement of intent must, in relation to each group of activities described in subclause (1), include a statement of the intended levels of service provision that complies with clause 4(a) and (c) of Schedule 10 as if—

(a)

the reference to a long-term plan were a reference to the statement of intent; and

(b)

the reference to a local authority were a reference to a council-controlled organisation.

Schedule 8 clause 10: added, on 27 November 2010, by section 47 of the Local Government Act 2002 Amendment Act 2010 (2010 No 124).