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Audit opinion

To the readers of Wellington Zoo Trust’s Financial Statements for the year ended 30 June 2005.

The Auditor-General is the auditor of Wellington Zoo Trust (the Trust). The Auditor-General has appointed me, Rudie Tomlinson, using the staff and resources of Audit New Zealand to carry out the audit of the financial statements and performance information of the Trust, on his behalf, for the year ended 30 June 2005.

Unqualified opinion

In our opinion:

• the financial statements of the Trust comprising the Statement of Financial Performance, Statement of Movements in Equity, Statement of Financial Position, Statement of Cash Flows, Statement of Accounting Policies, Notes 1 to 15 to the Financial Statements and the Statement of Intent Key Performance Indicators:

— comply with generally accepted accounting practice in New Zealand; and

— fairly reflect:

– the Trust’s financial position as at 30 June 2005; and

– the results of its operations and cash flows for the year ended on that date.

• the performance information of the Trust in the statement of performance fairly reflects the achievements measured against the performance targets adopted for the year ended 30 June 2005.

The audit was completed on 10 August 2005, and is the date at which our opinion is expressed.

The basis of the opinion is explained below. In addition, we outline the responsibilities of the Trustees and the Auditor, and explain our independence.

Basis of opinion

We carried out the audit in accordance with the Auditor-General’s Auditing Standards, which incorporate the New Zealand Auditing Standards.

We planned and performed our audit to obtain all the information and explanations we considered necessary in order to obtain reasonable assurance that the financial statements and performance information did not have material misstatements, whether caused by fraud or error.

Material misstatements are differences or omissions of amounts and disclosures that would affect a reader’s overall understanding of the financial statements and performance information. If we had found material misstatements that were not corrected, we would have referred to them in the opinion.

Our audit involved performing procedures to test the information presented in the financial statements and performance information. We assessed the results of those procedures in forming our opinion.

Audit procedures generally include:

• determining whether significant financial and management controls are working and can be relied on to produce complete and accurate data;
• verifying samples of transactions and account balances;
• performing analyses to identify anomalies in the reported data;
• reviewing significant estimates and judgements made by the Trustees;
• confirming year-end balances;
• determining whether accounting policies are appropriate and consistently applied; and
• determining whether all required disclosures are adequate.

We did not examine every transaction, nor do we guarantee complete accuracy of the financial statements and performance information.

We evaluated the overall adequacy of the presentation of information in the financial statements and performance information. We obtained all the information and explanations we required to support the opinion above.

Responsibilities of the Trustees and the Auditor

The Trustees are responsible for preparing financial statements in accordance with generally accepted accounting practice in New Zealand. Those financial statements must fairly reflect the financial position of the Trust as at 30 June 2005. They must also fairly reflect the results of its operations and cash flows for the year ended on that date. The Trustees are also responsible for preparing performance information that fairly reflects service performance achievements for the year ended 30 June 2005. The Trustees’ responsibilities arise from the Local Government Act 2002.

We are responsible for expressing an independent opinion on the financial statements and performance information and reporting that opinion to you. This responsibility arises from section 15 of the Public Audit Act 2001 and section 69 of the Local Government Act 2002.

Independence

When carrying out the audit we followed the independence requirements of the Auditor-General, which incorporate the independence requirements of the Institute of Chartered Accountants of New Zealand.

Other than the audit, we have no relationship with or interests in the Trust.

R L Tomlinson Audit New Zealand On behalf of the Auditor-General Wellington, New Zealand

Matters relating to the electronic presentation of the audited financial statements

This audit report relates to the financial statements of the Wellington Zoo Trust for the year ended 30 June 2005 included on the Wellington Zoo Trust’s website. The Chief Executive is responsible for the maintenance and integrity of the Wellington Zoo Trust’s website. We have not been engaged to report on the integrity of the Wellington Zoo Trust’s website. We accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website.

We have not been engaged to report on any other electronic versions of the Wellington Zoo Trust’s financial statements, and accept no responsibility for any changes that may have occurred to electronic versions of the financial statements published on other websites and/or published by other electronic means.

The audit report refers only to the financial statements named above. It does not provide an opinion on any other information which may have been hyperlinked to/from these financial statements. If readers of this report are concerned with the inherent risks arising from electronic data communication they should refer to the published hard copy of the audited financial statements and related audit report dated 10 August 2005 to confirm the information included in the audited financial statements presented on this website.

Legislation in New Zealand governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Statement of compliance and responsibility

for the year ended 30 June 2005

Compliance

The Board and management of the Wellington Zoo Trust confirm that all the statutory requirements of the Local Government Act 2002 regarding financial and operational management have been complied with.

Responsibility

The Board and management of the Wellington Zoo Trust accept responsibility for the preparation of the annual Financial Statements and the judgements used in them.

They also accept responsibility for establishing and maintaining a system of internal control designed to provide reasonable assurance as to the integrity and reliability of the financial reporting and performance information of the Wellington Zoo Trust.

In the opinion of the Board and management, the annual Financial Statements for the year ended 30 June 2005 fairly reflect the financial position, results of operations and service performance achievements of the Wellington Zoo Trust.

Neale Pitches Chairperson 10 August 2005		Phillip Meyer Chairperson, Finance and Audit Committee 10 August 2005		Alison Lash Chief Executive 10 August 2005

Statement of financial performance

for the year ended 30 June 2005
		Note		Actual		Budget		Actual
				2005		2005		2004
				$000		$000		$000
Revenue
Operating Revenue		1		3,951		3,986		3,570
Interest				24		15		4
Total Revenue				3,975		4,001		3,574
Expenditure
Operating Expenditure		2		3,854		3,999		3,401
Depreciation		3		9		2		1
Asset Vesting Expense		5		419		–		–
Total Expenditure				4,282		4,001		3,402
Net Surplus/(Deficit)		4		(307)		–		172

The accounting policies and notes form part of and are to be read in conjunction with these financial statements.

Statement of movements in equity

for the year ended 30 June 2005
						2005		2004
						$000		$000
Recognised revenues and expenses
Net surplus/(deficit) for the year						(307)		172
Total recognised revenues and expenses						(307)		172
Total movements in equity for the period						(307)		172
Equity as at 1 July 2004						172		–
Equity as at 30 June 2005						(135)		172

The accounting policies and notes form part of and are to be read in conjunction with these financial statements.

Statement of financial position

as at 30 June 2005
		Note				2005		2004
Assets						$000		$000
Current Assets
Cash and Bank balances						131		222
Accounts Receivable		6				161		165
GST Receivable						–		15
Inventory						50		39
						342		441
Non-Current Assets
Property, Plant and Equipment		3				62		21
Work in Progress		5				–		232
						62		253
Total Assets						404		694
Liabilities
Current Liabilities
Accounts Payable		7				200		281
Revenue in Advance						100		8
Monies held in Trust						23		33
Provision for Contractual Employee Entitlements		8				128		113
						451		435
Non-Current Liabilities
Provision for Contractual Employee Entitlements		8				88		87
						88		87
Total Liabilities						539		522
Net Assets						(135)		172
Equity
Retained Earnings		9				(244)		27
Restricted Funds		9				109		145
Total Equity						(135)		172

For and on Behalf of the Board

Neale Pitches Chairperson 10 August 2005		Phillip Meyer Chairperson, Finance and Audit Committee 10 August 2005		Alison Lash Chief Executive 10 August 2005

The accounting policies and notes form part of and are to be read in conjunction with these financial statements.

Statement of cash flows

for the year ended 30 June 2005
		Note				2005		2004
						$000		$000
Cash flows from operating activities
Cash was provided from:
Operating Revenue						4,033		3,611
Interest Received						24		4
Cash was applied to:
Payments to Suppliers						(3,933)		(3,124)
GST						22		(15)
Net cash inflow from operating activities		10				146		476
Cash flows from investing activities
Cash was applied to:
Purchase of Fixed Assets						(237)		(254)
Net cash (outflow) from investing activities						(237)		(254)
Cash flows from financing activities
Net cash (outflow) from financing activities						–		–
Net Increase/(Decrease) in Cash held						(91)		222
Opening Cash Balance						222		–
Closing Cash Balance						131		222
Made up of:
Cash and bank balances						131		222
Closing Cash Balance						131		222

The accounting policies and notes form part of and are to be read in conjunction with these financial statements.

Statement of accounting policies

Statutory Base

The Wellington Zoo Trust (the Trust) is a charitable trust registered under the Charitable Trusts Act 1957 and is also a council–controlled organisation as defined by Part 1, section 6 of the Local Government Act 2002. The Trust was established on 1 July 2003 by the Wellington City Council.

The financial statements have been prepared in accordance with the requirements of the Charitable Trusts Act 1957 and section 69 of the Local Government Act 2002. The financial statements are prepared in accordance with generally accepted accounting practice in New Zealand.

The Trust is reliant on the Wellington City Council (the Council) for the majority of its income and operates under a Contract for Services with the Council. The Contract for Services is for a period of 3 years. Reliance is placed on the assumption that the Trust will continue to receive sufficient income to fund ongoing operations.

The principal activities of the Trust are:

• to manage, administer, plan, develop, maintain, operate and promote the Wellington Zoo as a zoological park for the benefit of the inhabitants of Wellington and as an attraction to visitors to Wellington;
  
  
• to educate the community by building an awareness of plant and animal species in their habitats and the actions required to promote species conservation;
  
  
• to promote species conservation;
  
  
• to support and complement the conservation and education activities undertaken by other organisations;
  
  
• to develop and manage plant and animal species management programmes;
  
  
• to promote and coordinate the raising of funds to assist the management, administration, maintenance, planning, promotion and further development of the Wellington Zoo;
  
  
• to acquire additional plant and animal species;
  
  
• generally to do all acts, matters and things that the Trustees think necessary or conducive to further or attain the objects of the Trust set out above for the benefit of the public of Wellington.
  

Measurement Base

The financial statements have been prepared in accordance with historical cost concepts. The amounts in the financial statements and notes are rounded to the nearest thousand, unless otherwise stated.

Specific Accounting Policies

Revenue
All revenue is recognised when billed or earned on an accrual basis, except for revenue from grants, sponsorships, donations and bequests which are recognised on receipt of the funds. Where the Trust receives revenue which is subject to conditions, and there is a genuine level of uncertainty over whether the Trust will satisfy these conditions, the Trust will recognise a liability until the conditions are fulfilled.

Donated Services Recognition
The Trust benefits from the service of dedicated volunteers in the delivery of its activities. Due to the difficulty in determining the value of these donated services with sufficient reliability, donated services are not recognised in these financial statements.

Property, Plant and Equipment
Recognition — Property, plant and equipment consists primarily of operational assets. Expenditure is capitalised when it creates a new asset or increases the economic benefits over the total life of an existing asset.

The Trust also manages the construction and development of buildings, structures and enclosures on behalf of the Council. These assets are not recorded in the Trust's financial statements but are in the financial statements of the Council.

Measurement — Property, plant and equipment are valued at historical cost less accumulated depreciation.

The initial cost of property, plant and equipment includes the purchase consideration, and those costs that are directly attributable to bringing the asset into the location and condition necessary for its intended purpose. Subsequent expenditure that extends or expands the asset's service potential is capitalised.

Depreciation
Depreciation is provided on all assets owned by the Trust excluding assets under construction (work in progress). Depreciation is calculated on a straight line basis, to allocate the cost or value of the asset (less any residual value) over its useful life. The estimated useful lives of the assets are as follows:

Work in Progress
The cost of projects within work in progress is transferred to the relevant asset class when the project is completed and then depreciated. Borrowing costs are not capitalised.

Goods and Services Tax
The Financial Statements have been prepared exclusive of goods and services tax (GST) with the exception of receivables and payables which are stated as GST inclusive.

Receivables
Receivables are stated at expected realisable value after providing for bad and doubtful debts. All known bad debts are written off and charged to the statement of financial performance in the period in which they are identified.

Employee Entitlements
A provision for employee entitlements (annual leave, long service leave, and retirement allowances) is recognised as a liability when benefits are earned but not paid.

Annual leave is calculated on an actual entitlement basis at current rates of pay.

Long service leave and retirement gratuities have been calculated on an actuarial basis based on the likely future entitlements accruing to staff, after taking into account years of service, years to entitlement, the likelihood that staff will reach the point of entitlement, contractual entitlements information and the present value of the estimated future cash flows. The present value of the estimated future cash flows has been calculated using an inflation factor of 2.8% and a discount rate of 6.6%.

Inventory

Inventory is valued at the lower of cost and net realisable value. Cost is determined on a first–in first–out basis. The valuation includes allowances for slow moving and obsolete stock.

Taxation

The Trust is registered as a Charitable Trust and is exempt from income tax under the Income Tax Act 1994. The Trust is not exempt from indirect tax legislation such as Goods and Services Tax and accordingly is required to comply with these regulations.

Equity

Equity is the residual interest in the Trust and is measured as the difference between total assets and total liabilities. The components of equity are retained earnings and restricted funds (special funds, trusts and bequests).

Restricted funds are those reserves that are subject to specific conditions of use whether under statute or accepted as binding by the Trust because of the specific reason for which the funds were provided. Transfers from these reserves may be made only for specified purposes or when certain specified conditions are met.

Financial Instruments

The Trust is party to financial instruments as part of its normal operations. Financial instruments are monetary assets and liabilities and include bank accounts, receivables and payables. All financial instruments are recognised in the statement of financial position at cost, unless subject to a specific accounting policy. All revenues and expenses in relation to financial instruments are recognised in the statement of financial performance.

Leases

The Trust leases certain plant and equipment. Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased items are classified as operating leases. Operating lease payments are charged as expenses in the statement of financial performance in the period in which they are incurred. Leases where the Trust assumes substantially all the risks and rewards of ownership are classified as finance leases.

Segmental Reporting

The Trust's principal activities are carried out in one industry segment (provision of zoological services) and one geographic segment (Wellington).

Statement of Cash Flows

The statement of cash flows is prepared using the direct approach subject to the netting of certain cash flows. Operating activities include cash received from all income sources of the Trust and record the cash payments made for the supply of goods and services. Investing activities relate to the acquisition and disposal of assets. Financing activities relate to transactions that change the equity and debt capital structure of the Trust.

Comparative Figures

Prior financial period comparative financial information is shown for the period 1 July 2003 to 30 June 2004.

Changes in Accounting Policies

There have been no changes in accounting policies. Uniform accounting policies have been applied on a consistent basis during the year. Any changes in accounting policies are approved by the Finance and Audit Committee of the Trust.