Year Ten & ANNUAL REPORT 2015

Transcription

1 Year Ten & ANNUAL REPORT

2 CONTENTS President & CEO s Report 2 Our Year Ten Timeline 4 Financial Statements Statement of Financial Performance 11 Statement of Movements in Equity 12 Statement of Financial Position 13 Statement of Accounting Policies 14 Notes to the Accounts 15 Independent Auditor s Report 19 Directors Disclosures 20 Cover and other images by Ivor Earp-Jones

3 INTRODUCTION Working for Growers, Industry Wide, for Industry Good Our Organisation Horticulture New Zealand is now in its tenth year. The industry association represents New Zealand s 5500 commercial fruit and vegetable growers. HortNZ is funded by a commodity levy on the sale of all fruit and vegetables. The organisation is governed by a board of seven elected grower directors and two appointed directors. The organisation is based in Wellington to be close to the politicians, government agencies and officials who make decisions every day that could impact on horticulture and a grower s ability to build their business. Our challenge is to harness the strength, power and influence of the wider industry on a diverse range of issues including biosecurity, environmental issues, labour needs, industry training and the cost of doing business. Our Industry New Zealand horticulture is a $5 billion industry, exporting 60% of total production to about 124 countries. Major exports are kiwifruit, apples, avocados, onions, buttercup squash, processed vegetables and potatoes. The industry has a reputation for innovation, quality, early adoption of new technology and responsiveness to market demand. New Zealand s horticultural production area uses almost 100,000 hectares, less than 1% of the country s total land area. There are 22 product groups affiliated to HortNZ. The Horticulture New Zealand Board, 2014/2015 Julian Raine, pipfruit, kiwifruit and berry grower, Nelson (president) Andrew Fenton, kiwifruit and avocado, Bay of Plenty Leon Stallard, pipfruit, Hawke s Bay John Allen, kiwifruit, Bay of Plenty Barry O Neil, appointed director David Kelly, kiwifruit, Northland Tony Howey, berryfruit and vegetables, Canterbury Mike Arnold, vegetables, Canterbury The Horticulture New Zealand board 2014/2015 in HortNZ s Wellington office, from left, Andrew Fenton, Julian Raine (president), Leon Stallard, Mike Arnold, Barry O Neil, John Allen, Tony Howey, and Dave Kelly. 1

4 PRESIDENT & CEO S REPORT 2014/15 Horticulture New Zealand has had a positive and productive year. The organisation is now 10 years old and is well established as the peak industry body for commercial fruit and vegetable growers in New Zealand. The end of the financial year coincided with our first Grower Scorecard survey, in which over 80% of growers who responded agreed that HortNZ adds value to grower businesses and that HortNZ is focused on the issues that will really make a difference for growers. As we head into another year, we can already see the continued positivity in our industry is helping to ensure horticulture continues to be recognised by government, the wider business world and by the community as a significant contributor to our national wealth, health and wellbeing. HortNZ s work continues to be focused in five critical areas; Biosecurity, Communications, Grower Representation, Natural Resources & Environment and People Capability. The positive result for the financial year for HortNZ was not well signalled with the past season being much better than many growers expected and this meant the Board deferred some of its development plans until later in the year. The Board has this year focused on building HortNZ s capability to work with growers and represent the industry in some of these areas; biosecurity with the appointment of biosecurity manager, Richard Palmer at the end of the financial year; Natural Resources and Environment with the appointment of Angela Halliday as advisor early in the year and in Communications with the appointment of Natalie Hampshire as communications assistant. Natural Resources HortNZ has achieved some very positive outcomes from our work on Natural Resources & Environment with the launch of the Nutrient Management Code of Practice, numerous successful plan interventions that have benefited growers and by having a seat at the table and a strong influence over the national debate around water quality and quantity. However, the HortNZ board continues to be concerned at the level of spending in the Natural Resources & Environment work area. This is challenging as HortNZ has a responsibility to represent the industry in numerous complex processes where the timelines and processes are dictated to us by others. Biosecurity Growers have been rightly concerned about Queensland Fruit Fly detections in Whangarei and Grey Lynn in the past year. HortNZ has supported the Ministry for Primary Industries professional and comprehensive response to these events and has lead the call for greater resources to be deployed at the border. It is pleasing to see the additional resource government has now allocated to this area. People Capability HortNZ s programme to support the development of people capability in the industry has continued to strengthen during the year. We congratulate another region (Otago) for getting involved and running its own Young Grower competition and we have played a key role with various product groups to bring together a Human Capability Group to develop and implement a strategy to rise to the challenge of recruiting another 26,300 trained workers in to our industry by 2025 (as outlined in MPI s publication People Powered ). The increase from 8000 to 9000 in numbers allowed under the Recognised Seasonal Employer scheme was a significant and welcome step. Growers Representation We have continued to represent the horticulture industry on over 40 organisations, groups, committees, working groups, advisory and liaison groups. This forms a critical part of our wider network and enables us to anticipate and proactively manage issues on behalf of our grower members. A final note This is to be Peter s last annual report for HortNZ, and it is with considerable gratitude the HortNZ board wishes him well for the future. We would also like to thank all growers for your ongoing support and to send special thanks to the many growers who have worked with us on industry wide issues over the past year. 2 Julian Raine, President Peter Silcock, Chief Executive

5 Financial Report for the year ended 31 March 2015 HortNZ s overall financial position strengthened during the year ended 31 March The ongoing recovery of the kiwifruit industry and strong performance of horticulture export industries resulted in increased levy income. The continuing tight controls limited increases in expenditure. The overall result was a surplus of $391,267 for the year ($410,396 in 2014). Total accumulated funds increased to $3,597,244 ($3,217,824 in 2014). HortNZ s core activity achieved a surplus of $351,428 for the year ($260,347 in 2014) and now has accumulated funds of $704,267 ($352,839 in 2014). Groups under HortNZ management Surplus /deficit for the year ended 31 March 2015 after taxation HortNZ Core Special Vegetable Fund* Vegetables NZ Vegetables.co.nz Vegetable Research & Innovation Process Vegetables NZ Tomatoes NZ NZ GAP -100, , , , ,000 Groups under HortNZ management Accumulated Funds as at 31 March 2015 HortNZ Core Special Vegetable Fund* Vegetables NZ Vegetables.co.nz Vegetable Research & Innovation Process Vegetables NZ Tomatoes NZ NZ GAP 0 225, , , ,000 * the Special Vegetable Fund was closed in June

6 OUR YEAR TEN TIMELINE 2014 APRIL A single Queensland Fruit Fly is detected in a trap near Whangarei harbour, only weeks after a similar find in the same area. The Avocado Industry Council is congratulated on achieving support for the horticulture industry s first independent Primary Growth Partnership project, called Go Global. HortNZ welcomes the Green Party s reintroduction of a Private Member s Bill calling for the appointment of an independent supermarket adjudicator and the establishment of a compulsory code of conduct for supermarkets. In April 2014 we welcomed Southlander Angela Halliday to the team, as a Natural Resources and Environment advisor. The 26 year-old assistant crop manager at Hinemoa Quality Producers in Pukekawa, Brett Parker, wins Young Vegetable Grower of the Year. HortNZ welcomes new staff member Angela Halliday to the Natural Resources and Environment team. Young Vegetable Grower of the Year 2014, Brett Parker. Brett comes from Pukekohe and works with Quality Producers at Pukekawa. He s responsible for spraying, doing the ground work, using a digger, dealing with machinery, maintenance and servicing and harvesting. 4 JUNE Tony Howey, a vegetable and berryfruit grower from South Canterbury, and Leon Stallard, an apple grower from Hawke s Bay, are elected to the HortNZ board. The board farewells Tony Ivicevich and Terry Olsen. The National Horticulture Field Day is held in Hastings and attracts more exhibitors and a bigger crowd. The Ministry for Primary Industries releases its People Powered report showing by 2025 the horticulture industry will need: - 7,800 more workers; - 14,900 more workers with qualifications; - 7,100 fewer workers with no qualifications; - an additional 26,300 trained workers to cover natural attrition. HortNZ teams up with the Produce Marketing Association Australia-New Zealand to run the biggest horticulture industry conference ever held in New Zealand. More than 1000 delegates attend the Auckland event. Wellington s long serving fruit industry organisation executive Michael Gaffaney is presented with horticulture s premier industry award, the Bledisloe Cup. MAY This year s release of the industry s Fresh Facts booklet shows horticulture is contributing 8% to the country s merchandise export earnings. HortNZ takes part in an arrival briefing for a delegation from the Indonesia Agricultural Quarantine Agency. The HortNZ board meets with Australian High Commissioner Michael Potts. HortNZ raises its concerns in the media about the Board of Inquiry report into the Ruataniwha Dam proposal. The Nutrient Management Code of Practice for growers is launched by HortNZ after working closely with growers in the Horowhenua/Manawatu, consultants and other growers from throughout the country. Kiwifruit Vine Health becomes the first industry organisation to sign a Government Industry Agreement (GIA) to create a partnership between the kiwifruit industry and the government on biosecurity issues.

7 JULY Asparagus grower and National Labour Governance Group chair Geoff Lewis with Recognised Seasonal Employer workers on his property at Levin. HortNZ welcomes the release of the government s new national policy statement for freshwater management, which should make the use of water around the country easier for growers. HortNZ s magazines NZGrower and the Orchardist go online available free to all growers and by subscription to anyone else. HortNZ makes a submission to government on the Strengthening Enforcement of Employment Standards discussion paper mainly to talk about reducing complexity in employment law. The government announces the increase of the Recognised Seasonal Employer scheme cap to 9000, from 8000 people, at the HortNZ hosted RSE Conference in Wellington. HortNZ s magazines go online! There s no doubt that the growth in the horticulture and viticulture industry in the past few years would not have been possible without RSE, which has been widely praised locally and internationally. Hon. Michael Woodhouse, Minister of Immigration. 5

8 OUR YEAR TEN TIMELINE AUGUST The winner of the Young Grower of the Year title for 2014 is Patrick Malley, from Maungatapere in Northland. Patrick works for Onyx Capital kiwifruit and avocado orchard. Patrick represented the Bay of Plenty at the finals in Christchurch as the Northland region did not have its own regional competition. The first Horticulture Industry Forum is held in Wellington, replacing the old Product Group Days hosted by HortNZ. The following people get started in the 2014 HortNZ Leadership Programme: - Jonathan Sutton - Eden s Road Fruit, Nelson; - Daniel Green - Horticentre, Bay of Plenty; - Cody Bent - Trevelyans Pack and Cool, Tauranga; - Chris Treneman - J M Bostock, Hawke s Bay; - Nilesh Patel - Status Produce, Auckland; - Nathan Clark - Sunfruit Orchards, Waikato/ Hawke s Bay; - Red Martin - Thawley Orchard, Tasman; - Simon Bowker - Hume Pack-n-Cool, Bay of Plenty; - Laurence Buschl - Vailima Orchards, Nelson; - Aaron Hokopaura - Aongatete Coolstores, Bay of Plenty; - Allen Lim - Jade Garden Produce, Canterbury; - Tim Pike - Mid Canterbury Growers, Canterbury; - Tom Keefe - Kono, Nelson. HortNZ congratulates scientists Ross Ferguson, Ian Ferguson and Errol Hewett who were made Fellows of the International Society for Horticultural Science (ISHS), the world s leading independent organization of horticultural scientists at the 29th International Horticultural Congress in Brisbane, Australia. The HortNZ Leadership Programme was: Relevant, beneficial and easy to relate to. Working with guys from other industries such as apples makes me realise we are all in the same boat with similar problems and similar answers. Simon Bowker, Hume Pack-N-Cool SEPTEMBER The New Zealand Pavilion at Asia Fruit Logistica opens, co-ordinated by HortNZ, with 13 companies, seven of them first time exhibitors. The HortNZ board meets in Northland and visits growers. The first hearings start on the Auckland Unitary Plan, HortNZ takes every opportunity to remind the council of its need to protect rural production. New Zealand s largest horticulture company, Turners and Growers, changes its name to T&Gs. Northland kiwifruit growing family, the Malleys, win three categories in the Northland Balance Farm Environment Awards. New Zealand Avocado Growers Association chair Ashby Whitehead and chief executive Jen Scoular showing off New Zealand avocados at the 2014 Asia Fruit Logistica. 6

9 OCTOBER HortNZ helps growers and product groups cope with the Yersinia outbreak, which sees lettuce and carrots falsely accused of carrying the bug. HortNZ makes a submission on the application from Australia to use irradiation as biosecurity protection on a range of products which could potentially be imported into New Zealand. HortNZ welcomes the appointment of Steve Rich to the position of Secretariat Manager for GIA the Government Industry Agreements for biosecurity preparedness and response. Bay of Plenty journalist Elaine Fisher wins the HortNZ sponsored horticulture award at the Agricultural Journalists and Communicators Guild Awards. HortNZ congratulates Plant & Food horticulture scientist Jill Stanley on her election to the position of secretary on the Board of Directors for the International Society for Horticultural Science. Tony Howey from South Canterbury is elected vice president of HortNZ. Tony takes over from Brian Gargiulo. NOVEMBER The CoOLNZ website sends its 1500th to government ministers about New Zealand s need for mandatory country of origin labelling on food. HortNZ becomes a member of the Precision Agriculture Association. Nelson s Suter Art Gallery fundraises enough money to buy the Rita Angus painting The Apple Pickers and make sure it stays in Nelson. HortNZ s new website launches, so we can help growers calculate direct levy payments and pay by credit card online. The Ruataniwha Dam High Court appeal begins and HortNZ is involved alongside DairyNZ, Federated Farmers, Fonterra and Irrigation New Zealand. Northland kiwifruit and avocado grower Patrick Malley wins Young Horticulturist of the Year HortNZ welcomes the announcement of a free trade agreement with South Korea. The new deal eliminates 93% of our current tariffs within five years. The HortNZ board creates a Director Selection Group to begin the work of selecting two Appointed Directors for the board. Young Horticulturist of the Year 2014, Patrick Malley. The Malley family own a kiwifruit and avocado orchard in Northland, which came runner-up in the Northland Balance Farm Environment Awards in This is a great result for a dedicated and hard-working young man. Horticulture New Zealand works hard to develop and support young growers and this is an excellent win, not just for Patrick but all growers. HortNZ president Julian Raine congratulates Patrick Malley, Young Horticulturist of the Year

10 OUR YEAR TEN TIMELINE DECEMBER HortNZ tops 1000 followers on Twitter. HortNZ chief executive Peter Silcock is appointed to the board of Kiwifruit Vine Health as an independent director. The horticulture industry s highly respected and eagerly anticipated Barriers to Our Export Trade report is released in Wellington. The report is cofunded every two years by the Horticulture Export Authority and Horticulture New Zealand, and put together by Wellington consultancy Market Access Solutionz. The report shows export growers paid an average of $38,000 each in tariffs to other countries. Ministry for Primary Industries Situation and Outlook mid-year update report is released and shows horticulture is forecast to show the highest percentage increase in export revenue to 2016, at 6.6%. This is higher than dairy s 5.3%, seafood s 6.2% and forestry s 4.1%. HortNZ foundation board member Brian Gargiulo resigns and Horowhenua tomato grower Hayden Armstrong is co-opted to the board to fill the vacancy. Fiji joins the Recognised Seasonal Employer scheme. This year s report puts the value of horticultural exports at $2.41 billion, an increase of about $94 million from the previous report in HortNZ tops 1000 followers on Twitter. JANUARY HortNZ awards the following scholarships, in total a combined package of 20 scholarships valued at $38,000. Undergraduate scholarships to: - Leander Archer, Massey University, Bachelor AgriScience in Horticulture, - Vaughan Brook, University of Canterbury, Bachelor of Electrical and Electronic Engineering with Honours, and - Kiriana Isgrove, University of Waikato, Bachelor of Science. Horticentre Trust undergraduate degree scholarships: - Briar Kay, Massey University, Bachelor of AgriScience, - Luke Posthuma, Massey University, Bachelor of Agriscience, and - Jack Keeys, University of Waikato, Bachelor of Management Studies. Ten students won a HortNZ Industry Training scholarship worth $500. They were: - Antony Jack, Southern Produce Ltd, Tauranga - Kacey Johnson, Gourmet Mokai Ltd, Taupo - Alexander MacGregor, Apollo Apples Ltd, Hawke s Bay - Sarah Purcell, Punchbowl PackCo Ltd, South Auckland - Bradley Dowling, Sutherland Produce Ltd, Auckland - David Stewart, Seedling Transplants, Canterbury - Hannah Meehan, 45 South, Otago - Quentin Francis, EastPack, Bay of Plenty - Samantha Mansell, EastPack, Bay of Plenty. And finally we awarded four Horticulture conference awards, offered jointly by the Horticentre Trust, Massey University and Horticulture New Zealand each valued at approximately $1,500 each

11 FEBRUARY A breeding population of Queensland Fruit Fly is discovered in a Grey Lynn backyard in Auckland. This is the first time a breeding population has been detected in New Zealand. HortNZ immediately calls on the government to reinstate 100% passenger baggage xray. United Fresh makes February fresh produce month with their 5+A Day promotion 5+A Day Challenge. New Zealanders are encouraged to consume more fruit and vegetables and to share their photos via social media. HortNZ begins the Grower Scorecard survey, asking growers what they think of HortNZ. The survey goes out to 5500 grower members of HortNZ. HortNZ s seasonal labour manager Jerf van Beek helps employers and workers from Vanuatu cope with their response to the devastation caused by Cyclone Pam. Ministry for Primary Industries staff receive a briefing about spraying host material during the Queensland Fruit Fly incursion in Grey Lynn, Auckland. MARCH HortNZ makes a submission on the proposed reform of hazardous substances management under the Hazardous Substances and New Organisms Act. HortNZ supports the reform which should reduce compliance, support international harmonization and encourage simplification of legislation. HortNZ s seasonal labour manager Jerf van Beek helps employers and workers from Vanuatu cope with their response to the devastation caused by Cyclone Pam. HortNZ chief executive Peter Silcock takes to the stage to debate New Zealand s biosecurity protection at an event at Lincoln, chaired by broadcaster Kim Hill. 9

12 FINANCIAL STATEMENTS Statement of Financial Performance 11 Statement of Movements in Equity 12 Statement of Financial Position 13 Statement of Accounting Policies 14 Notes to the Accounts 15 Independent Auditor s Report 19 Directors Disclosures 20

13 HORTICULTURE NEW ZEALAND INC Statement of Financial Performance FOR THE YEAR ENDING 31 MARCH 2015 $ $ Note Income Horticulture NZ Core Activity 2,7,8,18 4,961,898 4,643,918 Special Vegetable Fund 15-73,536 New Zealand GAP 556, ,176 Vegetables NZ 1,118,178 1,159,092 Vegetables.co.nz 67,084 66,964 TomatoesNZ 324, ,887 Potatoes New Zealand 5, ,832 Process Vegetables NZ 316, ,142 Vegetable Research & Innovation Board 283, ,234 Total Income 7,633,003 7,745,781 Expenditure Horticulture NZ Core Activity 2,7,8 4,660,809 5,160,803 New Zealand GAP 428, ,170 Vegetables NZ , ,327 Vegetables.co.nz 369, ,082 TomatoesNZ , ,199 Potatoes New Zealand 5, ,672 Process Vegetables NZ , ,914 Vegetable Research & Innovation Board 523, ,294 Total Expenditure 7,239,083 7,382,461 Surplus / (Deficit) for year before taxation 393, ,320 Provision for Taxation 4 2,653 - Surplus / (Deficit) for year after taxation 391, ,320 Transfer to the Accumulated funds of: Horticulture New Zealand 7 351, ,347 Special Vegetable Fund (68,703) 11,036 Vegetables NZ (13,354) 55,684 Vegetables.co.nz 38,578 41,480 Potatoes New Zealand - (44,840) Vegetable Research & Innovation Board 18,034 (45,222) Process Vegetables NZ 6,631 87,759 TomatoesNZ (69,663) (55,363) New Zealand GAP 128,316 99, , ,396 The financial statements should be read in conjunction with the notes to the financial statements. 11

14 HORTICULTURE NEW ZEALAND INC Statement of Movements in Equity FOR THE YEAR ENDING 31 MARCH 2015 $ $ Note Opening Balance 3,217,824 2,854,504 Funds Tranferred from: Horticulture New Zealand 7 351, ,347 Special Vegetable Fund (68,703) 11,036 Vegetables NZ (13,354) 55,684 Vegetables.co.nz 38,578 41,480 Potatoes New Zealand - (44,840) Vegetable Research & Innovation Board 18,034 (45,222) Process Vegetables NZ 6,631 87,759 TomatoesNZ (69,663) (55,363) New Zealand GAP 128,316 99, , ,396 Funds Introduced: 16 New Zealand Vegetable and Potato Growers Federation (11,847) (47,076) Closing Balance 3,597,244 3,217,824 The financial statements should be read in conjunction with the notes to the financial statements. 12

15 HORTICULTURE NEW ZEALAND INC Statement of Financial Position AS AT 31 MARCH 2015 $ $ Note Current Assets BNZ Current Account 167, ,082 BNZ Direct Levy Account BNZ Autocall Account 478, ,406 ANZ Cheque Account ASB Cheque Account 40 - Kiwibank Cheque Account 70 - Rabobank Cheque Account 50 - Sundry Debtors 1,145,265 1,080,357 Provision for Taxation 4 30,102 24,130 Investments 2,500,000 2,000,000 Current Accounts - 49,552 Prepayments 26,007 40,293 Total Current Assets 4,348,884 3,903,820 Current Liabilities GST Payable 63, ,624 Income in Advance 5 74, ,350 Fit out Incentive 29,480 29,480 Creditors and Accrued Expenditure 3 723, ,522 Total Current Liabilities 890, ,976 Working Capital 3,458,219 3,062,844 Non Current Assets Fixed Assets 9 202, ,333 Total Fixed Assets 202, ,333 Non Current Liabilities Fit out Incentive 63,873 93,353 Total Non Current Liabilities 63,873 93,353 Total Net Assets 3,597,244 3,217,824 Represented by Horticulture New Zealand Inc 704, ,839 Special Vegetable Fund - 68,703 Vegfed History 16-11,847 Vegetables NZ 844, ,647 Vegetables.co.nz 400, ,827 Process Vegetables NZ 412, ,324 TomatoesNZ 564, ,444 New Zealand GAP 419, ,226 Vegetable Research & Innovation Board 251, ,967 Accumulated Funds 3,597,244 3,217,824 The financial statements should be read in conjunction with the notes to the financial statements. Julian Raine, Director 18 June, 2015 Tony Howey, Director 18 June,

16 HORTICULTURE NEW ZEALAND INC Statement of Accounting Policies FOR THE YEAR ENDING 31 MARCH Reporting Entity Horticulture New Zealand (Inc) is registered under the Incorporated Societies Act Statutory Base The financial statements have been prepared in accordance with the requirements of the Incorporated Societies Act 1908 and New Zealand Financial Reporting Standards. Measurement Basis The financial statements have been prepared on the historical cost basis. Differential Accounting Horticulture New Zealand is a qualifying entity within the New Zealand Institute of Chartered Accountants Differential Reporting Framework. Horticulture New Zealand qualifies for differential reporting on the basis that it is not publically accountable and it is not large. The organisation has taken full advantage of all differential reporting concessions available to it, with the exception of FRS 19 Accounting for Goods and Services Tax. Accounting Policies The financial statements are prepared in accordance with New Zealand generally accepted accounting practice. Horticulture New Zealand Inc is not required to and has not adopted New Zealand equivalents to International Financial Reporting Standards( NZIFRS ). The accounting policies that materially affect the measurement of financial performance and financial position are set out below. Investments Investments are stated at cost. Accounts Receivable Accounts Receivable are stated at estimated realisable value after providing against debts where collection is doubtful. Income Tax Income Tax is accounted for by the tax payable method. Goods and Services Tax The statement of financial performance 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. Revenue Revenue is recognised to the extent that it is probable that the economic benefit will flow to Horticulture New Zealand and the revenue can be easily measured. Revenue is measured at fair value of consideration received. Levies Levies are accounted for on an accrual basis when the growers declaration is received. Grant Income and Project Funding Grant and Project funding income is recognised as revenue when associated obligations have been met. Orchardist and NZGrower Subscriptions Subscription income is recognised as earned by reference to actual subscription period, membership subscription received in relation to the following financial year is carried as a liabilitiy (income in advance). Interest Income Interest income is recognised using the effective interest rate method. NZGAP fees Annual Fees for NZGAP are accounted for on an accrual basis. Administration Recoveries Horticulture New Zealand provides administration services to the other divisions within Horticulture New Zealand. These are invoiced on a monthly basis. Fixed Assets The cost of purchased property, plant and equipment is the value of the consideration given to acquire the assets and to get them to the location and condition necessary for their intended service. Depreciation Depreciation is calculated on a straight line basis so as to expense the cost of the assets to their residual values over their useful lives with a depreciation range of: Office Equipment and Furniture 10.5% - 67%, Leasehold Improvements 12.5% Leased Assets Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Operating leases are recognised as an expense in the periods the amounts are payable. Creditors and accrued expenditure Creditors and accrued expenditure includes amounts owing to suppliers and employees. Expenditure is accrued at the amount invoiced. Financial Instruments Financial Instruments carried on the statement of financial position include cash and bank balances, receivables and payables. There are no off balance sheet financial instruments. The particular recognition methods adopted are disclosed in the individual policy statements associated with each item. Changes in accounting policies There have been no changes in accounting policies. All other policies are consistent with prior years and have been applied on a consistent basis.

17 HORTICULTURE NEW ZEALAND INC Notes to the Accounts FOR THE YEAR ENDING 31 MARCH Allocation of Interest Interest income, less the associated provision for taxation is allocated to each sector within Horticulture New Zealand Inc, based on their average proprietorship over the 12 months to 31 March Transactions between Groups The amounts reflected in the statement of financial performance are net of any transactions occurring between the different groups within Horticulture New Zealand. 3 Creditors and Accrued Expenditure $ $ Trade Creditors 475, ,840 Accrued Expenditure 88,478 31,650 Employee Entitlement 159, , , ,522 4 Income Tax Net surplus /(deficit) 393, ,320 Tax at 28% 110, ,730 Tax effect of: Non Taxable Income (1,671,228) (1,712,482) Non Deductable Expenditure 1,586,347 1,633,837 Prior period adjustment - - Use of losses brought forward (22,764) (23,085) Tax expenses for the period 2,653 - Resident Withholding Tax (32,755) (24,130) Provisional tax paid - - Tax Payable / (Refund) (30,102) (24,130) 5 Income in Advance This is comprised of amounts received for The Orchardist subscription and Asia Fruit Logistica. 6 Commitments The following amounts have been committed by Horticulture New Zealand Inc but not recognised in the financial statements. $ $ Operating Leases Non-cancellable operating lease commitments Within one year 192, ,960 Later than one year 418, , , ,000 7 Horticulture New Zealand Core Activity Income and expenditure incurred by the Horticulture New Zealand Core Activity during the year prior to the removal of product group transactions is as follows: $ $ Income Levies 3,540,771 2,990,445 People 203, ,944 Growers Support 156,472 94,039 Natural Resources and Environment - 260,250 Orchardist Magazine 310, ,828 NZGrower Magazine 382, ,999 Conference 16,755 69,293 Interest 44,274 32,831 Other Income 6,641 43,817 Servicing Income 353, ,316 Costs Recovered - - Gross Income 5,014,890 4,775,762 15

18 HORTICULTURE NEW ZEALAND INC Notes to the Accounts FOR THE YEAR ENDING 31 MARCH 2015 $ $ Less Expenditure Governance 317, ,387 Biosecurity 137, ,348 Natural Resources and Environment 1,109,910 1,133,553 People 602, ,175 Grower Support 312, ,181 Communications 280, ,931 Orchardist Magazine 432, ,033 NZGrower Magazine 358, ,501 Conference 29,158 86,413 Depreciation 77,595 88,834 Levy Collection 67,910 42,624 Office Overheads 578, ,138 Servicing Expenditure 351, ,316 Special Projects 3,987 30,057 Administration Expenses - - Total Expenditure 4,660,809 4,562,491 Surplus for year prior to Taxation 354, ,271 Provision for Taxation 2,653 - Surplus for year after Taxation 351, ,271 History Project Funding - 47,076 Transfer of Horticulture New Zealand Core Activity to Accumulated Funds 351, ,347 8 Reconciliation of Horticulture New Zealand Product Group Income and Expenditure $ $ Horticulture New Zealand Income as per note 7 above 5,014,890 4,775,762 Removal of Funding received from Special Vegetable Fund - (62,500) Removal of Income received for support of NZGrower Magazine (52,992) (45,994) Removal of Administration Recoveries received from other product groups within Horticulture New Zealand - (23,350) Horticulture New Zealand Income per Statement of Financial Performance 4,961,898 4,643,918 Horticulture New Zealand Expenditure as per note 7 above 4,660,809 4,562,491 Removal of Admin Recoveries paid by Orchardist, NZGrower - (214,565) Addition of Administration Costs and Conference - 812,877 Horticulture New Zealand Expenditure per Statement of Financial Performance 4,660,809 5,160,803 9 Fixed Assets 2015 Cost ($) Accumulated Depreciation ($) Depreciation Expense ($) Book Value ($) Office Equipment and Furniture 250, ,966 45,676 44,805 Leasehold Improvements 252,951 94,858 31, ,093 Total Fixed Assets 503, ,824 77, , Cost ($) Accumulated Depreciation ($) Depreciation Expense ($) Book Value ($) Office Equipment and Furniture 243, ,192 88,834 58,622 Leasehold Improvements 252,951 63,240 31, ,711 Total Fixed Assets 496, , , ,333 16

19 10 Professional Services Payments made to the auditors were: Audit Fee 18,500 18, Capital Commitments There are no capital commitments as at 31 March (31 March 2014: nil) 12 Contingent Liabilities There are no contingent liabilities as at 31 March (31 March 2014: nil) 18,500 18, Financial Instruments Fair Value: The estimated fair value of Horticulture New Zealand Inc s financial instruments is equivalent to their carrying amounts in the financial statements. Credit Risk: Financial instruments which subject the Group to credit risk principally consist of bank balances and accounts receivable. Credit risk in respect of Bank and Short Term Deposits is reduced by placing deposits with major trading banks. Receivables are unsecured, but are subject to credit control. No collateral is held. Interest Rate Risk: Cash held on term deposits totals $2,500,000 (2014: $2,000,000) and is repayable on demand. There are no other interest bearing assets or liabilites. 14 Related Parties Horticulture New Zealand Limited is a wholly owned subsidiary company of Horticulture New Zealand Inc. Ownership is by way of 100% shareholding of 200 shares in Horticulture New Zealand Limited. These shares have no nominal value. The directors of Horticulture New Zealand Limited are also the President and Vice President of the Board of Horticulture New Zealand Inc. All directors of Horticulture New Zealand are required to be growers, therefore will pay levies through the entities they are associated with. During the year, entities associated with Horticulture New Zealand directors also rented space for the Asia Fruit Logistica Tradeshow and sponsored both the conference and Young Grower of the Year event. Two board members of Horticulture New Zealand Inc are Trustees for the Fruitgrowers Charitable Trust. Horticulture New Zealand Limited was incorporated on 13 October Management has not consolidated the subsidiary Horticulture New Zealand Limited, recognising the investment in this company as an investment at cost. The subsidiary company is not trading and has no significant assets or liabilities. Management believe any difference in treatment as a consolidation entity or as an investment at cost is not material. 15 Special Vegetable Fund The Special Vegetable Fund was established by the Horticulture New Zealand Inc. Board following the decision of fruitgrowers not to increase their levy from 0.11% to 0.15%. From October 2010 to June % of the 0.15% paid by vegetable growers was placed in the Special Vegetable Fund to maintain equity of contributions to Horticulture New Zealand Inc. This Special Vegetable Fund levy stopped in the year ending 31 March 2014 due to levy increases. 16 Vegfed History On the wind up of NZ Vegetable and Potato Growers Federation $58,982 was transferred to Horticulture New Zealand Inc. These funds are held in an imprest account and have funded the production of a Vegfed History. 17 Property Securities Leasing Solutions Limited hold property securities over leased assets. $ $ Reconciliation of Surplus Balances The income and expenditure figures contained within the Statement of Financial Performance (page 11) exclude financial transfers between product groups within Horticulture New Zealand Inc. to ensure that the actual total income and expenditure of the organisation is reported. This means that the stated income less the stated expenditure for specific groups does not always equal the surplus/deficit achieved by that product group. The following is a reconciliation which states the balances of revenue, expenditure and surplus per the individual product group financial statements, and then deducts the internal transactions to show the revenue and expenditure numbers per the Statement of Financial Performance numbers on page

20 HORTICULTURE NEW ZEALAND INC Notes to the Accounts FOR THE YEAR ENDING 31 MARCH 2015 Reconciliation of Surplus Numbers continued Horticulture New Zealand Inc. Entity Horticulture NZ Inc. Income per Individual Accounts Internal Income Eliminated Consolidated Income Expenditure per Individual Accounts Internal Expenditure Eliminated Consolidated Expenditure Surplus / (Deficit) Consolidated Surplus / (Deficit) 5,014,890 52,992 4,961,898 4,660,809 4,660, , ,089 5,014,890 52,992 4,961,898 4,660,809-4,660, , ,089 Other Product Groups Special Vegetable Fund Income per Individual Accounts Inter-product Group Income Elimination Consolidated Income Expenditure per Individual Accounts Inter-product Group Expenditure Elimination Consolidated Expenditure Surplus / (Deficit) Consolidated Surplus / (Deficit) ,703 68,703 - (68,703) - Vegetables NZ 1,118,178-1,118,178 1,131, , ,295 (13,354) 463,883 Vegetables. co.nz Potatoes New Zealand Vegetable Research & Innovation Board Process Vegetables NZ 407, ,796 67, , ,302 38,578 (302,218) 5,727-5,727 5,727 5, , , , , ,279 18,034 (239,597) 316, , ,435 41, ,918 6,631 48,148 TomatoesNZ 324, , ,714 63, ,752 (69,663) (5,701) New Zealand GAP 556, , , , , ,316 3,269, ,427 2,671,105 3,229, ,419 2,578,274 39,839 92,831 Total 8,284, ,419 7,633,003 7,890, ,419 7,239, , ,920 18

21 Independent Auditor s Report TO THE MEMBERS OF HORTICULTURE NEW ZEALAND INCORPORATED We have audited the financial statements of Horticulture New Zealand Incorporated on pages 11 to 18, which comprise the statement of financial position as at 31 March 2015, and the statement of financial performance, statement of movements in equity for the year then ended, and a summary of significant accounting policies and other explanatory information. Board Members responsibilities The Board members are responsible for the preparation of financial statements in accordance with generally accepted accounting practice in New Zealand and for such internal control as the Board members determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor s responsibilities Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing (New Zealand). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation of financial statements that present fairly the matters to which they relate 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 entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates, as well as evaluating the presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Other than in our capacity as auditor and provision of other assurance services, we have no relationship with, or interests in Horticulture New Zealand Inc. Opinion In our opinion, the financial statements on pages 11 to 18 present fairly, in all material respects, the financial position of Horticulture New Zealand Incorporated as at 31 March 2015 and its financial performance, for the year then ended in accordance with generally accepted accounting practice in New Zealand. GRANT THORNTON NEW ZEALAND AUDIT PARTNERSHIP WELLINGTON, NEW ZEALAND 18 June 2015 Grant Thornton New Zealand Audit Partnership, L15 Grant Thornton House, 215 Lambton Quay, PO Box 10712, Wellington 6143 T: F: w: 19

22 Directors Disclosures DIRECTORS MEETING ATTENDANCES HortNZ Board Meetings Audit & Risk Committee Remuneration Committee Horticulture Industry Forum Meetings Julian Raine (President/Chair of Board of Directors) Tony Howey (Vice-President/Vice-Chair) (Elected to the Board in June 2014) John Allen 5 2 Hayden Armstrong (Co-opted to the Board January 2015) Mike Arnold Andrew Fenton 7 1 Brian Gargiulo (Apr 2014 December 2014) Tony Ivicevich (April 2014 June 2014) Dave Kelly Terry Olsen (April 2014 June 2014) Leon Stallard (Elected to the Board in June 2014) BOARD FEES FOR THE YEAR ENDED 31 MARCH Julian Raine (President) $70,000 $53,333 $20,000 Tony Howey (Vice President) (elected Vice President on 22 October 2014) $16,000 John Allen $20,000 $20,000 $20,000 Hayden Armstrong $5,000 Mike Arnold $20,000 $3,333 - Andrew Fenton $20,000 $36,666 $70,000 Brian Gargiulo (stood down from Vice President role on 22 October 2014) $16,500 $22,000 $22,000 Tony Ivicevich $5,000 $20,000 $20,000 Dave Kelly $20,000 $20,000 $20,000 Terry Olsen $5,000 $20,000 $20,000 Leon Stallard $15, NOTE - The above fees cover approximately 20 scheduled meeting days and preparation for these meetings. This includes Board meetings, Audit and Remuneration Committee meetings, Horticulture Industry Forum meetings, regional visits made by the Board and the HortNZ Conference. Additional daily fees are paid to Board members undertaking additional roles at the request of the Board or Chair. No additional daily fees are paid to the Chair.

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24 22 (Physical) Level 4, Co-operative Bank House, 20 Ballance Street, Wellington (Postal) PO Box 10232, The Terrace, Wellington Ph: Fax: