N Z M E T A L S I N D U S T R Y G O I N G G L O B A L

N Z M E T A L S I N D U S T R Y G O I N G G L O B A L

ABOUT THE COVER :

During the year, HERA

has engaged with the

industry to develop the

Metals Industry sector

element of the New Zealand

Trade & Enterprises’

Manufacturing + Strategy.

The theme of the NZ metals

industry going global is

refl ected in the 3rd Metals

industry Conference in

Hamilton and organised

by HERA, entitled

“The NZ Metals Industry as

a Global Player”.

HERA is the Research Association of the New Zealand Metals Engineering Industry. Established in 1979 under the Heavy Engineering Research Levy Act of 1978 as a member-based, not-for-profi t Research Association, HERA today serves around 600 industry members as their leading resource support centre.

HERA MISSION STATEMENT

To provide a platform for the NZ Metals Engineering Industry to explore new technologies and growth by accelerating innovation and strengthening combined opportunities through technical and marketing research, careers education, information technology, and product R&D.

This mission is to be realised by pursuing the following three main goals:

• To accelerate innovation in the Metals Engineering Industry

• To widen HERA’s range of services and improve its cost-to-benefi t ratio

• To position the New Zealand Metals Engineering Industry as a responsible leader in the sustainability of our environment

HERA Executive at 30 June 2006

Name Company Representing

Mr N Davies Hydraulink Fluid Connectors Ltd NZ Engineering Federation

(Chairman)

Mr D Turkington Beca Carter Hollings & Ferner Ltd Ordinary & Associate Members

(Deputy Chairman)

Mr D Band Track Industries Ltd Ordinary & Associate Members

Mr C Ford New Zealand Steel Ltd President NZ Steel

Mr D J Fraser Acme Engineering Ltd Ordinary & Associate Membersr

Mr. J Fraer OneSteel NZ Ltd Co-opted representing SCNZr

Mr P Hutton Brightwater Engineers Ltd Ordinary & Associate Members

Mr G Jensen Jensen Steel Fabrication Ordinary & Associate Members

Mr D Moore Grayson Engineering Ltd Ordinary & Associate Members

Mr I Murray Robt Stone Ltd Ordinary & Associate Members

Mr D R K Smith Mobridge Ltd Ex Offi cio, Chairman of HEERF

Mr K C F Spring OSA Silvester Clark Ltd Ordinary & Associate Members

Annual Report 2006

JOINT MESSAGE FROM THE HERA CHAIRMAN AND HERA DIRECTOR

STRUCTURAL STEEL DIVISION

STEEL CONSTRUCTION NEW ZEALAND (SCNZ)

NEW ZEALAND WELDING CENTRE

BUSINESS DEVELOPMENT GROUP

HERA INFORMATION CENTRE

INSPECTION & QUALITY CONTROL CENTRE

HERA SECRETARIATS

NEW ZEALAND STAINLESS STEEL DEVELOPMENT ASSOCIATION (NZSSDA)

NATIONAL ASSOCIATION OF STEEL FRAMED HOUSING (NASH)

HERA FINANCIAL STATEMENTS

HEAVY ENGINEERING EDUCATIONAL & RESEARCH FOUNDATION

HERA MEMBERS AS AT 30 JUNE 2006

HERA STAFF

HERA Executive

From left:

Kevin Spring

Chris Ford

Peter Hutton

Greg Jensen

Dale Turkington

Duncan Fraser

HERA Director Wolfgang Scholz

David Moore

HERA Chairman Noel Davis

Insets, from top:

John Frear

David Band

Keith Smith

Ian Murray

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2006200420022000199819961994199219901988198619841982

Annual Report 2006

FROM THE HERA CHAIRMAN AND HERA DIRECTOR

To summarise, here are some of the highs and lows of the 2005/2006 HERA Year:

• Slowdown in industry activityas compared to last year’sexceptional performance

• Despite lower than budgetedlevy income, HERA broke even fi nancially

• Steel Construction NewZealand incorporated as independent societ

• Signifi cant progress madetowards establishing the Metals Institute ofNew Zealand

• Metals industry export stategydocument established

• Export-driven metals industrystrategy documentestablished

• Recognition as InternationalInstitute of Welding (IIW)Approved Training Body

• Metal forming research activities established

• HERA divisions largelyachieved their performance targets despite personnelconstraints

58

841

4

65

33

47622

50

011

487

07

39

62

607

74

494

43

420

52

48

325

437

45

53

42

46

30

0 4

39

00

520

05

30

60

0 3

89

00

490

0

39

60

0 61

400

730

00

258

00

2340

0 41

00

1

38

30

0 24

700

65

00

0

2320

0 21

350

290

00

3287

3 18

692

4

441

4

35

65

5 24

491

56

42

442

08

3222

6 62

10

5558

7 46

456

62322

48

60

5 49

39

8 76

65

496

61

50

492

81822

43

45

4 4

464

3 6

80

46

418

96

410

84

649

79

487

92

4914

1 70

21

50

00

4 5

04

30

832

11

5913

7 49

113

83

42

587

78

53

497

749

5

6131

1 77

036

991

4 9

793

68

704

47

69

68

6

649

88

651

30

1025

5

RHS

Sections

Plate

HERA Income Streams & Staff Numbers

12

5

9

12

10 10 109

1314 14

16 1615 15

1617

15 15 15 15 1516

19

22

2423

-

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

78/79 79/80 80/81 81/82 82/83 83/84 84/85 85/86 86/87 87/88 88/89 89/90 90/91 91/92 92/93 93/94 94/95 95/96 96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06

Financial Year

NZ $

0

10

20

30

Staff numbers

SCNZ (Steel Construction NZ)

Other mainly self generated income

Heavy Egineering Educational &Research Foundation Grant

Government Grant -HERA House

Government Research Contracts

Membership Subscription

Deferred Income (minus)

Staffing levels

Annual Report 2006

Wolfgang ScholzDirector

Noel DaviesChairman

Financial Year

Annual Report 2006

Charles CliftonSenior Structural Engineer

Structural Steel Research

Several long-term research projects in the fi re and earthquake areascame to successful conclusions with design guidance beingaccepted and fi rst buildings going up incorporating the newseismic resisting systems.

HERA Report R4-134: Semi-Rigid Steel Bolted Jointsfor Moment-Resisting Steel Framed Seismic-ResistingSystems (MRSFS) was published in 2005, and completes a researchproject that began in 1995. Twonew joint systems were developedin that research, both designed to provide considerable benefi tsin regard to damage resistance, ease of repair and greater design freedom than is possible fromconventional strong column-weak beam MRSFS. Each of the systemshas been incorporated into newbuildings, with the University of Auckland Business School well underway by mid-2006. A furtherround of development on eachjoint is now underway, promising further advances in both systems.

In fi re engineering completed was the publication of HERA Report R4-131: Design ofComposite Steel Floor Systemsfor Severe Fires. This reportand accompanying software presents the slab panel method of designing composite steel fl oorsystems with some unprotectedsupporting beams for dependable inelastic response in severe fi res. It completes a research projectthat commenced following the

large building Cardington fi retests in the UK and has involved research at HERA, the University of Canterbury and BRANZ.

HERA Report R4-133: NewZealand Steelwork CorrosionCoatings Guide was alsocompleted. For coated steelwork, this report provides the necessary guidance to allow an appropriate and cost-effective coatings systemfor structural steel to be selectedand specifi ed in a generic manner.If the steel is to be left unpainted, it allows the corrosion rate tobe determined for a very widerange of exposure conditions and a design loss of material determined for a given design life.

The past year has seen increasingcontributions to steel research and technical development from the University of Auckland andthe University of Canterburyand research initiatives from several consulting engineers andincluded the following projects:

• Steelwork Partially Protected by Radiation Barriers, MEfi re engineering project

• Sliding Hinge Joint for Steel Moment Frames, fi nal yearundergraduate project

• Development of newbridge decks

• End yielding criteria for steel beam-columns

• Suppression of axial shorteningin steel beam-columns

The HERA Senior StructuralEngineer gratefully acknowledges the vital and expanding role of groups and individuals contributing towards the ongoing developmentof structural steel in New Zealand.

Bridge Development Group

The BDG has provided guidanceand technical support for a number of existing and new steel bridgesaround New Zealand. The Mercerto Longswamp weathering steelbridge was opened as part of the Mercer to Longswamp Expressway project south of Auckland, to which the BDG provided guidance and conducted preliminary design last

year. This year HERA structural engineers conducted a site surveyand checked the performanceof the weathering steel.

As for new steel bridges around New Zealand, the BDG has conducted two preliminary bridge designs and gained an insight on the working of tender selectionand other issues that may affect the selection of steel bridges.

CSA

The CSA Project has been runningfor close to 2 years and is nowbuilding momentum. Research is currently focused on thedevelopment of a prefabricatedComposite Wall Panel Systemand a Prefabricated Hollow RibFloor System for Residential, Industrial and Multi-Level Buildings. Good progress is being made in the developmentof prototypes, which are being tested. Market needs analysesare well under way across all themain building consent categories and a structured methodology for project work has been set up.

The following manufacturing concepts and processes are inthe developmental phase, each one being the topic of focus by individual researcher groups: rollforming, press forming, welding, clinching and other joining technologies, lightweight concrete manufacturing technology,and composite steel panel manufacturing processes -formwork design and construction, panel assembly. Partner companieshave contributed to testingmaterials, equipment fabrication, personnel and cash contributions towards contract employment of specialist professionals.

Projects to determine the variousperformance requirements of the products is under way, including materials and their combination, durability, fi re resistance, load carrying capacity, acoustic andthermal performance. Relationships with industry bodies and other research organisations are being formed to ensure continuation of

Raed El SarrafStructural Engineer

Inspecting the Mercer weathering steel bridge

STEEL DIVISION

Annual Report 2006

Rosemary Scofi eld CSA BusinessDevelopment Manager

the consortium initiatives beyondthe FRST contract period.

Seminars, Presentations and Papers

As part of a joint Structural Steelseminar with SCNZ, Charles Clifton and Raed El Sarraf presented a half-day seminar on behaviour and design of multi-storey steel buildings for dependable response in fi re.

Charles Clifton gave presentationson the Coatings Guide to the Auckland Chapter of the Australasian Corrosion Association and to the Wellington Structural Group.

Raed El Sarraf presented a paperentitled Recommendations forShear Connector Design and Detailing for Interior and Exterior Secondary Composite Beams,written by Dr Tony Gillies of Lakehead University, Canada, Dr John Butterworth, University of Auckland, Raed El Sarraf and Charles Clifton of HERA at the2005 Australasian StructuralEngineering Conference. Following an invitation, a modifi ed paper for publication in the AustralianJournal of Structural Engineering and this has been done.

A paper entitled “Failure of WeldedMoment Resisting Connections”, summarising the moment resistingconnection research work undertaken over 2004 to 2006by HERA, has been accepted for publication in the American Institute of Steel Construction’s EngineeringJournal, 4th Quarter, 2006.

Codes and Standards

HERA represented the steel construction and general steel based building interestthrough membership and active participation in the ConstructionIndustry Council (CIC). HERA also made submissions to publications,position papers, strategies andgeneral developments where ametals based position is required.Of particular note was the HERA Senior Structural Engineer’s

representation on the following committees and working groups:

• P3404 Committee (which he is chairman of) developingAmendment No 2 to the Steel Structures Standard NZS 3404.

• Department of Building and Housing Working Group G6 onAirborne and Impact Sound, where we are providing input into the requirements for building performance in these areasand guidance on steel solutions to meet these requirements.

• Design and Construction Industry Advisory Group forStandards New Zealand

Other Structural DivisionActivities Included:

• Publication of DCB Issue No 78

• Development of a design procedure for Eccentrically Loaded Cleats in Compression

• Participation in theSteelwork Call Centre

• Consulting work on arange of projects from fi reengineering peer reviews toadvising on joint failures

• ongoing preparation towardsthe hosting of the next Pacifi c Structural Steel Conference to be held at the WairakeiResort Hotel in March 2007

Advanced Finite Element Analysis

HERA’s FEA efforts have beensuccessful in terms of appliedresearch through the CSA project and consulting services provided to the industry.

Several complex fi nite element analyses have been performedon various options/seedpodideas of the newly-designed loadbearing wall panels. Detailedunderstanding of the composite steel-lightweight concrete wall panel behaviour has been obtained through experimental testing and FEA by stretchingthe limits of the simulations.

Good working relationships have been established with theAUT and University of Auckland

research teams with excellentcontributions driving the multi-disciplinary research/design work forward. Effi cient use of the available hardware resourcehas been made with many of the jobs having average running times in the order of 24 hours.

It is encouraging to note that year by year more companies useHERA for FEA advice. The powerfulsimulation tool is used to assist in optimising critical design tasks,support failure analyses and predict critical performance not just relating to static strength but also buckling,thermal perfomance, response tofi re, explosion and different typesof dynamic loading. The latest version 6.6-1 of the ABAQUS/Standard/Explicit/CAE advancedsimulation tool used is a majorrelease with many enhancements that offer access to morepowerful fi nite element analysisfunctionality than ever before. Nodoubt the increased use of virtualprototyping tools will benefi t theNZ industry in the coming years.

Nandor Mago NAFEMS Registered Finite Element Analyst

Auckland University’s School of Business in the heart of CBD

Torsional buckling mode of fl anged cruciform section

Annual Report 2006

Greg JensenSCNZ Chairman

SCNZ - Chairman’s Report

The incorporation of SCNZ in June 2006 marked its coming of age.In the twelve months leading up to this important development, the society matured and grewstronger fi nancially. I believe it is now very well positioned tolook after the interests of theNew Zealand steel industry.

I would like to acknowledge theroles played by the steel millsand steel merchants in securing the voluntary levy collections.Thanks are also due to HERA and its Director, Dr Wolfgang Scholz, for the support and encouragement given to SCNZon its way to independence.

While this was taking place, the staff of SCNZ maintained a highwork rate, which included several seasons of seminars that were well attended by both North and SouthIsland audiences. The interest in the Smarter, Faster series was so high that an encore was called for.

But it wasn’t all work and no play, as members who participated in the Ambrose golf tournament and the jetboating on the Waimakaririwill testify. Meanwhile, our profi leas an industry has been raised with the publishing of three issues of the SCNZ Magazine.

In accordance with our Rules of

Incorporation, two members of the

Executive Council have stepped

down: Grant Bradford and Jamie

Macredie. I thank them for their

valued service. The two new

members elected to the Council

are Chris Ford and Russell Neal.

The remaining Council members,

John Frear (Vice Chair), Jon

Gousmett, Mike Klemick, Evan

Kroll, Dr Wolfgang Scholz and

myself, welcome them on board.

The Council, having approved a

comprehensive and very ambitious

Business Plan, is well pleased with

the direction that SCNZ is taking.

STEEL CONSTRUCTION NEW ZEALAND

Mercer off-ramp weathering steel bridge The SCNZ Team: Roy Kane, Clark Hyland, Alastair Fussell and Xiao Huantian

Auckland War Memorial museum expansion project Auckland War Memorial museum expansion project

Annual Report 2006

Clark Hyland SCNZ Manager

SCNZ Manager’s Report

Our ongoing building constructionsurveys of the Central Business Districts of Auckland and Wellingtonshow that, after the bottoming out that began in 2005, there was a recovery in 2006 which saw steel making gains in its share of the market. This was especially so in Wellington, where use of steelframes has risen to 58% and metal-deck fl ooring systems to 34% byfl oor area in multi-storey buildings.

SCNZ sponsored structural engineering research at both the universities of Auckland and Canterbury, and continuedour support for engineering students with our steel design award and site visits.

This year, the ‘Steel in Architecture’ lecture was given by Russell Lee of the Australian-based CoxGroup. Taking long-span steelstructures as his theme, Russelladdressed architects in Auckland, Wellington and Christchurch, giving vivid examples from exhibition centres and sporting stadia in several countries. SCNZalso took a stand at the annualconference of the Associationof Consulting Engineers of New Zealand, held this year at Rotorua.

One of our standing objectives is to encourage young people to consider the career opportunitiesthat exist across the entire steel sector. When Workchoice Day came along on May 16, we were able to provide support in the formof our ‘Careers in Steel’ booklet. We sent this to every secondary school,

intermediate and polytechnic in the country and the positive responsefrom students and careers advisors has been gratifying.

We have enjoyed tremendoussupport from our membersduring the year. The commitment and guidance from our various steering groups, chaired by Greg Jensen, Brendan Smithand Mike Klemick, have been invaluable in enabling the Councilto build our unifi ed success.

Overhead structural steelwork for Auckland Museum expansion project

Workchoice Day at Fletcher Easysteel

The well-received SCNZ Careers Guide

Steel Design Award being given out

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200620052004200320022001200019991998

Annual Report 2006

Industry Welding Activities Slowed

The New Zealand industry sectorrelying on welding as a joiningprocess now doubt felt the pinchin the year reported on. Fromthe record consumable import of 3,500 tonnes in the previous year, the imported consumabletonnages dropped by 31% to2,400 tonnes, well short of the previous year’s averages.

As a result of the reduced industry activity, welding levy income for the year was also belowbudget expectation; however, acombination of good self-generatedincome and reduced staff costdue to staff leaving balancedthe Welding Centre books.

As reported last year, an error in the implementation of the 2003 welding consumable levy increaseby Customs led to the deferred collection of app. $214,000 of welding levy (see Note 13 in theFinancial Statement). HERA has agreed with the representatives of the welding supply industrypresent at the DecemberWelding Centre Panel Meeting toearmark this money for special developments for the weldingfabrication industry. First proposals particularly around the promotionof careers, health and safetypractices and training have beenmade and will be put to the Panelin the new year for approval.

Staff Changes

There was no let-down in demandon Welding Centre activities and output of the Centre was seriously constrained by availability of suitably-qualifi ed staff. In June2006, HERA welcomed the newmanager of its New ZealandWelding Centre - Dr. MichailKarpenko. Michail took over the reigns from Dr. Wolfram Woerner who has returned to Germany after 5 years as Welding CentreManager. Andrew Short also left the Welding Centre to take up a PhD research position in welding at Nottingham University.

Courses and Seminars

Following successful WTIA accreditation as an approvedIIW Training Body, HERA ran International Welding Specialistcourses in both Wellington and Auckland. The courses were very well supported by industry, assisting with site visits, demonstrations and providinglecturers for case studies.

In February/March 2006 the NewZealand Welding Centre enjoyedthe support of Professor Wohlfahrt,an internationally recognizedexpert in the fi eld of residualstresses and fatigue behavior of metals. Prof. Wohlfahrt presentedone-day seminars on ‘ManagingWelding Distortion and Residual Stress’ in Auckland, Tauranga, Dunedin, and New Plymouth.

In 2005 the focus was on theInternational Welding Specialistcourses. However, a fundamentally important seminar series on “Whatevery Engineer should know aboutwelding” was also held in February.

Dr. Woerner has given weldinglectures to Mechanical Engineering students at the University of Auckland. HERA also continued working on the accreditation process as atraining provider with the NewZealand Qualifi cation Authority.

Welding Training Modules, Unit standards

The welding training modules continue to be widely-usedby training providers as eitherhard copy or CD versions.

A review of the NZQA unitstandards for welding hasbeen undertaken under contract to Competenz. Thisinvolves all the existing units and the drafting of 2 new unitsspecifi cally for 1st and 2nd yearapprentices on block courses.

Dr Michail KarpenkoWelding Centre Manager

Alan McClintock Welding Engineer

WELDING CENTRE

International Welding Supervisor course attendees get the Charpy V tests explained

Electrodes, etc

Aluminium

Stainless Steel

Carbon Steel and Other Alloy Steel

Annual Report 2006

David Wrightson Materials Engineer

Holger Heinzel Mechanical Engineer

Professor Helmut Wohlfahrt

Research into Joining Coated Sheet Steels

The Welding Centre carried out a series of fundamentalinvestigations into the joiningof NZ-made coated steel sheetas part of its contribution to theComposite Structural Assemblies (CSA) project. The joining projectfocused on evaluation, testingand further development of technologies for connectingthin coated steel sheets.

Technical Advice, Consultancy, Industry Projects

The Welding Centre continues to provide a high activity level of free technical welding advice as part of its service to industry. Income-generating consulting enjoyed considerable usage.

Conferences, Papers, International Visitors

In 2005/06 the New ZealandWelding Centre has published/submitted 4 Conference papersand 2 articles for technical journals.Acting American Welding Society(AWS) President Damian Koteckivisited HERA in October 2005

and gave an evening seminar onthe welding of stainless steel. He discussed options to re-establish a regional Asian Pacifi c network tocooperate in welding related topics.

NZ Welding Centre manager,Dr. Woerner and his successor,Dr Karpenko represented NewZealand at the Welding for Engineering Conference in Sydneyin June 06. The Conference is an annual event organised by the Welding Technology Instituteof Australia (WTIA). They alsoparticipated in the 17th Meetingof WTIA Qualifi cation andCertifi cation Board and in theWTIA Annual General Meeting.

Additionally, a delegation from theHarbin Welding Institute visitedHERA in July 2005. Options for co-operation were explored.

Standards

The Welding Centre has provided signifi cant input into the reviewof the standards AS/NZS 1554.7“Welding of cold formed steelstructures” and AS/NZS 2980 “Qualifi cation of arc-weldersfor welding of steels”.

Metals Forming Activities

As part of the CSA project the NZ Welding Centre is administeringactivities which eventually willlead to independent activity in sheet metal forming. The forming team, consisting of HERA metal forming engineer Holger Heinzel, and Auckland University of Technology’s (AUT) Head of School of EngineeringProf Thomas Neitzert and PHDstudent Florian Kern, togetherwith industry partner New ZealandSteel, has been busy establishing forming research facilities at AUT.

Thanks to the support of the Heavy Engineering EducationalResearch Foundation and industrysponsors, roll and sheet metal forming equipment has beenestablished at the new Sheet MetalForming Centre at AUT and the fi rst forming research packages have been started. Two additional researchers are intended tocomplement the team in 06/07.

Damian Kotecki Acting AWS President

Component manufactured by FitzroyEngineering for the Pohokura gas fi eld Development in Taranaki Clinching of thin galvanized sheets G 250

Laser welding of thin galvanized sheets G 250

2006(P)20052004

Annual Report 2006

The HERA Strategic Plan focused upon identifying and creating potential new business opportunities remains in placeand again during the year HERA members have been invitedto explore a range of potential newly arising technologies and market niches.

The cross sector relationshipswith the wood processing sector is mature and continuing to the benefi t of both sectors.

One example of particular note wasthe Steering Group identifi cationthat wet sawdust and planerdust from over 250 plants is an expensive hazard. Drying wetsawdust is in many situations uneconomic and is a leach hazard in landfi lls. Its handling and disposal also creates health hazards. BEstudents at Waikato Universityhave worked on this problem in the laboratory under Professor Alan Langdon and based upon theirfi ndings, a student spent time with HERA member Mount Steelcraftto build a prototype machine that combines the planner dust and wetsawdust to produce a compactlow-moisture material that can be utilized for a variety of products.

One application is as fuel for a CHP plant and to this end was trialed inthe market-ready Page and Macrae 3MW capacity woody biomass gasifi er. The student’s prototype isoperating at a Carter Holt sawmilland two students are currently working with Mount Steelcraft to

produce the production model to be released to the industry in 2007. Both HERA membersare to be applauded for their links with the training of the nextgeneration of engineers and fortheir openness for trying new ideas.

The HERA Business Development Group took full advantage of the combined UK Government andNZTE offer of four places at theAberdeen All Energy Conference in May, held in Scotland. Feedback was provided via the July HERA News. The resultant fi ndings andcontacts will form the base for future manufacturing, supply and servicing joint ventures benefi cialto the NZ metals industry.

HERA continues to monitor for itsmembership duty tariff concession applications and objects to themwhere it can be demonstrated that local capabilities exist. This is an important function and requiresongoing input to demonstrateto potential importers that local capabilities exist and that theseare worthwhile to consider atthe early project planning stage.

This year the objections raised or negotiations performed without objecting but securing of NZ input demonstrated again the value of this work to our members. Withthe recently updated BERL reportdemonstrating that for every $1million of import replacementspent 12 jobs are created, thisis an effective strategy to createbusiness in New Zealand.

As reported in the Director’s section, HERA has developed the metals industry sector part of NZTE’s Manufacturing+ Strategy,with the main focus on gainingexport share. However in the coming year, HERA will also take a more strategic view on localactivities in areas where NZ hasa good competitive position and it is of strategic benefi t for NewZealand to develop capabilities.

There are many opportunities fornationally signifi cant projects such as Kupe Gas (see schematic),wind farms, distributed energy andlarge infrastructure construction, and our member companieswill no doubt be able to makecost-effective contributions.

Norm Stannard (MQS Ltd)Business Development Group Manager

DEVELOPMENT GROUP

Ocean current turbine as shown at the All Energy Conference in Aberdeen visited by a HERA Delegation.

Page & Macrae Gasifi er

Machinery

Metal and metalarticles

Annual Report 2006

INFORMATION CENTRE

Members’ Services

HERA membership has increasedthis year by 32 members, refl ecting the industry’s need for networking, resource- andinformation-gathering.

Pacifi c Trade Expo 2006

HERA set up an exhibition standat the Pacifi c Trade Expo 2006 held between the 13th and 14th of February at the TelstraClear Pacifi cEvents Centre in Manukau City. The Expo was a huge success for the organisers, the Pacifi c Business Forum. The aim of theHERA stand was to raise the profi le of the NZ metals industry amongthe Pacifi c Islands, letting them know that the NZ metals industry has capabilities that these islandnations may not be aware of. Over 20 enquiries were received which were then passed on to relevantHERA members to follow up.

NZ Engineering News Dinner

HERA played host to a smallnumber of guests at the inaugural NZ EngineeringNews Industry Dinner which was held in conjunction with this year’s EMEX Show.

HayleyMedia, the publishers of Engineering News, invited HERA along with over 300 people whoattended the dinner. Both guestspeaker Mike Moore and the presentation of the Competenz ‘Knowledge in Action’ Awards were the crowd pullers. HERA’smotivation to host guests at a table was to use the eventas a networking opportunity with related metals industry organisations. HERA is currentlyreviewing its strategic directionand this was an ideal opportunity to share some of the industry-strategic thoughts with membersof the different sector groups.

Brian Low Information Centre Manager

3rd NZ Metals Industry Conference in Hamilton

The 3rd NZ Metals Industry

Conference planning proceeded at

fast pace to confi rm the venue of

the Kingsgate Hotel, and Hamilton

Gardens Pavilion as the venue for

the Conference Gala Dinner on

Friday night. Various speakers and

companies were also confi rmed

for both the Conference and

Industry Tours respectively.

Raewyn PorterReception/Administration

Two Brunel Super Trusses in the process of being lifted as part of an 8,500 ton operable roof for the Arizona Cardinals Stadium in Phoenix USA, which BDS Steel Detailers of Auckland detailed

HERA exhibition stand at the Pacifi c Trade Expo, February 2006

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100

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20062005200420032002200120001999

6 6 7 8 8 8 8 88 7 7 7 8 6 7 7

151 149 153 168 179 184 190 205

194 197 199 198 199 194 204 200

88 87 89 90 86 80 96 88 87 89 90 86 80 89

87 84 93 95 97 105 111 123

Annual Report 2006

Library

The HERA Library contains awide collection of books, CDs andvideos on all subjects related to heavy engineering, refl ecting theprojects undertaken by the variousdepartments within HERA. Thesubjects covered include welding, structural engineering, architecture, non-destructive testing, corrosionprotection, fi nite element analysis, metallurgy and the use of steel andstainless steel in architecture and construction. HERA also holds the proceedings of a number of conferences on these subjects.

Standards relating to HERA activities are also held in thelibrary. While the majority of these are New Zealand and Australian standards, relevant standardsfrom other organisations are also held. Any not included in theInformation Centre’s collection canusually be borrowed from otherlibraries, as HERA belongs to the New Zealand interlibrary loannetwork. All HERA members have full access to library publicationsand services, including literature searches, reference enquiries,borrowing and interlibrary loans.

The library subscribes to a number of New Zealand and overseas journals on heavy engineeringtopics, and articles from these journals can be copied on request. Additionally, the library downloadsand archives all technical papers from the International Institute of Welding, and has back issues going back several years.Although the majority of these are in printed form, those from2003 onward have been written to CD-ROM, and older papers are gradually being transferred to this format as time permits.

Last year, the HERA Library loaned a total of 610 books and 757 standards to members,arranged 200 interlibrary loans, and purchased 50 new books and 89 new standards. We alsoagreed to house the collectionof the Australasian CorrosionAssociation (ACA), a set of books and papers on a wide varietyof aspects of corrosion andprotection, which is also availableto HERA members on request.

Requests can be made using mail, telephone, fax or email, andmaterial borrowed will be sent bymail or can be picked up at theborrower’s choice. IIW papers, journal articles and miscellaneous documents may also be scannedand sent as PDF fi les by e-mail.

Publications

In addition to its own technical publications, HERA is able to offer a selection of publicationsfrom the Australian Steel Institute (ASI) and the Welding Technology Institute of Australia (WTIA) from stock. Publications and Standards from other organizations inNew Zealand and overseas canbe obtained upon request.

Instructor and student modules for the NZ Modular Training Scheme for the Joining of Metals, developed by the New Zealand Welding Centre, are available fromthe HERA Information Centre.

Reports published this year including those published in conjunction with SCNZ:

R4-131Design of Composite Steel Floor Systems for Severe Fires

R4-134Semi-Rigid Joints for Moment-resisting Steel Framed Seismic Resisting Systems

R4-133New Zealand Steelwork Corrosion Coatings Guide

R4-136Smarter, Faster Steel Construction Seminar

R4-139Steel Structures Seminar: Earthquake, Wind and Fire

Sally GeardLibrarian

INFORMATION CENTRE

Pauline HaywardPublications Offi cer

Steel pedestrian bridge, Auckland City Hospital Structural steelwork for Tainui bridge, Waikato

Annual Report 2006

INSPECTION & QUALITY CONTROL CENTRE

The HERA Inspection and Quality Control Centre (I & QC Centre)support businesses in their training,inspection and quality controlrequirements. Successful business support has been accomplished through planning programmesfor the HERA Training Centre and providing specialised trainingthat falls under the scope of the I & QC Centre. Attendances of I & QC Centre training courses were excellent with 82 attendees registered during the fi nancial year. New seminars held wereon Inspection of Elevating Work Platforms and Welding Defects.

Support has been offered in aconsultation capacity embracingfabrication, welding problems, quality control, inspection,non-destructive testing and preparing inspection and quality control procedures. This support has included assisting aircraft maintenance companiesdevelop reliable inspectionprocedures plus a number of additional consulting projects.

The I & QC Centre has provided signifi cant input into the standardscommittees for a range of standards and will continue to represent the interests of the metals industry in welding, qualitycontrol and inspection disciplines.It contributed to the HERA effortto grow both WTIA accreditation as an IIW authorised training provider, and NZQA accreditationas an approved training provider.

Peter HaywardInspection and Quality Control Manager

The outlook for the I & QC Centre is positive and will continue its services to meet industry andbusiness needs. In the coming year a panel will be formed torepresent the industry expectationsand participation in particular the fi elds of expertise in which the I & QC Centre operates. Theimplementation of a management business plan and policy for the I& QC Centre will be prepared andput to the panel for agreement.

Cherry picker used in training for Elevated Work Platform Inspection Course

Crack in dressed area of root not found using visual inspection Crack in plate using magnetic particle inspection

Crack in plate using ultrasonic inspection

Crack in plate using radiographic inspection

Annual Report 2006

article on the use of stainlesssteel was published in the“Progressive Building” magazine.While in Wellington, a case study on the Michael Fowler Buildingrenovations was conducted.

Other seminars NZSSDA wereinvolved with included:

• Dr Damien Kotecki (presidentof the American Welding Society) - “What not to do inStainless Welding”, “StainlessSteel in the Infrastructure inthe USA”, and “Trends andDevelopments in the AWS”.

• Mr Les Boulton – “Stainless Steel Fabrication in the Water Industry”

The NZSSDA also reviewedmembership classes, fees structure, and member benefi ts.Preliminary discussions took place with a group of Wellington-based businesses with a viewto setting up a local committee to assist us in delivering better value to the area. Many thanks tothe attendees for giving valuabletime and ideas. The intent wasfor members of the executivecommittee to represent all sectors of our industry, from suppliers, fabricators, to manufacturers, etc.In recent years, however, there hasbeen a noticeable reduction in the involvement from fabricators on the committee. This is a worrying trend as ultimately our activities benefi t fabricators and our future direction needs input from them. We will only get out what we invest, and an investment of time and opinions is a great start.

HERA provides secretariat servicesto various metals industry sub-sector groups.

New Zealand Stainless Steel Development Association (NZSSDA)

The following is adapted from the NZSSDA Chairman’s report byRussell Thorburn:

During the 2005-6 year, the NZSSDA’s activities focused on providing seminars and workshops to fabricators / key specifi ers, and worked towards the resultsrequested during last year’s members survey. The highlight of the year was without doubt thearchitectural workshops conductedin Auckland, Wellington, and Christchurch. These workshops were presented by Ms Catherine Houska (TMR Consulting / Nickel Institute – USA) and MrLes Boulton (Les Boulton & Associates / Nickel Institute - NZ).

Ms Houska is a recognised expertin the use of stainless steel within the architectural / constructionsector. The NZSSDA was ableto obtain one of the highest points accreditations from the NZ Institute of Architects towardstheir members’ Continuing Professional Developmentprogram. 112 architects attended these full-day workshops, withover 1300 publications and CDs being distributed. As a result of the Auckland workshop, an

National Association Steel-framed Housing (NASH)

NASH is an association of organisations working on thecommercialisation of technology developed for the use of steelframing particularly in residentialapplications. HERA hosts the manager of NASH at HERA House,and provides full support services.

The members of NASH have been active in the market with anumber of promotional activities as well as getting the groundwork in place with a number of technical and training initiatives. This year saw the launch of NASH 3405, a non-specifi c Design and Construction Guide for steel framed buildings. This iseffectively the steel equivalent to NZS 3604, a common document in wide use in New Zealand as a code of practice in building, and is available from NASH.

The market for steel framing for housing continues to look veryattractive. The industry is in a good position to capitalise on theopportunities with the supportof organisations such as New Zealand Steel and HERA.

Russell ThorburnNZSSDA Chairman

SECRETARIAT SERVICES

Cameron BennettNASH Manager

Stainless steel air diffusers in Britomart transport hub in downtown Auckland Light steel frame housing display at HERA House

Annual Report 2006

STATEMENT OF FINANCIAL PERFORMANCE FOR YEAR ENDED 30 JUNE 2006

FINANCIAL STATEMENTS

Kam Subramani Accounts Offi cer

Note 2006 2005INCOME $ $Levies (Steel & Welding Consum.) 811,684 872,616811,684 Backdated Welding Levies 13 176,812 –176,812 Government Research Contracts (GRC) 2 857,733 857,733857,733 GRC-Deferred Income 433,648 –433,648 Consultancy 227,032 199,878227,032 Member Subscriptions 155,122 150,082155,122 Interest 24,845 22,50424,845 Other Income 56,037 82,11756,037 Publications 34,369 40,14134,369 Welding Modules 66,675 69,42366,675 Rent 43,804 44,08443,804 Metals Conference – 230,636– Seminars & Courses 123,868 114,764123,868 HERA Trust Projects 3 96,501 47,29296,501 SCNZ 14 138,033 665,657138,033 3,246,166 3,396,927Less GRC Income Deferred 2 499,486 433,648499,486 Less Consulting Income Deferred 13 – 8,000– Less Welding Levies Deferred 2 176,812 –176,812 TOTAL INCOME 2,569,868 2,955,279

EXPENDITURE 14 Staff Expenses 1,131,362 1,356,9891,131,362 Member Services 4 151,109 173,120151,109 Offi ce & Other Expenses 182,823 186,989182,823 Seminar Expenses 35,170 43,83935,170 Consulting Expenses 15,197 14,49115,197 Metals Conference – 188,513– External Research 676,750 647,276676,750 HERA House Costs 3 82,069 81,70482,069 Rent 174,220 174,220174,220 2,448,700 2,867,141Depreciation 109,601 98,857109,601 TOTAL EXPENDITURE 2,558,301 2,965,998

NET (DEFICIT) SURPLUS FOR THE YEAR 11,567 (10,719)

Equity Funds at Beginning of Year 395,754 406,473395,754

EQUITY FUNDS FOR END OF YEAR 407,321 395,754

BALANCE SHEET AS AT 30 JUNE 2005 Note 2006 2005 $ $Accumulated Funds - HERA 407,321 395,754407,321 Accumulated Funds - SCNZ 10 341,554 278,877341,554 TOTAL 748,874 674,631

REPRESENTED BY

Current Assets Bank - Current Account 12 171,023 95,570171,023 Bank - SCNZ 71,987 174,53471,987 Bank - CSA 26,038 130,64826,038 Short Term Deposits 215,664 122,242215,664 Accounts Receivable - HERA 135,104 123,516135,104 Accounts Receivable - SCNZ 11 97,911 86,68397,911 Publications for Sale 12,271 7,12912,271 Accrued Income 72,579 70,44272,579 GST Receivable – 2,481– Prepaid 19,063 25,93819,063

TOTAL CURRENT ASSETS 821,550 839,183

Investments 6 550,012 214,630

Fixed Assets 5 312,559 281,805

TOTAL ASSETS 1,684,121 1,335,618

Current Liabilities-HERAGST Payable 17,204 –17,204 Accounts Payable 215,808 193,093215,808 Holiday Pay Provision 25,652 26,24625,652 Backdated Welding Levies 13 176,812 –176,812 Received in Advance CSA 2 499,486 433,648499,486 Received in Advance Other 285 8,000285 935,247 660,987935,247

TOTAL LIABILITIES 935,247 660,987

NET ASSETS 748,874 674,631

This information has been extracted from the Audited Accounts on which an unqualifi ed audit opinion has beenexpressed. The set of audited accounts is available on request from HERA.

Annual Report 2006

TO THE FINANCIAL STATEMENTS

5. Fixed Assets2006 COST ACCUM. NET BOOK VALUE DEPRECIATION 2006

Metallurgy Equipment 12,430 12,430 –Offi ce Furniture 25,510 17,935 7,575Fixtures & Fittings 82,955 34,269 48,686HERA House Refurbishment 69,015 3,451 65,564Motor Vehicles 145,291 72,897 72,394Offi ce Equipment 237,914 167,796 70,118Training Equipment 78,884 30,661g 48,223

651,999 339,439 312,560

2005 COST ACCUM. NET BOOK VALUE DEPRECIATION 2005

Metallurgy Equipment 12,430 12,430 –Offi ce Furniture 25,510 15,068 10,442Fixtures & Fittings 68,370 27,352 41,018Motor Vehicles 145,291 36,572 108,718Offi ce Equipment 230,249 140,967 89,282Training Equipment 51,631 19,286g 32,345

533,481 251,676 281,805

The fi xed assets totalling $33,995 in Net Book Value will be transferred to SCNZon 01 July 2006.

6. Investments 2006 2005

National Bank TB 242,913 214,630242,913 BNZ Term deposits 307,099 –307,099

550,012 214,630

9. Operating Lease Commitment A lease agreement was entered into on 20 December 2005 for a photocopier.

The commitments are as follows:

2006 2005Current $11,436 $8,046$11,436 Non Current $28,590 $ 0$28,590

Total payable for the lease contract $40,021 $8,046

10. HERA Administration of SCNZ HERA held funds in trust for Steel Construction Industry New Zealand (SCNZ).

The fi nancial affairs of SCNZ are as follows:

Please note: the following is not necessarily in numerical order.

1. Statement of Accounting Policies

(a) General Accounting Policies

The Heavy Engineering Research Association (HERA) follows Generally Accepted Accounting Principles (GAAP) recognised as appropriate for the measurement and reporting of earnings and fi nancial position on historical cost basis. Accrual accounting is used to match expenses and revenues. Reliance is placed on the fact that HERA is a going concern.

HERA is an Incorporated Society and these fi nancial statements have been prepared in accordance with the Incorporated Societies Act 1908.

(b) Particular Accounting Policies

The particular accounting policies, which materially affect the measurement of fi nancial performance and the fi nancial position, are:

The Association is exempt from income taxation and therefore there is no income tax liability.

All transactions are recorded exclusive of Goods and Services Tax.

Fixed assets are valued at cost less depreciation. Depreciation has been calculated on all fi xed assets using the straight-line method at rates varying between 10% - 40% based on cost.

Books held as inventory are valued at the lower of cost or net realisable value on a FIFO basis after due allowance for damaged or obsolete books.

HERA is a qualifying entity under the New Zealand Society of Accountants Differential Reporting Framework.

The Association qualifi es under the size criteria. The Association has not taken advantage of the differential exemptions available to it in respect of FRS 19 – Accounting for GST. Except for this, the association has taken advantage of all other exemptions available to it under the differential reporting framework.

(c) Changes in Accounting Policies

There have been no changes in accounting policies. Accounting policies have been applied on a basis consistent with previous years. Emphasis has been placed on the independent reporting of Steel Construction New Zealand’s (SCNZ) fi nancial activities (see Note 10).

2. Revenue in Advance Majority of Revenue in Advancerepresents income in advance from various agencies includingthe Government, which funds the Association for research and services.

The Funding received for programmes (projects) that werecompleted during the year is recognised as revenue in that year.

The part of the Funding that relatesto incomplete parts of projectsat year-end is deferred to thenext period. This is stated under “Revenue Received in Advance” in the Statement of Financial Position. The main project concerned withfunding from FRST is the CompositeStructural Assembly (CSA) project which started late due to staff resource constraints however also refl ects a funding issue, where FRST pays equal amounts every year over the total period, while expenditure varies due to changing projects tasks, resulting in a large portion of funding being deferred to next year. Additionally the backdated welding levy received has been treated as income deferred.

3. Related Party Heavy Engineering Educational and

Research Foundation (HEERF) is a related party to the Association.It is related by the administrative and management expertise the Association provides to the Foundation, in the form of grantsprovided to the association for the research projects it undertakes. It is also the Association’s landlord, owing HERA House.

In 2006, only the portion of HEERF Grant paid to HERA is included in the fi nancial statements. In addition, HEERF has made a grant of $9,000to SCNZ.

4. Audit Fees Audit fees have been included in

offi ce and other expenses to thevalue of $4,700 (2005:$4,700). There was no other remuneration paid tothe Auditors.

7. Capital and OtherCommitments

As at 30 June 2006 there were nooutstanding capital commitments.(2005: $nil)

8. Contingent Liabilities At 30 June 2006 there were no

outstanding contingent liabilities. (2005: nil)

11. Accounts Receivable SCNZ The amount owing to SCNZ may

vary subject to foreign exchange fl uctuations and bank charges.

12.BNZ Bank Account The Association has a Visa credit

card facility with BNZ. The limit on allcards is $26,000. (2005:$20,000)

14. SCNZ Salary From October 05 SCNZ salary were

paid directly from SCNZ bank.

13. Welding Consumable Levy The Association has been advised in June 2005 by NZ Customs Service that the new levy rate set in March 2003 of 5 cents per kg of welding consumables has not been applied for imported welding consumable. Therefore only the old rate of 2 cents per kg was collected.

As advised by the NZ Customs service, the total backdated consumables levy amount owed to HERA was $214,398.69. In the 05/06 year $176,812.00 havebeen received and it is expected that the remaining amount owed will be paid back largely in the 06/07 fi nancial years depending on the arrangement made between the importers and the Customs. HERA has agreed with the weldingsupply companies that the backdated welding levy will be exclusively for welding industry purpose and only following consultation with the NZ Welding Centrepanel and welding supply industry. Therefore the backdated welding levy hasbeen treated as income received in advance.

INCOME 2006 2005SCNZ Levy Income 548,007 485,516548,007 HEERF Grant 9,000 48,0009,000 Seminar, Publications, Others 87,415 47,0087,415 Total Income 644,422 580,518

EXPENDITURE Staff & Vehicle Expenses* 401,195 336,833401,195 HERA Offi ce Overhead 30,000 30,00030,000 HERA Research & Consulting 32,355 70,97532,355 Printing, Advertising, Catering & Others 118,195 237,645118,195 Total Expenditure 581,745 675,453

Defi cit / (Surplus) to Accumulated Funds 62,677 (94,935)62,677

Accumulated Funds (opening) 278,877 373,812278,877 Plus Defi cit / (Surplus) for the year 62,677 (94,935)62,677

Accumulated Funds (Closing) $341,544 $278,877

*Staff Expenses includes salaries, salaries on-cost & professional memberships.

Audit Statement The accounts as published are extracted from the fi nancial statements auditedby CST Nexia, Chartered Accountants, an unqualifi ed audit opinion expressedat 25 August 2006. A full set of the audited fi nancial statements is available from HERA on request.

Annual Report 2006

Income & Expenditure for year ended 30 June 06

2006 2005INCOME $ $

Rent 174,220 174,220174,220 Interest 13,185 9,55013,185 CSA Refund 11,083 -11,083

Total Income 198,489 183,770

EXPENDITUREBuildingManagement Fee 6,000 6,0006,000 Trust Admin. Fee 10,000 12,79710,000 Honoraria 3,000 3,0003,000 BuildingMaintenance 1,184 5,3741,184 Grants to HERA/SCNZ 96,911 82,20496,911 Bank Charges 121 25121 Audit Fees 1,200 1,2001,200

118,419 110,600Depreciation 35,031 32,70335,031

Total Expenditure 153,447 143,303

NET SURPLUS (Defi cit) 45,042 40,467

Balance Sheet as at 30 June 2006

Note 2006 2005 $ $

ACCUMULATED FUNDS Equity funds at start of year 1,611,535 1,571,0681,611,535 Net surplus for the year 45,042 40,46845,042 Equity funds at end of year 1,656,577 1,611,535

REPRESENTED BY Current Assets Bank 35,195 26,51035,195 Call Account 110,710 76,341110,710 Term Deposit 133,818 125,469133,818 GST Receivable 924 –924

280,647 228,320

Total Fixed Assets 1,377,280 1,389,787

TOTAL ASSETS 4 1,657,927 1,618,107

Current Liabilities Accounts Payable 1,350 4,9841,350 GST – 1,624–

TOTAL LIABILITIES 1,350 6,575

NET ASSETS 1,656,577 1,611,535

HEAVY ENGINEERING EDUCATIONAL & RESEARCH FOUNDATION

In line with its objectives, the Foundation funded a number of projects related to the metals engineering industry,including student support for research projects.

STATEMENT OF FINANCIAL PERFORMANCE FOR YEAR ENDED 30 JUNE 2006

HEERF Chairman’s Report

The Heavy Engineering Educational & Research

Foundation (HEERF) has again contributed signifi cantly to

HERA’s research and industry development efforts through

the support of engineering students, visiting experts and

promoted careers in metal fabrication. This year the

Foundation also supported in conjunction with other industry

sponsorships the establishment of research facilities in metal

forming at the Auckland University of Technology.

An exciting research and visiting scholar programme has already

been outlined to the Trustees for the 2006/2007-year and we are looking forward to ongoing top class research supporting the

future of our New Zealand metals engineering industry. Additionally

the Foundation is considering proposed extension option to HERA House in order to cater

for offi ce space demands of metals industry sector groups.

DRK Smith, Chairman

HEERF prize was given to the project judged best fi nal year project involving metals, entitled “Reducing the Detrimental Impact of Visual Spoke Shrinkage at Ion Automotive”.

Keith SmithHEERF Chairman

1. Statement of Accounting Policies

(a) General Accounting Policies

Heavy Engineering Educational and Research Foundation (the Foundation) is a charitable trust established under the CharitableTrusts Act 1957. These fi nancialstatements have been prepared in accordance with the Act.

The Foundation follows GenerallyAccepted Accounting Principles (GAAP) recognised as appropriatefor the measurement and reporting of earnings and fi nancial positionon historical cost basis. Accrual accounting is used to match expenses and revenues.

(b) Particular Accounting Policies

The particular accounting policies, which materially affect the measurement of fi nancial performance and the fi nancial position, are:

Income Tax

The Foundation has a charitablestatus from the Inland RevenueDepartment, hence is exempt fromincome tax.

Goods and Services Tax

All transactions are recorded exclusive of Goods and Services Tax (GST) except for receivables and payables that are stated inclusive of GST.

Fixed Assets

Fixed assets have been shown at cost less depreciation. Buildings are depreciated using the straight-linemethod at 1% of the cost price, AirConditioning Unit at 6% and Roof & Cladding at 10%.

Differential Reporting

The Foundation is a qualifying entityunder the New Zealand Society of Accountants Differential Reporting Framework.

The entity qualifi es under the sizecriteria, and because it is not publiclyaccountable.

The Foundation has not takenadvantage of the differential reporting exemptions available to itin respect of FRS-19: Accounting forGoods and Services Tax.

(c) Changes in Accounting Policies

There have been no changes inaccounting policies. Accounting policies have been applied on a basis consistent with previous years.

2. Capital Commitments & Contingent Liabilities There are no capital commitmentsor contingent liabilities as at 30 June2006. (2005: nil)

There were no capital commitmentsas at 30 June 2006. (2005: Nil)

3. Related Parties The Foundation is related to New Zealand Heavy Engineering Research Association (HERA). Members of the Foundation are alsomembers of HERA.

HERA is the tenant of the land andbuilding owned by the Foundation and pays rent.

The Foundation pays fees toHERA for the management and administration of the building.

K Smith is the Chairperson of HEERF. He is the Principal of DRK Smith & Associates, which providedprofessional services of $3,000(2005: $3,000) to HEERF during the year. All transactions are approvedby the Board and at arms length.

4. Fixed AssetsCOST ACCUM. BOOK VALUE

$ DEPRECIATION $Land 244,602 - 244,602Land Development 24,489 24,489Building Upgrade 151,019 28,286 122,733Air Condition Unit 157,300 19,470 137,830Building 1,049,090 201.464 847,626

$1,626,500 249,220 1,377,280

The latest available government valuation dated 1 September 2005 of theproperty is $2,900,000 (Capital value)

The valuation for insurance purposes from Somerville Valuator Ltd dated 12 July2005 valued the property at $3,080,000.

Audit Statement The accounts as published are extracted from the fi nancial statements audited by CST Nexia, Chartered Accountants, an unqualifi ed audit opinion as expressed at 25 August 2005. A full set of the audited fi nancial statements is available from HERA on request.

Annual Report 2006

AS AT 30 JUNE 2006

Gulf Design LtdH J Asmuss & Co LtdIndependent Oilfi eld Inspection Services LimitedISSA EngineeringJuken New Zealand Ltd (Wairarapa)Land Transport New ZealandLes Boulton & Associates LtdLincoln Electric Co (NZ) LtdMachinery Services LtdManukau Institute of TechnologyMarten Spars LimitedMason Engineers (NZ) LtdMaterials & Testing LaboratoriesMobridge LtdModern Maintenance Products LtdNew Zealand Industrial Abseilers LtdNew Zealand Steel LtdNorth Shore City CouncilNorthTecNZ Army c/o Art GENZ Fasteners Stainless LtdNZ Welding SchoolOnesteel NZ LimitedOpen Polytechnic of New ZealandPacifi c SteelPalmerston North City CouncilPiletech NZ LtdPipes (NZ) LimitedPOBA International No 6024PPTProgressive Engineering Co LtdResene Paints LimitedRudolphs

A & G PriceA W Trinder LtdAcme Engineering LtdActive Transport Engineers LtdActive Welding LimitedAllied Industrial Engineering LtdAmtec Engineering LtdAtco Steel Developments LtdAuckland Steel 2000 LtdB W Murdoch LtdBas ManufacturingBDC EngineeringBLM Engineering Co LtdC & R Equipment LtdCBC 2000 LtdChapman Engineering LtdContract Engineering LimitedCSP Pacifi cD & H Steel Construction LimitedDepartment of ConservationDispatch and Garlick LtdDonovan Group NZ LtdElectric Furnace Company LtdElite InnovationsEnergyworks LtdEquipment Engineering LtdET EngineeringFarra Engineering LimitedFitzroy Engineering Group LtdGary Douglas Engineers LtdGisborne Engineering LtdGray Bros EngineeringGrayson Engineering Ltd

Hamilton Perry-DexionHSM Engineering LtdIntergrated Maintenance Group LimitedIntermech LtdJ & R Slecht LimitedJ Two E Weld LtdJensen Steel Fabricators LtdJohn Jones Steel LtdKawerau Engineering LtdLyttelton Engineering LtdM J H Engineering LtdMainarc Engineering Services LtdManukau Welders (1982) LtdMartin EngineeringMcGrath Industries LimitedMcKenzie & Ridley (Kawerau) LtdMercer Stainless LtdMMB Engineering LtdMorgan SteelMulligan Engineering Co LtdOtahuhu Welding LtdP J Hindin EngineeringPage & Macrae Engineering LtdPakuranga Engineering LtdPapakura Engineering Co LtdPatton Engineering LtdPegasus Engineering LtdPFS Engineering LtdPrice McLaren LtdProduction SolutionsPryda ReidR C R Easteel Industries LtdRACT Engineering

Red Steel LimitedRNZN Fleet Repair GroupRoadrunner Manufacturing (NZ) LtdRobert Page Engineering LtdRobt Stone & Co LtdSpeedwall (NZ) LtdSteel Fabrication LtdSteltech Structural LimitedStorage Handling LimitedStorey Engineering LtdTandarra Engineering LtdTanker Engineering Specialists LtdTaymac LimitedTDC Sawmills LtdTenix Shipbuilding New Zealand LtdTitan Marine EngineeringToledo Construction 2004 LtdToll NZ Consolidated LtdTrack Industries LtdTranzweldTurnco Engineering LimitedUnited Engineering Services LtdUniversal Engineering LtdW Stevenson & Sons LtdWaikato Steel Fabricators LtdWeatherford New ZealandWelding & Engineering Services LtdWeldrite Marine Fabrication LtdWelds Engineering LtdWeldtrade Engineering LtdWellman Associates LtdWFM LimitedWilkinson Transport Engineers

Ordinary Members – Fabricators

Ordinary Members – Product Suppliers, Service Providers and Others4D Steel DetailingAdvance Boiler Services NZ LtdAir Liquide New Zealand LtdAkzo Nobel Coatings LtdAlpha Engineering Co LtdAlpha Training & Development CentreLtdAltex Coatings LtdAquaheat Industries LtdAuckland City EnvironmentsAuckland University of TechnologyBallance Agri-Nutrients (Kapuni) LtdBDS Steel DetailersBOC Gases New Zealand LtdBureau Veritas (NZ) LtdBurleigh Engineering LtdCadPro Systems LtdChristchurch Polytechnic Institute of TechnologyCombustion Control LtdContact Energy: Power StationCorus New Zealand LtdCrow Refractory LtdCSP GalvanisingCuddon LtdD C Weld LtdDelta Expertise IncDigital Insight LtdDigitalweldDimondDulux Protectitve CoatingsEngineering Safety DOLForman Building Systems LtdForman Insulation Limited

Sabre Engineering LtdSandvik New Zealand LtdSGS M&I LtdSmorgon Steel Recycling NZ LtdSmorgon Steel Tube MillsSouth Pacifi c IndustrialSouthern Institute of TechnologySouthern Quality Assurance LtdSpeedfl oor NZSteel & Tube StainlessSteel Detailing Services LtdSteel Drafting LtdSteel Pencil LimitedSteeltech ServicesSupreme Steel Products LtdSurvey NZ LtdTank Test Laboratories LtdTOFT Inspection Services LtdTraydec (NZ) LtdUCOLUnitec Applied Technology InstituteUniversity of AucklandVector LimitedVictoria University of WellingtonVT Fitzroy LimitedW J Cadzow & AssociatesWaikato Institute of TechnologyWalker Group LtdWattyl (NZ) LtdWeldwell New ZealandWellington Institute of TechnologyWestern Institute of Technology atTaranakiX-Ray Laboratories Ltd

Annual Report 2006

Ordinary Members – Engineering Consultants Abacus Engineering Ltd

Abuild Consulting Engineers

AC Consulting Group Ltd

Airey Consultants Ltd

Alan Reay Consultants Ltd

Allan Estcourt Ltd

Antro Enterprise Limited

Apex Consultants

APR Consultants

Arnold & Johnstone Ltd

Babbage Consultants Ltd

Base Consulting Engineers Ltd

Beca Carter Infrastructure Ltd

Belcher Industries Ltd

BHC Consulting

Bloxam Burnett & Olliver Ltd

Blueprint Consulting Limited

Brian Carter Consulting Engineer Ltd

Brian Jones Engineering Ltd

Brian Wilson Consulting Engineer

Broadcast Communications Ltd

Brown & Thomson

Bruce Wallace Partners Ltd

Bruce White Consulting

BSK Consulting Engineers Ltd

Buchanan & Fletcher Ltd

Bucher-Alimentech Ltd

Buller George Engineers Ltd

Bycroft Petherick Ltd

C L C Consulting Group Ltd

Cameron Gibson & Wells Ltd

CDT Consultants Limited

Chambers Consultants Ltd

Chapman Oulsnam Speirs Limited

Chapman Sanders Consultants

Charles Consulting

Chester Consultants Ltd

CHP Wellington Ltd

Chris W Howell & Associates Ltd

City Solutions

Civil Engineering Tokoroa

Clearwater Construction

Clendon Burns & Park Ltd

Compusoft Engineering

Connell Wagner Ltd

Creative Design & Draughting

Dainty Alderton & Associates

Davidson Partners Ltd

Davis Ogilvie & Partners Ltd

Day Consultants

Derek Booth Consultancy Ltd

Design Engineering (SI) Ltd

Dezign Works (HB) Ltd

Dick Joyce Consultants Ltd

Dobbie Engineers Ltd

Dodd Civil Consultants

Don Thomson Consulting Engineers

Duffi ll Watts & King Ltd

Dunning Moore & Associates

Dunning Thornton Consultants Ltd

E Cubed Engineering Ltd

Emc²

EMPA Group Consultants Limited

Engineered Cold Systems Ltd

Engineering Design Consultants Limited

ETS Engineers Ltd

Fairclough and King Consultants Ltd

Fairley Engineering Ltd

Fletcher Construction - Engineering

Flo-Dry Engineering Ltd

Forbes Consultants

Fraser Thomas Limited

Frederick R Smith

Fulghum Limited

Garry Newton Ltd

GHD Ltd

Grant D Crook

Hadley & Robinson Ltd

Hanlon & Partners Ltd

Harding Consulting Engineers Ltd

Harrison Grierson Consultants Limited

Hawthorn Geddes Architects & Engineers Ltd

Hill Design Engineering Ltd

HLK Jacob

Holmes Fire & Safety

Hugh Barnes Consultants Ltd

Independent Technology Ltd

J H Little & Associates

JAWA Structures Ltd

JNG Engineers Ltd

John Snook Ltd

Jones Gray Partners Ltd

Joyce Consultants Ltd

Kerry Dalzell & Associates Limited

Kerslake & Partners

Kevin O’Connor & Associates Ltd

Knowles Consulting

Lapish Enterprises

Lewis & Barrow Ltd

Lewis & Williamson

Lewis Bradford & Associates Ltd

Lyall Green Consultants Ltd

M A Corkery & Associates Ltd

Macdonald Barnett Partners Ltd

Mainzeal Property & Construction Ltd

Marino Consultants & Associates

Markplan Consulting Ltd

Martin Meyers Structural Engineer

Massey Design Ltd

Materials Engineering Services Ltd

Matrix Applied Computing Ltd

Maunsell Ltd

Mechanical Technology Ltd

Metal Test Ltd

MH Design Ltd

Mighty River Power Limited

Milward Finlay Lobb Ltd

Mitchell Vranjes Consulting Engineers

Mobil Oil New Zealand Limited

MSC Consulting Group Ltd

MTEC Consultants Ltd

Murray Jacobs Ltd

MWH New Zealand Ltd

Nagel Consultants Ltd

Nancekivell Cairn Ltd

Novare Design Ltd

OCEL Consultants NZ Ltd

O’Loughlin Taylor Spence Ltd

Opus International Consultants Ltd

OSA Silvester Clark Ltd

Paul Gellatly Consulting Engineer

PB Power

Peter Radley Consultants Ltd

Peter Walker Consultants Ltd

Peters and Cheung Ltd

PFP Systems (NZ) Ltd

Plant & Platform Consultants Ltd

Plumb Ltd

Port of Tauranga Limited

Powell Fenwick Consultants Ltd

Protocold Services Ltd

Q Designz Limited

R B Knowles & Associates Ltd

R D Sullivan

R J Nelligan & Associates Ltd

R W & V Roberts Consultancy

Ralph Gillard Consulting Co Ltd

Randall & Associates

Redco NZ Ltd

Richardson Stevens Consultants (1996)Ltd

Robin Frengley Consulting Engineer

Romulus Consulting Group Ltd

RPH Consulting Limited

Ruamoko Solutions Ltd

Sawrey Consulting Engineers Ltd

Sigma Consultants Ltd

Sinclair Knight Merz Ltd

Spencer Holmes Ltd

Stephen R Mitchell Consulting

Stiffe Hooker Ltd

Stiles & Hooker Ltd

Structex Limited

Structure Smith Ltd

Structurfl ex Limited

Thorburn Consultants NZ Ltd

Thorne Dwyer Structures

Tonkin & Taylor Ltd

Tony Tay & Associates Ltd

Transfi eld Worley Ltd

Transport Design & Certifi cation

Transport Technology Ltd

Transtech Dynamics Ltd

Truebridge Callender Beach

TSE Group Ltd

Tse Taranaki & Associates Limited

TSV Consultants Ltd

Tyndall & Hanham Ltd

URS New Zealand Ltd

Verstoep & Taylor Ltd

W Stringer Consulting

Waikato Engineering Design Ltd

Waitakere City Council

Weber Consulting

WH NF Johnston Ltd

William George Cassidy

Zigliani Engineering Limited

Annual Report 2006

A & S Engineering Ltd

ABB Power Ltd

Accurate Engineering Limited

Advanced Training Academy

Aimecs Ltd

Airwork (NZ) Ltd

All Steel Services Ltd

Alloy Yachts International Limited

ALRO Truck Smash Repairs

Alstom Northern Wagons

ANDAR-ADM Group Ltd

APV New Zealand Ltd

ATCO Controls Ltd

ATI Engineering Ltd

Awesome Awnings Ltd

Axiam Engineering Limited

Bailey Engineering Ltd

Baker Cranes Ltd

Bay of Plenty Polytechnic

Bedford Engineering Ltd

Best Bars Ltd

Bill Baillie Engineering Ltd

Bitumen Equipment Ltd

Bradken Dunedin

Bridgeway Steel Ltd

Brightwater Engineers Ltd

Bromley Steel

C J Saunders Engineering Ltd

Calder Stewart Steel

Cambridge Welding Service (1953) Ltd

Cameron Bros Engineering Co Ltd

Campbell Tube Products Ltd

Canco

Canco Engineering Ltd

CCL Barber Ltd

Century Resources Ltd

CFM Engineering Ltd

Clough Agriculture Ltd

Colgate-Palmolive Ltd

Consolidated Engineering Company Ltd

Contract Connections Ltd

Contra-Shear Separation TechnologiesLtd

Courtney Engineering

Croucher & Crowder Engineering Co Ltd

Culham Engineering Co

D A Ireland (1990) Ltd

D R Howells Engineering Co Ltd

Dan Cosgrove Ltd

Dave Smith Structural Steel

Dawn Group Ltd

Domett Trailers

DSK Engineering Ltd

Eastbridge Ltd

Eastern Institute of Technology

Ede Engineering

Enterprize Steel

Eric Paton Ltd

Etech Industries NZ Ltd

Fairbrother Industries Ltd

Fairfax Industries Ltd

Farmex Hawkes Bay Ltd

Fisher & Payel Production Machinery Ltd

Flotech Limited

Fruehauf Trailers

Fuelquip Services Ltd

G T Liddell Contracting Ltd

Gamman Industrial Componentry Ltd

General Engineering North Shore

George Grant Engineering

Gillies Foundry

Gisborne Development Incorporated

Gray Construction

Hayes International

Hino Distributors (NZ) Ltd

Howick Engineering Ltd

Iain Codling Stainless Steel

Ipsco Ltd

Irwin Industrial Tool Company Ltd

J & D McLennan Ltd

J J Niven Engineering Ltd

J P Marshall & Co Ltd

Jay Cee Welding Ltd

Jetweld Engineering

Keith M J Adams

Kernohan Engineering Ltd

Kopu Engineering Ltd

Lakeland Steel Products Ltd

Leighs Construction Ltd

Leonard Products Ltd

Longhare Engineering Ltd

Mace Engineering Ltd

Machine Part Welding Ltd

McCarthy Engineering Ltd

McEwan Engineering

Mecal Ltd

Metso Minerals (Matamata) Ltd

Mike Christie Sheetmetals Ltd

Millers Mechanical (NZ) Ltd

Modern Transport Engineers Ltd

Mooloo Stockcrates Ltd

Morgan O’Shea Engineering

Morrow Equipment Co (NZ)

Mouats Engineering Ltd

MSC Engineering

Mulcahy Engineering Ltd

Mullan and Noy Ltd

Murray Landon

Nalder & Biddle Group Ltd

Napier Engineering & Contracting Ltd

NDA Engineering Group

Necklen Engineering Ltd

Nelson Reliance Eng Co Ltd

Nelson Stud Welding Ltd

Nepean Engineering Ltd

Niemac Industrial Ltd

NZMP Kauri

OTENZ Group

P E C Stainless Steel

Pacifi c Timber Engineering Ltd

Parr & Co Limited

Patchell Industries Ltd

Piako Transport Engineering

Pilcher Engineering Ltd

Pipework Specialties Ltd

Progressive Hydraulics

Pyramid Engineering

R & R Contractors Limited

Reels Stainless

Refrigeration Engineering Co Ltd

Renold New Zealand Ltd

Rex Barnes Engineering

Roadmaster Trailers Ltd

Rocktec Ltd

Royal New Zealand Air Force

SAFE Engineering

Salthouse Boatbuilders Ltd

Sensation Yachts Ltd

Service Engineers Ltd

Sheetmetals (1983) Ltd

Ship Constructors Ltd

Snorkel Elevating Work Platforms

South Fence Machinery Ltd

Southern Cross Engineering Limited

Specialised Container Services

Specialist Energy EngineeringDevelopments

Spirax Sarco Limited

Stafford Engineering Ltd

Stainless Down Under

Stainless Engineering Co Ltd

Sta-Tec Manufacturing

Steel Structures Ltd

Steelbro NZ Ltd

Stevensons Structural Engineers Ltd

Stewart & Cavalier Ltd

Street Marine Ltd

Stud Welding New Zealand Ltd

Tasman Engineering Company

The 4711 Training Centre

Tidd Ross Todd Ltd

Transfl eet Equipment Ltd

Trimtech New Zealand Ltd

Truweld Engineering Kerikeri Ltd

Twig Industries

Ullrich Aluminium Co

Verissimo Engineering Ltd

Wade Engineering Ltd

Waratah NZ Limited

Warner & Mould Construction Ltd

Webbs Industrial Group

Webforge NZ

Weld IT Ltd

Weld Fabrication Engineering Ltd

Weld Tests Hawkes Bay

Wells & Boe Ltd

Wilson Bros Engineering Ltd

Wilson Precast Construction Ltd

Zealsteel Ltd

Affi liate MembersC J Wallis Pty Ltd

EDL Fasteners Limited

Fletcher Easysteel

Steel & Tube Holdings Ltd

TBS Farnsworth Ltd

Vulcan Steel Ltd

Welding Technology Inst of Australia

Reciprocal MembersAmerican Welding Society

Australian Steel Institute

British Constructional Steelwork Association (BCSA)

Canadian Inst of Steel Construction

Competenz

DVS - German Welding Society

NZ Institute of Economic Research

New Zealand Engineering Federation

Power Crane Association of NZ

Steel Construction Institute (UK)

Associate Members

Annual Report 2006

HERA Staff

Standing from left: Brian Low, Rosemary Scofi eld, Nils Aderman, Pauline Hayward, Alastair Fussell, Raed El Sarraf, Nandor Mago, Sally Geard, Roy Kane, Alan McClintok, Holger Heinzel, Kam Subramani, Raewyn Porter, Yadeed Lobo, Xiao Huantian, Dave Wrightson

Sitting from left: Clark Hyland, Charles Clifton, Wolfgang Scholz, Peter Hayward, Michail Karpenko

Attendees of the International Welding Specialist course at HERA House Training is a key HERA function

HERA House. 17-19 Gladding Place,

PO Box 76-134, Manukau City,

New Zealand.

Phone +64 9 262 2885

Fax: +64 9 262 2856

E-mail: info@hera.org.nz

Website: www.hera.org.nz

ISSN 1170-3075