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TOURISM NEW ZEALAND
ANNUAL REPORT 2007–2008
 ‘Youngest Country’
New Zealand is ‘The Youngest Country on Earth’, the last habitable
   land mass to be settled by human kind. This is the basis of
    Tourism New Zealand’s refreshed international marketing
          campaign which launched in August 2007.

                  www.tourismnewzealand.com
                                                                                                                              G25



CONTENTS
2007–2008
Chairman’s Report 02                Statement of Service Performance                                                     12
                                    Overview                                                                             12
Chief Executive’s                   Marketing of New Zealand as a Visitor Destination:                                   13
Report                  04                  Campaign                                                                     14
                                            Channel                                                                      23
About Tourism
                                            Capability                                                                   26
New Zealand             07
Management                          Management Statements                                                                28
at Tourism                          Financials                                                                           31
New Zealand             08          Statement of Responsibility                                                          31
                                    Statement of Financial Performance                                                   32
Governance                          Statement of Financial Position                                                      33
at Tourism                          Statement of Changes in Equity                                                       33
New Zealand             09          Statement of Cash Flows                                                              34

Board Members           11          Notes to the Financial Statements                                                    35
                                    Note 1    Statement of accounting policies                                           35
                                    Note 2    Crown Revenue                                                              38
                                    Note 3    Other Revenue                                                              38
                                    Note 4    Foreign Exchange Gains                                                     38
                                    Note 5    Other Expenses                                                             38
                                    Note 6    Foreign exchange losses                                                    40
                                    Note 7    Total Expenditure of Parent                                                40
                                    Note 8    Subsidiary Companies                                                       40
                                    Note 9    Associate Company                                                          42
                                    Note 10   Cash                                                                       42
                                    Note 11   Receivables                                                                43
                                    Note 12   Derivative financial instruments                                            44
                                    Note 13   Property plant and equipment                                               44
                                    Note 14   Accommodation bonds                                                        46
                                    Note 15   Creditors and other payables                                               46
                                    Note 16   Employee entitlements                                                      46
                                    Note 17   Provisions                                                                 46
                                    Note 18   Reconciliation of surplus (deficit) to net cash from operating activities   47
                                    Note 19   Contingent liabilities and contingent assets                               47
                                    Note 20   Income tax                                                                 48
                                    Note 21   Management of risk                                                         48
                                    Note 22   Significant accounting judgements, estimates and assumptions                48
                                    Note 23   Capital management                                                         48
                                    Note 24   Categories of financial assets and liabilities                              49
                                    Note 25   Capital commitments                                                        49
                                    Note 26   Operating commitments                                                      49
                                    Note 27   Related party transactions                                                 50
                                    Note 28   Financial instrument risks                                                 52
                                    Note 29   Remuneration of employees                                                  52
                                    Note 30   Remuneration of directors of parent                                        53
                                    Note 31   Explanation of transition to NZ IFRS                                       54
                                    Five-Year Financial Summary of Parent                                                57
                                    Audit Report                                                                         58




        Presented to the House of Representatives pursuant to Section 150 of the Crown of Entities Act 2004.
    CHAIRMAN’S REPORT
            GREG MUIR




2 TOURISM NEW ZEALAND ANNUAL REPORT 2007–2008
                                                Japan. Better air links between Canada         city billboards. This is alongside more
                                                and New Zealand helped promote                 traditional screens like cinema and
                                                growth in visitor numbers.                     television advertising.
   GREG MUIR CHAIRMAN
   TOURISM NEW ZEALAND                          New Zealand’s biggest market for arrivals,     However, Tourism New Zealand’s work
                                                Australia, continued to grow and will be       extends beyond its campaign work. There
                                                the backbone of the industry for the           is a continued focus on taking consumer
                                                coming year.                                   awareness of New Zealand as a holiday
                                                                                               destination and turning that interest into
                                                India remains a relatively small market
                                                                                               holidays booked, tickets bought and
                                                for New Zealand, providing only 23,328
                                                                                               activities and accommodation paid for.
                                                visitors in the year to June 2008. However,
                                                they are visitors who tend to visit during     Overseas, that work starts when Tourism
                                                the quieter months of April, May and June,     New Zealand works with key trade
                                                making them valuable to the tourism            partners to develop and improve the
                                                industry here.                                 holiday and travel itineraries on offer. By
                                                                                               training product development managers
                                                Tourism New Zealand                            and front line staff, Tourism New Zealand
This is my first annual report since taking      Tourism New Zealand’s response to these        can influence those in the driving seat
over as Chairman of Tourism New Zealand         changing market dynamics has been to           selling New Zealand offshore.
and I am looking forward to playing a           review spending in all its major markets
part in the development of one of                                                              By working with subsidiary partners,
                                                and to refocus its efforts and budgets on
New Zealand’s biggest industries.                                                              Qualmark and i-SITE New Zealand,
                                                those regions where it feels it is likely to
                                                                                               Tourism New Zealand also strives to
                                                stimulate growth.
The past year has provided another set                                                         improve the quality of visitors’ time here.
of milestones for Tourism New Zealand.          Despite more difficult conditions,              During the year, the number of Qualmark
However, tough global economic                  New Zealand international visitor arrivals     licence-holders increased to over 2,100. In
conditions and factors like increased           from our key markets increased slightly        May, the Qualmark environmental
competition from other destinations             in the 2007/2008 financial year and             accreditation programme was launched to
mean that Tourism New Zealand and               overall visitor expenditure was up 4.7%        the industry and media at the TRENZ
the tourism industry were faced with            compared to the previous year.                 conference in Rotorua.
a far more challenging environment.
                                                Tourism New Zealand also continued
                                                                                               Thank You
Global Factors                                  to innovate to find new ways to boost
                                                visitor numbers.                               I would like to thank the Tourism Minister
Since the last annual report the world’s
                                                                                               Damien O’Connor, Tourism New Zealand’s
economic situation has changed                  In August 2007, Tourism New Zealand            Chief Executive George Hickton and the
fundamentally, something which will             unveiled a refreshed 100% Pure                 dedicated team at Tourism New Zealand
undoubtedly affect the tourism industry. As     New Zealand campaign to the                    for the work and energy they put into
easy access to cheap credit is reduced and      industry and to the public focusing            promoting New Zealand. I would also like
concern over financial security increases,       on New Zealand as the ‘Youngest
                                                                                               to thank our partners in Government, at
spending on discretionary activities, such      Country on Earth’.
                                                                                               both national and local levels, and
as travel, will inevitably be impacted.
                                                The campaign was launched after a              the tourism industry for the support they
The recent economic upheaval came               thorough review of the 100% Pure               provide in ongoing funding, project
on top of a year of fuel price rises, which     New Zealand campaign.                          support, media hosting and with the many
had forced up the cost of airline tickets                                                      other events that arise during the year.
                                                The decision was made that the 100%
and added, or increased, surcharges on
                                                Pure New Zealand brand continued to            I would particularly like to thank
many flights.
                                                prove its worth in international markets and   outgoing director Kathy Guy and Chairman
Airlines are also looking more closely at the   remains a single, strong international brand   Wally Stone and acknowledge their
viability of routes, with a number of           that positions New Zealand well overseas.      contributions to the Tourism New Zealand
longhaul airlines reducing their flight          However, behind the campaign a great deal      board. Wally has been Chairman since
schedules to New Zealand.                       more work was done to change the               1999 and his efforts mean I am inheriting
Seat and route cut backs inevitably reduce      strategic direction of how Tourism             a vibrant, world-class tourism organisation.
the options for potential visitors to get to    New Zealand reaches potential visitors.
                                                                                               On that note, I am pleased to be able to
New Zealand and force airline ticket prices     Tourism New Zealand has shifted its focus      present Tourism New Zealand’s annual
up; both factors make New Zealand a less                                                       report for 2007/08.
                                                to reaching people through the screens
competitive destination in many markets.
                                                they use in everyday life. This means more
While visitor numbers from the UK, USA,         work developing Tourism New Zealand’s
Japan and Korea had started to show the         trade and consumer websites.
impact of the above factors, others
                                                Campaign and promotion work takes in
markets had been holding up well.
                                                the internet, blog sites, social networking
During 2008, China became                       sites. Advertisements have shown on
New Zealand’s fourth-largest market             screens in tube stations, railway stations,    Greg Muir
for international visitors, overtaking          office entryways, shopping centres and          Chairman, Tourism New Zealand


                                                                                                   TOURISM NEW ZEALAND ANNUAL REPORT 2007–2008   3
    CHIEF EXECUTIVE’S REPORT
        GEORGE HICKTON

                                                                                       New Zealand’s Giant Rugby
                                                                                       Ball venue is officially
                                                                                       opened in the heart of Paris.




                                                Highlights 2007/2008                          This work is all underpinned by Tourism
                                                                                              New Zealand’s strategy to find more
                                                There is no doubt that last year was a
                                                                                              channels and more ways to tell potential
       GEORGE HICKTON                           year of change, achievements and
                                                                                              visitors about the experience they can
       CHIEF EXECUTIVE                          challenges for Tourism New Zealand.
                                                                                              have when they get here.
       TOURISM NEW ZEALAND                      In one year, we launched the refreshed        We continue to look for innovative ways
                                                global campaign, led a project to install a   to promote our fantastic scenery and our
                                                giant inflatable rugby ball under the Eiffel   people, but also to tell the stories that
                                                Tower in Paris, took a slice of               link the two.
                                                New Zealand life to Japan and helped the
                                                                                              As part of that strategy, Tourism
                                                world find out more about our culture and
                                                                                              New Zealand has moved to become
                                                country by hosting and promoting events
                                                                                              a producer of content, rather than just
                                                in New Zealand like Matariki and World
                                                                                              a buyer of advertising space.
                                                Environment Day.
                                                                                              Being a producer allows us to tailor
                                                All that was aside from the work the          content to the screens people are using
                                                organisation does every day promoting         all the time to gather and share
                                                New Zealand as a holiday destination.         information – whether it be the internet,
                                                That work resulted in hosting hundreds of     television or cinema screens, electronic
                                                international media, thousands of training    billboards, i-Pods, large outdoor screens
                                                                                              or the inside of a giant rugby ball.
                                                sessions given to overseas travel sellers
                                                and product managers and millions of          However, recent events have also served
                                                visits to our websites.                       as reminder that the New Zealand’s


4 TOURISM NEW ZEALAND ANNUAL REPORT 2007–2008
multi-billion dollar tourism industry        The campaign captures the youth of the          Throughout both of these major offshore
cannot be taken for granted.                 country, the vibrancy of our people and         events, Tourism New Zealand received
                                             allows us to promote New Zealand as a           support and input from a number of
Overall, tourist arrivals and spending
                                             place to experience life as it should be.       Government agencies including the
increased in the last financial year,
                                                                                             Department of Labour, Ministry for
though deteriorating international           After being unveiled to the industry and
                                                                                             Culture and Heritage, Ministry for Foreign
economic conditions in many of our           media in New Zealand in August, the
                                                                                             Affairs and Trade and New Zealand Trade
source markets combined to hold growth       Youngest Country campaign was rolled
                                                                                             and Enterprise.
at below Tourism New Zealand’s target        out around the world, showing for the first
levels in some areas.                        time in the growing Chinese market, as          Online
                                             well as in the UK, USA, Australia, Japan,
As with all businesses experiencing                                                          Our online team had another busy
                                             Germany and Canada.
change, Tourism New Zealand reviewed                                                         year keeping up with the demands of
our major markets and budget as a result     Alongside that, the successful ‘What’s On’      potential visitors seeking high-quality,
of these global changes.                     campaign, which supports the 100%               well-presented and easy-to-access
                                             Pure New Zealand campaign in Australia,         information about New Zealand.
Japan continues to be extremely
                                             completed its second year in the market.        As a result of behind the scenes work,
important to New Zealand, but further
investment in campaign work was felt         The campaign has been successful in             the travel trade can now load travel deals
unlikely to yield much improvement in        improving seasonal performance out of           and special offers directly to newzealand.
arrival figures. Accordingly, our focus       Australia in the traditionally slower holiday   com. Tourism New Zealand also began
there is now on working with the             months of spring, winter and autumn.            syndicating content to other sites, for
Japanese travel trade on product                                                             example Tourism Auckland.
development focusing on the quality of       The campaign’s flexibility was
                                             demonstrated in the fast turn-around of a       The entry pages for the Chinese, Korean
yield. Korea is in a similar position.
                                             one-off television advertisement that went      and German sites were revamped and the
The UK and USA markets remain very           to air in Sydney during APEC.                   Australian page was constantly refreshed
important for New Zealand. Because                                                           to reflect the ‘What’s On’ campaign as it
of concerns about softening arrival          Events                                          rolled out in spring, autumn and winter.
numbers, we felt it was timely to            Tourism New Zealand has a long history          On top of that, the team managed to
conduct new research in those                of using events as a platform to promote        squeeze in the launch of the Front
markets to better understand current         New Zealand.                                    Row Rugby Club, which aims to build
consumer perceptions of New Zealand                                                          an online community in the run up to
as a destination.                            Sometimes the events are onshore, like
                                                                                             New Zealand hosting the Rugby World
                                             the Michael Hill New Zealand Golf Open,
That work has resulted in a new                                                              Cup 2011, and to create a new ‘Great
                                             Matariki and the Montana World of
campaign for the UK, which was                                                               Walks’ subsection in English, German
                                             WearableArt Awards.
launched in September 2008. It is hoped                                                      and Korean, promoting the nine great
that the campaign will slow what will        Offshore events during the year included        walks of New Zealand.
inevitably be a declining market given the   the installation of a giant inflatable rugby
current conditions. Research was also        ball under the Eiffel Tower in France           International Media
concluded and evaluated in the US.           during the last stages of the Rugby World       Programme
                                             Cup and the New Zealand Paradise                The International Media programme
China, Australia and Canada have shown                                                       continues to be a highly effective way of
                                             Week, which promoted New Zealand’s
good capacity for growth and we believe                                                      using international media to reach visitors
                                             food and wine, music, fashion, culture
this may continue given the right level of                                                   in our target markets.
                                             and the latest tourism activities to
investment in campaign work. In the case
                                             Japanese visitors.                              During the year the team, together with
of China, investment continues to
improve the quality of holidays for          The benefit of using events with high            local Regional Tourism Organisations
Chinese group tour visitors.                 public and media awareness are clear            and operators, hosted 524 media
                                             when you look at the results.                   from 15 countries. The resulting
Overall, last year was one of the most                                                       media coverage reached almost a
exciting years for Tourism New Zealand       During the two weeks the Rugby Ball             billion people in our target markets.
and one of its busiest.                      Venue was in place in Paris, over 24,000
                                             people queued to enter the ball and             As well as traditional media visits, the
Sadly, the economic turmoil overseas                                                         international media team has developed
                                             experience a stunning audio-visual
will inevitably make the coming year a                                                       an opinion leaders’ programme.
                                             display. However, almost 138 million
far more challenging one for Tourism
                                             people were exposed to the ball and             In keeping with the organisation’s strategy
New Zealand and the New Zealand
                                             New Zealand messages through media              to use screens, the programme targets
tourism industry.
                                             coverage online, in newspapers and on           high-profile, influential people who can
Advertising                                  television and radio.                           promote the New Zealand experience
                                                                                             through a variety of media outlets, and
One of the biggest events in Tourism         In Japan, over 17,000 visitors attended
                                                                                             can talk with our target audiences either
New Zealand’s calendar for the year was      The New Zealand Paradise Week and
                                                                                             online or in person.
the launch of a new global campaign with     internet traffic to Tourism New Zealand’s
a focus on New Zealand as ‘The Youngest      consumer website hit a record two-year          The international media team hosted six
Country on Earth’.                           high during the festival period.                opinion leaders during the year from the


                                                                                                 TOURISM NEW ZEALAND ANNUAL REPORT 2007–2008   5
                                                                                               visitor satisfaction and the quality of visits
                                                                                               to New Zealand. Tourism New Zealand
        New Zealand’s culture
                                                                                               does that through our majority-owned
        and people draw visitors
                                                                                               subsidiary Qualmark, which now boasts
        to our country
                                                                                               over 2,000 registered operators.

                                                                                               The scheme took a major step forward
                                                                                               this year when the accreditation process
                                                                                               expanded to cover environmental
                                                                                               sustainability.

                                                                                               Qualmark-accredited operators now
                                                                                               have to reach minimum environmental
                                                                                               standards as part of their Qualmark
                                                                                               accreditation, but those with more
                                                                                               developed environmental systems
                                                                                               can aim for higher gold, silver and
    UK, USA, Japan, and China. Highlights        out to around 1,500 people, and the
    from the programme include:                  bi-monthly Tourism News which reaches         bronze rankings.
                                                 6,300 people.                                 The system was introduced as a result
    British TV presenter and adventurer
    Ben Fogle, who visited in February                                                         of the industry’s commitment to
                                                 Travel Trade                                  sustainability through the New Zealand
    2008, did a range of outdoor adventure
                                                 Some of the most valuable work done to        Tourism Strategy.
    and         cultural experiences. The
                                                 promote New Zealand is done when our
    video diaries of his trip were broadcast                                                   Tourism New Zealand continued to
                                                 staff work directly with overseas travel
    on Tourism New Zealand’s channel on                                                        work with the i-SITE visitor network,
                                                 companies developing and selling
    YouTube, as well as on newzealand.com        holidays to New Zealand.                      which delivered information and advice
    and the Daily Telegraph website.                                                           to over 930,000 international visitors
                                                 During the year, Tourism New Zealand ran
    Popular Japanese stage and screen                                                          during the year.
                                                 an International Marketing Alliance (IMA)
    actress Beverley Maeda visited               roadshow in the USA. The trip involved        A nationwide booking system, introduced
    New Zealand to promote walking               taking local representatives to meet key      last year, has bedded down and is helping
    tours accompanied by a media contingent      US travel sellers, airlines and advertising   to improve the speed and quality of
    from a documentary crew, a magazine          and public relations specialists to gain a    information given by front-line i-SITE staff.
    and two websites.                            better understanding of the opportunities
                                                 and challenges in that market.                In November 2007, Tourism New Zealand
    In May, Chinese media mogul Wang
                                                                                               took over the management of
    Zhongjun and leading actor Deng              Product workshops focused on itinerary
                                                                                               New Zealand’s Approved Destination
    Chau visited New Zealand to learn about      development and new product
                                                                                               Status (ADS) agreement with the Chinese
    New Zealand’s film industry and luxury        opportunities to help sell New Zealand.
                                                                                               Government.
    experiences. A series of articles was        These workshops were held in Singapore,
    posted on leading Chinese internet site      Malaysia, Thailand, Taiwan, Hong Kong,        Problems had been experienced with
    sina.com, which has 100 million users.       Korea, mainland China and the UK.             low-quality tours and, as China is now one
    One article alone about Mr Wang’s bungy      Trade training continued with over            of New Zealand’s fastest-growing markets,
    jump was viewed by 24 million unique         21,000 international travel sellers and       we feel it is important to improve the
    users in the first 12 hours.                  product planners trained throughout           quality of ADS group tours.
                                                 the year. Training took place via
                                                                                               Finally, I would like to thank Tourism
    Corporate Communications                     seminars, conferences, roadshows and
                                                                                               New Zealand’s staff and our trade
    Tourism New Zealand continues to invest      familiarisation trips. Live online training
                                                                                               partners, both here and abroad, for the
    heavily in talking to the tourism industry   via the internet has also been trialled in
                                                                                               effort they put in to promoting
    and other stakeholders; they are our         Canada this year with great success.
                                                                                               New Zealand as a visitor destination for
    partners in developing a world-class         During the year a major review and            the benefit of all New Zealanders.
    tourism industry and improving visitor       overhaul of Tourism New Zealand’s trade
    satisfaction.                                website was undertaken. The improved
    Tourism New Zealand’s staff regularly        site will be easier to use, has improved
                                                 functionality and provides more targeted
    present at conferences and seminars
                                                 information for travel sellers.
    around the country providing an
    international perspective on the
                                                 Delivering Quality
    tourism industry.
                                                 Tourism New Zealand continues to be
    We also continued to produce a quarterly     involved in efforts to monitor and improve    George Hickton
    newsletter, Regional Rap, which is sent                                                    Chief Executive, Tourism New Zealand


6 TOURISM NEW ZEALAND ANNUAL REPORT 2007–2008
ABOUT TOURISM
NEW ZEALAND
Tourism New Zealand was created with        The campaign area is probably the most         that forms the basis of Tourism
the role of marketing New Zealand as        recognisable aspect of Tourism New             New Zealand’s Capability work.
a visitor destination overseas for the      Zealand’s work because the results of
                                                                                           To find out what visitors think about their
long-term benefit of New Zealand.            that work often carries the 100% Pure
                                                                                           time here and their satisfaction levels,
                                            New Zealand brand through television
It is an exciting and challenging job                                                      Tourism New Zealand has an ongoing
                                            commercials or other promotional
in a fast-moving industry both in                                                          research programme.
                                            activities. Less obvious, but highly
New Zealand and overseas.
                                            successful, is Tourism New Zealand’s           The organisation also works with
In 2007, 903 million tourists travelled     International Media Programme, which           subsidiary organisations Qualmark and
worldwide and spent US$856                  promotes New Zealand through hosting           i-SITE New Zealand to ensure people are
(NZ$1,309) billion.                         international media.                           getting good information and access to
                                                                                           good quality accommodation, activities
New Zealand sees just a tiny proportion     The organisation’s Channel work is
                                                                                           and transport.
of that huge international tourism          designed to convert a potential visitor’s
market. In the year to June 2008,           desire to travel to New Zealand into           Tourism New Zealand also takes a
almost 2.5 million international visitors   actually making the trip. Much of this work    leadership stance in areas like
arrived in New Zealand and spent            is done through Tourism New Zealand’s 11       environmental best practice. During the
almost $6.2 billion dollars (excluding      offshore offices, where staff work with the     year, the organisation contributed to the
airfare receipts).                          travel trade developing new ideas for          development of the New Zealand Tourism
                                            itineraries, promote new products and          Strategy to 2015 which cited
To keep New Zealand in the spotlight
                                            train front-line sales staff so they know      environmental enhancement and
among potential visitors, and to send
                                            more about New Zealand and can sell it         protection as a key goal for the Tourism
those who come here home happy,
                                            more effectively.                              Industry.
Tourism New Zealand works in three
main areas – Campaign, Channel              Ensuring visitors go home happy and tell       Tourism New Zealand has also joined the
and Capability.                             others to visit is one of the most important   Govt3 programme to monitor and improve
                                            marketing tools New Zealand has and            its own environmental performance.




                                                   former all black tana umaga
                                                   captains the front row rugby
                                                       ,
                                                   club an online community
                                                   of fans being welcomed to
                                                   new zealand for the rugby
                                                   world cup in oii.
                                                                                               TOURISM NEW ZEALAND ANNUAL REPORT 2007–2008   7
    MANAGEMENT AT
    TOURISM NEW ZEALAND
       Tourism New Zealand continually           THE TOURISM NEW ZEALAND EXECUTIVE TEAM
       reviews the markets in which it
       operates and the extent to which
       it is involved in those markets.
                                                 Keith Thomas, General Manager Corporate Services
       Tourism New Zealand currently
                                                 Keith is responsible for information technology, finance and the human
       has 11 offshore offices.
                                                 resources aspects of the organisation.
       Management of offshore activity is
       achieved through a regional               Catherine Bates, General Manager Consumer Marketing
       structure whereby six regional            Catherine is responsible for managing, leading and contributing to the
       managers report directly to the           attainment of Tourism New Zealand’s marketing vision. She works with her
       General Manager Operations, Tim           team to develop and implement integrated creative and marketing
       Hunter. Currently regional                communications plans to deliver Tourism New Zealand’s marketing activities.
       managers are located in London,
       Los Angeles, Shanghai, Tokyo,
                                                 Jane Dent, General Manager International Public Relations
                                                 Jane’s role is to guide the organisation’s overall public relations efforts to
       Sydney and Mumbai.
                                                 reflect the message of the global brand campaign. Tourism New Zealand
       Exposure to fluctuations in foreign        achieves PR in its key markets through events, both offshore and onshore,
       currency exchange rates on normal         public relations activity and the International Media Programme (IMP).
       operating activities in these
       countries is achieved through the         Cas Carter, General Manager Communications
       use of foreign exchange                   Cas is responsible for Tourism New Zealand’s internal and external
       instruments. Tourism New Zealand          communication. Responsibilities include liaising with stakeholders such as
       does not use financial instruments         the tourism industry, government, media and other stakeholders on tourism
       for speculative purposes.                 industry activities and issues.

       The board is kept appraised of
                                                 Tim Hunter, General Manager Operations
       offshore activity at each board
                                                 Tim manages Tourism New Zealand’s international operations. This involves
       meeting through a report by the
                                                 coordinating project planning for international markets, supporting
       General Manager Operations
                                                 international trade development work, managing the overseas travel industry
       detailing activity by market.
                                                 and online training programmes and coordinating trade networking events
                                                 and consumer shows.

                                                 David Wilks, General Manger Tourism Development
                                                 David is responsible for supporting the promise of New Zealand as a
                                                 high-quality destination. This is achieved through Tourism New Zealand’s
                                                 subsidiary commitments, the i-SITE Visitor Information Network and
                                                 Qualmark, and broader destination management initiatives. David is also
                                                 executive manager of i-SITE New Zealand and chair of Qualmark.

                                                 He is also responsible for ensuring that Tourism New Zealand naturally
                                                 expresses the values of our unique         cultural identity.

                                                 Simon Douglas, Manager Corporate Strategy and Planning
                                                 Simon is responsible for government liaison and the preparation of strategic
                                                 documents, including Tourism New Zealand’s Statement of Intent and
                                                 annual Output Agreement with the Minister of Tourism. He also manages
                                                 Tourism New Zealand’s funding relationships with government.




                                                As a sponsor of the montana world of
                                                wearablearttm awards since ooi, Tourism
                                                New Zealand has helped build the profile
                                                of this premiere art event internationally

8 TOURISM NEW ZEALAND ANNUAL REPORT 2007–2008
GOVERNANCE AT
TOURISM NEW ZEALAND
The New Zealand Tourism Board (trading       industry and the wider commercial             goals are set and the formal business
as Tourism New Zealand) was established      environment. This provides for a              planning process commenced. Additional
on 1 November 1991, as a Crown Entity        well-balanced board which enables it to       board meetings are scheduled as required.
under the provisions of the New Zealand      deal with the issues arising from the role
                                                                                           Under Section 92 of the Crown Entities
Tourism Board Act 1991. As a Crown           it plays in marketing New Zealand as a
                                                                                           Act 2004, the board must ensure that
Entity, Tourism New Zealand is expected      visitor destination.
                                                                                           the organisation acts in a manner
to comply with the appropriate provisions
                                             Tourism New Zealand introduces each           consistent with the Statement of Intent
of the Crown Entities Act 2004.                                                            and Output Agreement it has negotiated
                                             new director to the organisation through
The board of directors of Tourism            an induction process involving time spent     with the Crown.
New Zealand, including the position of       with each member of the Executive and         Tourism New Zealand is required to
Chairman, is appointed by the Minister of    his or her respective team. Directors are     report quarterly on its performance
Tourism. A profile of the current directors   also encouraged, where appropriate, to        against these documents. The reports
of Tourism New Zealand is shown on           attend tourism-related events such as         form the basis of discussion and review
page 11. All directors receive formal        TRENZ, the annual Tourism Conference          by the board at regular meetings timed
letters of appointment from the Minister     and the Inbound Tour Operators Council        to coincide with the required reporting
of Tourism setting out their duties, terms   Conference.                                   deadlines.
and conditions of appointment and the
                                             The board has six scheduled meetings          Unless specifically directed by the
expectations of their role.
                                             a year including a two-day meeting in         Minister of Tourism, the board is the
By virtue of the appointments made by        December to review the organisation’s         overall and final body responsible for
the Minister of Tourism, the board has       ongoing strategic direction. As a result of   all decision-making within Tourism
a wide range of skills in the tourism        the strategic meeting, the organisation’s     New Zealand.




                                                                                                                             abc



Outgoing Chairman Wally stone
talking to delegates at the PATA
ceo challenge on new zealand
tourism initiatives on confronting
climate change




                                                                                               TOURISM NEW ZEALAND ANNUAL REPORT 2007–2008   9
    There is a direct relationship between the    performance and establish performance         Tourism New Zealand conducts its own
    Minister of Tourism and the Chairman of the   targets for the following year.               internal audits, often with the involvement
    board. The Chairman has regular meetings                                                    of its external auditors. Sites to be audited
                                                  Tourism New Zealand has an audit
    with the Minister to discuss progress and                                                   are agreed by the audit committee and
                                                  committee comprised of four board
    issues facing the tourism industry.                                                         programmes of work are developed with
                                                  members which is appointed by the
    As well as this regular communication                                                       input by the external auditors. The results
                                                  board. The Committee is currently
    and engagement with its shareholding          chaired by Susie Johnstone, a chartered       are reported back to the audit committee.
    Minister, Tourism New Zealand is aware        accountant; other members being               Tourism New Zealand has a controlling
    of the need to engage with the wider          Malcolm Johns and Sean Murray.                interest in two subsidiary companies;
    community to promote an understanding         Outgoing director Kathy Guy and               a 60 percent shareholding in Qualmark
    of tourism development and associated         Chairman Wally Stone also served as           New Zealand Limited; and (through the
    issues. Tourism New Zealand achieves this     members for the financial year under           terms and conditions of a relationship
    through regular meetings with various         review. In addition, the board has            agreement that meets the criteria
    industry groups, regional seminars run        appointed an external member, Gill Cox, a
                                                                                                determined in FRS-37 for consolidating
    throughout the year as well as number         chartered accountant and past president
                                                                                                investments in subsidiaries) the Visitor
    of external publications, such as             of the New Zealand Institute of Chartered
                                                                                                Information Network Incorporated (VIN
    Tourism News.                                 Accountants.
                                                                                                Inc), trading as i-SITE New Zealand.
    The board is conscious of its obligations     The audit committee meets at least
    to ensure that directors avoid any conflicts                                                 Three of Tourism New Zealand’s
                                                  three times a year. It reviews Tourism
    of interest in their decision-making                                                        Executive, including the chief executive,
                                                  New Zealand’s internal control framework,
    process. The board ensures that proper                                                      are directors of Qualmark and one
                                                  external audit relationships and
    process is followed and that directors’                                                     executive member represents Tourism
                                                  engagements, risk management and
    interests are formally recorded, with any                                                   New Zealand on the i-SITE New Zealand
                                                  financial reporting, including adoption of
    changes or additions being disclosed                                                        board. The board is provided with
                                                  IFRS reporting standards. Following each
    at the start of each meeting. Directors                                                     financial information from each
                                                  meeting the chair of the audit committee
    excuse themselves from any discussions in                                                   organisation at each board meeting,
                                                  reports back, either verbally or through
    which their duty as a director could                                                        as well as commentary on performance
                                                  written papers, to the board together
    be compromised.                                                                             and significant issues.
                                                  with appropriate recommendations.
    Day-to-day management of the                                                                Tourism New Zealand expects all its
                                                  Tourism New Zealand manages its risks
    organisation has been delegated to                                                          employees and directors to maintain
                                                  through a risk management framework;
    the chief executive who is directly                                                         the highest ethical standards. Tourism
                                                  a process that requires it to identify
    accountable to the board through the                                                        New Zealand has in place an employee
                                                  legislative and business risks arising from
    Chairman. Tourism New Zealand’s                                                             code of conduct, which is signed by
                                                  its strategic direction and operating
    Delegated Authorities Policy is set                                                         all staff when they join the organisation.
                                                  environment. Risks identified are reviewed
    by the board and reviewed annually.
                                                  annually by the audit committee. The          Tourism New Zealand has developed
    Appropriate formal processes are in
                                                  chief executive regularly reports formally    a formal code of conduct for its board
    place for reporting back to the Board.
                                                  to the board on the matter of new or          members, which is consistent with
    The Chairman and deputy chair meet            escalated risks and the processes in          the code released by the State
    annually with the chief executive to review   place to manage these appropriately.          Services Commission.




                                                                                                                 The qualmark
                                                                                                                 green initiative
                                                                                                                 was launched
                                                                                                                 by tourism
10 TOURISM NEW ZEALAND ANNUAL REPORT 2007–2008
                                                                                                                 minister Damien
                                                                                                                 O’Conner in may
BOARD
MEMBERS
  Greg Muir                                 Sean Murray                               Malcolm Johns
  Chairman                                  Director                                  Director
  Greg was appointed Chairman of the        Sean has been a director on the board     Malcolm is chief executive of Intercity
  New Zealand Tourism Board in July         of Tourism New Zealand since 2003         Holdings Limited, parent company of
  2008. He is currently executive           and before that had been the Chairman     Intercity Coachlines, Newmans Coach
  Chairman of Pumpkin Patch.                of the Tourism Research Council.          Lines, Great Sights New Zealand, Fullers
                                                                                      Bay of Islands, Kings Dolphin Cruises and
  Before that, Greg was chief executive     Currently an independent consultant,
                                                                                      Eco Tours. Malcolm has extensive
  officer of The Warehouse Group Ltd         he was previously Group General
                                                                                      commercial experience in international
  and has held senior management roles      Manager Commercial with Tourism
                                                                                      tourism and transport businesses having
  with TNT Australia Pty Ltd, Enerco        Holdings Ltd. His principal background
                                                                                      held senior management and governance
  New Zealand Ltd and Lion Nathan Ltd.      is in strategic planning, change
                                                                                      roles at Discover Canada Holidays,
  Greg is also currently Chairman of        management (including acquisition and
                                                                                      Jasons Travel Media, Tourism Holdings,
  Hanover Group Limited, Pioneer Capital    divestment), financial and operational
                                                                                      Mount Cook Group and Hyatt
  Management Ltd, the Blues S14             performance, relationship management
                                                                                      International Hotels and Resorts.
  Franchise and a director of the           and brand marketing.
  Auckland Rugby Union.
                                            John Barrett                              Glenys Coughlan
  Susie Johnstone                                                                     Director
                                            Director
                                                                                      Glenys, MA and MBA, is chief executive
  Deputy Chair                              John is managing director of Kapiti
                                                                                      of NBPR (public relations) and Dazzle
  Susie is a director of the chartered      Island Alive & Kapiti Nature Lodge,
                                                                                      Events – both part of the Acumen
  accountancy firm Shand Thomson. She        a family eco-tourism operation based
                                                                                      Group in which she is a co-owner
  is currently the deputy chair of Otago    on Kapiti Island.
                                                                                      and director.
  District Health Board and the Southland
                                            John is also currently Chairman of both
  District Health Board, a board member                                               Glenys has over 20 years experience in
                                            the New Zealand         Tourism Council
  of the New Zealand Blood Service and                                                the tourism industry including four
                                            and the Wellington Regional
  a member of the Otago Polytechnic                                                   years as chief executive of the Tourism
                                            Tourism organisation, Te Ara a Maui.
  Council. She has also held governance                                               Industry Association and eight years in
                                            He also sits on the Board of Aviation
  roles on the boards of Telford Rural                                                senior management with Air
                                            Tourism & Travel Training Organisation
  Polytechnic, the New Zealand Hockey                                                 New Zealand. She is a longstanding
                                            (ATTTO) and a number of non-tourism
  Federation and the Institute of                                                     director of Te Papa, chair of Positively
                                            related organisations.
  Chartered Accountants.                                                              Wellington Tourism, a director of the
                                                                                      Wellington Regional Economic
  Paul Bingham                              Kay Mckelvie
                                                                                      Development Agency and a trustee of
                                            Director
  Director                                                                            the PATA New Zealand Trust.
                                            Kay has been chair of Waitemata
  Paul is managing director of Black
                                            District Health Board since 2001 and      Henry van Asch
  Cat Group. He is also Chairman of
                                            is also chair of Quotable Value and the
  Christchurch and Canterbury Tourism,                                                Director
                                            State Housing Appeal Authority and a
  a past member of the Tourism                                                        Henry joined the board of Tourism
                                            director of the Crown Health Financing
  Research Council New Zealand and                                                    New Zealand in September 2008.
                                            Agency. She is a qualified lawyer with
  the Banks Peninsula Tourism and                                                     A co-founder of AJ Hackett Bungy,
                                            a Masters in Business Administration
  Economic Development Board. Paul                                                    Henry has been a director of Bungy
                                            from Auckland University.
  has recently been appointed to the                                                  New Zealand Ltd since 1997. Henry
  board of Air New Zealand. He has                                                    oversees ownership and operation of
  previously held positions with Tourism                                              the Bungy New Zealand Group (which
  Holdings Ltd and Air New Zealand.                                                   includes AJ Hackett Bungy and
                                                                                      Auckland Bungy & Bridge Climb)
                                                                                      along with his latest ventures the High
                                                                                      Plains Wine Co and The Winehouse &
                                                                                      Kitchen Restaurant.



Note: Chairman Wally Stone retired from the board on 30 June 2008
      Director Kathy Guy resigned from the board on 14 August 2008                         TOURISM NEW ZEALAND ANNUAL REPORT 2007–2008 11
    STATEMENT OF SERVICE
    PERFORMANCE



    Overview
    This report covers The New Zealand Tourism Board’s        Tourism New Zealand’s Output Agreement for 2007/08,
    (trading as Tourism New Zealand) service performance      agreed with the Minister of Tourism, contains more
    for the year ending 30 June 2008 against the objectives   detailed performance measures.
    set out in the 2007/08 Statement of Intent.
                                                              This Statement of Service Performance includes reporting
    Tourism New Zealand’s resource allocation                 against priorities in the Statement of Intent (SOI) and
    decisions were based on the extent to which               against the additional performance measures contained in
    each proposed activity would contribute towards           the Output Agreement.
    its objectives and the delivery of outputs
    contained in the 2007/08 Statement of Intent.




12 TOURISM NEW ZEALAND ANNUAL REPORT 2007–2008
In 2007/08, Tourism New Zealand’s activities were funded through two Output Classes within Vote Tourism:

Marketing of New Zealand as a Visitor Destination
                                                             ACTUAL                          S TAT EMEN T OF IN T EN T                              ACTUAL
                                                             2007/ 08                                2007/ 08                                       2006/07
                                                              $000                                    $000                                           $0001
  VOTE TOURISM – MARKETING OF NEW ZEALAND AS A VISITOR DESTINATION
  Crown Revenue2                                               $74,850                                    $74,601                                     $73,987
                      3
  Other Revenue                                                $13,524                                     $3,067                                      $7,719
  Total Revenue                                                $88,374                                     $77,668                                    $81,706


  Total Expenses 4                                             $84,331                                     $77,514                                   $86,325


Marketing services involve promoting New Zealand in international markets as a visitor destination. This includes consumer
advertising, promotion through media and events, training for international travel sellers and communication strategies. These
activities are supported by product marketing, market research, tourism development and stakeholder communications and are
developed in consultation and partnership with the tourism industry.

The three major outputs in this Output Class reflect the three key components of Tourism New Zealand’s overarching strategy
and include:

Output One: Campaign
Activities within this output are focused on raising awareness of New Zealand as a travel destination, and intent and preference to
travel here through the 100% Pure New Zealand global marketing campaign.

Output Two: Channel
Activities within this output are directed towards converting traveller interest in ‘Destination New Zealand’ into growth in actual travel
and activity. This output also covers Tourism New Zealand’s management of the Approved Destination Scheme with the aim of
improving the quality of tourism out of the China market.

Output Three: Capability
Activities within this output focus on assisting the development of the tourism sector to deliver quality visitor experiences and using
market research to measure visitor satisfaction and monitor consumer trends, the results of which are used to inform strategy.



Implementation of the Tourism Strategy
                                                             ACTUAL                          S TAT EMEN T OF IN T EN T                              ACTUAL
                                                             2007/ 08                                2007/ 08                                       2006/07
                                                              $000                                    $000                                           $000
  VOTE TOURISM – IMPLEMENTATION OF THE TOURISM STRATEGY
  Crown Revenue                                                  $220                                       $220                                        $259
  Total Expenses                                                 $220                                       $220                                        $194


This Output Class includes various initiatives developed by the Minister of Tourism to implement the New Zealand Tourism Strategy.
In 2007/08, Tourism New Zealand was allocated funding from within this appropriation to implement a Qualmark New Zealand
environmental accreditation scheme for tourism operators which Tourism New Zealand incorporated into its Capability output
activities.

The increase in Crown revenue over budget is due to an additional $0.22 million (GST exclusive) allocated to Tourism New Zealand
from Vote Environment departmental appropriations for Business Partnerships for Sustainability to assist in the implementation of the
Qualmark environmental criteria.




1 Actuals for 2006/07 have been restated to take account of the requirements of NZ IFRS1 “First – time adoption of New Zealand Equivalents to International Financial Reporting
  Standards”.
2 Crown revenue for the year includes $3 million + GST for strategic tourism marketing of New Zealand in China, and a one-off government grant of $2.6 million + GST for the
  costs of the New Zealand Rugby Clubrooms at the Rugby World Cup 2007.
3 Other revenue includes grants of $1.3 million from the Cultural Diplomacy International Programme administered by the Ministry of Culture and Heritage to organise the pro-
  gramme of cultural activities at the rugby ball promotion at the Rugby World Cup 2007 and to manage and organise New Zealand Paradise Week, Tokyo, Japan, 2007. Foreign
  exchange gains under IFRS reporting, bank interest and partner revenue account for the balance of other revenue.
4 Total expenditure reflects the increase in partner income received and foreign exchange gains made during the year which was primarily directed to campaign activity.



                                                                                                                               TOURISM NEW ZEALAND ANNUAL REPORT 2007–2008 13
    MARKETING OF
    NEW ZEALAND AS A
    VISITOR DESTINATION:

    The Tourism New Zealand global marketing campaign, 100% Pure New Zealand, seeks to establish New Zealand as a ‘top of mind’
    destination for travellers seeking authentic experiences that connect directly with our land and its people. The campaign promotes
    the core essence of the New Zealand experience, showing visitors how they can interact with our culture and natural environment.

    The campaign is targeted at potential travellers whose expectations match what New Zealand has to offer. These people travel
    regularly, participate in a wide range of tourism experiences, actively participate in a natural environment, are environmentally and
    culturally aware, seek authentic and new experiences and want to share them with others. Tourism New Zealand refers to these
    visitors as the ‘Interactive Traveller ®’.

    Prompted Awareness of New Zealand as a Travel Destination
    Measure
    Maintain prompted awareness levels for New Zealand as a travel destination expressed in percentage terms in the following markets:
    Australia, the UK, USA, Japan, China, South Korea and Germany. Trend data will be provided quarterly.


                                                                                                Q15                Q26                Q37                 Q48             S TAT U S
      Interactive Travellers (ITs)                                                                                                                                        Achieved
      Australia9                                                                               54%                 55%                53%                55%
      UK                                                                                       29%                 26%                30%                30%
      USA                                                                                      16%                 17%                21%                 17%
      Japan                                                                                    13%                 14%                28%                22%
      China                                                                                    30%                 30%                40%                45%
      South Korea                                                                              16%                 19%                33%                 24%
      Germany                                                                                  13%                 16%                25%                23%
      Non-Interactive Travellers (Non-ITs)
      Australia                                                                                48%                 50%                54%                52%
      Long Haul Travel Intenders (LHTIs)
      UK                                                                                       28%                 23%                27%                 27%
      USA                                                                                      16%                 13%                18%                 15%
      Japan                                                                                    12%                 13%                25%                20%
      China                                                                                    26%                 30%                36%                39%
      South Korea                                                                              14%                 15%                28%                22%
      Germany                                                                                  12%                 13%                23%                20%




    5 Time series for this data is April-June 2007.
    6 Time series for this data is October-December 2007.
    7 Time series for this data is January-March 2008.
    8 Time series for this data is April-June 2008.


    9 Data for Australia will compare all holiday travellers and Interactive Travellers. Data for remaining markets compare Long Haul Travel Intenders (LHTIs) and Interactive Travellers.



14 TOURISM NEW ZEALAND ANNUAL REPORT 2007–2008
Prompted Awareness Levels of the 100% Pure New Zealand Campaign
Measure
Report on prompted awareness levels for the 100% Pure Campaign in percentage terms in the following markets:
Australia, the UK, USA, Japan, China, South Korea and Germany. Trend data will be reported quarterly.


                                                                          Q15           Q26           Q37           Q48        S TAT U S
 Interactive Travellers (ITs)                                                                                                   Achieved
 Australia9                                                              52%            47%          55%           54%
 UK                                                                       24%           26%          31%           30%
 USA                                                                      21%           21%          11%           13%
 Japan                                                                   13%            15%          11%           13%
 China                                                                   28%            22%          28%            41%
 South Korea                                                             20%            19%          16%           16%
 Germany                                                                 35%            43%          22%           18%
 Non-Interactive Travellers (Non-ITs)
 Australia                                                               39%            40%          52%           36%
 Long Haul Travel Intenders (LHTIs)
 UK                                                                       25%           23%          27%           28%
 USA                                                                      17%           18%           8%           10%
 Japan                                                                    11%           14%           8%           10%
 China                                                                    21%           23%          25%           30%
 South Korea                                                             22%            19%          12%           12%
 Germany                                                                 32%            34%          18%           20%


New Zealand’s Ranking as a Preferred Holiday Destination
Measure
New Zealand remains in the top five preferred holiday destinations with Interactive Travellers in Australia and the UK.
Trend data will be provided quarterly.


                          Q15                        Q26                         Q37                        Q48                S TAT U S
                    %           Ranking        %           Ranking         %           Ranking        %           Ranking
 Australia         29             1st          27           2nd           27            2nd           29            1st        Achieved
 UK                21             3rd          17        6th = with       20             6th          21            5th        Achieved
                                                          Canada



Comment
At YE June 2008, New Zealand remains in the top five preferred holiday destinations with Interactive Travellers from Australia and the UK.




   AWARENESS
   CAMPAIGN

  In Australia
  the what’s
  on campaign
  adds another
  level to the
  ioo% pure
  new zealand
  message




                                                                                                   TOURISM NEW ZEALAND ANNUAL REPORT 2007–2008 15
    Measure
    Improve New Zealand’s ranking as a preferred holiday destination with Interactive Travellers in specified destinations – USA, Japan,
    China, South Korea and Germany. Trend data will be reported quarterly.


                                      Q15                                  Q26                                 Q37                                 Q48                    S TAT U S
                           %             Ranking                %             Ranking               %             Ranking               %             Ranking
                                                                           11th = with
                                       10th = with                                                                                                 12th = with               Not
      USA                  12                                  11         Brazil, Greece            18               6th               11
                                         Japan                                                                                                      Germany                Achieved
                                                                            and Egypt
                                                                            4th = with                                                              5th = with
      Japan                18                7th               23                                   17               6th               21                                  Achieved
                                                                             Canada                                                                  Canada

                                                                            7th = with                                                              6th = with               Not
      China                19                5th               20                                   23               6th               24
                                                                            Hong Kong                                                                France                Achieved
                                                                                                                4th = with
      South                             7th = with                          10th = with
                           16                                  13                                   23          USA and                24                5th               Achieved
      Korea                              England                               Bali
                                                                                                               Switzerland
                                                                                                                                                   3rd = with
                                                                                                                11th = with                         Australia,             Partially
      Germany              21                3rd               22                3rd                14                                 18
                                                                                                                 Canada                            Greece and              Achieved
                                                                                                                                                      Spain


    Intention to Travel to New Zealand
    Measure
    Report on intention to travel to New Zealand expressed in percentage terms for the following markets – Australia, UK, USA, Japan,
    China, South Korea and Germany. Trend data will be provided quarterly.


                                                                                                     Q15               Q26               Q37               Q48            S TAT U S
      Interactive Travellers (ITs)                                                                                                                                         Achieved
                  9
      Australia                                                                                       7%               11%                7%                8%
      UK                                                                                              4%                3%                7%                5%
      USA                                                                                             3%                2%                5%                2%
      Japan                                                                                           5%                7%                4%                7%
      China                                                                                           8%                8%                9%                8%
      South Korea                                                                                     2%                3%                9%                7%
      Germany                                                                                         3%                5%                4%                6%
      Non-Interactive Travellers (Non-ITs)
      Australia                                                                                       7%                9%               10%                7%
      Long-Haul Travel Intenders (LHTIs)
      UK                                                                                              3%                2%                6%                5%
      USA                                                                                             2%                2%                4%                2%
      Japan                                                                                           4%                5%                5%                6%
      China                                                                                           7%                7%                5%                7%
      South Korea                                                                                     3%                4%                9%                7%
      Germany                                                                                         4%                4%                3%                5%


    Comment
    Interactive Traveller intention to travel to New Zealand remained slightly higher or stable across most markets when compared to Non-
    Interactive Travellers (Australia) and Long Haul Travel Intenders (other markets).




    9 Data for Australia will compare all holiday travellers and Interactive Travellers. Data for remaining markets compare Long Haul Travel Intenders (LHTIs) and Interactive Travellers.



16 TOURISM NEW ZEALAND ANNUAL REPORT 2007–2008
Conversion Ratio
Measure
Improve the conversion ratio between awareness, preference and intention – and actual holiday arrivals for specified markets
(Australia, the UK and USA), to be reported annually.


Result                                                                                                                      S TAT U S
 Australia                                                                                                                   Partially
                         Conversion Ratio: 34% of this group (Interactive Travellers that were aware of New Zealand          Achieved
                         advertising) also had a preference to visit New Zealand (compared to 37% in 2006/07).


                         Conversion ratio: 31% of this group (Interactive Travellers who had a preference
                         to travel to New Zealand) also intended to visit (compared to 29% in 2006/07).


                         change from YE 2007.
 UK                                                                                                                            Not
                         Conversion Ratio: 27% of this group (Interactive Travellers that were aware of New Zealand          Achieved
                         advertising) also had a preference to visit New Zealand (compared to 38% in 2006/07).


                         Conversion ratio: 25% of this group (Interactive Travellers who had a preference to travel to
                         New Zealand) also intended to visit (compared to 33% in 2006/07).


                         change from YE 2007.
 USA                                                                                                                         Partially
                         Conversion Ratio: 32% of this group (Interactive Travellers that were aware of                      Achieved
                         New Zealand advertising) also had a preference to visit New Zealand
                         (compared to 31% in 2006/07).


                         Conversion ratio: 23% of this group (Interactive Travellers who had a preference to
                         travel to New Zealand) also intended to visit (compared to 30% in 2006/07).


                         change from YE 2007.


Holiday Arrivals from Main Markets
Measure
Provide quarterly trend data for holiday arrivals from main markets including Australia, the UK, USA, Japan, Korea, China and
Germany.


Result                                        YE JUNE 2007               YE JUNE 2008             % CHANGE               S TAT US

 TOTAL HOLIDAY ARRIVALS                           1,213,288                 1,209,241                -0.3%               Achieved
 Australia                                         357,673                   382,880                  7.0%
 UK                                                154,520                   146,737                 -5.0%
 Germany                                            41,380                    41,721                  0.8%
 USA                                               134,736                   132,972                 -1.3%
 Canada                                             26,844                    30,455                 13.5%
 Japan                                              99,375                    88,714                 -10.7%
 Korea                                              78,092                    58,835                 -24.7%
 China                                              68,262                    79,184                 16.0%


Comment
For YE June 2008, total holiday arrivals were down by 0.3% compared with the YE June 2007. Trend data was provided quarterly.




                                                                                                TOURISM NEW ZEALAND ANNUAL REPORT 2007–2008 17
    Campaign Reach and Impact
    Measure
    Report bi-annually on the reach, frequency and impressions achieved through brand advertising in Australia, the USA,
    the UK and Japan.


         COUNTRY                     MEDIA               POTENTIAL               J U LY - D E C 2 0 0 7 A C T U A L       JAN-JUNE 2008 ACTUAL
                                                         AUDIENCE
      Japan                                                                   Reach          Freq.        Impressions    Reach   Freq.   Impressions
                                                                                %                                          %

                               Newspaper
                                                          6,515,350          30.50%           1.6                        N/A10   N/A
                               and Free paper

                               Web Banner                                                                 117,420,316                    125,897,587

                               Web Microsite
                                                                                                            184,209                          N/A
                               (pageview)



         COUNTRY                     MEDIA               POTENTIAL               J U LY - D E C 2 0 0 7 A C T U A L       JAN-JUNE 2008 ACTUAL
                                                         AUDIENCE
      USA11                                                                   Reach          Freq.        Impressions    Reach   Freq.   Impressions
                                                                                %                                          %
                               Local TV
                                                          6,116,300             22%           1.4          1,976,000     47.3%    2.2     6,361,000
                               (Los Angeles)
                               Local TV (San
                                                          2,669,200             20%           1.2           649,000      47.2%    2.1     2,642,000
                               Francisco)
                               Local TV
                                                          1,058,200             N/A           N/A              N/A       47.3%    2.1     1,069,000
                               (San Diego)

                               Online*                   35,974,000             31%           1.4         65,570,660     54.6%    2.1    196,100,972

                                                                                                            128,902                        231,189
                               Search                         N/A               5%            N/A                         N/A    N/A
                                                                                                             clicks                         clicks

                               Cinema                         N/A               N/A           N/A              N/A        N/A    N/A      3,912,611




       DID YOU
       KNOW?
       Tourism New ZealanD's
       consumer websitE,
       www.newzealand.coM     ,
       receives in the region
       of oo, ooo visits
       a month




    10 N/A = No Activity
    11 USA Local TV Target Audience: Adults 25-49 (Nielsen/Scarborough/IMS). Online Audience: Adults 25-49 w/ $75K+
       (2008 comScore Networks, Inc. (Time Period: Winter/Spring of 2008)) *Does not include – Admob, Dedicated Media.



18 TOURISM NEW ZEALAND ANNUAL REPORT 2007–2008
      COUNTRY                        MEDIA                    POTENTIAL                                      J U LY - D E C 2 0 0 7 A C T U A L
                                                              AUDIENCE
  Australia12                                                                                Reach %                           Freq.              Impressions
                              Total Television
                                   Sydney                        306,000                        87.1%                          10.4                  N/A
                                   Melbourne                     254,000                       85.7%                           8.08                  N/A
                                   Brisbane                      131,000                       94.6%                           9.83                  N/A
  What’s On                   TNZ Only
                                   Sydney                        306,000                         81%                           3.41                  N/A
                                   Melbourne                     254,000                        77%                            4.31                  N/A
                                   Brisbane                      131,000                         74%                           2.96                  N/A
  100% Pure NZ                TNZ Brand
                                   Sydney                        306,000                      50.53%                           3.11                  N/A
                                   Melbourne                     254,000                      53.44%                           3.11                  N/A
                                   Brisbane                      131,000                      44.64%                           2.46                  N/A
                              APEC Sale Only
                                   Sydney                        306,000                        34%                             1+                   N/A
                              Auckland Only
                                   Sydney                        306,000                        54%                             1+                   N/A
                                   Brisbane                      131,000                        44%                             2+                   N/A
                              Christchurch
                                   Sydney                        306,000                      32.91%                            2+                   N/A
                                   Melbourne                     254,000                      51.87%                            2+                   N/A
                                   Brisbane                      131,000                      43.57%                            2+                   N/A
                              Wellington
                                   Sydney                        306,000                       37.01%                           2+                   N/A
                                   Brisbane                      131,000                      43.29%                            2+                   N/A
                              Pay Television
                                   National                      666,375                        68%                             3+                   N/A
                              Cinema
                                                             670,732 – Box
                                   National                 Office for Period                     21%                            1+                   N/A
                              Online                                N/A                         27%                            4.35               17,300,000




12 Australia TV Target Audience: AB25-54 (Sydney, Melbourne, Brisbane). Pay TV audience: Total AB. Source: MindShare Sydney.



                                                                                                                          TOURISM NEW ZEALAND ANNUAL REPORT 2007–2008 19
          COUNTRY                    MEDIA         POTENTIAL                   JAN-JUNE 2008 ACTUAL
                                                   AUDIENCE
      Australia12                                                    Reach %           Freq.          Projections
                                                                                                        (000s) /
                                                                                                      Impressions
                               Total Television
                                   Sydney            612,000          91.6%            9.88              6,427
                                   Melbourne         448,000         90.49%            8.87              3,473
                                   Brisbane          258,000         95.83%            9.51              2,353
      What’s On                TNZ Only
                                   Sydney            612,000          91.6%            9.88              6,427
                                   Melbourne         448,000         90.49%            8.87              3,473
                                   Brisbane          258,000         95.83%            9.51              2,353
      100% Pure NZ             TNZ Brand
                                   Sydney               N/A            N/A             N/A                N/A
                                   Melbourne            N/A            N/A             N/A                N/A
                                   Brisbane             N/A            N/A             N/A                N/A
                               Christchurch
                                   Sydney            602,000          55%              2.29               762
                                   Melbourne         473,000          67%              2.67               795
                                   Brisbane          300,000          62%              2.69              430
                               Christchurch
                               Pay Television        236,000          8.25%             1+                N/A
                               Wellington
                                   Sydney            607,000          55%              2.04              680
                                   Melbourne         440,000         51.53%            2.15              505
                                   Brisbane             N/A            N/A             N/A                N/A
                               Wellington Pay
                               Television            124,000          5.09%             1+                N/A
                               Pay Television
                                   National          408,000         13.07%             1+                N/A
                               Cinema
                                                  450,000 – Box
                                   National       Office for Period    9.4%              1+                N/A
                                                                                                      24.5 million
                               Online                   N/A           49%              4.63           impressions




       DID YOU
       KNOW?

       australia is
       new zealand  's
       biggest market for
       international visitors
       with almost one
       million arrivals
       every year




20 TOURISM NEW ZEALAND ANNUAL REPORT 2007–2008
  COUNTRY                MEDIA            POTENTIAL                    J U LY - D E C 2 0 0 7 A C T U A L                        JAN-JUNE 2008 ACTUAL
                                          AUDIENCE
                                                                   Reach              Freq.          Impressions            Reach              Freq.           Impressions
                                                                     %                                                        %
  UK                  TV                   23,700,000                38%               2.3            21,112,000            42.3%               2.7             24,089,000
                      Cinema               23,700,000               5.8%               1.6            2,507,934               N/A               N/A                  N/A
                      OOH DEPS                   N/A                 N/A               N/A                 N/A                N/A               N/A              2,150,232
                      OOH
                                                 N/A                 N/A               N/A                 N/A               10%                3.5                  N/A
                      Transvision
                      OOH
                                                 N/A                 N/A               N/A                 N/A                N/A               N/A               441,666
                      Sidetrack
                      Online
                                                 N/A                 N/A               N/A                 N/A                N/A               2.81             1,670,739
                      Ben Fogle
                      Online
                      Brand                      N/A                 N/A               N/A                 N/A                N/A               2.57             9,625,872
                      Phase 2
                      Online
                                                 N/A                 N/A               N/A                 N/A                N/A              4.08             8,280,265
                      Rambling
                      Online
                      Brand                      N/A                 N/A               N/A            34,513,121              N/A               N/A                  N/A
                      Phase 1
                      Online
                                                 N/A                 N/A               N/A                 N/A                N/A              2.59             4,232,854
                      Partners


Public Relations and International Media Programme
Measure
Report quarterly on the size of circulation/audience reached through articles and items broadcast by media representatives hosted by
Tourism New Zealand13.


Result                                                                                                                                                             S TAT U S

  A total circulation/audience of 998,481,269 was reached during the year (comprising a print circulation of                                                       Achieved
  103,245,326; broadcast audience of 686,637,606; and online audience of 208,598,337).


Measure
Report quarterly on the number of international media visits hosted in New Zealand and highlights.


Result                                                                                                                                                             S TAT U S

  A total of 524 media were hosted during 2007/08.                                                                                                                 Achieved


Share of Voice
Measure
Report in Q3 on Tourism New Zealand’s share of voice in the four key markets of Australia, UK, USA and Japan, expressed as a trend
since 2003.


Result                                                                                                                                                             S TAT U S
  A report on Tourism New Zealand’s share of voice in the four key markets of Australia, UK, USA and Japan was                                                     Achieved
  provided in Quarter Three. Tourism New Zealand’s share of voice 2007 (based on Competitive Ranking Charts 2007
  by MindShare) were:
  Australia                                                                             12%
  UK                                                                                    3%
  USA                                                                                   0.5%
  Japan                                                                                 4%



13 TNZ has limited and in most cases no control over when articles or items are published or broadcast by those international media hosted. TNZ will report on the audience or
   circulation for those items that have been published or broadcast during each quarter.



                                                                                                                                TOURISM NEW ZEALAND ANNUAL REPORT 2007–2008 21
    New Zealand’s Share of Voice in Key Markets (2003-2007)
    16.00%

    14.00%                                                                                                                                   AUSTRALIA

    12.00%

    10.00%

                                                                                                                                             JAPAN
     8.00%
                                                                                                                                             UK
     6.00%

     4.00%

     2.00%
                                                                                                                                             USA
     0.00%
                        2002/2003




                                                  2003/2004




                                                                             2004/2005




                                                                                                        2006




                                                                                                                                   2007
    Events
    Measure
    Events used to leverage off the global brand campaign.


    Result                                                                                                                                   S TAT U S

      Tourism New Zealand supported eight events during the year.                                                                            Achieved

      Events supported through Tourism New Zealand only:

      Montana World of WearableArt Awards – Wellington, New Zealand
      Giant Rugby Ball, Rugby World Cup – Paris, France
      New Zealand Paradise Week – Roppongi Hills, Tokyo, Japan
      World Environment Day – Wellington, New Zealand
      Matariki – Wellington, Northland, New Zealand.

      Events supported through New Zealand Major Events Funds where Tourism New Zealand was the lead agency:

      Michael Hill New Zealand Golf Open – Queenstown, New Zealand
      New Zealand Air Games – Central Otago/Wanaka, New Zealand
      American Express Queenstown Winter Festival.

      A full evaluation report was provided on two major events: New Zealand Paradise Week 2007 and
      Rugby World Cup 2007 – the New Zealand Rugby Clubrooms.



    Market Evaluation
    Measure
    Complete, in partnership with the Ministry, the first of the scheduled evaluations, as per agreed evaluation plan (30 June 2008). For
    2007/2008, an Australian market evaluation will be completed by Tourism New Zealand in partnership with the Ministry (with the
    methodology and process to be agreed between TNZ and the Ministry) and the results reported to the Minister of Tourism by 30 June
    2008. This evaluation will include an assessment of the effectiveness of TNZ’s objectives for this market.


    Result                                                                                                                                   S TAT U S

      During the year, Tourism New Zealand provided the Ministry with data to complete the first of the scheduled                             Deferred
      market evaluations. The report back to the Minister has been deferred to later in the 2008 calendar year with
      agreement from the Ministry.


    The total cost of delivering outputs under the Campaign category is $48,228 million.




    14 Data for 2002/03-2004/05 sourced from Mitchell Media; data for 2006-2007 based on Competitive Ranking Charts provided by MindShare.



22 TOURISM NEW ZEALAND ANNUAL REPORT 2007–2008
MARKETING OF
NEW ZEALAND AS A
VISITOR DESTINATION:

The channel component of Tourism New Zealand’s strategy is directed towards converting intention to travel to New Zealand into
actual arrivals – using both internet technology and the travel distribution system to assist in the conversion process. Tourism
New Zealand’s consumer and trade marketing activities also provide a local presence in key overseas markets that reinforce the
messages in the 100% Pure New Zealand campaign. These activities are complemented by online marketing – using Tourism
New Zealand’s consumer website, www.newzealand.com, as a tool for providing information about New Zealand and systems to
facilitate planning and reservations for travel to our country.

Proportion of Interactive Travellers amongst Holiday Arrivals
Measure
Increase the proportion of Interactive Holiday Travellers® amongst all holiday arrivals from 61% to 65% by 30 June 2008.
The latest available Interactive Traveller percentages (year to date) will be reported quarterly in the form of a trend chart.


Result                                                                                                                     S TAT U S

 In YE June 2008, 62.8% of all holiday arrivals were Interactive Travellers. Trend charts were provided in               Not Achieved
 quarterly reports during the year where new International Visitor Survey (IVS) data was available.


Holiday Arrivals
Measure
Increase holiday arrivals from the 2006/07 target of 1,209,300 to 1,278,500 by 30 June 2008.


Result                                                                                                                     S TAT U S

 There were 1,209,241 holiday arrivals in YE Jun 2008.                                                                   Not Achieved


Visitor Expenditure
Measure
Total visitor expenditure exceeds visitor growth by 2.5% (as measured by the International Visitor Survey). Provide quarterly update.


Result                                                                                                                     S TAT U S

 For the YE June 2008, total visitor expenditure exceeded total visitor growth by 3.8% (ie 1.3% above target).              Achieved
 Quarterly updates were provided.




  ONLINE
  A youtube
  homepage
  takeover was
  staged in
  august



                                                                                                   TOURISM NEW ZEALAND ANNUAL REPORT 2007–2008 23
    Consumer Website
    Measure
    Increase the average number of unique users of the www.newzealand.com tourism home page per month.
    Trend data will be provided on a quarterly basis.


    Result                                                                                                                     S TAT U S

      The average number of unique users of the www.newzealand.com tourism home page per month was                             Achieved
      509,769 (up from a monthly average of 337,258 in 2006/07). Traffic was significantly higher in the April-June
      2008 quarter which was largely due to new campaign activity in the China market. Trend data was provided
      on a quarterly basis.


    Measure
    Maintain satisfaction levels for www.newzealand.com by visitors to New Zealand at or above 90% by 30 June 2008.


    Result                                                                                                                     S TAT U S

      For 2007/08, satisfaction with www.newzealand.com averaged 7.7 (all visitors) and 7.8 (Interactive Travellers)          Not Achieved
      which is rated on a ten point scale – ten being extremely satisfied. For 2006/07, the equivalent scores were
      7.8 (all visitors) and 7.9 (Interactive Travellers). This result has been collected as part of the Visitor Experience
      Monitor project since 2006/07, and prior to that it was taken from the www.newzealand.com Popup Survey.
      Therefore it is not possible to compare results before and after 2006/07.


    Trade Marketing Strategy
    Measure
    Report on the effectiveness of the Trade Marketing Strategy which is focused on the performance of selected wholesalers and the
    quality of their representation of the New Zealand tourism product.


    Result
    Quarterly reports were provided on the effectiveness of Tourism New Zealand’s Trade Marketing Strategy,
    which is an ongoing initiative designed to identify the operators in each market who Tourism New Zealand
    can work with effectively to sell destination New Zealand. Implementation of the Strategy progressed well
    during the year. Key results are provided:                                                                                 S TAT U S

      North America – This year conversion-focused partnership work has been undertaken with 12 partners                       Achieved
      including Air New Zealand and Qantas to promote travel in April, May and August. Canada trade partners are
      seeing stronger awareness of New Zealand due to the 100% Pure campaign and this is resulting in business
      growth.
      Australia – Approximately 20 key companies and trade partners have been focused on in the Australian
      market this year. All have been contributors at various times to the ‘What’s On’ campaign, providing travel
      deals to support the campaign.
      UK/Europe – There has been significant improvement to New Zealand representation in sellers’ programmes
      over the past 12 months due to the International Marketing Alliance (Regional Tourism Organisation
      groupings) project process. Improvements have been seen in the depth of product sold in existing regions,
      the addition of new regions sold and improvements in the way New Zealand programmes are presented in
      brochures and on websites.
      Japan – The key partners who have applied the guidance and development from Tourism New Zealand in the
      last year are now experiencing good growth from the changes that they have implemented. Those partners
      who have not shown as much willingness to adapt to the changing market needs are now struggling in the
      challenging market environment.
      China – With the 100% Pure campaign being launched in China this year and focused key partner trade
      activity, the interest in selling New Zealand is high. Significant focus has been applied to developing deeper
      New Zealand knowledge both at a product and frontline level and this will be ongoing into the next financial
      year.
      India – The brochures of Tourism New Zealand’s key partners have seen significant improvement compared
      to the rest of the market. Their business has also seen growth in terms of value and length of stay.




24 TOURISM NEW ZEALAND ANNUAL REPORT 2007–2008
Trade Training
Measure
Provide a quarterly report on the number of international travel sellers and product planners engaged with through trade training
seminars and conferences, roadshows, online training modules and familiarisation visits.


Result                                                                                                                     S TAT U S

 Quarterly reports were provided on the number of international travel sellers and product planners Tourism                 Achieved
 New Zealand engaged with during the year through its trade training programme.

 In total, 21,356 international travel sellers and product planners undertook training during the year via trade
 training seminars and conferences, roadshows, online training modules and familiarisation visits.


Measure
International travel seller and product planner satisfaction with Tourism New Zealand’s trade training activities (target: at or above
90%).


Result                                                                                                                     S TAT U S

 Average international travel seller and product planner satisfaction with Tourism New Zealand’s trade training            Achieved
 activities was 95% for the year.


Measure
The number of online training modules completed by 30 June 2008.


Result                                                                                                                     S TAT U S

 A total of 11,227 online trade training modules were completed in 2007/08 (exceeding the planned target of                Achieved
 10,000).


Tourism Websites
Measure
Provide quarterly update on development work undertaken on the Japanese and Korean tourism websites.


Result                                                                                                                     S TAT U S

 During the year, the consumer website was fully translated into Japanese and Korean with all ongoing                      Achieved
 changes to the English site now carried through to the Japanese and Korean sites.


Measure
Provide a quarterly update on progress made towards upgrading the Chinese tourism website (with the upgraded site to be completed
by 31 January 2008).


Result                                                                                                                     S TAT U S

 Quarterly updates were provided during the year on progress towards upgrading the Chinese tourism website.                Achieved
 During the year, the simplified Chinese consumer website was fully translated, including Qualmark-rated operator
 listings. All ongoing changes to the English site are carried through to the Chinese site.


Approved Destination Status (ADS) Monitoring Unit Establishment
Measure
Provide a quarterly update on the establishment of an ADS monitoring unit in New Zealand.


Result                                                                                                                     S TAT U S

 Quarterly updates were provided on the establishment of an ADS monitoring unit in New Zealand. During                      Achieved
 the year, Tourism New Zealand’s China Monitoring Unit completed a first round of ADS reviews, established
 systems to monitor compliance with the Code by ADS-approved tour operators, carried out investigations on
 identified breaches of the Code, and established relationships with ADS approved tour operators as well as
 key government and non-government agencies relevant to the Unit’s operations.


The total cost of delivering outputs under the Channel category is $16,622 million.




                                                                                                   TOURISM NEW ZEALAND ANNUAL REPORT 2007–2008 25
    MARKETING OF
    NEW ZEALAND AS A
    VISITOR DESTINATION:

    New Zealand will always be a niche player in world tourism given our geographic distance from most main markets and the
    comparatively high cost to travel here. For this reason, Tourism New Zealand’s goal behind its capability strategy is to focus on
    ensuring New Zealand provides a quality experience for visitors. This ensures visitor satisfaction levels and word-of-mouth promotion
    of New Zealand as a destination remains high.

    Key activities within this output are market research, communication with the industry and other key stakeholders, providing support
    for the Qualmark quality assurance scheme and visitor information services provided by i-SITE New Zealand.

    New Zealand as a Holiday Destination
    Measure
    At least 80% of Interactive Travellers® are very likely to recommend New Zealand as a holiday destination by 30 June 2008.


    Result                                                                                                                S TAT U S

      In 2007/08, 85% of Interactive Travellers were very likely to recommend New Zealand as a holiday                    Achieved
      destination.


    Corporate Communications
    Measure
    Provide a quarterly report on the number of user sessions for www.tourismnewzealand.com


    Result                                                                                                                S TAT U S

      Quarterly reports were provided on the number of user sessions for www.tourismnewzealand.com. Tourism                Achieved
      New Zealand’s corporate website attracted a total of 212,885 user sessions during the 2007/08 year.


    Measure
    Provide a quarterly report on the number of stakeholder publications (Tourism News, Regional Rap) and face-to-face engagement
    with the industry undertaken by Tourism New Zealand.


    Result                                                                                                                 S TAT U S

      Quarterly reports were provided on the number of stakeholder publications and face-to-face engagements               Achieved
      with the industry undertaken by Tourism New Zealand during the year.

      Stakeholder publications:

      Tourism News: 27,000 copies of Tourism News were distributed during the year.

      Regional Rap: 5,904 copies of Regional Rap were sent to readers over the year.

      Face-to-face engagements with the industry over the year totalled 5,826.




26 TOURISM NEW ZEALAND ANNUAL REPORT 2007–2008
Subsidiary Commitments
Measure
Increase the number of Qualmark licence holders from 1,900 to 2,100 by 30 June 2008.


Result                                                                                                                S TAT U S

 There are 2,154 licence holders as at 30 June 2008.                                                                  Achieved


Measure
Maintain the attrition rate of Qualmark licence holders below 5% as at 30 June 2008.


Result                                                                                                                S TAT U S

 The attrition rate of Qualmark licence holders was maintained below 5% during the year.                              Achieved


Measure
Report quarterly on progress made on the development and implementation of Qualmark’s environmental accreditation programme
(with additional environmental criteria to be included in Qualmark assessments from January 2008).


Result                                                                                                                S TAT U S

 Quarterly reports were provided on progress made on the development and implementation of Qualmark’s                 Achieved
 environmental accreditation programme. The programme was launched at TRENZ in May 2008.


Measure
A total of 44 i-SITE centres are assessed and required to meet the Qualmark-based i-SITE membership standards by 30 June 2008,
to ensure network standards are maintained.


Result                                                                                                                S TAT U S

 A total of 42 i-SITE centres were assessed during the year and met the requirements of the Qualmark-based           Substantially
 i-SITE membership standards. Assessment of the Hamilton i-SITE was rescheduled from June to July 2008                Achieved
 due to unforeseen circumstances and the Stewart Island i-SITE was unable to be assessed as work required
 for the accreditation process was still to be completed at year-end.


Measure
A total of 44 i-SITE centres are mystery shopped to assess and improve the quality of customer service levels by 30 June 2008.


Result                                                                                                                S TAT U S

 All 44 of the scheduled i-SITE centres were mystery shopped by 30 June 2008 and reports subsequently                 Achieved
 distributed to i-SITE managers.


The total cost of delivering outputs under the Capability category is $19,701 million.




  DESTINATION
  NEW ZEALAND
  new zealand    's
  i-site visitor
  centres provide
  higH-quality
  information to
            ,
  over oo ooo
  international
  visitors
  annually




                                                                                              TOURISM NEW ZEALAND ANNUAL REPORT 2007–2008 27
    MANAGEMENT STATEMENTS




    Impact of Tourism New Zealand
                                                                    for New Zealand as a holiday destination and making
    Outputs on International Visitor                                it easy for them to plan and book their travel through
    Arrivals and Expenditure                                        online tools

    The number of visitors to New Zealand and the amount they
    spend is dependent on many variables. These include:            destination New Zealand in order to convert visitor
                                                                    interest into actual travel

         and the efforts of other National Tourism Offices
                                                                    including insights into the needs and preferences
                                                                    of international consumers, to better inform their
         affecting travel and expenditure decisions                 activities


                                                                    New Zealand’s commitments to Qualmark Limited and
         routes and ticket pricing                                  i-SITE New Zealand) to ensure the New Zealand
                                                                    tourism industry delivers a quality system which
                                                                    maintains visitor satisfaction at a high level and
         in countries of origin.                                    encourages positive word-of-mouth about the
    International visitor arrivals for the year ending              New Zealand experience.
    30 June 2008 were 2.48 million, a 0.9% increase
    over the previous year. International visitor expenditure
    (sourced from the revised International Visitor Survey       Equal Employment Opportunities (EEO)
    excluding airfare receipts) for the year ended 30 June
                                                                 Under Section 151 (1)(g) of the Crown Entities Act 2004,
    2008 was $6,177 million, representing a 4.7% increase
                                                                 Tourism New Zealand is required to provide information
    over the previous year.
                                                                 about compliance with obligations to be a good employer
    While it is not possible to determine the extent to which    (including our Equal Employment Opportunities
    Tourism New Zealand’s outputs directly impacted on           Programme).
    visitor numbers and spend for the year given the range
                                                                 Women continue to be well represented at all levels in the
    and complexity of externalities involved, Tourism
                                                                 organisation. Tourism New Zealand recognises the need
    New Zealand’s delivery of outputs in 2007/08, and in
                                                                 for the greater involvement of    , and continues to
    previous years, will have contributed to the year’s growth
                                                                 promote this through the implementation of our
    in visitor arrivals and expenditure through:
                                                                 Development Strategy and        Graduate Development
                                                                 Programme.
         destination through continued delivery of the
         100% Pure New Zealand campaign in key
         international markets



28 TOURISM NEW ZEALAND ANNUAL REPORT 2007–2008
Tourism New Zealand Workplace Profile as at 30 June 2008
                                                        DIRECT REPORTS
                                                         TO EXECUTIVE
                                                                                 OTHER MANAGERS                  PROFESSIONAL
                                                         MANAGERS OR
                                EXECUTIVE                                           W I T H S TA F F             AND SUPPORT
                                                           S TA F F W I T H
                               MANAGEMENT                                         RESPONSIBILITY                    S TA F F
                                                        RESPONSIBILITY
                                                                                    (4TH TIER)
                                                          FOR SPECIFIC
                                                         OUTPUT AREAS
 NZ European
 Male                                38%                        30%                        19%                           6%
 Female                              50%                        48%                        38%                          42%



 Male                                                                                                                    3%
 Female                                                          9%                                                      2%
 Pacific Peoples
 Male
 Female                                                                                                                  2%
 Asian
 (inc South Asian)
 Male                                                                                       6%                           6%
 Female                                                          4%                        25%                          27%
 Other
 Male                                12%                         9%                        6%
 Female                                                                                    6%                           12%
 Percentage of Group
 of Total Organisation                7%                        20%                        14%                          59%


Leadership, Accountability and Culture
Tourism New Zealand is committed to being a good employer and, as such, to managing and leading all staff fairly and properly in all
aspects of their employment. Our Executive Team and broader management group is committed to demonstrating leadership and
accountability in all areas of EEO, and from an EEO perspective, this means a commitment to and activity in the following areas:

Recruitment, Selection and Induction
Our recruitment and selection procedure has been developed to ensure that all prospective employees are given the opportunity to
participate equally in the recruitment process. Interview questions are drawn from a carefully designed question bank which contains
questions designed to ensure that the selected applicant’s skills and abilities are the best fit with the position and organisation.
This includes appropriate support for        and Pacific peoples and people with English as a second language during the
recruitment and selection process.

We are now in the second year of running our three-day ‘Welcome to Tourism New Zealand’ programme. This programme runs
between three and four times each year and is led by a member of our Executive Team. Each programme includes a cultural
component, which explores the significance of aspects of tikanga       for our organisation, and includes mihi and waiata training.

Tourism New Zealand has continued with an active        Graduate Recruitment programme and we have recruited a total of five
      graduates. Four of these continue to be employed by Tourism New Zealand in a variety of roles, and one has left Tourism
New Zealand and is now employed by a Regional Tourism Organisation.




                                                                                                 TOURISM NEW ZEALAND ANNUAL REPORT 2007–2008 29
    Employee Development, Promotion and Exit
    Tourism New Zealand has an active management and leadership development programme. This includes an annual leadership
    development programme for those identified with potential for leadership and management development. Participants are nominated
    by their managers on the basis of performance and potential.

    Other training and development needs are identified on an individual basis and are agreed between the manager and employee.
    Development programmes are selected based on individual development needs.

    Te Wiki o Te Reo          and Matariki are also actively supported by Tourism New Zealand with a planned programme to provide
    additional skills training and learning opportunities.

    Tourism New Zealand has also continued to build on our earlier programme of work designed to develop and grow our organisational
    capability in tikanga      . For the year ending June 2008, it is great to see that our    Development Strategy has, through its
    implementation, become a critical, multidimensional part of our organisation. As discussed, our Welcome Programme includes a
    significant cultural element, and this enables Tourism New Zealand to deliver on part of our international marketing promise around
    the cultural element of the New Zealand experience as our staff have a sound understanding of tikanga         and this in infused
    throughout the organisation.

    Flexibility and Work Design
    Tourism New Zealand has an active programme of supporting flexible working arrangements and job design. We continue to:


         accommodate child care needs;




    Remuneration, Recognition and Conditions
    The annual salary review and internal promotions are based on individual skills and experience, and recognise performance
    regardless of ethnicity, gender or physical ability.

    Individuals identified as not meeting the requirements of their role are provided with support, training and development where
    required to assist them to achieve success in their role.

    Harassment and Bullying Prevention
    Tourism New Zealand has a very strictly adhered to policy and procedure for dealing with work place harassment and bullying. In the
    12 months, there have been no reported allegations relating to harassment and/or bullying.

    Safe and Healthy Environment
    Tourism New Zealand has a good and safe working environment and we have published and well-understood policies which have
    actively encouraged staff involvement. Additional support for people, particularly those with disabilities, has over the last 12 months
    included specialist work place assessments and the provision of special equipment to ensure that employees are able to contribute
    effectively in all aspects of their working life.




30 TOURISM NEW ZEALAND ANNUAL REPORT 2007–2008
FINANCIAL STATEMENTS




Statement of Responsibility
In terms of the Crown Entities Act 2004, the Board is responsible for the
preparation of the New Zealand Tourism Board’s financial statements and
statement of service performance, and for the judgments made in them.
The Board of New Zealand Tourism Board has the responsibility for
establishing, and has established, a system of internal control designed to
provide reasonable assurance as to the integrity and reliability of financial
reporting.
In the Board’s opinion, these financial statements and statement of service
performance fairly reflect the financial position and operation of the
New Zealand Tourism Board Group for the year ended 30 June 2008.
The Board of Directors of New Zealand Tourism Board and Group authorised
these financial statements for issue on 31 October 2008.
Signed on behalf of the Board of Directors:




G. Muir                                S. Johnstone
Chair                                  Deputy Chair
31 October 2008                        31 October 2008




                                                                               TOURISM NEW ZEALAND ANNUAL REPORT 2007–2008 31
Statement of Financial Performance for the year ended 30 June 2008
                                                                                                            GROUP                                    PARENT
                                                                                                 2008            2008               2007     2008       2008      2007
                                                                              Notes             Actual         Budget           Actual      Actual     Budget     Actual
                                                                                                $000s           $000s           $000s       $000s      $000s     $000s
   Income
   Revenue from Crown                                                           2             75,071          74,821          74,246       75,071     74,821    74,246
   Interest income                                                                                711             505               866      707        500        859
   Other revenue                                                                3               7,093           4,781          6,295        4,817      2,567     4,243
   Foreign exchange gains                                                       4               7,999                 0         2,617       7,999          0     2,617
   Total Income                                                                               90,874          80,107         84,024        88,594     77,888    81,965


   Expenditure
   Marketing expenses                                                                        63,822           57,342          62,121       63,044     58,081    61,631
   Other expenses                                                               5             19,921          21,845         18,633        18,428     18,908    17,022
   Depreciation & Impairment                                                                      625             751               772      602         745       738
   Foreign exchange losses                                                      6              2,477                  0         7,128       2,477          0     7,128
   Total Expenditure                                                            7            86,845           79,938         88,654        84,551     77,734    86,519


   Net Operating Surplus/(Deficit) before Taxation                                              4,029              169        (4,630)        4,043        154    (4,554)


   Income tax expense                                                           20                    0               0                0        0          0          0
   Minority interests in profits/(losses)
   of subsidiaries                                                              8                 (61)                0              18         0          0          0
   Share of loss/(gain) of associate company                                    9                     3               0              (5)        0          0          0
   Net Surplus/(Deficit) for the year                                                           4,087              169        (4,643)        4,043        154    (4,554)

The notes and accounting policies on pages 35 to 56 form part of and are to be read in conjunction with these financial statements




     32 TOURISM NEW ZEALAND ANNUAL REPORT 2007–2008
Statement of Financial Position as at 30 June 2008
                                                                                                            GROUP                                       PARENT
                                                                                                 2008            2008               2007        2008         2008         2007
                                                                              Notes             Actual         Budget           Actual         Actual       Budget        Actual
                                                                                                $000s           $000s           $000s         $000s         $000s        $000s
   Current Assets
   Cash                                                                         10             5,200           2,951           3,435          5,077        2,809         3,272
   Receivables                                                                  11             1,324              640           1,193         1,286           600        1,135
   Prepayments & other current assets                                                          1,029              320          2,891          1,018           300        2,884
   Derivative financial instruments                                              12              1,514                 0                0       1,514             0              0
                                                                                               9,067            3,911           7,519         8,895         3,709        7,291
   Non-current Assets
   Property plant and equipment                                                 13             2,165           1,839            1,616         1,943        1,826         1,609
   Investment in associate                                                      9                     7               5              10             0            0              0
   Accommodation bonds                                                          14                343             335               275         343           335          275
                                                                                               2,515            2,179           1,901         2,286         2,161        1,884
   Total Assets                                                                              11,582            6,090           9,420         11,181         5,870        9,175


   Current Liabilities
   Creditors and other payables                                                 15              4,613           3,135           4,204          4,203        2,935        3,954
   Employee entitlements                                                        16                927             785               777          891          760          754
   Provisions                                                                   17                303                 0             220          303             0         220
   Derivative financial instruments                                              12                  20                0         2,526             20             0       2,526
                                                                                                5,863           3,920           7,727          5,417        3,695        7,454
   Total Liabilities                                                                            5,863           3,920           7,727          5,417        3,695        7,454
   Net Assets                                                                                   5,719           2,170           1,693          5,764        2,175         1,721


   Equity
   Shareholder's equity                                                                         1,805           1,805           1,805          1,805        1,805        1,805
   Retained earnings                                                                            3,864             365           (223)          3,959          370          (84)
   Minority interests                                                           8                   50                0              111            0            0              0
   Total Equity                                                                                 5,719           2,170           1,693          5,764        2,175         1,721




Statement of Changes in Equity for the year ended 30 June 2008
                                                                                                            GROUP                                       PARENT
                                                                                                 2008            2008               2007        2008         2008         2007
                                                                              Notes             Actual         Budget           Actual         Actual       Budget        Actual
                                                                                                $000s           $000s           $000s         $000s         $000s        $000s


   Balance at 1 July                                                                           1,693           2,001            6,318          1,721        2,021        6,275


   Movement in minority interest                                                                  (61)                0              18             0            0              0
   Net surplus/(deficit) for the year                                                           4,087              169        (4,643)          4,043           154      (4,554)


   Balance at 30 June                                                                          5,719            2,170          1,693          5,764         2,175        1,721

The notes and accounting policies on pages 35 to 56 form part of and are to be read in conjunction with these financial statements




                                                                                                                               TOURISM NEW ZEALAND ANNUAL REPORT 2007–2008 33
Statement of Cash Flows for the year ended 30 June 2008
                                                                                                            GROUP                                      PARENT
                                                                                                 2008            2008               2007      2008        2008       2007
                                                                              Notes             Actual         Budget           Actual        Actual     Budget      Actual
                                                                                                $000s           $000s           $000s        $000s       $000s      $000s
   Cash flows from operating activities


   Crown revenue                                                                              75,071          74,821          74,246        75,071      74,821     74,246
   Interest received                                                                              687             502               870        683         500        863
   Other revenue                                                                               6,695           4,640           2,028         4,392       2,450      3,895
   Payments to suppliers and employees                                                     (79,545)        (78,302)        (78,466)        (77,468)    (76,132)   (80,298)
   Goods and services tax (net)                                                                   274                 0             (86)       306           0       (100)
   Net cash from operating activities                                           18             3,182            1,661        (1,408)         2,984       1,639     (1,394)


   Cash flows from investing activities


   Sale of property plant and equipment                                                             30                0                9         30          0           9
   Repayment of accommodation bonds                                                                 10                0              13          10          0          13
   Purchase of property plant and equipment                                                   (1,551)           (840)           (683)       (1,313)      (830)       (681)
   Payments for accommodation bonds                                                               (55)                0             (29)       (55)          0        (29)
   Net cash outflow from investing activities                                                 (1,566)            (840)           (690)       (1,328)      (830)      (688)


   Net increase/(decrease) in cash held                                                         1,616             821        (2,098)         1,656         809     (2,082)


   Effects of exchange rate on foreign currency
   balances                                                                                       149                 0         (732)          149           0       (732)
   Opening cash brought forward                                                                3,435            2,130          6,265         3,272       2,000      6,086
   Cash at end of year                                                          10             5,200            2,951          3,435         5,077       2,809      3,272

The notes and accounting policies on pages 35 to 56 form part of and are to be read in conjunction with these financial statements




     34 TOURISM NEW ZEALAND ANNUAL REPORT 2007–2008
Notes to the Financial Statements for the year ended 30 June 2008

  Note 1
  Statement of accounting policies for the year ended 30 June 2008


 (a) Basis of preparation                                                    Tourism New Zealand will adopt the amended standard for the
 Tourism New Zealand is a Crown entity as defined by the Crown                year ending 30 June 2009 and expects the impact of adopting
 Entities Act 2004 and is domiciled in New Zealand. As such,                 the new standard to be minimal.
 Tourism New Zealand’s ultimate parent is the New Zealand Crown.
                                                                         (c) Basis of consolidation
 Tourism New Zealand’s financial statements have been prepared            The consolidated financial statements comprise the financial
 in accordance with New Zealand generally accepted accounting            statements of New Zealand Tourism Board trading as Tourism
 practice and the requirements of the Crown Entities Act 2004.           New Zealand and its subsidiaries as at 30 June each year (the
 The financial statements have been prepared on a historical cost         Group).
 basis modified by the revaluation of certain assets and liabilities as
                                                                         Subsidiaries are combined using the purchase method of
 identified in this statement of accounting policies.
                                                                         combination. The financial statements of subsidiaries are prepared
 For the purposes of financial reporting, Tourism New Zealand is          for the same reporting period as the parent company, using
 classified as a Public Benefit Entity.                                    consistent accounting policies.

 (b) Statement of compliance                                             Adjustments are made to bring into line any dissimilar accounting
 The financial statements have been prepared in accordance with           policies that may exist.
 New Zealand equivalents to International Financial Reporting
                                                                         All intercompany balances and transactions, including unrealised
 Standards (NZ IFRS) and other applicable Financial Reporting
                                                                         profits arising from intra-group transactions, have been eliminated
 Standards as appropriate for public benefit entities.
                                                                         in full. Unrealised losses are eliminated unless costs cannot be
 This is the first set of financial statements prepared based on NZ        recovered.
 IFRS and comparatives for the year ended 30 June 2007 have
                                                                         Subsidiaries are consolidated from the date on which control is
 been restated accordingly. Reconciliations of equity at 1 July 2006
                                                                         transferred to the Group and cease to be consolidated from the date
 and 30 June 2007 and surplus/deficit for the year ended 30 June
                                                                         on which control is transferred out of the Group.
 2007 under NZ IFRS to the balances reported in the 30 June 2007
 financial statements are detailed in Note 31.                            Where there is loss of control of a subsidiary, the consolidated
                                                                         financial statements include the results for the part of the reporting
 The financial statements are presented in New Zealand dollars and
                                                                         period during which Tourism New Zealand has control.
 all values are rounded to the nearest thousand dollars ($000). The
 functional currency is New Zealand dollars.                             Business combinations that occurred prior to the date of transition
                                                                         to NZ IFRS have not been restated retrospectively.
 Standards, amendments and interpretations issued but not yet
 effective that have not been early adopted and which are relevant to    (d) Investment in associate
 Tourism New Zealand include:                                            The Group’s investment in associates is accounted for under
                                                                         the equity method of accounting in the consolidated financial
                 Presentation of Financial Statements is effective for
                                                                         statements.
     reporting periods beginning on or after 1 January 2009. The
     revised standard requires information in financial statements        An associate is an entity in which the Group has significant
     to be aggregated on the basis of shared characteristics             influence and which is not a subsidiary nor a joint venture.
     and introduces a statement of comprehensive income. The
                                                                         The annual financial statements of the associate are used by the
     statement of comprehensive income will enable readers to
                                                                         Group to apply the equity method. The reporting dates of the
     analyse changes in equity resulting from non-owner changes
                                                                         associate and the Group are identical and both use consistent
     separately from transactions with the Crown in its capacity as
                                                                         accounting policies.
     “owner”. The revised standard gives Tourism New Zealand
     the option of presenting items of income and expense and            The investment in the associate is carried in the balance sheet at
     components of other comprehensive income either in a single         cost plus post-acquisition changes in the Group’s share of net assets
     statement of comprehensive income with subtotals, or in two         of the associate, less any impairment in value. The consolidated
     separate statements (a separate income statement followed by        income statement reflects the Group’s share of the results of
     a statement of comprehensive income). Tourism New Zealand           operations of the associate.
     intends to adopt this standard for the year ending 30 June
                                                                         Where there has been a change recognised directly in the
     2010, and is yet to decide whether it will prepare a single
                                                                         associate’s equity, the Group recognises its share of any changes
     statement of comprehensive income or a separate income
                                                                         and discloses this, when applicable in the consolidated statement of
     statement followed by a statement of comprehensive income.
                                                                         changes in equity.
                                            Inventories. In November
                                                                         (e) Foreign currency
     2007 the New Zealand Accounting Standards Review Board
                                                                         Where transactions in foreign currencies have been covered by
     approved an amendment to NZ IAS 2 Inventories, which
                                                                         forward exchange contracts, the rates in those contracts are used
     requires public benefit entities to measure inventory held for
                                                                         to convert the transactions to New Zealand Currency. Otherwise,
     distribution at cost, adjusted when applicable for any loss of
                                                                         transactions are recorded in the functional currency at the exchange
     service potential. Application of the amendment is mandatory
                                                                         rates ruling at the date of the transaction.
     for reporting periods beginning on or after 1 January 2008.




                                                                                                TOURISM NEW ZEALAND ANNUAL REPORT 2007–2008 35
Monetary assets and liabilities denominated in foreign currencies are     reimbursement is recognised as a separate asset but only when
translated at the rate of exchange ruling at the balance sheet date.      the reimbursement is virtually certain. The expense relating to any
                                                                          provision is presented in the Statement of Financial Performance
Exchange gains and losses are recognised in the Statement of
                                                                          net of any reimbursement.
Financial Performance.
                                                                          If the effect of the time value of money is material, provisions are
Non-monetary items that are measured in terms of historical cost in
                                                                          determined by discounting the expected future cash flows at a rate
a foreign currency are translated using the exchange rate as at the
                                                                          that reflects current market assessments of the time value of money
date of the initial transaction.
                                                                          and, where appropriate, the risks specific to the liability.
(f) Property, plant and equipment                                         Where discounting is used, the increase in the provision due to the
Plant and equipment is stated at cost less accumulated depreciation
                                                                          passage of time is recognised as a finance cost.
and any impairment in value.
                                                                          (l) Leases
Depreciation is calculated on a straight-line basis over the estimated
                                                                          The determination of whether an arrangement is or contains a
useful life of the asset as follows:
                                                                          lease is based on the substance of the arrangement and requires
Office equipment                   5 years                                 an assessment of whether the fulfilment of the arrangement
Motor vehicles                    4 – 5 years                             is dependent on the use of a specific asset or assets and the
Furniture and fittings             5 – 8 years                             arrangement conveys a right to use the asset.
Computer equipment                3 years
                                                                          Leases where the lessor retains substantially all the risks and benefits
Leasehold improvements            Up to term of the lease
                                                                          of ownership of the asset are classified as operating leases. Operating
Realised gains and losses arising from the disposal of property,          lease payments are recognised as an expense in the Statement of
plant and equipment are recognised in the Statement of Financial          Financial Performance on a straight-line basis over the lease term.
Performance in the period in which the transaction occurs.
                                                                          The Group does not enter into Finance leases.
Impairment                                                                (m) Revenue
The carrying values of plant and equipment are reviewed for               Revenue is recognised to the extent that it is probable that the
impairment when events or changes in circumstances indicate the           economic benefits will flow to the Group and the revenue can be
carrying value may not be recoverable.                                    reliably measured. The following specific recognition criteria must
If any such indication exists and where the carrying values exceed        also be met before revenue is recognised:
the estimated recoverable amount, the assets are written down to
                                                                          Grants received from the Crown
their recoverable amount. Losses resulting from impairment are
                                                                          Grants received from the Crown are recognised as revenue on receipt.
reported in the Statement of Financial Performance.

(g) Intangible assets                                                     Sale of goods and service
Intangible assets are recorded at cost at acquisition. Where there        Revenue from the supply of goods and services is recognised
is no active market for these assets, or they are determined to           when the significant risks and rewards of ownership of the goods
hold no future economic benefit, they are written off in the year of       have passed to the buyer and can be measured reliably. Risks and
acquisition. Tourism New Zealand has no intangible assets with a          rewards are considered passed to the buyer at the time of delivery
finite life.                                                               of the goods to the customer.

Research and development costs are expensed as incurred.                  Revenue from the supply of services is recognised on a straight line
                                                                          basis over the specified period for the service unless an alternative
(h) Inventories                                                           method better represents the stage of completion of the transaction.
Inventories are valued at the lower of cost and net realisable value.
                                                                          Interest
(i) Trade and other receivables
                                                                          Interest revenue is recognised as interest accrues using the effective
Trade receivables are recognised and carried at original invoice
                                                                          interest method. This is a method of calculating the amortised
amount less an allowance for any uncollectible amounts.
                                                                          cost of a financial asset and allocating the interest income over the
An estimate for doubtful debts is made when collection of the             relevant period using the effective interest rate, which is the rate
full amount is no longer probable. Bad debts are written off when         that exactly discounts estimated future cash receipts through the
identified.                                                                expected life of the financial asset to the net carrying amount of the
                                                                          financial asset.
(j) Cash and cash equivalents
Cash and short-term deposits in the Statement of Financial Position       (n) Income tax
comprise cash at bank and in hand and short-term deposits with an         Tourism New Zealand is exempt from income tax under the
original maturity of three months or less.                                New Zealand Tourism Board Act 1991. Tourism New Zealand’s
                                                                          subsidiaries are subject to income tax.
For the purposes of the Statement of Cash Flows, cash and cash
equivalents consist of cash and cash equivalents as defined above.         Current tax assets and liabilities for the current and prior periods
                                                                          are measured at the amount expected to be recovered from or paid
(k) Provisions                                                            to the taxation authorities based on the current period’s taxable
Provisions are recognised when the Group has a present obligation
                                                                          income. The tax rates and tax laws used to compute the amount are
(legal or constructive) as a result of a past event, and it is probable
                                                                          those that are enacted or substantively enacted by the Statement of
that an outflow of resources embodying economic benefits will be
                                                                          Financial Position date.
required to settle the obligation and a reliable estimate can be made
of the amount of the obligation.                                          Deferred income tax is provided on all temporary differences at the
                                                                          Statement of Financial Position date between the tax bases of assets
Where the Group expects some or all of a provision to be
                                                                          and liabilities and their carrying amounts for financial reporting
reimbursed, for example under an insurance contract, the
                                                                          purposes.


  36 TOURISM NEW ZEALAND ANNUAL REPORT 2007–2008
Deferred income tax liabilities are recognised for all taxable               Cash flows are included in the Statement of Cash Flows on a gross
temporary differences except:                                                basis and the GST component of cash flows arising from investing
                                                                             and financing activities, which is recoverable from, or payable to, the
                                                                             taxation authority are classified as operating cash flows.
    recognition of goodwill or of an asset or liability in a transaction
    that is not a business combination and that, at the time of the          Commitments and contingencies are disclosed net of the amount of
    transaction, affects neither the accounting profit nor taxable            GST recoverable from, or payable to, the taxation authority.
    profit or loss; or
                                                                             (p) Financial instruments
                                                                             Tourism New Zealand uses derivative financial instruments such
    investments in subsidiaries, associates or interests in joint            as foreign currency contracts to manage its exposure to foreign
    ventures, and the timing of the reversal of the temporary                exchange risk arising from its operational activities. Tourism
    difference can be controlled and it is probable that the                 New Zealand does not hold or issue these financial instruments for
    temporary difference will not reverse in the foreseeable future.         trading purposes. Tourism New Zealand has not adopted hedge
                                                                             accounting.
Deferred income tax assets are recognised for all deductible
temporary differences, carry-forward of unused tax credits and               Derivatives are initially recognised at fair value on the date a
unused tax losses, to the extent that it is probable that taxable profit      derivative contract is entered into and are subsequently remeasured
will be available against which the deductible temporary differences         to their fair value at each balance date. Movements in the fair value
and the carry-forward of unused tax credits and unused tax losses            of derivative financial instruments are recognised in the Statement
can be utilised, except:                                                     of Financial Performance.

                                                                             Foreign exchange gains and losses resulting from the settlement
    temporary difference arises from the initial recognition of              of derivative financial instruments and from the translation at year
    an asset or liability in a transaction that is not a business            end exchange rates of monetary assets and liabilities denominated
    combination and, at the time of the transaction, affects neither         in foreign currencies are recognised in the Statement of Financial
    the accounting profit nor taxable profit or loss; or                       Performance.

                                                                             Cash and cash equivalents include cash on hand, cash in transit,
    investments in subsidiaries, associates or interests in joint            bank accounts and deposits with a maturity of no more than three
    ventures, in which case a deferred tax asset is only recognised          months from date of acquisition
    to the extent that it is probable that the temporary difference
                                                                             The fair value of forward exchange contracts is calculated by
    will reverse in the foreseeable future and taxable profit will be
                                                                             reference to current forward exchange rates for contracts with
    available against which the temporary difference can be utilised.
                                                                             similar maturity profiles.
The carrying amount of deferred income tax assets is reviewed at
each Statement of Financial Position date and reduced to the extent
                                                                             (q) Employee Benefits
                                                                             Pension Liabilities. Obligations for contributions to defined
that it is no longer probable that sufficient taxable profit will be
                                                                             contribution retirement plans are recognised in the Statement of
available to allow all or part of the deferred income tax asset to be
                                                                             Financial Performance as they fall due.
utilised.
                                                                             Other Employee Entitlements. Employee entitlements to salaries and
Unrecognised deferred income tax assets are reassessed at each
                                                                             wages, annual leave, long service leave, retiring leave and other similar
Statement of Financial Position date and are recognised to the
                                                                             benefits are recognised in the Statement of Financial Performance
extent that it has become probable that future taxable profit will
                                                                             when they accrue to employees. Employee entitlements to be settled
allow the deferred tax asset to be recovered.
                                                                             within 12 months are reported at the amount expected to be paid. The
Deferred income tax assets and liabilities are measured at the               liability for long-term employee entitlements is reported as the present
tax rates that are expected to apply to the year when the asset is           value of the estimated future cash flows.
realised or the liability is settled, based on tax rates (and tax laws)
                                                                             Termination Benefits. Termination benefits are recognised in
that have been enacted or substantively enacted at the Statement of
                                                                             the Statement of Financial Performance only where there is a
Financial Position date.
                                                                             demonstrable commitment to either terminate employment prior
Deferred tax assets and deferred tax liabilities are offset only if a        to normal retirement date or to provide such benefits as a result of
legally enforceable right exists to set off current tax assets against       an offer to encourage voluntary redundancy. Termination benefits
current tax liabilities and the deferred tax assets and liabilities relate   settled within 12 months are reported at the amount expected to
to the same taxable entity and the same taxation authority.                  be paid, otherwise they are reported as the present value of the
                                                                             estimated future cash flows.
(o) Other taxes
Revenues, expenses and assets are recognised net of the amount of            (r) Contingent Assets and Contingent Liabilities
GST except:                                                                  Contingent assets and contingent liabilities are recorded in the
                                                                             Notes to the Financial Statements at the point at which the
                                                                             contingency is evident. Contingent liabilities are disclosed if the
    is not recoverable from the taxation authority, in which case the
                                                                             possibility that they will crystallise is not remote. Contingent assets
    GST is recognised as part of the cost of acquisition of the asset
                                                                             are disclosed if it is probable that the benefits will be realised.
    or as part of the expense item as applicable; and
                                                                             (s) Segment Reporting
                                                                             Tourism New Zealand’s primary function is to market New Zealand
    included.
                                                                             as a tourism destination. To achieve this, Tourism New Zealand
The net amount of GST recoverable from, or payable to, the taxation          maintains offices in a number of overseas countries. However,
authority is included as part of receivables or payables in the              all Tourism New Zealand’s activities are co-ordinated from
Statement of Financial Position.                                             New Zealand.



                                                                                                     TOURISM NEW ZEALAND ANNUAL REPORT 2007–2008 37
                                                                   GROUP              PARENT

Note 2
Crown revenue

                                                                 2008       2007     2008       2007

                                                                $000s      $000s    $000s      $000s



Crown revenue                                                   70,301     70,301   70,301     70,301
During the year, additional funding was provided by the Crown
for the following:
China                                                            3,025         0     3,025         0
Rugby World Cup                                                  2,925         0     2,925         0
Qualmark New Zealand Ltd                                          529        124      529        124
America's Cup Challenge                                             0       5,000       0       5,000
Visitor Information Network (trading as i-SITE New Zealand)         0        135        0        135
Total revenue received from the Crown                           76,780     75,560   76,780     75,560
Less GST                                                         1,709      1,314    1,709      1,314
Net revenue received from the Crown                             75,071     74,246   75,071     74,246



Note 3
Other revenue

                                                                 2008       2007     2008       2007

                                                                $000s      $000s    $000s      $000s



Sales                                                           2,283       2,058       7          6
Partnership income                                               4,610      4,129    4,610      4,129
Write back of creditors                                           187        101      187        101
Gain on sale of property, plant and equipment                      13          7       13          7
Total other revenue                                              7,093      6,295    4,817      4,243



Note 4
Foreign exchange gains

                                                                 2008       2007     2008       2007

                                                                $000s      $000s    $000s      $000s



Gains on derivative financial instruments                        4,040         43    4,040         43
Foreign exchange gains                                           3,959      2,574    3,959      2,574
Total foreign exchange gains                                     7,999      2,617    7,999      2,617



Note 5
Other expenses include:

                                                                 2008       2007     2008       2007



Personnel expenses
Number of Permanent and fixed term staff                           148        139      124        118




 38 TOURISM NEW ZEALAND ANNUAL REPORT 2007–2008
Note 5 continued

                                                                         GROUP                              PARENT


                                                                       2008           2007                2008              2007

                                                                      $000s          $000s               $000s             $000s



  Salaries and wages                                                  12,062       10,887               11,081            10,019
  Employer superannuation contributions                                 213            186                 203               186
  Increase/(decrease) in employee entitlements (note 16)                150          (102)                 137              (102)
  Other personnel expenses                                             1,490         1,689               1,432             1,634
                                                                      13,915       12,660              12,853             11,737


                                                                       2008           2007                2008              2007

                                                                      $000s          $000s               $000s             $000s

  Personnel costs for New Zealand and Offshore Staff were:
  New Zealand Personnel Expenses – Tourism New Zealand                 7,130         6,430               7,130             6,430
  New Zealand Personnel Expenses – Subsidiaries                        1,062           923                    0                    0
  Offshore Personnel Expenses                                          5,723         5,307               5,723             5,307
                                                                      13,915       12,660              12,853             11,737


                                                                       2008           2007                2008              2007

  Number of ceased Staff paid compensation or other benefits               4               4                   4                    2


                                                                       2008           2007                2008              2007

                                                                      $000s          $000s               $000s             $000s

  Compensation or other benefits paid to ceased staff                     46             79                  46                    54


                                                                       2008           2007                2008              2007

                                                                      $000s          $000s               $000s             $000s

  Auditor’s remuneration
  Amounts received or due and receivable by Ernst & Young
  New Zealand for:
  The audit of the financial report of the Tourism New Zealand Group      81             81                   70                   67
  Other services                                                         39               0                  39                    0
                                                                        120              81                109                    67
  Amounts received or due and receivable by auditors
  other than Ernst & Young New Zealand for:
  The audit of the financial report of subsidiary entities                 5               2                   0                    0
                                                                        125             83                 109                    67


                                                                       2008           2007                2008              2007

                                                                      $000s          $000s               $000s             $000s

  Other expenses
  Loss on sale of property, plant and equipment                         156             26                 156                    37
  Lease expense                                                        2,360         2,215               2,206             2,079
  Directors' remuneration for Parent (See also note 30)                    -              -                204               183




                                                                                 TOURISM NEW ZEALAND ANNUAL REPORT 2007–2008 39
                                                                                 GROUP                             PARENT



Note 6
Foreign exchange losses

                                                                               2008            2007              2008               2007

                                                                              $000s            $000s            $000s              $000s

Losses on derivative financial instruments                                        20            5,037                20             5,037
Foreign exchange losses                                                       2,457            2,091            2,457              2,091
Total foreign exchange losses                                                 2,477            7,128            2,477               7,128



Note 7
Total expenditure of parent

                                                                                                                 2008               2007

                                                                                                                $000s              $000s

Total expenditure by geographic region:
Australia                                                                                                      10,199             10,005
North America                                                                                                   9,674              11,140
UK & Europe                                                                                                    14,614             10,853
Japan                                                                                                           5,849              5,981
Asia                                                                                                            8,599              5,655
Other markets                                                                                                     112                142
New Zealand (a)                                                                                                35,504             42,743
Total Expenditure of Parent                                                                                    84,551             86,519


(a) New Zealand expenditure includes costs that cannot accurately be allocated to markets including the America's Cup Challenge,
the cost of servicing the 100% Pure New Zealand Campaign, the International Media Programme and the newzealand.com website


                                                                                                                 2008               2007

                                                                                                                $000s              $000s

Total expenditure by the three strategic categories outlined in the
Statement of Service Performance:
Campaign                                                                                                       48,228              47,955
Channel                                                                                                        16,622             16,861
Capability                                                                                                     19,701             21,703
Total Expenditure of Parent                                                                                    84,551             86,519



Note 8
Subsidiary companies

                                                                               Interest Held                      Interest Held

                                                                               2008            2007              2008               2007

Qualmark New Zealand Limited                                                   60%              60%              60%                60%
Visitor Information Network Incorporated (trading as i-SITE NZ)                 0%               0%                0%                0%




 40 TOURISM NEW ZEALAND ANNUAL REPORT 2007–2008
Note 8 continued

                                                                                         GROUP                                PARENT


  The financial year-end of both subsidiaries is 30 June.

  Tourism New Zealand has a 60% shareholding in Qualmark New Zealand Limited with the other 40% held by the New Zealand
  Automobile Association. Tourism New Zealand has control of Visitor Information Network Incorporated (VIN Inc), trading as i-SITE
  New Zealand, effective 21 August 2002.

  Qualmark New Zealand Limited is New Zealand Tourism’s official quality agency. It is a government – private sector partnership between
  Tourism New Zealand and New Zealand Automobile Association. Qualmark licenses professional and trustworthy New Zealand tourism
  businesses to use the Qualmark® – tourism’s official quality mark – to help international and domestic travellers select places to stay,
  things to do and ways to get around.

  Qualmark’s core activities are based around determining the eligibility of businesses to enter the licensing system. This is achieved by
  way of assessment, promoting and working with Qualmark® licensees and working closely with other organisations and sectors within the
  tourism industry. By doing so, quality standards are raised and New Zealand tourism businesses improved based on best-practice.

  The assets, liabilities, revenue and deficit/surplus of Qualmark New Zealand which are included in the financial statements are as follows:


                                                                                      2008              2007                2008              2007

                                                                                     $000s             $000s               $000s              $000s

  Current assets                                                                         80                78                    -                  -
  Non-current assets                                                                    222                 7                    -                  -
                                                                                        302                85                    -                  -


  Current liabilities                                                                   404              234                     -                  -
  Non-current liabilities                                                                  0                0                    -                  -
                                                                                        404              234                     -                  -
  Net assets                                                                          (102)             (149)                    -                  -


  Revenue                                                                             2,990            2,446                     -                  -
  Surplus/(deficit)                                                                       47              (94)                    -                  -


  Tourism New Zealand and i-SITE New Zealand have a relationship agreement that recognises the importance of having an effective and
  high quality network of visitor information centres, dedicated to delivering free, comprehensive and objective information. The terms and
  conditions of the relationship agreement mean that Tourism New Zealand meets the criteria determined in NZ IFRS 3 for consolidating
  investments in subsidiaries.

  The i-SITE brand creates a distinctive look, which distinguishes the official network from other information centres. The i-SITE Visitor
  Centres provide on-the-ground information to ensure the visitor experience is as enjoyable as possible.

  The assets, liabilities, revenue and deficit/surplus of Visitor Information Network Incorporated which are included in the financial
  statements are as follows:
                                                                                      2008              2007                2008              2007

                                                                                     $000s             $000s               $000s              $000s



  Current assets                                                                        120              164                     -                  -
  Non-current assets                                                                       0                0                    -                  -
                                                                                        120              164                     -                  -


  Current liabilities                                                                    70                53                    -                  -
  Non-current liabilities                                                                  0                0                    -                  -
                                                                                         70                53                    -                  -
  Net assets                                                                             50               111                    -                  -


  Revenue                                                                               841                 0                    -                  -
  (Deficit)/surplus                                                                      (61)               17                    -                  -




                                                                                                   TOURISM NEW ZEALAND ANNUAL REPORT 2007–2008 41
                                                                                        GROUP                               PARENT



Note 9
Associate company

                                                                                     2008              2007               2008              2007

                                                                                    $000s             $000s              $000s             $000s

The New Zealand Way Limited                                                              7                10                   -                 -


The financial year-end of The New Zealand Way Limited is 30 June.

Tourism New Zealand has a 50% shareholding in The New Zealand Way Limited. This company is the operating entity of a joint venture
between Tourism New Zealand and New Zealand Trade & Enterprise.

The New Zealand Way Brand provides marketing opportunities to those companies which meet quality and environmental standards.
The Brand is promoted as a mark of outstanding quality, superior service and unique New Zealand characteristics.

There were no impairment losses relating to the investment in associate and no capital commitments or other commitments relating to the associate.

The following table illustrates summarised information of the investment in The New Zealand Way Limited:


                                                                                     2008              2007               2008              2007

                                                                                    $000s             $000s              $000s             $000s



Share of associate's balance sheet:
Current assets                                                                          10                13                   -                 -
Current liabilities                                                                      3                 3                   -                 -
Net assets                                                                               7                10                   -                 -


Share of associate’s revenue and (deficit)/surplus:
Revenue                                                                                  0                15                   -                 -
(Deficit)/surplus                                                                        (3)                5                   -                 -


Carrying amount at beginning of year                                                    10                 5                   -                 -


Carrying amount at end of year                                                           7                10                   -                 -



Note 10
Cash

                                                                                     2008              2007               2008              2007

                                                                                    $000s             $000s              $000s             $000s

Cash Holdings:
Cash at bank and in hand                                                            1,488             1,194               1,365            1,076
Call accounts – foreign currencies                                                  2,265             1,911               2,265             1,911
Call accounts – New Zealand dollar                                                   1,447              330               1,447              285
                                                                                    5,200             3,435               5,077            3,272


Cash at bank and in hand generally earns interest at floating rates based on daily bank deposit rates.

Call account deposits are made depending on the immediate cash requirements of the Group, and earn interest at the respective money
market call rates.


Cash Holdings by Currency:
New Zealand Dollar                                                                   2,181              574               2,058               411
United States Dollar                                                                  336               158                 336              158
British Pound                                                                          677            1,238                 677            1,238


 42 TOURISM NEW ZEALAND ANNUAL REPORT 2007–2008
Note 10 continued

                                                                                     GROUP                                PARENT
  Australian Dollar                                                                 287              685                  287              685
  European Euro                                                                     359               57                  359                   57
  Japanese Yen                                                                      210              179                  210               179
  Singapore Dollar                                                                  707              141                  707               141
  Canadian Dollar                                                                   203               88                  203                   88
  Indian Rupee                                                                      171              171                  171               171
  Other Asian Currencies                                                              69             144                   69              144
                                                                                  5,200            3,435               5,077             3,272
  Cash Holdings by Bank:
  HSBC Bank                                                                       3,020            2,793               2,986             2,766
  National Bank of New Zealand                                                      736              243                  736              243
  Bank of New Zealand                                                             1,253              207                 1,164                  71
  Deutsche Bank                                                                       91              39                   91                   39
  Tokyo Mitsubishi                                                                  100              153                  100              153
                                                                                  5,200            3,435               5,077             3,272


  The fair value of cash and cash equivalents is $5,200,000 (2007: $3.435,000).



  Note 11
  Receivables

                                                                                   2008             2007                 2008             2007

                                                                                  $000s            $000s               $000s             $000s

  Receivables                                                                     1,331            1,200               1,289             1,138
  Less: Provision for impairment                                                     (7)              (7)                  (3)                  (3)
                                                                                  1,324            1,193               1,286              1,135


  Trade receivables are non-interest bearing and are generally on 50-day terms. The carrying value of receivables approximates their fair
  value. As at 30 June 2008 and 2007, all overdue receivables have been assessed for impairment and appropriate provisions applied,
  as detailed below:
                                                                                    PARENT
                                                            2008                                                  2007

                                                Gross        Impairment              Net              Gross       Impairment                Net

                                               $000s               $000s          $000s             $000s              $000s             $000s

  Not past due                                  1,219                  0          1,219              1,039                  0            1,039
  Past due 1 – 30 days                              1                  0               1                78                  0                   78
  Past due 31 – 60 days                            55                  0              55                    0               0                    0
  Past due 61 – 90 days                             2                  0               2                    0               0                    0
  Past due > 91 days                               12                (3)               9                21                 (3)                  18
                                               1,289                 (3)          1,286              1,138                 (3)            1,135


                                                                                     GROUP
                                                            2008                                                  2007

                                                Gross        Impairment              Net              Gross       Impairment                Net

                                               $000s               $000s          $000s             $000s              $000s             $000s

  Not past due                                  1,215                  0          1,215              1,089                  0            1,089
  Past due 1 – 30 days                             27                  0              27                82                  0                   82
  Past due 31 – 60 days                            56                  0             56                     0               0                    0
  Past due 61 – 90 days                            19                  0              19                    6               0                    6
  Past due > 91 days                               14                (7)               7                23                 (7)                  16
                                               1,331                 (7)          1,324              1,200                 (7)            1,193


                                                                                               TOURISM NEW ZEALAND ANNUAL REPORT 2007–2008 43
Note 11 continued

                                                                                     GROUP                             PARENT


   The provision for impairment has been calculated based on expected losses determined by an analysis of losses in previous periods and
   a review of specific debtors.

   Receivables for the Group include GST/VAT refunds comprising 46% (57% in 2007) of total receivables as follows:


                                                                                   2008             2007              2008             2007

                                                                                  $000s            $000s             $000s           $000s

   GST Refund due from NZ Inland Revenue Department                                 536              604               523             604
   GST Refund due from Australian Taxation Office                                     32               24                32               24
   VAT Refund due from UK Customs & Excise                                           38               56                38               56
                                                                                    606              684               593             684



   Note 12
   Derivative financial instruments



   Tourism New Zealand uses foreign exchange instruments in order to manage its exposure to fluctuations in foreign currency exchange
   rates on normal operating activities. The instruments are matched with anticipated future cash flows in foreign currencies. Tourism
   New Zealand does not use financial instruments for speculative purposes. At balance date Tourism New Zealand had 36 (2007: 48)
   foreign exchange contracts maturing at various dates over the next 12 months. The contracts are designated as held for trading financial
   instruments with fair value gains or losses recognised in the Statement of Financial Performance.


   Foreign currency forward exchange contracts:
                                                                                   2008             2007              2008             2007

                                                                                  $000s            $000s             $000s           $000s

   Foreign exchange contracts at 30th June – Sell Value                          35,800          34,450             35,800          34,450
   Fair value Derivatives in Gain                                                 1,514                0             1,514                   0
   Fair value Derivatives in Loss                                                   (20)         (2,526)               (20)         (2,526)
   Foreign exchange contracts at 30th June                                       37,294           31,924            37,294           31,924


   Foreign exchange contracts by currency:
   United States Dollar                                                          12,303            9,638            12,303            9,638
   British Pound                                                                  8,044            6,398             8,044            6,398
   Australian Dollar                                                              9,959            7,932             9,959            7,932
   European Euro                                                                  2,156            2,487             2,156            2,487
   Japanese Yen                                                                   2,842            3,516             2,842            3,516
   Canadian Dollar                                                                1,990                0             1,990                   0
   Singapore Dollar                                                                    0           1,319                  0           1,319
   Hong Kong Dollar                                                                    0             384                  0            384
   Thai Baht                                                                           0             250                  0             250
                                                                                 37,294           31,924            37,294           31,924



   Note 13
   Property plant and equipment

                                                                                   2008             2007              2008             2007

                                                                                  $000s            $000s             $000s           $000s

   All property plant and equipment
   At cost                                                                        5,843            5,772             5,419            5,586
   Accumulated depreciation                                                      (3,678)         (4,156)            (3,476)         (3,977)
   Net carrying amount of furniture and fittings                                   2,165            1,616             1,943            1,609




    44 TOURISM NEW ZEALAND ANNUAL REPORT 2007–2008
Note 13 continued

                                                        GROUP                              PARENT


  Property plant and equipment for each class:


  Furniture and fittings
  At cost                                              997            876                 959               838
  Accumulated depreciation                           (327)          (369)               (292)              (336)
  Net carrying amount of furniture and fittings         670            507                 667               502


  Leasehold improvements
  At cost                                            1,654          1,896               1,544             1,786
  Accumulated depreciation                           (882)        (1,210)               (772)            (1,100)
  Impairment                                             0          (126)                    0             (126)
  Net carrying amount of leasehold improvements        772            560                 772               560


  Office equipment
  At cost                                              609            589                 609               589
  Accumulated depreciation                           (447)          (420)               (447)              (420)
  Net carrying amount of office equipment               162            169                 162                169


  Motor vehicles
  At cost                                              112            115                 112                115
  Accumulated depreciation                             (61)          (83)                 (61)              (83)
  Net carrying amount of motor vehicles                 51             32                   51                   32


  Computer equipment
  At cost                                            2,471          2,296               2,195             2,258
  Accumulated depreciation                          (1,961)       (1,948)             (1,904)            (1,912)
  Net carrying amount of computer equipment            510            348                 291               346
  Total property plant and equipment                 2,165          1,616               1,943             1,609




  All property plant and equipment reconciliation


  At 1 July, net of accumulated depreciation         1,616          1,510               1,609             1,469
  Additions                                          1,348            920               1,110                918
  Disposals                                          (174)            (42)               (174)              (40)
  Depreciation charge for the year                   (625)          (646)               (602)              (612)
  Impairment                                             0          (126)                    0             (126)
  At 30 June, net of accumulated depreciation        2,165          1,616               1,943             1,609


  Depreciation by asset class:
  Furniture and fittings                                108             85                 106                    81
  Leasehold improvements                               173            245                 173               220
  Office equipment                                       89             92                   89                   92
  Motor vehicles                                        12              16                  12                   16
  Computer equipment                                   243            208                 222               203
  Total Depreciation                                   625            646                 602                612
  Impairment Losses                                      0            126                    0              126
  Total Depreciation and Impairment                    625            772                 602               738




                                                                TOURISM NEW ZEALAND ANNUAL REPORT 2007–2008 45
                                                                                    GROUP                             PARENT



 Note 14
 Accommodation bonds



 Accommodation bonds are refundable deposits or key money paid for the lease of office and housing premises.


                                                                                  2008            2007               2008             2007

                                                                                 $000s           $000s              $000s           $000s

 UK & Europe                                                                         9                9                  9                  9
 Japan                                                                             155              128               155              128
 Asia                                                                              179              138               179              138
                                                                                   343              275               343              275



 Note 15
 Creditors and other payables



 Payables are non-interest bearing and are normally settled on 30-day terms, therefore the carrying value of creditors and other payables
 approximates their fair value.


                                                                                  2008            2007               2008             2007

                                                                                 $000s           $000s              $000s           $000s

 Creditors                                                                       1,426            1,870             1,301            1,846
 Income in advance                                                                 335               78               310               54
 Accrued expenses                                                                2,852            2,256             2,592            2,054
                                                                                 4,613           4,204              4,203            3,954



 Note 16
 Employee entitlements

                                                                                  2008            2007               2008             2007

                                                                                 $000s           $000s              $000s           $000s

 Annual Leave                                                                      430              370               394              347
 Retirement Leave                                                                  437             354                437              354
 Long Service Leave                                                                 58               51                58               51
 Sick Leave                                                                          2                2                  2                  2
                                                                                   927              777               891              754



 Note 17
 Provisions



Tourism New Zealand has a number of potential future restoration costs relating to make good clauses on office rental leases. The provision
recognises the present value of expected future payments for amounts in relation to make good. The provision relates to seven Tourism
New Zealand offices and is expected to be incurred over the next 12 years.


                                                                                  2008            2007               2008             2007

                                                                                 $000s           $000s              $000s           $000s

 Provisions are represented by:
 Lease make-good                                                                   303             220                303              220
 Total Provisions                                                                  303             220                303              220




  46 TOURISM NEW ZEALAND ANNUAL REPORT 2007–2008
Note 17 continued

                                                                                   GROUP                                PARENT


                                                                                 2008             2008                2008              2007

                                                                                 Lease           Lease               Lease             Lease
                                                                             make-good       make-good           make-good         make-good

  Movements for provisions are as follows:                                      $000s            $000s               $000s             $000s

  Balance at 1 July                                                               220              320                 220               320
  Additional provisions made                                                      165                 0                165                     0
  Amounts used                                                                    (82)           (100)                 (82)             (100)
  Unused amounts reversed                                                            0                0                   0                    0
  Discount unwind                                                                    0                0                   0                    0
  Balance at 30 June                                                              303              220                 303               220



  Note 18
  Reconciliation of surplus (deficit) to net cash from operating activities

                                                                                 2008             2007                2008              2007

                                                                                $000s            $000s               $000s             $000s



  Net operating surplus (deficit)                                                4,029          (4,630)               4,043           (4,554)


  Add/(less) non-cash items
  Depreciation and impairment                                                     624              772                 602               738
  Net (gains) on derivative financial instruments                              (4,040)            5,037             (4,040)             5,037
  Net losses on derivative financial instruments                                    20              (43)                  20              (43)
  Net foreign exchange (gains)/losses                                            (149)             732                (149)              732
  Total non-cash items                                                        (3,545)            6,498             (3,567)             6,464


  Add/(less) items classified as investing or financing activities


  Net Loss/(Gain) on disposal of assets                                           143               32                 143                    30
  Net Loss/(Gain) on foreign currency accommodation bonds                         (23)              82                 (23)                   82
  Total items classified as investing or financing activities                       120              114                 120                112


  Add/(less) movements in working capital items
  Debtors and other receivables                                                 (150)            (276)                (151)             (253)
  Prepayments                                                                   1,869          (2,275)               1,866           (2,289)
  Payables & accruals                                                             626            (638)                 453              (672)
  Provisions                                                                       83            (100)                  83              (100)
  Employee entitlements                                                           150             (101)                137              (102)
  Net movements in working capital items                                        2,578          (3,390)               2,388            (3,416)
  Net cash from operating activities                                            3,182          (1,408)               2,984            (1,394)



  Note 19
  Contingent liabilities and contingent assets



  There are no known contingencies for the Group or Parent as at 30 June 2008 (2007: Nil).




                                                                                             TOURISM NEW ZEALAND ANNUAL REPORT 2007–2008 47
Note 20
Income tax



Tourism New Zealand is exempt from income tax under the New Zealand Tourism Board Act 1991. Tourism New Zealand’s subsidiaries
are subject to income tax. The Group has tax losses unrecognised that can be used to offset future assessable income of $129,407
(2007: $246,445)



Note 21
Management of risk



Tourism New Zealand has developed a risk management framework and has undertaken a full risk assessment of its business.
Management is required to sign off on a half yearly basis that no new exposures have arisen and that existing risks are being properly
managed. Written policies and procedures exist covering those aspects of business which have the potential to generate risk for
Tourism New Zealand. Adherence to these policies minimises potential risk to Tourism New Zealand. Employees are required as part of
employment contracts to adhere to Tourism New Zealand policies and procedures.

Tourism New Zealand carries comprehensive insurance covering all normal business risks including Public Liability. Tourism New Zealand
has purchased insurance to provide Directors and Officers Liability, Employers Liability and Professional Indemnity cover for Board
members and employees. Tourism New Zealand also provides cover for its staff for off shore travel. Insured values are reviewed annually
and adjusted to reflect changes in business operations.



Note 22
Significant accounting judgements, estimates and assumptions



The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the
reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to assets,
liabilities, contingent liabilities, revenue and expenses. These judgements and estimates are based on historical experience and other
factors that are reasonable under the circumstances and form the basis for the carrying values of assets and liabilities. Actual results may
differ from these estimates under different assumptions and conditions.

Management has identified the following critical accounting policy for which significant judgements, estimates and assumptions have
been made.

Make good provision
A provision has been made for a number of potential future restoration costs relating to make good clauses on seven office rental leases.
The calculation of this provision requires assumptions such as the extent, if any, that Landlords will enforce the make good clauses in the
leases and building and demolition cost estimates. These uncertainties may result in future actual expenditure differing from the amounts
currently provided. The provision recognised for each lease is periodically reviewed and updated based on the facts and circumstances
available at the time. Changes to the estimated future costs for make good are recognised in the balance sheet by adjusting both the
expense or asset and provision. The related carrying amounts are disclosed in note 17.



Note 23
Capital management



Tourism New Zealand’s capital is its equity, which comprises accumulated funds and other reserves. Equity is represented by net assets.

Tourism New Zealand is subject to the financial management and accountability provisions of the Crown Entities Act 2004, which impose
restrictions in relation to borrowings, acquisition of securities, issuing guarantees and indemnities and the use of derivatives.

Tourism New Zealand manages its equity as a by-product of prudently managing revenues, expenses, assets, liabilities, investments and
general financial dealings to ensure that Tourism New Zealand effectively achieves its objectives and purpose, whilst remaining a going
concern.




 48 TOURISM NEW ZEALAND ANNUAL REPORT 2007–2008
                                                                                    GROUP                                PARENT



Note 24
Categories of financial assets and liabilities



The carrying amounts of financial assets and liabilities in each of the NZ IAS 39 categories are as follows:

                                                                                  2008             2007                2008              2007

                                                                                 $000s            $000s               $000s             $000s

Loans and receivables:
Cash and cash equivalents                                                        5,200            3,435               5,077             3,272
Debtors and other receivables                                                    1,324             1,193              1,286              1,135
Total Loans and receivables                                                      6,524            4,628               6,363             4,407


Fair value through profit and loss:
Derivative financial instrument assets                                             1,514                0              1,514                     0
Derivative financial instrument liabilities                                           20           2,526                   20            2,526


Financial liabilities measured at amortised cost:
Creditors and other payables                                                     4,613            4,204               4,203             3,954
Total financial liabilities measured at amortised cost                            4,613            4,204               4,203             3,954



Note 25
Capital commitments

                                                                                  2008             2007                2008              2007

                                                                                 $000s            $000s               $000s             $000s

Total capital expenditure contracted for at balance
date but not provided for in the financial statements                                  0                0                   0                    0



Note 26
Operating commitments



Operating commitments include non-cancellable lease payments for premises, motor vehicles and office equipment and non-cancellable
contracts for services like equipment maintenance and public relations.

                                                                                  2008             2007                2008              2007

                                                                                 $000s            $000s               $000s             $000s

Operating Commitments payable after balance date on:


Non-Cancellable Accommodation Leases:
Up to One Year                                                                   2,095            1,585               2,020             1,520
One to Two Years                                                                 1,698              993               1,698               993
Two to Five Years                                                                2,866             2,117              2,866              2,117
Over Five Years                                                                  4,108             4,217              4,108             4,217
                                                                                10,767            8,912              10,692             8,847
Non-Cancellable Motor Vehicle & Equipment Leases
Up to One Year                                                                     286               175                210                147
One to Two Years                                                                   230              105                 154                    99
Two to Five Years                                                                  322                97                131                    88
Over Five Years                                                                       0                0                   0                    0
                                                                                   838              377                 495               334



                                                                                              TOURISM NEW ZEALAND ANNUAL REPORT 2007–2008 49
Note 26 continued

                                                                                      GROUP                              PARENT


  Non-Cancellable Contracts for Goods & Services
  Up to One Year                                                                     107                105              107                105
  One to Two Years                                                                      0                  0                0                  0
  Two to Five Years                                                                     0                  0                0                  0
  Over Five Years                                                                       0                  0                0                  0
                                                                                     107                105              107                105
  Total Commitments                                                               11,712               9,394          11,294               9,286



  Note 27
  Related party transactions



  Tourism New Zealand is a wholly owned entity of the Crown which has the ability to significantly influence its role. The Crown is Tourism
  New Zealand’s major source of revenue.

  Tourism New Zealand enters into transactions with government departments, state-owned enterprises and other Crown entities. Those
  transactions that occur within a normal supplier or client relationship on terms and conditions no more or less favourable than those which
  it is reasonable to expect Tourism New Zealand would have adopted if dealing with that entity at arm’s length in the same circumstances
  have not been disclosed as related party transactions.

  Tourism New Zealand also enters into transactions with its subsidiaries and associate. These transactions occur within a normal supplier
  or client relationship on terms and conditions no more or less favourable than those which it is reasonable to expect Tourism New Zealand
  would have adopted if dealing with that entity at arm’s length. The following table provides the total amount of transactions that were
  entered into with these related parties.


                                                                                   Transaction value                 Balance outstanding
                                                                                  year ended 30 June                 year ended 30 June

                                                                                    2008               2007             2008               2007

                                                                                   $000s               $000s           $000s               $000s

  Related Party and Transaction
  Subsidiary – Qualmark New Zealand Limited:
   Shareholder income provided by Tourism New Zealand                              1,046                 716                0                  0
   Purchases from Tourism New Zealand                                                  52                53               28                  14
  Subsidiary – Visitor Information Network Inc:
   Shareholder income provided by Tourism New Zealand                                500                250                 0                  0
   Sales to Tourism New Zealand                                                         0                  6                0                  0
   Purchases from Tourism New Zealand                                                   5                 11                0                  0
  Associate – The New Zealand Way Limited:
   Shareholder income provided by Tourism New Zealand                                   0                 15                0                  0


  Tourism New Zealand also enters into transactions with Directors and entities over which they have control or significant influence. These
  transactions occur within a normal supplier or client relationship on terms and conditions no more or less favourable than those which it is
  reasonable to expect Tourism New Zealand would have adopted if dealing with that entity at arm's length. The following table provides the
  total amount of transactions that were entered into with these related parties.




    50 TOURISM NEW ZEALAND ANNUAL REPORT 2007–2008
Note 27 continued
                                                                            Transaction value                   Balance outstanding
                                                                           year ended 30 June                   year ended 30 June

                                                                             2008               2007               2008               2007

                                                                            $000s               $000s             $000s               $000s

  Related Party and Transaction
  Income has been received by Tourism New Zealand from:
  G Coughlan (Director): Positively Wellington Tourism – Income
  received by TNZ for joint advertising campaigns and other tourism
  related services.                                                            441               468
  P Bingham (Director): Christchurch & Canterbury Marketing Ltd and
  Christchurch & Canterbury Convention Bureau Ltd – Income received
  by TNZ for joint advertising campaigns and other tourism related
  services.                                                                    767               145


  Payments have been made by Tourism New Zealand to:
  W Stone (Chairman): Whalewatch Kaikoura, Shotover Jet, Dart River
  Safaries, Franz Josef Glacier Guides, Huka Jet, Rainbow Springs –
  Provision of tourism related services to TNZ.                                  5                  8                  0                    0
  K Guy (Director): Bayview International Group of Hotels and Resorts
  – Provision of conference and accomodation services to TNZ                    76                33                   0                   17
  G Coughlan (Director): Te Papa – Provision of conference and
  tourism related service to TNZ.                                               21                 51
  P Bingham (Director): Black Cat Group and Christchurch &
  Canterbury Marketing Ltd – Provision of tourism related services to
  TNZ.                                                                           3                  6
  S Murray (Director): Maui Rentals – Provision of tourism related
  services to TNZ                                                               15                  4                  0                    0
  J Barrett (Director): Kapiti Island Alive & Kapiti Nature Lodge –
  Provision of tourism related services to TNZ                                   3                  4                  0                    0


                                                                                                                     PARENT
                                                                                                                   2008               2007

                                                                                                                  $000s               $000s

  Key management personnel compensation
  Salaries and other short-term employee benefits                                                                  1,877               1,775
  Post-employment benefits                                                                                              0                    0
  Other long-term benefits                                                                                             42                   53
  Termination benefits                                                                                                  0                    0
  Total key management personnel compensation                                                                     1,919               1,828


  Key management personnel includes all board members, the Chief Executive and the 6 members of the Executive Team.




                                                                                          TOURISM NEW ZEALAND ANNUAL REPORT 2007–2008 51
Note 28
Financial instrument risks



Tourism New Zealand’s activities expose it to a variety of financial instrument risks, including market risk, credit risk and liquidity risk.
Tourism New Zealand has a series of policies to manage the risks associated with financial instruments and seeks to minimise exposure
from financial instruments. These policies do not allow any transactions that are speculative in nature.

Market Risk
Fair value interest rate risk – Fair value interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in
market rates. Tourism New Zealand has no exposure to fair value interest rate risk as all bank deposits are held at call rates.

Currency risk – Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in
foreign exchange rates.

As a result of significant operations around the world, Tourism New Zealand is required to enter into transactions denominated in foreign
currencies. As a result of these activities, exposure to currency risk arises.

It is Tourism New Zealand's policy to manage foreign currency risks arising from contractual commitments and liabilities by entering into
foreign exchange forward contracts to cover the foreign currency exposure.

Currency risk sensitivity analysis – Tourism New Zealand is subject to volatility in financial performance associated with foreign currency
rates, especially when recognising fair value movements associated with forward foreign exchange contracts. As at 30 June 2008, if
the NZ Dollar had weakened/strengthened by 5% against the basket of foreign currencies used by Tourism New Zealand with all other
variables held constant, the surplus would have been:




This movement is attributable to foreign exchange gains/losses on translation of forward foreign exchange contracts and excludes other
foreign currency denominated assets and liabilities which would have had a less significant effect on the surplus.

Credit risk
Credit risk is the risk that a third party will default on its obligations to Tourism New Zealand, causing Tourism New Zealand to incur a loss.

Tourism New Zealand has no significant concentrations of credit risk, as it has a small number of credit customers and only places funds
with registered banks. With respect to foreign exchange instruments, Tourism New Zealand reduces its risk by limiting the counter parties
to major trading banks and does not expect to incur any significant losses as a result of non performance by these counter parties.

Tourism New Zealand's maximum credit exposure for each class of financial instrument is represented by the total carrying amount of
cash (note 10), net debtors (note 11) and derivative financial instruments (note 12). There is no collateral held as security against these
financial instruments, including those instruments that are overdue or impaired.

Liquidity risk
Liquidity risk is the risk that Tourism New Zealand will encounter difficulty raising liquid funds to meet commitments as they fall due.

Tourism New Zealand has no significant concentrations of liquidity risk. Tourism New Zealand annually agrees a funding schedule with
the Crown which matches the estimated timing of its commitments and close out of market positions.



Note 29
Remuneration of employees



During 2007/2008 32 (2007: 33) employees received remuneration and benefits which exceeded $100,000 per annum as follows:
                                                                                                                             PARENT
$                                                                                                                          2008              2007

100,000 - 109,999                                                                                                              7                    7
110,000 - 119,999                                                                                                              5                    4
120,000 - 129,999                                                                                                              3                    3
130,000 - 139,999                                                                                                              2                    4
140,000 - 149,999                                                                                                              2                    1
150,000 - 159,999                                                                                                              1                    1
160,000 - 169,999                                                                                                              1                    1
170,000 - 179,999                                                                                                              0                    2
180,000 - 189,999                                                                                                              1                    1
190,000 - 199,999                                                                                                              0                    1



 52 TOURISM NEW ZEALAND ANNUAL REPORT 2007–2008
Note 29 continued

                                                                                                                         PARENT
  200,000 - 209,999                                                                                                        2                    1
  220,000 - 229,999                                                                                                        0                    2
  240,000 - 249,999                                                                                                        2                    2
  250,000 - 259,999                                                                                                        1                    0
  260,000 - 269,999                                                                                                        1                    0
  280,000 - 289,999                                                                                                        1                    1
  290,000 - 299,999                                                                                                        0                    1
  300,000 - 309,999                                                                                                        2                    0
  380,000 - 389,999                                                                                                        0                    1
  390,000 - 399,999                                                                                                        1                    0
                                                                                                                          32                   33
                                             Average remuneration of above employees                              $170,514          $164,341


  Note: A number of Tourism New Zealand employees are based offshore and are paid in local currency at appropriate remuneration levels
  within the respective countries. This remuneration has been translated at the exchange rates of forward exchange contracts used to cover
  this expenditure.



  Note 30
  Remuneration of directors of parent

                                                                                                                       2008              2007

                                                                                                                      $000s             $000s

  Board members earned the following fees during the year:


  W Stone (Chair)                                                                                                         39                   35
  S Johnstone (Deputy Chair)                                                                                              25                   18
  P Bingham                                                                                                               20                   18
  K Guy                                                                                                                   20                   18
  S Murray                                                                                                                20                   18
  G Coughlan                                                                                                              20                    8
  K McKelvie                                                                                                              20                    8
  J Barrett                                                                                                               20                    8
  M Johns                                                                                                                 20                    0
  P Stubbs                                                                                                                 0                   22
  M Boyd                                                                                                                   0                   10
  K Johnston                                                                                                               0                   10
  M Tamaki                                                                                                                 0                   10
                                                                                                                        204               183


  Changes in Directors: W Stone retired on 30 June 2008. G Muir was appointed Chairman on 15 July 2008. K Guy resigned as a Director
  on 14 August 2008. Henry van Asch was appointed a Director on 1 September 2008.




                                                                                              TOURISM NEW ZEALAND ANNUAL REPORT 2007–2008 53
Note 31
Explanation of transition to NZ IFRS



The New Zealand Accounting Standards Review Board announced on 19 December 2002 that New Zealand International Financial
Reporting Standards (NZ IFRS) will apply for reporting periods commencing on or after 1 January 2007. These are Tourism New Zealand’s
first financial statements to be prepared in accordance with NZ IFRS. Tourism New Zealand’s transition date is 1 July 2006 and the
opening NZ IFRS balance sheet has been prepared as at that date. Tourism New Zealand’s adoption date is 1 July 2007.

Transition from existing NZ GAAP to NZ IFRS has been made in accordance with NZ IFRS 1 "First-time Adoption of New Zealand
Equivalents to International Financial Reporting Standards." Comparative information has been restated to conform with the requirements
of NZ IFRS.

Reconciliation of equity
The following table shows the changes in equity, resulting from the transition from previous NZ GAAP to NZ IFRS as at 1 July 2006 and
30 June 2007:


                                   Note                     1 July 2006 Group                             30 June 2007 Group

                                                                    Effect on                                      Effect on
                                              Previous NZ          Transition                  Previous           Transition
                                                    GAAP         to NZ IFRS     NZ IFRS       NZ GAAP           to NZ IFRS      NZ IFRS

                                                  $000s              $000s       $000s           $000s              $000s         $000s

Current Assets
Cash                                              6,265                    0     6,265           3,435                    0       3,435
Receivables                                          913                   0       913           1,193                    0       1,193
Prepayments & other
current assets                         a            299                 320        619           2,726                 165        2,891
Derivative financial
instruments                            b               0              2,512      2,512               0                    0             0
                                                   7,477             2,832      10,309           7,354                 165        7,519
Non-current Assets
Property plant and
equipment                                          1,510                   0     1,510           1,616                    0       1,616
Investment in associate                                5                   0          5             10                    0             10
Accommodation bonds                                 340                    0       340             275                    0         275
                                                  1,855                    0     1,855           1,901                    0       1,901


Total Assets                                      9,332              2,832      12,164           9,255                 165        9,420


Current Liabilities
Creditors and other payables                      4,603                    0     4,603           4,204                    0       4,204
Employee entitlements                  c            380                 500        880             370                 407          777
Provisions                             a               0                320        320               0                 220          220
Derivative financial
instruments                            b               0                  43        43               0              2,526         2,526
                                                  4,983                 863      5,846           4,574               3,153        7,727
Total Liabilities                                 4,983                 863      5,846           4,574               3,153        7,727


Net Assets                                        4,349               1,969      6,318           4,681            (2,988)         1,693


Equity
Shareholder's equity                              1,805                    0     1,805           1,805                    0       1,805
Retained earnings                                  2,451              1,969      4,420           2,765            (2,988)         (223)
Minority interests                                    93                   0        93             111                    0         111
Total Equity                                      4,349               1,969      6,318           4,681            (2,988)         1,693




 54 TOURISM NEW ZEALAND ANNUAL REPORT 2007–2008
Note 31 continued


  a. Lease Make Good Provision
     Tourism New Zealand has a number of potential future restoration costs relating to make good clauses on office rental leases. A liability
     provision and an asset lease for these costs were not recognised under NZ GAAP. NZ IFRS requires Tourism New Zealand to recognise
     the present value of expected future payments for amounts in relation to make good. The asset lease is amortised over the expected
     term of the lease. The provision relates to seven Tourism New Zealand offices and are expected to be incurred over the next 12 years.

  b. Derivative financial instruments
     Financial derivatives were not recognised in the statement of financial position under previous NZ GAAP. NZ IFRS requires financial
     derivatives to be recognised in the statement of financial position at their fair value.

  c. Employee entitlements
     Retirement, long service and sick leave were not recognised as a liability under previous NZ GAAP. NZ IFRS requires Tourism New
     Zealand to recognise employees retirement, long service and sick leave. Retirement and long service leave obligations are calculated
     based on a number of assumptions including the discount rate and the salary inflation factor. The amount of unused employees sick
     leave entitlement that can be carried forward at balance date is recognised to the extent that Tourism New Zealand anticipates it will be
     used by staff to cover future absences.

  Reconciliation of surplus for the year ending 30 June 2007

  The following table shows the changes in the Tourism New Zealand surplus, resulting from the transition from previous NZ GAAP to NZ
  IFRS for the year ending 30 June 2007:


                                                                                                                       Effect on
                                                                                                  Previous NZ       Transition to
                                                                                      Note              GAAP            NZ IFRS           NZ IFRS

                                                                                                       $000s             $000s             $000s

  Income
  Revenue from Crown                                                                                 74,246                    0          74,246
  Interest income                                                                                        866                   0             866
  Other revenue                                                                                        6,295                   0           6,295
  Net foreign exchange gains                                                            a              2,574                  43            2,617
  Total Income                                                                                       83,981                   43          84,024


  Expenditure
  Marketing expenses                                                                                  62,121                   0          62,121
  Other expenses                                                                       b, c          18,670                 (37)          18,633
  Depreciation & Impairment                                                                              772                   0              772
  Net foreign exchange losses                                                           d              2,091              5,037             7,128
  Total Expenditure                                                                                  83,654              5,000            88,654


  Net Operating Surplus/(Deficit) before Taxation                                                         327            (4,957)          (4,630)


  Income tax expense                                                                                        0                  0                   0
  Minority interests in profits/(losses) of subsidiaries                                                   18                   0                  18
  Share of loss/(gain) of associate company                                                               (5)                  0                  (5)


  Net Surplus/(Deficit) for the year                                                                      314            (4,957)           (4,643)




                                                                                                 TOURISM NEW ZEALAND ANNUAL REPORT 2007–2008 55
Note 31 continued


  a. Gains – Net gain on derivative financial instruments
     This represents fair value movements associated with forward foreign exchange contracts, which are required to be recognised in
     the statement of financial performance. Under previous NZ GAAP unrecognised gains on forward exchange contracts were deferred
     (off balance sheet) and were subsequently recognised as an adjustment to the recognition value of the relevant assets.

  b. Other expenses – long service, retirement and sick leave
     This represents the increase in the long service leave, retirement leave and sick leave provisions which were not recognised under
     previous NZ GAAP

  c. Other expenses – Lease asset and make good provision
     This represents the increase in the lease asset and make good provision together with depreciation of the lease asset which were not
     recognised under previous NZ GAAP

  d. Other expenses – Net loss on derivative financial instruments

  This represents fair value movements associated with forward foreign exchange contracts, which are required to be recognised in
  the statement of financial performance. Under previous NZ GAAP unrecognised losses on forward exchange contracts were deferred
  (off balance sheet) and were subsequently recognised as an adjustment to the recognition value of the relevant assets.

  Explanation of material adjustments to the statements of cash flows

  There are no material differences between the cash flow statement presented under NZ IFRS and the cash flow statement presented
  under previous NZ GAAP.




    56 TOURISM NEW ZEALAND ANNUAL REPORT 2007–2008
Five Year Financial Summary for Parent

 Statement of Financial Position
                                                                                      2004                 2005                  2006                 2007                  2008
                                                                                     Actual               Actual                Actual                Actual               Actual
                                                                                    $000s                 $000s                $000s                 $000s                 $000s



 Current Assets
 Cash                                                                                4,062                6,673                 6,086                3,272                 5,077
 Receivables                                                                           655                1,133                   882                 1,135                1,286
 Prepayments & other current assets                                                    684                  600                   275                2,884                 1,018
 Derivative financial instruments                                                           -                     -                    -                    0               1,514
                                                                                     5,401                8,406                 7,243                 7,291                8,895
 Non-current Assets
 Property plant and equipment                                                        1,725                1,223                 1,469                1,609                 1,943
 Accommodation bonds                                                                   298                   228                  340                   275                  343
                                                                                     2,023                1,451                 1,809                1,884                 2,286
 Total Assets                                                                        7,424                9,857                 9,052                 9,175               11,181
 Current Liabilities
 Creditors and other payables                                                        2,499                4,614                 4,389                3,954                 4,203
 Provisions                                                                            626                      0                     0                 220                  303
 Employee entitlements                                                                 371                   333                  357                   754                  891
 Derivative financial instruments                                                           -                     -                    -              2,526                        20
                                                                                     3,496                4,947                 4,746                7,454                 5,417
 Total Liabilities                                                                   3,496                4,947                 4,746                7,454                 5,417
 Net Assets                                                                          3,928                4,910                 4,306                 1,721                5,764
 Equity
 Shareholder's equity                                                                1,805                1,805                 1,805                1,805                 1,805
 Retained earnings                                                                   2,123                3,105                 2,501                  (84)                3,959
 Total Equity                                                                        3,928                4,910                 4,306                 1,721                5,764



 Statement of Financial Performance
                                                                                      2004                 2005                  2006                 2007                  2008
                                                                                     Actual               Actual                Actual                Actual               Actual
                                                                                    $000s                 $000s                $000s                 $000s                 $000s

 Revenue
 Government grants                                                                 60,230                69,754               79,358                74,246               75,071
 Interest                                                                              419                   627                  745                   859                  707
 Other revenue                                                                         310                   289                   474               4,243                 4,817
 Foreign exchange gains                                                                    -                     -                    -               2,617                7,999
                                                                                   60,959                70,670               80,577                81,965               88,594
 Expenditure
 Marketing expenses                                                                47,498                52,213               63,202                61,631               63,044
 Other expenses                                                                    15,841               16,808                 17,427               17,022               18,428
 Depreciation & Impairment                                                             714                   667                  552                   738                  602
 Foreign exchange losses                                                                   -                     -                    -               7,128                2,477
                                                                                   64,053               69,688                81,181                86,519               84,551
 Net Operating Surplus/(Deficit)                                                   (3,094)                    982                (604)              (4,554)                 4,043

 The 2008 financial year was Tourism New Zealand’s first set of financial statements to be prepared in accordance with New Zealand International Financial Reporting Standards (NZ
 IFRS.) The comparative figures for 2007 have been restated accordingly to NZ IFRS. Note however that the comparatives figures from 2004 to 2006 in the above table have not been
 restated to NZ IFRS.




                                                                                                                         TOURISM NEW ZEALAND ANNUAL REPORT 2007–2008 57
AUDIT REPORT
TO THE READERS OF NEW ZEALAND TOURISM BOARD AND GROUP’S
FINANCIAL STATEMENTS AND STATEMENT OF SERVICE PERFORMANCE FOR THE YEAR ENDED 30 JUNE 2008


The Auditor-General is the auditor of the New Zealand Tourism Board (the      Audit procedures generally include:
Board) and group. The Auditor-General has appointed me, Grant Taylor,
                                                                              -   determining whether significant financial and management controls
using the staff and resources of Ernst and Young, to carry out the audit on
                                                                                  are working and can be relied on to produce complete and accurate
his behalf. The audit covers the financial statements and statement of
                                                                                  data;
service performance included in the annual report of the Board and group
for the year ended 30 June 2008.                                              -   verifying samples of transactions and account balances;

Unqualified Opinion                                                            -   performing analyses to identify anomalies in the reported data;
In our opinion:
                                                                              -   reviewing significant estimates and judgements made by the Board of
–   The financial statements of the Board and group on pages 32 to 56:             Directors;

    –    comply with generally accepted accounting practice in                -   confirming year-end balances;
         New Zealand;
                                                                              -   determining whether accounting policies are appropriate and
    –    give a true and fair view of:                                            consistently applied; and

         –   the Board and group’s financial position as at 30 June 2008;      -   determining whether all financial statement and statement of service
             and                                                                  performance disclosures are adequate.
         –   the results of operations and cash flows for the year ended       We did not examine every transaction, nor do we guarantee complete
             on that date.                                                    accuracy of the financial statements and statement of service
–   The statement of service performance of the Board and group on            performance.
    pages 12 to 27:
                                                                              We evaluated the overall adequacy of the presentation of information in
    –    complies with generally accepted accounting practice in              the financial statements and statement of service performance. We
         New Zealand; and                                                     obtained all the information and explanations we required to support our
                                                                              opinion above.
    –    gives a true and fair view of, for each class of outputs:

         –   standards of delivery performance achieved, as compared          Responsibilities of the Board of Directors and the Auditor
             with the forecast standards outlined in the statement of         The Board of Directors is responsible for preparing the financial
             forecast service performance adopted at the start of the         statements and statement of service performance in accordance with
             financial year; and                                               generally accepted accounting practice in New Zealand. The financial
                                                                              statements must give a true and fair view of the financial position of the
         –   actual revenue earned and output expenses incurred, as
                                                                              Board and group as at 30 June 2008 and the results of operations and
             compared with the forecast revenues and output expenses
                                                                              cash flows for the year ended on that date. The statement of service
             outlined in the statement of forecast service performance
                                                                              performance must give a true and fair view of, for each class of outputs,
             adopted at the start of the financial year.
                                                                              the Board and group’s standards of delivery performance achieved and
–   Based on our examination the Board and group kept proper                  revenue earned and expenses incurred, as compared with the forecast
    accounting records.                                                       standards, revenue and expenses adopted at the start of the financial
The audit was completed on 31 October 2008, and is the date at which          year. The Board of Director’s responsibilities arise from the Crown Entities
our opinion is expressed.                                                     Act 2004 and the New Zealand Tourism Board Act 1991.

The basis of our opinion is explained below. In addition, we outline the      We are responsible for expressing an independent opinion on the financial
responsibilities of the Board of Directors and the Auditor, and explain our   statements and statement of service performance and reporting that
independence.                                                                 opinion to you. This responsibility arises from section 15 of the Public
                                                                              Audit Act 2001 and the Crown Entities Act 2004.
Basis of Opinion
We carried out the audit in accordance with the Auditor-General’s Auditing    Independence
Standards, which incorporate the New Zealand Auditing Standards.              When carrying out the audit we followed the independence requirements
                                                                              of the Auditor-General, which incorporate the independence requirements
We planned and performed the audit to obtain all the information and
                                                                              of the Institute of Chartered Accountants of New Zealand.
explanations we considered necessary in order to obtain reasonable
assurance that the financial statements and statement of service performance   Other than the audit, we have no relationship with or interests in the
did not have material misstatements, whether caused by fraud or error.        Board or any of its subsidiaries.
Material misstatements are differences or omissions of amounts and
disclosures that would affect a reader’s overall understanding of the
financial statements and statement of service performance. If we had
found material misstatements that were not corrected, we would have
referred to them in our opinion.
                                                                              Grant Taylor
The audit involved performing procedures to test the information presented    Ernst & Young
in the financial statements and statement of service performance.              On behalf of the Auditor-General
We assessed the results of those procedures in forming our opinion.           Wellington, New Zealand


    58 TOURISM NEW ZEALAND ANNUAL REPORT 2007–2008
visit www.tourismnewzealand.com
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