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i-site - ANNUAL REPORT Auditors Report Annual general meeting agenda 13 September --Welcome --Present --Apologies --Minutes of Previous AGM --Chair s Report --Financial Report --Appointment of Auditors --Appointment of Directors/Chair --General Business VIN INC Board of Directors As at 30 June --Phillip Barnett --Bobbi Brown --Graham Brownrigg --Rebecca Ingram, Chair --Jacqui Lloyd --Ross Shearer --Sue Whiting VIN INC Executive As at 30 June Paul Yeo, Executive Manager & Board Secretary Kia Ora I d like to warmly welcome you to our Annual Conference and AGM in Greymouth Māwhera, where it is my pleasure to present the Visitor Information Network Incorporated (VIN Inc) FY18 Annual Report. Our conference theme this year is Future Focus. While there is much to look forward to in the coming year it s important that we look back on our overall financial and service performance against our / Annual Plan. The year was the first to come under our /2020 Strategic Plan. Our vision is to be the best official visitor information and booking network in the world. Our strategy states that how we get there will involve using technology transformation, improving our training and knowledge management and taking a more commercial lead to reach our goals. Our member-based focus groups, now in their second year, aim to give members more say in how we roll out this strategy. It s been a mixed year: we re financially sound but our service targets set last year were challenging. Firstly, from a financial perspective, we have posted a much larger surplus than anticipated. This may seem like a good thing but as our role is based on marketing and delivering services to our members we generally aim to spend all of our income each year. However as an Incorporated Society, it is prudent that we keep sufficient money in the bank to cover contingencies, as outlined in our constitution, should any operational changes occur. The Board has agreed that around 200,000 in net assets should be held at any one time, so this year we wanted to raise the balance from our closing balance of 182,000 at the end of the previous financial year. Having successfully done this, our financial statements received another boost after investment in our main summer marketing campaign was reduced. This was done in the knowledge that new plans for FY19 would require higher investment than normal in a number of areas including website development and a coordinated digital marketing campaign. Our end of year financial position of 277,870 puts us in a strong position to do this in the coming year. This year we increased our investment in training across the network to ensure we continue to enhance our professionalism and knowledge base as well as financially supporting our annual conference. From a service performance perspective, our stand out area was in customer experience, where all of our indicators set at the beginning of the year were exceeded. i-sites are adept at providing a personalised Manaakitanga to our visitors and the feedback we receive continues to show that we exceed our customer s expectations in this regard. In our brand and awareness measurement area, 57% of all international holiday visitors are aware of our brand and 44% are converted to visiting at least one i-site during their stay, which equates to over 885,000 international visitors. Both results fell slightly short of our target. Productivity remains a challenging area, with sales revenue falling, however the network still generated over 65 million in sales. So while we are successful influencers and visitors use us for information and advice there is a growing number who choose to book directly with suppliers through alternative channels. Hence not all of our productivity and network value targets were met. This has been the second year that our brand has been closely aligned with Tourism New Zealand s award-winning 100% Pure New Zealand campaign. Both the i-site and 100% Pure New Zealand brands now sit side by side in our advertising as well as featuring in a range of collateral ranging from store welcome signs and digital displays to our popular New Zealand Touring Map that highlights the breadth of our network and is now produced in both English and Chinese editions. The year ends with a network of 80 full member i-sites one less than the same time last year and a number of satellite locations. We are also seeing a growing relationship with the Department of Conservation visitor centre network with four of our locations now fully integrated. We remain future focussed on our key themes and actions for the year ahead: evolving and improving our brand and awareness; productivity, and customer experience as well as demonstrating to our stakeholders our value as a network. We see a strong future for bricks and mortar visitor centres but recognise that we also need a stronger online presence to complement this. Ngā mihi, Rebecca Ingram Chair VIN INC 3 4
i-site - ANNUAL REPORT Auditors Report i-site - ANNUAL REPORT Auditors Report Independent Auditor s Report To the readers of Visitor Information Network incorporated s performance report and performance information The Auditor-General is the auditor of Visitor Information Network Incorporated (the Society ). The Auditor-General has appointed me, Henry McClintock, using the staff and resources of BDO Wellington, to carry out the audit of the performance report, of the Society on his behalf. Opinion We have audited the performance report of the Society on pages 6 to 14, which comprises the entity information, the statement of service performance, the statement of financial performance and statement of cash flows for the year ended 30 June, the statement of financial position as at 30 June, and the statement of accounting policies and other explanatory information. In our opinion: the reported outcomes and outputs, and quantification of the outputs to the extent practicable, in the statement of service performance, are suitable; the accompanying performance report presents fairly, in all material respects: --the entity information for the year ended 30 June ; --the service performance for the year then ended; and --the financial position of the Trust as at 30 June, and its cash flows for the year then ended in accordance with Public Benefit Entity Simple Format Reporting Accrual (Public Sector) issued by the New Zealand Accounting Standards Board. Our audit was completed on 20 August. This is the date at which our opinion is expressed. The basis for our opinion is explained below. In addition, we outline the responsibilities of the Board and our responsibilities relating to the performance report, we comment on other information, and we explain our independence. Basis for our opinion We carried out our audit in accordance with the Auditor- General s Auditing Standards, which incorporate the Professional and Ethical Standards and the International Standards on Auditing (New Zealand) issued by the New Zealand Auditing and Assurance Standards Board. Our responsibilities under those standards are further described in the Responsibilities of the auditor section of our report. We have fulfilled our responsibilities in accordance with the Auditor-General s Auditing Standards. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Responsibilities of the Board for the performance report The Board is responsible, on behalf of the Society, for; identifying outcomes and outputs, and quantifying the outputs to the extent practicable, that are relevant, reliable, comparable and understandable, to report in the statement of service performance; the preparation and fair presentation of the performance report which comprises, the entity information, the statement of service performance; and the statement of financial performance, statement of financial position, statement of cash flows, statement of accounting policies and notes to the performance report in accordance with Public Benefit Entity Simple Format Reporting Accrual (Public Sector) issued in New Zealand by the New Zealand Accounting Standards Board The Board is responsible for such internal control as they determine is necessary to enable them to prepare a performance report that are free from material misstatement, whether due to fraud or error. In preparing the performance report, the Board is responsible on behalf of the Society for assessing the Society s ability to continue as a going concern. The Board is also responsible for disclosing, as applicable, matters related to going concern and using the going concern basis of accounting, unless there is an intention to merge or to terminate the activities of the Society, or there is no realistic alternative but to do so. The Board s responsibilities arise from the Crown Entities Act 2004. Responsibilities of the auditor for the audit of the performance report Our objectives are to obtain reasonable assurance about whether the performance report, as a whole, are free from material misstatement, whether due to fraud or error, and to issue an auditor s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit carried out in accordance with the Auditor-General s Auditing Standards will always detect a material misstatement when it exists. Misstatements are differences or omissions of amounts or disclosures, and can arise from fraud or error. Misstatements are considered material if, individually or in the aggregate, they could reasonably be expected to influence the decisions of readers, taken on the basis of this performance report. We did not evaluate the security and controls over the electronic publication of the performance report. As part of an audit in accordance with the Auditor-General s Auditing Standards, we exercise professional judgement and maintain professional scepticism throughout the audit. Also: We identify and assess the risks of material misstatement of the performance report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. We obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Society s internal control. We evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Board. We evaluate the appropriateness of the reported performance information within the Society s framework for reporting its performance. We conclude on the appropriateness of the use of the going concern basis of accounting by the Board and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Society s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor s report to the related disclosures in the performance report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor s report. However, future events or conditions may cause the Society to cease to continue as a going concern. We evaluate the overall presentation, structure and content of the performance report, including the disclosures, and whether the performance report represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with the Board regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Our responsibilities arise from the Public Audit Act 2001. Independence We are independent of the Society in accordance with the independence requirements of the Auditor-General s Auditing Standards, which incorporate the independence requirements of Professional and Ethical Standard 1 (Revised): Code of Ethics for Assurance Practitioners issued by the New Zealand Auditing and Assurance Standards Board. Other than in our capacity as auditor, we have no relationship with, or interests, in the Society. Henry McClintock BDO Wellington On behalf of the Auditor-General Wellington, New Zealand 5 6
i-site - ANNUAL REPORT Auditors Report i-site - ANNUAL REPORT Auditors Report Entity information and Statement of Service Performance This report covers VIN Inc s (trading as i-site New Zealand) service performance for the year ending 30 June against the forecast statement of activities, performance measures and standards set out in VIN Inc s Annual Business Plan -. VIN Inc is a incorporated society registered under the Incorporated Societies Act 1908. It is a controlled entity of Tourism New Zealand, governed by a Board of Directors. The entity is the owner of the i-site brand and livery. Tourism New Zealand provides staff, support services, business systems and marketing to raise the profile of the i-site network. i-site New Zealand has established membership standards and requirements that individual centres must achieve to use the i-site brand and become a part of the network of centres. These standards are enforced by site inspections of the centres by Qualmark business advisors. i-site NEW ZEALAND STRATEGIC PLAN -2020 Output Area Performance - i-site New Zealand delivered the following four categories of output areas: Output Area 1: Brand & awareness (Page 5 VIN Inc Annual Business Plan /18) Indicator Performance Status 60% of international holiday visitors are aware of the i-site brand 45% of international holiday visitors use i-sites Full year result: 57% YE Mar-18. Measurement sourced from International Visitor Survey. (Down from 61% Mar-17). Full year result: 44% YE Mar-18. Measurement sourced from International Visitor Survey. (Down from 47% YE Mar-17). Strategic Objectives & Tactics Focus Area Vision: Customers rate us as the best official visitor information and booking network in the world Brand and Awareness Productivity Customer Experience Valued Network Reach more customers with a clearer value proposition New Zealand Align brand with 100% Pure Encourage Tourism NZ to increase promotion of i-site proposition in-market (digital) Explain i-site concept to Asian markets Strengthen RTO partnerships: target locals and their visitors to use i-sites Simplify the business operation to drive down costs Enable more efficient information delivery and increase sales from a more comprehensive, live product inventory Generate more net promoters: Provide a consistent, engaging shop experience with localised flavour Provide a personalised Manaakitanga (Welcome) Deliver visitor duty of care (freedom camping, outdoors safety, driver education, environmental care code) Develop policies to support Qualmark Use TECHNOLOGY TRANSFORMATION Improve our TRAINING AND KNOWLEDGE MANAGEMENT Take a COMMERCIAL LEAD Secure investment: Build a stronger case for funding through improved information gathering, analysis and reporting i-site New Zealand Mission: Matching visitors with quality experiences, helping them to safely see and do more, creating net promoters Driving community and business growth through delivery of trusted information and a competitive sales channel Providing Manaakitanga that our host communities take pride in Output Area 2: Productivity (Page 8 VIN Inc Annual Business Plan /18) Indicator Performance Status Average transaction value of an i-site visitor increases 5% annually Maintain network gross travel sales at current level 40% of international visitors who use i-sites make bookings Level of profitability before local government/rto funding is maintained or improves BookIT retail sales increase to 3 million annually across the network Average value 103 YE Jun-17. Measurement sourced from Deloitte i-site Annual Survey. (Decreased from 121 YE Jun-16). Gross travel sales 58m YE Jun-17. Measurement sourced from Deloitte i-site Annual Survey. (Decreased from 64m YE Jun-16). Full year result: 32% YE Mar-18. Measurement sourced from International Visitor Survey. (Down from 34% YE Mar-17). Full year result: Local government funding of 10.7m YE Jun-17. Measurement sourced from Deloitte i-site Annual Survey. (Increase from 10.3m YE Jun-16). Sales of 3.01m YE Jun-18. Measurement sourced from BookIT analytics. (Increased from 2.9m YE Jun-17). Output Area 3: Customer experience (Page 10 VIN Inc Annual Business Plan /18) Indicator Performance Status International visitors rate their overall i-site experience satisfaction level at 84% or above The i-site network achieves a Customer Radar Net Promoter Score of 80% or above 85% YE Mar-18. Measurement sourced from International Visitor Survey data. (Up from 84% YE Mar-17). Cumulative score of 91.8% as at Jun-18. Measurement sourced from Customer Radar analytics. (Up from 87.8% as at Jun-17) i-site New Zealand has identified four strategic outcomes that will result from achieving the vision, mission and goal: The i-site network achieves a TripAdvisor Net Promoter Score of 85% or above Cumulative score of 85.3% as at Jun-18. Measurement sourced from TripAdvisor analytics. (Down from 86% as at Jun-17) Outcome 1 Outcome 2 Outcome 3 Outcome 4 i-site New Zealand will increase the visibility of the network to ensure that more visitors are influenced by i-sites and that economic value is delivered to the visitor sector. I-SITE New Zealand will support the development and implementation of new technology systems that will simplify members business operations and lower costs. The i-site network has a proven influence in encouraging visitors to do more during their New Zealand holiday. i-site New Zealand will provide training and a quality assessment programme to increase the overall satisfaction of visitors that use i-sites. This will extend to the recommendation of experiences that, wherever possible, are Qualmark endorsed. i-sites substantial connection with visitors, and the geographical reach of the network, provides significant opportunities for the tourism industry. i-site New Zealand will manage relationships and demonstrate value to Local Government and other owners to maintain their investment in i-sites. i-site New Zealand will also provide member communications, networking opportunities and administrative support to enable members to deliver the best service offerings. Output Area 4: Valued network (Page 15 VIN Inc Annual Business Plan /18) Indicator Performance Status 65% of international holiday i-site users are influenced in their decision making by i-sites Satisfaction of overall tourism experience by i-site users maintained at or above 90% and above that of non-users Full year result: 62% YE Mar-18. Measurement sourced from International Visitor Survey data. (Down from 63% YE Mar-17) Full year result: 92% YE Mar-18, ahead of non-user rating of 91%. Measurement sourced from International Visitor Survey data. (Similar to 92% and 90% respectively YE Mar-17) Not 7 8
i-site - ANNUAL REPORT Auditors Report i-site - ANNUAL REPORT Auditors Report Financial Statements Statement of Financial Position AS AT 30 JUNE Statement of Financial Performance - Operations Notes Notes Current Assets Revenue From Non-Exchange Transactions Cash 256,941 155,133 Receivables from exchange transactions 5,885 12,705 Conference Income receivables 8,970 7,970 Sundry Debtors 2,855 246 GST Receivable 7,409 7,501 Prepayments - - Total Current Assets 282,060 183,554 Non-Current Assets Intangible Assets BookIT Software 5 16,411 23,910 Total Non-current Assets 16,411 23,910 Total Assets 298,471 207,464 Current Liabilities Trade Payables 1,677 1,030 Other Payables 10,604 13,250 GST Payable - - Withholding Tax - - Revenue Invoiced in Advance 8,320 10,395 Total Current Liabilities 20,601 24,675 Total Net Assets/(Liabilities) 277,870 182,789 Statement of Changes in Equity AS AT 30 JUNE Net surplus/ (deficit) for the year: Notes Operations 169,127 29,565 Conference (17,672) (19,338) Training (56,373) (45,091) 95,082 (34,864) Opening Equity brought forward 182,789 217,654 Tourism New Zealand Grants 6 250,000 250,000 Tourism New Zealand In Kind Grants 6 165,096 158,596 Revenue from exchange transactions Membership Subscriptions 159,307 160,920 Customer Radar Fees - 29,667 NZ Post Income (446) 89,817 Sale of Uniforms and Products - 182 Interest - 5 Total Revenue 573,957 689,186 Expense Marketing, Advertising & Campaigns 26,482 164,201 Events 1,930 1,470 Collateral Production & Design 61,488 56,962 Salaries 6 133,107 130,723 i-site support expenses 6 31,989 27,874 Quality Assessment 35,190 87,056 Surveys & Research 52,500 43,500 Technology, Website & Extranet costs 7,471 162 Public Relations - 231 Strategy 2,992 16,977 Brochure Distribution 17,435 7,692 Board Expenses 11,050 7,989 NZ Post - Admin support - 88,111 Amortisation Expense 12,499 11,724 Loss on disposal - - Audit & tax fees 3 7,953 14,329 Legal fees 315 - Annual Report 1,958 - Other expenses 471 621 Total Expense 404,830 659,621 Net Surplus 169,127 29,565 The notes and accounting policies on pages 12 to 14 form part of and are to be read in conjunction with these financial statements Closing Equity 277,870 182,789 The notes and accounting policies on pages 12 to 14 form part of and are to be read in conjunction with these financial statements 9 10
i-site - ANNUAL REPORT Auditors Report i-site - ANNUAL REPORT Auditors Report Financial Statements (Continued) Statement of Financial Performance - Conference Statement of Cash Flows Notes Revenue from exchange transactions Cash Flows from Operating Activities Sponsorship 31,222 28,200 Registrations 47,335 48,953 Total Revenue 78,557 77,153 Expense Hosting expenses 49,880 52,547 Speakers 1,606 2,450 Board expenses 5,429 7,937 Contractor wages 14,469 13,688 General expenses 24,845 19,869 Total Expense 96,229 96,491 Net Deficit (17,672) (19,338) Crown revenue 250,000 250,000 Interest received - 5 Other revenue from exchange transactions 255,637 371,701 Payments to suppliers (389,920) (655,521) Goods and services tax (net) 92 (6,078) Net cashflow from operating activities 9 106,808 (39,893) Cash Flows from Investing Activities Sale of property plant and equipment - - Purchase of property plant and equipment (5,000) - Statement of Financial Performance - Training Net cashflow from investing activities (5,000) - Net increase (decrease) in cash held 101,808 (39,893) Opening cash brought forward 155,133 195,025 Cash at end of year 256,941 155,133 Revenue from exchange transactions The notes and accounting policies on pages 13 to 15 form part of and are to be read in conjunction with these financial statements Service IQ grant 10,980 7,435 Trainees Fees 6,105 16,891 Total Revenue 17,085 24,326 Expense Service IQ expense 990 473 Co-ordinator 41,490 40,792 Other training expenses 30,977 28,153 Total Revenue 73,458 69,417 Net Deficit (56,373) (45,091) The notes and accounting policies on pages 12 to 14 form part of and are to be read in conjunction with these financial statements 11 12
i-site - ANNUAL REPORT Auditors Report i-site - ANNUAL REPORT Auditors Report Notes to the Performance Report Note 1. Statement Of Accounting Policies Basis of preparation The financial statements have been prepared on a going concern basis, and the accounting policies have been applied consistently throughout the period. The financial statements have been prepared in accordance with the Financial Reporting Act 2013. They comply with Public Benefit Entity Simple Format Reporting Accrual (Public Sector) and qualify for Tier 3 reporting on the basis that the total expenses for the reporting periods are less than 2m. The financial statements comprise statements of: financial position; changes in equity; financial performance; accounting policies; as well as the notes to these statements. Amounts are presented in NZD and are rounded to the nearest dollar. Specific Accounting Policies The following specific accounting policies, which materially affect the measurement of financial performance and financial position, have been applied consistently to all years: Changes in Accounting Policies There have been no changes to accounting policies during the financial year. Goods & Services Tax VIN Inc is registered for GST with all amounts shown exclusive of Goods and Services Tax (GST), except for receivables and payables which are shown inclusive of GST. Taxation Income generated from within the circle of membership is income tax exempt based on the principle of mutuality. The income tax expense recognised in the Statement of Financial Performance is the estimated income tax payable in the current year, adjusted for any differences between the estimated and actual income tax payable in prior periods. Revenue Recognition Grants Grants received are recognised in income, unless specific conditions attach to a grant and repayment of the grant is required where these conditions are not met. In these cases, the grant is treated as a liability until the conditions are met. Membership subscriptions Membership subscriptions from i-site members are recognised in the month membership begins and is measured at fair value of the consideration received or receivable. Intangible Assets Intangible assets are recorded at cost and amortised over the estimated useful lives of the assets. Amortisation Amortisation is provided on a straight line basis, at rates calculated to allocate the assets cost, less estimated residual value, over their estimated useful lives. The amortisation period and the amortisation method are reviewed at least at the end of each reporting period. The estimated useful lives of the assets held are: BookIT Software 5 years Note 2. Economic Dependency To meet the test of a going concern VIN Inc is dependent on continuing funding from the New Zealand Tourism Board. This support is expected to continue into the foreseeable future. Note 3. Audit Fees Fees paid to BDO Wellington Audit fee 6,553 10,409 Other professional services 1,400 3,920 Other Professional services include preparation and completion of Income Tax Return. Note 4. Income Tax Expense No taxation is provided as VIN Inc has unutilised tax losses. Tax losses bought forward and not recognised in these financial statements and available for offset against current and future taxable income were 106,009 at 30 June (: 81,750). Note 5. Intangible Assets Availability of these losses is subject to confirmation by the Inland Revenue Department and applicable taxation legislation. VIN Inc has no imputation credits available as at 30 June (: nil). BookIT Software - Cost 63,620 58,620 BookIT Software - Amortisation (47,209) (34,710) 16,411 23,910 Total Intangible Assets 16,411 23,910 Note 6. Related Parties During the period, VIN Inc received cash grants totalling 250,000 from the New Zealand Tourism Board (: 250,000). In addition, during the year, VIN Inc has continued to receive the following in kind support from the New Zealand Tourism Board: Administrative and accounting services Employment and payment of 2 staff mainly devoted to work on VIN Inc The basis of valuing this support has been reviewed this year and has been calculated as 165,096 (: 158,596). 13 14
i-site - ANNUAL REPORT Auditors Report Notes to the Performance Report (Continued) Note 7. Contingencies There are no contingent assets or contingent liabilities as at 30 June (: Nil). Note 8. Statement Of Commitments There are no commitments at balance date (: Nil). Note 9. Reconciliation of surplus (deficit with cash flows from operating activities) Net Operating Surplus (deficit) 95,082 (34,864) Add/(less) non-cash items: Depreciation and amortisation 12,499 11,724 Add/(less) items classified as investing or financing activities: 12,499 11,724 Net Loss/(Gain) on disposal of assets - - Add/(less) movements in working capital items: - - (Increase) / decrease in receivables 3,210 (2,008) (Increase) / decrease in prepayments & stock - - Increase / (decrease) in payables and accruals (1,999) (312) Increase / (decrease) in income in advance (2,075) (8,355) (Increase) / decrease in GST 92 (6,078) (772) (16,753) Net cash inflow (outflow) from operating activities 106,808 (39,893) Note 10. Events After Balance Date No events occurred subsequent to balance date (: Nil). 15 16
Contact details i-site New Zealand VIN Inc., C/- Tourism New Zealand PO Box 95, Wellington, New Zealand phone: +64 4 462 8055 email: i-site@tnz.govt.nz consumer website: newzealand.com/isite corporate website: tourismnewzealand.com/isite