NKII 32050 cover - Ngati Kahungunu Iwi Incorporated

FOR THE YEAR ENDED 30 JUNE 20031 STATEMENT OF ACCOUNTING POLICIESEntityNgāti Kahungunu Iwi Incorporated (the society) is an incorporated society established in 1988 under theIncorporated Societies Act 1908.Ngāti Kahungunu Iwi Incorporated has several subsidiary companies.The reporting entity comprises the society and consolidated group of the society and its subsidiaries.Measurement BaseThe accounting principles recognised as appropriate for the measurement and reporting of earnings andfinancial position on an historical cost basis are followed.Differential ReportingThe society qualifies for differential reporting as the business is not publicly accountable and is not large insize.The society has taken advantage of all available differential reporting exemptions.Specific Accounting PoliciesThe following specific accounting policies which materially affect the measurement of financial performanceand financial position have been applied:Operating Revenue - represents revenue earned from the sale of the society's products and services,net of any credits allowed. Revenue from the Tangaroa joint venture is proportionately accrued on thebasis of estimated profits for the season to 30 September.Fixed Assets - Property, vehicles and plant are stated at cost less accumulated depreciation.Depreciation - has been calculated using rates permitted by the Income Tax Act 1994.Vehicles20-32% DVBuildings2% SLComputer Equipment and Plant 10-50% DVInvestments and advances are recorded at cost or estimated net realisable value if there has been apermanent diminution in value.Income Tax - The society is not subject to taxation as it has attained charitable status for income taxpurposes.Consolidation - The purchase method of consollidation has been applied in preparing the consolidatedfinancial statements. All inter entity transactions and balances have been eliminated on consolidation.Comparative Figures - The current year financial statements report operating accounts by significantactivity. This is a change on the prior year disclosure which reported by expenditure type. This changehas necessitated some reclassification of prior year comparatives in the statement of financial performance.Changes in Accounting PoliciesThere have been no changes in the accounting policies during the year. All policies have been consistentlyapplied.2 CONTINGENT LIABILITIESThe society is guarantor of a Housing Corporation of New Zealand loan drawn down to $116,188. The societyhas also entered into a loan agreement with Housing Corporation of New Zealand for a further $2,200,000in respect of the Tu Kahu housing project (this is not drawn down). The society is currently negotiating tohave this agreement restructured.A portion of the wetfish income from the past two years is subject to dispute. The society has won initial courthearings but the matter is being appealed. If the claimants are successful a portion of these funds wouldbecome payable. The board considers the possibility remote.3 CONTINGENT ASSETSAt balance date there was an unsettled dispute regarding crayfish quota allocation to tribes. Te Ohu KaiMoana (TOKM) is holding back funds until the dispute has been resolved. No recognition has been madein the financial statements of these assets as there is still ongoing uncertainty as to the method of distributionof these assets and the ultimate beneficiaries.4 SECURITIES AND GUARANTEESBank borrowings are secured by a registered first mortgage over the property.5 CAPITAL COMMITMENTSThere are no commitments for capital expenditure at balance date.Inventory and Work in Progress - Construction work in progress and assorted inventories are valuedat the lower of cost and net realisable value.Sundry Debtors - Accounts receivable are stated at their estimated net realisable value. Bad debtsare written off during the year as they are identified, with appropriate provision being made at balancedate for any doubtful debts.Advances and Provisions - Loan advances are recorded net of any specific provision for doubtfulamounts. There are no general provisions for doubtful debts. Loans considered non recoverable arewritten off.These financial statements must be read in conjunction with the accompanying Notes.These financial statements must be read in conjunction with the accompanying Notes.Page 8Page 9