2012/2013 - ldc€¦ · annual report 2012/2013 4 career board changes ldc continues to play an...

LEADERSHIP DEVELOPMENT CENTRE

ANNUAL REPORT 2012/2013

G59

Hon Dr Jonathan Coleman Minister of State ServicesIn accordance with section 44(1) of the Public Finance Act 1989, I present, on behalf of the Leadership Development Centre

Board of Trustees, the annual report on the operations of the Leadership Development Centre for the year ended 30 June 2013.

Dr PAuL reynoLDs

Chair, Leadership Development Centre Board of Trustees

Presented to the House of representatives pursuant to section 44(1) of the Public Finance Act 1989

Published by the Leadership Development Centre, november 2013

G59

Contentsreport from the Chair .................................................................................................3

report from the Chief executive ................................................................................5

section one: Achievements and impact ....................................................................8

Highlights ..............................................................................................................8

About us ..............................................................................................................11

our performance ................................................................................................13

Impacts ................................................................................................................14

section Two: Performance and delivery ...................................................................15

statement of service performance ....................................................................15

organisational capability and performance ......................................................22

Independent auditor’s report .............................................................................23

section Three: Financial statements 2012/13 ..........................................................25

statement of responsibility ................................................................................26

statement of comprehensive income ...............................................................27

statement of financial position ..........................................................................28

statement of changes in equity .........................................................................29

statement of changes in fellowship funds ........................................................29

statement of cashflows ......................................................................................30

notes to and forming part of the Financial statements ...................................31

section Four: Appendicies .........................................................................................50

Appendix A: Directory.........................................................................................50

Appendix B: LDC member agencies 2012/13 ....................................................51

Contents

annual report 2012/2013

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3

leadershipdevelopmentcentre

Strong leadership is vital

over the last year, the need for strong leadership has never

been more vital. There is no doubt, today’s working environment

presents us with more complexity and ambiguity, with pressures

and challenges coming from more directions than ever before.

The expectation on leaders is great. We need leaders who can go

beyond their technical capabilities and who want to develop their

own leadership skills so that they can achieve better outcomes.

our leaders need to be able to develop strong teams and

encourage those people to work collaboratively for joint

outcomes. All of our leaders need to be prepared and willing to

use their leadership talents across the public sector.

Collective impact

With the Government’s focus on creating a public sector that is

more innovative, efficient and focused on delivering better

public services to new Zealanders, working collaboratively is

imperative.

In his February 2013 address to the Institute of Public

Administration new Zealand (IPAnZ), Hon Bill english, Deputy

Prime Minister, stressed the importance of ‘collective impact’.

He explained that our public sector needs to have porous,

outward-looking agencies that work collaboratively and value

the skills that others can contribute to the overall work efforts.

By understanding the ‘whole’ and providing a collective

impact, we will be able to drill down to help individuals more

comprehensively and efficiently.

The advice offered in the Better Public Services Advisory Group

Report of november 2011 took on a greater imperative when

the Government set the 10 key results in 2012. none of these

10 challenging result areas can be achieved by a single agency.

Developing high-quality influencing skills and being able to work

collectively needs to be a priority for leaders.

Report from

the Chair

Greater expectations on chief executives to raise leadership levels

Proposed changes to the state sector Act 1988 this year outlined

new expectations for chief executives in building capability

in their own agencies and across the Public service. Chief

executives will enact a clarified and extended mandate from the

state services Commissioner as they participate in and drive

leadership across traditional boundaries. The legislation changes

sharply focus chief executives on building a strong leadership

pipeline to enable us to deliver effectively on the Government’s

priorities.

The Leadership Development Centre’s (LDC’s) role as a shared

service, available to help all chief executives meet their new

responsibilities, has never been more important. Chief executives

require high-quality leadership development information in order

to develop their most talented people well. They need to be able

to clearly identify their own agencies’ leadership strengths and

challenges and make decisions that will benefit their agencies

and the whole public sector.

Innovative leadership development

our data and the research show that senior leaders need a

breadth of experience to take on more senior roles. so, there

is a greater emphasis on making experiential development an

important part of a leader’s development.

In April 2013, the LDC Board signed off a new leadership

development initiative, Leadership Link, an experiential learning

programme to be developed by LDC. Leadership Link will take

high-potential leaders and place them into other organisations

to enable the individuals to experience different leadership roles

and develop their skills. This initiative will help chief executives

and other senior leaders formulate a more targeted and planned

approach to developing successors.


4

Career board changes

LDC continues to play an important part in the decisions made

at career boards. Career boards have continued to grow in

their system role, and they are now responsible for identifying

successors for system critical positions. LDC provides real

value to career boards in its role as a centre of excellence

in leadership development, assisting chief executives with

their agency and system responsibilities and providing

expert knowledge of senior leader and system leadership

requirements.

Board changes

We were pleased to welcome David Carter to the LDC Board

in september 2012, following a decision in 2011/12 to invite a

private-sector individual to join the Board. We also farewelled

Geoff Bascand, who was appointed as Deputy Governor and

Head of operations at the reserve Bank of new Zealand in

February 2013. He resigned from his role as Chief executive,

statistics new Zealand, and stepped down from the LDC Board.

We highly valued Geoff’s guidance and wisdom over the three

and half years he was a Board member and wish him well in his

new position.

Dr Paul reynolds

Chair, Leadership Development Centre

5


Report from the

Chief Executive

Strengthening and supporting the system of public sector leadership in New Zealand

The 2012/13 year has been highly productive for LDC as we

implemented the 2012–14 business strategy and directed our

efforts towards strengthening and supporting the new Zealand

public sector leadership system. This focus acknowledges

the unique view LDC has of the public sector through our

assessments and our work with public sector chief executives

and senior leaders.

The importance of strong leadership development is core to

a high-performing 21st century public sector. The research is

compelling – there is a clear link between developing people and

improving business performance.

Assessment for Development

A growing focus for LDC relates to working with high-potential

leaders, primarily through Assessment for Development (AfD).

The AfD data, that LDC gathers and analyses, directly assists the

individuals, chief executives, the state services Commissioner

and the career boards by building a single across-the-board

measure of system capability and development needs. It provides

chief executives and the career boards with a single consistent

comparison of senior leader capability and allows for a collective

approach, led by the state services Commissioner, to identifying

and developing talent.

over the last year, AfD has being increasingly recognised by chief

executives and the state services Commission as a key input to

the whole-of-system identification and development of talent.

Research

our revised business strategy includes a greater focus on

research. During the 2012/13 year, we set up a research agenda to

ensure that LDC provides public sector leaders with relevant and

accessible leadership research. The research agenda also informs

LDC’s and other agency’s activities and encourages the growth of

leadership research in new Zealand.

We established the scholars Panel, comprising academic

leadership experts from new Zealand and overseas. The Panel will

help set the direction for leadership development both for LDC

and the wider new Zealand public sector.

We also renewed our agreement with the united states-based

Corporate Leadership Council to continue to provide up-to-date

leadership research, including a quarterly, tailored research report

relevant to new Zealand public sector chief executives.

The research, Performance Improvement Framework (PIF)

analysis and our other data, such as AfD, enable us to provide

the public sector with robust data and the information it needs to

inform the delivery of quality leadership development.

New leadership resources

From a combination of quantitative and qualitative data, such as

the PIF, AfD and chief executives’ and senior leaders’ feedback,

we identified a demand for practical resources on leadership

development and developed a range of toolkits. These toolkits

cover a range of topics, including: ‘experiential learning’ and

‘Transitioning to a new role’. The toolkits will give easy access to

leadership development topics to help leaders deliver on their

role of leading and managing others. They will be highly valuable

to individual developing leaders as well as human resource (Hr)

and organisational development (oD) teams in their leadership

development programmes. The toolkits are a clear demonstration

of LDC’s shared service and centre of excellence roles.


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Facilitating Maori public sector leadership

Following the review of the Maranga Tira programme in 2011,

LDC facilitated a hui in partnership with chief executives from

the natural resources sector (nrs) in november 2012 to

consider future options for stewarding Maori leadership within

and across the public sector. The hui recommended working

towards a networked and distributed leadership to develop

Maori talent and foster collaboration between agencies.

The hui also requested that chief executives present their

high-potential Maori leaders at sector career boards in order to

better identify and steward those individuals’ development.

Working closely with agencies on their leadership programmes

As part of our advisory and centre of excellence role, LDC has

been working closely with agencies to help them develop their

leadership programmes and ensure their access to relevant LDC

topics and providers. We had an increased number of requests

from individual agencies for specifically tailored options from

our leadership programmes. As a result, over the last year, we

have been developing a more customised approach to our

programme delivery, offering a range of modularised, bespoke

options that are informed by a combination of feedback and

data, such as PIF and employee engagement.

Partnerships

We have continued our relationships with The Australia and

new Zealand school of Government (AnZsoG), Victorian

Leadership Development Centre (VLDC) of the Victoria state

Government and the Australian Public service Commission’s

(APsC’s) strategic Centre for Leadership, Learning and

Development and regularly share information on leading

practice and new developments in senior leader development

with these organisations.

our new Zealand Defence Force (nZDF) partnership is

ongoing, with the narrative research project outcomes being

incorporated into our development work and being made

more widely available. Many of these will feature in our

leadership development toolkits.

Leadership programmes

our portfolio of structured leadership programmes has been

designed to strengthen the leadership capabilities across the

board, from early leadership roles through to chief executive

level. our core programmes included:

• Chief Executive Development

• Executive Leadership Learning Network – informed

by Public service career boards for those close to moving

into large complex roles, including chief executive

• Leadership Development Programme – for senior

public sector leaders with a track record of high

performance who are looking to progress to the next

stage in their careers

• Leadership in Practice – for leaders moving from

functional to organisation leadership roles

• Action Learning Groups – aimed at managers who

manage other managers, these workshops explore

specific themes, such as ‘What great managers do’.

LDC designs and facilitates these programmes, along with

tailored interventions that draw on lessons from ‘real world’

experiences.

our programmes are complemented by member events that

focus on areas of particular relevance and interest to the

public sector. Both local and international speakers present

on up-to-date leadership concepts and thinking.

Through these events and our programmes, members can

build the networks that are critical to the success of the

Better Public services approach and make connections

that will endure well beyond the leadership development

programme.

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Senior leaders’ programmes

The biggest changes to our senior leaders’ programmes

involved replacing the Public sector Advanced Leadership

Programme (PsALP) with the new executive Leadership

Learning network (eLLn) in May 2012 and the Leadership

Development Programme (LDP) in november 2012.

These two new programmes enable us to better target

our approach to individual learning. They aim to match the

programme content with the needs of the cohort and the

system. They reflect contemporary leadership development

practices in their structure and delivery, for example, Action

Learning Groups (ALGs) and coaching.

These programmes are becoming increasingly important due

to the whole-of-system leadership development focus arising

from the chief executives’ and state services Commission’s

senior leader work, including a stronger focus on succession

and the career boards. The two new LDC programmes aim

to support chief executives as they seek to drive leadership

development for their own agencies and across the public

sector.

In appreciation

Thank you to the Board for its highly valuable guidance during

the past year. With greater expectations on chief executives

to deliver leadership development, the Board’s input, advice

and support of LDC’s activities and approaches is essential in

helping shape our direction and priorities.

Thank you also to the LDC staff and development partners for

their ideas and enthusiasm in what has been an incredibly

productive year, as we have strengthened and enhanced LDC’s

role in delivering quality leadership development.

our providers, consultants and speakers have made valuable

contributions, and I have greatly valued their work and the

insights and reflections they have shared with us and senior

leaders across the public sector.

Through our work providing leading practice advice and

resources and drawing from high-quality data, we facilitate

common and consistent approaches across agencies. This helps

chief executives and the career boards to assess leadership and

talent fairly and accurately across the public sector and is vital

in enabling chief executives to work collectively.

This leads me to a final thank you to our member agencies.

Their continuing contribution to developing public sector

leadership sees them positively engaged in working towards a

successful system-wide approach to leadership.

rosemary Hannah-Parr

Chief Executive, Leadership Development Centre


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Highlights

49 chief executives engaged in their

own development

53 people began senior leader programmes

− Leadership Development

Programme (LDP) and Leadership in Practice

(LiP)

49

215 engagement opportunities brokered and partnerships

enhanced

45 people completed an Assessment for Development (AfD)

and a further 43 people started the

assessment process

11 senior leaders

began the Executive Leadership Learning

Network (ELLN) programme, with two now in chief executive roles

over 600 members accessed

Corporate Leadership Council (CLC)

research articles

179 agency advice

sessions, briefings and

input into system development

over 460 senior leaders attended LDC

member events

11 53 600215 179 460

AfD and PIF data analysed

to inform leadership development

priorities.

45

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SECTION ONE ACHIEVEMENTS AND IMPACT

Systems information—better data informing priorities

In the 2012/13 year, LDC focused on mining the data it holds

and collects from Assessment for Development (AfD) and

leadership development programmes and overlaying it with

the Performance Improvement Framework (PIF) and individual

agency employee engagement results to determine areas in

leadership development that are particularly strong or that

need more attention. This information provides chief executives,

agencies and the state services Commission with valuable

insights into the state of and requirements for system leadership

development.

The AfD is a critical first step and has multiple benefits:

individuals and their managers are able to identify the right

development interventions for their needs; and agencies and the

leadership development system can easily identify the overall

themes that guide leadership development in our public sector.

LDC has improved the way it collects, analyses and reports its

information, including revising the suite of tools used in the

AfD. A leadership development analyst was employed in March

2013 to design new evaluation and reporting tools and provide

expertise in how to integrate and use the data gathered.

over the last year, chief executives and the state services

Commission have developed a greater appreciation for the AfD

as a key input to the career board process. The assessment

provides a consistent and common framework and set of

leadership development data that allows comparison across

multiple agencies and tiers. It enables chief executives and the

career boards to accurately compare and contrast their senior

leaders’ development.

Continuous improvement

Continuous improvement reviews have been conducted on the:

• executive Leadership Learning network (eLLn)

• Leadership Development Programme (LDP)

• Assessment for Development (AfD)

• Leadership in Practice (LiP) programme.

LDC has implemented recommendations from the reviews, with

changes made to both content and design.

The review of our Leadership in Practice (LiP) programme

content resulted in material being added to the week-long

residential course that is more responsive to the current

environment. A session on ‘leading in complexity’ was

introduced to the programme.

LDC also responded to participants’ feedback by creating apps

for the LiP programme content. This recognises that the course

material has a wider audience than the immediate participants,

and the apps significantly improve the dissemination of the

programme material. iPads, containing the course modules,

reference material and related e-books, were issued to course

participants. The LiP resources have also been added to

LDC’s website and have been made available to previous LiP

graduates.

Career boards

The proposed changes to the state sector Act 1988 have

resulted in sector career boards taking on responsibility for

identifying and developing high-potential leaders for system

critical positions. The career boards will continue to focus

on enabling cross-sector movement of the high-potential

leadership cohort and fostering opportunities across agencies to

support the development of a wider group of leaders.


10

Looking at leadership needs

LDC has looked at the PIF results to date, including the Getting

to Great report, which summarises 21 individual PIF reviews.

Analysis of the results has provided LDC with an insight into

progress in public sector leadership development and has

enabled us to consider how we can best align our services

to benefit leaders in developing themselves and their teams,

agencies and the public sector.

The collated PIF results also demonstrated that the best

institutions enjoy strong internal leadership that can attract

talented people and inspire those people to dedicate

themselves to working with integrity in delivering the agency’s

outcomes. LDC’s purpose is to assist chief executives and their

agencies, the state services Commission and career boards in

attaining high-quality leadership and setting up clear succession

pipelines.

From the PIF analysis, in 2012/13, LDC identified three target

groups for leadership development: tier 2 leaders, heads of

corporate functions with a focus on organisational leadership

and management, and emerging leaders, as well as specific

areas for development. These include managing vision and

purpose, strategic agility and innovation management. Work is

underway on how best to incorporate these areas. one example

is the ‘What great managers do’ Action Learning Group.

our clinic topics reflect our response to current leadership

needs. They have included sessions presented by international

and national leadership experts on such topics as: complexity,

innovation, leadership for delivering better Public services and

leader-led development.

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About usThe Leadership Development Centre (LDC) is the public sector’s centre of excellence in leadership

development.

LDC operates as a shared service for member public sector leaders and has an in-depth understanding of

the leadership challenges facing the new Zealand public sector. It exists to develop leaders who will lead

the public sector effectively and achieve the best results for new Zealanders by providing better public

services.

2012/13 Leadership Development Centre Board

• Dr Paul reynolds (Chair), Chief executive Ministry for the

environment

• David Carter, Group Director, Performance excellence and

Group Health and safety Manager, Beca

• Mike Hollings, Chief executive Te Aho o Te Kura Pounamu

− The Correspondence school

• Lieutenant General rhys Jones, Chief of the new Zealand

Defence Force

• Colin MacDonald, Chief executive and secretary for

Internal Affairs Department of Internal Affairs

• Martin Matthews, Chief executive Ministry of Transport

• Al Morrison, Director-General Department of Conservation

• Iain rennie, state services Commissioner (permanent

member)

• Carolyn Tremain, Chief executive and Comptroller of

Customs new Zealand Customs service

Departures during 2012/13• Geoff Bascand, Chief executive Department of statistics

(until May 2013)

The Board is supported by a core team led by the LDC

Chief executive and uses the services of a wide network of

leadership development consultants and providers, both

national and international, to deliver services and activities.

At 30 June 2013, LDC had 61 government department and

agency members.

LDC is led by some of the public sector’s most experienced and

knowledgeable leaders and is underpinned by the joint objectives

of the public sector chief executives and the state services

Commissioner.

one of LDC’s key areas of focus is to develop existing leaders and

identify the public sector’s next generation of leaders.

LDC services include:

• leading practice guidance

• access to tools for talent spotting

• leadership development planning and implementation

• individual assessment

• customised programmes for identified leaders

• information on experts in the field and accredited coaches

• access to facilitators and mentors

• information on the latest leadership development research.

Our organisation

Governance

LDC is governed by a Board of Trustees, comprising chief

executives from mostly public sector organisations elected by

their peers. The Board develops policies and defines the focus of

LDC’s work. It also acts as a bridge between LDC and the public

sector in new Zealand.

In February 2012, LDC Board members voted to change the

constitution to include provision for a private sector leader to

be co-opted to the board. David Carter, Beca Group Director,

Performance excellence and Group Health and safety Manager,

new Zealand, joined the LDC Board in september 2012.


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Output 17%

Knowledge and information

Output 21%

Advisory services

Output 62%

Programmes and events

Impact: Agencies use LDC advice to inform their investment in leaders

LDC will use its evidence to provide leadership development advice to agencies

and individuals

Impact: Better connected system and people

LDC will connect people, agencies and institutions to leverage opportunities for

collective public sector learning

Intermediate outcomes

More evidence-informed investment in leadership system

Intermediate outcomes

Better leaders

LDC outcomes

Strengthen public sector More leaders to be highly leadership capability successful in their roles

State Services Commission objective to which we contribute:

Pillar 3: Building System Capability. Strengthening the leadership of the public service, which is especially necessary during times of transformation and fiscal constraint.

Impacts for 2012/14

LDC’s 2012–2014 Performance Framework

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Our performance

First, we have practical experience working with potential

and well-established leaders in the new Zealand context. We

know what works in assisting these leaders to perform in their

current roles. We take an overview of a leader’s development,

checking in with them over time and following the results of their

development and leadership successes.

second, LDC’s ownership structure means it is a shared service

for chief executives. This system-wide perspective means that

LDC is agile and flexible and can quickly reshape its leadership

development system to respond to the changing needs of chief

executives and state services Commission in challenging times.

Furthermore, it can broker opportunities for collective benefit,

which may not otherwise be available to single entities.

As a result of this unique positioning, LDC has contributed to

building system capability through the following outcomes:

1. strengthening public sector leadership capability

2. encouraging more people to be highly successful in their

roles

3. encouraging more evidence-informed investment in the

public sector leadership system

4. supporting the emergence of better leaders.

A key focus of 2012/13 was for LDC to work with chief executives and the state services Commission on

initiatives to deliver a whole-of-system approach to senior leadership development and succession planning

across the new Zealand public sector, including career boards. During the year, we collected and synthesised

system insights and see this as having increasing relevance and impact on our overall performance and our

delivery towards the Better Public service results. one of our great values is the strong ancillary networks we

have helped establish across the public sector through membership with our organisation.

LDC is uniquely placed to deliver both for individuals and the system.

We put in place new measures that we will start to assess for

trend data and report on over time. Information will be used in

developing our strategic direction, advice and programmes. over

the next few years, we expect to be able to identify more clearly

the value that our brokering role contributes to the high-level

outcomes. We also expect our impact measurements around

connectedness and evidence-informed decisions will allow us to

monitor the progress of public sector leadership development in

supporting good service delivery to the new Zealand public.

Based on PIF results for 2012/13, we know that there are

significant opportunities for improvement. We will be using the

PIF data to monitor how people are adapting to changes in role

scope, complexity and level of expectation. our future aim is

to use Assessment for Development data and other individual

evaluations to assess the collective strengths and areas for

improvement.

over time, we expect to produce trend information on the

number of credible candidates available for non-specialised

senior positions who have been involved in LDC advice or

programmes. What we do know is that out of the current 29

Public service chief executives, eight are LDC alumni.


14

ImpactsLDC set a system-wide focus to ensure that we are delivering appropriate services to both individuals and

agencies across the system. We want to know that not only are our programmes improving leadership for

individuals, but also that LDC opportunities are resulting in better connected systems and people to manage

challenges together.

developing their leadership capability. one of the resounding

benefits participants refer to is the on-going support from peers

both during and well after completion of the ALG course.

LDC’s other programmes, such as its executive Leadership

Learning network also offer excellent networking opportunities

They allow participants to work as small cohorts of peers in a

bespoke programme based on individual system development

needs.

During the year, agencies increasingly used LDC advice to

inform leadership investment. The Assessment for Development

has taken on a more fundamental role in highlighting

development priorities for people who have been identified as

possible successors to critical roles and other senior leaders.

During the year, we worked with 88 senior leaders through this

process, and we know that this number will increase in the

following year.

These two areas rely not only on effective programmes that

encourage individuals and agencies to work together but also on

our new initiative of providing advisory services. Advisory services

are based on the knowledge (research and experience) that we

develop and share. We make this knowledge and information

available directly to organisations and also distil targeted advice

from it to provide to chief executives and agencies seeking to

enhance their development spend.

This year we have actively worked to connect public sector

leaders. research tells us that networking improves collaboration

but that it has been undervalued as a core leadership

competency. LDC strongly focuses on developing leaders’

networking abilities and is fully aware of the value in the long-

term relationships that it facilitates amongst its members.

LDC’s Action Learning Groups (ALGs) provide an excellent way for

leaders to broaden their networks and work collaboratively while

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SECTION TWO PERFORMANCE AND DELIVERY

Statement ofservice performanceour programmes and events expose public sector managers to new ideas and skills. Participants then have

the opportunity to apply these ideas and skills on the job, with the intensive LDC programmes supporting them

through that process.

Measurement at the output level focuses on the quality of the knowledge, information, advice and programmes.

LDC assumes that if our programmes are of a high quality, then leaders will, through better connection with

others, solve more public sector challenges, lead better and thereby improve the performance of the public

sector. LDC also intends to develop advice, based on a system perspective that will assist chief executives to

make well-informed investments in leadership to the benefit of the leadership development system as well as

the individuals concerned.

2013 ACTUAL 2013 BUDGET OUTPUT CLASS INCOmE EXPENDITURE INCOmE EXPENDITURE

INfORmATION AND kNOwLEDGE

system knowledge 86,245 112,068 89,574 95,265

resources and products 276,591 261,273 291,978 283,095

Development projects 240,481 196,751 255,254 281,431

Total information and knowledge 603,317 18% 570,092 17% 636,806 18% 659,791 17%

ADvISORy SERvICES

system stakeholder engagement 231,121 438,453 231,112 254,901

system advisory services 480,200 492,779 398,797 398,181

Products 85,003 66,828 76,000 76,671

Development projects 113,122 156,194 113,091 101,186

Total advisory services 909,446 28% 1,154,254 34% 819,000 24% 830,939 21%

PROGRAmmES AND EvENTS

Chief executive development 219,472 134,352 229,809 267,429

executive leadership programme 265,148 172,863 307,942 315,851

Leadership development programme 248,559 237,280 333,404 286,461

Public sector advanced leadership programme 117,785 104,054 121,284 151,928

Leadership in practice 491,870 493,308 547,608 573,633

White water learning 43,217 24,170 64,753 68,543

Fellowships 127,903 142,878 126,453 212,643

events 254,770 359,284 273,468 497,941

Total programmes and events 1,768,724 54% 1,668,189 49% 2,004,721 58% 2,374,429 61%

Total 3,281,487 100% 3,392,535 100% 3,460,527 100% 3,865,159 100%

All figures presented Are stAted in new ZeAlAnd dollArs

System stakeholder engagement expenses were higher than budgeted by $183,000, mainly due to actual allocation of staff time in this area being 19% instead of 7% as budgeted. This is consistent with the number of engagment opportunities brokered and agency advice sessions held during the year due to demand for LDC services in line with the revised business strategy.

Cost of Service Statement for the year ended 30 June 2013


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Achievement of our work programme

our work programme for the year was set out in three output classes. Achievements against these are described below.

Output 1: Knowledge and information

PERfORmANCE mEASURE TARGET 2012/13 ACTUAL 2012/13 ACTUAL 2011/12

Number of research products(Corporate Leadership Council, CLC)

LDC website to be updated 6 times with new CLC articles

Partially achieved: CLC articles were updated 5 times with 57 different articles.

New measure in 2012/13

Number of logins to the CLC section of the website

60 per month Achieved: 60 per month


Use of LDC research products; web downloads

3% growth monthly Not achieved: 9.8% growth overall


During the year, LDC members had access to the exclusive

member resources, tools and research, including:

• research: access to research on leadership development

from new Zealand and around the world, including from the

united states-based Corporate Leadership Council (CLC).

We provided a selection of articles and research on topics

relevant to individuals, teams and agencies.

• Toolkits: designed to provide practical support for senior

leaders’ own development and to support them as they

develop others.

• self-assessment tool: as well as our formal assessment

offerings, we provided access to a self-assessment tool based

on the state services Commission’s and chief executives’

Leadership success Profile. The assessment is designed

specifically for public sector, with a focus on the skills and

capabilities required of public sector leaders.

• recordings from our various leadership clinics, and of high

profile and international speakers.

• strategies, frameworks and evaluation tools: a place for

member agency Hr and organisational development leaders

to share best practice research and their own leadership

development strategies, competency frameworks and

evaluation tools.

• Book rappers: a catalogue of the leadership books available

to read, watch or listen to, providing insight into some of the

latest and best leadership thinking from around the globe.

Focus on research

In April 2013, LDC established a scholars Panel, comprising a

small group of academic leadership experts from new Zealand

and overseas. The Panel discusses current and future leadership

challenges, assists in providing up-to-date and practical advice

around emerging leadership development themes, and helps

direct LDC in relation to commissioning leadership research.

In this way, the scholars Panel will help set the direction for

leadership development both for LDC and the wider public sector.

17


Output 2: Advisory services


Number of engagement opportunities brokered and partnerships enhanced

100 Achieved: 215The higher than expected actual number was due to demand for LDC services due to the revised business strategy providing a broader mandate.

98

Number of agency advice sessions, briefings and input into system development

50 Achieved: 179The implementation of the business strategy from a predominately individual focus to an agency and public sector system focus resulted in increased activity.

66

Number of individuals assessed through Assessment for Development (AfD)

50 commenced

Achieved: 45 completed an AfD during 2012/13 and a further 43 commenced during the year but as at 30 June 2013 had not completed the assessment.

81

Advice is delivered in accordance with agreed quality

100% Achieved: Advice has been provided using appropriate and/or relevant frameworks and has been informed by data and leading practice research

New measure

Informed by our assessments, observations across the sector and

the latest research on leadership development, in 2012/13, we

provided advice to member chief executives, their agencies and

Public service career boards. our advisory services for members

included:

• Assessment for Development: a rigorous process for

identifying and evaluating the strengths and development

needs of individuals against the needs of agencies and the

sector

• 360-degree assessments

• brokering and delivering development opportunities

• interventions based on leading practices and tailored to

meet the needs of the new Zealand public sector

• opportunities to connect with agencies’ activities

through our whole-of-system knowledge of our member

organisations’ leadership development programmes and

interventions.


18

Individual development plans

From our reviews of new programmes for the 2012/13 year, we

found that few participants had individual development plans

(IDPs) in place before commencing on one of our programmes.

As a result, we have been emphasising the importance of setting

up well-informed IDPs. IDPs give our members access to the

right career development tailored to their specific needs, their

agency’s needs and the needs of the public sector. They are

also valuable in defining what would be the most meaningful

experiential developments and subsequently value-for-money

development interventions.

Management skills programme

responding to data from the PIF and the AfD, and members’

demands for management training for leaders, LDC has been

working with the natural resource sector (nrs) and other

agencies to offer a new LDC core management development

programme for tier 3–5 leaders based on the well-regarded

programme Building Capable Managers. Due to the demand from

agencies and PIF feedback, this programme will now form a key

part of LDC’s delivery and brokering services.

HR/OD professional development sessions

LDC has continued to work closely with the state services

Commission to coordinate the Human resources (Hr)/

organisation Development (oD) community. early in 2013,

we agreed with the state services Commission to alternate

professional development sessions with ssC’s central agency

briefings. In March 2013, Professor David Albury, Visiting

Professor in Innovation studies at King’s College, London,

Development Director of the Global education Leaders’ Program

(GeLP) and Director of Innovation unit, London, facilitated the first

session with heads of the new Zealand public sector Hr/oD and

their senior staff.

19


Output 3: Programmes and events


Chief Executive Development (Group events)

4 held Achieved 11 held 6 held

Executive Leadership Learning Network (ELLN)

1 commenced Achieved: With ELLN commencing in August 2012.


Leadership Development Programme (LDP)

1 commenced Achieved: With 1 programme commencing in November 2012.

1 commenced

Public Sector Advanced Leadership Programme (PSALP)

Cohort 5 graduates (last cohort)

Achieved: Cohort 5 completed their programme, however the actual graduation was held in July 2013 to coincide with Sir Peter Blake Trust week.

Cohort 4 completed June 2012

Cohort 3 completed December 2011

Leadership in Practice programme (LIP)

3 commenced Achieved: 3 programmes commenced in November, March and June.

4 commenced

Themed Action Learning Groups (ALGs)

2 commenced Achieved: 3 commenced in March, September and May.


Fellowships awarded 3 awarded Partially achieved: 2 awarded.

3 awarded

Events held 11 held 27 held due to demand and availability of expert presenters and speakers, both national and international.

25 held

Learner satisfaction with quality of programmes

On a scale of 1-5: average result 3 or better indicated expectations met

Achieved: 3.4 (Measure changed during the year to a scale of 1-4).


Willingness of participants to recommend the course to others

On a scale of 1-10: average result 6

Achieved: 8.9 New measure in 2012/13

Skill changes of participants in intensive programmes

Assessment to be conducted at beginning and end of programmes

This measure will be assessed from the 13/14 year.



20

our portfolio of structured leadership programmes is designed to

strengthen the leadership capability of people in early leadership

roles through to those at the chief executive level.

LDC designs and facilitates these leadership programmes along

with tailored interventions, which draw on lessons from ‘real

world’ experiences.

our programmes are complemented by member events that

are highly relevant and focus on areas of special interest to the

public sector. Both local and international speakers present on

current leadership concepts and thinking.

Through these events and our programmes, members can build

the networks that are critical to the success of the Better Public

service (BPs) and make connections that endure well beyond the

development activity.

Chief executive development

Chief executive development has continued to be a focus

for LDC, with a wide range of highly relevant chief executive

masterclasses, discussions and round-table sessions attended

during the year. of the 11 events held, 9 were specific to chief

executives, and 49 different chief executives attended. Two

events were opened up to senior leaders and a further 32 senior

leaders attended these. A total of 25 chief executives attended

more than one event.

A highlight was a masterclass facilitated by David Albury, Visiting

Professor on Innovation at King’s College, London, Development

Director of the Global education Leaders’ Program (GeLP) and

Director of Innovation unit, London. David was in new Zealand

for the Delivering Better outcomes for Lower Costs: Leading

Public sector Innovation executive workshop organized by the

Australia and new Zealand school of Government in association

with LDC.

other chief executive sessions involved speakers Professor Jon

Pierre, from the Department of Political science at the university

of Gothenberg, sweden; David Butler; former Commissioner

and Chief executive of Inland revenue and Fran Wilde Chair of

Greater Wellington regional Council.

The round-table sessions continue to provide a space for open

discussion on a range of leadership issues and challenges.

Executive Leadership Learning Network

The first executive Leadership Learning network (eLLn)

programme was based on the principles of self-directed

development needs, with subsequent programme content flowing

from this. As a result of the continuous improvement review in

early 2013, LDC has implemented a new curriculum based on

a combination of system and individual development priorities,

taking into account the increased focus on the critical roles and

succession needs.

Leadership Development Programme

The second and third cohorts of the Leadership Development

Programme (LDP) began in november 2012. As a result of the

continuous improvement review, the programme structure

and content has been modified to include a larger component

of pre-identified content up front. This differs from the original

format, where the programme was built once the needs of the

participants had been identified. This prescribed content includes

topics that address the leadership gaps identified by PIF work,

themes emerging from the AfD, and leading practices. Where

strong and common needs are identified in the participants’

individual development plans, intense workshops, such as

‘Persuasion and influencing’, are run.

Also, this year, LDP participants have engaged in open and

wide-ranging conversations with chief executives as part of their

learning. These sessions have proved to be highly valuable, with

participants learning about a chief executive’s own leadership

development and their thoughts on current issues.

Public Sector Advanced Leadership Programme

seven leaders from the wider Public service continued their

development and learning on LDC’s three-year Public sector

Advanced Leadership Programme (PsALP), which they began in

2010.

PsALP involves each participant in structured learning, personal

reflection and peer group learning and collaboration. The

biggest gains from the programme come from the learning and

knowledge shared to help deal with leadership challenges and

issues and the opportunities to make connections with the other

leaders and chief executives.

21


Leadership in Practice

Leadership in Practice (LiP) continues to be a highly regarded

and relevant programme for tier 3 and 4 leaders. The June 2013

programme included a local government participant, for the

fourth time, which added a valuable perspective and opportunity

for discussion.

We are continually reviewing the LiP content with regard to new

trends and exposing participants to leading management and

leadership thinking. Three programmes during the year included

a session on ‘leadership in complexity’, which participants found

very relevant.

This year we issued iPads to participants to use during the

residential part of the programme. All course material, e-books

and reference material were loaded onto the iPads beforehand,

and are also available from LDC’s website. This well-received

technology has significantly reduced LDCs materials’ costs.

Action Learning Groups

The intention with all of our programmes is that networks

and relationships will be forged and maintained long after the

completion of a programme. Participant feedback confirms that

they continue to get valuable support from each other.

A clear example of building and catalysing connections and

networks are our Action Learning Groups (ALGs) for leaders. The

ALGs have become an important vehicle for generating lasting

relationships and increased understanding across the public

sector.

LDC members of the PsALP recounted the experiences of its

eight-member ALG, at the International Leadership Association

(ILA) 2013 oceania conference. They said that being part of the

group provided each of its members with support and shared

knowledge, which helped them deal with issues and leadership

challenges in their workplaces. They also felt they were better

able to look at how to lead situations, and lead them authentically.

We recognised the need for ALGs to focus on a particular

development area, which we had identified as a gap in current

developing leaders skills and knowledge, and introduced themed

ALGs. Themes have included ‘What great managers do’ and a

Christchurch ALG for senior regional managers. The stand-alone,

themed ALGs have been well supported.

Fellowships

LDC awarded its 2013 fellowships to two leaders: Carolyn risk,

Director, office of the Chief executive at the Department of

Internal Affairs; and robert Brodnax, new Zealand Transport

Agency (nZTA) regional Manager Planning and Investment in the

Waikato/Bay of Plenty region.

Both the Fellows’ applications were seen as being highly relevant

in today’s public service environments, with the results expected

to benefit the wider public service.

robert was identified by nZTA as a high-potential senior leader.

With a focus on change and organisational development, robert

was aiming to enhance his skills at operating in collaborative,

multi-agency environments.

Carolyn’s fellowship focused on issues relating to governance

and accountability for complex collective functions. The aim was

to help Carolyn identify the key principles and implications for

governance in the new Zealand public sector, with a particular

focus on functional leadership roles. As this area is seen as highly

relevant, Carolyn was encouraged by the Fellowship committee

to begin her studies earlier than planned so that the public sector

could reap the benefits sooner.

Events

The LDC events programme for 2012/13 included a range

of international and national leadership experts speaking at

clinics for LDC members. our clinic topics included: complexity,

innovation, leadership for delivering Better Public services and

leader-led development. The speakers included members of

LDC’s provider panel, Alex sutherland, norman Chorn and

Tim roberts and international speakers, Paul Porteous and

Professor David Albury.


22

Organisationalcapability and performance

our people: LDC is staffed by a small team of professionals who are committed to improving leadership

ability in the public sector.

our providers: The core team is supplemented by a variety of contract staff and the specialist provider panel,

allowing LDC to deliver a wide range of advice, services, resources, events and activities.

Technology

The emphasis in 2012/13 has been on improving business

operations and systems, including our technology infrastructure.

By early 2013, LDC’s major information technology upgrades

were well underway, with the focus on employing the right

providers to provide quality and efficient services.

By the end of 2013, LDC will have the right business

infrastructure in place to suit 21st century requirements. This will

meet our business needs as outlined in our business strategy,

and we will be able to better meet the needs of our members

and interact with them more efficiently.

Part of this improvement work relates to how we deliver our

latest news, research and resources though our website. We will

be able to provide members with richer context and the latest

on leadership developments in accessible and engaging ways.

We will engage with members during the process of refining our

business infrastructure to find out what they would like us to

focus on and how best to interact with them.

A significant aspect of our infrastructure enhancement process

is that it will allow us to collect good quality data more efficiently

in order to assess leadership needs across agencies and the

public sector faster and more accurately.

23


Independent Auditor’s Report To the readers of Leadership Development Centre’s financial statements and statement of service performance

for the year ended 30 June 2013

The Auditor-General is the auditor of Leadership Development Centre (LDC). The Auditor-General has appointed me, Karen

young, using the staff and resources of Audit new Zealand, to carry out the audit of the financial statements and statement of

service performance of LDC on her behalf.

We have audited:

• the financial statements of LDC on pages 27 to 49, that comprise the statement of financial position as at 30 June 2013, the

statement of comprehensive income, statement of changes in equity and statement of cash flows for the year ended on

that date and the notes to the financial statements that include accounting policies and other explanatory information; and

• the statement of service performance of LDC on pages 15 to 21.

Opinion

In our opinion:

• the financial statements of LDC on pages 27 to 49:

– comply with generally accepted accounting practice in new Zealand; and

– fairly reflect LDC’s:

– financial position as at 30 June 2013; and

– financial performance and cash flows for the year ended on that date;

• the statement of service performance of LDC on pages 15 to 21:

– complies with generally accepted accounting practice in new Zealand; and

– fairly reflects for each class of outputs:

– its standards of delivery performance achieved, as compared with the forecast standards outlined in the

statement of forecast service performance adopted at the start of the financial year; and

– its actual revenue earned and output expenses incurred, as compared with the forecast revenues and output

expenses outlined in the statement of forecast service performance adopted at the start of the financial year.

our audit was completed on 31 october 2013. This is the date at which our opinion is expressed.

The basis of our opinion is explained below. In addition, we outline the responsibilities of the Board and our responsibilities,

and we explain our independence.

Basis of opinion

We carried out our audit in accordance with the Auditor-General’s Auditing standards, which incorporate the International

standards on Auditing (new Zealand). Those standards require that we comply with ethical requirements and plan and carry

out our audit to obtain reasonable assurance about whether the financial statements and statement of service performance

are free from material misstatement.

Material misstatements are differences or omissions of amounts and disclosures that, in our judgement, are likely to influence

readers’ 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.


24

An audit involves carrying out procedures to obtain audit evidence about the amounts and disclosures in the financial

statements and statement of service performance. The procedures selected depend on our judgement, including our

assessment of risks of material misstatement of the financial statements and statement of service performance, whether due

to fraud or error. In making those risk assessments, we consider internal control relevant to the preparation of LDC’s financial

statements and statement of service performance that fairly reflect the matters to which they relate. We consider internal

control 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 LDC’s internal control.

An audit also involves evaluating:

• the appropriateness of accounting policies used and whether they have been consistently applied;

• the reasonableness of the significant accounting estimates and judgements made by the Board;

• the adequacy of all disclosures in the financial statements and statement of service performance; and

• the overall presentation of the financial statements and statement of service performance.

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

of service performance. Also we did not evaluate the security and controls over the electronic publication of the financial

statements and statement of service performance.

We have obtained all the information and explanations we have required and we believe we have obtained sufficient and

appropriate audit evidence to provide a basis for our audit opinion.

Responsibilities of the Board

The Board is responsible for preparing financial statements and a statement of service performance that:

• comply with generally accepted accounting practice in new Zealand;

• fairly reflect LDC’s financial position, financial performance and cash flows; and

• fairly reflect its service performance achievements.

The Board is also responsible for such internal control as it determines is necessary to enable the preparation of financial

statements and a statement of service performance that are free from material misstatement, whether due to fraud or error.

The Board is also responsible for the publication of the financial statements and statement of service performance, whether in

printed or electronic form.

The Board’s responsibilities arise from the Public Finance Act 1989, Crown entities Act 2004 and the Trust Deed.

Responsibilities of the Auditor

We are responsible for expressing an independent opinion on the financial statements and statement of service performance

and reporting that opinion to you based on our audit. our responsibility arises from section 15 of the Public Audit Act 2001

and the Public Finance Act 1989.

Independence

When carrying out the audit we followed the independence requirements of the Auditor-General, which incorporate the

independence requirements of the external reporting Board.

As disclosed in LDC’s Annual report, the office of the Controller and Auditor-General along with a number of other

government agencies is a subscriber to LDC.

other than the audit, we have no relationship with or interests in LDC.

Karen Young

Audit New Zealand

On behalf of the Auditor-General

Wellington, New Zealand

LEADERSHIP DEVELOPMENT CENTRE

fINANCIAL STATEmENTS FOR THE YEAR ENDED 30 JUNE 2013


26

Statement of responsibilityFor THe yeAr enDeD 30 June 2013

In the financial year ended 30 June 2013, the Board of Trustees and the management of The Leadership

Development Centre were responsible for:

• preparing the financial statements, statement of service performance and the judgements used therein

• establishing and maintaining a system of internal control designed to provide reasonable assurance as

to the integrity and reliability of financial and non-financial reporting.

In the opinion of the Board of Trustees and the management of the Leadership Development Centre, the

financial statements and statement of service performance for the financial year reflect fairly the financial

position and operations of the Leadership Development Centre.

Dr Paul reynolds Martin Matthews

Chair Deputy Chair

31 october 2013 31 october 2013

27

SECTION THREE FINANCIAL STATEMENTS 2012/13

Statement of comprehensive incomeFor THe yeAr enDeD 30 June 2013

ACTUAL BUDGET ACTUAL NOTES 2013 2013 2012

INCOmE

revenue from state services Commission 2 500,000 500,000 650,001

Interest income 3 109,338 117,298 125,916

other income 4 2,672,147 2,843,229 3,174,491

Total income 3,281,485 3,460,527 3,950,408

EXPENDITURE

Personnel costs 5 1,434,919 1,567,670 1,346,579

Depreciation and amortisation expense 6, 7 85,478 99,228 79,150

other expenses 8 1,872,136 2,198,260 2,250,636

Total expenditure 3,392,533 3,865,158 3,676,365

SURPLUS/(DEfICIT) BEfORE TAXATION (111,048) (404,631) 274,043

Income tax 9 – – –

Surplus/(deficit) after taxation (111,048) (404,631) 274,043

Other comprehensive income – – –

Total comprehensive income (111,048) (404,631) 274,043


The accompanying notes form part of these financial statements.Explanations of major variances against budget are provided in Note 29.


28

Statement of financial positionAs AT 30 June 2013


ASSETS

Current assets

Cash and cash equivalents 10 1,506,371 266,559 1,331,002

Debtors and other receivables 11 548,893 30,910 1,008,718

Investments 12 2,378,321 2,264,621 2,303,686

Prepayments 13,768 522 123,900

Total current assets 4,447,353 2,562,612 4,767,306

Non-current assets

Property, plant and equipment 13 140,375 229,872 157,466

Intangible assets 14 78,251 – –

Total non-current assets 218,626 229,872 157,466

Total assets 4,665,979 2,792,484 4,924,772

LIABILITIES

Current liabilities

Creditors and other payables 15 247,812 182,014 294,108

employee entitlements 16 81,605 60,249 64,793

GsT payable 236,739 – 212,250

subscriptions received in advance 1,287,015 – 1,235,158

Fellowship contributions received in advance – – 119,000

Fees received in advance 17 331,137 203,891 406,744

Total current liabilities 2,184,308 446,154 2,332,053

Non-current liabilities

Provisions 18 8,245 – 8,245

Total non-current liabilities 8,245 – 8,245

Total liabilities 2,192,553 446,154 2,340,298

Net assets 2,473,426 2,346,330 2,584,474

EqUITy

General funds 19 2,263,991 2,304,551 2,433,296

Fellowship funds 19 209,435 41,779 151,178

Total equity 2,473,426 2,346,330 2,584,474



Dr Paul reynolds Martin MatthewsChair Deputy Chair

31 october 2013 31 october 2013

29


Statement of changes in equityFor THe yeAr enDeD 30 June 2013

ACTUAL BUDGET LAST yEAR NOTE 2013 2013 2012

BALANCE AT 1 JULy

General funds 2,433,296 2,707,182 2,155,333

Fellowship funds 151,178 43,779 155,098

Total balance at 1 July 2,584,474 2,750,961 2,310,431

Comprehensive income

surplus/(deficit) (111,048) (404,631) 274,043

other comprehensive income – – –

Total comprehensive income (111,048) (404,631) 274,043

Balance at 30 June 2,473,426 2,346,330 2,584,474

General funds 2,263,991 2,304,551 2,433,296

Fellowship funds 209,435 41,779 151,178

Balance at 30 June 2013 19 2,473,426 2,346,330 2,584,474


Statement of changes in fellowship fundsFor THe yeAr enDeD 30 June 2013

ACTUAL BUDGET LAST yEAR NOTE 2013 2013 2012

fELLOwSHIP fUNDS AT 1 JULy 151,178 43,779 155,098

INCOmE

Contributions from members 119,000 120,000 126,875

Interest allocated 6,000 3,000 8,000

Total income 125,000 123,000 134,875

EXPENDITURE

Fellowship awarded 66,474 120,000 135,000

General costs 269 5,000 3,795

Total expenditure 66,743 125,000 138,795

Surplus/(deficit) 58,257 (2,000) (3,920)

Balance at 30 June 19 209,435 41,779 151,178




30

Statement of cashflowsFor THe yeAr enDeD 30 June 2013


CASH fLOwS fROm OPERATING ACTIvITIES

Cash was provided from:

receipts from state services Commission 500,000 500,000 650,001

Interest received 117,291 117,298 123,456

receipts from other revenue 2,981,269 3,159,661 3,428,539

Payments to suppliers (1,911,175) (2,774,441) (2,484,184)

Payments to employees (1,309,141) (1,521,570) (1,299,706)

Goods and services tax (net) 24,489 (162,321) 57,126

Net cash flows from operating activities 20 402,733 (681,373) 475,232

CASH fLOwS fROm INvESTING ACTIvITIES

Proceeds from maturity of investments 2,713,946 1,741,750 5,538,602

Purchase of investments (2,788,581) (1,300,000) (5,745,633)

Purchase of property, plant and equipment (58,214) (181,700) –

Purchase of intangible assets (94,515) – –

Net cash flows from investing activities (227,364) 260,050 (207,031)

NET INCREASE/(DECREASE) IN CASH AND CASH EqUIvALENTS 175,369 (421,323) 268,201

Cash and cash equivalent at the beginning of the year 1,331,002 687,882 1,062,801

Cash and cash equivalent at the end of the year 10 1,506,371 266,559 1,331,002



31


Notes to and forming part of the Financial StatementsFor THe yeAr enDeD 30 June 2013

NOTE 1: STATEmENT Of ACCOUNTING POLICIES

Reporting Entity

The Management Development Centre Trust was established by

the signing of a Deed of Trust on 22 July 1994.

The objects of the Trust are to establish a Management

Development Centre in new Zealand for the promotion of

excellence in education, training and development of public

service leaders and managers. The Trust changed its name to

Leadership Development Centre (LDC) on 16 June 2003. LDC

is a Fourth schedule entity under the Public Finance Act 1989

and these accounts are prepared in accordance with the Public

Finance Act 1989 and the Crown entities Act 2004.

Accordingly, LDC has designated itself as a public benefit entity for

the purpose of new Zealand equivalents to International Financial

reporting standards (“nZ IFrs”).

The financial statements for LDC are for the year ended 30 June

2013, and were approved by the Board on 31 october 2013 and

issued on 31 october 2013.

Basis of Preparation

Statement of compliance

The financial statements of LDC have been prepared in

accordance with the requirements of the Crown entities Act

2004, which includes the requirement to comply with generally

accepted accounting practice in new Zealand (“nZ GAAP”).

These financial statements have been prepared in accordance

with nZ GAAP as appropriate for public benefit entities and they

comply with nZ IFrs.

Differential reporting

LDC qualifies for differential reporting as it is not publicly

accountable and is not large. LDC has taken advantage of all

differential reporting exemptions, except for nZ IAs 7 statement

of Cash flows, and Financial Instruments – Credit risk.

Measurement base

The financial statements have been prepared on a historical cost

basis.

Functional and presentation currency

The financial statements are presented in new Zealand dollars

and all values are rounded to the nearest dollar. The functional

currency of LDC is new Zealand dollars (nZ$).

Changes in accounting policies

There have been no material changes in accounting policies

which have been applied on bases consistent with those used in

previous years.

standards, amendments and interpretations issued that are not

yet effective and have not been early adopted.

standards, amendments, and interpretations issued but not

yet effective that have not been early adopted, and which are

relevant to the LDC, are:

nZ IFrs 9 Financial Instruments will eventually replace nZ IAs

39 Financial Instruments: recognition and Measurements. nZ

IAs 39 is being replaced through the following 3 main phases:

Phase 1 Classification and measurement, Phase 2 Impairment

Methodology, and Phase 3 Hedge Accounting. Phase 1 has

been completed and has been published in the new financial

instrument standard nZ IFrs 9. nZ IFrs 9 uses a single

approach to determine whether a financial asset is measured

at amortised cost or fair value, replacing the many different

rules in nZ IAs 39. The approach in nZ IFrs 9 is based on

how an entity manages its financial assets (its business

model) and the contractual cash flow characteristics of the

financial assets. The financial liability requirements are the

same as those of nZ IAs 39, except for when an entity elects

to designate a financial liability at fair value through surplus/

deficit. The new standard is required to be adopted for the

year ended 30 June 2016. However, as a new Accounting

standards Framework will apply before this date, there is no

certainty when an equivalent standard to nZ IFrs 9 will be

applied by public entities.

The Minister of Commerce has approved a new Accounting

standards Framework (incorporating a Tier strategy) developed

by the external reporting Board (XrB). under this Accounting

standard Framework, LDC is classified as Tier 2 reporting entity

and is eligible to apply reduced Disclosures requirements.

These standards are being developed by the XrB based on

current International Public sector Accounting standards.


32

Notes continuedFor THe yeAr enDeD 30 June 2013

The effective date for the new standards for public sector entities

is expected to be for reporting periods beginning on or after

01 July 2014. This means LDC expects to transition to the new

standards in preparing 30 June 2015 financial statements. As

the PAs are still under development, LDC is unable to assess the

implication of the new Accounting standards Framework at this

time.

Due to the change in the Accounting standards Framework

for public entities, it is expected that all new nZ IFrs and

amendments to existing nZ IFrs will not be applicable to public

benefit entities. Therefore, the XrB has effectively frozen the

financial reporting requirements for public entities up until the

new Accounting standard Framework is effective. Accordingly, no

disclosure has been made about new or amended nZ IFrs that

exclude public benefit entities from their scope.

Prior year comparatives

Prior year comparatives have been reclassified to ensure

comparability with 2013 financial statement disclosures.

Significant Accounting Policies

Revenue

revenue is measured at the fair value of consideration received

or receivable.

Revenue from State Services Commission (SSC)

revenue from ssC is recognised when earned and is reported in

the financial period to which it relates.

revenue from member subscription and services, and services to

other programme participants

“revenue from member subscriptions is recognised when earned

and is reported in the financial period to which it relates.

revenue from services to members and programme participants

is recognised by reference to the stage of completion of the

transaction at the end of the reporting period. The stage of

completion is determined by the most appropriate method to

reliably measure the services performed. “

Interest

Interest income is recognised in the statement of comprehensive

income as it accrues, using the effective interest method.

Fellowship grants

Fellowship grants awarded are recognised as expenditure at the

time the awards are approved by LDC.

Foreign currency transactions

Foreign currency transactions are translated into new Zealand

dollars at the exchange rate ruling at the date of payment.

Monetary assets and liabilities at balance date are translated at

the year end exchange rates.

Operating leases

Leases where the lessor effectively retains substantially all the

risks and benefits of ownership of the leased items are classified

as operating leases. operating lease expenses are recognised on

a straight-line basis over the term of the lease and the lease cost

is included in the statement of comprehensive income.

Cash and cash equivalents

Cash and cash equivalents include cash on hand, deposits held

at call with banks, and other short-term highly liquid investments

with original maturities of three months or less.

Debtors and other receivables

Debtors and other receivables are recorded at their face value,

less any provision for impairment.

Impairment of a receivable is established when there is objective

evidence that LDC will not be able to collect amounts due

according to the original terms of the receivable. significant

financial difficulties of the debtor, probability the debtor will

enter into bankruptcy, and default in payments are considered

indicators that the debtor is impaired. The amount of the

impairment is the difference between the asset’s carrying

amount and the present value of estimated future cash flows,

discounted using the original effective interest rate. The carrying

amount of the asset reduced through the use of an allowance

account, and the amount of loss is recognised in the statement

of comprehensive income. When the receivables is uncollectible,

it is written off against the allowance account for receivables.

overdue receivables that have been renegotiated are classified as

current (i.e. not past due). LDC has not provided for any doubtful

debts, and the majority of the receivables are less than 30 days.

Collection of receivables is not issue for LDC and has not been in

prior years.

33



Investments

Investments comprise of term deposits with original maturities

of three months or more. Investments in bank deposits are initially

measured at fair value plus transaction costs.

After initial recognition investments in bank deposits are

measured at amortised cost using the effective interest method,

less any provision for impairment.

For bank deposits, impairment is established when there is

objective evidence that LDC will not be able to collect amounts

due according to the original terms of the deposit. significant

financial difficulties of the bank, probability that the bank will

enter into receivership or liquidation, and default in payments are

considered indicators that the deposit is impaired.

Property, plant and equipment

Property, plant and equipment asset classes consist of leasehold

improvements, furniture and fixtures, office equipment and

computer equipment. All asset classes are measured at cost less

accumulated depreciation and impairment losses.

Additions

The cost of an item of property, plant and equipment is recognised

as an asset only when it is probable that future economic benefits

or service potential associated with the item will flow to LDC and

the cost of the item can be measured reliably.

Disposals

Gains and losses on disposals are determined by comparing the

proceeds with the carrying amount of the asset. Gains and losses

on disposals are included in the statement of comprehensive

income.

Subsequent costs

Costs incurred subsequent to initial acquisition are capitalised

only when it is probable that future economic benefits or service

potential associated with the item will flow to LDC and the cost of

the item can be measured reliably.

The costs of day-to-day servicing of property, plant and equipment

are recognised in the statement of comprehensive income as

they are incurred.

Depreciation

Depreciation is provided on a straight-line basis on all property,

plant and equipment, at rates that will write-off the cost (or

valuation) of the assets to their estimated residual values over

their useful lives. The useful lives and associated depreciation

rates of major classes of assets have been estimated as follows:

Leasehold improvements 6 years 16.7%

Furniture and fixtures 4 years 25.0%

office equipment 4 years 25.0%

Computer equipment 4 years 25.0%

Leasehold improvements are depreciated over the unexpired

period of the lease or estimated remaining useful lives of the

improvements, whichever is the shorter.

The residual value and useful life of an asset is reviewed, and

adjusted if applicable, at each financial year-end.

Intangible assets

Software acquisition and development

Acquired computer software licenses are capitalised on the basis

of the costs incurred to acquire and bring to use the specific

software.

Costs that are directly associated with the development of

systems and programmes, and directly associated with the

provision of services to customers are recognised as an intangible

assets only when it is probable that the future economic benefits

will flow to LDC and the cost of the item can be measured

reliably.

staff training costs are recognised as an expense when incurred.

Costs associated with maintaining computer software are

recognised as an expense when incurred.

Amortisation

The carrying value of an intangible asset with a finite life is

amortised on a straight line basis over its useful life. Amortisation

begins when the asset is available for use and ceases at the date

that the asset is derecognised. The amortisation charge for each

period is recognised in the statement of comprehensive income.

The useful lives and associated amortisation rates of major

classes of intangible assets have been estimated as follows:

Computer software 3 years 33%

system development 3 years 33%


34

Impairment of property, plant, and equipment and intangible assets

Property, plant, and equipment and intangible assets that have

a finite useful life are reviewed for impairment whenever events

or changes in circumstances indicate that the carrying amount

may not be recoverable. An impairment loss is recognised for

the amount by which the asset’s carrying amount exceeds its

recoverable amount. The recoverable amount is the higher of an

asset’s fair value less costs to sell and value in use.

Value in use is depreciated replacement cost for an asset where

the future economic benefits or service potential of the asset are

not primary dependent on the asset’s ability to generate net cash

inflows and where LDC would, if deprived of the asset, replace its

remaining future economic benefits or service potential.

If an asset’s carrying amount exceeds is recoverable amount, the

asset is impaired and the carrying amount is written down to the

recoverable amount.

The total impairment loss is recognised in the statement of

comprehensive income.

The reversal of the impairment loss is recognised in the statement

of comprehensive income.

Creditors and other payables

Creditors and other payables are recorded at their face value.

Employee entitlements

employee entitlements consists mainly of annual leave which are

measured at current rates of pay and expected to be taken within

twelve months. This annual leave is earned but not yet taken at

balance date.

employees entitlements are classified as a current liability.

Superannuation schemes

obligations for contributions to Kiwisaver are accounted for as

defined contribution superannuation scheme and are recognised

as an expenses in the statement of comprehensive income as

incurred.

Provisions

LDC recognises a provision for future expenditure of uncertain

amount or timing when there is a present obligation (either legal

or constructive) as a result of a past event, it is probable that

expenditures will be required to settle the obligation and a reliable

estimate can be made of the amount of the obligation.

Equity

LDC’s equity is measured as the difference between the total

assets and total liabilities. equity is disaggregated and classified

into the following components.

• general funds; and

• fellowship funds.

Good and Service Tax (GST)

All items in the financial statements are presented exclusive of

GsT, except for receivables and payables, which are presented on

a GsT-inclusive basis. Where GsT is not recoverable as input tax

then it is recognised as part of the related asset or expenses.

The net amount of GsT recoverable from, or payable to the Inland

revenue Department (IrD) is included as part of receivables or

payables in the statement of financial position.

The net GsT paid to, or received from the IrD, including the GsT

related to investing and financing activities is classified as an

operating cash flow in the statement of cash flows.

Commitments and contingencies are disclosed exclusive of GsT.

Income tax

LDC is taxable on its profits under the provision of Income Tax Act.

Income tax is calculated using taxes payable method.

Membership levy income is not liable for income tax.

Budget figures

The budget figures have been prepared in accordance with nZ

IFrs, using accounting policies that are consistent with those

adopted by LDC for the preparations of the financial statements.

Cost allocation

LDC has determined the cost of outputs using the cost allocation

system outlined below.

Direct costs are those costs directly attributed to an output.

Indirect costs are those that cannot be identified in an

economically feasible manner with a specific output.


35



NOTE 2: REvENUE fROm STATE SERvICES COmmISSION (SSC)

LDC has been provided with funding from ssC for the specific purposes of the Commission as set out in its founding legislation and

the scope of the relevant government appropriation. Apart from these general restrictions, there are no unfulfilled conditions or

contingencies attached to government funding (2012 nil).

Actual Budget Actual 2013 2013 2012 $ $ $

ssC Funding 500,000 500,000 650,001

Total revenue from State Services Commission 500,000 500,000 650,001

NOTE 3: INTEREST INCOmE


Interest earned 103,338 114,298 113,916

Fellowship interest 6,000 3,000 12,000

Total interest income 109,338 117,298 125,916

NOTE 4: OTHER INCOmE


Membership levies 1,234,561 1,333,665 1,295,553

Leadership in practice (LiP) fees 480,202 530,200 670,933

Leadership development programme (LDP) fees 172,637 251,364 54,545

event and seminar fees 156,939 165,000 244,220

Advisory services 279,165 150,000 457,393

Fellowship contributions 119,000 120,000 126,875

executive leadership learning network (eLLn) fees 110,000 120,000 –

Public sector advanced leadership programme (PsALP) fees 90,289 90,000 285,847

Knowledge and information fees 1,600 27,000 –

other income 27,754 56,000 39,125

Total other income 2,672,147 2,843,229 3,174,491


36

NOTE 5: PERSONNEL COSTS


ACC levies 5,172 8,000 8,263

eAP, supervision and coaching 1,200 1,250 –

General personnel 4,960 6,350 4,334

recruitment 20,154 10,500 52,240

salaries and wages 1,281,014 1,377,709 1,088,815

Kiwisaver employers contribution 20,013 29,861 23,317

employer superannuation contribution tax (esCT) 8,115 – –

Increase/(decrease) in employee entitlements 16,811 – 10,360

staff training and team activities 14,398 20,000 29,697

Temporary and contractor staff 63,082 114,000 129,553

Total personnel costs 1,434,919 1,567,670 1,346,579

NOTE 6: DEPRECIATION EXPENSE


Leasehold improvements 54,698 58,503 66,383

Furniture and fixtures 3,109 4,195 5,626

office equipment 729 1,500 1,086

Computer equipment 10,678 35,030 6,055

Total depreciation expense 69,214 99,228 79,150

NOTE 7: AmORTISATION EXPENSE


Computer software 9,129 – –

system application 7,135 – –

Total amortisation expense 16,264 – –


37


NOTE 8: OTHER EXPENSES


mAINTENANCE

Computer and IT services 54,076 67,000 57,331

Licences and fees 4,169 19,800 3,144

other equipment maintenance 87 – –

Premises maintenance 2,660 1,250 2,118

60,992 88,050 62,593

COmmUNICATIONS

Phone and internet charges 30,918 24,300 49,647

Photocopying 10,878 17,000 15,385

Postage, freight and couriers 3,761 6,300 5,480

Publications and information bought 29,953 17,297 32,221

Printing and publication 21,610 52,160 79,510

Corporate subscription 4,264 1,070 3,052

Website development – 44,000 3,039

101,384 162,127 188,334

TRAvEL

Accommodation and meals 59,140 125,500 43,923

Car rental, mileage and parking 1,184 360 2,408

Air travel 18,568 57,500 13,235

Taxi, bus and train fares 3,603 4,150 7,309

Conferences 1,087 3,000 9,077

83,582 190,510 75,952

PROfESSIONAL fEES

external experts 39,207 34,250 41,853

Audit fee for financial audit 33,059 25,000 28,145

Consultants 66,251 105,784 62,588

138,517 165,034 132,586

CONTRACTORS

Contractors 1,004,308 1,012,845 1,338,594

1,004,308 1,012,845 1,338,594

mARkETING AND STAkEHOLDER RELATIONS

Fellowship awarded 66,474 120,000 135,000

Fellowship costs 269 5,000 3,795

sponsorship 15,000 10,000 10,000

stakeholder relations 39,173 90,700 41

LDC corporate resources 91,886 90,000 50,703

212,802 315,700 199,539



38

NOTE 8: OTHER EXPENSES CONTINUED


GENERAL EXPENSES

Archive expenses 2,097 2,574 3,444

Bank fees 1,547 3,060 1,910

Catering 57,258 27,300 64,419

operating lease expense 138,000 169,100 108,000

Cleaning 11,776 11,220 9,198

electricity 4,428 4,200 3,963

General expenses 2,048 1,920 8,358

Insurance 1,747 2,600 2,620

Minor assets 3,341 1,000 –

office and kitchen supplies 9,830 7,320 10,418

Venue and equipment hire 32,388 33,700 40,708

Loss on disposal of fixed assets 6,091 – –

270,551 263,994 253,038

Total other expense 1,872,136 2,198,260 2,250,636

NOTE 9: INCOmE TAX


surplus/(deficit) before taxation (111,048) (404,631) 274,043

non-assessable income

Membership levies (1,234,561) (1,333,665) (1,295,553)

non-deductible expenses

Accounting depreciation 85,478 99,228 79,150

Accounting depreciation –2012 13,687 – (13,687)

Tax depreciation (74,136) (34,370) (49,531)

Holiday pay closing 81,605 60,249 64,793

Holiday pay opening (64,793) (60,249) (54,433)

Make good provision – – 8,245

Adjusted surplus/(deficit) before taxation (1,303,768) (1,673,438) (986,973)

Tax losses @33% not recognised (430,243) (552,235) (325,701)

Current year tax provision – – –

Tax losses of $9,625,347 (2012 $8,317,266) are available to carry forward and offset against taxable income. Income tax is calculated using

the taxes payable method.


39


NOTE 10: CASH AND CASH EqUIvALENTS


Cash at bank – cheque account 528,634 266,559 423,769

Cash at bank – savings account 577,634 – –

Petty cash 103 – 200

Money market – – 500,000

Term deposits with maturities less than 3 months 400,000 – 407,033

Total cash and cash equivalents 1,506,371 266,559 1,331,002

The carrying value of cash in bank and short-term deposits with maturities less than three months approximates their fair value.

The effective interest rate for cash and cash equivalent is 2.75% (2012: 3.75%).

NOTE 11: DEBTORS AND OTHER RECEIvABLES


Accounts receivable 535,769 2,587 987,641

Accrued interest 13,124 16,929 21,077

GsT refund due – 11,394 –

Total debtors and other receivables 548,893 30,910 1,008,718

The carrying value of receivables approximates their fair value.

NOTE 12: INvESTmENTS


Term deposits 2,378,321 2,264,621 2,303,686

Total investments 2,378,321 2,264,621 2,303,686

The carrying value of the short term deposits with maturity dates of three months or more approximates their fair value. The effective

interest rate for investment is 3.25% (2012:4%)

There were no impairment provisions for investments. At each balance sheet date, LDC assesses whether there is any objective

evidence that an investment is impaired.



40

NOTE 13: PROPERTy, PLANT AND EqUIPmENT

Movements for each class of property, plant and equipment are as follows:

Leasehold furniture Office Computer Improvements and fixtures equipment equipment Total $ $ $ & $

COST OR vALUATION

Balance at 1 July 2011 327,819 136,672 24,506 105,340 594,337

Additions – – – – –

Disposals – – – – –

Balance at 30 June 2012 327,819 136,672 24,506 105,340 594,337

Balance at 1 July 2012 327,819 136,672 24,506 105,340 594,337

Additions – 695 4,570 52,950 58,215

Disposals/Write-offs – (37,152) (8,701) (103,345) (149,198)

Transfer to assets held for sale – – – – –

Balance at 30 June 2013 327,819 100,215 20,375 54,945 503,354

ACCUmULATED DEPRECIATION AND ImPAIRmENT LOSSES

Balance at 1 July 2011 113,051 128,057 23,420 93,193 357,721

Depreciation expense 66,383 5,626 1,086 6,055 79,150

elimination on disposal – – – – –

Disposals – – – – –

Balance at 30 June 2012 179,434 133,683 24,506 99,248 436,871

Balance at 1 July 2012 179,434 133,683 24,506 99,248 436,871

Depreciation expense 54,698 3,109 729 10,678 69,214

elimination on disposal – – – – –

Disposals/Write-offs – (37,185) (8,668) (97,253) (143,106)

reversal of impairment losses – – – – –

Balance at 30 June 2013 234,132 99,607 16,567 12,673 362,979

CARRyING AmOUNTS

At 1 July 2011 214,768 8,615 1,086 12,147 236,616

At 30 June and 1 July 2012 148,385 2,989 – 6,092 157,466

At 30 June 2013 93,687 608 3,808 42,272 140,375


41


NOTE 14: INTANGIBLE ASSETS

Internally Acquired generated software software Total $ $ $

COST OR vALUATION

Balance at 1 July 2011 – 434,927 434,927

Additions – – –

Disposals – – –

Balance at 30 June 2012 – 434,927 434,927

Balance at 1 July 2012 – 434,927 434,927

Additions 30,295 64,220 94,515

Disposals/Write-offs – (434,927) (434,927)

Balance at 30 June 2013 30,295 64,220 94,515

ACCUmULATED DEPRECIATION AND ImPAIRmENT LOSSES

Balance at 1 July 2011 – 434,927 434,927

Amortisation expense – – –

Disposals – – –

Impairment losses – – –

Balance at 30 June 2012 – 434,927 434,927

Balance at 1 July 2012 – 434,927 434,927

Amortisation expense 9,129 7,135 16,264

Disposals/Write-offs – (434,927) (434,927)

Impairment losses – – –

Balance at 30 June 2013 9,129 7,135 16,264

CARRyING AmOUNTS

At 1 July 2011 – – –

At 30 June and 1 July 2012 – – –

At 30 June 2013 21,166 57,085 78,251

There are no restrictions over the title of LDC’s intangible assets, nor are any intangible assets pledged as security for liabilities.



42

NOTE 15: CREDITORS AND OTHER PAyABLES


Trade creditors 166,712 182,014 206,459

Accrued expenses 81,100 – 87,649

Total creditors and other payables 247,812 182,014 294,108

Creditors and 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.

NOTE 16: EmPLOyEE ENTITLEmENTS


Annual leave 81,605 60,249 64,793

Total employee entitlements 81,605 60,249 64,793

NOTE 17: fEES RECEIvED IN ADvANCE


Leadership in Practice (LiP) 173,558 59,800 94,300

Public sector Advanced Learning Programme (PsALP) 1,950 – 92,239

Leadership Development Programme (LDP) 142,819 144,091 95,455

system Advisory services (sAs) 12,810 – –

events and seminars – 124,750

Total fees received in advance 331,137 203,891 406,744

NOTE 18: PROvISIONS


CURRENT PORTION

restructuring – – –

Lease make-good – – –

Total current portion – – –

NON-CURRENT PORTION

restructuring – – –

Lease make-good 8,245 – 8,245

Total non-current portion 8,245 – 8,245

Total provisions 8,245 – 8,245


43


NOTE 18: PROvISIONS CONTINUED

Movements for each class of provision are as follows:

Lease Restructuring make-good Total $ $ $

Balance at 1 July 2011 64,000 30,000 94,000

Additional provision made – – –

Amounts used (54,050) – (54,050)

unused amounts reversed (9,950) (21,755) (31,705)

Discount unwind – – –

Balance at 30 June 2012 – 8,245 8,245

Balance at 1 July 2012 – 8,245 8,245

Additional provision made – – –

Amounts used – – –

unused amounts reversed – – –

Discount unwind – – –

Balance at 30 June 2013 – 8,245 8,245

Restructuring provision

The Board approved a restructuring plan, which was announced in May 2011.

The restructuring commenced in June 2011. The restructuring plan and associated payments were expected to be completed by

December 2011. The provision represented the estimated costs for redundancy payments arising from the restructure and the

resourcing of the revised structure.

The restructure was completed by June 2012.

Lease make-good provision

In respect of the lease premises, LDC is required at the expiry of the lease term to make good any damage caused to the premises and

to remove any fixtures or fittings installed by LDC. Information about LDC’s leasing arrangements is disclosed in note 21.



44

NOTE 19: EqUITy


GENERAL fUNDS

Balance at 1 July 2,433,296 2,707,182 2,155,333

surplus/(deficit) (169,305) (402,631) 277,963

Balance at 30 June 2,263,991 2,304,551 2,433,296

fELLOwSHIP fUNDS

Balance at 1 July 151,178 43,779 155,098

surplus/(deficit) 58,257 (2,000) (3,920)

Balance at 30 June 209,435 41,779 151,178

Total equity 2,473,426 2,346,330 2,584,474

NOTE 20: RECONCILIATION Of NET SURPLUS/(DEfICIT) TO NET CASH fROm OPERATING ACTIvITIES

Actual Actual 2013 2012 $ $

NET SURPLUS/(DEfICIT) fOR THE yEAR (111,048) 274,043

Add/(less) non-cash items

Amortisation 16,264 –

Depreciation 69,214 79,150

Loss on disposal of fixed assets 6,091 –

Total non-cash items 91,569 79,150

Add/(less) movements in statement of financial items position items

Inc/(Dec) in debtors and other receivables 459,825 899,431

Inc/(Dec) in prepayments 110,132 (44,675)

Inc/(Dec) in creditors and other payables (46,296) (148,250)

Inc/(Dec) in employee entitlements 16,812 10,360

Inc/(Dec) in GsT payable 24,489 (65,104)

Inc/(Dec) in subscriptions received in advance 51,857 (55,562)

Inc/(Dec) in fellowship contributions received in advance (119,000) (7,375)

Inc/(Dec) in fees received in advance (75,607) (466,786)

Net movements in working capital items 422,212 122,039

Net cash flow from operating activities 402,733 475,232


45


NOTE 21: COmmITmENTS AND OPERATING LEASES

Operating leases as lessee

The future aggregate minimum lease payments to be paid under non-cancellable operating lease are as follows:


not later than one year 138,000 144,545

not later than one year and not later than two years 138,000 138,000

More than two years and not later than five years 34,500 172,500

Total operating lease commitments 310,500 455,045

LDC leases space in Maritime House. The lease expired in september 2012. The right of renewal was exercised and the lease has been

re-signed for a further three years from 1 october 2012. LDC has recognised a make good provision in respect to this lease.

The lease expires in october 2015. LDC does not have the option to purchase the asset at the end of the lease term. There are no

restrictions placed on LDC by any of its leasing arrangements.

There were no capital commitments as at 30 June 2013. (2012 $0)

NOTE 22: CONTINGENT ASSETS AND LIABILITIES

LDC has no contingent assets or contingent liabilities as at 30 June 2013. (2012:$0)

NOTE 23: RELATED PARTy TRANSACTIONS

All related party transactions have been entered into an arm’s length basis.

Significant transactions with-government-related entities LDC has been provided with funding from the state services Commission of $500,000 (2012: $650,001).

Collectively, but not individually, significant, transactions with government-related entities In conducting its activities, LDC is required to pay various taxes and levies (such as GsT, PAye, and ACC levies) to the Crown and entities

related to the Crown. The payment of theses taxes and levies, other than income tax, is based on the standard terms and conditions

that apply to all tax and levy payers.

LDC also receives income from entities controlled, significantly influences, or jointly controlled by the Crown. revenue from these

government-related entities for the year ended 30 June 2013 totalled $3.1 million (2012: $3.1 million). This revenue includes payment of

membership fees from all other member agencies (member agencies are set out in B of the Annual report).

LDC’s direct spending on programmes, courses, seminars, events and fellowships is primarily for the benefit of staff from our member

agencies.

LDC also purchases goods and services from entities controlled, significantly influenced, or jointly controlled by the Crown. Purchases

from these government-related entities for the year ended 30 June 2013 totalled $10,779 (2012 $19,517). These purchases included the

purchase of electricity from Genesis, air travel from Air new Zealand, and postal services from new Zealand Post.



46

NOTE 23: RELATED PARTy TRANSACTIONS CONTINUED

The schedule below lists related party transactions for the agencies of LDC’s Board of Trustees members.

Actual Actual 2013 2012 Board members Agency $ $

REvENUE RECEIvED fROm RELATED PARTIES

P reynolds Ministry for the environment 54,000 61,000

M Hollings Te Aho o Te Kura Pounanu – The Correspondence school 21,000 22,000

A Morrision Department of Conservation 82,000 70,000

M Matthews Ministry of Transport 50,000 20,000

I rennie state services Commission 523,000 672,000

C MacDonald Department of Internal Affairs 115,000 158,000

C Tremain new Zealand Customs service 19,000 55,000

r Jones new Zealand Defence Force 111,000 116,000

RECEIvABLES DUE fROm RELATED PARTIES

P reynolds Ministry for the environment 13,000 11,000

M Hollings Te Aho o Te Kura Pounanu – The Correspondence school 15,000 –

A Morrision Department of Conservation 58,000 70,000

I rennie state services Commission – 60,000

C MacDonald Department of Internal Affairs 11,000 61,000

C Tremain new Zealand Customs service 44,000 –

r Jones new Zealand Defence Force – 75,000

CREDIT NOTES ISSUED TO RELATED PARTIES

P reynolds Ministry for the environment – 14,000


C MacDonald Department of Internal Affairs – 11,000

C Tremain new Zealand Customs service – 2,000

r Jones new Zealand Defence Force – 5,000

PAymENTS TO RELATED PARTIES


C MacDonald Department of Internal Affairs – 15,000


47


NOTE 24: TRUSTEES REmUNERATION

Trustees work in an honorary capacity and receive no remuneration (2012:nil).

NOTE 25: EmPLOyEE REmUNERATION


TOTAL REmUNERATION PAID OR PAyABLE

$100,000 – $109,999 1 –

$110,000 – $119,999 – –

$120,000 – $129,999 – –

$130,000 – $139,999 2 –

$140,000 – $149,999 – –

$150,000 – $159,999 – 1

$170,000 – $179,999 1 –

$200,000 – $210,000 1 1

Total employees 5 2

NOTE 26: EvENTS AfTER THE BALANCE SHEET DATE

There were no significant events after the balance date.

NOTE 27: fINANCIAL INSTRUmENTS

Financial instrument categories

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


LOANS AND RECEIvABLES

Cash and cash equivalents 1,506,371 1,331,002

Debtors and other receivables 548,893 1,008,718

Investments – term deposits 2,378,321 2,303,686

Total loans and receivables 4,433,585 4,643,406

fINANCIAL LIABILITIES mEASURED AT AmORTISED COST

Creditors and other payables (excluding income in advance) 247,812 294,108

Total financial liabilities measured at amortised cost 247,812 294,108

Financial instrument risk

LDC’s activities expose it to variety of financial instrument risks, including credit risk and liquidity risk. LDC has 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 to be entered into.



48

NOTE 27: fINANCIAL INSTRUmENTS CONTINUED

Fair values

The carrying values of the financial instruments approximates their fair value.

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.

LDC had minimal foreign currency risk on its financial instruments at 30 June 2013 or during the financial year.

Credit risk

Credit risk is the risk that a third party will default on its obligation to LDC, causing it to incur a loss.

Due to the timing of its cash inflows and outflows, LDC invest surplus cash with a registered bank in new Zealand.

LDC has processes in place to review the credit quality of customers prior to the granting of credit.

In the normal; course of business, LDC is exposed to credit risk from cash and term deposits with bank, debtors and other

receivables. For each of these, the maximum credit exposure is best represented by the carrying amount in the statement of financial

position.

Liquidity risk

Liquidity risk is the risk that LDC will encounter difficulty raising liquid funds to meet commitments as they fall due. Prudent liquidity

risk management implies maintaining sufficient cash.

LDC mostly manages liquidity risk by continuously monitoring forecast and actual cash flow requirements.

NOTE 28: CAPITAL mANAGEmENT

LDC’s capital is its equity, which comprises accumulated funds. equity is represented by net assets.

LDC 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.

LDC manages its equity as a by-product of prudently managing revenues, expenses, assets, liabilities, investments, and general

financial dealings to ensure that LDC effectively achieves its objectives and purpose, whilst remaining a going concern.

NOTE 29: EXPLANATION Of SIGNIfICANT vARIANCES AGAINST BUDGET

explanations for major variances from the LDC’s budgeted figures in the statement of intent are as follows:

Statement of comprehensive income

Income

revenue was less than budgeted by $179,000 due to a different mix of fee revenue than expected such as:

Membership levies were down by $99,000 mainly due to Housing new Zealand and Police not renewing their membership for

financial year 2012/13.

Leadership in Practice fees less than budgeted by $ 50,000 due to one scholarship place being offered to soLGM and two people

unable to attend.


49


NOTE 29: EXPLANATION Of SIGNIfICANT vARIANCES AGAINST BUDGET CONTINUED

Leadership Development Programme revenue was down by $79,000 due to the delayed commencement associated the Career

Board process.

Advisory services were more than budgeted by $129,000 due to increase uptake of assessment for development.

Expenditure

expenditure was less than budgeted by $463,000. The major areas below budget were personnel costs and other expenses.

Personnel costs

Personnel costs were down by $133,000 reflecting the mix of permanent and fixed term staff during the year.

Other expenses

Communication costs were below budget by $61,000 due to delays in spending website improvements. The delay is mainly

attributable to prioritising project delivery. This is now budgeted in the next financial year.

Travel expenses were less than budgeted by $107,000 mainly due to lower than budgeted accommodation and meal costs for the

Leadership Development Programme and the leveraging from existing travel plans of overseas speakers rather than LDC paying to

bring speakers over.

Marketing and stakeholder relations expenses were below budget by $103,000 due to two fellowships awarded rather than the three

budgeted for, and expected stakeholder expenses being held over as part of the website project.

Statement of financial position

Current assets

Cash and cash equivalent were more than budgeted by $1.2 million mainly due to 2013/14 levies paid by the majority of members

in June 2013, rather than in July 2013 as budgeted.

Debtors and other receivables were above budget by $518,00 due to advance invoices for 2013/14 subscription levies.

Term investments were more than budgeted by $114,000 due to increase in funds, a result of early payments of membership

levies from agency members.

Non-current assets

Property, plant and equipment were below budget by $88,000 due to less spending in computer equipment.

Intangible assets

Intangible assets has total cost of $78,000 but with nil budget. This was spent for the development of Mobile Learning Application

which was used as a reference tool to implement Mobile Learning for Leadership in Practice programme.

Budget was taken from the unspent budget in computer equipment of $88,000.

Liabilities

Current liabilities were above budget by $1.7 million , a result of 2013/14 subscriptions levies received in advance from members

rather than in next financial year as budgeted. In addition, higher creditors and other payables were due to completion of creditors

contracts at end of financial year.

Statement of cash flows

overall net cash flow for the year ended 30 June 2013 was $1,500,000. This was higher than the budgeted inflow of $267,000 as a

result of payments received in advance for 2013/14 subscription levies.



50

Appendix A: Directory

OffICE Leadership Development Centre

Level 12

Maritime Tower

10 Customhouse Quay

Wellington

POSTAL ADDRESS Po BoX 2460

Wellington 6140

lp 64 4 473 2222

lf 64 4 473 2223

lw www.ldc.govt.nz

le [email protected]

Auditor Karen young

Audit new Zealand

Wellington

on behalf of the Controller and Auditor-General

Bankers Westpac Bank, Wellington

51

SECTION FOUR APPENDICIES

Appendix B: LDC member agencies 2012/13

• Antarctica new Zealand

• Careers new Zealand

• Civil Aviation Authority

• Commerce Commission

• Creative new Zealand

• Crown Law office

• Department of Conservation

• Department of Corrections

• Department of Internal Affairs

• Department of the Prime Minister and Cabinet

• Dispute resolution services

• earthquake Commission

• education review office

• electoral Commission

• environmental Protection Authority

• Families Commission

• Government Communications security Bureau

• Health Promotion Agency

• Health Quality and safety Commission

• Human rights Commission

• Independent Police Authority

• Inland revenue Department

• Land Information new Zealand

• Ministry for Culture and Heritage

• Ministry for Primary Industries

• Ministry for the environment

• Ministry of Business, Innovation and employment

• Ministry of Defence

• Ministry of education

• Ministry of Foreign Affairs and Trade

• Ministry of Health

• Ministry of Justice

• Ministry of Pacific Island Affairs

• Ministry of social Development

• Ministry of Transport

• Ministry of Women’s Affairs

• Museum of new Zealand Te Papa Tongarewa

• new Zealand Productivity Commission

• new Zealand Qualifications Authority

• new Zealand security Intelligence service

• new Zealand symphony orchestra

• new Zealand Transport Agency

• new Zealand Walking Access Commission

• new Zealand Customs service

• new Zealand Defence Force HQ

• office of the Clerk of the House

• office of the Controller and Auditor-General

• Parliamentary Counsel office

• Parliamentary service

• Pharmaceutical Management Agency

• real estates Agents Authority

• serious Fraud office

• sport and recreation new Zealand

• state services Commission

• statistics new Zealand

• Te Aho o Te Kura Pounamu – The Correspondence school

• Te Mangai Paho

• Te Puni Kokiri − Ministry of Maori Development

• Te Taura Whiri i te reo Maori − Maori Language Commission

• Tertiary education Commission

• The Treasury

level 12 i mArine tower i 10 customhouse quAy i po box 2460 i wellington 6140 i new ZeAlAnd

2012/2013 - ldc€¦ · annual report 2012/2013 4 career board changes ldc continues to play an...

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