Te Runanga O Toa Rangatira Inc Group

Te Runanga o Toa Rangatira Inc Group

2018 ANNUAL REPORT (1 July 2017 to 30 June 2018)

Upane ka upane whiti te ra Advancing together into a brighter future

Moemoea Kia tu ai a Ngāti Toa Rangatira; Hei iwi Toa, hei iwi Rangatira Ngāti Toa is a strong, vibrant and influential Iwi, firmly grounded in our cultural identity and leading change to enable whanau wellbeing and prosperity

CONTENTS

2 | W h ā r a n g i

EXECUTIVES, DIRECTORS, TRUSTEES, COMMITTEES

EXECUTIVE DIRECTOR: TE AWARUA O PORIRUA AUDIT, RISK & INVESTMENT Matiu Rei WHAITUA COMMITTEE: COMMITTEE: Hikitia Ropata Miria Pomare, Chair

BOARD / TRUSTEES Jennie Smeaton Caroline Taurima Taku Parai Elected – Chair Sharli Jo Solomon Francis Freemantle Helmut Modlik Willis Katene Elected – Deputy Ian Lyver Arthur Selwyn Takapuwahia Marae WHAITUA TE WHANGANUI-A- Kyle Edmonds Matthew Solomon Takapuwahia Marae TARA: Patariki Hippolite Whakatu Marae Matiu Rei Miria Pomare Hongoeka Marae Taku Parai NGATI TOA / RUNANGA Moana Parata Hongoeka Marae REPRESENTATIVES: Tracey Williams Wairau Pa Marae Whitireia Community Law Rihia Kenny Kuia TOA RANGATIRA EDUCATION Centre Mahurenga WineeraKoroua ACHIEVEMENT: Rahui Katene Willis Katene, Chair Georgy Selwyn Rangatahi Hyrum Hippolite Rangatahi Jeanette Grace Whakatu Marae Land Trustees Helmut Modlik Elected Rik Wineera Rangiriri Kohe

Rangi Piwari Hepa Potini Elected Whakatu Marae Committee Ranei Parai-Wineera Kahu Ropata Elected Rawenata Geiger Naomi Solomon Elected Simone Leaupepe-Sua TWOR Te Mana Whakahaere

Matiu Rei DIRECTORS – IKA TOA LTD:

EDUCATION FUNDING Te Anatiu Hammon, Chair Te Kura Maori o Porirua ALLOCATION: Evan Hippolite Miria Pomare Linda Hall-Thorpe, Chair Margaret Hippolite Kapiti Island Strategic Herani ware Mark Styles Advisory Willis Katene Rangi Solomon Miria Pomare Tahua Solomon WRC Climate Change SPORTS FUNDING ALLOCATION: MIria Pomare Shayne Warren, Chair Te Whakaminenga o Kapiti DIRECTORS – NGATI TOA LTD: Arthur Selwyn Natalia Repia Shayne Warren, Chair Karewa Arthur Jnr

Mark Styles Maria Dunlop TWOR Foundation Te Ariki Wineera Melissa Love Matiu Rei

Wiremu Taurima Jeanette Grace

DIRECTORS – ORA TOA PHO: DIRECTORS – WHENUA TOA Whitireia Park Board TRUST: Teresa Wall, Chair Sharli Jo Solomon Taku Parai Cassius Kuresa Francis Freemantle Jenny Ngarimu Charlene Williams Matiu Rei Taku Parai

Matiu Rei DIRECTORS – KENEPURU DEVELOPMENT LTD: Randall Hippolite Mana College Matiu Rei Teiringa Davies Francis Freemantle Randall Hippolite

CHAIRMAN’S REPORT

Taku Parai Chairman Te Runanga o toa Rangatira Inc

Ko Whitireia raua ko Rangituhi aku Maunga

Ko Parirua, Kenepuru, Mahinawa, Tangare, Kokiri me Hukarito aku wai heke Ki Parirua tai timu, tai pari Takapuwahia te marae Tainui te Waka Ngati Toa te Iwi Te Rauparaha te Tangata

E te Iwi Tena Koutou Katoa,

First, can I say to our whanau who have lost loved ones throughout the year, words cannot express how we feel at the loss of our dearly departed. To the new born iwi members, we welcome you and congratulate all the whanau on their new additions. It has been a privilege to Chair the Board of Te Runanga o Toa Rangatira for 2018, I have been supported by a robust, inquisitive united membership who along with our management team are committed to ensuring our iwi is strong and well. This year has been a very busy year for the Runanga as it continues to advance the interests of the iwi. Careful overseeing and managing the many aspects of our traditional business, as well as ensuring the business derived from our Treaty Settlement, provides growth and ensures a brighter future for our current and future generations.

Can I say that the past year has been very stable yet progressive with our financial position being very strong, and with other interests coming on line soon the short to long term financial forecast looks very encouraging. This is due to our financial team including ARIC working together to ensure all decisions are based on solid well researched due diligence. The financial report presented today will cover off the many aspects of our financial journey and position for this year. Of importance to our iwi is the impending housing opportunity that will in my view provide our people with Jobs, training and a better sense of security, these opportunities will be covered off in the CEO’s report. I would like to say a big thank you to Management and staff who have had a challenging year yet through it all have managed to ensure the best possible outcomes are achieved. The Runangais aware of the load Management and staff carry on our behalf, we are also aware of the ongoing changes and challengers that influence our business from time to time which also brings added pressures and the ongoing need to ensure we are operating with best practice and cultural competence. So, to Ta Matiu and his team thank you all very much for your support and work achieved for 2018. To our Iwi thank you all for your support, patience and aroha as you are aware our board is made up of whanau who are there to ensure the cultural, sustainability and development opportunities have the iwi’s interests at the centre of their decision making. The stronger the platform we can develop today will ensure the future generations pathway ahead will allow them to be self-reliant, self- determined and for some to be better positioned to forgo state dependence.

Again, can I thank the iwi for your support and say it is an honor and a privilege to serve our people, have a safe and happy Christmas and a may a bright New Year bring you all joy and happiness.

Can I conclude by referencing the end of my speech I read at the signing of our Deed of Settlement in Parliament, on the 7th December, 2012,- quote ‘I say these things not to be boastful but to state that as a very small Iwi in terms of numbers the evidence has proved and will continue to prove that throughout history Ngati Toa will always be known as a quite unassuming people, but very capable of punching above its weight. From today we will move forward.’’ Unquote. No reira e te Iwi

Tena Koutou, Tena Koutou, Tena Koutou, Katoa

EXECUTIVE DIRECTOR REPORT

Kia hōra te marino. Kia Whakapapapounamu te moāna. Kia tere te kārohirohi. I a tatou e whai hua ana I a tatou mahi. Kātahi, me wehi ki Te Atua, nōna te whakairo nui, kia tapu tōna ingoa ake tonu atu. Kā rua, me mahara hoki ki te hunga kua riro ki tu atu o Te Arai. Nā rātou I manakohia, nā mātou e whakatinanatia a rātou moemoea, hei whai kounga hoki I a mātou mahi. No reira e nga mate, haere, haere, haere atu ra. Kāti rā, ka āpiti hono, tatai hono, te hunga mate ki te hunga mate, ka āpiti hono, tatai hono, te hunga ora kite hunga ora. Ta Matiu Rei Tihei Mauriora! Executive Director

Next year will mark the 30th year since the establishment of Te Runanga o Toa Rangatira Inc. Two or three years prior, I was on a committee that organised Te Reo Maori immersion programmes under the banner of Te Whakatupuranga Rua Mano. At the time, the Labour Government were proposing the establishment of Runanga or mandated Iwi Voice through a Bill in Parliament. This was a key platform of their programme, Devolution, or the disestablishment of the Department of Maori Affairs and the redistribution of Vote Maori to iwi. In anticipation our committee consisting of representatives from Ngati Raukawa, Atiawa ki Whakarongotai and Ngati Toa, developed a prototype constitution for use by the three iwi. Our constitution retains many characteristics of that prototype. The last significant change to the Constitution occurred in 2008 to include changes including representation and requirements of the Maori Fisheries Settlement Act. In August 2012, Ngati Toa’s Deed of Settlement for Historical Claims was signed. The two documents form the basis for Ngati Toa’s development. To honour a promise made in 2009 the Runanga has agreed to review the Constitution and to extend the review to the Deed of Settlement. It has appointed a panel of Jeanette Grace, Baden Vertongen and Rawiri Faulkner. The panel will be coming your way to seek your participation in the review.

In many respects the past year has been one of consolidation of our various activities. It pleasing to see movement happening on our Kenepuru subdivision development. Stage 1 is well on its way to completion. 148 sections have been sold and allocated to builders. A further 6 hectares has been sold to Somerset, the aged residential care developer and a 1.5-hectare block sold to ABI a disability provider. Iwi members were given an opportunity to have first pick of the planned homes in stage 1

6 and a number have taken advantage of that opportunity. In November last year Oratoa purchased Waitangirua Medical Centre to complement our other four centres. Much of the equipment was old and obsolete and we were fortunate in obtaining a sizable grant from the Maori Provider Development Scheme operated by the Ministry of Health. Our Primary Health Organisation (PHO) now has over 18,000 registered clients. There are only two other iwi owned PHOs in Aotearoa. You now would have heard, that the Runanga has been developing two significant but different projects. First being Community Housing and the second in aquaculture. Both projects emanate from Treaty Settlements. Community Housing from RFRs (Right of First Refusal) and the second from the Maori Aquaculture Settlement Act which was an outcome from our challenge to the Crown’s assumption of ownership of the foreshore and seabed. The Community Housing project will result in the Runanga managing approximately 900 HNZ properties with options to purchase. These properties are in Takapuwahia, Mana, Titahi Bay Elsdon, and Linden. We will have a contractual arrangement with Ministry of Social Development who provide the tenants and 75% of the rent. We expect that this service will have approximately 30 positions not including maintenance personnel. The aquaculture project will initially be a collaboration of Tauihu iwi and could extend to other owners within each AMA. Via the Aquaculture Settlement Act, iwi is entitled to 20% of new coastal space allocations. Eight new AMAs (Aquaculture Marine Areas) have been established in Golden Bay and Western Tasman Bay totalling a little over 2000 hectares. The iwi allocation is 200 hectares with 1/8th entitlement to Ngati Toa. Stage 1 will comprise of 139 lines with an expected 2-year production of approximately 3,200 tonnes. Finally, I’m pleased to announce that for year ending 30 June 2018 the consolidated result for the Runanga and Trust was a surplus of $16m and a net worth of a little under $200m. Personally I would like to thank the Chair and Board for their support and also thank the management team and staff for their hard work and loyalty which enabled us all to achieve a wonderful outcome for the year. Kāti rā, he kupu whakamutunga, he meri kihirimete me nga mihi o te tau hou ki a koutou katoa.

Tena koutou, tena koutou, tena tatou.

PITOPITO KORERO

ADMINISTRATION / COMMUNICATIONS Te Whakaminenga o Kapiti MOP – On the 5th December 2017, Taku Parai and Mathew Solomon signed the Te Whakminenga o Kapiti MOP on behlaf of Ngāti Toa. While Te Whkaminenga o Kāpiti has primarily been involved with issues to do with resource management, it has also worked, particularly in more recent years, to ensure that the Māori World view is better represented and understood in the broader community. From the beginning Te Whakaminenga o Kāpiti has focused on harmonising different cultural attitudes to resources and solve local issues according to national legislation.

Restoration of Te Ahi Kakariki – Te Ahi Kakariki made its journey across Te Awarua o Porirua Harbour for the first time in 27 years at the Waitangi Day Festival in Porirua. The Rūnanga would like to thank Creative New Zealand and Wellington Community Trust for their help with funding the project.

Mana Pou – 60 iwi members went to Mana Island to celebrate the new Pou. The concept for the pou was to represent Te Mana o Kupe ki Aotearoa, a great significance for not only Ngāti Toa Rangatira but for all Māori. The name commemorates Kupe’s voyage across the ocean and his defeat of Muturangi. The pou has been placed on Te Rangihaeata’s Pā, to represent the connection Ngāti Toa have with Kupe.

Tawhito Whenua – As part of the Ngāti Toa Deed of Settlement of Historical Claims, On the 28th June, Tawhito Whenua, the mere of Te Rangihaeata, was placed in Parliament. Iwi members gathered at the steps of Parliament to carry Tawhito Whenua through the front door, this was a sign of the Mana that Tawhito Whenua and Ngāti Toa would now have not only in Parliament but in the Rohe.

8 Manu Huruhuru Wānanga – We held our first ever Manu Huruhuru wānanga. The Department of Conservation receives dead native birds from members of the public and stores these to be used in the making of korowai. The wānanga was held at Hongoeka Marae in co-operation with The Department of Conservation.

Cultural Mapping – The resource team have kick started our cultural mapping project. The Ngāti Toa cultural mapping project will help our team and the iwi identify on maps, areas and sites of cultural significance to Ngāti Toa. We are in the process of collecting data and will be running wānanga across

Aotearoa early next year.

Many iwi in Aotearoa have developed a Cultural Resources Database as key information, planning and decision support tool. The cultural resources database is a centralized inventory of information about culture and heritage resources.

Cultural resource mapping is a visual representation in the database. It allows the iwi to identify traditional sites of significance.

Ngāti Toa have rich history of events and journeys which begin in Kawhia and makes their way down to Te Upoko o Te Ika and Te Tau Ihu. The rohe of Ngāti Toa covers from Whanganui in the North to Kaikoura and Hokitika in the South. It was an accomplishment in itself for an iwi the size of Ngāti Toa to assert Ahi Kaa over a large territory. The side effect of this accomplishment are the information gaps around traditional sites of significance.

9 The Ngāti Toa focus group for the Porirua District Plan - was created to provide direction in how the district can provide for Iwi interests. Cultural values were outlined with the help of iwi reports and kaumatua interviews. The group identified iwi issues including flooding in our communities and the degradation of the natural environment. The results from the focus group are the implementation of a Tangata Whenua chapter and the inclusion of cultural values throughout the plan.

Kaumatua Housing – Te Runanga o Toa Rangatira added to their Kaumatua Housing stock with the purchase of 2 Te Hiko Street in April 2017. There are 5 x one bedroom flats downstairs set aside for Kaumatua and 5 x 1 bedroom flats upstairs that are occupied by existing tenants that resided there when the sale and purchase went through. In the 18 months that the Runanga have owned these flats we have renovated flats 1 to 6 with new kitchens, new bathrooms, new flooring and new paint throughout the interior. We have also renovated and re roofed the one bedroom flats at 16a Ngati Toa Street.

RESOURCE MANAGEMENT

Te Ao Turoa has been busy within our rohe with ongoing interests in development and the protection of the environment. Our partnerships with regionally significant projects like Transmission Gully and Te Awarua o Porirua Whaitua ensures that Ngati Toa has input throughout the different stages of development. There are numerous projects currently underway that we are involved in that aim to protect and enhance the natural environment. We have reached out to keen iwi members that want to be involved inanimal translocation, iwi monitoring, biodiversity management and other opportunities to carry out our Kaitiaki responsibilities.

Te Awarua-o-Porirua Whaitua Committee is a group of local people tasked with recommending ways to maintain and improve the quality of our fresh water. The Committee, established in December 2014, has been working to collect and relay environmental, mana whenua, economic, and technical information and community knowledge between the community, committee and the Regional Council.

Ngati Toa Rangatira has two seats on the committee and an extra iwi member representing the public. In 2018 Ngati Toa disbanded from the committee to develop a parallel process that reflects iwi values and aspirations.

Ngati Toa focus group for the Porirua District Plan was created to provide direction in how the district can provide for Iwi interests. Cultural values were outlined with the help of iwi reports and kaumatua interviews. The group identified iwi issues including flooding in our communities and the degradation of the natural environment. The results from the focus

10 group are the implementation of a Tangata Whenua chapter and the inclusion of cultural values throughout the plan.

TOA RANGATIRA EDUCATION ACHIEVEMENT TEAM The Toa Rangatira Education Achievement team (TREAT) has been through some changes of committee members with Hayley Pemberton returning to Nelson and the resignation of Kahu Ropata due to work commitments. The Runanga wishes to thank both Hayley and Kahu for their contribution, time and advice they have provided while on TREAT.

Rangatahi Wānanga Reo – TWOR Foundation established a distribution policy that supports the efforts of Te Wānanga o Raukawa in encouraging the education and survival of Māori as a people as required under the Foundation Trust Deed. The policy also directs that funding can be allocated to initiatives, programs and scholarships for the benefit of members of Te Wānanga o Raukawa, the three Iwi of the ART Confederation and their members. We were able to host 2 Rangatahi Wānanga Reo with this funding at both Takapuwahia and Hongoeka Marae to:

• Enhance Te Reo; • Grow Tikanga of rangatahi; • Expose rangatahi to Ngāti Toa stories; • Learn Ngāti Toa moteatea /waiata • Support environmental programs with the Puna Matauranga Educationteam; • Align Wānanga to our strategic goals; and • Plan visits to TWOR.

During these Wānanga, Rangatahi visited Te Wananga o Raukawa, Whakarongotai Marae and Mana Island. Current students of TWOR were guest speakers at the October Wānaga Reo. Thanks to Kaiako Ihaia Ropata, Te Rauparaha Solomon, Matawai Winiata and Coralai Repia.

TE PUNA REO O NGATI TOA Highlights Te Puna Reo o Ngāti Toa (Puna) is now in it’s fourth year and we are proud of the mahi that has been undertaken during this time and through the development of our tamariki and whānau. • Successful ERO Review This year sees a number of our original pēpi who have been with our Puna • Implementation of since it opened depart for kura. It is pleasing to see that in most part whānau whānau hui have chosen to continue the reo journey with their tamariki as they leave • Celebration of key Puna for Kura Māori or bilingual mediums. events • Staff development The Puna underwent its ERO review in May of this year. We felt ERO Review - • Implementation of the review was highly successful with key findings of the report stating that: Puna Reo philosophy • Children’s wellbeing is well supported by Te Rūnanga o Toa Rangatira who document provides governance support to the puna reo • Children participate in learning that is well planned and organised. • Kaiako planning, assessment and evaluation processes are in place. 2018/2019 Priorities • Planning is a collaborative process. • The curriculum is responsive to the vision of the iwi, children’s individual interests, group interests, and the emotional and physical needs of babies. • Stories about Ngāti Toa are integrated throughout the planning. • Increased Te Reo • Children’s identity as Ngāti Toa is upheld as they recite karakia, chant Māori mōteatea, recite their whakapapa, and sing waiata. • System and process • Kaiako arrange for children to visit local displays and land marks that are improvements prominent to their identity. Children initiate learning based on their • Continued staff interests. development • The babies learn in an environment that is calm. • Staff development • Kaiako are tuned into the needs of the babies and respond to them • Alignment of strategic quickly. They have formed loving relationships with these children. documents to Runanga strategic plan. There were areas outlined for improvement and these will be addressed as priorities as part of our 2018/19 work programme. The areas for improvement are to strengthen the level of Te Reo Māori spoken throughout the Puna and, Quick Facts for the implementation of strategies and goals outlined within our Puna Reo Action Plan. • We have a full role with an enrolment The full ERO Report can be accessed via the ERO website: waiting list. • Enrolments have https://www.ero.govt.nz/review-reports/te-puna-reo-o-ngati-toa-28-06- closed until 2019. 2018 • We have 43 tamariki on our roll. • 50% the tamariki in Implementation of Whānau Hui - We have begun holding one whānau hui per attendance term. Our whānau hui is a time for all whānau to come together to hear what whakapapa to Ngāti is going on at Puna, enable valuable whānau and kaiako time together and Toa. celebrate the achievements of our tamariki. • Over 65% of our staff whakapapa to Ngati Toa.

12 We have used our whānau hui time to introduce topical events such as key note speakers. We recently held a Brainwave seminar which was highly beneficial for our whānau and kaiako.

Celebration of key events - Our kaiako proactively seek out opportunities for our tamariki to participate and celebrate events with particular emphasis to Ngāti Toa and all things Te Āo Māori. Some of the events this year have been:

• Ngati Toa Hui Rangatahi ope visit the tamariki to share waiata and stories • Te Wiki o Te Reo Māori and the hikoi celebration through the Pōneke CBD with whānau • Launch and karakia of the Puna branding andsignage • Dawn matariki celebrations which was an umu kohukohu whetu (bonfire atdawn) • Regular participation at pōwhiri at TakapuwahiaMarae

Staff Development - We have a number of kaiako studying to enhance their reo Maori skills and/or attaining higher level ECE qualifications. Attainment of a higher proficiency in Te Reo Māori directly links to the objectives within our Ngāti Toa Puna Reo Action Plan to Strengthen Te Reo Maori 2017- 2020.

We recently held a Kaiako Only Day at Hongoeka Marae. This trip was invaluable for our kaiako to hear about Hongoeka and the whare, Te Heke Mai Raro. It is important that all Ngati Toa marae be incorporated into our curriculum. Our next development opportunity will be based around the Māori lunar calendar.

Creation and Implementation of Puna Reo Philosophy document - Earlier this year we implemented a new philosophy based on some of the tukutuku and kōwhaiwhai at Takapūwāhia Marae, Te Tūāpapa o Te Puna Reo o Ngāti Toa (The foundation of Te Puna Reo o Ngāti Toa). Our vision is to align our teaching philosophy and principles with our identity as Ngāti Toa.

Increased use of Te Reo Māori - We are continuing to strengthen the use of Te Reo at Puna. It is our vision that by 2020 the level of proficiency and fluency would have increased to 100% immersion. We are using more conversational language as opposed to directions and greetings.

System and process improvements -We continue to explore options that provide more efficient use of our time whilst still providing quality reporting outcomes. We will be looking to align our strategic documents with the strategic Runanga documents. We review Puna policies and procedures as and when required. All changes are communicated to our kaiako and whānau.

I would like to thank the kaiako for their continued commitment and dedication to the revival of Te Reo Māori and especially to the developmental needs of our tamariki. Our kaiako, as reflected in our ERO report have a love for our tamariki that is reflected through the wairua of our Puna. We are proud to provide a korowai of learning to our tamariki throughout these precious developmental years. We would also like to thank our whānau for their continued support in growing Te Reo Māori and the philosophies undertaken and applied at our Puna.

Tamaiti Profile Kaiako Profile

Rorey Ruapounamu Olsen Marina Robben Nō Ngāti Toa, Te Atiawa ki Nō Ngati Toa, Ngāti Koata Whakarongotai me Te Whānau a Apanui

Whaea Marina is one of thefirst Kaiako that started here when Puna first opened. She has recently Rorey started Puna shortly after she just completed her 2nd year of turned 1 years old. She is going to be study at Te Wananga o Raukawa 5 in December and will be and will be graduating nextyear continuing her Māori medium with her degree in Poutuārongo journey at Te Kura Māori o Porirua. Whakaakoranga Kohungahunga Since she has been at Puna we have Bachelor of Teaching (ECE). Whaea seen her grow into a beautiful young Marina is one of the first Kaiako kōtiro. She loves to help out with that started at Puna. She is the routines and structure, she asks mokopuna of nanny Eileen Rene, kaiako often to help settle pēpi or who was the kuia for the Kohanga change their kope- He whakaaro Reo at Takapūwāhia Marae.Whaea rangatira. She loves to help kaiako in Marina has completed her 2nd year our rūma moe by giving her teina of study at Te Wananga o Raukawa awhi and singing them to sleep. He and hopes to graduate nextyear kānohi hōmiromiro- She will quietly with Poutuārongo Whakaakoranga observe things from afar until she is Kohungahunga (Bachelor of confident enough to jump in. He Teaching ECE). We are very korokoro tūi- beautiful voice, learns fortunate to have Whaea Reens as kupu to waiata after hearing it once, one of our Kaiako at the Puna. She so receptive to the power of waiata, is dedicated about the kaupapaand is one of our kapa babies. He pī ka always looks for opportunities to rere- he wairua tau tōna, settled, extend her knowledge of Te Reo confident and comfortable. She can Māori, Te Āo Māori and Early recite pēpeha, can lead the entire childhood learning and apply it into Puna for waiata/kapa haka, karakia, practice for the tamariki. Once she lead mōteatea, tuku mihi, tuku pao completes her ECE Degree, Whaea mō te wā whāriki. She loves to help Reens plans to do a Mātauranga with kai prep for paramanawa. We Māori Degree at Te Wānanga o have every confidence that she will Raukawa. Tēnā koe e te ihu be great and is more than ready for oneone, e kaha hāpai nei i tō tatou the new experiences and challenges kaupapa.ōtira mō tō arohanui ki a that await her at Te Kura Māori o tatou tamariki mokopuna. E kore Porirua. E mihi ana kia koe Rorey ngā mihi emutu. Girl, ko koe tēnā e kahawhakatinana i ngā kōingo a kui mā, a koro mā.

14 Te Puna Mātauranga o Toarangatira Supporting whānau to achieve educational success as NgātiToa.

Following a successful 2017 programme, TPMOT continue to develop educational support programmes in primary and secondary education. Over the past year more than 150 students have accessed 6 initiatives developed and run through the service.

P U N A P R I M A R One to one tutorials Primary Education - 2018 Y

32 11

12 Wrting Maths Reading

Puna Primary - has worked with 32 children across 6 primary schools in the Porirua and Tawa region. The programme supports students with their next learning steps in either reading, writing or math by working together with whānau and classroom teachers. Puna Primary tutors work during and after school with each student on a weekly basis and have reported some key shifts for students. Imperitive to this support, is providing culturally relevant curriculum advice, access to information and support, workshops and tutorials. Programme achievement data will be avaliable at the end of the school year.

P U N A S E C O N - One to one tutorial sessions attended D A R Y Secondary Education - 2018 (70)

30 5 9 32 24

Maths Science Māori English

Puna Secondary - supported 30 students across 9 schools in the Porirua and Wellington region, from year 9- 13 to achieve success in school. Students attended weekly open nights over the year, accessing tutorials, space to study and study materials including access to internet and tech.

Throughout 2018, open nights attracted over 270 visits by secondary students who worked consistently hard to keep up with school work and access help when needed. Achievement data will be avaliable in early 2019 for level 1-3.

15 Ka Hikitia – Supporting Success worked with 60 whānau through 2018. Increasing whānau K A H I K I T I A engagement by providing access to resource relevant to either primary or secondary P R I M A R Y A N DS E C O N D A R Y education. Monthly workshops were a critical part of enrolment and over the past year, attendance for both primary and secondary were over 80%, with most whānau attending

60 100% of workshops.

Through this programme Puna ran workshops in app design and development with the launch of Te Puna Mātauranga app for both iOS and android devices this year. Yearly planning included environmental education, business enterprise and te reo Māori. Te Puni Kokiri awarded TPMOT a small grant to develop a mara kai on their grounds, which has been successful throughout term 3 and 4 and a great space to build whānaungatanga and support environmental education for term 4s unit. 10 secondary students with pathways in IT attended a week workshop in app design and development and film making and editing. This was a successful programme and has enabled new skill sets to be learnt and used in Puna by our rangatahi.

Left photo: Pirihira Bolt harvesting from the mara kai.

Right photo: Puna Primary tamariki, designing sustainable shopping bags as part of term 4s unit on environmental education

Above photo: Hineira Wineera with her lettuce from the mara kai.

Right photo: Puna Matauranga t- shirts designed by the IT rangatahi. Symbolising the importance of both western knowledge and matauranga Maori in our pursuit to succeed

16 Te Reo o te Kainga - Increasing the use of te reo Māori in the homes of whānau is the key priority of TROTK. This initiative is in its second year with 2018 registering 20 whānau, comprising of 76 participants. Complementing this programme are immersion sessions on marae, yet to be held. Programme finishes in June 2019, and data will be collected to track further learning of reo and increase of reo in the home.

T E R E O T R O T K AT T E N D A NC E - O T E J UY - O CO TB E R 2 0 1 8 K A I N G A - W H Ā N A Launch In-Home Wānanga

UGR O U P S

E N R O L L E D

18 14

10 9

20 J U L AU G S E P O CT

Kaitiaki o te Taiao - KOTT provided an opportunity to develop kaitaikitanga for 15 rangatahi across years 7-13. The programme was developed as an iwi lead place-based approach to learning and teaching, that combines western science with mātauranga Māori. The focus of KOTT is to support Māori students to continue in the sciences in and outside of secondary education.

The aim is to expose our rangatahi to possible career pathways and understand the value of mātauranga in mainstream working environments across the feild of science. The Department of Conversation provided funding for the 1st and 2nd round of this programme and will be funding again in 2019.

K A I T I A K I O T E T A I A O KOTT - Distribution of content July-August 2018

13% 25% 12%

25% 25%

Mahinga Kai Rongoa Maramataka Ra whakangahou Iwi history

Scuba diving at Mana Island with MountainstoSea. Graduation day.

Raranga with Aunty Gina Solomon – Mahinga kai unit.

17 He Hononga Māoritanga - In 2018 TPMOT developed and piloted He Hononga Māoritanga. The aim of HHM was to reconnect tauira to who they are as Māori through providing learning and experience across 4 themes. The delivery was place-based and students particpated over a 6 week block, 3 hrs weekly. On completion, students presented their work and learnings to teaching staff at their college. Puna staff continue to work alongside students to support each

H E HHM - Distribution of content H O N O N G A M Ā O R I T A N Term 2, 2018 G A

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Pepehā Tikanga Marae Purakau Te Tiriti o Waitangi

student and whānau to achieve their educational goals.

Looking forward - With 2018 coming to a close, Te Puna Mātauranga wishes to mihi all those who have contributed to another successful year for education. We appreciate the ongoing support of Te Runanga o Toarangatira and all our whānau who have attended with their tamariki and rangatahi over the year.

We are looking forward to continued engagement in 2019 and hope to expand our reach to develop a solid tertiary support programme for our rangatahi.

The Puna Mātauranga team.

DISABILITY SERVICE The Disability Residential Service at 17 Arawhata Street has a 3 bedroom home and a 2 bedroom cottage on site. We are able to provide residential care for a maximum of 5 people and there are currently 4 people in our service with the passing of John Stevens in August 2018. We are currently in the process of transitioning a 20 year old male with an intellectual disability into the service.

An Outcome focused Developmental Evaluation of TROTR Disability Service for MOH was held 1 March 2018 - Requirements and recommendations for the Review included:

• Timeframes for review dates to be included in personal goals - completed; • Information held in medication folders to include medication charts, PRN protocols and side effect information – completed; • Reconciliation of personal accounts – external reconciliation of personal accounts to be carried out annually.

We have been able to increase our pool of casual workers at the Disability Service with the addition of three casual workers from year 2 Bachelor of Nursing Maori at Whitireia Polytechnic. John Stevens and Michelle Cosgrove, service users who have been with our service since opening in 1996, have been experiencing ongoing health problems and sadly John was admitted to Wellington hospital 16 August and passed away from aspiration pneumonia on Monday 20 August. We continue to monitor Michelle’s health issues.

18 ORA TOA MAURIORA

Ora Toa Mauriora staff have provided services to whānau and community with a range of needs for support with primary mental health and addictions. Over the past year there has been 320 referrals in to Ora Toa Mauriora for mental health and addiction alone. In comparison to the previous year referrals for mental health support, there was an extra 50 referrals into the service. The demand for alcohol and other drugs (AoD) support reduced slightly. Referrals for females accessing AoD support continue to be half of that for males, with problems with alcohol consumption being most referrals, then methamphetamine addiction. Referrals are received from a variety of referrers. Internally from our other Runanga services, other non-government and community organisations, community probation services, police and social workers. There has been an increase in support for clients with multiple addictions, including alcohol and drugs with problem gambling.

Mental Health - For a while there has been a long waitlist to see our clinical psychologist Clive Banks. With the increase of referrals for mental health support there was a definite need to provide more psychologist support. Richard Sawrey another experienced psychologist was contracted to work as a .5FTE (1 day) a week. Richard is also employed as a lecturer with Weltech for the Bachelor of Addiction Studies programme. Over a few months Richard has helped to decrease the waitlist to see a psychologist in Porirua, from 10 months to 3-6 months. Most of the mental health referrals still come from our Ora Toa GP practices with issues like anxiety and depression and other co-existing addiction problems. Andrea Wineera has supported Clive Banks and Richard Sawrey in her role as a mobile mental health nurse, triaging all referrals into the service for support. Over the past few months Andrea has had clinics in Ora Toa medical centres, making the service more visible and accessible for whānau. The mental health service was part of the Ora Toa Primary Health Organisation TAS audit. Processes have been put in place to ensure that services continue to meet compliance requirements. Ora Toa Mauriora helped to organise a workshop at Maraeroa Marae that was developed and facilitated by Dr Diana Rangihuna, her husband Mark Kopua and a group from Tairāwhiti. The workshop content was “Mahi a Atua” that is an approach which draws from Māori creation stories to explore culturally relevant ways of assessing and treating mental health problems. This kaupapa Mahi a Atua was also presented at the Biennial Māori Health Development Conference “Tu Kaha” and at the māori hui at the start of the National Addiction Conference “Cutting Edge”.

Addictions - Janet Matehe was employed last year as a new alcohol and other drug clinician. She has come with extensive experience and knowledge and has been a great asset to the team. Her passion for continued professional development has seen her gain the Postgraduate Diploma in Advanced Topics in Cognitive Behaviour Therapy. Janet did very well in this year’s study and was chosen to receive an award to commend this. Janet provides weekly support groups for wahine needing support for addiction. Peter Mellars has completed his Graduate Diploma in Applied Addiction Studies. This tohu has validated his years of experience in the addiction field. Peter represents the Addiction Leadership Hui that are provided by Matua Raki – the National Addiction Workforce Development.

Reihana Ngatoro continues to facilitate addiction recovery groups in the Porirua community. He is committed to support whānau on their recovery journey with regular hui and camps. Reihana continues to mentor and support students completing their Bachelor of Addiction Studies at Weltech. Our service was visited by two international students. The first from Myanmar named Khambeh who is a social worker in a youth centre with an interest in drug education and awareness. She spent 6 months in New Zealand for the 2018 Myanmar Young Leaders Program, which is a Union Aid programme for those students already involved and active in programmes and initiatives in their communities. Myanmar is the second biggest drug producer in the world growing opium and heroin. It is synthesised into methamphetamine in a pill form called Yaba. In Myanmar many young people are paid in Yaba rather than dollars. The program here provides a background of how democratic structures might work and information and discussion around human rights and indigenous rights. We were also privileged to have a Navajo-Modoc student volunteer Zunneh-bah Martin spend time with our service. She grew up on a reservation learning about and dealing with cultural and environmental issues her people face. A future leader for her native American people she helped to set up an Indigenous rights network (United Natives Striving for the Protection of Indigenous Rights), promote the United Nations Declaration on the Rights of Indigenous Peoples, she was a Native Youth Ambassador and was invited by President Obama to the White House and she promotes traditional kai to indigenous youth. Staff attended the annual Cutting Edge Addictions Conference in Rotorua last month. This is New Zealand’s key addiction treatment gathering providing an excellent opportunity for the addiction sector to get together, to network, and to learn about and embrace innovative thinking and practice. The theme this year was all about connection. Clinicians working with people affected by addiction offer hope by supporting them to strengthen their connections to whānau, culture, spirituality or pro-social community activities at any stage of their recovery journey.

Family Violence Prevention - Ora Toa Mauriora is part of the Porirua Family Violence Prevention Network which was previously operating under the Governance of the Strategic Management Group. Earlier this year a new management group was formed (E Tu Porirua) involving Ora Toa Mauriora, Porirua Whanau Centre Trust, Maraeroa Marae Health Clinic, Te Roopu Awhina ki Porirua and Whare Tiaki Māori Women’s Refuge. The focus of the Management group is to re- align the previous western model of the network into a kaupapa Māori framework that supports and promotes the needs and aspirations of whanau Māori within the Porirua region. The Management Group as a collective, submitted a request for proposal by tendering for Family Violence contracts to the Department of Corrections and Ministry of Justice, which was successful. The contracts are for specialist programmes for perpetrators of violence and safety plans and safety programmes for victims of violence for both adults and for youth. They cover Kapiti, Porirua, Wellington and Upper Hutt. Our addiction staff Reihana Ngatoro and Janet Matehe attended family violence programme facilitation training with Jim Moriarty and his wife Helen Pearse-Otene, who have been delivering family violence programmes for four years at Kōkiri Marae. Ora Toa Mauriora now provide non-violence assessments and groups which have started in Upper Hutt and Wellington.

20 Family Group Conference Coordination - All our service contracts for Ora Toa Mauriora were renewed, and we received an offer from Oranga Tamariki to work in partnership to provide Family Group Conferences for tamariki. Randall Hippolite was employed as the new Family Group Conference (FGC) Coordinator, bringing his years of experience as a social worker. He is supported in his role by Grace Katene who works in a .5 FTE position as his administration support. They both have received training from Oranga Tamariki to fulfil their roles for this contract. Eventually this contract will move into providing Family Group Conferences for tamariki in Care and Protection.

Waitech Programme - The Waitech (Waka Ama Information Technology) programme is into its last school term with the third graduation for the year happening in December. Local schools that have participated include: Brandon Intermediate, Rangikura School, Windley School, Titahi Bay North School, Titahi Bay Intermediate, Paekakariki School and Kapiti College. Students learn knowledge of Ngāti Toa, kawa, tikanga, karakia, waiata, mihimihi, water safety, paddling techniques, and developing leadership potential, and education around substance abuse. Waka ama is the programme kaupapa to help provide resilience, strength, confidence, dignity, self-discipline and knowledge. This ten-week programme has three graduations throughout the year, with around 200 tamariki participating. This programme invites local schools with participants in years 6 to 12 to participate in education around substance abuse. Waitech has a new 12-seater van to transport these tamariki.

Ropata Sefesi who is a facilitator of the Waitech programme also initiated an after-school mountain biking programme. He continues to support a small group of boys, that have gone from using beginner mountain bike tracks to more advanced. These boys have also contributed to building some of the local tracks that are used by the community. Ropata also supported an Ora Toa Health Unit initiative to get staff cycling for health, by providing his mountain bikes.

21 Problem Gambling - Hinemoa Metekingi, Mere Elkington and Ashleigh Sagar are our problem gambling or gambling harm team. They continue to support individuals and whānau who are experiencing or affected by gambling harm. They have incorporated a “Sorted Whānau” financial literacy programme into their mahi, which they piloted in partnership with the Commission for Financial Literacy, Raukura Hauora o Tainui and Malatest International. help whānau with budgeting issues because of gambling harm. From this programme support groups were set up for whānau with both gambling and co-existing addiction problems. They are passionate about supporting and promoting throughout our Ngāti Toa Iwi and community. They continue to support the Kaumatua Kaunihera by catering their hui.

Mirimiri and Rongoa - Pania Solomon provides relaxing mirimiri and rongoa to whānau. Her skills and passion to help whānau in their recovery or maintenance of their wellbeing is invaluable for our service. Pania spends time collecting and preparing rongoa for different ailments, and whānau are enjoying the benefits to their health. She has organised wellbeing sessions for both staff and whānau referred into the service.

22 Youth Mentor – Tuakana Service - Referrals into this service have been for rangatahi having issues either at home or school. Our youth mentor/social worker Sam Te Kira, supports both the tamariki and their whānau, including accessing other services to help reach their goals. Jacqueline Mackay has done her 12-week placement with Sam and other staff at Ora Toa Mauriora and Kaiarahi navigators. She is in her 3rd year of her Social Work degree at Te Wananga o Aotearoa and works at the Runanga Disability home. Jacqueline continues to support Sam in his role as youth mentor for young rangatahi experiencing issues. Sam was made a “White Ribbon” Ambassador. This kaupapa promotes preventing violence against women by living and having respectful values and relationships.

Ora Toa Mauriora staff continue to build on their knowledge and experience with professional development. They attend regional and national networking and leadership hui and conferences and provide service promotion opportunities and host and facilitate training. This year we worked with staff from Ora Toa Health Unit to provide successful combined holiday programmes, with increased capacity for our tamariki to attend. We will continue to have good close working relationships and continued networking with other services and organisations, to keep providing the necessary support for whānau and community.

Ora Toa PHO Annual Report SUMMARY November 2018

Ongoing Quality Improvement Activities New Job Descriptions Data Review Policy Review 38% Health & Safety System 18,269 INCREASE in PATIENTS

Registered Patients Our registered medical centre patients have increased significantly with the purchase of the Waitangirua Medical Centre. This in turn has increased GP -Medical Centres visits by 32.2% and Nurse visits by 42.3%

73% Of all GP visits 51,369 36,713 Quintile 4-5

GP Visits Nurse Visits

IMPROVED wait times SUCCESSES to see our clinical 100% psychologists. 8- month old target: Jul-Sep period Vaccination rate for Māori babies HUB Call centre 60+ answering 94% of GROUP EDUCATION $153,000 calls within first 2 MPDS Funding Secured SESSIONS MONTHLY for 2018-2019to purchase Groups are run by the Ora Toa weeks of opening Clinical Equipment, IT Community Health teams and upgrades and a Clinical Ora Toa Mauriora and include Policy a weekly kaumatua group, Review. Diabetes and other Monthly support groups, Rangatahi SUCCESSFUL SATURDAY CLINICS programmes and the Tamariki For Tamariki Ora, CVD Screening & Cervical Screening Ora parents groups

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.

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

Te Runanga O Toa Rangatira Incorporated Group Consolidated Statement of Comprehensive Revenue and Expense For the Year Ended 30th June 2018

NOTE 2018 2017 $ $

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 5 782 173 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

TERUNANGA OTOA RANGATIRA INCORPORATED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018 28

Te Runanga O Toa Rangatira Incorporated Group Consolidated Statement of Comprehensive Revenue and Expense For the Year Ended 30th June 2018

NOTE 2018 2017 $ $

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 1,120,619 294,489 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

TERUNANGA OTOA RANGATIRA INCORPORATED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018 29

Te Runanga O Toa Rangatira Incorporated Group Consolidated Statement of Financial Position As at 30th June 2018

NOTE 2018 2017 $ $ 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 11 315,448 - 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 118,728,266 118,717,393

Total Assets 201,732,996 185,215,468

Liabilities Current Liabilities Trade and other payables 15 773,164 910,912 Deferred Income 16 - 4,855 Rent received in advance 17 707,390 254,812 Employee benefit liability 18 698,554 528,477 Income tax 11 - 15,085 Total Current Liabilities 2,179,108 1,714,141

Total liabilities 2,179,108 1,714,141

Net Assets 199,553,888 183,501,327

TERUNANGA O TOARANGATIRA INCORPORATED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018 30

Te Runanga O Toa Rangatira Incorporated Group Consolidated Statement of Financial Position As at 30th June 2018

NOTE 2018 2017 $ $

Equity Treaty & Fisheries settlement reserves 24 136,764,978 131,910,855 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 199,553,888 183,501,327

TERUNANGA O TOARANGATIRA INCORPORATED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018 31

Te Runanga O Toa Rangatira Incorporated Group Consolidated Statement of Cash Flows For the Year ended 30th June 2018

NOTE 2018 2017 $ $ 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 1,031,450 814,666 GST refunds/(payments) 171,399 277,388 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 61,779 510,000 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

TERUNANGA O TOARANGATIRA INCORPORATED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018 32

Te Runanga O Toa Rangatira Incorporated Group Consolidated Statement of Changes in Equity For the Year ended 30th June 2017 Otherspecialpurpose revenue Accumulated Revaluation reserve Revaluation settlement Treaty Land

andexpense

&Buildings

&Fisheries Intangibles

reserves reserves reserve

Group 2017 Note Total Balance as at 1 June 2016 24 131,910,855 1,186,078 11,669,174 4,774,547 24,345,819 173,886,474

Surplus for the year - - - - 8,092,323 8,092,323 Other comprehensive revenue and expense - - 294,489 1,228,042 - 1,522,531 - - 294,489 1,228,042 8,092,323 9,614,854 Transactions with owners of the controlling entity in their capacity as owners

33 Contributions ------Distributions ------Transfers - special purpose reserve - - - 170,181 170,181 - Transfers - disposal of revalued land and buildings - - - 1,370,000 - 1,370,000 - Total transactions with owners of the entity - - - 1,370,000 - 170,181 1,540,181 - Balance at 30 June 2017 24 131,910,855 1,186,078 10,593,663 5,832,408 33,978,323 183,501,328

TERUNANGA O TOARANGATIRA INCORPORATED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018

Te Runanga O Toa Rangatira Incorporated Group Consolidated Statement of Changes in Equity For the Year ended 30th June 2018 Otherspecialpurpose Accumulated revenue Accumulated

Revaluation Revaluation reserve settlement

Treaty Land andexpense

&Buildings

&Fisheries Intangibles

reserves reserves reserve

Group 2018 Note Total Balance as at 1 July 2017 24 131,910,855 1,186,078 10,593,663 5,832,408 33,978,323 183,501,328

Surplus for the year - - - - 14,931,941 14,931,941 Other comprehensive revenue and expense - - 1,120,619 - - 1,120,619 - - 1,120,619 - 14,931,941 16,052,560 Transactions with owners of the controlling entity in their capacity as owners Contributions ------

34 Distributions ------Transfers - historical and fisheries redress 4,854,122 - - - (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 2018 24 136,764,978 1,186,078 7,799,282 5,832,408 47,971,142 199,553,888

TERUNANGA O TOARANGATIRA INCORPORATED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018

Te Runanga O Toa Rangatira Incorporated Group Notes to the Financial Statements For the Year ended 30th June 2018 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 CC42382.

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 2018. 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.

TERUNANGA OTOA RANGATIRA INCORPORATED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018

Te Runanga O Toa Rangatira Incorporated Group Notes to the Financial Statements For the Year ended 30th June 2018 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 theyear. 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 ass ets, 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.

(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 (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: • 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 2017.

3. 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.

Thesignificantaccounting policies usedin the preparation of thesefinancial statements aresummarised below and are contained within the following Notes to the Financial Statements: 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

TERUNANGA OTOA RANGATIRA INCORPORATED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018

Te Runanga O Toa Rangatira Incorporated Group Notes to the Financial Statements For the Year ended 30th June 2018 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.

The Groupfinancial reportsinclude thefollowing controlled entities andthe relationship tothe controlling entity;

Subsidiary Name Country of Share capital (number of shares) Investment at cost Incorporation 2018 2017 2018 2017 Toa Rangatira Trust New Zealand 10 10 10 10 Ika Toa Limited New Zealand 20,100 20,100 20,100 20,100 Ngati Toa Limited New Zealand 100 100 100 100 Kapiti Tours Limited New Zealand 100 100 100 100 Ora Toa PHO Limited New Zealand 1 1 1 1 Toa Rangatira Group Holdings Limited New Zealand Trustee group 1 1 1 1 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.

TERUNANGA OTOA RANGATIRA INCORPORATED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018

Te Runanga O Toa Rangatira Incorporated Group Notes to the Financial Statements For the Year ended 30th June 2018 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 valu e 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.

TERUNANGA OTOA RANGATIRA INCORPORATED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018

Te Runanga O Toa Rangatira Incorporated Group Notes to the Financial Statements For the Year ended 30th June 2018

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 2018 2017 $ $ Revenue from exchange transactions Trading revenue Services rendered Holiday park revenue 483,613 472,266 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 766,988 734,952 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:

2018 2017 $ $ 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 782 - Local and Regional council grants 30,000 - Sundry Income 658,200 592,787 Other Income from exchange transactions 4,046,965 3,280,444

TERUNANGA OTOA RANGATIRA INCORPORATED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018

Te Runanga O Toa Rangatira Incorporated Group

Notes to the Financial Statements

For the Year ended 30th June 2018 (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:

2018 2017 $ $ Interest Income Interest from trading, at call and term investments 1,189,904 803,174 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 non- exchange 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

TERUNANGA OTOA RANGATIRA INCORPORATED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018

Te Runanga O Toa Rangatira Incorporated Group Notes to the Financial Statements For the Year ended 30th June 2018

(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

2018 2017 $ $ 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:

2018 2017 $ $ Other revenue from non-exchange transactions Local and Regional Council grants 271,506 252,157 Other revenue from non-exchange transactions 271,506 252,157

6. 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: 2018 2017 $ $ 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 th 208,939 190,103 Total Payroll expense 8,535,045 7,797,270

TERUNANGA OTOA RANGATIRA INCORPORATED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018

Te Runanga O Toa Rangatira Incorporated Group Notes to the Financial Statements For the Year ended 30th June 2018

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.

2018 2017 $ $ 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 0.00-3.00% 0.00-3.00% Call deposits 3.22-3.95% 3.22-3.95%

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 orlong term investments held by the Group. Interest rates vary on the deposits between 3.22% - 3.95% 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.

2018 2017 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 3,006,322 982,394 Other receivables Accrued Interest receivable 886,225 1,585,447 Short term wage advances 3,276 4,157 GST receivable (non exchange) 67,883 143,268 Total Trade and other receivables 3,963,706 2,715,266

TERUNANGA OTOA RANGATIRA INCORPORATED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018

Te Runanga O Toa Rangatira Incorporated Group Notes to the Financial Statements For the Year ended 30th June 2018 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.

2018 2017 $ $ Balance 1 July 187,802 111,223 Write off of bad debts - - Impairment losses this year 8,086 76,579 Balance at 30 June 195,888 187,802

10. 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 ass et has not yet been completed or commissioned but for where there is a construction contract in place. Prepayments and other assets include: 2018 2017 $ $ 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 29,280

11. 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 reportingdate.

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.

TERUNANGA OTOA RANGATIRA INCORPORATED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018

Te Runanga O Toa Rangatira Incorporated Group Notes to the Financial Statements For the Year ended 30th June 2018

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 agai nst 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.

2018 2017 $ $ 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 434,803 995,101 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 15,085 289,320

Plus current income tax expense 573,974 984,347 Less over provision in previous year (42,673) (9,384) Current income tax expense 531,301 974,963

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 38,002 232,587 Current Tax payable (315,448) 15,085

12. Property, Plant and Equipment a. Recognition and measurement

Items of property plant and equipment are 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. Heritage assets with no future economic benefit or service potential other than their heritage value are not recognised in the statement of financial position.

TERUNANGA OTOA RANGATIRA INCORPORATED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018

Te Runanga O Toa Rangatira Incorporated Group Notes to the Financial Statements For the Year ended 30th June 2018 Items of property, plant and equipment are subsequently measured either under the: (i). Cost model Cost (or fair value for items acquired through non-exchange transactions) less accumulated depreciation and impairment. (ii). 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 self- constructed 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 anitem 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.

TERUNANGA OTOA RANGATIRA INCORPORATED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018

Te Runanga O Toa Rangatira Incorporated Group Notes to the Financial Statements

For the Year ended 30th June 2018 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 thatis 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 10-50 years 10-50 years Plant, Office, MPD and 3-5 years 3-5 years Computer Equipment Motor Vehicles, Watercraft, 5 - 100 years 5 - 100 years Tractors and Trailers Fixtures and Fittings 3 - 25 years 3 - 25 years Computer Equipment 3-5 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 2018 2017 $ $ 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 - -

TERUNANGA OTOA RANGATIRA INCORPORATED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018

Te Runanga O Toa Rangatira Incorporated Group Notes to the Financial Statements For the Year ended 30th June 2018

Motor Vehicles,

Plant, Office Watercraft, Land, Buildings, Equipment, and Fixtures and Trailers and Work in Progress Marine Farm Computers Fittings Tractors Assets TOTAL

Group 2018 $ $ $ $ $ $ Cost Balance 1 July 2017 17,149,510 2,595,840 774,221 1,213,688 - 21,733,259 Additions - exchange 622,115 149,421 4,324 30,865 36,264 842,990 Additions - non- exchange ------Revaluation movements ------WIP capitalised ------Disposals (4,000) (435,775) (196,773) (83,561) - (720,109) Balance 30 June 2018 17,767,625 2,309,486 581,772 1,160,992 36,264 21,856,140

Accumulated depreciation and impairment 47 Balance 1 July 2017 559,322 2,117,499 606,045 989,339 - 4,272,205 Current year depreciation 299,592 208,026 8,827 75,467 - 591,912 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 2018 854,914 1,934,112 429,123 976,444 - 4,194,593

Carrying amount 30 June 2018 16,912,711 375,374 152,649 184,548 36,264 17,661,547

TERUNANGA O TOARANGATIRA INCORPORATED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018

Te Runanga O Toa Rangatira Incorporated Group Notes to the Financial Statements For the Year ended 30th June 2018

Motor Vehicles,

Plant, Office Watercraft, Land, Buildings, Equipment, and Fixtures and Trailers and Work in Progress Marine Farm Computers Fittings Tractors Assets TOTAL Group 2017 $ $ $ $ $ $ Cost Balance 1 July 2016 12,718,473 2,164,524 768,471 1,223,249 875,080 17,749,797 Additions - exchange 3,072,262 431,316 5,750 16,173 - 3,525,501 Additions - non- exchange ------Revaluation movements 1,228,042 - - - - 1,228,042 WIP capitalised 875,080 - - - (875,080) - Disposals (744,347) - - (25,734) - (770,081) Balance 30 June 2017 17,149,510 2,595,840 774,221 1,213,688 - 21,733,259

Accumulated depreciation and impairment Balance 1 July 2016 545,226 1,915,055 592,385 934,059 - 3,986,725 48 Current year depreciation 249,987 202,444 13,660 81,014 - 547,105 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 2017 559,322 2,117,499 606,045 989,339 - 4,272,205

Carrying amount 30 June 2017 16,590,188 478,341 168,176 224,349 - 17,461,054

TERUNANGA O TOARANGATIRA INCORPORATED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018

Te Runanga O Toa Rangatira Incorporated Group Notes to the Financial Statements For the Year ended 30th June 2018

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 2017.

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.

TERUNANGA OTOA RANGATIRA INCORPORATED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018

Te Runanga O Toa Rangatira Incorporated Group Notes to the Financial Statements For the Year ended 30th June 2018 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: 2018 2017 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 2,402,926 728,225 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 2014. 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 2010. 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.

TERUNANGA OTOA RANGATIRA INCORPORATED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018

Te Runanga O Toa Rangatira Incorporated Group Notes to the Financial Statements For the Year ended 30th June 2018

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. 2018 2017 $ $ Aotearoa Fisheries Limited 2,366,678 2,366,678 Deemed cost at 30 June 2,366,678 2,366,678

15. Trade and other payables 2018 2017 $ $ Trade payables from exchange transactions 332,790 229,684 Sundry accruals 274,739 515,745 GST payable 165,635 165,483 Total trade and other payables 773,164 910,912

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.

TERUNANGA OTOA RANGATIRA INCORPORATED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018

Te Runanga O Toa Rangatira Incorporated Group Notes to the Financial Statements For the Year ended 30th June 2018 18. Employee Entitlements a. Short term employee benefits Short-term employee benefit liabilities are recognised when the Group has a legal or constructive obligation to remunerate employees for services provided within 12 months of reporting date, and are measured on an undiscounted basis and expensed in the period in which employment services are provided.

These mainly consist of accrued holiday entitlements at the reporting date.

2018 2017 $ $ Current Short-term employee entitlements 597,844 528,477 Taxes payable 100,710 - Total employee entitlements 698,554 528,477

No long term obligations exist at 30 June 2018.

19. Financial instruments The Group initially recognises financial instruments when the Group becomes a party to the contractual provisions of the instrument.

The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in transferred financial assets that is created or retained by the Group is recognised as a separate asset or liability. The Group derecognises a financial liability when its contractual obligations are discharged, cancelled or expire.

The Group also derecognises financial assets andfinancial liabilities when therehave beensignificantchanges to the terms and/or the amount of the contractual payments to be received and or paid.

Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when the Group has a legal right to offset the amount and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

The Group classifies the financial assets into the following categories: fair value through surplus or deficit, held-to-maturity, loans and receivables and available for sale.

The Group classifies financial liabilities into the following categories: fair value through surplus or deficit, and amortised cost.

TERUNANGA OTOA RANGATIRA INCORPORATED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018

Te Runanga O Toa Rangatira Incorporated Group Notes to the Financial Statements For the Year ended 30th June 2018 a. Loans and Receivables Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market.

Loans and receivables are subsequently measured at amortised cost using the effective interest method, less any impairment losses.

Loans and receivables comprise: The Group’s cash and cash equivalents, trade and other receivables.

Cash and cash equivalents, short term deposits and long term deposits represent highly liquid investments that are readily convertible to a known amount of cash with an insignificant amount of risk of changes in value, with maturities of 90 days or less. b. Available-For-Sale Financial Assets

Available-for-sale financial assets are non-derivative financial assets that are either designated to this category or do not qualify for inclusion in any of the other categories of financial assets.

Available-for-sale financial assets include: • Aotearoa Fisheries Limited Income shares

Equity investments are shares in Aotearoa Fisheries Limited (AFL) and are measured at cost less any impairment charges, as they do not have a quoted market price and their value cannot be reliably measured.

All other available-for-sale financial assets are measured at fair value. Gains and losses are recognised in other comprehensive income and expense and are reported within the "available-for-sale reserve" within equity, less and impairment expense.

Changes in impairment provisions attributable to application of the effective interest method are reflected as a component of interest income. If, in a subsequent period, the fair value of an impaired available -for- sale debt security increases and the increase can be related objectively to an event occurring after the impairment loss was recognised, then the impairment loss is reversed, with the amount of the reversal recognised in surplus or deficit. However, any subsequent recovery in the fair value of an impaired available-for-sale equity security is recognised in other comprehensive revenue and expense.

TERUNANGA OTOA RANGATIRA INCORPORATED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018

Te Runanga O Toa Rangatira Incorporated Group Notes to the Financial Statements For the Year ended 30th June 2018 c. Amortised cost financial liabilities Financial liabilities classified as amortised cost are non-derivative financial liabilities that are not classified as fair value through surplus or deficit financial liabilities.

Financial liabilities classified as amortised cost are subsequently measured at amortised cost using the effective interest method.

Financial liabilities classified as amortised costinclude cash and cash equivalents (bank overdrafts), trade and other payables. d. Impairment of non-derivative financial assets

A financial asset not subsequently measured at fair value through surplus or deficit is assessed at each reporting date to determine whether there is objective evidence that it is impaired. A financial asset is impaired if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset, and that the loss event(s) had an impact on the estimated future cash flows of that asset that can be estimated reliably.

Objective evidence that financial assets are impaired includes default or delinquency by a counterparty, restructuring of an amount due to the Group on terms that the Group would not consider otherwise, indications that a counterparty or issuer will enter bankruptcy, adverse changes in the payment status of borrowers or issuers in the Group, economic conditions that correlate with defaults or the disappearance of an active market for a security. In addition, for an equity security classified as an available-for-sale financial asset, a significant or prolonged decline in its fair value below its cost is objective evidence of impairment.

e. Financial assets classified as held-to-maturity and loans and receivables

The Group considers evidence of impairment for financial assets measured at amortised cost (loans and receivables and held-to-maturity) at both a specific asset and collective level.

All individually significant assets are assessed for specific impairment. Those found not to be specifically impaired are then collectively assessed for any impairment that has been incurred but not yet identified.

Assets that are not individually significant are collectively assessed for impairment by grouping together assets with similar risk characteristics.

In assessing collective impairment the Group uses historical trends of the probability of default, the timing of recoveries and the amount of loss incurred, adjusted for management's judgement as to whether current economic and credit conditions are such that the actual losses are likely to be greater or less than suggested by historical trends.

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the asset's original effective interest rate. Losses are recognised in surplus or deficit and reflected in an allowance account against loans and receivables or held-to-maturity. Interest on the impaired asset continues to be recognised.

When an event occurring after the impairment was recognised causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through surplus or deficit.

TERUNANGA OTOA RANGATIRA INCORPORATED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018

Te Runanga O Toa Rangatira Incorporated Group Notes to the Financial Statements For the Year ended 30th June 2018 f. Fair Value through Surplus or Deficit A financial instrument is classified as fair value through surplus or deficit if it is: Held for trading: Derivatives where hedge accounting is not applied

Designated at initial recognition: If the Group manages such investments and makes purchase and sale decisions based on their fair value in accordance with the Group's documented risk management or investment strategy. Those fair value through surplus or deficit instruments sub-classified as held-for-trading comprise the ANZ Managed Funds. Financial instruments classified as fair value through surplus or deficit are subsequently measured at fair value with gains or losses being recognised in surplus or deficit.

The table below shows the carrying amount of the Group’s financial assets and liabilities:

Carrying value of Financial Instruments $

Financial Assets Financial Liabilities TOTAL

Fair Value Loans and through Liabilities (at Group 2018 NOTE Available for sale amortised cost) receivables surplus & deficit

Subsequentlymeasuredatfairvalu e

Aotearoa Fisheries Limited shares 14. - 2,366,678 - 2,366,678 -

Not subsequently measured at fair value Cash and cash equivalents 7. 10,186,064 - - 10,186,064 Short term deposits 8. 68,497,394 - - 68,497,394 Managed funds - 22,953,237 - 22,953,237 Receivables 9. 3,202,210 - - 3,202,210 Payables 15. - - (332,790) (332,790) 81,885,668 22,953,237 2,366,678 (332,790) 106,872,794

Carrying value of Financial Instruments $

Financial Assets Financial Liabilities TOTAL Fair Value Loans and through Liabilities (at Group 2017 NOTE Available for sale receivables surplus & amortised cost) deficit Subsequentlymeasuredatfairvalu e Aotearoa Fisheries Limited shares 14. - - 2,366,678 - 2,366,678

Not subsequently measured at fair value Cash and cash equivalents 7. 11,067,320 - - - 11,067,320 Short term deposits 8. 52,686,209 - - - 52,686,209 Long term deposits 8. 6,943,688 - - - 6,943,688 Managed funds - 21,322,329 - 21,322,329 Receivables 9. 1,170,196 - - - 1,170,196 Payables 15. - - - (229,684) (229,684) 71,867,413 21,322,329 2,366,678 (229,684) 95,326,736

TERUNANGA OTOA RANGATIRA INCORPORATED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018

Te Runanga O Toa Rangatira Incorporated Group Notes to the Financial Statements For the Year ended 30th June 2018 20. Intangible assets a. Recognition and measurement Intangible assets are initially measured at cost except for: • Intangible assets acquired through non-exchange transactions (measured at fair value) • Heritage assets • NZ Forestry Emission Units • Quota Share • Websites Heritage assets with no future economic benefit or service potential other that their heritage value are not recognised on the Consolidated Statement of Financial Position. b. Subsequent expenditure

Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is recognised in surplus or deficit. c. Amortisation

Amortising is recognised in surplus and deficit on a straight line basis over the estimated useful life of each amortisable intangible asset. The estimated useful lives of each amortisable intangible asset are:

• Website 5 Years (2017: 5 years) • Goodwill 10 Years The Group holds land that is classified as heritage as the land comprises sites that are either held as reserves, memorial sites or Urupa. The Group’s finite-life intangible assets comprise: A website and Goodwill

2018 2017 Website Design Cost $ $ Gross carrying amount Balance 1 July 52,138 42,138 Additions - website development - 10,000 Balance 30 June 52,138 52,138

Amortisation and impairment Balance 1 July (42,138) (42,138) Amortisation (1,992) - Balance 30 June (44,130) (42,138) Carrying amount 30 June 8,008 10,000

TERUNANGA OTOA RANGATIRA INCORPORATED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018

Te Runanga O Toa Rangatira Incorporated Group Notes to the Financial Statements For the Year ended 30th June 2018

2018 2017 Goodwill - Waitangirua Medical Centre $ $ Balance 1 July - - Additions - purchases 480,000 - Balance at 30 June 480,000 -

Impairments Impairment losses (32,000) - Balance 30 June (32,000) - Carrying amount 30 June 448,000 -

2018 2017 NZ Forestry Emissions Units $ $ Balance 1 July 7,718,448 9,795,134 Gain on sale of units 426,000 - Fair value gain on units at reporting date 580,102 - 8,724,550 9,795,134 Impairments Loss on revaluation - (291,686) Disposals (5,586,000) (1,785,000) Fair value 30 June 3,138,550 7,718,448

In October 2017, the parent purchased the systems and processes of Waitangirua Medical Centre for $480,000. This included access to the patient database, and continuing with essentially the same doctors and staff. No shares were acquired.

The New Zealand Emissions Trading Scheme (ETS) is the system in which New Zealand Units (NZUs) are traded. Under the ETS, certain sectors are required to acquire and surrender NZUs or other eligible emission units to account for their direct greenhouse gas emissions or emissions associated with their products.

The allocation attached to the forestry lands purchased by the Trustee of the Toa Rangatira Trust, was allocated as part of a compensation package for those forests that were planted pre-1990. The NZ Emissions Units received into the Trust are pre-1990 emission trading units.

The NZ Emissions Units transferred on 29 August 2014, 548,744 units were transferred to the Toa Rangatira Trust along with the Crown Forestry Licenced rentals. The NZ Emissions Units were initially recognised in the Consolidated Statement of Comprehensive Income at the rate per unit as listed on the Carbon Forest Services site at 29 August 2014. This value was the deemed cost. The NZU’s have been subsequently revalued at each balance date to determine whether there has been any impairment also using the prevailing rate listed for the NZU’s, with the revaluation gain going through Other Comprehensive Income. The Board resolved to sell down units during 2018 (2017:100,000 units). The income from the sale is included in Other Revenue and Expense in the Statemen t of Comprehensive Revenue and Expense, and the previous fair value gain on valuation has been reversed.

TERUNANGA OTOA RANGATIRA INCORPORATED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018

Te Runanga O Toa Rangatira Incorporated Group

Notes to the Financial Statements

For the Year ended 30th June 2018

As part of receiving the Golden Downs East, Golden Downs West and Queen Charlotte forest land on settlement, 548,747 pre-1990 NZ Units werereceived. The Trustees expectthatthecurrentlicensors will continue to replant and keep these areas forested for the term of the licences (31+ years ). The Trustees do not consider the landsuitable for a purpose other than forestry. In the event that areas of land are handed back in accordance with the Crown licence term during or at the end of the term, the trustees expectation is that the land would either be replanted or that native bush would be allowed to regenerate. In the event that the land is handed back, is not replanted, and that native bush has not regenerated to the correct density within ten years of the land hand back, then a liability may be incurred. This potential liability is not recognised in the financial statements.

d. Quota Share

Quota shares are treated as an intangible asset. Quota Shares that are purchased at cost are recognised initially at cost and subsequently at fair value. Fair value is determined as the latest valuation less any impairment cost.

Quota received as a non-exchange transaction (Settlement quota) is measured initially at a deemed cost which is determined using the values placed on the quota as per the documentation received with the settlement quota.

Valuations are undertaken on a regular basis to ensure the carrying amount does not differ materially from the fair value of the shares.

Quota shares 2018 2017 $ $ Opening Balance 1 July 8,257,346 7,671,171 Gain in fair value 540,517 586,175 Fair value at 30 June 8,797,863 8,257,346

A valuation was obtained by Quota Brokers Aotearoa as at 30 June 2017 for the quota share. The valuation records an increase of $586,175 at balance date. The increase in value has been recorded as a gain in the Consolidated Statement of Comprehensive Revenue and Expense. A Directors valuation was completed as at 30 June 2018 for the quota shares held. The increase in value of $540,517 has been recorded as a gain in the Consolidated Statement of Comprehensive Revenue and Expense. The valuation is based on recent market prices available.

TERUNANGA OTOA RANGATIRA INCORPORATED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018

Te Runanga O Toa Rangatira Incorporated Group Notes to the Financial Statements For the Year ended 30th June 2018 21. Investment in Joint Venture a. Jointly controlled entities

The Group holds joint control over the following jointly controlled entity, which is accounted for using equity method.

The Whenua Toa Trust was setup in October 2016 as the limited partner in the Kenepuru Partnership Limited joint venture. The Whenua Toa Trust is a 50% shareholder in the joint venture.

2018 2017 $ $ Share of net assets of Kenepuru Partnership Limited Joint Venture 10,135,493 8,570,752 Share of net assets of joint venture at 30 June 10,135,493 8,570,752

2018 2017 $ $ Share of loss in joint venture 49,257 31,610 Total share of loss in joint venture 49,257 31,610 b. Commitments from interest in joint ventures The Group has committed to contributing capital of$11,500,000. Of this, $11,252,360 has already been committed for the year ended 30 June 2018 (2017: $8,977,360).

22. Impairment of non-financial assets The carrying amount of the Group’s non-financial assets, other than investment property, are reviewed at reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated.

Indefinite life intangible assets and intangible assets not yet available for use are tested annually for impai rment. An impairment loss is recognised if the carrying amount of the asset or its cash generating unit (CGU) exceeds its estimated recoverable amount.

The recoverable amount of the asset or CGU is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated cash flows (for cash generating units) or future remaining service potential (for non-cash generating units) are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU.

Cash generating assets and non-cash generating assets are distinguished by the smallest identifiable unit that is used to generate a cash inflow from continuing use that are largely independent of the cash inflows from other assets or groups of assets.

TERUNANGA OTOA RANGATIRA INCORPORATED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018

Te Runanga O Toa Rangatira Incorporated Group Notes to the Financial Statements For the Year ended 30th June 2018 23. Leases (as lessor and lessee)

Leases where the Group assume substantially all the risks and rewards incidental to ownership of the leased asset are classified as finance leases. All other leases are classified as operating leases.

Subsequent to initial recognition (at cost) the asset is accounted for in accordance with the accounting policy applicable to the asset. a. Lease payments as lessee

Payments made under an operating lease are recognised in surplus and deficit on a straight line basis over the term of the lease. Lease incentives received are recognised as an integral part of the total lease and are expensed over the lease term. Associated costs such as maintenance and insurances are expensed as incurred.

Depreciation on theleased asset is expensed in a manner that is consistent with the accounting policy disclosed at Note 12 Property, plant and equipment. 2018 2017 Current rental payments commitments as Lessee $ $ Within one year 132,489 57,093 Between one and five years 26,728 52,305 More than five years - - Total operating lease rentals payable 159,217 109,398

The Group leases the land that houses the Waka Ama equipment. The lease runs for 36 months and commenced April 2016. The leases that are currently in place for the Group are summarised below. The following operating leases are in place at Balance date. Per Annum Amount Organisation Rental Term Expiry $ Sietec Communication UFB Line Management 60 Months June 2019 18,000 Sietec Wholesale Wider Area Network 60 Months June 2019 39,060 Waitangirua Medical Centre Medical Practice Building 24 Months October 2020 6,682 Porirua City Council Shelter 36 Months April 2019 4,800 b. Rental lease revenue as lessor Rental lease revenue received under operating leases is recognised on a straight line basis over the term of the lease. This excludes receipts from reimbursements for services which are recognised when the customer has received an invoice for the service.

Costs incurred in earning the rental lease revenue are recognised as an expense as they are incurred. c. Current Rental revenue as lessor The parent purchased the building in Rugby Street, Wellington in 2009 and is utilising the property for its Wellington based medical and health services. The property currently has multiple tenancies who lease remaining units under operating leases.

The leases terms vary between two to three years.

TERUNANGA OTOA RANGATIRA INCORPORATED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018

Te Runanga O Toa Rangatira Incorporated Group Notes to the Financial Statements For the Year ended 30th June 2018

The Rugby Street property is included in 'Land, buildings and marine farm' and is depreciated over the estimated useful life of the asset as determined by the Board for that class of asset. Any expense that relates to the revenue is expensed in the period it is incurred and is included in Administrative costs as shown in the Consolidated Statement of Comprehensive Revenue and Expense. The rental income is recognised on a straight line basis over the term of the lease.

The Toa Rangatira Investment Company manages the rental income of the Forestry lands that were purchased from the Crown on 1 August 2014. The current Crown Forestry Licence has a termination date of 30 years. The licence fees are reviewed every 3 years (periodic review) and the methodology can be reviewed every 9 years (general review).

The minimum future lease receivable expected over the next five years is shown below:

2018 2017 $ $ Within one year 2,642,246 2,554,340 Between one and five years 10,297,982 10,106,703 More than five years 55,938,769 57,057,176 Total minimum future lease receivable 68,878,997 69,718,219

24. Reserves a. Treaty and Fisheries Redress Reserve

Cash funds and other assets (land, buildings, quota share etc.) received from the Treaty of Waitangi Claims areinitially recorded through the Consolidated Statement of Comprehensive Revenue and Expense and are then transferred to the Treaty and Fisheries Redress Reserve. An additional reserve representing an historical disagreement within Iwi, which has now been settled, is included in the other special purpose reserve. These funds areseparately distinguished reserves so as to retain the core amounts received under settlement.

2018 2017 Treaty and Fisheries Redress Reserve $ $ Opening balance 131,910,855 131,910,855 Movements this year 4,854,122 - Closing balance 136,764,977 131,910,855 b. Other Reserves (i). Revaluation reserve – intangible assets This reserve records the increases or decreases in Quota Holdings (Fish species) only to the extent that they offset each other. This reserve also records the increases or decreases in the fair value of the NZ Emissions Units. The reserve cannot fall into deficit.

2018 2017 Revaluation reserve - intangibles $ $ Opening balance 10,593,663 11,669,174 Movements this year (2,794,381) (1,075,511) Closing balance 7,799,282 10,593,663

TERUNANGA OTOA RANGATIRA INCORPORATED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018

Te Runanga O Toa Rangatira Incorporated Group Notes to the Financial Statements For the Year ended 30th June 2018

(ii). Revaluation reserve - land and buildings This reserve records the increases and decreases in the fair value of land and buildings only to the extent that they offset each other. Land and buildings are revalued on a five yearly basis or where there is an indication that the carrying amount may be materially different. 2018 2017 Revaluation reserve - land and buildings $ $ Opening balance 5,832,408 4,774,547 Movements this year - 1,057,861 Closing balance 5,832,408 5,832,408

(iii). Other special purpose reserve

The otherspecial purpose reserve represents the funds from the historical Iwi dispute, transferred across from Ika Toa Limited to Te Runanga o Toa Rangatira Inc. The funds have been held separately to retain the identity.

2018 2017 Other special purpose reserve $ $ Opening balance 1,186,078 1,186,078 Movements this year - - Closing balance 1,186,078 1,186,078

Total reserves 151,582,745 149,505,354

25. Contingencies and Commitments a. Contingent Assets There were no known contingent assets as at 30 June 2018. b. Contingent Liabilities There were no known contingent liabilities as at 30 June 2018. c. Commitments Other than commitments in the ordinary course of business there are no commitments at balance date. All major projects that were in progress at 30 June are now completed.

There is a commitment for the replacement of 19 motor vehicles across the Ora Toa Health units. The Board approved $285,000 in July 2018. The vehicles will be leased back to the specific contracted area.

There is a commitment for the roof replacement for 17-19 Prosser Street. The committed amount is approx. $60,000.

There is a commitment to Port Nicholson Fisheries Partnership to supply the Annual Catch Entitlement for Crayfish, and to Aotearoa Fisheries Limited to supply the Annual catch Entitlement for a number of Species including Orange Roughy, both supplies are at the applicable market value for a five year period ending in 2019.

The Whenua Toa Trust has entered into a Joint Venture agreement to develop the old Kenepuru Hospital site. The site will be developed into residential and commercial sites by a joint venture development company. The Whenua Toa Rangatira Trust has committed $11,500,000 capital to the joint venture development and will hold 50% of the shares in the development company, $9,241,310 has been paid for the year ended 30 June 2018 (2017: $8,602,362). A further loan advance has been approved to assist with ongoing development and interest is payable on the loan at 6.5% per annum. No calls were made on the additional loan as at 30 June 2018.

TERUNANGA OTOA RANGATIRA INCORPORATED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018

Te Runanga O Toa Rangatira Incorporated Group Notes to the Financial Statements For the Year ended 30th June 2018

26. Events Subsequent to Balance Date Kenepuru Developments has confirmed the final price for the sale of stage 1 Kenepuru landings. The 144 sections in stage 1(a) and 1(b) have been sold for $24,320,000.

There are two larger commercial sites under contract. One site is under contract for $3, 000,000 and the other site is under contract for $13,000,000. Both sites have specific terms and conditions of sale that need to be satisfied before they are unconditional.

The Board have agreed to place a further $30 million into managed funds with Milford Investments ($20m) and Harbour assets ($10m)

The Group entered into non-binding memorandum of understanding with the Crown on 1 November 2018. At the conclusion of the due diligence period a new entity Te Āhuru Mōwai will be established as a registered class 1 social landlord(community housingprovider) underthe Community housingregistrationauthority (CHRA). Te Āhuru Mōwai will manage approximately 900 Housing New Zealand properties on commercial terms on the western side of Porirua under a lease arrangement with a 25 year initial term. The contractual agreements once executed provide for call options, asset management and redevelopment opportunities. The tenancy management arm is expected to be operational by the end of 2019.

27. Related Parties

The consolidated financial statements include the financial statements of the ultimate controlling entity, its subsidiaries and other controlled entities, are listed below. Te Runanga o Toa Rangatira Inc. as parent consolidates the subsidiaries as it has 100% control of the financing and operations of the companies so as to obtain any and all benefits from their activities.

All investments in subsidiaries are carried at cost less accumulated impairment losses in the financial statements of the Parent and are eliminated on consolidation. • Toa Rangatira Trust is the Post Settlement Governance Entity, formed December 2012 to receive the historical settlement. • Ika Toa Limited received income from trading its Annual Catch Entitlement from the Quota Share. • Ngati Toa Limited trades as a Holiday park in Paekakariki. • Ora Toa PHO Limited is the Primary Health organisation for the Medical and Health units operated by the Parent.

• Toa Rangatira Group Holdings Limited (previously Toa Rangatira Limited) has not traded. Toa Rangatira Limited was previously a subsidiary of Te Runanga o Toa Rangatira Inc. The company name was changed on 8th July 2014 and the shareholding transferred to Toa Rangatira Trust in which Te Runanga o Toa Rangatira Inc. is a Trustee.

Whenua Toa Trust was established as the limited partner in the Kenepuru Partnership Limited. The board appointed Trustees are Ta Matu Rei, Taku Parai, and Francis Freemantle.

The subsidiaries of Toa Rangatira Group Holdings Limited are Toa Rangatira Investment Properties Limited and Toa Rangatira Developments Limited. These companies were incorporated on 8th July 2014.

In the prior year Toa Rangatira Trust loaned Whenua Toa Trust $11,621,605. This remains outstanding at balance date. Interest of $756,648 was paid in 2018 (2017: $NIL)

Any surplus and or deficit is included in, and attributed to the Parent. No Dividends were paid to the ultimate controlling entity during 2018 (2017: NIL). All entities have a 30 June balance date.

TERUNANGA OTOA RANGATIRA INCORPORATED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018

Te Runanga O Toa Rangatira Incorporated Group Notes to the Financial Statements For the Year ended 30th June 2018

Ika Toa Limited is the asset holding company for the fisheries settlement fund received under the Maori Fisheries Act 2004. The funds were received into Ika Toa Limited in March 2010. Ika Toa Limited manages the settlement assets and manages the trading of annual catch entitlement (ACE) on behalf of the organisation. A commission fee is paid to Ika Toa Limited to provide these services. The administrative arm of the organisation charges for reimbursement of administration services. The amounts received during the year were administration fees $53,700; (2017: $54,726), Audit reimbursements $13,000 (2017: $11,100), ACE lease fees of $169,146 (2017: $330,377) and interest of $NIL (2017: $NIL). Outstanding receivables owed by Ika Toa Limited as at 30 June 2018 amounted to $204,208 (2017: $384,650).

Kapiti Tours Limited provides transportation and guided tours to & from Kapiti Island. Te Runanga o Toa Rangatira provides administration services to Kapiti Tours Limited. There were no transactions between Kapiti Tours Limited and any other related companies during 2018 (2017: NIL).

Ora Toa PHO Limited is a Primary Health Organisation (PHO) and provides contract services funding to Te Runanga o Toa Rangatira Inc. health units and medical centres. The funding received from Ora Toa PHO for 2018 was $5,643,290 (2017: $5,262,869), wage and clinical advisor reimbursements $182,649 (2017 :$159,083), general support services $36,000 (2017: $30,647) and rent $10,400 (2017: $9600). Audit reimbursements for 2018 were $10,000 (2017: $10,097). Outstanding receivables owed by Ora Toa PHO Limited as at 30 June 2018 amounted to $621,131 (2017: $455,450). Outstanding payables owed to Ora Toa PHO Limited as at 30 June 2018 amounted to $NIL (2017: $NIL). Directors fees $NIL (2017:$1,700), Motor vehicle expenses $13,260 (2017:$12,240).

Ngati Toa Limited is a holiday park. Te Runanga o Toa Limited leases the holiday park buildings to Ngati Toa Limited and also provides administrative services to Ngati Toa Limited. The amounts received during the year were administration $19,946 (2017:$18,877), lease of land and buildings $54,178 (2017: $54,456) and interest $14,530 (2017: $14,558). Outstanding receivables owed by Ngati Toa Limited as at 30 June 2017 amounted to $12,377 (2017: $14,207). Loan payable to Ngati Toa Limited by Te Runanga o Toa Rangatira Inc. amount to $252,779 (2017: $252,842).

Te Runanga o Toa Rangatira Inc. has paid for Audit and Accounting costs in the the past year. The amounts were reimbursed at 30 June. Administration fees charged to the Trust for the year ended 30 June were $819,678 (2017: $790,737). Audit reimbursements for 2018 were $30,000 (2017: $37,698). Current payables owed to Te Runanga o Toa Rangatira Inc. but not yet paid amount to $254,770 (2017: $210,217), amounts outstanding and owed to the Trust by Te Runanga O Toa Rangatira Inc., amount to $26,636 (2017:$26,636) . Toa Rangatira Investment Properties Limited was not advanced any funds. (2017: $NIL).

There have been no other transactions between Te Runanga o Toa Rangatira and the trust and subsidiaries. All transactions between the parent and trust and subsidiaries as shown above have been eliminated on consolidation.

TERUNANGA OTOA RANGATIRA INCORPORATED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018

Te Runanga O Toa Rangatira Incorporated Group Notes to the Financial Statements For the Year ended 30th June 2018 a. Key Management Personnel The Group classifies its key management personnel into one of two classes: • Members of the governing body (Board members and Company Directors)

• Senior Executive Officer and Senior Management, responsible for reporting to the governing board

Members of the governing body are paid $250 for each meeting attended. The Chairperson of the Board is paid $350 for each meeting attended. A number of family members of key management personnel are employed by the Group on normal employment terms. Remuneration to close family members of key personnel is included below:

Key management personnel who 2018 2017 2018 2017 received remuneration FTE FTE $ $

Members of the Governing body 27 16 127,705 122,374 Senior Management and committees 6 9 568,450 677,365 Close family members 30 14 636,873 514,656 Key personnel remuneration 63 39 1,333,028 1,314,395

There are no loans or advances to key management personnel or close family members outstanding at June 2018. No material advances or loans have been made to key Management personnel during the year. (2017: $NIL)

No interest is received on advances and loan repayments are by way of repayment via wage deduction.

There are no subsidised Medical or Health benefits available to any staff or key personnel. Other than Employer contributions to NZ Kiwi saver there are no health, life or superannuation plans.

The Manager of the Holiday Park is the spouse of the groundsman and housing accommodation is provided as part of the contract of service. A taxable allowance is paid for accommodation on a weekly basis. (2018: $5,200 , 2017: $5,200).

A director of Ika Toa Limited is a Director and shareholder of Okiwi Bay Aquaculture Limited (OBAL). OBAL manages the Ika Toa marine farm asset. OBAL manages the conditioning of immature oysters on the company's marine farm structures and Ika Toa Limited is paid a commission based on the volume of oysters harvested. The sum of $NIL was received from OBAL for oyster harvest in 2018. Amounts for communication and other services paid to OBAL during 2018 $NIL (2017: $NIL).

Terminating benefits include any long service leave due and or payable. There are no terminating benefits or post- employment benefits paid or payable.

TERUNANGA OTOA RANGATIRA INCORPORATED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018

65 INDEPENDENT AUDITOR’S REPORT TO THE TRUSTEES OF TOA RANGATIRA TRUST GROUP

Opinion

We have audited the consolidated financial statements of Toa Rangatira Trust (“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.

Basis for Opinion

Board’s Responsibilities for the Consolidated Financial Statements

Auditor’s Responsibilities for the Audit of the 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.

Who we Report to

This report is made solely to the Parent’s Trustees, 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 Trustees, 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

68 Toa Rangatira Trust Group Consolidated Statement of Comprehensive Revenue and Expense For the Year Ended 30th June 2018

NOTE 2018 2017 $ $

Trading income 5 - 10,379,081 Direct trading expenses (686,827) (9,930,459) Surplus from trading activities (686,827) 448,622

Other income Licence fee and rental Income 5 2,588,127 2,420,295 Gain on revaluation of Investment Property 11 3,325,980 2,748,296 Gain on sale of NZ Forestry Units 19 426,000 - Other income 5 407,611 372,747 Total revenue from operations 6,060,891 5,989,960

Less operating expenses Administration expense (805,530) (764,354) Other expenses 18 (118,190) (109,130) Share of loss from joint venture 20 (49,257) (31,610) Total expenses (972,977) (905,094)

Surplus before net interest income 5,087,914 5,084,866

Gain/(loss) on revaluation of financial portfolio 5 1,874,756 1,347,940 Interest income 5 1,630,909 1,959,539 Net interest income 3,505,665 3,307,479

Surplus for the year before taxation 8,593,579 8,392,345

Tax expense 10 (515,245) (963,512)

Surplus for the year 8,078,335 7,428,833

Other comprehensive revenue and expense Gain/(loss) on revaluation of NZ forestry units 19 580,102 (291,686) Total other comprehensive revenue and expense 580,102 (291,686)

Total comprehensive revenue and expense for the year 8,658,437 7,137,147

TOA RANGATIRA TRUST FINANCIAL STATEMENTS AND ANNUAL REPORT 2018

69 70 Toa Rangatira Trust Group Consolidated Statement of Cash Flows For the Year ended 30th June 2018

NOTE 2018 2017 $ $ Cashflow from operating activities Proceeds have come from: Forestry licence fee income 2,126,216 2,393,994 Property sales and other sundry income 407,611 19,327,513 GST refunds (payments) 10,129 160,752 Income tax paid (384,913) (1,230,578) Payments made to suppliers and others (2,552,208) (17,049,809) Net cash inflow (outflow) from operating activities (393,165) 3,601,871

Cashflows from investing activities Proceeds from interest earnings 4,195,552 2,929,283 Payments (to) from investment funds in short and long term deposits (11,583,823) (15,643,054) Payments (to) from land purchases and sales (2,402,921) (728,226) Payments (to) from intangible assets purchases and sales 5,586,000 - Net cash inflow/(outflow) for investing activity (4,205,192) (13,441,997)

Net cash inflow/(outflow) from all activity (4,598,356) (9,840,128)

Cash and cash equivalents at the beginning of the year 6 7,304,319 17,144,447 Cash and cash equivalents at the end of the year 6 2,705,963 7,304,319

TOA RANGATIRA TRUST FINANCIAL STATEMENTS AND ANNUAL REPORT 2018

71 Toa Rangatira Trust Group Consolidated Statement of Changes in Equity For the Year ended 30th June 2018 NZ forestry emission unit emission NZ forestry Historical Treaty Redress Historical Accumulated revenue Trust SettlementTrust Sum and expense reserves reserve

2017 Note Total Balance as at 1 July 2016 16 10 111,591,162 7,517,846 13,566,700 132,675,718 Total comprehensive income for the year - - (291,686) 7,428,833 7,137,147 10 111,591,162 7,226,160 20,995,533 139,812,865 Transactions with owners of the controlling entity in their capacity as owners Disposal of NZ forestry units - - (1,370,000) 1,370,000 - 72 Total transactions with owners of the entity - - (1,370,000) 1,370,000 - Balance at 30 June 2017 16 10 111,591,162 5,856,160 22,365,533 139,812,865

TOA RANGATIRA TRUST FINANCIAL STATEMENTS AND ANNUAL REPORT 2018 Toa Rangatira Trust Group Consolidated Statement of Changes in Equity For the Year ended 30th June 2018 NZ forestry emission unit emission NZ forestry Historical Treaty Redress Historical Accumulated revenue Trust SettlementTrust Sum and expense reserves reserve

2018 Note Total Balance as at 1 July 2017 16 10 111,591,162 5,856,160 22,365,533 139,812,865 Total comprehensive income for the year - - 580,102 8,078,335 8,658,437 10 111,591,162 6,436,262 30,443,868 148,471,302 Transactions with owners of the controlling entity in their capacity as owners Disposal of NZ forestry units - - (3,915,000) 3,915,000 -

73 Total transactions with owners of the entity - - (3,915,000) 3,915,000 - Balance at 30 June 2018 16 10 111,591,162 2,521,262 34,358,868 148,471,302

TOA RANGATIRA TRUST FINANCIAL STATEMENTS AND ANNUAL REPORT 2018 Toa Rangatira Trust Group Notes to the Financial Statements For the Year ended 30th June 2018

1. Reporting Entity

The reporting entity is Toa Rangatira Trust (“the Trust”). The discretionary Trust is the Post Governance Settlement Entity established by Trust Deed to receive redress assets on behalf of Ngati Toa Rangatira.

The address of the Trust is at 26 Ngati Toa Street, Takapuwahia, Porirua. The Trust was established in December 2012. The objective of the Trust is to hold, manage and administer the Trust funds, for any object or purpose that is beneficial to Ngati Toa Rangatira. Te Runanga o Toa Rangatira Inc. is the Mandated Iwi Organisation for Ngati Toa Rangatira and is the Trustee of Toa Rangatira Trust. The primary activity of the Trust Group is to hold and manage the assets received as part of the Ngati Toa Historical settlement.

These are the Consolidated Financial Statements of the Trust and its subsidiary companies under Trustee control. Refer to note 4(a) for a list of the subsidiary companies collectively referred to as the “Trust Group”.

Consolidated Financial Statements for Te Runanga o Toa Rangatira (the Ultimate Parent) and its subsidiaries, Ora Toa PHO Limited, Ika Toa Limited, Ngati Toa Limited, and Kapiti Tours Limited, are separately presented for the year ended 30 June 2018. The Toa Rangatira Trust and its subsidiaries form part of the Te Runanga o Toa Rangatira Group.

These Trust Group consolidated financial statements are presented in accordance with the Public benefit Entity Standards and are for the twelve month period ended 30 June 2018. The Consolidated Financial Statements were issued by the Trustee Board 31st October 2018.

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 International Public Sector Accounting Standards (‘PBE IPSAS”) 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 Trust Group qualifies for Tier 2 reporting as for the past two reporting periods it has had between $2m and $30m operating expenditure.

TOA RANGATIRA TRUST FINANCIAL STATEMENTS AND ANNUAL REPORT 2018

74 Toa Rangatira Trust Group Notes to the Financial Statements For the Year ended 30th June 2018

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

 NZ Forestry Emission Units (NZU’s)

 Initial measurement of assets received from non-exchange transaction. 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.

(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  Intangible assets having finite or indefinite useful lives (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:

 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 2017.

TOA RANGATIRA TRUST FINANCIAL STATEMENTS AND ANNUAL REPORT 2018

75 Toa Rangatira Trust Group Notes to the Financial Statements For the Year ended 30th June 2018 f. Goods and Services Tax (GST) All amounts shown in these statements are shown exclusive of GST except for receivables and payables that are stated inclusive of GST. The net amount of GST recoverable from or payable to, Inland Revenue Department (IRD) is included as part of the receivables and payables in the Statement of Financial Position. 3. 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 consolidated financial statements of the Group have been modified to give the reader a better understanding of the nature of the activity.

The Trustees 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 Notes to the Financial Statements: 4. Basis of consolidation 5. Revenue 6. Cash and cash equivalents 7. Term deposits and managed funds 8. Accounts and other receivables 9. Prepayments 10. Income tax 11. Investment Properties 12. Trade and other payables 13. Related parties 14. Rent received in advance 15. Financial instruments 16. Reserves 17. Contingent assets, liabilities and commitments 18. Other expenses 19. Intangible Assets 20. Investment in Joint Venture 21. Subsequent events

TOA RANGATIRA TRUST FINANCIAL STATEMENTS AND ANNUAL REPORT 2018

76 Toa Rangatira Trust Group Notes to the Financial Statements For the Year ended 30th June 2018

4. Basis of consolidation a. Controlled Entities

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 Share capital (number of shares) Investment at cost Relationship 2018 2017 2018 2017 Toa Rangatira Trust Controller - - 10 10 Toa Rangatira Group Holdings Limited Subsidiary 1 1 100 100 Toa Rangatira Investment Properties Limited Subsidiary 1 1 100 100 Toa Rangatira Developments Limited Subsidiary 1 1 100 100 Whenua Toa Trust Trust Subsidiary - - - - Total 3 3 310 310

Te Runanga o Toa Rangatira Inc. is the Trustee of the Toa Rangatira Trust and Trustee shareholder in Toa Rangatira Group Holdings Limited. By virtue of the nature and purpose of the this relationship, Toa Rangatira Investment Properties Limited and Toa Rangatira Development Limited are considered under the control of the Trustee, as all financial policies and objectives are aligned to the Trust Deed and the duties are covered in the Powers of the Trustee. The Board of the Trust and the Trustee of Toa Rangatira Trust are one and the same.

The Trust has control over the Whenua Toa Trust as all funding and expenditure must be approved by the board of the Toa Rangatira Trust. The share capital is fully paid up. 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.

TOA RANGATIRA TRUST FINANCIAL STATEMENTS AND ANNUAL REPORT 2018

77 Toa Rangatira Trust Group Notes to the Financial Statements For the Year ended 30th June 2018 c. Joint Ventures

Joint ventures are accounted for using the equity method. 5. Revenue

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. Sale of goods revenue includes the following:

 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.

2018 2017 $ $ Properties sold - 10,379,081 Total Properties Sold - 10,379,081

The trading expenses include the property purchases plus all transactions related to the sale of the properties.

TOA RANGATIRA TRUST FINANCIAL STATEMENTS AND ANNUAL REPORT 2018

78 Toa Rangatira Trust Group Notes to the Financial Statements For the Year ended 30th June 2018

(ii). Licence fees and rental income on investment property Rental income on properties purchased under a lease back arrangement with various Crown agencies as well as licence fee income from the Golden Downs and Queen Charlotte forestry land is recognised in surplus or deficit on a straight line basis over the term of the lease.

Income from licence fees and rentals are included in the Consolidated Statement of Comprehensive Revenue and Expense comprises:

2018 2017 $ $ Licence fees from forestry land 1,748,086 1,676,762 Lease rentals from other commercial land 840,041 743,533 Total Licence Fee and Rental Income 2,588,127 2,420,295 b. Other Income (i). Interest Interest is recognised on a time proportion basis that takes into account the effective yield on the asset.

Interest income shown in other income in the Statement of Comprehensive Revenue and Expense comprises interest earned on bank ‘At Call’ and Term Deposits.

(ii). 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.

(iii). Sale of NZ Forestry Emission Units Income from the sale of NZ Emission Units is recognised in the Statement of Comprehensive Revenue and Expense when the Group's right to receive payment is established. Other income from exchange transactions include in Other Income in the Statement of Comprehensive Revenue and Expense includes: 2018 2017 $ $ Sundry Income 407,611 372,747 Other income from exchange transactions 407,611 372,747 Total Other Income 407,611 372,747

TOA RANGATIRA TRUST FINANCIAL STATEMENTS AND ANNUAL REPORT 2018

79 Toa Rangatira Trust Group Notes to the Financial Statements For the Year ended 30th June 2018 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). Redress Income

Revenue from Historical and or Fisheries Settlements received as non-exchange transactions are recognised when the entitlement (control) passes to the Trust Group and the Group entity is able to enforce the claim. Revenue is recognised in the 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 included in the Statement of Comprehensive Revenue and Expense is subsequently moved to a special settlement reserve account to preserve the settlement sum.

6. Cash and Cash Equivalents Cash and cash equivalents consist of short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Bank overdrafts are shown on the Statement of Financial Position as current liabilities within short term borrowings.

2018 2017 $ $ Cash and cash equivalents Current assets Cash at bank and on hand 2,705,963 7,304,319 Cash and cash equivalents in the statement of cash flows 2,705,963 7,304,319

Per annum annual interest rate ranges to components of cash and cash equivalents Bank deposits 0.00-3.00% 0.00-3.00% Call deposits 3.30-3.95% 3.00-4.20%

There are no restrictions over any of the cash and cash equivalent balances held by the Group.

TOA RANGATIRA TRUST FINANCIAL STATEMENTS AND ANNUAL REPORT 2018

80 Toa Rangatira Trust Group Notes to the Financial Statements For the Year ended 30th June 2018

7. Term Deposits and Managed Funds Short term deposits are bank deposits of varying terms of more than 90 days and less than 12 months. Deposit Rates vary depending on the term of the investment with rates ranging between 3.30% and 3.50% at balance date.

Long term deposits are bank deposits of greater than 12 months. Bank interest rates on deposits of greater than one year are between 3.40-3.95%. Managed funds are funds held with ANZ in a balanced portfolio measured at Fair Value through Surplus and Deficit

8. Accounts and other receivables Trade receivables are expected to be received within 30 days of balance date. Bad debts are written off in the year in which they are identified.

2018 2017 Accounts and other receivables $ $ Receivables from exchange transactions 470,094 8,183 Accrued interest on deposits 727,372 1,417,257 Total receivables from exchange transactions 1,197,466 1,425,440

GST receivable 46,224 72,280 Total receivables from non-exchange transactions 46,224 72,280

Total Trade and Other Receivables 1,243,690 1,497,720

9. Prepayments Prepayments include payments that have been made prior to balance date, for goods or services that have not yet been delivered.

TOA RANGATIRA TRUST FINANCIAL STATEMENTS AND ANNUAL REPORT 2018

81 Toa Rangatira Trust Group Notes to the Financial Statements For the Year ended 30th June 2018

10. Income Tax The Trust has Maori Authority status for taxation purposes while the subsidiary companies are all taxed at the ordinary company tax rate of 28%.

2018 2017 $ $ Accounting profit from operations 8,593,579 8,392,345 Add taxable inter-entity gain on sale - 375,000 Less non assessable earnings (5,738,060) (3,850,781) Add back non-deductible expenses 401,489 476,066 Losses carried forward from prior years (32,820) (5,002) Taxable Earnings 3,224,188 5,387,628

Opening tax payable 31,891 298,957

Current income tax expense 558,682 966,825 Less over provision in previous year (43,437) (3,313) Current income tax expense 515,245 963,512

Less Resident withholding tax paid (409,382) (460,506) Less tax payments made to Inland Revenue (503,939) (992,583) Add transfers made - (10,076) Add refunds received 66,746 232,587 Current Tax payable / (receivable) (299,439) 31,891

11. Investment Properties Investment property is property held either to earn rental income, for capital appreciation or for both, but not 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.

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.

TOA RANGATIRA TRUST FINANCIAL STATEMENTS AND ANNUAL REPORT 2018

82 Toa Rangatira Trust Group Notes to the Financial Statements For the Year ended 30th June 2018 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 an investment property changes to owner occupied, such that it results in a reclassification to 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 2014. 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. The $24 million purchase price was classified as a receivable in 2014 and has been reclassified to investment property at balance date.

2018 2017 $ $ Investment Properties Opening Balance as at 1 July 45,572,100 42,095,578 Impairment - - Gain on revaluation of Investment Properties 3,325,980 2,748,296 Carrying amount of Investment Properties at June 30 48,898,080 44,843,874 Additions - non-exchange transactions - - Additions - exchange transactions (purchased) 2,402,921 728,226 Total acquisition costs 2,402,921 728,226 Carrying amount at June 30 51,301,001 45,572,100

The Richmond Police Station land was purchased in July 2015 for $979,570. The land is subject to a lease back arrangement with New Zealand Police. The lease term has an initial term of 10 years and has further perpetual rights of renewal.

The Wellington Central Police Station land was purchased in May 2016 for $10,766,208. The land is subject to a lease back arrangement with New Zealand Police. The lease has an initial period of 20 years with further perpetual rights of renewal.

The minimum future rental payments expected from the lease back arrangements is shown in Note 14.

These properties were valued under the process for deferred selection properties under the Ngati Toa Deed of Settlement. This requires a comprehensive independent valuation by both a Crown valuer and a valuer for the Trustee (CBRE Wellington).

TOA RANGATIRA TRUST FINANCIAL STATEMENTS AND ANNUAL REPORT 2018

83 Toa Rangatira Trust Group Notes to the Financial Statements For the Year ended 30th June 2018

These two Police Station Land properties were revalued for 30 June 2018, between 1 July 2018 and 18th August 2018 by CBRE. 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.

12. Trade and other payables Trade and other payables are recognised when the Trust Group becomes obliged to make future payments resulting from the purchase of goods or services. Trade and other payables are non-interest bearing and are normally settled within 30 days and therefore reflect their fair value. Trade and other payables consist of: 2018 2017 $ $ Trade payables from exchange transactions 331 15,011 Audit accruals 31,500 26,000 Other sundry accruals 24,001 60,375 GST payable 47,191 8,256 Total Trade and Other Payables 103,023 109,642

13. Related Parties

Te Runanga o Toa Rangatira Inc. is the Trustee of the Toa Rangatira Trust and is the controlling entity for consolidation. Te Runanga o Toa Rangatira Inc. is a charitable organisation whose primary activity 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 to the community in general.

Other companies that are also 100% owned by Te Runanga o Toa Rangatira Inc. (the controlling entity) are Kapiti Tours Limited, Ngati Toa Limited, Ika Toa Limited, and the Primary Health unit, Ora Toa PHO Limited.

The Whenua Toa Trust was established as the Limited partner in the Kenepuru Partnership Limited. The Board appointed Trustees are Tā Matiu Rei, Taku Parai and Francis Freemantle.

Toa Rangatira trust sold properties at Bluff Road, Kenepuru Drive, Raiha Street, Porirua and Hospital Drive, Kenepuru to the JV for $10,500,000 and $3,060,000 in 2017. The Trust had contributed equity of $1,614,000 to the JV for the year ended 30 June 2018 (2017:$8,602,362).

In the prior year Toa Rangatira Trust loaned Whenua Toa Trust $11,621,605. This remains outstanding at balance date. Interest paid in 2018 on the loan is $756,648 (2017:nil).

The Trustee also holds 100% of the shares in Toa Rangatira Group Holdings Limited. Toa Rangatira Holdings Limited holds 100% of the shares in Toa Rangatira Investment Properties Limited and Toa Rangatira Developments Limited. These subsidiary companies manage the different classes of assets for the Trustee Group Parent.

TOA RANGATIRA TRUST FINANCIAL STATEMENTS AND ANNUAL REPORT 2018

84 Toa Rangatira Trust Group Notes to the Financial Statements For the Year ended 30th June 2018

Toa Rangatira Trust received administrative services from Te Runanga o Toa Rangatira Inc. amounting to $819,678 (2017: $790,737) for the year. Audit reimbursements for 2018 were $30,000 (2017: $37,698) At balance date current payables owed to Te Runanga o Toa Rangatira Inc. amount to $254,770 (2017: $210,217), amounts owed to the Trust by Te Runanga o Toa Rangatira Inc. amount to $26,636 (2017: $26,636)

All transactions between the Trust and subsidiaries are eliminated in these consolidated Financial Statements. The entities are eliminated on consolidation of both the Trust Group and Te Runanga o Toa Rangatira Inc.

There were no other balances or advances owing at the end of the year. Key Management Personnel The key management personnel are the Trustee Board members. The Trust Board are the same members of the Board of the Parent, Te Runanga o Toa Rangatira (Inc.). Board fees have been paid to Board members by the parent body.

14. Rent Rent received received in Advance in Advance

Licence fees and rent paid for land under lease back arrangements is paid in advance. The amount shown in the Statement of Financial Position represents payments made for a period beyond June 2018.

The minimum future lease receivable expected over the next five years is shown below:

2018 2017 $ $ Due within 1 year 2,568,773 2,515,221 Between 1-5 years 10,275,092 10,060,884 More than 5 years 55,938,768 57,057,176 Total minimum future lease receivable 68,782,633 69,633,281

15. Financial instruments The Trust Group initially recognises financial instruments when the Trust Group becomes a party to the contractual provisions of the instrument.

The Trust Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in transferred financial assets that is created or retained by the Group is recognised as a separate asset or liability. The Group derecognises a financial liability when its contractual obligations are discharged, cancelled or expire.

The Trust Group also derecognises financial assets and financial liabilities when there have been significant changes to the terms and/or the amount of the contractual payments to be received and or paid.

TOA RANGATIRA TRUST FINANCIAL STATEMENTS AND ANNUAL REPORT 2018 85 Toa Rangatira Trust Group Notes to the Financial Statements For the Year ended 30th June 2018

Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when the Trust Group has a legal right to offset the amount and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

The Trust Group classifies the financial assets into the following categories: fair value through surplus or deficit, held-to-maturity, loans and receivables and available for sale. The Trust Group classifies financial liabilities into the following categories: fair value through surplus or deficit, and amortised cost. a. Loans and Receivables Loans and receivables financial assets with fixed or determinable payments that are not quoted in an active market. Loans and receivables subsequently measured at amortised cost using the effective interest method, less any impairment losses. Loans and receivables comprise: The Trust Group’s cash and cash equivalents, short and long term deposits, and trade and other receivables.

Cash and cash equivalents and short to long term cash deposits represent highly liquid investments that are readily convertible to a known amount of cash with an insignificant amount of risk of changes in value, with maturities of 90 days or less. b. Available-For-Sale Financial Assets

Available-for-sale financial assets are non-derivative financial assets that are either designated to this category or do not qualify for inclusion in any of the other categories of financial assets.

All available-for-sale financial assets are measured at fair value. Gains and losses are recognised in other comprehensive income and expense and are reported within the "available-for-sale reserve" within equity.

When the asset is disposed of or is determined to be impaired the cumulative gain or loss recognised in other comprehensive income is reclassified from the equity reserve to surplus or deficit and presented as a reclassification adjustment within other comprehensive income. Any associated interest income or dividends are recognised in surplus or deficit within "investment income". c. Amortised cost financial liabilities Financial liabilities classified as amortised cost are non-derivative financial liabilities that are not classified as fair value through surplus or deficit financial liabilities. Financial liabilities classified as amortised cost are subsequently measured at amortised cost using the effective interest method. Financial liabilities classified as amortised cost include cash and cash equivalents (bank overdrafts), trade and other payables.

TOA RANGATIRA TRUST FINANCIAL STATEMENTS AND ANNUAL REPORT 2018

86 Toa Rangatira Trust Group Notes to the Financial Statements For the Year ended 30th June 2018 d. Impairment of non-derivative financial assets

Objective evidence that financial assets are impaired includes default or delinquency by a counterparty, restructuring of an amount due to the Trust Group on terms that the Trust Group would not consider otherwise, indications that a counterparty or issuer will enter bankruptcy, adverse changes in the payment status of borrowers or issuers in the Trust Group, economic conditions that correlate with defaults or the disappearance of an active market for a security. In addition, for an equity security classified as an available- for-sale financial asset, a significant or prolonged decline in its fair value below its cost is objective evidence of impairment. e. Financial assets classified as available-for-sale Impairment losses on available-for-sale financial assets are recognised by reclassifying the losses accumulated in the fair value reserve in net assets/equity to surplus or deficit.

The cumulative loss that is reclassified from net assets/equity to surplus or deficit is the difference between the acquisition cost, net of any principal repayment and amortisation, and the current fair value, less any impairment loss recognised previously in surplus or deficit.

Changes in impairment provisions attributable to application of the effective interest method are reflected as a component of interest income. If, in a subsequent period, the fair value of an impaired available-for- sale debt security increases and the increase can be related objectively to an event occurring after the impairment loss was recognised, then the impairment loss is reversed, with the amount of the reversal recognised in surplus or deficit. However, any subsequent recovery in the fair value of an impaired available-for-sale equity security is recognised in other comprehensive revenue and expense.

TOA RANGATIRA TRUST FINANCIAL STATEMENTS AND ANNUAL REPORT 2018

87 Toa Rangatira Trust Group Notes to the Financial Statements For the Year ended 30th June 2018

f. Financial assets classified as Fair Value through Surplus or Deficit

A financial instrument is classified as fair value through surplus or deficit if it is: Held for trading: Derivatives where hedge accounting is not applied

Designated at initial recognition: If the Group manages such investments and makes purchase and sale decisions based on their fair value in accordance with the Groups documented risk management or investment strategy. Those fair value through surplus or deficit instruments sub-classified as held-for-trading comprise the ANZ Managed Funds. Financial instruments classified as fair value through surplus or deficit are subsequently measured at fair value with gains or losses being recognised in surplus or deficit.

The table below shows the carrying amount of the Group’s financial assets and liabilities:

Carrying value of Financial Instruments $

Financial Assets Financial Liabilities TOTAL

Fair value Loans and through surplus Liabilities (at Trust Group 2018 NOTE receivables and deficit amortised cost) (FVTSD)

Cash and cash equivalents 6 2,705,963 - - 2,705,963

Short term deposits 7 57,594,064 - - 57,594,064

Managed funds classified as FVTSD 7 - 22,953,237 - 22,953,237

Receivables 8 1,197,466 - - 1,197,466

Payables 12, 13 - - (331) (331)

61,497,493 22,953,237 (331) 84,450,399

Carrying value of Financial Instruments $

Financial Assets Financial Liabilities TOTAL

Fair value Loans and through surplus Liabilities (at Trust Group 2017 NOTE receivables and deficit amortised cost) (FVTSD)

Cash and cash equivalents 6 7,304,319 - - 7,304,319

Short term deposits 7 41,368,024 - - 41,368,024

Long term deposits 7 6,943,688 - - 6,943,688

Managed funds classified as FVTSD 7 - 21,322,326 - 21,322,326

Receivables 8 8,183 - - 8,183

Payables 12, 13 - - (15,011) (15,011)

81,321,615 - (15,011) 76,931,529

TOA RANGATIRA TRUST FINANCIAL STATEMENTS AND ANNUAL REPORT 2018

88 Toa Rangatira Trust Group Notes to the Financial Statements For the Year ended 30th June 2018

16. Reserves a. Historical Treaty Settlement reserve

The Historical Treaty Settlement reserve within equity comprises the cash settlement in accordance with the Deed of Settlement dated December 2012 cash funds received from a past Treaty of Waitangi Claim. b. Revaluation reserves The New Zealand Forestry Emissions Units are shown at fair value as at 30th June measured using the available market rates at balance date. The gain or loss in fair value is shown in the Statement of Comprehensive Revenue and Expense. 2018 2017 $ $ Opening balance 111,591,162 111,591,162 Transfers from other comprehensive income - - Total Historical Settlement reserve 111,591,162 111,591,162

New Zealand Forestry Emission Units Reserve Opening balance 5,856,160 7,517,846 Disposals (3,915,000) (1,370,000) Gain/(loss) on revaluation 580,102 (291,686) Total New Zealand Forestry Emission Units Reserve 2,521,262 5,856,160

17. Contingencies and Commitments There were no known contingent assets at 30 June 2018. (2017: NIL). There were no known contingent liabilities at 30 June 2018. (2017: NIL). a. Commitments The Whenua Toa Trust has entered into a Joint Venture agreement to develop the old Kenepuru Hospital site. The site will be developed into residential and commercial sites by a joint venture development company. The Whenua Toa Rangatira Trust has committed $11,500,000 capital to the joint venture development and will hold 50% of the shares in the development company, $9,241,310 has been paid for the year ended 30 June 2018 (2017: $8,602,362). A further loan advance has been approved to assist with ongoing development and interest is payable on the loan at 6.5% per annum. No calls were made on the additional loan as at 30 June 2018.

18. Other Expenses 2018 2017 Other Expenses $ $ Consultants and legal expenses 60,012 70,059 Other expenses 58,178 39,071 Total Other Expenses 118,190 109,130

TOA RANGATIRA TRUST FINANCIAL STATEMENTS AND ANNUAL REPORT 2018

89 Toa Rangatira Trust Group Notes to the Financial Statements For the Year ended 30th June 2018

19. Intangible assets a. Recognition and measurement Intangible assets are initially measured at cost except for:  Heritage assets with no future economic benefit or service potential other than their heritage value are not recognised in the Statement of Financial Position  NZ Forestry Emission Units The Trust has received a number of sites as part of the Historical Treaty of Settlement claim. These sites were received as non-exchange transactions. The Sites which have reserve, conservation or other restrictions that prevent sale or economic future earning potential cannot be reliably measured and are excluded from the Consolidated Statement of Financial Position. The NZ Emissions Units transferred on 29 August 2014, 548,744 units were transferred to the Toa Rangatira Trust along with the Crown Forestry Licenced rentals. The NZ Emissions Units were initially recognised in the Consolidated Statement of Comprehensive Income at the rate per unit as listed on the Carbon Forest Services site at 29 August 2014. This value was the deemed cost. The NZU’s have been subsequently revalued at each balance date to determine whether there has been any impairment also using the prevailing rate listed for the NZU’s, with the revaluation gain going through Other Comprehensive Income. The Board resolved to sell down 300,000 units during 2018 (2017: 100,000). The income from the sale is included in Other Revenue and Expense in the Statement of Comprehensive Revenue and Expense, and the previous fair value gain on valuation has been reversed.

As part of receiving the Golden Downs East, Golden Downs West and Queen Charlotte forest land on settlement, 548,747 pre-1990 NZ Units were received. The Trustees expect that the current licensors will continue to replant and keep these areas forested for the term of the licences (31+ years ). The Trustees do not consider the land suitable for a purpose other than forestry. In the event that areas of land are handed back in accordance with the Crown licence term during or at the end of the term, the trustees expectation is that the land would either be replanted or that native bush would be allowed to regenerate. In the event that the land is handed back, is not replanted, and that native bush has not regenerated to the correct density within ten years of the land hand back, then a liability may be incurred. This potential liability is not recognised in the financial statements.

TOA RANGATIRA TRUST FINANCIAL STATEMENTS AND ANNUAL REPORT 2018

90 Toa Rangatira Trust Group Notes to the Financial Statements For the Year ended 30th June 2018

20. Investment in Joint Venture a. Jointly controlled entities The Trust Group holds joint control over the following jointly controlled entity, which is accounted for using equity method.

The Whenua Toa Trust was setup in October 2016 as the limited partner in the Kenepuru Partnership Limited joint venture. The Whenua Toa Trust is a 50% shareholder in the joint venture.

2018 2017 $ $ Share of net assets of Kenepuru Partnership Limited Joint Venture 10,135,493 8,570,750 Share of net assets of joint venture at 30 June 10,135,493 8,570,750

2018 2017 $ $ Loss in joint venture 49,257 31,610 Share of loss from joint venture 49,257 31,610 b. Commitments from interest in joint ventures The Trust Group has committed to contributing capital of $11,500,000. Of this, $11,252,360 has been committed for the year ended 30 June 2018 (2017: $8,977,360) .

21. Events Subsequent to Balance Date Kenepuru Developments has confirmed the final price for the sale of stage 1 Kenepuru landings. The 144 sections in stage 1(a) and 1(b) have been sold for $24,230,000.

There are two larger commercial sites under contract. One site is under contract for $3,000,000 and the other site is under contract for $13,000,000. Both sites have specific terms and conditions of sale that need to be satisfied before they are unconditional.

The Board have agreed to place a further $30 million into managed funds with Milford Investments ($20m) and Harbour assets ($10m).

The Group entered into non-binding memorandum of understanding with the Crown on 1 November 2018. At the conclusion of the due diligence period a new entity Te Āhuru Mōwai will be established as a registered class 1 social landlord (community housing provider) under the Community housing registration authority (CHRA). Te Āhuru Mōwai will manage approximately 900 Housing New Zealand properties on commercial terms on the western side of Porirua under a lease arrangement with a 25 year initial term. The contractual agreements once executed provide for call options, asset management and redevelopment opportunities. The tenancy management arm is expected to be operational by the end of 2019.

TOA RANGATIRA TRUST FINANCIAL STATEMENTS AND ANNUAL REPORT 2018

Ora Toa PHO Limited Company Directory As at 30th June 2018

Registered Office 26 Ngati Toa Street Porirua

Directors Teiringa Heather Davies Matiu Rei Randall Patete Hippolite Cassius Poe Kuresa Teresa Aroha Wall Charlene Puhiwahine Williams

Company Number WN1942404

Auditors BDO Wellington Audit Limited

Bankers Westpac Banking Corporation

Solicitors Kensington Swan

Date of Formation 23 May 2007

Nature of Business Primary Health Organisation

Business Location 26 Ngati Toa Street Porirua

Shareholders Te Runanga O Toa Rangatira Inc. 1 Ordinary Share

ORA TOA PHO LIMITED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018 93

Ora Toa PHO Limited Directors Annual report For the Year ended 30th June 2018

The Directors present their Annual Report including Financial Statements of the company for the year ended 30th June 2018.

Reporting Entity The business of the company is as a Primary Health Organisation. The nature of the company's business has not changed during the year. Auditors The company's Auditors were BDO Wellington Audit Limited. BDO Wellington Audit Limited is willing to continue as the company auditors. Fees payable to BDO Wellington Audit Limited for the 2018 audit are $11,000. Directors' Disclosures There were no entries recorded in the Register of Interests. No Director acquired or disposed of any interest in shares in the company.

The Board of Directors received no notice during the year from any Director wishing to use company information received in their capacity as a Director which would not have ordinarily been available.

The Directors are covered by an indemnity insurance covering Professional, Management and General liability up to $5,000,000 for any one claim, and for Employers and Statutory liability up to $500,000. The insurance is part of an association combined insurance plan paid for by Te Runanga o Toa Rangatira Inc. to cover the officers of the company.

Donations No donations were made by the company during the year. Employee and Director Remuneration

Pursuant to section 211(g) of the Companies Act 1993, no employee or Director received remuneration and/or any other benefits exceeding $100,000 during the year. Directors receive a payment of $250 per meeting attended during the year. There were no Directors meetings during 2018.

For and on behalf of the Board of Directors,

ORA TOA PHO LIMITED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018 94

INDEPENDENT AUDITOR’S REPORT TO THE SHAREHOLDERS OF ORA TOA LIMITED

Opinion

We have audited the financial statements of Ora Toa Limited (“the Company”), which comprise the statement of financial position as at 30 June 2018, and the statement of comprehensive revenue and expense, statement of changes in net assets and cash flow statement for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as at 30 June 2018, and its financial performance and its 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 Financial Statements section of our report. We are independent of the Company 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 Company.

Board’s Responsibilities for the Financial Statements

The Board is responsible on behalf of the abbreviation for the preparation and fair presentation of the financial statements in accordance with PBE Standards RDR, and for such internal control as the Board determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Board is responsible on behalf of the Company for assessing the Company’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 Company or to cease operations, or has no realistic alternative but to do so.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the 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 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 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 Company’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 Company’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 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 Company to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the 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 Company to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of the Company audit. We remain solely responsible for our audit opinion.

Who we Report to

This report is made solely to the Company’s shareholders, 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 Company and the Company’s shareholders, 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

Ora Toa PHO Limited Statement of Comprehensive Revenue and Expense For the Year Ended 30th June 2018

NOTE 2018 2017 $ $

Contract income 4f 6,364,554 5,533,638 Less cost of services provided (5,850,110) (5,464,662) Gross income / (loss) from contract services 514,444 68,976

Less operating expenses Administration fees (24,000) (24,000) Accountancy fees (8,278) (6,647) Audit fees (14,003) (10,097) Bank charges (251) (260) Computer expenses (8,598) (7,486) General expenses (174) (12,486) IRD penalties & interest - (343) Loss on sale of fixed assets - (1,356) Motor vehicle expenses (16,550) (12,784) Printing, stamps & stationery (2,188) (2,275) Rent & rates (9,600) (9,600) Personnel costs (182,365) (160,783) Total Expenses (266,007) (248,117)

Surplus / (deficit) before depreciation 248,437 (179,141)

Less depreciation Depreciation 9 - (924) Surplus / (deficit) for the year 248,437 (180,065)

Total comprehensive revenue and expense for the year 248,437 (180,065)

ORA TOA PHO LIMITED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018 97

Ora Toa PHO Limited Statement of Financial Position As at 30th June 2018

NOTE 2018 2017 $ $ Assets Current Assets Cash and cash equivalents 757,755 396,341 Trade and other receivables 10 300,918 222,163 GST refund due - 23,686 Total Current Assets 1,058,673 642,190

Non Current Assets Property plant and equipment 9 - - Total Non Current Assets - -

Total Assets 1,058,673 642,190

Liabilities Current Liabilities Trade and other payables 11 642,184 481,314 GST payable 7,176 - Total Current Liabilities 649,360 481,314

Total liabilities 649,360 481,314

Net Assets 409,313 160,876

Equity Share Capital 12 - - Retained Earnings 409,313 160,876 Total Equity 409,313 160,876

Director ______Director

Date:

ORA TOA PHO LIMITED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018 98

Ora Toa PHO Limited Statement of Cash Flows For the Year ended 30th June 2018

NOTE 2018 2017 $ $ Cashflow from operating activities Proceeds have come from: Contract income 6,296,071 5,599,574 GST refunds/(payments) 40,138 14,896 Payments made to suppliers and others (5,974,795) (5,570,757) Net cash inflow/(outflow) from operating activities 361,414 43,713

Cashflows from investing activities Proceeds from sale of property plant and equipment - 1,358 - 1,358 Cash flows from financing activities Interest payments - (343) Net cash inflow/(outflow) from financing activities - (343)

Net cash inflow/(outflow) from all activity 361,414 44,728

Cash and cash equivalents at the beginning of the year 4(d) 396,341 351,613 Cash and cash equivalents at the end of the year 4(d) 757,755 396,341

ORA TOA PHO LIMITED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018 99

Ora Toa PHO Limited Statement of Changes in Equity For the Year ended 30th June 2018 Retained Share Earnings Total Capital

2017 $ $ $ Balance as at 1 July 2016 - 340,941 340,941

Surplus / (deficit) for the year - (180,065) (180,065) Balance at 30 June 2017 - 160,876 160,876 NOTE 12 2018 Balance as at 1 July 2017 - 160,876 160,876

Surplus/(deficit) for the year - 248,437 248,437 Balance at 30 June 2018 - 409,313 409,313 NOTE 12

ORA TOA PHO LIMITED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018 100

Ora Toa PHO Limited Notes to the Financial Statements For the Year ended 30th June 2018

1. Statement of Compliance

These are the financial statements of Ora Toa PHO Limited ('the company'). Ora Toa PHO Limited is a company incorporated and domiciled in New Zealand registered under the Companies Act 1993, and a reporting entity for the purposes of the Financial Reporting Act 2013. The financial statements of the company have been prepared in accordance with the Financial Reporting Act 2013. Ora Toa Limited is a Public Benefit Entity.

Ora Toa PHO Limited is a Primary Health Organisation.

These financial statements for Ora Toa PHO Limited as at 30 June 2018 have been prepared in accordance with New Zealand Generally Accepted Accounting Practice (NZ GAAP). They comply with Public Benefit Entity International Public Sector Accounting Standards (‘PBE IPSAS’) as appropriate for Tier 2 not-for-profit public benefit entities for which all reduced disclosure regime exemptions have been adopted.

The company qualifies for Tier 3 reporting as it does not have public accountability and it does not have expenses more than or equal to $2 million. Ora Toa PHO Limited has elected to report as a Tier 2 entity and has used policies consistent with the controlling entity, Te Runanga o Toa Rangatira Inc. (TROTR).

The financial reports were presented and authorised for issue by the Director on 31st October 2018.

2. Basis of Preparation a. Statement of Compliance The financial statements of Ora Toa PHO Limited have been prepared on an historical cost basis. The information is presented in New Zealand dollars (NZD) rounded to the nearest dollar. Accounting policies are selected and applied in a manner which ensures that the resulting financial information satisfies the concepts of relevance and reliability thereby ensuring the substance of the underlying transaction or other events is reported.

The company has taken advantage of all reduced reporting disclosure requirements available under the Tier 2 Standards for Public Benefit Entities.

3. Changes in Accounting Policies There have been no changes to accounting policies, all other accounting policies have been applied on a basis consistent with those in other years.

ORA TOA PHO LIMITED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018 101

Ora Toa PHO Limited Notes to the Financial Statements For the Year ended 30th June 2018

4. Summary of Significant Accounting Policies a. Property, Plant & Equipment The entity has the following classes of Property, Plant & Equipment; Motor Vehicles 31.20% DV Office Equipment 24-60% DV Plant and Equipment 24.00% DV All property, plant & equipment are stated at cost less depreciation and impairment losses. Depreciation methods, useful lives, and residual values are reviewed at reporting date and adjusted if appropriate. b. Impairment of assets

At each reporting date, the company reviews the carrying amounts of its assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (If any). Where the asset does not generate cash flows that are independent from other assets, the company estimates the recoverable amount of the cash generating unit to which the asset belongs. There is only one cash generating unit within Ora Toa PHO Limited because there is only one operating activity for the delivery of services. Recoverable amount is the higher of fair value less costs to sell, and value in use, in assessing value in use, the estimated future cash-flows are discounted to their present value using a pre-tax discount rate that reflects the current market value assessments of time value of money, and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. If the recoverable amount of a cash generating unit is estimated to be less than its carrying amount, the carrying amount of the cash generating unit is reduced to its recoverable amount. An impairment loss is recognised in profit and loss immediately unless the relevant asset is carried at fair value, in which case the impairment loss is treated as a revaluation decrease. c. Income Tax The Company is registered with the Charities Commission and has charitable status for income tax purposes and is therefore not liable for income tax. d. Cash and Cash Equivalents

Cash and cash equivalents consist of short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Bank overdrafts are shown on the statement of financial position as current liabilities within short term borrowings.

ORA TOA PHO LIMITED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018 102

Ora Toa PHO Limited Notes to the Financial Statements For the Year ended 30th June 2018 e. Financial Instruments Financial instruments are initially recognised at cost on the trade date, which includes transaction costs when the contractual rights or obligations exist. After initial recognition, financial instruments are measured as set out below:

(i) Loans and Receivables Trade receivables and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as loans and receivable. Loans and receivables are measured at amortised cost using the effective interest method less impairment loss (if any).

(ii) Impairment

The entity assesses at each balance date whether there is objective evidence that a financial asset or group of financial assets is impaired. In the case of available-for-sale, a significant or prolonged decline in the fair value of a security below its cost is considered in determining whether the security is impaired. Impairment losses are recognised in the Statement of Comprehensive Revenue and Expense.

(iii) Amortised cost financial liabilities Financial liabilities classified as amortised cost are non-derivative financial liabilities that are not classified as fair value through surplus or deficit financial liabilities.

Financial liabilities classified as amortised cost are subsequently measured at amortised cost using the effective interest method.

Financial liabilities classified as amortised cost include cash and cash equivalents (bank overdrafts), trade and other payables.

(iv) Derecognition of Financial Instruments The derecognition of a financial instrument takes place when the entity sells the instrument, or all cash flows attributable to the instrument are passed to an independent third party.

The following table shows the carrying value of the company’s financial assets and financial liabilities.

ORA TOA PHO LIMITED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018 103

Ora Toa PHO Limited Notes to the Financial Statements For the Year ended 30th June 2018

Carrying value of Financial Instruments $

Financial Assets Financial Liabilities TOTAL

Loans and Available for Liabilities (at amortised 2018 NOTE receivables sale cost)

Cash and cash equivalents 757,755 - - 757,755

Receivables 10 300,918 - - 300,918

Payables 11 - - (631,184) (631,184)

1,058,673 - (631,184) 427,490

Carrying value of Financial Instruments $

Financial Assets Financial Liabilities TOTAL

Loans and Available for Liabilities (at amortised 2017 NOTE receivables sale cost)

Cash and cash equivalents 396,341 - - 396,341

Receivables 10 222,163 - - 222,163

Payables 11 - - (465,720) (465,720)

618,504 - (465,720) 152,784 f. Revenue Non-exchange transactions are those where the company receives an inflow of resources but provides nominal; or no direct consideration in return for the inflow. Inflow of resources from non-exchange transactions are only recognised as assets where:

It is probable that the associated future economic benefit or service will flow to the entity and fair value can be reliably measured. Revenue from non-exchange transactions: Funding for Health Services Health Service contract funding is recognised when all obligations and restrictions surrounding the receipt of funding have been met and have been accepted as met, by the funding organisation. 2018 2017 Revenue from non-exchange $ $ transactions Trading revenue Services rendered Contract income 6,364,554 5,533,638 Total Trading revenue from non-exchange transactions 6,364,554 5,533,638

ORA TOA PHO LIMITED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018 104

Ora Toa PHO Limited Notes to the Financial Statements For the Year ended 30th June 2018

(i) Management Contract Income for the Management of the contracts is recognised when the service has been delivered, and the invoice is accepted by the customer, and the revenue can be measured reliably and the economic rewards will flow to the entity.

(ii) Government grants and other assistance

Government Grants that have restrictive conditions are recognised as income in the period it is received. Government Grants that are received as compensation for expenses or losses already incurred are recognised in the period in which they are received. Conditional grants and other government assistance is recognised when the conditions and obligations set out in the contract have been met and accepted.

(iii) Funding not yet distributed

Government funding, contract income or other assistance that is not distributed, but is related to specific contracts or conditions that surround the funding, contract income or other assistance is deferred to the period to when the conditions surrounding the funding has been met. Deferred income is shown as a liability in the Statement of Financial Position. g. Receivables Receivables are stated at their estimated realisable value. Bad debts are written off in the year in which they are identified. h. Payables Trade and other payables are recognised when the company becomes obliged to make future payments resulting from the purchase of goods and or services. i. Goods and Services Tax (GST) All amounts shown in these statements are shown exclusive of GST except for receivables and payables that are stated inclusive of GST. The net amount of GST recoverable from, or payable to Inland Revenue Department (IRD) is included as part of the receivables and payables in the Statement of Financial Position. j. Operating leases

Payments made under operating leases where the Lessor retains substantially the risk and rewards of ownership of an asset are recognised in surplus or deficit on a straight-line basis over the term of the lease. Lease incentives received are recognised as an integral part of the total lease expense, over the term of the lease.

ORA TOA PHO LIMITED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018 105

Ora Toa PHO Limited Notes to the Financial Statements For the Year ended 30th June 2018

5. Related Parties Te Runanga o Toa Rangatira Inc. is the ultimate controlling entity of Ora Toa PHO Limited and owns 100% of the shares in Ora Toa PHO Limited.

Ora Toa PHO Limited provides funding to the parent entity as a service provider. Ora Toa Health and Ora Toa Medical units are services provided by Te Runanga o Toa Rangatira Inc. and these units are recipients of contract income from Ora Toa PHO Limited.

Ora Toa PHO Limited pays administration fees, and reimburses staff wages and rent to Te Runanga o Toa Rangatira Inc. Administration costs paid to Te Runanga o Toa Rangatira Inc. for 2018 were $36,000 (2017: $30,647). Rent reimbursements for 2018 were $10,400 (2017: $9,600). Wage reimbursements were $182,649 (2017: $159,083). Directors fees were $NIL (2017: $1,700). Motor Vehicle expenses were $13,260 (2017: $12,240); Audit reimbursements for 2018 were $10,000 (2017:$10,097)

Ora Toa PHO Limited provides funding to the Health Units and Medical Centres amounting to $5,643,290 by way of funding to Te Runanga o Toa Rangatira. (2017: $5,262,869).

Inter entity Current Payables at 30 June 2018 are $621,331 (2017: $455,451), and inter entity receivables are NIL (2017: $NIL)

Other related parties are the Toa Rangatira Trust, Kapiti Tours Limited, Ika Toa Limited and Ngati Toa Limited. The Trust Group and all other entities are related to PHO as they are all 100% owned by TROTR. There were no transactions between the Trust or the other companies and Ora Toa PHO Limited during the year. a. Key Management Personnel Key management personnel of Ora Toa PHO Limited include the parent Board Members, the Directors of the Company and Senior Management. During the year there were no key management personnel compensation transactions made. (2017: NIL).

6. Securities and Guarantees There were no securities or guarantees granted by Ora Toa PHO Limited at 30 June 2018. (2017: NIL).

7. Commitments and Contingent Liabilities

There were no commitments other than those in the ordinary course of business. (2017: NIL).

At balance date there are no known contingent liabilities (2017:NIL). Ora Toa PHO Limited has not granted any securities in respect of liabilities payable by any other party whatsoever.

ORA TOA PHO LIMITED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018 106

Ora Toa PHO Limited Notes to the Financial Statements For the Year ended 30th June 2018

8. Significant Events after Balance Date There were no significant events after 30 June 2018 that require disclosure. (2017: NIL).

9. Property, Plant and Equipment Motor Office Plant and Vehicles Equipment Furniture TOTAL 2018 $ $ $ $ Gross carrying amount Balance 1 July 2017 23,111 10,951 11,690 45,752 Balance 30 June 2018 23,111 10,951 11,690 45,752

Accumulated depreciation and impairment Balance 1 July 2017 23,111 10,951 11,690 45,752 Balance 30 June 2018 23,111 10,951 11,690 45,752

Carryi ng amount 30 June 2018 - - - -

10. Trade and Other Receivables 2018 2017 $ $ Trade receivables - non-exchange transactions 300,918 222,163 Total Trade and Other Receivables 300,918 222,163

11. Trade and Other Payables 2018 2017 $ $ Trade creditors - exchange transactions 9,853 10,269 Accruals 11,000 15,594 Related party payables 621,331 455,451 Total Trade and Other Payables 642,184 481,314

12. Share Capital 2018 2017 $ $ Opening balance - - Closing balance - -

ORA TOA PHO LIMITED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018 107

Ika Toa Limited Company Directory As at 30th June 2018

Issued Capital 20,100 Ordinary Shares

Registered Office 26 Ngati Toa Street Porirua

Directors Tui Hammond Mark Styles Tahua Solomon Evan Morrison Kawharu Hippolite Rangihoungariri Solomon Margaret Hippolite

Company Number WN521364

Auditors BDO Wellington Audit Limited

Bankers Westpac Banking Corporation

Solicitors Kensington Swan

Date of Formation 21 October 1991

Nature of Business Fishing Quota Management

Business Location 26 Ngati Toa Street Porirua

Shareholders Te Runanga O Toa Rangatira Inc. 20,100 Ordinary Shares 20,100

IKA TOA LIMITED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018

109

Ika Toa Limited Directors Annual report For the Year ended 30th June 2018

The Directors present their Annual Report including Financial Statements of the company for the year ended 30th June 2018.

Reporting Entity The business of the company is Fishing Quota Management. The nature of the company's business has not changed during the year.

Auditors The company's Auditors were BDO Wellington Audit Limited. BDO Wellington Audit Limited is willing to continue as the company auditors. Fees payable to BDO Wellington Audit Limited for the 2018 audit are $13,000.

Directors' Disclosures There were no entries recorded in the Register of Interests. No Director acquired or disposed of any interest in shares in the company. Tui Hammond, Mark Styles, Tahua Solomon, Evan Hippolite, Rangihoungariri Solomon and Margaret Hippolite held office as Directors during the year. No other person was a Director at any time.

The Board of Directors received no notices from Directors wishing to use company information received in their capacity as Directors which would not have ordinarily been available.

Donations No donations were made by the company during the year. Employee and Director Remuneration

For and on behalf of the Board of Directors,

IKA TOA LIMITED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018

110

INDEPENDENT AUDITOR’S REPORT TO THE SHAREHOLDERS OF IKA TOA LIMITED

Opinion

We have audited the financial statements of Ika Toa Limited (“the Company”), which comprise the statement of financial position as at 30 June 2018, and the statement of comprehensive revenue and expense, statement of changes in net assets and cash flow statement for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.

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 Financial Statements section of our report. We are independent of the Company 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 Company.

Board’s Responsibilities for the Financial Statements

The Board is responsible on behalf of the Company for the preparation and fair presentation of the financial statements in accordance with PBE Standards RDR, and for such internal control as the Board determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibilities for the Audit of the Financial Statements

111

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 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 Company’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 Company’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 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 Company to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the 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 Company to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of the Company audit. We remain solely responsible for our audit opinion.

Who we Report to

BDO Wellington Audit Limited Wellington New Zealand 31 October 2018

112

Ika Toa Limited Statement of Comprehensive Revenue and Expense For the Year Ended 30th June 2018

NOTE 2018 2017 $ $ Revenue Sale of annual catch entitlement 4b 674,702 641,746 Less cost of sales 17 (262,596 (422,805 Gross surplus from trading 412,106 218,941

Other income Interest received 4b 138,927 95,672 Dividends 4b 71,744 61,184 Port Nicholson Partnership (profit share) 4b 92,290 93,206 Total Other Income 302,961 250,062 Total Income 715,067 469,003

Less expenses Administrationfees (49,200 (49,200 Accountancy fees (6,725 (5,526 Audit fees (13,000 (11,100 Bad debts writtenoff (2,848 - Bank charges (170 (158 Consultants fees (2,725 - General expenses - (9,752 Interest expense (1 - Legal fees (1,320 - Customary fishing vehicle and boat expenses (2,787 (3,301 Rates (736 (1,484 Travel costs (932 (414 Valuation fees - (4,250 Total Expenses (80,444) (85,186)

Net surplus before depreciation 634,623 383,817

Less depreciation Depreciation 14 (4,008 (4,669 Total depreciation (4,008) (4,669)

Surplus for the year before income tax 630,615 379,148

Taxation provision 10 - -

Net surplus for the year after income tax 630,615 379,148

IKA TOA LIMITED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018 113

Ika Toa Limited Statement of Comprehensive Revenue and Expense For the Year Ended 30th June 2018

NOTE 2018 2017 $ $

Other comprehensive revenue and expense Gain/(loss) on revaluation of quota shares 13 540,517 586,175 Gain/(loss) on revaluation of Assets 14 - 5,904 540,517 592,079 Total comprehensive revenue and expense for the year net of tax attributable to the equity holders 1,171,132 971,227

IKA TOA LIMITED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018 114

Ika Toa Limited Statement of Financial Position As at 30th June 2018

NOTE 2018 2017 $ $ Assets Current Assets Cash and cash equivalents 18 164,817 304,477 Short term investments 21 3,123,259 3,759,856 Trade and other receivables 12 138,791 216,155 GST refund due 26,728 42,551 Income tax receivable 10 12,560 24,919 Total Current Assets 3,466,155 4,347,958

Non Current Assets Long term deposits 22 1,336,666 - Property plant and equipment 14 271,719 275,727 Share investments 20 2,366,678 2,366,678 Intangible Assets 13 8,797,863 8,257,346 Total Non Current Assets 12,772,926 10,899,751

Total Assets 16,239,081 15,247,710

Liabilities Current Liabilites Trade and other payables 11 19,231 18,750 Related party payables 6 204,408 384,650 Total Current Liabilities 223,639 403,400

Total liabilities 223,639 403,400

Net Assets 16,015,442 14,844,310

Equity Capital contributed 15 20,100 20,100 Reserves 16 12,461,111 11,920,594 Retained earnings 3,534,231 2,903,616 Total Equity 16,015,442 14,844,310

Date:

IKA TOA LIMITED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018 115

Ika Toa Limited Statement of Cash Flows For the Year ended 30th June 2018

NOTE 2018 2017 $ $ Cash flows from operating activities Proceeds have come from: Trading income 761,635 792,133 Interest received 116,318 95,672 Dividends 71,744 61,184 GST refunds/(payments) 26,970 4,387 Income tax refunds/(credits received) 12,359 (10,707) Payments made to suppliers and others (428,617) (214,283) Net cash inflow/(outflow) from operating activities 560,409 728,386

Cash flows from investing activities Payments made to invest funds in term investment activities (700,069) (2,723,909) Net cash inflow/(outflow) from investing activities (700,069) (2,723,909)

Net cash inflow/(outflow) from all activity (139,660) (1,995,523)

Cash and cash equivalents at the beginning of the year 18 304,477 2,300,000 Cash and cash equivalents at the end of the year 18 164,817 304,477

IKA TOA LIMITED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018 116

Ika Toa Limited Statement of Changes in Equity For the Year ended 30th June 2018 Quota Fisheries Revaluation Redress Revaluation Retained 2018 Share Capital Reserve Reserve Reserve Earnings Total $ $ $ $ $ $ Balance as at 1 July 2017 20,100 4,218,308 7,519,866 182,420 2,903,616 14,844,310

Surplus for the year - - - - 630,615 630,615 Other comprehensive income - 540,517 - - - 540,517 Other movements in reserves ------Balance at 30 June 2018 20,100 4,758,825 7,519,866 182,420 3,534,231 16,015,442 NOTE 15 16 16 16

2017 Balance as at 1 June 2016 20,100 3,632,133 7,519,866 176,516 2,524,468 13,873,083

Surplus for the year - - - - 379,148 379,148 Other comprehensive income - 586,175 - 5,904 - 592,079

117 Other movements in reserves ------Balance at 30 June 2017 20,100 4,218,308 7,519,866 182,420 2,903,616 14,844,310 NOTE 15 16 16 16

IKA TOA LIMITED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018

Ika Toa Limited Notes to the Financial Statements For the Year ended 30th June 2018

1. Statement of Compliance These are the financial statements of Ika Toa Limited ('the company'). Ika Toa Limited is a public benefit entity incorporated in New Zealand registered under the Companies Act 1993.

The Company is a Tier 2 reporting entity for the purpose of the Financial Reporting Act 2013 due to the size of its parent and its financial Statements comply with that Act.

The Principal business operation of Ika Toa Limited is the management of Fishing Quota assets and sale of Annual Catch entitlement, of owned and leased quota on behalf of Te Runanga o Toa Rangatira Inc.

The company received fishing quota share and cash assets to be held in trust, in accordance with the Maori Fisheries Act 2004 in 2010. Ika Toa Limited (asset holding company) for Ngati Toa fisheries assets received coast line derived settlement quota shares under section 135 of the Maori Fisheries Act 2004 on the 29 th October and the 19th December 2014 respectively. The value of the quota shares on those dates has been recognised as revenue income in the statement of comprehensive income and has been transferred from retained earnings to a fisheries reserve in the Statement of Changes in Equity.

These financial statements for Ika Toa Limited as at 30th June 2018 are prepared in accordance with New Zealand Generally Accepted Accounting Practice (NZ GAAP). They comply with Public Benefit Entity International Public Sector Accounting Standards (‘PBE IPSAS’) as appropriate for Tier 2 not-for-profit public benefit entities for which all reduced disclosure regime exemptions have been adopted.

The company qualifies for Tier 3 reporting as it does not have public accountability as it does not have expenses more than or equal to $2 million. Ika Toa Limited has elected to report as a Tier 2 entity and has used policies consistent with the controlling entity, Te Runanga o Toa Rangatira Inc. (TROTR).

The Financial Statements were presented and authorised for issue by the Directors on 31st October 2018.

2. Basis of Preparation a. Statement of Compliance The financial statements of Ika Toa Limited have been prepared on an historical cost basis. The information is presented in New Zealand dollars (NZD) rounded to the nearest dollar.

Accounting policies are selected and applied in a manner which ensures that the resulting financial information satisfies the concepts of relevance and reliability thereby ensuring the substance of the underlying transaction or other events is reported.

IKA TOA LIMITED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018 118

Ika Toa Limited Notes to the Financial Statements For the Year ended 30th June 2018

3. Changes in Accounting Policies There have been no changes in accounting policies during the year. All accounting policies for the year are consistently applied.

4. Summary of Significant Accounting Policies a. Income Tax The company was granted Charitable Status on 31st December 2011 and as such the company is exempt from income tax.

b. Revenue Recognition Exchange Transactions (i) Sale of goods Quota trading income is recognised when cash is received or is receivable when the Annual Catch Entitlement for a particular fish stock is deemed to have been transferred to the customer.

Ika Toa also leases Annual Catch Entitlements for trading. The lease is for the twelve month period and is aligned with the applicable fishing year for the species. Income is recognised when the Annual Catch Entitlements are transferred to the customer.

Any Annual Catch Entitlement leased or owned and not sold, at 30 June has been determined by the directors to have a Nil value at the end of the financial year as unsold ACE expires, unless an arrangement to sell after balance date is known.

2018 2017 Revenue from exchange transactions $ $ Sale of Goods Annual Catch Entitlement sale 674,702 641,746 Total Trading revenue from exchange transactions 674,702 641,746

(ii) Interest and dividend income Interest income is recognised using the effective interest method. Dividends are recognised as revenue when the right to receive payment is established.

The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating the interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset or, where appropriate, a shorter period to the net carrying amount of the asset.

(iii) Port Nicholson Partnership (Profit Share) income

Port Nicholson Partnership income is recognised when certain, being upon notification of the profit share.

IKA TOA LIMITED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018 119

Ika Toa Limited Notes to the Financial Statements For the Year ended 30th June 2018

2018 2017 $ $ Other Income from exchange transactions Interest income 138,927 95,672 Dividends received 71,744 61,184 Port Nicholson Partnership (Profit Share) 92,290 93,206 Other Income from exchange transactions 302,961 250,062

Non-exchange transactions (iv) Redress income

Non-exchange transactions are those where the company receives an inflow of resources (cash or assets) but provides no direct consideration in return for the inflow. Inflows of resource are only recognised as assets where both it is probable that the associated future economic benefit will flow to the entity and fair value can be reliably measured.

Income received from settlement assets is recognised on the date that the settlement assets transfer to the control of the company and all rights and obligations associated with the assets are released from the Crown agency.

c. Financial Instruments The entity initially recognises financial instruments when the entity becomes a party to the contractual provisions of the instrument.

The entity derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in transferred financial assets that is created or retained by the entity is recognised as a separate asset or liability.

The entity derecognises a financial liability when its contractual obligations are discharged, cancelled or expire.

The entity also derecognises financial assets and financial liabilities when there have been significant changes to the terms and/or the amount of the contractual payments to be received and or paid.

Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when the entity has a legal right to offset the amount and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

IKA TOA LIMITED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018 120

Ika Toa Limited Notes to the Financial Statements For the Year ended 30th June 2018

The entity classifies the financial assets into the following categories: loans and receivables and available for sale. The entity classifies financial liabilities into the following categories: amortised cost. (i) Loans and Receivables Loans and receivables financial assets with fixed or determinable payments that are not quoted in an active market.

Loans and receivables subsequently measured at amortised cost using the effective interest method, less any impairment losses. Loans and receivables comprise: The entity’s cash and cash equivalents, trade and other receivables.

(ii) Available-For-Sale Financial Assets Available-for-sale financial assets are non-derivative financial assets that are either designated to this category or do not qualify for inclusion in any of the other categories of financial assets. Available-for-sale financial assets include: · Aotearoa Fisheries Limited Income shares

Financial liabilities classified as amortised cost are subsequently measured at amortised cost using the effective interest method.

Financial liabilities classified as amortised cost include cash and cash equivalents (bank overdrafts), trade and other payables. (iv) Impairment of non-derivative financial assets

IKA TOA LIMITED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018 121

Ika Toa Limited Notes to the Financial Statements For the Year ended 30th June 2018

Objective evidence that financial assets are impaired includes default or delinquency by a counterparty, restructuring of an amount due to the entity on terms that the entity would not consider otherwise, indications that a counterparty or issuer will enter bankruptcy, adverse changes in the payment status of borrowers or issuers in the entity, economic conditions that correlate with defaults or the disappearance of an active market for a security. In addition, for an equity security classified as an available-for-sale financial asset, a significant or prolonged decline in its fair value below its cost is objective evidence of impairment.

The table below shows the carrying value of the company’s financial assets and financial liabilities.

Carrying value of Financial Instruments $

Financial Assets Financial Liabilities TOTAL

Loans and Available for Liabilities (at 2018 NOTE receivables sale amortised cost)

Cash and cash equivalents 19 164,817 - - 164,817

Short Term Deposits 22 3,123,259 - - 3,123,259

Receivables 12 138,791 - - 138,791

Other Financial assets 21 - 2,366,678 - 2,366,678

Payables 15 - - (208,639) (208,639)

3,426,867 2,366,678 (208,639) 5,584,907 Carrying value of Financial Instruments $

Financial Assets Financial Liabilities TOTAL

Loans and Available for Liabilities (at 2017 NOTE receivables sale amortised cost)

Cash and cash equivalents 19 304,477 - - 304,477

Short Term Deposits 22 3,759,856 - - 3,759,856

Receivables 12 216,155 - - 216,155

Other Financial assets 21 - 2,366,678 - 2,366,678

Payables 15 - - (384,650) (384,650)

4,280,488 2,366,678 (384,650) 6,262,516

IKA TOA LIMITED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018 122

Ika Toa Limited Notes to the Financial Statements For the Year ended 30th June 2018 d. Property, Plant & Equipment All property, plant & equipment, with the exception of land and buildings, are carried at cost less depreciation and any impairment losses

Cost includes all expenditure that is directly attributable to the acquisition of the item. In the event that settlement of all or part of the purchase consideration is deferred, cost is determined by discounting the amounts payable in the future to their present value as at the date of acquisition. Subsequent costs are capitalised if it is possible that future economic benefits will flow to the entity and the costs can be measured reliably. All maintenance costs are recognised as an expense.

Land and buildings are carried at the revalued amount. The last valuation was carried out by an independent registered valuer in June 2017. The value was assessed at estimated market value taking into consideration the specific conditions related to the area and land. Valuations are carried out each five years or where there is an indication that the carrying amount may be materially different from the fair value of the property. Fair value was determined by the valuer as $243,704 (Land and Building).

Buildings (less than 50 years useful life) 3.0%-7.0% DV Trailer and Accessories 14.4%-43.0% DV Marine Farming Assets 24.0% DV Marine Farm Resource Consent 20 Years SL e. Leased Quota Operating lease payments are recognised as an expense on a straight line basis over the lease term, except where another systematic basis is more representative of the time pattern over which the economic benefits from the lease asset are consumed.

f. Impairment of Non-Financial Assets At each reporting date the company reviews the carrying amount of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

IKA TOA LIMITED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018 123

Ika Toa Limited Notes to the Financial Statements For the Year ended 30th June 2018

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects the current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have been not been adjusted. If the recoverable amount of an asset (or cash generating unit) is estimated to be less than the carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised in profit or loss immediately, unless the relevant asset is carried at fair value, in which case the impairment loss is treated as a revaluation decrease.

When an impairment loss subsequently reverses, the carrying amount of the asset (or cash generating unit) is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset. (or cash generating unit) in prior years. A reversal of impairment loss is recognised in profit or loss immediately, unless the relevant asset is carried at fair value in which case the reversal of the impairment loss is treated as a revaluation increase.

The company has only one cash generating unit because it only has one operating activity of trading annual catch entitlements from quota share.

Following initial recognition at cost, land and buildings are carried at re-valued amounts which is the fair value at valuation date, less any accumulated impairment losses.

g. Loans and Borrowings (i) Interest and dividends Interest and dividends are classified as expenses or as distributions of profit consistent with the Statement of financial position classification of the related debt or equityinstrument. (ii) Borrowings Borrowings are recorded initially at fair value less transaction costs.

Subsequent to initial recognition, borrowings are measured at amortised cost with any difference between the initial recognised amount and the redemption value being recognised in profit or loss over the period of the borrowing using the effective interest method. The effective interest rate is the rate that exactly discounts the estimated future cash payments through the expected life of the borrowings or where appropriate a shorter period, to the net carrying amount of the borrowings.

IKA TOA LIMITED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018 124

Ika Toa Limited Notes to the Financial Statements For the Year ended 30th June 2018 h. Payables Trade payables and other accounts payable are recognised when the company becomes obliged to make future payments resulting from the purchase of goods and services. i. Intangible assets Quota shares are recorded initially at cost. Settlement quota shares are recorded at a value determined by the settlement documentation. All quota shares are subsequently revalued to fair value. Any gains on revaluation are recognised directly in other comprehensive revenue and expense.

Fair value is determined as the latest valuation less any impairment cost. Valuations are undertaken on a regular basis to ensure the carrying amount does not differ materially from the fair value of the shares.

Impairment losses are recognised whenever the carrying amount of an asset exceeds its recoverable amount. Quota shares are tested for impairment whenever there is an indication of impairment on an individual basis or at a cash-generating unit level. There is only one cash generating unit in Ika Toa Limited because there is only one core business activity and that is trading of annual catch entitlement from the quota share. j. Coastal Permit (Marine Farm Consent)

The Marine farm consent has been recognised as Plant, Property and Equipment with a lifespan of 20 years. The Marine farm is not operational without the consent and it is therefore considered part of that asset. The consent is amortised over its estimated useful life. The Marine farm asset is carried at cost less any accumulated depreciation or and or impairment. Impairment is tested when there is an indication of an impairment. k. Cash and cash equivalents Cash and cash equivalents consist of short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Bank overdrafts are shown on the balance sheet as current liabilities within short term borrowings. l. Goods and Services Tax (GST) All amounts shown in these statements are shown exclusive of GST except for receivables and payables that are stated inclusive of GST.

5. Contingent Assets and Liabilities a. Contingent Assets At balance date there are no known contingent assets. b. Contingent Liabilities At balance date there are no known contingent liabilities. Ika Toa Limited has not granted any securities in respect of liabilities payable by any other party whatsoever. (2017: NIL).

IKA TOA LIMITED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018 125

Ika Toa Limited Notes to the Financial Statements For the Year ended 30th June 2018

6. Related Parties Te Runanga o Toa Rangatira Inc. is the controlling entity and holds 100% of the 20,100 shares in Ika Toa Limited. Ika Toa Limited holds on trust the quota shares and Income shares received from the Fisheries Settlement. The company manages the trading of Annual Catch Entitlements from quota held and leased. Ika Toa receives a management fee from trading the Annual Catch Entitlement from the leased fishing quota on behalf of Te Runanga o Toa Rangatira Inc.

Ika Toa Limited reimburses Te Runanga o Toa Rangatira Inc. for all administrative costs provided to the company. The company paid administration costs of $53,700 (2017: $54,726) Audit reimbursements for 2018 were $13,000 (2017: $11,100) and the ACE commission of $169,146 (2017: $330,377) exclusive of GST. At June $204,408 is payable to Te Runanga o Toa Rangatira (2017: $384,650)

2018 2017 $ $ Te Runanga o Toa Rangatira Inc. – Payables Opening balance 384,650 98,660 Goods and services 271,294 436,514 Less Payments made (451,536) (150,524) Total inter group payables 204,408 384,650

Ngati Toa Limited, Kapiti Tours Limited and Ora Toa PHO Limited are 100% owned by Te Runanga O Toa Rangatira. There were no transactions between Ika Toa Limited and these related companies during this year. Toa Rangatira Trust, a Trust formed in December 2012 to hold the Ngati Toa Rangatira historical settlement assets is a related party. The Trust Group and all other entities are related to Ika Toa Limited as they are all 100% owned by TROTR. There were no transactions between Ika Toa Limited and Toa Rangatira Trust this year. a. Key Management Personnel Key management personnel of Ika Toa Limited includes the parent entity Board members and the Directors of the company. The directors receive Directors fees of $250 per meeting, There were no meetings attended during the year. Directors fees paid for 2018 were NIL (2017: $NIL).

Ika Toa Limited has engaged Okiwi Bay Aquaculture Limited (OBAL) to manage the Company's Marine Farm assets. A Director and shareholder of OBAL is a Director of Ika Toa Limited. OBAL manages the conditioning of immature oysters on the company's marine farm structures and the company (ITL) is paid a commission based on the volume of mature oysters prepared for sale. Okiwi Bay Aquaculture made payments to Ika Toa Limited amounting to NIL for the 2018 financial year (2017: $NIL). Ika Toa Limited paid directors fees to Okiwi Bay Aquaculture Limited amounting to $NIL for 2018 (2017: $NIL).

7. Securities and Guarantees There is no overdraft facility or guarantees held for Ika Toa Limited.

8 Significant Events After Balance Date There have been no significant events after balance date.

IKA TOA LIMITED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018 126

Ika Toa Limited Notes to the Financial Statements For the Year ended 30th June 2018

9. Commitments There is a commitment to Port Nicholson Fisheries Partnership to supply the Annual Catch Entitlement for Crayfish, and to Aotearoa Fisheries Limited to supply the Annual catch Entitlement for a number of Species including Orange Roughy, both supplies are at the applicable market value for a five year period ending in 2019.

There were no commitments other than those in the ordinary course of business at 30 June 2018 (2017: nil)

10. Income Tax 2018 2017 $ $ Income tax recognised in surplus - - Taxable earnings - -

Current tax expense - - Maori authority tax credits available previous years (24,919) (14,212) Maori authority tax credits available this year (12,555) (10,707) Tax refunds received 24,914 - Total Tax Payable (Refund Due) (12,560) (24,919)

The company holds on trust, the fisheries redress assets for the members of Te Runanga o Toa Rangatira Inc. and Charitable Status was granted in December 2011.

11. Trade and Other Payables

2018 2017 $ $ Trade and Other Payables 4,231 - Accruals 15,000 18,750 Total Trade and Other Payables 19,231 18,750

12. Accounts and Other Receivables

2018 2017 $ $ Trade receivables - from exchange transactions 85,174 185,147 Accrued interest 53,617 31,008 Total Accounts and Other Receivables 138,791 216,155

IKA TOA LIMITED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018 127

Ika Toa Limited Notes to the Financial Statements For the Year ended 30th June 2018

13. Intangible Asset - Quota Shares

2018 2017 $ $ Opening balance 8,257,346 7,671,171 Gain in fair value on revaluation 540,517 586,175 Closing Balance 8,797,863 8,257,346

14. Property, Plant, and Equipment

Buildings - Land - Te Marine Tractor and Te Awaiti TOTAL Awaiti Bay farm trailer Bay

2018 $ $ $ $ $ Gross carrying amount Balance 1 July 2017 220,000 30,704 157,615 42,990 451,309 Balance 30 June 2018 220,000 30,704 157,615 42,990 451,309

Accumulated depreciation and impairment Balance 1 July 2017 - 6,998 130,624 37,960 175,582 Current year depreciation - 711 2,068 1,229 4,008 Balance 30 June 2018 - 7,709 132,692 39,189 179,590

Carrying amount 30 June 2018 220,000 22,995 24,923 3,801 271,719

Buildings - Land - Te Marine Tractor and Te Awaiti TOTAL Awaiti Bay farm trailer Bay

2017 $ $ $ $ $ Gross carrying amount Balance 1 July 2016 196,000 48,800 157,615 42,990 445,405 Revaluation 24,000 (18,096) - - 5,904 Balance 30 June 2017 220,000 30,704 157,615 42,990 451,309

Accumulated depreciation and impairment Balance 1 July 2016 - 5,704 128,557 36,652 170,913 Current year depreciation - 1,294 2,067 1,308 4,669 Balance 30 June 2017 - 6,998 130,624 37,960 175,582

Carrying amount 30 June 2017 220,000 23,706 26,991 5,030 275,727

IKA TOA LIMITED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018 128

Ika Toa Limited Notes to the Financial Statements For the Year ended 30th June 2018

The land and buildings at Te Awaiti Bay were last revalued in June 2017 and are assessed for indicators of impairment annually. There was no indication the land and buildings were impaired in 2018, other than the movements on revaluation.

15. Share Capital 2018 2017 $ $ Opening balance 20,100 20,100 Closing balance 20,100 20,100

There were 20,100 fully paid up shares with a par value of $1 each at Balance Date. The Company's shares are held by the Parent. The shares are eligible to receive dividends and the repayment of capital, and represent one vote at the shareholders meeting. 16. Other Equity Reserves 2018 2017 Asset Revaluation Reserve $ $ Opening balance 182,420 176,516 Movements during the year - 5,904 Closing balance of asset revaluation reserve 182,420 182,420

The asset revaluation reserve is used to record increases and decreases in the fair value of Land and Buildings only to the extent that they offset each other. The reserve cannot fall into deficit. Land and Buildings are revalued on a five yearly basis or where there is an indication that the carrying amount may be materially different from the fair value of the property. The Valuation was carried out by Alex Hayward, Property Advisers, a Registered Valuer, and his report was dated 30 June 2017.

2018 2017 Fisheries Redress Reserve $ $ Opening balance 7,519,866 7,519,866 Movements during the year - - Closing balance of asset revaluation reserve 7,519,866 7,519,866

The Fisheries Redress reserve records the fisheries settlement Ika Toa Limited received as the Asset Holding Company in March 2010. Further quota shares were received under section 135 of the Maori Fisheries Act 2004 in October 2014 and December 2014 respectively.

2018 2017 Quota revaluation reserve $ $ Opening balance 4,218,308 3,632,133 Movements during the year 540,517 586,175 Closing balance of asset revaluation reserve 4,758,825 4,218,308

IKA TOA LIMITED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018 129

Ika Toa Limited Notes to the Financial Statements For the Year ended 30th June 2018

17. Quota Cost of Sales 2018 2017 $ $ ACE lease commission 169,146 330,337 ACE operating lease fees 42,945 36,309 FishServe and MAF fees 50,504 56,158 Quota Cost of sales 262,596 422,805

18. Cash and Cash Equivalents 2018 2017 $ $ Cash at bank 164,817 304,477 Total cash and cash equivalents 164,817 304,477

IKA TOA LIMITED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018 130

Ika Toa Limited Notes to the Financial Statements For the Year ended 30th June 2018

19. Impairment of Assets

$ $ Marine farm baskets and structures Opening balance 42,553 42,553 Closing balance 42,553 42,553

Management have assessed the Marine Farm assets for impairment and have determined that the baskets and structures would have a recoverable value of $NIL. The impairment as at June 2018 represents the carrying value of the baskets and structures prior to the impairment assessment. The resource consent has a carrying value of $25,282.

20. Investments

The company holds 1532 shares in Aotearoa Fisheries Limited (AFL) (2017: 1532 shares). Management has reviewed the shares for impairment by reviewing the net assets of Aotearoa Fisheries Limited. AFL is not currently listed on the New Zealand stock exchange and there are legislative restrictions on the sale of shares in Aotearoa Fisheries Limited. The management has assessed the value of the shares by comparing the Net value in the company against the original transfer value. As the Net Value of the companies share is greater than the original transfer value the management has determined that no indication of impairment exists.

For 30 June 2018, the AFL shares were reassessed for signs of impairment. It was identified that there was no decrease in value.

21. Short Term Investments Short term investments consist of deposits with maturities due over 90 days from balance date and mature within 12 months of balance date. Short term investments earn interest income at various rates aligned to the term of the deposit.

22. Long Term Deposits Long term deposits consist of deposits with maturities greater than 12 months from balance date. Long term deposits earn interest income at various rates aligned to the term of the deposit.

IKA TOA LIMITED FINANCIAL STATEMENTS AND ANNUAL REPORT 2018 131

Ngāti Toa Group - NET Worth Post Settlement 2018 2017 2016 2015 2014

Current Assets 83,004,730 66,498,075 78,424,721 105,311,067 100,256,294 Fixed Assets 17,661,547 17,461,054 13,763,092 12,044,375 11,943,766 Investments 101,066,719 101,256,339 83,876,941 39,221,595 28,270,018 TOTAL Assets 201,732,996 185,215,468 176,064,754 156,577,037 140,470,078 Short Term Liabilites 2,179,108 1,714,141 2,178,280 1,878,430 1,642,036 Long Term Liabilities - - - - - TOTAL LIABILITIES 2,179,108 1,714,141 2,178,280 1,878,430 1,642,036 NET WORTH 199,553,888 183,501,327 173,886,474 154,698,607 138,828,042 Annual GROWTH 7.37% 5.69% 12.40% 11.43%

Group Performance at a Glance 2018 2017 2016 2015 2014 Net operating surplus after income tax 6,325,839 5,309,028 4,521,022 4,881,248 902,019 Add Crown Settlements 4,854,122 - 3,296,870 5,700,683 90,069,559 Add Gains from Revaluation of Income generating assets 4,872,599 4,305,826 11,369,974 4,706,658 - Profit attributable to Te Runanga o Toa Rangatira 16,052,560 Group 9,614,854 19,187,866 15,288,589 90,971,578

2018 2017 2016 2015 Operating return on Equity 3.17% 2.89% 2.60% 3.16% Members Return on Equity 8.04% 5.24% 11.03% 9.88%

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134 Grants and Distributions 2018 $184,541

135 Grants and Distributions 2018 $184,541

136 Grants and Distributions 2018 $184,541

137

Te Runanga O Toa Rangatira Incorporated Group Consolidated Statement of Comprehensive Revenue and Expense For the Year Ended 30th June 2018

2018 2017 The section shows the funding streams $ $ coming from MOH, CCBHB and MOE less service delivery costs excluding Health, medical and other social services income payroll. The Puna reo and education 10,216,900 8,589,700 contract programmes are included Direct service delivery costs (1,336,907) (1,242,781) here. Surplus from delivery of social services 8,879,993 7,346,919

The trading revenue includes Trading income 2,469,811 12,595,792 income from annual catch, holiday Direct trading expenses (162,153) (9,714,895) park and patient fees less costs of Surplus from trading activities carrying on these activities. 2,307,658 2,880,897

Other income Other income is derived from long term assets. These assets are revalued Gain on revaluation of investment land 3,325,980 2,783,295 each year to their fair value, gains are Writeback of depreciation on revalution - 194,312 recognised in income and are Gain on sale of fixed assets 8,932 173 unrealised until sold.) Gain on sale of NZ Forestry Units 426,000 Other income This includes forestry Licence fee and 3,891,689 3,532,601 other rental income from properties. Fisheries and historical redress 4,854,122 - Total revenue from operations 23,694,374 16,738,197

This was the Tasman bay aquaculutre Less operating expenses settlement received in cash. Administration expense (220,532) (518,082) Depreciation, amortisation and impairment expense (686,883) (585,212) Education, sports and marae distributions (184,541) (117,748) These costs represent all Lease operating costs (110,256) (65,260) overhead costs for all Motor vehicle expense (236,494) (254,575) classes (cost type) and are a result of carrying on all Other expenses (948,530) (599,608) our services whether Personnel expenses (8,535,045) (7,797,270) social or commerical. 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 (12,181,354) (11,406,708)

Surplus before net interest income 11,513,020 5,331,489

This income is the amount received Gain/(loss) on revaluation of financial portfolio 1,870,991 1,347,940 from investment income. All forms Interest income 0 2,081,951 2,388,710 whether term deposit or ANZ Less Interest expense (2,720) (852) portfolio 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

138

Te Runanga O Toa Rangatira Incorporated Group Consolidated Statement of Comprehensive Revenue and Expense For the Year Ended 30th June 2018

Other comprehensive revenue and expense This income represents the fair Gain/(Loss) on revalution of property, plant and equipment - 1,228,042 value gain at balance date on NZ Gain/(Loss) on revaluation of intangible assets 1,120,619 294,489 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

139 Te Runanga O Toa Rangatira Incorporated Group Consolidated Statement of Financial Position As at 30th June 2018

NOTE 2018 2017 $ $ Assets Current Assets These are short term Cash and cash equivalents deposits less than 12 mths 10,186,106 11,067,320 Short term investments 68,497,394 52,686,209 Accounts and other receivables 3,963,706 2,715,266 These are all liquid assets Prepayments and other assets 42,118 29,280 easily converted to cash. Income tax receivable 315,448 - Total Current Assets 83,004,772 66,498,075

Anz Portfolio, long term Non Current Assets investment Long term deposits 1,422,886 6,943,688 Managed funds 22,953,195 21,322,329 Property we earn rental and licence fee income from. Property plant and equipment 17,661,547 17,461,054 Investment property 51,796,004 46,067,098 NZ units and Quota share Intangible assets 12,392,421 15,985,794 assets, Share investments 2,366,678 2,366,678 Investment in joint venture 10,135,493 8,570,752 Aotearoa shares, we Total Non Current Assets 118,728,224 118,717,393 receive annual dividend income Total Assets 201,732,996 185,215,468

Kenepuru Landings Liabilities investment share (50%) Current Liabilities Trade and other payables 773,164 910,912

General liabilites due within Deferred Income - 4,855 12 months. Rent received in advance 707,390 254,812 Employee benefit liability 698,554 528,477 Income tax - 15,085 Total Current Liabilities 2,179,108 1,714,141

Total liabilities 2,179,108 1,714,141

Net Assets 199,553,888 183,501,327

140