Atihau-Whanganui 2014 Annual Report by iStudios Multimedia Ltd

AT I

I NU

-WHANG U A A

RPORATI

Toi tu te whenua

E te morehu whenua, e te morehu tangata Tenei matau te mihi ake nei Ki te whenua, mōna i āta hoki kia momona anō ai, whai muri i te tauraki, tēnā koe Ki te morehu tangata, i piri tonu ki a Ātihau Whanganui i whai ai, tēnā koutou katoa He kuia i riro, he totara i hinga – e ngā mate huhua, moe mai rā. Rose, i kōnei koe ki te whakanui i te huritau 40 o Ātihau Whanganui. Ko koe te morehu kuia i tū ki te tapahi i tā tātau keke. Ko koe tēnā kua arahi atu i te hunga tamariki iho i whai i ō tapuwae ki tua. Moe mai e kui, koutou. E te rae o tōtā, e te hinengaro kamakama, e te ngākau nui, e te puku mahi, Chris, tēnei rā te Mana Whakahaere o Ātihau-Whanganui te mihi atu nei ki a koe. Nāu te wāhi ki te tinana ā-pakihi o AWHI i whakarite, i whakatau, i whakararau. Kua rongo koe i te koingo o tō ngākau i noho tonu ki Pōneke i te wā i kōnei koe i waenga i tō iwi. E hoki rā ki a ia. Nāu tēnei wāhanga o tō iwi i whakarite kia tū pakari. E te iwi, i te wehenga atu a Chris, kua whakatauria e mātau tā tātau kaihautū hou. Māna tō tātau waka e arahi i runga i ngā whakahau a ōna rangātira. Andrew, nau mai, haere mai, whakatau mai. I tērā tau ko tauraki te aronga. I tēnei tau, i rongo tonu tātau i te pānga o tauraki, heoi, e āta hoki ana te momonatanga o te whenua. I āta whakahaeretia te pāmu kia kaua ngā pānga o tauraki kino e tūkino anō hei ngā tau kei te tū nei nā reira i puta tonu mai ngā hua, ā, i mahi tahi tonu tana tātau ki ngā hoa pērā me Wātson me tana Tama, he mea whakawhānui i tā tātau whakawhiwhinga pūtea. Ahakoa, he pai kē atu kia nui anō atu te momona, kua tupu anō ngā hua. E taea tonuhia ana tō tātau whenua a ia anō te whāngai, a koutou te whāngai, ko ngā uri whakatupu anō hoki te whāngai. He wāhanga i toe

mai nā reira kua toro atu tātau ki te whakahaere i tētehi pāmu, a Te Hou, ki roto o Ngāti Apa ki te mahi ngātahi me tērā o ngā iwi me te whānau Dalrymple, nā tātau a ia whakamahi hei tiaki i ā tātau kau i ngā hōtoke o ngā tau onātata nei. Kua tāpiritia atu te pūrongo e pā ana ki Te Rōpu Kaitiaki o Te Āti Hau kia noho piri tahi ngā pūrongo hei pūrongo kotahi. Ka tautoko te Tarati i ngā uri mā te tuku pūtea, ka tautoko hoki i a Awhiwhenua, tō tātau kura whakatupu kaiwhakahaere pāmu e whakawhanakehia ai ngā pūkenga o ā tātau uri. Haere mai ki te whakarongo, haere mai ki te kōrero. Haere mai ki te whakaū i ngā ritenga. Haere mai ki te tohutohu. Tēnā tātau katoa. The remnants of our lands, the survivors of our people We salute you To you the land – for gradually returning to plenty once more, after the worst drought – thank you! To the survivors of our people, for sticking by what Ātihau-Whanganui has pursued – we thank you! A matriarch, a patron fallen – too many bereavements, rest in peace. Rosina Randell, you were with us when we celebrated our 40th Birthday. You were the eldest present that cut our cake. You have gone to guide those younger who have also passed that follow you. Sleep dear Kui, all of you. The sweated brow, the alert intelligence, the generous spirit, the toiler – Chris, the Board of Directors of Ātihau-Whanganui acknowledges you for everything you have done. You established AWHI’s business body. Your heart strings have pulled you back to Wellington after spending these years amongst your iwi. Return to her. You have strengthened this part of your iwi. Our dear people, on Chris’s departure we appointed a new Chief Executive

Officer. He will guide our canoe based on his chiefs’ directions. Andrew, a warm hearty welcome. Last year the drought was our focus. This year we have continued to feel the impact of the drought and have gradually returned to being productive. Steps were taken to reduce the impact of future droughts on production and profit levels and we continued to work with partners, such as Watson and Son, to ensure our revenue streams are diversified and to reduce risk. Although being even more productive would have been better, we have a better result. So much so that our land has been able to provide to sustain itself as well as its descendants. The improvement is such that we have expanded to farm Te Hou within Ngāti Apa jointly with that iwi and the Dalrymple family who we have worked closely with in recent years to store feed our cattle. We have collaborated with like minded Māori farmers to ensure we are further involved in the value chain in the future. This year we include the report on the Te Āti Hau Trust combining the two organisations’ into one report. which provides grants to our people and support the Awhiwhenua training academy, with a focus on developing the skills of ngā uri. Welcome – listen, speak. Confirm what you like. Give direction where you see it is needed.

Tēnā tātau katoa.

Toitu Te Whenua

Toitu Te Tangata

Toitu Te Mana

Prioritise animal welfare

Support the community

Use technology everyday

Kaitiakitanga of land, people and resources

Deliver the best there is for customers

Grow our people, leaders and success

I NU

-WHANG U A A

AT I

Deliver produce with excellence

Foster reciprocal, enduring and honest relationships

RPORATI

Toi tu te whenua 3

CONTENTS TOITŪ TE MANA 6

Ātihau-Whanganui Incorporation

Chairperson's report 8

Introducing New CEO Andrew Beijeman

Te Hou Farming Partnership

TOITŪ TE WHENUA 12

The Sweet Taste of Success

AWHI Management Report

TOITŪ TE TANGATA 19

Te Āti Hau Trust Chairperson's Report

Awhiwhenua Education Programme

2013/14 Trust Grant Recipients

ĀTIHAU-WHANGANUI INCORPORATION FINANCIAL STATEMENTS 29

Contents

Shareholders and CoM Information

Statement of Financial Performance

Statement of Movements in Equity

Statement of Financial Position

Statement of Cashflows

Notes to the Financial Statements

Auditors' Report

TE ĀTI HAU TRUST FINANCIAL STATEMENTS 43

Contents

Directory

Statement of Financial Performance

Statement of Movements in Equity

Statement of Financial Position

Statement of Cashflows

Notes to the Financial Statements

Auditors' Report

Glossary of Terms

Cover: Awhiwhenua student Christian Hawira Left: Shepherding on Ohorea Station 5

2014 Ātihau-Whanganui Incorporation Chairperson's Report Andrew as South Island Manager, Dry Stock, oversaw 500,000 stock units of sheep, beef, deer and 100 staff over 30 properties. He has wasted no time in familiarizing himself with many aspects of this business, and we look forward to a long and prosperous relationship.

Director of Agriculture, purchaser of meat, eggs, fish, dairy and poultry. Waitrose in the UK is a premium supermarket where quality and reputation is second to none. Our firm relationship with ANZCO secures our lamb product into this important market.

Overall, for the Whanganui Waimarino rohe it has been a year of progress and indifference, as we celebrated the Awa Tupua Settlement, hosted the Federation of Māori Authorities annual meeting and then endured a long and contentious general election.

We have made excellent progress in the Māori red meat arena, working with other like minded entities such as Wī Pere Trust, Tarawera Station and D&S Blackburn to consider market options with ANZCO.

GOVERNANCE LEADERSHIP

Tēnā Koutou, tēnā koutou, tēnā koutou katoa. The Ātihau-Whanganui Incorporation's 'Better by Strategy' aligns strongly with the Government’s Business Growth Agenda with our strategic focus on land, people, productivity, governance and collaboration towards diversification. It is my pleasure, on behalf of your Board, to present this 2014 Chairperson’s report on the governance activities of a very busy year. Firstly, we begin by remembering those who have passed, and convey aroha to those who continue to mourn. To those who have brought new life, we extend congratulations. And to all others we express best wishes for the season to come. Last year we recognized the retirement of our past chairperson, and at this annual meeting we acknowledge the retirement of our CEO whanaunga, Chris Scanlon. We farewelled him mid year, and engaged in a vigorous recruitment programme facilitated by human resource experts, John Peebles Associates Limited. and Baker and Associates Limited We are pleased to welcome our newly appointed CEO, Andrew Beijeman. Andrew, and his partner Sarah, both come from a career in Landcorp. 6

I am grateful to return to the Board, and welcome back Whatarangi Peehi Murphy and Jim Edmonds, as your elected governors. Jim Edmonds is also a member of the Morikau Board and we look forward to strengthening that relationship. Through the CEO recruitment process, the Board was engaged in an overall performance review, which provided direct commentary and recommendations for the future. It was helpful and reassuring to have external acknowledgement of the individual and collective governance potential, capacity and capability. OUR STRATEGIC CHALLENGES We include again this year our Strategic Challenges (refer to page 3) as a reminder of the focused work streams we have been engaged in throughout the year. The board has diligently monitored this plan through quarterly milestones, and we are pleased to report a very satisfactory completion rate. Aligning our Annual Report around these strategic priorities we are able to articulate more clearly their value. We will be reviewing and refreshing our Better by Strategy very shortly. LEVERAGE THROUGH COCREATION PROJECTS Tūhono Whenua – Red Meat Earlier in the year, I was pleased to meet with Heather Jenkins, Waitrose

Tūhono Miere Our mānuka and honey footprint continues to develop and grow under the leadership of board members Tiwha Puketapu and Don Robinson. Our aspiration is to understand the entire value chain from supply and operations to management, logistics, value add pharmaceuticals and end markets. With this data, informed decision making will enable AWHI and other whānau hapū land groups to engage at relevant key entry points. This has dove tailed very nicely into a project facilitated by the Ministry of Primary Industries (MPI), launched during the year by Minister Nathan Guy. This land feasibility study incorporating Ngāti Rangi and AWHI lands, covering 240,000ha looked at mānuka and kanuka cover on the various blocks and the pathway to profitable honey harvest. We are hopeful this regional approach can provide increased opportunities for not just AWHI but also the smaller surrounding land blocks. Te Hou Farming Partnership The year has been a busy one as we negotiated and supported Ngāti Apa in their intent to acquire the AgResearch farm previously known as Flock House. For AWHI this was a fourfold strategy: to spread our portfolio risk by increasing our exposure to milk, to grow experience, capacity and capability in dairy, to grow profit and to strengthen cultural and commercial relationship ties with our Ngāti Apa whānau. This Te Hou

Farming Partnership is a thirds equal partnership with AWHI, Ngāti Apa and Te Waitatapia Partnership, Roger and Hew Dalrymple. We are excited by this partnership, as we literally change the face of agribusiness in NZ Aotearoa. CONNECTING TO OUR PEOPLE Te Āti Hau Trust remains a key entity in which we respond to the various needs of our shareholders and their uri. You will read more of their activities in this publication. The Awhiwhenua training based at Ngā Mōkai marae provides opportunity for uri to train on our properties and eventually qualify for employment opportunities. The training does not give automatic employment into AWHI, but grows skills and therefore greater opportunities. A shareholder farm tour earlier in the year consisted of a two day hikoi through the properties, meeting key staff and engaging with our Awhiwhenua trainees. This was educational and uplifting for all parties.

FUTURE OUTLOOK We are excited to be considering a fresh new approach, building on our learnings and progress to date. This will include consolidating our business operations including the One Farm strategy and strengthening our policies and procedures to provide further gains. Future proofing through integrated value chain participation in as many of our product lines as is sensible, is a key focus. The future agenda is a full one.

Toitu Te Mana

Finally, can I acknowledge the commitment and effort of my fellow board members during a long and eventful year. To our senior leadership team and all farm staff, our collective efforts will continue to drive this organisation to greater opportunities , greater success, greater outcomes for shareholders and communities. Nāku nā Mavis Mullins Chairperson

Left to Right: Directors Don Robinson, Whatarangi Peehi-Murphy, Mavis Mullins (chair), Jim Edmonds, Toni Waho, Che Wilson, Te Tiwha Brendon Puketapu.

Introducing New CEO Andrew Beijeman It is a pleasure to introduce whānau whanui to CEO Andrew Beijeman, and appropriate to provide some whakapapa to Andrew’s journey that brings him to AWHI. As this report goes to print, Andrew will have been with AWHI for ten weeks, and has already formed strong views around a bright and productive future.

Chair of Landcorp, Traci Houpapa, noted and embraced the opportunity for Landcorp and AWHI to work more collaboratively.

Over the next 12 months I aim to continue working towards the implementation of AWHI’s strategy. In particular I will be focusing on building our people capability, becoming more involved in the supply chain and finally developing farming systems and management practices which provide greater returns and reduced exposure to changes in climatic conditions.

I have no doubt that this work will be challenging, and as it is said “Whāia te iti kahurangi ki te tūohu koe me he maunga teitei”. I look forward to the challenges ahead.

Andrew has noted to the board:

From a whānau of four, their upbringing was at Rangitaiki, with schooling locally before secondary education in Taupo. With parents who farmed the land as sheep and beef farmers and more recently agricultural contractors, his feel for the land is instinctive as well as learned. Andrew comes to us after six and a half years at Landcorp. The past three years his role was as a Senior Business Manager, responsible for overseeing Landcorps’ South Island livestock operation. At a small powhiri and hand over at Ngā Mokai, the

Over the last 10 weeks it has become apparent to me that AWHI has great physical resources, an enthusiastic management team, and values and history which are meaningful and worth sharing. We also have a strategic direction which has been developed with rigor, and which aims to leverage off these resources and values for the betterment of AWHI’s shareholders. AWHI is a credit to all those, past and present who have been a part of the organization. I am both excited and humbled by the opportunity to be part of AWHI’s future.

We present Andrew, and look forward to working positively and determinedly for our collective progress and benefit.

Below: Staff at Papahaua Station readying stock for docking

TE HOU FARMING PARTNERSHIP Te Hou is an exciting new venture for AWHI, providing an opportunity to work with others, diversify revenue streams, to learn and be involved in a farm which has been, and will continue to be an important part of New Zealand Agricultural History. Te Hou is located thirteen kilometres south of Bulls, within Ngāti Apa’s tribal lands. It was part of the RangitikeiTurakina block, a total of 260,000 acres which in 1849 was purchased by the Crown for £2,500 or a little under tuppence an acre. At the time it was believed that a partnership with the crown would bring peace, protection and prosperity to Ngāti Apa, this was not to be the case. Now, through a new partnership Ngāti Apa have been able to reconnect with a part of their lands. The farm comprises of both sheep and beef and dairy farms across 1100 hectares; is flat and rests on a mixture of sand and silt based soils. A proportion of the farm (254 ha) is currently being used for plantation forestry. History of Land The land was purchased from the government by Thomas McKenzie in 1853, and then in 1907 the McKenzie family sold the land to Lyn McKelvie, who amalgamated it with his property 'Flock House' to create an estate of over 3000 acres. Later the farm would become part of the Flock House Training School, which was set up to acknowledge the efforts of British seamen that were killed or wounded during World War I. These seamen had kept shipping lanes open that allowed the New Zealand wool clip to be shipped to England. A fund was established using earnings from wool sales, and was eventually used to purchase the farm in 1924 from the McKenzie’s with the intention of training the dependants of lost or wounded seamen in basic farming before placing them on farms throughout New Zealand. Between 1924 and 1937 over 500 dependents were brought to New Zealand and trained. In 1937 the farm was purchased by the New Zealand

Government with the intention of shifting the focus to training New Zealand nationals. By the time the training facility closed in 1988 a total of 3000 students had been successfully trained. Research Activities The farm has also been used by AgResearch for research purposes. As a research farm the property contributed significantly to productive improvements in New Zealand Agriculture. Specific research projects included the management of tuberculosis, understanding and testing for parasite resistance to animal health remedies, and the status and effect of mineral deficiencies on sandy soils. The property was also used as a quarantine site for the importation of Awassi and East Friesian sheep and Boer goats into New Zealand. As part of downsizing their research facilitates AgResearch offered the Flock House farms for sale earlier this year. Due to their deep cultural connections to the land Ngā Wairiki – Ngāti Apa, represented by Te Rūnanga o Ngāti Apa approached AgResearch and successfully negotiated the purchase of property in partnership with Ātihau-Whanganui Incorporation and Waitatapia Station. Partnerships Eventually Ngā Wairiki – Ngāti Apa would like to own the farms outright, however in the short term because of the size of Te Hou, and the experience and skills required Te Rūnanga o Ngāti Apa deemed it important to bring on board partners that could add value to the business. As such AWHI and Waitatapia station were invited to join, and invest in Te Hou. The relationship is unique in that it represents collaboration between Iwi, a Māori incorporation and a 5th generation Pakeha farming family. It is an opportunity to prove that Māori and non-Māori interests can work together, and is a glimpse into the future of farming in New Zealand Waitatatapia station is owned and operated by brothers Hew and Roger Dalrymple, who bring substantial

experience and knowledge of farming in the area surrounding Te Hou. Their relationship with the land is such that Te Rūnanga o Ngāti Apa Chairperson, Pahia Turia, described them as being as close to tangata whenua as you could get. The Dalrymple brothers are very focused and set on making the shareholders of Te Hou proud. Plans Underway Because the property was a research farm, some of the facilities and infrastructure is excessive and needs to be removed so the farm can operate efficiently as a commercial unit. On top of this there is potential to increase production through increasing soil fertility, applying irrigation and building a feed pad adjacent to the dairy shed. A lot of this work is already underway with a plan to complete development over the next 3-5 years. As part of this some plantation forestry will be removed, whilst other, more sensitive areas will be enhanced through the planting of natives. Within the next ten years it is the intention that the Te Hou partnership will be dissolved and the ownership transferred solely to Nga Wairiki – Ngāti Apa. At that stage AWHI will not only exit with a positive return on investment, but also with the skills and knowledge of farming in a different climatic zone. The relationship between Māori and non Māori partners, will also be looked back on as one of the defining partnerships that set the future for New Zealand agriculture.

Top right: Matauranga Manager Mike Paki during formal speeches Middle left: Piriwiritua Rurawhe with Whanganui kaumatua John Maihi Middle right: Chairperson Mavis Mullins with Director Che Wilson in background Bottom: representatives of the Te Hou farming partnership along with AgReseach, local and central government representatives gather to mark a significant milestone in their relationship Images courtesy of Ngāti Apa

THE SWEET TASTE OF SUCCESS In October 2012, when AWHI CEO Chris Scanlon signed an agreement with Watson & Son for the production of Mānuka Honey from AWHI lands, a long-term relationship of real significance to both parties was established. AWHI is the registered proprietor of 42,000 ha of farmland, some of which is designated and ideal for honey production from existing Mānuka forest resources. In time, more land that is suitable for this purpose will become available. In a visionary move, Chris saw that essentially marginal and unproductive land, unsuitable for beef, sheep or other grazing, could generate a new income stream for the incorporation and looked for a partner who could provide an immediate return on his vision, but more than that could provide a future pathway for AWHI to participate in the value chain that is unique to this special taonga. Denis and Dan Watson are Watson & Son. What used to be a ‘master and apprentice’ relationship has matured into each pursuing their own particular interests in Mānuka Honey. For Dan, running 20,000+ hives and managing a crew of more than 50 staff around the clock throughout the busy harvest season is a demanding but very satisfying lifestyle. For Denis, it is the science behind the unique properties present in Mānuka honey (through wholly-owned subsidiary MānukaMed Ltd) that sees him travelling the world, presenting at major wound-care conferences in the USA, ‘preaching the gospel’ about this 100% natural product whose healing powers have been known to Māori for generations. Between them, Denis and Dan are committed to a long-term harvest resource that will one day see up to 100,000 hives producing sufficient Mānuka Honey to not only provide great tasting honey in a pot, but more importantly provide healing and eliminate suffering for thousands of people, as Mānuka honey is placed in formaries throughout medical health

jurisdictions world-wide as a substitute and replacement for current antibiotic treatments that are failing. A developing partnership with Raukura Hauora O Tainui now sees ManukaMed Ltd products being trialled successfully throughout their care outlets, following sponsorship by Watson & Son Ltd for several of their nursing staff leaders to visit leading wound-care specialists in the USA to learn about the application and efficacy of their honey dressings. Continuing studies are delivering positive outcomes for patients who are compromised with diabetes, cardiovascular disease and impaired chronic wound-healing over a long period of time. In 2014 new CEO, Andrew Beijeman, understands the vision that Denis and Dan have and sees the potential for AWHI to participate in every step of the production process and value chain. ‘The productive Mānuka resource is just the beginning of the relationship’, Andrew says. ‘We know that the variables involved in beekeeping are not dissimilar to the challenges faced by all primary income streams. The health of the bee colonies, the variability of the Mānuka flowering annually, the vagaries of the weather, and the timing of the placement of hives to intersect with the relatively small harvest window of about 6 weeks means that there are no guarantees that one season’s harvest will match the previous one or the next one for that matter!’ ‘Because of their scale, Watson & Son offer us more than just an income stream from previously unproductive land resources. They bring access, capability and expertise that we do not currently have. They offer employment for our people to become apprentices and learners that then return to share their expertise and build our own capability in this area. They offer future opportunity to participate in the Charitable Trust headed by Sir Tamati Reedy and Sir Mason Durie, specifically established

Toitu Te Whenua

as a beneficiary of Watson & Son Ltd to support charitable projects for Māori Incorporations like AWHI who supply the company, to participate in further education, employment and social development programmes for their whānau.’ In the first harvest season in 2013, AWHI lands produced almost 63 tonnes of Mānuka Honey, receiving over $300,000 additional income from this new initiative. Despite a difficult subsequent season in 2014 due to wind, rain and poor flowering, over 47 tonnes of harvested honey still returned over $350,000 to AWHI landowners as the market value of this product continues to increase. Late 2014 will see around 3700 Watson & Son Ltd hives placed around identified sites on AWHI lands. When you next see a busy bee foraging from a Mānuka tree, take a look with fresh eyes at this remarkable creation, understanding more about the qualities that are unique to Mānuka Honey, qualities that will produce value, health and healing, and the sweet taste of a successful future for our whānau both now and for future generations. Top right: (Left to Right) Owners Daniel and Denis Watson. Images courtesy of Watson & Sons Ltd

2013

2,054 HIVES

2014

3,144 HIVES

62,773 kg's

HARVESTED

2014

47,457 kg's

HARVESTED

MANAGEMENT REPORT Our Land During October a storm event caused considerable damage to farms and slowed live weight gains on stock. All stations suffered from slips and damaged fences whilst water systems at Tohunga and Tawanui were affected. Tohunga also suffered damage to bridges and culverts as did Te Pā. The cost of this storm exceeded $50,000. Ongoing maintenance of tracks and fencing continued during the season. This is critical to ensure that staff can successfully and safely operate our farms, and so that the grazing of livestock can be controlled. We continued to protect our living heritage with 206 ha protected under Ngā Whenua Rāhui. On top of this weed and pest control operations continued in conjunction with local authorities. Weed control was particularly important following last year’s dry which created areas of bare ground for thistles to germinate. A kiwi recording programme was completed on a number of breeding properties. In total 24 positive recordings were found. Management has reviewed its pest control operations in light of these results.

Despite this 79,751 lambs were sold at an average value of $102 and at 17.5 kilograms of carcass weight. Despite lower numbers, cows performed well achieving a calving percentage of 85% so that a total of 4792 calves were bred (2013: 5051). A total of 1780 steers were sold (2012:3065) at an average price of $1343 per head which is similar to previous years. Each farm continued to work closely with animal health professionals to maintain the health and well-being of our stock. This is facilitated through an individual animal health plan for each farm. Prices increased for both lamb and beef during the season. In regards to lamb this was due to decreasing consumer resistance to lamb and an improving economic climate in Europe. An international shortage of beef was the main driver behind price increases in this category, a result of reductions in breeding herds in both Australia and the USA. As such prices received during the season were better than the five year average despite the high exchange rate.

Farming infrastructure

As part of an expenditure management strategy seasonal fertiliser applications were cut on all class three grounds. This allowed limited inputs to be focused on the areas where they would produce the greatest benefits.

During the season we continued with priority upgrades to infrastructure. This included the construction of a new effluent pond at AWHI dairy as well as new cattle yards at Te Pā and Papahaua.

Our Livestock

To improve our decision-making during dry season’s two weather monitoring stations were established at Te Pā and Papahaua providing management with better and timelier access to information. This coupled with comparisons to historical data will improve decision-making as a result of seasonal variances in moisture.

A total of 102,183 lambs were bred, down 11,854 on the previous season of which 8,680 was due to fewer ewes wintered and 3174 due to poor reproductive performance during the dry of 2012/13. Lamb survivability was very high due to stock being in good conditions and kind weather. An average lambing percentage of 124% was achieved. Lamb growth rates were impacted due to storms during October which meant lower then targeted weaning weights.

Forestry One hectare of forest was logged at Papahaua Station during the year. No other forestry work was completed on the estate.

Conversations regarding the modernisation of our forestry agreement with Earnslaw One are ongoing. Good progress has been made in building a framework and understanding so that further progress can be made in the new financial year.

Carbon Trading AWHI sold 193,565 NZU’s during the season and received an entitlement from the Crown of 87,551 NZU’s. On top of this 38,609 ERU’s were surrendered to offset an entitlement received in the 2013 fiscal year, on land which was not eligible for entry into the scheme. Due to changes in law around the emissions trading scheme management was no longer able to surrender ERU’s to remove the “surrender obligations” of our 1989 NZU allocation, as planned. Several attempts have been made to lobby government so that AWHI would no longer be disadvantaged, with little progress. These attempts are ongoing.

Mānuka Honey Supplies After a successful 12/13 season we moved to increase the total number of hives from 2054 to 3144. Despite this increase in hive numbers, a poorer season resulted in a drop in production from 62,773 kgs to 47,457 kgs. Preparations are well on their way for next season as we look to increase total hive numbers to 3500.

Value Chain During the year discussions were held with both ANZCO and Ovation as to how AWHI could become more involved further up the value chain. These conversations are on-going, very positive and the outlook for AWHI in this area is very bright.

Our People Managers received basic computer training during the season as the use of technology is becoming an ever important part of our business. A number of staff attended and

completed primary ITO courses and a dog training day was held at Ohorea.

ensuring all staff are covered by a life insurance policy

A safety program was implemented on all farms through Farmsafe. This included hazard identification and management, training and inductions. As part of this review the loading of bridges was reviewed and updated.

Our Performance

AWHI continued to provide support to families employed on the station. This included supporting a school bus service to Ohākune, providing staff with access to health insurance and

During the 2013/2014 season AWHI’s management team has worked hard to recover from last season's dry. AWHI entered the season with 9788 fewer stock units then the previous season as a result of the dry and made the decision to protect stock condition and pastures. Despite targeted expenditure savings, and proactive decisionmaking, the ongoing effects of the

2012/13 season resulted in a net deficit of -891,740 (2013: -4,048,989). Total production of 6.9 million kilograms was achieved relative to 7.5 in the previous year. This decrease is due to ongoing effects of last year’s drought, in particular a reduction in stock wintered and poorer reproductive performance. In addition to this production 600 tonnes of additional silage was conserved as a backup to be used for future droughts. Total milk production

Andrew Beijeman, AWHI CEO and Siwan Shaw, AWHI Business Manager.

increased to 194,060 kilograms of milk solids (168,801 12/13) due to a kinder summer, whilst red meat and fibre production was 6.8 million kilograms (2013: 7.3 million). Gross farm income increased to $17.0 million from $14.0 million. This result was due to higher product values across the majority of categories and stable production. Targeted savings of $1.3 million were made on the 2013 year by withholding fertiliser applications on class three land and by delaying some repairs and maintenance. This, along with increases in gross farm income

resulted in net farm income of $5.1 million (2013: 0.8 million), and an EBITDA of $4.3 million (2013: 0.5 million). As at the 30th of June 2014, term debt totalled $24,617,233, equivalent to 19% of total equity. The increase in debt is due to the purchase of Te Hou at $4.7 million. Cost of finance was equal to $1.655 million which is equivalent to 9.4% of gross revenue. Total equity increased by $2.4 million due to a change in livestock values. Due to the financial position total capital inputs were reduced from $4.5 million in 2013 to $1.86 million.

Concluding Comments The 2014 season will be remembered as one of on-going improvement and recovery. Gains were made in moving further up the value chain, in building partnerships, in diversifying income streams and in environmental protection. The management team would like to wish Chris Scanlon all the best for the future and look forward to working with our new CEO Andrew Beijeman to further develop AWHIâ&#x20AC;&#x2122;s potential.

TOTAL PRODUCTION

2007/8

5,800,000 kg's

2008/9

6,100,000 kg's

2009/10 7,100,000 kg's

2010/11 7,200,000 kg's

2011/12 7,950,000 kg's

2012/13 7,800,000 kg's

2013/14 6,945,729 kg's

2009/10

2010/11

2011/12

2012/13

2013/14

GROSS REVENUES

13.4 M

18.1 M

20.5 M

17.1 M

17.5 M

NET FARM INCOME

4.4 M

6.4 M

8.4 M

COST OF FINANCE

1.1 M

1.3 M

1.4 M

EARNINGS BEFORE INTEREST AND DEPRECIATION

3.3 M

5.1 M

7.3 M

NET SURPLUS/ DEFICIT

0.7 M

2.0 M

3.7 M

EQUITY

0.8 M

1.4 M

0.5 M

5.1 M

1.7 M

4.3 M

-0.9 M -4.0 M

165.7 M

178.9 M

137.9 M

127.8 M

130.3 M

Te Āti Hau Trust Chairperson's Report I tau, kua tau, ina te pai o te tau! Tēnā tātau katoa. Now that the Trust is fully established with no challenges to its existence, it is with pleasure that I provide our parent body, AWHI, with this report.

BUDGET $

2014 $

44,397

Toitu Te Tangata

Income Surplus Brought Forward Tribal Purposes from AWHI Interest Received - Gross

410,000 435,215 50,000

56,034

The AWHI grant increased because the Trust received the residue Awhiwhenua training funds. 504,397 535,646 Administration Expenses Administration

29,871

Audit Fees

3,462

Bank Fees & Charges

Computer Expenses

493

Committee Expenses This year we made sure all expenses were clearly allocated to projects. Our administration costs, including meeting costs is purely administration. Housing & Insulation

20,755 65,000

54,624

100,000

84,853

15,000

17,223

60,000

45,068

15,000

16,500

34 houses insulated. National Māori Housing Hui 1 - 4 May 2014

"Ki a koe te morehu whenua, Ki a au te morehu tangata" -Te Rangihiwinui

150 people gathered in Whanganui where major new housing reforms were announced. Awhiwhenua Training Project Our 8 students graduated, with 2 returning to pursue higher qualifications. 8 more students were enrolled in 2014. Rather than purchase a van we pay a contribution towards costs, reducing the overall outgoings. Tangihanga Koha A huge acknowledgement to Don Robinson for ensuring our koha for a tent is taken to our grieving whānau.

Website & Database Database Expenses

10,000

1,052

20,000

5,014

We are nearly there e te whānau. We regret it has taken much too long to sort our online access for you all. This will be resolved by the end of June 2015. Grants Administrator Debbie Te Riaki fulfilled this role and will continue on after being replaced as an Independent Trustee. Grants Made General Grants

66,950

Education Grants

194,200

The demand for grants continued to escalate. See below. Total Grants

190,000 261,150

Total Expenditure

475,000 485,484

Surplus / (Deficit) to 30 June 2014

29,397

50,162

Special scholarships: The Trust’s recommendations to the AWHI Board for the following scholarships were accepted: Ohotū x 4

$2,000 per year for two years

Jacob Robinson Josh Firmin Wiremu McFater Matthew Kidd

Robin Murphy Peehi

$8,000 per year for two years

Avaliable 2015

Ātihau-Whanganui Ravensdown Scholarship The successful first recipient Sam O’Donnell retained the scholarship in 2014. Farewell and welcome to Trustees We give our heartfelt thanks to Debbie Te Riaki for the role she played as Independent trustee since the establishment of the Trust in 2009. Debbie was replaced by Anton McKay after AWHI advertised in the Whanganui Chronicle and received four applications. Whatarangi Murphy-Peehi was replaced by Te Tiwha Puketapu as a Board Trustee. E mihi ana ki ngā kaitiaki tawhito, ki ngā kaitiaki hou. Budget constraints For the first time since the Trust was established in 2009 we decided to give recognition to the strain AWHI came under after the drought in 2012-13. We decided to return the unpaid dividends AWHI lent to the Trust to earn interest. We also decided to reduce the size of a grant if an applicant had received funding in the past. For the next financial year we decided to reduce our administration costs and the number and type of projects. 2014-15 The AWHI Board agreed to fund the Trust for the 2014-15 financial year. One of our tasks is to consider aligning the Trust financial year to the school and academic calendar of January to December.

Te Āti Hau Trust Budget 2014-15 2014-15 Cash at 30.6.14

50,162 The cash income will reduce because we have returned the borrowed unpaid dividends to AWHI so the Incorporation does not have to borrow $1.5M.

Interest

30,000

Total Income

80,162

Admin

65,000 We plan to reduce administration by holding 3 meetings per year.

Housing

30,000 Home and Dry no longer has a contract as provider. We have developed a relationship with Home Right and look forward to continuing our support of insulation.

Whanganui Regional Housing

5,000 The conclusion of the national Māori housing hui has seen us pass the representation role of the Trust at the national level to another organisation in the rohe.

Tangi

20,000 Sadly we anticipate an increase in deaths.

Awhiwhenua

45,000 We propose continuing our relationship with Land Based Training and look forward to our new AWHI CEO helping align the programme with AWHI.

Database

10,000 As promised – we will be online this financial year!

Grant admin

10,000 This admin role is a critical support function.

Grants

275,000 The demand for grants will increase.

Total expenditure

460,000

AWHI GRANT

380,000

Nāku nā Toni Waho Chairperson

Lef to Right: Trustees Don Robinson, Keria Ponga, Toni Waho (Chair), Anton McKay, Paul Maguire (Trust Secretary) and Te Tiwha Brendon Puketapu.

Awhiwhenua Education Programme Awhiwhenua is now in its second year of operation. The education program is a joint initiative between ĀtihauWhanganui Incorporation and Land Based Training. It provides Level 3 training in agriculture through a mixture of both class room and practical experience, is non-residential and is covered over a 43 week period through full time study. Classroom teaching takes place at Ngā Mōkai Marae, south of Ohākune, provided by Land Based Training tutor Hikoi Te Riaki overseen by head tutor Derek Priest. Course content includes vehicles, machinery, handling livestock, fencing, milk production health and

safety and pests and diseases. The course covers both sheep and beef and dairy, with a greater emphasis on sheep and beef. During practical teaching days, students are taught at a number of locations, including Ngā Mōkai Marae, Te Kaahu Estates, Taiwiri Papakainga and on the farms of the Incorporation. The course provides core agricultural skills, increasing the skills and capabilities of trainees in a working environment so that they are available for full time employment on graduation. Applications for the 2015 intake close on Friday the 28th of November.

More information can be found at http://www.landbasedtraining.co.nz/ courses/farming-2

Top left: Land Base Training Tutor Hikoi Te Riaki with Operations Manager James Towers Top Right: Students (Lef to Right) Jackson Kui-Rickit and Christian Hawira Bottom Left: Hikoi Te Riaki shows Jackson Kui-Rickit how to work the stockyard gear. Bottom Right: Students Jackson KuiRickett (standing), Vincent Hawira (centre) and Tuatini Mareikura (left) also undertake theory in class as part of their training. Images courtesy of Young Country Magazine

Te Āti Hau Trust 30 June 2014 Grants General Grant Categories

Recipients

Sporting Grant

Kyle Butters

1,000

Sporting Grant

Rangiapehu Rus Te Patu

700

Sporting Grant

Roimata Blackburn

400

Sporting Grant

Ruamaitera Erueti

700

Sporting Grant

Thomas Nathan

200

Sporting Grant

Paige Hourigan

1,000

Sports Costs

TTWM Whānau

500

2,400

Sports Grant

Chenise Hibbard-Nitz

350 500

1,600

Sports Travel International

Ariaana Osborne

Heeni Ranginui Marks

House repair

Kaumoana Kiddie

1,600

Te Roopu o te Whitu Māori Club

1,000

Caleb Mareikura Martin

500

Hui Aranga

Sports Travel International

Blake Akapita

500

Hui Aranga

Ruapehu Māori Catholic Club

1,000

Sports Travel International Sports Travel NZ

Ereti Williams

500

Hui Aranga

St Peter Chanel

1,000

Sports Travel NZ

Michelle Tamehana

Hui Aranga

St Vincents

1,000

Sports Travel NZ

Deshannon Matthews

Hui Aranga

Te Wainui-arua

1,000

Travel Grant

Hui Aranga

Te Waiora Club

1,000

Te Kura Kaupapa o Ngāti Rangi

Learning Aid

Gloria Johnson

500

Travel Grant

Maria Ley

500

Marae Grant

Pungarehu Marae

1,000

Travel Grant

Rio Bell

200

Marae Grant

Tirorangi Pah

1,000

Travel International

Jessica Hemi

500

Medical

Zena Hough

Travel International

Kaiwhaiki Pa Trust

Medical

Larrie Moutoa Waho

1,500

Travel International

Kealyn Marshall

500

Medical

Pirihira Barbara Healey

1,500

Travel International

Teresa Peeti

500

Travel International

500

Present research to 2014 Indigenous Conference

Tu Williams

500

Poutamakiterangi Taiaroa

Travel to Te Papa Matariki

Te Reanga Morehu O Ratana

800

Purchase Ipad for Down Syndrome moko

Jean Josephs

600

Travel to Te Papa Matariki

Te Taikura O te Awa

800

Tira Hoe Waka

Replace radio station mainframe server

AWA FM Trust

Whanganui Iwi Wananga

Anahera Sheehy

200

Sporting Grant

Jacob Hiroti

200

Whanganui River Hunting & Food Festival

Daryn Te Uamairangi

Rowing fees + travel Sporting Grant

Jamiee Lovett

Raukura Waitai

Sporting Grant

Taniko Tamehana & Tarana Turia

800

Youth voyage Spirit of NZ

Sporting Grant

Kahureremoa Peina Aki

700

General Grant Categories

Recipients

40 Piupiu

Kia Whaiora Kapahaka Group

café signage + chilled food cabinet

Mauri Ora me Tamaupoko

Costs for 2 cultural exchange students to Germany

Paris Urwin

Cultural Exchange to Germany

Chanelle Wikura Kuka

500

Emergency roof repairs

Kathleen Nikara

House repair

2,000 700 1,000

300

10,000

1,000

2,500 500 1,700

2,000

10,000 3,000

500

66,950

Te Ä&#x20AC;ti Hau Trust 30 June 2014 Grants Recipients

Education Categories

Ana Marie Kawana

Tertiary - No Fees

Deborah Owens

Recipients

Education Categories

150

Jordan Urwin

Secondary School

250

Tertiary - No Fees

150

Kaea Josephs

Secondary School

250

Diana Kawana

Tertiary - No Fees

150

Kaira lee Mateparae

Secondary School

250

Lorna Thompson

Tertiary - No Fees

150

Secondary School

250

Ngahiwi Waititi

Tertiary - No Fees

150

Kaleb Lakopo LamaLove

Te Aroha Hakaraia

Tertiary - No Fees

150

Kimihia Joseph

Secondary School

250

Zen Simon Tume

Tertiary - No Fees

150

Kristie Rihia

Secondary School

250

Lavoy Treanor

Secondary School

250

Leila Blackburn

Secondary School

250

Luka Pirikahu

Secondary School

250

Myrin Kumeroa

Secondary School

250

Opetini Dryden

Secondary School

250

Peter Waldin

Secondary School

250

Ray-John Pokiha Fox

Secondary School

250

Rebekah Butters Chamberlain

Secondary School

250

Reimana Rameka

Secondary School

250

Rio Bell

Secondary School

250

Roimata Hipango

Secondary School

250

Shane Matthews

Secondary School

250

Shane Matthews returned

Secondary School

(250)

Shania Gray

Secondary School

250

Tahana Metekingi

Secondary School

250

Tama Hauiti Potaka

Secondary School

250

Tanisha Elliot

Secondary School

250

Te Oranga Te Awhe

Secondary School

250

Te Raurangi Keremeneta

Secondary School

250

1,050

Recipients

Education Categories

Aisha Short

Secondary School

250

Alexander HapeTonihi

Secondary School

250

Anahera Sheehy

Secondary School

250

Anahera Treanor

Secondary School

250

Arihi Tonihi

Secondary School

250

Ben Kidd

Secondary School

250

Blake Akapita

Secondary School

250

Cassidy Allen

Secondary School

250

Cherokee Walters

Secondary School

250

Chevannah Puohotaua

Secondary School

250

Christina Malcolm

Secondary School

250

Dallas Rowan

Secondary School

250

Daniel Matangaro

Secondary School

250

Danielle Rihia

Secondary School

250

Deanne Rihari

Secondary School

250

Haimona Teutupoto

Secondary School

250

Hikurangi Ranginui

Secondary School

250

Te Whakahawea Pakai

Secondary School

250

Hinehou Treanor

Secondary School

250

Teina Morrell

Secondary School

250

Hineriki Te Awhe

Secondary School

250

Temepara Waitai

Secondary School

250

Hiona Taku

Secondary School

250

Thomas Nathan

Secondary School

250

Hoani Ranginui

Secondary School

250

Tibet Ranginui

Secondary School

250

Jackson Tamatea

Secondary School

250

Tikara Kerehoma

Secondary School

250

Jacob Hiroti

Secondary School

250

Trent Bell

Secondary School

250

Jayda EdmondsLama

Secondary School

250

Tumanako Kumeroa

Secondary School

250

Jayden Wallace

Secondary School

250

Tureti Puohotaua

Secondary School

250

Waihe Quirke

Secondary School

250

Recipients

Education Categories

Wayne Beamsley

Secondary School

Whaitu Hurihia Wipaki Pakai

Recipients

Education Categories

250

Daniel Henare Kidd

Tertiary Full Time

700

Secondary School

250

Daniel Kidd

Tertiary Full Time

700

Secondary School

250

Denise Matera Taikato Tertiary Full Time

500

Donna Lee Stott

Tertiary Full Time

700

Eaudessey Savage

Tertiary Full Time

700

Edward Job

Tertiary Full Time

600

Elijah Pue

Tertiary Full Time

600

15,250 $

Recipients

Education Categories

Lynette Stebbing

Tertiary Part Time

350

Bella-Marie Blackburn

Tertiary Part Time

350

Elizabeth Namana

Tertiary Full Time

700

Ellamarie Smallman

Tertiary Full Time

600

Erina Phillips

Tertiary Full Time

600

Eva Taepa

Tertiary Full Time

700

Galaxie Te Aho

Tertiary Full Time

700

Gipsy Foster

Tertiary Full Time

700

Hamish Nicoll

Tertiary Full Time

700

Hemi Bob Hohepa

Tertiary Full Time

700

Hinekorangi Broughton

Tertiary Full Time

700

Hope Brunton

Tertiary Full Time

700

Hura Wiari

Tertiary Full Time

700

Jacqueline Rukuwai

Tertiary Full Time

500

Jana Topia

Tertiary Full Time

700

Jarred Anae

Tertiary Full Time

700

Jason Wikeepa

Tertiary Full Time

500

Jesse Rihia

Tertiary Full Time

700

Jesseallen Raston

Tertiary Full Time

700

Jessica Tyson 2013

Tertiary Full Time

700

Jessica Tyson 2014

Tertiary Full Time

600

Jimmy Mihaka

Tertiary Full Time

500

Joel Rudolph

Tertiary Full Time

700

Jordan Benge

Tertiary Full Time

700

Joshua Holster

Tertiary Full Time

700

Justin Brooks

Tertiary Full Time

700

Kaiora Hohaia-Patea

Tertiary Full Time

700

Recipients

Education Categories

Chris Te Tua

Tertiary Full Time

600

Christiane Teriaki

Tertiary Full Time

600

Alaska Dobbs

Tertiary Full Time

600

Alayna Sharma

Tertiary Full Time

700

Amiorangi Tawaroa

Tertiary Full Time

700

Annalise Enoka

Tertiary Full Time

600

Arama Wakefield

Tertiary Full Time

700

Ariana Mariu

Tertiary Full Time

600

Arihia Hartley

Tertiary Full Time

600

Arihia McGregor

Tertiary Full Time

700

Ashlee Tyson

Tertiary Full Time

600

Astra Waitai

Tertiary Full Time

700

Barbara Taurerewa

Tertiary Full Time

700

Brya Sharland

Tertiary Full Time

700

Caitlin Grace Hirini

Tertiary Full Time

700

Callum Nicoll

Tertiary Full Time

700

Cameron Kumeroa

Tertiary Full Time

700

Camilla Allen

Tertiary Full Time

700

Catherine Goodhall

Tertiary Full Time

700

Catherine Marawaiti

Tertiary Full Time

700

Chanelle Ihakara

Tertiary Full Time

700

Charles Simon

Tertiary Full Time

500

Karamea Graham Ratana

Tertiary Full Time

700

Cheryl Te Moana

Tertiary Full Time

600

Karamea Ratana

Tertiary Full Time

700

Cole Tawaroa

Tertiary Full Time

700

Karen Butler

Tertiary Full Time

700

Colin Tawhitapou

Tertiary Full Time

600

Katie Scoringe

Tertiary Full Time

700

Cory Miles

Tertiary Full Time

600

Kaylin Hunia

Tertiary Full Time

700

Dakota Ruta

Tertiary Full Time

700

Kimberley Jones

Tertiary Full Time

600 25

Te Ä&#x20AC;ti Hau Trust 30 June 2014 Grants

Recipients

Education Categories

Kirsti Treanor

Tertiary Full Time

600

Kulwinder Brooks Nagra

Tertiary Full Time

Laura Kingsford

Recipients

Education Categories

Tertiary Full Time

700

600

Rerekohu Pewhairangi 2013

700

600

Rerekohu Pewhairangi 2014

Tertiary Full Time

Lorraine Tyson

Tertiary Full Time

700

Rukuwai Katene

Tertiary Full Time

600

Louise Tyson

Tertiary Full Time

600

Samuel Butters

Tertiary Full Time

600

Lynda Holster

Tertiary Full Time

500

Samuel Donaldson

Tertiary Full Time

600

Maddisen Ratten

Tertiary Full Time

700

Maia Ratana

Tertiary Full Time

700

Sarah Hutana -Te Aho Tertiary Full Time 2013

Maraea Leng

Tertiary Full Time

600

Sarah Te Aho 2014

Tertiary Full Time

700

Meikura Willams

Tertiary Full Time

600

Sarita Taurima

Tertiary Full Time

700

Mereana Hooker 2013

Tertiary Full Time

700

Sasha Te Ahura-Mille

Tertiary Full Time

700

Saskia Paewai

Tertiary Full Time

700

Mereana Stanley

Tertiary Full Time

700

Shane Coley

Tertiary Full Time

700

Meteria Katene

Tertiary Full Time

500

Sharon Marshall 2013

Tertiary Full Time

700

Michelle Ryder

Tertiary Full Time

700

Sharon Marshall 2014

Tertiary Full Time

600

Naima Titter

Tertiary Full Time

700

Sheryl Witehira

Tertiary Full Time

700

Natalia Repia

Tertiary Full Time

700

Sheryle Maniapoto

Tertiary Full Time

700

Natalie Healey

Tertiary Full Time

700

Simon Miles

Tertiary Full Time

700

Natasha Johnson

Tertiary Full Time

700

Sophie Bell

Tertiary Full Time

600

Ngapera Akapita 2013

Tertiary Full Time

700

Stephanie kingsford 2013

Tertiary Full Time

600

Ngapera Akapita 2014

Tertiary Full Time

600

Stephanie Kingsford 2014

Tertiary Full Time

500

Ngaputiputi Akapita

Tertiary Full Time

700

Stirling Bartlett

Tertiary Full Time

700

Ngaranga Haerewa

Tertiary Full Time

700

Susan Williams

Tertiary Full Time

600

Nicole Claughton

Tertiary Full Time

700

Tertiary Full Time

700

Nikita Hiroti

Tertiary Full Time

600

Tamarongo GraySharp

Nina Rautahi

Tertiary Full Time

500

Tania Pirikahu

Tertiary Full Time

700

Olivia Cockburn

Tertiary Full Time

700

Tertiary Full Time

700

Papatuanuku Tamarua

Tertiary Full Time

600

Te Ana Rose Ngatuere Te Ara Kuka

Tertiary Full Time

500

Pareraukura Butler

Tertiary Full Time

700

Te Reo ote Aroha Paki Tertiary Full Time

700

Patrick Woon

Tertiary Full Time

700

Tearita Glendenning

Tertiary Full Time

700

Paul Baker

Tertiary Full Time

500

Teddy Hore

Tertiary Full Time

700

Pauline Frances Hiroti

Tertiary Full Time

600

Teena Monk

Tertiary Full Time

700

Pera Ratana

Tertiary Full Time

600

Teuila Ta'ala

Tertiary Full Time

700

Pirihia Waitai

Tertiary Full Time

700

Thomas Stebbing

Tertiary Full Time

700

Pita Taylor-Heke

Tertiary Full Time

700

Tiaki Tume

Tertiary Full Time

700

Rachel Miles

Tertiary Full Time

700

Toni-Maree Emery

Tertiary Full Time

700

Renee Bradley

Tertiary Full Time

700

Troy Brown

Tertiary Full Time

500

Recipients

Education Categories

Recipients

Education Categories

Troy Tamakehu 2013

Tertiary Full Time

600

Kelly Waho

Medical

700

Tumanako Adams

Tertiary Full Time

700

Loro-Lee Emery

Medical

700

Tyrone Winterburn

Tertiary Full Time

500

Malachi Ropata

Medical

700

Utiku Tyson

Tertiary Full Time

700

Marion Hohepa

Medical

600

Waitapu Potaka 2013

Tertiary Full Time

600

Medical

1,000

Waitapu Potaka 2014

Tertiary Full Time

500

Patricia Dodunski 2013

Yvette Simon

Tertiary Full Time

600

Patricia Dodunski 2014

Medical

1,500

Ron Hellriegel

Medical

700

Tammy James

Medical

1,000

Tina Te AhuruJurgens

Medical

1,500

92,900 Recipients

Education Categories

Todd Sheridan

NgÄ Muka O Te Reo

Recipients

Education Categories

Amanda McKellar

Medical

700

Campbell Hooker

Medical

1,500

Adrienne Wharehinga

Medical

700

Ashley Hape-Tonihi

Medical

700

Caroline Komene

Medical

700

Christopher Brooks

Medical

1,500

Claire Enright

Medical

700

Deshannon Matthews

Medical

700

Desmond Tunua

Medical

1,500

Dhyanne Hohepa

Medical

700

Erena Brown Wikeepa Medical 2013

1,500

Erena Wikeepa 2014

Medical

1,500

Georgina Hohepa

Medical

700

Georgina Hohepa

Medical

700

Hoani McFater

Medical

600

Irene Tukerangi

Medical

700

Jasmin Te Ture

Medical

700

Kahu Butler

Medical

700

Karen Butler

Medical

Korina Mullins

700

29,200 Recipients

Education Categories

Angela McGregor

High Performance

1,000

Ariana Mariu

High Performance

800

Cheyenne Ruta

High Performance

1,000

Felicity Nepia

High Performance

1,000

Jeanette Trego

High Performance

1,000

Kendrex KereopaWoon

High Performance

1,000

Lucy Walker

High Performance

1,000

Mahinarangi Torrey

High Performance

1,000

Mary Cameron

High Performance

1,000

Miriama Mariu

High Performance

1,000

Scott Cudby

High Performance

800

Seth Clement

High Performance

1,000

Tomika Terry

High Performance

1,000

Werina T Phillips

High Performance

800 13,400

Recipients

Education Categories

700

Conan Cassidy

Overseas Study

1,000

Medical

700

Evelyn Grace Millynn

Overseas Study

1,000

Kayla Gray

Medical

1,500

Keepa Hipango

Overseas Study

2,000

Kayla Tahana

Medical

700

Overseas Study

1,000

Kelly Anahera Waho

Medical

700

Paparangi Hipango 2013

Te Ä&#x20AC;ti Hau Trust 30 June 2014 Grants Recipients

Education Categories

Paparangi Hipango 2014

Overseas Study

2,000

Troy Tamakehu 2014

Overseas Study

2,000 9,000

Recipients

Education Categories

Einar Waitai-Herald

PHD

2,000

Te Kiira Osborne

PHD

2,000

Rawiri Tinirau

PHD

3,000 7,000

Recipients

Education Categories

Jamiee Lovett

Post Graduate

1,500

Jessica Smith

Post Graduate

1,000

Leanne Kerehoma

Post Graduate

1,500

Lisa Ann Pelayo

Post Graduate

1,500

Marama Cameron

Post Graduate

1,500

Mary Jones

Post Graduate

1,500

Matariki Williams

Post Graduate

1,500

Mereana Hooker 2014

Post Graduate

1,500

Sakura Stirling

Post Graduate

1,500

Shannon Heka

Post Graduate

3,000

Stacey Howes

Post Graduate

1,500

Tarapui Bryers Brown

Post Graduate

1,500 19,000

Recipients

Education Categories

Jonathon Osborne

Agriculture

3,000

Rayna Waitai

Agriculture

3,000 6,000

Total

194,200

Top: The Raetihi Ripper Trail Ride participants in action Centre: Shareholder Tour 2014 at Tawanui Station Bottom: Awhiwhenua 2014 Student Intake

Ä&#x20AC;TIHAU-WHANGANUI

INCORPORATION FINANCIAL STATEMENTS for the year ended 30 June 2014 INCORPORATION FINANCIAL STATEMENTS CONTENTS 30

Shareholders and Committee of Management Information

Statement of Financial Performance

Statement of Movements in Equity

Statement of Financial Position

Statement of Cashflows

Notes to the Financial Statements

Auditors' Report

Ä&#x20AC;TIHAU-WHANGANUI INCORPORATION SHAREHOLDING AND COMMITTEE OF MANAGEMENT DISCLOSURES FOR THE YEAR ENDED 30 JUNE 2014 No. of Shareholders No. of Shares Held Shareholding Information Greater than 5,000 shares 12 0.15% 111,973.40 8.91% Between 1,000 and 5,000 shares 243 2.97% 467,020.73 37.17% Between 500 and 1,000 shares 307 3.75% 213,769.70 17.01% Between 100 and 500 shares 1,419 17.37% 337,306.94 26.85% Between 5 and 100 shares 3,772 46.10% 122,250.30 9.73% Between 1 and 5 shares 1,408 17.21% 3,809.85 0.30% Under 1 share 1,019 12.45% 398.08 0.03% Totals 8,180 100.00% 1,256,529.00 100.00% Committee of Management Shareholding CoM members have the following shares in the incorporation registered in their names as at 30 Sept 2014 Che P Wilson Don E Robinson Jim Edmonds Mavis Mullins (Chairperson) Te Tiwha Puketapu Toni J D Waho Whatarangi Murphy-Peehi

Nil 1,218 Nil 1,000 Nil 1,274 2,641

This schedule does not include shareholdings registered in the name of Trusts of which a CoM member may be a beneficiary Committee of Management Attendance of Meetings There were 8 monthly and 3 special meetings of the Committee during the year ending 30 June 2014 Member's attendance was as follows: Ordinary Special Che P Wilson 7 3 Dana K Blackburn (resigned 9 Dec 2013) 3 2 Don E Robinson 8 3 Jim Edmonds (appointed 9 Dec 2013) 5 1 Mavis Mullins (Chairperson) 8 3 Te Tiwha Puketapu 8 3 Toni J D Waho 8 3 Whatarangi Murphy-Peehi 8 3 Committee of Management Remuneration Members were paid fees and travel allowances during the financial year ended 30 June 2014. Che P Wilson Dana K Blackburn Don E Robinson Jim Edmonds Mavis Mullins (Chairperson) Te Tiwha Puketapu Toni JD Waho Whatarangi Murphy-Peehi

Fees Travel Comments $ $ 25,000 Nil 11,089 1,796 To 9th Dec 2013 25,000 248 13,911 2,354 From 9th Dec 2013 45,000 Nil Vehicle provided 25,000 3,068 25,000 1,019 25,000 1,738

Ä&#x20AC;TIHAU-WHANGANUI INCORPORATION STATEMENT OF FINANCIAL PERFORMANCE FOR THE YEAR ENDED 30 JUNE 2014

Farm Income: Gross Revenue from Farming Operations Livestock Purchases Change in Livestock Numbers Gross Farm Income / (Loss)

Notes 2

2014 $ 17,530,292 (497,469) 49,424

Farm Expenses Net Farm Income / (Loss) Other Income: Rent from Properties Proceeds from Sale of NZU's Interest and Dividends Gain on Disposal of Assets Other income

Total Income / (Loss) Less Administration Expenses: Accountancy, Legal & Consultancy Audit Fee Governance & Shareholder Meetings Employment, Recruitment & Training Project Expenses Administration Expenses

54,946 710,483 8,135 16,028 316,766

405,286 34,670 429,012 395,754 42,230 241,804

Net Operating Surplus Before Interest & Depreciation Less Cost of Finance: Interest

Less Non Cash Items: Depreciation and amortisation Loss on Disposal of Assets

3,532,580 149,080

Net Operating Surplus / (Deficit) Revaluation of Shares Gain on Disposal of Shares Share of Papahau Forestry Partnership

(210,072) (21,973)

Net Surplus / (Deficit) before taxation Taxation Expenses Net Surplus / (Deficit) for the Year

2014 $

2013 $

17,082,247

17,139,496 (1,347,498) (1,747,781) 14,044,218

(11,962,224) 5,120,023

(13,238,959) 805,259

1,106,357 6,226,380

101,431 176,285 97,536 5,628 416,467 797,348 1,602,607

1,548,756

386,872 28,806 477,237 345,008 164,377 149,168 1,551,467

4,677,625

51,140

1,655,659 3,021,966

1,432,397 (1,381,258)

3,681,661 (659,695)

3,087,762 1,472 3,089,234 (4,470,492)

(232,045) (891,740)

399,946 49,106 (27,549) 421,503 (4,048,989)

(891,740)

(4,048,989)

These statements should be read in conjunction with the accompanying notes.

ĀTIHAU-WHANGANUI INCORPORATION STATEMENT OF MOVEMENTS IN EQUITY FOR THE YEAR ENDED 30 JUNE 2014

2014 2013 Notes $ $ PRE 2004 EQUITY Balance at the beginning of the year Less current year Provision for Dividend Pre 30 June 2004 Equity at the end of year

17,395,589 (753,917) 16,641,672

18,086,670 (691,081) 17,395,589

(891,740)

(4,048,989)

1,332,883 11,940 1,805,222 1,340,210 254 3,598,770

1,072,560 (6,031,405) (9,007,834)

POST 2004 EQUITY Net deficit for the year Revaluation of Land & Buildings Papahau Forestry Partnership Livestock Carbon Credits (NZUs) Prior year adjustment and tax Payments Total recognised revenues and expenses Less Distributions Scholarships Te Āti Hau Trust Distribution

12,500 16,000 410,000 390,000 422,500 406,000

Post 2004 Equity at beginning of the year Post 30 June 2004 Equity at end of year

110,442,491 113,618,761

119,856,325 110,442,491

TOTAL EQUITY

130,260,432

127,838,080

These statements should be read in conjunction with the accompanying notes.

ĀTIHAU-WHANGANUI INCORPORATION STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2014

2014 2013 Notes $ $ EQUITY 130,260,432 127,838,080 Represented by: CURRENT ASSETS Cash at Bank 29,717 426 Accounts Receivable 1,245,667 491,029 Work in Progress - Buildings 63,414 Te Āti Hau Trust 10 607,590 Accrued Income - 150,313 GST - 22,558 Stock on Hand Livestock 26,772,989 24,918,345 Wool on Hand - 73,291 Stock Feed on Hand 818,559 523,660 Carbon Credits on Hand - ERU's 9 55,271 59,203 Total Current Assets

29,593,208

26,238,824

CURRENT LIABILITIES Cash at Bank 11 - Accounts Payable 806,114 Employee Entitlements 253,751 Accruals 149,553 Term Loans due within 12 Months 11 8,900,000 GST 372,800 Unclaimed Dividends Due 10 66,513 Provision for Future Forestry Expenses 39,993 Provision for Dividend 6 753,917 Total Current Liabilities 11,342,641

833,972 1,112,132 305,254 112,394 8,000,000 300,203 39,993 691,091 11,395,039

WORKING CAPITAL 18,250,568

14,843,785

NON-CURRENT ASSETS Property, Plant & Equipment 3 126,327,781 126,861,648 Investments 7 8,955,164 2,332,647 Emission Trading Scheme Carbon Credits 9 1,344,142 Total Non-Current Assets 136,627,087 129,194,295 NON-CURRENT LIABILITIES Term Loans 11 20,962,967 16,200,000 Unclaimed Dividends 10 1,587,590 Te Hou Deferred Capital Contribution 8 2,066,666 Total Non-Current Liabilities 24,617,223 16,200,000 NET ASSETS 130,260,432 127,838,080 Ātihau-Whanganui's Committee of Management authorised the financial statements for issue on 23 October 2014. Signed for and on behalf of the Committee

Mavis Mullins Chairperson 23 October 2014

Che Wilson Chairperson of the Audit and Risk Committee 23 October 2014

These statements should be read in conjunction with the accompanying notes.

ĀTIHAU-WHANGANUI INCORPORATION STATEMENT OF CASHFLOWS FOR THE YEAR ENDED 30 JUNE 2014 Notes Cash flows from operating activities

2014 $

2013 $

Cash was received from Gross Receipts from Farm Production 17,368,165 16,759,530 Other Income receipted from Stations 277,002 41,000 Other Income 1,077,815 484,668 Interest & Dividends Received 6,830 97,530 18,729,812 17,382,728 Cash was applied to Livestock Purchases (470,695) (1,454,394) Payments to Farm Suppliers (10,047,775) (10,354,703) Payments to Employees (2,780,461) (2,677,036) Administration & Governance Costs (1,606,753) (1,490,101) Interest Paid (1,647,786) (1,402,741) Taxation Receipts 6,070 645 (16,547,400) (17,378,330) Net Cash from / (used in) operating activities

2,182,412

Cash flows from investing activities

4,398

Cash was received from Proceeds from sale of property, plant and equipment 65,317 40,435 Proceeds from Investments realised - 194,983 65,317 235,418 Cash was applied to Acquisition of property, plant and equipment (1,864,199) (4,254,755) Purchase of Investments (4,763,094) 1,130 Papahau Forestry Expenses (12,862) (24,245) (6,640,155) (4,277,870) Net cash from / (used in) investing activities

(6,574,838) (4,042,452)

Cash flows from financing activities Cash was received from Bank Advances 5,662,967 4,200,000 Repayment of Advances from Te Āti Hau Trust 980,000 6,642,967 4,200,000 Cash was applied to Distribution to Shareholders (624,576) (535,083) Distribution to Te Āti Hau Trust (450,000) (350,000) Advances to Te Āti Hau Trust (300,202) (245,364) Scholarships Paid (12,500) (16,000) (1,387,278) (1,146,447) Net cash from / (used in) financing activities 5,255,689 3,053,553 Change in Bank Balances Add Opening Bank Balances Closing Bank Balance

863,263 (833,546) 29,717

These statements should be read in conjunction with the accompanying notes.

(984,501) 150,955 (833,546)

ĀTIHAU-WHANGANUI INCORPORATION NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2014 1. Statement of Accounting Policies Reporting Entity Ātihau-Whanganui Incorporation is a Māori Incorporation incorporated under the Te Ture Whenua Māori Act 1993 and prepares general purpose financial statements in accordance with generally accepted accounting practice in New Zealand. The Incorporation qualifies for differential reporting as it is not publicly accountable and is not large in terms of the criteria set out in the Differential Reporting Framework. The Incorporation has taken advantage of all differential reporting concessions available to it except that some additional disclosures have been made. An unaudited Statement of Cash Flows is provided for information purposes. Measurement Base Unless otherwise stated the accounting principles recognised as appropriate for the measurement and reporting of earnings and financial position on an historical cost basis have been followed by the entity. SPECIFIC ACCOUNTING POLICIES The following specific accounting policies which materially affect the measurement of profit and financial position have been applied. a) Accounts Receivable

required to be returned to the Crown if the carbon stored in the specified area reduces. NZUs are initially recognised at cost. Units held at year end are valued at market value. If the obligation to return units arises this obligation is recognised on the Statement of Financial Position. Net proceeds relating to trading of NZUs are reflected in the Statement of Financial Performance. c) Investment in Shares Investments held at Trading Banks are stated at cost. Where shares are on the unlisted or listed stock exchange they are valued at market value. Other shares are reflected at the lower of cost or net realisable value (all currently at cost). d) Investment in Associates Associates are entities over which the Incorporation has significant influence but not control. Investments in Associates are accounted for in the financial statements using the equity method of accounting after initially being recognised at cost. e) Livestock on hand Livestock is recorded at market value as assessed by a livestock valuer, except for purchased breeding bulls which are reflected at cost. Herd values are used for tax calculation purposes. f) Stock Feed on hand

Accounts Receivable are recorded at estimated net realisable value.

Stock feed is valued at cost. Cost is based on a firstin first-out basis and includes expenditure incurred in acquiring the feed and bringing it to its present condition.

b) Emissions Trading Scheme Pre-1990 Forest Land

g) Property, Plant and Equipment

The Incorporation land contains pre-1990 forest land subject to the provisions of the NZ emissions trading scheme ("ETS"). If the land is deforested a deforestation penalty arises. The deforestation liability is not recognised as a liability as there is no current intention to change the land use subject to the ETS. The Crown has allocated emission units ("NZUs") to the Incorporation as compensation. These NZUs are recognised at date of entitlement at cost and the balance of units held at year end are revalued to market value.

Freehold land has been revalued to the latest Rateable Valuation. Leasehold Land is shown at estimated lessor's interest. Revaluation (not depreciated) to rateable value is required under the Te Ture Whenua Māori Act 1993 and is a departure from FRS-3 Accounting for Property, Plant & Equipment. Property, plant and equipment other than land and buildings are stated at original cost price less accumulated depreciation.

Post-1989 Forest Land The Incorporation chose to enter the ETS for post-1989 forest land and earns NZUs as forests grow and carbon is stored in the forest from a 2008 baseline. NZUs are

ĀTIHAU-WHANGANUI INCORPORATION NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2014 h) Depreciation

m) Unclaimed Dividends

Depreciation spreads the cost of an asset over it's estimated useful life. Rates applied are those allowable under the Income Tax Act 2007. The following rates have been used:

The unpaid dividends that relate to the most recent distribution are classified as a current liability. Unclaimed dividends relating to prior years are shown as non-current liabilities.

Class Land (Freehold & Leasehold) Buildings Bridges Development Improvements Plant & Machinery Furniture & fittings Motor Vehicles

CHANGES IN ACCOUNTING POLICIES

From 0%

To 0%

0% 2% 5% 0% 6% 8% 6%

20% 5% 25% 40% 36% 40% 36%

SL DV DV DV DV

DV DV SL DV DV DV DV

i) Development Expenditure & Amortisation Development expenditure are improvements carried out on the Incorporation's farming properties over and above normal maintenance in order to generate future economic benefits. This capital expenditure is amortised over its estimated useful life. An adjustment is made for taxation purposes. j) Taxation The Incorporation is registered as a Māori Authority for income tax purposes. Income tax is accounted for under the taxes payable method. k) Goods and Services Tax The financial statements have been prepared on a GST exclusive basis except for accounts receivable, accounts payable, and accruals which are stated inclusive of GST. I) Resumption of Leases When leases over Ātihau-Whanganui land (vested by the Māori Land Court) cease, the Incorporation can regain the use of the land by paying 2/3rds of the value of capital improvements made on that land. Any revaluation of leasehold land is reversed upon resumption. Such land is then reclassified as freehold land and revalued to the most recent rateable valuation in accordance with the accounting policy.

The NZU Emissions Trading Scheme units have been revalued this year from cost to market value. This change has been made to better reflect the value to the Incorporation. Much of the underlying forest is native that will not be harvested. The policy for the treatment of accounting for the unclaimed dividend liability has changed. All unclaimed dividend money has previously been paid over to Te Āti Hau Trust and disclosed as a contingent liability. Te Āti Hau Trust is no longer holding all unclaimed dividend moneys ($980,000 was returned in the 2014 year). The increases to categories on the financial statements as a result of these policy changes are shown below and includes the impact of the $980,000 returned. Category

ETS Change $M

Current Assets Non-Current Assets

Total

1.6

1.3

Non-Current Liabilities Net Equity

Unclaimed Dividends $M

1.3 1.6

1.3

1.6 1.3

Apart from the above, there have been no changes in accounting policies and all policies have been applied on bases consistent with those used in previous years.

Ä&#x20AC;TIHAU-WHANGANUI INCORPORATION NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2014 2. Total Operating Revenue The total operating revenue of the Incorporation was $ 18,636,649 (2013: $17,936,844).

3. Property, Plant & Equipment AS AT 30 JUNE 2014 Class

Freehold Land (at valuation) Leasehold Land (at valuation) Improvements Buildings Bridges Plant & Machinery Motor Vehicles Furniture & Fittings Development (amortised) TOTAL

Cost or Revaluation $ 91,216,700 8,133,400 4,885,256 13,923,198 571,856 1,762,706 1,751,513 331,295 18,965,628 141,541,552

Depreciation/ Amortisation $ 58,709 44,972 10,642 121,597 219,304 17,098 3,060,258 3,532,580

Accumulated Depreciation $ 661,142 1,743,638 120,115 1,108,313 891,049 244,460 10,445,054 15,213,771

Book Value $ 91,216,700 8,133,400 4,224,114 12,179,560 451,741 654,393 860,464 86,835 8,520,574 126,327,781

Cost or Revaluation $ 91,202,700 6,544,500 4,917,523 14,250,918 466,671 1,650,550 324,087 1,830,455 17,589,174 138,776,578

Depreciation/ Amortisation $ 56,416 45,371 10,749 128,109 20,741 253,338 2,573,038 3,087,762

Accumulated Depreciation $ 602,433 1,726,714 109,473 1,007,855 228,274 852,273 7,387,908 11,914,929

Book Value $ 91,202,700 6,544,500 4,315,090 12,524,204 357,198 642,695 95,813 978,182 10,201,266 126,861,648

AS AT 30 JUNE 2013 Class Freehold Land (at valuation) Leasehold Land (at valuation) Improvements Buildings Bridges Plant & Machinery Furniture & Fittings Motor Vehicles Development (amortised) TOTAL

Corpus land is subject to restrictions over sale. Land is valued at latest rateable values as required under the Te Ture Whenua MÄ ori Act. This treatment is a departure from accounting standard FRS-3 Accounting for Property, Plant & Equipment which requires use of market values.

4. Valuations 2014 2013 $ $ Land Leased Out - Rateable Value (Unimproved Value) 8,133,400 6,544,500 Station Properties - Rateable Value (Capital Value) 107,967,500 107,612,360 Sub Total 116,100,900 114,156,860 Livestock on Station Properties (Market Value) 26,772,989 24,918,345 TOTAL VALUED ASSETS 142,873,889 139,075,205 The Rateable Value (Capital Value) of Land Leased Out is $9,606,700. The forestry held in Papahau Forestry Partnership is revalued by a registered forestry consultant every three years, with the last valuation occurring on 30 June 2011. As at that date the Incorporation's 50% share in the forestry was valued at $767,374. 37

ĀTIHAU-WHANGANUI INCORPORATION NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2014 5. Committee of Management Fees The Chairperson of the Committee of Management is paid $45,000 per annum and other committee members are each paid $25,000 per annum. 2014 2013 $ $ Committee of Management Remuneration 195,000 195,000

6. Provision for Dividend A dividend of 60c per share has been provided for in the 2013/14 year. (2013: 55c per share)

7. Investments 2014 2014 2013 2013 Qty $ Qty $ Shares Ravensdown 500,000 500,000 500,000 500,000 Fonterra Co-operative Group 180,945 805,395 139,010 1,014,046 Other share investments 17,802 19,096 Total Share Investments 1,323,196 1,533,142 Ownership Ownership Investments in Associates Basis & Voting & Voting Papahau Forestry Partnership (Valuation) 50% 802,335 50% Te Hou Ltd Partnership (Cost) 33.33% 6,829,633 - Te Hou GP Ltd (Cost) 33.33% - - Total Investments in Associates 7,631,968 TOTAL INVESTMENTS 8,955,164 -

799,505 799,505 2,332,647

8. Investment in Te Hou Limited Partnership On 26 May 2014 the Incorporation entered into Te Hou Limited Partnership with Ngāti Apa Developments Ltd and Waitatapia Station Ltd. The investment is in a fully operating 1100 ha mixed arable, dairy and dry stock operation including 200ha in pine forestry. A capital contribution of $4,762,967 was paid on signing. Further capital contributions of $500,000 and $1,566,666 are due for payment on 20 March 2019 and 20 May 2019 respectively. Development Capital Contributions are expected to be payable contingent on the cash requirements of the limited partnership. Indicative amounts are as follows: Capital Development Year Contribution Capital Contribution $ $ 2014 4,762,967 2016 - 918,241 2017 - 381,788 2018 - 272,710 2019 2,066,666 Total $ 6,829,633 $ 1,572,739 The Te Hou surplus or deficit earned for the 36 days from purchase date until year end is not available at present and is not expected to be material.

Ä&#x20AC;TIHAU-WHANGANUI INCORPORATION NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2014 9. Emissions Trading Units The Incorporation has entered into the Emissions Trading Scheme with respect to pre-1990 and post-1989 forest land. Revenue from sales of NZUs are recognised in the Statement of Financial Performance. Kyoto units (ie Emission Reduction Units or 'ERUs') were purchased in 2013. Up to May 2014 ERUs could be used to satisfy surrender obligations when the Incorporation withdraws from the ETS for post-1989 forest land and 38,608 units were so used. The remaining balance of ERU's are included at cost in the Statement of Financial Position as carbon credits on hand. NZUs Balance at beginning of year Crown allocation during year Sold during year Balance at year end

Pre-1990 Nos

Post-1989 Nos

Total Nos

23,700 - - 23,700

422,603 87,551 (193,565) 316,589

446,303 87,551 (193,565) 340,289

Emission Reduction Units ("ERUs") Balance at beginning of year Surrendered during year Balance at year end

463,773 (38,608) 425,165

Value of Carbon Credit Assets held at year end Nos $ NZU's - Non-current Asset 340,289 1,344,142 ERU's - Current Asset 425,165 55,271 Total 1,399,413 At 10 Oct 2014, indicative market price of NZUs is $4.35 ea and ERUs is $0.16 ea. Carbon Account Record The unit balance of the Carbon Account Record represents the total number of units which have to be surrendered when land is withdrawn from the ETS. The Incorporation consider these to be Contingent Liabilities of the Incorporation dependent on management decisions regarding land use. Carbon Accounting Record Obligation 2008 to 2013 Exotic Allocation Indigenous Carbon Accounting Areas Total exposure at market value

Number 90,460 422,258 512,718

$ 357,317 1,667,919 $2,025,236

ĀTIHAU-WHANGANUI INCORPORATION NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2014 10. Unclaimed Dividends In previous years the funds relating to unclaimed dividends were loaned to Te Āti Hau Trust to invest. From this year it has been decided that the funds will be returned to the Incorporation. Unclaimed Dividends Unclaimed Dividends at beginning of year (Non Current Liabilities) Unclaimed Dividend declared 2013 (Current Liabilities) Unclaimed Dividends at end of year

$ 1,587,590 66,513 1,654,103

The Incorporation's experience is that it is unlikely that a material proportion will be claimed. Debt from Te Āti Hau Trust Unclaimed Dividends held by Te Āti Hau Trust at beginning of year Less funds received from Te Āti Hau Trust during the year Balance receivable from Te Āti Hau Trust

$ 1,587,590 (980,000) 607,590

11. Secured Borrowings The bank overdraft facilities and term loans are secured by a registered first mortgage over land contained in Certificate of Title WN7D/391 and a charge over all livestock owned by the Incorporation. Borrowings Principal Loan Expiry Dates Interest Rate $ From To From To BNZ loans due within 12 months 8,900,000 5.5% 7.1% 4 Jul 14 2 Sep 14 BNZ loans due after 12 months 20,962,967 5.4% 6.5% 30 Jul 15 28 May 19 Total Loans $ & Weighted Ave % 29,862,967 6.1% A loan of $4.8m due 28 May 2019 is a drawdown of a BNZ $8.4m loan facility which has been agreed for the purposes of the Te Hou Investment. A $5m term loan maturing on 29 July 2014 has been refinanced at 6.55% (new expiry date 31 July 2017).

12. Taxation Losses 2014 2013 $ $ Tax losses available to offset against future income 12,892,404 13,641,693

13. Māori Authority Credit Account 2014 2013 $ $ Māori Authority Credit Account balance at year end 347,404 346,504

14. Related Party Information The Incorporation is the Settlor of, and makes annual grants to, Te Āti Hau Trust. Grants and distributions made are reflected in the Statement of Movements in Equity. Jim Edmonds is a Committee of Management member. $19,650 was paid to him for contract fencing services. Jo Robinson is the wife of Committee of Management member Don Robinson. $2,608 was paid to her for catering services. All related party transactions have been carried out on commercial terms and conditions and at market rates. No related party debts have been written off or forgiven during the period.

Ä&#x20AC;TIHAU-WHANGANUI INCORPORATION NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2014 15. Capital Commitments Apart from the commitments noted above there are no capital commitments. (2013: Nil)

16. Contingent Liabilities Apart from the contingent liability for the Carbon Account Record as noted above there are no contingent liabilities which have not been recognised in the Statement of Financial Position. (2013: $1 ,587,590 relating to unclaimed dividends).

17. Lease Commitments As at 30 June 2014 the Incorporation has no non cancellable operating lease commitments. (2013: Nil)

18. Reconciliation of Reported Surplus or Deficit to Cash from Operating Activities 2014 2014 2013 $ $ $ Reported Surplus/(Deficit) (891,740) (4,048,989) Adjustment for Non-Cash Items: Depreciation 3,532,580 3,087,762 Stock Movements (49,424) 1,747,781 3,483,156 4,835,543 Adjustments for Investing Activities Items: Share Movements 210,072 (449,052) Papahau Forestry 21,973 27,549 Loss (Gain) on Sales of Assets 133,053 (4,156) 365,097 (425,659) Movement in Working Capital Accounts Receivable (759, 152) 102,295 Accounts Payable (317,522) (109,288) Accrued Expenses (82,738) 82,738 Accrued Income 150,313 288,437 Accrued Interest 7,873 2,656 Income Received in Advance 48,609 Carbon Credits - (59,203) GST 395,358 (374,962) Income Tax 4,766 (5,819) Wool & Feed on Hand (221 ,608) (283,352) (774,101) (356,498) NET CASH FROM OPERATING ACTIVITIES

2,182,412

4,398

TE Ä&#x20AC;TI HAU TRUST

FINANCIAL STATEMENTS for the year ended 30 June 2014 TRUST FINANCIAL STATEMENT CONTENTS 43