Te Runanga o Toa Rangatira Incorporated Group

Transcription

1 Te Runanga o Toa Rangatira Incorporated Group Consolidated Financial Statements and Annual Report For the Year Ended 30th June 2018 te

2 Financial Statements and Annual Report For the Year Ended 30th June 2018 Table of Contents Independent Auditor's Report 3 Consolidated Statement of Comprehensive Revenue and Expense 5 Consolidated Statement of Financial Position 7 Consolidated Statement of Cash Flows 9 Consolidated Statement of Changes in Equity

3 INDEPENDENT AUDITOR S REPORT TO THE MEMBERS OF TE RUNANGA O TOA RANGATIRA INCORPORATED GROUP Opinion We have audited the consolidated financial statements of Te Runanga o Toa Rangatira Incorporated ( the Parent ) and its subsidiaries (together, the Group ), which comprise the consolidated statement of financial position as at 30 June 2018, and the consolidated statement of comprehensive revenue and expense, consolidated statement of changes in net assets and consolidated cash flow statement for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies. In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at 30 June 2018, and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with Public Benefit Entity Standards Reduced Disclosure Regime ( PBE Standards RDR ) issued by the New Zealand Accounting Standards Board. Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (New Zealand) ( ISAs (NZ) ). Our responsibilities under those standards are further described in the Auditor s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with Professional and Ethical Standard 1 (Revised) Code of Ethics for Assurance Practitioners issued by the New Zealand Auditing and Assurance Standards Board, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Other than in our capacity as auditor, and our involvement in the assistance with formatting the financial statements, we have no relationship with, or interests in, the Parent or any of its subsidiaries. Other Information The Board is responsible for the other information. The other information comprises the annual report, but does not include the consolidated financial statements and our auditor s report thereon. The other information is expected to be made available to us after the date of this auditor s report. Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of audit opinion or assurance conclusion thereon. In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed on the other information obtained prior to the date of this auditor s report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Board s Responsibilities for the Consolidated Financial Statements The Board is responsible on behalf of the Group for the preparation and fair presentation of the consolidated financial statements in accordance with PBE Standards RDR, and for such internal control as the Board determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. In preparing the consolidated financial statements, the Board is responsible on behalf of the Group for assessing the Group s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

4 Auditor s Responsibilities for the Audit of the Consolidated Financial Statements Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (NZ) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the decisions of users taken on the basis of these consolidated financial statements. As part of an audit in accordance with ISAs (NZ), we exercise professional judgement and maintain professional scepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group s internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. Conclude on the appropriateness of the use of the going concern basis of accounting by the Board and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor s report. However, future events or conditions may cause the Group to cease to continue as a going concern. Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. We communicate with the Board regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Who we Report to This report is made solely to the Parent s members, as a body. Our audit work has been undertaken so that we might state those matters which we are required to state to them in an auditor s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Parent and the Parent s members, as a body, for our audit work, for this report or for the opinions we have formed. BDO Wellington Audit Limited Wellington New Zealand 31 October 2018

5 Consolidated Statement of Comprehensive Revenue and Expense For the Year Ended 30th June 2018 NOTE Health, medical and other social services income 5 10,216,900 8,589,700 Direct service delivery costs (1,336,907) (1,242,781) Surplus from delivery of social services 8,879,994 7,346,919 Trading income 5 2,469,811 12,595,792 Direct trading expenses (162,153) (9,714,895) Surplus from trading activities 2,307,657 2,880,897 Other income Gain on revaluation of investment land 13 3,325,980 2,783,295 Writeback of depreciation on revalution - 194,312 Gain on sale of fixed assets Gain on sale of NZ Forestry Units 5 426,000 Other income 5 3,891,689 3,532,601 Fisheries and historical redress 5 4,854,122 - Total revenue from operations 23,686,225 16,738,197 Less operating expenses Administration expense (220,532) (518,082) Depreciation, amortisation and impairment expense 12 (678,733) (585,212) Education, sports and marae distributions (184,541) (117,748) Lease operating costs (110,256) (65,260) Motor vehicle expense (236,494) (254,575) Other expenses (948,530) (599,608) Personnel expenses 6 (8,535,045) (7,797,270) Property expenses (1,209,817) (1,230,881) Loss on sale of property, plant and equipment - (206,462) Share of loss in joint venture (49,257) (31,610) Total expenses (12,173,204) (11,406,708) Surplus before net interest income 11,513,021 5,331,489 Gain/(loss) on revaluation of financial portfolio 1,870,991 1,347,940 Interest income 5 2,081,951 2,388,710 Less Interest expense (2,720) (852) Net interest income 3,950,222 3,735,798 Surplus for the year before tax 15,463,242 9,067,286 Tax expense 11 (531,301) (974,963) Surplus for the year 14,931,941 8,092,323 5 TE

6 Consolidated Statement of Comprehensive Revenue and Expense For the Year Ended 30th June 2018 NOTE Other comprehensive revenue and expense Gain/(Loss) on revalution of property, plant and equipment 12-1,228,042 Gain/(Loss) on revaluation of intangible assets 20 1,120, ,489 Total other comprehensive revenue and expense 1,120,619 1,522,531 Total comprehensive revenue and expense for the year 16,052,560 9,614,854 6 TE

7 Consolidated Statement of Financial Position As at 30th June 2018 NOTE Assets Current Assets Cash and cash equivalents 7 10,186,064 11,067,320 Short term investments 8 68,497,394 52,686,209 Accounts and other receivables 9 3,963,706 2,715,266 Prepayments and other assets 10 42,118 29,280 Income tax receivable ,448 - Total Current Assets 83,004,730 66,498,075 Non Current Assets Long term deposits 8 1,422,886 6,943,688 Managed funds 8 22,953,237 21,322,329 Property plant and equipment 12 17,661,547 17,461,054 Investment property 13 51,796,004 46,067,098 Intangible assets 20 12,392,421 15,985,794 Share investments 14 2,366,678 2,366,678 Investment in joint venture 21 10,135,493 8,570,752 Total Non Current Assets 118,728, ,717,393 Total Assets 201,732, ,215,468 Liabilities Current Liabilities Trade and other payables , ,912 Deferred Income 16-4,855 Rent received in advance , ,812 Employee benefit liability , ,477 Income tax 11-15,085 Total Current Liabilities 2,179,108 1,714,141 Total liabilities 2,179,108 1,714,141 Net Assets 199,553, ,501,327 7

8 Consolidated Statement of Financial Position As at 30th June 2018 NOTE Equity Treaty & Fisheries settlement reserves ,764, ,910,855 Other special purpose reserves 24 1,186,078 1,186,078 Revaluation reserve - Intangibles 24 7,799,282 10,593,663 Revaluation reserve - Land & Buildings 24 5,832,408 5,832,408 Accumulated revenue and expense 47,971,142 33,978,323 Total Equity 199,553, ,501,327 Board Member Board Member Date: 8

9 Consolidated Statement of Cash Flows NOTE Cashflow from operating activities Proceeds have come from: Contract income 9,616,489 8,641,453 Trading income 2,477,897 19,452,372 Rental income 3,312,817 2,670,633 Settlement proceeds 3,354,122 - Other sundry proceeds 1,031, ,666 GST refunds/(payments) 171, ,388 Income tax paid (861,834) (1,249,198) Payments made to suppliers and others (4,591,406) (20,521,112) Payments made to employees (8,364,968) (7,787,021) Net cash inflow/(outflow) from operating activities 6,145,966 2,299,181 Cashflows from investing activities Proceeds from interest earnings 2,786,994 3,343,527 Proceeds (to)/from term investment activities (10,056,123) (8,828,437) Proceeds from sale of property plant and equipment 61, ,000 Purchase of property plant and equipment (906,230) (3,250,858) Purchase of website - (10,000) Purchase of Waitangirua Medical Centre (480,000) - Sale/(Purchase) of NZ Forestry Emission Units 5,586,000 1,785,000 Purchase of investment property (2,402,923) (728,227) Purchase of other Investments (1,613,998) (8,977,362) Net cash inflow/(outflow) for investing activity (7,024,502) (16,156,357) Cash flows from financing activities Interest payments (2,720) (852) Net cash inflow/(outflow) from financing activities (2,720) (852) Net cash inflow/(outflow) from all activity (881,256) (13,858,028) Cash and cash equivalents at the beginning of the year 7 11,067,320 24,925,348 Cash and cash equivalents at the end of the year 7 10,186,064 11,067,320 9te runan

10 Consolidated Statement of Changes in Equity For the Year ended 30th June 2017 Group 2017 Note Total Balance as at 1 June ,910,855 1,186,078 11,669,174 4,774,547 24,345, ,886,474 Surplus for the year ,092,323 8,092,323 Other comprehensive revenue and expense ,489 1,228,042-1,522, ,489 1,228,042 8,092,323 9,614,854 Transactions with owners of the controlling entity in their capacity as owners Contributions Distributions Transfers - special purpose reserve , ,181 - Transfers - disposal of revalued land and buildings ,370,000-1,370,000 - Total transactions with owners of the entity ,370, ,181 1,540,181 - Balance at 30 June ,910,855 1,186,078 10,593,663 5,832,408 33,978, ,501,328 Treaty & Fisheries settlement reserves Other special purpose reserves Revaluation reserve- Intangibles Revaluation reserve - Land & Buildings Accumulated revenue and expense 10

11 Consolidated Statement of Changes in Equity Group 2018 Note Total Balance as at 1 July ,910,855 1,186,078 10,593,663 5,832,408 33,978, ,501,328 Surplus for the year ,931,941 14,931,941 Other comprehensive revenue and expense - - 1,120, ,120, ,120,619-14,931,941 16,052,560 Transactions with owners of the controlling entity in their capacity as owners Contributions Distributions Transfers - historical and fisheries redress 4,854, (4,854,122) - Transfers - disposal of revalued intangibles - - (3,915,000) - 3,915,000 - Total transactions with owners of the entity 4,854,122 - (3,915,000) - (939,122) - Balance at 30 June ,764,978 1,186,078 7,799,282 5,832,408 47,971, ,553,888 Treaty & Fisheries settlement reserves Other special purpose reserves Revaluation reserve - Intangibles Revaluation reserve - Land & Buildings Accumulated revenue and expense 11

12 1. Reporting Entity Te Runanga o Toa Rangatira Incorporated is a public benefit entity for the purposes of financial reporting in accordance with the Financial Reporting Act (2013). These consolidated financial statements for the year ended 30 June 2018 comprise the controlling entity and its controlled entities (together referred to as the Group and individually as Group Entities ). Te Runanga o Toa Rangatira is a registered charity under the Charities Act 2005, registration number CC The primary activity of the organisation is the provision of assistance by way of relief of poverty, promotion of health and wellbeing and advancement of education for all members of Ngati Toa Rangatira and the community. Te Runanga o Toa Rangatira is also the Mandated Iwi Organisation and Trustee over the Ngati Toa Rangatira settlement assets. The principal place of business is 26 Ngati Toa Street, Takapuwahia, Porirua. 2. Basis of Preparation a. Statement of Compliance The consolidated financial statements have been prepared in accordance with New Zealand Generally Accepted Accounting Practice ("NZ GAAP"). They comply with Public Benefit Entity reduced Disclosure Regime ( PBE Standards RDR ) and other applicable Financial Reporting Standards, as appropriate for Tier 2 not-for-profit public benefit entities, for which all reduced disclosure regime exemptions, have been adopted. The Group qualifies as a Tier 2 reporting entity as for the past two reporting periods it has had between $2m and $30m operating expenditure. All entities which form part of the consolidated group have policies consistent with Tier 2. These financial statements are for the year ended 30 June 2018 and were authorised for issue by The Board on 31st October b. Measurement Basis The consolidated financial statements have been prepared on an historical cost basis, except for the following material items in the Statement of Financial Position, which are measured at fair value; Land and buildings under the revaluation model Investment property Quota holdings NZ Forestry Emission Units (NZU s) Initial measurement of assets received from non-exchange transaction. 12te runan

13 c. Functional Presentation Currency The Financial Statements are presented in New Zealand dollars ($), which is the controlling entity s functional and Group presentation currency. All numbers presented have been rounded to the nearest dollar. There has been no change to the functional currency of the Group during the year. d. Judgements, Assumptions and Estimates The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from those judgements, estimates and assumptions. Estimates and underlying judgements are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and any future periods affected. (ii). Assumptions and estimation uncertainties Assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment in the year ended 30 June 2018 include the following: (i). Judgements Judgements made in applying accounting policies that have had the most significant effects on the amounts recognised in the consolidated financial statements include the following: Revenue recognitions non-exchange revenue (conditional vs restrictive) Classification of lease arrangements Reclassification of property plant and equipment to (from) investment property Intangible assets having finite or indefinite useful lives Whether there is control or not over a Group entity Useful life, recoverable amount, depreciation /amortisation methods and rates used. e. Changes in Accounting Policies There have been no changes in accounting policies for the Group. The accounting policies set out in the notes to the financial statements have been applied in preparing financial statements for the year ended 30 June 2018 and comparative information presented for the year ended 30 June Significant Accounting Policies The significant accounting policies set out below have been consistently applied to all periods presented in these financial statements and have been consistently applied across the Group. The Board have considered that for the information to be useful to the readers that the Note for any item on the face of the financial Statements, will be shown below the policy that has been adopted where appropriate. The significant accounting policies used in the preparation of these financial statements are summarised below and are contained within the following : 4. Basis of Consolidation 5. Revenue 6. Personnel costs 7. Cash and cash equivalents 8. Short term investments, long term deposits and managed funds 9. Accounts and other receivables 10. Prepayments 11. Income tax 13te runan

14 12. Property, plant and equipment 13. Investment property 14. Share investments 15. Trade and other payables 16. Deferred income 17. Rent received in advance 18. Employment entitlements 19. Financial instruments 20. Intangible assets 21. Investment in Joint Venture 22. Impairment of non-financial assets 23. Leases (as lessor and as lessee) 24. Reserves 25. Contingencies and commitments 26. Events subsequent to balance date 27. Related parties 4. Basis of consolidation a. Controlled Entities Controlled entities are entities controlled by the Group, being where the Group has power to govern the financial and operating policies of another entity so as to benefit from their entities activities. The financial statements of the Group s controlled entities are included in the consolidated financial statements from the date that control commences to the date control ceases. Subsequent changes in a controlled entity that do not result in a loss of control are accounted for as transactions with controllers of a controlling entity in their capacity as controller within net assets/equity. The Group financial reports include the following controlled entities and the relationship to the controlling entity; Subsidiary Name Country of Share capital (number of shares) Investment at cost Incorporation Toa Rangatira Trust New Zealand Ika Toa Limited New Zealand 20,100 20,100 20,100 20,100 Ngati Toa Limited New Zealand Kapiti Tours Limited New Zealand Ora Toa PHO Limited New Zealand Toa Rangatira Group Holdings Limited New Zealand Trustee group Toa Rangatira Investment Properties Limited New Zealand Trustee group Toa Rangatira Developments Limited New Zealand Trustee group Whenua Toa Trust New Zealand Trustee group Total 20,312 20,312 20,312 20,312 b. Transactions Eliminated on Consolidation Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment. 14te runan

15 c. Joint Ventures Joint ventures are those entities over whose activities the Trust Group has joint control, established by a binding agreement and requiring unanimous consent for strategic financial and operating decisions. Joint ventures are accounted for using the equity method. 5. Revenue Revenue is recognised when the amount of revenue can be measured reliably and it is probable that benefits will flow to the Group, and can be measured at the fair value of consideration received or receivable. The following specific recognition criteria in relation to the Group s revenue streams must also be met before revenue is recognised. a. Revenue from Exchange Transactions (i). Sale of goods Revenue from the sale of goods in the course of ordinary activities is measured at their fair value of the consideration received or receivable, net of returns, and any discounts. Sale of goods revenue included in trading revenue in the Consolidated Statement of Comprehensive Revenue and Expense: Sale or lease of annual catch entitlements from quota share; and Right of First Refusal property sales. Revenue is recognised when the significant risks and rewards of ownership have been transferred to the customer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, there is no continuing management involvement with the goods and the amount of revenue can be measured reliably. The timing of the transfers of risks and rewards varies depending on the individual terms of the sales agreement. For sale of annual catch entitlement, it is when the payment has been received by the customer. For sale of Right of First Refusal property it is when the contract has settled in full. (ii). Rendering of services Services rendered revenue is recognised in surplus or deficit in proportion to the stage of completion of the transaction at the reporting date. The stage of completion is assessed by reference to; A survey of the work completed for services under contract at reporting date. Proportion of time remaining under the original service agreement at reporting date for contracts spanning more than 12 months for health services. The proportion of costs incurred to date bear to the total estimated costs of the transaction. Only costs that reflect the services performed to date are included in costs incurred to date. Only costs that reflect services performed or to be performed to date are included in the estimated total costs of the transaction. Amounts received in advance for services to be provided in future periods are recognised as a liability until such time as the service is provided. 15te runan

16 Income from services rendered (exchange revenue) included in trading income in the Consolidated Statement of Comprehensive Revenue and Expense: Patient consultation fees Puna Reo parent fees Transport revenue Holiday park revenue Revenue from exchange transactions Trading revenue Services rendered Holiday park revenue 483, ,266 Other exchange revenue 1,815 1,611 Patient and parent fees 1,217,394 1,006,510 Transport Income - 1,372 1,702,823 1,481,759 Sale of Goods Property sales - 10,379,081 Annual Catch Entitlement sale 766, ,952 Total Trading revenue from exchange transactions 2,469,811 12,595,792 b. Other Income (i). Rental and licence fee income Rental income on licenced land, residential rental, commercial and other investment property lease fees are recognised in surplus or deficit on a straight line basis over the term of the lease. (ii). Dividends Income from dividends is recognised when the Group s right to receive payment is established, and the amount can be reliably measured. (iii). Sale of NZ Forestry Emission Units Income from the sale of NZ Emission Units is recognised in the Consolidated Statement of Comprehensive Revenue when the Group's right to receive payment is established. Revenue from exchange transactions included in other income in the Consolidated Statement of Comprehensive Revenue and Expense included: Other Income from exchange transactions Rental and licence fee Income 2,860,239 2,626,474 Dividends received 71,744 61,183 Gain on sale of NZ Forestry Emission Units 426,000 - Gain on fixed assets Local and Regional council grants 30,000 - Sundry Income 658, ,787 Other Income from exchange transactions 4,046,965 3,280,444 16te runan

17 (iv). Interest Interest is recognised as it accrues in surplus or deficit, using the effective interest method. Interest Income shown in other income in the Consolidated Statement of Comprehensive Revenue and Expense includes interest earned on At call funds and short term deposits from the various banking organisations. Interest income shown in the Consolidated Statement of Comprehensive Revenue and Expense included: Interest Income Interest from trading, at call and term investments 1,189, ,174 Interest received from Historical and Fisheries redress 5,822 - Interest accrued but not yet received 886,225 1,585,536 Total interest Received 2,081,951 2,388,710 (v). Gain/(loss) on revaluation of financial portfolio The fair value gain/loss on revaluation of financial portfolio is fair value gains on the investment portfolio held with ANZ. c. Revenue from Non-Exchange Transactions Non-exchange transactions are those where the Group receives an inflow of resources (i.e. cash or other tangible or non-tangible items) but provides no (or nominal) direct consideration in return for the inflow. With the exception of services in kind, inflow of resources from non-exchange transactions are only recognised as assets where both: It is probable that the associated future economic benefit or service potential will flow to the entity, and Fair value can be reliably measured. (i). Government contracts, grants and koha The recognition of non-exchange revenue from Government Contracts, Grants, Donations, and Koha depends on the nature and any stipulations attached to the inflow of economic resources received, and whether this creates a liability (i.e. present obligation) rather than the recognition of revenue. Stipulations that are conditions specifically require the Group to return the inflow of resources received if they are not used as stipulated, resulting in the recognition of a non-exchange liability that is subsequently recognised as non-exchange revenue as and when the conditions are satisfied. Stipulations that are restrictions do not specifically require the Group to return the inflow of resources received if they are not utilised in the way stipulated, and therefore do not result in the recognition of a nonexchange liability, which results in the immediate recognitions of non-exchange revenue. Government contracts Funding is received to provide a range of health and wellbeing services to the community that are delivered by the Group. The primary source of funding is derived by contracts with the following providers: Ministry of Health Capital Coast District Health Board Ministry of Education Local and regional agencies 17te runan

18 (ii). Historical and fisheries redress Revenue from Historical and or Fisheries Redress received as non-exchange transactions are recognised when the entitlement (control) passes to the group and the Group entity is able to enforce the claim. Revenue is recognised in the Consolidated Statement of Comprehensive Revenue and Expense at an amount that reflects the exchange at its deemed cost and this is estimated at the date of the exchange. Redress income included in the Consolidated Statement of Comprehensive Revenue and Expense is subsequently moved to a special settlement reserve account to preserve the total accumulated settlement quantum. (iii). Property, plant and equipment revenue Gains or losses from the sale of property, plant and equipment are recognised in surplus or deficit. Revenue from non-exchange transactions included in the Consolidated Statement of Revenue and Expense Revenue from non-exchange transactions Health, Medical and Social services revenue 10,216,900 8,589,700 Historical and Fisheries redress 4,854,122 - Non exchange revenue 15,071,023 8,589,700 Revenue from non-exchange transactions included in other revenue in the Consolidated Statement of Comprehensive Revenue and Expense includes: Other revenue from non-exchange transactions Local and Regional Council grants 271, ,157 Other revenue from non-exchange transactions 271, , Personnel costs Personnel expenses include all personnel and include Management, Board and payments for members for various Committee duties. a. Employer Contribution to KiwiSaver The organisation contributes to the New Zealand KiwiSaver scheme for employees who have enrolled in the scheme. Personnel costs include: ACC Levies 40,741 37,346 Staff payroll expense 8,190,715 7,480,571 Board and Committee expense 94,650 89,250 Te Runanga o Toa Rangatira Inc. has paid for Audit and Accounting costs in the the 208, ,103 Total Payroll expense 8,535,045 7,797,270 18te runan

19 7. Cash and Cash Equivalents Cash and cash equivalents are deposits held in trading accounts or deposits with maturities between 1-90 days after balance date. Cash and cash equivalents Current assets Cash at bank and on hand 10,186,064 11,067,320 At call deposits due within 90 days - - Cash and cash equivalents in the statement of cash flows 10,186,064 11,067,320 Per annum annual interest rate ranges to components of cash and cash equivalents Bank deposits % % Call deposits % % There are no restrictions over any of the cash and cash equivalent balances held by the Group. 8. Short term investments, long term deposits and managed funds Short term deposits are deposits that are held with maturities of more than 90 days but less than 12 months after balance date. Short Term Deposits are classified as current assets in the Consolidated Statement of Financial Position. Long term investments are deposits that have maturities more than 12 months after balance date. Long term investments are classified as non-current assets in the Consolidated Statement of Financial Position. There are no restrictions over the short term deposits or long term investments held by the Group. Interest rates vary on the deposits between 3.22% % Managed funds are funds held with ANZ in a balanced portfolio measured at Fair Value through Surplus and Deficit 9. Accounts and other receivables Accounts and other receivables are non-interest bearing and receipts are normally on 30 day terms. Therefore carrying value of accounts and other receivables approximates its fair value. As at 30 June 2018, all overdue receivables have been assessed for impairment and appropriate allowances made. Accounts and other receivables Trade Receivables from exchange transactions 3,202,210 1,170,196 Less allowance for doubtful debt (195,888) (187,802) Net trade receivables from exchange transactions 3,006, ,394 Other receivables Accrued Interest receivable 886,225 1,585,447 Short term wage advances 3,276 4,157 GST receivable (non exchange) 67, ,268 Total Trade and other receivables 3,963,706 2,715,266 19te runan

20 The Board have considered whether an allowance for doubtful debts is appropriate based on historical evidence and have estimated on a percentage basis a doubtful debt allowance on the 90 day and over balances. All receivables are subject to credit risk exposure. The Board have reviewed the allowance as at 30 June and a further impairment allowance of $8,086 has been recorded for the 2018 year. Balance 1 July 187, ,223 Write off of bad debts - - Impairment losses this year 8,086 76,579 Balance at 30 June 195, , Prepayments and other assets Prepayments include payments that have been made prior to balance date, for goods or services that have not yet been delivered. Prepayments also include payments toward the construction of an asset where the asset has not yet been completed or commissioned but for where there is a construction contract in place. Prepayments and other assets include: Prepayments for goods and services not yet consumed 34,618 8,758 Engineers Report - Waitangirua 7,500 7,500 Consultants - Takapuwahia Puna Reo - 13,022 Total prepayments and other assets 42,118 29, Income Tax Ngati Toa Limited receives income which provides taxable earnings. Toa Rangatira Trust has Maori Authority tax status and the current tax is calculated at 17.5%. Other Trust subsidiaries are currently taxed at 28%. Ora Toa PHO, Ika Toa Limited and the Parent have Charitable Status for income tax purposes. Tax expense comprises current and deferred tax. Current tax and deferred tax is recognised in surplus or deficit except to the extent that it relates to a business combination, or items recognised directly in equity or in other comprehensive income. Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted or substantively enacted at the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously. 20te runan

21 A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised. Accounting profit from operations 15,463,242 9,067,286 Add taxable inter-entity gain on sale - 375,000 Less non assessable earnings (12,328,145) (5,379,210) Add back non-deductible expenses 434, ,101 Add back temporary timing differences - 49,456 Group Losses offset against this years tax expense (32,820) (32,820) Taxable Earnings 3,537,080 5,074,813 Opening tax payable 15, ,320 Plus current income tax expense 573, ,347 Less over provision in previous year (42,673) (9,384) Current income tax expense 531, ,963 Less Maori Tax credits available (12,555) (10,707) Less Resident withholding tax paid (409,418) (460,014) Less tax payments made to Inland Revenue (477,863) (1,011,065) Less refunds received 38, ,587 Current Tax payable (315,448) 15, Property, Plant and Equipment a. Recognition and measurement Items of property plant and equipment are initially measured at cost, except those acquired through nonexchange transactions which are instead measured at fair value as their deemed cost at initial recognition. Heritage assets with no future economic benefit or service potential other than their heritage value are not recognised in the statement of financial position. 21te runan

22 Items of property, plant and equipment are subsequently measured either under the: (i). Cost (or fair value for items acquired through non-exchange transactions) less accumulated depreciation and impairment. (ii). Cost model Revaluation model Fair value, less accumulated depreciation and accumulated impairment losses recognised after the date of the most recent revaluation. Valuations are performed with sufficient frequency to ensure that the fair value of a revalued asset does not differ materially from its carrying amount. Gains and losses on revaluation are recognised in other comprehensive revenue and expense and presented in the revaluation surplus reserve within net assets/equity. Gains or losses relating to individual items are offset against those from other items in the same class of property, plant and equipment, however gains or losses between classes of property, plant and equipment are not offset. Any revaluation losses in excess of credit balance of the revaluation surplus for that class of property, plant and equipment are recognised in surplus or deficit as impairment. All of the Group's items of property plant and equipment are subsequently measured in accordance with the cost model, except for land and buildings which are subsequently measured in accordance with the revaluation model. Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of selfconstructed assets includes the following: Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment. When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment. Any gain or loss on disposal of an item of property, plant and equipment (calculated as the difference between the net proceeds from disposal and the carrying amount of the item) is recognised in surplus or deficit. Upon disposal of revalued items of property, plant and equipment, any associated gain or losses on revaluation to that item are transferred from the revaluation surplus to accumulated surplus. b. Subsequent expenditure Subsequent expenditure is capitalised only when it is probable that the future economic benefits associated with the expenditure will flow to the Group. Ongoing repairs and maintenance is expensed as incurred. 22te runan

23 c. Depreciation For plant and equipment, depreciation is based on the cost of an asset less its residual value, and for buildings is based on the revalued amount less its residual value. Significant components of individual assets that have a useful life that is different from the remainder of those assets, those components are depreciated separately. The estimated useful lives are shown below: Class 2018 Useful Life Years 2017 Useful Life Years Buildings and Improvements years years Plant, Office, MPD and Computer Equipment Motor Vehicles, Watercraft, Tractors and Trailers Fixtures and Fittings Computer Equipment 3-5 years years 3-25 years 3-5 years 3-5 years years 3-25 years 3-5 years Depreciation is recognised in surplus or deficit on a straight-line basis over the estimated useful lives of each component of an item of property, plant and equipment. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term. Land is not depreciated. Assets under construction are not subject to depreciation until they are completed. Depreciation methods, useful lives and residential value are reviewed are each reporting date and adjusted if appropriate. Work in Progress Included in construction contracts for assets not yet completed (Work in Progress assets) were: Constructions Contracts (work in progress) Rugby Street - Earthquake Strengthening and new medical centre fit-out Initial Contract sum - 576,499 Agreed variations to date - 127,792 Revised contract sum - 704,291 Other Construction costs - 170,789 Total Work in progress - 875,080 Payments made prior to balance date - (875,080) Contract sum payable at 30 June te runan

24 Plant, Office Equipment, and Computers Motor Vehicles, Watercraft, Trailers and Tractors Land, Buildings, Marine Farm Fixtures and Fittings Work in Progress Assets TOTAL Group 2018 Cost Balance 1 July ,149,510 2,595, ,221 1,213,688-21,733,259 Additions - exchange 622, ,421 4,324 30,865 36, ,990 Additions - non- exchange Revaluation movements WIP capitalised Disposals (4,000) (435,775) (196,773) (83,561) - (720,109) Balance 30 June ,767,625 2,309, ,772 1,160,992 36,264 21,856,140 Accumulated depreciation and impairment Balance 1 July ,322 2,117, , ,339-4,272,205 Current year depreciation 299, ,026 8,827 75, ,912 Current Year Impairment Depreciation written back on revaluation Depreciation written back on disposal (4,000) (391,413) (185,749) (88,362) - (669,524) Balance 30 June ,914 1,934, , ,444-4,194,593 Carrying amount 30 June ,912, , , ,548 36,264 17,661,547 24

25 Plant, Office Equipment, and Computers Motor Vehicles, Watercraft, Trailers and Tractors Land, Buildings, Marine Farm Fixtures and Fittings Work in Progress Assets TOTAL Group 2017 Cost Balance 1 July ,718,473 2,164, ,471 1,223, ,080 17,749,797 Additions - exchange 3,072, ,316 5,750 16,173-3,525,501 Additions - non- exchange Revaluation movements 1,228, ,228,042 WIP capitalised 875, (875,080) - Disposals (744,347) - - (25,734) - (770,081) Balance 30 June ,149,510 2,595, ,221 1,213,688-21,733,259 Accumulated depreciation and impairment Balance 1 July ,226 1,915, , ,059-3,986,725 Current year depreciation 249, ,444 13,660 81, ,105 Current Year Impairment Depreciation written back on revaluation (194,312) (194,312) Depreciation written back on disposal (41,579) - - (25,734) - (67,313) Balance 30 June ,322 2,117, , ,339-4,272,205 Carrying amount 30 June ,590, , , ,349-17,461,054 25

26 Valuation detail The Group engaged Jim Sampson of Alex Hayward Limited to value properties in the Blenheim District. The methods of valuation used represented observable prices in an active market and were completed between 1st and 20th July 2017 for the year ended 30 June Market source data has been used to determine the market value of the properties assessed Alex Hayward Limited. The valuer used a comparison approach using recent market transactions that had occurred on an arm s length basis. Land is valued at fair value using market-based evidence based on its highest and best use with reference to comparable land values. All valuers used by the organisation are independent. 13. Investment properties Investment property is property held either to earn rental income or for capital appreciation or for both, but not held for sale in the ordinary course of business, use in the production or supply of goods or services or for administrative purposes. a. Recognition and measurement Investment property is initially measured at cost, except those acquired through non-exchange transactions which are instead measured at fair value as their deemed cost at initial recognition. Cost includes expenditure that is directly attributable to the acquisition of the investment property. The cost of self-constructed investment property includes the cost of materials and direct labour, any other costs directly attributable to bringing the investment property to a working condition for their intended use and capitalised borrowing costs. Investment properties are subsequently measured at fair value by an independent professional. Any gain or loss on disposal of an investment property (calculated as the difference between the net proceeds from disposal and the carrying amount of the item) is recognised in surplus or deficit. The forestry land valuation was updated in June 2018 by Forestry Land Consultants Limited on a discounted cash flow basis which uses forest licence fee income as an input. Other land valuations were updated on 18th August 2018 by Duncan Watts and Gerad Wilson of CBRE, and by Bill Smith of Quotable Valuations Limited. The valuations included land that is currently subject to long term lease back arrangements with the relevant Crown agencies. See Note 23 for further detail on the terms of the leases. The methods of valuation used to determine fair value were the Income capitalisation or discounted cashflow approach with a check by the direct comparison approach. 26 te runan

27 Both CBRE and Quotable Valuation Limited are independent valuers. Other land (non-exchange) is held as investment land where there has been no clear indication on a particular use for the land. Investment property transactions are shown below: Investment property - land Opening Balance as at 1 July 46,067,098 42,555,578 Gain on revaluation 3,325,980 2,788,295 Fair value of forestry land at 30 June 49,393,078 45,343,873 Additions - Non-exchange - - Additions -exchange 2,402, ,225 Impairment - (5,000) Disposals - - Fair value 30 June 51,796,004 46,067,098 b. Reclassifications When an investment property that was previously classified as property, plant and equipment is sold, any revaluation amount included in the revaluation reserve is transferred to retained earnings. When the use of the investment property changes to owner occupied, such that it results in a reclassification of property, plant and equipment, the property s fair value at the date of reclassification becomes its cost for subsequent accounting. Investment property includes land purchased from the Crown identified as part of the redress negotiation. The land was purchased at $24 million on 1 August The land includes land in Nelson and Marlborough currently planted in pine and is operated as a forestry operation. The forestry operation is owned and controlled by unrelated parties and the land is leased to the Forester under the terms of present Crown Forestry Licence. 14. Share Investments The Group owns 1,532 shares in Aotearoa Fisheries Limited (AFL). The shares were received as part of the Fisheries settlement in March The parent has no controlling or significant interest in AFL. The shares are stated at cost less their impairment value as the company (AFL) shares are not publicly traded and therefore there is no active market to determine the quoted price and the shares cannot be measured reliably. 27 te runan

28 The shares have returned a dividend for the past three years and as such the directors have assessed that the 'value in use' is appropriate. As there is no indication of impairment at balance date the Board consider that the carrying amount of the shares approximates their fair value. The shares are classified as available for sale. Aotearoa Fisheries Limited 2,366,678 2,366,678 Deemed cost at 30 June 2,366,678 2,366, Trade and other payables Trade payables from exchange transactions 332, ,684 Sundry accruals 274, ,745 GST payable 165, ,483 Total trade and other payables 773, ,912 Trade payables are non-interest bearing and are normally settled within 30 days and are therefore reflected at their fair value. 16. Deferred Income Deferred service income relates to government contract income for the Medical and Health services where the obligations attached to the receipt of the funds have not fully been met at balance date. These conditions and or obligations are all expected to be met within 30 to 60 days of balance date and are considered current liabilities. Deferred income related to assets is funding provided from the Crown (New Zealand Government) for infrastructure assets such as computer hardware and medical equipment. The funds deferred to future periods represent amounts that have not been spent at balance date. At 30 June all deferred income related to service contract income where the obligations attached to the receipt of the funds has not been fully met at balance date. 17. Rent received in Advance Forestry Licence fees, residential rent and rent from lease back investment properties received in advance is rent received for future periods, the service has not yet been delivered to the customer and the revenue is deferred to another period. 28 te runan