YHA New Zealand 2014 Annual Report

2014 Annual Report

www.yha.co.nz

Aoraki/Mt Cook National Park

CONTENTSContents and About YHA 03

Executive Report 04

Our Hostels 06

Our Markets 07

Our People 08

Our Members 10

Our Environment 12

International 13

Financials 14

Notes to summary financial statements 16

Audit Report 17

Governance Statement 18

Acknowledgements & Directory 19

ABOUT YHA NEW ZEALANDYHA New Zealand is a registered charitable organisation and an incorporated society which has been operating in New Zealand since 1932. It is membership based and part of Hostelling International (HI). Members receive reciprocal benefits internationally in the world’s first and largest budget accommodation network.

To achieve its formal aims and objects, YHA New Zealand’s mission is:

• To deliver services to members which enrich their understanding of others and the environment by providing quality accommodation and travel experiences

In working to achieve its mission, YHA New Zealand is committed to:

• Operating in a sustainable manner; reflected in a triple bottom line commitment

• Developing and maintaining relationships with Māori which recognise their indigenous status in New Zealand

• Living its values of integrity, respect, passion and excellence

YHA’S MISSION IS DELIVERED THROUGH A HOSTEL NETWORK WHICH IS COMPRISED OF ITS OWN AND THIRD PARTY OPERATED (FRANCHISE AND ASSOCIATE) HOSTELS.

YHA New Zealand is a triple bottom line organisation giving equal consideration to the organisation’s social, economic and environmental impact. The Annual Report expresses YHA’s triple bottom line commitment.

Splendorgel is made from elemental chlorine free pulp sourced from well-managed forests and controlled sources.

It is manufactured by an ISO 14001 certified mill.

Printed by Rainbow Print.

Splendorgel is made from elemental chlorine free pulp sourced from well-managed forests and controlled sources. It is manufactured by an ISO 14001 certi�ed mill.Printed by Rainbow Print.



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Financial sustainability remains a key focus for YHA New Zealand. As a result of the strategic decisions made over the last year, and a lot of hard work from our staff, we have achieved an improved financial trading performance of over $500,000 from the previous year.

Occupancy and yield are the two key drivers of our financial success and it is pleasing to record improvements in each of these areas – occupancy grew by 3.5% while yield increased by over 7%. Our occupancy levels continue to significantly outperform those of the sector, clearly indicating that we remain an attractive and affordable option for guests in what is an increasingly price-sensitive market. Our yield gains reflect a more active approach to matching the demand for our beds to our prices, particularly during periods of high demand.

Maintaining our hostels is an increasing focus and our investment increased by over 40% on the previous year to just under $1m. However, we need to increase this level of building maintenance investment if we are to meet guest expectations as well as our own presentation standards.

MarketsWe continue to have more New Zealand groups staying with us which is most satisfying because it helps ensure our hostels are used year round and introduces more New Zealanders to a quality hostel experience.

While New Zealand remains our single largest market, 82% of our guests are international travellers with Germany remaining our largest international market ahead of the UK and Australia. We once again enjoyed hosting more Asian guests. China is now our fourth largest international market, having grown by a further 25% in the past year, while Korea and Malaysia are both in growth.

Our future marketing will focus on attracting and supporting Asian guests whilst continuing to attract guests from our more traditional western markets, which are still very significant.

Network Adjustments and DevelopmentWe continue to realign the structure of our hostel network to achieve a more strategic approach to our limited capital. In the past 12 months we have completed sales of the Whangarei and Tauranga hostels and will maintain future network coverage in these locations through third-party relationships with independent operators. We have also closed YHA Te Aroha and YHA Greymouth, both of which were no longer viable as their size and locations did not match the demands of our guests.

At the same time developments are progressing in:

• Tekapo, with an agreement in place to purchase land in support of a new hostel which is scheduled for completion in the 2016 calendar year

• Christchurch, with the confirmed purchase of an existing business which will be rebranded and reopened as YHA Christchurch in August 2014. This is a significant development, adding a further 121 beds to Christchurch at a time when visitors are struggling to find suitable accommodation. This follows the settlement of our earthquake-related insurance claim at the end of 2013.

MembershipThe benefits of membership are twofold – members staying in our network enjoy a range of benefits including free WiFi, discounted accommodation and discounted travel and activities, while at the same time the organisation benefits through creating loyal customers and increased occupancy.

A recent membership sales promotion has been very successful, increasing membership sales by over 60% whilst maintaining our revenue. This has confirmed that membership is price-sensitive and we have subsequently reviewed the pricing of all membership categories for implementation in the new financial year. Member involvement and participation in the organisation continues to decline and we remain concerned about the relevance and sustainability of our current governance model which requires members to at least be involved in election processes. This will be a focus for the National Board in the coming year.

EXECUTIVE REPORT

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New Strategic PlanThe National Board and senior staff have worked together to develop a new YHA Strategic Plan for the period 2014 to 2019. The intent of this Plan is to ensure the organisation’s resilience in the medium-term and also to be well-positioned for the future, as guest preferences continue to evolve and opportunities to satisfy them arise. The key areas of the Plan include:

I. Continuing to review the hostel network structure to ensure our representation balances the capital commitments of the organisation. We will focus our capital investment in key locations, complemented by relationships with independent operators to meet our coverage requirements.

II. Investing in our existing hostels to maintain our service standards and meet customer expectations.

III. Growing our revenue through a combination of enhanced yield and increased occupancy in the off- season periods, to ensure that we can invest at the desired levels in both our properties and our people.

The Strategic Plan once again emphasises the challenges we face and the way in which we must continue to adapt to operate successfully. We can reflect on our history with pride while recognising that we have moved beyond those early beginnings of simply providing members with cheap accommodation in remote locations. Instead, we must continue to evolve as an organisation firmly entrenched in the tourism sector grappling with a range of commercial and competitive challenges and imperatives (as well as the substantial and ever increasing regulatory compliance) which demand a nimble and commercially savvy approach to operating our business. We do so in a manner that reflects the long-held values of the organisation, particularly our commitment to environmental sustainability and investing in our staff, as this continues to influence guests and staff in their decisions to stay with and work in YHA.

Coral Laughton National Chair

Mark Wells Chief Executive

We can celebrate a solid

trading year in which we

can record positive progress

in the delivery of a range of

strategies to maintain and

improve guest and staff

satisfaction.

–Mark Wells

“

“

In summary, we can celebrate a solid trading year in which we can record positive progress in the delivery of a range of strategies to maintain and improve guest and staff satisfaction levels as well as financial performance. We have mapped out our strategic pathway through to 2019 and we approach our future with optimism and confidence.

While we reflect on our past with the greatest respect, we continue to successfully evolve to secure a positive and long-term future in which YHA remains more than just a bed to its guests and more than just a job to its staff.

Kaituna Falls

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Pictures from left: The common area in YHA Okahune, YHA Okahune owner Jane Gamble and a guest, the YHA Mt Cook Generator being installed, YHA Whangarei owners Alison Tobi and Graham Kenrick outside the hostel, YHA Whangarei four bed multi-share.

OUR HOSTELSThe hostel networkAssociate partners, YHA Whangarei and YHA Ohakune Station Lodge, are welcome additions to the YHA network this year.

YHA Whangarei’s inclusion in the network has ensured continued brand representation in the gateway to the winterless north. YHA Whangarei is a short walk from Whangarei Falls and features a swimming pool and hot tub.

We are also delighted to once again have brand representation in Ohakune, home of winter Mardi Gras and, of course, the big carrot. YHA Ohakune is located a short drive from the town centre and offers a comprehensive range of ski and bike hire options.

Less pleasing was the closure of our YHA-managed hostels YHA Tauranga and YHA Whangarei.

The YHA hostel network now comprises 16 YHA-managed hostels, 27 Associate partner hostels and 2 Franchise hostels bringing the network to a total of 45 hostels.

OccupancyA 4% increase in YHA-managed network occupancy compared with last year demonstrated the continued success of targeted marketing strategies. This included free WiFi for members, a discounted membership promotion and reintroduction of the Easy As bulk bed electronic card.

Top performing regions were Auckland, Wellington, Christchurch, Tekapo and Queenstown.

It is especially pleasing to note that occupancy improvement was not achieved at the expense of bed yield which improved by 7%.

Hostel developmentOur continued commitment to upgrading hostel facilities to meet guests’ needs saw us complete a number of projects:

• Guest laundry upgrade at YHA Queenstown Lakefront – stage 2

• Bathroom upgrade at YHA Auckland International – stages 2 and 3

• Ensuite bathroom upgrade at YHA Queenstown Central

• Television installation in ensuited rooms at YHA Wellington and YHA Franz Josef

• Generator upgrade at YHA Mt Cook

SuccessesOverall guest expectations have been met or exceeded with 93% of our guests this year. To continue this positive outcome we must invest heavily in the maintenance and presentation of our hostels. To this end we have committed to the extensive refurbishment of YHA Auckland City and YHA Queenstown Lakefront commencing in April 2015.

The launch of a new WiFi system in conjunction with Telecom New Zealand across the YHA-managed hostel network enabled us to provide 1 GB of free data per day to members staying overnight. The product has proved very popular with guests and we plan to extend coverage to as many Associate partners as possible prior to the 2014 summer season.

The YHA hostel network now comprises

16 YHA-managed hostels, 27 Associate

partner hostels and 2 Franchise hostels

with a total of 45 hostels.

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OUR MARKETSThis year has seen a positive rebound from the traditional markets of the UK, USA and some significant growth out of Germany.

Asia remains the leader in terms of new growth. China, Korea and Malaysia show strong gains.

This year YHA attended the YHA China Managers’ Conference in Qingdao and undertook hostel visits across both China and Hong Kong. In 2014/2015 we will also visit hostels in Canada, England and Scotland. These visits are intended to strengthen ties between sister YHA Associations and gain better understanding of customer expectations in key source markets.

New Zealand domestic revenue has had modest growth from independent travellers but solid growth in group business. YHA has invested in shoulder season campaigns to raise awareness of the YHA brand and YHA’s facilities. The growth achieved is pleasing against a general background of domestic guest night decline.

Our website www.yha.co.nz continues to grow with an increase of over 30% in online sales. This is supported by additional sales from targeted third-party websites.

YHA New Zealand and YHA Australia have an increasingly strong relationship with joint commitment to the digital magazine, Backpacker Essentials, group trade sales and regular joint marketing initiatives.

The 2014 -2019 Marketing Strategy has been completed which directs continued focus on developing the emerging Asian market, growing domestic brand awareness, servicing the traditional long haul markets and building a strong digital presence for YHA New Zealand.

Our website www.yha.co.nz continues

to grow with an increase of over 30%

in online sales.

Backpacker Essentials is a membership magazine jointly produced with YHA Australia.

YHA Te Anau

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OUR PEOPLE Staff compositionWe employed a total of 176 people as at 30 June 2014. This is slightly fewer than the 181 people at the same time last year. Full time equivalents also decreased during this time from 122 to 110. We worked a total of 264,117 hours during the year.

Staff turnover decreased from 44% last year to 32% this year. Our staff are 37% male and 63% female, 86% of whom work in hostels. The 24 different nationalities represented reflect the international nature of our business. New Zealanders comprise 50% of staff with the next three nationalities being British (15%), Japanese (5%) and French (4%).

Employee engagementOur 2014 climate survey showed an increase in staff engagement. The ‘person I report to’ section remains our strongest performing area whilst ‘reward and recognition’ continues to be our biggest challenge. We benchmarked against YHA Ltd (Australia) for the second year and the results from each are comparable.

A Staff Summit was held this year. A cross representation of 15 staff volunteered to participate in the day-long workshop in Wellington. The Summit used an Appreciative Inquiry approach to collaboratively design a future for YHA where every staff member feels valued and engaged, creating a positive staff experience. The participants identified six areas to further build employee engagement: learning and development, pay and recognition, communication, leadership, environmental sustainability and technology. As a result an Organisation Development Plan has been created for each area. Our goal is to maintain YHA as the employer of

choice in the backpacker sector.

Long service

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

10 Years Junko Hashimoto, Diane Hancock

5 YearsHaylee Bloor, Paula Brown, Omar Hildid, Tara Murphy, Amanda Holmes, Teresa Stout, Chieko Bullmore, Steven Belfield

Health and well-being

As part of its commitment to staff wellbeing YHA reports the average sick leave days per staff member. Sick leave this year was 2.9 days on average per person, which is considered low.

YHA promotes a culture which supports a safe and healthy accommodation experience for guests as well as a safe and healthy workplace for staff. One health and safety measure is the number of work-related lost time injuries reported for the year. This year there was one such injury, so our formal Lost Time Injury Frequency Rate measure (number of lost time injuries for every million hours worked) is 3.8. This is also considered low.

What is the one thing more than anything else that makes YHA a great place to work?

“

“ YHA looks after our environment and cares about sustainability.

Friendly and happy guests – good conversation, good stories, lots of laughs.

The people... the team at National Office and the hostels are just amazing. I have always been proud of the YHA family.

Pictures left: YHA Queenstown Lakefront reception, Queenstown Hostels

Operations Manager, Sue Fairclough, 2013 Managers’ Conference in Wellington

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Staff snapshot as at 30 June 2014

Location and employment agreement type

Fixed Term/ Casual

Hostels: 97% (59 staff)National Office: 3% (2 staff)Total: 61 staff

Head count and full-time equivalents (FTE)

Permanent staff turnover

Gender breakdown

Number of staff who left during the year


Head count


FTE

Hostels: 82% (90 staff)National Office: 18% (20 staff)Total: 110 FTE

Female: 63% (111 staff) Male: 37% (65 staff)Total: 176 staff

Permanent


Lake Wanaka

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OUR MEMBERS Membership remained stable throughout the year despite a reduction in the number of associated accommodation discounts and giveaways provided with membership. A trial realignment of the price took place from April to June which resulted in a significant increase in membership sales for that period and no change to revenue. As a result a new price point has been set for membership from July 2014. Members - Year to 30 June

» 2011 International 8,683 | Domestic 16,821




Member WeekendsTwo member weekends were held in Auckland (incorporating the AGM) and in Wanaka. These successful events provide a social weekend away with other members from around New Zealand and the opportunity to meet and discuss current topics with YHA’s National Board and senior staff.

Pictures from left: Dr Karen Lewis, Bruce Ward, Cora Wilding Award winner Elise Janssen, Cora Wilding Award winner Marleen Baling (on right)

Karen managed to understand and represent both the desires of the membership and the modern day realities of YHA.

Banks Peninsula, Christchurch

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AwardsAt the 2013 AGM held in Auckland the following Awards were presented:

• Certificate of Merit – Cynthia Ducrot and Herman Ducrot

• Distinguished Service Award – Michael Dempsey, Colin Hamilton and William Leadbetter

• Honorary Life Membership Award – Karen Lewis and Bruce Ward

Honorary Life Memberships

Dr Karen Lewis 18 November 1969 - 14 September 2013 Sadly, YHA Board member Karen Lewis passed away in September 2013. Karen was a loyal and longstanding member of YHA, having served on the National Board and the Christchurch Branch Committee for a number of years.

Karen made a significant and positive contribution to YHA, bringing a combination of skills and experience to the Board table, as well as her passion for the environment and the core values of hostelling. Most importantly, Karen managed to understand and represent both the desires of the membership and the modern day realities of YHA, and she did this with the respect of all.

In recognition of her contribution and achievement, Karen was awarded an Honorary Life Membership at the AGM immediately following her death and this was accepted on her behalf by her parents. Karen knew she had been nominated for this award before she passed away and felt humbled by this honour.

YHA Te Anau

Bruce WardBruce first joined the Oamaru Branch in the 1980s, serving on the Branch Committee and fundraising for the Mt Cook hostel. He was elected to National Board in 1994 and served until 1998. He took a full share in work of the Board, only leaving when he joined the New Zealand Police force. Bruce then moved to Christchurch and joined the Christchurch Branch, becoming a committee member for some years before the demands of the Police made this commitment impossible. At all times Bruce has been committed to the values of YHA and has always been willing to do as much as he was able.

Cora Wilding AwardMarleen Baling received $1,000 to attend the Australasian Wildlife Management Conference (AWMS) in Palmerston North and Elise Janssen received $1,600 towards the cost of an Outward Bound course.

Marleen BalingAt AWMS Marleen attended a symposium on Advances in Australasian Reintroduction Biology and gave a lecture on lizard translocations and Salmonella. Having never attended the conference before, Marleen took on board a number of alternate perspectives on different topics that she will apply to existing and future projects.

Elise JanssenElise appreciated the opportunity to work with young people from all over New Zealand during the Outward Bound course. She found the 21 days gave her motivation and helped build confidence that she will be able to use as a prefect and coach at school.

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OUR ENVIRONMENTEnvironmental sustainability remains central to annual hostel business planning. Our hostels are committed to reducing water usage and energy consumption through initiatives such as the installation of shower drain heat recovery units, replacing guest kitchen refrigerator units with energy efficient refrigerators that do not utilise hydrofluorocarbons and TV upgrades to more energy efficient flat screen TVs.

Hostels are equally committed to working alongside their communities to improve the local environment via programmes such as Clean Up Week, the Motutapu Island restoration project and the Green Footprint Project.

YHA New Zealand applied to the HI Sustainability Fund with the proposal to install a geothermal down-bore heat exchanger at YHA Rotorua. This application made the finalist list but was unsuccessful. We remain passionate about tapping into this natural resource as YHA Rotorua emits 22% of YHA New Zealand’s total carbon emission from electricity and gas. We will resubmit our application in the forthcoming year.

Qualmark Enviro Accreditation YHA remains committed to the Qualmark Enviro accreditation system. There was no change to Qualmark Enviro ratings this year. All YHA-managed hotels have now been accredited and remain at:

Green Footprint ProjectHabitat restoration projects have continued in Christchurch with staff and guests taking time to do plantings at Chamberlains Ford in the Selwyn district. The local Selwyn district Enviroschools’ Enviro Leaders now help with planting day.

Future InitiativesPlanning is underway at the National Office to celebrate 10 years of planting in the Selwyn district as part of the Green Footprint Project. We have been invited to pilot the HI-Q Sustainability Programme which will take place at YHA Wellington this year.

Enviro Gold YHA Mt Cook

YHA Queenstown Central

YHA Queenstown Lakefront

YHA Te Anau

YHA Wanaka

YHA Wellington

Enviro Silver: YHA Auckland International

YHA Auckland City

YHA Christchurch Rolleston

House

YHA Franz Josef

YHA Lake Tekapo

YHA Nelson

YHA Opoutere

YHA Rotorua

YHA Taupo

Enviro Bronze: YHA Kaikoura

Pictures left: Green Footprint planting day 2013

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INTERNATIONALYHA New Zealand is an active member of Hostelling International (HI), the trading name of the International Youth Hostelling Federation (IYHF). This membership is strategically important for YHA New Zealand and provides a key competitive advantage.

We continue to foster our international presence and relationships through the following:

» Clive Croy’s role as HI Treasurer

Clive is concluding an initial two-year term as HI Treasurer following his election at the 2012 HI Conference.

» World Youth Student Travel Conference (WYSTC) in Sydney, September 2013

This conference continues to be important in building our offshore relationships and was attended by Marketing and Sales Manager, Brian Westwood, and Travel Services Manager, Isabelle Gremminger.

» HI CEOs Meeting in Paris, February 2014

Chief Executive, Mark Wells, represented YHA New Zealand at this meeting which is the key annual business meeting for the HI network.

» YHA China Exchange, March 2014

Marketing and Sales Manager, Brian Westwood, and Hostel Operations Manager, Simon Cartwright, attended the YHA China Managers’ Conference in Qingdao. A reciprocal exchange visit to New Zealand will take place towards the end of 2014, further strengthening the relationship between YHA China and YHA New Zealand.

» HI General Participation

YHA New Zealand continues to participate generally with HI, responding positively to consultation opportunities. Chief Executive, Mark Wells, has also participated in two advisory groups of which one (HI Operational Reference Group) is ongoing.

» YHA Australia Relationship

We continue to work closely with YHA Australia in support of the Statement of Intent Agreement which commits both Associations to a collaborative partnership. The development of the joint membership magazine, Backpacker Essentials, from late 2013 has been very successful and both countries are committed to building a closer working relationship.

YHA Mt Cook

Guests enjoying the balcony at YHA Christchurch Rolleston House

YHA Wanaka

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FINANCIALS YOUTH HOSTELS ASSOCIATION OF NEW ZEALAND INC

SUMMARY STATEMENT of COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2014

2014 $ 000s

2013 $ 000s

GROSS INCOME 15,144 13,621

TOTAL EXPENDITURE 13,888 13,196

Net Surplus/ (Deficit) before Financing Costs 1,256 425

Interest Received 40 32

Interest Paid (808) (945)

Net Surplus/ (Deficit) after Financing Costs 488 (488)

Gain/(Loss) on Sale of Assets 3 (273)

Net insurance settlement 1,381 2,062

NET SURPLUS/(DEFICIT) FOR THE YEAR 1,872 1,301

(Impairment) of Assets 0 (1,987)

Revaluation of Land & Buildings 597 (68)

TOTAL COMPREHENSIVE INCOME FOR THE YEAR 2,469 (754)

SUMMARY STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2014

2014 $ 000s

2013 $ 000s

Total Comprehensive Income for the Year 2,469 (754)

Net Movement in Equity for the Year 2,469 (754)

Equity at Start of the Year 29,129 29,883

TOTAL EQUITY AT END OF THE YEAR 31,598 29,129

SUMMARY STATEMENT of FINANCIAL POSITION AS AT 30 JUNE 2014

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2014 $ 000s

2013 $ 000s

FUNDS OF THE ASSOCIATION

Accumulated Funds 20,752 18,202

Revaluation Reserves 10,626 10,712

Stewart Island Hostel Building Fund 220 215

TOTAL ASSOCIATION FUNDS 31,598 29,129

These were represented by:

ASSETS

Current Assets (including Bank Balances below) 831 4,614

Long-Term Lease paid in advance 338 356

Mortgage Investment 300 450

Assets Classified as Held for Sale 1,908 1,081

Investment Property 3,364 0

Property & Plant Equipment 31,888 32,996

Intangible Assets 5,906 6,110

TOTAL ASSETS 44,535 45,607

LESS LIABILITIES

Current Liabilities (including Bank overdraft below) 2,609 2,228

Term Liabilities 10,328 14,250

TOTAL LIABILITIES 12,937 16,478

NET ASSETS PER THE ASSOCIATION’S FUNDS 31,598 29,129

On Behalf of the National Board

Coral Laughton — National Chair Kevin Brewer — Convenor, Audit and Risk Committee

SUMMARY STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2014

2014 $ 000s

2013 $ 000s

NET CASHFLOWS FROM OPERATING ACTIVITIES 5,943 744

NET CASHFLOWS FROM INVESTING ACTIVITIES (2,070) (261)

NET CASHFLOWS FROM FINANCING ACTIVITIES (3,222) (875)

NET INCREASE / (DECREASE) IN CASH 651 (392)

Add Opening Cash Balance (223) 169

CLOSING CASH AND BANK BALANCES 428 (223)

REPRESENTED BY:

Cash at Bank and on Hand 428 50

Bank Overdraft 0 (288)

Stewart Island Hostel Building Fund 0 15

428 (223)

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NOTES TO THE SUMMARY FINANCIAL STATEMENTS For the year ended 30 June 2014 These are the Summary Financial Statements of the Youth Hostels Association of New Zealand Incorporated (YHA New Zealand ) for the year ending on 30 June 2014.

The specific disclosures included in these summary financial statements have been extracted from the full annual financial statements authorised for issue 25 August 2014. The full annual financial statements have been prepared in accordance with New Zealand Equivalents to International Financial Reporting Standards (NZ IFRS).

These summary financial statements do not include all the disclosures provided in the full financial statements and cannot be expected to provide as complete an understanding as provided by the full financial statements.

An unqualified audit opinion has been received on the full financial statements for the year ended 30 June 2014. A copy of the full YHA New Zealand financial statements for the year ended 30 June 2014 may be obtained by phoning YHA New Zealand on (03) 379 9970, or by emailing [email protected].

This summary financial report has been examined by our auditor for consistency with the full financial statement. An unqualified audit opinion has been received. These summary financial statements were approved for issue by the National Board on 25 August 2014.

Basis of preparationYHA New Zealand is a public benefit entity, incorporated under the Incorporated Societies Act 1908; and is registered as a charitable entity under the Charities Act 2005.

These are the summary financial statements of YHA New Zealand and they comply with FRS43: Summary Financial Statements. The presentation currency is New Zealand dollars, rounded to the nearest thousand dollars.

The full financial statements, upon which these Summary Financial Statements are based, have been prepared to comply with the NZ GAAP and the Financial Reporting Act 1993.

There have been no events subsequent to balance date which materially affect the result for the year, or impacted on trading as a going concern. (2013: Nil). Post balance date the Tauranga property has been sold; and the Christchurch Manchester Street property is under contract. These properties are shown in the financial statements as assets held for sale. The Association has also purchased additional Christchurch hostel capacity after balance date.

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

Changes in accounting policiesThere have been no changes to Accounting Policies during the year ended 30 June 2014.

The Minister of Commerce has approved a new Accounting Standards Framework developed by the External Reporting Board (XRB). Under this Accounting Standards Framework, YHA New Zealand is classified as a public benefit entity and it is expected that it will be required to apply the new PBE Standards as applicable for private not-for-profit entities. These standards are being developed by the XRB based on current International Public Sector Accounting Standards (IPSAS). The effective date for the new standards for private not-for-profit entities is expected to be for reporting periods beginning on or after 1 April 2015. This means the YHA New Zealand expects to transition to the new standards in preparing its 30 June 2016 financial statements. As the PBE Standards as applicable for private not-for-profit entities are still under development, YHA New Zealand is unable to assess the implications of the new Accounting Standards Framework at this time.

Due to the change in the Accounting Standards Framework for public benefit entities, the XRB has effectively frozen the financial reporting requirements for public benefit entities up until the new Accounting Standard Framework is effective. Therefore all new NZ IFRS and amendments to existing NZ IFRS issued after 1 June 2011 will not be applicable to public benefit entities. Accordingly, no disclosure has been made about new or amended NZ IFRS that exclude public benefit entities from their scope.

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AUDITORS REPORT

PricewaterhouseCoopers, 5 Sir Gil Simpson Drive, Canterbury Technology Park, PO Box 13 244, Christchurch 8053,

New Zealand; T: +64 (3) 374 3000, F: +64 (3) 374 3001, www.pwc.com/nz

Report of the Independent Auditors’ on the Summary FinancialStatementsto the members of Youth Hostels Association of New Zealand Inc.

The accompanying summary financial statements, on pages 1 to 5 which comprise the summary statementof financial position as at 30 June 2014, the summary statement of comprehensive income, the summarystatement of changes in equity and the summary cash flow statement for the year then ended, and relatednotes, are derived from the audited financial statements of Youth Hostels Association of New Zealand Inc.for the year ended 30 June 2014.

The summary financial statements do not contain all the disclosures required for full financial statementsunder generally accepted accounting practice in New Zealand. Reading the summary financial statements,therefore, is not a substitute for reading the audited financial statements of Youth Hostels Association ofNew Zealand Inc.

Our audit of the financial statements for the year ended 30 June 2014 was completed on 27 August 2014and our unmodified opinion was issued on that date. We have not undertaken any additional auditprocedures in relation to those financial statements from the date of the completion of our audit and thosefinancial statements and the summary financial statements do not reflect the effects of events thatoccurred subsequent to the date of our report on those financial statements.

This report is made solely to the Company’s shareholders, as a body. Our work has been undertaken sothat we might state those matters we are required to state to them in a report from the auditor and for noother purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyoneother than the Company’s shareholders, as a body, for this report, or for the opinions we have formed. Inaddition, we take no responsibility for, nor do we report on, any part of the annual report not specificallymentioned in our report.

Directors’ Responsibility for the Summary Financial StatementsThe Directors are responsible for the preparation of the summary financial statements in accordance withFRS-43: Summary Financial Statements (“FRS 43”).

Auditors’ ResponsibilityOur responsibility is to express an opinion on the summary financial statements based on our procedures,which were conducted in accordance with International Standard on Auditing (New Zealand) 810:Engagements to Report on Summary Financial Statements.

Other than in our capacity as auditors we have no relationships with, or interests in, Youth HostelsAssociation of New Zealand Inc.

OpinionIn our opinion, the summary financial statements on pages 1 to 5 derived from the audited financialstatements of Youth Hostels Association of New Zealand Inc. for the year ended 30 June 2014 areconsistent, in all material respects, with those audited financial statements, in accordance withFRS-43.

Restriction on Use of our ReportThis report has been prepared for inclusion in the annual report. We disclaim any responsibility forreliance on this report or the amounts included in the summary financial statements, for any purposeother than that for which they were prepared.

Chartered Accountants Christchurch27 August 2014

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GOVERNANCE STATEMENT The Youth Hostels Association of New Zealand is a registered charitable organisation and an incorporated society, the governance of which is vested in a National Board elected by YHA New Zealand members.

National BoardYHA New Zealand relies upon the vision and business expertise of its Board, which consists of six elected senior financial members and up to two co-opted members. The Board’s role is to act in the best interests of YHA in order to ensure its long term sustainability by setting and monitoring strategic direction and performance.

In practice, the Board achieves this through a close working relationship with the Chief Executive who is charged with the day to day leadership and management of YHA. The Board meets at least six times each year.

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

Board committeesThe Board has three standing committees:

Remuneration Committee – comprising two Board members and the Chair; responsible for recruiting the Chief Executive and thereafter for all aspects of the Chief Executive’s employment, including developing annual key performance indicators and remuneration. In addition, the Remuneration Committee signs off on the appointment of senior staff and their remuneration.

Audit and Risk Committee – comprising three Board members, one of whom is elected as Convenor; responsible for reviewing the financial reporting process, the effectiveness of management information systems and systems of internal control, and the audit process. The Committee is also responsible for ensuring that a risk management strategy is in place which identifies and mitigates risks to YHA.

Awards Committee – comprising the Chair and the elected Honorary Vice-Presidents; responsible for receiving and confirming nominations for service and merit awards and for determining the annual Cora Wilding Memorial Award.

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

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

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

Registered OfficeYHA New Zealand’s registered office is in Christchurch.

National Board (from left): Barry Cope, Michael Sheehan, Clive Croy, Ray Salter, Kevin Brewer, Mark Wells (Chief Executive), Coral Laughton, John Hammond, Steve Wakefield

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ACKNOWLEDGEMENTSBequestsThe Eric Gordon Harvey Trust provided $6,200 this year. In line with the trust deed this is to be used for the benefit of hostels in the South Island, so this year’s amount has been applied to the new standby generator installation at YHA Mt Cook.

Acknowledgement of donationsYHA is very grateful for the following donations of $100 or more. Christchurch Branch $565

Wendy Wallace $500

Rotorua Branch $430

Elizabeth Beer $250

Amanda and Gary Gower $240

Peggy Jack $100

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

Honorary Life Members1967 Gordon Solloway

1968 Jim McKie

1978 Jean Nelson

1982 Peggy Jack (nee Lawless)

Donald Paterson

1986 Rodney Metcalfe

1989 Gwyn Rogers

Ruth Wildish

1990 Roy Pyle

1996 Peter Bugler

2001 Bill Morris

Malcolm Wade

2006 Margaret Abbott

Mike Northmore

Gilbert Whalley

2007 Bruce Bertram

Moira Lipyeat

2008 Elizabeth Beer

2010 Charlie Smith

2011 Ross Butler

Lance Kiddey

Ben Mitchell

John Wilson

2012 Harry Guitry

Rex Smart

2013 Dr Karen Lewis

Bruce Ward

National BoardCoral Laughton (National Chair) John Hammond (Deputy Chair) Kevin Brewer (Convenor, Audit and Risk Committee) Barry Cope Clive Croy Dr Karen Lewis* Ray Salter Michael Sheehan** Steve Wakefield

*Karen Lewis passed away in September 2013. **Michael Sheehan was co-opted in November 2013.

Honorary Vice-PresidentsHamish Allardice Donald Paterson Amanda Gower Harry Guitry

Chief ExecutiveMark Wells

Senior Leadership TeamMark Wells Simon Cartwright Brian Westwood Kevin Cameron Maureen McCloy

BankBank of New Zealand

AuditorsPricewaterhouseCoopers

SolicitorsYoung Hunter Rhodes & Co

Charities Commission Registration

Number CC37649

YHA Member GroupsGeriatrix Cycle Touring Group

Hawke’s Bay – Friends of YHA

Dunedin

Tauranga

Oamaru

YHA Member BranchesAuckland Christchurch Hamilton Rotorua Southland Whangarei

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Youth Hostels Association of New Zealand Inc.1st Floor, Moorhouse City, 166 Moorhouse Avenue, PO Box 436,

Christchurch 8140, New Zealand

phone: +64 (0) 3 379 9970, fax: +64 (0) 3 365 4476

YHA New Zealand 2014 Annual Report

Documents

Transcript of YHA New Zealand 2014 Annual Report