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He Korona Whakataena

twenty sixteen - twenty seventeen

BDO WELLINGTON


Contents Our unlearning begins

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Our commitment to TĹŤhoetana

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Our capability and development

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3 4

8

Our responsibility for our TĹŤhoe futures

10

Our direction

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Financial Statements

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BDO WELLINGTON


BDO WELLINGTON


He tanata whakamoe tau, he Iwi whakamoe tau E po e te rā e rehu ki tua. Kotia te taitapu ki Hawaiiki kia ahatia koutou o te ara tā noho iti te manu pākau roha o Tiiwakawaka. E taku nui e taku rahi tēnā koutou. Mauri ora ki a koutou katoa nā pākeke mātua Nau mai haere mai e nā tamariki mokopuna E te iwi whakapiripiri mai, whakakotahi mai. Ko tēnei tā tātau hui whakamoe i te tau 2017 whakakite i nā hau mauiui korona whakataena o te tau. He hui whakaaukaha hoki i a tātau katoa ki na tutetute o te tau hou e ara mai ana. Ara te uiui, “Ki whea koe ki reira!”

Tuatoru: He whakatipu ranatira. “Mate atu he tētēkura, ara mai he tētēkura”. Kai a tātau kai nā whānau, hapū, taraipara te ūmananui ki te whakarite i nā mātāpono, i nā tohu i te āhua o te tau ranatira mō Tūhoe ki a Tūhoe.

E toru nā ūmananui a tātau i nā tau whā tekau e tū mai nei - e rua whakatipurana tērā.

Mā tātau tonu e ako, e kura, e tukituki e atawhai o tātau ranatira mō āpōpō.

Tuatahi: He Whakaora he Whakamāui i a tātau. Ka nui nā whara, nā mate, nā wherūtana kai a tātau e whakawaha ana, pākeke, tamariki, mokopuna. Ko ēnei noikore o nā tau 140 ka huri, he kohina māuiui patu wairua, hinenaro, nākau, tinana. Kai a tātau tonu te whakaorana mō tātau me a tātau tamariki mokopuna, kāre i wāhi kē atu kāre i tanata kē atu. Me pono tika tātau ki te kōrero i tō tatau āhua o i naia nei; “ka kore a mamae e kōrero ka kōhuru”.

He ao ātanoho tā tatau e hiahia ana, hei aha te ao hurihuri. He tanata ranatira kohi mārama e whāia ana e tātau, hei aha te hūneinei whakakeke. He ara iti, he haere tawhiti kai a tātau Tūhoe e kore a muri nei e hokia, me kakama tātau katoa.

Tuarua: He Whakapakari Tūhoetana. He tokomaha nā Tūhoe e noho motu wehe ana mai i o rātau hapū marae, e noho tawhiti mai ana i nā kaupapa a te iwi. Koia ano ka uaua te whakakotahi whakaaro, kōrero, tikana mahi na tahi ā whānau, ā hapū, ā marae, ā rohe. Ko to tātau kaha ko to tātau kotahitana. Ko te iwi ko ōna hapū e whakatūhoe ana. Me whaikaha tātau ki te whakaaraara huarahi whakawhitina e hiahia tahuri mai ai tētahi ki te whaiwāhi ki nā kaupapa ā hapū. Kōrerohia kia awe te weri he aha te hapū, te iwi.

Ki raro i o tātau rekereke ko te pono me te tika, te tūrana waewae o Te Mana Motuhake o Tūhoe. Tūhoetana is influenced by our whakapapa to Te Urewera, and is reflected in whatever is going on about us. Much like the changing seasons of Te Urewera, the Tūhoe worldview of progress is cyclical and marked by the wellness of our people, and of our nahere. How do we measure wellness within a financial year? We continue to carve out ways that fit our enduring values in the face of western ideals of success. We need our traditional wisdom to transform our relationship to each other, to our whānau and to Te Urewera, our homeland.

Heamana Tūhoe - Te Uru Taumatua 2017 2

TŪHOE - TE URU TAUMATUA » TWENTY SIXTEEN - TWENTY SEVENTEEN

BDO WELLINGTON


Our unlearning begins We have got to start UNLEARNING the now strongly held inbuilt DISTRUST of ourselves and each other. You know the kōrero, the one where we do not and cannot trust our own opinions, our own views and our own ability to KNOW what is the right thing to do. Unlearn it. Kill it. Push it out of our minds, our kāina, our whārua. This year we tried that by asking ourselves: • How Tūhoe are we today? • Are Tūhoe still good kaitiaki or are we giving up our obligations as just being too hard? • Can we still unify Tūhoe opinion in 2017? • Do we still know what leadership is or do we now prefer western experts? • Does ‘economic Tūhoetana?

development’

trump

• Do we still grow leaders from the marae? We asked these pātai and more in order to locate the starting point - to assess the distance of the unlearning needed. We need to know the true cost of colonisation, taking in the depth of brokenness that has long assaulted whānau, hapū and Tūhoe.

From this we learnt about the 900 Tūhoe mainly Tūhoe fathers in jail or similar circumstance, we see the impact that has on the some 14,000 Tūhoe children under ‘watch’ by the state, we witness the erosion and matching loss of love for the Tūhoe reo, we struggle to find education optimism and success, we wish for better quality homes and feel only worry about our inability to look after our pākeke. There is more that can be said, the true picture of brokenness is impressive in scale, in worry, and in despair. Together, let’s take full responsibility for the recovery. Let’s lead our capability and development. Let’s sharpen our commitment to Tūhoetana. We unlearn to relearn. We can fix this. We know how to.

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Our commitment to Tūhoetana Our commitment to Tūhoetana is the foundation for everything that we do, it is the know-how we need to build a wise future. As we assess the effects of colonisation and the influence it has had on our ways of living, practices and beliefs we start to form an understanding of the grueling road to recovery. We must find a way to reinvigorate our traditional Tūhoe customs. We must define the boundaries of our thinking to ensure the clarity and purity of Te Mana Motuhake o Tūhoe as our foundation. Throughout the year Tūhoe kura and kohana were brought together to begin discussion and debate on establishing a unified vision of Tūhoe education goals. Generally we failed to unite on this kaupapa, we continue to work directly with Huiarau Kura to design a Tūhoe Education Philosophy with a focus on Te Urewera as the classroom. Strategic relationships with Crown officials deepened with earned understanding. A three-tier approach to the Service Management Plan (SMP) was established: Ranatira ki te Ranatira forum; Tribal Chairs and Chief Executives Committee; and the technical and policy advice working tier. 4

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Worryingly, we worked with twenty three Tūhoe tamariki and ranatahi within the rohe identified as facing Child Youth and Family Services. Tautoko was provided to whānau in the form of reconnecting whakapapa and hapū links, navigating the complexities of social services, representing on behalf of whānau with CYFs, and completion of applications with the family court. While we are not directly involved in this mahi, we have through the SMP been designing our care system, and these whānau helped us gain real insight into whānau needs.

REGISTERED TŪHOE:

9340

93 years OLDEST YOUNGEST

9 months


THE SHORT STORY 2016 - 2017 MADE: USED:

$24.3m

$10.7m

AVAILABLE:

Investments, Subsidiaries, Operations

Annual Priorities, Operations, Tax/Depreciation, Governance Fees: Chair $54k, Trustees $18k each

$13.6m

Ko tētahi kaupapa nui i kōkirihia ko te mahi tahi i roto i te Taraipara ki te hāpai i nā hapū ki te whakapakari i tō tātau Tūhoetana. Kua mārō te haere o nā wānana ronoā, nā wānana a Te Pae Nekeneke ki te hāpai i nā pākeke ki te whakakīkī i nā whāruarua, tae atu ki nā kaupapa tautoko i nā pākeke mō te hauora me nā mahi āhuareka. I te haere nā kōrero a Te Komiti o Runa mō te ora o te reo o Tūhoe i te whārua o Rūātoki ka tae mai te kaupapa o Te Ahu o Te Reo ki te whārua. He tātari i te kaha o te reo kōrero i roto i nā whānau, nā kāina, nā marae, nā kura me nā wāhi e huihui ai te tanata. With decades of non-responsibility for Te Urewera, we began wary of the value of DOC systems, yet operational mahi in Te Urewera continued whilst awaiting the authority direction of Te Kawa o Te Urewera, enabling a fix of neglected Tūhoe responsibility for Te Urewera. We are finally at the beginning of a long road to recovery. DOC employees who traditionally worked in the areas of Animal Control, Animal Life, Weeds, Plant Life, and Assets in Te Urewera welcomed change.

Tribal Development, Infrastructure Projects, Reinvestment

Transferring their skills to Ōnukurani, they began to build an understanding of the connection between Tūhoe and Te Urewera, and to begin to personally measure the distance in their own lives. The process of drafting Te Kawa o Te Urewera meant no new concessions, now known as Friendship Agreements (or Arrangements), could be applied for until its completion. Current concessionaires expressed interest in how they could strengthen their relationship with Tūhoe and Te Urewera and their respective Friendship Agreements were extended to align to the timeframe of Te Kawa being launched. Tūhoe Medical Centres have now been in operation for three years. The total registered whānau is 1526, with services including prescription runs, flu vaccines, wāhine and tāne health screening, and weekly nurse led clinics introduced. Options to incorporate Ronoa māori into Tūhoe Medical Centres were explored.

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11 Automated External Defibrillators (AED) with 24/7 access, were installed across the whārua at Te Kōmiti ō Runa Tari; Tāwera Kura; Ōwhakatoro Marae; Te Arohanui Hall; Waimana Kaaku Tari; Tanatana Marae; Te Kura Mana Māori o Matahi; Tūai Fire Station; Ōputao Marae; Ūwhiārae Marae and Manawarū Tari.

HAVE ACCESS TO AN EMAIL ADDRESS:

4107

Mediation support was provided to five whānau to purchase homes, this included negotiating valuations with Housing New Zealand; providing guidance and support with banks, HomeStart applications, Kiwisaver access; sale and purchase agreements, and arranging inspection reports. Te Waimana Kaaku established various communication channels including the launch of its Tribal website and facebook group; the activation of MailChimp and Survey Monkey.

WHY THE BIG INVESTMENT IN INFRASTRUCTURE? Your Tūhoe Trust Fund is made up of 12% fixed assets, they as examples include Te Kura Whare, Te Kura Whenua, Te Tii and Matahi Forest. We will be continuing to support real infrastructure in our whārua, and in coming years further afield. These investments are part of our development to enable faster overall growth across the whārua and for hapū benefit. The current project at Te Tii is already injecting leadership in our most remote and rural rohe, Ruatāhuna. These projects allow capacity building opportunities to take hold of Tūhoe principles that remind us of our obligations and responsibilities, the things that all strong communities are built upon.

Tribal Development and Growth Budget Allocation 2014-2018 $12m

Te Tii - Ruatāhuna Waimana Fund

$2m

Ruatoki Fund

$2m

Te Urewera Capability

$3.850m

Tribal Infrastructure

$4.03m

Marae Replacement Fund Education Grants

$2m $610k $8m

Tribal Development Spatial Priorities Te Kura Whenua

$4.8m

ALLOCATION: 6

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$39.29m BDO WELLINGTON


Te Urewera Management 2016-2017 TU - BioTeam

Weeds

TU - General

Shared Cost TU - Waikaremoana

Plant Life Manuhiri

TU - Waimana Kaaku

Asset Maintenance TU - Ruatoki

Animal Life Animal Control

TU - Manawaru General 0

BDO WELLINGTON

200k

400k

600k

800k

1m

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Our capability and development New capability and development is tough. Sometimes we hit up against issues we don’t recognise and don’t know how to immediately resolve. Right then - we tend to doubt ourselves, rather than order the issues and brave a response based on tradition, memory and home life know how, we devalue this expertise and give up. The louder voice wins. Yet new ground continues to be broken as we prioritise and develop strategies to move forward. While difficult, unlearning and reforming has tested us, causing mayhem in our ideas of progress, priority and delivery. Do we continue here? Do we abandon that? Do we start anew with this? What stays - what goes? Deliver! Two major projects with Statistics NZ commenced. The first project focused on unlocking data and information on an outcome that will see no Tūhoe tamariki in state care. The second project focused on how other cultures were approaching language and culture rescue and how this information could be useful to Tūhoe. In light of Te Kawa o Te Urewera, Ōnukurani was restructured to align the workforce with future Te Kawa o Te Urewera direction. Independent certification was also gained under Maritime NZ for Tūhoe - Te Uru Taumatua to operate and manage our six boats at Lake Waikaremoana. Whairawa provided support to the Investment Committee along with improved reporting recommendations for the preservation program Te Penapena. The audit process for Te Kura Whare Living Building Challenge (LBC) continued with rigorous assessment with the certificate of

THE URGE TO RECONNECT WITH MY TĪPUNA, MY IWI AND MY WHENUA IS GETTING STRONGER AND STRONGER; UNTIL NOW I WAS UNSURE WHAT I HAD TO OFFER MY IWI.

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accreditation being received this year. The Living building challenge and its international standards are relevant as they echo the beliefs of Tūhoe about living in harmony with nature and your surroundings, being restorative and giving more than one takes. Our next challenge is how we use this standard across all of our homes and marae. An oral health service was investigated for the purpose of supporting the immediate dental needs of Tūhoe whānau. An agreement was reached with the New Zealand Defence Force to provide a short and sharp impact on neglected adult niho. Te Kura Whare also hosted a blood drive initiative with the National Blood Service. Manuhiri who held their kaupapa at your Te Kura Whare included: Te Puna Kaumātua; Fonterra; Whakatāne District Council; Asaleo Care NZ Ltd; Te Hira Land Trust; Worksafe; Veterinary Health Care Whakatāne/Ōpōtiki; Tāneatua Lions Club; Bay of Plenty Regional Council; Ōpōtiki Garden Club; BOP Dairy Industry; Waikato Māori Leadership Roopu; Te Puni Kōkiri; PF Olsen; Te Puna Ora o Mātaatua Charitable Trust; Te Kohana Reo National Trust - Te Tari a Rohe o Mātaatua; NZEI. Te Urewera kaimahi participated in Search and Rescue (SAR) exercises within Te Urewera developing further understanding of how to care for manuhiri who come into trouble in Te Urewera. Understanding how SAR conducts their operations was a useful exercise for specific skill and knowledge acquisition. Input and support from whānau and hapū for Te Tii and the Ruatāhuna Medical Centre was received and culminated in the concept design plans being endorsed, which triggered the tender process for construction work to begin. A vision for the rekindling of Tūhoe ahi kā on the shores of Waikaremoana was realised with the opening of Te Kura Whenua. Kua mārō ināianei a Te Komiti o Runa ki roto i nā whakahaere mō Te Whare Rata, ā, kāre e roa kua taka mai tēnei ki raro i a Te Komiti o Runa whakahaere ai.


Ngawini-Mei Meretuahiahi McLean Mika (Nāti Tāwhaki, Te Whānau Pani, Hāmua) started her internship with the Anamata team at Tūhoe - Te Uru Taumatua. Ngawini gained experience and supported the Wharepuri team in specific project work. Last year she graduated from Hukarere Māori Girls College, where she also took part in Kapa Haka and performing arts. Ngawini is now at University studying Māori Media.

BDO WELLINGTON

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Our responsibility for our Tūhoe futures Our responsibility for our future rests upon the choices we make today. We continue to look to our past while carefully selecting expertise in diverse areas of finance and investment, law, environmental conservation, social welfare, culture and heritage and leadership to help guide us into the future. The 2017 Tertiary Education Contributions were Tribal led with a total of $100,878 distributed to 108 Tūhoe tauira. Tūhoe are studying in diverse fields including Marine Studies, Defence Forces, Trade Training, Health, Aviation, Law, Sports, Arts and Teaching. The ages of applicants ranged between 15 – 68 and study throughout all of Aotearoa, and further afield. Tūhoe Tribal delegates attended the Venice Biennale of Architecture as guests of the New Zealand Institute of Architects, where a model of Te Kura Whare was exhibited to an international audience. This was an opportunity for Tūhoe to connect with and understand development issues of other global communities, and to bring these ideas back to the kitchen. 10

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The art exhibition Te Mauri o Te Wai by Tūhoe artist Kylie Tiuka (Nai Te Riu) displayed in Te Wharepuri. The work depicted the importance of Tūhoe waterways, symbolising the connection between the people and the water. At last we located our differences in values and beliefs between ourselves and DOC. The relationship was reviewed, hard calls were made, and trust and confidence tested. This highlighted the truth that real relationships are fought for, mistakes are tolerated albeit with frustration - but importantly new things are shared and learned. DOC remains committed to the journey of supporting Nai Tūhoe in restoring the vibrancy of Te Urewera. The Te Kawa o Te Urewera principles were remembered and reseeded. With GNS Science, we searched for dinosaur fossils in Te Urewera. This provided a creative opportunity for young Tūhoe to learn about geology, and explore their backyard to the boundaries of Maunataniwha.


Wallaby and goat sightings were reported in Te Urewera, with response personnel sent to investigate. A reroute along Waikaremoana Great Walk was also required to remove significant safety issues, caused by an unstable bluff face. In support of the Te Waimana Kaaku Taraipara we observed the opening of the Te Waimana Medical Centre. We celebrated our first ever TUT/ Tribal collaboration with the production of the Tūhoe Housing 40 year Vision. Tamariki, pākeke and kaumatua of Tūhoe Manawarū celebrated the occasion of unveiling their new Te Urewera signage, which sits on the original tribal boundary between Nāi Tūhoe and Nāti Whare. Mindful of the impending review of the 50 year Waikaremoana lakebed lease agreement in Te Urewera, with the Wairoa-Waikaremoana Trust Board and DOC, the Waikaremoana Taraipara alongside our Iwi tari, commenced discussions in the lead up to the renewal date.

TŪHOE EDUCATION CONTRIBUTIONS TOTAL DISTRIBUTION

$100,878

WHEN I HAVE ATTENDED HAPŪ HUI IN THE PAST – I HAVE OFTEN EXPLAINED LEGAL CRITERIA AND DEFINITIONS TO WHĀNAU PRESENT, SO THAT THEY ARE MORE AWARE OF THE INFORMATION IN FRONT OF THEM.

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WHY IS OUR TRUST FUND MOSTLY ‘LIQUID’? The larger part of the Tūhoe Trust Fund is in liquid, meaning made up of assets which are easily returned to cash. Your financial portfolio (52%, term deposits 3%, and bank balance 4%, totalling almost 60%) amounts to $206m. Settled in 2014, Tūhoe - Te Uru Taumatua is still a new office and progressing Blueprint objectives is still in a building period. Financially, the four Taraipara are strengthening year by year. They continue to take more control over increasingly complex financial transactions audit processes demonstrate this. The purpose of the Trust Fund is to earn enough to satisfy our Mātohatoha allocation (spending) model. The model describes how the surplus from the Trust Fund is to be shared, annually across these kaupapa: Tohana: Resources to care for personal need either hardship, emergency, or endeavour.

Whakahaere: Resources that fund Tūhoe - Te Uru Taumatua priorities and operations. Te Penapena: Preservation funds kept aside to manage future bumps and future value of the Tūhoe Trust Fund. Making sure we are keeping enough for the next Tūhoe generation leadership. Whakahirana: Growth for larger scale Tūhoe Te Uru Taumatua and Te Urewera priorities. Whakahiwana: Development priorities that are Tribal needed and therefore led with Tūhoe Te Uru Taumatua support where helpful. There is always alot to accomplish and there is a continuous flow of information to assist priorities. This is the key reason to hold liquid assets at this stage, so that resources can then be available at planned times to support kaupapa, letting us be financially agile to match the needs of your priorities and mahi.

Trust Fund

Financial Portfolio 52% Share & Fishing Quota 7% Fixed Assets 12% AR & Other 1% CNI Share 21% Bank 4% Term Deposits 3%

TRUST FUND: 12

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$348m


My name is Whiuwhiu Tutakangahau Rory Mitai. I am nine years old. I liked talking to the scientists and they explained what the rocks were. They showed us the tools that they used to get the fossils. They were really friendly and they thought it was cool to be in Te Urewera with us. When I leave school I want to be a geologist and study rocks and fossils.

BDO WELLINGTON

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Our direction Because old rules no longer apply, we must unlearn sometimes bad habits for our new confidence to flourish. We begin to free ourselves of old ideas and habits that are no longer relevant. Maintaining our focus on a better tomorrow, we examine and challenge ourselves daily to let go of baggage that hinder the progress of Te Mana Motuhake o Tūhoe. Te Taraipara o Waikaremoana and Te Toikura o Waikaremoana, agreed to set aside differences to establish a Ruapani Working Group, progressing the long running Ruapani claim for Waikaremoana whānui. Office holders were appointed from amongst both groups and responsibility for the mahi ahead is equally shared by the Taraipara and Te Toikura. 18 people gained employment with Tūhoe Te Uru Taumatua working within the Tūhoe rohe during the 2016 - 2017 financial year.

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Te Waimana culture and identity continued to flourish throughout the year with the framework for the Te Reo me nā Tikana - Ahurea Taketake completed; Te Reo resources and delivery methods trialed within wānana kaikarana and kaikōrero; and tikana and reo tutors identified. And importantly… Mou Mou Kai Café launched a new menu and continued its daily cafe operations, as well as catering for big and small events for local farmers, the Kaumātua Ball, and Sunshine on a Plate - Sunday Brunch.

I RETURN HOME OFTEN AND MAHI IN THE KITCHEN ON THE MARAE.


Hi my name is Riria Rangihau. I really liked going on the fossil trip and meeting lots of different people . I learned lots of different things like which kind of rocks to look for and how to identify fossils. To think that there might be fossils from sea creatures in our rivers is exciting.

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Financial Statements for the year ended 31 march 2017

BDO WELLINGTON

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Contents Independent Auditor’s Report.......................................................................................

20

Statement of Comprehensive Revenue and Expense.....................................................................................................................................................................

22

Statement of Changes in Equity................................................................................

23

Statement of Financial Position..................................................................................

24

25

Statement of Cash Flows............................................................................................................... Notes to the Financial Statements......................................................................

26

Trust Directory as at 31 march 2017

OBJECTIVE OF BUSINESS

Management of assets held in trust and the distribution of income from these assets for the long-term benefit of the Tūhoe Iwi as a Post Settlement Governance Entity.

TRUSTEES TRIBAL

ADDRESS

Tāmati Kruger

12 Tūhoe Street, Tāneatua

...........................................................................................................................................................................

Patrick McGarvey

......................................................................................................................................................

Rūātoki

Martin Rakuraku

..................................................................................................................................................

Waimana

Ryan Te Wara

...................................................................................................................................................................

Waimana

William Joseph Doherty

...........................................................................................

Rex Turiokahu Timoti White

......................................................................

Lance Winitana

......................................................................................................................

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Rūātoki

Ruatahuna Ruatahuna

Waikaremoana

TŪHOE - TE URU TAUMATUA » TWENTY SIXTEEN - TWENTY SEVENTEEN

AUDITORS BDO Wellington, 50 Customhouse Quay, Wellington 6011

BANKERS ASB Bank, Westpac Bank, BNZ Bank

SOLICITORS David McLay, Daveys Burton, Bell Gully

BDO WELLINGTON


BDO WELLINGTON


INDEPENDENT AUDITOR’S REPORT TO THE TRUSTEES OF TŪHOE TE URU TAUMATUA GROUP Opinion We have audited the financial statements of Tūhoe Te Uru Taumatua (“the Parent”) and the consolidated financial statements of the Parent and its subsidiaries (together, “the Group”), which comprise the Parent and consolidated statements of financial position as at 31 March 2017, and the Parent and consolidated statements of comprehensive revenue and expense, Parent and consolidated statements of changes in equity and Parent and consolidated cash flow statements for the year then ended, and notes to the Parent and consolidated financial statements, including a summary of significant accounting policies. In our opinion, the accompanying Parent and consolidated financial statements present fairly, in all material respects, the financial position of the Parent and the consolidated financial position of the Group as at 31 March 2017, and the Parent and consolidated financial performance and the Parent and consolidated cash flows for the year then ended in accordance with Public Benefit Entity Standards Reduced Disclosure Regime (“PBE Standards RDR”) issued by the New Zealand Accounting Standards Board. Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (New Zealand) (“ISAs (NZ)”). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Parent and Consolidated Financial Statements section of our report. We are independent of the Parent and 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 we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Other than in our capacity as auditor we have no relationship with, or interests in, the Parent or any of its subsidiaries. Other Information The Trustees are responsible for the other information. The other information obtained at the date of this auditor’s report is information contained in the annual report, but does not include the Parent and consolidated financial statements and our auditor’s report thereon. Our opinion on the Parent and consolidated financial statements does not cover the other information and we do not express any form of audit opinion or assurance conclusion thereon. In connection with our audit of the Parent and 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 Parent and consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed on the other information obtained prior to the date of this auditor’s report, 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. Trustees’ Responsibilities for the Parent and Consolidated Financial Statements The Trustee are responsible on behalf of the Parent and Group for the preparation and fair presentation of the Parent and consolidated financial statements in accordance with PBE Standards RDR, and for such internal control as the Trustees determine is necessary to enable the preparation of Parent and consolidated financial statements that are free from material misstatement, whether due to fraud or error. In preparing the Parent and consolidated financial statements, the Trustees are responsible on behalf of the Parent and Group for assessing the Parent and Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Trustees either intend to liquidate the Parent and Group or to cease operations, or have no realistic alternative but to do so.

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TŪHOE - TE URU TAUMATUA » TWENTY SIXTEEN - TWENTY SEVENTEEN

BDO WELLINGTON


Auditor’s Responsibilities for the Audit of the Parent and Consolidated Financial Statements Our objectives are to obtain reasonable assurance about whether the Parent and consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an 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 and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the decisions of users taken on the basis of these Parent and consolidated financial statements. As part of an audit in accordance with ISAs (NZ), we exercise professional judgement and maintain professional scepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the Parent and consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Parent and Group’s internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. • Conclude on the appropriateness of the use of the going concern basis of accounting by the Trustees and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Parent and Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the Parent and consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Parent and Group to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the Parent and consolidated financial statements, including the disclosures, and whether the Parent and consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation. • Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. • We communicate with the Trustees regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Who we Report to This report is made solely to the Parent’s Trustees, as a body. Our audit work has been undertaken so that we might state those matters which we are required to state to them in an 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 Parent and the Parent’s Trustees, as a body, for our audit work, for this report or for the opinions we have formed.

BDO Wellington Wellington, New Zealand 31 October 2017

BDO WELLINGTON

TWENTY SIXTEEN - TWENTY SEVENTEEN » HE KORONA WHAKATAENA

21


STATEMENT OF COMPREHENSIVE REVENUE AND EXPENSE

|

For the Year Ended 31 March 2017

Note

Revenue Operational Income Other Income Total Revenue

8 8.1 8.2

GROUP 2017 2016 $ 000's $ 000's

PARENT 2017 2016 $ 000's $ 000's

2,870 8,872 11,742

2,120 6,690 8,810

5,822 6,585 12,407

7,476 5,324 12,800

Expenses (by Function of Expenses) Direct Costs Indirect Costs Administration & Other Costs Total Expenses Net Operating Surplus/(Deficit)

6 6 6

5,154 1,024 4,266 10,444 1,298

4,055 842 3,327 8,223 587

3,727 728 10,647 15,102 (2,694)

2,853 539 6,556 9,948 2,852

Share of Profit & Loss of Associates: Share of equity accounted surplus and deficit Operating Surplus(Deficit) Other Revenue/(Losses) Tūhoe-Crown Treaty Settlement Gain/(Loss) on Revaluation of Financial Portfolio CNI Taxfree Distribution - Crown Allocation Portion Gain/(Loss) on revaluation of Investment Property Non-exchange gain on purchase of Matahi Forest Gain/(Loss) on revaluation of Matahi Forest Rights Impairment of Properties Surplus/(Deficit) for the year before income tax Tax Expenses/(Income) Surplus/(Deficit) for the year Other Comprehensive Revenue and Expense Gain/(Loss) on revaluation Other Intangibles Total Comprehensive Revenue and Expense

9

9,047 10,346

17,369 17,956

(2,694)

2,852

8.3 8.3 9 20 21 21 6

5,756 126 776 17,004 (521) 17,525

(897) 316 9,427 (295) 26,508 1,827 24,680

5,756 474 126 776 4,437 221 4,216

(897) 816 126 9,427 12,324 2,950 9,374

1,109 18,634

279 24,959

4,216

9,374

10

14

The accompanying notes form part of these financial statements

22

TŪHOE - TE URU TAUMATUA » TWENTY SIXTEEN - TWENTY SEVENTEEN

BDO WELLINGTON


STATEMENT OF CHANGES IN EQUITY

|

For the Year Ended 31 March 2017

GROUP 2017 2016 $ 000's $ 000's

PARENT 2017 2016 $ 000's $ 000's

Retained Surpluses Opening Balance

82,475

57,795

41,497

32,123

Total Comprehensive Revenue and Expense Total Recognised Revenues and Expenses for the period

18,634 18,634

24,959 24,959

4,216 4,216

9,374 9,374

14

(1,109)

(279)

-

-

13

(1,109) 100,000

(279) 82,475

45,713

41,497

13

242,783 242,783

242,783 242,783

224,026 224,026

224,026 224,026

14

932 1,109 2,041

653 279 932

-

-

11

344,824

326,190

269,740

265,524

Note

Less: Transfer Revaluation gains to Revaluation Reserve Intangible Assets Transfer to Fixed Capital Te Ohu Kai Moana Trust Settlement Closing Retained Surpluses Fixed Capital of Trust - Opening balance Transfers to Fixed Capital Closing Fixed Capital Revaluation Reserve: Opening Balance Transfer from Retained Surpluses - Intangible Assets Closing Revaluation Reserve Equity at Balance Date

The accompanying notes form part of these financial statements

BDO WELLINGTON

TWENTY SIXTEEN - TWENTY SEVENTEEN » HE KORONA WHAKATAENA

23


STATEMENT OF FINANCIAL POSITION

|

For the Year Ended 31 March 2017

Note

Trust Equity

GROUP 2017 2016 $ 000's $ 000's

PARENT 2017 2016 $ 000's $ 000's

344,824

326,190

269,740

265,524

13,482 10,363 1,599 5 72 988 26,507

10,716 19,323 1,250 8 110 286 31,692

2,327 39 1,537 5 13 926 4,848

1,746 9,038 662 8 52 217 11,723

27,146 65 15,335 2,519 10,738 182,304 10,054 73,714 321,877

20,763 110 14,226 2,393 9,963 171,622 10,054 68,700 297,831

19,144 65 1,989 10,738 182,304 53,425 267,666

19,080 110 1,863 9,963 171,622 53,425 256,062

348,384

329,523

272,514

267,785

1,771

1,682

984

607

1,771

1,682

984

607

1,790

1,654

1,790

1,654

3,561

3,336

2,774

2,261

344,824

326,190

269,740

265,524

Represented by: Assets Current Assets Cash and Cash Equivalents Term Deposits Receivables from non exchange transactions Inventories Other Current Assets Income Tax Non-Current Assets Property, Plant & Equipment Intangibles Other Intangibles - (Fishing Quota Shares & NZUs) Investment Property Matahi Forestry Rights Investments (Financial Portfolio) Investments (AFL Income Shares) Interest in CNI Iwi Holdings Trust - at cost Equity Accounted share in Associated Entity

15 16 18 10

19 19 14 20 21 17 13 9 9

Total Assets Less: Liabilities Current Liabilities Creditors and Accruals under exchange transactions

Non-Current Liabilities Deferred tax Liability

10

Total Liabilities Net Assets

Trustee

22

31 October 2017 Trustee 31 October 2017

The accompanying notes form part of these financial statements

24

TŪHOE - TE URU TAUMATUA » TWENTY SIXTEEN - TWENTY SEVENTEEN

BDO WELLINGTON


STATEMENT OF CASH FLOWS

|

For the Year Ended 31 March 2017

GROUP 2017 2016 $ 000's $ 000's

PARENT 2017 2016 $ 000's $ 000's

Receipts from operational and other income Dividend Income Payments to Staff and Suppliers Investment income received Donations Paid Income Tax (Paid) / refunded GST (paid)/recovered Net cash (used)/generated from operating activities

4,161 224 (8,672) 7,036 (975) 661 2,431

1,716 224 (6,994) 5,878 (307) 433 950

634 (6,105) 6,610 (8,000) 19 (6,842)

144 (5,164) 5,287 (4,207) 433 18 (3,488)

Cash flows from Investing Activities Distribution received - CNI Iwi Holdings Ltd Crown Settlement Purchase of Property Plant Equipment & Intangibles Investments made - Term Deposits and Managed Portfolio Purchase of Matahi forest Net cash (used)/generated from investing activities

4,033 (7,030) 4,034 1,037

6,352 (4,499) (9,686) (535) (8,368)

3,975 (625) 4,073 7,423

6,352 (2,827) (2,951) (535) 39

-

-

-

-

3,469 10,716 14,185

(7,418) 18,134 10,716

582 1,746 2,327

(3,448) 5,195 1,746

Note

Cash flows from Financing Activities Net cash generated from financing activities Net increase/(decrease) in cash and cash equivalents Opening Balance Cash and cash equivalents at balance date

BDO WELLINGTON

16

TWENTY SIXTEEN - TWENTY SEVENTEEN Âť HE KORONA WHAKATAENA

25


NOTES TO THE FINANCIAL STATEMENTS

|

For the Year Ended 31 March 2017

1 Reporting entity The Tūhoe Te Uru Taumatua ("TUT", "the Trust" or "Group") previously known as Tūhoe Establishment Trust is a common law trust established on 23 May 2009. In June 2013 Nai Tūhoe whānui voted in support of the Tūhoe Comprehensive Settlement. The Tūhoe Iwi vote resulted in the adoption of a new Tūhoe Te Uru Taumatua Trust Deed. The financial statements of Tūhoe Te Uru Taumatua comprise the Trust, its subsidiaries and associates. The Trust reports its separate operations under 'Parent'. TUT is involved in the management of assets held in trust and the distribution of income from these assets for the long-term benefit of the Tūhoe Iwi as a Post Settlement Governance Entity. The Trust's primary objective is to provide goods and services for the social benefit of Tūhoe and not for financial return to any equity holders. For this reason it is designated as a Public Benefit Entity ('PBE').

2 Settlement with the Crown and formation of TUT On 1 July 2009 the Tūhoe Te Uru Taumatua, the approved Post Settlement Governance Entity (PSGE) received the Tūhoe component of the Central North Island (CNI) Settlement. The landmark settlement consisted of accumulated historic rentals, carbon entitlements and future forestry rentals. On 30 June 2009 a Trust Deed and Shareholders Agreement was signed to establish the CNI Iwi Holdings Trust to hold the settlement assets on behalf of the CNI Forests Iwi Collective. Under the CNI Deed of Settlement (DOS) the Crown returned 176,000 ha of North Island forest lands as well as interests in Crown Forestry Licenses with an agreed value of $225.6 million. In addition, Accumulated rents with a value of $284 million, held by Crown Forests Rental Trust, became payable to CNI Iwi Holdings, and was subsequently distributed to CNI Iwi Collective members. The DOS also deals with further assets to be settled on CNI Iwi Holdings, such as New Zealand Carbon Units (NZU's) to be settled free of charge. The CNI Iwi Holdings Trust Deed records that the various Governance Groups do not acquire an ownership interest in any of the assets of CNI Iwi Holdings. TUT is recorded in this deed as the Governance entity representing the interests of Nai Tūhoe with a beneficial interest (right to income) in CNI Iwi Holdings for 35 years. During the initial period the Crown retains a 10% beneficial interest in CNI Iwi Holdings assets, the accumulated rents and current rents. The initial period is the period to 2014, during which time the Crown proportion is available to settle any claims outside of the DOS. At the termination of the initial period, Nai Tūhoe beneficial represent 26.3125% (Initial period - 23.68125%) the interest (right to income) in CNI Iwi Holding. In terms of the DOS there are restrictions on the disposal of the forestry assets during the initial period as well as during the 35 year terms of the forest leases. In June 2013 Tūhoe and the Crown signed the Te Urewera Deed of Settlement. The Deed of Settlement is the final settlement of all historical Treaty of Waitangi claims of Tūhoe resulting from acts or omissions by the Crown prior to 21 September 1992, and is made up of a package that includes: • agreed historical account, Crown acknowledgments and apology • redress over Te Urewera and other cultural redress • redress in relation to Mana Motuhake • financial and commercial redress. The Tūhoe Claims Settlement Bill was Passed into Law on 24 July 2014. In addition to the matters stated above, the settlement provides for the disestablishment of the Tūhoe Waikaremoana Maori Trust Board and Tūhoe Fisheries Charitable Trust and vesting of their assets and liabilities in Tūhoe Charitable Trust. The Tūhoe Charitable Trust was also recognised by Te Ohu Kai Moana

26

TŪHOE - TE URU TAUMATUA » TWENTY SIXTEEN - TWENTY SEVENTEEN

Trustee Limited as the Mandated Iwi Organisation in place of the Tūhoe Fisheries Charitable Trust; and Tūhoe Fish Quota Limited is the asset holding company of the Tūhoe Charitable Trust.

3 Basis of preparation (a) Statement of compliance The consolidated financial statements have been prepared in accordance with New Zealand Generally Accepted Accounting Practice (“NZ GAAP”). They comply with Public Benefit Entity International Public Sector Accounting Standards (“PBE IPSAS”) and other applicable Financial Reporting Standards, as appropriate for Tier 2 not-for-profit public benefit entities, for which all reduced disclosure regime exemptions have been adopted. The Group qualifies as a Tier 2 reporting entity as for the two most recent reporting periods it has had between $2m and $30m operating expenditure. These financial statements were authorised for issue by the Tūhoe Te Uru Taumatua Board on 31th October 2017. (b) Measurement basis The consolidated financial statements have been prepared on the historical cost basis except for the following material items in the statement of financial position, which are measured at fair value : • Financial Portfolio • Fish Quota Assets • Investment property • Investment classified as fair value through surplus or deficit (c) Functional and presentation currency The financial statements are presented in New Zealand dollars ($) which is the controlling entity’s functional and Group’s presentation currency, rounded to the nearest thousand dollars ($000's). There has been no change in the functional currency of the Group during the year.

4 Use of judgements and estimates The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from those estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. (a) Judgements Judgements made in applying accounting policies that have had the most significant effects on the amounts recognised in the consolidated financial statements include the following: • Whether there is control (or not) over an investee • Whether there is joint control (or not) over an investee • Whether there is significant influence (or not) over an investee (b) Assumptions and estimation uncertainties Assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment in the year ending 31 March 2017 include the following: • Key assumptions underlying determining the recoverable amounts for impairment testing • Likelihood and magnitude of outflows in determining recognition and measurement of provisions • Useful life, recoverable amount, depreciation/amortisation method and rate • Determination of fair values [refer to items in Note 3 above]

BDO WELLINGTON


NOTES TO THE FINANCIAL STATEMENTS

|

For the Year Ended 31 March 2017

5 Significant accounting policies The accounting policies set out below have been applied consistently to all periods presented in these financial statements and have been applied consistently by the Group.

Subsequent changes in a controlled entity that do not result in a loss of control are accounted for as transactions with controllers of the controlling entity in their capacity as controllers, within net assets/equity.

The significant accounting policies of the Group are detailed below: (a) Basis of consolidation (b) Subsidiaries and associates (c) Revenue (d) Employee benefits (e) Finance income and finance costs (f) Financial instruments (g) Impairment of non-derivative financial assets (h) Inventory (i) Property, plant and equipment (j) Intangible assets (k) Investment property (l) Impairment of non-financial assets (m) Leases (n) Provisions (o) Income Tax (p) Goods and Services Tax (q) Statement of Cash Flows

iii. Loss of control of a controlled entity On the loss of control, the Group derecognises the assets and liabilities of the controlled entity, any minority interest, and the other components of net assets/equity related to the controlled entity. Any surplus or deficit arising on the loss of control is recognised in surplus or deficit.

(a) Basis of consolidation i. Business combinations Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date on which control is transferred to the Group.

The consolidated financial statements include the Group’s share of the surplus or deficit and other comprehensive revenue and expense of its equity accounted associates and jointly-controlled-entities, after adjustments to align the accounting policies with those of the Group, from the date that significant influence or joint control commences until the date that significant influence or joint control ceases.

The Group controls an entity when it has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, the Group takes into consideration potential voting rights that are currently exercisable. The Group measures goodwill at the acquisition date as: The aggregate of: • The fair value of consideration transferred • The recognised amount of any minority interests in the acquiree, and • The fair value of any pre-existing equity interest in the acquiree. Less: The fair value of the net identifiable assets acquired and liabilities assumed. Any gain on bargain purchase gain is recognised immediately in surplus or deficit. The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognised in surplus or deficit. Transactions costs related to a business combination incurred by the Group, other than those associated with the issue of debt or equity securities, are expensed in surplus or deficit as incurred. Any contingent consideration payable is measured at fair value at the acquisition date. If the contingent consideration is classified as equity, then it is not subsequently remeasured and settlement is accounted for within net assets/equity. Otherwise, subsequent changes in the fair value of the contingent consideration are recognised in surplus or deficit. ii. Controlled entities Controlled entities are entities controlled by the Group, being where the Group has power to govern the financial and operating policies of another entity so as to benefit from that entity’s activities. The financial statements of the Group’s controlled entities are included in the consolidated financial statements from the date that control commences until the date that control ceases.

BDO WELLINGTON

If the Group retains any interest in the previously controlled entity, then such interest is measured at fair value at the date that control is lost. Subsequently, the retained interest is either accounted for as an equity-accounted associated or an available-for-sale financial asset depending on the level of influence retained. v. Associates Associates are those entities in which the Group has significant influence, but not control, over the financial and operating policies. Significant influence is presumed to exist when the Group holds between 20% and 50% of the voting power of another entity. Investments in associates for the Group are accounted for using the equity method and are recognised initially at cost, including directly attributable transaction costs. Investment in the Parent is caried at cost.

When the Group’s share of losses exceeds its interest in its equity accounted associates and jointly-controlled-entities, the carrying amount of the investment, including any longterm investments that form part thereof, is reduced to zero, and the recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the investee. vi. Joint ventures Joint ventures are those entities over whose activities the Group has joint control, established by a binding agreement and requiring unanimous consent for strategic financial and operating decisions. Joint ventures that are structured in a separate vehicle are classified jointly-controlled-entities and are accounted for using the equity method (as detailed above for associates) proportionate consolidation method whereby a Group’s share of each of the assets, liabilities, revenue and expenses of a jointly controlled entity is combined line by line with similar items in the Group’s financial statements. Joint ventures that are not structured in a separate vehicle are classified as either jointly-controlled-operations or jointly controlled assets. The consolidated financial statements include the Group’s share of assets, liabilities, expenses, and revenues from the jointly-controlled-operation or jointly controlled asset on a line-by-line basis. vii. Transactions eliminated on consolidation Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealised gains arising from transactions with equity accounted associates and jointly-controlled-entities are eliminated against the investment to the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

TWENTY SIXTEEN - TWENTY SEVENTEEN » HE KORONA WHAKATAENA

27


NOTES TO THE FINANCIAL STATEMENTS

|

For the Year Ended 31 March 2017

(b) Subsidiaries and Associates Subsidiaries:

Registered Charity

Operating Division

Ownership

Voting interest

Balance Date

Tūhoe Charitable Trust

CC45656

Distribution

TUT

100%

31 March

Tūhoe Fish Quota Limited

CC11440

Asset Holding

TCT

100%

31 March

Ruatoki Tribal Authority Charitable Company Ltd

CC52142

Community Development

TCT

100%

31 March

Waikaremoana Tribal Authority Charitable Company Ltd

CC52146

Community Development

TCT

100%

31 March

Te Waimana Kaaku Tribal Authority Charitable Company Ltd

CC52143

Community Development

TCT

100%

31 March

Tūhoe Manawaru Tribal Authority Charitable Company Ltd

CC52145

Community Development

TCT

100%

31 March

No

Investment

26.31%

12.50%

31 March

Associates: CNI Iwi Holdings Trust The Tūhoe Charitable Trust was incorporated on 31 July 2010, with the objects: a) the promotion of health & wellbeing of members of Ngai Tūhoe b) the maintenance, upkeep and administration of Marae and Hapu c) matters beneficial to Ngai Tūhoe Communities i.e. education, health, housing, environment sustainability. The principle activity of the Tūhoe Charitable Trust is the provision of funding for these objects. Tuhoe Fish Quota Limited holds the settlement quota, the income shares and all other assets as custodian for the benefit of the charitable purposes of the Shareholder, Tuhoe Charitable Trust who were vested all assets and liabilities of Tuhoe Fisheries Charitable Trust as per the Tuhoe Settlement Claim Act 2014. The four Tribal Companies were incorporated during NovMarch 2015 period. Tuhoe Charitable Trust as a Parent completed a Single Entity registration with Charities Services under the name of Tuhoe Tribal Authorities. As part of the terms and condition of the Single Entity registration, the Parent has a duty to file annual return that must account for the activities of each registered charity that forms part of the single entity; and the financial statements must be consolidated for all of the registered charities that form part of the single entity using the relevant standards prescribed by the Financial Reporting Act 2013. The first Annual Return was due in 2016. (c) Revenue Revenue is recognised when the amount of revenue can be measured reliably and it is probable that economic benefits will flow to the Group, and measured at the fair value of consideration received or receivable. The following specific recognition criteria in relation to the Group’s revenue streams must also be met before revenue is recognised. i. Revenue from exchange transactions Sale of goods Revenue from the sale of goods in the course of ordinary activities is measured at the fair value of the consideration received or receivable, net of returns, trade discounts and volume rebates. Revenue is recognised when the significant risks and rewards of ownership have been transferred to the customer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, there is no continuing management involvement with the goods, and the amount of revenue can be measured reliably. If it is probable that discounts will be granted and the amount can be measured reliably, then the discount is recognised as a reduction of revenue as the sales are recognised.

28

TŪHOE - TE URU TAUMATUA » TWENTY SIXTEEN - TWENTY SEVENTEEN

Annual Catch Entitlement (ACE) Sales are accounted for in the respective ACE rounds as they are received. ACE are receipted for other species in April and in October for wet fish. Rendering of services Services relate to Health Centre services as well as Te Urewera Management services provision Revenue from services rendered is recognised in surplus or deficit when the service is rendered. Amounts received in advance for services to be provided in future periods are recognised as a liability until such time as the service is provided. Forestry Rents - CNI Iwi Holdings Distribution Distributions from CNI Iwi Holdings comprise the Trust's share of forestry land rentals and is treated as revenue from operations and is recognised at the date of distribution. Rental income on investment property Rental income from investment property is recognised in surplus or deficit on a straight-line basis over the term of the lease. Lease incentives granted are recognised as an integral part of the total rental income, over the term of the lease. ii. Revenue from non-exchange transactions Non-exchange transactions are those where the Group receives an inflow of resources (i.e. cash and other tangible or intangible items) but provides no (or nominal) direct consideration in return. With the exception of services-in-kind, inflows of resources from non-exchange transactions are only recognised as assets where both: •

It is probable that the associated future economic benefit or service potential will flow to the entity, and

Fair value is reliably measurable.

Volunteer services received are not recognised as the fair value of the services are not able to be reliably measured. Liabilities are recognised in relation to inflows of resources from non-exchange transactions when there is a resulting present obligation as a result of the non-exchange transactions, where both: •

It is probable that an outflow of resources embodying future economic benefit or service potential will be required to settle the obligation, and

The amount of the obligation can be reliably estimated.

The following specific recognition criteria in relation to the Group’s non-exchange transaction revenue streams must also be met before revenue is recognised. As a part of the settlement the Trust was able to purchase Matahi Forest at a price well below its fair value, therefore the transaction includes a non-exchange component equal to the difference between fair value and the purchase price.

BDO WELLINGTON


NOTES TO THE FINANCIAL STATEMENTS

|

For the Year Ended 31 March 2017

Grants Grants are recognised as revenue when the conditions associated with the grants have been fulfilled.

The Group classifies financial assets into the following categories: fair value through surplus or deficit, held-tomaturity, loans and receivables, and available-for-sale.

Non-exchange revenue includes grants, donations, koha received and some contract for services .

The Group classifies financial liabilities as amortised cost, which includes accounts payable, funds in custody and accrual expenses.

Contract for services - Non-exchange revenue is recognised when received. (d) Employee benefits i. Short-term employee benefits Short-term employee benefit liabilities are recognised when the Group has a legal or constructive obligation to remunerate employees for services provided with 12 months of reporting date, and is measured on an undiscounted basis and expensed in the period in which employment services are provided. ii. Long-term employee benefits Long-term employee benefit obligations are recognised when the Group has a legal or constructive obligation to remunerate employees for services provided beyond 12 months of reporting date. iii. Termination benefits Termination benefits are recognised as an expense when the Group is committed demonstrably, without realistic possibility of withdrawal, to a formal detailed plan to either terminate employment before the normal retirement date, or to provide termination benefits as a result of an offer made to encourage voluntary redundancy. Termination benefits for voluntary redundancies are recognised as an expense if the Group has made an offer of voluntary redundancy, it is probable that the offer will be accepted, and the number of acceptances can be estimated reliably. If benefits are payable more than 12 months after the reporting date, then they are discounted to their present value. (e) Finance income and finance costs Finance income comprises interest income on financial assets, gains on the disposal of available-for-sale financial assets, fair value gains on financial assets at fair value through surplus or deficit, and gains on the remeasurement to fair value of any pre-existing interest in an acquiree. Interest income is recognised as it accrues in surplus or deficit, using the effective interest method. Finance costs comprise interest expense on financial liabilities, unwinding of the discount on provisions, losses on disposal of available-for-sale financial assets, fair value losses on financial assets at fair value through surplus or deficit, impairment losses recognised on financial assets, and fair value adjustments on concessionary loans issued. (f) Financial instruments The Group initially recognises financial instruments when the Group becomes a party to the contractual provisions of the instrument. The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in transferred financial assets that is created or retained by the Group is recognised as a separate asset or liability. The Group derecognises a financial liability when its contractual obligations are discharged, cancelled, or expire. The Group also derecognises financial assets and financial liabilities when there has been significant changes to the terms and/or the amount of contractual payments to be received/paid. Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

BDO WELLINGTON

Financial instruments are initially measured at fair value, plus for those financial instruments not subsequently measured at fair value through surplus or deficit, directly attributable transaction costs. Subsequent measurement is dependent on the classification of the financial instrument, and is specifically detailed in the accounting policies below. i. Fair value through surplus or deficit A financial instrument is classified as fair value through surplus or deficit if it is: •

Held-for-trading: Derivatives where hedge accounting is not applied

Designated at initial recognition: If the Group manages such investments and makes purchase and sale decisions based on their fair value in accordance with the Group’s documented risk management or investment strategy.

Financial instruments classified as fair value through surplus or deficit are subsequently measured at fair value with gains or losses being recognised in surplus or deficit. This includes investments (Financial Portfolio) ii. Held-to-maturity If the Group has the positive intent and ability to hold debt securities to maturity, then such financial assets are classified as held-to-maturity. Held-to-maturity financial assets are subsequently measured at amortised cost using the effective interest method, less any impairment losses. Held-to-maturity financial assets comprise term deposits. iii. Loans and receivables Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Loans and receivables are subsequently measured at amortised cost using the effective interest method, less any impairment losses. Loans and receivables comprise cash and cash equivalents, monetary recoverables and other current assets (excluding tax receivables and prepayments) Cash and cash equivalents represent highly liquid investments that are readily convertible into a known amount of cash with an insignificant risk of changes in value, with maturities of 3 months or less. iv. Available-for-sale financial assets Available-for-sale financial assets are non-derivative financial assets that are designated as available-for-sale or are not classified in any of the above categories of financial assets. Available-for-sale financial assets comprise shares in Aotearoa Fisheries Limited (AFL). AFL shares are bring carried at cost as there is no quoted market. The fair value of the AFL shares cannot be reliably measured due to no active market. Upon derecognition, the accumulated gain or loss within net assets/equity is reclassified to surplus or deficit. (g) Impairment of non-derivative financial assets A financial asset not subsequently measured at fair value through surplus or deficit is assessed at each reporting date to determine whether there is objective evidence that it is impaired. A financial asset is impaired if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset, and that the loss event(s) had an impact on the estimated future cash flows of that asset that can be estimated reliably.

TWENTY SIXTEEN - TWENTY SEVENTEEN » HE KORONA WHAKATAENA

29


NOTES TO THE FINANCIAL STATEMENTS

|

For the Year Ended 31 March 2017

Objective evidence that financial assets are impaired includes default or delinquency by a counterparty, restructuring of an amount due to the Group on terms that the Group would not consider otherwise, indications that a counterparty or issuer will enter bankruptcy, adverse changes in the payment status of borrowers or issuers in the Group, economic conditions that correlate with defaults or the disappearance of an active market for a security. In addition, for an equity security classified as an available-for-sale financial asset, a significant or prolonged decline in its fair value below its cost is objective evidence of impairment. i. Financial assets classified as held-to-maturity and loans and receivables The Group considers evidence of impairment for financial assets measured at amortised cost (loans and receivables and held-to-maturity) at both a specific asset and collective level. All individually significant assets are assessed for specific impairment. Those found not to be specifically impaired are then collectively assessed for any impairment that has been incurred but not yet identified. Assets that are not individually significant are collectively assessed for impairment by grouping together assets with similar risk characteristics. In assessing collective impairment the Group uses historical trends of the probability of default, the timing of recoveries and the amount of loss incurred, adjusted for management’s judgement as to whether current economic and credit conditions are such that the actual losses are likely to be greater or less than suggested by historical trends. An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the asset’s original effective interest rate. Losses are recognised in surplus or deficit and reflected in an allowance account against loans and receivables or held-to-maturity. Interest on the impaired asset continues to be recognised. When an event occurring after the impairment was recognised causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through surplus or deficit. ii. Financial assets classified as available-for-sale Impairment losses on available-for-sale financial assets are recognised by reclassifying the losses accumulated in the fair value reserve in net assets/equity to surplus or deficit. The cumulative loss that is reclassified from net assets/equity to surplus or deficit is the difference between the acquisition cost, net of any principal repayment and amortisation, and the current fair value, less any impairment loss recognised previously in surplus or deficit. Changes in impairment provisions attributable to application of the effective interest method are reflected as a component of interest income. If, in a subsequent period, the fair value of an impaired available-for-sale debt security increases and the increase can be related objectively to an event occurring after the impairment loss was recognised, then the impairment loss is reversed, with the amount of the reversal recognised in surplus or deficit. However, any subsequent recovery in the fair value of an impaired available-for-sale equity security is recognised in other comprehensive revenue and expense.

30

TŪHOE - TE URU TAUMATUA » TWENTY SIXTEEN - TWENTY SEVENTEEN

(h) Inventory Inventory is initially measured at cost, except items acquired through non-exchange transactions which are instead measured at fair value as their deemed cost at initial recognition. Inventories are subsequently measured at the lower of cost and net realisable value. The cost of inventories is based on the first-in first-out principle and includes expenditure incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their existing location and condition. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses. (i) Property, plant and equipment i. Recognition and measurement Items of property plant and equipment are initially measured at cost, except those acquired through non-exchange transactions which are instead measured at fair value as their deemed cost at initial recognition. Heritage assets with no future economic benefit or service potential other than their heritage value are not recognised in the statement of financial position. Items of property, plant and equipment are subsequently measured either under the: • Cost model: Cost (or fair value for items acquired through non-exchange transactions) less accumulated depreciation and impairment. • Revaluation model: fair value, less accumulated depreciation and accumulated impairment losses recognised after the date of the most recent revaluation. Valuations are performed with sufficient frequency to ensure that the fair value of a revalued asset does not differ materially from its carrying amount. Gains and losses on revaluation are recognised in other comprehensive revenue and expense and presented in the revaluation surplus reserve within net assets/equity. Gains or losses relating to individual items are offset against those from other items in the same class of property, plant and equipment, however gains or losses between classes of property, plant and equipment are not offset. Any revaluation losses in excess of credit balance of the revaluation surplus for that class of property, plant and equipment are recognised in surplus or deficit as an impairment. All of the Group’s items of property plant and equipment are subsequently measured in accordance with the cost model. Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the following: • The cost of materials and direct labour • Costs directly attributable to bringing the assets to a working condition for their intended use • When the Group has an obligation to remove the asset or restore the site, an estimate of the costs of dismantling and removing the items and restoring the site on which they are located, and • Capitalised borrowing costs. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment. When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment. Any gain or loss on disposal of an item of property, plant and equipment (calculated as the difference between the net proceeds from disposal and the carrying amount of the item) is recognised in surplus or deficit. Upon disposal of revalued items of property, plant and equipment, any associated gain or losses on revaluation to that item are transferred from the revaluation surplus to accumulated surplus.

BDO WELLINGTON


NOTES TO THE FINANCIAL STATEMENTS

|

For the Year Ended 31 March 2017

ii. Reclassification to investment property When the use of a property changes from owner-occupied to investment property, the property is remeasured to fair value and reclassified as investment property. Any gain or loss arising on remeasurement is recognised in surplus or deficit. iii. Subsequent expenditure Subsequent expenditure is capitalised only when it is probable that the future economic benefits associated with the expenditure will flow to the Group. Ongoing repairs and maintenance is expensed as incurred. iv. Heritage Assets Financial Reporting standards in New Zealand recognise that some assets have a heritage element because of their cultural, environmental or historical significance. The standards recognise that the value of such assets in cultural, environmental, educational and historical terms is unlikely to be fully reflected in a financial value based purely on a market price, that legal or statutory obligations may impose prohibitions or restrictions on disposal or sale and that they are often irreplaceable. TUT recognises two of its assets as having the characteristics of Heritage assets: iv.a) Te Urewera An important element of the Deed of Settlement signed with the Crown in July 2014 relates to joint control over Te Urewera National Park. The Te Urewera Act 2014 notes that for Tuhoe, Te Urewera is their place of origin and return and their homeland. The Act contains restrictions on the ability to alienate, mortgage, charge or otherwise dispose of the land. The Act constitutes the Te Urewera Board to manage Te Urewera. For the first three years,four members of the Board are appointed by Tuhoe and four by the Crown. In terms of the Act, major decisions must be unanimous and others by concensus. Tuhoe considers that the Te Urewera land is a Heritage asset due to its nature and characteristics. Further, the value of the land cannot be reliably measured due to its historical and cultural value. iv.b) Lake Waikaremoana The Lake Waikaremoana Act 1971 vested ownership of Lake Waikaremoana in Tuhoe Waikaremoana Maori Trust Board and Wairoa Waikaremoana Maori Trust Board as tenants in common. In accordance with the terms of the Te Urewera Tuhoe Claims Settlement Bill, from the settlement date all assets and liabilities of the Tuhoe Waikaremoana Maori Trust Board have been vested in the Tuhoe Charitable Trust. In the past, The value of Lake has been determined by calculating the present value of expected future cash inflows. Expected future cash inflows are for the period of the lease agreements that are in place for use of the Lake bed. As far as the Trust is concerned the above method is a way of calculating the accounting value of the Lake bed but does not reflect the cultural, social and economic benefit of the lake to the Tūhoe iwi. In consideration of the Lake's cultural and social value to Tūhoe, the Trust has decided not to use a sensitive accounting value of the Lake that does not represent the real value of the asset. The Trust recognises that there is no method to determine a Fair Value or a Depreciated Replacement Cost (DRC) of this asset. Finally, the Trust has recognised that the Lake is : - a unique asset that has iconic status - historic and irreplaceable; and - an asset that is sacred to Tūhoe community. The Trust has decided not to value the Lake for the purpose of Financial Reporting and acknowledges that the Waikaremoana Lake as Tūhoe's Heritage asset whose value cannot be reliably determined.

BDO WELLINGTON

v. Depreciation For plant and equipment, depreciation is based on the cost of an asset less its residual value, and for buildings is based on the revalued amount less its residual value. Significant components of individual assets that have a useful life that is different from the remainder of those assets, those components are depreciated separately. Depreciation is recognised in surplus or deficit over the estimated useful lives of each component of an item of property, plant and equipment. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term. Land is not depreciated. Assets under construction are not subject to depreciation. The diminishing value depreciation rates are: • Art & Archives 10% to 100% • Buildings 3% to 12% • Plant and equipment 12% to 80.4% • Motor vehicles 36% • Fixtures and fittings 9.6% to 80.4% • Computer equipment 48% to 60% Depreciation methods, useful lives, and residual values are reviewed at reporting date and adjusted if appropriate. Depreciation and amortisation rates are unchanged from 2015. (j) Intangible assets i. Recognition and measurement Intangible assets are initially measured at cost, except for: • Intangible assets acquired through non-exchange transactions (measured at fair value), and • Goodwill (measured in accordance with business combination accounting – refer Note 5(a)(i)). All of the Group’s intangible assets are subsequently measured as per the fair market price, except for the following items which are not amortised and instead tested for impairment: • Goodwill • Intangible assets with indefinite useful lives, or not yet available for use. The Group has no intangible assets with indefinite useful lives. Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed intangible assets includes the following: • The cost of materials and direct labour • Costs directly attributable to bringing the assets to a working condition for their intended use, and • Capitalised borrowing costs. ii. Subsequent expenditure Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognised in surplus or deficit as incurred. iv. Amortisation Amortisation is recognised in surplus or deficit over the estimated useful lives of each amortisable intangible asset. The diminishing value amortisation rates are: • Software 50% to 60% (2016: 50% to 60%) Amortisation methods,useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

TWENTY SIXTEEN - TWENTY SEVENTEEN » HE KORONA WHAKATAENA

31


NOTES TO THE FINANCIAL STATEMENTS

|

For the Year Ended 31 March 2017

(k) Quota Shares Quota shares are recorded initially at cost. Settlement quota shares are recorded at a value determined by the settlement documentation. All quota shares are subsequently revalued to fair value. Any gains on revaluation are recognised in Other Comprehensive Revenue & Expenses. Fair value is determined as the latest valuation less any impairment cost. Valuations are undertaken on a regular basis to ensure the carrying amount does not differ materially from the fair value of the shares. Impairment losses are recognised whenever the carrying amount of an asset exceeds its recoverable amount. Quota shares are tested for impairment whenever there is an indication of impairment on an individual basis or at a cashgenerating unit level. (l) Investment property Investment property is property held either to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of goods or services or for administrative purposes. i. Recognition and measurement Investment property is initially measured at cost, except those acquired through non-exchange transactions which are instead measured at fair value as their deemed cost at initial recognition. Cost includes expenditure that is directly attributable to the acquisition of the investment property. The cost of self-constructed investment property includes the cost of materials and direct labour, any other costs directly attributable to bringing the investment property to a working condition for their intended use and capitalised borrowing costs. Investment properties are subsequently measured at fair value. Any gain or loss on disposal of an investment property (calculated as the difference between the net proceeds from disposal and the carrying amount of the item) is recognised in surplus or deficit. ii. Reclassifications When an investment property that was previously classified as property, plant and equipment is sold, any related amount included in the revaluation reserve is transferred to retained earnings. When the use of an investment property changes to owner occupied, such that it results in a reclassification to property, plant and equipment, the property’s fair value at the date of reclassification becomes its cost for subsequent accounting. (m) Biological assets Biological assets including forestry rights are initially measured at cost except those acquired through nonexchange transaction which are instead measure at fair value as deemed cost at initial recognition. Biological assets are subsequently measured at fair value less cost of disposal. Any gain or loss on disposal of Biological asset is recognised in surplus or deficit. (n) Impairment of non-financial assets The carrying amounts of the Group’s non-financial assets, other than biological assets, investment property, and inventories, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. Goodwill, indefinite life intangible assets, and intangible assets not yet available for use are tested annually for impairment. An impairment loss is recognised if the carrying amount of an asset or its related cash-generating unit (CGU) exceeds its estimated recoverable amount. The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows (for cashgenerating assets) or future remaining service potential (for

32

TŪHOE - TE URU TAUMATUA » TWENTY SIXTEEN - TWENTY SEVENTEEN

non-cash-generating assets) are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs. CGUs to which goodwill has been allocated are aggregated so that the level at which impairment testing is performed reflects the lowest level at which goodwill is monitored for internal reporting purposes. Goodwill acquired in a business combination is allocated to groups of CGUs that are expected to benefit from the synergies of the combination. Impairment losses are recognised in surplus or deficit. Impairment losses recognised in respect of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to the CGU (group of CGUs), and then to reduce the carrying amounts of the other assets in the CGU (group of CGUs) on a pro rata basis. An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. (o) Leases i. Classification and treatment Leases in terms of which the Group assumes substantially all the risks and rewards of ownership are classified as finance leases. Finance leases Upon initial recognition the leased asset is measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset. Operating leases Leases that are not finance leases are classified as operating leases. Operating leases are not recognised in the Group’s statement of financial position. Payments made under operating leases are recognised in surplus or deficit on a straight-line basis over the term of the lease. Lease incentives received are recognised as an integral part of the total lease expense, over the term of the lease. ii. Determining whether an arrangement contains a lease At the inception of an arrangement the Group determines whether such an arrangement is or contains a lease. This will be the case if the following two criteria are met: • The fulfilment of the arrangement is dependent on the use of a specific assets or assets, and • The arrangement contains a right to use the asset(s). At inception or on reassessment of the arrangement, the Group separates payments and other consideration required by such an arrangement into those for the lease and those for other elements on the basis of their relative fair values. If the Group concludes for a finance lease that it is impracticable to separate the payments reliably, then an asset and a liability are recognised at an amount equal to fair value of the underlying asset. Subsequently the liability is reduced as payments are made and an imputed finance cost on the liability is recognised using the Group’s incremental borrowing rate.

BDO WELLINGTON


NOTES TO THE FINANCIAL STATEMENTS

|

For the Year Ended 31 March 2017

(p) Provisions A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as a finance cost within surplus or deficit. (q) Income Tax TUT is a Maori authority for income tax purposes. The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance date. Management periodically evaluates positions taken in tax returns where applicable tax regulations are subject to interpretation and establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities. Deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability in the parent's statement of financial position differs from its tax base, except for differences arising on: - The initial recognition of goodwill - The initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction affects neither accounting or taxable profit, and - Investments in subsidiaries and jointly controlled entities where the Group is able to control the timing of the reversal of the difference and it is probable that the difference will not reverse in the foreseeable future. Recognition of deferred tax assets is restricted to those instances where it is probable that taxable profit will be available against which the difference can be utilised. The amount of the asset or liability is determined using tax rates that have been enacted or substantively enacted by the reporting date and are expected to apply when the deferred tax liabilities/ (assets) are settled/ (recovered). Deferred tax is not brought to account In respect of the subsidiaries as all subsidiaries are registered charities and not liable for taxation or in respect of the equity accounted associate as there is no difference between the carrying amount and tax base. (r) Goods and Services Tax TUT is registered for GST and amounts in these financial statements are stated exclusive of GST with the exception of Receivables and Payables which are inclusive of GST. The activities of TUT on behalf of its members mean that some form of apportionment is required for the deduction of GST inputs. The basis of apportionment has been agreed with the IRD. The apportionment effect is disclosed separately in the Statement of Compresive Revenue and Expenses. (s) Statement of Cash Flows Operating activities include amounts received from investment income and other income sources and payments to employees and suppliers to manage the day-to-day running of TUT. Investing activities are those related to the purchase and disposal of investments and property, plant and equipment. Financing activities comprise loans and borrowings and distributions to members of TUT.

BDO WELLINGTON

TWENTY SIXTEEN - TWENTY SEVENTEEN Âť HE KORONA WHAKATAENA

33


NOTES TO THE FINANCIAL STATEMENTS

|

For the Year Ended 31 March 2017

6 Expenses include

Note

Direct Costs: Governance Costs Employee Benefit expense (Management & Direct) Group Project Direct Costs Anamata Ōnukurani Iwi Whairawa Other Direct Costs - Cost of sales Indirect Costs: Resources & maintenance Communication Unit costs Telecommunications Utilities Other Indirect Costs Administration & Other Costs include: Personel Expenses Financial Portfolio Management Fees Depreciation & Amortisation GST Apportionment Insurance Donation Fees paid to Auditors: For Audit services For Taxation services Professional Fees Grants Paid Other Administration Costs Tribal Capacity (Other Costs)

19

7

Total Kiwisaver Employer contribution included within the Direct wages and Personnel expenses

Impairment of Properties 22 Tūhoe Street Ruatahuna Store

7 Donations In March 2017 Tūhoe Te Uru Taumatua made donations of $8,000,000 (LY $4,000,000) in income to the Tūhoe Charitable Trust. The Tūhoe Charitable Trust as at 31 March has applied $975,000 (LY $100,000) for marae funding purposes.

34

TŪHOE - TE URU TAUMATUA » TWENTY SIXTEEN - TWENTY SEVENTEEN

Note

GROUP 2017 2016 $ 000's $ 000's

PARENT 2017 2016 $ 000's $ 000's

426 3,076

495 2,669

211 2,002

208 1,740

24 1,198 136 210 84 5,154

70 556 85 117 63 4,055

24 1,148 64 210 68 3,727

70 627 41 117 48 2,853

469 251 78 76 151 1,024

331 238 69 55 149 842

282 242 53 63 88 728

142 223 50 44 79 539

1,066 847 692 114 104 975

780 894 696 106 86 307

843 847 604 114 86 8,000

497 894 651 106 67 4,207

87 13 135 176 56 4,266

66 17 213 102 62 3,327

40 13 54 30 15 10,647

30 17 53 34 6,556

89

83

64

51

-

295 295

-

-

GROUP 2017 2016 $ 000's $ 000's

975

307

PARENT 2017 2016 $ 000's $ 000's

8,000

4,207

BDO WELLINGTON


NOTES TO THE FINANCIAL STATEMENTS

|

For the Year Ended 31 March 2017

8 Revenue 8.1 Income from Operations (exchange revenue) ACE Trading Receipts from business Forestry rentals - Distribution from CNI Iwi Holdings Service provision Lease & Rental income 8.2 Other Income Non-exchange revenue Grant Received Koha Received Sundry Income Exchange revenue Interest Income Investment Income Dividend Earned

Note

9

17

GROUP 2017 2016 $ 000's $ 000's

PARENT 2017 2016 $ 000's $ 000's

774 1,398 368 329 2,870

799 797 205 320 2,120

1,378 4,315 100 30 5,822

712 6,710 51 3 7,476

1,500 8 5

502 29 3

3 -

2 -

714 6,295 350 8,872

1,183 4,702 271 6,690

288 6,295 6,585

620 4,702 5,324

(a) Grants are recognised as revenue when the conditions associated with the grants have been fulfilled. (b) Dividend earned from Aotearoa Fisheries Limited Shares (8,754). Maori Authority credits attached to AFL's dividend $61,182 (LY $47,427) have been claimed for refund from the IRD and taken up as an account receivable.

8.3 Other gains/(losses) (a) Tūhoe and the Crown signed a Deed of Settlement on 4 June 2013. The Tūhoe Deed of Settlement is the final settlement of all historical Treaty of Waitangi claims of Tūhoe resulting from acts or omissions by the Crown prior to 21 September 1992, and is made up of a package that includes: • agreed historical account, Crown acknowledgments and apology • redress over Te Urewera and other cultural redress • redress in relation to Mana Motuhake • financial and commercial redress. The Tuhoe Claims Settlement Bill was passed in the House, at Parliament on 24th July 2014. The Act has disestablished - Tuhoe Waikaremoana Maori Trust Board - Tuhoe Fisheries Charitable Trust The Act also vested all of their assets and liabilities in Tūhoe Charitable Trust. The Tūhoe Charitable Trust was also recognised by Te Ohu Kai Moana Trustee Limited as the Mandated Iwi Organisation in place of the Tūhoe Fisheries Charitable Trust; and Tūhoe Fish Quota Limited is the asset holding company of the Tūhoe Charitable Trust. Tūhoe received the cash settlement amount in advance during September 2013.

BDO WELLINGTON

TWENTY SIXTEEN - TWENTY SEVENTEEN » HE KORONA WHAKATAENA

35


NOTES TO THE FINANCIAL STATEMENTS

|

For the Year Ended 31 March 2017

Note

Fair value of assets vested: Tūhoe Waikaremoana Maori Trust Board Tūhoe Fisheries Charitable Trust Tūhoe Fish Quota Limited

13 13 13

GROUP 2017 2016 $ 000's $ 000's

-

-

PARENT 2017 2016 $ 000's $ 000's

-

-

The following adjustments were made in determining the value of the Crown Settlement: As explained in note 5 (i), the Lake Waikaremoana asset, previously included at fair value in the financial statements of Tūhoe Waikaremoana Maori Trust, is regarded as a heritage asset whose fair value cannot be reliably measured. For this reason, its value in the financial statements of the Tūhoe Waikaremoana Maori Trust has been eliminated.

Note

GROUP 2017 2016 $ 000's $ 000's

PARENT 2017 2016 $ 000's $ 000's

(b) Fair value gains/(losses) on Managed Portfolio - unrealised AMP Capital First NZ ANZ Investments NZAM

Started Started Started Started

May 13 Mar 14 Dec 15 Dec 15 17

2,560 2,590 1,590 (984) 5,756

(304) (99) 413 (907) (897)

2,560 2,590 1,590 (984) 5,756

(304) (99) 413 (907) (897)

9 Accounting for Associates, Partnerships and Joint Ventures The following entities meet the definition of an associate and have been equity accounted in the Group financial statements of TUT: CNI Iwi Holdings Trust (Beneficial interest 26.3125% [LY 26.3125%])

Note

CNI Iwi Holdings Trust: Investment at cost Prior year equity accounted adjustments (net) Less: Distribution received (Net of Maori Tax Credits) Less: Tax Free Distribution received (Crown Allocation Portion) Add/Less: Increase in opening equity adjustment from Audit Add: Share of surplus after tax Add: Prior year adjustment for timing difference on settlement of Crown agreed portion and NZU's Net Equity accounted share of surplus or deficit Equity accounted share in CNI Iwi Holdings Trust

GROUP 2017 2016 $ 000's $ 000's

53,425 15,275 68,700 3,560 474 9,072

53,425 4,258 57,683 5,536 816 6,904 6,998

(25)

3,467

9,047 73,714

17,369 68,700

Crown agreed portion and NZU's: In the financial statements of CNI IHT, NZ Carbon Credit units (NZU's) are valued at balance date at $17.30 per unit (LY:$11.07 per unit).

36

TŪHOE - TE URU TAUMATUA » TWENTY SIXTEEN - TWENTY SEVENTEEN

BDO WELLINGTON


NOTES TO THE FINANCIAL STATEMENTS

10 Income Tax

|

For the Year Ended 31 March 2017

Note

GROUP 2017 2016 $ 000's $ 000's

PARENT 2017 2016 $ 000's $ 000's

Tax Expense/(Income) (i) Current tax expense/(income) Recognised in the Income Statement Surplus before Tax Taxable Income

17,004 17,004

26,508 26,508

4,437 4,437

12,324 12,198

Prima Facie Taxation at 17.5% Tax on the Expenditure not deductible for tax purposes Non taxable Income Tax on Non taxable Other Income FIF - non claimable Tax portion Under/(over) provision - prior year Temporary difference Non taxable surplus from Charitable Entities Imputation credit and foreign tax credit unitilised Tax on Taxable Income Current Tax Expense/(Income)

2,976 590 (3,011) (1,165) 118 30 (58) (399) (521) (521)

4,639 667 (3,740) 175 126 (16) 2 (26) 1,827 1,827

776 590 (894) 118 30 (399) 221 221

2,157 667 14 126 (16) 2 2,950 2,950

(ii) Split between Tax Expense/(Income) Original and reversal of temporary differences

(657) 136

175 1,652

85 136

1,298 1,652

Income Tax Payable/(Refundable) Opening Balance Current income tax expense Maori tax credit PIE and Income tax paid to IRD Balance at 31 March

(286) (657) (65) 18 (988)

(838) 175 (57) 433 (286)

(217) 85 (755) (39) (926)

(773) 1,298 (1,174) 433 (217)

Non taxable income includes: Share of equity accounted profits not received as distributions and CNI Manawhenua Settlement Income TĹŤhoe Charitable Trust is a registered charity and its net surplus is not taxable. Because not all expenses are incurred in deriving taxable income, they are subject to apportionment based on an apportionment model. The taxable income above is after application of the apportionment model and is subject to confirmation by Inland Revenue when tax returns are assessed. Taxes payable at balance sheet date includes PIE tax withheld by the managers of the investment portfolio. These taxes (2017:519,572 and 2016:295,540) are paid to the IRD in April.

Deferred Tax (Parent and Group) Deferred tax liability/(asset) Balance 1 April 2015 Recognised in surplus or deficit - 2016 Balance 31 March 2016 Recognised in surplus or deficit - 2017 Balance 31 March 2017

BDO WELLINGTON

Prepaid expenses

Matahi Forest

Total

2 2 4 4

1,650 1,650 136 1,786

2 1,652 1,654 136 1,790

TWENTY SIXTEEN - TWENTY SEVENTEEN Âť HE KORONA WHAKATAENA

37


NOTES TO THE FINANCIAL STATEMENTS

|

11 Equity

For the Year Ended 31 March 2017

Note

Total Equity

Retained Earnings

Fixed Capital

Revaluation Reserve

326,190 18,634 -

82,475 18,634 (1,109) -

242,783

932

-

1,109 -

344,824

100,000

242,783

2,041

301,231 24,959 -

57,795 24,959 (279) -

242,783

653

-

279 -

326,190

82,475

242,783

932

265,524 4,216 269,740

41,497 4,216

224,026 224,026

-

256,149 9,374 265,524

32,123 9,374

224,026 224,026

-

Equity is as detailed in the Statement of Changes in Equity: Group 2017 Balance at 1 April 2016 Total Recognised Revenue Transfer to Revaluation Reserve Transfer to Fixed Capital Transfers to Tūhoe Charitable Trust Balance at 31 March 2017

14

Group 2016 Balance at 1 April 2015 Total Recognised Revenue Transfer to Revaluation Reserve Transfer to Fixed Capital Transfers to Tūhoe Charitable Trust Balance at 31 March 2016

14

Parent 2017 Balance at 1 April 2016 Total Recognised Revenue Transfer to Fixed Capital Transfers to Tūhoe Charitable Trust Balance at 31 March 2017

45,713

Parent 2016 Balance at 1 April 2015 Total Recognised Revenue Transfer to Fixed Capital Transfers to Tūhoe Charitable Trust Balance at 31 March 2016

41,497

This amount termed 'fixed capital' has been set aside as the capital received through Settlement, a transfer has been made from Retained Earnings to Fixed Capital of the Trust in the 2010, 2014 and 2015 financial years. The amount transferred into fixed capital is determined as follows:

Year

Beneficial interest in Forest Land settled Accumulated Rents distributed in terms of DOS Less: Portion of Accumulated rents derived after 1 July 2009 Tūhoe Financial Redress (Comprehensive Settlement)

2010 2010

53,425 67,253

2010

(2,692)

2014

106,040 224,026

2015

18,757 242,783

Parent Te Ohu Kai Moana Trust Settlement Group

38

TŪHOE - TE URU TAUMATUA » TWENTY SIXTEEN - TWENTY SEVENTEEN

BDO WELLINGTON


NOTES TO THE FINANCIAL STATEMENTS

12 Crown Settlement - 2015 Tūhoe Waikaremoana Maori Trust Tūhoe Fisheries Charitable Trust Tūhoe Fish Quota Limited Central North Island Iwi Holdings Ltd

|

For the Year Ended 31 March 2017

Cash and Investment Deposits Property 3,583 1,405 4,988

1,060 1,610 2,670

TOKM Assets

Land

Fish Quota

Others

Total

18,757 18,757

8 8

4,028 4,028

(23) 18 100 95

4,629 18 24,289 1,610 30,545

The following adjustments were made in determining the value of the Crown Settlement: a) As explained in note 5, the Lake Waikaremoana asset, previously included at fair value in the financial statements of Tūhoe Waikaremoana Maori Trust, is regarded as a heritage asset whose fair value cannot be reliably measured. For this reason, its value in the financial statements of the Tūhoe Waikaremoana Maori Trust has been eliminated. Restatement of crown settlement - 2016 During the 2017 year it was relalised that 764 hectares of land recognised as part of Central North Island Iwi Holdings Limited was actually received by Tuhoe on settlement. Therefore the above investment property balances have been corrected for this.

13 Te Ohu Kai Moana Trust Settlement

Note

Fishing Quota Shares AFL Income Share (8754 Shares)

GROUP 2017 2016 $ 000's $ 000's

8,703 10,054 18,757

PARENT 2017 2016 $ 000's $ 000's

8,703 10,054 18,757

-

-

AFL Income shares are based on the valuation completed by Taylor Duignan Barry Limited, Corporate Finance Specialist during September 2008. The amounts above relate to the amount received on settlement as per Note 12, the Fishing Quota Shares are revalued annually, refer to current valuation in Note 14. 14 Intangible Assets - (Fishing Quota Shares & NZUs) Intangible Assets (Group) TOKM AFL/TOKM ex Settlement Antons Quota Fishing Quota Shares Shares

CRA Quota Shares

Paua Quota Shares

NZ Units

Total

2017 Opening balance Additions during the period Disposal during the period Revaluation Gain/(Loss) Balance at 31 March 2017

9,257 743 9,999

451 2 452

2,590 352 2,942

1,907 1,907

22 12 35

14,226 1,109 15,335

2016 Opening balance Additions during the period Disposal during the period Revaluation Gain/(Loss) Balance at 31 March 2016

9,114 143 9,257

451 (0) 451

2,463 127 2,590

1,907 1,907

13 9 22

13,948 279 14,226

During September 2010, Tūhoe Fish Quota Limited received a one off allocation of 1967 New Zealand Units (NZU's). A further 39 units were received in August 2013, from te Ohu Kai Moana Maori Fisheries Trust relative to the coastline settlement. The NZU's are recognised in the Financial Statements at a fair value (2016:$22k). Quota is valued annually by independent valuation (fair valued less costs to sell). Quota was valued by Quota Management System Limited, an independent broker. The valuation was based on historical and current FishServe data, market intelligence and advice from professional industry valuers. Adjustments were made for current knowledge of market values on certain species. The valuation report was completed on 2nd May 2017, on the market value of the fishing quota as at 31st March 2017.

BDO WELLINGTON

TWENTY SIXTEEN - TWENTY SEVENTEEN » HE KORONA WHAKATAENA

39


NOTES TO THE FINANCIAL STATEMENTS

|

For the Year Ended 31 March 2017

15 Cash and Cash Equivalents

2017 Interest Rates

2017 $ 000's

2016 $ 000's

Parent ASB Current Account - TUT ASB Fast Saver - TUT Cash & Paypal account ASB - Te Urewera Board held in Trust

1.00% 1.95% 0.00% 1.00%

1,907 416 5 2,327

522 1,074 149 1,746

Group ASB Current Account ASB Fast Saver BNZ Current Account BNZ Fast Saver

1.00% 1.95% 0.25% 1.00%

806 10,349 11,156 13,482

1,762 6,754 224 231 8,970 10,716

2017 Interest Rates

2017 $ 000's

2016 $ 000's

3.20%

39 39

9,038 9,038

3.00%-4.00% 3.20%-4.00%

7,024 3,300 10,324 10,363

5,147 3,838 1,300 10,285 19,323

Total for Group

16 Term Deposits Parent ASB Term Deposit - TUT Tūhoe Charitable Trust ASB Term Deposit - TCT BNZ Term Deposit - TCT ASB Term Deposit - TFQL Total for Group

17 Investments (Financial Portfolio)

AMP $ 000's

FNZ $ 000's

PARENT & GROUP 2017 ANZ NZAM $ 000's $ 000's

50,934 -

51,461 -

54,528 -

Note

Opening portfolio balance Add : New Investment Less: Funds Withdrawn

2016 TOTAL $ 000's

TOTAL $ 000's

14,699 -

171,622 -

169,606 -

Income received from share of PIE realised

8.2

2,402

1,370

1,937

586

6,295

4,702

Gains/(losses) from changes in unit price-unrealised

8.3 b

2,560

2,590

1,590

(984)

5,756

(897)

(289) (93) 55,515

(148) (391) 54,881

(266) (34) 57,754

(144) (3) 14,153

(847) (521) 182,304

(894) (895) 171,622

Management Fees paid Tax Deducted

Funds are invested under the terms of the Trust’s Statement of Investment Policies and Objectives (SIPO) as formulated by the Investment Committee and approved by the TUT Board. The investment portfolio was previously managed by AXA Global Funds, whose business was acquired by the AMP Group and the funds are now under management by AMP Capital. A second investment portfolio is being implemented and managed by First New Zealand Capital. This is a passively managed strategy with investment primarily in market indices. During 2015-16, the Investment Committee recommended diversification strategy. As a result, some funds have been transferred to ANZ Investment and NZAM (passive fund). All Managed funds are represented by units an as per the terms of the SIPO. Investments are selected to give a spread to minimise risk while giving adequate returns. The fair value of shares are measured using directly observable market inputs and are not based on quoted prices.

40

TŪHOE - TE URU TAUMATUA » TWENTY SIXTEEN - TWENTY SEVENTEEN

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NOTES TO THE FINANCIAL STATEMENTS

|

For the Year Ended 31 March 2017

GROUP 2017 2106 $ 000's $ 000's

18 Other Current Assets Tax Account Receivables Pre-Paid expenses Accrued Income

20 52 72

32 79 110

PARENT 2017 2016 $ 000's $ 000's

12 1 13

24 28 52

19 Property, Plant and Equipment and Intangibles a.i) Property, Plant & Equipment (Group) $ 000's At Cost: Opening balance Additions during the period Disposal during the period Balance at 31 March 2016

Land

Buildings

Fixtures & Fittings

Motor Plant & Computer Vehicles Equipment Equipment

Art & Archive

Total

538 3,058 (295) 3,301

15,154 1,540 (76) 16,618

389 24 0 413

184 162 0 346

577 24 0 601

297 55 0 352

603 0 0 603

17,741 4,863 (371) 22,233

Additions during the period Disposal during the period Impairment Balance at 31 March 2017 Accumulated Depreciation: Opening balance Depreciation charge for the period Depreciation recovered on disposal Balance at 31 March 2016

391 0 0 3,692

6,332 0 0 22,950

32 0 0 445

156 0 0 502

97 0 0 697

22 0 0 374

7,030 0 0 29,263

0 0 0 0

307 304 0 611

96 49 0 144

97 56 0 153

125 86 0 210

121 71 0 192

Depreciation charge for the period Depreciation recovered on disposal Balance at 31 March 2017 Net book value 31 March 2017

0 0 0 3,692

328 0 939 22,011

45 0 189 256

68 0 221 281

87 0 297 400

65 0 256 118

0 0 0 603 0 94 64 0 158 0 56 0 214 389

839 629 0 1,468 648 0 2,116 27,146

The land at Ruatahuna received via consolidation has been leased out to Housing New Zealand Corporation and community members who has their houses on the land. Generally these lease agreements are long term agreements with review clause. The Building includes work-in-progress on a building in Te Tii (2016:Waikaremoana). The payment made towards the work as of the balance date was $1,053,342 (2016:1,490,121) a.ii) Property, Plant & Equipment (Parent) $ 000's At Cost: Opening balance Additions during the period Disposal during the period Balance at 31 March 2016 Additions during the period Disposal during the period Balance at 31 March 2017 Accumulated Depreciation: Opening balance Depreciation charge for the period Depreciation recovered on disposal Balance at 31 March 2016 Depreciation charge for the period Depreciation recovered on disposal Balance at 31 March 2017 Net book value 31 March 2017

BDO WELLINGTON

Land

Buildings

Fixtures & Fittings

Motor Plant & Computer Vehicles Equipment Equipment

Art & Archive

Total

530 2,758 3,288

15,154 50 (76) 15,128

380 9 389

184 36 220

526 17.669 544

292 31 323

603 603

17,669 2,902 (76) 20,493

391 3,679

15,127

17 406

125 345

87 631

5 328

603

624 21,117

-

307 304 611

95 47 142

97 33 130

116 72 188

120 63 183

94 64 158

829 584 1,413

3,679

305 916 14,211

41 183 222

35 165 180

73 262 369

50 233 95

56 214 389

560 1,973 19,144

TWENTY SIXTEEN - TWENTY SEVENTEEN Âť HE KORONA WHAKATAENA

41


NOTES TO THE FINANCIAL STATEMENTS

|

For the Year Ended 31 March 2017

b.i) Intangibles - Computer Software (Group) $ 000's At Cost: Opening balance Additions during the period Balance at 31 March 2016 Additions during the period Balance at 31 March 2017

241 7 249 249

Accumulated Amortisation: Opening balance Charge for the period Balance 31 March 2016

72 67 139

Charge for the period Balance 31 March 2016 Net book value 31 March 2017

44 183 65

b.ii) Intangibles - Computer Software (Parent)

$ 000's

At Cost: Opening balance Additions during the period Balance 31 March 2016

241 7 249

Additions during the period Balance at 31 March 2017

249

Accumulated Amortisation: Opening balance Charge for the period Balance 31 March 2016

72 67 139

Charge for the period Balance 31 March 2017 Net book value 31 March 2017

44 183 65

20 Investment Property Available for Sale Assets:

Group Papakua Property $ 000's

Papatoetoe Property $ 000's

Total $ 000's

2017 Opening balance Revaluation Gain/(Loss) Balance at 31 March 2017

530 530

1,863 126 1,989

2,393 126 2,519

2016 Opening balance Revaluation Gain/(Loss) Balance at 31 March 2016

340 190 530

1,737 126 1,863

2,077 316 2,393

Investment property is stated at fair value and is not depreciated. The Papakura property was valued by Property Valuations Limited of Auckland, Registered Valuers at 11 April 2016. The Kaingaroa property was valued by Telfer Young of Rotorua, Registered Valuers at 31 March 2017.

42

TĹŞHOE - TE URU TAUMATUA Âť TWENTY SIXTEEN - TWENTY SEVENTEEN

BDO WELLINGTON


NOTES TO THE FINANCIAL STATEMENTS

|

For the Year Ended 31 March 2017

21 Biological Assets Matahi Forestry Rights $ 000's

Available for Sale Assets:

Parent Total $ 000's

Group Total $ 000's

2017 Opening balance Additions during the period Increase due to assets acquired through a non-exchange transaction Revaluation Gain/(Loss) Balance at 31 March 2017

9,963 776 10,738

9,963 776 10,738

9,963 776 10,738

2016 Opening balance Additions during the period Increase due to assets acquired through a non-exchange transaction Revaluation Gain/(Loss) Balance at 31 March 2015

535 9,427 9,963

535 9,427 9,963

535 9,427 9,963

The Matahi Forest was purchased during the year. The Forestry rights have been valued by PF Olsen Limited from Rotorua at 30 June 2016.

22 Creditors and Accruals Accounts Payable PAYE, Kiwisaver & Student Loan deductions GST Payable HR Liabilities Funds in Custody Te Urewera Board Kainaroa Timberland Operations 8 Te Maara-a-Te-Atua Marae funds and Grants Te Hui Ahurei a Tūhoe Rental Income received in advance Accrued Expenses

Note

17

GROUP 2017 2016 $ 000's $ 000's

PARENT 2017 2016 $ 000's $ 000's

589 112 89 217

734 84 120 146

374 61 126 187

216 59 10 117

187 81 14 121 140 221 1,771

149 26 80 14 125 140 63 1,682

187 49 984

149 26 29 607

The funds in custody are amounts held in Trust on behalf of the respective entities or a specific purpose.

BDO WELLINGTON

TWENTY SIXTEEN - TWENTY SEVENTEEN » HE KORONA WHAKATAENA

43


NOTES TO THE FINANCIAL STATEMENTS

|

For the Year Ended 31 March 2017

23 Restatement of Prior Year Comparatives note: During the 2017 year it was realised that 764 hectares of land recognised as part of Central North Island Iwi Holdings Limited was actually received by Tūhoe on settlement. Therefore the comparative opening retained earnings has been adjusted to show this: Group

Accumulated Revenue and Expense Balance reported 31 March 2015 Effect of recognition of Kainaroa Forest as Tūhoe rather than CNI property Restated balance 31 March 2015

300,474 757 301,231

Balance reported 31 March 2016 Effect of recognition of Kainaroa Forest as Tūhoe rather than CNI property Restated balance 31 March 2016

325,307 883 326,190

Equity Investment accounted Property investment in CNI 340 58,662 1,737 (979) 2,077 57,683 530 1,863 2,393

69,679 (979) 68,700

Parent Balance reported 31 March 2015 Effect of recognition of Kainaroa Forest as Tūhoe rather than CNI property Restated balance 31 March 2015

254,412 1,737 256,149

1,737 1,737

-

Balance reported 31 March 2016 Effect of recognition of Kainaroa Forest as Tūhoe rather than CNI property Restated balance 31 March 2016

263,661 1,863 265,524

1,863 1,863

-

The Kainaroa property was valued by Telfer Young of Rotorua, Registered Valuers at 31 March 2017.

24 Related Parties Transactions with related parties: Receipts CNI Iwi Holdings Ltd - Distribution of Forestry Land rents Management fees from Tūhoe Charitable Trust Lease from Subsidiries Payments Te Urewera Board - Shared Costs Waikaremoana Tribal Authority Charitable Company Ltd Funds in Custody - Te Urewera Board Donation to Tūhoe Charitable Trust

Note

8.1, 9

GROUP 2017 2016 $ 000's $ 000's

PARENT 2017 2016 $ 000's $ 000's

-

-

4,788 18 18

6352 -

-

-

68 149 8,000

51 72 149 4,000

369 24 30 713

418 38 9 638

162 24 12 415

144 38 9 459

23 5 2 8

23 5 2 4

7 5 2 4

7 5 2 4

Related parties include: Trustees and Investment Committee Members of the Trust Directors of CNI Iwi Holdings Ltd appointed by TUT Management team Transactions with Key Management Personnel: Governance Payment Investment Committee Representation Fees Management team (Salaries) No amounts were due and unpaid at balance date. Number of Key Management Personnel (FTE's): Governance Investment Committee Directors in Associates Management team

The Governance Payments are set fees per annum for the Parent. The Group includes set periodic payments and meeting fees. Investment Committee and Directors payments are based on number meeting they attend.

44

TŪHOE - TE URU TAUMATUA » TWENTY SIXTEEN - TWENTY SEVENTEEN

BDO WELLINGTON


NOTES TO THE FINANCIAL STATEMENTS

|

For the Year Ended 31 March 2017

25 Financial Instruments (Financial Risk Management) The Tūhoe Te Uru Taumatua Statement of Investment Policy and Objectives (SIPO) provides parties involved in the investment management of the Trust Fund with a working document that identifies the investment objectives, strategy, constraints and performance measurement criteria for TUT. The Trust Fund comprises two broad portfolios of assets; the Financial Portfolio; and the Closely-Held Asset Portfolio. The Trust Fund is defined in the Tūhoe Trust Deed as “all property that is from time to time held by the Trustees on the trusts of this Deed.” Bank accounts, short term deposits, accounts receivable, investments, accounts payable and advances to associates are financial instruments. Credit Risk Credit risk is the risk of loss that arises from a counterparty failing to meet their obligations in full and on time. The maximum exposure to credit risk is represented by the carrying value of each financial asset and financial liability in the Statement of Financial Position. Bank accounts and short term investments are all with trading banks with investment grade credit ratings. The Investment Managers of the Financial Portfolio use a multi-manager approach, thereby reducing the exposure to any single manager and counterparty. Assets are held separate to the Investment managers' own assets under trust. The Trustees, in consultation with their investment advisors, have developed TUT's Statement of Investment Policies and Objectives ("SIPO") which stipulates a diversified investment strategy which reduces the credit risk exposure of the Trust. Interest Rate Risk Interest rate risk is the risk that the value or future value of cash flows from a financial instrument will fluctuate because of changes in interest rates. The Trust has low exposure to interest rate risk on short term deposits which are sensitive to changes in interest rates. Bond holdings are well diversified by issuer and by maturity date. Foreign Currency Risk Currency risk is the risk of change in fair value of financial instruments due to fluctuations in foreign exchange rates. Currency risks from shares are actively hedged within controlled limits by the Investment Manager. Currency risks from bond investments are generally fully hedged. Liquidity Risk Liquidity risk represents the Trust's ability to meet its contractual obligations. The Trust evaluates its liquidity measurements on an ongoing basis. TUT generates sufficient cash flows from its activities to meet its obligations arising from its financial liabilities. Market Price Risk Market price risk is the risk that changes in market prices, such as equity prices or timber prices, will affect the Trust's profit or valuation of net assets. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return on risk. The Trust has considerable investments in a number of Wholesale Unit Trusts that are of a liquid nature. In order to achieve the Trust's Investment objectives and reduce risk exposures the Trustees have allocated these funds across a number of asset classes and applied benchmarks and ranges to further reduce market risk. The Trust also has a significant Investment in CNI Iwi Holdings in terms of the Central North Island Forests Deed of Settlement and therefore there is a concentration of market risk associated with this investment.

Financial Instruments Financial Assets Loans and receivables Cash and Cash equivalants Receivables from non-exchange transactions Other Current Assets Held to Maturity Term deposits Available for Sale Investment in AFL shares Fair value through surplus or deficit Investments Financial Portfolio) Financial Liabilities Liabilities at amortised cost Accounts payable under exchange transactions

BDO WELLINGTON

2017 GROUP PARENT $ 000's $ 000's

2016 GROUP PARENT $ 000's $ 000's

13,482 1,599 52

2,327 1,537 1

10,716 1,250 79

18,134 264 28

10,363

39

19,323

12,605

10,054

-

10,054

-

182,304

182,304

171,622

171,622

601

374

1,191

846

TWENTY SIXTEEN - TWENTY SEVENTEEN » HE KORONA WHAKATAENA

45


NOTES TO THE FINANCIAL STATEMENTS

|

For the Year Ended 31 March 2017

26 Capital Management The Trust's capital includes Fixed Capital, Retained Earnings and Fair Value Reserve. The Trust's policy is to maintain a strong capital base so as to sustain Iwi and Tribal Development to provide benefits to its various Hapu (Marae Groups) and individual beneficiaries. The Trust is subject to externally imposed capital requirements under the Central North Islands Deed of Settlement and CNI Iwi Holdings Trust Deed and Shareholders' Agreement. These agreements limit the ability of TUT to dispose of its beneficial interest in Central North Island Forest Land for a period of at least 10 years The Group’s policies in respect of capital management and allocation are reviewed regularly by the Board of Trustees. 27 Operating Leases The Trust has operating leases for office equipment The total value of minimum lease payments is due as follows: Not later than one year Later than one year and not later than five years Later than five years

Group $ 000’s $ 000's 38 19 42 81 19

Parent $ 000’s $ 000's 24 19 59 42 83 61

28 Commitments and Contingencies The Board moved a resolution for further investment in Tribal. There was approval of $9.03M (PY 11.76m) funding to be invested in coming years on tribal projects. These projects include ongoing support to the community health centre, four new buildings for Tribal, Tūhoe Marae upgrade project and Tribal Spatial Planning Priorities and Capacity building. The Matahi forestry rights purchase was an agreement with Crown Forestry established to return crown forests under a treaty settlement. In 2008, the Crown purchased 20 years forestry rights over the Matahi trees owned by Matariki Forests. The underlying land was a subject to a complex grievance dating back to the original purchase by the Crown in 1896. Under the term of the agreement, during the twenty year term of the forestry right, the Crown may purchase the other interest in the property. The Crown’s option to purchase the land is assignable to Te Kotahi a Tūhoe, the Tūhoe entity mandated for Treaty negotiations. The land and the forest were claimed by the Waimana hapū. There were access difficulties into the forest. Ngati Manawa has gone back to court to argue that the adjudication did not properly allocate Kainaroa. The legal fees that will arise as a result of this are unknown. 29 Contingent Asset One of the Investment funds, Managed by FNZ, invested in US based Funds and have deducted 30% withholding tax on this income. Under the DTA the Trust is only required to pay tax of 15% on the income. As a result, a US tax return will be filed to claim this tax refund from IRS. It is expected that this refund could be around $300,000. No provision has been made for this in the financial statements. 30 Events after Balance Sheet Date There are no significant events after the balance date.

46

TŪHOE - TE URU TAUMATUA » TWENTY SIXTEEN - TWENTY SEVENTEEN

BDO WELLINGTON


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www.ngaituhoe.iwi.nz BDO WELLINGTON

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