Annual General Meeting - Deloitte US · 449,266kg MS. The milk solids price for the previous 4...

Annual General Meeting

2015

D I R E C T O R Y

TRUSTEES Te Wano Walters (Chairman) Huimai Makela Jackie Aratema Gloria Koia Airini Hepi TRAINEE TRUSTEES Kyle Amopiu Takarei Te Tamaki

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 [email protected] WEBSITE http://rotorua.deloitte.co.nz

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C O N T E N T S

PAGE 1. Directory

2. Contents 3. Agenda 4. Minutes of AGM dated 29 November 2014 6. Chairman’s Report 8. Farm Report 16. Perrin Ag Consultants Scholarship 17. Audit Report 18. Financial Summary 24. Risk Assessment 25. Education Grant Policy 26. Education Grants Report 28. Review of 2014 Grant 29. Owners Grant Analysis 30. Owners Grant Policy 31. Maori Land Court Successions

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ANNUAL GENERAL MEETING

The 33rd Annual General Meeting

held at Tarukenga Marae, Rotorua

on

Saturday 28th November 2015

at 10 am.

AGENDA

1. Apologies. 2. Minutes. 3. Chairman’s Report. 4. Farm Reports. 5. Financial Reports. 6. Appointment of Auditor. 7. Distributions. 8. General Business. 9. Lunch.

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KOKAKO TRUST MINUTES OF THE 32ND ANNUAL GENERAL MEETING OF

OWNERS HELD AT PARAWAI MARAE ON SATURDAY 29 NOVEMBER 2014 AT 10.00AM.

CHAIRMAN: Te Wano Walters. SECRETARY: Murray Patchell. ATTENDANCE: 66. APOLOGIES: 23. MIHI & KARAKIA: Takarei Te Tamaki and Joe Edwards. MINUTES: Of the previous AGM held on 7 December 2013 were read by the

Secretary and confirmed. (Huimai Makela/Airini Hepi) Carried

There were no matters arising.

CHAIRMAN’S REPORT: Te Wano Walters tabled and read his report. RESOLVED: “That the Chairman’s report be received.” (Te Wano Walters/Airini Hepi) Carried

FARM REPORT: Trudy Laan tabled and read her farm report. RESOLVED: “That the farm report be received.” (David Thompson/Te Wano Walters) Carried

Trudy also referred to the Perrin Ag Scholarship which is available for farming students.

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

ended 30 June 2014. Full audited financial statements are available from the office.

RESOLVED: “That the financial report for the year ended 30 June

2014 be received.” (Sonia Cooper/Jeff Rice) Carried

Geoff Rice outlined his observations on the reports and said all credit to the trustees for their performance.

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

12 months.” (Te Wano Walters/Jackie Aratema) Carried DISTRIBUTION: RESOLVED:

1. “That $70,000 be made available for owners grants as per the

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

65 years or more at the date of the AGM.” (Jackie Aratema/Airini Hepi) Carried

TE KAOKAOROA O PATATERE: Mana Newton made a presentation on the Te Kaokaoroa o Patatere

project which is aimed at groups in the rohe working together for mutual benefit. Geoff Rice expressed his support for the strategy. John Newton provided some background information on the Okoheriki blocks and land use challenges and expressed his support for working with Kokako Trust. Ngati Tura have established an office and people are welcome to meet with them. DOC have 75% of their lands and they are having discussions with them. He suggested looking at more rental for Ngatira Trust and supported increased grants for Marae. He also commented on the urupa being developed in the next 5 years.

GENERAL BUSINESS: 1. Michael Davis made reference to programmes for rangatahi and

encouraged owners to get behind these sorts of programmes. Gloria Koia said that the Trust had been working with Taratahi Agricultural College which is now operating out of Putaruru. Cadets have been involved at No. 3 Dairy Farm and the Trust is looking at how this can be implemented further. Takarei Te Tamaki spoke of his involvement with the Arawa Training Programme of which he was a trustee. It was generally difficult to get students to complete the course.

2. Linda Rika thanked the Trust for her granddaughter’s education

grant. She is now starting work as a dental therapist in Hamilton. Others spoke in support of the education grants including one young student who had attended Otago University and was really pleased to see the results and strategies of the Trust. He was very appreciative of the grant and felt this had made a difference to him.

3. Murray Patchell explained that the trustees have recently

reviewed the Marae grants policy and will continue with the rotational payment of $1,000 per annum to Marae and Marae hosting the Trust’s AGM will receive a grant of $2,500.

The next AGM is to be held at Tarukenga Marae. The meeting closed at 12.06 with karakia from Joe Edwards. Signed as a correct record

CHAIRMAN

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KOKAKO TRUST

2015 CHAIRMAN’S REPORT Kia ora ano tatou katoa I am very proud to table my annual report to this, the 33rd annual meeting of Kokako Trust. I would like to thank Tarukenga Marae for hosting our AGM this year. After the record year in 2014 we knew 2015 would be tough but the forecast $3.85 per kilo of milksolids predicted mid year was not what anyone was expecting. Thankfully that forecast has changed and it is now looking likely that we will receive over $5 per kilo, although the markets remain uncomfortably volatile. Kokako farms are faring better than many other dairy farms and that is a credit to all our sharemilkers, managers, employees and advisers. We also have good support from our Banker Westpac bank and we extend our appreciation to them for their ongoing support. We are mindful of the weather forecasting for an El Nino event and are preparing the farms for a dry summer although this seems to have started even earlier than expected. The decision we made in recent years to accelerate debt repayment has proven its worth. Further debt repayment is on hold until we see an improvement in the dairy market. We have had a good look at our budgets and cut back expenditure where we can. Some of our initiatives have been put on hold for the moment. We are continuing to review our costs and the way we do things and to look for savings. We hope to get through the current season with positive cashflow and accordingly there is no change to this year’s owners distributions. However if there is further weakness in the dairy market and the predicted summer drought arrives and impacts on our milksolid production then we may need to review our distribution policy next year. We could also consider whether we need to hold annual general meetings every year or whether we move to every second or third year. The term of trainee Trustee Kyle Amopiu came up in May 2015. We did not receive any nominations so Kyle was reappointed for a further two year term. The term of Takarei Te Tamaki comes up in May 2016 and we will be calling for nominations for the next two year term from March. Trainees must be able to commit to the two monthly on farm inspections and Trustee meetings in Rotorua.

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We will shortly pay the annual owners grant to all owners that have provided their bank account and address. The minimum grant is $75. We will also pay the annual Kaumatua grant of $250 for owners aged 65 years or more at the date of this meeting. If you haven’t registered for these payments then see our Secretary Murray Patchell. The annual tertiary education grants open in January and close on 29th April 2016. This year we paid 75 grants of $200 each. It is a small way that we can support and encourage our young people to go on to higher education. Applications can only be lodged on line through the website http://rotorua.deloitte.co.nz. We have a great team of Trustees, advisers, farm managers and staff, doing an excellent job in the face of some very challenging conditions. I thank you all for attending today and supporting the Kokako team. Wishing all of you and your whanau a safe and happy Christmas and a prosperous 2016.

Tena koutou katoa

Te Wano Walters Chairman

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REPORT PREPARED BY

REGISTERED FARM MANAGEMENT CONSULTANTS

Report Dated: November 2015

DISCLAIMER The information presented in this report is based on conservative current prices and returns to the best of the author’s knowledge. No guarantees are given for the final result, which may be affected by factors outside the author’s control.

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` Kokako Annual Report 2014/15

KOKAKO TRUST

ANNUAL FARMING REPORT 2014/15 SEASON

INTRODUCTION

Kokako achieved a new record in terms of production which helped to offset the major drop in milk price from the previous season’s high of $8.40/kg MS to a final milk price of $4.40/kg MS. Having made excellent progress on paying off debt in the previous year, the Trust was able to go into the 2014/15 year in a strong position despite the continued drop in forecast milk price which had initially been forecast at $6/kg MS.

DAIRY PRODUCTION

Total production from the dairy farms for the 2014/15 season reached a new record of 519,113kg milk solids from a total of 1,235 cows milked at peak despite a dry period over the autumn. The boost in production came over the early part of the season with over 200,745kg MS already in hand by the end of October. 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 2011/12 2012/13 2013/14 2014/15 kg

MS/ha

Kg MS/cow

Dairy 1 176,148 146,413 173,358 176,159 1,174 414

Dairy 2 235,213 191,851 238,109 245,851 1,413 435

Dairy 3 96,194 84,040 100,611 97,104 1,129 396

Total 507,555 422,304 512,077 519,113 1,266 420

Kokako

Average

1,223 1,030 1,249 1,266 up 1.2%

District

Average

1,187 1,103 1,218 1,263 up 3.7 %

Top 10% 1,886 1,817 2,096 2,095 0 %

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Average production over the last 6 years is 471,973kg MS with the period including three top years of over 500,000kg and three drought affected years when production ranged from 421,520kg to 449,266kg MS.

The milk solids price for the previous 4 years has been $8.40/kg,$5.84/kg, $6.05/kg MS and $7.59/kg MS.

Fonterra paid a dividend on shares of 25c/share for the 2014/15 season compared to10c/share for the 2013/14 year and 32c/share in the previous year. Kokako Trust has 520,245 Fonterra shares which at the 26th of November 2015 were valued at $5.44/share. The dividend received therefore represents a return of 4.6%.

DRYSTOCK UNIT PRODUCTION

Lamb weights reached a new record of 18.53kg and prices were also high at an average of $5.15/kg or $95.54/lamb, up from an average of $86.74/lamb the previous year. The drought impacted the drystock block over the autumn with both feed quality and quantity limited for replacement stock.

FINANCIAL-OVERALL

The financial results are skewed down not only because of the drop in milk price directly impacting actual income but also as a result of the subsequent drop in valuation of the dairy stock. While the drop in value does not impact cash flow it does reduce the taxable income position for Dairy 1 and 3 which have the dairy cows. Ironically as the schedule price has been high the value of cull cows was at a high of around $770/head against a budget value of around $500/head.

Based on the Audited Financial Statements the Gross Farm Surplus for taxation purposes after allowing for change in stock value and depreciation is a deficit of $5,284 compared to a high of $1,712,301 surplus for 2013/14. This reduced to a deficit of $331,455 after including non-farm income of $44,537 for interest, rebates and dividends and allowing administration expenses of $236,415, interest payments of $63,266 and taxation of $63,570. This compares to an after tax surplus of $1,372,954, $386,563 and $537,426 for the previous three years.

As $730,000 of debt had been repaid in the previous 2013/14 year, the Trust was in a very strong position and the decision was made to limit debt repayment to the $50,000 paid off in October. This now leaves the mortgage at the end of June 2015 at $1,068,005. The Trust also paid a total of $115,687 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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Table 2 Net Surplus versus cash surplus 2014/15 year

Total Net Surplus

Effective ha

Cash surplus before depc

and change in stock value

Dairy Unit 1 ($24,310) 150 $144,960

Dairy Unit 2 $176,282 174 $206,779

Dairy Unit 3 ($132,483) 86 $4,102

Drystock Unit $27,606 199 $35,813

Forestry ($13,847) 60 ($13,847)

Ngatira Lease ($38,531) 113 ($37,024)

Total (5,284) 782 $308,368

DAIRY ONE

Andrew Grayling completed his ninth and last year at Kokako 1. Andrew has moved on having taken a break over the spring. Jason and Shelley Sabin from Dairy 2 are now also operating Kokako Dairy 1 with a team of staff. For Andrew’s last season the variable order share milking agreement was in place with Kokako Trust receiving 75% of the income and Andrew on a 25% share as reward for paying all staff, electricity and shed expenses as well as the provision of motorbikes and their operation.

Kokako 1 herd

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Production reached a farm record of 176,159kg milksolids, from 425 cows at peak, against a budget of 164,000kg MS. Total income actually received over the year was buoyed up by the large deferred income still being received based on the previous years $8.40/kg milk price of which $1.50/kg came in over the July to October period. Cull cow prices were also very high with Kokako 1 averaging $776/head for the 87 cows sold. Cash income relating to the 2014/15 year amounted to $669,558 which was well below the original budget based on a $6/kg milk price of $935,673. Total expenses before depreciation at $524,598 $2.98/kg MS compare to the previous year’s $513,774, and a budget of $543,682. While on a cash basis the farm made a cash surplus of $144,960 from a taxation perspective including the drop in livestock value at around $230/head and depreciation Dairy unit 1 made a Net Deficit of $24,310.

DAIRY TWO

On Dairy Unit 2, with Jason and Shelley Sabin in their sixth year as 50/50 share milkers, the production reached a new record of 245,851kg MS, with around 565 cows milked at peak, compared to a budget of 216,500kg MS. Total income for the Trust was $545,438 with the drop to a $4.40/kg milk price against a budgeted income of $791,850 at a $6/kg milk price. Expenses, excluding depreciation, at $338,659, $1.38/kg MS compare with $351,264 the previous year and a budget of $359,340. Repairs and maintenance were around $6,000 less than budget, feed costs were around $20,000 less than budgeted. The high level of production on a per ha basis and the well set up nature of the farm contribute to the extremely low level of expenses on a per kg of milk solids basis. The cash surplus for Dairy 2 amounted to $206,779. As the livestock are owned here by the sharemilker no change in livestock value applies but after allowance for depreciation the net surplus was $176,282.

DAIRY THREE

On Dairy Unit 3, the farm was managed for the eighth 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 97,104kg MS, from 245 cows milked, compared to a budget of 90,000kg MS.

Cash income reached $329,467 as against a budget of $559,575. Expenses at $321,095, $3.31/kg MS compare to a budget of $316,883. The cash surplus for the year was only just breakeven at a surplus of $8,372 from a cash perspective. Once adjustments for change in livestock value and depreciation were taken into account the net deficit was $132,483. Richard and Sue have continued their involvement in providing on farm training on Kokako Dairy 3 for a group of local Taratahi farm

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trainees. The farm has looking better for the additional repairs in terms of fencing work etc that has been undertaken and we thank Richard and Sue for their input into this project.

DRYSTOCK UNIT

Jim Clarke continued the management of the drystock unit which he has done for the past 12 years since March 2003. The Trust is fortunate to have someone so dedicated to improvements in regard to fencing and tracks etc.

Total sheep numbers have progressively lifted over the last few years with replacements from our own ewe being kept on and no further replacement ewes were purchased in the 2014/15 year. In total 444 ewes were on hand at closing in addition to 112 replacement ewe hoggets and 135 mixed sex hoggets which have been finished and sold over spring 2015. Lambing % was average at around 118% Lamb weights reached a new record with an average of 18.53kg carcass weight up from 15.9kg last year. With the schedule at an average of $5.15/kg, the 356 lambs sold for an average of $95.54/lamb. The heavier weights can be attributed to the improved quality of finishing feed provided by plantain crops. 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 288 rising 2 year heifers were grazed on the drystock unit plus 186 rising 1 year heifers. These include stock from Dairy 1 and 3 as well as replacements grazed for Feek and 16 for Sabin and Co. The rising 2 year heifers returned to the dairy units at similar weights to the previous year at 377 to 386kg 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 $300,270 includes $246,123 of grazing income and $44,645 of stock trading. This was up around $20,000 on the previous year and up $40,000 on the budget due largely to $28,000 more in grazing income and $11,000 for from livestock sales. There was only a $2,175 loss on the change stock value from opening to closing. Total expenses for the drystock unit were $278,304 excluding depreciation and forestry compared to a budget of $251,060. This is up on budget with $10,000 more spent on additional fencing and water improvements. The cash surplus at the Drystock unit was $35,813 while the net surplus after adjustments for livestock value change and depreciation was $27,606.

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FORESTRY

Forestry expenses amounted to $13,847 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 silage, grass silage and maize silage. In total 209t of grass silage including 16ha of oats and 90t of barley and pea silage was harvested and transferred to the dairy units. A further 55t was harvested for use by the 269 cows from Dairy 2 wintered on grass, oats and silage for a month.

Only 10ha of maize was grown in the 2014/15 season with yield back up to 15t/ha despite an early frost soon after planting impacting on the crop. In addition 475t of maize was purchased from another grower and on sold to the dairy units.

The peas and barley grown for silage yielded well with 90t off 11ha. This year 16ha has been sown in peas and barley to go to the dairy units.

Jim Walsh, Shelley Sabin’s father has been doing weed control and has made an excellent job. It is now no longer necessary for the weed control to be done by air.

Income from feed grown and grazing of stock totalled $173,649 excluding the $164,164 for maize purchased and then on-sold. Income was less than budgeted with fewer replacements being grazed. This year numbers will be back up. Expenses excluding depreciation at $210,673 compared with $215,110 the previous year and up $20,000 on budget with more spent on feed costs in terms of baleage as well as on weeds and cropping. The Ngatira unit finished with a deficit of $38,531 after depreciation compared to a breakeven budget.

OUTLOOK FOR 2015/16

Pasture growth conditions have been slow throughout the winter and spring period with warmer weather interspersed with cold and windy periods. Pasture cover levels at the start of calving were lower as a result. As a result of the drop in forecast milk price to $3.85 on the 10th of August cow numbers were reduced on all the Dairy units with 20 cows sold from Kokako 1, 40 cows from the sharemilkers herd at Kokako 2 and 10 from the Kokako 3 herd. Despite the lower numbers additional

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feed has still been required to make up for poor pasture growth rates and production is down on all units. Production to the 23rd of November is 229,028kg MS down 10% on last season’s record of 255,239kg MS and down 6.5% on budget due to actions taken as a result of the lower milk price. The Fonterra milk price, for the current season which dropped to $3.85/kg has been revised to $4.60/kg MS but at present the global dairy prices are not supporting this level.

More area has been planted in chicory to help offset the dry period expected this summer.

This seasons lambing % is around 125% for the ewes and feed quality on the drystock is currently very good. Replacement livestock have regained the shortfall in liveweight from last year’s drought.

The Trust had held off paying more principal last year in favour of putting additional funds into a term deposit. This has put Kokako in a very strong position to withstand another low milk price year.

Kokako has also taken up the Fonterra Support loan which will provide additional funds interest free until May 2017.

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. It has been our pleasure to assist the Trust to achieve this most excellent result. Perrin Ag Consultants Farm Supervisors

Cows on Chicory at Kokako 1

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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 2014 INCOME

Farm Surpluses(Deficits):

Drystock 27,606 18,027

Dairy 1 (24,310) 670,345

Dairy 2 176,282 634,711

Dairy 3 (132,483) 396,567

Ngatira (38,531) 8,460

Other Income 45,808 29,923

TOTAL INCOME 54,372 1,758,033

Plus Unrealised gain on tree crop 71,606

$54,372 $1,829,639

LESS EXPENDITURE

Administration Costs 245,143 177,414

Interest 63,266 82,320

Forestry Costs 13,847 15,809

Taxation 63,570 181,143

TOTAL EXPENDITURE 385,826 456,686

SURPLUS AFTER TAX $(331,454) $1,372,953

-1,000,000

-500,000

0

500,000

1,000,000

1,500,000

$

SURPLUS AFTER TAX

Net Operating Surplus -$673,457 $767,578 $938,502 $537,425 $386,563 $1,372,95 -$331,454

2009 2010 2011 2012 2013 2014 2015

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Administration Costs:

2015 2014 ACC 3,845 5,286 AGM Expenses 5,106 4,320 Audit Fees 5,500 5,500 Bank Charges 521 482 Consultancy 24,163 1,045 Entertainment Expenses 6,194 2,461 Farm Supervision 63,407 49,332 General Expenses 1,531 4,238 Printing Stationery & Advertising 8,657 12,005 Recruitment costs 8,397 0 Secretarial/Accountancy/ costs 72,915 46,558 Share Register 4,755 7,259 Subscriptions 3,211 1,142 Trustee Fees & Expenses 29,227 35,936 Trustees Insurance 5,415 0 Valuation Fees 2,300 1,850

TOTAL $245,144 $177,414

2015 SURPLUS CONTRIBUTION BY UNITS

‐200,000

‐100,000

0

100,000

200,000

No 1 Dairy

No 2 Dairy

No 3 Dairy

Drystock

Other

Ngatira

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Cashflow: A simplified cashflow overview for the year is:

2015 2014

CASH ON HAND 1 JULY 237,233 95,997

Add

Cash from Operating activities (after tax) 452,031 1,074,203

Total Cash Available 689,264 1,170,200

Less

Equipment purchases/building additions 55,431 63,369

Bank loan repayments 50,000 730,037

Owners Distributions 115,771 139,561

Total Payments 221,202 932,967

CASH ON HAND 30 JUNE $468,062 $237,233

DISTRIBUTIONS 2015 2014

Education Grants 15,800 16,620

Kaumatua Grants 61,225 62,825

Owners Grants 52,662 59,112

Marae Grants 1,000 1,000

TOTAL $130,687 $139,557

CAPITAL EXPENDITURE 2015

Dairy no 1 – Drafting Alterations 2,302

Dairy no 2 - Irrigator 5,610

Dairy no 3 – Water Troughs 4,957

- House Oven 1,387

- Feed out Wagon 12,600

- Tractor 16,500

- Tip Trailer 10,000

- Loader Forks 2,075

TOTAL $55,431

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Assets:

2015 2014

Bank deposits 468,061 274,181

Current Assets (Receivables) 82,616 620,935

Tax Refund 95,309

Livestock 1,271,460 1,535,985

Shares 2,655,181 3,191,884

Land & Buildings 15,310,714 15,349,156

Vehicles & Equipment 270,607 262,545

Trees 652,784 652,784

NZU’s (carbon credits) 52,956 33,403

TOTAL ASSETS $20,859,688 $21,920,873

Land is recorded at the market valuation as assessed by an independent registered valuer as at 30 June 2012. Livestock and shares are at market value. Buildings vehicles and equipment at cost less depreciation. Fonterra share value declined by $515,043 (17%). Market price of $4.80 at 30th June since recovered to $5.47 per share. ($348,564 gain).

30.6.15

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Liabilities:

2015 2014

Current Liabilities (Accounts payable) 175,155 205,695

Westpac Bank Mortgage 1,068,006 1,118,006

Unclaimed Dividends 156,473 156,557

TOTAL LIABILITIES $1,399,634 $1,480,258 The Westpac Bank fixed loan interest rates are between 5.40% and 5.60%. Bank Overdraft rate is 7.30% with a limit of $300,000. Net Equity:

2015 2014

Total Assets 20,859,688 21,920,872

Total Liabilities 1,399,634 1,480,257

Net Equity $19,460,054 $20,440,615

Net Equity per share $13,900 $14,574

Net Equity/Mortgage

02,000,0004,000,0006,000,0008,000,000

10,000,00012,000,00014,000,00016,000,00018,000,00020,000,00022,000,000

$

Net Equity 13,387,96 15,848,54 16,900,03 18,197,40 19,945,961 20,403,974 19,460,054

Stock and shares 3,135,911 3,525,305 3,677,042 3,883,736 5,415,778 4,727,869 3,926,641

Mortgage 2,959,284 2,936,609 2,486,397 1,874,938 1,848,043 1,118,006 1,068,006

2009 2010 2011 2012 2013 2014 2015

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Owners: The Trust comprises 1400 shares held by 1644 owners. We hold addresses for 587 owners (35.7%) and 437 of those have provided their bank accounts.

64%

9%

26%

With address/nobank accountWith address andbank accountNo details

Murray Patchell Secretary

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KOKAKO TRUST - RISK ASSESSMENT RISK TYPE CONSEQUENCES MITIGATION/OUTCOMES

Weather Extreme Dry/Extreme Wet

Secure water supply system Grow on farm summer crops Maintain drainage systems and access ways Don’t overstock Ensure high ground availability Compliant effluent disposal

Dairy Payment/Financial risk

Low Milksolid payment Maximise production Judicious use of supplementary feed Maintain Hygiene Regular equipment maintenance Frequent communication with bank Regular budget updating and review of spending Review of distribution policies Up to date insurance valuations and policies Diversification ( dairy, drystock, forestry)

Livestock High Deaths/Disease Maintain regular animal health procedures and checks Frequent farm and stock security checks Regular stock turnover

Operating Costs Budget overuns Clear authorisation and approval process Regular equipment and asset maintenance Competitive quoting Regular review of spending versus returns Close communication on adverse events Use of modern technology

Health & Safety/Legislation

Failure to comply with legislation Injury or death to staff or visitors

H & S Policy – independent adviser Regular H & S meetings. Inductions for visitors Liability Insurance Know and comply with legislative requirements Monitor legislative changes

Employees/Contractors Resignations/contract terminations/loss of experienced staff

Regular staff evaluations Good communication with employees and sharemilkers on goals and expectations Good contracts with extensions to keep top quality staff.

Management Governance and management do not show leadership and underperform

Regular Trustees meetings on and off farm Engage best quality advisers Trainee Trustee programme Full participation and communication Trustees Governance training Regular planning and goal setting

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EDUCATION GRANTS POLICY 2015

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 drawn certificate or a letter of acceptance to enrolment at the education institution as evidence of fees paid.

6. Students attending free courses are not precluded from receiving a grant provided all other criteria are met.

7. Incomplete or late applications may be rejected.

Page 25

KOKAKO TRUST

2015 EDUCATION GRANTS 75 grants of $200 each were awarded to the following recipients to assist with tertiary education. 17 applications were 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. First Name Last Name Institution Course Jamie Allan Auckland University of

Technology Bachelor of Computing & Mathematical Sciences

Koroheke Baker Artmakers Community Artists Trust

Diploma in Freelance Animation

Toni Anne Bennett University of Waikato Bachelor of Management Studies Ruka Broughton University of Waikato Bachelor of Law & Management Studies Mandie Brown Te Wananga O Raukawa Poutuarongo Kaitiakitanga Putaiao Sam Bullock University of Auckland Bachelor of Engineering Shjan Colbert University of Waikato Bachelor of Arts Summer Collier Waiariki Institute of Technology Bachelor of Applied Social Science Chanel Coromandel University of Waikato Bachelor of Management Studies Te Atawhai Curtis Victoria University of Wellington Te Tohu Paetahi Ako Stevie Jean Gear University of Waikato Bachelor of Social Work Aroha Gillibrand Waikato Institute of Technology Bachelor of Nursing Hoani Te Whare Porera Arthur

Hakaraia Victoria University of Wellington Masters of Social Science

Sarah Hakaraia Sir George Seymour National College of Aviation

Certificate in Travel,Tourism & Business

Parewahaika Harris University of Waikato Post Grad Diploma in Psychology Wiremu Harris Waiariki Institute of Technology Certificate in Automotive Engineering Irihapeti Hatu Sir George Seymour National

College of Aviation Certificate in Travel,Tourism & Business

Charmaine Jensen Waiariki Institute of Technology Bachelor of Applied Social Science Turene Jones University of Auckland Bachelor of Art (Honours) Cheyane Kahukiwa Unitec New Zealand Bachelor of Computing Systems Lani Kereopa Te Wananga O Raukawa Bachelor of Teaching Ngaire Khan Te Wananga O Aotearoa Bachelor of Social Work Joshua Khan Te Wananga O Aotearoa Te Toi Paematua Whakairo Tahlia Kingi Victoria University of Wellington PhD in Psychology Te Taiawatea Amelia

Kingi Auckland University of Technology

Bachelor of Maori Development

Manurere Kiriona Devonshire

Otago Polytechnic Certificate of Health Science

Jasmine Macown University of Waikato Bachelor of Management Studies Teariki Manarangi University of Waikato Master of Management Studies Natasha Martin University of Otago Bachelor of Medicine & Surgery George Te Whanau Urikore

McDonald Waiariki Institute of Technology Contract Programmes- Engineering & Related Technologies

Tracey McQueen Bay of Plenty Polytechnic Quantity Surveying - Level 6 Tandi McRae Victoria University of Wellington Masters in Education Siobhan Mikaere The Hairdressing Academy Ltd Certificate in Beauty Therapy Karen Neate Charles Sturt University Bachelor of Business Brooke Ngarimu University of Auckland Bachelor of Architecture Ramona Ngarimu ATC New Zealand Diploma in Ministry & Leadership

Page 26

First Name Last Name Institution Course Violet Waereti Kura

Pere Waiariki Institute of Technology Bachelor of Teaching

Dominique Phillips Quantum Education Group QT Limited

Advanced Certificate in Information Technology

Janet Phillips Waiariki Institute of Technology Diploma in Interior Design Kayla Polamalu Victoria University of Wellington Bachelor of Arts & Law Moana Jade Potaka Eastern Institute of Technology Bachelor of Business Cynthia Pryor Te Whare Wananga O

Awanuiarangi Doctor of Philosophy

Dexter Rapana University of Auckland Bachelor of Arts & Law John Henry Rapana Waiariki Institute of Technology Graduate Diploma In Resource

Management Talia Reily University of Auckland Bachelor of Science Christian Rhind University of Melbourne Graduate Research Programme

Economics Shineece Richmond The University of Queensland Bachelor of Psychological Science Jade Rika Waiariki Institute of Technology Diploma in Accounting Taylor Rika Taratahi Agricultural Training

Centre Certificate in Agriculture

Charlie Rohe Sir George Seymour National College of Aviation

Certificate in Travel, Tourism & Business

Tonisha Rohe Auckland University of Technology

Bachelor of Social Science

Kerehi Ruaine University of Waikato Bachelor of Science Maraea Ruru Waikato Institute of Technology Management Rochelle Selwyn University of Auckland Bachelor of Art (Honours) Jocelyn Simpkins Te Wananga O Aotearoa Bachelor of Social Work Carina Stanley University of Auckland Bachelor of Commerce Jared Stanley University of Otago Bachelor of Physical Education Nathan Stanley University of Otago Bachelor of Surveying Rachel Taipari Manukau Institute of Technology Bachelor of Social Work Adam Tapsell University of Auckland Bachelor of Arts & Law Andrea Tapsell University of Waikato Masters in Education 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 Bachelor of Science Rose Tapsell Unitec New Zealand Bachelor of Performing & Screen Arts Te Kahui Tapsell University of Otago Bachelor of Medicine & Surgery James Tapsell Kururangi Massey University Bachelor of Design Kataraina Tims University of Auckland Bachelor of Arts Joseph Tuahine University of Waikato Ph D in Maori Studies Kate Walker University of Auckland Bachelor of Science Thomas Walters Waiariki Institute of Technology Bachelor of Nursing Jamie Waterreus

Wharepapa University of Waikato Bachelor of Law

Pirihira Whata Waiariki Institute of Technology Bachelor of Applied Management Chrissie Zurcher Massey University Masters in Education Amy Theresa Marie Uluave Waiariki Institute of Technology Bachelor in Tourism Management

Page 27

REV

IEW

OF

2014

GR

ANTS

In 2

005

the

Trus

t ado

pted

an

owne

rs g

rant

inst

ead

of a

div

iden

d. T

he g

rant

is p

aid

in b

ands

to o

wne

rs

who

pro

vide

thei

r add

ress

es a

nd b

ank

acco

unts

as

per t

he a

ttach

ed s

ched

ule.

Last

yea

r $70

,000

was

set

asi

de fo

r pay

men

t of o

wne

rs g

rant

s.In

201

0 a

min

imum

gra

nt p

aym

ent o

f $50

was

set

, inc

reas

ed to

$75

in 2

011.

Kaum

atua

gra

nts

are

paid

at t

he ra

te o

f $25

0 at

age

65

year

s.

Hig

hlig

hts:

- 201

4 O

wne

rs G

rant

pay

men

ts w

ere

$52,

662,

an

incr

ease

of 5

7% o

ver w

hat w

ould

hav

e be

en p

aid

as a

div

iden

d.- 3

69 o

wne

rs w

ho w

ould

get

less

than

$50

or n

othi

ng re

ceiv

ed $

75 e

ach.

- Act

ual K

aum

atua

pay

men

ts w

ere

$61,

225

agai

nst t

he b

udge

t of $

60,0

00.

KO

KAK

O T

RU

ST

$0

$10,

000

$20,

000

$30,

000

$40,

000

$50,

000

$60,

000

$70,

000

$80,

000

2011Education

2012Education

2013Educaton

2014Education

2015Education

2011Owners

2012Owners

2013Owners

2014Owners

2015Owners

2011Kaumatua

2012Kaumatua

2013Kaumatua

2014Kaumatua

2015Kaumatua

CO

MPA

RAT

IVE

PAYO

UT

Page 28

Kok

ako

Trus

tM

inim

um p

aym

ent $

75

Gra

nt s

truct

ure

for d

istri

butio

n of

$70

,000

(tax

free

) on

basi

s of

pro

vidi

ng a

ddre

sses

and

ban

k ac

coun

ts.

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EGO

RY

1C

ATEG

OR

Y 2

CAT

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umbe

rS

hare

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ers

Shar

ehol

ders

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rant

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l gra

nts

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sure

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l div

iden

dsTo

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with

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ith a

ddre

ss a

nd n

o ad

dres

s an

dto

be

paya

ble

to

to

Exp

osur

e to

Div

iden

dth

at w

ould

Num

ber

addr

ess

and

bank

a/c

with

out b

ank

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no

bank

acc

ount

paid

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y 1

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egor

y 2

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ve b

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0032

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$25.

00$1

,958

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Net

pay

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o C

ateg

ory

1 sh

areh

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ill in

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se b

y 63

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om $

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.If

all C

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ory

1 &

2 s

hare

hold

ers

clai

m th

e gr

ant t

he to

tal p

ayou

t will

incr

ease

by

104%

to $

68,8

30.

A p

erio

d of

12

mon

ths

is a

vaila

ble

to m

eet r

equi

rem

ents

and

cla

im g

rant

s.

Ran

ge

DIV

IDEN

D P

AYM

ENT

SHAR

EHO

LDER

SG

RAN

T PA

YMEN

T

Page 29

2015 OWNERS GRANT POLICY An Owners grant in lieu of a dividend was approved at the AGM on 28 November 2015. This grant is payable to the Owners registered at 28 November 2015 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 2015 Owners Grant is as follows:‐

1. For identification purposes the grant will be called the “2015 Owners Grant”. 2. The sum of $70,000 has been set aside for 2015 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 30

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)

Page 31

Annual General Meeting - Deloitte US · 449,266kg MS. The milk solids price for the previous 4...

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