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2012ANNUAL REPORTLACHLAN CLELLAND - 2012 GRADUATEWINNER OF THE RAY MEYER MEDAL2012 ANNUAL REPORT | 1

Te Whare Wananga o te AwakairangiDuring 2012 our Maori presence was heightened with a space developed as the first port of call for Maoristudents in the heart of the Student Hub. This area supplements the whare for the Tamaiti Whangai teamwhich is located on Kensington Avenue. The feathers of Te Atiawa representing Te Raukura (the Father,the Son and the Holy Spirit), are inscribed into the glass wall of this new area. Above the space is acarved Pare (pictured). The Pare was traditionally used on a store or food house. This embodies WelTec,Te Whare Wananga o te Awakairangi, as being the store house of knowledge. The Pare is carved usingthe Taranaki style which acknowledges the iwi of the Region, Te Atiawa.During the 1980s Hutt Valley Polytechnic (WelTec’s predecessor) allowed tutor Jock MacEwan to bringprisoners from Rimutaka Prison to the Petone campus each week to learn carving. The Pare was the lastpiece carved and was gifted to Hutt Valley Polytechnic. The carvers were Aaron Forbes and Tom Sidney.Vision/MatakiteOur vision is to provide the best learning environment for students who willbe“new professionals” and graduate with world-class skills and knowledgeas a result of our close partnership with industry.Values/TaongaIn order to deliver our promise that learning for the 21st century is acollaborative venture:1 We aspire to providing the Best Learning Environment2 We believe Learning Happens Together3 Our Values are Empathy, Challenge, Growth2 | WELLINGTON INSTITUTE OF TECHNOLOGY

Mission/KaupapaWellington Institute of Technology’s mission isto work in partnership with iwi, communities,industries, professions and other educationorganisations to add value through:Knowledgeable, highly skilled and work-ready graduates who:• are well informed and able to access, use andadapt knowledge;• combine high level technical ability with creative/entrepreneurial thinking;• are able to learn throughout life; and• enhance workplace productivity and communitydevelopment.The relevance of their and our contribution to the regionaland national economy is assured through our closepartnership with industry and commitment to research andtechnology transfer activities that:• address directly the needs of industry andprofessions (as voiced by enterprises large andsmall);• support seamless approaches that build criticalmass and depth of expertise regionally, nationallyand internationally; and• build a community and enterprise cultureembodying productivity and sustainability.2012 SummaryCouncil Members 2012Executive Management TeamIndustry Advisory CommitteesChairperson’s ReportStudents FirstChief Executive’s ReportRebuilding ChristchurchPasifika TradesEducational PerformanceResearchA Supportive Learning EnvironmentWelTec Connect in 2012Our PeopleOur EnvironmentStatement of Objectives andService PerformanceBusiness Plan PerformanceFinancial StatementsResponsibilitiesIndependent Auditor’s ReportAcronyms0508101317212327283135414345464952578283852012 ANNUAL REPORT | 3

Award winning solutiongoes into productionAward-winning Bachelor of Engineering Technology graduate, LachlanClelland on why he chose to do his degree at WelTec: “I was impressedby the approach. Staff have a lot of time for students, putting a lot ofeffort into helping you succeed with your study. Most important for mewas the applied approach to learning. We got to work on real-worldexamples in industrial situations.” It is one of these real-world projectsthat led to Lachlan’s Institution of Engineering and Technology (IET)prize for top Bachelor of Engineering Technology student.Lachlan went on to win the prestigious Institution of ProfessionalEngineers Ray Meyer medal for Excellence in Student Design. TheRay Meyer Medal is sponsored by GHD and awarded by IPENZ to thestudent or group of students presenting the best final-year project.This was an outstanding achievement and the first time an ITP has wonsuch an award.Lachlan’s final year project involved designing and building anautomated cable production machine. He was briefed on pioneeringsuperconductor research as part of a two-year internship at CrownResearch Institute Industrial Research Limited (IRL), now CallaghanInnovation. Lachlan worked on his project to design and build amachine to make commercial production of the woven superconductormore efficient.“I was able to apply what I was learning at WelTec into a practicalindustry application. When I built the prototype it worked on the first try.”General Cable Superconductors, which has put the machine intoproduction, also awarded Lachlan a prize recognising his achievement.4 | WELLINGTON INSTITUTE OF TECHNOLOGY

2012 SummaryADDING VALUE9489 STUDENTS4401 EFTSof total EFTS studied atLevels 4 – 7EDUCATION PERFORMANCEINDICATORS (SAC EFTS)*81%CourseCompletionsStudents aged under 25 studiedof all the Level 4-7 EFTSdelivered in 201272%QualificationCompletionsFINANCIAL PERFORMANCEThe Tertiary Education Commission (TEC) has again awardedWelTec a low risk rating for its financial performance.38%2.9%ParentOperatingReturnStrong cashflowmanagement with aliquid funds ratio of25%, 8% higherthan budgetProgression to HigherLevel Study$1,483,000Budgeted ParentOperating SurplusSATISFACTION$1,587,000Actual ParentOperating Surplus66%Retained inStudy94%Student Satisfaction93%Employer Satisfaction* Provisional as advised by TEC March 20132012 ANNUAL REPORT | 5

WelTec’s first Bachelor ofEngineering TechnologyGraduatesThe first ever graduates in engineering technology graduatedin 2012. One of these was Ruth Tautari of Ngapuhi affiliation, alieutenant in the New Zealand Army. While studying she was basedat Trentham where she provided support to the workshop thatmaintains Army vehicles.Ruth majored in mechanical engineering so she could providemore technical support in her Army role.Ms Tautari demonstrated all-round excellence, studying hard andsimultaneously maintaining high physical fitness training for herarmy position. She spent term breaks working at Trentham and wasalso needed at other times during study terms.For her third year engineering project Ms Tautari designed a“Suspend Towing Apparatus” for a Pinzgauer – a six wheeledmedium all-terrain military vehicle. Weighing between 5 and 7½tonne the vehicle is designed to carry personnel and equipment.6 | WELLINGTON INSTITUTE OF TECHNOLOGY

2012 SummaryFUNDINGEFTS BY SOURCEFUNDINGEFTS BY REGIONFUNDINGEFTS BY ETHNICITYSAC69%ITO10%INTERNATIONAL 8%STAR6%YOUTH GUARANTEE 3%TRADES ACADEMY 2%FULL FEE1%ACE1%LOWER HUTT 34%WELLINGTON 28%CENTRAL NTH ISLAND 10%UPPER HUTT9%PORIRUA5%UPPER NTH ISLAND 5%SOUTH ISLAND 4%WAIRARAPA3%KAPITI COAST 2%NZ EUROPEAN/PAKEHAMAORIASIANPASIFIKAOTHEREUROPEAN55%16%11%10%5%3%GENDERAGEHIGHEST ENTRYQUALIFICATIONMALEFEMALE64%36%UNDER 2121 – 2425 – 3435+45%22%17%16%NCEA L2 (6TH FORM CERTIFICATE)NO RECORDNCEA L1 (SCHOOL CERTIFICATE)OVERSEAS QUALIFICATION14 OR MORE CREDITS AT ANY LEVELNCEA L3 (BURSARY OR SCHOLARSHIP)UNIVERSITY ENTRANCEOTHER26%23%16%10%7%7%6%5%WELLINGTON TRADES ACADEMYSCHOOL OF CREATIVE INDUSTRIESSCHOOL OF FOUNDATION STUDIES AND ANIMAL CARESCHOOL OF HAIR, BEAUTY AND EXERCISE SCIENCESCHOOL OF INFORMATION TECHNOLOGYSCHOOL OF CONSTRUCTIONSCHOOL OF HOSPITALITYSCHOOL OF HEALTH AND SOCIAL SERVICESSCHOOL OF BUSINESS AND ADMINISTRATIONSCHOOL OF ENGINEERING91199230312TOTAL EFTS BY SCHOOL4404614944995781,0972012 ANNUAL REPORT | 7

Council Members 2012Roger SowryONZMCHAIRPERSONRoger Sowry was a Memberof Parliament from 1990 to2005, firstly representingthe Kapiti electorate, thenas a National list MP. Rogerretired from Parliament in2005 moving to becomeChief Executive of ArthritisNew Zealand until the end of2007. He is a member of theElectricity Authority.Roger is also a member of theInstitute of Directors.Dr Alan BarkerDEPUTYCHAIRPERSONBack (L to R) - Dennis Sharman, Ron Wilkison, Aka Arthur, Peter Steel, Dr Kabini Sanga, Gregory Fortuin, Peter PrestonFront (L to R) - Vaughan Renner, Nancy McIntosh-Ward, Dr. Linda Sissons, Dr Alan Barker, Roger Sowry, Don Campbell,Suzanne SnivelyDr Alan Barker is a SeniorConsultant with Martin Jenkins.He has extensive internationaland domestic experience inpublic sector reform, strategicplanning, organisation reviewand financial management.Alan has worked for a numberof education related institutionssuch as the Tertiary EducationCommission, Ministry ofEducation, New ZealandQualifications Authority, andTairawhiti Polytechnic, as well asa number of other public sectorentities.Industry Advisory Committee ChairsAlcohol and Drug – Tim HardingAutomotive Technology – Ross WallaceBuilt Environment – Peter DegerholmBusiness – Brian CowperCounselling and Trauma Studies – David WatersCreative Technologies – Jaimee WardaEngineering Diplomas and Degree AdvisoryCommittee – Michael KerrExercise Science – Mike RyanFuneral Services – Prof. Mike Markfell-JonesHealth, Disability and Aged Care Support and CVLSAdvisory Committee – Maurice PriestleyHospitality – Ruth PrettyInformation Technology – Peter RamseyPasifika – Linda SissonsPlumbing – John LeenWellington Trades Acdemy – Ross SinclairYouth Development – John HarringtonCombined Academic BoardDr Peter Coolbear – ChairpersonAlan Cadwallader – Academic Director, WelTecDon Campbell – Chief Executive, WhitireiaSusan Cauchi – Deputy Chief Executive, WhitireiaMahia D Fuimaono – Whitireia Student RepresentativeHelen Gardiner – Dean Service Industries, WhitireiaJulia Hennessy – Executive Dean, Health, Business andService Industries, WelTecWillis Katene – Dean Te Manawa, WhitireiaDylan Mama – WelTec Student RepresentativeGerry McCullough – Dean Business Faculty, WhitireiaAlan Peck – Executive Dean, Trades & Technology, WelTecHinemoa Priest – Kaiwhakahaere Maori, WelTecLinda Sissons – Chief Executive, WelTec8 | WELLINGTON INSTITUTE OF TECHNOLOGY

Aka ArthurAka Arthur, of Ngati Toa, hasbeen a resident of Porirua forover 60 years.He is a kaumatua for the RoyalNew Zealand Police College(since 2000), a member ofthe Conservation Board andof the Aratahi (the MaoriRegional RepresentativeGroup of the WellingtonRegional Council) and onthe Kaiwhaka Manua for theDepartment of Courts.Dennis SharmanDennis owns and operatesSharman Consulting Limiteda consultancy companythat delivers comprehensivetechnology services tosmall and medium sizedbusinesses. Dennis has justcompleted his term as Chairof the board of New ZealandInstitute of Technologies.Dennis holds a number ofDirectorships, includinggovernment appointmentsto the Combined Council ofWhitireia and WelTec and isalso a founding member ofthe Board of Mana Tiaki.Dr Kabini SangaKabini Sanga is an AssociateProfessor of Education inthe Faculty of Educationat Victoria University ofWellington. He holdsa Doctor of Philosophyfrom the University ofSasketchewan,Canada.He did his early universityeducation at the Universityof South Pacific, Fiji. He hasheld a number of senior rolesin education, including beingthe Director of the Institute ofEducation of the University ofthe South Pacific; the Directorand Chief Executive Officer ofthe Solomon Islands Collegeof Education, and the ChiefEducation Officer, SolomonIslands Ministry of Education.Peter SteelPeter has an economic andengineering backgroundhaving worked for over25 years as a ConsultingEngineer, becoming aPrincipal and TechnicalDirector for Beca.He has strong commercial,governance and managementexperience from his workactivities as well as aperiod as President ofthe Wellington RegionalChamber of Commerce. Heis currently General Manager- Engineering & Standardsfor the Infrastructure andEngineering division ofKiwiRail.Gregory FortuinGregory Fortuin (Porirua)is a company director andFamilies Commissioner. Heis a former Race RelationsConciliator and previouslyserved as a director of NewZealand Post, Kiwibank, ACC(Investment Committee Chair),Catalyst Injury Management(Chair)and Industry NewZealand. Gregory came toNew Zealand in 1991 asthe Managing Director ofNational Mutual CorporateSuper Services Limited, wasalso a Crown-Trustee and themeeting chair of the CrownForest Rental Trust.He was the FoundingChairman of the Youth SuicideAwareness Trust and servedon the Boards of PrisonFellowship New Zealandand Youth for Christ. He ispresently the Chair of StreetsAhead 237 in Porirua.NancyMcIntosh-WardNancy holds an MBA andis a Chartered Accountantand has extensive financial,management, commercial,governance, tertiary educationand marketing experience.Nancy is a member of theInstitute of Directors.Ron WilkinsonRon Wilkinson (Kapiti) isthe director of ManagementAnswers, consultants in mediaand marketing. He has abackground in radio and hasbeen active in business andcommunity activities in Kapitifor almost 20 years. In 2008he was presented with a CivicAward by the Kapiti CoastDistrict Council.In addition, he was awardeda 1990 Medal for servicesto broadcasting by theQueen, in recognition of hisprevious work with Radio NewZealand. He is a former NewZealand radio broadcasterof the year. A former boardmember, fellow and graduateof the New Zealand Collegeof Management, he hasdesigned and led workshopson many topics includingmanagement and media andworked extensively in Vietnam,Malaysia, the United States ofAmerica, Australia and variouscountries in the South Pacific.Peter PrestonPeter Preston has an earlybackground in civil engineering(BE) followed by a strongcommercial backgroundincluding senior managementroles in BP New Zealand Limitedand directorships in relatedcompanies. Heis a professionalcompany director anda Fellowof the Institute of Directorsandthe Institution of ProfessionalEngineers New Zealand.Suzanne SnivelyONZMSuzanne, formerly a partnerat PricewaterhouseCoopersin Wellington, is the ManagingDirector of strategic andeconomic advice company,MoreMedia Enterprises.Suzanne is appointed to theHealth Research Council bythe Minister of Health TonyRyall and Chairs the AgriwomenDevelopment Trust andTransparency International.She is Chief Judge of theElectra Business Awards.Previous directorships includedthe Reserve Bank of NewZealand. She is a member ofthe Institute of Directors andthe New Zealand Associationof Economists. Suzanne wasawarded the Fulbright andReserve Bank scholarships andwas honoured by the Queenalong with 100 women with aWomen’s Suffrage medal.Vaughan RennerVaughan has an MBA, andscience and engineeringqualifications. He runs his ownbusinesses and has strongcommercial, strategic planningand IT skills.Vaughan has a backgroundin governance (currentlyincluding; The EmployersChamber of Commerce Central,Business NZ, and StandardsNew Zealand). He is a memberof the Institute of Directors.Chief Executive’s PerformanceAppraisal CommitteeAlan Barker – ChairGregory FortuinPeter PrestonRoger SowryRisk and AuditCommitteeVaughan Renner – ChairNancy McIntosh-WardDennis SharmanRon WilkinsonWelTec Connect LtdPeter Steel – Chair (Until February 2012)Dennis Sharman – Chair (From February 2012)Nancy McIntosh-WardSuzanne SnivelyLe Cordon BleuNew Zealand Institute(Directors)Linda Sissons– WelTec Chief ExecutiveAndre Cointreau– President and CEO ofLe Cordon Bleu InternationalPaul McElroy– UCOL Chief ExecutiveCampus DevelopmentCommitteePeter Steel – ChairGregory FortuinVaughan RennerKabini Sanga2012 ANNUAL REPORT | 9

Executive Management TeamLinda Sissons, CNZMCHIEF EXECUTIVETim AllenGENERAL MANAGER,BUSINESS DEVELOPMENTMark BroadbentHUMAN RESOURCESDIRECTORAlan CadwalladerACADEMIC DIRECTORPh. D. (London)BA (Victoria University)BA (Victoria University)MMgt (Massey University)Diploma in Adult Education(Edinburgh)MA (1st class Honours)Advanced ManagementProgramme (Harvard)Linda has been responsiblefor the strategic managementand leadership of WelTec since1999. Prior to joining WelTec sheheld university and Institute oftechnology management rolesin New Zealand and the UnitedKingdom.She represents the New ZealandGovernment on the Board ofGovernors of the Commonwealthof Learning, is on the Board ofWorldSkills NZ, and is a Director ofESITO (Electricity Supply IndustryTraining Organisation). She hasbeen a member of a numberof Government commissions,including the Tertiary EducationAdvisory Commission.Linda holds a PhD from LondonUniversity, is a graduate ofthe Harvard Business SchoolAdvanced ManagementProgramme and is a member ofthe Institute of Directors..Graduate Diploma inMarketing (VictoriaUniversity)Tim leads the developmentof new opportunities and thepromotion of WelTec to meetits objectives. His areas ofresponsibility are marketing,international and WelTecConnect.During 2012 he led thegrowth of WelTec Connectparticularly the furtherdevelopment of commercialtechnologies and products.Tim has also led the growthof WelTec’s internationalstudent numbers and thecreation of more studentwork placements.Tim has extensivecommercial, marketing andinternational experience,gained through seniorroles in a diverse rangeof industries includingeducation, shipping, sportsand horticulture.Diploma of Education(Guidance)Diploma (Youthand Development),(Commonwealth YouthProgramme, Asia-Pacific)Centre Ernst & YoungExecutive programmeMark is responsible forWelTec’s human resourcesstrategy and changemanagement as well ashuman resources operationsand capability development.With more than 25 years’experience in humanresources, line management,and development rolesMark’s has worked in awide range of organisationscovering the not-for-profitsector, government, stateownedenterprises, andeducation.Mark is a member of theHuman Resources Instituteof New Zealand.MBA (Otago University)As Academic DirectorAlan is responsible foracademic leadership atWelTec. His role is leadingand managing academicpolicy development,including learning access,student support servicesand resources to ensurehigh-quality student learningexperience outcomes. Hisrole also includes leading theInstitute’s research activities.A career in the vocationaltertiary sector of more than12 years is complemented byearlier pursuits in commerceand business. Alan hasexperience as a lecturer inbusiness studies as wellas head of school. Hisbackground in education forbusiness management andhis interest in New Zealand’ssmall business sector fitwell with WelTec’s appliedresearch and technologytransfer contribution tobusiness and industry.10 | WELLINGTON INSTITUTE OF TECHNOLOGY

James SmithCHIEF FINANCIALOFFICERPeter CowperCHIEF OPERATINGOFFICERMichael HespDIRECTOR,SPECIAL PROJECTSJulia HennessyEXECUTIVE DEAN, FACULTYOF HEALTH, BUSINESS ANDSERVICE INDUSTRIESAlan J Peck, ONZMEXECUTIVE DEAN, FACULTY OFTRADES AND TECHNOLOGY(TO SEPTEMBER 2012)BCA (Victoria University)CA (New Zealand Instituteof Chartered Accountants)As Chief Financial OfficerJames is responsible for thestrategic financial frameworkand operational financialmanagement and reportingactivities undertaken withinWelTec.Prior to becoming the ChiefFinancial Officer Jameswas Financial Controller atWelTec. Previous to joiningWelTec James was theFinancial Accountant atThe Open Polytechnic ofNew Zealand, and held anumber of roles within InlandRevenue.James is a member ofNew Zealand Institute ofChartered Accountants.In 2012 the COO role involvesmanaging the AcademicRecords and Administration,Information TechnologyServices and Support,Student Experience, Facilities,Procurement, BusinessAdministration, BusinessIntelligence and changemanagement business areas.As well as these infrastructureand capability services,Peter’s responsibilities includebusiness process changeinitiatives for core studentmanagement. Peter alsoleads the Shared ServicesProgramme for WelTec(as part of the strategicpartnership with Whitireia)and Chairs the SharedService Governance Group.Peter brings many years’experience in leadership,managing complexand technical businessoperations, third-partysupplier models andoutsourcing, contractmanagement and leadingchange. Peter’s previous rolesinclude managing TelecomNew Zealand’s operationaland delivery business areas.He was Head of Science andEngineering at BRANZ and heowns Quorum Group.Peter is a Member of theMaritime New ZealandAuthority (the MNZ Board),is a founding trustee of thePorirua Digital Trust andmember of the New ZealandInstitute of Directors.Master of Applied Finance(Victoria University)CA (New Zealand Instituteof Chartered Accountants)Michael began his newrole, having previouslybeen WelTec’s GeneralManager Corporate andFinance, in mid-2011. Therole of Director, SpecialProjects is to provide adviceon specific high prioritystrategy developments;manage investment andcapital projects; and developWelTec’s long-term campusplan.Previous experience forMichael includes a numberof roles for FletcherConstruction; being amember of the team thatprivatised Works PropertyServices to become SercoGroup NZ, then holdingthe roles of CorporateServices Director andFinance Director for Serco;Chief Financial Officer andBoard Secretary for theNew Zealand Wool Board;a number of consultingand contracting roles fororganisations includingthe Department of Labour,Healthcare Otago,Wellington City Council, andthe Correspondence School.Michael is a memberNew Zealand Institute ofChartered Accountants.MEd (Victoria University)MMgt (Massey University)PG Dip HSM (MasseyUniversity)BA (Victoria University)DipN (WellingtonPolytechnic)Julia has the overallresponsibility for themanagement of the Facultywhich is comprised of sevenSchools and the AcademicManager’s Unit.Prior to becoming theExecutive Dean of theFaculty, Julia was previouslyExecutive Dean of theFaculty for Health, Businessand Service Industries.Previous experience forJulia includes GeneralManager, Mental Healthand Addiction Service forHutt Valley DHB and SeniorAdvisor at the Ministry ofHealth. She worked in thetertiary education sectorbefore being appointedRelationship Manager forthe Central Regional HealthAuthority.She also taught on healthrelated programmes in thetertiary sector.She is a Fellow of theCollege of Nurses Aotearoa(NZ) and was a memberof Nursing Council of NewZealand from 2008-2011.BA (Auckland)Diploma in StrategicStudies (University of NSW)Graduate (Royal College ofDefence Studies, London)Advanced ManagementProgramme (Harvard)Alan was Executive Dean ofthe Faculty of Trades andTechnology since February2009 to September 2012.He was responsiblefor WelTec’s schools ofInformation Technology,Creative Technology,Construction, Engineering,and Automotive Technology.He was also responsible forthe Trades Academy, whichopened in 2011.Before joining the tertiaryeducation sector in 2005,Alan served 40 years asan officer in the Royal NewZealand Navy, with a varietyof appointments both at seaand ashore; in New Zealandand overseas. After leavingthe Navy, Alan worked inthe Ministry of Education,and the Tertiary EducationCommission before joiningWelTec.2012 ANNUAL REPORT | 11

The Hospitality Advisory Committee visits the new Wellington CBD hospitality campus under construction in June 2012.12 | WELLINGTON INSTITUTE OF TECHNOLOGY

Industry Advisory CommitteesAlcohol and DrugTim Harding (Chairperson) – CEO, CareNZAnna Nelson – Programme Manager, Matua Raki, NationalAddiction Workforce DevelopmentChristine McCarrison – Addictions Professional Leader,Community Mental Health & Addictions Service, Hutt Valley DHBDenise Nassenstein – Alcohol and Drug Counsellor, Community,Alcohol and Drug Service (CADS)Ian MacEwan – Executive Director, DAPAANZJude West – Central Region Practice Leader,Problem Gambling Foundation of New ZealandMajor Stephen Scott – Director, Wellington Bridge ProgrammeMary Anne Cooke – Director, ABACUS, Counselling,Training & Supervision LtdMaynard Gilgen – Clinical Director, Ora Toa MaurioraMurray Trenberth – CEO, WellTrustRhonda Robertson – Consumer Advisor, Matua Raki, NationalAddiction Workforce DevelopmentTakurua Tawera – Clinical/Cultural Liaison,Te Hauora Runanga O Wairarapa Inc.Trish Chivers – Team Leader, Community Mental Health &Addictions Service, Hutt Valley DHBAutomotive TechnologyRoss Wallace (Chairperson) – National Training Manager,CablePrice NZ LtdRichard Eyles – Workshop Owner,North City AutomotivesDave Wise – Trade Training Manager,NZ Army Trade Training SchoolDean McMillan – Workshop Owner, D E McMillan LtdGeorge Robinson – Sales Representative,Otbury Refinish SolutionsHus Kala – Workshop Owner, Hutt City Auto ElectricalShane Maru – Student Representative,Auto Tech Year1 – A groupNeil Butterfield – Workshop Owner, Porirua Autocrash RepairsNick McGuirr – ITA, NZ MITOOwen Woodman – Workshop Owner, Woodman AutomotiveSteve Gaskin – Workshop Owner, Rolrich Panel & Spray 1988 LtdVerna Niao – Group Manager - Workforce Development,NZ MITOBuilt EnvironmentPeter Degerholm (Chairperson) – Director, CalderglenDan McGuinness – Director, McGuinness Building ContractorsJohn Granville – Executive Director, NZIQSMike King – Senior Project Manager, Summerset Management GroupKevin Collins – Director, Design Network Architecture LtdPaul Bunkall – Director, RawlinsonsRussell Burley – Commercial Manager, Naylor LoveTony Sutherland – Director, Rider Levett BucknallTony O’Connell – Managing Director, NMEStewart Peck – Project Manager, Naylor LoveBusinessBrian Cowper (Acting Chair)– Agent, Hudson RecruitmentCharles Gilmore – CEO, IndeServe LtdAnne Hare – Financial Sector, NZXBill Davies – Self EmployedOtila Osborne – Recruiter, Positive StaffKanwardeep Bedi – Own CompanyLeo Austin – Owner, Austin Associates LimitedRobyn Horton – Owner, McDonalds QueensgateTeri Puketapu – Iwi Representative, Te Runanganui o Taranaki whanuiki Te Upoko o Te Ika a Maui incorporatedCounselling and Trauma StudiesDavid Waters (Chairperson) – Chief Executive, Ambulance NZHelen Bowbyes – Guidance Counsellor, Naenae CollegeJayne O’Neill – Clinical Leader, Relationship ServicesJudy McCormack – Counsellor/Supervisor,The Counselling GroupLinda Karlin – Counselling and Training Manager, SkylightLuana Murray – Senior Advisor,Relationship Services WhakawhanaungatangaMari Cribb – Guidance Counsellor, Upper Hutt CollegeCreative TechnologiesJaimee Warda (Chairperson) – BCT Graduate Consultant,Joug DesignLaurence Greig – Programme Manager, Royal NZ Plunket Society IncBill Carden-Horton – Director, Billy SushiChristine Doherty-McGregor – Assistant Curator,Expressions Art and Entertainment CentreNeville Parker – Designer, Designers Institute of NZSteve La Hood – Director, Story Inc.Zoe McLean – Current BCT Yr 3 Student, WelTec2012 ANNUAL REPORT | 13

PasifikaLinda Sissons (Chairperson) – Chief Executive, WelTecAiono Mino Cleverley – Samoan CommunityFilipo Lui – Tokelauan CommunityKerese Manueli – Fijian CommunityVei Lotaki – Tongan CommunityPlumbingJohn Leen (Chairperson) – Owner / CEO,John Leen Plumbing LtdColleen Upton – General Manager,Hutt Gas & Plumbing Systems LtdDave Walker – Project Manager, Aquaheat Industries LtdYouth DevelopmentJohn Harrington (Chairperson) – Coordinator, Canterbury YouthWorkers CollectiveAdrienne Dawson – Assessment and Qualifications Manager,CareerforceAndy Pilbrow – National Quality Services Manager,YMCA NZ National OfficeBill Peace – Social Services Manager, STRIVE Community TrustDawn Badco – AOD Youth Clinician, Community Mental Healthand Addiction Service/HVDHBElizabeth Kerekere – Rangatahi Maori Consultant,Tiwhanawhana TrustMaree Tukukino – Pou Whakahaere, Kapuia Services LtdCraig Cochrane – National Operations Manager, Plumbing ITOBusiness Service ManagerDerek Plimmer – Owner, Plimmer Plumbing LtdFiona Gavriel – CEO, Master Plumbers LtdIan Elliott – CEO, Plumbing, Gasfitting, Drainlaying & Roofing ITOMalcolm Andrews – Manager, Duncan McGregor LtdRoss Tait – Plumber & Gasfitter, K J Tait LtdStewart Weddell – Owner, Plumber 1Tim Wood – Manager, Masterlink LtdSue McGarry – Senior Training Services Representative,Plumbing ITO, Manager Course SchedulingLinda Baxter – Masterlink Coordinator, MasterlinkGraham Hawkins – Owner, Hawkins PlumbingWellington Trades AcademyRoss Sinclair (Chairperson) – Principal, Hutt Valley High SchoolCarrie Murdoch – Manager Education, Skills & Trade,Business NZGrant Jones – Principal, Newlands CollegeKerry Leggett – Youth Development Team Manager,Vibe Lower HuttMartin Isberg – Principal, Wainuiomata High SchoolRichard Campbell – Principal, Paraparaumu CollegeSally Haughton – Principal, Wellington East Girls’ CollegeSue Roberts – Head of Transition, Careers & Gateway,Aotea College CATE Regional Chair of CATEWellington TradesAcademy student excelsGaining valuable work-place skills through the WellingtonTrades Academy while still enrolled at secondary schoolled to early success for Rebecca Rothwell. Rebecca’sacademic excellence was recognised with a scholarshipenabling her to go onto further study in 2013.Rebecca, who was uninspired by secondary school,gained a Certificate in Hairdressing and Beauty Servicesat the Academy. This will help her with her goal of findinga workplace apprenticeship.Rebecca’s year at the Academy included putting herstudy into practice by working at the World of WearableArt Award show. She also enjoyed being able toparticipate in the sports and social activities at St Mary’sCollege, which helped with the transition out of theschool environment.2012 ANNUAL REPORT | 15

Whakarongo ake auKi te tangi a te manu neiTuuii, tuuiiTui, tuiaTuia I rungaTuia I raroTuia I rotoTuia I whaoTihei mauri oraI listenTo the cry of the birdThe TuiBind together, stitch together,weave togetherThose things from aboveThose things from belowThose things from within usThose things from around usBehold the sacred breath of life16 | WELLINGTON INSTITUTE OF TECHNOLOGY

Chairperson’s ReportThe foresight, determination and hardwork of the last few years delivered thepromised success for WelTec in 2012.This was not just a year of good financial management and a solidsurplus at the end of the year. It was more than outstanding academicoutcomes for our students and staff as evidenced by our improvededucational performance, it was the realising of a healthy organisationwith wide horizons and good connections, having a positive impacton the future of New Zealand.Research shows that education contributes to economic growth.Improvements we make to the education we offer will result inimproved economic performance - at an individual level for ourgraduates, at a business level for those who employ them and atregional and national levels as well. I am pleased to present this 2012Annual Report and the evidence it offers of WelTec’s contributions.A number of significant events in 2012 marked achievements thathave been years in the making.New Hospitality CampusWe launched a new hospitality campus in Cuba Street, Wellington inOctober, celebrating with Minister for Tertiary Education, Skills andEmployment Steven Joyce, as well as business leaders from thehospitality industry, secondary schools, funders and policy makers.The purpose-built facility is set to become New Zealand’s centre forcuisine and hospitality excellence with two institutes on site. Sharingthe building with us is our joint venture partner, Le Cordon Bleu NewZealand Institute which was opened by the Prime Minister John Keyin 2012.The campus site allows for close connections to the local hospitalityindustry, drawing on the region’s talents and resources, and the flowof graduates is expected to strengthen Wellington’s position as NewZealand’s culinary and hospitality capital. Our students are in theheart of Wellington’s hospitality industry, which gives them more workopportunities. It also provides industry a place to work with students– sharing ideas and exchanging knowledge. This fabulous facilityinspires student innovation and encourages creativity to thrive.The facility can currently take 540 students at any one time. Whenstage two is complete the capacity will increase to 700 students.Each Institute has its own kitchens and staff areas. Spaces such asthe lecture theatre, classrooms, training restaurant and barista/barlab are shared by the Institutes as is the Learning Commons.In total, $13m has been spent to develop the new campus. Thisinvestment in the central city’s food and beverage hub will helpfurther Wellington’s reputation for outstanding hospitality.Strategic PartnershipIn January 2012 WelTec and Whitireia formed a Strategic Partnership.This followed extensive research and consultation during 2011 onhow the two institutions could work together to increase benefits forstudents, communities and industry in the Wellington region. Thispartnership is ‘Students First’.The partnership is the first of its kind for tertiary education in NewZealand. While the institutions are each a separate entity their twocouncils were combined by Hon Steven Joyce on 1 January 2012.Later that month a Combined Academic Board was established toensure a consistent strategic direction on academic matters.Both institutions are committed to working together as partnersto increase the educational benefits and pathways for students inthe Wellington region, strengthen and enhance the overall qualityteaching and learning, improve the ongoing operational efficiency ofeach Institution and ensure the skill needs of industry are met.During 2012 extensive effort was invested by senior managementand the Council in shaping the Partnership, working through whatit means to be in a close strategic and operational partnership inthe same region; and with no precedents to follow. This involvedintensive, information sharing and planning. It resulted in a commonset of priorities for action and investment by each Institution over thenext three years.The priorities for the Strategic Partnership are set out and interwovenin the three-year Investment Plan that was approved by the TertiaryEducation Commission in late 2012.It is my goal to ensure that over the next three years the Strategicpartnership between WelTec and Whitireia delivers an enhancedand more efficient regional network of vocational educationprovision in the Wellington region along with greater efficienciesacross both institutions.Computer Power PlusIn 2012, as a joint venture with Whitirea and part of our StrategicPartnership, we acquired the assets of an information technologyPrivate Training Establishment (PTE). Computer Power Plus wasformerly the New Zealand operation of the Computer Power Institute- one of the biggest providers of IT training in New Zealand. It is alogical synergy with WelTec’s own IT offering and we were pleasedto be able to help the students when Computer Power Institute wentinto liquidation.Despite some challenging times and a change of ownership morethan 80 students graduated in 2012 with certificates and diplomasin business computing and business systems, network engineering,software development, and systems technology.It has taken hard work by the WelTec team to create a top qualityhospitality school in the CBD. It has also taken the support, and faith,of many people in our wide community of influence. The new campustakes our award-winning and acclaimed hospitality education closerto Wellington industry. It also provides an excellent and inspiringenvironment for staff and students.2012 ANNUAL REPORT | 17

Minister for Tertiary Education, Skills and Employment, Hon Steven Joyce officially opens the new School of Hospitality campus on 24 October 2012Hon Steven Joyce officially opens the new School of Hospitality campus on September 28, 2012Yvanah Kia receives the Council scholarship for her 2012 study in Business Administration Levels 3 and 418 | WELLINGTON INSTITUTE OF TECHNOLOGY

Student AccommodationDuring 2012 the Council approved a business case for studentaccommodation in Wellington. Being able to offer accommodationwill help Council’s goal of growing the international student marketin Wellington. A suitable site was found and the Council approvedentering into a long-term lease for premises at 222 Willis Street.The building was gutted, earthquake strengthened and refurbishedat the start of 2013 and when complete will provide 280 beds in apurpose-designed and built high-standard facility. It is scheduled foroccupation in early 2014.Strong financial management and surplusat end of yearTotal SAC funding was achieved with the WelTec parent finishing2012 with an operating profit of $1.6m representing a 2.9 percentreturn. The Group result, incorporating WelTec and WelTec ConnectLtd, showed a 2.2 percent surplus equating to $1.2m. Total operatingrevenue at $55m, an increase of almost 5 percent over 2011 was verypleasing. The Schools of IT and Business had an outstanding yearachieving higher than budgeted domestic and international studentnumbers.Securing sources of other income remained a high priority. Theinstitute completed the year by showing an improvement in this areaby almost 30 percent more revenue compared with 2011. This waspartly attributable to the profit share from the investment in ComputerPower Plus. Offsetting this good result was marginally higher thananticipated costs of services, but crucially for a tertiary educationinstitution personnel costs were maintained to less than 60 percentof income.Net assets of almost $73m were maintained, with improvements inrelation to debt and income in advance. The year end cash positionof $8.7m represents a very good result as $7m was invested in 2012 inthe new School of Hospitality. The minimum 12.5 percent cash coverposition was exceeded with 25 percent achieved at year end.AcknowledgementsI thank my Council colleagues for their ongoing support and guidancethis year. On behalf of the Council, I again thank our Chief Executive,Dr Linda Sissons, who continues to lead WelTec with the wisdom andcourage for which she is widely recognised. With all its successes theyear was both rewarding and challenging. Linda’s leadership createsan environment that fosters achievement and engenders support forWelTec.More culinary accoladesIn 2012 WelTec again won the national Toque D’Orcooking competition, following on from success in2011. The Nestlé Toque d’Or is New Zealand’s longestrunningand most prestigious student cookery and foodservice event. It is held in 17 countries around the worldand has launched the careers of many world-famouschefs, including Jamie Oliver.WelTec students Beth Christieson and Wei Jun Leetriumphed over 20 culinary students from around NewZealand and the Pacific to create six covers of a threecoursemeal in just two-and-a-half hours. The team’sfront of house competitor Iain Charlton served the dishesto invited guests. The panel of judges included leadingchefs and culinary professionals.WelTec tutor and chef mentor Ray Morrell said themost important factor in the team’s win was teamwork.Students were supported not only by everyone on theSchool of Hospitality staff, but also by industry partners,including Shaun Clouston from Logan Brown.We owe this very successful year to a team of talented and dedicatedpeople. WelTec staff and management have worked hard to achievean outstanding result in 2012. Our students and our support in thecommunity are the evidence of that commitment.Hon Roger SowryONZMCouncil Chair2012 ANNUAL REPORT | 19

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Students FirstIn 2011 after extensive research andconsultation the Councils of Whitireiaand WelTec formed a strategicpartnership known as ‘Students First’.Students First PartnershipIn 2012, a single combined Council was established to govern andguide a consistent strategic direction for tertiary level vocationaleducation in the Wellington region.In 2011 after extensive research and consultation the Councils of Whitireia and WelTecformed This is the a strategic first example partnership of a single known combined as 'Students Council governing First'.two tertiary institutions in New Zealand.In 2012, a single combined Council was established to govern and guide a consistentBoth institutions are committed to working together as primarystrategic direction for tertiary level vocational education in the Wellington Bachelor region. of Information Technology students Jonathanpartners to increase the educational benefits for students in theThis is the first example of a single combined Council governing two tertiary Gan and Phil Carman won the 2012 New Zealand CiscoWellington region, improve the ongoing operational efficiency andinstitutions in New Zealand.CCNA NetRiders Competition. The pair took on teamsensure the vocational skill needs of industry are met.from tertiary education institutes around the country toBothThe twoinstitutionsindividualareinstitutionscommittedhavetoa combinedworking togetherEFTS countas primaryofpartners secure to increase the title.the 9,431, educational a total of 18,058 benefits students, for students $118m in in annual the Wellington revenue and region, improve the ongoingJonathan and Phil attributed their success to great teamoperational over 900 full-time efficiency equivalent and staff. ensure the vocational skill needs of industry are met.work and good tutors. They acknowledged that teamThe first two priority individual of the institutions combined Council have a combined 2012 was to EFTS identify count of 8,500, a work total is of important 19,000 in information technology, as muchkey projects for the partnership. Nine were identified nowof the work involves problem solving. Jonathan andstudents, $110m in annual operational revenue and over 600 full-time equivalent staff.form the strategic direction. The work completed on these projectsPhil also said the support and encouragement WelTecThe throughout first priority 2012 provides of the combined the essential Council pillars for in success 2012 was in 2013. to identify key projects students for receive from their tutors has many benefits forthe The main partnership. focus of Nine these were being identified around direct and and now real form benefits the for strategic direction. students. The They believe the fact that their tutor is a Ciscocertified network professional and WelTec’s Petonework students. completed on these projects throughout 2012 provides the essential pillarscampus has a Cisco lab also gave them an edge.for success in 2013. The main focus of these being around direct and real benefitsThis first year of the strategic partnership has been challengingfor students.The Cisco competition is a great way for IT graduatesand rewarding. Staff have embraced the change and workedemerging into the industry to be noticed by potentialThiscollaborativelyfirst yeartoofachievethe strategicpositivepartnershipresults.has been challenging and rewarding. employers Staff from international companies. Many IThave Key priorities embraced in the the first change year included: and worked combining collaboratively governance to achieve positive employers, results. particularly in networking, make WelTec theirprocesses for one Combined Council; a combined Academicfirst port of call.Key priorities in the first year included: combining governance processes for oneBoard with an external Chair; developing a Shared ServicesCombined Council; a combined Academic Board with an external Chair;AdevelopingWelTec teamaalso won the New Zealand CiscoStrategy; developing a Shared Campus Planning Strategy;competition in 2011.ShareddevelopingServicesa sharedStrategy;brand,developingjoint domestica Sharedand internationalCampus Planning Strategy; developinga shared brand, joint domestic and international marketing and Advisory Committees.marketing and working with Advisory Committees.Great teamwork and support102012 ANNUAL REPORT | 21

Ma wai raa, e tau rimaTe Whare Wananga o teAwakairangiMa te tikaMa te ponoMa te aroha eWho will care for this placeof learning?This place called AwakairangiIntegrity willTruth willAnd so too will love22 | WELLINGTON INSTITUTE OF TECHNOLOGY

Chief Executive’s ReportWelTec touches the lives of manypeople. Our reach goes far beyondstudents and staff, it extends outinto the wider community, as well asinto the businesses and industry thatdepend on our projects, graduatesand research for their own success.We have a major impact on the country’s economy, deliveringmany of the people, knowledge and skills that build and sustain ourcountry.So, while we are proud of all we’ve achieved in 2012, we share oursuccesses and achievements with a large number of stakeholders.We again owe a debt of gratitude to the iwi, businesses and otherstakeholders who partner with us so that our students can havepositive outcomes.Our Educational Performance Indicators, which are covered in detaillater in this report, are very positive. Provisional TEC results for 2012show WelTec has the second highest course completion rates of allITPs at 81 percent. This is an outstanding result and I congratulateall academic staff and those staff providing services and supportto students, particularly the student mentoring and Tamaiti Whangaistaff.Te Runanganui o Taranaki Whanui continued to play a key role inengaging young Maori in tertiary education in the Hutt Valley andprovided valuable input to the Chief Executive’s office and TamaitiWhangai team.Pasifika Church Ministers from the Wellington region joined withWelTec and Whitireia to support Pasifika scholarship students whowere entering tertiary education for the first time under a new TECfunded initiative.Chief Executive of Business New Zealand Phil O’Reilly spoke ata breakfast we hosted in May 2012. He congratulated us on thethings that we are doing in Wellington and the Hutt Valley. Henoted that WelTec is very adept at playing in the real world andthat polytechnics are a safe place for business. We are local andcan take science, technology, engineering and maths into practicalcontexts. He commended WelTec’s contribution to assistingbusiness get strategic and lead innovation. We also believe that iswhere our strengths lie.Strategic Partnership with WhitireiaThe Strategic Partnership with Whitireia has established a combinedCouncil and Academic Board. Drawing on the strengths of bothinstitutes we are able to give students easier access to a diverserange of programmes. Nine key projects were agreed for 2012.Excellent progress was made on all projects with staff from bothinstitutes working together to establish and deliver project outcomes.Dr Peter Coolbear was appointed to the role of independent Chairof the Combined Academic Board. Peter is the Director of AkoAotearoa, New Zealand’s National Centre for Tertiary TeachingExcellence. Ako Aotearoa’s vision is to contribute to the bestpossible educational outcomes for all learners which is exactly whatthe Combined Academic Board will be focused on through theestablishment of new collaborative relationships.Reaching beyond our shoresIn 2012 we signed an agreement with Guangxi Polytechnic ofConstruction (GPC) in China. GPC is a highly respected andspecialised construction school offering three-year diplomas inarchitectural technology, quantity surveying, civil engineering,landscape design, public utility (water, gas, and transportation),construction management, interior design and IT.Under the agreement, students will spend two years studying inChina and then move to New Zealand to complete the last yearof WelTec’s New Zealand Diploma in Engineering (Civil) and theDiploma in Creative Technologies. This is an exciting arrangementthat will see the joint development of curriculum and the exchange ofstaff and students between the two institutes from 2014.We were invited back to Hong Kong Cyberport in 2012 to delivera creative technologies programme. Cyberport is a creative digitalcommunity, owned by the Hong Kong Government, that nurturesstart-ups. The relationship has the potential to attract even morestudents in the future, as well as a unique teaching and learningexperience for WelTec tutorsTechnology Transfer VouchersThrough our subsidiary, WelTec Connect Limited, we gained threenew technology transfer vouchers. Technology transfer vouchersallow accredited institutes of technology or polytechnics [ITPs] tomake a positive contribution to the research and development ofexisting industries and to the growth of new industries.These three projects gained from a range of our services, includingIT programming, digital media, process and product developmentas well as business and capability development. They provide animportant opportunity for WelTec staff, students and internationalstudent interns to work on projects with industry alongside WelTecConnect’s staff.2012 ANNUAL REPORT | 23

Scott Bregmen, teaching rhythm and timing to his CVLS studentsSpecial successIt was an acknowledgement of the difference we make to people’slives that earned us increased funding through the Special EducationSupplementary Grant (SSG) fund. This funding was announced in2012 and is to support learners with medium to high special needs.Our Community and Vocational Learning Skills (CVLS) programmehas been very successful for some time. One of the tutors on theprogramme, Scott Bregmen, was recognised in 2010 with a Te AkoAotearoa Tertiary Teaching Excellence Award.The majority of students who have studied on the CVLS programmetypically have no or very few formal secondary school qualifications.Many have major challenges to surmount. For these students,participation in tertiary education is a significant achievement. OurCVLS students not only participate throughout the year, but all havegone on to successfully complete their qualification.The new funding of $136k enables us to provide tutorial supportin the classroom so specific learning requirements are met andlearners can fully participate in their studies. With the extra fundingsupport and SAC funding, we are offering another programme atLevel 1 from 2013 to meet the high demand from the Wellingtonregion for programmes of this type for learners with special needs.International Industry Certifications TrainingOur School of Information Technology was officially recognised asthe first National Academy for CompTIA throughout New Zealand.Covering a number of service and support roles in the IT industrythis is a valuable opportunity for our students. They will be able togain vendor-neutral international certifications confirming they meetindustry needs.Through this new certification employers will recognise that WelTecstudents leave WelTec with foundation level knowledge and skills toperform IT roles.As a National CompTIA Academy we plan to run ‘train the trainer’sessions for other educational institutes, industries and businesses.Close ties with MaoriIn 2012 we asked Professor Rawiri Taonui, Te Ara Poutama from theFaculty of Maori Development at Auckland University of Technology,to review our approach to not just the education we deliver to Maoristudents but also our engagement with Maori communities.Professor Taonui’s report commended our Tamaiti Whangaiprogramme of student support and recognised our high level of goodwill and commitment toward making a difference for Maori students(there is more detail on Tamaiti Whangai later in this report). He alsocommented on our good relationship with mana whenua in the HuttValley. He noted the 2012 renewal of a Memorandum of Understandingwith Te Runanganui o Taranaki Whanui first signed in 2008. This is animportant connection for us. We also signed an Memorandum withWaiwhetu Marae in 2012, recognising the marae as the hub of TeAtiawa and formalising our relationship with them.The number of young Maori entering tertiary education, especially atplaces like WelTec, will continue to increase. The way we engage withMaori and support them to achieve their educational goals is critical toour success, as well as theirs.Graduate Exhibition SuccessContent: Raarangi Uupoko was a remarkable exhibition of work from30 graduates of our Bachelor of Creative Technologies, held at theNew Zealand Academy of Fine Arts Galleries in Wellington. WellingtonMayor Celia Wade-Brown launched the exhibition on the eve of TheHobbit premiere congratulating graduates on their achievements, andhighlighting the work opportunities for graduates in Wellington.Bachelor of Creative Technologies students are encouraged tospecialise in their chosen field whilst developing skills that lead themto work anywhere in this exciting and innovative industry – an industrywhich is particularly important to the economy of the Wellington region.In this degree programme students set goals, collaborate and areencouraged to lead projects. The exhibition was itself a remarkableproject, attracting positive attention from employers, as well as visitors.24 | WELLINGTON INSTITUTE OF TECHNOLOGY

Dr. Linda Sissons and Pasifka Ministers at Pasifika Scholarships eventThe film, digital and creative industry in Wellington is one of theregion’s biggest employers with a workforce of almost 9,800.Thiscreative workforce is expected to increase by more than 600 overthe next four years. Occupations in this industry continue to appearon the New Zealand Immigration long-term skill shortage list.Corrections partnershipWe have been working with the Department of Corrections since2008 to help them achieve their aims of reducing re-offendingby providing prisoners with increased post-release employmentpotential. Our relationship has grown since then and now, as wellas delivering trades training at Rimutaka Prison in purpose-builtfacilities, we also moderate and manage Corrections’ own deliveryof training at other prisons around the country and support otherITPs’ delivery of trades and technical training for the Department ofCorrections through the use of WelTec’s programmes of study. Overthe last four years this training has extended from the initial offeringof painting and decorating and small motor automotive, to nowinclude carpentry, brick and block laying and engineering.WelTec tutors teach technical skills in the prison workshopssupported by Corrections custodial officers. Overall coursecompletion rates are as good, and often better, than those ofcomparable programmes delivered at WelTec’s main campus. Onrelease many of these students have continued on with their studies,obtaining apprenticeships or going into work for themselves.We are pleased to be able to help the Department of Correctionsachieve their objectives to reduce the rate of re-offending, tocontribute to positive employment outcomes and a more positivefuture for former inmates as they re-integrate into communities.Meeting emerging demandsIn 2012 we continued to recruit and train the tradespeople that willbe needed to rebuild Christchurch. As the closest training providerto Christchurch, we are in a good position to meet the demand forskilled tradespeople who are willing to move. Later in this report wego into more detail about how we have done that.Along with our Strategic Partner, Whitireia, there has also beenthe opportunity to support the Government’s Pasifika TradesStrategy with scholarships for students of Pacific Island descentto learn construction and other trades skills. We have done this incollaboration with the Pacific Island community, in a uniquely Pacificway, with outstanding results.It is just such strong connections with industry, communities andpolicy makers that put WelTec in a good position to meet current andfuture education and training needs. We have done that well in 2012and have sound plans in place to continue in the future.AcknowledgementOur values of challenge, empathy and growth which we applied inour approach to work and to students learning saw us succeed in2012. I would like to thank the Executive Management Team andall my colleagues at WelTec for supporting the Institution and I lookforward to new challenges in 2013.Dr. Linda SissonsCNZM2012 ANNUAL REPORT | 25

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Rebuilding ChristchurchDelivering trades skills to meet emergingdemand from the building and constructionindustry.We welcome the Government’s investment in us to train the peopleneeded by the building and construction industry. Last year we trainedaround 1300 people in carpentry, plumbing, painting and decorating, brickand block laying, engineering and electrotechnology.The expansion of our trades delivery is timed to meet the expected impactin 2013 of Christchurch’s future building needs. This high industry needis expected to last for five years for residential builds and 10 years forcommercial construction projects.After a low period in the building and construction industry over recent yearsit is even more important now to boost the numbers of pre-trade staff aswell as skilled tradespeople. Research, testing, consulting and informationcompany BRANZ says that at least 40 percent more people will be neededto rebuild Christchurch and build affordable housing in Auckland. As therewill be a lot of movement of tradespeople around the country to take upthese opportunities, skilled people will be needed everywhere.Our Build Your Future campaign which started in late 2011 as a directresponse to the call to action from the Government to provide skilledtradespeople for the rebuild of Canterbury, really started to gain momentum.The Government announced additional funding for ‘priority trades’ in late2012. WelTec, with its long history as a trades training provider, offered aspart of its Investment Plan negotiations to continue delivering to this cohort.Our Engineer Your Future campaign, designed to encourage more peopleto consider training for the engineering industry, came into sharp focusin late 2012 when the Government announced 1000 more engineeringplaces across the public tertiary education sector to be achieved in 2013.In 2012 our focus for recruitment was on secondary schools in the greaterWellington region. This saw the development of joint collateral with VictoriaUniversity of Wellington’s School of Engineering. Alongside this wascontinued collaboration with the Metro Group on promoting the Bachelor ofEngineering Technology nationwideThis year, working with Whitiriea we made entry into trades even easier, withpre-trade programmes offered in Otaki and the Kapiti Coast.Feedback from the building industry on the quality of our graduates and theirskills is very positive. Employers in Wellington and Christchurch were linkedup with our graduates. The SCIRT (The Stronger Christchurch InfrastructureRebuild Team) bus visited Petone in late 2012 and more than 70 WelTec andWhitireia trades graduates signed up for work in Christchurch.2012 ANNUAL REPORT | 27

Pasifika TradesPasifika students gained newopportunities.We supported the Government’s Pasifika Trades Strategy with scholarshipsfor students of Pacific Island descent. The Government’s strategy aimsto train 300 Pasifika people in the trades required for the rebuild ofChristchurch and to support infrastructure developments across thecountry. In Wellington WelTec and Whitireia worked together with PacificChurch Ministers to launch the initiative and to recruit Pasifika studentsinto the programme. This involved students learning carpentry, paintingand decorating, brick and blocklaying, plumbing, landscape construction,mechanical engineering, and electrical engineering.In 2012, 15 carpentry students of Pacific Island descent studied for aCertificate in Carpentry at WelTec. Their final project for their qualificationwas the construction of a house, which required excellent team work aswell as great carpentry skills. The students impressed their tutors withboth.A unique feature of the programme has been community support,provided by Pacific Church Ministers. Reverend Nove Vailaau,Chairman Pasifika Scholarship Programme Committee and member ofthe Fellowship of Samoan Ministers in the Wellington region who wasright behind the initiative from the start, commented that it was a greatinitiative and heartening to see Pacific Island people succeeding in theirprogramme of study.WelTec’s Pasifika Advisory Committee, with members representing allthe major nations in the Pacific, also provided liaison and support for thestudents who came from many different backgrounds.28 | WELLINGTON INSTITUTE OF TECHNOLOGY

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Educational PerformanceOur students’ success was our success2012 ActualSAC EFTS*2012 SectorMedianOur educational performance attainments in 2012 showeda consistent trend of improvement across all four of the keyeducational performance indicators.Our performance compared very favourably to the sector as a wholeand exceeds the median in course and qualification completions.We are in the upper quartile for both course and qualificationcompletions in the grouping of all ITPs.To make these improvements in educational performance wemaintained a strong and sustained emphasis on continuousimprovement in teaching and learning through effective selfassessedevaluation. This was matched by targeted student supportservices that secure success for learners.CourseCompletions 81%QualificationCompletions 72%Progression tohigher level study 38%Retainedin Study 66%78%61%38%65%The following section reports on educational performance for SAC andYouth Guarantee funded EFTS as per the Investman Plan 2011-13Course completions:2010Actual2011Actual2012TargetA strong focus on educational performance at the course levelhas resulted in a pleasing course completion improvement to 81percent, which exceeds the Investment Plan target for this measureby a healthy margin. We have underpinned our strategic emphasison educational performance with a range of tactical initiatives.Our course completion achievement for Student AchievementComponent students ranked us second in the whole ITP sector,which has a median of 78 percent in 2012.2012Actual76% 76% 79% 81%Pasifika2010Actual2011ActualThere has also been a very strong improvement in the coursecompletions achieved by our Pasifika learners. During 2012 thestrengthening of relationships with our Pasifika communities, theimpact of the Pasifika trades scholarships and our close attentionto supporting the needs of this learner group have all contributed tothis significant rise in educational performance.Learners under 252012Target2012Actual64% 65% 70% 76%2010Actual2011Actual2012Target2012Actual72% 75% 78% 80%Course completions in priority groups:Maori2010Actual2011Actual2012TargetThere was particularly significant improvement in coursecompletions in this priority group. Between 2010 and 2012 Maoricourse completions at WelTec rose by more than 10 percent. Muchof this gain was in 2012. Our highly successful Tamaiti Whangaiinitiative, in partnership with Te Runanganui o Taranaki Whanui,contributed greatly to this outcome. The strong performance in2012 took us closer to our goal of achieving parity in educationalperformance for this group of learners.2012Actual65% 68% 74% 76%The course completion improvement trend across priority learnergroups in 2012 also extends to our younger learners. An improvementof five percent takes the completion rate to 80 percent which is avery creditable result given the often-accepted ‘at risk’ view of thiscohort. As well as being above the sector median, this outcomeplaces this group close to achieving parity in course completionsoverall. A significant proportion of our student population is under25 (64%) so we have focussed our teaching and support service onmeeting their needs.* This is based on TEC’s Student Achievement Component provisional data at the time of publication and is subject to change when finalised.212012 ANNUAL REPORT | 31

Qualification completion2010Actual2011Actual2012Target2012Actual64% 62% 68% 69%While qualification completion statistics as assessed and reported by theTEC are prone to influence by factors such as the number of studentsstudying part-time or a sudden growth in year-one intakes of multiple yearprogrammes, we have achieved a strong improvement in our qualificationcompletions in 2012 and exceeded our target of 68 percent.The ITP sector median for SAC qualification completions in 2012 was61 percent. Our 2012 performance against this measure places us wellabove the median with a ranking in the upper quartile.Priority groups qualification completionQUALIFICATIONCOMPLETION2010Actual2011Actual2012Target2012ActualMaori 59% 51% 65% 60%Pasifika 47% 42% 62% 62%Aged under 25 yrs 56% 56% 68% 63%There were improvements in the rate of qualification completions in allthree priority learner groups in 2012. Pasifika learners’ achievementjumped by a very significant 20 percent in this performance indicator, andall three groups moved towards parity in attainment.Overall, the improvements in course and qualification completions for allthree priority groups tell the story of the successes we are having withthese groups. Our strategy of working in partnership with communitygroups, iwi, secondary schools, employers, social support services,and other key stakeholders ensures there is a vital context for learnersfrom the priority groups to succeed. We will continue to strengthen theserelationships so we can support these learners to even greater success.32 | WELLINGTON INSTITUTE OF TECHNOLOGY21

Scholarship recognisescommitmentBachelor of Creative Technologies student DeidreUtupo was one of more than 50 recipients of WelTecscholarships in 2012. Deidre was awarded a CouncilPasifika Scholarship, which is awarded to studentswho demonstrate a genuine desire to succeed in theirchosen field of study. Applicants must demonstratehow their study will contribute to Pasifika communitydevelopment in New Zealand.Of Samoan heritage, Deidre grew up in New Zealandbut returned from the Gold Coast, where she hadmoved with her parents, to study digital media atWelTec. She liked the style of learning, tutor andstudent support and applied approach to WelTec’screative technologies degree. She says WelTec alsohas a fantastic reputation in the digital media industry- both in New Zealand and overseas.Deidre achieved excellent academic results in her firstyear of study and when she completes her degree sheplans to have her own digital media business.2012 ANNUAL REPORT | 33

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ResearchFor the first time in 2012 WelTec entered thePerformance Based Research Fund.This was a significant undertaking by the Institution assisting staff to prepareevidence portfolios for submission to the Tertiary Education Commission.17 portfolios were submitted mid-year which were then assessed throughoutthe balance of 2012 by the various subject panels. Results are availableApril 2013.In 2012 we continued to build on the distinctive characteristics of our appliedproblem-based research approach. Our focus continued to be on workingclosely with business and industry, especially small and medium sizedbusinesses, to develop and deliver creative, technology and knowledgebasedsolutions that meet specific needs. This research makes a directcontribution to smaller businesses, their productivity and their contributionto economic development.WelTec’s unique research culture fosters industry partnerships and anunderstanding of business needs. This approach is illustrated in thefollowing profiles on WelTec researchers whose work is showcased here.Their research work also benefits WelTec students and contributes to ourteaching and learning practice. WelTec’s approach to research deliversbenefits for students, contributes to our industry partners and offersprofessional and academic development for staff.Further information on research undertaken by WelTec is outlined in our2012 Annual Research Report.www.weltec.ac.nz/Portals/0/pdfs/2012-Research-Report_Web.pdfTony DeGoldi2012 ANNUAL REPORT | 35

36 | WELLINGTON INSTITUTE OF TECHNOLOGYJoany Grima

A Great Year for ResearchOur research in 2012 coveredprofessional areas, trades,technology and activities to increasethe productivity of local and nationalbusinesses.Much of our research is aimed at building New Zealand’seconomy, something the Government holds as a priority. Ourongoing involvement in the Ministry of Business, Innovation andEmployment Technology technology transfer voucher programmefurther demonstrates that we have the expertise to help businesseswith economic growth.2012 was our first year in the Performance Based Research Fund.Participating allows us to benchmark ourselves within the sectorand set ourselves increasingly high standards for research into thefuture.It is important that our research informs the teaching of the degreeswe offer. We updated our research policy and established acentrally-managed Research Office in 2012.Here are just a few examples of the exciting and valuable researchbeing done at WelTec. More detail on all the research undertaken atWelTec in 2012 is available in our 2012 Research Report.Research proves success of WelTec diplomaJoany Grima’s two research projects in 2012 put the spotlight onthe Graduate Diploma in Event Management, a programme shehas taught since its introduction in 2010.Half the weighting of the one-year full-time programme is basedon an industry practicum for each student. For her research Joanyapproached practicum hosts to find out about their experienceof having a student working for them. She then looked at theemployability outcomes of graduates to find out if they have beensuccessful in securing employment in the events industry.The results were positive with eighty percent of hosts beingenthusiastic about the practicum experience and one third of hostsgoing on to employ the student.Graduate employability was also excellent, with approximately65 percent of students employed in industry within six months ofcompletion.Working togetherTrish Baker, a researcher in WelTec’s School of Business, continuedher study into cooperative learning in education (group work). Shecontinues to gain important insights on the subject after 12 yearsof investigation and now collaborates with Whitireia researcher, JillClark.Trish and Jill’s research investigates student group work,particularly diverse groups, which include international studentsrepresenting many different ethnic groups. While overseasresearch shows positive outcomes from group work, Trish and Jillhave confirmed that New Zealand teaching staff have often beenunprepared for managing group work so it is beneficial for studentsand ensures academic results that honestly reflect students’ inputand skill. Trish’s research has confirmed that for students to learnthe necessary skills to work well in groups, their teachers need tostructure and support group work properly.Ako Aotearoa, the National Centre for Tertiary Teaching Excellence,has recognised Trish and Jill’s work by commissioning them tocreate a national education programme for tutors to learn how tomake group work effective in teaching.With five published studies in 2010 and 2011, Trish’s researchcontributed to WelTec’s participation in the 2012 PBRF qualityevaluation of research.Researching professional practiceThe subject of WelTec Design Lecturer Tony De Goldi’s research isnearly two decades of his own career in Maori theatre in Aotearoa.As well as looking closely at his contemporary theatre work, Tony’sresearch considers its place in the wider context of New Zealand artand design. Tony then brings this knowledge and awareness backinto his interior design, theatre design and construction teaching atWelTec. In 2012, Tony’s set and costume design for the NBR NewZealand Opera’s production of Jenny McLeod’s opera Hohepawere highly acclaimed for their important contribution to realisingboth the writer’s and director’s vision for the project, as well ascontributing to Tony’s ongoing research.As well as teaching, Tony is now mentoring and inspiring two youngdesigners, both WelTec graduates, as they work on their owntheatre designs. The designers benefit from the 20 years he hascontributed during a formative period in Maori theatre.Reducing industrial wasteSilver Lining, Hutt City Council’s commercial waste reductionproject, is tapping into WelTec’s knowledge, and research intoindustrial waste management.The Silver Lining Project aims to help local businesses to reducewaste to landfill, and to identify long-term reuse and recyclingopportunities. In 2012, Bob Robinson from WelTec’s Centre forSmart Business undertook Silver Lining’s waste scoping studies.The studies researched solutions to reduce, reuse and recyclebusiness waste.Bob, who has a background in manufacturing and is widelyrecognised for his knowledge in resource efficiency andsustainability management, has worked with local body councils forthe last seven years on environmental programmes. He describeshis role as being to research solutions, make connections betweenbusinesses and facilitate waste reduction. Because of the wayWelTec Connect’s Centre for Smart Business works, the SilverLining Project is also building WelTec’s knowledge base, so that itis available to others in the future.2012 ANNUAL REPORT | 37

38 | WELLINGTON INSTITUTE OF TECHNOLOGYMaria Ulloa

Higher LearningWe celebrated with several staff whoachieved higher qualifications thisyear. Our students will benefit fromthe skills and knowledge that thesesuccessful teachers have gained fromtheir research.Dr Maria Ulloa: Teaching to CareMaria Ulloa’s research for her PhD in psychology from MasseyUniversity examined emotional interactions between earlychildhood teachers and preschool children. Called Teachingto Care, the research has not only gained Maria a valuablequalification but has significant implications for pre-schoolers’mental health, educational practice, and policies to protectchildren from risk.Past research has demonstrated that successful teacher-childinteractions in early childhood settings are critical predictors ofmental health, social competence, and academic achievement.Maria’s research, which involved both qualitative and quantitativemeasurement, confirmed this.Maria teaches psychology on WelTec’s counselling, teaching andyouth development programmes, as well as providing teachingsupport for psychology classes on the hospitality programme. Shesays that in completing her PhD she has learned some importantskills that help make her a better teacher.“I have done lots of post-graduate study before, but this was myfirst time of doing only pure research. It has consolidated myknowledge and understanding of psychology and the researchprocess,” says Maria. “And I find that the experience of doingapplied research makes it easier to explain to students. It has alsoreminded me about how it is for them.”This kind of empathy is important for Maria, who joined WelTecin 2011. “I’m impressed with how much pastoral support studentsget. It contributes to their success and makes it a joy to teach here.”Dr James MacKay:We shouldn’t have to do this, we’re girlsJames Mackay’s PhD research project, investigated the effectof gender on the experience of learning electrical concepts for agroup of design and technology teacher trainees at a South AfricanUniversity.James’ research confirmed that for this group of students, gender,more than educational background, was the dominant factor notonly in attitudes towards women in the research group learningelectricity, but also their conceptual understanding on entry intothe course. “It was certainly not a lack of intelligence,” says James.“But rather a belief that electro-technology is the preserve of menand boys and that their identity as ‘girls’ does not include thembeing able to perform electro-technical tasks.“Female students also had lower levels of self-efficacy, and greaterlevels of anxiety compared with male students when faced withperforming electro-technical tasks such as physically wiring andsoldering.”The research showed that improving female students’ self-efficacyin a variety of ways, including developing mastery of electrotechnicalprocesses, meant that they eventually performed as wellas male students on the task.James started his PhD while working at the University of KwaZulu-Natal in Durban, South Africa. He completed it part time whileworking as Quality Teaching Project Leader at WelTec. He saysthe research has direct application to his work. “My experience ofovercoming barriers to learning has helped me design learningprogrammes to support teaching staff with their own and theirstudents’ learning challenges. I want to find ways to make thingsbetter for students at WelTec.”James is planning more research for the future, including looking athow engineering students understand physics concepts, genderand the trades, and use of language in the trades.2012 ANNUAL REPORT | 39

40 | WELLINGTON INSTITUTE OF TECHNOLOGYTamaiti Whangai Team Leader, David Lomax with student

A Supportive Learning EnvironmentWe have a very strong focus onsupporting our students to succeed.It takes a whole team, and that’s whatWelTec is, to make a difference in thelives of our students.Success for MaoriThere is a significant and growing rise in Maori student numbersat WelTec. So we are pleased with what was achieved forMaoristudents at WelTec in 2012 - both in terms of student success butalso in the quality of our relationships with Maori stakeholders. Aswell as student outcome data, further evidence of this success is acomprehensive review and report on current and future strategiesfor Maori achievement at WelTec by Professor Rawiri Taonui, TeAra Poutama – Faculty of Maori Development, AUT – AucklandUniversity of Technology.Support for studentsOur Leaning Commons area provides academic support to allWelTec students. Our staff help students with their individualstudy and learning needs. Several innovations to the service in2012 brought about even great student success. For the firsttime, Learning Commons tutors joined classrooms to team teachwith the subject teacher. Their emphasis was on literacy andnumeracy. As a result, the literacy and numeracy of the studentsin these classes significantly improved and students’ qualificationcompletion increased.We recruited Learning Commons tutors with specific skills sets,such as computer aided design and drawing, as this was whatmany students needed.The implementation of the Moodle learning management systemis a key feature has improved students’ technology-basedlearning experiences. Moodle has allowed us to effectively blendface-to-face time with a variety of technology-enhanced learningresources.Professor Taonui’s report commended our Tamaiti Whangaiprogramme of student support for its iwi-driven nature and forthe effectiveness of its mentor model. He said that what TamaitiWhangai does is quite remarkable, all the more so for having harddata to prove its value.Tamaiti Whangai was established in 2008. We work closely withour partner, Te Runanganui o Taranaki to support the achievementof their vision for Maori education. In 2012, Tamaiti Whangaiincreased its reach across all our programmes.Tamaiti Whangai mentors provide support to Maori students onkaupapa Maori principles, looking at the ‘whole’ student andensuring each individual gets the mentoring and pastoral supportthey need to achieve. Tamaiti Whangai also works with ourteaching staff so they are part of a supportive environment andcan be better teachers for Maori students.Tamaiti Whangai also administers a number of Maori scholarships,for which there was a very high pass rate in 2012. The WelTecWarriors Under 19 League team, a hit with many Maori students,also did well.Professor Taonui made a number of recommendations that westarted to put into place in 2012. Initial steps include establishinga senior Maori advisory position on our Executive ManagementTeam to be the Runanga’s representative in 2013. This will providea Maori perspective and Te Ati Awa view to our work – fundamentalto our Treaty partnership relationship. Additional Tamaiti Whangaimentors plus a new position of Tamaiti Whangai Team Leaderwere put in place.2012 ANNUAL REPORT | 41

42 | WELLINGTON INSTITUTE OF TECHNOLOGYWelTec Connect’s Andrew Rodger with the YouBike TM

WelTec Connect in 2012In its second year of operation WelTecConnect Ltd (WCL) expanded its work withindustry in research and development,technology transfer and capabilitydevelopment.This approach typifies the way that WelTec works with businesses, whichbenefit from our help with developing products, processes and skills. Inturn, we gain a growing number of industry-led projects for students andstaff, collaboration opportunities and income.There were many highlights in 2012 including a wide variety of industry-ledstudent projects ranging from specialist machinery to software developmentto market research.We played a central role in developing the prototypes of the uniqueYouBike TM and getting it ready for market. YouBike TM is a unique product tohelp people living with disabilities or injuries to exercise safely, easily andeffectively. Successfully launched at the prestigious REHACARE exhibitionin Dusseldorf in October 2012 and now finding markets around the world,the lightweight construction and advanced design of the YouBike TM fills agap and showcases WCL’s capabities.Hutt City Council contracted us to work with several local businesses onprojects and collaborations to reduce the amount of waste sent to landfill.The work has really made a difference and will continue.We facilitated another successful workshop, delivered by WelTec staff,at Cyberport Hong Kong. Cyberport is a large-scale creative digitalcommunity that nurtures technology start-ups and entrepreneurs. Theworkshop, on the creative technology process in three-dimensional depthsensing interactivity, gained high praise from Cyberport as well as thosewho attended.We worked with Lean Group Consulting, Training New Zealand and GrowWellington to deliver the Competitive Edge lean manufacturing programmeto six local businesses. The programme as has been successful in deliveringproductivity improvements.2012 ANNUAL REPORT | 43

Staff attend WelTec Day in the Student Hub44 | WELLINGTON INSTITUTE OF TECHNOLOGY

Our PeopleWe continued to invest in a range ofdevelopment activities and health andwellness initiatives to support thewell-being and capability of our staff.New capability unit establishedA new Capability Development Unit, which will support teaching staff to evengreater levels of educational practice, was established for the start of 2013.Priorities for the new unit are the development of an induction process for newacademic staff; delivery of the new Diploma of Tertiary Teaching and Learning(DTLT) teaching qualification and later a higher teaching qualification; ongoingdevelopment of processes to ensure that leadership, customer service andtraining for managers is in place to support teaching staff.Health, safety and wellnessWe are proud of our excellent safety record. ACC confirmed that our healthand safety performance is above average compared with comparableorganisations. Given the wide range of industries on campus, this isa significant achievement. We place a high priority on health and safetyand continue to review systems and processes, and delivery training andcommunication. We have set more specific objectives, using targets toensure ongoing improvement.We continued with our staff wellness programmes in 2012. These are valuedby staff, who make good use of the opportunities. As well as an employeeassistance programme and a range of occupational health initiatives, wehave an active social club with high membership and participation.Staff awardsWelTec recognised and celebrated excellence. The staff awards for 2012 werefor excellence in research, leadership, customer service. We also rewardteam success and achievement. As well as acknowledging achievement,demonstration of WelTec’s values is an important criterion for awards.Internal communicationsIn 2012 we developed an internal communications strategy, which aims toincrease two-way face-to-face communication with staff across WelTec.The strategy was developed with input from staff and emphasises the roleof managers and team leaders in communications.2012 ANNUAL REPORT | 45

Our EnvironmentWe are proud to have maintained ourEnviro-Mark® NZ Gold status in 2012and have taken further steps to helpreduce our impact on the environment.We believe that even small improvements make a big difference.Introducing microfibre cleaning technology at both Church Streetand Petone campuses helped reduce our use of chemicals. Joininga light bulb recycling plan and replacing all our bulbs to ones that lastup to 400 percent longer further reduced our waste to landfill.We continued to act on advice from our energy managementcompany, which identified incremental savings we could make. In2012 this included changing our energy supplier to take advantageof the first all-of-government supply agreement. We ensured thatthe new hospitality facility in Wellington has built in energy efficiencyfeatures.We continued to work with Greater Wellington Regional Council ontravel initiatives and the bus service between Porirua and Petoneachieved critical mass in 2012.We continued with our seismic strengthening programme with asignificant work program in 2012. This included strengthening CBlock and replacement of the roof on A Block. Work on the T Blockcafé and Learning Commons area and the stairwells in T Block andChurch Street was approved to go ahead in 2013 and the Councilapproved a re-allocation of $2.55 million of capital funding from the2012 budget to undertake this work.Student contributes tosustainabilityVictoria Walch, a Bachelor of Engineering Technologygraduate in 2012, majored in civil engineering andcompleted a project on raw water management of theWaiwhetu stream in the Hutt Valley for her degree. Victoriais looking forward to a career in civil engineering.Seismic strengthening in C Block46 | WELLINGTON INSTITUTE OF TECHNOLOGY

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National winnerHairdressing student Roha Garland secured awin in the national hairdressing competitions in2012. Roha placed first in the novice categoryof the Editorial Stylist of the Year section ofthe New Zealand Association of RegisteredHairdressers Editorial Photographic Awards.The competition required the stylist to createhairstyle, make-up and clothing on a model oftheir choice, and submit a photographic imagesuitable for a magazine cover.Roha was flown to Auckland to receive heraward and trophy where she enjoyed thechance to network and learn about theindustry.After first studying make-up artistry at WelTecin 2010 Roha worked in the film industry.She discovered that employers were lookingfor stylists capable of achieving a wholefashion statement on one model, rather thanspecialising in just one aspect. So she returnedto WelTec to add hairdressing to her skills.48 | WELLINGTON INSTITUTE OF TECHNOLOGY

Statement of Objectives and Service PerformanceInvestment Plan Performance CommitmentsWelTec has agreed to use the following Key performanceIndicators and Targets to measure its performance over the threeyears of the 2011 to 2013 Investment Plan.Measures for SAC 1 funded business: SAC and Youth Guarantee Funded provisionPriority Groups – ParticipationActual 2011 Target 2012 Actual 2012Proportion Maori 18% 17% 19%Levels 1 - 3 8% 6% 9%Levels 4 and above 11% 11% 10%Proportion Pasifika 10.1% 9.6% 10.8%Levels 1 - 3 4.5% 2.3% 4.3%Levels 4 and above 5.6% 7.3% 6.6%Proportion aged under 25 63% 61% 64%Levels 1 - 3 21% 17% 22%Levels 4 and above 42% 44% 42%2011 result reported by TECEducational PerformanceActual 2011 Target 2012 Actual 20121 Includes Youth GuaranteesWeighted course completions 76% 79% 81%Levels 1 - 3 72% 73% 79%Levels 4 and above 78% 85% 82%Weighted qualification completions 62% 68% 69%Levels 1 - 3 63% 66% 73%Levels 4 and above 62% 70% 68%Student retention 65% 54% 66%Student progression (levels 1 – 3) 40% 40% 40% 2PRIORITY GROUPS - MAORI LEARNERSWeighted course completions 68% 74% 76%Levels 1 - 3 66% 70% 74%Levels 4 and above 70% 78% 78%Weighted qualification completions 51% 65% 60%Levels 1 - 3 57% 60% 65%Levels 4 and above 48% 70% 56%PRIORITY GROUPS - PASIFIKA LEARNERS 60% 61% 63%Weighted course completions 65% 70% 76%Levels 1 - 3 64% 70% 76%Levels 4 and above 66% 70% 76%2 Result is based on data collated by TEC. in 2012 was 40%Table continues over page >2012 ANNUAL REPORT | 49

Educational PerformanceActual 2011 Target 2012 Actual 2012Weighted qualification completions 42% 62% 62%Levels 1 - 3 52% 60% 67%Levels 4 and above 35% 64% 59%PRIORITY GROUPS - LEARNERS AGED UNDER 25 60% 61% 63%Weighted course completions 75% 78% 80%Levels 1 - 3 71% 73% 80%Levels 4 and above 77% 77% 80%Weighted qualification completions 56% 68% 63%Levels 1 - 3 60% 66% 73%Levels 4 and above 55% 70% 58%Student indicatorsActual 2011 Target 2012 Actual 2012Student satisfaction 90% 97% 94%Maori 95% 98% 97%Pasifika 95% 94% 96%Under 25s 91% 94% 95%Measures for International BusinessParticipationActual 2011 Target 2012 Actual 2012Number EFTS achieved 305 400 347Weighted course completions 84% 83% 89%Weighted qualification completions 87% 68% 82%Student satisfaction 84% 98% 94%Whole of organisation indicatorsRelevanceActual 2011 Target 2012 Actual 2012Proportion graduates gaining employment or going70% (an additional 29%on to further study 3 were work ready)90%66% (an additional 32%were work ready)Relevant qualifications 4 90% 100% 88%Work readiness of WelTec graduates 5 89% 98% 93%Programme PortfolioThe proportion of course EFTS at levels 1 to 3 thathave embedded literacy and numeracyProportion of programme portfolio invocationally-related education and/or training96% 95% 97%100% 100% 100%Proportion of portfolio endorsed by industryIndustry input is acomponent for allProgrammes during theApproval process100%Industry input is acomponent for allProgrammes during theApproval processProportion of portfolio in programmes that lead to aqualification on the national qualifications framework 6 100% 100% 100%3 As assessed by annual graduate destination survey4 As assessed by annual Employer Satisfaction Survey5 As assessed by annual Employer Satisfaction Survey6 Based on qualifications registered under new criteria established in 201050 | WELLINGTON INSTITUTE OF TECHNOLOGY

Research and technology transferActual 2011 Target 2012 Actual 2012Number of research outputs – Total 197 250 217- Industry related 59 45 88- Quality assured 68 85 105- Weighted points 366 370 365Number of technology transfer activities completed 54 60 58External revenue gained(Research contracts and PBRF income) ($,000)$525 $860 $435Financial performanceActual 2011 Target 2012 Actual 2012Proportion of SAC funding achieved 104% 100% 100%Total EFTS achieved 4,669 4,516 4,401- SAC # 3,175 3,006 3,091- International 305 400 347- ITO 611 600 433- Youth *481(108 YG77 TA295 STAR)450(110 YG100 TA250 STAR)473(103 YG91 TA279 STAR)- Full fees 97 50 57ACE (Adult and Community Education) 50 48 52Risk rating against Financial Monitoring Framework Low Low LowExtent of improvements in Attributes as per CAMSImprovement PlanCAMS technicalsolution implementedDescription of assetsimprovement planunderway andasset informationimprovement is ontrack.As agreed with TECAsset informationimprovement plan 78%complete.# Includes SAC and ACE but not Youth Guarantee* STAR, Trades Academy, Youth Guarantees2012 ANNUAL REPORT | 51

Business Plan PerformanceOur Business Plan for 2012 continuedto focus on the key strategic challengeswe identified in our 2011 to 2013Investment Plan.CHALLENGE 2:Growing international students and revenueWe achieved 347.6 international student EFTS, representing 14percent growth on 2011. This is an excellent result as nationally theinternational student market remained tight in 2012.2012 Priorities• Recruiting students for successProgress was made on opportunities that are likely to increase ourstudent numbers in the future. An agreement was signed with GuangxiPolytechnic of Construction in China for graduates of selected civil• Supporting students to achieveengineering and creative technologies (interior design) 1 programmes• Making efficient use of facilities, equipment and resourcesto progress into programmes at WelTec, including the New Zealandto support learners’ achievementDiploma in Engineering. We also started work with Whitireia on• Delivering high quality research innovation and technologypromotion into the Middle East and South East Asia that will havetransfer that informs teachingfuture benefits.• Maintaining a positive institutional profileInternational student educational performance exceeded expectations,• Delivering ongoing financial sustainabilitywith a completion rate of 89 percent - more than six percent over theWe had a successful year on many fronts.target of 83 percent.100 percent of SAC funding was achieved, a prerequisite for additionalCHALLENGE 3:Priority Trades and Pasifika scholarship funding. Financially, ourparent operating profit of $1.6m exceeded budget by $0.1m,Developing Campuses to Support Future Deliveryrepresenting a healthy 2.9 percent return. This is a satisfying result The completion of three levels of the new $13m campus for ourgiven the changing government funding and policy settings and School of Hospitality alongside Le Cordon Bleu NZ in Wellington’scontinued uncertainty as business began to emerge from the impact Cuba Street was a highlight representing more than 2 years ofof the global recession.planning and construction spanning twenty months. The newcampus is a state of the art facility which can accommodate up toCHALLENGE 1:540 students at any one time with a maximum of 700 students whenthe final level is developed. The Prime Minister launched Le CordonGrowing commercial andBleu NZ at a function hosted by the President of Le Cordon Bleu at anon-government revenuefunction in September. This was followed by the Minister for TertiaryGrowth from commercial revenue streams via our 100 percent owned Education, Skills and Employment, the Hon Steven Joyce launchingsubsidiary WelTec Connect Limited, progressed during the year with a the Wellington Institute of Technology School of Hospitality on 24number of contracts in different stages of negotiation. In the financial October 2012 at an evening event attended by Wellington’s hospitalityclimate gaining commitment from clients to projects was difficult. industry and secondary schools.It has been our experience that the lead time from first discussions WelTec worked with the Hutt City Council (HCC) in developingwith clients to delivering a finalised contract is significantly longer a proposed change to the HCC District Plan (Plan Change 25). Ifthan planned. As a consequence the total revenue from commercial approved, this plan change will create a Tertiary Education Precinctrevenue and research contracts of almost $800k was not as high for WelTec’s Petone campus. At present education is not a permittedas we planned for the year. To address this WelTec Connect has activity for the various zonings that relate to the Petone campus.broadened its business development activity to bring in more clients A hearing has been convened by HCC in front of independentand structure projects in a way that ensures they can be achieved in Commissioners in early April 2013 to receive submissions in relationa shorter timeframe.to the proposed plan change.Our investment in the Le Cordon Bleu NZ partnership also contributed The Auckland campus was refurbished after a review of options forto this goal.Auckland delivery confirmed that the existing site is the best option inthe medium term.As part of the Students First strategic partnership, a WelTec andWhitireia joint campus development strategy was completed in 2012.The Strategy sets the framework and approach to campusdevelopment for WelTec and Whitireia for the next 5 years. Changeto N Block at Petone campus and satellite delivery areas was put onhold whilst the strategy was developed resulting in Property, Plant andEquipment expenditure being below budget.1 This figure represents the total investment. WelTec’s share was $7M.52 | WELLINGTON INSTITUTE OF TECHNOLOGY

WelTec took a proactive approach to seismic strengthening at itscampuses. The building programme to ensure buildings meet or exceedbuilding standards continued into 2012. Stage 1 of WelTec’s seismicstrengthening programme at the Petone campus was completedin February 2012 with the installation of a new light-weight roof for ABlock and strengthening of level 3 of C Block. The Council approvedexpenditure of $2.55m for Stage 2 for strengthening of levels 1 and 2of C Block and on parts of T Block. Whilst the C Block strengtheningwork was undertaken the opportunity was taken for a general upgradeto this building.CHALLENGE 4:Managing financial assets to ensure sustainabilityWelTec’s core business exceeded budgeted levels in 2012. Central tothe achievement of this result was the delivery of 100 percent of coreInvestment Plan SAC funding. Achieving this threshold, combinedwith delivering 133 additional trades training EFTS compared to 2011,allowed WelTec to recognise additional Priority Trades and Pasifikatrades funding.WelTec was again awarded a low risk rating by the TEC against theFinancial Monitoring Framework.The following table provides a summary of our EFTS achieved.PERFORMANCE2012 Target 2012 ActualProportion of SAC funding achieved 100% 100%Total EFTS achieved 4,516 4,401In March the Council gave approval for WelTec and Whitireia tojointly acquire the assets and revenue streams associated with theliquidated Private Training Establishment (PTE) Computer Power.Now rebranded as Computer Power Plus the financial results for thenine months to December achieved a positive financial contribution.We have plans to further improve the financial and educationalperformance of this joint venture in 2013.CHALLENGE 5:Assisting Maori, Pasifika and young people toachieve in tertiary educationParticipation by Maori, Pasifika and people under 25 largelyexceeded our targets. Overall course completion rates for thesegroups exceeded our 2012 Investment Plan targets and significantlyimproved on 2011’s results.We continued to monitor student performance closely and work withthose at risk through a range of pastoral and educational supportprogrammes including targeted mentoring and numeracy andliteracy support.A Youth Strategy to improve the educational performance for under-25s was approved in 2012. Key activities from the strategy havebeen included in the 2013-15 Investment Plan. A report on MaoriSuccess at WelTec endorsed Tamaiti Whangai and we resolved toadd more resources to this successful initiative.The following table shows the proportion of Maori, Pasifika and youthstudying at WelTec. These exceed the local population demographicfor these groups.SAC (includes ACE) 3,006 3,091International 400 347PRIORITY GROUPS – PARTICIPATION(SAC AND YOUTH GUARANTEE)2012 Target 2012 ActualITO 600 433Youth450(110 YG100 TA250 STAR)473(103 YG91 TA279 STAR)Full fees 50 57Our subsidiary, WelTec Connect Limited, did not met the financialcontribution budgeted. 2012 was the second year of operations forWelTec Connect and the lessons learned during the year have beenincorporated into the 2013 business plan for this subsidiary.Le Cordon Bleu NZ started delivery during the year, a significantmilestone. Student numbers and core business financial resultsreached the business case target levels.Proportion Maori 17% 19%• Levels 1 - 3 6% 9%• Levels 4 and above 11% 10%Proportion Pasifika 9.6% 10.8%• Levels 1 - 3 2.3% 4.3%• Levels 4 and above 7.3% 6.6%Proportion aged under 25 61% 64%• Levels 1 - 3 17% 22%• Levels 4 and above 44% 42%Financial and capital management continued to be improved duringthe year with the implementation and development of Technology OneEnterprise Budgeting and Asset Management modules. This resultedin the Asset Information Improvement Plan being 78% complete byyear end which provides a sound base for future asset replacementcycles. The combined functionality of these new modules improvedthe transparency of our operational planning and directly contributedto WelTec maintaining a ‘low’ financial risk rating with the TEC.2012 ANNUAL REPORT | 53

Business Plan PerformanceCHALLENGE 6:Raising educational performanceCourse completion figures were an improvement on 2011 at 81percent for the SAC and Youth Guarantee funded cohort, exceedingthe Investment Plan target of 79 percent. Significant improvementsoccurred at all levels, with dramatic improvements for Maori andPacific Island students. We closely analysed student data to betterunderstand changes over the last three years as well as progressinginitiatives to improve educational performance.EDUCATIONAL PERFORMANCE2012 Target 2012 ActualWeighted course completions 79% 81%• Levels 1 - 3 73% 79%• Levels 4 and above 85% 82%Weighted qualification completions 68% 69%• Levels 1 - 3 66% 73%• Levels 4 and above 70% 68%Student retention 54% 66%Student progression (levels 1 – 3) 40% 40%*PRIORITY GROUPS - MAORI LEARNERSWeighted course completions74% 76%• Levels 1 - 3 70% 74%• Levels 4 and above 78% 78%Weighted qualification completions 65% 60%• Levels 1 - 3 60% 65%• Levels 4 and above 70% 56%PRIORITY GROUPS - PASIFIKA LEARNERSWeighted course completions70% 76%• Levels 1 - 3 70% 76%• Levels 4 and above 70% 76%Weighted qualification completions 62% 62%• Levels 1 - 3 60% 67%• Levels 4 and above 64% 59%PRIORITY GROUPS - UNDER 25 LEARNERSWeighted course completions78% 80%• Levels 1 - 3 73% 80%• Levels 4 and above 77% 80%Weighted qualification completions 68% 63%• Levels 1 - 3 66% 73%• Levels 4 and above 70% 58%* 2011 result reported in 2012CHALLENGE 7:Maintaining a centre of excellence in trades andtechnology and ensuring programme delivery issustainableWelTec collaborated with Whitireia in the delivery of carpentryprogrammes at Kapiti College and Otaki in response to the Governmentfocus on Priority Trades and a clearly identified need for more tertiarytraining opportunities for local youth. We received strong local supportfor these initiatives from Grow Wellington, The Otaki Clean TechnologyCentre, Little Greenie green building foundation and Kapiti CoastDistrict Council.We also continued delivery of Level 2 introductory constructiontraining in the Wairarapa through a redesigned multi-trades offeringin partnership with Nga Kanohi Marae o Wairarapa, a local maraeconsortium trust focused on providing training, employment and lifeskills opportunities for youth. Enrolment, retention and completion ratesin this programme increased by 30 percent overall from the previousyear with the majority of students re-enrolling on the first offering of aLevel 3 Wairarapa carpentry programme.The Government prioritised funding for construction trades and to allowfees-free places for Pasifika students in the trades. The scholarshipinitiative attracted a high level of interest and competition for places onprogrammes which subsequently achieved excellent student successrates. The goals of these programmes were achieved by WelTec withthe support of local communities. The relatively low rate of funding forthese programmes does not recognise the capital investment requiredfor delivery resulted in significant pressure on Schools to meet theirfinancial objectives.Enrolments in Information Technology were again high in 2012representing a 25 percent year on year improvement.CHALLENGE 8:Developing a unique WelTec delivery style thatincorporates face-to-face and technologyfacilitatedlearning to assist achievementThe implementation of the Moodle Learning Management System,which commenced in 2012, is a key initiative that has directly impactedon our students’ technology-based learning experiences. This yearwe have tactically deployed education technologies in ways that arecustomised for particular teaching and learning situations. An exampleof this has been the collaborative work streams that the Bachelor ofEngineering Technology staff have engaged in using a shared Moodlespace, as well as their use of Adobe Connect technology to provideat-distance and blended learning opportunities.WelTec has made significant progress toward the achievement ofoptimally balanced learning facilitation; highly effective use of face-tofacetutor-facilitated learning time, blended with a variety of innovativetechnology-enhanced learning resources offering a stimulating andengaging learning experience for our students.Recognising that our students are often engaged in learning that isboth technically sophisticated and academically challenging led us toensure that we can provide appropriate levels of learning support tomeet these students’ needs. Learning Commons tutors with specific54 | WELLINGTON INSTITUTE OF TECHNOLOGY

skills sets were recruited during 2012 to provide expert assistancein areas such as CAD (computer-aided design), technical drawing,and mathematics and physics. Utilising a targeted approach ofsupporting students’ learning needs in specific programme areasand courses resulted in significant improvement in student successrates in areas that are often very challenging for our learners.Focus area: Professional staff2012 was the first year of the Diploma in Tertiary Learning andTeaching, a collaboration between WelTec and CPIT. The Level 6workplace-based programme helps tertiary teachers develop theskills and strategies needed to excel as a tertiary educator in the 21stcentury. Thirty-four staff studied on the programme in 2012.A review of the faculty management structure in 2012 resulted in thedecision to combine two faculties into one. The principles for thatchange were to lift programme and teaching performance so thatthey are consistently high across WelTec; increase collaboration;better define management roles; streamline systems and processesand ensure we are in the best position to take advantage of businessopportunities. This resulted in a new structure and changes to anumber of roles.2012 FTEs exceeded budget by 3%. This was a result of taking onmore administration staff to improve internal systems. In late 2012the decision was taken to restructure administration staffing in someareas. The full implementation of the reduction in numbers will not beevident until 2013.Focus area: High quality research, innovation and technologytransfer activities that inform teachingThis was the first year of our involvement in the PerformanceBased Research Fund (PBRF). The application process metTEC requirements, with 17 evidence portfolios submitted by ourresearchers. To support the process we revised our ResearchCommittee terms of reference and research policies.RESEARCH ANDTECHNOLOGY TRANSFER2012 Target 2012 ActualNumber of research outputs – Total 250 217• Industry related 45 88• Quality assured 85 105• Weighted points 370 365Number of technology transferactivities completedExternal revenue gained (Researchontracts and PBRF income) (000)60 58$860k $435kSTAFFING2012 Target 2012 ActualTotal FTEs (Full time Staff Equivalents) 430 444Academic FTEs 220 218Administration FTEs 210 226Academic: Administration FTE 1.05:1 0.96:1EFTS: Academic FTE 22:1 20:1EFTS: Administration FTE 22.6:1 19.5:1Focus area: Effective and efficient administration systemsWe made progress on our operational performance with improvementsto a number of student administrative processes. The results processwas redefined and implemented. The timetabling process redesignhighlighted the need to implement a whole new approach to facultyplanning, which is being explored in 2013. Many incrementalimprovements were made to the student enrolment processes. Weworked with Whitireia on many of these process improvements toboth benefit from their experience and ensure a consistent approach.Substantial progress was made on developing and implementingour Joint Shared Services Strategy with Whitireia. A Joint SharedServices Centre was established, incorporating procurement, vendormanagement and IT services. The Ministry of Business Innovationand Employment supported the concept of the shared servicescentre which is being set up as a 50/50 unincorporated joint venturereporting to a management committee and headed by a GeneralManager from 2013.2012 ANNUAL REPORT | 55

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Financial StatementsStatement of Comprehensive IncomeStatement of Changes in EquityBalance SheetCash Flow StatementNotes to the Financial Statements2012 ANNUAL REPORT | 57

Statement of Comprehensive IncomeFor the year ended 31 December 2012GROUPPARENTNote2012 Actual$0002012 Budget$0002011 Actual$0002012 Actual$0002012 Budget$0002011 Actual$000Operating IncomeGovernment Funding 2 30,229 30,698 28,988 29,980 30,449 28,642Tuition Funding 3 17,739 18,540 16,392 17,739 18,540 16,392Other Teaching 4 3,133 2,863 4,126 3,133 2,863 3,744Other Income 5 3,847 3,140 3,080 3,312 2,189 2,935Total Operating Income 54,948 55,241 52,586 54,164 54,041 51,713Cost of ServicesPersonnel 6 31,120 30,917 29,882 30,555 30,447 29,441Teaching Delivery 4,925 4,884 3,477 4,803 4,788 3,399Administration 7 6,850 6,519 7,040 6,380 6,059 6,617Infrastructure 8 5,804 5,803 5,109 5,776 5,779 5,063Interest, Depreciation & Amortisation 9 5,065 5,485 5,248 5,063 5,485 5,248Total Cost of Services 53,764 53,608 50,756 52,577 52,558 49,768Operating Profit 1,184 1,633 1,830 1,587 1,483 1,945Non Operating Items income/(expense) 10 (807) (557) 1,247 (807) (557) 1,247Share of associates profit/(loss) 14 (692) (777) (312) - - -Profit (315) 299 2,765 780 926 3,192Other Comprehensive Income(Loss)/gain on property revaluation 24 (139) - 1,417 (139) - 1,417Total comprehensive income (454) 299 4,182 641 926 4,609The accompanying notes form part of these financial statements58 | WELLINGTON INSTITUTE OF TECHNOLOGY

Statement of Changes in EquityFor the year ended 31 December 2012GROUPPARENTNote2012 Actual$0002012 Budget$0002011Actual$0002012 Actual$0002012 Budget$0002011 Actual$000Balance at 1 January 73,224 71,648 68,642 73,789 72,226 68,780Comprehensive income(Loss)/profit for the year (315) 299 2,765 780 926 3,192Other comprehensive income (139) - 1,417 (139) - 1,417Total comprehensive income (454) 299 4,182 641 926 4,609Equity transactionsCrown equity injection 22 - - 400 - - 400Total non-comprehensive income items - - 400 - - 400Balance at 31 December 72,770 71,947 73,224 74,430 73,152 73,789The accompanying notes form part of these financial statements2012 ANNUAL REPORT | 59

Balance SheetAs at 31 December 2012GROUPPARENTNote2012 Actual$0002012 Budget$0002011 Actual$0002012 Actual$0002012 Budget$0002011 Actual$000Current assetsCash and cash equivalents 25 8,711 8,071 16,214 8,495 8,036 16,181Trade and other receivables 11 7,166 7,868 7,215 6,878 7,811 7,318Inventory 12 17 91 306 17 91 306Prepayments 7 - 12 7 - 12Other financial assets 15 3,500 - - 3,500 -Total current assets 19,401 16,030 23,747 18,897 15,938 23,817Non current assetsInvestment in subsidiary 13 - - - 4,281 3,150 -Investment in associate & jointlycontrolled entities14 2,148 1,923 2,700 140 - -Other financial assets 15 14 - - 14 - 3,150Property, plant and equipment 16 64,459 68,107 60,139 64,449 68,107 60,139Intangible assets 17 940 1,260 1,117 804 1,260 1,106Total non current assets 67,561 71,290 63,956 69,688 72,517 64,395Total assets 86,962 87,320 87,703 88,585 88,455 88,212Current liabilitiesTrade and other payables 18 5,222 4,909 5,314 5,208 4,879 5,284Employee benefits 20 3,167 3,054 2,842 3,144 3,014 2,816Income in advance 19 5,551 7,205 6,083 5,551 7,205 6,083Total current liabilities 13,940 15,168 14,239 13,903 15,098 14,183Non current liabilitiesProvisions 21 248 201 236 248 201 236Other 4 4 4 4 4 4Total non current liabilities 252 205 240 252 205 240Total liabilities 14,192 15,373 14,479 14,155 15,303 14,423Net assets 72,770 71,947 73,224 74,430 73,152 73,789EquityCrown equity 22 39,332 39,332 39,332 39,332 39,332 39,332Retained earnings 23 9,332 9,203 9,647 10,992 10,408 10,212Reserves 24 24,106 23,412 24,245 24,106 23,412 24,245Total equity 72,770 71,947 73,224 74,430 73,152 73,789The accompanying notes form part of these financial statements60 | WELLINGTON INSTITUTE OF TECHNOLOGY

Cash Flow StatementFor the year ended 31 December 2012GROUPPARENTNote2012 Actual$0002012 Budget$0002011 Actual$0002012 Actual$0002012 Budget$0002011 Actual$000Cash flows from operating activitiesReceipts from customers 54,622 54,971 50,875 54,588 53,438 50,177Interest received 729 510 700 729 510 845Payments to suppliers and employees (49,522) (48,499) (45,390) (48,191) (46,968) (44,888)GST (net) (196) - (328) (176) - (321)Net cash provided by/(used in)operating activities25 5,633 6,982 5,857 6,950 6,980 5,813Cash flows from investing activitiesReceipts from sale of property, plant andequipmentPurchase of property, plant andequipment31 - - 26 - -(9,120) (14,430) (4,052) (9,120) (14,430) (4,052)Purchase of intangible assets (394) (695) (459) (258) (695) (448)Acquisition/roll over of investments (3,653) - - (5,284) - -Net cash provided by/(used in)investing activities(13,136) (15,125) (4,511) (14,636) (15,125) (4,500)Cash flows from financing activitiesProceeds from equity injection - - 400 - - 400Net cash provided by financingactivities- - 400 - - 400Net (decrease)/increase in cash andcash equivalentsCash and cash equivalents at thebeginning of the financial yearCash and cash equivalents at theend of the financial year(7,503) (8,143) 1,746 (7,686) (8,145) 1,71316,214 16,214 14,468 16,181 16,181 14,46825 8,711 8,071 16,214 8,495 8,036 16,181Represented by:Cash at bank and in hand 1,204 1,716 1,714 988 1,681 1,681Term deposits - ASB Bank 2,007 6,355 14,500 2,007 6,355 14,500Term deposits - Westpac 5,500 - - 5,500 - -8,711 8,071 16,214 8,495 8,036 16,181The GST (net) component of operating activities reflects the net GST paid to and received from Inland Revenue. The GST (net) component has beenpresented on a net basis as the gross amounts do not provide meaningful information for financial statement purposes and to be consistent with thepresentation basis of the other primary financial statements.The accompanying notes form part of these financial statements.2012 ANNUAL REPORT | 61

Notes to the Financial Statements1 STATEMENT OF ACCOUNTING POLICIES FOR THE YEARENDED 31 DECEMBER 2012Reporting EntityWellington Institute of Technology (WelTec) is a Crown Entity governedby the Crown Entities Act 2004 and the Education Act 1989. It providesfull-time and part-time tertiary education in New Zealand.WelTec and Group consists of Wellington Institute of Technology andits subsidiary WelTec Connect Limited (100% owned). WelTec ConnectLimited has a 43.15% interest in Le Cordon Bleu New Zealand InstituteLimited Partnership which is equity accounted. WelTec also has a 50%interest in Cybus an unincorporated joint venture, and a 50% interestin Computer Power Plus another unincorporated joint venture, both ofwhich are equity accounted into the Group financial statements.The financial statements of WelTec and Group for the year ended31 December 2012 were authorised for issue in accordance with aresolution of the councillors on 29 April 2013.Basis of PreparationStatement of ComplianceThe financial statements have been prepared in accordance withgenerally accepted accounting practice in New Zealand, and therequirements of the Crown Entities Act 2004 and the Education Act1989. Wellington Institute of Technology and the Group is a publicbenefit entity for the purpose of complying with generally acceptedaccounting practice in New Zealand.These financial statements have been prepared in accordance withNZ GAAP as appropriate for public benefit entities and they complywith NZ IFRS.Measurement baseThe financial statements have been prepared on a historical costbasis, except for land, buildings and certain equipment, which havebeen measured at fair value.Functional and presentation currencyThe financial statements are presented in New Zealand dollars andall values are rounded to the nearest thousand dollars ($’000), exceptwhere indicated. Nil values are reflected as a ‘-‘ within these financialstatements.Changes in accounting policiesThere have been no changes in accounting policies from the priorfinancial year.WelTec has adopted the following revisions to accounting standardsduring the financial year:• FRS-44 New Zealand Additional Disclosures and Amendmentsto NZ IFRS to harmonise with IFRS and Australian AccountingStandards (Harmonisation Amendments) – The purposeof the new standard and amendments is to harmonise Australiaand New Zealand’s accounting standards with source IFRSand to eliminate many of the differences between the accountingstandards in each jurisdiction. No presentation or disclosurechanges have been made as a result of adopting this standard in2012.Standards, amendments, and interpretations issued that are not yeteffective and have not been early adopted• NZ IFRS 9 Financial Instruments will eventually replace NZ IAS39 Financial Instruments: Recognition and Measurement.NZ IAS 39 is being replaced in three phases:1. Classification and Measurement2. Impairment Methodology3. Hedge AccountingPhase 1 has been completed and has been published in the newfinancial standard NZ IFRS 9. NZ IFRS 9 uses a single approach todetermine whether a financial asset is measured at amortised cost orfair value, replacing the many different rules in NZ IAS 39. The newapproach is based on how an entity manages its financial assetsand the contractual cash flow characteristics of the financial asset.The financial liability requirements are the same as those in NZ IAS39, except for when an entity elects to designate a financial liabilityat fair value through the profit or loss. The new standard is requiredto be adopted for the year ended 30 June 2016. However, as a newAccounting Standards Framework will apply before this date, there isno certainty when an equivalent standard to NZ IFRS 9 will be appliedby public benefit entities.The Minister of Commerce has approved a new Accounting StandardsFramework (Incorporating a Tier Strategy) developed by the ExternalReporting Board (XRB). Under this framework WelTec will be classifiedas a Tier 1 reporting entity and it will be required to apply full publicsector Public Benefit Entity Accounting Standards (PAS) when theyare developed. The effective date for the new standards is expectedto be for reporting periods beginning on or after 1 July 2014. Thismeans WelTec expects to transition to the new standards in preparingits 31 December 2015 financial statements. As the PAS are still underdevelopment, WelTec is unable to assess the implications of the newAccounting Standards Framework at this time.Due to the change in the Accounting Standards Framework for publicbenefit entities, it is expected that all new NZ IFRS and amendmentsto existing NZ IFRS will not be applicable to public benefit entities.Therefore, the XRB has effectively frozen the financial reportingrequirements for public benefit entities up until the new AccountingStandards Framework is effective. Accordingly, no disclosure has beenmade about new or amended NZ IFRS that exclude public benefitentities from their scope.Significant Accounting PoliciesBasis of consolidationThe Group financial statements are prepared by adding together thelike items of assets, liabilities, equity, income, expenses and cash flowson a line by line basis. All significant intragroup balances, transactions,income, and expenses are eliminated in full on consolidation.SubsidiariesWelTec consolidates in the Group financial statements all entities whereWelTec has the capacity to control the financing and operating policiesof an entity so as to obtain benefits from the activities of the entity.Investments in subsidiaries are carried at cost in the WelTec parententity financial statements.62 | WELLINGTON INSTITUTE OF TECHNOLOGY

AssociateWelTec’s associate investment is accounted for in the Group financialstatements using the equity method. An associate is an entity overwhich WelTec has significant influence and that is neither a subsidiarynor an interest in a joint venture. The investment in an associate isinitially recognised at cost and the carrying amount is increased ordecreased to recognise the Group’s share of the profit or loss of theassociate after the date of acquisition. The Group’s share of the profitor loss is recognised in the Group profit or loss. Distributions receivedfrom an associate reduce the carrying amount of the investment in theGroup financial statements.If the share of losses of an associate equals or exceeds an interest inthe associate, the Group discontinues recognising its share of furtherlosses. After the Group’s interest is reduced to zero, additional lossesare provided for, and a liability is recognised, only to the extent thatthe Group has incurred legal or constructive obligations or madepayments on behalf of the associate. If the associate subsequentlyreports profits, the Group will resume recognising its share of thoseprofits only after its share of the profits equals the share of losses notrecognised.Where the Group transacts with an associate, profit or lossesare eliminated to the extent of the Group’s interest in the relevantassociate. Investments in associates are carried at cost in the WelTecparent entity financial statements.Jointly Controlled EntityWelTec’s jointly controlled entity interest is accounted for using theequity method. Investments in jointly controlled entities are initiallyrecognised at cost and the carrying amount is increased or decreasedto recognise the appropriate share of the profit or loss of the jointlycontrolled entity after the date of acquisition. WelTec’s share of theprofit or loss is recognised in the Group profit or loss. Distributionsreceived from a jointly controlled entity reduce the carrying amount ofthe investment in the Group financial statements.If the share of losses of a jointly controlled entity equals or exceedsthe interest in the jointly controlled entity, the Group discontinuesrecognising its share of further losses. After the Group’s interest isreduced to zero, additional losses are provided for, and a liability isrecognised, only to the extent that the Group has incurred legal orconstructive obligations or made payments on behalf of the jointlycontrolled entity. If the jointly controlled entity subsequently reportsprofits, the Group will resume recognising its share of those profits onlyafter its share of the profits equals the share of losses not recognised.Where the Group transacts with a jointly controlled entity, profit orlosses are eliminated to the extent of the Group’s interest in the relevantjointly controlled entity. Investments in a jointly controlled entityare carried at cost in the WelTec parent entity financial statements.Budget FiguresThe budget figures are those approved by the Council at the beginningof the financial year. The budget figures have been prepared inaccordance with NZ GAAP and are consistent with the accountingpolicies adopted by the Council for the preparation of the financialstatements.Cost of ServicesWelTec and Group has presented an analysis of its cost of serviceson the face of the statement of comprehensive income and withinthe notes to the accounts utilising a classification based on theunderlying nature of the expenses.Cash and Cash EquivalentsCash and cash equivalents comprise cash on hand, cash in banksand investments in money market instruments, net of any outstandingbank overdrafts.Employee BenefitsEmployee benefits that are due to be settled within 12 months after theend of the period in which the employee renders the related serviceare measured at nominal values based on accrued entitlements atcurrent rates of pay. These include salaries and wages accrued up tobalance date, annual leave earned but not yet taken at balance dateand sick leave.A liability for sick leave is recognised to the extent that absencesin the coming year are expected to be greater than the sick leaveentitlements earned in the coming year. The amount is calculatedbased on the historical average amount of additional days used bystaff to cover those future absences.A liability and an expense is recognised for bonuses, where there is acontractual obligation.Long term employee entitlementsEmployee benefits that are due to be settled beyond 12 monthsafter the end of the period in which the employee renders the relatedservice, such as long service leave and retirement leave have beencalculated on an actuarial basis. The calculations are based on:• Likely future entitlements accruing to staff, based on years ofservice, years to entitlement, the likelihood that staff will reach thepoint of entitlement, and contractual entitlement information; and• The present value of the estimated future cash flows.Expected future payments are discounted using the official cash rate.The inflation factor is based on the expected long-term increase inremuneration for employees.Presentation of employee entitlementsSick leave, annual leave, long service leave and retirement leaveexpected to be settled within 12 months of balance date are classifiedas a current liability. All other employee entitlements are classified asa non-current liability.EquityEquity, being the difference between total assets and total liabilitiesreflects the Crown’s interest in WelTec and Group. This public equityis disaggregated and classified into a number of reserves to enableclearer identification of the specific uses/sources of accumulatedfunds. The components of equity are:- Crown equity- Retained earnings- ReservesFinancial InstrumentsFinancial instruments arise as a result of the daily operation of WelTecand Group and include: cash and cash equivalents, receivables,payables and non-current liabilities, all recognised in the balancesheet using the concepts of accrual accounting. Revenues andexpenses in relation to all financial instruments are recognised in thestatement of comprehensive income.Foreign Currency TranslationBoth the functional and presentational currency of WelTec and Groupis in New Zealand dollars ($).All foreign exchange currency transactions during the financial yearare brought to account using the exchange rate in effect at the day2012 ANNUAL REPORT | 63

Notes to the Financial Statementsof the transaction. Exchange rate differences are recognised in thestatement of comprehensive income in the period in which they arise.Goods and Services TaxAll items in the financial statements are stated exclusive of goods andservices tax (GST), except for trade and other receivables and tradeand other payables, which are presented on a GST-inclusive basis.Where GST is not recoverable as input tax then it is recognised as partof the related asset or expense.The net amount of GST recoverable from, or payable to InlandRevenue is included as part of receivables or payables in the balancesheet.The net GST paid to, or received from Inland Revenue, including theGST relating to investing and financing activities, is classified as a netoperating cash flow in the statement of cash flows.Commitments and contingencies are disclosed exclusive of GST.Impairment of AssetsAt each balance date, WelTec and Group assesses whether thereis any objective evidence that a financial asset or group of financialassets is impaired. Any impairment losses are recognised in the profitor loss.Loans and receivablesImpairment of a loan or a receivable is established when there isobjective evidence that WelTec and Group will not be able to collectamounts due. Significant financial difficulties of the debtor, probabilitythat the debtor will enter into liquidation or default on payments areconsidered indicators that the asset is impaired.For debtors and other receivables the carrying amount of the asset isreduced through the use of an allowance account, and the amountof the loss is recognised in the profit or loss. When the receivable isuncollectable, it is written off against the allowance account. Overduereceivables that have been renegotiated are reclassified as current(that is, not past due).Other Financial Assets, Property, Plant and EquipmentIf any indication of impairment exists, the recoverable amount of theasset is estimated in order to determine the extent of the impairmentloss (if any). Where the asset does not generate cash flows that areindependent from other assets, the recoverable amount from thecash-generating unit to which the asset belongs is estimated.Recoverable amount is the higher of fair value less costs to sell andvalue in use. In assessing value in use, the estimated future cashflows are discounted to their present value, using a discount rate thatreflects current market assessments of the time value of money.If an asset’s carrying amount exceeds its recoverable amount, the assetis impaired and the carrying amount is written-down to the recoverableamount. For revalued assets the impairment loss is recognised inother comprehensive income to the extent the impairment loss doesnot exceed the amount in the appropriate revaluation reserve. Wherethat results in a debit balance in the revaluation reserve, the balance isrecognised in the profit or loss.For assets not carried at a revalued amount, the total impairment lossis recognised in the profit or loss.The reversal of an impairment loss on a revalued asset is credited toother comprehensive income and increases the applicable revaluationreserve, unless an impairment loss was previously recognised in theprofit or loss, in which case the reversal of the impairment loss is alsorecognised in the profit or loss.For assets not carried at revalued amount the reversal of an impairmentloss is recognised in the profit or loss.Intangible AssetsIntellectual property costsDevelopment costs for new intellectual property internally developedor acquired which have a benefit of more than 1 year have beencapitalised. Such costs are expected to be recovered, and areamortised on a straight-line basis over the period of their expecteduseful lives, being 3 years.SoftwareAll software purchased or created by WelTec and Group which havea benefit of more than 1 year have been capitalised. Such costs areexpected to be recovered, and are amortised on a straight-line basisover the period of their expected useful lives, being 3 years.Assets under constructionCourse development and software assets under construction aretreated as an intangible asset until completion. Upon completion of aproject, the total cost is transferred to the appropriate asset class, atwhich point amortisation begins.InventoriesInventories available for resale are valued at the lower of cost and netrealisable value. Consumables are recorded at cost.InvestmentsInvestments are initially recognised at cost, being the fair value of theconsideration given. After the initial recognition, investments which areclassified as available-for-sale are measured at fair value. Investmentsthat are intended to be held-to-maturity are subsequently measuredat amortised cost using the effective interest method. Amortisedcost is calculated by taking into account any discount or premiumon acquisition, over the period to maturity. Any changes in fair valuethroughout the term of the investment are recognised within thestatement of comprehensive income.Leased AssetsOperating lease payments, where the lessor effectively retainssubstantially all the risks and rewards of ownership of the leaseditems, are recognised as an expense on a straight-line basis over thelease term.PayablesTrade payables and other accounts payable are recognised whenWelTec and Group becomes obliged to make future paymentsresulting from the purchase of goods and services.Other Financial AssetsFinancial assets are initially recognised at fair value. Financial assetsare derecognised when the rights to receive cash flows from thefinancial assets have expired or have been transferred and WelTecand the Group has transferred substantially all the risks and rewardsof ownership.Financial assets are classified into the following categories for thepurposes of measurement:• Loans and receivablesLoans and receivables are non-derivative financial assets with fixedor determinable payments that are not quoted in an active market.Related party receivables that are repayable on demand are classifiedas a non-current asset because repayment of the receivable is notexpected within 12 months of balance date.64 | WELLINGTON INSTITUTE OF TECHNOLOGY

Property, Plant and EquipmentLand and buildingsLand and buildings are measured at fair value. Fair value isdetermined on the basis of an annual independent valuation preparedby registered valuers. Land values are based on discounted cashflows or capitalisation of net income (as appropriate). Buildings arevalued based on depreciated replacement cost. This methodology isan acceptable estimate of fair value due to the lack of market-basedevidence for education delivery purposes.Any revaluation increase arising on the revaluation of land andbuildings is credited to the appropriate revaluation reserve, exceptto the extent that it reverses a revaluation decrease for the sameclass of asset previously recorded as an expense in the statementof comprehensive income, in which case the increase is credited tothe statement of comprehensive income to the extent of the decreasepreviously charged. A decrease in carrying amount arising on therevaluation of land and buildings is charged as an expense in thestatement of comprehensive income to the extent that it exceeds thebalance, if any, held in the asset revaluation reserve.EquipmentEquipment is measured at fair value. Fair value is determined on thebasis of a three yearly independent valuation prepared by registeredvaluers based on discounted cash flows.Any revaluation increase arising on the revaluation of equipmentis credited to the appropriate revaluation reserve, except to theextent that it reverses a revaluation decrease for the same classof asset previously recorded as an expense in the statement ofcomprehensive income, in which case the increase is credited to thestatement of comprehensive income to the extent of the decreasepreviously charged. A decrease in carrying amount arising on therevaluation of equipment is charged as an expense in the statementof comprehensive income to the extent that it exceeds the balance, ifany, held in the asset revaluation reserve.Other property, plant and equipmentAll other property, plant and equipment is recognised as an assetif, and only if, it is probable that future economic benefits or servicepotential associated with the item will flow to WelTec and Group andthe cost of the item can be measured reliably.An item of property, plant and equipment is stated at cost lessaccumulated depreciation and impairment. Cost includes expenditurethat is directly attributable to the acquisition of the item. In the eventthat settlement of all or part of the purchase consideration is deferred,cost is determined by discounting the amounts payable in the futureto their present value as at the date of the acquisition.Assets under constructionAssets under construction are disclosed separately. Upon completion,the asset’s total cost is transferred to the appropriate asset class, atwhich point depreciation begins.DisposalsGains and losses on disposals are determined by comparing thedisposal proceeds with the carrying amount of the asset. Gainsand losses on disposals are reported net in the profit or loss. Whenrevalued assets are sold, the amounts included in revaluation reservesin respect of those assets are transferred to general funds.DepreciationDepreciation has been provided on all property, plant and equipment,excluding land. Depreciation is calculated on a straight-line basis, atrates that expense the assets’ cost (or valuation) to their estimatedresidual values over their useful life.The useful life of each class of asset is as follows:- Buildings 10 - 50 years 2% - 10%- Leasehold improvements 2 - 15 years 7% - 50%- Equipment 3 - 30 years 3% - 33%- Furniture and fittings 5 years 20%- Library collection 5 years 20%- Hardware 3 years 33%Leasehold improvements are depreciated over the unexpired periodof the lease.The residual value and useful life of an asset is reviewed, and adjustedif applicable, at each financial year end.ProvisionsProvisions are recognised when: a present obligation (legal orconstructive) arises as a result of a past event; it is probable that anoutflow of resources embodying economic benefits will be requiredto settle the obligation; and a reliable estimate can be made of theamount of the obligation.If the effect of the time value of money is material, provisions aredetermined by discounting the expected future cash flows at a pretaxrate that reflects current market assessments of the time value ofmoney and, where appropriate, the risks specific to the liability.Provisions are reviewed at each balance date, and adjusted to reflectthe current best estimate. When it is no longer probable that anoutflow of resources embodying economic benefits will be required tosettle the obligation, the provision shall be reversed.Where discounting is used, the increase in the provision due to thepassage of time is recognised as a finance cost.ReceivablesTrade receivables, student receivables and other receivables arerecorded at their amortised cost, less any provision for impairment.ReservesWelTec and Group has an asset revaluation reserve which has beengenerated by the revaluation of equipment, land and buildings, asoutlined in Property, Plant and Equipment.RevenueRevenue is recognised to the extent that it is probable that theeconomic benefits will flow to WelTec and Group and the revenue canbe reliably measured. The following specific criteria must also be metbefore revenue is recognised:Government grantsGovernment grants are recognised when eligibility to receive the granthas been established. For Student Component Funding, entitlementis established upon the withdrawal period for an individual’s courseof study having passed. For project-based grants, entitlement isestablished upon the completion of agreed milestones.Student tuition feesRevenue from student tuition fees is recognised in the statementof comprehensive income on entitlement. Where funds have beenreceived but not earned at balance date, an Income in Advanceliability is recognised.2012 ANNUAL REPORT | 65

Notes to the Financial StatementsRendering of servicesRevenue from a contract to provide services is recognised byreference to the stage of completion of the contract at balance date.Interest revenueInterest revenue is recognised on a time-proportionate basis thattakes into account the effective yield on the financial asset.TaxationTertiary institutions are exempt from payment of income tax, asthey are treated by the Inland Revenue Department as charitableorganisations. Accordingly, no income tax is provided for.Critical accounting estimates and assumptionsIn preparing these financial statements, WelTec and Group hasmade estimates and assumptions concerning the future. Theseestimates and assumptions may differ from the subsequent actualresults. Estimates and assumptions are continually evaluated andare based on historical experience and other factors, includingexpectations or future events that are believed to be reasonableunder the circumstances. The estimates and assumptions that havea significant risk of causing a material adjustment to the carryingamounts of assets and liabilities within the next financial year arediscussed below:Land and buildings valuationNote 16 provides information about the estimates and assumptionsexercised in the measurement of revalued land, buildings andequipment.Retirement leaveNote 20 provides information about the estimates and assumptionsexercised in the measurement of retirement leave.Critical judgements in applyingaccounting policiesManagement has exercised the following critical judgements inapplying accounting policies for the year ended 31 December 2012:Crown-owned land and buildingsCrown-owned land and buildings are included as part of WelTecand Group’s property, plant and equipment. Although legal title hasnot been transferred, the Crown has vested all the normal risks andrewards of ownership to WelTec and Group.Restrictions on disposal of these Crown owned land and buildings arein place, as per section 192 of the Education Act 1989.Distinction between revenue and capital contributionsMost Crown funding received is operational in nature and is providedby the Crown under the authority of an expense appropriation and isrecognised as revenue. Where funding is received from the Crownunder the authority of a capital appropriation, WelTec and Groupaccounts for the funding as an equity injection directly in equity.Information about equity injections recognised in equity is disclosedin note 22.66 | WELLINGTON INSTITUTE OF TECHNOLOGY

Notes to the Financial StatementsGROUPPARENT2012 Actual$0002012 Budget$0002011 Actual$0002012 Actual$0002012 Budget$0002011 Actual$0002 GOVERNMENT GRANTSStudent Achievement Component 26,531 27,254 26,306 26,531 27,254 26,306Adult & Community Education 222 222 222 222 222 222Youth Guarantee 1,374 1,467 1,017 1,374 1,467 1,017Trades Academy 987 1,049 789 987 1,049 789Equity funding 325 141 141 325 141 141Other funding 790 565 513 541 316 16730,229 30,698 28,988 29,980 30,449 28,6423 TERTIARY FEESDomestic students 12,043 13,225 10,704 12,043 13,225 10,704International students 5,095 4,593 3,775 5,095 4,593 3,775Other fees 601 722 1,913 601 722 1,91317,739 18,540 16,392 17,739 18,540 16,3924 OTHER TEACHINGContract students 2,763 2,502 3,290 2,763 2,502 3,290Contract income 370 361 836 370 361 4543,133 2,863 4,126 3,133 2,863 3,7445 OTHER INCOMETrading income 2,009 2,226 974 1,657 1,275 999Other income 1,140 464 1,261 957 464 1,091Finance income 698 450 845 698 450 8453,847 3,140 3,080 3,312 2,189 2,9356 PERSONNELKey Management Compensation:Short term employee benefits 1,566 1,634 1,529 1,556 1,586 1,483Council fees 86 106 141 86 106 141Staff Compensation:Short term employee benefits 28,409 28,439 27,243 27,855 28,017 26,850Defined contribution plan employer contributions 435 - 281 435 - 281Associated Personnel Expenses 624 738 688 623 738 68631,120 30,917 29,882 30,555 30,447 29,4417 ADMINISTRATIONAdministrative expenditure 6,925 6,198 6,327 6,462 5,738 5,904Non personnel research expense 74 106 74 74 106 74Bad debts expense 5 120 98 5 120 98Doubtful debts expense (241) - 454 (243) - 454Remuneration of external auditors 87 95 87 82 95 876,850 6,519 7,040 6,380 6,059 6,6172012 ANNUAL REPORT | 67

Notes to the Financial StatementsGROUPPARENT2012 Actual$0002012 Budget$0002011 Actual$0002012 Actual$0002012 Budget$0002011 Actual$0008 INFRASTRUCTUREInformation & computer technology 764 899 971 758 899 955Insurance 841 585 334 841 585 334Loss on disposal of assets 46 - 1 51 - 1Operating leases 2,069 2,338 1,616 2,045 2,314 1,605Occupancy 2,084 1,981 2,187 2,081 1,981 2,1689 INTEREST, DEPRECIATION& AMORTISATION5,804 5,803 5,109 5,776 5,779 5,063Depreciation 4,534 4,947 4,741 4,532 4,947 4,741Amortisation 531 538 507 531 538 50710 NON OPERATING ITEMS5,065 5,485 5,248 5,063 5,485 5,248Students First project (253) (406) - (253) (406) -Redundancies (429) - - (429) - -Gain/(loss) on revaluation (125) - 262 (125) - 262Campus development - (151) - - (151) -Lease fitout reinstatement write back - - 985 - - 98511 TRADE AND OTHER RECEIVABLES(807) (557) 1,247 (807) (557) 1,247Student receivables 4,723 7,302 5,744 4,723 7,302 5,744Trade receivables 1,832 894 2,132 1,489 837 1,741Related party receivables (note 33) 949 - 8 1,002 - 502less provision for impairment (338) (328) (669) (336) (328) (669)7,166 7,868 7,215 6,878 7,811 7,318Fair valueStudent fees are due before a course commences or upon enrolment if the course has already begun. Student fee receivables are non-interest bearingand are generally paid in full by course commencement date. Therefore, their carrying value approximates their fair value.Other receivables are non-interest bearing and are generally settled on 30-day terms. Therefore the carrying value of other receivables approximatestheir fair value.The ageing profile of student receivables as at year end is detailed below.Not past due 4,083 4,827 4,083 4,827Past due 1 – 30 days 1 6 1 6Past due 31 – 60 days 29 302 29 302Past due 61 – 90 days 94 30 94 30Past due over 90 days 516 579 516 5794,723 5,744 4,723 5,74468 | WELLINGTON INSTITUTE OF TECHNOLOGY

All receivables greater than 30 days in age are considered to be past due.There are provisions for impairment on receivables with overdue amounts. Due to the large number of student fee receivables, the impairmentassessment is performed on a collective basis, based on an analysis of past collection history and debt write-offs.Movements in the provision for impairment of receivables are as follows:At 1 January (669) (669) (215) (669) (669) (215)Provisions reversed during the year:Bad debts written off against provision 90 91 - 90 91 -Provision released/(additional provision made) 241 250 (454) 243 250 (454)At 31 December (338) (328) (669) (336) (328) (669)GROUPPARENT2012 Actual$0002012 Budget$0002011 Actual$0002012 Actual$0002012 Budget$0002011 Actual$00012 INVENTORYWork in progress - at cost - 75 290 - 75 290Finished goods - at cost 17 16 16 17 16 1617 91 306 17 91 30613 INVESTMENT IN SUBSIDIARYShares in WelTec Connect Limited (at cost) - - - 4,281 3,150 -4,281 3,150WelTec Connect Limited is a registered charity which undertakes specific learning delivery and applied research consultancy.During 2012 two separate conversions of payable balances to share capital were approved by the WelTec Council. Please refer to note 15.GROUP14 INVESTMENT IN ASSOCIATE AND JOINTLYCONTROLLED ENTITIES2012 Actual$0002012 Budget$0002011 Actual$000Investment in AssociateMotorTrain Limited is a shell company in which WelTecholds a 25% interest. No transactions were incurredduring the year.Investment in Jointly Controlled EntitiesLe Cordon Bleu New Zealand Institute LimitedPartnershipWelTec Connect Limited holds the Groups investmentin Le Cordon Bleu New Zealand Institute (LCBNZI),being a 43.15% investment in the Le Cordon Bleu NewZealand Institute Limited Partnership and a 33.3%shareholding in LCB Management NZ Limited, theGeneral Partner of the Limited Partnership.WelTec and LCBNZI jointly developed premises in theRegent Centre, lower Cuba Street in Wellington City.WelTec’s School of Hospitality and the LCBNZI CuisineSchool co-locate in this facility. Academic deliverycommenced in September 2012.Parent and GroupMotorTrain Limited - - -GroupInvestment in Le Cordon Bleu NewZealand Institute Limited PartnershipAssets1,792 1,923 2,700Current assets 59 386 2,336Non current assets 2,650 2,682 710Total assets 2,709 3,068 3,046LiabilitiesCurrent liabilities (824) (1,145) (346)Non current liabilities (93) - -Total liabilities (917) (1,145) (346)Income 164 626 120Expenses (1,072) (1,403) (432)Profit/(Loss) (908) (777) (312)Share of joint venture’s contingentliabilities- - -Share of joint venture’s commitments 2,558 2,558 -2012 ANNUAL REPORT | 69

Notes to the Financial Statements14 INVESTMENT IN ASSOCIATE AND JOINTLY CONTROLLED ENTITIES (CONTINUES)CybusWelTec and Universal College of Learning (UCOL)have a 50% interest in a joint venture, Cybus,which undertakes academic and support serviceson contract to the Le Cordon Bleu New ZealandInstitute Limited Partnership. The followingamounts on the right represent the group’s shareof the assets, liabilities, income and expenses ofthe joint venture:Group2012 Actual$0002012 Budget$0002011 Actual$000Investment in Cybus - - -AssetsGROUPCurrent assets 157 85 104Total assets 157 85 104LiabilitiesCurrent liabilities (157) (85) (104)Total liabilities (157) (85) (104)Income 825 1,143 363Expenses (825) (1,143) (363)Profit/(Loss) - - -Share of joint venture’s contingentliabilities- - -Share of joint venture’s commitments - - -Computer Power PlusWelTec and Whitireia Community Polytechnichave a 50% interest in a joint venture, ComputerPower Plus, which undertakes academic andsupport services on contract to Whitireia NewZealand Limited. The following amounts on theright represent the group’s share of the assets,liabilities, income and expenses of the jointventure:ParentInvestment in Computer Power Plus 140 - -GroupInvestment in Computer Power Plus 356 - -AssetsCurrent assets 703 - -Non current assets 111 - -Total assets 814 - -LiabilitiesCurrent liabilities (458) - -Total liabilities (458) - -Income 1,964 - -Expenses (1,748) - -Profit/(Loss) 216 - -Share of joint venture’s contingentliabilities- - -Share of joint venture’s commitments 149 - -70 | WELLINGTON INSTITUTE OF TECHNOLOGY

GROUPPARENT2012 Actual$0002012 Budget$0002011 Actual$0002012 Actual$0002012 Budget$0002011 Actual$00015 OTHER FINANCIAL ASSETSCurrentTerm deposits with maturities greater than3 months and remaining duration less than12 monthsNon Current3,500 - - 3,500 - -Loans to subsidiary - WelTec Connect Limited - - - - - 3,150Unlisted shares - in Polytechnics InternationalNew Zealand Limited (PINZ) (at cost)14 - - 14 - -3,514 - - 3,514 - 3,150Fair ValueLoans to related parties - loans to related parties were unsecured, non-interest bearing and were repayable on demand. On 24 April 2012 the Councilagreed to convert the $3.2m related party loan to WelTec Connect Limited to capital. During 2012 a further $1.3m of intercompany payable balances wasconverted to capital within WelTec Connect.Unlisted shares - unlisted shares are held in non-commercial entities and are carried at cost less impairment because either the fair value of the investmentcannot be reliably determined using a standardised valuation technique or due to cost not being materially different to fair value.16 PROPERTY, PLANT AND EQUIPMENTGROUP 2012 $000Land &BuildingsLeaseholdImprovementEquipmentHardwareFurniture& FittingsLibraryCollectionAssets underConstructionTotalGross Carrying AmountBalance as at 1 January 50,517 3,286 5,584 9,343 2,117 1,724 1,982 74,553Additions 1,474 5,188 368 973 115 197 878 9,193Disposals - - (385) (1,537) (4) - - (1,926)Reclassifications 85 1,785 45 - - - (1,869) 46Net revaluation increments/decrements(1,691) - - 22 - - (114) (1,783)Balance as at 31 December 50,385 10,259 5,612 8,801 2,228 1,921 877 80,083Accumulated DepreciationBalance as at 1 January - 3,274 1,960 6,281 1,710 1,189 - 14,414Depreciation Expense 1,471 144 774 1,700 226 219 - 4,534Disposals - - (359) (1,490) (4) - - (1,853)Reclassifications - - (17) 17 - - - -Net revaluation increments/decrements(1,471) - - - - - - (1,471)Balance as at 31 December - 3,418 2,358 6,508 1,932 1,408 - 15,624Net Book Value 50,385 6,841 3,254 2,293 296 513 877 64,4592012 ANNUAL REPORT | 71

Notes to the Financial Statements16 PROPERTY, PLANT AND EQUIPMENT (CONTINUES)PARENT 2012 $000Land &BuildingsLeaseholdImprovementEquipmentHardwareFurniture& FittingsLibraryCollectionAssets underConstructionTotalGross Carrying AmountBalance as at 1 January 50,517 3,286 5,584 9,343 2,117 1,724 1,982 74,553Additions 1,474 5,188 359 970 115 197 878 9,181Disposals - - (385) (1,537) (4) - - (1,926)Reclassifications 85 1,785 45 - - - (1,869) 46Net revaluation increments/decrements(1,691) - - 22 - - (114) (1,783)Balance as at 31 December 50,385 10,259 5,603 8,798 2,228 1,921 877 80,071Accumulated DepreciationBalance as at 1 January - 3,274 1,960 6,281 1,710 1,189 - 14,414Depreciation Expense 1,471 144 773 1,699 226 219 - 4,532Disposals - - (359) (1,490) (4) - - (1,853)Reclassifications - - (17) 17 - - - -Net revaluation increments/decrements(1,471) - - - - - - (1,471)Balance as at 31 December - 3,418 2,357 6,507 1,932 1,408 - 15,622Net Book Value 50,385 6,841 3,246 2,291 296 513 877 64,449GROUP AND PARENT2011 $000Land &BuildingsLeaseholdImprovementEquipmentHardwareFurniture& FittingsLibraryCollectionAssets underConstructionTotalGross Carrying AmountBalance as at 1 January 49,894 3,282 5,073 7,426 2,012 1,526 482 69,695Additions 369 4 425 1,503 105 198 1,982 4,586Disposals - - (1) (23) - - - (24)Reclassifications - - 87 437 - - (482) 42Net revaluation increments/decrements254 - - - - - - 254Balance as at 31 December 50,517 3,286 5,584 9,343 2,117 1,724 1,982 74,553Accumulated DepreciationBalance as at 1 January - 2,735 1,173 4,722 1,511 978 - 11,119Depreciation Expense 1,424 539 787 1,581 199 211 - 4,741Disposals - - - (22) - - - (22)Reclassifications - - - - - - - -Net revaluation increments/decrements(1,424) - - - - - - (1,424)Balance as at 31 December - 3,274 1,960 6,281 1,710 1,189 - 14,414Net Book Value 50,517 12 3,624 3,062 407 535 1,982 60,139Land and buildings carried at fair valueAn independent valuation of the land and buildings was performed by Darroch Limited, registered independent valuers as at 31 December 2012. Land fair value isdetermined by reference to market-based evidence being the amount for which the assets could be exchanged between a knowledgeable willing buyer and seller in anarm’s length transaction. Reference has been made to the best use of the land on an “unencumbered” basis, adjusted for designations against the land or the use of theland is restricted because of reserve or endowment status.Specialist buildings are valued at fair value using depreciation replacement cost methodology. This methodology is an acceptable estimate of fair value due to the lack ofmarket-based evidence for education delivery purposes.Restrictions on titleUnder the Education Act 1989, WelTec and Group is required to obtain the consent from the Ministry of Education to dispose or sell of property where the value of theproperty exceeds an amount determined by the Minister.There are also various restrictions in the form of historic designations, reserve, and endowment encumbrances attached to the land. WelTec and Group does notconsider it practical to disclose in detail the value of land subject to these restrictions.72 | WELLINGTON INSTITUTE OF TECHNOLOGY

17 INTANGIBLE ASSETS 2012 2011GROUP $000SoftwareIntellectualPropertyAssets underconstructionTotalSoftwareIntellectualPropertyAssets underConstructionTotalGross Carrying AmountBalance as at 1 January 2,108 1,827 146 4,081 1,580 1,100 982 3,662Additions 156 - 244 400 14 301 146 461Disposals - (77) - (77) - - - -Reclassifications 89 - (135) (46) 514 426 (982) (42)Net revaluation increments/decrements- - - - - - - -Balance as at 31 December 2,353 1,750 255 4,358 2,108 1,827 146 4,081Accumulated DepreciationBalance as at 1 January 1,753 1,211 - 2,964 1,523 934 - 2,457Amortisation Expense 244 287 - 531 230 277 - 507Disposals - (77) - (77) - - - -Reclassifications - - - - - - - -Net revaluation increments/decrements- - - - - - - -Balance as at 31 December 1,997 1,421 - 3,418 1,753 1,211 - 2,964Net Book Value 356 329 255 940 355 616 146 1,1172012 2011PARENT $000SoftwareIntellectualPropertyAssets underconstructionTotalSoftwareIntellectualPropertyAssets underConstructionTotalGross Carrying AmountBalance as at 1 January 2,108 1,827 135 4,070 1,580 1,100 982 3,662Additions 156 - 119 275 14 301 135 450Disposals - (77) - (77) - - - -Reclassifications 89 - (135) (46) 514 426 (982) (42)Net revaluation increments/decrements- - - - - - - -Balance as at 31 December 2,353 1,750 119 4,222 2,108 1,827 135 4,070Accumulated DepreciationBalance as at 1 January 1,753 1,211 - 2,964 1,523 934 - 2,457Amortisation Expense 244 287 - 531 230 277 - 507Disposals - (77) - (77) - - - -Reclassifications - - - - - - - -Net revaluation increments/decrements- - - - - - - -Balance as at 31 December 1,997 1,421 - 3,418 1,753 1,211 - 2,964Net Book Value 356 329 119 804 355 616 135 1,106There are no restrictions over the title of WelTec or Group’s intangible assets, nor are any intangible assets pledged as security for liabilities.2012 ANNUAL REPORT | 73

Notes to the Financial StatementsGROUPPARENT2012 Actual$0002012 Budget$0002011 Actual$0002012 Actual$0002012 Budget$0002011 Actual$00018 TRADE AND OTHER PAYABLESTrade payables 4,417 3,837 4,242 4,405 3,824 4,229Goods and services tax (GST) payable 805 1,072 1,072 803 1,055 1,0555,222 4,909 5,314 5,208 4,879 5,284Trade payables are non-interest bearing and are normally settled on 30-day terms, therefore the carrying value of payables approximates their fair value.19 INCOME IN ADVANCEStudent income in advance 4,840 6,973 5,565 4,840 6,973 5,565Other income in advance 711 232 518 711 232 5185,551 7,205 6,083 5,551 7,205 6,08320 EMPLOYEE BENEFITSAccrued employee payments 957 423 512 950 422 508Annual and discretionary leave 1,961 2,402 2,101 1,945 2,363 2,079Sick leave 249 229 229 249 229 2293,167 3,054 2,842 3,144 3,014 2,816A provision is recognised for post employment benefits payable to employees. Employees are entitled to annual leave pay, long service leave andretirement leave pay. Annual leave and sick leave entitlements expected to be settled within 12 months of the balance date are measured at thecurrent rates of pay and classified as current liabilities.21 NON CURRENT PROVISIONSEmployee benefitsLong Service leave 142 120 129 142 120 129Retirement leave 106 81 107 106 81 107248 201 236 248 201 236Entitlements related to long service leave and retirement leave have been calculated at the present value of future cash flows determined on an actuarialbasis and classified as non-current liabilities. Two key assumtions used in calculating this liability include the discount rate and the salary inflation factor.Any changes in these assumptions will impact on the carrying amount of the liability.Expected future payments are discounted using forward discount rates as provided by the Treasury. The salary inflation factor has been determined afterconsidering historical salary inflation patterns and referencing the Treasury time series of Fiscal and Economic Indicators.If the salary inflation factor were to increase or decrease by 1% from that used, with all other factors held constant, the carrying amount of the retirementleave would be an estimated $10k higher/lower.If the discount rate used were to increase or decrease by 1% from that used, with all other factors held constant, the carrying amount of the retirementleave would be an estimated $9k higher/lower.Leased premises fitout reinstatement:Opening balance - - 985 - - 985Expensed during the period - - (985) - - (985)Leased premises fitout reinstatementclosing balance- - - - - -248 201 236 248 201 23674 | WELLINGTON INSTITUTE OF TECHNOLOGY

GROUPPARENT2012 Actual$0002012 Budget$0002011 Actual$0002012 Actual$0002012 Budget$0002011 Actual$00022 CROWN EQUITYOpening balance 39,332 39,332 38,932 39,332 39,332 38,932Equity Injection - - 400 - - 400Closing balance 39,332 39,332 39,332 39,332 39,332 39,332Crown Equity represents the total investment the Crown has in WelTec. It is comprised of two components, Notional Equity - the carrying value of Crownownedland and buildings at the date the Crown vested all the normal risks and rewards of ownership to WelTec, and Received Equity - actual cashpayments received.In 2011 WelTec received an equity injection of $400k as a contribution from the Crown for the establishment of the WelTec Trades Academy.Capital ManagementWelTec and Group’s capital is its equity, which comprises its Crown equity noted above, retained earnings (note 23) and reserves (note 24). Equity isrepresented by net assets.WelTec is 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 orparts of buildings, and borrowing.WelTec manages its revenues, expenses, assets, liabilities and general financial dealings prudently and in a manner that promotes the current and futureinterests of the community. WelTec’s equity is largely managed as a by-product of managing revenues, expenses, assets, liabilities and general financialdealings.The objective of managing WelTec’s equity is to ensure that it effectively and efficiently achieves the goals and objectives for which it has beenestablished, while remaining a going concern.23 RETAINED EARNINGSOpening balance 9,647 8,904 6,882 10,212 9,482 7,020Profit (315) 299 2,765 780 926 3,192Balance at end of financial year 9,332 9,203 9,647 10,992 10,408 10,21224 RESERVESOpening balance 24,245 24,245 22,828 24,245 24,245 22,828Revaluation increase (139) (833) 1,417 (139) (833) 1,417Balance at end of financial year 24,106 23,412 24,245 24,106 23,412 24,245These reserves have been generated by the revaluation of land and buildings undertaken by Darroch Limited on an annual basis, and the revaluation ofequipment on a 3 yearly basis undertaken by Ewan Forbes, registered Plant and Machinery Valuer (see note 16).25 NOTES TO THE CASH FLOW STATEMENT(a) Reconciliation of cash and cash equivalentsFor the purposes of the cash flow statement, cash and cash equivalents includes cash on hand and in banks and term investments in money market instruments,net of outstanding bank overdrafts. The carrying value of cash at bank, call deposits and term deposits < 90 days approximates their fair value.Cash and cash equivalents at the end of the financial year as shown in the cash flow statement is reconciled to the related items in the balance sheet as followson next page:2012 ANNUAL REPORT | 75

Notes to the Financial StatementsGROUPPARENT2012 Actual$0002012 Budget$0002011 Actual$0002012 Actual$0002012 Budget$0002011 Actual$000Cash and cash equivalents:Operating Funds 8,711 1,716 722 8,495 1,681 689Designated Funds:Campus Development - 6,355 15,492 - 6,355 15,4928,711 8,071 16,214 8,495 8,036 16,181(b) Reconciliation of profit for the period to net cash flows from operating activities(Loss)Profit for the period (315) 299 2,765 780 926 3,192Add/(less) non-cash items:Depreciation and amortisation of non currentassets5,065 5,485 5,248 5,063 5,485 5,248Doubtful debts (write-back)/expense (241) - 454 (243) - 454Bad debts expense 5 - - 5 - -Loss on sale or disposal of non current assets 46 151 1 51 151 1Loss/(gain) on revaluation of non current assets 104 - (262) 104 - (262)Rent holiday expense 236 - - 236 - -Gain on provision write-back - - - - - (985)Share of associate loss 692 777 312 - - -Add/(less) movements in working capital items:Decrease/(increase) in receivables 49 110 (661) 1,744 (223) (791)Decrease/(increase) in inventories 289 215 (274) 289 215 (274)Decrease/(increase) in prepayments 4 12 4 4 12 4(Decrease)/increase in payables (101) (366) (711) (886) 128 (660)Increase/(decrease) in employee entitlements 332 58 158 335 45 101(Decrease)/increase in income in advance (532) 241 (192) (532) 241 (215)Net cash from operating activities 5,633 6,982 6,842 6,950 6,980 5,81326 EXPLANATION OF MAJOR VARIANCES AGAINST BUDGETStatement of comprehensive incomeThe WelTec Parent operating profit of $1.6m was a favourable variance to budget of $0.1m - a satisfying result given the testing tertiary educationenvironment during 2012. Key variances to budget are discussed below:• Government funding and Tuition Funding $1.3m unfavourable - WelTec delivered 100% of its “core” Investment Plan SAC funded EFTS in 2012 whichcontinued the trend of strong demand for WelTec’s programmes experienced in 2011. The budget for 2012 included growth targets for the School ofHospitality (as it assumed the new Regent Centre building in Cuba Street, Wellington would be available for Trimester 2) and the School of Construction(increased demand for trades training following the “Skills for Canterbury” funding initiative following the Christchurch earthquakes in 2011).Unfortunately the School of Hospitality did not achieve its targets with a number of students waiting until the programmes transitioned to Wellington inOctober 2012. Similarly while the School of Construction made significant progress in delivering additional trades training (133 additionalEFTS delivered over and above our 2011 baseline figure) the full year budget was not achieved, owing in no small measure to timing uncertainties ofthe Christchurch rebuild.• Other Income $1.1m favourable – this variance is principally the result of favourable interest income generated on higher than budgeted cashholdings. This variance was supplemented by unplanned SSC Employer Kiwisaver contribution reimbursements received up to 30 June, unplannedfacilities revenue streams generated during the year and Te Whare Ako generating similar income to 2011 (please refer to note 28).• Depreciation & Amortisation $0.4m favourable – generated through lower than budgeted spend on campus development and IT infrastructurereplacement in 2012.• Non Operating Items $0.3m unfavourable – This unfavourable variance was generated by incurring unplanned restructuring costs and a loss onthe revaluation of assets. Offsetting this unbudgeted expenditure were favourable variances within Students First projects and campusdevelopment - we did not progress with re-developing the main Petone campus in 2012 when a fit-out loss on disposal was budgeted.76 | WELLINGTON INSTITUTE OF TECHNOLOGY

The financial performance of WelTec’s subsidiary WelTec Connect Limited did not meet budgeted levels. Substantial progress was made in 2012 particularly inthe second half of the year on pipeline research revenue growth and revenue diversification. These developments position WelTec Connect for higher revenuegeneration in 2013 and beyond.WelTec in collaboration with Whitireia Community Polytechnic acquired Computer Power Plus during 2012. Given the transitionary nature of this operation it waspleasing to see a positive contribution being generated in 2012. This helped offset the unfavourable variance to budget experienced by the Le Cordon Bleu NewZealand Institute Limited Partnership. This variance was generated due to a different accounting treatment being used within the budget for lease incentivescompared to what has been recognised in the actual results for 2012.Balance sheetWelTec Group’s Current assets have finished 2012 $3.4m favourable to budget. This is principally due to higher cash holdings allowing the group to invest interm deposits ($3.5m). Trade and other receivables have finished the year behind budget reflecting a change in the student enrolment process for 2013 deliverywith a 8 February enrolment due date being implemented. Inventory in 2012 reflects Hospitality finished goods on hand whereas the budget provided for partlyconstructed houses to be treated as Work in Progress. All relocatable houses constructed or under construction in 2012 were sold in 2012.Current liabilities have finished 2012 unfavourable to budget principally within Income in Advance. This reflects the lower volume of 2013 invoicing that wascompleted before 31 December than was budgeted.Statement of cash flowsWelTec Group’s final cash holdings for 2012 are a favourable $0.6m to budget. Of this variance the Group’s Operating activities new cashflow was $1.4munfavourable to budget. This reflects the negative cash impact of WelTec’s support of WelTec Connect and the Computer Power Plus joint venture. Thisunfavourable operating cashflow variance was offset by a $2.0m favourable Investing cashflow variance to budget. This reflects (as was the case in 2011) lowercampus development expenditure with Petone campus developments limited to seismic strengthening work in 2012. The new Regent Centre (Hospitality School)development in Cuba Street, Wellington was completed during the year with WelTec starting delivery from these new-state-of-the-art premises in October 2012.27 STUDENT SERVICES FEE SUMMARYIn 2011 an amendment to the Education Act waspassed that provided a framework for how compulsoryfees for student services were to be administeredin 2012 and beyond. The following statementof income and expenditure reflects the activityWelTec in consultation and partnership with studentrepresentatives has completed in 2012. Given 2012 wasthe first year of operating in this manner no comparativeinformation is available.2012 Actual$0002012 Budget$000Income 405 555ExpensesGROUP AND PARENTAdvocacy and legal advice 29 60Careers information 2 20Counselling services & pastoral care 293 330Employment information - 5Financial support and advice 64 65Health services - 15Media 1 35Clubs and societies 3 8Sports, recreation & cultural activities 13 17405 555Trading contribution - -28 TE WHARE AKO FINANCIAL SUMMARYTe Whare Ako is a Business Unit within WelTec providingearly childhood education services. WelTec holds aseparate licence from the Ministry of Education for theprovision of these services. This financial summary doesnot reflect occupancy costs or depreciation on buildingsand equipment used by the unit.Income2012 Actual$0002012 Budget$0002011 Actual$000Government grants 454 351 455ISS subsidy 91 79 93Childcare fees 90 80 93Other fees 1 - 1ExpensesGROUP AND PARENT636 510 642Employee benefits 492 492 503Other direct costs 22 33 22514 525 525Trading contribution 122 (15) 1172012 ANNUAL REPORT | 77

Notes to the Financial StatementsGROUP AND PARENT2012 Actual$0002012 Budget$0002011 Actual$00029 COMMITMENTS(a) Capital expenditurecommitmentsBuildings - 5,804Equipment 110 85Hardware 195 35Furniture & fittings 6 64311 5,988(b) Lease commitmentsNon cancellable operating lease commitments are disclosed in note 30 to thefinancial statements.30 LEASES(a) Leasing arrangementsWelTec enters into operating leases for buildings andvehicles:- Building premises are leased for WelTec satellite deliveryoffices in Auckland and Christchurch, and for WelTecdelivery in Wellington city. A number of premises arealso leased around the central Petone campus. Thelength of terms of these leases vary from under 12months to 12 years, with rights to renewal on a numberof contracts.(b) Non-cancellable operating lease paymentsNot longer than 1 year 2,062 1,640Between 1 and 5 years 6,443 3,412Longer than 5 years 3,340 2,04311,845 7,095- Vehicles are leased over 3 - 5 year terms depending onthe type of vehicle concerned.31 CONTINGENT LIABILITIESAs disclosed in Note 14 WelTec is a partner in the Le Cordon Bleu New Zealand Institute Limited Partnership. The Partnership has negotiated a $3m loanfacility with the Bank of New Zealand. The purpose of the loan is to complete the fit-out of the facility and provide working capital. The WelTec Council hasresolved to jointly and severally guarantee the loan with the other New Zealand based partner, Universal College of Learning. Accordingly, WelTec has acontingent liability of $3m at balance date. (2011, $3m).32 FINANCIAL INSTRUMENTS32A Financial instrument categoriesAccounting policies for financial instruments havebeen applied to each class of financial asset andfinancial liability outlined below. The book value ofeach equals their fair value:Loans & receivablesGROUP2012 Actual$000GROUP2011 Actual$000PARENT2012 Actual$000PARENT2011 Actual$000Cash and cash equivalents 8,711 16,214 8,495 16,181Trade and other receivables 7,166 7,215 6,878 7,318Total financial assets 15,877 23,429 15,373 23,499Financial liabilitiesTrade & other payables 5,222 5,314 5,208 5,284Total financial assets 5,222 5,314 5,208 5,28478 | WELLINGTON INSTITUTE OF TECHNOLOGY

32B Financial instrument risksRisk managementStrategic risk management is undertaken by Council through the monitoring of regular risk reports provided by management.These reports highlight potential areas of risk, and the steps that are being followed to ensure the risks are appropriately managed.The Finance department provides treasury management services for WelTec, co-ordinating the access to domestic and international financial markets andmanagement of the financial risks relating to the operations of the business.WelTec does not enter into, or trade financial instruments for speculative purposes.Details of significant accounting policies and methods adopted, including the criteria for recognition, and the basis of measurement applied in respect ofeach class of financial asset, financial liability and equity instrument are disclosed in the Accounting Policies section of these financial statements.Currency riskWelTec has no material exposure to movements in foreign exchange rates. Income sourced from overseas is received in New Zealand dollar equivalents,while trading supplies sourced from international providers are not a material portion of WelTec’s annual expenditure. Council Policy on foreign exchangestates that should an international purchase of $20k or more be required, investigation is made into forward cover. At balance date no forward contracts orany other form of hedging exist.Credit riskCredit risk exposure for WelTec exists principally within cash and cash equivalents, and trade and other receivables balances.Credit risk in respect of cash holdings is managed by spreading short term investment deposits with the major trading banks within New Zealand, whileensuring WelTec receives the best return on the funds invested, as specified by Council Policy. Receivable balances are unsecured. They are stated attheir estimated realisable value after providing for amounts not considered recoverable.The maximum credit exposure for each class of financial instrument is as follows:GROUP 2012 Actual$000GROUP 2011 Actual$000PARENT 2012 Actual$000PARENT 2011 Actual$000Cash and cash equivalents 8,711 16,214 8,495 16,181Trade and other receivables 7,166 7,215 6,878 7,318Total credit risk 15,877 23,429 15,373 23,499The 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 2012 Actual$000GROUP 2011 Actual$000PARENT 2012 Actual$000PARENT 2011 Actual$000Counterparties with credit ratingsCash and cash equivalents AA- rating 8,711 16,214 8,495 16,181Total cash and cash equivalents 8,711 16,214 8,495 16,181Counterparties without credit ratingsTrade and other receivables with nodefaults in the past7,166 7,215 6,878 7,318Total trade and other receivables 7,166 7,215 6,878 7,318Liquidity riskWelTec manages liquidity risk by maintaining adequate reserves to ensure the provision of educational services for the foreseeable future. Thisis completed by continuously monitoring and forecasting cash flows for the medium term. The maximisation of operational inflows and efficientmanagement of operational and investing outflows ensures sufficient cash reserves are maintained.Contractual maturity analysis of financial liabilitiesThe table below analyses financial liabilities into relevant maturity groupings based on the remaining period at the balance date to the contractualmaturity date.2012 ANNUAL REPORT | 79

Notes to the Financial StatementsCarrying amount$000Contractual cashflow $000Less than 6Months $0006 - 12 Months$0001 - 2 years $000Group 2012Trade and other payables 5,222 5,222 5,222 - -Total 5,222 5,222 5,222 - -Parent 2012Trade and other payables 5,208 5,208 5,208 - -Total 5,208 5,208 5,208 - -Group 2011Trade and other payables 5,314 5,314 5,314 - -Total 5,314 5,314 5,314 - -Parent 2011Trade and other payables 5,284 5,284 5,284Total 5,284 5,284 5,284Interest rate riskWelTec has exposure to interest rate risk to the extent that it has outstanding investments at fixed rates. The interest rates risk on investments ismanaged through the use of short term investments, in accordance with Council Policy. No significant exposure to interest rate risk exists on theremaining financial assets and liabilities.Sensitivity analysisThe table below illustrate the potential profit or loss and equity impact for reasonably possible market movements, with all other variables heldconstant, based on financial instrument exposures at the balance date.2012 Profit -50bps$0002012 Profit +50bps$0002011 Profit -50bps$0002011 Profit +50bps$000Group and Institute Interest rate riskFinancial AssetsCash and cash equivalents (10) 10 (18) 18Other financial assets (6) 6 - -Total sensitivity (16) 16 (18) 18Explanation of interest rate risk sensitivityThe interest rate sensitivity is based on a reasonable possible movement in interest rates, with all other variables held constant, measured on a basispoints (bps) movement. For example, a decrease in 25 bps is equivalent to a decrease in interest rates of 0.25%. The sensitivity for interest rate swapshas been calculated using a derivative valuation model based on a parallet shift in interest rates of -50bps/+50bps.33 RELATED PARTY DISCLOSURESSignificant transactions with government related entitiesThe government influences the roles of WelTec as well as being a major source of revenue.WelTec has received funding and grants from the Tertiary Education Commission totalling $30.4m (2011, $28.6m) to provide education services for theyear ended 31 December 2012. WelTec also utilises land and buildings legally owned by the Crown.Collectively, but not individually, significant transactions with government related entitiesIn conducting its activities, WelTec is required to pay various taxes and levies (such as GST, PAYE, ACC levies) to the Crown and entities related to theCrown. The payment of these taxes and levies is based on the standard terms and conditions that apply to all tax and levy payers. WelTec is exempt frompaying income tax and FBT.WelTec purchases goods and services from entities related to the Crown and it also provides services to entities related to the Crown. The purchaseand provision of goods and services to government-related entities for the year ended 31 December 2012 are small when compared to WelTec’s totalexpenditure and revenue and have all been conducted on an arms’ length basis. The purchase of goods and services included the purchase of electricityfrom Genesis and Meridian Energy, air travel from Air New Zealand, and postal services from New Zealand Post. The provision of services to governmentrelatedentities mainly related to the provision of educational courses.80 | WELLINGTON INSTITUTE OF TECHNOLOGY

GROUP AND PARENTTransactions with key management personnelDetails of key management personnel remunerationare disclosed in note 6 to the financial statements.Key management personnel include theChairperson, Councillors, Chief Executive and theExecutive Management Team. 2012 representedthe first year of WelTec and Whitireia operating withone Council. WelTec and Whitireia therefore sharedthe cost of Council remuneration in 2012. It shouldbe noted that Whitireia paid the Chairperson,Deputy Chairperson, and four other members feesin 2012.During the year, the Metro Group of Institutesof Technology and Polytechnics purchasedconsulting services from Saunders Unsworth,a Wellington based consulting company. TheCouncil Chairperson Roger Sowry is a partner inthis company. WelTec’s share of these costs was$39,345 (2011, $47,330) and the services weresupplied on normal commercial terms.2012 Actual $000 2011 Actual $000Council remuneration paid during the yearRoger Sowry (Chairperson) - 29Alan Barker (Deputy Chairperson) - 26Dennis Sharman 14 14Nancy McIntosh - Ward 14 14Peter Preston 14 14Peter Steel 14 14Suzanne Snively 14 14Vaughan Renner 14 14Ron Wilkinson - -Dr Kabini Sanga - -Aka Arthur - -Gregory Fortuin - -Related party transactions withsubsidiary, associate, and jointlycontrolled entityDuring the reporting period WelTecentered into transactions withLCBNZI Limited Partnership, apartnership in which WelTec holdsan equity interest through WelTecConnect Limited (refer note 14).These transactions occurred withina normal supplier relationship onterms and conditions no more orless favourable than those whichit is reasonable to expect WelTecwould have adopted if dealingwith the partnership as per anyindependent third party.GROUP AND PARENT2012 Actual $000 2011 Actual $000SubsidiaryWelTec Connect LimitedUnsecured loans payable to WelTec - 3,150Debtor for services provided by WelTec 53 494AssociateMotorTrain LimitedNo related party transactions were entered into during the year - -LCBNZI Limited PartnershipServices provided by WelTec 318 30Debtor for services provided by WelTec 118 6LCB Management LimitedNo related party transactions were entered into during the year - -Jointly Controlled EntityComputer PowerServices provided by WelTec 772 -Debtor for services provided by WelTec 772 -CybusServices provided by WelTec 91 63Debtor for services provided by WelTec 57 2834 EVENTS AFTER BALANCE DATEThere are no events after balance date to report.(2011: On 8 March 2012 WelTec was advised in writing from the Tertiary Education Commission that a wash-up payment in excess of that accrued wouldbe provided for Priority Trades Training. As a consequence WelTec has amended its financial results to incorporate the actual 2011 funding to be received.WelTec continues to engage with the Tertiary Education Commission with regards to a possible wash-up payment in relation to 2011 Embedded Literacyand Numeracy provision. A contingent asset has been calculated utilising January SDR actual student numbers, and the prescribed funding formula of$785 per student. In 24 April 2012 WelTec Council agreed to convert the on demand loan to WelTec Connect Limited to a capital injection in the form of anincrease in the issued share’s value.)2012 ANNUAL REPORT | 81

ResponsibilitiesIn the financial year ended 31 December 2012, the Council and Management of Wellington Institute of Technologywere responsible for:• The preparation of the Financial Statements, Statement of Objectives and Service Performance and thejudgements used therein.• Establishing and maintaining a system of internal control designed to provide reasonable assurance,as to the integrity and reliability of financial reporting.In the opinion of Council and management of Wellington Institute of Technology, the Financial Statements andStatement of Objectives and Service Performance for the year ended 31 December 2012 fairly reflect the financialposition and operations of Wellington Institute of Technology and Group.ROGER SOWRYCHAIRPERSON29 APRIL 2013LINDA SISSONS (DR)CHIEF EXECUTIVE29 APRIL 201382 | WELLINGTON INSTITUTE OF TECHNOLOGY

Chartered AccountantsINDEPENDENT AUDITOR’S REPORTTO THE READERS OFWELLINGTON INSTITUTE OF TECHNOLOGY AND GROUP’SFINANCIAL STATEMENTS AND NON-FINANCIAL PERFORMANCE INFORMATIONFOR THE YEAR ENDED 31 DECEMBER 2012The Auditor-General is the auditor of Wellington Institute of Technology (WelTec) and group. TheAuditor-General has appointed me, David Morrow, using the staff and resources of Ernst & Young, tocarry out the audit of the financial statements and non-financial performance information of WelTec andgroup on her behalf.We have audited:- the financial statements of WelTec and group on pages 58 to 81, that comprise the balance sheet asat 31 December 2012, the statement of comprehensive income, statement of changes in equity andcash flow statement for the year ended on that date and the notes to the financial statements thatinclude accounting policies and other explanatory information; and- the non-financial performance information of WelTec and group in the statement of serviceperformance on pages 49 to 51.OpinionIn our opinion:- the financial statements of WelTec and group on pages 58 to 81:- comply with generally accepted accounting practice in New Zealand; and- fairly reflect WelTec 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 WelTec and group on pages 49 to 51 fairly reflectsWelTec and group’s service performance achievements measured against the performance targetsadopted in the investment plan for the year ended 31 December 2012.Our audit was completed on 29 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 andour responsibilities, and we explain our independence.Basis of opinionWe carried out our audit in accordance with the Auditor-General’s Auditing Standards, which incorporatethe International Standards on Auditing (New Zealand). Those standards require that we comply withethical requirements and plan and carry out our audit to obtain reasonable assurance about whether thefinancial 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-financialperformance information. If we had found material misstatements that were not corrected, we wouldhave referred to them in our opinion.An audit involves carrying out procedures to obtain audit evidence about the amounts and disclosures inthe financial statements and non-financial performance information. The procedures selected depend onour judgement, including our assessment of risks of material misstatement of the financial statementsand non-financial performance information, whether due to fraud or error. In making those riskassessments, we consider internal control relevant to WelTec and group’s preparation of the financialstatements 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 the2012 ANNUAL REPORT | 83

circumstances but not for the purpose of expressing an opinion on the effectiveness of WelTec andgroup’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 appropriateness of the reported service performance within WelTec and group’s framework forreporting performance;- the adequacy of all disclosures in the financial statements and non-financial performanceinformation; 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 financialstatements and non-financial performance information. Also we did not evaluate the security andcontrols over the electronic publication of the financial statements and non-financial performanceinformation.We have obtained all the information and explanations we have required and we believe we haveobtained sufficient and appropriate audit evidence to provide a basis for our audit opinion.Responsibilities of the CouncilThe Council is responsible for preparing financial statements that:- comply with generally accepted accounting practice in New Zealand; and- fairly reflect WelTec and group’s financial position, financial performance and cash flows.The Council is also responsible for preparing non-financial performance information that fairly reflectsWelTec and group’s service performance achievements measured against the performance targetsadopted in the investment plan.The Council is responsible for such internal control as it determines is necessary to enable thepreparation of financial statements and non-financial performance information that are free from materialmisstatement, whether due to fraud or error. The Council is also responsible for the publication of thefinancial 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 AuditorWe are responsible for expressing an independent opinion on the financial statements and non-financialperformance information and reporting that opinion to you based on our audit. Our responsibility arisesfrom section 15 of the Public Audit Act 2001 and the Crown Entities Act 2004.IndependenceWhen carrying out the audit, we followed the independence requirements of the Auditor-General, whichincorporate the independence requirements of the External Reporting Board.Other than the audit, we have no relationship with or interests in WelTec or any of its subsidiaries.David MorrowErnst & YoungOn behalf of the Auditor-GeneralWellington, New Zealand84 | WELLINGTON INSTITUTE OF TECHNOLOGY

AcronymsAOD Alcohol & Other DrugsACE Adult and Community EducationBE Bachelor of EngineeringBPS Basis PointsBSC Bachelor of ScienceCATE Career and Technology EducationCCDHB Capital & Coast District Health BoardDAPAANZ Drug & Alcohol Practitioners’ Association Aoteroa New ZealandDHB District Health BoardEFTS Equivalent Full-Time StudentEMT Executive Management TeamEPIS Educational Performance IndicatorsFTE Full-Time EquivalentHVDHB Hutt Valley District Health BoardIAS International Accounting StandardIOD Institute of DirectorsIRL Industrial Research LimitedIS Information SystemsISS Income Support ServicesIT Information TechnologyITO Industry Training OrganisationITP Institutes of Technology & PolytechnicsLCBNZI Le Cordon Bleu New Zealand InstituteMBA Master of Business AdministrationMITO Motor Industry Training OrganisationMoU Memorandum of UnderstandingNZQA New Zealand Qualifications AuthorityNZIFRS New Zealand International Financial Reporting StandardsNZTE New Zealand Trade and EnterprisePBRF Performance-Based Research FundR&D Research and DevelopmentSAC Student Achievement ComponentSAEER Self Assessment, and External Evaluation and ReviewSDR Single Data ReturnSME Small and Medium EnterprisesSTAR Secondary/Tertiary Alignment ResourcesTEC Tertiary Education CommissionTES Tertiary Education StrategyTFESC Territorial Forces Employers Support CouncilUCOL Universal College of LearningWCL WelTec Connect Limited2012 ANNUAL REPORT | 85

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WelTec Certificate in Carpentry graduates (front) on site with their new employer David Hale Building Ltd.The graduates were supported throughout their studies and assisted to gain employment by WelTec andTaranaki Whanui through the Tamaiti Whangai partnership. (November 2012)2012 ANNUAL REPORT | 87

Private Bag 39803Wellington Mail CentreLower Hutt 5045, New ZealandFreephone: 0800 935 832Telephone: +64 4 9202 400Facsimile: +64 4 9202 401www.weltec.ac.nz