262

NEW ZEALAND GAZETTE

No. 11

Approved Borrowing Agreement and/or (ii) results (or may result) in the date for repayment of any amount owing by the institution under that Approved Borrowing Agreement being advanced and/or (iii) entitles (or may entitle) any lender under that Approved Borrowing Agreement to require early repayment by that institution of any such amount, to refuse to advance any further amount to that institution, to review loans made by it to that institution or to take or refuse to take any other action under that Approved Borrowing Agreement.

“Default Debt/Equity Ratio” in respect of an institution is the ratio calculated as follows and expressed as a percentage:

Debt

Debt + Equity

“Default Interest Cover Ratio” in respect of an institution is the ratio calculated as follows:

Operating Surplus/Deficit + Interest Expense

Interest Expense

“Equity” is the amount recorded as equity in the audited actual or budgeted (as the case may be) statement of financial position of an institution.

“financial statements component” means a statement of financial position, statement of financial performance or statement of cash flows.

“interest cover ratio” means a ratio of surplus from operations to interest expense (however that ratio, that surplus and that expense are calculated and described).

“Interest Expense” is the amount recorded as interest expense in the audited annual or budgeted (as the case may be) statement of financial performance of an institution.

“liabilities to assets ratio” means a ratio of the value of liabilities to the value of assets (however that ratio, that value of assets and that value of liabilities are calculated and described).

“Liquid Funds” is the total of amounts recorded in the audited or budgeted (as the case may be) statement of financial position of an institution in the form of cash or securities or other investments which can be as readily converted into cash.

“Liquid Funds Ratio” in respect of an institution is the ratio calculated as follows and expressed as a percentage:

Liquid Funds + Available Credit Lines

Operating Cash Payments

“Maximum Permitted Debt/Equity Ratio”, in respect of an institution which is party to an Approved Borrowing Agreement, means a debt/equity ratio specified in that Approved Borrowing Agreement, that institution’s exceeding which (or meeting or exceeding which) will constitute or result in a Default Event.

“Maximum Permitted Liabilities to Assets Ratio”, in respect of an institution which is party to an Approved Borrowing Agreement, means a liabilities to assets ratio specified in that Approved Borrowing Agreement, that institution’s exceeding which (or meeting or exceeding which) will constitute or result in a Default Event.

“Minimum Required Interest Cover Ratio”, in respect of an institution which is party to an Approved Borrowing Agreement, means an interest cover ratio specified in that Approved Borrowing Agreement, that institution’s failure to exceed which (or failure to achieve or exceed which) will constitute or result in a Default Event.

“Operating Cash Payments” is the amount recorded as cash paid or applied to operations in the audited annual or budgeted (as the case may be) statement of cash flows of an institution.

“Operating Cash Receipts” is the amount recorded as cash received from operations in the audited annual or budgeted (as the case may be) statement of cash flows of an institution.

“Operating Surplus/Deficit” is the amount recorded as the net surplus or deficit (as the case may be) in the audited annual or budgeted (as the case may be) statement of financial performance (financial statements component) of an institution, adjusted by deducting any non-recurring revenues and adding back any non-recurring costs (in each case as reflected in the relevant statement of financial performance). An example of non-recurring revenue is a profit on the sale of an asset. Examples of non-recurring costs include losses on asset disposals or revaluations and restructuring costs. An item does not qualify as non-recurring simply because it is unplanned or unexpected.

“Reforecast”, in respect of an institution, means any financial forecast or similar document which is prepared by or for an institution in relation to a financial year in respect of which there is already a council-approved group budget, and which is either approved by the council of the institution as an amendment to or update of that group budget or regarded by the chief executive of that institution as forecasting or reflecting, more accurately overall than that group budget, that institution’s likely actual financial performance for that period; and includes any working papers upon which that financial forecast is based.

“Total Revenue” is the amount recorded as total revenue or total income in the audited annual or budgeted (as the case may be) statement of financial performance of an institution.

“risk criteria” means any of the criteria set out below.

An “unfavourable trend”, in respect of a particular financial ratio and an institution’s audited group financial statements for five consecutive financial years, exists if:

(a) the average of that ratio calculated with reference to the audited group financial statements for each of the third, fourth and fifth (in time) of those financial years is less favourable to that institution than the average of that ratio calculated with reference to the audited group financial statements for each of the second, third and fourth (in time) of those financial years; and

(b) the average of that ratio calculated with reference to the audited group financial statements for each of the second, third and fourth (in time) of those financial years is less favourable to that institution than the average of that ratio calculated with reference to the audited group financial statements for each of the first, second and third (in time) of those financial years.

Other words and phrases defined in the Education Act 1989 bear the same meaning in this notice.