Helping BusinessSucceed Annual Report 2017

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Contents

03. Key Information

04. President’s Report, Board of Directors

06. CEO’s Report

08. 2017 Highlights

10. Member Engagement

Membership

AdviceLine

Advocacy

ExportNZ

18. Business Services

Training & Conferences

Inhouse and Tailored Training

Health & Safety

EMA Legal

Consultants

22. Financials

Key Information

Senior Management TeamKim Campbell, CEO

Mauro Barsi, GM Member EngagementDavid Foley, GM Business Services

Val Hayes, Public Affairs and Communications ManagerPaul Yeo, Finance and Technology Manager

Professional Service ProvidersFinal accounts prepared by Bellingham Wallace

Financial audit conducted by RSMLegal services provided by Lockhart Legal

Banking services provided by ANZ

EMA is an Incorporated Society, certificate number 221372

EMA Head Office – Auckland145 Khyber Pass Rd, Grafton, Auckland, New Zealand

Private Bag 92066, Victoria St West, Auckland 1142, New ZealandT +64 9 367 0900

Hamilton OfficeEMA / ExportNZ Waikato

103 Tristram Street, HamiltonPO Box 490 Waikato Mail Centre, Hamilton 3240

T +64 7 839 2710

Tauranga OfficeExportNZ Bay of Plenty

Smart Business Centre, 65 Chapel Street, Bay Central, Tauranga 3110PO Box 13202, Tauranga Central, Tauranga 3141

T +64 7 571 0600

T 0800 300 362W www.ema.co.nz

Annual Report 2017 | 3

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Key Information

Senior Management TeamKim Campbell, CEO

Mauro Barsi, GM Member EngagementDavid Foley, GM Business Services

Val Hayes, Public Affairs and Communications ManagerPaul Yeo, Finance and Technology Manager

Professional Service ProvidersFinal accounts prepared by Bellingham Wallace

Financial audit conducted by RSMLegal services provided by Lockhart Legal

Banking services provided by ANZ

EMA is an Incorporated Society, certificate number 221372

EMA Head Office – Auckland145 Khyber Pass Rd, Grafton, Auckland, New Zealand

Private Bag 92066, Victoria St West, Auckland 1142, New ZealandT +64 9 367 0900

Hamilton OfficeEMA / ExportNZ Waikato

103 Tristram Street, HamiltonPO Box 490 Waikato Mail Centre, Hamilton 3240

T +64 7 839 2710

Tauranga OfficeExportNZ Bay of Plenty

Smart Business Centre, 65 Chapel Street, Bay Central, Tauranga 3110PO Box 13202, Tauranga Central, Tauranga 3141

T +64 7 571 0600

T 0800 300 362W www.ema.co.nz

PresidentAndrew Hunt - Kinetics Group

Board

Margaret Brown - COGITA HoldingsChris Davis - Rinnai NZ Ltd

Margaret Gracie - New Zealand Steel Steve Hughes - Masport Ltd

David Jack - Permark IndustriesSara Lunam- Port of Tauranga

Laurie Margrain - Open Country DairyGraham Mountfort - Douglas Pharmaceuticals

Richard Pearson - EnviroWasteAndrew Phipps - University of Auckland

Derek Rankin - Rankin Treasury AdvisoryColleen Stairmand - Diabetes NZ

James Watson - ASB BankAs at 30 June 2017

EMA, like all organisations, needs to be prepared for the changes that may come our way. As we head into a new parliamentary term with a Labour-led coalition Government we will need to better understand what the impact of this will be. Whatever the outcome, the EMA will continue to focus on matters of importance to business such as investment, immigration and our labour laws.

Looking internally, we also have to make sure the EMA remains the best that it can be. Earlier this year the Board held a strategic retreat to look at the challenges and opportunities facing our organisation. It will be no surprise that we, like all membership associations, need to ensure we remain relevant and provide the services our members want and need.

While it sounds relatively simple, it is important we keep you, our member, at the heart of what we do. We are unashamedly here to help business succeed.

That is why the main outcome of the strategy session was to look ahead and make sure the EMA remains a fit-for-purpose organisation ready to serve business in our region and for many years to come. This has resulted in a flatter structure at senior management level to ensure the organisation is able to focus on enhancing the membership offering on the one hand while balancing this with ensuring we have enough fuel in the tank (ie revenue) to run our operation.

I am excited to see the work now taking shape as a result of this. The new structure is excellent and I commend the management team for their professionalism in ushering this in. On behalf of the board, I would like to thank the staff for embracing our revitalised direction.

Expect to see more from us going forward on how we can help your business prosper, whether that’s through our core employment law, legal and advisory services, or training and up-skilling your staff, our consultancy services or our advocacy efforts to deliver a landscape to enable you to operate effectively.

In addition, we continue to work and connect with BusinessNZ to ensure our combined efforts deliver impact on issues of national significance.

As always, our financial health is vital for ensuring we are in the best position to serve the needs of members.

Message from the President

Therefore I am pleased to confirm we have delivered another trading surplus for the 2017 financial year.

We delivered a surplus of $942, 328 from a gross income of $18.014 million with expenditure of $17.072 million.

From the Board’s perspective delivering consistent financial results means we are able to invest back into the services we offer you as a member.

I would like to acknowledge and thank my fellow board members for their service and input into the governance of the EMA. I also wish to commend Kim Campbell and the wider EMA team for all their efforts over the past year, and going forward.

Andrew Hunt President

Annual Report 2017 | 5

Message from the President

Annual Report 2017 | 7

Message from the CEO

As a valued member of the EMA, I would like to thank you for your support over the past year. You are part of a 4000-plus network of employers and belong to the one of the country’s most pre-eminent business associations.

Our mission is to help you grow and succeed. In the past year we have refined our strategic focus to ensure we remain relevant to the needs of business and provide value to you.

We have actively advocated on behalf of members for a framework that enables business to operate more effectively. Sometimes that’s about keeping the status quo, such as our campaign to keep the current electricity pricing model as is or lobbying to keep employment law in its current form. Other times, it’s about driving significant change such as our ongoing and collaborative efforts to drive resource management reform.

Our aim is to pursue those initiatives which help our members remain competitive in today’s business environment.

We ensure the needs of business are heard by decision-makers. Across our organisation we interact with central and local government, with government ministries and with other like-minded industry groups to ensure we get traction on what’s important to most enterprises.

We also provide a range of services which help you operate effectively and build capability. As a member you have exclusive access to free employment relations advice, online employment tools, regular updates on key issues via our member briefings and communications, legal services at a competitive rate and lower cost training and conferences for you and any of your staff.

We always look to how we enhance this offering. For instance we have expanded our health and safety services in response to member needs.

In the past year we have seen the further development of our main site in Auckland. We have now been in our new premises for a full year, and the Real Institute of New Zealand has successfully redeveloped and moved into their office block next door (previously our headquarters). The site is certainly looking like a business hub and next year we plan to add more parking to ensure it’s always easy for members to come to an event, attend training or arrange a meeting in a central location.

I am glad to be able to report that we closed the 2017 financial year in good heart. Our finances are in order, our membership is solid and we are well placed to cope with changes to the business landscape in the future.

We look forward to your continued support and to working with you in the coming year.

Kim Campbell CEO

2017 key highlightsThroughout the past year the EMA team worked hard to ensure activities were focused on delivering to the needs of members. Here are just some of the ways we helped our 4000-plus member organisations to succeed.

15members attended 25

FREE forums and advocacy

briefings submissions were made to central and local government to

ensure members’ voices were injected

into the development of public policy

reduction in carbon footprint

1200+

125students

graduated with a Youth

Employability Certificate

to help them become work

ready

ExportNZ Auckland, Waikato and Bay of Plenty teams engaged

meaningfully with 915 member companies

915

874 courses, conferences and events were delivered by

the Learning team

10,578 people attended a course,

conference or event organised by the Learning team

Millions of readers, viewers and listeners made aware

of key business issues via media commentary

11 issues

30,064calls answered by AdviceLine Team

35per cent

Annual Report 2017 | 9

2017 key highlights

35

50%Advocacy’s Top 200

engagement programme has touched more than 50% of our

leading members

per centrevenue

increase in digital training

formats

18%increase in

Tailored Training revenue

65 score was the overall Net

Promoter Score awarded by course and conference

attendees

of BusinessPlus

packed with news and

commentary to keep

members up-to-date

11 issues

2227 Members

85%

took advantage of EMA Consultancy or EMA Legal service this year

of members who used EMA Legal services rated them overall as very good

or excellent

7402 Peopleattended briefings and

employment events organised by the Enterprises team

1214 Peoplepeople chose the webinar

option to “attend” our member briefings

MembershipAt the heart of the EMA are our members, and this year was no exception with membership remaining steady.

With respect to our Membership team we undertook a major restructuring with a view to introduce a greater emphasis on retention, including the appointment of a Retention Manager and the roll out of targeted retention activity across the newly recruited Territory Managers. We expect to see the full rewards of this new approach in the coming fiscal year, but we did note an increase in engagement and activity by targeted members of this activity with the change.

This year also saw us enhance our digital video presence and digital platforms. We have invested in a production suite and will be able to produce material in-house for members to consume as and when they want to.

The AdviceLine team is leading the charge in this space and preparing a series of short sharp videos to recast much of our written employer-specific material to be more informative and engaging.

Our relationship with Business Central continues to be rewarding for both parties with increased satisfaction and support for our ‘white label’ activities in the lower North Island. Survey results make it clear that Business Central members highly value access to AdviceLine, and that it is an increasing part of the reason they remain members of the association. It also remains an important economic contributor to the EMA.

Overall, we have strived to provide improved member service, increased member coverage and continued high levels of member satisfaction.

Member EngagementAs part of the move to a more member-centric focus we have a new division titled Membership Engagement. It brings together the areas of EMA which aim to deliver the organisation’s service offering, combing elements of what was previously known as the Advocacy & Industry Relations division and the Enterprises division.

Manufacturing

Construction

Science and Tech

Other services

Wholesale trade

The EMA services businesses from Taupo north

Top 5 member industries

882

968

132

Northland

Auckland North & West

Auckland Central

Auckland East & South

WaikatoBay of Plenty

561

696

611

166

Other

Annual Report 2017 | 11

Manufacturing is the largest segment of EMA’s membership.

Image courtesy of Coca-Cola Amatil NZ Ltd.

“We find the EMA a great source of information for practical and useful HR advice. We gain real benefit attending the regular briefings to be updated on matters important to business in Auckland and New Zealand,” Tony McKenna, Human Resources Manager – NZ, Linfox Logistics

Annual Report 2017 | 13

Agreements/Recruitment

Discipline/Termination

Employee Leave

Performance managementUnion Issues

ACC/OSH

Publications/Website

EMA Learning

Membership/Non-member

Compensation/Survey/Tax

Legislation

Transfer Calls

General enquiries/Other

Restructuring

AdviceLineOur AdviceLine team interact with members on a daily basis providing highly valued employment advice on a range of topics. This service is part of your membership package and is highly rated by those who use it.

AdviceLine is often identified as a key reason for either signing up or renewing membership to the EMA.

The AdviceLine team is comprised of eight employer advisors who are qualified in human resources and employment law. Members are able to speak with an AdviceLine staff member anytime from 8am to 8pm, Monday to Friday (except public holidays). Naturally, queries can be submitted any time via email and other advice can be found via the membership section of the website.

1890 emails answered

97% of callers rated the AdviceLine service

as very good or excellent

90% of calls answered

within 15 seconds

Our goal was 85%

What have members been asking AdviceLine? 20.5%

14.2%

4.2%14.8%

11.1%

11.1%

1.0%

1.9%

2.4%

2.6%

5.1%

4.4%

4.0%

6.4%

7.3%

AdvocacyThe EMA’s move to a proactive campaign style of advocacy has gained further traction and delivered tangible benefits to members.

In the past year this was highlighted by very satisfying and speedy results around a couple proposed legislative changes. One proposed change was to treat contract workers as employees and the other was to create artificial pay thresholds for immigrant workers to define their skill levels and ability to work in New Zealand. These would have had a detrimental effect on many EMA members if they had progressed.

But both legislative changes were defeated as the EMA and others in the family including BusinessNZ mobilised to oppose these changes.

Our streamlined approach to advocacy has also allowed us to focus our resources and energy on four main areas of policy and also build coalitions to assist in advocating for our members. Our Policy Advisory group brings members’ views to the table and manages the flow and focus of policy initiatives. To reiterate our work is focused on the core pillars of:

“EMA is about networking, to find customers and collaborators. What pays off best is word of mouth and rubbing shoulders and doing favours.” Mike Langhorne, Managing Director, Possumdown

Annual Report 2017 | 15

- Coping with the challenge of growth and development, in particular how this relates to infrastructure development, transport and the resource management system

- Addressing skills development, education and training- Health and safety and all employment law related

matters- Export and trade opportunities for growth

As a result of this focus and coalition building we have made significant progress, working with Infrastructure NZ, Property Council NZ and the Environmental Defence Society in gaining cross-party political acceptance of the need for total resource management system reform. This is now on the policy radar for all major parties and we have further strategies in place to drive this campaign.

Another significant and successful research-backed campaign was our partnership with Auckland International Airport Ltd, Ports of Auckland Ltd, National Road Carriers Association and Infrastructure NZ to identify the productivity benefits available to business from the decongestion of Auckland roads. The $1.3 - $2 billion figure galvanised the debate at local and national government level and has focussed the various transport agencies on finding a faster solution to decongesting the city.

Our work with the Pay Equity Working Group has resulted in one significant agreement being completed ahead of the legislation with several more in the pipeline. We also want a similar working group approach to reform of the problematic Holidays Act. Our work continues in the health and safety and ACC areas with some concerns beginning to arise around implementation of the recent health and safety legislation.

We are looking ahead of the curve with our work on the ageing workforce and the ramifications this has for employers, individuals and government. We are leading a working group, comprised of relevant government agencies and associations, to pull together an inter-agency strategy on how unlocking the potential of New Zealand’s ageing workforce can deliver tangible benefits.

ForumsWe run regular forums on matters of interest to business with the aim of encouraging members to develop their networks along with encouraging debate and discussion which will feed into our wider policy discussion. The range of speakers who addressed our forums over the past year are highlighted here.

Manufacturing Forum- Simon Bickerton, Director of the Centre for Advanced

Composite Materials, Professor Mark Taylor, Dr Mark Battley from University of Auckland

- Professor Shaun Hendy, Director of Te Punaha Matatini- Steve Summers, Economist Business NZ- Nathan Standiall, Callaghan Innovation

Employers Forum- Hon. Michael Woodhouse, Minister for Immigration,

Workplace Relations and Safety- Hon Louise Upston, Minister for Women- Hon Nicky Wagner, Minister Disability Issues- Professor Paul Spoonley, Massey University- Carl Andrew, Immigration NZ- John Edwards, Privacy Commissioner- Dianne Maxwell, Retirement Commissioner

Policy Forum- Labour Housing Spokesman Phil Twyford and Minister

Paul Goldsmith on housing issues - Deputy Mayor Penny Hulse on the Unitary Plan- Grant Spencer, Deputy Governor and Head of Financial

Stability, Reserve Bank of New Zealand- David Talbot, Research Director at UMR Research on

election trends- Green Co-leader James Shaw- New mayor Phil Goff on Auckland issues- Transport Minister Simon Bridges

SubmissionsDuring the past financial year, EMA lodged a number of submissions across a range of issues where it was important to have a business perspective included.

- Electricity Authority on Transmission Pricing Issues and Proposal

- Auckland Council on its Annual Plan 2017/18- Productivity Commission on Better Urban Planning

Issues Paper- Productivity Commission New Models of Tertiary

Education- Draft International Education Strategy- Digital Technologies in New Zealand Curriculum- Proposed Changes to Essential Skills Visa

Documentation (in conjunction with BusinessNZ)- Fire Service Levies - Urban Development Authorities Discussion Document- Anti-Dumping and Countervailing Duties Legislation- Customs and Excise Bill- Proposed Changes to Classification Updates on EPA

Notices for Labelling Safety Data Sheets & Packaging- Proposed Notice for Disposal of Hazardous Substances- Local Government Act Amendment Bill- Proposed National Policy Statement on Urban

Development Capacity

“Exporting is a challenge and we have benefitted from workshops and enjoyed learning and sharing experiences with other New Zealand businesses.” Louise Duncan, Managing Director, TetraMap International

Annual Report 2017 | 17

Engagement through EMA Industry Groups The EMA continues to engage with members via industry groups. This provides insight into industry issues as they affect the respective groups and the wider EMA membership.

This work also broadens the engagement with government at differing levels and through wider numbers of government agencies.

The work has seen representation through the ISO process for Cosmetics and IEC for Electronics standards. Local Standards representation occurs both directly and indirectly where industry groups are represented on a wide range of building materials standards.

Over the past year EMA staff have represented industry groups at two ISO meetings offshore, made eight formal submissions on standards and operated a New Zealand review groups for the Cosmetics ISO standards.

The EMA has held four meetings of the Tomorrows Cargo Logistics Group over the past financial year engaging with border agencies, key stakeholders in the import and export sectors and logistics providers. This group enables direct conversations between government agencies and pan-industry stakeholders on issues and proposals for improvements to the transactional and physical movement of goods in and out of the country.

It has been noted that many of the streamlining proposals for border transactions through the Trade Single Window that are now coming into full effect had their initial germination from discussions with this group chaired by the EMA.

1297 Membersmake up ExportNZ’s membership, this equates to

25% of the overall EMA membership

62 eventswere run across the regional network

with an emphasis on networking and capability-building

ExportNZ Auckland co-organised a

business mission to Malaysia and

Thailand

extremelysuccessful export

award events were held

two

ExportNZWith export and trade being a vital part of the wider New Zealand economy, the ExportNZ team continues its drive to help businesses realise their export potential.

A key way the ExportNZ team helps their members succeed is to provide a programme of initiatives which help exporters unleash their full potential. Whether that’s through exporter-focused learning programmes or events where they can connect and encourage each other, the aim is to build exporting excellence.

One of the ways they do this is by challenging and encouraging big corporates and top exporters to invest more, engage more and drive value to help ambitious SME exporters realise their international growth aspirations, and this year has been no exception.

The programme of work is delivered across the EMA region, with dedicated staff based in Hamilton and Tauranga servicing their respective areas. They do a fantastic job managing the relationships with sponsors,

external stakeholder agencies and exporters along with activating the regional member network.

The focus of ExportNZ is to add significant, serious and meaningful value to exporters around four core offerings

- Inspiring business to expand business horizons internationally - ExportNZ awards are a showcase of export success stories.

- Building dynamic relationships with members through the ability to associate with a wider group of exporters. This helps overcome the go-it-alone spirit often typical of Kiwi exporters who need to address strong global competition from emerging nations who are highly organised in selling their products and services.

- Building export capability through practical support whether you are starting out and don’t know how to get underway or an experienced operator who has come up against a stumbling block.

- Facilitating connections internationally through opportunities to connect with international partners through business missions.

rate the achievements of our top expo

Training & ConferencesThe commissioning of the new training and conference centre in April 2016 at EMA’s headquarters at 145 Khyber Pass Road, set a new industry standard in the delivery of business training and events. The resources were put to full use in 2017, allowing EMA to continue exceeding the ever increasing demands of our members with the development and delivery of innovative products.

For the former Learning division it was definitely a year of two halves.

The first six months of FY17 (July – Dec 2016) saw the trend of previous years continue with an increasing demand for EMA Learning programmes. The average number of course attendees in this period topped 350 month, and with record monthly surpluses, the division ended the 2016 calendar year ahead of budget. The Conference’s division also continued to deliver real value to members and achieved budget (excluding the financial impact of the Thrive conference).

The start of 2017 however saw a real change in Training’s position. The demand for courses and Tailored Training’s services reduced as many companies reviewed their training budgets. The average number of course attendees in this period dropped to 260 per month. However, the Conference team maintained its high performance levels and achieved above budget for this period.

Overall, the division traded its way into a surplus, and delivered a total of 874 events to 10,578.

Business ServicesA new division called Business Services has been created as part of the revitalised strategic direction of EMA. The focus of this division is to provide high quality services valued by members which help them improve their business. This mandate will also enable the division to focus on new and reinvigorated products, providing there is accompanying demand. Business Services brings together elements of what was previously known as the Enterprises division and the Learning division.

216

293

84

60

97

89

13

1

11

10

1956

2801

707

435

1203

580

1059

592

548

697

Health and Safety

Tailored Solutions

Management

Human Resources & Employment Relations

Digital

Business Productivity

Conferences

Thrive

Half day tool kits

Networks

874 10,578

CoursesHeld

Number ofAttendees

Annual Report 2017 | 19

“We are truly grateful to the EMA for helping us create a vision for customer service training and a ‘Red Carpet’ approach for the Auckland Kindergarten Association. This has provided our organisation with the knowledge and skills to bring a truly customer centred approach to life.” Tanya Harvey, CEO, Auckland Kindergarten Association

Inhouse and Tailored TrainingInhouse and Tailored Training has continued to grow in demand, with an increase in revenue of over 18% on the previous year. The main contributor to this continued growth was the increase in the number of multiple training events being delivered to individual members. The 293 training events were delivered to 134 member companies. The team’s focus for FY18 will be the development of programmes being delivered in the regions through additional resources being utilised.

Health & SafetyHealth and Safety courses and conferences have benefited over the past few years from the change of legislation finally enacted in April 2016. As predicted, these benefits continued for the first half of our financial year, however, from the start of the calendar year, a decline in interest became apparent as competition in this space increased and businesses became familiar with the new legislation.

To counter this, a new Health and Safety division has been launched and for FY18 it will focus on providing new and extensive health and safety services and products to EMA members.

EMA Legal ConsultantsEMA Legal did well again, as it makes a place for itself in the legal services market. We see the future for this part of our business as strong and we will be investing in a growth plan for Legal in the coming new year. Our members report very high levels of satisfaction with the team and we see a growing footprint across Rotorua, Tauranga and Hamilton, as well as potentially Wellington, Christchurch and Dunedin as viable options in the next 12 months. Much will depend on the attitude of our sister organisations but the future for EMA Legal remains positive.

One of the features of the EMA is how we service the needs of members in a range of ways. Our consultants in the employment relations and health and safety space provide a way for the EMA to work alongside your business, as and when you need it. In total, our Consultants engaged with 970 members providing further reach for the EMA across our region. In the coming year we will look to expand our service offering under this banner, in response to member demands.

The Conference’s unit took advantage of difficult market conditions by continuing to develop practical and relevant programmes designed to deliver targeted advice in a condensed period of time. New products focused on delivering core business information and have proven to be extremely profitable.

Thrive 2016 – while financially a disappointment, was a success based on the feedback received from sponsors, delegates and speakers. We had a 92.6% satisfaction rating and a 93.4% for likely to recommend.

Post Thrive debriefs with sponsors revealed that Thrive 2016 was one of the best events they have ever been involved with and also gave high commendation about the programme line up. They were pleased to have engaged with the EMA via the Thrive event, and felt that the organisation’s capabilities to put together such a professional, engaging and creative product exceeded their expectations. The EMA Conference team delivered a truly well-executed and professional event.

The External Evaluation and Review report received from NZQA saw the Training Centre slip from Category 2 to Category 3. As a result, an improvement plan was compiled and implemented in order to regain a Category 2 (or better) rating at the next review in November 2017. This plan included the implementation of a Quality Improvement Programme that involved a large investment in resources dedicated to quality assurance, specialised external consultants and course attendee pastoral care to ensure qualification achievements, programme design, assessment moderation and trainer’s professional development.

Over the past few years, we have invested in the development of computer based resources that are designed to enhance the classroom experience and, more recently, online learning courses. This year, the demand for online courses has strengthened and seen a 35% increase in both Computer Based Training (off the shelf public eLearning courses) and the Digital Training (bespoke eLearning for individual companies).

Annual Report 2017 | 21

Health & Safety

“At Hydraulink it’s our service-oriented reputation that makes us a trusted long standing supplier to organisations like Team NZ, and why we’re a growing force in the wider Asia-Pacific region.The EMA is one of our key training partners, and help us continuously develop employees to enable them meet our growth challenges.” Jim Thompson, Human Resources and Organisational Development Manager, Hydraulink

FinancialsIncluded here are our 2017 summarised audited financial statements. The full version can be accessed from our website or on request.

We are happy to report EMA earned a net profit from continuing operations of $942,328 for the year, compared to last year’s surplus of $743,510 on a like for like basis.

Gross income for the year from continuing operations was $18.014 million (last year: $17.509 million) with total expenditure of $17.072 million (last year: $16.766 million).

Subscriptions accounted for most income, up 6.9% on last year with total membership subscriptions of $7.531 million (last year: $7.046 million). Employment Relations, OSH, EMA Legal and the Wage & Salary Survey collectively earnt $2.764 million (last year: $3.243 million) and Training & Conferences generated $5.705 million (last year: $5.419 million). Revenue from delivering services to Business Central members generated $1,000,384 (last year: $820,474), a 21.9% increase to last year.

Income from investments, primarily interest and property rentals, was $267,422 (last year: $306,795). A decrease of 12.8%.

EMA aims to help exporters succeed via ExportNZ’s vibrant offering. Image courtesy of Compac

Overall cost control was again well managed, as total revenue growth exceeded cost growth by 1% (1.8% cost growth vs revenue growth of 2.8%). Major expenses were Employment $6.945 million (last year: $7.061 million, a 1.6% decrease); Training & Conferences delivery $2.807 million (last year: $2.423 million, up 15.84%); Contractors $1.939 million (last year: $1.991 million) and the Business NZ levy $871,797 (last year: $920,230). In total our Information Technology spend this year was $744,517, down from last year of $840,902.

Our capital expenditure for the year was $874,091 comprising of: Freehold Land $568,446, Freehold Buildings $6,081, Building Improvements $47,133, Office Furniture and Fittings $96,286; Computer Hardware $15,837; Motor Vehicles $80,000; Work in Progress on construction $60,308.

We would like to record our appreciation to the Finance and Audit Committee for their valuable guidance and advice.

Annual Report 2017 | 23

2017 2016

Current Assets $ $

Cash & Cash Equivalents 1,376,224 3,399,794Receivables 5,958,209 5,650,949Inventories 45,175 34,607Investment Bonds - 650,000Loan to Related Party 5,000 5,000

7,384,608 9,740,350Non-current AssetsProperty, Plant & Equipment 26,272,522 22,795,018Investment Properties 2,540,000 2,025,000Investment Bonds - 250,000Long term loan to Related Party 10,000 15,000Intangible Assets 33,747 79,617Investment in Business NZ Incorporated 498,596 489,656

29,354,865 25,654,291

Total Assets 36,739,472 35,394,641

Current Liabilities Payables from Exchange Transactions 1,180,793 1,198,438Subscriptions & Fees in Advance 6,073,280 6,128,945Annual Leave Accrual 445,223 418,394GST Payable 860,680 856,192Loan Credit Facility 1,750,775 5,176,247Total Liabilities 10,310,751 13,778,216

Net Assets 26,428,721 21,616,425

Total Equity 26,428,721 21,616,425

For and on behalf of the Board, which authorised the issue of these summary financial statements on 11 October 2017.

Andrew Hunt, President Kim Campbell, CEO

Summary Statement of Financial Position

Pages 23 to 26 are summary financial statements taken from the audited Financial Statements of the Employers & Manufacturers Association (Northern) Inc for the year ended 30 June 2017 which are prepared in compliance with PBE Standards.

These individual full financial statements were authorised for issue on 11 October 2017 by the Board of Employers & Manufacturers Association (Northern) Inc and an unmodified audit opinion on those statements was also issued on that date by RSM Hayes Audit.

The full financial statements, which have been prepared in accordance with New Zealand Generally Accepted Accounting Practice, are presented in NZ dollars (rounded to the nearest dollar) and contain a statement of compliance with PBE Standards Reduced Disclosure Regime.

These summary financial statements cannot be expected to provide a complete understanding as provided by the full financial statements. For full financial statements, please view it on or download it from the Association’s website at www.ema.co.nz [search “Annual Report”]

As at 30 June 2017

2017 2016

Revenue from Exchange Transactions $ $

Membership Subscriptions 7,531,239 7,046,261Employment Relations Consultancy, OSH, Legal Services & Publications 2,764,320 3,243,151Training & Conferences 5,705,244 5,419,988Other 2,010,011 1,797,735Revenue from Non-Exchange TransactionsCommission & Dividends Received 3,066 1,851Total Revenue 18,013,880 17,508,986

ExpensesContractors’ Expenses 1,939,357 1,991,012Training & Conferences Delivery Expenses 2,806,665 2,422,845Business NZ Levy 871,797 920,230Employment 6,944,646 7,060,532Other Expenses 4,509,087 4,370,857Total Expenses 17,071,552 16,765,476

Net Profit from Continuing Operations 942,328 743,510

Finance Costs/IncomeFinance Income (34,534) (147,218)Finance Costs 81,661 157,439Net Finance Costs / (Income) 47,127 10,221

Other Revenue & ExpensesGain on Fair Value of Investment Properties 515,000 -Impairment Expense (1,605,839) -Equity Accounted Profit from Business NZ 8,940 83,118Net Surplus for Other Revenue & Expenses (1,081,899) 83,118

Taxation - -Net Surplus for the year (186,698) 816,407Other Comprehensive Revenue & Expenses 4,998,994 -Total Comprehensive Revenue & Expenses for the year 4,812,296 816,407

Summary Statement of Comprehensive Revenue and ExpensesFor the year ended 30 June 2017

Annual Report 2017 | 25

Retained Earnings Retained Earnings

$ $As at 1 July 2016 21,616,425 As at 1 July 2015 20,800,018Total Comprehensive Income (186,698) Total Comprehensive Income 816,407At 30 June 2017 21,429,727 At 30 June 2016 21,616,425

Asset Revaluation

Reserve

Asset Revaluation

Reserve

$ $Gain on Revaluation Gain on RevaluationReserve 4,998,994 Reserve -TOTAL MEMBER FUNDS 26,428,721 At 30 June 2016 21,616,425

2017 2016$ $

Net Cash Flows From: Operating Activities 1,295,709 261,070 Investing Activities 106,193 (5,721,856) Financing Activities (3,425,472) 5,176,247Net Increase/(decrease) In Cash & Cash Equivalents (2,023,570) (284,539)Cash & Cash Equivalents at Beginning of Period 3,399,794 3,684,333Cash & Cash Equivalents At End Of Period 1,376,224 3,399,794

Summary Statement of Changes in Net Assets/Equity

Summary Statement of Cash Flows

For the year ended 30 June 2017

For the year ended 30 June 2017

Notes to the Summary Financial Statements

1. Basis of PreparationThe full financial statements from which these summary financial statements are extracted are compliant with the Public Benefit Entity International Public Sector Accounting Standards Reduced Disclosure Regime (“PBE IPSAS RDR”) and other applicable financial reporting standards as appropriate that have been authorised for use by the External Reporting Board for Not-For-Profit entities. For the purposes of complying with NZ GAAP, the Association is a public benefit not-for-profit entity and is eligible to apply Tier 2 Not-For-Profit PBE IPSAS on the basis that it does not have public accountability and it is not defined as large. Full details of the policies adopted are available in those full financial statements. They are presented in New Zealand dollars.

These summary Financial Statements comply with PBE Standards as they relate to summary financial statements.

2. Change in Accounting Policy and DisclosuresThe accounting policies adopted in these financial statements are consistent with those of the previous financial year.

3. Related Party DisclosureTransactions with Related Parties

(a) Business New Zealand Incorporated (“BusNZ”)

The Association is one of four founding members and has five of its board members appointed to the BusNZ’s twelve-member executive council. Accordingly BusNZ is considered an associate.

The Association pays an annual levy to BusNZ and the sum for this year is fully disclosed in the Statement of Comprehensive Revenue and Expenses.

The balance owed to the Association by BusNZ for employment relations and work-based training and courses as at 30 June 2017, is $0 (2016: $70,680).

During 2011, the Association provided an interest free loan of $50,000 to BusNZ. The loan has a term of 10 years and is repayable by way of settlement in kind. At 30 June 2017 the balance of this loan was $15,000 (2016: $20,000). $5,000 of the balance is current and $10,000 is non-current.

(b) Auckland Agricultural, Pastoral & Industrial Shows

The Association has, through its 1996 merger with the Auckland Manufacturers Association Incorporated (the “AMA”), a 50% representation in the Auckland Agricultural, Pastoral & Industrial Shows board that manages the Auckland Showgrounds. The representation arises out of legal requirements placed on the AMA by the Auckland Agricultural, Pastoral & Industrial Board Act 1972.

Terms and conditions of transactions with related parties:

Sales to and purchases from related parties are made in arm’s length transactions both at normal market prices and on normal commercial terms.

4. Capital CommitmentsAt balance date there were no capital commitments (2016: nil).

5. ContingenciesThe Association has no contingent liabilities at 30 June 2017 (2016: nil).

6. Revaluation of Freehold Land and BuildingsThe association has revalued Freehold Land and Buildings upwards by $4.998 million, effective 22 May 2017, and have carried this value through to balance date. There has been no material change since the date of valuation. The Association will revalue these properties periodically going forward. The Association believes the revaluation better reflects the non-financial assets of the Association. Prior to this, the Association valued owner-occupied Land & Buildings at cost less depreciation.

7. Events Subsequent to Balance DateSubsequent to balance date the Association entered into a contract to construct a further two floors of carparking on top of the existing carpark situated at 11 Auburn Street. (2016: No events subsequent to balance date).

Annual Report 2017 | 27

Independent Auditor’s Report

To the Members of Employers and Manufacturers Association (Northern) Incorporated

OpinionThe accompanying summary financial statements on pages 23 to 26, which comprise the summary statement of financial position as at 30 June 2017, the summary statement of comprehensive revenue and expenses, summary statement of changes in net assets/equity and summary statement of cash flows for the year then ended, and related notes, are derived from the audited financial statements of Employers and Manufacturers Association (Northern) Incorporated for the year ended 30 June 2017.

In our opinion, the accompanying summary financial statements are consistent, in all material respects, with the audited financial statements, in accordance with PBE FRS 43: Summary Financial Statements issued by the New Zealand Accounting Standards Board.

Summary Financial StatementsThe summary financial statements do not contain all the disclosures required for full financial statements under Public Benefit Entity Standards Reduced Disclosure Regime. Reading the summary financial statements, therefore, is not a substitute for reading the audited financial statements of Employers and Manufacturers Association (Northern) Incorporated. Those financial statements, and the summary financial statements, do not reflect the effects of events that occurred subsequent to the date of our report on those financial statements.

The Audited Financial Statements and Our Report ThereonWe expressed an unmodified audit opinion on the audited financial statements in our report dated 11 October 2017.

Board Members’ Responsibility for the Financial StatementsThe members of the governing body are responsible for the preparation and fair presentation of these financial statements in accordance with PBE FRS 43: Summary Financial Statements.

Auditor’s ResponsibilityOur responsibility is to express an opinion on the summary financial statements based on our procedures, which were conducted in accordance with International Standard on Auditing (New Zealand) (ISA (NZ)) (ISA (NZ))810 (Revised): Engagements to Report on Summary Financial Statements.

We are ordinary members of the Employers and Manufacturers Association (Northern) Incorporated and trade with it on standard membership terms. We have no governing body or management roles or influence. Other than this and in our capacity as auditor, we have no relationship with, or interests in, Employers and Manufacturers Association (Northern) Incorporated.

RSM Hayes AuditAuckland

11 October 2017

NZ 0800 300 362 AU 0800 300 362E adviceline@ema.co.nz

ema.co.nz