2006 ETITO

2006 ETITO
ANNUAL REPORT
LIST OF CONTENTS
INTRODUCTION
3
CHAIRMAN’S REPORT
4
CHIEF EXECUTIVE’S REPORT
8
SOME OF THE HIGHLIGHTS FOR ETITO IN 2006 11
GOVERNANCE
20
INTRODUCTION TO ETITO CONSULTING LIMITED
21
2006 ETITO CONSOLIDATED FINANCIAL STATEMENTS
22
INTRODUCTION
ETITO [ELECTROTECHNOLOGY INDUSTRY TRAINING ORGANISATION]
WAS FORMED IN 1993 AS THE INDUSTRY TRAINING ORGANISATION FOR THE ELECTROTECHNOLOGY INDUSTRY. IN 1996, THE TELECOMMUNICATIONS AND SECURITY INDUSTRIES WERE ADDED TO ETITO’S COVERAGE. IN 2004, ETITO WAS JOINED BY THE AMBULANCE ITO.
The primary stakeholders of ETITO are the four industries that it serves. It is
primarily funded by the New Zealand government through the Tertiary
Education Commission [TEC]. Other income sources include the sale of
goods and services both related to, and independent of, industry training.
ETITO is mandated by the Industry Training Act and its Amendment to do the
following for the industries in its coverage:
Provide leadership on matters relating to skill and training needs.
•
S
et national skill standards and develop national qualifications for its industries.
•
Arrange the delivery of training.
•
In addition, ETITO acts on behalf of its industries to:
Promote ETITO industries as career choices.
•
Provide consulting services through ETITO Consulting Limited.
•
S
upport government programmes such as Modern Apprenticeships and Gateway.
•
CHAIRMAN’S REPORT
IT IS MY PLEASURE TO PRESENT THE
CHAIRMAN’S REPORT FOR 2006 WHICH WAS A POSITIVE YEAR THAT SAW SIGNIFICANT
CHANGE AND PROGRESS.
TRAINING
As at 31 December 2006 there were 8,633 trainees registered with ETITO
from 1,451 participating companies. This represented an 11.6% increase in
trainees and a 3.5% increase in participating companies over the previous
year. ETITO, while funded by government to deliver 3,757 STMs [Standard
Training Measures] actually delivered 3,860, an over-achievement of 3%. The
trainees came from a wide range of industry sectors including ambulance,
electrical and electronic, security and telecommunications. The efforts of the
management team in order to fulfil industries needs for training, in those areas
that our funding restrictions permit, is much appreciated.
Moving forward, the 2007 contract with the Tertiary Education Commission
provides for a 14% increase in STM [training] funding, with an STM rate increase
of 1.9%, resulting in an overall funding increase of 15.9%.
Progress towards becoming the standards setting body for the financial
services industry is ongoing. Negotiation with a myriad of bodies to enable a
whole industry to be brought into the industry training regime is proving to be
arduous, complicated and slow despite the industry wanting it to happen.
The process required has taken in excess of twelve months, and ought not be
as difficult as it is proving to be.
GOVERNMENT
Two years ago I acknowledged the high priority given to industry training
by government.
Now with the Tertiary Reforms well under way, I am beginning to question my
interpretation of those prior events. The new system is intended to shift away
from ‘demand’ to ‘need’. That is, it moves Tertiary Education Organisations
[TEOs], including ITOs, away from being focused on maximising student
enrolments and towards achieving strong outcomes for students, business
and communities, which is essential if New Zealand is to get value from its
investment in tertiary training.
Unfortunately the path being signalled has the potential not only to place
training providers – Institutes of Technology and Polytechnics [ITPs] – in direct
competition with ITOs, but to encourage even greater competition by ITPs.
Having charged ITOs with leading their industries on skill and training matters,
they have now made polytechnics responsible for undertaking a regional
facilitation role in this respect. As most industry training is required nationally
or at least across a number of geographic regions, this decision logically
requires ITOs to invest resources to ensure that this planning complements
their own.
Given that ITPs are funded at a level approaching three times that of ITOs, the
path chosen by government has the potential to undermine industry’s
investment in and control over industry training. This move compounds the
effects of officials’ unwillingness to address overlapping provision which is
already undermining ownership by industry at large, of industry training.
Members of the ITO are encouraged to give serious consideration to what
can be done to protect the very valuable asset and key contributor to our
future prosperity that is ETITO. The lack of detail relating to the role, and
published consideration of the probable impact upon ITOs, of the proposed
reforms is, in my opinion, unacceptable.
BUILDING FOR THE FUTURE
As signalled in last year’s report, the Board authorised the formation of a
wholly owned subsidiary as a means of meeting the demand for training
across all of our industry sectors when a large proportion of our income is
capped. The concept of generating additional revenue streams, separate
from the TEC Industry Training Fund and our industry partners, was a key
driver in taking this decision. ETITO Consulting Limited won its first contract in
November 2006 and is now close to completing it. The first strategic plan has now been completed and the subsidiary is now looking for further
opportunities.
STAKEHOLDER RELATIONSHIPS
As for all member based organisations, this is an area of key importance.
Balancing the needs of all members is an ongoing priority for the Board. This
year saw Ambulance New Zealand accepted as a member. The active role that
they have chosen to play is welcome and makes the ITO stronger. It also saw
the start of discussions with New Zealand Security Association that will more
clearly define and strengthen the relationship between the two organisations.
I acknowledge the input and support from our industry owners which must
never be under estimated as it is a vital component, without which, the ITO
could not function.
BOARD
At the end of the year we farewelled Bob Campbell. On behalf of you all, I wish
to acknowledge Bob’s contribution to the ITO. It was valuable and much
appreciated. I also wish to acknowledge the input and effort of the other
members of the Board which made the year’s achievements possible. As
required by the Constitution, my term as Chairman has come to an end and I
would like to thank everyone with whom I came into contact over the three
years for their generous support.
Murray Hobson
‘I acknowledge the input
and support from our
industry owners which
must never be under
estimated as it is a vital
component, without
which, the ITO could
not function.’
CHIEF EXECUTIVE’S
REPORT
We approached the 2006 year with determination – determination that training
places would be available to all comers, and there would be an end to the
queues that had formed in the previous year. It is mostly with relief that we
report success in achieving that aim. We attracted from government a larger
subsidy. We completed reviews of several of our most popular training
programmes and we enhanced our systems. Industry training services were
delivered into 1500 New Zealand workplaces for 11,650 apprentices and
trainees in the electrotechnology, telecommunications, contact centre and
security industries, and ambulance sector.
To secure our ability to offer service to all comers into the future we paid
particular heed to the sustainability of ETITO’s business.
We chose more beneficial investment instruments, planned more systematic
accumulation of cash reserves and established a limited liability company,
ETITO Consulting Limited [ECL], to generate revenue from sources other than
government funds. ECL’s first major contract will be completed by mid 2007.
ETITO is due for re-recognition as an ITO in the 2007 year. The direct
engagement with stakeholders through research activities, regional forums,
standards and qualification advisory groups has netted us rich information to
inform the strategic direction of the organisation. Endorsement of the new
strategy will be sought mid 2007.
This period [2006-2007] is one of significant change in the tertiary education
sector. The current reform process is requiring considerable shifts in how we
work. Government is now putting greater emphasis on ITOs’ role as leaders
for industry and tertiary providers. The primacy of national qualifications for
vocational training is confirmed but allowance is made for Institutes of
Technology and Polytechnics [ITPs] to provide industry training services.
These overlaps and inconsistencies are not yet resolved and ETITO is
contributing to the lobby mounted by the Industry Training Federation. In the
meantime, ETITO finds itself in a competitive market with ITPs who are funded
by government at much higher levels. Market share has been lost in the
security staff services sector.
A major focus for the year has been the improvement of quality assurance
practices in teaching, assessment and moderation, both in training provider
and workplace environments. This programme of review will continue into
2007 when it will touch the full range of assessors, their practice, their training
and their moderation in the workplace.
There is always the need to enhance the capability of the organisation through
its people. ETITO’s operation has grown in steps, year on year, and heads into
2007 with ten new staff roles in quality management, research, qualifications
development, communications, administration and service delivery. The
phenomena of ‘worker mobility’ and longer recruitment times are experiences
for ETITO in recent times as they are for most organisations in this tight labour
market.
I want to take this opportunity to make it known that ETITO is only as good as
its people, and its people are pretty good. As well as doing their own work,
ETITO staff have covered for vacancies, invested in inducting new staff and
generally journeyed the extra mile to maintain service levels. ETITO directors
have been supportive of organisational initiatives. In particular, because they
are the intelligence that keeps the ITO relevant, I want to acknowledge formally
the voluntary contributions of time and expertise we receive through client
feedback, consultation forum participation, and research and industry advisory
group activity. To my mind, this is industry’s investment in your national training
systems and in your agent, ETITO. Thank you for your contribution to a
successful year of industry training.
A positive Audit New Zealand audit report of ETITO carried out in December
2006 augurs well for the organisation as it heads into 2007. The tertiary reform
process will result in some changes through the year, but I am confident that
they will not distract us unduly from our responsibility to advance industry
training on behalf of our industries in alignment with government’s goals.
‘I want to acknowledge
formally the voluntary
contributions of time and
expertise we receive
through client feedback,
consultation forum
participation, and research
and industry advisory
group activity.’
[L to R] Marilyn Brady, Charlene Beinart, Michael Frampton, Patsy Stewart, Heather Lees.
10
SOME OF THE
HIGHLIGHTS FOR
ETITO IN 2006 WERE:
WORKPLACE ACHIEVEMENTS
Our training workplaces performed very well in 2006. The numbers of
apprentices and trainees participating in industry training exceeded the targets
set with the Tertiary Education Commission [TEC] and so too did their
achievement of credits and qualifications. This is a good result considering
STM [training volume] targets were increased by 14% from 2005.
CRITERIA
TEC TARGET
ACHIEVEMENT
Standard Training Measures [STMs]
3,757
3,860
Qualifications Completed
2,600
2811
260,000
311,859
28%
27%
Credits Achieved
Industry Contribution
Note that these figures include Modern Apprenticeships.
More information about our industries’ apprentices, trainees and Modern
Apprentices is shown overleaf.
11
Qualifications reported by year
ACTUAL Credits reported by year
CONTRACTED
ACTUAL 3000
350000
2500
300000
CONTRACTED
250000
2000
200000
1500
150000
1000
100000
500
50000
0
0
2004
2005
2004
2006
2006
Qualifications achieved by industry by year
STMs by year
ACTUAL 2005
Ambulance CONTRACTED
2000
4000
technology Contact Centre Electro-
Offender Management Security Telecommunications
3500
1500
3000
2500
1000
2000
1500
500
1000
500
0
0
2004
2005
2004
2006
Ambulance technology Contact Centre Ambulance Electro-
Offender Management Security Telecommunications
2006
Trainees By Industry
reported by year
Credits achieved by industry
reported by year
200000
2005
5000
technology Contact Centre Electro-
Offender Management Security Telecommunications
4000
150000
3000
100000
2000
50000
1000
0
0
2004
12
2005
2006
2004
2005
2006
ethnic group by industry
European/pakeha
ethnic group by industry
Pacific Islander
Ambulance
Ambulance
Contact Centre
Contact Centre
Electrotechnology
Electrotechnology
Offender Management
Offender Management
Security
Security
Telecommunications
ethnic group by industry
¯
New Zealand Maori
ethnic group by industry
Other
Ambulance
Ambulance
Contact Centre
Contact Centre
Electrotechnology
Electrotechnology
Offender Management
Offender Management
Security
Security
Telecommunications
Trainees & Modern apprentices by region
Auckland
Bay of Plenty
Canterbury
Hawkes Bay
Manawatu/Wanganui
Nelson/Marlborough
Northland
Southland
Taranaki
Waikato
Wellington
West Coast
13
2006 HIGHLIGHTS
CONTINUED...
QUALIFICATION DEVELOPMENT
In 2006, the decision was made to interrupt the planned cycle of qualification
development so that the results of the research into future skill needs could be
used in the review process. We note, therefore, a backlog of the less well used
qualifications requiring review.
THE QUALIFICATIONS REVIEWED OR DEVELOPED IN THE PERIOD INCLUDE:
The National Certificate in Offender Management [Level 3]
The National Certificate in Offender Management [Level 4]
The National Certificate in Security with strands in Court Security, Event Security,
Mobile Patrol, Noise Control, Retail Security, Secure Transport and Site Security
The National Certificate in Telecommunications [Level 3] with strands in Bearer
and Switch, Building and Data Cabling
The National Certificate in Electrical Engineering [Electrical Appliance and
Electronic Servicing] [Level 3]
The National Certificate in Electrical Engineering [Electrical Appliance and
Electronic Servicing] [Level 4] with strands in Commercial Electrical Appliances,
Domestic Electrical Appliances, Electronic Consumer Goods, Office Equipment
and Portable Electrical Appliances and Power Tools.
PROJECTS CONTINUING INTO 2007 ARE:
The National Diploma in Engineering [Level 6] with strands in Computer
Engineering, Electrical Engineering, Electronics, Industrial Measurement and
Control and Telecommunications
The National Certificate in Financial Services [Banking] [Level 5]
The National Certificate in Financial Services [Level 3]
The National Certificate in Financial Services [Level 4]
The National Certificate in Financial Services [Level 5]
The National Certificate in [Advanced] Financial Services [Level 6]
The National Certificate in Financial Services [Financial Services Broking
Management] [Level 5]
14
The National Certificate in Financial Services [Financial Planning] [Level 5]
The National Certificate in [Advanced] Financial Services [Financial Advice]
[Level 6]
The National Certificate in Financial Services [FMB] [Level 4]
The National Certificate in Insurance Services [Level 3]
The National Certificate in Insurance Services [Level 4]
The National Certificate in Financial Services [Insurance Assessment
Services] [Level 4]
The National Certificate in Insurance Services [Level 5]
The National Certificate in Financial Services [Insurance Broking] [Level 5]
The National Certificate in Electrical Equipment [Level 2]
The National Certificate in Industrial Measurement and Control [Level 4]
New qualifications are in development for the finance and insurance industry
for whom ETITO will gain industry coverage in 2007. The suite of qualifications
for the electrotechnology industry has been expanded to include a new
programme for employees involved in the wholesaling of electrical and similar
equipment. This national certificate will also come into use in 2007.
15
QUALITY SYSTEMS
In 2006, ETITO embarked on a review of moderation and assessment
systems, both internal and external, in preparation for an audit by NZQA in
2007. Activities included a systematic upgrade of the quality of assessment
materials to produce more easily auditable, valid and sufficient assessment
evidence. A national moderator training manual was introduced and reinforced
at two moderator workshops. Collaborative processes for external moderation
of industrial measurement and control qualifications and the National Diploma
in Engineering were introduced. Good practice standards for internal
moderation were identified for future use, along with enhanced processes for
continuous improvement.
These and planned future quality improvements mean that employers, trainees
and training providers can have greater confidence in the consistency and
quality of training.
FUTURE SKILLS LEADERSHIP
ETITO’s research effort into the future skill needs of our industries continued in
earnest during the period. Investigation was made into the industrial
measurement and control sector and the findings fed into qualification reviews.
The Bright Sparks programme was evaluated against its aim of attracting
young people into hi-tech careers. Research reports are now published
alongside those into the electrical, telecommunications and security industries
on ETITO’s website at www.etito.co.nz.
In the second phase of the research programme, industry and training provider
workgroups in telecommunications and security reviewed recommendations
from the reports, identifying and prioritising the action to be taken to address
skill needs in future years.
EQUITY PROJECTS
The Tertiary Education Strategy identifies ways in which industry training can
contribute to government goals relating to youth transition to work or further
training, participation in education and training by Māori and Pasifika peoples,
and lifting foundation skill levels of people at work. ETITO has made significant
responses across all dimensions of the Strategy.
As well as the flagship school-to-work transition programme, Bright Sparks,
ETITO has supported 600 Modern Apprenticeships in electrotechnology and
many secondary school students through the Gateway scheme. Strategies to
enhance the participation of both Māori and Pasifika are designed and pilot
projects with WelTec and Unitec confirmed for 2007. A fruitful partnership with
Workbase, the adult literacy provider, is progressing with a first initiative focusing
on the literacy needs of trainees in the security staff services sector. Collaboration
with expert partner organisations underpins each of these activities.
16
BRIGHT SPARKS
This three pronged strategy to increase the pool of young people drawn into
electrotechnology and other hi-tech careers continued to bed into the fabric
of technology education in New Zealand secondary schools. All aspects of
the programme – the two National Certificates in Electronics Technology, the
teacher training and support activities and resources, the Bright Sparks’ own
internet club, www.brightsparks.org.nz, and competition – are continually
enhanced so that in 2006, 2,764 students in 117 schools participated in the
programme.
Bright Sparks themselves advised on the redesign of the brand and
website, completed during the year. They also excelled at the Bright
Sparks HiTech Competition Awards evening held in November at the Sky
City Convention Centre in conjunction with the annual industry event.
In July, the Convergence Conference was hosted by ETITO’s Bright Sparks
managers in Christchurch. Technology teachers from around the country
took part in week long activities, exploring the teaching of electronics and the
alignment of the industry qualifications with NCEA. These developments were
positively received by the conference delegates and Ministry of Education
officials, and will be continued.
STAKEHOLDER RELATIONS
Further to the research projects, consultation and communication with
industry and training stakeholders occurred in 12 regional forums for those in
the electrotechnology, contact centre and security industries. Presentations
17
were made at the annual conferences of the Electrical Contractors
Association of New Zealand [ECANZ], the Appliance and Electronics
Industry Association [A&EIA], the New Zealand Security Association
[NZSA], the Telecommunications Users Association of New Zealand
[TUANZ] and the hi-tech industry.
As well as reviewing and recasting ETITO newsletters into on-line or
print media, according to industry preference, we reinstated the practice
of advertising training in the trade magazines ElectroLink, TUANZ Topics
and New Zealand Security magazine. 17 advertorials appeared in these
publications in the year. The year’s programme to disseminate key
messages about the benefits of industry training was completed with a
re-design of the ETITO website. It is now the primary repository of
information about the national training systems we manage.
These forums, conference attendances and publication programmes are
manifestations of the new Stakeholder Relations Management Plan
introduced in 2006. The delivery of the plan highlighted areas for further
development and better connections. The year ended with commitments
to recast relationships, communications and services to the ambulance
sector and the security advisory body. For the most part, stakeholders
have advised us that our communications should encompass all of
ETITO’s activities, not just those in the industry with which they identify.
In three particular instances, close collaborations with stakeholders are
codified in Memoranda of Understanding [MoU] or similar. The Institution
of Professional Engineers of New Zealand [IPENZ], the Institutes of
Technology and Polytechnics of New Zealand [ITPNZ], National
Electrotechnology Educators’ Consortium [NETEC] and ETITO have
teamed up to promote, deliver and quality assure the National Diploma
in Engineering [Electrotechnology] as the New Zealand standard for
technician training under the international Dublin Accord.
A new MoU was signed with the Electrical Workers Registration Board
[EWRB] recording the alignment, and mechanisms for maintaining
alignment, of regulatory requirements for electrical workers, the
licensing regime and the obligations of trainees and supervisors under the Act, with the national industry training system in
electrotechnology.
Our partner, as we pursue better literacy services, is Workbase. The
memorandum between us delivered ETITO a literacy strategy and an
extension of the agreement to work together as we begin to implement
that strategy.
18
THE ICT IN CANTERBURY GROWTH PILOT PROJECT
Begun in 2004, this $1.76M project, involving all the tertiary institutions,
and the Canterbury ICT Cluster of electronics and software
manufacturing companies in the region, is a collaborative initiative led
by ETITO and funded by the Tertiary Education Commission.
The 2006 phase of the project focused on the development of a public
promotional strategy and media campaign to attract young people in
the region to careers in the ICT industry. The ICT THE SMART FUTURE
brand was launched to the community in November at the Connectivity
’06 trade show at the Christchurch Convention Centre. The brand, its
key messages and call to action, supported by a comprehensive
website, www.thesmartfuture.co.nz, will roll out in 2007.
The year also saw the further development of tertiary courses and a
second research report on the skill needs of Canterbury companies in
the ICT sector.
19
[L to R] Jim Anderson, Ross Beal, David Waters, Brian Nowell, Murray Hobson, David Grant.
GOVERNANCE
Ray Barbara resigned from the Board after ten years of service to ETITO as
director, and from 1999 – 2003, as Chairman of the Board. Ray, on behalf of
the Electrical Contracting sector, was there from the beginning, guiding the
development of competency based apprenticeships for electrical workers, as
well as building ETITO, the organisation.
The year also saw both Bob Campbell’s term as director and Murray Hobson’s
three year term as Chairman draw to an end.
AFTER THE 2006 ELECTIONS, THE BOARD COMPOSITION IS:
Brian Nowell – Chairman
David Grant – Deputy Chairman
Murray Hobson
Ross Beal
Jim Anderson
David Waters
20
INTRODUCTION TO
ETITO CONSULTING
LIMITED
ETITO Consulting Limited [ECL], a subsidiary of ETITO Incorporated, was
established in 2006 to leverage ETITO’s intellectual property and experience
in the design and implementation of industry-led education and training
systems. ECL will provide niche consulting services to government agencies,
industries, and enterprises for commercial gain, both in New Zealand and
abroad.
The sole objective of ETITO Consulting Limited is to produce profit that can
be applied to the objects of ETITO for the benefit of ETITO’s industries in New
Zealand.
In 2006, ETITO Consulting Limited secured a contract in British Columbia Canada, to design a competency based qualification and supporting training
system for industrial electricians working in heavy industrial [solid wood,
mining and smelting, pulp and paper and oil and gas] workplaces. This work
will be completed in 2007.
Also in 2006, ETITO Consulting Limited engaged in a business planning
process that identified the organisation’s target markets, product and service
offering and strategic initiatives out to 2010. This process identified the
following key differentiators of the services to be offered by ETITO Consulting
Limited:
Leading market experience and technical expertise in designing and developing
industry training systems.
Recognised reputation in New Zealand that has already attracted international
interest.
Unrivalled knowledge base of qualifications, competency assessment
frameworks and training systems.
Valuable experience in stakeholder consultation and integration.
Highly qualified and experienced team with ‘kiwi styled’ can do approach.
This plan will be implemented in the second half of 2007.
21
2006 ETITO
CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2006
22
DIRECTORY
FOR THE YEAR ENDED 31 DECEMBER 2006
Trading Name
ETITO
Head Office
Level 3, Building B
65 Main Highway
Ellerslie
Auckland
Postal Address
Freepost 5164
PO Box 24-469
Royal Oak
Auckland
Telephone/Fax
Ph. [09] 525 2590
Fax. [09] 525 2591
Chief Executive
Marilyn Brady
Auditors
Deloitte
Chartered Accountants
Auckland
Bankers
ASB Bank Ltd
North Harbour Business Banking
Albany
23
24
25
ELECTROTECHNOLOGY INDUSTRY TRAINING ORGANISATION INCORPORATED
STATEMENT OF FINANCIAL performance for the year ended
31 DECEMBER 2006
ETITO CONSOLIDATEDETITO INCORPORATED
2006
2005
2006
2005
$
$
$
$
TEC Training Subsidies 11,583,044
9,406,160 11,583,044 9,406,160
Moderation Income 100,016
114,647 100,016 114,647
Industry Contribution
995,364
821,757
995,364
821,757
Ventures Income
358,272
225,141
148,834
225,141
Interest Income
200,339
117,059
200,329
117,059
Expense Recoveries from Subsidiary
0
0
101,090
0
27,780
28,492
27,780
28,492
Operating Revenue
Notes
Other Income
7
Total Operating Revenue
13,264,815
10,713,256
13,156,457
10,713,256
8
Operating Expenses
Training Subsidies
5,348,324
3,880,184
5,348,324
3,880,184
Training Support Services
2,883,363
2,498,856
2,883,363
2,498,856
Research & Curriculum Development
479,225
409,716
479,225
409,716
Quality Assurance
227,763
146,398
227,763
146,398
Stakeholder Relations
539,805
309,887
539,805
309,887
Ventures
478,025
363,496
365,433
363,496
Administration Costs
2,649,417
1,864,728
2,649,417
1,864,728
Governance
32,440
43,933
32,440
43,933
Total Operating Expenses
12,638,362
9,511,498
12,525,770
9,511,498
$626,453
Net Surplus For The Year
$ 1,196,058
$630,687
$ 1,196,058
STATEMENT OF MOVEMENTS IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2006
ETITO CONSOLIDATEDETITO INCORPORATED
2006
2005
2006
2005
$
$
$
$
Equity at Start of Year
2,387,281
1,191,223
2,387,281
1,191,223
Net Surplus for the Year
626,453
1,196,058
630,687
1,196,058
626,453
1,196,058
630,687
1,196,058
Total Recognised Revenue
and Expenses
Equity At End Of The Year
26
$3,013,734
$2,387,281
$ 3,017,968
$2,387,281
The notes on pages 29–37 form part of and should be read in conjunction with these financial statements
ELECTROTECHNOLOGY INDUSTRY TRAINING ORGANISATION INCORPORATED
STATEMENT OF FINANCIAL POSITION AS AT
31 DECEMBER 2006
ETITO CONSOLIDATEDETITO INCORPORATED
Notes
Accumulated Funds 2006
2005
2006
2005
$
$
$
$
$3,013,734
$2,387,281 $3,017,968
$2,387,281
Represented by: Current Assets Accounts Receivable
6
232,714
52,934 366,224
52,934
Accrued Income
9
1,805,418
1,426,675 1,772,928
1,426,675
Bank – ETITO 1,968,209
1,675,241 1,863,399
1,675,241
Bank – Bright Sparks Scholarships 28,989
42,710 28,989
42,710
Bank – Growth Pilot 137,613
189,622 137,613
189,622
GST Receivable 241,046
146,004 239,899
146,004
Prepayments 42,636
33,396 37,110
33,396
Inventory
11,793
3,825 11,793
3,825
3,570,407 4,457,955
3,570,407
12
Total Current Assets 4,468,418
Current Liabilities Accounts Payable
16
470,718
455,439 480,718
455,439
Accrued Expenses – ETITO 1,090,894
781,707 1,076,197
781,707
Accrued Expenses – Growth Pilot 173,066
122,472 173,066
122,472
41,250
38,333 41,250
38,333
Employee Entitlements 208,482
145,284 208,482
145,284
Scholarship Fund 9,000
20,000 9,000
20,000
27,780
27,780 27,780
27,780
Total Current Liabilities 2,021,190
1,591,015 2,016,493
1,591,015
Net Current Assets 2,447,228
1,979,392 2,441,462
1,979,392
569,939 700,776
569,939
0
0
10,000
0
700,776
569,939 710,776
569,939
134,270
162,050 134,270
162,050
$3,013,734
$2,387,281 $3,017,968
Income in Advance
Current Portion of Deferred Income
15
10
Non Current Assets Plant and Equipment
3
Investment in Subsidiary – Shares in ETITO Consulting Limited
700,776
17
Total Non Current Assets Non Current Liabilities Deferred Income
10
Net Assets
$2,387,281 On behalf of the board
Chairman Date 12.4.07 Chief Executive Date 23.4.07
The notes on pages 29–37 form part of and should be read in conjunction with these financial statements
27
ELECTROTECHNOLOGY INDUSTRY TRAINING ORGANISATION INCORPORATED
STATEMENT OF cash flows
FOR THE YEAR ENDED 31 DECEMBER 2006
ETITO CONSOLIDATEDETITO INCORPORATED
Notes
2006
2005
2006
2005
$
$
$
$
Cash flows from Operating Activities
Cash was provided from:
Government Grants 11,634,340
9,845,796
11,634,340
9,845,796
Receipts from Customers
1,390,413
1,017,561
1,310,797
1,017,561
Interest Received
194,104
113,682
194,094
113,682
Cash was applied to:
Payments to Suppliers and Employees
[12,651,077]
Net Inflow from Operating Activities
13
567,780
[9,615,921]
[12,676,261]
[9,615,921]
1,361,118
462,970
1,361,118
Cash flows from Investing Activities
Cash was provided from:
Sale of Plant and Equipment
0
291
0
291
Cash was applied to:
Purchase of Plant and Equipment
[340,542]
[89,408]
[340,542]
[89,408]
Net Outflow from Investing Activities
[340,542]
[89,117]
[340,542]
[89,117]
Net Increase/[Decrease] in Cash Held
227,238
1,272,001
122,428
1,272,001
Add Cash at Start of Year
1,907,573
635,572
1,907,573
635,572
Balance at End of Year 28
$2,134,811
$1,907,573 $2,030,001 $1,907,573
The notes on pages 29–37 form part of and should be read in conjunction with these financial statements
ELECTROTECHNOLOGY INDUSTRY TRAINING ORGANISATION INCORPORATED
NOTES TO THE FINANCIAL STATEMENTS
1. STATEMENT OF ACCOUNTING POLICIES
The entity reporting is Electrotechnology Industry Training Organisation
Incorporated. The accounts have been prepared in accordance with
generally accepted accounting practices.
General Accounting Policies
The following general accounting policies have been adopted in the
preparation of the financial statements. The measurement basis adopted
is that of historical cost. The reporting currency is New Zealand dollars.
Particular Accounting Policies
The following are the particular accounting policies which have a material
effect on the measurement of results and financial position:
Consolidated Financial Statements
The consolidated financial statements comprise ETITO Incorporated, its
subsidiary, and the subsidiary’s interest in joint ventures.
Subsidiaries are those entities that are controlled by ETITO Incorporated.
The group financial statements incorporate the financial statements of
ETITO Incorporated and its subsidiaries which have been consolidated
using the purchase method. The results of any subsidiaries that become
or cease to be part of the group during the year are consolidated from the
date that control commenced or until the date that control ceased.
All inter-company transactions, balances and unrealised profits are
eliminated on consolidation.
Joint Ventures
Joint ventures are joint arrangements between the group and another
party in which there is a contractual agreement to undertake a specific
business project in which the venturers share several liability in respect of
the costs and liabilities of the project and share in any resulting output.
The group’s share of the assets, liabilities, revenues and expenses of joint
ventures are incorporated into the group financial statements on a line by
line basis using the proportionate method.
29
ELECTROTECHNOLOGY INDUSTRY TRAINING ORGANISATION INCORPORATED
NOTES TO THE FINANCIAL STATEMENTS
Plant and Equipment
a) Plant and Equipment are stated at cost less accumulated depreciation.
b)Plant and Equipment have been depreciated at the following rates:
Computer Software
40%
SL
Computer Hardware
25%
SL
Furniture & Fittings
25%
SL
Motor Vehicles
25%
SL
Office Equipment
25%
SL
CRM Database
20%
SL
Leasehold Fitout
Term of Lease
Inventories
All inventories are valued at the lower of cost and net realisable value.
Industry Contribution
Training Management Fees received, included in Industry Contributions,
are recognised and taken to income in the period in which they are billed.
TEC Training Subsidies
TEC Training Subsidies are received under a performance contract with
the Tertiary Education Commission and outstanding subsidies are accrued
and recognised as income in the period to which they relate.
Operating Leases
Operating lease rentals are recognised evenly over the expected period of
benefit to the organisation.
Taxation
The reporting entity has been approved as a charitable organisation and
has exemption from Income Tax under Income Tax Legislation.
Goods and Services Tax
The financial statements have been prepared stating all income and
expenditure items exclusive of GST.
Statement of Cash Flows
The Statement of Cash flows is prepared exclusive of GST, which is
consistent with the method used in the Statement of Financial
Performance.
Definitions of the terms used in the statement of cash flows:
Cash includes coins and notes, demand deposits and other highly liquid
investments readily convertible into cash and includes at call borrowings
30
ELECTROTECHNOLOGY INDUSTRY TRAINING ORGANISATION INCORPORATED
NOTES TO THE FINANCIAL STATEMENTS
such as bank overdrafts, used by ETITO Incorporated and the group as
part of their day-to-day cash management.
Operating activities include all transactions and other events that are not
investing or financing activities.
Investing activities are those activities relating to the acquisition and
disposal of current and non-current investments and other non current
assets.
Financing activities are those activities relating to changes in the equity
and debt capital structure of ETITO Incorporated and the group and those
activities relating to the cost of servicing ETITO Incorporated and the
group’s equity capital.
Foreign Currency
Transactions denominated in foreign currencies are translated into the
reporting currency using the exchange rate in effect at the transaction
date.
Monetary items receivable or payable in a foreign currency are translated
at balance date at the closing rate.
Exchange differences on foreign currency are recognised in the statement
of financial performance.
Interest Income
Interest income is accrued on a time basis by reference to the principal
outstanding and at the effective interest rate applicable.
Differential Reporting
ETITO Incorporated is eligible to apply differential reporting exemptions in
accordance with the Institute of Chartered Accountants of New Zealand
Framework on the grounds that it is not large.
The following exemptions in respect of the Statement of Standard
Accounting Practices [“SSAP”] have been applied:
• SSAP 23 Financial Reporting for Segments.
Changes in Accounting Policies
There have been no changes in accounting policies. All policies have been
applied on a basis consistent with last year.
2. PRINCIPAL ACTIVITY
A multi-industry Industry Training Organisation [ITO], ETITO has gazetted
industry coverage for the electrotechnology [including electrical engineering,
electronic engineering, electronic security, motor rewinding and repair,
switchgear fitting, appliance servicing, and industrial measurement and
control], security [including offender management] and telecommunications
31
ELECTROTECHNOLOGY INDUSTRY TRAINING ORGANISATION INCORPORATED
NOTES TO THE FINANCIAL STATEMENTS
[including contact centre] industries as well as the ambulance sector.
Recognised as a Tertiary Education Organisation [TEO], ETITO is enabled
by statute to: develop skill standards and qualifications, manage national
training systems and provide skills leadership to the industry constituencies
for whom it has gazetted industry coverage.
ETITO Consulting Limited [ECL], a subsidiary of ETITO Incorporated, was
established in 2006 to leverage ETITO’s intellectual property and experience
in the design and implementation of industry-led education and training
systems to provide niche consulting services for commercial gain, both in
New Zealand and abroad.
3. PLANT AND EQUIPMENT
ETITO CONSOLIDATED and ETITO INCORPORATED
Cost
Accum
Book
As at 31 December 2006
Depn
Value
$
$
$
Furniture & Fixtures
145,709
115,630
30,079
Office Equipment
79,247
68,311
10,936
Motor Vehicles
0
0
0
Computer Hardware
468,579
348,327
120,252
Computer Software – CRM Database
239,842
213,791
26,051
– Other
173,779
85,329
88,450
Leasehold Fitout – Head Office
448,256
156,810
291,446
Leasehold Fitout – Wellington
143,978
10,416
133,562
1,699,390
998,614
700,776
As at 31 December 2005
Cost
Accum
Book
Depn
Value
$
$
$
Furniture & Fixtures
127,343
96,545
30,798
Office Equipment
70,654
60,254
10,400
Motor Vehicles
0
0
0
Computer Hardware
384,388
280,019
104,369
Computer Software – CRM Database
239,842
193,175
46,667
– Other
93,135
56,681
36,454
Leasehold Fitout
448,255
107,004
341,251
1,363,617
793,678
569,939
32
ELECTROTECHNOLOGY INDUSTRY TRAINING ORGANISATION INCORPORATED
NOTES TO THE FINANCIAL STATEMENTS
4. CAPITAL COMMITMENTS & CONTINGENT LIABILITIES
The Organisation has a contingent liability in respect of the Accident
Compensation Commission’s residual claims levy. The levy will be payable
annually from May 1999 for up to fifteen years. The Organisation’s future
liability is a function of ACC’s unfunded liability for past claims and future
payments to employees by the Organisation. There are no other contingent
liabilities or capital commitments [2005 Nil].
5. OPERATING LEASE COMMITMENTS
Commitments for operating leases are as follows:
ETITO CONSOLIDATED and ETITO INCORPORATED
2006
2005
$
$
0-1 year
651,568
526,659
1-2 years
617,333
386,668
2-5 years
1,194,455
985,693
Over 5 years
330,412
583,702
2,793,768
2,482,722
6. ACCOUNTS RECEIVABLE
Accounts Receivable includes a provision of $11,735 for doubtful debts
[2005 $12,781].
Accounts Receivable for ETITO Incorporated includes $232,586 intercompany balance owing from ETITO Consulting Limited.
7. OTHER INCOME
Other Income includes $27,780 of previously deferred income [2005
$27,780].
33
ELECTROTECHNOLOGY INDUSTRY TRAINING ORGANISATION INCORPORATED
NOTES TO THE FINANCIAL STATEMENTS
8. OPERATING EXPENSES
Operating expenses includes the following costs:
ETITO CONSOLIDATED and ETITO INCORPORATED
2006
2005
$
$
Audit Fee
11,770
9,604
Bad Debts 2,350
6,530
Change in Provision for Doubtful Debts
[1,046]
11,220
Depreciation – Furniture & fixtures
19,088
20,099
- Office Equipment
8,057
10,791
- Motor Vehicles
0
0
- Computer Hardware
68,306
66,197
- Software CRM Database
20,615
47,968
- Software Other
28,649
11,357
- Leasehold Fitout-HO
49,806
49,802
- Leasehold Fitout-Wellington
10,416
0
Directors’ Fees 20,100
31,400
[18,500]
0
Net Director Fees
1,600
31,400
Donations
0
100
Loss/[gain] on Sale of Assets
0
2,036
8,936
0
Less reversal of fees not claimed in prior years
ETITO CONSOLIDATED
Foreign Exchange Losses
9. ACCRUED INCOME
Accrued Income is government subsidies relating to the reporting period
but not yet received from the Tertiary Education Commission.
10.DEFERRED INCOME
The deferred income is a contribution from the lessor to fitout the new
premises and will be recognised over the term of the lease of the
premises.
11.INDUSTRY PAYMENTS NOT INCLUDED IN ETITO BOOKS
Industry payments made direct to providers for off job training and other
employer/trainee related payments incurred amounted to $3,136,237
excluding GST [2005 $1,671,548].
12.INVENTORY
Inventory consists of finished goods for resale.
34
ELECTROTECHNOLOGY INDUSTRY TRAINING ORGANISATION INCORPORATED
NOTES TO THE FINANCIAL STATEMENTS
13.NET CASH FLOW FROM OPERATING ACTIVITIES
Reconciliation of Statement of Financial Performance surplus with net
cash flow from operating activities:
ETITO CONSOLIDATEDETITO INCORPORATED
2006
2005
2006
2005
$
$
$
$
Surplus for the Year
626,453
1,196,058
630,687
1,196,058
Add/[Subtract]: non cash items
- Depreciation
204,937
206,215
204,937
206,215
- Deferred Income
[27,780]
[27,780]
[27,780]
[27,780]
1,374,493
807,844
1,374,493
Operating Surplus
803,610
Movements in Funds
Net Decrease/[Increase] in
Receivables and Prepayments
[662,805]
[215,255]
[757,152]
[215,255]
Net Decrease/[Increase] in Inventory
[7,968]
[11,895]
[7,968]
[11,895]
Net Increase/[Decrease] in Payables
430,175
196,598
425,478
196,598
Items classified as investing activities:
Investment in ETITO Consulting Ltd
0
0
[10,000]
0
Loss/[gain] on Sale of Plant and Equipment
0
2,036
0
2,036
[3,881]
[8,649]
[3,881]
[8,649]
8,649
0
8,649
0
1,361,118
462,970
1,361,118
Plant & Equipment Purchases in Payables
Plant and Equipment Purchases prior year payables
Net Cash Inflow from Operating Activities
567,780
14.FINANCIAL INSTRUMENTS
In the normal course of business, the organisation incurs credit risk from
trade debtors and transactions with financial institutions.
The organisation does not have any significant concentrations of credit
risk. It does not require any collateral or security to support financial
instruments as it only deposits with, or loans to, banks and other financial
institutions with high credit ratings.
The carrying value of cash, receivables, trade creditors and payables is
equivalent to their fair value.
The group has exposure to foreign exchange risk as a result of transactions
denominated in foreign currencies arising from normal trading activities.
The currency in which the group primarily deals with is the Canadian
dollar.
35
ELECTROTECHNOLOGY INDUSTRY TRAINING ORGANISATION INCORPORATED
NOTES TO THE FINANCIAL STATEMENTS
15.INCOME IN ADVANCE
Income in Advance represents sponsorship income for the period to
December 2007.
16.ACCOUNTS PAYABLE
Accounts Payable for ETITO Incorporated includes $10,000 inter-company
balance owing to ETITO Consulting Limited.
17.INVESTMENTS IN SUBSIDIARIES
ETITO Consulting Limited was incorporated on 13 June 2006 and is 100%
owned by ETITO Incorporated. The results of ETITO Consulting Limited’s
operations for the year were a loss of $4,233 and are included in the
consolidated statement of financial performance as from the date of
incorporation.
Subsidiary Owned at 31 December 06:
Name
Principal Activities
Ownership and
Voting Interest
ETITO Consulting Limited
Consulting Services
2006
100%
2005
0%
The Subsidiary has a balance date of 31 December.
ETITO Consulting Limited is incorporated in New Zealand.
18.JOINT VENTURE
The group has an interest in a joint venture between ETITO Consulting
Limited and Fulford Harbour Consulting Limited to perform consulting
services in Canada. Under the joint venture, the costs are shared equally
and the revenue is shared 69% ETITO Consulting Limited and 31% Fulford
Harbour Consulting Limited. The group’s share of revenues, costs, assets
and liabilities relating to the joint venture have been included in the
consolidated financial statements.
19.FOREIGN CURRENCY DENOMINATED MONETARY ASSETS AND LIABILITIES
ETITO CONSOLIDATEDETITO INCORPORATED
2006
2005
2006
2005
$
$
$
$
Current asset Canadian dollars
210,584
0
0
0
Current liability Canadian dollars
23,288
0
0
0
Current assets and current liabilities not hedged 36
ELECTROTECHNOLOGY INDUSTRY TRAINING ORGANISATION INCORPORATED
NOTES TO THE FINANCIAL STATEMENTS
20.RELATED PARTIES
Transactions
ETITO Incorporated incurred expenditure of $215,632 [2005 nil] on behalf
of its subsidiary ETITO Consulting Limited and charged this expenditure to
the subsidiary.
No related party balances have been written off or forgiven during the
year.
37