Annual Report 2008
experts in water & atmosphere
2008 Annual Report of the National Institute of
Water & Atmospheric Research Ltd
NIWA at a glance
NIWA’s vision:
Leading science to ensure the sustainable use of
resources for New Zealand and the planet.
The key focuses of our expertise are:
■ atmosphere
■ climate
■ energy
■ freshwater
■ biodiversity
■ biosecurity
■ natural hazards ■ coasts
■ aquaculture
■ fisheries
■ oceans
■ Ma
–ori development
NIWA was established as a Crown Research Institute in 1992.
It operates as a stand-alone company with its own Board of
Directors and Executive Team, and is wholly owned by the Crown.
As at 30 June 2008, NIWA has 753 staff, revenue of $120 million,
and assets of $109 million.
www.niwa.co.nz
Taihoro Nukurangi
–
NIWA’s Maori name
Taihoro Nukurangi describes our work as
studying the waterways and the interface between the earth and
the sky.
Taihoro is the flow and movement of water (from
tai ‘coast, tide’,
and
horo which means ‘fast moving’).
Nukurangi is the interface between the sea and the sky (i.e., the
atmosphere).
Together, we have taken it to mean ‘where the waters meet the sky’.
Contents
Chair & Chief Executive’s report
2
Performance against SCI
8
Financial Summary
10
Sustainability 12
Capability Fund
24
Board 26
Report of the Directors
27
Financial Statements
35
Directory IBC
Cover: Peter Marriott, IPY-CAML
Inside front cover: Alan Blacklock, NIWA
experts in water & atmosphere
This is NIWA’s official Annual Report 2008. A companion volume, NIWA’s
Year in Review 2007– 2008, is available on-line at www.niwa.co.nz/pubs/ar
or request a hard copy through [email address]
Chair & CEO’s Report
Science supporting
sustainability
Many developed countries have realised that Planet Earth is not a never-ending fountain providing resources
to be exploited and consumed. As individuals, communities, companies, and countries, we need to bear in
mind that all the decisions we make with regard to our planet are interconnected.
At NIWA, we take the implications of this interconnectedness very seriously. Each day in New Zealand,
key decisions are made based on NIWA’s science, from resource consent conditions to catch limits attached
to fishing quota. We must provide the best evidence and analysis, develop solutions, communicate clearly, and
operate sustainably ourselves.
CEO John Morgan.
Chair Sue Suckling.
Science provides solutions
Decision-makers at all levels are seeking pragmatic, evidence-based advice from environmental experts.
Across the breadth of NIWA’s activities, our science provides both the high quality insights necessary
to underpin important decisions, and innovative solutions. They range from assisting Ma–ori business in
commercial seafood and high value aquaculture development, to working with the dairy industry to devise,
test, and communicate viable farm management practices which improve water quality. They include irrigation
modernisation, producing biogas from farm effluent, and sophisticated computer modelling to predict
the spread of aquatic pests. We are developing and refining tools for such important activities as hazard
forecasting, fisheries stock assessment, and sustainable wastewater treatment.
Looking at one example in a little more detail: climate change and its impacts are now well-established as an
important issue in boardrooms and policy forums around the world. People are looking to science for solutions.
As good international citizens, New Zealand should make a solid to climate change mitigation – even though
our contribution will be relatively small in the global context. In the area of climate change adaptation,
however, it’s quite another story. As decision-makers in New Zealand, we can make a crucial difference to our
economy and our society. We face choices with long-term ramifications: where to place bridges and highways
and coastal subdivisions, what power stations to build, how to deal with new invasive pests, how to manage
competing demands for water. Such decisions are worth many billions of dollars over the lifetime of the
investment. In some cases, poor decisions could cost lives as well as money.
This year, the contribution of NIWA scientists and engineers to the Ministry for the Environment guidance
manuals, helping local government adapt to climate change, is just one example of the real-world application
of scientific discovery that NIWA, straddling both research and science based consultancy, is able to provide.
NIWA has both outstanding people and unique infrastructure. It is this combination of talent and hardware that
enables us to be such a vital source of expertise for this country, our Pacific neighbours, and the wider world.
2
NIWA Annual Report 2008
Our performance
For the past five years, NIWA has maintained an excellent track record in financial and scientific outcomes.
Our performance in the year to 30 June 2008 is, once again, a tribute to everyone at NIWA.
NIWA’s revenue from its research, consulting, vessel operations, and other business activities (including
interest income) grew strongly again in the 2007– 08 financial year, reaching $120.7 million. The Group EBIT
was $13.66 million and net profit after tax $10.121 million, and average shareholders’ funds for the year were
$79.306 million. Capital expenditure for the year ended 30 June 2008 was $13.985 million – up more than
50% ($4.878 million) from the previous year.
Total revenue (includes interest income)
Operating profit (EBIT)
Dollars in millions
Dollars in millions
120
18
16
100
14
80
12
10
60
8
40
6
4
20
2
0
0
2004
2005
2006
2007
2008
2004
2005
2006
2007
2007
2008
Previous
Previous
Previous
Previous
Translated
NZ GAAP NZ GAAP NZ GAAP NZ GAAP
NIWA’s after-tax return on average shareholders’ equity was 12.8% for the year to 30 June 2008.
Comparisons with previous years are complicated by our move to the International Financial Reporting
Standards, and a revaluation of our land and most of our buildings, however a ‘translation’ of last year’s
figures for comparison purposes is shown in the table below.
As a research and science services company, NIWA’s performance is second to none. We continue to
meet all shareholder targets for financial performance, and scientifically, 2007– 08 has been one of our
most productive years.
Some highlights include:
s
knowledge to secure a sustainable future for the planet
s
our Bream Bay Aquaculture Park – paving the way for high value aquaculture
s
2008 2007 2007 2006 2005 2004
Translated Previous Previous Previous Previous
NZ GAAP
NZ GAAP
NZ GAAP
NZ GAAP
$’000 $’000 $’000 $’000 $’000 $’000
Total Revenue
(Includes
interest
income)
120,671 113,911 113,911 106,414 91,137 84,631
–
Public
Good
Science
55,536 53,418 53,418 50,374 43,729 39,591
–
Ministry
of
Fisheries
15,127 17,183 17,183 16,060 16,626 14,602
–
Commercial
and
Other
50,008 43,310 43,310 39,980 30,782 30,438
Net
profit
before
tax
14,335 14,279 15,843 15,706 9,654 7,036
Net
profit
after
tax
10,121 9,813
10,461
10,342 6,434 5,276
Capital
expenditure
13,985 9,107 9,107 8,480 7,348 8,389
Return
on
average
equity
(%) 12.8 14.1 22.6 24.4 13.5 10.7
The Group changed its accounting policies on 1 July 2006 to comply with New Zealand International Financial
reporting standards. The transition required the Statement of Financial Performance to be translated for the year
ended 30 June 2007 as shown above.
NIWA Annual Report 2008
3
Chair & CEO’s Report
s
property damage and save lives
s
address an enormous environmental challenge
s
pragmatic planning advice based on authoritative, peer-reviewed science
s
s
s
Global collaborations
Many of NIWA’s outcomes are made possible by working with other experts around the world. During
2007– 08, we were involved in over 970 collaborations, some of which are outlined below. We have close
relationships with the other Crown Research Institutes and all the New Zealand universities, which are rightly
regarded as leaders in their fields.
NIWA hosts the secretariat of the New Zealand Climate Change Centre, made up of all nine CRIs and two
universities (Victoria University of Wellington and the University of Canterbury).
The EnergyScape project, a collaboration involving NIWA, CRL Energy, GNS Science, Industrial Research Ltd,
and Scion, has transformed the disparate information on New Zealand’s energy system into a usable planning
tool, and has only been possible through the Energy Research Alliance, comprising these organisations.
NIWA has close working relationships with many iwi, hapu–, and other Ma–ori entities. Through Te Ku–waha
o Taihoro Nukurangi (our Ma–ori environmental research group), NIWA currently has over 85 working
relationships with Ma–ori entities.
In 2007– 08, NIWA had formal collaborative links with some 150 overseas institutions. New Zealand’s
International Polar Year voyage on RV
Tangaroa was a good example of global scientific cooperation. Our
‘polar partners’ were the Ministry of Fisheries, Land Information New Zealand, the Ministry of Foreign Affairs
& Trade, Antarctica New Zealand, Te Papa Tongarewa (National Museum of New Zealand), Victoria University
of Wellington, University of Waikato, University of Auckland, Università di Genova (Italy), the National Oceanic
and Atmospheric Administration (USA), Science Learning Hub, Cousteau Society, and Census of Antarctic
Marine Life.
To all our collaborators, at home and abroad – thank you.
-CAML
Peter Marriott, IPY
4
NIWA Annual Report 2008
A
Steve Le Gal, NIW
Strategic direction
NIWA must continue to make a difference for our clients and stakeholders, delivering expertise crucial for
the sustainability of New Zealand and the planet. To do this, NIWA’s strategy in 2007– 08 and for the future
revolves around three key themes:
s
s
s
Investing in our people
Whether in the lab or at the Board table, at the vessel helm or the reception desk, on North Cape sand dunes
or under the polar ice, NIWA’s success relies on the talent and dedication of all our people.
NIWA is a truly cosmopolitan workplace. We recruit many staff from overseas, and our Kiwis have often
undertaken PhD or post-doctorate research elsewhere. This brings a richness of thinking which we value
enormously. We want our scientists to regard their New Zealand experience at NIWA as a career highlight.
To this end, we have an active programme to create the best possible working environment at NIWA, ranging
from improving our leadership skills at all levels to improving the physical work spaces for staff. As an
example, our Auckland staff will shortly move to new premises and the design of the fitout was chosen for its
innovative approach to a science workplace.
While few of our staff are motivated solely by money, we are committed to offering remuneration packages
that are at least competitive in the general market. During the past year, we took the unprecedented step of
awarding all NIWA staff two across-the-board pay rises; one in July 2007 and one in December 2007. This,
coupled with expanding staff numbers, resulted in our salary costs rising by close to $6 million; however we
see this as an investment in attracting and retaining the best possible people in a world fighting for talent.
Again this year, our staff have garnered numerous national and international awards, including Dr Wendy
Nelson (Member of the New Zealand Order of Merit) and the dozen NIWA staff who contributed to the
Intergovernmental Panel on Climate Change (Nobel Peace Prize). Previous award recipients include Dr Clive
Howard-Williams (New Zealand Antarctic Medal), and Dr Janet Grieve (Officer of the New Zealand Order
of Merit).
Whilst on the subject of our people, we would like to acknowledge all Board members for their continuing
commitment to good governance of NIWA. Our thanks go to departing Board members John Hercus, John
Spencer, and Troy Newton for their contribution. During the year, Craig Ellison (now Deputy Chair) joined us
and has brought new perspectives and skills to the Board.
Investing in our infrastructure
In 2007– 08, we started a three-year $58 million capital investment programme, which will continue in
2008 – 09 and 2009 –10. We are confident that this new infrastructure and capability will improve science
outcomes for New Zealand, and generate additional revenue.
We are directing much of this investment towards three areas of unique infrastructure:
s
s
s
NIWA Annual Report 2008
5
Chair & CEO’s Report
s report
Our
environmental monitoring networks provide a rich source of data for good quality decisions.
To study changing atmospheric composition, for instance, we aim laser beams at the stratosphere, release
mini-laboratories of instruments tied to special high altitude balloons, collect air samples from ships and
hilltops, and download a vast stream of data from satellites revolving the Earth. NIWA’s Marine Benthic Biology
Collection, National Climate Database, Water Resources Archive Database, and New Zealand Freshwater Fish
Database are all officially defined as “heritage assets” – taonga of unique scientific importance.
This year, we opened up web-based access to our archived data free of charge. The response was excellent
chair & ceo’
with the number of registered users of the National Climate Database rising from 130 to over 4000.
We invested about $2.4 million of capital expenditure in extending the robustness and reach of our
environmental monitoring networks. This included upgrading some hardware, devising better software support
systems, and developing better measurement and telemetry systems.
NIWA’s Instrument Systems group and our Perth-based subsidiary Unidata, successfully brought new
Neon technology to market. The Neon system is one of the most advanced telemetry systems in the world.
Data is logged in the field and transmitted to a central Neon server via cellular network or satellite. Users
can view their data in ‘near real time’ via the internet, email, SMS (text message), or a range of other data
transfer mechanisms.
Our
research vessels provide a unique platform for science in this part of the world – from simple kayaks for
paddling through mangrove forests to RV
Tangaroa cracking a path through metre-thick ice in the Ross Sea.
Planned investment of $10 million on a new dynamic positioning system for
Tangaroa in 2008–09 and a new
purpose-built 14 m coastal vessel will bring New Zealand’s scientific research vessel capability up to the best
in the world.
In 2007– 08 we continued to invest significantly in our
information systems and technology and plan to
continue this throughout 2008 and 2009.
In addition, our scientific demands are fast heading towards saturating the capacity of our current Cray T3E
supercomputer. We are now working through a process to invest in a new state-of-the-art supercomputer,
initially with the power of about 11 000 average desktop PCs. That incredible number does not really convey
the ‘super’ aspect of a supercomputer, of course, because plugging that number of PCs together won’t give
you the computational power of a supercomputer. The keys are high bandwidth and low latency – exceptional
ability to process large volumes of data very quickly.
A/University of Canterbury
, NIW
im Hay
T
6
NIWA Annual Report 2008
-CAML
John Mitchell, IPY
Investing in sustainability
Like all companies which aim to be successful long-term, NIWA is focused on operating sustainably and on
reducing our carbon footprint. But we regard ourselves as having a greater imperative than most to show
leadership in this area.
We have already made the big gains, and we are applying more dedication and creative thinking to seek
further leaps in efficiency. NIWA’s biggest source of greenhouse gas emissions, for example, is diesel used by
our research vessels. In 2007– 08, we reduced cruising speeds by 1.5 knots resulting in a 25% reduction in
diesel consumption and reducing emissions by 1700 tonnes CO . Now, such moves have reached a threshold
2
that, if extended, would negatively impact on business viability. While continuing to seek opportunities for
improvement, we are also turning our attention to the sustainability of other aspects of our operations.
This year, despite a 4% increase in permanent full-time employees (FTEs), we reduced our solid waste
generation by 2% per FTE, and increased our total recycling of solid waste by 18% per FTE.
NIWA’s Annual Report this year sets a benchmark for our future quadruple bottom line reporting, using
guidelines and indicators from the international standard in sustainability reporting, the Global Reporting
Initiative (GRI G3), for performance against environmental, economic, labour, and social/cultural indicators.
Rising to the challenge
As New Zealand decision-makers consider the many challenges we face – in renewable energy, clean water
supply, the changing climate, bio-invasions, falling fish stocks, and so on – NIWA and its research partners will
be ready to respond with innovative research, scientific evidence, and sound advice.
We believe these very challenges could be the drivers that will continue to make New Zealand the ‘lucky
country’ – provided we make the right decisions about our natural resources, infrastructure, and communities.
NIWA is well positioned to play its part, and will continue to invest in the skills and resources to do so. In this
report we have presented some examples where NIWA is providing leading science to ensure the sustainable
use of natural resources for New Zealand and the planet.
Sue
Suckling
John
Morgan
Chair
Chief
Executive
NIWA Annual Report 2008
7
Performance against Statement of Corporate Intent
2007– 08
2007– 08
2006– 07
Financial Performance
Actual
Target
Actual
Measures
Revenue (total including interest income)
$120.7M
$115.8M
$113.9M
Current
ratio
1.5 1.2 1.3
In 2007–08, NIWA continues to fulfil its financial obligations as
Quick
ratio
2.1 1.2 1.8
specified in section 5 of the Crown Research Institutes Act (1992).
Return on equity
12.8%
11.1%
14.1%
These are:
Return on assets
12.5%
12.3%
13.9%
a) to operate in a financially responsible manner so that sufficient
EBIT
margin
11.3% 11.8% 12.3%
operating funds are generated to maintain financial viability
All figures in this table comply with the New Zealand International Financial Reporting Standards.
b) to provide an adequate rate of return on shareholders’ funds
NIWA adopted these standards as at 1 July 2006. The 2006 –07 figures shown here have been
‘translated’ to meet this standard, from their original reporting according to the Generally Accepted
c) to operate as a going concern.
Accounting Practice in New Zealand.
No client survey was conducted in 2007– 08. One is planned
Non-Financial
for 2008 – 09.
The number of representations on international committees
Performance Measures
(66) was substantially under the target (110). Such positions are
NIWA operates according to the principles set out in section 5
dependent on staff availability and the decisions of international
of the Act, which require:
scientific bodies.
a) that research undertaken by NIWA should be undertaken
NIWA has numerous significant interactions with companies and
for the benefit of New Zealand
industry boards. We have worked with 237 significant clients in
b) that NIWA should pursue excellence in all its activities
2007– 08. NIWA will report more detailed data in its forthcoming
quarterly report to Shareholding Ministers.
c) that in carrying out its activities, NIWA should comply with
any applicable ethical standards
Environmental sustainability
d) that NIWA should promote and facilitate the application of
the results of research and technological developments
Staff uptake of video conferencing facilities, available at all NIWA
sites servicing 20 or more people, has been three times as high
e) that NIWA should be a good employer
as anticipated.
f) that NIWA should be an organisation that exhibits a sense
Work on the efficiency of NIWA buildings this year has
of social responsibility by having regard to the interests of
concentrated on identifying building standards that improve both
the community in which it operates and by endeavouring
energy use and staff working conditions. This was considered a
to accommodate or encourage those interests when able
prerequisite for meeting the building efficiency target, which will
to do so.
be addressed in 2008 –2009.
In most cases, NIWA met its non-financial performance
NIWA has achieved its target of 10% reduction in solid
targets for 2007– 08. The commentary below focuses on major
waste compared with 2003– 04. In that year, NIWA produced
variances where NIWA either significantly exceeded or did not
124 kg/FTE solid waste (2007– 08: 94 kg/FTE) and recycled
meet its targets.
37 kg/FTE (2007– 08: 56 kg/FTE).
Science outputs and collaboration
Good employer
From July 2007, web-based access to archived data from NIWA’s
In 2007– 08, NIWA upgraded its staff performance and
nationally significant databases has been free. As a result, NIWA
development review format to place more emphasis on individual
greatly exceeded its targets for requests for information from the
development plans. Accordingly, an audit of the number of staff
two largest databases:
with such plans will be carried out following the annual reviews
s
(July–August), and will be collated in September 2008.
more than last year
s
Education
last year.
The number of external training courses run in 2007– 08 (13)
Funding for this move came from the Foundation for Research,
did not meet the target (20), and was lower than the actual
Science and Technology, and the NIWA Capability Fund. Many
number for the previous year (17). This was due to staff changes
organisations around the country contribute their data to these
and availability.
national archives.
NIWA places considerable emphasis on our scientists presenting
their work to end-users and peers. These figures are reported by
calendar year, and our output for 2007 (1028) was slightly ahead
of that in 2006 (966).
NIWA achieved four times its target for the value of
international consultancy contracts this year. At $10.25 million,
this is a record result for us, driven mainly by new large contracts
in the Middle East.
8
NIWA Annual Report 2008
Non-Financial
Non-Financial
Performance
Performance
2007–08
2007– 08
2006 – 07
2007–08
2007– 08
2006 – 07
Actual
Target
Actual
Actual
Target
Actual
Corporate commitment
Energy consumption
7.703 kW/FTE
No increase
7.677 kW/FTE
Board reporting and
0.4%
0.5% revenue
–
per FTE
(excluding Bream
in electricity
(excluding
communication of
directed toward
Bay Aquaculture
consumption
Bream Bay
commitment, sustainability
sustainability
Park & Kupe
compared with
Aquaculture
one of core values
initiatives
supercomputer)
2006–07
Park & Kupe
supercomputer)
External sustainability advice/services
Change in recycling and solid
56kg/FTE for
10% reduction in
58kg/FTE for
Requests for information
waste production
paper recycling.
solid waste and
paper recycling
from our nationally significant
94kg/FTE of solid
paper usage by 2008
databases and collections
waste
(cf. 2003 – 04)
– National Climate Database
267 000
70 000
21 740
– Water Resources Archive
88 000
80 000
55 920
Number of staff using
Wellington region:
50% by 2008
– NZ Freshwater Fish Database
1550
1500
1457
alternative modes of transport 2
60% of staff travelling
– Marine invertebrate collection
to work use sustainable
and database
>150
150
Not available
means more than 3
days a week
Science outputs and collaboration (including international connectedness)
Commissioned reports to users 1
495 550 479
Number of staff who
59.2% of staff agree
70% by 2009
believe sustainability is
or strongly agree
Presentations on technical
core to NIWA ethos 2
information and research results 1 1 028
450
966
Social and cultural sustainability
Publications on technical
Total staff FTEs (permanent and
information and research results 1
fixed-term, including subsidiaries) 726
720
648
– Papers in trade journals,
magazines, series, or books
217
200
346
Staff composition
501 Researchers
473 Researchers
481 Researchers
– Conference papers and
(permanent staff only)
41 Research Support 46 Research Support 43 Research
abstracts (submitted)
392
410
190
110 General Support
110 General Support
Support
– Research
monographs
28 Management
26 Management
101 General
or books
86
115
114
15 Post-docs
20 Post-docs
Support
–
Popular
books/articles
217 200
11
25 Management
– Web-based
publications 2
35
20
17 Post-docs
Peer-reviewed articles 1 315
320
291
Number of community activities 2 59
No target set
Keynote and plenary
Number of field days per year 2
3
No target set
presentations 1 31 15 13
Number of noho marae
Client profile (by revenue
See pp. 10–11
No target set
attendees 2 57
60
& national centre) 2
of this Annual
Report for graphs
Good employer
of revenue against
Achievement of a desirable
75.8% of staff intend 70% of staff are
client category &
work-life balance 2
to continue working
positive about
national centre
for NIWA for at least
working for NIWA
the next 12 months
and see themselves
Client feedback 2
No survey was
50% of clients
(no three-year data
working for NIWA in
completed in
observe an
available)
three years’ time
2007– 08
improvement in
client relations with
Value of financial benefits
NIWA based on
received by staff 2
$2.8M
No target set
survey of industries
Staff turnover
9.3%
<10%
13%
Number of representations on
– Key staff 2 1.2%
<5%
international committees
66
110
96
Number of new jobs created
Number of collaborative formal
– Main city centre 2 32
5
links with overseas organisations 2 150
No target set
– Rural areas
2
5
4
Number of NIWA-funded
159 international visits;
Staff development
international visits & visiting
45 visiting scientists
150
10
– Staff with personal
scientists
development plans
Data not yet available 90%
55%
Number/value of international
– Staff days allocated to
consultancy contracts 2 $10.2M
$2.7M
personal
development
502 400 358
Number of significant
Lost time from injuries/accidents 0.012%
<0.05%
0.04%
interactions with companies and
Number of incident/
industry boards in NIWA’s key
near miss reports 2
140
No target set
target sectors
– percentage of companies
Education
with which NIWA had
Number of post-docs funded,
meaningful interactions
Data to be
70%
teaching fellowships awarded, PhD
– percentage of companies
reported in
and MSc students supervised,
with which NIWA was
quarterly report
scholarships awarded
involved in decision-making
30%
– Teacher fellowships
3
No target set
3
– percentage of companies
providing revenue
70%
– PhD and MSc students
– number of positions on
supervised 51 60 62
industry boards
4
–
Post-docs
funded
27 20 22
Environmental sustainability
Number of external training
courses run
13
20
17
Total greenhouse gas emissions
9756 tonnes of CO
Hold total emissions
Equivalent of
2
(vehicle fleet, gas, electricity)
(including Bream Bay at 2005 – 06 levels
9961 tonnes of
Innovation
Aquaculture Park,
(9580 tonnes of CO , CO (including
2
2
Patents granted
Kupe supercomputer, including vessels)
Bream Bay
– In New Zealand
0
1
1
& vessels)
Aquaculture
–
Overseas 0 1 1
Park, Kupe
supercomputer,
Licensing arrangements
& vessels)
entered
into 1 3 10
Total GHG emissions/FTE
6.6 tonnes/FTE
Less than 2006 – 07
6.19 tonnes/FTE
New or improved products,
levels by 2010
processes, and services
19
20
4
Hours of video conference 2
650 hours per year
200 hours per year
Joint ventures or formal
associations 6 6 6
Energy efficiency (kWh/m2) of
Not available
Improvement in
Spin-out companies formed 2 0
0
research buildings, compared
building efficiency of
with best-in-class standard 2
5 kWh/m2 by 2010
Spin-off companies formed 2 0
0
1 Measured for a calendar year.
2 New category for 2007– 08.
NIWA Annual Report 2008
9
Financial Summary
Revenue
Highlights
Revenue growth
s
NIWA’s revenue continues to grow strongly. In 2007– 08, NIWA’s
s
total revenue, including interest income, was $120.7 million (2007:
$113.9 million), against budgeted revenue of $115.8 million.
s
equity of 12.8%
Total revenue (includes interest income)
s
Dollars in millions
120
100
Composition of NIWA Group
80
60
Parent Company
40
National Institute of Water and Atmospheric Research Ltd (NIWA).
20
Sometimes referred to as NIWA Science.
0
Subsidiaries
2004
2005
2006
2007
2008
Principal
activities Ownership
Revenue sources
&
voting
Public good science and technology funding represented 46%
interest
of NIWA’s revenue in 2007–08. This consisted of contestable
NIWA Vessel
Vessel charters for scientific research;
100
research funding from the Foundation for Research, Science and
Management Ltd
owns RV
Tangaroa, RV
Kaharoa, &
Technology (38%; $45.5 million) and capability funding from the
survey launch
Pelorus; operates marine
Ministry of Research, Science and Technology (8%; $10 million).
mechanical & electrical workshops for
maintenance on the NIWA fleet
NIWA’s second largest single source of revenue was contestable
fisheries research contracts from the Ministry of Fisheries (13%;
NIWA Natural
Commercialisation of NIWA products
100
Solutions Ltd
$15.1 million).
The remainder (41%; $50 million) largely consisted of commercial
NIWA Australia
Scientific research & consultancy
100
consultancy work.
Pty Ltd
services, Australia
NIWA Environmental
Not-for-profit scientific research &
100
Research Institute
consultancy services, USA
Proportion of revenue by source, 2007–08
NIWA (USA),
Scientific research & consultancy
100
Other sales 14%
Incorporated
services, USA
Foundation
for Research,
Private sector 8%
Science and
Unidata Pty Ltd
Supplier of environmental technology
80
Local Govt 6%
Technology 38%
products
Central Govt 12%
Capability
EcoConnect Ltd
Non-trading shell company; intended to
100
Other CRIs 1%
funding 8%
deliver environmental forecasting services
Ministry of Fisheries 13%
Joint ventures
The Group has a 50% participating interest in Riskscape NZ, an
Revenue showing sources
unincorporated joint venture of equal interests with Geological Risk
Dollars in millions
Limited (a wholly owned subsidiary of GNS Science). The joint
120
venture is funded by the Foundation for Research, Science and
100
Technology to develop the Regional RiskScape Model, a support
80
tool for decision-makers which simulates regional natural hazards
60
and produces estimates of damage in dollars and likely casualties.
40
20
0
Understanding the numbers
2004
2005
2006
2007
2007
2008
Previous
Previous
Previous
Previous
Translated
All figures in this Financial Summary relate to the NIWA Group
NZ GAAP NZ GAAP NZ GAAP NZ GAAP
as a whole unless otherwise stated.
Public Good Science
Ministry of Fisheries
Commercial and other
On 1 July 2006, the Group changed its accounting policies to
comply with the New Zealand International Financial Reporting
Standards (NZ IFRS). Previously we used Generally Accepted
Over the past five years, revenue from Ministry of Fisheries
Accounting Practice in New Zealand (NZ GAAP). For the
contracts has been relatively static. NIWA received a substantial
purposes of comparison, where the change in accounting policy
boost in Public Good Science funding in 2005 – 06, partly
affects the numbers, we show the figures for 2006–07 both as
related the introduction of the Capability Fund which is
originally reported (NZ GAAP) and ‘translated’ according to the
calculated on a different basis from the previous Non-Specific
new standards.
Output Funding. Revenue in this category has grown slightly
since. In 2007– 08, commercial consultancy work was the largest
source of revenue growth.
10
NIWA Annual Report 2008
Revenue by national centres /area of operations, 2007– 08
Net surplus
Product sales 4%
Aquaculture &
In 2007– 08, NIWA exceeded its business plan objectives, as set
Biotechnology 6%
Vessel 7%
Atmosphere 6%
out in the Statement of Corporate Intent, with a net surplus (after
Oceans 9%
Biodiversity &
tax) of $10.1 million (2007: $9.8 million) against a budgeted net
Ma–ori development 2%
Biosecurity 11%
surplus of $9.5 million.
International 4%
Hazards 4%
Freshwater 12%
NIWA’s flat profit despite record high revenue reflects the external
Coasts 8%
environment of rising costs, and growth in both personnel and
Energy 2%
Climate 3%
capital expenditure.
Fisheries 14%
Environmental
information 8%
Net profit after tax
International revenue
Dollars in millions
12
In 2007– 08, NIWA achieved record international revenue of
$10.25 million, mainly driven by new large contracts in the
10
Middle East.
8
6
Expenditure
4
2
Personnel
0
2004
2005
2006
2007
2007
2008
Personnel costs rose by $6 million this year. This reflects:
Previous
Previous
Previous
Previous
Translated
NZ GAAP NZ GAAP NZ GAAP NZ GAAP
s
s
Dividend
Payroll benefits
Capital expenditure
In 2007– 08, dividend payments of $186,750 were made to the
Dollars in millions
Dollars in millions
Government of New Zealand (the Crown), as the sole shareholder.
60
15
50
10
40
5
Profitability
2005
2006
2007
2007
2008
2005
2006
2007
2007
2008
Previous
Previous
Previous Translated
Previous
Previous
Previous Translated
NZ GAAP NZ GAAP NZ GAAP
NZ GAAP NZ GAAP NZ GAAP
NIWA continues to be a profitable company. The Group’s policy
is to maintain a strong capital base to retain investor and creditor
confidence, and sustain future development. The Board reviews
Capital
capital management and allocation policies regularly.
Many of NIWA’s core science areas are capital intensive and
we must invest heavily in new equipment to keep our science
Return on average equity after tax
leading-edge and deliver the expected outcomes for New Zealand.
The Shareholding Ministers set 9% as the targeted return on
In recent years, NIWA’s capital investment has been roughly
equity. They have indicated that the target is to be delivered as a
$9 million per year. In 2007–08, however, NIWA embarked on a
long-term average due to the potential cyclical profitability that can
three-year $58 million capital expenditure programme to:
be involved in research outputs.
s
The Group has historically met the targeted return on equity each
(e.g., dynamic positioning system for RV
Tangaroa)
year. The Board chose to restate the value of the Group’s land,
s
and some buildings, on transition to the new financial reporting
standards. Formerly they were on our books at their original
s
cost; now they are shown at their value as at 1 July 2006. This
NIWA’s science
resulted in a decrease in return on equity from 22.6% to 14.1% in
s
2006–07. The return on average equity for 2007–08 was 12.8%.
s
Total asset base
Liquidity
Average shareholders’ equity at 30 June 2008 totalled
$79.3 million (2007: $69.5 million). Total average assets were
NIWA continues to have healthy liquidity, with greater assets
$109.5 million at 30 June 2008 (2007: $100.9 million).
than liabilities.
2006 – 07
2007– 08
Current ratio
1.3
1.5
Quick ratio
1.8
2.1
The audited financial statements of the National Institute of Water & Atmospheric Research Ltd
and Group for the financial year ended 30 June 2008 can be found on pp. 27– 64 of NIWA’s
Annual Report 2008. This Financial Summary is not part of NIWA’s audited accounts.
NIWA Annual Report 2008
11
Sustainability – Environmental
The sustainability section of this Annual Report sets the
Strategic initiatives
benchmark for NIWA’s future quadruple bottom line reporting,
using guidelines and indicators from the international standard in
Initiative Target
sustainability reporting, the Global Reporting Initiative (GRI G3),
Continuing to reduce NIWA’s environmental footprint in our own operations
for performance against the GRI environmental, economic, labour,
and social/cultural indicators.
Successfully establish baseline data for
Install energy monitoring systems at major sites
setting future targets
with high energy consumption
Increase investment of NIWA revenue
Invest up to 0.5% of revenue by 2009
into sustainability initiatives and energy
NIWA contributes to the long-term sustainability of New Zealand
demonstration projects, e.g., more efficient
primarily by undertaking science that enables informed decisions
heating and alternative energy systems
about New Zealand’s natural resources. In conducting its science
Review ways to further cut consumption
Continue to research and test biofuel technology.
and other operations, NIWA has to be able to measure and mitigate
or improve efficiency of NIWA vessels,
Current testing includes biofuels from pig waste at
its own impact on the environment.
including assessing biofuels
NIWA Hamilton
Implement guidelines for new buildings
Building guidelines in place by 2009 and
Key issues and challenges
and renovations to achieve at least 4 star
electricity reduction target of 5kWh/m2 by 2010
Green Star rating; continue to encourage
First and foremost, with many initiatives already undertaken to
behavioural changes to help reduce
address our environmental impacts, bigger leaps in efficiency
electricity consumption
will become harder to make. For example, reductions in diesel
Encourage staff to use more
70% of staff using ‘alternative’ modes
consumption by our marine research vessels have reached a
environmentally friendly transport
threshold that, if extended, would negatively impact business
for commuting
viability. However, NIWA is taking action.
Enhance mitigation initiatives for
Develop formal mitigation strategy. In 2008,
overseas travel
NIWA paid for 700 and planted over 400 trees
to offset 2007 travel
Measure and track staff opinions on the
70% of staff believe sustainability is core to
Initiative. NIWA’s biggest source of greenhouse gas
place of sustainability in NIWA’s work
NIWA’s ethos
(GHG) emissions is diesel used by marine research vessels.
Increase use of video conferencing and
300 hours in 2008 – 09
We continuously seek to reduce diesel consumption; in
reduce travel needs
2007– 08 we reduced cruising speeds of our vessels by
Implement projects aimed at increasing
Separate budgets for ICT by 2009; centralised
1.5 knots, resulting in a 25% reduction in diesel consumption,
the centralisation of processes and
records and registers by 2010
and reducing our GHG emissions by 1700 tonnes CO .
2
Information and Communication
Technology (ICT) infrastructure to help
reduce electricity and petrol consumption
Diesel consumption across NIWA, 2007– 08
across NIWA’s operations
Balance of NIWA
operations 4%
Key performance indicators
NIWA vessels 96%
Indicator Target
Total GHG emissions
Reduce total emissions to below 2006 – 07 levels by
2010 and reduce emissions for vessels to 2006 – 07
levels by 2010
Total GHG emissions
Reduce to 2006 – 07 levels by 2010 and reduce by a
per full-time employee
further 10% on 2006 – 07 levels by 2012
Secondary issues affecting our environmental performance
include:
Energy consumption
Reduce by 10% of 2006 – 07 consumption by 2012
per full-time employee
s
business while reducing our environmental impacts. For
Solid waste generation
Reduce solid waste generated by 10% of 2003 – 04 levels
by 2009
instance, international travel is essential to stay at the forefront
of our scientific fields, but increases our GHG emissions.
s
growth. While we are continuously seeking ways to increase
efficiencies, employing more people and carrying out more
work directly translates to higher energy consumption.
12
NIWA Annual Report 2008
Stakeholder interview
GRI indicators and results
Barry Biggs, General Manager, Operations
Total NIWA solid waste and recycling
Solid waste generated
What is the scope of your role?
2006 – 07
Until July 2008, I was General
2007– 08
Manager, Environmental Information and
Solid waste recycled
International. A big part of my role was to
2006 – 07
develop new and more robust approaches
2007– 08
Weight (kg)
to monitoring New Zealand’s climate and
10 000
20 000
30 000
40 000
50 000
60 000
70 000
water resources to enhance environmental
planning and sustainable resource use/management throughout
Despite a 4% increase in permanent full-time employees (FTEs)
New Zealand.
between 2006 – 07 and 2007– 08, we reduced our solid waste
I was also responsible for NIWA’s international programmes, which
generation by 2% per FTE, and increased our total recycling of
includes helping Pacific Island countries meet their sustainable
solid waste by 18% per FTE. The key initiatives NIWA employed
development objectives under a changing climate.
were:
Now, as General Manager, Operations, I lead NIWA’s sustainable
s
development strategy, including continuous improvement
to reduce or eliminate packaging materials
processes in our operations and identifying opportunities to
s
improve sustainable development initiatives for our clients.
s
more recycling bins
What are the main focus areas for NIWA’s environmental
s
performance?
processes and benefits.
NIWA’s involvement in sustainability operates on two levels:
1. Developing tools and systems to enhance sustainability
Solid waste generated and recycled during 2007– 08
of New Zealand’s productive sector, including farming
at NIWA’s main sites
practices and fisheries, whilst maintaining and enhancing
the environment. This is our most important contribution
Auckland
to sustainability.
Solid waste
2. Adopting more sustainable business practices for our own
Hamilton
Recycling
organisation. It is important for us to be exemplary, and our
main challenges currently are:
Wellington
s
Christchurch
research vessels
Weight (kg)
s
5 000
10 000
15 000
20 000
25 000
30 000
35 000
s
staff business travel
The figures provided for this performance indicator are the best measurements available
for NIWA’s solid waste across our major sites, but not including NIWA vessels.
s
paper, and IT equipment.
NIWA Wellington is our largest site with 274 staff (permanent and
fixed-term), as at 30 June 2008, followed by Hamilton with 154
What are your goals for the next 12–24 months?
and Christchurch 139. Waste generated and waste recycled reflect
I would like to promote greater understanding of how our
these staff numbers and related activity, except for NIWA Hamilton,
science-based tools are fundamental to the sustainability and
where a recent waste audit and subsequent recycling initiatives
development goals of society.
have increased recycling.
Operationally, we must integrate the demands for improved
economic, environmental, social, and cultural sustainability
whilst maintaining a viable science business that meets
shareholder expectations. For example, our vessels produce
most of our GHG emissions as they carry out research.
There are only a limited number of further changes we can
make whilst maintaining client services.
I think that there is a lot that can be done at the local staff level,
particularly in carbon emission reduction. It is important that
we make use of initiatives by industry, councils, and community
groups at the many places where we operate to improve such
general tasks as recycling organic waste, batteries, paper, and IT
equipment. These are among the issues that I will be pursuing.
NIWA Annual Report 2008
13
Sustainability – Environmental (continued)
NIWA’s GHG emissions profile by source, 2007– 08
NIWA’s total energy consumption by source
Electricity
Source
Tonnes of CO e
2
2006 – 07
6 143 131 kWH
Diesel incl. NIWA vessels
5790
2007– 08
6 724 844 kWh
Electricity 3026
Petrol
Air travel
465
2006 – 07
138 635 litres
Petrol 317
2007– 08
139 097 litres
Gas 158
Diesel including NIWA vessels
Total 9756
2006 – 07
2 461 492 litres
2007– 08
2 228 903 litres
Gas (Wellington only)
2006 – 07
2 842 674 MJ
Air travel 5%
2007– 08
3 022 934 MJ
Diesel including
Includes taxis but does not include air travel and rental car usage.
Electricity 31%
NIWA vessels 59%
Gas 2%
Petrol 3%
While we have been able to reduce diesel consumption,
a four percent growth in permanent full-time employees
in 2007– 08 – and associated work activity – saw small
increases in the consumption of electricity, petrol, and gas.
Diesel consumption makes up the largest part of NIWA’s GHG
In the coming year, NIWA will continue to seek to reduce
emissions. Of this, 96% is attributed to NIWA Vessels’ operations
energy consumption across the board.
and 4% to the rest of NIWA’s land-based operations. While air
travel is a key requirement for the professional development
The increases in energy consumption shown above
of NIWA scientists and international collaboration, it makes up
translated to negligible increases in GHG emissions on a
only 5% of total emissions. Nevertheless NIWA is developing a
per FTE basis. The significant change was the reduction in
mitigation strategy for this.
GHG emissions from our largest source, diesel.
Gas usage is limited to heating at NIWA’s Wellington site. Petrol
usage is limited to NIWA staff car use in daily operations.
GHG emissions (in tonnes of CO e) per full-time employee
2
Emissions from electricity consumption provide a good opportunity
Electricity
2006 – 07
4.78
for emissions reduction through the implementation of Green Star
2007– 08
4.78
building guidelines as well as evolving staff behaviour. NIWA is
installing monitoring systems at sites with high energy consumption
Gas
while investing more resources into research and development of
2006 – 07
0.25
2007– 08
0.25
alternative energy systems.
Petrol
2006 – 07
0.5
2007– 08
0.5
Statement on NIWA’s environmental mandate as a
Diesel including NIWA vessels
New Zealand Crown Research Institute (CRI)
2006 – 07
10.11
2007– 08
9.15
NIWA aspires to help maintain the health of the environment
and minimise our operational impacts and, through our
Air travel
science, help New Zealanders make decisions and take
2006 – 07
0.73
actions that promote the sustainable use of our natural
2007– 08
0.73
resources. In addition, NIWA:
s
monitors processes, and sets improvement targets with the
goal of attaining or exceeding them
s
mandate to minimise our impacts on the environment
s
and energy saving initiatives, practices, and behaviours in
our operations
s
our operations.
14
NIWA Annual Report 2008
Sustainability – Economic
NIWA aims to deliver and communicate expert science that critically informs decision making in the New Zealand economy. As a Crown
Research Institute (CRI) operating in a competitive environment, NIWA must balance commercial imperatives with its sustainability
aspirations. To be a positive contributor to New Zealand’s economy, our own viability – as a business and science organisation – is
fundamental. We are focused on improving our operational, science delivery, and financial performance as the basis for future success.
NIWA intends to continue providing the best possible science for all of our customers. The continued increase in our revenue
demonstrates an ongoing growth in demand for the research, products, and services that we provide. It also shows NIWA’s ability to
respond to new opportunities and issues facing New Zealand.
Stakeholder interview
What are the key challenges?
Something we recognise is that the science sector is not too
John Morgan, Chief Executive
good at promoting itself. We need to better communicate our
science. NIWA’s duty is to be experts and confidently present
How do you describe NIWA’s economic
facts. This can be a challenge in a media environment where
impact?
personal opinions and controversy often gain profile.
NIWA’s economic impact is considerable.
Science has been undervalued for the past 20 years. But there
Economic decisions are being made
is a shift; there is an increasing demand for, and investment in,
everyday as a result of NIWA’s science
scientists and good science. This does present challenges in a
– from fishing quotas, biosecurity and
tight and extremely competitive job market.
freshwater management guidelines, to
For NIWA, economic sustainability is a holistic view. It is about
planning for roading infrastructure.
continuous capability building; when some projects are 10 years
One of NIWA’s key roles is climate science and environmental
or longer, we need to ensure we are still here delivering to our
forecasting – in a land-based production economy this is critical.
mandate in the long term. We need to continue to make good
Not to mention the requirements of tourism, the energy sector,
financial and commercial decisions and correctly prioritise our
the insurance industry, and local and central government.
limited resources.
To meet its obligations of economic sustainability, NIWA needs
Is sustainability a fad?
to generate sufficient operating surpluses to enable continued
No. But even if you do think sustainability is a fad, it is a global
growth, and investment in capital expenditure and areas that
one. New Zealand sells to the world, and as long as those markets
extend our current base beyond fee-for-service.
consider a clean green image important, maintaining that image
here is critical. NIWA has an important role to play in ensuring
And key opportunities?
New Zealanders get comfortable with facts: yes, we do have
The opportunities are enormous. Today there is high pressure for
a water supply issue; yes we do have an energy supply issue.
science to deliver answers for society and industries, and there is
With that national consciousness, we can ensure we do not
a correspondingly high demand for human resources in our field.
become complacent about improved sustainability, as individuals,
as a society, and as an economy. I wish the facts were wrong.
In a globalised job market, attraction and retention is always
But they are stark and real – and they demand that we take action.
going to be a challenge. We are fortunate that New Zealand
offers an attractive lifestyle and interesting work. We need to
How should New Zealanders approach climate change?
ensure that a New Zealand-based job with NIWA can be a
professional career highlight.
What we should be talking about is how we – as an economy and
a society – will adapt to future changes, not debating whether or
As Chief Executive, a key challenge is creating the environment
not it’s real.
and work culture that allows this to happen.
The fact that most NIWA staff cite ‘making a difference’ as their
In the big picture, who is NIWA undertaking its science for?
key reason for being here reflects what I enjoy most about running
an organisation like NIWA – we have so many bright people who
The world’s citizens. The species of Earth. New Zealanders.
are passionate about finding solutions.
Our clients are in various industry segments, but also, critically,
those who make decisions on behalf of New Zealanders, such as
local councils and central government. Just as important, we want
Key issues and challenges
our knowledge to create communities that are better prepared
NIWA has had three exceptional years. The challenge for NIWA is
for a constantly changing environment. Droughts, for example:
to maintain a good level of growth, profitability, and shareholder
they may be less dramatic and less newsworthy than floods, but
return in an economic environment defined by increasing
they can have enormous economic impacts. Droughts affect
competition, a tight labour market, and rising costs. In this regard,
productivity and economic growth in a much more insidious way.
the critical focus areas for NIWA in the next 12–24 months include:
Treasury reported this year that the 1998 drought likely triggered
s
or precipitated the onset of the recession in the late 1990s.
research outcomes into new products, services, and industries
How well communities and industries are prepared for such
for New Zealand
events will determine how well they survive and push through it.
The value of NIWA’s science is in delivering knowledge for better
s
decisions, taken at the right time.
extend beyond straight fee-for-service
s
NIWA Annual Report 2008
15
Sustainability – Economic (continued)
Strategic initiatives
Statement on NIWA’s economic mandate as
Initiative Target
a New Zealand CRI
Continue to increase and enhance positive contribution to the New Zealand economy
NIWA aspires to provide science that supports the sustainable
Roll-out of sustainable purchasing and
NIWA has 2600 active suppliers and processes,
management of New Zealand’s natural resources and
ethical supply policy
generating approximately 23 000 invoices p.a.
promotes innovation and economic success. We adopt
NIWA to reduce both by 50%. Preferred suppliers
financial strategies that ensure we continuously invest in our
to be identified
people, facilities, and equipment to enhance our scientific
Maintain financial and business momentum
capabilities. In addition, NIWA aims to:
s
Setting clear targets for financial
Refer indicators opposite
performance as well as key
funding environment
science outputs
s
Increase commercialisation of NIWA science and research in the New Zealand economy
opportunity to enhance the science and delivery or to
optimise returns
Setting specific targets for licensing
Refer indicators opposite
arrangement and patents granted
s
enterprise in a way that maximises economic benefits to
Expand growth and investment opportunities
New Zealanders.
Setting specific targets for joint
Refer indicators opposite
Economic sustainability addresses our effect on the economic
ventures and formal associations with
circumstances of our stakeholders and their economic
other agencies and industries
systems. As a CRI, NIWA is required to be financially viable
Setting specific targets for new or
Refer indicators opposite
and undertake research for the benefit of New Zealand.
improved products, processes or services
Economic sustainability is not just about attaining economic
Better meet client needs
growth year on year. It is also about delivering improvements
to our community and the environment, as well as satisfying
Implement greater use of the project
Identify and pilot a new enterprise project
customer needs.
management system to better track
management system in NIWA and provide staff
client requirements
with appropriate training to use it effectively to
manage opportunities, keep track of resources,
and track progress on projects. By June 2010
Influencing the supply chain
NIWA is developing a sustainable purchasing and ethical supply
policy to align our own policy with best practice. The policy’s
general guidelines and criteria will include:
s
A Strategic Procurement & Asset Manager has been employed
to realign our regional spend into national spend with preferred
suppliers, and to provide more centralised management of assets.
Customers and clients
As a Crown-owned operation, NIWA has a nominal nine per cent
return on equity target to meet the shareholders’ expectations over
the long term.
NIWA continues to meet these targets while retaining the
capability to reinvest its profit into improving infrastructure,
which includes sustainable development initiatives or enhancing
sustainable practices (this includes developing skills/tools for
future financial viability).
Our direct customers are those who fund our science and
research. The New Zealand Government is our largest
customer, but we also conduct research for, and provide
advice and information to, many others ranging from
multinational corporations to local commercial fishing
operators to schools. We consider the New Zealand public
to be our most important customer.
16
NIWA Annual Report 2008
Key performance indicators
GRI indicators and results
Financial
Performance 2007– 08
Target in 2009
Revenue, 2007– 08
Total revenue
Dollars in millions
(Includes interest income)
$120,671,000
$125,709,000
140
Operating results:
120
Operating expenses
$106,291,000
$115,067,000
100
EBIT & dividend received
$13,656,000
$10,642,000
80
Profit before income tax
$14,335,000
$10,529,000
60
Profit after tax
$10,121,000
$7,670,000
40
Average total assets
$109,481,000
$126,243,000
Average equity (shareholders’ funds)
$79,306,000
$87,391,000
20
Adjusted average total assets
$82,244,000
$89,006,000
0
Adjusted average equity
$56,444,000
$64,529,000
Total
FRST
Capability Ministry of
Other
Central
Local
Private
Other
revenue
funding
Fisheries
CRIs
Govt
Govt
sector
sales
Capital expenditure,
incl. capital committed
$13,985,000
$19,224,000
Target
Outcome
Liquidity:
Sales to international clients are included under ‘Other sales’. In 2007– 08 this totalled
Current ratio
1.5
1.21
$NZ10,251,000
Quick ratio (a.k.a. acid test)
2.1
1.59
Profitability:
Return on equity
12.8%
8.8%
Operating surplus and return on equity
Adjusted return on equity 1 17.9%
11.9%
Operating surplus before tax
Percentage of NIWA revenue directed
towards sustainability initiatives 0.4% 0.5%
2006 – 07 $14,279,000
2007– 08 $14,335,000
Science output
Performance 2007– 08
Target in 2009
Return on average equity (%)
Commissioned reports2 495
500
Presentations on technical
2006 – 07 14.1%
information and research results2 1028 500
2007– 08 12.8%
Peer reviewed articles2 315
300
Keynote and plenary presentations2 31
15
External requests for information
Expenditure
from NIWA’s nationally significant
databases and collections
Cost of all goods, materials, and services
National Climate Database
267 000
25 000
2006 – 07 $47,712,000
Water Resources Archive
88 000
60 000
2007– 08 $54,859,000
NZ Freshwater Fish Database
1550
1500
Marine invertebrate collection
and database
more than 150
150
Total payroll and benefits
Collaboration
2006 – 07 $48,571,000
Representations on international committees
66
110
2007– 08 $54,702,000
Collaborative formal links with overseas organisations 150
30
Number of NIWA-funded international
visits & visiting scientists
159 & 45
150
Providers of capital
Innovation
As of 30 June 2008, NIWA had no interest bearing debt.
Licensing arrangements entered into
1
3
Patents granted in
New Zealand & overseas
New Zealand, 0
New Zealand, 1
Taxes paid
Overseas, 0
Overseas, 1
Joint ventures or formal associations
6
6
Most of our research is aimed at addressing issues of relevance to the general
public – the sustainability of our society and civilisation. As a commercial entity,
New or improved products, processes, or services
19
20
we also contribute by paying tax. Taxes paid in other countries were minimal.
2006 – 07 $6,063,000
2007– 08 $4,731,000
1 The CCMAU guideline for this indicator is 9%. However, this is averaged out over the
long term. NIWA is confident that this target will remain achievable in the long term. The
reduced target is due to increased spending on plant & equipment, and resulting increase
in depreciation and payroll related costs, with corresponding effects on profitability.
2 Based on calendar not financial year data.
NIWA Annual Report 2008
17
Sustainability – Social
NIWA is an environmental science research and consultancy
Key issues and challenges
organisation. As at 30 June 2008, NIWA has 753 permanent
s
and fixed-term employees based at 15 sites in New Zealand and
market, particularly as the demand for environmental scientists
in Perth, Australia. In the course of their jobs, NIWA staff work
increases while we face restricted funding and limited resources
through the length of New Zealand, the surrounding oceans, and
beyond, notably the South Pacific and Antarctica.
s
widespread and professionally diverse organisation
s
field
s
Strategic initiatives
Initiative Target
Initiative Target
Attract and retain good staff
Provide supervision for PhD and
Increase PhD numbers to approximately 50
Masters students
by 2010.
Carry out internal climate and
Repeat in 2008 – 09
Continue interactions with University
engagement survey
of Canterbury, University of Otago, and
University of Auckland through our joint
Implement plans for continuous
Successfully carry out results ‘roadshow’
‘Centres of Excellence’
improvement based on staff survey
and engagement seminars. Set future
improvement targets
Work with the Institute of Policy
Both organisations are members of the
Studies, Victoria University to identify
NZ Climate Change Centre, along with all
Continue to implement work-life
Continue to evolve and enhance strategy based
a mechanism for adding policy and
other CRIs, and University of Canterbury.
balance strategy
on staff feedback
economic dimensions to our climate
NIWA will continue to host the centre’s
change research
secretariat in 2008 – 09
Communications in a geographically widespread and professionally diverse organisation
Provide staff, where appropriate,
Adjunct professorships appointed to
Implement new project
Identify and pilot a new enterprise project
in our core science areas to serve
NIWA staff at University of Canterbury and
management system
management system in NIWA and provide staff
on advisory boards and councils of
University of Otago until 2011
with appropriate training to use it effectively to
tertiary institutions
manage opportunities, keep track of resources,
and track progress on projects. By June 2010
Provide a range of training courses, in
20 training courses for 2008 – 09
specific areas of NIWA’s core business,
Improve collaboration at a distance
Identify and pilot a collaboration platform/toolset
for the professional development of
and knowledge-sharing through
and provide staff with appropriate training to
staff from local and regional councils
enhanced tools and training
use it effectively to enhance the productivity of
and central government agencies, other
distributed teams, increase knowledge transfer,
organisations, and students
and better preserve organisational memory.
By June 2009
Publish NIWA’s
Water & Atmosphere
Water & Atmosphere published and
magazine quarterly to communicate
distributed for at least 2008 – 09
Enhance supply of graduates into the field
the results of NIWA research to
Maintain strong relationships with educational institutions
students, resource managers, and the
public. This magazine includes senior
Increase and enhance collaborative training with other agencies
secondary school curriculum links
Continue to sponsor the NIWA Interactive
Agreed sponsorship until 2010, when it will
Work collaboratively with two local
Continued support of Styx River project with
Room at Kelly Tarlton’s Antarctic Encounter be reviewed
government agencies, Nga–i Tahu,
clients and collaborators
& Underwater World. This facility has over
Lincoln University, and Landcare
45 000 students visit through organised
Research to provide scientific advice
education programmes and over 400 000
to the community based Styx River
visitors of which approximately 55% are
Living Laboratory project
New Zealanders
Extend specialist knowledge to deeper levels within the organisation
NIWA will be the major sponsor of five
Agreed sponsorship until 2010, when it will
regional Science & Technology Fairs and
be reviewed
Continue development and succession
Have development plans for 90% of staff
provide funding for six other science
plans for key staff and positions; ensure
by 2009
fairs and the national Genesis Energy
all staff have development plans in place
‘Realise the Dream’ event for primary and
secondary school students
Continue to host teacher fellows
Host at least one New Zealand Science,
Mathematics & Technology Teacher Fellow to
upskill teachers in environmental science
Provide scientific expertise and advice
Continue until 2009
for environmental education programmes
such as GLOBE (Global Learning &
Observations to Benefit the Environment)
and the New Zealand Waterways project
18
NIWA Annual Report 2008
Stakeholder interview
Key performance indicators
Leighton Abbot, Senior Consultant,
Indicator
Performance 2007– 08
Target in 2009
JRA (NZ) Ltd
Total staff FTEs
726
750
One of the biggest issues facing
permanent and fixed-term
organisations is the attraction and
New jobs created,
32
20
retention of good staff. Many companies
main centres
promote the thinking that “people are
New jobs created,
2
10
our most valuable asset”, but there is a
rural areas
big step from that intent to creating an
Staff composition
501 Researchers
502 Researchers
environment where people thrive.
(permanent only)
41 Research support staff
43 Research support staff
110 General support staff
117 General support staff
28 Management staff
28 Management staff
Measuring employee engagement
15 Post-docs
20 Post-docs
What we’ve found from conducting our annual unlimited/JRA
Work-life balance
75.8% of staff intend to continue
70% of staff are positive
Best Places to Work in New Zealand Survey is that the level to
working at NIWA for at least the
about working for NIWA and
next 12 months
see themselves working for
which staff feel connected to your organisation, and are motivated
NIWA in three years’ time
or ‘engaged’ can directly impact on your bottom line, whatever that
Total staff turnover
9.3%
Less than 12%
may be. In short, our research demonstrates that higher levels of
engagement lead to improved efficiencies, increased productivity,
Key staff turnover
1.2%
Less than 5%
and reduced costs.
Development –
Data not yet available
90%
An engaging organisation is more likely to hold on to its people,
staff with personal
development plans
reducing turnover. In New Zealand, the estimated real cost of
turnover can be up to two and a half times the salary of the role
Development – staff
502
400
days allocated to
being filled or replaced. For NIWA as a science organisation,
personal development
employing highly skilled people from a competitive global market,
this is a critical issue to get right.
Lost time from injuries
0.012%
Less than 0.03% of total
and accidents
work days
NIWA contracted JRA to conduct a combined ‘workplace climate
Number of incident and
140
Less than 90
and engagement’ survey. A response rate of 69.4 percent was the
near miss reports
basis of our analysis of NIWA’s permanent and fixed-term staff.
Number of post-docs
27
20
funded
What are the key drivers of engagement for NIWA staff and how
Number of PhD and
41 PhDs, 10 MSc
60
did they perform?
MSc students supervised
Based on the survey, the key drivers of engagement for NIWA
Number of teacher
3
2
staff include:
fellowships
s
Number of external
13
20
s
training courses run
s
realise their potential as professionals and individuals
s
The survey suggests some clear future direction to better engage
NIWA staff: help them get the most out of their jobs, in terms of
learning and development, including creating more variety in roles
and challenges to use and develop their knowledge and skills.
What are the key positives for NIWA?
In general NIWA staff feel they understand where they fit in the
big picture and feel their work gives them a sense of achievement.
NIWA’s turnover is well below the typical average 17–20% for
New Zealand organisations. Together with the already high skill
levels of staff and the high standards expected by the organisation,
these factors form a great platform for NIWA’s future success.
Leighton Abbot is a Senior Consultant with JRA (NZ) Ltd, and
holds an MCom(Hons)/BA from the University of Auckland.
For the past five years he has project managed New Zealand’s
largest survey of employee engagement, the unlimited/JRA Best
Places to Work in New Zealand Survey.
NIWA Annual Report 2008
19
Sustainability – Social (continued)
GRI indicators and results
NIWA’s work-life balance strategy
NIWA guidelines on retirement
NIWA has a work-life balance strategy that promotes personal
NIWA recognises that for many, retirement no longer represents
development and satisfaction alongside professional performance.
a sudden change from work to leisure, but rather more of a
gradual transition.
Financial rewards
+
Non-financial rewards
Retirement is no longer compulsory based on age.
Base pay
Recognition
s
s
However, to aid transition for both NIWA and the employee and the
market, not just science industry
transfer of knowledge, staff may – by mutual agreement – reduce
Opportunities to develop
Variable pay
s
their hours, if this meets with operational requirements.
s
with clients and work
profit to all permanent staff
s
Phased retirement options can be considered, by mutual
training
agreement, where staff can take reduced work schedules, or
Benefits
s
s
return to work after retirement on a part-time or fixed-term basis.
case basis
leave, including 3 days p.a. to pursue
s
non-work, personal interests
Continued association with NIWA can include:
certification programme
s
s
s
– Fixed-term engagement after retirement
s
Career opportunities
entitlement in Christmas period
s
– Part-time employment
s
s
contributions to KiwiSaver
– Staff working on a pro bono basis with access to NIWA facilities
Quality of work life
s
to work on science and mentor staff
s
s
s
work related study
– Staff engaged as ‘emeritus scientists’.
on case-by-case basis
s
s
discounts
To help manage career endings NIWA facilitates workshops on a
s
s
sessions – self referral
variety of areas including presentation skills, leadership training,
s
s
s
and retirement financial planning.
staff who spend more than a third of
assessment on case-by-case basis
work time in front of computer screen or
s
who carry out microscope work
PSA members entitlement
s
discount
s
NIWA staff profile as at 30 June 2008 (permanent staff only)
Staff
Categories numbers
Workforce
diversity
Service
Staff
numbers
Full-
NZ
NZ
South
Pacific
Other
(% of total)
Male Female Av. age
time
Euro
Ma–ori
Africa Indian
Aust
US
UK
Asian
Island ethnicity Av. yrs
NIWA Science
Research Teams
(incl. scientists,
technicians, and
post-docs)
507
(78%) 73% 27%
43 97%
74.2% 3.4% 0.4% 0.4% 1.8% 1.8% 3.0% 2.4% 0.6% 1.4% 12.7
Research
Support
14 (2%) 7% 93%
48 96%
71.4% 7.1% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
14.3% 8.1
General
Support
105
(16%) 46% 54%
43 95%
73.3% 3.8% 1.0% 6.7% 1.0% 1.0% 2.0% 1.0% 2.0% 2.9% 6.9
Executive/
Management
26 (4%) 85% 15%
50 100%
76.9% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 3.8% 17.3
NIWA Vessels
Research
Support 27
(90%)
93%
7%
48
100%
13.4
Support, Admin,
and
Mgmt
3
(10%)
67%
33%
47
100%
6.0
Unidata
Technical
9
(69%)
89%
11%
40
93%
3.0
Support, Admin,
and
Mgmt
4
(31%)
50%
50%
47
95%
2.8
Information for NIWA Science, NIWA Vessel Management Ltd, and Unidata Pty Ltd.
(Unidata is NIWA’s Australian-based environmental technology company. Unidata is 80 percent owned by NIWA.)
Data on ethnicity is currently unavailable for NIWA Vessel Management Ltd and Unidata Pty Ltd.
NIWA Science staff may choose not to record ethnicity. As a result, figures may not add to 100%.
20
NIWA Annual Report 2008
NIWA staff turnover
Personal development
No. of
Average
NIWA Science – Personal
Total hours
Average hours
NIWA Science
staff Turnover
age
Male
Female
development hours taken
taken
per employee
Research Teams
45
9%
41
69%
31%
Personal development leave
3768
6
Research Support
1
7%
30
–
100%
General
Support
12 11% 45 42% 58%
Executive/Management 2
8%
35
50%
50%
NIWA Science – Personal
Total
Average cash
development cashed up
cashed up
per employee
Total 60
9%
41
62%
38%
Personal development cashed up
$100,095.00
$160
Personal development training is a benefit provided only to permanent staff. In keeping with
Absenteeism
NIWA’s intent to promote and encourage work-life balance, permanent staff have a three-day
leave entitlement to pursue personal interests. NIWA permanent staff have the option to cash
Total
Hours per
in this leave.
NIWA Science
hours
employee
All staff eligible to take sick leave
20 893
32
All staff eligible to take family sick leave
5221
8
Union membership
Seafarer’s
NZ
Merchant
PSA
Union
Services
Guild
Parental leave
NIWA Science
NIWA Science
No.
% returned
Research Teams
353
Maternity leave
15
87%
Research Support
9
Paternity leave
7
100%
General Support
47
Total 22
91%
NIWA Vessels 4
13
5
Governance profile as at 30 June 2008
Health & Safety
In 2007– 08, NIWA lost 19.5 days due to staff injury, corresponding to 0.012% of
Male
Female
Total
%Male
%Female
total work days.
NIWA Board of Directors
5
2
7
71%
29%
NIWA Science
No. of incidents
Executive
Team
7 2 9
78%
22%
Medical treatment injuries/lost time
3
Sustainable Development
Committee
12
6 18 67% 33%
Medical treatment injuries/no lost time
41
First aid injuries
17
Minor injuries: no treatment
36
Other incidents
30
Near misses
13
Statement on NIWA’s social and cultural mandate as a
Total 140
New Zealand CRI
As New Zealand’s foremost environmental science CRI, NIWA’s
services have a significant impact on the social and economic
Safety of our staff at work is paramount. NIWA reports injuries, but
future of New Zealand and New Zealanders. NIWA’s science
also other incidents and near misses, as a way to ensure potential
and expert opinion influences many decisions made by local
hazards are identified and addressed. We provide monthly incident
and central government and businesses every day.
data to all staff, and publish health and safety newsletters. Our
long-term aim is for no employee to be injured at work.
Our recognised expertise in climate change science puts NIWA
in an influential position in terms of how New Zealand will
In the last 12 months NIWA’s medically treated injuries have mostly
respond to the challenge of climate change. Dr David Wratt,
been sprains, strains, and minor cuts and abrasions.
NIWA’s Chief Scientist, Climate, is a member of the Bureau
of the Intergovernmental Panel on Climate Change (IPCC).
NIWA’s incident reporting system requires an investigation into
Many other New Zealanders contribute to the work of the
all incidents to document the causes of injuries as the basis
IPCC, which in 2007 was jointly awarded the Nobel Peace
for identifying any training needs, or assigning responsibility for
Prize for building and disseminating “greater knowledge about
corrective action where necessary. NIWA has recently appointed
man-made climate change, and to lay the foundations for the
a full-time National Health and Safety Manager to oversee these
measures that are needed to counteract such change.”
processes.
In line with its Statement of Corporate Intent and Corporate
Social Responsibility Charter, NIWA aspires to create a safe
and supportive environment for staff to grow and develop
All figures on this page relate to permanent staff only.
professionally, and as individuals.
In addition, NIWA:
s
discrimination
s
to the best of our ability
s
balance.
NIWA’s cultural impacts and initiatives are addressed in the
Cultural pillar spread.
NIWA Annual Report 2008
21
Sustainability – Cultural
NIWA staff and management work under a directive to develop
Key issues and challenges
–
effective long-term relationships with Maori. This is NIWA’s key
–
For Te Kuwaha, the key challenge is continuing to improve the
cultural impact. These relationships are managed through NIWA’s
–
–
way we carry out our work, including formalising relationships
Maori environmental research group, Te Kuwaha o Taihoro
–
with Maori and representative organisations within an increasingly
Nukurangi.
–
–
complex context of sustainability. Te Kuwaha’s critical focus
The main goal of Te Kuwaha is to establish NIWA as New Zealand’s
areas include:
leading provider of water- and atmosphere-related research of
–
–
s
benefit to Maori. In addition, Te Kuwaha is also responsible for
–
–
processes, including formalising relationships with Maori and
providing tikanga and te reo Maori training courses within NIWA
representative organisations.
so that all staff can become more confident in their interactions
–
with Maori.
s
–
Securing resourcing to continuously grow NIWA’s Maori research
–
capacity in an increasingly competitive funding environment.
As at 30 June 2008, Te Kuwaha consists of 11 staff spread across
NIWA’s sites.
s
–
and increase awareness of tikanga and te reo Maori amongst
NIWA staff.
Strategic initiatives:
s
will enable NIWA to provide appropriate and relevant science
NIWA’s protocols for iwi liaison1
–
for different iwi and hapu
–
–
To build positive working relationships with iwi, hapu and Maori
– To encourage collaborative research projects between NIWA
organisations in areas impacted by research NIWA wishes to
–
and Maori organisations
conduct, the following procedures apply:
–
– To develop funding applications in collaboration with Maori
1. Staff are to communicate with the Regional Manager and
organisations
–
Chief Scientist, Maori when considering, or undertaking,
–
s
research that involves Maori
–
responsibilities and consultation with Maori and educate staff
–
2. The Regional Manager and Chief Scientist, Maori will liaise
with respect to this policy
–
(or delegate responsibility to Manager, Maori Development)
–
– To check new NIWA projects during set-up to ensure that
with an iwi or hapu representative of that rohe (region).
–
collaboration with Maori will be appropriately managed, and
This is to ensure science research considers cultural aspects –
potential conflicts are avoided
and acknowledges kaitiakitanga (guardianship) of the iwi, hapu
–
–
and/or Maori organisation.
– To provide tikanga and te reo Maori training to NIWA staff
s
–
To provide opportunities for Maori to work in areas of NIWA
High-level objectives
science that is of relevance to iwi, and makes NIWA an attractive
–
s
place for Maori researchers to work.
–
–
–
Maori in consultation with iwi, hapu and Maori organisations
throughout the country
NIWA specialist staff
s
–
To develop programmes, in collaboration with iwi, hapu and
NIWA employs two full-time staff members specifically to initiate
–
–
Maori organisations, which will enable NIWA to provide
and maintain successful working relationships with Maori:
–
appropriate and relevant science for Maori
s
–
Mr Apanui Skipper (Manager, Maori Development) – Te
–
–
–
–
–
–
s
–
–
To develop, in consultation with iwi, hapu and Maori
Whanau-a-Apanui, Ngati Tamatera, Ngati Paoa, Ngati Tukorehe,
–
–
organisations, a policy regarding relationships, responsibilities
Ngati Raukawa ki te Au o Te Tonga, Ngati Toa Rangatira, Te
–
–
and consultation with Maori; and to educate staff with respect
aitanga-a-Mahaki
to this policy.
s
–
–
Mr Weno Iti (Manager, Maori Development) – Ngati Maniapoto,
–
Te Atiawa, Ngati Tauaiti.
Specific objectives
s
Formalising relationships
–
Maori focus
NIWA currently has over 85 working relationships with various
–
s
Maori groups throughout New Zealand. Some of these have been
–
Maori organisations throughout the country
formalised, or are in the process of being formalised, through a
number of mechanisms including:
– To allow NIWA staff to do work with their own iwi, where that
is applicable
s
s
s
–
Maori and vice versa
s
s
These relationships are recorded in NIWA’s client database.
–
The relationships have been formalised with Maori organisations
depending on the requirements and wishes of our partners.
Generally these agreements outline the appropriate behaviours
to be upheld by the two parties. All agreements are reviewed and
approved by both parties’ legal teams before signing.
1 From section 2.4 of NIWA’s Policy and Procedures manual.
22
NIWA Annual Report 2008
Considerations when formalising relationships:
Stakeholder interview
s
Geraldine Baker, Fisheries
involve ma–tauranga Ma–ori)
Management Consultant.
–
s
Formerly General Manager, Ngapuhi
Fisheries Ltd, asset-holding company
s
–
–
for Te Runanga A Iwi O Ngapuhi
s
research partner required before any publication of material
When working with NIWA what is the
emanating from research)
scope of your role?
I have worked with NIWA in two roles. The
s
–
first was in my former capacity as General Manager for Ngapuhi
–
Fisheries Ltd, the asset-holding company for Te Runanga A Iwi
Results and targets
–
–
O Ngapuhi, the mandated iwi authority for Ngapuhi. We worked
To be able to measure overall success, we have to measure the
together on two projects with NIWA. The first project involved
success of our interactions and relationships. The key mechanisms
–
Ngapuhi’s interest in finfish farming opportunities. Through
for this are:
NIWA’s international networks, we were able to acquire first-hand
s
experience, from an indigenous perspective, of how first nation
–
with various Maori organisations as a way to improve/ensure
peoples benefited culturally, socially, and economically from their
longevity in NIWA’s institutional memory
involvement in marine farming and the sustainable management of
marine resources in their environment. The second project
s
–
involved contracting NIWA’s services to develop a sustainable
attended the te reo and tikanga Maori training courses run by
–
–
comprehensive eel management framework for Maori in
Te Kuwaha. At the end of each course, staff fill out an evaluation
Te Tai Tokerau.
form. Relevant feedback/suggestions are incorporated into
future courses.
The second role is in my current capacity as a commercial
fisheries consultant. This role involves providing services to
The target for Noho Marae attendees for 2008 – 09 is a minimum
NIWA in the form of a scoping report on the regulatory process
of 60.
involved in establishing an Aquaculture Management Area (AMA)
in Northland.
–
The formalisation of NIWA’s relationships with Maori research
partners, and the type of agreement entered into, are typically
How are NIWA helping you in your role?
driven by the needs of our partners (except subcontracts where
In my first role, NIWA provided the contacts, essential technical
–
we have a fee-for-service arrangement). Therefore, Te Kuwaha
and scientific research processes and frameworks that
have not established targets as these relationships are managed
complimented the traditional ma–tauranga. In the first instance
–
on a case-by-case basis. In all cases Te Kuwaha work hard to
–
this assisted Ngapuhi to make better decisions in terms of our
ensure NIWA has a ‘seen face’ and is easily contactable to ensure
aquaculture aspirations, and in the second instance provided
that the relationships remain functional and healthy for the
–
Maori in Te Tai Tokerau with the know-how to confidently collate,
long-term benefit of both parties.
record, and sustainably manage freshwater resources within their
particular hapu– and tribal rohe. These services were provided in
a culturally respectful and embracing environment, engendering
Agreement type
Typical use
Total
trust and open communication, thereby encouraging opportunities
Memorandum of
Typically for long-term working relationships
10
for future collaborative projects together.
–
Understanding (MoU)
with larger Maori groups/entities
In my second role, NIWA are assisting me to grow my business and
Letter of support/
Pre-research proposal submission; supplied
16
to become more knowledgeable about the environment in which I
understanding
by potential research partner in support of a
work and the people engaged within that environment.
specific research proposal
Letter of intent
Typically after research funding has been
3
From a Ma–ori perspective how is NIWA helping Aotearoa/
approved. Project and timeframe specific
New Zealand?
–
Te Ao Maori stems from a traditional foundation of tikanga and
kawa, ma–tauranga and oral history. By combining the western
–
scientific methodologies and knowledge base with Maori traditional
methodologies and knowledge base, not only will all New
Zealanders benefit from a greater understanding and appreciation
of both cultures, they will also be better informed and equipped
to manage the increasingly rapid changes to our environmental
landscape and be in a healthier position to take advantage of
opportunities as they come to hand. By combining both world-
–
views, there is real potential for Maori to enhance traditional
practices of kaitiakitanga, manaakitanga, rangatiratanga, and
whanaungatanga. Only by becoming more knowledgeable about
our environment and resources can we truly behave in ways that
ensure the sustainable longevity of Aotearoa.
NIWA Annual Report 2008
23
Capability Funding
Capability funding is provided to Crown Research
$’000
(excl
GST)
Percentage
Institutes (CRIs) through the Ministry of Research,
Support core skill bases that are at
Science & Technology to support and enhance long-
or below critical mass
532
5
term research capability. Capability funding is based on
Advance new areas of science and innovation
4,053
40
each CRI’s proportion of the total government research
Increase the transfer of science to end-users
1,527
15
investment. In 2007 – 08, NIWA received $10.08 million
Build future research capacity in
areas of high national need
2,720
27
(excluding GST) in capability funding.
Bridge the gap between research and
commercialisation of new products
1,250
13
Impact of fishing on albatross colonies
monitored
Capability funding is assisting NIWA with a post-doctoral study into the
effects of fishing activity on New Zealand’s white-capped albatross.
Although the white-capped albatross is the most common albatross found
in New Zealand, these seabirds are prone to bycatch in commercial
fishing operations when foraging for food.
Dr Leigh Torres, a NIWA post-doctoral fellow, analysed high resolution
data of the seabird distributions at sea from GPS tags attached to 19
white-capped albatross.
This information was matched with commercial fishing data, provided by
the Ministry of Fisheries, to assess changes in habitat use and behaviour
patterns of the albatross when they were near fishing activity.
Results show that 75% of the foraging trips by the albatross overlapped
with fishing vessels at some point, but six birds did not go near the fishing
vessels at all.
While this indicates commercial fishing activity could be influencing the
ecology and biology of the albatross population, a wider study is needed
to determine whether commercial fishing is actually detrimental or an
advantage to the seabirds.
More albatross will be tagged, and their movements monitored against
A
fishing activity, in the coming months.
How does commercial fishing affect white-capped albatross? The Capability Fund
is supporting a NIWA post-doctoral fellow to investigate.
David Thompson, NIW
Modelling aquatic species distributions
for better biosecurity & biodiversity
management
Understanding more about aquatic biodiversity and possible
threats from non-indigenous species is essential for New Zealand’s
biosecurity management.
Capability funding has assisted NIWA to strengthen its research in
this area; in particular, with the development of new and reliable ways
to model and predict aquatic species distributions – both native and
introduced species.
Our models can predict the distributions of species based on what’s
A
known about their current distribution, habitat requirements, and some
environmental variables. We can predict where a species is likely to occur
for the whole country or EEZ, even for locations where we don’t have any
Geoff Read, NIW
presence/absence information. Using these techniques, we have also
Invasive species like this Mediterranean fanworm,
assessed the likely spread of invasive species, such as didymo.
Sabella spallanzanii
, can wreck havoc. The Capability
Fund is helping NIWA scientists develop new and
NIWA’s analyses can help government departments, including the
reliable ways to model and predict aquatic species
Department of Conservation, and MAF, to develop biosecurity policies
distributions – both native and introduced.
and operational management decisions for responding to pest species
incursions and spread, and conserving or restoring critical habitats.
This research also includes design and evaluation of large-scale marine
protected areas in offshore waters, predicting the distributions of coastal
reef fishes and the 30 commonest freshwater fish species. The freshwater
fish distributions are being used to assess the conservation values of
New Zealand rivers and streams.
24
NIWA Annual Report 2008
Capabilities to be maintained, enhanced, or developed with Capability Fund
Areas of nationally
2007– 08 Forecast
2007– 08 Achievements
recognised expertise
Freshwater
■ maintain national capabilities in lake and wastewater sciences
■ research on lake restoration processes and novel wastewater
■ continue support for seven post-doctoral fellows in key areas of
treatment ponds
increasing stakeholder need (e.g., water allocation, catchment water
■ post-doctoral fellows supported to study modelling riparian
quality modelling, water-borne pathogens)
processes, stream geomorphology, water resources planning,
■ enhance national capability in freshwater science through support of
stream habitats, health risk assessment modelling, and snow
two sabbaticals and technical training
resources
■ staff sabbaticals supported to study fish migrations and water
resource assessments, and training in environmental contaminants
Coasts
■ enhance core skills in key areas of coastal hydrodynamics,
■ post-doctoral fellows supported to study fish farm impacts, beach
near-shore ecology, and effects of marine farming through support
erosion modelling, coastal fisheries, inundation modelling, and
of five post-doctoral fellows
coastal currents
■ strengthen understanding of interactions between coastal aquaculture
■ research on the effect of dairy farming on coastal embayment
and land-derived contamination
contamination
■ assist iwi in implementing techniques for managing coastal
■ framework developed with iwi on management of the Kaipara
ecosystems, especially shellfish and pelagic fish
Harbour marine resources
Oceans
■ continue support for cross-agency initiative for Ocean Survey 20/20
■ 60-day census of Antarctic marine life voyage completed
to proceed and inform ocean policy
■ three post-doctoral fellows supported to study submarine hazards,
■ maintain critical mass in core skill areas of ocean sciences through
ocean hydrodynamics, and seabird ecology
support of three post-doctoral fellows
Fisheries
■ develop tools and services to mitigate fisheries bycatch and damage
■ researched net selectivity and bycatch mitigation in the hoki
to sensitive environments
fishery
■ improve our core fisheries survey and analytical software tools
■ developed and upgraded stock assessment models
■ re-develop our software systems for gathering, storing, and
■ initiated software development for new fish data gathering
interrogating our fisheries data
instrumentation
■ develop training courses to enable stakeholders to better participate
■ organised four stakeholder workshops on fisheries management
in the fishery management and research planning process
Ma–ori Development
■ provide guidance to iwi on the potential economic opportunities from
■ established advisory group and guided iwi on resource use
renewable energy
■ post-doctoral fellow researching the impacts of emissions trading on
■ support a post-doctorate fellow to study the effects of climate change
Ma–ori businesses
on the Ma–ori economy
■ completed national aquaculture roadshows with iwi, and transfer
■ support staff collaborations and technology transfer initiatives with iwi
of environmental science through hui, reports, and collaborative
on lake restoration, fisheries, aquaculture, energy and water supply,
research
and wastewater treatment
■ staff participated in four noho marae and attended te reo and
■ continue to strengthen the capability of staff to interact effectively with
tikanga training courses
Ma–ori through the provision of support tools, guidelines and protocols,
and training courses
Atmospheric Trace
■ maintain critical mass in atmospheric chemistry and modelling
■ post-doctoral fellow supported to study ozone chemistry and climate
Gases
through supporting a post-doctoral fellow
interactions
■ develop models that quantify health risks associated with
■ research on human exposure to air pollution
emissions/air quality
■ instrumentation developed for measuring indoor pollutants
■ establish capability for assessment of indoor air quality
Energy
■ develop techniques for assessing environmental impacts of marine
■ guidelines for environmental consents developed
energy installations
■ new staff employed to study small scale energy installations
■ recruit skills in distributed and combined source energy technologies
Climate & Hazards
■ develop near real-time hazard forecasting products
■ riverflow, wave, and sea-level forecasting models implemented
■ improve integration of our chained models (e.g., rainfall, river flow,
■ hydrological models implemented for all New Zealand catchments
inundation)
■ produced second edition of climate change guidance manual for
■ enhance ability to advise local authorities on the effects of climate
local government
change on urban infrastructure
■ seasonal updates and outlook publications produced monthly and
■ support the activities of the national centres for climate and hazards
over 100 presentations to stakeholders
in providing advice to policymakers and the public
Environmental
■ develop new tools for real-time data capture, transfer, and display
■ system developed for large scale irrigation water management
Information
■ expand coverage of our environmental monitoring networks to
■ new monitoring stations for snow and ice established in mountain
enable better decision-making
areas
■ improve web access to NIWA’s environmental data
■ new web tool developed to access water resources information
Aquaculture &
■ develop commercial scale trials on a new species with sector partners
■ sea cage rearing trials of kingfish established at Mahanga Bay
Biotechnology
■ complete technical feasibility studies on added-value products
■ initiated research on drug encapsulation for finfish health care
■ develop a broodstock programme to support industry
■ breeding families established for kingfish, hapuku, and paua
■ engage with industry in developing an R&D programme to support the
■ new research programme established with industry to advance
sector’s future vision
commercial culture of high value species
Aquatic Biodiversity
■ enhance core skills in marine and freshwater taxonomy and
■ post-doctoral fellows and visiting scientists supported to study
& Biosecurity
freshwater biosecurity through support of visiting scientists and
aquatic algae and freshwater fish biosystematics and identification of
post-doctorates
invasive species
■ increase staff skills in taxonomy through sponsoring training courses
■ seven taxonomic training courses held
■ improve utility of biosecurity data through developing better analysis
■ biosecurity data used to develop spatial models of introduced
and mapping tools
freshwater species
■ develop predictive models and tools for biodiversity management and
■ statistical techniques developed to predict spread of introduced
bio-incursion spread and effects
aquatic species
NIWA Annual Report 2008
25
Board of Directors
The NIWA Board as at 30 June 2008, with the Chief Executive (left to right): John Morgan, Ed Johnson, Sue Suckling, Graham Hill, Troy Newton,
Craig Ellison, John Hercus, Wendy Lawson.
Sue Suckling (
Chair), OBE, BTech (Hons),
Dr Graham Hill is an astronomer and
Dr Wendy Lawson, BSc (Hons), PhD, is a
MTech (Hons), is a Christchurch-based
astrophysicist currently lecturing in astronomy
glaciologist and academic, with a particular
director and strategic business consultant.
at the University of Auckland. From 1967
interest in the impacts of climate change on
She is Chair of the New Zealand
to 1996 he was a research scientist at
earth systems at IPCC time scales. She has
Qualifications Authority and a number
the National Research Council of Canada
more than 25 years of remote field science
of private companies. She is a director
– Dominion Astrophysical Observatory in
experience in Arctic, Antarctic, and alpine
of Restaurant Brands and a member of
Victoria, BC, and is a scientific computer
regions, on expeditions from universities in the
the Takeovers’ Panel. Previously, she was
software consultant and collaborator with
UK and US, as well as New Zealand. She is
Chair of AgriQuality Ltd and Deputy Chair
colleagues at several overseas universities.
Head of the Department of Geography at the
of the Institute of Geological and Nuclear
He is an invited member of the International
University of Canterbury, Chair of the Advisory
Sciences Ltd. Sue was appointed NIWA
Astronomical Union and holds a PhD in
Board of Gateway Antarctica, and serves on
Chair in July 2001.
astronomy from the University of Texas.
the Board of the Antarctic Research Centre at
He is a director of Mighty River Power and
Victoria University. She previously served on
Craig Ellison (
Deputy Chair) has an MSc
the Research and Education Advanced
the Board of Antarctica New Zealand.
in zoology from Otago University, and is
Network New Zealand, a former director of
a director on several boards, including
the Meteorological Service of New Zealand,
Troy Newton is a partner of KPMG
Airways Corporation of New Zealand, and
and a council member of Unitec.
Corporate Finance, where he advises
New Zealand Trade & Enterprise, as well as
clients on mergers and acquisitions,
chairing the New Zealand Seafood Standards
Ed Johnson, BA (Hons) Finance
valuation, regulatory reform, and
Council. He was a commissioner on the Treaty
and Accounting, MBA (Hons), is
financing matters in New Zealand,
of Waitangi Fisheries Commission until 2004,
a Marlborough-based company director
Australia, and the Pacific Rim. He is a
and a director of Aotearoa Fisheries until
and advisor. He is currently Chair of Fulton
chartered accountant and was a director
the end of 2007. Craig has a strong interest
Hogan Ltd and Goldpine Industries Ltd, and
of Industrial Research Ltd from 1997
in improving NZ business management
a director of several entities, including the
until September 2002. He has particular
capability, Ma–ori governance structures,
Bank of New Zealand, Port Otago Ltd, MDC
industry experience in telecommunications,
and resource management.
Holdings Ltd, and Marlborough Airport Ltd.
information technology, and energy and
He retired as Chairman and Chief Financial
transport operations.
John Hercus has an MSc in physics from
Officer of Shell New Zealand in 2002
Victoria University of Wellington and has
after having senior management roles in
John Morgan (Chief Executive Officer)
been a leading figure in polytechnic,
New Zealand, the US, and the UK. In 2001,
John took up his position as CEO of NIWA on
technology, and science education, serving
Ed was appointed the inaugural Honorary
30 April 2007 and has a wealth of experience
as Director of the Christchurch Polytechnic
Fellow of Massey University’s Centre for
in guiding companies to world-leading
from 1974 to 1993. He has worked for the UN
Business and Sustainable Development.
positions in their fields. He has extensive
Development Programme in higher education
In 2003, he was made a Fellow of the
senior executive and governance experience
and training, and on projects with UNESCO
Institute of Directors in New Zealand.
in the science sector and is passionate about
and the Asian Development Bank. He has
the role science can play in transforming
held directorates with several companies
New Zealand’s economy, society, and global
involved in international education and
reputation. John’s previous roles include CEO
technology development.
of AgriQuality Ltd, Executive Director of Orica
New Zealand Ltd, and Chairman of New
Zealand Pharmaceuticals Ltd.
26
NIWA Annual Report 2008
Report of the directors to the shareholders
The directors take pleasure in presenting the National Institute of Water & Atmospheric Research Ltd (NIWA) and
Group Annual Report for the financial year ended 30 June 2008.
Business activities
The NIWA Group provided scientific research and consultancy services in New Zealand and overseas during the
financial year. In New Zealand, services were provided to the Foundation for Research, Science and Technology, the
Ministry of Fisheries, and a range of other public and private sector customers. Internationally, services were provided
by NIWA and its subsidiaries to public and private sector customers predominantly in the USA and Australia.
Results
This financial year the NIWA Group has exceeded its business plan objectives, as set out in the Statement of
Corporate Intent (SCI), with a net surplus of $10.1 million (2007: $9.8 million) against a budgeted net surplus of
$9.5 million. This was achieved on a turnover of $120.6 million (2007: $113.9 million), against budgeted revenue
of $115.8 million.
Average shareholders’ equity at 30 June 2008 totalled $79.3 million (2007: $69.5 million). Total average assets were
$109.5 million at 30 June 2008 (2007: $100.9 million).
Donations
Donations of $10,957 were made during the year.
Dividends
Dividend payments of $186,750 were made to the Government of New Zealand (the Crown), as the sole shareholder.
Group actual performance versus Statement of
Corporate Intent (SCI)
Actual SCI
Actual
2008 2008 2007
Years ended 30 June
$’000 $’000 $’000
Total revenue
(includes
interest
income)
120,671 115,798 113,911
Operating expenses, depreciation,
and amortisation
106,291 101,632
99,632
Operating surplus before tax
14,335
14,167
14,279
Net
surplus
10,121 9,515 9,813
Average total assets
109,481 111,672 100,956
Average shareholders’ funds
79,306
85,434
69,483
Profitability
EBIT margin (%) (EBIT/revenue)
11.3
11.8
12.3
Return on average equity after tax (%)
(net surplus/average equity)
12.8
11.1
14.1
Return on assets (%)
(EBIT/average total assets)
12.5
12.3
13.9
Liquidity and efficiency
Current
ratio
1.5 1.2 1.3
Quick
ratio
2.1 1.2 1.8
Financial leverage
Debt to average equity (%)
37
36
39
Gearing (%)
–
–
1
Proprietorship (%)
(shareholders’ funds/total assets)
72
77
69
NIWA Annual Report 2008
27
Report of the directors to shareholders
Directors
The retirement of John Spencer on 31 October 2007, and of John Hercus and Troy Newton on 30 June
2008, were the changes to the Board of Directors for the year ended 30 June 2008. Dennis Cairns and
Helen Robinson were appointed to the Board of Directors on 1 July 2008.
Auditors
In accordance with Section 21(1) of the Crown Research Institutes Act 1992, the auditors, Deloitte
on behalf of the Auditor-General, continue in office. Their audit remuneration and fees paid for other
services are detailed in note 6 of the ‘Notes to the Group Financial Statements’.
Interests register
The following are transactions recorded in the interests register for the year.
Parent and subsidiary companies
Interested transactions
Any business the NIWA Group has transacted in which a director has an interest has been carried out on
a commercial ‘arms-length’ basis.
Directors’ remuneration
Details of the directors’ remuneration are provided in the Remuneration of directors section of the
governance statement.
Use of company information by directors
Pursuant to section 145 of the Companies Act 1993 there were no recorded notices from directors
requesting to use company information received in their capacity as directors that would not otherwise
have been available to them.
Share dealings
During the year no director purchased or disposed of any equity securities of the NIWA Group.
Directors’ loans
There were no loans by the NIWA Group to any director.
The directors are pleased with the state of affairs of the NIWA Group.
For and on behalf of the Board:
Sue Suckling
Craig Ellison
Chair Director
25 August 2008
Statement of management responsibility
The following statement from the Board is made in accordance with section 155 of the Crown Entities
Act (2004).
1. The management of the company is responsible for the preparation of these Financial Statements and
the judgements used therein.
2. The management of the company is responsible for establishing and maintaining internal control
procedures designed to provide reasonable assurance as to the integrity and reliability of financial
reporting.
3. In the opinion of management, these Financial Statements fairly reflect the financial performance,
movements in equity, financial position, and cash flows of the National Institute of Water & Atmospheric
Research Ltd and Group for the year ended 30 June 2008.
Sue Suckling
Craig Ellison
Chair Director
25 August 2008
28
NIWA Annual Report 2008
National Institute of Water & Atmospheric Research Ltd and Group
Corporate governance statement
for the year ended 30 June 2008
Approach to corporate governance
We are committed to ensure that best practice governance
principles and ethical standards are upheld and applied
The NIWA Group is continually striving to achieve and
consistently.
maintain its robust and transparent corporate governance.
This governance statement outlines the main corporate
Renewed interest in corporate governance (particularly
governance practices as at 30 June 2008. Unless otherwise
due to high-profile collapses) has reinforced the Board’s
stated, they reflect the over-arching practices in place
view that corporate governance is an essential factor
throughout the financial year ending on that date.
of accountability.
We believe that corporate governance is not a matter of
Principles for corporate governance
ticking boxes to ensure compliance, but a useful tool that
Nine principles and guidelines established by the
focuses us on improvement and value adding – it ensures
Securities Commission of New Zealand in 2004 are
effectiveness in an ever-changing environment.
contained in the corporate governance of the NIWA Group.
The NIWA Group’s corporate governance deals with how
These principles apply to entities that have an economic
the company is directed and controlled to ensure good
impact in New Zealand and/or are accountable to the
ethical behaviour and promote shareholders’ interests in
public in various ways.
a sustainable way. In particular, corporate governance
The NIWA Group is a Crown Research Institute that is
applies to the role of the Board of Directors (‘the
owned by the government which is held accountable by
Board’) and the need to ensure a framework of effective
the public.
accountability and transparency.
Our direct customers are those who fund our science
A key element of governance is designing a governance
and research. The Government is our largest customer,
model that reflects the values of the NIWA Group and its
but we also conduct research for, and provide advice and
participants and then evaluates the model’s effectiveness.
information to, many others, ranging from international
Ethical behaviour is a vital element; the governance model
conglomerates to local commercial fishers and schools.
in place will be ineffective unless the Board, directors,
We consider the New Zealand public to be our most
and management are committed to ethical standards and
important customer, although they do not directly
behaviours. Ultimately, the Board is responsible for ethical
contract us.
behaviour within the NIWA Group.
Most of our research is aimed at addressing issues of
We believe the following characteristics promote good
relevance to the general public – the sustainability of our
governance:
society and civilisation.
s
Not all of the principles apply to the NIWA Group but are
promotes the vision of the NIWA Group;
observed to the fullest extent to which they apply; for
s
example, directors are appointed by the Shareholding
s
Ministers rather than the Board.
processes, such as risk management;
Principle 1 Ethical standards
s
Directors should observe and foster high ethical
s
standards.
Corporate governance values adopted by the NIWA
We aim to promote a Code of Conduct to all staff (including
Group include honesty, openness, trust and integrity,
the Board and management) which promotes standards of
mutual respect, performance orientation, accountability,
integrity, discretion, and ethical conduct. The NIWA Group
and commitment.
encourages staff to:
The NIWA Group is a Crown Research Institute, established
1. perform to the best of their ability, and be committed to
under the terms of the Crown Research Institutes Act
a high quality of work performed in a safe manner;
(1992) and the Public Finance Act (1989), with all its
2. take the initiative and be creative in resolving problems,
shares held by the Minister of Finance and the Minister for
seeking improved productivity, and responding to
Research, Science and Technology on behalf of the Crown.
opportunities within areas of responsibility;
The Board’s authority and accountability is based upon
3. make decisions and be responsible for those decisions
the two acts noted above and the Statement of Corporate
and the actions that flow from them;
Intent (SCI). The SCI is produced annually, and sets
out the Board’s strategic objectives, specific goals,
4. be supportive of their work teams;
and performance targets. The SCI is submitted to the
5. treat staff and equipment with care and respect.
Shareholding Ministers for acceptance.
It is expected that managers will guide staff in accordance
with management’s philosophy, policies, and standards.
NIWA Annual Report 2008
29
National Institute of Water & Atmospheric Research Ltd and Group
Corporate governance statement
for the year ended 30 June 2008
We encourage the personal development of our staff
Board composition and activity
through outside interests and will not normally object
Shareholding Ministers appoint Board members under
to their participation. The existence of a conflict of
the Crown Entities Act 2004 and the Board are required
interest does not necessarily cause problems; it requires
to meet the same obligations as directors of private sector
identification and careful management.
companies.
In making decisions about conflicts of interest,
Board directors are selected and appointed on the basis of
management are guided by the concepts of integrity,
their skills and experience. Additionally the balance of these
honesty, transparency, openness, independence, and
skills and experience is required to match the strategic
good faith. Situations may not be clear cut; judgement is
direction and needs of the NIWA Group.
exercised when necessary on a case-by-case basis.
Some basic competencies that all directors must have:
Both employees and directors must disclose any financial,
professional, or personal interests (direct or indirect) that
s
may create a conflict with the Group’s interests. We expect
s
both our employees and directors to be open and honest
s
with disclosures.
s
Principle 2 Board composition and performance
s
There should be a balance of independence, skills,
s
knowledge, experience, and perspectives among directors
s
so that the Board works effectively.
an ability to distinguish corporate governance from
Responsibilities of the Board and management
management.
The Board of Directors of the NIWA Group is appointed
Before a new director is appointed, candidates are put
by the Shareholding Ministers to guide and monitor the
through a due diligence process to determine whether
business of the Group and its subsidiaries.
the candidate can add value to the Board, the degree of
risk entailed in the appointment, and whether there are
The functions of the Board include but are not limited to:
known or potential conflicts of interest. Once a director
s
has been appointed, they receive guidelines on the
s
government’s expectations, above those contained in
objectives;
the Companies Act 1993.
s
Appointment of directors is for a term of up to three
years. Directors may be reappointed for a second term
s
of up to three years, although this is not automatic, with
s
Ministers basing their decision on the company’s needs.
s
Both the Chair and the Deputy Chair are appointed by the
stakeholders;
Shareholding Ministers.
s
During the financial year ended 30 June 2008 the Board
the business is conducted;
comprised seven independent non-executive directors
(including the Chair). The directors’ profiles are presented
s
on page 26. Board meetings are held monthly. The Board
s
formally met eleven times during the year.
these matters.
The Board delegates management of the day-to-day affairs
and management responsibilities of the NIWA Group to the
executive team under the leadership of the Chief Executive
Officer (CEO). The CEO and his team deliver the strategic
direction and goals determined by the Board. A formal
delegations authority framework establishes the operational
and expenditure delegations within which the Chief
Executive Officer must operate.
30
NIWA Annual Report 2008
National Institute of Water & Atmospheric Research Ltd and Group
Corporate governance statement
for the year ended 30 June 2008
Membership and attendance
Director Date
of
Appointment
Board
Audit
Remuneration
appointment
term
expires
Committee
Committee
John Spencer
(Resigned 31 October 2007) 16 June 2003
30 June 2009
3
1
John Hercus
(Resigned 30 June 2008)
27 October 2000
30 June 2008
7
Troy Newton
(Audit Committee Chair)
(Resigned 30 June 2008)
18 June 2002
30 June 2008
9
3
Sue Suckling (Chair)
1 March 2001
30 June 2009
10
3*
1
Graham Hill
27 May 2002
30 June 2009
8
Wendy Lawson
1 July 2006
30 June 2009
10
Craig Ellison (Deputy Chair)
1 July 2007
30 June 2010
8
Ed Johnson
9 June 2005
30 June 2011
9
3
1
Dennis Cairns
1 July 2008
30 June 2011
Helen Robinson
1 July 2008
30 June 2011
* The Chair is an ex-officio member of the Audit Committee.
Membership of subsidiary Boards
NIWA
(USA),
Director
NIWA Vessel
NIWA Natural
NIWA
Inc. & NIWA
Unidata
Management
Ltd
Solutions
Ltd
Australia
Environmental
Pty
Ltd
Pty
Ltd
Research
Institute
Sue Suckling
✓*
✓*
✓*
✓*
Craig Ellison
✓
✓
✓
✓
John Hercus
✓
✓
✓
✓
Graham Hill
✓
✓
✓
✓
Ed Johnson
✓
✓
✓
✓
Troy Newton
✓
✓
✓
✓
David Saunders1
✓
John Spencer
✓
✓
✓
✓
Wendy Lawson
✓
✓
✓
✓
Dennis Cairns
✓
Helen Robinson
✓
Kate Thomson2
✓*
Bryce Cooper2
✓
Matt Saunders3
✓
* Chair.
1 Director representing minority interest.
2 Management members of the parent company.
3 Management member of Unidata Pty Ltd.
NIWA Annual Report 2008
31
National Institute of Water & Atmospheric Research Ltd and Group
Corporate governance statement
for the year ended 30 June 2008
Director development
Remuneration committee
A sector specific induction programme is conducted for
The Remuneration Committee is a sub-committee of the
all new directors by Crown Company Monitoring Advisory
Board and comprised two members, the NIWA Chair and
Unit (CCMAU). A formal induction into all aspects of the
a NIWA director.
NIWA Group is provided by the Chair and management
The Remuneration Committee reviews the remuneration
representatives.
policies applicable to the Chief Executive Officer on
All directors are responsible for staying up-to-date in
an annual basis and makes recommendations on
their knowledge of the legal and professional duties of
remuneration packages and terms of employment to the
board members.
Board. The Remuneration Committee also ratifies the
remuneration packages of the direct reports to the Chief
Ongoing professional development is agreed
Executive Officer.
between the directors and the Chair as part of the
annual review process.
Remuneration packages are reviewed with due regard to
performance and other relevant factors.
Directors’ insurance
The NIWA Group has arranged policies for director’s
Principle 4 Reporting and disclosure
liability insurance which, with a Deed of Indemnity, ensures
The Board should demand integrity both in financial
that generally directors will incur no monetary loss as a
reporting and in the timeliness and balance of disclosures
result of lawful actions undertaken by them as directors.
on entities’ affairs.
Certain actions are specifically excluded; for example,
The NIWA Group reports annually to Parliament on its
incurring penalties and fines which may be imposed in
performance in its Annual Report. A half-yearly report
respect of breaches of the law.
and quarterly progress reports are also prepared for
Shareholding Ministers and performance is measured
Principle 3 Board committees
against the objectives in the SCI. This continuous disclosure
The Board should use committees where this would
is a major contributor to the high standards of information
enhance its effectiveness in key areas while retaining
provided to our shareholders.
board responsibility.
In addition to the statutes applied and the SCI, the Board
Audit and Legislative Compliance Committee
operates under a number of other governance instruments,
The Audit and Legislative Compliance Committee is a sub-
which include:
committee of the Board. During the financial year, the Audit
s
and Legislative Compliance Committee comprised three
s
members of the Board and met formally three times with
the NIWA Chair as an ex-officio member.
s
The core responsibilities of the Audit and Legislative
s
Compliance Committee include:
The quality and integrity of both the internal and external
s
financial reports is reflected in the appropriate disclosures,
relevance, reliability, and comparability.
s
s
Principle 5 Remuneration
s
The remuneration of directors and executives should be
s
transparent, fair, and reasonable.
s
Directors’ remuneration is annually reviewed and
approved by the Shareholding Ministers. Remuneration is
We believe that the audit and legislative compliance
set at levels that are fair and reasonable in a competitive
committee makes a valuable contribution in improving
market for the skills, knowledge, and experience required
governance, the performance, and accountability of the
by the NIWA Group.
NIWA Group. The effectiveness is shown through the
Group’s culture of openness and continuous improvement.
Primarily the annual review is a tool to help boards to
analyse their performance and identify any areas where
The committee believes in independence and objectivity.
performance could be improved. The review assists in the
If an employee or others believe the audit-client relationship
Chair’s succession planning and identification of director
or other audit aspects may be compromised, these
training needs.
concerns can be referred to the committee and should
be received in an open manner.
32
NIWA Annual Report 2008
National Institute of Water & Atmospheric Research Ltd and Group
Corporate governance statement
for the year ended 30 June 2008
Boards are additionally reviewed as a whole through a set of
The numbers of employees (not including directors) whose
performance measures on an on-going basis.
total remuneration exceeded $100,000 is:
Directors’ remuneration received or due and receivable
Group
$
2008 2007
during the year is:
2008 2007
Parent
$’000
$’000
100,000 – 109,999 51
24
110,000 – 119,999 30
10
Directors of the National Institute of Water
120,000 – 129,999 11
6
& Atmospheric Research Ltd
130,000 – 139,999 6
3
140,000 – 149,999 9
2
Sue Suckling (Chair)
72
52
150,000 – 159,999 1
–
John Hercus (Resigned 30 June 2008)
36
26
160,000 – 169,999 4
4
Graham Hill
36
26
170,000 – 179,999 5
1
Ed Johnson
36
26
180,000 – 189,999 –
1
Wendy Lawson
36
25
190,000 – 199,999 –
1
Troy Newton (Resigned 30 June 2008)
36
26
200,000 – 209,999 –
1
John Spencer (Resigned 31 October 2007)
12
33
220,000 – 229,999 2
1
Craig Ellison (Deputy Chair)
250,000 – 259,999 1
–
(Appointed 1 July 2007)
41
–
270,000 – 279,999 1
–
No fees were paid in respect of directors of the subsidiaries
330,000 – 339,000* –
1
NIWA Vessel Management Ltd, NIWA Environmental
420,000 – 429,000* 1
–
Research Institute, NIWA (USA), Incorporated, NIWA
* Chief Executive Officer’s remuneration band.
Australia Pty Ltd, NIWA Natural Solutions Ltd, EcoConnect
Ltd, and Unidata Pty Ltd, other than those shown above.
Principle 6 Risk Management
Remuneration of employees
The Board should regularly verify that the entity has
appropriate processes that identify and manage potential
Adequate remuneration is necessary to attract, retain, and
and relevant risks.
motivate employees.
Risk management has been incorporated into the normal
Additional to salary, other employee benefits include but are
business processes of the NIWA Group, with practices
not limited to:
such as business planning and budgeting, operational
s
management, and project management. Appropriate
s
processes are regularly verified by the Board to identify and
manage potential and relevant risks.
s
The Board reviews the delegations authority framework.
s
The delegations authority framework sets authorities for
s
operational and expenditure delegations, including authority
s
for undertaking treasury activities of the NIWA Group.
The Audit and Legislative Compliance Committee receives
reports on internal audit and risk management reviews. The
committee also meets with the external auditors to discuss
findings from the annual audit.
To assist the NIWA Group to monitor and report on
our legislative compliance obligations, the ComplyWith
software system has been implemented during the
2007– 08 financial year.
NIWA Annual Report 2008
33
National Institute of Water & Atmospheric Research Ltd and Group
Corporate governance statement
for the year ended 30 June 2008
Principle 7 Auditors
Principle 9 Stakeholders’ interests
The Board should ensure the quality and independence
The Board should respect the interests of stakeholders
of the external audit process.
within the context of the entity’s ownership type and its
fundamental purpose.
The appointment of auditors to conduct the statutory
audit, and the annual audit fees, are approved annually
Stakeholders include, but are not limited to, creditors,
by the Auditor-General.
debtors, employees, the New Zealand Government, and
the public.
The Board and the auditors are jointly responsible for
ensuring that the audit is conducted with independence,
Contained within the yearly Sustainability Report,
integrity, and objectivity.
stakeholders are informed by both financial and
non-financial measures on the NIWA Group’s actions
Rotation of audit partners promotes independence and
and performance over the past year and what challenges
objectivity. Audit partners are rotated every six years; the
we face in the future.
2007– 08 year has had an audit partner rotation.
As a responsible and accountable corporate citizen,
To ensure the independence of the external auditors, NIWA
the NIWA Group is committed to maintaining the health
does not consult the external auditor for tax or management
of our environmental systems through the provision
related services and takes care not to make use of the
of sustainability advice and services, and operating in
external auditors for any work which they may need to
a socially and environmentally responsible manner.
evaluate as part of the external audit.
We firmly believe that socially and environmentally
Principle 8 Shareholder relations
sound behaviour contributes to sustained economic
growth and value creation.
The Board should foster constructive relationships
with shareholders that encourage them to engage with
Governance achievements
the entity.
We are continuously seeking to improve NIWA’s
The New Zealand Government is the ultimate shareholder
governance. As part of continuous improvement during
of the NIWA Group, with the Shareholding Ministers holding
2007– 08 we undertook and implemented a more rigorous
the shares.
approach to internal audit. This included reviewing our
Formally outlined in an owner’s expectation manual,
financial internal control process. As a result of this review a
Shareholding Ministers relate their expectations of the
full-time staff member has been employed in this capacity.
Board. This document entails the expectations and
A ComplyWith software system has been implemented
responsibilities of the Board, including Board duties,
during the 2007– 08 financial year to assist with reporting
reporting requirements, financial governance, and how
on our legislative compliance obligations; additionally this
to deal with strategic issues.
will help to identify potential areas for improvement for
Each year, an operating framework is issued to Crown
the future.
Research Institutes. It is the cornerstone document
Our employees are the core ingredient to NIWA success.
through which Shareholding Ministers communicate
With this in mind we have achieved our goal to increase
their yearly expectations.
our interactions with staff by continuing to hold our Board
From the operating framework, the Board develops a
meetings at several of our offices around New Zealand.
Statement of Corporate Intent (SCI) which Shareholding
Holding meetings and luncheons at these different locations
Ministers need to approve before it is tabled in Parliament
has increased the visibility of the Board to all employees.
and becomes a public document. Shareholding Ministers
This further assists with keeping the Board up-to-date with
are then held accountable by Parliament for the
our science, people, and activities.
performance against the Statement of Corporate Intent.
The NIWA Group reports quarterly against its SCI to
the Crown Company Monitoring Advisory Unit, yearly to
Treasury, and half-yearly and yearly annual reports are
generated for shareholders and stakeholders.
34
NIWA Annual Report 2008
National Institute of Water & Atmospheric Research Ltd and Group
Statement of Financial Performance
for the year ended 30 June 2008
Group Group Group
Parent Parent
in thousands of New Zealand dollars Note
2008 2008 2007
2008 2007
Actual Budget Actual
Actual Actual
Revenues and other gains
5
Public Good Science and Technology
Contract
funding
45,453 46,827 44,324
45,453 44,324
Capability
Fund
10,083
10,083 9,094 10,083 9,094
Ministry
of
Fisheries
15,127 16,845 17,183
15,127 17,183
Commercial
49,284 41,539 42,886
39,289 36,892
Share of associate’s net gain/(deficit)
38
50
60
–
–
Dividends from subsidiaries
–
–
–
2,500
7,000
Total
income
119,985 115,344 113,547
112,452 114,493
Operating expenses
6
Employee benefits expense
(55,090)
(52,322)
(50,725)
(49,889)
(45,854)
Other
expenses
(41,060) (39,022) (38,627)
(43,230) (44,375)
Total
operating
expenses
(96,150) (91,344) (89,352)
(93,119) (90,229)
Profit/(loss) before interest, income tax,
depreciation,
and
amortisation
23,835 24,000 24,195
19,333 24,264
Depreciation
(9,714) (9,862) (9,788)
(8,498) (8,426)
Amortisation
(448) (426) (385)
(311) (323)
Profit/(loss) before interest and income tax
13,673
13,712
14,022
10,524
15,515
Interest
income
685 455 364
679 354
Finance expense
(23)
–
(107)
–
(86)
Net interest and other financing costs 7
662 455 257
679 268
Profit/(loss)
before
income
tax
14,335 14,167 14,279
11,203 15,783
Income
tax
credit/(expense)
8
(4,214) (4,652) (4,466)
(2,776) (2,660)
Profit/(loss) for the period
10,121
9,515
9,813
8,427
13,123
Profit/(loss) comprises:
Parent
interest
10,061 9,507 9,805
Minority
interest
22 60 8 8
The accompanying ‘Notes to the Financial Statements’ are an integral part of, and should be read in conjunction with, this
‘Statement of Financial Performance’.
NIWA Annual Report 2008
35
National Institute of Water & Atmospheric Research Ltd and Group
Statement of Recognised Income and Expense
for the year ended 30 June 2008
Group Group Group
Parent Parent
in thousands of New Zealand dollars Note
2008 2008 2007
2008 2007
Actual Budget Actual
Actual Actual
Balance at the beginning of the year
74,339
81,094
64,627
67,684
54,662
Net surplus for the year
Parent 9
10,061
9,507
9,805
8,427
13,123
Minority interest
9
60
8
8
–
–
Total recognised revenues and expenses
10,121
9,515
9,813
8,427
13,123
Distributions to owners
Dividends
10
(187) (835) (101)
(187) (101)
Balance at the end of the year 9
84,273 89,774 74,339
75,924 67,684
The accompanying ‘Notes to the Financial Statements’ are an integral part of, and should be read in conjunction with, this
‘Statement of Recognised Income and Expense’.
36
NIWA Annual Report 2008
National Institute of Water & Atmospheric Research Ltd and Group
Statement of Financial Position
as at 30 June 2008
Group Group Group
Parent Parent
in thousands of New Zealand dollars Note
2008 2008 2007
2008 2007
Actual Budget Actual
Actual Actual
Equity
9
Share
capital
24,799 24,799 24,799
24,799 24,799
Equity
reserves
59,425 65,008 49,551
51,125 42,885
Shareholders’
interest
84,224 89,807 74,350
75,924 67,684
Minority interest
49
(33)
(11)
–
–
Total
equity
84,273 89,774 74,339
75,924 67,684
Non-current liabilities
Unsecured
loans
11 241 414 185
–
–
Employee
entitlements
12 812
1,421 928
725 835
Deferred
tax
liability
13 3,476 1,803 4,424
2,105 2,871
Intercompany 23
–
–
–
10,884
9,587
Total non-current liabilities
4,529
3,638
5,537
13,714
13,293
Current liabilities
Payables and accruals
14
17,284
7,716
16,421
16,625
15,451
Short-term advance facility
15
–
7,400
–
–
–
Employee
entitlements
12 7,607 6,240 8,971
7,118 8,368
Taxation payable
–
523
–
–
–
Total current liabilities
24,891
21,879
25,392
23,743
23,819
Total equity and liabilities
113,693 115,291 105,268
113,381 104,796
Non-current assets
Property, plant, & equipment
16
75,038
85,375
71,336
64,101
60,268
Identifiable intangibles
18
87
82
69
–
–
Investments 22
–
–
–
12,709
13,209
Investments accounted for using
the equity method
22
–
597
559
–
–
Deferred tax asset
13
–
3,782
–
–
–
Receivables
and
prepayments
19 335
– 688
335 688
Total non-current assets
75,460
89,836
72,652
77,145
74,165
Current assets
Cash and cash equivalents
9,303
980
4,138
9,060
3,619
Receivables
and
prepayments
19 20,715 17,896 19,803
19,801 19,148
Taxation
receivable
1,144
– 1,575
1,638 1,935
Uninvoiced
receivables
26 4,471 5,000 4,829
4,466 4,699
Assets held for sale
16
107
–
–
107
–
Inventory
20 2,493 1,579 2,271
1,164 1,230
Total current assets
38,233
25,455
32,616
36,236
30,631
Total
assets
113,693 115,291 105,268
113,381 104,796
For and on behalf of the Board:
Sue Suckling
Craig Ellison
Chair Director
25 August 2008
The accompanying ‘Notes to the Financial Statements’ are an integral part of, and should be read in conjunction with, this
‘Statement of Financial Position’.
NIWA Annual Report 2008
37
National Institute of Water & Atmospheric Research Ltd and Group
Cash Flow Statement
for the year ended 30 June 2008
Group Group Group
Parent Parent
in thousands of New Zealand dollars Note
2008 2008 2007
2008 2007
Actual Budget Actual
Actual Actual
Cash flows from operating activities
Cash was provided from:
Receipts
from
customers
119,978 115,013 108,007
112,804 108,876
Interest
received
686 455 364
679 354
Cash was disbursed to:
Payments to employees and suppliers
(97,208)
(93,662)
(89,337)
(93,746)
(89,800)
Interest paid
(23)
–
(107)
–
(86)
Taxation
paid
(4,731) (4,938) (6,130)
(3,244) (4,466)
Net cash inflow from operating activities
21
18,702 16,868 12,797
16,493 14,878
Cash flows from investing activities
Cash was provided from:
Sale of property, plant, & equipment
95
100
93
95
93
Cash was applied to:
Purchase of property, plant, & equipment
16
(13,527)
(23,331)
(8,760)
(12,455)
(8,290)
Purchase of intangible assets
18
(458)
(470)
(347)
(311)
(323)
Sale
of
associate
500 – – 500 –
Net cash outflow in investing activities
(13,390) (23,701)
(9,014)
(12,171)
(8,520)
Cash flows from financing activities
Cash was applied to:
Dividends paid to shareholders
10
(187)
(835)
(101)
(187)
(101)
Short-term advance facility (repaid)
15
–
–
(600)
–
(600)
Subsidiary loan proceeds
–
–
–
21,129
23,512
Subsidiary loan (repaid)
–
–
–
(19,832)
(26,017)
Net cash outflow from financing activities
(187)
(835)
(701)
1,110
(3,206)
Net increase/(decrease) in cash
and cash equivalents
5,125
(7,668)
3,082
5,432
3,152
Effects of exchange rate changes on the
balance of cash held in foreign currency
40
–
(87)
9
(21)
Opening balance of cash and cash equivalents
4,138
8,648
1,143
3,619
488
Closing cash and cash equivalents balance
9,303
980
4,138
9,060
3,619
Made up of:
Cash
4,303
980
4,138
4,060
3,619
Short-term
deposits
5,000 – –
5,000 –
Closing cash and cash equivalents balance
9,303
980
4,138
9,060
3,619
The accompanying ‘Notes to the Financial Statements’ are an integral part of, and should be read in conjunction with, this
‘Cash Flow Statement’.
38
NIWA Annual Report 2008
National Institute of Water & Atmospheric Research Ltd and Group
Notes to the Financial Statements
for the year ended 30 June 2008
1
Reporting
entity
Application of the following standards and interpretations which are
effective from 1 January 2009 unless otherwise stated will not have any
The National Institute of Water & Atmospheric Research Ltd (NIWA) and
impact on the financial report of the company because they are not
Group is a profit-oriented company registered in New Zealand under the
relevant to the company’s current activities:
Companies Act 1993.
s
The Financial Statements for NIWA and the Group are presented in
accordance with the requirements of the Crown Research Institutes Act
s
1992, the Crown Entities Act 2004, the Public Finance Act 1989, the
accounting periods beginning on or after 1 July 2008)
Companies Act 1993, and the Financial Reporting Act 1993. The NIWA
s
Financial Statements are for the Parent Company as a separate entity.
periods beginning on or after 1 July 2008)
The consolidated (or ‘Group’) Financial Statements comprise NIWA (the
s
‘Parent Company’), its subsidiaries and the Group’s interest in associates
and their interaction (NZ IFRIC 14)
and joint ventures.
s
s
2
Nature of activities
(effective for accounting periods beginning on or after 1 October
2008)
The NIWA Group conducts research in water and atmospheric sciences in
New Zealand and internationally.
s
s
liquidation (NZ IAS 32)
3
Statement of accounting policies
Critical accounting estimates and judgements
Statement of compliance
The preparation of financial statements requires the use of certain critical
The Financial Statements have been prepared in accordance with
accounting estimates and assumptions concerning the future. It also
New Zealand generally accepted accounting practice (NZ GAAP).
requires the company to exercise its judgement in the process of applying
They comply with the New Zealand equivalents to international financial
the Group’s accounting policies.
reporting standards (NZ IFRS) and other applicable financial reporting
Estimates and underlying assumptions are reviewed on an ongoing basis.
standards appropriate for profit-oriented entities.
Revisions to accounting estimates are recognised in the period in which
The Financial Statements comply with international reporting
the estimate is revised and in any future periods affected.
standards (IFRS).
In particular, information about significant areas of estimation uncertainty
and critical judgements in applying accounting policies that have the most
Basis of preparation
significant effect on the amounts recognised in the financial statements is
The measurement basis adopted in the preparation of these financial
included in the following notes:
statements is historical cost, except for financial instruments as identified
s
in specific accounting policies below. Cost is based on the fair value of
consideration given in exchange for assets.
s
The reporting and functional currency used in the preparation of these
s
Financial Statements is New Zealand dollars.
Significant accounting policies
Accounting polices are selected and applied in a manner to ensure that
the resulting financial information meets the concepts of relevance and
The following significant accounting policies have been adopted in the
reliability, ensuring that the substance of the underlying transaction or
preparation and presentation of the financial reports and have been
event is reported.
applied consistently to all periods, unless otherwise stated.
The parent and the consolidated entity changed their accounting policies
(a) Basis of consolidation
on 1 July 2006 to comply with NZ IFRS. This transition is accounted
for in accordance with NZ IFRS-1 First time Adoption of New Zealand
Equivalents to International Financial Reporting Standards, with 1 July
i) Consolidation
of
subsidiaries
2006 as the date of transition. An explanation of the impact of transition
Subsidiaries are those entities controlled by NIWA. The Group’s
on the Financial Statements is discussed in notes 4 and 30.
financial statements have been prepared using the purchase method
The accounting policies have been applied in preparing the Financial
of consolidation. This involves adding corresponding assets, liabilities,
Statements for the year ended 30 June 2008, the comparative information
revenues, and expenses on a line-by-line basis. All intercompany
for the year ended 30 June 2007 and in preparing the opening NZ IFRS
transactions, balances, and unrealised profits are eliminated on
balance sheet as at 1 July 2006, the date of transition.
consolidation. The results of any subsidiaries that become or cease to
be part of the Group during the year are consolidated from the date
Adoption of new and revised standards
that control commenced or until the date that control ceased.
The interest of minority shareholders is stated at the minority’s
Standards and interpretations in issue not yet adopted
proportion of the fair values of the identifiable assets and liabilities
The following new standards and interpretations had been issued at
recognised on acquisition together with the minority interests’ share
reporting date but are not yet effective.
of post acquisition surpluses.
Application of the following standards which are effective from 1 January
2009 unless otherwise stated will require additional disclosure or will
ii) Accounting for associates
have no material impact on the financial statements in the period of initial
An associate is an investee, not being a subsidiary or joint venture
application:
arrangement, over which the Group has the capacity to exercise
s
significant influence, but not control, through participation in the
financial and operating policy decisions of the investee.
s
International Financial Reporting Standards (NZ IFRS 1)
The Group Financial Statements incorporate the Group’s interest in
associates, using the equity method, as from the date that significant
s
influence commenced or until the date the significant influence
accounting periods beginning on or after 1 July 2009)
ceased. The investments are recorded at the lower of carrying value
s
and recoverable amount.
s
The Group recognises its share of the associates’ net surplus or
beginning on or after 1 July 2008)
deficit for the year in its Statement of Financial Performance. The
s
Group recognises its share of other post-acquisition movements in
Investment in a subsidiary, Jointly Controlled Entity or Associate
reserves in its Statement of Changes in Equity. Dividends received
(NZ IAS 27) (effective for accounting periods beginning on or after
from associates are recognised directly against the carrying value of
1 July 2009)
the investment. In the Statement of Financial Position the investment
and the reserves are increased by the Group’s share of the post-
s
acquisition retained surplus and other post-acquisition reserves of the
Reporting Standards
associates. In assessing the Group’s share of earnings of associates,
s
the Group’s share of any unrealised profits between group companies
beginning on or after 1 January 2008)
and associates is eliminated.
NIWA Annual Report 2008
39
National Institute of Water & Atmospheric Research Ltd and Group
Notes to the Financial Statements
for the year ended 30 June 2008
iii) Accounting for joint ventures
Where an impairment loss subsequently reverses, the carrying amount
of the asset is increased to the revised recoverable amount, but only
Joint ventures are joint arrangements between NIWA and another
to the extent that the increased carrying value does not exceed the
party in which there is a contractual agreement to undertake a
carrying amount that would have been recognised if the asset had no
specific business project in which the venturers share joint and
impairment loss recognised in the past. This reversal is recognised to
several liabilities in respect of the costs and liabilities of the project
profit or loss.
and share in any resulting output. NIWA’s share of the assets,
liabilities, revenues, and expenses of the joint ventures is incorporated
into the Parent Company and Group Financial Statements on a
(g) Income tax
line-by-line basis using the proportionate consolidation method.
The income tax expense for the period is the tax payable on the
current period’s taxable income, based on the income tax rate for
(b) Revenue recognition
each jurisdiction. This is then adjusted by changes in deferred tax
assets and liabilities attributable to temporary differences between the
Rendering
of
services
tax bases of assets and liabilities and their carrying amounts in the
financial statements, and changes in unused tax losses.
Revenue from services rendered is recognised in the Statement of
Financial Performance in proportion to the stage of completion of
Deferred tax is accounted for using the balance sheet liability
the transaction at reporting date. The amount of revenue unbilled
method in respect of temporary differences arising from the carrying
is represented by ‘Uninvoiced receivables’, which is stated at the
amount of assets and liabilities in the financial statements and the
proportion to the stage of completion in the Statement of Financial
corresponding tax base of those items. Deferred tax liabilities are
Position. Revenue received but not earned is recognised as revenue
generally recognised for all taxable temporary differences. Deferred
in advance in ‘Payables and accruals’ in the Statement of Financial
tax assets are generally recognised for all deductible temporary
Position.
differences to the extent that it is probable that sufficient taxable
amount will be available against which those deductible temporary
Goods
sold
differences can be utilised.
Revenue from the sale of goods is measured at the fair value of the
Deferred tax liabilities are recognised for the taxable temporary
consideration received or receivable, net of returns and allowances.
differences arising on investment in subsidiaries, associates, and
Revenue is recognised when the significant risk and rewards of
joint ventures, except where the consolidated entity is able to control
ownership have been transferred to the buyer, recovery of the
the reversal of the temporary differences and it is probable that
consideration is probable, the associated costs and possible return
the temporary difference will not reverse in the foreseeable future.
of goods can be estimated reliably, and there is no continuing
Deferred tax assets arising from deductible temporary difference from
management involvement with the goods.
these investments are only recognised to the extent that it is probable
there will be sufficient taxable profits against which to utilise the asset.
Transfers of risks and rewards vary depending on the individual terms
of the contract sale. For sales of instruments, transfer occurs upon
Such assets and liabilities are not recognised if the temporary
receipt by the customer.
difference arises from the initial recognition (other than in a business
combination) of other assets and liabilities in a transaction that affects
Dividend
revenue
neither the taxable profit nor the accounting profit.
Dividend revenue from investments is recognised when the
Deferred tax assets and liabilities are measured at the tax rates that
shareholder’s right to receive payment has been established.
are expected to apply to the period when the asset and liability giving
rise to them are realised or settled, based on the tax laws that have
(c) Government grants
been enacted or substantively enacted at balance date.
Government grants are assistance by the Government in the form
Current and deferred tax is recognised as an expense in the
of transfers of resources to the entity in return for past or future
Statement of Financial Performance, except when it relates to items
compliance with certain conditions relating to the operating activities
credited or debited direct to equity, in which case the deferred or
of the entity. The primary condition is that the Group should undertake
current tax is recognised directly to equity. The carrying amount of
research activities as defined under the contractual agreements which
deferred tax assets is reviewed at each balance date and reduced to
award the funding.
the extent that it is no longer probable that sufficient taxable profits
will be available to allow all or part of the asset to be recovered.
Government grants relating to this funding are recognised as income
in the Statement of Financial Performance on a systematic basis in
(h) Identifiable intangible assets
the equivalent period in which the expense is recognised.
Purchased identifiable intangible assets, comprising copyrights, and
There were no Government grants received during the year.
software, are recorded at cost less amortisation and impairment.
Amortisation is charged on a straight-line basis over their estimated
(d) Goods and Services Tax (GST)
useful lives. Identifiable intangible assets are reviewed for indications
These Financial Statements are prepared on a GST-exclusive basis,
of impairment each year. The estimated useful life and amortisation
except for receivables and payables, which are stated GST inclusive.
method are reviewed each balance date.
The estimated useful life for the copyrights is 5 years.
(e) Employee benefits
The estimated useful life for software is 1 year.
Liabilities for wages and salaries, including non-monetary benefits
and annual leave, long service leave, retirement leave, and training
(i) Development costs
leave are recognised when it is probable that settlement will be
required and they are capable of being measured reliably. Provisions,
Development costs that meet the following criteria are recognised as
in respect of employee benefits, are measured at their nominal
an asset in the Statement of Financial Position:
values using the remuneration rate expected to apply at settlement.
s
Employee benefits are separated into current and non-current
to the product or process can be identified separately and
liabilities. Current liabilities are those benefits that are expected to
measured reliably;
be settled within 12 months of balance date.
s
Provisions made in respect of employee benefits which are not
demonstrated;
expected to be settled within 12 months are measured as the present
s
value of the estimated future cash outflows to be made by the Group
in respect of services provided by employees up to the reporting date.
s
process;
(f) Impairment of assets
s
Intangible and tangible assets that have an indefinite life are not
usefulness to the Group, if it is to be used internally, can be
subject to amortisation and are tested annually for impairment. Assets
demonstrated;
that are subject to amortisation are reviewed for impairment whenever
s
events or changes in circumstances indicate that the carrying amount
demonstrated, to complete the projects and market or use the
may not be recoverable. If such an indication exists, the recoverable
product or process.
amount of the asset is estimated in order to determine the extent of
Capitalisation is limited to the amount which, taken together with
the impairment loss. The recoverable amount is the higher of fair
further related costs, is likely to be recovered from related future
value less cost to sell and value in use.
economic benefits.
If the recoverable amount of the asset is estimated to be less than
its carrying value, the carrying value is reduced to its recoverable
amount. An impairment loss is recognised to the profit or loss.
40
NIWA Annual Report 2008
National Institute of Water & Atmospheric Research Ltd and Group
Notes to the Financial Statements
for the year ended 30 June 2008
When the criteria above no longer apply, the unamortised balance of
ii) Translation of foreign operations
development costs is recognised as an expense.
On consolidation, revenues and expenses of foreign operations are
Development costs recognised as an asset are amortised in the
translated to New Zealand dollars at the average exchange rates
Statement of Financial Performance on a straight-line basis over the
for the period. Assets and liabilities are converted to New Zealand
period of expected benefits.
dollars at the rates of exchange ruling at balance date. Exchange rate
When the unamortised balance of development costs exceeds the
differences arising from the translation of the foreign operations are
recoverable amount, the excess is written down and recognised
recognised in the Statement of Financial Performance.
immediately as an expense.
Goodwill and fair value adjustment arising on the acquisition of a
All other development and research costs are expensed as incurred.
foreign operation are treated as assets and liabilities of the foreign
operations and translated at the exchange rate ruling at balance date.
Subsequent to initial recognition, internally generated intangible assets
are reported at cost less accumulated amortisation and accumulated
(o) Leases
impairment losses, on the same basis as intangible assets acquired
separately.
Leases are classified as finance leases whenever the terms of the
lease transfer a significant portion of all of the risks and rewards of
The estimated useful life is between 1 and 5 years.
ownership to the lessee. All other leases are classified as operating
There were no development costs during the year.
leases.
The Group has not contracted for any leases which would be
(j) Property, plant, and equipment
classified as finance leases.
Property, plant, and equipment (except land and certain buildings)
Operating lease payments are recognised on a systematic basis that is
are stated at historical cost less accumulated depreciation to date less
representative of the benefit to the Group.
any impairment losses. Assets are reviewed annually for indications of
impairment.
(p) Statement of Cash Flows
Expenditure incurred on property, plant, and equipment is capitalised
The Statement of Cash Flows is prepared exclusive of GST, which
where such expenditure will increase or enhance the future economic
is consistent with the method used in the Statement of Financial
benefits provided by the assets’ existing service potential. Expenditure
Performance. Operating activities comprise the provision of research
incurred to maintain future economic benefits is classified as repairs
services, consultancy, and manufacture of scientific instruments and
and maintenance.
other activities that are not investing or financing activities. Investing
activities comprise the purchase and disposal of property, plant,
(k) Depreciation
and equipment and advances to subsidiaries. Financing activities
Property, plant, and equipment, except for freehold land and work in
are those which result in changes in the size and composition of the
progress, are depreciated on a straight-line basis at rates estimated
capital structure of the Group.
to write off the cost of the property, plant, and equipment over their
Cash and cash equivalents comprise cash on hand; cash in banks
estimated useful lives, which are as follows:
and investments in money market, net of outstanding bank drafts.
Buildings & leasehold improvements
(q) Net interest and other financing costs
Buildings 40
years
Leasehold improvements, freehold property
10 years
Finance income comprises interest income on funds invested and
Leasehold improvements, rented property
5 years
gains on hedging instruments that are recognised in the Statement of
Financial Performance. Interest income is recognised as it accrues,
Vessels
using the effective interest method.
RV
Tangaroa hull
26 years
Finance expenses compromise interest expense on borrowings and
RV
Kaharoa hull
16 years
losses on hedging instruments that are recognised in the Statement of
Financial Performance. All borrowing costs are recognised using the
Plant & equipment
effective interest method.
Plant & equipment
10 years
Scientific equipment
4 years
(r) Financial instruments
Derivative
financial
instruments
Electronic data processing equipment
Supercomputer 5
years
The Group uses derivative financial instruments to hedge its exposure
Electronic data processing equipment
3 years
to foreign exchange and interest rate risks arising from operational,
financing and investing activities.
Office equipment
5 years
Derivative financial instruments such as forward exchange contracts
Furniture & fittings
10 years
are initially recognised in the Statement of Financial Position at fair
Motor vehicles
4 years
value and transaction costs are expensed immediately. Subsequent
Small boats
5 years
to initial recognition, derivative financial instruments are stated
at fair value. The gain or loss on remeasurement to fair value is
(l) Receivables
recognised immediately in the Statement of Financial Performance.
Receivables are classified as loans and receivables.
However, where derivatives qualify for hedge accounting, recognition
Loans and receivables are stated at amortised cost using the effective
of any resultant gain or loss depends on the nature of the hedging
interest rate, less any impairment.
relationship.
Collectability of receivables is reviewed on an ongoing basis. Debts
1) Cash flow hedges:
which are known to be uncollectable are written off against the
Changes in the fair value of the derivative hedging instrument
provision, once approved by the Board of Directors. A provision for
designated as a cash flow hedge are recognised directly in equity
doubtful debts is established when there is objective evidence that
to the extent that the hedge is effective. If the hedge is ineffective,
the Group will not be able to collect all amounts due according to the
changes in the fair value are recognised in the Statement of
original terms of receivables. Changes in the carrying amount of the
Financial Performance.
provision are recognised in the Statement of Financial Performance.
There were no derivative financial instruments outstanding at
30 June 2008.
(m) Inventory
Inventory is stated at the lower of cost and net realisable value. Cost is
Non-derivative financial instruments
calculated on the weighted average basis for consumables and first in
Non-derivative financial instruments comprise investments in equity
first out (FIFO) for finished goods and work in progress.
and debt securities, trade and other receivables, cash and cash
equivalents, loans and borrowings, and trade and other payables.
(n) Foreign currencies
Subsequent to initial recognition, investments in subsidiaries are
i)
Transactions
measured at cost. Investments in associates are accounted for under
the equity method in the consolidated financial statements and
Transactions in foreign currencies are converted to the functional
recorded at cost in the parent’s financial statements.
currency of New Zealand dollars by applying the foreign currency
amount, to the spot exchange rate between the functional currency
and the foreign currency at the date of transaction. Monetary assets
and liabilities are translated to New Zealand dollars using the closing
rate of exchange at balance date, and any exchange gains or losses
are taken to the Statement of Financial Performance.
NIWA Annual Report 2008
41
National Institute of Water & Atmospheric Research Ltd and Group
Notes to the Financial Statements
for the year ended 30 June 2008
Other financial assets are classified into the following specified
Other financial liabilities are subsequently measured at amortised cost
categories; classification depends on the nature and purpose of the
using the effective interest method, with interest expense recognised
financial asset and is determined at the time of initial recognition and
on an effective interest basis.
re-evaluates this designation at each reporting date:
The effective interest method is the method of calculating the
1) Financial assets at fair value through profit or loss:
amortised cost of a financial liability and of allocating interest expense
Financial assets held for trading purposes are classified as
over the relevant period. The effective interest rate is the rate that
current assets and are stated at fair value, and changes
exactly discounts estimated future cash payments through the
resulting in a gain or loss are recognised in the Statement of
expected life of the financial liability, or, where appropriate, a shorter
Financial Performance.
period to the net carrying amount of the financial liability.
2) Held to maturity investments:
Held to maturity investments are fixed or have determinable
4
Transition to NZ IFRS
payments and fixed maturities that the Group has the positive
intention and ability to hold to maturity. These are recorded
Application of NZ IFRS 1
at amortised cost using the effective interest method less
The financial statements for the year ended 30 June 2008 are the first
impairment; revenue is recognised on an effective yield basis.
annual financial statements that comply with NZ IFRS. The financial
3) Available for sale financial assets:
statements have been prepared as described in note 3. The Group has
Available for sale investments are stated at fair value less
applied NZ IFRS 1 in preparing the consolidated financial statements.
impairment. Gains and losses arising from changes in fair
The Group’s and the company’s transition date was 1 July 2006 and the
value are recognised directly to a revaluation reserve until
opening NZ IFRS Statement of Financial Position is prepared at that date.
the investment is disposed of or determined to be impaired,
The reporting date of these financial statements is 30 June 2008. The
at which time the accumulated gain or loss is recognised in
Group and the company has restated the 2007 comparative figures as set
the Statement of Financial Performance.
out in the financial statements for compliance with NZ IFRS.
4) Loans and receivables:
In preparing the consolidated financial statements in accordance with
Loans and receivables have fixed or determinable payments
NZ IFRS 1, the Group has applied the mandatory exceptions and certain
that are not quoted in an active market. They arise when the
optional exemptions from full retrospective application from NZ IFRS.
Group provides money, goods, or services directly to a debtor
The Group has elected to apply the following optional exemptions from full
with no intention of selling the receivable. They are included
retrospective application.
in current assets, except for those with maturities greater than
12 months after the Statement of Financial Position which are
a) Cumulative translation differences exemption
classified as a non-current asset. These are recorded at amortised
The Group has elected to set the cumulative translation differences for
cost less impairment.
all foreign subsidiaries to zero at 1 July 2006.
Impairment of financial assets
b) Fair value as deemed cost exemption
Financial assets, other than those at fair value, are assessed for
The Group has elected to measure certain items of property, plant and
indicators of impairment at each balance date. Financial assets are
equipment at fair value as at 1 July 2006 and use that fair value as its
impaired where there is objective evidence that, as a result of one or
deemed cost as at 1 July 2006.
more events that occurred after the initial recognition of the financial
asset, the estimated future cashflows of the investment have been
impacted.
c) Business combinations exemption
The Group has applied the business combinations exemption in
Financial
liabilities
NZ IFRS 1. Business combinations that took place prior to the 1 July
2006 transition date have not been restated.
Financial liabilities are classified as either financial liabilities at fair
value or other financial liabilities.
Financial liabilities are classified as at fair value where the liability is
either held for trading or it is designated as at fair value. A financial
liability is classified as held for trading if:
s
the near future; or
s
instrument; or
s
Group manages together and has a recent actual pattern of short-
term profit-making.
A financial liability other than a financial liability held for trading may
be designated as at fair value upon recognition if:
s
measurement or recognition inconsistency that would otherwise
arise; or
s
financial liabilities or both, which is managed and its performance
is evaluated on a fair value basis, in accordance with either the
Group’s documented risk management or investment strategy,
and information about the grouping is provided internally on that
basis; or
s
derivatives, and it is allowable to be designated at fair value.
Financial liabilities at fair value are stated at fair value with any
resultant gain or loss recognised in the Statement of Financial
Performance. This incorporates any interest paid on the
financial liability.
Other financial liabilities, including borrowings, are initially measured
at fair value, net of transaction costs.
42
NIWA Annual Report 2008
National Institute of Water & Atmospheric Research Ltd and Group
Notes to the Financial Statements
for the year ended 30 June 2008
5
Revenues and other gains
in thousands of New Zealand dollars
Group Group
Parent Parent
2008 2007
2008 2007
Sale
of
goods
14,129 9,790 2,732 2,314
Rendering
of
services
105,837 103,629 107,142 105,179
Dividends 2
–
2,502
7,000
Total
operating
revenue
119,968 113,419 112,376 114,493
Other gains
16
128
76
–
Total operating revenue and other gains
119,985
113,547
112,452
114,493
Revenue for the 2008 and 2007 period are generated from continuing operations.
6
Operating
expenses
Operating expenses
Operating expenses include:
Rental and operating lease costs
1,045
1,232
986
1,215
Remuneration
of
directors
304 259 304 254
Net (gain)/loss on sale of property, plant, & equipment
21
161
(76)
10
Net (gain)/loss on sale of associates
97
(93)
–
–
Bad debts written off
14
–
14
–
Movement within doubtful debt provision
(48)
18
(48)
18
(Gain)/loss on foreign currency cash held
40
(87)
9
(21)
Impairment on intercompany advances
–
–
–
240
Auditors’ remuneration
Auditors’ remuneration to Deloitte comprise:
Audit of the financial statements
113
103
95
93
Other
assurance
services
– – – –
Total auditors’ remuneration
113
103
95
93
7
Net interest and other financing costs
Interest income on bank deposits
685
364
679
354
Interest
income
on
debtors
– – – –
Finance
income
685 364 679 354
Interest
paid
by
subsidiary
companies
– – – –
Finance expense
23
107
–
86
Net interest and other financing costs
662
257
679
268
8
Income
tax
The income tax expense is determined as follows:
Income tax expense
Current
tax
5,110 4,580 3,469 2,669
Deferred
tax
(896) (114) (693)
(9)
Income
tax
expense
4,214 4,466 2,776 2,660
Reconciliation of income tax expense
Operating profit before income tax
14,335 14,279 11,203 15,783
Tax at current rate of 33%
4,731
4,712
3,697
5,208
Adjustments to taxation:
Intercompany dividends
–
–
(750)
(2,310)
Share of associate’s net gain
11
20
–
–
Other non deductible expenses
63
10
18
90
Deferred tax adjustment for tax rate decrease
–
(442)
–
(287)
Under/(over) provision in previous year
(591)
166
(189)
(41)
Income
taxation
expense
4,214 4,466 2,776 2,660
The 2007 budget introduced the reduction in the company tax rate from 33% to 30% from 1 July 2008. The rate reduction impacts
the deferred tax calculation for the 2007 year. The change recognised from the reduction of the rate on deferred tax is recognised in
the taxation expense in the income statement.
NIWA Annual Report 2008
43
National Institute of Water & Atmospheric Research Ltd and Group
Notes to the Financial Statements
for the year ended 30 June 2008
9
Equity
Group equity
Share Retained Minority
Total
in thousands of New Zealand dollars capital
earnings
interest
equity
Balance at 1 July 2007
24,799
49,551
(11)
74,339
Total recognised income and expenses
–
10,061
60
10,121
Dividends to equity holders
–
(187)
–
(187)
Balance at 30 June 2008
24,799
59,425
49
84,273
Balance at 1 July 2006
24,799
39,847
(19)
64,627
Total recognised income and expenses
–
9,805
8
9,813
Dividends to equity holders
–
(101)
–
(101)
Balance at 30 June 2007
24,799
49,551
(11)
74,339
Parent equity
Share Retained
Total
in thousands of New Zealand dollars capital
earnings
equity
Balance at 1 July 2007
24,799
42,885
67,684
Total recognised income and expenses
–
8,427
8,427
Dividends to equity holders
–
(187)
(187)
Balance at 30 June 2008
24,799
51,125
75,924
Balance at 1 July 2006
24,799
29,863
54,662
Total recognised income and expenses
–
13,123
13,123
Dividends to equity holders
–
(101)
(101)
Balance at 30 June 2007
24,799
42,885
67,684
9a
Share Capital
in thousands of New Zealand dollars
Group Group
Parent Parent
2008 2007
2008 2007
Issued and fully-paid capital
24,799
24,799
24,799
24,799
24,798,700 ordinary shares (2007 24,798,700 ordinary shares)
All shares carry equal voting and distribution rights; if the company is to be wound down, all shares are distributed equally amongst
the shareholders.
10
Dividends
Payments were made on:
31 January 2007
–
(101)
–
(101)
22
May
2008
(187) –
(187) –
These dividend payments were made to the Government of New Zealand (the Crown) as the sole shareholder.
11
Unsecured loan
Shareholder loan
241
185
–
–
The loan is unsecured and relates to a vendor finance agreement on the acquisition of a subsidiary, Unidata Pty Ltd. The loan
is not subject to any interest charge. Repayment will be made when, and in such amounts as, the cash flow and profitability
of Unidata Pty Ltd permit, with full repayment due on 7 May 2014. The loan is valued using the effective interest rate method;
interest expense is recognised on an effective yield basis annually.
44
NIWA Annual Report 2008
National Institute of Water & Atmospheric Research Ltd and Group
Notes to the Financial Statements
for the year ended 30 June 2008
12
Provision for employee entitlements
in thousands of New Zealand dollars
Group Group
Parent Parent
2008 2007
2008 2007
Accrued remuneration
Salary
accrual
1,629 4,129 1,451 3,876
Annual
leave
4,786 3,561 4,494 3,318
Training leave
97
210
97
210
Long service leave
1,094
1,071
1,076
964
Retirement
leave
813 928 725 835
Total employee entitlement provision
8,419
9,899
7,843
9,203
Comprising:
Current
7,607 8,971 7,118 8,368
Non-current
812 928 725 835
The provisions for long service leave, retirement leave, and training leave are dependent upon a number of factors that are
determined by the expected employment period of employees, current remuneration, and the timing of employees using the
benefits. Any changes in these assumptions will impact on the carrying amount of the liability.
In determining long service leave the employment period is based upon historical length of service to determine the appropriate
liability. Training leave is based upon historical usage of the benefit to calculate the likelihood of further benefits incurring.
Balance at the beginning of the year
9,988
9,477
9,203
8,797
Additional
provision
recognised
2,901 4,067 2,562 3,568
Amount
utilised
(4,470) (3,645) (3,922) (3,162)
Balance at the end of the year
8,419
9,899
7,843
9,203
13
Deferred tax liability and assets
13a
Deferred tax liability
The balance comprises temporary differences attributable to:
Amounts recognised in profit or loss
Provisions and prepayments
(678)
(42)
(527)
32
Depreciation
4,154 4,466 2,632 2,839
3,476 4,424 2,105 2,871
Amounts recognised directly in equity
Cash
flow
hedges
– – – –
Deferred
tax
liabilities
– – – –
Movements
Balance at the beginning of the year
4,424
4,538
2,871
2,880
Under-provided
in
prior
years
(52) –
(73) –
Charged to the Statement of Financial Performance
(896)
(114)
(693)
(9)
Balance at the end of year
3,476
4,424
2,105
2,871
13b
Imputation credits
The NIWA Group is not required to establish or maintain an imputation credit account by virtue of its classification as a Crown
Research Institute. The Income Tax Act (2004) confirms this requirement.
14
Payables and accruals
Trade
payables
10,221 9,341 9,531 8,476
Revenue
in
advance
7,063 7,080 7,094 6,975
Total
17,284 16,421 16,625 15,451
Trade payables are payable per creditor terms.
Revenue in advance relates to contracted services which have been billed in advance, yet not recognised as revenue in the Financial
Statement of Performance.
Assumptions underlying the revenue in advance include the performance of employees to complete the contract in the future specified
time frames, internal procedures, and the review of the procedures which calculate the revenue in advance.
15
Short-term advance facility
A short-term advance facility is available from Westpac Banking Corporation.
Advance
facility
– – – –
The facility is unsecured, but subject to various covenants that were complied with during the year. The facility is operated on an
on-call basis with a limit available to borrow of $3.5 million.
NIWA Annual Report 2008
45
National Institute of Water & Atmospheric Research Ltd and Group
Notes to the Financial Statements
for the year ended 30 June 2008
16
Property, plant, and equipment
Buildings
&
leasehold
Plant
&
in thousands of New Zealand dollars Land
improvements
Vessels
equipment
Group
Cost
Balance at 1 July 2007
12,429
41,960
18,423
53,677
Additions –
1,153
–
7,827
Transfers –
(565)
–
20
Disposals –
(23)
–
(903)
Foreign
currency
– – – 7
Balance at 30 June 2008
12,429
42,526
18,423
60,627
Accumulated depreciation and impairment losses
Balance at 1 July 2007
–
9,046
8,781
41,081
Depreciation charge
–
2,166
739
4,303
Impairment –
45
–
6
Transfers –
(459)
–
–
Disposals –
(23)
–
(890)
Balance as at 30 June 2008
–
10,778
9,520
44,500
Net book value at 30 June 2008 12,429
31,748
8,903
16,127
Group
Cost
Balance at 1 July 2006
12,429
40,853
18,423
49,594
Additions –
1,171
–
4,496
Transfers
– – –
679
Disposals –
(64)
–
(1,092)
Balance at 30 June 2007
12,429
41,960
18,423
53,677
Accumulated depreciation and impairment losses
Balance at 1 July 2006
–
6,358
8,042
38,241
Depreciation charge
–
2,752
739
3,932
Impairment
– – – –
Disposals –
(64)
–
(1,092)
Balance as at 30 June 2007
–
9,046
8,781
41,081
Net book value at 30 June 2007 12,429
32,914
9,642
12,596
Parent
Cost
Balance at 1 July 2007
12,429
41,781
–
47,117
Additions –
1,153
–
7,460
Transfers –
(566)
–
–
Disposals –
(23)
–
(903)
Balance at 30 June 2008
12,429
42,346
–
53,674
Accumulated depreciation and impairment losses
Balance at 1 July 2007
–
8,924
–
35,561
Depreciation charge
–
2,153
–
3,995
Transfers –
(459)
–
–
Impairment –
45
–
6
Disposals –
(23)
–
(890)
Balance as at 30 June 2008
–
10,640
–
38,673
Net book value at 30 June 2008 12,429
31,705
–
15,001
Parent
Cost
Balance at 1 July 2006
12,429
40,663
–
43,381
Additions –
1,125
–
5,438
Transfers
– – –
(606)
Disposals –
(7)
–
(1,096)
Balance at 30 June 2007
12,429
41,781
–
47,117
Accumulated depreciation and impairment losses
Balance at 1 July 2006
–
6,238
–
33,044
Depreciation charge
–
2,693
–
3,613
Impairment
– – – –
Disposals –
(7)
–
(1,096)
Balance as at 30 June 2007
–
8,924
–
35,561
Net book value at 30 June 2007 12,429
32,857
–
11,556
46
NIWA Annual Report 2008
Electronic data
processing Office
Furniture
&
Motor Small
Work
in
equipment equipment
fittings
vehicles
boats
progress
Total
16,020 6,770 1,961 3,416 1,439 604
156,699
1,315 579 265 498 362
1,529
13,527
11 3
(17) 2 – –
(549)
(829)
(159) –
(348)
(16) –
(2,279)
8 2 6 1 – –
27
16,525 7,193 2,215 3,569 1,786 2,133
167,425
14,641 6,331 1,860 2,478 1,145
–
85,363
1,303 525 54 473 100
–
9,663
– – – – – –
51
– – – – – –
(459)
(798)
(159) –
(344)
(17) –
(2,231)
15,145 6,696 1,914 2,607 1,228
–
92,387
1,380 497 301 962 558
2,133
75,038
16,220 6,626 1,971 3,253 1,283 754
151,406
1,336 478
4 463 206 606
8,760
– 9 (9) – –
(756)
(77)
(1,536) (343)
(5) (300) (50)
–
(3,390)
16,020 6,770 1,961 3,416 1,439 604
156,699
14,755 6,317 1,826 2,302 1,124
–
78,965
1,422 357 39 476 71
–
9,788
– – – – – – –
(1,536) (343)
(5) (300) (50)
–
(3,390)
14,641 6,331 1,860 2,478 1,145
–
85,363
1,379 439 101 938 294 604
71,336
14,792 6,479 1,534 3,298 1,191 606
129,227
1,296 564 246 468 362 907
12,455
– – – – – –
(566)
(829)
(159) –
(348)
(16) –
(2,276)
15,259 6,884 1,780 3,418 1,537 1,513
138,840
13,553 6,163 1,458 2,375 925
–
68,959
1,222 480 43 464 91
–
8,447
– – – – – –
(459)
– – – – – –
51
(827)
(159) –
(344)
(17) –
(2,259)
13,947 6,483 1,501 2,495 998
–
74,739
1,312 401 279 923 537
1,513
64,101
15,091 6,456 1,540 3,134 1,053 617
124,364
1,252 364
3 467 188 (547)
8,290
– – – – –
536
(70)
(1,551) (341)
(9) (303) (50)
–
(3,357)
14,792 6,479 1,534 3,298 1,191 606
129,227
13,885 6,172 1,428 2,204 920
–
63,891
1,219 332 39 474 55
–
8,426
– – – – – – –
(1,551) (341)
(9) (303) (50)
–
(3,357)
13,553 6,163 1,458 2,375 925
–
68,959
1,239 316 76 923 266 606
60,268
NIWA Annual Report 2008
47
National Institute of Water & Atmospheric Research Ltd and Group
Notes to the Financial Statements
for the year ended 30 June 2008
16
Property, plant, and equipment (continued)
Assumptions underlying the estimated useful lives of assets include timing of technological obsolescence and future utilisation plans.
Assets held for sale
in thousands of New Zealand dollars
Group Group
Parent Parent
2008 2007
2008 2007
Property
107 –
107 –
Total
107 –
107 –
Property was reclassified from plant, property, and equipment to assets held for sale if their carrying amount will be recovered
through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly
probable and the asset is available for immediate sale in its present condition. Management must be committed to the sale, which
should be expected to qualify for recognition as completed within one year from the date of classification.
16a
Vessels
As agreed with the shareholders, an amount has been identified within the Group for any shortfall between the current insured
value of $40 million and the estimated replacement cost of RV
Tangaroa, in the event of the loss of that vessel. This has not been
provided for in the Statement of Financial Position.
17
Heritage assets
NIWA has one collection and three databases that have been defined as heritage assets. Heritage assets are those assets held for
the duration of their physical lives because of their unique scientific importance.
NIWA has the following heritage assets:
Type Description
Marine Benthic Biology Collection
A national reference collection for marine invertebrates.
National Climate Database
A national electronic database of high quality climate information,
including temperatures, rainfall, wind, and other climate elements.
Water Resources Archive Database
A national electronic database of river and lake locations throughout
New Zealand, including levels, quality, and flows.
New Zealand Freshwater Fish Database
A national electronic database of the occurrence of fish in the fresh
waters of New Zealand, including major offshore islands.
The nature of these heritage assets, and their significance to the science NIWA undertakes, makes it necessary to disclose them.
In the directors’ view the value of these heritage assets cannot be assessed with any reliability, and accordingly these assets have
not been valued for reporting purposes.
18
Identifiable intangibles
in thousands of New Zealand dollars
Software
Copyrights
Total
Group
Cost
Balance as at 1 July 2007
4,775
165
4,940
Additions
408
50
458
Disposals
(116)
–
(116)
Currency
movements
– – –
Balance as at 30 June 2008
5,067
215
5,282
Accumulated amortisation and impairment losses
Balance as at 1 July 2007
4,775
96
4,871
Amortisation
408
40
448
Impairment
– – –
Disposals
(116)
–
(116)
Currency movements
–
(8)
(8)
Balance as at 30 June 2008
5,067
128
5,195
Net book value at 30 June 2008
–
87
87
Identifiable intangibles such as copyrights and trademarks are amortised over their estimated useful lives.
48
NIWA Annual Report 2008
National Institute of Water & Atmospheric Research Ltd and Group
Notes to the Financial Statements
for the year ended 30 June 2008
18
Identifiable intangibles (continued)
Group
in thousands of New Zealand dollars
Software
Copyrights
Total
Cost
Balance as at 1 July 2006
4,526
165
4,691
Additions
347
–
347
Disposals
(98)
–
(98)
Currency movements
–
–
–
Balance as at 30 June 2007
4,775
165
4,940
Accumulated amortisation and impairment losses
Balance as at 1 July 2006
4,526
48
4,574
Amortisation
347
38
385
Impairment
–
–
–
Disposals
(98)
–
(98)
Currency movements
–
10
10
Balance as at 30 June 2007
4,775
96
4,871
Net book value at 30 June 2007
–
69
69
Parent
Cost
Balance as at 1 July 2007
4,575
–
4,575
Additions
311
–
311
Disposals
(117)
–
(117)
Currency movements
–
–
Balance as at 30 June 2008
4,769
–
4,769
Accumulated amortisation and impairment losses
Balance as at 1 July 2007
4,575
–
4,575
Amortisation
311
–
311
Impairment
–
–
–
Disposals
(117)
–
(117)
Currency movements
–
–
–
Balance as at 30 June 2008
4,769
–
4,769
Net book value at 30 June 2008
–
–
–
Parent
Cost
Balance as at 1 July 2006
4,347
–
4,347
Additions
323
–
323
Disposals
(95)
–
(95)
Currency movements
–
–
–
Balance as at 30 June 2007
4,575
–
4,575
Accumulated amortisation and impairment losses
Balance as at 1 July 2006
4,347
–
4,347
Amortisation
323
–
323
Impairment
–
–
–
Disposals
(95)
–
(95)
Currency movements
–
–
–
Balance as at 30 June 2007
4,575
–
4,575
Net book value at 30 June 2007
–
–
–
NIWA Annual Report 2008
49
National Institute of Water & Atmospheric Research Ltd and Group
Notes to the Financial Statements
for the year ended 30 June 2008
19
Receivables and prepayments
in thousands of New Zealand dollars
Group Group
Parent Parent
2008 2007
2008 2007
Trade
receivables
20,049 19,787 19,159 19,209
Provision for doubtful debts
(10)
(58)
(10)
(58)
Prepayments
1,011 762 987 685
Total
21,050 20,491 20,136 19,836
Classified as:
Non-current
335 688 335 688
Current
20,715 19,803 19,801 19,148
21,050 20,491 20,136 19,836
Included in the Group’s trade receivables balance at the end of the year is one debtor’s balance which equates to 35% (2007
41%) of the total trade receivables balance. Contracts with the Crown-owned debtor specify retentions are held on each invoice
until the individual contracts are complete, which can take up to 5 years. The non-current component of receivables relates to
the long-term portion of these contract retentions.
A large proportion of the Group’s commercial customers are from central, local government, and private sectors which have little
perceived risk associated with them.
Before accepting a new customer, a credit check is undertaken when deemed appropriate to ensure validity of the customer before
any service or goods are provided to the customer.
The Group reserves the right to charge interest at a rate of 2% per month, calculated daily, on all invoices remaining unpaid at the
due date.
Included in the Group’s trade receivable balance are debtors with a carrying amount of $1,203k (2007 $700k) which are past due
at the reporting date for which the Group has not provided as the amounts are still considered recoverable. The Group does not
hold any collateral over these balances.
Included in the Parent’s trade receivable balance are debtors with a carrying amount of $1,198k (2007 $566k) which are past due
at the reporting date for which the Parent has not provided as the amounts are still considered recoverable. The Parent does not
hold any collateral over these balances.
The below balances indicate the past due receivables which have not been provided for as the amounts are still recoverable.
The balances below exclude the Crown-owned debtor who has a significant amount owing to the Group as indicated above for
which management have indicated there is no perceived credit risk.
Ageing past due trade receivables
60–90
days
325 300 325 218
91–180
days
725 365 720 313
Over 181 days
153
35
153
35
1,203 700
1,198 566
Included in the provision for doubtful debts are individually selected debtors $10k (2007 $58k) for the Group and the Parent
which are unlikely to be recoverable and were all over 181 days overdue. The provision recognises the difference between the
carrying amount of these trade receivables and the expected recoverable amount. The net carrying amount is considered to
approximate their fair value.
Movement in the provision for doubtful debts
Balance at the beginning of the year
58
41
58
41
Impairment loss recognised
–
56
–
56
Impairment losses reversed
–
–
–
–
Amounts written off as uncollectible
(35)
–
(35)
–
Amounts recovered during the year
(13)
(39)
(13)
(39)
10 58 10 58
20
Inventory
Consumables 1,054
389
–
16
Finished goods
1,139
1,325
948
1,103
Work in progress
300
557
216
111
Total
2,493 2,271 1,164 1,230
Inventories are not pledged as security for liabilities, nor are any inventories subject to retention of title clauses.
50
NIWA Annual Report 2008
National Institute of Water & Atmospheric Research Ltd and Group
Notes to the Financial Statements
for the year ended 30 June 2008
21
Reconciliation of the profit for the period to net cash from operating activities
in thousands of New Zealand dollars
Group Group
Parent Parent
2008 2007
2008 2007
Profit
for
the
period
10,061 9,805 8,427
13,123
Add/(less) items classified as investing activities
Net loss/(gain) on disposal of property, plant, & equipment
21
161
(76)
10
Net loss/(gain) on disposal of associate
97
(93)
–
–
118 68 (76) 10
Add/(less) non-cash items
Share of associate’s (profit)/deficit for the year
(38)
(62)
–
–
Depreciation
and
impairment
9,714 9,788 8,498 8,426
(Surplus)/deficit attributable to minority interests
(60)
(8)
–
–
Amortisation
of
identifiable
intangibles
448 385 311 323
Unrealised changes in the value of subsidiaries
57
18
–
–
(Gain)/loss on foreign currency cash held
(40)
87
(9)
21
Increase/(decrease) in employee entitlements
(116)
(73)
(110)
(79)
Increase/(decrease) in deferred tax liability
(948)
(114)
(766)
(8)
(Increase)/decrease in deferred tax asset
–
–
–
–
9,017 10,021 7,924 8,683
Add/(less) movements in working capital items
Increase/(decrease)
in
payables
and
accruals
862 (771)
1,174 (397)
Increase/(decrease) in employee entitlements
(1,364)
495
(1,252)
485
(Increase)/decrease
in
receivables
and
prepayments
(559) (2,187) (300) (2,294)
(Increase)/decrease in inventory and uninvoiced receivables
136
(3,059)
299
(2,935)
(Increase)/decrease in taxation receivable
431
(1,575)
297
(1,797)
(494) (7,097)
218 (6,938)
Net cash flows from operating activities
18,702
12,797
16,493
14,878
22
Investments
Investment
in
subsidiaries
–
– 12,709 12,709
Investment in associates
–
559
–
500
– 559
12,709
13,209
Investments in subsidiaries
Ownership
and
voting
interest
Name Principal
activities
2008 2007
%
%
NIWA Vessel Management Ltd
Vessel charters for scientific research
100
100
NIWA Natural Solutions Ltd
Commercialisation of NIWA products
100
100
NIWA Australia Pty Ltd
Scientific research and consultancy services
100
100
NIWA Environmental Research Institute
Scientific research and consultancy services
100
100
NIWA (USA), Incorporated
Scientific research and consultancy services
100
100
Unidata Pty Ltd
Supplier of environmental technology products
80
80
EcoConnect Ltd
Non-trading shell company
100
100
All subsidiaries have a balance date of 30 June.
NIWA Vessel Management Ltd, NIWA Natural Solutions Ltd, and EcoConnect Ltd are the only subsidiaries incorporated in
New Zealand. NIWA Australia Pty Ltd and Unidata Pty Ltd are incorporated in Australia. NIWA (USA), Incorporated and NIWA
Environmental Research Institute are incorporated in the USA.
NIWA has an A$100 equity investment in NIWA Australia Pty Ltd, a US$1 equity investment in NIWA (USA), Incorporated, and
an A$250,000 equity investment in Unidata Pty Ltd. NIWA has no equity investment in NIWA Environmental Research Institute
(non-stock corporation). NIWA Environmental Research Institute is a not-for-profit entity which has been classified as a publicly
supported organisation by the Internal Revenue Service, and as such is exempt from US federal income tax. NIWA Environmental
Research Institute conducts scientific research with a federal or state focus in the USA.
EcoConnect Ltd has an authorised share capital of $300,000, divided into 300 000 ordinary shares of $1.00 each, all of which
have been issued, are unpaid, and are beneficially owned by NIWA at 30 June 2008. EcoConnect Ltd had not commenced trading
by 30 June 2008.
No shares in subsidiaries were disposed of during the year ended 30 June 2008.
Investments in associates, equity accounted
Ensid Investments Ltd and Ensid Technologies Ltd were sold on 29 September 2006. These were both incorporated in
New Zealand with their principal activities being intellectual property investments and commercialisation of intellectual
property respectively.
The NIWA Group acquired 50% ownership in CRL Energy Ltd on 1 April 2006. This was incorporated in New Zealand with
the principal activity being energy and environmental research.
The Group’s share of profit in the equity accounted associate for the year was $38k (2007 $62k).
CRL Energy Ltd was sold on 30 June 2008.
NIWA Annual Report 2008
51
National Institute of Water & Atmospheric Research Ltd and Group
Notes to the Financial Statements
for the year ended 30 June 2008
22
Investments (continued)
Movements in the carrying value of equity accounted associates
in thousands of New Zealand dollars
Group Group
2008 2007
Balance at 1 July
559
497
Share
of
profit/(loss)
38 62
Sale of Ensid Investments Ltd
–
(61)
Sale of Ensid Technologies Ltd
–
(32)
Sale of CRL Energy Ltd
(500)
–
(Loss)/
gain
on
sale
(97) 93
Balance at 30 June
– 559
23
Intercompany
in thousands of New Zealand dollars
Parent Parent
2008 2007
NIWA non-current liability
10,884
9,587
An amount of $12.0 million is held by the Parent Company (NIWA) on behalf of NIWA Vessel Management Ltd. This is consistent
with the Group policy that all surplus funds are managed by NIWA. This amount is offset by Parent Company receivables and
advances to NIWA Australia Pty Ltd of $298,277, NIWA Environmental Research Institute of $56,957, NIWA (USA), Incorporated
of $6,969, NIWA Natural Solutions Ltd of $30,537, and Unidata Pty Ltd of $809,915, resulting in a net non-current liability of
$10.8 million. All balances are unsecured and have no set repayment terms, but are not expected to be repaid within one year
of balance date. The balances are not subject to interest.
During the year NIWA contracted vessel charters from its subsidiary NIWA Vessel Management Ltd totalling $9.1 million (2007:
$10.9 million) and purchased workshop services totalling $152,962 (2007: $58,712). NIWA Vessel Management Ltd contracted
services from its Parent, NIWA Science, totalling $581,783 (2007: $194,969).
During the year NIWA contracted scientific research from its subsidiary NIWA Australia Pty Ltd totalling Nil (2007: Nil) and
provided research services to NIWA Australia Pty Ltd of $304,411 (2007: $392,692).
NIWA earned revenue of $42,500 (2007: $87,565) from research subcontracts with NIWA Environmental Research Institute.
NIWA Natural Solutions Ltd purchased products from NIWA of Nil (2007: $709,659).
NIWA charged its subsidiaries for administration expenses and management services totalling $1.0 million for the financial year
(2007: $1.1 million).
There were no other significant transactions between any of the companies in the Group. All transactions with subsidiaries are
carried out on an arms-length basis.
24
Joint ventures
The Group has a 50% participating interest in Riskscape NZ, an unincorporated joint venture of equal interests with
Geological Risk Limited (a wholly owned subsidiary company of the Institute of Geological and Nuclear Sciences Ltd).
Riskscape NZ commenced operations in April 2005 and had a first balance date of 30 June 2005. The Group’s interests
in this joint venture had an immaterial effect on the Financial Statements.
The following amounts are from the financial statements of Riskscape NZ.
in thousands of New Zealand dollars
Group Group
2008 2007
Current
assets
39 84
Non-current
assets
– –
Current
liabilities
– –
Non-current
liabilities
– –
Income
1,778 1,778
Expenses
1,778 1,778
52
NIWA Annual Report 2008
National Institute of Water & Atmospheric Research Ltd and Group
Notes to the Financial Statements
for the year ended 30 June 2008
25
Related party transactions
The Government of New Zealand (the Crown) is the ultimate shareholder of the NIWA Group. All transactions with other Government-
owned entities are carried out on an arms-length basis.
Research activities revenue includes amounts received from the Crown or Crown-owned entities as follows:
in thousands of New Zealand dollars
Group Group
Parent Parent
2008 2007
2008 2007
Public Good Science and Technology
Contract
funding
45,453 44,324 45,453 44,324
Capability
Fund
10,083 9,094
10,083 9,094
Ministry
of
Fisheries
15,127 17,183 15,127 17,183
Ministry for the Environment
146
228
146
228
Department
of
Conservation
1,386 1,287 1,306 1,287
Land Information New Zealand
6,917
4,407
3,846
1,068
Genesis Energy
1,132
921
1,132
921
Meridian
Energy
1,474 1,328 1,474 1,328
Mighty
River
Power
178 585 178 585
Ministry
of
Agriculture
&
Forestry
2,866 4,728 2,866 4,728
The NIWA Group did not write off or forgive any related party balances during the year.
Other operating expenses include amounts paid to the Crown or Crown-owned entities as follows:
Genesis
Energy
933 802 933 802
Mighty
River
Power
212 100 212 100
Air
New
Zealand
1,634 1,291 1,539 1,207
AgResearch
Ltd
373 180 373 180
ESR
Ltd
133 116 133 116
Industrial Research Ltd
421
265
421
265
Geological and Nuclear Sciences
479
517
479
517
Landcare Research Ltd
319
380
319
380
Scion
182 167 182 167
Crop and Food Research
124
–
124
–
University
of
Waikato
183 303 183 303
University
of
Auckland
476 154 476 154
University
of
Canterbury
427 437 427 437
University
of
Otago
973 1,170 973 1,170
Key management personnel compensations
Short-term
benefits
4,575 3,294 4,403 3,122
4,575 3,294 4,403 3,122
The table above includes remuneration of the Chief Executive and his senior management team.
26
Financial instruments
Capital management
The Group has externally imposed requirements under the Crown Research Institutes Act 1992:
s
TO
s
TO
s
TO
Specifically, the Shareholding Ministers expect the targeted return on equity to be 9.0% every year. The Ministers have
indicated that the target is to be delivered as a long-term average due to the potential cyclical profitability that can be involved
in research outputs.
The Group has historically met the targeted return on equity each year. The Group elected to measure certain items of land,
property, plant, and equipment at fair value and use that fair value as its deemed cost on transition to IFRS. The fair value was
determined with reference to market prices at the time of the valuation at 1 July 2006. This has resulted in a decrease in return
on equity from 22.6% to 14.1% in 2007.
The Group’s policy is to maintain a strong capital base so as to maintain investor and creditor confidence and to sustain future
development of the business.
The Group’s policies in respect of capital management and allocation are reviewed regularly by the Board of Directors.
There have been no material changes in the Group’s management of capital during the period.
Fair value of financial instruments
The fair values of financial assets and financial liabilities are determined as follows:
s
THE
s
THE
s
THE
s
THE
NIWA Annual Report 2008
53
National Institute of Water & Atmospheric Research Ltd and Group
Notes to the Financial Statements
for the year ended 30 June 2008
26
Financial instruments (continued)
Categories of financial instruments
Group
in thousands of New Zealand dollars
Investment
in
Financial
associates
Loans
liabilities
at
accounted
and
amortised
for using the
Balance at 30 June 2008 Note
receivables
cost
equity
method
Assets
Cash and cash equivalents
9,303
–
–
Trade receivables
19
20,039
–
–
Investments
22 – – –
Total financial assets
29,342
–
–
29,342
Total
non-financial
assets
84,765
Total assets
114,107
Liabilities
Trade payables
14
–
10,221
–
Unsecured loans
11
–
241
–
Intercompany
23 – – –
Total financial liabilities
–
10,462
–
10,462
Total non-financial liabilities
18,958
Total liabilities
29,420
Balance at 30 June 2007
Assets
Cash and cash equivalents
4,138
–
–
Trade receivables
19
19,729
–
–
Investments
22 – –
559
Total financial assets
23,867
–
559
24,426
Total
non-financial
assets
80,842
Total assets
105,268
Liabilities
Trade payables
14
–
9,341
–
Unsecured loans
11
–
185
–
Intercompany
23 – – –
Total financial liabilities
–
9,526
–
9,526
Total
non-financial
liabilities
21,403
Total Liabilities
30,929
Parent
in thousands of New Zealand dollars
Investment
in
Financial
associates
Investment
Loans
liabilities
at
accounted
in
subsidiary
and
amortised
for using the
accounted
Balance at 30 June 2008
Note
receivables
cost
equity method
for at cost
Assets
Cash and cash equivalents
9,060
–
–
–
Trade
receivables
19
19,149 – – –
Investments
22 – – –
12,709
Total
financial
assets
28,209
–
– 12,709 40,918
Total
non-financial
assets
72,907
Total assets
113,825
Liabilities
Trade payables
14
–
9,531
–
–
Intercompany
23
10,884 – – –
Total financial liabilities
10,884
9,531
–
–
20,415
Total
non-financial
liabilities
17,042
Total liabilities
37,457
54
NIWA Annual Report 2008
National Institute of Water & Atmospheric Research Ltd and Group
Notes to the Financial Statements
for the year ended 30 June 2008
26
Financial instruments (continued)
in thousands of New Zealand dollars
Investment
in
Financial
associates
Investment
Loans
liabilities
at
accounted
in
subsidiary
and
amortised
for
using
the
accounted
Balance at 30 June 2007
Note
receivables
cost
equity method
for at cost
Assets
Cash
and
cash
equivalents
3,619 – – –
Trade
receivables
19
19,151 – – –
Investments
22 – –
500
12,709
Total financial assets
22,770
–
500
12,709
35,979
Total
non-financial
assets
68,817
Total assets
104,796
Liabilities
Trade
payables
14 –
8,476 – –
Intercompany
23
9,587 – – –
Total financial liabilities
9,587
8,476
–
–
18,063
Total
non-financial
liabilities
19,049
Total liabilities
37,112
Credit risk
Credit risk is the risk that a third party will default on its obligations to NIWA and the Group, causing a loss.
In the normal course of business, the Group incurs credit risk from trade receivables and transactions with financial institutions
(cash and short-term deposits). The Group has a credit policy that is used to manage this risk. As part of this policy, limits are
placed on the amounts of credit extended to third parties, and care is taken to ensure the credit-worthiness of third parties dealt
with. All credit risk exposures are monitored regularly.
The Group does not require any collateral or security to support financial instruments, because of the quality of financial institutions
and trade receivables dealt with.
There are no significant concentrations of credit risk. The maximum exposure to credit risk is $21,019k (total exposed to credit
risk, which is bank, short-term investments, and debtors, net of provisions).
Note 19, Receivables and prepayments includes further analysis of the trade receivables.
The Group has not renegotiated the terms of any financial assets which would result in the carrying amount no longer being past
due or avoid a possible past due status.
The Group’s maximum exposure to credit risk for trade and other receivables by geographic regions is as follows:
in thousands of New Zealand dollars
Group Group
2008 2007
New
Zealand
18,676 19,009
Australia
731 429
America
199 215
United
Kingdom
11 25
Other
European
countries
72 47
Other Asia Pacific countries
241
48
Other regions
119
14
Trade
receivables
20,049 19,787
The amount of revenue unbilled at balance date is represented by ‘Uninvoiced receivables’, which is stated at the proportion
to the stage of completion in the Statement of Financial Position. Once this balance is invoiced it is transferred to trade
debtors. The Group’s balance at June 2008 is $4.5 million (2007 $4.8 million) and the Parent at June 2008 $4.4 million
(2007 $4.7 million). Management believes there are no significant concentrations of risk relating to this balance. This is verified
from the balances for provision for doubtful debts and bad debts in previous years.
Interest rate risk
Interest rate risk is the risk that the value of the financial instrument will fluctuate because of changes in market interest rates.
This could particularly affect the cost of borrowing and the return on investments.
The interest rates on NIWA’s borrowings during the year were:
2008 2007
On call
– –
Short term
– –
The interest rates on NIWA’s investments during the year were:
Cash (on call)
7.20 – 8.20% 7.20 –7.95%
Term deposits
8.57– 8.65% –
The directors do not consider there is any significant exposure to interest rate risk on investments. All investments are managed
by NIWA on behalf of the Group.
NIWA has a regularly reviewed treasury policy in place which ensures the appropriate management of currency and interest
rate risk.
NIWA Annual Report 2008
55
National Institute of Water & Atmospheric Research Ltd and Group
Notes to the Financial Statements
for the year ended 30 June 2008
26
Financial instruments (continued)
Currency
Currency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates.
The Group undertakes transactions in foreign currencies from time to time, and, resulting from these activities, exposures in foreign
currency arise. It is the Group’s policy to hedge foreign currency trading transaction risks as they arise, unless explicitly authorised
otherwise by the Board. To manage these exposures, the Group uses forward foreign exchange contracts. At balance date the
Group had no forward foreign exchange arrangements in place (2007: $nil).
The Group’s exposure to foreign currency risk was as follows based on notional amounts:
in thousands of New Zealand dollars AUD EUR USD YEN AUD EUR USD YEN
30 June 2008
30 June 2007
Cash
balances
(263) (12) (49) (1)
(417) (1)
(186) (82)
Trade
receivables
(898) –
(60) –
(446) – – –
Trade
payables
161 – – –
254 – – –
Statement of Financial
Position
exposure
(1,000) (12) (109)
(1) (609)
(1) (186) (82)
The following significant exchange rates applied during the year:
Reporting
date
Average rate
spot rate
NZD
2008 2007 2008 2007
AUD
0.8579 0.8716 0.7838 0.8986
USD
0.7684 0.6875 0.7535 0.7563
A 10% strengthening of the NZD against the following currencies at 30 June would have increased (decreased) the profit and the
equity by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant.
The analysis is performed on the same basis for 2007.
in thousands of New Zealand dollars
Group Group
2008 2007
AUD
111
68
EUR
1
–
USD
12 21
YEN
–
9
A 10% weakening of the NZD against the above currencies at 30 June would have had the equal but opposite effect on the above
currencies to the amounts shown above, on the basis that all other variables remain constant.
Liquidity risks
Liquidity risk represents the Group’s ability to meet its contractual obligations. The Group evaluates its liquidity requirements on an
ongoing basis. In general, the Group generates sufficient cash flows from its operating activities to meet its obligations arising from its
financial liabilities and has credit lines in place to cover potential shortfalls.
The following tables detail the Group’s and the Parent’s contractual maturity analysis. The table has been based upon the earliest date
on which the Group and the Parent can be required to pay.
Group
in thousands of New Zealand dollars
Later
than
1 year and
Less
than
not
later
Later
than
As at 30 June 2008
On demand
1 year
than 5 years
5 years
Total
Trade
payables
–
10,221 – –
10,221
Unsecured loan
–
–
–
476
476
Total –
10,221
–
476
10,697
As at 30 June 2007
Trade
payables
–
9,341 – –
9,341
Unsecured loan
–
–
–
476
476
Total –
9,341
–
476
9,817
56
NIWA Annual Report 2008
National Institute of Water & Atmospheric Research Ltd and Group
Notes to the Financial Statements
for the year ended 30 June 2008
26
Financial instruments (continued)
Parent
in thousands of New Zealand dollars
Later
than
1 year and
Less
than
not
later
Later
than
As at 30 June 2008
On Demand
1 year
than 5 years
5 years
Total
Trade
payables
– 9,531
–
– 9,531
Intercompany
– – –
10,884
10,884
Total
– 9,531
– 10,884 20,415
As at 30 June 2007
Trade
payables
– 8,476
–
– 8,476
Intercompany
– – –
9,587
9,587
Total –
8,476
–
9,587
18,063
Financing facilities
The Group has access to financing facilities; the total unused amount is $4.0 million at the balance date. The unused amounts
relate to the undrawn overdraft facility of $0.5 million and the undrawn loan commitment of $3.5 million. These facilities are
available for the Parent company and have not changed in value over the last year.
27
Commitments
27a
Operating lease arrangements
in thousands of New Zealand dollars
Group Group
Parent Parent
2008 2007
2008 2007
Obligations payable after balance date on
non-cancellable operating leases:
Within
1
year
1,439 1,188 1,358 1,133
Between 1 and 2 years
1,448
961
1,448
961
Between 2 and 5 years
3,980
2,028
3,980
2,028
Over
5
years
4,780 4,860 4,780 4,860
11,647
9,037
11,566
8,982
27b
Capital commitments
Commitments for future capital expenditure:
Contracted, but not provided for
98
110
98
110
98 110 98 110
28
Contingent liabilities
There are no material contingent liabilities that were identified during the normal course of activities (2007 Nil).
29
Subsequent events
There were no subsequent events.
30
New Zealand International Financial Reporting Standards
Transition to New Zealand Equivalents to International Financial Reporting Standards (NZ IFRS).
Basis of preparation of data
The Parent and Group financial statements for the year ended 30 June 2008 are the first annual financial statements that comply with
NZ IFRS and First time Adoption of New Zealand Equivalents to International Financial Reporting Standards (NZ IFRS 1) have been
applied in their preparation.
In accordance with NZ IFRS 1, the transition date is 1 July 2006, the start of the comparative period for the year ended 30 June
2007. Normally accounting changes of this nature would require full retrospective application, but NZ IFRS 1 presents optional and
mandatory exemptions to full retrospective application.
NZ IFRS 1 exemptions
NZ IFRS 1 permits companies adopting NZ IFRS for the first time to take some exemptions from the full requirements of NZ IFRS.
NIWA has applied the following key exemptions:
Business combinations
Business combinations prior to the transition date (1 July 2006) have not been restated on an NZ IFRS basis.
Translation difference
The balance of the foreign currency translation reserve, representing all cumulative translation differences that have arisen on the
retranslation of overseas entities, was set to zero at 1 July 2006.
NIWA Annual Report 2008
57
National Institute of Water & Atmospheric Research Ltd and Group
Notes to the Financial Statements
for the year ended 30 June 2008
30
New Zealand International Financial Reporting Standards (continued)
Revaluation at deemed cost
NIWA elected to use a revaluation for land and certain buildings at deemed cost at the date of valuation which was 1 July 2006.
In preparing the opening Statement of Financial Position, the Parent and the Group have adjusted amounts reported previously in
financial statements prepared in accordance with its old basis of accounting (previous GAAP). An explanation of how the transition
from previous GAAP to NZ IFRS has affected the Statement of Financial Performance, financial position and cash flows is set out
in the following tables and notes that accompany the tables.
Impacts of the adoption of New Zealand Equivalents to International Financial Reporting Standards
Effect of the NZ IFRS on the Statement of Financial Position as at 1 July 2006
Group
Parent
Effect
of
Effect
of
Previous transition
Previous transition
in thousands of New Zealand dollars
Note
NZ GAAP
NZ IFRS
NZ IFRS
NZ GAAP
NZ IFRS
NZ IFRS
Equity
Share
capital
24,799
24,799
24,799
24,799
Equity
reserves
a,
g 16,452 23,395 39,847
6,732 23,131 29,863
Shareholders’
interest
41,251
64,646
31,531
54,662
Minority
shareholders’
interest
(19)
(19)
–
–
Total
equity
41,232
64,627
31,531
54,662
Non-current liabilities
Unsecured
loans
f 452 (269) 183
–
–
Employee
entitlements
d
1,551 (550)
1,001 1,468 (554) 914
Deferred
tax
liability
e
– 4,538 4,538
– 2,880 2,880
Intercompany
– –
12,119
12,119
Total non-current liabilities
2,003
5,722
13,587
15,913
Current liabilities
Payables
and
accruals
17,192
17,192
15,847
15,847
Short-term
advance
facility
600
600
600
600
Employee
entitlements
d 7,705 771 8,476
7,115 768 7,883
Taxation
payable
26
26
–
–
Total current liabilities
25,523
26,294
23,562
24,330
Total equity and liabilities
68,758
96,643
68,680
94,905
Non-current assets
Property,
plant,
&
equipment
b 42,740 29,701 72,441
30,770 29,701 60,471
Identifiable
intangibles
117
117 –
–
Investments
491
491
13,246
13,246
Deferred tax asset
e
1,816
(1,816)
–
3,476
(3,476)
–
Receivables
and
prepayments
765
765
765
765
Loans to associates
106
106
26
26
Total non-current assets
46,035
73,920
48,283
74,508
Current assets
Cash and short-term deposits
1,143
1,143
488
488
Receivables
and
prepayments
17,539
17,539
16,777
16,777
Taxation
receivable
– – 138
138
Uninvoiced
receivables
2,217
2,217
2,203
2,203
Inventories
1,824
1,824
791
791
Total current assets
22,723
22,723
20,397
20,397
Total
assets
68,758
96,643
68,680
94,905
58
NIWA Annual Report 2008
National Institute of Water & Atmospheric Research Ltd and Group
Notes to the Financial Statements
for the year ended 30 June 2008
30
New Zealand International Financial Reporting Standards (continued)
Effect of the NZ IFRS on the Statement of Financial Position as at 30 June 2007
Group
Parent
Effect
of
Effect
of
Previous transition
Previous transition
in thousands of New Zealand dollars
Note
NZ GAAP
NZ IFRS
NZ IFRS
NZ GAAP
NZ IFRS
NZ IFRS
Equity
Share
capital
24,799
24,799
24,799
24,799
Equity
reserves
g 26,687 22,864 49,551
20,238 22,647 42,885
Shareholders’
interest
51,486
74,350
45,037
67,684
Minority shareholders’ interest
(11)
(11)
–
–
Total
equity
51,475
74,339
45,037
67,684
Non-current liabilities
Unsecured
loans
f 409 (224) 185
–
–
Employee
entitlements
d
1,474 (546) 928 1,388 (553) 835
Deferred
tax
liability
e
– 4,424 4,424
– 2,871 2,871
Intercompany
– –
9,587
9,587
Total non-current liabilities
1,883
5,537
10,975
13,293
Current liabilities
Payables
and
accruals
16,421
16,421
15,451
15,451
Short-term
advance
facility
– –
– –
Employee
entitlements
d 8,252 719 8,971
7,651 717 8,368
Taxation
payable
– –
– –
Total current liabilities
24,673
25,392
23,102
23,819
Total equity and liabilities
78,031
105,268
79,114
104,796
Non-current assets
Property,
plant,
&
equipment
b 43,201 28,135 71,336
32,133 28,135 60,268
Identifiable
intangibles
69
69
–
–
Investments
559
559
13,209
13,209
Deferred tax asset
e
898
(898)
–
2,453
(2,453)
–
Receivables
and
prepayments
688
688
688
688
Total non-current assets
45,415
72,652
48,483
74,165
Current assets
Cash
and
short-term
deposits
4,138
4,138
3,619
3,619
Receivables
and
prepayments
19,803
19,803
19,148
19,148
Taxation
receivable
1,575
1,575
1,935
1,935
Uninvoiced
receivables
4,829
4,829
4,699
4,699
Inventories
2,271
2,271
1,230
1,230
Total current assets
32,616
32,616
30,631
30,631
Total
assets
78,031
105,268
79,114
104,796
NIWA Annual Report 2008
59
National Institute of Water & Atmospheric Research Ltd and Group
Notes to the Financial Statements
for the year ended 30 June 2008
30
New Zealand International Financial Reporting Standards (continued)
Effect of the NZ IFRS on the Statement of Financial Performance as at 30 June 2007
Group
Parent
Effect
of
Effect
of
Previous transition
Previous transition
in thousands of New Zealand dollars
Note
NZ GAAP
NZ IFRS
NZ IFRS
NZ GAAP
NZ IFRS
NZ IFRS
Operating revenues and
other gains
Public Good Science
and Technology
Contract
funding
44,324
44,324
44,324
44,324
Capability
Fund
9,094
9,094
9,094
9,094
Ministry
of
Fisheries
17,183
17,183
17,183
17,183
Commercial
42,886
42,886
36,892
36,892
Share of associate’s net
gain
/
(deficit)
60
60
–
–
Dividends
from
subsidiaries
– –
7,000
7,000
Total
income
113,547
113,547
114,493
114,493
Operating expenses
Employee benefits expense
d
(50,789)
64
(50,725)
(45,902)
48
(45,854)
Other
expenses
(38,627)
(38,627)
(44,375)
(44,375)
Total operating expenses
(89,416)
(89,352)
(90,277)
(90,229)
Profit/(loss) before interest,
income tax, depreciation,
and
amortisation
24,173
24,195
24,216
24,264
Depreciation
b (8,570) (1,218) (9,788)
(7,184) (1,242) (8,426)
Amortisation
c (38) (347) (385)
– (323) (323)
Profit/(loss) before interest
and
income
tax
15,565
14,022
17,032
15,515
Interest
income
364
364
354
354
Finance
expense
f (86) (21)
(107) (86)
(86)
Net interest and other
financing
costs
278
257
268
268
Profit/(loss) before income tax
15,843
14,279
17,300
15,783
Income
tax
credit/(expense)
e (5,382) 916 (4,466) (3,693) 1,033 (2,660)
Profit/(loss) for the period
10,461
(648)
9,813
13,607
(484)
13,123
Reconciliation of Cash Flow Statement for the year ended 30 June 2007
There is not an impact of adopting NZ IFRS on the Cash Flow Statement.
60
NIWA Annual Report 2008
National Institute of Water & Atmospheric Research Ltd and Group
Notes to the Financial Statements
for the year ended 30 June 2008
Notes to the reconciliation
a) Foreign currency translation reserve: cumulative translation differences
The Group has elected to apply the exemption NZ IFRS 1. The cumulative translation differences for all foreign operations
represented in the foreign currency translation reserve are deemed to be zero at the date of transition to NZ IFRS.
At 1 July 2006 the balance of $264,000 debit in the foreign currency translation reserve was reduced to zero.
There is no effect on the parent company.
b) Adjustments to plant, property, and equipment
Under NZ IFRS 1 entities are permitted to adjust the carrying value of selected plant, property, and equipment to their fair value
and use that fair value as deemed cost at the date of transition. NIWA elected to revalue land and certain buildings. These assets
were valued with an effective date of 1 July 2006 by DTZ New Zealand Limited, registered valuers and members of the New
Zealand Property Institute. Certain items of equipment were classified under the valuation which were determined to be relevant
to the valuation of certain buildings. The basis of valuation is fair value being the estimated amount for which an asset should
exchange on the date of valuation between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing
wherein the parties had each acted knowledgeably, prudently, and without compulsion. The impact on the Statement of Financial
Position is demonstrated below.
in thousands of New Zealand dollars
Group Group
Parent Parent
2007 2006
2007 2006
Property, plant, and equipment
Cost
Land
10,223 10,223 10,223 10,223
Buildings and leasehold improvements
16,738
16,738
16,738
16,738
Equipment
(79) (79) (79) (79)
Reclassified
software
(c)
(4,775) (4,524) (4,575) (4,347)
Increase
cost
22,107 22,358 22,307 22,535
Accumulated depreciation
Buildings and leasehold improvements
1,143
2,711
1,143
2,711
Equipment
110 108 110 108
Reclassified
software
(c)
4,775 4,524 4,575 4,347
Reverse accumulated depreciation
6,028
7,343
5,828
7,166
Total effect on transition
28,135
29,701
28,135
29,701
Due to the increase in the asset base, depreciation is increased in the Statement of Financial Performance for the 2007 year.
in thousands of New Zealand dollars
Group
Parent
2007
2007
Depreciation
Buildings and leasehold improvements
1,568
1,568
Equipment
(3)
(3)
Reclassified software (c)
(347)
(323)
Total effect on transition
1,218 1,242
c) Reclassification
of
software
Under NZ IFRS, software is classified as part of intangible assets rather than property, plant, and equipment. This has resulted in
the cost of intangible assets increasing and the cost of property, plant, and equipment decreasing. While the amount previously
depreciated on software is unchanged, it is now classified as amortisation.
in thousands of New Zealand dollars
Group Group
Parent Parent
2007 2006
2007 2006
Intangible assets
Cost
4,775 4,524 4,575 4,347
Accumulated
amortisation
(4,775) (4,524) (4,575) (4,347)
Software has been reclassified as an intangible asset; therefore the depreciation expense recognised in depreciation in 2007 is
classified as amortisation.
in thousands of New Zealand dollars
Group
Parent
2007
2007
Total effect on transition
347 323
NIWA Annual Report 2008
61
National Institute of Water & Atmospheric Research Ltd and Group
Notes to the Financial Statements
for the year ended 30 June 2008
Notes to the reconciliation (continued)
d) Employee
benefits
Under NZ IFRS, training leave (which is an accumulating compensated absence) is measured as the additional amount expected
to pay as a result of the unused entitlement. Under previous GAAP, training leave was measured as the additional cash portion
expected to pay as a result of the unused entitlement. This has resulted in an increase in current employee entitlements and an
increased expense in the Financial Statement of Performance.
Under previous GAAP, long service leave was recognised once an employee was entitled to the benefit. Under NZ IFRS, the
amount recognised as a current employee entitlement is the obligation expected to be paid in future reporting periods.
Retirement leave is recognised under NZ IFRS on the likelihood that the employee will reach the full entitlement based on current
service. Under previous GAAP, retirement leave was recognised on the current entitlement.
The total effect on transition is shown below, which shows the effect on the Statement of Financial Position.
in thousands of New Zealand dollars
Group Group
Parent Parent
2007 2006
2007 2006
Training
leave
100 177 100 174
Long
service
leave
619 594 617 594
Retirement
leave
(546) (550) (553) (554)
Total effect of transition
173
221
164
214
Non-current
employee
entitlements
(546) (550) (553) (554)
Current
employee
entitlements
719 771 717 768
The effect on the Statement of Financial Performance is detailed below.
in thousands of New Zealand dollars
Group
Parent
2007
2007
Reverse movement included in previous GAAP
78
52
NZ IFRS movements between June 06 and June 07
Training leave
(34)
(37)
Long service leave
(54)
(46)
Retirement
leave
74 79
Total effect on transition
64
48
e) Deferred
tax
liability
Under previous GAAP, income tax expense was calculated by reference to the accounting profit after allowing for permanent
differences. The adoption of NZ IFRS has resulted in a change of accounting policy. The application of NZ IAS 12 income taxes
has resulted in the recognition of a deferred tax liability arising on the revaluation of land and certain buildings and the recognition
of future payable employee benefits; the tax effects relate to note c and d.
The effects on the deferred tax of the adoption of NZ IFRS are as follows:
in thousands of New Zealand dollars
Group Group
Parent Parent
2007 2006
2007 2006
Deferred tax asset before adoption of NZ IFRS
(898)
(1,816)
(2,453)
(3,476)
Revaluation
of
land
and
certain
buildings
5,367 6,415 5,374 6,285
Provisions (45)
(61)
(50)
71
Increase
in
deferred
tax
liability
4,424 4,538 2,871 2,880
The effects on the income tax expense of the adoption of NZ IFRS are as follows:
in thousands of New Zealand dollars
Group
Parent
2007
2007
Reverse deferred tax movement before adoption of NZ IFRS
798
1,024
Deferred tax movement to the Statement of Financial Performance
118
9
Total effect on transition
916
1,033
62
NIWA Annual Report 2008
National Institute of Water & Atmospheric Research Ltd and Group
Notes to the Financial Statements
for the year ended 30 June 2008
Notes to the reconciliation (continued)
f) Unsecured
loans
Under previous GAAP, financial liabilities (the unsecured loan) were to be measured at face value. Under NZ IFRS, financial
liabilities are required to be stated at amortised cost using the effective interest method.
There is no effect on the Parent company.
in thousands of New Zealand dollars
Group
Group
2007
2006
Total effect on transition
(224)
(269)
The effects on the interest expense of the adoption of NZ IFRS are as follows:
in thousands of New Zealand dollars
Group
Parent
2007
2007
Total effect on transition
(21)
–
g) Impact
on
equity
in thousands of New Zealand dollars
Group Group
Parent Parent
2007 2006
2007 2006
Property, plant, and equipment (b)
28,135
29,701
28,135
29,701
Employee
benefits
(d)
(173) (221) (164) (214)
Deferred
tax
liability
(e)
(4,424) (4,538) (2,871) (2,880)
Deferred
tax
asset
(e)
(898) (1,816) (2,453) (3,476)
Unsecured loan (f)
224
269
–
–
Total effect on transition
22,864 23,395 22,647 23,131
Statement pursuant to section 152 of the Crown Entities Act (2004)
In 2007–08, the Group paid compensation or other benefits to one person who ceased to be
an employee during that financial year. The total value of the payment was $103,812.36.
NIWA Annual Report 2008
63
Audit Report
TO THE READERS OF
NATIONAL INSTITUTE OF WATER & ATMOSPHERIC RESEARCH LIMITED AND GROUP’S
FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008
The Auditor-General is the auditor of National Institute of
s
Water & Atmospheric Research Limited (the company) and
s
group. The Auditor-General has appointed me, Nick Main,
reported data;
using the staff and resources of Deloitte, to carry out the
audit of the financial statements of the company and group,
s
on his behalf, for the year ended 30 June 2008.
the Board of Directors;
s
Unqualified Opinion
s
In our opinion:
and consistently applied; and
s
s
pages 35 to 63:
are adequate.
– comply with generally accepted accounting practice
We did not examine every transaction, nor do we guarantee
in New Zealand; and
complete accuracy of the financial statements.
– give a true and fair view of:
We evaluated the overall adequacy of the presentation of
– the company and group’s financial position as at
information in the financial statements. We obtained all the
30 June 2008; and
information and explanations we required to support our
opinion above.
– the results of operations and cash flows for the
year ended on that date.
Responsibilities of the Board of Directors and the Auditor
s
The Board of Directors is responsible for preparing
proper accounting records.
financial statements in accordance with generally accepted
The audit was completed on 25 August 2008, and is the
accounting practice in New Zealand. Those financial
date at which our opinion is expressed.
statements must give a true and fair view of the financial
position of the company and group as at 30 June 2008.
The basis of our opinion is explained below. In addition, we
They must also give a true and fair view of the results
outline the responsibilities of the Board of Directors and the
of operations and cash flows for the year ended on that
Auditor, and explain our independence.
date. The Board of Directors’ responsibilities arise from
the Crown Research Institutes Act 1992 and the Financial
Basis of Opinion
Reporting Act 1993.
We carried out the audit in accordance with the
We are responsible for expressing an independent
Auditor-General’s Auditing Standards, which incorporate
opinion on the financial statements and reporting that
the New Zealand Auditing Standards.
opinion to you. This responsibility arises from section 15
We planned and performed the audit to obtain all the
of the Public Audit Act 2001 and the Crown Research
information and explanations we considered necessary
Institutes Act 1992.
in order to obtain reasonable assurance that the financial
statements did not have material misstatements, whether
Independence
caused by fraud or error.
When carrying out the audit we followed the independence
Material misstatements are differences or omissions of
requirements of the Auditor-General, which incorporate the
amounts and disclosures that would affect a reader’s overall
independence requirements of the New Zealand Institute
understanding of the financial statements. If we had found
of Chartered Accountants.
material misstatements that were not corrected, we would
Other than the audit, we have no relationship with or
have referred to them in our opinion.
interests in the company or any of its subsidiaries.
The audit involved performing procedures to test the
information presented in the financial statements.
We assessed the results of those procedures in forming
our opinion.
Audit procedures generally include:
Nick Main
s
Deloitte
management controls are working and can be relied on
On behalf of the Auditor-General
to produce complete and accurate data;
Auckland, New Zealand
Matters Relating to the Electronic Presentation of the Audited Financial Statements
This audit report relates to the financial statements of National Institute of Water & Atmospheric Research Limited for the year ended 30 June 2008 included on
National Institute of Water & Atmospheric Research Limited’s website. National Institute of Water & Atmospheric Research Limited’s Board of Directors is responsible for
the maintenance and integrity of National Institute of Water & Atmospheric Research Limited’s website. We have not been engaged to report on the integrity of National
Institute of Water & Atmospheric Research Limited’s website. We accept no responsibility for any changes that may have occurred to the financial statements since they
were initially presented on the website.
The audit report refers only to the financial statements named above. It does not provide an opinion on any other information which may have been hyperlinked to or from
the financial statements. If readers of this report are concerned with the inherent risks arising from electronic data communication they should refer to the published hard
copy of the audited financial statements and related audit report dated 25 August 2008 to confirm the information included in the audited financial statements presented
on this website.
Legislation in New Zealand governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
64
NIWA Annual Report 2008
Directory
National Institute of Water & Atmospheric Research Ltd
Directors
Science
Dr Terry Hume
Regional Offices
[email address]
Sue Suckling
(Chair)
Management Team
Assistant Regional Manager,
Bream Bay Aquaculture Park
Craig Ellison
(Deputy Chair)
Nicholas Bain
Hamilton
Station Road, Ruakaka 0116
John Hercus
[email address]
PO Box 147, Ruakaka 0151
(resigned 30 June 2008)
Manager, Commercialisation
Dr Andrew Laing
Tel +64-9-432 5500
Dr Graham Hill
[email address]
Fax +64-9-432 5501
Ed Johnson
Andrew Forsythe
Regional Manager, Wellington
Dr Wendy Lawson
[email address]
Auckland
Troy Newton
Chief Scientist,
Charles Pearson
41 Market Place
(resigned 30 June 2008)
Aquaculture & Biotechnology
[email address]
Auckland Central 1010
John Spencer
Regional Manager,
Dr Clive Howard-Williams
Private Bag 99940
(resigned 31 October 2007)
Christchurch/Lauder
[email address]
Newmarket, Auckland 1149
Dennis Cairns
Chief Scientist,
Dr Dave Roper
Tel +64-9-375 2050
(appointed 1 July 2008)
Freshwater & Coasts
[email address]
Fax +64-9-375 2051
Helen Robinson
Regional Manager, Hamilton
(appointed 1 July 2008)
Dr Mark James
Hamilton
[email address]
Michael Stobart
Gate 10, Silverdale Road,
Manager (interim), Environmental
[email address]
Hillcrest, Hamilton 3216
Executive Team
Information & Pacific Rim
Regional Manager, Bream Bay
PO Box 11115, Hillcrest,
John Morgan
Hamilton 3251
[email address]
Dr John McKoy
Tel +64-7-856
7026
Chief Executive Officer
[email address]
Registered Office
Fax +64-7-856 0151
Chief Scientist, Fisheries
Dr Bryce Cooper
until mid-November
Wellington
[email address]
Dr Murray Poulter
269 Khyber Pass Road
301 Evans Bay Parade,
General Manager, Strategy
[email address]
Newmarket, Auckland
Greta Point, Wellington 6021
Chief Scientist, Atmosphere,
New Zealand
Private Bag 14901, Kilbirnie,
Dr Rob Murdoch
Natural Hazards, & Energy
Wellington 6241
[email address]
from mid-November
Tel +64-4-386
0300
General Manager, Research
Dr Don Robertson
41 Market Place
[email address]
Fax +64-4-386 0574
Auckland Central 1010
Dr Barry Biggs
Chief Scientist, Aquatic
New Zealand
Nelson
[email address]
Biodiversity & Biosecurity
217 Akersten St, Port Nelson
General Manager, Operations
Dr Charlotte Severne
Auditors
PO Box 893, Nelson 7040
Kate Thomson
[email address]
Tel +64-3-548
1715
Deloitte on behalf of the
[email address]
–
Chief Scientist, Maori & Oceans
Fax +64-3-548 1716
Auditor-General
Chief Financial Officer &
Christchurch
Company Secretary
Fred Smits
[email address]
10 Kyle Street,
Bankers
Geoff Baird
General Manager,
Riccarton, Christchurch 8011
[email address]
The National Bank of
Vessel Operations
P O Box 8602,
General Manager,
New Zealand Limited
Christchurch 8440
Communications & Marketing
Dr David Wratt
Tel +64-3-348
8987
[email address]
Fax +64-3-348 5548
Dr Mary-Anne Dehar
Solicitors
Chief Scientist, Climate
[email address]
Bell Gully
Lauder (Central Otago)
General Manager,
State Highway 85, Lauder,
Human Resources
Operations
Central Otago 9320
Management Team
Insurance Broker
Private Bag 50061,
Arian de Wit
Marsh Limited
Ken Becker
Omakau 9352,
[email address]
[email address]
Central Otago
General Manager,
Regional Manager, Auckland
Head Office
Tel +64-3-440
0055
Information Systems
Fax +64-3-447 3348
Dr Graham Fenwick
41 Market Place
[email address]
Auckland Central 1010
Unidata Pty Ltd
Assistant Regional Manager,
Private Bag 99940
General Manager: Matt Saunders
Christchurch
Newmarket, Auckland 1149
40 Ladner Street,
New Zealand
O’Connor, WA 6163
Dr Ken Grange
Tel +64-9-375 2050
Australia
[email address]
Fax +64-9-375 2051
Tel +61-8-9331 8600
Regional Manager, Nelson
Fax +61-8-9331 8611
www.unidata.com.au
Dr Julie Hall
[email address]
Assistant Regional Manager,
Wellington
www.niwa.co.nz
National Institute of Water & Atmospheric Research Ltd
The 2008 NIWA Annual Report is printed on paper produced using the
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Paper content is 55% recycled fibre, 45% from timber harvested from
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