annual report 2015 - cdn-flightdec.userfirst.co.nz · 2 10 year relative performance ($1...

ANNUAL REPORT2015

RAN002_annual_report_v2.indd 1 23/06/15 4:40 PM

PRIVATE

PUBLIC

V E N T U R E S


1

QUICK RESULT 2

CHAIR’S REVIEW 3

CEO’S REPORT 5

PRIVATE INVESTMENTS 10

BOARD OF DIRECTORS 13

FINANCIAL STATEMENTS 14

SUPPLEMENTARY INFORMATION 55

SHARE BUYBACK DISCLOSURE 56

DIRECTORY 60

OUR CORNERSTONE SHAREHOLDER - JR MCKENZIE TRUST 61

29 JUN 2015

FY15 FINAL DIVIDEND PAID

27¢ PER SHARE

ANNUAL GENERAL MEETING CHANCELLOR 3, LEVEL 16

JAMES COOK HOTEL 147 THE TERRACE

WELLINGTON

4:30PM

3 AUG 2015


2

10 YEAR RELATIVE PERFORMANCE ($1 INVESTMENT)

2015 2014

ASSESSED ASSET BACKING $200.5M $198.4MTOTAL SHAREHOLDER RETURN 5.2% 9.5%DIVIDENDS PAID $8.1M $7.8M

2

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

.Rangatira NZX 50 ASX Net Total Return Average Growth Fund


3

CHAIR’S REVIEWSince J.R. McKenzie established Rangatira in 1937, our goal has

been to deliver market competitive capital returns and steadily

increasing dividends to our shareholders. We have achieved

this goal consistently over many decades, with the past 10

years showing a compound annual growth rate of 10.7%.

In the year under review, however, Total Shareholder Return

was 5.2%. While this figure falls short of our historical

performance, it reflects the unique set of circumstances

we faced in the 2015 financial year (FY2015) with a high cash

balance following the sale of Contract Resources, and low cash

deposit rates.

In addition, it was pleasing to see that as a result of a number of

initiatives we put in place to deliver for shareholders over the

long term, we made significant gains in the second half of the

year that offset a challenging first half year. These included:

• working with our managers and co-investors to improve the

performance of our private businesses, and

• focusing on finding new investment opportunities in order to

put all of our capital to work. Rangatira continues to hold a

strong balance sheet, and we are ready to take advantage of

further market opportunities we identify for the benefit of

our shareholders.

We remain optimistic about the New Zealand economy, despite

some headwinds from our key trading partners in Australia

and China. In more specific terms, we see good investment

opportunities for Rangatira in New Zealand’s middle market,

where businesses have between $10-$150M in revenues. If

we can realise the potential to grow these middle market

businesses, in the way that, for example, we have worked with

Hellers, then we are confident we can continue to generate

above average returns for our shareholders.

“IF WE CAN REALISE THE POTENTIAL TO GROW THESE MIDDLE MARKET BUSINESSES...WE CAN CONTINUE TO GENERATE ABOVE AVERAGE RETURNS FOR OUR SHAREHOLDERS”

3

David Pilkington Chair

Phil Veal CEO

Phil Veal Chief Executive

Chris Bradshaw CFO


4

The Rangatira Board declared a final, fully imputed dividend

of 27 cents per share, making the total dividend for FY2015

47 cents per share, up from 46 cents per share last year. The

Board also assessed the asset backing per share at $11.32 per

share (up from $11.20 per share at 31 March 2014), based on the

Directors’ valuation of Rangatira’s total equity of $200.5M

After shareholder approval at last year’s Annual Meeting to

allow the company to buy back its shares, several bids were

lodged in the market. However, no bids were accepted. We will

continue to pursue opportunities to buy back our shares when

the market trades at prices less than 80% of assessed asset

backing per share.

Shareholders will note we have refreshed the Rangatira logo

and added the word “Investments”. Our research showed that

few people recognise Rangatira and what it is we do. With the

refresh, our aim is to give our company a more contemporary

look and also to indicate clearly that we are an investment

company.

Earlier this year we farewelled Ian Frame and welcomed our

new Chief Executive, Phil Veal, who started in September

2014. Phil is an experienced business leader with a background

in mergers and acquisitions, management consulting, and

private equity. We are pleased to note that Phil has moved his

family from New York City to Wellington to take up the role at

Rangatira.

In addition to Phil and Ian, Rangatira has been well served

during the past year by Chris Bradshaw, our Chief Financial

Officer, plus Anton Labrooy, Vivienne Pearson, and Heidi

Jordan. Together with the teams (staff, managers, and board

directors) running our private portfolio companies, I thank them

all for their hard work over the course of the year.

David Pilkington

Chair

18 June 2015

2015 $m

2014 $m

Operating Earnings 9.2 8.0

Gains from Realisations of Investments

4.5 32.1

One-off Acquisition and Disposal Costs

- (0.7)

Net Profit after Tax 13.7 39.4

$ per share $ per share

Asset Backing from Annual Accounts

8.76 8.63

Additional Value of Private Investments (1)

2.56 2.57

Assessed Asset Backing 11.32 11.20

(1) Using the mid-point of the assessed additional value range. See page 5 for information

¢ per share ¢ per share

Change in Assessed Asset Backing

12 57

Dividends Paid (prior year final plus current year interim)

46 44

Total Return 58 101

Total Return on Assessed Asset Backing

5.2% 9.5%


CHIEF EXECUTIVE’S REPORT I am honoured by the opportunity to return to New Zealand

and lead Rangatira into its ninth decade of investing in

growing New Zealand businesses. As I have learned more

about the history of Rangatira, under our founder Sir John

(“J.R.”) McKenzie and later the leadership of his son Sir Roy

McKenzie, I have been amazed at how much it has achieved to

date. In his autobiography Sir Roy talks about Rangatira’s early

investments in iconic New Zealand companies such as Wattie’s,

Montana Wines, and Skellerup. In our current portfolio, iconic

brands such as Hellers and Rainbow’s End stand out too. So I am

optimistic about Rangatira’s opportunities to build on J.R.’s and

Sir Roy’s legacy in the future.

While the FY2015 result was disappointing in terms of Total

Shareholder Return, operating earnings - a measure of our

ability to provide dividend flow for investors and generate free

cash flow for additional investment - were $9.2M last year, up

from $8.0M in FY2014.

The improved operational performance is a result of initiatives

we put in place in the second half of the year to drive

efficiencies in our portfolio of private companies, including

factory enhancements, refocusing on more valuable customers,

and strengthening the “customer experience” in some

businesses. These initiatives are also establishing a platform

for delivering further performance gains in future.

The Board has made clear to me that they expect to see a

material increase in our total return this year and in the future,

and I am committed to delivering it, both through ongoing

operational performance improvement and strategic new

investments. We see Rangatira as not only an institution that

serves its investors and their interests, but also a positive

contributor to the New Zealand economy in terms of increased

productivity and jobs.

PRIVATE INVESTMENTSOur private investments represent the majority of the capital

(63%) in our portfolio, and because of that we are focused on

driving great operational results in the businesses. Hellers is a

good example: it has grown into a market leader and become an

iconic New Zealand food brand.

In highlights this year, our investments in the tourism sector

(Rainbow’s End, Polynesian Spa) have performed well on the

back of better management and increased visitor numbers.

At Rainbow’s End, the team have done a great job improving

the visitor experience at the park, and getting more visitors

through the gate. We are also happy to note an improved

performance at Polynesian Spa, where revenues are growing on

the back of increased tourist traffic to Rotorua.

Our directors, working with our independent advisors,

have assessed the aggregate market value of our private

investments at 31 March 2015 to be between $32M and $58M

above the value at which they are included in our accounts

(additional value of private investments last year $33M to

$58M above).

PUBLIC INVESTMENTSOur public investments have enjoyed another productive year,

delivering 3.4% dividend flow in addition to 3.1% gain in market

value.

Our return from New Zealand stocks, including dividends, was

18.5% (5.0% more than the NZX50 Index), and our Australian

portfolio returned - 7.0% (15.6% less than the ASX200 Index

on a currency-adjusted basis). Our Global equities portfolio

returned 14.5%. The Australian return was adversely affected

by the AUD/NZD exchange rate and our large exposure to

resource stocks. We sold some of our resource stocks during

the year including BHP Billiton and Woodside Petroleum.

5


6

Although we no longer have a direct investment in Xero, we

continue to have an interest. At the end of FY2015, this interest

was valued at $5.0M in the company through our private

investment in Valar Ventures.

CASH & SHORT TERM INVESTMENTSSince our sale of Contract Resources in FY2014, we have held

a proportion of our portfolio (16%) in cash and short-term

investments while we identify new investment opportunities

that match our criteria. While the return from this part of our

asset base has created a net drag on our overall performance,

it gives us the ability to move swiftly when we identify an

opportunity.

NEW ZEALAND SHARES2015

NZ$m2014

NZ$m

Fisher & Paykel Healthcare 4.6 3.0

Fletcher Building 3.0 3.5

Auckland Airport 1.7 1.6

Kiwi Property Group 1.5 1.3

Green Cross Health 1.2 0.7

Contact Energy 0.7 0.6

IkeGPS 0.5 0.5

Serko 0.1 0.1

Sky City - 1.9

Total 13.3 13.2

Our New Zealand public investments returned 18.5% in 2015.

AUSTRALIAN SHARES2015

NZ$m2014

NZ$m

B H P Billiton 4.2 8.2

Rio Tinto 3.8 4.5

Commonwealth Bank 3.3 2.9

Woodside Petroleum - 2.3

Wesfarmers 1.3 1.3

QBE Insurance 1.0 1.0

Treasury Wine Estates 0.6 0.4

RCR Tomlinson 0.6 0.6

Total 14.8 21.2

Our Australian public investments returned -7.0% in 2015.

INTERNATIONAL SHARES2015

NZ$m2014

NZ$m

Royal Dutch Shell 3.5 3.7

Reckitt Benckiser 3.3 2.7

BP 2.6 2.7

iShares – MSCI All Asia excl Japan Index Fund

2.1 1.6

iShares – MSCI China Index Fund

2.0 1.5

Twitter 0.7 -

Indivior 0.1 -

Total 14.3 12.2

Our International public investments returned 14.5% in 2015

6


7

Private Cash & Short Term Investments Public

21%

16%

63%

7%7%7%

New Zealand

Australia

International

NEW INVESTMENTSWe have an ongoing focus on finding new investment

opportunities in order to put our capital to work. We are looking

for middle market New Zealand businesses with strong growth

prospects that have the ability to grow with Rangatira’s capital,

capabilities and connections.

For middle market businesses that have strong growth

prospects, Rangatira has a unique competitive advantage

over other private equity options because we invest our own

permanent capital and can therefore have a longer investment

timeframe. We also prefer to be a cornerstone investor, co-

investing with existing business owners and management, and

this underpins Rangatira’s ability to grow great New Zealand

businesses and improve shareholder returns.

With that in mind, we are actively identifying potential

investment prospects - focusing on middle market businesses

in New Zealand that have strong growth prospects - and

building relationships with business owners and potential co-

investors. We think we are an investment partner that middle

market New Zealand businesses should get to know. If you

know a business owner that would like to start a conversation

about their future, please introduce us.

Phil Veal

Chief Executive

18 June 2015

RANGATIRA PORTFOLIO AT 31 MARCH 2015


8

AS SURE AS HELLERSOur unique partnership has helped Hellers grow to be the number one player in smallgoods, bacon, and ham in New Zealand. We invested in the business with Todd Heller and Nick Harris back in 2003. Nowadays, New Zealanders enjoy 28,000 tonnes of Hellers sausages, bacon and other products every year.

Over the past seven years Hellers has invested more than $35M expanding its factory in Kaiapoi, helping rebuild the Christchurch community devastated by the 2011 earthquake. The world-class 6,000 square meter plant employs 420 people. Hellers is now the largest purchaser of New Zealand pork, and also buys large quantities of beef, chicken and lamb from proud local suppliers in Canterbury and around New Zealand.


9


10

Hellers produces bacon, ham and smallgoods for retail and

food service markets from its factories in Christchurch and

Auckland.

Hellers relaunched the Kiwi bacon brand as a free-farmed,

New Zealand bred product over the year. Acquired in the

Goodman Fielders Meats deal, the revival of the Kiwi brand is

an example of how Hellers’ hallmark authenticity can create

higher value for investors.

HELLERS

50%

Polynesian Spa provides a unique geothermal spa experience

on the shores of Lake Rotorua.

A new reflexology walk and a plunge pool were part of an

enhanced customer experience at Polynesian Spa this year.

Strong domestic tourism growth along with more international

tourists, especially from China, drove visitor numbers to over

300,000 - a new record.

POLYNESIAN SPA

51%

Rainbow’s End entertains nearly 400,000 guests a year at its

Manukau theme park.

Visitor numbers set a new record this year with the new

Stratosfear ride and Kidz Kingdom proving great attractions.

The team also collected awards including “Best of the Best”

Marketing at Westpac’s Auckland Business Awards, an

international Brass Ring Award for Best Innovation in a Training

Programme, and received a coveted Certificate of Excellence

from TripAdvisor.

RAINBOW’S END

100%

Auckland Packaging designs and manufactures point-of-sale

displays and packaging.

Auckland Packaging (APC) completed the installation of its

new, fully-automated 8-channel digital press. APC used this

new, room-sized colour printer to help launch Snap ’n Play for

Griffins Foods, which gave Griffins a store presence that helped

them beat sales forecasts, demonstrating the value of APC’s

new capabilities.

AUCKLAND PACKAGING

100%

OUR PRIVATE INVESTMENTS


11

Tuatara crafts artisan beer at its brewery in Paraparaumu for

distribution to domestic and international markets.

With the slogan “brewed for people who are already witty and

attractive”, Tuatara launched Iti, the first low-alcohol craft

beer. Bolstered by strong demand, Tuatara has invested in

its Paraparaumu brewery to double capacity, and has opened

micro-brewery and tasting house The Third Eye in downtown

Wellington.

TUATARA

35%

Konnect Net provides technology solutions that connect

insurers and health provider in order to deliver services more

efficiently.

Every large New Zealand life insurer uses the Konnect Net

service, with a network extending to over 1,200 medical

practices. Konnect’s customers continue to see improved

operating efficiencies from using Konnect’s products.

KONNECT NET

17%

Magritek designs and manufactures benchtop Nuclear

Magnetic Resonance (NMR) solutions from bases in

Wellington and Aachen, Germany.

Spinsolve, Magritek’s flagship product, continues to have high

uptake in European and United States markets, with strong

double digit sales growth. In September 2014, Rangatira

boosted its stake in Magritek to 18%.

MAGRITEK

18%

New Zealand Pastures is a farming and fattening operation

based on 23,500ha of land in the South Island.

In moving to an owner-operator model this year, New Zealand

Pastures has shifted to value-added produce and invested in

irrigation to boost productivity. The company expects this to

deliver improved returns this year.

NEW ZEALAND PASTURES

8%


12

Partners Life delivers a full suite of innovative, competitively

priced life and health insurance products to New Zealand

families and businesses.

Partners continues its strong growth as the second largest

writer of new business in life insurance, now covering over

100,000 New Zealanders. Its strong performance underlies the

value of having an industry-experienced management team in

executing a growth strategy.

PARTNERS LIFE

8%

Valar Ventures invests in high-growth New Zealand

businesses that can scale globally.

Xero, a Valar portfolio company, recently announced the

acquisition of its 500,000th customer - a major milestone

for the Wellington-based provider of “beautiful accounting

software”.

Valar is also invested in Auckland-based Vend, a provider of

Point-of-Sale software for over 15,000 retailers around the

world. Vend is one of just 24 companies to secure sales support

from Apple as part of their efforts to push mobile solutions to

businesses.

VALAR VENTURES

FUND

Movac is a leading New Zealand venture capital manager

investing in early stage companies.

Rangatira is invested in Movac’s Fund 3, with portfolio

companies including PowerbyProxi, Mesynthes, and Author-it.

Proxi achieved a win by helping to define the next generation of

wireless power transmission, and continues to pursue growth

opportunities with major manufactures offshore.

Another Fund 3 portfolio company, 1Above, is now selling their

jet-lag beating beverages in Australia and the United States.

MOVAC FUND 3

FUND

Icon Ventures (formerly known as JAFCO) is a specialty

venture capital investor focused on Series B rounds of United

States early stage companies.

Our 2014 investment in Icon has already realised a return with

the sale of MoPub to Twitter, giving Rangatira stock in Twitter.

The remainder of Icon’s portfolio, including leading United

States telehealth provider Teladoc, continues to track well.

ICON VENTURES

FUNDV E N T U R E S


13

David Pilkington (Chair) Hellers (Chair), Tuatara Brewing, Remuneration Committee

Keith Gibson (Deputy Chair) Polynesian Spa (Chair), Audit Committee, Remuneration Committee

Nick Calavrias Auckland Packaging Company

Lindsay Gillanders Auckland Packaging Company (Chair), Audit (Chair)

Sophie Haslem Magritek Holdings, Rainbow’s End Theme Park

Sam Knowles Remuneration Committee

Richard Wilks Rainbow’s End Theme Park (Chair), Audit Committee

BOARD OF DIRECTORSThe Boards of subsidiary companies and major investments during the year include Rangatira directors as follows:

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14

Rangatira Group

CONSOLIDATED INCOME STATEMENTFor the year ended 31 March 2015

Note

Group 2015

$000

Group 2014

$000

Revenue 2 42,298 40,051

Other income 3 5,199 33,267

Share of profit for the year from associate companies 12 3,005 2,581

Total income 50,502 75,899

Impairment of intangible assets 14 - (1,000)

Depreciation expense 11 (2,347) (2,056)

Employee benefit expense 4 (14,162) (13,618)

Finance costs 4 (162) (256)

Cost of sales 4 (6,703) (7,085)

Consulting expense (434) (925)

Operating expenses 4 (9,111) (8,570)

Profit before tax 17,583 42,389

Tax expense 6 (2,859) (2,218)

Profit after tax 14,724 40,171

Profit attributable to

Equity holders of the Parent 13,744 39,429

Non-controlling interests 980 742

14,724 40,171

Basic and diluted earnings per share (cents) 20 77.6 222.6

The notes on pages 19 to 52 form part of, and should be read in conjunction with, the above statements.


15

Rangatira Group

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME CONTINUEDFor the year ended 31 March 2015

Group 2015

$000

Group 2014

$000

Other comprehensive income

Available for sale investments

- valuation gain taken to equity 2,313 428

- transferred to income statement on sale (5,140) (2,300)

Share of reserves of associates (511) (90)

Other comprehensive (loss)/income recognised directly in equity (3,338) (1,962)


Total comprehensive income for the year after tax 11,386 38,209

Total comprehensive income attributable to

Equity holders of the Parent 10,406 37,467

Non-controlling interests 980 742

11,386 38,209



16

Rangatira Group

CONSOLIDATED STATEMENT OF CHANGES IN EQUITYFor the year ended 31 March 2015

2014 Note

Share capital

$000

Retained earnings

$000

Available for sale

investments revaluation

reserve $000

Foreign currency

hedge reserve

$000

Attributable to equity

holders of the Parent

$000

Attributable to non-

controlling interests

$000Total $000

Balance at the beginning of the year

17,712 85,769 20,073 204 123,758 810 124,568

Total comprehensive income/(loss) net of tax

- 39,429 (1,872) (90) 37,467 742 38,209

Dividends paid to non-controlling interests

- - - - - (926) (926)

Dividends paid to Parent shareholders

21 - (7,793) - - (7,793) - (7,793)

Sale of Contract Resources Limited

- - - (522) (522) - (522)

Balance at end of year 17,712 117,405 18,201 (408) 152,910 626 153,536

2015 Note

Share capital

$000

Retained earnings

$000

Available for sale

investments revaluation

reserve $000

Foreign currency

hedge reserve

$000

Attributable to equity

holders of the Parent

$000

Attributable to non-

controlling interests

$000Total $000

Balance at the beginning of the year

17,712 117,405 18,201 (408) 152,910 626 153,536

Total comprehensive income net of tax

- 13,744 (2,827) (511) 10,406 980 11,386

Dividends paid to non-controlling interests

- - - - - (999) (999)

Dividends paid to Parent shareholders

21 - (8,148) - - (8,148) - (8,148)

Balance at end of year 17,712 123,001 15,374 (919) 155,168 607 155,775



17

Rangatira Group

CONSOLIDATED STATEMENT OF FINANCIAL POSITIONAs at 31 March 2015

Note

Group 2015

$000

Group 2014

$000

Current assets

Cash and cash equivalents 29,428 29,542

Trade receivables 7 2,827 3,077

Inventories 8 940 823

Tax receivable 6 341 457

Other current financial assets 9 21,549 20,310

Other current assets 10 494 346

Total current assets 55,579 54,555

Non-current assetsProperty, plant and equipment 11 24,525 22,106 Investments in associate companies 12 7,695 8,598 Goodwill 13 8,547 8,547 Deferred tax asset 6 244 362 Other non-current financial assets 9 70,278 70,006 Total non-current assets 111,289 109,619 Total assets 166,868 164,174

Current liabilitiesTrade and other payables 15 3,169 3,119 Borrowings 16 686 346 Tax payable 6 676 364 Provisions 17 1,333 1,189 Total current liabilities 5,864 5,018

Non-current liabilitiesBorrowings 16 2,977 3,327 Provisions 17 286 271 Deferred tax liability 6 1,966 2,022 Total non-current liabilities 5,229 5,620 Total liabilities 11,093 10,638 Net assets 155,775 153,536

EquityShare capital 18 17,712 17,712 Retained earnings 123,001 117,405 Available for sale investments revaluation reserve 15,374 18,201 Foreign currency hedge reserve (919) (408)Equity holders of the Parent 155,168 152,910 Attributable to non-controlling interests 607 626 Total equity 155,775 153,536

Approved for issue on behalf of the Board on 8 June 2015

DA Pilkington D K Gibson



18

Rangatira Group

CONSOLIDATED STATEMENT OF CASHFLOWFor the year ended 31 March 2015

Note

Group 2015

$000

Group 2014

$000

Cash flows from operating activitiesCash was provided from: - Receipts from customers 37,670 35,120 - Dividends received 5,354 5,374 - Interest received 2,921 3,023

45,945 43,517 Cash was applied to: - Payments to suppliers and employees (30,466) (30,730) - Tax paid (2,369) (2,223) - Interest paid and other costs of finance (162) (275)

(32,997) (33,228)Net cash inflows from operating activities 28 12,948 10,289

Cash flows from investing activitiesCash was provided from: - Proceeds from sale of investments 6,445 56,702 - Proceeds from sale of property, plant and equipment 18 2,921

6,463 59,623 Cash was applied to: - Purchase of property, plant and equipment (4,872) (6,136) - Purchase of investments (5,506) (15,741)

(10,378) (21,877)Net cash inflows/(outflows) from investing activities (3,915) 37,746

Cash flows from financing activitiesCash was applied to: - Dividends paid to shareholders of Parent (8,148) (7,793) - Dividends paid to non-controlling interests (999) (926) - Repayment of borrowings - (13,977)

(9,147) (22,696)Net cash (outflows) from financing activities (9,147) (22,696)

Net (decrease)/increase in cash held (114) 25,339 Cash at beginning of year 29,542 4,203 Cash at end of year 29,428 29,542

Cash and cash equivalents 29,428 29,542



19

Rangatira Group

NOTES TO THE FINANCIAL STATEMENTSFor the year ended 31 March 2015

NOTE 1 SIGNIFICANT ACCOUNTING POLICIES

REPORTING ENTITYRangatira Limited is an investment company incorporated and

domiciled in New Zealand. Its principal activity is investment.

The Group consists of Rangatira Limited, its subsidiaries and

associates. The financial statements of Rangatira Group have

been prepared in accordance with the Companies Act 1993 and

the Financial Reporting Act 2013.

These financial statements were authorised for issue on 8 June

2015.

STATEMENT OF COMPLIANCEThe 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 financial statements comply with International Financial

Reporting Standards (“IFRS”).

BASIS OF PREPARATIONThe financial statements have been prepared on the basis of

historical cost except for the revaluation of certain non-current

assets and financial instruments outlined below.

Accounting policies are selected and applied in a manner which

ensures that the resulting financial information satisfies the

concepts of relevance and reliability, thereby ensuring that the

substance of the underlying transactions or other events is

reported.

The accounting policies set out below have been applied in

preparing the financial statements for the year ended 31 March

2015, and the comparative information presented in these

financial statements for the year ended 31 March 2014.

FUNCTIONAL AND PRESENTATION CURRENCYThe financial statements are presented in New Zealand dollars

(“NZD”), which is the Group’s functional currency, rounded to

the nearest $’000.

CRITICAL JUDGEMENTS IN APPLYING THE ENTITY’S ACCOUNTING POLICIESIn the process of applying the Group’s accounting policies,

management has made the following judgements that have had

the most significant effect on the amounts recognised in the

financial statements (apart from those involving estimations,

which are dealt with below).

Impairment TestingThere is a need to test for impairment of any tangible or

intangible assets as part of accounting policy note (r). The

valuation of financial assets and liabilities is subjective and

the valuations are done in accordance with accounting policy

notes (h), (i) and (j). Some equity investments are held at cost

because there is no quoted market price in an active market

and the fair value cannot be determined with any accuracy as

required under NZ IAS 39: Financial Instruments: Recognition

and Measurement.

Valuation of Unlisted InvestmentsUnlisted investments are recognised at cost in accordance

with NZ IAS 39: Financial Instruments: Recognition and

Measurement.


20

KEY SOURCES OF ESTIMATION UNCERTAINTYThe preparation of the financial statements requires the Board

of Directors and management to make judgements, estimates

and assumptions that affect the application of accounting

policies and the reported amounts of assets, liabilities,

income and expenses. Actual results may differ from these

estimates. Estimates and underlying assumptions are reviewed

on an ongoing basis. Revisions to accounting estimates are

recognised in the period in which the estimate is revised and in

any future periods affected.

In particular, information about significant areas of estimation

uncertainty in applying accounting policies that have the most

significant effect on the amount recognised in the financial

statements are described below.

Goodwill ImpairmentDetermining whether goodwill is impaired requires an

estimation of the value in use of the cash generating units to

which goodwill has been allocated. The value in use calculation

requires the entity to estimate the future cash flows expected

to arise from the cash generating unit and compare the net

present value of these cash flows using a suitable discount

rate to the carrying amount of the cash generating units’ assets

to determine if any impairment has occurred. Key areas of

judgement include deciding the long-term growth rate of the

applicable businesses and the discount rate applied to those

cash flows.

SIGNIFICANT ACCOUNTING POLICIESThe following significant accounting policies have been

adopted in the preparation and presentation of the financial

statements.

(a) Principles of consolidation

The Group financial statements are prepared by combining

the financial statements of Rangatira Limited and its

subsidiaries as defined in NZ IAS-27: Consolidated and

Separate Financial Statements. Consistent accounting

policies are employed in the preparation and presentation

of the financial statements.

Subsidiaries are entities controlled by the Group. Control

exists when the Group has the power to govern the financial

and operating policies of an entity so as to obtain benefits

from its activities. Associates are those entities in which

the Group has significant influence, but not control, over

the financial and operating policies.

In assessing control, potential voting rights that are

presently exercisable are taken into account. The financial

statements of subsidiaries are included in the financial

statements from the date that control and access to

variable returns of the investment commences until the

date that control ceases. The financial statements include

the information and results of each subsidiary from the

date on which the company obtains control and until such

time as the company ceases to control such subsidiary.

Subsequent to initial recognition, investments in

associates are accounted for under the equity method in

the Group financial statements.

In preparing the financial statements, all intercompany

balances and transactions, and unrealised profits arising

within the Group are eliminated in full.

The non-controlling interest is stated at the non-controlling

interests’ share of the fair values of the identifiable assets

and liabilities on acquisition together with the non-

controlling interests’ share of changes in equity since the

date of the acquisition.

Rangatira Group


NOTE 1 SIGNIFICANT ACCOUNTING POLICIES CONTINUED


21

(b) Business combinations

Acquisitions of subsidiaries and businesses are accounted

for using the acquisition method. The cost of the business

combination is measured as the aggregate of the fair

values (at the date of exchange) of assets given, liabilities

incurred or assumed, and equity instruments issued by

the Group in exchange for control of the acquiree. The

acquiree’s identifiable assets, liabilities and contingent

liabilities that meet the conditions for recognition under

NZ IFRS 3 Business Combinations are recognised at their

fair values at the acquisition date, except for non-current

assets (or disposal groups) that are classified as held for

sale in accordance with NZ IFRS 5 Non-current Assets Held

for Sale and Discontinued Operations, which are recognised

and measured at fair value less costs to sell.

Goodwill arising on the acquisition of a subsidiary is

recognised as an asset at the date that control is acquired

(the acquisition date). Goodwill is measured as the excess

of the sum of the consideration transferred, the amount

of any non-controlling interest in the acquiree and the fair

value of the acquirer’s previously-held equity interest (if

any) in the acquiree over the fair value of the identifiable

net assets recognised. If, after reassessment, the Group’s

interest in the net fair value of the acquiree’s identifiable

assets, liabilities and contingent liabilities exceeds the

cost of the business combination, the excess is recognised

immediately in profit or loss.

The interest of non-controlling interests shareholders in

the acquiree is initially measured at the non-controlling

interests’ proportion of the net fair value of the assets,

liabilities and contingent liabilities recognised.

(c) Revenue recognition

Revenue is measured at the fair value of the consideration

received or receivable. The following specific accounting

policies are applied for the recognition of revenue:

(i) Sale of goods

Revenue from the sale of goods is recognised when the

Group has transferred to the buyer the significant risks

and rewards of ownership of the goods.

(ii) Rendering of services

Revenue from a contract to provide services is

recognised by reference to the stage of completion of

the contract at balance date.

(iii) Dividend revenue and interest revenue

Dividend revenue is recognised on the date that the

Group’s right to receive payment is established, which

in the case of quoted securities is the ex-dividend date.

Interest revenue is recognised on a time proportionate

basis that takes into account the effective yield on the

financial asset.

(d) Other income

Other gains/losses on the sale of investments and property,

plant and equipment are recognised when the risks and

rewards have transferred to the buyer.

(e) Foreign currency transactions

All foreign currency transactions during the financial year

are brought to account using the exchange rate in effect

at the date of the transaction. Foreign currency monetary

items at reporting date are translated at the exchange

rate existing at reporting date. Non-monetary assets and

liabilities carried at fair value that are denominated in

foreign currencies are translated at the rates prevailing

at the date when the fair value was determined. Exchange

Rangatira Group




22

differences are recognised in the profit or loss in the period

in which they arise except for exchange differences on the

Group’s foreign operations assets and liabilities which

are recognised in the Group’s foreign currency translation

reserve.

(f) Goods and services tax (“GST”)

Revenues, expenses and assets are exclusive of GST,

except for receivables and payables which are recognised

inclusive of GST as invoiced.

(g) Inventories

Inventories, consisting of merchandise held for resale,

manufactured goods, manufacturing work in progress

and raw materials are valued at the lower of cost and

net realisable value determined on a first-in first-out

basis. Costs, including an appropriate portion of direct

overhead expenses, are assigned to inventory on-hand on

a weighted average basis. Net realisable value represents

the estimated selling price less all estimated costs of

completion and costs to be incurred in marketing, selling

and distribution.

(h) Financial assets

Cash and cash equivalents comprise cash on hand, cash in

banks and investments in money market instruments. Bank

overdrafts are shown within borrowings in current liabilities

in the statement of financial position.

Investments are recognised and derecognised on trade

date where the purchase or sale of an investment is under

a contract whose terms require delivery of the investment

within the timeframe established by the market concerned,

and are initially measured at fair value, net of transaction

costs.

Subsequent to initial recognition investments in associates

are accounted for under the equity method in the Group

financial statements.

Other financial assets are classified into the following

specified categories: financial assets ‘at fair value through

profit or loss’, ‘available for sale’ financial assets, and ‘loans

and receivables’. The classification depends on the nature

and purpose of the financial assets and is determined at

the time of initial recognition.

Financial assets at fair value through profit or loss

The Group has classified certain listed shares and

derivatives as financial assets at fair value through profit

or loss where the financial asset is held for trading. The

listed shares have been acquired principally for the purpose

of selling in the near future and the derivatives are not

designated and effective as hedging instruments. These

financial assets are at fair value, with any resultant gain or

loss recognised in the Consolidated Income Statement.

Available for sale financial assets

Certain shares and convertible notes are classified as being

‘available for sale’ and are stated at fair value. Investments

categorised as ‘available for sale’ does not assume that

the underlying business is saleable at the reporting date or

that its current shareholders have an intention to sell their

holding in the near future. Gains and losses arising from

changes in fair value are recognised in other comprehensive

income and accumulated as a separate component of

equity in the available for sale revaluation reserve, until the

investment is disposed of or is determined to be impaired,

at which time the cumulative gain or loss previously

recognised in the available for sale revaluation reserve

is reclassified from equity to profit or loss. Dividends

are recognised in profit or loss when the Group’s right to

receive the dividend is established.

Loans and receivables

Trade receivables, loans, and other receivables are

recorded at amortised cost less impairment.

Rangatira Group




23

Fair value estimation

The fair value of financial instruments traded in active

markets is based on quoted market prices at the balance

date. The fair value of derivative financial instruments

and listed shares is based on quoted market prices where

available. Where such prices are not available use is made

of discounted cash flow analysis using the applicable yield

curve for the duration of the instruments.

The nominal value less estimated credit risk adjustments

of trade receivables is assumed to approximate their fair

values.

(i) Impairment of financial assets

Financial assets, other than those at fair value through

profit or loss, are assessed for indicators of impairment

throughout the year and at each balance date. Financial

assets are impaired where, there is objective evidence

that as a result of one or more events that occurred after

the initial recognition of the financial asset, the estimated

future cash flows of the investment have been impacted

or the fair value less the costs to sell the assets have been

impacted. For financial assets carried at amortised cost,

the amount of the impairment is the difference between

the asset’s carrying amount and the present value of

estimated future cash flows, discounted at the cost of

capital or the fair value in market of the assets.

The carrying amount of the financial asset is reduced by

the impairment loss directly for all financial assets with the

exception of trade receivables where the carrying amount

is reduced through the use of an allowance account. When

a trade receivable is uncollectible, it is written off against

the allowance account. Subsequent recoveries of amounts

previously written off are credited against the allowance

account. Changes in the carrying amount of the allowance

account are recognised in profit or loss.

With the exception of available for sale equity instruments,

if, in a subsequent period, the amount of the impairment

loss decreases and the decrease can be related objectively

to an event occurring after the impairment was recognised,

the previously recognised impairment loss is reversed

through profit or loss to the extent the carrying amount of

the investment at the date the impairment is reversed does

not exceed what the amortised cost would have been had

the impairment not been recognised. In respect of available

for sale equity securities, any subsequent increase in

fair value after an impairment loss is recognised in other

comprehensive income and accumulated as a separate

component of equity in the available for sale revaluation

reserve.

(j) Financial liabilities

Payables

Trade payables and other accounts payable are recognised

when the Group becomes obliged to make future payments

resulting from the purchase of goods and services.

The fair value of financial liabilities for disclosure purposes

is estimated by discounting the future contractual cash

flows at the current market interest rate that is available to

the Group for similar financial instruments.

Borrowings

All loans and borrowings are initially recognised at fair

value net of transaction costs. After initial recognition,

these loans and borrowings are subsequently measured

at amortised cost using the effective interest method.

Amortised cost is calculated taking into account any issue

costs and any discount or premium on drawdown.

The effective interest method is a method of calculating

the amortised cost of a financial liability and of allocating

interest expense over the relevant period. The effective

interest rate is the rate that exactly discounts estimated

future cash payments through the expected life of the

financial liability, or where appropriate, a shorter period, to

the net carrying amount of the financial instrument.

Borrowings are classified as current liabilities unless the

Group has an unconditional right to defer settlement of the

liability for at least 12 months after the balance date.

Rangatira Group




24

(k) Derivative financial instruments

The Group enters into derivative financial instruments to

manage its exposure to foreign currency risk and interest

rate risk, including forward exchange contracts and interest

rate swaps.

Derivatives are initially recognised at fair value on the date

a derivative contract is entered into and are subsequently

remeasured to their fair value at each reporting date. The

resulting gain or loss is recognised in the Consolidated

Income Statement immediately. The Group has not

designated any derivatives as hedges as defined under

hedge accounting. A derivative is presented as non-current

if the maturity is over 12 months and current if the maturity

is less than 12 months.

(l) Property, plant and equipment

Property, plant and equipment is measured at cost less

accumulated depreciation and accumulated impairment

losses. Cost includes expenditure that is directly

attributable to the acquisition of the item.

Depreciation is provided on property, plant and equipment,

excluding land. Depreciation is calculated on a straight line

or diminishing value basis so as to write off the net cost of

each asset over its expected useful life to its estimated

residual value. Leasehold improvements are depreciated

over the period of the lease or estimated useful life,

whichever is the shorter, using the diminishing value or

straight line method. The estimated useful lives, residual

values and depreciation method are reviewed at the end of

each annual reporting period.

The principal rates (straight line or diminishing value) used

are:

• Freehold and leasehold buildings 1-4%

• Furniture and leasehold improvements 4-40%

• Plant and equipment 4-60%

The gain or loss arising on disposal or retirement is

determined as the difference between the sales proceeds

and carrying amount of the asset and is recognised in the

profit or loss.

(m) Non-current assets held for sale

Non-current assets and disposal groups are classified as

held for sale if their carrying amount will be recovered

principally through a sale transaction rather than through

continuing use. This condition is regarded as met only when

the sale is highly probable and the asset (or disposal group)

is available for immediate sale in its present condition.

Management must be committed to the sale, which should

be expected to qualify for recognition as a completed sale

within one year from the date of classification.

Non-current assets (and disposal groups) classified as

held for sale are measured at the lower of their previous

carrying amount and fair value less costs to sell.

(n) Leased assets

Leases are classified as finance leases wherever the terms

of the lease transfer substantially all the risks and rewards

of ownership to the lessee. All other leases are classified as

operating leases.

Leases

Assets held under finance leases are initially recognised at

their fair value or, if lower, at amounts equal to the present

value of the minimum lease payments, each determined

at the inception of the lease. The corresponding liability

to the lessor is included in the balance sheet as a finance

lease obligation. Lease payments are apportioned between

finance charges and reduction of the lease obligation so

as to achieve a constant rate of interest on the remaining

balance of the liability. Finance charges are charged directly

to the Consolidated Income Statement.

Finance leased assets are amortised on a straight line basis

over the estimated useful life of the asset or the lease

term, which ever is shorter.

Rangatira Group




25

Operating lease payments are recognised as an expense

on a straight line basis over the lease term, except where

another systematic basis is more representative of the

time pattern in which economic benefits from the leased

asset are consumed.

Lease incentives

In the event that lease incentives are received to enter

into operating leases, such incentives are recognised

as a liability. The aggregate benefits of incentives are

recognised as a reduction of rental expense on a straight

line basis, except where another systematic basis is more

representative of the time pattern in which economic

benefits from the leased asset are consumed.

(o) Borrowing costs

Borrowing costs directly attributable to the acquisition,

construction or production of qualifying assets that

necessarily take a substantial period of time to get ready

for their intended use or sale, are added to the cost of those

assets, until such time as the assets are substantially ready

for their intended use or sale. All other borrowing costs are

recognised in the Consolidated Income Statement in the

period in which they are incurred.

(p) Intangible assets

Trademarks and software are finite life intangibles and

are recorded at cost less accumulated amortisation

and accumulated impairment losses. Amortisation for

trademarks and software is charged on a straight line

basis over their estimated useful lives. Amortisation for

developments costs is charged on a volume of sales basis.

The estimated useful life and amortisation method is

reviewed at the end of each annual reporting period.

The principal rates used are:

• Trademarks 10-50%

• Software 10-50%

Expenditure on research activities is recognised as an

expense in the period in which it is incurred. An internally

generated intangible asset arising from development

(or from the development phase of an internal project)

is recognised if, and only if, all of the following are

demonstrated:

• The technical feasibility of completing the intangible

asset so that it will be available for use or sale;

• The intention to complete the intangible asset and use or

sell it;

• The ability to use or sell the intangible asset;

• How the intangible asset will generate probable future

economic benefits;

• The availability of adequate technical, financial and other

resources to complete the development and to use or sell

the intangible asset; and

• The ability to measure reliably the expenditure

attributable to the intangible asset during its

development.

All intangible assets acquired in a business combination are

identified and recognised separately from goodwill where

they satisfy the definition of an intangible asset and their

fair value can be measured reliably.

(q) Goodwill

Goodwill arising on the acquisition of a subsidiary is

recognised as an asset at the date that control is acquired

(the acquisition date). Goodwill is measured as the excess

of the sum of the consideration transferred, the amount

of any non-controlling interest in the acquiree and the fair

value of the acquirer’s previously-held equity interest (if

any) in the acquiree over the fair value of the identifiable

net assets recognised. Goodwill is not amortised, but

tested for impairment annually and whenever there is

an indication that the goodwill may be impaired. Any

impairment is recognised immediately in the Income

Statement and is not subsequently reversed. Refer also to

accounting policy note (r).

Rangatira Group




26

(r) Impairment of assets

At each reporting date, the Group reviews the carrying

amounts of its tangible and intangible assets to determine

whether there is any indication that those assets have

suffered an impairment loss. If any such indication exists,

the recoverable amount of the asset is estimated in order

to determine the extent of the impairment loss (if any).

Where the asset does not generate cash flows that are

independent from other assets, the Group estimates the

recoverable amount of the cash generating unit to which

the asset belongs.

Goodwill and intangible assets not yet available for use are

tested for impairment annually and whenever there is an

indication that the asset may be impaired. Any impairment

of goodwill is not subsequently reversed.

Recoverable amount is the higher of fair value less costs to

sell and value in use. In assessing value in use, the estimated

future cash flows are discounted to their present value

using a pre-tax discount rate that reflects current market

assessments of the time value of money and the risks

specific to the asset for which the estimates of future cash

flows have not been adjusted.

If the recoverable amount of an asset (or cash generating

unit) is estimated to be less than its carrying amount, the

carrying amount of the asset (or cash generating unit) is

reduced to its recoverable amount. An impairment loss is

recognised in profit or loss immediately, unless the relevant

asset is carried at fair value, in which case the impairment

loss is treated as a revaluation decrease.

Where an impairment loss subsequently reverses, other

than for goodwill, the carrying amount of the asset or

cash generating unit is increased to the revised estimate

of its recoverable amount, but only to the extent that

the increased carrying amount does not exceed the

carrying amount that would have been determined had no

impairment loss been recognised for the asset (or cash

generating unit) in prior years. A reversal of an impairment

loss is recognised in the Income Statement immediately,

unless the relevant asset is carried at fair value, in which

case the reversal of the impairment loss is treated as a

revaluation increase.

(s) Income tax

Current Tax

Current tax is calculated by reference to the amount of

income taxes payable or recoverable in respect of the

taxable profit or tax loss for the period. It is calculated

using tax rates and tax laws that have been enacted or

substantively enacted by reporting date. Current tax for

current and prior periods is recognised as a liability (or

asset) to the extent that it is unpaid (or refundable).

Deferred Tax

Deferred tax is accounted for using the comprehensive

balance sheet liability method in respect of temporary

differences arising from differences between the carrying

amount of assets and liabilities in the financial statements

and the corresponding tax base of those items.

In principle, deferred tax liabilities are recognised for all

taxable temporary differences. Deferred tax assets are

recognised to the extent that it is probable that sufficient

taxable amounts will be available against which deductible

temporary differences or unused tax losses and tax offsets

can be utilised. However, deferred tax assets and liabilities

are not recognised if the temporary differences giving rise

to them arise from the initial recognition of assets and

liabilities (other than as a result of a business combination)

which affects neither taxable income nor accounting profit.

Furthermore, a deferred tax liability is not recognised in

relation to taxable temporary differences arising from

goodwill.

Deferred tax liabilities are recognised for taxable

temporary differences arising on investments in

subsidiaries and associates except where the Group is

able to control the reversal of the temporary differences

and it is probable that the temporary differences will not

Rangatira Group




27

reverse in the foreseeable future. Deferred tax assets

arising from deductible temporary differences associated

with these investments and interests are only recognised

to the extent that it is probable that there will be sufficient

taxable profits against which to utilise the benefits of the

temporary differences and they are expected to reverse in

the foreseeable future.

Deferred tax assets and liabilities are measured at the

tax rates that are expected to apply to the period(s) when

the asset and liability giving rise to them are realised or

settled, based on tax rates (and tax laws) that have been

enacted or substantively enacted by reporting date. The

measurement of deferred tax liabilities and assets reflects

the tax consequences that would follow from the manner in

which the Group expects, at the reporting date, to recover

or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset when they

relate to income taxes levied by the same taxation

authority and the Group intends to settle its current tax

assets and liabilities on a net basis.

Current and deferred tax for the period

Current and deferred tax is recognised as an expense or

income in the Income Statement, except when it relates

to items recognised in other comprehensive income or

directly to equity, in which case the deferred tax or current

tax is also recognised in other comprehensive income

or directly in equity, or where it arises from the initial

accounting for a business combination, in which case it

is taken into account in the determination of goodwill or

excess.

(t) Employee benefits

Provision is made for benefits accruing to employees in

respect of wages and salaries, annual leave, long service

leave, and sick leave when it is probable that settlement

will be required and they are capable of being measured

reliably.

Provisions made in respect of employee benefits expected

to be settled within 12 months are measured at their nominal

values using the remuneration rate expected to apply at the

time of settlement. Provisions made in respect of employee

benefits which are not expected to be settled within 12

months are measured as the present value of the estimated

future cash flows to be made by the Group in respect of

services provided by employees up to reporting date.

(u) Cash flow statement

The cash flow statement is prepared exclusive of

GST, which is consistent with the method used in the

Consolidated Income Statement. Cash flows are included in

the cash flow statement on a net basis.

Definition of terms used in the cash flow statement:

Cash and cash equivalents includes cash on hand, demand

deposits, and other short term highly liquid investments

that are readily convertible to a known amount of cash and

are subject to an insignificant risk of change in value.

Operating activities include all transactions and other

events that are not investing or financing activities.

Investing activities are those activities relating to the

acquisition and disposal of current and non-current

investments and any other non current assets.

Financing activities are those activities relating to changes

in the equity and debt capital structure of the Group and

those activities relating to the cost of servicing the Group’s

equity capital.

(v) Earnings per share

The Group presents basic earnings per share (EPS) data for

its ordinary shares. Basic EPS is calculated by dividing the

profit or loss attributable to ordinary shareholders of the

Group by the weighted average number of ordinary shares

outstanding during the period. There are no dilutive equity

instruments in the Group so basic earnings per share and

diluted earnings per share are the same.

Rangatira Group




28

(w) Government grants

The Group receives grants from various government

agencies in the normal course of business. Government

grants have been recognised as income over the period

necessary to match them with the costs they are intended

to compensate. The grants from government agencies

are recognised as revenue in the Consolidated Income

Statement at the same time the associated expenditure is

recognised.

(x) Standards and interpretations effective in the current

period

Those with disclosure impact:

The impact of adoption of the following standards and

amendments has been to expand the disclosures provided

in these financial statements or has had no impact:

Standard Standard name

NZ IAS 32 Amendments to NZ IAS 32 ‘Financial Instruments: Presentation’ – Offsetting Financial Assets and Financial Liabilities

NZ IFRS 10 Amendments to NZ IFRS 10 ‘Consolidated Financial Statements’

NZ IFRS 12 Disclosure of Interests in Other Entities

NZ IAS 27 Separate Financial Statements

NZ IFRIC 21 Levies

(y) Standards or interpretations not yet effective

At the date of authorisation of these financial statements

various standards, amendments and interpretations have

been issued by the External Reporting Board but have not

been adopted by the Group as they are not yet effective.

Application of the below standards, amendments and

interpretations, is not expected to have a material impact

on the Group’s financial position, results or disclosures in

the period of initial application.

Standard/Interpretation

Effective for annual reporting periods beginning on or after

Expected to be initially applied in the financial year ending

NZ IFRS 9 ‘Financial Instruments’

1 January 2018 31 March 2019

NZ IFRS 15 ‘Revenue from Contracts with Customers’


Amendments to NZ IFRS 11 ‘Joint Arrangements’


Amendments to NZ IFRS 10 ‘Consolidated Financial Statements’ and NZ IAS 28 ‘Investments in Associates’


Amendments to NZ IAS 1 – Presentation of Financial Statements


Rangatira Group




29

Rangatira Group

NOTES TO THE FINANCIAL STATEMENTSCONTINUEDFor the year ended 31 March 2015

NOTE 2 REVENUE Group 2015

$000

Group 2014

$000

Revenue from the sale of goods 17,295 17,345

Revenue from the rendering of services 20,195 17,711

Dividends:

- Other entities 1,822 1,919

Interest revenue:

- Other loans and receivables 1,008 1,257

- Related parties 1,902 1,719

Rental Income 76 100

Total revenue 42,298 40,051

NOTE 3 OTHER INCOME Group 2015

$000

Group 2014

$000

(Loss) on disposal of property, plant and equipment (89) -

Gain on disposal of investments 4,966 33,165

Change in fair value of financial assets/liabilities classified as fair value through profit or loss

322 (71)

Other - 173

Total other income 5,199 33,267


30

Group 2015

$000

Group 2014

$000

Profit before tax has been arrived at after charging the following expenses:

Cost of sales 6,703 7,085

Finance costs:

- Interest on loans 147 164

- Other interest expense 15 92

162 256

Employee benefit expense:

- Kiwisaver employer contributions 258 210

- Other employee benefits 13,904 13,408

Total employee benefit expenses 14,162 13,618

Fees paid to auditors:

- Audit of the financial statements 110 110

- Other non-audit services (i) 12 20

122 130

Donations 3 3

Operating lease rental expense 2,399 2,294

Repairs and maintenance 1,066 966

Freight and travel 435 390

Other expenses 5,086 4,787

Total operating expenses 9,111 8,570

(i) A subsidiary received advice on tax from Deloitte.

Rangatira Group


NOTE 4 PROFIT BEFORE TAX


31

Rangatira Group


NOTE 5 INCOME AND EXPENSES RELATING TO FINANCIAL INSTRUMENTS

NOTE

Group 2015

$000

Group 2014

$000

Profit for the year includes the following income and expenses arising from movements in the carrying amounts of financial instruments:

Financial assets at fair value through profit and loss:

Change in fair value of financial assets at fair value through profit or loss (held for trading)

Equity investments 320 (68)

320 (68)

Loans and receivables:

Interest revenue 2 2,910 2,976

2,910 2,976

Available for sale investments:

Dividend revenue 2 1,822 1,919

1,822 1,919

Financial liabilities at fair value through profit and loss:

Change in fair value of financial liabilities at fair value through profit or loss (held for trading)

Foreign exchange 2 (3)

2 (3)

Financial liabilities at amortised cost:

Interest expense 4 162 256

162 256


32

Group 2015

$000

Group 2014

$000

Income tax recognised in profit or loss

Profit before tax 17,584 42,389

Prima facie tax at 28% 4,924 11,869

Tax effects of temporary differences:

- Non deductible expenditure 64 184

- Non assessable income (2,188) (9,839)

- Unutilised tax losses (3) (29)

- Prior period adjustment 62 33

Tax expense 2,859 2,218

Income tax expense is comprised of:

Current tax 2,797 2,335

Deferred tax 62 (117)


Current tax assets/(liabilities)

Tax receivable 341 458

Tax payable (676) (364)

(335) 94

Deferred tax asset

Temporary differences 244 362

244 362

Deferred tax liability

Temporary differences 1,966 2,022

1,966 2,022

Imputation credit account

Balance at end of year 2,149 2,333

The availability of imputation credits is subject to the requirements of New Zealand tax legislation continuing to be met.

Rangatira Group


NOTE 6 TAX EXPENSE


33

2014

Opening balance

$000

Charged to income

$000Acquistions

$000

Closing balance

$000

Gross deferred tax liabilities:

Property, plant and equipment 2,067 (45) - 2,022

2,067 (45) - 2,022

Gross deferred tax assets:

Provisions 268 66 - 334

Doubtful debts and impairment losses 12 (12) - -

Financial assets at fair value through profit or loss 6 19 - 25

Other 4 (1) - 3

290 72 - 362

2015

Opening balance

$000

Charged to income

$000Acquistions

$000

Closing balance

$000

Gross deferred tax liabilities:

Property, plant and equipment 2,022 (56) - 1,966

2,022 (56) - 1,966

Gross deferred tax assets:

Provisions 334 (26) - 308

Financial assets at fair value through profit or loss 25 (90) - (65)

Other 3 (2) - 1

362 (118) - 244

Rangatira Group


NOTE 6 TAX EXPENSE CALCULATED CONTINUED


34

Rangatira Group


NOTE 7 TRADE RECEIVABLES Group 2015

$000

Group 2014

$000

Trade receivables (i) 2,746 3,061

Allowance for doubtful debts - -

2,746 3,061

Other receivables 81 16

2,827 3,077

(i) The average credit period on sales of goods is 53 days (2014: 32 days). No interest is charged on the trade receivables or on the outstanding balances. The Group has provided fully for all receivables over 180 days because historical experience is such that receivables that are past due beyond 180 days are generally not recoverable. Trade receivables between 40 days and 180 days are provided for based on estimated irrecoverable amounts from the sale of goods, determined by reference to past default experience.Included in the Group’s trade receivable balance are debtors with a carrying amount of $772,000 (relates to over 40 days) (2014: $632,000) which are past due at the reporting date for which the Group has not provided as there has not been a significant change in credit quality and the Group believes that the amounts are still considered recoverable. The Group does not hold any collateral over these balances. The average age of these receivables is 100 days (2014: 83 days).

Before accepting any new customers, the Group uses an assessment criteria for potential customers’ credit quality and defines

credit limits by customer.

Group 2015

$000

Group 2014

$000

Ageing of past due but not impaired trade receivables

30-60 days 419 287

61-90 days 235 108

91-120 days 107 254

121-150 days 2 25

151-180 days 9 -

Total 772 674

Movement in doubtful debts

Balance at beginning of the year - 41

Amounts written off during the year 4 (41)

Decrease in allowance recognised in profit (4) -

Balance at the end of the year - -

In determining the recoverability of a trade receivable the Group considers any change in the credit quality of the trade receivable

from the date credit was initially granted up to the reporting date. The concentration of credit risk is limited due to the customer

base being large and unrelated. Accordingly, the Directors believe that there is no further credit provision required in excess of the

allowance for doubtful debts.


35

Group 2015

$000

Group 2014

$000

Merchandise held for resale 432 366

Goods in transit 80 -

Work in progress 71 72

Raw materials 357 385

940 823

Rangatira Group


NOTE 8 INVENTORIES

Group 2015

$000

Group 2014

$000


Current

Interest bearing loans advanced to:

- Associates 18,688 16,445

Non-interest bearing loans advanced to:

- Associates 423 4

Financial assets at fair value through profit or loss:

Current

- Listed shares 2,438 3,861

Available for sale investments:

Non-current

- Listed shares at fair value 40,002 44,739

Cost:

Non-current

Unlisted shares at cost 30,276 25,267

91,827 90,316

Disclosed as:

Current 21,549 20,310

Non-current 70,278 70,006

91,827 90,316

NOTE 9 OTHER FINANCIAL ASSETS

NOTE 10 OTHER CURRENT ASSETS Group 2015

$000

Group 2014

$000

Prepayments 494 346

494 346


36

Rangatira Group


NOTE 11 PROPERTY, PLANT AND EQUIPMENT

Gross carrying amount

Buildings at cost

$000

Plant and equipment

at cost $000

Furniture and leasehold

improvements at cost

$000Total $000

2014

Gross value at the beginning of the year 14,497 35,733 7,090 57,320

Additions 20 2,241 3,875 6,136

Disposals - (2,952) (38) (2,990)

Gross value at the end of the year 14,517 35,022 10,927 60,466

2015

Gross value at the beginning of the year 14,517 35,022 10,927 60,466

Additions 85 4,304 486 4,875

Disposals - (1,573) (70) (1,643)

Gross value at the end of the year 14,602 37,753 11,343 63,698

Accumulated depreciation and impairment

Buildings at cost

$000

Plant and equipment

at cost $000

Furniture and leasehold

improvements at cost

$000Total $000

2014

Accumulated depreciation at the beginning of the year 8,140 24,272 3,961 36,373

Depreciation expense 370 1,113 573 2,056

Disposals - (36) (33) (69)

Accumulated depreciation at the end of the year 8,510 25,349 4,501 38,360

2015

Accumulated depreciation at the beginning of the year 8,510 25,349 4,501 38,360

Depreciation expense 358 1,362 627 2,347

Disposals 1 (1,485) (50) (1,534)

Accumulated depreciation at the end of the year 8,869 25,226 5,078 39,173

Net book value

As at 31 March 2014 6,007 9,673 6,426 22,106

As at 31 March 2015 5,733 12,527 6,265 24,525

The Group had no impairment losses for property, plant and equipment.


37

Rangatira Group


NOTE 12 INVESTMENTS IN ASSOCIATE COMPANIES Number of shares held

000sPercentage

2015Held

2014Balance

date

Associates

Domett Properties Limited 90 50% 50% 31 March

Hellers Limited 250 50% 50% 31 March

Tuatara Brewing Limited 88 35% 35% 31 March

Domett Properties Limited is a property investment company. Domett Properties Limited was equity accounted from 13 June 2003.

Hellers Limited is a producer of bacon, ham and smallgoods. Hellers Limited was equity accounted from 13 June 2003.

Tuatara Brewing Limited is a brewer of craft beers. Tuatara Brewing Limited was equity accounted from 1 July 2013.

Group 2015

$000

Group 2014

$000

Associates: Continuing operations

Domett Properties Limited - -

Hellers Limited 4,402 5,485

Tuatara Brewing Limited 3,293 3,113

Total investments in associate companies 7,695 8,598

Change in carrying value

Group 2015

$000

Group 2014

$000

Book value at the beginning of the year 8,598 6,556

Investment in Tuatara Brewing Limited - 3,051

Share of profit before tax of associate companies 3,948 3,788

Share of associate companies tax expense (943) (1,207)

Share of profit for the year 3,005 2,581

Dividends received from associate companies (3,397) (3,500)

Share of change in retained earnings of associate companies (392) (919)

Share of associate's foreign currency hedge reserve for the year (511) (90)

Total investments in associate companies 7,695 8,598


38

Rangatira Group


NOTE 12 INVESTMENTS IN ASSOCIATE COMPANIES CONTINUED

Summarised financial information of associates

Group 2015

$000

Group 2014

$000

Cash and cash equivalents 38 534 Other current assets 46,595 40,145 Non-current assets 74,825 56,415 Total assets 121,458 97,094

Current financial liabilities - (23,085)Other current liabilities (41,155) (33,877)

Non-current liabilities (51,995) (12,672)Shareholder loans (38,606) (33,381)Total liabilities (131,756) (103,015)Net assets (10,298) (5,921)

Revenue 228,458 186,643

Depreciation 6,485 5,412 Amortisation 115 126 Interest expense 6,788 4,948 Interest income 3 -

Net profit before tax 7,077 8,222



Other comprehensive income (1,016) 498

Total comprehensive income for the year after tax 2,410 6,132

Share of associates' profit afer tax 1,629 2,581

Share of associates' net assets (5,321) (3,048)

Dividends received by the Group from associates 3,397 3,500

Contingent liabilities of associates - -

Capital commitments of associates - -

The Group’s share of the capital commitments, other expenditure commitments and contingent liabilities of associates is disclosed in

notes 22, 23 and 24.

Goodwill included in the carrying amount of the Group’s investment in associate companies

Group 2015

$000

Group 2014

$000

On acquisition of associate companies 11,212 9,085 Purchase of Tuatara Brewing Limited - 2,844 Sale of Contract Resources Limited - (717)

11,212 11,212


39

Rangatira Group


NOTE 13 GOODWILL Group 2015

$000

Group 2014

$000

Goodwill by subsidiary

Auckland Packaging Company Limited 1,826 1,826

New Zealand Experience Limited 6,721 6,721

Total goodwill 8,547 8,547

Goodwill has been allocated for impairment testing purposes to the cash-generating units of each subsidiary. The recoverable

amount of goodwill is determined from a value in use calculation. The key assumptions applied in the calculation are in respect

of discount rates, growth rates, expected transaction levels and anticipated cost levels. Management estimates discount rates

using pre-tax rates that reflect current market assessments of the time value of money and the risks specific to the assets of the

cash generating unit. The discount rate used is 15% (2014: 15%). The growth rates applied are based on industry growth forecasts.

Changes in anticipated costs are based on past practices and expectations of future market changes. The nominal growth rate used

is 3% consisting of real growth rate of 0% and inflation of 3%. Management prepares 5 year cash flow forecasts based on strategic

plans approved by the Board. Management determines a terminal value for the cash generating unit because the assets are part of a

perpetual business.

The cash generating unit’s value was determined by including the goodwill associated with the acquisition of a subsidiary.

At 31 March 2015, from the tests conducted, there were no indicators of impairment necessitating a writedown of goodwill.


40

Rangatira Group


NOTE 14 INTANGIBLES

Group 2014Trademarks

$000Software

$000

Development costs $000

Total $000

Gross carrying amount at the beginning of the year - - 1,000 1,000

Additions - - - -

Disposals - - - -

Gross carrying amount at the end of the year - - 1,000 1,000

Accumulated amortisation at the beginning of the year - - - -

Impairment loss for the year - - 1,000 1,000

Disposals - - - -

Accumulated amortisation at the end of the year - - 1,000 1,000

Net book value at the beginning of the year - - 1,000 1,000

Net book value at the end of the year - - - -

Impairment testing for intangible assets

The Group tests intangible assets annually for impairment, or more frequently if there are indications that intangible assets might be

impaired.

The recoverable amounts of each of the intangible assets are determined on a similar basis as for goodwill. The key assumptions

underlying the value in use calculations are the same as those applied for the impairment testing of goodwill. Development costs,

software and trademarks are amortised on the basis disclosed in accounting policy Note 1 (p).

At 31 March 2014 the development costs were impaired. There are no intangible assets for the Group at 31 March 2015.


41

Rangatira Group


NOTE 15 TRADE CREDITORS Group 2015

$000

Group 2014

$000

Trade creditors (1) 2,435 2,172

GST payable 343 290

Other payables 391 657

3,169 3,119

Current portion 3,169 3,119

3,169 3,119

(1) The average credit period on purchases of certain goods is 38 days (2014: 35 days). No interest is charged on the trade payables. The Group has financial risk management policies in place to ensure that all payables are paid within the credit timeframe.

NOTE 16 BORROWINGS Group 2015

$000

Group 2014

$000

Unsecured at amortised cost

Current

Loans from non-controlling interests in subsidiaries 336 346

Non-current

Loans from non-controlling interests in subsidiaries 977 977

Secured at amortised cost

Current

Bank loans (1) 350 -

Non-current

Bank loans (1) 2,000 2,350

3,663 3,673

Disclosed as:

Current portion 686 346

Non-current portion 2,977 3,327

3,663 3,673

(1) The Parent’s bank loan facility requires the security of listed equities with twice the value of the bank loan. This facility is undrawn at March 2015.Polynesian Spa Limited’s bank loans are secured by a first mortgage over the leasehold interest and a general security agreement over all its assets.


42

Rangatira Group


NOTE 17 PROVISIONS Group 2015

$000

Group 2014

$000

Employee benefits - current 1,333 1,135

Make good on lease - non-current 286 325

1,619 1,460

Disclosed as:

Current portion 1,333 1,189

Non-current portion 286 271

1,619 1,460

The provision for employee benefits represents the present value of the Directors' best estimate of the future cost of economic

benefits that will be required in the next 12 months for payment of employee entitlements, such as outstanding annual leave, long

service leave and collective agreement payments. This estimate has been made on the basis of future expected wage rates for the

forthcoming 12 month period.

The provision for make good is the Directors’ best estimate of the future cost to make good any damage to the land in removing any

movable fixtures at the expiration of the lease.


43

Rangatira Group


NOTE 18 SHARE CAPITAL Group 2015

$000

Group 2014

$000

Ordinary "A" shares (6,165,000 shares) 6,165 6,165

Ordinary "B" shares (11,547,000 shares) 11,547 11,547

17,712 17,712

“A” and “B” shares rank equally, except that “B” shares carry restricted voting rights. These are limited to voting on proposals to:

(i) sell the whole of Rangatira Limited’s undertaking, or

(ii) alter its constitution.

The “B” shareholders are not entitled to participate in future cash issues unless the “A” shareholders agree. These matters are set out

in full in Clause 3 of Rangatira Limited’s constitution.

All “A” and “B”shares are fully paid and there are no partly paid shares.

NOTE 19 RETAINED EARNINGS

Note

Group 2015

$000

Group 2014

$000

Balance at beginning of year 117,405 85,769

Profit attributable to equity holders of the Parent 13,744 39,429

Dividends 21 (8,148) (7,793)

Balance at end of year 123,001 117,405


44

Rangatira Group


NOTE 20 EARNINGS PER SHARE Group 2015

Group 2014

Profit attributable to equity holders of the Parent ($000's) 13,744 39,429

Number of shares (000's) 17,712 17,712

Earnings per share (cents) 77.6 222.6

There has been no change in the number of shares on issue during the period.

Diluted earnings per share are the same as basic earnings per share because there are no dilutive equity instruments in the Group.

NOTE 21 DIVIDENDSGroup

2015Group

2014

Amount paid (cents per share) 46.0 44.0

Amount paid ($000's) 8,148 7,793

NOTE 22 CAPITAL COMMITMENTSGroup

2015 $000

Group 2014

$000

Plant and equipment 113 -

Other (1) 2,945 6,775

3,058 6,775

(1) Capital commitments are for investment funds which are under contract but not invested at balance date.

NOTE 23 LEASESGroup

2015 $000

Group 2014

$000

Non-cancellable operating leases payments

Within 1 year 1,912 1,904

Greater than 1 year, but less than 5 years 4,747 5,770

Greater than 5 years 13,529 14,431

20,188 22,105

The Group has entered into a number of operating leases for land and premises for the Group companies. The lease terms vary and

there are options to renew. The Group also has operating leases for cars and computer equipment.


45

Rangatira Group


NOTE 24 CONTINGENT LIABILITIESThere are no significant contingent liabilities (2014: nil).

NOTE 25 SUBSIDIARY COMPANIES

Principal activities 2015 2014

Auckland Packaging Company Limited Packaging 100% 100%

DLL Investments Limited (iv) Special purpose investment 70% 70%

NZ Experience Limited Special purpose investment 100% 100%

Peach Products Limited (i) Special purpose investment 50% 50%

Polynesian Spa Limited Tourism 51% 51%

Precision Dispensing Systems Limited (ii) Pump developer and manufacturer 85% 85%

Rainbow's End Theme Park Limited Theme park operator 100% 100%

Rangatira Ventures Limited (iii) Special purpose investment 100% 100%

Tongariro Invt Limited Special purpose investment 100% 100%

Watt Land Company Limited Trading investment 100% 100%

(i) Non trading subsidiaries.(ii) Fully diluted shareholding.(iii) Incorporated in March 2014.(iv) Previously called Vita New Zealand Limited and Dunlop Living Limited.

NOTE 26 RELATED PARTY TRANSACTIONS

All subsidiary companies have balance dates of 31 March and are incorporated in New Zealand

TRANSACTIONS AND BALANCES WITH ASSOCIATES

The transactions and balances below are those between the Parent and its associates.Group

2015 $000

Group 2014

$000

Revenue

Interest received from associates 1,902 1,719

Directors' fees received from associates 22 16

Expenses

Key management personnel expenses - short term 1,013 1,160

Loans

Loans to associates (i) 19,111 16,449

(i) Loans to associates are a mixture of fixed term and on call and at market interest rates or interest free. Refer note 9. No debts to associates, key management personnel or other related parties were written off or forgiven during the year (2014: nil).


46

Rangatira Group


NOTE 27 FINANCIAL INSTRUMENTS

(A) CAPITAL RISK MANAGEMENT

The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the

return to stakeholders through the optimisation of the debt and equity balance.

Financial and capital management involves ensuring that the Group income, expenses and balance sheet are managed in such a way as

to maximise returns to investors. This includes:

• Ensuring that cash flows from dividends and other income are utilised as they come available. This may be by way of capital

expenditure for expansion of the business, or simply by debt repayments or by ensuring that cash balances are earning competitive

interest rates.

• Ensuring that borrowings are used prudently, minimising interest costs, while at the same time making appropriate decisions about

the trade-off between the cost of borrowing and the potential return from investment opportunities.

The capital structure of the Group consists of debt, which includes the borrowings disclosed in note 16, cash and cash equivalents and

equity attributable to equity holders of the Parent, comprising issued capital, retained earnings and reserves.

Some of the Group’s subsidiaries are subject to externally imposed bank covenants as part of their secured bank loan facilities as

disclosed in note 16. There have been no breaches of the bank covenants during the year.

(B) SIGNIFICANT ACCOUNTING POLICIES

Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement

and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity

instrument are disclosed in Note 1 Significant Accounting Policies.


47

Rangatira Group


NOTE 27 FINANCIAL INSTRUMENTS CONTINUED

(C) FOREIGN CURRENCY RISK MANAGEMENT

The Group’s risk mangement practices remain consistent with the prior year. The Group undertakes certain transactions denominated

in foreign currencies, hence exposures to exchange rate fluctuations arise. Exchange rate exposures are managed within approved

policy parameters utilising forward foreign exchange contracts.

The carrying amount of the Group’s foreign currency denominated monetary assets and monetary liabilities at the reporting date is as

follows:Group

2015 $000

Group 2014

$000

Assets

AUD 14,715 21,246

GBP 9,415 9,133

HKD 2,046 2,776

USD 2,776 2,372

Liabilities

USD 2 2

(D) FORWARD FOREIGN EXCHANGE CONTRACTS

It is the policy of the Group to enter into forward foreign exchange contracts to cover specific foreign currency payments and receipts

within 50% to 100% of the exposure generated. The Group also enters into forward foreign exchange contracts to manage the risk

associated with anticipated sales and purchase transactions out to 6 months within 40% to 50% of the exposure generated.

The Group has no forward foreign exchange contracts.


48

(E) CATEGORIES OF FINANCIAL INSTRUMENTS

2014


$000

Available for sale assets

$000

Designated at fair value

$000

Financial assets and

liabilities at amortised cost

$000

Investments at cost

$000

Investments accounted

for using the equity method

$000Total $000

Assets

Cash and cash equivalents 29,542 - - - - - 29,542

Trade and other receivables 3,076 - - - - - 3,076

Other financial assets 16,449 44,739 3,861 - 25,267 8,598 98,914

Total financial assets 49,067 44,739 3,861 - 25,267 8,598 131,532

Non-financial assets 32,641

Total assets 49,067 44,739 3,861 - 25,267 8,598 164,173

Liabilities

Trade and other payables - - - 3,483 - - 3,483

Borrowings and other financial liabilities

- - - 3,673 - - 3,673

Total financial liabilities - - - 7,156 - - 7,156

Total non-financial liabilities 3,211

Total liabilities - - - 7,156 - - 10,367

2015


$000

Available for sale assets

$000

Designated at fair value

$000

Financial assets and

liabilities at amortised cost

$000

Investments at cost

$000

Investments accounted

for using the equity method

$000Total $000

Assets

Cash and cash equivalents 29,428 - - - - - 29,428

Trade and other receivables 2,827 - - - - - 2,827

Other financial assets 19,110 40,002 2,438 - 30,276 7,695 99,521

Total financial assets 51,366 40,002 2,438 - 30,276 7,695 131,777

Non-financial assets 35,091

Total assets 51,366 40,002 2,438 - 30,276 7,695 166,868

Liabilities

Trade and other payables - - - 3,845 - - 3,845

Borrowings and other financial liabilities

- - - 3,663 - - 3,663

Total financial liabilities - - - 7,508 - - 7,508

Total non-financial liabilities 3,585

Total liabilities - - - 7,508 - - 11,093

Rangatira Group




49

Rangatira Group



(F) INTEREST RATE RISK

The Group has long term variable rate borrowings, which are used to fund ongoing activities. Management monitors the level of

interest rates on an ongoing basis, and from time to time, will lock in fixed rates. The notional principal or contract amounts of the

Group’s long term variable rate borrowings at balance date were $2,350,000 (2014: $2,350,000).

(G) CREDIT RISK AND CONCENTRATIONS OF CREDIT RISK

The Group incurs credit risk from trade debtors and transactions with financial institutions. The risk associated with trade debtors is

managed with a credit policy which includes performing credit evaluations on customers. The risk associated with financial institutions

is managed by placing cash and short-term investments with registered New Zealand banks. The Group is not exposed to any other

concentrations of credit risk other than loans to associates disclosed in note 9 and to trade receivables as disclosed in note 7.

(H) LISTED EQUITY PRICE RISK AND OTHER PRICE RISK SENSITIVITY ANALYSIS

The Group is exposed to listed equity price risks arising from listed equity investments. The available for sale listed equity investments

are held for strategic rather than trading purposes. The Group does not actively trade these investments.

The sensitivity analysis has been determined based on the exposure to listed equity price risks at the reporting date. At reporting date,

if the market price of equity investments had been 1% higher/lower at balance date while all other variables were held constant, the

available for sale investments’ reserve would have increased/decreased by $393,000 (2014: $447,000) for the Group.


50

Rangatira Group



(I) FAIR VALUE OF FINANCIAL INSTRUMENTS

The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value,

grouped into Levels 1 to 3 based on the degree to which the fair value is observable.

Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or

liabilies.

Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for

the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 fair value measurements are those derived from valuation techniques that includes inputs for the asset or liability that are not

based on observable market data (unobservable inputs).

There were no transfers between Levels 1, 2 and 3 of the fair value hierarchy during the year ended 31 March 2015 (2014: None).

2014Level 1

$000Level 2

$000Level 3

$000Total $000

Financial assets at fair value through profit and loss

Shares 3,861 - - 3,861


Shares 41,627 3,112 - 44,739

Total financial assets 45,488 3,112 - 48,600

2014Level 1

$000Level 2

$000Level 3

$000Total $000

Financial assets at fair value through profit and loss

Shares 2,438 - - 2,438


Shares 36,021 3,981 - 40,002

Total financial assets 38,459 3,981 - 42,440


51

(J) LIQUIDITY RISK MANAGEMENT

The following tables detail the Group’s expected maturity for its non-derivative financial assets and liabilities. The tables below have

been drawn up based on the undiscounted contractual maturities of the financial assets and liabilities including interest that will be

earned or paid on those assets and liabilities except where the Group anticipates that the cash flow will occur in a different period. .

Group financial liabilities

Weighted average

effective interest

rate %

Less than 1 month

$0001-3 months

$000

3 months to 1 year $000

1-5 years $000

5+ years $000

Total $000

2014

Non-interest bearing 0.00% 1,815 2,173 - 977 - 4,965

Variable interest rate instruments 5.59% 33 66 98 2,613 - 2,810

Fixed interest rate instruments 5.49% - 12 - - - 12

Total financial liabilities 1,848 2,251 98 3,590 - 7,787

2015

Non-interest bearing 0.00% 4,029 152 - 977 - 5,158

Variable interest rate instruments 6.15% - - - 2,639 - 2,639

Total financial liabilities 4,029 152 - 3,616 - 7,797

Group financial assets

Weighted average

effective interest

rate %

Less than 1 month

$0001-3 months

$000

3 months to 1 year $000

1-5 years $000

5+ years $000

Total $000

2014

Non-interest bearing 0.00% 3,971 850 - - - 4,821

Share investments 0.00% 5,574 - - - 76,891 82,465

Variable interest rate instruments 7.86% 43,981 - - - - 43,981

Fixed interest rate instruments 2.75% 552 - - - - 552

Total financial assets 54,078 850 - - 76,891 131,819

2015

Non-interest bearing 0.00% 12,898 622 - - - 13,520

Share investments 0.00% 4,745 - - - 67,037 71,782

Variable interest rate instruments 6.87% 46,034 - - - - 46,034

Fixed interest rate instruments 0.00% 703 - - - - 703

Total financial assets 64,380 622 - - 67,037 132,039

Rangatira Group




52

Rangatira Group


NOTE 28 CASHFLOW RECONCILIATION Group 2015

$000

Group 2014

$000


Add/(less) non-cash items:

Share of retained profit for the year

from associate companies 392 919

Impairment of intangible assets - 1,000

Depreciation 2,347 2,056

Increase/(decrease) in deferred tax 62 (117)

Gain on revaluation of financial assets at fair value through profit or loss

(322) (64)

2,479 3,794

Add/(Less) Movements in other working capital items:

Change in trade receivables 250 (72)

Change in inventories (117) 113

Change in tax receivable 116 144

Change in other current assets (148) (88)

Change in trade payables 50 (782)

Change in current tax payable 312 (32)

Change in provisions 159 206

622 (511)

Less items classified as investing activities:

Net (gain) on sale of investments (4,965) (33,165)

Net loss on sale of fixed assets 88 -

(4,877) (33,165)

Net cash inflows from operating activities 12,948 10,289

NOTE 29 SUBSEQUENT EVENTS

Rangatira Limited has agreed to pay a dividend of 27 cps on 29 June 2015.


53

INDEPENDENT AUDITOR’S REPORT TO THE SHAREHOLDERS OF RANGATIRA LIMITED GROUP

Report on the Consolidated Financial StatementsWe have audited the accompanying consolidated financial

statements of the Rangatira Limited Group (‘the Group’) on

pages 14 to 52, which comprise the consolidated statement

of financial position as at 31 March 2015, and the consolidated

income statement, consolidated statement of comprehensive

income, consolidated statement of changes in equity and

consolidated statement of cash flows for the year then ended,

and a summary of significant accounting policies and other

explanatory information.

This report is made solely to the company’s shareholders, as a

body. Our audit has been undertaken so that we might state to

the company’s shareholders those matters we are required to

state to them in an auditor’s report and for no other purpose.

To the fullest extent permitted by law, we do not accept or

assume responsibility to anyone other than the company’s

shareholders as a body, for our audit work, for this report, or for

the opinions we have formed.

Board of Directors’ Responsibility for the Consolidated Financial StatementsThe Board of Directors are responsible for the preparation and

fair presentation of these consolidated financial statements,

in accordance with New Zealand Equivalents to International

Financial Reporting Standards, International Financial

Reporting Standards and generally accepted accounting

practice in New Zealand, and for such internal control as the

Board of Directors determine is necessary to enable the

preparation of consolidated financial statements that are free

from material misstatement, whether due to fraud or error.

Auditor’s ResponsibilitiesOur responsibility is to express an opinion on these

consolidated financial statements based on our audit.

We conducted our audit in accordance with International

Standards on Auditing and International Standards on Auditing

(New Zealand). Those standards require that we comply with

ethical requirements and plan and perform the audit to obtain

reasonable assurance about whether the consolidated financial

statements are free from material misstatement.

An audit involves performing procedures to obtain audit

evidence about the amounts and disclosures in the

consolidated financial statements. The procedures selected

depend on the auditor’s judgement, including the assessment

of the risks of material misstatement of the consolidated

financial statements, whether due to fraud or error. In making

those risk assessments, the auditor considers internal control

relevant to the entity’s preparation and fair presentation of

the consolidated financial statements in order to design audit

procedures that are appropriate in the circumstances, but not

for the purpose of expressing an opinion on the effectiveness

of the entity’s internal control. An audit also includes evaluating

the appropriateness of the accounting policies used and the

reasonableness of accounting estimates, as well as the overall

presentation of the consolidated financial statements.


This audit report relates to the consolidated fi nancial statements of Rangatira Limited Group for the year ended 31 March 2015 included on Rangatira

Limited’s website. The Board is responsible for the maintenance and integrity of Rangatira Limited’s website. We have not been engaged to report

on the integrity of the Rangatira Limited’s website. We accept no responsibility for any changes that may have occurred to the consolidated fi nancial

statements since they were initially presented on the website. The audit report refers only to the consolidated fi nancial statements named above. It

does not provide an opinion on any other information which may have been hyperlinked to/from these consolidated fi nancial statements. If readers

of this report are concerned with the inherent risks arising from electronic data communication they should refer to the published hard copy of the

audited consolidated fi nancial statements and related audit report dated 31 March 2015 to confi rm the information included in the audited consolidated

fi nancial statements presented on this website. Legislation in New Zealand governing the preparation and dissemination of fi nancial statements may

diff er from legislation in other jurisdictions.

54

We believe that the audit evidence we have obtained is

sufficient and appropriate to provide a basis for our audit

opinion.

Other than in our capacity as auditor and the provision of

taxation advice, we have no relationship with or interests in the

Group. These services have not impaired our independence as

auditor of the Group.

OpinionIn our opinion, the consolidated financial statements on pages

14 to 52 present fairly, in all material respects, the financial

position of the Rangatira Limited Group and its subsidiaries

as at 31 March 2015, and their financial performance and cash

flows for the year then ended in accordance with New Zealand

Equivalents to International Financial Reporting Standards,

International Financial Reporting Standards and generally

accepted accounting practice in New Zealand.

Chartered Accountants

8 June 2015

Wellington

New Zealand


55

DIVIDENDSThe Directors have declared a fully imputed final dividend of 27

cents per share to be paid on 29 June 2015. An interim dividend

of 20 cents per share was paid in December 2014. This makes a

total of 47 cents per share for the year, fully imputed.

CONSOLIDATIONThe results incorporate all trading subsidiaries and associates.

DIRECTORSIn accordance with the provisions of the Company’s

constitution Messrs Calavrias and Gillanders retire by rotation

and being eligible offer themselves for re-election.

REMUNERATION OF DIRECTORSRangatira Directors

Directors of Rangatira Limited were paid fees as Directors of

Rangatira Limited and subsidiaries during the year as follows:

N Calavrias $61,124

D K Gibson $74,524

W L Gillanders $74,350

S Haslem $68,374

I S Knowles $49,624

D A Pilkington $84,624

R A Wilks $74,624

REMUNERATION OF EMPLOYEESThe number of employees of Rangatira and its subsidiaries,

including executive directors of subsidiaries, whose income

during the year was in the specified bands, are as follows:

$100,000 - $110,000 1

$110,001 - $120,000 2

$120,001 - $130,000 2

$140,001 - $150,000 1

$150,001 - $160,000 1

$160,001 - $170,000 2

$180,001 - $190,000 1

$220,001 - $230,000 1

$250,001 - $260,000 1

$290,001 - $300,000 2

$310,001 - $320,000 1

$390,000 - $400,000 1

TRANSACTIONS WITH THE COMPANYNo Director has entered into any transaction with the Company

other than in the normal course of business.

USE OF COMPANY INFORMATIONDuring the year, the Board received no notices from Directors

of the Company requesting to use Company information

received in their capacity as directors that would not otherwise

have been available to them.

AUDITORThe Company’s Auditor through the year was Deloitte.

On behalf of the Board;

D A Pilkington

Chair

Wellington

18 June 2015


56

RANGATIRA LIMITED (RANGATIRA) ANNUAL REPORT DISCLOSURES UNDER THE TAKEOVERS CODE (RANGATIRA LIMITED) EXEMPTION NOTICE (NO 2) 2014

BACKGROUNDAt the annual general meeting of Rangatira held on 4 August 2014, the shareholders of Rangatira approved the acquisition by Rangatira

of up to an aggregate of 600,000 A shares and 600,000 B shares from shareholders during the period from 4 August 2014 to 4 August

2017 (Buyback), on the terms and conditions more fully explained in the explanatory notes accompanying the notice of that meeting.

The Takeovers Panel granted to Rangatira an exemption from the Takeovers Code so that the Code Shareholders (listed in the

Appendix) are exempted from rule 6(1) of the Takeovers Code in respect of any increased percentage of voting rights held or controlled

by any of them as a result of the Buyback. The disclosures below are required by the Takeovers Code (Rangatira Limited) Exemption

Notice (No 2) 2014 (Exemption Notice).

A summary of the terms of the Buyback, as approved at

the AGM on 4 August 2014

Disclosure requirements Disclosure

Rangatira intends to make one or more offers (Offer) to

shareholders of Rangatira to acquire up to an aggregate

of:

• 600,000 A shares in Rangatira; and

• 600,000 B shares in Rangatira,

on the following terms:

• the consideration for each Share will be determined by

the board from time to time, however will not exceed

80% of the assessed asset backing value of each Share

as set out in the last public statement of that assessed

asset backing value made by Rangatira prior to the

Offer; and

• the Offer(s) will be made between 4 August 2014 and 4

August 2017, however Rangatira will not be obliged to

make Offers and may cease doing so at any time.

Rangatira will pay the price for each share acquired under

the Buyback within five business days after the date of

each acquisition.

The Shares acquired by Rangatira will be held as treasury

shares until the Shares acquired equal 5% of the number

of shares of the same class previously in issue.

a


57

A statement, as at the end of the financial year to which

the report relates, of:

i the number of voting securities on issue acquired

under the Buyback;

ii the number of voting securities on issue that are

held or controlled by the Code Shareholders, and the

percentage of all voting securities on issue that that

number represents;

iii the percentage of all voting securities on issue that

are held or controlled, in aggregate, by the Code

Shareholders and the Code Shareholders’ associates;

iv the maximum percentage of all voting securities on

issue that could be held or controlled by the Code

Shareholders if Rangatira acquires the approved

maximum number of voting securities;

v the maximum percentage of all voting securities on

issue that would be held or controlled, in aggregate,

by the Code Shareholders and the Code Shareholders’

associates if Rangatira acquires the approved

maximum number of voting securities;

vi in relation to each of the matters referred to in

paragraphs (i) to (v), any change, since the notice of

meeting containing the resolution to approve the

Buyback or the last annual report, as the case may be,

to:

(A) the Code Shareholder under clauses 6 to 8 of the

Exemption Notice; and

(B) the number, percentage, or maximum percentage,

as the case may be, of voting securities held or

controlled as a result of that change of the Code

Shareholder.


No securities were acquired in the year ending 31 March

2015.

2,338,617 A Shares being 37.93% of the total A Shares on

issue.

37.93% of the total A shares on issue.

42.02%, as further detailed in the Appendix.

42.02%

There have been no relevant changes since the date of the

resolution approving the Buyback

b


58

The assumptions on which the particulars referred to in paragraph (b) are based.


The information in this table assumes that:

• the number of voting securities in Rangatira is the

number of voting securities on issue at the end of

Rangatira’s 31 March 2015 financial year (calculation

date);

• there is no change in the total number of voting

securities on issue between the calculation date and the

end of the Buyback period, other than as a result of the

Buyback;

• the Code Shareholders do not participate in the

Buyback; and

• Rangatira acquires the approved maximum number of

its own voting securities.

c


5959

APPENDIXCODE SHAREHOLDERSShareholder The maximum percentage of all voting securities on

issue that could be held or controlled by the Code Shareholder if Rangatira acquires the approved

maximum number of voting securities

Gibson Family

Anna Elizabeth Gibson 0.99%

Douglas Keith Gibson 1.14%

Douglas Keith Gibson, Robyn May Gibson and William Duncan Macdonald (as trustees of a family trust)

0.48%

Nicola Kate Gibson 0.99%

Robyn May Gibson 7.06%

Robyn May Gibson, Douglas Keith Gibson and Ian Gary MacKegg (as trustees of a family trust)

1.80%

Sarah Louise McLennan 0.99%

McKenzie family

Ruth Anne McKenzie 6.37%

Christopher McKenzie 1.86%

David McKenzie 1.84%

John Allan McKenzie and Jennifer Mary McKenzie (as trustees of a family trust)

1.03%

John Allan McKenzie, Jennifer Mary McKenzie and Alberta Louise Helen McKenzie

1.03%

Aubrey Meredith Bloomfield 1.03%

Sibyl Ella May Bloomfield 1.03%

Others

Christopher McKenzie and Sarah Louise McLennan (as trustees of the JR McKenzie Trust)

7.23%

Christopher McKenzie and Sarah Louise McLennan (as trustees of the JR McKenzie Trust)

1.80%

Nga Manu Trust (a charitable trust registered under the Charitable Trusts Act 1957)

5.35%

Total 42.02%


DIRECTORY

BOARDD A Pilkington Chair

D K Gibson Deputy Chair

N Calavrias ONZM

W L Gillanders

S Haslem

I S Knowles

R A Wilks

EXECUTIVEP J Veal Chief Executive

C J Bradshaw Chief Financial Officer

COMPANYLevel 10, Solnet House

70 The Terrace

Wellington

New Zealand

PO Box 804

p: +64 4 472 0251

f: +64 4 473 2685

e: [email protected]

www.rangatira.co.nz

REGISTRARCOMPUTER INVESTOR SERVICES LIMITED

Private Bag 92119

Victoria Street West

Auckland 1142

p: +64 9 488 8777


www.computershare.co.nz

AUDITORDELOITTE

Levels 11, 10 Brandon Street

PO Box 1990

Wellington 6140

New Zealand

p: +64 4 470 3500


www.deloitte.co.nz

SHARE TRADING AND PRICE INFORMATIONEFFICIENT MARKET SERVICES LIMITED

PO Box 3156,

Wellington 6140,

New Zealand

p: 0508 865 478


www.unlisted.co.nz

60


6161

In 2014 the Trust’s support for Māori development over

recent years was recognised when it became the first New

Zealand recipient of the prestigious International Funders

for indigenous Peoples Award. Deputy Chair Manaia King was

presented with the award at the IFIP conference in New York.

This year the Trust was in funding relationships with over 50

organisations, involving grants totalling over $6 million. This

included 23 new grants, totalling approximately $3 million,

committed during the year. Many of these extend over several

years.

This was all in support of supporting our vision of a socially

just and inclusive Aotearoa New Zealand. The Trust wants

to contribute to longer term change – this means building a

society where fewer people are in dire straits, and where there

is less need for health and social services over time.

The Board has committed to two principal areas of focus:

Disadvantaged children and their familiesChildren are disproportionately affected by poverty and

disadvantage. Acting early with children who have a high chance

of not doing well, and their caregivers, is more effective than

leaving things to later.

As we know, education can help families achieve a better

life. The Trust’s Connecting Education and Communities

programme seeks to make a contribution to this by increasing

the engagement of parents and families in their children’s

formal and informal learning, and building effective teamwork

between parents and teachers.

The Trust is also a proud partner alongside the Office of the

Children’s Commissioner and Otago University in producing

Child Poverty Monitor, an annual snapshot of how we are doing

as a country in giving our children the best start in life:

www.childpoverty.co.nz

Māori DevelopmentMāori are the first people of our nation, and an increasing

proportion of the population. Many health and social indicators

show that Māori trail non-Māori. While the disparities have

closed in some areas, there is still much to do. Successful Māori

development is a gain for all New Zealanders.

The Trust’s Te Kāwai Toro Committee leads the Trust’s work in

this area, and seeks opportunities to contribute proactively to

Māori development.

Each year we also make a grant to the J R McKenzie Youth

Education Fund, which makes small grants to families in

adverse situations for children’s education-related costs. The

Fund, which holds its own Rangatira shares as well, is entirely

operated by Rotary volunteers.

The Deaf Development Fund makes grants and scholarships in

support of the deaf community. In the year to March 2014 the

Fund committee made 33 grants and scholarships supporting

the Deaf community, and also allocated 9 further awards from

the Penny Went family NZSL Fund, to a total value in excess of

$92,000.

The Trust is also a partner in the Working Together More

Fund. This is a collaboration of six funding organisations; as

its name suggests, it makes grants to groups of community

organisations, to help them explore and create ways of working

together better – for example sharing facilities, aligning client

management systems, even merging.

The Trust has recently become the first New Zealand

philanthropic organisation to become accredited as a Living

Wage employer. We see this as another strategy to improve the

life chances of low income families.

We very much appreciate the diligence and wisdom of

Rangatira Ltd’s directors and staff, and their contribution to

sustaining the McKenzie legacy of generosity. We are also

grateful for the active support of the Rotary movement, whose

members assist with publicising the Trust and assessing grant

applications; and the thousands of people in our community

who strive to make life better for New Zealanders facing

hardship, adversity and social exclusion.

JR MCKENZIE TRUSTESTABLISHED IN 1940


62

The Trust celebrates its 75th anniversary in 2015. The language

we use today is different from that of our founder, and our

processes have evolved; yet we are dealing with issues in some

ways quite similar to those faced by the less well-off and less

fortunate in our society in the 1940s. It is often argued that

social issues today are more complex. Certainly society is more

diverse, but the core challenges of fostering a caring, inclusive

society, and ensuring all people are able to access a fair share

of resources to flourish, still confront us today. We salute the

generosity and vision of Sir John McKenzie, his son Sir Roy, and

the wider McKenzie family.

J R MCKENZIE TRUSTEES ARE:Patrick Cummings – Chair

Lyn Holmes

Eric Keys

Manaia King

Paula King

Christopher McKenzie

Charisma Rangipuna

Joan Smith

Liz Tanielu

David Vance

Puawai Wereta

Charles Wilson

Jonathan Usher

For more information about the J R McKenzie Trust and the

groups it supports, visit the Trust’s website:

www.jrmckenzie.org.nz

or contact:

Iain Hines or Alison Glen

PO Box 10 006

Wellington 6143

p: (04) 472 8876


“ITI NOA ANA, HE PITO MATA- WITH CARE, A SMALL KUMARA WILL PRODUCE A HARVEST.”


65


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