The

Growing
Fund

INFORMATION MEMORANDUM FOR AN OFFER

OF SHARES IN KAKARIKI FUND LIMITED
27 May 2019
FUND DIRECTORY
Issuer:
The Kakariki Fund
c/- MyFarm
PO Box 91
Feilding 4740
Promoter:
AgInvest Trading Limited
A subsidiaryof AgInvest
Holdings Limited
PO Box 91 Feilding
Phone: 0800 693 276
Legal:
Sharp Tudhope Lawyers
Private Bag TG12020
Tauranga 3143
Phone: 07 578 2149
Auditor:
KPMG
PO Box 929
Tauranga 3143
Phone: 07 858 6500

WARNING

The law normally requires people who offer financial products to give information to investors
before they invest. This requires those offering financial products to have disclosed information
that is important for investors to make an informed decision. The usual rules do not apply to this
offer if you are a person who comes within Schedule 1, clause 3(2)(a)-(c) or 3(3)(a)-(b)(ii) (inclusive)
of the Financial Markets Conduct Act 2013. This includes where the amount invested upfront by
the investor (plus any other investments the Investor has already made in the financial products)
is $750,000 or more.
If you fall within Schedule 1, Clause 3 of the FMCA, as a result of this exclusion, you may not receive
a complete and balanced set of information. You will also have fewer other legal protections for
this investment. Investments of this kind are not suitable for retail investors. Ask questions, read
all documents carefully, and seek independent financial advice before committing yourself.

DISCLAIMER AND DECLARATION
OF INTEREST
This Information Memorandum has been
prepared solely for the purpose of providing
information to a prospective investor in Kakariki
Fund Limited (Kakariki). Neither Kakariki,
MyFarm nor any of their respective directors,
officers, advisers, agents, related companies
or employees guarantees the performance of
Kakariki or guarantees any return on investment.
THE FMCA GOVERNS THE OFFER OF FINANCIAL
PRODUCTS MADE IN THIS INFORMATION
MEMORANDUM.
INVESTMENTS IN KAKARIKI ARE ONLY OPEN TO
INVESTORS THAT FALL WITHIN THE EXCLUSIONS
APPLICABLE TO OFFERS MADE TO WHOLESALE
INVESTORS AS SET OUT IN SCHEDULE 1,
CLAUSES 3(2)(A) – (C) AND 3(3) (A) - (B)(II)
(INCLUSIVE) OF THE FMCA.
This Information Memorandum has been
prepared from information provided by various
parties. Neither Kakariki, MyFarm, nor any of
their respective directors, officers, advisers,
agents, related companies and employees
makes any representation or warranty, express
or implied, nor accepts any responsibility for the
accuracy or completeness of any information
or analysis contained in this Information
Memorandum, or that any of this information will
remain unchanged after the distribution of this
Information Memorandum or in any document
distributed with this Information Memorandum.
Neither Kakariki, MyFarm nor any of their
respective directors, officers, advisers, agents,
related companies or employees, makes
• any representation or warranty in relation to
the Shares in Kakariki; or
• any recommendation on the suitability of
acquisition by, or an investment in, Kakariki
Recipients of this Information Memorandum
should satisfy themselves that they have
obtained all the information, taken appropriate
advice, and investigated what they may deem
necessary to satisfy themselves of the accuracy
of the information herein.
The Offer is not a regulated offer under the
FMCA. This Information Memorandum is
therefore not a product disclosure statement
(PDS) under the FMCA. It does not contain all the
information that would be in a PDS.
KAKARIKI INFORMATION MEMORANDUM
This Information Memorandum does not contain
all the information required to make an informed
decision about the Offer. It does not constitute,
and is not a substitute for, financial, legal, tax,
accounting or other professional advice. It does
not take into account the investment objectives,
financial or taxation situation or particular needs
or circumstances of any prospective investor.
Any forward-looking statements in this
Information Memorandum (such as indications
of future earnings and financial performance)
are based on assumptions about future events
which may or may not be correct. They are
subject to risks and uncertainties. Actual
results and conditions may differ materially.
No forward-looking statements will be updated.
NO LIABILITY
To the extent permitted by law, each of Kakariki,
MyFarm and their respective directors, officers,
advisers, agents, related companies and
employees disclaim all liability in relation to the
matters referred to above and no party may take
legal action against Kakariki, MyFarm (or their
respective directors, officers, advisers, agents,
related companies and employees) for any loss
or damages suffered as a result of the party’s
decision to invest in Kakariki or in relation to any
acquisition made by the investor, whenever made.
BENEFIT OF DISCLAIMER
This provision is intended to confer a benefit on
each of Kakariki, MyFarm and their respective
directors, officers, advisers, agents, related
companies and employees, and may be enforced
by those persons pursuant to subpart 1 of part 2
of the Contract and Commercial Law Act 2017.
DECLARATION OF INTEREST
MyFarm is the promoter of the Offer. MyFarm
specialises in rural investment. Upon creation of
Kakariki, one of the directors of MyFarm will, on a
trustee basis, act as the initial shareholder (holding
one Share) until the new investors take up this
role. The directors of MyFarm are Andrew Watters
and Grant Rowan.
John Loughlin is a director of Kakariki and both
Hop Revolution Limited and Rockit Global
Limited, two entities with which Kakariki expects
to do business.
Paul Richardson is a director of both Kakariki
and AgInvest Holdings Limited, the parent
company of MyFarm.
1
KAKARIKI FUND INFORMATION MEMORANDUM

The Red Crowned Kakariki is a once-endangered New Zealand

native parrot that has become a symbol of Kakariki Fund’s belief in
sustainable agriculture and the protection of natural habitats.

2
 WHY INVEST IN
KAKARIKI?
In the last five years, permanent crops
have emerged as a star performer in
the New Zealand economy.
Based on the export of high value, high
quality, branded products to predominantly
Asia, orchard gate returns for a range of
crops have increased spectacularly even
as crop volumes have increased. Growers
of many permanent crops have been
receiving returns well into double figures.
These include growers of long established
large volume crops like kiwifruit, apples and
avocados, and emerging and potential stars
such as Rockit™ apples, sweet cherries,
plantation manuka and aroma hops.
This combination of rising volumes and
rising prices in recent years, underscores
the seemingly untapped demand for
high-end fresh food and beverage
products derived from permanent
crops grown in New Zealand.
Investor participation in this growth is
another matter. The supply of most crops
is tightly controlled by intellectual property
protections such as licences and or access
to plant varieties that are protected by
intellectual property rights making them
hard to access. The large scale requirement
for capital also provides a barrier to entry
for most investors. Further, growing things
is highly specialised, hands-on and
inherently risky.
Kakariki has been set up to overcome or
mitigate these obstacles. For as little as
$100,000, wholesale investors can passively
participate in growing a diverse range of
sustainably produced crops on large-scale
and professionally managed properties,
with the prospect of double-digit returns.
Kakariki aspires to be environmentally
responsible and will adopt policies and
practices that aim to achieve carbon
neutrality, make good use of water and
protect water quality.
“An investment in Kakariki
provides exposure to the
expected returns from producing
a range of permanent food and
beverage crops grown in a range
of locations, with a range of
different harvest times.”
3
1. TABLE OF
CONTENTS
2. Letter from the Chair 6
3. Letter from the Manager 10
4. Key Information Summary 12
5. Key Dates and Offer Process 19
6. What Kakariki Invests In 61
7. Terms of the Offer 62
8. How Kakariki Works 63
9. Selected Financial Information 74
10. Risks and Reurns from Kakariki 78
11. What are the Fees? 85
12. How to Complain 86
Where can you find more
13. 87
information
14. How to apply 88
15. Glossary 98
16. Application Form 103
KAKARIKI INFORMATION MEMORANDUM

• vertically integrated supply channels

focused on delivering high quality products
to consumers and optimising returns to
growers, and;
• currently unsatisfied demand and potential
for growth
Importantly, most industries also have successful
2. Letter from plant breeding programmes and variety
protection that gives control over supply and

the Chair enables effective marketing.

Dear Investor,
This is an exciting and rewarding time for
New Zealanders to be involved in the production
and supply of high value permanent crops.
Through this offer by Kakariki you can become
part of things.
If the returns received by growers in recent years
are anything to go by, New Zealand has a very
effective permanent crop business model. There
are a number of characteristics common to the
industries that produce and supply permanent
crops with high orchard gate returns (OGR).
Specifically, these are:
• a focus on supplying out-of-season high
quality, high value fresh food products
to Asia, particularly China, and to a lesser
extent the USA, Europe and Australia;
• sophisticated production and post-harvest
operating systems;
In combination, these factors have resulted
in price premiums that growers from other
countries can only aspire to and have seen
OGR and profit levels increase to
unprecedented levels.
Recent EBITDA earnings (earnings before
interest, tax and depreciation) for the permanent
crops in which Kakariki intends to invest are
shown in table 1.
The Offer
Kakariki is seeking to raise $100 million plus $100
million of oversubscriptions in this offer (Offer),
to enable wholesale investors to invest in the
production and supply of a range of currently
high value permanent crops.
The Maori name Kakariki means green or green
parakeet and reflects our aim of investing
and operating in a sustainable and socially
responsible manner. Consistent with the Maori
concept of Kaitiakitanga, Kakariki aims to make
good use of water, protect water quality, and to
be carbon neutral.

Table 1: Typicial EBITDA ranges for mature well managed crops ( $/cha*)
EBITDA $/cha Capital Invested EBITDA %
Low High $/cha Low High

Hops   18,000 50,000            250,000 7% 20%

Cherries   40,000 100,000            250,000 16% 40%

Avocados   20,000 45,000            300,000 7% 15%

G3 Kiwifruit   80,000 100,000          1,000,000 8% 10%

Plantation Manuka   600 850                6,300 10% 13%

Conventional Apples   15,000   26,000            175,000 9% 15%

Rockit TM
Apples 90,000 161,000            360,000 25% 45%

Wine Grapes    10,800   26,600            235,000 5% 11%

* Calculated as OGR less orchard working expenses divided by capital invested. Capital investment is based on market price or the cost of
developing bare land. Ranges are based on usual fluctuations or a 10% change in OGR and yields around a mid-point determined using
current prices and yields in a normal year.

6

Investment Strategy
Kakariki’s medium-term goal is to provide
investors with high levels of annual distributions
from investments in the production and supply of
permanent crops. To achieve this goal the Kakariki
Board has adopted a two-staged approach.
Stage one: where investments are weighted
towards development, generating development
margins and establishing high quality ongoing
operations.
Stage two: where, in three years’ time as
developments start to come on stream, Kakariki
intends to start paying dividends and list on the
NZX in conjunction with a subsequent offer to
retail investors.
This two-staged approach is being taken because
well priced, good quality properties of any scale
are difficult to obtain. Development is seen as
a more cost-effective way of establishing a high
quality portfolio of high yielding assets.
Stage one is restricted to wholesale investors
because the envisaged development is
considered to be higher return/higher risk and
not suited to income seeking retail investors who
Kakariki will be looking to bring on to its register
in stage two.
Accordingly, this Offer by Kakariki is directed
at wholesale investors who are interested
in earning capital growth from development
margins as well as income, not just income alone.
Subject to the success of this Offer, Kakariki
will also have the resources and be in a good
position to purchase any established properties
that do come on to the market. The price of
shares in any subsequent offer are expected
to reflect any development margins generated
from Kakariki’s Initial Investments and the level
of operating profits that are being achieved.
Provided the Initial Investments perform as
expected, and the price of shares issued at
the time of listing reflects this performance,
it is expected that investors in this Offer will,
following listing, have the opportunity of
I. realising a development margin by offering
some or all of their shares on the NZX
secondary market, or;
II. retaining some or all of their shares and
receiving a higher return on their investment
than the retail investors who purchase their
shares at a higher price
KAKARIKI INFORMATION MEMORANDUM
In contrast it is expected that the retail investors
who invest in Stage two will be able to invest much
less than the $100,000 minimum in this Offer,
receive distributions on their investment from the
outset, and benefit from lower risk and a more
liquid investment.
Fund and Investment Property
Management
Kakariki has contracted the management
of Kakariki and the investment properties it
acquires to MyFarm.
MyFarm will source properties, undertake due
diligence and structure and make the investment
case to Kakariki’s Investment Committee for each
proposed investment.
Through MyFarm, Kakariki will also contract
with one of MyFarm’s established Operational
Partners for the lease or management of
the properties Kakariki acquires, and any
development work that is required.
These Operational Partners are shown in Table
3 and include well-known vertically integrated
businesses such as Freshmax, Comvita, Sacred
Hill, DMS, Hop Revolution and RockitTM Global.
MyFarm will also provide supervision, financial
control, administration and governance services
to both Kakariki and its investment properties.
Investment Highlights
• Income focused company, targeting
development margins and double-digit
annual distributions beyond the first
three years
• Offer is for 100 million partly paid shares
at an issue price of $1.00/share plus up
to $100 million of over-subscriptions
• Shares partly paid to $0.25/Share on
subscription, calls to be made in
multiple increments of $0.05/share
on 30 days’ notice
• Minimum investment $100,000
• Limited liability company structure.
Holding company plus subsidiary
Investment Companies that will own
the investment properties
• Kakariki is promoted and managed by
MyFarm, one of New Zealand’s most
experienced investors in, and managers
of, rural land-based assets
7
KAKARIKI FUND INFORMATION MEMORANDUM
• Gives impetus to the switch from
volume-to-value food production and
environmental sustainability
• Performance related management fees:
• Annual management fee of 1.25% of funds
under management (FUM) plus costs,
• Annual profit share of 20% of total returns
above a hurdle rate of 10% p.a.
• Four Initial Investments costing an estimated
$47.4 million have been conditionally
approved by Kakariki’s Investment Committee
• Initial Investments comprise two kiwifruit
orchards in the Eastern Bay of Plenty, the
development of 35 cha of Rockit™ apples,
2,000 cha of plantation manuka and a first
option to invest in 50% of the units in a
MyFarm Hop Syndicate being formed to
develop a 130 cha hops garden
Distributions from the Initial Investments are
expected to commence in year four, the financial
year (FY) ending 30 June 2023, FY23, and then
climb rapidly to double digits over the following
two years as shown in Table 2.
Table 2: Budgeted distributions based on Kakariki’s Initial
Investments.
FY20 FY21 FY22 FY23
Distributions/
0.0% 0.0% 0.0% 5.5%
Paid capital
 FY25 FY26  FY27  FY28
Distributions/
13.6% 15.9% 14.9% 13.0%
Paid capital
• If $100 million is raised in the Offer and all
the Initial Investments proceed, Kakariki
will be 37% invested. Investment of the
remaining 63% of capital raised in the Offer
will alter the above distribution profile
• The Kakariki Board intends to list on the
NZX in three years’ time in conjunction with a
subsequent offer to the public. Prior to this,
and depending on the investments it makes,
Kakariki may also raise additional money
from wholesale investors
8
Who can invest
The Offer is only open to wholesale investors,
namely:
• Investors who invest $750,000 or more on
acceptance of application, or;
• Eligible Investors who can certify they have
investing experience that enables them to
know their information needs and assess
the merits of offers and the adequacy of
information provided, or;
• Wholesale Investors who either have a
business based on investing or meet
prescribed income or asset criteria
In general terms, these income and asset criteria
require an investor to have a portfolio of specified
investments of at least $1.0 million or net assets
or annual income of more than $5 million.
There are also provisions for investors who have
transacted more than $1 million of investments in
the last two years (see Section 14 for more details
on qualifying investors).
Kakariki has a board of directors that has
significant experience in New Zealand primary
industries, funds management and company
governance.
The Kakariki Board is united in the view that the
FY24 opportunity for investing in permanent crops
9.4% has never been better. Returns from fresh food
and beverage ingredients over recent years
 FY29
have been very high; we have a proven manager
with a proven business model and Operational
13.0%
Partners; interest rates are low, and; investment
in permanent crops is capital constrained.
Kakariki is primarily for New Zealanders and I
invite you to consider making an investment.
Yours Sincerely
Julian Raine
Chair, Kakariki Limited
9
KAKARIKI FUND INFORMATION MEMORANDUM
3. Letter from
the Manager
Dear Investor,
Since October 2016, MyFarm has put together
15 new horticultural syndicates. Between them,
these syndicates have orchard assets of $165m,
and pre-tax distributions once all properties are
fully developed are forecast to average 15% p.a.
This forecast distribution rate reflects just how
profitable permanent crops have become
generally, and the wide range of returns reflects
the fact that each one of these syndicates has
its own particular structure, return profile and
production risks.
Each syndicate grows one type of crop only,
and return and risk differences relate to the
type of crop a syndicate is growing, the orchard
operating structure (leased or managed),
the investment cost of the syndicate orchard
and its stage of development, quality and
geographic location.
In contrast to MyFarm syndicate investments,
Kakariki aims to use diversification to achieve
a lower risk profile and, once established,
consistently pay double digit distributions on
contributed equity.
Conceptually, Kakariki is akin to a private equity
fund insofar as Kakariki Shareholders are
expected to receive high levels of returns based
on the hands-on expertise and resources of
MyFarm and its Operational Partners.
As the Manager of Kakariki, there are many ways
in which MyFarm’s expertise will help Kakariki
to meet its return objectives: we undertake and
stay abreast of market research on different
sectors and analyse the returns on a range
of different crops; we have the networks and
experience to source properties and structure
investments on attractive terms; we have the
supervision, financial and governance capabilities
10
to ensure the business is well run, and; we
have established relationships and contractual
arrangements with the Operational Partners who
we engage to operate and develop properties.
At a strategic level, MyFarm as the Manager
will also be actively involved in advising on the
make-up of Kakariki’s portfolio. For example, it
may advise that there is an opportunity to sell
developed property and redeploy and make
better use of the funds released.
Table 3: MyFarm key operational partners
Operational Partners Permanent Crop
DMS Progrowers Limited (DMS) Kiwifruit
Apples, avocados,
Freshmax Limited (Freshmax)
cherries and berries
Hop Revolution Limited
Hops
(Hop Revolution)
Comvita Limited (Comvita) Plantation Manuka
Rockit Global Limited
Rockit™ apples
(Rockit Global)
Sacred Hill Vineyards Sauvignon blanc
Limited (Sacred Hill) grapes
These Operational Partners are also key to
achieving targeted investment returns. They
typically have large scale orchard management
capabilities and are vertically integrated and
focused on grower returns. In the main, their
motivation is securing fruit for their post-harvest
and/or marketing businesses.
Access to their industry, market knowledge
and operational and development expertise
is invaluable.
We expect to add new Operational Partners as
we enter different regions, grow different crops
or look for different operating arrangements.
As Manager, we have successfully made the
investment case to the Kakariki Investment
Committee for the four Initial Investments,
conditional on due diligence, finance and the
success of this Offer.
Three of the Initial Investments are development
propositions and involve: the development of 35
canopy hectares (cha) of Rockit™ apple orchards
in the Hawke’s Bay; a first option to take a 50%
share in a 130 cha hop garden development
in Tapawera near Nelson, and; a 2,000 cha
plantation manuka development in the central
North Island.
No land has yet been acquired or leased for
the Rockit™ apple and plantation manuka
developments, but acquiring the land is not
expected to be a problem. The real value is
in securing the plant material, licences and
contractual arrangements.
The fourth Initial Investment is in established
SunGold™ kiwifruit orchards in the eastern Bay
of Plenty, and this investment is intended to
provide valuable cash flow during the first three
years until the development investments start
to come into production.
The expansion of both Rockit™ apple and
plantation manuka production is currently
constrained by lack of available plant material.
Despite this shortage, MyFarm has been able
to secure for Kakariki, heads of agreements for
the licence and priority for the supply of Rockit™
apple trees, and the supply of purpose-bred
manuka varieties and an associated long-term
land use agreement.
MyFarm also has the land for the hop garden in
Tapawera under contract. It intends to syndicate
this opportunity and has committed to giving
Kakariki a first option on 50% of the units in
this Hop Syndicate.
Once established, Kakariki will be in the strong
position of being able to purchase properties
without a finance clause. Accordingly, we do not
expect that it will take long to invest the balance
of the money raised in this Offer.

Yours sincerely

Andrew Watters
Chief Executive, AGInvest Trading Limited,
trading as MyFarm

Please provide signature

11
KAKARIKI INFORMATION MEMORANDUM

4. Key Information Summary

What is this? The Offer is to wholesale investors of Shares in Kakariki, a holding company formed to invest in the
production and supply of a range of permanent crops within New Zealand. Each individual investment
will be made using separate 100% owned subsidiary Investment Companies formed for the purpose.
Kakariki may co-invest in some investment properties where approved by the Kakariki Board on a
case by case basis. Initial Investments worth an estimated $47.4 million on a fully developed basis
have been approved by Kakariki’s Investment Committee, conditional upon finance, the success of
the Offer and due diligence.

These expected investments comprise the purchase of two kiwifruit orchards in the Eastern Bay of
Plenty, development of 35 cha of Rockit™ apples in the Hawke’s Bay, the development of 2,000 cha
of plantation manuka in the central North Island, and a first option to acquire a 50% share of units
in the Hop Syndicate being formed to acquire land and develop a 130 cha hop garden in Tapawera
near Nelson. Land is still to be sourced for the plantation manuka investment and the Rockit™ apple
orchards. However, Kakariki has 12 months to source this land because the plant material for both
manuka and Rockit™ (which is very difficult to access) is going through a bulking up process and plant
material won’t be available until June 2020. Kakariki has access to the plant material and licences and
related agreements for these investments.

Who Kakariki is promoted by and will be managed by MyFarm (MyFarm or Manager) under terms set out
manages in the Kakariki Management Agreement.
Kakariki
Kakariki Management Agreement provides that MyFarm as Manager will source investments for
Kakariki’s Investment Committee. MyFarm will also actively administer and manage Kakariki and its
Investment Companies and provide them with governance, supervision, financial control, accounting
and communication services under delegated authority from the Kakariki Board.

What The investment is in Shares in Kakariki at an issue price of $1.00/Share. The minimum amount that
are you must be raised for the Offer to proceed is $40 million (on a fully paid basis). This minimum amount
investing in? will be sufficient to fund the purchase and development of the four Initial Investments conditionally
approved by the Investment Committee.

Subject to the success of this Offer, Kakariki will invest in the production and supply of a range
of permanent crops using a mix of equity and bank debt, targeting an average loan to value ratio
(LVR) of 25% across its investments. On this basis, Kakariki with $40-100 million of equity will have
the ability to progressively build an investment portfolio with $53.3 - $133 million of assets. Funds
raised in the Offer will be partly paid, and payment calls will be made in multiples of $0.05/Share
on 30 days’ notice.

Kakariki initially intends to invest in the production of SunGold™ kiwifruit, aroma hops, plantation
manuka and Rockit™ apples. Other crops that will be immediately considered by Kakariki include
apples, avocados, cherries, berries, and grapes. In time, Kakariki will also consider investing in other
crops that meet Kakariki’s investment criteria, for example carbon forestry and aquaculture. It is also
within Kakariki’s investment scope to invest in the supply chains of the crops that it produces. The
four Initial Investments approved by the Investment Committee subject to due diligence and finance
are expected to cost a total of $47.4 million and require $36.8 million of equity, $9.29 million of debt
from a tier one bank and $1.38 million from land use grants for plantation manuka. While discussions
have been had with a number of banks, and funding proposals have been received for two of the
Initial Investments, no debt funding is currently in place. If these Initial Investments proceed and
Kakariki is successful in raising $100 million in this Offer, Kakariki will have at least another $85.6
million to invest ($63.2 million of equity and $22.4 million of debt). The focus for these investments
will be on acquiring a mix of properties for development as well as established income generating
properties that support Kakariki’s objective of paying high levels of annual distributions. If $100
million is raised in the Offer, Kakariki expects to make up to eight further investments using the
balance of the funds raised. Kakariki may co-invest in some investment properties where approved
by the Kakariki Board.

After the first three years from the date of this Offer, the Kakariki Board intends to list Kakariki on the
main board of the NZX and undertake a subsequent offer to raise additional capital for growth.
It is also possible that Kakariki may make a further offer to wholesale investors prior to this if it
needs further capital within three years. Conversely, if funds raised in this Offer are not fully called
within three years of the date of issue of the Shares, the obligation to pay any unpaid capital will lapse.

12
 KAKARIKI INFORMATION MEMORANDUM

What The development nature of all but one of the Initial Investments will mean that Kakariki does not
are you expect to achieve its aim of earning double digit pre-tax profits on contributed equity until year six.
investing in? It does however, expect to achieve capital growth from the development margins.

(Continued)

Key terms of The Offer is for 100 million partly paid Shares plus up to a further $100 million of oversubscriptions.
the offer The minimum amount that must be raised is $40 million.

The minimum application amount is 100,000 Shares ($100,000) and thereafter the size of an
investment can be increased in multiples of 1,000 Shares. An initial payment of $0.25 /Share applied
for is due at the time of application for Shares. The table below shows, at different levels of capital
raised in the Offer, the amount and indicative timing of paid capital required to fund equity capital
commitments for the Initial Investments and meet issue expenses and operating losses in the first
two years. These total $38.33 million, plus the cost of brokerage which varies with the Offer size.

Amount Raised                                                         

in the Offer 40,000,000 75,000,000 100,000,000 125,000,000 150,000,000 175,000,000

Paid on Application 0.25         0.25       0.25          0.25         0.25         0.25

Required during the
  0.59         0.21        0.10         0.03           -                   -  
Remainder of FY20
Required during
              0.13         0.07     0.05         0.04       0.04         0.03
FY21
Total required to end
of FY21 to fund Initial 0.97        0.53      0.40          0.32         0.29        0.28
Investments
Balance to Call for
 0.03        0.47      0.60         0.68       0.71           0.72
further investments

Calls will be made on 30 days’ notice and will be in increments of $0.05/Share or multiples thereof,
or such lesser final amount required to fully pay the Share. As a Shareholder in Kakariki the maximum
amount payable is $1.00/Share and no other payments are required to be made other than those
specifically agreed to.

The Offer is not underwritten. However, as promoter, MyFarm is underwriting the third-party costs
of making the Offer and sourcing the Initial Investments. For the avoidance of doubt, if the Offer is
successful, these costs will be met from Offer proceeds.

IMPORTANT DATES: Offer Opens – 27 May 2019 | Offer Closes – 26 June 2019

Key driver The key drivers of the return to Shareholders are the quantity, quality and prices received for the
of returns permanent crops that investment properties produce. Other factors which will have an influence
on returns are: the annual growing costs; the level of the capital costs incurred on development
properties and the time it takes for developing crops to come into production; the timing and type
of investment properties that Kakariki acquires and related to that, the timing and quantum of
calls on unpaid capital; the amount of bank debt that is used and interest rates on this debt, and;
the level of fund management costs incurred.

How can Shares in Kakariki will be quoted and may be traded on Syndex (http://www.syndex.exchange),
you get your a peer to peer trading platform for proportionally owned investments. A listing on Syndex facilitates
money out? liquidity, but does not ensure that you will be able to sell your Shares at a fair price at a time of
your choosing.

Syndex will maintain the share register for Kakariki, host all Shareholder communications and
facilitate trading in Shares between wholesale investors. Further details on Syndex are covered
on page 65.

13
KAKARIKI INFORMATION MEMORANDUM

Financial The Initial Investments will require total equity investment from Kakariki of $36.83 million, $9.29
information million of bank debt and $1.38 million from land use grants for plantation manuka. If $100 million
is raised in the Offer, a further $2.99 million of funding will be needed to meet issue expenses and
operating losses in the first two years.

The distributions received by Kakariki from its Investment Companies, less the operating costs of
Kakariki, will be passed on to its Shareholders via the dividend payments Kakariki intends to make
when it is in a position to do so. Post-tax distributions from the four Initial Investments Kakariki
intends to make are forecast to be as follows:

FY20 FY21 FY22 FY23 FY24

Distributions to
-            -   -   2,203,556   3,755,026
Shareholders
Paid Capital 33,918,177 39,825,393 39,825,393 39,825,393 39,825,393
Distributions/Paid
0% 0% 0% 6% 9%
Capital

FY25 FY26 FY27 FY28 FY29

Distributions to
  5,435,895    6,388,388 6,022,028 5,241,695 5,249,892
Shareholders
Paid Capital 39,940,537   40,210,829 40,388,030 40,412,201   40,437,168
Distributions/Paid
14% 16% 15% 13% 13%
Capital

The above distributions make no allowance for development margins Kakariki expects to make.
The above distributions will be affected if one or more of the Initial Investments does not proceed
and/or by any further investments made by Kakariki. Further investments may have a positive or
negative affect on the timing and level of distributions.

Key risks Investment in Shares is risky. You should consider if the degree of uncertainty around Kakariki’s
affecting this future performance and returns are acceptable to you.
investment
Kakariki considers the most significant investment specific risk factors that could impact on the
value of the Shares are as follows:

Risk Factor Significance of the Kakariki Fund

Reliance on The properties Kakariki intends to invest in will be developed, operated by or leased to
Operational Operational Partners with experience in growing particular types of crop. There is a risk that one
Partners or more of these Operational Partners will not perform to an acceptable standard and that crop
profits will be less than expected. This risk is expected to be mitigated by the established nature
of the relationships between the Operational Partners and the Manager, and the management or
lease agreements that will be used.

Crop Prices Orchard gate returns (OGR) for the permanent crops in which Kakariki intends to invest are
currently at high levels, Kakariki is investing in property development and there is a risk that
crop prices will reduce by the time the crops from these properties reach maturity. Crop prices
will be influenced by supply and demand factors, many of which will be beyond the control of
the Operational Partners who will sell the crops on Kakariki’s behalf. This risk is expected to be
mitigated by the vertically integrated nature of the Operational Partners' businesses and, in most
cases, the plant variety protection they have.

14
 KAKARIKI INFORMATION MEMORANDUM

Crop Crop yields for permanent crops such as plantation manuka and Rockit™ apples are relatively
Production new and unproven, and there is a risk that mature yields may be less than budgeted. Mature crop
yields from development properties may also be less than expected, due to factors such as soil
type and climate.

Between season yields will also be affected by climatic factors and pests and diseases.

These risks is expected to be mitigated by the high quality of the properties that Kakariki is
seeking to purchase, and the Operational Partners who will be contracted to manage them.

Yield risk is expected to be further mitigated by the diverse nature of the crops that Kakariki
is intending to produce and the range of geographic locations that will be involved.

Development Three of Kakariki’s proposed Initial Investments involve significant development expenditure and
Costs and Time it will be a number of years before the crops they produce reach maturity. There is a risk that this
development will cost more than budgeted and or take longer to complete. This risk is expected
to be mitigated  by the fact that MyFarm has experience supervising the development of these
types of properties for syndicate investors (though none of these developments are mature yet).

Performance of MyFarm as the Manager is responsible for sourcing and supervising investments and
the Manager developments undertaken by Kakariki, and for financial control and administration of the
Investment Companies and Kakariki itself. There is a risk that MyFarm will not perform to an
acceptable standard and this could have a negative impact on Shareholder returns and the
smooth operation of Kakariki. This risk is expected to be mitigated by the extensive experience
of MyFarm has in undertaking such roles for investment syndicates over the last 25 years.

Ability to There is a risk that Kakariki will not be able to acquire suitable properties at appropriate prices
acquire for Rockit™ apple and plantation manuka developments.
properties

Biosecurity New Zealand is free from a number of pathogens and pests that could have unwanted impacts
breach on its ability to produce one or more permanent crops and/or its ability to sell internationally.

Initial The Initial Investments are subject to due diligence and finance. There is a risk that one or
Investments do more of the Initial Investments will not proceed. In such event, the Kakariki Board will utilise
not proceed wthe proceeds from this Offer to pursue other investments in line with Kakariki’s Statement
of Investment Policy and Objectives.

The above summary covers the key risks that are specific to this investment (i.e.not industry risks) and does not cover all risks. Investors are advised
to read Section 10 (Risks) on page 78 of this Information Memorandum carefully and seek professional advice as part of their due diligence.

15
KAKARIKI INFORMATION MEMORANDUM

What fees The table below summarises the fees that Kakariki will pay to MyFarm if $100 million is raised in this
will you pay? Offer. If greater or lesser is raised in this Offer, the fee basis will be the same as set out below but
the fee itself will differ. Further information about fees is set out in Section 11 (What are the Fees).
In addition to fees paid to MyFarm, Kakariki will also meet issue expenses. If $100 million is raised in
the Offer, issue expenses are budgeted to cost $2.05 million and comprise: brokerage of $1.5 million
(brokers and MyFarm will be paid brokerage of 1.5% of the fully paid value of accepted applications
bearing their stamp), legal, financial, registry and marketing expenses of $552,000.

Fees if $100 million is raised in the Offer Basis Fee Based on $100
million Offer
Establishment Fee: This fee covers the costs of putting 0.2% of the fully paid $200,000
Kakariki and the Offer together, sourcing the Initial value of funds raised
Investments and underwriting the costs of third-party in the Offer.
issue expenses.

Annual Management Fee: This fee covers sourcing additional 1.25% p.a. paid monthly $1.25 million p.a.
investments, and management and administration of Kakariki in arrears
including governance support, financial control, accounting,
property inspections and oversight of Operational Partners,
banking liaison, contract negotiation and communication
with the Kakariki Board and Shareholders.

The Annual Management Fee will initially be based on committed

capital until Shares issued in the Offer are fully paid. Thereafter
the fee will be based on Funds Under Management (FUM) at the
market valuation of assets.

Profit Share: This fee incentivises MyFarm and aligns 20% of any Net Profit
Manager and Shareholder interests. For any given financial After Tax in excess of a
year, the Profit Share will be based on returns calculated at hurdle rate of 10% p.a.
the end of each Financial Year as follows:

(i) the aggregate of net profit after tax for that

Financial Year;

(ii) plus any increase in FUM in that Financial Year;

(iii) less any decrease in FUM carried forward from the

previous Financial Year

To avoid a drain on Kakariki cash reserves, the Profit Share

will be payable in a mix of cash and Shares in Kakariki. For
each Financial Year in which returns are greater than 10%
(Relevant Financial Year), Kakariki will pay the Profit Share
retrospectively in the subsequent Financial Year as follows:

(i) MyFarm will receive in cash an amount equivalent to

5% of all distributions in cash made by Kakariki in the
Relevant Financial Year; and

(ii) the balance of the Profit Share will be paid by the issue
of Shares to MyFarm at an issue price determined using the
closing value of FUM/Share for the Relevant Financial Year

In addition to the Fees outlined above, the Manager will be remunerated for providing services directly to Kakariki’s
Investment Companies. These services will be charged on a time and attendance basis at commercial hourly
rates and paid for directly by the Investment Companies. Investment Company services include financial control,
administration and property supervision.

The cost of these services for an Investment Company with an established property is expected to be $50,000 p.a.
plus disbursements. For an Investment Company with a development property, the cost of these services is expected
to increase to $100,000 p.a. plus disbursements for the first two years.

16
 KAKARIKI INFORMATION MEMORANDUM

How will Profit distributions to Shareholders will be made on a post-tax basis with imputation credits
your attached if they are available.
investment
High rates of depreciation for horticultural land development mean that, based on the Initial
be taxed?
Investments, Kakariki is unlikely to have any tax to pay before year eight (FY27). This means that
any Shareholder distributions prior to FY27 will not have any imputation credits attached to them
i.e. Shareholders will have to pay tax on these distributions, which will be withheld by Kakariki as
resident withholding tax. This is not a PIE Offer.

Tax can have significant consequences for investments. You should obtain professional independent
advice about tax and those consequences.

17
 Kakariki aims to be an active investment company.
Its intention is to invest in New Zealand permanent
crops with the potential to earn double-digit returns.

18

5. WHAT KAKARIKI
INVESTS IN
SUMMARY OF KAKARIKI
STATEMENT OF INVESTMENT
POLICY AND OBJECTIVES
Kakariki aims to be an active investment
company. Its intention is to invest in
New Zealand permanent crops with the
potential to earn double-digit returns.
In particular, Kakariki plans to invest primarily
in real assets as opposed to conventional
financial assets such as bonds and shares
listed on securities exchanges. Agricultural
assets are a sub-set of the real assets class.
INVESTMENT RATIONALE
The investment philosophy of the Kakariki
Board and MyFarm stems from a belief that
the New Zealand primary sector is facing
demographic and intergenerational transfer
challenges, has good growth prospects in
certain segments, is world class in a number
of areas, but is capital constrained and difficult
for investors to access.
KAKARIKI FUND INFORMATION MEMORANDUM
The Kakariki Board and MyFarm also
believe there is potential to benefit from
land use changes.
Traditionally, investing in real agricultural
assets has been difficult due to the amount
of capital required, the need for specialised
expertise, and the existing industry ownership
structures. In most cases, investment has
been the domain of owner-operators,
or large corporate entities.
Kakariki aims to allow investors access
through partnering with well-known
Operational Partners in each sector who
will lease or manage the individual assets.
These Operational Partners have, or are
acquiring, operational expertise, protected
intellectual property in their chosen field
of agricultural expertise and end-to-end
supply chain services that access premium
export markets.
19
KAKARIKI INFORMATION MEMORANDUM
KAITIAKITANGA/TAIAO
Kakariki intends to acquire and manage its
investments in a sustainable and socially
responsible manner.
This approach reflects the view of the Kakariki
Board and MyFarm, that New Zealand primary
production is in a transition from being
production led to customer and value focused.
In particular, Kakariki aims to be carbon neutral,
to make good use of water, and operate in a way
that protects water quality.
To this end, Kakariki respects and embraces
the holistic Maori principal of Kaitiakitanga –
guardianship/stewardship of the land and care
for our water, fauna, flora and people. It aims to
give effect to this ethos using guidelines currently
being developed by the Primary Industry Council.
The Council is a government-appointed body
charged with creating a vision for the primary
sector and providing independent advice to the
Ministry for Primary Industries and its Minister,
on issues facing the sector.
The Council has reviewed the vision statements
of a wide range of primary sector businesses and
commissioned Lincoln University’s Agribusiness
and Economics Research Unit (AERU) to
undertake a situational review of the
New Zealand Food and Fibre Sector1.
Based on this work, the Council has adopted
three principles that will guide its vision.
These involve continuing the volume-to-value
journey, working towards the philosophy of
Taiao – healthy land, healthy air, heathy water
and healthy people, and an ambition to be
world-leading in terms of farming systems,
marketing and value chains and innovation.
While it is still formulating the final wording of
its vision statement, the Council’s vision for
New Zealand primary production will embody
the following elements:
i. an ambition to produce the world’s most
distinctive, trusted and sought-after food and
fibre products that speak of our nature,
our land, water and our people;
ii. an ambition to increase prosperity by using
the philosophy of Taiao to lead and innovate;
1. Dalziel, Paul, Caroline Saunders and John Saunders (2018). The New Zealand Food and Fibre Sector: A Situational Analysis.
Client report prepared for the Primary Sector Council. Lincoln University: Agribusiness and Economics Research Unit.
20
iii. an aspiration of being good ancestors, and;
iv. being proud to honour the place we
call home
The AERU report commissioned by the Council
concludes, amongst other things, that if the
goals are to increase the economic value of the
food and fibre sector and to reduce the sector’s
negative impacts on the natural environment,
there are a small number of possibilities that can
achieve both goals simultaneously. These involve:
• Adopting new technologies and sustainable
practices that will allow increased
production with a lower negative impact
on the natural environment
• Shifting land and water use to products that
have a higher economic value and a lower
negative impact on the natural environment
• Using the outputs of the primary sector to
manufacture food and fibre products that
are more highly valued by consumers
• Using knowledge-intensive business services
to target high value market segments in
global food value chains
The Kakariki Board intends to take a responsible
approach to the adoption of the operational
guidelines being developed by the Council.
Initial Sustainability Focus
Agricultural and food production systems have
a big impact on the state of our planet – with
greenhouse gas emissions impacting climate
change and nutrient loss affecting waterways
being two important examples.
With approximately 50% of New Zealand’s
carbon emissions coming from agriculture,
becoming ‘zero carbon’ is Kakariki’s initial aim.
To do this Kakariki will seek to;
Measure carbon emissions from its properties
and the management of those properties.
• Offset those emissions through carbon
sequestration on manuka and other
plantations
• Progressively reduce its emissions through
investment in alternative energy systems and
smart technology and management systems
 KAKARIKI INFORMATION MEMORANDUM

Kakariki respects and has embraced the Maori principal of

Kaitiakitanga – stewardship of the land, care for our water, care for
our fauna and flora and care for our people.

While there are economic costs to this approach Figure 1: Typical nitrogen loss from different types of Farms
they are expected to be affordable because 100
Kakariki’s investments will have a relatively low 90
emissions footprint (measured in in tonnes of 80
carbon emitted per million dollars invested) and 70
kg N/ha

sequestration of carbon via manuka plantations 60

or forestry which is very cost effective (tonnes 50

40
carbon sequestered per million dollars invested).
30
With regard to water quality, Kakariki’s focus 20
on permanent crops (as opposed to crops that 10
require replanting annually), means that it is 0
Kiwifruit

Apples

Grapes
garden
Market

rotation
Arable crop

Dairy

Fibre
Meat and

already in a comparatively favourable position

with respect to nutrient run-off into water ways
(see Figure 1). The losses in Figure 1 are based
on one research report and may overstate the
Source: ANZ Agrifocus
losses in market gardens and understate losses
In kiwifruit orchards.

21
KAKARIKI INFORMATION MEMORANDUM
INVESTMENT RETURN OBJECTIVE
Kakariki is income focused and, once established,
it aims to provide Shareholders with double digit
annual distributions on contributed equity,
paid quarterly.
The development nature of three of the four
Initial Investments means that it will be at least
five years before this return objective can be
met. Additionally, investments made by Kakariki
subsequent to this Offer may alter the timing
and level of the returns achieved. The Board will
consider Kakariki’s distribution objective when
making new investments.
Investment Strategy
Kakariki will invest directly in a diverse range
of permanent crop and other primary sector
assets. The initial focus is on all forms of tree
and vine- based fruit and flower production
including (but not limited to) pipfruit, kiwifruit,
grapes, hops, avocados, berries, cherries, apples,
Rockit™ apples and manuka plantations (for
honey and carbon). Grouped together, these
assets spread many of the individual and
sector specific risks whilst enabling investors
to get exposure to high growth, high value
healthy crops.
These crops have been chosen because they
are in sectors that have to date demonstrated
the investment characteristics that the Board is
looking for, namely they:
i. have unique products, often with protected
Intellectual Property;
II. target affluent market segments in high
growth Asian countries and traditional western
markets;
iii. are vertically integrated and there is a
high degree of collaboration between supply
chain participants that results in efficiencies,
consistent quality and market access to
desired consumers;
iv. have invested in strong brands that
emphasise uniqueness, quality, service
and the NZ story;
v. make market-based payments that
reflect the quality characteristics most
desired by customers;
vi. are high margin, high growth product
categories focused on health, wellness
and convenience;
22
vii. apply best practice management from
orchard through to end customer;
viii. apply innovation to key facets of
producing, processing, storing and distributing
products, and;
ix. exhibit good environmental and
social credentials
Kakariki investments will be made where
the Board and MyFarm believe they offer an
attractive investment return after weighing up
the return/risk profile of the sector and the
individual investment property.
While Kakariki will invest predominately in the
production of permanent crops, if appropriate,
it will also have the ability to invest in shares of
companies such as Zespri, and the production,
post harvest, storage and distribution assets and
shares of its Operational Partners.
MyFarm has developed a multi-attribute
approach that it uses to assess the attractiveness
of investing in the production and supply of
permanent crops.
This assessment is based on measures related
to six areas of interest: market capitalisation/
size, stage of growth cycle, expansion capacity,
investor interest, stage in the real estate cycle,
and risk adjusted returns.
This analysis provides a useful measure of
the attractiveness and ability to invest in the
production of a particular crop relative to other
crops under consideration at any particular time.
Notwithstanding, in order to minimise risk and
provide Shareholders with less volatile returns,
the Kakariki Board intends to invest in a portfolio
of the crops below and has set investment limits
and investment criteria which it believes are
commensurate with achieving this objectives.
MyFarm is allowed to be flexible in utilising the
full extent of these ranges in order to meet
Kakariki’s long term return target.
Table 5 sets out the initial investment limits for
Kakariki. These ranges and limits will be regularly
reviewed by the Kakariki Board, with advice
from Myfarm.
If only $40 million is raised in the Offer, Kakariki
will initially be less diverse than it would be if it
raises the full $100 million it is seeking.
 KAKARIKI INFORMATION MEMORANDUM

Table 4: Current Investment Limits for each Crop Kakariki will become increasingly income focused
and in general terms, it is looking for investments
Investment Type % of Portfolio
that will generate high levels of operating
Kiwifruit 10-50% cashflow. To achieve this, it expects to have to
invest in a mix of established properties and
Apples/RockitTM apples 10-50%
properties that it will have to develop.
Avocados 0-25%
Kakariki intends to target development properties
Vineyards 0-30% where there is a good margin between the cost
Hops 0-30% of buying and developing a property and the cost
of buying an established property. These sorts
Manuka 10-30%
of properties are expected to provide relatively
Cherries 0-25% higher cash returns on contributed equity, albeit
Other 0-30% that there is development risk and a time delay
until profits are generated.
INVESTMENT CRITERIA
INITIAL INVESTMENTS
Kakariki has been established with the sole
Subject to the success of this Offer and due
purpose of investing in the production and supply
diligence, Kakariki’s Initial Investments will be
of New Zealand permanent crops, making its
in SunGold™ kiwifruit, aroma hops, plantation
property investment criteria quite specific.
Manuka and Rockit™ apples. Details of these
Each property investment opportunity will be
expected investments are as follows. If one or
assessed against the following criteria:
more of the Initial Investments does not proceed
• Acquisition price and cost of development; (e.g. for reasons ascertained during due diligence,
• Fit with the Primary Sector Council vision because of finance or because final agreements
and guidelines; cannot be reached) the Kakariki Board will utilise
the proceeds from this Offer to pursue other
• The expected profitability and level and
investments in line with Kakariki’s Statement of
timing of distributions and unrealised
Investment Policy and Objectives (SIPO).
development margins;
• The potential for the property to be farmed SunGold™ kiwifruit
in a more environmentally sustainable manner Kakariki has conditional sale and purchase
and for productivity and operating profits to be agreements to purchase two established
improved through management SunGold™ kiwifruit orchards near Opotiki in
or development; the Eastern Bay of Plenty for $11 million.
• The quality of the property in terms of soils, These agreements are conditional on due
water availability, irrigation, topography, diligence and finance until 28 June 2019.
infrastructure, proximity to service centres Settlement date is 12 July 2019.
and climate; These kiwifruit orchards will be leased to DMS
• Scale of the property; and have a total area 10.72 cha. All but 1.1 cha
of this area is in SunGold™. The 1.1 cha is in
• Sector outlook;
Hayward kiwifruit and will be re-grafted to
• Type and security of title; SunGold™ in 2020. Each property has a house
• Plant variety intellectual property; that is rented out.
• The track record of production; The purchase of the kiwifruit orchards includes
the proceeds of the 2019 crop. These proceeds
• Fit with the existing investment portfolio
plus the lease payments from DMS are expected
and geographic concentration of
to provide Kakariki with the cashflow to meet
Kakariki’s investments;
Kakariki overheads until the development
• The level of co-investment available/ investments start to produce income.
required, and;
• The ability to contract a high quality
Operational Partner on acceptable terms

23
KAKARIKI FUND INFORMATION MEMORANDUM
These kiwifruit orchards are in very good
locations and the areas in SunGold™ are
expected to produce 15,000-16,000 trays/cha.
At the current price for SunGold™ kiwifruit these
orchards are expected to generate EBITDA
returns in excess of 10% p.a.
However, budgets for future years are based
on more conservative orchard gate return
(OGR) of $9.25/tray.
Aroma hops
Kakariki has an option to invest in 50% of the
units in the Hop Syndicate to be formed by
MyFarm to develop a 130 cha hop garden on
dairy land under contract in the Tapawera Valley
near Nelson. Kakariki’s investment in the Hop
Syndicate is likely to cost $10.33 million and be
available in September 2019.
The garden will be developed by the conversion
of an existing dairy farm that MyFarm has
secured by way of a conditional sale and
purchase agreement.
Approximately 30 cha of this area is currently
used for dairy support and will be developed
from October 2019, and the remaining milking
platform will be developed from January 2020.
The hop garden will be developed and operated
by Hop Revolution who will also pelletise, pack,
store, distribute and market hops produced from
the garden pursuant to appropriate agreements
being agreed. Hop Revolution will also supply
hop seedlings for the initial plantings.
Land acquisition and development of the garden
is expected to cost the Hop Syndicate
24
$29.5 million including capitalised initial
operating losses. The Hop Syndicate is expected
to fund $9.3 million of this cost using debt.
The Hop Syndicate is expected to be profitable
from FY22 and, if it takes up the option, provide
Kakariki with pre-tax distributions of 18% p.a.
from maturity in year five.
Plantation manuka
Kakariki intends to develop a 2,000 cha manuka
plantation under a share farming agreement
with Comvita.
Kakariki has not yet acquired the land on which
to do this development but has a year to source
one or more suitable properties because the
agreement with Comvita will not commence
until June 2020.
This delay is because Comvita is unable to supply
manuka plants before this. The focus for land
will be North Island hill country. Investment
Committee approval will be required before
any land is purchased.
The share farming agreement with Comvita
(called a Long Term Land Use Agreement)
provides that, once the plantation is established,
Kakariki will receive 35% of honey revenue
and 80% of the carbon credits generated, and
meet 50% of the cost of pest control. Comvita
will supply and sell manuka plants to Kakariki,
plant and maintain the plantation at its own
cost (excluding the costs of maintaining tracks
and fences and 50% of pest control costs), and
provide and meet the cost of the apiary services
needed to turn nectar from the plantation into
high quality/high value manuka honey.

The Long Term Land Use Agreement also
provides that, while the plantation is establishing,
Comvita will pay Kakariki an annual hive set down
fee of 5% p.a. of the value of Kakariki’s investment
in land and improvements. This hive set-down
fee, which is payable for up to five years, ceases
once Kakariki ‘s share of honey revenue exceeds
the hive set-down fee which it is expected to do
after year two.
The acquisition and development of a 2,000 cha
manuka plantation is expected to cost Kakariki
c.$13.0m. Plantation Manuka is expected to
generate a pre-tax profit of 2.3% p.a. in year one
increasing to 16.6% p.a. in year 10. This forecast
high return assumes receipt of a $1.38 million
land use grant from the Provincial Growth Fund
and that current terms and conditions for these
grants remain unchanged.
Rockit™ apples
Through MyFarm, Kakariki has a heads of
agreement with Rockit Global related to
commitments to supply licences and give priority
to the supply of plant material, and to enter
into orchard development and management
agreements and a fruit supply agreement for
the packing, storing distribution and marketing
of the fruit that is produced.
Through this heads of agreement, and subject
to the acquisition of suitable land in the next
12 months, Kakariki has access to the licences
and priority for plant material to develop 35 cha
of Rockit apples in Hawke’s Bay, for planting in
the Spring of 2020. MyFarm and Rockit Global
have also agreed to work together in good faith
to make similar arrangements for a further
40 cha in 2021.
KAKARIKI FUND INFORMATION MEMORANDUM
The agreements will not commence until June
2020 because the Rockit Global is unable to
supply trees until then. This gives Kakariki a
year to source a suitable property and the
focus for this search will be Hawke’s Bay.
Investment Committee approval will be
required for land acquisitions.
The purchase and development of 35 cha of
Rockit™ apple orchards is expected to cost
$12.7 million including capitalised initial
operating losses. The orchards are expected
to be profitable from year three onwards and
generate pre-tax operating profits of c. 50% p.a.
from maturity in year eight.
Funding for Initial Investments
The Initial Investments are budgeted to cost
$47.5 million and be funded using $36.8 million
of the equity capital raised in this Offer,
$9.29 million of debt from a tier one bank
and $1.38 million from land use grants for
plantation manuka.
The minimum amount for the Offer to proceed
is $40 million. If only the minimum is raised,
Kakariki would have sufficient capital to fund the
Initial Investments.
The staggered nature of the purchase and
development of the Initial Investments means
that the initial payment of $0.25/Share will be
sufficient to meet initial funding requirements
even if only the minimum amount is raised in the
Offer. However, if only the minimum amount is
raised, subsequent Share payment calls will be
made earlier than they otherwise would be.
KAKARIKI FUND INFORMATION MEMORANDUM

All of the permanent crops in which Kakariki

intends to invest are in sectors or businesses
that to varying degrees are replicating the
strategy that Zespri has used so successfully
to supply and market SunGold™ kiwifruit.
This strategy centres on:

• high value permanent crops with good nutritional, functional and flavour attributes
• breeding proprietary plant varieties with attributes favoured by consumers
• using intellectual property rights such as plant variety rights or trademarks to control
globally, the quantity and quality of the products produced
• product branding and marketing to increase demand

Kakariki’s investment portfolio is expected to be made up of established high volume crops such as
SunGold™ kiwifruit, trade-marked ‘club’ apple varieties, avocados, sauvignon blanc and other grapes,
and emerging crops that are undergoing rapid expansion such as Rockit™ apples, plantation manuka,
sweet cherries and aroma hops.

26
27
KAKARIKI INFORMATION MEMORANDUM
Profiles of the crops in which Kakariki
initially intends to invest in:
KIWIFRUIT
• SunGold™ kiwifruit has all the investment
attributes that Kakariki is looking for and
SunGold™ kiwifruit orchards are expected
to be a core part of Kakariki’s investment
portfolio
• SunGold™ is produced, distributed and
marketed through a vertically integrated
grower controlled trade channel. Plant
variety rights (PVRs) provide control over
supply volumes and enable brand and
market development, demand is growing
and significant price premiums are paid
as a result of the high fruit quality and the
marketing endeavours of Zespri which
markets all class one kiwifruit
• In recent years, the OGRs for mature
SunGold™ kiwifruit orchards have averaged
around $150,000/cha. In contrast, the mature
OGR for the green Hayward variety which is
not PVR protected has been less than half this
amount at around $70,000/cha
• The high profits from production of SunGold™
kiwifruit orchards have been capitalised into
orchard prices to the extent that good Bay
of Plenty orchards are currently selling for
more than $1 million/cha excluding the crop
on the vine
• At these prices and the current level of OGR,
a good mature SunGold™ orchard will still
provide EBITDA returns of 10%
• Higher returns are expected to be achieved
by buying or developing new SunGold™
orchards outside the Bay of Plenty, where
land is much cheaper and the fruit grows well.
Notwithstanding, the profits from SunGold™
have also resulted in an increase in the price
of the licence required to grow SunGold™
kiwifruit. Licences are sold by Zespri through
a competitive tender and averaged $290,000
in the latest auction
28
Industry Overview
The New Zealand kiwifruit industry was founded
in the 1970s based on the production of the
green Hayward variety and is expanding based
on production of SunGold™, a new gold variety
that was expanded following the outbreak of the
disease Psa in 2010.
Zespri has ambitious growth plans to grow
global supply from 58 million trays in 2018 to
c.250 million trays by 2025. To this end it is
progressively releasing a planned 4,550 cha
of new SunGold™ licences over the seven-year
period ending 2022.
In 2019 SunGold™ volumes are expected to
surpass Hayward volumes for the first time,
reflecting the widespread ‘cutting over’ and
re-grafting of Hayward to SunGold™.
Zespri’s growth plan is based on its expectation
of increased consumption in North America,
China, Korea, Taiwan, and South East Asia. It
estimates that demand for kiwifruit from New
Zealand could reach 350 million trays in ten
years’ time. Growing the demand for SunGold™
will be key to achieving this.
In its key markets, Zespri is one of the
top-five most recognised fruit brands.
Zespri-branded fruit is perceived as having
good quality, taste, sustainability, nutrition and
food safety attributes. This reputation is a result
of long-term market commitment, continuous
investment and operational excellence.
The Zespri brand, and the associated values and
promises the brand delivers, helps underpin
attractive price premiums. The premiums for
both green and gold varieties help compensate
for the higher costs of production for
New Zealand fruit. Chilean fruit tends to have
a cost-of-production advantage due to lower
orchard and post-harvest costs. Domestically
produced fruit in both Europe and China have
a cost advantage for both transportation and
on-shore costs but most of their fruit is supplied
at a different time of the year.
 KAKARIKI INFORMATION MEMORANDUM

Figure 2: SunGold™ Orchard Gate Returns $/cha

(all maturities)
Other key factors that underpin New Zealand’s

$114,345
competitive position include:

$101,973

$98,838
I. Consistency of supply of a high quality and

$90,813
$90,911
high taste product supported by a world leading
$83,094

$83,785

$73,890

$71,080
supply chain, through which growers receive
$60,885

market-based payments that reflect the quality

of their fruit. Fruit quality parameters (taste and
sweetness) now account for 40% of total grower
payments for Hayward and 70% for SunGold™
ii. An innovative portfolio of Zespri-exclusive
product offerings (SunGold™ and organic), and
a pipeline of new varieties
2008/09

2009/10

2010/11

2011/12

2012/13

2013/14

2014/15

2015/16

2016/17

2017/18
iii. Significant investment and support of brand
marketing and category growth
iv. A comprehensive understanding of the health
Source: Zespri Annual Reviews
benefits of kiwifruit
Figure 3: SunGold™ Orchard Gate Returns $/tray
v. Deep penetration of core markets
vi. Focused development of new high-growth
$12.91

markets – North America and China are both

on the ascent
$10.45

$10.06
$9.80

vii. Year-round supply of Zespri-branded fruit

$8.89

$8.64
$8.21

with New Zealand supply augmented with

$7.73

$7.66

product from the Northern Hemisphere.

$5.41

This approach enables Zespri to support its

branded offering to consumers all year round
and provide a category management solution
to large retailers. Category management is
particularly important to Zespri’s leadership
position, and its ability to maintain shelf space
2010/11
2009/10
2008/09

2011/12

2012/13

2013/14

2014/15

2015/16

2016/17

2017/18

and commercialise new varieties

Source: Zespri Annual Reviews

29
KAKARIKI INFORMATION MEMORANDUM

• Notwithstanding, leading growers like Feshmax

APPLES
• New Zealand apples have many of the
attributes of the kiwifruit industry, and
acquiring and developing new variety
apple orchards will be important to Kakariki’s
investment return objectives
• Whereas the kiwifruit industry has achieved
success using market regulations, the
apple industry has achieved success as
a consequence of market deregulation
• As a result of the consolidation that followed
deregulation in 2001, the New Zealand apple
industry is characterised by a relatively small
number of vertically integrated fruit supply
companies such as Mr Apple (Scales),
T&G Global and Kakariki’s Operational
are achieving yields of 3,500 tce/cha under
conventional production systems, and up
to 4-5,000 tce/cha using more intensive
production systems
• At a yield of 3,500 tce/cha and an OGR of
$10-$20/tce, the apple OGR/cha has ranged
between $35,000 - $70,000/cha in recent years
• While this is significantly less than the OGR
for SunGold™ kiwifruit, apple returns have
not yet been capitalised into orchard prices
and the returns on capital invested from new
apple varieties are much higher than returns
for SunGold™ kiwifruit. Mature apple orchards
are less than a quarter of the price of a mature
SunGold™ kiwifruit orchard and can generate
pre-tax earnings upwards of 15% p.a. even
with industry average yields
• While industry average yields have remained
static, average OGR for new varieties have
increased each year for the last four years and
the industry is in a growth phase based on the
demand for the new varieties
Figure 4: New Zealand Apple Exports by Variety 2010-2017
400
350
300
Tonnes x 000

Partner, Freshmax 250

• These companies have or participate in

150
intellectual property that protects a range
of new apple varieties or club varieties
100
that they grow, pack, store, distribute and
market internationally under their own
brands at significant price premiums to 50

traditional varieties
0
• In recent years, the OGR for a mature
2010

2011

2012

2013

2014

2015

2016

2017

apple orchard with new varieties has

ranged between $10-$20/tray carton
equivalent (tce) Braeburn Cox Cripps Pink Envy™

• At an industry level, apples have not seen Fuji Granny Smith Jazz™ Other Apples

the huge lift in average productivity Pacific Beauty™ Pacific Queen™ Pacific Rose™

experienced in the kiwifruit industry and Red Delicious Apples Royal Gala
average apple yields have remained
relatively static at around 2,400 tce/cha
Source: FreshFacts, New Zealand Horticulture 2017

30
 KAKARIKI INFORMATION MEMORANDUM

Industry Overview
Apples are New Zealand’s third largest horticultural Figure 5: New Zealand Apple Exports by Variety and
export behind kiwifruit and wine. The industry is Destination Calendar Year 2017

long established and vertically integrated into export

markets. Total export earnings have doubled in the
Braeburn 18%
past six years to $762 million in September 2018. Royal Gala 33%

Twenty years ago the New Zealand apple industry

Cox 1%
was based on Royal Gala, Braeburn and Fuji varieties
and exporting to the US and EU. It is now focused Cripps Pink 6%

on selling new trademarked varieties to Asian

markets where demand from emerging economies Envy™ 5%
is growing, shipping costs are lower and prices are
higher. In 2017, 39% of exports went to Asia and Red Delicious 1% Fuji 8%
Pacific Rose™ 2%
30% of total exports were of newer trademarked
Pacific Queen™ 6% Granny Smith 2%
varieties exclusive to New Zealand1.
Pacific Beauty™ 1%
Jazz™ 11%
This switch in varieties and market focus followed Other Apples 6%

a period of poor orchard profitability between

2004 - 2012, a time when the industry was
transitioning to a deregulated structure following
Pacific 2%
the restructuring of the NZ Apple and Pear UK 15%
North America 13%
Marketing Board, which was a single desk
seller producer board.
Deregulation initially resulted in a large increase Middle East 6%

in the number of exporters, and a consolidation

of post-harvest operators. This was followed by
a period of ongoing consolidation and integration
of both exporters and post-harvest operators.
In 2014, the largest 19 exporters accounted for Europe 25% Asia 39%
91% of export volumes.
The same consolidation has not occurred at the
orchard level, although the poor returns between
2004 and 2012 resulted in a concentration of apple
Source: FreshFacts, New Zealand Horticulture 2017
production into the two main growing regions,
Nelson and Hawke’s Bay, and away from areas
north of Auckland and south of Canterbury.
The coastal environment of both the Nelson and
Hawke’s Bay regions is unique for apple growing.
The mild winters and summers make for a very
long growing season and an optimal temperature
range for apple development.
Slight climatic differences mean that Hawke’s Bay
production is harvested earlier and weighted toward
Fuji, Pacific series, and Royal Gala varieties which
are preferred in Asia. This contrasts with Nelson,
where there is a heavier weighting toward Jazz and
Braeburn, more favoured in European markets.
In addition to a climatic advantage, Hawke’s Bay
and Nelson also have better infrastructure (orchard
support services, packhouses and specialised cold
storage) and shipping services.
1 Source: FreshFacts, New Zealand Horticulture 2017

31
KAKARIKI INFORMATION MEMORANDUM
ROCKIT APPLES
• Rockit™ is a miniature apple that is sold in
tubes and positioned as a high-quality,
premium priced snack food
• The apple variety is formally called PremA96
and the PVR is owned by Prevar who have
assigned global commercialisation rights
exclusively to Rockit Global
• Rockit Global is a relatively small and new
company that has modelled itself on Zespri
and achieves similar price premiums
• Rockit Global licenses growers to grow Rockit™
apples, provides the associated trees for
orchard development, and packs, stores,
distributes and markets the resulting fruit
under a supply agreement
• The OGR for a mature Rockit™ apple orchard
is as high as $180,000/cha and at this level,
it is one of the highest revenue permanent
crop in which Kakariki is looking to invest
• Orchard operating costs are nearly double
those of a conventional apple orchard and
at around $360,000/cha (including a licence
fee of $75,000/cha) the cost of developing a
Rockit™ apple orchard from bare land is
also significantly higher
• These higher costs are expected to be more
than offset by the higher OGR for Rockit™, and
the EBITDA return on investment for a mature
Rockit™ apple orchard is expected to range
between 25-45% p.a.
• Rockit Global’s expansion is currently
constrained by a shortage of trees which
are grown by third party nurseries
32
• These shortages notwithstanding, through
MyFarm, Kakariki has access to licences and
priority for trees for 35 cha for planting in 2020,
and may have access to a further 40 cha for
planting in 2021
• Kakariki’s Investment Committee has decided
to take up the licences for the first 35 cha,
subject to it being able to purchase or lease
suitable land in time for planting in 2020
• It takes three years for a Rockit™ apple orchard
to generate a profit and a further five years for
it to reach full maturity
Rockit Overview
Rockit Global is based in Hawke’s Bay where all
of its New Zealand Rockit™ apples are grown.
Rockit Global has the exclusive global rights to
the apple variety PremA96 developed by Prevar,
which it has trade marked as Rockit™. These
trademark and commercialisation rights have
approximately 20 years to run (expiring
June 2039).
Rockit Global’s success in marketing Rockit™
apples is evidenced by the price premiums it has
achieved and the speed with which its apples
have sold. At $70/tce the OGR for Rockit™ apples
is $20/tce higher than that of the next highest
priced New Zealand apple variety.
The high OGRs that Rockit Global has been able
to achieve for its suppliers are a result of the
quality of the apples (small, red, sweet and crisp
with a long storage life) and the global supply and
commercialisation rights that have enabled it to
undertake and capture all the benefits of brand
development and promotion.

Like Zespri, Rockit Global uses a
market- focused, vertically integrated approach
in which it works collaboratively with its growers
to achieve the highest OGR that it can.
Rockit Global markets and sells Rockit™
apples on an agency basis, in return for sales
commissions and royalties. It also makes money
from packing and coolstoring RockitTM apples,
from managing Rockit™ apple orchards on behalf
of its suppliers and from the sale of licences.
RockitTM originally formed as the Havelock North
Fruit Company in 2004 following the deregulation
of the New Zealand apple and pear industry. The
company changed its name in early 2017 when it
was purchased by a consortium of Rockit™ apple
orchard investors and private equity investors
(Oriens Capital and Pioneer Capital between
them own 54.23% of Rockit Global).
Rockit Global has strong in-market relationships
in the UK, Europe, Asia and
North America.
In 2011, Rockit Global marketed 2,600 TCE
of Rockit™ apples. Of these, 2,400 TCE were
KAKARIKI INFORMATION MEMORANDUM
exported for market trials in the UK (Marks &
Spencer) and Taiwan and 200 cartons were used
for domestic trials in New Zealand.
Based on this test marketing, in 2012 the Rockit
Global promoted a partnership to lease and
develop 62 cha of Rockit™ apple orchards.
Two years later, it formed another syndicate
and planted a further 50 cha.
With the addition of independent growers and
a MyFarm syndicate formed in 2017, the Rockit
Global now has a total supply base of 248 cha,
the oldest of which has just reached full maturity.
It also has licenced growers in the UK, USA,
Australia, Belgium and Italy.
Rockit Global has recently purchased a site in
Irongate, Hastings, where it is planning to build a
new packhouse, coolstore and head office facility
costing in excess of $30 million.
Over the last four seasons, RockitTM apple
growers have received an OGR of $72/tce.
The current forecast for the 2019 crop is
$71/tce but this is expected to increase as
the season progresses.
33
KAKARIKI INFORMATION MEMORANDUM
AVOCADOS
• The New Zealand avocado industry does not
have the plant variety protection found in the
kiwifruit and apple industries, but it does have
a unique marketing window and production
advantages in Northland that have enabled it
to achieve the price premiums that make it an
attractive investment to Kakariki
• Most New Zealand avocados are exported to
Australia where they fill a high-priced gap in
domestic supply
• Avocado OGRs have averaged $20/tray
equivalent over the last five years ($60,000/
cha based on an average yield of 3,000 tray
equivalent/cha), largely as a result of demand
from Australia
• While this is a similar OGR to green kiwifruit,
avocado operating costs are roughly half those
of green kiwifruit and orchards can be acquired
or developed more cheaply
• While most avocados are grown in the Bay of
Plenty, Kakariki intends to invest in purchasing
and/or developing avocado orchards in
Northland where land prices are lower
($250,000- $300,000/cha versus more than
$400,000/cha in the Bay of Plenty) and the
biennial yield fluctuations that characterise
avocado production are lower
• By investing in the Far North, Kakariki expects
to be able to generate pre-tax returns on
orchard investments of 10-15% p.a. at current
prices with minimal seasonal variation
34
• The level of Kakariki’s investments in avocado
production is expected to be commensurate
with the ability of its Operational Partner
Freshmax, to diversify into Asian markets
while maintaining OGR
Industry Overview1
Avocados are New Zealand’s third largest fresh
fruit export, and the fourth largest horticultural
export. Its main export market is Australia. They
are a high value, versatile, and nutritious fruit that
can be eaten fresh or used in a range of health
foods and beauty products.
Australasian sales of New Zealand avocados
account for 80-90% of total fresh sales. For
biosecurity reasons, the Australasian avocado
market is restricted to domestic suppliers.
Both New Zealand and Australian markets have
seen strong per capita consumption gains in
recent years and suppliers have struggled to
meet demand, especially in the latter part of
the New Zealand season (February/March).
This demand growth has resulted in an
increase in wholesale and orchard gate returns.
Australian market returns for New Zealand
avocados have nearly doubled in recent years
and are nearly a third higher than returns from
domestic and other export markets.
Notwithstanding, as a result of expanding
production in New Zealand, a maturing
New Zealand market and heavy concentration
risk to Australia, the New Zealand avocado
industry is looking to diversify to other markets.
1 Source: ANZ Agri Focus March 2018: Avocados – Holy Guacamole
 KAKARIKI INFORMATION MEMORANDUM

Avocado exporters like Freshmax are licensed
by the Horticultural Export Authority (HEA) which
requires them to meet quality standards. There
are currently 10 licenced exporters many of
whom are looking to diversify into the Greater
China region and other existing Asian markets
such as Japan, Singapore, South Korea, Thailand
and Malaysia.
Total sales over the past five years have averaged
$152 million and the industry has aspirations of
near doubling this figure over the next decade.
This is expected to be driven by new larger scale
developments and improving average yields
across the sector.
production increasing to 13 million trays, up from
its current base of 5.6 million trays.
The avocado supply chain generally involves
growers entering into annual supply contracts
with an exporter/marketer such as Freshmax.
Fruit is sorted and packed at one of 14 licenced
packhouses, some of which are kiwifruit oriented
but pack avocados in the kiwifruit off-season.
Once packed, avocados are shipped to fruit
ripening facilities in NZ or off-shore.
Figure 6: Export revenues for the NZ Avocado industry

Avocado export earnings have grown 10% p.a.

in the last 10 years making it one of the fastest 140

growing primary sector exports. Whilst domestic

120
consumption is expected to expand, most of the
future growth in demand is expected to come
100
from fresh product being exported to Australian,
Chinese and Asian markets. Market access into
Export Value ($m)

80
China has just opened up alongside large scale
exporters Mexico, Peru and Chile. 60

There are an estimated 1,500 avocado growers

40
in New Zealand, and of these growers around
1,000 are registered with NZ Avocado. The
20
industry produces c. 5.6 million trays (c. 31,000
tonnes) of fruit. 0
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Of the estimated 1,500 growers, 60% are less
than 2.5 cha. Larger and commercially focused
Australia Japan South Korea
orchards greater than 10 cha account for 3%
Thailand Singapore Other
of orchards but make up over 20% of cha.
Production on the 3,800 cha of New Zealand
avocado orchards averages 11.5 tonnes or
2090 trays per ha. Figure 7: New Zealand Avocado export value by
country (three year average)
The largest region for avocado production is the
Bay of Plenty which accounts for around 65% of
production. Over the last five years, yields in the Australia 83%

Bay of Plenty have averaged 8.4 tonnes/ha with

Japan 3%
annual variation ranging from 2.5 tonnes/cha to
12.2 tonnes/cha. By comparison, over the same
South Korea 5%
period, the Far North has averaged nearly 9.3
tonnes/cha with annual variation of 7.1 tonnes/ha
Thailand 4%
to 11.3 tonnes/ha. Commercially focused growers
Singapore 2%
are achieving crop yields of 18.5 tonnes/cha up
Other 3%
to 25 tonnes/cha.
In the next five years, it is expected that a
further 1200 cha of avocados will be planted in
New Zealand and these plantings plus yield gains
on existing orchards could result in industry Source: NZ Avocados, Statistics New Zealand

35
KAKARIKI FUND INFORMATION MEMORANDUM
AROMA HOPS
• Kakariki’s Operational Partner in hops is
Hop Revolution, a company that, like Rockit
Global, is looking to emulate the Zespri
SunGold™ model
• International growth in craft beer consumption
has lifted the demand for New Zealand’s
speciality hop varieties and Hop Revolution
has secured the rights to grow licenced
New Zealand hop varieties and the plant
material to produce these and other
non-licenced New Zealand varieties
• New Zealand hop varieties have received
significant price premiums because
they possess unique flavour and aroma
characteristics, are spray free and in
short supply
• Hops supplied to Hop Revolution are expected
to achieve an OGR of around $53,000/cha
based on average yields of 1,700 kg/cha
and an OGR price of $30/kg
• Hop gardens are costly to develop because
expensive post harvest infrastructure has
to be built within the garden and there is a
very narrow harvesting window and a rapid
processing requirement. All varieties mature
in March and each has a narrow window in
which their hops must be picked
• Hop gardens cost around $225,000-250,000/
cha to buy and develop and are expected to
provide a pre- tax return on investment of
around $33,000/cha (15% p.a.)
• The scale of an efficient hop garden is dictated
by the expense and capacity of picking and
drying equipment. A picker, drier and building
to house them cost around $2.8 million and
can process the hops from around 50 cha
(which costs a further c.$3 million to develop)
• The start-up nature of Hop Revolution makes
investment in hop production relatively high
risk. Accordingly, Kakariki intends to make just
one investment in hop production until Hop
Revolution has a track record of performance
• Hops take only two to three years to reach
maturity and this rapid rate of development
means that full profitability is reached in the
second year of operation, and it is a quick and
low cost process to switch between varieties
36
Industry Overview
Based in Nelson, the New Zealand hop industry
is small and vertically-integrated.
New Zealand is a niche producer of hops and
accounts for less than 1% of global production.
It currently produces around 1,000 tonnes of
hops each year, but this is forecast to double
by 2025. The majority of production (85-90%)
is aroma and speciality hops of which 80-85%
is exported.
With the exception of new entrants Freestyle
Hops and Hop Revolution, the industry
comprises around 27 mostly small scale
growers who own and supply through the
co-operative NZ Hops Ltd.
While the New Zealand hop industry is now
deregulated, it has continued to operate as
a grower- controlled seller and exporter of
New Zealand hops. NZ Hops Ltd sells most
of its hops through international hop
merchants and some directly to local
and international brewers.
In contrast, Hop Revolution believes that a
more direct route to market with a branded
product will enable it to achieve higher price
premiums for New Zealand varieties.
Accordingly, it plans to contract directly with
select craft breweries in the US and elsewhere.
International growth in craft
beer consumption has lifted
the demand for New Zealand’s
speciality hop varieties and
Hop Revolution has secured
the rights to grow licenced
New Zealand hop varieties and
the plant material to produce
these and other non-licenced
New Zealand varieties.
Figure 8: New Zealand Hop Production and Area Figure 9: US Prices for Imported Hops (three-year average)

$20 New Zealand

South Africa
$18 Canada
900 600 $16 Australia Belgium
800
500 Czech Republic
Production (tonnes)

700 $14 Slovenia

France
Price cif US$/kg
Area (hectares)

600 400 $12 United Kingdom

500
300 $10
400
300 200 $8
Germany
200 $6 China
100
100
$4
0 0
2011

$2
2003
2004
2005
2006
2007
2008
2009
2010

2012
2013
2014
2015
2016
2017
2018

$0
500 -

1000 -

1500 -

2000 -

2500 -

3000 -

3500 -

4000 -

4500 -

Producing area (RHS)

Production (LHS)
Cumulative tonnes

Source: International Hop Growers Convention Source: dataweb.usitc.gov

37
KAKARIKI FUND INFORMATION MEMORANDUM
PLANTATION MANUKA (MANUKA
HONEY AND CARBON CREDITS)
• Kakariki intends to invest in plantation
manuka to provide the nectar that bees use
to produce high value manuka honey and the
carbon credits that it needs to meet Kakariki’s
objective of being carbon neutral
• Kakariki's Operational Partner, Comvita, has
bred plant varieties that produce high volumes
of nectar that are high in dihydroxyacetone
(DHA), the precursor to methylglyoxal (MGO)
the active ingredient in manuka honey
• Once they are mature, manuka honey from
manuka plantations is expected to provide
an OGR of around $2,100/cha (31kg of honey
at an average price of $69/kg)
• Expansion of plantation manuka is currently
restricted by a lack of trees for planting.
However, through MyFarm, Kakariki has a
heads of agreement with Comvita for the
supply of plants sufficient to plant 2,000 cha
in 2020
• Kakariki intends to take up this allocation
and enter into a share farming agreement
with Comvita for plantation development and
the provision of apiary services. To this end,
Kakariki will look to purchase 2,000 cha of
central North Island hill country sheep farms
before June 2020
• On this type of farm, plantation manuka is
expected to be materially more profitable
38
New Zealand manuka honey
has transitioned from being
a low-grade honey produced
from the nectar of a widespread
weed, to being the most
valuable honey in the world
and one that is now beginning
to be produced from the
only plantations in the world
dedicated to nectar production
for honey.
than the next best land use, and Kakariki
expects to benefit from higher profits related
to land use change
• Under the terms of the share farming
agreement with Comvita, the OGR to Kakariki
from a mature stand of manuka is expected
to be around $850/ha. This level of income
is expected to provide Kakariki with a pre-tax
return on investment of around 13%
• Manuka takes about six years to reach
maturity in terms of nectar production,
which is the main source of revenue
• Carbon credits (NZUs) are expected to be a
secondary source of income. Participation in
the New Zealand Emissions Trading Scheme
(ETS) is contingent on manuka reaching a
height of 5m
• It is expected that carbon emissions from
1 cha of Kakariki’s orchard investments will be
offset by the carbon sequestered by 1 ha of
plantation manuka. These off-setting carbon
credits will be retired rather than sold to
achieve carbon neutrality
• The large scale of manuka plantations
compared with the orchards Kakariki will
invest in, is expected to limit the amount of
income foregone by retiring carbon credits
• The cost of Kakariki’s investments in
plantation manuka is expected to be
materially reduced by government grants
via its Billion Trees programme
 KAKARIKI FUND INFORMATION MEMORANDUM

• Under this programme grants from the
Provincial Growth Fund of up to $2,300/ha
are payable to a maximum of 300 ha
per plantation
• Provided terms remain the same these grants
are expected to fund 16% of the total cost of
acquiring and developing Kakariki’s manuka
plantations and materially increase the level
of returns on the money Kakariki invests
Industry Overview - Manuka Honey
In the space of about 30 years, New Zealand
manuka honey has transitioned from being a
low-grade honey produced from the nectar of
a widespread weed, to being the most valuable
The premium that has been paid for
New Zealand honey reflects manuka honey’s
unique points of difference, and the product and
brand development efforts, and marketing that
New Zealand honey companies have undertaken.
With supply growth running at 8%, the
New Zealand industry is struggling to keep up
with double digit demand growth. The largest
producer, Comvita, expects to grow its supply
base using plantation manuka.
Figure 10: Value and Volume Comparisons of the Top
13 Global Honey Exporters
35

Average export price (USD/kg)

honey in the world and one that is now beginning 30 Size of the bubble
equals export value (USD)
to be produced from the only plantations in the 25 A
world dedicated to nectar production for honey. 20
15
This transition relates to the remarkable
10 D
antibacterial and healing properties of manuka C E
B L
5 F J K M
honey. These properties include the ability to kill I G
0 H
bacteria that have become resistant to antibiotics 25 50 75 100 125 150
(superbugs) and the ability to assist in healing Export volume (kg. m)
difficult wounds such as burns and ulcers.
A: New Zealand H: Hungary
New Zealand manuka honey stands out from B: Canada I: Poland
C: Belgium J: India
all other competitors. Its superior quality, D: Brazil K: Ukraine
E: Germany L: Argentina
trustworthiness, brand power and unique F: Spain M:China
anti-microbial attributes mean there has been G: Mexico
little direct competition. Most of the competitive
pressure has been from other competing Figure 11: Relationship between Plantation Manuka
health and wellness products rather than other and DHA Concentrations
producers of honey.
18,000
Globally, most honey is still produced and
DHA normalised to 80 ˚Brix (mg/kg)

16,000
consumed within the same market. Global
14,000
import demand is estimated to be around
USD2.2 billion. The largest import markets are 12,000

the USA (26%), Germany (13%), United Kingdom 10,000

(6%), Japan (6%) and France (6%). The top 8,000
20 import markets account for 91% of global
6,000
import demand. New Zealand has high import
4,000
penetration into Singapore, Hong Kong, Australia,
China and Malaysia. 2,000

The largest exporters of honey are China, 0

Argentina, Germany and Ukraine. Most of the Generation 2 plantation Manuka

product sold by these exporters has been Generation 1 plantation Manuka
significantly lower value than New Zealand Wild Manuka varieties
honey, with an average export price of
Source: MyFarm, Comvita
USD$3-4/kg, compared to a New Zealand
average of USD$28/kg for all types of honey.

39
KAKARIKI INFORMATION MEMORANDUM

Industry Overview – Carbon Credits
The New Zealand emissions trading scheme (ETS)
aims to reduce New Zealand’s contribution to the
level of greenhouse gases in the atmosphere.
The scheme uses carbon credits to impose a cost
on businesses that emit greenhouse gases and
to reward land-owners for planting trees that
sequest carbon dioxide. Forests act as carbon
sinks. They do not offer a permanent solution to
reducing emissions, but can buy time to adjust to
a carbon-constrained world.
The currency of the ETS is the New Zealand Unit
From a carbon credit perspective, there are a
number of factors favouring the establishment
of manuka plantations. These include:
• A higher medium-term direction for the price
of carbon;
• An increasing array of financial and other
incentives to plant trees, and;
• ETS accounting rules for forestry that deliver
greater liability-free emission units
Figure 12: New Zealand Carbon Price

(NZU). The NZU equates to a tonne of carbon

25
dioxide equivalent greenhouse gas.
Through the ETS, the government incentivises 20
landowners to plant trees by giving them NZUs
(in proportion to the carbon dioxide their trees $/t C02 15

sequest) which they can sell for cash on the

10
secondary market.
Similarly, the Government incentivises 5

businesses and industries that emit carbon

0
dioxide to adopt cleaner technologies or more
Mar 09 -
Aug 09 -
Jan 10 -
Jun 10 -
Nov 10 -
Apr 11 -
Sep 11 -
Feb 12 -
Jul 12 -
Dec 12 -
May 13 -
Oct 13 -
Mar 14 -
Aug 14 -
Jan 15 -
Jun 15 -
Nov 15 -
Apr 16 -
Sep 16 -
Feb 17 -
Jul 17 -
Dec 17 -
May 18 -
Oct 18 -
Mar 19 -
efficient production systems, by requiring them
to purchase NZUs to the level of their carbon
dioxide emissions. Source: MyFarm, ANZ, Bloomberg

The ETS has been designed as an all sectors,

all gases scheme to ensure it can affect as
many emissions sources as possible. Even
though agricultural emissions are yet to be The ETS has been designed as
included, New Zealand is the only country in
the world to opt for such a comprehensive an all sectors, all gases scheme
coverage of emissions under an ETS. to ensure it can affect as many
Participation in the ETS is mandatory for emissions sources as possible.
anyone who undertakes an activity that emits
greenhouse gases. With plantation manuka,
the responsibility for emissions from
deforestation or claiming credits from
afforestation rests with the landowner.
The price of NZUs has recovered from a steep
decline in value in the two years to 2013 and is
expected to increase materially in coming years.
The price recovery is due to a ban on the use of
international emission units in the 2014 to 2015
period and a phased removal from 2017 of free
emission provisions in the ETS.
Research by the Productivity Commission
indicates that a price in excess of $75/NZU
(or even as high as $200/NZU) will be required
to shift to a low-emission economy.

40
 KAKARIKI INFORMATION MEMORANDUM

WINE GRAPES • While Marlborough sauvignon blanc

dominates the New Zealand wine industry,
• Vineyards have the lowest OGR (c.$21,000/
Kakariki will also consider investing the
cha) of any of the horticultural permanent
production of sauvignon blanc in areas like
crops currently being considered by Kakariki,
Hawke’s Bay, and investing in other wine grape
and the lowest return on investment
varieties where appropriate arrangements
• Vineyards can be developed for around can be made
$150,000/cha and at this price provide a
Industry Overview1
EBITDA return of 8-10%
Total New Zealand wine exports have grown
• Wine grapes are New Zealand’s third largest
strongly since the early 2000s to sit around
horticultural crop, and along with aroma hops,
$1.7 billion (FOB) per annum today. The main
they can provide Kakariki with investment
export markets are North America, the United
exposure to premium products in the
Kingdom and Australia.
beverage sector
Marlborough sauvignon blanc is internationally
• Vineyards that aren’t directly owned by a
recognised and acclaimed, and is the mainstay
winery are typically leased by a winery or
of the New Zealand wine industry which is
grown under contract to a winery to the
focused on production of high-quality,
winery’s specifications
premium-priced wines.
• Individual wineries have many of the
While small by global standards, the industry
investment attributes that Kakariki is looking
is growing rapidly and this growth is also
for, including vertical integration, branding,
centred on new plantings of Marlborough
provenance, a sophisticated premium priced
sauvignon blanc.
product, experienced Operational Partners
and a large well organised industry structure The Marlborough region is consistently ranked
as one of New Zealand’s sunniest and driest
• Most grower contracts provide for a yield of
regions, and the combination of a cool climate
12 tonnes/cha with the option to take further
with high sunshine hours, low rainfall and
grapes at the winery’s discretion. Yields are
free-draining and moderately fertile gravel soil
typically restricted to 12 tonnes in order to
produces extravagantly forceful, fruity style
provide the winery with higher quality grapes
sauvignon blanc wines.

1 Sources: ANZ Agri Focus, June2016 and New Zealand Winegrowers

Annual Report 2018

41
KAKARIKI INFORMATION MEMORANDUM
Wine experts describe Marlborough sauvignon
blanc as a crisp, elegant, and fresh white wine.
Because it is produced in a cooler climate,
Marlborough sauvignon blanc wines have a
noticeable acidity and green flavours of grass,
green bell peppers and nettles with some
tropical fruit (such as passion fruit) and floral
(such as elderflower) notes. These flavours come
from aromatic compounds called pyrazines and
are the secret to sauvignon blanc’s taste.
Since it came on the international scene in
the 1980s, Marlborough sauvignon blanc has
become world famous and it is considered
the benchmark for bold, vigorous, pungently
herbaceous sauvignon blanc.
In the year to June 2018, sauvignon blanc
accounted for 73% of New Zealand’s annual
wine production and 86% of total export sales.
Out of a total of 37,969 ha of grapes of all types,
23,102 ha (60%) are planted in the sauvignon
blanc variety.
During the nine years to 2018, the area
producing sauvignon blanc in New Zealand
increased by 43% to 23,102 cha. Over the same
period, plantings of all other varieties decreased
by 892 cha (13%).
New Zealand’s grape crush increased by 67% to
296,573 tonnes and 93% of this increase was
from sauvignon blanc.
There is now only 5,000-6,000 cha of suitable
land left on which Marlborough sauvignon
blanc vineyards can be developed and water
is over-allocated in many of Marlborough’s
sub-catchments.
Near-term investment in developing
Marlborough sauvignon blanc supply is
expected to continue. Its market appeal, the fact
that large multi-national wineries are using it
as a key part of their overall product offering to
retailers, the biophysical conditions of the region
being well suited to growing sauvignon blanc,
available development margins and it being the
hub of the sector’s infrastructure and expertise
support the case for further investment.
Larger corporate wineries have driven a more
integrated supply chain helping smooth export
returns. As the industry has matured there has
also been more active crop management to
ensure steady returns.
42
There has been a meaningful lift in sauvignon
blanc grape growers’ pricing over the last
nine years. The average price was $1,220/t
in the 2010-2012 period, but over the past
several years the price has lifted into the
$1,700-$1,800/t range. While export wine
prices have been flat the domestic supply/
demand picture for sauvignon blanc has
tightened with a strong export performance
and supply growth plateauing in the high
200,000 tonne range in recent years.
Looking ahead it is expected there will continue
to be slowing supply growth for Marlborough
sauvignon blanc as greenfield development
decelerates with further market share gains
in established markets, new opportunities in
Asia and continued supply chain improvement.
This is expected to bode well for export/grape
prices, especially over the long-term.
Figure 13: New Zealand Wine Destinations and Volumes
325
300
275
250
225
200
Litres (m)
175
150
125
100
75
50
25
0
94 96 98 00 02 04 06 08 10 12 14 16 18
Domestic UK US Aus Other
Source: MyFarm, NZ Winegrowers, Statistics NZ
Since it came on the
international scene in the 1980s,
Marlborough sauvignon blanc
has become world famous and
it is considered the benchmark
for bold, vigorous, pungently
herbaceous sauvignon blanc.

SWEET CHERRIES
• Cherries are a high value niche product that
New Zealand supplies to Asia over Chinese
New Year
• Hong Kong, China and Taiwan currently pay
$18- 22/kg for New Zealand cherries and
these markets account for around 70% of
New Zealand export earnings from cherries
• Kakariki’s investments in cherries will be
focused on the Central Otago region which
has favourable growing conditions for
cherries and has consistently produced
fruit that is firmer, fresher, sweeter, and of
the highest quality
• At around $100,000/cha, current OGRs for
cherries rival returns for SunGold™ kiwifruit.
Orchard operating costs are also very similar,
but the cost of developing a cherry orchard is
only about a quarter of the cost of developing
a SunGold™ kiwifruit orchard
• As a consequence of the relatively low cost
of developing a cherry orchard, the EBITDA
return on investment from a mature cherry
orchard is expected to be very high at
around 20-30% p.a
• These high returns come with high risk, and
it takes a long time for a new cherry orchard
to reach full production. These risks relate to
difficulties in achieving consistent production
of export quality cherries, labour availability/
KAKARIKI INFORMATION MEMORANDUM
cost, market risk due to concentration on the
Chinese New Year and short shelf life
• Cherries are susceptible to damage by birds
and weather at critical times (frosts, heat and
rain). These risks can be mitigated by the use
of bird netting and sprinklers. Risk can also
be mitigated by the fact that 75% of orchard
operating costs are related to the cost of
picking and post-harvest services. In the
event of a crop failure these costs would
not be incurred
• It takes six years before a new cherry orchard
produces enough fruit to make a profit and a
further three years for it to reach full maturity
• The level of Kakariki’s investment in cherry
orchards will be a function of the overall make
up of its investment portfolio, and the need
to balance high returns against the high risk
profile and a long development time
Industry Overview
New Zealand’s cherry sector is very small.
It produces just 0.1% of global production and
accounts for only 0.5% of international trade.
Its particular niche is an ability to supply
high-quality fresh cherries for the main festive
season in Asia – Chinese New Year. For this
seasonal window there are only four southern
hemisphere producers that can service this
market, with only Chile and Australia offering
any real competition.
43
KAKARIKI INFORMATION MEMORANDUM

The vast majority of New Zealand’s cherry
production is of sweet varieties. Sweet cherries
can be eaten fresh or used as a main ingredient
or flavour in a range of cooked foods or
beverages. In New Zealand’s case, 80-85% of
production is exported fresh with the majority
(90%) destined for Asian countries that celebrate
Chinese New Year.
In these countries, fruit is sold through a mix
of modern and traditional platforms including
high-end retail (i.e. gift, souvenir, and duty-free
shops) and e-commerce channels.
New Zealand cherry suppliers are heavily reliant
on the Chinese market. Other key Asian markets
include Thailand and Vietnam where new young
consumers, with growing levels of disposable
income, are increasingly drawn to luxury items
like New Zealand cherries and SunGold™
kiwifruit. Despite increasing export volumes from
Export Value ($m)
Due to the rapid turnaround time, most growers
are vertically integrated with a packhouse and
exporter. There are capacity constraints on air
freight that have begun to emerge with
the sector’s growth.
Central Otago is considered the premium
growing region due to its very hot, dry and
low humidity climate at the right times of
the year. Cherries also require a very free
draining, fertile and pH neutral soil, making
site selection important.
Figure 14: New Zealand’s Major Cherry Markets
90
80
70

Chile and New Zealand, average export prices 60

have risen since the early 2000s, increasing by 50
4% per annum over this period. Over the last
40
three seasons, returns have plateaued in the
30
$20-21/kg range.
20
New Zealand, Chile and Australia are effectively
the only regions able to supply cherries to Asia 10

for the Chinese New Year period and despite 0

2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
a significant price premium, demand for
New Zealand cherries at this time is high.
Taiwan China Thailand Vietnam
There is little direct competition from other Hong Kong South Korea USA Other
southern hemisphere producers, who have
traditionally been more commodity focused, Source: MyFarm, Statistics NZ

and northern hemisphere growers haven’t

been able to produce or store cherries to
sell at that time of the year.
Compared with other types of fresh fruit exports
from New Zealand to the Greater China region, There is little direct competition
the market penetration of cherries is low at 4%.
Chile is by far the main competitor accounting from other southern hemisphere
for 75-80% of southern hemisphere production, producers, who have traditionally
most of which (70-75%) is exported to China in
the December to February period.
been more commodity focused,
Cherries have a short shelf life and require
and northern hemisphere growers
a supply chain which can deliver top quality haven’t been able to produce or
products to key markets rapidly. The turnaround
from picking to market is 3 to 4 days, with shelf
store cherries to sell at that time
life of approximately 4 weeks. of the year.

44
 KAKARIKI INFORMATION MEMORANDUM

Figure 15: Sweet cherry production by hemisphere

Northern 95%

Southern 5%

Figure 16: Southern hemisphere cherry exports by value

Chile 88%

New Zealand 5%

Australia 5%

Argentina 2%
South Africa <1%

Figure 17: Value of Southern hemisphere cherry exports

by destination

China 76%

Hong Kong 4%

Taiwan 4%

South Korea 2%
Other 3%

Europe 3%

North America 5%
South East Asia 1%
Thailand 1%
Vietnam 1%

45
KAKARIKI FUND INFORMATION MEMORANDUM
Profiles of the partners who will
contract to Kakariki for the provision
of operational, post harvest and
marketing services.
COMVITA LIMITED
Overview of Comvita
Comvita is New Zealand’s only listed natural
healthcare company. It has a current market
capitalisation of $160 million, has an annual
turnover of around $200 million and employs
more than 450 staff in New Zealand and
overseas. Its core business is the supply of
manuka honey products principally to China,
North America and the UK.
Comvita has been a member of the Unique
Manuka Honey Factor Associaton (UMF®HA)
since it was founded 21 years ago. Only
members whose honey meets UMF®HA
standards can use the UMF® trademark.
Comvita accounts for approximately 50%
of all honey with the UMF® trademark.
With 35,000 hives, Comvita is one of
New Zealand’s largest beekeepers.
Products
Comvita’s product range is predominantly bee
based and provides benefits related to immune
support, digestive health, skin and oral health,
and nutrition. Products include or are derived
from honey, propolis, bee pollen, and other
natural ingredients such as Olive Leaf Extract.
Comvita pioneered the development and use of
medical grade manuka honey. It exports medical
grade manuka honey for use in wound dressings,
and markets wound dressings in New Zealand
and around the world under the Medihoney®
brand. Its products are found on retail shelves
around the globe.
46
Supply
Comvita has a strategy of being fully vertically
integrated. This means sourcing as much
manuka nectar as it can from plantations that
it develops and manages under long-term land
use agreements, then converting that nectar to
manuka honey using its own bees.
In 2008 Comvita purchased its apiary subsidiary,
Kiwi Bee, and commenced its manuka plant
breeding programme. Kiwi Bee has seven
beekeeping branches spread throughout
New Zealand’s North Island.
Today around 40% of Comvita’s manuka
honey supply comes from its own production.
A similar amount comes from preferred supplier
arrangements with apiarists, and the balance is
bought on the spot market.
Comvita has a strong relationship with its
suppliers through a dedicated specialist sourcing
and purchasing management team.
Markets and Marketing
Comvita has in-market sales operations in New
Zealand, Japan, Australia, Hong Kong, UK, US
and Korea. All its offshore markets are operating
profitably and in the last financial year, sales
of manuka honey increased by 54%. China is
Comvita’s key market accounting for around 60%
of its sales.
Demand from China has resulted in double-
digit sales growth in recent years and this rate
of growth is expected to continue as Chinese
incomes rise.

One of Comvita’s strategic goals is to achieve an
eastern/western market balance to its sales mix.
To this end it has been working to grow its sales
in the UK/Europe and North America. Sales to
North America have increased to nearly
$27 million, driven by sales to Costco and strong
performance in Amazon’s e-commerce platform.
Strategic
Comvita’s recently released strategy is to build
on its early leadership position in manuka
honey and propolis. This is expected to result
in a leaner, more focused business with lower
overhead costs. Comvita will also be increasing
marketing expenditure in support of the Comvita
brand in all key markets.
To ensure supply, Comvita has invested heavily
over 14 years in manuka plant breeding
programmes and will continue to invest in
long-term land use agreements.
Agreements between Kakariki
and Comvita
Kakariki’s investments in plantation manuka will
be operated under the terms of a share farming
agreement with a Comvita subsidiary Kiwi Bee.
KAKARIKI FUND INFORMATION MEMORANDUM
Under this agreement, called a Long-Term Land
Use Agreement, Kakariki will provide the land and
manuka seedlings (sourced from Comvita) and
meet the costs of establishing and maintaining
tracks and fences, and 50% of pest control costs,
in return for 35% of the manuka honey revenue
plus the carbon credits for the first five years.
After this period, Comvita will receive 20% of the
carbon credits produced.
For its part, Kiwi Bee will manage and meet the
costs of plantation establishment and provide
and pay for all apiary costs.
Additionally, Kiwi Bee will pay hive set-down
fees during the first five years of plantation
development, and these payments are expected
to ensure that Kakariki’s investment in plantation
manuka will pay distributions from the outset.
The hive set-down fee is the greater of 5% of the
cost of buying and developing the property or
35% of the value of the honey produced.
Subject to the purchase of a suitable property,
Comvita has undertaken to supply seedlings and
enter into a Long Term Land Use Agreement
for the development of 2,000 cha of plantation
manuka for planting in 2020.
47
48

HOP REVOLUTION LIMITED
Overview
Hop Revolution was formed in 2014 by plant
scientist, Dr Susan Wheeler. Two years later
she was joined by the late Terry McCashin,
the founder of Macs and Stoke Breweries.
The company’s initial aim was to determine
whether it was economically viable to grow hops
in other parts of New Zealand apart from Nelson.
Once this was established, the company’s focus
shifted to securing licences to New Zealand
hop varieties covered by PVRs held by Plant
and Food, and acquiring and developing land
for growing.
These licences are for an initial area of 188 cha
of varieties of Hop Revolution’s choice, increasing
to a maximum area of 675 cha in 2022 subject to
threshold levels of annual up-take.
Hop Revolution wants to operate independently
of NZ Hops Ltd and provide its growers with
high OGRs. It plans to achieve this by
contracting directly with craft brewers in
the US and then elsewhere.
Hop Revolution will draw on the experience
and success of Zespri with SunGold™ kiwifruit,
and Rockit Global with Rockit™ apples.
Fundamental to the success of Zespri and
Rockit Global has been their control over global
supply through ownership of PVRs. While Hop
Revolution does not have control over the supply
of New Zealand hop varieties, it plans to have
a large measure of control over its growth in
supply of these varieties.
The PVRs for New Zealand hops have limited
time to run. When varieties come off licence,
anybody is free to grow them commercially.
KAKARIKI FUND INFORMATION MEMORANDUM
Hop Revolution intends to place a strong
emphasis on working with its craft brewer
customers to develop new hop varieties for
which it will have global supply rights.
Through its syndication initiative with MyFarm
and contractual arrangements with other
growers, Hop Revolution plans to significantly
expand production of New Zealand hops over
the coming years.
These plans include expansion beyond the
Nelson region. In particular, research indicates
that hops will grow well in Gisborne, Canterbury,
Central Otago and the Hawke’s Bay.
Hop Revolution should provide Kakariki with
on- farm development and management
services, cool- storage and pelletisation
services, and marketing, distribution and
plant breeding services.
Agreements between Kakariki
and Hop Revolution
Kakariki’s option to invest in the proposed
Hop Syndicate, and any additional investments
it makes in hop gardens, will be managed by
Hop Revolution. Hop Revolution will also be
responsible for garden development and
processing and marketing the hops that
are produced.
Subject to the success of the Offer, the syndicate
will enter into a number of material contracts
with Hop Revolution in relation to the supply
of plant material and licenses, orchard
development and management, the coolstorage
and pelletisation of hops, plant breeding and
marketing and distribution.
49
KAKARIKI INFORMATION MEMORANDUM
FRESHMAX LIMITED
Overview
Freshmax operates a vertically integrated
fresh produce business that intermediates
between growers and retailers. It has one
of the largest fresh produce marketing and
distribution operations in the Pacific region.
Its vision is to become the leading Southern
Hemisphere diversified fresh produce business.
Its intermediary activities encompass:
• Direct to Retail Supply (Category Management)
• Wholesale Supply
• Export
• Import
• Distribution
• Ripening and value added services
Freshmax maintains a strong role and presence
in Australian and New Zealand domestic markets,
and also invests heavily in its global infrastructure
and trade network. Its product range includes
apples and pears, citrus fruits, melons, stone
50
fruits, avocados, berry fruits, subtropicals,
kiwifruits, and bananas; glasshouse products,
such as tomatoes, capsicums, cucumbers, and
eggplants; and vegetables, including asparagus,
sweetcorn, courgettes, and onions.
Background
Freshmax was founded in New Zealand in 1995
and is still headquartered in New Zealand. Since
2006 Freshmax has been registered in Australia.
Freshmax has regional platforms in Australia,
New Zealand, the United States, Canada,
and Peru.
Maui Capital currently owns 60% of Freshmax.
The balance of shares is held by Freshmax
management in Australia and New Zealand.
Since 2006 Freshmax has invested heavily in
Australia and become one of the most diverse
national fresh produce companies in the country.
In 2014 Freshmax became a major shareholder
in Valley Fresh, a large internationally-focused
produce business. That same year it also
rebranded its Australian interests under the
 KAKARIKI INFORMATION MEMORANDUM

Freshmax Australia banner and acquired Agreements between Kakariki and

Crasborns in New Zealand, one of the country’s
largest apple growers, packers and exporters.
New Zealand Operations
Freshmax’s New Zealand business is focused
on pipfruit. Its integrated supply chain allows it
to oversee all operations within the production
process, including growing, harvesting, packing
and cool storage, shipping and marketing.
Freshmax leases, manages or owns 500 cha
of pipfruit and summer fruit orchards, and
operates 20 ha of pipfruit postharvest facilities
through its subsidiary Crasborn Fresh Harvest.
Freshmax currently supplies 1.5 million cartons
of New Zealand apples, the majority of which
(76%) is produced on 500 cha under its
management control.
All of Freshmax’s New Zealand pipfruit orchards,
and their third party suppliers, follow the New
Zealand Apple and Pear Industry IFP and Apple
Futures programme. High growing standards are
matched with high post-harvest practices.
Freshmax
Kakariki’s investments in the production of a
range of permanent crops will be operated
by Freshmax under orchard management
agreements. These crops include apples,
avocados, cherries and berries.
The managed nature of these investments
mean that Kakariki will have to meet orchard
operating expenses throughout any particular
year, and receive most of the related revenue
the following year.
Kakariki will also enter into agreements
with Freshmax for post-harvest services
and marketing.

Freshmax Group Locations

Auckland
Tauranga
Hastings
Bundaberg
Vancouver Nelson Wellington
Brisbane

Christchurch
Sydney

Melbourne

Freshmax Company Structure

N&S AMERICA/ IP & VARIETAL

NEW ZEALAND AUSTRALIA SOUTH AFRICA MANAGEMENT

Freshmax NZ/ Freshmax AU/ Valleyfresh

Valleyfresh NZ
International Export/Import
Wholesale Supply
Direct to Retail Supply
Distribution
Value Added Services
Packhouses/Growing
IP Management
Innovar™
DBM/Valleyfresh Global
International Export/Import International Export/Import IP Management &
Wholesale Supply Direct to Retail Supply Commercialisation
Direct to Retail Supply IP Management Brand Development
Value Added Services Trademark Management
Packhouses/Growing
IP Management

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KAKARIKI INFORMATION MEMORANDUM

ROCKIT GLOBAL LIMITED

Overview Agreements between Kakariki and
Rockit Global
The Rockit Global is a Hawke’s Bay-based apple
exporter and marketing company. Kakariki’s investments in Rockit™ apple orchards
will be subject to the supply of trees and licences
The Rockit Global has positioned Rockit™
from the Rockit Global. Rockit Global will also
apples as a premium product. Its priority is to
manage Kakariki’s Rockit™ orchard investments
continue building strong relationships with key
and pack, store and market the fruit that is
high-end retailers, and build the supporting
produced.
supply chain back through to licensed growers.
Its New Zealand supply area is 248 cha and Subject to the success of the Offer, Rockit Global
it also has licenced growers in the UK, USA, has agreed to give priority to supplying Kakariki
Australia, Belgium, Italy, France, Germany with Rockit™ apple trees and licences sufficient
and Spain. to plant 35 cha in 2020. The cost of the licence
is $2.63 million with $1.58 million payable as a
The Rockit Global retains full control over
deposit and the balance due at planting. The cost
planting volumes, distribution channels, markets,
of the trees is $1.55 million paid progressively up
and market volume allocations. It approves all
until the time of supply.
growers, distributors, importers and retailers.
It also sets the product and packaging quality
standards and specifications, as well as the
specifications for the use of all trade marks
used in connection with the fruit.

52
53
54

DMS PROGROWERS LIMITED
Overview
DMS Progrowers is a leading Bay of Plenty
kiwifruit and avocado orchard management
and post-harvest operator. It is locally owned
and operated and focused on providing services
aimed at increasing orchard productivity and
grower profits.
The DMS business was established in 1989
by its two executive directors, Craig Greenlees
and Paul Jones. It currently manages more than
100 orchards, has 105 full-time staff and employs
another 650-plus seasonal kiwifruit workers
during the annual harvest period. DMS has
administration offices in Tauranga and two
pack-house facilities, one in Te Puna and the
other at Te Puke.
DMS leases and manages about 550 cha
in the Bay of Plenty, making it one of the
largest kiwifruit management companies in
New Zealand.
Agreements between Kakariki
and DMS
Kakariki’s investments in any Bay of Plenty
kiwifruit orchards will be leased to DMS on
a profit share basis.
KAKARIKI INFORMATION MEMORANDUM
Kakariki intends to lease to DMS, for an
initial period, the two Opotiki orchards it has
conditionally contracted to purchase. Based
on precedent arrangements with MyFarm the
terms of the lease will involve a monthly rental
at the rate of $55,000/cha p.a. and a 85% share
of the profits remaining after DMS has recovered
its costs (growing costs, rent and a cost of
capital charge).
This rental flow together with the proceeds
from the 2019 crop will provide Kakariki
with significant cashflow during the first five
years. Beyond this period, the Kakariki Board
may choose to switch to a straight forward
management agreement for these orchards,
under which it would receive higher returns
but assume all of the risks.
In situations where Kakariki purchases land in
the Bay of Plenty for development into kiwifruit
orchards, DMS will be contracted to manage
the development.
Where kiwifruit orchards or land for development
into kiwifruit orchards is purchased outside the
Bay of Plenty, a new Operating Partner will have
to be sourced to replace DMS.
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KAKARIKI INFORMATION MEMORANDUM

SACRED HILL VINEYARDS LIMITED
Overview
Sacred Hill Marlborough Vineyards is a subsidiary
of Sacred Hill Vineyards which is a privately
held company. Sacred Hill Vineyards owns 76%
of Sacred Hill Marlborough Vineyards and the
remaining 24% is owned by Hong Kong based
Jebsen Group.
Sacred Hill Vineyard’s head office is located in
Hastings, alongside its winery. Built in 1995,
this winery manages winemaking of grapes from
the company’s Hawke’s Bay vineyards and has a
production capacity in excess of 2,000 tonnes.
In Marlborough, Sacred Hill Vineyards has
partnered closely with contract wine maker,
VinLink. The state of the art VinLink winery
ensures quality wine making on a
commercial scale.
Wines are sold under the Sacred Hill brand,
but the Sacred Hill Vineyard also has a portfolio
of brands that are well established in
New Zealand and overseas. The more
well-known of these include Gunn Estate,
Whitecliff, Wild South and Ti Point.
Sacred Hill Vineyard’s long term focus and
strategy is to grow the Sacred Hill brand around
the world. Its marketing team is based in Hawke’s
Bay, from where it manages the Sacred Hill
global brand strategy and works closely with
distributors in New Zealand and overseas.
The company is working toward a sales forecast
that is set to increase significantly in the next
10 years on the back of international demand
for New Zealand wine.
Working closely with its overseas distributors,
Sacred Hill exports both its own brands, and
brands it has developed with distribution
partners, to 15 export markets across the globe.
Its current export markets comprise Australia,
USA, Canada, UK, Ireland, Germany, Netherlands,
Denmark, Poland, Hong Kong, Singapore, China,
Thailand, Malaysia, and the Pacific Islands. It is
currently focused on further building its business
with multiple distributors in USA and Canada,
Asia and Australia regions.
All Sacred Hill vineyards and wineries, whether
owned, leased or contracted, are fully accredited
Sustainable Wine Growing New Zealand
(SWNZ) members.
Agreements between Kakariki and
Sacred Hill
Any Kakariki investments in vineyards are likely
to be leased to Sacred Hill Vineyards.
Based on precedent arrangements with MyFarm
syndicates, the rental for an established
sauvignon blanc vineyard is likely to be in the
range of 7-8% p.a. of the vineyard purchase
price or value.
Vineyard development by Sacred Hill Vineyards
is typically done under a conventional
management agreement in which the land
owner pays development expenses directly,
and pays the manager a development fee
for their services.

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KAKARIKI INFORMATION MEMORANDUM
MATERIAL CONTRACTS
Heads of Agreement with Comvita
MyFarm entered into a heads of agreement with
Comvita in 2016 for the ongoing development
and operation of new manuka plantations.
Pursuant to this heads of agreement, Comvita
has already entered into two Long Term Land
Use Agreements with a MyFarm syndicate.
Comvita has agreed that it will give priority to
supplying sufficient plants for MyFarm to plant
2,000 cha of plantation manuka in 2020, and
that it will look to enter into Long Term Land
Use Agreements in relation to those plantings,
on similar terms to the two existing agreements.
MyFarm has undertaken to the Kakariki Board
that it will use this undertaking by Comvita for an
investment by Kakariki. The Kakariki Investment
Committee has agreed that it will make an
investment using this plant material, subject
to the success of the Offer and its ability to
acquire suitable land.
The terms of the heads of agreement are
outlined in the profile on Comvita on page 47.
Heads of Agreement with RockitTM
Global
On behalf of Kakariki, MyFarm has negotiated a
heads of agreement with Rockit Global for the
sale and supply of licences and priority for the
supply of plant material sufficient to plant 35
cha of Rockit™ apples in 2020. The parties have
also agreed to work together in good faith to
make similar arrangements for a further 40 cha
in 2021. The heads of agreement is subject to
Kakariki entering into orchard development and
management agreements with Rockit Global as
well as supply agreements for the fruit that is
produced (see the profile on Rockit Global on
page 52 for details of these agreements).
As is the situation for plantation manuka, the
split timing of these plantings relates to the
availability of plant material.
The Kakariki Board has agreed to invest in these
licences and plants, subject to the success of the
Offer and its ability to purchase suitable land.
Rockit Global and MyFarm have agreed to work
proactively together to secure freehold or
leasehold land on which to plant the trees.
58
The price of the 2020 licences is $75,000/cha,
60% of which is payable in June 2019
($1.575 million), with the balance due in May
2020 subject to confirmation of tree supply.
The price of a licence in 2021 has not yet
been determined.
Under the heads of agreement, Kakariki will
also take on the nursery payment requirements
for the trees that it is purchasing.
Kakariki Fund Management
Agreement
Under the Kakariki Fund Management
Agreement, Kakariki appoints MyFarm to provide,
and meet its own cost of providing, all day-to-day
management, administration and operational
services. MyFarm has authority to deal with and
manage Kakariki as Kakariki’s agent in relation to
such activities.
MyFarm is also responsible for providing Kakariki
with Shareholder communications, company
secretarial, administration, financial control
and investment services. It will also advise on
compliance obligations. Investment services
include making investment and divestment
recommendations, monitoring the performance
of Kakariki’s investments, and arranging debt
and co-investment funding.
For the management services it provides
to Kakariki, MyFarm will receive an annual
management fee of 1.25% . The annual
management fee is payable monthly in advance
to MyFarm by Kakariki, and will be calculated
as a percentage of committed capital until
funds raised in this Offer have been fully paid.
Thereafter the annual fee will be based on the
opening market value of FUM.
MyFarm will use the management fee it receives
to meet its own operating expenses. It is
entitled to be reimbursed for certain third party
expenses it incurs on behalf of Kakariki, such as
specialised legal or financial advice as authorised
by the Kakariki Board.
MyFarm is also entitled to a profit share of
20% of annual profits in excess of a hurdle
rate of 10% p.a. The profit share is payable
in a combination of cash and Shares in
Kakariki (see: What Are The Fees on page 85
for further details).

Kakariki will be responsible for its direct
expenses including directors’ fees and expenses,
audit, legal and registry fees, and the costs of
printing and distributing the annual report and
accounts, and other third party costs associated
with communications with Shareholders.
MyFarm’s principal
focus will be the success
of Kakariki.
MyFarm’s principal focus will be the success
of Kakariki.
It is a term of the Kakariki Management
Agreement that MyFarm will offer Kakariki a
first right of refusal on any investment
opportunities it sources while Kakariki has
uncommitted capital.
Notwithstanding the above, MyFarm will continue
to be permitted to manage those farms and
other investments that it already manages on
behalf of its investors.
MyFarm will not otherwise be restricted from
promoting investment opportunities in
New Zealand or elsewhere, and, in this regard,
will keep the Kakariki Board fully informed of
their respective intentions. In addition, if Kakariki
declines to pursue an investment opportunity
presented to it by MyFarm, MyFarm will be
free to itself pursue that opportunity, including
through forming private syndicates.
The Kakariki Management Agreement will
continue in effect until Kakariki is liquidated,
unless terminated by MyFarm for any reason,
or terminated by the Kakariki Board for cause,
such as the occurrence of an insolvency event,
or material breach (including for material
non-performance).
The notice period for termination of the Kakariki
Management Agreement by MyFarm, without
cause, is three years.
MyFarm has the right to assign its interest in the
Kakariki Management Agreement after six years,
subject to Kakariki approval.
The Kakariki Fund Management Agreement also
covers the services that MyFarm is required to
provide to Investment Companies formed by
Kakariki to its own investment properties.
KAKARIKI INFORMATION MEMORANDUM
The cost of these services is additional to the
annual management fee and will be charged
for on a time and attendance basis.
Investment companies will accede to (become
a part of) the Fund Management Agreement
as and when they are formed.
The services to be provided to Investment
Companies include financial control, general
administration, financial control and
property supervision.
The budgeted cost of these services for an
Investment Company with an established
property is $50,000 p.a. plus disbursements.
For an Investment Company with a development
property, the budgeted cost increases to
$100,000 p.a. plus disbursements for the
first few years.
Purchase of Opotiki Kiwifruit
Orchards
On behalf of Kakariki, MyFarm has entered into
two conditional sale and purchase agreements
to purchase two kiwifruit orchards from the
same vendor. Both properties contain a house
that is rented, and the purchase includes the
proceeds from the 2019 crop.
One orchard is located east of Opotiki at 106
Beach Road, Tirohanga and comprises 3.38 cha
of SunGold™ kiwifruit. This orchard is under
contract for $3.9 million conditional on finance
and due diligence.
The other orchard is located west of Opotiki
at 1272C Waiotahi Beach Road and contains
6.24 cha of SunGold™ kiwifruit and 1.1 cha
of Hayward kiwifruit. This orchard is under
contract for $7.1 million conditional on
finance and due diligence.
The sale and purchase agreements for these
orchards include a 10-day out clause that the
vendor can invoke if they receive a better offer.
It is possible that this clause will be invoked
before Kakariki is in a position to go
unconditional. In this event Kakariki would have
to forego purchasing these kiwifruit orchards
and MyFarm would endeavour to syndicate
the orchards themselves.
59
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 KAKARIKI INFORMATION MEMORANDUM

6. Key dates and

offer process
27 May 2019 Offer Opens

Offer Closes – Applications and

26 June 2019 initial payment due ( $0.25/Share
applied for)

27 June 2019 Shares issued

Unconditional date for the purchase

28 June 2019
of Kiwifruit Orchards

Settlement Date for purchase

12 July 2019
of Kiwifruit Orchards

Conditional date to confirm

1 August 2019 purchase of land for hop garden
development

Applications will be accepted generally in the

order of receipt but Kakariki reserves the right to
accept any application and reject any application
at its discretion, and or extend the closing date.
Applications will not be received until MyFarm
has received:
a. a properly completed, signed application
form;
b. a properly completed, signed wholesale
investor certificate;
c. completed AML documentation;
d. a bank deposit slip; and
e. payment of the deposit in cleared funds.
With regard to (b), wholesale investor certificates
will be reviewed and you should take care to
ensure yours is properly completed.

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KAKARIKI INFORMATION MEMORANDUM
7. Terms of the Offer
INVESTMENT AMOUNTS
Price per Share $1.00
Minimum investment 100,000 Shares
The Offer is for 100 million Shares in Kakariki
at an issue price $1.00/Share. The minimum
investment is 100,000 Shares ($100,000)
and thereafter the level of investment can be
increased in multiples of 1,000 Shares.
Shares will be issued on a partly paid basis.
An initial payment of $0.25/Share applied for
is due at the time of application.
Share payment calls will be in increments and
multiples of $0.05/Share, or a final call of such
lesser amount needed to fully pay the Shares,
and subject to 30 days’ notice.
The maximum amount payable is $1.00 per
Share and no other payments are required to
be made other than those specifically agreed to.
There is a risk that you may lose some or all of
the money that you invest.
ELIGIBILITY
This offer is only open to investors who fall
within the exclusions applicable to offers made
to “wholesale investors” as set out in Schedule
1, clauses 3(2) (a)-(c) and 3(3)(a)-(b)(ii) inclusive of
the FMCA. Further details of this can be found
under Schedule 1 FMCA on page 94.
MAKING AN INVESTMENT
Complete the application pages at the end of
this Information Memorandum by 12 noon
on the closing date, 26 June 2019, including all
Anti Money Laundering and Counter Financing
of Terrorism Act (AML/CFT) requirements and
email a copy of all the documentation to:
Brett Delport (investments@myfarm.co.nz) or
fax a copy to the offices of MyFarm Limited
+64 6 323 0599, Attention: Brett Delport.
(Note: If the application is submitted through an
NZX broker with that broker’s stamp, the broker
will complete AML/CFT on behalf of MyFarm.)
62
Please post application and all supporting
documentation to:
MyFarm
Attention: Brett Delport
PO Box 91, Feilding 4740
OR by courier to:
MyFarm Investments Attention: Brett
Delport Level 1, 8 Manchester Square
Feilding 4740
Full instructions can be found in Section 14.
WITHDRAWALS
Applications can only be withdrawn prior to the
closing date of 26 June 2019. See cancellation
details on page 91.
Requests must be received in writing and
addressed to:
MyFarm
Attention: Brett Delport
PO Box 91Feilding 4740
NATURE OF INTEREST
This Offer is for ordinary Shares in Kakariki .
All Shares issued pursuant to this Offer will rank
equally with each other. Shares give you a stake
in the ownership of Kakariki. The Constitution
of Kakariki sets out the terms of the Shares.
In respect of the Shares issued in this Offer,
the right of Kakariki to call any amount uncalled
on the Shares will lapse three years after
the date of issue. You can find a copy of the
Constitution on the Companies Office website at
https://companies-register.companiesoffice.govt.
nz. You may receive a return if dividends are paid
or Kakariki increases in value and you are able
to sell Shares at a higher value than you paid
for them. If Kakariki runs into financial difficulties
and is wound up, you will be paid only after all
secured and unsecured creditors have been
paid. You may lose some or all or
your investment.

8. How Kakariki works
HOW KAKARIKI WILL BE MANAGED
Kakariki has a largely independent Board who,
together with a representative from MyFarm
and any invited co-investors, will act as
Kakariki’s Investment Committee. The only
non-independent Board member is Paul
Richardson who is also a director of MyFarm’s
parent company, AgInvest Holdings Limited.
The Investment Committee will receive
investment and divestment recommendations
from MyFarm, and make all investment and
divestment decisions. The Kakariki Board is
described on page 67.
The Kakariki Board has set Kakariki’s investment
policy and criteria, and will review the
performance of MyFarm from time to time
and report to Shareholders on the results of
this review. It will also review the capital
adequacy of the Company, be responsible for
Shareholder reporting and convene timely
Shareholder meetings.
Kakariki will not have an executive management
team or any staff. Day-to-day management
of Kakariki, including administration and the
investment of Shareholder capital, will be
undertaken by MyFarm in accordance with
policies and procedures agreed with the
Kakariki Board.
MyFarm’s role and responsibilities, and
remuneration for performing company and
investee management duties, are specified in the
Kakariki Management Agreement. As Investment
Companies are formed they will become a party
to the Management Agreement.
Under the Kakariki Management Agreement,
MyFarm agrees to provide investment sourcing
and business case development including all deal
specific due diligence, and services related to
procurement, cash management, administration,
investor communication, investment monitoring
and divestment. It will also provide services to
Kakariki’s Investment Companies.
Kakariki Management Agreement is described
on page 58.
KAKARIKI INFORMATION MEMORANDUM
HOW KAKARIKI WILL BE STRUCTURED
Kakariki is a limited liability company and will
have a number of limited liability subsidiary
Investment Companies to be formed –
one for each investment made.
Kakariki will function as a holding company
and be the sole shareholder in the Investment
Companies through which Kakariki’s investments
are effected. The Investment Companies will
be governed by one director from the Kakariki
Board, and one director from MyFarm.
In situations where Kakariki co-invests with
other parties, it is likely that the co-investment
will be made via a limited partnership structure
i.e. all co-investors, including an Investment
Company formed by Kakariki, will invest as
limited partners and a MyFarm subsidary
will be the general partner.
Each Share held by investors in this Offer will be
an ordinary voting share in Kakariki. In this Offer,
the Issuers will issue 100 million Shares plus
oversubscriptions of up to 100 million Shares
at an Issue Price of $1.00 per Share, paid up
on subscription to $0.25 per Share.
To fund investments, Kakariki will provide funds
to each Investment Company as required.
Until it is required for investment in an investee
business, subscription money received by
Kakariki will be held in interest bearing deposits
at a registered bank or equivalent, as approved
by the Kakariki Board. Debt funding will be
sourced directly into the Investment Companies.
Investment companies will distribute profits back
to Kakariki, and Kakariki will in turn distribute
these profits, less any amounts needed to offset
Kakariki operating costs, to its Shareholders via
quarterly dividend payments.
INVESTMENT PROCESS
All Kakariki investment decisions will be based on
MyFarm preparing a detailed investment case for
consideration by the Kakariki Board’s Investment
Committee. The investment case will include an
assessment of the market opportunity based on
63
KAKARIKI INFORMATION MEMORANDUM

research by MyFarm, extensive property, legal Any co-investment in an investment opportunity

and regulatory diligence, an assessment of risks, will likely be undertaken via a limited partnership
independent valuation and consultant reports, in which an Investment Company formed by
and an outline of the contractual terms with the Kakariki would be one limited partner,
chosen operational counterparty. and co-investors are likely to be the other
limited partners.
CO-INVESTMENT
In these situations, the general partner would be
In order to increase the size and diversity
a subsidiary of MyFarm that would enter into a
of its investment portfolio and spread
business management agreement that gave it
Kakariki overhead costs, Kakariki may seek
full control of the business.
co-investment in some of the investments it
makes. Participation by co-investment will be
subject to approval by the Kakariki Board.

INVESTORS
• Investors are shareholders
in Kakariki
• Distributions are made from
Kakariki to shareholders
• Shares are listed on Syndex

MANAGER
MyFarm
• Manager sources investments
and puts business case to
Kakariki Board
• Manager sources operational
counterparties to lease or
manage investments
• Manager administers Kakariki
and Investment Companies
KAKARIKI
Fund
Management • Kakariki Board makes investment
Agreement and divestment decisions
• Kakariki establishes Investment
Companies and provides equity
for each investment made
• Kakariki receives distributions
from Investment Companies

INVESTMENT INVESTMENT INVESTMENT INVESTMENT

Additional Investment
COMPANY 1 COMPANY 2 COMPANY 3 COMPANY 4
Companies formed
Kakariki Kakariki Kakariki Kakariki to acquire future
Kiwifruit Limited Rockit Limited Hops Limited Manuka Limited properties as and
when required.

OTHER
PROPERTIES 1 & 2 PROPERTY 3 PROPERTY 5
INVESTORS
Kiwifruit Rockit apple Plantation
MyFarm
orchards orchard Manuka
Syndicate

Co-Investment
Entity e.g. limited
partnership

PROPERTY 4
Hop garden

OPERATIONAL OPERATIONAL OPERATIONAL OPERATIONAL

PARTNERS PARTNERS PARTNERS PARTNERS
DMS Rockit Global Hop Revolution Comvita

64
 KAKARIKI INFORMATION MEMORANDUM

LIQUIDITY PRIORITY FOR INVESTMENTS

On successful completion of the Offer,
SOURCED BY MYFARM
Kakariki will list on Syndex www.syndex.exchange, While it has funds available, Kakariki has a first
a peer-to-peer trading platform for right of refusal over investment properties
proportionally-owned assets. Syndex is sourced by MyFarm. If Kakariki does not wish
not a licenced exchange. to take up a particular opportunity, MyFarm
Syndex was founded in New Zealand in will be free to syndicate the investment.
2015 and provides an independent secondary SOURCES OF INVESTMENT RETURNS
market. The platform is privately owned and AND INCOME
utilises proprietary capital market software
Kakariki expects to receive dividend income
on a publicly accessible platform. The platform,
from its Investment Companies. It also has the
Syndex Exchange, allows investors to trade
potential to make capital gains or losses from the
proportionally-owned assets both nationally
property developments it undertakes, or changes
and internationally and acts as an intermediary
in market values. These capital gains or losses
exchange for both potential investors
would only be realised when a property is sold.
and vendors.
Syndex will also maintain the share register
DISTRIBUTION POLICY AND PAYMENT
and be a portal and store for all Shareholder Investment Companies will generally distribute
communications. Syndicators like MyFarm list 100% of operating net cash flow, if any,
their syndicates on the platform and have to to Kakariki.
comply with listing rules aimed at ensuring a Kakariki’s policy is to pay quarterly dividend
fair and fully informed market. The listing rules payments to Shareholders based on the
require that the syndicator provide quarterly and distributions it receives from its Investment
monthly reports and information on valuation. Companies, less amounts needed to meet
Kakariki operating costs.
Imputation credits will be attached to dividends
There are currently six where available.
agricultural and commercial Kakariki distributions will be paid by direct credit
property syndicators using to each Shareholder’s nominated bank account
or, if appropriate, to their cash management
Syndex. The majority of account with an NZX Firm.
the syndicators are in
agriculture.
These syndicators have a total of 80 syndicates
listed on Syndex and a total investor base of
3,500 investors. Committed capital in these
syndicates exceeds $1.1 billion¹. Syndex offers its
services via a subscription- based pricing model.
There is no cost for individual investors to be
part of the platform. If an investor opts to buy or
sell on the platform, an annual $60 charge will
be incurred. There is no brokerage charged for
trades which are settled directly by buyer and
seller via Syndex.
Subject to the performance of its investments
and market conditions, the Board intends to
raise additional equity from retail investors and
list on the main board of the NZX in three years.

¹Source: Pers Comm, Syndex Managing Director, Ross Verry

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KAKARIKI INFORMATION MEMORANDUM
TAXATION
The following information with respect to the
imposition of New Zealand income tax is of a
general nature only. Tax consequences depend
on individual circumstances and investors should
seek advice from their own tax advisor as to the
consequences of an investment in Kakariki.
This information is based on tax law in force
on the date of this Information Memorandum.
Tax laws can be changed, potentially with
retrospective effect.
Dividends paid by Kakariki will be subject to tax
in the hands of investors. This tax may be
reduced or eliminated by the attachment of
imputation credits (for New Zealand residents)
or supplementary dividends (for non-residents).
Kakariki expects that the properties it acquires
and develops will be held on capital account
and that proceeds received from the sale of
properties will be non-taxable.
ACQUISITION OF OWN SHARES
The Kakariki constitution provides that it may
acquire and hold its own Shares.
BORROWING POWERS
Kakariki will generally endeavour to call on the
outstanding balance of the Issue Price to meet
the anticipated timing of investments. However,
it may also borrow funds for up to 90 days to
suit the timing of investment in properties and
the calling of further capital from Shareholders.
That is, Kakariki may borrow to bridge the time
between settlement of a property purchase and
the receipt of funds from Shareholders.
Properties acquired and developed by Kakariki
will generally be funded 75% by equity provided
by Kakariki and 25% by debt borrowed directly
by the individual Investment Company that
owns the property.
Individual Investment Companies will have the
ability (with the prior approval of the Board)
to borrow up to a debt-to-asset ratio of 40%
(at the time of borrowing), provided the
consolidated debt to asset ratio across all
Kakariki Investment Companies does not
exceed 25% (at the time of borrowing).
The ability of Investment Companies to
borrow will be subject, in each case, to
the approval of the Board.
66
INVESTMENT OF FUNDS
Proceeds from the Offer will be held in interest
bearing deposits at a registered bank or
equivalent, as approved by the Board.
VOTING RIGHTS
Ordinary shares held by Shareholders in Kakariki
confer normal voting rights on the Shareholders.
The Board may remove voting rights on Shares
if there is an unpaid call on those Shares.
Kakariki will hold all the ordinary voting shares
in each of the Investment Companies and
will exercise these rights in accordance with
the Kakariki investment policy and
investment criteria.
REPORTING
MyFarm will keep the Kakariki Board fully
informed of the progress of Kakariki and
its investments.
Information regarding the performance of
Kakariki and its businesses will be provided to
Shareholders on a quarterly and annual basis.
Kakariki will communicate with Shareholders
more frequently where the Kakariki Board
determines that it has information material
to Shareholders.
Unaudited interim reports and audited annual
reports will be distributed via email to all
Shareholders in Kakariki (unless a physical copy
is requested by the Shareholder). Shareholder
communications will also be posted and stored
on Syndex.
Subject to advice and guidance from KPMG,
Kakariki’s financial statements will be prepared
by MyFarm in accordance with NZ GAAP and
all applicable New Zealand Equivalents to
International Financial Reporting Standards.
KPMG will also be Kakariki auditor.
Kakariki will make application to the IRD for
approval of a financial year from 1 June to
31 May to align with the farming year.
The Investment Companies will make similar
applications when properties are acquired.
NOTIFICATION AND REGISTRATION
OF HOLDINGS
The share registry for Kakariki will be maintained
by Syndex. Holding statements will be sent to all
successful Applicants no later than five days from
the date of allotment of the Shares.
 KAKARIKI INFORMATION MEMORANDUM

ROLE OF THE KAKARIKI BOARD

The Kakariki Board is responsible for appointing
and monitoring the performance of MyFarm,
and ensuring Kakariki is properly managed to
protect and enhance Shareholders’ interests.
Some of the key responsibilities of the Kakariki
Board include:
• monitoring and reviewing the investment
objectives, strategy and policy of Kakariki,
in conjunction with MyFarm;
• considering and accepting or rejecting specific
investment and divestment recommendations
made by MyFarm;
• monitoring Kakariki’s operational and financial
performance; and
• establishing effective policies and procedures
concerning disclosure of important
information to Shareholders and,
if appropriate, to the wider market
The Kakariki Board has adopted what it believes
are appropriate corporate governance policies
and procedures, which it intends to regularly
review to ensure that Kakariki’s responsibilities
and obligations to Shareholders and other
stakeholders are met.
APPOINTMENT OF DIRECTORS
The Directors are appointed and removed by
an ordinary resolution of the Shareholders.
The current Directors of Kakariki have each been
appointed for an initial period of three years.
Thereafter, one Director will resign each year
by rotation, but will be eligible for re-election
at the annual meeting of Shareholders.
BOARD OF DIRECTORS
The Kakariki Board currently comprises four
Directors, all of whom are non-executive and The Board of Kakariki is
three of whom are independent.
responsible for appointing
The Kakariki Board will formally meet at least
four times during each financial year to review
and monitoring the
Kakariki’s performance and, as required, will performance of the
hold additional Investment Committee meetings
to consider and decide on investments,
Manager, and ensuring
divestments and other matters. Kakariki is properly
Directors’ fees for the first financial year have managed to protect and
been set at $250,000, in aggregate, backdated
to 1 February 2019 to reflect the Directors’
enhance Shareholders’
contribution to the formulation of this Offer. interests.

67
KAKARIKI FUND INFORMATION MEMORANDUM
Board of Directors
JULIAN RAINE
Independent Chair
Until the end of, Julian was the president and
chairman of Horticulture New Zealand. He is
currently chair of Boysenberries NZ Ltd and NZ
Dairy Desserts Ltd, and a director of Saxton Fruit
Ltd, NZ Boysenberry Council Ltd, Hinetai Hops
Ltd, New Zealand Hops Ltd, Cold Storage Nelson,
Waimea Irrigators Ltd and Waimea Water Ltd.
For 20 years Julian was the operational director
for his own horticultural business, a role that
involved running the field operations with
responsibility for packing/post harvest facilities.
Since the mid 1980s Julian has held a variety
of industry good positions. He spent over a
decade in governance in the science sector with
directorships with Landcare Research and the
Cawthron Institute. Julian is also a trustee of the
Massey Lincoln Agricultural Industry Trust and a
past Nuffield scholar. Julian is based in Nelson.
68
DIANNE KIDD
Independent Director
Dianne has a 20 year background in funds
management and superannuation. Prior to her
governance career she was Head of Wholesale
Distribution for ASB Group Investments Limited.
She has been a Director of The Co-operative
Bank Limited since 2009 and is a member of
the bank’s audit, risk and people & culture
committees. Until August 2018 she was Deputy
Chairman of Unitec, New Zealand’s largest
Institute of Technology, and has also served
two full terms on the board of AsureQuality Ltd,
a State Owned Enterprise recognised globally
as a leader of best practice in food safety
and biosecurity.
Dianne is a Helensville sheep & beef farmer,
and has a special interest in the production of
safe and quality food and fibre. An environment
award-winning farmer in 2016, Dianne is the
current Chairman of the national judging panel
for the NZ Farm Environment Trust’s Gordon
Stephenson Trophy.
 KAKARIKI INFORMATION MEMORANDUM

JOHN LOUGHLIN PAUL RICHARDSON

Independent Director Director

John has considerable executive and governance Paul has worked for 27 years in the finance
experience in the international marketing of sector in New Zealand and Australia. For the
New Zealand primary produce, notably with last five years until September 2018 he was
meat, kiwifruit, pipfruit and wine. Executive Director and Chief Investment Officer
He is currently chair of Rockit Global Limited of Mint Asset Management, a share, property
and Hop Revolution Limited, and is a past chair and diversified fund manager with $1 billion
of Zespri Group Limited. He is also chair of under management, and he led the responsible
EastPack Limited, which handles around 27% of investing programme.
the New Zealand kiwifruit crop, the Meat Industry Prior to this Paul was for 10 years at BT Funds
Association Inc., PowerCo Limited and Carbine Management, part of Westpac New Zealand,
AgInvest Corporation Limited. as Chief Investment Officer and Fund Manager,
Amongst many other previous governance and then with over $3.5 billion under management,
executive roles, John was CEO of Richmond and before this he was Executive Director and
Limited and a director of NZ Meat Producers Head of NZ Equity Research at UBS. Paul is
Board, Allied Farmers Limited, Port of Napier an independent financial consultant through
Limited, Augusta Capital and AgResearch Limited. his business Carina Capital, a member of
John is based in Hawke’s Bay. the Responsible Investment Association of
Australasia. Paul is a Director of AgInvest
John was also the chairman of finance company
Holdings, MyFarm’s parent company, is a
Allied Nationwide Finance Limited, now known
Director of the CFA Society of NZ, and sits
as NFA Limited (in liquidation) (referred to below
on the Advisory Board of Mindful Money.
as Allied), from 1 May 2007 to 23 August 2010.
Allied was placed in receivership on 20 August Paul is an Authorised Financial Adviser (AFA)
2010 as part of the finance company collapses and is a CFA charter holder, a member of
in New Zealand at that time and subsequently NZ Institute of Directors and of INFINZ.
went into liquidation on 31 October 2012.
He ceased to be the chairman and a director
of Allied on 23 August 2010. On 2 September
2013, the Financial Markets Authority (FMA)
issued a formal warning letter to John Loughlin
and the other directors of Allied stating that,
in the FMA’s view, the directors of Allied likely
breached the Securities Act by failing to
adequately disclose the ability of Allied’s parent,
Allied Farmers Limited, to provide financial
support and Allied’s ability to meet its financial
obligations. The FMA advised that, having taken
into account the possible availability of defences,
FMA’s enforcement policy and public interest
considerations, the FMA did not intend to take
formal enforcement action at that time. The FMA
considers that better disclosure should have
been made, to ensure that investor were
aware of the risks associated with their
investment in Allied.
69
KAKARIKI INFORMATION MEMORANDUM

ABOUT THE MANAGER MyFarm has a staff of 25 most of whom are

based in the company’s Feilding office.
The Manager of Kakariki is AgInvest Trading
Limited, which trades as MyFarm. In addition to the senior staff members
profiled here, MyFarm’s staff includes four
MyFarm is a specialist syndication business
management accountants, five syndicate
with a focus on land-based syndications in
administrators, an operations and HR manager,
horticulture. It is based in Feilding where it has
two legal executives, and four people in sales,
been operating since 1990.
communications and marketing.
With more than $450 million of farm assets
MyFarm is a subsidiary of AgInvest Holdings
under management, MyFarm provides investors
Limited. The directors of AgInvest Holdings are
with opportunities to access returns from
John ( JT) McFarlane, Neil Craig, Paul Richardson,
New Zealand farming through investment in
Andrew Watters and Grant Rowan. Paul
handpicked, premium properties.
Richardson is also a director of Kakariki.
MyFarm is widely regarded as New Zealand’s
Through its parent company, AgInvest Holdings
most experienced farm, orchard and rural
Limited, MyFarm is owned by its staff and
investment company. Its primary role is
directors and a number of external investors.
the establishment of quality primary sector
syndicates that provide on-going returns to
their investors. These syndicates are in kiwifruit,
apple, RockitTM, cherry and avocado orchards, MyFarm is widely regarded
vineyards, rural commercial property, a large
hop garden, dairy and sheep & beef farms as New Zealand’s most
and plantation manuka. experienced farm, orchard
MyFarm’s experience as farmers, farm and and rural investment company.
orchard managers and rural investors, along with
its focus on investment in high quality properties,
has enabled it to consistently outperform more
traditional types of investment and deliver well
above sector average returns.
Operationally, MyFarm is organised into two
distinct divisions, MyFarm Investments and
MyFarm Business.
MyFarm Investments undertakes sector
research and does all things involved with
sourcing investment properties, structuring
investments and financial modelling, carrying
out due diligence, contracting with operational
Partners, preparation of offer documents,
raising capital, organising bank funding,
and settling investment properties.
MyFarm Business does all those ‘business as
usual’ things involved with running investment
properties for third-party investors. These
include the monitoring of on-farm operations
and contractual agreements, liaising with
operational Partners, financial control, financial
accounting and reporting, governance support,
investor communications, and financial and
legal compliance.

70

MyFarm Investments Team
ANDREW WATTERS
Chief Executive,
AgInvest Holdings
Limited
Andrew has extensive experience in practical
farming and corporate management. He is a
recipient of the coveted Nuffield Scholarship,
awarded each year to future leaders within
our primary industries. He and his wife Alison
also won the New Zealand Sharemilker of the
Year title in 2003, and still own a dairy farm
milking 600 cows in the Wairarapa district
of the North Island.
GRANT ROWAN
Executive Chairman,
AgInvest Holdings
Limited
Grant’s carreer is built on extensive farming
experience. He currently owns three Southland
dairy farms. As leader of the farm procurement
team, Grant’s hands-on experience enables him
to cast a meticulous farmer’s eye over potential
investment properties. Grant also sits on the the
governing board of seven MyFarm syndicates
(3 apple, 1avocado, 1 grape, 1 cherry and 1 hop).
GRANT PAYTON
Head of Sales,
MyFarm Investments
Grant has 12 years’ experience at MyFarm,
having joined the company in February 2007
as Farm Operations Manager, a role he
maintained for 5 years. In his time at MyFarm,
Grant has been involved with overseeing,
completing due diligence on, or syndicating
in excess of 68 investments.
KAKARIKI INFORMATION MEMORANDUM
BRIAN CLOUGHLEY
Head of
Investment Services,
MyFarm Investments
Brian is based in Tauranga and is responsible for
the preparation of MyFarm investment offers,
deal structuring and financial modelling. He also
sits on the the governing board of eight MyFarm
syndicates (3 kiwifruit, 2 apple, 1 avocado
1 cherry, and 1 hop). Prior to joining MyFarm in
2011, Brian was Director of Investment Banking
(Agribusiness) for Craigs Investment Partners
for 10 years.
CON WILLIAMS
Head of Investment
Research,
MyFarm Investments
Con joined MyFarm in July 2018 and provides
investment insights for all primary sectors and
specific investment opportunities. Prior to this,
Con was ANZ Agri Economist for eight years.
This involved sector analysis to inform bank
lending decisions and help clients understand
the key external factors driving their business.
It also provided exposure to banking, financial
markets and a broader sense of what drives
businesses and the New Zealand economy.
71
KAKARIKI INFORMATION MEMORANDUM

MYFARM BUSINESS KEY PERSONNEL

GARETH EVANS HELEN SNIJDERS

Head of Establishment, Chief Financial Officer
MyFarm Business MyFarm Business

As Head of Establishment, Gareth’s role straddles
both parts of the business. He is responsible
for completing due diligence on investment
opportunities, overseeing the establishment
of new investee businesses and their on-going
development. Gareth has been with MyFarm
for 11 years. Prior to joining MyFarm, Gareth’s
experience included sharemilking, operational
management of corporate dairy farms and
international dairy consultancy.
Helen joined MyFarm in 2014 as CFO leaving
behind finance roles in both local government
and construction. As head of finance, Helen is
responsible for producing robust timely financial
reporting for syndicates under management,
as well as the financial management of the
AgInvest Holdings Group.
Helen has extensive farming experience
including dairying, dry stock and deer
breeding and finishing.

RUSSELL MCDIVITT
Head of Business
MyFarm Business

As Head of Business, Russell will be responsible

for the operation of the properties in which
Kakariki invests. Before moving to his current
role, Russell led the organic conversion of eight
Southland dairy farms. He has an extensive
background as a General and Operations
Manager for scale farming enterprises across
multiple and geographically diverse locations.
Immediately prior to joining MyFarm, Russell
was the GM / CEO of Purata Farms.

72
 KAKARIKI INFORMATION MEMORANDUM

RELATED PARTY BENEFITS Manager’s Track Record

MyFarm is the promoter of the Offer and
it will earn fees for the successful
establishment of Kakariki. It will also earn
fees as Manager for administering Kakariki
and its Investment Companies.
MyFarm will also receive a profit share
based on 20% of annual profits above
a threshold of 10% p.a.
The FY18 and FY19 performance of syndicate
investments in permanent crops set up and
managed by MyFarm are shown in Figures
19 and 20 which compare forecast and
actual returns.
A number of additional syndicates have
also been established but are development
properties where no cash profit was forecast
or generated in these years.

Figure 19: Return on Investment from MyFarm

Horticultural Syndicates FY18

Average Return -

Vineyard 2 -

Apple 1 -

Rural Commercial 2 -

Rural Commercial 1 -

Kiwifruit 1 -

Vineyard 1 -

0 2% 4% 6% 8% 10% 12%

Actual ROI FY 2018 Budgeted ROI FY 2018

Figure 20: Return on Investment from MyFarm

Horticultural Syndicates FY19

Average Return -

Avocados 1 -

Kiwifruit 3 -

Kiwifruit 2 -

Vineyard 1 -

Apple 2 -

Rural Commercial 2-

Rural Commercial1-

Kiwifruit 1-

Vineyard 1 -

0 5% 10% 15% 20% 25% 30%

Actual ROI FY 2019 Budgeted ROI FY 2019

73
KAKARIKI INFORMATION MEMORANDUM

9. Selected agreements with Rockit Global and Comvita

respectively. The first option to invest in units in
the Hop Syndicate is subject to due diligence on
financial the Information Memorandum for the syndicate
offer when it becomes available.

information Budgets for these investments may change

The financial information in this section relates
to budgets prepared for the Initial Investments
that the Kakariki Investment Committee has
conditionally approved. These involve the
purchase of 10.72 cha of kiwifruit orchards in
the Bay of Plenty, the development of 35 cha
of Rockit™ apples in Hawke’s Bay and 2,000 cha
of plantation manuka in the central North island,
and a first option to invest in 50% of the units
in the Hop Syndicate to be formed to develop a
130 cha aroma hop garden in Nelson.
Budget numbers are based on assumptions
used for recent MyFarm syndicates. Actual
assumptions for Kakariki's Initial Investments may
vary depending on the properties purchased.
The purchase of the kiwifruit orchards is
conditional on due diligence and finance.
The development of the 35 cha Rockit™ apple
orchard and the 2,000 cha of plantation
manuka is conditional on acquiring suitable
land and execution of management and supply
depending on the cost and quality of the land
that Kakariki purchases for Rockit™ apple and
plantation manuka development, the agreements
it reaches with Rockit Global and Comvita,
information in the Hop Syndicate information
memorandum, and the size of the 2019 kiwifruit
crops on the orchards Kakariki is purchasing.
If one or more of the Initial Investments does
not proceed for any reason the Kakariki Board
will utilise the proceeds from this Offer to
pursue other investments in line with
Kakariki’s Statement of Investment Policy
and Objectives (SIPO).
The information in this Information
Memorandum has been prepared on a cash
basis for the purposes of showing the expected
costs and returns from the Initial Investments.
Kakariki’s annual financial statements will be
prepared to IFRS/GAAP standards and will be
audited. Accordingly, there will be differences
between financial information in the annual
accounts and financial information in this
Information Memorandum. For example,

Table 6: Capital requirements for Kakariki’s proposed Initial Investments

Kiwifruit Manuka Hops RockitTM Total

Land & Buildings 9,639,624 11,220,000   4,200,000 25,059,624

2019 Crop Acquisition 1,381,776       1,381,776

Development 366,500 1,680,000   8,403,446 10,449,946

Legal/Due Diligence/                                               
Underwrite/Advertising 80,000 115,000 80,000 275,000
 
Syndicate Units     10,331,015   10,331,015

Total Investment Cost 11,467,900 13,015,000 10,331,015 12,683,446 47,497,361

           

Funded by Debt 2,867,900   3,253,750                     -   3,163,446 9,285,096

Funded by Rural Growth Fund Grant -   1,380,000     1,380,000

Funded by Equity 8,600,000    8,381,250 10,331,015 9,520,000 36,832,265

Total Investment Funding 11,467,900 13,015,000 10,331,015 12,683,446 47,497,361

Timing of Equity Funding          

FY20 100% 87% 100% 51%  

FY21   13%   49%  

74
 KAKARIKI INFORMATION MEMORANDUM

the information in this Information Memorandum In the second year, kiwifruit returns are expected
does not include provisions for deferred to be supplemented by hive set-down fees from
taxation, inventories, accruals, and depreciation the investment in plantation manuka.
on buildings. It also does not distinguish between Kakariki is expected to make a small profit in
issue expenses that can be expensed and issue the third year when the first returns from the
expenses that cannot be expensed. Hop Syndicate investment are expected,
Financial information in this Information should it proceed. Thereafter profitability is
Memorandum assumes debt funding is provided expected to increase rapidly as the hop garden
by a tier one bank. While discussions have matures and the returns start to flow from
been had with a number of banks and funding Rockit™ apple orchard development.
proposals have been received for the two The figures in Table (7-9) on pages 76 and 78
Opotiki kiwifruit orchards, no debt funding are based on $100 million of funds raised in the
is currently in place. Offer paid to $39.8 million.
CAPITAL REQUIREMENTS Management Fees are initially based on
The Initial Investments are expected to cost Committed Capital rather than FUM, and these
a total of $47.5 million spread over the two fees will be disproportionately high until funds
financial years ending FY21. All the funding for raised in the Offer are fully invested. For this
the kiwifruit orchards and the hop syndicate reason, the Kakariki Board will give priority to
investment will be required in the three months the expeditious investment of uninvested
following the close of the Offer, as will 12% of the capital raised in the Offer.
funding for the Rockit™ apple orchard related to
tree and licence deposits. These investments are
budgeted to cost a total $23.3 million. During the
remainder of FY20, a further $15.4 million will be
required to purchase the land for the Rockit™
apple and plantation manuka developments.
In FY21 the remaining $8.8 million, to fund
the development of the Rockit orchard and
plantation manuka land, will be required
(to enable planting in the spring of 2020).
OPERATING RETURNS
Kakariki expects to incur two years of operating
losses from its Initial Investments. These are
budgeted to total $876,670 ($444,053 in
FY20 and a further $432,617 in FY21).
Revenue from the kiwifruit orchards are
expected to provide sufficient revenue to meet
75% of Kakariki operating expenditure in the
first year, excluding issue expenses. The high
level of returns expected from kiwifruit in FY20
relate to part of the proceeds from the sale of
the 2019 crop, which was included in the orchard
purchases, plus base orchard lease payments
from DMS and rental from the two houses on
the properties.

75
 Table 7: Budgeted financial performance and distributions from Kakariki based on the Initial Investments

76
FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29
 Distributions from Initial
                 
Investments
Kiwifruit 1,355,947 974,367 685,734 754,609   728,648 728,648 728,648   728,648 728,648 728,648
Manuka                     -   190,516 289,444 481,010 860,748 1,279,349 1,309,334 1,327,279  1,347,279 1,367,279
Rockit                     -              -          -   988,084 2,012,903 3,733,915 4,779,796 4,912,779 4,917,478 4,917,478
Hops                    -              -   1,015,390 1,739,486 1,874,644 1,874,644 1,874,644 1,874,644 1,874,644 1,874,644
Interest                    -       2,500   2,500 2,500       2,500        2,500          5,379    12,136      16,566     17,170
Total Income 1,355,947 1,167,383 1,993,069 3,965,689 5,479,445    7,619,057 8,697,802 8,855,487 8,884,616 8,905,221
                     
Issue Expenses 2,052,015                
Management Fees   1,450,000 1,250,000 1,250,000 1,250,000 1,250,000   1,250,000    1,250,000 1,250,000    1,250,000   1,250,000
KAKARIKI INFORMATION MEMORANDUM

 Director Fees &

  270,000 270,000 270,000 270,000    270,000     270,000       270,000      270,000   270,000 270,000
Expenses
 Other Fund  Expenses     80,000 80,000  80,000 80,000       80,000       80,000        80,000        80,000       80,000      80,000
 Total Operating     
3,852,015 1,600,000 1,600,000 1,600,000   1,600,000 1,600,000   1,600,000   1,600,000 1,600,000   1,600,000
Expenses
 Operating Surplus (2,496,068) (432,617) 393,069 2,365,689 3,879,445 6,019,057   7,097,802    7,255,487 7,284,616   7,305,221
 Depreciation    -              -   -           -            -                 -                -           -             -                        -  

 Operating Surplus
(2,496,068) (432,617) 393,069 2,365,689 3,879,445   6,019,057 7,097,802 7,255,487    7,284,616 7,305,221
Before Interest and Tax
 Interest   -         -   -            -              -                -                -                -           -                        -  
Net Surplus Before Tax (2,496,068) (432,617) 393,069 2,365,689 3,879,445      6,019,057 7,097,802 7,255,487 7,284,616 7,305,221
Tax  -          -   -           -            -                 -                -         717,022 1,739,206 1,751,043

Net Surplus After Tax   (2,496,068) (432,617) 393,069 2,365,689 3,879,445    6,019,057 7,097,802 6,538,465 5,545,410 5,554,177

 Operating Net Cash

(2,290,912) (602,216) 325,204 2,203,556   3,755,026   5,843,198   7,009,138  6,525,505 5,543,016   5,552,484
Flow
 Manager Profit Share        -              -   -              -             -      407,304     620,750    503,476      301,321     302,591
Distributions to
-            -   -   2,203,556   3,755,026   5,435,895    6,388,388 6,022,028 5,241,695 5,249,892
Shareholders
Paid Capital 33,918,177 39,825,393 39,825,393 39,825,393 39,825,393 39,940,537   40,210,829 40,388,030 40,412,201   40,437,168
Distributions/Paid
0% 0% 0% 6% 9% 14% 16% 15% 13% 13%
Capital
 Table 8: Consolidated debt, interest cover and LVR ratios for the Initial Investments made by Kakariki

 FY20  FY21  FY22  FY23  FY24  FY25  FY26  FY27  FY28  FY29
 Total debt in Investment
6,121,650 8,841,873 9,285,097 9,285,097   9,285,097 9,285,097 9,285,097 9,285,097   9,285,097 9,285,097
Companies
  Total Assets in
Investment
37,939,749 44,430,129 44,003,266 43,753,249 43,476,192 43,346,707 43,136,840 42,871,401 42,625,223 42,400,717
Companies@ cost +
equity share in Hops
 Investment Company
EBITDA + hop syndicate 1,525,182 690,836 1,965,652 4,531,495   6,003,774 8,211,848 9,186,322 9,263,500 9,283,500 9,303,500
distributions
 Interest Paid 129,056    274,574 396,984  416,929    416,929   416,929      416,929    416,929   416,929 416,929
 Interest Cover             11.8            2.5           5.0           10.9         14.4              19.7          22.0           22.2           22.3           22.3
LVR 16% 20% 21% 21% 21% 21% 22% 22% 22% 22%

Table 9: Capital available for further investment beyond the Initial Investments at different levels of
Offer proceeds

Amount Raised                                                         

in the Offer 40,000,000 75,000,000 100,000,000 125,000,000 150,000,000 175,000,000

Paid on Application 10,000,000 18,750,000 25,000,000 31,250,000 37,500,000 43,750,000

Uncalled capital
needed to fund Initial
28,925,393 20,700,393 14,825,393 8,950,393 3,075,393 -  
Investments and issue
expenses
Uncalled Capital
Available for further 1,074,607 35,549,607 60,174,607 84,799,607 109,424,607 131,250,000
investments
Amount of further
investment possible at 1,432,809 47,399,476 80,232,809 113,066,143 145,899,476 175,000,000
a 25% LVR

77
KAKARIKI INFORMATION MEMORANDUM
KAKARIKI INFORMATION MEMORANDUM
10. Risks to returns from Kakariki
IMPORTANT QUESTIONS
Is there a risk the money paid by an investor
will not be recovered in full by the investor?
Yes. An investor might for example not recover
all of their investment if the investment
properties are sold at a loss by Kakariki,
or Shareholders sell their Shares on the
secondary market for less than they paid
for them, or cannot sell them.
Will an investor be required to pay more
money in respect of the investment than that
disclosed in the Terms of the Offer section?
No. Kakariki is a limited company and investor
liability is limited to the issue price of Shares
when fully paid.
How do I exit and what is the liquidity of
my Shares?
Shares may be offered for sale through the
Syndex trading platform www.syndex.exchange
for peer to peer investments. Liquidity is
uncertain and likely to be low. It may take time
to sell Shares if at all and the price received
may be discounted.
Subject to market conditions and the
performance of investments made with funds
raised in this Offer, the Board intends to
undertake a subsequent public offer and list on
the main board of the NZX in three to five years’
time. Prior to this it may also undertake another
offer to wholesale investors if further funds are
needed for growth before Kakariki is ready to list.
Is there a risk an investor will not receive the
returns set out in the Financial Information
section?
Yes. Returns to investors may be adversely
affected if, for example, investment properties
are less productive than expected, product
prices are less than expected and/or it costs
more to acquire and develop investment
properties.
78
An increase in bank interest rates would also
reduce operating cash flow and the amount
of cash available for distribution.
RISK MANAGEMENT
Investment in Kakariki is risky. You should
consider if the degree of uncertainty about
Kakariki’s future performance and returns are
acceptable to you. The Board considers the
most significant risk factors that could impact
on Share value are:
• OGR Risk – the risk that OGRs for the
permanent crops in which Kakariki invests
fall below budgeted levels
• Yield risk – the risk the permanent crops
in which Kakariki invests are less productive
than expected
• Operating cost risk – the risk that orchard
working expenses increase as a result of
increases in the cost of labour
• Operational Partner Risk – the risk that the
Operational Partners, on whom MyFarm
and Kakariki rely, fail to meet their
contractual obligations to Kakariki
• Development Risk – the risk that the land
development in which Kakariki invests
takes longer to complete or costs more
than budgeted
More detail on these key risks and mitigating
factors, and other more generic sector risks
are shown in the following table on page 80.
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RISKS AT THE KAKARIKI LEVEL

This section addresses the selected material risks of an investment based on the knowledge and
assessment of the Kakariki Board and MyFarm at the date of this Information Memorandum. It is
possible that other risks may emerge over time. It is by no means an exhaustive list of risks that can
impact on returns and solvency. If investors require further information on material risks they should
seek professional advice.

Risk Description

Performance Kakariki investments will be actively managed by MyFarm and the Operational Partners
of the Manager it engages to develop and lease or manage its investment properties. There is a risk that
and Operational MyFarm and its Operational Partners will under perform or lose key personnel and that
Partners investment returns will be adversely affected.

Bank Debt The availability of bank capital could be influenced by the bank’s perceived risk of lending
to an individual business and general financial market conditions (related to broader
financial and economic conditions). An undesirable deterioration in the financial situation/
position of an individual business could cause a breach of the bank’s financial covenants.
Non-compliance with any covenant could result in a review, or possible default in a worse
case situation. Consequences of this may include increased financing costs, decreased or
no availability of debt funding, acceleration of repayment of all outstanding amounts and
enforcement of security, and in the worst-case situation insolvency of the individual business.
All of these outcomes would reduce returns.

Interest Rate Fluctuations in wholesale interest rates, or Bank applied credit margins will influence investor
Changes returns.

Loss of Key The performance of MyFarm and Operational Partners is dependent on key personnel.
Personnel Many of these individuals have highly specialised expertise which may be difficult to replace.
Until replacements are found, there is a risk that the departure of key personnel could cause
short-term disruption to performance.

Force Majeure risk A major catastrophe, violent act or local disaster of significant magnitude could damage or
destroy infrastructure and adversely impact on operational activities and productivity. There
could also be an impact on broader local/global infrastructure and key partner operations.
A force majeure event (e.g. earthquake, fire, terrorism, war, storm, flood, sabotage, epidemic,
national emergency, volcanic eruption) could result in property damage and additional costs
and/or a loss of productivity and profit. In some cases these financial impacts may be covered
by insurance, but many of the events cannot be insured against and/or the cost inhibits cover
being taken.

Insolvency risk In the event of insolvency, Shareholders would not receive any payment in respect of their
Shares until all secured and unsecured creditors have been paid and liquidation costs have
been paid.

RISKS AT THE SECTOR LEVEL

An investment in Kakariki exposes investors to the risks facing the individual businesses that will
be invested in, whether directly specific to that business or of a general nature. These risks might
negatively affect the financial performance of an Investment Company at any time. Some of these
risks can be managed through good business management practices, including use of appropriate
safeguards and systems, but many cannot. This is due to them being outside the direct control of
MyFarm and Operational Partners. Investors should note that this section does not list every
general sector risk that may affect Kakariki, now or in the future.

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RISKS AT THE SECTOR LEVEL (Continued)

The diversity of the investments that Kakariki intends to make should provide a degree of risk mitigation.
Kakariki’s investments will be diverse in terms of crops, markets, sales channels, geography and the
timing of crop harvesting. This diversity means that adversity in one crop is less likely to result in adversity
overall. For example, a tropical cyclone might hit some regions and not others and avocados and cherries
which are picked much earlier are not vulnerable to the autumn weather risk period.

Risk Description

Market Risk There are a variety of market risks related to the general demand/supply balance for a product,
market access and competitive forces. These can affect the prices received for a product and
even the ability to sell it.
Supply/demand balance: Each sector has its own supply/demand balance which will determine
market prices. These will be governed by a range of factors such as: seasonal conditions, both
locally and for major competitors; long-term investment in land use change; productivity,
gains; end demand in major markets; general economic conditions; cost of production; product
substitution; competitor disruption; and a range of other factors. While each sector being
invested in has some unique features that make them attractive to invest in, many are still prone
to volatile market returns due to seasonal changes in their markets supply/demand balance.
General economic and market conditions: As most of the crops produced by Kakariki will be sold
overseas, general economic conditions in major economies and markets will have a significant
effect on received prices and other key financial variables. This is due to the general effect on
all food prices; consumer confidence and purchasing power; and purchasing patterns
(i.e. consumers trading down during an economic downturn). There is an effect on financial
variables too, which can affect asset valuations, access to capital and the cost of capital.
These are all important drivers of investor returns.
Market access: Historically New Zealand’s primary sectors have faced market access challenges
and non-tariff barriers in a number of key markets. Through New Zealand’s free-trade efforts
and general globalisation trends (facilitated through the likes of the World Trade Organisation)
market access has improved significantly in recent decades. However, offshore markets can still
take a range of actions which influence or restrict the international trade in certain products,
including through tariffs, quotas, price controls, other non-tariff barriers (such as technical
or phytosanitary requirements), the imposition of anti-dumping measures, subsidies and
food- related regulation. A breach of these may potentially result in litigation, financial penalties,
prosecution, temporary trade embargoes and even permanent loss of market access.
The interaction of these factors is complex and can result in substantial shifts in competitiveness
and returns. For many of the more perishable products with a short-shelf life (e.g. cherries and
avocados) and specific seasonal window, market access is critical to returns and minimising
losses (from fruit loss and/or quality downgrades).
Political risk in offshore markets: There are a range of global political challenges at present
(e.g. Brexit and China/US tensions). Political risk can manifest itself in a number of ways such as
economic instability or downturn, deflation or inflation/hyperinflation, currency volatility, price
controls, political interference in certain markets and restricted market access. All these events
can have a negative effect on returns, or the ability to sell a product.
Geographic concentration/bargaining power: China is now a systemically important market for
most New Zealand primary sector exports. Similarly, there has been growing concentration in
key market channels, such as supermarkets, in many developed western markets. Both provide
challenges and opportunities that can influence market access and received prices.

Climatic/ The climatic and biophysical conditions during the production lifecycle of any crop are important
Biophysical in determining production outcomes, including both the quantity of outputs and quality of these.
Production Risks Key risks include hail, excess rain and heat, frost, wind, sunshine hours, humidity and other
extreme weather abnormalities. All these events at key times during the production lifecycle or
at the harvest time for a crop can have an adverse effect on the quantity of product produced
and its quality. Many products are quality graded, so climatic conditions can affect packout
rates for different grades (i.e. export vs domestic) and the price premiums received.
Notably, frosts and tropical cyclones have the potential to cause catastrophic losses.

Pest & Disease Each permanent crop has a range of pests and diseases that can affect its productivity and the
Issues production/quality of the crop. The impact can range from mild to severe; and be temporary
for one season, or permanent depending on the circumstances. Issues can often arise due to
specific climatic conditions, which can also dictate the severity and duration of impact.

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RISKS AT THE SECTOR LEVEL (Continued)

Risk Description

Biosecurity There are a variety of market risks related to the general demand/supply balance for a product.
New Zealand’s historical isolation has meant it is free from a number of potential pathogens and
pests that could have unwanted impacts if there is an incursion. With increased two-way trade
and growth in tourism the risk of a biosecurity incursion has increased.
The direct impacts on orchard/plantation productivity and production are often unknown due
to the pathogen and pest not being naturally present in an existing environment. A biosecurity
breach may also have market access and reputational implications.
Market access impacts will depend on a specific country’s response and their own protocols
for dealing with a particular pathogen or pest. The need to use more pesticides, chemicals or
antibiotics to control a new pathogen or pest could led to reputational damage and lower prices.
The brown marmorated stink bug, fruit flies, plant dieback disease and the glassy winged sharp
shooter pose the largest threat for a significant range of horticultural crops.

Financial Risks Both Kakariki and individual Investment Companies face a number of financial risks related to
movements in foreign exchange rates, interest rates and credit markets.
Foreign exchange risk: As the majority of end products will be sold overseas, NZD returns/
prices received will be exposed to fluctuations in foreign exchange rates. The level of exposure
will depend on contractual arrangements, type of crop produced and type of operating model
employed (i.e. lease vs. full operating model). Foreign exchange rates can also influence the cost
of key inputs that are imported (such as fuel), which will affect operating margins.
Interest rates: Numerous local and global economic factors can affect interest rates. As bank
debt will be used to fund a proportion of the investments made, fluctuations in interest rates will
influence cash returns.
Credit risks: Relate to the ability to source bank capital for riskier investments (i.e. developments
with a long wait to cash returns) and the cost of this capital (through credit rating and bank
margins). Financial difficulties for a specific business or general credit market conditions could
increase the margins Bank’s charge and restrict the access to capital.

Labour Risks Many of the investee businesses are labour intensive, require large seasonal workforces and
need critical tasks to be completed at short notice. Labour linked costs can account for anywhere
from 40% up to 90% of total operating costs depending on the sector. This means the availability
of skilled and unskilled staff to produce and complete a good harvest, along with labour costs,
are critical to returns.
Currently regional labour markets, where staff will be required are very tight, impacting on
the availability of both skilled and unskilled labour to complete key tasks. Looking forward,
the current government has committed to tightening the rules and better enforcing existing
ones around migration, work visas and employment conditions/standards (i.e. wages, working
conditions, hours, holiday pay and other benefits). Combined with a commitment to lift the
minimum wage to $20 per hour by 2021 and increased public sector wage expectations,
these cost pressures and the general restricted availability of labour points to upward
pressure for wages.

Health and Safety In many of the investee businesses, employees will be exposed to a range of potential hazards.
This could stem from activities such as operating machinery, heavy manual labour, or the use
of chemicals/sprays. Partners managing operational activities are responsible for the health
and safety of their employees and business being managed. This somewhat limits the individual
business and Fund liability in the case of injury or harm. But reputational damage and litigation
could still occur in certain circumstances leading to penalties, other liabilities, lower employment
reputation and additional regulatory scrutiny.

Food Safety There is a risk that products might be contaminated, tampered with, or adulterated prior to sale.
These risks exist to orchards and become more pronounced where ownership extends closer to
the marketplace (dependent on sector and marketing arrangements/agreements with partners).
Food safety issues can result in the dumping of product, claims by customers and significant
product recall costs being incurred. Any related adverse publicity (even if from false or malicious
or unfounded allegations) may potentially result in unbudgeted costs and reputational harm.
Anything adversely impacting the reputation (including the general perception of the quality of
New Zealand products by another major company) could affect future sales of products or the
price at which products can be sold.

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RISKS AT THE SECTOR LEVEL (Continued)

Risk Description

Legislative and The primary sectors face the risk that changes (or, in some cases, proposals for change,
Regulatory change whether implemented or not) to legislation or regulation may negatively impact on financial
performance, force other undesired changes on business activity and/or significantly
increase compliance burden.
There are many legislative or regulatory rules that are relevant to the permanent crop
investments including: Health and Safety at Work Act, Climate Change Response Act,
National Freshwater Policy Statement, Resource Management Act, Animal Welfare Act, local/
district council plans, Biosecurity Act, Food Act, Reserve Bank Act, and the Income Tax Act.
Some of the more important areas are:
Environmental: There are regulatory risks associated with environmental concerns
including water access and usage, agricultural emissions, discharges to land and water,
genetic modification, waste disposal and the use of certain sprays or chemicals. The
investee business operations are subject to the environmental consents and regulations
that control each of these areas. Non-compliance could lead to litigation, financial penalties
and reputational damage. Operations may also be disrupted in the event of material
non-compliance with environmental or other approvals authorising activities, or from
those approvals not being renewed (or being renewed on more onerous terms).
Water Access and Usage: All permanent crops require adequate access to water to grow
produce and for the survival/mitigation of damage from frosts and droughts. The current
government is looking at further reforms of the National Policy Statement for Freshwater
Management that came into effect in 2011. This established a regulatory framework for the
management of freshwater in New Zealand. Under the regime, local authorities have to
establish quality limits for waterways in their catchments. Once set, businesses need to
be managed within those limits.
For permanent crops the main potential restrictions are around water usage (i.e. maintaining
minimum river flows during the summer period) and any discharges into waterways
(i.e. chemicals or waste products). The investee businesses could be adversely affected by
any reforms that impose restrictions or conditions on its irrigation or spray programmes,
or if a pricing regime on water or other additional costs are imposed (e.g. a water tax).
Building Code requirements: Kakariki will own a number of buildings that will be required
to meet current earthquake standards and other relevant building code requirements.
This is assessed during the due diligence process of purchasing an existing business,
or through the design of a new facility that needs to meet current code requirements.
Emissions Trading Scheme: Fund returns will be exposed to both the cost of emissions,
but also the returns from carbon credits earnt. Significant legislative changes to the Climate
Change Response Act are expected in time for the start of the Paris Agreement compliance
period – see carbon overview for more information.
Changing food regulations: In relation to regulation of the sale of products, there is a risk
that laws or regulations will be introduced in offshore markets and in New Zealand that seek
to reduce the advertising and consumption of certain food categories, require mandatory
dietary content disclosure or impose taxation measures that reference food content.
There is also increasing regulatory and industry scrutiny of product label health claims
which could result in further restrictions on the making of these health claims in the future.
Such measures could have an adverse effect on market prices.

Resource Consents The individual investee businesses require a number of consents and approvals to operate.
Each resource consent approval is issued for a specified term and is subject to conditions that
must be complied with and which may be periodically reviewed. Consents that expire may not
be renewed, or may be renewed on terms that are less favourable.
Any changes to resource consents that arise out of the review process could restrict business
as usual or be commercially unviable.
There is also a risk the conditions of the consents could be breached. The consequences
of such breaches or failure to hold consents can include abatement notices by the relevant
authority or enforcement orders by the Environment Court requiring that the non-compliant
or non-consented activities cease, remedial work be undertaken or compensation be paid.
Breaches of relevant consents or enforcement orders may also result in prosecution.
A successful prosecution could result in fines and/or changes to consent terms.

83
KAKARIKI FUND INFORMATION MEMORANDUM

RISKS AT THE SECTOR LEVEL (Continued)

Risk Description

Operating Costs The investee businesses will rely on certain suppliers of products and services used to develop
and operate them. Increases in the costs of inputs or a failure of a key supplier to provide
those products (i.e. trees to establish an orchard) or services could constrain or disrupt
operations. Both an increase in the cost of inputs and/or disruption to development plans
would reduce returns.

Relationships The performance of individual businesses will be heavily reliant on the expert skills of the
partners developing properties and running operations. In the case of non-performance
this may have an adverse effect on returns, reputation, trust and possibly result in termination
of agreements. In the case of termination, replacement partnerships will be required to
continue operations.

Disruptive Future changes in the methods and technology used to produce permanent crops cannot be
or Emerging predicted. Advances may result in existing production methods, plant varieties, or infrastructure
Technology becoming obsolete. Changes could also alter a sector’s competitive position. This could require
new investment to regain competitiveness, or divestment.

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 KAKARIKI FUND INFORMATION MEMORANDUM

11. What are the fees?

Kakariki will pay fees to MyFarm as the
Manager pursuant to the Kakariki Management
Agreement. These fees are described in the
table below, which includes the initial fees
payable if $100 million is raised in the Offer
and the Initial Investments outlined in this
Information Memorandum proceed. If greater
or lesser is raised in this Offer, the fee basis
will be the same as set out below but the fee
itself will differ.
In addition to the fees described in the
adjacent table which are based on asset
values and profitability, MyFarm will also
provide services directly to Kakariki’s
Investment Companies.
Services to Investment Companies will be
charged on a time and attendance basis,
and provided pursuant to agreements that
will be annexed to Kakariki Management
Agreement as investments are made.
These Investment Company services include
administration and monitoring of investment
properties and agreements with operational
Partners, financial control and accounting and
company governance.
MyFarm’s current charge out rate is $125/hour
for support staff and $250/hour for senior
managers. Disbursements for travel will be
recovered at cost and vehicle mileage will
be initially charged at $0.75/km.
The cost of direct MyFarm services to
Investment Companies is budgeted to cost
$50,000 p.a. for a company with an established
operation and $100,000 p.a. for an Investment
Company undertaking land development.

TYPES OF FEES
Initial Fee Basis Description

$200,000 0.2% of the fully Establishment Fee: This fee covers the costs of putting Kakariki and the Offer
paid value of together, sourcing the Initial Investments and underwriting the costs of third
funds raised in party issue expenses.
the Offer.

$1.25 million 1.25% p.a. Annual Fund Management Fee: This fee covers management and
p.a. administration of Kakariki including governance support, financial control,
accounting, property inspections and oversight of Operational Partners,
banking liaison, contract negotiation and communication with the board
and Shareholders.
The Annual Management Fee will initially be based on committed capital
until shares issued in the Offer are fully paid. Thereafter the fee will be based
on FUM at market valuation

NA 20% of profits in Profit Share: This fee incentivises MyFarm and aligns MyFarm and
excess of a hurdle Shareholder interests. For any given Financial Year, the Profit Share will be
rate of 10% p.a based on returns calculated at the end of each Financial Year as follows:
(i) the aggregate of net profit after tax for that Financial Year;
(ii) plus any increase in FUM in that Financial Year;
(iii) less any decrease in Funds Under Management carried forward from
the previous Financial Year
To avoid a drain on Fund cash reserves, the Profit Share will be payable in
a mix of cash and Shares in Kakariki. For each financial year in which returns
are greater than 10% (Relevant Financial Year), Kakariki will pay the Profit
Share retrospectively in the subsequent financial year as follows:
(i) MyFarm will receive in cash an amount equivalent to 5% of all
distributions in cash made by Kakariki in the Relevant Financial Year; and
(ii) the balance of the Profit Share will be paid by the issue of Shares to
MyFarm at an issue price determined using the closing value of FUM/Share
for the Relevant Financial Year

85
KAKARIKI INFORMATION MEMORANDUM

12. How to
complain
COMPLAINTS ABOUT FINANCIAL
PRODUCTS:

Promoter MyFarm AgInvest Trading

Investments Limited
8 Manchester
Andrew Watters Square
Grant Payton Level 1
Brett Delport
P.O. Box 91 Feilding
4740
Ph: +64 6 323 2954
Fax: +64 6 323 0599

Complaints about this financial product may also

be made to Kakariki c/- AgInvest Trading Limited.
Kakariki Limited is not a financial service provider
or part of the dispute resolution scheme.

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 KAKARIKI INFORMATION MEMORANDUM

13. Where you

can find more
information
INQUIRIES ABOUT FINANCIAL
PRODUCTS
Any queries about this investment can be
made to:
Grant Payton
Head of Sales
MyFarm Investments
8 Manchester Square
P.O. Box 91
Feilding 4740
Mobile: +64 29 445 5871
Ph: +64 6 323 2954 ext. 711
Fax: +64 6 323 0599
Email: grantp@myfarm.co.nz
Or
Karen Richardson
Sales
Mobile +64 21 2622 779
Email: karen@myfarm.co.nz

Further information regarding the FMCA

can be obtained on the MyFarm website
www.myfarm.co.nz/FMCA

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KAKARIKI INFORMATION MEMORANDUM
14. How to apply
Applications may be made online via a Syndex
wholesale investor account, or via the Application
Form included in this Information Memorandum.
Applications will be accepted generally in the
order of receipt but Kakariki reserves the right
to accept any application and reject any
application at its discretion, and or extend the
closing date. No applications will be considered
for acceptance unless:
a. You are able and willing to invest no less
than $100,000, and you are a person who
comes within Schedule 1, Wholesale Investor,
clause 3(2) (a)-(c) or 3(3)(a)-(b)(ii) (inclusive) of
the FMCA
b. Your application form is completed and
signed and accompanied by the applicable
Wholesale Investor/ Eligible Investor
Certificate and Adviser Confirmation
c. Your application is accompanied by all the
required Anti Money Laundering and Counter
Financing of Terrorism Act (AML) requirements
Applications not made via Syndex must be
completed on the application form
contained on the following pages of
this Information Memorandum.
APPLICATION INSTRUCTIONS
If you wish to apply for Shares in Kakariki via
the Application Form you must complete the
Application Form in full, in accordance with the
following Application Instructions.
COMPLETING THE APPLICATION FORM
PART ONE:
Contact Details /Investment Amount/
Signatures (pages 2–3).
This section must be completed by ALL
applicants who are also required to sign at the
bottom of page 2.
Please ensure that numbers 1 – 8 are
completed/read through.
PART TWO:
Investment Entity/Applicant Details (either
page 4, or 5, or pages: 6–8, or 9–10, or 11-12).
This section collects information about the
Investment Entity who is applying for shares in
Kakariki Fund Limited.
88
At the top of page 4, tick the box that best
describes the type of entity that is making the
application. Once you’ve selected the Investment
Entity, please proceed to the numbered pages
for your Entity and complete. At the top of the
first page for your Entity (e.g. page 6 for a Trust,
page 9 for a Company) there is a checklist of
the documentation to satisfy AML regulations
and which will need to accompany your
Application Form.
You only need to complete the Part Two
section for your type of entity.
For example, if the Investment Entity is a Trust
the ONLY pages of Part Two that you will
complete are pages 6 – 8 (number 11).
Please ensure each individual in control of,
or owning <25% of, the Investment Entity
completes the WHOLE BOX in the relevant
numbered section. If more room is required,
please copy additional page(s).
For example if there is a corporate Trustee with
more than two Directors, additional copies of
page 8 will need to be made until all Directors
have completed their individual details in an
Individual Details box.
Please ensure that identification documents and
address verification for every individual in control
of, or owning <25% of, the investment entity are
included with the Application Form.
Please contact the MyFarm Investments Team
if all of the required AML documentation won’t
accompany your Application to Invest. Once your
Application is received there will be LIMITED TIME
to supply any missing AML or Wholesale Investor
Certificate information/documentation.
Please note that both a satisfactory Wholesale
Investor Certificate and documentation
sufficient to comply with AML regulations are
requirements of confirming an Application and
allocation of shares in Kakariki Fund Limited. See
“Acceptance” on page 90 of this section.
PART THREE:
Investor Certificates (pages: 13 – 16)
Each investment entity will need to provide either
Certificate A, OR, Certificates B and C. in order to
confirm qualification as a “Wholesale Investor”
as set out in Schedule 1, clauses 3(2)(A) – (C) and
3(3)(A) – (B)(ii) (inclusive) of the FMCA.
Please ensure that a description of the type
of investment products and/or investment

experience specific to the Investment Entity
(and the trustees/directors if applicable) is
detailed on either Certificate A or Certificate B.
More information about the criteria for qualifying
as Wholesale Investor is contained on pages
92-95 of this Information Memorandum.
Essentially qualification as a “wholesale
investor” (Certificate A) will be about the assets
of the Investment Entity, or the contents and
value of the Investment Entity’s investment
portfolio but please note only specified
investments can be counted for the portfolio
value criteria. An Investment Entity may qualify
if it is controlled by a wholesale investor.
The other means of qualification as “wholesale
investor” is based on the investment experience
of the Investment Entity (Certificate B). If the
Investment Entity can demonstrate experience in
buying or selling “financial products” and believes
they are sufficiently experienced to be able to
discern the level of information they require to
understand the risks of the investment product
and make an informed decision. Certificate
B requires confirmation by a Chartered
Accountant, Lawyer, or Registered Financial
Adviser who will complete Certificate C. Please
note Certificate B
is not valid unless accompanied by
Certificate C completed by one of the
three named professionals.
If you are unsure if your investment entity
qualifies as a “wholesale investor”, please
consult your professional adviser (lawyer
or accountant).
If you have questions about completing
either Certificate A or B, please contact
the MyFarm Investments team at
investments@myfarm.co.nz
Additional documents
Please ensure the following documents are
enclosed with your application form:
1. Bank deposit slip;
2. Completed Wholesale Investor Certificate
or Eligible Investor Certificate and Adviser
Confirmation (if applicable);
3. All AML documentation and requirements
as per the checklist for your investment entity
(page 4 or 5 or 6 or 9 or 11 of Application Form)
4. Confirmation of electronic payment details
(if applicable)
KAKARIKI INFORMATION MEMORANDUM
Payment
Payments can be made by direct credit
to Sharp Tudhope Trust Account 06-0433-
0020939-00 ANZ, Grey Street, Tauranga.
Please include the reference ‘KFL’ and your
name.
Cheques must be drawn on a registered New
Zealand bank and crossed ‘not-transferable’
and be made out to Sharp Tudhope Trust
Account, and must not be post-dated.
MyFarm reserves the right to cancel any
application if payment is not made on the due
dates in accordance with the timetable provided
in the Information Memorandum OR any other
due date specified by MyFarm.
MyFarm, at its sole discretion, may charge
interest from any due date at its banker’s
current overdraft interest rate in the event
of late payment.
THIS APPLICATION WILL NOT BE ACCEPTED AND
THEREFORE NO FINANCIAL PRODUCTS WILL BE
ALLOTTED IN RESPECT OF THIS APPLICATION
UNLESS THE REQUIRED PAYMENT FOR THE
SHARES APPLIED FOR HAS BEEN RECEIVED.
Cancellation
You may only cancel this application by written
notice, if, after receiving information that causes
your reassessment of the investment, you, within
5 working days apply to cancel. You may not
cancel after the closing date. Upon cancellation,
any funds paid will be returned without any
further obligation and without interest.
FMCA - Eligibility
No subscriptions will be considered for
acceptance by Kakariki in respect of this offer
unless Kakariki, in their sole discretion, is
satisfied that the investment entity has proven
their qualification as a “Wholesale Investor” as set
out in Schedule 1, clauses 3(2)(A) – (C) and 3(3)(A)
– (B)(ii) (inclusive) of the FMCA and the relevant
certificate (if applicable) is completed in full
and attached.
For information on the requirements of Schedule
1, wholesale investors, clause 3(2)(a)-(c) or
3(3) (a)-(b)(ii) of the FMCA see pages 92-95 of
this Information Memorandum or contact the
MyFarm Investments team for more information
prior to submitting your application.
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INVESTOR CERTIFICATES
This offer is made under the provisions of the
FMCA. Section 39 of the FMCA provides an
offer of financial products requires disclosure
unless an exclusion under Part 1 of Schedule 1,
wholesale investors, of the FMCA applies
(see page 92).
Investor Certificates have to be completed by all
Investors (unless you are investing $750,000 or
more upon acceptance of your application, and
in the case of Eligible Investors, confirmed by
their Financial Advisor, Chartered Accountant
or Lawyer.
If you have any doubt on your eligibility for
this offer please consult your legal or
financial adviser.
AML REQUIREMENTS
The New Zealand Government has implemented
legislation intended to ensure New Zealand
remains a safe place to do business and deter
people from trying to launder money here.
The AML imposes a broad range of obligations
on certain financial institutions including
on those that offer syndicated investment
opportunities.
Before any subscription can be considered
(as against received) for acceptance the
Applicant must provide certified identification
documentation. This is required by law under
the AML.
The Applicant must provide certified documents
verifying:
1. Personal Identification (see Table 11,12 or 13)
2. Address Verification
3. Additional information (as required)
ACCEPTANCE
Applications will be accepted generally in the
order of receipt but Kakariki reserves the right
to accept any application and reject any
application in its discretion. Applications will
not be received until MyFarm has received:
a. a properly completed, signed application
form;
b. a properly completed, signed wholesale
investor certificate;
c. completed AML documentation;
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d. a bank deposit slip; and
e. payment of the deposit in cleared funds
With regard to (b), wholesale investor certificates
will be reviewed and you should take care to
ensure yours is properly completed.
ACCEPTABLE CERTIFIERS
Photocopies need to be certified as a true
copy by a “trusted person”4 who must sight the
original, state that the copied document is a
true copy and represents the identity of the
named individual.
A trusted person must not be under 16 years of
age, related/spouse/partner to the applicant or
living with the applicant.
See Table 10 on page 91 for "trusted persons."
Please ensure the Trusted person certifying the
copy of your identify documentation completes
the following:
“I, hereby certify this copied document is a true
copy of the original which I have sighted and
represents the identity of the named individual.”
The Trusted person must complete their name,
occupation, role/firm and signature on the copy
and date it. Please provide the contact details
of the Trusted person as it may be necessary to
contact them to verify the details of the identity
document or certification.
1. Personal Identification Documents5
Personal identification confirmation for each
beneficial owner of a non-personal Applicant is
required. This can be in the form of:
• One primary photo ID from table 11 or
• NZ driver licence with one additional
document from table 12 or
• One primary non-photo ID with one
secondary photo ID from table 13 on
page 92
2. Address Verification6
In order to verify the Applicant’s address, we
require a copy of an Applicant’s utility (power,
gas, telephone) statement with the Applicant’s
name and current address dated within the last
12 months.
For non-personal Applicants, please provide
verification of the registered office or principal
business address.

3. Additional AML Information Required
The Applicant must provide additional
information about source of funds or wealth
if the Applicant is:
• a trust
• a vehicle for holding personal assets
• a company with nominee shareholders,
or shares in bearer form or is a vehicle for
holding personal assets.
• certain non-resident individuals
4. Politically Exposed Persons
As part of all applications, MyFarm Investments
requires Applicants to confirm that they are
not “politically exposed persons” (PEP) for the
purposes of the AML rules. “Politically exposed
person” means:
a. an individual who holds, or has held at
any time in the preceding 12 months, in any
overseas country the prominent public function
of:
• Head of State or head of a country or
government; or
• Government minister or equivalent
• Senior politician; or
• Supreme Court Judge or equivalent senior
Judge; or
• Governor of a central bank or any other
position that has comparable influence to
the Governor of the Reserve Bank of
New Zealand; or
• Senior foreign representative, ambassador,
or high commissioner; or
• High-ranking member of the armed forces; or
• Board chair, chief executive, or chief financial
officer of, or any other position that has
comparable influence in, any State
enterprise; and
b. an immediate family member of a person
referred to in paragraph a, including:
• a spouse; or
• a partner, being a person who is
• considered by the relevant national law as
equivalent to a spouse; or
• a child and a child’s spouse or partner; or
• a parent; and
KAKARIKI INFORMATION MEMORANDUM
c. Having regard to information that is public
or readily available:
• any individual who is known to have joint
beneficial ownership of a legal entity or legal
arrangement, or any other close relationship,
with a person referred to in paragraph a;
• or any individual who has sole beneficial
ownership of a legal entity or legal
arrangement that is known to exist for the
benefit of a person described in paragraph a
If in doubt please contact your lawyer, accountant
or financial adviser if you think you may be a
“politically exposed person”
5. All documents must be current and valid.
6. All sources must be dated within last
3 months, online statements and PO Boxes
are unacceptable.
Table 10; Trusted persons for Certifying copies
Member of Parliament
Lawyer NZ Honorary Consul
Justice of the Peace Minister of Religion
Person with legal
authority to take
Notary Public
Statutory Declarations
in NZ
Registered Medical doctor NZ Police member
PHOTO ID OPTIONS
Please provide document from one of
Table 11, 12 or 13.
Table 11: One form of primary photo ID required
NZ Passport
NZ Certificate of Identity
Firearms license
Overseas passport
Foreign-issued national ID
Companies: Certificate of Incorporation, Constitution
(if applicable)
Partnership: Partnership agreement
Trusts: A trust deed. Note if the Applicant is a
discretionary trust, they will need to provide personal
identification confirmation for each trustee, as well as
a description of each class or type of beneficiary.
Society: Certificate of Incorporation, copy of Rules
Groups/Clubs: Meeting minutes
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OR SCHEDULE ONE, WHOLESALE

Table 12: New Zealand driver license with one
additional document listed here
NZ Defence photo ID
Police photo ID
IRD statement
Embossed credit, debit or eftpos card
NZ Government Agency document (e.g. Super Gold
Card)
Bank statement of registered bank
OR
Table 13: One form of primary non-photo ID with
one form of secondary photo ID
PRIMARY
NZ birth certificate
Certificate of NZ citizenship
Overseas citizenship certificate
Overseas birth certificate
Bank statement of registered bank
SECONDARY
NZ driver license
NZ Defence photo ID
INVESTORS – FMCA
Wholesale investor criteria under the exclusion
categories of schedule 1, Clauses 3(2)(a) – (c)
and (3) (3)(a)-(b)(ii) of the FMCA.
CERTIFICATE A (1. i)
A. Schedule 1, Clause 3(2)(a): An “investment
business” as defined in Schedule 1, clause 37
of the FMCA:
1. A person is an investment business if the
person is:
a. an entity whose principal business consists
of one or more of the following:
i. investing in financial products; or
ii. acting as an underwriter; or
iii. providing a financial adviser service
(within the meaning of section 9 of the
Financial Advisers Act 2008) in relation
to financial products; or
iv.providing a broking service (within the
meaning of section 77b of the Financial
Advisers Act 2008) in relation to financial
products; or
v. trading in financial products on behalf
of other persons; or

Police photo ID
b. a registered bank; or

International driving permit

c. an NBDT; or
d. a licenced insurer (within the meaning
of section 6(1) of the Insurance (Prudential
Supervision) Act 2010); or
e. a manager of a registered scheme, or
a discretionary investment management
service, that holds a market services
licence; or
f. a derivatives issuer that holds a market
services licence; or
g. a QFE or an authorised financial adviser
2. Subclause (1)(a) does not apply to an entity
if the entity was established or acquired with
a view to using it as an entity to which offers
of financial products may be made in reliance
upon the exclusion in Schedule 1, clause 3
of the FMCA.

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CERTIFICATE A (1. ii)
B. Schedule 1, Clause 3(2)(b): Investment
Criteria as specified in Schedule 1, clause 38 of
the FMCA:
1. A person (A) meets the investment activity
criteria for the purposes of clause 3(2)(b) if at
least 1 of the following paragraphs applies:
a. A owns, or at any time during the 2-year
period before the relevant time has owned,
a portfolio of specified financial products of
a value of at least $1 million (in aggregate)
b. A has, during the 2-year period before
the relevant time, carried out 1 or more
transactions to acquire specified financial
products where the amount payable under
those transactions (in aggregate) is at least
$1 million and the other parties to the
transactions are not associated persons of A:
c. A is an individual who has, within the last
10 years before the relevant time, been
employed or engaged in an investment
business and has, for at least 2 years
during that 10-year period, participated to a
material extent in the investment decisions
made by the investment business
2. For the purposes of:
a. Subclause (1)(a) above, in determining
the specified financial products owned by A,
the specified financial products owned by
an entity controlled by A may be treated as
being owned by A
b. Subclause (1)(b) above, in determining the
transactions carried out by A, transactions
carried out by an entity controlled by A may
be treated as carried out by A
3. The frameworks and methodologies
prescribed by the FMA under subpart 4 of Part
9 of this Act for the purposes of this clause (if
any) must be complied with when determining
whether any of the paragraphs of subclause (1)
above are satisfied.
4. In this clause, specified financial products, in
relation to A, means financial products other
than
a. Category 2 products
b. Interests in a retirement scheme
c. Financial products issued by an associated
person of A
KAKARIKI INFORMATION MEMORANDUM
CERTIFICATE A (1. iii)
C. Schedule 1, Clause 3(2)(c): A “large” investor
as defined in Schedule 1, clause 39 of the
FMCA:
A person is large if at least 1 of the following
paragraphs applies:
a. As at the last day of each of the 2 most
recently completed financial years of the
person before the relevant time, the net assets
of the person and the entities controlled by the
person exceeded $5 million
b. In each of the 2 most recently completed
financial years of the person before the
relevant time, the total consolidated turnover
of the person and the entities controlled by the
person exceeded $5 million
The frameworks and methodologies prescribed
by the FMA under subpart 4 of Part 9 of the
FMCA for the purposes of this clause (if any)
must be complied with when determining
whether either of the above are satisfied.
CERTIFICATE B
D. Schedule 1, Clause 3(3)(a): Eligible investor as
defined in Schedule 1, clause 41 of the FMCA:
The investor certifies as required by the Eligible
Person Certificate (and that certification is
confirmed by a financial or legal adviser) that
they have experience in acquiring or disposing
of financial products, noting the grounds under
which the certification is made.
INVESTOR CERTIFICATE NOT REQUIRED
E. Schedule 1, Clause 3(3)(b): Minimum
investment of $750,000:
In relation to the offer of financial products for
issue or sale:
(i) The minimum amount payable by the
person on acceptance of the offer is at
least $750,000.
DEFINITIONS
Note the terms used above have the meaning as
given to them in the relevant provisions of the
FMCA, including:
“Financial product” – means:
a. A debtsecurity Certificate A
(1.ii) only
b. An equity security
includes these
c. A managed investment product products
d. A derivative
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KAKARIKI INFORMATION MEMORANDUM

Figure 19: Are you a Qualifying Investor?

Eligible investor Investment criteria

Start Here Certificate B Certificate A (1. ii)

1. Are you 2. Do you have 3. Have you owned a 4. Have you

No Or Or Or
investing experience acquiring or portfolio of specified transacted specified
$750,000 disposing of financial financial products^ financial products^
or more upon products which enables totaling at least totaling at least
acceptance you to adequately $1 million during $1 million during
of your assess the offer? the last 2 years? the last 2 years?
application?

Yes Yes Yes Yes

You qualify for Eligible Investor

investment and
will not need to You will need
complete any to complete an
certification. Eligible Investor
certificate
and have this
confirmed.

^Financial product means: • A life insurance policy (within the meaning of section 2(1)
of the Securities Act 1978) issued before 1 January 2009)
A debt security
• Any other product specified by the regulations
An equity security
• A renewal or variation of the terms or conditions of any
A managed investment product
existing category 2 product
A derivative

For the purpose of 3) and 4) only, a ‘Specified Financial product’
does not include interests in a retirement scheme, products issued
by an associated person or “Category 2 products” which are any
of the following products:
• Bank term deposits
• Bonus bonds
• A call building society share
• A call credit union share
• A call debt security
• A share in a co-operative company (as defined in section 2(1)
of the Co-operatives Companies Act 1996)
• A unit in a cash or term portfolio investment entity (as defined
in the regulations)
• A consumer Credit contract (within the meaning of the
Credit Contracts and Consumer Finance Act (2003)
• A contract of insurance (other than an investment-linked
contract of insurance)
*A person is an investment business if the person is -
An entity whose principal business consists of 1 or more of
the following:
• Investing in financial products; or
• Acting as an underwriter; or
• Providing a financial advisor service (within the meaning of
section 9 of the Financial Advisers Act 2008) in relation to
financial products; or providing a broking service (within the
meaning of section 77b of the Financial Advisers Act 2008) in
relation to financial products on behalf of the other persons;
or A registered bank; or
• An NBDT; or
• A licenced insurer (within the meaning of section 6(1) of the
insurance (Prudential Supervision) Act 2010); or
• A manager of a registered scheme, or a discretionary investment
management service, that holds a market services licence; or
• A derivatives issuer that holds a market services licence; or

• A QFE or an authorised financial adviser

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 KAKARIKI INFORMATION MEMORANDUM

Large investor Investment business

Certificate A (1. iii) Certificate A (1. i)

5. Have you had net 6. Have you had a 7. Are you an You may not
Or consolidated turnover Or No qualify for
assets of over $5 investment business*
million for the last of assets over or participated in the investment.
2 financial years? $5 million for the last investment decisions Please seek
2 financial years of an investment further advice.
business for 2 years
over the last 10 years?

Yes Yes Yes

Wholesale
Investor
You will need
to complete
a Wholesale
Investor
certificate.

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15. Glossary
TERM MEANING

AERU Lincoln University’s Agribusiness Economic Research Unit

AGInvest AGInvest Holdings Limited, Parent company of MyFarm

AML Anti Money Laundering

Board The board of directors of Kakariki

CFT Counter Finance and Terrorism Act

cha Canopy hectares

Club Varieties Varieties of apples and other fruit that are developed by plant breeders who own the legal
rights to the variety and licence different growers and marketers to produce and sell the fruit
in return for royalty fees

Comvita Comvita Limited and includes where the context permits Kiwi Bee and other related companies

Company Kakariki

Contributed Capital The equity capital contributed by Shareholders

Council Primary Industry Council

DMS DMS Progrowers Limited and includes, where the context permits, its related companies

EBITDA Earnings before interest, tax, depreciation and amortisation

ESG Environmental, social, governance

ETS Emissions Trading Scheme

FMCA Financial Markets Conduct Act 2013

Freshmax Freshmax Limited and includes, where the context permits, its related companies

FY The financial year ended 30 June

Fund Kakariki

FUM Funds under management

HEA Horticultural Export Authority

Hop Revolution Hop Revolution Limited and includes, where the context permits, its related companies

Hop Syndicate A syndicate to be formed by MyFarm to acquire and develop a 130 cha hop garden at
Tapawera near Nelson

ICR Interest Cover Ratio, the ratio of EBITDA divided by interest expense

Information This Information Memorandum for an Offer of Shares in Kakariki Fund Limited dated
Memorandum 27 May 2019

Initial Investments The four proposed initial investments that the Kakariki Investment Committee has
conditionally approved subject to due diligence and finance, namely: the purchase of two
established kiwifruit orchards; the acquisition of land on which to develop 35 cha of Rockit
apples, and 2,000 cha of plantation manuka, and; a first option to acquire in 50% of the units
the Hop Syndicate formed

Investment Kakariki’s investment committee comprising the Kakariki Board and one representative
Committee of MyFarm

Investment A 100% owned subsidiary company of Kakariki formed to hold specific investments
Company

Kakariki Kakariki Fund Limited, NZBN 9429047258204

Kakariki Board The Board of Directors of Kakariki

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 KAKARIKI INFORMATION MEMORANDUM

Kaitiakitanga Maori guardianship/stewardship of the land and care for our water, fauna, flora and people

Kiwi Bee Kiwi Bee Medical Limited

Long Term Land A share farming agreement with Comvita for the development and management of
Use Agreement manuka plantations

LVR Loan to value ratio, the ratio of debt funding divided by total funding (debt plus
contributed capital)

Manager MyFarm

MER Management expense ratio (Kakariki operating expenses divided by FUM)

MGO An organic compound called methylglyoxal found in Manuka Honey

MPI Ministry for Primary Industries

MyFarm AGInvest Trading Limited trading as MyFarm

NZU New Zealand unit - a currency of the ETS

Offer The offer pursuant to this Information Memorandum of 100 million Shares at an issue price
of $1.00/Share paid to $0.25/Share on Application

Offeror Kakariki

OGR Orchard gate return. The return the grower receives from the sale of their crop less marketing,
distribution and post-harvest expenses (other than picking). The term is used generically in
this Information Memorandum to cover the ‘at the gate returns’ from farms, plantations,
orchards and gardens. For simplicity reasons OGR has been used to describe at the gate
returns for all permanent crops including hop gardens and plantation manuka

Operational The counterparties with whom Kakariki will contract for land development and management
Partners services, and postharvest services and marketing of products

Paris Agreement Agreement within the United Nations Framework Convention on Climate Change (UNFCCC),
dealing with greenhouse gas emissions mitigation, adaptation, and finance, starting in the
year 2020

Plantation Manuka Manuka specifically bred and planted to maximise the output and quality of Manuka honey

Promoter AgInvest Trading Limited trading as MyFarm

PVR Plant Variety Rights

Relevant Financial The year to which MyFarm’s Profit Share relates
Year

RockitTM Global Rockit Global Limited and includes, where the context permits, its related companies
Sacred Hill Sacred Hill Vineyards Limited and Sacred Hill Marlborough Vineyards Limited and includes,
where the context permits, their respective related companies
Shares The ordinary shares in Kakariki to be issued pursuant to this Offer
Shareholder A holder of Shares in Kakariki
SIPO Kakariki’s Statement of Investment Policy and Objectives as approved by the Kakariki Board
from time to time
Taiao Maori philosophy of healthy land, air, water and people
UMF ® Unique Manuka Factor is a quality mark identifying unadulterated manuka honey
Zespri Zespri International Limited

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KAKARIKI FUND
APPLICATION
FORM

103
READY TO APPLY? – Easy how to guide below
There are THREE (3) parts to the Application to Invest. Please ensure you complete all THREE
(3) parts as detailed below:

PART ONE
1. Please complete each section (1 – 8)
2. Have all persons associated with the investment entity sign at the bottom of page 3:

PART TWO
1. Please select what type of entity is making this Application to Invest, are you:
• Individual • Joint Individual
• Trust • Company
• Partnership • Other
2. Complete only the Part Two section that corresponds to your particular investment entity

PART THREE
1. Follow the ‘Figure 6: Are you a Wholesale Investor’ diagram to see which Investor Certificate
you need to complete as part of your Application to Invest.
2. If you are investing more than $750,000 upon acceptance of your application you do not
need an Investor Certificate;
Otherwise you need to complete:
• Certificate A or
• Certificate B and Certificate C (confirming the contents of Certificate B)

To help the New Zealand government fight the funding of terrorism and money laundering activities,
the law requires all financial institutions to obtain, verify and record information that identifies each
person who completes an Application to Invest. MyFarm is required to comply with these regulations.

What this means for you? We may ask for a range of identity or address verification documents as
well as written evidence of the individuals who have effective control or who benefit from the
investment entity, including in some cases, evidence of the initial and subsequent funding of the
entity. We may ask to see the originals of some of this documentation or require you to obtain copies
“certified” by a professional we trust. Please contact Brett Delport (investments@myfarm.co.nz) or 06
323 2954 ext 705 to discuss any of these requirements. If you are applying through an NZX Firm your
adviser may be able to confirm your identity and address on our behalf.

Identification and Address Verification Requirements

OPTION ONE Address verification: Original or certified
Provide one of the following: copy of one of the following:
¨ Current New Zealand Passport ¨ Rates notice
¨ Current international passport ¨ Utility bill (e.g. electricity or telephone
¨ New Zealand firearms license account)
¨ Bank Statement dated within the last
2 months
OPTION TWO
Provide one of the following: AND
¨ New Zealand driver license Bank documents: Original or certified copy
of one of the following:
¨ International driver license
¨ Bank Statement dated within the last
2 months
Plus one of: ¨ Deposit Slip
¨ New Zealand birth certificate
¨ Overseas birth certificate Note that the statement/deposit slip must
¨ New Zealand certificate of citizenship match the account details you provide Part
¨ Citizenship certificate issued by a One of the Application Form.
foreign Government
¨ Current credit card, debit card or eftpos
card signed by you and issue by a
registered New Zealand bank and a
bank statement issued by a registered
New Zealand bank dated within the
previous 12 months
1
1
APPLICATION FORM: Applicant Information & Signatures
Only to be completed by persons investing no less than $100,000 and who fall within Schedule 1,
clause (3)(2)(a)-(c) or (3)(3)(a)-(b)(ii) (inclusive) of the Financial Markets Conduct Act 2013.
PART ONE
To: KAKARIKI FUND LIMITED (“The Company”), C/- MyFarm Limited, PO Box 91, Feilding BROKER STAMP (if applicable)

Re: Application for issue of Ordinary Shares in KAKARIKI FUND LIMITED

Please complete the form using block capital letters.

IMPORTANT:
Please email completed form (Parts One, Two and Three) and supporting documentation to: investments@myfarm.co.nz.
Once acknowledged (within two working days) please ensure the original of the emailed application and ALL original/certified
documentation is to posted or couriered to: MyFarm Limited, PO Box 91, Feilding, 4740, as soon as possible.
1. CONTACT DETAILS
For all the correspondence regarding Kakariki Fund Limited.
Investment Entity Name:
Contact Name:
Postal Address: Physical Address (if different from Postal):

Postcode: Postcode:
Home Phone: Mobile Phone:
Email (we must have an email for the main contact):

2. NUMBER OF SHARES APPLIED FOR

The share price is $1-00 per share. Applications must be for a minimum of 100 000 shares.
A deposit of 25 cents per share applied for (a minimum of $25 000) must be paid with this application. When the shares are issued the
deposit must be applied to pay the initial call of 25 cents per share.

Number of Shares applied for: Total Investment: $

Deposit payment on Application: (25% of Total Investment) $

Deposit payment is required upon application. Direct credits to Sharp Tudhope Trust Account: ANZ, Cnr Spring and Grey Streets,
Tauranga
06-0433-0020939-00. Swift Code: ANZBNZ22. Reference: KFL
If paying by cheque, the cheques should be made payable to: ‘Sharp Tudhope Lawyers’, crossed ‘not transferable’ and must not be
post-dated.
Please ensure that any and all bank fees are added to your payment.
MyFarm reserves the right to reject any application if payment is not made on the due date.
3. DEDUCTION OF WITHHOLDING TAX RATE ON INTEREST PAYMENTS
Please circle one. If exempt from Resident Withholding Tax, please attach a copy of Certificate of Exemption): Non notification will be
taken as 33%.
Exempt 10.5% 17.5% 30% 33%

4. BANK ACCOUNT DETAILS)

Bank account details MUST be completed as investment returns will not be issued by cheque.
Account Name(s):

Account Number:
bank branch account number suffix

Compulsory Bank Swift Code:

Information for Account/IBAN Number:
Overseas Bank
Accounts Bank Account Name:
Please note: Bank account details are to be for the same Entity as named in this Application to Invest

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5. ANTI MONEY LAUNDERING (AML) AUTHORITY
I/We agree to co-operate with MyFarm and the Company in complying with any and all of their obligations relating to the AML and any corresponding
regulations including but not limited to providing them with such further information that they may require in order to discharge their obligations under the
AML. I/We consent to the disclosure of the information contained in this Application (and of any further information that may be required by MyFarm
and/or the Company) to third parties for that purpose. MyFarm reserves the right to reject any Application without completed AML requirements.

6. FINANCIAL MARKETS CONDUCTS ACT 2013

The investing entity is (or is controlled by) an entity which (Tick ONE of the following):
a is an “investment business” as defined in Schedule 1, cl 37 of the FMCA. Certificate A (1. i)
b meets the investment criteria specified in Schedule 1, clause 38 of the FMCA. Certificate A (1. ii)
c is “large” as defined in Schedule 1, clause 39 of the FMCA. Certificate A (1. iii)
d is an “eligible investor” as defined in Schedule 1, clause 41 of the FMCA. Certificates B and C
OR
The investing entity is:
e is investing a minimum of NZD $750,000 upon acceptance in accordance with Schedule 1, clause 3(3)(b)(i) or (ii) of the FMCA. An
Investor
Certificate is not required.
If e above applies I/We confirm that I/We understand that –
• the usual legal rules that require information to be given to investors for offers of financial products do not apply if the amount invested upfront by me/us
(plus any other investments I/we have already made in those financial products) is $750,000 or more; and
• I/We may not receive a complete and balanced set of information about this investment; and
• I/We have fewer legal protections for this investment; and
• this investment is not suitable for retail investors; and
• I/We have been advised to ask questions, read all documents carefully, and seek independent financial advice.
Before any subscription can be considered for acceptance by Kakariki in respect of this offer, Kakariki and MyFarm must be satisfied that the
correct certificates forming part of the application have been completed.
7. PLEASE READ THIS BEFORE SIGNING
I/We confirm that:
a) I/We have received a copy of the Information Memorandum.
b) Investment decisions are very important, and it has been made clear to me/us that I/we am/are free to take such other professional advice as I/we
feel necessary. I/We have been provided with all the relevant information I/we required to make the investment decision and I/we have taken any
advice that I/we think appropriate.
c) I/We acknowledge and accept the Disclaimers and Declarations of Interest as set out on page 3 of the Kakariki Fund Information Memorandum.
d) I/We accept that I/We must make payments totalling $1-00 per share as follows:
a. 25 cents per share upon acceptance of the application (to be paid from the deposit payable on application); and
b. The balance of 75 cents per share by one or more calls in multiples of 5 cents per share, upon no less than 30 days’ notice.
e) I/We consent to the issue of the shares to us. I/We acknowledge that the shares will be issued on the terms of the constitution of Kakariki, which
includes liability to pay future calls when required. I/we agree that upon issue of shares to me/us the deposit payment of 25 cents per share may be
applied in payment of the initial amount of 25 cents per share due upon issue. I/We confirm that I/we am/are, or the entity which takes up the
investment is able to make that payment.
f) I/We acknowledge that my/our completed application once submitted to MyFarm, cannot be withdrawn without authorisation by MyFarm.
g) Under the terms of the Unsolicited Electronic Messages Act 2007, I/we provide my/our consent to receiving commercial electronic messages for the
purpose of that Act.
h) I/We acknowledge that Sharp Tudhope does not act for me/us in connection with this investment.
8. DECLARATION AND SIGNATURE - ALL APPLICANTS TO COMPLETE
I/We hereby apply for the number of shares shown above and agree to accept such shares on and subject to the terms and conditions set out in the
Kakariki Fund Information Memorandum and on the terms set out in the Application instructions.
I/We understand that Kakariki and MyFarm Limited will hold personal information in respect of me/us in relation to my/our investment in Kakariki. I/We
understand that I/We may request to see and, if necessary, request the correction of the personal information.
I/We declare that all the details and statements made by me/us in this Application Form are complete and accurate.

Signature of Applicant: Date:

Signature of Applicant: Date:

Signature of Applicant: Date:

Signature of Applicant: Date:

PLEASE HAVE ALL APPLICANTS SIGN ABOVE
If the Application is signed under Power of Attorney (POA), a copy and a Certificate of Non-Revocation of POA and must be provided to MyFarm and
both the grantor and the attorney will be required to comply with AML regulations.

1
3
APPLICATION FORM: Entity/Applicant Details
PART TWO
PlPlease tick the box that best describes the type of entity that is making the application, then go to the numbered section and
complete as detailed.
Individual – 9 (page 4) Trust – 11 (pages 6-8) Partnership – 13 (pages 11-12)
Joint Individuals – 10 (page 5) Company – 12 (pages 9-10)

9. INDIVIDUAL
EACH Applicant will need to provide:
i. Personal Identification - a certified copy is required
Passport OR NZ firearms license
OR
NZ driver license AND one of § Embossed credit, debit or eftpos card
§ IRD statement
§ Bank statement from a registered bank

i. Address Verification – an original or certified copy is required of one of the following:

§ Utility (electricity, water, telephone, gas) statement
§ IRD tax notice or statement
§ Insurance policy document
§ Bank statement from a registered bank
§ A document issued by a NZ Government agency
The supplied document must state the Applicant’s name and CURRENT address and be dated within the last 12 months
Please fill out ALL areas and answer ALL questions.

APPLICANT (Please attach Resident Withholding Tax Exemption Certificate if you have one)
Legal FIRST Names(s) Legal FAMILY Name IRD Number

D.O.B. Place of Birth (Town/City): Country of Birth: Are you a New Zealand Citizen?
Circle one Yes No

Email:
Address:
Street:
Flat/Apartment No:
RD/PO Box No/Suburb: Town/City:
Country:
Postcode:
(if not New Zealand)
Current Photo Identification: Passport OR NZ Driver Licence number:
ID Expiry Date: NZ Driver Licence version number (5b.)
Politically Exposed Person (PEP) – PLEASE COMPLETE Circle one
Have you, or an immediate family member, held a public office position e.g. diplomat, high level judicial or military or ministerial position? Yes No
If yes, please specify:

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4
10. JOINT INDIVIDUAL
EACH Applicant will need to provide:
ii. Personal Identification - a certified copy is required
Passport OR NZ firearms license
OR
NZ driver license AND one of § Embossed credit, debit or eftpos card
§ IRD statement
§ Bank statement from a registered bank
iii. Address Verification – an original or certified copy is required of one of the following:
§ Utility (electricity, water, telephone, gas) statement
§ IRD tax notice or statement
§ Insurance policy document
§ Bank statement from a registered bank
§ A document issued by a NZ Government agency

The supplied document must state the Applicant’s name and CURRENT address and be dated within the last 12 months
Please complete an “Individual Details” box for EACH Applicant. Please fill out ALL areas and answer ALL questions.

APPLICANT (Please attach Resident Withholding Tax Exemption Certificate if you have one)
Legal FIRST Names(s) Legal FAMILY Name IRD Number

D.O.B. Place of Birth (Town/City): Country of Birth: Are you a New Zealand Citizen?
Circle one Yes No

Email:
Address:
Street:
Flat/Apartment No:
RD/PO Box No/Suburb: Town/City:
Country:
Postcode:
(if not New Zealand)
Current Photo Identification: Passport OR NZ Driver Licence number:
ID Expiry Date: NZ Driver Licence version number (5b.)
Politically Exposed Person (PEP) – PLEASE COMPLETE Circle one
Have you, or an immediate family member, held a public office position e.g. diplomat, high level judicial or military or ministerial position? Yes No
If yes, please specify:

APPLICANT (Please attach Resident Withholding Tax Exemption Certificate if you have one)
Legal FIRST Names(s) Legal FAMILY Name IRD Number

D.O.B. Place of Birth (Town/City): Country of Birth: Are you a New Zealand Citizen?
Circle one Yes No

Email:
Address:
Street:
Flat/Apartment No:
RD/PO Box No/Suburb: Town/City:
Country:
Postcode:
(if not New Zealand)
Current Photo Identification: Passport OR NZ Driver Licence number:
ID Expiry Date: NZ Driver Licence version number (5b.)
Politically Exposed Person (PEP) – PLEASE COMPLETE Circle one
Have you, or an immediate family member, held a public office position e.g. diplomat, high level judicial or military or ministerial position? Yes No
If yes, please specify:

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11. TRUST
EACH Applicant will need to provide:
i. Personal Identification - a certified copy is required
Passport OR NZ firearms license
OR
NZ driver license AND one of § Embossed credit, debit or eftpos card
§ IRD statement
§ Bank statement from a registered bank

ii. Address Verification – an original or certified copy is required of one of the following:
§ Utility (electricity, water, telephone, gas) statement
§ IRD tax notice or statement
§ Insurance policy document
§ Bank statement from a registered bank
§ A document issued by a NZ Government agency
The supplied document must state the Applicant’s name and CURRENT address and be dated within the last 12 months

Please provide the following documents for the Trust:

§ Certified Copy of Trust Deed § Bank confirmation of Trust bank account number
§ Certified Copy of Deed (s) of Retirement § Original or Certified Copy of verification of Trust Address – i.e. a utility
and/or Appointment of Trustee (s) (telephone, electricity, rates) statement showing the Trust or Trustee (s)
Name (s) and address and be dated within the last 12 months
§ Letter (on letterhead) from the Trust Accountant or Lawyer confirming the Trust’s “source of wealth or funds” – (section 23 of the
AML/CFT Act 2009) - particularly:
i. Identify the individuals who are the settlor(s), and the origin of the settlor’s wealth
ii. Identify the source of any income that the trust is receiving

Please complete BOTH sections – “Trust Details” and a “Trustee Details” section for ALL Trustees including (if applicable) the Corporate
Trustee. Please fill out ALL areas and answer ALL questions.
Trust Details:
Trust Name Trust IRD Number

Address:
Street:
Flat/Apartment No:
RD/PO Box No/Suburb: Town/City:
Country:
Postcode:
(if not New Zealand)
Trust Bank Account Details:
Account Name(s):
Account Number:

bank branch account number suffix

Trust Accountant: (Name and Email address)

Trust Lawyer: (Name and Email address)

Trust Beneficiaries: Please the Full Name and Date of Birth of ALL Beneficiaries – Regulation 6 – AML/CFT Act 2009 - MUST BE COMPLETED
Full Name - Use another page if required. Date of Birth

1 6
Trustee Details – if you have a corporate Trustee please complete their section on page 8
TRUSTEE ONE – Individual Details:(Please attach Resident Withholding Tax Exemption Certificate if you have one)
Legal FIRST Names(s) Legal FAMILY Name IRD Number

D.O.B. Place of Birth (Town/City): Country of Birth: Are you a New Zealand Citizen?
Circle one Yes No

Email:
Address:
Street:
Flat/Apartment No:
RD/PO Box No/Suburb: Town/City:
Country:
Postcode:
(if not New Zealand)
Current Photo Identification: Passport OR NZ Driver Licence number:
ID Expiry Date: NZ Driver Licence version number (5b.)
Politically Exposed Person (PEP) – PLEASE COMPLETE Circle one
Have you, or an immediate family member, held a public office position e.g. diplomat, high level judicial or military or ministerial position? Yes No
If yes, please specify:

TRUSTEE TWO – Individual Details (Please attach Resident Withholding Tax Exemption Certificate if you have one)
Legal FIRST Names(s) Legal FAMILY Name IRD Number

D.O.B. Place of Birth (Town/City): Country of Birth: Are you a New Zealand Citizen?
Circle one Yes No

Email:
Address:
Street:
Flat/Apartment No:
RD/PO Box No/Suburb: Town/City:
Country:
Postcode:
(if not New Zealand)
Current Photo Identification: Passport OR NZ Driver Licence number:
ID Expiry Date: NZ Driver Licence version number (5b.)
Politically Exposed Person (PEP) – PLEASE COMPLETE Circle one
Have you, or an immediate family member, held a public office position e.g. diplomat, high level judicial or military or ministerial position? Yes No
If yes, please specify:

TRUSTEE THREE – Individual Details (Please attach Resident Withholding Tax Exemption Certificate if you have one)
Legal FIRST Names(s) Legal FAMILY Name IRD Number

D.O.B. Place of Birth (Town/City): Country of Birth: Are you a New Zealand Citizen?
Circle one Yes No

Email:
Address:
Street:
Flat/Apartment No:
RD/PO Box No/Suburb: Town/City:
Country:
Postcode:
(if not New Zealand)
Current Photo Identification: Passport OR NZ Driver Licence number:
ID Expiry Date: NZ Driver Licence version number (5b.)
Politically Exposed Person (PEP) – PLEASE COMPLETE Circle one
Have you, or an immediate family member, held a public office position e.g. diplomat, high level judicial or military or ministerial position? Yes No
If yes, please specify:
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7
Corporate Trustee Details: Please print additional pages (or use page 10) for ALL Directors and >25% Shareholders
Corporate Trustee/Trustee Company Name Company Number

Country of incorporation: Company IRD No

New Zealand Australia
(please circle if applicable)
Other (please specify country
of incorporation)
Address: Flat/Apartment No: Street:

RD/PO Box No/Suburb: Town/City:

Country:
Postcode:
(if not New Zealand)
List ALL Company Directors plus ALL Shareholders who own 25% or more of the Company.
Full Name - Use another page if required Relationship to the Company Percentage Held

Please have ALL of the above Directors and Shareholders complete a Director/Shareholder Box Below:
COMPANY DIRECTOR – Individual Details:(Please attach Resident Withholding Tax Exemption Certificate if you have one)
Legal FIRST Names(s) Legal FAMILY Name IRD Number

D.O.B. Place of Birth (Town/City): Country of Birth: Are you a New Zealand Citizen?
Circle one Yes No

Email:
Address:
Street:
Flat/Apartment No:
RD/PO Box No/Suburb: Town/City:
Country:
Postcode:
(if not New Zealand)
Current Photo Identification: Passport OR NZ Driver Licence number:
ID Expiry Date: NZ Driver Licence version number (5b.)
Politically Exposed Person (PEP) – PLEASE COMPLETE Circle one
Have you, or an immediate family member, held a public office position e.g. diplomat, high level judicial or military or ministerial position? Yes No
If yes, please specify:
COMPANY DIRECTOR / SHAREHOLDER – Individual Details – Individual Details (Please attach Resident Withholding Tax Exemption Certificate
ifLegal
you have one)Names(s)
FIRST Legal FAMILY Name IRD Number

D.O.B. Place of Birth (Town/City): Country of Birth: Are you a New Zealand Citizen?
Circle one Yes No

Email:
Address:
Street:
Flat/Apartment No:
RD/PO Box No/Suburb: Town/City:
Country:
Postcode:
(if not New Zealand)
Current Photo Identification: Passport OR NZ Driver Licence number:
ID Expiry Date: NZ Driver Licence version number (5b.)
Politically Exposed Person (PEP) – PLEASE COMPLETE Circle one
Have you, or an immediate family member, held a public office position e.g. diplomat, high level judicial or military or ministerial position? Yes No
If yes, please specify:

1
8
12. COMPANY
EACH Applicant will need to provide:
i. Personal Identification - a certified copy is required
Passport OR NZ firearms license
OR
NZ driver license AND one of § Embossed credit, debit or eftpos card
§ IRD statement
§ Bank statement from a registered bank

ii. Address Verification – an original or certified copy is required of one of the following:
§ Utility (electricity, water, telephone, gas) statement
§ IRD tax notice or statement
§ Insurance policy document
§ Bank statement from a registered bank
§ A document issued by a NZ Government agency
The supplied document must state the Applicant’s name and CURRENT address and be dated within the last 12 months

Please provide the following documents for the Company:

§ Copy of Company Certificate of Incorporation § Bank confirmation of Company bank account number
§ Original or Certified Copy of verification of Company
Address – i.e. a utility (telephone, electricity, rates)
statement showing the Company Name and address
and be dated within the last 12 months
8
If Requested
§ Copy of Company Constitution and/or Incorporation documents (if requested)
§ Letter (on letterhead) from the Company Accountant or Lawyer confirming the Company’s “source of wealth or funds”

Please complete BOTH sections – “Company Details” and a “Company Director or Shareholder Details” section for ALL Directors and
Shareholders owning 25% or more of the Company (Beneficial Owners) . Please fill out all areas and answer all questions.

Company Details:
Company Name: Company Number

Country of incorporation: Company IRD No

New Zealand Australia
(please circle if applicable)
Other (please specify country
of incorporation)
Address: Flat/Apartment No: Street:

RD/PO Box No/Suburb: Town/City:

Country:
Postcode:
(if not New Zealand)
Company Bank Account Details:
Account Name(s):
Account Number:

bank branch account number suffix

Company Accountant: (Name and Email
address)
Company Lawyer: (Name and Email address)
List ALL Company Directors plus ALL Shareholders who own 25% or more of the Company.
If any >25% Shareholder is a Trust or Company, please complete their details in the required section
Full Name - Use another page if required Relationship to the Company Percentage Held

1
9
DIRECTOR ONE – Individual Details:(Please attach Resident Withholding Tax Exemption Certificate if you have one)
Legal FIRST Names(s) Legal FAMILY Name IRD Number

D.O.B. Place of Birth (Town/City): Country of Birth: Are you a New Zealand Citizen?
Circle one Yes No

Email:
Address:
Street:
Flat/Apartment No:
RD/PO Box No/Suburb: Town/City:
Country:
Postcode:
(if not New Zealand)
Current Photo Identification: Passport OR NZ Driver Licence number:
ID Expiry Date: NZ Driver Licence version number (5b.)
Politically Exposed Person (PEP) – PLEASE COMPLETE Circle one
Have you, or an immediate family member, held a public office position e.g. diplomat, high level judicial or military or ministerial position? Yes No
If yes, please specify:

DIRECTOR TWO – Individual Details (Please attach Resident Withholding Tax Exemption Certificate if you have one)
Legal FIRST Names(s) Legal FAMILY Name IRD Number

D.O.B. Place of Birth (Town/City): Country of Birth: Are you a New Zealand Citizen?
Circle one Yes No
Email:
Address:
Street:
Flat/Apartment No:
RD/PO Box No/Suburb: Town/City:
Country:
Postcode:
(if not New Zealand)
Current Photo Identification: Passport OR NZ Driver Licence number:
ID Expiry Date: NZ Driver Licence version number (5b.)
Politically Exposed Person (PEP) – PLEASE COMPLETE Circle one
Have you, or an immediate family member, held a public office position e.g. diplomat, high level judicial or military or ministerial position? Yes No
If yes, please specify:

>25% SHAREHOLDER E – Individual Details (Please attach Resident Withholding Tax Exemption Certificate if you have one)
Legal FIRST Names(s) Legal FAMILY Name IRD Number

D.O.B. Place of Birth (Town/City): Country of Birth: Are you a New Zealand Citizen?
Circle one Yes No

Email:
Address:
Street:
Flat/Apartment No:
RD/PO Box No/Suburb: Town/City:
Country:
Postcode:
(if not New Zealand)
Current Photo Identification: Passport OR NZ Driver Licence number:
ID Expiry Date: NZ Driver Licence version number (5b.)
Politically Exposed Person (PEP) – PLEASE COMPLETE Circle one
Have you, or an immediate family member, held a public office position e.g. diplomat, high level judicial or military or ministerial position? Yes No
If yes, please specify:

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10
 13. PARTNERSHIP
EACH Applicant will need to provide:
i. Personal Identification - a certified copy is required
Passport OR NZ firearms license
OR
NZ driver license AND one of § Embossed credit, debit or eftpos card
§ IRD statement
§ Bank statement from a registered bank

ii. Address Verification – an original or certified copy is required of one of the following:
§ Utility (electricity, water, telephone, gas) statement
§ IRD tax notice or statement
§ Insurance policy document
§ Bank statement from a registered bank
§ A document issued by a NZ Government agency
The supplied document must state the Applicant’s name and CURRENT address and be dated within the last 12 months

Please provide the following documents for the Partnership:

§ Certified Copy of Partnership Agreement
§ Certified Copy of any other Deed (s) or
Agreement (s) that gives authority for other
persons/entities to act on behalf of the
Partnership
§ Bank confirmation of Partnership bank account number
§ Original or Certified Copy of verification of Partnership Address – i.e. a
utility (telephone, electricity, rates) statement showing the Partnership
or Partner (s) Name (s) and address and be dated within the last 12
months

If requested:
§ Letter (on letterhead) from the Partnership Accountant or Lawyer confirming the Partnership’s “source of wealth or funds”

Please complete BOTH sections – “Partnership Details” and a “Partner Details” section for ALL Partners. If the Partners are one or more
Trust (s) or Company (ies) please use the relevant section of the application form, i.e. Trust (s) (pages 6 – 8) or Company (ies) or (pages 9 –
10).. Please fill out ALL areas and answer ALL questions
Partnership Details
Partnership Name Registration Number

Partnership Trading Name (if different) IRD Number

Place of Registration Circle ONE (if applicable) Other (please specify

New Zealand Australia country of registration)
Address: Flat/Apartment No: Street:

RD/PO Box No/Suburb: Town/City:

Country:
Postcode:
(if not New Zealand)
Partnership Bank Account Details:

Account Name(s):
Account Number:

bank branch account number suffix

Partnership Accountant: (Name and Email
address)
Partnership Lawyer: (Name and Email
address)
List ALL Partners and their percentage % ownership of the Partnership
If any >25% Partner is a Trust or Company, please complete their details in the required section
Full Name - Use another page if required Percentage Held

11
PARTNER ONE – Individual Details:(Please attach Resident Withholding Tax Exemption Certificate if you have one)
Legal FIRST Names(s) Legal FAMILY Name IRD Number

D.O.B. Place of Birth (Town/City): Country of Birth: Are you a New Zealand Citizen?
Circle one Yes No
Email:
Address:
Street:
Flat/Apartment No:
RD/PO Box No/Suburb: Town/City:
Country:
Postcode:
(if not New Zealand)
Current Photo Identification: Passport OR NZ Driver Licence number:
ID Expiry Date: NZ Driver Licence version number (5b.)
Politically Exposed Person (PEP) – PLEASE COMPLETE Circle one
Have you, or an immediate family member, held a public office position e.g. diplomat, high level judicial or military or ministerial position? Yes No
If yes, please specify:

PARTNER TWO – Individual Details (Please attach Resident Withholding Tax Exemption Certificate if you have one)
Legal FIRST Names(s) Legal FAMILY Name IRD Number

D.O.B. Place of Birth (Town/City): Country of Birth: Are you a New Zealand Citizen?
Circle one Yes No

Email:
Address:
Street:
Flat/Apartment No:
RD/PO Box No/Suburb: Town/City:
Country:
Postcode:
(if not New Zealand)
Current Photo Identification: Passport OR NZ Driver Licence number:
ID Expiry Date: NZ Driver Licence version number (5b.)
Politically Exposed Person (PEP) – PLEASE COMPLETE Circle one
Have you, or an immediate family member, held a public office position e.g. diplomat, high level judicial or military or ministerial position? Yes No
If yes, please specify:

PARTNER THREE – Individual Details (Please attach Resident Withholding Tax Exemption Certificate if you have one)
Legal FIRST Names(s) Legal FAMILY Name IRD Number

D.O.B. Place of Birth (Town/City): Country of Birth: Are you a New Zealand Citizen?
Circle one Yes No

Email:
Address:
Street:
Flat/Apartment No:
RD/PO Box No/Suburb: Town/City:
Country:
Postcode:
(if not New Zealand)
Current Photo Identification: Passport OR NZ Driver Licence number:
ID Expiry Date: NZ Driver Licence version number (5b.)
Politically Exposed Person (PEP) – PLEASE COMPLETE Circle one
Have you, or an immediate family member, held a public office position e.g. diplomat, high level judicial or military or ministerial position? Yes No
If yes, please specify:

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12
INVESTOR CERTIFICATES PART THREE

PLEASE COMPLETE AN INVESTOR CERTIFICATE FOR EACH ENTITY

Please read the instructions below carefully to ensure that you provide all of the documentation required to meet the
requirements of Schedule 1, clauses 3(2)(a) – (c) or (3)(3)(a)- (b)(ii) (inclusive) of the Financial Markets Conduct Act 2013
(“FMCA”).

Before any subscription can be considered (as AGAINST received) for acceptance by Kakariki Fund Limited in respect of the offer of
ordinary shares in Kakariki Fund Limited the investing party (and potentially their financial or legal adviser) will be required to complete
one of the following Certificates:

Full details of the requirements for a “Wholesale Investor” and an “Eligible Investor” are more fully explained on pages 92 - 96
of this Information Memorandum.

CERTIFICATE A
Certificate A (1. i) Certificate A (1. ii) Certificate A (1. iii)
An “Investment Business” Meets “Investment Criteria” A “Large” Investor
Schedule 1, Clause 3(2)(a) FMCA Schedule 1, Clause 3(2)(b) FMCA Schedule 1, Clause 3(2)(c) FMCA
Act – refer to page 95 Act – refer to page 95 Act – refer to page96
a. In the last 2 years owns a a. In the last 2 years
portfolio of “specified owned/controlled net assets
financial products” of $1 m+ of $5 m+
b. In the last 2 years carried out b. In the last 2 years had
transactions to acquire $1 m+ turnover of $5 m+
of “specified financial
products”
NB: Excludes Category 2
products

OR

CERTIFICATE C
CERTIFICATE B
§ Completed by either:
“Eligible Investor”
̶ Chartered accountant
Schedule 1, Clause 3(3)(a) (page 60)
̶ Lawyer
Has experience in buying and selling financial AND
products sufficient to assess: ̶ Financial advisor
a. The merits and risks of the investment § Confirms the certification made in
completed Certificate B
b. The information required to assess the
investment § Confirms the investor has been sufficiently
advised of the consequences of
c. The adequacy of the information provided completing Certificate B
by MyFarm
§ Confirms there is no reason to believe the
contents of Certificate B are incorrect

If you have any doubts about your eligibility for this offer or the certificates required please contact Brett Delport
(investments@myfarm.co.nz).

Please note: If you have invested with MyFarm within the last two years you may not need to provide a Wholesale Investor Certificate.
Please contact the MyFarm Investments team (investments@myfarm.co.nz) to confirm if the Wholesale Investor Certificate utilised for
your most recent MyFarm investment is current and able to be used for Kakariki Fund Limited.

1
13
14. CERTIFICATE A (1. i – iii inclusive) – WHOLESALE INVESTOR CERTIFICATE
This certificate is required to verify that the investor meets the respective eligibility requirements as a “Wholesale Investor” under Schedule
1, clause 3(2)(a) – (c) of the FMCA and accordingly confirm that neither MyFarm (as Promoter), nor Kakariki Fund Limited (as Issuer) are
required to make disclosure in respect of this offer under Part 3 of the FMCA.

In relation to the offer by Kakariki Fund Limited of ordinary shares (“the financial product” on offer and “the transaction”), that:

1) I/WE, (“the Investor”)

HEREBY CERTIFY THAT I am/we are a Wholesale Investor under Schedule 1, clause 3(2) of the FMCA of the following
kind (tick one of the following):

Sch.1, Clause 3(2)(a): An “investment business” as defined in Schedule 1, cl 37 of the FMCA (see A on page 92 of
i. £
the IM)
ii. £ Sch. 1, Clause 3(2)(b): I/We meet the investment criteria specified in Schedule 1, clause 38 of the FMCA (see B on
page 93 of the IM)
iii. £ Sch. 1, Clause 3(2)(c): A “large” investor as defined in Schedule 1, clause 39 of the FMCA. (see C on page 93 of the IM)

Full definitions of each of the exclusions below can be found on pages 55-57 of the Information Memorandum

2) The grounds on which I/we claim that one of the above applies is (a brief description is mandatory – refer to pages 92 - 93):
THIS SECTION MUST BE COMPLETED

3) I/We do understand the consequences of certifying myself or ourselves to be a Wholesale Investor.

Signed at this day of 2019

Signature: (the Investor)

WARNING:
The law normally requires people who offer financial products to give information to investors before they invest. This information is
designed to help investors make an informed decision.
If you are a wholesale investor, the usual rules do not apply to offers of financial products made to you. As a result, you may not receive a
complete and balanced set of information. You will also have fewer other legal protection for these investments.
Ask questions, read all documents carefully, and seek independent financial advice before committing yourself.

Offence
It is an offence to give a certificate knowing that it is false or misleading in a material particular. The offence has a penalty of a fine not
exceeding $50,000

1
14
15. CERTIFICATE B – ELIGIBLE INVESTOR CERTIFICATE
This certificate requires the completion of 16. Certificate C – Confirmation of Certification on the following page.

This Certificate and Confirmation (in the form of Certificate C on the following page) is required to verify that the investor meets the
eligibility requirements as an “Eligible Investor” under Schedule 1, clause 3(3)(a) of the FMCA and accordingly confirm that neither
MyFarm (as Promoter), nor Kakariki Fund Limited (as Issuer) are required to make disclosure in respect of this offer under Part 3 of the
FMCA.

Full definitions of “Eligible investor” can be found on page 93 of the Information Memorandum, including the financial products which
qualify.

In relation to the offer by Kakariki Fund Limited of ordinary shares (“the Financial Product” on offer and “the transaction”)

I/We, (“the Investor”)

CERTIFY THAT:
1. I/We have previous experience in acquiring or disposing of financial products* that allows me/us to assess:
a. The merits of the transaction, including assessing the value and the risks of the financial products involved;
and
b. My/Our own information needs in relation to the transaction; and
c. The adequacy of the information provided by MyFarm Limited as the offeror
2. I/We do understand the consequences of certifying myself/ourselves to be Eligible Investor.
3. The grounds for this certification are (a brief description is mandatory – refer to pages 92 - 93
THIS SECTION MUST BE COMPLETED

Signed at this day of 2019

Signature (the Investor)

*A debt or equity security, a managed investment product or a derivative.

WARNING:
The law normally requires people who offer financial products to give information to investors before they invest. This information is
designed to help investors make an informed decision.
If you are a wholesale investor, the usual rules do not apply to offers of financial products made to you. As a result, you may not receive a
complete and balanced set of information. You will also have fewer other legal protection for these investments.
Ask questions, read all documents carefully, and seek independent financial advice before committing yourself.

Offence
It is an offence to give a certificate knowing that it is false or misleading in a material particular. The offence has a penalty of a fine not
exceeding $50,000

CERTIFICATE B WILL NOT BE ACCEPTED WITHOUT CERTIFICATE C

15
16. CERTIFICATE C – CONFIRMATION OF CERTIFICATION
This certificate is required to confirm Certificate B. Certificate B will not be accepted without Certificate C.

I, as a financial advisor/ chartered accountant/ lawyer

Certify that I have considered (“the Investor”)

grounds for his/her/their certification and I:
1. Am satisfied that the Investor has been sufficiently advised of the consequences of the certification, and:
2. Have no reason to believe that the certification is incorrect or that further information or investigation is required as to
whether or not the certification is correct.

Signed at this day of 2019

Signature
(Confirming Certifier financial adviser/ chartered accountant/ lawyer)

WARNING:
The law normally requires people who offer financial products to give information to investors before they invest. This information is
designed to help investors make an informed decision.
If you are a wholesale investor, the usual rules do not apply to offers of financial products made to you. As a result, you may not receive a
complete and balanced set of information. You will also have fewer other legal protections for these investments.
Ask questions, read all documents carefully, and seek independent financial advice before committing yourself.

Offence
It is an offence to give a certificate knowing that it is false or misleading in a material particular. The offence has a penalty of a fine not
exceeding $50,000.

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Phone +64 6 323 2954 | Fax +64 6 323 0599
www.kakariki.co.nz