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TAURANGA CITY AQUATICS LIMITED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2008 CONTENTS Chairman’s Report 2 Statement of Financial Performance 3 Statement of Movement in Equity 3 Statement of Financial Position 4 Notes to the Accounts 5 Statement of Intent 6 TCC Ref: 2322420 CHAIRMAN’S REPORT This is the six monthly report of the Directors of Tauranga City Aquatics Limited (TCAL) for the first half of the financial year ending June 2009. The principal purpose of the TCAL is to ensure we deliver on our Statement of Intent performance measures to Council and the community. One of the key performance measures is the management contract with LeisureCo (LCNZ). The Board constantly monitor this to ensure efficient and effective performance of that contract. There were no significant contractual events that were dealt by the Directors during the last six months. There are many other important deliverables under the Statement of Intent and we have been working hard during the past six months to progress these as well. One of our key strategic projects is the redevelopment of the Hot Pools. TCAL have now presented Council with a financially sustainable proposal that will not only enhance the aquatics network, but also Tauranga as a regional tourist attraction. We are pleased that this proposal is now included in Council’s draft Ten Year Plan for further consultation. Operations The facilities were used by 518,643 (474,125 YTD 2007) patrons during the six months, an increase of 9.6% over the same period in the previous year. Once again this is an outstanding result. Together with LCNZ, we have a goal of 1,000,000 user visits for the 12 month period to 30 June 2009 and are on target to achieve this. Financial Result The unaudited results for the half year-ended 31st December 2008 disclose a net deficit for the six months of $448,000 (surplus $95,000 YTD 2007). The deficit is in accord with the expectations of the Directors for the six months. The second six months sees an increase in the contract fees received from LCNZ. The operating grant from Council will be on budget at year end and we are on target to achieving the budgeted year end surplus of $164,000, before depreciation expense. Depreciation is budgeted and funded within Council. On behalf of the Board, I would like to thank Tauranga City Council for their continued support. Warren Banks Chairman of the Board Page 2 STATEMENT OF FINANCIAL PERFORMANCE FOR THE SIX MONTHS ENDED 31 DECEMBER 2008 Note 2008/09 2007/08 2008/09 Six mths Six mths Full year Actual Actual Budget ($000’s) ($000’s) ($000’s) ( Revenue Grants 1 456 519 897 Other Revenue 2 445 548 1,084 Total 901 1,067 1,981 Expenditure Other Expenditure 3 775 427 1,483 Depreciation 4 409 375 0 Interest Paid 5 165 169 334 Total 1,349 971 1,817 Surplus / (Deficit) (448) 95 164 Taxation Expense 0 0 0 Net Surplus / (Deficit) for the Year (448) 95 164 STATEMENT OF MOVEMENT IN EQUITY FOR THE SIX MONTHS ENDED 31 DECEMBER 2008 Note 2008/09 2007/08 2008/09 Six mths Six mths Full year Actual Actual Budget ($000’s) ($000’s) ($000’s) Opening Balance 20,107 20,059 0 Net Surplus / (Deficit) for the Year (448) 95 164 Total Recognised Revenues and Expenses 19,659 20,154 164 Capital Introduced 0 0 0 TOTAL EQUITY AS AT 31 DECEMBER 2008 19,659 20,154 164 Page 3 STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2008 Note 2008/09 2007/08 2008/09 Six mths Six mths Full year Actual Actual Budget ($000’s) ($000’s) ($000’s) Assets Current Assets Cash and Cash Equivalents 6 20 130 Trade and other Receivables 0 64 Total Current Assets 20 194 Non Current Assets Property, plant and equipment 25,430 25,156 718 Intangible Assets – Software 19 11 0 Total Non Current Assets 25,449 25,167 718 Total Assets 25,469 25,361 718 Liabilities Current Liabilities Accounts payable Accruals 120 74 GST Payable (19) 0 Total Current Liabilities 101 74 Non Current Borrowings Loan from Tauranga City Council 1,699 1,123 554 LCNZ Security Bond 10 10 TECT RPS 4,000 4,000 Total Non Current Liabilities 5,709 5,133 554 Total Liabilities 5,810 20,154 554 Net Assets 19,659 20,154 164 Equity Share Capital 18,861 17,000 Retained Earnings 778 3,154 164 Reserve – Schools in Pools 20 0 Total Equity 19,659 20,154 164 Page 4 NOTES TO THE FINANCIAL STATEMENTS 1) GRANT REVENUE 2008/09 2007/08 2008/09 Six mths Six mths Full year Actual Actual Budget ($000’s) ($000’s) ($000’s) Tauranga City Council - Operational 403 389 732 Tauranga City Council - Renewals 53 130 164 456 519 897 2) OTHER REVENUE 2008/09 2007/08 2008/09 Six mths Six mths Full year Actual Actual Budget ($000’s) ($000’s) ($000’s) Lease Revenue 79 62 101 Contract Revenue 359 350 983 Share of contract surplus 7 136 0 445 548 1,084 3) OTHER EXPENDITURE 2008/09 2007/08 2008/09 Six mths Six mths Full year Actual Actual Budget ($000’s) ($000’s) ($000’s) Administration 138 82 205 Consultants - General 59 30 55 Consultants - Resource Consents 5 28 0 Contract Payments 252 364 531 Operating Costs 179 (96) 434 Maintenance 142 19 258 775 427 1,483 4) DEPRECIATION 2008/09 2007/08 2008/09 Six mths Six mths Full year Actual Actual Budget ($000’s) ($000’s) ($000’s) Buildings and Improvements 229 226 Office Furniture and Equipment 17 23 Plant and Equipment 158 124 Software 5 2 409 375 Page 5 5) DEBT SERVICING 2008/09 2007/08 2008/09 Six mths Six mths Full year Actual Actual Budget ($000’s) ($000’s) ($000’s) Interest 50 56 107 TECT RPS 115 113 227 165 169 334 6) CASH AND CASH EQUIVALENTS 2008/09 2007/08 2008/09 Six mths Six mths Full year Actual Actual Budget ($000’s) ($000’s) ($000’s) Cash 20 130 20 0 Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts. Page 6 9) STATEMENT OF INTENT PERFORMANCE The company has complied with section 64 of the Local Government Act 2002 and has had the Statement of Intent formally adopted by Council for the six months ended 31 December 2008. Objectives for 2008/09 Performance Indicators YTD Actual Year End Target 1. To implement year 1.1 TCAL will maintain the five year fixed operating Net contract targets were exceeded Meet operating budget under three of the five year budgets with the selected aquatic facility resulting in profit share of revenue the contract. aquatic facilities management contractor and ensure the annual returned to TCAL. management budgets are met. contract and 1.2 TCAL will ensure the aquatic management All reporting requirements met. Monthly reporting from date consolidate all contractor will meet all its obligations under the of contract signing. financial, business terms of the agreement. and management practices to ensure 1.3 TCAL, in association with its aquatic facility Reporting processes in place that allow Reporting on monthly, TCAL continues to management contractor, will continue using full monitoring as per contract quarterly, half yearly, annual accurately monitor reporting systems that compare monthly, obligations. performance against target. our facilities, quarterly, half yearly and annual financial offer programmes and and usage levels with the actual financial and services. usage performance. 1.4 TCAL will continue to monitor the following CERM surveys undertaken in February Annual CERM Surveys. CERM Operational Management attributes as 2009. key performance indicators of facility programming and usage: Visits per centre; Programme range x programmable area; Catchment multiple (visits/year by catchment population; Program occupancy by weekly schedule of available time slots; Class occupancy by programme; User profile compared with demographic profile and priority users; User profile by priority community service obligation users. 2. In association with 2.1 The aquatic facility contractor will be required to All marketing plans provided to TCAL. Marketing Plans provided to Objectives for 2008/09 Performance Indicators YTD Actual Year End Target the facility maintain a marketing and promotion plan and Quarterly reporting includes monitoring TCAL with regular reporting management TCAL will monitor the measurable components of against these plans. against these plans. contractor, increase the plan to ensure management is maximizing its awareness of TCAL marketing spend. Key Performance Indicators for facilities, the marketing plan will include: programmes and services with an aim Target markets and market share achieved of increasing the against projections; community’s physical Marketing initiatives and sales/user response activity levels. against projections; Proposed marketing strategies compared to actual strategies completed. 3. Continue the 3.1 TCAL will continue to commission annual safety BWOF inspections undertaken Annually. ongoing process to audits and warrant of fitness inspections on all independently. OSH audits as part of upgrade the TCAL buildings under its control or ownership. operational audits. facilities through implementation of 3.2 TCAL will implement the asset management 2008/09 AMP maintenance and Annually. planned plans for each facility and negotiate with its renewals works in progress. development and shareholder appropriate budget allocations to asset management meet cost of annual maintenance renewals and programmes. improvements. 3.3 TCAL will maintain a monthly maintenance Contract Manager provides Monthly from contract works monitoring and reporting process to documentation on monthly signing. ensure all planned and budget works are maintenance. completed. To ensure long term maintenance data recording TCAL will ensure all works are Confirm system in process of being listed on Tauranga City Council’s Confirm asset updated. register. Objectives for 2008/09 Performance Indicators YTD Actual Year End Target 4. To complete twice 4.1 TCAL will continue to commission six monthly and Independent operational audits to be Six monthly. yearly operational annual independent operational audits of its conducted quarterly now to ensure audits on facilities facilities and management contractor to ensure all more detailed monitoring. First such and management of facilities are operated within Pool Safe guidelines audit completed December 2008. all TCAL facilities to and meet all public health, safety and OSH maintain a Pool Safe requirements. rating and contract tender compliance. 4.2 TCAL will continue to commission independent Reviewed as part of independent Ongoing. water testing at its facilities to ensure the New operational audit. Zealand standard governing the safe maintenance of water quality (NZ 5826:2000 or any replacement standard) is met and maintained. 5. To complete annual 5.1 TCAL will continue to commission Centre for Surveys undertaken February 2009. Annual surveys with overall CERM surveys of Education and Recreation Management Results not yet provided. satisfaction ratings of 75% or customers at (CERM) to undertake independent surveys at greater. Baywave TECT the facilities to monitor customer satisfaction Aquatic Leisure and business performance to ensure all CERM Centre, Greerton attributes meet a benchmark of 75% (or Aquatic & Leisure greater) satisfaction rating. Centre and Mount Maunganui Hot Salt Water Pools as the main TCAL customer feedback systems that monitor customer satisfaction and inform management of actions required to exceed customer expectations. Objectives for 2008/09 Performance Indicators YTD Actual Year End Target 5.2 TCAL will ensure there is an ongoing easy to LeisureCo have a customer service System in place on contract use customer service and complaints process complaints system in place. All signed. set up in association with an approved complaints acted upon within agreed customer service charter and any customer timelines and any significant issues complaint will be acted upon within five working reported to TCAL. days of identification/lodgement. 6. To achieve and or Targets exceeded at YTD resulting in Measured at the end of year. exceed the third year profit share returned to TCAL. contract targeted use and financial performance of facilities, programmes and services. 7. To seek ongoing 7.1 TCAL will ensure that a quality assurance plan All plans in place. Reviewed quarterly. Quality assurance plan in evaluation and is put in place for each pool and monitored on a place once contract signed. continuous monthly basis with any breech being acted improvement of upon within five working days. TCAL facilities, programmes and 7.2 TCAL will ensure that each facility has a 2008/09 Business Plans adopted. Annual business plan agreed services. business plan and that all agreed outcomes and to by TCAL. targets are measured and met on a monthly, 2009/10 due March 2009. quarterly, half yearly and annual basis. 8. To continually 8.1 TCAL will ensure that commercial value of 100% investigate viable shareholder’s investment is considered by the and suitable directors to equate to the shareholder’s funds business expansion as disclosed in the balance sheet. and new business Objectives for 2008/09 Performance Indicators YTD Actual Year End Target opportunities that are 8.2 TCAL will ensure that ratio of shareholder funds Excluding depreciation, shareholders 100% reflective of our to total assets remains at 1 : 1. funds equate to assets. Depreciation company values and is not funded within TCAL. assist in meeting our company short term and long term objectives.
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