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Annual Report 2019

He Tangata He Whenua He Oranga Sustaining and Growing our People through Prosperity


PKW Whare central skylight - embraces the memory of our tĹŤpuna, names of original owners of PKW.


OUR STORY Parininihi ki Waitotara is on a mission to grow and sustain our people, to create meaningful opportunity for them, their whānau and the generations to come. We are an intergenerational business with the impetus and determination to continue the legacy of our tūpuna and take control of our own destiny. Our core values of Katiakitanga, Manaakitanga, Whakapono, Whanaungatanga and Kotahitanga are principles and values set down by our shareholders – they provide us with the path we follow towards our vision of He Tangata, He Whenua, He Oranga. As Taranaki Māori, our strength lies in ourselves, our connection to the whenua and our determination to build opportunity while staying true to our kaupapa.

We are focused on achieving our long term goals and aspirations through a diversification strategy that promotes innovation and co-operation to deliver sustainable returns. Our whenua is the foundation on which we build the capacity and capabilities of our people and develop our economic strength. We are also proud to stand in the role of kaitiaki of this land, sustaining it for current and future generations . Each year, our annual report provides another chapter in our story, a contribution to the continuing legacy of determination, of resilience, and the knowledge of who we are and what we mean to become.


Bev Gibson and Mahuri Tipene (Kuia) at farm naming ceremony - PKW Farm Te Kahu, OhÄ ngai Hawera.


OUR KAUPAPA The ambition of our kaumātua to build Parininihi ki Waitotara into an organisation dedicated to fulfilling the aspirations of our ancestors is being realised.

OUR VALUES REFLECT

We recognise we have a duty to manage our lands and assets not just for our generation but for those that follow us.

• Kaitiakitanga Commitment to leadership

OUR VISION He Tangata, He Whenua, He Oranga – Sustaining and Growing our People through Prosperity. OUR MISSION A successfully diversified and sustainable Taranaki Māori-owned and operated business providing meaningful opportunity to its people.

• Manaakitanga Care for our present and future generations

• Whakapono Adherence to our tikanga and belief in our future • Whanaungatanga / Kotahitanga Belief in collective action with trusted relationships


Tahu Rawiri and Ron Puata at PKW Half Yearly Hui, Kairau Marae.


CONTENTS PARININIHI KI WAITOTARA INCORPORATION Chair report

8

Chief Executive Officer report

12

PKW Group Entities

18

Committee of Management

19

Executive Leadership Team

23

Capturing our core values

24

Te Ara Putanga - Our Outcomes Pathway

26

PKW Long Term Outcomes - Annual Results

29

PARININIHI KI WAITOTARA INCORPORATION ANNUAL FINANCIAL STATEMENTS Contents

43

Auditor report

44

Committee’s annual report

47

Statement of comprehensive income

48

Statement of financial position

49

Statement of changes in equity

50

Statement of cash flows

51

Notes to the financial statements

52

PARININIHI KI WAITOTARA TRUST Chair report

80

Partnerships Provide Opportunity

84

Ngā Kaiwhiwhi Tautoko. Scholarships and Grants

86

PARININIHI KI WAITOTARA TRUST ANNUAL FINANCIAL STATEMENTS Contents

95

Auditor report

96

Entity information

99

Statement of service performance

100

Statement of financial performance 101 Statement of financial position 102 Statement of cash flows

103

Statement of accounting policies 104 Notes to the performance report

105

Cover: Meremere Marae whānau have been instrumental in the naming of two PKW Farms, graciously gifting names that serve to remind us, and our future generations, of who we are. This annual report provides an evolution in our reporting to reflect our contributions to the wider kaupapa and intergenerational goals of our people. Our cover photo also demonstrates that shift, providing the beautiful image of multiple generations of our Meremere Marae whānau (clockwise from back), Steven Katene holding his moko, Tytan Moseley, Mahuri Tipene (Kuia) and Hunta Ngatai-Northcott (moko).


8

PARININIHI KI WAITOTARA INCORPORATION

CHAIR'S REPORT HINERANGI RAUMATI-TU'UA

Mā te tangata ka ora ai te whenua Mā te whenua ka ora ai te tangata Hāpaitia rawatia ngā kupu arahi He Tangata, He Whenua, He Oranga Ko ngā mate e pīkau nei Ka mihia, ka tangihia, ka poroporoakitia Tuia ngā wawata, ngā moemoeā Herea ki ngā uaratanga kia tutuki, kia oti, kia eke Eke panuku, eke Tangaroa Whano, whano, haramai te toki, haumi ē, hui ē, tāiki ē!

As Chair of the Committee of Management for Parininihi ki Waitotara Incorporation, and on their behalf, I am pleased to present the annual report on performance for the financial year beginning 1 July 2018 and ended 30 June 2019. This past year has seen us maintain our focus on the strategic pathway we set down to deliver our aspirations for our business, our shareholders and for our Taranaki whānau - He Tangata, He Whenua, He Oranga. Every decision we make as a Board is held up against our values to ensure we remain true to ourselves as an Incorporation in the way we bring meaningful opportunity to our people. It is important not only that we deliver, but also the manner in which we do it. STRATEGY Our core strategies provide us with a stable and robust platform on which our business can build and progress. This

year has seen us move forward in the implementation of our diversification strategy, with new investments being made and potential opportunities being identified and explored. Patience is required as we wait to see what returns will be realised, with expectation that next year’s financial report will show us the reward for our mahi. Having a strategic vision and clear business intentions is essential for success and prosperity, but nothing can be achieved without a team of people with the skills, focus and drive to implement them. We finish the year with the same Executive Leadership Team members we started with, a testament to the synergies that have formed among this talented group of people. They bring a daily focus on performance and clear expectations of themselves, their team and the wider PKW whānau. As an organisation, we


are proud of their technical ability, their knowledge and competence in our cultural kaupapa and the relationships they have built with the wider community on our behalf.

collective agreement partnership between PKW, Te Atiawa Iwi Holdings (TAIH) and Taranaki Iwi Holdings (TIH) were particularly notable.

This is the third year our CEO, Warwick Tauwhare-George, has led the team and his achievements during that time reiterate the importance of having the right person in the right role at the right time.

He is bringing the same dynamism to the potential aged-care facility investment opportunity on PKWowned land in Bell Block and we look forward to seeing progress being made there.

Right from the first, Warwick has driven the change we asked for from the front. He recognised and championed the essential need for diversification and played a central role in laying the foundations and identifying the opportunities we needed to put the strategy into place.

As Chair, I am especially proud and pleased with the completion of the Kaitiakitanga Strategy framework, which clearly lays down our accepted responsibilities and aims that will not only enable us to be an environmentally sustainable business leader, but also an effective guardian of the whenua for generations to come.

There have been some notable investments made, but Warwick’s initiative, energy and leadership in securing the purchase of New Plymouth’s Novotel through a

The first step, to create a biodiversity baseline for our rivers and streams by completing a comprehensive monitoring phase, is being made very soon.

$257.3

MILLION SHAREHOLDER NET EQUITY

The strategy has also enabled us to facilitate the reconnection of the Tūwhakaehu, hapū of Ngāti Ruanui, with the whenua via the renaming of two of our farms. Te Kāhu and Te Ruru stand for so much more than just a name they represent the rebuilding of a relationship that was severed in 1860, a sense of mana and pride, and a beacon for the future. We will continue to replace our farm numbers with names chosen and gifted by local iwi and hapū as we continue on this journey of kotahitanga and manaakitanga together.

HE TANGATA

"Having a strategic vision and clear business intentions is essential for success and prosperity, but nothing can be achieved without a team of people with the skills, focus and drive to implement them."

PARININIHI KI WAITOTARA INCORPORATION - CHAIR'S REPORT

9

GOVERNANCE The implementation of our new governance model on January 1 signalled the end of the first phase in our review process. Our PKW Farms LP Board experienced a change in board structure that will enable it to be better suited to focus on being

Left: Timoko Davis and Boy Campbell at Farm Naming Ceremony - PKW Farm Te Kahu, Ohāngai, Hāwera. Right: New Investment - Novotel Hotel Reception.

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10

"By putting people with the skills and experience to make focused and informed strategic decisions around the table, we are confident of achieving our mission..."

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best in class for dairy farming. The introduction of two independent directors to the Board will bring consistency while ensuring the required skillsets are available. Two elected members from the CoM, again based on the skillset they offer complete the PKW Farms board. The new Board, chaired by Richard Krogh along with independent director Phillip Luscombe and Board members Taaringaroa Nicholas and Claire Nicholson, received a Letter of Expectation from the CoM outlining not only what we as an Incorporation want them to achieve but also, and perhaps more importantly, how we want them to achieve. So far this new model is working very well and we look forward to watching the progress of this part of our business over the coming months. The same model is to be adopted for the PKW Investment subcommittee with two independent members to deepen the level of expertise at the table. We will then move forward with the third phase of the review process by looking at the PKW Trust Board structure. The review has given us the opportunity to step back and check that our governance structures are helping, not hindering, the aspirations we have for our business. By putting people with the skills and experience to make focused

and informed strategic decisions around the table, we are confident of achieving our mission of a successfully diversified and sustainable Taranaki Māori owned and operated business providing meaningful opportunity for our people. ANNUAL OUTCOMES This year sees a shift in the way we present our annual results as we widen our definition of success. We will now be presenting our long-term outcomes, assessed and quantified by the Kaupapa Evaluation Tool (KET), which are aligned with our core values. As this is the first set of KET metric scores, they will act as a benchmark for future progress. What they tell us now is that we are seeing the strategic outcomes we have been focusing on. Our Diversification, Kaitiakitanga and Procurement Strategies are delivering, with strong metric scores for debt management, risk management, supporting Māori business, the preservation and recognition of our cultural heritage and our environmental and animal welfare responsibilities. But the bottom line is important too. PKW recorded an after tax profit of $15.1m ( FY17/18 $5.6m). This figure consists of an operating profit of $8.7m (FY17/18 $6.7m) and non-cash capital gains of $6.4m (FY17/18 loss $1.2m) consisting primarily of movements in the fair value for Fonterra shares and unimproved land.

The year has provided for a shareholder net equity of $257.3m and the Board therefore recommends a $1.45 per share dividend distribution. ACKNOWLEDGEMENTS As always, the mahi tahi of our leadership team, our business partners and our staff members is the vital component in everything we do and on behalf of the Committee of Management, I would like to thank them. The achievements of PKW as an Incorporation belong to you all. I would also like to make a special mention of Hinerangi Edwards, who is leaving us after many years of diligent and loyal service. The contribution she has made to the business is considerable. Her leadership as Chair of the PKW Trust has seen it grow in scope, enabling more Taranaki Māori to aim for the stars in terms of their educational aspirations as well as providing opportunities and support to community groups and organisations. We wish her well in her future endeavours. And, finally, I thank our shareholders for their continued support and manaaki.

Mauri Ora Hinerangi Raumati-Tu’ua Chair


11

TERM LIABILITIES $'000

$68,839

2014/15

$67,189

2015/16

$68,787

2016/17

$65,433

2017/18 2018/19

$51,360

Decrease in debt levels due to a repayment made during the year as a result of surplus working capital. The total term debt to assets ratio is 16.3%.

TOTAL ASSETS $'000

2015/16

$276,994

HE TANGATA

2014/15

$279,040 $316,707

2016/17

$321,660

2017/18

$316,032

2018/19

Decrease due to various asset divestments and a continued decline in the value of Fonterra shares, offset by the investment in Ngamotu Hotel LP.

TOTAL EQUITY $'000 2014/15 2015/16 2016/17 2017/18 2018/19

PARININIHI KI WAITOTARA INCORPORATION - CHAIR'S REPORT

BALANCE SHEET HIGHLIGHTS

$202,907 $204,327 $240,022 $247,176 $257,267

Shareholders Equity has increased consistently year on year, from $202.9m in 2015 to $257.3m in 2019, representing a total growth of 26.8% over 5 years.


12

PARININIHI KI WAITOTARA INCORPORATION

CHIEF EXECUTIVE OFFICER’S REPORT WARWICK TAUWHARE-GEORGE

Taiāwhiowhio ana te rere o te hauora o ngā tūpuna. Toitū te tangata, toitū te whenua, poupoua te oranga, mai Parininihi kei raro, ki Waitotara kei runga. Tēnā koutou, tēnā koutou, tēnā tātou katoa.

It is my pleasure to present, on behalf of the leadership team for Parininihi ki Waitotara Incorporation, the annual report for the financial year ending 30 June 2019. It has been an exciting year for us all, with the results of hard mahi coming to fruition as we continue to implement our diversification strategy. The importance of our core values of Manaakitanga, Kaitiakitanga, Whakapono, Whanaungatanga and Kotahitanga have always been central to how we make decisions, how we do business and how we support Taranaki Māori, and now we are able to understand with more clarity how well we are performing in these areas with the development of the Kaupapa Evaluation Tool (KET). Being able to quantify and measure these concepts means that we can widen our horizon of success to encompass all that is important, not just the financial bottom line. While delivering the investment outcomes our shareholders expect is a key focus

for our team members across the business, our cultural values, our environmental responsibilities, our concern for the care and welfare of our animals and providing opportunities for our whānau to shine are also on show. While the KET long-term outcome scores this year provide us with a benchmark on which we can record progress in the years to come, they also provide us with a snapshot of where we stand and I feel that we can stand tall. There is much to celebrate in these results and we should take the opportunity to do so. The results also show us where we can improve and grow as an organisation and, as a team, we are looking forward to making the incremental changes required as we follow the path we have laid down for ourselves. FINANCE The results for the financial year 18/19 show a net profit after tax of $15.1m, with total comprehensive revenue recorded for the year at $10.1m.


This increased result on last year (net profit after tax FY 17/18 $5.6m) is due to a favourable group revenue attributed to two significant factors; • Improved weather leading to good pasture growth saw an uplift in milk production and therefore milk proceeds – 2,917m kgMS (PY: 2,465m kgMS) although this was offset in part by a lower milk price – $6.35 (PY: $6.75). This reduction in milk price was further mitigated by the introduction of milk price futures which hedged 50% of production at $6.46. • An improved market price for lobster resulted in Annual Catch Entitlement (ACE) lease values being set around 8% higher than last year. In addition, ACE volumes were increased by approximately 2,267kgs by Ministry of Primary Industry (MPI). • These were offset by nil dividends

being received from Fonterra (prior year approx. $0.95m). The overall gain across the PKW Group reflects a combination of a reduction in the value of Fonterra shares of $1.59 per share, costs associated with some vacant dwellings and the sale of freehold or non-strategic leasehold farms, an increase in the Mangaoapa forestry block value, a net uplift in the property investment portfolio (which includes both rural and commercial properties) and an increase in the value of corpus land. Group expenditure remained consistent with last year at $17.3m (FY17/18 $17.2m), demonstrating the continued focus the team has had on monitoring costs across the Group, but particularly within PKW Farms LP. Profits from joint ventures were also favourable to last year at

$15.1

MILLION NET PROFIT AFTER TAX

$2.3m (FY17/18 $1.8M) reflecting an ongoing positive performance by Port Nicholson Fisheries and Facilities (PNF) and the introduction of Ngāmotu Hotels to the books. KET LONG-TERM OUTCOMES

HE TANGATA

"There is much to celebrate in these results and we should take the opportunity to do so."

PARININIHI KI WAITOTARA INCORPORATION - CEO REPORT

13

The full KET metric results and overviews can be found later in this report, but there are some highlights I wish to single out. Manaakitanga The management of risk and the reduction of our debt load by circa $12m gives us a strong working capital position to support our diversification aspirations and to take up opportunities when they present themselves. Cost management is currently sitting at the minimum level we have set as acceptable, which belies the focus, hard-work and commitment that has gone

Left: PKW Shareholder Whanau at PKW Farm Te Ruru, Ohāngai, Hāwera. Right: Investment at Port Nicholson Fisheries LP.

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14

"Our role as kaitiaki of our whenua is something that is held in high importance by our shareholders and so the positive metric scores in this area are very pleasing."

<<

into creating a leaner and more efficient PKW Farms business. We have made considerable investment into our farms over the last three years to be able to drive the change that was needed there, and the results are beginning to show. Our procurement strategy has also begun to deliver tangible results, with a change in the way we regard our suppliers and the mindset we ourselves hold when it comes to acquisitions. Building strong partnerships with suppliers who are keen to explore the valueadd approach not only benefits PKW, but the Taranaki economy as a whole. We have long been a commercial engine room for the region and will continue to do so. Kaitiakitanga Our role as kaitiaki of our whenua is something that is held in high importance by our shareholders and so the positive metric scores in this area are very pleasing. This year saw the launch of the first project driven by our Kaitiakitanga Strategy with the

environmental monitoring of our awa now underway. Employing both scientific and mātauranga Māori approaches to assess the health of the waterway and the animals and plants that rely on them will give us a clear indication of the effectiveness of the work we have already done, and what more may be needed to ensure the mauri of the waterways is strong and vibrant. Whakapono As a Māori Incorporation we work for, and serve all shareholders who whakapapa to Taranaki Māori, their iwi, hapū, whānau and uri. This presents PKW with a challenge as we look to developing our focus in this area and asking ourselves how do we bring our cultural visibility and pride to the fore, what can be done to forge closer connections to the whenua for our shareholders and how best to tell our story. It will be an enlightening journey as we seek to build on the foundations we already have.

Whanaungatanga/Kotahitanga Our learning and understanding of what our people need to grow and develop both within and without our business is another path we are following. Giving our kaimahi opportunities and challenges in their professional lives is essential to their personal growth but we need to ensure that all aspects of their well-being are being cared for. In order to remain strategically effective as a business, our kaimahi should to be aware of the balance they need in their lives and the support that is available to them day-to-day. The organisation will be continuing to assess what is already in place and any changes that could be made. The co-investment opportunities we have facilitated recently are not contained in these results—Tai Hekenga, a property portfolio of land under Crown-owned buildings in central Wellington, brings together iwi from across our region in a perfect example of how, by

Left: Water Monitoring at Farm at by Emily Tuhi-Ao Bailey. Right: PKW Kaimahi Farms Conference at Taiporohenui Marae.


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PKW Whenua

59.5%

PARININIHI KI WAITOTARA INCORPORATION - CEO REPORT

PKW Cash

1.9%

PKW Farms

31.3%

PKW Fish

5.5% Left: First flock of Coopworth Ewes at Farm 16, Tirimoana, Eltham. Right: New Investment - Novotel Hotel NP.

PKW Commercial Property

1.7%

PKW Investments

0.1%

CHANGE IN OUR ASSET BASE AS A RESULT OF OUR DIVERSIFICATION STRATEGY IMPLEMENTATION OVER THE PAST 12 MONTHS 2017-18

2018-19 PKW Cash

PKW Whenua

1.9%

59.5%

PKW Whenua

PKW Farms

60.4%

31.3%

2.0%

PKW Farms

27.9%

HE TANGATA

PKW Cash

PKW Fish

5.4%

PKW Fish

5.5%

PKW Investments

PKW Commercial Property

1.2%

PKW Commercial Property

1.7% PKW Investments

PKW Investments

2.9%

0.1%

working together, we can leverage PKWaCash our capabilities into larger scale 2.0% proposition. PKW Whenua The Waipipi Wind PKW Farms 60.4% 27.9% Farm consists of a partnership agreement between PKW and several private landowners and is an exciting foray into the renewables energy sector for us. STRATEGIC FOCUS

can weather the storms of others because our diversification philosophy gives us the stability and balance required. I believe that stability will be an important asset in the months to come, as global economies and markets continue to fluctuate, influenced by political mandates and weakening trade agreements. PKW Fish

Balancing our investment portfolio 5.4% will continue to be our main To that end, it was exciting to PKW Commercial Property focus going forward, with our be able to announce two new 1.2% diversification strategy continuing investment initiatives this year. to bring sustainable returns for our PKW Investments The purchase of the Novotel New shareholders. 2.9% Plymouth Hotel for $23 million Fonterra has been the subject of was made possible through the intense scrutiny this year, with the partnership of three Taranaki Māori recent announcement of major entities - Parininihi Ki Waitotara losses and no dividend payout Incorporation (PKW Inc), Te Atiawa causing much distress in some Iwi Holdings (TAIH) and Taranaki areas. As an Incorporation, we Iwi Holdings (TIH). This new joint

venture took over the operation of the hotel on New Year’s Day under the name of Ngāmotu Hotels Ltd. It is the first time that PKW Incorporation and Ngā Iwi o Taranaki have come together in this way and shows a promising start to further potential partnership initiatives in the future. The emerging sheep dairying industry offers significant potential for investors, driven by high consumer demand for environmentally sustainable, alternative milk products. Our starting point for our own sheep dairying proposition in the form of 300 Coopworth ewes are currently lambing – the first steps in our plan to build up the flock to 2500. While there will be challenges to

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16

FIVE YEAR CONSOLIDATED PERFORMANCE TO 2018/19 2014/15

2015/16

2016/17

2017/18

2018/19

$'000

$'000

$'000

$'000

$'000

21,872

18,206

28,539

26,546

28,229

(16,561)

(16,344)

(15,642)

(17,224)

(17,321)

(3,336)

(3,280)

(2,946)

(2,684)

(2,565)

Share of profit from joint venture

1,151

1,099

954

1,784

2,269

Operating profit / (deficit) before tax and other items

3,126

(319)

10,905

8,422

10,612

Tax expense

(457)

(193)

(1,633)

(1,687)

(1,941)

Operating profit / (deficit) after tax and before fair value gains / (losses)

2,669

(512)

9,272

6,735

8,671

Net gains / (losses) from investments

4,838

4,228

27,228

(1,159)

6,414

Profit from continuing operations

7,507

3,716

36,500

5,576

15,085

Financial Performance Revenue Operating expenses Finance costs

<<

be faced, the largely untapped

export market for high-value sheep dairy products will be worth the

mahi and I look forward to keeping our shareholders updated on developments.

There are some further interesting developments, too, with our first crop of industrial hemp to be planted.

The potential for this plant is extensive, as it has a wide variety of commercial applications including paper, textiles, clothing, biodegradable plastics, paint, insulation, biofuel, food, and animal feed.

help combat global warming, may

It also restores the soil and is a carbon sequester, which given the government’s announcement on a levy scheme for farms to

issues, but again the potential in

become relevant to our future operations.

This first crop is a trial to enable us to build knowledge and

discover any challenges or

the marketplace is considerable

and we are keen to be part of the action.

Left: Investment - Mangaoapa Forest. Right: First flock of Coopworth Ewes at Farm 16, Tirimoana, Eltham.


PARININIHI KI WAITOTARA INCORPORATION - CEO REPORT

17

Left: PKW livestock. Right: Investment - Rockit Apples Product.

HE TANGATA

"The year to come is full of possibilities for PKW in this space as we continue to follow our strategic goals to deliver sustainable returns to our shareholders."

Sheep dairying and hemp crops are just two of the ways we are seeking alternative land use options for our whenua. The scope is wide (commercial property, forestry and horticulture, for example) and carrying out our due diligence as we explore other investment opportunities will be essential. The year to come is full of possibilities for PKW in this space as we continue to follow our strategic goals to deliver sustainable returns to our shareholders. CONCLUSION PKW is in a solid position with a strong asset and equity base on which to launch future endeavours. We are poised for elevated returns on our investments and have much improved the leverage we hold in our core asset, our whenua. We acknowledge the positive mindset and dogged persistence

displayed by our farming and operations teams to deliver the cost management results and efficiencies we asked of them. On behalf of the team, I wish to thank Hinerangi Raumati Tu’ua and the Board for their ongoing support and guidance, along with the

FINANCIAL PERFORMANCE OPERATING PROFIT AFTER TAX AND BEFORE FAIR VALUE GAINS / (LOSSES) UP $1.9M FROM 2018 TO A PROFIT OF:

$8.671M

shareholders. As always, we will continue to work towards our mission to be a successfully diversified and sustainable Taranaki Māori owned and operated business providing meaningful opportunity for our people, guided by our core values and our vision of He Tangata, He Whenua, He Oranga.

FINANCIAL POSITION EQUITY UP $10.091M FROM 2018 TO:

$257.3M Ngaā- mihi Warwick Tauwhare-George Chief Executive Officer


18

PKW GROUP - ENTITIES

PKW Shareholders

PKW Incorporation

PKW Trust

Active Investment

Passive Investment

Mangaoapa Forest Partnership

PKW Farms LP *

Te Pūia Tāpapa LP

* PKW Farms is a 100% owned subsidiary of PKW Incorporation.

PNF Fisheries LP PNF Facilities LP

Tai Hekenga LP

Ngāmotu Hotels LP

Rockit Orchard No.2 LP


19

HE TANGATA PARININIHI PARININIHI KI WAITOTARA KI WAITOTARA INCORPORATION INCORPORATION - GROUP - CHAIR'S PERFORMANCE REPORT

COMMITTEE OF MANAGEMENT

L-R: David MacLeod; Hinerangi Raumati-Tu'ua (Chair); Taaringaroa Nicholas; Bev Gibson; Claire Nicholson; Hinerangi Edwards; Dion Tuuta.

INDEPENDENT DIRECTORS

Richard Krogh

Philip Luscombe

SHAREHOLDER REPRESENTATIVE

Darryn Ratana


20

COMMITTEE OF MANAGEMENT

JOINT VENTURE COMPANIES

Hinerangi Raumati-Tu'ua (Chair) Bev Gibson Claire Nicholson David MacLeod Dion Tuuta Hinerangi Edwards Taaringaroa Nicholas

PORT NICHOLSON FISHERIES GENERAL PARTNER LTD Hinerangi Raumati-Tu'ua Warwick Tauwhare-George

CHIEF EXECUTIVE / SECRETARY Warwick Tauwhare-George

NGAMOTU HOTELS GENERAL PARTNER LTD Warwick Tauwhare-George

KOURA INC GENERAL PARTNER LTD Hinerangi Raumati-Tu'ua Warwick Tauwhare-George

OTHER Mangaoapa Forest Partnership Rockit Orchard No.2 LP Te Pūia Tāpapa LP (established but no trading last year) Tai Hekenga LP (established but no trading last year)

PKW COMMITTEES PKW TRUST Hinerangi Edwards (Chair) Bev Gibson Claire Nicholson David MacLeod Dion Tuuta Hinerangi Raumati-Tu'ua Taaringaroa Nicholas Darryn Ratana (PKW Trust Shareholder Representative) HUMAN RESOURCES COMMITTEE Bev Gibson (Chair) Hinerangi Edwards Hinerangi Raumati-Tu'ua Phillip Luscombe (Independent Director) AUDIT AND RISK COMMITTEE Taaringaroa Nicholas (Chair) Claire Nicholson David MacLeod Dion Tuuta Richard Krogh (Independent Director)

SUBSIDIARY COMPANIES PKW FARMS GENERAL PARTNER LTD Richard Krogh (Chair & Independent Director) Claire Nicholson Phillip Luscombe (Independent Director) Taaringaroa Nicholas PKW INVESTMENTS LTD (INACTIVE) Hinerangi Raumati-Tu'ua COMPANIES BEING REMOVED IN 2019/20 Te Oranga Livestock Limited (ceased trading 30 June 2018)


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HINERANGI RAUMATI-TU'UA

CLAIRE NICHOLSON

Elected Chair, Committee of Management of PKW Incorporation in 2011. Chair PKW Farms General Partner Ltd (until end December 2019), member of Human Resources Committee and PKW Trust.

Committee of Management of PKW Incorporation, Director PKW Farms General Partner Ltd, member of Audit and Risk Committee and PKW Trust.

ENTITY POSITION Aotearoa Fisheries Ltd Director Nga Miro Trust Chairman Port Nicholson Fisheries General Director Partner Ltd Taranaki Iwi Holdings Management Director Limited Koura Inc General Partner Limited Director Venture Taranaki Director Taranaki Aquagardens Limited Director PKW Investments Limited Director Nga Kai Tutoko Limited & Te Pou Chair Herenga Pakihii LP Te Kiwai Maui Ltd Chair Tainui Group Holdings Limited Director Sealord Limited Director

ENTITY POSITION AgResearch Associate Director Sirona Animal Health Ltd Director/Shareholder EOS Consulting Ltd Director Techion Shareholder Edison Consulting Group Ltd Shareholder O'Brien Group Holdings Ltd Director/Shareholder Mahu Oils Ltd Director

DAVID MACLEOD Committee of Management of PKW Incorporation, Director PKW Farms General Partner Ltd (until end December 2019), member of Audit and Risk Committee and PKW Trust. ENTITY POSITION AJ Greaves Electrical Ltd Shareholder Taranaki Regional Council Chairman LGNZ - Regional Affairs Committee Member Port Taranaki Ltd Director Matau Technologies Limited Director Predator Free 2050 Ltd Director

DION TUUTA Committee of Management of PKW Incorporation, Director PKW Farms General Partner Ltd (until end December 2019), member of Audit and Risk Committee and PKW Trust. ENTITY POSITION Tuuta Waetford Tapui Ltd Director Koura Inc General Partner Limited Director/Chair Port Nicholson Fisheries General Director/Chair Partner Ltd Seafood New Zealand Ltd Director/Shareholder Te Ohu Kaimoana CEO Te Ohu Kaimona Custodian Ltd Director TSB Bank Ltd Director

HINERANGI EDWARDS Committee of Management of PKW Incorporation, Director PKW Farms General Partner Ltd (until end December 2019), member of Human Resources Committee and Chair PKW Trust. ENTITY POSITION Aatea Consultants Ltd Director (t/a Aatea Solutions) R and R Edwards Whanau Director Trustee Ltd Māori Translation.Co.NZ Ltd Director ANZLF Indigenous Women's Board Member Business Network (IWBN) Korou Digital (Charitable) Trust Trustee Kupenga 94 Trust Trustee Te Taura Whiri Māori Language Board Member Commission

PARININIHI KI WAITOTARA INCORPORATION - COMMITTEE OF MANAGEMENT

REGISTER OF INTERESTS


22

REGISTER OF INTERESTS (CONTINUED)

BEV GIBSON

PHILIP LUSCOMBE

Committee of Management of PKW Incorporation, Director PKW Farms General Partner Ltd (until end December 2019), Chair Human Resources Committee and member of PKW Trust.

Independent Director of PKW Farms General Partner Ltd and member of Human Resources Committee.

ENTITY POSITION Quality Visions Ltd Managing Director Mahia Mai a Whai Tara Trust Chairman Amiria Rangi Education Trust Trustee Lantern House Trust Independent Trustee Taranaki District Health Board Board Member Te Korowai o Ngaruahine Trust Chair Tamariki Pakari Child Trustee Youth & Wellbeing

TAARINGAROA NICHOLAS Committee of Management of PKW Incorporation, Director PKW Farms General Partner Ltd, Chair Audit and Risk Committee and member of PKW Trust. ENTITY POSITION Ngati Ruanui Holdings Director Corporation Ltd Ngati Ruanui Holdings Operating Director Company Ltd Parininihi ki Waitotara Incorporation Committee Member/ Shareholder PKW Farms Ltd Director Te Awanui Hukapak Ltd Director Southern Pastures (NZ) Ltd Director Southern Pastures Founders Ltd Director/Shareholder Southern Pastures Management Ltd Director/Shareholder Waikato-Tainui College of Research & Development Trust Trustee Te Waharoa Investments Ltd Director Matariki Capital Partners Ltd Director Waikato-Tainui Group Member Investment Committee Rangitane Tu Mai Ra Ltd Director Te Kiwai Maui Ltd Director Oriens Capital GP Ltd Director Miro LP Limited Partner Rockit Orchards LP 1 Limited Partner

ENTITY POSITION Philip Luscombe Partnership Partner Hendham Farm Co Director Koki South Farms Limited Director Pharm Trust Ltd Trustee PKW Farms Limited Director Allied Farmers Limited Director Kingfisher Escape Limited Director Ocean Ohope Limited Director Argyll Farms Ltd Chairman Massey, Lincoln & Agricultural Trustee Industry Trust Allied Nationwide Finance Ltd Director Allied Farmers Rural Ltd Director Mairangi Investments Ltd Director Par Farms Ltd Director Te Rua o Te Moko Ltd Director NZ Farmers Livestock Ltd Director NZ Farmers Livestock Finance Ltd Director

RICHARD KROGH Appointed Chair of PKW Farms General Partner Ltd (from January 2019), Independent Director and member of Audit and Risk Committee. ENTITY POSITION Energia Limited Managing Director Port Taranaki Limited Director/Deputy Chair Top Energy Limited Director/Chair Ngawha Generation Limited Director/Chair First Gas Topco Limited and Director/Deputy Chair Subsidiaries Gas Services New Zealand Ltd Director/Deputy Chair and Subsidiaries Ngawha Spa Limited Chair Liquigas Director


23

GOVERNANCE

PKW Audit and Risk HR Committee PKW Farms General Incorporation Committee Partner Ltd Attended

Hinerangi Raumati-Tu'ua Hinerangi Edwards Bev Gibson Claire Nicholson David MacLeod Taaringaroa Nicholas Dion Tuuta Darryn Ratana Phillip Luscombe Richard Krogh

7 6 7 7 4 5 7 -

Possible

7 7 7 7 7 7 7 -

Attended

4 1 4 4 4 5 4

Possible

5 n/a 5 5 5 5 5

Attended

5 4 5 4 -

Possible

5 5 5 5 -

Attended

3 3 3 6 2 5 3 7 7

Possible

3 3 3 7 3 7 3 7 7

PKW Trust Member Attended

5 5 5 4 3 4 5 2 -

NOTE:

PKW Incorporation and PKW Farms GP Ltd meetings are held on the same day.

PKW Farms General Partner Ltd's structure and Board membership was updated effective as of January 2019

EXECUTIVE LEADERSHIP TEAM

Warwick Tauwhare-George Mitchell Ritai (Chief Executive (General Manager, Officer) Shareholder Engagement)

Jacqui King (Head of Corporate Services)

Shane Miles (General Manager, Ahuwhenua)

Joe Hanita (Chief Financial Officer)

Possible

5 5 5 5 5 5 5 5 -

PARININIHI KI WAITOTARA INCORPORATION - COMMITTEE OF MANAGEMENT

GOVERNANCE ATTENDANCES


24


PARININIHI KI WAITOTARA INCORPORATION

25

HE WHENUA

Capturing our core values

Inspired by the values that form the strategic core of the Parininihi ki Waitotara Incorporation, four tohu have been created that embody the cultural meaning behind them. The four panels create an epa, or back wall, of a pātaka (food storage house), which come together to represent PKW’s vision: He Tangata, He Whenua, He Oranga. The first reflects a Taratara a Kae carving pattern which portrays the story of Tinirau, who loans his pet whale Tutanui to a guest named Kae. This pattern symbolises prosperity, generosity and the concept of Manaakitanga, providing for present and future generations. The five ‘teeth’ within the design reflect the five KET

(Kaupapa Evaluation Tool) metrics within the Manaakitanga core value.

integrity, it also has a pointed head and reflects the five KET metrics within the design.

The male manaia in the second panel stands as a kaitiaki, just as PKW acts as a guardian of its shareholders interests. Its pointed head shows the regional influence in the design (Taranaki manaia often have pointed heads in reference to the maunga) and the puhoro (thigh tattoo) features nine ‘teeth’ – the nine KET metrics that make up the Kaitiakitanga core value.

The final panel features ritorito, a Taranaki carving pattern that represents harakeke (flax) and the whānau unit of mātua (parents) protecting the tamariki (child). PKW’s core values of Whanaungatanga and Kotahitanga, of building trusted relationships and working together, echo the concept of a whānau caring for each other. The KET metrics are represented by the six strands of harakeke within the design.

Whakapono, the belief in the future and in following Māori tikanga, is represented by the female manaia in the third panel. Standing for truth, honesty and


26


HE WHENUA

PARININIHI KI WAITOTARA INCORPORATION

27

Te Ara Putanga

Our Outcomes Pathway

Traditionally, the success of a business or organisation is measured in purely financial terms, in its profit and loss and the all important bottom line. But the goals and aspirations of Parininihi ki Waitotara run deeper than a single dollar figure.They are built on the core values of Katiakitanga, Manaakitanga, Whakapono, Whanaungatanga and Kotahitanga and show where the Incorporation’s success really lies – in its whenua, in its people and in the way it conducts its business. “Our values are the strong platform on which our vision of He Tangata, He Whenua, He Oranga sits,” says Hinerangi Raumati Tu’ua, Chair of the PKW Board. “They are taken into account during every

discussion around the Board table and drive every decision we make. “They define us as Taranaki Māori, a strong whānau with clear aspirations for the future and goals to aim for in the here and now.” The Kaupapa Evaluation Tool (KET) has enabled the business to assess and quantify measurable outcomes based on these values to ensure the core strategies are being followed and reinforced – it has created an outcomes pathway. The tool has been in use for nearly five years as an assessment mechanism for investment opportunities to ensure any decisions take the organisation in the strategic direction laid down by the Board.

<<


28

<<

Made up of around 20 original metrics (a measure used in quantitative assessment), the original KET was developed with the assistance of Sacha McMeeking, Senior Lecturer at Canterbury University. “While KET in its original form has served us well when assessing investments in the past, we wanted to build on that foundation ensuring that future ventures would deliver the long-term outcomes we want to achieve right across the organisation,” says Warwick Tauwhare-George, PKW CEO. “Our values are at the core of what we do, so it is important that they are the core of what we deliver too, so we have balance across our whole kaupapa.” The revised version of KET now has 25 different metrics that assess investment opportunities and asset management across a wide range of criterion such as cost management, animal welfare, resource use and efficiency, cultural pride, the PKW narrative, employment provision for Taranaki Māori and progressive procurement. Every PKW asset and investment is assessed against these 25 metrics at initial acquisition and annually to ensure it falls and remains within the parameters of the PKW kaupapa and delivers against the commitment made in the core values. Each metric has a rating grade from one to 10. PKW has set the minimum standard for any metric at five, which means any investment or asset delivering at a lower level sets off a ‘red flag’. “If an assessment results in a low score, we address the issue in a methodical and proactive way,’ says Warwick. “We don’t do knee-jerk reactions and expect to change things overnight. Our approach is to think about the next five, 10, 25, 50 years and make decisions that will deliver results over the long-term.”

"We are on a journey together to provide opportunity and prosperity for the generations of today and to come, to care for our whenua entrusted to us by our tūpuna and to do so with integrity." Warwick Tauwhare-George, PKW CEO

Combining the annual KET scores for each metric gives a quantified, realistic and holistic view of the way the business is performing and if actions are aligned with the strategic direction and values intent. It also offers a clear and transparent picture to shareholders of what has been achieved during the year, and where attention may be needed. “While delivering favourable financial results year-on-year is, of course, important, we are more than a money-making machine,” says Warwick. “We are on a journey together to provide opportunity and prosperity for the generations of today and to come, to care for our whenua entrusted to us by our tūpuna and to do so with integrity. “Our long term outcomes (assessed through KET) gives us focus while we are on that journey and represents indicators or markers of our progress. Those markers, signposts, guide us in our decisions while constantly realigning us, ensuring we stay on our chosen path to realise "He Tangata, He Whenua, He Oranga.” Each asset or investment being assessed falls into one of two groups – active or passive. Active investments are those which PKW has control over such as its

dairy and drystock farming, Port Nicholson Fisheries and its lobster quota, New Plymouth’s Novotel and our its commercial property portfolio. Metrics that fall below the minimum standard set by the Board (indicated by a dotted line in the graphic representation opposite) are flagged and an action plan formulated and implemented to raise the score over time. Passive investments, however, are ones in which PKW has no direct influence. Examples are corpus land currently under leasehold and Rockit Apples. Balancing the allocation between active and passive assets or investments is an important consideration, in order to deliver against long term outcomes. Four key investments made this financial year under the Diversification Strategy will deliver and contribute to the metric results in next year’s report – these are Tai Hekenga, Waipipi Wind Farm, Te Pūia Tāpapa Fund and Sheep Dairying. “These are significant and exciting partnerships and interests that are taking us further along the pathway to diversification and a balanced portfolio that will deliver year-onyear,” says Warwick. “We are looking forward to their inclusion in the long-term outcome annual results next year.”


29 PARININIHI KI WAITOTARA INCORPORATION

PKW Long Term Outcomes Annual Results

GA/ N ATAGA G N ITAN U A H ANOTA K

MAN AAK ITA NG A

HE WHENUA

W H

The inaugural annual results for the Parininihi ki Waitotara Incorporation long term outcomes are presented on the following pages.

W H A K AP O

GA

NO IT KA These results set the benchmark score for each metric making up the PKW Kaupapa Evaluation Tool, with the intent to give shareholders a 'big picture' view across the organisation, not just a single result based on financial figures. Results will be presented this way each year moving forward, allowing the organisation to give

its shareholders a transparent and accurate report on the progress made across the values of Manaakitanga, Kaitiakitanga, Whakapono, Kotahitanga and Whanaungatanga that lie at the heart of PKW and its vision of He Tangata, He Whenua, He Oranga.

IA

N A T KI

Each metric consists of; • A description. •A  result on a scale of 1 – 10. PKW has set a minimum standard for any metric at 5, represented by a dotted line on the graph above. •A  n explanation of the annual result. •F  uture actions planned.

<<


30

Manaakitanga Care for our present and future generations

RETURN ON ASSETS

The rate of return on the asset / investment PKW holds or has made. A 5% return across the Incorporation portfolio has been set as the target.

4/10

Why? This score reflects the fact that our investment portfolio is weighted towards primary industries, in particular farming (capital intensive with a lower return profile). Overall, the individual asset or investment results were wide, ranging from scores of 1 to 10, but a cluster of farms were noted at the bottom of the range.

What's next? There continues to be a focus on lifting business performance, particularly within PKW Farms, in order to improve the bottom line. Diversification will continue to be an important means to address economic challenges, bringing stability and balance to deliver a more consistent business financial result over time.

DEBT

The level of debt and debt maturity committed to PKW's business activities and investments. Balancing the debt across the organisation's interests is key and any investment decisions need to comply with the debt cap of 25% (asset to debt ratio) set by the Board for the Incorporation as a whole.

7/10

Why? All debt held by the Incorporation was repaid during the prior year and nearly $10m of PKW Farms debt has also been cleared. Overall debt levels sit at 16%, which is well under the debt cap.

What's next? Active management of the PKW Farms debt level to reduce it in the short- to medium-term below the current 40% operating parameter will be a focus. Diversification funded by debt will commence based on a conservative and considered approach adopted by the Board, noting the broader intent and objectives laid down in the PKW core values and mission kĹ?rero.

DIVIDENDS AND DISTRIBUTIONS

This metric measures EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) which is essentially the core operating performance of the organisation and informs distribution to shareholder decisions. In basic terms, the higher the result, the greater the potential for an improved dividend.

5

/10

Why? Similar to the commentary above re Return on Assets, the result reflects an investment portfolio weighted towards primary industries. When you remove depreciation (capital consideration) most assets and investments produce positive operating results with only a few farms noted near the bottom of the range.

What's next? Delivering tangible results to shareholders is an important outcome for the organisation and a consistent increase over time is the aim, through delivery of the diversification strategy. Making decisions across the business to optimise business operating performance is crucial.


MANAAKITANGA

PARININIHI KI WAITOTARA INCORPORATION

31

PKW Kaimahi - Finance Cadet, Mel Williams and son Teina.

RISK

Robust policies, processes and systems are key to identifying, tracking and managing risk. This metric is influenced by both active and passive investments.

9/10

Why? This high score reflects the scale and maturity of the active business assets PKW holds along with the emphasis on risk management within the Incorporation's culture.

What's next? Any weak spots within the risk management framework are being actively sought and recognised so enterprise risk can be managed as much as possible.

COST MANAGEMENT

Close management of business cost is essential to maintaining and lifting the bottom line. Adhering to budgets and ensuring cost rationalisation procedures are in place deliver positive results.

5/10

Why? Most assets, farms and investments remained within the expenditure budget set for the year which demonstrates the effort and growth in lifting financial management culture across the business (budget setting participation and understanding, informed decision making and active monitoring).

What's next? Building long term relationships and encouraging a value-add approach from suppliers is a key driver in the PKW procurement strategy with the intent to influence cost management practices and results. In addition, empowering those making procurement decisions will further build on our financial management culture and assist to maintain if not drive costs down without compromising business performance.

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32

Kaitiakitanga Commitment to leadership

Water Monitoring - Emily Tuhi-Ao Bailey and Mitchell Ritai at Farm 6, Opua, Opunake.

HEALTH AND SAFETY

Clear expectations and key performance indicators encourages a positive health and safety culture across PKW's business concerns and active investment interests. The score of this metric is directly linked to the reporting protocols in placeâ&#x20AC;&#x201D;a score of 5 indicates all reporting responsibilities have been met.

5/10

Why? While some individual results were excellent (score of 7) others were less than ideal (score of 2). Consistency of KPI achievement is important within this space and reflects upon the health and safety culture of an organisation.

What's next? A health and safety refresh across the business is planned with an independent assessment being completed to identify any issues or opportunities within the PKW health and safety framework and culture.


PARININIHI KI WAITOTARA INCORPORATION

33

ANIMAL WELFARE

The extent to which the organisation meets its requirements and obligations for animal welfare across its entire portfolio, not just within PKW Farms LP. PKW's dairy business is assessed through the â&#x20AC;&#x2DC;WelFarmâ&#x20AC;&#x2122; programme. This independent industry-wide tool uses data generated by the PKW Farms vet to provide an overview of how animals are cared for and is designed to help dairy farmers better understand key animal health markers and how they impact on the optimisation of on-farm production performance. Why? Exercising kaitiakitanga over animal welfare is a core key component of the PKW farming business activity. Ensuring that the appropriate level of care, and actions on-farm display best-practice is why the business has the oversight of the Welfarm Program and specialist veterinarians. The overall PKW Farms Welfarm assessment demonstrated that our overall practices and animal welfare compared well to industry standards.

What's next? PKW Farms has recently developed an Animal Health Plan to help achieve the aspiration to be a best-in-class farming business. This is aimed at ensuring we are proactive with our animal health planning to ensure optimum care and health of our animals. This is intended to be a live document that will evolve as both technology and tools to aid improved standards become available.

KAITIAKITANGA

8/10

WATERWAYS PROTECTION

The Kaitiakitanga Strategy sets minimum requirements for protecting awa that flow across PKW whenua and monitoring protocols to assess the health of the water. Fencing off waterways from stock and riparian planting are at the heart of this metric.

8

/10

Why? A focus for the last five years, fencing and planting has seen considerable investment with the result that 95% of PKW managed waterways are now protected.

What's next? The aim for the next year is to bring the fencing and planting programme to 100% with around $400k budgeted for materials, plants and labour.

<< PKW Kaimahi - Bronwyn MacFarlane.


34

Kaitiakitanga (continued) Commitment to leadership

ENVIRONMENTAL COMPLIANCE

This measures the extent and ability to which the organisation is able to comply with the relevant and applicable environmental legislation and other regulatory requirements. There are four sections, each with their own score, within this metric. a) Agri-Investments - both mandatory and voluntary environmental compliance (for example, riparian fencing is not a legal requirement but an aspiration by Taranaki Regional Council for all regional waterways to be completed by 2020. However, the importance PKW places on its guardianship of the whenua has meant the organisation shares this aspiration and is working to play its part). This metric encompasses the health of the waterways and the flora and fauna found there.

7/10

Why? The monitoring of the waterways to assess and improve their condition has just begun.

What's next? A programme of regular surveys at key sites across the 18 PKW Farms is currently being put in place.

b) Commercial Investments - Asbestos - ensuring that buildings and whenua within the commercial investment portfolio are up to standard, specifically under Health and Safety at Work (Asbestos) Regulations 2016.

8/10

Why? There is no asbestos present in properties where assessments have been completed.

What's next? Formal assessments to be carried out where status is unknown.

c) Commercial Investments - Land Contamination - ensuring that buildings and whenua within the commercial investment portfolio are up to standard with regards to the identification and management of land contamination.

10/10

Why? No contamination is recorded at any PKWowned property.

What's next? Monitoring will be on-going to maintain this favourable status quo.

d) Commercial Investments - Building Warrant of Fitness - ensuring that buildings and whenua within the commercial investment portfolio are up to standard - specifically with regards to Building Warrant of Fitness.

10/10

Why? Every PKW-owned building has passed the Building Warrant of Fitness assessment and the subsequent compliance paperwork is displayed publicly.

What's next? Monitoring will be on-going to ensure the annual assessment is passed without issue.


KAITIAKITANGA

PARININIHI KI WAITOTARA INCORPORATION

35

Water monitoring at Farm 6, Opua, Opunake.

RESOURCE USE AND EFFICIENCY

This metric is split into three sections to ensure that an accurate assessment can be made across all resource consumption. a) Resource use and efficiency - Nutrients. Conscious and careful application of fertiliser and urea across both dairy and dry stock farming concerns to ensure only what is needed is used in the correct quantities at the right time.

10

/10

Why? All fertiliser and urea use is controlled through the OverseerFM online software tool which uses scientific modelling to analyse the nutrient flow through a farm system.

What's next? PKW Farms is planning to invest in another online tool that uses satellite imagery to monitor grass growth rates so an even more accurate application plan can be put in place.

b) Resource use and efficiency - Water. Using water efficiently is important for both the bottom line and the environment.

7/10

Why? New effluent management systems have enabled farms to reduce the amount of fresh water being used (eg a filtering and recycling process means 'green water' can be used to wash down yards and milking sheds rather than fresh water).

What's next? All PKW farms now have monitoring tools in place so that water usage can be measured and assessed to enable conservation mechanisms to be considered and be put into place.

c) Resource use and efficiency - Energy. Reduction in the use of energy, primarily electricity, signifies essential cost savings as well as being good for the planet.

6/10

Why? There were mixed results within this metric, with some commercial properties failing to monitor energy use to a sufficient standard, if at all.

What's next? The formulation and implementation of a robust energy monitoring system for commercial property investments is to be developed. However, all PKW dairy farms are currently benchmarked by Meridian (our electricity provider) and recommendations made to optimise energy use. On-going monitoring will be used to assess improvements.

<<


36

Kaitiakitanga (continued) Commitment to leadership

WASTE MANAGEMENT

All investments are required to comply with any resource consents in place. In addition, there is an expectation that waste is actively monitored as to amount and type.

6/10

Why? Although recycling occurs across the majority of PKW farms and properties, formulated and systematic monitoring is not in place. PKW farms ensure that plastic wrap from silage and scrap metal is recycled and that no rubbish is dumped on farm. Dead animals are also disposed of correctly.

What's next? A standardised approach to ensure consistent and effective recycling and disposal of waste is being planned and will be enforced across all investments (e.g. using food scraps generated by the New Plymouth Novotel hotel effectively and installing recycling bins in all hotel rooms will help to reduce the impact of waste generated by that business).

EFFLUENT MANAGEMENT

Compliance with resource consents is non-negotiable for PKW's agri-business and reducing the environmental impact of both dairy and dry stock units forms part of the Kaitiakitanga Strategy.

6/10

Why? Over the past 3-4 years a considerable investment has been made to upgrade and future-proof effluent systems with only 2-3 improvements left to occur in the next 12 months.

What's next? Live monitoring of effluent systems in the future will mean a score of 10 is achievable within this metric.

CLIMATE CHANGE RISKS

To be determined by the PKW Climate Change Strategy which is currently being formulated.

BIOSECURITY

This metric assesses the likelihood and measures the impact a biological or biochemical event could have on an investment. Biosecurity is a key business risk and awareness is paramount.

5/10

Why? An outbreak of a calf illness on one farm resulted in a biosecurity incident, that also subsequently impacted on the PKW Calf Rearing Unit. Our specialist veterinarians were called to assist in the resolution of the illness, and the issue was ultimately dealt with satisfactorily.

What's next? PKW Farms has a Biosecurity Plan in place, and this was refreshed following the incident. Biosecurity continues to be an area of on-going focus within the business.


PARININIHI KI WAITOTARA INCORPORATION

37

Whakapono

WHAKAPONO

Adherance to our tikanga and belief in our future

Matua Raymond Edwards and Darryn Ratana at PKW Half Yearly Hui, Kairau Marae.

TE REO USE, UNDERSTANDING, RELEVANCE & PROFICIENCY

Promotion of Te Reo Māori is important for PKW and for the Māori culture as a whole. The organisation has a duty to ensure Te Reo is actively used across all investments.

4

/10

Why? Although Te Reo is used in business conversations, there are some areas where it is not prevalent, such as individual farms and the Novotel. A lack of bilingual signage in business premises and farms identified by number contribute to a low metric score.

What's next? Two farms have been gifted Māori names by local hapū and more are being planned. More bilingual or reo signage in the PKW Whare and a revised naming convention at the Novotel will help make a more visual impact over the next 12 months.

CULTURAL VISIBILITY & PRIDE

The extent to which the investment will have a positive or negative effect on how shareholders and Taranaki Māori view themselves.

4

/10

Why? There is work to be done on how cultural pride is expressed within the business and passed on to shareholders and their whānau, hapū and iwi. Listing the names of the original shareholders in the PKW Whare and the naming of Te Ruru and Te Kāhu were important milestones during the year.

What's next? Ongoing financial investment is required to ensure shareholders can see themselves in the way the organisation presents itself and how it does business. Building relationships with iwi and hapū to support positive change will continue to be key.

<<


38

Whakapono (continued) Adherance to our tikanga and belief in our future

PKW NARRATIVE

Ensuring that investment opportunities align with PKW's vision, core values and strategic approach. The strength of that alignment, along with the rate of reinforcement, has an impact on the metric score.

6/10

Why? Strategic alignment is a central tenet to all PKW decision-making but reinforcing those key messages and telling the PKW story will improve this score. The production of shareholder videos providing an insight into some investment areas recently were well-received.

What's next? Initiatives to share why the organisation holds the values it does will be on-going, along with telling stories about our investments and strategies.

ACCESS AND CONNECTION TO LAND

A sense of connection to the whenua is important for PKW shareholders so this metric is designed to assess if an investment has a positive or negative impact on that desire.

3/10

Why? There is not currently any formal mechanism for Taranaki Māori to access the land or to enhance any existing connection that may be in place.

What's next? The intent and desire to provide more physical connection to whenua as well as improving the strength of cultural connections is outlined in the Kaitiakitanga Strategy and will continue to be a focus area moving forward.

WĀHI TAPU

Identification and acknowledgement of wāhi tapu is key to this metric, along with the extent that a site is protected and accessible to whānau and iwi.

5/10

Why? Wāhi tapu on PKW whenua have been identified and protected from farming operations or policies put in place to reduce the impact of business activities (such as only grazing sheep over a large wāhi tapu site which does less damage to the whenua).

What's next? Ensuring sites are accessible and fostering connections with whānau are part of the Kaitiakitanga Strategy and formal policies are being put into place.


PARININIHI KI WAITOTARA INCORPORATION

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Whanaungatanga / Kotahitanga

WHANAUNGATANGA/KOTAHITANGA

Belief in collective action with trusted relationships

PKW shareholder whānau at PKW AGM, Owae Marae.

ATTRACTION AND RETENTION OF KEY STAFF

Identifying key staff and ensuring there is a succession plan in place for those roles enables the business to maintain momentum and progress despite any changes in the PKW team. Attracting the right people, whose personal aspirations and skillsets complement the Incorporation's strategic aims and goals, is also important to create an effective and efficient workforce.

4

/10

Why? Although key staff roles have been identified, a succession plan is not in place should current staff members leave the organisation. Management is carried out on a reactive basis to staff losses.

What's next? Establish a proactive succession plan for key roles.

CO-INVESTMENT OPPORTUNITIES

Identifying and creating potential co-investment opportunities for other Taranaki Māori groups is strategically important to PKW.

4/10

Why? Currently the PKW investment portfolio is heavily weighted towards opportunities where the Incorporation is the only investor (for example, PKW Farms). This year did see the launch of Ngāmotu Hotels LP, a partnership between three Taranaki Māori entities—Parininihi Ki Waitotara Incorporation (PKW Inc), Te Atiawa Iwi Holdings (TAIH) and Taranaki Iwi Holdings (TIH), which has purchased the Novotel New Plymouth.

What's next? Recent announcements of the investment opportunities created with Tai Hekenga (10 Taranaki iwi investment partners) and Te Pūia Tāpapa Fund (26 Māori entities) show the strategic intent behind this metric is being put into action. Further investments will be forthcoming as PKW continues to build relationships with potential and existing partners.

<<


40

Whanaungatanga / Kotahitanga (continued) Belief in collective action with trusted relationships

WORKING CONDITIONS

Establishing a positive working culture and ensuring staff well-being across the entire PKW investment portfolio is important for business success while recognising the importance of a good work life for each individual.

6/10

Why? An industry tool developed by Dairy NZ assesses farms against criteria set out in its Quality Workplaces guide. This assessment consists of five central pillars which are rated bad, good or great. PKW Farms performed favourably but some areas were identified for improvement. Analysis across commercial investments is yet to be established.

What's next? PKW is putting staff well-being at the forefront with a wellbeing framework being launched in the next six months.

EMPLOYMENT OPPORTUNITIES FOR TARANAKI MĀORI

Opportunities within the investment portfolio should be identified to ensure roles are retained where possible and further jobs can be created.

5/10

Why? The portfolio remains balanced with no jobs lost or new roles created.

What's next? Growth within the existing assets and investments portfolio is constrained and expected to remain static moving forward and therefore as the diversification strategy continues to be deployed, opportunities to control a larger pool of employment outcomes will need to be a key consideration.

CAPABILITIES DEVELOPMENT

The extent to which the investment provides opportunities to develop the personal and professional capabilities of both internal workers and other external stakeholders such as young Māori and whānau. Identification of core competencies and a cohesive development plan for individuals is integral.

5/10

Why? A formal PKW matrix is not yet in place and while there are some professional development opportunities across the portfolio, these are not aligned to individual needs or requirements. PKW has launched a cadetship programme in the last year, with two cadets being appointed, one on farm and one in the finance team.

What's next? A process for the formal skill assessment and a subsequent professional development plan for each individual is being drafted. Increased investment in training will address any competency gaps across the workforce. Growing the cadet programme numbers will be a focus moving forward.


Te Kahu Farm Naming Ceremony - Mahuri Tipene (Kuia) and Hinerangi Edwards.

ALIGNED PARTNERS

Divided into two measures, this metric assesses the likelihood of new whānau, iwi and regional new businesses being created or existing SMEs growing as a result of PKW investment. a) Spend with Māori businesses

6/10

Why? More than 10% of the PKW controllable spend is currently reaching Māori businesses (this represents over $1m each year). The organisation has also embedded within its supplier database a means to identify suppliers as Māori and is developing awareness within the community of its desire to engage with more Māori suppliers.

What's next? Continuing to grow awareness will help PKW to reach a goal of 25% of controllable spend being allocated to Māori suppliers / businesses. Based on the three-year PKW procurement plan, PKW has an awareness of what goods or services will be tendered moving forward and therefore identifying what Māori suppliers are available in those spaces will be beneficial.

b) Value for money

4

/10

Why? This score reflects the number of reviews (requests for proposal – RFP) completed and converted into agreements with suppliers against the Procurement Policy's definition of 'value for money'. It also recognises the growth in value add opportunities (such as scholarships and internships) on offer via our supplier network.

What's next? Reviews will continue to be carried out over the next three years and relationships with suppliers strengthened with value-add propositions such as scholarship provision for shareholders and their whānau.

WHANAUNGATANGA/KOTAHITANGA

PARININIHI KI WAITOTARA INCORPORATION

41


42

Brendon Rei and Andy Maruera at PKW AGM, Owae Marare.


20 19 PARININIHI KI WAITOTARA

Incorporation

FINANCIAL STATEMENTS for the year ended 30 June 2019

FINANCIAL STATEMENTS - 30 JUNE 2019 Auditor report

44

FINANCIAL STATEMENTS Committeeâ&#x20AC;&#x2122;s annual report for the year ended 30 June 2018

47

Statement of comprehensive income

48

Statement of financial position

49

Statement of changes in equity

50

Statement of cash flows

51

Notes to the financial statements

1 Corporate information

52

2 Summary of significant accounting policies

52

3 Correction of errors

60

4 Financial risk management

61

5 Critical accounting estimates and judgements

62

6 Revenue

63

7 Other gains / (losses)

63

8 Expenses

63

9 Finance income and expenses

63

10 Income tax expense

11 MÄ ori authority credit account 64

12 Trade and other receivables

64

64

13 Biological assets

65

14 Property, plant and equipment

66

15 Intangible assets

68

16 Equity accounted investments

69

17 Investments in subsidiaries

70

18 Investments

70

19 Investment properties

71

20 Borrowings and Unclaimed Dividends

72

21 Derivative financial instruments

72

22 Net deferred tax assets / (liabilities)

73

23 Trade and other payables

73

24 Share capital

74

25 Reserves and retained earnings

74

26 Dividends

75

27 Contingencies

75

28 Commitments

75

29 Related party transactions

77

30 Subsequent events

78

31 Statement of estimated current market values (unaudited)

79


44

Independent Auditor’s Report Independent Auditor’s Report To the Shareholders of Parininihi ki Waitōtara Incorporation

Report on the audit of the consolidated financial statements

Opinion

To the Beneficiaries of Parininihi ki Waitōtara Trust

In our opinion, the accompanying consolidated Wereport have audited the accompanying consolidated Report on the audit of the performance financial statements of Parininihi ki Waitōtara financial statements which comprise: Incorporation (the Incorporation’) and its — The consolidated statement of financial position subsidiaries (‘the 'Group') on pages 4 47toto31: 79: Opinion as at 30 June 2019; i. Present fairly inInallour material respects the Group’s performance opinion, the accompanying Westatements have audited the accompanying performance — The consolidated of comprehensive financial position as atof30Parininihi June 2019 and its report ki Waitōtara Trust (the income, Trust) onchanges report which comprise: in equity and cash flows for financial performance cash flows for the pages 3and to 13: the year then ended; and — The statement of financial position as at 30 year ended on that date; and June 2019; i. Present fairly in all material respects Trust’s —the Notes, including a summary of significant ii. Comply with New Zealand Equivalents to accounting policies and other explanatory financial position as at 30 June 2019 and its — The statements of financial performance and International Financial Reporting Standards information. financial performance and cash flows for the cash flows for the year then ended; Reduced Disclosure Regime. year then ended on that date; — Notes, including a summary of significant ii. Comply with PBE Simple Format Reporting accounting policies and other explanatory Standard - Accrual (Not For Profit); and information; and report the service performance Basis iii. forSuitably opinion — The statement of service performance and information required by Public Benefit Entity entity information on page 3. We conducted our auditFinancial in accordance with Standard International Standards Reporting 48 ('PBE FRS on 48')Auditing (New Zealand) (‘ISAs (NZ)’). We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. in the statement of service performance. We are independent of the Group in accordance with Professional and Ethical Standard 1 (Revised) Code of Ethics for Assurance Practitioners issued by the New Zealand Auditing and Assurance Standards Board and the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (‘IESBA Code’), and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Basis for opinion IESBA Code.

We conducted ourare audit in accordance with Standards onforAuditing (New Zealand) (‘ISAs (NZ)’), and Our responsibilities under ISAs (NZ) further described in theInternational auditor’s responsibilities the audit of the the audit of information PBE 48 requires to be included in the statement of service performance, in consolidated financial statements section of ourFRS report. accordance with the International Standard on Assurance Engagements (New Zealand) 3000 (Revised) Our firm has also provided other services to the Group in relation to Advisory services. Subject to certain Assurance Engagements Other than Audits or Reviews of Historical Financial Information ('(ISAE (NZ) 3000'). restrictions, partners and employees of our firm may also deal with the Group on normal terms within the We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our ordinary course of trading activities of the business of the Group. These matters have not impaired our opinion. independence as auditor of the Group. The firm has no other relationship with, or interest in, the Group. We are independent of the Trust in accordance with Professional and Ethical Standard 1 (Revised) Code of Ethics for Assurance Practitioners issued by the New Zealand Auditing and Assurance Standards Board and the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (‘IESBA Emphasis Code’), of andmatter we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. We draw attention to Note 3 to the consolidated financial statements which describes the prior period errors and the restatement ofOur theresponsibilities comparative financial AsISAE part (NZ) of our3000 auditare of further the 2019 financial in statements, under information. ISAs (NZ) and described the auditor’s responsibilities for we also audited the in Note 3 that wereof applied to amend the 2018 financial statements. theadjustments audit of thedescribed performance report section our report. In our opinion, such adjustments are appropriate and have been properly applied. We were not engaged to Other than in our capacity auditor we statements have no relationship with,other or interests in,respect the Trust. audit, review, or apply any procedures to the as 2018 financial of the Group than with to the adjustments and, accordingly, we do not express an opinion or any other form of assurance on the 2018 financial statements taken as a whole.

-2-


Other information The Committee of Management Members, on behalf of the Group, are responsible for the other information included in the entity’s Annual Report. Our opinion on the consolidated financial statements does not cover any other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the consolidated financial statements our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Other matter The consolidated financial statements of the Group, for the year ended 30 June 2018, was audited by another auditor who expressed an unmodified opinion on those statements on 20 September 2018.

Use of this independent auditor’s report This independent auditor’s report is made solely to the Shareholders as a body. Our audit work has been undertaken so that we might state to the Shareholders those matters we are required to state to them in the independent auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Shareholders as a body for our audit work, this independent auditor’s report, or any of the opinions we have formed.

Responsibilities of the Committee of Management Members for the consolidated financial statements The Committee of Management Members, on behalf of the Incorporation, are responsible for:

The preparation and fair presentation of the consolidated financial statements in accordance with generally accepted accounting practice in New Zealand (being New Zealand Equivalents to International Financial Reporting Standards Reduced Disclosure Regime);

Implementing necessary internal control to enable the preparation of a consolidated set of financial statements that is fairly presented and free from material misstatement, whether due to fraud or error; and

Assessing the ability to continue as a going concern. This includes disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless they either intend to liquidate or to cease operations, or have no realistic alternative but to do so.

PARININIHI KI WAITOTARA INCORPORATION - FINANCIAL STATEMENTS

45


46

Auditor’s responsibilities for the audit of the consolidated financial statements Our objective is:

To obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error; and

To issue an independent auditor’s report that includes our opinion.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs NZ will always detect a material misstatement when it exists. Misstatements can arise from fraud or error. They are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements. A further description of our responsibilities for the audit of these consolidated financial statements is located at the External Reporting Board (XRB) website at: http://www.xrb.govt.nz/standards-for-assurance-practitioners/auditors-responsibilities/audit-report-7/ This description forms part of our independent auditor’s report.

KPMG Tauranga 6 September 2019


COMMITTEE’S ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2019

2019 $'000 REVIEW OF OPERATION Net profit of the Group for the year ended 30 June 2019

15,085

Add retained earnings as at 1 July 2018

169,011

Closing retained earnings

184,096

Less dividend declared 5 July 2019

(1,737)

Adjusted retained earnings

182,359

It is not proposed to make any transfer to reserves. THE STATE OF THE GROUP’S AFFAIRS AT 30 JUNE 2019 WAS: Assets totalled

316,032

THESE WERE FINANCED BY: Shareholder's equity

257,267

Liabilities

58,765

TOTAL EQUITY AND LIABILITIES 316,032

The business of the Incorporation is managing the interests of its Māori shareholders under the Te Ture Whenua Māori Act 1993. The nature of the Incorporation's business has not changed during the year. The financial report was authorised for issue and signed on behalf of the Committee, dated 6 September 2019. For and on behalf of the Committee of Management.

HINERANGI RAUMATI-TU'UA

TAARINGAROA NICHOLAS

Chair

Chair Audit and Risk Committee

6 September 2019

6 September 2019

PARININIHI KI WAITOTARA INCORPORATION - FINANCIAL STATEMENTS

47


48

STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2019

Restated 2019 2018 Notes $â&#x20AC;&#x2122;000 $â&#x20AC;&#x2122;000 Includes sales mainly relating to milk proceeds, lease income received from our whenua and income from our crayfish

Revenue 6 28,229 26,546 Other gains / (losses)

7

6,414

(1,159)

Expenses 8 (17,321) (17,224)

Includes gains on the fair value of our whenua

Finance costs - net 9 (2,565) (2,684) Share of profit from joint ventures 16 2,269

1,784

Profit before income tax

17,026

7,263

Income tax expense

10

(1,941)

(1,687)

Profit after income tax

15,085

5,576

Costs from our financier Rabobank

Our share of suplus for the year from Port Nicholson Fisheries LP, Port Nicholson Facilities LP, Mangaoapa Station (forest) and the Ngamotu Hotels LP (Novotel).

Includes costs mainly relating to farming operations and administration costs of Parininihi ki Waitotara

Other comprehensive income: Cash flow hedges

25,(a)

(386)

(114)

Revaluation of PPE - unimproved land

25,(a)

(4,608)

-

Other comprehensive income for the year, net of tax

(4,994)

(114)

Total comprehensive income for the year

10,091

5,462

For and on behalf of the Committee of Management these financial statements are authorised for issue on 6 September 2019.

HINERANGI RAUMATI-TU'UA Chair 6 September 2019

TAARINGAROA NICHOLAS Chair Audit and Risk Committee 6 September 2019

The above statements of comprehensive income should be read in conjunction with the accompanying notes.


STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2019

Notes Money owed to Parininihi ki Waitotara by our customers Livestock owned by Parininihi ki Waitotara Crayfish quota and other intangible assets owned by owned by Parininihi ki Waitotara Investment in Port Nicholson Fisheries LP, Port Nicholson Facilities LP, Mangaoapa Station (forest) and NgÄ motu Hotels LP (Novotel) Includes shares in Fonterra and fertiliser companies

ASSETS Current assets Cash and cash equivalents Trade and other receivables Biological assets Total current assets Non-current assets Property, plant and equipment Intangible assets Investment in joint ventures Investments in equity instruments Investment properties - unimproved lease land Investment properties - commercial and rural Total non-current assets

12 13

Money owed to our suppliers

Includes borrowings from Rabobank and Unclaimed dividends

Represents unrealised movment on interest rate hedges and milk price futures

The net worth of Parininihi ki Waitotara as measured in the Group financial accounts

7,090 5,025 10,318 22,433

Restated 2018 $'000

6,851

4,560 10,529 21,940

14 15 16 18 19 19

112,974 15,877 10,471 12,827 137,661 3,789 293,599 316,032

127,727

23

2,147 575 712 3,434

4,334 1,043

51,360 1,456 2,515 55,331 58,765 257,267

65,433

Total assets Accounting value of our whenua tupuna

2019 $'000

15,962

5,464 18,170 128,177 4,220 299,720 321,660

LIABILITIES Current liabilities Trade and other payables Current tax payable Derivative financial instruments Total current liabilities Non-current liabilities Borrowings and unclaimed dividends Derivative financial instruments Deferred tax liabilities Total non-current liabilities Total liabilities Net assets EQUITY Share capital Reserves Retained earnings Total equity

The above balance sheets should be read in conjunction with the accompanying notes.

21

20 21 22

24 25,(a) 25,(b)

5,549 67,622 184,096 257,267

655

6,032

981 2,038 68,452 74,484

247,176

5,549 72,616 169,011 247,176

PARININIHI KI WAITOTARA INCORPORATION - FINANCIAL STATEMENTS

49


50

STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2019

Attributable to equity holders of the Incorporation

Notes Balance at 1 July 2017 (as perviously reported) Adjustment on correction of error

Balance as at 1 July 2017 (Restated*)

Profit for the year (Restated)

Cash flow hedges Total comprehensive income (Restated)

Dividends provided

3

Share capital $'000

Capital / revaluation reserve $'000

Cash flow hedge reserve $'000

Retained earnings $'000

Total equity $'000

5,549

73,937

(1,207)

161,742

240,021

-

73,937

(1,207)

3,250 164,992

3,250 243,271

-

-

(114) (114)

5,575 5,575

5,575 (114) 5,461

(1,557) (1,557) 169,011

(1,557) (1,557) 247,175 247,176 15,085 (4,608) (386) 10,091 257,267

5,549

25,(a)

-

26

-

-

Balance as at 30 June 2018 (Restated)

5,549

73,937

(1,321)

Balance as at 1 July 2018

5,549

-

73,937 (4,608) (4,608)

(1,321) (386) (386)

169,011 15,085 15,085

5,549

69,329

(1,707)

184,096

Total transactions with owners

Profit for the year Revaluation of PPE - unimproved land Cash flow hedges Total comprehensive income Balance as at 30 June 2019

25,(a)

* Certain amounts shown here do not correspond to the 2018 financial statements and reflect adjustments made, refer to Note 3.

The above statements of changes in equity should be read in conjunction with the accompanying notes.


STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2019

Statement of cash flows shows where cash has been paid and received. The statement shown is split in three parts; operational activities, investing activities and financing activities.

2019 2018 $’000 $’000 Cash flows from operating activities Receipts from customers 30,236 27,472 Interest received  219 117 Income tax paid (1,856) (838) Payments to derivative instruments (161) Payments to suppliers  (11,815) (12,311) Payments to employees (3,703) (3,547) Interest paid (2,845) (2,234) GST paid (2,283) (1,268) Net cash inflow from operating activities 7,792 7,391 Cash flows from investing activities Receipts for property, plant and equipment Payments for property, plant and equipment Payments for investments Receipts from sale of investments Receipts from sale of investment property  Receipt of dividends Receipts from joint ventures Payments to joint ventures Net cash inflow / (outflow) from investing activities

12,009 948 (3,353) (6,782) (26) (139) 922 6 1,261 - 957 1,370 1,776 (4,107) 8,076 (3,234)

Cash flows from financing activities Receipt of borrowings Repayment of borrowings Payment of dividends Net cash outflow from financing activities

- 1,680 (14,297) (5,316) (1,332) (1,214) (15,629) (4,850)

Net increase / (decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year

The above statements of cash flows should be read in conjunction with the accompanying notes.

239 (693) 6,851 7,544 7,090 6,851

PARININIHI KI WAITOTARA INCORPORATION - FINANCIAL STATEMENTS

51


52

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019

1 CORPORATE INFORMATION Parininihi ki Waitotara Incorporation (the 'Parent') is registered under the Te Ture Whenua Māori Act 1993 and is incorporated in New Zealand. The Parent and its controlled entities are included in the Parininihi ki Waitotara Incorporation Group (the 'Group'). 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. (a) Basis of preparation The Group financial statements have been prepared in accordance with generally accepted accounting practice in New Zealand and section 276 of Te Ture Whenua Māori Act 1993. The Group financial statements have been prepared on a historical cost basis except for biological assets, certain investments, investment properties and derivative financial instruments which have been measured at fair value. The information is presented in New Zealand dollars and all values are rounded to the nearest thousand. NZ IFRS - Reduced Disclosure Regime

For the purpose of complying with NZ GAAP, the Group is eligible to apply Tier 2 For-Profit Accounting Standards (New Zealand equivalents to International Financial Reporting Standards Reduced Disclosure Regime ("NZ IFRS RDR")) on the basis that it is not publically accountable and is not a large for-profit public sector entity. The Group has elected to report in accordance with NZ IFRS RDR and has applied disclosure concessions. The consolidated financial statements of Parininihi ki Waitotara Incorporation comply with New Zealand equivalents to International Financial Reporting Standards - Reduced Disclosure Regime ("NZ IFRS RDR") and other applicable Financial Reporting Standards, as appropriate for profit oriented entities. Entities reporting The consolidated financial statements for the Group include Parininihi ki Waitotara Incorporation and its controlled entities. Changes in accounting policy and disclosures New and amended standards adopted by the Group. The following standards have been adopted by the Group for the first time for the financial year beginning on or after 1 January 2018, no material impact has resulted from adoption. (i) IFRS 9, 'Financial instruments: Classification and measurement' effective 1 July 2018 without

restatement, in accordance with the transition requirements. This standard sets out the new requirements for classification and measurement, impairment and hedge accounting for financial instruments. The following changes to accounting policies due to application of NZ IFRS 9 have been applied to these financial statements: Classification and measurement of financial assets The Group classifies its financial assets as subsequently measured at either amortised cost of fair value depending on the Group's business model for managing the financial assets and the contractual cash flow characteristics of the financial assets. On adoption of NZ IFRS 9, investments previously classified as loans and receivables are now classified as financial assets at amortised cost. Classification and measurement of financial liabilities Classification of financial liabilities remained unchanged for the Group. Financial liabilities continue to be measured at amortised cost. Changes to impairment of financial assets The NZ IFRS 9 impairment requirements are based on an expected credit loss model, replacing the incurred loss methodology under NZ IAS 39. The Group applies the simplified approach for trade and other


2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) receivables, which requires the lifetime expected credit losses to be applied when measuring the loss allowance. The impact of adopting NZ IFRS 9 has not had a material impact on the loss allowance. (ii) IFRS 15, 'Revenue from Contracts with Customers', effective 1 July 2018. NZ IFRS 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognised. It replaces existing revenue recognition guidance, including NZ IAS 18 Revenue and NZ IAS 11 Construction Contracts and related interpretations. All other accounting policies have been applied on a basis consistent with prior year. (b) Principles of consolidation (i) Subsidiaries The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of the Parent and the results of all subsidiaries as at and for the period ended 30 June each year (the Group). Subsidiaries are all entities over which the Group has the power to govern the financial and operating policies, generally accompanying a shareholding of more than one-half of the voting rights. The existence and affect of potential

voting rights that are currently exercisable or convertible are considered when assessing whether a Group controls another entity. The financial statements of the subsidiaries are prepared for the same reporting period as the Parent, using consistent accounting policies. In preparing the consolidated financial statements, all intercompany balances and transactions, income and expenses and profit and losses resulting from intra-group transactions have been eliminated in full.

changes in the Group's share of net assets of the joint venture.

Goodwill relating to a joint venture

is included in the carrying amount of the investment and is not

amortised. After application of the equity method, the Group

determines whether it is necessary to recognise any impairment

loss with respect to the Group's net investment in joint ventures.

Goodwill included in the carrying amount of the investment in joint

ventures is not tested separately; rather the entire carrying amount of the investment is tested for

impairment as a single asset. If

Subsidiaries which form part of the Group are consolidated from the date on which control is transferred to the Group.

impairment is recognised, the

They are de-consolidated from the date that control ceases.

venture post-acquisition profits or

lntercompany transactions, balances and unrealised gains on transactions between Group entities are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. (ii) Joint ventures - Jointly controlled entities The Group's investments in joint ventures are accounted for using the equity method in the consolidated financial statements. Under the equity method, investments in joint ventures are carried in the consolidated statement of financial position at cost plus post-acquisition

amount is not allocated to the goodwill of the joint venture.

The Group's share of its joint

losses is recognised in profit or loss.

When the Group's share of

losses in a joint venture equals

or exceeds its interest in the joint

venture, including any unsecured long-term receivables and loans, the Group does not recognise further losses, unless it has

incurred obligations or made

payments on behalf of the joint venture.

(c) Foreign currency translation (i) Functional and presentation currency

Both the functional and

presentation currency of Parininihi ki Waitotara Incorporation and its

New Zealand controlled entities is

PARININIHI KI WAITOTARA INCORPORATION - NOTES TO THE FINANCIAL STATEMENTS

53


54

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) New Zealand dollars ($). (ii) Transactions and balances Transactions in foreign currencies are initially recorded by applying the exchange rates ruling at the date of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the reporting date. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate as at the date of the initial transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. (d) Revenue recognition (i) Rental income Rental income is recognised on a straight line basis over the term of the lease. Rent is received biannually on leased unimproved land. (ii) Milk proceeds The Group sells milk to Fonterra and has entered into milk price future contracts during the year on a per dollar per kilogram basis. The sale of milk is considered to contain a single performance obligation which is satisfied upon control of the milk transferring to Fonterra at the point in time the milk is extracted from the farm

milk vat into a tanker. Milk revenue is recognised at either the latest published forecast milk price, or the agreed milk price future contract. (iii) Quota lease Quota is leased based on annual catch entitlement which is determined annually. Quota lease revenue is recognised when the amount receivable can be measured reliably. (iv) Other revenue Livestock revenue is recognised on slaughter or pick up of the animals which is when control of the livestock transfers to the customer. Abattoir customers raise buyer created invoices based on the final weight of the livestock after slaughter, while other third parties are invoiced based upon agreed terms. Payment terms are generally 14 days after invoice. Interest revenue is recognised using the effective interest method. Dividend revenue is recognised when the right to receive payment is established. (e) Income tax The income tax expense charged to the statement of comprehensive income includes both the current year's provision and the income tax effect of: •T  axable temporary differences, except those arising from initial recognition of goodwill and other assets that are not depreciated; and

•D  eductible temporary differences to the extent that it is probable that they will be utilised. Temporary differences arising from transactions, other than business combinations, affecting neither accounting nor taxable profit are ignored. Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the group and it is probable that the temporary difference will not reverse in the foreseeable future. Tax effect accounting is applied on a comprehensive basis to all timing differences using the liability method. A deferred tax asset is only recognised to the extent that it is probable there will be future taxable profit to utilise temporary differences. Following the changes to subpart HI of the Income Tax Act 2004, an election was made to become a Māori Authority, for tax purposes, with effect from 1 July 2004. The income tax rate applicable for the current and comparative financial year was 17.5%. Distributions to Incorporation shareholders are no longer deductible for tax purposes. Any distribution of post 1 July 2004 reserves will include Māori Authority Credits of up to 17.5% of the gross taxable amount in


2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

values. The fair value of financial

the hands of shareholders. Any distribution of pre 1 July 2004 reserves is tax free in the hands of shareholders.

future contractual cash flows at the

(f) Goods and Services Tax (GST) The profit and loss component of the statement of comprehensive income has been prepared so that all components are stated exclusive of GST. All items in the statement of financial position are stated net of GST, with the exception of receivables and payables, which include GST invoiced. (g) Fair value estimation The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure

liabilities for disclosure purposes is estimated by discounting the current market interest rate that is available to the Group for similar financial instruments.

At each reporting date, the Group reviews the carrying amounts of its assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. If the recoverable amount of a cash generating unit is estimated to be less than its carrying amount, the carrying amount of the cash generating unit is reduced to its recoverable amount.

The fair value of financial

An impairment loss is recognised

markets (such as publicly traded derivatives, and trading and available-for-sale securities) is

immediately in the statement of comprehensive income. Where an impairment loss subsequently reverses, the carrying amount

based on quoted market prices at

of the asset is increased to the

balance date. The quoted market

revised estimate of its recoverable

price used for financial assets held by the Group is the current bid price; the appropriate quoted market price for financial liabilities is the current ask price. The nominal value less estimated credit adjustments of trade receivables and payables are assumed to approximate their fair

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost, less provision for expected credit losses. (j) Biological assets

(h) Impairment

purposes.

instruments traded in active

(i) Trade and other receivables

amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset. The reversal of an impairment loss is recognised immediately in income.

(i) Valuation of livestock Livestock at balance date includes dairy cattle, beef cattle and sheep and they are valued at fair value. Subsequent fair value changes are recognised in profit or loss. . Risk management strategies (i) Environmental and climatic risks The Group is exposed to climatic and other environmental risks. The Group's geographic spread of farms allows a degree of mitigation against adverse climatic (eg: drought and flooding) and environmental (eg: disease) effects at a regional level. (ii) Commodity price risk The Group is exposed to risks arising from fluctuations in the price and sales volume of livestock and dairy produce. (iii) Financing risk The nature of livestock farming means that most of the Group's agricultural revenue is received in the second half of the financial year, whereas financial expenses are incurred throughout the year. The Group manages this risk through budgeting and

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56

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) actively managing working capital requirements, as well as maintaining credit facilities at levels sufficient to meet working capital requirements. (k) Property, plant and equipment Property, plant and equipment is stated at historical cost less depreciation, except unimproved land which is stated at fair value. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Fair value is determined annually using an appropriate valuation methodology. Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.

Land is not depreciated. Depreciation on other assets is calculated using the straight-line and diminishing value methods to allocate their cost, revalued or net book value amounts to their residual values over their estimated useful lives, as follows: (see table below) The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount (note 2(h)). Gains and losses on disposal are determined by comparing proceeds with carrying amount. These are included in the statement of comprehensive income or other comprehensive income if related to unimproved land.

(ii) Computer software Costs associated with maintaining computer software programmes are recognised as an expense as incurred. Development costs that are directly attributable to the design and testing of identifiable and unique software products controlled by the Group are recognised as intangible assets when the following criteria are met: â&#x20AC;˘ there is an ability to use or sell the software product; â&#x20AC;˘ it can be demonstrated how the software product will generate probable future economic benefits; â&#x20AC;˘ the expenditure attributable to the software product during its development can be reliably measured.

(I) Intangible assets (i) Fishing quota The fishing quota is initially recognised at cost. The quota is

Accounting rates for property, plant and equipment

regarded as having an indefinite useful life because there is no foreseeable limit to the period over which they are expected to be useful. They are subsequently not amortised, but tested annually for impairment.

Straight Line

Diminishing Value

Buildings

1.03% - 33.33%

4.16% - 21.05%

Plant and equipment

2.7% - 4%

2% - 67%

Furniture and fittings

2% - 30%

3% - 67%

Motor vehicles

-

8% - 30%

Leasehold improvements

1.01% - 20%

5% - 16%

(m) Financial instruments A financial instrument is recognised if the Group becomes a party to the contractual provisions of the instrument. Financial assets are derecognised if the Group's contractual rights to the cash flows from the financial assets expire or if the Group transfers the financial asset to another party without retaining control or substantially all risk and rewards of the asset. Regular way purchases and sales of financial assets are accounted for at trade


2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) date, i.e., the date that the Group commits itself to purchase or sell the asset. Financial liabilities are derecognised if the Group's obligations specified in the contract expire or are discharged or cancelled. Financial instruments comprise trade and other receivables, cash and cash equivalents, loans and borrowings, and trade and other payables. Financial instruments are recognised initially at fair value plus transaction costs unless they are carried at fair value through profit or loss in which case the transaction costs are recognised in the profit or loss. The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and trading and available-for-sale securities) is based on quoted market prices at balance date. The quoted market price used for financial assets held by the Group is the current bid price; the appropriate quoted market price for financial liabilities is the current ask price. The subsequent measurement of financial assets depends on their classification. The Group classifies financial assets into categories depending on their contractual cash flow characteristics and the Group's business model for managing financial assets. The categories of financial assets are:

(i) Financial assets at amortised cost Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost. Interest income from these financial assets is included in finance income using the effective interest rate method. Any gain or loss arising on derecognition is recognised directly in profit or loss and presented in other gains/ (losses) together with foreign exchange gains and losses. Impairment losses are presented as a separate line item in the statement of profit or loss. (ii) Financial assets at fair value through other comprehensive income (FVOCI) Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets' cash flows represent solely payments of principal and interest, are measured at FVOCI. Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest income and foreign exchange gains and losses which are recognised in profit or loss. When the financial asset is derecognised, the cumulative gain or loss previously recognised in OCI is reclassified from equity to profit or loss and recognised in other gains/(losses). Interest income from these financial assets is included in finance income using the effective interest rate method. Foreign exchange gains and losses are presented in other

gains/(losses) and impairment expenses are presented as a separate line item in the statement of profit or loss. (iii) Financial assets at fair value through Profit or Loss (FVPL) Assets that do not meet the criteria for amortised cost or FVOCI are measured at FVPL. A gain or loss on a debt investment that is subsequently measured at FVPL is recognised in profit or loss and presented net within other gains/ (losses) in the period in which it arises. Financial liabilities The Group's financial liabilities include trade and other payables, loans and borrowings. The Group classifies its financial liabilities as financial liabilities at amortised cost. The classification of financial liabilities is determined on initial recognition. All financial liabilities are recognised initially at fair value, and in the case of loans and borrowings, include directly attributable transaction costs. All financial liabilities of the Group are subsequently measured at amortised cost. Interest expense and foreign exchange gains and losses are recognised in profit or loss. Any gain or loss on derecognition is also recognised in profit loss. Impairment of receivables From 1 July 2018, the group assesses on a forward-looking basis the expected credit losses associated with its debt

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2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) instruments carried at amortised cost and FVOCI. The impairment methodology applied depends on whether there has been a significant increase in credit risk. For trade receivables, the company applies the simplified approach permitted by IFRS 9, which requires expected lifetime losses to be recognised from initial recognition of the receivables. The recoverable amount of the Group's investments in receivables carried at amortised cost is calculated as the present value of estimated future cash flows. Impairment losses on an individual basis are determined by an evaluation of the exposures on an instrument by instrument basis. All individual instruments that are considered significant are subject to this approach. (n) Investment properties Investment property, which includes unimproved land, and commercial and rural land and buildings that earn rental income or appreciate in value, are initially measured at cost and subsequently measured at fair value. Gains or losses arising from changes in the fair value of investment property are included in the statement of comprehensive income in the period in which they arise.

(o) Trade and other payables Trade and other payables are carried at cost and due to their short term nature they are not discounted. They represent liabilities for goods and services provided to the Group prior to the end of financial year which are unpaid and arise when the Group becomes obliged to make future payments in respect of the purchase of these goods and services. The amounts are unsecured and are usually paid within 30 days of recognition. (p) Borrowings Borrowings are initially recognised at cost, being the fair value of the consideration received net of issue costs associated with the borrowing. After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method. All borrowing costs are recognised as an expense in the period they are incurred. (q) Derivatives and hedging activities The Group uses derivative financial instruments to hedge its risks associated with interest rate and the Fonterra farmgate milk price fluctuations. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently re-measured to fair value.

Derivatives are carried as assets when their fair value is positive and as liabilities when their fair value is negative. The fair values of interest rate swaps and milk price futures are determined using a valuation technique based on cash flows discounted to present value using current market interest rates. Any gains or losses arising from changes in the fair value of derivatives, except for those that qualify as cash flow hedges are taken directly to profit or loss for the year. Cash flow hedges are used when they hedge the exposure to variability in cash flows that are attributable either to a particular risk associated with a recognised asset or liability or to a forecast transaction. The Group currently has cash flow hedges attributable to payment of interest on borrowings, and the Fonterra final farmgate milk price. The effective proportion of the gain or loss on the hedging instrument is recognised in other comprehensive income, while the ineffective portion is recognised in profit or loss. The Group tests each of the designated cash flow hedges for effectiveness prospectively using the matched terms method. Interest rate swaps are tested quarterly and milk price futures are tested annually. Testing ensures that the hedging relationship meets all of the following hedge effectiveness requirements there is an economic relationship between the hedged item and the hedging instrument: the effect


2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) of credit risk does not dominate the value changes that result from the economic relationship: and the hedge ratio in the hedge relationship is the same as the quantity of the hedged item and of the hedging instrument that the Group uses for hedging purposes. At each balance date, the Group measures ineffectiveness using the dollar offset method. For cash flow hedges, any ineffective portion is taken to other expenses in the statement of comprehensive income. If the hedging instrument is sold, terminated or exercised without replacement or rollover, or if its designation as a hedge is revoked (due to it being ineffective), amounts previously accumulated in reserves remain in reserve until the forecast transactions occurs, at which time it is transferred to profit or loss. (r) Share capital Ordinary shares are classified as equity. (s) Dividend distribution Provision is made for the amount of any dividend declared on or before the end of the financial year but not distributed at balance date. Any dividend distribution to shareholders is recognised as a liability in the Group financial statements in the period in which

the dividends are approved by the Parent's shareholders. Dividends payable to shareholders where we do not have current contact details are held in Trust. On contact from a shareholder, or on approved succession of a shareholder, funds held in Trust are paid. (t) Employee benefits (i) Wages and salaries, annual leave and sick leave The provision for employee entitlements is recognised as a liability in the statement of financial position. These benefits include salaries, wages and annual leave. Where the payment is expected to exceed 12 months of balance date, the liability is recorded at its present value. Where the payment is expected to be less than 12 months, the provision is the amount expected to be paid. (u) Leases The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement and requires an assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset. (i) Group as a lessee Operating lease payments are recognised as an expense in the statement of comprehensive income on a straight-line basis over the lease term. Operating

lease incentives are recognised as a liability when received and subsequently reduced by allocating lease payments between rental expense and reduction of the liability. (ii) Group as a lessor Leases in which the Group retains substantially all the risks and benefits of ownership of the leased asset are classified as operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognised as an expense over the lease term on the same basis as rental income. (v) Comparative balances Comparative balances have been reclassified and restated to conform with changes in presentation and classification adopted in the current period.

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60

3 CORRECTION OF ERRORS A review of the Group's investments in joint ventures identified that the woodlots in the Mangaoapa Station Partnership had not been fair valued since inception of the investment in accordance with the accounting policies of the Group. The Group has since undertaken valuations for prior periods by a market specialist. This has resulted in an increase in the carrying value of investments in joint ventures and an increase in the deferred tax liability relating to the increase. Additionally, the increase in the fair value of the investment resulted in an increase in the share of profit from joint ventures through profit or loss, all affecting prior periods. A review of land and buildings held by PKW Farms LP identified land that had incorrectly been accounted for as Property, Plant and Equipment rather then Investment Property. This resulted in a decrease in land held as Property, Plant and Equipment, and an increase in land held as Investment Property. Additionally on reclassification, the Investment Property was revalued to its fair value, resulting in an increase in the fair value gain on investments through profit or loss, all affecting prior periods. The errors have been corrected by restating each of the affected financial statement line items for the prior periods, as follows:

Impact on equity (increase/(decrease))

As at 30 June 2018 Restated $â&#x20AC;&#x2122;000

As at 1 July 2017 Restated $â&#x20AC;&#x2122;000

-

(730)

804

2,824

-

1,650

Deferred tax liabilities

141

494

Net assets

663

3,250

663

3,250

Share of profit (loss) from joint ventures

804

-

Profit before income tax

804

-

(141)

-

Profit after income tax

663

-

Total comprehensive income for the year

663

-

Non-current assets Property, plant and equipment Investments in joint ventures Investment properties Non-current liabilities

Equity Retained earnings Impact on statement of comprehensive income (increase/(decrease))

Income tax expense


4 FINANCIAL RISK MANAGEMENT

(a) Financial instruments by category

Financial assets as per statement of financial position At 30 June 2019 Investments Accounts receivable Milk price futures collateral Cash and cash equivalents

At 30 June 2018 (Restated) Investments Accounts receivable Cash and cash equivalents

Financial liabilities as per statement of financial position

At 30 June 2019 Borrowings Derivative financial instruments Trade and other payables

At 30 June 2018 (Restated) Borrowings Derivative financial instruments Trade and other payables

Assets at fair value through profit or loss $'000

Financial Assets at amortised cost $'000

12,827 12,827

4,618 298 7,090 12,006

18,145 18,145

4,507 6,851 11,358

Cash Flow Hedge $'000

Other Financial Liabilities measured at amortised cost $'000

2,168 2,168

51,360 203 51,563

1,636 1,636

65,433 6 65,439

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62

5 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

of assets and liabilities within the next financial year are addressed below.

The preparation of the financial statements requires the Committee of Management and Management to make judgements, estimates and assumptions that affect the reported amounts in the financial statements. The Committee of Management and Management continually evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. The Committee of Management and Management bases its judgements and estimates on historical experience and on other various factors it believes to be responsible under the circumstances, the result of which form the basis of the carrying values of assets and liabilities that are not readily apparent from other sources.

(i) Unimproved lease land

The Committee of Management and Management has identified the following critical accounting policies for which significant judgements, estimates and assumptions are made. Actual results may differ from these estimates under different assumptions and conditions and may materially affect financial results or the financial position reported in future periods. Further details of the nature of these assumptions and conditions may be found in the relevant notes to the financial statements. (a) Critical accounting estimates and assumptions The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts

Parininihi ki Waitotara Incorporation recognises unimproved lease land in its statement of financial position. The land is valued internally by Management using a discounted cash flow model. The growth rate and discount rate applied in this model is reviewed by PwC. (b) Critical judgements in applying the entityâ&#x20AC;&#x2122;s accounting policies (i) Taxation The Group's accounting policy for taxation requires Management to make various judgements as to the types of arrangements considered to be a tax on income in contrast to an operating cost. Judgement is also required in assessing whether deferred tax assets and certain deferred tax liabilities are recognised in the statement of financial position. Deferred tax assets, including those arising from un-recouped tax losses and temporary differences, are recognised only where it is considered more likely than not that they will be recovered, which is dependent on the generation of sufficient future taxable profits. Deferred tax liabilities arising from temporary differences in investments, caused principally by retained earnings held in foreign tax jurisdictions, are recognised unless repatriation of retained earnings can be controlled and are not expected to occur in the foreseeable future. Assumptions about the generation of future taxable profits and repatriation of retained earnings depend on Management's estimates of future cash flows. These depend on estimates of future production and sales volumes, operating

costs, restoration costs, capital expenditure, dividends and other capital management transactions. Judgements are also required about the application of income tax legislation. These judgements and assumptions are subject to risk and uncertainty, hence there is a possibility that changes in circumstances will alter expectations, which may impact the amount of deferred tax assets and deferred tax liabilities recognised in the statement of financial position and the amount of other tax losses and temporary differences not yet recognised. In such circumstances, some or all of the carrying amounts of recognised deferred tax assets and liabilities may require adjustment, resulting in a corresponding credit or charge to the statement of comprehensive income.


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63

Restated 6 REVENUE 2019 2018 $’000 $’000 Rental income 7,315 7,275 Milk proceeds 15,674 13,879 Fisheries lease income 1,979 1,729 Other income 3,261 3,663 28,229 26,546

7 OTHER GAINS / (LOSSES) Restated 2019 2018 $’000 $’000 Gain / (loss) on disposal of property, plant and equipment 566 Gain / (loss) on investments at fair value (4,654) Gain / (loss) on investments at cost 186 Gain on investment property at fair value 10,319 Loss on foreign exchange (3) 6,414

(63) (1,804) (1) 709 (1,159)

8 EXPENSES 2019 2018 $’000 $’000 Auditors' remuneration 88 116 Depreciation 1,698 1,734 Employee benefits 3,757 3,731 Farm operating expenses 8,663 8,341 Lease expenses 345 420 Members fees 387 306 Other expenses 2,298 2,468 Amortisation 85 108 Total expenses 17,321 17,224

9 FINANCE INCOME AND EXPENSES 2019 2018 $’000 $’000 Finance costs Finance income Net finance costs

2,801 (236) 2,565

2,812 (128) 2,684


64

10 INCOME TAX EXPENSES

2019 $’000

Restated 2018 $’000

(a) Income tax expense Income tax is comprised of: Current tax on profits for the year Adjustments in respect of prior years Deferred tax (benefit) / expense Income tax expense Net gain / (loss) on revaluation of cash flow hedges Profit from continuing operations before income tax expense Tax at the New Zealand tax rate (i) Tax effect of amounts which are not deductible (taxable) in calculating taxable income: Other permanent differences Changes in fair value of investments Over / (under) provided in prior years Income not subject to tax Expenses not deductibe for tax purposes Income tax expense

1,441 1,240 23 50 477 397 1,941 1,687 (77) (24) 17,026 7,263 2,987 1,398

143 4 (1,332) 186 3 87 (56) 7 196 5 1,941

1,687

(i) The Group is taxed at the Māori authority tax rate of 17.5%, however some subsidiary entities of the parent are taxed at the corporate tax rate of 28%.

11 MĀORI AUTHORITY CREDIT ACCOUNT

2019 $’000

2018 $’000

Through direct shareholding Through indirect shareholding

9,599 -

7,576 -

12 TRADE AND OTHER RECEIVABLES

2019 $’000

2018 $’000

Accounts receivable 4,614 Milk price futures collateral 298 Prepayments 77 Dollar rewards 36 5,025

4,507 37 16 4,560


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65

13 BIOLOGICAL ASSETS 2019 2018 Livestock $’000 $’000 Cattle Balance at the beginning of the year Increase due to purchases Decrease due to sales Changes in fair value Balance at the end of the year

10,515 25 (2,252) 1,980 10,268

10,945 401 (2,005) 1,174 10,515

Sheep Balance at the beginning of the year Increase due to purchases Decrease due to sales Changes in fair value Balance at the end of the year Biological assets balance at the end of the year

14 10 56 11 (32) (18) 12 11 50 14 10,318 10,529 2019 2018 Units Units

Quantity of cattle on hand Rising 1 year heifers Rising 2 year heifers Cows Rising 1 year bulls Rising 2 year steers

1,498 1,075 945 1,197 3,947 4,131 716 600 295 742 7,401 7,745

Quantity of sheep on hand Ewes Two tooth rams Breeding rams Biological assets of the Group comprise dairy cattle, beef cattle and sheep.

278 2 4 284

104 4 108


At 30 June 2019 Cost Valuation Accumulated depreciation Net book amount

Year ended 30 June 2019 Opening net book amount Revaluation Additions Disposals Transfers from WIP Impairment charge recognised in profit and loss Depreciation charge (note 8) Closing net book amount

At 30 June 2018 Cost Valuation Accumulated depreciation Net book amount

Cost Valuation Accumulated depreciation Net book amount

At 30 June 2017 (restated, see note 3)

847 847

385 847 (385) 847

385 385

546 546

42,181 42,181

51,511 (9,330) 42,181

51,511 51,511

47,937 47,937

$'000

$'000

land

Freehold

WIP

Capital

17,915 (4,275) 13,640

14,872 594 (685) (455) (686) 13,640

18,521 (3,649) 14,872

18,092 (2,978) 15,114

$'000

Buildings

7,391 (3,454) 3,937

3,940 791 (232) (562) 3,937

7,359 (3,419) 3,940

7,484 (2,781) 4,703

$'000

Plant and

equipment

275 (124) 151

178 (27) 151

375 (197) 178

375 (166) 209

$'000

fittings

Furniture &

1,947 (845) 1,102

1,114 211 (64) (159) 1,102

1,852 (738) 1,114

1,863 (613) 1,250

$'000

Motor

vehicles

7,856 (1,478) 6,378

6,381 955 (694) (264) 6,378

7,860 (1,479) 6,381

6,894 (1,255) 5,639

$'000

Leasehold

improvements

land

44,738 44,738

49,346 (4,608) 44,738

49,346 49,346

49,346 49,346

$'000

Unimproved

78,412 44,738 (10,176) 112,974

127,727 (4,608) 3,398 (11,005) (385) (455) (1,698) 112,974

87,863 49,346 (9,482) 127,727

83,191 49,346 (7,793) 124,744

Total

$'000

66 14 PROPERTY, PLANT AND EQUIPMENT


14 PROPERTY, PLANT AND EQUIPMENT (CONTINUED)

(a) Unimproved land Unimproved land is stated at fair value which has been assessed using a discounted cash flow model, refer to note 19 for further detail. (b) Leasehold improvements Leasehold improvements are derived from the purchase of improvements to the land made by Lessee's. (c) Reclassification Following a review of the Group's assets, management identified an intangible asset that should be classified separately under intangible assets. As a result, the ERP software has been reclassified from plant and equipment to intangible assets. The Group continues to recognise the remaining low value intangible software assets as plant and equipment.

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68

15 INTANGIBLE ASSETS Computer

Fishing

$'000

$'000

$'000

Opening net book amount Reclassifications Accumulated amortisation Net book amount

460 (118) 342

15,620 15,620

15,620 460 (118) 15,962

At 30 June 2019 Opening net book amount Amortisation charge Closing net book amount

342 (85) 257

15,620 15,620

15,962 (85) 15,877

460 (203) 257

15,620 15,620

16,080 (203) 15,877

software

At 30 June 2018

At 30 June 2019 Cost Accumulated amortisation and impairment Net book amount

quota

Total

During the 2019 year there were no additions to share quota (2018: nil). There have been no disposals or impairment losses during the year (2018: nil). The fair value of the quota at 30 June 2019 is $50.7m (2018:$45.5m) as supplied by industry specialist Quota Management Systems Limited. During the year the presentation of the Groups Enterprise Resource Planning (ERP) software was moved from property, plant and equipment to intangible assets. There were no additions to the ERP (2018: nil). There have been no impairment losses during the year (2018: nil).


16 EQUITY ACCOUNTED INVESTMENTS Name of entity

Incorporated in

Equity holding

Port Nicholson Facilities Limited Partnership Port Nicholson Fisheries Limited Partnership Mangaoapa Station Partnership Ngāmotu Hotels Limited Partnership

New Zealand New Zealand New Zealand New Zealand

33% 12% 50% 33%

The registered office for both PNF Limited Partnerships' is 132 Tirangi Road, Rongotai, Wellington. The location of business for Mangaoapa Station Partnership is Stratford. The registered office for Ngāmotu Hotels Limited Partnership is Level 13, 36 Customhouse Quay, Wellington.

(a) Joint ventures

2019 $’000

Investment in joint ventures 10,471 10,471

Restated 2018 $’000 5,465 5,465

(b) Movements in carrying amounts Restated 2019 2018 $’000 $’000 Balance 1 July Capital invested Share of profit after tax Cash distribution Carrying amount at the end of the financial year

5,465 5,389 4,107 85 2,269 1,784 (1,370) (1,793) 10,471 5,465

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17 INVESTMENTS IN SUBSIDIARIES The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the accounting policy described in note 2(b):

Incorporated In Balance date Equity Holding 2019 2018 % % PKW Farms LP New Zealand 30-Jun 100 100 PKW Investments Limited New Zealand 30-Jun 100 100 Companies being removed: Te Oranga Livestock Limited New Zealand 30-Jun 100 100 Companies removed: PKWF 2013 Limited (removed 11 June 2019) New Zealand 30-Jun 100 100 Taranaki Aquagardens Limited New Zealand 31-Mar 100 100 (removed 5 December 2018) JSP Limited (removed 5 December 2018) New Zealand 31-Mar 100 100 PKW Farms LP is in the business of farming. PKW Investments Limited is dormant. Te Oranga Livestock Limited was in the business of livestock trading. The company ceased trading at 30 June 2018 and is in the process of being removed from the Companies Register, this will be completed in late 2019.

18 INVESTMENTS

2019 $â&#x20AC;&#x2122;000

2018 $â&#x20AC;&#x2122;000

Fonterra 11,543 17,198 Rockit Orchard No.2 Limited Partnership 259 25 11,802 17,223 Other financial assets carried at cost 1,025 947 1,025 947 12,827 18,170

Fonterra Co-operative Group Limited is measured at fair value using the listed share price at balance date. Rockit Orchard No.2 Limited Partnership is measured at fair value based on an assessment provided by an independant market specialist.


INVESTMENT PROPERTIES 19

2019 $’000

Restated 2018 $’000

Unimproved land vestment properties unimproved land Balance at beginning of year 128,177 127,648 Net gain in fair value 9,484 529 137,661 128,177 Commercial property Balance at beginning of year 2,570 2,390 Additions 69 Disposals (1,335) Net gain / (loss) in fair value (344) 180 960 2,570 Rural property Balance at beginning of year 1,650 1,650 Net gain in fair value 1,179 2,829 1,650 141,450 132,397 A discounted cash flow model is used to assess the fair value of the lessor's interest in the unimproved land. The growth rates and discount rates applied in this model are reviewed by PwC. The primary assumptions of the model are as follows: • Discount rate of 4.9% (2018: 5.4%); • Cash flows increase at the rate of 1.9% (2018: 2.1%), however they are only uplifted every seven years into the cash flow periods in line with the rental reset periods determined by legislation; • The time horizon is 30 years (2018: 30 years); • An assessment (and therefore potential adjustment) of the projected cash flows at the next rental reset period (being 2023/24), based on market knowledge and matters to be addressed during the next rental review. Commercial and rural properties are carried at fair value, which have been determined based on valuations performed by Telfer Young as at 30 June 2019, and internal valuations performed by the Groups internal registered valuer. The internal valuation methodology has been peer reviewed by Telfer Young at 30 June 2019. Telfer Young is an industry specialist in valuing these types of commercial and rural properties in the Taranaki region. The fair value represents the amount at which the assets could be exchanged between a knowledgeable willing buyer and a knowledgeable willing seller in an arms length transaction at the date of valuation. In determining fair value, the expected net cash flows applicable to each property have been discounted to their present value using a market determined, risk adjusted, discount rate applicable to the respective asset. The inputs applied in the valuation of the Group's investment properties have been categorised as level 3 in the fair value hierarchy.

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BORROWINGS AND UNCLAIMED DIVIDENDS 20

2019 $’000

2018 $’000

Rabobank facility 46,742 60,446 Unclaimed dividends 4,618 4,394 Fonterra shareholder support loan - 593 51,360 65,433 The Group utilises an interest only finance facility of $75m (2018: $75.3m) which includes an undrawn facility of $28.3m (2018: $14.8m) from Rabobank New Zealand Limited. The $75m is split into three facilities ($21m, $9m and $45m), which expire between 30 September 2022 and 20 February 2024. The interest charge on the drawn facility is currently at a variable rate based on an agreed margin over the BKBM rate (daily interbank rate). At 30 June that rate approximated 3.24% per annum (2018: 4.35%). The loan fee on the undrawn amount of the facility is 0.25% per annum. The facility is secured by seven first mortgages over certain leasehold and freehold interest in property and quota, a registered first security agreement over all present and subsequently acquired personal property with a combined priority sum of $364m across all the facilities and unlimited guarantees from Proprietors of Parininihi ki Waitotara Block, PKW Farms LP and PKW Investments Limited, and a general security agreement from PKW Farms LP, Proprietors of Parininhi ki Waitotara Block, PKW Farms GP Limited and PKW Investments Limited. The carrying value of financial assets pledged as collateral as at 30 June 2019 was $175m (2018: $135.7m).

21 DERIVATIVE FINANCIAL INSTRUMENTS

2019 $’000

2018 $’000

Current liabilities Interest rate swaps

712

655

Non-current liabilities Interest rate swaps 1,441 Milk futures 15 Total non-current derivative financial instrument liabilities 1,456 2,168

981 981 1,636

Interest bearing loans of the Group currently bear interest rates between 3.22% and 5.85%. In order to protect against rising interest rates the Group has entered into interest rate swap contracts under which it has a right to pay interest at fixed rates and to receive interest at floating rates. Swaps in place cover approximately 64% (2018: 62%) of the principal outstanding. The fixed interest rates range between 3.18% to 4.8% (2018: 3.37% to 4.8%) and the variable rate ranges from 1.4% to 1.55% above the 90 day bank bill rate, which at balance date was 1.6% (2018: 2.0%). The interest rate swaps require settlement of net interest receivable or payable each 90 days. The settlement dates coincide with the dates on which the interest is payable on the underlying debt. All swaps are matched directly against the appropriate loans and interest expense. They are settled on a net basis. The Group has entered into a cash flow hedge for milk price futures as a result of the variability from the Fonterra final farmgate milk price announced and settled in September each year. The objective of the hedge relationship is to create price certainty around milk price for a portion of the season based on the Fonterra final farmgate milk price determined and settled in September 2020. The futures contract locks in the price for a portion of milk production in the 2020 season and therefore provides some certainty of revenue received.


21 DERIVATIVE FINANCIAL INSTRUMENTS (CONTINUED) The Group has entered into 40 contracts at $6.80 per kilogram of milk solids and 39 contracts at $7.00 per kilogram of milk solids which cover approximately 20% of the Group's share of budgeted production for the next season. The milk price futures are marked to market and cash settled daily at the market price, which at balance date was as $6.78. The swaps and futures are measured at fair value and all gains and losses attributable to the hedged risk are recognised in other comprehensive income. Interest expense is recognised in profit or loss. The inputs applied in the valuation of the Group's interest rate swaps have been categorised as level 2 in the fair value hierarchy.

22 NET DEFERRED TAX ASSETS / (LIABILITIES) Property, Investment plant and properties equipment $’000 $’000 At 1 July 2017 (Restated) 869 Charged / (credited) to the statement 164 of comprehensive income At 30 June 2018 (Restated) 1,033

Livestock $’000

Other $’000

Total $’000

(11) 80

325 135

1,640 398

457 19 476

At 1 July 2018 1,033 476 Charged / (credited) to the statement 662 (248) of comprehensive income At 30 June 2018 1,695 228

TRADE AND OTHER PAYABLES 23

69 460 69 162

460 (99)

231 361

2019 $’000

2018 $’000

Trade creditors 203 Other payables 1,809 Provision for dividend - GST payable / (receivable) 135 2,147

6 2,688 1,557 83 4,334

Due to the short term nature of these payables, their carrying value approximates their fair value.

2,038 2,038 477 2,515

PARININIHI KI WAITOTARA INCORPORATION - NOTES TO THE FINANCIAL STATEMENTS

73


74

24 SHARE CAPITAL

2019 Shares

2018 Shares

2019 $’000

2018 $’000

Shares authorised, issued and fully paid

1,197,709

1,197,709

5,549

5,549

1,197,709

1,197,709

5,549 5,549

Shares issued have no par value, each shareholder is entitled to a single vote per share.

25 RESERVES AND RETAINED EARNINGS Restated 2019 2018 $’000 $’000 (a) Reserves Capital reserve 69,329 Cash flow hedge reserve (1,707) 67,622

73,937 (1,321) 72,616

Movements: Capital reserve Balance 1 July Charge to other comprehensive income Balance 30 June

73,937 (4,608) 69,329

73,937 73,937

Cash flow hedge reserve Balance 1 July Charge to other comprehensive income Balance 30 June

(1,321) (386) (1,707)

(1,207) (114) (1,321)

Capital reserve The capital reserve represents capital contributions that have been recognised and accounted for since establishment of the Parent, and the change in fair value of the unimproved land held as property, plant and equipment. Cash flow hedge reserve This reserve records the portion of the gain or loss on a hedging instrument in a cash flow hedge that is determined to be an effective hedge. These amounts retained in the cash flow hedge reserve at 30 June 2019 are expected to mature and affect profit and loss in subsequent financial periods. (b) Retained earnings Movements in retained earnings were as follows:

2019 $’000

Balance 1 July Net profit for the year Dividends Balance 30 June

169,011 15,085 - 184,096

Restated 2018 $’000 164,992 5,576 (1,557) 169,011


DIVIDENDS 26

On 5 July 2019 the Committee of Management approved a proposed dividend for 2019 of $1.45 per share (2018: $1.30), resulting in a total dividend of $1.737m. See note 30. Subsequent events for further details.

2019 $’000

2018 $’000

- -

1,557 1,557

27 CONTINGENCIES (a) Contingent liabilities There were no contingent liabilities as at 30 June 2019 (2018: nil).

28 COMMITMENTS (a) Capital commitments In 2015 the Group approved a Memorandum of Understanding subject to certain conditions, to invest in TaiHekenga, an iwi-consortium to partner The Port Nicholson Block Settlement Trust (PNBST) in the exercise of PNBST's Treaty settlement rights to the purchase of a portfolio of Crown property assets in central Wellington. As at 30 June 2019 the Group were considering a business case to approve a capital commitment of $4.5m with funds expected to be called before September 2019, this was approved in July 2019. In April 2018, Parininihi ki Waitotara Incorporation committed to invest in Te Puia Tapapa, a fund established by iwi and Māori organisations to invest in significant New Zealand businesses. As at 30 June 2019 the Group had approved a capital committment of $2m which is due on completion of key milestones by the fund. During the year the Group purchased a share of the Novotel Hotel in New Plymouth via Ngāmotu Hotels Limited Partnership (NHLP). The Group has a committment of $1m to meet the payments under the earn out clause in the sale and purchase agreement, this is due in December 2019 subject to certain conditions being met.

2019 $’000

2018 $’000

Investments 7,500 Property, plant and equipment - 7,500

2,000 380 2,380

PARININIHI KI WAITOTARA INCORPORATION - NOTES TO THE FINANCIAL STATEMENTS

75


76

28 COMMITMENTS (CONTINUED) (b) Lease commitments: as lessee The Group leases rural land under non-cancellable operating lease agreements. The lease terms are between 1 and 25 years, and the majority of lease agreements are renewable at the end of the lease period at market rate, except for one lease with a term of 25 years, this has an option to purchase the land at the end of the lease period subject to certain conditions. The future aggregate minimum lease payments under non-cancellable operating leases are as follows: 2019 2018 $â&#x20AC;&#x2122;000 $â&#x20AC;&#x2122;000 Within one year 165 Later than one year but not later than five years 102 549 Later than five years 1,122 1,166 Total 1,389 1,715 Commitments not recognised in the financial statements

1,389

1,715


29 RELATED PARTY TRANSACTIONS (a) Key management and personnel compensation Key management personnel compensation for the year ended 30 June 2019 is set out below. The key management personnel are all the Committee of Management Members, Directors, and the Shareholder Representative. Committee Members and Directors remuneration and value of other benefits received from the Group for the year ended 30 June 2019 were:

Committee of Parininihi ki Management Subsidiary Waitotora Trust Honoraria Director fees Honoraria $’000 $’000 $’000

Total $’000

PARININIHI KI WAITOTARA INCORPORATION - NOTES TO THE FINANCIAL STATEMENTS

77

2019 Hinerangi Raumati-Tu'ua 85 - - 85 Hinerangi Edwards

40

-

5

45

Taaringora Nicholas

45

25

-

70

40

25

335

50

5

390

-

60

-

60

-

-

3

3

Beverly Gibson

David MacLeod

Claire Nicholson Dion Tuuta

Committee of Management Members fees Richard Krogh (Independent Director)

Phillip Luscombe (Independent Director)

Darryn Ratana (Shareholder Representative)

45

40

40

-

-

-

-

30

335 140

-

-

-

-

-

45

40

65

40

30

8 483

During the year, the Committee of Management undertook a review of the Committee remuneration. As a result of that review the shareholders approved a revised remuneration approach to governance fees effective 1 January 2019 based on the above table. In addition to the standard governance fees, the following are paid: Chairs of Audit and Risk Committee, HR Committee and Parininihi ki Waitotara Trust receive an additional $5,000 of honorarium per annum. Committee of Management Members appointed to the boards of Port Nicholson Facilities General Partner Limited and Koura Inc General Partner Limited Directorships receive Director Fees of $5,000 per annum. The total fees paid for the six months to 31 December 2018 was $148k. The revised fee structure was implemented on 1 January 2019 and for the six months to 30 June 2019 the fees paid was $242k.


78

29 RELATED PARTY TRANSACTIONS (CONTINUED) (b) Other transactions with key management personnel or entities related to them Information on transactions with key management personnel or entities related to them, other than compensation, are set out below. These entities listed are approved suppliers with the Group. Beverly Gibson is the Chair of Mahia Mai a Whai Tara Trust and Chair of Te Korowai o Ngaruahine Trust. David MacLeod is a shareholder of AJ Greaves Electrical Limited and Chair of Taranaki Regional Council. Dion Tuuta is the Chairman and a Director of Koura Inc General Partner Limited (General Partner of Port Nicholson Fisheries Limited Partnership), Chief Executive Officer of Te Ohu Kaimoana and a Director of TSB Bank Limited. Hinerangi Raumati-Tu'ua is a Director of Te Ohu Kaimoana Trustee Limited, a Director of Venture Taranaki, a Director of Koura Inc General Partner Limited (General Partner of Port Nicholson Fisheries Limited Partnership), and a Director of Taranaki lwi Holdings Management Limited (General Partner of Te Kahui o Taranaki Holdings Limited Partnership). Phillip Luscombe is a Director of Par Farms Limited (recipient of independent director fees) and a Director of NZ Farmers Livestock Limited. Taaringaroa Nicholas, David MacLeod and Claire Nicholson are all committee members and shareholders of Parininihi ki Waitotara Incorporation. 2019 2018 $â&#x20AC;&#x2122;000 $â&#x20AC;&#x2122;000 Payments / (receipts) AJ Greaves Electrical Limited 4 6 Par Farms Limited 25 4 Te Korowai o Ngaruahine Trust (1) Venture Taranaki (41) (3) Port Nicholson Fisheries Limited Partnership 5 3 Te Kahui o Taranaki Holdings Limited Partnership (6) NZ Farmers Livestock Limited 6 1 (8) 11

(i) Other transactions and balances No other related party balances were written off or forgiven during the year (2018: nil).

30 SUBSEQUENT EVENTS On 5 July 2019, the Committee of Management members approved a dividend of $1.45 per share (2018: $1.30), resulting in a total dividend of $1.737m (2018: $1.557m) to be paid following approval by the shareholders at the AGM. As the Committee of Management approval was obtained following balance date the dividend has not been recorded in the financial statements.


31 STATEMENT OF ESTIMATED CURRENT MARKET VALUES (UNAUDITED)

PARININIHI KI WAITOTARA INCORPORATION - NOTES TO THE FINANCIAL STATEMENTS

79

AS REQUIRED BY SECTION 276A(3)(c) OF TE TURE WHENUA MĀORI ACT 1993 30 June 2019 $’000 Assets Current assets 22,433 Investments 74,255 Property, plant and equipment 152,825 Investment properties 141,450 390,963 Less liabilities Accounts payable and accruals 2,147 Term loans 46,742 Unclaimed dividends 4,618 Derivative financial instruments 2,168 Tax liabilities 3,090 58,765 332,198 Schedule of assets Investment properties Unimproved land value 137,661 Queen Street, Waitara 495 Miranda Street, Stratford 465 Rangikura Road, Waverley 1,950 Other rural land and buildings 879 141,450 Investments Ngamotu Hotels LP 4,006 PNF LP 1,565 Quota 50,700 Fonterra Co-op Shares 11,543 Mangaoapa Forest Partnership 4,900 Rockit Orchards No.2 LP 259 Other financial assets at cost 1,025 Other intangible assets 257 74,255


80

PARININIHI KI WAITOTARA TRUST

CHAIR'S REPORT HINERANGI EDWARDS

He pikinga poupou ki roto o Taranaki. I reira au nei mātakitaki iho. Tukutuku roimata e. Ka tuku roimata mō te hunga kua tae ki te tōrengitanga o tō rātou rā i tēnei tau. Haere, okioki rā. Ko tātou te hunga ora e mahue mai nei, tēnā tātou katoa. E rau rangatira mā, tēnei māua ko ngākau e mihi ana i tōku pūrongo whakamutunga hei tiamana o te taratī nei. Ka tū tonu ngā pou o Taranaki hei arataki i a tātou ngā uri whakatupuranga. Kia hāngai atu ki ngā kupu o Rangiahuta Ruka Broughton i kīa nei, 'kia kaha, kia mou tonu kei riro kei ngaro mō ake tonu atu'. Nō reira tēnā tātou e te whānau.

I am honoured to present what will be my last report on behalf of the Parininihi ki Waitotara Trust Board for the financial year 2018/2019.

agreement with Te Korowai o Ngāruahine. They are our first iwi partner to co-fund a scholarship specifically for their uri.

The Trust has experienced a great deal of change during the time I have served on its Board. Back then, the Trust was wholly reliant on the fortunes of the Incorporation and at that time things were very tough.

We know partnership goes beyond financial contributions. Meaningful partnering requires finding mutual wins and exploring opportunities where the partnership strengthens us. This example highlights the changing context in which the Trust operates. Most of our Taranaki iwi are now in a post-settlement phase and can now more readily focus on the aspirations of their own iwi and also the wider Taranaki rohe through collaboration. It will take leadership and desire to work beyond the traditional boundaries of iwi and mandate, but the future for Taranaki Māori looks brighter and I am interested to see how the role of the Trust will evolve.

Since then we have grown as the internal capacity of the Incorporation has grown. We have been steady in governance and are now poised for a new strategy to prepare for what the future has to offer. We have a number of strategic partnerships in place that are providing us with new avenues for co-funding to ensure we can continue to contribute to tertiary outcomes for our Trust's beneficiaries. I acknowledge during this financial year the signing of an


81

SCHOLARSHIPS AND GRANTS This year has seen many new opportunities created for the Trust through the Incorporation’s updated procurement policy with scholarships and internships created in partnership with Nova Energy, Meridian Energy and Marsh Insurance. These, with the Ngāruahine scholarship, see an additional $25.5k invested through the Trust annually. We acknowledge the continued support of Ballance and Ravensdown, and acknowledge the significant support from Victoria University, which sees at least 20 of our students gain a matched scholarship from them. In total, the Trust supported 193 tertiary students in their studies this year, as well as assisting 37 students through the reimbursement of their NCEA fees. We had identified that fees were a barrier for whānau and a

reason some of our children were not gaining school qualifications. This will be the last year of NCEA fees support as fees have been dropped by the government for the coming year. This year the average age of our tertiary recipients was 28 years with the youngest being 18 years and the oldest being 65 years. A number of those receiving support are people returning to study. Government policies make it more difficult for those over 40 to afford studying in fees paid courses. We encourage whānau considering study to find out what they are entitled to. Our kaupapa extends further than supporting individual study, however, and we are always open to applications from community and cultural groups. This year a total of $18,000 was distributed to four different community groups.

Left: Sir Māui Pōmare Day kaupapa. Right: Ngāruahine 'Swim like a Fish' kaupapa.

$47

HE HE ORANGA ORANGA PARININIHI PARININIHI KIKI WAITOTARA WAITOTARA TRUST TRUST - CHAIR'S - CHAIR REPORT

"We know partnership goes beyond financial contributions. Meaningful partnering requires finding mutual wins and exploring opportunities where the partnership strengthens us."

THOUSAND NET SURPLUS

Te Atiawa Māori Rugby received $2000 to deliver language and tikanga wānanga, while Para Kore Marae received $6000 to assist the implementation of a zero-waste initiative. Te Korowai o Ngāruahine were granted $5000 to help support the Swim Like A Fish kaupapa, and Manukorihi Pā Trustees received $5000 as a contribution towards Māui Pōmare Day activities. We are happy we could support these groups in their efforts to influence the lives of our whānau in such a positive and proactive way. As the next strategy is formulated and gains traction, it will be important that the Trust grows its offerings in other meaningful and considered ways. REVENUE AND EXPENDITURE This financial year the PKW Trust had a healthy net result of $47k surplus. This was the result of

<<


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"We have much to do beyond our current offerings, but it is your Trust’s belief that education is one of the key areas that we can best support whānau to grow opportunities to improve their lives."

<<

the work of the team to maintain expenditure at consistent levels to last year as well as attracting further financial support for activities. Overall, we distributed $246k (FY17/18 $248k) across 234 grants. We remain a significant contributor to tertiary education for Taranaki uri among other activity areas. OTHER ACTIVITIES The Trust has initiated a report on Skills Shortages in the Primary Sector, securing funding from the TSB Community Trust. The results of this report will be of great value to the kōrero of how to help Taranaki Māori secure the work they need to thrive. We also surveyed current and former Trust recipients to gain an insight into where their studies have taken them. The intention is that this survey will be carried out each year with new graduates so we can collect baseline data and feedback over a sustained length of time.

The responses have been interesting and encouraging. The vast majority of graduates (over 73%) report they are working, either in New Zealand or overseas. Respondents are working in a wide range of employment sectors, in a variety of roles. Education and health are represented the most highly, and it seems those wishing to work in Taranaki are most engaged in roles in these areas. More than half of the respondents reported that they are continuing their education journey either fullor part-time. The 2013 Census reported that 46.3% of Māori living in Aotearoa NZ earned less than $20,000 a year. Nearly seventy percent of our respondents said they are earning more than $50,000 a year. That is a stark contrast. We have much to do beyond our current offerings, but it is your Trust’s belief that education is one of the key areas that we can best support whānau to grow opportunities to improve their

lives. Your feedback, along with research where we partner with others in wider projects, helps us learn and make better decisions. This will ensure that what the Trust focuses on are things that actually make a difference. LONG TERM OUTCOME The role of the Trust is a humble one in the wider PKW group. I feel it has unrealised potential to contribute to the collective wellbeing of our people. This is partly because of its size and income. However, it has quietly given to every regional Manu Kōrero and Pae Rangatahi event held in Taranaki for over a decade; been a funder of every Taranaki Tū Mai event which has attracted thousands of people back to Taranaki (and we look forward to Ngāti Maru hosting in the coming weeks), regularly supported triathlon series and other health initiatives, provided pūtea for supported careers events and many other special kaupapa such as the ones named in this year’s financial report.

Left: June Hooker, Ngawai Hooker, John Hooker, Peter and Wiki Moeahu at PKW AGM, Owae Marae. Right: Shareholder rangatahi at PKW AGM, Owae Marae.


Left: Te Kāhui o ngā Mātā Raukura perform for shareholders at PKW AGM, Owae Marae. Right: Hine Rose whanau/mokopuna.

FINALLY It is a bittersweet moment to retire from both the Trust and the Incorporation at this AGM. I leave feeling proud of the quiet things the Trust has achieved. As a pan-Taranaki entity, I believe it still has a place, along with our iwi and other Taranaki Māori entities to make its contribution to a wider vision for Taranaki and for uri at home and elsewhere. It can do this alongside the Incorporation which has also made significant changes and advancements in its social, cultural and environmental practices. I would like to acknowledge the support and contribution of all the Trust Board members I have worked with over the last 12 years, including previous chair Tama Potaka. I think of the late Aunty Gloria Kerehoma who gave her blessing for me to be in this role. E kore e warewaretia. I will continue to champion the Trust as I move on, but now it is time to stand aside and let others serve.

Nga mihi -

Hinerangi Edwards Chair

2018 INCOME

$347,000

2019 INCOME

$414,000

2018 ASSETS

$3.144M

2019 ASSETS

$3.189M

2018 GRANTS PAID

$248,000

2019 GRANTS PAID

$246,000

HE HE ORANGA ORANGA PARININIHI PARININIHI KIKI WAITOTARA WAITOTARA TRUST TRUST - CHAIR'S - CHAIR REPORT

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Partnerships Provide Opportunity Providing meaningful opportunity for Taranaki M훮ori is a key driver for PKW's scholarship and internship programme, which is growing each year.

Building strong relationships with business partners to bring about value-add propositions has increased the number of opportunities to receive funding towards tertiary education fees. Gaining valuable experience in a diverse range of organisations across a wide variety of industry sectors is also available for PKW wh훮nau. "It is exciting to see the increase in opportunities our strategic approach is starting to generate," says Mitchell Ritai, General Manager Shareholder Engagement. "Scholarships and internships not only benefit the

individual, but help to increase the skills and capabilities within our wh훮nau and iwi. The organisation providing the opportunity can also benefit from a new perspective and ideas the recipient can bring with them. It's a win:win all round. "We intend to continue building relationships and strengthening partnerships with our suppliers so the number of opportunities for our rangatahi can grow." Currently, opportunities are available with the following PKW partners:

"Scholarships and internships not only benefit the individual, but help to increase the skills and capabilities within our wh훮nau and iwi." Mitchell Ritai

VICTORIA UNIVERSITY WELLINGTON Two co-funded scholarships worth $5000 are available each year to existing students. Victoria University Wellington was founded in 1897 and named Victoria College in recognition of Queen Victoria's Diamond Jubilee. Historically, the university has shown a strength in public policy and has made substantial contributions to several major government projects. Educating the next generation of entrepreneurs is a focus for the future.

BALLANCE AGRI-NUTRIENTS Two scholarships worth $2,500 available to full time land science or business studies undergraduate students. Ballance is a NZ farmer-owned cooperative that helps make farming more productive, profitable and sustainable. From a core business of manufacturing fertiliser, it has grown to offer a full range of nutrient- related products and services. These enable farmers to achieve productivity goals while leaving a minimal environmental footprint.


A $5,000 scholarship is available for one undergraduate for a maximum of three years. The opportunity for an internship is also on offer. Applicants must align with PKW and Ravensdown business activities. Started by South Canterbury and Otago farmers in 1978 to avoid a fertiliser production monopoly, Ravensdown has expanded its product offerings to cover all elements of the food creation business in a way that reduces environmental impacts and optimises value from the land.

MARSH INSURANCE A $2,000 undergraduate scholarship and opportunity for internship. Studies must contribute to PKW's business activities. Marsh Insurance is a global leader in insurance broking and innovative risk management solutions. They help their customers quantify and manage risk and unlock new opportunities for growth.

NOVA ENERGY

FARMLANDS

Undergraduate students in technical or science-related field are eligible to apply for this $5,000 per year for three years scholarship.

Up to three annual $2,500 scholarships are available for undergraduates undergoing full-time study. Studies must contribute to PKW and Farmlands business activities.

One of the newest power retailers in the New Zealand market, Nova offers electricity, natural gas, broadband internet services and landline telephone services. The company prides itself on its awardwinning customer services.

TE KOROWAI O NGĀRUAHINE TRUST This $2,500 co-funded scholarship is for full-time undergraduate students whose studies align with PKW and Te Korowai o Ngāruahine Trust business activities. The Trust is the mandated postsettlement governance entity for Ngāruahine Iwi.

New Zealand's largest farmerowned co-operative, formed with the intention of providing competition in the retail farm supply industry to reduce costs for small agribusinesses. Farmlands supplies products and services for all elements of the farming industry.

KPMG A paid summer internship opportunity for a PKW scholarship recipient in a relevant field of study. KPMG is a global network of professional firms providing audit, tax and business advisory services.

iSTUDIOS BNZ MERIDIAN ENERGY Co-funded by PKW, this $1,500 one year scholarship is open to all undergraduate students. Meridian is NZ's largest renewable energy generator, producing all its power from 100% renewable sources. It is also one of the country's largest power retailers.

A co-funded scholarship of $2,500 for undergraduates studying in the banking or finance related field along with a potential opportunity for a summer internship. BNZ is one of New Zealand's big four banks and provides financial services across the retail, business and institutional banking sectors.

A paid summer internship opportunity for a PKW scholarship recipient in a relevant field of study. Providing multimedia design, marketing and communications services to a wide range of clients, iStudios is a local Taranaki company.

HE ORANGA

RAVENSDOWN

PARININIHI KI WAITOTARA TRUST - CHAIR REPORT

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PARININIHI KI WAITOTARA TRUST

NGĀ KAIWHIWHI TAUTOKO SCHOLARSHIPS AND GRANTS

"I’m learning to finally call myself an artist and I’m immensely grateful that PKW sees the value in the arts by honouring me with this scholarship. " Bonita Bigham Charles Bailey Postgraduate Scholarship Recipient

CHARLES BAILEY POSTGRADUATE SCHOLARSHIP Recipient

Bigham, Bonita

Year

2019

Qualification

Master of Māori Visual Arts

Shareholder Support

Josie Bigham

MATE KI TAWHITI CARR POSTGRADUATE SCHOLARSHIP Recipient

Fazakerley, Olympia

Year

2019

Qualification

Shareholder Support

Shareholder Support

Master in Applied Management JN & R Taiaroa Whanau Trust

EDWARD TAMATI POSTGRADUATE SCHOLARSHIP Recipient

Bodger, Steven

Year

2019

Qualification

Master of Education

Patricia Bodger

GLORIA KEREHOMA POSTGRADUATE SCHOLARSHIP Recipient

Stephens, Susan

Year

2019

Qualification

Masters of Public Health

Shareholder Support

Ihaka Robinson

PKW-VICTORIA UNIVERSITY POSTGRADUATE SCHOLARSHIP RECIPIENTS Recipient

Wi-Neera, Nirvana

Year

2019

Pope, Rere-No-A-Rangi 2019

Qualification

Shareholder Support

Master of Education

Jamie Tuuta

Master of Software Development

Angela Te Wharemamaku Edwards


Recipient

Year

Qualification

Shareholder Support

Kahui, Vaun

2019

Bachelor of Business

Neville Bevan Kahui

Warbrick-Ellison, Mahinaarangi 2019 Bachelor of Science Rena

Richard James Tamati Ellison Whanau Trust

PKW-RAVENSDOWN UNDERGRADUATE SCHOLARSHIP RECIPIENT Recipient

Year

Waipoua-Bryers, Taiawhio 2019

Qualification

Bachelor of Science (Technology)

Shareholder Support Victoria Ann Kilgour

PKW-NGÄ&#x20AC;RUAHINE UNDERGRADUATE SCHOLARSHIP RECIPIENT Recipient

Year

Weston-Jacobson, Bianca 2019 Chantelle Aroha

Qualification

Graduate Diploma of Teaching (Primary)

Shareholder Support

Nanci-lee Hinerakei Katene

PKW-NOVA ENERGY UNDERGRADUATE SCHOLARSHIP RECIPIENTS Recipient

Year

Qualification

Shareholder Support

Hintz, Joby

2019

Bachelor of Civil Engineering

Cheryl Hintz

Poa, Poipoia Te Taonga

2019

Bachelor of Commerce

Wiremu Whanau Trust

Roach, Jessica

2019

Bachelor of Science

Bryan Wynyard Roach

PKW-MARSH INSURANCE UNDERGRADUATE SCHOLARSHIP RECIPIENT Recipient

Katene-Ashford, Tazmyn

Year

2019

Qualification

Bachelor of Arts

Shareholder Support

Nanci-lee Hinerakei Katene

PKW-MERIDIAN INSURANCE UNDERGRADUATE SCHOLARSHIP RECIPIENT Recipient

Koroheke, Te Rangihaeata

Year

2019

Qualification Bachelor of Design

Shareholder Support

Ruve Maureen Lindsay

PKW UNDERGRADUATE SCHOLARSHIP RECIPIENTS Recipient

Year

Qualification

Shareholder Support

Langton, Bree-Anna 2019

Bachelor of Medicine and Surgery (MBChB)

Rex Bruce Langton

McConnell, Glenn

Kennedy, Ngawhira Omecia 2019

Bachelor of Laws/ Bachelor of Arts

Ani Patene Kupe

2019

Bachelor of Arts

Ngaki Dawn McConnell

Ritai, Taimus 2019

New Zealand Diploma of Business

Pamela Te Urumairangi Ritai

Tamati, Te Waikapoata

Bachelor of Dental Surgery

Whanau Hond Trust

2019

HE ORANGA

PKW-BALLANCE UNDERGRADUATE SCHOLARSHIP RECIPIENTS

PARININIHI KI WAITOTARA TRUST - SCHOLARSHIPS & GRANTS

87


88

"This year I have been able to bring new focus to my studies and the scholarship will make a real difference, both financially and educationally." Tazmyn Katene-Ashford PKW-Marsh Insurance Undergraduate Scholarship Recipient

TERTIARY GRANTS Recipient

Qualification

Shareholder Support

Amor-Ponter, Crystal

Bachelor of Commercial Music

Vickie Amor

Anderson, Jamaika

Bachelor of Arts

Betty Rautau Anderson

Atkinson-Kingi, Tiana

New Zealand School of Tourism - Tourism, Peter Moeahu Jnr Hotel & Airline Operations Level 4 and Tourism & Travel Management Diploma Level 5

Atutahi, Heather

Bachelor of Community Health

Heather Atutahi

Atutahi, Lyla

Diploma in Conveyancing

Lyla Mamaeroa Atutahi

Bailey-Nowell, Abbie

Graduate Diploma of Teaching (Primary)

Charles Bailey Estate

Bailey, O'Jay

Bachelor of Nursing

Michael Matoe

Baker, Cynda

Master of Clinical Nursing

Joseph Kauika

Barriball, Rimu

Bachelor of Science - Zoology

Wayne Gordon Barriball

Bassett, Nancy Lynette

Master of Arts

Nancy Basset

Bayly, Te-Rapa

Diploma in Hotel Management

Buster Parry

Bidois, Emily Emire Mauria

Bachelor of Applied Management Degree Nanny Ruby's Whanau Trust

Bishop, Chyloe

Diploma of Leadership and Management

Ramari Bishop

Blackburn, Roimata

Bachelors of Applied Science (Medical Imaging Technology, Radiography)

Heemi Wiripo Ngaiwikatea Bailey Whanau Trust

Bourne, Chyna-Li

Bachelor of Law

Campbell Ming Fei Gin

Bright, Alexis

Pre Entry to Healthcare

Gary Ngaia

Brooks, Alayna Bachelor of Nursing

Heemi Wiripo Ngaiwikatea Bailey Whanau Trust

Brooks, Alison

Conjoint Bachelor of Law and Bachelor of Science

Marylinda Brooks

Brooks, Daniel

Bachelor of Business Studies

Steven Russell Gray

Buchanan, Hannah

Diploma - Heke Reo MÄ ori

Hannah Mary Buchanan

Cann, Ariana

Radiation Therapy

Kenneth Royce Tohia

Cattley, Shannon

Bachelor of Architectural Studies

Robert Hurinui

Chase, Charlene-Jackwalyn

He Korowai Akonga

Maria Rose Chase

Chittenden-O'Leary, Jesse

Bachelor of Design Innovation

Roberta Irirangi Walden

Cotterill-Jeffries, Corin

Certificate in University Preparation

Fiona Veronica Cotterill

Cribb, Miriama

Master of Business Studies

Retihamatikei Lorraine Cribb

Davis, Aaron

Bachelor of Business Studies

Marcus Paul Davis


Recipient

Qualification

Shareholder Support

Davis, Taine

Bachelor of Business / Bachelor of Science Marcus Paul Davis

Dooney, Rhys

Bachelor of Science

Patricia Jill Affleck

Dooney, Sara

Bachelor of Engineering (Hons)

Patricia Jill Affleck

Duxfield, Macy

Bachelor of Law & Bachelor of Arts

Tirita Tawhake Tamou Whanau Trust

Elkington, Angus

Doctor of Clinical Psychology

Elkington Trust

Fitzpatrick, Daniel

Postgraduate Diploma Secondary School Teaching

Marama Lyall Barraball

Gin, Atiria Bachelor of Health, Sports and Human Taonui Lance Mark Gin Performance Hancock, Megan

Bachelor of Business Analysis / Bachelor of Law (Hons).

Delwyn Maria Hancock

Harrop-Marriner, Portia

NZ Certificate in Horticulture

Gary Ngaia

Harrop-Marriner, Samme-Sara

Diploma in Vet Nursing

Gary Ngaia

Harvey, Jack

Postgraduate Diploma in Business

Elaine Rahera Carr Harey

Hau, Emma

Bachelor of Midwifery

Kenneth Mark Hau

Hau, Kenny

Bachelor of Surgery and Medicine

Kenneth Mark Hau

Kathleen Lisa, Hawe

Diploma - Te Reo MÄ ori

Kathleen Lisa Hawe

Hemara-Wahanui, Kayla

Bachelor of Nursing

Patrica Hemara Wahanui

Hobbs, Zoe

Bachelor of Science (Human Nutrition)

Dorothy Hobbs

Hoeta, Kandi

Maunga Kura Toi - Level 6 Raranga

Holman-Wharehoka, Maia-te-oho Bachelor of Building Science

Charmaine Hoeta Rongomai Wharehoka

Hopa-Cribb, Maraea

He Korowai Akonga : Bachelor of Education George Hopa (Primary Education) Level 6 Year 2

Hopa, Carolyn

He Waka Hiringa - Masters in Applied Indigenous Knowledge

Huhu, Parengaio

Bachelor of Visual Arts (Te Toi o nga Rangi) Janette Lucia Manu

Jones, Taneal

Bachelor of Commerce

Mulligan Whanau Trust

Kahui-Mauriri, Johan

Certificate - Kawai Paupapa

Johan Meka Kahui-Mauriri

George Hopa

Kara-Tihi, Dominique Te Uruhina Certifcate Level 4 Business Administration Thomas Turetangata Malcomb Kara and Technology Katene-Rawiri, Mariah

Diploma Business Management

Frances Kingi Katene

Katene, Asher

Bachelor of Arts

Te Hinganga Betty McLean

Katene, Makiya

Bachelor of Arts

Winton Wiremu Katene Jnr

Katene, Reuben

Bachelor of Dental Surgery

Josie Bigham

Kauika, Ashleigh

Bachelor of Nursing Degree

Joseph Kauika

Keepa, Aotahi

Certificate Health Science

James Hawe

Kemp, Lena

Bachelor of Health Sciences: Honours

Jan Hariata Bezems

Kemp, Noah

LLB (Bachelor of Law) and BA (Bachelor of Arts)

Jan Hariata Bezems

Kerehoma, Bronson

Diploma in Hospitality and Tourism

Marylinda Brooks

King, Martin

Master of indigenous Studies

Stephen Denis King

Kingi-Laurence, Willow

Bachelor of Arts

Noel Tapi Kingi

Kira, Caliah

Bachelor of Psychology

A.T.G Abraham Whanau Trust

Langton, Shamus

Bachelor Communication

James Frederick Langton

Langton, Xavier

Bachelor of Commerce

Rex Bruce Langton

Laupama, Shelton Malia Tarati

Level 4 Certificate in Fitness

Leanne Snooks

HE ORANGA

TERTIARY GRANTS (CONTINUED)

PARININIHI KI WAITOTARA TRUST - SCHOLARSHIPS & GRANTS

89


90

TERTIARY GRANTS (CONTINUED) Recipient

Qualification

Shareholder Support

Lawrence, Caleb

New Zealand Certificate in Health and Te Ahu Randal Rei Wellbeing (Social and Community Services) (Level 4) with strand in Mental Health and Addiction Support

Lewis, Chontell

Bachelor of Law

Shane Ruihi

Lewis, Kimberley

Bachelor of Health Science

Beverley Anne Robinson

Lock, Sam

Bachelor of Computer Science

Jacqueline Elizabeth Martin

Loper, Nicole

Bachelor of Medicine and Surgery

Clesta Benita Loper

Luke, Bobby

PhD Creative Technologies

Bobby Campbell

MacFater, Wiremu

PhD Surgery

Sarah Williams MacFater

MacLeod, Reuben

Bachelor of Science

David Nigel MacLeod

Mako, Maria

Bachelor Biligual Primary School Teacher

John Henry Katene Hooker

Manaia, Georgina

Bachelor Bicultural in Social Work

Pandra Reihana

Manaia, Tuarua

Bachelor of Health Science

Marietta Heni Manaia

Manu-Millar, Rebekha

Certificate Foundation Health Science

Cindy Avery Millar

Manukonga, Adrian

Certificate in Culinary Arts (Level 4) Year 1 Tinitia Raikaao Whanau Trust

Maruera, Janine

Te Aupikitanga ki te Reo Kairangi

Janine Maruera

Matenga, Grace

Bachelor of Health Science

Lucy Wetere Rata

Maxwell, Lily

Bachelor of Nursing

Jamie Tuuta

Mckenzie, Tom

Bachelor of Agricultural Science

Shona Agnes Maxwell

Meleisea, Atiliai

Bachelor of Arts

Tawhakirangi Tuhia Tutahione

Mildenhall, Taylor

Bachelor of Nursing

Lynne Amy Foster

Moore, Tracey

Bachelor of Social Work

Wikitoria Jessie Beamish

Morgan-Edmonds, Turanga

Bachelor of Design / Te Reo MÄ ori

Riwai Morgan Whanau Trust

Morrell (nee Preston), Aimee Certificate in Business Studies

Edward Rongmai Ira Tamati Whanau Trust

Murray, Logan

Bachelor of Medicine and Bachelor of Surgery (MB ChB)

Ani Teinati Murray

Muru-King, Rhys

Bachelor Degree in Media Arts (Fashion Design)

Bernard King

Nepia-Peina, Te Atuarere Level 3 & 4 Health Science

Wikitoria Keepa Mete Kingi Whanau Trust

Ngaronga, Jamie

Poutahu Whakaakoranga

Te Awhe-Kingi Whanau Trust

Ngeru, Chiquita

Bachelor of Nursing

Edward Te Mira Ngeru

Nicholson, Joshua Bachelor of Medicine and Bachelor of Surgery

Claire Nicholson

Nicholson, Matt

Bachelor of Commerce

Claire Nicholson

Niwa, Baylee

Postgraduate Diploma of Business Administration (MBA)

Maurice Niwa

O'Carroll, Kathleen

New Zealand Sign Language - English Interpreting Major - Bachelor of Arts

Vickie Amor

Osborne, Mako

Bachelor of Commerce

Janica Huia Herlihy

Paki Paki-Utiera, Samantha

Bachelor of Arts and Bachelor of Commerce Maria Kiri Pakipaki

Palmer, Leah

Bachelor of Health Science

Charels Pears Palmer

Parata-Sullivan, Shyra

Bachelor of Science

Hira Parata

Parata, Kiri Master of Arts

Edward Rongomai Ira Tamati Whanau Trust

Parata, Trevarn

Elliot John Mauriri

Bachelor of Business


Recipient

Qualification

Shareholder Support

Parker, Delaney

Te Tohu Paetahi - M훮ori and Indigenous Studies

Evelyn Te Ringakaha Pullen Whanau Trust

Payne, Matiu

PhD (Doctor of Philosophy)

Florence June Tikao

Piki, Keanu

Bachelor of Science

Poi Pue Estate

Poa, Te Wainuiarua

Bachelor of Law & Bachelor of Arts

Wiremu Whanau Trust

Preston, Joshuaa

New Zealand Certificate in Business (Adminisration and Technology) (Level 3)

Wiremu Kingi Te Toa Rang훮tira Whanau Trust

Ratahi, Aquila-Maree

Certificate Beauty Therapy

Daniel Cyril Ratahi Whanau Trust

Ratahi, Tima

Bachelors Degree in Applied Management Gray Ratahi

Ratana, Te Uru Kowhai

Bachelor of Engineering

JN & R Taiaroa Whanau Trust

Repia, Natalia Certificate - M훮ori Natural Resource John Green Management Reweti, Tuari

Diploma in Counselling

Pamela Te Urumairangi Ritai

Robb, Michelle

Certificate - Te Ara Reo Level 1-2 He Pii Ka Pao

Rauru Te Ng훮 Ruru Whanau Trust

Roberts, Etelini Rose

Bachelor of Biomedical Science

James Rollo Berry

Robinson, Noel Certificate - VMI - Vehicle, Machinery, Warwick Moroni Robinson Infrastructure Savage, Te Aata

Postgraduate Diploma in Psychology

Roberta Irirangi Walden

Seed, Jacinta

Bachelor of Health Science (Physiotherapy) Rongomai Wharehoka

Serubasaga, Kini

Bachelor of Nursing

Lucille Gawler

Sheridan, Tamahina

Bachelor of Arts

Moses Apou

Simpson, Taylor

Electrician

Lynne Rei

Slater-Carter, Madelyne Bachelor of Medicine and Bachelor of Surgery

Christine Maragaret Mathieson-Picken

Smith, Joshua

Peri Whanau Trust

Carpentry

Solomon, Joshua Bachelor of Medicine and Bachelor of Surgery

Hinewaito Bigham

SooChoon, Grace

Bachelor of Arts

Whanawhana Tauranga

Speechlay, Maia

Bachelor of Law and Arts

Merilyn Jean Speechlay Estate

Speechlay, Natalia

Bachelor of Teaching (Primary)

Merilyn Jean Speechlay Estate

Stephens, Ropata

Diploma of Te Tohu Paetahi

Susan Stephens

Stephens, Teiarere Postgraduate Diploma in Science and Wirape Ruakere Technology Stevenson, Dayna Bachelor of Science

Heemi Wiripo Ngaiwikatea Bailey Whanau Trust

Stevenson, William Certificate in University Studies

Heemi Wiripo Ngaiwikatea Bailey Whanau Trust

Sullivan, Courtney Bachelor of Medicine and Surgery

Hautorokawa Wi Komomo Sullivan Whanau Trust

Syminton, Kay

The Emily Garland Whanau Trust

Doctorate of Health Science

Tahau, Alexandra Bachelor of Commerce

Reiwyn Kaaneihana Davey (Hohaia) Whanau Trust

Tapiki, Lisa

Certificate in Pattern Design

Kathryn Tapiki

Taylor-Mason, Iyanah

Bachelor of Nursing

Toherangi Whanau Trust

Taylor, Pianika Bachelor of Health Sciences

Edward Rongomai Ira Tamati Whanau Trust

HE ORANGA

TERTIARY GRANTS (CONTINUED)

PARININIHI KI WAITOTARA TRUST - SCHOLARSHIPS & GRANTS

91


92 TERTIARY GRANTS (CONTINUED) Recipient

Qualification

Shareholder Support

Te Wiki, Redemption Kopeke Moeke

Bachelor of Science / Bachelor of Arts

Whai Te Wiki

Telford, Portia Harimate Teuila

NZ Certificate in Horticulture

Maria Elizabeth Irving

Thocolich, Aaliyah

Bachelor of Science

Iwimaire Davey Whanau Trust

Thomas-Moore, Kianai-Mayy

Hairdressing Salon Skills

Daniel Cyril Ratahi Whanau Trust

Thomson-Baker, Aliesha

Bachelor of Health Sciences

Paula Frances Niwa

Tikao, Roy

New Zealand Certificate in Business - First Florence June Tikao Line Management Health

Timu-Kaea, Jody

Bachelor of Nursing

Michael Matoe

Tioro, Hope

Bachelor of Psychology

Sonia Marama Tioro

Tito-Collins, Ashleigh

Graduate Diploma of Teaching

Rex Bruce Langton

Tumahai, Taina

Bachelor of Humanities

Ngawai Walden

Urwin, Abbey Bachelor of Medicine and Bachelor of Surgery

Raymonde Pikitu Cowell

Urwin, Anthony

BA Te Reo MÄ ori

George Urwin

Urwin, Jordan

Bachelor of Business

Raymonde Pikitu Cowell

Van Nistelrooy, Oriana Postgraduate Diploma in Environmental Science

Joan Te Awhe

Vella, Riria

Te Ahu Randal Rei

Bachelor of Health

Wana, Awhina Bachelor of Nursing Year 1

Ngakawe and Hauraki Wana Whanau Trust

Watson, Kobe Rangi

Certificate - My Pathways Foundation and He Whenua Tapu Whanau Trust Electrical Engineering Level 3

Watts, Grace

Bachelor of Health Sciences

Louisa Ada Bull Whanau Trust

Wayne, Toni

Bachelor of Applied Management

Pare Tomo Whanau Trust

Weston, Azaria

Certificate in Metal Fabrication

Te Ahu Randal Rei

Wharepapa, Anne

Bachelor of Nursing

Juanita Davis

Wharepapa, Renee

Bachelor of Business

Douglas Gibbs Puke

Wheeler, Hanna Bachelor of Nursing

Heemi Wiripo Ngaiwikatea Bailey Whanau Trust

Whiu, Vanessa

Masters of Business Studies

Vanessa Whiu

Williams, Bailey

Post Graduate Dip in Science (specializing Wiremu Whanau Trust in Psychology)

Williams, Sheena

Bachelor of Teaching in Early Childhood

Peter Samuel Jackson

Williams, Takarangi

Electrician

Koroniria Okeroa

"I've always been passionate about solving problems using technology and the internship allowed me to get back to where my mum comes from, so I am really honoured to have been able to help my people." Rere-No-A-Rangi Pope PKW-Victoria University Postgraduate Scholarship Recipient


93

Shareholder Support

Cashell, Nathaniel

Ann Barber

Chase, Tyson

Jonathan Murray

Davison, Riley

Sarah Hera Matangi

Dooney, Sara

Patricia Jill Affleck

Geary, Shyla Kay

Taranaki M훮ori Trust Board - Wharehoka Wano

Graham, Izayah

Charmaine Hoeta

Hemara-Tylden, Grace

Puanani Hemara

Hemara-Tylden, Maia

Puanani Hemara

Irving, Samantha

Judy Richards

Kapa, Tarawau

A.T.G. Abraham Whanau Trust

Katu, Tristan Tyrel

Judy Richards

King, Maia

Bernard King

Langton, Ethan

Rex Bruce Langton

Luke, Tiare Vera

Hina Lucy Luke

Luke, Kearin Morgan Parata

Hina Lucy Luke

Luke-Royal, Rongomai Miriam

Hina Lucy Luke

Luke-Royal, Taurua Nganeko

Hina Lucy Luke

Mason, Tyrese

Toherangi Whanau Trust

Morgan-Edwards, Tiahorangi Garrick

Riwai Morgan Trust - Trustee Paul Morgan

Muru-King, Niki

Bernard King

Parata, Ngapera Tapuikura

Kathryn Tapiki

Pauro, Cruz

Raymond Tuuta

Pauro, Connor

Raymond Tuuta

Pepere, Judah James

Mana Jenkins

Pepere, Torrence Kahui

Mana Jenkins

Pickering, Hine-aa-rangi

Anifred Edith Horiana Marriner

Rennie, Marino

Raewyn Kawana

Ritai, Ngatupara

Pamela Te Urumairangi Ritai

Ropitini, Vince

Janice Ann Ropitini

Scruton-Nepe Apatu, Analia

April Gaye Scruton

Simpson, Tayla

Robyn Ceclia Edwin

Simpson, Jorja

Robyn Ceclia Edwin

Stewart, Anne

Logan Stewart

Styles, Paige

April Gaye Scruton

Taamaru, Cheyne-Jackson (CJ)

Robyn Davey

Te Teira-Taylor, Te Ohorere

Jonathan Murray

Witehira, Shaye Leigh

Matau Matenga Baker

TARANAKI COMMUNITY GRANTS Manukorihi P훮 Reserve Trust

Te Atiawa M훮ori Rugby Club

Para Kore Marae Incorporated

Te Korowai o Ng훮ruahine Trust

HE ORANGA

Recipient

PARININIHI KI WAITOTARA TRUST - SCHOLARSHIPS & GRANTS

NATIONAL CERTIFICATE IN EDUCATION ACHIEVEMENT


Gemma Toa at PKW AGM, Owae Marae.


20 19 PARININIHI KI WAITOTARA

TRUST

FINANCIAL STATEMENTS for the year ended 30 June 2019

PERFORMANCE REPORT - 30 JUNE 2019 Auditor report

96

NON-FINANCIAL INFORMATION Entity information Statement of service performance

99 100

FINANCIAL INFORMATION Statement of financial performance

101

Statement of financial position

102

Statement of cash flows

103

Statement of accounting policies

104

Notes to the performance report

105

1 Analysis of revenue

105

2 Analysis of expenses

106

3 Analysis of assets and liabilities

107

4 Accumulated funds

108

5 Commitments and contingencies

108

6 Related party transactions

109

7 Events after the balance date

109


96

Independent Auditor’s Report Independent Auditor’s Report To the Beneficiaries of Parininihi ki Waitōtara Trust Report on the audit of the performance report

To the Beneficiaries of Parininihi ki Waitōtara Trust

Opinion

Report on the audit of the performance report In our opinion, the accompanying performance report of Parininihi ki Waitōtara Trust (the Trust) on 109: Opinionpages 399toto13:

We have audited the accompanying performance report which comprise:

Independent Auditor’s R

The statement of financial position as at 30

June i. Present fairly in all material respects the Trust’s In our opinion, the accompanying performance We have audited the2019; accompanying performance financial position as at 30 June 2019 report of Parininihi ki Waitōtara Trust (the Trust) on and itsreport which —comprise: The statements of financial performance and pages 3 to 13:financial performance and cash flows for the cash of flows for the year then — The statement financial position as atended; 30 year then ended on that date; June 2019; i. Present fairly in all material respects the Trust’s — Notes, including a summaryof ofParininihi significant To the Beneficiaries ki Waitōtara Trust Complyaswith PBE Simple financialii.position at 30 June 2019Format and its Reporting accounting policies and other explanatory — The statements of financial performance and Standard Accrual (Not For Profit); and financial performance and cash flows for the Report on the audit of the performance report cash flowsinformation; for the year and then ended; year then onreport that date; iii. ended Suitably the service performance — The statement of service performance and — Notes, including a summary of significant information required byReporting Public Benefit Entity ii. Comply with PBE Simple Format entity information on page 99. 3. Opinion accounting policies and other explanatory Reporting Standard Standard - Financial Accrual (Not For Profit); and 48 ('PBE FRS 48') information; and in the statement of service performance. In our opinion, the accompanying performance We have au iii. Suitably report the service performance reportperformance of Parininihi ki Waitōtara Trust (the Trust) on report whic — The statement of service and information required by Public Benefit Entity entity information onpages page 33.to 13: — The sta Financial Reporting Standard 48 ('PBE FRS 48') June 2 i. Present fairly in all material respects the Trust’s in the statement of service performance. financial position as at 30 June 2019 and its Basis for opinion — The sta financial performance and cash flows for the cash flo We conducted our audit in accordance with International Standards on Auditing Zealand) (NZ)’), and year(New then ended on(‘ISAs that date; the audit of information PBE FRS 48 requires to be included in the statement of service performance, in — Notes, Comply with3000 PBE(Revised) Simple Format Reporting accordance the International Standard on Assurance Engagements ii. (New Zealand) Basis forwith opinion accoun Standard Accrual (Not For Profit); and Assurance Engagements Other than Audits or Reviews of Historical Financial Information ('(ISAE (NZ) 3000'). informa We conducted our audit in the accordance with International Standards on Auditing Zealand) (‘ISAs (NZ)’), andfor our We believe that audit evidence we have obtained is sufficient and(New appropriate toreport provide basis iii. Suitably thea service performance — The sta the audit ofopinion. information PBE FRS 48 requires to be included in the statement of service performance, in information required by Public Benefit Entity entity i accordance with the International Standard on Assurance Engagements (New Zealand) 3000 (Revised) Reporting Standard 48 ('PBE FRS 48') are independent theAudits Trust in Professional EthicalFinancial Standard (Revised) Assurance We Engagements Other of than or accordance Reviews of with Historical Financialand Information ('(ISAE 1 (NZ) 3000').Code of in the statement of service performance. for audit Assurance Practitioners issued byisthe New Zealand Auditing and Assurance Standards We believeEthics that the evidence we have obtained sufficient and appropriate to provide a basis for our Board and the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (‘IESBA opinion. Code’), and we have fulfilled our other ethical responsibilities in accordance with these requirements and the We are independent of the Trust in accordance with Professional and Ethical Standard 1 (Revised) Code of IESBA Code. Ethics for Assurance Practitioners issued by the New Zealand Auditing and Assurance Standards Board and the Basis forresponsibilities opinion for Our responsibilities under ISAs (NZ) and ISAE (NZ)of3000 arefor further described in the auditor’s International Ethics Standards Board for Accountants’ Code Ethics Professional Accountants (‘IESBA the audit of the performance report section of our report. Code’), and we have fulfilled our other ethical responsibilities in accordance with these requirements and the We conducted our audit in accordance with International Standards on IESBA Code. Other than in our capacity as auditor we have no relationship with, or interests Trust. PBE FRS 48 requires to be included in the sta the auditin, of the information accordance the International Our responsibilities under ISAs (NZ) and ISAE (NZ) 3000 are further described in the auditor’swith responsibilities for Standard on Assurance Engagemen Assurance Engagements Other than Audits or Reviews of Historical F the audit of the performance report section of our report. We believe that the audit evidence we have obtained is sufficient and Other than in our capacity as auditor we have no relationship with, or interests in, the Trust. opinion.

We are independent of the Trust in accordance with Professional and Ethics for Assurance Practitioners issued by the New Zealand Auditing International Ethics Standards Board for Accountants’ Code of Ethics f Code’), and we have fulfilled our other ethical responsibilities in accord IESBA Code.

Our responsibilities under ISAs (NZ) and ISAE (NZ) 3000 are further de the audit of the performance report section of our report.

Other than in our capacity as auditor we have no relationship with, or i


Other information The Committee of Management, on behalf of the Trust, are responsible for the other information included in the entity’s Entity Information. Our opinion on the performance report does not cover any other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the performance report our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the performance report or our knowledge obtained in the audit or otherwise appears materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Other matter The performance report of Parininihi ki Waitōtara Trust, for the year ended 30 June 2018, was audited by another auditor who expressed an unmodified opinion on those statements on 20 September 2018.

Use of this independent auditor’s report This independent auditor’s report is made solely to the Beneficiaries as a body. Our audit work has been undertaken so that we might state to the Beneficiaries those matters we are required to state to them in the independent auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Beneficiaries as a body for our audit work, this independent auditor’s report, or any of the opinions we have formed.

Responsibilities of the Committee of Management for the financial statements The Committee of Management, on behalf of the Trust, are responsible for:

The preparation and fair presentation of the performance report in accordance with generally accepted accounting practice in New Zealand (being PBE Simple Format Reporting Standard - Accrual (Not For Profit));

Implementing necessary internal control to enable the preparation of a performance report that is fairly presented and free from material misstatement, whether due to fraud or error;

The preparation of a statement of service performance that complies with the requirements of PBE FRS 48; and

Assessing the ability to continue as a going concern. This includes disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless they either intend to liquidate or to cease operations, or have no realistic alternative but to do so.

PARININIHI KI WAITOTARA TRUST - FINANCIAL STATEMENTS

97


98

Auditor’s responsibilities for the audit of the performance report Our objective is:

To obtain reasonable assurance about whether the performance report as a whole is free from material misstatement, whether due to fraud or error;

Perform procedures to determine whether the service performance information required by PBE FRS 48 has been suitably reported in the statement of service performance; and

To issue an independent auditor’s report that includes our opinion.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs NZ will always detect a material misstatement when it exists. Misstatements can arise from fraud or error. They are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this performance report. A further description of our responsibilities for the audit of this performance report is located at the External Reporting Board (XRB) website at: http://www.xrb.govt.nz/standards-for-assurance-practitioners/auditors-responsibilities/audit-report-8/ This description forms part of our independent auditor’s report.

KPMG Tauranga 6 September 2019


Parininihi ki Waitotara Trust ENTITY INFORMATION FOR THE YEAR ENDED 30 JUNE 2019

Entity's Purpose or Mission: Parininihi ki Waitotara Trust (the Trust) works on behalf of the Parininihi ki Waitotara Incorporation Shareholders and the Taranaki Māori community, focusing its efforts on three priorities: developing the community; facilitating active participation; and leadership. Each year Parininihi ki Waitotara Trust will support the educational and cultural aspirations of Taranaki Māori by the following clauses: (i) In making grants or loans towards the cost of the construction, establishment, management, maintenance, repair or improvement of Māori meeting houses, halls, charges and church halls, villages, marae or cemeteries; (ii) In establishing, maintaining and equipping hostels for the purpose of providing either permanent or temporary accommodation; (iii) In making grants or loans towards the establishment of recreational centers for the common use of any Māori community and for such other uses as the Trustees see fit; (iv) For assisting in the establishment of schools, and in the equipping, managing and conducting of schools;

- in making grants of money, the equipment or material to schools or other educational or training institutions or

- by making grants to funds established or bodies formed for the promotion of the education of Māori or

- for assisting Māori to obtain training or practical experience necessary or desirable for any trade or occupation

(v) In providing scholarships, exhibitions, bursaries or other methods of enabling individuals to secure the benefits of education or training, or in making grants to education boards or other educational bodies for scholarships, exhibitions or bursaries, in providing books, clothing or other equipment for the holders of scholarships or other individuals or in making grants for any such purpose, or in making grants generally for the purpose of assisting the parents or guardians or children to provide for their education or training for any employment or occupation; (vi) In providing, maintaining, or contributing towards the cost of residential accommodation for children in relation to their education or training; (vii) In the promotion of schemes to encourage the practice of Māori arts and crafts, the study of Māori lore and history and the speaking of the Māori language; (viii) In supporting assisting maintaining or promoting such further or other projects or purposes for the benefit of the Māori people as the trustees may from time to time approve as an object suitable to be brought within the scope of the trusts hereby created.

Legal Name of Entity: Parininihi ki Waitotara Trust Type of Entity and Legal Basis (if any): Charitable Trust Registration Number: CC36303 Entity Structure: Governance: The Trustees of the Parininihi ki Waitotara Trust are the Committee of Management members of Parininihi ki Waitotara Incorporation, plus a representative elected by the shareholders at the annual general meeting. Main Sources of the Entity's Cash and Resources: The Parininihi ki Waitotara Incorporation makes an annual grant calculated on 10% of the dividend paid to shareholders. The Parininihi ki Waitotara Trust also draws interest from a $2.9m loan to Parininihi ki Waitotara Incorporation. Additional grant revenue is sourced from third parties. Main Methods Used by the Entity to Raise Funds: The Parininihi ki Waitotara Trust is not an active fund raiser. Entity's Reliance on Volunteers and Donated Goods or Services: The Parininihi ki Waitotara Trust is not reliant on volunteers or donated goods or services. Physical Address: 35 Leach Street New Plymouth, New Zealand Postal Address: PO Box 241, New Plymouth 4340, New Zealand Phone: +64 (06) 769 9373 Fax: +64 (06) 757 4206

Email: office@pkw.co.nz Web: www.pkw.co.nz

Facebook: www.facebook.com/ Parininihi-ki-Waitotara-Incorporation377456922465330/?ref=page_ internal

PARININIHI KI WAITOTARA TRUST - FINANCIAL STATEMENTS

99


100

STATEMENT OF SERVICE PERFORMANCE FOR THE YEAR ENDED 30 JUNE 2019

Description

Established in 1983 the purpose of the Parininihi ki Waitotara Trust as per the deed, is to support the education and cultural aspirations of Taranaki Māori. This is reinforced by the Trust’s mission of ‘Seeding Taranaki potential – building success’ and reflected by the Trust’s outcomes for this period: 1. Shareholders and beneficiaries cherish their relationship with Parininihi ki Waitotara; 2. Agri-business opportunities are promoted to the community; and 3. Parininihi ki Waitotara is recognised as a valued partner.

Description of Quantification of the Parininihi ki Waitotara Trust's Output

Output - Active Participation Distribute the Trust's grant programme to Taranaki Māori as part of building capacity and supporting cultural aspirations. Increasing participation by the number of: Education and tertiary recipients Sporting and cultural grant recipients Prior year cultural grant withdrawn Community grant recipients Total Grant Investment

The accompanying notes form part of these financial statements.

Actual Actual Numbers Budget Numbers This Year $'000 This Year $'000 Last Year

230 1 (1) 4 234

228 5 (5) 18 246

165 5 - 3 173

206 25 - 19 250

232 4 - 2 238

$'000

196 32 20 248


STATEMENT OF FINANCIAL PERFORMANCE FOR THE YEAR ENDED 30 JUNE 2019

Note Actual Budget This Year This Year $'000 $'000 Revenue Grants Interest, dividends and other investment revenue

1 258 1 156

Actual Last Year $'000

223 151

191 156

Total Revenue 414 374

347

Expenses Costs related to providing goods or services 2 121 Grants and donations made 246

121 248

124 250

Total Expenses 367 374

369

Surplus/(Deficit) for the Year 47

(22)

The accompanying notes form part of these financial statements.

-

PARININIHI KI WAITOTARA TRUST - FINANCIAL STATEMENTS

101


102

STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2019

Note Actual Budget This Year This Year $'000 $'000 Assets Current Assets Bank accounts and cash 3 77 108 Related party receivables 3 3,069 3,043 Debtors and accrued income 3 40 - Total Current Assets 3,186 3,151

Actual Last Year $'000

82 3,055 3,137

Non-Current Assets Property, plant and equipment Total Non-Current Assets

3 3

4 4

7 7

Total Assets

3,189

3,155

3,144

Current Liabilities Creditors and accrued expenses 3 Total Current Liabilities

18 18

8 8

20 20

Total Liabilities

18

8

20

Total Assets less Total Liabilities (Net Assets)

3,171

3,147

3,124

1,864 1,283 3,147

1,841 1,283 3,124

Liabilities

Accumulated Funds Accumulated surpluses 4 1,888 Reserves 1,283 Total Accumulated Funds 3,171

The accompanying notes form part of these financial statements.


STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2019

Actual Budget This Year This Year $'000 $'000 Cash Flows from Operating Activities Cash was received from: Grant's received 210 Interest Received 165 375 Cash was applied to: Payments to suppliers (42) Payments to employees (81) Payments to grant recipients (257) (380) Net Cash Flows from Operating Activities

Actual Last Year $'000

211 151 362 (29) (84) (275) (388)

(5)

(26)

35 156 191 (6) (106) (270) (382) (191)

Cash flows from Investing and Financing Activities Cash was received from: Receipts from Parininihi ki Waitotara Incorporation - -

- -

235 235

Cash was applied to: Payments to PKW Farms LP - -

- -

(67) (67)

Net Cash Flows from Investing and Financing Activities

-

-

168

Net Decrease in Cash Opening Cash Closing Cash

(5) 82 77

(26) 134 108

(23) 105 82

This is represented by: Bank Accounts and Cash

77 108

The accompanying notes form part of these financial statements.

82

PARININIHI KI WAITOTARA TRUST - FINANCIAL STATEMENTS

103


104

STATEMENT OF ACCOUNTING POLICIES FOR THE YEAR ENDED 30 JUNE 2019

Basis of Preparation

Bank Accounts and Cash

Parininihi ki Waitotara Trust has elected to apply PBE SFR-A (NFP) Public Benefit Entity Simple Format Reporting - Accrual (Not-For-Profit) on the basis that it does not have public accountability and has total annual expenses of equal to or less than $2,000,000. All transactions in the Performance Report are reported using the accrual basis of accounting. The Performance Report is prepared under the assumption that the entity will continue to operate in the foreseeable future.

Bank accounts and cash in the Statement of Cash Flows comprise cash balances and bank balances (including short term deposits) with maturities of 12 months or less.

Revenue

Changes in Accounting Policies

Related Party Receivables Related party receivables includes receivables which are stated at their estimated net realisable value. Loans are based on the balance of direct attributable transaction costs, and are included in current assets as they are repayable on demand.

Grant income is accounted for There have been no changes in depending on whether or not any accounting policies during the conditions are attached. Where no financial year (last year - nil). conditions are attached, the revenue is recognised on an accruals basis. Where conditions are attached, the revenue is recognised once the conditions are satisfied. Interest income is recognised on an accruals basis. Interest income is accounted for when cash is received. This is revenue from the loan to PKW Incorporation and from cash balances in the bank. Goods and Services Tax (GST) Parininihi ki Waitotara Trust is not registered for GST. Therefore amounts recorded in the Performance Report are inclusive of GST (if any). Income Tax Parininihi ki Waitotara Trust is wholly exempt from New Zealand income tax having fully complied with all statutory conditions for these exemptions.


NOTES TO THE PERFORMANCE REPORT FOR THE YEAR ENDED 30 JUNE 2019

NOTE 1: ANALYSIS OF REVENUE

Revenue Item Analysis Revenue from providing goods Grant Income - Parininihi ki Waitotara Incorporation or services Grant Income - third parties

Total

This Year Last Year $'000 $'000 173

156

85

35

258

191

This Year Last Year Revenue Item Analysis $'000 $'000 Interest, dividends and other Interest Income - Parininihi ki Waitotara Incorporation 153 154 investment revenue Interest income - bank Total

3

2

156

156

PARININIHI KI WAITOTARA TRUST - NOTES TO THE PERFORMANCE REPORT

105


106

NOTES TO THE PERFORMANCE REPORT FOR THE YEAR ENDED 30 JUNE 2019

NOTE 2: ANALYSIS OF EXPENSES

Expense Item Analysis Volunteer and employee related costs Salary and wages

Total

Expense Item Analysis Costs related to providing goods Trustee fees or services Consultancy Legal expenses

Total

Expense Item Analysis Other expenses Other admin expenses

Total

This Year Last Year $'000 $'000 73 98 73

98

This Year Last Year $'000 $'000 8 8 30 2 - 1 38

11

This Year Last Year $'000 $'000 10 12 10

12


NOTES TO THE PERFORMANCE REPORT FOR THE YEAR ENDED 30 JUNE 2019

NOTE 3: ANALYSIS OF ASSETS AND LIABILITIES

This Year Last Year $'000 $'000

Asset Item Bank accounts and cash

Analysis ANZ bank account TSB term deposit

1 76

12 70

Total

77

82

Asset Item Related party receivables

Analysis Parininihi ki Waitotara Incorporation advance

1,524

1,524

Parininihi ki Waitotara Incorporation loan

1,371

1,379

Asset Item Debtors and accrued income

Grant receivable Total

174 3,069

152 3,055

Analysis Grants receivable

40

-

Total

40 -

Asset Item Other non-current assets

Analysis Property, plant & equipment

3

7

Total

3

7

Liability Item Analysis Creditors and accrued expenses Trade and other payables 9 Grants payable 9

20

20

Total

18

PARININIHI KI WAITOTARA TRUST - NOTES TO THE PERFORMANCE REPORT

107


108

NOTES TO THE PERFORMANCE REPORT FOR THE YEAR ENDED 30 JUNE 2019

NOTE 4: ACCUMULATED FUNDS This Year Description Opening Balance Surplus Closing Balance

Last Year Description Opening Balance Deficit Closing Balance

Capital Contributed Accumulated by Owners or Surpluses or Members Deficits Reserves* Total $'000 $'000 $'000 $'000 - - -

1,841 47 1,888

1,283 - 1,283

3,124 47 3,171

Capital Contributed Accumulated by Owners or Surpluses or Members Deficits Reserves* Total $'000 $'000 $'000 $'000 - - -

1,863 (22) 1,841

1,283 - 1,283

3,146 (22) 3,124

* Reserves of $1.283m represents the initial and subsequent PKW Incorporation unclaimed dividends allocation to the PKW Trust.

NOTE 5: COMMITMENTS AND CONTINGENCIES

Commitments As at 30 June 2019 the Entity had no capital commitments (2018: Nil). Contingent Liabilities and Guarantees As at 30 June 2019 the Entity had no contingent liabilities or assets (2018: Nil).


NOTES TO THE PERFORMANCE REPORT FOR THE YEAR ENDED 30 JUNE 2019

NOTE 6: RELATED PARTY TRANSACTIONS Description of Related Party Relationship (a) Parent transactions During the year the Trust received funds from, and invested funds with, its parent entity Parininihi ki Waitotara Incorporation as follows: Interest Income Grant Income

This Year Last Year Value of Value of Transactions Transactions $'000 $'000

This Year Last Year Amount Amount Outstanding Outstanding $'000 $'000

153 154 173 156 326 310

The amounts outstanding with Parininihi ki Waitotara Incorporation at balance date were:

PARININIHI KI WAITOTARA TRUST - NOTES TO THE PERFORMANCE REPORT

109

Loan to Parininihi ki Waitotara Incorporation 8 235 1,371 1,379 Advance to Parininihi ki Waitotara Incorporation - - 1,524 1,524 Accounts receivable - - 174 152 8 235 3,069 3,055 Total accounts receivable relate to amounts receivable from Parininihi ki Waitotara Incorporation. Interest is receivable at the average group rate of 5.28% (2018: 5.15%). The balances are receivable on demand. (b) Key Management Trustees of Parininihi ki Waitotara Trust Hinerangi Edwards (Chair) Beverly Gibson David MacLeod Taaringaroa Nicholas Claire Nicholson Hinerangi Raumati-Tu'ua Dion Tuuta Darryn Ratana (Shareholder Representative) The above Trustees are on the Committee of Management for the Parent, Parininihi ki Waitotara Incorporation, except Darryn Ratana.

NOTE 7: EVENTS AFTER THE BALANCE DATE There were no events that have occurred after the balance date that would have a material impact on the Performance Report. (2018: Nil).


110

NOTES


NOTES PARININIHI KI WAITOTARA INCORPORATION - SHAREHOLDER NOTES

111


PARININIHI KI WAITOTARA INCORPORATION 35 Leach Street

New Plymouth | New Zealand

PO Box 241 | New Plymouth 4340

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Parininihi ki Waitotara Annual Report 2019  

2019 Annual Report for the Parininihi ki Waitotara Incorporation.

Parininihi ki Waitotara Annual Report 2019  

2019 Annual Report for the Parininihi ki Waitotara Incorporation.