Annual Report 2017 WAIRARAPA MOANA INCORPORATION WAIRARAPA MOANA TRUST
Annual Report 2017
WAIRARAPA MOANA INCORPORATION
Message from the Chair Toi tū te kupu, toi tū te mana, toi tū te whenua. Mā te tika te hē ka tika, penā ngā whakairo Te Kete Kaiora i runga i te whare o Wairarapa Moana. Ko te tikanga o te kōwhaiwhai mangotipi, “Kia mate ururoa, kei mate wheke”. Nō reira me titikaha tātau ki te pupuritia ki ngā kupu o a tātau t ī puna me a rātau moemoea. Nō reira, me mahi tahi tātau, nā te mea, mā te kotahitanga e whai kaha ai tātau.
Kingi Smiler
Heoi anō, kāore e wareware a tātau tī puna kua haere ki te korowai o Ranginui. Nō reira, waihō ake ko te aka o te rangi ki a rātau, kua whetūrangitia. Ko te aka o te whenua ki a tātau nei te hunga ora. Tihei mauri ora.
E ngā iwi, e ngā mana, ka huri ngā mihi ki a koutou. Kei te mahi tonu te poari nei, hei whai oranga Wairarapa Moana whānui tonu. Mā te kotahitanga e puāwai tahi mo ake tonu atu. Tēnā koutou katoa.
Commodity milk prices lifted significantly in 2017 and the initial outlook for 2018 is also strong. Milk prices increased from $3.90 per kgMS in 2016 to an average of $5.57 in the 2017 financial year and compared to our budget of $4.00. Also positive was milk production which increased by 4% when the overall New Zealand dairy industry was down by 3% as a result of the very wet spring and costs were similar to last year. The improved market conditions together with excellent farm management from our team in challenging weather conditions produced an outstanding result.
The 2017 financial results for forestry were in line with expectations and very good increases were achieved in Miraka Value Add as well as Other Income. The table below indicates that the cash surplus after payment of interest was approximately $7.1million better than 2016 and $3.9million better than budget.
2017 Actual
2016 Actual
Milk Price
$5.57
$4.00
$3.90
Gross Profit / (Loss) from Dairy Operations
6,233
2,183
(46)
Net Forest Income
2,825
2,991
1,490
Milk Value Add Income – Miraka
622
526
368
Other
363
20
17
Total Income
2
(in $000’s) 2017 Budget
10,043
5,730
1,829
Less Administrative Expenses before Interest, Taxation, Depreciation and Amortisation
1,110
933
940
Operating Profit / (Loss)
8,933
4,797
889
Less Interest
3,836
3,634
3,406
Cash Surplus / (Loss) after Interest Costs
5,097
1,163
(2,517)
ANNUAL REPORT 2017
The farm and forestry benchmarking results (figures 1, 2, and 3 on pages 8 and 9) indicate that we are still performing above industry averages in a number of areas. Both our manager farms and our sharemilkers are delivering at scale compared to their smaller peer farms within the benchmarks. The WMI forestry returns still significantly exceed industry returns. As noted in last year’s annual report Wairarapa Moana is required to comply with International Financial Reporting Standards (IFRS) and
accordingly all assets are to be recorded at market value every year (even though WMI will never sell its’ land) and all such changes are now recorded in the Statement of Comprehensive Income. The financial results are, therefore, significantly different than the previous generally accepted accounting standards (GAAP) applied in New Zealand. The table below summarises the Comprehensive Income for 2016 and 2017.
ACTUAL 2017 Net Profit / (Loss) After Tax
(in $000’s) BUDGET 2017
ACTUAL 2016
6,628
353
(2,894)
Revaluation (Devaluation) of Property
6,325
(9,000)
(9,924)
Other Changes (net)
1,749
3,948
4,217
(8,074)
(5,042)
(5,623)
14,702
(4,688)
(8,517)
Other Comprehensive Income / (Loss) for the year:
Comprehensive Income / (Loss) for the year
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The Total Comprehensive Income for 2017 was approximately $14.7million which was $23.4million better than 2016 and ahead of budget by $19.4million. The most significant change was the increase in net profit after tax of $9.5million and land values (net of other asset changes) of $13.8million in 2016 and also a similar magnitude compared to budget for 2017.
Waikato River Plan Change will have far-reaching effects on our dairy farm The proposed new Waikato River Plan Change by the Waikato Regional Authority will have farreaching effects on our dairy farming practices in future. These changes and potential impacts are being closely monitored by our farm team and the Committee to ensure we are wellpositioned to minimise any impacts on our business.
Miraka launches its first two new consumer products Taupo Pure and Whaiora This year’s annual report cover depicts the progress Miraka has made from the farm gate to the globe with our value growth strategy. The launching of our two consumer brands: Taupo Pure in New Zealand and China; and Whaiora in New Zealand, Malaysia and Singapore this year is an exciting new milestone and opportunity. This is ahead of our original expectations and we expect a gradual
4
ANNUAL REPORT 2017
development of the market for these products. It is likely to take two to three years before they contribute significantly to Miraka earnings. The introduction of the Te Ara Miraka programme for milk supply payments saw four of our farms ranked in the top ten suppliers for Miraka, a major achievement and acknowledgement of their performance and also resulted in additional earnings for WMI. Miraka has continued to perform despite tough market conditions. Next year Miraka expects to be at full capacity for both wholemilk powder and UHT products and is considering other options for expanding our milk supply base. The overall equity of WMI is $206million and a debt ratio of 22.6% provides us with a very strong balance sheet. In addition, if the current milk price trend for 2018 ranging from $6.30 to $6.60 eventuates, this will provide the opportunity to further reduce debt. The Committee recommends the following distributions for 2017: Gross Dividend Educational/ Marae Grants Dividend
$800,000 $90,000
This year’s gross dividend will be increased from $400,000 to $800,000 in recognition of this year’s financial result and the positive outlook for milk prices in 2018.
WAI 85 The voting results from last year’s AGM overwhelmingly confirmed shareholder support for the Committee to continue to resolve our Wai 85 claim directly with the Crown. The Crown has taken the position that our concerns need to be addressed by the Ngāti Kahungunu ki Wairarapa Tamaki Nui ā Rua Treaty Trust (NKKWTNR). As a result of the Crown response we have filed a new claim with the Waitangi Tribunal to lands originally taken by the Crown to build the Whakamaru Dam system. To date we have not received confirmation from the Waitangi Tribunal as to whether or not they will hear our claim. Furthermore, NKKWTNR have made no specific provision or acknowledgment of our Wai 85 claim to date, in the Agreement in Principle negotiated by them with the Crown.
In addition, we held a shareholders update meeting in Masterton on August 12th 2017 and it was agreed that Mr Kim Workman would facilitate a meeting with NKKWTNR to endeavour to resolve our Wai 85 claim. We will update the shareholders on the outcome from these meetings. Should we not be able to find a satisfactory resolution, then we may have no alternative but to recommend to shareholders to vote against ratification of the proposed NKKWTNR Treaty Agreement with the Crown later this year. Finally, I acknowledge the support and contribution of my fellow committee members Anne Carter, Murray Hemi, Te Horipo Karaitiana as well as our new member this year Sonya Rimene and the valuable contribution from Dr Gavin Sheath and our Farm Business Advisory Group. Kingi Winiata Smiler chairman wairarapa moana incorporation
WAIRARAPA MOANA INCORPORATION
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Key Performance Measures
$6.6
7.14
million
Net profit after tax Increasing from a loss of ($2.8) in 2016 due to a $1.67 milk price increase, an increase in livestock values and an increase in forestry values.
5.29
percentage
percentage
Return on equity
Return on Assets
Increased 8.60 percentage points from the 2016 year.
Increase from (3.22) in 2016.
Growth and Risk Measures
$1.43
$14.30
22.6
million
percentage
Net Cashflows
Bank Debt
Received were $2.7m more than 2016.
24.0 in 2016 year.
Net Profit (Loss) After Tax
million
Net Equity Increase in equity from 2016. The increase in earnings and the increase in livestock values and land values contribute to that.
Dividends Paid
16 2.0
15
14 12
1.5
10 8 6
7.5
1.0
6.6
4 -2.8
-1.8
-0.1
0.4
0.4
0.4
0.0 2018 2017 2016 2015 2014 2013 2012
2018 2017 2016 2015 2014 2013 2012 Budget
Values in million’s of dollars
6
0.8
0.4 1.6
-2 -4
1.2
0.5
2 0
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ANNUAL REPORT 2017
Values in million’s of dollars
General Manager’s Report Tēnā koutou ngā uri o te Karu o te Ika a Mā ui, kei raro iho te pūrongorongo mō te tau 2017.
Nick Hume
The future for dairy farming is looking more and more solid with restrictions of further conversions throughout the country reducing the over-supply we have seen over the last few seasons.
The 2017 season has been a successful season for a number of reasons. As predicted the milk payout improved. We have had two low years of $4.40 and $3.90 payouts with the 2016/2017 payout improving to $5.57 per kilogram of milk solid (kgMS). The current season is looking positive with the current Miraka Ltd price range $6.30-6.60. Our costs of production on the dairy farms continued to reduce and we saw some impressive reproductive results. The farm woodlot harvest was successful meeting budget with a very strong price offered through the tender process from one bidder. WMI saw the sale of some vacant sections in the township which have helped reduce the losses from the township asset portfolio.
strongly to their vision “nurturing our world” and of course has close links to WMI’s vision and values. WMI was involved in the initial design of the programme and its standards (as were other shareholders and suppliers). The vision for Te Ara Miraka is to show “world leadership in sustainable on-farm milk production practices to produce first-class raw milk efficiently”. In order to do so the Miraka supplier base needs to be first in class in what they do on farm day to day. This being the first season Miraka ensured all its suppliers were supported through the process. WMI welcomed that support and helped lead the way with 4 of the WMI farms earning a place in the top 10 Miraka suppliers. Dan and Te Ara Miraka model consists of 5 Pou.
On the Farm Te Ara Miraka – Industry Leader This season we saw the launch of Te Ara Miraka. This is the Miraka farming with excellence programme. Te Ara Miraka supports and encourages a culture of excellence through the entire Miraka supply chain – from the farm to the customer. This links very
Nga Tangata
Taurikura
People
Prosperity
Te Taiao
Miraka
Environment
Milk
Nga Kau Cows
WAIRARAPA MOANA INCORPORATION
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$ per Ha
Figure 1: Forecast 2016/2017 Managed Farms Comparisons verses Benchmark 8000 7000 6000 5000 4000 3000 2000 1000 0 Income
EFS
Feed Costs
Bay of Plenty (134 Ha) WMI (2904 Ha)
Wages
Enabling
Total Costs
Waikato (124 Ha) North Island (128 Ha)
Te Ara Miraka consists of 5 pou; Nga Tangata (people), Te Taiao (environment), Taurikura (prosperity), Nga Kau (cows) and Miraka (milk). Under each pou there are mandatory and incentivised targets. Initially Miraka offered a 20 cent incentive to meet the standards. All of the standards are considered best practice for dairy farming, business and people management and something WMI is already working towards achieving and leading by example.
Source: Dairy NZ – Dairybase Economic Report 2016 as the last published Dairy NZ data on regional trends.
Figure 2: Forecast 2016/2017 Sharemilker Comparisons verses Benchmark 2500 Scale – $, MS per Cow or MS per Ha
Michelle Brice on Farm 2 earned 2nd place overall on 97 points out of 100. The average score across all Miraka suppliers was 59 out of 100 with WMI setting an internal average between the 12 farms of 85 out of 100. The team all stepped up to the challenge and embraced the spirit of Te Ara Miraka which is about delivering excellence in all we do to drive a connection with our customers. The farms are focused on improving their results further and have a friendly competitive spirit with one another. The results delivered $622,000 of income to the business which is a very good result for the first season.
2000 1500
The season that was
1000
The spring was a wet and cold one that the whole country experienced. Grass growth was behind previous averages. Early season production across the country was down and WMI was no exception. From November we entered a very dry and hot spell and it was looking like a drought was setting in. However in the new year the rain came again and we were able to claw back any lost production.
500 0
EFS per Ha
Costs per Ha
MS per Cow
MS per Ha
2017 WMI (2.8 cows/ha) 2016 Waikato (2.8 cows/ha) 2016 North Island Avg (2.7 cows/ha) Source: Dairy NZ – Dairybase Economic Report 2016 as the last published Dairy NZ data on regional trends.
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ANNUAL REPORT 2017
As indicated last year the team had identified a number of opportunities to improve the 2015/2016 result. It is pleasing to see we delivered on this. Production was 4,236,447 kgMS
which is our highest production on the block ever.
The dairy support farms need special mention with the heifers grown this year exceeding the targets. Well grown heifers will contribute to future reproductive results and herd production. The three dairy support managers of Mark, Scott and Alistair have developed a close working relationship and have supported one another to deliver the joint result.
WMI Annuity
Industry Stumpage Returns ($/unit) and WMI Annuity ($)
Some other key highlights were the improved reproductive results for the farms. The 6 week in calf rate (70%) and the cows not in calf rate (13%) have continued to improve. The NZ and regional averages were 65% and 18% respectively for 6 week in calf and cows not in calf rates. For large herds the result is seen as industry leading and something many other corporate farms are trying to replicate. WMI still want to improve both these numbers and the continued improvement plans will be enacted again this coming season.
Figure 3: Forest Lease Annuity Return compared to Stumpage Returns Stumpage Returns
200 180 160 140 120 100 80 60 40 20 0 1999
2001 2003 2005 2007 2009 2011 2013 2015 2017
The staff within WMI are a team that we should be proud of. They have a desire to continue to improve, learn and grow. This culture allows continued improvements to be undertaken with all the team wanting to be seen as doing the best for the owners interests and the industry. During the season we welcomed Simon McLachlan to the team. Simon’s joined WMI as a Farm Technical Analyst. Farming has changed today and the data that is generated can be moulded into useful information to make better decisions and improve performance. Simon has helped the farms look at their individual performance and use that information to improve. Simon also was responsible for supporting the delivery of Te Ara Miraka by helping the managers where required.
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Our Operations Managers David March and Phil McKinnon have left to take on other roles at the end of the season. Both have made a contribution during their time with WMI. We are pleased to announce that Denis Collins (formerly Milk Supply Manager at Miraka) has been appointed as the new Operations Manager. With the improvements in the 6 week in calf rate and cows in calf WMI has been able to make some strategic culling decisions. The focus over the next 2-3 seasons is to improve the herd. The current herd is on par with the NZ average. The focus will be to retain cows with higher production and breeding worth index numbers. In time this will lead to improved performance per cow and less cows over time. The focus on this is not only from a performance basis but also an environmental basis. Plan Change One was submitted in the Waikato and in time will have an affect on how farmers farm within the region. WMI has started to get ahead of this and for some time now has focused on what the environmental footprint of the block is in the region. This focus will continue and we look forward to presenting the improvements over time as we learn and change how and what we do on the land.
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ANNUAL REPORT 2017
Forestry The farm woodlot stage 1harvest was completed during the year. It was a smooth process with the chosen partner exceeding all of WMI expectations. The partner was not only the highest bidder but one that holds very similar values to WMI and has a strong focus of developing and fostering long-term relationships. Stage 2 will start in the spring and we look forward to more positive news from this part of the business. The annual annuity that WMI receives from Taumata Plantations Limited for the Northern and Southern Pouakani Forests continues until 2036. The annual price is inflation adjusted.
Miraka Limited Miraka launched its two first value added brands of Taupo Pure and Whaiora and we look forward to seeing those products on the shelves in NZ and Asia. Miraka executed its farming with excellence programme this season with great success and WMI took up the challenge to lead the way for all the Miraka suppliers. The equity accounted returns for Miraka continue to see returns in the Statement of Comprehensive Income and an increased value on the Balance Sheet. WMI has seen the value increase in this asset since its inception and the recent sales indicate that the value we show in the Balance Sheet is below what the market would be willing to pay for this asset.
Net Equity
Looking Ahead
Land values and livestock values have increased this season. The high returns in the log market also saw an increase in the forestry assets. Net equity (assets less liabilities) grew to $206m from $191m (this was a $15m increase) which saw the value per share increase to $4.44.
The budget milk price for the coming season is $6.00. This will return a good Net Profit after Interest and Tax (NPAT) result for WMI of $7.5m. The higher milk price will also lead to higher land and livestock prices which will flow into the Statement of Comprehensive Income. It is estimated WMI will see an additional $7-8m in comprehensive income on top of the NPAT result.
The Debt Position Debt has remained static throughout the season as was indicated in last year’s annual report. It is expected that debt will be reduced in the coming season. The focus over the next 5 years is to reduce debt.
The future for dairy farming is looking more and more solid with restrictions on further conversions throughout the country reducing the over-supply we have seen over the last few seasons. World demand for protein is increasing and the Miraka strategy of value add is starting to be developed. The vision of the Committee was to set up a value add business to control from the farm gate to the global market and partake in the profits right through the value chain. That vision is beginning to be realised and we look forward to updating the owners on those successes. Finally I would like to thank the staff of WMI for their support and efforts for the last 12 months. It has been challenging under the economic environment we operate in. I also would like to thank the Committee of Management for the governance and support. Nick Hume general manager wairarapa moana incorporation
WAIRARAPA MOANA INCORPORATION
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Financial Report Results in Brief WAIRARAPA MOANA INCORPORATION
NZ IFRS NZ IFRS NZ IFRS NZ IFRS NZ IFRS NZ IFRS (Estimate) (Estimate) Budget 2018 2017 2016 2015 2014 2013 12 Mths 12 Mths 12 Mths 12 Mths 11 Mths 12 Mths
STATEMENT OF COMPREHENSIVE INCOME (NZ IFRS) / STATEMENT OF PROFIT AND LOSS (GAAP) Commodity Milk Price per kg milk solids $6.00 $5.57 $3.90 $4.40 $8.40 $8.40
$000 $000 $000 $000 $000 $000
Revenue from Dairy Farming Operations Costs of Production Gross Profit From Dairy Farming Operations Total Other Income Gross Profit Administrative Expenses
27,517 24,591 (17,472) (18,358)
(46)
19,859 (20,188)
35,347 (21,128)
24,081 (22,080)
(329)
10,045
6,233
14,219
2,001
3,274
3,810
1,875
2,182
2,592
1,834
13,319
10,043
1,829
1,853
16,811
3,835
(1,018) (1,110) (940) (911) (822) (1,028)
Earnings before Interest, Taxation, Depreciation 12,301 and Amortisation (EBITDAF) Finance Expense Depreciation and Amortisation Expense Operating Profit/(Loss) after Financing, Depreciation and Amortisation Costs
18,380 (18,426)
(3,370) (1,560) 7,371
8,933 (3,836) (1,727) 3,370
889 (3,406) (1,656) (4,173)
942 (2,872) (1,523) (3,453)
15,989
2,807
(2,380) (1,548) 12,061
(2,596) (1,425) (1,214)
Other Items Realised Gain on Sale of ETS Credits – 265 – – – – Share of Profit (Loss) from Miraka Limited 850 265 453 2,590 3,390 1,127 Gain on Sale of New Zealand Communications Limited – 614 – – – – Grants – Wairarapa Moana Trust (85) (85) (78) – – – Revaluation of Forestry Asset 500 2,200 542 964 445 (132) Revaluation (Devaluation) of Township 250 324 (14) (43) (160) (450) Revaluation (Devaluation) of Livestock 850 798 (1,462) (2,070) 96 1,101 Revaluation of Farm Woodlots – 105 906 164 659 360 Total Other Items 2,365 4,486 347 1,605 4,430 2,006 Net Profit/(Loss) Before Tax Income Tax Expense (Benefit) Net Profit/(Loss) after tax
9,736 2,200 7,536
7,856 1,228 6,628
(3,826) (932) (2,894)
(1,848) (98) (1,750)
16,491 434 16,057
792 – 792
Total Other Comprehensive Income/(loss) for the year Items that will not subsequently be reclassified to profit or loss: Revaluation (Devaluation) of Property, Plant and Equipment Revaluation of Pre 1990 ETS Carbon Credits Income Tax Relating to Comprehensive Income Movements
5,000 100 450
6,325 265 554
(9,924) 2,810 (483)
7,888 71 535
12,445 – –
5,550 7,144 (7,597) 8,494 12,445
999 – – 999
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ANNUAL REPORT 2017
Results in Brief WAIRARAPA MOANA INCORPORATION Continued/
NZ IFRS
NZ IFRS NZ IFRS NZ IFRS NZ IFRS NZ IFRS (Estimate) (Estimate) Budget 2018 2017 2016 2015 2014 2013 12 Mths 12 Mths 12 Mths 12 Mths 11 Mths 12 Mths $000 $000 $000 $000 $000 $000
Items that may subsequently be reclassified to profit or loss:
Movement in Cash Flow Hedges Share of Other Comprehensive Income from Miraka Limited Revaluation of Financial Assets available for Sale Reclassifications to Profit and Loss Income Tax Relating to Comprehensive Income Movements
400 1,500 – – 85
512 1,384 (92) (767) (108)
(1,444) 2,398 767 – 253
(994) (6,382) – – –
– 4,157 – – –
– (1,998) – – –
1,985 929 1,974 (7,376) 4,157 (1,998) Total Other Comprehensive Income/(loss) net of income tax 7,535 8,073 (5,623) 1,118 16,602 (999) Total Comprehensive Income (Loss) for the Year
15,071
14,701
(8,517)
(632)
32,659
(207)
STATEMENT OF CHANGES IN EQUITY Opening Shareholders’ Equity 206,205 191,904 200,822 203,646 171,491 172,185 Net Profit/(Loss) for the year Total other comprehensive income Total comprehensive income for the year
7,536 7,535
6,628 8,073
(2,817) (5,623)
(1,750) 1,118
16,057 16,602
792 (999)
15,071
14,701
(8,440)
(632)
32,659
(207)
Contributions by and distributions to shareholders Movements in Reserves – – – 77 – – Dividend Declared (400) (400) (478) (2,269) (504) (487) Total contributions by and distributions to shareholders
(400)
(400)
(478)
(2,192)
(504)
(487)
Closing Shareholders’ Equity 220,876 206,205 191,904 200,822 203,646 171,491 Closing Shareholders’ Equity is made up of the following components: Share Capital 46,739 46,739 46,739 46,739 46,739 46,739 Retained Earnings 41,417 33,881 27,253 30,548 41,537 8,878 Reserves 132,720 125,585 117,912 123,535 117,989 118,493 Closing Shareholders’ Equity
220,876 206,205
191,904 200,822 203,646
171,491
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Results in Brief WAIRARAPA MOANA INCORPORATION Continued/
Biological Assets – Livestock Other Current Assets
NZ IFRS
NZ IFRS NZ IFRS NZ IFRS NZ IFRS NZ IFRS (Estimate) (Estimate) Budget 2018 2017 2016 2015 2014 2013 12 Mths 12 Mths 12 Mths 12 Mths 11 Mths 12 Mths $000 $000 $000 $000 $000 $000
16,205 10,358
15,355 10,637
13,693 5,010
14,060 4,275
14,410 10,382
11,926 5,413
Current Assets 26,563 25,992 18,703 18,335 24,792 17,339 Property, Plant and Equipment (Wairarapa Moana Farms and House) 183,154 178,154 172,324 182,329 166,645 150,837 Investments – Miraka 36,200 33,850 30,757 20,799 25,979 16,187 Investments – Other 3,666 3,666 3,909 3,681 3,646 3,740 Investment Property (Mangakino Township and Forestry Lands) 31,998 31,248 28,740 28,347 27346 27,542 Intangible Assets (Carbon Credits) 2,936 2,936 4,300 1,490 1,419 188 Biological Assets – Farm Woodlots 2,175 2,175 3,090 2,185 2,020 1,361 Non-Current Assets 260,129 252,029 243,120 238,831 227,055 199,855 Current Liabilities 5,028 5,028 3,219 5,564 6,462 3,928 Bank Debt 59,000 62,887 62,887 47,700 39,120 39,156 Other Non-Current Liabilities 1,788 3,901 3,813 3,080 – – Total Liabilities
65,816
71,816
69,918
56,344
45,582
43,084
Shareholders’ Equity 220,876 206,205 191,904 200,822 206,265 174,110 KEY PERFORMANCE INDICATORS Growth/(Reduction) in net worth on opening balance $ 14,671 14,301 (8,918) (5,443) 32,155 (694) Growth/(Reduction) in net worth on opening balance % 7.11% 7.45% -4.44% -2.64% 18.47% -0.40% Return on Equity 6.82% 7.13% -4.40% -0.31% 15.83% -0.12% Return on Assets 5.26% 5.29% -3.22% -0.25% 12.97% -0.10% Bank Debt as a % of total assets 20.58% 22.62% 24.02% 18.55% 15.53% 18.03% STATEMENT OF CASH FLOWS Cash Flow from Operating Activities 5,500 1,326 (5,485) 3,015 6,212 7,043 Cash Flow from Investing Activities – (418) (8,293) (8,758) (6,358) (5,501) Cash Flow from Financing Activities (6,000) 531 12,532 8,798 (601) (2,226) Net Increase in Cash and Cash Equivalents (500) 1,439 (1,246) 3,055 (747) (684) Add Cash and Cash Equivalents at Start of Year 1,220 (219) 1,027 (2,028) (1,281) (597) Cash and Cash Equivalents at End of Year 720 1,220 (219) 1,027 (2,028) (1,281) * Note – 2014 and 2013 years are estimated under NZ IFRS but were prepared and audited under GAAP.
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ANNUAL REPORT 2017
Policies A summary of the Wairarapa Moana Ki Pouakani Incorporation (“the Incorporation”) audited financial statements for the year ended 31 May 2017 is shown in the Financial Summary section of this annual report, also shown is the summarised 31 May 2018 budget which has been drawn from the full 31 May 2018 budget approved by the Committee of Management on the 17 July 2017. The summary financial statements have been prepared in accordance with FRS-43 Summary Financial Statements. The 31 May 2018 Budget includes estimates and assumptions for the revaluations of assets. These estimates are made with the available information at the time and seasonally and market movements may alter those numbers. The key variable to those estimates is milk price. The Committee of Management has taken a chosen to use $6.00 as the budget milk price based on current market conditions. The full financial statements have been prepared in accordance with Generally Accepted Accounting Practice in New Zealand (“NZ GAAP”). They comply with New Zealand equivalents to International Financial Reporting Standards (“NZ IFRS”) and other applicable Financial Reporting Standards, as appropriate for profit-oriented entities. The Incorporation has adopted External Reporting Board Standard A1 Accounting Standards Framework (for-profit Entities Update) (“XRB A1”). For the purposes of complying with NZ GAAP, the Incorporation is eligible to apply Tier
2 For-Profit Accounting Standards (New Zealand equivalents to International Financial Reporting Standards – Reduced Disclosure Regime (“NZ IFRS RDR”)) on the basis that it does not have public accountability and is not a large forprofit public sector entity. The Incorporation has elected to report in accordance with NZ IFRS RDR and has applied disclosure concessions. This is the first year the financial statements have been prepared in accordance with NZ IFRS RDR (prior to this the Incorporation prepared financial statement in accordance with New Zealand Statements of Standard Accounting Practice and Financial Reporting Standards (collectively known as “Old GAAP”). Therefore, the summary financial statements for the years ended 31 May 2017, 31 May 2016 and 31 May 2015 are shown in accordance with NZ IFRS RDR. The summary financial statements are presented in New Zealand dollars and amounts are rounded to the nearest thousand dollars ($000). The amounts stated in the summary financial statements have been extracted from the full financial statements of the Incorporation, which were authorised by the Committee of Management on 17 July 2017, of which an unqualified opinion has been issued by our auditors. Unqualified audit opinions have been issued by our auditors for all years presented in the summary financial statements. Copies of the full audited financial statements are available from the Incorporation.
WAIRARAPA MOANA INCORPORATION
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Disclosures RELATED PARTY RELATIONSHIPS, TRANSACTIONS AND BALANCES
2017 2016 $000 $000
Committee Members Committee member fees paid for the year Committee member expenses paid for the year (mainly travel and accommodation) Indemnity Insurance K Smiler (Chairman) – Executive Director Fees and Costs
35
20
39 15 229
40 15 212
318
287
–
–
205
206
–
–
Payable at 31 May Key Management Personnel Remuneration paid during the year Payable at 31 May
Associates The Incorporation owns 33.64% (2016 : 32.6%) of Miraka Limited, a milk processing company located in Taupo with a balance date of 31 July. During the year milk sales to Miraka Limited accounted for 85% (2016 : 87%) of the Incorporation’s revenue.
Cash Dividends Received from Miraka during the year
2017 2016 $000 $000 – 980
Owed by Miraka at 31 May May milk proceeds Retrospective payments for the season
2,033 4,288
677 1,748
6,321
2,425
No debts from Miraka have been written off or forgiven during the year. All transactions with Miraka occur on an arm’s length basis. There are no commitments or contingent liabilities relating to the investment in Miraka. During the 2017 financial year the Incorporation purchased additional shares in Miraka Limited from another shareholder, resulting in the purchase of an additional 711,368 shares at $2.03 per share, increasing the Incorporation’s interest in Miraka Limited to 33.6%.
16
ANNUAL REPORT 2017
Joint Venture The Incorporation is a 33%, equal interest, limited partner of Whai Huia Limited Partnership, established for the purpose of developing and researching milk proteins to develop higher value products. The partnership has a 30 June balance date. Funding contribution Payable to Whai Huia Limited Partnership at 31 May
2017 2016 $000 $000 208
204
–
–
No debts to Whai Huia Partnership Limited have been written off or forgiven during the year. All transactions with Whai Huia Partnership Limited occur on an arm’s length basis. There are no commitments or contingent liabilities relating to the investment in Whai Huia Limited Partnership.
WAIRARAPA MOANA INCORPORATION
17
Annual Report 2017
WAIRARAPA MOANA TRUST
Message from the Chair E te Iwi, piki ake ki ngā maunga tapu ko Pukeamoamo me Pukeahurangi. Titiro whakararo aku kamo ki te raparapa wai o Wairarapa, nō reira kia tapu hoki tātau nō te moana tapu ko Wairarapa. Deborah Davidson
Nō reira tēnā koutou, tēnā koutou, tēnā tātau katoa.
At our AGM 2016 we welcomed Wayne Pitau to the Trust. Wayne was nominated to replace Rutu Namana and was a perfect fit to take over the Wairarapa Moanatanga portfolio. Under this portfolio the Trust has continued to support the progression of our Wairarapa Moanatanga Whakakaha Paepae programmes – Te Rito o Te Reo Karanga and Te Pou Pūmau. We are excited to have recently continued support for the next stage of the karanga programme; Te Ihirangaranga o Te Reo Karanga. Our wāhine are now hosting wānanga on our t¯i puna Marae to continue to grow our wealth of knowledge and ability of our wāhine for the purpose of the Whakakaha Paepae programme. The final wānanga for Te Pou Pūmau will be held in August 2017. We are looking forward to hearing the final outcomes of Te Pou Pūmau, as well as what the next stage will be for our tāne. The Trust would like to thank the support of the office, Charmaine, Henare and Rutu Namana for beginning the Wairarapa Moana Whakakaha Paepae programme. We would also like to thank our whānau, the shareholders and descendants that have given their time, energy and love for their Marae to participate in this. Ngā mihi aroha ki a koutou katoa.
20
ANNUAL REPORT 2017
At our February planning hui we discussed, reshaped and renamed our education scholarships. These are now Ngā Kete o Te Wānanga (Future Leaders), Ngā Mahi Ā -Rehe (Trade Training), Te Kete Uruuru Tau (Agricultural Special Fund) and Poutama (Bridging Fund). We encourage all shareholders to advise their whānau of these scholarships, particularly Poutama and Te Kete Uruuru Tau. Poutama is a fund available to support whānau into education or employment. Te Kete Uruuru Tau is for whānau studying in the areas of agriculture. We intended to revitalise the Wairarapa Moana wānanga, Te Kete Hautū, for all successful recipients of the education scholarships. Unfortunately due to a range of unforeseen circumstances the Trust had to cancel this year’s wānanga. We are still having discussions about the place and the time of year and how it could involve more than the recipients of the scholarships. As part of the Marae Development portfolio the Trust hosted two one-day Marae governance wānanga for our t¯i puna Marae. There were representatives from the Māori Land Court, Inland Revenue, Wairarapa Moana
Incorporation, the Department of Internal Affairs and the Wairarapa Moana office informing our Marae trustees and committee members on matters relating to the governance of their Marae. The Trust has recently been fortunate to have Anne Carter and Murray Hemi from the Incorporation attend our Trust hui to offer advice, support and guidance. The Trust also continues to meet annually with the Incorporation. We find this a very valuable time. The Trust continues to do its best for our whānau; the shareholders and descendants of shareholders. We are always open to receiving feedback, comments and suggestions to ensure we continue to do the best we can do as a Trust. Nō reira tēnā koutou, tēnā koutou, tēnā tātau katoa. Deborah Davidson chairperson wairarapa moana trust
From Top Right: Pouakani Forest Hikoi; Kura Kaupapa Māori o Wairarapa Film award; Marae Trustee Training 2017; Whakakaha Paepae Wānanga at Pouakani 21-23 April 2017. WAIRARAPA MOANA TRUST
21
Scholarship Recipients In the 2017 academic year 32 scholarships were provided to tertiary, trade and apprenticeship recipients.
This financial year saw 32 successful recipients to all four funding categories available. Te Kete Uruuru Tau, Agri Studies 1; Ngā Kete o Te Wānanga, Tertiary 26; Ngā Mahi Ā-Rehe, Trades & Apprenticeships 4; Poutama Fund, Bridging 1. Of the 20 female and 12 male recipients, three are undertaking double degrees with health again an area dominating career paths. Reflected in the graph are the fields of study being undertaken followed by a full list of 2017 scholarship recipients.
Graph 1: Current Areas of Study for Scholarship Recipients 2017
FIELDS OF STUDY Bridging Fund
1
Environment
1
Agriculture
1
Electrical Engineering
1
Gasfitting & Plumbing
1
Electrician
1
Carpentry
1
Architecture
1
Engineering
1
Law Science
3 3
Arts Business & Commerce
6 2
Education & Teaching
4
Social Work
1
Health
6
Māori (Te Reo/Culture)
3
Masters
1
0
1
2
3
4
5
NUMBER OF STUDENTS
22
ANNUAL REPORT 2017
6
7
Wairarapa Moana Trust would like to congratulate the following successful recipients of scholarships and bridging grants for 2017. TERTIARY RECIPIENTS Emma Smith Te Haana Paewai Jordan Te Whaiti-Smith Piriairini Gosnell Philippa Gillies Tessa Taute Taryn Morunga Dominique Va'a Johnathon Rutene Paige Nuku Simone Baker Angela Wilson Cereace Wallace Maioha Panapa Jordan Fox Mikayla Te Whaiti-Smith Leah Bain Levi Kerr Harriet Gibson Amber Ray Sam-Maree Brown Tapekaoterangi Hakopa Ririwai Fox Makaylah Julian Danielle Moeke-Ferris Lisa Walker
PROGRAMME OF STUDY Master of Speech Language Therapy Bachelor of Māori Visual Arts Bachelor of Medicine/Bachelor of Surgery Bachelor of Nursing Bachelor of Health Science Bachelor of Health Science Bachelor of Radiation Therapy Bachelor of Social Work Bachelor of Primary School Teaching Bachelor of Teaching/Bachelor of Arts Bachelor of Teaching (ECE) Bachelor of Teaching (ECE) Bachelor of Arts – Māori (Honours) Bachelor of Arts Bachelor of Arts Bachelor of Arts – Māori/Bachelor of Laws Bachelor of Laws Bachelor of Laws Bachelor of Environmental Management Bachelor of Commerce Bachelor of Commerce Bachelor of Science Bachelor of Science (Honours) Bachelor of Science Bachelor of Engineering (Honours) Bachelor of Architectural Studies
TRADE RECIPIENTS Ruatapu Rimene Marere-o-tonga Karauna Corban Mita Daniel Tauru Jayden Carter
TRADE AND APPRENTICESHIP Certificate in Animal Husbandry Apprenticeship in Electrician Apprenticeship in Gasfitting and Plumbing Certificate in Electrical Engineering Apprenticeship in Carpentry
BRIDGING FUND RECIPIENTS Marlene Whaanga-Dean
PROGRAMME OF STUDY Certificate in Public Health
WAIRARAPA MOANA TRUST
23
WAIRARAPA MOANA TRUST
Equity Information (Unaudited) As at 31 May 2017
Legal name of entity
Wairarapa Moana Trust
Type of entity and legal basis
Incorporated as a Charitable Trust under the Charitable Trusts Act 1957. Registered as a Charity (registration number CC37635) under the Charities Act 2005.
Entity’s purpose or mission statement
Cultural, social and educational scholarships and Marae grants.
Entity structure & governance
The trust is governed by a trust board of 5 trustees. The trust has no audit committee. On the trust board: Chairperson Deborah Davidson Trustee Wayne Pitau Trustee Mihirangi Hollings Trustee Anaru Smiler Trustee Tiraumaera Te Tau
Main sources of cash & resources
The trust receives cash or resources from: • Grants from various organisations • Investment Income
24
Main methods used by the entity to raise funds
The trust applies for grants from various organisations.
The entity’s reliance on volunteers and donated goods or services
The trustees on the governing body are all volunteers. The trust does not receive donated goods.
ANNUAL REPORT 2017
WAIRARAPA MOANA TRUST
Statement of Service Performance (Unaudited) For the year ended 31 May 2017
Description of the Entity’s Outcomes: To improve the success rate in education, specifically tertiary, trade training, apprenticeships and training for employment, by succeeding in chosen fields with a clear focus on long term goals and aspirations. To accept that whakapapa and associated philosophies are a vital cultural resource for Wairarapa Moana Trust members. To support the physical and spiritual wellbeing of t¯i puna Marae.
DESCRIPTION AND QUANTIFICATION (TO THE EXTENT PRACTICABLE) OF THE ENTITY’S OUTPUTS:
Waiata CD Recipients – sold 14
ACTUAL THIS YEAR
BUDGET THIS YEAR
ACTUAL LAST YEAR
14 CD’s
124 CD’s
25 books
60 books
Te Rito o te Reo Karanga Wānanga – participants at three wānanga
80 people
60 people
Te Pou Pūmau Wānanga – participants at five wānanga
74 people
n/a
T¯i puna Marae Development – work with governing and operational personnel to support Marae development
48 people
48 people
31 students
34 students
6,400+ people
6,400+ people
Wairarapa Moana: The Lake and Its People – book purchased by shareholders and whānau
Scholarship Recipients Quarterly newsletters (1,600 x 4) Moana Mailer is distributed by post and via website
Additional Information: ‘‘I am the first in my whānau to attend University, that makes me want to succeed and show the younger ones, they too can do it’’ – SCHOLARSHIP RECIPIENT
“Such a sense of pride in being able to do this for my Marae’’ – TE RITO O TE REO KARANGA PARTICIPANT.
“Fantastic seeing our Marae paepae are being populated again” – MARAE KAUMATUA
WAIRARAPA MOANA TRUST
25
Financial Report WAIRARAPA MOANA TRUST
Statement of Financial Position As at 31 May 2017
2017 2016
$ $
Current Assets BNZ Cheque account 43,237 8,195 BNZ Call account 83,748 198,192 BNZ Education account 118,172 74,127 BNZ short term deposit 62,000 62,000 WBS short term deposits 80,000 80,000 Treaty Claims account 7,428 7,396 Accrued Interest 2,268 1,490 Inventories 29,925 30,850 Total Assets Current Liabilities Accounts Payable Accrued Audit Fee Provision for Marae Development Grants Scholarship Grants committed not yet paid GST payable
426,778
462,250
4,698 2,500 – 38,250 3,983
2,091 2,040 68,689 – 793
Total Liabilities
49,431
73,613
Net Assets 377,347 388,637 Accumulated Funds (Note 5)
Accumulated Surpluses / (Deficits) 342,089 296,744 Reserves 35,258 91,893 Total Accumulated Funds 377,347 388,637
For and on behalf of the Board:
Deborah Davidson
Tiraumaera Te Tau
Date: 7 August 2017
Date: 7 August 2017
The statement of accounting policies and notes to the financial statements form part of and should be read in conjunction with these financial statements
26
ANNUAL REPORT 2017
WAIRARAPA MOANA TRUST
Statement of Cash Flows For the year ended 31 May 2017
2017 2016
$ $
Cashflows from Operating Activities Cash was provided from Grants Funding 34,782 34,782 Scholarship Funding 50,000 52,050 Interest 4,781 9,958 Sundry Income 989 1,874 GST (net) 3,190 – 93,742 Cash was disbursed to Payments to Suppliers and Employees 11,754 Grants paid 61,671 Scholarships 3,500 Committed Funds paid 52,174 GST (net) –
98,664
129,099
172,217
Net Cash provided from/(used in) Operating Activities
(35,357)
(73,553)
9,124 97,651 39,500 – 25,942
Cashflows from Investing Activities
Cash was disbursed to Fixed Assets purchased – – Net Cash provided from/(used in) Investing Activities
–
–
Cash was provided from Restricted Funds 32
133
Cashflows from Financing Activities
32 133 Cash was disbursed to Restricted Funds – – – – Net Cash provided from/(used in) Financing Activities
32
133
Net Increase/(decrease) in cash held Opening cash brought forward
(35,325) 429,910
(73,420) 503,330
Closing cash carried forward
394,585
429,910
The statement of accounting policies and notes to the financial statements form part of and should be read in conjunction with these financial statements
WAIRARAPA MOANA TRUST
27
WAIRARAPA MOANA TRUST
Statement of Cash Flows For the year ended 31 May 2017
2017 2016
$ $
Cash is made up of: BNZ Cheque Account No. 00 43,237 8,195 BNZ Autocall Account No. 25 83,748 198,192 BNZ Education Account No. 03 118,172 74,127 BNZ Term Deposit 62,000 62,000 WBS Short Term Deposits 80,000 80,000 Treaty Claims Accounts 7,428 7,396
394,585
429,910
The statement of accounting policies and notes to the financial statements form part of and should be read in conjunction with these financial statements
28
ANNUAL REPORT 2017
WAIRARAPA MOANA TRUST
Statement of Financial Performance For the year ended 31 May 2017
2017 2016
$ $
Revenue Interest Received BNZ 2,952 6,785 WBS 2,630 3,317 IRD use of money 8 – 5,590 10,102 Grants Received Future Leaders Scholarship Grant 50,000 52,050 Wairarapa Moanatanga 13,043 13,043 Marae Development Grant 21,739 21,739
84,782 86,832
The Lake and its People Book Lake Book Sales 683 1,731 Less Opening Lake Books on hand (30,850) (32,550) Plus Closing Lake Books on hand 29,925 30,850 (242) 31 Sundry Income Waiata CD Sales 306 213
306 213
Total Revenue 90,436 97,178 Less Expenditure
Accountancy Audit fees Bank fees Bad Debts General Grants (Note 4) Meeting expenses Scholarships (Note 4)
2,400 2,300 2,710 2,280 71 80 – 70 44 517 47,156 7,262 9,596 5,383 39,750 39,500
Total Expenditure 101,727 57,392 Net Surplus for the period
(11,291)
39,786
The statement of accounting policies and notes to the financial statements form part of and should be read in conjunction with these financial statements
WAIRARAPA MOANA TRUST
29
WAIRARAPA MOANA TRUST
Statement of Accounting Policies For the year ended 31 May 2017 GENERAL ACCOUNTING POLICIES Reporting Entity Wairarapa Moana Trust has elected to apply PBE SFR-A (NFP) Public Benefit Entity Simple Format Reporting – Accrual (Not for profit) on the basis that it does not have public accountability and has total annual expenses of equal to or less than $2,000,000. Measurement System The measurement base adopted is that of historical cost. Reliance is placed on the fact that the Trust is a going concern. Accrual accounting is used to match revenues earned and expenses incurred. Specific Accounting Policies The following specific accounting policies which materially affect the measurement of earnings and the financial position have been applied: a Accounts Receivable Accounts receivable are stated at expected realisable value. b Goods and Services Tax All amounts are recorded exclusive of GST, except for Debtors and Creditors which are stated inclusive of GST. c Taxation Wairarapa Moana Trust is a registered charitable entity under the Charities Act 2005, and accordingly is exempt from income tax under sections CW41 and CW42 of the Income Tax Act 2007. d Inventories Inventories are valued at cost. e Bank Accounts & Cash Bank accounts & cash in the Statement of Cash Flows comprise cash balances and bank balances (including short term deposits) with original maturities of 90 days or less.
30
ANNUAL REPORT 2017
f Revenue From Sale of Goods Revenue is recorded when the goods are sold. If the purchaser pays before they receive their goods, the trust records a liability. If the purchaser does not pay on receipt of the goods, the trust records a debtor. g Revenue From Sale of Services Revenue is recorded based on the stage of completion of the service at balance date. h Accounting Estimates & Provisions The preparation of performance reports requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, revenue and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis.
During the year, a change to accounting policies, reflected the timing of the recognition of these provisions. Provisions are recognised as the expense is incurred, or are as likely so as to be considered a committed expense.
In prior years, revisions to estimates, such as provisions were recognised in the period in which the estimate was revised.
The impact of the change in accounting policy reflects the reversal of an estimated $64,341 liability, being the Provision for Marae Development Grants, within the Statement of Financial Position, and correspondingly reducing the Marae Development Grant expense.
i Changes In Accounting Policies The Accounting Policy for Accounting Estimates & Provisions was changed during the year as noted in accounting policy h. There have been no other changes in accounting policies. All other policies have been applied on bases consistent with those used throughout the period (Last year – Nil).
WAIRARAPA MOANA TRUST
Notes to the Performance Report For the year ended 31 May 2017 1. Capital and Operating Commitments As at balance date there were no Capital or Operating Lease Commitments (2016: nil). 2. Contingent Liabilities As at balance date there were no Contingent Liabilities (2016: nil). 3. Reconciliation Of Net Surplus With Cash Flow From Operating Activities 2017 2016
$ $
Net Surplus/(Deficit) for the year
(11,291)
39,786
(Increase) / Decrease in Inventories (Increase) / Decrease in Interest Accruals Increase / (Decrease) in Payables & Accruals Increase / (Decrease) in Provision for Grants Increase / (Decrease) in GST Increase / (Decrease) in Grants Committed Increase / (Decrease) in Restricted Funds
925 (777) 3,067 (68,689) 3,190 38,250 (32)
1,700 (11) (1,120) (87,833) (25,942) – (133)
(35,357)
(73,553)
4. Grants & Scholarships Paid
Grants Wairarapa Moanatanga – Golden Shears Wairarapa Moanatanga – Whakakaha Paepae Marae Development
2017 2016 $
4,000 33,584 9,572
$
4,000 12,834 (9,572)
Scholarships Future Leaders Scholarships
47,156
7,262
39,750
39,500
39,750
39,500
Total Grants and Scholarships
86,906
46,762
WAIRARAPA MOANA TRUST
31
WAIRARAPA MOANA TRUST
Notes to the Performance Report For the year ended 31 May 2017 5. Changes In Accumulated Funds Accumulated
This Year
Surpluses or (Deficits)
Reserves
Total
Trust Funds are represented as follows: Opening Balance 296,745 91,893 Capital contributed by owners or members Capital returned to owners or members Surplus / (Deficit) (11,291) Distributions paid to owners or members Transfer to Reserves (32) 32 Transfer from Reserves 56,667 (56,667)
388,638 – – (11,291) – – –
Closing Balance
377,347
342,089
35,258
Accumulated
Last Year
Surpluses or (Deficits)
Reserves
Trust Funds are represented as follows: Opening Balance 257,091 91,760 Capital contributed by owners or members Capital returned to owners or members Surplus / (Deficit) 39,653 Distributions paid to owners or members Transfer to Reserves Transfer from Reserves 133
348,851 – – 39,653 – – 133
Closing Balance
296,744
91,893
388,637
Nature and purpose of each reserve
2016
2015
Reserve 1 Hurunui-o-Rangi Marae
32
Total
–
56,667
Reserve 2 Kohunui Marae
26,667
26,667
Reserve 3 Pouakani Marae
1,163
1,163
Reserve 4 Nga Hapū Karanga o Wairarapa Fund
7,428
7,396
Total
35,258
91,893
ANNUAL REPORT 2017
WAIRARAPA MOANA TRUST
Notes to the Performance Report For the year ended 31 May 2017 6. Analysis of Expenses 2017 2016
Expense Item
Volunteer and employee related costs Meeting expenses
$
5,036
$
5,383
7. Related Party Transactions 2017 2016
$ $
Description of relationship Transactions with trustees Description of transaction Trustees were paid for attending meetings
4,560
3,260
8. Events After Balance Date There were no events that have occurred after balance date that would have a material impact on the Performance Report (Last Year: Nil).
WAIRARAPA MOANA TRUST
33
Independent Auditor’s Report To the Trustees of Wairarapa Moana Trust Opinion We have audited the accompanying performance report of Wairarapa Moana Trust on pages 26 to 33 which comprises the statement of financial performance and statement of cash flows for the year ended 31 May 2017, the statement of financial position as at 31 May 2017, and the statement of accounting policies and notes to the performance report. In our opinion: a)
the accompanying performance report presents fairly, in all material respects:
– the financial position of Wairarapa Moana Trust as at 31 May 2017, and its financial performance, and cash flows for the year then ended
in accordance with Public Benefit Entity Simple Format Reporting – Accrual (Not-ForProfit) issued by the New Zealand Accounting Standards Board.
Basis for Opinion We conducted our audit of the statement of financial performance, statement of financial position, statement of cash flows, statement of accounting policies and notes to the performance report in accordance with International Standards on Auditing (New Zealand) (ISAs (NZ)). Our responsibilities under those standards are further described in the ‘Auditor’s responsibilities for the audit of the performance report’ section of our report. We are independent of Wairarapa Moana Trust in accordance with Professional and Ethical Standard 1 (Revised) ‘Code of ethics for assurance practitioners’ issued by the New Zealand Auditing and Assurance Standards Board, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Other than our capacity as auditor we have no relationship with, or interests in, Wairarapa Moana Trust.
Moore Stephens is a network of independent firms that are each members of Moore Stephens International Limited – member firms in principal cities throughout the world. Moore Stephens Wairarapa Audit is a partnership of PF Smith, MP Czudaj and MK Rania. This service is managed by Adrienne Dempsey.
34
ANNUAL REPORT 2017
Other information The Board is responsible for the other information. The other information obtained at the date of this auditor’s report is the entity information and statement of service performance, but does not include the statement of financial performance, statement of cash flows, statement of financial position, the statement of accounting policies and notes to the performance report, and our auditor’s report thereon. Our opinion on the performance report does not cover the other information and we do not express any form of other opinion or assurance conclusion thereon. In connection with our audit of the performance report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the statements audited or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed on the other information obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Board’s responsibilities for the performance report The Board is responsible for: a)
Identifying outcomes and outputs, and quantifying the outputs to the extent practicable, that are relevant, reliable, comparable and understandable, to report in the statement of service performance
b) the preparation and fair presentation of the performance report on behalf of Wairarapa Moana Trust which comprises:
– the entity information
– the statement of service performance; and
– the statement of financial performance, statement of financial position, statement of cash flows, statement of accounting policies and notes to the performance report in accordance with Public Benefit Entity Simple Format Reporting – Accrual (Not-ForProfit) issued by the New Zealand Accounting Standards Board, and
c)
for such internal control as the Board determine is necessary to enable the preparation of the performance report that is free from material misstatement, whether due to fraud or error.
In preparing the performance report, the Board is responsible on behalf of Wairarapa Moana Trust for assessing Wairarapa Moana Trust’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board either intend to liquidate Wairarapa Moana Trust or to cease operations, or have no realistic alternative but to do so.
WAIRARAPA MOANA TRUST
35
Auditor’s responsibilities for the audit of the performance report Our objectives are to obtain reasonable assurance about whether the performance report is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (NZ) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the decisions of users taken on the basis of the performance report. As part of an audit in accordance with ISAs (NZ), we exercise professional judgement and maintain professional scepticism throughout the audit. We also: •
Identify and assess the risks of material misstatement of the performance report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
•
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Wairarapa Moana Trust’s internal control.
•
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
•
Conclude on the appropriateness of the use of the going concern basis of accounting by the Board and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on Wairarapa Moana Trust’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the performance report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause Wairarapa Moana Trust to cease to continue as a going concern.
•
Evaluate the overall presentation, structure and content of the performance report, including the disclosures, and whether the performance report represents the underlying transactions and events in a manner that achieves fair presentation.
We communicate with the Board regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
Moore Stephens Wairarapa Audit | Qualified Auditors, Masterton, New Zealand 8 August 2017
36
ANNUAL REPORT 2017
Disclosures Board of Trustees MEETINGS ATTENDED
2017 2016
Deborah Davidson
10
7
Anaru Smiler
10
7
Mihirangi Hollings
10
7
Tirau Te Tau
10
7
Rutu Namana
4
7
Wayne Pitau
4
N/A
WAIRARAPA MOANA TRUST
37
Notes
38
ANNUAL REPORT 2017
Notes
WAIRARAPA MOANA INCORPORATION
39
Notes
40
ANNUAL REPORT 2017
To contact the Wairarapa Moana Incorporation web www.wairarapamoana.org.nz email info@wairarapamoana.org.nz Masterton Office
PO Box 2019, Kuripuni, Masterton 5842 Wairarapa Moana House, 4 Park Avenue, Masterton 5810 Telephone 06 370 2608 Fax 06 370 2609 Taupo Office
PO Box 1347, Taupo 3351 Level 1, 14 Ruapehu Street, Taupo 3330 Telephone 07 213 2275 Fax 07 377 6156 Cover Photos
From the farm gate to the global market.