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2012

ANNUAL REPORT

LACHLAN CLELLAND - 2012 GRADUATE WINNER OF THE RAY MEYER MEDAL

2012 ANNUAL REPORT | 1


Te Whare Wananga o te Awakairangi During 2012 our Maori presence was heightened with a space developed as the first port of call for Maori students in the heart of the Student Hub. This area supplements the whare for the Tamaiti Whangai team which 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 a carved 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 using the 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 bring prisoners from Rimutaka Prison to the Petone campus each week to learn carving. The Pare was the last piece carved and was gifted to Hutt Valley Polytechnic. The carvers were Aaron Forbes and Tom Sidney.

Vision/Matakite Our vision is to provide the best learning environment for students who will be“new professionals” and graduate with world-class skills and knowledge as a result of our close partnership with industry.

Values/Taonga In order to deliver our promise that learning for the 21st century is a collaborative venture: 1 We aspire to providing the Best Learning Environment 2 We believe Learning Happens Together 3 Our Values are Empathy, Challenge, Growth

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Mission/Kaupapa

2012 Summary

05

Council Members 2012

08

Executive Management Team

10

Industry Advisory Committees

13

Chairperson’s Report

17

Knowledgeable, highly skilled and work-ready graduates who:

Students First

21

 are well informed and able to access, use and

Chief Executive’s Report

23

Rebuilding Christchurch

27

entrepreneurial thinking;

Pasifika Trades

28

 are able to learn throughout life; and

Educational Performance

31

Research

35

A Supportive Learning Environment

41

WelTec Connect in 2012

43

Our People

45

Our Environment

46

Statement of Objectives and Service Performance

49

Business Plan Performance

52

Financial Statements

57

Responsibilities

82

Independent Auditor’s Report

83

Acronyms

85

Wellington Institute of Technology’s mission is to work in partnership with iwi, communities, industries, professions and other education organisations to add value through:

adapt knowledge;

 combine high level technical ability with creative/

 enhance workplace productivity and community development. The relevance of their and our contribution to the regional and national economy is assured through our close partnership with industry and commitment to research and technology transfer activities that:

 address directly the needs of industry and

professions (as voiced by enterprises large and small);

 support seamless approaches that build critical mass and depth of expertise regionally, nationally and internationally; and

 build a community and enterprise culture embodying productivity and sustainability.

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Award winning solution goes into production Award-winning Bachelor of Engineering Technology graduate, Lachlan Clelland on why he chose to do his degree at WelTec: “I was impressed by the approach. Staff have a lot of time for students, putting a lot of effort into helping you succeed with your study. Most important for me was the applied approach to learning. We got to work on real-world examples in industrial situations.” It is one of these real-world projects that 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 Professional Engineers Ray Meyer medal for Excellence in Student Design. The Ray Meyer Medal is sponsored by GHD and awarded by IPENZ to the student or group of students presenting the best final-year project. This was an outstanding achievement and the first time an ITP has won such an award. Lachlan’s final year project involved designing and building an automated cable production machine. He was briefed on pioneering superconductor research as part of a two-year internship at Crown Research Institute Industrial Research Limited (IRL), now Callaghan Innovation. Lachlan worked on his project to design and build a machine to make commercial production of the woven superconductor more efficient. “I was able to apply what I was learning at WelTec into a practical industry application. When I built the prototype it worked on the first try.” General Cable Superconductors, which has put the machine into production, also awarded Lachlan a prize recognising his achievement.

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2012 Summary EDUCATION PERFORMANCE INDICATORS (SAC EFTS)*

ADDING VALUE

9489 STUDENTS 4401 EFTS of total EFTS studied at

Levels 4 – 7

Students aged under

25 studied of all the Level 4-7 EFTS delivered in 2012

81% Course Completions

72% Qualification Completions

FINANCIAL PERFORMANCE The Tertiary Education Commission (TEC) has again awarded WelTec a low risk rating for its financial performance.

2.9%

Strong cashflow management with a liquid funds ratio of 25%, 8% higher than budget

Parent Operating Return

$1,483,000

$1,587,000

Budgeted Parent Operating Surplus

Actual Parent Operating Surplus

38%

Progression to Higher Level Study

66% Retained in Study

SATISFACTION

94%

93%

Student Satisfaction

Employer Satisfaction

* Provisional as advised by TEC March 2013

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WelTec’s first Bachelor of Engineering Technology Graduates The first ever graduates in engineering technology graduated in 2012. One of these was Ruth Tautari of Ngapuhi affiliation, a lieutenant in the New Zealand Army. While studying she was based at Trentham where she provided support to the workshop that maintains Army vehicles. Ruth majored in mechanical engineering so she could provide more technical support in her Army role. Ms Tautari demonstrated all-round excellence, studying hard and simultaneously maintaining high physical fitness training for her army position. She spent term breaks working at Trentham and was also 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 wheeled medium all-terrain military vehicle. Weighing between 5 and 7½ tonne the vehicle is designed to carry personnel and equipment.

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2012 Summary

FUNDING

EFTS BY SOURCE

SAC ITO INTERNATIONAL STAR YOUTH GUARANTEE TRADES ACADEMY FULL FEE ACE

69% 10% 8% 6% 3% 2% 1% 1%

FUNDING

LOWER HUTT WELLINGTON CENTRAL NTH ISLAND UPPER HUTT PORIRUA UPPER NTH ISLAND SOUTH ISLAND WAIRARAPA KAPITI COAST

GENDER

MALE FEMALE

FUNDING

EFTS BY REGION

64% 36%

WELLINGTON TRADES ACADEMY SCHOOL OF CREATIVE INDUSTRIES SCHOOL OF FOUNDATION STUDIES AND ANIMAL CARE SCHOOL OF HAIR, BEAUTY AND EXERCISE SCIENCE SCHOOL OF INFORMATION TECHNOLOGY SCHOOL OF CONSTRUCTION SCHOOL OF HOSPITALITY SCHOOL OF HEALTH AND SOCIAL SERVICES SCHOOL OF BUSINESS AND ADMINISTRATION SCHOOL OF ENGINEERING

EFTS BY ETHNICITY

34% 28% 10% 9% 5% 5% 4% 3% 2%

NZ EUROPEAN/PAKEHA MAORI ASIAN PASIFIKA OTHER EUROPEAN

HIGHEST ENTRY QUALIFICATION

AGE

UNDER 21 21 – 24 25 – 34 35+

55% 16% 11% 10% 5% 3%

NCEA L2 (6TH FORM CERTIFICATE) 26% NO RECORD 23% NCEA L1 (SCHOOL CERTIFICATE) 16% OVERSEAS QUALIFICATION 10% 14 OR MORE CREDITS AT ANY LEVEL 7% NCEA L3 (BURSARY OR SCHOLARSHIP) 7% UNIVERSITY ENTRANCE 6% OTHER 5%

45% 22% 17% 16%

TOTAL EFTS BY SCHOOL

91 199 230

312

440 461 494 499 578 1,097

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Council Members 2012 Roger Sowry ONZM

CHAIRPERSON Roger Sowry was a Member of Parliament from 1990 to 2005, firstly representing the Kapiti electorate, then as a National list MP. Roger retired from Parliament in 2005 moving to become Chief Executive of Arthritis New Zealand until the end of 2007. He is a member of the Electricity Authority. Roger is also a member of the Institute of Directors.

Dr Alan Barker DEPUTY CHAIRPERSON

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

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

Industry Advisory Committee Chairs

Combined Academic Board

Alcohol and Drug – Tim Harding

Dr Peter Coolbear – Chairperson

Automotive Technology – Ross Wallace

Alan Cadwallader – Academic Director, WelTec

Built Environment – Peter Degerholm

Don Campbell – Chief Executive, Whitireia

Business – Brian Cowper

Susan Cauchi – Deputy Chief Executive, Whitireia

Counselling and Trauma Studies – David Waters

Mahia D Fuimaono – Whitireia Student Representative

Creative Technologies – Jaimee Warda

Helen Gardiner – Dean Service Industries, Whitireia

Engineering Diplomas and Degree Advisory Committee – Michael Kerr

Julia Hennessy – Executive Dean, Health, Business and Service Industries, WelTec

Exercise Science – Mike Ryan

Willis Katene – Dean Te Manawa, Whitireia

Funeral Services – Prof. Mike Markfell-Jones

Dylan Mama – WelTec Student Representative

Health, Disability and Aged Care Support and CVLS Advisory Committee – Maurice Priestley

Gerry McCullough – Dean Business Faculty, Whitireia

Hospitality – Ruth Pretty

Hinemoa Priest – Kaiwhakahaere Maori, WelTec

Information Technology – Peter Ramsey

Linda Sissons – Chief Executive, WelTec

Pasifika – Linda Sissons Plumbing – John Leen Wellington Trades Acdemy – Ross Sinclair Youth Development – John Harrington

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Alan Peck – Executive Dean, Trades & Technology, WelTec


Aka Arthur

Dr Kabini Sanga

Gregory Fortuin

Ron Wilkinson

Suzanne Snively

Aka Arthur, of Ngati Toa, has been a resident of Porirua for over 60 years.

Kabini Sanga is an Associate Professor of Education in the Faculty of Education at Victoria University of Wellington. He holds a Doctor of Philosophy from the University of Sasketchewan,Canada.

Gregory Fortuin (Porirua) is a company director and Families Commissioner. He is a former Race Relations Conciliator and previously served as a director of New Zealand Post, Kiwibank, ACC (Investment Committee Chair), Catalyst Injury Management (Chair)and Industry New Zealand. Gregory came to New Zealand in 1991 as the Managing Director of National Mutual Corporate Super Services Limited, was also a Crown-Trustee and the meeting chair of the Crown Forest Rental Trust.

Ron Wilkinson (Kapiti) is the director of Management Answers, consultants in media and marketing. He has a background in radio and has been active in business and community activities in Kapiti for almost 20 years. In 2008 he was presented with a Civic Award by the Kapiti Coast District Council.

ONZM

He is a kaumatua for the Royal New Zealand Police College (since 2000), a member of the Conservation Board and of the Aratahi (the Maori Regional Representative Group of the Wellington Regional Council) and on the Kaiwhaka Manua for the Department of Courts.

Dennis Sharman Dennis owns and operates Sharman Consulting Limited a consultancy company that delivers comprehensive technology services to small and medium sized businesses. Dennis has just completed his term as Chair of the board of New Zealand Institute of Technologies. Dennis holds a number of Directorships, including government appointments to the Combined Council of Whitireia and WelTec and is also a founding member of the Board of Mana Tiaki.

He did his early university education at the University of South Pacific, Fiji. He has held a number of senior roles in education, including being the Director of the Institute of Education of the University of the South Pacific; the Director and Chief Executive Officer of the Solomon Islands College of Education, and the Chief Education Officer, Solomon Islands Ministry of Education.

Peter Steel Peter has an economic and engineering background having worked for over 25 years as a Consulting Engineer, becoming a Principal and Technical Director for Beca. He has strong commercial, governance and management experience from his work activities as well as a period as President of the Wellington Regional Chamber of Commerce. He is currently General Manager - Engineering & Standards for the Infrastructure and Engineering division of KiwiRail.

Chief Executive’s Performance Appraisal Committee

He was the Founding Chairman of the Youth Suicide Awareness Trust and served on the Boards of Prison Fellowship New Zealand and Youth for Christ. He is presently the Chair of Streets Ahead 237 in Porirua.

Nancy McIntosh-Ward Nancy holds an MBA and is a Chartered Accountant and has extensive financial, management, commercial, governance, tertiary education and marketing experience. Nancy is a member of the Institute of Directors.

Risk and Audit Committee

In addition, he was awarded a 1990 Medal for services to broadcasting by the Queen, in recognition of his previous work with Radio New Zealand. He is a former New Zealand radio broadcaster of the year. A former board member, fellow and graduate of the New Zealand College of Management, he has designed and led workshops on many topics including management and media and worked extensively in Vietnam, Malaysia, the United States of America, Australia and various countries in the South Pacific.

Peter Preston Peter Preston has an early background in civil engineering (BE) followed by a strong commercial background including senior management roles in BP New Zealand Limited and directorships in related companies. Heis a professional company director anda Fellow of the Institute of Directorsand the Institution of Professional Engineers New Zealand.

Suzanne, formerly a partner at PricewaterhouseCoopers in Wellington, is the Managing Director of strategic and economic advice company, MoreMedia Enterprises. Suzanne is appointed to the Health Research Council by the Minister of Health Tony Ryall and Chairs the Agriwomen Development Trust and Transparency International. She is Chief Judge of the Electra Business Awards. Previous directorships included the Reserve Bank of New Zealand. She is a member of the Institute of Directors and the New Zealand Association of Economists. Suzanne was awarded the Fulbright and Reserve Bank scholarships and was honoured by the Queen along with 100 women with a Women’s Suffrage medal.

Vaughan Renner Vaughan has an MBA, and science and engineering qualifications. He runs his own businesses and has strong commercial, strategic planning and IT skills. Vaughan has a background in governance (currently including; The Employers Chamber of Commerce Central, Business NZ, and Standards New Zealand). He is a member of the Institute of Directors.

WelTec Connect Ltd Peter Steel – Chair (Until February 2012)

Alan Barker – Chair

Vaughan Renner – Chair

Dennis Sharman – Chair (From February 2012)

Gregory Fortuin

Nancy McIntosh-Ward

Nancy McIntosh-Ward

Peter Preston

Dennis Sharman

Suzanne Snively

Roger Sowry

Ron Wilkinson

Le Cordon Bleu New Zealand Institute (Directors)

Linda Sissons – WelTec Chief Executive Andre Cointreau – President and CEO of Le Cordon Bleu International

Campus Development Committee Peter Steel – Chair Gregory Fortuin Vaughan Renner Kabini Sanga

Paul McElroy – UCOL Chief Executive

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Executive Management Team

Linda Sissons, CNZM

Tim Allen

Mark Broadbent

Alan Cadwallader

CHIEF EXECUTIVE

GENERAL MANAGER, BUSINESS DEVELOPMENT

HUMAN RESOURCES DIRECTOR

ACADEMIC DIRECTOR

Ph. D. (London)

BA (Victoria University)

BA (Victoria University)

MMgt (Massey University)

Diploma in Adult Education (Edinburgh)

Graduate Diploma in Marketing (Victoria University)

Diploma of Education (Guidance)

MBA (Otago University)

MA (1st class Honours) Advanced Management Programme (Harvard)

Linda has been responsible for the strategic management and leadership of WelTec since 1999. Prior to joining WelTec she held university and Institute of technology management roles in New Zealand and the United Kingdom. She represents the New Zealand Government on the Board of Governors of the Commonwealth of Learning, is on the Board of WorldSkills NZ, and is a Director of ESITO (Electricity Supply Industry Training Organisation). She has been a member of a number of Government commissions, including the Tertiary Education Advisory Commission. Linda holds a PhD from London University, is a graduate of the Harvard Business School Advanced Management Programme and is a member of the Institute of Directors..

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Tim leads the development of new opportunities and the promotion of WelTec to meet its objectives. His areas of responsibility are marketing, international and WelTec Connect. During 2012 he led the growth of WelTec Connect particularly the further development of commercial technologies and products. Tim has also led the growth of WelTec’s international student numbers and the creation of more student work placements. Tim has extensive commercial, marketing and international experience, gained through senior roles in a diverse range of industries including education, shipping, sports and horticulture.

Diploma (Youth and Development), (Commonwealth Youth Programme, Asia-Pacific) Centre Ernst & Young Executive programme

Mark is responsible for WelTec’s human resources strategy and change management as well as human resources operations and capability development. With more than 25 years’ experience in human resources, line management, and development roles Mark’s has worked in a wide range of organisations covering the not-for-profit sector, government, stateowned enterprises, and education. Mark is a member of the Human Resources Institute of New Zealand.

As Academic Director Alan is responsible for academic leadership at WelTec. His role is leading and managing academic policy development, including learning access, student support services and resources to ensure high-quality student learning experience outcomes. His role also includes leading the Institute’s research activities. A career in the vocational tertiary sector of more than 12 years is complemented by earlier pursuits in commerce and business. Alan has experience as a lecturer in business studies as well as head of school. His background in education for business management and his interest in New Zealand’s small business sector fit well with WelTec’s applied research and technology transfer contribution to business and industry.


James Smith

Peter Cowper

Michael Hesp

Julia Hennessy

Alan J Peck, ONZM

CHIEF FINANCIAL OFFICER

CHIEF OPERATING OFFICER

DIRECTOR, SPECIAL PROJECTS

EXECUTIVE DEAN, FACULTY OF HEALTH, BUSINESS AND SERVICE INDUSTRIES

EXECUTIVE DEAN, FACULTY OF TRADES AND TECHNOLOGY (TO SEPTEMBER 2012)

BCA (Victoria University)

In 2012 the COO role involves managing the Academic Records and Administration, Information Technology Services and Support, Student Experience, Facilities, Procurement, Business Administration, Business Intelligence and change management business areas. As well as these infrastructure and capability services, Peter’s responsibilities include business process change initiatives for core student management. Peter also leads the Shared Services Programme for WelTec (as part of the strategic partnership with Whitireia) and Chairs the Shared Service Governance Group.

Master of Applied Finance (Victoria University)

MEd (Victoria University)

BA (Auckland)

CA (New Zealand Institute of Chartered Accountants)

MMgt (Massey University) PG Dip HSM (Massey University)

Diploma in Strategic Studies (University of NSW)

CA (New Zealand Institute of Chartered Accountants)

As Chief Financial Officer James is responsible for the strategic financial framework and operational financial management and reporting activities undertaken within WelTec. Prior to becoming the Chief Financial Officer James was Financial Controller at WelTec. Previous to joining WelTec James was the Financial Accountant at The Open Polytechnic of New Zealand, and held a number of roles within Inland Revenue. James is a member of New Zealand Institute of Chartered Accountants.

Peter brings many years’ experience in leadership, managing complex and technical business operations, third-party supplier models and outsourcing, contract management and leading change. Peter’s previous roles include managing Telecom New Zealand’s operational and delivery business areas. He was Head of Science and Engineering at BRANZ and he owns Quorum Group. Peter is a Member of the Maritime New Zealand Authority (the MNZ Board), is a founding trustee of the Porirua Digital Trust and member of the New Zealand Institute of Directors.

BA (Victoria University) Michael began his new role, having previously been WelTec’s General Manager Corporate and Finance, in mid-2011. The role of Director, Special Projects is to provide advice on specific high priority strategy developments; manage investment and capital projects; and develop WelTec’s long-term campus plan. Previous experience for Michael includes a number of roles for Fletcher Construction; being a member of the team that privatised Works Property Services to become Serco Group NZ, then holding the roles of Corporate Services Director and Finance Director for Serco; Chief Financial Officer and Board Secretary for the New Zealand Wool Board; a number of consulting and contracting roles for organisations including the Department of Labour, Healthcare Otago, Wellington City Council, and the Correspondence School. Michael is a member New Zealand Institute of Chartered Accountants.

DipN (Wellington Polytechnic) Julia has the overall responsibility for the management of the Faculty which is comprised of seven Schools and the Academic Manager’s Unit. Prior to becoming the Executive Dean of the Faculty, Julia was previously Executive Dean of the Faculty for Health, Business and Service Industries. Previous experience for Julia includes General Manager, Mental Health and Addiction Service for Hutt Valley DHB and Senior Advisor at the Ministry of Health. She worked in the tertiary education sector before being appointed Relationship Manager for the Central Regional Health Authority. She also taught on health related programmes in the tertiary sector.

Graduate (Royal College of Defence Studies, London) Advanced Management Programme (Harvard)

Alan was Executive Dean of the Faculty of Trades and Technology since February 2009 to September 2012. He was responsible for WelTec’s schools of Information Technology, Creative Technology, Construction, Engineering, and Automotive Technology. He was also responsible for the Trades Academy, which opened in 2011. Before joining the tertiary education sector in 2005, Alan served 40 years as an officer in the Royal New Zealand Navy, with a variety of appointments both at sea and ashore; in New Zealand and overseas. After leaving the Navy, Alan worked in the Ministry of Education, and the Tertiary Education Commission before joining WelTec.

She is a Fellow of the College of Nurses Aotearoa (NZ) and was a member of Nursing Council of New Zealand from 2008-2011.

2012 ANNUAL REPORT | 11


The Hospitality Advisory Committee visits the new Wellington CBD hospitality campus under construction in June 2012.

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Industry Advisory Committees Alcohol and Drug

Built Environment

Tim Harding (Chairperson) – CEO, CareNZ

Peter Degerholm (Chairperson) – Director, Calderglen

Anna Nelson – Programme Manager, Matua Raki, National Addiction Workforce Development

Dan McGuinness – Director, McGuinness Building Contractors

Christine McCarrison – Addictions Professional Leader, Community Mental Health & Addictions Service, Hutt Valley DHB Denise Nassenstein – Alcohol and Drug Counsellor, Community, Alcohol and Drug Service (CADS)

John Granville – Executive Director, NZIQS Mike King – Senior Project Manager, Summerset Management Group Kevin Collins – Director, Design Network Architecture Ltd Paul Bunkall – Director, Rawlinsons

Ian MacEwan – Executive Director, DAPAANZ

Russell Burley – Commercial Manager, Naylor Love

Jude West – Central Region Practice Leader, Problem Gambling Foundation of New Zealand

Tony Sutherland – Director, Rider Levett Bucknall

Major Stephen Scott – Director, Wellington Bridge Programme Mary Anne Cooke – Director, ABACUS, Counselling, Training & Supervision Ltd Maynard Gilgen – Clinical Director, Ora Toa Mauriora Murray Trenberth – CEO, WellTrust Rhonda Robertson – Consumer Advisor, Matua Raki, National Addiction Workforce Development Takurua Tawera – Clinical/Cultural Liaison, Te Hauora Runanga O Wairarapa Inc. Trish Chivers – Team Leader, Community Mental Health & Addictions Service, Hutt Valley DHB

Automotive Technology Ross Wallace (Chairperson) – National Training Manager, CablePrice NZ Ltd

Tony O’Connell – Managing Director, NME Stewart Peck – Project Manager, Naylor Love

Business Brian Cowper (Acting Chair)– Agent, Hudson Recruitment Charles Gilmore – CEO, IndeServe Ltd Anne Hare – Financial Sector, NZX Bill Davies – Self Employed Otila Osborne – Recruiter, Positive Staff Kanwardeep Bedi – Own Company Leo Austin – Owner, Austin Associates Limited Robyn Horton – Owner, McDonalds Queensgate Teri Puketapu – Iwi Representative, Te Runanganui o Taranaki whanui ki Te Upoko o Te Ika a Maui incorporated

Richard Eyles – Workshop Owner, North City Automotives

Counselling and Trauma Studies

Dave Wise – Trade Training Manager, NZ Army Trade Training School

Helen Bowbyes – Guidance Counsellor, Naenae College

David Waters (Chairperson) – Chief Executive, Ambulance NZ

Dean McMillan – Workshop Owner, D E McMillan Ltd

Jayne O’Neill – Clinical Leader, Relationship Services

George Robinson – Sales Representative, Otbury Refinish Solutions

Judy McCormack – Counsellor/Supervisor, The Counselling Group

Hus Kala – Workshop Owner, Hutt City Auto Electrical

Linda Karlin – Counselling and Training Manager, Skylight

Shane Maru – Student Representative, Auto Tech Year1 – A group

Luana Murray – Senior Advisor, Relationship Services Whakawhanaungatanga

Neil Butterfield – Workshop Owner, Porirua Autocrash Repairs

Mari Cribb – Guidance Counsellor, Upper Hutt College

Nick McGuirr – ITA, NZ MITO Owen Woodman – Workshop Owner, Woodman Automotive Steve Gaskin – Workshop Owner, Rolrich Panel & Spray 1988 Ltd Verna Niao – Group Manager - Workforce Development, NZ MITO

Creative Technologies Jaimee Warda (Chairperson) – BCT Graduate Consultant, Joug Design Laurence Greig – Programme Manager, Royal NZ Plunket Society Inc Bill Carden-Horton – Director, Billy Sushi Christine Doherty-McGregor – Assistant Curator, Expressions Art and Entertainment Centre Neville Parker – Designer, Designers Institute of NZ Steve La Hood – Director, Story Inc. Zoe McLean – Current BCT Yr 3 Student, WelTec

2012 ANNUAL REPORT | 13


Engineering Diplomas and Degrees

Hospitality

Michael Kerr (Chairperson) – Regional Manager (Wellington), BECA

Ruth Pretty (Chairperson) – Managing Director, Ruth Pretty Catering

Bill Caradus – NZ Bitumen Operations Manager, Fulton Hogan Ltd

Anthony Dey – General Manager, Brentwood Hotel

David Parle – Engineering Manager, Windsor Engineering Group Ltd Don Wills – Associate Director,Transmission & Distribution, AECOM Grant Daniels – Electronics Wing Warrant Officer, NZ Army John Futter – Support Specialist Nanotechnology, National Isotope Centre, Institute of Geological and Nuclear Sciences, Rafter Laboratory Dr. Peter Davenport – Engineer, Eastern Consulting Ltd Richard Screech – Engineering Architect – Solutions Group, Alcatel-Lucent NZ Ltd Dr. Rod Badcock – Senior Research Engineer, Industrial Research Limited Theo Klok – Locomotive Performance Engineer, Kiwirail

Exercise Science Mike Ryan (Chairperson) – Manager, Recreation Services Ben Montague – Club Manager, Lifestyle Gym David Lomax – Pastoral Care, Te Runanganui o Taranaki whanui ki Te Upoko o Te Ika a Maui incorporated Gareth Smith – Hutt Operations Manager/Lead Exercise Physiologist, ProActive Rehab Ltd

Bernd Lippman – Executive Chef, Museum of New Zealand Te Papa Tongarewa Eddie Wairau – Chief Executive Officer, Petone Working Men’s Club Francois Febvré – Proprietor, La Cloche Georgina Noon – HR Manager, InterContinental Wellington Glen Curphey – Executive Chef, Brentwood Hotel Kaye Paardekooper – Conference Organiser, Paardekooper and Associates Mark Angus – General Manager, Bolton Hotel Mike Egan – Owner Manager, Monsoon Poon Sara Tucker – Regional Manager, Hospitality Association of NZ

Health, Disability and Aged Care Support and CVLS Maurice Priestley (Chairperson) – Programme Coordinator, Inclusion & Disability, Inclusion/Disability Capital Coast Health DHB Jo Mason – Service Systems Manager, Community Connections

Jason Hemson – General Manager, Wellington Rugby League

Linda Fisher – Operations Manager, Emerge Supported Employment Trust

Marcus Sherwood – Leisure Active Manager, Hutt City Council

Nicola Adams – Educator, Te Korowai Whariki, ID Services

Mark O’Connor – General Manager Operations, Swim NZ

Adrienne Dawson – Assessment and Qualifications Manager, Careerforce

Tracy Thornton – Student Representative, WelTec

Tristine Tilly – Elder Abuse and Neglect Prevention Coordinator, Age Concern, Kapiti

Funeral Services Prof Mike Marfell-Jones (Chairperson) – Education Representative, Funeral Services Training Trust Anne McGuire – Self Employed Alistair Ferguson – Funeral Director, Marsden House Funeral Directors Danny Langstraat – General Manager, Harbour City Funeral Home Fiona Gillespie – Secretary, Funeral Service Training Trust of NZ John Peryer – Self Employed, Tong and Peryer Limited John Duncan – Representative, Funeral Directors Association of New Zealand John Schipper – Branch Manager, Davis Funeral Services Limited

Information Technology Peter Ramsey (Chairperson) – Contractor, Self-employed Alisdair McKenzie – Principal Consultant, IS Assurance Services Brian Rowe – Director, Examine Consulting Group Dr Donald Koh – BIT Monitor, Retired Dr Elozor Schneider – Information Systems / Technology, The Open Polytechnic of NZ Limited Jonathan Fry – Delivery Manager, Fronde Systems Group Ltd Kevin Groves – Software Developer, Fronde Systems Group Ltd Lester Abbey – Managing Director, Telemetry & Data Communications – Abbey Systems Mark Carroll – Enterprise Architect, Ministry of Education Russell Kean – Engineering Consultancy, Opus Central Laboratories Sergius Kramar – Developer / Analyst, FMG Advice & Insurance

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Pasifika

Youth Development

Linda Sissons (Chairperson) – Chief Executive, WelTec

John Harrington (Chairperson) – Coordinator, Canterbury Youth Workers Collective

Aiono Mino Cleverley – Samoan Community Filipo Lui – Tokelauan Community Kerese Manueli – Fijian Community Vei Lotaki – Tongan Community

Adrienne Dawson – Assessment and Qualifications Manager, Careerforce Andy Pilbrow – National Quality Services Manager, YMCA NZ National Office Bill Peace – Social Services Manager, STRIVE Community Trust

Plumbing John Leen (Chairperson) – Owner / CEO, John Leen Plumbing Ltd Colleen Upton – General Manager, Hutt Gas & Plumbing Systems Ltd

Dawn Badco – AOD Youth Clinician, Community Mental Health and Addiction Service/HVDHB Elizabeth Kerekere – Rangatahi Maori Consultant, Tiwhanawhana Trust Maree Tukukino – Pou Whakahaere, Kapuia Services Ltd

Dave Walker – Project Manager, Aquaheat Industries Ltd Craig Cochrane – National Operations Manager, Plumbing ITO Business Service Manager Derek Plimmer – Owner, Plimmer Plumbing Ltd Fiona Gavriel – CEO, Master Plumbers Ltd Ian Elliott – CEO, Plumbing, Gasfitting, Drainlaying & Roofing ITO Malcolm Andrews – Manager, Duncan McGregor Ltd Ross Tait – Plumber & Gasfitter, K J Tait Ltd Stewart Weddell – Owner, Plumber 1 Tim Wood – Manager, Masterlink Ltd Sue McGarry – Senior Training Services Representative, Plumbing ITO, Manager Course Scheduling Linda Baxter – Masterlink Coordinator, Masterlink Graham Hawkins – Owner, Hawkins Plumbing

Wellington Trades Academy Ross Sinclair (Chairperson) – Principal, Hutt Valley High School Carrie Murdoch – Manager Education, Skills & Trade, Business NZ Grant Jones – Principal, Newlands College Kerry Leggett – Youth Development Team Manager, Vibe Lower Hutt Martin Isberg – Principal, Wainuiomata High School Richard Campbell – Principal, Paraparaumu College Sally Haughton – Principal, Wellington East Girls’ College Sue Roberts – Head of Transition, Careers & Gateway, Aotea College CATE Regional Chair of CATE

Wellington Trades Academy student excels Gaining valuable work-place skills through the Wellington Trades Academy while still enrolled at secondary school led to early success for Rebecca Rothwell. Rebecca’s academic excellence was recognised with a scholarship enabling her to go onto further study in 2013. Rebecca, who was uninspired by secondary school, gained a Certificate in Hairdressing and Beauty Services at the Academy. This will help her with her goal of finding a workplace apprenticeship. Rebecca’s year at the Academy included putting her study into practice by working at the World of Wearable Art Award show. She also enjoyed being able to participate in the sports and social activities at St Mary’s College, which helped with the transition out of the school environment.

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Whakarongo ake au Ki te tangi a te manu nei Tuuii, tuuii Tui, tuia Tuia I runga Tuia I raro Tuia I roto Tuia I whao Tihei mauri ora I listen To the cry of the bird The Tui Bind together, stitch together, weave together Those things from above Those things from below Those things from within us Those things from around us Behold the sacred breath of life

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Chairperson’s Report The foresight, determination and hard work of the last few years delivered the promised success for WelTec in 2012. This was not just a year of good financial management and a solid surplus at the end of the year. It was more than outstanding academic outcomes for our students and staff as evidenced by our improved educational performance, it was the realising of a healthy organisation with wide horizons and good connections, having a positive impact on the future of New Zealand. Research shows that education contributes to economic growth. Improvements we make to the education we offer will result in improved economic performance - at an individual level for our graduates, at a business level for those who employ them and at regional and national levels as well. I am pleased to present this 2012 Annual Report and the evidence it offers of WelTec’s contributions. A number of significant events in 2012 marked achievements that have been years in the making.

New Hospitality Campus We launched a new hospitality campus in Cuba Street, Wellington in October, celebrating with Minister for Tertiary Education, Skills and Employment Steven Joyce, as well as business leaders from the hospitality industry, secondary schools, funders and policy makers. The purpose-built facility is set to become New Zealand’s centre for cuisine and hospitality excellence with two institutes on site. Sharing the building with us is our joint venture partner, Le Cordon Bleu New Zealand Institute which was opened by the Prime Minister John Key in 2012. The campus site allows for close connections to the local hospitality industry, drawing on the region’s talents and resources, and the flow of graduates is expected to strengthen Wellington’s position as New Zealand’s culinary and hospitality capital. Our students are in the heart of Wellington’s hospitality industry, which gives them more work opportunities. It also provides industry a place to work with students – sharing ideas and exchanging knowledge. This fabulous facility inspires student innovation and encourages creativity to thrive. The facility can currently take 540 students at any one time. When stage two is complete the capacity will increase to 700 students. Each Institute has its own kitchens and staff areas. Spaces such as the lecture theatre, classrooms, training restaurant and barista/bar lab are shared by the Institutes as is the Learning Commons. In total, $13m has been spent to develop the new campus. This investment in the central city’s food and beverage hub will help further Wellington’s reputation for outstanding hospitality.

Strategic Partnership In January 2012 WelTec and Whitireia formed a Strategic Partnership. This followed extensive research and consultation during 2011 on how the two institutions could work together to increase benefits for students, communities and industry in the Wellington region. This partnership is ‘Students First’. The partnership is the first of its kind for tertiary education in New Zealand. While the institutions are each a separate entity their two councils were combined by Hon Steven Joyce on 1 January 2012. Later that month a Combined Academic Board was established to ensure a consistent strategic direction on academic matters. Both institutions are committed to working together as partners to increase the educational benefits and pathways for students in the Wellington region, strengthen and enhance the overall quality teaching and learning, improve the ongoing operational efficiency of each Institution and ensure the skill needs of industry are met. During 2012 extensive effort was invested by senior management and the Council in shaping the Partnership, working through what it means to be in a close strategic and operational partnership in the same region; and with no precedents to follow. This involved intensive, information sharing and planning. It resulted in a common set of priorities for action and investment by each Institution over the next three years. The priorities for the Strategic Partnership are set out and interwoven in the three-year Investment Plan that was approved by the Tertiary Education Commission in late 2012. It is my goal to ensure that over the next three years the Strategic partnership between WelTec and Whitireia delivers an enhanced and more efficient regional network of vocational education provision in the Wellington region along with greater efficiencies across both institutions.

Computer Power Plus In 2012, as a joint venture with Whitirea and part of our Strategic Partnership, we acquired the assets of an information technology Private Training Establishment (PTE). Computer Power Plus was formerly the New Zealand operation of the Computer Power Institute - one of the biggest providers of IT training in New Zealand. It is a logical synergy with WelTec’s own IT offering and we were pleased to be able to help the students when Computer Power Institute went into liquidation. Despite some challenging times and a change of ownership more than 80 students graduated in 2012 with certificates and diplomas in 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 quality hospitality school in the CBD. It has also taken the support, and faith, of many people in our wide community of influence. The new campus takes our award-winning and acclaimed hospitality education closer to Wellington industry. It also provides an excellent and inspiring environment for staff and students.

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Minister for Tertiary Education, Skills and Employment, Hon Steven Joyce officially opens the new School of Hospitality campus on 24 October 2012

Hon Steven Joyce officially opens the new School Hospitality campusscholarship on September 28,2012 2012study in Business Administration Levels 3 and 4 Yvanah Kiaofreceives the Council for her

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Student Accommodation During 2012 the Council approved a business case for student accommodation in Wellington. Being able to offer accommodation will help Council’s goal of growing the international student market in Wellington. A suitable site was found and the Council approved entering into a long-term lease for premises at 222 Willis Street. The building was gutted, earthquake strengthened and refurbished at the start of 2013 and when complete will provide 280 beds in a purpose-designed and built high-standard facility. It is scheduled for occupation in early 2014.

Strong financial management and surplus at end of year Total SAC funding was achieved with the WelTec parent finishing 2012 with an operating profit of $1.6m representing a 2.9 percent return. The Group result, incorporating WelTec and WelTec Connect Ltd, showed a 2.2 percent surplus equating to $1.2m. Total operating revenue at $55m, an increase of almost 5 percent over 2011 was very pleasing. The Schools of IT and Business had an outstanding year achieving higher than budgeted domestic and international student numbers. Securing sources of other income remained a high priority. The institute completed the year by showing an improvement in this area by almost 30 percent more revenue compared with 2011. This was partly attributable to the profit share from the investment in Computer Power Plus. Offsetting this good result was marginally higher than anticipated costs of services, but crucially for a tertiary education institution personnel costs were maintained to less than 60 percent of income. Net assets of almost $73m were maintained, with improvements in relation to debt and income in advance. The year end cash position of $8.7m represents a very good result as $7m was invested in 2012 in the new School of Hospitality. The minimum 12.5 percent cash cover position was exceeded with 25 percent achieved at year end.

Acknowledgements I thank my Council colleagues for their ongoing support and guidance this year. On behalf of the Council, I again thank our Chief Executive, Dr Linda Sissons, who continues to lead WelTec with the wisdom and courage for which she is widely recognised. With all its successes the year was both rewarding and challenging. Linda’s leadership creates an environment that fosters achievement and engenders support for WelTec.

More culinary accolades In 2012 WelTec again won the national Toque D’Or cooking competition, following on from success in 2011. The Nestlé Toque d’Or is New Zealand’s longestrunning and most prestigious student cookery and food service event. It is held in 17 countries around the world and has launched the careers of many world-famous chefs, including Jamie Oliver. WelTec students Beth Christieson and Wei Jun Lee triumphed over 20 culinary students from around New Zealand and the Pacific to create six covers of a threecourse meal in just two-and-a-half hours. The team’s front of house competitor Iain Charlton served the dishes to invited guests. The panel of judges included leading chefs and culinary professionals. WelTec tutor and chef mentor Ray Morrell said the most important factor in the team’s win was teamwork. Students were supported not only by everyone on the School 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 dedicated people. WelTec staff and management have worked hard to achieve an outstanding result in 2012. Our students and our support in the community are the evidence of that commitment.

Hon Roger Sowry ONZM Council Chair

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Students First In 2011 after extensive research and consultation the Councils of Whitireia and WelTec formed a strategic partnership known as ‘Students First’.

Students First Partnership In 2012, a single combined Council was established to govern and

guide a consistent strategic direction for tertiary level vocational education in the Wellington region.

In 2011 after extensive research and consultation the Councils of Whitireia and WelTec This is the first example of a singleknown combined Council governing formed a strategic partnership as 'Students First'. two tertiary institutions in New Zealand.

Great teamwork and support

In 2012, a single combined Council was established to govern and guide a consistent Both institutions are committed to working together as primary strategic direction for tertiary level vocational education in the Wellington region. Bachelor of Information Technology students Jonathan partners to increase the educational benefits for students in the This is the first example of a single combined Council governing two tertiary Gan and Phil Carman won the 2012 New Zealand Cisco Wellington region, improve the ongoing operational efficiency and CCNA NetRiders Competition. The pair took on teams institutions in New Zealand. ensure the vocational skill needs of industry are met.

from tertiary education institutes around the country to

Both institutions committed working together as of primary partners to increase secure the title. The two individual are institutions have to a combined EFTS count the educational benefits for students in the Wellington region, improve the ongoing 9,431, a total of 18,058 students, $118m in annual revenue and Jonathan and Phil attributed their success to great team operational efficiency andstaff. ensure the vocational skill needs of industry work are met. over 900 full-time equivalent and good tutors. They acknowledged that team The first of theinstitutions combined Council 2012 was to identify The twopriority individual have a incombined EFTS count of 8,500, awork total isofimportant 19,000 in information technology, as much of the work involves problem solving. Jonathan and key projects for the partnership. Nine were identified and now students, $110m in annual operational revenue and over 600 full-time equivalent staff. form the strategic direction. The work completed on these projects

Phil also said the support and encouragement WelTec

studentsfor receive from their tutors has many benefits for The first priority of the combined 2012 was to identify key projects throughout 2012 provides the essentialCouncil pillars forinsuccess in 2013. students. the partnership. and now thefor strategic direction. The They believe the fact that their tutor is a Cisco The main focus of Nine these were being identified around direct and realform benefits certified network professional and WelTec’s Petone work completed on these projects throughout 2012 provides the essential pillars students. campus has a Cisco lab also gave them an edge. for success in 2013. The main focus of these being around direct and real benefits This first year of the strategic partnership has been challenging The Cisco competition is a great way for IT graduates for students. and rewarding. Staff have embraced the change and worked emerging into the industry to be noticed by potential

collaboratively positivepartnership results. This first year to ofachieve the strategic has been challenging and rewarding. Staff employers from international companies. Many IT employers, have embraced thefirst change and worked collaboratively to achieve positive results.particularly in networking, make WelTec their Key priorities in the year included: combining governance processes for one Combined Council; a combined Academic

first port of call.

Key priorities in the first year included: combining governance processes for one Board with an external Chair; developing a Shared Services A developing WelTec team Combined Council; a combined Academic Board with an external Chair; a also won the New Zealand Cisco Strategy; developing a Shared Campus Planning Strategy; competition in 2011. Shared Services Strategy; a Shared Campus Planning Strategy; developing developing a shared brand,developing joint domestic and international amarketing shared brand, joint with domestic and international marketing and Advisory Committees. and working Advisory Committees.

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Ma wai raa, e tau rima Te Whare Wananga o te Awakairangi Ma te tika Ma te pono Ma te aroha e Who will care for this place of learning? This place called Awakairangi Integrity will Truth will And so too will love

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Chief Executive’s Report WelTec touches the lives of many people. Our reach goes far beyond students and staff, it extends out into the wider community, as well as into the businesses and industry that depend on our projects, graduates and research for their own success. We have a major impact on the country’s economy, delivering many of the people, knowledge and skills that build and sustain our country. So, while we are proud of all we’ve achieved in 2012, we share our successes and achievements with a large number of stakeholders. We again owe a debt of gratitude to the iwi, businesses and other stakeholders who partner with us so that our students can have positive outcomes. Our Educational Performance Indicators, which are covered in detail later in this report, are very positive. Provisional TEC results for 2012 show WelTec has the second highest course completion rates of all ITPs at 81 percent. This is an outstanding result and I congratulate all academic staff and those staff providing services and support to students, particularly the student mentoring and Tamaiti Whangai staff. Te Runanganui o Taranaki Whanui continued to play a key role in engaging young Maori in tertiary education in the Hutt Valley and provided valuable input to the Chief Executive’s office and Tamaiti Whangai team. Pasifika Church Ministers from the Wellington region joined with WelTec and Whitireia to support Pasifika scholarship students who were entering tertiary education for the first time under a new TEC funded initiative. Chief Executive of Business New Zealand Phil O’Reilly spoke at a breakfast we hosted in May 2012. He congratulated us on the things that we are doing in Wellington and the Hutt Valley. He noted that WelTec is very adept at playing in the real world and that polytechnics are a safe place for business. We are local and can take science, technology, engineering and maths into practical contexts. He commended WelTec’s contribution to assisting business get strategic and lead innovation. We also believe that is where our strengths lie.

Strategic Partnership with Whitireia The Strategic Partnership with Whitireia has established a combined Council and Academic Board. Drawing on the strengths of both institutes we are able to give students easier access to a diverse range of programmes. Nine key projects were agreed for 2012. Excellent progress was made on all projects with staff from both institutes working together to establish and deliver project outcomes. Dr Peter Coolbear was appointed to the role of independent Chair of the Combined Academic Board. Peter is the Director of Ako Aotearoa, New Zealand’s National Centre for Tertiary Teaching Excellence. Ako Aotearoa’s vision is to contribute to the best possible educational outcomes for all learners which is exactly what the Combined Academic Board will be focused on through the establishment of new collaborative relationships.

Reaching beyond our shores In 2012 we signed an agreement with Guangxi Polytechnic of Construction (GPC) in China. GPC is a highly respected and specialised construction school offering three-year diplomas in architectural 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 in China and then move to New Zealand to complete the last year of WelTec’s New Zealand Diploma in Engineering (Civil) and the Diploma in Creative Technologies. This is an exciting arrangement that will see the joint development of curriculum and the exchange of staff and students between the two institutes from 2014. We were invited back to Hong Kong Cyberport in 2012 to deliver a creative technologies programme. Cyberport is a creative digital community, owned by the Hong Kong Government, that nurtures start-ups. The relationship has the potential to attract even more students in the future, as well as a unique teaching and learning experience for WelTec tutors

Technology Transfer Vouchers Through our subsidiary, WelTec Connect Limited, we gained three new technology transfer vouchers. Technology transfer vouchers allow accredited institutes of technology or polytechnics [ITPs] to make a positive contribution to the research and development of existing industries and to the growth of new industries. These three projects gained from a range of our services, including IT programming, digital media, process and product development as well as business and capability development. They provide an important opportunity for WelTec staff, students and international student interns to work on projects with industry alongside WelTec Connect’s staff.

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Scott Bregmen, teaching rhythm and timing to his CVLS students

Special success

Close ties with Maori

It was an acknowledgement of the difference we make to people’s lives that earned us increased funding through the Special Education Supplementary Grant (SSG) fund. This funding was announced in 2012 and is to support learners with medium to high special needs.

In 2012 we asked Professor Rawiri Taonui, Te Ara Poutama from the Faculty of Maori Development at Auckland University of Technology, to review our approach to not just the education we deliver to Maori students but also our engagement with Maori communities.

Our Community and Vocational Learning Skills (CVLS) programme has been very successful for some time. One of the tutors on the programme, Scott Bregmen, was recognised in 2010 with a Te Ako Aotearoa Tertiary Teaching Excellence Award.

Professor Taonui’s report commended our Tamaiti Whangai programme of student support and recognised our high level of good will and commitment toward making a difference for Maori students (there is more detail on Tamaiti Whangai later in this report). He also commented on our good relationship with mana whenua in the Hutt Valley. He noted the 2012 renewal of a Memorandum of Understanding with Te Runanganui o Taranaki Whanui first signed in 2008. This is an important connection for us. We also signed an Memorandum with Waiwhetu Marae in 2012, recognising the marae as the hub of Te Atiawa and formalising our relationship with them.

The majority of students who have studied on the CVLS programme typically 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. Our CVLS students not only participate throughout the year, but all have gone on to successfully complete their qualification. The new funding of $136k enables us to provide tutorial support in the classroom so specific learning requirements are met and learners can fully participate in their studies. With the extra funding support and SAC funding, we are offering another programme at Level 1 from 2013 to meet the high demand from the Wellington region for programmes of this type for learners with special needs.

International Industry Certifications Training Our School of Information Technology was officially recognised as the first National Academy for CompTIA throughout New Zealand. Covering a number of service and support roles in the IT industry this is a valuable opportunity for our students. They will be able to gain vendor-neutral international certifications confirming they meet industry needs. Through this new certification employers will recognise that WelTec students leave WelTec with foundation level knowledge and skills to perform IT roles. As a National CompTIA Academy we plan to run ‘train the trainer’ sessions for other educational institutes, industries and businesses.

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The number of young Maori entering tertiary education, especially at places like WelTec, will continue to increase. The way we engage with Maori and support them to achieve their educational goals is critical to our success, as well as theirs.

Graduate Exhibition Success Content: Raarangi Uupoko was a remarkable exhibition of work from 30 graduates of our Bachelor of Creative Technologies, held at the New Zealand Academy of Fine Arts Galleries in Wellington. Wellington Mayor Celia Wade-Brown launched the exhibition on the eve of The Hobbit premiere congratulating graduates on their achievements, and highlighting the work opportunities for graduates in Wellington. Bachelor of Creative Technologies students are encouraged to specialise in their chosen field whilst developing skills that lead them to work anywhere in this exciting and innovative industry – an industry which is particularly important to the economy of the Wellington region. In this degree programme students set goals, collaborate and are encouraged to lead projects. The exhibition was itself a remarkable project, attracting positive attention from employers, as well as visitors.


Dr. Linda Sissons and Pasifka Ministers at Pasifika Scholarships event

The film, digital and creative industry in Wellington is one of the region’s biggest employers with a workforce of almost 9,800.This creative workforce is expected to increase by more than 600 over the next four years. Occupations in this industry continue to appear on the New Zealand Immigration long-term skill shortage list.

Corrections partnership We have been working with the Department of Corrections since 2008 to help them achieve their aims of reducing re-offending by providing prisoners with increased post-release employment potential. Our relationship has grown since then and now, as well as delivering trades training at Rimutaka Prison in purpose-built facilities, we also moderate and manage Corrections’ own delivery of training at other prisons around the country and support other ITPs’ delivery of trades and technical training for the Department of Corrections through the use of WelTec’s programmes of study. Over the last four years this training has extended from the initial offering of painting and decorating and small motor automotive, to now include carpentry, brick and block laying and engineering. WelTec tutors teach technical skills in the prison workshops supported by Corrections custodial officers. Overall course completion rates are as good, and often better, than those of comparable programmes delivered at WelTec’s main campus. On release 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 Corrections achieve their objectives to reduce the rate of re-offending, to contribute to positive employment outcomes and a more positive future for former inmates as they re-integrate into communities.

Meeting emerging demands In 2012 we continued to recruit and train the tradespeople that will be needed to rebuild Christchurch. As the closest training provider to Christchurch, we are in a good position to meet the demand for skilled tradespeople who are willing to move. Later in this report we go into more detail about how we have done that. Along with our Strategic Partner, Whitireia, there has also been the opportunity to support the Government’s Pasifika Trades Strategy with scholarships for students of Pacific Island descent to learn construction and other trades skills. We have done this in collaboration with the Pacific Island community, in a uniquely Pacific way, with outstanding results. It is just such strong connections with industry, communities and policy makers that put WelTec in a good position to meet current and future education and training needs. We have done that well in 2012 and have sound plans in place to continue in the future.

Acknowledgement Our values of challenge, empathy and growth which we applied in our approach to work and to students learning saw us succeed in 2012. I would like to thank the Executive Management Team and all my colleagues at WelTec for supporting the Institution and I look forward to new challenges in 2013.

Dr. Linda Sissons CNZM

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Rebuilding Christchurch Delivering trades skills to meet emerging demand from the building and construction industry. We welcome the Government’s investment in us to train the people needed by the building and construction industry. Last year we trained around 1300 people in carpentry, plumbing, painting and decorating, brick and block laying, engineering and electrotechnology. The expansion of our trades delivery is timed to meet the expected impact in 2013 of Christchurch’s future building needs. This high industry need is expected to last for five years for residential builds and 10 years for commercial construction projects. After a low period in the building and construction industry over recent years it is even more important now to boost the numbers of pre-trade staff as well as skilled tradespeople. Research, testing, consulting and information company BRANZ says that at least 40 percent more people will be needed to rebuild Christchurch and build affordable housing in Auckland. As there will be a lot of movement of tradespeople around the country to take up these opportunities, skilled people will be needed everywhere. Our Build Your Future campaign which started in late 2011 as a direct response to the call to action from the Government to provide skilled tradespeople for the rebuild of Canterbury, really started to gain momentum. The Government announced additional funding for ‘priority trades’ in late 2012. WelTec, with its long history as a trades training provider, offered as part of its Investment Plan negotiations to continue delivering to this cohort. Our Engineer Your Future campaign, designed to encourage more people to consider training for the engineering industry, came into sharp focus in late 2012 when the Government announced 1000 more engineering places across the public tertiary education sector to be achieved in 2013. In 2012 our focus for recruitment was on secondary schools in the greater Wellington region. This saw the development of joint collateral with Victoria University of Wellington’s School of Engineering. Alongside this was continued collaboration with the Metro Group on promoting the Bachelor of Engineering Technology nationwide This year, working with Whitiriea we made entry into trades even easier, with pre-trade programmes offered in Otaki and the Kapiti Coast. Feedback from the building industry on the quality of our graduates and their skills is very positive. Employers in Wellington and Christchurch were linked up with our graduates. The SCIRT (The Stronger Christchurch Infrastructure Rebuild Team) bus visited Petone in late 2012 and more than 70 WelTec and Whitireia trades graduates signed up for work in Christchurch.

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Pasifika Trades Pasifika students gained new opportunities. We supported the Government’s Pasifika Trades Strategy with scholarships for students of Pacific Island descent. The Government’s strategy aims to train 300 Pasifika people in the trades required for the rebuild of Christchurch and to support infrastructure developments across the country. In Wellington WelTec and Whitireia worked together with Pacific Church Ministers to launch the initiative and to recruit Pasifika students into the programme. This involved students learning carpentry, painting and decorating, brick and blocklaying, plumbing, landscape construction, mechanical engineering, and electrical engineering. In 2012, 15 carpentry students of Pacific Island descent studied for a Certificate in Carpentry at WelTec. Their final project for their qualification was the construction of a house, which required excellent team work as well as great carpentry skills. The students impressed their tutors with both. 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 of the Fellowship of Samoan Ministers in the Wellington region who was right behind the initiative from the start, commented that it was a great initiative and heartening to see Pacific Island people succeeding in their programme of study. WelTec’s Pasifika Advisory Committee, with members representing all the major nations in the Pacific, also provided liaison and support for the students who came from many different backgrounds.

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Educational Performance Our students’ success was our success

2012 Actual SAC EFTS*

2012 Sector Median

Our educational performance attainments in 2012 showed a consistent trend of improvement across all four of the key educational performance indicators.

Course Completions

81%

78%

Our performance compared very favourably to the sector as a whole and exceeds the median in course and qualification completions. We are in the upper quartile for both course and qualification completions in the grouping of all ITPs.

Qualification Completions

72%

61%

Progression to higher level study

38%

38%

Retained in Study

66%

65%

To make these improvements in educational performance we maintained a strong and sustained emphasis on continuous improvement in teaching and learning through effective selfassessed evaluation. This was matched by targeted student support services that secure success for learners.

The following section reports on educational performance for SAC and Youth Guarantee funded EFTS as per the Investman Plan 2011-13

Course completions: 2010 Actual

2011 Actual

2012 Target

2012 Actual

76%

76%

79%

81%

A strong focus on educational performance at the course level has resulted in a pleasing course completion improvement to 81 percent, which exceeds the Investment Plan target for this measure by a healthy margin. We have underpinned our strategic emphasis on educational performance with a range of tactical initiatives. Our course completion achievement for Student Achievement Component students ranked us second in the whole ITP sector, which has a median of 78 percent in 2012.

Course completions in priority groups: Maori 2010 Actual

2011 Actual

2012 Target

2012 Actual

65%

68%

74%

76%

There was particularly significant improvement in course completions in this priority group. Between 2010 and 2012 Maori course completions at WelTec rose by more than 10 percent. Much of this gain was in 2012. Our highly successful Tamaiti Whangai initiative, in partnership with Te Runanganui o Taranaki Whanui, contributed greatly to this outcome. The strong performance in 2012 took us closer to our goal of achieving parity in educational performance for this group of learners.

Pasifika 2010 Actual

2011 Actual

2012 Target

2012 Actual

64%

65%

70%

76%

There has also been a very strong improvement in the course completions achieved by our Pasifika learners. During 2012 the strengthening of relationships with our Pasifika communities, the impact of the Pasifika trades scholarships and our close attention to supporting the needs of this learner group have all contributed to this significant rise in educational performance.

Learners under 25 2010 Actual

2011 Actual

2012 Target

2012 Actual

72%

75%

78%

80%

The course completion improvement trend across priority learner groups in 2012 also extends to our younger learners. An improvement of five percent takes the completion rate to 80 percent which is a very creditable result given the often-accepted ‘at risk’ view of this cohort. As well as being above the sector median, this outcome places this group close to achieving parity in course completions overall. A significant proportion of our student population is under 25 (64%) so we have focussed our teaching and support service on meeting 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.

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Qualification completion 2010 Actual

2011 Actual

2012 Target

2012 Actual

64%

62%

68%

69%

While qualification completion statistics as assessed and reported by the TEC are prone to influence by factors such as the number of students studying part-time or a sudden growth in year-one intakes of multiple year programmes, we have achieved a strong improvement in our qualification completions in 2012 and exceeded our target of 68 percent. The ITP sector median for SAC qualification completions in 2012 was 61 percent. Our 2012 performance against this measure places us well above the median with a ranking in the upper quartile.

Priority groups qualification completion 2010 Actual

2011 Actual

2012 Target

2012 Actual

Maori

59%

51%

65%

60%

Pasifika

47%

42%

62%

62%

Aged under 25 yrs

56%

56%

68%

63%

QUALIFICATION COMPLETION

There were improvements in the rate of qualification completions in all three priority learner groups in 2012. Pasifika learners’ achievement jumped by a very significant 20 percent in this performance indicator, and all three groups moved towards parity in attainment. Overall, the improvements in course and qualification completions for all three priority groups tell the story of the successes we are having with these groups. Our strategy of working in partnership with community groups, iwi, secondary schools, employers, social support services, and other key stakeholders ensures there is a vital context for learners from the priority groups to succeed. We will continue to strengthen these relationships so we can support these learners to even greater success.

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Scholarship recognises commitment Bachelor of Creative Technologies student Deidre Utupo was one of more than 50 recipients of WelTec scholarships in 2012. Deidre was awarded a Council Pasifika Scholarship, which is awarded to students who demonstrate a genuine desire to succeed in their chosen field of study. Applicants must demonstrate how their study will contribute to Pasifika community development in New Zealand. Of Samoan heritage, Deidre grew up in New Zealand but returned from the Gold Coast, where she had moved with her parents, to study digital media at WelTec. She liked the style of learning, tutor and student support and applied approach to WelTec’s creative technologies degree. She says WelTec also has a fantastic reputation in the digital media industry - both in New Zealand and overseas. Deidre achieved excellent academic results in her first year of study and when she completes her degree she plans to have her own digital media business.

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Research For the first time in 2012 WelTec entered the Performance Based Research Fund. This was a significant undertaking by the Institution assisting staff to prepare evidence portfolios for submission to the Tertiary Education Commission. 17 portfolios were submitted mid-year which were then assessed throughout the balance of 2012 by the various subject panels. Results are available April 2013. In 2012 we continued to build on the distinctive characteristics of our applied problem-based research approach. Our focus continued to be on working closely with business and industry, especially small and medium sized businesses, to develop and deliver creative, technology and knowledgebased solutions that meet specific needs. This research makes a direct contribution to smaller businesses, their productivity and their contribution to economic development. WelTec’s unique research culture fosters industry partnerships and an understanding of business needs. This approach is illustrated in the following profiles on WelTec researchers whose work is showcased here. Their research work also benefits WelTec students and contributes to our teaching and learning practice. WelTec’s approach to research delivers benefits for students, contributes to our industry partners and offers professional and academic development for staff. Further information on research undertaken by WelTec is outlined in our 2012 Annual Research Report. www.weltec.ac.nz/Portals/0/pdfs/2012-Research-Report_Web.pdf

Tony DeGoldi

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Joany Grima

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A Great Year for Research Our research in 2012 covered professional areas, trades, technology and activities to increase the productivity of local and national businesses.

representing many different ethnic groups. While overseas research shows positive outcomes from group work, Trish and Jill have confirmed that New Zealand teaching staff have often been unprepared for managing group work so it is beneficial for students and ensures academic results that honestly reflect students’ input and skill. Trish’s research has confirmed that for students to learn the necessary skills to work well in groups, their teachers need to structure and support group work properly.

Much of our research is aimed at building New Zealand’s economy, something the Government holds as a priority. Our ongoing involvement in the Ministry of Business, Innovation and Employment Technology technology transfer voucher programme further demonstrates that we have the expertise to help businesses with economic growth.

Ako Aotearoa, the National Centre for Tertiary Teaching Excellence, has recognised Trish and Jill’s work by commissioning them to create a national education programme for tutors to learn how to make group work effective in teaching.

2012 was our first year in the Performance Based Research Fund. Participating allows us to benchmark ourselves within the sector and set ourselves increasingly high standards for research into the future. It is important that our research informs the teaching of the degrees we offer. We updated our research policy and established a centrally-managed Research Office in 2012. Here are just a few examples of the exciting and valuable research being done at WelTec. More detail on all the research undertaken at WelTec in 2012 is available in our 2012 Research Report.

Research proves success of WelTec diploma Joany Grima’s two research projects in 2012 put the spotlight on the Graduate Diploma in Event Management, a programme she has taught since its introduction in 2010. Half the weighting of the one-year full-time programme is based on an industry practicum for each student. For her research Joany approached practicum hosts to find out about their experience of having a student working for them. She then looked at the employability outcomes of graduates to find out if they have been successful in securing employment in the events industry. The results were positive with eighty percent of hosts being enthusiastic about the practicum experience and one third of hosts going on to employ the student. Graduate employability was also excellent, with approximately 65 percent of students employed in industry within six months of completion.

Working together Trish Baker, a researcher in WelTec’s School of Business, continued her study into cooperative learning in education (group work). She continues to gain important insights on the subject after 12 years of investigation and now collaborates with Whitireia researcher, Jill Clark. Trish and Jill’s research investigates student group work, particularly diverse groups, which include international students

With five published studies in 2010 and 2011, Trish’s research contributed to WelTec’s participation in the 2012 PBRF quality evaluation of research.

Researching professional practice The subject of WelTec Design Lecturer Tony De Goldi’s research is nearly two decades of his own career in Maori theatre in Aotearoa. As well as looking closely at his contemporary theatre work, Tony’s research considers its place in the wider context of New Zealand art and design. Tony then brings this knowledge and awareness back into his interior design, theatre design and construction teaching at WelTec. In 2012, Tony’s set and costume design for the NBR New Zealand Opera’s production of Jenny McLeod’s opera Hohepa were highly acclaimed for their important contribution to realising both the writer’s and director’s vision for the project, as well as contributing to Tony’s ongoing research. As well as teaching, Tony is now mentoring and inspiring two young designers, both WelTec graduates, as they work on their own theatre designs. The designers benefit from the 20 years he has contributed during a formative period in Maori theatre.

Reducing industrial waste Silver Lining, Hutt City Council’s commercial waste reduction project, is tapping into WelTec’s knowledge, and research into industrial waste management. The Silver Lining Project aims to help local businesses to reduce waste to landfill, and to identify long-term reuse and recycling opportunities. In 2012, Bob Robinson from WelTec’s Centre for Smart Business undertook Silver Lining’s waste scoping studies. The studies researched solutions to reduce, reuse and recycle business waste. Bob, who has a background in manufacturing and is widely recognised for his knowledge in resource efficiency and sustainability management, has worked with local body councils for the last seven years on environmental programmes. He describes his role as being to research solutions, make connections between businesses and facilitate waste reduction. Because of the way WelTec Connect’s Centre for Smart Business works, the Silver Lining Project is also building WelTec’s knowledge base, so that it is available to others in the future.

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Maria Ulloa

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Higher Learning We celebrated with several staff who achieved higher qualifications this year. Our students will benefit from the skills and knowledge that these successful teachers have gained from their research. Dr Maria Ulloa: Teaching to Care Maria Ulloa’s research for her PhD in psychology from Massey University examined emotional interactions between early childhood teachers and preschool children. Called Teaching to Care, the research has not only gained Maria a valuable qualification but has significant implications for pre-schoolers’ mental health, educational practice, and policies to protect children from risk. Past research has demonstrated that successful teacher-child interactions in early childhood settings are critical predictors of mental health, social competence, and academic achievement. Maria’s research, which involved both qualitative and quantitative measurement, confirmed this. Maria teaches psychology on WelTec’s counselling, teaching and youth development programmes, as well as providing teaching support for psychology classes on the hospitality programme. She says that in completing her PhD she has learned some important skills that help make her a better teacher. “I have done lots of post-graduate study before, but this was my first time of doing only pure research. It has consolidated my knowledge and understanding of psychology and the research process,” says Maria. “And I find that the experience of doing applied research makes it easier to explain to students. It has also reminded me about how it is for them.” This kind of empathy is important for Maria, who joined WelTec in 2011. “I’m impressed with how much pastoral support students get. 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 girls James Mackay’s PhD research project, investigated the effect of gender on the experience of learning electrical concepts for a group of design and technology teacher trainees at a South African University. James’ research confirmed that for this group of students, gender, more than educational background, was the dominant factor not only in attitudes towards women in the research group learning electricity, but also their conceptual understanding on entry into the course. “It was certainly not a lack of intelligence,” says James. “But rather a belief that electro-technology is the preserve of men and boys and that their identity as ‘girls’ does not include them being able to perform electro-technical tasks. “Female students also had lower levels of self-efficacy, and greater levels of anxiety compared with male students when faced with performing electro-technical tasks such as physically wiring and soldering.” The research showed that improving female students’ self-efficacy in a variety of ways, including developing mastery of electrotechnical processes, meant that they eventually performed as well as male students on the task. James started his PhD while working at the University of KwaZuluNatal in Durban, South Africa. He completed it part time while working as Quality Teaching Project Leader at WelTec. He says the research has direct application to his work. “My experience of overcoming barriers to learning has helped me design learning programmes to support teaching staff with their own and their students’ learning challenges. I want to find ways to make things better for students at WelTec.” James is planning more research for the future, including looking at how engineering students understand physics concepts, gender and the trades, and use of language in the trades.

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Tamaiti Whangai Team Leader, David Lomax with student

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A Supportive Learning Environment We have a very strong focus on supporting our students to succeed. It takes a whole team, and that’s what WelTec is, to make a difference in the lives of our students. Success for Maori There is a significant and growing rise in Maori student numbers at WelTec. So we are pleased with what was achieved forMaori students at WelTec in 2012 - both in terms of student success but also in the quality of our relationships with Maori stakeholders. As well as student outcome data, further evidence of this success is a comprehensive review and report on current and future strategies for Maori achievement at WelTec by Professor Rawiri Taonui, Te Ara Poutama – Faculty of Maori Development, AUT – Auckland University of Technology.

Support for students Our Leaning Commons area provides academic support to all WelTec students. Our staff help students with their individual study and learning needs. Several innovations to the service in 2012 brought about even great student success. For the first time, Learning Commons tutors joined classrooms to team teach with the subject teacher. Their emphasis was on literacy and numeracy. As a result, the literacy and numeracy of the students in these classes significantly improved and students’ qualification completion increased. We recruited Learning Commons tutors with specific skills sets, such as computer aided design and drawing, as this was what many students needed. The implementation of the Moodle learning management system is a key feature has improved students’ technology-based learning experiences. Moodle has allowed us to effectively blend face-to-face time with a variety of technology-enhanced learning resources.

Professor Taonui’s report commended our Tamaiti Whangai programme of student support for its iwi-driven nature and for the effectiveness of its mentor model. He said that what Tamaiti Whangai does is quite remarkable, all the more so for having hard data to prove its value. Tamaiti Whangai was established in 2008. We work closely with our partner, Te Runanganui o Taranaki to support the achievement of their vision for Maori education. In 2012, Tamaiti Whangai increased its reach across all our programmes. Tamaiti Whangai mentors provide support to Maori students on kaupapa Maori principles, looking at the ‘whole’ student and ensuring each individual gets the mentoring and pastoral support they need to achieve. Tamaiti Whangai also works with our teaching staff so they are part of a supportive environment and can 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 WelTec Warriors Under 19 League team, a hit with many Maori students, also did well. Professor Taonui made a number of recommendations that we started to put into place in 2012. Initial steps include establishing a senior Maori advisory position on our Executive Management Team to be the Runanga’s representative in 2013. This will provide a Maori perspective and Te Ati Awa view to our work – fundamental to our Treaty partnership relationship. Additional Tamaiti Whangai mentors plus a new position of Tamaiti Whangai Team Leader were put in place.

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WelTec Connect’s Andrew Rodger with the YouBikeTM

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WelTec Connect in 2012 In its second year of operation WelTec Connect Ltd (WCL) expanded its work with industry in research and development, technology transfer and capability development. This approach typifies the way that WelTec works with businesses, which benefit from our help with developing products, processes and skills. In turn, we gain a growing number of industry-led projects for students and staff, collaboration opportunities and income. There were many highlights in 2012 including a wide variety of industry-led student projects ranging from specialist machinery to software development to market research. We played a central role in developing the prototypes of the unique YouBikeTM and getting it ready for market. YouBikeTM is a unique product to help people living with disabilities or injuries to exercise safely, easily and effectively. Successfully launched at the prestigious REHACARE exhibition in Dusseldorf in October 2012 and now finding markets around the world, the lightweight construction and advanced design of the YouBikeTM fills a gap and showcases WCL’s capabities. Hutt City Council contracted us to work with several local businesses on projects 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 digital community that nurtures technology start-ups and entrepreneurs. The workshop, on the creative technology process in three-dimensional depth sensing interactivity, gained high praise from Cyberport as well as those who attended. We worked with Lean Group Consulting, Training New Zealand and Grow Wellington to deliver the Competitive Edge lean manufacturing programme to six local businesses. The programme as has been successful in delivering productivity improvements.

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Staff attend WelTec Day in the Student Hub

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Our People We continued to invest in a range of development activities and health and wellness initiatives to support the well-being and capability of our staff. New capability unit established A new Capability Development Unit, which will support teaching staff to even greater levels of educational practice, was established for the start of 2013. Priorities for the new unit are the development of an induction process for new academic staff; delivery of the new Diploma of Tertiary Teaching and Learning (DTLT) teaching qualification and later a higher teaching qualification; ongoing development of processes to ensure that leadership, customer service and training for managers is in place to support teaching staff.

Health, safety and wellness We are proud of our excellent safety record. ACC confirmed that our health and safety performance is above average compared with comparable organisations. Given the wide range of industries on campus, this is a significant achievement. We place a high priority on health and safety and continue to review systems and processes, and delivery training and communication. We have set more specific objectives, using targets to ensure ongoing improvement. We continued with our staff wellness programmes in 2012. These are valued by staff, who make good use of the opportunities. As well as an employee assistance programme and a range of occupational health initiatives, we have an active social club with high membership and participation.

Staff awards WelTec recognised and celebrated excellence. The staff awards for 2012 were for excellence in research, leadership, customer service. We also reward team success and achievement. As well as acknowledging achievement, demonstration of WelTec’s values is an important criterion for awards.

Internal communications In 2012 we developed an internal communications strategy, which aims to increase two-way face-to-face communication with staff across WelTec. The strategy was developed with input from staff and emphasises the role of managers and team leaders in communications.

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Our Environment We are proud to have maintained our Enviro-MarkÂŽ NZ Gold status in 2012 and have taken further steps to help reduce our impact on the environment. We believe that even small improvements make a big difference. Introducing microfibre cleaning technology at both Church Street and Petone campuses helped reduce our use of chemicals. Joining a light bulb recycling plan and replacing all our bulbs to ones that last up to 400 percent longer further reduced our waste to landfill. We continued to act on advice from our energy management company, which identified incremental savings we could make. In 2012 this included changing our energy supplier to take advantage of the first all-of-government supply agreement. We ensured that the new hospitality facility in Wellington has built in energy efficiency features. We continued to work with Greater Wellington Regional Council on travel initiatives and the bus service between Porirua and Petone achieved critical mass in 2012. We continued with our seismic strengthening programme with a significant work program in 2012. This included strengthening C Block and replacement of the roof on A Block. Work on the T Block cafĂŠ and Learning Commons area and the stairwells in T Block and Church Street was approved to go ahead in 2013 and the Council approved a re-allocation of $2.55 million of capital funding from the 2012 budget to undertake this work.

Student contributes to sustainability Victoria Walch, a Bachelor of Engineering Technology graduate in 2012, majored in civil engineering and completed a project on raw water management of the Waiwhetu stream in the Hutt Valley for her degree. Victoria is looking forward to a career in civil engineering. Seismic strengthening in C Block

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National winner Hairdressing student Roha Garland secured a win in the national hairdressing competitions in 2012. Roha placed first in the novice category of the Editorial Stylist of the Year section of the New Zealand Association of Registered Hairdressers Editorial Photographic Awards. The competition required the stylist to create hairstyle, make-up and clothing on a model of their choice, and submit a photographic image suitable for a magazine cover. Roha was flown to Auckland to receive her award and trophy where she enjoyed the chance to network and learn about the industry. After first studying make-up artistry at WelTec in 2010 Roha worked in the film industry. She discovered that employers were looking for stylists capable of achieving a whole fashion statement on one model, rather than specialising in just one aspect. So she returned to WelTec to add hairdressing to her skills.

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Statement of Objectives and Service Performance Investment Plan Performance Commitments WelTec has agreed to use the following Key performance Indicators and Targets to measure its performance over the three years of the 2011 to 2013 Investment Plan.

Measures for SAC1 funded business: SAC and Youth Guarantee Funded provision Priority Groups – Participation

Actual 2011

Target 2012

Actual 2012

Proportion 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%

Actual 2011

Target 2012

Actual 2012

Weighted 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%2

Weighted 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%

Educational Performance

PRIORITY GROUPS - MAORI LEARNERS

Table continues over page > 1

Includes Youth Guarantees 2 Result is based on data collated by TEC. 2011 result reported by TEC in 2012 was 40% 2012 ANNUAL REPORT | 49


Educational Performance

Actual 2011

Target 2012

Actual 2012

Weighted 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 indicators

Actual 2011

Target 2012

Actual 2012

Student satisfaction

90%

97%

94%

Maori

95%

98%

97%

Pasifika

95%

94%

96%

Under 25s

91%

94%

95%

Actual 2011

Target 2012

Actual 2012

Number EFTS achieved

305

400

347

Weighted course completions

84%

83%

89%

Weighted qualification completions

87%

68%

82%

Student satisfaction

84%

98%

94%

Actual 2011

Target 2012

Actual 2012

70% (an additional 29% were work ready)

90%

66% (an additional 32% were work ready)

90%

100%

88%

89%

98%

93%

The proportion of course EFTS at levels 1 to 3 that have embedded literacy and numeracy

96%

95%

97%

Proportion of programme portfolio in vocationally-related education and/or training

100%

100%

100%

Industry input is a component for all Programmes during the Approval process

100%

Industry input is a component for all Programmes during the Approval process

100%

100%

100%

Measures for International Business Participation

Whole of organisation indicators Relevance Proportion graduates gaining employment or going on to further study 3 Relevant qualifications 4 Work readiness of WelTec graduates

5

Programme Portfolio

Proportion of portfolio endorsed by industry Proportion of portfolio in programmes that lead to a qualification on the national qualifications framework6

3

As assessed by annual graduate destination survey As assessed by annual Employer Satisfaction Survey 5 As assessed by annual Employer Satisfaction Survey 6 Based on qualifications registered under new criteria established in 2010 4

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Research and technology transfer

Actual 2011

Target 2012

Actual 2012

Number of research outputs – Total

197

250

217

- Industry related

59

45

88

- Quality assured

68

85

105

- Weighted points

366

370

365

Number of technology transfer activities completed

54

60

58

$525

$860

$435

Actual 2011

Target 2012

Actual 2012

Proportion of SAC funding achieved

104%

100%

100%

Total EFTS achieved

4,669

4,516

4,401

3,175

3,006

3,091

- International

305

400

347

- ITO

611

600

433

- Youth *

481 (108 YG 77 TA 295 STAR)

450 (110 YG 100 TA 250 STAR)

473 (103 YG 91 TA 279 STAR)

- Full fees

97

50

57

50

48

52

Risk rating against Financial Monitoring Framework

Low

Low

Low

Extent of improvements in Attributes as per CAMS Improvement Plan

CAMS technical solution implemented Description of assets improvement plan underway and asset information improvement is on track.

As agreed with TEC

Asset information improvement plan 78% complete.

External revenue gained (Research contracts and PBRF income) ($,000)

Financial performance

- SAC#

ACE (Adult and Community Education)

# Includes SAC and ACE but not Youth Guarantee * STAR, Trades Academy, Youth Guarantees

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Business Plan Performance Our Business Plan for 2012 continued to focus on the key strategic challenges we identified in our 2011 to 2013 Investment Plan. 2012 Priorities  Recruiting students for success  Supporting students to achieve  Making efficient use of facilities, equipment and resources to support learners’ achievement  Delivering high quality research innovation and technology transfer that informs teaching  Maintaining a positive institutional profile

CHALLENGE 2:

Growing international students and revenue We achieved 347.6 international student EFTS, representing 14 percent growth on 2011. This is an excellent result as nationally the international student market remained tight in 2012. Progress was made on opportunities that are likely to increase our student numbers in the future. An agreement was signed with Guangxi Polytechnic of Construction in China for graduates of selected civil 1 engineering and creative technologies (interior design) programmes to progress into programmes at WelTec, including the New Zealand Diploma in Engineering. We also started work with Whitireia on promotion into the Middle East and South East Asia that will have future benefits.

 Delivering ongoing financial sustainability

International student educational performance exceeded expectations, with a completion rate of 89 percent - more than six percent over the

We had a successful year on many fronts.

target of 83 percent.

100 percent of SAC funding was achieved, a prerequisite for additional Priority Trades and Pasifika scholarship funding. Financially, our parent operating profit of $1.6m exceeded budget by $0.1m, representing a healthy 2.9 percent return. This is a satisfying result given the changing government funding and policy settings and continued uncertainty as business began to emerge from the impact of the global recession.

CHALLENGE 1:

Growing commercial and non-government revenue Growth from commercial revenue streams via our 100 percent owned subsidiary WelTec Connect Limited, progressed during the year with a number of contracts in different stages of negotiation. In the financial climate gaining commitment from clients to projects was difficult. It has been our experience that the lead time from first discussions with clients to delivering a finalised contract is significantly longer than planned. As a consequence the total revenue from commercial revenue and research contracts of almost $800k was not as high as we planned for the year. To address this WelTec Connect has broadened its business development activity to bring in more clients and structure projects in a way that ensures they can be achieved in a shorter timeframe. Our investment in the Le Cordon Bleu NZ partnership also contributed to this goal.

CHALLENGE 3:

Developing Campuses to Support Future Delivery The completion of three levels of the new $13m campus for our School of Hospitality alongside Le Cordon Bleu NZ in Wellington’s Cuba Street was a highlight representing more than 2 years of planning and construction spanning twenty months. The new campus is a state of the art facility which can accommodate up to 540 students at any one time with a maximum of 700 students when the final level is developed. The Prime Minister launched Le Cordon Bleu NZ at a function hosted by the President of Le Cordon Bleu at a function in September. This was followed by the Minister for Tertiary Education, Skills and Employment, the Hon Steven Joyce launching the Wellington Institute of Technology School of Hospitality on 24 October 2012 at an evening event attended by Wellington’s hospitality industry and secondary schools. WelTec worked with the Hutt City Council (HCC) in developing a proposed change to the HCC District Plan (Plan Change 25). If approved, this plan change will create a Tertiary Education Precinct for WelTec’s Petone campus. At present education is not a permitted activity for the various zonings that relate to the Petone campus. A hearing has been convened by HCC in front of independent Commissioners in early April 2013 to receive submissions in relation to the proposed plan change. The Auckland campus was refurbished after a review of options for Auckland delivery confirmed that the existing site is the best option in the medium term. As part of the Students First strategic partnership, a WelTec and Whitireia joint campus development strategy was completed in 2012. The Strategy sets the framework and approach to campus development for WelTec and Whitireia for the next 5 years. Change to N Block at Petone campus and satellite delivery areas was put on hold whilst the strategy was developed resulting in Property, Plant and Equipment expenditure being below budget.

1

This figure represents the total investment. WelTec’s share was $7M.

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WelTec took a proactive approach to seismic strengthening at its campuses. The building programme to ensure buildings meet or exceed building standards continued into 2012. Stage 1 of WelTec’s seismic strengthening programme at the Petone campus was completed in February 2012 with the installation of a new light-weight roof for A Block and strengthening of level 3 of C Block. The Council approved expenditure of $2.55m for Stage 2 for strengthening of levels 1 and 2 of C Block and on parts of T Block. Whilst the C Block strengthening work was undertaken the opportunity was taken for a general upgrade to this building.

CHALLENGE 4:

Managing financial assets to ensure sustainability WelTec’s core business exceeded budgeted levels in 2012. Central to the achievement of this result was the delivery of 100 percent of core Investment Plan SAC funding. Achieving this threshold, combined with delivering 133 additional trades training EFTS compared to 2011, allowed WelTec to recognise additional Priority Trades and Pasifika trades funding. WelTec was again awarded a low risk rating by the TEC against the Financial Monitoring Framework. The following table provides a summary of our EFTS achieved. PERFORMANCE

2012 Target

2012 Actual

Proportion of SAC funding achieved

100%

100%

Total EFTS achieved

4,516

4,401

SAC (includes ACE)

3,006

3,091

International

400

347

ITO

600

433

450 (110 YG 100 TA 250 STAR)

473 (103 YG 91 TA 279 STAR)

50

57

Youth

Full fees

Our subsidiary, WelTec Connect Limited, did not met the financial contribution budgeted. 2012 was the second year of operations for WelTec Connect and the lessons learned during the year have been incorporated into the 2013 business plan for this subsidiary. Le Cordon Bleu NZ started delivery during the year, a significant milestone. Student numbers and core business financial results reached the business case target levels.

In March the Council gave approval for WelTec and Whitireia to jointly acquire the assets and revenue streams associated with the liquidated Private Training Establishment (PTE) Computer Power. Now rebranded as Computer Power Plus the financial results for the nine months to December achieved a positive financial contribution. We have plans to further improve the financial and educational performance of this joint venture in 2013.

CHALLENGE 5:

Assisting Maori, Pasifika and young people to achieve in tertiary education Participation by Maori, Pasifika and people under 25 largely exceeded our targets. Overall course completion rates for these groups exceeded our 2012 Investment Plan targets and significantly improved on 2011’s results. We continued to monitor student performance closely and work with those at risk through a range of pastoral and educational support programmes including targeted mentoring and numeracy and literacy support. A Youth Strategy to improve the educational performance for under25s was approved in 2012. Key activities from the strategy have been included in the 2013-15 Investment Plan. A report on Maori Success at WelTec endorsed Tamaiti Whangai and we resolved to add more resources to this successful initiative. The following table shows the proportion of Maori, Pasifika and youth studying at WelTec. These exceed the local population demographic for these groups. PRIORITY GROUPS – PARTICIPATION (SAC AND YOUTH GUARANTEE) Proportion Maori

2012 Target

2012 Actual

17%

19%

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%

• Levels 1 - 3

Financial and capital management continued to be improved during the year with the implementation and development of Technology One Enterprise Budgeting and Asset Management modules. This resulted in the Asset Information Improvement Plan being 78% complete by year end which provides a sound base for future asset replacement cycles. The combined functionality of these new modules improved the transparency of our operational planning and directly contributed to WelTec maintaining a ‘low’ financial risk rating with the TEC. 2012 ANNUAL REPORT | 53


Business Plan Performance CHALLENGE 6:

CHALLENGE 7:

Raising educational performance Course completion figures were an improvement on 2011 at 81 percent for the SAC and Youth Guarantee funded cohort, exceeding the Investment Plan target of 79 percent. Significant improvements occurred at all levels, with dramatic improvements for Maori and Pacific Island students. We closely analysed student data to better understand changes over the last three years as well as progressing initiatives to improve educational performance.

EDUCATIONAL PERFORMANCE Weighted course completions

2012 Target

2012 Actual

79%

81%

• Levels 1 - 3

73%

79%

• Levels 4 and above

85%

82%

68%

69%

• Levels 1 - 3

66%

73%

• Levels 4 and above

70%

68%

Student retention

54%

66%

Student progression (levels 1 – 3)

40%

40%*

74%

76%

• Levels 1 - 3

70%

74%

• Levels 4 and above

78%

78%

65%

60%

• Levels 1 - 3

60%

65%

• Levels 4 and above

70%

56%

70%

76%

• Levels 1 - 3

70%

76%

• Levels 4 and above

70%

76%

62%

62%

• Levels 1 - 3

60%

67%

• Levels 4 and above

64%

59%

78%

80%

• Levels 1 - 3

73%

80%

• Levels 4 and above

77%

80%

68%

63%

• Levels 1 - 3

66%

73%

• Levels 4 and above

70%

58%

Weighted qualification completions

PRIORITY GROUPS - MAORI LEARNERS

Weighted course completions

Weighted qualification completions

PRIORITY GROUPS - PASIFIKA LEARNERS

Weighted course completions

Weighted qualification completions

PRIORITY GROUPS - UNDER 25 LEARNERS

Weighted course completions

Weighted qualification completions

* 2011 result reported in 2012 54 | WELLINGTON INSTITUTE OF TECHNOLOGY

Maintaining a centre of excellence in trades and technology and ensuring programme delivery is sustainable WelTec collaborated with Whitireia in the delivery of carpentry programmes at Kapiti College and Otaki in response to the Government focus on Priority Trades and a clearly identified need for more tertiary training opportunities for local youth. We received strong local support for these initiatives from Grow Wellington, The Otaki Clean Technology Centre, Little Greenie green building foundation and Kapiti Coast District Council. We also continued delivery of Level 2 introductory construction training in the Wairarapa through a redesigned multi-trades offering in partnership with Nga Kanohi Marae o Wairarapa, a local marae consortium trust focused on providing training, employment and life skills opportunities for youth. Enrolment, retention and completion rates in this programme increased by 30 percent overall from the previous year with the majority of students re-enrolling on the first offering of a Level 3 Wairarapa carpentry programme. The Government prioritised funding for construction trades and to allow fees-free places for Pasifika students in the trades. The scholarship initiative attracted a high level of interest and competition for places on programmes which subsequently achieved excellent student success rates. The goals of these programmes were achieved by WelTec with the support of local communities. The relatively low rate of funding for these programmes does not recognise the capital investment required for delivery resulted in significant pressure on Schools to meet their financial objectives. Enrolments in Information Technology were again high in 2012 representing a 25 percent year on year improvement.

CHALLENGE 8:

Developing a unique WelTec delivery style that incorporates face-to-face and technologyfacilitated learning to assist achievement The implementation of the Moodle Learning Management System, which commenced in 2012, is a key initiative that has directly impacted on our students’ technology-based learning experiences. This year we have tactically deployed education technologies in ways that are customised for particular teaching and learning situations. An example of this has been the collaborative work streams that the Bachelor of Engineering Technology staff have engaged in using a shared Moodle space, as well as their use of Adobe Connect technology to provide at-distance and blended learning opportunities. WelTec has made significant progress toward the achievement of optimally balanced learning facilitation; highly effective use of face-toface tutor-facilitated learning time, blended with a variety of innovative technology-enhanced learning resources offering a stimulating and engaging learning experience for our students. Recognising that our students are often engaged in learning that is both technically sophisticated and academically challenging led us to ensure that we can provide appropriate levels of learning support to meet these students’ needs. Learning Commons tutors with specific


skills sets were recruited during 2012 to provide expert assistance in areas such as CAD (computer-aided design), technical drawing, and mathematics and physics. Utilising a targeted approach of supporting students’ learning needs in specific programme areas and courses resulted in significant improvement in student success rates in areas that are often very challenging for our learners.

Focus area: Professional staff 2012 was the first year of the Diploma in Tertiary Learning and Teaching, a collaboration between WelTec and CPIT. The Level 6 workplace-based programme helps tertiary teachers develop the skills and strategies needed to excel as a tertiary educator in the 21st century. Thirty-four staff studied on the programme in 2012. A review of the faculty management structure in 2012 resulted in the decision to combine two faculties into one. The principles for that change were to lift programme and teaching performance so that they are consistently high across WelTec; increase collaboration; better define management roles; streamline systems and processes and ensure we are in the best position to take advantage of business opportunities. This resulted in a new structure and changes to a number of roles.

Focus area: High quality research, innovation and technology transfer activities that inform teaching This was the first year of our involvement in the Performance Based Research Fund (PBRF). The application process met TEC requirements, with 17 evidence portfolios submitted by our researchers. To support the process we revised our Research Committee terms of reference and research policies.

RESEARCH AND TECHNOLOGY TRANSFER Number of research outputs – Total

2012 Target

2012 Actual

250

217

• Industry related

45

88

• Quality assured

85

105

• Weighted points

370

365

60

58

$860k

$435k

Number of technology transfer activities completed External revenue gained (Research ontracts and PBRF income) (000)

2012 FTEs exceeded budget by 3%. This was a result of taking on more administration staff to improve internal systems. In late 2012 the decision was taken to restructure administration staffing in some areas. The full implementation of the reduction in numbers will not be evident until 2013. STAFFING Total FTEs (Full time Staff Equivalents)

2012 Target

2012 Actual

430

444

Academic FTEs

220

218

Administration FTEs

210

226

1.05:1

0.96:1

22:1

20:1

22.6:1

19.5:1

Academic: Administration FTE EFTS: Academic FTE EFTS: Administration FTE

Focus area: Effective and efficient administration systems We made progress on our operational performance with improvements to a number of student administrative processes. The results process was redefined and implemented. The timetabling process redesign highlighted the need to implement a whole new approach to faculty planning, which is being explored in 2013. Many incremental improvements were made to the student enrolment processes. We worked with Whitireia on many of these process improvements to both benefit from their experience and ensure a consistent approach. Substantial progress was made on developing and implementing our Joint Shared Services Strategy with Whitireia. A Joint Shared Services Centre was established, incorporating procurement, vendor management and IT services. The Ministry of Business Innovation and Employment supported the concept of the shared services centre which is being set up as a 50/50 unincorporated joint venture reporting to a management committee and headed by a General Manager from 2013. 2012 ANNUAL REPORT | 55


56 | WELLINGTON INSTITUTE OF TECHNOLOGY


Financial Statements Statement of Comprehensive Income Statement of Changes in Equity Balance Sheet Cash Flow Statement Notes to the Financial Statements

2012 ANNUAL REPORT | 57


Statement of Comprehensive Income For the year ended 31 December 2012 GROUP

PARENT

Note

2012 Actual $000

2012 Budget $000

2011 Actual $000

2012 Actual $000

2012 Budget $000

2011 Actual $000

Government Funding

2

30,229

30,698

28,988

29,980

30,449

28,642

Tuition Funding

3

17,739

18,540

16,392

17,739

18,540

16,392

Other Teaching

4

3,133

2,863

4,126

3,133

2,863

3,744

Other Income

5

3,847

3,140

3,080

3,312

2,189

2,935

54,948

55,241

52,586

54,164

54,041

51,713

31,120

30,917

29,882

30,555

30,447

29,441

4,925

4,884

3,477

4,803

4,788

3,399

Operating Income

Total Operating Income

Cost of Services Personnel

6

Teaching Delivery Administration

7

6,850

6,519

7,040

6,380

6,059

6,617

Infrastructure

8

5,804

5,803

5,109

5,776

5,779

5,063

Interest, Depreciation & Amortisation

9

5,065

5,485

5,248

5,063

5,485

5,248

Total Cost of Services

53,764

53,608

50,756

52,577

52,558

49,768

Operating Profit

1,184

1,633

1,830

1,587

1,483

1,945

Non Operating Items income/(expense)

10

(807)

(557)

1,247

(807)

(557)

1,247

Share of associates profit/(loss)

14

(692)

(777)

(312)

-

-

-

(315)

299

2,765

780

926

3,192

(139)

-

1,417

(139)

-

1,417

(454)

299

4,182

641

926

4,609

Profit

Other Comprehensive Income (Loss)/gain on property revaluation Total comprehensive income

24

The accompanying notes form part of these financial statements

58 | WELLINGTON INSTITUTE OF TECHNOLOGY


Statement of Changes in Equity For the year ended 31 December 2012 GROUP

PARENT

2012 Actual $000

2012 Budget $000

2011Actual $000

2012 Actual $000

2012 Budget $000

2011 Actual $000

73,224

71,648

68,642

73,789

72,226

68,780

(Loss)/profit for the year

(315)

299

2,765

780

926

3,192

Other comprehensive income

(139)

-

1,417

(139)

-

1,417

Total comprehensive income

(454)

299

4,182

641

926

4,609

-

-

400

-

-

400

-

-

400

-

-

400

72,770

71,947

73,224

74,430

73,152

73,789

Note Balance at 1 January Comprehensive income

Equity transactions Crown equity injection Total non-comprehensive income items Balance at 31 December

22

The accompanying notes form part of these financial statements

2012 ANNUAL REPORT | 59


Balance Sheet As at 31 December 2012 GROUP

PARENT

Note

2012 Actual $000

2012 Budget $000

2011 Actual $000

2012 Actual $000

2012 Budget $000

2011 Actual $000

Cash and cash equivalents

25

8,711

8,071

16,214

8,495

8,036

16,181

Trade and other receivables

11

7,166

7,868

7,215

6,878

7,811

7,318

Inventory

12

17

91

306

17

91

306

7

-

12

7

-

12

3,500

-

-

3,500

-

19,401

16,030

23,747

18,897

15,938

23,817

Current assets

Prepayments Other financial assets

15

Total current assets

Non current assets Investment in subsidiary

13

-

-

-

4,281

3,150

-

Investment in associate & jointly controlled entities

14

2,148

1,923

2,700

140

-

-

Other financial assets

15

14

-

-

14

-

3,150

Property, plant and equipment

16

64,459

68,107

60,139

64,449

68,107

60,139

Intangible assets

17

940

1,260

1,117

804

1,260

1,106

Total non current assets

67,561

71,290

63,956

69,688

72,517

64,395

Total assets

86,962

87,320

87,703

88,585

88,455

88,212

Current liabilities Trade and other payables

18

5,222

4,909

5,314

5,208

4,879

5,284

Employee benefits

20

3,167

3,054

2,842

3,144

3,014

2,816

Income in advance

19

5,551

7,205

6,083

5,551

7,205

6,083

13,940

15,168

14,239

13,903

15,098

14,183

248

201

236

248

201

236

4

4

4

4

4

4

252

205

240

252

205

240

Total liabilities

14,192

15,373

14,479

14,155

15,303

14,423

Net assets

72,770

71,947

73,224

74,430

73,152

73,789

Total current liabilities

Non current liabilities Provisions

21

Other Total non current liabilities

Equity Crown equity

22

39,332

39,332

39,332

39,332

39,332

39,332

Retained earnings

23

9,332

9,203

9,647

10,992

10,408

10,212

Reserves

24

Total equity

24,106

23,412

24,245

24,106

23,412

24,245

72,770

71,947

73,224

74,430

73,152

73,789

The accompanying notes form part of these financial statements

60 | WELLINGTON INSTITUTE OF TECHNOLOGY


Cash Flow Statement For the year ended 31 December 2012 GROUP

PARENT

2012 Actual $000

2012 Budget $000

2011 Actual $000

2012 Actual $000

2012 Budget $000

2011 Actual $000

54,622

54,971

50,875

54,588

53,438

50,177

729

510

700

729

510

845

(49,522)

(48,499)

(45,390)

(48,191)

(46,968)

(44,888)

(196)

-

(328)

(176)

-

(321)

5,633

6,982

5,857

6,950

6,980

5,813

31

-

-

26

-

-

(9,120)

(14,430)

(4,052)

(9,120)

(14,430)

(4,052)

(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)

Proceeds from equity injection

-

-

400

-

-

400

Net cash provided by financing activities

-

-

400

-

-

400

Net (decrease)/increase in cash and cash equivalents

(7,503)

(8,143)

1,746

(7,686)

(8,145)

1,713

Cash and cash equivalents at the beginning of the financial year

16,214

16,214

14,468

16,181

16,181

14,468

8,711

8,071

16,214

8,495

8,036

16,181

Cash at bank and in hand

1,204

1,716

1,714

988

1,681

1,681

Term deposits - ASB Bank

2,007

6,355

14,500

2,007

6,355

14,500

Term deposits - Westpac

5,500

-

-

5,500

-

-

8,711

8,071

16,214

8,495

8,036

16,181

Note Cash flows from operating activities Receipts from customers Interest received Payments to suppliers and employees GST (net) Net cash provided by/(used in) operating activities

25

Cash flows from investing activities Receipts from sale of property, plant and equipment Purchase of property, plant and equipment Purchase of intangible assets

Cash flows from financing activities

Cash and cash equivalents at the end of the financial year

25

Represented by:

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

2012 ANNUAL REPORT | 61


Notes to the Financial Statements 1 STATEMENT OF ACCOUNTING POLICIES FOR THE YEAR ENDED 31 DECEMBER 2012

Reporting Entity Wellington Institute of Technology (WelTec) is a Crown Entity governed by the Crown Entities Act 2004 and the Education Act 1989. It provides full-time and part-time tertiary education in New Zealand. WelTec and Group consists of Wellington Institute of Technology and its subsidiary WelTec Connect Limited (100% owned). WelTec Connect Limited has a 43.15% interest in Le Cordon Bleu New Zealand Institute Limited Partnership which is equity accounted. WelTec also has a 50% interest in Cybus an unincorporated joint venture, and a 50% interest in Computer Power Plus another unincorporated joint venture, both of which are equity accounted into the Group financial statements. The financial statements of WelTec and Group for the year ended 31 December 2012 were authorised for issue in accordance with a resolution of the councillors on 29 April 2013.

Basis of Preparation Statement of Compliance The financial statements have been prepared in accordance with generally accepted accounting practice in New Zealand, and the requirements of the Crown Entities Act 2004 and the Education Act 1989. Wellington Institute of Technology and the Group is a public benefit entity for the purpose of complying with generally accepted accounting practice in New Zealand. These financial statements have been prepared in accordance with NZ GAAP as appropriate for public benefit entities and they comply with NZ IFRS. Measurement base The financial statements have been prepared on a historical cost basis, except for land, buildings and certain equipment, which have been measured at fair value. Functional and presentation currency The financial statements are presented in New Zealand dollars and all values are rounded to the nearest thousand dollars ($’000), except where indicated. Nil values are reflected as a ‘-‘ within these financial statements. Changes in accounting policies There have been no changes in accounting policies from the prior financial year. WelTec has adopted the following revisions to accounting standards during the financial year: • FRS-44 New Zealand Additional Disclosures and Amendments to NZ IFRS to harmonise with IFRS and Australian Accounting Standards (Harmonisation Amendments) – The purpose of the new standard and amendments is to harmonise Australia and New Zealand’s accounting standards with source IFRS and to eliminate many of the differences between the accounting standards in each jurisdiction. No presentation or disclosure changes have been made as a result of adopting this standard in 2012.

62 | WELLINGTON INSTITUTE OF TECHNOLOGY

Standards, amendments, and interpretations issued that are not yet effective and have not been early adopted • NZ IFRS 9 Financial Instruments will eventually replace NZ IAS 39 Financial Instruments: Recognition and Measurement. NZ IAS 39 is being replaced in three phases: 1. Classification and Measurement 2. Impairment Methodology 3. Hedge Accounting Phase 1 has been completed and has been published in the new financial standard NZ IFRS 9. NZ IFRS 9 uses a single approach to determine whether a financial asset is measured at amortised cost or fair value, replacing the many different rules in NZ IAS 39. The new approach is based on how an entity manages its financial assets and the contractual cash flow characteristics of the financial asset. The financial liability requirements are the same as those in NZ IAS 39, except for when an entity elects to designate a financial liability at fair value through the profit or loss. The new standard is required to be adopted for the year ended 30 June 2016. However, as a new Accounting Standards Framework will apply before this date, there is no certainty when an equivalent standard to NZ IFRS 9 will be applied by public benefit entities. The Minister of Commerce has approved a new Accounting Standards Framework (Incorporating a Tier Strategy) developed by the External Reporting Board (XRB). Under this framework WelTec will be classified as a Tier 1 reporting entity and it will be required to apply full public sector Public Benefit Entity Accounting Standards (PAS) when they are developed. The effective date for the new standards is expected to be for reporting periods beginning on or after 1 July 2014. This means WelTec expects to transition to the new standards in preparing its 31 December 2015 financial statements. As the PAS are still under development, WelTec is unable to assess the implications of the new Accounting Standards Framework at this time. Due to the change in the Accounting Standards Framework for public benefit entities, it is expected that all new NZ IFRS and amendments to existing NZ IFRS will not be applicable to public benefit entities. Therefore, the XRB has effectively frozen the financial reporting requirements for public benefit entities up until the new Accounting Standards Framework is effective. Accordingly, no disclosure has been made about new or amended NZ IFRS that exclude public benefit entities from their scope.

Significant Accounting Policies Basis of consolidation The Group financial statements are prepared by adding together the like items of assets, liabilities, equity, income, expenses and cash flows on a line by line basis. All significant intragroup balances, transactions, income, and expenses are eliminated in full on consolidation. Subsidiaries WelTec consolidates in the Group financial statements all entities where WelTec has the capacity to control the financing and operating policies of an entity so as to obtain benefits from the activities of the entity. Investments in subsidiaries are carried at cost in the WelTec parent entity financial statements.


Associate WelTec’s associate investment is accounted for in the Group financial statements using the equity method. An associate is an entity over which WelTec has significant influence and that is neither a subsidiary nor an interest in a joint venture. The investment in an associate is initially recognised at cost and the carrying amount is increased or decreased to recognise the Group’s share of the profit or loss of the associate after the date of acquisition. The Group’s share of the profit or loss is recognised in the Group profit or loss. Distributions received from an associate reduce the carrying amount of the investment in the Group financial statements. If the share of losses of an associate equals or exceeds an interest in the associate, the Group discontinues recognising its share of further losses. After the Group’s interest is reduced to zero, additional losses are provided for, and a liability is recognised, only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate. If the associate subsequently reports profits, the Group will resume recognising its share of those profits only after its share of the profits equals the share of losses not recognised. Where the Group transacts with an associate, profit or losses are eliminated to the extent of the Group’s interest in the relevant associate. Investments in associates are carried at cost in the WelTec parent entity financial statements. Jointly Controlled Entity WelTec’s jointly controlled entity interest is accounted for using the equity method. Investments in jointly controlled entities are initially recognised at cost and the carrying amount is increased or decreased to recognise the appropriate share of the profit or loss of the jointly controlled entity after the date of acquisition. WelTec’s share of the profit or loss is recognised in the Group profit or loss. Distributions received from a jointly controlled entity reduce the carrying amount of the investment in the Group financial statements. If the share of losses of a jointly controlled entity equals or exceeds the interest in the jointly controlled entity, the Group discontinues recognising its share of further losses. After the Group’s interest is reduced to zero, additional losses are provided for, and a liability is recognised, only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the jointly controlled entity. If the jointly controlled entity subsequently reports profits, the Group will resume recognising its share of those profits only after its share of the profits equals the share of losses not recognised. Where the Group transacts with a jointly controlled entity, profit or losses are eliminated to the extent of the Group’s interest in the relevant jointly controlled entity. Investments in a jointly controlled entity are carried at cost in the WelTec parent entity financial statements.

Budget Figures The budget figures are those approved by the Council at the beginning of the financial year. The budget figures have been prepared in accordance with NZ GAAP and are consistent with the accounting policies adopted by the Council for the preparation of the financial statements.

Cost of Services WelTec and Group has presented an analysis of its cost of services on the face of the statement of comprehensive income and within the notes to the accounts utilising a classification based on the underlying nature of the expenses.

Cash and Cash Equivalents Cash and cash equivalents comprise cash on hand, cash in banks and investments in money market instruments, net of any outstanding bank overdrafts.

Employee Benefits Employee benefits that are due to be settled within 12 months after the end of the period in which the employee renders the related service are measured at nominal values based on accrued entitlements at current rates of pay. These include salaries and wages accrued up to balance date, annual leave earned but not yet taken at balance date and sick leave. A liability for sick leave is recognised to the extent that absences in the coming year are expected to be greater than the sick leave entitlements earned in the coming year. The amount is calculated based on the historical average amount of additional days used by staff to cover those future absences. A liability and an expense is recognised for bonuses, where there is a contractual obligation. Long term employee entitlements Employee benefits that are due to be settled beyond 12 months after the end of the period in which the employee renders the related service, such as long service leave and retirement leave have been calculated on an actuarial basis. The calculations are based on: • Likely future entitlements accruing to staff, based on years of service, years to entitlement, the likelihood that staff will reach the point of entitlement, and contractual entitlement information; and • 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 in remuneration for employees. Presentation of employee entitlements Sick leave, annual leave, long service leave and retirement leave expected to be settled within 12 months of balance date are classified as a current liability. All other employee entitlements are classified as a non-current liability.

Equity Equity, being the difference between total assets and total liabilities reflects the Crown’s interest in WelTec and Group. This public equity is disaggregated and classified into a number of reserves to enable clearer identification of the specific uses/sources of accumulated funds. The components of equity are: - Crown equity - Retained earnings - Reserves

Financial Instruments Financial instruments arise as a result of the daily operation of WelTec and Group and include: cash and cash equivalents, receivables, payables and non-current liabilities, all recognised in the balance sheet using the concepts of accrual accounting. Revenues and expenses in relation to all financial instruments are recognised in the statement of comprehensive income.

Foreign Currency Translation Both the functional and presentational currency of WelTec and Group is in New Zealand dollars ($). All foreign exchange currency transactions during the financial year are brought to account using the exchange rate in effect at the day

2012 ANNUAL REPORT | 63


Notes to the Financial Statements of the transaction. Exchange rate differences are recognised in the statement of comprehensive income in the period in which they arise.

For assets not carried at revalued amount the reversal of an impairment loss is recognised in the profit or loss.

Goods and Services Tax

Intangible Assets

All items in the financial statements are stated exclusive of goods and services tax (GST), except for trade and other receivables and trade and other payables, which are presented on a GST-inclusive basis. Where GST is not recoverable as input tax then it is recognised as part of the related asset or expense. The net amount of GST recoverable from, or payable to Inland Revenue is included as part of receivables or payables in the balance sheet. The net GST paid to, or received from Inland Revenue, including the GST relating to investing and financing activities, is classified as a net operating cash flow in the statement of cash flows. Commitments and contingencies are disclosed exclusive of GST.

Impairment of Assets At each balance date, WelTec and Group assesses whether there is any objective evidence that a financial asset or group of financial assets is impaired. Any impairment losses are recognised in the profit or loss. Loans and receivables Impairment of a loan or a receivable is established when there is objective evidence that WelTec and Group will not be able to collect amounts due. Significant financial difficulties of the debtor, probability that the debtor will enter into liquidation or default on payments are considered indicators that the asset is impaired. For debtors and other receivables the carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is recognised in the profit or loss. When the receivable is uncollectable, it is written off against the allowance account. Overdue receivables that have been renegotiated are reclassified as current (that is, not past due). Other Financial Assets, Property, Plant and Equipment If any indication of impairment exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the recoverable amount from the cash-generating unit to which the asset belongs is estimated. Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value, using a discount rate that reflects current market assessments of the time value of money. If an asset’s carrying amount exceeds its recoverable amount, the asset is impaired and the carrying amount is written-down to the recoverable amount. For revalued assets the impairment loss is recognised in other comprehensive income to the extent the impairment loss does not exceed the amount in the appropriate revaluation reserve. Where that results in a debit balance in the revaluation reserve, the balance is recognised in the profit or loss. For assets not carried at a revalued amount, the total impairment loss is recognised in the profit or loss. The reversal of an impairment loss on a revalued asset is credited to other comprehensive income and increases the applicable revaluation reserve, unless an impairment loss was previously recognised in the profit or loss, in which case the reversal of the impairment loss is also recognised in the profit or loss.

64 | WELLINGTON INSTITUTE OF TECHNOLOGY

Intellectual property costs Development costs for new intellectual property internally developed or acquired which have a benefit of more than 1 year have been capitalised. Such costs are expected to be recovered, and are amortised on a straight-line basis over the period of their expected useful lives, being 3 years. Software All software purchased or created by WelTec and Group which have a benefit of more than 1 year have been capitalised. Such costs are expected to be recovered, and are amortised on a straight-line basis over the period of their expected useful lives, being 3 years. Assets under construction Course development and software assets under construction are treated as an intangible asset until completion. Upon completion of a project, the total cost is transferred to the appropriate asset class, at which point amortisation begins.

Inventories Inventories available for resale are valued at the lower of cost and net realisable value. Consumables are recorded at cost.

Investments Investments are initially recognised at cost, being the fair value of the consideration given. After the initial recognition, investments which are classified as available-for-sale are measured at fair value. Investments that are intended to be held-to-maturity are subsequently measured at amortised cost using the effective interest method. Amortised cost is calculated by taking into account any discount or premium on acquisition, over the period to maturity. Any changes in fair value throughout the term of the investment are recognised within the statement of comprehensive income.

Leased Assets Operating lease payments, where the lessor effectively retains substantially all the risks and rewards of ownership of the leased items, are recognised as an expense on a straight-line basis over the lease term.

Payables Trade payables and other accounts payable are recognised when WelTec and Group becomes obliged to make future payments resulting from the purchase of goods and services.

Other Financial Assets Financial assets are initially recognised at fair value. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and WelTec and the Group has transferred substantially all the risks and rewards of ownership. Financial assets are classified into the following categories for the purposes of measurement: • Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Related party receivables that are repayable on demand are classified as a non-current asset because repayment of the receivable is not expected within 12 months of balance date.


Property, Plant and Equipment Land and buildings Land and buildings are measured at fair value. Fair value is determined on the basis of an annual independent valuation prepared by registered valuers. Land values are based on discounted cash flows or capitalisation of net income (as appropriate). Buildings are valued based on depreciated replacement cost. This methodology is an acceptable estimate of fair value due to the lack of market-based evidence for education delivery purposes. Any revaluation increase arising on the revaluation of land and buildings is credited to the appropriate revaluation reserve, except to the extent that it reverses a revaluation decrease for the same class of asset previously recorded as an expense in the statement of comprehensive income, in which case the increase is credited to the statement of comprehensive income to the extent of the decrease previously charged. A decrease in carrying amount arising on the revaluation of land and buildings is charged as an expense in the statement of comprehensive income to the extent that it exceeds the balance, if any, held in the asset revaluation reserve. Equipment Equipment is measured at fair value. Fair value is determined on the basis of a three yearly independent valuation prepared by registered valuers based on discounted cash flows. Any revaluation increase arising on the revaluation of equipment is credited to the appropriate revaluation reserve, except to the extent that it reverses a revaluation decrease for the same class of asset previously recorded as an expense in the statement of comprehensive income, in which case the increase is credited to the statement of comprehensive income to the extent of the decrease previously charged. A decrease in carrying amount arising on the revaluation of equipment is charged as an expense in the statement of comprehensive income to the extent that it exceeds the balance, if any, held in the asset revaluation reserve. Other property, plant and equipment All other property, plant and equipment is recognised as an asset if, and only if, it is probable that future economic benefits or service potential associated with the item will flow to WelTec and Group and the cost of the item can be measured reliably. An item of property, plant and equipment is stated at cost less accumulated depreciation and impairment. Cost includes expenditure that is directly attributable to the acquisition of the item. In the event that settlement of all or part of the purchase consideration is deferred, cost is determined by discounting the amounts payable in the future to their present value as at the date of the acquisition. Assets under construction Assets under construction are disclosed separately. Upon completion, the asset’s total cost is transferred to the appropriate asset class, at which point depreciation begins. Disposals Gains and losses on disposals are determined by comparing the disposal proceeds with the carrying amount of the asset. Gains and losses on disposals are reported net in the profit or loss. When revalued assets are sold, the amounts included in revaluation reserves in respect of those assets are transferred to general funds.

Depreciation Depreciation has been provided on all property, plant and equipment, excluding land. Depreciation is calculated on a straight-line basis, at rates that expense the assets’ cost (or valuation) to their estimated residual values over their useful life. The useful life of each class of asset is as follows: - Buildings - Leasehold improvements - Equipment - Furniture and fittings - Library collection - Hardware

10 - 50 years 2 - 15 years 3 - 30 years 5 years 5 years 3 years

2% - 10% 7% - 50% 3% - 33% 20% 20% 33%

Leasehold improvements are depreciated over the unexpired period of the lease. The residual value and useful life of an asset is reviewed, and adjusted if applicable, at each financial year end.

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

Receivables Trade receivables, student receivables and other receivables are recorded at their amortised cost, less any provision for impairment.

Reserves WelTec and Group has an asset revaluation reserve which has been generated by the revaluation of equipment, land and buildings, as outlined in Property, Plant and Equipment.

Revenue Revenue is recognised to the extent that it is probable that the economic benefits will flow to WelTec and Group and the revenue can be reliably measured. The following specific criteria must also be met before revenue is recognised: Government grants Government grants are recognised when eligibility to receive the grant has been established. For Student Component Funding, entitlement is established upon the withdrawal period for an individual’s course of study having passed. For project-based grants, entitlement is established upon the completion of agreed milestones. Student tuition fees Revenue from student tuition fees is recognised in the statement of comprehensive income on entitlement. Where funds have been received but not earned at balance date, an Income in Advance liability is recognised.

2012 ANNUAL REPORT | 65


Notes to the Financial Statements Rendering of services Revenue from a contract to provide services is recognised by reference to the stage of completion of the contract at balance date. Interest revenue Interest revenue is recognised on a time-proportionate basis that takes into account the effective yield on the financial asset.

Taxation Tertiary institutions are exempt from payment of income tax, as they are treated by the Inland Revenue Department as charitable organisations. Accordingly, no income tax is provided for.

Critical accounting estimates and assumptions In preparing these financial statements, WelTec and Group has made estimates and assumptions concerning the future. These estimates and assumptions may differ from the subsequent actual results. Estimates and assumptions are continually evaluated and are based on historical experience and other factors, including expectations or future events that are believed to be reasonable under the circumstances. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below: Land and buildings valuation Note 16 provides information about the estimates and assumptions exercised in the measurement of revalued land, buildings and equipment. Retirement leave Note 20 provides information about the estimates and assumptions exercised in the measurement of retirement leave.

Critical judgements in applying accounting policies Management has exercised the following critical judgements in applying accounting policies for the year ended 31 December 2012: Crown-owned land and buildings Crown-owned land and buildings are included as part of WelTec and Group’s property, plant and equipment. Although legal title has not been transferred, the Crown has vested all the normal risks and rewards of ownership to WelTec and Group. Restrictions on disposal of these Crown owned land and buildings are in place, as per section 192 of the Education Act 1989. Distinction between revenue and capital contributions Most Crown funding received is operational in nature and is provided by the Crown under the authority of an expense appropriation and is recognised as revenue. Where funding is received from the Crown under the authority of a capital appropriation, WelTec and Group accounts for the funding as an equity injection directly in equity. Information about equity injections recognised in equity is disclosed in note 22.

66 | WELLINGTON INSTITUTE OF TECHNOLOGY


Notes to the Financial Statements GROUP

PARENT

2012 Actual $000

2012 Budget $000

2011 Actual $000

2012 Actual $000

2012 Budget $000

2011 Actual $000

26,531

27,254

26,306

26,531

27,254

26,306

2 GOVERNMENT GRANTS Student Achievement Component Adult & Community Education

222

222

222

222

222

222

Youth Guarantee

1,374

1,467

1,017

1,374

1,467

1,017

Trades Academy

987

1,049

789

987

1,049

789

Equity funding

325

141

141

325

141

141

Other funding

790

565

513

541

316

167

30,229

30,698

28,988

29,980

30,449

28,642

Domestic students

12,043

13,225

10,704

12,043

13,225

10,704

International students

5,095

4,593

3,775

5,095

4,593

3,775

601

722

1,913

601

722

1,913

17,739

18,540

16,392

17,739

18,540

16,392

Contract students

2,763

2,502

3,290

2,763

2,502

3,290

Contract income

370

361

836

370

361

454

3,133

2,863

4,126

3,133

2,863

3,744

Trading income

2,009

2,226

974

1,657

1,275

999

Other income

1,140

464

1,261

957

464

1,091

698

450

845

698

450

845

3,847

3,140

3,080

3,312

2,189

2,935

1,566

1,634

1,529

1,556

1,586

1,483

86

106

141

86

106

141

3 TERTIARY FEES

Other fees

4 OTHER TEACHING

5 OTHER INCOME

Finance income

6 PERSONNEL Key Management Compensation: Short term employee benefits Council fees Staff Compensation: Short term employee benefits

28,409

28,439

27,243

27,855

28,017

26,850

Defined contribution plan employer contributions

435

-

281

435

-

281

Associated Personnel Expenses

624

738

688

623

738

686

31,120

30,917

29,882

30,555

30,447

29,441

6,925

6,198

6,327

6,462

5,738

5,904

Non personnel research expense

74

106

74

74

106

74

Bad debts expense

5

120

98

5

120

98

(241)

-

454

(243)

-

454

87

95

87

82

95

87

6,850

6,519

7,040

6,380

6,059

6,617

7 ADMINISTRATION Administrative expenditure

Doubtful debts expense Remuneration of external auditors

2012 ANNUAL REPORT | 67


Notes to the Financial Statements GROUP

PARENT

2012 Actual $000

2012 Budget $000

2011 Actual $000

2012 Actual $000

2012 Budget $000

2011 Actual $000

Information & computer technology

764

899

971

758

899

955

Insurance

841

585

334

841

585

334

Loss on disposal of assets

46

-

1

51

-

1

Operating leases

2,069

2,338

1,616

2,045

2,314

1,605

Occupancy

2,084

1,981

2,187

2,081

1,981

2,168

5,804

5,803

5,109

5,776

5,779

5,063

Depreciation

4,534

4,947

4,741

4,532

4,947

4,741

Amortisation

531

538

507

531

538

507

5,065

5,485

5,248

5,063

5,485

5,248

Students First project

(253)

(406)

-

(253)

(406)

-

Redundancies

(429)

-

-

(429)

-

-

Gain/(loss) on revaluation

(125)

-

262

(125)

-

262

Campus development

-

(151)

-

-

(151)

-

Lease fitout reinstatement write back

-

-

985

-

-

985

(807)

(557)

1,247

(807)

(557)

1,247

Student receivables

4,723

7,302

5,744

4,723

7,302

5,744

Trade receivables

1,832

894

2,132

1,489

837

1,741

949

-

8

1,002

-

502

(338)

(328)

(669)

(336)

(328)

(669)

7,166

7,868

7,215

6,878

7,811

7,318

8 INFRASTRUCTURE

9 INTEREST, DEPRECIATION & AMORTISATION

10 NON OPERATING ITEMS

11 TRADE AND OTHER RECEIVABLES

Related party receivables (note 33) less provision for impairment

Fair value Student fees are due before a course commences or upon enrolment if the course has already begun. Student fee receivables are non-interest bearing and 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 approximates their fair value. The ageing profile of student receivables as at year end is detailed below. Not past due

4,083

4,827

4,083

4,827

Past due 1 – 30 days

1

6

1

6

Past due 31 – 60 days

29

302

29

302

Past due 61 – 90 days

94

30

94

30

Past due over 90 days

516

579

516

579

4,723

5,744

4,723

5,744

68 | 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 impairment assessment 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)

Bad debts written off against provision

90

91

-

90

91

-

Provision released/(additional provision made)

241

250

(454)

243

250

(454)

(338)

(328)

(669)

(336)

(328)

(669)

Provisions reversed during the year:

At 31 December

GROUP

PARENT

2012 Actual $000

2012 Budget $000

2011 Actual $000

2012 Actual $000

2012 Budget $000

2011 Actual $000

Work in progress - at cost

-

75

Finished goods - at cost

17

16

290

-

75

290

16

17

16

16

17

91

306

17

91

306

-

-

-

4,281

3,150

-

4,281

3,150

12 INVENTORY

13 INVESTMENT IN SUBSIDIARY Shares in WelTec Connect Limited (at cost)

WelTec 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.

GROUP 14 INVESTMENT IN ASSOCIATE AND JOINTLY CONTROLLED ENTITIES Investment in Associate MotorTrain Limited is a shell company in which WelTec holds a 25% interest. No transactions were incurred during the year. Investment in Jointly Controlled Entities Le Cordon Bleu New Zealand Institute Limited Partnership WelTec Connect Limited holds the Groups investment in Le Cordon Bleu New Zealand Institute (LCBNZI), being a 43.15% investment in the Le Cordon Bleu New Zealand Institute Limited Partnership and a 33.3% shareholding in LCB Management NZ Limited, the General Partner of the Limited Partnership. WelTec and LCBNZI jointly developed premises in the Regent Centre, lower Cuba Street in Wellington City. WelTec’s School of Hospitality and the LCBNZI Cuisine School co-locate in this facility. Academic delivery commenced in September 2012.

2012 Actual $000

2012 Budget $000

2011 Actual $000

-

-

-

1,792

1,923

2,700

Parent and Group MotorTrain Limited Group Investment in Le Cordon Bleu New Zealand Institute Limited Partnership Assets Current assets

59

386

2,336

Non current assets

2,650

2,682

710

Total assets

2,709

3,068

3,046

Current liabilities

(824)

(1,145)

(346)

Non current liabilities

(93)

-

-

Total liabilities

(917)

(1,145)

(346)

164

626

120

Expenses

(1,072)

(1,403)

(432)

Profit/(Loss)

(908)

(777)

(312)

-

-

-

2,558

2,558

-

Liabilities

Income

Share of joint venture’s contingent liabilities Share of joint venture’s commitments

2012 ANNUAL REPORT | 69


Notes to the Financial Statements 14 INVESTMENT IN ASSOCIATE AND JOINTLY CONTROLLED ENTITIES (CONTINUES)

Cybus WelTec and Universal College of Learning (UCOL) have a 50% interest in a joint venture, Cybus, which undertakes academic and support services on contract to the Le Cordon Bleu New Zealand Institute Limited Partnership. The following amounts on the right represent the group’s share of the assets, liabilities, income and expenses of the joint venture:

GROUP 2012 Actual $000

2012 Budget $000

2011 Actual $000

-

-

-

Current assets

157

85

104

Total assets

157

85

104

Current liabilities

(157)

(85)

(104)

Total liabilities

(157)

(85)

(104)

825

1,143

363

(825)

(1,143)

(363)

Profit/(Loss)

-

-

-

Share of joint venture’s contingent liabilities

-

-

-

Share of joint venture’s commitments

-

-

-

140

-

-

356

-

-

Current assets

703

-

-

Non current assets

111

-

-

Total assets

814

-

-

Current liabilities

(458)

-

-

Total liabilities

(458)

-

-

Income

1,964

-

-

(1,748)

-

-

216

-

-

-

-

-

149

-

-

Group Investment in Cybus Assets

Liabilities

Income Expenses

Computer Power Plus WelTec and Whitireia Community Polytechnic have a 50% interest in a joint venture, Computer Power Plus, which undertakes academic and support services on contract to Whitireia New Zealand Limited. The following amounts on the right represent the group’s share of the assets, liabilities, income and expenses of the joint venture:

Parent Investment in Computer Power Plus Group Investment in Computer Power Plus Assets

Liabilities

Expenses Profit/(Loss) Share of joint venture’s contingent liabilities Share of joint venture’s commitments

70 | WELLINGTON INSTITUTE OF TECHNOLOGY


GROUP

PARENT

2012 Actual $000

2012 Budget $000

2011 Actual $000

2012 Actual $000

2012 Budget $000

2011 Actual $000

3,500

-

-

3,500

-

-

-

-

-

-

-

3,150

14

-

-

14

-

-

3,514

-

-

3,514

-

3,150

15 OTHER FINANCIAL ASSETS Current Term deposits with maturities greater than 3 months and remaining duration less than 12 months Non Current Loans to subsidiary - WelTec Connect Limited Unlisted shares - in Polytechnics International New Zealand Limited (PINZ) (at cost)

Fair Value Loans to related parties - loans to related parties were unsecured, non-interest bearing and were repayable on demand. On 24 April 2012 the Council agreed to convert the $3.2m related party loan to WelTec Connect Limited to capital. During 2012 a further $1.3m of intercompany payable balances was converted 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 investment cannot be reliably determined using a standardised valuation technique or due to cost not being materially different to fair value.

16 PROPERTY, PLANT AND EQUIPMENT Land & Buildings

Leasehold Improvement

Equipment

Hardware

Furniture & Fittings

Library Collection

Assets under Construction

Total

Balance as at 1 January

50,517

3,286

5,584

9,343

2,117

1,724

1,982

74,553

Additions

1,474

5,188

368

973

115

197

878

9,193

Disposals

-

-

(385)

(1,537)

(4)

-

-

(1,926)

85

1,785

45

-

-

-

(1,869)

46

Net 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

80,083

-

3,274

1,960

6,281

1,710

1,189

-

14,414

1,471

144

774

1,700

226

219

-

4,534

Disposals

-

-

(359)

(1,490)

(4)

-

-

(1,853)

Reclassifications

-

-

(17)

17

-

-

-

-

(1,471)

-

-

-

-

-

-

(1,471)

-

3,418

2,358

6,508

1,932

1,408

-

15,624

50,385

6,841

3,254

2,293

296

513

877

64,459

GROUP 2012 $000 Gross Carrying Amount

Reclassifications

Accumulated Depreciation Balance as at 1 January Depreciation Expense

Net revaluation increments/ decrements Balance as at 31 December Net Book Value

2012 ANNUAL REPORT | 71


Notes to the Financial Statements 16 PROPERTY, PLANT AND EQUIPMENT (CONTINUES) Land & Buildings

Leasehold Improvement

Equipment

Hardware

Furniture & Fittings

Library Collection

Assets under Construction

Total

Balance as at 1 January

50,517

3,286

5,584

9,343

2,117

1,724

1,982

74,553

Additions

1,474

5,188

359

970

115

197

878

9,181

Disposals

-

-

(385)

(1,537)

(4)

-

-

(1,926)

PARENT 2012 $000 Gross Carrying Amount

Reclassifications

85

1,785

45

-

-

-

(1,869)

46

Net 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

80,071

-

3,274

1,960

6,281

1,710

1,189

-

14,414

1,471

144

773

1,699

226

219

-

4,532

-

-

(359)

(1,490)

(4)

-

-

(1,853)

Accumulated Depreciation Balance as at 1 January Depreciation Expense Disposals Reclassifications

-

-

(17)

17

-

-

-

-

(1,471)

-

-

-

-

-

-

(1,471)

-

3,418

2,357

6,507

1,932

1,408

-

15,622

50,385

6,841

3,246

2,291

296

513

877

64,449

Land & Buildings

Leasehold Improvement

Equipment

Hardware

Furniture & Fittings

Library Collection

Assets under Construction

Total

49,894

3,282

5,073

7,426

2,012

1,526

482

69,695

Additions

369

4

425

1,503

105

198

1,982

4,586

Disposals

-

-

(1)

(23)

-

-

-

(24)

Net revaluation increments/ decrements Balance as at 31 December Net Book Value

GROUP AND PARENT 2011 $000 Gross Carrying Amount Balance as at 1 January

Reclassifications

-

-

87

437

-

-

(482)

42

254

-

-

-

-

-

-

254

50,517

3,286

5,584

9,343

2,117

1,724

1,982

74,553

-

2,735

1,173

4,722

1,511

978

-

11,119

1,424

539

787

1,581

199

211

-

4,741

-

-

-

(22)

-

-

-

(22)

Net revaluation increments/ decrements Balance as at 31 December Accumulated Depreciation Balance as at 1 January Depreciation Expense Disposals Reclassifications Net revaluation increments/ decrements

-

-

-

-

-

-

-

-

(1,424)

-

-

-

-

-

-

(1,424)

-

3,274

1,960

6,281

1,710

1,189

-

14,414

50,517

12

3,624

3,062

407

535

1,982

60,139

Balance as at 31 December Net Book Value

Land and buildings carried at fair value An independent valuation of the land and buildings was performed by Darroch Limited, registered independent valuers as at 31 December 2012. Land fair value is determined by reference to market-based evidence being the amount for which the assets could be exchanged between a knowledgeable willing buyer and seller in an arm’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 the land 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 of market-based evidence for education delivery purposes.

Restrictions on title Under 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 the property exceeds an amount determined by the Minister. There are also various restrictions in the form of historic designations, reserve, and endowment encumbrances attached to the land. WelTec and Group does not consider it practical to disclose in detail the value of land subject to these restrictions. 72 | WELLINGTON INSTITUTE OF TECHNOLOGY


17 INTANGIBLE ASSETS GROUP $000

2012

2011

Software

Intellectual Property

Assets under construction

Total

Software

Intellectual Property

Assets under Construction

Total

2,108

1,827

146

4,081

1,580

1,100

982

3,662

Gross Carrying Amount Balance as at 1 January Additions

156

-

244

400

14

301

146

461

Disposals

-

(77)

-

(77)

-

-

-

-

89

-

(135)

(46)

514

426

(982)

(42)

-

-

-

-

-

-

-

-

2,353

1,750

255

4,358

2,108

1,827

146

4,081

1,753

1,211

-

2,964

1,523

934

-

2,457

244

287

-

531

230

277

-

507

Disposals

-

(77)

-

(77)

-

-

-

-

Reclassifications

-

-

-

-

-

-

-

-

Net revaluation increments/ decrements

-

-

-

-

-

-

-

-

1,997

1,421

-

3,418

1,753

1,211

-

2,964

356

329

255

940

355

616

146

1,117

Reclassifications Net revaluation increments/ decrements Balance as at 31 December Accumulated Depreciation Balance as at 1 January Amortisation Expense

Balance as at 31 December Net Book Value

2012 PARENT $000

2011

Software

Intellectual Property

Assets under construction

Total

Software

Intellectual Property

Assets under Construction

Total

2,108

1,827

135

4,070

1,580

1,100

982

3,662

156

-

119

275

14

301

135

450

Gross Carrying Amount Balance as at 1 January Additions Disposals Reclassifications Net revaluation increments/ decrements Balance as at 31 December

-

(77)

-

(77)

-

-

-

-

89

-

(135)

(46)

514

426

(982)

(42)

-

-

-

-

-

-

-

-

2,353

1,750

119

4,222

2,108

1,827

135

4,070

1,753

1,211

-

2,964

1,523

934

-

2,457

Accumulated Depreciation Balance as at 1 January Amortisation Expense

244

287

-

531

230

277

-

507

Disposals

-

(77)

-

(77)

-

-

-

-

Reclassifications

-

-

-

-

-

-

-

-

Net revaluation increments/ decrements

-

-

-

-

-

-

-

-

1,997

1,421

-

3,418

1,753

1,211

-

2,964

356

329

119

804

355

616

135

1,106

Balance as at 31 December Net Book Value

There 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 Statements GROUP

PARENT

2012 Actual $000

2012 Budget $000

2011 Actual $000

2012 Actual $000

2012 Budget $000

2011 Actual $000

4,417

3,837

4,242

4,405

3,824

4,229

805

1,072

1,072

803

1,055

1,055

5,222

4,909

5,314

5,208

4,879

5,284

18 TRADE AND OTHER PAYABLES Trade payables Goods and services tax (GST) payable

Trade 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 ADVANCE Student income in advance Other income in advance

4,840

6,973

5,565

4,840

6,973

5,565

711

232

518

711

232

518

5,551

7,205

6,083

5,551

7,205

6,083

20 EMPLOYEE BENEFITS Accrued employee payments

957

423

512

950

422

508

Annual and discretionary leave

1,961

2,402

2,101

1,945

2,363

2,079

249

229

229

249

229

229

3,167

3,054

2,842

3,144

3,014

2,816

Sick leave

A provision is recognised for post employment benefits payable to employees. Employees are entitled to annual leave pay, long service leave and retirement leave pay. Annual leave and sick leave entitlements expected to be settled within 12 months of the balance date are measured at the current rates of pay and classified as current liabilities.

21 NON CURRENT PROVISIONS Employee benefits Long Service leave

142

120

129

142

120

129

Retirement leave

106

81

107

106

81

107

248

201

236

248

201

236

Entitlements related to long service leave and retirement leave have been calculated at the present value of future cash flows determined on an actuarial basis 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 after considering 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 retirement leave 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 retirement leave would be an estimated $9k higher/lower. Leased premises fitout reinstatement: Opening balance

-

-

985

-

-

985

Expensed during the period

-

-

(985)

-

-

(985)

Leased premises fitout reinstatement closing balance

-

-

-

-

-

-

248

201

236

248

201

236

74 | WELLINGTON INSTITUTE OF TECHNOLOGY


GROUP

PARENT

2012 Actual $000

2012 Budget $000

2011 Actual $000

2012 Actual $000

2012 Budget $000

2011 Actual $000

39,332

39,332

38,932

39,332

39,332

38,932

-

-

400

-

-

400

39,332

39,332

39,332

39,332

39,332

39,332

22 CROWN EQUITY Opening balance Equity Injection Closing balance

Crown Equity represents the total investment the Crown has in WelTec. It is comprised of two components, Notional Equity - the carrying value of Crownowned land and buildings at the date the Crown vested all the normal risks and rewards of ownership to WelTec, and Received Equity - actual cash payments 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 Management WelTec and Group’s capital is its equity, which comprises its Crown equity noted above, retained earnings (note 23) and reserves (note 24). Equity is represented 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 or parts 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 future interests of the community. WelTec’s equity is largely managed as a by-product of managing revenues, expenses, assets, liabilities and general financial dealings. The objective of managing WelTec’s equity is to ensure that it effectively and efficiently achieves the goals and objectives for which it has been established, while remaining a going concern.

23 RETAINED EARNINGS Opening balance

9,647

8,904

6,882

10,212

9,482

7,020

Profit

(315)

299

2,765

780

926

3,192

Balance at end of financial year

9,332

9,203

9,647

10,992

10,408

10,212

24,245

24,245

22,828

24,245

24,245

22,828

(139)

(833)

1,417

(139)

(833)

1,417

24,106

23,412

24,245

24,106

23,412

24,245

24 RESERVES Opening balance Revaluation increase Balance at end of financial year

These reserves have been generated by the revaluation of land and buildings undertaken by Darroch Limited on an annual basis, and the revaluation of equipment 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 equivalents For 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 follows on next page:

2012 ANNUAL REPORT | 75


Notes to the Financial Statements GROUP

PARENT

2012 Actual $000

2012 Budget $000

2011 Actual $000

2012 Actual $000

2012 Budget $000

2011 Actual $000

8,711

1,716

722

8,495

1,681

689

-

6,355

15,492

-

6,355

15,492

8,711

8,071

16,214

8,495

8,036

16,181

Cash and cash equivalents: Operating Funds Designated Funds: Campus Development

(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

3,192

Depreciation and amortisation of non current assets

5,065

5,485

5,248

5,063

5,485

5,248

Doubtful debts (write-back)/expense

(241)

-

454

(243)

-

454

Add/(less) non-cash items:

Bad debts expense

5

-

-

5

-

-

Loss on sale or disposal of non current assets

46

151

1

51

151

1

Loss/(gain) on revaluation of non current assets

104

-

(262)

104

-

(262)

Rent holiday expense

236

-

-

236

-

-

-

-

-

-

-

(985)

692

777

312

-

-

-

Decrease/(increase) in receivables

49

110

(661)

1,744

(223)

(791)

Decrease/(increase) in inventories

289

215

(274)

289

215

(274)

Gain on provision write-back Share of associate loss Add/(less) movements in working capital items:

Decrease/(increase) in prepayments

4

12

4

4

12

4

(101)

(366)

(711)

(886)

128

(660)

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

5,813

(Decrease)/increase in payables Increase/(decrease) in employee entitlements

26 EXPLANATION OF MAJOR VARIANCES AGAINST BUDGET Statement of comprehensive income The WelTec Parent operating profit of $1.6m was a favourable variance to budget of $0.1m - a satisfying result given the testing tertiary education environment 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 which

continued the trend of strong demand for WelTec’s programmes experienced in 2011. The budget for 2012 included growth targets for the School of Hospitality (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 in October 2012. Similarly while the School of Construction made significant progress in delivering additional trades training (133 additional EFTS delivered over and above our 2011 baseline figure) the full year budget was not achieved, owing in no small measure to timing uncertainties of the Christchurch rebuild.

• Other Income $1.1m favourable – this variance is principally the result of favourable interest income generated on higher than budgeted cash holdings. This variance was supplemented by unplanned SSC Employer Kiwisaver contribution reimbursements received up to 30 June, unplanned facilities 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 infrastructure replacement in 2012.

• Non Operating Items $0.3m unfavourable – This unfavourable variance was generated by incurring unplanned restructuring costs and a loss on the revaluation of assets. Offsetting this unbudgeted expenditure were favourable variances within Students First projects and campus development - 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 in the second half of the year on pipeline research revenue growth and revenue diversification. These developments position WelTec Connect for higher revenue generation 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 was pleasing to see a positive contribution being generated in 2012. This helped offset the unfavourable variance to budget experienced by the Le Cordon Bleu New Zealand Institute Limited Partnership. This variance was generated due to a different accounting treatment being used within the budget for lease incentives compared to what has been recognised in the actual results for 2012. Balance sheet WelTec 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 in term deposits ($3.5m). Trade and other receivables have finished the year behind budget reflecting a change in the student enrolment process for 2013 delivery with a 8 February enrolment due date being implemented. Inventory in 2012 reflects Hospitality finished goods on hand whereas the budget provided for partly constructed 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 was completed before 31 December than was budgeted. Statement of cash flows WelTec 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 $1.4m unfavourable to budget. This reflects the negative cash impact of WelTec’s support of WelTec Connect and the Computer Power Plus joint venture. This unfavourable operating cashflow variance was offset by a $2.0m favourable Investing cashflow variance to budget. This reflects (as was the case in 2011) lower campus 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. GROUP AND PARENT 27 STUDENT SERVICES FEE SUMMARY In 2011 an amendment to the Education Act was passed that provided a framework for how compulsory fees for student services were to be administered in 2012 and beyond. The following statement of income and expenditure reflects the activity WelTec in consultation and partnership with student representatives has completed in 2012. Given 2012 was the first year of operating in this manner no comparative information is available.

Income

2012 Budget $000

405

555

29

60

Expenses Advocacy and legal advice Careers information Counselling services & pastoral care Employment information Financial support and advice

2

20

293

330

-

5

64

65

Health services

-

15

Media

1

35

Clubs and societies

3

8

Sports, recreation & cultural activities

Trading contribution

13

17

405

555

-

-

GROUP AND PARENT

28 TE WHARE AKO FINANCIAL SUMMARY Te Whare Ako is a Business Unit within WelTec providing early childhood education services. WelTec holds a separate licence from the Ministry of Education for the provision of these services. This financial summary does not reflect occupancy costs or depreciation on buildings and equipment used by the unit.

2012 Actual $000

2012 Actual $000

2012 Budget $000

2011 Actual $000

Government grants

454

351

455

ISS subsidy

91

79

93

Childcare fees

90

80

93

Income

Other fees

1

-

1

636

510

642

Employee benefits

492

492

503

Other direct costs

22

33

22

514

525

525

122

(15)

117

Expenses

Trading contribution

2012 ANNUAL REPORT | 77


Notes to the Financial Statements GROUP AND PARENT 2012 Actual $000 29 COMMITMENTS

2012 Budget $000

2011 Actual $000

(a) Capital expenditure commitments Buildings

-

5,804

Equipment

110

85

Hardware

195

35

6

64

311

5,988

Furniture & fittings

(b) Lease commitments Non cancellable operating lease commitments are disclosed in note 30 to the financial statements.

30 LEASES

(b) Non-cancellable operating lease payments

(a) Leasing arrangements WelTec enters into operating leases for buildings and vehicles:

Not longer than 1 year

2,062

1,640

Between 1 and 5 years

6,443

3,412

Longer than 5 years

3,340

2,043

11,845

7,095

-

Building premises are leased for WelTec satellite delivery offices in Auckland and Christchurch, and for WelTec delivery in Wellington city. A number of premises are also leased around the central Petone campus. The length of terms of these leases vary from under 12 months to 12 years, with rights to renewal on a number of contracts.

- Vehicles are leased over 3 - 5 year terms depending on the type of vehicle concerned. 31 CONTINGENT LIABILITIES As disclosed in Note 14 WelTec is a partner in the Le Cordon Bleu New Zealand Institute Limited Partnership. The Partnership has negotiated a $3m loan facility 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 has resolved to jointly and severally guarantee the loan with the other New Zealand based partner, Universal College of Learning. Accordingly, WelTec has a contingent liability of $3m at balance date. (2011, $3m).

32 FINANCIAL INSTRUMENTS

GROUP 2012 Actual $000

GROUP 2011 Actual $000

PARENT 2012 Actual $000

PARENT 2011 Actual $000

Cash and cash equivalents

8,711

16,214

8,495

16,181

Trade and other receivables

7,166

7,215

6,878

7,318

15,877

23,429

15,373

23,499

Trade & other payables

5,222

5,314

5,208

5,284

Total financial assets

5,222

5,314

5,208

5,284

32A Financial instrument categories Accounting policies for financial instruments have been applied to each class of financial asset and financial liability outlined below. The book value of each equals their fair value:

Loans & receivables

Total financial assets

Financial liabilities

78 | WELLINGTON INSTITUTE OF TECHNOLOGY


32B Financial instrument risks Risk management Strategic 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 and management 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 of each class of financial asset, financial liability and equity instrument are disclosed in the Accounting Policies section of these financial statements. Currency risk WelTec 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 WelTecâ&#x20AC;&#x2122;s annual expenditure. Council Policy on foreign exchange states that should an international purchase of $20k or more be required, investigation is made into forward cover. At balance date no forward contracts or any other form of hedging exist. Credit risk Credit 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, while ensuring WelTec 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 considered recoverable. The maximum credit exposure for each class of financial instrument is as follows:

GROUP 2012 Actual $000

GROUP 2011 Actual $000

PARENT 2012 Actual $000

PARENT 2011 Actual $000

Cash and cash equivalents

8,711

16,214

8,495

16,181

Trade and other receivables

7,166

7,215

6,878

7,318

15,877

23,429

15,373

23,499

Total credit risk

The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to Standard and Poorâ&#x20AC;&#x2122;s credit ratings (if available) or to historical information about counterparty default rates:

GROUP 2012 Actual $000

GROUP 2011 Actual $000

PARENT 2012 Actual $000

PARENT 2011 Actual $000

Cash and cash equivalents AA- rating

8,711

16,214

8,495

16,181

Total cash and cash equivalents

8,711

16,214

8,495

16,181

Trade and other receivables with no defaults in the past

7,166

7,215

6,878

7,318

Total trade and other receivables

7,166

7,215

6,878

7,318

Counterparties with credit ratings

Counterparties without credit ratings

Liquidity risk WelTec manages liquidity risk by maintaining adequate reserves to ensure the provision of educational services for the foreseeable future. This is completed by continuously monitoring and forecasting cash flows for the medium term. The maximisation of operational inflows and efficient management of operational and investing outflows ensures sufficient cash reserves are maintained. Contractual maturity analysis of financial liabilities The table below analyses financial liabilities into relevant maturity groupings based on the remaining period at the balance date to the contractual maturity date.

2012 ANNUAL REPORT | 79


Notes to the Financial Statements Carrying amount $000

Contractual cash flow $000

Less than 6 Months $000

6 - 12 Months $000

1 - 2 years $000

Group 2012 Trade and other payables

5,222

5,222

5,222

-

-

Total

5,222

5,222

5,222

-

-

Trade and other payables

5,208

5,208

5,208

-

-

Total

5,208

5,208

5,208

-

-

Parent 2012

Group 2011 Trade and other payables

5,314

5,314

5,314

-

-

Total

5,314

5,314

5,314

-

-

Trade and other payables

5,284

5,284

5,284

Total

5,284

5,284

5,284

Parent 2011

Interest rate risk WelTec has exposure to interest rate risk to the extent that it has outstanding investments at fixed rates. The interest rates risk on investments is managed through the use of short term investments, in accordance with Council Policy. No significant exposure to interest rate risk exists on the remaining financial assets and liabilities. Sensitivity analysis The table below illustrate the potential profit or loss and equity impact for reasonably possible market movements, with all other variables held constant, based on financial instrument exposures at the balance date.

2012 Profit -50bps $000

2012 Profit +50bps $000

2011 Profit -50bps $000

2011 Profit +50bps $000

Cash and cash equivalents

(10)

10

(18)

18

Other financial assets

(6)

6

-

-

(16)

16

(18)

18

Group and Institute Interest rate risk Financial Assets

Total sensitivity

Explanation of interest rate risk sensitivity The interest rate sensitivity is based on a reasonable possible movement in interest rates, with all other variables held constant, measured on a basis points (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 swaps has been calculated using a derivative valuation model based on a parallet shift in interest rates of -50bps/+50bps. 33 RELATED PARTY DISCLOSURES Significant transactions with government related entities The 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 the year ended 31 December 2012. WelTec also utilises land and buildings legally owned by the Crown. Collectively, but not individually, significant transactions with government related entities In 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 the Crown. The payment of these taxes and levies is based on the standard terms and conditions that apply to all tax and levy payers. WelTec is exempt from paying 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 purchase and provision of goods and services to government-related entities for the year ended 31 December 2012 are small when compared to WelTec’s total expenditure and revenue and have all been conducted on an arms’ length basis. The purchase of goods and services included the purchase of electricity from Genesis and Meridian Energy, air travel from Air New Zealand, and postal services from New Zealand Post. The provision of services to governmentrelated entities mainly related to the provision of educational courses. 80 | WELLINGTON INSTITUTE OF TECHNOLOGY


GROUP AND PARENT Transactions with key management personnel Details of key management personnel remuneration are disclosed in note 6 to the financial statements. Key management personnel include the Chairperson, Councillors, Chief Executive and the Executive Management Team. 2012 represented the first year of WelTec and Whitireia operating with one Council. WelTec and Whitireia therefore shared the cost of Council remuneration in 2012. It should be noted that Whitireia paid the Chairperson, Deputy Chairperson, and four other members fees in 2012. During the year, the Metro Group of Institutes of Technology and Polytechnics purchased consulting services from Saunders Unsworth, a Wellington based consulting company. The Council Chairperson Roger Sowry is a partner in this company. WelTecâ&#x20AC;&#x2122;s share of these costs was $39,345 (2011, $47,330) and the services were supplied on normal commercial terms.

2012 Actual $000

2011 Actual $000

-

29

Council remuneration paid during the year Roger Sowry (Chairperson) Alan Barker (Deputy Chairperson)

-

26

Dennis Sharman

14

14

Nancy McIntosh - Ward

14

14

Peter Preston

14

14

Peter Steel

14

14

Suzanne Snively

14

14

Vaughan Renner

14

14

Ron Wilkinson

-

-

Dr Kabini Sanga

-

-

Aka Arthur

-

-

Gregory Fortuin

-

-

GROUP AND PARENT Related party transactions with subsidiary, associate, and jointly controlled entity During the reporting period WelTec entered into transactions with LCBNZI Limited Partnership, a partnership in which WelTec holds an equity interest through WelTec Connect Limited (refer note 14). These transactions occurred within a normal supplier relationship on terms and conditions no more or less favourable than those which it is reasonable to expect WelTec would have adopted if dealing with the partnership as per any independent third party.

2012 Actual $000

2011 Actual $000

Subsidiary WelTec Connect Limited Unsecured loans payable to WelTec

-

3,150

53

494

-

-

Services provided by WelTec

318

30

Debtor for services provided by WelTec

118

6

-

-

Services provided by WelTec

772

-

Debtor for services provided by WelTec

772

-

Services provided by WelTec

91

63

Debtor for services provided by WelTec

57

28

Debtor for services provided by WelTec Associate MotorTrain Limited No related party transactions were entered into during the year LCBNZI Limited Partnership

LCB Management Limited No related party transactions were entered into during the year Jointly Controlled Entity Computer Power

Cybus

34 EVENTS AFTER BALANCE DATE There 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 would be 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 Literacy and 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 an increase in the issued shareâ&#x20AC;&#x2122;s value.)

2012 ANNUAL REPORT | 81


Responsibilities In the financial year ended 31 December 2012, the Council and Management of Wellington Institute of Technology were responsible for: ď&#x201A;Ą The preparation of the Financial Statements, Statement of Objectives and Service Performance and the judgements used therein. ď&#x201A;Ą 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 and Statement of Objectives and Service Performance for the year ended 31 December 2012 fairly reflect the financial position and operations of Wellington Institute of Technology and Group.

ROGER SOWRY CHAIRPERSON 29 APRIL 2013

LINDA SISSONS (DR) CHIEF EXECUTIVE 29 APRIL 2013

82 | WELLINGTON INSTITUTE OF TECHNOLOGY


Chartered Accountants

INDEPENDENT AUDITOR’S REPORT TO THE READERS OF WELLINGTON INSTITUTE OF TECHNOLOGY AND GROUP’S FINANCIAL STATEMENTS AND NON-FINANCIAL PERFORMANCE INFORMATION FOR THE YEAR ENDED 31 DECEMBER 2012 The Auditor-General is the auditor of Wellington Institute of Technology (WelTec) and group. The Auditor-General has appointed me, David Morrow, using the staff and resources of Ernst & Young, to carry out the audit of the financial statements and non-financial performance information of WelTec and group on her behalf. We have audited: -

the financial statements of WelTec and group on pages 58 to 81, that comprise the balance sheet as at 31 December 2012, the statement of comprehensive income, statement of changes in equity and cash flow statement for the year ended on that date and the notes to the financial statements that include accounting policies and other explanatory information; and

-

the non-financial performance information of WelTec and group in the statement of service performance on pages 49 to 51.

Opinion In 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 reflects WelTec and group’s service performance achievements measured against the performance targets adopted in the investment plan for the year ended 31 December 2012.

Our audit was completed on 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 and our responsibilities, and we explain our independence. Basis of opinion We carried out our audit in accordance with the Auditor-General’s Auditing Standards, which incorporate the International Standards on Auditing (New Zealand). Those standards require that we comply with ethical requirements and plan and carry out our audit to obtain reasonable assurance about whether the financial statements and non-financial performance information are free from material misstatement. Material misstatements are differences or omissions of amounts and disclosures that, in our judgement, are likely to influence readers’ overall understanding of the financial statements and non-financial performance information. If we had found material misstatements that were not corrected, we would have referred to them in our opinion. An audit involves carrying out procedures to obtain audit evidence about the amounts and disclosures in the financial statements and non-financial performance information. The procedures selected depend on our judgement, including our assessment of risks of material misstatement of the financial statements and non-financial performance information, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to WelTec and group’s preparation of the financial statements and non-financial performance information that fairly reflect the matters to which they relate. We consider internal control in order to design audit procedures that are appropriate in the

2012 ANNUAL REPORT | 83


circumstances but not for the purpose of expressing an opinion on the effectiveness of WelTec and group’s internal control. An audit also involves evaluating: -

the appropriateness of accounting policies used and whether they have been consistently applied;

-

the reasonableness of the significant accounting estimates and judgements made by the Council;

-

the appropriateness of the reported service performance within WelTec and group’s framework for reporting performance;

-

the adequacy of all disclosures in the financial statements and non-financial performance information; and

-

the overall presentation of the financial statements and non-financial performance information.

We did not examine every transaction, nor do we guarantee complete accuracy of the financial statements and non-financial performance information. Also we did not evaluate the security and controls over the electronic publication of the financial statements and non-financial performance information. We have obtained all the information and explanations we have required and we believe we have obtained sufficient and appropriate audit evidence to provide a basis for our audit opinion. Responsibilities of the Council The Council is responsible for preparing financial statements that: -

comply with generally accepted accounting practice in New Zealand; and

-

fairly reflect WelTec and group’s financial position, financial performance and cash flows.

The Council is also responsible for preparing non-financial performance information that fairly reflects WelTec and group’s service performance achievements measured against the performance targets adopted in the investment plan. The Council is responsible for such internal control as it determines is necessary to enable the preparation of financial statements and non-financial performance information that are free from material misstatement, whether due to fraud or error. The Council is also responsible for the publication of the financial statements and non-financial performance information, whether in printed or electronic form. The Council’s responsibilities arise from the Education Act 1989 and the Crown Entities Act 2004. Responsibilities of the Auditor We are responsible for expressing an independent opinion on the financial statements and non-financial performance information and reporting that opinion to you based on our audit. Our responsibility arises from section 15 of the Public Audit Act 2001 and the Crown Entities Act 2004. Independence When carrying out the audit, we followed the independence requirements of the Auditor-General, which incorporate the independence requirements of the External Reporting Board. Other than the audit, we have no relationship with or interests in WelTec or any of its subsidiaries.

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

84 | WELLINGTON INSTITUTE OF TECHNOLOGY


Acronyms AOD

Alcohol & Other Drugs

ACE

Adult and Community Education

BE

Bachelor of Engineering

BPS

Basis Points

BSC

Bachelor of Science

CATE

Career and Technology Education

CCDHB

Capital & Coast District Health Board

DAPAANZ Drug & Alcohol Practitionersâ&#x20AC;&#x2122; Association Aoteroa New Zealand DHB

District Health Board

EFTS

Equivalent Full-Time Student

EMT

Executive Management Team

EPIS

Educational Performance Indicators

FTE

Full-Time Equivalent

HVDHB

Hutt Valley District Health Board

IAS

International Accounting Standard

IOD

Institute of Directors

IRL

Industrial Research Limited

IS

Information Systems

ISS

Income Support Services

IT

Information Technology

ITO

Industry Training Organisation

ITP

Institutes of Technology & Polytechnics

LCBNZI

Le Cordon Bleu New Zealand Institute

MBA

Master of Business Administration

MITO

Motor Industry Training Organisation

MoU

Memorandum of Understanding

NZQA

New Zealand Qualifications Authority

NZIFRS

New Zealand International Financial Reporting Standards

NZTE

New Zealand Trade and Enterprise

PBRF

Performance-Based Research Fund

R&D

Research and Development

SAC

Student Achievement Component

SAEER

Self Assessment, and External Evaluation and Review

SDR

Single Data Return

SME

Small and Medium Enterprises

STAR

Secondary/Tertiary Alignment Resources

TEC

Tertiary Education Commission

TES

Tertiary Education Strategy

TFESC

Territorial Forces Employers Support Council

UCOL

Universal College of Learning

WCL

WelTec Connect Limited

2012 ANNUAL REPORT | 85


86 | WELLINGTON INSTITUTE OF TECHNOLOGY


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 and Taranaki Whanui through the Tamaiti Whangai partnership. (November 2012)

2012 ANNUAL REPORT | 87


Private Bag 39803 Wellington Mail Centre Lower Hutt 5045, New Zealand Freephone: 0800 935 832 Telephone: +64 4 9202 400 Facsimile: +64 4 9202 401

www.weltec.ac.nz

WelTec 2012 Annual Report  

WelTec 2012 Annual Report

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