23. Notes to the Financial Statements

75Annual Report 2014

Note 1: Statement of accounting policies for the year ended 31 December 2014

The Reporting EntityTheUniversityofWaikato(theUniversity)isapublicbenefitentity,domiciledinNewZealand,constitutedasauniversityunder

theUniversityofWaikatoAct1963fortheadvancementofknowledgeandthedisseminationandmaintenancethereofby

teachingandresearch.

ThefinancialstatementswereauthorisedforissuebyCouncilon18March2015.

ThefinancialstatementscoveralltheactivitiesoftheUniversityandGroupincludingthoseof:

» WaikatoLinkLimitedandGroup,awhollyownedsubsidiarycompany,andtheresultsfortheyearended31December2014havebeenfullyconsolidatedintotheUniversitygroupresults.

» TheUniversityofWaikatoFoundation,incorporatedasaCharitableTrustin1992,andtheresultsfortheyearended31December2014havebeenfullyconsolidatedintotheUniversitygroupresults.

» TheUniversityofWaikatoAlumniAssociation,incorporatedin1990,andtheresultsfortheyearended31December2014havebeenfullyconsolidatedintotheUniversitygroupresults.

» TheStudentCampusBuildingFundTrust,incorporatedasaCharitableTrustin1971,andtheresultsfortheyearended31December2014havebeenfullyconsolidatedintotheUniversitygroupresults.

» TheUniversityofWaikatoResearchTrust,incorporatedasaCharitableTrustin2007,andtheresultsfortheyearended31December2014havebeenfullyincorporatedintotheUniversitygroupresults.

» iEngagEdLimited,awhollyownedsubsidiarycompany,andtheresultsfortheyearended31December2014havebeenfullyconsolidatedintotheUniversitygroupresults.

» ULeisureLimitedis50%ownedbytheUniversity.Theremaining50%isownedbytheWaikatoStudents’Union(Incorporated).ULeisureLimitedcommencedoperationsfrom1August1996,replacingtheStudentUnionServicesManagementBoard.EquityAccountingmethodshavebeenusedtoreporttheresultsofULeisureLimitedwhichhasabalancedateof31December.

» LCoNewZealandLimitedis25%ownedbytheUniversity.Theremaining75%isownedbythreeotherNewZealanduniversities.LCoNewZealandLimitedwasincorporatedDecember2003.EquityAccountingmethodshavebeenusedtoreporttheresultsofLCoNewZealandLimitedwhichhasabalancedateof31December.

AlloftheUniversity’ssubsidiariesandassociatesareincorporatedinNewZealand.

Basis of PreparationStatement of Compliance

TheseaccompanyingfinancialstatementsarepresentedinaccordancewithSection203oftheEducationAct1989whichrefers

totheprovisionsoftheCrownEntitiesAct2004,andGenerallyAcceptedAccountingPracticeinNewZealand(NZGAAP).They

complywiththeNewZealandEquivalentstoInternationalFinancialReportingStandards(NZIFRS)andotherapplicablefinancial

reportingstandardsasappropriateforpublicbenefitentities.

Theaccountingpoliciessetoutbelowhavebeenappliedinpreparingthefinancialstatementsfortheyearended31December

2014andthecomparativeinformationpresentedinthesefinancialstatementsfortheyearended31December2013.

Measurement Basis

Thefinancialstatementshavebeenpreparedonanhistoricalcostbasis,adjustedbytherevaluationofcertainproperty,plant

andequipment.

Notes to the Financial Statements for the year ended 31 December 2014

76 The University of Waikato

Functional and Presentation Currency

ThefinancialstatementsarepresentedinNewZealanddollarsandallvaluesareroundedtothenearestthousanddollars($’000).

ThefunctionalcurrencyoftheUniversityisNewZealanddollars.Foreigncurrencytransactionsaretranslatedintothefunctional

currencyusingtheexchangeratesprevailingatthedatesofthetransactions.Foreignexchangegainsandlossesresultingfromthe

settlementofsuchtransactionsarerecognisedintheStatementofComprehensiveIncome.

Changes in Accounting Policies

Therehavebeennochangesinaccountingpoliciesfortheyearended31December2014.TheUniversityhasnotadoptedany

revisionstoaccountingstandardsduringthefinancialyear.

Standards, amendments, and interpretations issued that are not yet effective and have not been early adopted

Standards,amendments,andinterpretationsissuedbutnotyeteffectivethathavenotbeenearlyadopted,andarerelevanttothe

UniversityandGroupare:

» NZIFRS9FinancialInstrumentswilleventuallyreplaceNZIAS39FinancialInstruments:RecognitionandMeasurement.NZIAS39isbeingreplacedthroughthefollowing3mainphases:Phase1ClassificationandMeasurement,Phase2ImpairmentMethodology,andPhase3HedgeAccounting.Phase1ontheclassificationandmeasurementoffinancialassetshasbeencompletedandhasbeenpublishedinthenewfinancialinstrumentstandardNZIFRS9.NZIFRS9usesasingleapproachtodeterminewhetherafinancialassetismeasuredatamortisedcostorfairvalue,replacingthemanydifferentrulesinNZIAS39.TheapproachinNZIFRS9isbasedonhowanentitymanagesitsfinancialinstruments(itsbusinessmodel)andthecontractualcashflowcharacteristicsofthefinancialassets.ThefinancialliabilityrequirementsarethesameasthoseofNZIAS39,exceptforwhenanentityelectstodesignateafinancialliabilityatfairvaluethroughthesurplusordeficit.Thenewstandardisrequiredtobeadoptedfortheyearended31December2017.However,asanewAccountingStandardsFrameworkwillapplybeforethisdate,thereiscurrentlynocertaintywhenanequivalentstandardtoNZIFRS9willbeappliedbypublicbenefitentities.

TheMinisterofCommercehasapprovedanewAccountingStandardsFramework(incorporatingaTierStrategy)developedby

theExternalReportingBoard(XRB).UnderthisAccountingStandardsFramework,theUniversityisclassifiedasaTier1reporting

entityanditwillberequiredtoapplyfullpublicsectorPublicBenefitEntityAccountingStandards(PAS).Thesestandards

developedbytheXRBaremainlybasedoncurrentInternationalPublicSectorAccountingStandards.Theeffectivedateforthe

newstandardsforpublicsectorentitiesisforreportingperiodsbeginningonorafter1July2014.ThismeansthattheUniversity

willtransitiontothenewstandardsinpreparingits31December2015financialstatements.TheUniversityisintheprocessof

assessingtheimplicationsofthenewAccountingStandardsFramework.

DuetothechangeintheAccountingStandardsFrameworkforpublicbenefitentities,itisexpectedthatallnewNZIFRSand

amendmentstoexistingNZIFRSwillnotbeapplicabletopublicbenefitentities.ThereforetheXRBhaseffectivelyfrozen

thefinancialreportingrequirementsforpublicbenefitentitiesupuntilthenewAccountingStandardFrameworkiseffective.

Accordingly,nodisclosurehasbeenmadeaboutneworamendedNZIFRSthatexcludepublicbenefitentitiesfromtheirscope.



Significant Accounting PoliciesBasis of Consolidation

Thepurchasemethodisusedtopreparetheconsolidatedfinancialstatements,whichinvolvesaddingtogetherlikeitemsofassets,

liabilities,equity,income,expensesandcashflowsonaline-by-linebasis.Allsignificantintragroupbalances,transactions,income

andexpensesareeliminatedonconsolidation.

TheUniversity’sinvestmentsinitssubsidiariesarecarriedatcostintheUniversity’sown“parententity”financialstatements.

Subsidiaries

TheUniversityconsolidatesassubsidiariesinthegroupfinancialstatementsallentitieswheretheUniversityhasthecapacityto

controltheirfinancingandoperatingpoliciessoastoobtainbenefitsfromtheactivitiesoftheentity.Thispowerexistswherethe

Universitycontrolsthemajorityvotingpoweronthegoverningbodyorwheresuchpolicieshavebeenirreversiblypredetermined

bytheUniversityorwherethedeterminationofsuchpoliciesisunabletomateriallyimpactthelevelofpotentialownership

benefitsthatarisefromtheactivitiesofthesubsidiary.

TheUniversitymeasuresthecostofabusinesscombinationastheaggregateofthefairvalues,atthedateofexchange,of

assetsgiven,liabilitiesincurredorassumed,inexchangeforcontrolofthesubsidiaryplusanycostsdirectlyattributableto

thebusinesscombination.

AnyexcessofthecostofthebusinesscombinationovertheUniversity’sinterestinthenetfairvalueoftheidentifiableassets,

liabilitiesandcontingentliabilitiesisrecognisedasgoodwill.IftheUniversity’sinterestinthenetfairvalueoftheidentifiable

assetsliabilitiesandcontingentliabilitiesrecognisedexceedsthecostofthebusinesscombination,thedifferencewillbe

recognisedimmediatelyintheStatementofComprehensiveIncome.

Associates

TheUniversityaccountsforaninvestmentinanassociateinthegroupfinancialstatementsusingtheequitymethod.Anassociate

isanentityoverwhichtheUniversityhassignificantinfluenceandthatisneitherasubsidiarynoraninterestinajointventure.

Theinvestmentinanassociateisinitiallyrecognisedatcostandthecarryingamountisincreasedordecreasedtorecognisethe

University’sshareofthesurplusordeficitoftheassociateafterthedateofacquisition.TheUniversity’sshareofthesurplusor

deficitoftheassociateisrecognisedintheUniversity’sStatementofComprehensiveIncome.Distributionsreceivedfroman

associatereducethecarryingamountoftheinvestment.

IftheUniversity’sshareofdeficitsofanassociateequalsorexceedsitsinterestintheassociate,theUniversitydiscontinues

recognisingitsshareoffurtherdeficits.AftertheUniversity’sinterestisreducedtozero,additionaldeficitsareprovidedfor,and

aliabilityisrecognised,onlytotheextentthattheUniversityhasincurredlegalorconstructiveobligationsormadepaymentson

behalfoftheassociate.Iftheassociatesubsequentlyreportssurpluses,theUniversitywillresumerecognisingitsshareofthose

surplusesonlyafteritsshareofthesurplusesequalstheshareofdeficitsnotrecognised.

TheUniversity’sshareintheassociate’ssurplusordeficitsresultingfromunrealisedgainsontransactionsbetweentheUniversity

anditsassociatesiseliminated.

TheUniversity’sinvestmentsinassociatesarecarriedatcostintheUniversity’sown“parententity”financialstatements.

Joint venture

InvestmentsinjointlycontrolledentitiesareaccountedforbytheGroupbyusingtheequitymethodofaccountingandare

initiallyrecognisedatcost.



Budget Figures

BudgetfiguresarethoseapprovedbytheFinanceCommitteeperminutesof24September2013fortheUniversityentity.

Howeversomelineitemshavebeensubsequentlyre-classifiedtoalignwiththeannualreportingformatandtoreflectopening

balancesfollowingcompletionofthe2013financialstatements.ThebudgetfigureshavebeenpreparedinaccordancewithNZ

GAAPandareconsistentwiththeaccountingpoliciesadoptedbytheCouncilforthepreparationofthefinancialstatements.

Cash flow Statement

Cash and Cash Equivalents

Cashmeanscashbalancesonhand,heldinbankaccounts,demanddepositsandotherhighlyliquidinvestmentsinwhichthe

Universityinvestsaspartofitsday-to-daycashmanagement.Cashequivalentsarenotsubjecttoasignificantriskofchangein

value,andhaveashortmaturityofthreemonthsorless.

Operating activities

OperatingactivitiesincludecashreceivedfromallincomesourcesoftheUniversityandrecordthecashpaymentsmadeforthe

supplyofgoodsandservices.

Investing activities

Investingactivitiesarethoseactivitiesrelatingtotheacquisitionanddisposalofnoncurrentassets.

Financing activities

FinancingactivitiescomprisethechangeinequityanddebtcapitalstructureoftheUniversity.

Revenue

Revenueismeasuredatthefairvalueofconsiderationreceivedorreceivable.DonationsandBequeststotheUniversityare

recognisedasincomewhenmoneyisreceived,orentitlementtoreceivemoneyisestablished;exceptwherefulfillmentofany

restrictionsattachedtothesemoniesisnotprobable.

ResearchrevenuederivedfromresearchcontractsisrecognisedintheStatementofComprehensiveIncomebasedonthestageof

completionoftheresearchprojectatBalanceSheetdate.TheunearnedrevenueisrecordedasaliabilityintheBalanceSheetto

recognisethefutureobligationtocompletetheresearchproject.

Surpluses,generatedfromexternallyfundedresearchprojectsandwhicharecommittedtofundcontinuingresearch,are

transferredtotheUniversityofWaikatoResearchTrustasagrant.TheUniversityofWaikatoResearchTrustaccountsforthese

grantsasrevenue.

GovernmentGrantsandstudenttuitionfeesarerecognisedasrevenueonacoursepercentageofcompletionbasis.

Interestincomeisrecognisedusingtheeffectiveinterestmethod.

Dividendsarerecognisedwhentherighttoreceivepaymenthasbeenestablished.

Borrowing Costs

TheUniversityhaselectedtodefertheadoptionoftherevisedNZIAS23BorrowingCosts(Revised2007)inaccordancewiththe

transitionalprovisionsofNZIAS23thatareapplicabletopublicbenefitentities.Consequently,allborrowingcostsarerecognised

asanexpenseintheperiodinwhichtheyareincurred.



Trade and Other Receivables

Tradeandotherreceivablesareinitiallymeasuredatfairvalueandsubsequentlymeasuredatamortisedcostusingtheeffective

interestmethod,lessanyprovisionforimpairment.

AprovisionforimpairmentofreceivablesisestablishedwhenthereisobjectiveevidencethattheUniversitywillnotbeableto

collectallamountsaccordingtotheoriginaltermofthereceivables.Theamountoftheprovisionisthedifferencebetweenthe

asset’scarryingamountandthepresentvalueoftheestimatedfuturecashflows,discountedusingtheeffectiveinterestmethod.

Employee entitlements

ProvisionismadeforbenefitsaccruingtostaffinrespectoftheUniversity’sliabilityforwagesandsalaries,andannualandsick

leavewhereitisprobablethatsettlementwillbemadeandtheyarecapableofbeingmeasuredreliably.Theseprovisionsare

calculatedusingthecurrentratesofpay.

TheUniversityrecognisesaliabilityforsickleavetotheextentthatabsencesinthecomingyearareexpectedtobegreaterthan

thesickleaveentitlementsearnedinthecomingyear.Theamountiscalculatedbasedontheunusedsickleaveentitlementthat

canbecarriedforwardatbalancedate,totheextentthattheUniversityanticipatesitwillbeusedbystafftocoverthosefuture

absences.Thesickleaveprovisionisonlycalculatedforthosestaffwithafixedsickleaveprovisionintheiremploymentcontracts.

ThemajorityofUniversitystaffhaveanunlimitedsickleaveentitlement.

Additionallyprovisionhasbeenmade,whereapplicable,usinganactuarialvaluationforretirementgratuitiesandlongservice

leave.Thisvaluation,asat31December2014,wasundertakenbyMercer(NZ)Limited(Actuaries).Thecalculationsarebasedon:

» Likelyfutureentitlementsaccruingtostaff,basedonyearsofservice,yearstoentitlement,thelikelihoodthatstaffwillreachthepointofentitlement,andcontractualentitlementinformation;and

» Thepresentvalueoftheestimatedfuturecashflows.

Expectedfuturepaymentsarediscountedusingmarketyieldsongovernmentbondsatbalancedatewithtermstomaturitythat

match,ascloselyaspossible,theestimatedfuturecashoutflowsforentitlements.Theinflationfactorisbasedontheexpected

long-termincreaseinremunerationforemployees.

ObligationsforcontributionstodefinedcontributionsuperannuationschemesarerecognisedasanexpenseintheStatementof

ComprehensiveIncomeasincurred.

Insufficientinformationisavailabletousedefinedbenefitaccounting,asitisnotpossibletodeterminefromthetermsofthe

NationalProvidentFundschemetheextenttowhichthesurplus/deficitwillaffectfuturecontributionsbyindividualemployers,

asthereisnoprescribedbasisforallocation.Theschemeisthereforeaccountedforasadefinedcontributionscheme.Further

informationontheseschemesisdisclosedinnote5.

Totheextentthatitisanticipatedthattheliabilitywillariseduringthefollowingyeartheentitlementsarerecordedascurrent

liabilities.Theremainderoftheanticipatedentitlementsarerecordedasnon-currentliabilities.

Equity

Equityisthecommunity’sinterestintheUniversityandGroupandismeasuredasthedifferencebetweentotalassetsandtotal

liabilities.Equityisdisaggregatedandclassifiedintoanumberofreservestoenablecleareridentificationofthespecifiedusesthat

CouncilandGroupmakeofitsaccumulatedsurpluses.Thecomponentsofequityare:

» GeneralEquity

» AssetRevaluationReserve

» RestrictedReserves



Accounting for derivative financial instruments, hedging activities and foreign currency transactions

TheUniversityusesderivativefinancialinstrumentstomanageitsexposuretoforeignexchangeriskarisingfromitsoperational

activities.TheUniversitydoesnotholdorissuethesefinancialinstrumentsfortradingpurposes.TheUniversityhasnotadopted

hedgeaccounting.

Derivativesareinitiallyrecognisedatfairvalueonthedateaderivativecontractisenteredintoandaresubsequentlyre-measured

totheirfairvalueateachbalancedate.Movementsinthefairvalueofderivativefinancialinstrumentsarerecognisedinthe

StatementofComprehensiveIncome.

Foreigncurrencytransactions(includingthoseforwhichforwardexchangecontractsareheld)aretranslatedintoNewZealand

dollarsusingtheexchangeratesprevailingatthedatesofthetransactions.Foreignexchangegainsandlossesresultingfrom

thesettlementofsuchtransactionsandfromthetranslationatyearendexchangeratesofmonetaryassetsandliabilities

denominatedinforeigncurrenciesarerecognisedintheStatementofComprehensiveIncome.

Income tax

IncomeTaxhasnotbeenprovidedforintheseaccountsastheUniversityhasbeenrecognisedasacharitableorganisationbythe

IRDandisthereforeexemptfromincometax.

Goods and services tax

GoodsandServicesTax(GST)isexcludedfromthesefinancialstatements,withtheexceptionofaccountsreceivableandaccounts

payable.WhereGSTisnotrecoverableasinputtaxthenitisrecognisedaspartoftherelatedassetorexpense.

ThenetamountofGSTrecoverablefrom,orpayableto,theInlandRevenueDepartment(IRD)isincludedaspartofreceivablesor

payablesintheBalanceSheet.

ThenetGSTpaidto,orreceivedfromtheIRD,includingtheGSTrelatingtoinvestingandfinancingactivities,isclassifiedasanet

operatingcashflowinthestatementofcashflows.

CommitmentsandcontingenciesaredisclosedexclusiveofGST.

Inventories

Inventoriesheldfordistributionorconsumptionintheprovisionofservicesthatarenotsuppliedonacommercialbasisare

measuredatcost(determinedonaweightedaveragebasis)adjustedwhenapplicableforanylossofservicepotential.This

valuationincludesallowancesforslowmovingandobsoleteinventories.Noaccountistakenofotherminorstocksinacademic

schoolsandadministrativedepartments,whichareexpensedasissued.

Inventoriesheldforuseintheproductionofgoodsandservicesonacommercialbasisarevaluedatthelowerofcostandnet

realisablevalue.ThecostofpurchasedinventoryisdeterminedusingtheFIFOmethod.

ThewritedownfromcosttonetrealisablevalueisrecognisedintheStatementofComprehensiveIncome.

Financial Assets

TheUniversityclassifiesitsfinancialassetsintothefollowingfourcategories:financialassetsatfairvaluethroughsurplusor

deficit,held-to-maturityinvestments,loansandreceivablesandfinancialassetsatfairvaluethroughothercomprehensive

income.Theclassificationdependsonthepurposeforwhichtheinvestmentswereacquired.Managementdeterminesthe

classificationofitsinvestmentsatinitialrecognitionandre-evaluatesthisdesignationateveryreportingdate.



Financialassetsareinitiallymeasuredatfairvalueplustransactioncostsunlesstheyarecarriedatfairvaluethroughsurplusor

deficitinwhichcasethetransactioncostsarerecognisedinsurplusordeficit.

Purchasesandsalesofinvestmentsarerecognisedontrade-date,thedayonwhichtheUniversitycommitstopurchaseorsellthe

asset.Financialassetsarede-recognisedwhentherightstoreceivecashflowsfromthefinancialassetshaveexpiredorhavebeen

transferredandtheUniversityhastransferredsubstantiallyalltherisksandrewardsofownership.

ThefairvalueoffinancialassetstradedinactivemarketsisbasedonquotedmarketpricesattheBalanceSheetdate.Thequoted

marketpriceusedisthecurrentbidprice.

Thefairvalueoffinancialinstrumentsthatarenottradedinanactivemarketisdeterminedusingvaluationtechniques.The

Universityusesavarietyofmethodsandmakesassumptionsthatarebasedonmarketconditionsexistingateachbalancedate.

Quotedmarketpricesordealerquotesforsimilarinstrumentsareusedforlong-termdebtinstrumentsheld.Othertechniques,

suchasestimateddiscountedcashflows,areusedtodeterminefairvaluefortheremainingfinancialinstruments.

Thefourcategoriesoffinancialassetsare:

» Financialassetsatfairvaluethroughsurplusordeficit

Thiscategoryhastwosub-categories:financialassetsheldfortrading,andthosedesignatedatfairvaluethroughsurplusordeficitatinception.Afinancialassetisclassifiedinthiscategoryifacquiredprincipallyforthepurposeofsellingintheshorttermorifsodesignatedbymanagement.Derivativesarealsocategorisedasheldfortradingunlesstheyaredesignatedashedges.Assetsinthiscategoryareclassifiedasnon-currentassetsunlesstheUniversityintendstodisposeoftheseinvestmentswithin12monthsoftheBalanceSheetdate.

Afterinitialrecognitiontheyaremeasuredattheirfairvalues.Gainsorlossesonre-measurementarerecognisedthroughsurplusordeficit.

Assetsinthiscategoryforthegroupincludelistedsecurities.

» Loansandreceivables

Thesearenon-derivativefinancialassetswithfixedordeterminablepaymentsthatarenotquotedinanactivemarket.

Afterinitialrecognitiontheyaremeasuredatamortisedcostusingtheeffectiveinterestmethod.GainsandlosseswhentheassetisimpairedorderecognisedarerecognisedintheStatementofComprehensiveIncome.TheUniversityincludesinloansandreceivables,cashandcashequivalents,otherfinancialassets,tradeandotherreceivables,andloanstoULeisureLtdandLCoNZ.

» HeldtoMaturityInvestments

HeldtomaturityinvestmentsareassetswithfixedordeterminablepaymentsandfixedmaturitiesthattheUniversityhasthepositiveintentionandabilitytoholdtomaturity.

Afterinitialrecognitiontheyaremeasuredatamortisedcostusingtheeffectiveinterestmethod.GainsandlosseswhentheassetisimpairedorderecognisedarerecognisedintheStatementofComprehensiveIncome.

DerivativesheldbytheUniversityareclassifiedasheldtomaturity.

» Financialassetsatfairvaluethroughothercomprehensiveincome.

Financialassetsatfairvaluethroughothercomprehensiveincomearethosethataredesignatedasfairvaluethroughothercomprehensiveincomeorarenotclassifiedinanyoftheothercategoriesabove.

Thiscategoryencompasses:

–InvestmentsthattheUniversityintendstoholdlong-termbutwhichmayberealisedbeforematurity;and

–ShareholdingsthattheUniversityholdsforstrategicpurposes.

–TheUniversityandGroup'sinvestmentsinitssubsidiaries,associatecompaniesandjointventuresarenotincludedinthiscategoryastheyareheldatcost(asallowedbyNZIAS27ConsolidatedandSeparateFinancialStatementsandNZIAS28InvestmentsinAssociates)whereasthiscategoryistobemeasuredatfairvalue.

Afterinitialrecognition,theseinvestmentsareheldattheirfairvaluewithgainsandlossesrecogniseddirectlyinothercomprehensiveincomeexceptforimpairmentlosses,whicharerecognisedinthesurplusordeficit.Onde-recognitionthecumulativegainorlosspreviouslyrecognisedinothercomprehensiveincomeisreclassifiedfromequitytothesurplusordeficit.



Impairment of Financial Assets

AteachBalanceSheetdatetheUniversityassesseswhetherthereisanyobjectiveevidencethatafinancialassetorgroupof

financialassetsisimpaired.Anyimpairmentlossesarerecognisedthroughsurplusordeficit.

Leases

Financeleases,whicheffectivelytransfertotheUniversitysubstantiallyalltherisksandbenefitsincidentaltoownershipofthe

leaseditem,arecapitalisedattheloweroffairvalueorpresentvalueoftheminimumleasepayments.Theleasedassetsand

correspondingliabilitiesaredisclosedandtheleasedassetsaredepreciatedovertheperiodtheUniversityisexpectedtobenefit

fromtheiruse.

Operatingleasepayments,wherethelessorseffectivelyretainsubstantiallyalltherisksandbenefitsofownershipoftheleased

items,areincludedinthedeterminationoftheoperatingprofitinequalinstalmentsovertheleaseterm.

Property, Plant and Equipment:

Land

In1996thelandoccupiedbytheUniversitycampuswastransferredbytheCrowntoWaikato-Tainui,aspartoftheCrown’s

settlementoftheRaupatuclaim.TheUniversityleasesbackthelandfromWaikato-Tainui.Compensationwaspaidtothe

Universityin1996bytheCrowntofundtheUniversity’sfinancialobligationsunderthelease.

Buildings

Themajorityofbuildingsrecognisedinthefinancialstatements,includingthepreviousHamiltonTeachers’Collegebuildings,

arestillsubjecttothelegaltransferofownershipfromtheMinistryofEducation.TheUniversityisoftheopinionthatasat31

December2014itisinsubstancetheowneroftheseBuildingsandassumesallthenormalrisksandrewardsofownership.

Landandbuildingsarerevaluedwhentherehasbeenasignificantmovementinthefairvalue.Thefairvaluesarerecognisedin

thefinancialstatementsandarereviewedattheendofeachreportingperiodtoensurethecarryingvalueoflandandbuildings

isnotmateriallydifferentfromtheirfairvalue.Landandbuildingswererevaluedasat31December2014byDarrochValuations

(registeredvaluers),onafairvaluebasis.Thevalueoflandandnonspecialisedbuildingswasdeterminedusingmarketbased

evidence.Allotherbuildingswerevaluedatoptimiseddepreciatedreplacementcost.

Infrastructural assets

Universityownedinfrastructuralassetsarerevaluedwhentherehasbeenasignificantmovementinthefairvalue.Thefairvalues

arerecognisedinthefinancialstatementsandarereviewedattheendofeachreportingperiodtoensurethecarryingvalueof

Infrastructuralassetsarenotmateriallydifferentfromtheirfairvalue.Infrastructuralassetswererevaluedasat31December

2014byOpusInternationalConsultantsLimitedonafairvaluebasisusingtheoptimiseddepreciatedreplacementcostmethod.

Library

TheLibrarycollectionisvaluedonthebasisofhistoricalcostlessaccumulateddepreciation.

Assets Under Construction/Work in Progress

Assetsunderconstruction/workinprogressisvaluedonthebasisofexpenditureincurredandcertifiedgrossprogressclaim

certificatesupto31December.WorkinProgressisnotdepreciated.Thetotalcostofaprojectistransferredtotherelevantasset

classonitscompletionandthenitisdepreciated.

Other Property, Plant and Equipment

Allotherproperty,plantandequipmentarevaluedathistoricalcostlessaccumulateddepreciation.



Depreciation

Propertyplantandequipmentisdepreciatedoneitherastraightline(SL)ordiminishingvalue(DV)basisasfollows:

Asset Class Basis Useful Life/Rate

Land N/A N/A

Buildings

–Structure SL 1-82years

–Services SL 1-39years

–Fitout SL 1-31years

Infrastructure SL 2-80years

Library

–Books SL 35years

–Periodicals SL 15years

Teaching/ResearchEquipment DV 15%

ComputerEquipment(excludingservers) SL 3-4years

ComputerServers SL 5years

OtherPropertyPlantandEquipment DV 5-20%

Revaluations

Revaluationofplant,propertyandequipmentiscarriedoutonaclassofassetsbasis.Thenetrevaluationresultsarecredited

ordebitedtoothercomprehensiveincomeandareaccumulatedtoanassetrevaluationreserveinequityforthatclassofasset.

Wherethiswouldresultinadebitbalanceintheassetrevaluationreserve,thisbalanceisnotrecognisedinothercomprehensive

incomebutisrecognisedinthesurplusordeficit.Anysubsequentincreaseonrevaluationthatreversesapreviousdecreasein

valuerecognisedinthesurplusordeficitwillberecognisedfirstinthesurplusordeficituptotheamountpreviouslyexpensed,

andthenrecognisedinothercomprehensiveincome.

Disposals

Gainsandlossesondisposalsaredeterminedbycomparingthedisposalproceedswiththecarryingamountoftheasset.Gains

andlossesondisposalsarereportednetinthesurplusordeficit.Whenrevaluedassetsaresold,theamountsincludedinproperty

revaluationreservesinrespectofthoseassetsaretransferredtogeneralfunds.

Intangible assets

Patents, trademarks and licences

Patents,trademarksandlicencesarefinitelifeintangiblesandarerecordedatcostlessaccumulatedamortisationandimpairment.

Amortisationischargedonastraightlinebasisovertheirestimatedusefulliveswhichrangebetweensevenandtwentyyears.The

estimatedusefullifeandamortisationmethodisreviewedattheendofeachannualreportingperiod.



Computer Software

Computersoftwareisamortisedonastraightlinebasisthatwillwriteoffthecostwithinthreetofouryears.Computersoftwareforthefinancial,studentenrolmentandlibrarysystemsareamortisedonastraightlinebasisthatwillwriteoffthecostwithintenyears.

Internallygeneratedintangibleassetsforfinitelifeintangiblesarestatedatcostlessaccumulatedamortisationandimpairment,

andareamortisedonastraight-linebasisovertheirusefullivesasfollows:

Research

Expenditureonresearchactivitiesisrecognisedasanexpenseintheperiodinwhichitisincurred.

Intellectual Property Development

Developmentcostsincurredondevelopmentprojects(relatingtothedesignandtestingofneworimprovedproducts)are

recognisedasintangibleassetswhenthefollowingcriteriahavebeenfulfilled:

» Itistechnicallyfeasibletocompletetheintangibleassetanduseorsellit;

» Managementintendstocompletetheintangibleassetanduseorsellit;

» Thereisanabilitytouseorselltheintangibleasset;

» Itcanbedemonstratedhowtheintangibleassetwillgenerateprobablefutureeconomicbenefits;

» Adequatetechnical,financialandotherresourcestocompletethedevelopmentandtouseorselltheintangibleassetareavailable;and

» Theexpenditureattributabletotheintangibleassetduringitsdevelopmentcanbereliablymeasured.

Otherdevelopmentexpendituresthatdonotmeetthesecriteriaarerecognisedasanexpenseasincurred.Developmentcostspreviouslyrecognisedasanexpensearenotrecognisedasanassetinasubsequentperiod.Capitaliseddevelopmentcostsarerecordedasintangibleassetsandamortisedfromthepointatwhichtheassetisreadyforuseonastraight-linebasisoveritsusefullife.

Impairment of non-current assets

Ateachreportingdate,theUniversityreviewsthecarryingamountsofitstangibleandintangibleassetstodeterminewhetherthereisanyindicationthatthoseassetshavesufferedanimpairmentloss.Ifanysuchindicationexists,therecoverableamountoftheassetisestimatedinordertodeterminetheextentoftheimpairmentloss(ifany).Wheretheassetdoesnotgeneratecashflowsthatareindependentfromotherassets,theUniversityestimatestherecoverableamountofthecash-generatingunittowhichtheassetbelongs.

Recoverableamountisthehigheroffairvaluelesscoststosellandvalueinuse.Inassessingvalueinuse,theestimatedfuturecashflowsarediscountedtotheirpresentvalueusingapre-taxdiscountratethatreflectscurrentmarketassessmentsofthetimevalueofmoneyandtherisksspecifictotheassetforwhichtheestimatesoffuturecashflowshavenotbeenadjusted.

Iftherecoverableamountofanasset(orcash-generatingunit)isestimatedtobelessthanitscarryingamount,thecarryingamountoftheasset(cash-generatingunit)isreducedtoitsrecoverableamount.AnimpairmentlossisrecognisedintheStatementofComprehensiveIncomeimmediately,unlesstherelevantassetiscarriedatfairvalue,inwhichcasetheimpairmentlossistreatedasarevaluationdecrease.

Whereanimpairmentlosssubsequentlyreverses,thecarryingamountoftheasset(cash-generatingunit)isincreasedtotherevisedestimateofitsrecoverableamount,butonlytotheextentthattheincreasedcarryingamountdoesnotexceedthecarryingamountthatwouldhavebeendeterminedhadnoimpairmentlossbeenrecognisedfortheasset(cash-generatingunit)

inprioryears.AreversalofanimpairmentlossisrecognisedintheStatementofComprehensiveIncomeimmediately,unlessthe

relevantassetiscarriedatfairvalue,inwhichcasethereversaloftheimpairmentlossistreatedasarevaluationincrease.



Provisions

ProvisionsarerecognisedwhentheUniversityhasapresentobligationasaresultofapastevent,thefuturesacrificeofeconomicbenefitsisprobable,andtheamountoftheprovisioncanbemeasuredreliably.

Theamountrecognisedasaprovisionisthebestestimateoftheconsiderationrequiredtosettlethepresentobligationatreportingdate,takingintoaccounttherisksanduncertaintiessurroundingtheobligation.Whereaprovisionismeasuredusingthecashflowsestimatedtosettlethepresentobligation,itscarryingamountisthepresentvalueofthosecashflows.

Whensomeoralloftheeconomicbenefitsrequiredtosettleaprovisionareexpectedtoberecoveredfromathirdparty,the

receivableisrecognisedasanassetifitisvirtuallycertainthatrecoverywillbereceivedandtheamountofthereceivablecanbe

measuredreliably.

Restructuring

ProvisionsforrestructuringarerecognisedwhentheUniversityhasdevelopedadetailedformalplanfortherestructuringandhas

raisedavalueexpectationinthoseaffectedthatitwillcarryouttherestructuringby:

» Startingtoimplementtheplan–OR

» Announcingitsmainfeaturestothoseaffectedbyit

Trade and Other Payables

Tradeandotherpayablesareinitiallymeasuredatfairvalueandsubsequentlymeasuredatamortisedcostusingtheeffective

interestmethod.

Borrowings

Borrowingsareinitiallyrecognisedattheirfairvalue.Afterinitialrecognition,allborrowingsaremeasuredatamortisedcostusing

theeffectiveinterestmethod.

Critical accounting estimates and assumptions

InpreparingthesefinancialstatementstheUniversityhasmadeestimatesandassumptionsconcerningthefuture.Theseestimatesandassumptionsmaydifferfromthesubsequentactualresults.Estimatesandjudgementsarecontinuallyevaluatedandarebasedonhistoricalexperienceandotherfactors,includingexpectationsorfutureeventsthatarebelievedtobereasonableunderthecircumstances.Theestimatesandassumptionsthathaveasignificantriskofcausingmaterialadjustmentto

thecarryingamountsofassetsandliabilitieswithinthenextfinancialyeararediscussedbelow:

» ActuarialvaluationshavebeenobtainedinordertodeterminethevalueofLongServiceLeaveandRetirementLeaveprovisions.

» Estimateshavebeenmadeastothecompletedportionofexternalresearchprojectsindeterminingthevalueofincomeinadvance.

» AteachbalancedatetheUniversityreviewstheusefullivesofthoseassetsthataresubjecttorevaluation.

» Note17providesinformationabouttheestimatesandassumptionsexercisedinthemeasurementofrevaluedland,buildings,andinfrastructure.

Critical judgements in applying the University’s accounting policies

ManagementhasexercisedthefollowingcriticaljudgementsinapplyingtheUniversity’saccountingpoliciesfortheperiodended

31December2014:

» MostCrownfundingreceivedisoperationalinnatureandisprovidedbytheCrownundertheauthorityofanexpenseappropriationandisrecognisedasrevenue.WherefundingisreceivedfromtheCrownundertheauthorityofacapitalappropriation,theUniversityaccountsforthefundingasacapitalcontributiondirectlyinequity.



Note 2: Government Funding and Grants

Note 3: Tuition Fees

CONSOLIDATED UNIVERSITY

This Year Last Year This Year Last Year

$000 $000 $000 $000

BlockGrants 85,862 86,792 85,862 86,792

AdvisoryServicesGrants 12,928 13,839 12,928 13,839

OtherGrants 1,029 992 1,029 992

Total Government Funding and Grants 99,819 101,623 99,819 101,623

TherearenounfulfilledconditionsorcontingenciesrelatingtotheaboveGovernmentgrants.



$000 $000 $000 $000

GovernmentFundedStudents 44,628 44,182 44,628 44,182

FullCostInternationalStudents 27,372 26,197 27,372 26,197

Total Fees 72,000 70,379 72,000 70,379



Note 4: Other Income



$000 $000 $000 $000

StudentAccommodationandOtherServices 11,300 10,473 11,300 10,473

Rental 767 878 767 901

CarbonDating 595 674 595 674

PrintingandCopyingServices 837 970 837 970

TeachingResourceSales 570 632 570 632

OtherIncome 11,390 13,450 9,045 9,077

Total Other Income 25,459 27,077 23,114 22,727



Note 5: Employee Entitlements



PERSONNEL COSTS $000 $000 $000 $000

EmployeeBenefitExpenses–Academic 76,854 78,734 76,190 78,533

EmployeeBenefitExpenses–General 51,166 50,294 49,074 47,689

MovementinActuarialValuation 1,321 (741) 1,321 (741)

Total Personnel Costs 129,341 128,287 126,585 125,481



EMPLOYEE ENTITLEMENTS $000 $000 $000 $000

StaffAnnualandLongServiceLeaveVested 9,048 9,164 9,048 9,164

SickLeave 7 7 7 7

OtherEmployeeEntitlements 1,636 1,473 1,336 1,086

ActuarialValuationofAnticipatedRetirementGratuitiesandLongServiceLeave

14,875 13,554 14,875 13,554

Total Employee Entitlements 25,566 24,198 25,266 23,811

CurrentPortion 13,318 12,659 13,018 12,272

NonCurrentPortion 12,248 11,539 12,248 11,539

Total Employee Entitlements 25,566 24,198 25,266 23,811



Thepresentvalueoftheretirementobligationsdependsonfactorsthataredeterminedonanactuarialbasisusinganumberof

assumptions.Twokeyassumptionsusedincalculatingthisliabilityincludethediscountrateandthesalaryinflationfactor.Any

changesintheseassumptionswillimpactonthecarryingamountoftheliability.

ExpectedfuturepaymentsarediscountedusingforwarddiscountratesderivedfromtheyieldcurveofNZgovernmentbonds.

Thediscountratesusedmatch,ascloselyaspossibletheestimatedfuturecashoutflows.Thesalaryinflationfactorhasbeen

determinedafterconsideringhistoricalsalaryinflationpatternsandafterobtainingadvicefromanindependentactuary.

Ifthesalaryinflationfactorweretoincreaseordecreaseby1%fromthatused,withallotherfactorsheldconstant,thecarrying

amountofthegratuityliabilitywouldbeanestimated$941,000higher/lower(2013–$844,000).

Ifthediscountratesweretoincreaseordecreaseby1%fromthatused,withallotherfactorsheldconstant,thecarryingamount

ofthegratuityliabilitywouldbeanestimated$934,000lower/higher(2013–$832,000).

TheUniversitymakescontributionstodefinedcontributionplanswhichincludecontributionstoKiwisaver,NZUniversities’

SuperannuationScheme,NationalProvidentFundandtheGovernmentSuperannuationFund.Thefollowingisincludedinthe

EmployeeBenefitExpenses–AcademicandEmployeeBenefitExpensesGeneral:



$000 $000 $000 $000

DefinedContributionPlanEmployerContributions 4,778 4,593 4,778 4,593

EmployeeBenefitExpenses–AcademicandEmployeeBenefitExpenses–Generalalsoincludes$403,971inrestructuringcosts

fortheyearended31December2014(2013–$452,230).



Note 6: Other Costs



$000 $000 $000 $000

AuditFeesforFinancialStatementAudit 194 196 194 194

AuditFeesforAssuranceServices 10 10 10 10

LossonDisposalofPropertyPlantandEquipment 62 38 62 38

ForeignExchange(Gain)/Loss (71) 69 (68) 69

ImpairmentofReceivables 44 (195) (45) (51)

ImpairmentofInvestments - 946 - 946

TravelandAccommodation 4,967 5,886 4,966 5,111

OperatingLeases 3,822 4,048 3,799 4,048

Scholarships 9,583 9,803 9,583 9,622

Hirage 1,129 995 1,129 1,011

RepairsandMaintenance 2,503 2,557 2,503 2,550

TeachingandResearchMaterials 2,608 2,911 2,608 2,691

Utilities 3,869 4,114 3,854 4,101

Otheroperatingexpenses 39,670 41,394 40,767 40,618

Total Other Costs 68,390 72,772 69,362, 70,958

AuditfeesforassuranceserviceswerefortheauditoftheUniversity’sdeclarationtotheMinistryofEducationonthe

Performance-basedResearchFundexternalresearchincome.



Note 7: Investments in Associates and Joint Ventures



$000 $000 $000 $000

ULeisureLimited 1,816 1,717 374 374

LCoNewZealandLimited 162 170 93 93

LigarPolymersLimited 304 - - -

LigarLimitedPartnership 300 - - -

LigarGPLimited - - - -

AduroBiopolymersLimitedPartnership 899 - - -

Total Investments in Associates and Joint Ventures 3,481 1,887 467 467

LigarPolymersLimited,LigarLimitedPartnershipandLigarGPLimitedareassociatesofWaikatoLinkLtd.2014isthefirstyear

thattheseinvestmentsofWaikatoLinkLtdhavebeenclassifiedasassociatesintheUniversity’sconsolidatedaccounts.Aduro

BiopolymersLimitedPartnershipisajointlycontrolledentityofWaikatoLinkLtd.2014isthefirstyearthatthisinvestmentof

WaikatoLinkLtdhasbeenclassifiedasajointlycontrolledentityintheUniversity’sconsolidatedaccounts.

Associates

Ownership Balance Date

U Leisure Limited (previously known as Campus Services Limited)

50% 31December

PrincipalActivity:ProvisionofsportandrecreationfacilitiesandfoodandentertainmentoutletsfortheUniversitystudentsandstaff.

CONSOLIDATED

This Year Last Year

$000 $000

The University’s share of the results of U Leisure Limited is as follows:

Investment in Associate

OpeningBalance 1,717 1,557

Shareofretainedsurplus/(loss) 99 160

Closing Balance 1,816 1,717

Represented by

Share of increase in net assets of associate (Carrying Value)

1,816 1,717



Note 7: Investments in Associates and Joint Ventures continued


LCoNewZealandLimited(LCoNZ) 25% 31December

PrincipalActivity:AconsortiumoffourNewZealanduniversitiesprovidinglibrarysolutionstothoseuniversities.

CONSOLIDATED

This Year Last Year

$000 $000

The University’s share of the results of LCoNZ is as follows:


OpeningBalance 170 616

Shareofretainedsurplus/(loss) (8) (13)

Dividendpaid - (25)

ReturnofCapital - (408)

Closing Balance 162 170

Represented by


162 170




Ligar Polymers Limited 40% 31December

PrincipalActivity:todevelopmolecularlyimprintedpolymerstofilter,extractordetectspecificmoleculesofinterest.

CONSOLIDATED

This Year Last Year

$000 $000

WaikatoLink’s share of the results of Ligar Polymers is as follows


OpeningBalance (4) -

Shareofretainedsurplus/(loss) 308 (4)

Closing Balance 304 (4)

Represented by


304 (4)


Ligar Limited Partnership 20% 30September

PrincipalActivity:todevelopmolecularlyimprintedpolymerstofilter,extractordetectspecificmoleculesofinterest.

CONSOLIDATED

This Year Last Year

$000 $000

WaikatoLink’s share of the results of Ligar Limited Partnership is as follows:


OpeningBalance - -

Investment 300 -

Shareofretainedsurplus/(loss) - -

Closing Balance 300 -

Represented by


300 -



Joint Venture


AduroBiopolymersLimitedPartnership 55% 31March

PrincipalActivity:Todevelopandcommercialisearangeofbiopolymermaterialsforuseinplastics,composites,agriculture,horticulture,manufacturingandconstruction.

CONSOLIDATED

This Year Last Year

$000 $000

WaikatoLink’s share of the results of Aduro Biopolymers Limited Partnership as follows:

Investment in Joint Venture

OpeningBalance 1,151 1,351

Shareofretainedsurplus/(loss) (252) (200)

Closing Balance 899 1,151

Represented by

Share of increase in net assets of Joint Venture (Carrying Value)

899 1,151

Summarised Financial Information of Associates and Joint Ventures.

Assets 9,161 5,287

Liabilities 1,963 1,161

NetAssets 7,198 4,126

Revenue 2,170 4,639

Net Surplus/(Loss) 471 267

ShareofAssociates’andJointVenturessurplus/(loss)

147 147

TheGroup’sassociatesandjointventuresareunlistedentities,accordinglythereisnopublishedpricequotationstodeterminethe

fairvalueoftheinvestments.

Detailsofcontingentliabilitiesarisingfromthegroupinvolvementintheassociatesandjointventuresaredisclosedseparatelyin

note26.

Note 7: Investments in Associates and Joint Ventures continued



Note 8: Equity


Ref This Year Last Year This Year Last Year

GENERAL EQUITY $000 $000 $000 $000

OpeningBalance 218,204 208,031 200,997 191,536

NetSurplus/(Deficit) 11,587 9,694 9,188 9,350

StaffShareOptionsIssued i (667) 724 - -

MinorityInterestShareRepurchase - (80) - -

SurplusattributabletoNon-ControllingInterest

750 (276) - -

Less appropriations of net surplus to:

RestrictedReserves

Prizes,ScholarshipsandTrustFunds (585) (749) (585) (749)

Plus transfers from

Prizes,ScholarshipsandTrustFunds 467 860 467 860

Closing Balance 229,756 218,204 210,067 200,997


Ref This Year Last Year This Year Last Year

OTHER RESERVES $000 $000 $000 $000

AssetRevaluationReserve ii 152,429 131,557 152,429 131,557

RestrictedReserves iii 2,907 2,789 2,907 2,789

Total Other Reserves 155,336 134,346 155,336 134,346

Total Equity before Non-Controlling Interest

385,092 352,550 365,403 335,343

i) Staff Share Options IssuedDuring2013,11AntsAnalyticsLimited,asubsidiaryofWaikatoLink,terminatedtheirshareoptionprogrammeandreplacedit

withanewprogrammethatentitleskeypersonneltopurchasesharesinthecompany.Inaccordancewiththisprogrammeoptions

areexercisableatthemarketpriceofthesharesatthedateofgrant.Allpreviouslyrecognisedexpensesrelatingtotheprior

shareoptionprogrammewerereversedin2013andareincludedinEmployeeBenefitcosts(note5).

During2013,ObodiesLimited,asubsidiaryofWaikatoLink,establishedashareoptionprogrammethatentitledthecompany'skey

scientisttopurchasesharesinthecompany.In2014thekeyscientistceasedhisemploymentwithObodiesLtd.Inresponsethe

employeeshareschemewasterminatedeffectivefrom4July2014.



ii) Asset Revaluation Reserve



$000 $000 $000 $000

OpeningBalance 131,557 131,557 131,557 131,557

Revaluation 20,872 - 20,872 -

Transferondisposalofassets - - - -

NetIncreaseinAssetRevaluationReserve 20,872 - 20,872 -

Closing Balance 152,429 131,557 152,429 131,557

Represented by:

Land

OpeningBalance 730 730 730 730

Revaluation 185 - 185 -

Closing Balance 915 730 915 730

Buildings

OpeningBalance 115,766 115,766 115,766 115,766

Revaluation 21,842 - 21,842 -

Transferondisposalofassets - - - -

Closing Balance 137,608 115,766 137,608 115,766

InfrastructuralAssets

OpeningBalance 15,061 15,061 15,061 15,061

Revaluation (1,155) - (1,155) -

Closing Balance 13,906 15,061 13,096 15,061

Note 8: Equity continued



iii) Restricted ReservesThePrizes,ScholarshipsandTrustFundsReservesrepresentfundsheldbytheUniversityonbehalfofothersandfundsprovided

totheUniversitybyvariouspeopleforspecificpurposes.Revenuereceivedfortheseitemsanddisbursementstoauthorised

recipientsarerecordedintheStatementofComprehensiveIncomeFundbalancesremainingareshownasrestrictedreserves.



PRIZES, SCHOLARSHIPS AND TRUST FUNDS $000 $000 $000 $000

OpeningBalance 2,789 2,900 2,789 2,900

AddappropriationofNetSurplus 585 749 585 749

LessapplicationtoPrizes,ScholarshipsandTrustFunds

(467) (860) (467) (860)

Closing Balance 2,907 2,789 2,907 2,789

Note 9: Cash and Cash Equivalents



$000 $000 $000 $000

Cashatbankandinhand 1,407 883 667 652

Termdepositsmaturingthreemonthsorlessfromdateofacquisition

9,170 4,369 9,100 4000

10,577 5,252 9,767 4,652

Thecarryingvalueofcashatbankandtermdepositswithmaturitydatesofthreemonthsorlessapproximatestheirfairvalue.

Refertonote24forweightedaverageeffectiveinterestrateforcashandcashequivalents.



Note 10: Trade and Other Receivables



$000 $000 $000 $000

TradeReceivables 7,841 11,296 6,463 9,636

StudentFeeReceivables 11,535 12,216 11,535 12,216

ReceivablesfromSubsidiaries - - 72 243

ReceivablesfromRelatedParties 1,908 1,435 239 72

ImpairmentofDebtors (419) (464) (153) (198)

20,865 24,483 18,156 21,969

IncludedinStudentFeeReceivablesis$10.8M(2013–$11.5M)of2015feeswhichhavebeeninvoicedbutarenotdueforpayment

until2015.Alsorefernote18.

Thecarryingvalueofreceivablesapproximatestheirfairvalue.Nointerestischargedontradereceivables.Anallowancehasbeen

madeforestimatedirrecoverableamountsfromdebtors,determinedbyreferencetoindividualdebtors,pastdefaultexperience

andtheageofthedebt.ThemovementforimpairmentisrecognisedintheStatementofComprehensiveIncomeforthecurrent

year(refernote6).

TheUniversityofWaikatodoesnothaveanyreceivablesthatwouldotherwisebepastdue,butnotimpaired,whosetermshave

beenrenegotiated.

Asat31December2014and2013,alloverduereceivableshavebeenassessedforimpairmentandappropriateprovisionsapplied,

asdetailedbelow:

UNIVERSITY

This Year Last Year

Gross Impairment Net Gross Impairment Net

$000 $000 $000 $000 $000 $000

Notpastdue 11,585 - 11,585 13,203 - 13,203

Pastdue1-30days 5,573 - 5,573 6,322 - 6,322

Pastdue31-60days 624 - 624 545 - 545

Pastdue61+days 527 (153) 374 2,097 (198) 1,899

Total 18,309 (153) 18,156 22,167 (198) 21,969



CONSOLIDATED

This Year Last Year

Gross Impairment Net Gross Impairment Net

$000 $000 $000 $000 $000 $000

Notpastdue 13,363 - 13,363 14,587 - 14,587

Pastdue1-30days 5,574 - 5,574 6,322 - 6,322

Pastdue31-60days 624 - 624 566 - 566

Pastdue61+days 1,723 (419) 1,304 3,472 (464) 3,008

Total 21,284 (419) 20,865 24,947 (464) 24,483

Movementsintheprovisionforimpairmentofreceivablesareasfollows:


2014 2013 2014 2013

$000 $000 $000 $000

At1January 464 269 198 249

Provisionsmadeduringtheyear (25) 225 (25) (21)

Receivableswrittenoffduringtheyear (20) (30) (20) (30)

At 31 December 419 464 153 198

TheUniversityholdsnocollateralassecurityorothercreditenhancementsoverreceivablesthatareeitherpastdueorimpaired.

Loans and Other ReceivablesIn2013WaikatoLinkLtdheldanoncurrentreceivableof$30,000.



Note 11: Derivative Financial Instruments



$000 $000 $000 $000

Current Asset Portion

Forwardforeignexchangecontracts 2 - 2 -

Total derivative financial instrument assets 2 - 2 -

Fair ValueThefairvaluesofforwardforeignexchangecontractshavebeendeterminedusingadiscountedcashflowsvaluationtechnique

basedonquotedmarketprices.Theinputsintothevaluationmodelarefromindependentlysourcesmarketparameterssuchas

currencyrates.Mostmarketparametersareimpliedfrominstrumentprices.

ThenotionalprincipalamountofoutstandingforwardforeignexchangecontractsinNZDwas$168,394(2013–$0).Theforeign

currencyprincipalamountwasUSD$130,000.

Note 12: Intercompany Balances



$000 $000 $000 $000

UniversityofWaikatoFoundationTrust - - (50) (7)

UniversityofWaikatoAlumniAssociation - - - (5)

StudentCampusBuildingFundTrust - - (1,559) (1,341)

LCoNewZealandLimited - - (110) (110)

iEngagEdLimited - - 99 (25)

WaikatoLinkLimited - - 8,516 8,516

UniversityofWaikatoResearchTrust - - (13,511) (14,230)

Total Intercompany Balances - - (6,615) (7,202)



Note 13: Other Financial Assets



OTHER FINANCIAL ASSETS – CURRENT $000 $000 $000 $000

TermDepositswithmaturitiesof4-12months 23,213 14,357 22,014 14,000

EndowmentPortfolio(CIP) 2,129 1,760 - -

Total Other Financial Assets 25,342 16,117 22,014 14,000

INVESTMENT INCOME

Interest 1,931 1,667 1,775 1,549

Dividends 91 3 32 142

Gains/(Losses)onEquityInvestments 92 (16) - -

Total Investment Income 2,114 1,654 1,807 1,690

TheweightedaverageeffectiveinterestratesontermdepositsaredisclosedinNote24:FinancialInstruments.Termdepositsare

valuedatamortisedcostusingtheeffectiveinterestmethod.

TheendowmentportfolioismanagedbyCraigsInvestmentPartners(CIP),equitiesandfixedinterestinvestmentswithinthe

portfolioarevaluedusingquotedmarketprice,thebalanceoftheportfolioisvaluedatamortisedcostusingtheeffectiveinterest

method.Seenote24.

Therewasnoimpairmentprovisionforinvestments.

TheintercompanybalancesareacumulativerecordofthetransactionsbetweentheUniversityanditssubsidiaries.

Allintercompanycurrentaccountsareclassifiedascurrent.TheUniversityofWaikatoResearchTrustloanhasbeenreclassified

fromnon-currenttocurrentinthe2014accountsasitisdeemedappropriateinlinewiththenatureofthearrangementsofthe

Trust.ThisreclassificationissupportedbyadvicereceivedfromPwC,CharteredAccountants.

Intercompanybalancesareunsecured,non-interestbearing,andarerepayableondemand.Thefairvalueoftheondemand

accountscannotbelessthantheamountrepayableondemand.Therefore,thecarryingvalueoftheaccountsondemandreflects

theirfairvalue.

Asat31December2014theUniversityhadadvancedtoWaikatoLinkLtdatotalof$8,516,215bywayofshareholderloan.Theloan

isinterestfreeandrepayableondemand.TheUniversityhasundertakennottodemandrepaymentuntilWaikatoLinkhassufficient

freecashavailabletomakerepayments.



Note 14: Inventories

Note 15: Investments



$000 $000 $000 $000

HeldforSale 257 293 257 293

HeldforDistribution/Use 757 777 757 777

1,014 1,070 1,014 1,070

Noinventoriesarepledgedassecurityforliabilitiesorsubjecttoretentionoftitleclauses(2013–$nil).

$1kofstockheldforsalewaswrittendownforobsolescencein2014(2013–$nil).



STRATEGIC INVESTMENTS $000 $000 $000 $000

NZSynchrotronGroupLimited 198 198 198 198

TitanoxDevelopmentLimited 205 205 - -

INVESTMENTS IN SUBSIDIARIES

WaikatoLinkLimited - - 2,000 2,000

403 403 2,198 2,198

Investmentsinunlistedentities,andsubsidiariesabovearecarriedatcostlessimpairmentaseitherthefairvalueofthe

investmentcannotbereliablydeterminedusingastandardisedvaluationtechniqueorduetocostnotbeingmaterially

differenttofairvalue.



Note 16: Intangible Assets


Software Purchased

Software Internally

Generated

Non Software Development

Costs

Consolidated Total

Software Purchased

Software Internally Generated

University Total

THIS YEAR $000 $000 $000 $000 $000 $000 $000

Opening Balance at 1 January 2014

Cost 19,181 925 11,858 31,964 19,166 925 20,091

AccumulatedAmortisationandImpairment

(13,090) (846) (5,225) (19,161) (13,075) (846) (13,921)

Opening Carrying Amount

6,091 79 6,633 12,803 6,091 79 6,170

Year Ended 31 December 2014

Additions 904 - 464 1,368 904 - 904

Disposals - - (625) (625) - - -

AmortisationandImpairmentCharge

(1,344) (60) (671) (2,075) (1,344) (60) (1,404)

Closing Carrying Amount

5,651 19 5,801 11,471 5,651 19 5,670

Closing Balance at 31 December 2014

Cost 20,085 925 11,697 32,707 20,070 925 20,995


(14,434) (906) (5,896) (21,236) (14,419) (906) (15,325)


5,651 19 5,801 11,471 5,651 19 5,670

LAST YEAR $000 $000 $000 $000 $000 $000 $000

Opening Balance at 1 January 2013

Cost 17,614 925 11,537 30,076 17,599 925 18,524


(12,110) (770) (4,913) (17,793) (12,095) (770) (12,865)

Opening Carrying Amount

5,504 155 6,624 12,283 5,504 155 5,659



Note 16: Intangible Assets continued


Software Purchased

Software Internally

Generated

Non Software Development

Costs

Consolidated Total

Software Purchased

Software Internally Generated

University Total

LAST YEAR $000 $000 $000 $000 $000 $000 $000

Year Ended 31 December 2013

Additions 1,567 - 321 1,888 1,567 - 1,567

Disposals - - - - - - -

AmortisationandImpairmentCharge

(980) (76) (312) (1,368) (980) (76) (1,056)


6,091 79 6,633 12,803 6,091 79 6,170

Closing Balance at 31 December 2013

Cost 19,181 925 11,858 31,964 19,166 925 20,091


(13,090) (846) (5,225) (19,161) (13,075) (846) (13,921)


6,091 79 6,633 12,803 6,091 79 6,170

Non Software Development CostsCostincurredondevelopmentofprojects(relatingtothedesignandtestingofneworimprovedproducts)arerecognised

asassetswhenthefollowingcriteriahavebeenfulfilled:

» Itistechnicallyfeasibletocompletetheintangibleassetanduseorsellit;

» Managementintendstocompletetheintangibleassetanduseorsellit;

» Thereisanabilitytouseorselltheintangibleasset;

» Itcanbedemonstratedhowtheintangibleassetwillgenerateprobablefutureeconomicbenefit;

» Adequatetechnical,financialandotherresourcestocompletethedevelopmentandtouseorselltheintangibleassetareavailable;and

» Theexpenditureattributabletotheintangibleassetduringitsdevelopmentcanbereliablymeasured.

Theamountofintangibleassetsthatareworkinprogressfornonsoftwaredevelopmentis$2,924,000(2013–$2,574,000)

Theamountofintangibleassetsthatareworkinprogressforsoftwarepurchasedis$1,597,000(2013–$1,381,000)

TherearenorestrictionsoverthetitleoftheUniversity’sintangibleassets,norareanyintangibleassetspledgedassecurityforliabilities.



Note 17: Property, Plant and Equipment for University and Consolidated

CONSOLIDATED

THIS YEAR

$000 $000 $000 $000 $000 $000 $000 $000 $000 $000 $000

Land 1,765 - 1,765 - - - - 185 1,950 - 1,950


26,000 (1,427) 24,573 1,587 - - (753) (1,155) 24,252 - 24,252

Buildings 290,147 (18,607) 271,540 6,004 - - (9,830) 21,842 289,556 - 289,556

LeaseholdBuildingImprovements

1,704 (1,158) 546 17 - - (66) - 1,721 (1,224) 497

LibraryCollection 67,054 (38,714) 28,340 3,512 - - (2,641) - 70,565 (41,354) 29,211

PlantandEquipment 45,827 (31,850) 13,977 3,429 (1,366) - (2,378) - 46,695 (33,033) 13,662

ComputerEquipment 30,131 (23,071) 7,060 2,711 (779) - (2,488) - 31,287 (24,783) 6,504

ArtCollection 643 - 643 461 - - - - 1,104 - 1,104

MotorVehicles 4,437 (2,181) 2,256 1,142 (852) - (497) - 4,125 (2,076) 2,049

WorkinProgress 5,180 - 5,180 6,217 - - - - 11,397 - 11,397

Total 472,888 (117,008) 355,880 25,080 (2,997) - (18,653) 20,872 482,652 (102,470) 380,182

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Note 17: Property, Plant and Equipment for University and Consolidated continued

CONSOLIDATED

LAST YEAR

$000 $000 $000 $000 $000 $000 $000 $000 $000 $000 $000

Land 1,765 - 1,765 - - - - - 1,765 - 1,765


24,736 (702) 24,034 1,264 - - (725) - 26,000 (1,427) 24,573

Buildings 269,985 (9,056) 260,929 20,162 - - (9,551) - 290,147 (18,607) 271,540

LeaseholdBuildingImprovements

2,592 (1,977) 615 926 (923) - (73) - 1,704 (1,158) 546

LibraryCollection 63,657 (36,164) 27,493 3,397 - - (2,550) - 67,054 (38,714) 28,340

PlantandEquipment 43,095 (29,335) 13,760 2,888 (127) - (2,543) - 45,827 (31,850) 13,977

ComputerEquipment 28,547 (21,525) 7,022 3,653 (1,038) - (2,577) - 30,131 (23,071) 7,060

ArtCollection 465 - 465 178 - - - - 643 - 643

MotorVehicles 4,188 (1,950) 2,238 930 (380) - (531) - 4,437 (2,181) 2,256

WorkinProgress 13,745 - 13,745 (8,565) - - - - 5,180 - 5,180

Total 452,775 (100,709) 352,066 24,833 (2,468) - (18,550) - 472,888 (117,008) 355,880

The$11,000(2013–$43,000)differencebetweentheProperty,PlantandEquipmentCarryingamount,representedintheBalance

SheetfortheUniversityascomparedtothevalueunderConsolidated,istheProperty,PlantandEquipmentheldbyTheUniversityof

WaikatoFoundationof$0(2013–$0)andWaikatoLinkLimitedof$11,000(2013–$43,000).

Land and Buildings Specialisedbuildings(egcampuses)arevaluedatfairvalueusingoptimiseddepreciatedreplacementcostbecausenoreliable

marketdataisavailableforbuildingsdesignedforeducationdeliverypurposes.

Depreciatedreplacementcostisdeterminedusinganumberofsignificantassumptions.Significantassumptionsinclude:

» Thereplacementassetisbasedonthereproductioncostofthespecificassetswithadjustmentswhereappropriateforobsolescenceduetoover-designorsurpluscapacity.

» ThereplacementcostsisderivedfromrecentconstructioncontractsofsimilarassetsandPropertyInstituteofNewZealandcostinformation.

» Theremainingusefullifeofassetsisestimated.

» Straight-linedepreciationhasbeenappliedindeterminingthedepreciatedreplacementcostvalueoftheasset.

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$000 $000 $000 $000

ResearchIncome 6,787 5,766 6,787 5,766

Commercial 497 443 490 424

TuitionFees 23,183 20,499 23,183 20,499

Total Income in Advance 30,467 26,708 30,460 26,689

Includedintuitionfeesis$10.8M(2013–$11.4M)of2015feeswhichhavebeeninvoicedbutarenotdueforpaymentuntil2015.

Alsorefernote10.

Note 18: Income in Advance

Non-specialisedbuildingandlandarevaluedatfairvalueusingmarket-basedevidence.Marketrentsandcapitalisationrateswere

appliedtoreflectmarketvalue.

LandandBuildingswererevaluedasat31December2014byDarrochValuationsLimited(RegisteredValuers),onafairvalue

basis.ThetotalfairvalueofLandandBuildingsvaluedbyDarrochValuationsLtdat31December2014was$291,506,471.

InaccordancewiththelandleaseagreementwithTainuiGroupHoldingsLimitedtheUniversityisabletosubletupto25%ofthe

grossfloorareaofthebuildings.

InfrastructureInfrastructureassetssuchasroads,carparks,footpaths,undergroundutilites(egwatersupplyandseweragesystems),andsite

drainagehavebeenindependentlyvaluedatOptimiseddepreciatedreplacementcost.Thevaluationshavebeenperformedin

accordancewiththeNewZealandValuationandDepreciationGuidelinesissuedbytheNAMSGroup.Thesignificantassumptions

appliedindeterminingthedepreciatedreplacementcostofinfrastructureassetsaresimilartothosedescribedabovefor

specialisedbuildings.

InfrastructuralAssetswererevaluedasat31December2014byOpusInternationalConsultantsLimitedonafairvaluebasis.

ThetotalfairvalueofinfrastructurevaluedbyOpusat31December2014was$24,252,000.

ThenetcarryingamountofProperty,Plantandequipmentheldunderfinanceleasesis$1,762,251(2013–$1,813,238).

Restrictions on titleUndertheEducationAct1989,theUniversityandgroupisrequiredtoobtaintheconsentfromtheMinistryofEducationto

disposeorsellofpropertywherethevalueofthepropertyexceedsanamount.



Note 20: Borrowings



$000 $000 $000 $000

OpeningBalance 1,329 1,333 1,329 1,333

LessBorrowingsRepaid (3) (4) (3) (4)

Closing Balance 1,326 1,329 1,326 1,329

CurrentPortion–FinanceLease 4 3 4 3

NonCurrentPortion–FinanceLease 1,322 1,326 1,322 1,326

1,326 1,329 1,326 1,329

TheFinanceleasewasfairvaluedatinceptionusingadiscountrateof12.07%.

Note 19: Trade and Other Payables



$000 $000 $000 $000

TradePayables 5,582 5,021 7,696 6,588

PayablestoRelatedParties(seenote25) 1,734 1,669 50 334

GSTPayable 3,909 3,923 3,499 3,806

Accruals 3,847 6,903 3,315 6,371

Trade and Other Payables 15,072 17,516 14,560 17,099

Tradepayablesandotherpayablesarenon-interestbearingandarenormallysettledon30-dayterms,thereforethecarryingvalueof

tradepayablesandotherpayablesapproximatestheirfairvalue.



Finance lease(a) Leasing arrangements

TheFinanceleaserelatestoUniversitybuildingswhichbecomethepropertyoftheUniversityattheconclusionofthelease

termin2046.

(b) Finance lease liabilities

Minimum Future Lease Payments

Present Value of Minimum Future Lease Payments

CONSOLIDATED UNIVERSITY CONSOLIDATED UNIVERSITY

This Year

Last Year

This Year

Last Year

This Year

Last Year

This Year

Last Year

$000 $000 $000 $000 $000 $000 $000 $000

Nolaterthan1year 164 164 164 164 154 154 154 154

Between1and5years 655 655 655 655 459 459 459 459

Laterthan5years 4,370 4,534 4,370 4,534 713 716 713 716

MinimumLeasePayments 5,189 5,353 5,189 5,353 1,326 1,329 1,326 1,329

Lessfuturefinancecharges (3,863) (4,024) (3,863) (4,024) - - - -

Present value of minimum lease payments

1,326 1,329 1,326 1,329 1,326 1,329 1,326 1,329



Note 21: Reconciliation of the Net Surplus/(Deficit) to the Net Cash Flows from Operating Activities



$000 $000 $000 $000

NetSurplus/(Deficit) 11,587 9,694 9,188 9,350

Add/(Less) Non Cash Items:

DepreciationandAmortisation 20,727 20,193 20,045 19,610

Increase/(Decrease)inTermPortionofEmployeeEntitlements

708 (356) 708 (356)

LossonDisposalofPPE 62 19 62 -

IntercompanyAccounts - - (584) 115

NonCashAdvancefromAssociates (300) - - -

MovementinDeferredIncome 12 - - -

IssueofEmployeeShareOptions (2) 44 - -

InterestAccrued (23) - - -

Associates (91) (147) - -

Other (159) 3 - -

20,934 19,756 20,231 19,369

Add/(Less) Movements in Other Working Capital Items:

(Increase)/DecreaseinTradeandOtherReceivables 3,648 (3,900) 3,813 (3,640)

Increase/(Decrease)inTradeandOtherPayables (2,455) (1,109) (2,539) (897)

(Increase)/DecreaseinInventories 56 (50) 57 (50)

Increase/(Decrease)inIncomeinAdvance 3,771 (615) 3,771 (563)

Increase/(Decrease)inEmployeeEntitlements 659 (74) 746 (92)

(Increase)/DecreaseinPrepayments 940 247 940 247

6,619 (5,501) 6,788 (4,995)





$000 $000 $000 $000

Add/(Less) Items Classified as Investing and Financing Activities:

LongTermInvestment 474 - - -

CapitalGainonSaleofInvestment (186) - - -

EquityDistributionfromSubsidiary - 248 - -

AssociateLossesRecognised 147 41 - -

WaikatoLinkEquityAdjustment - (80) - -

CashDividendfromSubsidiary - - (32) (142)

435 209 (32) (142)

Net Cash Flow from Operating Activities 39,575 24,158 36,175 23,582

Note 22: Key Mananagement Personnel Compensation

ThecompensationofthemembersofCouncil,andemployeesreportingdirectlytotheVice-Chancellor,beingthekeymanagement

personneloftheentity,issetoutbelow:

UNIVERSITY

This Year Last Year

$ $

Short-TermEmployeeBenefits 4,217,502 3,741,659

CouncillorRemuneration 78,892 71,950

Post-EmploymentBenefits 153,684 157,287

TerminationPayments - -

Total 4,450,078 3,970,896



Note 23: Leases

Operating Leases as Leasee(a) Leasing Arrangements

FINAL EXPIRY 2014 ACTUAL COMMENTARY

PROPERTY LEASES $000

Waikato-TainuiCampusLand Inperpetuity 1,462 Subjecttoleasecondition

TaurangaCampus 2015to2025 596 8SeparateLeases

RuakuraSatelliteCampus 2015to2029 212 2SeparateLeases

OtherHamiltonLeases 2015to2034 302 5Leases

Other 2015to2022 127 6Leases

EQUIPMENT LEASES 2015to2017 1,099 3Leases

Total 3,799

TheUniversityleasesthelandfortheHamiltoncampusfromTainuiGroupHoldingsLimited.Theuseofthislandisrestricted

totertiaryeducation,researchoranyotheractivitypermittedbytherulesoftheRegionalandDistrictplansorbyaResource

Consent.TheUniversitymaysubletupto25%ofthelandforperiodsofnolongerthan10years.

TheUniversityhasenteredintoaMasterLeaseagreementwithaFinancierforthefinancingofindividualstudenttechnology

equipment.TheUniversityisindemnifiedagainstanydefaultpaymentsoranybreachofanycovenantbyastudenttorepair

ortoreturntheEquipmenttotheLessor.

TTheUniversityhasenteredintoaprepaidleaseagreement.Thefutureaggregateminimumleasepaymentsunderthenon-

cancellableoperatingleaseare$150,000notlongerthan1year,$262,500longerthan1yearandnotlongerthan5years,andnil

longerthan5years.TheseamountswillbeexpensedthroughtheStatementofComprehensiveIncomeintherelevantperiods.

Thefutureaggregateminimumleasepaymentspayableundernon-cancellableoperatingleaseareasfollows:

(b) Non-Cancellable Operating Lease Payments



$000 $000 $000 $000

Notlongerthan1year 3,245 2,805 3,245 2,805

Longerthan1yearandnotlongerthan5years 8,469 7,043 8,469 7,043

Longerthan5years 42,552 43,358 42,552 43,358

54,266 53,206 54,266 53,206



(c) Sub-leases

Thetotalminimumfuturereceiptsthattheuniversityexpectstoreceivefromitstenantsonleasedlandis$7.6M,(2013$7.9M).

Theminimumrenewalperiodsrangefrom1to32years.

Lessor Disclosures

Operating Leases as Lessor(a) Leasing Arrangements (Receivables)

Operatingleasesrelatetoshopsoncampus,campuslandandresidentialpremisesadjacenttotheUniversity.Leasetermsarefor

termsofbetween5monthsand49yearswithvariousoptionstorenew.Thelesseesdonothavetheoptiontopurchaseatthe

expiryoftheleaseperiod.

Thefutureaggregateminimumleasepaymentstobecollectedundernon-cancellableoperatingleasesareasfollows:

(b) Non-Cancellable Operating Lease Receivables



$000 $000 $000 $000

Notlongerthan1year 475 634 475 634

Longerthan1yearandnotlongerthan5years 1,533 1,513 1,533 1,513

Longerthanfiveyears 5,992 6,304 5,992 6,304

8,000 8,451 8,000 8,451

NocontingentrentshavebeenrecognisedintheStatementofComprehensiveIncome.



Note 24: Financial Instruments

24A: Financial Instrument CategoriesTheaccountingpoliciesforfinancialinstrumentshavebeenappliedtothelineitemsbelow:



FINANCIAL ASSETS $000 $000 $000 $000

Fair value through surplus or deficit

Held for trading

ForwardForeignExchangeContracts 2 - 2 -

NewZealandEquities 571 398 - -

AustralianEquities 424 228 - -

OtherOffshoreEquities 456 249 - -

FixedInterestInstruments 162 46 - -

Totalheldfortrading 1615 921 2 -

Loans and Receivables

CashandCashEquivalents 10,577 5,252 9,767 4,652

TradeandOtherReceivables 20,865 24,483 18,156 21,969

InterCompanyBalances - - 6,896 7,028

OtherFinancialAssets 23,729 16,025 22,014 14,000

InvestmentsinAssociatesandJointVentures 3,481 1,887 467 467

Investments 403 403 2,198 2,198

TotalLoansandReceivables 59,055 48,050 59,498 50,314

FINANCIAL LIABILITIES

Fair value through surplus or deficit

Financial Liabilities at Amortised Cost

TradeandOtherPayables 11,163 13,593 11,061 13,293

UniversityofWaikatoResearchTrustPayable - - 13,511 14,230

Total Financial Liabilities at Amortised Cost 11,163 13,593 24,572 27,523



24B: Fair Value Hierarchy DisclosuresForthoseinstrumentsrecognisedatfairvalueontheBalanceSheet,fairvaluesaredeterminedaccordingtothe

followinghierarchy:

» Quotedmarketprice–Financialinstrumentswithquotedpricesforidenticalinstrumentsinactivemarkets.

» Valuationtechniqueusingobservableinputs–Financialinstrumentswithquotedpricesforsimilarinstrumentsinactivemarketsorquotedpricesforidenticalorsimilarinstrumentsininactivemarketsandfinancialinstrumentsvaluedusingmodelswhereallsignificantinputsareobservable.

» Valuationtechniqueswithsignificantnon-observableinputs–Financialinstrumentsvaluedusingmodelswhereoneormoresignificantinputsarenotobservable.

TheUniversityandGroupcurrentlyhas$2K(2013–$0K)offorwardforeignexchangecontracts,$1,451K(2013–$875K)of

equitiesand$162K(2013–$46K)offixedinterestinstrumentsmeasuredatfairvalueontheBalanceSheet.(seenotes11and13).

24C: Financial Instrument RisksTheUniversity’sactivitiesexposeittoavarietyoffinancialinstrumentrisks,includingmarketrisk,creditriskandliquidityrisk.

TheUniversityhasaseriesofpoliciestomanagetherisksassociatedwithfinancialinstrumentsandseekstominimiseexposure

fromfinancialinstruments.Thesepoliciesdonotallowanytransactionsthatarespeculativeinnaturetobeenteredinto.

Market risk

Theeffectiveinterestratesoninvestmentsrangefrom3.53%to4.70%(2013–3.60%to4.30%).Therewasafinancelease

recognisedin2006withaneffectiveinterestrateof12.07%in2014.(2013–12.07%).Therewerenotermloansfor2014

(2013–none).

Fair Value Interest Rate Risk

TheestimatedfairvalueoftheUniversity’sfinancialinstrumentsareequivalenttotheircarryingamountsinthefinancial

statements.TheUniversity’sexposuretofairvalueinterestrateriskislimitedtoitsbankdepositswhichareheldatfixedrates

ofinterest,andafinancelease.

Cash Flow Interest Rate Risk

Cashflowinterestrateriskistheriskthatthecashflowsfromafinancialinstrumentwillfluctuatebecauseofchangesinmarket

interestrates.InvestmentsissuedatvariableinterestratesexposetheUniversitytocashflowinterestraterisk.

TheUniversityholdsamixtureoffixedrateandfloatingcallratedeposits.At31DecembertheUniversityhad$9.1M

(2013–$4.0M)investedinvariableratedepositsandthebalanceinfixedratedeposits.

Sensitivity analysis

Thetablesoppositeillustratethepotentialeffectonthesurplusordeficitandequity(excludinggeneralfunds)forreasonably

possiblemarketmovements,withallothervariablesheldconstant,basedonfinancialinstrumentexposuresatbalancedate.



Note 24: Financial Instruments continued

INTEREST RATE RISK

University This Year Last Year

Instrument +100bps -100bps +100bps -100bps

$000 $000 $000 $000

Variableratedeposits 91 (91) 40 (40)

Consolidated This Year Last Year

Instrument +100bps -100bps +100bps -100bps

$000 $000 $000 $000

Variableratedeposits 99 (99) 43 (43)

CURRENCY RISK


InstrumentsheldinUSD +10% -10% +10% -10%

$000 $000 $000 $000

Creditors 93 (113) 3 (4)

Debtors - - (2) 2

USdollaraccount (59) 69 (29) 35


InstrumentsheldinUSD +10% -10% +10% -10%

$000 $000 $000 $000

Creditors 95 (116) 4 (5)

Debtors (2) 3 (5) 6

USdollaraccount (59) 73 (29) 35

Equities (28) 35 (12) 14



CURRENCY RISK continued


InstrumentsheldinAUD +10% -10% +10% -10%

$000 $000 $000 $000

Creditors 17 21 - -

Debtors - - - -

AUDdollaraccount (2) 2 (7) 8


InstrumentsheldinAUD +10% -10% +10% -10%

$000 $000 $000 $000

Creditors 17 (21) - -

Debtors - - (1) 2

AUDdollaraccount (2) 2 (7) 8

Equities (39) 48 (21) 26

University and Consolidated This Year Last Year

InstrumentsheldinEUR +10% -10% +10% -10%

$000 $000 $000 $000

Creditors 1 (2) - -

Debtors - - - -

University and Consolidated This Year Last Year

InstrumentsheldinGBP +10% -10% +10% -10%

$000 $000 $000 $000

Creditors 6 (8) 2 (2)

GBPAccount (1) 2 (1) 2

Equities (32) 39 (19) 24

Explanation of interest rate risk sensitivity

Theinterestratesensitivityisbasedonareasonablepossiblemovementininterestrate,withallothervariablesheldconstant,measuredasabasispoints(BPS)movement.Forexampleadecreasein100bpsisequivalenttoadecreaseininterestratesof1%.

Explanation of currency risk sensitivityTheforeignexchangesensitivityisbasedonareasonablepossiblemovementinforeignexchangerates,withallothervariablesheldconstant,measuredasapercentagemovementintheforeignexchangerate.



Note 24: Financial Instruments continued

Credit RiskCreditriskistheriskthatathirdpartywilldefaultonitsobligationtotheUniversitycausingtheUniversitytoincuraloss.

FinancialinstrumentswhichpotentiallysubjecttheUniversitytocreditriskprincipallyconsistofbankbalances,intercompanybalancesandaccountsreceivable.CreditriskinrespectofbankandshorttermdepositsisreducedbyspreadingdepositsovermajorNewZealandregisteredtradingbankswithminimumS&PlongtermcreditratingofA+orminimumMoody’sInvestorslongterm

creditratingofA.Receivablesareunsecured,butaresubjecttocreditcontrol.Nocollateralisheld.

Credit quality of financial assets

ThecreditqualityoffinancialassetsthatareneitherpastduenorimpairedcanbeassessedbyreferencetoStandardandPoor’scredit

ratings(ifavailable)ortohistoricalinformationaboutcounterpartydefaultrates:



COUNTERPARTIES WITH CREDIT RATINGS $000 $000 $000 $000

Cash at Bank and Term Deposits

AA- 35,919 21,370 31,781 18,652

COUNTERPARTIES WITHOUT CREDIT RATINGS

Debtors and Other Receivables

Existingcounterpartywithnodefaultsinthepast 20,865 24,483 18,156 21,969

Existingcounterpartywithdefaultsinthepast - - - -

Total debtors and other receivables 20,865 24,483 18,156 21,969

LOANS TO RELATED PARTIES

Existingcounterpartywithnodefaultsinthepast - - 6,896 7,028

Existingcounterpartywithdefaultsinthepast - - - -

Total loans to related parties - - 6,896 7,028

Liquidity RiskLiquidityriskistheriskthattheUniversitywillencounterdifficultyraisingliquidfundstomeetcommitmentsastheyfalldue.Prudentliquidityriskmanagementimpliesmaintainingsufficientcash,theavailabilityoffundingthroughanadequateamountofcommittedcreditfacilities.

TheUniversityisexpectedtomaintaincombinedcashreservesandcommittedcreditlinesavailabletoaminimumof120%oftheforecastpeakfundingrequirementsatanyonepointoftimeinthefollowing12monthperiod.ThetablebelowanalysestheUniversity’sfinancialliabilitiesintorelevantmaturitygroupingsbasedontheremainingperiodattheBalanceSheetdatetothecontractualmaturitydate.Theamountsdisclosedarethecontractualundiscountedcashflows.



UNIVERSITY

Less than 6 months

Between 6 months

and 1 year

Between 1 and 5 years

ThisYear $000 $000 $000

Creditorsandotherpayables 11,061 - -

Borrowings 82 82 655

CurrentEmployeeEntitlements 2,649 1,314 -

LastYear $000 $000 $000



CurrentEmployeeEntitlements 2,094 1,008 0

CONSOLIDATED

Less than 6 months

Between 6 months

and 1 year

Between 1 and 5 years

ThisYear $000 $000 $000




LastYear $000 $000 $000






Note 25: Related Party Transactions

ThefollowingrelatedpartytransactionsoccurredbetweentheUniversityandWaikatoLinkLimited,ULeisureLimited(ULL)andtheir

subsidiaryBoathouseEventsLimited(Boathouse),TheUniversityofWaikatoFoundation(Foundation),TheStudents’CampusBuilding

FundTrust(SCBFT),LCoNewZealandLimited(LCoNZ),TheUniversityofWaikatoAlumniAssociationIncorporated(Alumni)(No

relatedpartytransactionsfor2013or2014),UniversityofWaikatoResearchTrust(UoWRT)andiEngagEdLimited,duringtheyear:

WaikatoLink ULL Boathouse Foundation SCBFT LCoNZ UoW RT iEngagEd

$ $ $ $ $ $ $ $

Paymentsin2014to: 1,750,000 752,016 96,500 - 28,339 31,203 1,393,000 752,699

(2013) 2,245,368 713,466 75,000 - 1,844 419,727 1,349,000 105,870

Receiptsin2014from:

117,459 281,768 3,418 726,894 246,309 - 19,857 -

(2013) 280,220 268,117 798 783,775 237,328 433,031 83,452 -

AccountsReceivableat31December2014owingfrom:

8,587,825 31,010 - - - - - 98,645

(2013) 8,686,851 47,399 - - - 17,000 - -

AccountsPayableat31December2014owingto:

- - - 49,824 1,559,153 - 13,467,000 -

(2013) 63,405 - - 11,308 1,341,182 233,574 14,229,000 25,491

Significant Transactions with Government-related EntitiesThegovernmentinfluencestherolesoftheUniversityaswellasbeingamajorsourceofrevenue.TheUniversityhasreceivedfunding

andgrantsfromtheTertiaryEducationCommissiontotalling$87.082M(2013–$87,822M)toprovideeducationandresearchservices

fortheyearended31December2014.TheUniversityalsoreceivesresearchfundingfromtheMinistryofBusiness,Innovationand

Employmenttotalling$10.1M(2013–$11.18M).TheUniversityreceivedfundingfromtheMinistryofEducationtotalling$21.7M

(2013–$15.2M)toprovideschoolsupportservices.TheUniversitypurchaseddomesticandinternationaltravelfromAirNewZealand

totalling$1.68M(2013–$1.80M).TheUniversityreceivedincomefromWINTECtotalling$1.29M(2013–$1.16M)fortheprovisionof

teachingservices.TheUniversitymadepaymentstoBayofPlentyPolytechnic(BOPP)totalling$1.53M(2013–$1.61M)tofacilitate

UniversityteachingintheBayofPlenty.TheUniversityalsosuppliedservicestotalling$127K(2013–$149K)toBOPP.



Collectively, but not individually, significant transactions with Government-related Entities.Inconductingitsactivities,theUniversityisrequiredtopayvarioustaxesandlevies(suchasGST,PAYEandACClevies)tothe

CrownandentitiesrelatedtotheCrown.Thepaymentofthesetaxesandleviesisbasedonthestandardtermsandconditions

thatapplytoalltaxandlevypayers.TheUniversityisexemptfrompayingincometax.TheUniversitypurchasesgoodand

servicesfromentitiesrelatedtotheCrownanditalsoprovidesservicestoentitiesrelatedtotheCrown.Thepurchaseand

provisionofgoodsandservicestogovernmentrelatedentitesfortheyearended31December2014aresmallwhencomparedto

theUniversity’stotalexpenditureandrevenueandhaveallbeenconductedonanarms’lengthbasis.Thepurchaseofgoodsand

servicesincludedthepurchaseofelectricityfromMercuryEnergy,airtravelfromAirNewZealand,andpostalservicesfromNew

ZealandPost.Theprovisionofservicestogovernment-relatedentitiesmainlyrelatedtotheprovisionofeducationalcourses.

Key Management PersonnelTheUniversityhasdefinedkeymanagementpersonnelasalldirectreportstotheVice-Chancellor,andmembersofCouncil.

TherearesomeclosefamilymembersofkeymanagementpersonnelemployedbytheUniversityandsomeenrolledasstudents.

ThetermsandconditionsofthosearrangementsarenomorefavourablethantheUniversitywouldhaveadoptediftherewere

norelationshiptokeymanagementpersonnel.KeyManagementPersonnel,andtheirclosefamilymembers,havealsohadthe

followingspecifictransactionswiththeUniversity:

1. AmemberofCouncilisadirectorofAduroGPLtd.DuringtheyeartheUniversityprovidedservicestotalling$51,642(2013–$2,701)andthebalanceowingatyearendwas$5,195(2013–$0).

2. TheUniversityreceivesvariousdonations,researchrevenueandconsultancyfeesfromGallagherGroupLtdandGallagherCharitableTrust,inwhichamemberofCouncilisadirector.Thesetotalled$172,656(2013–$164,172).Thebalanceoutstandingatyearendwas$0(2013–$0).

3. AmemberofCouncilisadirectorofTheNewZealandInstituteforPlantandFoodResearchLtd.DuringtheyeartheUniversityprovidedservicestotalling$24,327(2013–$22,538)andthebalanceowingatyearendwas$1,840(2013–$0).

4. AmemberofCouncilisadirectorofNewZealandVeterinaryPathologyLtd.DuringtheyeartheUniversityreceivedservicestotalling$592(2013–$431)andthebalanceowingatyearendwas$0(2013–$0).

5. AmemberofCouncilisCEOofTainuiGroupHoldings.DuringtheyeartheUniversityleasedpropertyfromTainuiHoldingstotalling$1,452,459(2013–$1,565,401)andthebalanceowingatyearendwas$0(2013–$0).DuringtheyeartheUniversityalsoreceived$1,167,001(2013–$0)andthebalanceowingatyearendwas$0(2013–$0).

6. AmemberofCouncilisadirectorofTeRunanganuiONgatiPorou.DuringtheyeartheUniversityprovidedservicestotalling$0(2013–$2,430)andthebalanceowingatyearendwas$0(2013–$0).TheUniversityalsopurchasedservicesfromTeRunangauiONgatiPoroutotalling$1,822(2013–$1,122),thebalanceoutstandingatyearendwas$0(2013–$0).

7. AmemberofCouncilisadvisertotheCEOofTeWānangaoAotearoa.DuringtheyeartheUniversityprovidedservicestotalling$17,643(2013:$81,944)andthebalanceoutstandingatyearendwas$0.TheUniversityalsopurchasedservicestotalling$800(2013–$2,317),thebalanceoutstandingatyearendwas$0.

8. AdirectreportoftheVice-ChancellorisadirectorofCognitionEducationLtd.DuringtheyeartheUniversityprovidedservicestoCognitionfor$1,881,440(2013–$1,665,704)andthebalanceowingatyearendwas$200,888(2013–$0).TheUniversityalsopurchasedservicestotalling$1,478,986(2013–$332,613)fromCognitionEducationLtdandthebalanceowingatyearendwas$133,939(2013–$99,465).

9. AdirectreportoftheVice-ChancellorisadirectorofHamilton&WaikatoTourismLimited.TheUniversitypurchasedservicestotalling$600(2013–$690)duringtheyearfromHamilton&WaikatoTourismLimitedandsuppliedservicestotalling$1,511(2013–$200).Therewerenooutstandingbalancesatyearend.



10. AdirectreportoftheVice-ChancellorisadirectorofPriorityOne.DuringtheyeartheUniversityprovidedservicestoPriorityOnefor$5,200(2013–$10,331)andthebalanceowingatyearendwas$0(2013–$7,331).TheUniversityalsopurchasedservicestotalling$25,000(2013–$10,000)fromPriorityOneandthebalanceowingatyearendwas$0(2013–$0).

11. AdirectreportoftheVice-ChancellorhasaspousewhoisCEOofTeWhareWānangaOAwanuiarangi.DuringtheyeartheUniversityprovidedservicestoTeWhareWānangaOAwanuiarangifor$217(2013–$12,327)andthebalanceowingatyearendwas$0(2013–$0).TheUniversityalsopurchasedservicestotalling$1,139,410(2013–$421,517)fromTeWhareWānangaOAwanuiarangiandthebalanceowingatyearendwas$0(2013–$0).

12. AmemberofCouncilresignedasCFOofZespriInternationalLtdin2013.During2013theUniversityprovidedservicestotalling$9,450andthebalanceowingatyearendwas$0.

13. AdirectreportoftheVice-ChancellorrentedahousefromtheUniversityduring2013,totalreceived$9,147,amountoutstandingatyearendwas$0.

14. TheUniversityalsohaskeymanagementpersonnelservingontheboardofWaikatoLinkLimitedandULeisure.TheUniversity’sdealingswithWaikatoLinkLimitedandUleisureLtdaredisclosedabove.

Noprovisionshavebeenrequired,norexpenserecognisedforimpairmentofreceivablesforanyotherloansorotherreceivables

torelatedparties(2013–$946,246).

Note 25: Related Party Transactions continued



Note 26: Contingent Liabilities

University Contingent LiabilitiesAguaranteehasbeengiventotheBankofNewZealandforanoverdraftfacilityof$53,000.

(2013–$53,000)onacontinuingbasistotheCampusCrecheTrust.

TheUniversityroutinelymonitorsthefinancialperformanceofCampusCrecheTrust.

Thelikelihoodoftheguaranteebeingcalleduponisestimatedtobeverylow.

TheUniversityisawareofpotentialpaymentstotwostaffmembersofapproximately$30,000.

Therearenootherknowncontingentliabilities.

Share of Subsidiaries’, Associates’ and Joint Ventures Contingent LiabilitiesForthesubsidiariesandassociatesincludedintheconsolidatedfinancialstatementstherearenootherknowncontingentliabilities.

Note 27: Capital Management

TheUniversity’scapitalisitsequity,whichcomprisesretainedearningsandreserves.Equityisrepresentedbynetassets.

TheUniversityissubjecttothefinancialmanagementandaccountabilityprovisionsoftheEducationAct1989,whichincludes

restrictionsinrelationtodisposingofassetsandinterestsinassets,abilitytomortgageorotherwisechargeassetsorinterests

inassets,grantingleasesoflandorbuildingsorpartsofbuildings,andborrowings.

TheUniversitymanagesitsrevenues,expenses,assets,liabilities,investmentsandgeneralfinancialtransactionsprudentlyto

ensuretheresponsibleuseof,andaccountabilityforpublicresources.

TheUniversity’splanningprocessincludesthedevelopmentoftheUniversityStrategy,AcademicPlan,InvestmentPlanand

budgets.TheseplanssetouttheUniversity’sactivitiesforthenextonetothreeyears.TheUniversity’soperationalbudgetis

setannuallyandensuresthattheplannedactivitiesareappropriatelyfundedandthatexpenditurerequirementsoftheplanned

activitieshavebeenidentified.TheUniversity’sbudgetissetataleveltoensurethattheUniversity’soperatingactivitiesare

fundedfromoperatingcashflowsandalsothattheUniversity’soperatingactivitiesgeneratesufficientcashflowstofundthe

capitalexpenditurerequirementsoftheUniversity.

TheUniversityhasinplaceassetmanagementplansformajorclassesofassetsincludingmaintenanceandrenewalprogrammes.

AbudgetforcapitalexpenditureissetannuallyandisfundedfromcashgeneratedfromtheUniversity’soperatingactivities.

TheUniversityhascreatedareservewithinequity,forPrizes,scholarshipsandTrustFunds.Thisreserverepresentsfundsheldby

theUniversityonbehalfofothersandfundsprovidedtotheUniversitybyvariouspeopleandarerestrictedforspecificpurposes.



Note 28: Commitments

Capital CommitmentsTheUniversityhasthefollowingcapitalexpenditurecontracted:



$000 $000 $000 $000

CapitalCommitments 19,882 2,552 19,882 2,552



Note 29: Explanations of Major Variances against Budget

Note 30: Events after Balance Sheet Date

Explanationsformajorvariationsagainstthebudgetinformationatthestartofthefinancialyearareasfollows:

Statement of Comprehensive IncomeGovernment Funding and Grants

GovernmentfundingandgrantsreceivedbytheUniversitywere$3.6millionmorethanbudget.Thisfavourablevariancewaslargely

duetotheInstituteofProfessionalLearningandDevelopment(IPLD)receiving$3millionmorethanexpectedincontracts.The

UniversitywasalsograntedadditionalStudentAchievementFunding(SAC)afterthe2014budgetwasset.

Tuition Fees

Tuitionfeeswere$1.8millionlessthanbudgetduetodisappointinginternationalenrolmentsin2014.TheUniversityenrolled104

lessequivalentfull-timeinternationalstudentsthanwashoped.

Research Revenue

OnceagaintheUniversityreceivedmoreresearchrevenuethanbudget.Theadditional$2.1millionreceivedwaspredominantlyin

theareasofEducationandScience.

Investment income

DuetotheslowerthanexpectedstarttoconstructionoftheLaw/ManagementbuildingtheUniversityheldhigherbankdepositsthan

expected,thisresultedin$0.5millionmoreinterestthanbudgeted.

Other Income

Manyareasfellshortoftheirotherincomebudgetin2014,someexampleswerePathwayscollege,studentaccommodationand

carbondatinganalysis.Forabreakdownofthesignificantitemscomprisingotherincomeseenote4.

Personnel Costs

Universitypersonnelcostswere$1.7millionmorethanbudget,$0.9millionofthiswastheactuarialvaluation(seenote5)being

higherthanexpected,and$0.8millionbeingretirementcosts,duetotheunpredictablenatureofthesecoststheUniversitydoesn’t

budgetforthem.

Other Costs

TheUniversityspent$3.6millionmorethanbudgetedinothercosts,theadditionalincomebroughtinbyIPLD,FacultyofEducation

andFacultyofScience&Engineeringresultedinanincreaseinthecostsintheseareas.TheUniversityalsospent$1.2millionmore

thanbudgetonadvertisingaspartofanongoingcampaigntoattractnewstudentstotheUniversityofWaikato.Forabreakdownof

thesignificantitemscomprisingothercostsseenote6.

11AntsAnalyticsLimited,asubsidiaryofWaikatoLinkLimited,hasexecutedasaleandpurchaseagreementforthesaleofits

physicalandintangibleassets.


Documents

23. Notes to the Financial Statements