2016

Annual Report

D I R E C T O R Y

TRUSTEES Jackie Aratema (Chairman)

Huimai Makela Gloria Koia

Airini Hepi Te Wano Walters (resigned July 2016) TRAINEE TRUSTEES Kyle Amopiu Briar Ensor

SECRETARY Murray Patchell

FARM SUPERVISOR Perrin Ag Consultants

ACCOUNTANTS Deloitte, Rotorua

AUDITORS Iles Casey

SOLICITORS O’Sullivan Clemens

BANKERS Westpac

REGISTERED OFFICE Deloitte Chartered Accountants

2/1176 Amohau Street ROTORUA

PO Box 12003 ROTORUA

Phone (07) 343 1050 Fax (07) 343 1051 Email nzrotoruaenquiries@deloitte.co.nz

WEBSITE www.rotorua.deloitte.co.nz

Page 1

C O N T E N T S

PAGE 1. Directory

2. Contents

3. Agenda

4. Minutes of AGM dated 28 November 2015

7. Chairman’s Report

9. Farm Report

15. Perrin Ag Consultants Scholarship

16. Audit Report

17. Financial Summary

24. Education Grant Policy 25. Education Grants Report

27. Review of 2016 Grant

28. Owners Grant Analysis

29. Owners Grant Policy

30. Kotahitanga Strategy

34. Maori Land Court Successions

Page 2

The 34th Annual General Meeting held at Whakaaratamaiti Marae, Domain Road,

Putaruru

on

Saturday 10th December 2016 at 10 am.

AGENDA 1. Apologies.

2. Minutes.

3. Annual Reports.

4. Appointment of Auditor.

5. Distributions.

6. Trust Structure Proposal.

7. Election of Two Trustees.

8. General Business.

9. Lunch.

Jackie Aratema Chairman

Page 3

KOKAKO TRUST MINUTES OF THE 33RD ANNUAL GENERAL MEETING OF

OWNERS HELD AT TARUKENGA MARAE ON SATURDAY 28TH NOVEMBER 2015 AT 10.00AM.

CHAIRMAN: Te Wano Walters. SECRETARY: Murray Patchell. ATTENDANCE: 55. APOLOGIES: 20. (David Thompson/Sonja Cooper) Carried

MIHI & KARAKIA: Fred Haumaha. MINUTES: Of the previous AGM held on 29 November 2014 were taken

as read and confirmed. (Gloria Koia/Te Wano Walters) Carried

CHAIRMAN’S REPORT: Te Wano Walters tabled and read his report. RESOLVED: “That the Chairman’s report be received.” (Te Wano Walters/David Thompson) Carried FARM REPORT: Trudy Laan tabled and read her farm report. RESOLVED: “That the farm report be received.” (Albert Ihaka/David Thompson) Carried Matters arising: 1. Albert Ihaka queried what were the prospects going

forward through to 5 years and was there a strategic plan. Trudy responded the budgets were continually reviewed and strategies employed to get the best out of farming operations. Gloria Koia added the trustees were always looking to improve standards and diversify operations.

Geoff Rice acknowledged the trustees work in turning

things around in the difficult industry. He queried the Fonterra support loan. Trudy advised this money will be put to one side and earn interest. It is not actually required in the farm operations, but it will be uplifted as it is interest free. Geoff queried further if the trustees

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were looking at options going forward. Chairman responded that the trustees are working on those strategies and the Trust was lucky to have a very strong team in place. An owner queried if the trustees would look at forestry options and when will the strategic plans be shared. Gloria Koia said the trustees welcome input from the owners into the strategy and direction. The strategic plan had been tabled previously but will be picked up again by the trustees. Trudy Laan added that areas suitable for forestry or manuka were being looked at but forestry is capital intensive with a long time for pay back. Gloria Koia said there were a lot of factors that need to be taken into account. Albert Ihaka suggested the strategic plan should be provided on what the trustees are doing with their future planning. Kimi Matthews asked what the trustees’ plans were going forward. Jackie Aratema advised the trustees were looking at the strategic plan and will provide this in due course. David Thompson congratulated the trustees on behalf of Ngatira Trust on another successful year. He queried if there were any development plans for Ngatira block. Chairman advised the Trust is keen to help other land blocks and would be happy to talk further with Ngatira. Emily Rota-Bidois said she was Muslim and there may be kaupapa coming through from the Muslim community which will be referred through to the Secretary.

FINANCIAL REPORT: Murray Patchell tabled the summary of financial results for

the year ended 30 June 2015 and copies of the audited financial statements were available for owners that required these.

RESOLVED: “That the financial report be received.” (Geoff Rice/Albert Ihaka) Carried

Matters arising: 1. Geoff Rice thanked the trustees for a good report,

considering the difficult circumstances. He sought clarification on the unclaimed dividends, suggested that the annual report include a cashflow update and suggested the trustees look at equity markets if cash comes available. Secretary explained the position regarding unclaimed dividends which are historical but available for owners that do their successions. He acknowledged that a cashflow update could be included in the annual report and that the equity markets could be considered if funds are available but this requires

Page 5

some strategic direction from the owners. He explained that the Trust has choices. Historically it has been to acquire the traditional trust lands but if the owners wish to look at diversifying into assets that can be cashed up quickly then equity markets could be considered. Secretary also referred to the risk assessment report included in the booklet and explained how the trustees and advisers had identified the areas of risk and the consequences of those risks and what the Trust was doing about mitigating those risks.

2. Albert Ihaka congratulated the Secretary on the report

and suggested that more detail be provided on expense variances. Joe Edwards acknowledged the stellar year and the excellent reports and congratulated the trustees and advisers.

AUDITOR: RESOLVED: “That Iles Casey be reappointed auditors for the

next year.” Moved by the Chair. Motion was unanimous.

DISTRIBUTION: RESOLVED: 1. “That $70,000 be made available for owners grants as

per the policy tabled.” 2. “That kaumatua grants of $250 each be paid to

kaumatua aged 65 years or more at the date of the AGM.”

Moved by the Chair, carried unanimously. GENERAL BUSINESS: 1. Emily Rota-Bidois thanked the trustees for the

education grant received by her son. Mereana Hemana also thanked the trustees for the

education grant on behalf of Mandy Brown. 2. Michael Davis tabled a paper which referred to trustees

getting involved with cadetships. Gloria Koia advised the trustees had stepped back from Taratahi during the difficult times but will pick up the cadetship again.

Meeting closed at 12 noon with karakia from Joe Edwards. Signed as a correct record CHAIRMAN

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KOKAKO TRUST

2016 CHAIRMAN’S REPORT

Kia ora ano tatou katoa

Welcome to the 34th Annual meeting of Kokako Trust.

It is with mixed emotions that I present to you the Chairman’s report for the Trust. In July it

was a great honour to accept the role of interim Chair upon the retirement of our long

serving Chair and Trustee Te Wano Walters. However, it is with much sadness that I advise

that for personal reasons I am unable to continue as a Trustee and am retiring at this AGM.

We are therefore seeking two new Trustees and quite possibly they will come from our pool

of trainee Trustees that we have developed over recent years.

We have received a number of nominations for the two Trustee positions and it will be

decided by election at the AGM who will join Huimai, Gloria and Airini at the Trustee table.

At this point I would like to pass on our appreciation of the work of Te Wano Walters as

Trustee and Chair of the Trust, guiding us steadily for so many years. You have seen the

Trust farms grow and prosper over a 30 year period and you can be very proud of the

contribution you have made to the success of the Trust. As time moves on none of us can

remain forever and there inevitably comes a time when we must all step aside and let

others continue the journey and look after our taonga along the way. That time has arrived

for Te Wano and myself so all that remains is to wish the remaining Trustees and our new

Trustees our best wishes for a successful future.

On a much brighter note the dairy industry appears to have turned the corner with milk

prices forecast to return to levels over $6 per kilo. The last two years have been very hard

on dairy farms with many farmers being stretched to their limits. At Kokako farms our

teams have worked very hard to get through these difficult times and we must extend our

appreciation to everyone involved for their efforts.

Trudy and Murray will take us through the farm and financial reports and update our

current positions.

Our current Trainee Trustees are Kyle Amopiu and Briar Ensor. The next opportunity for an

appointment will be in May 2017 and I encourage you to put your names forward as this is a

great way to learn about the workings of the Trust and it does create a pool of prepared

owners who can step into Trustee roles and hit the ground running.

For some time now we have felt the need to update the Trust operating structure to ensure

we have a robust business setup moving forward. We need to make sure we are maximising

our effectiveness and minimising our costs and risks in the complex world we live in today.

We have therefore developed a strategy for modernising the Trust structure and Mana

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Newton will take us through this plan today. The Trustees welcome your support for this

initiative.

Despite the difficult financial time experienced we have come through in good shape and

there will be no change to our distributions policy. The annual Kaumatua Grant ($250 at age

65) and owners grant (minimum $75) will be processed before Christmas and education

grants will be opened up in January, closing on Friday 28th April 2017.

Finally we must thank our hard working staff and advisers for their commitment to the

success of Kokako Trust. We are very fortunate to have a great team on board.

With all our very best wishes for a safe and happy Christmas and a prosperous 2016 to each

and every one of you and your whanau.

Tena tatou katoa

Jackie Aratema

Chairman

2nd September 2016

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` Kokako Annual Report 2015/16

KOKAKO TRUST

ANNUAL FARMING REPORT 2015/16 SEASON

INTRODUCTION

It was another challenging year for Kokako Trust with a milk price of only $3.90/kg MS, but the team

pulled together to achieve 492,412kg MS at the same time as reducing farm expenses. The low level

of indebtedness also put Kokako in a strong position. The Fonterra loan support money was taken by

the Trust and has been invested throughout. Early payment by Fonterra of the dividends on shares

also assisted with cashflow throughout the year.

DAIRY PRODUCTION

Total production from the dairy farms for the 2015/16 season reached 492,412kg milk solids from a

total of 1,195 cows, 40 less than usual. Actual figures for production achieved over the last few years

are given in Table 1 along with district average and top 10% levels.

Table 1 Milk Production for all 3 Dairy Units

2013/14 2014/15 2015/16 kg MS/ha

Kg MS/cow

Dairy 1 173,358 176,159 164,991 1,100 402

Dairy 2 238,109 245,851 230,791 1,326 427

Dairy 3 100,611 97,104 96,630 1,124 394

Total 512,077 519,113 492,412 1,201 412

Kokako

Average

1,249 1,266 1,201

Down 5%

District

Average

1,218 1,263 1,213 Down 4%

Top

10%

2,096 2,095 2,078 Down 0.8 %

Average production over the last 6 years is 483,789kg MS with the period including three top years of

over 500,000kg and two drought affected years when production ranged from 422,306kg to 449,266kg

MS.

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` Kokako Annual Report 2015/16

The milk solids price for the previous 5 years has averaged $6.45/kg MS with a range from $4.40/kg

to $8.40/kg MS.

Fonterra paid a dividend on shares of 40c/share for the 2015/16 season up from 25c/share the

previous year. Kokako Trust has 520,245 Fonterra shares which at the 22th of November 2015 were

valued at $5.90/share. The dividend received therefore represents a return of 6.7%.

DRYSTOCK UNIT PRODUCTION

Lamb weights averaged 17.86kg carcass weight for the 501 lambs sold with average price at

$88.37/lamb or $4.95/kg slightly lower than last year’s average of $95/lamb.

FINANCIAL-OVERALL

Based on the audited Financial Statements the Gross Farm Surplus for taxation purposes after

allowing for change in stock value and depreciation is a profit of $177,920 compared to a deficit of

$5,284 for 2014/15. This reduced to a deficit of $23,044 after including other farm income of $37,794

for interest received, rebates and dividends and allowing administration expenses of $178,261,

interest payments of $55,158, admin insurance of $5,415 and taxation of $0. This compares to an

after tax deficit of $331,454 for the previous year.

The benefit of having paid significant sums of principal off in the past was felt this year with Kokako

only having $0.11/kg MS to pay in debt servicing. The total term liability at the end of June 2016 is

$1,221,631 of which there is still the $1,068,005 loan plus the $153,625 on loan from Fonterra.

Kokako also paid a total of $133,664 in the various shareholder, kaumatua and marae and education

grants.

Table 2 outlines the contribution each farm makes to the overall Farm Surplus including an allowance

for depreciation.

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` Kokako Annual Report 2015/16

Table 2: Net Surplus versus cash surplus 2015/16 year

Total Net Surplus

Effective ha

Cash surplus before depc

and change in stock value

Dairy Unit 1 $15,666 150 $34,266

Dairy Unit 2 $130,369 174 $159,793

Dairy Unit 3 $4,025 86 $2,107

Drystock Unit $30,081 199 $41,711

Ngatira Lease ($2,221) 113 ($805)

Total $177,920 782 $237,072

DAIRY ONE

Jason and Shelley Sabin from Dairy 2 completed their first year as lower order sharemilkers at

Kokako 1 with their team of Damian Clarke and Luke Ross. The original contract was for Kokako Trust

to receive 75% of the income and the Sabin’s a 25% share as reward for paying all staff, electricity

and shed expenses as well as the provision of motorbikes and their operation. Due to the fall in milk

price to $3.90/kg MS the contract was altered to a set amount of $1.12/kgMS to allow a breakeven

situation for the sharemilkers.

The farm plan was also altered to operate a lower cost system under the lower milk price. Cow

numbers were reduced, with 20 older and later calving cows sold in August following the

announcement of the milk price drop. Production reached 164,991kgMS against a revised budget of

167,000kgMS from 410 cows at peak, 403kg MS/cow. Cull cow prices were high with Kokako 1

averaging $839 /head for the 105 cows sold. This provided an additional $32,000 of cash income to

help offset the lower milk price. Cash income relating to the 2015/16 year amounted to $529,251

which compared with an original amount of $664,146 based on a $4.40/kg milk price. Total expenses

before depreciation at $492,886, $2.98/kg MS compare to the previous year’s $524,598, and a budget

of $511,605. Savings have been made on animal health, $4,000 and feed, $3,000. While on a cash

basis the farm made a cash surplus of $34,266. From a taxation perspective allowing for the drop in

livestock value of $119/head and depreciation Dairy unit 1 made a Surplus of $15,666.

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` Kokako Annual Report 2015/16

DAIRY TWO

On Dairy Unit 2, with Jason and Shelley Sabin in their seventh year as 50/50 share milkers, the

production reached 230,791kg MS, from 540 cows milked at peak, compared to a budget of

230,000kg MS. Total income for the Trust was $500,137 less the sharemilker’s portion of Fonterra

dividends against a budgeted income of $520,132. Expenses, excluding depreciation, at $340,344,

$1.40/kg MS compare with $338,659 the previous year and a budget of $351,978. Cost savings of

$18,000 were made on repairs and maintenance and feed costs were also less than budgeted. The

high level of production on a per ha basis and the well set up nature of the farm continue to allow this

unit to operate at very low level of expenses at $1.40/kgMS. The cash surplus for Dairy 2 amounted to

$159,793 compared to a budget of $168,153. As the livestock are owned here by the sharemilker no

change in livestock value applies but after allowance for depreciation the net surplus was $130,369.

DAIRY THREE

On Dairy Unit 3, the farm was managed for the ninth year by Richard and Sue Cook who started in

2007. This season they operated as Contract Milkers receiving $1.50/kg milksolids and paying for all

staffing, electricity, shed expenses and vehicle/motorbike excluding tractor expenses. Production

reached 96,631kg MS, from 245 cows milked,394kgMS/cow compared to a budget of 95,000kg MS.

Cash income reached $297,788 as against a budget of $331,131. This included 67 cull cows sold for

an average of $783/head. The higher price achieved helped offset the lower milk price with $23,000

more income from livestock sales. Expenses at $271,580, $2.86/kgMS, compare to $321,095 last

year and a budget of $310,921. Savings included $6,000 less on animal health, $2,000 less on

breeding, $8,000 less on feed and nitrogen, $6,500 less on repairs and maintenance. The cash

surplus for the year was $2,107 compared to $22,210 budgeted. Once adjustments for change in

livestock value and depreciation were taken into account, the net surplus was $4,025.

DRYSTOCK UNIT

Jim Clarke continued the management of the drystock unit which he has done for the past 13 years

since March 2003. He has continued to make improvements as possible within the budget.

Total ewe numbers at the start of the year were at 556 including ewes and 2-tooths. Lambing % was

average at around 120%. Higher ewe numbers provided for more lambs for sale and 501 were sold

for an average of $88/lamb with weights at an average of 17.9kgccwt. Total lamb sales at $44,274

was the highest level for the past 6 years. Additional plantain area has been sown this spring to allow

for all lambs to be grazed on plantain over the summer/autumn period until sale.

In total 241 rising 2 year heifers were grazed on the drystock unit plus 193 rising 1 year heifers. These

include stock from Dairy 1 and 3 as well as replacements grazed for Feek. The rising 2 year heifers

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` Kokako Annual Report 2015/16

returned to the dairy units at similar weights to the previous year at 352 to 384kg liveweight. While this

was in line with a standard crossbred heifer weight of 375kg we would like to target around 400kg

liveweight by the 1 May. A total of 300 cows were wintered for 8 weeks. These have been grazed very

well and returned home in excellent condition.

Cash income on the Drystock unit at $256,317 includes $198,532 of grazing income and $51,027 of

stock trading. While stock trading was in line with last year the grazing income was lower due to

reduced numbers. Budgeted income was $271,040. There was only a $6,380 lift on the change stock

value from opening to closing. Total expenses for the Drystock unit were $220,986 excluding

depreciation and forestry compared to a budget of $247,230 and expenses last year of $278,312.

Savings were made on repairs and maintenance, $18,000, vehicle, $4,000 and around $1,500 each

on shearing and crutching and electricity. The cash surplus at the Drystock unit was $41,711 while the

net surplus after adjustments for livestock value change and depreciation was $37,245 excluding the

forestry.

FORESTRY

Forestry expenses amounted to $7,164 for ongoing work on maintaining the Kokako forests. The total

Kokako forested area now amounts to 60.2ha.

There are further areas on the Kokako Trust land that would suit planting in forestry. It is planned to

increase the area of forest as part of a strategy to reduce nutrient loss from the Kokako land in the

future.

NGATIRA

The Ngatira lease land again provided supplement in the form of oat and barley silage, grass silage

and maize silage. In total 300t of silage including 55t of oats and 125t of barley and pea silage and

120t of grass silage was harvested and transferred to the dairy units. A further 63t was harvested for

use by the 250 cows from Dairy 2 wintered on grass, oats and silage for 7.5 weeks.

Only 7.5ha of maize was grown in the 2015/16 season with yield now up to 18t/ha which is the best it

has been helped by the good growth conditions over the summer. In addition, 555t of maize was

purchased from another grower and on sold to the dairy units.

Jim Walsh, Shelley Sabin’s father continued to do the weeds at Ngatira which has made a huge

difference to the pasture available on the hill areas.

Income from feed grown and grazing of stock totalled $140,790 excluding the $151,269 for maize

purchased and then on-sold. Budgeted income was $202,820. Income was less than budgeted with

grazing income down $2,464 and grass silage slightly less than budgeted. Expenses excluding

depreciation and maize bought to on-sell were also down at $171,158 compared to $210,673 last year

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` Kokako Annual Report 2015/16

and compared with $192,665 budgeted. The Ngatira unit finished with a deficit of $2,221 compared to

a deficit of $38,531 last year after depreciation compared to a budgeted surplus of $10,155.

OUTLOOK FOR 2016/17

It has been a particularly wet spring with pasture DM% and quality level low due to lack of sunshine

over the September/October period. Milk production has been impacted throughout the Waikato and

Bay of Plenty regions due to the weather conditions. District production was down by 7% for October.

At Kokako total production also dropped off over the October/November period. By the 23rd of

November production totalled 229,817kgMS compared to 229,028kg MS last year and 255,239kgMS

in the record 2014/15 year. At Kokako 1 production was 4% ahead of last season with Kokako 2

ahead by 1% and Kokako 3 down by 8%.

The Fonterra forecast milk price has been lifted three times already from an initial figure of $4.25/kg

MS to the latest figure of $6/kg MS announced on the 18th of November.

The strong financial position and promising milk price will allow for principal payments to be resumed

and the first $50,000 payment this season was made in November.

Essential work relating to effluent storage being compliant will also be able to be undertaken and

repairs and maintenance work which has been deferred over the low milk price years will now need to

be addressed.

Areas have again been planted in chicory to help offset the dry period expected this summer.

This seasons lambing % has been excellent at 130% for the ewes and feed quality on the drystock is

currently very good.

As at the end October Kokako had three term investments including the Fonterra support Loan money

invested. The total Fonterra support loan amounts to $153,625.

The allowance for grant and dividends has been held at the same rate as last year.

Our thanks to Murray Patchell and his team and all the Trustees for their continued support especially

to the retiring Chairman Te Wano Walters and Jackie Aratema who have lead us so diligently over the

years. Our thanks also go to the tremendous staff on all the units. It has been our pleasure to assist

the Trust to come through the last few years of low milk price in a strong secure financial position.

Trudy Laan Director

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PERRIN AG CONSULTANTS SCHOLARSHIP - WHAKAPAPA

Applicable Maori organisations are as follows:

Kapenga M Trust

Kokako Trust

Ngati Whakaue Tribal Lands Inc

Ngati Whare

Ngati Makino Farm Trust (via Otamarakau Farm Ltd)

Rotoiti 15 Trust (via Otukawa Whenua Ltd)

Taheke 8C Inc.

Te Karangi A2 Trust

Waerenga East and West Blocks Inc

Waipupumahana C

Waiteti Whenua Trust

For some thirty years, Perrin Ag Consultants, initially through John Perrin and in more

recent years Trudy Laan, Lee Matheson and Duncan Walker, has had an ongoing

association with numerous Maori Companies, Incorporations and Trusts involved with the

business of farming in the wider Rotorua district. This association, primarily through the

development, management and sustainable operation of Maori farm businesses, is

continued by Perrin Ag Consultants Ltd today. In addition to recognising that the

education and development of potential leaders is a key priority for these organisations,

Perrin Ag also want to honor the trust and support that those businesses continue to

show. We offer an annual scholarship of up to $3,000 for a promising individual with

whakapapa to one of the above organisations who wish to pursue or continue an

undergraduate or Honours study in agricultural or related science at either Lincoln or

Massey Universities.

SELECTION PANEL

The selection panel will comprise two Directors of Perrin Ag Consultants Ltd and a

representative from one of the relevant Maori authorities.

HOW TO APPLY

Applications close 31st March 2017. For full details please contact Perrin Ag Consultants

by email office@perrinag.net.nz or phone them on 07 3491212 or visit

www.perrinag.net.nz for more details.

Page 15

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KOKAKO TRUST

SUMMARY OF FINANCIAL RESULTS

Copies of the full audited financial statements are available upon request. The following summary is not intended to replace those statements but is designed to give a more simplified overview of the Trust’s financial results. The Trust is an Ahu Whenua Trust in terms of section 215 of Te Ture Whenua Act 1993.

Net Surplus:

2015 2016

INCOME

Farm Surpluses(Deficits):

Drystock 13,759 30,081

Dairy 1 (24,310) 15,666

Dairy 2 176,282 130,369

Dairy 3 (132,483) 4,025

Ngatira (38,531) (2,221)

Other Income 44,537 37,794

TOTAL INCOME $39,254 $215,714

LESS EXPENDITURE

Administration Costs 245,143 183,676

Interest 63,266 55,158

NZU Revaluation (1,271) (76)

Taxation 63,570

TOTAL EXPENDITURE 370,708 238,758

SURPLUS AFTER TAX ($331,454) ($23,044)

-500,000

0

500,000

1,000,000

1,500,000

$

SURPLUS AFTER TAX

Net Operating Surplus $938,502 $537,425 $386,563 $1,372,953 -$331,454 -$23,044

2011 2012 2013 2014 2015 2016

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Administration Costs:

2015 2016

ACC 3,845 306

AGM Expenses 5,106 2500

Audit Fees 5,500 5750

Bank Charges 521 452

Consultancy 24,163

Entertainment Expenses 6,194

General Expenses 1,531 163

Printing Stationery & Advertising 8,657 10,326

Recruitment costs 8,397

Secretarial/Accountancy/ costs 72,915 65,163

Share Register 4,755 15,034

Subscriptions 3,211 1,222

Supervision 63,407 47,798

Trustee Fees & Expenses 29,227 28,746

Trustees Insurance 5,415 5,415

Valuation Fees 2,300 799

TOTAL $245,144 $183,674

2016 SURPLUS CONTRIBUTION BY UNITS

-50,000

0

50,000

100,000

150,000

$ 15,666 130,369 4,025 30,081 37,794 -2,221

No 1 Dairy No 2 Dairy No 3 Dairy Drystock Other Ngatira

Page 18

Cashflow: A simplified cashflow overview for the financial year to 30 June is:

2015 2016

CASH ON HAND 1 JULY 237,233 468,062

Add

Cash from Operating activities (after tax) 452,031 (35,866)

Fonterra loan 153,625

Total Cash Available 689,264 585,821

Less

Equipment purchases/building additions 55,431 47,211

Bank loan repayments 50,000

Owners Distributions 115,771 135,301

Total Payments 221,202 182,512

CASH ON HAND 30 JUNE $468,062 $403,309

and as a chart up to date:

DISTRIBUTIONS

2015 2016

Education Grants 15,800 12,782

Kaumatua Grants 61,225 64,750

Owners Grants 52,662 54,932

Marae Grants 1,000 1,200

TOTAL $130,687 $133,664

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CAPITAL EXPENDITURE 2016

Double glaze cottage 10,957

Feed troughs 10,875

Water Meters 6,302

Travelling Irrigator 5,926

Calf Trailer 4,151

Washdown Pump 3,598

Calf Feeder 2,174

Digital roller on vat 2,150

Dairy Caddy 969

TOTAL $47,102

Assets:

2015 2016

Bank deposits 468,061 403,309

Current Assets (Receivables) 82,616 232,847

Tax Refunds 95,309 93,639

Livestock 1,271,460 1,148,715

Shares 2,655,181 2,984,411

Land & Buildings 15,310,714 15,320,892

Vehicles & Equipment 270,607 222,178

Trees 652,784 652,784

NZU’s (carbon credits) 52,956 145,587

TOTAL ASSETS $20,859,688 $21,204,362

Land is recorded at the market valuation as assessed every 5 years by an independent registered valuer. The last valuation was done as at 30 June 2012 so this will be updated in 2017. Livestock and shares are at market value. Buildings vehicles and equipment at cost less depreciation. The Tree valuation will be updated in 2017. There are 60 hectares of trees in 17 lots planted between 1987 and 2013. Carbon credits are at market value, currently around $18 per unit (8147 units = $146,616)

Page 20

Fonterra share value declined by $343,362 (13.7%). Market price of $5.46 at 30th June since increased to around $5.95 per share. (520,245 shares at $5.95 = $3,095,457, a 9% increase).

Liabilities:

2015 2016

Current Liabilities (Accounts payable) 175,155 102,872

Westpac Bank Mortgage 1,068,006 1,068,006

Fonterra Co-op loan 153,625

Unclaimed Dividends 156,473 154,837

TOTAL LIABILITIES $1,399,634 $1,479,340

The Westpac Bank fixed loan interest rates are between 4.40% and 4.50%. Bank Overdraft rate is 7.15% with a limit of $300,000. Fonterra loan is interest free, repayable when milk price exceeds $6 per kilo.

Net Equity:

2015 2016

Total Assets 20,859,688 21,202,362

Total Liabilities 1,399,634 1,479,340

Net Equity $19,460,054 $19,725,022

Net Equity per share $13,900 $14,089

30.6.16

Page 21

Net Equity/Mortgage

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

16,000,000

18,000,000

20,000,000

22,000,000

$

Net Equity 16,900,031 18,197,402 19,945,961 20,403,974 19,460,054 19,725,022

Stock and shares 3,677,042 3,883,736 5,415,778 4,727,869 3,926,641 4,133,126

Mortgage 2,486,397 1,874,938 1,848,043 1,118,006 1,068,006 1,068,006

2011 2012 2013 2014 2015 2016

Owners: The Trust comprises 1400 shares held by 1672 owners. We hold addresses for 583 owners (35.7%) and 420 of those have provided their bank accounts.

64%

9%

26%

With address/no

bank account

With address and

bank account

No details

Page 22

The distribution of owner’s ages where birthdates and addresses are held (excludes whanau trusts):

0

20

40

60

80

100

120

140

Number

Age group

Age distribution 5 28 51 112 125 88 20 2

<34 35-44 45-54 55-64 65-74 75-84 85-94 >95

Murray Patchell Secretary

Page 23

EDUCATION GRANTS POLICY 2016

1. Persons who qualify for an education grant: (a) Registered Owners or descendants of Registered Owners.

(b) Beneficiaries and descendants of beneficiaries in a Whanau Trust constituted in terms of Te Ture Whenua Maori Act 1993.

Applicants must supply a clear whakapapa to either (a) endorsed by a recognised Kokako Kaumatua or Kokako Trustee or (b) signed by a Trustee of the Whanau Trust.

2. Students must be currently attending a (NZQA or overseas equivalent) tertiary institution on a fulltime or part-time basis or an institution or training scheme approved by the Trustees.

3. All students who qualify for a grant will receive an amount approved by the Trustees which varies each year depending on total sum available divided by number of approved applicants.

4. Application must be submitted online and supporting papers lodged with the Secretary by the advertised closing date.

5. Applicants must provide a receipt for course fees paid. The Trustees may at their discretion accept a student loan draw down certificate or a letter of acceptance to enrolment at the education institution provided there is clear evidence of fees paid.

6. Students attending free courses or where fees are paid by a third party are not precluded from receiving a grant provided all other criteria are met.

7. Incomplete or late applications may be rejected.

Page 24

First Name Last Name Institution: Course

Indya Acraman Massey University Bachelor of Arts

Jamie Allan Auckland University of

Technology

Bachelor of Science

Emire Mauria BIDOIS Waiariki Institute of Technology Diploma in Business

Mauria Bidois Quantum Education Group

Limited

Certificate in Computing

Ruka Broughton University of Waikato Bachelor of Law & Management Studies

Shjan Colbert University of Waikato Bachelor of Arts

Dylan Douglas University of Waikato Bachelor of Business

Haurawhiti Faulkner University of Auckland Post Grad Diploma in Health Sciences

Advanced Nursing

Pare Harris University of Waikato Post Grad Diploma in Psychology

Irihapeti Hatu Sir George Seymour National

College of Aviation

Diploma of Tourism Management

Zane te Huia Kira Hay Te Wananga O Aotearoa Certificate in Sport & Recreation

Aroha Houia University of Waikato Bachelor in Maori & Pacific Development

Cheyane Kahukiwa Unitec New Zealand Bachelor of Computing Systems

Chase Kennedy University of Waikato Bachelor of Sport & Leisure

Lani Kereopa Te Wananga O Raukawa Bachelor of Teaching

Tahlia Kingi Victoria University of Wellington PhD in Psychology

Te Mauri Kingi Freelance Animation School

Limited

Diploma in Applied Animation

Manurere Kiriona-Devonshire Otago Polytechnic Bachelor of Nursing

Jasmine Macown University of Waikato Bachelor of Management Studies

Danielle Marks University of Waikato Bachelor of Law

Cori Marsters Te Wananga O Aotearoa Bachelor of Arts

Natasha Martin University of Otago Bachelor of Medicine & Surgery

Jennifer Mitchell University of Waikato Te Tohu Paetahi Ako

Andre Morrison University of Auckland Bachelor of Commerce

Karen Neate Charles Sturt University Bachelor of Business (Insurance)

Brooke Ngarimu University of Auckland Bachelor of Architecture

Leilani Ngawhika Te Wananga O Aotearoa Bachelor of Education

Ngapera Patara University of Waikato Bachelor in Tourism Management

Ben Phillips Te Wananga O Aotearoa Certificate in Health & Fitness

Kayla Polamalu Victoria University of Wellington Bachelor of Arts & Law

KOKAKO TRUST

2016 Education Grants

64 grants of $200 each were awarded to the following recipients to assist with tertiary education. 92

applications were submitted, with 28 of those being declined due to being incomplete, or the applicant was unable to confirm their whakapapa to a shareholder in the Trust. Please ensure you

provide all information requested when applying for a grant.

The online form for 2017 will be available from the end of January at www.rotorua.deloitte.co.nz (Grants & Scholarships). Applications will close on Friday 28th April 2017.

Page 25

First Name Last Name Institution: Course

Cynthia Pryor Te Whare Wananga O Awanuiarangi

Doctor of Philosophy

Dexter Rapana University of Auckland Bachelor of Arts & Law

John Rapana University of Waikato Bachelor of Science

Little Mizz Maggie Rapana Excel Ministries Schl of Performing Arts

Certificate in Performing Arts

Rondell Reihana Te Wananga O Aotearoa Bachelor of Maori Art

Christian Rhind University of Melbourne Doctor of Philosophy

Tonisha Rohe Auckland University of

Technology

Bachelor of Social Science

Kerehi Ruaine University of Waikato Bachelor of Science

Stacey Mariu Ruru University of Waikato Masters in Applied Psychology

Jocelyn Simpkins Te Wananga O Aotearoa Graduate Diploma in Supervision

Brianna Smith Auckland University of

Technology

Bachelor of Communications

Sabrina Solomon University of Auckland Postgraduate Diploma in Health

Science

Lauren Spicer New Zealand Tertiary College Masters in Education

Jared Stanley University of Otago Bachelor of Commerce

Nathan Stanley University of Otago Bachelor of Surveying

Rachel Taipari Manukau Institute of

Technology

Bachelor of Social Work

Wenarata Tait Te Wananga O Aotearoa Master of Indigenous Studies

Anaru Tapsell Victoria University of Wellington

Bachelor of Law

Ellen Tapsell Victoria University of Wellington

Bachelor of Arts and Bachelor of Commerce

Jack Tapsell University of Otago Bachelor of Medicine & Surgery

Maia Tapsell University of Otago Masters of Health Science

Nicholas Tapsell Victoria University of Wellington

Bachelor of Music

Petera Tapsell University of Otago Bachelor of Surveying

Rosie Tapsell Unitec New Zealand Bachelor of Performing & Screen Arts

Te Kahui Tapsell University of Otago Bachelor of Medicine & Surgery

Te Aumihi Te Hiraka Hapeta University of Auckland Bachelor of Commerce

Kataraina Tims University of Auckland Bachelor of Maori Studies

Amy Uluave Waiariki Institute of

Technology

Bachelor in Tourism Management

Kate Walker University of Auckland Post Grad Diploma in Science

Thomas Walters Waiariki Institute of Technology

Bachelor of Nursing

Jamie Waterreus-Wharepapa University of Waikato Bachelor of Law

Shannel Whare Waiariki Institute of Technology

Bachelor of Applied Social Science

Chrissie Zurcher Massey University Masters in Education

Te Awanui Waaka University of Otago Bachelor of Science

Page 26

RE

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AN

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rust

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in b

ands

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who

pro

vide

thei

r ad

dres

ses

and

bank

acc

ount

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per

the

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ymen

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s.In

201

0 a

min

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gra

nt p

aym

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f $50

was

set

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ed to

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in 2

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rant

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2015

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$10,

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$20,

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$30,

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$40,

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$60,

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$70,

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$80,

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2011Education

2012Education

2013Educaton

2014Education

2015Education

2016Education

2011Owners

2012Owners

2013Owners

2014Owners

2015Owners

2016Owners2011

Kaumatua2012

Kaumatua2013

Kaumatua2014

Kaumatua2015

Kaumatua2016

Kaumatua

CO

MP

AR

AT

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PA

YO

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Page 27

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Page 28

2016 OWNERS GRANT POLICY An Owners grant in lieu of a dividend was approved at the AGM on 10 December 2016. This grant

is payable to the Owners registered at 10 December 2016 who have supplied their bank account

numbers and addresses. The grant is also available to Owners, subject to the terms of the grants

policy, up to the next AGM. The current policy in respect of the 2016 Owners Grant is as follows:-

1. For identification purposes the grant will be called the “2016 Owners Grant”.

2. The sum of $70,000 has been set aside for 2016 Owners Grants.

3. Payments to be made only to bank accounts and Owners addresses must be held.

4. Payments will be calculated according to shareholding bands as per the attached schedule

with a minimum payment of $75.

5. All Owners with addresses are to be advised of the Owners Grant and those who have not

provided bank accounts details will be asked to do so.

6. Sufficient funds will be retained to cover any Owners who are located after the payment

date.

7. The Trustees reserve the right to make only one payment to a Owner whose name may

appear more than once on the share register where it is evident that those multiple names

refer to one person.

8. Any Owners who are located after the payment date will be entitled to the payment they

would have received had their address and bank account details been known at the

distribution date.

9. Any owners who succeed to shares after the payment date will be entitled to payment of

the current Owner’s grant based on their shareholding where it has not been paid to the

deceased Owner.

10. Entitlement to the payment will expire on the date of the next AGM.

11. Payments to overseas Owners will be subject to deduction of bank charges.

12. The Trustees reserve the right to amend this policy or draft new policy to cover any

circumstance not covered or anticipated by this policy, in respect of payments to all

beneficiaries or to any one or more beneficiaries and the Trustees decision in these matters

will be final.

Owner Grant payments will be made from tax-free retained earnings that will be free of tax in the

hands of the Owners.

Approved…………………………..… Chairman……………………………..

DRAFT

Page 29

Kok

ako

Trus

tK

otah

itang

a S

trat

egy

Dec

embe

r 20

16

1

Page 30

Wha

t are

we

look

ing

at a

nd w

hy?

2©

201

6. F

or in

form

atio

n, c

onta

ct D

eloi

tte T

ouch

e T

ohm

atsu

Lim

ited.

1.Lo

okin

g at

way

s th

at w

e ca

n w

ork

mor

e co

llect

ivel

y w

ith o

ther

land

bl

ocks

and

look

for

futu

re d

evel

opm

ent.

2.P

oten

tial s

truc

ture

s m

ovin

g fo

rwar

d to

min

imis

e ta

x co

sts

as d

istr

ibut

ions

in

crea

se

3.A

way

to

get f

urth

er e

xper

tise

into

the

grou

p -

spec

ifica

lly th

e co

mm

erci

al

area

s w

e ar

e tr

ying

to d

evel

op.

4.A

way

to

futu

re p

roof

Kok

ako

whe

nua

mov

ing

forw

ard

5.P

rote

ct th

e ow

ners

and

trus

tees

aga

inst

legi

slat

ive

and

com

mer

cial

ris

k

6.E

nhan

ce T

rust

ee a

nd M

anag

eria

l suc

cess

ion

Page 31

Cu

rren

t S

tru

ctu

re

Pro

pose

d S

truc

ture

3©

201

6. F

or in

form

atio

n, c

onta

ct D

eloi

tte T

ouch

e T

ohm

atsu

Lim

ited.

Ko

kako

Tru

st (

Mao

ri

Au

tho

rity

)

Dai

ry u

nits

/ tr

adin

g ac

coun

ts/

char

itabl

e di

strib

utio

ns+

(with

in K

okak

o T

rust

)

Pro

po

sed

Str

uct

ure

Ko

kako

Tru

st (

Mao

ri

Au

tho

rity

)

Ko

kako

Ch

arit

able

Tr

ust

Com

mer

cial

ass

ets

/ in

vest

men

ts

Lim

ited

P

artn

ersh

ip

Fut

ure

pote

ntia

l pa

rtne

rshi

ps

Page 32

Con

side

ratio

ns fo

r th

e ne

w s

truc

ture

4©

201

6. F

or in

form

atio

n, c

onta

ct D

eloi

tte T

ouch

e T

ohm

atsu

Lim

ited.

Ko

kako

Tru

stC

om

mer

cial

En

tity

Ch

arita

ble

Arm

Go

vern

ance

Tru

stee

’sst

ille

lect

edfr

omth

eow

ners

thro

ugh

the

Tru

stor

der

Dire

ctor

s ap

poin

ted

from

the

Tru

stee

s gr

oup

and

can

bein

depe

nden

t dire

ctor

s A

tthi

s st

age

Tru

stee

s ar

e th

e sa

me

as th

e tr

ust.

Kau

pap

a o

f b

usi

nes

sF

ocus

edon

the

whe

nua

and

the

peop

le.

Hol

dth

ela

ndse

para

tefr

omth

ebu

sine

ss

Man

age

the

com

mer

cial

affa

irs o

f the

Tru

st

unde

r th

e gu

idan

ce a

nd d

irect

ion

of th

e T

rust

The

cha

ritab

le A

RM

mee

ts to

geth

er 1

tim

e pe

r ye

ar t

o ap

prov

e al

l cha

ritab

le d

istr

ibut

ions

. T

hese

dis

trib

utio

ns a

re th

en m

ade

annu

ally

.

The

re a

re a

dditi

onal

com

plia

nce

requ

irem

ents

fo

r ch

ariti

es b

ut n

ot s

igni

fican

t.

Co

mp

lian

cere

qu

irem

ents

•A

nnua

lacc

ount

s•

Ann

ualA

GM

•A

nnua

ltax

retu

rn•

Ow

ner

gran

ts

•A

GM

and

annu

al a

ccou

nts

only

par

t of

the

grou

p •

Ann

ual r

etur

n su

bmitt

ed to

com

pani

es

offic

e (a

ppro

x $1

50 p

er y

ear)

# o

f go

vern

ors

an

d h

ui

Sam

eas

the

trus

tor

der

with

1tr

aine

etr

uste

eto

mee

t3

times

annu

ally

Pot

entia

lly 3

Dire

ctor

s an

d 1

trai

nee

dire

ctor

to

mee

t 6 ti

mes

ann

ually

.

1.O

vera

ll co

sts

will

sta

y re

lativ

ely

the

sam

e bu

t the

re w

ill b

e a

re-d

irect

ion

of

reso

urce

s an

d sp

ecifi

c fo

cus.

2.T

he n

ew s

truc

ture

is ta

rget

ed a

t ope

ratio

nal e

ffici

ency

and

pot

entia

l fu

ture

de

velo

pmen

t and

gro

wth

of t

he b

usin

ess.

3.G

oing

forw

ard

reso

urci

ng r

equi

rem

ents

will

be

base

d on

the

activ

ity o

f the

Gro

up.

4.In

com

e ch

anel

led

thro

ugh

the

Cha

ritab

le T

rust

sav

es 1

7.5c

ents

per

dol

lar.

Page 33

MAORI LAND COURT SUCCESSIONS

Q. How do I apply for succession?

A. You need to file an application for succession at the Maori Land

Court. You will need to provide the following:

Original death certificate or a certified copy

Original will (or grant of administration) if there is one Fully completed application papers

Application fee of $60.00

Details of the deceased's whanau, that is parents, brothers, sisters and

children.

When obtaining Court land records you must tell them if the deceased person

is in an Incorporation as the Court does not maintain registers for

Incorporations. They will then ask the Incorporation Secretary for details of

that shareholding.

Q. How much does it cost?

A. The application fee is $60.00. That is the only cost payable to the Maori

Land Court. You may incur other costs obtaining copies of death certificates and if you have to consult a lawyer. You should discuss this with Court staff.

Q. What happens when I lodge my application?

A. The application is searched by Maori Land Court staff to obtain full details of the deceased's land interests. You will receive a copy of that search and will

be advised by letter when you have to go to court. A court hearing will be arranged at the court venue closest to where the land is located or, if you

prefer, closest to where you live. When you arrive at court, you will firstly

speak to a Court officer who will confirm the details of your application. The

Judge of the Court will then re-confirm those details in court. Following the court sitting, you will receive a copy of the court minutes, which is a record of

the hearing. This is confirmation of what happened at the hearing.

Q. Do I have to get a lawyer?

A. In most cases, you can complete succession yourself. You should discuss

whether or not you need a lawyer with Court staff.

Q. What is probate?

A. When the High Court confirms the appointment of an executor to look after

the affairs of a deceased person, the court's authority for that person to act is given in a grant of probate.

If you would like assistance with this process you are welcome to contact Mrs Tai Taitoko in the Rotorua Deloitte office for guidance.

(07 343 1050)

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