Rongowhakaata Iwi Trust Group

Transcription

1 Rongowhakaata Iwi Trust Group Financial Statements for the Year Ended 30 June Deloitte Rotorua

2 Contents Directory 3 Audit Report 4 Approval of Financial Statements 6 Consolidated Statement of Comprehensive Revenue and Expense 7 Consolidated Statement of Changes in Net Assets 8 Consolidated Statement of Financial Position 9 Consolidated Cash Flow Statement 10 Consolidated Notes to Financial Statements 11 2 P a g e

3 Directory Purpose of Trust Date of Settlement Trustees Trustees To receive, manage, administer and apply the Trust s assets on behalf and for the benefit of the present and future members of Rongowhakaata. 15 November 1998 Trustees of Rongowhakaata Iwi Trust appointed by postal ballot, closed 14 November Moera Brown (Chair) George Ria (Deputy Chair) Fred Maynard Lewis Moeau Staci Hare Jody Wyllie Lisa Taylor Mere-Kingi Nepe (Appointed 06/05/2016) LeRoy Pardoe (Appointed 1/04/2016) Bobby Howard (Appointed 6/05/2016) David Jones (Ceased 23/12/2015) Ronald Nepe (Ceased 23/10/2015) Stan Pardoe (Ceased 20/02/2016) Auditor BDO Gisborne P O Box 169 GISBORNE 4040 IRD Number Tax Type Maori Authority 3 P a g e

4 IBDO Tel: Fax: gisborne@bdo.co. nz BDO GISBORNE LIMITED 1 Peel Street PO Box 169 Gisborne 4040, New Zealand INDEPENDENT AUDITOR'S REPORT To the Trustees of Rongowhakaata lwi Trust Report on the Financial Statements We have audited the financial statements of Rongowhakaata lwi Trust and the Group (the Group) on pages 7 to 23, which comprise the consolidated and separate statement of financial position of Rongowhakaata lwi Trust as at 30 June 2016, the statement of changes in net assets, statement of comprehensive revenue and expense and cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory information. This report is made solely to the Trustees of the Group in accordance with the Trust Deed of Rongowhakaata lwi Trust. Our audit has been undertaken so that we might state to the Trustees those matters 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 Trustees of the Group for our audit work, for this report, or for the opinions we have formed. Board of Trustees Responsibility for the Financial Statements The Board of Trustees are responsible for the preparation and fair presentation of financial statements in accordance with Public Benefit Entity Standards Reduced Disclosure Regime and for such internal control as the Board of Trustees determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility 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 judgment, 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 give a true and fair view of 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 made by Board of Trustees, as well as evaluating the overall 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. In addition to audit services, our firm provides other services in the areas of business services. We have no other relationship with or interests in Rongowhakaata lwi Trust and Group. BDO New Zealand Ltd, a New Zealand limited liability company, is a me;,2~~ i:4o International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. BDO New Zealand is a national association of independent member firms which operate as separate legal entities.

5 IBDO BDO GISBORNE LIMITED Opinion In our opinion, the financial statements present fairly, in all material respects the financial position of Rongowhakaata lwi Trust and the Group as at 30 June 2016, and its financial performance and its cash flows for the year then ended in accordance with Public Benefit Entity Standards Reduced Disclosure Regime. BOO Gisborne Limited 14 November Peel Street Gisborne New Zealand Page 5

6 Approval of Financial Statements The Trustees are pleased to present the approved consolidated Financial Statements, including the historical financial statements, for the year ended 30 June 2016, comprising the controlling entity (Rongowhakaata Iwi Trust) and its controlled entities (Rongowhakaata Iwi Asset Holding Company Limited, Rongowhakaata Settlement Trust and Turanga Group Holdings Limited). APPROVED For and on behalf of the Trustees oh ~ Trus~ 6I Page

7 Consolidated Statement of Comprehensive Revenue and Expenses Notes Group 2016 Group 2015 Parent 2015 Revenue from non-exchange transactions Donations , ,000 Grants 257, , , ,667 Revenue from exchange transactions Postal Agency Profit/Loss 31,621 19,327 31,621 19,327 Fishing Lease Profit 167, , Farm Leases 350, , Rent 137, , Share of Surplus 24,151 65,343 24,151 65,343 Dividends 35,952 55, Interest 923,940 1,042, , ,019 Other Revenue 31,257 21,223 31,257 21,223 Total Revenue 1,959,393 1,896,331 1,542,931 1,556,579 Expenses Administration Expenses 3 350, , , ,609 Employee related costs 311, , , ,077 Governance Fees 86,615 82,821 80,453 53,983 Grants and Donations Made 144,923 7, ,923 7,300 Interest Expense Depreciation and Amortisation 12 13,882 6,058 13,882 7,173 Other Expenses Total Expenses 907, , , ,141 Net Surplus/(Deficit) for the year 1,051,623 1,284, ,011 1,119,438 Other Gains/(Losses) Gain/(Loss) on Investments 10 (94,343) (670,382) (26,920) - Gain/(Loss) on Sale of Property - 6, Impairment Gain/(Loss) 10 (161,245) - (161,245) - Revaluation of Investment Property ,320-3,929 - Total Surplus/(Deficit) for the year before taxation 3 1,322, , ,776 1,119,438 Taxation Expense Total Surplus/(Deficit) for the year after taxation 1,322, , ,776 1,119,438 Other comprehensive revenue and expenses Revaluation of Quota Stock - 482, Revaluation Loss of AFL Shares - (135,979) - - Total Comprehensive Revenue and Expenses for the year 1,322, , ,776 1,119,438 7 P a g e These financial statements should be read in conjunction with the notes to the financial statements. These financial statements have been audited.

8 Consolidated Statement of Changes in Net Assets Group Accumulated Reserves Total comprehensive revenue and expense Opening Balance 1 July ,806, ,468 38,359,591 Surplus/Deficit for the year 1,322,355-1,322,355 Closing equity 30 June ,128, ,468 39,681,946 Opening Balance 1 July ,771, ,406 36,952,769 IPSAS Changes to Opening Balance 438, ,971 Surplus/Deficit for the year 620, ,789 Other comprehensive income - 372, ,062 Marae Grants Paid (25,000) - (25,000) Closing equity 30 June ,806, ,468 38,359,590 Parent Accumulated Reserves Total comprehensive revenue and expense Opening Balance 1 July ,364,424 89,947 3,454,371 Surplus/Deficit for the year 606, ,776 Closing equity 30 June ,971,200 89,947 4,061,147 Opening Balance 1 July ,843,474 64,853 1,908,327 IPSAS Changes to Opening Balance 426, ,512 Surplus/Deficit for the year 1,119,438-1,119,438 Other comprehensive income - 25,094 25,094 Marae Grants Paid (25,000) - (25,000) Closing equity 30 June ,364,424 89,947 3,454,371 8 P a g e These financial statements should be read in conjunction with the notes to the financial statements. These financial statements have been audited.

9 As at 30 June 2016 Consolidated Statement of Financial Position Notes Group 2016 Group 2015 Parent 2015 Current Assets Cash and Cash Equivalents 4 19,210,469 23,690,419 5,064,460 6,898,033 Receivables from exchange transactions 190, , , ,191 Receivables from non-exchange transactions 10,000-10,000 - Inter-entity receivables ,009 27,639 Income tax refund due 5 181, , Other Current Assets 9,648 5,048 9,648 5,048 Total Current Assets 19,602,379 24,222,946 5,218,158 7,040,911 Non-Current Assets Investments 10 10,390,895 5,926,427 5,284,454 3,515,590 Investment Property 11 9,983,792 9,451, , ,000 Property, Plant and Equipment 12 33,703 44,491 33,703 44,491 Total Assets 40,010,768 39,645,722 10,685,857 10,740,991 Current Liabilities Trade and other creditors 159, ,727 86,208 71,269 Employee Entitlements 31,391 22,228 31,391 22,228 Income in Advance 103,925 87, Inter-entity payables ,461,887 6,205,000 Total Current Liabilities 294, ,009 6,590,547 6,298,497 Non-Current Liabilities Loans and Borrowings 8 34, ,123 34, ,123 Total Liabilities 328,821 1,286,132 6,624,710 7,286,620 Net Assets 39,681,946 38,359,590 4,061,147 3,454,371 Equity Accumulated comprehensive Revenue and Expense Total net assets attributable to the owners of the controlling entity 39,681,946 38,359,590 4,061,147 3,454,371 39,681,946 38,359,590 4,061,147 3,454,371 9 P a g e These financial statements should be read in conjunction with the notes to the financial statements. These financial statements have been audited.

10 Consolidated Cash Flow Statement Notes Group 2016 Group 2015 Parent 2015 Cash Flows from Operating Activities Cash Received from Customers 712, ,896 73, ,795 Donations and Grants Received 257, ,467 - Dividends Received 35,952 55, Donations RST , ,000 GST (Paid) / Received 4,748 44,508 15,336 (5,357) Interest Received 933,304 1,072, , ,746 Cash Paid to Suppliers (835,430) (477,532) (648,819) (369,369) Gifting - (7,300) - (7,300) Income (Tax Paid) / Received 118,076 (25,614) - - Trustee Fees (80,453) (74,298) (80,453) (53,983) Net Cash Flows from Operating Activities 1,146,316 1,309, , ,533 Cash Flows from Investing Activities (Purchases) / Disposals of Fixed Assets (8,707) (1,073,818) (8,707) (40,818) Interest Bearing Investments (4,864,113) - (2,125,991) - Net Cash Flows from Operating Activities (4,872,820) (1,073,818) (2,134,698) (40,818) Cash Flows from Financing Activities Funds Introduced by Associated-Entities 185, , , ,485 Funds Withdrawn by Associated-Entities (938,894) (3,007,709) (669,435) (3,007,709) Net Cash Flows from Financing Activities (753,446) (2,036,525) (513,930) (2,047,224) Net Increase/(decrease) in cash and cash (4,479,950) (1,800,578) (1,833,573) (1,102,509) equivalents Cash and Cash Equivalents opening balance 23,690,419 25,490,997 6,898,033 8,000,542 Cash and Cash Equivalents closing balance 4 19,210,469 23,690,419 5,064,460 6,898, P a g e These financial statements should be read in conjunction with the notes to the financial statements. These financial statements have been audited.

11 Consolidated Notes to Financial Statements 1. Statement of Accounting Policies Reporting Entity Rongowhakaata Iwi Trust is a trust created by Deed of Trust dated 15 November Rongowhakaata Iwi Trust (the Trust ) 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 31 March 2016 comprise the controlling entity and its controlled entities (Rongowhakaata Iwi Trust, Rongowhakaata Iwi Asset Holding Company Limited, Rongowhakaata Settlement Trust and Turanga Group Holdings Limited) together referred to as the Group and individually as Group entities. Basis of Preparation Statement of Compliance The Financial Statements for the Group have been prepared in accordance with Generally Accepted Accounting Practice in New Zealand ( NZ GAAP ). They comply with the Public Benefit Entity Accounting Standards Reduced Disclosure Regime ( PBE Standards RDR ) as appropriate for Tier 2 notfor-profit public benefit entities, for which all reduced disclosure regime exemptions have been adopted. The Group qualifies as a Tier 3 reporting entity as for the two most recent reporting periods it has had less than $2m operating expenditure and is not publically accountable. The Group has elected to report under Tier 2. Measurement Basis The consolidated Financial Statements have been prepared on the historical cost basis except for assets and liabilities that have been measured at fair value. The accrual basis of accounting has been used unless otherwise stated and the Financial Statements have been prepared on a going concern basis. Functional and Presentation Currency These Financial Statements are presented in New Zealand dollars (NZD), which is the Controlling Entity s functional and Group s presentation currency. There has been no change in functional currency of the group during the year. Comparatives The comparative financial period is twelve months. Comparatives have been reclassified from that reported in the 30 June 2015 Financial statements where appropriate to ensure consistency with the presentation of the current year s position and performance. The net asset position and net surplus or deficit reported in comparatives is consistent with previously authorised Financial Statements except as adjusted and detailed in note 14. Use of Estimates and Judgements The preparation of Financial Statements requires management to make judgments, estimates and assumptions that effect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected. In particular, information about significant areas of estimation uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amount recognised in the Financial Statements are disclosed where applicable in the relevant notes to the Financial Statements. Judgements made by management in the application of the PBE Standards RDR that have significant effects on the Financial Statements and estimates with a significant risk of material adjustments in the next year are disclosed, where applicable, in the notes to the Financial Statements. 2. Significant Accounting Policies The significant accounting policies adopted by the Group are set out below and except for the changes noted below have been consistently applied to all periods presented in these Financial Statements. Basis of Consolidation The consolidated Financial Statements incorporate the Financial Statements of the Group and entities (including structured entities) controlled by the Group and its subsidiaries. Control is achieved when the Group: has power over the investee; is exposed, or has rights, to variable returns from its involvement with the investee; and 11 P a g e

12 Has the ability to use its power to affect its returns. The Group reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above. When the Group has less than a majority of the voting rights of an investee, it has power over the investee when the voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. The Group considers all relevant facts and circumstances in assessing whether or not the Group's voting rights in an investee are sufficient to give it power, including: the size of the Group's holding of voting rights relative to the size and dispersion of holdings of the other vote holders; potential voting rights held by the Group, other vote holders or other parties; rights arising from other contractual arrangements; and Any additional facts and circumstances that indicate that the Group has, or does not have, the current ability to direct the relevant activities at the time that decisions need to be made, including voting patterns at previous shareholders' meetings. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated Statement of Comprehensive Revenue and Expense and other Comprehensive Revenue and Expense from the date the Group gains control until the date when the Group ceases to control the subsidiary. Rongowhakaata Iwi Trust Group that is neither a subsidiary nor an interest in a joint venture. The investment in an associate is initially recognised at cost and the carrying amount in the Financial Statements is increased or decreased to recognise the group s share of the surplus or deficit of the associate after the date of acquisition. Distributions received from an associate reduce the carrying amount of the investment. If the share of deficits of an associate equals or exceeds the group s interest in the associate, further deficits are not recognised. After the group s interest is reduced to zero, additional deficits are provided for, and a liability is recognised, only to the extent that the group has incurred legal or constructive obligations or made payments on behalf of the associate. If the associate subsequently reports surpluses, the group will resume recognising its share of those surpluses only after its share of the surpluses equals the share of deficits not recognised. Where the group transacts with an associate, surplus or deficits are eliminated to the extent of the interest in the associate. Revenue Revenue is measured at the fair value of the consideration received. Revenue is recognised when the significant risks and rewards of ownership have been transferred to the buyer and when the right to receive payment is established. Rental income Rental Income from investment properties is recognised in the Statements of Financial performance on a straight line basis over the term of the lease. Contingent rentals are recognised as income in the reporting period in which they are earned. Profit or loss and each component of other Comprehensive Revenue and Expense are attributed to the owners of the Group and to the noncontrolling interests. Total Comprehensive Revenue and Expense of subsidiaries is attributed to the owners of the Group and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance. When necessary, adjustments are made to the Financial Statements of subsidiaries to bring their accounting policies into line with the Group s accounting policies. All intra- Group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation. Associates The group s associate investment is accounted for using the equity method. An associate is an entity over which the group has significant influence and Finance income and expenses Finance income comprises interest income on funds invested dividend income and gains on the disposal of available for sale financial assets. Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the Group and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount on initial recognition. Finance expenses comprise impairment losses, losses arising from transactions denominated in currencies other than the Group s functional currency, and interest recognised on Financial assets (except for trade payables). Dividend income from investments is recognised when the shareholder's right to receive payment has 12 P a g e

13 been established (provided that it is probable that the economic benefits will flow to the Group and the amount of income can be measured reliably). Employee entitlements A liability for annual leave is accrued and recognised in the Statement of Financial Position. The liability is equal to the present value of the estimated future cash outflows as a result of employee services provided at balance date. Financial Instruments Non-derivative Financial instruments Non-derivative financial instruments comprise investments in equity securities accounted for as available for sale financial assets, trade receivables, cash and cash equivalents, short term borrowings and trade payables. Non-derivative financial instruments are recognised initially at fair value plus, for instruments not at fair value through Statement of Comprehensive Revenue and Expense, any directly attributable transaction costs. Subsequent to initial recognition non-derivative financial instruments are measured as described below. A financial instrument is recognised if the Group becomes a party to the contractual provisions of the instrument. Financial assets are derecognised if the Group s contractual rights to the cash flows from the financial assets expire or if the Group transfers the financial asset to another party without retaining control or substantially removing all the risks and rewards of the asset. Purchases and sales of financial assets are accounted for at trade date i.e. the date that the Group commits itself to purchase or sell the asset. Financial liabilities are derecognised if the Group s obligations specified in the contract expire or are discharged or cancelled. Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on demand and form an integral part of the Group s cash management are included as a component of cash and cash equivalents for the purpose of the Statement of cash flows. Available for Sale Financial Assets are non-derivative financial assets that are designated as available for sale or are not classified in another category. Available for sale financial instruments are subsequently measured at fair value with gains and losses recognised in other comprehensive revenue and expense and presented in the Available for sale reserve. Any impairments losses and foreign exchange differences are recognised in the Statement of Comprehensive Revenue and Expense. Upon de-recognition, the accumulated gain or loss Rongowhakaata Iwi Trust Group within net assets/equity is reclassified to surplus or deficit. Instruments at fair value through profit or loss An instrument is classified as fair value through profit or loss if it is held for trading or is designated as such upon initial recognition. Financial instruments are designated at fair value through profit or loss if the Group manages such investments and makes purchase and sale decisions. Upon initial recognition, attributable transaction costs are recognised in the Statement of Comprehensive Revenue and Expense when incurred. Subsequent to initial recognition, financial instruments at fair value through profit or loss are measured at fair value, and changes therein are recognised in the Statements of Comprehensive Revenue and Expense. Trade Receivables Trade receivables classified as other non-derivative financial instruments are stated at amortised cost using the effective interest method, less any impairment losses for amounts that have a significant risk of non-collection. When a receivable is identified as being non-collectible it is expensed immediately in profit and loss. Trade Payables Trade payables are classified as other non-derivative financial instruments and are stated at amortised cost. Property, Plant and Equipment Recognition and measurement Items of property, plant and equipment are measured at cost less accumulated depreciation and impairment losses. Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of any self-constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the asset to a working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located. 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. Subsequent costs The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Group and its cost can be measured reliably. 13 P a g e

14 The costs of the day to day servicing of property, plant and equipment are recognised in the Statement of Comprehensive Revenue and Expenses as incurred. Depreciation Depreciation is charged at rates that reflect the estimated consumption of economic benefits and useful lives of the assets. Depreciation is charged to the Statement of Comprehensive Revenue and Expense. Land is not depreciated. Leased Assets Leases in terms of which the Group assumes substantially all of the risks and rewards of ownership are classified as finance leases. Upon initial recognition the leased asset is measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset. Other leases are operating leases and the leased assets are not recognised in the Group s balance sheet. Investment Property The Group accounts for all investment properties in accordance with PBE IPSAS 16. Investment properties, principally comprising direct property investments, are held for long term capital appreciation and to earn rentals. Investment properties are initially measured at cost, plus related costs of acquisition. Subsequent expenditure is charged to the asset s carrying amount only when it is probable that future economic benefits associated with the item will flow to the company and the cost of the item can be measured reliably. Properties that are being constructed or developed for future use are classified as investment properties. All costs directly associated with the purchase and construction of a property, and all subsequent capital expenditures for the development qualifying as acquisition costs, are capitalised. Subsequent to initial recognition, investment properties are measured at fair value. Gains and losses arising from changes in the fair value of investment properties are included in the statement of comprehensive income in the period in which they arise. An investment property is derecognised upon disposal or when the investment property is permanently withdrawn from use and no future economic benefits are expected from the disposal. Any gains or losses of the property (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) are included in the Rongowhakaata Iwi Trust Group statement of comprehensive income in the period in which the property is derecognised. Impairment The carrying amounts of the Group s assets are reviewed at each balance sheet date to determine whether there is any objective evidence of impairment. An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount; Impairment losses directly reduce the carrying amount of assets and are recognised in the Statement of Comprehensive Revenue and Expense. Impairment of property, plant and equipment, intangibles and subsidiaries The carrying amounts of the property, plant and equipment and intangibles are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists then the assets recoverable amount is estimated. An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit is the greater of its value in use and its fair value less cost to sell. A cash-generating unit is the smallest identifiable asset group that generates cash flows that are largely independent from other assets and groups. Impairment losses are recognised in the Statement of Comprehensive Revenue and Expense. Impairment losses recognised in respect of cashgenerating units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit (group of units) on a pro rata basis. An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset s carrying amount does not exceed the carrying amount that would have been determined net of depreciation or amortisation if no impairment loss had been recognised. Borrowing Costs Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their 14 P a g e

15 expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation. All other borrowing costs are recognised in profit or loss in the period in which they are incurred. Government Grants Government grants are not recognised until there is reasonable assurance that the Group will comply with the conditions attaching to them and that the grants will be received. Government grants are recognised in profit or loss on a systematic basis over the periods in which the Group recognises as expenses the related costs for which the grants are intended to compensate. Specifically, government grants whose primary condition is that the Group should purchase, construct or otherwise acquire non-current assets are recognised as deferred revenue in the Statement of Financial position and transferred to profit or loss on a systematic and rational basis over the useful lives of the related assets. Taxation Rongowhakaata Iwi Trust Group Determination of Fair Value A number of the Group s accounting policies and disclosures require the determination of fair value, for both Financial and non-financial assets and liabilities. Where applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability. Goods and Services Tax Revenue, expenses, assets and liabilities are recognised net of the amount of goods and services tax (GST) except: where the amount of GST incurred is not recovered from the taxation authority, it is recognised as part of the cost of acquisition of an asset or as part of an item of expense; For receivables and payables which are recognised inclusive of GST. (The net amount of GST recoverable from or payable to the taxation authority is included as part of receivables or payables). Income tax expense is recognised in the Statement of Comprehensive Revenue and Expense except to the extent that it relates to items recognised in equity. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date and any adjustment to tax payable in respect of previous years. Deferred tax is recognised using the balance sheet method, providing for temporary difference between the carrying amounts of assets and liabilities for Financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences: the initial recognition of goodwill, the initial recognition of assets or liabilities in a transactions that is not a business combination and that affects neither accounting nor taxable profit and differences relating to investments in subsidiaries and jointly controlled entities to the extent that they probably will reverse in the foreseeable future. Internal Charges Internal charges are included within the contra accounts as both revenue and expenses to reflect the economic use of resources. These are eliminated, where appropriate, on consolidation. Changes in accounting policies This is the Group's first set of Financial Statements presented in accordance with PBE Standards RDR. Upon transition to PBE Standards RDR the Group has applied a number of transitional provisions afforded in PBE FRS 46. These are detailed in Note 15. There have been no other changes in accounting policies during the year. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that had been enacted or substantially enacted by the reporting date. A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which temporary difference can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that is no longer probable that the realised tax benefit will be realised. There were no material movements to deferred tax for the year (2015: nil) 15 P a g e

16 3. Components of net surplus/(deficit) Surplus before tax includes the following expenses: Rongowhakaata Iwi Trust Group Group 2016 Group 2015 Parent 2015 Accounting Fees 24,907 11,713 9,824 2,800 Administration services 9,411 27,000 9,411 18,000 Advertising 2,807 3,263 2,807 3,263 Audit Fees 25,700 18,000 13,200 5,843 Bank charges 1, Catering 5,385 4,868 5,385 4,868 Consulting 26,366 42,971 21,806 39,899 Directors Fees General Expenses 56,645 96,973 56,232 96,886 Travel 5,942 12, Insurance 35,802 36,903 32,542 32,422 Repairs and Maintenance 19,314 8,270 11,696 8,270 Legal Expenses 43,101 28,872 30,101 11,820 Management Fees 13,960 17, Professional Fees 1,017 4, Rates and Administration 44,290 35,531 4,432 1,363 Rent 19, Rental property costs 2,800 4, Doubtful Debts 12, Total administration costs 350, , , , Cash and Cash Equivalents Group 2016 Group 2015 Parent 2015 ANZ Call Account , ANZ Cheque Account 124,165 42, ANZ Term Deposits 12,297,068 15,279, Petty Cash Taurahere Account Westpac Cheque Account 2,382,145 1,054,578 1,987, ,520 Westpac Call Account 501,825 1,001, , ,146 Westpac Term Deposits 3,904,786 6,227,922 2,925,751 5,264,074 Total Cash and Cash Equivalents 19,210,469 23,690,419 5,064,460 6,898, Taxation Group 2016 Group 2015 Parent 2015 Operating Surplus before Tax 1,322, , Prima Facie tax expense at 28% and 33% (2015: 28% and ,700 (9,402) 33%) on operating surplus before tax Income tax effects of: Imputation Credits from Dividends Received Portfolio Gain/Loss on investment 22, Gain/Loss on Investment Property Revaluation (176,064) (1,788) - - Non Assessable Income - (312) - - Non Deductible Expenses - 11, Rongowhakaata Iwi Trust Gift 20, Total income tax expense recognised in the current year - (27,704) - - Unutilised tax losses brought forward (27,704) Imputation credits converted to losses (336) Total Tax Losses to carry forward (28,040) (27,704) P a g e

17 Group 2016 Group 2015 Parent 2015 Opening Balance (Payable) / Refundable 299, , Plus: RWT Paid 181, , Less: Taxation Refund Received (299,911) (241,157) - - Tax Refund / (Payable) 30 June , , Within the group, Rongowhakaata Settlement Trust is subject to taxation at a rate of 33%. Turanga Group Holdings Limited is a Look-Through Company (and a wholly owned subsidiary of RST) and is taxed at the company rate of 28%. Rongowhakaata Iwi Asset Holding Company Limited is exempt from taxation and Rongowhakaata Iwi Trust is a charitable trust. As a result the prima facie tax expense is a combination of these taxation rates. The Trust has tax losses to carry forward of $28,040 subject to confirmation by the Inland Revenue Department (2015: $27,704). 6. Maori Authority Credits At 30 June 2016 Maori Authority Credits available to shareholders were $181,835 (2015: $249,257) 7. Related Party Investments Rongowhakaata Settlement Trust Rongowhakaata Settlement Trust (RST) is the Post Settlement Governance Entity (PSGE) formed to receive treaty settlements. As at 30 June 2016 there were $20,315 (2015: $20,315) receivable from RST for Trustee fees paid on behalf. The Parent has a loan outstanding from RST of $6,461,887 (2015: $6,205,000). RST Trustees intend for these funds to represent an interest free loan, being repayable on demand. RST Trustees gifted $800,000 to Rongowhakaata Iwi Trust during the year (2015: $963,000). As at 30 June 2016 there were $33,009 (2015: $27,639) receivable from Rongowhakaata Iwi Asset Holding Company by RIT. Key Management Personnel The key management personnel, as defined by PBE IPSAS 20 Related Party Disclosures, are the members of the governing body which is comprised of the Board of Trustees and Directors, which constitutes the governing body of the Group. The aggregate remuneration of key management personnel and the number of individuals, receiving remuneration is as follows: Group 2016 Group 2015 Parent 2016 Parent 2015 Total Remuneration 55,709 66,960 46,709 48,960 Number of Persons Te Hau Ki Turanga Trust In accordance with the Funding Agreement between Minister of Arts, Culture and Heritage and Te hau Ki Turanga Trust (THKTT) signed on 18 August 2014, Rongowhakaata iwi Trust received $1,000,000 on behalf of THKTT. These funds are held in trust and are to be used for the purposes as outlined in the Funding Agreement. The amount of $34,163 (2015: $988,123) remaining at balance date is the net amount held in trust after expenses in line with the Funding Agreement has been deducted. 17 P a g e

18 9. Categories of Financial assets and liabilities The carrying amounts of financial instruments presented in the statement of financial position relate to the following categories of assets and liabilities. Notes Group 2016 Group 2015 Parent 2016 Parent 2015 Financial Assets Financial assets at fair value through surplus or deficit Craig s Portfolio 10a 1,202, ,843 - Forsyth Barr 10b 3,567,321-1,500,228 - Financial assets available for sale Moana New Zealand Shares 10d 734, , Deepwater Group Limited 10g Loans and Receivables Cash and Cash Equivalents 4 19,210,469 23,690,419 5,064,460 6,898,033 Receivables from exchange transactions 190, , , ,191 Receivables from non-exchange transactions 10,000-10,000 - Income tax refund due 5 175, , Inter-entity balances ,009 27,639 Port Nicholson Fisheries Limited Partnership 10h 36, Loan Reweti Waikari 10f - 12, Arai Matawai Loan 10i 2,500,000 3,000,000 2,500,000 3,000,000 Financial Liabilities At amortised cost Trade and other creditors 161, ,955 65,599 93,497 Income in Advance 2,834 87, Inter-Entity Payables ,488,108 6,205,000 Loans and Borrowings 34, ,123 34, , Investments Investments are shown in the Statement of Financial Position as follows: Note Group 2016 Group 2015 Parent 2015 Craig s Portfolio 10a 1,202, ,843 - Forsyth Barr 10b 3,567,321-1,500,228 - Moana New Zealand Shares 10d 734, , Crayfish & Fish Quota 10e 1,664,650 1,664, Deepwater Group Limited 10g Port Nicholson Fisheries Limited Partnership 10h 36, Loan Reweti Waikari 10f - 12, Arai Matawai Loan 10i 2,500,000 3,000,000 2,500,000 3,000,000 Te Hauora O Turanganui A Kiwa Limited 10j 515, , , ,942 ROCO Partnership 10c 170,289 24, ,289 24,648 Total 10,390,895 5,926,427 5,284,454 3,515,590 a) Craig s Portfolio Group 2016 Group 2015 Parent 2015 Opening Balance Plus: Capital Contributions 1,250, ,000 - Net Interest and Dividends 2, ,252, ,991 - Investment Written (Down)/Up (49,734) - (27,148) - Closing Balance 1,202, , P a g e

19 b) Forsyth Barr Group 2016 Group 2015 Parent 2015 Opening Balance Plus: Capital Contributions 3,610,000-1,500,000 - Net Interest and Dividends 2, ,612,432-1,500,228 - Investment Written (Down)/Up (45,111) Closing Balance 3,567,321-1,500,228 - c) ROCO farming Limited Partnership On 7 October 2015 Rongowhakaata Iwi Trust (RIT) formalised a Limited Partnership agreement with Coxco Holdings Limited (Coxco) and ROCO GP Limited called the ROCO Farming Limited Partnership. RIT and Coxco are limited partners with ROCO GP Limited being the general partner. ROCO GP limited was incorporated on 16 September 2015 with registration number RIT and Coxco hold 50% shares in ROCO GP Limited each. The Limited Partnership was established to carry on business of cropping and grazing the land owned by Rongowhakaata Settlement Trust (RST) and leased by the Limited Partnership from RST and any other land owned by a third party and leased by the Limited Partnership from time to time. The Limited Partnership may also undertake such further or other business or operations as the General Partner shall consider appropriate in all the circumstances. Per the previous year the investment totalled $24,648 and during the year a further $306,887 of expenditure was incurred. In the 2016 income year the equity in ROCO Limited accounted to $340,579, of which $170,290 is attributable to Rongowhakaata Iwi Trust. At balance date an impairment loss was recognised of $161,245 to correctly account for the interest in the Company. d) Moana New Zealand Shares The fair value of the Moana New Zealand income shares is based on the Net Present Value (NPV) of the discounted cash flows calculated on the expected annual income from 2016 to 2021 and a terminal value based on cash flows in 2021 with an assumed growth factor of 5% over the first 5 years and 2.6% for the terminal value and a posttax discount rate of 6.4%. A 20% liquidity has been taken into account in determining the fair value. The Moana New Zealand shares are revalued every three years using this method. The next calculation will take place in Where the fair value is not calculated in a year, the carrying value is reassessed for any material change. e) Fish and Crayfish Quota Fish quota has been recorded at 30 June 2016 at a market value basis. The market valuation was expressed by Quota Management Systems Limited dated 15 October 2015 for the year ended 30 June The market valuation is completed every 3 years in accordance with the management policy. Where the fair value is not calculated in a year, the carrying value is reassessed for any material change. f) Loan Reweti Waikari Group 2016 Group 2015 Parent 2015 Opening Balance 12,000 12, Less: Provision for Doubtful Debts (12,000) Closing Balance - 12, This loan is currently being pursued by the Trust. A payment plan is being discussed as it is unlikely that this loan will be repaid in full in the coming year. A provision has been provided for this loan in the event that the loan is not able to be fully recovered. g) Deepwater Group Limited Shares in Deepwater Group Limited are recorded at cost. 19 P a g e

20 h) Port Nicholson Fisheries Limited Partnership Rongowhakaata Iwi Asset Holding Company (RIAHC) entered into a Limited Partnership (LP) in The LP is Port Nicholson Fisheries Limited Partnership. The General Partner (GP) of the LP is Port Nicholson Fisheries General Partner Limited. RIAHC has no interest in, or directors on the Board of the GP. RIAHC is a limited partner of Port Nicholson Fisheries Limited Partnership. RIAHC sells Rock Lobster annual catch entitlement (ACE) to the LP on an annual basis. The LP catches against this ACE, deducts relevant costs associated with procuring, harvesting, processing marketing and having the operation managed. The profit is then returned to the limited partners effectively as lease income for that ACE contributed. The LP surplus for the period was fully allocated to the limited partners as was the net assets. Only the leased ACE income has been recognised in RIAHC accounts including the allocated surplus. RIAHC is not aware of any commitments or contingencies relating to the JV which would affect these Financial statements. The balance date of the JV is 31 March which aligns with the Rock Lobster fishing year. Group 2016 Group 2015 Parent 2015 Opening Balance Profit for the year allocated 37,120 38,816 37,120 38,816 Less: Cash distributions to partners - (38,816) - (38,816) Less: RWT distributed to partners (215) - (215) - Closing Balance $36,905 - $36,905 - i) Arai Matawai Loan The Board has provided funding to Arai Matawai for the amount of $3,000,000. The loan consists of three tranches of $1,000,000 each with interest rates between 6.3% to 6.55%. The loan is to be repaid by Rongowhakaata Iwi Trust has registered first mortgage security over Certificates of Title GS3/D517 and GS4A/794. The Trust also has a second registered mortgage security over Certificates of title GS2C/482, GS2C/483 and GS2D/208. j) Te Hauora O Turanganui A Kiwa Limited Rongowhakaata Iwi Trust has a 1/3 ownership interest in Te Hauora O Turanganui A Kiwa Limited. In accordance with PBE IPSAS 7 Investments in Associates the interest was initially recorded at cost, with subsequent share of surpluses recognised in profit or loss. The current 1/3 share of the investment is $515,093 (2015: $490,942). 11. Investment Property Group 2016 Group 2015 Parent 2015 Balance at the beginning of the year 9,451,859 9,451, , ,000 Fair value change to Investment Properties 526,320-3,929 - Additions 5,613-5,613 Balance at the end of the year 9,983,792 9,451, , ,000 The fair value of the Group's investment properties as at 30 June 2016 has been arrived at on the basis of an independent valuation carried out by Lewis Wright Valuation & Consultancy Limited Gisborne. The valuers have appropriate qualifications and recent experience in the valuation of properties in the Gisborne area. Valuations were carried out for financial reporting purposes. The fair value of the properties in the Group was determined based on either: a) Capitalisation of Income: This approach is the most widely used industry approach and is particularly useful on properties with uneven income streams from multiple tenants as is often the case with commercial and industrial properties. b) Direct Sales Comparison: This approach is an estimate of value based on a comparison of the asset to similar assets that have recently sold. Adjustments are made to allow for factors such as the date of sale, size of property, location, quality, condition, marketability, general condition plus access, contour and tenure. This method is most appropriate for vacant sites and land only valuations. c) Income Approach assuming a highest and best use scenario: This approach attempts to reflect what a prudent investor would pay for an asset given its expected ability to achieve a Financial return commensurate with the risks involved in that asset. There are two widely used sub approaches used namely the Capital of Passing Income Flows and Discounted Cash flow approaches. The Capitalisation of 20 P a g e

21 Passing Income is generally the most widely used approach, although the Discounted Cash flow Method is particularly useful on properties with uneven income streams from multiple tenants as may often be the case with commercial and industrial properties. d) Discounted Cash flow Approach: This approach discounts the cash flow over a 10 year investment horizon to derive a net present value for the Investment property. 12. Property, Plant and Equipment Group Cost or Valuation Furniture and Fittings Motor Vehicles Total Balance at 1 July ,837 36, ,350 Additions 3,093-3,093 Balance at 30 June ,930 36, ,443 Accumulated Depreciation and Impairment Furniture and Fittings Motor Vehicles Total Balance at 1 July ,120 2,739 68,859 Depreciation 3,749 10,132 13,882 Balance at 30 June ,869 12,871 82,741 Net Book Value Furniture and Fittings Motor Vehicles Total As at 1 July ,752-10,752 As at 30 June ,717 33,774 44,491 As at 30 June ,061 23,642 33,703 Parent Cost or Valuation Furniture and Fittings Motor Vehicles Total Balance at 1 July ,837 36, ,350 Additions 3,093-3,093 Balance at 30 June ,930 36, ,443 Accumulated Depreciation and Impairment Furniture and Fittings Motor Vehicles Total Balance at 1 July ,120 2,739 68,859 Depreciation 3,749 10,132 13,882 Balance at 30 June ,869 12,871 82,741 Net Book Value Furniture and Fittings Motor Vehicles Total As at 1 July ,752-10,752 As at 30 June ,717 33,774 44,491 As at 30 June ,061 23,642 33, P a g e