Parininihi ki Waitotara Annual Report 2018

20 18 He Tangata He Whenua He Oranga Sustaining and Growing our People through Prosperity

OUR STORY At its heart our story is one of perseverance in the face of adversity. It is the story of people working together to create opportunity and a brighter future for their children.

It is about an intergenerational business that is seeking to continue the journey to: • Provide opportunity to our people • Exercise katiakitanga over our ancestral land • Protect and grow our assets for current and future generations PKW has evolved to be an innovative and positive force in the Maori economy of Taranaki. Our commitment to delivering sustainable returns to our people ensures we continue to be a successful and sustainable business.

This Annual Report is a celebration of our journey to date as we look to illustrate to our shareholders the stories behind the numbers.

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

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

OUR VISION He Tangata, He Whenua, He Oranga – Sustaining and Growing our People through Prosperity.

OUR MISSION A successfully diversified and sustainable Taranaki Māori-owned and operated business providing meaningful opportunity to its people.

OUR VALUES REFLECT • Manaakitanga Care for our present and future generations • Kaitiakitanga Commitment to leadership • Whakapono Adherence to our tikanga and belief in our future • Whanaungatanga / Kotahitanga Belief in collective action with trusted relationships

CONTENTS PARININIHI KI WAITOTARA INCORPORATION Te Pūrongo a te Heamana Chair report Te Pūrongo a te Tumu Whakarae

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Chief Executive Officer report

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Group Performance at a glance

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Committee of Management

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Executive Leadership Team

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Putting the Diversification Plan into action

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Bringing strategic focus to PKW's kaitiaki role

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PARININIHI KI WAITOTARA INCORPORATION ANNUAL FINANCIAL STATEMENTS Contents

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Auditor report

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Committee’s annual report

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Statement of comprehensive income

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Statement of financial position

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Statement of changes in equity

42

Statement of cash flows

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Notes to the financial statements

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PARININIHI KI WAITOTARA TRUST Te Pūrongo a te Heamana

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Chair report

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Ngā Kaiwhiwhi Tautoko. Scholarships and grants

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PARININIHI KI WAITOTARA TRUST ANNUAL FINANCIAL STATEMENTS Contents

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Auditor report

85

Entity information

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Statement of service performance

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Statement of financial performance 90 Statement of financial position 91 Statement of cash flows

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Statement of accounting policies 93 Notes to the performance report

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Cover: Betty Anderson is a PKW shareholder who contributed to the kōrero which aided the development of the Incorporation's Kaitiakitanga Strategy, to give a clear focus for its role of protecting and nurturing the whenua for generations to come.

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PARININIHI KI WAITOTARA INCORPORATION

TE PŪRONGO A TE HEAMANA HINERANGI RAUMATI-TU'UA

Tū mai rā e koro, e te maunga tītōhea. Kua rewaina rā te pōkēao ki runga i a koe, hei tohu o ngā mate huhua kua whetūrangitia. Haere ngā mate ki te okiokinga, haere atu rā. Tēnā tātou, ngā waihotanga o rātou mā, ko tātou rā te whakatutukitanga i ā rātou wawata.

Kua tipu iho rā ngā aka o Parininihi ki Waitotara kia tū pakari a ia i runga i tōna māia, i tōna manawa piharau mo te painga o ōna whānau.

Nō reira, tēnā koutou, tēnā koutou, tēnā tātou katoa.

Hei Heamana o te Kōmiti Whakahaere mō te Kōporeihana mō Parininihi ki Waitotara, ā, hei māngai mā rātou hoki, ka hari koa ahau ki te hora i te pūrongo ā-tau mō te whakahaerenga mō te tau pūtea ka tīmata i te 1 o Hōngongoi 2017, ā, ka mutu i te 30 o Pipiri 2018.

I tēnei tau kua kite tātou i te nui o te tupu i roto i tō tātou rōpū whakahaere me te ahunga whakamua tūturu ki ā tātou putanga rautaki. Kei te whakaū he pūkenga, he uara hoki e matea ana kia eke te pakihi ki ngā taumata, ā, ka haere tonu tā tātou whakapai i te hanganga mahi. Ka tautoko ā mātou mahi katoa i tō tātou wawata kia tū hei kaitāpae ārahi, hei kai whakaāhei i roto i ngā tikanga i ngā mahi pakihi tiaki taiao, ina whakapai tonu i te mahi a te pakihi, i te whakarato hua tūturu ki ō tātou kaiwhaipānga.

Ka whakaatu ā tātou otinga ahumoni i te tau taumaha i ā tātou tino mahinga pakihi ahuwhenua, ā, ka whakaatu hoki i te āhua māori o te piki me te heke ka whakaarohia ki tēnei rāngai. Me whakamaumahara tonu tātou anō i puta te huamoni nūnui i tērā tau nā te piki haere o te wāriu o ō tātou whenua nō muri mai i te tukanga arotake rīti ā-whitu tau i mahia i te mutunga o 2017, ā, ka whakaaturia noatia ngā mahi o te tau 'māori' i roto i ngā puka moni ka horahia i roto i tēnei pūrongo.

RAUTAKI

Ko tētehi tino arotahi o ā tātou mahi i ngā marama 12 ki te 18 kua pahure ko te kōkiri i tō tātou rautaki rerenga kē, ā, ka whakaaturia ngā hua pai kua puta mā te pānui i tā PKW takohanga ki te pūtea whakangao tōtika Te Pūia Tāpapa.

He mea whakaihiihi tā tātou whai wāhi ki tēnei kaupapa ka mahi

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ki te taha o ō tātou tāngata kitea ai ngā huarahi kia mahi tahi ai mō te kōkiri i ā tātou aronga katoa…"

ngātahi ai ētehi hinonga Māori kē ka whakaāhei i a tātou ki te tautohu, ki te tautoko hoki i ngā whiringa whakangao nūnui e kore pea e taea rānei e tātou te whakaaweawe kia whakatūria. Nā te mea nā te Māori te pūtea, te mana whakahaere katoa hoki, ka kawea tonuhia e tātou ō tātou uara taiao, pāpori, ahurea, ōhanga hoki mā te whakahāngai i ērā ki ngā momo rangapū whakangao ka uru atu ai te pūtea.

Ko te hipanga matua tuatahi tēnei e whakatinana ai te tikanga whakahaere i ā mātou rawa haere ake nei. Waihoki ka whakaatu he mahea tō tātou tirohanga ki te ara rautaki e tika ana kia whakaū ai ka haere tonu tā te Kōporeihana whakarato i ngā hua whai take mō ā tātou kaiwhaipānga, mō ā rātou uri hoki.

Ko tō tātou āhei ki te hanga, ki te whakatū hoki i ētehi rangapū ka whakaaturia i te whakatūtanga o Tai hekenga, he kohinga rawa whakangao nā ngā iwi o Taranaki nā PKW hoki i tētehi whakaaetanga ka whakarato hua ki ngāi Māori o Taranaki i te wā roa.

Ka kōrero tonu mātou ki ō tātou tāngata ina kitea ai he whai angitu ki te mahi tahi mō te ahunga whakamua o ō tātou aronga katoa, ā, ka whakahau i a rātou ki te kimi i a mātou kitea ai e rātou hoki he kaupapa he kawenga rānei ka āhei tātou te mahi ngātahi hei whakatinana.

He wāhanga rautaki matua anō

ko te whakapiki i ā tātou mahi whakahaere ina kua eke ki ngā taumata, ka hāpai i ngā hātepe pūnaha kia whakapiki i te mahi whakaputa, i te whakarato otinga ka tau pai ki te puka taurite. Ko te whakapai i te toitūtanga taiao i ō tātou pāmu e ai ki tō tātou tūranga hei kaitiaki o ō tātou whenua.

Nā tēnei whāinga paeroa o te hāpai i te kaitiakitanga i ō tātou whenua tūpuna tētehi aronga rautaki hou i whakatū, e kawea ai tō tātou takohatanga ki tua atu i te ū noa. Kua kōrero kē ki ō tātou kaumātua, kaiwhaipānga hoki, iwi hoki i waho o te kaupapa mō ō rātou hiahia, ā, ka tiro whakamua au ki te rongo kōrero anō i ō tātou tāngata ki tā tātou Hui ā-Tau.

MANA ĀRAHITANGA

I whakaae te Kōmiti Whakahaere kia arotake i te hanganga mana ārahi kia whakaū ai ka āta arotahi atu ngā mema Poari ki ō tātou wāhanga rautaki matua motuhake.

I te mutunga iho ka whakatūria he hanganga Poari hou ka tiaki i tō te PKW Farm LP wāhanga o ngā aronga pakihi o te Kōporeihana.

Ka tū ki tēnei poari me ō tātou ringatohu motuhake, arā, ko Richard Krogh rāua ko Philip Luscombe, kia ū tonu te hāngai ki te Kōmiti Whakahaere o tēnei wā, me ētehi mema Poari kua kōwhiria nō te Kōmiti Whakahaere ka whakaatu i ngā pūkenga e hiahiatia ana. Kua tonoa he whakaputanga aronga, ā, ka whakarite mātou kia tū te ritenga

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HE TANGATAHE PARININIHI TANGATA KI PARININIHI WAITOTARA KI WAITOTARA INCORPORATION INCORPORATION - TE PŪRONGO - CHAIR'S A TE HEAMANA REPORT

" Ka haere tonu ā mātou kōrero

MIRIONA

HUAMONI TAPEKE, I MURI I TE TĀKE

hou i mua te mutunga o te tau maramataka.

Ka whai whakaaro tonu mātou ki te tauira Kōmiti Whakahaere o tēnei wā ki te whakapiki i te whakatutukinga pea o ā tātou whāinga rautaki rerenga kē mā te whakaū ka riro tonu i a tātou ngā pūkenga me ngā mōhiotanga e tika ana ki te tēpu mana ārahitanga.

I whakahaerehia he arotake motuhake hoki i ngā pūtea ka hoatu ki ngā ringatohu o PKW. Kua $250 mano te wāhanga ki te pūtea mō ngā mema KW o tēnei wā, ā, i ngā tau 10 kua pahure he pēnei te nui ka whakamahia mā tātou.

E ai ki tētahi aromatawai mākete motuhake i whakahaerehia ka hāngai he pikinga i te $250 mano o tēnei wā ka tohua mā te utu pūtea Poari ki te $350 mano ki ō ētehi atu hinonga āhua ōrite, nā reira ka horahia tēnei ki mua i te hunga kaiwhaipānga me te ngākau iti hei whakaarotanga hei whakaaetanga mā koutou.

I ngā kōwhiringa Kōmiti Whakahaere i te tau 2017 i whakatau ngā kaiwhaipānga i a Dion Tuuta, ā, i kopoua anōtia a Claire Nicholson rāua ko Taari Nicholas ki te tira mana ārahi. I nākuanei ka oti tā tātou hātepe kōwhiri Kōmiti Whakahaere, ā, i te mutunga iho i kopou anō i a Bev Gibson, i a mātou ko David Macleod ki ngā tūranga. Ka tiro whakamua mātou katoa ki te tautoko tonu, te kōkiri tonu hoki i ngā wawata o ngā kaiwhaipānga.

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" He tauira anō o te ahu whakamua tōrunga o te pakihi i roto i āna mahi te piki ake haere tonu haere tonu o ngā hua ka puta mā ō tātou kaiwhaipānga."

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TE TIRA MANA WHAKAHAERE

He mīharo te whai wheako me te āheinga o te tira whakahaere matua ki PKW mō tēnei hinonga iti a Taranaki.

Hui katoa, he kohinga pūkenga whakahirahira ō rātou, e taea ana te kī he āheitanga hangarau ā rātou, ā, ka hāngai ngā uara ki ō te Kōporeihana, ā, ka whakaatu rātou i te tirohanga ao Māori tūturu i tō rātou tū tangata mai, PKW mai hoki i ā rātou mahi.

Ka whakaaturia te eke ki ngā taumata o tō tātou pakihi i te pīrangi o ngā mātanga, pūkenga hoki pērā i a Warwick TauwhareGeorge, tō tātou Tumu Whakarae, a Joe Hanita (General Manager Finance and Investments), a Jacqui King (Head of Corporate Services), a Shane Miles (General Manager Ahuwhenua), a Mitchell Ritai (General Manager Shareholder Engagement) hoki kia hīkoi tahi i tēnei ara. He wā

piki heke tēnei wāhanga i te whakahoutanga o tēnei tira, engari nō te kopoutanga o Mitchell i te tīmatanga o tēnei tau ka hari koa ahau te whakamōhio atu kua oti tēnei tukanga ināianei.

AHUMONI

Kua pānuihia e te Kōporeihana o PKW i te huamoni unu tāke kia $4.9m mō tēnei Tau Pūtea (TP 16/17 #36.5m).

Kei roto i tēnei tau he $6.1m huamoni whakahaere moni (TP16/17 $9.3m) me te moni ngaro whānui i $1.2m i ngā pikinga haupū rawa, moni kore (TP16/17 he $27.2m te pikinga) nā te nui haere o te wāriu whenua i $0.7m (TP 16/17 $25.2m) me te heke i te wāriu o te hea Fonterra i $1.8m (TP 16/17 pikinga $1.7m).

He āhuatanga matua ko te kaha me te kīkino o te huarere ki Taranaki i tēnei wāhanga ka pā ki te otinga o te huamoni whakahaere moni, ahakoa i āhua

whakangāwarihia e te pikinga ohorere o te pūtea utu mīraka o Fonterra.

Ka whakaatu ēnei otinga i te hokinga ki te āhua o ia rā i te ahunga whakarunga nui i te wāriutanga o ō tātou putunga whenua i tērā tau pūtea me te āhua o ngā ōhanga ā-ao ka whakaaweawe i te mahi puta noa i te rāngai pakihi ahuwhenua. Ka tū māia tō tātou pakihi nā te mea e ahu whakamua tonu ana tātou me te hāpai tonu i ngā rahinga whakaputanga e taurite ana ki ngā nama ka puta i te mahinga nei. Me tika aua pae kia tika ai te whakahaere pāmu, ā, ka mihi au ki te tira whakahaere me ō tātou kaimahi e mahi whai hua ana ki tēnei āhuatanga.

He take rautaki matua te utu nama hei whakatutuki i ō tātou whāinga rerenga kē, ā, ka whakaaturia te pānga tōrunga ka puta i ngā whakataunga mana ārahitanga i te whakaheke nama whare pūtea i tēnei tau he $3.4m ki te $65.4m

(TP 16/17 $68.8m). He tohu tēnei o te hekenga i te ōwehenga nama ki ngā rawa katoa kia 20.6% (TP 16/17 21.7%). He āhuatanga tēnei ka whāia tonuhia e tātou kia whakaū ai ka whakamahia he kapewhiti whakahaere tōrunga kia ahu whakamua ai te pakihi i ōna whāinga rautaki.

Hei kōrero whānui, kua tipu te uaratanga tapeke o ō tātou kaiwhaipānga ki te $243.3 miriona i tēnei tau (TP16/17 $240m), he 1.4% te nui haere, ā, nā tērā ka marohitia e mātou he whakapiki i te pūtea tuku kia $1.30 mō ia hea (TP16/17 $1.25).

He tauira anō tēnei whakapikinga hua iti nei, iti nei ki ō tātou kaiwhaipānga haere tonu i ngā hua pai ka puta i te pakihi i āna mahi..

tautoko i tēnei tau. Ka mihi hoki au ki te pakari me te kaha o ō tātou kaimahi ahakoa ngā taumaha e haere tonu ana ki te whakatutuki i ngā hiahia o te pakihi. Hei whakakapinga māku, ka mihi hoki au ki ō tātou kaiwhaipānga mō tō rātou tautoko, manaaki hoki e haere tonu ana.

WHAKAKAPINGA

Mō te Kōmiti Whakahaere, ka mihi au ki te tira mana ārahi, ki tō tātou tira mana whakahaere me ō tātou hoa pakihi mō tō rātou

Mauri Ora Hinerangi Raumati-Tu’ua Heamana

HE TANGATAHE PARININIHI TANGATA KI PARININIHI WAITOTARA KI WAITOTARA INCORPORATION INCORPORATION - TE PŪRONGO - CHAIR'S A TE HEAMANA REPORT

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PARININIHI KI WAITOTARA INCORPORATION

CHAIR'S REPORT HINERANGI RAUMATI-TU'UA

Tū mai rā e koro, e te maunga tītōhea. Kua rewaina rā te pōkēao ki runga i a koe, hei tohu o ngā mate huhua kua whetūrangitia. Haere ngā mate ki te okiokinga, haere atu rā. Tēnā tātou, ngā waihotanga o rātou mā, ko tātou rā te whakatutukitanga i ā rātou wawata.

Kua tipu iho rā ngā aka o Parininihi ki Waitotara kia tū pakari a ia i runga i tōna māia, i tōna manawa piharau mo te painga o ōna whānau.

Nō reira, tēnā koutou, tēnā koutou, tēnā tātou katoa.

As Chair of the Committee of Management for Parininihi ki Waitotara Incorporation, and on their behalf, I am pleased to present the annual report on performance for the financial year beginning 1 July 2017 and ending 30 June 2018.

We have seen substantial growth within our organisation this year with clear progress towards our strategic outcomes. We are ensuring that our people have the skills and values needed to make the business a success and we continue to improve our operational infrastructure. All our efforts support our aspiration to be a lead contributor and enabler in environmentally sustainable business practice and activities, while improving business performance and delivering tangible benefits to our shareholders.

Our financial results reflect a year of challenges for our core

agribusiness operations and show the normal rise and fall pattern you would expect in this sector. It is useful to remind ourselves that last year’s bumper profit result was due to the improvement in our land value in the wake of the sevenyearly rent review process which took place in late 2017 and the accounts presented in this report are more reflective of a ‘normal’ year’s activities.

STRATEGY

Progressing our diversification strategy has been a major focus of our mahi over the past 12 to 18 months and the positive steps we have made in this direction have been demonstrated with the announcement of PKW’s commitment to the direct investment fund Te Pūia Tāpapa.

Our involvement in this partnership of many different Māori entities is exciting as it will enable us to identify and facilitate large-scale investment prospects that we

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would not otherwise have the leverage to initiate. The nature of the fund, being 100% Māori owned and controlled, means too that we will continue to implement our environmental, social, cultural and economic values by aligning them to the types of investment partnerships the fund enters into.

This is the first major step forward in realising the way we will manage our assets in the future. In addition it shows that we have a clear view of the strategic direction necessary to ensure the Incorporation continues to deliver meaningful results for our shareholders and their successors.

Our ability to forge and establish partnerships is also reflected in the creation of Tai Hekenga, a property investment portfolio shared by ngā iwi o Taranaki and PKW in an agreement that will deliver benefits to Taranaki Māori for the long term.

We will continue to kōrero with our people when we see opportunities to work together for the advancement of all our interests, and encourage them to seek us out when they too identify an initiative or undertaking that we can work in partnership to realise.

Optimising our operations is another key strategic area where we have made great strides, enhancing system processes in order to improve production performance and deliver results

that resonate on the balance sheet. A key element in this area has been improving the environmental sustainability of our farms in accordance with our role as kaitiaki of our whenua.

This long-term goal of exercising kaitiakitanga over our people’s ancestral lands has led to the adoption of a new strategic approach, which takes our commitment beyond that of mere compliance. We have already spoken with our kaumātua, shareholders and iwi outside the organisation about their expectations and I am looking forward to hearing more from our people at our Annual General Meeting.

GOVERNANCE

The Committee of Management (CoM) agreed that a governance model review was timely to ensure that the focus of our Board members could fall sharply on our separate key strategic areas. As a result, a new Board structure is being established that will oversee the PKW Farm LP aspect of the Incorporation’s business interests.

This Board will consist of our two independent directors, Richard Krogh and Philip Luscombe, to maintain consistency with the current CoM, along with two elected Board members from the CoM who demonstrate the skills required. Expressions of interest have been requested and we plan

PARININIHI KI WAITOTARA INCORPORATION - CHAIR'S REPORT

with our people when we see opportunities to work together for the advancement of all our interests..."

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MILLION NET PROFIT AFTER TAX

to have the new arrangement in place by the end of the calendar year.

We will also be giving further consideration to the current Committee of Management model to increase the probablity of achieving our strategic diversification goals, by ensuring we continue to have the appropiate skills and knowledge needed at the governance table.

HE TANGATA

" We will continue to kōrero

An independent review was also carried out into the fees paid to our PKW directors. The current fees allowance for CoM members has been $250k for about 10 years and we have made this work for us. An independent market assessment indicates that an increase from the current $250k set aside for Board remuneration to $350k would be in line with similar entities and so we respectfully put that forward for shareholder consideration and agreement.

At the 2017 Committee of Management (CoM) elections, shareholders welcomed Dion Tuuta and reappointed Claire Nicholson and Taari Nicholas to the governance team. Our recent 2018 CoM election process has been completed and resulted in the reappointments of Bev Gibson, David MacLeod and myself to renewed terms. We all look forward to continuing to serve and advance our shareholders’aspirations.

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" This continued incremental benefit to our shareholders is another example of the positive progress the business is making in its activities."

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EXECUTIVE LEADERSHIP TEAM

It has been a period of upheaval for us as the refresh of this team was taking place but Mitchellâ&#x20AC;&#x2122;s appointment earlier this year means I am happy to report that this process is now complete.

Collectively, they have an impressive range of skills, making them technically capable and a good values fit for the Incorporation, and they demonstrate a true MÄ ori world view in the way they present themselves and PKW in their work.

FINANCES

The wealth of experience and capability we have in the senior management team at PKW is exceptional for the modest Taranaki organisation we are.

The fact that people of the calibre of Warwick TauwhareGeorge, our CEO, Joe Hanita (General Manager Finance and Investments), Jacqui King (Head of Corporate Services), Shane Miles (General Manager Ahuwhenua) and Mitchell Ritai (General Manager Shareholder Engagement) want to be part of our journey reflects the progress we have made as a business.

PKW Incorporation has posted an after tax profit of $4.9m for this financial year (FY16/17 $36.5m).

This figure consists of a cash operating profit of $6.1m (FY16/17 $9.3m) and an overall loss of $1.2m in non-cash capital gains (FY16/17 gain $27.2m) made up of an increase in land value of $0.7m (FY16/17 $25.2m) and loss in the Fonterra shareholding value of $1.8m (FY16/17 gain $1.7m).

The severe and extreme weather conditions experienced in Taranaki this season were a major factor in the cash operating profit result, although they were mitigated to some extent by the unexpected increase in Fonterra milk price payment.

These results reflect a return to normality from the significant upward movement in our corpus land valuation last financial year and the global economics at play that influence performance across the agribusiness sector. We can be confident as a business that we are continuing to make progress with maintaining the balance between production levels and the costs incurred in the process.

Good farm management means getting those margins right and I wish to acknowledge the successful work the management team and our kaimahi are doing in this area.

Paying down debt is a key strategic driver to achieving our diversification goals and the reduction in bank debt this year by $3.4m to $65.4m (FY16/17 $68.8m) shows that governance decisions are having a positive effect. This represents a fall in the ratio of debt to total assets to 20.6% (FY16/17 21.7%). This is an area we will continue to pursue as we ensure

PARININIHI KI WAITOTARA INCORPORATION - CHAIR'S REPORT

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positive operating cash flow is used to progress the business in its strategic goals.

Overall, our shareholders net equity has grown to a figure of $243.3m this year (FY16/17 $240m), an increase of 1.4%, and we therefore recommend a dividend increase to $1.30 per share (FY16/17 $1.25).

ACKNOWLEDGEMENTS

On behalf of the Committee of Management, I would like to thank the executive leadership team, our governors and our business partners for the support they have shown us this year. I would like to acknowledge the resilience and effort that our kaimahi have shown in the face of continued challenges as they continue to

HE TANGATA

This continued incremental benefit to our shareholders is another example of the positive progress the business is making in its activities.

work to deliver on the expectations of the business. And, finally, I also thank our shareholders for their continued support and manaaki.

Mauri Ora Hinerangi Raumati-Tuâ&#x20AC;&#x2122;ua Chair

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PARININIHI KI WAITOTARA INCORPORATION

TE PŪRONGO A TE TUMU WHAKARAE WARWICK TAUWHARE-GEORGE

Taiāwhiowhio ana te rere o te hauora o ngā tūpuna.

Toitū te tangata, toitū te whenua, poupoua te oranga, mai Parininihi kei raro, ki Waitotara kei runga.

E te iti, e te rahi, te katoa. Tēnā koutou, tēnā koutou, tēnā tātou katoa.

E manawareka ana ahau ki te hora i tāku pūrongo mō te tira mana whakahaere mō te Kōporeihana o Parininihi ki Waitotara mō ā tātou mahi i te tau pūtea i mutu i te 30 o Pipiri 2018.

He tau tēnei i neke whakamua tātou ki ō tātou whāinga rautaki me te arotahi ki te whakaoti ngā mahi ā-ture e tika ana kia mahia hei whakaneke i ō tātou whāinga rerenga kē ki te wāhanga whakatinana. Kua kitea kētia ngā hua o aua mahi, ka whakamāramahia ki raro nei, ā, ka hiahia te whakapuaki kōrero anō i tēnei wāhanga hei ngā marama e tū mai ana.

He $4.9m (TP16/17 $36.5m) te huamoni i muri i te tāke i puta i te mutunga o te tau, ka whakaaturia te hoki ki ngā mahi pakihi māori nō muri i te pikinga wāriu o ō tātou kohinga whenua tōpū (TP16/17 $25.2) whai muri i te arotake rīti o ia whitu tau i whakahaerehia i tērā

tau. He taurite pai tēnei nama ki te $3.7m huamoni mutunga tau whai muri i te tango tāke i pūrongotia mō te tau pūtea 15/16. Ka whakaatu tēnei tauritenga e neke whakamua ana tā tātou pakihi, ka tautokona hoki ki te mana ārahitanga rautaki, mahea hoki, ka tautoko mā te whakamahere me te whakarere i te whakamahinga tika hoki.

MONI WHIWHI

E $3.5m te hekenga o te moni whiwhi rōpū tapeke ki te $25m (TP16/17 $28.5m). Nā ētehi āhuatanga nui tēnei: • Ka kaha pāngia te putanga mīraka e ngā āhua āhuarangi ka pā atu ki Ngā Pāmu PKW me te ua nui atu i te toharite i te wā o te makariri me te koanga, me te roa o te wā maroke ka whai atu. Nā tērā ka tau mai te tauraki i kaha pēhia ai te tupu o te karaihe.

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• I te tau pūtea i mua, he tōrunga te pā mai a te $4m pikinga wāriu tautika i te wāriu kararehe. I tēnei tau he māmā te $1.2m pikinga nā tēnei ka puta te moni whiwhi kararehe he $2.8m te rerekētanga i waenga i ngā tau e rua.

• I tēnei tau i puta ētehi āhuatanga e hāngai ana ki te moni whiwhi mō te wāhanga hopunga kōura ā-tau (arā, ko te ACE). Ka pāngia tohuhia te tau pūtea nei e te hekenga utu o te mākete i te Huitanguru 2017, whakatauria ai ngā wāriu rīhi ACE kia 12.5% i raro i ō i mua. I whakahekea te

Farm 21, Waverley Beach Road.

rōrahi ACE i te 8,842kk, ā, ka whakahāngai ngā wāhanga utu hauwhā tau, ka whakaputaina ai te utu nama ACE tāpiri i te tau pūtea 2016/17, kua pā tōraro hoki ki ngā moni whiwhi kua tae mai.

• Ka āhua memehatia ēnei āhuatanga e te $.05 pikinga i te moni whiwhi rīti tōpū, me te hua moni pai ake i ā tātou whakangao kōura.

MIRIONA MONI WHIWHI TAPEKE

whakaneke i te rautaki rerenga kē, ā, ki te whakatika i ētehi take taonga tuku iho e toe ana.

WHAKAPAUNGA AHUMONI

Ka whakaatu te nama ahumoni pai ake o $2.7m (TP16/17 $2.9m) i tētehi utu nama i mahia i te Whiringa-ā-rangi 2017, i te kaupapa whakahaere moni pai ake hoki. Ka noho tonu ēnei wāhanga e rua hei mea arotahi haere ake nei kia whakaheke tonu te haere.

WHAKAPAUNGA Ā-RŌPŪ

Ka āhua ū te whakapaunga ā-rōpū i $15.7m ki ō tērā tau (TP16/17 15.6m) nā te arotahi o te kaiwhakahaere ki te aroturuki nama ki te pakihi pāmu, ka whakapaetia ai ka heke haere te moni whiwhi.

Tae atu tēnei tau/whika/nama ki ngā nama tāpiri i puta i te whakatū i te hanganga tīma whakamahi hou i roto i te Kōporeihana, i te whakangao whakamua hei

TIROHANGA WHAKAMAHI

Whenua Ko te tau tuatahi tēnei ka rongo i te painga katoa o te pikinga rerenga rīti, ina he $0.5m te pikinga mai i tērā tau ki te $7.2m (TP16/17 $6.7m). He pikinga māmā hoki i te wāriu pupuritanga whenua tōpū ki te $177.5m (TP16/17 $177m).

Nā PKW tētehi whenua nui i hoko

HE TANGATA

I whakaputaina te 2,465m i ia kkMM, he 11% te hekenga (TP16/17 2,759m kkMM) i ō tērā tau. I paku memehatia te hekenga nei e te pikinga o te utu mīraka ka $6.75 i ia kkMM (TP16/17 $6.15 i ia kkMM) ka tae ki te $12.3m (TP16/17 $13.1m) whiwhinga pūtea..

$25.0

PARININIHI HE TANGATA KI WAITOTARA PARININIHI INCORPORATION KI WAITOTARA - TE PŪRONGO INCORPORATION A TE TUMU - CEO WHAKARAE REPORT

" He tau tēnei ka kitea ai e ahu whakamua ana ki ō tātou whāinga rautaki…"

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mai i tēnei tau, kia whakareatia kia rua te rahinga o te whenua i mōhiotia ai ko Farm 2 i Ohāngai ki Taranaki ki te Tonga. He kaupapa me whakanui te whakahokitanga mai o te whenua tupuna ki raro i tō tātou mana whakahaere. Ki tēnei tūāhuatanga tonu ka kite tātou i te painga i ngā taumata whakaputanga i tēnei wā tonu, me te herenga kore kia whakangao nūnui ki te taha hanganga nā te āhei ki te hono i ēnei whenua ki raro i te mana whakahaere o tētehi rohenga whenua kua tū kē.

te Kōporeihana te tautohu me te whakatinana whai angitu heipū kia whakarahia tō tātou kohinga whenua tōpū.

Nā te hokonga mai i whai mea angitu tātou kia eke ki tētehi taumata nui i te hītori o PKW, kia tapa ingoa hou ki te pāmu i te taha o te whānau o Meremere Marae. Ka hāngai tēnei ki ō tātou uara matua, arā, ko te Manaakitanga, te Kaitiakitanga, te Whakapono, te Kotahitanga, me te Whanaungatanga. Nō PKW tonu te whiwhi i te tukunga mai o te ingoa Te Ruru i te takinga kawa i whakahuingia ai te hapori. Ka tiro whakamua tātou ki te manaaki ki te whakatupu hoki i ēnei hononga haere ake nei.

I heke te moni whiwhi pūru hoki ki te $2.44m (TP16/17 $2.89m) nā te pupuri tonu i ngā kararehe tāpiri i te mutunga tau tōna tikanga ka hokona noatia atu.

Engari i te pikinga o te mākete, ka whakatinanahia tēnei moni whiwhi ki ētehi pūrongo ā taihoa ake nei, hei painga mā tātou.

He arotahi rautaki haere tonu o

Ahuwhenua Ko te huarere o tēnei tau kāore i pēnei te kitea i ngā tau rima tekau neke atu, ā, he taumaha te pānga atu ki ngā taumata whakaputa , i 2,465 kkMM i whakaputaina ki te 2,811m kkMM i whakaritea ā-pūtea. Nā tēnei i heke te moni whiwhi ki te $12.3m (TP16/17 $13.1m).

Nā te hekenga nui o te wāriu hea Fonterra i te mutunga o te tau i $0.56 i ia hea te āhuatanga te whakataumaha, ā, ko ngā otinga whānui o PKW Farms LP kua kitea he $3.4m te moni ngaro i muri i te tāke (TP16/17 he $2.5m te piki).

Ahakoa he taumaha te āhua o ā tātou whakahaere pāmu, kua whakamahi tonu ētehi kaupapa tāhua moni tōpū kia whakapai pūnaha ā-pāmu, whakahounga hangarau hoki e whakahekea ai ngā nama whakapikia ai te whakaputanga hei ngā tau e haere mai nei.

Kāore i eke ki tua ngā whakapae nama, ahakoa te whakatau me whakangao ki te mahi whakatika, whakahaere tonu hoki, ahakoa te piki o ngā herenga kai nō rāwāhi nā te kino o te huarere.

He tohu tēnei o te kounga o te tira whakahaere Ahuwhenua, o tā tātou aronga whakamahere pakari me te urupare o ō tātou kaimahi ki te tūāhua. Ka mihi au ki ō tātou kaipāmu i roto i te tau uaua nei, ki te māia o te hunga kaipāmu he kaha ka kitea tonuhia.

Nā te pikinga o te utu mīraka ki te $6.75 i ia kkMM (TP16/17 $6.15 i ia kkMM) te oranga o te rerenga moni whiwhi ka āwhina i te whakamāmā i ngā ngarotanga moni.

Kōura Ahakoa te pānga rearua o ngā wāriu me te maha o ngā rīti ACE,

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I piki ake te whiwhinga wāhanga huamoni PKW i te rangapū i ā tērā tau ki te $980k (TP 16/17 $954K) tae atu ki te rīti i ngā rawa ahu mahi whakatika ka piki ki te $263k (TP16/17 $210 mano).

Ka haere tonu te mahi a PKW i roto i PNF kia haria mai ētehi anō hoa rangapū, kia whakanui ake i te whakaaweawe o te tōpū ki te ratonga mākete. He āhuatanga arotahi anō te piki haere o te wāriu i te raupapa hoatutanga mā te hanga hononga ki ngā kiritaki mutunga ka hīkina ai te mahinga o te pakihi.

WHAKAKAO KĒ ATU ANŌ

Rawa Ahumoni He 1.7% o ngā rawa o te Kōporeihana ngā rawa ahumoni a PKW, ā, he hiranga tonu tēnei wāhanga o te kohinga whakangao whānui. Ka puta te $0.23m whiwhinga pūtea ka rite ana ki ā tērā tau i ngā rawa i Miranda Tiriti ki Whakaahurangi; i Kuīni Tiriti ki Waitara; i Powderham Tiriti ki

Ngāmotu, me tētehi wāhanga o 35 Leach Tiriti Ngāmotu.

Kua oti ngā mahi ā-ture e tika ana e pā ana ki te Tai Hekenga, ā, i tēnei tau pūtea ka rite te tiki atu i te takohanga $2m.

Ka wātea mai tēnei ara whakangao rawa nā te mahi tahi a PKW ki te taha o te Port Nicholson Settlement Trust, o Ngā Iwi o Taranaki whānui anō hoki, kia aro atu ai ki tētehi tono ki te hoko i ngā tika rīhi tūāpapa o ētehi whare Kāwanatanga ki te pū o Pōneke.

Mā ēnei rangapū rautaki pēnei ka taea e tātou te whakawhanake ake i ō tātou uara matua kia whakaputahia ai te rerenga kē waiwai ki tā tātou pakihi, e whakangāwari ai te pēhi i ngā momo moni whiwhi takitahi.

Te Pūia Tāpapa Mā te whakarewa i tēnei pūtea whakangao hou, ka tāpaea ai te $2m e PKW ki roto ka whakatinanahia ai hei ngā tau kei te tū mai (inā he $15 mano te wāhanga tuatahi i tēnei tau pūtea). Nā tēnei he maha ngā ara ka wātea mai i roto i tō tātou arotahi rautaki rerenga kē. Mā te

whakakao i ētehi 26 hinonga Māori ki tētehi kaupapa whakangao tahi ka āhei ai te Kōporeihana te whai uru ki ētehi mea angitu whakangao nui e kore rānei pea e wātea mai ki a tātou.

Ka whakaatu Te Pūia Tāpapa i tētehi kokenga nui kia anga whakamua ai tā PKW tikanga whakahaere rawa haere ake nei, ka āwhinatia ai te whakaū i te tupu me te eke ki ngā taumata o tā tātou pakihi.

He meaangitu anō Kua āta aro atu tātou ki te kimi, ki te rapu hoki i ngā mea angitu rerenga kē mō tātou kohinga whakangao, kia āhei ai tātou te whai painga anō i tō tātou tino rawa, arā, ko te whenua nui kia tutuki ai te toitūtanga me ngā painga mō ō tātou kaiwhaipānga.

Kua aro atu ā tātou mahi ki ngā tino wāhanga e toru - arā, ko te mīere, te ahumāra me te rawa whenua - he torohū tō ngā wāhanga katoa nei mā tātou i a tātou e whanake ana, e whakatū ana i ngā rangapū whai huanga.

I a tātou e rapu kōrero ana mō te tupu pakihi haere ake nei, i

HE TANGATA

ka tū pakari ake tonu tā tātou whakangao ki te Port Nicholson Fisheries (PNF).

PARININIHI HE TANGATA KI WAITOTARA PARININIHI INCORPORATION KI WAITOTARA - TE PŪRONGO INCORPORATION A TE TUMU - CEO WHAKARAE REPORT

" Kua āta arotahi atu mātou ki te rapu, ki te tirotiro hoki i ngā ara rerenga kē mō te taha/kohinga whakangao, kia whakaāhei mātou ki te whai painga anō i tō tātou rawa matua, arā, ko te whenua kia whakawhiwhia ki ngā painga toitū mā ō tātou kaiwhaipānga."

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" …ka oke tonu mātou kia eke ki ngā taumata ā-ahumoni, ā-ahurea, ā-pāpori, ā-taiao hoki ka rato painga ki ō tātou kaipupuri, ki ā rātou uri anō hoki."

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haere atu ō tātou tīma mana ārahi, whakahaere mātāmua hoki ki Whakatū ki te kōrero ki te taha o tō tātou whānau ki Te Tau Ihu i te Kōporeihana o Wakatū. I kōrero mō te rāngai ahumāra nā te mea ka whakaratoa pea i reira ngā huanga kaha, ina ka whai whakaaro hoki ki ō tātou takenga - taiao nei, ahurea nei, pāpori nei hoki.

He wheako whai uara, āwhina nui hoki ki a tātou katoa te ahu whakamua i tō tātou haerenga ako, ina haere ai tātou i runga i tēnei ara torohū mō PKW mō ōna kaiwhaipānga hoki. E tiro whakamua ana au ki ngā angitu tērā pea ka puta hei te tau e tū mai ana hei otinga o ā tātou mahi haere tonu i roto i tēnei wāhanga.

He Tangata, He Tangata He hinonga Māori tēnei nō reira he mea waiwai, hiranga hoki ō tātou uara ahurea ki te whai angitu o te kaupapa, ā, ko ō tātou tāngata tonu kei te poka pū o ā tātou tikanga.

Ka mihi au ka tika ki ō tātou kaimahi, ki te tira mana ārahitanga, mana whakahaere hoki me tō rātou takohanga, manawaroa, māia hoki i tēnei tau tino taumaha. Ka āhukahuka au nā ō rātou pūkenga, tō rātou arotahi rautaki, pono hoki ki ō tātou whāinga me ō tātou uara, i eke ai tā tātou ahunga whakamua ā-pakihi nei.

E 46 ngā tāngata ka whakamahia e PKW puta noa i te kaupapa, tae atu ki ngā wāhanga pērā i te ahumahi mīraka kau, te whakahaere pāmu kau, te whakatupu kāwhe, te uara, te ratonga ahumoni, kaute hoki, te ratonga kōporeihana, te tautoko whakahaere me te hauora me te haumaru. He 57% o ō tātou tāngata he Māori, he 12% te pikinga i ō tērā tau, ā, he rahi te ōrau ka tohua he Māori nō Taranaki rātou. Ka whakaaturia tō tātou arotahi ki te whanake i ngā āheinga Māori me ā tātou ake kaupapa ō-roto koke whakamua.

He tōrunga ngā pānga o te whakaū kia whakatairangatia

ai tātou hei pakihi Māori e tū rangatira ana.

Ko te kopoutanga o Mitchell Ritai (General Manager Shareholder Engagement) ki tō tātou tīma whakahaere i te mutunga o Kohitātea i tēnei tau tētehi tauira pai. He nui ō Mitchell pūkenga ahurea, pakihi hoki i roto i te rāngai pakihi Māori, ā, e kitea ana te uara o tōna mōhiotanga, o ōna pūkenga hoki ki te kaupapa o PKW. Arotahi Rautaki Ko te whakakaha i ō tātou tūāpapa ā-rautaki, ā-whakahaere hoki te tino arotahi o tēnei tau. Tae atu ngā tino taumata tiketike o tēnei mahi ki: • te whakatū i ētehi kaupapa whai hua mahi puta noa i ngā mahinga pāmu, i roto i te tira whakamahi hoki, • te tautohu i ētehi rangapū hou, te whakahaumi i ētehi rangapū o tēnei wā hoki kia whai wawata rerenga kē kia tīkina atu ētehi mea angitu hoki ki ō tātou

• te pupuri tonu i tō tātou tūnga hei kaitāpae matua, hei kaiwhakaāhei i ētehi tukanga me ētehi mahi, toitū pakihi.

He āhuatanga matua o te ahu whakamua ko te whakatū i tō tātou rautaki Kaitikaitanga ka tautohua ai e tātou nā mahi hei mahi ki te whakatutuki i ngā takohanga kua whakatakotohia. He arotahi hiranga tēnei o te kaupapa ka hāpai i te mana o ā tātou mahi hei kaitiaki o ō tātou whenua, o ō tātou kaiwhaipānga, ki ō rātou whānau, uri hoki.

Mai rā anō, ko tō tātou whāinga ko te pakihi whai hua angitu rerenga kē, toitū, hoki, nā ngāi Māori o Taranaki, ka whakamahia e ngāi Māori o Taranaki hoki ka whakarato ai he mea angitu whai take mō ō tātou tāngata. He punga ō tātou uara, arā, ko te manaakitanga, te whakapono, te kotahitanga me te whanaungatanga ka ārahi i a tātou

mahi i ā tātou e oke ana tonu kia eke ki ngā taumata ā-ahumoni, ā-ahurea, ā-pāpori, ā-taiao hoki ka whakarato painga ki ō tātou kaipupuri, ki ā rātou uri anō hoki.

WHAKAKAPINGA

Mō te hunga kaimahi o te Kōporeihana o PKW, ka mihi au ki ngā kaiwhaipānga, ki te tira mana ārahi hoki mō ā rātou tāpae, tautoko hoki ka haere tonu i te tau kua pahure. Nōku te hōnore ki te kawe tonu i tēnei taonga tuku iho ki te āpōpō mā ngā uri whakatupu.

Ngã mihi Warwick Tauwhare-George Tumu Whakarae

HE TANGATA

kaiwhaipānga, ki ō rātou whānau hoki,

PARININIHI HE TANGATA KI WAITOTARA PARININIHI INCORPORATION KI WAITOTARA - TE PŪRONGO INCORPORATION A TE TUMU - CEO WHAKARAE REPORT

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PARININIHI KI WAITOTARA INCORPORATION

CHIEF EXECUTIVE OFFICER’S REPORT WARWICK TAUWHARE-GEORGE

Taiāwhiowhio ana te rere o te hauora o ngā tūpuna.

Toitū te tangata, toitū te whenua, poupoua te oranga, mai Parininihi kei raro, ki Waitotara kei runga.

E te iti, e te rahi, te katoa. Tēnā koutou, tēnā koutou, tēnā tātou katoa.

I am pleased to present my report on behalf of the leadership team for Parininihi ki Waitotara Incorporation on our activities for the financial year ending 30 June 2018.

This year has been one that has seen us move forward towards our strategic goals with a focus on completing the due diligence we need to move our diversification intentions into the implementation stage. The results of those efforts are already being seen, as outlined later in my report, and we expect to be able to make more announcements in this area over the coming months.

Our financial results report a year end profit after tax of $4.9m (FY16/17 $36.5m), reflecting a return to normalised business activities after the value gain of our corpus land holdings (FY16/17 $25.2m) following the sevenyearly rent review held last year.

This figure compares favourably to the $3.7m year end profit after tax reported for the 15/16 financial year. This comparison shows us that our business is making progress, backed by clear strategic governance and efficient operational planning and execution.

REVENUE

Total group revenue fell by $3.5m to $25m (FY16/17 $28.5m). This was due to several significant factors: • Milk production was significantly impacted by the climatic conditions experienced by PKW Farms with above average rainfall in winter and spring followed by a long extended dry spell that led to drought conditions severely curtailing grass growth.PKW’s dairy units produced 2,465m per kgMS, a decrease from last year by 11%

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• In the prior financial year, we were positively impacted by a fair value increase in livestock value of $4m. This year the fair value increase was modest at $1.2m - this has resulted in a livestock revenue difference between the two years of $2.8m.

• Several factors came into play regarding the lobster annual catch entitlement (ACE) revenue this year. A market price fall in February 2017 continued to impact on this financial year with ACE lease values being set 12.5% lower than previously. ACE volumes were also reduced by 8,842 kgs, while a realignment of the quarterly tranche payments,

Farm 21, Waverley Beach Road.

which led to an additional ACE payment being made during the 2016/17 financial year, has also negatively impacted revenues received.

• These factors were mitigated in part by an increase in corpus rental revenue of $0.5m, and an improved profit return from our lobster investments.

PARININIHI KI WAITOTARA INCORPORATION - CEO REPORT

(FY16/17 2,759m kgMS). The decrease was offset in part by an improved milk price of $6.75 per kgMS (FY16/17 $6.15 per kgMS) leading to an income of $12.3m (FY16/17 $13.1m).

$25.0

MILLION TOTAL GROUP REVENUE

address remaining legacy matters.

FINANCE EXPENSE

An improved finance cost of $2.7m (FY16/17 $2.9m) reflects a debt repayment made in November 2017 and an improved cash management programme. These two areas will remain a focus going forward in order to maintain a downward trend.

HE TANGATA

" This year has been one that has seen us move forward towards our strategic goals..."

GROUP EXPENSES

Group expenditure remained relatively consistent with last year at $15.7m (FY16/17 $15.6m) due to a management focus on cost monitoring in the farms business, in anticipation of the reduction in revenue. Included in this figure are additional costs incurred during the implementation of the new organisational team structure within the Incorporation, forward investment to progress the diversification strategy, and to

OPERATIONAL OVERVIEW

Whenua This is the first year that the full benefit of the increase in the rental stream has been felt, with a $0.5m improvement from last year to $7.2m (FY 16/17 $6.7m). There has also been a modest uplift in corpus land value holding to $177.5m (FY16/17 $177m).

PKW Incorporation made a significant land purchase this

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year, doubling the size of what was known as Farm 2 in OhÄ ngai, South Taranaki. Bringing our ancestral land back under our management is always a cause for celebration. In this particular case the ability to integrate it under the operational control of an existing unit means we will see immediate benefit in production levels, without the requirement for significant investment in infrastructure.

The purchase also offered us the opportunity to reach a major milestone in the history of PKW and rename the farm in collaboration with the whÄ nau of Meremere Marae, in line with our core values of Manaakitanga, Kaitiakitanga, Whakapono, Kotahitanga and Whanaungatanga. PKW was privileged to be gifted the name Te Ruru in a ceremony that brought the community together. We look forward to nurturing and growing those connections in the future.

Identifying and realising targeted opportunities to add to our corpus land portfolio continues to be a strategic focus for the Incorporation.

Farming The weather condition our farmers experienced this year was one the region hasnâ&#x20AC;&#x2122;t seen for more than half a century and the impact on production levels was considerable, with 2,465m kgMS produced against a budgeted 2,811m kgMS. This led to a $0.8m reduction in revenue to $12.3m (FY16/17 $13.1m).

Drystock revenue also fell to $2.44m (FY16/17 $2.89m) due to the retention of additional stock units at year end which would normally have been sold. With market improvement however, this revenue will be realised in future reports to our benefit.

A significant reduction in the year end valuation of Fonterra shares of $0.56 per share has compounded the situation with an overall PKW Farms LP results reflecting a net loss after tax of $3.4m (FY16/17 gain $2.5m).

While the picture of our farming operations was a challenging one, budgeted capital projects have continued to implement on-farm system optimisation and

technological advancements which will bring cost efficiencies and improved productivity in the coming years.

Budgeted cost expectations were not exceeded, despite the requirements to invest in repairs and maintenance as well as increased imported feed requirements, which were due to the adverse weather. This is a reflection of the quality of the Ahuwhenua management team, our robust planning approach and the response of our kaimahi to the situation. I would like to acknowledge the difficult year our farmers have faced and the resilience they have continually demonstrated.

Relief to the revenue stream came in the improvement in the milk price to $6.75 per kgMS (FY16/17 $6.15 per kgMS) which went some way to mitigating the losses.

Lobster Despite the double impact in the reduction of ACE lease values and volumes, our investment in the Port Nicholson Fisheries (PNF) continues to stand out.

15

PKW will continue to work within PNF to bring more partners on board to give the collective greater influence over market supply.

Another area of focus is greater value along the supply chain by building relationships with end consumers to build business performance.

OTHER INVESTMENTS

Commercial Property PKW’s commercial property represents 1.7% of the Incorporation’s assets and remains an important part of the overall investment portfolio. Properties in Miranda Street, Stratford; Queen Street, Waitara; Powderham Street, New Plymouth and part of 35 Leach Street, New Plymouth maintained a rental income of $0.23m consistent with last year’s return.

Due diligence has been completed

with regards to Tai Hekenga with the $2m commitment now due for drawdown this financial year. This property investment opportunity opened as a result of PKW’s partnership with the Port Nicholson Settlement Trust and Ngā Iwi o Taranaki whānui, to take advantage of an offer to acquire the underlying leasehold rights of Government buildings in central Wellington. Strategic partnerships such as these allow us to build on our core values to continue to bring about essential diversification to our business, easing pressure on individual revenue streams.

Te Pūia Tāpapa The launch of this brand new investment fund, to which PKW has made a $2m commitment that will be realised over the next few years (the initial drawdown included in this financial year was $15k), offers us exciting possibilities within our diversification strategic focus. Bringing together 26 Māori entities into a single co-investment vehicle means the Incorporation can access large scale investment opportunities that would otherwise not be open to us.

Te Pūia Tāpapa represents a big step forward in the way PKW will manage its assets in future, helping to ensure the future growth and success of our business.

Other opportunities This year we have sharpened our focus on seeking out and investigating diversification opportunities for our investment portfolio, to enable us to leverage our core asset of corpus land to achieve sustainability and benefits for our shareholders.

HE TANGATA

The PKW profit share entitlement from the partnership showed an increase from last year to $980k (FY16/17 $954K) which includes rental from the processing facilities rising to $263k (FY 16/17 $210k).

PARININIHI KI WAITOTARA INCORPORATION - CEO REPORT

" This year, we have sharpened our focus on seeking out and investigating diversification opportunities for our investment portfolio, to enable us to leverage our core asset of corpus land to achieve sustainable benefits for our shareholders."

We have concentrated our efforts in three primary areas – honey, horticulture and property – all sectors that hold exciting prospects for us as we work to develop and establish productive partnerships.

As part of our investigations for future business growth, our governance and senior management teams travelled to Nelson to kōrero with our Te Tau Ihu whānau at Wakatū Incorporation about the horticulture sector as it offers the potential

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16

" ...we continue to strive for commercial, cultural, social and environmental excellence that delivers benefit to our owners and their successors."

<<

to deliver strong returns while taking into consideration our environmental, cultural and social drivers.

to their skills, strategic focus and belief in our goals and values.

People As a Māori entity, our cultural values are of critical importance to the success of the organisation and at the centre of our tikanga lies our people.

PKW employs 46 people across the organisation which includes areas such as dairy and drystock farm management, calf rearing, land valuation, finance and accounting services, corporate services administration support and health and safety. 57% of our people are Māori, which is 12% increase compared to last year, with a high percentage identifying as Taranaki Māori. This reflects our focus on developing Māori capabilities and our own internal progression initiatives. Ensuring that we promote ourselves as a proud Māori business is having a positive effect.

I would like to acknowledge the commitment, resilience and determination shown by our kaimahi, governance and management teams during this extremely challenging year. I recognise that the progress we have made as a business is down

One fine example of this is the appointment of Mitchell Ritai (General Manager Shareholder Engagement), to our management team at the end of February this year. Mitchell’s wealth of cultural expertise and business acumen within the Māori business sector is

It was a valuable experience that helped us all progress our learning journey as we take further steps in this potential new direction for PKW and its shareholders. I am looking forward to seeing the opportunities that may emerge over the coming year as a result of our continuing work in this area.

considerable and his knowledge and skills are proving to be invaluable to the PKW kaupapa.

Strategic Focus Our primary focus this year was on strengthening our foundations both strategically and operationally.

The main highlights of this work included: • the implementation of efficiency initiatives across our farming operations and within the management team, • the identification of new, and consolidation of current, partnerships to pursue diversification goals and bring opportunities to our shareholders and their whānau, • maintaining our position as a lead contributor and enabler of environmentally sustainable business practices and activities.

A key area of progress has been the establishment of our Kaitiakitanga strategy in which

PARININIHI KI WAITOTARA INCORPORATION - CEO REPORT

17

As always, our mission is to be a successfully diversified and sustainable Taranaki Māori owned and operated business providing meaningful opportunity for our people. Our core values of manaakitanga, kaitiakitanga, whakapono, kotahitanga and whanaungatanga act as anchorstones, guiding us in our mahi as we continue to strive for commercial, cultural, social and environmental excellence that delivers benefit to our owners and their successors.

CONCLUSION

On behalf of the kaimahi of the PKW Incorporation, I would like

HE TANGATA

we identify the actions we need to take to fulfill the series of commitments we have laid down.

This is an important focus for the organisation as it recognises the importance of our role as kaitiaki to our whenua, to our shareholders, and to their whānau and uri.

to thank the shareholders and governance team for their continued input and support over the past year. It is an honour to continue the legacy our organisation represents into the future for the generations to come.

Ngã mihi Warwick Tauwhare-George Chief Executive Officer

18

GROUP PERFORMANCE AT A GLANCE

FIVE YEAR CONSOLIDATED PERFORMANCE TO 2017/18 2013/14 2014/15 2015/16 2016/17 2017/18 $'000

$'000

$'000

$'000

$'000

29,482

21,872

18,206

28,539

24,972

Financial Performance

FINANCIAL PERFORMANCE OPERATING PROFIT AFTER TAX AND BEFORE FAIR VALUE GAINS / (LOSSES) DOWN $3.3M FROM 2017 TO A PROFIT OF:

Revenue

(15,440) (16,561) (16,344) (15,642) (15,651)

Operating expenses

(2,537)

(3,336)

(3,280)

(2,946)

(2,684)

1,095

1,151

1,099

954

980

Operating profit / (deficit) before tax and other items

12,600

3,126

(319)

10,905

7,617

Tax expense

(2,161)

(457)

(193)

(1,633)

(1,546)

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

10,439

2,669

(512)

9,272

6,071

Net gains / (losses) from investments

(1,307)

4,838

4,228

27,228

(1,159)

9,132

7,507

3,716

36,500

4,912

Finance costs Share of profit from joint venture

$6.071M

FINANCIAL POSITION EQUITY UP $3.241M FROM 2017 TO:

Profit from continuing operations

$243.3M TOTAL ASSETS PKW Cash

PKW Whenua

59.5%

1.9%

PKW Farms

31.3%

PKW Fish

5.5% PKW Commercial Property

1.7% PKW Investments

0.1%

19

PKW Fish Lobster return on assets were 6% for the financial year 30 June 2018.

PKW Farms Milk solids produced decreased 11% on prior year reflecting a period of challenging climatic conditions during spring and summer.

PKW Whenua The fair value of whenua (corpus land) assets increased 0.3% to $177.5m as at 30 June 2018.

PKW Investments A $2m commitment was made to Te Pūia Tāpapa Māori Investment Fund.

$2m

6% 11%

KEY OPERATING DATA 2013/14

2014/15

2015/16

2016/17

2017/18

Total Milk Solids Produced kgs/ms '000

3,009

3,333

2,743

2,759

2,465

Quantity of Total Livestock on Hand1

8,064

9,655

7,568

7,926

7,853

Quantity of Dairy Cattle on Hand2

6,684

8,055

6,522

6,671

5,841

Total Hectares Under Management3

4,435

4,867

4,889

4,989

4,929

Total Effective Hectares Dairy Operations

2,342

2,342

2,342

2,412

2,412

N/A

3%

5%

6%

10%

2013/14

2014/15

2015/16

2016/17

2017/18

1,808

599

1,199

1,499

1,557

327

282

227

234

248

2,135

881

1,426

1,733

1,805

Expenditure Spent with Taranaki Maori Suppliers4

1 2 3 4

includes all PKW owned dairy cattle, beef cattle and sheep

includes PKW dairy cattle only; excludes any sharemilker dairy cattle includes all PKW land either owned or leased reflects approx $0.98m of expenditure

Dividends Provided $'000 PKW Trust Grants Distributed $'000 PKW GROUP TOTAL DISTRIBUTIONS

PARININIHI KI WAITOTARA INCORPORATION - GROUP PERFORMANCE

PERFORMANCE HIGHLIGHTS 2017/2018

20

KEY OPERATING DATA TERM LIABILITIES $'000

$62,531

2013/14

$68,839

2014/15

$67,189

2015/16

$68,787

2016/17

$65,433

2017/18

Decrease in debt levels due to a repayment made during the year as a result of surplus working capital. The total term debt to assets ratio is 20.6%.

TOTAL ASSETS $'000 2013/14 2014/15 2015/16

$267,143 $276,994 $279,040 $316,493

2016/17

$317,112

2017/18

Increase due to various movements but primarily the additional land purchases to extend Te Ruru (previously Farm 2) offset by the decline in value of Fonterra shares.

TOTAL EQUITY $'000 2013/14 2014/15 2015/16 2016/17

$196,809 $202,907 $204,327 $240,022

2017/18 Shareholders Equity has increased consistently year on year, from $196.8m in 2014 to $243.3m in 2018, representing a total growth of 23.6% over 5 years.

$243,263

COMMITTEE OF MANAGEMENT

Hinerangi Raumati-Tu'ua (Chair)

Hinerangi Edwards

Bev Gibson

David MacLeod

Claire Nicholson

Dion Tuuta

INDEPENDENT DIRECTORS

Richard Krogh

Philip Luscombe

Taaringaroa Nicholas

SHAREHOLDER REPRESENTATIVE

Darryn Ratana

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

21

22

COMMITTEE OF MANAGEMENT

JOINT VENTURE COMPANIES

Hinerangi Raumati-Tu'ua (Chair) Bev Gibson Claire Nicholson David MacLeod Hinerangi Edwards Taaringaroa Nicholas Dion Tuuta (Elected October 2017)

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

CHIEF EXECUTIVE / SECRETARY Warwick Tauwhare-George (Appointed October 2016)

PKW COMMITTEES

SUBSIDIARY COMPANIES

PKW TRUST Hinerangi Edwards (Chair) Bev Gibson Claire Nicholson David MacLeod Hinerangi Raumati-Tu'ua Taaringaroa Nicholas Dion Tuuta (Elected October 2017) Darryn Ratana (PKW Trust Shareholder Representative)

PKW FARMS GENERAL PARTNER LTD Hinerangi Raumati-Tu'ua (Chair) Bev Gibson Claire Nicholson David MacLeod Hinerangi Edwards Taaringaroa Nicholas Dion Tuuta (Elected October 2017) Phillip Luscombe (Independent Director) Richard Krogh (Independent Director)

HUMAN RESOURCES COMMITTEE Bev Gibson (Chair) Hinerangi Edwards Hinerangi Raumati-Tu'ua Phillip Luscombe (Independent Director) AUDIT AND RISK COMMITTEE Taaringaroa Nicholas (Chair) Bev Gibson Claire Nicholson Richard Krogh (Independent Director) Dion Tuuta (Elected October 2017)

PKW INVESTMENTS LTD (INACTIVE) Hinerangi Raumati-Tu'ua COMPANIES BEING REMOVED IN 2018/19 Te Oranga Livestock Limited (Ceased Trading 30 June 2018) PKWF 2013 Limited (Ceased Trading in 2014) Taranaki Aquagardens Limited (In-active) JSP Limited (In-active)

23

HINERANGI RAUMATI-TU'UA

CLAIRE NICHOLSON

Elected Chair, Committee of Management of PKW Incorporation in 2011. Chair PKW Farms General Partner Ltd, member of Human Resources Committee and PKW Trust.

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

ENTITY POSITION Te Ohu Kaimoana Portfolio Director Management Ltd Te Ohu Kaimoana Trustee Ltd Director Aotearoa Fisheries Ltd Director Nga Miro Trust Chair Port Nicholson Fisheries General Director Partner Ltd Taranaki Iwi Holdings Management Director Limited Koura Inc General Partner Limited Director Auckland Council Investments Ltd Director Venture Taranaki Director Taranaki Aquagardens Limited Director PKW Investments Limited Director Nga Kai Tautoko Limited & Te Pou Chair Harenga Ltd Te Kiwai Maui o Nga Ruahine Ltd Chair Tainui Group Holdings Limited Director Te Arataura Te Whakakitenga Member o Waikato Inc

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

ENTITY POSITION Maruehi Fisheries Ltd Director Tuuta Waetford Tapui Ltd Director Koura Inc General Partner Limited Director/Chair Port Nicholson Fisheries General Director/Chair Partner Ltd Seafood New Zealand Ltd Director/Shareholder Te Ohu Kaimoana CEO Te Ohu Kaimona Custodian Ltd Director Te Wai Maori Trustee Ltd Director TSB Bank Ltd Director

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

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

ENTITY POSITION AJ Greaves Electrical Ltd Owner/Managing Director Taranaki Regional Council Chairman LGNZ - Regional Affairs Committee Member Port Taranaki Ltd Director Far South Farms Ltd Shareholder Matau Technologies Limited Director Predator Free 2050 Ltd Director PrimeQ Director/Chair

HINERANGI EDWARDS Committee of Management of PKW Incorporation, Director PKW Farms General Partner Ltd, member of Human Resources Committee and Chair PKW Trust.

ENTITY POSITION Aatea Consultants Ltd Director (t/a Aatea Solutions) R and R Edwards Whanau Director Trustee Ltd Māori Translation.co.nz Ltd Director Kupenga 94 Trust Trustee Te Taura Whiri Māori Language Board Member Commission

PARININIHI KI WAITOTARA INCORPORATION - COMMITTEE OF MANAGEMENT

REGISTER OF INTERESTS

24

REGISTER OF INTERESTS (CONTINUED)

BEV GIBSON

PHILIP LUSCOMBE

Committee of Management of PKW Incorporation, Director PKW Farms General Partner Ltd, Chair Human Resources Committee and member of PKW Trust.

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

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

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

ENTITY POSITION Ngati Ruanui Holdings Director Corporation Ltd Ngati Ruanui Holdings Operating Director Company Ltd Parininihi ki Waitotara Incorporation Committee Member/ Shareholder PKW Farms Ltd Director Te Awanui Hukapak Ltd Director Southern Pastures (NZ) Ltd Director Southern Pastures Founders Ltd Director/Shareholder Southern Pastures Director/Shareholder Management Ltd Miraka Ltd Director Pirirakau Trust Trustee Direct Capital IV Member Advisory Committee Waikato-Tainui College of Research Trustee & Development Trust Te Waharoa Investments Ltd Director Matariki Capital Partners Ltd Director Waikato-Tainui Group Investment Member Committee Rangitane Tu Mai Ra Ltd Director Te Kiwai Maui Ltd Director

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

RICHARD KROGH Independent Director of PKW Farms General Partner Ltd and member of the Audit and Risk Committee.

ENTITY POSITION Energia Limited Director Port Taranaki Limited Director/Deputy Chair Top Energy Limited Director/Deputy Chair Ngawha Generation Limited Director The Lines Company Limited Director First Gas Topco Limited and Director/Deputy Chair Subsidiaries Gas Services New Zealand Ltd Director/Deputy Chair Top Energy Ngawha Spa Limited Director Financial Corporation Ltd Director

25

GOVERNANCE

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

Hinerangi Raumati-Tu'ua Hinerangi Edwards Bev Gibson Claire Nicholson David MacLeod Taaringaroa Nicholas Dion Tuuta (joined Nov 17) Darryn Ratana Phillip Luscombe Richard Krogh

6 6 6 6 6 6 4 -

6 6 6 6 6 6 4 -

4 3 3 3 4 2 4

4 4 4 2 4

4 3 4 3 -

4 4 4 4 -

6 6 6 6 6 6 4 6 6

6 6 6 6 6 6 4 6 6

5 4 5 5 5 4 3 4 -

5 5 5 5 5 5 4 5 -

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

EXECUTIVE LEADERSHIP TEAM

Shane Miles (General Manager, Ahuwhenua)

Joe Hanita (General Manager, Finance and Investments)

Jacqui King (Head of Corporate Services)

Warwick Tauwhare-George (Chief Executive Officer)

Mitchell Ritai (General Manager, Shareholder Engagement)

PARININIHI KI WAITOTARA INCORPORATION - COMMITTEE OF MANAGEMENT

GOVERNANCE ATTENDANCES

26

Putting the Diversification Plan into Action Clear strategic intent and an operational focus that references the long-term goals for the organisation underpins Parininihi ki Waitotara Incorporation’s mission to be a successfully diversified and sustainable Taranaki Māoriowned and operated business that

provides meaningful opportunity to its people.

“Our long-term goals provide

us with a clear direction for the organisation and guide us in everything we do and every decision we make, from our

governance people right down to our kaimahi on our farms,” says Hinerangi Raumati-Tu’ua, PKW’s Chair. “Our goals of exercising Kaitiakitanga over our people’s lands, providing sustainable financial returns to our owners, recognising the cultural

“The investment philosophy we have in place calls for us to take a disciplined approach and wait for the right opportunities that

strategic approach will lead to improved and targeted long-term returns on equity, increasing the market value of investments to improve net operating profits – ultimately enabling the Incorporation to deliver improved outcomes that advance the prosperity of our people.

“Ensuring that we leverage any advantages we hold in order to target our direct investment focus while building partnerships with those who align with our values, particularly other Taranaki iwi, to access a greater range of opportunities are essential elements of our approach. Partnerships will allow us involvement in larger-scale investments that would otherwise not be open to an organisation of PKW’s size.”

This economic aspiration does not stand alone but is one of many components of the recently refreshed PKW investment framework which includes a dedicated tool entitled the PKW Kaupapa Evaluation Toolkit (KET).

The tool is founded on the four values of PKW and measures investment outcomes and progress across social, cultural, environmental and economic indicators.

The expectations are that this

" The investment philosophy we have in place calls for us to take a disciplined approach and wait for the right opportunities that deliver the returns we expect..."

HE WHENUA

In order to achieve the long-term goals, several core strategies have been laid down which recognise that the whenua is a core asset and the way sustainable returns for shareholders will be realised. They also establish that diversification through the investment portfolio will enable distributions to be increased to reflect commercial good practice as PKW continues to strive to be a best in class corporate investor.

deliver the returns we expect, not jump in with both feet into highrisk enterprises that offer success on a knife edge,” says Hinerangi.

“We are aiming for a balanced portfolio that will give us the dividend potential we want for our shareholders while providing for long-term capital growth.

PARININIHI KI WAITOTARA INCORPORATION

27 importance of being who we are and standing as a leader and enabler for economic development in Taranaki as Taranaki Māori, also contribute to our corporate identity and signal what we stand for and what is important to us.”

“The intent is to provide a balanced view to shareholders moving forward on how our investments are realising and enabling He Tangata, He Whenua, He Oranga - beyond just economic outcomes,” says Hinerangi.

“With these principles in place, the challenges of putting them into action in an operational sense come to the fore,” says PKW’s CEO Warwick TauwhareGeorge. “The last year has seen us reinforcing the foundations of the business by confirming the investment strategy and policy for PKW, particularly for our farming business, that facilitates the release in equity and land we need to enable us to realise our investment approach. We have also improved the performance of our agribusiness concerns through clear governance and optimised production targets. Cost control has also been key, which we are proud to have achieved despite substantial impact of the weather conditions over the past season.

“A major step forward towards our strategic goals also took place as we confirmed our involvement in the property partnership vehicle Tai Hekenga and investment fund partnership Te Pūia Tāpapa. We are also pleased with the progress

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28

Momentum & Performance

Diversity & Growth

Horticulture

Corpus Land Management

Leasehold Title Acquisition

Quota PNF Venture Partner Growth

Optimise Benchmarking

Optimise Existing Properties

Mangaoapa Forest Rockit Apples

WHENUA

SEAFOOD

Honey

iHemp

China / In Market Strategy

FARMS

Divest Repurpose

PROPERTY

Tai Hekenga Aged Care

INVESTMENTS

Te Pūia Tāpapa Tourism

Grants Programme

TRUST

Skills Assessment

GRAPH B: INVESTMENT PORTFOLIO

Equity Allocation (Current)

Equity Allocation (Future Target)

Investment Investment Portfolio Portfolio Equity Equity Allocation Allocation (Current) (Current)

Investment Investment Portfolio Portfolio Equity Equity Allocation Allocation (Future (Future Target) Target) Premium Premium Seafood Seafood (Growth (Growth Asset) Asset)

Premium Premium Seafood Seafood (Growth (Growth Asset) Asset) Agri Food Food Agri (Growth Asset) Asset) (Growth

Other Other Growth Growth Assets Assets

Other Other Income Income Assets Assets

Other Other Growth Growth Assets Assets

Agri Agri Food Food (Growth (Growth Asset) Asset)

Other Other Income Income Assets Assets

Whenua Whenua Ground Ground Leases Leases (Income (Income Asset) Asset)

Whenua Whenua Ground Leases Leases Ground (Income Asset) Asset) (Income

Note: Other Income Assets = Reliable revenue stream (e.g. Commercial Property, Cash) Other Growth Assets = Alternative operating assets (e.g. Tourism, Honey, Horticulture)

<<

we have made in exploring the feasibility of a property development project and expect to see work begin on that very soon.”

PKW is now poised to step into the next stage of its strategic implementation plan – a 3-year period of growth for the wider organisation. In addition, we will see further consolidation of PKW Farms through debt reduction, targeted development and equity release to fund wider strategic investment plans.

The Incorporation has identified equity allocation ratios into the five asset areas which acknowledge that the whenua leases form the core of the investment portfolio being both a secure and reliable source of funds for distribution and/or dividends. While the allocations act as a guideline,

diversification will not take place for its own sake, as decisions will be made on where investment can be made to achieve the best returns over the long run. As illustrated above, the objective is to move the current investment portfolio to a more balanced portfolio: (See Graph A and Graph B).

the broader intent of the PKW vision to provide opportunities to our people, and also captures feedback the shareholders provide each year. Delivering on our core purpose of He Tangata, He Whenua, He Oranga – sustaining and growing our people through prosperity – is what our strategic action plan is all about.”

By increasing PKW’s diversity of interests to secure sustainably increased return rates, a key objective will be to ensure shareholders experience growth in terms of the distribution / dividends they receive.

The framework will inform PKW’s future annual reporting to shareholders, ensuring they measure and report on progress against the values-based goals to drive long-term success.

Warwick explains, “the review of our Kaupapa Evaluation Tool has provided PKW with an outcomes framework to ensure investment goals are not simply focused on profitability. It also reflects

Warwick confirms “clear implementation guidelines and targets give PKW the ability to look forward in confidence that we will continue to build and grow whilst serving our shareholders both of today and those to come.”

HE WHENUA

GRAPH A: INVESTMENT PORTFOLIO

PARININIHI KI WAITOTARA INCORPORATION

29

30

Photos taken at Farm 9 Little Oeo Road, Oeo display PKW Farm LP's environmental commitment to protect the waterways and enhance biodiversity.

Bringing strategic focus to PKWâ&#x20AC;&#x2122;s kaitiaki role

Before - 2009 Protecting and nurturing the whenua for future generations is the core purpose behind a kaitiakitanga strategy that lays down a set of commitments from PKW into an operational framework of actions, projects and assessments.

PKW has always held its role as kaitiaki of the land, rivers, streams and coastline under its management proudly, but

HE WHENUA

PARININIHI KI WAITOTARA INCORPORATION

31

After - 2015 recognised that in order to fulfil its obligations to the mauri of these special places, and to the generations to come who will take over the mantle, a more focused approach was needed.

“To be good guardians of the land we need to have a deep understanding of what kaitiakitanga is and how to turn that knowledge into actions that will make a real difference,” says

Mitchell Ritai, General Manager Shareholder Engagement. “We feel that, while we are doing what is required of us by legislation when it comes to environmental compliance, this should be just a platform on which to base our aspirations for the wellbeing of our whenua and, ultimately, our whānau.”

“We want to be able to take a leading role in what it means

to run an environmentally sustainable business with Māori tikanga at its heart, enabling our whānau to reconnect with the whenua and access its resources and standing as an advocate and a voice for those who are also acting as protectors and guardians.”

“This strategy is a declaration of intent, of belief in our duty and of pride in the position we are in as

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32

" We are setting a clear standard of expectation for ourselves to make the changes our shareholders want to see..."

<<

kaitiaki on behalf of our owners and their mokopuna.”

In order to identify the crucial elements of a formalised kaitiakitanga approach, the organisation spoke to kaumātua and current and future shareholders about what was important to them, what needed to be done and what their expectations of PKW were.

“What we heard was an amazing kōrero of stories, of memories, of worries about the changes they had seen happen to their taiao, and the concerns they hold for the future,” says Mitchell. “One major kaupapa was the strong connection our people hold between a healthy environment and the ability to collect kai. There were memories of entire families setting off on kai collecting expeditions with the stories of the land and the ways of caring for it being shared along the way, and the observation that these no longer happen.

“In several places the kai is simply not there anymore and where it is, populations are struggling to maintain a hold.

Those who spoke at these hui told us that the impact of what has been happening has not just taken a toll on the environment, but on the people themselves, their ability to connect with each other and the whenua, and to that essential mauri that makes us what we are.”

These kōrero enabled the development of a series of commitments laid down across five key themes which are all deeply interconnected.

Freshwater will bring about a cultural health monitoring regime for all waterways, covering water quality, the implementation of strategies to protect, care for and restore the mauri of the awa, a focus on efficient water usage, the completion of a climate change risk assessment focusing on environment and economic risk and the fencing of all

waterways carried out to provide riparian planting strips and protection from cattle. This theme sits closely with Biodiversity in which the flora and fauna on PKW land will be assessed and a species rehabilitation programme developed.

“We want to see our streams filled with inanga and tuna once more, so initial monitoring will tell us what remains and what we need to do to fulfil our aspirations in this area,” says Mitchell.

Establishing a clear mandated position on environmental issues, a determination to contribute to the development of environment policy on both a local and national scale, collaboration with iwi to offer joint advocacy and defined monitoring of progress fall under the Leadership and Advocacy theme.

“It was clear that our shareholders and their whānau expect us to use our position to support those whose voices may

Commitment to Re-connection contains a series of initiatives designed to enable Taranaki Māori to reconnect with their land through the identification of wāhi tapu, contributing to the name of a farm, developing an access policy for cultural and environmental purposes, making land available for community maara and the potential for a

Taiao Fund for owners.

Further commitments will be laid down under Farming Methods that will reiterate maintaining an environmentally sustainable approach to productive land use and creating definable expectations for those in charge of both PKW-managed lands and those currently under lease agreements.

“This clear strategic direction and operational framework sets out our areas of priority for the next five years and we will develop an iterative process of review so that the

strategy continues to evolve,” says Mitchell. “This is not a short-term approach or the identification of ‘quick-fixes’ that may bring limited benefits.

These commitments, initiatives and projects will be the focus of the next 15 years, laying the foundations for the next 15, and so it will continue for 100 years and beyond.

“We are setting a clear standard of expectation for ourselves to make the changes our shareholders want to see so that we can stand tall in the company of others and say ‘This. This is what kaitiakitanga is.’”

" Being a leader means taking a position and then advocating for it, influencing those who make the decisions that can impact both the whenua and those connected to it."

HE WHENUA

not be so loud as to be heard,” says Mitchell. “Being a leader means taking a position and then advocating for it, influencing those who make the decisions that can impact both the whenua and those connected to it.”

PARININIHI KI WAITOTARA INCORPORATION

33

20 18 PARININIHI KI WAITOTARA

INCORPORATION FINANCIAL STATEMENTS for the year ended 30 June 2018

36

FINANCIAL STATEMENTS - 30 JUNE 2018

Auditor report

37

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

39

Statement of comprehensive income

40

Statement of financial position

41

Statement of changes in equity

42

Statement of cash flows

43

Notes to the financial statements

1 Corporate information

44

2 Summary of significant accounting policies

44

3 Financial risk management

50

4 Critical accounting estimates and judgements

51

5 Revenue

52

6 Other gains / (losses)

52

7 Expenses

52

8 Finance income and expenses

53

9 Income tax expense

53

10 MÄ ori authority credit account 54

11 Trade and other receivables

12 Biological assets

55

13 Property, plant and equipment

57

14 Quota assets

58

15 Equity accounted investments

58

16 Investments in subsidiaries

59

17 Investments

60

18 Equity instruments

60

19 Investment properties

61

20 Borrowings and Unclaimed Dividends

62

21 Derivative financial instruments

63

22 Net deferred tax assets / (liabilities)

64

23 Trade and other payables

64

24 Share capital

65

25 Reserves and retained earnings

65

26 Dividends

66

27 Contingencies

66

28 Commitments

66

29 Related party transactions

67

30 Subsequent events

68

31 Statement of estimated current market values

69

54

PARININIHI KI WAITOTARA INCORPORATION - FINANCIAL STATEMENTS

37

A member firm of Ernst & Young Global Limited

38

A A member member firm firm of of Ernst Ernst & & Young Young Global Global Limited Limited

COMMITTEE’S ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2018

2018 $'000

REVIEW OF OPERATION Net profit of the Group for the year ended 30 June 2018

4,912

Less provision for dividend

(1,557)

Add retained earnings as at 1 July 2017

211,089

214,444 It is not proposed to make any transfer to reserves.

THE STATE OF THE GROUP’S AFFAIRS AT 30 JUNE 2018 WAS: Assets totalled

317,112

THESE WERE FINANCED BY: Shareholder's equity

243,263

Liabilities

73,849

TOTAL EQUITY AND LIABILITIES 317,112

The business of the Incorporation is managing the interests of its Māori shareholders under the Te Ture Whenua Māori Act 1993. The nature of the Incorporation's business has not changed during the year.

The financial report was authorised for issue and signed on behalf of the Committee, dated 28 August 2018.

For and on behalf of the Committee of Management.

HINERANGI RAUMATI-TU'UA

TAARINGAROA NICHOLAS

Chair

Chair Audit and Risk Committee

28 August 2018

28 August 2018

PARININIHI KI WAITOTARA INCORPORATION - FINANCIAL STATEMENTS

39

40

STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2018

2018 2017

Notes $â&#x20AC;&#x2122;000 $â&#x20AC;&#x2122;000 Revenue

5

24,972

28,539

Other (losses) / gains

6

(1,159)

27,228

Expenses

7

(15,651)

(15,642)

Finance costs - net

8

(2,684)

(2,946)

15

980

954

Share of profit from joint venture

Includes sales mainly relating to milk proceeds, lease income received from our whenua and income from our crayfish Includes gains on the fair value of our whenua

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

Profit before income tax 6,458 38,133 Income tax expense

9

(1,546)

(1,633)

Profit after income tax

4,912

36,500

Costs from our financier Rabobank

Our share of Port Nicholson Fisheries LP and Port Nicholson Facilities LP surplus for the year

Other comprehensive income: Cash flow hedges

25,(a)

Total comprehensive income for the year

(114)

694

4,798 37,194

For and on behalf of the Committee of Management these financial statements are authorised for issue on 28 August 2018.

HINERANGI RAUMATI-TU'UA Chair 28 August 2018

TAARINGAROA NICHOLAS

Chair Audit and Risk Committee 28 August 2018

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

STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2018

Notes Money owed to Parininihi ki Waitotara by our customers Livestock owned by Parininihi ki Waitotara Crayfish quota owned

by Parininihi ki Waitotara Investment in Port Nicholson Fisheries LP and Port Nicholson Facilities LP Includes shares in Fonterra and fertiliser companies, and Finistere Venture Capital Fund Accounting value of our whenua tupuna Money owed to our suppliers

Includes borrowings from Rabobank and Unclaimed dividends

Represents unrealised losses on interest rate hedges

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

ASSETS Current assets Cash and cash equivalents Trade and other receivables Biological assets Total current assets

11 12

Non-current assets Property, plant and equipment 13 Quota assets 14 Investment in joint ventures 15 Investments 17, 18 Investment properties - unimproved lease land 19 Investment properties - commercial 19 Total non-current assets Total assets LIABILITIES Current liabilities Trade and other payables Current tax payable Derivative financial instruments Total current liabilities Non-current liabilities Borrowings and unclaimed dividends Derivative financial instruments Deferred tax liabilities Total non-current liabilities Total liabilities Net assets EQUITY Share capital Reserves Retained earnings Total equity

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

23 21

20 21 22

24 25,(a) 25,(b)

2018 $'000

2017 $'000

6,851 4,560 10,529 21,940

4,549 10,955 23,048

79,453 15,620 1,732 18,274 177,523 2,570 295,172 317,112

15,620 2,545 19,982 176,994 2,390 293,659 316,707

7,544

76,128

4,334 1,043 655 6,032

4,638

65,433 981 1,403 67,817 73,849 243,263

68,787 850

5,549 23,270 214,444 243,263

616 647

5,901

1,147 70,784

76,685 240,022 5,549 23,384 211,089 240,022

PARININIHI KI WAITOTARA INCORPORATION - FINANCIAL STATEMENTS

41

42

STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2018

Attributable to equity holders of the Incorporation Share capital $'000

Capital reserve $'000

Cash flow hedge reserve $'000

Retained earnings $'000

Total equity $'000

5,549

24,591 -

(1,901) 694 694

176,088 36,500 36,500

204,327 36,500 694 37,194

-

24,591

-

(1,207)

(1,499) (1,499) 211,089

(1,499) (1,499) 240,022

5,549 25,(a)

-

24,591 -

(1,207) (114) (114)

211,089 4,912 4,912

240,022 4,912 (114) 4,798

26

-

24,591

(1,321)

(1,557) (1,557) 214,444

(1,557) (1,557) 243,263

Notes Balance at 1 July 2016 Profit for the year Cash flow hedges

Total comprehensive income Dividends provided

Total transactions with owners Balance as at 30 June 2017

25,(a) 26

Dividends provided

Total transactions with owners Balance as at 30 June 2018

-

5,549

Balance as at 1 July 2017

Profit for the year Cash flow hedges Total comprehensive income

-

-

5,549

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

STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2018

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

2018

$’000

Cash flows from operating activities Receipts from customers Interest received Income tax paid Payments to suppliers Payments to employees Interest paid GST paid Net cash inflow from operating activities

2017 $’000

27,472 24,943 117 42 (838) (881) (12,311) (12,146) (3,547) (2,766) (2,234) (2,988) (1,268) (1,273) 7,391 4,931

Cash flows from investing activities Receipts / (payments) for property, plant and equipment Payments for investments Proceeds from sale of investments Dividends received Cash from joint ventures Net cash inflow / (outflow) from investing activities

(5,834) (139) 6 957 1,776 (3,234)

(3,568) - 3,075 935 1,059 1,501

Cash flows from financing activities Proceeds from borrowings Repayment of borrowings Dividends paid Net cash inflow / (outflow) from financing activities

1,680 (5,316) (1,214) (4,850)

1,500 - (1,101) 399

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

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

PARININIHI KI WAITOTARA INCORPORATION - FINANCIAL STATEMENTS

43

(693) 6,831 7,544 713 6,851 7,544

44

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018 1 CORPORATE INFORMATION Parininihi ki Waitotara Incorporation (the 'Parent') is registered under the Te Ture Whenua Māori Act 1993 and is incorporated in New Zealand.

The Parent and its controlled entities are included in the Parininihi ki Waitotara Incorporation Group (the 'Group').

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. (a) Basis of preparation The Group financial statements have been prepared in accordance with generally accepted accounting practice in New Zealand and section 276 of Te Ture Whenua Māori Act 1993.

The Group financial statements have been prepared on a historical cost basis except for biological assets, certain investments, investment properties and derivative financial instruments which have been measured at fair value.

The information is presented in New Zealand dollars and all values are rounded to the nearest thousand.

NZ IFRS - Reduced Disclosure Regime For the purpose of complying with NZ GAAP, the Group is eligible to apply Tier 2 For-Profit Accounting Standards (New Zealand

equivalents to International Financial Reporting Standards Reduced Disclosure Regime ("NZ IFRS RDR")) on the basis that it is not publically accountable and is not a large for-profit public sector entity. The Group has elected to report in accordance with NZ IFRS RDR and has applied disclosure concessions.

The consolidated financial statements of Parininihi ki Waitotara Incorporation comply with New Zealand equivalents to International Financial Reporting Standards - Reduced Disclosure Regime ("NZ IFRS RDR") and other applicable Financial Reporting Standards, as appropriate for profit oriented entities.

Entities reporting The consolidated financial statements for the Group include Parininihi ki Waitotara Incorporation and its controlled entities.

Critical accounting estimates The preparation of financial statements in conformity with NZ IFRS RDR requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in note 4.

Financial statements presentation The Group has revised some prior year comparitive figures to align with current year disclosures.

(b) New accounting standards and interpretations Changes in accounting policy and disclosure The accounting policies adopted are consistent with those of the previous year. (c) Principles of consolidation (i) Subsidiaries The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of the Parent and the results of all subsidiaries as at and for the period ended 30 June each year (the Group).

Subsidiaries are all entities over which the Group has the power to govern the financial and operating policies, generally accompanying a shareholding of more than one-half of the voting rights. The existence and affect of potential voting rights that are currently exercisable or convertible are considered when assessing whether a Group controls another entity.

The financial statements of the subsidiaries, except for Taranaki Aquagardens Limited which has a 31 March balance date, are prepared for the same reporting period as the Parent, using consistent accounting policies. In preparing the consolidated financial statements, all intercompany balances and transactions, income and expenses and profit and losses resulting from intra-group transactions have been eliminated in full.

Subsidiaries which form part of the

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Group are consolidated from the date on which control is transferred to the Group.

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

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

Under the equity method, investments in joint ventures are carried in the consolidated Statement of financial position at cost plus post-acquisition changes in the Group’s share of net assets of the joint venture. Goodwill relating to a joint venture is included in the carrying amount of the investment and is not amortised. After application of the equity method, the Group determines whether it is necessary to recognise any impairment loss with respect to the Group’s net investment in joint ventures. Goodwill included in the carrying amount of the investment in joint ventures is not tested separately; rather the entire carrying amount of the investment is tested for impairment as a single asset. If impairment is recognised, the amount is not allocated to the

goodwill of the joint venture.

The Group’s share of its joint venture post-acquisition profits or losses is recognised in profit or loss, and its share of post-acquisition movement is recognised in other comprehensive income. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. Dividends receivable from joint ventures are recognised in the Parent entity’s Statement of comprehensive income as a component of other income.

When the Group’s share of losses in a joint venture equals or exceeds its interest in the joint venture, including any unsecured long-term receivables and loans, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the joint venture. (d) Foreign currency translation (i) Functional and presentation currency

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate as at the date of the initial transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. (e) Revenue recognition Sales of goods are recognised when they have been delivered and accepted by the customer.

Rental income is recognised upon issue of invoices, which are issued in advance for a six monthly period.

Milk proceeds are recognised in alignment with the processor Fonterra on a dollar per kilogram basis.

Interest income is recognised using the effective interest method.

Dividend income is recognised when the right to receive payment is recognised. (f) Income tax

Both the functional and presentation currency of Parininihi ki Waitotara Incorporation and its New Zealand controlled entities is New Zealand dollars ($).

The income tax expense charged to the Statement of comprehensive income includes both the current year's provision and the income tax effect of:

(ii) Transactions and balances

• Taxable temporary differences, except those arising from initial recognition of goodwill and other assets that are not depreciated; and

Transactions in foreign currencies are initially recorded by applying the exchange rates ruling at the date of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the reporting date.

• Deductible temporary differences to the extent that it is probable that they will be utilised.

Temporary differences arising from transactions, other than business

PARININIHI KI WAITOTARA INCORPORATION - NOTES TO THE FINANCIAL STATEMENTS

45

46

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) combinations, affecting neither accounting nor taxable profit are ignored.

Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the group and it is probable that the temporary difference will not reverse in the foreseeable future.

Tax effect accounting is applied on a comprehensive basis to all timing differences using the liability method.

A deferred tax asset is only recognised to the extent that it is probable there will be future taxable profit to utilise temporary differences.

Following the changes to subpart HI of the Income Tax Act 2004, an election was made to become a Mãori Authority, for tax purposes, with effect from 1 July 2004. The income tax rate applicable from the date of election was 19% and was reduced in the 2012 tax year to 17.5%.

Distributions to Incorporation shareholders are no longer deductible for tax purposes.

Any distribution of post 1 July 2004 reserves will include Mãori Authority Credits of up to 17.5% of the gross taxable amount in the hands of shareholders. Any distribution of pre 1 July 2004 reserves is tax free in the hands of shareholders.

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

The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and trading and available-for-sale securities) is based on quoted market prices at balance date. The quoted market price used for financial assets held by the Group is the current bid price; the appropriate quoted market price for financial liabilities is the current ask price.

The nominal value less estimated credit adjustments of trade receivables and payables are assumed to approximate their fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the Group for similar financial instruments. (i) Impairment At each reporting date, the Group reviews the carrying amounts of its assets to determine whether there is any indication that those assets

have suffered an impairment loss.

If any such indication exists, the

recoverable amount of the asset is

estimated in order to determine the extent of the impairment loss.

If the recoverable amount of a cash generating unit is estimated to be less than its carrying amount, the carrying amount of the cash generating unit is reduced to its recoverable amount.

An impairment loss is recognised immediately in the Statement of comprehensive income. Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset. The reversal of an impairment loss is recognised immediately in income. (j) Trade and other receivables Trade receivables are recognised initially at fair value and subsequently measured at amortised cost, less provision for doubtful debts.

Collectibility of trade receivables is reviewed on an ongoing basis.

Debts which are known to be uncollectible are written off. A provision for doubtful receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of receivables. The amount of the provision is the difference between the asset’s carrying amount and the present value of estimated future cash

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Accounting rates for property, plant and equipment

Straight Line

Buildings

1.03% - 33.33%

4.16% - 21.05%

(n) Investments and other

Plant and equipment

2.7% - 4%

2% - 67%

financial assets

Furniture and fittings

-

10% - 40%

Motor vehicles

-

6.5% - 30%

Leasehold improvements

1.01% - 30%

2% - 40%

The Group classifies its financial assets in the following categories: financial assets at fair value through profit or loss, loans and receivables, and financial assets at cost. The classification depends on the purpose for which the assets were acquired.

Management determines the classification of its assets at initial recognition and re-evaluates this designation at every reporting date, but there are restrictions on reclassifying to other categories when financial assets are recognised initially, they are measured at fair value, plus in the case of assets not at fair value through profit or loss, directly attributable transactions costs.

flows, discounted at the effective interest rate. The amount of the provision is recognised in the Statement of comprehensive income. (k) Biological assets

Diminishing Value

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

(i) Valuation of livestock

Livestock at balance date includes dairy cattle, beef cattle and sheep and they are valued at fair value.

Subsequent fair value changes are recognised in profit or loss. (l) Property, plant and equipment Property, plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to profit or loss during the financial period

in which they are incurred.

Land is not depreciated. Depreciation on other assets is calculated using the straight-line and diminishing value methods to allocate their cost, revalued or net book value amounts to their residual values over their estimated useful lives, as above: The asset's residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.

An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount (note 2(i)).

Gains and losses on disposal are determined by comparing proceeds with carrying amount.

These are included in the Statement of comprehensive income. (m) Quota assets

(i) Fishing quota

The fishing quota is initially recognised at cost. The quota is regarded as having an indefinite

Recognition and derecognition All regular purchases and sales of financial assets are recognised on trade date i.e., the date that the Group commits to purchase the asset. Financial assets are derecognised when the right to receive cashflows from the financial assets has expired or when the entity transfers substantially all the risks and rewards of the financial assets. If the entity neither retains nor transfers substantially all of the risks and rewards, it derecognises the assets if it has transferred control of the assets.

PARININIHI KI WAITOTARA INCORPORATION - NOTES TO THE FINANCIAL STATEMENTS

47

48

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Subsequent measurement (i) Financial assets at fair value through profit or loss This category has two sub categories: financial assets held for trading, and those designated at fair value through profit or loss on initial recognition. A financial asset is classified as held for trading if acquired principally for the purpose of selling in the short term or if so designated

by Management. The policy of Management is to designate a financial asset if there exists the possibility it will be sold in the short term and the asset is subject to frequent changes in fair value.

Derivatives are also categorised as held for trading unless they are designated as hedges. Assets in this category are classified as current assets if they are expected to be realised within 12 months of the Statement of financial position date. (ii) Loans and receivables Loans and receivables including loan notes are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market.

Such assets are carried at amortised cost using the effective interest rate method. Gains and losses are recognised in profit or loss when the loans and receivables are derecognised or impaired. These are included in current assets except for those with maturities greater than 12 months after balance date, which are classified as non-current.

(iii) Financial assets at cost Financial assets where a reliable fair value cannot be obtained are recorded at cost.

(o) Investment properties Commercial investment property, which includes land and buildings that earn rental income or appreciate in value, are initially measured at cost and subsequently measured at fair value. Gains or losses arising from changes in the fair value of investment property are included in the Statement of comprehensive income in the period in which they arise.

The fair value of the unimproved leased land is calculated by using a discounted cash flow model. The primary assumptions of the model are as follows: � Discount rate of 5.4% (2017: 5.7%);

� Cash flows increasing at the

rate of 2.1% (2017: 2.1%), but only uplifted in the model every seven years in line with the rental

consents and riparian margins). (p) Trade and other payables Trade and other payables are carried at cost and due to their short term nature they are not discounted. They represent liabilities for goods and services provided to the Group prior to the end of financial year which are unpaid and arise when the Group becomes obliged to make future payments in respect of the purchase of these goods and services. The amounts are unsecured and are usually paid within 30 days of recognition. (q) Borrowings Borrowings are initially recognised at cost, being the fair value of the consideration received net of issue costs associated with the borrowing. After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method.

All borrowing costs are recognised as an expense in the period they are incurred.

reset periods determined by

(r) Derivative financial

legislation;

instruments and hedging activities

� The time horizon is 30 years (2017: 30 years); and

� An assessment (and therefore potential adjustment) of the projected cash flows at the next rental reset period (being 2023/24), based on market knowledge and matters to be addressed during the next rental review (such as local council regulations regarding resource

The Group uses derivative financial instruments to hedge its risks associated with interest rate fluctuations. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently re-measured to fair value.

Derivatives are carried as assets

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

when their fair value is positive and as liabilities when their fair value is negative. The fair values of interest rate swaps are determined using a valuation technique based on cash flows discounted to present value using current market interest rates.

Any gains or losses arising from changes in the fair value of derivatives, except for those that qualify as cash flow hedges are taken directly to profit or loss for the year.

Cash flow hedges are used when they hedge the exposure to variability in cash flows that are attributable either to a particular risk associated with a recognised asset or liability or to a forecast transaction. The Group currently has cash flow hedges attributable to payment of interest on borrowings. The effective proportion of the gain or loss on the hedging instrument is recognised in other comprehensive income, while the ineffective portion is recognised in profit or loss.

The Group tests each of the designated cash flow hedges for effectiveness on a quarterly basis both retrospectively and prospectively using regression analysis. A minimum of 30 data points is used for regression analysis and if the testing falls within the 80:125 ranges, the hedge is considered highly effective and continues to be designated as a cash flow hedge.

At each balance date, the Group measures ineffectiveness using

the dollar offset method. For interest rate cash flow hedges, any ineffective portion is taken to other expenses in the Statement of comprehensive income.

If the hedging instrument expires or is sold, terminated or exercised without replacement or rollover, or if its designation as a hedge is revoked (due to it being ineffective), amounts previously accumulated in reserves remain in reserve until the forecast transactions occurs. (s) Share capital Ordinary shares are classified as equity. (t) Dividend distribution Provision is made for the amount of any dividend declared on or before the end of the financial year but not distributed at balance date.

Any dividend distribution to shareholders is recognised as a liability in the Group financial statements in the period in which the dividends are approved by the Parent's shareholders. (u) Employee benefits (i) Wages and salaries, annual leave and sick leave The provision for employee entitlements is recognised as a liability in the Statement of financial position. These benefits include salaries, wages and annual leave.

Where the payment is expected to exceed 12 months of balance date, the liability is recorded at its present value. Â Where the payment is expected to be less than 12 months, the provision is the amount expected to be paid.

(v) Leases The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement and requires an assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset. (i) Group as a lessee Operating lease payments are recognised as an expense in the Statement of comprehensive income on a straight-line basis over the lease term. Operating lease incentives are recognised as a liability when received and subsequently reduced by allocating lease payments between rental expense and reduction of the liability. (ii) Group as a lessor Leases in which the Group retains substantially all the risks and benefits of ownership of the leased asset are classified as operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognised as an expense over the lease term on the same basis as rental income.

PARININIHI KI WAITOTARA INCORPORATION - NOTES TO THE FINANCIAL STATEMENTS

49

50

3 FINANCIAL RISK MANAGEMENT

(a) Financial instruments by category Financial assets as per Statement of financial position

At 30 June 2018 Investments Trade and other receivables Cash and cash equivalents

At 30 June 2017 Investments Trade and other receivables Cash and cash equivalents

Financial liabilities as per Statement of financial position

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

At 30 June 2017 Borrowings Derivative financial instruments Trade and other payables

Assets at fair value through profit or loss $'000

Loans and receivables $'000

Financial assets held at cost $'000

17,198 17,198

4,507 6,851 11,358

1,076 1,076

18,974 18,974

4,408 7,544 11,952

1,008 1,008

Cash flow hedge $'000

Other financial liabilities measured at amortised cost $'000

1,636 1,636

65,433 6 65,439

1,497 1,497

68,787 54 68,841

4 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS The preparation of the financial statements requires the Committee of Management and Management to make judgements, estimates and assumptions that affect the reported amounts in the financial statements.

The Committee of Management and Management continually evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses.

The Committee of Management and Management bases its judgements and estimates on historical experience and on other various factors it believes to be responsible under the circumstances, the result of which form the basis of the carrying values of assets and liabilities that are not readily apparent from other sources.

The Committee of Management and Management has identified the following critical accounting policies for which significant judgments, estimates and assumptions are made. Actual results may differ from these estimates under different assumptions and conditions and may materially affect financial results or the financial position reported in future periods.

Further details of the nature of these assumptions and conditions may be found in the relevant notes to the financial statements. (a) Critical accounting estimates and assumptions The Group makes estimates and assumptions concerning the future.

The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below. (i) Unimproved lease land Parininihi ki Waitotara Incorporation recognises unimproved lease land in its Statement of financial position.

The land is valued internally by

Management using a discounted cash flow model. The growth rate and discount rate applied in this model is reviewed by PwC. The primary assumptions of the model are as follows: • Discount rate of 5.4% (2017: 5.7%); • Cash flows increasing at the rate of 2.1% (2017: 2.1%), but only uplifted in the model every seven years in line with the rental reset periods determined by legislation; • Time horizon of 30 years (2017: 30 years); and • An assessment (and therefore potential adjustment) of the projected cash flows at the next rental reset period (being 2023/24), based on market knowledge and matters to be addressed during the next rental review (such as local council regulations regarding resource consents and riparian margins). (ii) Impairment Finistere investment Management rely on the Finistere Investment management team to provide accurate and timely financial information to assess the performance of the investment.

Impairment is tested as and when the individual stocks of Finistere pass through milestone liquidity positions.

The stock is assessed as impaired when the entity does not pass to the next phase of liquidity. (b) Critical judgements in applying the entity’s accounting policies (i) Taxation The Group's accounting policy for taxation requires Management to make various judgements as to the types of arrangements considered to be a tax on income in contrast to an operating cost. Judgement is also required in assessing whether deferred tax assets and certain deferred tax liabilities are recognised in the Statement of financial position.

Deferred tax assets, including those arising from un-recouped tax losses and temporary differences,

are recognised only where it is considered more likely than not that they will be recovered, which is dependent on the generation of sufficient future taxable profits.

Deferred tax liabilities arising from temporary differences in investments, caused principally by retained earnings held in foreign tax jurisdictions, are recognised unless repatriation of retained earnings can be controlled and are not expected to occur in the foreseeable future.

Assumptions about the generation of future taxable profits and repatriation of retained earnings depend on Management's estimates of future cash flows. These depend on estimates of future production and sales volumes, operating costs, restoration costs, capital expenditure, dividends and other capital management transactions.

Judgements are also required about the application of income tax legislation. These judgments and assumptions are subject to risk and uncertainty, hence there is a possibility that changes in circumstances will alter expectations, which may impact the amount of deferred tax assets and deferred tax liabilities recognised in the Statement of financial position and the amount of other tax losses and temporary differences not yet recognised. In such circumstances, some or all of the carrying amounts of recognised deferred tax assets and liabilities may require adjustment, resulting in a corresponding credit or charge to the Statement of comprehensive income. (ii) Operating lease commitments Group as a lessor The Group has entered into commercial property leases on its investment property portfolio. The Group has determined that it retains substantially all the significant risks and rewards of the ownership of these properties primarily as the lease does not transfer ownership of the asset at the end of the lease term.

Thus the Group has classified the leases as operating leases.

PARININIHI KI WAITOTARA INCORPORATION - NOTES TO THE FINANCIAL STATEMENTS

51

52

5 REVENUE

2018 2017

$’000 $’000 Rental income 7,275 6,739 Milk proceeds 12,305 13,116 Fisheries lease income 1,729 2,735 Other income 3,663 5,949

24,972 28,539

6 OTHER GAINS / (LOSSES)

2018 2017

$’000 $’000 Loss on disposal of property, plant and equipment (63) (71) Gain / (loss) on investments at fair value (1,770) 1,731 Gain / (loss) on investments at cost (35) 275 Gain on investment property at fair value 709 25,299 Loss on foreign exchange - (6)

(1,159) 27,228

7 EXPENSES

2018 2017

$’000 $’000 Auditors' remuneration 116 66 Depreciation 1,842 1,791 Employee benefits 3,634 3,547 Farm operating expenses 6,760 6,867 Lease expenses 420 458 Members fees 303 265 Other expenses 2,576 2,647

15,651 15,642

PARININIHI KI WAITOTARA INCORPORATION - NOTES TO THE FINANCIAL STATEMENTS

53

8 FINANCE INCOME AND EXPENSES

2018 2017

$’000 $’000 Finance costs Finance income Net finance costs

2,812 (128) 2,684

2,990 (44) 2,946

9 INCOME TAX EXPENSE

2018 $’000

2017 $’000

(a) Income tax expense Current tax: Current tax on profits for the year Adjustments in respect of prior years Deferred tax (benefit) / expense Income tax expense Net gain / (loss) on revaluation of cash flow hedges

1,239 1,378 50 87 257 168 1,546 1,633 (24) 147

Profit from continuing operations before income tax expense Tax at the New Zealand tax rate (i) Tax effect of amounts which are not deductible (taxable) in calculating taxable income:

Other permanent differences

Changes in fair value of investments

Over / (under) provided in prior years

Income not subject to tax

Expenses not deductibe for tax purposes

6,458 1,257

Income tax expense

1,546

38,133 6,686

4 (343) 186 (4,730) 87 39 7 (21) 5 2 1,633

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

54

10 MĀORI AUTHORITY CREDIT ACCOUNT

2018 $’000

2017 $’000

Through direct shareholding

Through indirect shareholding

7,576 -

6,541 -

11 TRADE AND OTHER RECEIVABLES

2018 $’000

2017 $’000

Accounts receivable 4,507 Provision for doubtful receivables -

4,507

Other receivables - Prepayments 37 Dollar rewards 16

53

4,560

4,408 (90) 4,318 214 17 231 4,549

PARININIHI KI WAITOTARA INCORPORATION - NOTES TO THE FINANCIAL STATEMENTS

55

12 BIOLOGICAL ASSETS

2018 2017 Livestock $’000 $’000 Cattle Balance at the beginning of the year Increase due to purchases Decrease due to sales Changes in fair value Balance at the end of the year

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

8,284 462 (1,829) 4,028 10,945

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

10 15 11 1 (18) (9) 11 3 14 10 10,529 10,955 2018 Units

2017 Units

1,075 1,197 4,131 600 742 7,745

1,340 1,070 4,261 862 298 7,831

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

Quantity of sheep on hand Ewes Breeding rams

104 90 4 5 108 95

The Parent engages in sophisticated dairy farm management to preserve the value of stock.

Biological assets of the Group comprise dairy cattle, beef cattle and sheep.

The inputs applied in the valuation of the Group's biological assets have been categorised as level 2 in the fair value hierarchy.

56

12 BIOLOGICAL ASSETS (CONTINUED)

(a) Financial risk management strategies (i) Environmental and climatic risks The Group is exposed to climatic and other environmental risks. The Group's geographic spread of farms allows a degree of mitigation against adverse climatic (eg: drought and flooding) and environmental (eg: disease) effects at a regional level.

The Group has environmental practices aimed at compliance with environmental and other laws in New Zealand. (ii) Commodity price risk The Group is exposed to risks arising from fluctuations in the price and sales volume of livestock and dairy produce. (iii) Financing risk The nature of livestock farming means that most of the Group's agricultural revenue is received in the second half of the financial year, whereas financial expenses are incurred throughout the year. The Group manages this risk through budgeting and actively managing working capital requirements, as well as maintaining credit facilities at levels sufficient to meet working capital requirements.

13 PROPERTY, PLANT AND EQUIPMENT Capital

Freehold

Motor

Leasehold

$'000

$'000

Total $'000

365 (128)

1,818 (473)

39,670 (953)

81,479 (5,988)

4,703

237

1,345

38,717

75,491

18,092 (2,978)

7,484 (2,781)

375 (166)

1,863 (613)

6,894 (1,255)

83,921 (7,793)

48,667

15,114

4,703

209

1,250

5,639

76,128

48,667 4,339 (765) -

15,114 690 (170) (762)

4,703 327 (61) (687)

209 (31)

1,250 29 (28) (137)

5,639 967 (225)

76,128 6,730 (1,024) (539) (1,842)

52,241

14,872

4,282

178

1,114

6,381

79,453

385 -

52,241 -

18,521 (3,649)

7,701 (3,419)

375 (197)

1,852 (738)

7,860 (1,479)

88,935 (9,482)

385

52,241

14,872

4,282

178

1,114

6,381

79,453

WIP

At 30 June 2016

Cost Accumulated depreciation Net book amount At 30 June 2017 Cost Accumulated depreciation Net book amount

Furniture &

$'000

$'000

$'000

$'000

Buildings

equipment

201 -

14,737 -

17,906 (2,355)

6,782 (2,079)

201

14,737

15,551

546 -

48,667 -

546

Year ended 30 June 2018 Opening net book amount 546 Additions 378 Transfers / disposals Transfers from WIP (539) Depreciation charge (note 7) Closing net book amount 385 At 30 June 2018 Cost Accumulated depreciation Net book amount

Plant and

land

(a) Leasehold improvements

$'000

fittings

vehicles improvements

Leasehold improvements are derived from the purchase of improvements to the land made by Lessee's.

PARININIHI KI WAITOTARA INCORPORATION - NOTES TO THE FINANCIAL STATEMENTS

57

58

14 QUOTA ASSETS

Total $’000

Year ended 30 June 2017 Opening net book amount Accumulated amortisation and impairment Net book amount

15,620 15,620

At 30 June 2018 Opening net book amount Accumulated amortisation and impairment Net book amount

15,620 15,620

During the 2018 year there were no additions to share quota (2017: nil). There have been no disposals or impairment losses during the year (2017: nil). The fair value of the quota at 30 June 2018 is $45.5m (2017: $38.3m) as supplied by industry specialist Quota Management Systems Limited.

15 EQUITY ACCOUNTED INVESTMENTS Name of entity

Incorporated in

Equity holding

Port Nicholson Facilities Limited Partnership Port Nicholson Fisheries Limited Partnership

New Zealand New Zealand

33% 11%

The registered office for both Limited Partnerships is 132 Tirangi Road, Rongotai, Wellington 6022. (a) Joint ventures

2018 $’000

2017 $’000

Investment in joint ventures 1,732

1,732

2,545 2,545

(b) Movements in carrying amounts

2018 2017

$’000 $’000 Balance 1 July Share of profit after tax Cash distribution Carrying amount at the end of the financial year

2,545 2,650 980 954 (1,793) (1,059) 1,732 2,545

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

Incorporated in Balance date

PKW Farms LP New Zealand 30 June PKW Investments Limited New Zealand 30 June

Companies being removed: Te Oranga Livestock Limited New Zealand 30 June PKWF 2013 Limited New Zealand 30 June Taranaki Aquagardens Limited New Zealand 31 March JSP Limited New Zealand 31 March

Equity holding 2018 2017 % % 100 100 - - 100 100 100 100

100 100 100 100 100 100

PKW Farms LP is in the business of farming.

PKW Investments Limited is dormant.

Te Oranga Livestock Limited was in the business of livestock trading. The company ceased trading at 30 June and it is the Parents intention to remove the company from the Companies Register during 2018.

PKWF 2013 Limited was in the business of farming. The company ceased trading during 2014 and is in the process of being removed from the Companies Register, this will be completed in 2018.

Taranaki Aquagardens Limited is in-active and is in the process of being removed from the Companies Register, this will be completed in 2018. JSP Limited is in-active and is in the process of being removed from the Companies Register, this will be completed in 2018.

PARININIHI KI WAITOTARA INCORPORATION - NOTES TO THE FINANCIAL STATEMENTS

59

60

17 INVESTMENTS

2018 $’000

2017 $’000

Fonterra 17,198 18,974

17,198 18,974 Other financial assets carried at cost 1,076 1,008

1,076 1,008

18,274 19,982 Fonterra Co-operative Group Limited is measured at fair value using the listed share price at balance date.

Finistere is an unlisted equity instrument. The Finistere investment is recognised at an impaired cost of nil (2017: nil) and is related to an investment of nil (2017: USD $0.22m) that was unhedged at 30 June 2018.

18 EQUITY INSTRUMENTS

2018 $’000

2017 $’000

Balance 1 July - Add capital contributions - Add impairment reversal

- Deduct investments sold

-

- -

2,407 300 (2,707) -

Finistere investment derecognised: Proceeds from sale - Gain on sale -

2,679 2,679

Finistere

The start up companies in which Finistere invested were private companies and due to their nature were only revalued at different liquidity phases. None of these companies were listed with readily available fair value information.

The majority of the fund's investment were with start up ventures in the Medical Devices Industry.

The Group relied on the Finistere Investment management team to invest in companies that would provide the Group with a significant return on each investment. This return was realised when the start up companies were acquired by an investor.

The fund is in the process of being wound up and there are no investments remaining at 30 June 2018. An amount is held in escrow relating to an investment sold during the 2017 year, and any future release of these funds will be based on acheivement of milestones.

Impairment testing is based on entities within the portfolio meeting liquidity milestones.

INVESTMENT PROPERTIES 19

2018 $’000

2017 $’000

Investment properties unimproved land Balance at beginning of year 176,994 151,960 Net gain in fair value 529 25,034

177,523 176,994 Commercial property Balance at beginning of year 2,390 2,125 Net gain in fair value 180 265

2,570 2,390

180,093 179,384 A discounted cash flow model is used to assess the fair value of the lessor's interest in the unimproved land.

The valuation is not prepared by an independent valuer. The assumptions of the model are as follows: • Discount rate of 5.4% (2017: 5.7%); • Cash flows increasing at the rate of 2.1% (2017: 2.1%), but only uplifted in the model every seven years in line with the rental reset periods determined by legislation; • The time horizon is 30 years (2017: 30 years).

• An assessment (and therefore potential adjustment) of the projected cash flows at the next rental reset period (being 2023/24), based on market knowledge and matters to be addressed during the next rental review (such as local council regulations regarding resource consents and riparian margins).

Commercial properties are carried at fair value, which have been determined based on valuations performed

by Telfer Young as at 30 June 2018. Telfer Young is an industry specialist in valuing these types of commercial properties in the Taranaki region.

The fair value represents the amount at which the assets could be exchanged between a knowledgeable willing buyer and a knowledgeable willing seller in an arms length transaction at the date of valuation. In determining fair value, the expected net cash flows applicable to each property have been discounted to their present value using a market determined, risk adjusted, discount rate applicable to the respective asset.

The inputs applied in the valuation of the Group's investment properties have been categorised as level 3 in the fair value hierarchy.

PARININIHI KI WAITOTARA INCORPORATION - NOTES TO THE FINANCIAL STATEMENTS

61

62

BORROWINGS AND UNCLAIMED DIVIDENDS 20

2018 $â&#x20AC;&#x2122;000

2017 $â&#x20AC;&#x2122;000

Rabobank facility 60,446 63,766 Unclaimed dividends 4,394 4,112 Fonterra shareholder support loan 593 909

65,433 68,787 The Group utilises an interest only finance facility of $75.3m (2017: $75.3m) which includes an undrawn facility of $14.8m (2017: $11.5m) from Rabobank New Zealand Limited. The $75.3m is split into three facilities ($17.3m, $14m and $45m), which expire between 31 October 2019 and 20 February 2024. The interest charge on the drawn facility is currently at a variable rate based on an agreed margin over the BKBM rate (daily interbank rate). At 30 June that rate approximated 4.35% per annum (2017: 4.23%). The loan fee on the undrawn amount of the facility is 0.25% per annum.

The facility is secured by four first mortgages over certain leasehold and freehold interest in property, a registered first security agreement over all present and subsequently acquired personal property with a combined priority sum of $164m across all the facilities and unlimited guarantees from Proprietors of Parininihi ki Waitotara Block and PKW Investments Limited, and a general security agreement from PKW Farms LP, Proprietors of Parininihi ki Waitotara Block, PKW Farms GP Limited and PKW Investments Limited. The carrying value of financial assets pledged as collateral as at 30 June 2018 was $135.7m (2017: $131.7m).

The Fonterra loan as at 30 June 2018 of $0.6m (2017: $0.9m) was interest free for two seasons, until 31 May 2017.

The loan provided by Fonterra Co-operative Support, provided 50 cents for every kgMS produced from 1 June 2015 to 31 December 2015. The production needed to be backed by shares or counting vouchers held at close of business on 30 September 2015. Automatic repayments commenced when the Total Advance Rate Payments exceeded $6.00 and was applied to season-to-date production. The loan was interest free until 31 May 2017, after this Fonterra charged interest at Fonterra's cost of borrowing (up to a maximum of the published wholesale inter-bank rate plus 0.5% per annum).

21 DERIVATIVE FINANCIAL INSTRUMENTS

2018 $’000

2017 $’000

(655)

(647)

Non-current liabilities Interest rate swaps (981)

(1,636)

(850) (1,497)

Non-current assets Current liabilities Interest rate swaps

Interest bearing loans of the Group currently bear interest rates between 3.22% and 5.85%. In order to protect against rising interest rates the Group has entered into interest rate swap contracts under which it has a right to pay interest at fixed rates and to receive interest at floating rates. Swaps in place cover approximately 62% (2017: 64%) of the principal outstanding. The fixed interest rates range between 3.37% to 4.8% (2017: 3.7% to 4.8%) and the variable rate ranges from 1.4% to 1.55% above the 90 day bank bill rate, which at balance date was 2% (2017: 1.98%).

The interest rate swaps require settlement of net interest receivable or payable each 90 days. The settlement dates coincide with the dates on which the interest is payable on the underlying debt. All swaps are matched directly against the appropriate loans and interest expense. They are settled on a net basis.

The swaps are measured at fair value and all gains and losses attributable to the hedged risk are recognised in other comprehensive income. Interest expense is recognised in profit or loss.

The inputs applied in the valuation of the Group's interest rate swaps have been categorised as level 2 in the fair value hierarchy.

PARININIHI KI WAITOTARA INCORPORATION - NOTES TO THE FINANCIAL STATEMENTS

63

64

22 NET DEFERRED TAX ASSETS / (LIABILITIES)

Investment properties

$’000

Property, plant and equipment $’000

Livestock $’000

Other $’000

Total $’000

At 1 July 2016 Charged / (credited) to the Statement of comprehensive income At 30 June 2017

(371) (4)

(389) (69)

(13) 24

(206) (119)

(979) (168)

(375)

(458)

11

(325)

(1,147)

Charged / (credited) to the Statement of comprehensive income At 30 June 2018

(24) (399)

(17) (475)

(80) (69)

(135) (460)

(256) (1,403)

TRADE AND OTHER PAYABLES 23

2018 $’000

2017 $’000

Trade creditors 6 Other payables 2,688 Provision for dividend 1,557 GST payable / (receivable) 83

4,334

54 2,970 1,498 116 4,638

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

24 SHARE CAPITAL

2018 Shares

2017 Shares

2018 $’000

2017 $’000

Shares authorised, issued and fully paid

1,197,709

1,197,709

5,549

5,549

1,197,709

1,197,709

5,549 5,549

25 RESERVES AND RETAINED EARNINGS

2018 $’000

2017 $’000

(a) Reserves Capital reserve 24,591 Cash flow hedge reserve (1,321)

23,270

24,591 (1,207) 23,384

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

24,591 - 24,591

24,591 24,591

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

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

(1,901) 694 (1,207)

Capital reserve The capital reserve represents capital contributions that have been recognised and accounted for since establishment of the Parent.

Cash flow hedge reserve This reserve records the portion of the gain or loss on a hedging instrument in a cash flow hedge that is determined to be an effective hedge. These amounts retained in the cash flow hedge reserve at 30 June 2018 are expected to mature and affect profit and loss in subsequent financial periods. (b) Retained earnings Movements in retained earnings were as follows:

2018 $’000

2017 $’000

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

211,089 4,912 (1,557) 214,444

176,088 36,500 (1,499) 211,089

PARININIHI KI WAITOTARA INCORPORATION - NOTES TO THE FINANCIAL STATEMENTS

65

66

DIVIDENDS 26

2018 $’000

2017 $’000

Dividend proposed for 2018 is $1.30 per share (2017: $1.25) 1,557

1,557

1,499 1,499

27 CONTINGENCIES (a) Contingent liabilities Management is reviewing the accuracy of the historic GST treatment of certain transactions. This review may give rise to a GST obligation for the Group. No provision has been recorded in respect of this matter as the Group is yet to determine whether any obligation exists.

28 COMMITMENTS (a) Capital commitments In April 2018, Parininihi ki Waitotara Incorporation committed to invest in Te Pūia Tāpapa, a fund established by iwi and Māori organisations to invest in significant New Zealand businesses. As at 30 June 2018 the Group had approved a capital committment of $2m which is due on completion of key milestones by the fund.

Other committed capital projects include the construction of a new farmhouse dwelling.

2018 2017

$’000 $’000 Investments 2,000 Property, plant and equipment 380

2,380

2,200 2,200

The above balance has been committed in relation to future expenditure on capital projects and investments.

Amounts already spent on capital projects have been included as work in progress (refer to note 13).

(b) Lease commitments: as lessee The Group leases rural land under non-cancellable operating lease agreements. The lease terms are between 3 and 35 years, and the majority of lease agreements are renewable at the end of the lease period at market rate, except for one lease with a term of 35 years, this has an option to purchase the land at the end of the lease period subject to certain conditions.

The future aggregate minimum lease payments under non-cancellable operating leases are as follows:

2018 2017

$’000 $’000 Within one year Later than one year but not later than five years Later than five years Total

- 549 1,166 1,715

77 786 1,211 2,074

1,715

2,074

Commitments not recognised in the financial statements

29 RELATED PARTY TRANSACTIONS (a) Key management and personnel compensation

PARININIHI KI WAITOTARA INCORPORATION - NOTES TO THE FINANCIAL STATEMENTS

67

Key management personnel compensation for the year ended 30 June 2018 is set out below. The key management personnel are all the Committee of Management Members, Directors, the Shareholder Representative and the Chief Executive Officer of the Group and its related entities.

Honoraria Director fees Total

$’000 $’000 $’000 2018 Beverly Gibson

33

-

33

David MacLeod

30

-

30

Claire Nicholson Dion Tuuta (elected 1 November 2017) Hinerangi Edwards

Hinerangi Raumati-Tu'ua Taaringaroa Nicholas

30 20 33 60 33

- - - - -

30 20 33 60 33

Committee of Management Members fees

239

-

239

Darryn Ratana (Shareholder Representative)

4 -

-

5

4

5

Phillip Luscombe (Independent Director PKW Farms LP)

-

20

20

-

20

20

Hinerangi Raumati-Tu'ua (Port Nicholson Fisheries General Partner Limited)

Richard Krogh (Independent Director PKW Farms LP)

4

45

49

243 45 288

In August 2015, the Committee of Management undertook a review of the Committee remuneration. As a result of that review the Committee approved a total remuneration approach to governance fees based on the above table.

In addition to the standard governance fees, the following are paid: Chairs of Audit and Risk Committee, HR Committee and Parininihi ki Waitotara Trust receive an additional $2,500 of honorarium per annum.

Committee of Management Members appointed to board of Port Nicholson Fisheries General Partner Limited Directorships receive Director Fees of $5,000 per annum.

The total fees paid for the year differ from the amount showing in the Statement of comprehensive income due to the timing of prior year tax withheld and payable to the Inland Revenue, and the correction of an error in the prior period.

68

29 RELATED PARTY TRANSACTIONS (CONTINUED) (b) Other transactions with key management personnel or entities related to them Information on transactions with key management personnel or entities related to them, other than compensation, are set out below. These entities listed are approved suppliers with the Group.

Beverly Gibson is the Chair of Mahia Mai a Whai Tara Trust.

Claire Nicholson is a director of Sirona Animal Health Limited.

David MacLeod was a director of the Fonterra Co-operative Group Limited (ceased 2 November 2017), is the Owner / Managing Director of AJ Greaves Electrical Limited and Chair of Taranaki Regional Council.

Dion Tuuta is the Chairman and a Director of Koura Inc General Partner Limited (General Partner of Port Nicholson Fisheries Limited Partnership), Chief Executive Officer of Te Ohu Kaimoana and a Director of TSB Bank Limited.

Hinerangi Edwards is a Trustee of Agri Women's Development Trust.

Hinerangi Raumati-Tu'ua is a Director of Te Ohu Kaimoana Trustee Limited, a Director of Venture Taranaki, and a Director of Koura Inc General Partner Limited (General Partner of Port Nicholson Fisheries Limited Partnership).

Phillip Luscombe is a Director of Par Farms Limited (recipient of independent director fees) and a Director of NZ Farmers Livestock Limited.

Taaringaroa Nicholas, David MacLeod and Claire Nicholson are all committee members and shareholders of Parininihi ki Waitotara Incorporation.

Warwick Tauwhare-George is a Director of Koura Inc General Partner Limited (General Partner of Port Nicholson Fisheries Limited Partnership), and his spouse is the Owner / Director of Wild Cherry Design Limited.

2018 $’000

2017 $’000

Actual transactions that occurred with related parties: AF Greaves Electrical Limited 6 2 Par Farms Limited 4 Venture Taranaki (3) (10) Port Nicholson Fisheries Limited Partnership 3 4 Wild Cherry Design Limited 2 NZ Farmers Livestock Limited 1 6 Total 13 2

(i) Other transactions and balances No other related party balances were written off or forgiven during the year (2017: nil).

30 SUBSEQUENT EVENTS There were no events occurring subsequent to balance date which require adjustment to or disclosure in the financial statements.

31 STATEMENT OF ESTIMATED CURRENT MARKET VALUES

PARININIHI KI WAITOTARA INCORPORATION - NOTES TO THE FINANCIAL STATEMENTS

69

AS REQUIRED BY SECTION 276 (4) OF TE TURE WHENUA MĀORI ACT 1993

30 June 2018

$’000 Assets Current assets 21,940 Investments 64,564 Property, plant and equipment 102,042 Investment properties 180,093 368,639 Less liabilities Accounts payable and accruals 4,334 Term loans 60,446 Unclaimed dividends 4,394 69,174 299,465 Schedule of assets Investment properties Unimproved land value 177,523 Powderham Street, New Plymouth 1,700 Queen Street, Waitara 455 Miranda Street, Stratford 415 180,093 Investments Finistere Venture Capital Fund Port Nicholson Fisheries LP / Port Nicholson Facilities LP 1,732 Quota 45,529 Fonterra Co-op Shares 17,198 Mangaoapa Forest Partnership 105 64,564

TR70

PARININIHI KI WAITOTARA TRUST

TE PŪRONGO A TE HEAMANA HINERANGI EDWARDS

Ka rongo i ngā hau o Taranaki maunga, ka rongo i ngā tangi ā ō tātou tūpuna. Ka pā i te mahana o ngā ahi ki runga i a Taranaki, ka rongo i te mahana o te kāinga me ngā wawata ā ō tātou tauheke.

E mihi ana ki a koutou te whānau o Parininihi ki Waitotara me te tautoko ki to taratī i tēnei tau 2017-2018. Ka hoki ngā mahara ki rātou kua whetūrangitia. Nā rātou i waiho te ara hei hikoitanga mā tātou te hunga ora. Mauri ora ki a tātou.

Nōku te hōnore ki te tāpae atu tāku pūrongo Heamana e pā ana ki ngā mahi o te Tarati o Parininihi ki Waitotara mō te tau pūtea 2017/18.

Kua huri te āhua o tō tātou rōpū Shareholder Engagement i te hūnuku atu o Allie Hemara-Wahanui me te riro i a Mitchell Ritai te tūranga o General Manager Shareholder Engagement.

Ka hiahia ana au te whakanui i a Allie nāna te mahi nui mō te Tarati me tōna ngākaunui ki ngā kaiwhiwhi painga o te Tarati, ki te whānau whānui o PKW anō hoki. He kupu whakamihi tēnei ki a koe Allie, mōu ka whakatūria hei Pouhautū o te Tarati o Te Korowai o Ngāruahine.

He tohu te kopoutanga o Mitchell, me te putanga o Allie o tā PKW tāpaetanga ki te whanake ārahitanga o ngā uri o Taranaki. I te tau 2015 i riro i a Mitchell tā te

Tarati o PKW Karahipi Charles Bailey. Mā tā mātou mahi tautoko i ngā whāinga o ngā uri Māori o Taranaki, ka tautokona te ako, te tupu hoki o tēnā tangata, o tēnā tangata kia haria mai ai ō rātou pūkenga ki a tātou. Mā tēnei te hapori me te whānau e ako ai, e tupu ai hoki. He whakatinanatanga a Mitchell o tō tātou wawata, 'He Tangata, He Whenua, He Oranga' — arā, ko te manaaki me te whakatupu i tō tātou iwi mō te tōnuitanga — nā te mea ko Mitchell te pūkenga tuatahi o PKW ka whakamahia e te hinonga (ki te taha o ētehi atu he tūranga mana ārahitanga ō rātou). Kua pārekareka tātou nā tāna mahi ki tō Warwick taha ka ārahi i te tīma.

I tēnei tau i whakamahi pia mātāmua te PKW Group i tētehi kaupapa raumati i whakatūria i te taha o Halliwells, he pakihi

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ture i Taranaki ki te Tonga. I mahi a Campbell Gin, he Kaiwhiwhi o te Tarati o PKW hoki, ki te whare o PKW ki Ngāmotu, ā, e mahi ana ia ki te tira o Port Nicholson Fisheries (PNF). Ko PKW Inc tētehi kaipupuri o PNF. Ka haere tonu tō te Kōporeihana me te Tarati o PKW rapu huarahi kia whai angitu ai i roto o PKW, i waho hoki hei painga mō tō tātou hapori.

He tauira pai tēnei mea te ākonga mahi o ngā hua ka puta inā mahi ngātahi ai ki te taha o rōpū kē ki te whakapara i ētehi huarahi kia taea ai e te iwi te whai i ō rātou wawata. Nei ka tū takitahi te tangata arā ngā mahi e taea ana te whakatutuki, engari ki te honohono tātou, tētehi ki tētehi i roto i te whakaaro kotahi, he nui noa atu ngā whakawhiwhinga.

Kua whakapau kaha mātou ki te hanga i ēnei hononga rautaki ki ō tātou kaiwhakarato,

ki ētahi kaupapa kē atu hoki, ā, ko te whakapuakitanga o ētehi tāpaetanga karahipi te hua. Ka mihi ki ō tātou hoa karahipi — arā, ko Ballance, ko Marsh Insurance Brokers, ko Ravensdown, ko Meridian Energy, rātou ko Te Whare Wānanga o Te Upoko-o-teIka-a-Māui, ā, ka titiro whakamua ki te tautoko tonu i ngā kaipupuri hea, ki ō rātou whānau hoki ka takahi ai i ō rātou ara.

PŪRONGO AHUMONI Moni Whiwhi Hui katoa he $347,000 (TP16/17 $386,000) te moni whiwhi ka riro i te Tarati i tēnei tau. He $310,000 o tērā ka tāpaetia e te Kōporeihana o PKW (he $154,000 he whiwhinga pūtea moni hua me te $156,000 he tohanga), he $35,000 mai i rōpū kē atu me te $2,000 he moni hua nā te whare pūtea. Mai i tērā tau he $40,000 te whakahekenga whiwhinga pūtea, ā, ko te nuinga

$347

HE PARININIHI ORANGA KIPARININIHI WAITOTARAKI TRUST WAITOTARA - TE PŪRONGO TRUST - A CHAIR TE HEAMANA REPORT

arā ngā mahi e taea ana te tutuki, engari ki te honohono tētehi ki tētehi i roto i te whakaaro kotahi, he nui noa atu ngā whakawhiwhinga."

MANO

WHIWHINGA PŪTEA TAPEKE O TE TARATI

o tērā he whakahekenga o te moni ka whiwhi a rōpū kē atu.

Ngā Whakapaunga Hui katoa he $369,000 te whakapaunga pūtea o te Tarati.

Nā te hekenga o te rahi o te moni whiwhi kua ngana te Tarati ki te tāpae ratonga toitū. Ka whai whakaarohia e te Tarati te $22,000 moni ngaro mō te tau i te otinga i te whakatakoto i te rautaki mō ngā tau kei te tū mai. He utu nui, āhua hou hoki ko tā te Tarati kawe i ngā utu kaimahi, whakahaere hoki (TP17/18 $121,000). Mā tēnei mātou e āhei ai te whakatau i ngā utu tūturu o ā mātou mahi, ā, mā tērā e āta arotahi ai mātou ki te ine i ngā hua ka puta i te mahi o te Tarati ki te whakarato putanga mā te katoa ināianei, ā, haere ake nei.

Takune Mātauranga, Karahipi Mātauranga Matua hoki I whakangao mātou i te $196,000 (TP16/17 $199,000) e tautokona

HE ORANGA

" Nei ka tū takitahi te tangata

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" He āhuatanga hiranga o tā te Tarati wawata te tautoko i ō tātou tāngata i roto i tō rātou hapori me ngā mahi ahurea..."

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ai he 161 tāngata takitahi i ā rātou akoranga kura tuarua, mātauranga matua anō hoki.

hoki. He whakapikitanga tēnei i tā tērā tau whakangao i tēnei āhuatanga.

He whānui tonu ngā momo kaupapa, ngā aronga hoki e hāngai ana ki ēnei tohu, ā, ka whakamahara i a tātou he maha ngā ara e whakakahangia ai ō tātou hapori. Pērā i ngā tau kua hipa, ka tāria te wā kia tuku pūrongo mai ētehi o ā tātou ākonga ki te hui ā-tau o te Tarati.

He whakatau tēnei o tā tātou kaupapa karahipi; he pēnā anō te eke ki ngā paerewa e tika ana ka hāngai ki ngā taumata ako. Ko te pai ko te āpōpō.

I tautoko te pūtea i tā te Rōpū Wahine Māori Toko i te Ora whakanui i tō rātou huritau 65, ā, i āwhina i te whakatikatika, i te whakahou hoki i te kāuta o Muru Raupatu Marae kia whakaū ai ka āhei te tū hei wāhi hui mō ngā whakatupuranga e heke mai ana.

Takune Hapori, Takune Ahurea hoki He āhuatanga hiranga o te moemoeā o te Tarati te tautoko i ō tātou tāngata i tō rātou hapori me ngā ngohe ahurea, ā, i tēnei tau he $52,000 (TP16/17 $35,000) i whakawhiwhia i ngā takune ahurea e whā, i ngā takune hapori e rua

I riro i te Tarati Whakaari Ahurea Māori o Pātea te pūtea tautoko ki te whakahaere wānanga tikanga, reo, waiata, haka hoki mō tō rātou tira ka haere ki Itāria, ā, i hoatu pūtea āwhina mō ngā kākahu kura hou ki te kapa haka o Waitara ki te Rāwhiti. I tautoko hoki te Tarati i te hui o Taranaki Tū Mai i tū ai i Manaia, i Para Kore Marae Inc hoki ki te āwhina i tā rātou tautoko i ngā marae o Taranaki, i ngā rōpū hapori Māori anō hoki ki te whakatū i ngā tikanga para kore.

HE WHAKAARO WHAKAKAPI

Ka mihia te hunga kua ngaro atu i te tau nei. Nā rātou te tāpae nui ki ngā kaupapa ka kawea e te Tarati haere ake nei hei taonga tuku iho.

Ka titiro whakamua ki te tau e tū mai ana, ā, ka arotahi atu tonu ki te moemoeā o te Tarati i te taha o te tira Shareholder Engagement kia tautoko i ngā whāinga me ngā wawata o ngāi Māori o Taranaki, mā tā rātou whai i te māramatanga me te mātauranga whakawhiwhia ai ki ngā tohu, ki te whai wāhi rānei i ngā hui hapori, ahurea rānei, kaupapa hoki.

Nga mihi Hinerangi Edwards Heamana

$386,000

2018 WHIWHINGA PŪTEA

$347,000 2017 RAWA

$3.257M 2018 RAWA

$3.144M 2017 TAKUHE I TOHAINA

$234,000

2018 TAKUHE I TOHAINA

$248,000

HE ORANGA

2017 WHIWHINGA PŪTEA

HE PARININIHI ORANGA KIPARININIHI WAITOTARAKI TRUST WAITOTARA - TE PŪRONGO TRUST - A CHAIR TE HEAMANA REPORT

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PARININIHI KI WAITOTARA TRUST

CHAIR'S REPORT HINERANGI EDWARDS

Ka rongo i ngā hau o Taranaki maunga, ka rongo i ngā tangi ā ō tātou tūpuna. Ka pā i te mahana o ngā ahi ki runga i a Taranaki, ka rongo i te mahana o te kāinga me ngā wawata ā ō tātou tauheke.

E mihi ana ki a koutou te whānau o Parininihi ki Waitotara me te tautoko ki to taratī i tēnei tau 2017-2018. Ka hoki ngā mahara ki rātou kua whetūrangitia. Nā rātou i waiho te ara hei hikoitanga mā tātou te hunga ora. Mauri ora ki a tātou.

It is my privilege to present to you my Chair report on the activities of the Parininihi ki Waitotara Trust for the 2017/18 financial year.

We have seen a change in our Shareholder Engagement team this year with Allie Hemara-Wahanui moving on and Mitchell Ritai taking over the role of General Manager Shareholder Engagement.

I would like to acknowledge the considerable contribution Allie made to the work of the Trust and her commitment to trust beneficiaries and the wider PKW whānau.

Congratulations, Allie, on your appointment to General Manager of Te Korowai o Ngāruahine Trust.

Mitchell’s appointment, as well as Allie’s transition, are a sign of PKW’s contribution to leadership development of Taranaki uri.

Mitchell was the 2014 recipient

of PKW Trust’s Charles Bailey Scholarship. Our work, to support the aspirations of Taranaki Māori, enables individuals to learn and grow so that they may bring their skills back to us so that we too, as a community and whānau, will learn and grow. As the first PKW scholar to be employed by the organisation (alongside others in PKW governance roles), Mitchell is a living embodiment of our vision ‘He Tangata, He Whenua, He Oranga – sustaining and growing our people for prosperity. We are delighted to have him working with Warwick leading the team.

This year also saw the PKW Group employ its first intern in a summer programme established in partnership with South Taranaki law firm, Halliwells. Campbell Gin, who was also a PKW Trust recipient, joined us for several

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us can do if we stand alone but if we connect with each other and join together in a shared vision, we can achieve so much more."

weeks here in the PKW whare in New Plymouth, and is now working in the Port Nicholson Fisheries team, which PKW Inc part owns.

In association with PKW Inc, the trust will continue to seek ways of creating opportunities within PKW and beyond for the benefit of our community.

We are thankful to our scholarship partners - Ballance, Marsh Insurance Brokers, Ravensdown, Meridian Energy and Victoria University and look forward to continuing to support shareholders and their whānau as they make their paths in life.

Internships are a great example of what can happen when we work in partnership with others to bring about opportunities that enable our people to strive for their goals.

There is only so much any of us can do if we stand alone but if we connect with each other and join together in a shared vision, we can achieve so much more.

FINANCIAL REPORTING

We have worked hard to build these strategic partnerships with our suppliers and other organisations and the recent announcement of several new scholarship offerings is the result.

Revenue The Trust’s total income this year was $347,000 (FY16/17 $386,000). This was made up of a $310,000 contribution from PKW Incorporation ($154,000 in interest income and $156,000 as a distribution), $35,000 from third parties and $2,000 in bank interest. Income was reduced by $40,000 from last year, the majority of which is a reduction of money received by third parties.

Expenses The Trust’s total expenditure for

$347

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

" There is only so much any of

THOUSAND TOTAL TRUST INCOME

the year was $369,000. With the reduced revenue above, the trust has attempted to ‘cut its cloth’ and deliver offerings that are sustainable. The resulting loss of $22,000 for the year is being considered by the trust in its strategising for the future.

A significant and relatively new expense is due to the Trust now carrying its own weight when it comes to staff costs and administration (FY17/18 $121,000).

This enables us to establish the real cost of our activities and in turn will mean we put additional focus on measuring the impact of the Trust’s work in delivering outcomes that benefit us all, now and in the future.

Education Grants and Tertiary Scholarships This year we invested $196,000 (FY16/17 $199,000) supporting 161 individuals in their secondary and tertiary education studies.

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" Supporting our people in their community and cultural activities remains an important part of the Trust’s vision..."

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The range of subjects and interests covered by these awards is extensive and serves to reassure us that our communities will be strengthened in several different ways. As in previous years, we look forward to some of our scholars reporting back to our Trust AGM. This is a stipulation of our scholarship programme, as is meeting the standards expected regarding academic grades. The future is a positive one.

Community and Cultural Grants Supporting our people in their community and cultural activities remains an important part of the Trust’s vision and this year $52,000 (FY16/17 $35,000) was awarded in four cultural and two community grants. This was an increase on last year’s investment in this area.

The pūtea helped Aotea Māori Women’s Welfare League mark their the 65th anniversary and assist with repairs and renovations in the kitchen of Muru Raupatu

marae to ensure its capability to act as a gathering place for generations to come.

The Patea Māori Cultural Theatre Trust received support to hold tikanga, reo, waiata and haka wānanga for their travelling team to Italy and the Waitara East kapa haka were given assistance with the cost of new uniforms. The Trust also gave support for the Taranaki Tū Mai event held in Manaia and to Para Kore Marae Inc to help their work in supporting Taranaki marae and Māori community groups to implement zero waste practices.

FINAL THOUGHTS

I would like to acknowledge those who have passed on over the year and recognise that their contribution forms a legacy that the Trust will continue to carry on into the future.

I am looking forward to the year ahead and, together with the

Shareholder Engagement team, will continue to work in accordance with the Trust’s vision to support the goals and aspirations of Taranaki Māori, be it through their pursuit of knowledge and learning through educational study and achievement of qualifications or the involvement in community and cultural events, projects and initiatives.

Nga mihi Hinerangi Edwards Chair

2017 INCOME

$386,000 2018 INCOME

$347,000 2017 ASSETS

$3.257M 2018 ASSETS

$3.144M 2017 GRANTS PAID

$234,000

2018 GRANTS PAID

$248,000

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

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NGĀ KAIWHIWHI TAUTOKO SCHOLARSHIPS AND GRANTS

" I know PKW is more focused on farming than architecture, but it’s an interesting space and there’s opportunity to move with the future. I want to be involved with what’s happening."

Maia Ratana Charles Bailey Postgraduate Scholarship Recipient

CHARLES BAILEY POSTGRADUATE SCHOLARSHIP Recipient

Year

Qualification

Masters of Architecture (Profs)

Meteria Ratana

Janine Maruera

2017

Masters of Indigenous Studies

Arthur Rangi

Aaria Dobson Waitere

2016

Master of Conservation Science Orangipeka Whānau Trust

Maia Ratana

2018

Shareholder Support

MATEKITAWHITI CARR POSTGRADUATE SCHOLARSHIP Recipient

Dion Luke

Year

2018

Qualification

Master of Planning

Cereace Wallace 2017 Graduate Certificate in Arts (Applied)

Shareholder Support

Hina Lucy Luke

Patrick Rangihaeata

EDWARD TAMATI POSTGRADUATE SCHOLARSHIP Recipient

Year

Rauna Ngawhare 2018

Jamie Bodger 2017

Qualification

Shareholder Support

Master of Māori and Pacific Development

Toetoe Cunningham

Postgraduate Diploma in Teaching

Mary Elizabeth Graham

GLORIA KEREHOMA POSTGRADUATE SCHOLARSHIP Recipient

Year

Qualification

Masters of Public Health

Ihaka Robinson

Elizabeth Hooker

2017

Masters in Education

John Hooker

Benjamin Snooks

2016

Master of Interior Architecture

Charlie Snooks

Tami Cave

2018

Shareholder Support

Recipient Jay Short

Year

2018

Rere-No-A-Rangi Pope 2018

Qualification

Shareholder Support

Masters Degree in Software Development

Angela Te Wharemamaku Edwards

Master of Architecture (Prof)

Dianne Roka Short

PKW-BALLANCE UNDERGRADUATE SCHOLARSHIP RECIPIENTS Recipient

Year

Qualification

Shareholder Support

Michael Pritchard

2018

Master of AgriCommerce

Murray Elgar

Daniel Brooks

2017

Bachelor of Business Studies

David Nicel Macleod

Rerewha-i-te-rangi Pita

2017

Bachelor of Business Analysis

June Jackson

Daniel Brooks

2018

Bachelor of Business Studies

Steve Russell Gray

PKW-RAVENSDOWN UNDERGRADUATE SCHOLARSHIP RECIPIENTS Recipient

Year

Taiawhio Waipoua-Bryers 2018

Qualification

Shareholder Support

Qualification

Shareholder Support

Bachelor of Science (Technology)

Victoria Ann Kilgour

UNDERGRADUATE SCHOLARSHIP Recipient

Year

Aarona McGregor 2018 NZ Diploma in Business

Raupo April McGregor Whanau Trust

Aroha Broughton 2018 Bachelor of Teaching

Poi Pue and Ana Taura Pue Whanau Trust

Aaron Win

2018

Bachelor of Science

Malcolm Win

Moerangi Taylor

2018

Bachelor of Arts

Ropata Taylor

Thomas Bergen

2018

Bachelor of Physical Education Shelly Marie Pikikore Bergen

Manuirirangi Edwards 2017

Bachelor of Arts / Bachelor of Business Studies

Tehinganga Betty McLean

Moesha Katene

2017

Diploma in Graphic Design

Frances Kingi-Katene

Natasha Hutchieson

2017

Bachelor of Midwifery

Patsy Bannan

Taine Win

2017

Bachelor of Science

Malcolm Win

Tania Gilbert-Kennedy

2017

Bachelor of Social Services

Urutaahua Gilbert (Kiingi)

" I want to be able to build strong connections with both Ravensdown and PKW so that one day I can go and give back to them for making this opportunity possible for me."

Taiawhio Waipoua-Bryers PKW-Ravensdown Undergraduate Scholarship Recipient

HE ORANGA

PKW-VICTORIA UNIVERSITY POSTGRADUATE SCHOLARSHIP RECIPIENTS

PARININIHI KI WAITOTARA TRUST - SCHOLARSHIPS & GRANTS

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" I’d like to help people reconnect with their Taranakitanga and to utilize my skills for the iwi, that’s the ultimate goal."

Rerewha-i-te-rangi Pita PKW-Ballance Undergraduate Scholarship Recipient

TERTIARY GRANTS Recipient

Qualification

Shareholder Support

Aaron Cronin

Diploma in Heke Reo Māori

Wharehoka Wano

Abbey Urwin

Bachelor of Medicine and Surgery

Mereaina Noreen Kirkwood

Aaliyah Thocolich

Bachelor of Health Sciences

Irene Thocolich

Adriana Hunt Bachelor of Teaching (MMP)

Evelyn Te Ringakaha Pullen Whanau Trust

Alayna Brooks

Charmaine Puru

Bachelor of Nursing

Alexander Walsh Masters in Business Administration

Margaret Te Ruihi Walsh (nee Broughton)

Alexandra Tahau

Bachelor in Commerce

Robyn Davey

Alexis Bright

Certificate in Healthcare

Gary Ngaia

Alicia King

Bachelor of Education

Bernard King

Alison Brooks

Bachelor of Law & Bachelor of Science

Marylinda Brooks

Alison Cole

Certificate in Rumaki Reo

Val Hawe

Amanda Rukuwai

Post Grad Diploma of Business Administration

Amanda Rukuwai Donnelly

Anahera Millar-Potaka Bachelor of Health Science

Te Kotahitanga Ruawai-Hamilton Whanau Trust

Andrew Lowry

Master of Engineering

Ruth Maha

Angus Elkington

Doctor of Clinical Psychology

Elkington Trust

Anna Swann

Masters of Education

Patricia Bodger

Aotahi Keepa

Certificate in Health Science

Kenneth Royce Tohia

Ariana Cann

Bachelor of Radiation Therapy

Kenneth Tohia

Arihia McGregor Graduate Diploma in Psychology

Nga Uri o Maaka Herewini Haapu raua ko Mareikura Reremoana Trust

Asher Katene

Bachelor or Arts

Mahanakiterangi Marina Manuirirangi

Ashleigh Kauika

Bachelor of Nursing

Johanna Kauika

Bobby Luke

Doctor of Philosophy in Creative Technologies

Robert Campbell

Bonita Bigham

Masters in Fine Arts

Hinewaito Bigham

Bree Nilsen

Bachelor of Laws & Bachelor of Arts

Eileen Conroy

Bree-Anna Langton

Bachelor of Medicine and Surgery

Rex Langton

Callum Taylor

Bachelor Of Veterinary Science

Jennifer Joan Bennett

Campbell Gin

Masters of Business and Management

Campbell Gin

77 Qualification

Shareholder Support

Carol Webb

Diploma in Beauty Therapy

Johanna Kauika

Catherine Booker

Diploma in Maori Governance and Leadership

Harry Rangihuatau Dansey

Celecia Katene

Bachelor of Nursing

Mihipeka Katene

Charlene-Jackwalyn Chase

Bachelor of Education (He Korowai Akonga) Maria Rose Chase

Chiquita Ngeru

Bachelor of Social Science

Edward Ngeru

Chontell Lewis

Bachelor in Law

Shane Paul Te-Ratanarangitahua Ruihi

Chyna-Li Bourne

Certificate of University Preparation

Therese Bourne

Courtney Sullivan

Bachelor of Medicine and Surgery

Michael Sullivan

Daniel Tauru

Certificate in Small Business Management Steven Paul Tauru

Danyon Doeg Bachelor of Social Sciences

Edward Rongomai Ira Tamati Whanau Trust (Dawn Tamati)

Destiny Hodges-Paul

Bachelor in Health Science

Terewanga Waimaria Hodges

Detroit Hoyes

Diploma in Outdoors Adventure Management

Nancy-Lee Katene

Diana Lewer

New Zealand Diploma in Early Childhood Hana Newton Whanau Trust Education and Care

Drew Davey

Bachelor of Medicine & Bachelor of Surgery Donald Tuuta (Carol Davey)

Dwayne O'Carroll

Master of Arts

Christine O'Carroll

Dylan Fage~

Bachelor of Design with Honours

Te Ruangakau Ratahi Whanau Trust

Elly Wilson

Diploma in Tourism and Travel

Delwyn Hancock

Emire Khan-Malak

Bachelor of Applied Mangement

Nanny Rubys Whanau Trust

Emma Hau

Bachelor of Midwifery

Kenneth Mark Hau

Erana Edwards

Bachelor of Sport

Te Hinganga Betty McLean

George Miles

Bachelor of Health Science (Occupational Therapy)

Ngaraiti Rukuwai

George Wheatley

Tertiary Foundation Certificate

Mereaina Noreen Kirkwood

Georgina Manaia

Bachelor of Bicuturalism Social Work (Ngā Poutoko Whakarara Oranga)

Pandra Reione Reihana

Gina Warren

Diploma in Acute Prescribing

Pehi Keith Warren Whanau Trust

Grace Hunt Graduate Diploma in Teaching (Primary)

Evelyn Te Ringakaha Pullen Whanau Trust

Haydn Te Ruki

Bachelor of Applied Management

Hayden Claude Te Ruki

Heather Atutahi

Bachelor of Community Health

Heather Atutahi

Hunter Paranihi

Bachelor of Commercial Music

Allan Paranihi

Irie Schimanski

Doctor of Clinical Psychology

Charles Hunt

Iyanah Taylor-Mason

Bachelor of Nursing

Toherangi Whanau Trust

Jacinta Seed

Bachelor of Health Science

Rongomai Wharehoka

Jack Duncan

Bachelor of Commercial Music

Eileen TePaea McNamee

Jack O'Brien

Bachelor of Commerce

Robert O'Brien

Jahdine Tapara

Master of Education

Whiro Simon

Jaren Roy

Bachelor of Commerce

Rosalie Mae Rangi

Jasmine Kelly

Bachelor of Teching (ECE)

Ross Kelly

Jazmine Tamaiparea

Bachelor of Design Innovation

Mary Holly Tamaiparea

Jenny Crown

Master of Māori and Pacific Development

The Pehikino Crown Whanau Trust

Jesse Chittenden-O'Leary

Bachelor of Design Innovation

Roberta Walden

Joce McLean

Diploma in Conveyancing

Te Hinganga Betty McLean

Jordan Quinnell

Bachelor of Māori Visual Arts

Sina James Whanau Trust

Joshua Nicholson

Bachelor of Medicine & Bachelor of Surgery Claire Rosalind Nicholson

HE ORANGA

Recipient

PARININIHI KI WAITOTARA TRUST - SCHOLARSHIPS & GRANTS

TERTIARY GRANTS (CONTINUED)

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" My vision is to be running my own digital design business in five years – creating things that matter, things that make a difference."

Moesha Katene Rāwiri Undergraduate Scholarship Recipient

TERTIARY GRANTS (CONTINUED) Recipient Joshua Solomon

Qualification Shareholder Support Bachelor of Medicine & Bachelor of Surgery Josie Bigham

Jurnee Scouller

Bachelor of Laws & Bachelor of Arts

Mum's Mob Whanau Trust

Katrina Tarawhiti-Hape

Diploma of Enrolled Nursing

Fred Pau Tapara

Kavahna Cooper-Ruri

Heke Kaitiakitanga Putaiao

Basil Tumoana

Kayla Hemara-Wahanui

Bachelor of Nursing

Te Rawanake Coles

Kealyn Marshall-Nyman

Bachelor of Arts & Bachelor of Teaching

Maria Toro

Keanu Piki

Bachelor of Science

Maria Maringi Piki

Kenny Hau

Bachelor of Medicine & Bachelor of Surgery Kenny Hau

Kini Serubasaga

Bachelor of Nursing

Lucille Kathryn Gawler

Kylie Hough

Bachelor of Nursing

Theodore Roy Hough

Kylie Rei

Bachelor of Creative Technology

Spencer Rei

Lania Orr

Bachelor of Nursing

Te Ahurei Pirihira Whanau Trust

Launa-Rae Tairi

Certificate in Health and Well Being

Maria Maringi Piki

Lei Davis

Certificate in Rumaki Reo

Lei Ann Davis

Lena Kemp

Bachelor of Health Sciences

Jan Bezems

Liam Chamberlain

Bachelor of Tourism Management

Rosalie Mae Rangi

Libby White

Bachelor of Design with Honours

Pereni Belle Tupe

Lilly Taylor

Doctor of Chemistry

Sam Wallis Kahui

Linda Elgar

Bachelor of Arts

Mum's Mob Whanau Trust

Logan Murray

Bachelor of Science

Ani Teinati Murray

Louise Jansen

Bachelor of Physiotherapy

Anthony Piki Wallace Broughton

Luke Abbott

Bachelor of Arts & Science

Vernon Arthur Rangi

Lyla Atutahi

New Zealand Diploma in Legal Executive Studies

Lyla Atutahi

Macy Duxfield

Bachelor of Law & Bachelor of Arts

Mary Wakefield

Madelyne Slater-Carter

Bachelor of Health Sciences

Christine Margaret Mathieson-Picken

Maia-te-oho Holman-Wharehoka Bachelor of Architectural Studies

Rongomai Wharehoka

Maioha Kara

Bachelor of Fine Art with Honours

Esther Te Tauri

Makuini Paulger

Bachelor of Law & Bachelor of Arts

Donna Paulger

Marama Gilbert

Diploma in Heke Reo

Urutaahua Kingi Gilbert

Matiu Payne

Doctor of Māori Studies

Roy Tikao

Matt Nicholson

Bachelor of Commerce

Claire Nicholson

79 Qualification Shareholder Support Diploma in Applied Addictions Counselling May Maitapere Kapo Edmonds

Megan Hancock

Bachelor of Business Analysis & Bachelor Delwyn Hancock of Laws (Hons)

Mereana Anderson

Bachelor of Design

Te Hunuahuna Parana Trust

Michael King-Tabuteau

Bachelor of Arts

Robert Hurunui

Mina Mathieson

Diploma in Software Development

Mina Mathieson

Mitchell Langton

Bachelor of Physical Education

Rex Langton

Morgan Watt

Bachelor of Social Sciences

Vern Rangi

Mosalene McGregor Bachelor of Arts

Topaki Rangimaria Arahanga Whanau Trust

Narelle Tairi

Certificate in Freight and Logistics

Maria Maringi Piki

Nga Roma Poa

Bachelor of Design

Wiremu Whanau Trust

Nicole Loper

Bachelor of Medicine and Surgery

Clesta Loper

Noah Kemp

Bachelor of Law & Bachelor of Arts

Jan Bezems

Noel Morris

Bachelor of Applied IT

Elkington Trust

Nopera Rikihana

Post Grad Diploma in Poutahu Whakahaere Grace Terewai Moffatt

O'Jay Bailey

Bachelor of Nursing

Michael Matoe

Paula Kamo

Graduate Certificate in Arts (MÄ ori Studies)

Te Ahi Omrika Matilda Kamo (nee Kopu)

Phoebe MacLeod

Bachelor of Health Science

David MacLeod

Pianika Taylor

Bachelor of Health Sciences

Patrick Louis Taylor

Poipoia Te Taonga Poa

Bachelor of Commerce

Wiremu Whanau Trust

Portia Harrop-Marriner

NZ Certificate in Creativity

Gary Ngaia

Rama Ashford

Post Grad Diploma in Teaching MÄ ori Medium (Te Aho Paerewa)

Patricia Gaye Ratana

Raukura Doyle

Bachelor of Health & Bachelor of Laws

Betty Anderson

Renee Wharepapa

Bachelor of Business

Natalie Andrews

Reuben Katene

Bachelor of Dental Surgery

Josie Bigham

Rhys Dooney

Bachelor of Science

Patricia Jill Affleck

Rhys Muru-King

Bachelor of Media Arts (Fashion Design)

Bernard King

Rimu Barriball

Bachelor of Science in Zoology

Wayne Barriball

Ripeka Kennedy

Bachelor of Social Services

Urutaahua Gilbert

Samantha Paki Paki-Utiera

Bachelor of Commerce

Marie Paki Paki

Samme-Sara Harrop-Marriner

NZ Certificate in Animal Technology (Vet Nursing Assistant)

Gary Ngaia

Sarah Cornes

Bachelor of Medicine & Bachelor of Surgery Elizabeth Iripete (Rei) Forbes

Sarah King

Bachelor of Social Sciences

Monica Green

Shaan Hauraro

Apprenticeship in Brick & Block Laying

Richard Waiwiri

Shamus Langton

Bachelor of Design Innovation

James Langton

Sharyn Anderson

Certificate in Beauty Therapy

Te Wehi Kotokoto Whanau Trust

Sheridan Farley

Certificate in Health and Wellbeing & Social and Community Services

Ramona Rongonui

Simon Chamberlain

Bachelor of Laws

Rosalie Mae Rangi

Sylvana Taylor Wiari

Bachelor of Bicultural Social Work

Dalrine Sylvana Firmin

Taine Paki

Bachelor of Landscape Architecture

Ihaka Robinson

Takarangi Willams

Apprenticeship as Electrician

George Koroniria Okeroa

Takaterangi O'Sullivan

Certificate in Physiotherapy

Dion Rollo

Tama-Carlos McGuigan

Apprenticeship in Joinery/Kitchen Manufacture

Malcolm McGuigan

HE ORANGA

Recipient May Edmonds

PARININIHI KI WAITOTARA TRUST - SCHOLARSHIPS & GRANTS

TERTIARY GRANTS (CONTINUED)

80 TERTIARY GRANTS (CONTINUED) Recipient

Qualification

Shareholder Support

Tamahina Sheridan

Bachelor of Arts

Mohi Apou

Tammy Wana Bachelor of Law

Ngakawe and Hauraki Wana Whanau Trust

Tamu McGuigan

Apprenticeship in Painting & Decorating

Malcolm McGuigan

Tane Pue-Skellern

Diploma of Hotel Management

Brenda Pue

Taylah King

Bachelor Arts in Māori Studies

Stephen King

Taylor Mildenhall

Bachelor of Nursing

Lynne Williams

Tazmyn Katene-Ashford

Bachelor of Public Policy, Law and Criminology

Nanci-Lee Hinerakei Katene

Te Aroha Taylor

Bachelor of Nursing

Te Teira Whanau Trust

Te Haana Paewai

Bachelor of Māori Visual Art

Raymond William Edwards

Te Kahurangi Skelton

Bachelor in Health Science

Moana Skelton

Te Raunatanga Williams-Edwards Bachelor of Teaching Māori Medium

(Te Aho Tatairangi)

Ray Edwards

Te Waimoko Edmonds

Bachelor of Nursing

Justine Heta

Te Wainuiarua Poa

Bachelor of Laws & Bachelor of Arts

Wiremu Whanau Trust

Te Wehi Graham-Ratana

Apprenticeship in Carpentry

Meteria Ratana

Teiarere Stephens

Bachelor of Science

Wira Ruakere

Terewai Rikihana

Masters of Professional Practice (Education Endorsement)

Grace Terewai Moffatt

Tiana-Vai Taamaru

Bachelor of Public Policy and Anthropology Rawinia Leatherby

Toni Ramanui

Bachelor of Education

Thomas Turetangata Malcomb Kara

Tracey Moore

Bachelor of Social Work

Jessie Wikitoria Beamish

Tuarua Manaia

Bachelor of Health Science (Occupational therapy)

Marty Manaia

Turanga Morgan-Edmonds

Diploma in Tohu Māoritanga

Riwai Morgan Whanau Trust

Tyler Morris

Post Grad Diploma in Applied Informatics

Elkington Trust

Vaun Kahui

Bachelor of Business

Neville Bevan Kahui

Vickie Kahu Pukoro

Post Grad Diploma in Education

Tiri Bailey-Charles Bailey Family Trust

Wiremu MacFater

Doctor of Surgery

Hera (Sally) MacFater

Xavier Langton

Bachelor of Commerce

Rex Bruce Langton

" I am excited about the work experience and industry networks that I am going to have access to, which will hopefully lead to me gaining a job, but it is also a chance for me to reconnect with my Taranaki whānau, the whenua and the mounga. I am so grateful to be selected for this role."

Campbell Gin Tertiary Grant Recipient

81

Shareholder Support

Ethan Langton

Rex Bruce Langton

George Tumai Tumohe Wheatley

Mereaina Kirkwood

Iyahah Taylor-Mason

Toherangi Whanau Trust

Izayah Graham

Charmaine Hoeta

Jorja Ehrhorn

Diane Mary Ratahi

Kaira Heni Whitinui

Angus Kahui

Kobe Luke

Estate of Rawinia Kipa/Skipper

Lewis Tumanako Ritai

Pamela Te Urumairangi Pirihi Waru Ritai

Miriama Waiwiri-Hetet

Gerry Waiwiri

Ngapera Tapuikura Parata

Edward Rongomai Ira Tamati Whānau Trust

Nicholas Maxwell Tipene Irving

Judy Mary Richards

Patrick Takurua

Richard Takurua

Raukura Ranginiwa

Ranginiwa Rangitapu Whānau Trust

Rawinia Manuel

Wirape Ruakere

Samantha Mary Ngapera Irving

Judy Mary Richards

Sara Dooney

Patricia Jill Affleck

Shaye Leigh Witehira

Matau Matenga Baker

Summer Parekaihina Hemara-Wahanui

Patricia Hemara-Wahanui

Tarawau Kapa

A.T.G. Abraham Whanau Trust

Te Ahiwera Ngaia

Henare Ngaia

Te Kahu Fraser

Welda Fraser

Te Kahurangi Skelton Pue

Moana Skelton

Te Rohonui Paratene

Denny Ross

Te Wainui Mansell

Margaret Ngawaina Taylor

Tiahorangi Garrick Morgan-Edmonds

Riwai Morgan Whānau Trust

Toni Baker

Estate of Rawinia Kipa/Skipper

Tre Robinson

Irene Robinson

Tristan Tyrel Katu

Judy Mary Richards

Tyla Baker

Estate of Rawinia Kipa/Skipper

Tyrell Phillips

James Pokere

Tyrese Mason

Toherangi Whanau Trust

Vince Travis Pohe Ropitini

Janice Ann Ropitini

Waerata Preston

Peggy Preston

Waitangi Ratu-James

Hina Lucy Luke

Wiremu Ratu-James

Hina Lucy Luke

Zody Takurua

Richard Takurua

Adelaide Campbell

Robert Wahawaha Campbell

TARANAKI COMMUNITY GRANTS Aotea Māori Womens' Welfare League

Patea Māori Cultural Theatre Trust

Muru Raupatu Marae

Taranaki Tū Mai

Para Kore

Waitara East Kapahaka Team

HE ORANGA

Recipient

PARININIHI KI WAITOTARA TRUST - SCHOLARSHIPS & GRANTS

NATIONAL CERTIFICATE IN EDUCATION ACHIEVEMENT

20 18 PARININIHI KI WAITOTARA

TRUST

FINANCIAL STATEMENTS for the year ended 30 June 2018

84

PERFORMANCE REPORT - 30 JUNE 2018

Auditor report

85

NON-FINANCIAL INFORMATION Entity information 88 Statement of service performance

89

FINANCIAL INFORMATION Statement of financial performance

90

Statement of financial position

91

Statement of cash flows

92

Statement of accounting policies

93

Notes to the performance report

94

1 Analysis of revenue

94

2 Analysis of expenses

95

3 Analysis of assets and liabilities

96

4 Property, plant and equipment

97

5 Accumulated funds

98

6 Commitments and contingencies

98

7 Related party transactions

99

8 Events after the balance date

99

Chartered Accountants

►

► ►

►

►

PARININIHI KI WAITOTARA TRUST - FINANCIAL STATEMENTS

85

86

Chartered Accountants

►

► ► ► ►

►

►

►

► ►

Chartered Accountants

►

►

PARININIHI KI WAITOTARA TRUST - FINANCIAL STATEMENTS

87

88

Parininihi ki Waitotara Trust ENTITY INFORMATION FOR THE YEAR ENDED 30 JUNE 2018

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

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

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

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

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

Legal Name of Entity: Parininihi ki Waitotara Trust Type of Entity and Legal Basis (if any): Charitable Trust Registration Number: CC36303 Entity Structure: Governance: The Parininihi ki Waitotara Trustees are the Committee of Management members of the Parininihi ki Waitotara Incorporation, plus a representative elected by the shareholders at the annual general meeting.

Main Sources of the Entity's Cash and Resources: The Parininihi ki Waitotara Incorporation makes an annual grant calculated on 10% of the dividend paid to shareholders. The Parininihi ki Waitotara Trust also draws interest from a $2.9m loan to Parininihi ki Waitotara Incorporation.

Main Methods Used by the Entity to Raise Funds: The Parininihi ki Waitotara Trust is not an active fund raiser.

Entity's Reliance on Volunteers and Donated Goods or Services: The Parininihi ki Waitotara Trust is not reliant on volunteers or donated goods or services.

Physical Address: 35 Leach Street New Plymouth, New Zealand Postal Address: PO Box 241, New Plymouth 4340, New Zealand Phone: +64 (06) 769 9373 Fax: +64 (06) 757 4206 Email: office@pkw.co.nz Web: www.pkw.co.nz Facebook: www.facebook.com/ Parininihi-ki-Waitotara-Incorporation377456922465330/?ref=page_ internal

STATEMENT OF SERVICE PERFORMANCE FOR THE YEAR ENDED 30 JUNE 2018

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

Output 1. Active Participation

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

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

The accompanying notes form part of these financial statements.

Actual This Year $'000

232 4 2 238

196 32 20 248

Budget This Year $'000

150 3 2 155

173 25 10 208

Actual Last Year

$'000

197 - 5 202

199 35 234

PARININIHI KI WAITOTARA TRUST - FINANCIAL STATEMENTS

89

90

STATEMENT OF FINANCIAL PERFORMANCE FOR THE YEAR ENDED 30 JUNE 2018

Note

Revenue Grants Interest, dividends and other investment revenue

1 1

Actual This Year $'000

Budget This Year $'000

Actual Last Year $'000

191 156

170 191

225 161

Total Revenue 347 361

386

Expenses

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

87 234

121 248

153 208

Total Expenses 369 361 Surplus/(Deficit) for the Year (22)

The accompanying notes form part of these financial statements.

-

321 65

STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2018

Note

Actual This Year $'000

Budget This Year $'000

Actual Last Year $'000

Assets

Current Assets Bank accounts and cash 3 82 67 Related party receivables 3 3,055 3,072 Other current assets - - Total Current Assets 3,137 3,139

105 3,138 8 3,251

Non-Current Assets Property, plant and equipment 4 Total Non-Current Assets

7 7

- -

6 6

Total Assets

3,144

3,139

3,257

Current Liabilities Creditors and accrued expenses 3 Total Current Liabilities

20 20

- -

111 111

Total Liabilities

20

-

111

Total Assets less Total Liabilities (Net Assets)

Accumulated Funds

Accumulated surpluses 5 Reserves Total Accumulated Funds

3,124

3,139

3,146

1,841 1,283 3,124

1,856 1,283 3,139

1,863 1,283 3,146

Liabilities

The accompanying notes form part of these financial statements.

PARININIHI KI WAITOTARA TRUST - FINANCIAL STATEMENTS

91

92

STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2018

Actual This Year $'000

Budget This Year $'000

Actual Last Year $'000

Cash Flows from Operating Activities Cash was received from: Grant's received 35 20 76 Interest received 156 191 95

191 211 171 Cash was applied to: Payments to suppliers (6) (52) (25) Payments to employees (106) (101) Payments to grant recipients (270) (208) (233)

(382) (361) (258) Net Cash Flows from Operating Activities Cash Flows from Investing and Financing Activities Cash was applied to: Payments to PKW Farms LP Receipts from Parininihi ki Waitotara Incorporation

(191)

(150)

(87)

(67) - 235 112 168 112

114 114

Net Cash Flows from Investing and Financing Activities

Net Increase/(Decrease) in Cash Opening Cash Closing Cash

168

112

114

(23) 105 82

(38) 105 67

27 78 105

This is represented by: Bank Accounts and Cash

82

67

105

The accompanying notes form part of these financial statements.

STATEMENT OF ACCOUNTING POLICIES FOR THE YEAR ENDED 30 JUNE 2017

Basis of Preparation

Bank Accounts and Cash

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

The Performance Report is prepared under the assumption that the entity will continue to operate in the foreseeable future.

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

Revenue

Property, plant and equipment

Grant income is accounted for depending on whether or not any conditions are attached. Where no conditions are attached, the revenue is recognised on an accruals basis.

Where conditions are attached, the revenue is recognised once the conditions are satisfied. Interest income is recognised on an accruals basis. Interest income is accounted for when cash is received. This is revenue from the loan to PKW Incorporation and from cash balances in the bank.

All property, plant and equipment is stated at historical cost less amortisation.

Goods and Services Tax (GST) Parininihi ki Waitotara Trust is not registered for GST. Therefore amounts recorded in the Performance Report are inclusive of GST (if any).

Income Tax Parininihi ki Waitotara Trust is wholly exempt from New Zealand income tax having fully complied with all statutory conditions for these exemptions.

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

Amortisation of property, plant and equipment is calculated using the diminishing value method, at a rate of 50% which will reduce the cost of the assets to their estimated residual value over their useful lives.

Changes in Accounting Policies There have been no changes in accounting policies during the financial year (last year - nil).

PARININIHI KI WAITOTARA TRUST - FINANCIAL STATEMENTS

93

94

NOTES TO THE PERFORMANCE REPORT

NOTE 1: ANALYSIS OF REVENUE

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

Grant Income - third parties

This Year $'000

Last Year $'000

156

150

35

75

191

225

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

Last Year $'000

2

2

156

161

Total

Interest income - bank

Total

159

NOTES TO THE PERFORMANCE REPORT

NOTE 2: ANALYSIS OF EXPENSES

Expense Item Analysis Volunteer and employee related costs Salary and wages

Total

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

Legal expenses

Total

Expense Item Analysis Other expenses Other admin expenses

Total

This Year $'000 98 98

Last Year $'000 66 66

This Year $'000 8 2 1

Last Year $'000 3 8 1

11

12

This Year $'000 12

Last Year $'000 9

12

9

PARININIHI KI WAITOTARA TRUST - NOTES TO THE PERFORMANCE REPORT

95

96

NOTES TO THE PERFORMANCE REPORT

NOTE 3: ANALYSIS OF ASSETS AND LIABILITIES

Asset Item Bank accounts and cash

Analysis ANZ bank account TSB term deposit

This Year $'000

Last Year $'000

12 70

35 70

Total 82

Asset Item Analysis Related party receivables Parininihi ki Waitotara

Incorporation Advance 1,524

1,524

Parininihi ki Waitotara Incorporation Loan

1,379

1,614

Accounts receivable

152

-

Total

3,055

3,138

Liability Item Analysis Creditors and accrued expenses Trade and other payables -

Grants payable 20

Payable to PKW Farms LP -

44 67

Total

20

105

111

NOTES TO THE PERFORMANCE REPORT

NOTE 4: PROPERTY, PLANT AND EQUIPMENT This Year

Current Year

Opening Carrying Depreciation and

Amount Purchases Sales/Disposals Impairment

$'000 $'000 $'000 $'000

Asset Class Grants Database Online Grants Portal Total

1 - 5 3 6 3

- - -

Closing Carrying Amount $'000

1 1 2

0 7 7

Last Year

Current Year Closing

Opening Carrying Depreciation and Carrying

Amount Purchases Sales/Disposals Impairment Amount

$'000 $'000 $'000 $'000 $'000 Asset Class Grants Database 2 - - 1 1 Online Grants Portal - 5 - - 5 Total 2 5 - 1 6

PARININIHI KI WAITOTARA TRUST - NOTES TO THE PERFORMANCE REPORT

97

98

NOTES TO THE PERFORMANCE REPORT

NOTE 5: ACCUMULATED FUNDS This Year

Description Opening Balance Surplus/(Deficit) Closing Balance

Last Year

Description Opening Balance Surplus/(Deficit) Closing Balance

Capital Contributed

by Owners or Members $'000 - - -

Capital Contributed

by Owners or Members $'000 - - -

Accumulated Surpluses or Deficits Reserves Total $'000 $'000 $'000 1,863 (22) 1,841

1,283 - 1,283

3,146 (22) 3,124

Accumulated Surpluses or Deficits Reserves Total $'000 $'000 $'000 1,798 65 1,863

NOTE 6: COMMITMENTS AND CONTINGENCIES

Commitments As at 30 June 2018 the Entity had no capital commitments (2017: Nil).

Contingent Liabilities and Guarantees As at 30 June 2018 the Entity had no contingent liabilities or assets (2017: Nil).

1,283 - 1,283

3,081 65 3,146

NOTES TO THE PERFORMANCE REPORT

NOTE 7: RELATED PARTY TRANSACTIONS

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

This Year Value of Transactions $'000

Last Year Value of Transactions $'000

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

154 159 156 150 310 309

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

PARININIHI KI WAITOTARA TRUST - NOTES TO THE PERFORMANCE REPORT

99

Loan to Parininihi ki Waitotara Incorporation 235 80 1,379 1,614 Advance to Parininihi ki Waitotara Incorporation - 22 1,524 1,524 Accounts receivable - - 152

235 102 3,055 3,138

Total accounts receivable relate to amounts receivable from Parininihi ki Waitotara Incorporation. Interest is receivable at the average group rate of 5.15% (2017: 5.28%). The balances are receivable on demand. (b) Key Management Trustees of Parininihi ki Waitotara Trust Hinerangi Edwards (Chair) Beverly Gibson David MacLeod Taaringaroa Nicholas Claire Nicholson Hinerangi Raumati-Tu'ua Dion Tuuta Darryn Ratana (Shareholder Representative) The above Trustees are on the Committee of Management for the Parent, Parininihi ki Waitotara Incorporation, except Darryn Ratana.

NOTE 8: EVENTS AFTER THE BALANCE DATE Events After the Balance Date: There were no events that have occurred after the balance date that would have a material impact on the Performance Report. (2017: Nil).

PARININIHI KI WAITOTARA ANNUAL REPORT 2018

PARININIHI KI WAITOTARA INCORPORATION 35 Leach Street

New Plymouth | New Zealand

PO Box 241 | New Plymouth 4340