RANGA Rangatira Limited

Chairman's report

I am pleased to report on a year which has seen a further solid result for Rangatira. The total return to shareholders has been 13.9% which compares with the average for balanced New Zealand investment funds of 4.9%, and for growth funds of 5.10%. Rangatira’s dividends for the year have been increased from 34c to 37c, and assessed asset backing has increased by a further 66c to $7.90 per share. It is encouraging to see our investment strategies continuing to produce positive results, and while conscious of the risks from high interest and exchange rates, your Directors and management are looking forward to further earnings improvement in the year ahead.

LISTED INVESTMENTS

Our strategy of focusing on a small number of high quality shares has resulted this year in a slight underperformance against the New Zealand NZX50 index, and a more significant shortfall against the Australian ASX200. Our New Zealand portfolio return for the March 2007 year was 10.2% (0.7% less than the NZX50 index), while our Australian portfolio gained 8.6% (4.6% less than the Australian ASX200 on a currency adjusted basis). Our small portfolio of International listed investments declined 0.3% in NZ dollar terms.

Shareholders will recall that last year we outperformed the Australian index by 12.3%, largely due to our heavier weighting of major resource stocks. For the year under review our resource stocks – BHP, Rio Tinto and Woodside – underperformed the market and our relative performance was impacted by this. Since balance date, there has been a quite significant price uplift for these companies, and we retain our long-term view that they are strongly positioned to provide increasing profits and dividends.

The following table summarises the spread of our listed investments –

2007 2006

$m $m

New Zealand 21.3 20.2

Australia 34.9 33.4

International 3.2 3.2

Total 59.4 56.8 Rangatira Limited 70th Annual Report 2007 6

UNLISTED INVESTMENTS

Our unlisted investment portfolio comprises significant holdings in eight companies. We have Board representation and provide strategic input in all cases.

Operating Earnings from this portfolio were 5.5% higher than last year, made up of quite a wide range of above and below budget performances – highlighting the benefit of the portfolio approach in spreading risk. Heller Tasty had a particularly strong result as demand for its bacon, ham, and smallgoods products continued to grow. On the other hand, Contract Resources had a more difficult year as it implemented an organisational restructure; the unexpected strengthening of the currency together with substantial cost increases put pressure on other companies.

We are continuing to support growth strategies, and the associated capital and people investment, in each of the companies in our portfolio.

INVESTMENT ACTIVITY

At balance date we had 39% (last year 38%) of our assets in listed shares, 60% (60%) in unlisted companies, and 1% (2%) in interest-earning investments. During the year we took the opportunity to complete our exit from Tasman Farms and Tru-Test – gains from these realisations were $1.6m. While we remain relatively fully invested, we have capacity to undertake new investments and continue to evaluate opportunities.

RESULTS FOR THE YEAR

(a) Reported Financial Performance

Our net surplus after tax was $8.1m (last year $8.8m).

The following table shows the main components –

2006/07 2005/06

$m $m

Operating Earnings 6.5 6.5

Gains from Realisation of Investments 1.6 2.3

Net Surplus after Tax 8.1 8.8

While Operating Earnings were unchanged from the previous year, the previous year’s result was significantly influenced by receipt of a large one-off dividend in the listed equity portfolio.Rangatira Limited 70th Annual Report 2007 7

(b) Change in Value of Listed Investments

In addition to dividends and realised gains, our listed investments showed an unrealised gain for the year of $2.6 million.

(c) Change in Value of Unlisted Investments

Directors annually reassess the market value of our unlisted investments with the assistance of specialist independent advice. As at 31 March 2007 we assessed the market value of our unlisted investments to be between $6m and $25m above the value at which they have been included in our accounts (last year $1m below to $18m above). Our methodology uses recognised valuation principles and calculations, and is undertaken on a rigorous and consistent basis.

(d) Total Return

The total return to Rangatira shareholders consists of dividends received plus the change in the company’s assessed asset backing per share.

The total return for the year to 31 March 2007 was 100 cents per share (last year 129 cents) –

$ per Share $ per Share

31 March 2007 31 March 2006

Asset Backing from Financial Statements 7.03 6.76

Additional Value of Unlisted Companies* 0.87 0.48

Assessed Asset Backing 7.90 7.24

*using the mid-point of the assessed additional value range.

Return for Return for

2006/07 2005/06

¢/share ¢/share

Change in Assessed Asset Backing 66 97

Dividends Paid 34 32

Total Return 100 129

Total Return on Assessed Asset Backing +13.9% +20.5%Rangatira Limited 70th Annual Report 2007 8

(e) Comparative Performance

Rangatira’s total return of +13.9% compares with the average return for the March 2007 year for balanced New Zealand investment funds (as measured by the Eriksen Master Trust Survey) of +4.9%, and for growth funds of +5.10%. These funds are reasonably comparable alternatives for many shareholders to an investment in Rangatira. Rangatira’s average return for the last five years of +10.5% compares with +6.3% for balanced funds and +6.8% for growth funds. Our objective is to maintain a medium term average return above the comparable figure for managed investment funds.

DIVIDEND

The Board has declared a final fully-imputed dividend of 21 cents per share resulting in a total dividend of 37 cents fully imputed (last year 34 cents). This represents 81% of our reported surplus after tax (last year 68%).

OUTLOOK

New Zealand is wrestling with a particularly difficult adjustment as foreign investors continue to see our economy as a rewarding and secure haven for surplus cash. The unexpected strength in the dairy industry, something which is fundamentally good for the country, is reinforcing that view. Money for consumers is freely available and the desire to spend is strong – but with full employment inflation is an almost certain outcome, and interest rates are having to be increased to worrying levels in an endeavour to restore balance. In this environment your Directors are becoming more cautious about the economic outlook – a sharp rather than gradual slowdown in New Zealand is emerging as a real risk.

Australia faces somewhat similar problems, although with a much larger and more diverse economy their outlook is less worrying than that in New Zealand.

For both countries much depends on the continuation of demand from China, India, and other developing economies for resources and food. There is nothing on the horizon to suggest that is likely to falter in the foreseeable future, and so we maintain a generally positive view of prospects for our listed investments in both New Zealand and Australia over the medium to long term.Rangatira Limited 70th Annual Report 2007 9

While conscious of a growing degree of economic risk, we are nevertheless expecting reasonably satisfactory trading conditions for most of our unlisted investments in the year ahead and expect a further improvement in Operating Earnings.

APPRECIATION

This has been a further good year for Rangatira, and on your behalf I sincerely thank my fellow Directors, Rangatira’s management team, and the management and staff of our unlisted investment companies for their ongoing commitment and effort.

R M Gough

Chairman

15 June 2007

v2 Report - Additional Information Supplement RANGA Rangatira Limited	IPOs and Investment Opportunities
Press releases SOLID RESULT AND INCREASED DIVIDEND FOR RANGATIRA Rangatira’s after tax surplus for the year ended 31 March 2007 was $8.1 million including non-recurring gains of $1.6 million (previous year $8.8 million including non-recurring gains of $2.3 million). While Operating Earnings after tax were the same as the previous year at $6.5 million, Directors noted that the previous year’s result - an increase of 50% on the year before - was significantly influenced by receipt of a large one-off dividend from an Australian equity trust. Asset backing at 31 March 2007, based on the market value of listed equities and the mid-point of Directors’ valuation of private equity investments, increased to $7.90 per share from $7.24 last year. Rangatira’s Chairman, Murray Gough, said the total return to shareholders for the year, taking account of dividends paid as well as the movement in asset backing, was 13.9% (previous year 20.5%). Mr Gough said that Rangatira’s private equity portfolio had produced improved earnings, and Directors believe there are good opportunities for the companies in the portfolio to further increase earnings. New Zealand’s strong currency and increasing labour costs do, however, represent a challenging environment for the manufacturing businesses. Directors believe the overall outlook for Rangatira for the coming year is positive provided economic activity in New Zealand and Australia does not drop below current levels. Operating Earnings are expected to show further improvement. Directors have declared a final fully imputed dividend of 21c (previous year 18c) making the total dividend for the year 37c (previous year 34c). The dividend will be paid on 18 June 2007 and the share register will close for dividend purposes on 8 June 2007. Ends Contact: Murray Gough (Chairman) 04 566-2061, or Ian Frame (Chief Executive) 021 520 140
Chairman's report I am pleased to report on a year which has seen a further solid result for Rangatira. The total return to shareholders has been 13.9% which compares with the average for balanced New Zealand investment funds of 4.9%, and for growth funds of 5.10%. Rangatira’s dividends for the year have been increased from 34c to 37c, and assessed asset backing has increased by a further 66c to $7.90 per share. It is encouraging to see our investment strategies continuing to produce positive results, and while conscious of the risks from high interest and exchange rates, your Directors and management are looking forward to further earnings improvement in the year ahead. LISTED INVESTMENTS Our strategy of focusing on a small number of high quality shares has resulted this year in a slight underperformance against the New Zealand NZX50 index, and a more significant shortfall against the Australian ASX200. Our New Zealand portfolio return for the March 2007 year was 10.2% (0.7% less than the NZX50 index), while our Australian portfolio gained 8.6% (4.6% less than the Australian ASX200 on a currency adjusted basis). Our small portfolio of International listed investments declined 0.3% in NZ dollar terms. Shareholders will recall that last year we outperformed the Australian index by 12.3%, largely due to our heavier weighting of major resource stocks. For the year under review our resource stocks – BHP, Rio Tinto and Woodside – underperformed the market and our relative performance was impacted by this. Since balance date, there has been a quite significant price uplift for these companies, and we retain our long-term view that they are strongly positioned to provide increasing profits and dividends. The following table summarises the spread of our listed investments – 2007 2006 $m $m New Zealand 21.3 20.2 Australia 34.9 33.4 International 3.2 3.2 Total 59.4 56.8 Rangatira Limited 70th Annual Report 2007 6 UNLISTED INVESTMENTS Our unlisted investment portfolio comprises significant holdings in eight companies. We have Board representation and provide strategic input in all cases. Operating Earnings from this portfolio were 5.5% higher than last year, made up of quite a wide range of above and below budget performances – highlighting the benefit of the portfolio approach in spreading risk. Heller Tasty had a particularly strong result as demand for its bacon, ham, and smallgoods products continued to grow. On the other hand, Contract Resources had a more difficult year as it implemented an organisational restructure; the unexpected strengthening of the currency together with substantial cost increases put pressure on other companies. We are continuing to support growth strategies, and the associated capital and people investment, in each of the companies in our portfolio. INVESTMENT ACTIVITY At balance date we had 39% (last year 38%) of our assets in listed shares, 60% (60%) in unlisted companies, and 1% (2%) in interest-earning investments. During the year we took the opportunity to complete our exit from Tasman Farms and Tru-Test – gains from these realisations were $1.6m. While we remain relatively fully invested, we have capacity to undertake new investments and continue to evaluate opportunities. RESULTS FOR THE YEAR (a) Reported Financial Performance Our net surplus after tax was $8.1m (last year $8.8m). The following table shows the main components – 2006/07 2005/06 $m $m Operating Earnings 6.5 6.5 Gains from Realisation of Investments 1.6 2.3 Net Surplus after Tax 8.1 8.8 While Operating Earnings were unchanged from the previous year, the previous year’s result was significantly influenced by receipt of a large one-off dividend in the listed equity portfolio.Rangatira Limited 70th Annual Report 2007 7 (b) Change in Value of Listed Investments In addition to dividends and realised gains, our listed investments showed an unrealised gain for the year of $2.6 million. (c) Change in Value of Unlisted Investments Directors annually reassess the market value of our unlisted investments with the assistance of specialist independent advice. As at 31 March 2007 we assessed the market value of our unlisted investments to be between $6m and $25m above the value at which they have been included in our accounts (last year $1m below to $18m above). Our methodology uses recognised valuation principles and calculations, and is undertaken on a rigorous and consistent basis. (d) Total Return The total return to Rangatira shareholders consists of dividends received plus the change in the company’s assessed asset backing per share. The total return for the year to 31 March 2007 was 100 cents per share (last year 129 cents) – $ per Share $ per Share 31 March 2007 31 March 2006 Asset Backing from Financial Statements 7.03 6.76 Additional Value of Unlisted Companies* 0.87 0.48 Assessed Asset Backing 7.90 7.24 using the mid-point of the assessed additional value range. Return for Return for 2006/07 2005/06 ¢/share ¢/share Change in Assessed Asset Backing 66 97 Dividends Paid 34 32 Total Return 100 129 Total Return on Assessed Asset Backing +13.9% +20.5%Rangatira Limited 70th Annual Report 2007 8 (e) Comparative Performance* Rangatira’s total return of +13.9% compares with the average return for the March 2007 year for balanced New Zealand investment funds (as measured by the Eriksen Master Trust Survey) of +4.9%, and for growth funds of +5.10%. These funds are reasonably comparable alternatives for many shareholders to an investment in Rangatira. Rangatira’s average return for the last five years of +10.5% compares with +6.3% for balanced funds and +6.8% for growth funds. Our objective is to maintain a medium term average return above the comparable figure for managed investment funds. DIVIDEND The Board has declared a final fully-imputed dividend of 21 cents per share resulting in a total dividend of 37 cents fully imputed (last year 34 cents). This represents 81% of our reported surplus after tax (last year 68%). OUTLOOK New Zealand is wrestling with a particularly difficult adjustment as foreign investors continue to see our economy as a rewarding and secure haven for surplus cash. The unexpected strength in the dairy industry, something which is fundamentally good for the country, is reinforcing that view. Money for consumers is freely available and the desire to spend is strong – but with full employment inflation is an almost certain outcome, and interest rates are having to be increased to worrying levels in an endeavour to restore balance. In this environment your Directors are becoming more cautious about the economic outlook – a sharp rather than gradual slowdown in New Zealand is emerging as a real risk. Australia faces somewhat similar problems, although with a much larger and more diverse economy their outlook is less worrying than that in New Zealand. For both countries much depends on the continuation of demand from China, India, and other developing economies for resources and food. There is nothing on the horizon to suggest that is likely to falter in the foreseeable future, and so we maintain a generally positive view of prospects for our listed investments in both New Zealand and Australia over the medium to long term.Rangatira Limited 70th Annual Report 2007 9 While conscious of a growing degree of economic risk, we are nevertheless expecting reasonably satisfactory trading conditions for most of our unlisted investments in the year ahead and expect a further improvement in Operating Earnings. APPRECIATION This has been a further good year for Rangatira, and on your behalf I sincerely thank my fellow Directors, Rangatira’s management team, and the management and staff of our unlisted investment companies for their ongoing commitment and effort. R M Gough Chairman 15 June 2007
CEO's Report It is my pleasure to report on Rangatira’s investment activities during the year. LISTED INVESTMENTS We held shares in 26 companies at year end. Of those 21 are long term investments and 5 are trading positions held in Watt Land. UNLISTED INVESTMENTS Auckland Packaging Company Limited (100% owned) "Auckland Packaging (APC) is a specialist designer and manufacturer of quality screen printed point-of-sale displays, promotional materials and short-run corrugated cardboard packaging. It prides itself in a high level of customer service and product quality using advanced technology." APC relocated into enlarged premises in 2005 and installed new printing and processing equipment. This opened new display and promotional opportunities for the Company which are progressively being developed. The Company has, however, found it more difficult than expected to achieve budget targets as it faces increasing competitive pressure in its traditional industrial packaging market, and demand for product from some industrial customers has fallen due to the high NZ dollar exchange rate. We look forward to a better year in 2007/08 as the Company develops its opportunities in the retail sector. Contract Resources Holdings Limited (50% owned) "Contract Resources Holdings Limited (CRL) provides a range of specialised engineering maintenance, industrial cleaning and other related services to refineries, petrochemical, mineral processing and other industrial plants. Currently, most of its business is in Australia and New Zealand although it is developing its business operations in Chile and USA." CRL expanded its areas of activity during 2006/07 and restructured its management team to suit. These changes, combined with the extensive re-negotiation of two major contracts, had a disruptive effect on management’s performance during the year and the growth targets expected were not achieved. The re-organisation is now largely completed and with several new market opportunities available we are looking forward to better financial performance in 2007/08. The Company has established a new subsidiary in Houston, Texas, and is now managing its North, Central and South American operations from that base.Rangatira Limited 70th Annual Report 2007 11 Heller Tasty Limited (50% owned) "Heller Tasty is one of New Zealand’s two largest producers of bacon, ham and smallgoods. It is Christchurch-based with production facilities in that city and in Auckland. Heller Tasty sells mainly through supermarket chains – both as branded product and as house-brands." Heller Tasty has made excellent progress over the last year to cement its leadership position in the New Zealand market, particularly in respect of supermarket sales. The Company’s focus has been on improved product quality and innovative packaging. That, combined with some very successful television advertising campaigns, has underpinned good growth in sales and profitability. Polynesian Spa Limited (51% owned) "Polynesian Spa is New Zealand’s leading international hot mineral spring spa located on the lakefront in Rotorua. The spa offers a choice of public and private hot mineral bathing pools, a luxury spa and a family spa. The Lake Spa Retreat offers a comprehensive range of spa, body and skin therapies in a luxurious private relaxation haven." Polynesian Spa’s performance during 2006/07 was similar to the previous year which was pleasing considering that for most of the year there was extensive construction work taking place on the site. For the fourth consecutive year, Polynesian Spa has been voted by the readers of the internationally acclaimed Condé Nast Traveller magazine as one of the top ten medical and thermal spas in the world. This year it was rated in position no 5, and was the only spa in the southern hemisphere to achieve a top ten rating. The extensive redevelopment that has taken place over the last year will finally be complete in September 2007 and will provide an excellent base for the business to grow and develop over coming years. Precision Dispensing Systems Limited (76% owned) "Precision Dispensing Systems (PDS) is a highly innovative designer and manufacturer of sophisticated pumping and dispensing equipment for the food, hospitality and agricultural sectors." During the year, PDS entered into an agreement with a large United States multinational company to manufacture and supply products based on its Inflex 3 technology. The extent of this supply contract is dependant on final field tests using a manufactured version of the product, and we believe the very encouraging progress made through the product development phase should ensure a successful commercial outcome.Rangatira Limited 70th Annual Report 2007 12 Tecpak Industries Limited (79% owned) "Tecpak is a Dunedin-based, high technology, injection-moulding company specialising in the design and manufacture of thin-walled plastic containers." Tecpak maintained its good profitability through the 2006/07 year despite the challenges of a high NZ dollar exchange rate. The Company now exports over 40% of its output to Australia, selling mostly into the food industry. Significant further growth will require additional investment in manufacturing equipment and we are working with management to explore these opportunities. Te Kairanga Wines Limited (33% owned) "Te Kairanga is one of Martinborough’s largest wine producers and is primarily a producer of premium quality Pinot Noir." Te Kairanga is challenged by the difficulties being experienced by many mid-sized New Zealand wine companies. The domestic wine market is very competitive and prices achievable in export markets are reduced due to the strength of the New Zealand dollar. This, combined with three low yield vintages in Martinborough over the last five years, has put the Company under some commercial pressure. Rangatira is working closely with the Board and management of Te Kairanga to develop a suitable strategy for the future. Vita New Zealand Limited (80% owned) "Vita is New Zealand’s largest producer and processor of polyurethane foam, polyester fibre and polystyrene bean products. It is also a major supplier of consumer goods including furniture to the New Zealand retail market. Vita has three large manufacturing and distribution facilities located in Auckland, Wellington and Christchurch." Vita experienced another challenging year in 2006/07 due to ongoing competition from currency-advantaged imported product. It also faced substantial increases in key input costs – raw materials, rent, utilities and labour. Notwithstanding this, profitability was generally in line with the previous year. We continue to work with management to develop suitable strategies for future growth. I S Frame Chief Executive 15 June 2007	Investment Centre
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