2007 Annual Report by Te Wananga o Aotearoa

Nei e Rangi te koropiko atu nei mö äu tini manaakitanga i te ao, i te pö. E whakahönore nei i te kïngi Mäori, a Tüheitia. E poroporoaki ana i ngä pükenga, i ngä wänanga. Rätou te hunga mate kua hoki atu. Okioki mai rä koutou i te wähi ngaro.

Kei ngä hapü o ngä hau e whä. Tätou te hunga ora, tënä koutou, tënä rä tätou, ka huri.

Ko te Kaupapa o Te Wänanga o Aotearoa The Purpose of Te Wänanga o Aotearoa Ki te whakawhiwhi i ngä mea angitü, ä, i ngä akoranga katoa tino teitei mö ngä Mäori me ngä iwi o Aotearoa me te ao; Ki te waihanga i tëtahi ähuatanga hei akoranga tikanga Mäori; Ki te whakawhiwhi i te mea akoranga whai kiko; Ki te tautoko, ki te whakahau, ki te arahi i ngä tauira katoa, i a rätou e aru ana i ngä whanaketanga i ngä akoranga me ngä mahi e pä ana ki a rätou; Ki te whakahau i ngä tauira katoa ki te ako kia whiwhi ai rätou i te puäwaitanga tino teitei o te mäiatanga; Ki te whakahau i öna kaimahi, kia pai ai te haere o ngä tikanga o te mahi i whakaatu mai, kia whiwhi ai rätou i te puäwaitanga tino teitei o te mäiatanga.

To provide holistic education opportunities of the highest quality for Mäori, peoples of Aotearoa and the world; To provide a unique Mäori cultural learning environment; To provide practical learning experiences; To provide support, encouragement and guidance to all learners in their pursuit of personal development, learning and employment; To encourage all learners to learn and achieve to their fullest potential; To be a good employer and encourage staff to develop personally and professionally to their fullest potential.

ii - Ko te Kaupapa o Te Wänanga o Aotearoa

The Purpose of Te Wänanga o Aotearoa

Ko Te Uaratanga o Te Wänanga o Aotearoa The Mission Statement of Te Wänanga o Aotearoa Ko te whakarite mätauranga e hängai ana ki ngä wawata o tënei whakatupuranga, ki te whakaü hoki i ngä moemoeä o ngä whakatupuranga o te ao türoa, ki te whakatikatika kia märama ai ki te hä o te ao tawhito; Ki te whakatö ki roto i te hinengaro tangata te möhiotanga o ngä taonga tuku iho, tö tätau reo, tö tätau Mäoritanga e pai ai tä rätou torotoro i ngä iwi o te ao i runga i te mäia me te manawanui; Ki te whakamana i te pümanawa moe ki te ako hei taumata e hïkoi whakamua i roto i te ao hou; Ki te whakatakoto täkoha e whai hua ai; kia manawapä ano; Kia mutu tonu, he käinga pai tënei ao.

To provide education that best fits the aspirations of this generation, enhances the dreams of future generations, prepares for understanding the essence of past generations; To equip people with knowledge of our heritage, our language, our culture so they can handle the world at large with confidence and self-determination; To empower one’s potential for learning as a base for progress in the modern world; To make contributions of consequence; to care; To make our world a better place.

Ko Te Uaratanga o Te Wänanga o Aotearoa

The Mission Statement of Te Wänanga o Aotearoa - iii

Table of Contents 01 Ngä Mema o Te Mana Whakahaere - Council Members

02 Kaiwhakahaere - Management

03 Te Mana Whakahaere Chairperson’s Report

05 He Rïpoata nä Te Pouhere – C.E.O Report

06 Tauira Information

11 Employee Information

13 Statements of Service Performance

19 Financial Overview - 2007

21 Statement of Responsibility

22 Report of the Auditor-General

24 Income Statement

25 Statement of Changes in Equity

26 Balance Sheet

27 Cashflow Statement

28 Notes to the Financial Statements

64 Rärangi Whakamärama - Glossary

Table of Contents - v

Ngä Mema o Te Mana Whakahaere Council Members Chairperson Craig Coxhead

Ministerial Appointment

B Soc Sci; LLB (Hon); LLM (Waikato) Resigned: 10 January, 2008

Deputy Chairperson Richard Batley

Co-opted Member

BMS (Waikato); CA Elected as Chairperson: 27 February, 2008

Pouhere (CEO) Bentham Ohia

Ex-officio

Dip Tchg (Waikato); BA (Otago); MBA (Waikato)

Members Tania Hodges

Ministerial Appointment

RPN; BSocSci; PG Dip Mgmt St; MBA (with Distinction); PGCBR

Lloyd Anderson

Co-opted Member

RN; Dip Dairy Farming

Mana Forbes

Co-opted Member

Dip Tchg; Dip Te Arataki Manu Korero

Napi Waaka

Kaumatua

OBE; Adj Professor; Dip Theol; Dip Tchg

Parekäwhia McLean

Co-opted Member

MA (Wisconsin); MSocSci (Waikato)

Peter Skerrett Dip Te Tohu Mätauranga i Te Reo me ona Ähuatanga Katoa; Dip Te Reo Rangatira; B Appl Soc Sci

Neville Baker

Staff Representative Academic Business NZ Representative

Dip Soc Work (Victoria)

Jo Davey

Student Representative

Dip Bus Comp (Wintec); B InfoTech (Wintec)

Marie Panapa B.Ed. (Massey); JP

Staff Representative General

Peter Joseph

NZCTU Representative

Tamati Reedy

Ministerial Appointment

BA; MA (Auckland); MA; PhD (Hawaii)

June McCabe

Ministerial Appointment

MBA (Auckland)

Kaumatua Tui Adams QSO; Adj Professor (TWoA) ; Hon PhD (Waikato)

Kaumatua Cultural Advisor

Ngä Mema o Te Mana Whakahaere - Council Members

- 1

Kaiwhakahaere Management Ngä Kaihautü Louise Berney (Acting)

Kaihautü Operational Services

Shane Edwards

Kaihautü Curriculum

Turi Ngatai

Kaihautü Delivery

Kingi Wetere

Kaihautü - MO1 Limited General Manager

Kaiwhakahaere-a-Rohe Haimona Maruera Jnr

Regional Manager - Papaiöea

Mathew Maynard

Regional Manager - Te Tai Tonga

Jim McTamney

Regional Manager - Waiariki

Trevor Moeke (Acting)

Regional Manager - Tämaki Makaurau

Katerina Te Kani

Campus Manager - Whirikökä

Brad Totorewa

Regional Manager - Tainui

Tui Adams

Kaumatua to Pouhere & Te Arataki Manu Körero

Logan Anderson

Student Support Services Manager

Lindsay Baxter

Executive Support Office Manager

Peter Huntley

Human Resources Manager

Angela Malcolm

Programme Development Manager

Ray Miller

Associate Kaihautü Delivery

Jason Nepia

Customer Services Manager

Elizabeth Nikora

Strategic and Quality Assurance Manager

Bruce Nunns

National Facilities Manager

Te Kowhai Ohia

Curriculum Leader

Colin Owens

Delivery Analyst

Marie Panapa

Senior Cultural Ambassador

Jarel Phillips

Sales and Promotions Manager

Diane Stockman

Audit and Risk Management Unit Manager

Carla Te Anga

Academic Data Unit Manager

Te Napi Waaka

Kaumatua

Warren Williams

Information Technology Manager

Te Ranga Tuarua

Kaiwhakahaere - MO1 Limited

2 - Kaiwhakahaere - Management

Kahu Hotere

Mauri Ora Manager

Graeme Huia

Mahi Ora Manager

David Lewis

ESOL Manager

Anne MacAulay

Student Services Manager

Tarah Nikora

Outsource Manager

Hilary Thomas

Corporate Services Manager

David Thompson

New Programmes Development Manager

Tony Tuhoro

IT Manager

Karen Yeomen

Strategy and Analysis Senior Analyst

Te Mana Whakahaere Chairperson’s Report It gives me great pleasure to introduce the 2007 Annual Report.

implementing necessary changes to ensure the continued strength and wellbeing of this institution.

This year’s annual result marks a turning point for this institution. Te Wänanga o Aotearoa generated a surplus of $5.4 million on the back of continued strong enrolments and accompanying revenue and a robust process of cost containment. The strong financial result was further enhanced by a complete rebuild of our financial position, which included the sale of a number of non-productive assets and focus on a significant improvement in our working capital position.

As I write this report, there exists a vibrancy and a reinvigorated momentum within Te Wänanga o Aotearoa that had faltered when external criticism reached a peak. It is a vibrancy shared by Te Mana Whakahaere; it is a vibrancy that exists within management and it is a vibrancy that again permeates the institution.

The financial year has ended with our institution holding net assets of approximately $80 million, most of which are now core to our business operations. Furthermore, our net working capital is in excess of $8 million with our cash deposits totalling approximately $22 million. Our forecasts for 2008 show a continued improvement in our financial performance and position on the back of ongoing profitability and settlement of an outstanding suspensory loan. This historic and forecast performance is testament not only to the vitality and vibrancy of this institution and the commitment of our staff and students, but is also a clear reflection of how essential Te Wänanga o Aotearoa is to the many and varied communities we serve. Nonetheless the challenge for Te Wänanga o Aotearoa in 2008 and beyond will be to ensure not only that our financial performance and position remain stable, but that we also make sound investments to sustain and future-proof our operations and business. I would like to extend my thanks to our staff, management and other members of Te Mana Whakahaere for their continued efforts in driving the necessary consolidation and refinement that has directly influenced this year’s strong result. For the past three years Te Wänanga o Aotearoa has implemented a rigorous process focused on efficiency, best practice and a tightening of our internal structures. These changes were driven in part by new tertiary education policy, but also as required consolidation for an organisation that had struggled to maintain structures and processes that kept pace with the spectacular growth experienced between 2001 and 2004. Te Wänanga o Aotearoa has emerged from a period of intense scrutiny and pressure, stronger and in good health. We have responded in the most effective way possible, by taking on board criticism and direction where valid and

My thanks go to Bentham Ohia and his team. Bentham has provided the decisive and consistent leadership required in a period of considerable change. His leadership has driven the necessary consolidation, while maintaining strong enrolments and the commitment of staff essential to sustaining our institution through this process. I would also like to extend my gratitude to the departing Chairman of Te Mana Whakahaere, Craig Coxhead, who stood down in early 2008 to take up an appointment to the bench of the Mäori Land Court. Craig has served on Te Mana Whakahaere for eleven years, three as Chairman. His appointment to the Mäori Land Court is a strong endorsement of the experience and legal knowledge Craig will take to the new role. Craig provided a measured hand during a period of uncertainty, successfully moulding the vision and direction of Te Mana Whakahaere to guide the changes within Te Wänanga o Aotearoa. These changes included: • completion of Te Anga Whakamua without the need to borrow additional funds; • formation of a collaborative relationship with Te Wänanga o Raukawa and Te Whare Wänanga o Awanuiärangi with production of a combined prospectus of courses available at all wänanga (the prospectus is called Te Ara Wänanga); and • the return of full financial delegation to the management of Te Wänanga o Aotearoa. Acknowledgement must also go to the Crown Management team (led by Brian Roche) that has provided high level financial advice to refine our structures and systems to leverage the best outcomes and appropriate structures for Te Wänanga o Aotearoa moving forward. As mentioned, there has been significant focus on the tightening of systems within this institution to ensure we are well placed to meet an exciting future. This process has focused on improving the stringency of internal audit programmes, testing and then implementing processes that continue to monitor, track and report on the progress and health of the institution. Key to this process has been

Te Mana Whakahaere Chairperson’s Report

- 3

the strategy, direction and governance of the Academic Board and Audit and Risk Management Committee. Other 2007 highlights include: • merging of the Research Committee and Research Ethics Committee to form Te Kähui Rangahau; • implementation of a national facilities strategy with rationalisation of sites from 508 in 2005 to 158 in 2007; • positive NZQA audits with the only outstanding item being accreditation of some sites; • continued interagency hui providing more collaborative government relationships and better understanding of the new tertiary landscape; and • improvement in the Te Wänanga o Aotearoa risk profile from the 2006 heat map to the 2007 heat map. Te Wänanga o Aotearoa has set the template and processes in place to ensure a strong and vibrant future. There is further work still to do but the essential components have been laid to ensure Te Wänanga o Aotearoa is well placed to embrace a positive and dynamic future and to continue reducing barriers to tertiary education for all New Zealanders.

Richard Batley Chairperson – Te Mana Whakahaere

4 - Te Mana Whakahaere Chairperson’s Report

He Rïpoata nä Te Pouhere – C.E.O. Report I cannot speak of 2007 without first acknowledging the incredible effort made by the kaimahi (staff) of Te Wänanga o Aotearoa over the difficult and challenging past three years. Although many have contributed to the survival of our organisation during this time, sheer hard work by our kaimahi has enabled us to make significant progress this year. During 2007, our tauira achievement rates were among the highest in the country; tauira satisfaction ratings of our programmes were phenomenal; we achieved our EFTS target; we reported a positive financial result for the first time since 2003; and external audits showed marked improvement in the quality of our systems and processes. These substantial achievements are testament to the absolute commitment and dedication of the superb group of people who make up the kaimahi of Te Wänanga o Aotearoa. I am truly honoured to work with them and humbled by their determination to work through the issues. I had the great pleasure of travelling to the rohe (regions) on a number of occasions throughout the year. During these visits, I was reminded of what sets Te Wänanga o Aotearoa apart from other tertiary education institutions; it is the feeling in our classrooms that our kaiako (tutors) generate through application of Ngä Uara (our values), Aroha, Whakapono, Ngä Ture and Kotahitanga. Our tauira feel the supportive and nurturing ähua of our learning environments, they become part of our whänau and they begin to achieve. To the kaimahi in the rohe, I thank you for your commitment to helping our tauira as they work towards realising their potential. To the tauira of 2007, I congratulate you on your success and thank you for your contribution to the success of Te Wänanga o Aotearoa. Although we already had collaborative relationships with many iwi and communities throughout the country, 2007 provided us with an opportunity to strengthen these relationships and to form new ones. To a large extent, it was our relationships with iwi and community stakeholders that sustained us while we worked to realign Te Wänanga o Aotearoa. As always, we are indebted to you for your support and guidance and for the sustenance you provided, and continue to provide, that enables us to do the work we do.

and those in Government) with an opportunity to gain a richer understanding of each other’s perspectives. This shared knowledge will help us work from a more common understanding in the future. I look forward to a continuation of the productive relationships forged through this forum. One of the more significant events of 2007 was a unanimous vote by Te Mana Whakahaere (in December) to return full financial delegation to the institution. This is a significant decision that marks the return of control to the Pouhere and Te Mana Whakahaere. The decision was based on renewed confidence by Te Mana Whakahaere and the Crown that the institution is once again financially viable and has systems and processes in place to ensure sound and robust decision-making. From the challenging days of 2005, we have laid solid foundations on which we are primed to build an exciting future. At present, this future indicates a move towards further paving the path of lifelong learning by expanding our activities into the secondary and primary education sectors. We are also planning a greater commitment to working with youth and a refocus on trades training. In closing, I find it difficult to express in words my gratitude to everyone who has been involved in ensuring the survival of Te Wänanga o Aotearoa. Your commitment to the kaupapa of our organisation and your tireless efforts have ensured that the taonga that is Te Wänanga o Aotearoa will continue to support future generations to achieve their aspirations.

Bentham Ohia Pouhere

We continued our fortnightly interagency hui with the Tertiary Education Commission (TEC), Ministry of Education (MoE) and New Zealand Qualifications Authority (NZQA) throughout 2007. These hui have provided us both (kaimahi of Te Wänanga o Aotearoa He Rïpoata nä Te Pouhere – C.E.O Report - 5

Tauira Information Overview Te Wänanga o Aotearoa continued as the country’s second largest tertiary institution by student numbers for 2007. This is a substantial achievement during a period that marked the culmination of a number of years of change and re-alignment within the institution. The ability for Te Wänanga o Aotearoa to continue to enrol such significant numbers reflects the commitment of tens of thousands of tauira throughout Aotearoa New Zealand to the unique style of education offered by Te Wänanga o Aotearoa, and the continued success of a policy of removing barriers to tertiary education. The year produced continued substantial gains in satisfaction levels by tauira; ratings for most satisfaction variables were in the mid to late ninetieth percentiles. Tauira achievement rates also continued to be strong, exceeding rates of many other tertiary education institutions. This section presents participation, demographic, satisfaction and achievement data and statistics for tauira attending Te Wänanga o Aotearoa in 2007. Information is also presented for 2003 to 2006 to enable comparative analyses.

Tauira Numbers The 2007 single data return (SDR) shows a 13% decline in tauira numbers on 2006 figures. This compares with a 26.6% decline in 2006. Although numbers are falling, the rate of decline is slowing as enrolments reach a more sustainable equilibrium. The following table shows tauira numbers from SDRs for 2003 to 2007.

Number of Tauira

2003

2004

2005

2006

2007

63,387

66,756

57,843

42,455

36,941

EFTS The decline in tauira numbers in 2007 led to a similar decline in consumed EFTS of 5.5%. This compares with a 27.1% decline in 2006. The discrepancy between the percentage reduction in tauira numbers and the percentage reduction in consumed EFTS indicates that more tauira chose to participate in full-year programmes during 2007. The following table shows consumed EFTS from SDRs for 2003 to 2007.

EFTS

2003

2004

2005

2006

2007

34,280

29,671

27,014

19,670

18,578

Tauira Participation Consolidation and stabilisation, first implemented in late 2005, continued to be the driving themes during 2007. As part of this process, the institution set tauira enrolment targets below those of the year prior. For 2007, the EFTS target set by the institution was 19,000 EFTS. This was an achievable target that allowed significant income to support the final phases of the restructuring and re-alignment that continued through 2007.

Tauira Demographics The tauira profile of Te Wänanga o Aotearoa reflects areas of need within the communities served by the organisation. Since its inception, Te Wänanga o Aotearoa has consistently attracted high numbers of Mäori, women and people aged over thirty years of age with low or no secondary qualifications. 2007 was no exception, with high proportions of tauira in each of these demographics continuing to transform their lives through the programmes offered by Te Wänanga o Aotearoa.

Equal Opportunities for Tauira Te Wänanga o Aotearoa is committed to providing equal opportunities for all tauira, particularly those who have previously been prevented from participating in tertiary education as a result of various barriers. As part of this commitment, Te Wänanga o Aotearoa provides extensive support services and facilities that provide all tauira with opportunities to actualise their potential. 6 - Tauira Information

Age Profile In 2007, the age demographic of Te Wänanga o Aotearoa tauira shifted for those aged over 25 years. A 4% reduction was noted in the group 25 to 39 years. A concomitant increase of 4% was noted in those aged over 40 years. Although these trends were evident to some extent

between 2003 and 2006, the size of the shifts in 2007 are larger than in previous years.

The following chart shows gender profile statistics for 2007.

The following table shows age demographic statistics for 2003 to 2007. 2003

2004

2005

2006

2007

Under 18 years

18 to 24 year

13%

11%

10%

25 to 39 year

44%

43%

41%

40%

36%

40 years plus

42%

45%

48%

49%

53%

The following chart shows age profile statistics for 2007.

Ethnicity Profile The percentage of tauira Mäori engaging in education at Te Wänanga o Aotearoa increased again during 2007, as did the percentage of European / Päkehä. As with 2006, growth in these two ethnic groups resulted from a decrease in the percentage of Asian tauira. Reductions in the number of Asian tauira resulted from the gradual phasing out of the Kiwi Ora programme, reversing the growth trend in this area in previous years. The following table shows ethnicity statistics for 2003 to 2007. 2003

2004

2005

2006

2007

Gender Profile

Mäori

59%

45%

48%

49%

European/Päkehä

18%

17%

18%

20%

24%

In line with previous years, Te Wänanga o Aotearoa continued to attract larger numbers of females in 2007. The gender demographic in 2007 is unchanged from that of 2006.

Asian

16%

28%

27%

24%

18%

Pacific Island

Other

The following table shows percentages of males and females engaging with education at Te Wänanga o Aotearoa from 2003 to 2007. 2003

2004

2005

2006

2007

Male

30%

33%

32%

30%

Female

70%

67%

68%

70%

Note: During 2007, the Ministry of Education changed the way ethnicity is reported in alignment with Statistics NZ. SDR Summaries created under the new system do not provide a fair representation of people who report more than one ethnicity. For this reason, ethnicity statistics reported in this annual report are drawn from the tauira database of Te Wänanga o Aotearoa, in line with previous years.

Tauira Information

- 7

The following chart shows ethnicity profile statistics for 2007.

The following chart shows statistics for tauira joining Te Wänanga o Aotearoa with no secondary award from 2003 to 2007.

Prior Activity Profile As in previous years, a large proportion of tauira enrolled at Te Wänanga o Aotearoa in 2007 were in the ‘non-workforce’ category. This proportion is declining as an increasing number of people in the workforce join the organisation to raise their skill levels. This trend has been consistent over the last six years with the proportion down from a high of 53% ‘non-workforce’ in 2001.

No Secondary Award Te Wänanga o Aotearoa has, since its inception, been committed to providing education to those marginalised by the secondary education system. The popularity of our programmes with tauira in this group arises from the extensive tauira support provided and the portfolio of programmes offered by the organisation. Te Wänanga o Aotearoa continued to attract a significant proportion of tauira with no secondary award in 2007. The following table shows percentages of tauira engaging in study with Te Wänanga o Aotearoa between 2003 and 2007 who had no secondary qualifications when they joined the organisation.

No Secondary Award

8 - Tauira Information

2003

2004

2005

2006

2007

46%

38%

37%

38%

The following table shows prior activity statistics for tauira enrolling at Te Wänanga o Aotearoa for 2003 to 2007. 2003

2004

2005

2006

2007

Non-Workforce

41%

37%

35%

32%

29%

Workforce

41%

43%

45%

48%

54%

Tertiary

10%

School

Overseas

Other

The following chart shows prior activity profile statistics for 2007.

The following chart shows statistics for tauira with disabilities enrolling between 2003 and 2007.

Tauira Satisfaction Tauira satisfaction is a key metric against which Te Wänanga o Aotearoa assesses its performance; it provides the organisation with an understanding of how well it is meeting the needs of the tauira it serves. Overall tauira satisfaction was extremely high for both semesters in 2007 as is shown in the following table. 2007

Tauira with Disabilities In line with its commitment to reducing barriers to education, Te Wänanga o Aotearoa continued to attract large numbers of tauira with disabilities during 2006. The following table shows percentages of tauira for 2003 to 2007 who reported having a disability. Data presented are taken from enrolment forms.

Tauira with Disabilities

2003

2004

2005

2006

2007

10%

11%

10%

Note: This table presents statistics for tauira identified as having a disability on their enrolment form. It does not show tauira with disabilities who were supported by Tauira Support Services but who did not identify a disability on their enrolment form.

Semester A

96.13%

Semester B

97.15%

Note: Sample sizes for both semesters achieved statistical significance at the 95% confidence interval. Additional highlights of the survey include: • 87.13% tauira agreed that the opportunities to learn about and participate in tikanga and ähuatanga Mäori activities were excellent (Semester A); • 92.40% of tauira were satisfied with their learning environment (Semester A); • greater than 96% satisfaction ratings for all variables relating to kaiako (Semester A); • 95.36% satisfaction (average) with all aspects of enrolment and induction processes (Semester B); • 95% satisfaction with Tauira Support Services (Semester B); and • 97.47% satisfaction (average) for all variables relating to kaiako (Semester B).

Tauira Information

- 9

Tauira Achievement

The following table shows tauira graduation statistics for the 2003 to 2007 period.

Tauira at Te W채nanga o Aotearoa continued to perform well in their studies during 2007. The overall course retention rate, however, was 75% (3% down on 2006). The course completion rate for 2007 was also down compared with 2006. The following table shows tauira course retention statistics for the 2003 to 2007 period.

Course Retention Rate

2003

2004

2005

2006

2007

84%

83%

74%

75%

The following chart shows tauira course retention statistics for 2003 to 2007.

84%

83%

83% 74%

75%

The following table shows tauira course completion statistics for the 2003 to 2007 period.

Course Completion

2003

2004

2005

2006

2007

66%

74%

77%

70%

71%

The following chart shows tauira course completion statistics for from 2003 to 2007.

74% 66%

10 - Tauira Information

77% 70%

71%

Graduation Rate*

2003

2004

2005

2006

2007

47%

59%

60%

53%

57%

* Graduation Rate = The number of tauira who completed a programme of study as a percentage of all tauira who enrolled to complete a programme in that academic year. The following chart shows the tauira graduation rate for the 2003 to 2007 period.

59%

60% 53%

47%

57%

Employee Information In accordance with its kaupapa, Te Wänanga o Aotearoa strives to be a good employer. As part of this commitment, and in accord with the EEO policy of the organisation, Te Wänanga o Aotearoa is inclusive of all people, regardless of culture, ethnicity, age, gender, political opinion or religious persuasion. This section presents demographic statistics of employees working for Te Wänanga o Aotearoa between 2003 and 2007.

The following table shows the percentage of males and females working for the organisation from 2003 to 2007. 2003

2004

2005

2006

2007

Male

38%

34%

37%

Female

62%

66%

63%

The following chart shows employee gender profile statistics for 2003 to 2007.

Employee Numbers Full-time equivalent employee (FTE) numbers decreased by 14.8% during 2007. As with the decline observed in 2006, FTEs decreased as a result of Te Anga Whakamua (the Te Wänanga o Aotearoa organisational restructure). The following table shows numbers of FTEs for 2003 to 2007. Data for 2006 and 2007 are drawn from SDRs.

FTEs

2003

2004

2005

2006

2007

1,232

1,432

1,393

1002

853

The following chart shows employee numbers for 2003 to 2007. 1432

1393

1232

Ethnicity Profile

1002 853

The number of Mäori working at Te Wänanga o Aotearoa fell slightly during 2007, but remained high at 63%. As a Mäori organisation, this ensures strong connections are maintained with iwi and with the communities predominantly served by the organisation. These connections also provide day-to-day input from key stakeholders into activities occurring within the organisation. The following table shows ethnicity demographic statistics for Te Wänanga o Aotearoa between 2003 and 2007.

Gender Profile The employee gender ratio remained unchanged in 2007. This profile has been relatively constant over the past five years and has remained unchanged since 2005. The current employee gender ratio closely matches the tauira gender ratio.

2003

2004

2005

2006

2007

NZ Mäori

44%

55%

66%

64%

63%

NZ European/Päkehä

11%

10%

12%

Pacific Island

Asian

Other

Not Specified

43%

28%

11%

14%

13%

Employee Information - 11

The following chart shows employee ethnicity profile statistics for 2003 to 2007.

Asian Other

NZ Euro Not Specified Maori

12 - Employee Information

Statements of Service Performance The framework for evaluating the performance of Te Wänanga o Aotearoa employs both financial and non-financial performance measures. This enables Te Wänanga o Aotearoa to translate its strategic direction into measurable outcomes. Key performance indicators are clustered into common groups referred to as key performance clusters. These clusters form a high-level view of the organisation’s performance. The key performance clusters are: • Ako (Quality of Teaching and Learning); • Te Whakaiti (Quality of Leadership, Governance and Management); • Mana Tüpuna (Cultural Integrity); • Manaaki Tauira (Quality of Tauira Support); • Whakaaro Whänui (Quality of Decision Making); and • Whairawa (Quality of Financial Management).

Ako (Quality Teaching and Learning) Te Wänanga o Aotearoa’s approach to tauira-centric learning is underpinned by the concept of Ako. One of the keys to improving outcomes for tauira is to provide excellent and relevant tertiary education that promotes growth in cultural, economic and social capital. These elements are considered essential to providing quality experiences for tauira. Success in achieving these objectives is evidenced by high graduation and completion rates resulting from a focus on quality teaching and learning. 1.1.1

Tauira are connected to the vision of Te Wänanga o Aotearoa. Key Performance Indicator

Metric

Performance

1.1.1.1

Programme provision is in alignment with the vision of Te Wänanga o Aotearoa.

Assessment of programme portfolio

Achieved

1.1.2

Tauira experience a positive induction. Key Performance Indicator

Metric

Performance

1.1.2.1

Induction and orientation strategy contributes to the learning experience of tauira.

Induction and orientation strategy operational

Activity deferred – now included in the QRP suite of projects

1.1.3

Tauira access high quality premises and facilities. Key Performance Indicator

1.1.3.1

1.1.4

Metric

Facilities comply with internal and external 70% requirements prior to delivery.

Performance

Not achieved – compliance achieved in 59% of delivery sites

Tauira receive high quality programme resources. Key Performance Indicator

Metric

Performance

1.1.4.1

Stakeholder contribution and surveys inform programme development and review.

Programme development Achieved process evidences stakeholder involvement. Stakeholder contribution is evidenced in programme development documents, records and Komiti Äwhina minutes.

1.1.4.2

Programmes are approved and accredited Programmes approved and according to internal and external quality accredited within required standards. timeframe

Partially achieved – project milestones were reforecast due to unavailability of sufficient human resources

Statements of Service Performance - 13

1.1.5

Tauira receive high quality kaiako services. Key Performance Indicator

Metric

Performance

1.1.5.1

Stakeholder quality assurance requirements are achieved.

Improvement in the outcome of NZQA and other external audits

Achieved

1.1.5.2

Kaiako competency development and performance management framework supports quality teaching and learning.

Framework developed and implemented

Partially achieved – teaching standards for framework developed and piloted. Further refinement and implementation across all sites required.

1.1.6 1.1.6.1

1.1.7

Tauira successfully complete programmes. Key Performance Indicator

Metric

Performance

Completion (C), graduation (G) and retention rates are maintained.

C = 50%; G = 50%; R = 80%

Partially Achieved Completion (C) = 71% Graduation (G) = 57% Retention (R) = 75%

Tauira pathway to employment or staircase to further education. Key Performance Indicator

Metric

Performance

1.1.7.1

Employment (E) and staircase (S) rates for tauira are surveyed and monitored.

Pathways survey conducted, analysed and reported

Achieved

1.1.7.2

Strategic relationships and business Develop and establish the Partially achieved –QRP initiatives support institutional and regional framework and implementation Collaboration project alignment. plan initiated. Implement framework

Te Whakaiti (Quality of Governance and Management) The governing body of Te Wänanga o Aotearoa, Te Mana Whakahaere, is charged with guiding the organisation towards achieving its kaupapa and vision. A significant strategy for both Te Mana Whakahaere and executive management in 2007 was to continue with the initiatives to drive quality and improve capability throughout the organisation. 1.2.1

Stakeholders demonstrate a high level of support and confidence in Te Wänanga o Aotearoa. Key Performance Indicator

Metric

Performance

1.2.1.1

The vision and strategic direction of Te Wänanga o Aotearoa is communicated to all stakeholders.

Communication plan developed and implemented

Not achieved – elected not to proceed with this activity.

1.2.1.2

Stakeholder satisfaction surveys confirm support for, and confidence in, Te Wänanga o Aotearoa.

60%

Partially achieved – tauira and climate surveys completed and achieved KPI. Iwi and community surveys now included in the QRP suite of projects.

1.2.1.3

Climate surveys confirm satisfaction with, and understanding of, the mission of Te Wänanga o Aotearoa.

60%

Achieved

14 - Statements of Service Performance

1.2.2

Te Wänanga o Aotearoa demonstrates excellence and capability in leadership and governance. Key Performance Indicator

Metric

Performance

1.2.2.1

The composition of Te Mana Whakahaere reflects the constitution.

Review of membership and appointments made as required

Achieved

1.2.2.2

Te Mana Whakahaere members contribute Skill review completed and a range of in-depth skills and experience strategies developed to the organisation.

Partially achieved – skill review completed; strategies to be developed.

1.2.2.3

Effective communication and reporting between Te Mana Whakahaere, Ngä Kaihautü and sub committees contribute to the success of the organisation.

Partially achieved – external audit completed as part of the needs analysis. Framework to be developed.

1.2.3

Te Wänanga o Aotearoa demonstrates excellence and capability in leadership and management.

Develop and implement framework

Key Performance Indicator

Metric

Performance

1.2.3.1

A range of in-depth skills and experiences are employed by Ngä Kaihautü in the leadership and management of Te Wänanga o Aotearoa.

Skill review and 360º survey completed and strategies developed

Achieved

1.2.3.2

Kaimahi competency development and performance management framework supports quality outcomes.

Framework developed and implemented

Achieved

1.2.3.3

The composition of Ngä Kaihautü reflects the published organisational structure.

All vacant positions appointed – Induction completed

Partially achieved – Kaihautü restructuring mid 2007 resulted in one vacant position for Kaihautü-Operational Support Services.

Mana Tüpuna (Cultural Integrity) Te Wänanga o Aotearoa recognises that effective teaching is characterised by common elements that employ Mäori epistemology. These elements are based on practical and contextual learning approaches that recognise the current capability of each tauira to connect with his / her existing cultural and environmental knowledge. Delivery of education in alignment with Mäori epistemology enables the organisation to give effect to its kaupapa and its role within the wider tertiary sector. 1.3.1

The actions and activities of Te Wänanga o Aotearoa maintain and enhance the mana of the organisation. Key Performance Indicator

Metric

Performance

1.3.1.1

The distinctive contribution and approach of Te Wänanga o Aotearoa is defined.

Partially achieved – QRP project initiated

1.3.1.2

Critical, cultural and educational credentialing is embedded in position descriptions and professional development plans.

Credentials identified Framework and training plan developed and implemented

Achieved

Statements of Service Performance - 15

1.3.2

Mäori epistemology, along with critical, cultural and educational approaches, are operationalised within Te Wänanga o Aotearoa. Key Performance Indicator

Metric

Performance

1.3.2.1

Programme development and delivery is informed by Mäori epistemology.

Mäori epistemological approach embedded in programme development process.

Achieved

1.3.2.2

Kaiako are certified to deliver teaching congruent with Mäori epistemology, critical, cultural and educational philosophies.

Certification programme developed and implemented.

Partially achieved – Teaching standards developed now integrated into the QRP suite of projects.

Manaaki Tauira (Quality of Tauira Support) Te Wänanga o Aotearoa operates a model of tauira support developed from a Mäori world view. This model accommodates the various learning modes provided at Te Wänanga o Aotearoa. The model integrates the social, academic and vocational needs of all tauira and is underpinned by whanaungatanga and manaakitanga. High completion and graduation rates, along with the organisation’s performance within this cluster confirm that the support offered to tauira is effective. 1.4.1

Key Performance Indicator

Metric

Performance

1.4.1.1

Tauira early withdrawals are maintained at minimal levels.

30%

Achieved

1.4.1.2

Tauira enrolments are underpinned by robust interviewing processes.

Process developed and implemented

Partially achieved – QRP project initiated.

1.4.2 1.4.2.1

1.4.3

Tauira register an interest and enrol in an appropriate programme.

Tauira receive high quality, supportive pastoral care. Key Performance Indicator

Metric

Performance

Tauira success is supported by an effective virtual pastoral care framework.

Framework investigated, designed and developed

Activity deferred - now included in the QRP suite of projects

Tauira receive a positive learning experience that is of relevance and value in terms of personal, communal and national outcomes. Key Performance Indicator

Metric

Performance

1.4.3.1

The annual graduate survey confirms high levels of satisfaction.

80%

Achieved

1.4.3.2

Tauira satisfaction survey confirms high levels of satisfaction.

80%

Achieved

1.4.3.3

‘Tauira Footprint’ projects are completed and contribute to successful learning.

50% of projects completed and operational

Achieved

Excludes Tauira who withdraw for employment or residence relocation

16 - Statements of Service Performance

Whakaaro Whänui (Quality of Decision Making) Robust reporting and monitoring systems are vital to ensuring quality decisions are made in an uncertain and changing tertiary environment. The focus for 2007 has been to develop and implement these systems to ensure organisational activities contribute to a sustainable wänanga for iwi, hapü and other communities it serves. 1.5.1 1.5.1.1

1.5.2

Decisions are based on sound rationales and risk assessment and evidence bases. Key Performance Indicator

Metric

Performance

The decision framework reinforces robust decision making.

Framework designed, developed and implemented.

Partially achieved – QRP project initiated and first milestone achieved.

Quality information underpins decision making. Key Performance Indicator

Metric

1.5.2.1

Management information is accurate, timely and contributes to decision making.

Accurate management reports Achieved are provided to decision makers in a timely manner

1.5.2.2

Effective reporting systems enable production of financial and non-financial information and indicators.

Strategic Planning and Performance Framework designed, developed and implemented

1.5.3

Performance

Partially achieved – QRP project initiated and first milestone achieved.

Decisions align with the kaupapa, strategic goals and decision framework. Key Performance Indicator

Metric

Performance

1.5.3.1

Decisions align with the kaupapa and decision framework.

Internal audit confirms compliance

Achieved

1.5.3.2

Consultation with stakeholders confirms alignment of decisions with kaupapa, strategic goals and decision framework.

Consultation and feedback processes designed, developed and implemented.

Partially achieved – QRP project initiated and first milestone achieved.

Whairawa (Quality of Financial Management) During 2007, Te Wänanga o Aotearoa focused on continuing with activities that would not only ensure financial stability, but would also provide foundations to enable the organisation to meet regulatory guidelines. 1.6.1

Te Wänanga o Aotearoa demonstrates financial stability and viability. Key Performance Indicator

Metric

Performance

1.6.1.1

The financial viability of the organisation is Strategy developed, directed by the Financial Management and implemented and operational Risk Strategy.

Partially achieved – strategy developed and implemented.

1.6.1.2

Performance ratios drive financial stability.

Partially achieved – cross-uepü monitoring processes yet to be completed.

Total Cost of Delivery/EFTS Ratio achieved Direct Cost of Delivery/EFTS Ratio achieved EFTS/Academic and Tutorial Ratio achieved

Statements of Service Performance - 17

1.6.2

Sound financial management systems are evident. Key Performance Indicator

Metric

Performance

1.6.2.1

Cost control and monitoring systems and processes ensure compliance with budgets and forecasting.

Systems and processes developed, implemented and operational Internal audit confirms compliance

Achieved

1.6.2.2

A comprehensive suite of financial and treasury policies guide financial activity.

Policies developed and implemented

Achieved

18 - Statements of Service Performance

Financial Overview - 2007 Equivalent Full Time Students (EFTS)

Income

Our total EFTS achieved this year was 18,578. This was a decrease of 5.6% on the results for 2006. The main decrease in EFTS occurred in the Kiwi Ora programme. This decrease was offset to some extent by increases in enrolments for our Certificate in Small Business Management and Te Arataki Manu KĂśrero programmes.

The profile of our income streams is shown in the table below.

Financial Position During the year the organisation completed its conversion to International Financial Reporting Standards. As a consequence, the opening net financial position for 2007 declined by $1 million on the closing position as at the end of 2006. Net assets as at year end are now $80 million, which is an increase of $5 million on last year. This is a very positive turn around from the previous years attributable to the strong financial performance achieved. The Crown funding facility, to which we have had access for the last two years, expired in November. This facility was to provide working capital finance over that period, however it was only utilised on four occasions and subsequently repaid. This facility has since been replaced by a commercial facility with the Bank of New Zealand (BNZ), however, at year end our net working capital position of $8.5 million was strong and our forecasts for 2008 indicate it is unlikely we will need to utilise the BNZ facility. During the year three properties were sold. These were land and/or buildings in Porirua, Huntly and Rotorua.

Overall Financial Performance The net surplus of $5.4 million was greater than the budgeted surplus of $3.6 million. The main driver of this variance was the continued improvement and savings in the areas of consumables and property expenditure.

Source

2007

2006

2005

2004

2003

Government Funding

90%

89%

95%

Student Fees

Other (e.g. Interest, Joint Ventures

The income profile for 2007 has continued to remain consistent with the profile from previous years as reflected in a stabilisation of Government funding, particularly EFTS revenue. Government funding remains the primary source of revenue for the organisation.

Expenditure The profile of our expenditure is shown in the table below. Source

2007

2006

2005

2004

2003

Personnel Costs

49%

46%

43%

35%

36%

Resources / Administration

32%

37%

41%

43%

50%

Trading

Property Costs

Depreciation

Impairment of Assets

Personnel costs are now close to being 50% of the organisationâ&#x20AC;&#x2122;s total expenditure. This is a result of the changing mix of programmes being offered, as well as the increasing focus of the organisation on attracting staff with a higher level of qualifications in both academic and support roles and aligning our wages and salaries with sector norms. Resource and Administration costs continue to decline due to the flow-on effect from the rationalisation of our property portfolios and the continual monitoring and improvement in procurement practices.

Financial Overview - 2007 - 19

Cash Flow The opening cash balance was $5.5 million. There was a positive net cash flow from operations of $27.1 million for the year. This is reflected in the surplus generated for the year before the non-cash items of depreciation, amortisation and impairment of assets and after movements in working capital. There was a negative net cash flow from financing activities of $7.5 million. This is a result of the termination of the Crown funding facility and the settlement of other liabilities. There was also a negative cash flow from purchases of property, plant and equipment of $3.1 million. However, this later outflow is seen as positive for the organisation, as it indicates a completion of the rationalisation of the property portfolio and a return to maintaining our fixed asset base though new capital expenditure, which for the last 2-3 years has been restricted. Accordingly the total net increase in cash balances for the year was $16.4 million giving a closing cash balance of $21.9 million. This is a very positive turnaround form previous yearsâ&#x20AC;&#x2122; results.

Summary Our financial performance for 2007 is very pleasing and represents a major turnaround from the last three yearsâ&#x20AC;&#x2122; financial results. The return to profitability has been achieved through a combination of the effects of the restructure that occurred in 2006 and a business strategy aimed at sustaining our revenue streams and actively managing our associated expenditure. Our net working capital and overall financial positions are stable and bode well for our prospects in 2008.

20 - Financial Overview - 2007

Statement of Responsibility In the financial year ended 31 December, 2007, Te Mana Whakahaere (the Council) and the management of Te W채nanga o Aotearoa were responsible for:

1. preparation of the annual financial statements and the judgements used in them; and

2. establishing and maintaining a system of internal control designed to provide reasonable assurance as to the integrity and reliability of financial reporting; and

In the opinion of Te Mana Whakahaere and management of Te W채nanga o Aotearoa, the annual financial statements for the financial year ended 31 December, 2007 fairly reflect the financial position and operation of Te W채nanga o Aotearoa.

Richard Batley - Council Chair person BMS (Waikato); CA 30 April, 2008

Bentham Ohia - Pouhere Dip Tchg; BA; Exec MBA 30 April, 2008

Brian Roche - Crown Manager BCA (Victoria); CA 30 April, 2008

Statement of Responsibility

- 21

AUDIT REPORT TO THE READERS OF TE WÄNANGA O AOTEAROA TE KURATINI O NGÄ WAKA AND GROUP’S FINANCIAL STATEMENTS AND PERFORMANCE INFORMATION FOR THE YEAR ENDED 31 DECEMBER 2007 The Auditor-General is the auditor of Te Wänanga o Aotearoa Te Kuratini o Ngä Waka (the Wänanga) and group. The Auditor-General has appointed me, Stephen Lucy, using the staff and resources of Audit New Zealand to carry out the audit of the financial statements and statement of service performance of the Wänanga and group, on his behalf, for the year ended 31 December 2007.

Unqualified Opinion In our opinion: • the financial statements of the Wänanga and group on pages 24 to 63: - comply with generally accepted accounting practice in New Zealand; and - fairly reflect: › the Wänanga and group’s financial position as at 31 December 2007; and › the results of operations and cash flows for the year ended on that date.

Material misstatements are differences or omissions of amounts and disclosures that would affect a reader’s overall understanding of the financial statements and statement of service performance. If we had found material misstatements that were not corrected, we would have referred to them in our opinion. The audit involved performing procedures to test the information presented in the financial statements and statement of service performance. We assessed the results of those procedures in forming our opinion. Audit procedures generally include: • determining whether significant financial and management controls are working and can be relied on to produce complete and accurate data; • verifying samples of transactions and account balances; • performing analyses to identify anomalies in the reported data; • reviewing significant estimates and judgements made by the Council;

• the performance information of the Wänanga and group on pages 13 to 18 fairly reflects the service performance achievements measured against the performance targets adopted for the year ended on that date.

• confirming year-end balances;

The audit was completed on 30 April 2008, and is the date at which our opinion is expressed.

• determining whether all financial statement disclosures are adequate.

The basis of our opinion is explained below. In addition, we outline the responsibilities of the Council and the Auditor, and explain our independence.

We did not examine every transaction, nor do we guarantee complete accuracy of the financial statements and statement of service performance.

Basis of Opinion

We evaluated the overall adequacy of the presentation of information in the financial statements and statement of service performance. We obtained all the information and explanations we required to support our opinion above.

We carried out the audit in accordance with the Auditor-General’s Auditing Standards, which incorporate the New Zealand Auditing Standards. We planned and performed the audit to obtain all the information and explanations we considered necessary in order to obtain reasonable assurance that the financial statements and statement of service performance did not have material misstatements whether caused by fraud or error.

22 - Report of the Auditor-General

• determining whether accounting policies are appropriate and consistently applied; and

Responsibilities of the Council and the Auditor The Council is responsible for preparing financial statements in accordance with generally accepted accounting practice in New Zealand. Those financial statements must fairly reflect the financial position of the Wänanga and group as at 31 December 2007. They must also fairly reflect the results of operations and cash

flows for the year ended on that date. The Council is also responsible for preparing performance information that fairly reflects the service performance achievements for the year ended 31 December 2007. The Councilâ&#x20AC;&#x2122;s responsibilities arise from the Education Act 1989 and the Crown Entities Act 2004. We are responsible for expressing an independent opinion on the financial statements and statement of service performance and reporting that opinion to you. This responsibility arises from section 15 of the Public Audit Act 2001 and the Crown Entities Act 2004.

Independence When carrying out the audit we followed the independence requirements of the Auditor General, which incorporate the independence requirements of the Institute of Chartered Accountants of New Zealand. In addition to the audit, Audit New Zealand has carried out two assignments since 1 January 2006, providing independent quality assurance over a tender process and a business case, which are compatible with those independence requirements. Other than the audit and these assignments, we have no relationship with or interests in the WĂ¤nanga or its subsidiary.

S B Lucy Audit New Zealand On behalf of the Auditor-General Hamilton, New Zealand

Report of the Auditor-General - 23

Income Statement for the year ended 31 December, 2007

Group Actual 31-Dec-07

Group Budget 31-Dec-07

Parent Actual 31-Dec-07

Parent Budget 31-Dec-07

Group Actual 31-Dec-06

Parent Actual 31-Dec-06

$000

105,062

106,817

105,062

106,817

108,435

2,624

6,147

2,624

6,147

785

107,686

112,964

107,686

112,964

109,220

Domestic

2,197

2,364

2,197

2,364

2,242

Total Student Tuition Fees

2,197

2,364

2,197

2,364

2,242

Notes

Government Funding Ministry of Education Other Government Funding Total Government Funding

3(A)

Student Tuition Fees

Other Income Other Income

3(B)

8,120

4,687

10,104

6,893

8,822

8,873

Interest Income

3(C)

1,750

379

1,659

379

1,413

1,411

9,870

5,066

11,763

7,272

10,235

10,284

119,753

120,394

121,646

122,600

121,697

121,746

Total Other Income Total Income Operating Expenses Employee Benefit Expense

3(D)

55,707

52,353

50,360

47,442

63,638

58,502

Consumable/Faculty Expense

3(E)

36,077

43,124

48,491

57,493

50,224

63,954

9,346

9,000

8,803

8,447

10,036

9,453

Occupancy Property Expense Depreciation Expense

9,240

10,489

8,642

9,212

10,350

9,564

Amortisation Expense

1,478

1,669

903

1,249

1,596

645

497

203

497

203

510

375

459

1,530

114,334

116,838

119,685

124,046

136,746

142,645

$5,419

$3,556

$1,961

$(1,446)

$(15,049)

$(20,899)

Interest Expense

3(C)

Impairment Loss Fair value Adjustment on Financial Instruments Loss on Investment Property Total Operating Expenses Net Surplus/(Deficit) for the Year

The accompanying notes form part of these financial statements.

24 - Income Statement

Statement of Changes in Equity for the year ended 31 December, 2007

Group

Notes

At 1 January, 2006 Fair value revaluation of land and buildings

At 31 December, 2006

Budget

$000

81,344

88,579

7,909

83,530

(17,235)

Net Surplus / (Deficit) for the Year At 31 December, 2006 10

Net Surplus / (Deficit) for the Year At 31 December, 2007

5,419 $(11,816)

(15,049)

(13,967)

7,909

74,204

74,612

5,419

3,556

$7,909

$79,623

$78,168

Public Equity

Retained Earnings

Revaluation Reserve

Total

Budget

$000

60,040

67,033

7,615

62,223 10

(15,049)

$83,530

Notes

(2,186)

At 1 January, 2006

Fair value revaluation of land and buildings

Total

$000

At 31 December, 2007

Fair value revaluation of land and buildings

Revaluation Reserve

Net Surplus / (Deficit) for the Year

Parent

Retained Earnings

83,530

Net Surplus / (Deficit) for the Year Fair value revaluation of land and buildings

Public Equity

(2,183) -

(20,899)

62,223

(23,082)

(20,899)

(19,055)

7,615

46,756

47,978

1,961

$7,615

$48,717

$62,223

$(21,121)

(1,446) $46,532

The accompanying notes form part of these financial statements.

Statement of Changes in Equity

- 25

Balance Sheet as at 31 December, 2007

Parent Actual 31-Dec-07

Parent Budget 31-Dec-07

Group Actual 31-Dec-06

Parent Actual 31-Dec-06

$000

48,717

46,532

74,204

46,756

10,337

17,416

10,003

5,469

3,286

531

1,292

519

1,294

4,530

3,354

2,183

4,633

899

2,757

2,761

954

Rental income receivable

222

Properties available for sale

212

24,614

16,262

18,873

14,054

13,229

8,063

11,923

2,017

34,057

27,474

6,678

24,958

14(A)

6,000

3,703

3,432

9(A)

3,440

3,275

3,562

3,357

9(B)

1,198

520

14(B)

520

795

16,155

5,969

38,026

31,269

18,233

36,308

8,459

10,293

(19,153)

(17,215)

(5,004)

(28,245)

62,616

64,239

60,249

62,214

68,555

65,850

Public Equity

Group Actual 31-Dec-07

Group Budget 31-Dec-07

$000

79,623

78,168

21,861

Notes

Current Assets Cash and cash equivalents Accounts receivable Inventories Prepayments

Total Current Assets Current Liabilities Accounts payable Fixed interest-bearing loans and borrowings Employee entitlements Provision for onerous leases Current portion of term liabilities Total Current Liabilities Working Capital Surplus / (Deficit)

Non-current Assets Investment in MO1 Property, plant and equipment Investment properties

5,270

6,800

Intangible assets

3,278

4,364

2,350

2,260

4,635

3,132

71,164

68,603

67,870

64,475

79,990

75,783

Fixed interest-bearing loans and borrowings

728

262

Aotearoa Institute

520

Total Non-current Liabilities

728

782

$79,623

$78,168

$48,717

$46,532

$74,204

$46,756

Total Non-current Assets Non-current Liabilities

Net Assets

14(C)

The accompanying notes form part of these financial statements.

26 - Balance Sheet

Richard Batley, Council Chair BMS (Waikato); CA 30 April, 2008

Bentham Ohia, Pouhere/CEO

Brian Roche, Crown Manager BCA (Victoria); CA 30 April, 2008

for and on behalf of the Council

(appointed May 2006)

Dip Tchg; BA; Exec MBA 30 April, 2008

Cashflow Statement for the year ended 31 December, 2007

Group Actual 31-Dec-07

Group Budget 31-Dec-07

$000

119,621

139,369

Notes

Parent Actual 31-Dec-07

Parent Budget 31-Dec-07

Group Actual 31-Dec-06

Parent Actual 31-Dec-06

$000

127,343

139,369

121,525

128,678

Cash flows from operating activities Cash was provided from: Operating income Interest received

1,751

379

1,659

379

1,442

1,416

121,372

139,748

129,002

139,748

122,967

130,094

Payments to employees

63,827

51,680

58,480

51,257

63,616

58,480

Payments to suppliers

29,949

68,870

45,421

70,498

61,661

75,750

497

203

497

203

510

94,273

120,753

104,398

121,958

125,787

134,740

27,099

18,995

24,604

17,790

1,563

1,434

1,563

1,434

4,610

6,985

121

Cash was applied to:

Interest paid

Net cash flows from operating activities

(2,820)

(4,646)

5,160

4,988

5,160

4,988

4,248

5,780

1,627

1,487

121

304

265

4,731

6,985

4,369

5,780

1,931

1,752

(3,168)

(6,985)

(2,935)

(5,780)

3,229

3,236

Cash flows from investing activities Cash was provided from: Sale of property, plant and equipment Cash was applied to: Purchase of property, plant and equipment Programme development

Net cash flows from investing activities Cash flows from financing activities Cash was applied to: Aotearoa Institute mortgage repayment

1,515

4,730

Settlement of debt

6,000

6,007

6,000

6,007

7,515

6,007

7,515

6,007

4,745

Net cash flows from financing activities

(7,515)

(6,007)

(7,515)

(6,007)

(4,745)

Net increase / (decrease) in cash and cash equivalents

16,416

6,003

14,154

6,003

(4,336)

(6,155)

(11)

Gain / (loss) on foreign exchange Cash and cash equivalents 1 January Cash and cash equivalents 31 December

(24)

5,469

4,334

$21,861

$10,337

(24)

3,286

4,000

9,816

9,452

$17,416

$10,003

$5,469

$3,286

The accompanying notes form part of these financial statements. Cashflow Statement

- 27

Notes to the Financial Statements for the year ended 31 December, 2007

1. Reporting Entity The financial statements of Te Wänanga o Aotearoa for the year ended 31 December, 2007 were authorised for issue on 30 April, 2008 in accordance with a Council resolution. Te Wänanga o Aotearoa is a Crown Entity and is established under the Education Act 1989 as a public tertiary institution. It provides full-time and part-time tertiary education in New Zealand. The consolidated financial statements of the Group consist of Te Wänanga o Aotearoa (‘the Parent’) and its wholly owned subsidiary MO1 Limited. The Council of Te Wänanga o Aotearoa and the Board of Directors of MO1 Ltd have no power to amend the financial statements after issue.

2. Significant Accounting Policies A.

Basis of Preparation The financial statements have been prepared in accordance with generally accepted accounting practice in New Zealand and the requirements of the Education Act 1989 and the Crown Entities Act 2004. Te Wänanga o Aotearoa is a public benefit entity for the purpose of complying with generally accepted accounting practice in New Zealand. The financial statements have also been prepared on a historical cost basis, except for investment properties, assets classified as held for sale, land and buildings that have been measured at fair value. The financial statements are presented in New Zealand dollars and all values are rounded to the nearest thousand dollars ($’000).

Statement of Compliance The finance statements comply with Applicable Financial Reporting Standards, which include New Zealand equivalents to International Financial Reporting Standards (‘NZ IFRS’). This is the first set of financial statements prepared based on NZ IFRS and comparatives for the year ended 31 December, 2006 have been restated accordingly. Reconciliations of public equity and the net deficit for 31 December, 2006 under NZ IFRS to the balances reported in the 31 December, 2006 financial statements are detailed in note 2X(c) below.

Basis of Consolidation The consolidated financial statements comprise the financial statements of Te Wänanga o Aotearoa and its subsidiary as at 31 December each year (‘the Group’). The financial statements of the subsidiary are prepared for the same reporting period as the parent entity using consistent accounting policies. The financial statements of the subsidiary are consolidated on a line by line basis. Adjustments are made to bring into line any dissimilar accounting policies that may exist. All inter-entity balances and transactions, including unrealised profits arising from intra-group transactions, have been eliminated in full. Unrealised losses are eliminated unless cost cannot be recovered.

28 - Notes to the Financial Statements

Going Concern Reliance is placed on the fact that Te Wänanga o Aotearoa is a going concern and that sufficient funds are available or become available to maintain current operations to at least their current level.

Foreign Currency Translation Both the functional and presentation currency of Te Wänanga o Aotearoa and its subsidiary is New Zealand dollars ($). Transactions in foreign currencies are initially recorded in the functional currency at the exchange rates ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the balance sheet date. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate as at the date of the initial transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.

Property, Plant and Equipment The measurement bases used for determining the gross carrying amount for each class of assets is as follows: • Artwork, land and buildings are measured at fair value less subsequent accumulated depreciation on buildings and subsequent accumulated impairment losses. • All other asset classes are stated at cost less accumulated depreciation and any accumulated impairment in value. Buildings

1.33 - 33%

3 to 75 years

Equipment

20%

5 years

Computers

25%

4 years

Furniture and Fittings

20%

5 years

Motor Vehicles

20%

5 years

Waka

10%

10 years

Owned Land Improvements

20%

5 years

Library Books

10%

10 years

Library Subscriptions

50%

2 years

Leasehold land improvements

Over the period of the lease

Impairment The carrying values of property, plant and equipment other than those who future economic benefits are not directly related to their ability to generate net cash are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs. If any such indication exists and where the carrying values exceed the estimated recoverable amount, the assets or cash-generating units are written down to their recoverable amount. The recoverable amount of property, plant and equipment is the greater of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

Notes to the Financial Statements

- 29

Impairment losses are recognised in the Income Statement. An impairment loss on a revalued asset is recognised directly against any revaluation surplus for that asset. Assets held for educational and related matters and related activities are assessed for impairment by considering the assets for obsolescence, changes in useful life assessments, optimisation and other related matters. Revaluations Following initial recognition at cost, land and buildings are carried at a revalued amount which is the fair value at the date of the revaluation less any subsequent accumulated depreciation on buildings and accumulated impairment loss. Fair value is determined by reference to market-based evidence, which is the amount for which the assets could be exchanged between a knowledgeable willing buyer and a knowledgeable willing seller in an armâ&#x20AC;&#x2122;s length transaction as at the valuation date. Revaluation of property, plant and equipment is carried out on a class of asset basis. Any net revaluation surplus is credited to the Asset Revaluation Reserve included in the Equity section of the Balance Sheet unless it reverses a net revaluation decrease of the same asset previously recognised in the Income Statement. Any net revaluation decrease is recognised in the Income Statement unless it directly offsets a previous net revaluation increase in the same Asset Revaluation Reserve. Any accumulated depreciation as at revaluation date is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset. Upon disposal, any revaluation reserve relating to the particular asset being sold is transferred to Retained Earnings. Independent valuations are performed with sufficient regularity to ensure that the carrying amount does not differ materially from the assetâ&#x20AC;&#x2122;s fair value at the balance sheet date. An item of property, plant and equipment is de-recognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the item) is included in the Income Statement in the year the item is de-recognised. Held for Sale Property, plant and equipment is re-classified as a non-current asset held for sale when its carrying amount will be recovered principally through a sale transaction rather than through continuing use. The re-classification takes place when the asset is considered to be available for immediate sale in its present condition subject only to the usual and customary terms for sales of such assets and the sale is considered highly probable. G.

Investment Properties An investment property is initially measured at its cost including transaction cost. Where an investment property is acquired at no cost or nominal cost, its cost is deemed to be its fair value as at the date of acquisition. Subsequent to initial recognition, investment properties are stated at fair value as at each balance sheet date. Gains or losses arising from changes in the fair values of investment properties are recognised in the Income Statement in the year in which they arise. Investment properties are de-recognised when they have either been disposed of or when the investment property is permanently withdrawn from use and no future benefit is expected from its disposal. Any gains or losses on de-recognition of an investment property are recognised in the income statement in the year of de-recognition.

30 - Notes to the Financial Statements

Transfers are made to investment property when, and only when, there is a change in use, evidenced by ending of owner occupation or the commencement of an operating lease to another party. Transfers are made from investment property when, and only when, there is a change in use, evidenced by the commencement of owner-occupation. For a transfer from investment property to owner-occupied property, the deemed cost of property for subsequent accounting is its fair value at the date of change in use. If the property occupied by the Group as an owner-occupied property becomes an investment property, the Group accounts for such property in accordance with the policy stated under property, plant and equipment up to the date of change in use.

Intangible Assets Computer Software Computer software is separately acquired and capitalised at its cost as at the date of acquisition. After initial recognition, separately acquired intangible assets are carried at cost less accumulated amortisation and accumulated impairment losses. Course Development Costs Course development costs relate to development of educational courses and are capitalised once accreditation has been received and when it is probable that future economic benefit arising from use of the intangible asset will flow to the Group. Following the initial recognition of the course development costs, the cost model is applied and the asset is carried at cost less accumulated amortisation and accumulated impairment losses. A summary of the policies applied to the Groupâ&#x20AC;&#x2122;s intangible assets is as follows: Computer Software

Course Development Costs

Useful lives

Finite - 5 years

Method used

Straight line method

Straight line method from course commencement

Internally generated / Acquired

Separately acquired

Internally generated / separately acquired

The amortisation period and amortisation method for each class of intangible asset having a finite life is reviewed at each financial year-end. If the expected useful life or expected pattern of consumption is different from the previous assessment, changes are made accordingly. The carrying value of each class of intangible asset is reviewed for indicators of impairment annually. Intangible assets are tested for impairment where an indicator of impairment exists. Gains or losses arising from de-recognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the Income Statement when the asset is de-recognised. All other research and development costs are recognised as an expense in the Income Statement in the year in which it is incurred.

Investments All investments are initially recognised at cost, being the fair value of the consideration given and, in the case of an investment not at fair value through profit or loss, including acquisition charges associated with the investment. After initial recognition, investments which are classified as available-for-sale are measured at fair value or at amortised cost in cases where the fair value can not be reliably measured.

Notes to the Financial Statements

- 31

Gains or losses on available-for-sale investments are recognised as a separate component of equity until the investment is sold, collected or otherwise disposed of, or until the investment is determined to be impaired, at which time the cumulative gain or loss previously reported in equity is included in the income statement. Non-derivative financial assets with fixed or determinable payments and fixed maturity are classified as held-to-maturity when the Group has the positive intention and ability to hold to maturity. Investments intended to be held for an undefined period are not included in this classification. Non-derivative financial assets with fixed or determinable payments that are not quoted in an active market are classified as loans and receivables. Investments in bank deposits are classified as loans and receivables. Investments that are intended to be held-to-maturity or those classified as loans and receivables, are subsequently measured at amortised cost using the effective interest method. Amortised cost is calculated by taking into account any discount or premium on acquisition, over the period to maturity. For investments carried at amortised cost, gains and losses are recognised in income when the investments are de-recognised or impaired, as well as through the amortisation process. For investments where there is no quoted market price, fair value is determined by reference to the current market value of another instrument which is substantially the same or is calculated based on the expected cash flows of the underlying net asset base of the investment. Where the fair value cannot be reliably determined the investments are measured at cost.

Inventories Inventories are valued at the lower of cost and net realisable value. Costs incurred in bringing each product to its present location and condition are accounted for as follows: • Inventories held for resale – purchase cost on a weighted average cost; • Materials and consumables to be utilised for rendering of services – purchase cost on a first-in, first-out basis. Net realisable value is the estimated selling price in the ordinary course of activities less the estimated costs necessary to make the sale.

Accounts Receivable Student fees and other receivables are recognised and carried at original receivable amount less an allowance for any uncollectible amounts. An estimate for doubtful debts is made when collection of the full amount is no longer probable. Bad debts are written off when identified.

Cash and Cash Equivalents Cash and short-term deposits in the balance sheet comprise cash at bank and in hand and short-term deposits with an original maturity of three months or less. For the purposes of the Cash Flow Statement, cash and cash equivalents consist of cash and cash equivalents as defined above.

Borrowing Costs Borrowing costs are recognised as an expense when incurred.

32 - Notes to the Financial Statements

Provisions Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. Where it is no longer probable that an outflow of resources embodying economic benefits will be required to settle the obligation, the provision shall be reversed. Where discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

Employee Entitlements The liability for employeesâ&#x20AC;&#x2122; compensation for future leave is accrued in relation to the length of service rendered by employees and relates to vested and unvested entitlements

Leases Leases where the lessor retains substantially all the risks and benefits of ownership of the asset are classified as operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as the lease income. Operating lease payments are recognised as an expense in the income statement on a straight-line basis over the lease term.

Revenue Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised: Government Grants Government grants are recognised when eligibility to receive the grant has been established and it is recognised over the period in which the course is taught by reference to the stage of completion of the course as at the balance sheet date. Stage of completion is measured by reference to the days of course completed as a percentage of total days for each course. Where funds have been received but not earned at balance date a Revenue in Advance liability is recognised. Government grants which are allocated to the Group with no restriction on use and in which the Crown has no future residual interest are considered equity injections and are reflected in the Statement of Changes in Equity. Student Tuition Fees Revenue from student tuition fees is recognised over the period in which the course is taught by reference to the stage of completion of the course as at the balance sheet date. Stage of completion is measured by reference to the days of course completed as a percentage of total days for each course. Rental Income Rental income is recognised in the Income Statement on an accrual basis.

Notes to the Financial Statements

- 33

Interest Revenue is recognised as the interest accrues (using the effective interest method which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial instrument) to the net carrying amount of the financial asset.

Goods and Services Tax Revenues, expenses and assets are recognised net of the amount of GST except: â&#x20AC;˘ where the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and â&#x20AC;˘ receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the balance sheet.

Statement of Cash Flows Cash flows are included in the Cash Flow Statement on a gross basis and the GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority, are classified as operating cash flows.

Budget Figures The budget figures are those approved by the Council and Ministry of Education. The budget figures have been prepared in accordance with the previously adopted New Zealand Generally Accepted Accounting Standards. However the financial statements have been adopted in accordance with New Zealand equivalents to International Financial Reporting Standards, as reflected in the accounting policies. Note 20 to the financial statements reflect the differences between the two accounting standards and how this would have impacted the Budget of Te WĂ¤nanga o Aotearoa if they had been prepared in accordance with NZ IFRS.

Financial Instruments Interest-bearing Loans and Borrowing All loans and borrowings are initially recognised at cost, being the fair value of the consideration received net of transaction costs associated with the borrowing. After initial recognition, interest-bearing loans and borrowings are measured at amortised cost using the effective interest method. Amortised cost is calculated by taking into account any transaction costs, and any discount or premium on settlement. Gains and losses are recognised in the income statement when the liabilities are de-recognised and as well as through the amortisation process. Investments and Other Financial Assets Investments and financial assets are categorised as either financial assets at fair value through Income Statement, loans and receivables, held-to-maturity investments, or available-for-sale financial assets. The classification depends on the purpose for which the investments were acquired. Designation is re-evaluated at each financial year end, but there are restrictions on reclassifying to other categories. When financial assets are recognised initially, they are measured at fair value, plus, in the case of assets not at fair value through Income Statement, directly attributable transaction costs. Recognition and De-recognition All regular way purchases and sales of financial assets are recognised on the trade date ie the date that the Group commits to purchase the asset. Regular way purchases or sales are purchases or sales of financial assets under contracts that require delivery of the assets within the period established generally by regulation or convention in the market place.

34 - Notes to the Financial Statements

Financial assets are de-recognised when the right to receive cash flows from the financial assets have expired or been transferred. Financial Assets at Fair Value through Income Statement Financial assets classified as held for trading are included in the category â&#x20AC;&#x2DC;financial assets at fair value through Income Statement. Financial assets are classified as held for trading if they are acquired for the purpose of selling in the near term with the intention of making a profit. Derivatives are also classified as held for trading unless they are designated as effective hedging instruments. Gains or losses on financial assets held for trading are recognised in profit or loss and the related assets are classified as current assets in the balance sheet. Loans and Receivables Loans and receivables including loan notes and loans to key management personnel are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are carried at amortised cost using the effective interest method. Gains and losses are recognised in the Income Statement when the loans and receivables are de-recognised or impaired. These are included in current assets, except for those with maturities greater than 12 months after balance date, which are classified as non-current. Available-for-sale Investments Available-for-sale investments are those non-derivative financial assets, principally equity securities, which are designated as available-for-sale or are not classified as any of the three preceding categories. After initial recognition available-for sale securities are measured at fair value with gains or losses being recognised as a separate component of equity until the investment is de-recognised or until the investment is determined to be impaired, at which time the cumulative gain or loss previously reported in equity is recognised in the Income Statement.

De-recognition of Financial Instruments The de-recognition of a financial instrument takes place when the Group no longer controls the contractual rights that comprise the financial instrument, which is normally the case when the instrument is sold, or all the cash flows attributable to the instrument are passed through to an independent third party.

Changes in Accounting Policies and Estimates With effect 1 April, 2006, the Group elected to adopt the revaluation model for land and buildings in accordance with NZ IAS 16 Property, Plant and Equipment. This change in accounting policy resulted in an increase to Land and Buildings of $294,000. The impact of the change is a reduction to depreciation expense in the Income Statement of $6,000 for the year ended 31 December, 2006. There have been no other changes in accounting policies or estimates during the period.

Notes to the Financial Statements

- 35

Impact of Adoption of NZ IFRS The impacts of adopting NZ IFRS on the total equity and surplus as reported under previous New Zealand Generally Accepted Accounting Practice (NZ GAAP) are illustrated below. (a) Reconciliation of surplus under previous NZ GAAP to that under NZ IFRS Group 31-Dec-06 $’000

Prior year (deficit) as previously reported Adjustment to the specific provision for doubtful debts (i) Recognition of movement in unoccupied lease liability (ii) Recognition of movement in sick leave liability (iii) Fair value movement in Landcorp mortgage (iv) Impairment of Programme Costs (v) Adjustment to depreciation of revalued land and buildings (vi) Prior year (deficit) under NZ IFRS

Parent 31-Dec-06 $’000

(15,987)

(22,218)

(20)

1,378

(22)

(17)

(375)

(6)

(15,049)

(20,899)

Under previous NZ GAAP doubtful debts were provided for through a general provision. In accordance with NZ IAS 37 a specific provision has been created.

ii.

A provision for unoccupied leased property has been recognised on transition to NZ IFRS but was not recognised as a liability under previous NZ GAAP.

iii.

A provision for sick leave entitlement has been recognised in accordance with NZ IAS 19.

iv.

Fluctuations of the fair value of Fixed Interest Rate debt subsequent to the establishment of the debt have been recognised in accordance with NZ IAS 39.

In accordance with NZ IAS 38, Programme Costs were evaluated for impairment as at 31 December, 2006, resulting in a write down of one programme, held by subsidiary MO1 Limited.

vi.

The Group changed its policy for accounting for land and buildings to the revaluation model in accordance with NZ IAS 16, with effect 31 March, 2006. The adjustment reflects the revised depreciation expense on the revalued balances held by subsidiary MO1 Limited.

(b) Reconciliation of Total Equity under previous NZ GAAP to that under NZ IFRS at Transition Date

Total Equity under Previous GAAP Specific provision for doubtful debts (i) Recognition of onerous lease provision (ii) Recognition of sick leave provision (iii) Fair value of movement in Fixed Interest Rate Debt (iv) Total Equity under NZ IFRS

Group 1-Jan-06 $’000

Parent 1-Jan-06 $’000

83,530

62,223

(2,358)

(2,355)

(338)

476

81,344

60,040

Under previous NZ GAAP doubtful debts were provided for through a general provision. In accordance with NZ IAS 37 a specific provision has been created.

ii.

A provision for unoccupied leased property has been recognised on transition to NZ IFRS but was not recognised as a liability under previous NZ GAAP.

iii.

A provision for sick leave entitlement has been recognised in accordance with NZ IAS 19.

iv.

Fluctuations of the fair value of Fixed Interest Rate debt subsequent to the establishment of the debt have been recognised in accordance with NZ IAS 39.

36 - Notes to the Financial Statements

Total Equity under Previous GAAP Specific provision for doubtful debts (i)

Group 31-Dec-06 $’000

Parent 31-Dec-06 $’000

75,158

47,620

Recognition of onerous lease provision (ii)

(977)

Recognition of sick leave provision (iii)

(360)

459

Fair value of movement in Fixed Interest Rate Debt (iv) Impairment of Programme Costs (v) Adjustment to depreciation of revalued land and buildings (vi) Revaluation of land and buildings (vi) Total Equity under NZ IFRS

(375)

(9)

294

74,204

46,756

Under previous NZ GAAP doubtful debts were provided for through a general provision. In accordance with NZ IAS 37 a specific provision has been created.

ii.

A provision for unoccupied leased property has been recognised on transition to NZ IFRS but was not recognised as a liability under previous NZ GAAP.

iii.

A provision for sick leave entitlement has been recognised in accordance with NZ IAS 19.

iv.

Fluctuations of the fair value of Fixed Interest Rate debt subsequent to the establishment of the debt have been recognised in accordance with NZ IAS 39.

In accordance with NZ IAS 38, Programme Costs were evaluated for impairment as at 31 December, 2006, resulting in a write down of one programme, held by subsidiary MO1 Limited.

vi.

The Group changed its policy for accounting for land and buildings to the revaluation model in accordance with NZ IAS 16, with effect 31 March, 2006. The adjustments reflect the revised depreciation expense on the revalued balances held by subsidiary MO1 Limited and the revalued amount recognised in the Revaluation Reserve within Equity.

(d) Explanation of material adjustments to the Statements of Cash Flows There is no material difference between the cash flow statement presented under NZ IFRS and the cash flow statement presented under previous NZ GAAP except for the amount of cash and cash equivalents which includes short term deposits under NZ IFRS.

Financial Risk Management Objectives and Policies The Group’s principal financial instruments comprise receivables, payables, bank loans and overdrafts, available for sale investments, cash and short-term deposits. The Group manages its exposure to key financial risks, including interest rate and currency risk in accordance with the Group’s financial risk management policy. The objective of the policy is to support the delivery of the Group’s financial targets whilst protecting future financial security. The main risks arising from the Group’s financial instruments are interest rate risk, foreign currency risk, credit risk and liquidity risk. The Group uses different methods to measure and manage different types of risks to which it is exposed. These include monitoring levels of exposure to interest rate and foreign exchange risk and assessments of market forecasts for interest rate, foreign exchange and commodity prices. Ageing analyses and monitoring of specific credit allowances are undertaken to manage credit risk, liquidity risk is monitored through the development of future rolling cash flow forecasts. Council reviews and agrees policies for managing each of these risks as summarised below. Primary responsibility for identification and control of financial risks rests with the Audit and Risk Management Committee under the authority of Council. Council reviews and agrees policies for managing each of the risks identified below, including the setting of limits for hedging cover of foreign currency and interest rate risk, credit allowances, and future cash flow forecast projections. Notes to the Financial Statements

- 37

Risk Exposures and Responses Interest Rate Risk The Group has no risk exposure to market interest rates as all interest bearing debt obligations were repaid during the year. Foreign Currency Risk The Group only has limited exposure to foreign currency risk. All fees are denominated in NZ dollars to diminish risks associated with revenue streams. Where transactions in foreign currencies are forecast that are material to the Group forward exchange contracts are entered into to diminish the risk of the group to fluctuations in exchange rates. Credit Risk Credit risk arises from the financial assets of the Group, which comprise cash and cash equivalents, trade and other receivables, and available-for-sale financial assets. The Group’s exposure to credit risk arises from potential default of the counter party, with a maximum exposure equal to the carrying amount of these instruments. Exposure at balance date is addressed in each applicable note. The Group does not hold any credit derivatives to offset its credit exposure. The Group trades only with recognised, creditworthy third parties, and as such collateral is not requested nor is it the Group’s policy to securitise its trade and other receivables. It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures including an assessment of their independent credit rating, financial position, past experience and industry reputation. Risk limits are set for each individual customer in accordance with parameters set by the Council. These risk limits are regularly monitored. In addition, receivable balances are monitored on an ongoing basis with the result that the Group’s exposure to bad debts is not significant. There are no significant concentrations of credit risk within the Group. Liquidity Risk The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank loans. The Group’s policy is that not more than 33% of borrowings should mature in any 12 month period. At 31 December, 2007, the Group had no debt (2006: 100%).

Key Judgements, Estimates and Assumptions The following items have been included in the financial statements as a result of key judgements or estimates. Operating Lease Commitments The Group has entered into commercial property leases on its property portfolio. The Group has determined that it retains all the significant risks and rewards of ownership of these properties and has thus classified the leases as operating leases. Impairment of Non-financial Assets The Group assesses impairment of all assets at each reporting date by evaluating conditions specific to the Group and to the particular asset that may lead to impairment. These include programme performance, technology, economic and political environments and future programme expectations. If an impairment trigger exists the recoverable amount of the asset is determined. Management do not consider that the triggers for impairment testing have been significant enough and as such these assets have not been tested for impairment in this financial period. Classification of Assets and Liabilities as Held for Sale The Group classifies assets and liabilities as held for sale when its carrying amount will be recovered through a sale transaction. The assets and liabilities must be available for immediate sale and the Group must be committed to selling the asset either through the entering into a contractual sale

38 - Notes to the Financial Statements

agreement or the activation and commitment to a programme to locate a buyer and dispose of the assets and liabilities. Capitalised Programme Development Costs Development costs are only capitalised by the Group when it can be demonstrated that the technical feasibility of completing the intangible asset is valid so that the asset will be available for use or sale and that the programmes will provide positive cash flows. Valuation of Investment Properties The fair value of investment properties is determined by an appropriately qualified independent valuer with reference to market-based evidence, which is the amount for which the assets could be exchanged between a knowledgeable willing buyer and a knowledgeable willing seller in an arm’s length transaction as at the valuation date. Estimation of Useful Lives of Assets The estimation of the useful lives of assets has been based on historical experience as well as manufacturers’ warranties (for plant and equipment), lease terms (for leased equipment) and turnover policies (for motor vehicles). In addition, the condition of the assets is assessed at least once per year and considered against the remaining useful life. Adjustments to useful lives are made when considered necessary.

AA.

Published Standards that are Not Yet Effective The most significant published standards that are not yet effective are as follows: NZ IFRS 8: Operating Segments (effective from 1 January, 2009) This standard will require the Group to adopt the “management approach” to disclosing information about its reportable segments. This may differ from the current approach used to prepare these financial statements. Whist there may be some disclosure changes, the impact of this standard at present is not considered significant.

3. Revenues and Expenses A.

Government Grants Group 2007 $’000

Group 2006 $’000

Parent 2007 $’000

Parent 2006 $’000

105,062

108,435

105,062

108,435

Other grants

1,049

544

1,049

544

QRP

1,575

241

1,575

241

107,686

109,220

107,686

109,220

Operational bulk grant

Notes to the Financial Statements

- 39

Other Income Group 2007 $’000

Group 2006 $’000

Parent 2007 $’000

Parent 2006 $’000

191

3,030

4,560

2,542

2,895

1,020

788

906

788

906

Rent received

900

288

900

288

Canteen sales

213

216

213

216

365

PBRF Contract income Fair value movement on investment property Profit on sale of assets Other income

Koha Lease income Motel room income

MO1

2,077

2,250

Dividends

2,554

1,735

2,949

1,201

8,120

8,822

10,104

8,873

Misc. income

Contract income relates to licences and subcontracting arrangements that the Group has with other institutions.

Finance (Costs) / Income Group 2007 $’000

Loans and overdrafts Interest earned on bank deposits

(497)

Group 2006 $’000

(510)

Parent 2007 $’000

(497)

Parent 2006 $’000

(510)

1,750

1,413

1,659

1,411

Group 2007 $’000

Group 2006 $’000

Parent 2007 $’000

Parent 2006 $’000

53,469

57,642

48,122

52,506

2,439

5,974

2,439

5,974

Employee Benefits Expense

Wages and salaries Termination expenses Sick leave expense

(201) 55,707

40 - Notes to the Financial Statements

22 63,638

(201) 50,360

22 58,502

Other Expenses Group 2007 $’000

Group 2006 $’000

Parent 2007 $’000

Parent 2006 $’000

459

1,222

1,725

902

1,332

308

Minimum lease payments – operating lease

3,381

3,349

3,380

3,347

Loss on sale of property, plant and equipment

282

126

271

126

Koha

182

169

Fees paid to auditor for audit services

235

350

195

310

830

360

830

360

4,850

6,444

3,793

5,409

200

Group 2007 $’000

Group 2006 $’000

Parent 2007 $’000

Parent 2006 $’000

Public equity

83,530

62,223

Retained earnings

Fair value movement on financial instruments Rent Doubtful debts expense

Fees paid to auditor for other assurance services Cost of maintaining investment property Consultancy fees Bad debts written off

4. Equity

(11,816)

(17,235)

(21,121)

(23,082)

Revaluation reserve

7,909

7,615

Total Public Equity

79,623

74,204

48,717

46,756

The Crown have made Equity contributions to Te Wänanga o Aotearoa in line with the recommendations outlined in The Wänanga Capital Establishment Report - Waitangi Tribunal Report 1999 (WAI 718). To date the Crown has made Equity contributions of $51,691,000. The asset revaluation reserve is used to record increments and decrements in the fair value of land and buildings to the extent that they offset one another. A $20,000,000 suspensory loan was due to be advanced to Te Wänanga o Aotearoa over the 2004-2005 years to complete the Equity contributions agreed to. This loan has not yet been advanced.

5. Cash and Cash Equivalents

Cash at bank and in hand

Group 2007 $’000

Group 2006 $’000

Parent 2007 $’000

Parent 2006 $’000

21,861

5,469

17,416

3,286

21,861

5,469

17,416

3,286

Cash at bank and in hand earns interest at floating rates based on daily bank deposit rates. In 2007 Te Wänanga o Aotearoa held a US$ denominated bank account, with a balance of US$249,691. The exchange rate applied at 30 September, 2007 was 0.7687. (2006 - $241,749 at exchange rate of 0.7137). The bank account was closed in October 2007. Having this account open was a breach of the Education Act 1989.

Notes to the Financial Statements

- 41

Reconciliation of Cash for the Purpose of the Cash Flow Statement For the purpose of the cash flow statement, cash and cash equivalents comprise the following as at 31 December:

Cash at bank and in hand

Group 2007 $’000

Group 2006 $’000

Parent 2007 $’000

Parent 2006 $’000

21,861

5,469

17,416

3,286

21,861

5,469

17,416

3,286

Reconciliation from the net profit after tax to the net cash flows from operations Net surplus / (deficit) for the year

5,419

(15,049)

1,961

(20,899)

Depreciation / loss on disposal

9,820

10,350

9,200

9,564

Amortisation

1,155

1,596

617

645

375

Adjustments for:

Impairment losses Fair value (gain) /loss on investment properties Fair value (gain)/ loss on financial instruments Net (gain) on disposal of property, plant and equipment Net foreign exchange loss

1,742 459 (500)

(1,020) 17 -

1,742 459 (500)

(1,020) 17 -

576

3,533

4,160

3,048

1,995

Changes in assets and liabilities (Increase) / Decrease in inventories (Increase) / Decrease in trade and other receivables (Increase) / Decrease in prepayments Increase / (Decrease) in trade and other payables Increase/ (Decrease) in lease provision Increase / (Decrease) in revenue received in advance Increase / (Decrease) in provision for employee entitlements Net cash from operating activities

4,202

(3,134)

227

308

129

2,735

3,974

3,066

(1,379)

(1,189)

(1,379)

(1,189) 5,116

5,116

141

(1,082)

(1,114)

27,099

(2,820)

24,604

(4,646)

6. Accounts Receivable

Trade receivables Ministry of Education Student fees receivable Provision for doubtful debts

Group 2007 $’000

Group 2006 $’000

Parent 2007 $’000

Parent 2006 $’000

1,130

2,066

1,109

861

2,774

437

464

437

464

(1,111)

(856)

(1,108)

(853)

456

4,448

438

3,246

531

4,530

519

3,354

Related party receivables: Subsidiary Other related parties

42 - Notes to the Financial Statements

Student Fees are non-interest bearing and generally should be paid on enrolment and no later than at graduation. For terms and conditions relating to related party receivables refer to Note 18.

7. Inventory Group 2007 $’000

Group 2006 $’000

Parent 2007 $’000

Parent 2006 $’000

2,430

4,772

1,146

2,965

Stock - business studies

Amount written off in year

(265)

Stock

(2,011)

(265)

(2,011)

2,183

2,761

899

954

Group 2007 $’000

Group 2006 $’000

Parent 2007 $’000

Parent 2006 $’000

Trade payables

3,655

2,842

3,589

2,828

Accruals

1,792

2,976

1,409

2,173

MOE funding

2,547

QRP

2,570

PAYE

518

545

495

520

GST

841

315

599

352

11,923

6,678

11,209

5,873

22,848

19,085

11,923

6,678

34,057

24,958

8. Accounts Payable

Related party payable: Subsidiary

Trade payables are non-interest earning and are normally settled on 60-day terms. Other payables are non-interest bearing and have an average term of 6 months. Interest payable is normally settled quarterly throughout the financial year. For terms and conditions relating to related parties refer to note 21.

9. Provisions A.

Employee Entitlements Group 2007 $’000

Group 2006 $’000

Parent 2007 $’000

Parent 2006 $’000

Accrued salaries

1,162

967

899

762

Annual leave liability

2,382

2,235

2,382

2,235

Sick leave liability

159

360

159

360

3,703

3,562

3,440

3,357

Annual leave and sick leave entitlements expected to be settled within 12 months of the balance sheet date are measured at the current rates of pay and classified as current liabilities.

Notes to the Financial Statements

- 43

Provision for Onerous Leases

Provision at 1 January Additional provisions created

Group 2007 $’000

Group 2006 $’000

Parent 2007 $’000

Parent 2006 $’000

1,198

2,355

1,198

2,355

Utilised during the year

(335)

(514)

(335)

(514)

Cash paid to settle obligation

(479)

(255)

(479)

(255)

Provision release following settlement

(375)

(388)

(375)

(388)

Provision at 31 December

1,198

The provision for onerous leases relates to property leased by the Group, which is unoccupied. The provision remaining at 31 December, 2007 is in relation to one property in Auckland, for which the cashflows are certain as the lease expired on 23 January, 2008.

44 - Notes to the Financial Statements

Land -

Revaluations

Reclassifications

Closing Accumulated Depreciation at 31 December, 2007

11,375

Disposals

NBV At 31 December, 2007

Depreciation

11,739

Opening Accumulated Depreciation at 1 January, 2007

NBV At 1 January, 2007

11,375

Reclassifications

Closing Cost at 31 December, 2007

Revaluations

(364)

Disposals

33,972

34,948

(2,490)

(1,232)

(1,314)

36,462

(628)

Leasehold Improvements

787

(2,055)

(8,718)

12,956

269

12,687

(26)

(1,408)

(9,718)

13,445

(40)

1,443

12,042

4,726

5,626

2,183

3,969

2,331

2,324

(5,678) (10,773) (11,114)

(1,127)

(4,580)

10,404

(41)

239

10,206

Equipment

Computers

Additions

Furniture & Fittings 906

1,868

(6,345)

(994)

(5,351)

7,251

7,219

$000

1,990

2,410

(5,658)

930

(1,271)

(5,317)

7,648

(993)

914

7,727

$000

Motor Vehicles

$000

775

862

(439)

(87)

(352)

1,214

$000

Waka

$000

971

967

971

967

$000

Artworks

$000

2,379

2,610

(1,514)

(502)

(1,012)

3,893

271

3,622

$000

Library

36,262

$000

545

651

(185)

1,198

(564)

(819)

730

(1,198)

458

1,470

$000

VLC

11,739

Buildings

$000

(5,300)

6,376

463

581

62,616

68,555

(44,196)

2,187

(9,240)

(37,181)

463 106,812

(2,077)

1,959

581 105,736

$000

Work in Progress

Opening Cost at 1 January, 2007

Group - 2007

10. Property, Plant and Equipment (PPE)

Total

Notes to the Financial Statements

- 45

Land

46 - Notes to the Financial Statements

(1,113)

Classified as investment property

Disposals

Revaluations

Reclassifications

Classified as investment property

Classified as held for sale

Closing Accumulated Depreciation at 31 December, 2006

NBV At 31 December, 2006

11,739

6,916

Depreciation

NBV At 1 January, 2006

11,739

Opening Accumulated Depreciation at 1 January, 2006

Closing Cost at 31 December, 2006

(55)

6,838

Revaluations

Classified as held for sale

(847)

Disposals

34,948

41,105

(1,314)

182

1,834

138

(1,141)

(2,335)

36,262

(165)

(4,086)

(763)

(2,178)

Leasehold Improvements

Additions

5,626

6,826

(4,580)

(1,116)

(3,475)

10,206

(95)

Equipment 3,969

6,707

(8,718)

164

(2,324)

(6,594)

12,687

(547)

(166)

13,301

Computers

10,301

2,324

4,151

(9,718)

(2,204)

(7,582)

12,042

(153)

462

11,733

Furniture & Fittings 1,868

3,420

(5,351)

137

(1,281)

(4,207)

7,219

(458)

(1)

7,627

$000

2,410

4,522

(5,317)

1,039

(1,613)

(4,743)

7,727

(1,621)

9,265

$000

Motor Vehicles

$000

862

972

(352)

(110)

(242)

1,214

$000

Waka

$000

967

$000

Artworks

$000

2,610

2,372

(1,012)

(1,050)

3,622

200

3,422

$000

Library

43,440

$000

651

978

(819)

(599)

(220)

1,470

272

1,198

$000

VLC

6,916

Buildings

$000

1,672

(220)

(6,204)

6,075

(5,061)

581

68,555

79,026

(37,181)

483

1,834

1,250

(10,350)

(30,448)

581 105,736

491

90 109,474

$000

Work in Progress

Opening Cost at 1 January, 2006

Group - 2006

Total

Land -

Fully depreciated assets

Closing Accumulated Depreciation at 31 December, 2007

11,375

Revaluations

NBV At 31 December, 2007

Disposals

11,739

Depreciation

NBV At 1 January, 2007

Opening Accumulated Depreciation at 1 January, 2007

11,375

Fully depreciated assets

Closing Cost at 31 December, 2007

(364)

Disposals

Revaluations

32,369

33,239

(1,988)

(1,085)

(959)

34,357

(628)

787

Leasehold Improvements

Additions

4,726

5,611

(5,678)

(1,124)

(4,554)

10,404

239

Equipment 1,918

3,586

(9,888)

(1,906)

(7,982)

11,806

238

11,568

Computers

10,165

1,987

1,956

(9,831)

(1,239)

(8,592)

11,818

1,270

10,548

Furniture & Fittings 883

1,824

(6,156)

(970)

(5,186)

7,039

7,010

$000

1,862

2,224

(5,038)

983

(1,165)

(4,856)

6,900

(981)

801

7,080

$000

Motor Vehicles

$000

775

862

(439)

(87)

(352)

1,214

$000

Waka

$000

967

$000

Artworks

$000

2,379

2,610

(1,514)

(502)

(1,012)

3,893

271

3,622

$000

Library

34,198

$000

545

651

(185)

1,198

(564)

(819)

730

(1,198)

458

1,470

$000

VLC

11,739

Buildings

$000

(1,198)

(4,050)

6,052

463

581

60,249

65,850

(40,717)

1,198

1,039

(8,642)

(34,312)

463 100,966

(2,077)

1,959

581 100,162

$000

Work in Progress

Opening Cost at 1 January, 2007

Parent - 2007

Total

Notes to the Financial Statements

- 47

Land

48 - Notes to the Financial Statements

6,838

(1,113)

Revaluations

Classified as investment property

Disposals

Revaluations

Classified as investment property

Classified as held for sale

Closing Accumulated Depreciation at 31 December, 2006

11,739

33,239

39,566

(959)

182

1,802

138

(1,023)

(2,066)

34,198

(165)

(4,086)

(1,025)

(2,172)

5,611

6,804

(4,554)

(1,109)

(3,456)

10,165

(95)

3,586

6,123

(7,982)

164

(2,113)

(6,052)

11,568

(547)

(159)

1,956

3,573

(8,592)

(1,900)

(6,695)

10,548

(4)

284

10,268

1,824

3,336

(5,186)

137

(1,241)

(4,082)

7,010

(458)

(1)

7,418

2,224

4,148

(4,856)

996

(1,507)

(4,345)

7,080

(1,490)

8,493

$000

862

972

(352)

(110)

(242)

1,214

$000

967

$000

2,610

2,372

(1,012)

(1,050)

3,622

200

3,422

$000

651

978

(819)

(599)

(220)

1,470

272

1,198

$000

(220)

(6,204)

5,813

(4,768)

1,488

581

65,850

75,845

(34,312)

Land and buildings were valued by a registered valuer, Jones Lang Lasalle Ltd. The effective date of the revaluation was 31 March, 2006.

483

1,802

1,167

(9,564)

(28,208)

581 100,162

491

90 104,053

$000

Revaluations An independent valuation was obtained to determine fair value of land and buildings. Fair value is determined by reference to an open market basis, being the amount for which the assets could be exchanged between a knowledgeable willing buyer and a knowledgeable willing seller in an arms length transaction at the valuation date for land and buildings of a non-educationally specific nature. Where buildings have been designed specifically for educational purposes they are valued at depreciated replacement cost which is considered to reflect fair value for such assets.

NBV At 31 December, 2006

6,916

Depreciation

NBV At 1 January, 2006

11,739

Opening Accumulated Depreciation at 1 January, 2006

Closing Cost at 31 December, 2006

(55)

(847)

Disposals

Classified as held for sale

Leasehold Improvements

Additions

Equipment 12,175

Computers

10,260

Furniture & Fittings $000

Motor Vehicles

$000

Waka

$000

Artworks

$000

Library

41,632

$000

VLC

6,916

Buildings

$000

Work in Progress

Opening Cost at 1 January, 2006

Group - 2006

Total

11. Investment Properties

Opening balance as at 1 January (fair value)

Group 2007 $’000

Group 2006 $’000

Parent 2007 $’000

Parent 2006 $’000

6,800

Additions (reclassification from PP&E) Net gain / (loss) from fair value adjustment Closing balance as at 31 December (fair value)

(1,530) 5,270

(1,530)

6,800

5,270

6,800

In 2006 Te Wänanga o Aotearoa went to the market with an intention to sell the Glenview. Three offers were received the highest being $6.8million of which has been assessed as fair value. A decision was made to keep the property as an investment property rather than to sell the asset. A valuation of the property was requested and performed as at 31 December, 2007 by DTZ, independent registered valuer, of the firm Jones Lang Lasalle, in accordance with NZ IAS 40. DTZ is a member of the New Zealand Institute of Valuers (Inc). Jones Lang Lasalle is an industry specialist in valuing these types of investment properties. The valuation undertaken was based on an open market value, supported by market evidence in which assets could be exchanged between a knowledgeable willing buyer and a knowledgeable willing seller in an arm’s length transaction at the date of valuation.

12. Intangible Assets Programme Development costs were incurred in developing Lifeworks, Mauri Ora programmes, Management and First Steps to Business. Group 2007 At 1 January, 2007, net carrying amount Additions Amortisation/ Depreciation

Externally Acquired Software

Programme Costs

Trademark

Goodwill

Total

$'000

474

4,156

4,635

121

150

3,123

3,278

2,322

10,556

12,883

(1,848)

(6,400)

(8,248)

474

4,156

4,635

2,322

5,516

7,843

(2,172)

(2,393)

(4,565)

150

3,123

3,278

1,007

3,594

4,606

Additions

2,430

Disposals

(430)

Impairment

(375)

(533)

(1,063)

(1,596)

474

4,156

4,635

Impairment At 31 December, 2007, net carrying amount

(324)

(1,154)

(1,478)

At 1 January, 2007 Cost (gross carrying amount) Accumulated amortisation Net carrying amount At 31 December, 2007 Cost (gross carrying amount) Accumulated amortisation Net Carrying amount Year ended 31 December, 2006 At 1 January, 2006, net carrying amount

Amortisation / Depreciation At 31 December, 2006, net carrying amount

Notes to the Financial Statements

- 49

Parent 2007 At 1 January, 2007, net carrying amount Additions Amortisation At 31 December, 2007, net carrying amount

Software

Programme Costs

Trademark

Total

$'000

418

2,709

3,132

121

(617)

(903)

(286) 132

2,213

2,350

2,152

8,247

10,404

(1,734)

(5,538)

(7,272)

418

2,709

3,132

2,152

3,207

5,364

(3,014)

At 1 January, 2007 Cost (gross carrying amount) Accumulated amortisation Net Carrying amount At 31 December, 2007 Cost (gross carrying amount) Accumulated amortisation Net Carrying amount

(2,020)

(994)

132

2,213

2,350

837

670

1,512

2,265

Year ended 31 December, 2006 At 1 January, 2006, net carrying amount Additions Amortisation At 31 December, 2006, net carrying amount

(419) 418

(226) 2,709

(645) 3,132

13. Investment In MO1 Limited MO1 Limited is a fully owned subsidiary of Te W채nanga o Aotearoa and is in the business of education. The balance date of the company is 31 December. The results of MO1 Limited are incorporated into the Group financial statements.

14. Interest-Bearing Liabilities A.

Crown Loan The Crown provided a $20 million funding facility in early 2005 to enable the Group to meet its financial obligations. This facility is controlled by the Crown Manager. The facility has been used as a short term overdraft facility to fund working capital shortfalls. The facility was rolled over periodically in both of the 2005 and 2006 financial years. In May 2005 the Group drew down $12 million of the $20 million facility. In July 2005 $6 million was repaid to the Crown. The facility was reduced from $20 million to $10 million in 2006 and expired on 30 November, 2007 The interest rate was fixed at 8% with interest payable monthly.

Aotearoa Institute In December 2006 agreement was reached between the Te W채nanga o Aotearoa and Aotearoa Institute whereby all claims between the two parties were settled. As part of the settlement a market rent of $1,300,000 was imputed into the final settlement. This rent was for 20 months starting 1 January, 2007 and ending on 31 August, 2008. The balance remaining as at balance sheet date is $520,000, which is the current portion of this liability.

50 - Notes to the Financial Statements

Landcorp Investments Limited Mortgage The loan from Landcorp Investments Limited was secured by way of a mortgage on land and buildings at 15 Canning Crescent, Mängere. The mortgage was due to mature on 31 December, 2034 and accrued interest at a fixed rate of 4% per annum. At 31 December, 2006 the fair value of the mortgage was $262,000 based on forecast future cash flows discounted at a market rate of 7.84%. As no Ministerial approval for the loan had been obtained in accordance with s192 of the Education Act 1989, the mortgage was repaid on 17 September, 2007. A variance between the face value of the loan repaid and the fair value at the date of disposal of $459,000 was taken to the Income Statement in 2007 (2006: $17,000).

BNZ Facility BNZ has committed a cash advance of $10 million to the Group, scheduled to be drawn down in 2008.

15. Early Learning Centres During the year Te Wänanga o Aotearoa received grants from the Ministry of Education for Early Learning purposes.

Apakura Te Käkano 2007 $’000

2006 $’000

385

244

Low socio economic

Special needs

Language and Kaupapa

Bulk funding Incentive funding

Training

400

259

400

259

2007 $’000

2006 $’000

156

106

Low socio economic

Special needs

Training

169

118

169

118

Total MOE funding received Funds applied to: Salaries

Raroera Te Käkano

Bulk funding Incentive funding

Total MOE funding received Funds applied to: Salaries

Notes to the Financial Statements

- 51

Manukau Te Käkano 2007 $’000

2006 $’000

Low socio economic

Special needs

Training

2007 $’000

2006 $’000

260

144

Bulk funding Incentive funding

Total MOE funding received Funds applied to: Salaries

Te Rau Oriwa

Bulk funding Incentive funding Low socio economic Special needs Language and Kaupapa

289

160

289

160

2007 $’000

2006 $’000

304

120

Low socio economic

Special needs

Language and Kaupapa

Training

318

135

318

135

Training Total MOE funding received Funds applied to: Salaries

Raroera Te Puawai

Bulk funding Incentive funding

Total MOE funding received Funds applied to: Salaries

16. Financial Instruments A.

Credit Risk With the exception of Student Fees the Group trades only with recognised, creditworthy third parties. Receivable balances are monitored on an ongoing basis with the result that the Group’s exposure to bad debts is not significant as a result of the ability to withhold graduation from students who do not pay their fees.

52 - Notes to the Financial Statements

With respect to credit risk arising from the other financial assets of the Group, which comprise cash and cash equivalents and available-for-sale financial assets, the Group’s exposure to credit risk arises from default of the counter party, with a maximum exposure equal to the carrying amount of these instruments. There are no significant concentrations of credit risk within the Group. Credit Risk - Accounts Receivable Ageing Analysis Group Current

Overdue

Overdue Provision

Total

$'000

307

1,270

308

1,367

(1,144)

531

1,333

1,499

(853)

1,979

113

2,438

1,446

3,937

Current

Overdue

Provision

Total

$'000

305

1,260

306

1,357

(1,144)

519

Accounts receivable

160

1,496

(853)

803

Related Party receivables

113

2,438

273

3,934

2007 Accounts receivable Related Party receivables

(1,144)

433

2006 Accounts receivable Related Party receivables

Parent 2007 Accounts receivable Related Party receivables

2,551

(853)

4,530

Overdue

(1,144)

421

2006 -

2,551

(853)

3,354

The Group’s primary receivable is from tuition, which is due before the commencement of studies. Student Fees are considered overdue 30 days past the original due date per invoicing. Based on a historical analysis prepared by the Group annually, a percentage of doubtful debts is provisioned for, with the remainder expected to be collected in a timely fashion. Related party receivables have no provision as collection is guaranteed. Specific provisioning is made as appropriate.

Fair Values Set out below is a comparison by category of carrying amounts and fair values of all the Group’s financial instruments. Group 2007 Cash and cash equivalents Accounts receivable

Loans and Receivables

Other Liabilities @ Amortised Cost

Fair Value

$'000

21,861

531

Rental income receivable

Accounts payable

(11,923)

Current portion of term liabilities

(520)

22,401

(12,443)

9,958

Notes to the Financial Statements

- 53

2006

$'000

Cash and cash equivalents

5,469

Accounts receivable

4,530

222

Rental income receivable Accounts payable

(6,678)

Fixed interest-bearing loans and borrowings

(7,198)

Aotearoa Institute

(795)

10,221

(14,671)

(4,450)

Parent

Loans and Receivables

Other Liabilities @ Amortised Cost

Fair Value

$'000

17,416

519

Rental income receivable

Accounts payable

(34,057)

Current portion of term liabilities

(520)

17,944

(34,577)

(16,633)

2007 Cash and cash equivalents Accounts receivable

2006 Cash and cash equivalents

3,286

Accounts receivable

3,354

Prepayments Rental income receivable

222

Accounts payable

(24,958)

Fixed interest-bearing loans and borrowings

(7,198)

(7,206)

Aotearoa Institute

(795)

6,897

(32,951)

(26,062)

Interest Rate Risk The following table sets out the carrying amount, by maturity, of the financial instruments that are exposed to interest rate risk: Group 2007

< 1 Year

1 - 2 Years

2 - 3 Years

3 - 4 Years

4 - 5 Years

5+ Years

Total

$'000

21,861

5,469

6,000

128

277

6,039

128

6,277

Floating rate assets Cash

2006 Floating rate assets Cash

Other liabilities at amortised cost Crown loan Landcorp mortgage

54 - Notes to the Financial Statements

Parent 2007

<1 Year

>1 - <2 Years

>2 - <3 Years

>3 - <4 Years

>4 - <5 Years

>5 Years

Total

$'000

17,415

3,286

6,000

128

277

6,039

128

6,277

Floating rate assets Cash

2006 Floating rate assets Cash

Other Liabilities at amortised cost Crown loan Landcorp mortgage

Interest on financial instruments classified as floating rate is repriced at intervals of less than one year. Interest on financial instruments classified as fixed rate until maturity of the instrument. The other financial instruments of the Group and Parent that are not included in the above tables are non-interest bearing.

Sensitivity Analysis The following table demonstrates the impact on net surplus and equity of a reasonably possible change in interest rates prevailing at balance sheet date. Surplus Inc/ (dec) 2007

Equity Inc/ (dec) 2007

Surplus Inc/ (dec) 2006

Equity Inc/ (dec) 2006

$'000

+ 100 basis points

108

- 100 basis points

(108)

(56)

Change in interest rate

The values above are derived by determining the difference between the annual income and expense on cash balances and loans held during the year using prevailing reasonably possibly adjustments to interest rates.

Capital Management Te Wänanga o Aotearoa’s capital is its equity, which comprises accumulated funds and other reserves. Equity is represented by net assets. Te Wänanga o Aotearoa is subject to the financial management and accountability provisions of the Tertiary Education Commission (TEC), who impose restrictions in relation to borrowings, acquisition of securities, issuing guarantees and indemnities and the use of derivatives. Te Wänanga o Aotearoa manages its equity as a by-product of prudently managing revenues, expenses, assets, liabilities, investments, and general financial dealings to ensure Te Wänanga o Aotearoa effectively achieves its objectives and purpose, whilst remaining a going concern.

Notes to the Financial Statements

- 55

17. Commitments and Contingencies Commitments Operating Lease Commitments - Group as Lessee The Group has entered into commercial leases on certain buildings where it is not in the best interest of the Group to purchase these assets. These leases have an average life of between 4 and 10 years with renewal terms included in the contracts. Renewals are at the option of the Group. There are no restrictions placed upon the lessee by entering into these leases. Future minimum rentals payable under non-cancellable operating leases as at 31 December are as follows: Group 2007

Group 2006

Parent 2007

Parent 2006

$'000

Within one year

3,223

2,629

3,063

2,397

After one year but not more than two years

2,554

1,721

2,466

1,483

938

2,824

931

2,709

After two years but not more than five years More than five years

6,716

7,174

6,461

6,589

Operating Lease Commitments - Group as Lessor The Group has entered into commercial leases on certain buildings where it is not in the best interest of the Group to purchase these assets. The Group sublease a number of properties. These leases have an average life of between 1 and 2 years with renewal terms included in the contracts. Renewals are at the option of the lessee. There are no restrictions placed upon the lessee by entering into these leases. Future minimum rentals receivable under non-cancellable operating leases as at 31 December are as follows: Group 2007

Parent 2006

$'000

2,264

After one year but not more than two years

128

After two years but not more than five years

2,446

Within one year

More than five years

Contingencies Personal Grievances As at 31 December, 2007, there were three open personal grievance claims against Te W채nanga o Aotearoa. Of these, two claims are considered low risk and unlikely to proceed. The other claim has an estimated liability should the action be successful of $100,000. A hearing date has not yet been set and therefore it is not practicable to state the timing of any payment. The group has been advised by its solicitors that it is possible, but not probable, the action will succeed and accordingly no provisions for any liability has been made in these financial statements.

56 - Notes to the Financial Statements

Contingent Asset A $20,000,000 suspensory loan was due to be advanced to Te Wänanga o Aotearoa over the 2004-2005 years to complete the Equity contributions agreed to. This loan is due to be paid in 3 instalments over the next 2 years. The first instalment of $10,000,000 is due in 2008 and the second and third instalments of $5,000,000 each are due in 2009.

18. Related Party Disclosure The consolidated financial statements include the financial statements of Te Wänanga o Aotearoa and its subsidiary, MO1 Limited. Equity Interest

Country of Incorporation

MO1 Limited

New Zealand

Investment

2007

2006

2007

2006

$'000

100

18.1 Unite Incorporated Unite Incorporated is a trade union with a presence throughout a number of main centres in New Zealand. The Secretary of Unite Incorporated is Matt McCarten who was a member of the Council of Te Wänanga o Aotearoa until April 2007. In November 2006 the Council ratified an agreement whereby Te Wänanga o Aotearoa entered into a collaboration pilot project with Unite Incorporated. Under this project Te Wänanga o Aotearoa offers a suite of programmes to members and staff of employers within the Unite network. The pilot project is supported by a full business case and Te Wänanga o Aotearoa receives an appropriate level of financial return on the project. Under the agreement, Te Wänanga o Aotearoa pays an amount of $620 per enrolment to Unite Incorporated to cover the following, inter alia: • Marketing, advertising, enrolment and other administrative services; • Provision of serviced premises in central Auckland. These premises are leased by Unite Incorporated from an independent third party although the lease is guaranteed by the Aotearoa Institute. • Dual branding of the premises. • Full access to the premises for students. • Ongoing pastoral care for students. Te Wänanga o Aotearoa is responsible for the cost of the original set-up of classroom space including infrastructure systems and all matters of education delivery and compliance. The first enrolments under this pilot project were taken in November 2006. During 2007 $745,330 (2006 $120,095) was paid to Unite under this agreement. There were no outstanding balances at balance sheet date.

18.2 Aotearoa Institute Te Kuratini o Ngä Waka Trust Board (Aotearoa Institute) In March 2005 Mr Brian Roche was appointed Crown Manager by Te Wänanga o Aotearoa Council. In this position the Council delegated to him all financial powers within the organisation. On 1 June, 2007 the Crown Manager and Council gave partial delegation back to the Pouhere, Finance Manager, National Facilities Manager and the MO1 Limited General Manager. In December, 2007 full financial powers were returned to the Council by the Crown Manager. During the period that the Crown Manager had all financial powers (i.e. until June 2007) Aotearoa Institute ceased to be considered a related party.

Governance Kingi Wetere was appointed to the position of General Manager, MO1 Ltd in February 2007. Kingi Wetere is a member of the Board of Aotearoa Institute. (In 2006 there was no common membership of Notes to the Financial Statements

- 57

the two Boards however in September 2006, MO1 Limited , a subsidiary company of Te Wänanga o Aotearoa, entered into an agreement with GTL Investments Limited to provide management services to MO1 Limited which included the services of Kingi Wetere.) Aotearoa Institute’s financial operations are separate and distinct to that of Te Wänanga o Aotearoa. All material transactions between the two entities are charged at a fair market rate.

Property Aotearoa Institute continues to lease buildings to Te Wänanga o Aotearoa at commercial rental rates. The value of this in 2007 was $1,023,000. (2006 - not a related party). MO1 Limited does not lease any buildings form Aotearoa Institute. Te Wänanga o Aotearoa previously had a claim against Aotearoa Institute for leasehold improvements on the properties leased from Aotearoa Institute. This matter was settled as part of the December 2006 agreement between the parties (refer below).

Advances During 2001 an advance of $3,100,000 was made to Aotearoa Institute. Repayment of this advance was settled as part of the December 2006 agreement between the parties (refer below). At the date of signing these financial statements there were no further amounts outstanding.

Settlement between Te Wänanga o Aotearoa and Aotearoa Institute In December 2006 agreement was reached between the two parties whereby all claims between the two parties were settled. As part of the settlement the following occurred: All claims made by Aotearoa Institute with respect to Intellectual Property and amounts due to Aotearoa Institute in recognition of their contribution to the founding of Te Wänanga o Aotearoa were withdrawn. All amounts due to Te Wänanga o Aotearoa with respect to the trade rebates, loans and advances were extinguished. The claim by Te Wänanga o Aotearoa with respect to leasehold improvements was withdrawn. Te Wänanga o Aotearoa has conditionally agreed to sell the Glenview International Hotel and Conference Centre to Aotearoa Institute in June 2008 (or before if possible) at the then market value. As part of the settlement a market rent of $1,300,000 was imputed into the final settlement. Aotearoa Institute conditionally agreed to sell Te Wänanga o Aotearoa the properties currently leased at Te Rapa (Hamilton), Malfroy Road (Rotorua) and Apakura (Te Awamutu) in June 2008 (or before if possible) at the then market rates. The two parties agreed to enter into an agreement with respect to the future licensing of the Greenlight literacy programme within New Zealand. Under the agreement, a separate subsidiary of Aotearoa Institute, Arrowmight International Limited, is acting as agent of a Cuban organisation, IPLAC, the developer of the programme in conjunction with Te Wänanga o Aotearoa. Te Wänanga o Aotearoa will pay 10.5% of any future revenue derived from the programme to Arrowmight in consideration of any intellectual property and other claims IPLAC might have for the programme. All ongoing leases between the two parties were to be determined at market value on the basis of a three year lease with a right of renewal for a further three plus three years. The leases were signed on 28 June, 2007. As at 31 December, 2007, Aotearoa Institute had an outstanding balance due to Te Wänanga o Aotearoa of $27,011. Te Wänanga o Aotearoa had an outstanding balance due to Aotearoa Institute of $90,851.

58 - Notes to the Financial Statements

18.3 OMA Investments Limited (GTL Investments Limited since 4 April, 2006) OMA Investments Limited is a fully owned subsidiary of Aotearoa Institute. Te Wänanga o Aotearoa and MO1 Limited continue to purchase student learning resources from OMA Investments Limited, which is a fully owned subsidiary of Aotearoa Institute. OMA Investments Limited also continues to manage and distribute the inventory on behalf of Te Wänanga o Aotearoa and MO1 Limited. During 2007 $2,222,222 of student resources was purchased (2006 - not a related party). In September 2006, Te Wänanga o Aotearoa entered into an agreement with GTL Investments Limited to provide management services to MO1 Limited which included the services of Kingi Wetere. He was appointed to the position of General Manager, MO1 Ltd in February 2007. In late 2004 OMA Investments Limited issued Te Wänanga o Aotearoa with a trade rebate of $2,300,000 excluding GST. Repayment of this rebate has now been effected either through subsequent transactions or as part of the December 2006 agreement between Te Wänanga o Aotearoa and Aotearoa Institute. (refer to note above). As at 31st December Te Wänanga o Aotearoa had an outstanding debt to OMA Investments Limited of $70,391.

18.4 Glenview International Hotel and Conference Centre Limited The Glenview International Hotel and Conference Centre Limited (“the company”) is a fully owned subsidiary of Aotearoa Institute. The company leases from Te Wänanga o Aotearoa the accommodation and conference areas of the Glenview complex. During the year Te Wänanga o Aotearoa paid $152,533 to the organisation for motel accommodation and room hireage. (2006 - not a related party). As at 31 December, 2007 Te Wänanga o Aotearoa had an outstanding balance due to The Glenview International Hotel and Conference Centre Limited of $22,028. The Glenview International Hotel and Conference Centre Limited had an outstanding balance due to Te Wänanga o Aotearoa of $52,570. Lease payments for the use of this space were settled as part of the December 2006 agreement between Te Wänanga o Aotearoa and Aotearoa Institute. (refer to note above).

18.5 Ora Limited Susan Cullen (sister of Kingi Wetere) is the sole shareholder and director of Ora Limited. Ora Limited had a sub-contracting arrangement with Te Wänanga o Aotearoa to provide the Kiwi Ora programme to new immigrants to New Zealand. During 2007 Te Wänanga o Aotearoa paid to Ora Limited $1,314,084 for the provision of this programme. (2006 - not a related party). In 2006 as part of a wash-up of transactions it was established and agreed that Ora Limited owed Te Wänanga o Aotearoa $2,300,000 (excluding GST). This amount was repaid by September 2007. Ora Limited has no dealings with MO1 Limited. There were no outstanding balances as at 31st December, 2007.

18.6 Wairau Property Developments Limited Susan Cullen (sister of Kingi Wetere) is the sole shareholder and one of the directors of Wairau Property Developments Limited. Te Wänanga o Aotearoa continued to lease property until 1 March, 2007. All leases between the two parties were terminated in 2007. Kingi Wetere has no influence in dealings with the organisation. Wairau Property Developments Limited has no dealings with MO1 Limited. During 2007 $21,094 was paid to the organisation. (2006 - not a related party). There were no outstanding balances at balance sheet date.

Notes to the Financial Statements

- 59

18.7 Power Chill NZ Limited Power Chill NZ Limited undertakes work for Te Wänanga o Aotearoa and MO1 Limited. Kingi Wetere has a significant ownership interest in Power Chill NZ Limited. Kingi Wetere is also a director of this company. Kingi Wetere has no influence over any dealings that Te Wänanga o Aotearoa has with Power Chill NZ Limited. Any dealings with Power Chill NZ Limited by MO1 Limited are approved by Board Members. During 2007 $45,901 was paid to Power Chill for work undertaken. (2006 - not a related party). There were no outstanding balances at balance sheet date.

18.8 MO1 Limited MO1 Limited is a wholly owned subsidiary of Te Wänanga o Aotearoa. The Board of MO1 Limited is appointed by the Council of Te Wänanga o Aotearoa. MO1 Limited provides educational services for Te Wänanga o Aotearoa and Te Wänanga o Aotearoa is part of the MO1 Limited provider network. During 2007 MO1 invoiced Te Wänanga o Aotearoa $21,816,415 for these services and MO1 Limited paid Te Wänanga o Aotearoa $2,054,898. During 2006, MO1 Limited invoiced Te Wänanga o Aotearoa $22,805,890 for these services and MO1 Limited paid Te Wänanga o Aotearoa $1,963,227. At balance sheet date Te Wänanga o Aotearoa had an outstanding balance due to MO1 Limited of $22,847,992 (2006 - $19,084,679) and a balance due from MO1 Limited of $6,067. (2006 - $25,826)

18.9 Tainui Group Holdings Hinerangi Raumati is the Chief Financial Officer for Tainui Group Holdings and is a member of the Audit and Risk Management Committee of Te Wänanga o Aotearoa. Te Wänanga o Aotearoa is a tenant of Tobin Street, Pukekohe, premises owned by Tainui Group Holdings. In 2006 Te Wänanga o Aotearoa were also renting a property at Sloane Street, Te Awamutu. Te Wänanga o Aotearoa paid rent for this property to Tainui Group Holdings of $14,563. (2006 - $155,112). There were no outstanding balances as at 31st December, 2007.

18.10 Tainui Corporation Ltd Hinerangi Raumati is the Chief Financial Officer for Tainui Group Holdings and is a member of the Audit and Risk Management Committee of Te Wänanga o Aotearoa. Tainui Corporation Ltd is a wholly owned subsidiary of Tainui Group Holdings. In 2007 Te Wänanga o Aotearoa paid Tainui Corporation Ltd $7,395 in respect of operating expenses for Tobin Street, Pukekohe. (2006 - $16,998) There were no outstanding balances as at balance sheet date.

18.11 Raukura Moana Fisheries Ltd Richard Batley was the Chief Executive Officer of Raukura Moana Fisheries during 2007 and was a member of Council of Te Wänanga o Aotearoa. As part of his agreement as Council member, Te Wänanga o Aotearoa pays a reimbursement of $213 a month for cellphone charges. This amounted to $3,493 in 2007. (2006 - NIL) The company was officially wound up in 2008 and will no longer be a related party. There were no outstanding balances as at balance sheet date.

18.12 Gallery 8 Ltd Marie Panapa is a member of Council of Te Wänanga o Aotearoa and is also a shareholder in Gallery 8 Ltd, an art gallery established to promote local art. In 2007 Te Wänanga o Aotearoa bought artwork as gifts which amounted to $285. (2006 - $nil) There were no outstanding balances as at balance sheet date. 60 - Notes to the Financial Statements

18.13 University of Waikato In 2007 Craig Coxhead was the Chairperson of Council of Te Wänanga o Aotearoa and was also an employee of University of Waikato. Tamati Reedy is a Council member of Te Wänanga o Aotearoa and is also an employee of University of Waikato. Te Wänanga o Aotearoa uses the University of Waikato for external courses for employees. In 2007 this amounted to $1,635. (2006 - $158,232). There were no outstanding balances at balance sheet date.

18.14 Tuia Group Parekäwhia McLean is a Council member of Te Wänanga o Aotearoa, her brother-in-law is a partner of Tuia Group. Tuia Group is engaged to undertake legal work on behalf of Te Wänanga o Aotearoa. In 2007 this amounted to $347,038 (2006 - $417,248). As at balance sheet date Te Wänanga o Aotearoa had an outstanding balance due to Tuia Group of $36,778. (2006 - NIL)

18.15 Terms and Conditions of Transactions with Related Parties. Providing of services to and purchases from related parties are made in arm’s length transactions at both normal market prices and normal commerical terms. Outstanding balances at 31 December, 2007 and 2006 are unsecured and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables. For the year end 31 December, 2007, the Group has not raised any provision for doubtful debts relating to amounts owed by related parties as the payment history has been excellent (2006: $nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates in. When assessed as required the Group raises such a provision.

18.16 Council Remuneration Wages and Salaries includes Te Mana Whakahaere and sub-committees remuneration of $247,431 (2006: $100,090) distributed as follows: 2007

2006

$'000

157

Craig Coxhead

Council

Lisa Tipping

Audit & Risk

Richard Batley

Council / Audit & Risk

Richard Jones

Audit & Risk

Hinerangi Raumati

Audit & Risk

Lloyd Anderson

Council / Audit & Risk

Jo Davey

Council

Neville Baker

Council

Tania Hodges

Council / Audit & Risk

June McCabe

Council

Parekäwhia McLean

Council

Tamati Reedy

Council

Matt McCarten

Council

Mana Forbes

Council

Peter Joseph

Council

Peter Skerrett

Council

Hoturoa Barclay-Kerr

Council

247

100

Notes to the Financial Statements

- 61

Directors Fees paid by MO1 Limited were as follows: 2007

2006

$'000

Richard Batley

Lloyd Anderson

2007

2006

$'000

1,358

1,095

247

100

Key Management Personnel Compensation

Kaihaut端 Council Crown Management payments

Short term and employee welfare benefits Termination payments

604

1,347

2,209

2,542

2007

2006

$'000

1,935

2,542

274

2,209

2,542

19. Events after the Balance Sheet Date There were no significant events occurring after the Balance Sheet date.

20. Performance Against Budget Basis of Preparation The approved budget figures in these financial statements were prepared in accordance with previous NZ GAAP. The following would be the impact on budgeted balances had they been prepared in accordance with NZ IFRS, as a result of adjustments documented in Note 2(X):

Budgeted Surplus / (Deficit) under previous NZ GAAP

Group 2007 Inc/(Dec)

Parent 2007 Inc/(Dec)

$'000

3,556

(1,446)

Employee Benefit Expense

201

Occupancy Property Expense

976

Depreciation and Amortisation Expense

576

283

(459)

Fair Value Adjustment of Financial Instruments Revised Budgeted Surplus / (Deficit) under NZ IFRS

62 - Notes to the Financial Statements

4,850

(445)

Budgeted Net Assets under previous NZ GAAP Accounts Receivable Employee Entitlements Property, Plant and Equipment Intangibles Investment Property Revised Net Assets under NZ IFRS

Group 2007 Inc/(Dec)

Parent 2007 Inc/(Dec)

$'000

78,168

46,532

159

(5,324) (126)

(5,507) 151

6,800

79,726

48,184

Performance against Budget Group Government funding has not achieved budget due to EFTS being 2% below budget expectations and less QRP revenue being received than was budgeted. Other revenue has exceeded budget primarily due to a $2.3 million credit for an overpayment and higher than budgeted interest received of $1.3 million. Costs are under budget by $2.1 million principally due to lower than budgeted spend on QRP projects during 2007.

Notes to the Financial Statements

- 63

Rärangi Whakamärama – Glossary Words in this glossary are defined according to their usage at Te Wänanga o Aotearoa. In any language, a word may have a number of meanings with subtle nuances and shades of meaning depending on context. This is particularly so for the Mäori language. As an oral language, meanings may vary quite markedly depending not only on context, but also on intonation when a word is spoken. Knowledge of concepts that underpin kupu Mäori can also alter, or add to, the apparent meanings of words. It should be noted that this glossary does not provide global meanings for the words contained here. For additional meanings of kupu Mäori, refer to the Dictionary of the Mäori Language by H.W Williams (ISBN 186956-045-0). Ähua

Aroha essence, character or appearance of something or someone that generates an understanding of its nature and state of being

Ähuatanga

love; compassion; affectionate regard Aromatawai assessment Aronui

likeness; characteristic Ako

humanities Atua

learn; teach (see tikanga whakaako) Ako Whakatere learning delivery approach developed by TWoA that uses holistic and active/experiential learning approaches and strategies Äkonga a learner engaged in the tikanga whakaako process in a field in which he or she has some previous experience (See Tauira) Ao world; daytime Aotearoa long white cloud; New Zealand Äpiha Officer Äpiha Hokohoko Purchasing Officer

a god; demon; supernatural being Awhi embrace; foster; cherish Äwhina assist; benefit; befriend Hangarau Research Hapü subdivision of a tribe; or sub-tribe Hauora health; vigour; spirit of life Hïkoi / Whïkoi step; walk; journey or trip Hïmene hymn Hinengaro mind; Intellectual and /or emotional dimension of a person or group

Äpiha Kaiutu Kaute Accounts Payable Officer Äpiha Kirimana Contract Officer Äpiha Mätaki Taituarä Security Monitoring Officer Äpiha Pürongo Records Officer Äpiha Pütea Tauira Student Finance Officer Äpiha Rärangi Utu Payroll Officer Äpiha Tautoko Tauira Student Support Officer Ariki leader; noble rank / status 64 - Rärangi Whakamärama – Glossary

Hoamahi workmate Hoe paddle; row; convey a canoe Hongi a greeting by the pressing of noses Hou new Hui assemble; gather; meet Ingoa name Iti small; unimportant

Iwi

Kaiäwhina Pätengi Raraunga group of hapü who are linked by tüpuna and blood; tribe

Kaha

Database Support Kaiäwhina Ratonga Hangarau Technical Services Administrator / PA

strong; able; strength Kaiako tutor Kaiako Matua senior kaiako Kaiärahi Mätauranga Curriculum Portfolio Owner Kaiärahi Matua (Aronui) Curriculum Portfolio Leader (Humanities) Kaiärahi Matua (Mätauranga Mäori) Curriculum Portfolio Leader (Mäori Education) Kaiärahi Matua (Toi) Curriculum Portfolio Leader (Arts) Kaiärahi Matua (Umanga) Curriculum Portfolio Leader (Careers) Kaiarataki leader Kaiarataki Hanganga Infrastructure Team Leader Kaiarataki Kötuitui Networks Engineer Team Leader Kaiarataki Mätaki Audit Team Leader Kaiarataki Rärangi Utu Payroll Team Lead Kaiarataki Take Kaimahi HR Consultant Team Leader Kaiarataki Tautoko Hangarau Help Desk Team Leader Kaiarataki Tautoko Tauira Student Support Team Leader Kaiarataki Tautoko VLC VLC Help Desk Team Leader Kaiarataki: Te Pünga Curriculum Development Hub Leader Kaiarataki Whakahaere Tüpono Risk Management Team Leader Kaiarataki Whakapoapoa National Team Leader Kaiarataki Whakarite Administrator Team Lead Kaiäwhina Personal Assistant Kaiäwhina Marautanga Personal Assistant to the Kaihautü: Marautanga

Kaiäwhina Whakahaere Pürongo Personal Assistant to the Kaihautü: Information Management Kaiäwhina Whakaü Kounga Ako Administrator / Personal Assistant Kaihautü Executive Director Kaihoahoa Whakairoiro Graphic Designer Kaihoko Raupapa Acquisitions Serials Librarian Kaihoko Tüturu Procurement Specialist Kaikaranga person issuing a call of welcome Kaimahi staff member; staff Kaipäkaha Hiko Desktop Engineer Kaipükaha Kötuitui Networks Engineer Kaipupuri Kiritaki Client Services Kairaraunga Whakawhiwhinga Tauira Academic Data Administrator Kairaupapa-ä-Kupu Literacy Librarian Kairaupapa-ä-Rohe Regional Librarian Kairaupapa Pünaha Systems Librarian Kairaupapa Püranga Körero Ref /Circulation Librarian Kairaupapa Takawaenga Liaison Librarian Kairaupapa Tautoko Assistant Librarian Kairaupapa Täutu Pukapuka Interloans Librarian Kairautaki Mäori Strategic Advisor Mäori Kairuruku Mahi Careers Coordinator Kairuruku Pänui Advertising Coordinator

Rärangi Whakamärama – Glossary

- 65

Kairuruku Pänui Matua Advertising Coordinator Kairuruku Rangahau Research Coordinator Kairuruku Raraunga Database Coordinator Kairuruku Raraunga Matua Senior Database Coordinator Kairuruku Rauemi Tauira Student Resource Coordinator Kairuruku Rawa Property Coordinator Kairuruku Taituarä-ä-Rohe Regional Security Coordinator Kairuruku Täruru Fleet Coordinator Kairuruku Whakaarahi Tracking Coordinator Kairuruku Whakapäpätanga Communications Centre Coordinator Kairuruku Whakapoapoa Matua Senior Marketing Coordinator Kairuruku Whakatïtari Asset Dispatch Coordinator Kairuruku Whakatoha Distribution / Graduation Coordinator Kaitätai analyst Kaitätai Raraunga Academic Data Analyst Kaitätai Umanga Business Analyst Kaitätari auditor Kaitätari Matua Lead Auditor Kaitautoko Assistant; support person Kaitautoko Hangarau Field Support Technician Kaitautoko Kaute Assistant Accountant Kaitautoko Mätauranga Academic Support Manager Kaitautoko Whakarite Administration Support Kaitiaki guardian; Mahi Ora programme tutor Kaitiaki Raupapa Library Assistants 66 - Rärangi Whakamärama – Glossary

Kaitiakitanga guardianship Kaitohutohu advisor Kaitohutohu Huanga Matua QMS Senior Advisor Kaitohutohu Kaupapa me te Akoranga HR Policy and Programmes Advisor Kaitohutohu Raraunga Räkaunui Räkaunui Database Advisor Kaitohutohu Tautoko Tauira Student Support Advisor Kaitohutohu Ture Legal Advisor Kaitohutohu Whakapakari Kaimahi Professional Development Advisor Kaitoro technician Kaitoro Waea Telecommunications Technician Kaitoro Waea Matua Senior Telecommunications Technician Kaitäruki Pakihi Business Developer Kaiwhakaahu Rauemi Resource Developer Kaiwhakahaere Manager Kaiwhakahaere-ä-Mahi Operations Manager Kaiwhakahaere-ä-Rohe Regional Manager Kaiwhakahaere Arai i ngä Tüpono Audit and Risk Management Unit Manager Kaiwhakahaere Hauora me te Haumaru Health and Safety Manager Kaiwhakahaere Kaupapa Hangarau Technology Project Manager Kaiwhakahaere Kaute Accounting Manager Kaiwhakahaere Mätauranga Academic Manager Kaiwhakahaere o te Whare Facilities Manager Kaiwhakahaere Pänga Relationship Manager Kaiwhakahaere Papa Äkonga Site Manager Kaiwhakahaere Pürongo Records Information Manager

Kaiwhakahaere Pütea Finance Manager Kaiwhakahaere Raraunga Whakawhiwhinga Tauira Academic Data Unit Manager Kaiwhakahaere Ratonga Hangarau Technical Services Manager Kaiwhakahaere Ratonga Kiritaki Customer Services Manager Kaiwhakahaere Rauemi me ngä Kirimana Resource and Contracts Manager Kaiwhakahaere Rautaki Strategic Quality Assurance Manager Kaiwhakahaere Taituarä Security Manager Kaiwhakahaere Take Kaimahi HR Operations Manager Kaiwhakahaere Tautoko Hangarau Support Services Manager Kaiwhakahaere Tautoko Tauira Student Support Services Manager Kaiwhakahaere Whakapoapoa National Marketing Manager Kaiwhakahaere Whakauru Tauira Student Registry Unit Manager Kaiwhakahaere Whakawhanake Kaimahi HR Development Manager Kaiwhakahanga Designer Kaiwhakahanga Marautanga Curriculum Designer Kaiwhakamätaki reviewer Kaiwhakamätaki Akoranga Programme Reviewer Kaiwhakarite Administrator Kaiwhakarite Hauora me te Haumaru Health and Safety Coordinator Kaiwhakarite Kirihauä Disability Administrator Kaiwhakarite Marautanga Curriculum Administrator Kaiwhakarite Matua Senior Administrator Kaiwhakarite Matua o Te Mana Whakahaere Council Senior Administrator Kaiwhakahaere o te Pätaka Raupapa

Kaiwhakarite Pouhere Administrator to the Pouhere Kaiwhakarite Pouhere Matua Senior Administrator to the Pouhere Kaiwhakarite Pünaha Pütea Finance System Administrator Kaiwhakarite Rauanga Täruru Matua Fleet Database Administrator Kaiwhakarite Raupapa Administrative Librarian Kaiwhakarite Tautoko Tauira Student Support Administrator Kaiwhakarite Whakauru Tauira Student Registry Administrator Käkano seed; kernel Kanohi face Kanohi ki te kanohi face to face Kapa Haka haka group Karakia incantation; similar to the western concept of prayer Karanga a call (usually of welcome) Katoa all; the whole; altogether Kaumatua / Kaumätua elder/s Kaumätua Pouhere Senior Cultural Advisor Kaupapa theme; philosophy; topic; agenda Kaupapahere policy Kaupapahere Kaupapa Huanga QMS Policy Analyst Kaupapahere Matua Senior Analyst Kaupapahere Pünaha Pürongo Information Systems Analyst Kaupapahere Whakaaenga me te Tohutuku Kawa Approval and Accreditation Analyst Kaupapahere Whakaü Kounga Ako Delivery Analyst

Library Manager Kaiwhakarite Papa Äkonga Site Administrator Rärangi Whakamärama – Glossary

- 67

Mana whenua

Kete

local people

basket traditionally made from flax Kïngitanga

Manaaki show respect or kindness to; entertain

Mäori King movement Kirikiriroa Hamilton; from the ‘long, gravel bed’ of the Waikato River as it flows through the city

Manaakitanga hospitality; respectfulness Manawanui

Kiripaepae Matua Ratonga Kiritaki Senior Customer Services Representative

generosity, warm-heartedness Mängai Matua Kaupapa

Kiripaepae Ratonga Kiritaki Customer Services Representative

Senior Cultural Ambassador Maniapoto

Kiritake Kaimahi Junior HR Consultant

a Tainui tribe and ancestor; Te Kuiti campus Manu

Kiritake Kaimahi Matua

bird

HR Consultant

Manuhiri / Manuwhiri

gift (not exclusively materialistic)

Manukau Campus

Koha

visitor

Köhanga nest

campus in South Auckland Mäoritanga

Köhanga Reo language nest

pertaining to Mäori Marae

Kökiri move forward

communal gathering place Märama

Komiti committee

light, not dark Maramatanga

Komiti Arai Tüpono Körero Council Audit and Risk Committee

enlightenment Marau

Komiti Äwhina a committee that provides input into programme development Koro / Koroua

curriculum; curriculum area Marautanga Curriculum Directorate Mätauranga

elderly man Koroneihana

knowledge; understanding Matua

coronation Kotahitanga

senior; male parent Mätua

oneness; unity Kowai ako

parents Maunga

module; paper Kuia

mountain Mauri

elderly woman Kuki Airani

life principle Mihi

Cook Islands Kupu

to greet; a speech of greeting Mihi Whakatau

word Kura

speech of welcome (less formal than a pöwhiri) Moana

school Mahi

sea Moko

work Mana

tattooing on the face or body Mokopuna

prestige; having influence of power

68 - Rärangi Whakamärama – Glossary

grandchild

Möteatea

Pou Marautanga Curriculum Leader

lament

Pouhere

Motu

Chief Executive Officer

island Motuhake

Pouako tutor

special

Pounamu

Ngä

greenstone; jade

plural of ‘te’ Ngahere

Poutoko Executive Assistant

forest

Pöwhiri / Pöhiri

Ngäti

beckon; welcome; a ceremony to welcome visitors

tribal prefix Noa free from tapu or any other restriction

Pü source; origin

Noho Marae live-in or stay over (not exclusively on a marae)

Pü Wänanga Cultural Advisor

Ora alive; well; in health Paepae speaking platform Päkehä a person of European descent (generally) Pänui newsletter; circular Papa Äkonga Delivery Site Papa Ruruku Coordination Centre Papa Whakahaere Management Centre Papaiöea traditional name given to the Palmerston North campus Papaiöea Rohe Te Wänanga o Aotearoa region that covers the area south of a line that joins Waitara, Waiouru and Napier, excluding Wellington and Porirua and the South Island Papakainga village Pätaka storehouse Pätaka Raupapa Library Unit Poari board (trans.)

Puna spring (of water) Pünaha Whakahaere procedure Pürakau ancient legend; myth Pütake introduction Rä nehu burial day Rähui Pökeka Huntly campus Räkaunui full moon – a time for sharing; academic database that holds information about curriculum and delivery Rangahau research Rangatahi youth Rangatira chief; leader; well-born noble Rangatiratanga chieftainship; leadership Raranga weaving Raroera name of the pä of Tawhiao situated on the side of Maungatautari; Hamilton campus Ratonga Kiritaki

Pono true; honest

Customer Services Ratonga Whakatikatika Rawa

Pou Leader

Facilities Services Unit

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Raukawa

Tapu under spiritual or religious restriction affecting persons, places or things

a Tainui tribe and ancestor; Tokoroa campus Rautaki strategy / strategic

Tau Ihu prow of a canoe; a forum within which Te Wänanga o Aotearoa, Te Wänanga o Raukawa and Te Wänanga o Awanuiärangi discuss issues relating to wänanga

Te Rautakinga Strategic Plan Reo language; speech Ringa Hangarau

Tauira a participant engaged a field of new learning (see Äkonga)

Technical Services Librarian Ringa Hangarau Tautoko Help Desk Technician Rohe region Rongoä medicine; Röpu group Runanga council Tainui Rohe Te Wänanga o Aotearoa region that covers the western central region of the North Island from Pukekohe in the north, Mokau through to National Park in the south and from Tokaanu around the western side of Lake Taupo through Tokoroa and Matamata across to Katikati, and taking in the Coromandel Peninsula Tämaki Makaurau bride sought by a hundred suitors, referring to the highly sought after land that is currently the site of Auckland City Tämaki Makaurau / Tai Tokerau Rohe Te Wänanga o Aotearoa region that covers the north of the North Island from North Cape to Papakura Tamariki children Täne man; male Tangata / Tängata person / people

Tauiwi non-Maori Taupaepae Ratonga Kiritaki Customer Services Receptionist Taupaepae VLC Kiritaki VLC Help Desk Representative Tautoko support Tau-utuutu reciprocity Te the Te Anga Whakamua the move forward; the organisational restructure that occurred in 2006 Te Ao Maori Mäori worldview and its representations Te Ara Kökiri the pathway to move forward; the Profile of Te Wänanga o Aotearoa Te Ara Waihanga Marau programme development and approval process of Te Wänanga o Aotearoa Te Arawa one of the great ocean-going waka that travelled from Hawaiki to Aotearoa and first landed near Cape Runaway; iwi residing in the Rotorua region Te Kähui Rangahau Te Wänanga o Aotearoa Research Committee Te Kete Te Wänanga o Aotearoa website

Tangi to cry; to weep Tangihanga formal ceremony during which relatives and friends mourn and honour the passing of a loved one Taonga property; anything highly prized

70 - Rärangi Whakamärama – Glossary

Te Mana Whakahaere the Council of Te Wänanga o Aotearoa Te Puna Mätauranga Head Office Te Puna Waihanga the Programme Development Committee of Te Wänanga o Aotearoa

Te Pütake

Turipuku name of a fighting chief of Ngäti Whakaue, who lived near the current site of Rotorua campus; the name of Rotorua campus

Rationale Te Puäwaitanga graduation Te Ranga Tuarua

Uara

Tier Two Managers

value

Te Rautiaki Mätauranga

Uaratanga organisational mission statement

the Academic Board of Te Wänanga o Aotearoa Te Tai Tonga Rohe Te Wänanga o Aotearoa region that covers Wellington, Porirua and the South Island

Uepü directorate Uepü Marautanga Curriculum Directorate

Tika right; correct Tikanga custom; plan method (derived from Tika) Tikanga Whakaako a Mäori teaching and learning methodology that incorporates the concept that everyone has something to learn and something to teach. Tinana body; trunk; the main part of anything Tino

Uepü Püreirei Whakamätau Teaching and Learning Directorate Uepü Ratonga Tauira Student Services Directorate Uepü Take Kaimahi Human Resources Directorate Uepü Take Pütea Finance Directorate Uepü Whakahaere Pürongo Information Management Directorate

an intensifier; a prefix used to give force or emphasis Tipuna / Tüpuna ancestor / ancestors Tiriti

Uepü Whakaü Kounga Ako Delivery Directorate Ükaipötanga to suckle; to nurture Umanga

transliteration of the word Treaty Toa Rangatira a tribe of the Tainui people; the name of the Porirua campus Tohu

business and computing programmes Üpoko head; upper part Wähanga unit

certificate; proof; sign; mark Toi

Wähanga Arai i ngä Tüpono Audit and Risk Unit

art / arts programmes Tüäpapa foundation; base; foundation programmes Tukutuku woven wall panel Tüpono risk Tupuna / Tüpuna ancestor / ancestors Turangawaewae

Wähanga Pouhere Office of the CEO Wähanga Raraunga Whakawhiwhinga Tauira Academic Data Unit Wähanga Ratonga Hangarau Technical Services Unit Wähanga Ratonga Tautoko Tauira Student Support Services Unit Wähanga Rautaki Strategic Unit

a place to stand; place of belonging

Wähanga Whakahaere Pütea

lore; law

Wähanga Whakapoapoa

Ture

Finance Operations Unit Marketing Unit Wähanga Whakaü Take Kaimahi Human Resources Operations Unit

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Wähanga Whakauru Tauira Student Registry Unit Wähanga Whakawhanake Kaimahi Human Resources Development Unit Wahine woman; female Waiariki Rohe Te Wänanga o Aotearoa region that covers the area from Katikati in the north, bounded by the Tainui Rohe in the west down to Turangi, then east taking in the Huiarau Range and north to Opötiki Waiata to sing; a song Wairua the spiritual dimension of a person, group or event. Waka Hourua double hulled, voyaging canoe Wänanga place of higher learning Wänangatanga essence of wänanga Whaikörero formal process of oratory Whäinga goal; objective Whaka causative prefix Whakairo carving Whakaiti to humble or to belittle (depending on context) Whakamä embarrassment; shame; to make clear, (depending on context) Whakamana to give prestige to; to empower Whakamärama to illuminate; to enlighten Whakamaramatanga creating enlightenment Whakangäwari mitigation strategy Whakanui to enlarge; to celebrate Whakapapa ancestral lineage; genealogical table

72 - Rärangi Whakamärama – Glossary

Whakatauakï proverb, the author of which is known (see whakataukï) Whakataukï proverb, the author of which is unknown (see whakatauakï) Whakawhanaungatanga to create, or restore, relationships Whänau family Whanaungatanga relationships, kinship Whänui broad; wide; extend Whare house Wharekai dining hall Wharenui traditional meeting house Whäriki woven mat Whenua land Whïkoi / Hïkoi step; walk; journey or trip Whirikökä a tipuna renowned for his relationship with the sea and the animals that live there; Gisborne campus Whirikökä Rohe Te Wänanga o Aotearoa region that covers the East Cape and is bounded by the Waiariki Rohe to the east and the Papaiöea Rohe to the south WINHEC World Indigenous Nations Higher Education Consortium

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