Annual Report 2009 (PDF 2 MB) - Wellington Institute of Technology

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Balance sheetCash and cash equivalents balance of $11.992m represents an improvement of $10.912m to budget (net of the budgeted borrowings). Thissubstantial favourable variance is the result of additional revenue generated by domestic students through the year, savings in personnel,and reduced campus development activities in the 2009 year.Trade and other receivables finished 2009 $1.651m ahead of budget. Of the $5.705m total $5.321m relates to 2010 enrolments.Property, plant and equipment as outlined above finished 2009 behind budgeted levels. Campus development activities not completed in2009 will roll forward into 2010, with designated cash funds in place (refer note 18).Statement of cash flowsOperating activities finished the year at $10.346m, $1.81m ahead of budget. As outlined in the income statement commentary, this reflectsthe higher than budget domestic student income stream, and less paid out to employee’s as the overall number of staff within theorganisation was less than budget and the 2008 comparative.Investing activities finished the year $13.252m ahead of budget as a result of the reduced campus development activities, and the maturityof the term investment of $4.15m made in 2007 to ensure the organisation was able to re-pay the full amount of suspensory loan from theCrown if required (refer notes 15 and 18).21. TE WHARE AKO FINANCIAL SUMMARYTe Whare Ako is Wellington Institute of Technology’s early childhood education services business unit. Wellington Institute of Technologyholds a separate licence from the Ministry of Education for the provision of these services. The accounts presented below are required to bepresented separately for Ministry of Education purposes to support the funding provided. The accounts represent the trading contribution ofthe business unit, and do not reflect occupancy costs or depreciation on buildings and equipment used by the unit.FINANCIAL STATEMENTS2009 2009 2008Actual Budget Actual$000 $000 $000IncomeGovernment grants 384 347 404ISS subsidy 86 92 77Childcare fees 94 113 110Other fees 2 - -566 552 591ExpensesEmployee benefits 439 437 434Other direct costs 24 30 21463 467 455Trading contribution 103 85 13622. COMMITMENTS(a) Capital expenditure commitmentsLand and buildings - - 6,534Equipment 32 - 74Hardware 100 - -Furniture & fittings - - 55132 - 6,663(b) Lease commitmentsNon-cancellable operating lease commitments are disclosed in note 23 to the financial statements.WELLINGTON INSTITUTE OF TECHNOLOGY | 2009 ANNUAL REPORT45
23. LEASES(a) Leasing arrangementsWellington Institute of Technology enters into operating leases for buildings, computers and vehicles:- Building premises are leased for satellite delivery offices in Auckland and Christchurch, and for the Wellington Campus at Church Street.A number of premises are also leased around the central Petone campus. The length of terms of these leases varies from under 12 monthsto 5 years, with rights of renewal on a number of contracts.- Vehicles are also leased over 3 - 5 year terms, depending on the type of vehicle concerned, under this informal asset-managementprogramme.FINANCIAL STATEMENTS2009 2009 2008Actual Budget Actual$000 $000 $000(b) Non-cancellable operating lease paymentsNot longer than 1 year 1,406 - 1,509Between 1 and 5 years 1,643 - 2,148Longer than 5 years - - -3,049 - 3,65724. CONTINGENT LIABILITIESWellington Institute of Technology has no contingent liabilities at balance date (2008, $6.35M).25. FINANCIAL INSTRUMENTSRisk managementStrategic risk management is undertaken by Council through the monitoring of regular risk reports provided by management. These reportshighlight potential areas of risk and the steps being following to ensure the risks are appropriately managed.The Finance Department provides treasury management services for Wellington Institute of Technology, co-ordinating access to domesticand international financial markets and managing the financial risks relating to the operations of the business.Wellington Institute of Technology 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 appliedin respect of each class of financial asset, financial liability and equity instrument are disclosed in the Accounting Policies section of thesefinancial statements.Currency riskWellington Institute of Technology has no material exposure to movements in foreign exchange rates. Income sourced from overseas isreceived in New Zealand dollar equivalents, while trading supplies sourced from international providers are not a material portion ofWellington Institute of Technology's annual expenditure. Council policy on foreign exchange states that, should an international purchase of$20,000 or more be required, investigation is to be made into forward cover. At balance date, no forward contracts or any other form ofhedging exist.Interest rate riskWellington Institute of Technology has exposure to interest rate risk to the extent that it has investments at fixed rates.Borrowing rates are set by the Ministry of Education on an annual basis. Wellington Institute of Technology has no ability to influence oralter these rates. The interest rate risk on investments is managed through the use of short-term investments, in accordance with CouncilPolicy.No significant exposure to interest rate risk exists on the remaining financial assets and liabilities.Credit riskCredit risk exposure for Wellington Institute of Technology exists principally within cash and cash equivalents, and trade and otherreceivables balances.Credit risk in respect of cash holdings is managed by spreading short-term investment deposits with the major trading banks within NewZealand while ensuring Wellington Institute of Technology receives the best return on the funds invested, as specified by Council policy.Receivable balances are unsecured. They are stated at their estimated realisable value after providing for amounts not consideredrecoverable.There are no significant concentrations of credit risk within receivables.46WELLINGTON INSTITUTE OF TECHNOLOGY | 2009 ANNUAL REPORT
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Annual Report 2009 (PDF 2 MB) - Wellington Institute of Technology

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