Ātihau Whanganui 2015 Annual Report by iStudios Multimedia Ltd

-WHANG A

AT I

I NU

U HA

RPORATI

Toi tu te whenua

Tēnei te ara o Rangi e tū nei Tēnei te ara o Papa e takoto nei Tēnei te pūrongo ā-tau o ĀtihauWhanganui te hora ake nei Tēnei te pō! Nau mai te ao! E te mōrehu tāngata, tēnei te poari o te mōrehu whenua te mihi atu nei ki a koutou me ngā tini āhuatanga o te wā. Ka tangi ki te hunga kua ngaro, ngā mate papanga iho te ia atu nei ki te mātotorutanga o te iwi nui, haere, e moe. E Koro Winiata, ko koe te kanohi o Te Mōrehu whare ki uta, e Kui Dardi, ko koe te kanohi o Patutokotoko ki Te Pakū-o-te-rangi. Moe mai rā kōrua, otirā koutou, tapiki atu hei whetū kimokimo i te Mangōroa. Okioki mai rā. Ko tātau tēnei ko ngā mahuetanga iho o te hunga kua ngaro e mihi atu nei, tēnā koutou, tēnā tātau. E te mōrehu tāngata, kua tahia te tau, arā anō ngā hua me ngā akoranga kua

Acknowledgement is given to the universe Acknowledgement is given to the earth As we present our Annual Report Behold! To the remnants of our ancestors, we, the caretakers of our lands, send tidings and good wishes to all. We also mourn the multitude of loved ones that have passed during the year, and give particular recognition to Winiata Tapa and Dardi MetekingiMato, kaumātua who exemplified the values of the Incorporation in many ways. As with the many that have passed on, we bid them farewell as they ascend the Milky Way to become stars. It is with these words we acknowledge everyone and remember our loved ones forever.

puta mai i tēnei tau. Ka waiho ake mā ngā tuhituhi o roto o tēnei pukapuka e kōrero. Kei te mihi tonu mātau ki a koutou e tautoko ana i a mātau i roto i ngā tini āhuatanga o te ao pakihi. Tērā ko te hekenga o te kaha o te wāriu o te hoko miraka me ngā pānga ki te ahu miraka kau huri noa i te motu i tēnei tau me te pikinga o ngā mahi mīere. Tatū atu ki ngā āhuatanga kē kua puta i te Poari, arā:

me te nui o ngā mihi ki a koe, mōu te Poari me ngā kaimahi i ārahi, tēnā hoki koe.

•K ua uru mai he mema motuhake ki roto i te Rōpū Tātari, arā, ko Laurissa Cooney, he mokopuna nā Norta rāua ko Austin Brooks, ā,

Ngā manaakitanga o te wā ki runga i a koutou katoa, kia tangi hoki ko te Pīpīwharauroa, kūī, kūī, whitiwhiti ora!

•K ua uru mai he mema Ākonga Poari ki roto i te Poari, arā, ko Francene Wineti, nō te whānau Tangaroa.

Hei whakamutu ake, ka huri ki a Don Robinson, mema Poari mō ngā tau e maha, ko te reo o te ngākau e tuku atu nei ki a koe, mōu i whakaheke werawera, mōu ngā rerekētanga maha i kite. Ka nui te aroha me te mihi atu ki tō whānau hoki.

Nā mātau o te Poari o ĀtihauWhanganui

Kāti, ka mihi hoki ki ngā kaimahi e hāpai ana i te kakau o te tokotoko kia pai ai te whakatutuki i ngā mahi, tēnā koutou. Ki a koe Andrew, kua tutuki pai tō tau tuatahi, tēnei tō hui ā-tau tuarua

Another year has passed and we share with you its challenges and fruits. The details of the year are contained in this report and we want to take time to recognise your support of the board and staff, even with the pressures of business. Examples include the milk price drop and the effects this has had on dairying nationally, and also the great honey season we have had. We also want to share some of the changes we have made as a board, that is: •W elcoming Laurissa Cooney on as an independent member of the Finance, Audit & Risk Subcommittee. She is a mokopuna of Norta and Austin Brooks, and •W elcoming Francene Wineti (of the Tangaroa whānau) who is our new Associate Director on the Board. We also want to thank the staff for their commitment to the Incorporation and

recognise their efforts. It’s also been a year for Andrew as CEO and this will be his second AGM. We acknowledge his skill and efforts to support the Board and staff. Finally, we turn to Don Robinson, who, after 18 years, is retiring from the Incorporation at this year’s AGM. Don has worked tirelessly for the Board to support shareholders, and has seen many changes over his long service. We thank him and his whānau for the time and commitment. Have a safe and enjoyable holiday break and may we all reap the benefits that the Pīpīwharauroa may bring. From the Board of Directors.

Toitu Te Whenua

Toitu Te Tangata

Toitu Te Mana

Prioritise animal welfare

Support the community

Use technology everyday

Kaitiakitanga of land, people and resources

Deliver the best there is for customers

Deliver produce with excellence

Grow our people, leaders and success

Foster reciprocal, enduring and honest relationships

CONTENTS TOITŪ TE MANA 6

Ātihau-Whanganui Incorporation

Chairperson's report 8

Partnership of Growth

Profiles: Laurissa Cooney and Francene Wineti

TOITŪ TE WHENUA 10

CEO Report

Summary of Key Financial Information

TOITŪ TE TANGATA 17

Te Āti Hau Trust Chairperson's Report

Benefitting Shareholders, Benefitting the Incorporation

2014/15 Trust Grant Recipients

ĀTIHAU-WHANGANUI INCORPORATION FINANCIAL STATEMENTS 27

Contents

Shareholders and CoM Information

Statement of Financial Performance

Statement of Movements in Equity

Statement of Financial Position

Statement of Cashflows

Notes to the Financial Statements

Auditors' Report

TE ĀTI HAU TRUST FINANCIAL STATEMENTS 43

Contents

Statement of Financial Performance

Statement of Movements in Equity

Statement of Financial Position

Statement of Cashflows

Notes to the Financial Statements

Auditors' Report

Glossary of Terms

Cover: Wiremu Haami-Cooper (Te Atihaunui-a-Paparangi), photographed during scanning, is a shepherd at Waipuna Station. 5

Ātihau-Whanganui Incorporation CHAIRPERSON'S REPORT

I am pleased to present this, the 45th annual report to whānau whānui, on behalf of the board of Ātihau Whanganui Incorporation. 2015 has been year of change with a new CEO and a fresh look at farm systems and management. It was a year that saw regional weather occurrences and global volatilty and disruption. The fall in milk price reminds us how vulnerable we are to these global events. It confirms the need for resilience and diversity in our business. You will see elements of our strategic response through this report. People, Succession & Governance The board identified succession as an area we needed to shape and support. Following a strong level of interest we are pleased to welcome Francene Wineti as our Associate Director and Laurissa Cooney as an Independent member of the Finance, Audit and Risk committee. You can read more about these “fresh eyes” on Page 9. We are excited by the depth, breadth of skills and capability of our whānau who are doing fantastic work out there in the private and public sector. We look forward to finding future ways to engage. The board has transferred the AwhiWhenua training programme from 6

Te AtiHau Trust into the “business as usual” working of AWHI. This was always part of the plan, so it now comes under the administration of CEO Andrew Beijeman with oversight from the Tangata Whenua committee. This will see better integration with the workings of the properties. We are encouraged with the positioning and outcomes of AwhiWhenua, and hope you were able to watch its profile on Country Calendar. We have had lots of positive feedback.

Diversification & Resilience

Production

We continue to collaborate in research and investment to grow knowledge and minimise risk in areas of possible growth. We are pleased to report solid associations with Awhina, a Maori farming network, Tūhono Mīere, the national Māori honey collective, Awa Mīere, our own rohe honey collective, Tūhono Mīti, the Māori red meat strategy group, and Aotearoa Kai our collaboration with ANZCO and other Māori red meat producers.

It is easy to make broad statements about how well our farms are doing when we don’t have external comparisons or benchmarks. With our “One Farm” policy this is not an easy exercise, but we now apply national benchmarking data from Baker and Associates to our business. This allows us to have verification and confidence when making these comments, that they are tika. We will report to you on these production and profit benchmarks. This year AWHI was successful in achieving external funding to lead a research project into the development of a mobile app to track and monitor pasture management, Project Whenua Mārama. This has come as a result of our engagement with the Te Hono Stanford Bootcamp, Stanford University, and Summer Technologies, a Silicon Valley tech start-up company. Ultimate benefits will include: • s marter, more timely information for on farm decision making; • i ncreased efficiencies; •p rofit growth; •e mbedded sustainable land management practices; • f arm-to-market verification data; •b ringing farm tools into the world of our rangatahi; and • i nvestment options for commercialised technology.

One of our strategic goals has been to diversify revenue streams to help manage the highs and lows of a single farm product. Our aim has been to get product revenues closer to 65% red meat, 20% milk and 15% other, including honey. This is more reflective of our land and natural environment capability. You will read more about the operations of our honey and dairy strategy in the CEO’s report.

Shareholder & Stakeholder Relations We indicated an objective to strengthen our communications and engagement with shareholders and other key stakeholders. In June this year, we released issue 1 of the AWHI biannual magazine. The second issue incorporates this AGM report. We thank you for your feedback, both positive and constructive. The board remain pleased at the chance to share our stories, and encourage feedback around content. We are working toward a stronger online presence to ensure our whānau spread far and wide can have access to these stories. We acknowledge the strong links whānau have to the AWHI lands we are charged to manage. We are mindful to assist with the aspirations of whānau while maintaining the greater responsibility to all shareholders. As we work through these issues with individual whānau we must keep in mind the original objective of why the joining together was and remains a serious focus. We remember the words of our tipuna Taikato Te

Rangihiwanui 1897 “Te mōrehu whenua, te mōrehu tangata” Earlier this year, with Morikaunui Inc., Hari Benevides and I, on behalf of our boards, hosted a pre-Ahuwhenua Awards function at Mint, Whanganui. It was an evening of celebration and manaakitanga. We continue to have collective discussions as FoMA meets its current day challenges. We acknowledge the work of Jim Edmonds, our Aotea representative on the FoMA board. An enlightening evening was had in Ohakune when the board met and shared kai with members of Ngāti Rangi and Uenuku boards as they prepare for their respective settlements. We discussed how we might work closer, and wished them, and all settling entities well. Finally, following a strong line-up to fill two positions on the board last year, we are pleased to welcome back Che Wilson and Toni Waho. I wish to acknowledge the work of the board, our sub committees and Te AtiHau

Above: Don Robinson. Below: Toni Waho.

Trust board who undertake important roles for our greater benefit. I must also commend Andrew for a year well managed with great progress. Thank you to our staff who have risen to the challenge of change and are progressing with vigor, vibrancy and positivity. No report is complete without an acknowledgement to Keri and Frances, sincere gratitude ladies.

Toitu Te Mana

To our whānau of Ātihau Whanganui Incorporation – we think of you everyday. We mourn your losses and celebrate your successes. We strategize as to how we make our place a better place, the future of our mokopuna a better future and we remain honoured to serve you. Nāku nā

Mavis Mullins Chairperson

Left to Right: Directors Mavis Mullins (Chair), Whatarangi Peehi-Murphy, Te Tiwha Brendon Puketapu, Che Wilson and Jim Edmonds.

Partnership of Growth The relationship between AWHI and Balance has been forged over more than 40 years (initially through Robson and Partners) and is a valued association for both organisations. Over time it has developed into a partnership of growth characterised by a deep understanding, ensuring an effective relationship. Balance has worked with AWHI over the years to ensure land is safeguarded and that custodianship recognizes the economic and spiritual importance of the land. Balance have fulfilled an important role that facilitates professional services with demands of both a cultural and commercial nature.

He waka eke noa A canoe which we are all in with no exception

Balance has played a role in challenging the organisation and supporting AWHI to develop and achieve its strategies. This has included the successful execution of growth strategies including the resumption of land and the introduction of the â&#x20AC;&#x2DC;One Farmâ&#x20AC;&#x2122; policy. The strength of this relationship was tested during the year as AWHI reviewed the provision of accountancy and advisory services. As an example of innovation Balance partnered with Deloitte to provide full service accountancy and additional advisory services, a major step up. This new relationship will provide improved services with advanced technology solutions and the power of Deloitte, who have a major national and global network of experts and support.

This also means that there is no change to the close understanding or any loss of institutional knowledge. As Balance implements its own strategic vision and strives to enhance its services and quality of provision, AWHI will see further improvements to the skills and knowledge available. The recent appointment of Balance, with Deloitte, to provide accountancy and advisory services is seen as a first step in a continued journey â&#x20AC;&#x201C; one that started back in 1967 and will continue into the exciting future ahead!

LAURISSA COONEY Te Ātihaunui-a Paparangi, Ngāti Ranginui, Ngāti Kahungungu Laurissa Cooney has been appointed as an independent member of the Audit and Risk Committee for Ātihau Whanganui Incorporation. She is a chartered accountant and has a Bachelor of Management Students with Honours majoring in Accounting and Māori Resource Management. Laurissa is currently the Chief Financial Officer for Te Whare Wānanga o Awanuiārangi in Whakatāne. She has worked with the accounting firm, Deloitte in Auckland, America, and London. Upon returning to New Zealand from London in 2008, she was based in Auckland. In January 2013 Laurissa, her husband and two small children left the busy city life and moved to Whakatāne to enjoy a more

regional whānau lifestyle and to work at Te Whare Wānanga o Awanuiārangi. While Laurissa is currently working in Whakatāne, she regularly comes home to Raetihi and the Whanganui River to visit whānau. Laurissa was born in Raetihi and attended Raetihi primary as a child. Her mum Karen resides in Raetihi. Her maternal grandparents are the late Austin and Christine Brooks (nee Tapa) and her paternal grandfather Mr Charles Lloyd Sommerville, previously farmed on the Oruakukuru Road, just south of Raetihi. Laurissa had connections to various marae on the Whanganui River including Ranana, Koriniti, Atene and Parikino.

Laurissa is passionate about building a stronger connection to her iwi and whenua. She is enthusiastic in offering her vast expertise to contribute to the ongoing success of AWHI and to give back to her people her skills and knowledge. She is welcoming the opportunity to work with Ātihau Whanganui Incorporation and the Audit and Risk Committee.

FRANCENE WINETI Te Āti Haunui a Paparangi, Ngāti Kahungungu ki Te Wairoa Francene Wineti has been appointed to the Ātihau Whanganui Incorporation board as an Associate Director. Francene’s late father John Wineti is from Koroniti where he was raised in his early years by his father Te One Wineti and his mother, Te Paea (Polly) Wineti (nee Taunoa) along with his five siblings. Her great grandfather is Eruera Tangaroa and great grandmother Rihipehi Teki. Francene was raised in Tauranga and has a Masters in Aquaculture from Deakin University in Australia, and will be graduating in December with a Master in Business Administration from Victoria University of Wellington. She is currently working at Callaghan Innovation as a Māori Business

manager. Her role is to work with Māori to increase their return on investment in research and development, and to help them gain market advantage through the commercialisation of leading edge ideas and new products. She has considerable experience in the fisheries and aquaculture sector previously working for New Zealand King Salmon as a fish health performance scientist and at Te Ohu Kaimoana in fisheries and aquaculture policy, operations and industry development. She was one of the early recipients of the Te Ohu Kaimoana and Nippon Suisan Kaisha Global Fisheries Scholarship programme to Japan which proved a great stepping stone to gaining international business exposure.

Francene is currently a director on Whanganui Iwi Fisheries Limited and a shareholder of AWHI. “My aspirations for AWHI are to grow the asset base and wealth in all aspects, so that the benefits can be accrued for the beneficiaries. If the commercial entity is strong and healthy then our iwi will be too”. Francene lives in Wellington with her partner Pereri Hathaway and three year old daughter Te Paea. 9

Toitu Te Whenua

CEO REPORT What an exciting and busy year it has been. Over the last 12 months, AWHI has gone through a number of changes focused on increased profitability through improved management systems, more productive farms and safer and more qualified staff. At the same time, AWHI’s honey business has been progressed, moving one step further up the value chain.

From a financial perspective AWHI’s performance is consistent with previous years. A reduction in earnings before interest, tax, depreciation and amortisation was offset by an increase in the value of carbon units on hand, whilst net farm income was maintained at similar levels despite storm damages, increased stock purchases and fertiliser inputs. The following describes this year’s activities in detail.

Operations Report

Climate Following a mild winter, we had below average temperatures which then restricted pasture growth rates during spring. Temperatures improved in December, and combined with optimal soil moisture levels due to November rainfall, provided ideal grass growing conditions during the month. This allowed pasture covers to recover to target levels on most farms prior to Christmas. Between December and March farms received only 45% of the normal rainfall, the majority of this deficit occurring in January. The summer rainfall that did occur was received at regular intervals, alleviating some of the effect of the dry. The dry period was broken in April as a precursor to a wet and cold late autumn/early winter. Between April and June, twice the normal rainfall occurred and temperatures dropped to below normal. As a result, feed budgets were adjusted to give adequate pasture covers at lambing. All in all, a pretty average year. Dry stock Total lambs born increased to 108,828 lambs due to an increased lambing percentage following a better scanning result. This equated to an overall lambing percentage of 127% (2014:124%) for the year. During the season, 81,464 seasonal lambs (2014: 79,751) and 1652 winter lambs were sold off the property. Of the seasonal lambs only 6441 were sold store as part of a strategy to mitigate the effects of the dry summer. The remaining lambs were sold directly to the works at 16.8 kg CW (2014: 17.5 kg CW). In addition, 2800 lambs were finished under a live weight gain contract during December and January. Fixed pricing agreements were entered into with our two preferred lamb processors, this limited our exposure to price reductions over summer. During the year, 1573 ewes were purchased for the Operiki block. These ewes replaced some of the poorer producing ewes purchased when the

Operiki block was resumed with the aim of improving production from the farm. During the year, steps were taken across all farms to improve future lamb survival, increase protection against drench resistance and improve the quality of ewe lamb replacements. This involved making better country available for lambing, reducing the transfer of hoggets between farms, increasing replacement weights and having a focus on setting up breeding farms to grow ewe lamb replacements more quickly, immediately after weaning. Internal parasite management on all farms was reviewed and improvements made. A total of 4,198 beef calves were born across AWHI farms, similar to previous years. A total of 1820 prime steers were sold at 290kg carcass weight along with 1328 prime heifers at 230kg carcass weight. Beef prices lifted as a result of greater international demand. At the same time, a minimum price contract limited downside risk and allowed an average price of $1566.14 to be achieved. A review of the feedlot was conducted and found that alternative wintering systems would be more cost effective. On this basis, steps have been taken to prepare the move away from the feedlot next season. A small amount of development work which focused on improving fencing and reticulated water was completed on dry stock properties. Dairy Record production of 218,689 KgMS was achieved on the AWHI dairy unit during 2014/2015 as a result of a focused effort by management to improve grazing management and reduce the incidence of mastitis in the herd. The calving spread of the herd was also improved during the year by reducing the mating period to only 9 weeks. Over the year, 200 cows were culled on the basis of low production and/ or reoccurring mastitis infections, significantly improving the quality of cows in the herd for the 2015/16

season. Efforts were also made to improve water reticulation on the farm, and to lift the condition and pasture covers. Whilst the final Fonterra pay-out declined to $4.40 per kg MS during the season, management took the opportunity to lock in a guaranteed milk price for 57,500 kg MS (35% of total production) at $4.70 per kg MS, increasing total milk income by $17,250. Management Systems FarmHQ (farm data capture software) was replaced with FarmIQ early on in the year on the basis that it was more user friendly, better met our needs, and had greater support and future development opportunities. This allowed data entry to move from being office-based to farm-based, with the aim of increasing the accuracy and efficiency of data entry. At the same time all farms were placed onto farmax, a feed budgeting and decision support tool. Farmax allows the management team to forecast future pasture covers and make early decisions to mitigate the effects of any feed shortfall, or take advantage of any feed surpluses. The system is updated at least monthly during the year and more often during the summer to ensure that it is actively used as part of the decision making process. Ninety- day plans have in the past been used to ensure management is accountable for the implementation of strategy. In addition, 90-day plans are used by the management team to ensure farms are achieving seasonal targets. All farms are now benchmarked against the Baker and Associates database so that results and progress can be monitored against external farms, and areas of improvement identified. Honey Due to the unavailability of hives, only 2,732 hives were placed on the property relative to a target of 4,152. Hives were prioritised to the best sites with 576 hives placed on the Paetawa block for the first time. Despite hive 11

numbers not achieving target a very good production season meant that total honey production increased from 47,457 kgs in 2013/14 to a record of 92, 830kgs for the 2014/15 season.

in the last two years. An entitlement of 83,233 NZUs was received by the Crown. Due to forecasted price increases, no NZUs were sold during the year.

During the year a review of the apiary business was completed and the decision made to move further up the honey value chain, beginning with the management of hives owned by AWHI.

Management is working through a process with Earnslaw One regarding historic valuations of the Winstone forest. These valuations are important as they determine the value of historic rent arrears and future rent payments, and an outcome is expected during the 2015/2016 financial year.

Forestry and Carbon During the year boundary pruning was completed to forestry stands at both Papahaua and Waipuna to prevent any fence damage. In total, 395,587 Emission Reduction Units (ERUs) were sold during the year, before these were removed from the emissions trading scheme on 31 May 2015. Total revenue of $36,675 was received for these units or an average price of 10.8 cents per unit. An additional 893 ERUs were surrendered to remove the liability on a small area at Paetawa which had been sprayed

Investments No major work was completed on the Papahaua Forest JV. The forest has now been insured against fire. A significant amount of development occurred at Te Hou during the year. A good source of underground water was located to service both the dairy and dry stock unit. During the year the dairy unit was fully irrigated, a feed pad built, steps taken to improve the effluent system and areas of

unproductive land made productive. Development on the dry stock unit was focused on removing some existing fences to increase paddock sizes to a commercial scale. Ground was prepared for irrigation, including the removal of trees and earthworks. The dairy farm achieved production of 376,612 kg MS assisted by the use of the feed pad and irrigation during late summer. The dry summer significantly impacted the productivity of the dry stock unit, limiting the number of lambs finished. As expected, higher repairs and maintenance costs, further stock purchases, the dry summer and a low dairy pay-out lead to and overall loss at Te Hou. Despite this loss, development of Te Hou will continue during 2015/16.The productive gains from development are evident and the investment brings further and necessary diversification to AWHI.

Left to Right: Siwan Shaw, Andrew Beijeman, Steve Tapa, Jack Valois, Dean Francois, Brian Thompson, Bruce McDougal, Damien Dickson, Rex Martin and Sheldon O'Hagan.

People

Health and Safety Farm staff were provided with a refresher course in the safe use of four-wheel bikes during the year. The ability of farm staff to communicate in an emergency was improved with radio communications set up on farms which experienced intermittent cell phone coverage. Emergency location devices have been trialled on Papahaua. The management of Health and Safety was transitioned away from a paperbased system to an online system through PeopleSafe. This provides prompts to ensure accident reporting and investigation is more effective, whilst enabling ease of monitoring. At the moment the system is only being used to manage hazards, incidents and records. In the future its use may be expanded to increase the involvement of staff, provide standardised training and inductions, and manage the servicing of vehicles and other equipment. Staff Development A performance development system has been created for all staff. This system gives staff the opportunity to have at least two formal performance and development discussions with their manager each year. As part of the development, the job descriptions of all staff were reviewed to ensure alignment. Managers received training on how to provide both formal and informal feedback, and how to implement the system. Due to timing constraints the system was only partially rolled out during the 2014/15 year, with full rollout expected by September 2015. In October, staff had the opportunity to attend a dog training day at Ohorea. A pasture management training day was held in April, during which time staff reviewed the importance of pasture quality and quantity. An in-house extension program was developed during the year which will be rolled out in August of 2015.

Land

Environmental Protection Continuing with our vision at AWHI Dairy to fence off all water ways and

initiate a native planting programme, 2,000 native plants were planted during the year. A further 3000 native plants were planted at the Banana Bridge project at Tawanui. A further 203ha was committed to Ngā Whenua Rāhui during the year, with some 12km of fencing completed on Waipuna, Papahaua, Te Pa and Tohunga. Funding for this work was received from Ngā Whenua Rāhui programme and Horizons SLUI fund. Damage Caused by the 2015 storm On 21 June, a significant storm event affected all breeding farms, with significant slipping at Operiki, Waipuna, Ohorea and Papahaua, reducing the effective land area and damaging fences and tracks. The total repairs cost is expected to be $470,000. In addition, it is expected that a number of stock was lost during and immediately after the storm in slips, however this number is yet to be quantified. Like many others, some of our staff were cut off for a number of days, and those along the Whanganui River are still dealing with the effects of the storm, limiting access up and down the river. All farms responded quickly, immediately securing diggers to open up access around the farm, and set stocking some mobs to limit losses. We received a large number of offers of support after the weather event which was greatly appreciated.

Financial Result Net Farm Income equalled $4.9 million (2014: $5.1 million) due to small declines in gross farm income from $17.1 million in 2014 to $16.8 million as a result of increased stock purchase. Farm expenditure decreased slightly to 11.9 million despite increases in fertiliser applications (as maintenance applications returned to normal), cropping and regressing costs (due to changes in the accounting treatment of these costs), and repairs and maintenance (associated with storm damages). Earnings before interest, tax, depreciation and amortisation equalled 2.9 million (2014: $4.4 million). Corporate income declined to $32,000

($1.0 million). Carbon revenues decreased by $700,000 as New Zealand Units were withdrawn from sale due to an expected price increase. This income reduction was offset by an increase in the value of New Zealand Units on Hand of $1.3 million. Cost of finance increased to $1.9 million (2014: $1.7 million) due to interest costs associated with Te Hou. Corporate expenditure was maintained at $1.5 million. As at 30 June 2015, total debt was maintained at $29,812,967. A reduction in rateable land values reduced equity by $6.0 million to $124.2 million resulting in a debt to equity ratio of 24%.

Concluding Comments If the 2014/15 year was about change, the 2015/16 year will be about consolidation as projects carried out over the last 12 months are embedded into business as usual. There will be a continued focus on improving farm productivity and getting the most out of our staff, with a renewed focus on increasing the value of red meat sold off the property. Change isn’t always easy, and as a final point I’d like to thank the management team and all staff for being receptive to change, being part of change, and implementing change for the betterment of AWHI. Nāku nā

Andrew Beijeman CEO

SUMMARY

Gross Farm Turnover 2014

Ä&#x20AC;tihau Whanganui Incorporation SUMMARY OF KEY FINANCIAL INFORMATION FOR THE YEAR ENDED 30TH JUNE 2015

$17.5M

2015 $

2014 $

Gross Farm Turnover

18,174,290

17,530,292

Purchases

-1,138,759

-497,469

-266,569

49,424

Gross Farm Income

16,768,962

17,082,247

Farm Expenditure

11,860,903

11,941,610

Net Farm Income

4,908,059

5,140,637

Cost of Finance

1,886,784

1,655,659

Depreciation

3,488,948

3,681,661

EBITDA

2,881,260

4,445,580

124,179,963

130,260,432

Change in Livestock Numbers

Closing Equity

2015

$18.2M

Equity 2014

$130.3M Total BNZ Debt Te Hou Deferred Contribution

29,812,967

29,862,967

2,066,666

31,879,633

31,929,633

2015 $124.2M

Capital & Development Exp

1,847,675

2,764,974

Net Farm Income

95%

2014

$5.1M

Honey Production 2015

Record Production of 92,830Kg

$4.9M

11% EBITDA

Milk Solids Produced Record Production of 218,689Kg

2014

$4.5M

2015

6.5%

$2.9M

Lambs Born Increase in lambs born of 6,645

Clockwise from top left: Agnes Tomlinson and Taikura o Te Awa Tupua Roopu performing at the 2015 KaumÄ tua Kapahaka Festival, Dr Amber-Lea Rerekura, Tira Hoe Waka 2015 intake in front of NgÄ puwaiwaha Marae, Taumaranui and Piki Waretini and Lena Tapa at the 2014 Atihau Whanganui Incorporation Annual General Meeting.

Toitu Te Tangata

Te Āti Hau Trust CHAIRPERSON'S REPORT Nau mai haere atu rā tēnei pānui ki te tī, ki te tā. Kawea te rongo mō ngā painga o tēnei kaupapa. Toni Waho completed his term as Chair of the Trust and was replaced by Te Tiwha Puketapu. This is Toni’s report on 2014-15 and Te Tiwha’s projection for 2015-16.

BUDGET $

2015 $

50,162

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

380,000 380,000 30,000

18,461

460,162 448,623

With the winding down of the housing insulation project and the completion of the National Housing Conference, the Trust was able to reduce its request from AWHI for funding in 2015. Administration Expenses Administration

35,084

Audit Fees

3,979

Bank Fees & Charges

Committee Expenses

10,671

Total

65,000

49,774

With the constraints on AWHI we reduced the number of meetings of the Trust to 4 per year which reduced administration costs.

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

Housing & Insulation Total

30,000

34,488

Keria Ponga and Don Robinson completed the housing insulation project. Whanganui Regional Housing Total

5,000

This project did not proceed as planned. Funds were diverted to the surplus to be used in 2015-16. Awhiwhenua Training Project Total

45,000

43,030

Another 7 students commenced level 3. Another 4 are completing their level 3 and 2 are completing their level 4 certificates in Agriculture. We hope you enjoyed the Country Calendar programme. In 2016 Awhiwhenua will be run under AWHI.

BUDGET $

2015 $

20,000

17,100

10,000

6,154

10,000

7,385

Tangihanga Koha Total Don continued to ensure our koha for a tent was taken to our grieving whānau. Website & Database Database Expenses Work continued on this and we hope to be up and running online in 2016. Grants Administrator Total Debbie Te Riaki fulfilled this role. Ngā mihi nui ki a ia. Grants Made General Grants

79,396

Education Grants

194,655

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

275,000 274,051

Total Expenditure

460,000 431,982

Surplus / (Deficit) to 30 June 2015

162

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

$2,000 per year for two years

Jacob Robinson Josh Firmin Jeanette Trego Kendrex Kereopa-Woon

Robyn Murphy-Peehi

$8,000 per year for two years

Hinurewa Poutū completed her PhD. This scholarship is currently available.

Ātihau Whanganui Ravensdown Scholarship Sam O’Donnell retained the scholarship in 2015. A new recipient will be in place for 2016.

Nāku nā

Toni Waho Chairperson 2009-2015

16,641

Te Āti Hau Trust Budget 2015-16 The AWHI Board agreed to fund the Trust for the 2015-16 financial year.

Cash at 30.6.15

BUDGET $ 20,000

Interest

Total Income

20,000

Admin

50,000

Tangi

20,000

Database

20,000

Grant admin

10,000

Grants

280,000

Total expenditure

380,000

AWHI Grant

380,000

Cash at end of Year

20,000

Nāku nā

Te Tiwha Puketapu Chairperson (Appointed 1 July 2015)

Top to Bottom: Trustees Te Tiwha Brendon Puketapu (2016 Chair), Jim Edmonds, Don Robinson, Keria Ponga, Anton McKay.

Te Āti Hau Trust. Benefiting shareholders, benefiting the Incorporation.

Despite only operating for a few years Te Āti Hau Trust is already providing indirect benefits to the incorporation through motivated scholarship recipients wanting to find a way to give back. Two recent examples of this are Emma Bell (profiled in AWHI Issue 2) and Jacob Robinson. Emma got in touch with AWHI earlier this year wanting to use her experience as an agronomist for PGG Wrightsons to investigate the cropping and grassing programmes we have in place. As a result of her initiative in communicating to us her qualifications and experience, Emma has been invited to present twice to the AWHI management team. From these conversations small but hopefully significant changes have been made to cropping and grassing programmes with the aim of increasing long term production for the incorporation. Jacob on the other hand came to the attention of the incorporation because of his understanding of

Geographic Information Systems (GIS). Over the last 12 months Jacob has recommended a GIS program for the incorporation to use and completed some basic mapping work. As we work towards understanding the best way to optimise each piece of land within the incorporation, tools such as GIS are going to become more important. Having someone like Jacob to help guide us in the application of this technology will no doubt be beneficial. These two examples of engaging with previous scholars in the day to day business of AWHI demonstrates how Te Āti Hau Trust has an important part to play in the achievement of the incorporation’s strategy. This engagement will no doubt increase and change with the increasing needs of AWHI. Close ties and formal linkages between AWHI and Te Āti Hau Trust will ensure that positive role models like Emma Bell and Jacob Robinson become more common.

Te Ä&#x20AC;ti Hau Trust 30 June 2015 Grants Recipients

General Grant Categories

Nanette Puohotaua

Boxing Club fee

Thomas Nathan

Recipients

General Grant Categories

Ruapehu Maori Catholic

Hui Aranga

1,000

Manawatu Secondary Schools Premier Rugby Uniform travel

150

Shakaiah Perez

World Hip Hop champs Los Angeles

1,000

Awhina Haenga

Waka Ama - Life jacket and Hoe

250

St Peter Chanel

Hui Aranga

1,000

Sharon Tapa

Waka Ama - Life jacket and Hoe

250

Tuihana Phillips

Hand Rails - outside steps

450

Aisha Short

International Netball - Cook Islands

500

Blair Osborne

NZ Rep U17's Mixed Touch

500

Caillian RigbyHibbard

Aotearoa Impact BBball USA Tour

500

Gabrielle Hiri

Cultural exchange programme

500

Hinepuaraurangi Hawira

Waka Haunui Rarotonga

Jaqiyak Te Hemopo Kora

Te Kura Kaupapa Travel to youth forum in Tupoho China

1,000

Te Roopu O Parikino

Hui Aranga

1,000

Te Wainui-arua Cultural

Hui Aranga

1,000

Zane Hubbard

NZ Basketball Academy

1,000

Cullinane College

9 shareholder Uri students - Travel to Rarotonga

1,300

Jordan and Paris Urwin

Maori Battalion Commemoration Crete Italy North Africa

1,500

500

Kawhakinga Te Huna

Heat pump contribution

1,500

NZ Rep U16's Indoor Mixed Netball

500

Maehe Thompson

Melbourne Fashion Festival 2015

1,500

Mauhana Babbington

World Mounted Games NZ Rep

500

Tommy Waara

KHH Stallion Challenge

2,000

NZ rep Touch Rubgy in Australia

500

2014 National Maori Womens Welfare League Conference costs

2,000

Shamara Brooks

Whakaaro Nui Ki Te Ora

Tamati Butler

NZ Polocross Junior Scholarship

500

Te Kura Kaupapa Transport costs - Te Tai o Ngati Rangi Hukarere Programme

Tawaroa Ponga

NZ Rep U15's Softball

500

Taikura o Te Awa Tupua

Maori WW1 Anniversary travel and accommodation

2,300

Te Taikura O Te Awa

Perform at Kaumatua Matariki celebrations

500

Te Wainui a Rua School

School trip to Australia

2,600

Tui Wikohika

Pro-Snowboarding Coaching

500

Te Poti Marae

Restoration programme

5,000

Sheena Mareikura

NZ Reps Hip Hop Competition Brisbane

600

Te Taiuru ki Rangiatea Voyaging Society

Te Mana o te Moana Fleet - Cook Islands

5,000

Te Uta Hibbard

Medical assistance

721

Putiki Marae

Flood damage

10,000

Te Aroha Hakaraia

Medical assistance

800

Tira Hoe Waka

Iwi Wananga

10,000

Jeron Hiri-Gush

NZ Basketball Academy

1,000

NZ Basketball Academy

1,000

Upgrade water reticulation system for Kaiwhaiki Marae

15,000

Matangirei Hipango

Kaiwhaiki Pa Trust

Nga Tai O Te Awa Trust

Taipahake - Kaumatua Olympics

1,000

Net General Grants

425

79,396

Te Ä&#x20AC;ti Hau Trust 30 June 2015 Grants No Fees

No Fees

Denise Wiremu

150

Kelly Prince

150

Roberta Williams

150

Faith McCallum

150

Lee Ngatoa

150

Te Ao ote Rangi Higgins

150

Horiana Rameka

150

Nemesis Smith

150 Total

Secondary School Yrs 10 & 11

Anahera Tataurangi

250

Kaewa Potaka

250

Reimana Rameka

250

Arama Meihana

250

Kairon Green

250

Rohan Corbett 2014

250

Azaria Rameka

250

Kaleb Love-Lama

250

Rohan Corbett 2015

250

Barney Warbrick Jnr

250

Kayana Hopkins

250

Ruby Ratima

250

Baylee Maniapoto

250

Kitana Toatoa

250

Rukuwai Te Weri

250

Caleb Collins-Fore

250

Kororia Waitai

250

Seona Forde

250

Cassidy Allen

250

Kotahi Myers

250

Shae Gray

250

Cassidy Duncan

250

Kwin Quin

250

Shamara Brook

250

Cymfani Waters

250

Lakan Haenga

250

Shaolin Heremaia

250

D'Deliquex Taylor

250

Liarna Waiwiri

250

Sharon Tapa

250

Danielle Rihia

250

Lilli Hammond

250

Tahuriwakanui Durie

250

Dayna Stevenson

250

Lisa Walker

250

Tama Bidois

250

Donna Martin

250

Lucy Brown

250

Tama Potaka

250

Emason Wallace

250

Luushaan McKay

250

Tamati Butler 2014

250

Gabrielle Hiri

250

Macy Duxfield

250

Tamati Butler 2015

250

George Miles

250

Manahi Gardiner

250

Tangata Kee Matenga

250

Haimona Te Utupoto

250

Marama Hoko

250

Tanisha Elliot

250

Harlem Awhitu

250

Marion Long

250

Tawaroa Ponga

250

Harlem Kaa

250

Mathias Damsted

250

Te Hineriki Te Awhe

250

Hemi Potaka

250

Meg Timu

250

Te Ohomauri Kingi

250

Hinehou Treanor

250

Moengaroa Taiaroa

250

Te Raina Durie

250

Hinengakau Hough

250

Monika Hough

250

Te WainuiaRua Mansell

250

Iriaka Mason

250

Myrin Kumeroa

250

Te Waiwera Tapa

250

Jahvahney Hina (Nahona)

250

Natalia Ranginui

250

Tiarna Thompson

250

Jamie Blackett

250

Ngaire Tonihi

250

Tiori Rawhiti

250

Jaqiya Kora

250

Oceanview Woon

250

Tipene Richards

250

Jesse Malcolm

250

Owen Taku

250

Tyla McCallum

250

Joshua Waitai

250

Paora Richards

250

Waratana Hartley

250

Judah Malcolm 2014

250

Paris Urwin

250

Whaingaroa Hape-Tonihi

250

Judah Malcolm 2015

250

Raemon Teki

250

William Stevenson

250

Kaea Josephs

250

Rebekah Chamberlain

250 Total

1,200

23,000

Part-time Tertiary (under 12hrs per week)

Aaron Riki Karena

350

Karanga Morgan

350

Dennis Winterburn

350

Melanie Francis

350

Nga Remu Tahuparae

350

Fleur Martell

Part-time Tertiary (under 12hrs per week) Rachel Miles

Total

Full Time Tertiary Walden Noble

$ 50

Full Time Tertiary

350

2,450

Deshannon Matthews

600

Tania Pirikahu 2014

600

Dakota Ruta

255

Edward Kelly

600

Te Haumihiata Poa

600

Louise Tyson

300

Gabriel Baron

600

Te Rangimarie Maihi

600

Janette Jones

358

Galaxie Te Aho

600

Teena Monk

600

Annalise Enoka

400

Gracen Walsh

600

Kararaina Ngoungou

601

Elijah Pue

400

Hamish Nicoll

600

Diane Wildermoth

700

Jessica Tyson

400

Hoani French

600

Edward Smallman

700

Karen Butler

400

Hope Brunton

600

Jesse-lee Rihia

700

Maraea Leng

400

Jarred Anae

600

John Miller

700

Nikita Hiroti

400

Joel Rudolph

600

Jordan Makatea

700

Raina Patea

400

Kahu Butler

600

Juanita Rapana

700

Samuel Butters

400

Kataraina Delves

600

Myles Mclean

700

Sharon Marshall

400

Katrina Daly

600

Ngawai Jackson

700

Te Aroha Hakaraia

400

Kaylin Hunia

600

Nicole Manu

700

Yvette Simon

400

Kulwinder Nagra

600

Rachael O'Halloran

700

Olivia Cockburn

500

Makuini Biel

600

Renata Atkins

700

Angela McGregor

500

Marama Cameron

600

Rokonaulu Kapaiwai

700

Arihia Hartley

500

Marama Taurerewa

600

Tessa Harrison

700

Arihia McGregor

500

Maryanne Mareikura

600

Adrienne Wharehinga

700

Ashleigh Hobbs

500

Melissa Hiroti 2014

600

Alex Damsted

700

Camilla Allen

500

Melissa Hiroti 2015

600

Alexandra Brooks

700

Cheyenne Ruta

500

Natalie Healey

600

Alexandra Kumeroa

700

Cory Miles

500

Nia Lynaire Vena

600

Alice Miles

700

Darinee Ratana

500

Nicole Claughton

600

Alicia Barrett

700

Michelle Balsley

500

Penina French

600

Anahera Hemara

700

Miriama Mariu

500

Rachel Wikeepa

600

Anaru Matthews

700

Ngapera Akapita

500

Reweti Kuka

600

Arthur McKecknie

700

Papatuanuku Tamarua

500

Sam Donaldson

600

Ashley Howell

700

Sophie Bell

500

Sarah Te Aho

600

Chanatae Woon

700

Raukurawaihoea Waitai

541

Sarita Taurima

600

Chantal Lillas

700

Alayna Sharma

600

Saskia Paewai

600

Cheryl Marriner

700

Alexander Te Patu

600

Stacey Wikohika

600

Chris Brownbridge

700

Allandria Puna

600

Stephanie Kingsford

600

Claudia Raupita

700

Arama Wakefield

600

Stirling Bartlett

600

Courtney Monk

700

Carl Makeham

600

Summer Warbrick

600

Crystal Marsh

700 23

Te Ä&#x20AC;ti Hau Trust 30 June 2015 Grants Full Time Tertiary

Full Time Tertiary

Damian Murray

700

Hana Tauroa

700

Jaymie Wardlaw 2015

700

David Mcleod

700

Hemi McKechnie

700

Jhanelle Richards

700

Deena Tapara

700

Heni Unwin

700

Jordan Collins-Fore

700

Deja Ngatoa

700

Hinetiki Karaitiana

700

Joseph Tamarua

700

Donna Stott

700

James Adams

700

Julia Wareham

700

Erana Phillips

700

Jasmine Martin

700

Karli Selwyn 2014

700

Gypsy Foster

700

Jaymie Wardlaw 2014

700

Karli Selwyn 2015

700

Kathleen M Hohepa

700

Natalia Green

700

Sasha Te Ahuru-Mille

700

Kayla Wareham

700

Nga Roma Poa

700

Selena Wallace

700

Kelli-Ann Tyson

700

Penelope Wiari

700

Shaqkinen Stebbing

700

Kendayl Taurima

700

Pita Heke

700

Sheldon Hyland

700

Kirsti Treanor

700

Priscilla Sutton

700

Tania Anderson

700

Kyarni Rowe

700

Rachael O'Halloran

700

Tania Pirikaku 2015

700

Layne Lay

700

Rachael Reihana

700

Tawhiao McMaster

700

Lisa Warbrick

700

Rangimarie Wiari

700

Te Ana Rose Ngatuere

700

Lisa-Marie Ngataki

700

Rehupo Kara

700

Toni-Anne Hodder

700

Lorna Thompson

700

Ricki Winterburn

700

Valencia Poutini

700

Luke Cassidy

700

Roy Prince

700

Victoria Sutherland

700

Madeleine Bell

700

Samuel Trego

700

Waipuna Williams

700

Matthew Brownbridge

700

Sanhia Pratley

700

Wirihana Mateparae

700

Total

High Performance

102,905

Ashlee Tyson

800

Matthew Brownbridge

900

Kendrex Kereopa Woon

1000

Felicity Nepia

800

Simon Miles

900

Nicola Sabatier

1000

Jeanette Trego

800

Jacob McGregor

1000

Sarah Cornes

1000

Mary Cameron

900

Karamea Ratana

1000

Stevie Whitcombe

1000

Total

11,100

Post Graduate

Mary Jones

1100

Francene Wineti

1500

Ricky Cribb

1500

Tyrone Winterburn

1200

Jolene Yandall

1500

Roy Hoerara

1500

Jessica Smith

1300

Kataraina Sharp

1500

Te Herekiekie Herewini 2014

1500

Seth Clement

1300

Kevin Haunui

1500

Te Herekiekie Herewini 2015

1500

Kayla Gray

1400

Maire M Benevides

1500

Te Reo Reka Paki

1500

Matthew Kidd

1400

Ngarangi Haerewa

1500

Tina Jurgens

1500

Total

Medical

25,700

Marion Hohepa

400

Richard Tamati

700

Erena Browne

1500

Kelly-Ann Tyson

500

Samantha Farrell

700

Hoani McFater

1500

Kelly Waho

600

Tara Broughton

700

Katie Scorringe

1500

Lorraine Tyson

600

Tomairangi Yates

700

Malachi Ropata

1500

Lori-Lee Emery

700

Campbell Hooker

1500

Maemae Martini

700

Dhyanne Hohepa

1500 Total

Overseas

Sarah Reo

2,000

PHD Charlotte Connell - 2014

Agriculture Jonathan Osbourne

$ 3,000

Overseas Scott Cudby

PHD Charlotte Connell - 2015

Agriculture 2014 awards withdrawn

Overseas

15,300

2,000

Total

4,000

PHD

Total

6,000

3,000

$ (3,000)

Agriculture

Whatarangi Rewi Peehi

3,000

Total

3,000

Total

194,655

Ä&#x20AC;TIHAU WHANGANUI

INCORPORATION FINANCIAL STATEMENTS for the year ended 30 June 2015 INCORPORATION FINANCIAL STATEMENTS CONTENTS 28

Shareholders and Committee of Management Information

Statement of Financial Performance

Statement of Movements in Equity

Statement of Financial Position

Statement of Cashflows

Notes to the Financial Statements

Auditor's Report

Ä&#x20AC;TIHAU WHANGANUI INCORPORATION SHAREHOLDING AND COMMITTEE OF MANAGEMENT DISCLOSURES FOR THE YEAR ENDED 30 JUNE 2015 No. of Shareholders No. of Shares Held Shareholding Information Greater than 5,000 shares 12 0.15% 111,973.40 8.91% Between 1,000 and 5,000 shares 240 2.85% 458,476.54 36.49% Between 500 and 1,000 shares 309 3.70% 215,669.83 17.16% Between 100 and 500 shares 1,426 16.98% 340,109.82 27.07% Between 5 and 100 shares 3,867 46.06% 125,926.75 10.02% Between 1 and 5 shares 1,455 17.33% 3,936.77 0.32% Under 1 share 1,086 12.93% 435.89 0.03% Totals 8,395 100.00% 1,256,529.00 100.00% Committee of Management Shareholding CoM members have the following shares in the Incorporation registered in their names as at 30 Sept 2015. Che Wilson Don Robinson Jim Edmonds Mavis Mullins (Chairperson) Te Tiwha Puketapu Toni Waho Whatarangi Murphy-Peehi

1,217.74 1,000.00 1,274.28 2,640.76

This schedule does not include shareholdings registered in the name of Trusts of which a CoM member may be a beneficiary Committee of Management Attendance of Meetings There were 11 monthly and 1 special meeting of the Committee during the year ending 30 June 2015. Member's attendance was as follows: Ordinary Special Che Wilson 10 1 Don Robinson 9 1 Jim Edmonds 9 1 Mavis Mullins (Chairperson) 10 1 Te Tiwha Puketapu 10 1 Toni Waho 10 1 Whatarangi Murphy-Peehi 10 1 Committee of Management Remuneration Members were paid fees and travel allowances during the financial year ended 30 June 2015. Che Wilson Don Robinson Jim Edmonds Mavis Mullins (Chairperson) Te Tiwha Puketapu Toni Waho Whatarangi Murphy-Peehi

Fees Travel Comments $ $ 25,000 549 25,000 - Fuel card provided 25,000 2,696 45,000 - Vehicle provided 25,000 1,980 25,000 661 25,000 419

Ä&#x20AC;TIHAU WHANGANUI INCORPORATION STATEMENT OF FINANCIAL PERFORMANCE FOR THE YEAR ENDED 30 JUNE 2015

Income was received from the following sources: Gross Revenue from Farming Operations Livestock Purchases Change in Livestock Numbers Gross Farm Income

Notes 2

2015 $ 18,174,290 (1,138,759) (266,569)

Farm Expenses Net Farm Income / (Loss) Other Income: Rent from Properties Surplus / (deficit) from sale of emission units Interest and Dividends Gain on Disposal of Assets Apiary Other income

75,394 (15,581) 76,872 50,689 519,854 47,674

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

311,373 28,620 553,495 235,352 99,208 274,730

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

Less Non Cash Items: Depreciation Loss on Disposal of Assets

3,478,062 10,886

Net Operating Surplus / (Deficit) Revaluation of Shares in listed companies Provision for Storm Damage Share of Net Surplus/(Deficit) of Associates: Papahau Forestry Partnership Te Hou Limited Partnership

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

2015 $

2014 $

16,768,962

17,530,292 (497,469) 49,424 17,082,247

(11,860,903) 4,908,058

(11,941,610) 5,140,637

754,902 5,662,960

54,946 710,483 8,135 16,028 253,457 42,695 1,085,743 6,226,380

1,502,778 4,160,182

405,286 34,670 429,012 395,754 42,230 241,804 1,548,756 4,677,625

1,886,784 2,273,398

1,655,659 3,021,966

3,488,948 (1,215,550)

3,532,580 149,080 3,681,661 (659,695)

(147,112) (438,491)

(210,072) -

(16,095) (677,224)

(21,973) (1,278,922)

(232,045)

(2,494,472)

(891,740)

$ (2,494,472)

$ (891,740)

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

ĀTIHAU WHANGANUI INCORPORATION STATEMENT OF MOVEMENTS IN EQUITY FOR THE YEAR ENDED 30 JUNE 2015

2015 2014 Notes $ $ Net surplus / (deficit) for the year Holding Gains / (losses) on revaluations: Land & Buildings Papahau Forestry Partnership Livestock Carbon Credits (NZUs) Other Distributions Scholarships Te Āti Hau Trust Distribution

(2,494,472)

(891,740)

5 11

(4,934,870) - 1,171,322 1,342,884

1,332,883 11,940 1,805,222 1,340,210

(6,200) (405,215)

(12,500) (410,000)

(5,326,551)

3,176,015

(753,917)

(6,080,468)

2,422,098

4&5

Total recognised revenues & expenses for the year Less Provision for Dividend

Total movement in equity for the year

Equity at beginning of year 130,260,431 127,838,080 Prior Year Adjustment & Tax Payments - 254 Equity at end of year

$ 124,179,963

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

$ 130,260,431

ĀTIHAU WHANGANUI INCORPORATION STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2015 2015 2014 Notes $ $ EQUITY 124,179,963 130,260,431 Represented by: CURRENT ASSETS Cash at Bank 814,504 29,717 Accounts Receivable 986,934 1,245,667 Work in Progress - Buildings - 63,414 Te Āti Hau Trust 16 - 607,590 Stock on Hand Livestock 27,677,741 26,772,989 Stock Feed on Hand 617,219 818,559 Carbon Credits on Hand - ERU's 11 - 55,271 Total Current Assets

30,096,399

29,593,209

CURRENT LIABILITIES Term Loans due within 12 Months 13 8,850,000 8,900,000 Employee Entitlements 211,219 253,751 Accounts Payable 1,104,469 806,114 Accrued Expenses 32,195 149,553 Provisions 6 1,232,402 793,910 GST 270,089 372,800 Total Current Liabilities 11,700,374 11,276,128 WORKING CAPITAL 18,396,024

18,317,081

NON-CURRENT ASSETS Property, Plant & Equipment 3 119,804,126 126,327,781 Investments 8 8,169,524 8,955,164 Intangible Assets 11 2,687,026 1,344,142 Total Non-Current Assets 130,660,676 136,627,087 NON-CURRENT LIABILITIES Term Loans 13 20,962,967 20,962,967 Unclaimed Dividends 12 1,847,104 1,654,104 Te Hou LP Deferred Capital Contribution 9 2,066,666 2,066,666 Total Non-Current Liabilities 24,876,737 24,683,737 NET ASSETS $ 124,179,963 $ 130,260,431 Ātihau Whanganui's Committee of Management authorised the financial statements for issue on 30 October 2015. Signed for and on behalf of the Committee

Mavis Mullins Chairperson 30 October 2015

Whatarangi Murphy-Peehi Chairman of the Audit and Risk Committee 30 October 2015

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

ĀTIHAU WHANGANUI INCORPORATION STATEMENT OF CASHFLOWS FOR THE YEAR ENDED 30 JUNE 2015 Notes Cash flows from operating activities

2015 $

2014 $

Gross Receipts from Farm Production 18,892,893 17,368,165 Other Income receipted from Stations 179,664 277,002 Other Income 347,344 1,077,815 Interest & Dividends Received 70,998 6,830 19,490,900 18,729,812 Cash was applied to Livestock Purchases (1,397,486) (470,695) Payments to Farm Suppliers (9,052,520) (10,047,775) Payments to Employees (2,708,365) (2,780,461) Administration & Governance Costs (1,411,539) (1,606,753) Interest Paid (1,892,118) (1,647,786) Taxation Receipts 1,304 6,070 (16,460,724) (16,547,400) Net Cash from / (used in) operating activities

3,030,176

Cash flows from investing activities Proceeds from sale of property, plant and equipment Cash was applied to Acquisition of property, plant and equipment Purchase of Investments Papahau Forestry Expenses

136,864

2,182,412

65,317

(1,986,449) (1,864,199) (42,131) (4,763,094) (12,867) (12,862)

Net cash from / (used in) investing activities

(1,904,583) (6,574,838)

Cash flows from financing activities Bank Advances - 5,662,967 Repayment of Advances to Te Āti Hau Trust 607,590 980,000 Cash was applied to Repayment of Seasonal Advance from Bank Distribution to Shareholders Te Āti Hau Trust Payments Advances to Te Āti Hau Trust Scholarships Paid Net cash from / (used in) financing activities

(50,000) (493,180) (405,215) - - (340,806)

(624,576) (450,000) (300,202) (12,500) 5,255,689

Change in Bank Balances

784,787

863,263

Add Opening Bank Balances

29,717

(833,546)

Closing Bank Balance

$ 814,504

$ 29,717

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

ĀTIHAU WHANGANUI INCORPORATION NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2015 1. Statement of Accounting Policies Reporting Entity Ātihau Whanganui Incorporation is a Māori Incorporation incorporated under the Te Ture Whenua Māori Act 1993 and prepares general purpose financial statements in accordance with generally accepted accounting practice in New Zealand.

stored in the specified area reduces. NZUs are initially recognised at cost. Units held at year end are valued at market value. If the obligation to return units arises this obligation is recognised on the Statement of Financial Position. Net proceeds relating to trading of NZUs are reflected in the Statement of Financial Performance. c) Investment in Shares

The Incorporation qualifies for differential reporting as it is not publicly accountable and is not large in terms of the criteria set out in the Differential Reporting Framework. The Incorporation has taken advantage of all differential reporting concessions available to it except that some additional disclosures have been made. An unaudited Statement of Cash Flows is provided for information purposes.

Investments held at Trading Banks are stated at cost. Where shares are on the unlisted or listed stock exchange they are valued at market value. Other shares are reflected at the lower of cost or net realisable value (all currently at cost).

Measurement Base

Associates are entities over which the Incorporation has significant influence but not control. Investments in Associates are accounted for in the financial statements using the equity method of accounting after initially being recognised at cost. Shares of Associate Surplus or Deficits are recognised in the Statement of Financial Performance.

Unless otherwise stated the accounting principles recognised as appropriate for the measurement and reporting of earnings and financial position on an historical cost basis have been followed by the entity. SPECIFIC ACCOUNTING POLICIES The following specific accounting policies which materially affect the measurement of profit and financial position have been applied. a) Accounts Receivable Accounts Receivable are recorded at estimated net realisable value. b) Emissions Trading Scheme Pre-1990 Forest Land The Incorporation land contains pre-1990 forest land subject to the provisions of the NZ emissions trading scheme (“ETS”). If the land is deforested a deforestation penalty arises. The deforestation liability is not recognised as a liability as there is no current intention to change the land use subject to the ETS. The Crown has allocated emission units (“NZUs”) to the Incorporation as compensation. These NZUs are recognised at date of entitlement at cost and the balance of units held at year end are revalued to market value. Post-1989 Forest Land

d) Investment in Associates

e) Livestock on hand Livestock is recorded at market value as assessed by a livestock valuer, except for purchased breeding bulls which are reflected at cost. Herd values are used for tax calculation purposes. f) Stock Feed on hand Stock feed is valued at cost. Cost is based on a firstin first-out basis and includes expenditure incurred in acquiring the feed and bringing it to its present condition. g) Property, Plant and Equipment Freehold land has been revalued to the latest Rateable Valuation. Leasehold Land is shown at estimated lessor’s interest. Revaluation (not depreciated) to rateable value is required under the Te Ture Whenua Māori Act 1993 and is a departure from FRS-3 Accounting for Property, Plant & Equipment. Property, plant and equipment other than land and buildings are stated at original cost price less accumulated depreciation.

The Incorporation chose to enter the ETS for post-1989 forest land and earns NZUs as forests grow and carbon is stored in the forest from a 2008 baseline. NZUs are required to be returned to the Crown if the carbon

ĀTIHAU WHANGANUI INCORPORATION NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2015 h) Depreciation

k) Goods and Services Tax

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

The financial statements have been prepared on a GST exclusive basis except for accounts receivable, accounts payable, and accruals which are stated inclusive of GST.

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

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

To 0%

SL DV DV DV DV

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

DV DV SL DV DV DV DV

i) Development Expenditure & Amortisation Development expenditure are improvements carried out on the Incorporation’s farming properties over and above normal maintenance in order to generate future economic benefits. This capital expenditure is amortised over its estimated useful life. An adjustment is made for taxation purposes. j) Taxation The Incorporation is registered as a Maori Authority for income tax purposes. Income tax is accounted for under the taxes payable method.

I) Resumption of Leases When leases over Ātihau Whanganui land (vested by the Māori Land Court) cease, the Incorporation can regain the use of the land by paying 2/3rds of the value of capital improvements made on that land. Any revaluation of leasehold land is reversed upon resumption. Such land is then reclassified as freehold land and revalued to the most recent rateable valuation in accordance with the accounting policy. m) Unclaimed Dividends Unclaimed dividends are shown as non-current liabilities. CHANGES IN ACCOUNTING POLICIES There have been no changes in accounting policies and all policies have been applied on bases consistent with those used in previous years.

ĀTIHAU WHANGANUI INCORPORATION NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2015 2. Total Operating Revenue The total operating revenue of the Incorporation was $ 18,962,042 (2014: $18,636,649).

3. Property, Plant & Equipment AS AT 30 JUNE 2015 Class

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

Cost or Revaluation $ 87,119,700 7,871,400 4,934,360 13,454,885 608,901 1,931,916 1,999,766 425,361 19,904,533 138,250,822

Depreciation/ Amortisation $ 57,612 45,307 10,536 131,511 250,744 16,338 2,966,014 3,478,062

Accumulated Depreciation $ 719,288 1,788,945 130,117 1,235,265 901,218 260,798 13,411,066 18,446,697

Book Value $ 87,119,700 7,871,400 4,215,072 11,665,940 478,784 696,651 1,098,548 164,563 6,493,467 119,804,125

Cost or Revaluation $ 91,216,700 8,133,400 4,885,256 13,923,198 571,856 1,762,706 1,751,513 331,295 18,965.628 141,541,552

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

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

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

AS AT 30 JUNE 2014 Class Freehold Land (at valuation) Leasehold Land (at valuation) Improvements Buildings Bridges Plant & Machinery Motor Vehicles Furniture & Fittings Development (amortised) TOTAL

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

4. Valuations 2015 2014 $ $ Land Leased Out - Rateable Value (Unimproved Value) 7,871,400 8,133,400 Station Properties - Rateable Value (Capital Value) 102,537,000 107,967,500 Sub Total 110,408,400 116,100,900 Livestock on Station Properties (Market Value) 27,677,741 26,772,989 TOTAL VALUED ASSETS 138,086,141 142,873,889 The Rateable Value (Capital Value) of Land Leased Out is $9,219,900. The forestry held in Papahau Forestry Partnership is revalued by a registered forestry consultant every three years, with the last valuation occurring on 30 June 2011. As at that date the Incorporation’s 50% share in the forestry was valued at $767,374. 35

Ä&#x20AC;TIHAU WHANGANUI INCORPORATION NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2015 5. Equity 2015 2014 $ $ Capital & Retained Earnings relating to prior to June 2004 Opening balance at beginning of year 10,980,338 11,734,255 Dividends for the year (753,917) (753,917) Closing balance at year end 10,226,421 10,980,338 There are 1,256,529 shares (2014: 1,256,529) Capital Reserves Opening balance at beginning of year Movement for the year Closing balance at year end

22,489,376 - 22,489,376

Land Revaluation Reserve Opening balance at beginning of year Movement for the year Closing balance at year end

84,543,173 (4,934,870) 79,608,303

83,210,290 1,332,883 84,543,173

Share Revaluation Reserve Opening balance at beginning of year Movement for the year Closing balance at year end

1,698,788 1,195,772 2,894,560

578,683 1,120,105 1,698,788

Livestock Revaluation Reserve Opening balance at beginning of year Movement for the year Closing balance at year end

11,189,466 1,171,322 12,360,788

9,384,244 1,805,222 11,189,466

Retained Earnings / (accumulated losses) after 1 July 2004 Opening balance at beginning of year Surplus / (deficit) for the year & Prior year adjustments Distribution to Scholarships & Te Ä&#x20AC;ti Hau Trust Closing balance at year esnd

(640,709) (2,347,362) (411,415) (3,399,486)

441,232 (659,441) (422,500) (640,709)

Total Equity

$ 124,179,963 $ 130,260,432

Ä&#x20AC;TIHAU WHANGANUI INCORPORATION NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2015 6. Provisions 2015 2014 $ $ Provision for Dividend:- 60c per share (2014: 60c per share) 753,917 753,917 Provision for Storm Damage 438,492 Provision for future Forestry Expenses 39,993 39,993 Total Provisions $1,232,401 $ 793,910

7. Committee of Management Fees The Chairperson of the Committee of Management is paid $45,000 per annum and other committee members are each paid $25,000 per annum. 2015 2014 $ $ Committee of Management Remuneration 195,000 195,000

8. Investments 2015 2015 2014 2014 Qty $ Qty $ Shares Ravensdown 500,000 500,000 500,000 500,000 Fonterra Co-operative Group 145,842 700,041 180,945 805,395 Other share investments - 18,122 - 17,802 Total Share Investments 1,218,163 1,323,196 Investments in Associates Basis Ownership Ownership & Voting & Voting Papahau Forestry Partnership (Valuation) 50% 799,107 50% 802,335 Te Hou Ltd Partnership (Cost) 33.33% 6,152,253 33.33% 6,829,633 Te Hou GP Ltd (Cost) 33.33% - 33.33% Total Investments in Associates 6,951,360 7,631,968 Total Investments 8,169,523 8,955,164

ĀTIHAU WHANGANUI INCORPORATION NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2015 9. Investment in Te Hou Limited Partnership On 26 May 2014 the Incorporation entered into Te Hou Limited Partnership with Ngāti Apa Developments Ltd and Waitatapia Station Ltd. The investment is in a fully operating 1100 ha mixed arable, dairy and dry stock operation including 200ha in pine forestry.

A capital contribution of $4,762,967 was paid on signing. Further capital contributions of $500,000 and $1,566,666 are due for payment on 20 March 2019 and 20 May 2019 respectively. Development Capital Contributions are expected to be payable contingent on the cash requirements of the limited partnership. Indicative amounts are as follows: Year Capital Development Capital Contribution Contribution $ $ 2014 4,762,967 2016 - 918,241 2017 - 381,788 2018 - 272,710 2019 2,066,666 Total

$ 6,829,633

$ 1,572,739

The AWHI share of Te Hou Net Surplus or Deficit is accounted for in the Statement of Financial Performance.

10. Investment in Associates 2015 2014 $ $ Carrying value at beginning of Year 7,631,968 799,505 Share of net deficit and Tax paid (693,475) (21,973) Capital contributions during the year 12,867 6,854,436 Carrying value at end of Year $6,951,360 $7,631,968

ĀTIHAU WHANGANUI INCORPORATION NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2015 11. Emissions Trading Units The Incorporation has entered into the Emissions Trading Scheme with respect to pre-1990 and post-1989 forest land. Revenue from sales of NZUs are recognised in the Statement of Financial Performance. The Kyoto units (ie Emission Reduction Units or ‘ERUs’) were sold during the year. NZUs Balance at beginning of year Crown allocation during year Sold during year Balance at year end

Pre-1990 Nos

Post-1989 Nos

Total Nos

23,700 - - 23,700

316,589 86,223 - 402,812

340,289 86,223 426,512

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

425,165 (425,165) -

Value of Carbon Credit Assets held at year end 2015 2014 Units Units NZU's - Non current Asset 426,512 340,289 ERU's - Current Asset - 425,165 Total

2015 2014 $ $ 2,687,026 1,344,142 - 55,271 $2,687,026 $1,399,413

At 13 Oct 2015, indicative market price of NZUs is $6.75 ea. Carbon Account Record The unit balance of the Carbon Account Record represents the total number of units which have to be surrendered when land is withdrawn from the ETS. The Incorporation consider these to be Contingent Liabilities of the Incorporation dependent on management decisions regarding land use. Carbon Accounting Record Obligation 2008 to 2014 Exotic Allocation Indigenous Carbon Accounting Areas Total exposure at market value

2015 Units 108,093 490,848 598,941

2014 Units 90,460 422,258 512,718

2015 $ 680,986 3,092,342 3,773,328

2014 $ 357,317 1,667,919 2,025,236

ĀTIHAU WHANGANUI INCORPORATION NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2015 12. Unclaimed Dividends

2015 2014 $ $ Unclaimed Dividends at beginning of year 1,654,103 1,587,590 Dividends paid older than 1 year (63,589) (172,731) Unclaimed Dividends relating to prior year 256,591 239,244 Unclaimed Dividends at end of year $1,847,104 $1,654,103

13. Secured Borrowings The bank overdraft facilities and term loans are secured by a registered first mortgage over land contained in Certificate of Title WN7D/391 and a charge over all livestock owned by the Incorporation. Lender Principal Interest Rate Loan Expiry Dates $ From To From To BNZ loans due within 12 months 8,850,000 5.4% 6.6% 30 Jul 15 24 Nov 15 BNZ loans due after 12 months 20,962,967 5.5% 6.5% 29 Jul 16 20 Feb 20 Total Loans $ & Weighted AVG % $29,812,967 6.0% A loan of $4.8m due 28 May 2019 is a drawdown of a BNZ $8.4m loan facility which has been agreed for the purposes of the Te Hou Investment. A term loan totalling $5m maturing July 2015 has been refinanced until July 2020 (interest fixed at 5.53% until July 2018)

14. Taxation Losses 2015 2014 $ $ Tax losses available to offset against future income $12,674,224 $12,892,404

15. Māori Authority Credit Account 2015 2014 $ $ Māori Authority Credit Account balance at year end $369,079 $347,404

16. Related Party Information The Incorporation is the Settlor of, and makes annual grants to, Te Āti Hau Trust. Grants and distributions made are reflected in the Statement of Movements in Equity. Jim Edmonds is a Committee of Management member. Amounts totalling $23,100 were paid to him for contract fencing services (2014: $19,650). All related party transactions have been carried out on commercial terms and conditions and at market rates. No related party debts have been written off or forgiven during the period.

Ä&#x20AC;TIHAU WHANGANUI INCORPORATION NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2015 17. Capital Commitments Apart from the commitments noted above there are no capital commitments. (2014: Nil)

18. Contingent Liabilities Apart from the contingent liability for the Carbon Account Record as noted above there are no contingent liabilities which have not been recognised in the Statement of Financial Position. (2014: Nil)

19. Lease Commitments As at 30 June 2015 the Incorporation has no non cancellable operating lease commitments. (2014: Nil)

20. Reconciliation of Reported Surplus or Deficit to Cash from Operating Activities 2015 2015 2014 $ $ $ Reported Surplus/(Deficit) (2,451,072) (891,740) Adjustment for Non-Cash Items: Depreciation 3,478,062 3,532,580 Stock Movements 266,569 (49,424) 3,744,631 3,483,156 Adjustments for Investing Activities Items: Share Movements 147,112 210,072 Papahau Forestry 16,095 21,973 Te Hou Limited Partnership 633,824 Loss / (Gain) on Sales Assets (39,803) 133,053 757,228 365,098 Movement in Working Capital Accounts Receivable 263,302 (759,152) Accounts Payable 237,480 (317,522) Accrued Expenses 438,491 (82,738) Accrued Income - 150,313 Accrued Interest (5,334) 7,873 Income Received in Advance (48,609) 48,609 GST (102,711) 395,358 Income Tax (4,570) 4,766 Wool & Feed on Hand 201,340 (221,608) 979,389 (774,101) NET CASH FROM OPERATING ACTIVITIES 3,030,176 2,182,414

TE Ä&#x20AC;TI HAU TRUST

FINANCIAL STATEMENTS for the year ended 30 June 2015 TRUST FINANCIAL STATEMENT CONTENTS 43