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ANNUAL REPORT

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CONTENTS Contents 02 About YHA 03 Executive Report 04 Our Hostels 06 Our Markets 07 Our People 08 Our Members 09 Our Environment 12 International 13 Our Financials 14 Notes to the summary financial statements 16 Auditor’s Report 17 Governance Statement 18 Acknowledgements 18 Our Hostel Network 19 Directory 19

Splendorgel is made from elemental chlorine free pulp sourced from well-managed forests and controlled sources. DNS is made from Elemental Chlorine Free pulp sourced from responsible forests. Both are manufactured by an ISO 14001 certified mill. Printed by Spectrum Print.


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YHA New Zealand | Annual Report 2016

YHA New Zealand’s mission is to deliver quality budget accommodation and travel experiences which enrich people’s understanding of each other, the environment and New Zealand.

ABOUT YHA NEW ZEALAND YHA New Zealand is a registered charitable organisation and an incorporated society which has been operating in New Zealand since 1932. It is membership-based and part of Hostelling International (HI). Members receive reciprocal benefits internationally in the world’s first and largest budget accommodation network. YHA New Zealand is committed to: »» Live our values of respect, integrity, passion and excellence. »» Focus on sustainability through our triple bottom line of People, Planet and Profit.

»» Recognise and respect the status of Māori in Aotearoa New Zealand.

»» Provide a safe and healthy workplace and hostel experience for all.

YHA New Zealand seeks to operate a profitable and sustainable hostel network that: »» Delivers the best possible experience for guests and staff. »» Makes smart use of technology. »» Shows our commitment to the environment.

YHA’s mission is delivered through a hostel network which is comprised of its own and third-party (Franchise and Associate) hostels. YHA New Zealand gives equal consideration to our social, economic and environmental impact. The Annual Report therefore supports our triple bottom line commitment.


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YHA New Zealand | Annual Report 2016

EXECUTIVE REPORT YHA New Zealand celebrates a very successful year. The combination of a favourable tourism trading environment, including significant increases in visitor arrivals and spend, and specific operational strategies have contributed to a positive performance across all of our key metrics.

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Over the year, we hosted a total of nearly 700,000 guest nights across our hostel network (YHA-managed, Franchises and Associates), of which more than 80% were international guests. We achieved significant revenue growth (on a like for like basis) reflecting outstanding occupancy levels and the benefits of dynamic pricing, by which we vary our room rates according to demand. Our trading surplus, excluding depreciation and property related matters, of $985,841 represents a substantial improvement on the previous year, as does the full final result.

John Hammond, Mark Wells

“The combination of a favourable tourism trading environment, including significant increases in visitor arrivals and spend, and specific operational strategies have contributed to a positive performance across all of our key metrics.” – Mark Wells

Our trading levels reflect the quality of our hostel experience, our longstanding commitment to both staff and plant, and achieving the right balance between our own investment of capital and third-party operator relationships. In addition, we continue to make progress in the seasonal dispersal of business, and the ongoing groups marketing strategy that targets the education sector will further enhance business growth in non-peak periods. Key metrics for the YHA-managed network, which now consists of 14 hostels (out of a network total of 43), include:

»» Bed revenue growth of 6.75% »» Guest nights increased by nearly 3% »» Bed yield (average price per sold bed) grew by over 3% »» Occupancy levels of over 81% »» Revenue earned per available unit (REVPAU) grew by over 7%

Markets New Zealand remains our single largest market. We will continue to target the groups and education segments, because these segments maintain our occupancy levels outside the peak summer season. Of our major international markets, Germany remains the largest ahead of the UK, while China is now sitting alongside Australia as our third-largest market. We anticipate ongoing growth out of China as our product and brand reputation has particular appeal to independent Chinese travellers. Our future marketing investment will continue to balance the opportunities associated with our emerging markets whilst maintaining our traditional markets and growing the level of business derived from off-season groups and the education sector.


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YHA New Zealand | Annual Report 2016

Network Adjustments and Development We maintain brand representation through 43 hostels in 39 destinations across New Zealand. In line with the previous 12 month period, we made significant investment in maintaining our hostels in support of quality standards. Major refurbishment projects commenced at both YHA Queenstown Lakefront and YHA Auckland City. General bathroom and other refurbishments were completed across the hostel network. Our representation in Taupo has transferred to a Franchise partner, and we now have a total of four such partners. Unfortunately, YHA Kaikoura closed following specialist reports detailing the risk and impact of rock falls from the cliff at the immediate rear of the property. In the coming year we will complete the refurbishment projects at YHA Queenstown Lakefront and YHA Auckland City, continue to progress a new hostel development in Tekapo and continue with hostel refurbishments generally. We will also consider future capacity requirements in Christchurch and maintain the search for appropriate brand representation in Mount Maunganui, Kaikoura and Dunedin.

Our Environmental Commitment We remain committed to responsible tourism and managing environmentally sustainable hostels. This has included tapping into geothermal energy through a down-bore heat exchanger at YHA Rotorua and installing solar power and heat exchangers at YHA Franz Josef and YHA Wellington. These installations will make a significant difference to our greenhouse gas emissions as well as enable guests to learn more about geothermal energy and solar power. We have also re-committed to the Certified Emissions Measurement and Reduction Scheme (CEMARS) that will certify our carbon reduction achievements, and we will continue with hostel solar conversions as funds permit.

Our governance processes require a participating membership. Following a consultation with current participating members, and to further future-proof the organisation, AGM quorum requirements have been reduced and provision has been made for electronic voting only, rather than the current combination of electronic and postal.

Infrastructure and Staff We require fit-for-purpose business systems and committed and passionate staff. During the year:

»» We invested in a new financial management information system (FMIS) which will not only better meet our future requirements, but also achieve improved operational efficiency. The new FMIS will be implemented from the beginning of the new financial year.

»» We continued to invest in our staff through the launch of a new electronic Learning and Development programme and through the commitment to a participatory and inclusive workplace culture. Our annual survey confirms that we continue to have high levels of staff engagement and are making positive progress in ensuring a great employee experience of YHA. In conclusion, we celebrate a very positive year for YHA New Zealand. Once again, we made pleasing progress towards our goal of a sustainable business model while also maintaining our momentum in operational and hostel standards in support of our leadership position in the backpacker accommodation sector. YHA will continue to evolve in response to both commercial and competitive challenges, but in so doing remain committed to operating in a manner consistent with our long-held values. We therefore anticipate a positive and long-term future in which YHA continues to be more than just a bed to its guests and more than just a job to its staff.

Membership and Governance We continue to view membership more as a customer loyalty programme, as do our guests who purchase membership. Levels remain stable, reflecting a successful balance between price positioning and benefits. This is complemented through enhanced communication to our members and guests. YHA New Zealand is currently contributing to a Hostelling International review of membership and we anticipate that our more recent experiences will inform the outcomes of this work.

Mark Wells Chief Executive

John Hammond National Chair


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YHA New Zealand | Annual Report 2016

OUR HOSTELS The hostel network Welcoming YHA Taupo Finlay Jacks as a Franchise partner to the YHA network was a highlight this year. We are delighted to continue quality brand representation in this important traveller destination. Less pleasing was the closure of our YHA-managed hostel, YHA Kaikoura due to rock fall risk from the rear-facing cliff. The YHA hostel network now comprises 14 YHA-managed hostels, 25 Associate partner hostels and 4 Franchise hostels, thus bringing the network to a total of 43 hostels.

Hostel development Our continued commitment to upgrade hostel facilities to meet guests’ needs and to better protect and preserve the environment saw a record level of expenditure. We:

»» Modernised remaining bedrooms and corridor at YHA Queenstown Lakefront, rebuilt guest kitchen and upgraded laundry and key shared bathrooms.

»» Refurbished YHA Auckland City, including bedrooms, adding ensuites and a rebuild of level three communal areas.

»» Installed a geothermal down-bore heat exchanger at YHA Rotorua.

»» Installed solar power and heat exchangers at YHAs Franz Josef and Wellington.

»» Refurbished bathrooms, new carpet and painting of two accommodation levels at YHA Wellington.

»» Bathrooms upgrades at YHAs Queenstown Central and Wanaka.

Looking forward Planned development projects for the year include:

»» Complete refurbishments at YHAs Auckland City and Queenstown Lakefront.

»» Install solar energy solutions where appropriate. »» Upgrade bathrooms at YHAs Aoraki/Mt Cook and Te Anau. »» Further upgrades at YHAs Queenstown Central and Wanaka.

Quality Overall guest expectations were again met or exceeded for 94% of our guests this year. This is an outstanding result given such buoyant occupancy levels. We implemented and now utilise the online guest review system, ReviewPro, which supports this result. ReviewPro reports that all YHA-managed hostels sit well above the average rating for backpacker hostels in their respective locations. We remain committed to Qualmark and to Hostelling International’s HI-Quality Management System, HI-Q, in YHA-managed hostels.

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The refurbished YHA Queenstown Lakefront (top images), YHA Lake Taupo Finlay Jacks (bottom images)


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YHA New Zealand | Annual Report 2016

OUR MARKETS The strengthening international travel market continues to benefit YHA, with youth travel leading the way in international arrivals to New Zealand. YHA’s focus to maximise yield performance ensures YHA has the resources available to reinvest in hostel refurbishments and plant upgrades. Some significant work has been undertaken to give Hostel Managers and Marketing the tools to achieve this. A refreshed approach to groups marketing activity has now been initiated. An active promotional programme is underway to position YHA as the accommodation of choice for school groups. Tied to this activity is YHA’s domestic profile. TV advertising promoting family stays features YHA Christchurch, and stays for young active travellers features YHA Rotorua. This has resulted in over 7 million views of our adverts nationally and solid growth in both independent and group travellers from New Zealand. Staying ahead of technology trends is also key to maintain YHA’s market position. This year we launched 360° photography and videos featuring 22 hostels. This project is one of the largest 360° photography projects for any accommodation chain worldwide.

China has grown to be our third largest international market and we have invested in a Mandarin-speaking Marketing Coordinator to profile YHA New Zealand in Chinese social media. We also undertook a social media campaign with Auckland International Airport that shows excellent early results. Market share among key markets remains balanced with strong representation from New Zealand, Europe, UK, North Asia, Australia and North America. This balance makes YHA less susceptible to regional crisis and reinforces our mission to encourage the sharing of cultures from around the world through our hostel stays. YHA New Zealand maintains a strong relationship with YHA Australia, frequently sharing marketing intelligence and resources. This co-operative approach has been further extended through participation in the first Hostelling International Marketing Forum. Marketing Managers from twelve countries met to discuss common issues and develop projects to improve international co-operation. The next financial year looks equally promising in terms of visitor arrivals, with YHA focusing on developing its digital marketing and communications systems.

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 he international travel market continues to grow, Youth travellers at YHA Rotorua, YHA’s TV advert filmed at YHA Rotorua, T A Ra Karakia sunrise ceremony in Auckland by Ngāti Whātua Ōrākei


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YHA New Zealand | Annual Report 2016

OUR PEOPLE Staff composition We employed a total of 152 people as at 30 June 2016. This is 27 fewer than the 179 people at the same time last year. Full time equivalents increased slightly during this time from 116 to 125. We worked a total of 272,943.80 hours during the year.

Staff snapshot as at 30 June 2016 Location and employment agreement type

Permanent staff turnover is unavailable, however this metric will be reported again next year.

Permanent Hostels: 73% (72 staff) National Office: 27% (26 staff) Total: 98 staff

Our staff are 37% male and 63% female, 82% of whom work in hostels. The 24 different nationalities represented reflect the international nature of our business. New Zealanders comprise 43% of staff with the next three nationalities being British (16%), German (4%) and Indian (4%).

Employee engagement Our 2016 climate survey celebrated its 10 year milestone and an excellent employee engagement rate of 56%, up from 45% in 2014. To measure YHA’s health and safety culture, a new ‘Health and Safety’ section was introduced to the survey this year. The ‘Health and Safety’ section was the strongest performing area with the ‘Person I Report To’ as the second strongest. ‘Rewards and Recognition’ continues to be the lowest rated section, however this continues to improve from year to year. For the fourth year, we benchmarked against YHA Australia.

Fixed Term / Casual Hostels: 96% (52 staff) National Office: 4% (2 staff) Total: 54 staff

Head count and full-time equivalents (FTE)

Long service We thank and congratulate team members who reached a significant milestone during the year. Each has made a significant contribution to YHA.

Head count Hostels: 82% (124 staff) National Office: 19% (28 staff) Total: 152 staff

10 years Steve Collier | 5 years Josh Bramley, Manoj Gopalakrishnan, Isabelle Gremminger, Brindi Joy, Luke Tarplett, Teresa Thompson

Health and wellbeing As part of its commitment to staff wellbeing YHA, reports the average sick leave days per staff member. Sick leave this year was 2.73 days on average per person, which is a slight increase from last year but is still considered low. YHA promotes a culture which supports a safe and healthy accommodation experience for guests as well as a safe and healthy workplace for staff. One health and safety measure is the number of work-related lost time injuries reported for the year. This year there were two lost time injuries, so our formal Lost Time Injury Frequency Rate measure (number of lost time injuries for every million hours worked) is 7.33. This is a decrease from last year.

FTE Hostels: 81% (101 staff) National Office: 19% (24 staff) Total: 125 FTE

Gender breakdown

Male: 37% (56 staff) Female: 63% (96 staff) Total: 152 staff


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YHA New Zealand | Annual Report 2016

OUR MEMBERS Membership remained stable throughout the year. The free WiFi offer exclusive to members caused the international membership spike in 2015. Due to technical issues this condition was removed in 2016 and we are pleased that international membership numbers remained stable despite this. The YHA International Youth Travel Card (IYTC) has been successful and we continue to work with ISIC to explore additional promotional opportunities.

Clive Croy: Clive was first appointed to National Board in 1999. He convened the Finance Committee from 1999 to 2004, was National Chair from 2004 to 2006, and then a co-opted Board Member from 2008 until his retirement from the Board in 2014. Clive was committed to governance best practice and played a central role in developing the National Board Charter that established governing process policies for National Board. This Charter remains the Board’s core procedures guide today.

YHA New Zealand is currently engaged in the Hostelling International Membership Working Group to look at how to maximise membership on a global basis.

Clive also served HI as a member of the Asia Regional Committee from 2002 to 2006, an elected member of the HI Board from 2008 to 2014 and ultimately as the elected HI Treasurer from 2012 to 2014.

Members – Year to 30 June International 9,824 2013 International 9,452 2014 International 11,804 2015 International 9,761 2016

Domestic 15,170 Domestic 14,984 Domestic 15,129 Domestic 15,116

Over his fifteen years with YHA and HI, Clive made a highly valued governance contribution which supported and enhanced both organisations and contributed to YHA New Zealand’s positive international reputation.

Members: Board Engagement

In Memory of Barry Cope

Canterbury members were invited to a lunch in Christchurch following National Board meeting in May 2016. This was a successful event and National Board, senior staff and members appreciated the opportunity to meet and discuss current topics. The YHA Kaikoura closure was a key topic and many members shared fond memories of the hostel.

February 1942 – January 2016

Awards

This year’s award went to Eva Maffey who received $3,600 towards attending The Hague International Model United Nations (THIMUN). Eva is an inspiring young woman from Christchurch and she attended the five day conference in the World Forum Centre, where United Nations meetings are often held. The conference theme was “Sustainable Urbanisation” and over 4,000 students, ranging in age and ethnicity, attended. Eva says of the experience, “My role as Head Delegate at THIMUN grew my leadership skills. I hope sharing my experiences on THIMUN will inspire other young people to explore the world and listen to other people’s views so they can become better, cultured individuals and lead youth as well.”

The following awards were presented at the 2015 AGM in Christchurch:

»» Certificate of Merit Award – Alan Hanson, Isla Lewis, Rex Morgan and Jan Veronese

»» Distinguished Service Award – George Murray »» Honorary Life Membership Award – Clive Croy and Coral Laughton

Honorary Life Memberships Coral Laughton: Coral made a highly valued contribution to the governance of YHA New Zealand as a Board Member from 2008 to 2014. She served for a time as the Convenor of the Audit and Risk, Remuneration and Awards Committees and chaired the National Board from 2010 to 2014. Coral developed a strong National Board with diverse skills and experience that aligned with YHA’s core values. She encouraged Board participation and varying perspectives, took a proactive approach to succession planning and maintained a strategic orientation to governance as part of her commitment to grow a stronger organisation well-positioned for future growth and development. Coral also represented YHA at the Hostelling International (HI) Conferences in Slovenia in 2012 and Thailand in 2014.

Sadly, YHA Board Member Barry Cope passed away in January 2016. Barry was a longstanding member of YHA and had served on the National Board since 2011.

Cora Wilding Memorial Award

What is the one thing more than anything else that makes YHA a great place to work? “I love the people and the culture.” “It’s amazing working with people and being part of staff and guests’ experiences.”


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YHA New Zealand | Annual Report 2016


YHA New Zealand | Annual Report 2016

Hostel Manager, Jason Neave at YHA Aoraki/Mt Cook, Staff on a Milford Sound famil, Staff from the network on a Fiordland famil, Alesha Mamaku wins YHA’s Hero Award and Paula Slack holds YHA Auckland International’s Large Hostel of the Year award, YHA Wanaka staff in the Christmas spirit

» Guests with YHA Bay of Islands the Rock Cruise, In memory of Barry Cope, guests visiting Christchurch Botanic Gardens, A guest at Fox Glacier, Coral Laughton receives her Honorary Life Membership from John Hammond, Clive Croy receives his Honorary Life Membership from Kevin Brewer.

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YHA New Zealand | Annual Report 2016

OUR ENVIRONMENT Our environment YHA has a longstanding commitment to environmental sustainability and responsible tourism, which is increasingly important to guests and staff. This year YHA undertook major long-term environmental investments. YHA Rotorua now taps into geothermal energy through a down-bore heat exchanger that heats the hostel’s potable hot water supply. YHA Franz Josef and YHA Wellington had photovoltaic and solar hot water panels installed to generate power and to heat water. The YHA Franz Josef system is the largest solar system installed on the West Coast. Franchise partner YHA Bay of Islands Paihia installed solar panels to meet the hostel’s daytime energy needs. YHA placed second in the World Youth Student and Educational (WYSE) Global Youth Travel Awards in the Green Accommodation Initiative category. The awards celebrate outstanding performers within the international youth, student and educational travel industry and act as a benchmark for excellence within the sector.

Green Footprint project and conservation efforts The Green Footprint project continued in Christchurch and Wellington. In Christchurch, staff and guests planted over eight hundred native trees and shrubs at Chamberlains Ford in the Selwyn district. In Wellington, plantings took place at the Wellington Zoo. Hostels also supported local, national and international programmes and conservation efforts.

Future initiatives We will partner once again with Enviro-Mark Solutions to track and measure YHA’s overall carbon footprint through CEMARS. We will look to roll out further energy solutions systems.

Qualmark Enviro accreditation YHA remains committed to the Qualmark Enviro accreditation system. All YHA-managed hostels retained their accreditation. Enviro Gold

Enviro Silver

»» »» »» »» »» »»

»» YHA Auckland City »» YHA Auckland International »» YHA Christchurch Rolleston

YHA Aoraki/Mt Cook YHA Queenstown Central YHA Queenstown Lakefront YHA Te Anau YHA Wanaka YHA Wellington

»» »» »» »»

House YHA Franz Josef YHA Lake Tekapo YHA Opoutere YHA Rotorua

Enviro Bronze

»» YHA Christchurch

Geothermal Rotorua, Solar installation at YHA Franz Josef, the Green Footprint Project in Christchurch, YHA Lake Tekapo supports Hostelling International’s Sleep for Peace

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YHA New Zealand | Annual Report 2016

INTERNATIONAL YHA New Zealand is an active and contributing member of Hostelling International (HI), the trading name of the International Youth Hostelling Federation (IYHF). This membership is strategically important for YHA New Zealand and achieves a key competitive advantage. We continue to foster our international presence and relationships through the following:

»» HI CEO’s Meeting in Vienna, November 2015 Chief Executive, Mark Wells, represented YHA New Zealand at this meeting which is the key annual business meeting for the HI network.

»» STAY WYSE Conference (Amsterdam) and Hostelworld Conference (Ireland), January 2016 Manager, Marketing and Sales, Brian Westwood, attended these conferences, further building our international networks across the sector and across the HI network.

»» HI General Participation YHA New Zealand continues to contribute positively to HI. Chief Executive, Mark Wells, facilitated the Task Force that reviewed the HI website and booking platform, while Brian Westwood is an active participant in both the HI Membership and Marketing forums.

»» YHA Australia Relationship YHA New Zealand continues to work closely with YHA Australia at both management and operational levels. This includes structured meetings among senior management as well as staff participation in each country’s key meetings.

» YHA Raglan, Abel Tasman National Park, Guests in Auckland, Routeburn Track

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YHA New Zealand | Annual Report 2016

OUR FINANCIALS SUMMARY STATEMENT OF COMPREHENSIVE REVENUE AND EXPENSES FOR THE YEAR ENDED 30 JUNE 2016 2016 $ 000s

2015 $ 000s

GROSS REVENUE

15,235

15,256

TOTAL EXPENDITURE

14,659

15,136

576

120

14

26

(631)

(762)

(41)

(616)

Gain/(Loss) on Sale of Assets

7

593

Costs associated with Property Restructures

-

(214)

(997)

-

(1,031)

(237)

Revaluation of Land and Buildings

3,067

(287)

TOTAL COMPREHENSIVE REVENUE (DEFICIT)

2,036

(524)

2016 $ 000s

2015 $ 000s

Total Comprehensive Revenue for the Year (Deficit)

2,036

(524)

Movement in Net Assets for the Year

2,036

(524)

Balance at Start of the Year

31,074

31,598

NET ASSETS AT END OF THE YEAR

33,110

31,074

2016 $ 000s

2015 $ 000s

Accumulated Funds

21,437

21,821

Revaluation Reserves

11,673

9,033

-

220

33,110

31,074

Net Surplus/(Deficit) before Financing Costs Interest Received Interest Paid Surplus/(Deficit) after Financing Costs

(Impairment) of Goodwill NET SURPLUS/(DEFICIT) FOR THE YEAR

SUMMARY STATEMENT OF CHANGES IN NET ASSETS FOR THE YEAR ENDED 30 JUNE 2016

SUMMARY STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2016

FUNDS OF THE ASSOCIATION

Stewart Island Hostel Building Fund TOTAL ASSOCIATION FUNDS


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YHA New Zealand | Annual Report 2016

These were represented by: ASSETS Current Assets Long-term Lease paid in advance Mortgage Investment Assets Classified as Held for Sale Investment Property Property & Plant Equipment Intangible Assets TOTAL ASSETS

324

710

1,975

2,086

80

240

1,128

2,600

3,364

3,364

35,391

29,680

4,343

5,643

46,605

44,323

LESS LIABILITIES Current Liabilities

3,159

2,814

Term Liabilities

10,336

10,435

TOTAL LIABILITIES

13,495

13,249

NET ASSETS PER THE ASSOCIATION’S FUNDS

33,110

31,074

On Behalf of the National Board

John Hammond — National Chair

Kevin Brewer — Convenor, Audit and Risk Committee

SUMMARY STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2016 2016 $ 000s

2015 $ 000s

NET CASHFLOWS FROM OPERATING ACTIVITIES

1,588

1,496

NET CASHFLOWS FROM INVESTING ACTIVITIES

(2,015)

(1,000)

NET CASHFLOWS FROM FINANCING ACTIVITIES

(99)

(593)

(526)

(97)

331

428

(195)

331

1

331

NET INCREASE / (DECREASE) IN CASH Add Opening Cash Balance CLOSING CASH AND BANK BALANCES REPRESENTED BY: Cash at Bank and on Hand Bank Overdraft

(196)

-

(195)

331


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YHA New Zealand | Annual Report 2016

NOTES TO THE SUMMARY FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016

These are the Summary Financial Statements of the Youth Hostels Association of New Zealand Incorporated (YHA New Zealand) for the year ending 30 June 2016. The specific disclosures included in these summary financial statements have been extracted from the full annual financial statements authorised for issue on 13 August 2016. The full financial statements have been prepared in accordance with the requirements of the Charities Act 2005, which includes the requirement to comply with generally accepted accounting practice in New Zealand (NZ GAAP). The full financial statements have been prepared in accordance with Tier 2 Public Benefit Entity Standards and reduced disclosure concessions have been applied. The criteria under which an entity is eligible to report in accordance with Tier 2 Public Benefit Entity Standards are that Youth Hostels Association of New Zealand Incorporated is not publically accountable and not considered large as its expenses over the last two financial period do not exceed $30 million per annum. These summary financial statements do not include all the disclosures provided in the full financial statements and cannot be expected to provide as complete an understanding as provided by the full financial statements. An unqualified audit opinion has been received on the full financial statements for the year ended 30 June 2016. A copy of the full YHA New Zealand financial statements for the year ended 30 June 2016 may be obtained by phoning YHA New Zealand on (03) 379 9970, or by emailing national. secretary@yha.co.nz. These summary financial statements have been examined by our auditors for consistency with the full financial statements. An unqualified audit opinion has been received. These summary financial statements were approved for issue by National Board on 13 August 2016.

Basis of preparation YHA New Zealand is a public benefit entity, incorporated under the Incorporated Societies Act 1908; and is registered as a charitable entity under the Charities Act 2005. These are the summary financial statements of YHA New Zealand and they comply with FRS43: Summary Financial Statements. The presentation currency is New Zealand dollars, rounded to the nearest thousand dollars. The full financial statements, upon which these Summary Financial Statements are based, have been prepared to comply with the NZ GAAP and Financial Reporting Act 2013. There have been no events subsequent to balance date which materially affect the result for the year, or impacted on trading as a going concern. Post balance date the Kaikoura property has been sold. This property is shown in the financial statements as an asset held for sale.

Specific accounting policies All specific accounting policies have been applied on the same basis as those used in the full financial statements of YHA New Zealand.

Changes in accounting policies The Minister of Commerce has approved a new Accounting Standards Framework developed by the External Reporting Board (XRB). Under this Accounting Standards Framework, YHA New Zealand is classified as a public benefit entity and as such applies the new PBE Standards as applicable for private not-for-profit entities. These standards were developed by the XRB based on current International Public Sector Accounting Standards (IPSAS). The effective date for the new standards for private not-for-profit entities began for reporting periods beginning on or after 1 April 2015. This means YHA New Zealand transitioned to the new standards in preparing its 30 June 2016 financial statements. There were no material adjustments or reclassifications as a result of the transition that require the comparative to be restated.


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YHA New Zealand | Annual Report 2016

AUDITOR’S REPORT

Report of the Independent Auditors on the Summary Financial Statements to the members of Youth Hostels Association of New Zealand Inc.

The accompanying summary financial statements, on pages 14 to 16 which comprise the summary statement of financial position as at 30 June 2016, the summary statement of comprehensive revenue and expenses, the summary statement of changes in net assets and the summary cash flow statement for the year then ended, and related notes, are derived from the audited financial statements of Youth Hostels Association of New Zealand Inc. for the year ended 30 June 2016. The summary financial statements do not contain all the disclosures required for full financial statements under New Zealand Equivalents to International Financial Reporting Standards. Reading the summary financial statements, therefore, is not a substitute for reading the audited financial statements of Youth Hostels Association of New Zealand Inc. Our audit of the financial statements for the year ended 30 June 2016 was completed on 16 August 2016 and our unmodified opinion was issued on that date. We have not undertaken any additional audit procedures in relation to those financial statements from the date of the completion of our audit and those financial statements and the summary financial statements do not reflect the effects of events that occurred subsequent to the date of our report on those financial statements. This report is made solely to the Association’s members, as a body. Our work has been undertaken so that we might state those matters we are required to state to them in a report from the auditor and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Association’s members, as a body, for this report, or for the opinions we have formed. In addition, we take no responsibility for, nor do we report on, any part of the annual report not specifically mentioned in our report. Directors’ Responsibility for the Summary Financial Statements The Directors are responsible on behalf of the Company for the preparation of the summary financial statements in accordance with FRS-43: Summary Financial Statements (FRS 43). Auditors’ Responsibility Our responsibility is to express an opinion on the summary financial statements based on our procedures, which were conducted in accordance with International Standard on Auditing (New Zealand) 810: Engagements to Report on Summary Financial Statements.

We are independent of the association. Our firm carries out other services for the association in the area of treasury advice. The provision of these other services has not impaired our independence. Opinion In our opinion, the summary financial statements on pages 14 to 16 derived from the audited financial statements of Youth Hostels Association of New Zealand Inc. for the year ended 30 June 2016 are consistent, in all material respects, with those audited financial statements, in accordance with FRS-43.

Restriction on Use of our Report

This report has been prepared for inclusion in the annual report. We disclaim any responsibility for reliance on this report or the amounts included in the summary financial statements, for any purpose other than that for which they were prepared.

Chartered Accountants 16 August 2016

Christchurch

PricewaterhouseCoopers 5 Sir Gil Simpson Drive, Canterbury Technology Park, PO Box 13244, Christchurch 8053, New Zealand T: +64 3 374 3000, F: +64 3 374 3001, pwc.co.nz


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YHA New Zealand | Annual Report 2016

GOVERNANCE STATEMENT The Youth Hostels Association of New Zealand is a registered charitable organisation and an incorporated society. It is governed by a National Board as elected by YHA New Zealand members.

Member participation

National Board

Members are also encouraged to attend and take part in the AGM in order to gain insight into YHA’s strategic direction and performance.

YHA New Zealand relies upon the vision and business expertise of its Board, which consists of six elected senior financial members and up to two co-opted members. National Board:

»» is responsible for acting in the best interest of YHA »» is committed to good governance »» links its governance role

Register of interests National Board maintains an up to date register of interests which is available for inspection by all Board members, the Chief Executive and Auditors.

Board committees National Board has three sub-committees: Remuneration Committee – comprising the Chair (or their delegate) and up to two other Board members; responsible for all aspects of the Chief Executive’s employment, including developing annual key performance indicators and remuneration. In addition, the Remuneration Committee signs off on all employment matters in relation to senior staff.

All senior financial members are, upon eight or more weeks’ current membership, entitled to vote in all YHA elections and vote on constitutional notices of motion.

National Board publishes YHA News, an update for members on Board activities, four times a year.

Branches and Member Groups YHA Branches were originally formed by groups of like-minded members who often volunteer their time to support hostels and their activities. Many members of today’s Branch or Member Groups were involved with YHA when it was purely volunteer based and provide a valuable link to our history. Branch committees are responsible for co-ordinating member activities within the Branch and electing a representative to attend YHA’s AGM. Member Groups are an alternative way for members to come together for social and/or travel activities without the formalities of a branch structure.

Registered Office YHA New Zealand’s registered office is in Christchurch.

Audit and Risk Committee – comprising no less than three Board members, one of whom is elected as Convenor. Responsible for monitoring and reviewing the internal and external audit, financial reporting and accounting policies, and systems of internal control. Also responsible for ensuring that a risk management framework, including adequate and appropriate insurance covers, is in place and the Board’s risk appetite is clearly stated.

National Board: Ray Salter, Kevin Brewer, John Hammond (National Chair), Jaya Prasannan, Darren Burden, Steve Wakefield, Michael Sheehan

»

Awards Committee – comprising the Chair (or their delegate) and the elected Honorary Vice-Presidents. Responsible for receiving and considering nominations for service and merit awards and for determining the annual Cora Wilding Memorial Award.

ACKNOWLEDGEMENTS Bequests

Acknowledgement of donations

The estate of Ewen Duncan Jones provided $99,414 this year. The Eric Gordon Harvey Trust provided $5,202. In line with the trust deed this is to be used for the benefit of hostels in the South Island, so this year’s amount has been applied to the installation of solar panels at YHA Franz Josef.

YHA is very grateful for the following donations of $100 or more. Wellington Branch Geriatrix Cycle Touring Group Dunedin Branch Rotorua Branch Peggy Jack Patricia Keiller

$6,588 $3,752 $200 $195 $100 $100


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YHA New Zealand | Annual Report 2016

OUR HOSTEL NETWORK YHA-managed hostels

Franchise partners

Associate partners

North Island

North Island

YHA Auckland City YHA Auckland International YHA Opoutere YHA Rotorua YHA Wellington

YHA Bay of Islands Paihia YHA Napier YHA Taupo Finlay Jacks

North Island YHA Ahipara Holiday Park YHA Bay of Islands The Rock Adventure Cruise YHA Gisborne YHA Hamilton Microtel YHA National Park Backpackers YHA New Plymouth Sunflower Lodge YHA Ohakune Station Lodge YHA Paraparaumu Barnacles Seaside Inn YHA Raglan Solscape Eco Retreat YHA Waitomo Juno Hall YHA Whanganui Braemar House YHA Whangarei Falls Holiday Park YHA Whitianga On the Beach Backpackers

South Island YHA Nelson By Accents

South Island YHA Christchurch YHA Christchurch Rolleston House YHA Franz Josef YHA Lake Tekapo YHA Aoraki/Mt Cook YHA Queenstown Central YHA Queenstown Lakefront YHA Te Anau YHA Wanaka

South Island YHA Anakiwa Anakiwa Lodge YHA Arthur’s Pass Mountain House YHA Glenorchy Kinloch Lodge YHA Golden Bay Annie’s Nirvana Lodge YHA Hanmer Springs Kakapo Lodge YHA Hokitika Birdsong Backpackers YHA Motueka Laughing Kiwi YHA Oamaru Red Kettle YHA Picton The Villa YHA Punakaiki Te Nikau Retreat YHA Springfield Smylies YHA Westport Tripinn Hostel

DIRECTORY Patron His Excellency Lieutenant General The Right Honourable Sir Jerry Mateparae, GNZM, QSO, Governor-General of New Zealand.

Honorary Life Members 1967

Gordon Solloway

1968

Jim McKie

1978

Jean Nelson

2007

Bruce Bertram Moira Lipyeat

2008

Elizabeth Beer

2010

Charlie Smith

2011

Ross Butler Lance Kiddey Ben Mitchell John Wilson

2012

Harry Guitry Rex Smart

2013

Bruce Ward

2014

David Berry Amanda Gower

2015

Coral Laughton Clive Croy

1982

Peggy Jack (nee Lawless) Donald Paterson

1986

Rodney Metcalfe

1989

Gwyn Rogers Ruth Wildish

1990

Roy Pyle

John Hammond (National Chair)

1996

Peter Bugler

2001

Bill Morris Malcolm Wade

Kevin Brewer (Convenor, Audit and Risk Committee)

2006

Mike Northmore Gilbert Whalley

National Board

Darren Burden Barry Cope*

Jaya Prasannan**

Auditors

Ray Salter (Deputy Chair)

PricewaterhouseCoopers

Michael Sheehan

Solicitors

Steve Wakefield

Young Hunter Rhodes & Co

*Passed away January 2016 **Co-opted October 2015

Honorary VicePresidents

Charities Commission Registration Number CC37649

YHA Member Groups

Dave Berry Amanda Gower Harry Guitry

Canterbury Hawke’s Bay – Friends of YHA Rotorua

Chief Executive

YHA Member Branches

Mark Wells

Auckland Whangarei

Senior Leadership Team Kevin Cameron Simon Cartwright Maureen McCloy Mark Wells Brian Westwood

Bank Bank of New Zealand


Youth Hostels Association of New Zealand Inc. 1st Floor, Moorhouse City, 166 Moorhouse Avenue, PO Box 436, Christchurch 8140, New Zealand ph: +64 (0) 3 379 9970 | fax: +64 (0) 3 365 4476

www.yha.co.nz

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YHA New Zealand Annual Report 2016  

YHA New Zealand Annual Report 2016  

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