Annual Report 2012 by Whitireia New Zealand

ANNUAL REPORT

Ko te manu e kai i te miro, nĹ?na te ngahere, ko te manu e kai i te mÄ tauranga, nĹ?na te ao. The one who partakes of the flora and fauna that will be their domain. The one who engages in education, opportunities are boundless.

Values Manaaki Encouraging co-operation in learning and resource sharing to promote individual confidence and group harmony through a positive and supportive leaning environment

Identity Creating a learning environment where all people feel they belong because their uniqueness is valued and promoted

Equity Achieving more equal outcomes by providing significant leaning and education success for those who have previously lacked such opportunities

Responsiveness Being flexible, creative and open to change, to better meet individual, industry and community learning needs

Success

Vision Whitireia will lead and illuminate its communities through tertiary education

Being an effective organisation with a clear sense of purpose, striving for excellence and creating an environment where all have the right to succeed

Integrity Maintaining the highest ethical standards and permitting public scrutiny to ensure the maintenance of those standards

Accountability Monitoring and reporting on the maintenance of educational quality standards and on the responsible use of public resources

ANNUAL REPORT 2012

Contents 02

Snapshot of 2012

Council Chair Report

Chief Executive Report

Students First Partnership

Combined Council

Executive

Highlights

Educational Performance

Achievements

Objectives and Key Performance Indicators

Performance Measures Definitions

Financial Statements

Statement of Financial Performance

Statement of Comprehensive Income

Statement of Changes in Equity

Statement of Financial Position

Statement of Cash Flows

Notes to the Financial Statements

Independent Auditor's Report

2012 SNAPSHOT OF Whitireia Group

8,569 11 STUDENTS ENROLLED

5,030

EQUIVALENT

FULL-TIME

STUDENTS

3,117

CERTIFICATES, DIPLOMAS, DEGREES AND POSTGRADUATE CERTIFICATES AWARDED

1,907 CERTIFICATES AWARDED 593 DIPLOMAS AWARDED 447 DEGREES AWARDED 170 POSTGRADUATE CERTIFICATES AWARDED

117 PROGRAMMES OFFERED

55%

LEVEL 8

45%

GRADUATION CEREMONIES

LEV

24%

STUDENTS STUDY

63%

LEVELS 1-5

LEVELS 1-8

E LEV

MALE

FEMALE

1,091 STUDENTS

ENROLLED DIRECTLY FROM SECONDARY SCHOOL

281 ACADEMIC STAFF 215 EXECUTIVE & SUPPORT STAFF

ANNUAL REPORT 2012

3% 9%

14 OR MORE CREDITS AT ANY LEVEL NCEA LEVEL 1 OR SCHOOL CERTIFICATE

14% 9%

NCEA LEVEL 2 OR 6TH FORM CERTIFICATE NCEA LEVEL 3 OR BURSARY OR SCHOLARSHIP

19% 1%

NO FORMAL SECONDARY SCHOOL QUALIFICATION OTHER

UNIVERSITY ENTRANCE

27% 6%

UNKNOWN

11%

OVERSEAS QUALIFICATION

41 FOUNDATION SCHOLARSHIPS AWARDED R

E OTH

7% MA-ORI

14%

17% I

FIC

STUDENT ETHNICITY

4 PRIVATE TRAINING

ESTABLISHMENTS

IN 7 LOCATIONS

KAPITI PORIRUA WELLINGTON

23% 77% INTERNATIONAL STUDENTS

1,301

DOMESTIC STUDENTS

YEAR 10

STUDENTS

PARTICIPATED IN TERTIARY EXPLORATION SESSIONS

STUDENT NUMBERS BY FACULTY / PTE 1044

ARTS BUSINESS

1840

HEALTH

1826 1549

SERVICE INDUSTRIES TE WANANGA MAORI TRADES WHITIREIA NEW ZEALAND LIMITED

516 973 950

GRADUATES WHO WENT ONTO FURTHER STUDY GRADUATES WHO WENT ONTO FURTHER STUDY OR EMPLOYMENT

22%

GRADUATES WHO ENTERED EMPLOYMENT

ASIA

C PA

40%

D AN EAL AN Z NEW ROPE EU

8 4

LOCATIONS

ENTERED THEIR STUDY WITH

AUCKLAND

CAMPUSES

HIGHEST SECONDARY SCHOOL QUALIFICATION STUDENTS

13 SECONDARY SCHOOL

LEAVER FEE SCHOLARSHIPS AWARDED

47% 86% 64%

1,038 STUDENTS PARTICIPATED IN STAR PROGRAMMES 74 SECONDARY SCHOOL STUDENTS PARTICIPATED IN GATEWAY PROGRAMMES

Kia ora koutou I am very pleased to report on the performance of Whitireia Community Polytechnic in 2012. In summary, it was an excellent year with many fine achievements across academic, quality, financial and partnership fronts. The Educational Performance Indicators (EPIs) published nationally show Whitireia in the top rank of Institutes of Technology and Polytechnics (ITPs). Particularly pleasing was a significant lift in MÄ ori achievement in 2012. Financial performance was excellent with $62.8m of income and a surplus of $1.2m. This is noteworthy given the large number of building projects funded from cash reserves over the last two years. This includes the new $17m Health building on the Porirua campus, an outstanding state-of-art facility with highly visible classrooms, learning streets, operable walls, simulation suites and a great look and feel. Excellent progress was also made in the Students First strategic partnership with Wellington Institute of Technology (WelTec). This commenced in 2011 and from 1 January 2012, the institutions were governed by one Council. There is one Academic Board and nine key projects really moved forward in 2012. These projects included Council operations, industry and students, Academic Board, branding, campus developments, marketing, international marketing, shared services, centres of excellence.

COUNCIL CHAIR // HON ROGER SOWRY ONZM

2012 has also seen significant opportunities taken in the acquisition of other businesses where there is a really good strategic fit for Whitireia. These include Computer Power (NZ) Limited and The New Zealand Film and Television School. Council continued to debate the issues that affect our institution with passion, vigour and a sound commitment to community needs. Thank you to all Councillors for contributing your knowledge and time to Whitireia and the partnership with WelTec. I would like to acknowledge the work of Dr Alan Barker and Peter Preston who retired from the Council at the end of 2012. On behalf of Council I would like to thank Chief Executive Don Campbell for his leadership in 2012 and the important and significant achievements. I would also like to thank the Executive team and staff for their dedication to the aims and goals of Whitireia. 2012 has been a really good year for Whitireia and the institution is in good heart to face the new challenges 2013 will bring. Noho ora mai Hon Roger Sowry ONZM Council Chair

ANNUAL REPORT 2012

Tena- koutou katoa Introduction I am delighted to present the 2012 Annual Report for Whitireia Community Polytechnic, te Kura Matatini o Whitireia. The Whitireia group, which includes the Polytechnic and its wholly owned subsidiary Whitireia New Zealand Limited (WNZL) performed extremely well on all major measures of success. Quality vocational tertiary education was provided to 8,569 students, or 5,030 equivalent full-time students (EFTS). This represents an EFTS increase of 9.1% over 2011, particularly noteworthy in a capped domestic funding environment. The principal category of growth was in acquisitions by WNZL. Whitireia continues to be a significant force in the international student market with 1,375 EFTS, or 1,979 students. The report shows that once again Whitireia has delivered excellent results in terms of its Educational Performance Indicators (EPIs), improving on all four national measures, while continuing to perform well in financial terms.

Chief Executive // Don Campbell

Whitireia continues to produce a financial surplus. In 2012, a group operating surplus of $1.2m on $62.8m of income was achieved. This result, although pleasing, was less than expected and reflected factors in the international student market beyond our control, notably changes in immigration regulations. Importantly the surplus continues to support campus developments including upgraded campuses and new buildings.

An exciting development in 2012 was the start of a health education building on the Porirua campus. This large scale development will provide specialist teaching spaces in a flexible, modern learning environment. It includes simulation suites, operable walls to provide flexibly sized learning spaces, learning streets and the use of natural light to create a contemporary learning environment for all. It will be operational from the beginning of the 2013 academic year.

Educational Success For any education institution, student achievement and academic performance are the highlights of the year and the core purpose all staff strive for. The Performance of Tertiary Education Organisations report which publishes national student achievement and success measurements is now in its second year. Our students continue to achieve very high rates of educational success with course completion up by 2% to 81% across all programmes. Overall Whitireia improved from 2011 on all four EPIs and is consistently well above the median for polytechnics in New Zealand. Draft results for 2012 show Whitireia 1st in course completion and 2nd in qualification completion for ITPs. Whitireia is recognised as a leading provider of tertiary education for culturally diverse communities. This is reflected in the growth and achievements of students from MÄ ori, Pacific and international origin. In 2012, MÄ ori course completion improved from 70 to 76% and qualification completion improved from 48%

to 67%. These are government priorities for the sector and Whitireia has been very successful meeting these priorities. The 2012 internal target for overall student satisfaction with programmes of study was set at 87%. A rating of 88% was achieved in 2012 and was an improvement on last year’s rate of 85%. The 2012 survey of graduates found that 64% of respondents are in paid employment. At present, 86% of graduates are either in employment and/or in further study. When asked to reflect on their experience at the Polytechnic, 94% of graduates who responded to the survey said they would recommend their programme of study to others, while 92% would study at Whitireia again. Our success is a reflection of the commitment and performance of our staff. I pay tribute to all staff for their achievements in 2012, both in teaching and in services, which integrated new acquisitions into Whitireia systems alongside the implementation of ambitious strategies, building programmes and the strategic partnership priorities.

Whitireia Strategies The Foundation and Youth Strategy envisions that students will find it stunningly easy to access foundation education (levels 1-4). Students will find clear pathways, they’ll make well informed choices and experience successful transitions. This project is building pathways both within Whitireia and between schools, kura, Private Training Establishments (PTEs), Wānanga and Whitireia.

The Māori Strategy envisions a teaching and learning environment that is reflective and supportive of Māori students to achieve success as Māori. Partnership programmes were achieved with Te Wānanga o Raukawa in trades. A Memorandum of Understanding was signed with Christchurch Polytechnic Institute of Technology (CPIT) to share research opportunities with regard to the future implementation of their Māori Exemplar staff development tool. The Pacific Strategy envisions that Pacific students enrolled in Whitireia programmes will achieve their educational goals as successfully as, or better than any other group studying at Whitireia. The Pacific Strategy will become a frame of reference for monitoring, planning and decision making across the institution. A professional development programme that aligns to the Pacific Strategy has been implemented and a Pacific Science taster programme run in three secondary schools. These activities are in collaboration with Bachelor of Nursing Pacific staff and Schools Liaison. Work is underway to establish a repository for Pacific teaching and learning resources. A Science in Schools project commissioned by the Ministry of Health continued. A Pacific Leadership workshop, facilitated by Dr Kabini Sanga and Dr Cherie Chu from Victoria University and the Wellington Leadership Pacific cluster was held for Pacific staff. The Student Experience Strategy aligns Whitireia services and resources to provide a quality successful learning experience resulting in sustained

mutually beneficial relationships with alumni. A new more informative and engaging pōwhiri and orientation programme has been very successful and enjoyable for students. Infrastructure projects included the People, Performance, Productivity Strategy, focussing on professional development which supports our strategic directions. Key initiatives are to develop critical thinkers and leadership at all levels in the organisation. Profitability of faculties aims to establish good practices of cost management and income generation and to encourage continuous improvement in profitability. The Student Destinations Strategy aims to deliver a process to have accurate and timely information on student outcomes available, to feed into future planning.

Strategic Partnership with WelTec The strategic partnership with WelTec has established a combined governing Council and Academic Board for both institutions. Work has progressed, drawing on the strengths of both institutions to give students easier access to a diverse range of programmes. Nine key projects were agreed for 2012. Excellent progress was made on all projects with staff from both institutions working very well together to establish and deliver project outcomes. Dr Peter Coolbear was appointed to the role of independent Chair of the joint Academic Board. Peter is the Director of Ako Aotearoa, New Zealand’s National Centre for Tertiary

ANNUAL REPORT 2012

Teaching Excellence. Ako Aotearoa’s vision is to contribute to the best possible educational outcomes for all learners which is exactly what the joint Academic Board will be focused on through the establishment of new collaborative relationships. More detail on this exciting strategic partnership can be found on page 10 of this Annual Report.

Around Campus A new Executive structure was implemented in 2012. Chris Gosling was appointed Deputy Chief Executive (Operations). Lawrence Arps was appointed to the role of Deputy Chief Executive (Academic), Dr Margaret Southwick and Taku Parai were also appointed to the Executive team. I would like to acknowledge the long service and achievements of Susan Cauchi who retired in 2012. The new Kāpiti campus was officially opened in February by MP for Ōtaki, Hon Nathan Guy and Minister of Education, Hon Hekia Parata. The campus in the ex Mitre 10 building on the corner of Milne Drive and Kapiti Road has undergone a $3.5m facelift. The once single level, open plan building, has been transformed into a state-of-art, 21st century learning environment with purpose built facilities for outdoor adventure, a commercial kitchen, training restaurant, beauty salon, hairdressing salon, training café, bar and great student hub areas. A mezzanine floor has been added, this houses the library, classrooms and computer suites. Videoconferencing, event and function facilities add to the campus which is completely wireless.

The largest building programme since the inception of Whitireia in 1986 was commenced in 2012. A multimillion dollar campus development programme to complete the upgrade of the main campus in Porirua commenced. Old pre-fabricated buildings were re-sited for building works on stage one of the programme. By year end construction was nearly complete on building one which has a total footprint of around 3,817 square metres with a budgeted cost over $17m. It will house the Health Faculty, administration, classrooms and conference facilities. The building includes laboratories, simulation suites and will provide state-of-art training facilities for around 1000 nursing and paramedic students who study at Whitireia. Minister of Health, Hon Tony Ryall will open the building, known as Wikitoria Katene in 2013. Tuaine Robati (Performing Arts Leader) and Dr Turoa Royal (our first Chief Executive) were recognised in the New Year’s Honours list. Tuaine became an Officer of the New Zealand Order of Merit for services to education and the Pacific community. Turoa became a Companion of the New Zealand Order of Merit for services to education.

Whitireia tutor Bella Kalola took home the “Best Female Artist” award at the Pacific Music Awards for her song “Without Paper”. The Pacific Music Awards which have 12 award categories are a great celebration of Pacific artists and the music that they create.

The Combined Council of Whitireia and WelTec, through the Whitireia Community Polytechnic whollyowned subsidiary WNZL, agreed to acquire the delivery and assets of Computer Power (NZ) Limited, at the request of the liquidator the Tertiary Education Commission (TEC) and the New Zealand Qualifications Authority (NZQA). This joint venture was made possible by the strategic partnership

Work began on a new Habitat for Humanity house being built by Whitireia trades students through an innovative partnership between Whitireia New Zealand and Habitat for Humanity.

between Whitireia and WelTec known as Students First. The New Zealand Film and Television School was purchased to further enhance our strategic presence in this important industry and to develop links with other Whitireia programmes in media and the arts. A recent example of success is Film and Television School graduate Tusi Tamasese, winning the lead awards at the Sorta Unofficial New Zealand Film Awards. Whitireia celebrated the graduation of the first intake of Bachelor of Nursing Māori students in September. This programme is unique in New Zealand, the guest speaker was Matiu Rei, Executive Director, Te Runanga o Toa Rangatira while Josephine Apihai spoke on behalf of the graduands. The Hon Hekia Parata, Minister of Education, was guest speaker at our annual celebration in June of the signing of the Treaty of Waitangi by Ngāti toa Rangatira. Minister Parata spoke about the future of education in the context of the Treaty of Waitangi,

at Takapūwāhia Marae, in Porirua. The celebration also marked the launch of our 25 year “Leading and Illuminating” publication which showcases Whitireia over the first 25 years. Whitireia were proud to again sponsor the Foodstuffs Wellington Training Awards. This annual event sees Whitireia as the principal sponsor of the Supervisory Development category. Whitireia also sponsored categories in the Kāpiti and Porirua business awards. November marked the tenth anniversary of the Bachelor of Health Science (Paramedic) degree. Whitireia and Wellington Free Ambulance have been working in partnership for ten years, offering the only Bachelor of Health Science (Paramedic) degree in the region. The education partnership between the two organisations is strong and committed, is built on trust and the desire for excellence in this health field. The degree was accredited during the year by the Council of Ambulance Authorities (CAA), the peak body for ambulance services in Australia and New Zealand. Annual academic publications led by Whitireia academics included a new research publication as well as new editions of the “Whitireia Nursing Journal” and the “4th Floor Literary Journal”. Work began on a new Habitat for Humanity house being built by Whitireia trades students through an innovative partnership between Whitireia New Zealand and Habitat for Humanity. Pasifika Trades Scholarships were launched in 2012 with strong support from the Pacific Churches Minister’s

Group. Scholarships were provided to students who attended carpentry, electrical, horticulture, landscaping, civil engineering and plumbing programmes at Whitireia and WelTec. Overall results were excellent.

International Developments Xiamen University of Technology, China, signed a Memorandum of Understanding (MOU) with Whitireia to offer teacher exchanges, student exchanges and dual degree cooperation models. The first group of students from the university came in January 2013. As well, we welcomed the first group of Korean students to the Porirua campus in 2012 under the Korean government initiative to offer tertiary training in hospitality and tourism to scholarship students. Senior delegates from Wuzi University in Beijing were also officially welcomed at the Porirua campus in May. A co-operation programme has been established between Capital University of Physical Education and Sports (CUPES), China and Whitireia. In February Whitireia hosted 11 delegates from the high level Indonesian Ministry of Education and Culture headed by the Vice Minister of Education and Culture Mr Musliar Kasim. Whitireia has opened an office in the DLF Building in Gurgaon, India. A significant negative impact on our international programme resulted from changes in immigration regulations by Immigration New Zealand, taking effect from April. We have refocused our International Strategy with diversification a key

ANNUAL REPORT 2012

theme. We aim to grow income over the period 2012-15 to $20m with 25% derived offshore.

Looking Ahead Key priorities for 2013 include lifting educational performance, tangible benefits realised from the various strategies, lifting productivity and domestic profitability, increasing revenue from the international arm, consolidating and lifting performance of WNZL, further development of the Students First strategic partnership, and progress towards completion of the building programme. Our expectations are to continue to improve EPI performance and position relative to other ITPs. This will require even more intensive focus and student support as we approach the top of the performance curve. At the same time we will have to do more with less â&#x20AC;&#x201C; government funding in 2013 will be less despite being the highest ITP performer in the level 1 and 2 contestable allocation process. The dual challenges to both improve educational performance and improve profitability at the same time will be significant. International income will grow in 2013 notwithstanding any further changes in immigration regulations or other government actions which make New Zealand a less desirable education destination than competing countries. Ambitious goals have been set by the Minister of Tertiary Education which are fully supported by Whitireia. They do require effort not only from institutions but also from government agencies to protect and enhance our reputation in the international market place.

More emphasis will be placed over the next few years on generating income overseas as much as from students coming to New Zealand. The Students First strategic partnership will start to generate a much higher public profile and financial benefits during 2013 as the nine key projects are rolled out. Synergies and savings are expected along with a more coherent ITP provision across the whole region.

So, as I reflect on our excellent performance in 2012, I also look forward to a year of big challenges in 2013 and to further progress at Whitireia as we continue to lead and illuminate our communities through tertiary education. Noho ora mai Don Campbell Chief Executive

The next stage in the redevelopment of the Porirua campus requires a further building on a similar scale to the Wikitoria Katene building which will open in 2013. There will be challenges around funding this, it will likely require borrowing for the first time in our history. We expect to strengthen an already strong relationship with NgÄ ti Toa Rangatira and to strengthen and grow our social and economic contribution to the Wellington region, in collaboration with our industry partners. We also expect to exceed national benchmarks in MÄ ori and Pacific tertiary education outcomes, to enable more students to complete their qualifications, to provide tools and support to young people in our community to enable them to make confident and informed choices about tertiary education. We will improve the literacy, language and numeracy skills of our students, further enhance the importance of science, technology, engineering and mathematics (STEM) subjects to our community, and significantly improve outcomes across all TEC priority groups.

Students First Partnership In 2011 after extensive research and consultation the Councils of Whitireia and WelTec formed a strategic partnership known as Students First. In 2012, a single Combined Council was established to govern and guide a consistent strategic direction for tertiary level vocational education in the Wellington region. This is the first example of a single Combined Council governing two tertiary institutions in New Zealand. Both institutions are committed to working together as primary partners to increase the educational benefits for students in the Wellington region, improve the ongoing operational efficiency and ensure the vocational skill needs of industry are met. The two individual institutions have a combined EFTS count of 9,431, a total of 18,058 students, $118m in annual revenue and over 900 full-time equivalent staff. The first priority of the Combined Council in 2012 was to identify key projects for the partnership. Nine were identified and now form the strategic direction. The work completed on these projects throughout 2012 provides the essential pillars for success in 2013. The main focus of these being around direct and real benefits for students. This first year of the strategic partnership has been challenging and rewarding. Staff have embraced the change and worked collaboratively to achieve positive results. Key priorities in the first year included: combining governance processes for one Combined Council; a combined Academic Board with an external Chair; developing a Shared Services Strategy; developing a Shared Campus Planning Strategy; developing a shared brand, joint domestic and international marketing and Advisory Committees.

ANNUAL REPORT 2012

Combined Council

New Zealand Qualifications Authority, and Tairawhiti Polytechnic, as well as a number of other public sector entities. Aka Arthur Aka Arthur, Ngāti Toa, has been a resident of Porirua for over 60 years. He is a kaumātua for the Royal New Zealand Police College (since 2000), a member of the Conservation Board and the Aratahi (the Māori Regional Representative Group of the Wellington Regional Council). He is on the Kaiwhaka Manua for the Department of Courts.

Combined Council L-R (Back row) Dennis Sharman, Ron Wilkinson, Aka Arthur, Peter Steel, Dr Kabini Sanga, Gregory Fortuin, Peter Preston L-R (Front row) Vaughan Renner, Nancy McIntosh-Ward, Dr Linda Sissons, Dr Alan Barker, Hon Roger Sowry ONZM, Don Campbell, Suzanne Snively ONZM

Hon Roger Sowry ONZM Council Chair

Dr Alan Barker Deputy Chair

Roger Sowry was a member of Parliament from 1990 to 2005, firstly representing the Kāpiti electorate, then as a National list MP. Roger retired from Parliament in 2005 becoming Chief Executive of Arthritis New Zealand. He is a member of the Electricity Commission and a member of the New Zealand Order of Merit.

Dr Alan Barker is a Senior Consultant with Martin Jenkins. He has extensive international and domestic experience in public sector reform, strategic planning, organisation review and financial management. Alan has worked for a number of education related institutions such as the Tertiary Education Commission, Ministry of Education,

Gregory Fortuin Gregory Fortuin is a company Director and Families Commissioner. He is a former Race Relations Conciliator and previously served as a Director of New Zealand Post, Kiwibank, ACC (Investment Committee Chair), Catalyst Injury Management (Chair) and Industry New Zealand. Gregory came to New Zealand in 1991 as the Managing Director of National Mutual Corporate Super Services Limited. He was also a Crown-Trustee and the meeting Chair of the Crown Forest Rental Trust. He was the Founding Chairman of the Youth Suicide Awareness Trust and served on the Boards of Prison Fellowship New Zealand and Youth for Christ. He is presently Chair of Streets Ahead 237, Porirua. Nancy McIntosh-Ward Nancy McIntosh-Ward holds an MBA and is a Chartered Accountant. She was the Chief Executive of the Karori Sanctuary Trust a role she resigned from in December 2012, has extensive financial, management, commercial, governance, tertiary education and marketing experience. Nancy is a member of the Institute of Directors.

Peter Preston Peter Preston has an early background in civil engineering (BE) followed by a strong commercial background including senior management roles in BP New Zealand Limited and directorships in related companies. He is a professional company Director and a Fellow of the Institute of Directors and the Institution of Professional Engineers New Zealand. Vaughan Renner Vaughan Renner has an MBA, and science and engineering qualifications. He runs his own businesses and has strong commercial, strategic planning and information technology skills. Vaughan has a background in governance currently including, The Employers Chamber of Commerce Central, Business New Zealand, and Standards New Zealand. He is a member of the Institute of Directors. Dr Kabini Sanga Dr Kabini Sanga is an Associate Professor of Education in the Faculty of Education at Victoria University of Wellington. He holds a Doctor of Philosophy from the University of Sasketchewan, Canada. He did his early university education at the University of South Pacific, Fiji. He has held a number of senior roles in education, including Director of the Institute of Education of the University of the South Pacific, the Director and Chief Executive Officer of the Solomon Islands College of Education, and the Chief Education Officer, Solomon Islands Ministry of Education. Dennis Sharman Dennis Sharman owns and operates Sharman Consulting Limited a consultancy company that delivers

comprehensive technology services to small and medium sized businesses. Dennis has just completed his term as Chair of the Board of New Zealand Institutes of Technology. Dennis holds a number of Directorships, including government appointments to the Combined Council of Whitireia and WelTec and is also a founding member of the Board of Mana Tiaki. Suzanne Snively ONZM Suzanne Snively, a former partner at PricewaterhouseCoopers in Wellington, is the Managing Director of strategic and economic advice company, MoreMedia Enterprises. Suzanne is appointed to the Health Research Council by the Minister of Health Tony Ryall and Chairs the Agri-women Development Trust and Transparency International. She has been the Chief Judge of the Electra Business Awards. Previous directorships include the Reserve Bank of New Zealand. She is a member of the Institute of Directors and the New Zealand Association of Economists. Suzanne was awarded Fulbright and Reserve Bank scholarships and was honoured by the Queen along with 100 women with a Women's Suffrage medal. She is a Member of the New Zealand Order of Merit. Peter Steel Peter Steel has an economic and engineering background having worked for over 25 years as a Consulting Engineer, becoming a Principal and Technical Director for Beca. He has strong commercial, governance and management experience from his work activities as well as a period as President of the Wellington Regional Chamber of

Commerce. He is currently General Manager - Engineering & Standards for the Infrastructure and Engineering division of KiwiRail. Ron Wilkinson Ron Wilkinson is the director of Management Answers, consultants in media and marketing. He has a background in radio and has been active in business and community activities in KÄ piti for almost 20 years. In 2008 he was presented with a Civic Award by the KÄ piti Coast District Council and in 1990 he was awarded a medal for services to broadcasting by the Queen, in recognition of his previous work with Radio New Zealand. He is a former New Zealand radio broadcaster of the year. A former board member, fellow and graduate of the New Zealand College of Management, he has designed and led workshops on many topics including management and media and worked extensively in Vietnam, Malaysia, United States of America, Australia and various countries in the South Pacific.

ANNUAL REPORT 2012

Executive Don Campbell Chief Executive MBS (Hons), BA (Economics), Dip Tchg, FNZIM Don Campbell has 30 years experience in the ITP sector, 13 as Chief Executive. He has been Chief Executive of Whitireia New Zealand since 2006 and was Chief Executive of Tai Poutini Polytechnic from 2000 to 2006. Don has served on the Board of the Institutes of Technology and Polytechnics of New Zealand, is a member of the Education New Zealand Stakeholder Advisory Committee, a Business Central Board member, a Board member of Polytechnics International New Zealand (PINZ), and a Fellow of the New Zealand Institute of Management. Lawrence Arps Deputy Chief Executive (Academic) MEd Admin, BEd Lawrence Arps has been in the tertiary sector since 1994 when he began tutoring Audio Engineering and Music. In 2000 he was appointed Academic Manager of Tai Poutini Polytechnic and led quality development during the institutions period of rapid growth and diversification. Lawrence was made Deputy Chief Executive in 2008. In 2010 he came to Whitireia as Acting Deputy Chief Executive (Operations) and oversaw the refurbishment of the Auckland campus and the redevelopment of the Porirua campus plan and design of the first of the new buildings. In 2012 he was appointed as Deputy Chief Executive (Academic).

Joining the Artena Society board in 2011 he was given the role of Chair in 2012 and has provided leadership in the refocusing of the Artena Student Management System. Chris Gosling Deputy Chief Executive (Operations) BA (Political Science & Government), Nat Dip Accounting Chris Gosling is Deputy Chief Executive (Operations) and has responsibility for the full range of corporate support functions at Whitireia including finance, human resources, ICT services and facilities. Chris comes to Whitireia after five years working in the Middle East setting up and operating a polytechnic in the Kingdom of Bahrain. He was previously Corporate Services Director at the Nelson Marlborough Institute of Technology (NMIT) following several years in finance and senior management roles in local government in New Zealand. Chris is a chartered accountant with membership of the New Zealand Institute of Chartered Accountants.

He has a passion for the economic, social and educational development of Porirua. Dr Margaret Southwick, QSM Project Manager, People, Capability and Productivity PhD, NZRN Dr Margaret Southwick has been a long-term staff member of Whitireia New Zealand serving in many different capacities including her recent tenure as the Dean of the Faculty of Health and Director of the Pacific Health Research Centre. Margaret has contributed to developing Whitireia networks with key stakeholder groups through her extensive experience on government and community Boards. She is the Chair of the Nursing Council of New Zealand, has been involved with a number of community development initiatives and has mentored Pacific community organisations. She was awarded the Queen’s Service Medal for services to Pacific communities in 2008.

Taku Parai Pou Arahi BA (First Class Hons) Taku Parai is of Ngāti Toa, Ngāti Raukawa, Te Atiawa and Ngāti Tahu descent. He is the Māori Service Manager for Compass Health and is the Pou Arahi for Whitireia. He is the current Chairman of the Te Rūnanga O Ngāti Toa Rangatira, Chairman of Whakapuaka 1B Block, Cultural Advisor to the Porirua City Council and a member of the Whitireia Executive team.

Highlights

7 international delegations

were hosted by Whitireia

First Bachelor of Nursing MAori

graduation ceremony

Opening of the new

kApiti campus Construction commences on a new

opportunities

New Deputy Chief Executives appointed

Significant lift in achievement

by MAori students

Research

appointed Dean of the Faculty of Health

increase in 2012

Dr Kathy Holloway

PhD’s

outputs continued to

Auckland campus celebrated 10 years

India office opened

at the Porirua campus

Information Technology programmes approved

to share research

held in Porirua 2 staff were awarded

health Education facility Postgraduate Diploma and Certificate in

MOU signed with CPIT

Whitireia joined

forces with ETITO

THE New Zealand Film and Television school,

2 Staff

Authored

Books

a Private Training Establishment Pasifika Trades was purchased by Whitireia New Zealand Limited

Ten years of Paramedic training

The Paramedic

programme

celebrated received Australasian Computer Power (NZ) Limited was purchased in a joint venture

with WelTec

2contributed Staff chapters

6 Short-term in books international

study groups hosted 14

Three Whitireia

Symposiums held

accreditation

scholarships launched

NgAti Toa Treaty of Waitangi

signing celebrated at

Takapuwahia Marae

25 year “Leading and Illuminating”

Whitireia publication launched

4 Staff completed Master's

Dr Peter Coolbear

appointed Chair of the Joint Academic Board

ANNUAL REPORT 2012

Educational Performance The main goal of the Whitireia Strategic Plan is

‘to improve educational outcomes and success for students.’ As this Annual Report shows, Whitireia successfully achieved this main goal in 2012. The following commentary provides more information about important aspects of the Polytechnic's overall performance.

Student Participation In 2012, Whitireia group provided education opportunities to 8,569 individual students and 5,030 EFTS. These students studied mainly at Whitireia campuses in Porirua, Wellington City, Kāpiti, Auckland and Christchurch. Whitireia group has a diverse student population with students from many ethnic groups and nationalities. In summary:

40% 14% 17% 29% New Zealand European

Māori

Pacific

Asian and other

Forty nine per cent of the Whitireia group students enrol in level 1-4 programmes that lead directly to employment as well as foundation programmes that lead to degrees and diplomas. In 2012, 30% of Polytechnic students studied in the nine degree programmes and five postgraduate qualifications.

International Students The Whitireia group has a high proportion of international students. In 2012, there were 1,375 international EFTS, while international students made up 23% of the total student population. These international students studied at Whitireia Community Polytechnic (1,254 EFTS) and WNZL (121 EFTS). Whitireia provides a wide range of student support, pastoral care and English language courses for international students contributing to high levels of success. In 2012, international students at Whitireia Community Polytechnic achieved a successful course completion rate of 79% and a qualification completion rate of 79%.

Youth Guarantee Students In 2012, TEC allocated 175 Youth Guarantee places to Whitireia. The purpose of this TEC funded provision is to enable young people, where the school environment was unable to meet their needs, into tertiary education to gain an entry level vocational qualification. The benefits for this targeted group are they gain work ready skills that can lead into apprenticeships 15

without encouraging any educational debt. Youth Guarantee students at Whitireia achieved successful course completion results of 65% and qualification completion results of 57%.

Community Engagement Whitireia has a very wide range of links to employers, professional organisations, iwi and community groups. For example, Whitireia has a long-standing relationship with local Iwi, Ngāti Toa, and has developed programmes to foster Māori achievement such as the Bachelor of Nursing Māori. Strong links between Whitireia and Pacific communities have led to well-established programmes for Tongan students, while a new initiative to provide Pasifika Trades Scholarships was introduced in 2012. Whitireia ran offerings of the National Certificate in Horticulture (Level 2) for students with disabilities in association with Te Rito Gardens (Asert-Tatou Development Trust). Programme Advisory Committees provide advice for teaching programmes and include employers, industry leaders and community representatives. Whitireia staff are actively involved in professional and industry organisations, such as the Nursing Council of New Zealand. Whitireia provides support to enable the Learning Shop to meet the needs of youth in the Porirua area. All these links assist Whitireia to provide tertiary education that meets the needs of students, families, employers, industry and communities.

79%

of international students achieved successful course completion results

65%

of Youth Guarantee students achieved successful course completion results

Exhibitions were presented in public venues including Pataka Museum of Arts and Cultures, Porirua and an artist initiative called The See Here in Wellington City. Exhibitions such as Toast showcased works from emerging New Zealand and international artists alongside our students and included a range of media including; jewellery, textiles, painting, print-making, graphic design and sculpture. The annual contemporary jewellery fundraiser auction was again hosted by Kim Hill, this time at FINC café in Wellington City.

ANNUAL REPORT 2012

Achievements Whitireia strives to meet the needs of students, community, employers, industry and government expectations.

The draft results as at 15 February 2013 demonstrate continual improvement at Whitireia. Whitireia is highly encouraged with the provisional draft rankings and looks forward to the finalised results in July 2013.

TEC has, for the past three years, been publishing course and qualification completion performance results with rankings of the tertiary sector. Around July / August 2013 TEC will publish the 2012 performance.

Student Achievement Component (SAC) course completion Course completion result

TEC ITP ranking

2012 provisional results as at 15 February 2013

83%

1st

2011

80%

7th

2010

76%

10th

2009

73%

8th

Year

Student Achievement Component (SAC) qualification completion Qualification completion result

TEC ITP ranking

2012 provisional results as at 15 February 2013

76%

2nd

2011

68%

5th

2010

65%

1st

2009

56%

6th

Year

Meeting the needs of students and graduates

88%

of students expressed an overall satisfaction with their programme

92%

of students would study at Whitireia again if given the opportunity

94%

of students would recommend Whitireia to others

Whitireia annually surveys students and graduates to gain their feedback on meeting their needs while studying at Whitireia. In the 2012 Student Satisfaction Survey, 88% of the students surveyed expressed an overall satisfaction with their programme of study and 95% are satisfied that the content taught to them is useful. The 2012 Graduate Survey highlighted that 92% of graduates, if given the opportunity, would study at Whitireia again and 94% would recommend their completed programme of study to others.

Multi award winning musician and composer, Barnaby Weir (The Black Seeds and Fly My Pretties) headlined Whitireia Music degree students in two concerts at Wellingtonâ&#x20AC;&#x2122;s Ilott Theatre in October 2012. Whitireia Up Front showcased the talent and skill of emergent contemporary rock, pop and jazz musicians. In addition, students worked front of house, light and sound production, stage management and backstage.

ANNUAL REPORT 2012

Whitireia Profile Whitireia provided quality education to a total or 5,030 EFTS or 8,569 individual students in 2012. Student numbers have increased on 2011 due to the recent acquisitions of two PTEs into WNZL PTE. Whitireia Community Polytechnic delivered 4,495 EFTS or 7,619 students in 2012. WNZL contributed 535 EFTS or 950 students within four operating divisions: Computer Power Plus (under WNZL since April 2012), The New Zealand Film and Television School (under WNZL since July 2012), New Zealand Radio Training School and a range of performing arts programmes.

5,030 8,569

EFTS

2012 Whitireia group EFTS Student Achievement Component (SAC) EFTS 66% Other funding EFTS 3% Youth Guarantee EFTS 4%

International students EFTS 27%

2012 Whitireia Community Polytechnic EFTS

Student Achievement Component (SAC) EFTS 64% Other funding EFTS 4% Youth Guarantee EFTS 4% International students EFTS 28%

Individual students

LEADING AND ILLUMINATING OUR

COMMUNITIES THROUGH TERTIARY EDUCATION

"I joined the Whitireia Bachelor of Applied Arts (Performing Arts) programme because I have a passion for performing the dances of my Pacific cultures â&#x20AC;&#x201C; I get to do this every day." Te Hau Winitana // Bachelor of Applied Arts (Performing Arts)

"The New Zealand Radio Training School has opened my eyes and doors to opportunities and possibilities in the radio industry. I have thrived on what I have been taught and have gained essential skills for furthering my career in radio." Sarah Holyoake // Certificate in Commercial Broadcasting

"The Whitireia paramedic programme is great. The tutors are fantastic, are able to cater to the different needs of students and they provide a lot of encouragement. I know that having an applied learning degree is going to take me places. The skills learnt in class are reinforced through a variety of practical experiences." John Whitehead // Bachelor of Health Science (PARAMEDIC)

"Studying carpentry at Whitireia has set me up for a great career as a builder." Lia Viliamu // Certificate in Carpentry

ANNUAL REPORT 2012

Objectives and Key Performance Indicators Key Performance Indicators Whitireia has established objectives 1-3 for the Polytechnic as a whole. These objectives and performance figures apply to all Whitireia students. This includes international students and other students who are not funded directly by TEC, as well as domestic students who are funded by TEC through SAC funding.

Whitireia Educational Performance Whitireia has established objectives and performance indicators to measure the Polytechnicâ&#x20AC;&#x2122;s performance against its strategic objectives and government priorities for tertiary education. These objectives are aligned with the Whitireia Community Polytechnic Investment Plan for 2011-2013 as agreed with TEC in 2010. 2012 is the final year for Objectives and Key Performance Indicators in the Investment Plan 2011-2013. Investment Plan 2013-2015 supersedes the Investment Plan 2011-2013 for 2013 academic performance commitments. Internal Polytechnic information as at 1 February 2013 has been used for the section on all student performance regardless of funding type. TEC has provided provisional 2012 educational performance figures for domestic SAC funded students enrolled in ITPs as at 31 January 2013. These provisional results have been used for TEC SAC funded Key Performance Indicators (KPIs).

Objective 1 Whitireia students successfully complete their courses

Target:

76% 81% Achieved:

Performance achievement: this objective was achieved. In 2012, Whitireia achieved a course completion rate of 81%. This exceeded the target for 76% of all students to successfully complete courses leading towards a qualification and continues the trend of improvement shown in the graph below. Whitireia has a polytechnic-wide focus on improving educational performance. To meet this goal, student performance is evaluated at all levels in the organisation, and improvement plans are prepared, implemented and monitored. The Council, Academic Board and faculties annually consider the academic performance of all programmes and implement steps for improvement. If completion rates are below target, action plans are prepared and implemented to improve student performance. The Polytechnicâ&#x20AC;&#x2122;s programme portfolio changes every year, as new programmes are introduced and others are no longer offered. If programmes have low student success rates and improvements do not occur, then those programmes are likely to be discontinued. This process has contributed to the steady increase in course completion rates (and also qualification completion rates) in recent years. The Whitireia focus on student success and quality improvement continued to contribute to student outcomes in 2012.

Whitireia students successfully complete their courses 100% 80% 60% 40% 20% 0% 2008

2009

Increase overall rate of successful course completions

2010

2011

2012

2008

2009

2010

2011

2012

72%

76%

77%

79%

81%

ANNUAL REPORT 2012

Objective 2 Whitireia students successfully complete their qualifications

Target:

58% * 75% Achieved:

Performance achievement: this objective was achieved. In 2012, Whitireia achieved a qualification completion rate of 75%. This exceeded the target for 58% of all students to complete a qualification and gain a degree, diploma or certificate qualification. Whitireia students are very successful in completing their qualifications and gaining degrees, diplomas and certificates. For 2012, Whitireia has already achieved its targets for students to successfully complete their qualifications. This figure is still not finalised, however, as the Polytechnic has a rigorous validation and checking process to ensure that students have completed all the requirements for the award of a qualification and this process is still underway for some degrees. This high rate of success for Whitireia students reflects the organisationâ&#x20AC;&#x2122;s focus on improving educational outcomes for students and its quality systems. It also reflects excellent commitment from all teachers to student achievement, strong Polytechnic links with employers and industry, and a high level of pastoral care for students. The Polytechnicâ&#x20AC;&#x2122;s programme portfolio changes every year, as some new programmes are introduced and others are no longer offered. Programme portfolio planning based on educational performance has contributed to the increase in qualification completion rates as shown in the following graph. Whitireia has implemented a new self-evaluation and quality improvement process throughout the organisation since 2009 with a focus on improving educational outcomes for students. The 2012 results show that success rates for students have indeed increased and the self-evaluation and quality improvement process have contributed towards increasing success for students.

Whitireia students successfully complete their qualifications 100% 80%

EAT Your Words, cafĂŠ poetry competition took the creative writing programme to the city and was part of the Wellington on a Plate programme of events. 40 cafes participated in a regional competition to write the best food related verse.

60% 40% 20% 0% 2008

2009

Increase overall qualification completion rate

2010

2011

2012

2008

2009

2010

2011

2012

56%

59%

71%

70%

75%*

* results for 2008 -2011 are final. 2012 results are provisional and not yet final.

ANNUAL REPORT 2012

Objective 3 Target:

86% 64% Achieved:

Whitireia graduates gain relevant employment or progress to further study Performance achievement: the objective was not achieved. During 2012, 64% of graduates from 2011 who responded to our survey were in paid employment. The target was based on students in paid employment and/or further study. With the inclusion of students engaged in further study, the actual result was 86%, which achieves the target. Whitireia conducts an annual survey of graduates to assess whether the expectations of graduates have been fulfilled. (Refer to Performance Measures Definitions for more information). Feedback from graduates is analysed and incorporated into plans for improvement to ensure programmes continue to meet or exceed student and employer requirements. 2012 reflects the tough employment market with 64% of surveyed graduates achieving employment. Further evidence of this, is graduates who have continued on with further study has increased from 37% in 2011 to 47% in 2012. The proportion of graduates in employment and/or study has remained around 86% to 87% as reported over the last four years.

Whitireia graduates in paid employment 100% 80% 60% 40% 20% 0% 2008

2009

Increase progress of surveyed graduates to employment

2010

2011

2012

2008

2009

2010

2011

2012

76%

72%

68%

71%

64%

Key Performance Indicators from TEC Japanese students from Oberin University, who studied at the Porirua campus, gave back to the Porirua community as part of their studies. The students were the first, in an experimental arrangement between Whitireia and Oberin University in Japan. Five were involved, they lived with local families, studied English language at Whitireia and participated in volunteer work as a way of confirming their acquired language skills and to give back to the community they were part of.

The following Key Performance Indicators have been set by the TEC. These student performance indicators apply only to domestic students who are eligible for government SAC funding, in this case 55% of all individual students or 64% of all EFTS at Whitireia. These figures do not include international students or students who are not funded by TEC through government SAC funding. Internal Polytechnic information as at 1 February 2013 has been used for participation. On 15 February, TEC has provided provisional 2012 educational performance figures for domestic students enrolled in ITPs as at 31 January 2013. TEC has also provided initial rankings for 18 organisations in the ITP sector. TECâ&#x20AC;&#x2122;s provisional data has been used in this report when measuring SAC educational performance.

ANNUAL REPORT 2012

Participation of Target Groups of Students Māori studying at level 4 and above

Target:

13% 15% Achieved:

Pacific studying at level 4 and above

Target:

12% 13%

Performance achievement: targets were achieved for the participation of all target groups, except for Māori students studying at levels 1-3. It is worth noting that Whitireia exceeded target for Māori students studying in levels 4 and above. Whitireia regards this shift to higher levels of study as a positive development. The following indicators measure the participation of target groups of students of Māori, Pacific and younger students as a percentage of all domestic students as EFTS. They also show whether these students are studying in lower level courses i.e. levels 1-3 on the National Qualifications Framework (NQF) or higher level courses i.e. levels 4-8 on the NQF. As shown in the following table and graph, Whitireia has achieved its objectives for diverse groups of domestic students to participate in tertiary education, and also for more students from target student groups to study in higher level programmes at levels 4 and above on the NQF.

Participation of target groups of students (domestic students with SAC EFTS) 2012 target

2012 achievement

Māori studying at levels 1-3

Māori studying at level 4 and above

13%

15%

Pacific studying at levels 1-3

Pacific studying at level 4 and above

12%

13%

Under 25 studying at levels 1-3

12%

13%

Under 25 studying at level 4 and above

26%

34%

Key performance indicator

Achieved:

2012 participation 40% 30% 20% 10% 0% The proportion of SAC EFTS enrolled who are Māori Levels 1-3

The proportion of SAC EFTS enrolled who are Pacific

The proportion of SAC EFTS enrolled who are under 25

Level 4 and above

Educational Performance of Domestic Students Successful course completion rate (overall)

Target

76% 83% Achieved

Successful course completion Performance achievement: all targets were achieved. 83% of government SAC funded domestic students successfully completed their courses in 2012, and targets were achieved at all levels of study. These indicators measure the proportion of all domestic students enrolled in 2012 who successfully completed and passed courses leading to a recognised qualification. Whitireia achieved all targets for domestic students to complete their courses. As the following figures show, course completions were highest for students in programmes at levels 4 and above. According to provisional TEC data, Whitireia has the highest course completion rate in the ITP sector for 2012. Final TEC data for 2012 is expected in August 2013.

Successful course completion for domestic students with SAC EFTS 2012 target

2012 achievement

Successful course completion rate (overall)

76%

83%

Successful course completion rate levels 1-3

70%

78%

Successful course completion rate level 4 and above

77%

84%

Key performance indicator

Course completion for domestic students with SAC EFTS 100% 80% 60% 40% 20% 0% Successful course completion rate (overall)

Successful course completion rate levels 1-3

Successful course completion rate level 4 and above

ANNUAL REPORT 2012

Successful qualification completion

Successful qualification completion rate (overall)

Target :

58% * 76% Achieved :

Performance achievement: all targets were achieved. 76% of domestic students successfully completed their qualifications in 2012, and targets were achieved at all levels of study. These indicators measure the proportion of all domestic students enrolled in 2012 who successfully completed a recognised qualification such as degree, diploma or certificate. Although qualification completion rates have not been fully finalised, the target for domestic students to complete qualifications has already been achieved for 2012. High qualification completion rates for domestic students reflect high rates of qualification completions for all Whitireia students, as outlined in objective 2 of this report. Whitireia has the second highest qualification completion rate in the ITP sector, according to provisional TEC data. Final TEC data for 2012 is expected in August 2013.

Successful qualification completion for domestic students with SAC EFTS 2012 target

2012 achievement

Qualification completion rate (overall)

58%

76%*

Qualification completion rate levels 1-3

51%

75%*

Qualification completion rate level 4 and above

61%

77%*

Key performance indicator

*2012 results are provisional and not yet final Qualification completion for domestic students with SAC EFTS 100% 80% 60% 40% 20% 0% Qualification completion rate (overall)

Qualification completion rate levels 1-3

Qualification completion rate level 4 and above

Student retention and progression Performance achievement: targets for overall student retention were achieved, with a student retention rate of 70%. Student retention rate (overall)

Target:

50% 70%

The student retention rate measures the percentage of individual domestic students enrolled in one year who successfully completed a qualification or reenrolled at Whitireia in the following year. An important component of student retention rates is the number of students who successfully completed qualifications in the previous year. An increase in qualification completions at Whitireia, as outlined in objective 2, has contributed to this higher retention rate in 2012. Whitireia has the fourth highest retention rate in the ITP sector, according to provisional TEC data. Final TEC data for 2012 is expected in August 2013.

Achieved:

Student progression rate (overall)

Target:

36% 30% Achieved:

Student retention and progression (domestic students with SAC EFTS) Key performance indicator

2012 target

2012 achievement

Student retention rate (overall)

50%

70%

Student progression rate (overall)

36%

30%

Student progression levels 1-3

36%

31%

Student retention and progression for domestic students with SAC EFTS 100% 80% 60% 40% 20% 0% Student retention rate (overall)

Student progression rate (overall)

Student progression (levels 1-3)

ANNUAL REPORT 2012

Student progression rates measure the percentage of Whitireia domestic students who completed a qualification in one year and then, within the next 12 months, enrolled in a higher level qualification at the same or different institution.

Marie Finkle, a recent graduate of the Whitireia Certificate in Professional Cookery programme was awarded a prestigious City & Guilds Medal of Excellence. The medal was awarded for distinction in her studies in the City & Guilds, Certificate in Food Preparation, coming in the top 1% in the world. Marie managed to secure the top mark and highest distinction for her year of study.

The progression targets were not achieved, reporting 30% for all SAC students and 31% has been achieved for SAC students at levels 1-3. A possible explanation is that Whitireia has relatively high rates of qualification completion and our graduates goal is to work towards gaining employment. Therefore, graduates do not necessarily re-enrol for study at a higher level of study in the following year as measured by this progression rate. According to provisional TEC data, Whitireia ranks twelfth in the ITP sector for student progression in level 1-4 with 36% achievement which is within the medium rate of 38% for all ITPs in New Zealand. Final TEC data for 2012 is expected in August 2013.

Educational Performance of Māori Students Successful course completion rate level 4 and above

Target:

63% 77% Achieved:

Qualification completion rate level 4 and above

Target:

55% * 67% Achieved:

Performance achievement: all targets were achieved for Māori students to complete courses and complete qualifications successfully. These indicators measure the achievement of Māori students at different levels of the NQF. Course completion rates for Māori students were above target in 2012 as shown in the table below. In the longer term, Whitireia aims for Māori students to achieve at around the same rate as all students. Whitireia has established a Māori Strategy in order to improve educational participation and outcomes for Māori at Whitireia. This strategy will lead, inform, influence, guide and direct all activities of the Polytechnic which have an impact (both direct and indirect) on Māori educational participation and achievement. Phase 1 of the strategy was implemented in 2012, and within levels 1-3 educational provision it appears to be demonstrating success with Māori students successful course completion shifting from 59% in 2011 to 71% in 2012. Whitireia is committed towards achieving the TEC goal of Māori educational parity with all students.

ANNUAL REPORT 2012

Educational performance of Māori students with SAC EFTS 2012 target

2012 achievement

Successful course completion rate levels 1-3

59%

71%

Successful course completion rate level 4 and above

63%

77%

Qualification completion rate levels 1-3

43%

69%*

Qualification completion rate level 4 and above

55%

67%*

Key performance indicator

Libby Greatbatch took the top honour in the ” Best New Broadcaster “ category at the 2012 New Zealand Radio Awards. She was awarded two awards in this category; the Best New Broadcaster Creative and Technical award and the Best New Broadcaster Overall award.

*2012 results are provisional and not yet final Educational performance of Māori students with SAC EFTS 100% 80% 60% 40% 20% 0% Successful course completion rate levels 1-3

Successful course completion rate level 4 and above

Qualification completion rate levels 1-3

Qualification completion rate level 4 and above

Educational Performance of Pacific Students Successful course completion rate level 4 and above

Target:

63% 79% Achieved:

Qualification completion rate level 4 and above

Target:

55% * 75% Achieved:

Performance achievement: all targets were achieved for Pacific students to complete courses and complete qualifications successfully. These indicators measure the achievement of Pacific students at different levels of the NQF. All targets were achieved in 2012, and Pacific students achieved above target in higher and lower level programmes. Although Pacific students have achieved at relatively high levels at Whitireia, the Polytechnic aims to improve educational outcomes for Pacific students. A Pacific Strategy has therefore been established with four targeted goals: Goal 1: Improved educational outcomes Goal 2: Effective learning environment Goal 3: Foster Pacific identity and leadership Goal 4: Develop collaborative partnerships The strategy was implemented in 2012, and Whitireia is committed towards achieving the TEC goal of Pacific educational parity with all students. Educational performance of Pacific students with SAC EFTS 2012 target

2012 achievement

Successful course completion rate levels 1-3

59%

73%

Successful course completion rate level 4 and above

63%

79%

Qualification completion rate levels 1-3

43%

69%*

Qualification completion rate level 4 and above

55%

75%*

Key performance indicator

*2012 results are provisional and not yet final Educational performance of Pacific students with SAC EFTS 100% 80% 60% 40% 20% 0% Successful course completion rate levels 1-3

Successful course completion rate level 4 and above

Qualification completion rate levels 1-3

Qualification completion rate level 4 and above

ANNUAL REPORT 2012

Educational Performance of Students under 25 Successful course completion rate level 4 and above

Target:

73% 82% Achieved:

Qualification completion rate level 4 and above

Target:

49% * 65% Achieved:

Performance achievement: all targets were achieved for students under 25 years of age to complete courses and complete qualifications successfully. These indicators measure the achievement of students under 25 years as at 1 July 2012 at different levels of the NQF. All targets were achieved in 2012, and young students achieved above target in higher and lower level programmes. In the longer term, Whitireia aims to further improve educational outcomes for these students. A Youth and Foundation Strategy has been developed for the Polytechnic with the following aims: • Young people aged 16-19 participate in programmes at Whitireia in increasing numbers • More young people aged under 25 achieve qualifications at level 4 and above at Whitireia • Young Māori and Pacific people participate at the same rate as, and achieve as well as other students The first stage of the strategy was introduced in 2012 and in regards to the level 1-3 educational provision, is starting to demonstrate an impact. In 2011, the level 1-3 successful course completion for SAC students under the age of 25 was 71%; in 2012 this has lifted to 73%. Educational performance of students under 25 with SAC EFTS 2012 target

2012 achievement

Successful course completion rate levels 1-3

64%

73%

Successful course completion rate level 4 and above

73%

82%

Qualification completion rate levels 1-3

51%

69%*

Qualification completion rate level 4 and above

49%

65%*

Key performance indicator

*2012 results are provisional and not yet final Educational performance of students under 25 with SAC EFTS 100% 80% 60% 40% 20% 0% Successful course completion rate levels 1-3

Successful course completion rate level 4 and above

Qualification completion rate levels 1-3

Qualification completion rate level 4 and above

Educational Performance: Embedded Literacy and Numeracy Embedded literacy and numeracy in courses at levels 1-3

Target:

95% 100% Achieved:

Performance achievement: the target was achieved. 100% of courses at levels 1-3 in 2012 contain elements of embedded literacy and numeracy teaching within their delivery. Whitireia is highly committed to embedding literacy and numeracy in its educational delivery for vocational qualifications. All students enrolled in a level 1-3 qualification are assessed for literacy and numeracy using the TEC mandated tool â&#x20AC;&#x153;Literacy and Numeracy for Adults Assessment Toolâ&#x20AC;?. Students receive embedded literacy and numeracy learning as part of their course of study and are re-assessed at the end of their studies to assess their level of improvement in their literacy and numeracy skills. Whitireia has had a literacy and numeracy plan for the last five years, and the successful implementation of this plan has led to embedded literacy and numeracy in all programmes of study at Whitireia in levels 1-3. In 2012, Whitireia conducted assessments within numeracy, writing and reading using the Literacy and Numeracy for Adult Assessment Tool. Key performance indicator Proportion of levels 1-3 courses offered that contain embedded literacy and numeracy

2012 target

2012 achievement

95%

100%

ANNUAL REPORT 2012

Target SURPLUS:

1.3% 1.9% Achieved SURPLUS:

Financial 2012 target

2012 achievement

TEO risk rating against the Financial Monitoring Framework

Low

% of income from non-government sources

56%

53%

Surplus %

1.3%

1.9%

Key performance indicator

2008 â&#x20AC;&#x201C; 2012 percentage of surplus 7.00% 6.00% 4.00% 3.00% 2.00% 1.00% 0% -1.00% -2.00%

Surplus %

2008

2009

2010

2011

2012

-1.1%

3.1%

6.5%

4.6%

1.9%

Extent of improvements in attributes as per Capital Assets Management (CAM) Improvement Plan Target: Shift to moderate for description of assets Achieved: This target was not met due to a significant number of capital projects being undertaken during 2012. This was due to the new building programme and site development. The improvements condition and description of Whitireia assets and CAM in general, will achieve the target of moderate during 2013. The independent assessors report has outlined this expectation in the latest independent CAM report.

Performance Measures Definitions Performance measures that the Council considers will enable the preparation of a Statement of Service Performance for the purposed of Section 159YD.2 (a) of the Education Act 1989 are listed below. Students enrolled Usually expressed as equivalent full-time students (EFTS) for the Polytechnic Students with Student Achievement Component (SAC) funding Students recorded in the Single Data Return (SDR) with funding code “01” Māori students Students at the time of enrolment who have identified themselves as Māori Pacific students Students at the time of enrolment who have identified themselves as Pacific Students under 25 years Students who are aged 24 years or younger on 1 July 2012 Participation This measures the proportion of EFTS delivered for target groups of students in a calendar year Formula Total EFTS delivered for a group of interest (i.e. Māori) in 2012 Total EFTS delivered in 2012

x 100

Successful course completion rate Successful course completion relates to courses, papers or modules that lead to a recognised qualification. The rate is an EFTS weighted metric that takes into account the workload of the course and EFTS delivered during the total period of the course enrolment. Successful course completion rate formula EFTS delivered for the total number of successfully completed course enrolments ending in 2012 EFTS delivered for the total number of course enrolments ending in 2012

x 100

ANNUAL REPORT 2012

Qualification completion rate A qualification is completed when a student successfully completes all the requirements for the award of a qualification, such as a degree, diploma or certificate. The rate is an EFTS weighted metric that takes into account the relative size of the different qualifications. The 2012 qualification completion figures given in this report were those at 31 January 2013. These figures are still provisional and are likely to increase as more awards are validated and recorded. Formula (Sum of qualification completions in 2012 multiplied by EFTS value of the qualification) EFTS delivered for the total number of course enrolments ending in 2012

x 100

Student retention rate This measure is based on the proportion of individual students (not EFTS) enrolled in one year who either re-enrol in any course in the following year or successfully complete their qualification. Formula Students re-enrolled in 2012 or completed in 2011 or 2012 Students with some portion of an enrolment in 2011

x 100

Student progression This measures the progression of students who complete a qualification and move on within 12 months to pursue a qualification at a higher level either at Whitireia or another tertiary education provider in New Zealand. This data is supplied by TEC and not finalised until TEC receives the April 2013 SDR from the Tertiary Education providers in May 2013. Whitireia expects TEC to provide finalised data in July 2013. For levels 1-3, the indicator measures student re-enrolment at levels 4 or above. Formula Number of students enrolled at a higher qualification level within 12 months following the qualification completion Number of students completing a qualification at levels 1-3 in previous year

x 100

Levels of study This refers to levels 1-10 on the National Qualification Framework (NQF). For more information visit the New Zealand Qualifications Authority (NZQA) website: www.nzqa.govt.nz/studying-in-new-zealand/nzqf/nzqf-levels Percentage of income from non-government sources Formula Income from total non-government sources Total income received

x 100

Surplus percentage Formula Total revenue Total operational expenses

x 100

Student satisfaction survey The 2012 survey was carried out between August and September at all campuses within New Zealand and October to November for distance and online learning students. 2,315 students participated in the paper based survey conducted during class time with staff not affiliated with the programme of study. Results were entered into a database, analysed and reported back to Faculty Deans, Programme Managers, Executive and Combined Council. Graduate satisfaction survey The 2012 survey was carried out over a period of three weeks in April by phoning all domestic graduates. 46% of the graduates of the 1,659 domestic graduates participated in the graduate survey. Results were entered into a database, analysed and reported back to Faculty Deans, Programme Managers, Executive and Combined Council.

WHITIREIA NEW ZEALAND ANNUAL REPORT 2012

Financial Statements The accompanying accounting policies and notes form an integral part of these financial statements

Financial Statements Statement of Financial Performance for the year ended 31 December 2012 Group

Note

Polytechnic

Actual 2012 $'000

Budget 2012 $'000

Actual 2011 $'000

Actual 2012 $'000

Actual 2011 $'000

Revenue Government grants

29,514

26,152

26,458

26,651

25,862

Tuition fees

28,131

27,614

26,899

25,169

25,954

523

570

880

467

856

4,603

4,096

4,254

6,375

5,006

62,771

58,432

58,496

58,662

57,683

32,848

31,236

30,460

32,848

29,950

Depreciation expenses

3,720

3,571

3,179

3,725

3,184

Amortisation expenses

285

130

276

285

276

Course related expenses

2,784

3,084

3,063

2,784

3,040

Occupancy costs

4,487

4,769

4,881

4,487

4,881

Project expenditure

8,339

3,926

5,239

4,411

5,189

421

388

425

421

425

8,639

8,898

8,313

8,543

8,153

61,523

56,002

55,916

57,504

55,178

1,248

2,430

2,580

1,158

2,505

(1,446)

216

(1,230)

(1,446)

2,430

2,580

(288)

2,505

2,430

2,580

(288)

2,505

Interest income Revenue from other operating activities

Change in fair value of investment property Total revenue Operating expenses Personnel costs

Impairment of held for sale asset

Trading activities Other expenses

Total operating expenses Surplus / (deficit) before non-operating items Non-operating items Non operating (expense) / income items Share of net profit of jointly controlled entities Total non-operating items Surplus before taxation Taxation Surplus after taxation

The accompanying notes form part of these financial statements

ANNUAL REPORT 2012

Statement of Comprehensive Income for the year ended 31 December 2012 Group

Note

Polytechnic

Actual 2012 $’000

Budget 2012 $’000

Actual 2011 $’000

Actual 2012 $’000

Actual 2011 $’000

2,430

2,580

(288)

2,505

(Loss) on property revaluations

(415)

(3,015)

(415)

(3,015)

Total other comprehensive income

(415)

(3,015)

(415)

(3,015)

Total comprehensive income

(397)

2,430

(435)

(703)

(510)

Surplus / (deficit) Other comprehensive income

Statement of Changes in Equity for the year ended 31 December 2012 Group

Note

Balance at 1 January

Polytechnic

Actual 2012 $’000

Budget 2012 $’000

Actual 2011 $’000

Actual 2012 $’000

Actual 2011 $’000

63,513

67,272

63,823

63,744

64,254

2,430

2,580

(288)

2,505

Comprehensive income Surplus / (deficit) Other comprehensive income

(415)

(3,015)

(415)

(3,015)

Total comprehensive income

(397)

2,430

(435)

(703)

(510)

Reclassification of reserves from Whitireia Foundation

125

Total non-comprehensive income items

125

63,116

69,702

63,513

63,041

63,744

Non-comprehensive income items

Balance at 31 December

The accompanying notes form part of these financial statements

Statement of Financial Position as at 31 December 2012 Group

Note

Polytechnic

Actual 2012 $’000

Budget 2012 $’000

Actual 2011 $’000

Actual 2012 $’000

Actual 2011 $’000

Assets Current assets Cash and cash equivalents

572

3,063

6,434

493

6,312

Debtors and other receivables

8,428

867

6,729

3,592

6,726

Inventory

142

101

142

273

2,348

7,339

2,000

7,000

Prepayments Taxation asset Current portion of financial assets in the nature of investments Assets held for sale

9 14

Total current assets

1,570

13,367

4,031

20,677

8,070

20,202 1,356

Non-current assets Financial assets in the nature of investments

1,356

Investment in joint controlled entity

356

140

Property, plant and equipment

71,681

78,967

61,376

71,711

61,411

Intangible assets

1,683

242

1,298

922

538

Investment properties

280

275

280

Assets held for sale

1,570

Total non-current assets Total assets

74,019

80,840

64,534

74,418

65,155

87,386

84,871

85,211

82,488

85,357

Liabilities Current liabilities Creditors and other payables

7,503

998

3,307

3,408

3,227

Special accounts

Revenue received in advance

10,501

4,036

12,128

8,430

12,128

Employee entitlements (CL)

3,160

2,988

3,160

2,951

Current provisions

225

3,733

233

225

233

Loan from controlled entity

1,340

21,483

8,767

18,707

16,660

18,622

Total current liabilities Non-current liabilities Employee entitlements (NCL)

232

402

270

232

270

Provisions

2,555

2,721

2,555

2,721

6,000

Term borrowings Total non-current liabilities

2,787

6,402

2,991

2,787

2,991

Total liabilities

24,270

15,169

21,698

19,447

21,613

Net assets

63,116

69,702

63,513

63,041

63,744

Equity General reserves

45,643

48,722

45,625

45,580

45,868

Property revaluation reserves

17,461

20,980

17,876

17,461

17,876

Restricted reserves

Total equity 48

63,116

69,702

63,513

63,041

63,744

The accompanying notes form part of these financial statements

ANNUAL REPORT 2012

Statement of Cash Flows for the year ended 31 December 2012 Group

Note

Polytechnic

Actual 2012 $’000

Budget 2012 $’000

Actual 2011 $’000

Actual 2012 $’000

Actual 2011 $’000

Receipt of government grants

29,753

25,823

25,724

26,890

25,101

Receipt of student tuition fees

24,804

28,460

26,319

24,603

25,374

Cash flows from operating activities

Receipt of other ancilliary income

4,583

5,609

3,738

6,357

5,116

Interest received

523

570

954

466

930

Net taxation paid

(23)

(11)

229

248

Payment to employees

(32,715)

(31,236)

(30,288)

(32,677)

(29,743)

Payments to suppliers

(22,709)

(22,525)

(21,536)

(21,390)

(21,303)

4,216

6,701

5,129

4,249

5,723

GST

Net cash flows from operating activities Cash flows from investing activities Purchase of property, plant and equipment

(14,275)

(17,600)

(9,239)

(14,277)

(9,351)

Purchase of intangibles

(670)

(601)

(670)

(601)

Investment in jointly controlled entity

(140)

4,991

4,500

3,977

5,003

4,000

(10,078)

(13,100)

(5,863)

(10,068)

(5,952)

Proceeds from sale of property, plant and equipment Sale of financial assets in the nature of investments Net cash flows used in investing activities Cash flows from financing activities Capital contribution Term loan advance

6,000

Net cash flows from financing activities

6,000

(5,862)

(399)

(734)

(5,819)

(229)

6,434

3,462

7,168

6,312

6,541

572

3,063

6,434

493

6,312

Net (decrease) / increase in cash and cash equivalents Cash and cash equivalents at the beginning of the period Cash and cash equivalents at the end of the period

The GST (net) component of operating activities reflects the net GST paid and received with the Inland Revenue Department. The GST (net) component has been presented on a net basis, as the gross amounts do not provide meaningful information for financial statement purposes, and to be consistent with other primary financial statements.

The accompanying notes form part of these financial statements

Reconciliation from the net surplus / (deficit) to the net cash flow from operations

Group

Polytechnic

Actual 2012 $’000

Actual 2011 $’000

Actual 2012 $’000

Actual 2011 $’000

2,580

(288)

2,505

Depreciation

3,720

3,179

3,725

3,184

Amortisation

285

276

285

276

(16)

(215)

(5)

Surplus / (deficit) from the Statement of Comprehensive Income Adjustments for:

Profit on disposal of assets Fair value increase in investments Impairment of assets held for sale Non-cash lease inducement amortisation Movement in bad debt provision Total non-cash items

(177)

1,347

(177)

1,347

3,629

4,877

3,849

4,882

Add / less movements in working capital items (Increase) / decrease in inventories (Increase) / decrease in trade and other receivables (Increase) / decrease in prepayments (Decrease) / increase in taxation

(50)

(3,510)

3,101

(3,542)

(200)

(73)

(200)

(73)

(23)

(11)

(Decrease) / increase in loan to controlled entity

1,308

626

Increase / (decrease) in trade and other payables

4,067

(733)

(690)

(1,627)

1,727

(3,698)

1,727

(Decrease) / increase in revenue received in advance Increase / (decrease) in employee entitlements

133

191

171

207

Net movement in working capital items

569

(2,328)

688

(1,664)

4,216

5,129

4,249

5,723

Net cash flow from operating activities

(50) (1,731)

ANNUAL REPORT 2012

Notes to the Financial Statements 1. Statement of Accounting Policies for the Year Ended 31 December 2012 Reporting entity Whitireia Community Polytechnic (the Polytechnic) is a Tertiary Education Institution (TEI) domiciled in New Zealand and is governed by the Crown Entities Act 2004 and the Education Act 1989. The Polytechnic and group consists of Whitireia Community Polytechnic and its subsidiaries, Whitireia New Zealand Limited (WNZL) (100% owned) and Whitireia Foundation (100% interest). All subsidiaries are incorporated and domiciled in New Zealand. On 27 May 2011 Whitireia Performing Arts Company Limited amalgamated with WNZL. The Polytechnic has consolidated the accounts of the Whitireia Foundation for financial reporting purposes because in substance, the Polytechnic predetermined the objectives of the Foundation at establishment and benefits from the Foundationâ&#x20AC;&#x2122;s complementary activities. The primary objective of the Polytechnic and group is to provide tertiary education services for the benefit of the community rather than making a financial return. Accordingly, the Polytechnic has designated itself and the group as public benefit entities for the purposes of New Zealand equivalents to International Financial Reporting Standards (NZ IFRS). The financial statements of the Polytechnic and group are for the year ended 31 December 2012. The financial statements were authorised for issue by the Council on 17 April 2013.

Basis of preparation Statement of compliance The financial statements of the Polytechnic and group have been prepared in accordance with the requirements of the Crown Entities Act 2004 and the Education Act 1989, which includes the requirement to comply with New Zealand Generally Accepted Accounting Practice (NZ GAAP). These financial statements have been prepared in accordance with NZ GAAP. They comply with NZ IFRS, and other applicable financial reporting standards as appropriate for public benefit entities. Measurement base The financial statements have been prepared on a historical cost basis, modified by the revaluation of investment properties, assets classified as held for sale, land and buildings. Functional and presentation accuracy The financial statements are presented in New Zealand dollars and all values are rounded to the nearest thousand dollars ($000). The functional currency of the Polytechnic and its subsidiaries is New Zealand Dollars (NZ$). Changes in accounting policies There have been no changes in accounting policies during the financial year. New and amended standards adopted by the group The Polytechnic has adopted the following revisions to accounting standards during the financial year, which have had only a presentational or disclosure effect:

â&#x20AC;˘

FRS-44 New Zealand Additional Disclosures and Amendments to NZ IFRS to harmonise with IFRS and Australian Accounting Standards (Harmonisation Amendments) â&#x20AC;&#x201C; the purpose of the new standard and amendments is to harmonise Australian and New Zealand accounting standards with source IFRS and to eliminate many of the differences between the accounting standards in each jurisdiction. The main effect of the amendments on the Polytechnic is that certain information about property valuations is no longer required to be disclosed.

Standards, amendments and interpretations issued that are not yet effective and have not been early adopted Standards, amendments and interpretations issued that are not yet effective and have not been early adopted, and are relevant to the Polytechnic and group are: â&#x20AC;˘

NZ IFRS 9 Financial Instruments will eventually replace NZ IAS 39 Financial Instruments: Recognition and Measurement. NZ IAS 39 is being replaced through the following three main phases: Phase 1 Classification and Measurement, Phase 2 Impairment Methodology, and Phase 3 Hedge Accounting. Phase 1 has been completed and has been published in the new financial instrument standard NZ IFRS 9. NZ IFRS 9 uses a single approach to determine whether a financial asset is measured at amortised cost or fair value, replacing the many different rules in NZ IAS 39. The approach in NZ IFRS 9 is based on how an entity manages its financial assets (its business model) and the contractual cash flow characteristics of the financial assets. The financial liability requirements are the same as those of NZ IAS 39, except for when an entity elects to designate a financial liability at fair value through the surplus/deficit. The new standard is required to be adopted for the year ended 30 June 2016. However, as a new Accounting Standards Framework will apply before this date, there is no certainty when an equivalent standard to NZ IFRS 9 will be applied by public benefit entities.

The Minister of Commerce has approved a new Accounting Standards Framework (incorporating a Tier Strategy) developed by the External Reporting Board (XRB). Under this Accounting Standards Framework, the Polytechnic is classified as a Tier 1 reporting entity and it will be required to apply full Public Benefit Entity Accounting Standards (PAS). These standards are being developed by the XRB based on current International Public Sector Accounting Standards. The effective date for the new standards for public sector entities is expected to be for reporting periods beginning on or after 1 July 2014. This means the Polytechnic expects to transition to the new standards in preparing its 31 December 2015 financial statements. As the PAS are still under development, the Polytechnic is unable to assess the implications of the new Accounting Standards Framework at this time. Due to the change in the Accounting Standards Framework for public benefit entities, it is expected that all new NZ IFRS and amendments to existing NZ IFRS will not be applicable to public benefit entities. Therefore, the XRB has effectively frozen the financial reporting requirements for public benefit entities up until the new Accounting Standard Framework is effective. Accordingly, no disclosure has been made about new or amended NZ IFRS that exclude public benefit entities from their scope.

Significant accounting policies Basis of consolidation The group financial statements are prepared by adding together like items of assets, liabilities, equity, income, expenses, and cash flows on a line-by-line basis. All significant intragroup balances, transactions, income, and expenses are eliminated on consolidation. Subsidiaries The Polytechnic consolidates in the group financial statements all entities where the Polytechnic has the capacity to control the financing and operating policies of an entity so as to obtain benefits from the activities of the entity. This power exists where the Polytechnic controls the majority voting power on the governing body or where such

ANNUAL REPORT 2012

policies have been irreversibly predetermined by the Polytechnic or where the determination of such policies is unable to materially impact the level of potential ownership benefits that arise from the activities of the subsidiary. Inter-company transactions, balances and unrealised gains on transactions between group entities are eliminated. Unrealised losses are also eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group. The cost of a business combination is measured as the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, in exchange for control of the subsidiary plus any costs directly attributable to the business combination excluding transaction costs. Any excess of the cost of the business combination over the Polytechnic’s interest in the net fair value of the identifiable assets, liabilities, and contingent liabilities is recognised as goodwill. If the Polytechnic’s interest in the net fair value of the identifiable assets, liabilities, and contingent liabilities recognised exceeds the cost of the business combination, the difference will be recognised immediately in the surplus or deficit as a bargain purchase. Investments in subsidiaries are carried at cost in the Polytechnic’s parent entity financial statements. Jointly controlled entity The Polytechnic and group’s jointly controlled entity interest is accounted for using the equity method. Investments in jointly controlled entities are initially recognised at cost and the carrying amount is increased or decreased to recognise the appropriate share of the profit or loss of the jointly controlled entity after the date of acquisition. The Polytechnic and group's share of the profit or loss is recognised in the group profit or loss. Distributions received from a jointly controlled entity reduce the carrying amount of the investment in the group financial statements. If the share of losses of a jointly controlled entity equals or exceeds the interest in the jointly controlled entity, the group discontinues recognising its share of further losses. After the group’s interest is reduced to zero, additional losses are provided for, and a liability is recognised, only to the extent that the group has incurred legal or constructive obligations or made payments on behalf of the jointly controlled entity. If the jointly controlled entity subsequently reports profits, the group will resume recognising its share of those profits only after its share of the profits equals the share of losses not recognised. Where the group transacts with a jointly controlled entity, profit or losses are eliminated to the extent of the group’s interest in the relevant jointly controlled entity. Investments in a jointly controlled entity are carried at cost in the Polytechnic parent entity financial statements. Revenue Revenue is measured at the fair value of consideration received or receivable. Government grants and research income Government grants and research income are recognised as revenue upon entitlement. Student tuition fees Student tuition fees are recognised as revenue on a course percentage of completion basis. The percentage of completion is measured by reference to the days of the course completed as a proportion of total course days. The balance is recognised as revenue in advance. Sale of goods Revenue from sale of goods is recognised when the product is sold to the customer. Interest and dividends Interest income is recognised using the effective interest method. 53

Dividends are recognised when the right to receive payment has been established. Leases Finance leases A finance lease is a lease that transfers to the lessee substantially all the risks and rewards incidental to ownership of an asset, whether or not title is eventually transferred. At the commencement of the lease term, finance leases are recognised as assets and liabilities in the statement of financial position at the lower of the fair value of the leased item or the present value of the minimum lease payments. The finance charge is charged to the surplus or deficit over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability. The amount recognised as an asset is depreciated over its useful life. If there is no certainty as to whether the Polytechnic and group will obtain ownership at the end of the lease term, the asset is fully depreciated over the shorter of the lease term and its useful life. Operating lease An operating lease is a lease that does not transfer substantially all the risks and rewards incidental to ownership of an asset. Lease payments net of lease inducements under an operating lease are recognised as an expense on a straight-line basis over the lease term. Cash and cash equivalents Cash and cash equivalents includes cash on hand, deposits held at call with banks other short-term highly liquid investments with original maturities of three months or less. Debtors and other receivables Short-term debtors and other short-term receivables are recorded at amortised cost less any provision for impairment. Foreign currency transactions Foreign currency transactions are translated into NZ$ (the functional currency) using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end of monetary assets and liabilities denominated in foreign currencies are recognised in the surplus or deficit. Other financial assets (including investment in other entities) Financial assets are initially recognised at fair value plus transaction costs unless they are carried at fair value through surplus or deficit in which case the transaction costs are recognised in the surplus or deficit. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Polytechnic and group has transferred substantially all the risks and rewards of ownership. Financial assets are classified, for the purposes of measurement, as loans and other receivables. Classification of the financial asset depends on the purpose for which the instruments were acquired. Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the balance date, which are included in non-current assets. Related party receivables that are repayable on demand are classified as a non-current asset because repayment of the receivable is not expected within 12 months of the balance date.

ANNUAL REPORT 2012

After initial recognition loans and receivables are measured at amortised cost using the effective interest method less any provision for impairment. Gains and losses when the asset is impaired or derecognised are recognised in the surplus or deficit. Impairment of financial assets At each balance date, the Polytechnic and group assesses whether there is any objective evidence that a financial asset or group of assets is impaired. Any impairment losses are recognised in surplus or deficit. Loans and receivables (including cash and cash equivalents and debtors and other receivables) Impairment of a loan or a receivable is established when there is objective evidence that the Polytechnic and group will not be able to collect amounts due according to the original terms of the debt. Significant financial difficulties of the debtor, probability that the debtor will enter into bankruptcy and the default in payments are considered indicators that the asset is impaired. The amount of the impairment is the difference between the assetâ&#x20AC;&#x2122;s carrying amount and the present value of estimated future cash flows, discounted using the original effective interest rate. For debtors and other receivables, the carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is recognised in the surplus or deficit. When the receivable is uncollectible, it is written-off against the allowance account. Overdue receivables that have been renegotiated are reclassified as current (i.e. not past due). For other financial assets, impairment losses are recognised directly against the instruments carrying amount. Inventories Inventories held for distribution or consumption in the provision of services that are not supplied in a commercial basis are measured at cost (using the FIFO method), adjusted when applicable, for any loss of service potential. Where inventories are acquired at no cost or for nominal consideration, the cost is the current replacement cost at the date of acquisition. The amount of any write-down for the loss of service potential or from cost to net realisable value is recognised in the surplus or deficit in the period of the write-down. Property, plant and equipment Property, plant and equipment consists of the following asset classes: land and buildings, plant and machinery, motor vehicles, computer hardware, furniture, fittings and artwork, library collection, office equipment, teaching equipment, leasehold improvements, communication systems, and signage. Land is measured at fair value, and buildings are measured at fair value less accumulated depreciation and impairment losses. All other asset classes are measured at deemed cost on acquisition less any accumulated depreciation and impairment losses. Revaluations Land and buildings are revalued with sufficient regularity to ensure that the carrying amount does not differ materially from fair value at least every two years. The carrying values of revalued assets are assessed biannually by independent valuers to ensure that they do not differ materially from fair value. If there is evidence supporting a material difference, then the off-cycle asset classes are revalued. Land and buildings revaluation movements are accounted for on a class of asset basis. The net revaluation results are credited or debited to other comprehensive income and is accumulated to an asset revaluation reserve in equity for that class of asset. Where this would result in a debit balance in the asset revaluation reserve, this balance is not recognised in other comprehensive income but is recognised in the surplus or deficit. Any subsequent increase on revaluation that reverses a previous decrease in value recognised in the 55

surplus or deficit will be recognised first in the surplus or deficit up to the amount previously expensed, and then recognised in other comprehensive income. Additions The cost of an item of property, plant and equipment is recognised as an asset if, and only if, it is probable that future economic benefits or service potential associated with the item will flow to the Polytechnic and group and the cost of the item can be measured reliably. Work in progress is recognised at cost less impairment and is not depreciated. In most instances, an item of property, plant and equipment is initially recognised at its cost. Where an asset is acquired at no cost, or for a nominal cost, it is recognised at fair value as at the date of acquisition. Disposals Gains and losses on disposals are determined by comparing the disposal proceeds with the carrying amount of the asset. Gains and losses on disposals are reported net in the surplus or deficit. When revalued land and building assets are sold, the amounts included in property revaluation reserves in respect of those land and building assets are transferred to general funds. Depreciation Depreciation is provided on a straight-line basis on all property, plant, and equipment other than land and work in progress at rates that will write off the cost, (or valuation) of the assets to their residual values over their useful lives. The useful lives and associated depreciation rates of major classes of assets have been estimated as follows: Class of assets

Life

Rate

Buildings

10-50 years

2% - 10% per annum

Plant and machinery

8-10 years

10% - 12.5% per annum

Motor vehicles

5 years

20% per annum

Computer hardware

5 years

20% per annum

Furniture and fittings

10 years

10% per annum

Library collection

5-8 years

12.5% per annum

Office equipment

5 years

20% per annum

Teaching equipment

5 years

20% per annum

Leasehold improvements

1-12 years

8% - 100% per annum

Communication systems

4 years

25% per annum

Signage

4 years

25% per annum

Leasehold improvements are depreciated over the unexpired period of the lease or the estimated useful lives of the improvements, whichever is the shorter. The unexpired period of the lease includes any rights of renewal where management considers it reasonably certain that these rights be exercised. The residual value and useful life of an asset is reviewed, and adjusted if applicable, at each financial year end.

ANNUAL REPORT 2012

Intangible assets Software acquisition and development Acquired computer software licenses are capitalised on the basis of the costs incurred to acquire and bring to use to specific software. Costs that are directly associated with the development of software for internal use, are recognised as an intangible asset. Direct costs include the software development employee costs and an appropriate portion of relevant overheads. Staff training costs are recognised as an expense when incurred. Costs associated with maintaining computer software are recognised as an expense when incurred. Course development costs Course development costs relate to development of educational courses and are capitalised if purchased wholly from other institutes of learning. Amortisation The carrying value of an intangible asset with a finite life is amortised on a straight-line basis over its useful life. Amortisation begins when the asset is available for use and ceases at the date that the asset is derecognised. The amortisation charge for each period is recognised in the surplus or deficit. The useful lives and associated amortisation rates of major classes of intangible assets have been estimated as follows: Class of assets

Life

Rate

Computer software

3 years

33% per annum

Course development costs

3 years

33% per annum

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. Gains or losses arising from derecognition 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 surplus or deficit when the asset is derecognised. Impairment of property, plant, equipment and intangible assets Intangible assets that have an indefinite useful life, or not yet available for use, and goodwill, are not subject to amortisation and are tested annually for impairment. Assets that have a finite useful life are reviewed for indicators of impairment at each balance date. When there is an indicator of impairment the asset’s recoverable amount is estimated. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. Value in use is depreciated replacement cost for an asset where the future economic benefits and service potential are not primarily dependent on the asset’s ability to generate net cash inflows and where the Polytechnic and group would, if deprived of the asset, replace its remaining future economic benefits or service potential. The value in use for cash-generating assets is the present value of expected future cash flows.

If an assetâ&#x20AC;&#x2122;s carrying amount exceeds its recoverable amount, the asset is impaired and the carrying amount is written-down to the recoverable amount. For revalued assets the impairment loss is recognised in other comprehensive income to the extent the impairment loss does not exceed the amount in the revaluation reserve in equity for that same class of asset. Where that results in a debit balance in the revaluation reserve, the balance is recognised in the surplus or deficit. For assets not carried at a revalued amount, the total impairment loss is recognised in the surplus or deficit. The reversal of an impairment loss on a revalued asset is credited to other comprehensive income and increases the asset revaluation reserve for that class of asset. However, to the extent that an impairment loss for that class of asset was previously recognised in the surplus or deficit, a reversal of the impairment loss is also recognised in the surplus or deficit. For assets not carried at a revalued amount the reversal of an impairment loss is recognised in the surplus or deficit. Investment properties and assets held for sale Properties held for sale or leased to third parties under operating leases are classified as investment property unless the property is held to meet service delivery objectives, rather than to earn rentals or for capital appreciation. Property held to meet service delivery objectives is classified as property, plant, and equipment. Investment property is measured initially at its cost, including transaction cost. Subsequent to initial recognition investment properties are measured at fair value as determined annually by an independent valuer. Gains and losses arising from a change in the fair value of investment properties are recognised in the surplus or deficit. Creditors and other payables Creditors and other payables are initially measured at fair value and subsequently measured at amortised cost using the effective interest method. Employee entitlements Short-term employee entitlements Employee benefits that are due and settled within 12 months after the end of the period in which the employee renders the related service are measured at nominal values based on accrued entitlements at current rates of pay. These include salaries and wages and annual leave earned but not yet taken at balance date, and sick leave. A liability for sick leave is recognised to the extent that absences in the coming year are expected to be greater than the sick leave entitlements earned in the coming year. The amount is calculated based on the unused sick leave entitlement that can be carried forward at balance date, to the extent it will be used by staff to cover those future absences. Long-term employee entitlements Employee benefits that are due to be settled beyond 12 months after the end of period in which the employee renders the related service, such as long service leave and retirement gratuities, have been calculated on an actuarial basis. The calculations are based on:

â&#x20AC;˘

Likely future entitlements accruing to staff, based on years of service, years to entitlement, the likelihood that staff will reach the point of entitlement, and contractual entitlement information, and

â&#x20AC;˘

The present value of the estimated future cash flows

ANNUAL REPORT 2012

Expected future payments are discounted using market yields on government bonds at balance date with terms to maturity that match, as closely as possible, the estimated future cash outflows for entitlements. The inflation factor is based on the expected long-term increase in remuneration for employees. Presentation of employee entitlements Sick leave, annual leave, vested long service leave, and non-vested long service leave and retirement gratuities expected to be settled within 12 months of the balance date, are classified as current liability. All other employee entitlements are classified as a non-current liability. Superannuation schemes Defined contribution schemes Obligations for contributions to KiwiSaver and the Government Superannuation Fund are accounted for as defined contribution schemes recognised as an expense in the surplus or deficit as incurred. Provisions A provision is recognised for future expenditure of uncertain amount or timing when there is a present obligation (either legal or constructive) as a result of a past event, it is probable that expenditures will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to the passage of time is recognised as an interest expense and is included as “finance costs”. Equity Equity is measured as the difference between total assets and total liabilities. Equity is disaggregated and classified into a number of components. The components of equity are: •

General funds;

•

Property revaluation reserves;

•

Fair value through comprehensive income reserves; and

•

Restricted reserves

Restricted reserves Restricted reserves are a component of equity generally representing a particular use to which various parts of equity have been assigned. Reserves may be legally restricted or created by the Polytechnic. Transfers from these reserves may be made only for certain specified purposes or when certain specified conditions are met. Property revaluation reserves This reserve relates to the revaluation of property, plant, and equipment to fair value. Goods and Services Tax (GST) All items in the financial statements are stated exclusive of GST, except for debtors and other receivables and creditors and other payables, which are presented on a GST inclusive basis. Where GST is not recoverable as input tax then it is recognised as part of the related asset or expense. The net amount of GST recoverable from, or payable to, the Inland Revenue Department (IRD) is included as part of receivables or payables in the statement of financial position. The net GST paid to, or received from, the IRD, including GST relating to investing and financing activities, is classified as net operating cash flow in the statement of cash flows. Commitments and contingencies are disclosed exclusive of GST. 59

Income Tax Whitireia Community Polytechnic is exempt from income tax, pursuant to section 55BA of the Income Tax Act 2007. Whitireia Foundation is exempt from income tax, pursuant to sections CW 41 and 42 of the Income Tax Act 2007. However, Whitireia New Zealand Limited does not qualify for any exemption from income tax. The tax expense for the period comprises current and deferred tax. Tax is recognised in the income statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively. The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance date where operations result in generating taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities. Deferred income tax is recognised, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill; deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled. Budget figures The budget figures are those that are approved by the Council at the start of the financial year. The budget figures have been prepared in accordance with NZ GAAP, using accounting policies that are consistent with those adopted by the Council in the preparation of the financial statements. Critical accounting estimates and assumptions In preparing these financial statements the Polytechnic and group has made estimates and assumptions concerning the future. These estimates and assumptions may differ from the subsequent actual results. Estimates and assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below: Property revaluations Note 11 provides information about the estimates and assumptions exercised in the measurement of revalued land and buildings. Estimated impairment of goodwill The group tests annually whether goodwill has suffered any impairment, in accordance with the stated accounting policy. The recoverable amounts of cash-generating units have been determined based on value-in-use calculations. These calculations require the use of estimates (refer note 12).

ANNUAL REPORT 2012

Critical judgements in applying accounting policies Management have exercised the following critical judgements in applying accounting policies for the year ended 31 December 2012: Crown owned land and buildings Property in the legal name of the Crown that is occupied by the Polytechnic and group is recognised as an asset in the Statement of Financial Position. The Polytechnic and group consider it has assumed all the normal risks and rewards of ownership of this property despite legal ownership not being transferred and accordingly it would be misleading to exclude these assets from the financial statements. Distinction between revenue and capital contributions Most Crown funding received is operational in nature and is provided by the Crown under the authority of an expense appropriation and is recognised as revenue. Where funding is received from the Crown under the authority of a capital appropriation, the Polytechnic and group accounts for the funding as a capital contribution directly in equity. Information about capital contributions recognised in equity is disclosed in note 20.

Income

Performance-based research funding Other government grants Total government grants Tuition fees

Domestic fees

iii.

Polytechnic

Actual 2012 $’000

Actual 2011 $’000

Actual 2012 $’000

Actual 2011 $’000

29,079

25,331

26,216

24,735

Government grants Student Achievement Component (SAC) funding

ii.

Group

357

1,054

357

1,054

29,514

26,458

26,651

25,862

Group

Polytechnic

Actual 2012 $’000

Actual 2011 $’000

Actual 2012 $’000

Actual 2011 $’000

13,960

11,989

10,998

11,044

International fees

14,171

14,910

14,171

14,910

Total tuition fees

28,131

26,899

25,169

25,954

Other income Group Actual 2012 $’000

Donations and koha Rental revenue Education service contracts Bookshop income Gain on sale of property, plant and equipment Other income Total other income

Personnel Costs

Polytechnic Actual 2011 $’000

Actual 2012 $’000

Actual 2011 $’000

368

113

358

113

2,261

2,253

4,121

3,069

333

382

333

382

1,558

1,455

1,547

1,441

4,603

4,254

6,375

5,006

Group

Polytechnic

Actual 2012 $’000

Actual 2011 $’000

Actual 2012 $’000

Actual 2011 $’000

Academic salaries

17,416

16,284

17,416

16,119

General salaries and wages

15,023

13,954

15,023

13,576

Defined contribution plan employer contributions

276

Increase / (decrease) in employee entitlements

133

173

133

207

32,848

30,460

32,848

29,950

Total personnel costs

Employer contributions to defined contribution plans include contributions to KiwiSaver and the Government Superannuation Fund. 62

ANNUAL REPORT 2012

Other Expenses

Group Actual 2012 $’000

Audit fees - current year's auditor

Polytechnic Actual 2011 $’000

Actual 2012 $’000

Actual 2011 $’000

158

111

Audit fees - prior year's auditor

130

Advertising and public relations

844

820

844

799

221

Bad debts expensed Bank charges Catering Commissions paid Consultants and legal Consumables Councillor fees - current year Councillor fees - prior year Equipment lease

213

210

211

204

1,989

2,246

1,989

2,246

483

452

478

448

104

146

104

146

367

172

367

172

Export education levy

Fees and subscriptions

252

245

252

242

Graduation costs

126

132

126

Grants and scholarships

Immigration Visa fees

1,065

1,103

1,065

1,088

459

183

459

180

Information technology Insurance Interest paid

(1)

International contacts activities

Loss/(profit) on disposal of fixed assets

Office costs

399

392

398

367

Other operating

368

167

366

165

Postage

100

Professional development fees

179

153

178

152

Sundry expenses

174

203

153

195

Travel and accommodation

773

691

773

677

Motor vehicle expenses

Repairs and maintenance information technology

Whitireia scholarships Total other expenses

103

8,639

8,313

8,543

8,153

Non-operating Expense

Group

Polytechnic

Actual 2012 $’000

Actual 2011 $’000

Actual 2012 $’000

Actual 2011 $’000

Media Training Centre temporary relocation due to seismic issues

239

Restructuring

175

Redundancies

124

Impairment of leasehold improvements

807

Fixed asset write-off

101

1,446

Total current portion

Media Training Centre relocation In December 2011 the Whitireia Council decided to relocate the Media Training Centre in Wellington from 107 Cuba Street. An alternative premises was provided by the landlord at 15 Dixon Street. The costs above were for the cost of fitting out the temporary campus. Impairment of leasehold improvements Due to the uncertainty over the timing of the seismic strengthening at 107 Cuba Street, a provision has been allowed for the impairment of the leasehold fitout. Fixed asset write-off This is a one-off adjustment required to align the general ledger with the fixed asset register to correct historical transactions entered incorrectly.

Cash and Cash Equivalents

Cash at bank and in hand Term deposits with maturities less than three months Total cash and cash equivalents

Group

Polytechnic

Actual 2012 $’000

Actual 2011 $’000

Actual 2012 $’000

Actual 2011 $’000

507

3,434

493

3,312

3,000

572

6,434

493

6,312

The carrying value of cash at bank, call deposits, and term deposits with original maturities less than three months approximates to their fair value.

ANNUAL REPORT 2012

Debtors and Other Receivables

Group

Polytechnic

Actual 2012 $’000

Actual 2011 $’000

Actual 2012 $’000

Actual 2011 $’000

3,741

5,159

2,917

5,159

Student receivables Student fees receivables Provision for impairment Net student fee receivables

(74)

(42)

(74)

(42)

3,667

5,117

2,843

5,117

Other receivables Other debtors and receivables Total debtors and other receivables

4,761

1,612

749

1,609

8,428

6,729

3,592

6,726

Fair value Student fees are due before a course commences or are due on enrolment if the course has already begun. Student fee receivables are non-interest bearing and are payable in full by course commencement date. Therefore, their carrying value approximates their fair value. Other receivables are non-bearing and are generally settled on 30-day terms. Therefore, the carrying value of other receivables approximates their fair value.

Impairment

The ageing profile of student fee receivables at year end is detailed below: Group

Polytechnic

Gross $’000

Impairment $’000

Net $’000

Gross $’000

Impairment $’000

Net $’000

1,634

Past due 31 - 60 days

1,088

886

Past due 61 - 90 days

338

238

2012 Not past due Past due 1 - 30 days

Past due over 90 days Total

681

(74)

607

159

(74)

3,741

(74)

3,667

2,917

(74)

2,843

2,152

285

2011 Not past due Past due 1 – 30 days Past due 31 – 60 days

Past due 61 – 90 days

108

(42)

108

(42)

Past due over 90 days

2,560

5,159

(42)

5,117

5,159

(42)

5,117

Total

Due to the large number of student fee receivables, the impairment assessment is performed on a collective basis, based upon an analysis of past collection history and debt write-offs.

Movements in the provision for impairment of student fee receivables are as follows: Group Actual 2012 $’000

Actual 2011 $’000

Actual 2012 $’000

Actual 2011 $’000

At 1 January

Additional provisions made during the year

(17)

Receivables written off during the year At 31 December

Inventories

Group

Inventories held for resale Materials and consumables Total inventories

Polytechnic

Financial Assets in the Nature of Investments

Polytechnic

Actual 2012 $’000

Actual 2011 $’000

Actual 2012 $’000

Actual 2011 $’000

137

142

Group

Polytechnic

Actual 2012 $’000

Actual 2011 $’000

Actual 2012 $’000

Actual 2011 $’000

3,000

Effective interest rate %

Maturity

Westpac

4.30%

Various

ASB - Foundation

4.50%

Various

348

339

Bank of New Zealand

4.90%

Various

4,000

ANZ National Bank

4.50% 11-Jan-2013

Current Deposits with banks

2,000

2,348

7,339

2,000

7,000

1,346

1,356

Non-current Investments in controlled entity (at cost) Shares in unlisted entities (at cost)

ANNUAL REPORT 2012

The deposit with banks classified as current assets are those with original maturing periods of greater than three months and less than twelve months. The investment in controlled entity is for WNZL (100% owned). On 27 May 2011 Whitireia Performing Arts Company Limited amalgamated with WNZL through a short form amalgamation pursuant to section 222 of the Companies Act (1993). The primary purpose of the amalgamation was to simplify the Polytechnic’s group structure. During the year the Polytechnic’s subsidiary WNZL, acquired the delivery of two PTE's. The delivery of The New Zealand Film and Television School, which operates in Wellington was acquired on 1 July 2012. Computer Power (NZ) Limited was placed into liquidation on 19 March 2012. At the request of the TEC, NZQA and the liquidator, WNZL entered into a licence agreement from 2 April 2012 to operate the business before formally purchasing the assests and delivery on 1 May 2012. WNZL has adopted the trading name Computer Power Plus and worked with the Polytechnic and WelTec to continue delivery at the campuses in Auckland, Wellington and Christchurch. Refer also to note 25.

10. Investment in Jointly Controlled Entity The Polytechnic and WelTec have a 50% interest in a joint venture, Computer Power Plus, which undertakes academic services on contract to WNZL. The following amounts represent the group’s share of the assets, liabilities, income and expenses of the joint venture: Actual 2012 $’000

Budget 2012 $’000

Actual 2011 $’000

Parent Investment in Computer Power Plus

140

Group Investment in Computer Power Plus

356

Assets Current assets

703

Non-current assets

111

Total assets

814

Liabilities Current liabilities

(458)

Total liabilities

(458)

Income

1,964

Expenses Profit / loss Share of joint venture's contingent liabilities Share of joint venture's commitments

(1,748)

216

149

Net book value

44,930

(996)

Accumulated depreciation at 31 December 2012

Revaluations/impairment

1,667

(4,590)

268

Disposals during the year

Recognition of leasehold inducement reversal

(64)

(711)

(1,017) 0

(4,083)

6,257

Recognition of accumulated depreciation on assets acquired from subsidiary

Current year depreciation

Accumulated depreciation at 1 January 2012

Accumulated depreciation

45,926

519

452

Cost / valuation at 31 December 2012

Transfers

(9)

Transfer to property held for sale

(269)

207

5,800

Impairment charged during the year

(441)

Revaluations

307

Additions during the year

45,617

$’000

Disposals during the year

Cost / valuation at 1 January 2012

Cost / valuation

Group

Computer hardware

Land & buildings

11. Property, Plant and Equipment

68 1,023

(1,512)

(42)

(171)

(1,299)

2,535

177

2,315

$’000

Furniture fittings & artwork

805

(1,836)

(218)

(1,618)

2,641

237

2,404

$’000

Library collection

327

(645)

(68)

(577)

972

931

$’000

Plant & machinery

(594)

(65)

(581)

685

(52)

724

$’000

Motor vehicles

(390)

(5)

(20)

(365)

427

403

$’000

Office equipment

1,122

(2,267)

(177)

(374)

(1,718)

3,389

453

(8)

398

2,546

$’000

Teaching equipment

8,990

(2,210)

848

(137)

(163)

(1,037)

(1,721)

11,200

5,405

(1,654)

7,380

$’000

Leasehold improvements

459

(699)

(39)

(660)

1,158

448

710

$’000

Communication systems

(140)

180

140

$’000

Signage

12,190

(7,477)

14,499

5,168

$’000

Work in progress

71,681

(15,879)

871

(137)

320

(451)

(3,720)

(12,762)

87,560

(9)

(1,654)

(441)

(329)

15,855

74,138

$’000

Total group

Transfers

Net book value

Accumulated depreciation at 31 December 2011 45,617

1,717

(4,083)

(51)

104

(752) 91

(3,526)

5,800

2,416

(1,163)

Current year depreciation

Disposals during the year

Revaluations

(1,202)

45,617

112

(632)

Accumulated depreciation at 1 January 2011

Accumulated depreciation

Cost / valuation at 31 December 2011

(110)

575

5,223

(5,431)

Revaluations

192

Additions during the year

51,488

$’000

Disposals during the year

Cost / valuation at 1 January 2011

Cost / valuation

Group

Computer hardware

Land and buildings

Property, Plant and Equipment

1,016

(1,299)

(145)

(1,203)

2,315

459

1,856

$’000

Furniture, fittings & artwork

786

(1,618)

(225)

(1,393)

2,404

160

2,244

$’000

Library collection

354

(577)

(60)

(521)

931

(1)

185

747

$’000

Plant & machinery

143

(581)

(81)

(500)

724

684

$’000

Motor vehicles

(365)

(25)

(377)

403

(108)

(2)

438

$’000

Office equipment

828

(1,718)

(282)

(1,524)

2,546

108

277

2,161

$’000

Teaching equipment

5,659

(1,721)

(29)

(390)

(1,307)

7,380

900

(3)

4,499

1,984

$’000

Leasehold improvements

(660)

(1)

(48)

(611)

710

700

$’000

Communication systems

(140)

(8)

(132)

140

$’000

Signage

5,168

(345)

(20)

5,060

473

$’000

Work in progress

61,376

(12,762)

(77)

2,507

283

(3,179)

(12,296)

74,138

(5,431)

(136)

11,532

68,138

$’000

Total group

ANNUAL REPORT 2012

Net book value

44,930

(996)

Accumulated depreciation at 31 December 2012

Revaluations/impairment

1,672

(4,593)

268

Disposals during the year

Recognition of leasehold inducement reversal

(64)

(712)

(1,017) 0

(4,085)

6,265

519

452 45,926

(9)

(269)

207

5,808

Recognition of accumulated depreciation on assets acquired from subsidiary

Current year depreciation

Accumulated depreciation at 1 January 2012

Accumulated depreciation

Cost / valuation at 31 December 2012

Transfers

Transfer to property held for sale

Impairment charged during the year

(441)

Revaluations

307

Additions during the year

45,617

$’000

Disposals during the year

Cost / valuation at 1 January 2012

Cost / valuation

Polytechnic

Computer hardware

Land & buildings

Property, Plant and Equipment

1,016

(1,511)

(42)

(169)

(1,300)

2,527

177

2,307

$’000

Furniture fittings & artwork

805

(1,837)

(219)

(1,618)

2,642

238

2,404

$’000

Library collection

366

(658)

(75)

(583)

1,024

983

$’000

Plant & machinery

(594)

(65)

(581)

685

(52)

724

$’000

Motor vehicles

(389)

(5)

(20)

(364)

423

399

$’000

Office equipment

1,118

(2,263)

(177)

(371)

(1,716)

3,381

453

(8)

398

2,538

$’000

Teaching equipment

8,990

(2,210)

848

(137)

(163)

(1,037)

(1,721)

11,200

5,405

(1,654)

7,380

$’000

Leasehold improvements

459

(700)

(40)

(660)

1,159

448

711

$’000

Communication systems

(140)

180

140

$’000

Signage

12,190

(7,477)

14,499

5,168

$’000

71,711

(15,891)

870

(137)

320

(451)

(3,725)

(12,768)

87,602

(9)

(1,654)

(441)

(329)

15,856

74,179

$’000

Work in Total progress Polytechnic

Transfers

Net book value

Accumulated depreciation at 31 December 2011 45,617

1,723

(4,085)

(51)

104

(754) 0

(3,435)

5,808

2,416

(1,163)

Current year depreciation

Disposals during the year

Revaluations

(1,202)

45,617

112

(632)

Accumulated depreciation at 1 January 2011

Accumulated depreciation

Cost / valuation at 31 December 2011

(110)

681

5,125

(5,431)

Revaluations

192

Additions during the year

51,488

$’000

Disposals during the year

Cost / valuation at 1 January 2011

Cost / valuation

Polytechnic

Computer hardware

Land & buildings

Property, Plant and Equipment

1,007

(1,300)

(144)

(1,190)

2,307

482

1,825

$’000

Furniture, fittings & artwork

786

(1,618)

(225)

(1,393)

2,404

160

2,244

$’000

Library collection

400

(583)

(66)

(521)

983

(1)

237

747

$’000

Plant & machinery

143

(581)

(81)

(500)

724

684

$’000

Motor vehicles

(364)

(25)

(339)

399

(108)

(2)

122

387

$’000

Office equipment

822

(1,716)

(280)

(1,436)

2,538

108

394

2,036

$’000

Teaching equipment

5,659

(1,721)

(29)

(390)

(1,302)

7,380

865

(3)

4,555

1,963

$’000

Leasehold improvements

(660)

(1)

(48)

(611)

711

700

$’000

Communication systems

(140)

(8)

(132)

140

$’000

Signage

5,168

(345)

(20)

5,060

473

$’000

61,411

(12,768)

(43)

2,416

104

(3,184)

(12,061)

74,179

(5,431)

(136)

11,934

67,812

$’000

Work in Total progress Polytechnic

ANNUAL REPORT 2012

Valuation Land Land is valued at fair value using market based evidence based on its highest and best use with reference to comparable land values. Adjustments have been made to the ‘unencumbered’ land value for campus land where there is a designation against the land or the use of the land is restricted because of reserve or endowment status. These adjustments are intended to reflect the negative impact on the value of land where the owner is unable to use the land more intensely. Restrictions on the Polytechnic and group’s ability to sell land would normally not impair the value of the land because the Polytechnic and group has operational use of the land for the foreseeable future and will substantially receive the full benefits of outright ownership. The most recent valuation of land was performed by a registered independent valuer, Bayleys Valuations Limited, and the valuation is effective as at 31 December 2011. Buildings Specialised buildings (e.g. campuses) are valued at fair value using optimised depreciated replacement cost because no reliable data is available for buildings designed for education delivery purposes. Optimised depreciated replacement cost is determined using a number of significant assumptions. Significant assumptions include: • The replacement asset is based on the reproduction cost of the specific assets with adjustments where appropriate for obsolescence due to over design or surplus capacity • The replacement cost is derived from recent construction contracts of similar assets and Property Institute of New Zealand cost information • Estimating the remaining useful life of assets • Straight-line depreciation has been applied in determining the depreciated replacement cost value of the asset. The most recent valuation of buildings was performed by a registered independent valuer, Bayleys Valuations Limited, and the valuation is effective as at 31 December 2011. The total fair value of property, including assets held for sale and investment property, valued by Bayleys Valuations Limited at 31 December 2011 totalled $47,467,000. Restrictions on title Under the Education Act 1989, the Polytechnic and group are required to obtain the consent from the Ministry of Education to dispose of or sell off property where the value of the property exceeds an amount determined by the Minister. There are also various restrictions in the form of historic designations, reserve, and endowment encumbrances attached to land. The Polytechnic and group does not consider it practical to disclose in detail the value of land subject to these restrictions. The total amount of property, plant and equipment in the course of construction is $12,189,652 (2011:$4,873,630) at 31 December 2012.

ANNUAL REPORT 2012

12. Intangible Assets Group

Polytechnic

Course developWork in ment Goodwill progress Software $’000 $'000 $’000 $’000

Course develop- Work in ment progress Total Software $’000 $’000 $’000 $’000

Total $’000

Balance at 1 January 2012 Cost

1,957

760

221

2,938

1,957

221

2,178

(1,640)

317

760

221

1,298

317

221

538

Additions at cost

449

239

710

449

239

709

Accumulated depreciation in additions

(40)

(285)

124

239

385

124

239

384

2,406

761

460

3,648

2,406

460

2,887

Accumulated amortisation and impairment Opening carrying amount Year ended 31 December 2012

Disposals Amortisations Closing carrying amount Balance at 31 December 2012 Cost Accumulated amortisation and impairment Closing carrying amount

(1,965)

441

761

460

1,683

441

460

922

Balance at 1 January 2011 Cost Accumulated amortisation and impairment Opening carrying amount

1,577

760

2,337

1,577

(1,364)

213

760

973

213

380

221

601

380

221

601

Year ended 31 December 2011 Additions Disposals Amortisations Opening carrying amount

(276)

317

760

221

1,298

317

221

538

Balance at 31 December 2011 Cost Accumulated amortisation and impairment Opening carrying amount

1,957

760

221

2,938

1,957

221

2,178

(1,640)

317

760

221

1,298

317

221

538

There are no restrictions over the title of intangible assets. No intangible assets are pledged as security for liabilities.

Goodwill Goodwill of $761,000 (2011: $760,000) has been allocated to the cash generating unit (CGU) of WNZL. The synergies of the business combination in which the goodwill arose are expected to be realised only by the assets of WNZL. The recoverable amount of the CGU has been determined based on value in use calculations. These calculations use cash flow projections based on financial budgets approved by the Council and cover a fiveyear period. Cash flows beyond the five-year period have been extrapolated using an estimated growth rate. Key assumptions used for the goodwill value in use calculation: • Funding received from the government relating to the level of EFTS funded will remain unchanged for the foreseeable future • Budgeted gross margin – 20% • Weighted average growth rate – 0% • Pre-tax discount rate – 8% These assumptions have been used for the analysis of the CGU of WNZL. The Polytechnic has determined budgeted gross margin based on past performance and its expectations for the market. The weighted average growth rate used is consistent with the forecasts included in industry reports. The discount rate used is pre-tax and reflects specific risks relevant to the CGU. The Polytechnic and group believes that a reasonable possible change in any of the key assumptions would not cause the carrying amount of goodwill to exceed the recoverable amount.

13. Investment Properties

Opening balance as at 1 January (fair value) Net gain / (loss) from fair value adjustment Closing balance as at 31 December

Group

Polytechnic

Actual 2012 $’000

Actual 2011 $’000

Actual 2012 $’000

Actual 2011 $’000

280

275

280

275

280

Commerce Crescent property is stated at fair value. Investment properties were valued on 31 December 2011 by Bayleys Valuations Limited, independent registered valuer. Bayleys Valuations Limited is a member of the New Zealand Institute of Valuers (Inc.). The valuations undertaken were 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 the valuation.

ANNUAL REPORT 2012

14. Property Held for Sale The Lindale campus ($1.6m) was subject to a purchase and sale agreement and settlement occured 3 April 2013. During the year the Polytechnic has identified nine prefabricated buildings ($9,000) which are surplus to requirements and are intended to be sold.

15. Creditors and Other Payables

Group Actual 2012 $’000

Polytechnic Actual 2011 $’000

Actual 2012 $’000

Actual 2011 $’000

Trade payables

361

556

361

556

GST

502

1,084

502

1,086

Accruals Total creditors and other payables

6,640

1,667

2,545

1,585

7,503

3,307

3,408

3,227

Creditors and other payables are non-interest bearing and are normally settled on 30-day terms, therefore the carrying value of creditors and other payables approximates their fair value.

16. Special Accounts Special accounts represents funds held by the Polytechnic on behalf of others and funds provided to the Polytechnic by various organisations for specific projects. Group

Polytechnic

Actual 2012 $’000

Actual 2011 $’000

Actual 2012 $’000

Actual 2011 $’000

Whitireia International Homestay Trust

Activities account

Other accounts

Total special accounts

17. Revenue Received in Advance

Group

Polytechnic

Actual 2012 $’000

Actual 2011 $’000

Actual 2012 $’000

Actual 2011 $’000

Student fees received in advance

8,807

12,110

8,430

12,110

Sundry revenue in advance

1,694

10,501

12,128

8,430

12,128

Total revenue received in advance

18. Employee Entitlements Group

Polytechnic

Actual 2012 $’000

Actual 2011 $’000

Actual 2012 $’000

Actual 2011 $’000

Accrued pay

458

361

458

358

Annual leave

Current portion 2,540

2,495

2,540

2,461

Sick leave

132

Long service leave

Retirement gratuities

Total current portion

3,160

2,988

3,160

2,951

Long service leave

120

131

120

131

Retirement gratuities

112

139

112

139

Non-current portion

Total non-current portion Total employee entitlements

232

270

232

270

3,392

3,258

3,392

3,221

Employees are entitled to annual leave pay, long service leave pay and retirement gratuities. Annual 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. Entitlements related to long service leave and retirement gratuities have been calculated at present value of future cash flows. The provision is affected by number of assumptions including expected length of service, attrition rate, and salary increase.

19. Provisions

Group Actual 2012 $’000

Polytechnic Actual 2011 $’000

Actual 2012 $’000

Actual 2011 $’000

Current portion Lease inducements

225

233

225

233

225

233

225

233

Non-current portion Lease make-good Lease inducements Total provisions

104

2,451

2,624

2,451

2,624

2,555

2,721

2,555

2,721

2,780

2,954

2,780

2,954

ANNUAL REPORT 2012

2012

2011

Lease make-good $’000

Lease inducement $’000

Total $’000

Lease make-good $’000

Lease inducement $’000

Total $’000

2,857

2,954

Polytechnic and group Balance at 1 January Additional provisions made

2,857

2,876

Provisions realised

(181)

104

2,676

2,780

2,857

2,954

Balance at 31 December Lease make-good

In respect of its leased property, the Polytechnic and group is required at the expiry of the lease term to make good any damage caused to the premises from installed fixtures and fittings and to remove any fixtures and fittings installed by the Polytechnic and group. In many cases, the Polytechnic and group has the option to renew these leases, which impacts on the expected outflows to make good these premises. Information about the Polytechnic and group lease arrangements is disclosed in note 24. Lease inducements In respect of leased property, the Polytechnic and group entered into a number of agreements to lease properties where an initial inducement was made by the lessor. These inducements included rent free holidays, contributions to fitout and cash incentives. These amounts have been recognised as a provision in the financial statements to be amortised over the lease term (refer note 24).

20. Equity

Group

Polytechnic

Actual 2012 $’000

Actual 2011 $’000

Actual 2012 $’000

Actual 2011 $’000

45,625

42,919

45,868

43,363

2,580

(288)

2,505

126

45,643

45,625

45,580

45,868

17,876

20,891

17,876

20,891

General funds Balance at 1 January Surplus / (deficit) for the year Transfers from restricted reserves Balance at 31 December Property revaluation reserves Balance at 1 January Land net revaluation loss Buildings net revaluation (loss) / gain Infrastructure net revaluation loss Balance at 31 December

(1,690)

(415)

(1,274)

(415)

(1,274)

(51)

17,461

17,876

17,461

17,876

Restricted reserves Balance at 1 January Appropriation of net surplus

Application of trusts and bequests

(2)

Balance at 31 December Property revaluation reserves Property revaluation reserves consist of:

Group Actual 2012 $’000

Actual 2011 $’000

Actual 2012 $’000

Actual 2011 $’000

14,001

Buildings

1,638

2,053

1,638

2,053

Improvements

1,822

17,461

17,876

17,461

17,876

Land

Total property revaluation reserves

Polytechnic

ANNUAL REPORT 2012

21. Taxation Group

Polytechnic

Actual 2012 $’000

Actual 2011 $’000

Actual 2012 $’000

Actual 2011 $’000

Current tax expense

Adjustment to current tax in prior years

2,580

(288)

2,505

722

(81)

701

Component of tax expense

Relationship between tax and accounting profit Net surplus (deficit) before tax Tax at 28% Plus / (less) tax effect of: Non-deductable expenditure

(701)

Timing adjustments

(10)

Tax losses recognised

(13)

Revenue exempt from tax

Tax expense

The group has an unrecognised deferred tax asset of Nil (2011:$9,790) in relation to deductible temporary differences. The group tax losses of $108,955 (2011: $132,257) are available to be carried forward and offset against future taxable income.

22. Financial Risk Management Objectives and Policies The group’s principal financial instruments comprise bank deposits, cash and short-term deposits. The group has various other financial instruments such as trade debtors and trade creditors, which arise directly from its operations. 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. With respect to the 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. Interest rate risk The tables below illustrate the potential effect on the surplus or deficit and equity (excluding general funds) for reasonably possible market movements, with all other variables held constant, based on financial instrument exposures at balance date. 2012

2011

$’000

-50 bps

+150bps

-50 bps

+150bps

surplus & other equity

Group Financial assets (3)

(32)

Financial assets in the nature of investments

Cash and cash equivalents

(12)

(37)

110

Total sensitivity

(15)

(69)

207

Polytechnic Financial assets (2)

(32)

Financial assets in the nature of investments

Cash and cash equivalents

(10)

(35)

105

Total sensitivity

(12)

(67)

200

The interest rate sensitivity is based on a reasonable possible movement in interest rates, with all other variables held constant, measured as basis points (bps) movement. For example a decrease in 50 bps is equivalent to a decrease in interest rates of 0.5%.

ANNUAL REPORT 2012

Credit quality of financial assets The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to Standard and Poor’s credit ratings (if available) or to historical information about counterparty default rates: Group

Polytechnic

Actual 2012 $’000

Actual 2011 $’000

Actual 2012 $’000

Actual 2011 $’000

2,920

13,773

2,493

13,312

2,920

13,773

2,493

13,312

Counterparties with credit ratings Cash at bank and term deposits AA Total cash at bank and term deposits Debtors and other receivables Existing counterparty without defaults in the past Total debtors and other receivables

8,428

6,729

3,592

6,726

8,428

6,729

3,592

6,726

Liquidity risk Liquidity risk is the risk that the Polytechnic and group will encounter difficulty raising liquid funds to meet commitments as they fall due. Prudent liquidity risk management implies maintaining sufficient cash, the availability of funding through an adequate amount of committed credit facilities and the ability to close out market positions. The Polytechnic and group aims to maintain flexibility in funding by arranging committed credit lines when required. In December 2012 the Polytechnic and group received Secretary of Education approval for a credit line for up to $4m that is expected to be put in place during 2013. In meeting its liquidity requirements, the Polytechnic and group maintains a target level of investments that must mature within specified timeframes. Categories of financial assets and liabilities Group

Polytechnic

Actual 2012 $’000

Actual 2011 $’000

Actual 2012 $’000

Actual 2011 $’000

572

6,434

493

6,312

Student fees and other receivables (note 7)

8,428

6,729

3,592

6,726

Financial assets in the nature of investments (note 9)

2,358

7,349

3,356

8,356

11,358

20,512

7,441

21,394

7,503

3,307

3,408

3,227

Loans and receivables Cash and cash equivalents (note 6)

Total loans and receivables Financial liabilities measured at amortised cost Trade and other payables (note 15) Loans from related parties (note 25) Total financial liabilities measured at amortised cost

1,340

7,503

3,307

4,748

3,259

Trade and other payables (note 15) are all due and payable within six months of the balance date. There are no financial instruments held at fair value. 81

23. Capital Management The Polytechnic and group’s capital is its equity, which comprises accumulated funds and other reserves. Equity is represented by net assets. The Polytechnic and group are subject to the financial management and accountability provisions of the Education Act 1989, which includes restrictions in relation to: disposing of assets or interests in assets, ability to mortgage or otherwise charge assets or interests in assets, granting leases of land or buildings or parts of buildings, and borrowing. The Polytechnic and group manages its equity as a by-product of prudently managing revenues, expenses, assets, liabilities, investments, and general financial dealings to ensure the Polytechnic and group effectively achieves its objectives and purpose, whilst remaining a going concern.

24. Commitments and Contingencies Operating lease commitments – Polytechnic and group as lessee The Polytechnic and group has entered into commercial leases on buildings where it is not in the best interest of the Polytechnic and group to purchase these assets. These leases have an average life of between one and eleven years with renewal terms included in the contracts. Renewal terms are included in the commitments where management considers it probable that these will be exercised. There are no restrictions placed upon the leasee by entering into these leases. Future minimum rentals payable under non-cancellable operating leases as at 31 December are as follows: Group

Due within one year Due after one year and less than five years Due after five years

Polytechnic

Actual 2012 $’000

Actual 2011 $’000

Actual 2012 $’000

Actual 2011 $’000

3,553 11,732

3,018

3,553

3,018

9,668

11,732

9,668

11,267

13,147

11,267

13,147

26,552

25,833

26,552

25,833

ANNUAL REPORT 2012

Capital commitments At 31 December the Polytechnic had the following commitments: Polytechnic

Porirua campus redevelopment Kāpiti campus redevelopment

Actual 2012 $’000

Actual 2011 $’000

5,752

16,417

1,148

5,752

17,565

Legal claims There are no outstanding legal claims (2011: Nil). Other contingent liabilities The Polytechnic and group has no contingent liabilities (2011: Nil). Contingent assets The Polytechnic and group has no contingent assets (2011: Nil).

25. Related Party Disclosure Terms and conditions of transactions with related parties Providing of ancillary services to and purchases from related parties is made in arm’s length transactions at both normal market prices and normal commercial terms. Outstanding balances at 31 December 2012 and 2011 are unsecured and settlement occurs in cash. Polytechnic Actual 2012 $’000

Actual 2011 $’000

174

Whitireia Performing Arts Company Limited Services provided by the Polytechnic Whitireia New Zealand Limited Services provided by the Polytechnic

1,860

720

Unsecured loans payable to the Polytechnic

186

Unsecured loans payable by the Polytechnic

Services provided by the Polytechnic

3,859

Unsecured loans payable by the Polytechnic

1,526

Computer Power Plus Joint Venture

Transactions between the Polytechnic and its subsidiary include loans and advances to subsidiary. These loans and advances are unsecured, interest free with no fixed terms of repayment. For the year ended 31 December 2012, the group has not raised any provisions for doubtful debts relating to amounts owed by related parties as the payment history has been excellent (2011: $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. As disclosed in note 9, the Polytechnic’s subsidiary acquired the delivery of The New Zealand Film and Television School (NZFTS) on 1 July 2012. The Polytechnic purchased the assets of NZFTS and delivers the training under a contract with WNZL. As disclosed in note 9, the Polytechnic’s subsidiary acquired the delivery of Computer Power (NZ) Limited on 1 May 2012. The delivery has been contracted to Computer Power Plus, an unincorporated joint venture owned by the Polytechnic (50%) and WelTec (50%), which was legally formed in December 2012. Crown / Government The government influences the roles of the Polytechnic as well as significant source of revenue, as disclosed in note 2. In conducting its activities, the Polytechnic is required to pay various taxes and levies (such as GST, FBT, PAYE, and ACC levies) to the Crown and entities related to the Crown. The payment of these taxes and levies is based on the standard terms and conditions that apply to all tax and levy payers. The Polytechnic is exempt from paying income tax and FBT. The Polytechnic purchases goods and services from entities related to the Crown and it also provides services to entities related to the Crown. The purchase and provision of goods and services to government-related entities for the year ended 31 December 2012 are immaterial compared to the Polytechnic's total revenue and expenditure and have all been conducted on an arms’ length basis. These purchases included the purchase of electricity from Meridian, air travel from Air New Zealand, and procurement services from the Ministry of Economic Development. Related party transactions During the year the Polytechnic purchased services from CityLink, an IT firm, in which Council Chair Hon Roger Sowry ONZM is a Director. These services cost $84,205 (2011: $94,704) and were supplied on normal commercial terms. There was an outstanding invoice for $5,970 at year end (2011: $4,577). During the year the Polytechnic purchased services from various organisations that are related to members of Council. These services cost $35,283 (2011: $109,951) and were supplied on normal commercial terms. The amounts paid to individual organisations are immaterial to the Polytechnic's total revenue and expenditure. Key management personnel compensation Group

Salaries and other short-term employment benefits Post employment benefits Total key management personnel compensation

Polytechnic

Actual 2012 $’000

Actual 2011 $’000

Actual 2012 $’000

Actual 2011 $’000

741

808

741

808

785

845

785

845

Key management personnel includes the Chair, Councillors, Chief Executive and four Executive personnel.

ANNUAL REPORT 2012

26. Councillors Fees

Crown Entities Act 2004 Actual 2012 $

Actual 2011 $

Arthur T

14,400

Fortuin G

14,400

Sowry R (Chair) Sharman D R

Snively S

28,800

31,761

14,400

Wilkinson R K

14,400

Barker A

18,000

Sanga K

14,400

24,000

Steel P

Preston P

McIntosh-Ward N

Renner V

104,400

145,761

From 1 January 2012 the Councils of Whitireia and WelTec combined. *Fees paid by WelTec

27. Employee Remuneration Group

Polytechnic

Actual 2012 $’000

Actual 2011 $’000

Actual 2012 $’000

Actual 2011 $’000

100,000 - 109,999

110,000 - 119,999

120,000 - 129,999

130,000 - 139,999

140,000 - 149,999

160,000 - 169,999

170,000 - 179,999

210,000 - 219,999

270,000 - 279,999

28. Events After Balance Date Except as already disclosed, there were no other events that have occurred between 31 December 2012 and the date of this report. (2011: None)

29. Childcare Centre Polytechnic Actual 2012 $’000

Actual 2011 $’000

253 47 56

300 39 62

356

401

339 33 372

322 35 357

(16)

Income Operating grants - Ministry of Education (MOE) Fees - staff, students, public Family assistance - Work and Income New Zealand (WINZ)

Expenses Personnel Other

Net Surplus

Note 1

Statistics MOE hours funded

under 2's

8,523

9,415

MOE hours funded

over 2's

10,158

6,571

10,545

11,834

3,714

4,593

MOE 20 hours ECE MOE plus 10 hours ECE

Comments The Childcare Centre is run as a separate trading entity within the Polytechnic. It operates under one licence (full/all day – Ministry of Education) to provide childcare for up to 30 children primarily for staff and students at the Polytechnic.

Note 1 The accounts presented above are required to be presented separately for Ministry of Education purposes to support the funding provided. There is no reflection of the portion of occupancy costs or depreciation on buildings and equipment used by the Childcare Centre, which are included in the main accounts of the Polytechnic.

ANNUAL REPORT 2012

30. Student Services Levy Polytechnic Domestic students 2012 $â&#x20AC;&#x2122;000

Levy collected from domestic students

226,074

Expenses Health Counselling Hardship Total cost

108,208 63,367 59,982 231,557

During 2012 a new requirement was determined that the level of student services levy charged and the services that it is used to provide be disclosed in the annual financial statements. This is the first year that this information is available and therefore no comparative has been disclosed.

31. Explanations of Major Variances Against Budget Statement of Financial Performance During 2012 WNZL acquired the delivery of two private training establishments (refer notes 9 and 25). These acquisitions resulted in significant increases in revenue and expenditure. There was significant additional revenue and expenditure from additional delivery for aviation and priority trades training, which were confirmed by TEC after the budget was approved by Council. Total revenue for the group was $62.8m against a budget of $58.4m, $4.4m ahead of budget and $4.3m higher than 2011. The increase in revenue was partially offset by a significant reduction in international income due to external events, including a change in immigration policies. Whitireia is pursuing a strategy of diversifying international income through study tours and partnership arrangements to mitigate the impacts of these external events. The overall result was an operating surplus for the group of $1.2m against a budget of $2.4m. Personnel costs were over budget by $1.6m largely due to the additional delivery costs noted above and as a result of projects budgeted as project expenditure. Statement of Financial Position 2012 saw the first stage of the redevelopment of the main Porirua campus at an expected cost of $17m funded from reserves. The variances in the balance sheet are due to timing of the campus redevelopment, the deferred sale of Lindale to 2013 and the PTE acquisitions.

Statement of Responsibility The Council and management are responsible for the preparation of Whitireia Community Polytechnic and groupâ&#x20AC;&#x2122;s Financial Statements and Statement of Service Performance and for the judgements made in them. The Council and management of Whitireia Community Polytechnic have the responsibility for establishing and maintaining a system of internal control designed to provide reasonable assurance as to the integrity and reliability of financial reporting. In the Council and managementâ&#x20AC;&#x2122;s opinion, these financial statements and statement of service performance fairly reflect the financial position and operations of Whitireia Community Polytechnic and group for the year ended 31 December 2012. Signed by

Chair of Council 17 April 2013

Chief Executive 17 April 2013

ANNUAL REPORT 2012

Independent Auditor’s Report To the readers of Whitireia Community Polytechnic and group’s financial statements and non-financial performance information for the year ended 31 December 2012 The Auditor-General is the auditor of Whitireia Community Polytechnic (the Polytechnic) and group. The Auditor-General has appointed me, David Morrow, using the staff and resources of Ernst & Young, to carry out the audit of the financial statements and non-financial performance information of the Polytechnic and group on her behalf. We have audited: • the financial statements of the Polytechnic and group on pages 46 to 87, that comprise the balance sheet as at 31 December 2012, the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year ended on that date and the notes to the financial statements that include accounting policies and other explanatory information; and • the non-financial performance information of the Polytechnic and group in the statement of service performance on pages 26 to 41. Opinion In our opinion: • the financial statements of the Polytechnic and group on pages 46 to 87: • comply with generally accepted accounting practice in New Zealand; and • fairly reflect the Polytechnic and group’s: • financial position as at 31 December 2012; and • financial performance and cash flows for the year ended on that date; • the non-financial performance information of the Polytechnic and group on pages 26 to 41 fairly reflects the Polytechnic and group’s service performance achievements measured against the performance targets adopted in the investment plan for the year ended 31 December 2012. Our audit was completed on 17 April 2013. This is the date at which our opinion is expressed. The basis of our opinion is explained below. In addition, we outline the responsibilities of the Council and our responsibilities, and we explain our independence. Basis of opinion We carried out our audit in accordance with the Auditor-General’s Auditing Standards, which incorporate the International Standards on Auditing (New Zealand). Those standards require that we comply with ethical requirements and plan and carry out our audit to obtain reasonable assurance about whether the financial statements and non-financial performance information are free from material misstatement. Material misstatements are differences or omissions of amounts and disclosures that, in our judgement, are likely to influence readers’ overall understanding of the financial statements and non-financial performance information. If we had found material misstatements that were not corrected, we would have referred to them in our opinion.

An audit involves carrying out procedures to obtain audit evidence about the amounts and disclosures in the financial statements and non-financial performance information. The procedures selected depend on our judgement, including our assessment of risks of material misstatement of the financial statements and non-financial performance information, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Polytechnic and group’s preparation of the financial statements and non-financial performance information that fairly reflect the matters to which they relate. We consider internal control in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the Polytechnic and group’s internal control. An audit also involves evaluating: • the appropriateness of accounting policies used and whether they have been consistently applied; • the reasonableness of the significant accounting estimates and judgements made by the Council; • the adequacy of all disclosures in the financial statements and non-financial performance information; and • the overall presentation of the financial statements and non-financial performance information. We did not examine every transaction, nor do we guarantee complete accuracy of the financial statements and non-financial performance information. Also we did not evaluate the security and controls over the electronic publication of the financial statements and non-financial performance information. We have obtained all the information and explanations we have required and we believe we have obtained sufficient and appropriate audit evidence to provide a basis for our audit opinion. Responsibilities of the Council The Council is responsible for preparing financial statements that: • comply with generally accepted accounting practice in New Zealand; and • fairly reflect the Polytechnic and group’s financial position, financial performance and cash flows. The Council is also responsible for preparing non-financial performance information that fairly reflects the Polytechnic and group’s service performance achievements measured against the performance targets adopted in the investment plan. The Council is responsible for such internal control as it determines is necessary to enable the preparation of financial statements and non-financial performance information that are free from material misstatement, whether due to fraud or error. The Council is also responsible for the publication of the financial statements and non-financial performance information, whether in printed or electronic form. The Council’s responsibilities arise from the Education Act 1989 and the Crown Entities Act 2004. Responsibilities of the Auditor We are responsible for expressing an independent opinion on the financial statements and non-financial performance information and reporting that opinion to you based on our audit. Our 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 External Reporting Board. Other than the audit, we have no relationship with or interests in the Polytechnic or any of its subsidiaries.

David Morrow Ernst & Young On behalf of the Auditor-General Wellington, New Zealand 90

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