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

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