20
08–
09
Annual Report
leading environmental science
|
NIWA ANNUAL REPORT 2009
Leigh Torres, NIWA
NIWA – leading environmental science
The key focuses of our expertise are:
- aquaculture
Contents
- atmosphere
Chairman & Chief Executive’s report 2
- biodiversity & biosecurity
Financial summary
8
Sustainability
10
- climate
Capability fund
18
- coasts
Performance against SCI
20
- energy
Board
23
- fisheries
Report of the Directors
24
- freshwater
Corporate governance statement
26
- Ma-ori development
Financial statements
32
Directory
IBC
- natural hazards
- oceans
- Pacific Rim
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.
NIWA’s Ma–ori name Taihoro Nukurangi
As at 30 June 2009, NIWA has 748 staff, revenue of $120 million,
describes our work as studying the
waterways and the interface between the
and assets of $115 million.
earth and the sky.
Taihoro is the flow and movement of water
www.niwa.co.nz
(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’.
NIWA ANNUAL REPORT 2009 | 1
“As New Zealanders, we need economic prosperity whilst protecting
our environment … and it can be done”
John Morgan, CEO
2 |
NIWA ANNUAL REPORT 2009
CHAIRMAN & CEO
From our new Chairman
A strong performance
It is a privilege to be appointed to the Board
No one needs reminding that this year
of NIWA and to take over the role of Chairman
has been marked by the most severe global
$120
from Sue Suckling.
economic downturn since the 1930s, yet
million
when we were discussing this report we found
As a high performing Crown Research Institute,
ourselves returning not to today’s ‘crisis’,
NIWA has made considerable progress
total revenue including
but to the longer-term environmental issues
in developing the skills and capability to
interest income
which drive NIWA’s science.
meet the demands of the modern world for
environmental science. NIWA has specialist
There is no doubt 2008–09 has been tough from
knowledge to assist with sustainable
a financial point of view. We had to be fiscally
management of our oceans, freshwater,
cautious and manage our activities carefully to
and atmosphere – natural resources so
ensure we delivered the best to our customers,
critical to our economic well-being.
and that we received maximum value for
9.8%
That is the key focus of the highly skilled
every dollar we spent. Despite the recession,
scientists and technicians who make up
however, NIWA’s performance has been strong
the NIWA team.
and our expertise remains more relevant
return on equity
than ever.
We anticipate strong growth as the current
global recession eases. This growth will come
Generating respect for New Zealand
from increasing demand for environmental
science, improving our efficiency, and making
In fact, world-leading environmental science
the most of opportunities to commercialise
is even more critical as we seek opportunities
748
IP developed by our science teams.
as a nation to climb out of the recession
and improve our economic performance.
In chairing the NIWA Board for the last eight
years, Sue Suckling made an outstanding
Environmental sustainability is not just about
staff, our greatest asset
contribution to one of New Zealand’s most
the issue of the moment, it is about how
successful crown entities. Sue’s strategic
New Zealand commands respect
foresight and leadership set a very high
internationally. And respect matters,
standard for NIWA’s future governance.
particularly for an export-reliant country
that uses its environmental reputation and
I look forward to the future with confidence.
performance to differentiate itself in a very
competitive global marketplace; whether
it be for high quality primary products
or international tourists.
NIWA is privileged to be home to the nation’s
environmental science capability (people,
tools, and networks) in many areas of vital
Chris Mace
importance, including water allocation, water
Chairman
quality, high-value aquaculture, climate
impacts, fisheries, renewable energy,
weather-related hazards, aquatic biodiversity
and biosecurity, and marine resources.
NIWA ANNUAL REPORT 2009 | 3
CHAIRMAN & CEO
Improved pastoral productivity
Ocean resources
135
What will happen to this country’s primary
For too long, humanity has taken ocean
production as changes in our climate compound
productivity for granted. New Zealand is often
the effects of natural climate variability and
touted as having one of the best fisheries
intensified agriculture?
management regimes in the world. That regime
new products, services,
needs good science, and NIWA is by far the
NIWA’s research to date suggests that the
& processes developed
largest provider of this science. We have the
country may get drier in the east and wetter
smartest, best equipped, and most experienced
in west, and droughts may become more
fisheries research team in the country, working
frequent. According to a report commissioned
closely with the Ministry of Fisheries and the
by the Ministry of Agriculture and Forestry,
seafood industry.
the 2007–08 drought cost the New Zealand
537
economy $2.8 billion.
But ocean resources are about more than just
fish. New Zealand’s exclusive economic zone,
As Agriculture Minister David Carter said
at over 4 million square kilometres,
in releasing that report, “Not having a plan
is about 15 times its land mass. NIWA has
research collaborations with is planning to do nothing.” NIWA is working
been collaborating closely with many partners,
closely with the farming sector on a raft
overseas organisations
including LINZ, GNS Science, and the Royal
of measures to adapt to a changing climate.
New Zealand Navy, to understand more about
We are also developing tools to forecast water
this vast marine estate. And understand it
supply and climate conditions in order
we must, if we are to reap greater economic
to provide scientific advice to manage
benefit in a sustainable way.
$3.2
competing water uses, including ecological
values, so individual irrigators can get the best
This year alone, NIWA registered 16 472 new
from their allocation.
samples in our marine invertebrate database,
primarily from Ocean Survey 20/20 projects,
million
Cleaning up freshwater
exploration of seamounts, and fisheries
What attracts visitors to our country
survey work.
in their thousands?
international consultancy
Sustainable food
contracts
In large part, it’s our mountains, lakes, rivers,
New Zealand has built its economy on
waterfalls, snow, lush green bush, deep fiords,
world-leading farming practices. Now, NIWA
and beaches. Once again, we come back
is developing exciting world firsts in the farming
to water – clean and plentiful. That fresh
of finfish. With growing global demand for
water is vital to our tourism industry, as well
protein, there is great economic opportunity in
as to New Zealanders’ way of life.
farming high-value finfish in an environmentally
This year, we celebrated 20 years of continuous
responsible manner. That takes diligent
water quality monitoring through NIWA’s
and intelligent commercially-oriented research.
National River Water Quality Network. The work
NIWA’s work with our industry partners means
done by NIWA staff collecting and analysing
fully commercial marine farming of kingfish
river water samples every month shows that
is now possible, with groper (hapuka) not too far
New Zealand has cleaned up ‘point source
behind. Finfish aquaculture could economically
discharge’, from factory pipes and the like,
transform the seafood sector, provided the
but that land-use intensification is adding extra
appropriate sea space is made available
nutrients to our rivers. We use this long-term
in a timely manner.
monitoring in our search for solutions, working
hard alongside Dairy NZ and others
to demonstrate win:win approaches.
Good water quality and intensive agriculture
can go hand in hand, but this requires
scientific knowledge and data, significant
planning, robust regional rules, strong
partnerships with farmers, and central
government policy leadership.
4 |
NIWA ANNUAL REPORT 2009
Managing through the recession
In 2009–10 we expect research revenue to
increase slightly, and revenue from applied
NIWA felt the brunt of the recession early this
science services to remain level as some
year as our customers cut back to manage their
customers put projects on hold. But while
$60
own way through the downturn.
there is a temporary flattening in demand,
million
Given the circumstances, however, we
the important environmental issues remain.
returned a pleasing result. NIWA remains
We are predicting that demand for NIWA’s
capital investment in science
a profitable company delivering great value
research and applied science services will
over 3 years
to its shareholders and therefore to the public
double within a decade, requiring significant
of New Zealand.
increases in the number of skilled staff we
need to employ. That is an immense challenge
We are extremely proud of the effort from our
in a world that, notwithstanding the current
staff to maintain revenue at similar levels to last
recession, will be hungry for the high quality
year despite a slow start. We kept tight control
environmental science skills and capability
of costs, made efficiencies in our operations,
2569
that NIWA has.
and focused on delivering our customers’
requirements in full and on time.
We will, therefore, continue to retrain
and upskill staff where appropriate.
reports, publications,
We are budgeting for another solid financial
Alongside this, we are improving the efficiency
& formal presentations
result in 2009–10. That said, we are running
and effectiveness of our support services
a very lean ship and we recognise this is putting
and processes so that science staff do less
extra pressure on staff. We are thrilled with
administration and have more time available
the way they have responded, getting value out
for delivering science.
of every dollar in tight budgets. In NIWA today
there is a stronger emphasis than ever
We are using the strength of our balance sheet
900000
on re-thinking the way we do things,
to invest for the future, too. This year saw
implementing best practice, and taking
us halfway through a three-year $60 million
opportunities to improve performance.
capital expenditure programme. We made a
requests for climate
$15 million commitment to oceans research
An eye to the future
through the purchase of a highly-advanced
data processed
(DP2) dynamic positioning system for RV
Whilst being very conscious of the need to
carefully manage resources, we are keeping
Tangaroa which will be installed progressively
our eye on the long-term by ensuring the
over the next 18 months. This will ensure that
company is well equipped for the future.
Tangaroa continues to be the best equipped
Our strategy requires:
research vessel in New Zealand.
We have also decided to replace our Cray
• Staff with appropriate skills and expertise,
T3E supercomputer with an IBM Power 575
and a human resources strategy which
supercomputer at a cost of $12.7 million.
develops and rewards them, and keeps
This increases 100-fold our current
them safe
supercomputing capability. It will, for instance,
• State-of-the-art facilities, including
provide computational power for NIWA’s
appropriately located offices, laboratories,
world-class environmental forecasting system
resources, and infrastructure
EcoConnect, which supplies continually updated
• Comprehensive and robust environmental
forecasts of weather-driven hazards such as
monitoring networks
flooding, for port companies, regional councils,
energy companies, and other customers.
• A unique fleet of some 30 vessels to explore
our oceans, estuaries, rivers, and lakes;
and suitably rugged land-based vehicles
for reaching remote parts of the nation
• IT that supports one of the world’s leading
knowledge-based companies
• The ability to share our scientific knowledge
through effective communications
NIWA ANNUAL REPORT 2009 | 5
CHAIRMAN & CEO
6 |
NIWA ANNUAL REPORT 2009
MS Srinivasan, NIWA
In December 2008, we were delighted that
Heritage Trust; and supporter of marine
Hon Dr Wayne Mapp, Minister of Research,
science facilities and projects at the University
Science and Technology, could open our new
of Auckland and the University of Otago.
Head Office near Auckland’s Viaduct Basin.
We also welcome new director Jason
The new premises reflect the professional
Shoebridge, who comes to the Board with
16472
nature of the research, applied science, and
administrative services we strive to deliver to
a wealth of commercial expertise.
new marine invertebrate
our customers.
Economic & environmental prosperity
samples registered in
NIWA’s collection
Changes to the NIWA Board
As New Zealanders, our fresh water, clean
2008–09 saw the most significant changes
air, wide oceans, and maritime climate are
in our Board composition for some time, with
our greatest assets. We want to protect our
the retirement of Sue Suckling after eight
environment, but we also want economic
years as Chair of NIWA. It is indicative of Sue’s
prosperity. Let’s not shy away from the fact that
contribution that two of the most significant
to get the best of both worlds, the government
strategic initiatives in NIWA’s history –
will have to make some tough decisions.
the decisions to install a dynamic positioning
These decisions will need to be informed by
system on RV Tangaroa and to replace the
good science. At NIWA we have bright minds,
supercomputer – were supported by the Board
great facilities, and incredible talent focused
under her leadership.
on helping to lift economic prosperity by solving
some of the most pressing environmental
We also farewelled Dr Graham Hill who has
problems of the day. We firmly believe it can
been a major contributor to the governance
be done.
of NIWA since 2002.
We were pleased when Chris Mace was
appointed as our new Chairman from 1 July
2009. Chris is a former Chairman of the Crown
Research Institute ESR; former Chairman of the
New Zealand Antarctic Institute (now Antarctica
John Morgan
New Zealand); founding trustee of the
Chief Executive
Sir Peter Blake Trust; founding member of the
New Zealand Institute; trustee of the Antarctic
2009
2008
2007
2007
2006
2005
Translated
Previous
Previous
Previous
NZ GAAP
NZ GAAP
NZ GAAP
$’000
$’000
$’000
$’000
$’000
$’000
Total revenue (includes interest income)
120,438
120,671
113,911
113,911
106,414
91,137
– Public Good Science
58,883
55,536
53,418
53,418
50,374
43,729
– Ministry of Fisheries
14,121
15,127
17,183
17,183
16,060
16,626
– Commercial and other
47,434
50,008
43,310
43,310
39,980
30,782
Net profit before tax
9,050
14,309
14,279
15,843
15,706
9,654
Net profit after tax
6,011
10,095
9,813
10,461
10,342
6,434
Capital expenditure
21,186
13,985
9,107
9,107
8,480
7,348
Adjusted return on average equity (%)
9.8
17.9
21.2
22.6
24.4
13.5
Return on average equity (%)
7.1
12.8
14.1
22.6
24.4
13.5
The Group changed their accounting policies on 1 July 2006 to comply with New Zealand International Financial Reporting Standards. The transition required the
statement of comprehensive income to be translated for the year ended 30 June 2007 as shown above. The ‘adjusted return on average equity’ uses a valuation basis
comparable with other Crown Research Institutes.
NIWA ANNUAL REPORT 2009 | 7
“We are weathering this financial storm well”
Kate Thomson, Chief Financial Officer
Highlights
Revenue
NIWA’s 2008–09 results are remarkably
NIWA managed to hold its revenue roughly
Total revenue (includes interest income)
good. Despite the global economic recession,
stable in the face of global economic recession.
($) in millions
our achievements include:
In 2008–09, NIWA’s total revenue was $120.4
120
million. This was slightly less than the previous
• Stable revenue at $120 million
year (2008: $120.7 million), and down on
(including interest income)
budgeted revenue of $125.6 million.
90
• Operational expenditure trimmed to $111
million, against budget of $115 million
The proportion of NIWA’s revenue from its
60
main sources remains reasonably stable.
• Net profit after tax of $6 million
Science staff had a remarkably successful
• Dividend paid of $5.6 million
year in winning public good science funding,
30
with revenue rising from $55.5 million
The Group did not meet its budget targets
in 2007–08 to $58.9 million in 2008–09.
in 2008–09, notably our budgeted revenue,
0
Overall, this represented 49% of NIWA’s
2005
2006
2007
2007
2008
2009
which we had set at an ambitious $125.6
Previous Previous Previous Translated
revenue in 2008–09. This is comprised of
NZGAAP NZGAAP NZGAAP
million. This was mainly due to the cancellation
contestable research funding from the
or deferment of three vessel charters, and it
Foundation for Research, Science and
was a significant achievement to roughly match
Technology (39%; $48.3 million) and capability
last year’s revenue in such tough times.
funding from the Ministry of Research,
We are doing well at gaining research
Science and Technology (9%; $10.5 million).
Revenue by source
and consultancy contracts in an extremely
NIWA’s second largest single source of
competitive environment, and at managing
Foundation for
revenue was contestable fisheries research
5%
Research, Science
our cost structure, which is not particularly
7%
and Technology
39%
contracts from the Ministry of Fisheries
elastic. The reality is that half our costs are
(12%; $14.1 million). NIWA lost over $1 million
9%
Central govt
14%
in staff and, as a knowledge-based company,
39%
in revenue from this source in 2008–09, mainly
Other sales
14%
our people also drive our revenue. As a result,
due to the postponement of one vessel charter,
Ministry of Fisheries 12%
many costs continue even if we have fewer
12%
now scheduled for 2009–10.
Capability funding
9%
contracts. Similarly, the company’s large
Private sector
7%
capital expenditure programme increases
The remainder of NIWA’s revenue (39%;
14%
Local govt
5%
our depreciation costs and it also represents
$47.4 million) largely consisted of commercial
14%
investment in scientific capability intended
consultancy work. Contracts in this area
to position us well for the eventual upturn.
were hard to obtain early in the financial year,
This combination of the nature of NIWA’s
but worked picked up as the year progressed.
business, our future-focused capital spend,
This was partly the result of customers no
and a tough external environment means
longer being able to defer essential work, and
that the coming financial year (2009–10)
partly thanks to intensive business development
Revenue by national centre
will be challenging.
efforts by key staff.
Freshwater 16%
3% 2%
NIWA is weathering the global financial storm
3%
16%
Fisheries 14%
4%
well. We will continue to maintain tight fiscal
Biodiversity
4%
& Biosecurity
11%
discipline and focus on delivering projects
4%
Oceans 10%
14%
to our customers’ specifications, on time,
5%
Environmental
Information
8%
and within budget, to ensure NIWA remains
5%
Atmosphere
7%
the country’s most successful Crown
6%
Aquaculture
11%
& Biotechnology
6%
Research Institute.
7%
Product Sales
5%
8%
10%
Climate
5%
Kate Thomson, Chief Financial Officer
Coasts
4%
Hazards
4%
Vessel
4%
International
3%
Energy
3%
Maori Development 2%
8 |
NIWA ANNUAL REPORT 2009
FINANCIAL SUMMARY
Expenditure
Net surplus
Personnel
This financial year the NIWA Group achieved a
Payroll benefits
net surplus of $6.0 million (2008: $10.1 million)
($) in millions
Staff are fundamental to NIWA’s earnings,
against a budgeted net surplus of $7.7 million.
60
and represent about 50% of the company’s
costs. This year, personnel costs rose by
The result reflects NIWA’s decision to continue
$2.3 million. This reflects increasing average
to invest for future growth despite tight
remuneration per staff member, with an
economic times.
average 4% pay rise awarded in the July 2008
50
Dividend
salary round combined with the full annual
impact of the additional one-off pay rise from
NIWA has a track record of returning healthy
December 2007.
dividends to its shareholder (the government
of New Zealand) without compromising
Capital
investment in scientific research.
40
2005
2006
2007
2007
2008
2009
Previous Previous
Last year, NIWA embarked on a three-year
Previous Translated
In 2008–09, NIWA made dividend payments
NZGAAP NZGAAP NZGAAP
$60 million capital expenditure programme to:
of $5.6 million. In total, NIWA has paid
• strengthen infrastructure and equipment
$33.9 million in dividends to the Crown
over the past five years.
to rapidly advance NIWA’s science
• improve the work environment
Profitability
and facilities for NIWA staff
Capital expenditure
NIWA continues to be a profitable company.
($) in millions
• pursue commercialisation opportunities
In light of our extensive capital expenditure
25
programme, the Group budgeted for a lower
Despite the recession, the company has
than usual return on equity this year. On the
continued this investment. Capital expenditure
20
basis of comparable valuations with other
in 2008–09 was $21.2 million, up from $14
Crown Research Institutes (CRIs), NIWA’s
million in 2007–08 and $9 million in 2006–07.
15
return on equity was 9.8%. Shareholding
With additional multi-million dollar expenditure
Ministers expect CRIs to deliver a 9% return
10
planned in 2009–10 on a high performance
on equity as a long-term average.
computing facility at NIWA Wellington and a
5
dynamic positioning system for RV Tangaroa,
Liquidity
this capital investment represents a bold vote
0
NIWA has healthy liquidity, with greater assets
2005
2006
2007
2007
2008
2009
of confidence in the future of environmental
than liabilities, in line with budget expectations.
Previous Previous Previous Translated
NZGAAP NZGAAP NZGAAP
science in New Zealand.
2008–09
2007–08
Total asset base
Average shareholders’ equity at 30 June 2009
Current ratio
1.2
1.5
totalled $84.5 million (2008: $84.2 million).
Quick ratio
1.6
2.1
Net profit after tax
Total average assets were $114.6 million at
($) in millions
30 June 2009 (2008: $109.5 million).
12
10
8
6
More information
The audited financial statements of the National Institute of Water & Atmospheric Research Ltd and Group for
4
the financial year ended 30 June 2009 can be found on pp. 32–59 of NIWA’s Annual Report 2009, or on-line at
www.niwa.co.nz/pubs/ar. This Financial Summary is not part of NIWA’s audited accounts.
2
On 1 July 2006, the Group changed its accounting policies to comply with the New Zealand International Financial
Reporting Standards (NZ IFRS). Where applicable, we show the figures for 2006–07 both as originally reported
0
(NZ GAAP) and ‘translated’ according to the new standards.
2005
2006
2007
2007
2008
2009
Previous Previous Previous Translated
NZGAAP NZGAAP NZGAAP
NIWA ANNUAL REPORT 2009 | 9
“Sustainability is what we do”
Barry Biggs, General Manager Operations
10 |
NIWA ANNUAL REPORT 2009
Peter Marriott, NIWA
SUSTAINABILITY
Our vision is to conduct leading environmental science. Quite simply, sustainability is what we do.
We endeavour to act in an environmentally responsible manner every day.
We are a key provider of advice on sustainability to government agencies, the private sector,
and the general public. We arm decision-makers with high quality information in such areas
740
as fish stocks, air pollution, and energy supply. Our environmental information helps individuals
and companies throughout New Zealand better manage their businesses and their lives. We work
number of hours spent
with a wide range of organisations to develop innovative solutions to environmental challenges,
such as how to minimise the water quality effects of intensive agriculture.
video-conferencing this year
In our operations, we maintain a careful balance: conducting research to provide much-needed
information while minimising our own impact on the environment.
We take our role seriously and will continue to invest in the best technology and scientific
minds available so we can continue to provide superior environmental information that leads
NIWA’s GHG emissions profile 2008–09
to sustainable outcomes.
2%
Diesel including
5%
NIWA vessels
44%
Operating responsibly
12%
Other 22%
Energy consumption is our most significant environmental impact. Diesel used to power our fleet
Electricity
15%
of research vessels is the single biggest contributor of greenhouse gas (GHG) emissions. This year
Air travel
12%
44%
we used 33% less diesel than the previous year, down from 2.4 million litres to 1.6 million litres.
15%
Petrol
5%
This saving, however, reflects the postponement or cancellation of three vessel charters.
Gas
2%
We are constraining our fuel usage by maintaining the lower general cruising speed of our
22%
ocean-going vessels first introduced in 2008. Under current conditions, we have found this speed
reduction provides a good balance between voyage length, contractual obligations to customers,
and reduced fuel use.
Note: ‘Other’ GHG emissions include freight and couriers,
employee commuting, solid waste, and supply chain.
Charting new territories
Our largest research vessel, Tangaroa, travelled almost 36 000 nautical miles in the past year,
with voyages to such areas as the Bay of Islands, the Chatham Rise, and the sub-Antarctic.
Tangaroa’s West Coast canyons voyage in July 2008, for example, was part of a multi-year
Consequences of Earth Ocean Change project. This project’s extended undersea mapping focused
on South Island glaciation and global climate change, as well as helping expand our knowledge
of the West Coast deep marine ecosystems.
Carbon emissions: an ongoing balancing act
One of our ongoing challenges is minimising our carbon footprint while delivering a high standard
of service to our many customers. In our research, we use ocean-going vessels, other motorised
craft, and land-based vehicles. Our staff travel throughout the country and internationally to meet
customers. International conferences and meetings help our scientists maintain relationships with
their overseas peers and stay at the forefront of new knowledge. We regard these face-to-face
connections as important, although we are strictly limiting overseas travel in the current
economic environment.
During the past financial year, we upgraded our video-conferencing system, which reduced the
number of flights taken by staff and Board members for meetings.
Other initiatives implemented during the past year were the procurement of hybrid vehicles for
city-based transport and vehicle pooling for fieldwork where appropriate. When purchasing any
new vehicle for the fleet, the cost of the whole life of the vehicle is carefully considered.
NIWA ANNUAL REPORT 2009 | 11
SUSTAINABILITY
Minimising our consumption
Initiative
Target
66%
Access to online electricity data, via power meters
Successfully establish baseline data as the
every 30 minutes, for the largest NIWA sites to
basis for setting future targets
Greta Point staff travel
accurately measure energy consumption
in a sustainable way,
from walking to
Invest in sustainability initiatives: more efficient
Reduce energy consumption per full-time
heating and alternative energy systems.
employee by 10% by 2012 compared with
carpooling, including:
Provide more bike stands at our main centres to
2006–07
encourage more sustainable ways of commuting
Improve efficiency by using a minimum of 5%
Reduce emissions for NIWA Science
31.3%
biofuels on our larger ocean-going vessels
to below 2006–07 levels by 2010
and continue to research biofuel technology.
and reduce emissions for vessels
Some smaller vessels will be converted to
to 2006–07 levels by 2010
walk, run, or cycle
4-stroke engines, using only small amounts
of petrol
Guidelines for new buildings and renovations,
Building guidelines in place by 2009.
11.1%
and encourage staff behavioural changes to help
Electricity reduction target of 5kWh/m2
reduce energy consumption
by 2010
take the bus or train
Make better use of initiatives introduced by local
Reduce solid waste generated by 10%
industries, councils, and community groups such
of 2003–04 levels by 2009
as waste recycling
Measure and track staff opinions on the role
We are aiming for 70% of our staff seeing
of sustainability in NIWA’s work
sustainability as core to NIWA’s ethos
Mitigating the physical effects of fieldwork
Inevitably, our fieldwork has some effect on the landscape, habitats, and ecosystems we study,
but we strive to minimise our footprint. In any event, our research has essential benefits,
and it helps others save much more than whatever our impact might be.
Our staff have harnessed the sun’s energy in a bid to reduce the environmental effects of fieldwork
and now over 90% of our environmental monitoring stations are solar powered. Telemetered data
loggers are the norm on these sites, which means we are not leaving a carbon tyre print all the
way from our offices to every remote site to manually collect data and confirm the equipment
is operating correctly. Previously, this would have meant monthly visits to each site – thousands
of trips each year – but now equipment is checked and data are relayed to central servers via
cellphone networks or other satellite technology.
12 |
NIWA ANNUAL REPORT 2009
Weathering the storm
The year ending 30 June 2009 was marked by a global economic crisis that proved to be challenging
for most organisations. We were prepared for this challenge and maintained tight financial
Summary of NIWA’s revenue streams, 2008–09
discipline to ‘weather the storm’. A core focus for our organisation was sustaining revenue in order
($) in millions
to retain science capability.
0
10
20
30
40
50
Economic responsibility – leading the way
Foundation for Research,
Science & Technology
As a Crown Research Institute we are required to operate in a financially responsible manner
Other sales
and return a profit to the Crown. Prudent financial management has always been a core focus.
Central government
Despite the global economic downturn, we have maintained revenue, and, as a result, we can
continue to invest in the people and equipment necessary to produce leading
Ministry of Fisheries
environmental science.
Capability funding
Our main revenue source was contestable research funding from the Foundation for Research,
Science and Technology ($48 million).
Private sector
Exporting scientific solutions
Local government
2007–08
2008–09
This year we generated $3.2 million by exporting our science. For example, we provided climate
data training in Singapore, developed a sustainable water supply and treatment system for a coastal
village in Fiji, and worked with the Cook Islands to monitor offshore water quality on Rarotonga and
Aitutaki – a vital project for the islands which rely on tourism and oyster cultivation as their primary
source of income.
80
Building capability
A core focus for 2008–09 was maintaining capability. The Capability Fund is an essential tool for
fostering strategic science, supporting under-funded but nationally-important science capability,
NIWA staff represent us on
developing new capability, conducting ‘risky’ research, and transferring knowledge.
110 international committees
Our need to preserve significant national capability during a recession necessitated a shift in the use
of the Capability Fund – away from building new science capacity to projects that support existing
core skill bases that would otherwise be under-funded. This is a strategic initiative that will continue
in 2009–10.
Science as a viable career
We employ 748 people across six regional centres and nine field offices. We provide highly
specialised employment in rural and urban areas from Bream Bay to Alexandra, generating
opportunities for New Zealanders – and our international colleagues – to pursue a career in science.
Our payroll and benefits totalled $57.5 million for the year ending 30 June 2009. As a commercial
entity, we also contribute to the New Zealand economy by paying tax and dividends to the Crown.
In 2008–09 we paid $2.7 million in tax, and $5.6 million in dividends.
Representing New Zealand on the world stage
Our scientists represent New Zealand extensively on the international stage. Many are leaders
in their fields and their research underpins commercial and economic decisions both here and
overseas. In addition to definitive scientific outcomes, our scientists enhance New Zealand’s global
reputation as a hub for leading edge scientific research.
One such representative is NIWA scientist Dr David Wratt. Dr Wratt is the sole New Zealander on the
Bureau of the Intergovernmental Panel on Climate Change (IPCC), the authoritative international
mechanism for assessing climate change research. Through Dr Wratt’s involvement, we indirectly
benefit New Zealand’s global reputation in the increasingly important climate change arena.
NIWA ANNUAL REPORT 2009 | 13
SUSTAINABILITY
Making science accessible
During the last financial year the use of our databases continued at a high level.
Requests for data from the National Climate Database more than doubled.
65%
Increased public use of our data can be traced to our decision in mid-2007 to provide free access
to key databases as part of our commitment to delivering economic value from our research
NIWA staff have individual
and providing objective science-based information and advice.
development plans
Science output
Performance
Performance
(calendar year)
2008
2007
Commissioned reports
581
495
Presentations on technical information and research results
563
1028
439
Peer reviewed articles
349
315
Keynote and plenary presentations
58
31
number of days allocated
to personal training leave
External requests for information from NIWA’s nationally significant databases & collections
National Climate Database
900 000
360 000
Water Resources Archive
84 500
88 000
NZ Freshwater Fish Database
2217
1550
Marine invertebrate collection and database
63
150
Economies of scale in the supply chain
One of our key strategic initiatives for 2008–09 was to achieve economies of scale by moving away
from regional suppliers to consolidating suppliers across our regional hubs.
In July 2008, we had 2600 active suppliers and processes generating approximately 23 000 invoices
per annum. Our aim is to reduce both by 50% and to identify preferred suppliers, so we appointed
a Strategic Procurement and Asset Manager to manage this process. His achievements so far
include the selection of a single stationery supplier and a single supplier of photocopiers and
printing consumables. Both suppliers service our regional and field offices, and both have a strong
commitment to environmental sustainability. We have also instituted a clear policy that, where
suitable models are available, we prefer hybrid or diesel vehicles over petrol-only vehicles.
Home to New Zealand’s top scientists
NIWA is an environmental science and consultancy services company employing 748 permanent
and temporary staff (712.2 full-time equivalents). We work across 15 sites throughout New Zealand,
its oceans, and beyond, including Australia, the South Pacific, and Antarctica.
Our staff retention rate was especially high this past financial year, with a turnover of 6%,
well below the general average of 17–20% for New Zealand organisations.
We strongly believe staff should have a balanced life combining work and outside activities.
We implement a Family and Work policy that complements existing training and personal
development policies.
We give staff time to develop their professional skills within the workplace, and also provide
special personal training leave of three days a year. This leave is unique to NIWA, and provides
an opportunity to up-skill in any non-work interest.
Over 76% of staff see themselves working for NIWA in 12 months’ time. Our target is to have 70%
of staff planning to be working for us in three years’ time.
14 |
NIWA ANNUAL REPORT 2009
The NIWA team
We have a large, talented research team of 536 researchers, including 10 postdoctorates,
and assisted by 33 dedicated research support staff. Alongside our researchers, a total of 179
management and general support staff provide the essential services any high-tech, multi-million
400000+
dollar company requires, including IT, human resources, finance and administration,
and communications and marketing.
Each year we also supervise a number of students. This year 37 PhD and 15 Masters students were
people visited Kelly Tarlton’s
incorporated into the NIWA fold.
facilities sponsored by NIWA
Competing for top talent
A key challenge is the attraction and retention of high-quality staff in an increasingly competitive
global talent market. We have a well-qualified team, including more than 200 PhDs, and our staff
are much in demand.
11
We endeavour to provide staff with the time and resources to deliver the best possible results with
the best available scientific equipment. In particular, we aim to provide more public good science
research time to senior scientists, but we are fiscally constrained at the moment.
regional & local Science &
Technology Fairs sponsored
Sharing the knowledge
In an effort to communicate more sustainably, we have stopped producing hard-copy newsletters
and have moved to an electronic format. We also launched a new website which better allows
readers to stay informed of our activities. Science without communication is of limited value.
We aim to provide clear, objective, inspirational communication to engage all our various
audiences on the significant environmental issues facing New Zealand and the world.
Deep Sea Coral Symposium
The world’s premier conference on the science and management of deep sea corals and coral
ecosystems drew about 200 scientists, resource managers, students, and policymakers from 29
countries to Wellington in December 2008. Opened by Minister of Research, Science and Technology
Hon Dr Wayne Mapp, the symposium was hosted and sponsored by NIWA and included the launch
of ‘Corals – hidden beauties of the deep’ a display of corals held in stewardship by NIWA, Te Papa,
the Ministry of Fisheries, and the Department of Conservation.
The symposium covered a range of coral research topics, including coral ecosystems
and biodiversity, climate change and ocean acidification, management decisions and policy
for corals, and human impacts on coral habitat.
Supporting our community
Sponsorship is another way we engage with our community. We use a significant part of our small
corporate sponsorship fund to foster environmental science knowledge and education.
Activity
Target 2010
Sponsorship of the NIWA Interactive Room at Kelly Tarlton’s
Continue sponsorship until
Antarctic Encounter and Underwater World in Auckland.
2010 when it will be reviewed.
45 000 students visited via educational programmes and an
additional 400 000 members of the public viewed this space
in 2008-09.
Science and Technology Fairs
We will sponsor 10 regional
NIWA sponsored or contributed funding to eleven regional
and local Science and
and local science fairs.
Technology Fairs in 2009 and
into 2010 when the sponsorship
will be reviewed.
NIWA ANNUAL REPORT 2009 | 15
SUSTAINABILITY
Collaboration
We have over 530 collaborative links with organisations internationally, and representives on 110
Number of injuries
international committees. These critical working relationships allow us to facilitate research
and provide scientific advice to the community.
45
2007–08
2008–09
40
A leading example of this collaboration is our role as host of the secretariat of the New Zealand
35
Climate Change Centre. The centre is a joint initiative by all New Zealand CRIs, the University of
Canterbury, and Victoria University of Wellington. The centre facilitates collaboration to develop,
30
communicate, and apply science-based solutions to climate change-related issues. In May 2009,
25
the centre organised a major climate change adaptation conference held at Te Papa in Wellington.
20
15
We are also a member of the New Zealand Energy Research Alliance which aims to enhance the
10
scope, capability, and capacity of energy research to help New Zealand meet future
5
energy challenges.
0
Medical
Medical
First Aid
Major
Internationally, for example, we work with the US Geological Survey (USGS) under a formal bilateral
injuries
injuries
injuries
injuries
arrangement to facilitate scientific and technical cooperation in water resources science. The USGS
Lost time
No lost time
No treatment
is the largest water, earth, biological science, and civilian mapping agency in the United States.
Injury and lost time
Better reporting systems mean we are recording more ‘near misses’, which helps us improve our
health and safety practices. This year, we recorded a total of 77 injuries, down from 97 the previous
year. We push health and safety messages from the highest level, constantly reminding staff that
21%
we do not want anyone to be injured at work.
reduction in number
Cultural collaboration
of injuries from the
The natural environment, the focus of our research and development, is of immense significance
previous year
to Ma-ori. We place high priority on developing and maintaining effective long-term relationships
with iwi, hapu-, and other Ma-ori organisations throughout the country.
Making Ma-ori perspectives heard
Our long-term relationships with Ma-ori are managed through the National Centre for Ma-ori
Environmental Research, Te Ku-waha o Taihoronukurangi. Twelve of NIWA’s Ma-ori staff are
dedicated to Te Ku-waha. The centre’s overarching goal is to unlock the innovation potential
of Ma-ori knowledge, resources, and people to help New Zealanders create a better future.
Research driven by Ma-ori
This year Te Ku-waha’s key projects include:
• Waikato River Independent Scoping Study – a Ministry for the Environment funded project,
governed by the Guardians Establishment Committee. This study will identify rehabilitation
priorities in relation to restoring the health and wellbeing of the Waikato River, quantify the
likely cost of those priority activities, and provide background information to the establishment
and operation of the Waikato River Clean-up Trust.
• Assessment of the state of the Rangitaiki River within the Ngaa-ti Manawa rohe – a Crown Forest
Rental Trust funded project that reported on the state of the upper Rangitaiki River.
This research will allow Nga-ti Manawa to develop strategies for protecting the river and its
biota, and enhance its fisheries.
• Advanced ecotechnologies for sustainable wastewater management in Ma-ori communities –
working with Tainui Awhiro, Ngaa-i Tai, and Te Roroa, this three-year Foundation for Research,
Science and Technology funded project aims to develop new tools and ecotechnologies for
improved management of wastewater in rural Ma-ori communities.
16 |
NIWA ANNUAL REPORT 2009
Te Ku-waha achievements
A number of significant research projects were completed by Te Ku-waha in collaboration with other
staff in the past year. Examples are:
85
• Te Wai Maa-ori funded tuna survey of the Lake Omapere and Utakura River catchment was
completed with the assistance of the Lake Omapere Trust and Nga-puhi Fisheries Limited.
working relationships with
• Te
Ku-waha, in partnership with Nga-ti Rongomai and GNS Science, concluded a 3 year study
investigating natural hazard planning issues facing Ma-ori communities. Recommendations
Ma-ori groups throughout NZ
from the study provide a basis for addressing questions over the alignment of present hazard
and management policy with Ma-ori needs.
• Two Te Ku-waha staff were hosted by the BC Centre for Aquatic Health Sciences (Vancouver
Island, Canada) as part of the Building Aquatic Science Capacity in Aboriginal Communities
project. Te Ku-waha staff presented at three community meetings (Klemtu, Quatsino,
12
and Campbell River) with groups of 20–120 students and teachers. They talked about career
pathways, research, and working with indigenous communities.
Embedding te reo across the organisation
dedicated staff in Te Ku-waha
This year Te Ku-waha held three te reo and tikanga Ma-ori noho marae attended by a total of 59 staff.
We will continue to offer these courses, with a target of 60 staff participating in the coming year.
Community engagement
Te Ku-waha members actively engage with the wider community, both Ma-ori and non–Ma-ori, sharing
their knowledge and skills in many ways, including:
Activity
Number
Hui/public appearances
40
Conference presentations
8
Training workshops and fieldtrips
5
School visits
4
Journal papers
4
Media interviews
5
Maintaining relationships
We have procedures for recording all interactions with Ma-ori organisations, and we are constantly
striving to improve these. The formalisation of our relationships with Ma-ori research partners
is typically driven by the needs of our partners (except for sub contracts). In all cases, Te Ku-waha
works hard to ensure we have a “seen face” and that the relationships remain functional
and healthy for the long-term benefit of both parties.
Agreement type
Typical use
Total
Memorandum of
Typically for long-term working relationships with larger
10
Understanding (MoU)
Ma-ori groups.
Letters of support
Pre-research proposal submission; supplied by potential
16
Supplementary material on NIWA’s
or understanding
research partner in support of a specific research proposal.
sustainability including GRI G3 indicators,
can be found at www.niwa.co.nz/pubs/ar
Letter of intent
Typically after research funding has been approved; project
3
and timeframe specific; includes short outline of project.
NIWA ANNUAL REPORT 2009 | 17
“Capability funding is helping us preserve vital research capability”
Dr Rob Murdoch, Director Research
Capability funding is provided to Crown Research Institutes (CRIs)
Supporting climate change collaboration
through the Ministry of Research, Science & Technology to support
and enhance long-term research capability.
NIWA hosts the secretariat of the New Zealand Climate Change Centre.
Covering NIWA’s contribution to the financial support of this centre is
Each CRI’s capability funding is based on its proportion of the total
just one example of the use to which we put our capability funding.
government research investment. In 2008–09, NIWA received $10.53
million (excluding GST) from this source, up from $10.08 million
The centre is a collaborative endeavour involving all nine CRIs, Victoria
in 2007–08.
University of Wellington, and the University of Canterbury. Its goal
is to enhance the capacity of New Zealand, both domestically and in
Given current economic conditions, we are devoting more funds than
partnership with other countries, to anticipate, mitigate, and adapt to
in the past to supporting existing capability. We more than trebled our
climate change. It facilitates collaboration to develop, communicate,
allocation to supporting core skill bases, whilst maintaining or trimming
and apply science-based solutions to climate change-related issues.
funds in other categories. This will continue in 2009–10 as we manage
our way through the recession.
The centre had a busy and successful year. Its highest profile
achievements were its inaugural conference, “Climate change
adaptation – managing the unavoidable”, in May 2009, and its
2008–09
2007–08
submission to the emissions trading scheme select committee.
$’000
%
$’000
%
(excl GST)
(excl GST)
Climate change adaptation conference
Support core
1,879
18
532
5
skill bases
The centre took an innovative approach, by commissioning the
development of two ‘scenarios’ describing New Zealand’s possible
Advance new areas of
4,092
39
4,053
40
future under climate change, assuming different actions to abate
science & innovation
or otherwise global carbon emissions. The centre then invited
Transfer knowledge
1,610
15
1,527
15
representatives from six key sectors to address the impacts and
to end-users
adaptation measures they would face under the two scenarios.
Build future
2,014
19
2,720
27
The conference reflected the collaborative nature of the centre’s work.
research capacity
Victoria University and NIWA worked together to develop the scenarios,
providing both a strong backbone for the conference and several future
Bridge the gap
939
9
1,250
13
between research
research opportunities. The Ministry of Agriculture and Forestry,
& commercialisation
Ministry for the Environment, Meridian Energy, and the Royal Society
of new products
provided key sponsorship. Over 180 people from across New Zealand
and Australia, and a strong media contingent, attended the event.
Total
10,534
10,082
ETS submission
The centre’s submission to the emissions trading scheme
select committee was a strong example of how working across
organisations makes good sense for a multi-disciplinary issue such
as climate change.
On 31 August 2009, the select committee released its report which
contains the following statement: “We support the newly-formed
multi-science agency, the New Zealand Climate Change Centre, which
will bring together capabilities from across the science system with a
particular focus on climate change and adaptation.”
The centre is set to play a strong role in facilitating expert input into
national and international climate change processes in future.
18 |
NIWA ANNUAL REPORT 2009
CAPABILITY FUNDING
Capabilities maintained, enhanced, or developed with Capability Fund, 2008–09
Areas of nationally
Forecast
Achievements
recognised expertise
Aquaculture
• maintain skills in biotechnology and finfish broodstock development
• researched fish nutrition and groper broodstock expanded through
& Biotechnology
• continue sea-cage trial for finfish aquaculture
wild capture and F1 on-growing
• support proof-of-concept research on novel biotechnologies
• groper sea-cage trials initiated in cold water environment
and added-value opportunities
• supply options researched for novel marine materials with medical
and industrial application
Atmospheric
• maintain critical mass in trace gas and air quality research in the
• postdoctoral fellow supported to study agricultural greenhouse
Trace Gases
face of declining research time
gases, and technicians trained on measuring vehicle emissions
• develop a regional carbon cycle model utilising new capability from
• post doctoral fellow supported to implement carbon tracker model
a postdoctorate
Aquatic Biodiversity • maintain biodiversity capability at risk from declining research time
• 17 scientific papers published, submitted, or prepared
& Biosecurity
• enhance core skills in freshwater biosecurity through support of two • visiting scientists supported to study didymo ecology and pest
visiting scientists
fish biology
• continue support for postdoctorate studies in marine biodiversity
• postdoctoral fellow supported to model marine species
distribution patterns
Climate
• support collaboration on climate change advice through the NZ
• centre supported and national stakeholder conference
Climate Change Centre
on adaptation to climate change organised
• build capability in climate change modelling through support
• postdoctoral fellow supported to implement regional
of a postdoctoral fellow
climate models
Coasts
• enhance core skills in key areas of coastal hydrodynamics,
• postdoctoral fellows supported to study finfish aquaculture, beach
near-shore ecology, and effects of marine farming through
sedimentation modelling, coastal river plume dynamics, food web
support of five postdoctoral fellows
analysis, and benthic environments
• strengthen understanding of interactions between coastal
• researched land-use impacts on coastal regions by use of
aquaculture and land-derived contamination
remote sensing
• assist iwi in implementing techniques for managing coastal
• established study with Te Uri A Hau on management of shellfish
ecosystems, especially shellfish and pelagic fish
habitats in the Kaipara Harbour
Energy
• publish guidelines for assessing environmental impacts of marine
• tools developed for marine energy assessments
energy installations
• wind forecasts improved through model output statistics
• develop and refine wind energy forecast technology
Fisheries
• develop tools to quantify effects of fishing on seabirds, bycatch,
• models developed to quantify seabird population changes
and the environment
• developed and upgraded software for catch-at-age and ancillary
• improve our core fisheries survey and analytical software tools
fisheries data analysis
• enhance fisheries modelling skills through in-house training
• training sessions and workshops on modelling and data
management completed
Freshwater
• improve water allocation tools for stakeholders
• improved models on water availability for irrigation
• maintain national capabilities in lake and wastewater sciences
• research on lake modelling and artificial wetland waste
• continue support for postdoctoral fellows in key areas of
treatment systems
stakeholder need
• postdoctoral fellows supported to study sediment dynamics,
• develop capability in urban waterway science and treatment
catchment modelling, and water chemistry
of urban contaminants
• improved ability to model contaminants from stormwater sources
• enhance national capability in freshwater science through
• staff sabbatical supported to study freshwater quality statistics
support of two sabbaticals and technical training
and training on emerging freshwater contaminants
Ma-ori Development
• build NIWA’s Ma-ori research capability by supporting publication
• five papers published in peer-reviewed scientific journals
in the primary scientific literature
• studies on the health of lake mussel populations completed
• support research on the health of central North Island lakes
• collaboration established with Nga-ti Hine, Nga-ti Whanaunga, Nga-ti
in collaboration with iwi
Hikairo, and Nga-ti Pukenga on aspects of freshwater management.
• support staff collaborations and technology transfer initiatives with
iwi on lake restoration, estuarine health, and eel stock assessment
Natural Hazards
• advance the weather and associated flood prediction models
• catchment models improved through study of catchment processes
• promote the use of forecasting products for floods
• forecasting products made available to local government
and coastal hazards
and energy companies
Oceans
• maintain critical mass in core skill areas of ocean sciences through
• postdoctoral fellows supported to study seabird distributions,
support of three postdoctoral fellows
ocean modelling, and zooplankton taxonomy
• develop new capabilities in ocean geology; in particular, new
• researched geomorphology of marine canyons along the active
methods for identifying and characterising active submarine faults
plate boundary
Environmental
• maintain integrity of environmental networks under threat from
• upgraded communication systems of the hydrometric
Information
static FRST funding
and climate networks
• develop new tools for real-time data capture, transfer,
• enhanced the functioning of newly developed data acquisition
and display
and presentation instrumentation
NIWA ANNUAL REPORT 2009 | 19
PERFORMANCE AGAINST STATEMENT OF CORPORATE INTENT
Financial Performance Measures
Corporate commitment
NIWA continues to fulfil its financial obligations as specified in section 5
NIWA has already implemented sustainability initiatives with acceptable
of the Crown Research Institutes Act 1992. These are:
payback periods and co-benefits. We committed 0.1% of revenue
to sustainability initiatives this year.
a) to operate in a financially responsible manner so that sufficient
operating funds are generated to maintain financial viability
External sustainability advice/services
b) to provide an adequate rate of return on shareholders’ funds
Demand for climate and water information has been exceptionally
c) to operate as a going concern
strong since web-based access to this data became free in July 2007,
The apparent drop in requests for information from the marine
2008–09
2008–09
2007–08
Actual
Target
Actual
invertebrate collection and database is due to changed recording
procedures. It was in fact an extremely busy year for the collection,
with 16 472 new samples registered on the database. The collection
Revenue
now houses 28 new species unique in the world.
$120.4M
$125.6M $120.7M
(total including interest income)
Science outputs and collaboration
Current ratio
1.2
1.2
1.5
Quick ratio
1.6
1.6
2.1
Many of our targets for science outputs were exceeded in 2008–09.
Adjusted return on equity (using
Examples include the number of peer-reviewed articles and the number
valuation basis comparable with
9.8%
11.9%
17.9%
of keynote and plenary presentations, indicating that NIWA scientists
other CRIs)
are highly regarded by their peers.
Return on equity
7.1%
8.8%
12.8%
NIWA has numerous significant interactions with companies and
Return on assets
7.5%
9.2%
12.5%
industry boards. Detailed data on this indicator is always included
EBIT margin
7.1%
8.5%
11.3%
in our September quarterly report to Shareholding Ministers.
The apparent increase in the number of overseas collaborative links
All figures in this table comply with the New Zealand International Financial
Reporting Standards.
reflects new reporting procedures. The figure of 537 is conservative,
counting only collaborations established through public good
Non-Financial Performance Measures
science funding.
NIWA operates according to the principles set out in section 5 of the Act,
Environmental sustainability
which require:
Staff uptake of video-conference facilities continues to be higher than
a) that research by NIWA should be undertaken for the benefit
anticipated, now at 740 hours for the year.
of New Zealand
b) that NIWA should pursue excellence in all its activities
Good employer
c) that in carrying out its activities, NIWA should comply with any
Staff turnover is down, partly reflecting current economic conditions.
applicable ethical standards
d) that NIWA should promote and facilitate the application of the results
Education
of research and technological developments
Demand for external training courses was relatively low.
e) that NIWA should be a good employer
This year we filled nine, against a target of 20.
f) that NIWA should be an organisation that exhibits a sense of social
responsibility by having regard to the interests of the community in
Innovation
which it operates and by endeavouring to accommodate or encourage
The increased number of new or improved products, processes,
those interests when able to do so
and services (135 this year) reflects a new reporting process.
In most cases, NIWA met its non-financial performance targets for
Examples include a new suite of environmental monitoring products,
2008–09. The following commentary focuses on major variances where
a web-based system supplying water quality information to shellfish
NIWA either significantly exceeded or did not meet its targets.
harvesters, and an energy asset database for New Zealand.
20 |
NIWA ANNUAL REPORT 2009
Performance Targets
Performance Targets
2008–09
2008–09
2007–08
2008–09
2008–09
2007–08
Actual
Target
Actual
Actual
Target
Actual
Corporate commitment
Hours of video-conference
740
300
650
Board reporting and communication
0.1%
0.5% revenue
0.3 %**
of commitment, sustainability one
directed toward
Energy efficiency (kWh/m2) of research
294
Improvement in
253.9
of core values
sustainability
buildings
building efficiency
initiatives
of 5 kWh/m2
by 2010
External sustainability advice/services
Electricity consumption
8.493 kWh/FTE
Reduction of
8.038 kWh/FTE**
Requests for information from
(figures exclude Bream Bay Aquaculture
energy consump-
our nationally significant databases
Park & Kupe supercomputer)
tion per FTE by 10%
and collections
by 2012 compared
- National Climate Database
900 000
25 000
360 000**
with 2006–07
- Water Resources Archive
84 500
60 000
88 000
Recycling and solid waste production
103 kg/FTE 10% reduction in
56kg/ FTE
all recycling
solid waste and
paper recycling
- NZ Freshwater Fish Database
2217
1500
1550
168 kg/FTE
paper usage by
94kg/FTE
solid waste 2009 (cf. 2003–04)
solid waste
- Marine invertebrate collection
63
150
> 150
and database
Number of staff using alternative modes
Wellington staff:
50% by 2009
Wellington staff:
Science outputs and collaboration (including international connectedness)
of transport
66% travel to work
60% travel to work
using sustainable
using sustainable
Commissioned reports to users*
581
500
495
means more than
means more than
3 days a week
3 days a week.
Presentations on technical information
and research results*
563
500
1028
Number of staff who believe sustainability
52.9%
70% by 2009
59.2%
Publications on technical information and
is core to NIWA ethos
research results*
Social and cultural sustainability
- Papers in trade journals, magazines,
177
200
217
series, or books
Total staff FTEs (permanent and fixed
712.2
750
726
term, including subsidiaries)
- Conference papers and abstracts
527
420
392
(submitted)
Staff composition
536 in research
502 researchers
501 researchers
(head count)
teams
43 research
41 research
- Research monographs or books
146
120
86
33 research
support
support
support
117 general
110 general
- Popular books/articles
135
200
217
179 other
support
support
28 management
28 management
- Web-based publications
33
20
35
20 postdocs
15 postdocs
Peer-reviewed articles*
349
300
315
Number of noho marae attendees
59
60
57
Keynote and plenary presentations*
58
15
31
Good employer
Customer profile
See pp. 8–9 of this
No target set
See pp. 11–12
(by revenue & national centre)
Annual Report
of NIWA’s Annual
Achievement of a desirable
60.5% positive
70% of staff are
75.8% of staff
Report 2008
work-life balance
about working
positive about
intend to continue
for NIWA
working for
working at NIWA
Customer feedback
No survey carried
50% of clients
No survey carried
76% see them-
NIWA and see
for at least the
out in 2008–09
observe an
out in 2007–08
selves working for
themselves
next 12 months
improvement in
NIWA in 12 months’
working for
client relations with
time (no three-year
NIWA in three
NIWA based on
data available)
years’ time
survey of industries
Value of financial benefits received by staff
$2.9M
No target set
$2.8M
Number of representations on
110
Staff turnover
6.3%
< 12%
9.3%
international committees
organisations
110
66
(80 staff)
- Key staff
0.61%
< 5%
1.2%
Number of new jobs created
Number of collaborative formal links with
- Main city centre
27
20
32
overseas organisations
537
30
150
- Rural areas
0
10
2
Number of international
275 visits
159 visits
Staff development
visits/visiting scientists
51 visiting
150
45 visiting
scientists
scientists
- Staff with professional development plans
65%
90%
Data not available
- Staff days allocated to
439
400
502
Number/value of international
personal development
consultancy contracts
$3.2M
$3.0M
$10.2M
Lost time from injuries/accidents
0.014%
< 0.03%
0.012%
Number of significant interactions with
Number of incident/near miss reports
77
< 90
140
companies and industry boards in NIWA’s
key target sectors
Education
- percentage of companies with which
Data to be reported
85%
65%
Number of postdocs funded, teaching
NIWA had meaningful interactions
in quarterly report
fellowships awarded, PhD & MSc students
supervised, scholarships awarded
- percentage of companies with which
- Postdocs funded
10
20
27
NIWA was involved in decision-making
30%
38%
- Teacher fellowships
3
3
3
- percentage of companies
- PhD & MSc students supervised
52
60
51
providing revenue
80%
79%
- Scholarships awarded
3
No target set
- number of positions on industry boards
> 10
3
>10
Number of external training courses run
9
20
13
Environmental sustainability
Innovation
Patents granted
Total greenhouse gas emissions (vehicle
8650 tCO
Reduce total
10 170 tCO **
2
2
fleet, gas, electricity)
emissions for
- In New Zealand
0
1
0
NIWA Science to
- Overseas
0
1
0
below 2006–07
levels by 2010
Licensing arrangements entered into
3
3
1
Reduce emissions
New or improved products, processes,
135
20
19
for vessels
and services
to 2006–07
levels by 2010
Joint ventures or formal associations
4
6
6
Spin-out companies formed
0
0
0
Total GHG emissions
12.1 tonnes/FTE Reduce to 2006–07
14 tonnes/FTE**
levels by 2010
Spin-off companies formed
0
0
0
and a further 10%
reduction by 2012
* Measured for calendar year.
** Figure adjusted since first reported to enable year-on-year comparisons.
NIWA ANNUAL REPORT 2009 | 21
22 |
NIWA ANNUAL REPORT 2009
Tim Hay, NIWA
National Institute of Water & Atmospheric Research Ltd
BOARD OF DIRECTORS
Jason Shoebridge, Wendy Lawson, Craig Ellison, Dennis Cairns, Chris Mace, John Morgan (CEO),
Ed Johnson, Helen Robinson
Jason Shoebridge
Dennis Cairns
Ed Johnson
Jason Shoebridge is an Auckland-based
Dennis Cairns farms a hill property in
Ed Johnson, FInstD, is Chair of Fulton Hogan
management consultant and chartered
Southland. He has held management
Ltd, Goldpine Industries Ltd, and Port
accountant, who has led consulting
positions in the mercantile and meat
Marlborough New Zealand Ltd, and a director
assignments across a range of industries
industries and currently holds directorships
of several entities. He retired as Chairman
and disciplines in New Zealand and
on several private companies. Dennis was
and CFO of Shell New Zealand in 2002. In
overseas. Jason has had a number of senior
Board member and Chair of the Southland
2001, Ed became the inaugural Honorary
commercial and financial management
District Health Board from 2001 until 2008.
Fellow of Massey University’s Centre for
roles internationally in large corporates,
He was also an executive member and Chair
Business and Sustainable Development.
as well as with an international chartered
of DHBNZ before joining the NIWA Board.
accounting firm.
Helen Robinson
Chris Mace (Chairman)
Helen is the founding Chief Executive,
Dr Wendy Lawson
Chris Mace is an Auckland-based
TZ1 Registry (now Markit Environmental
Dr Wendy Lawson is a glaciologist with
businessman. He chaired the Crown
Registry). Helen has led many technology
a particular interest in the impacts of
Research Institute ESR in the 1990s and later
companies over the past 20 years,
climate change and earth systems. She has
Antarctica New Zealand. He was a founding
including as CEO Microsoft, NZ and as
more than 25 years of remote field science
trustee of the Sir Peter Blake Trust and
Vice President APAC, Pivotal Corporation.
experience in Arctic, Antarctic, and alpine
continues as a trustee of the Antarctic
Her directorships include NZ Business
regions. She is head of the Department
Heritage Trust. Chris was awarded a CNZM
Excellence Foundation, Auckland Plus,
of Geography and Professor at the
for services to Antarctica and the community,
and MGL Services NZ. She chairs Auckland
University of Canterbury, and serves
and was appointed Chairman of NIWA
Metro Project’s Innovation Strategy.
on the Board of the Antarctic Research
in July 2009.
Centre at Victoria University.
John Morgan (Chief Executive Officer)
Craig Ellison (Deputy Chairman)
John joined NIWA as CEO in April 2007.
Craig Ellison is a director on several
He has extensive senior executive and
boards, including Airways Corporation
governance experience in the science
of New Zealand, and New Zealand Trade
sector, including as CEO of AgriQuality Ltd,
& Enterprise, as well as chairing the
Executive Director of Orica New Zealand Ltd,
New Zealand Seafood Standards Council.
and Chair of New Zealand Pharmaceuticals
Craig was deeply involved in the settlement
Ltd. John is passionate about the role science
of Ma-ori commercial fisheries claims and
can play in transforming New Zealand’s
maintains an interest in Ma-ori governance
economy, society, and global reputation.
structures and resource management.
He currently chairs the joint industry/
government Business Capability Partnership.
NIWA ANNUAL REPORT 2009 | 23
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 2009.
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 achieved a net surplus of $6.0 million (2008: $10.1 million) against a budgeted net surplus of $7.7 million.
This was achieved on a turnover of $120.4 million (2008: $120.6 million), against budgeted revenue of $125.6 million.
Average shareholders’ equity at 30 June 2009 totalled $84.5 million (2008: $79.3 million). Total average assets were $114.6 million at 30 June 2009
(2008: $109.5 million).
Group actual performance versus Statement of Corporate Intent (SCI)
Years ended 30 June
Actual
SCI
Actual
2009
2009
2008
$’000
$’000
$’000
Total revenue (includes interest income)
120,438
125,618
120,671
Operating expenses, depreciation, and amortisation
111,353
115,067
106,291
Operating surplus before tax
9,050
10,529
14,309
Net surplus
6,011
7,670
10,095
Average total assets
114,559
116,243
109,481
Average shareholders’ funds
84,465
87,391
79,306
Profitability
EBIT margin (%) (EBIT/revenue)
7.1
8.5
11.3
Adjusted return on average equity after tax (%) (net surplus/adjusted average equity)
9.8
11.9
17.9
Return on average equity after tax (%) (net surplus/average equity)
7.1
8.8
12.8
Return on assets (%) (EBIT/average total assets)
7.5
9.2
12.5
Liquidity and efficiency
Current ratio
1.2
1.2
1.5
Quick ratio
1.6
1.6
2.1
Financial leverage
Debt to average equity (%)
36
34
37
Gearing (%)
1
-
-
Proprietorship (%) (shareholders’ funds/total assets)
74
75
72
Donations
Donations of $8,180 were made during the year (2008: $10,957).
Dividends
Dividend payments of $5,649,250 (2008 $186,750) were made to the Government of New Zealand (the Crown) as the sole shareholder.
Directors
The appointment of Dennis Cairns and Helen Robinson to the Board of Directors on 1 July 2008 and the retirement of Sue Suckling and Graham Hill
on 30 June 2009 were the changes to the Board of Directors for the year ended 30 June 2009. Christopher Mace and Jason Shoebridge were
appointed to the Board of Directors on 1 July 2009.
24 |
NIWA ANNUAL REPORT 2009
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 5 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:
Christopher
Mace
Craig
Ellison
Chairman Director
28 August 2009
Statement of responsibility
The following statement is made in accordance with section 155 of the Crown Entities Act 2004.
1. The Board of the company is responsible for the preparation of these financial statements and the judgements used therein.
2. The Board 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 the Board, these financial statements fairly reflect the comprehensive income, changes in equity, financial position,
and cash flows of the National Institute of Water & Atmospheric Research Ltd and Group for the year ended 30 June 2009.
Christopher
Mace
Craig
Ellison
Chairman Director
28 August 2009
NIWA ANNUAL REPORT 2009 | 25
CORPORATE GOVERNANCE STATEMENT
Corporate governance approach and principles
The Crown Company Monitoring Advisory Unit issues an “Owner’s
expectations manual” for Crown Research Institutes which
Corporate governance remains a topical subject here in New
is designed to assist boards to operate efficiently in their roles
Zealand and around the world due to high profile corporate collapses
and to clarify their responsibilities. In particular it takes account
and weakening global economies. Strong and effective corporate
of expectations of the board members of a company owned by
governance is seen as key to restoring accountability for the public,
the Crown, as opposed to private or publicly listed companies.
stakeholders, and shareholders.
The manual focuses on governance, reporting, and their role
Our Board of Directors (‘the Board’) continue to view governance
and responsibilities in general rather than operational activities.
as an essential factor of accountability and are continually striving
We are committed to ensure that best practice governance principles
to achieve and maintain robust and transparent corporate governance.
and ethical standards are upheld and applied consistently.
We believe that corporate governance is not just a matter of ticking
This governance statement outlines the main corporate governance
boxes to ensure compliance, but simply about doing the right things for
practices as at 30 June 2009. Unless otherwise stated, they reflect the
our shareholders and stakeholders by applying our highest standards.
over-arching practices in place throughout the financial year ending
Our corporate governance deals with how the company is directed
on that date.
and controlled to ensure good ethical behaviour and promote
Key elements of effective governance
shareholders’ interests in a sustainable way. In particular, corporate
governance applies to the role of the Board and the need to ensure
An effective board has a balance of independence, skills,
a framework of effective accountability and transparency.
knowledge, experience, and perspectives.
Our key elements of effective governance are:
Board composition and activity
• an
effective board that has a balance of independence, skills,
knowledge, experience, and perspectives;
Shareholding ministers appoint Board members under the Crown
Entities Act 2004 and the Board are required to meet the same
• input into the company’s strategic approach and direction;
obligations as directors of private sector companies.
• a
proactive
audit and legislative committee;
Board directors are selected and appointed on the basis of their skills
• a
remuneration committee that promotes transparency, fairness,
and experience. Additionally, the balance of these skills and experience
and reasonableness;
is required to match the strategic direction and needs
• a
sound
internal control framework;
of the NIWA Group.
• a
relevant
code of conduct to promote our responsible ethical
Appointment of directors is for a term of up to three years.
behaviour;
Directors may be reappointed for a second term of up to three years,
• clear,
enforced
policies and procedures;
although this is not automatic, with ministers basing their decision
on the company’s needs. Both the Chair and the Deputy Chair are
• effective
management of risk;
appointed by the Shareholding Ministers.
• independent,
effective
external auditors; and
During the financial year ended 30 June 2009, the Board comprised
• transparent
disclosure and effective communication with the
seven independent non-executive directors (including the Chair).
public, our shareholders, and our stakeholders.
The director’s profiles are presented on page 23. Board meetings
The NIWA Group is a Crown Research Institute, established under the
are held monthly. The Board formally met twelve times during the
terms of the Crown Research Institutes Act 1992 and the Public Finance
financial year.
Act 1989, and all shares are held by the Minister of Finance and the
Minister for Research, Science & Technology on behalf
of the Crown.
The Board’s authority and accountability is based upon the two acts
noted above and the Statement of Corporate Intent (SCI). The SCI
is produced annually, and sets out the Board’s strategic objectives,
specific goals, and performance targets. The SCI is submitted to the
Shareholding Ministers for acceptance.
26 |
NIWA ANNUAL REPORT 2009
Membership and attendance
Director
Date of
Appointment
Board
Audit
Remuneration
appointment
term expires
Committee
Committee
Sue Suckling (Chair) (resigned 30 June 2009)
1 March 2001
30 June 2009
12
3*
1
Graham Hill (resigned 30 June 2009)
27 May 2002
30 June 2009
11
Craig Ellison (Deputy Chair)
1 July 2007
30 June 2010
11
3
Ed Johnson
9 June 2005
30 June 2011
12
3
1
Dennis Cairns
1 July 2008
30 June 2011
11
3
Helen Robinson
1 July 2008
30 June 2011
9
Wendy Lawson
1 July 2006
30 June 2012
7
* The Chair is an ex-officio member of the Audit Committee.
Membership of subsidiary Boards
Director
NIWA Vessel
NIWA Australia
NIWA Environmental Unidata Pty Ltd
Management Ltd
Pty Ltd
Research Institute
Sue Suckling (resigned 30 June 2009)
√*
√*
√*
Craig Ellison
√
√
√
Graham Hill (resigned 30 June 2009)
√
√
√
Ed Johnson
√
√
√
David Saunders1
√
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 2009 | 27
CORPORATE GOVERNANCE STATEMENT
Responsibilities of the Board and management
A proactive audit and legislative committee
The Board of the NIWA Group is responsible for managing the business
Audit and Legislative Compliance Committee
and the affairs of the company as stated within the Companies Act.
The Audit and Legislative Compliance Committee is a sub-committee
The NIWA Group is a Crown company and the Board differs in some
of the Board. During the financial year, the Audit and Legislative
respects from a board of a privately owned company. For example,
Compliance Committee comprised three members of the Board
all operation decisions must be in accordance with the company’s SCI.
and met formally three times with the NIWA Chair as an
The responsibilities of the Board include but are not limited to:
ex-officio member.
• establishing
objectives;
Four main principles underlie the effectiveness of the
audit committee:
• reviewing and approving major strategies for achieving objectives;
• independence – all of the members are independent of the Executive
• managing
risks;
Team, therefore they are able to provide objective
• reviewing and approving capital investments;
and impartial advice;
• ensuring compliance with statutory requirements;
• competence – the members have the required skills and experience
• providing leadership in the relationship with key stakeholders;
to serve on the committee;
• determining the overall policy framework within which the business
• clarity of purpose – the role and purpose of the committee
is conducted;
is clearly defined and linked to risk management; and
• establishing appropriate governance structures; and
• open and effective relationships – the committee believes
• monitoring management’s performance with respect
in and encourages open and transparent communication
to these matters.
with all management, employees, stakeholders, and internal
and external auditors.
The Board delegates management of the day-to-day affairs
and management responsibilities of the NIWA Group to the Chief
The core responsibilities of the Audit and Legislative Compliance
Executive Officer (CEO) who, with the support of his executive team,
Committee include:
delivers the strategic direction and goals determined by the Board.
• legislative and regulatory compliance;
A formal delegations authority framework establishes the operational
• the risk management framework;
and expenditure delegations within which the CEO must operate.
• the internal control environment;
Director development
• internal audit and assurance;
A sector-specific induction programme is conducted for all new directors
• external audit; and
by the Crown Company Monitoring Advisory Unit (CCMAU).
• financial
reporting.
A formal induction into all aspects of the NIWA Group is provided
by the Chair and management representatives.
Our Audit and Legislative Compliance Committee is enhanced
by regular scheduled meetings, with prearranged dates and written
All directors are responsible for keeping up to date their knowledge
agendas, papers, and minutes which incorporate an action list.
of the legal and professional duties of Board members.
Ongoing professional development is agreed between the directors
A Remuneration Committee that promotes transparency,
and the Chair as part of the annual review process.
fairness, and reasonableness
The Remuneration Committee is a sub-committee of the Board
Directors’ insurance
and comprised two members, the NIWA Chair and a NIWA Director.
The NIWA Group has arranged policies for directors’ liability insurance
The Remuneration Committee reviews the remuneration policies
which, with a deed of indemnity, ensures that generally directors
applicable to the Chief Executive Officer on an annual basis
will incur no monetary loss as a result of lawful actions undertaken
and makes recommendations on remuneration packages
by them as directors. Certain actions are specifically excluded;
and terms of employment to the Board. The Remuneration Committee
for example, incurring penalties and fines which may be imposed
also ratifies the remuneration packages of the direct reports to the Chief
in respect of breaches of the law.
Executive Officer.
Remuneration packages are reviewed with due regard to performance
and other relevant factors.
Directors’ remuneration is annually reviewed and approved by the
Shareholding Ministers. Remuneration is set at levels that are fair
and reasonable in a competitive market for the skills, knowledge,
and experience required by the NIWA Group.
28 |
NIWA ANNUAL REPORT 2009
Primarily the annual review is a tool to help boards to analyse their
The numbers of employees (not including directors) whose
performance and identify any areas where performance could be
total remuneration exceeded $100,000 is:
improved. The review assists to provide input into the Chair’s succession
planning and identification of director training needs.
Group
2009
2008
$
Boards are additionally reviewed as a whole through a set of performance
measures on an on-going basis.
100,000–109,999
36
51
Directors’ remuneration received or due and receivable
110,000–119,999
17
30
during the year is:
120,000–129,999
12
11
130,000–139,999
6
6
Parent
2009
2008
140,000–149,999
3
9
$’000
$’000
150,000–159,999
3
1
160,000–169,999
2
4
Directors of the National Institute of Water
& Atmospheric Research Ltd
170,000–179,999
3
5
Sue Suckling (Chair) (resigned 30 June 2009)
72
72
180,000–189,999
4
–
Craig Ellison (Deputy Chairman)
45
41
210,000 –219,999
1
–
Graham Hill (resigned 30 June 2009)
36
36
220,000 –229,999
1
2
Ed Johnson
36
36
250,000 –259,999
–
1
Wendy Lawson
36
36
260,000 –269,999
1
–
Dennis Cairns (appointed 1 July 2008)
36
–
270,000 –279,999
1
1
Helen Robinson (appointed 1 July 2008)
36
–
420,000–429,999*
–
1
Troy Newton (resigned 30 June 2008)
–
36
550,000-559,999*
1
–
John Spencer (resigned 31 October 2007)
–
12
* Chief Executive Officer’s remuneration band (2009 includes an at risk component).
John Hercus (resigned 30 June 2008)
–
36
A sound internal control framework
No fees were paid in respect of directors of the subsidiaries NIWA Vessel
An internal control framework is essential to ensure that there are
Management Ltd, NIWA Environmental Research Institute, NIWA Australia
controls in place to mitigate significant business risk. The internal control
Pty Ltd, NIWA Natural Solutions Ltd, EcoConnect Ltd, and Unidata Pty Ltd,
framework is embedded across the NIWA Group and is clearly understood
other than those shown above.
and reinforced by management through the documented policies and
procedures which are regularly reviewed.
Remuneration of employees
The framework is effective in ensuring:
NIWA aims to provide a skills influenced remuneration system that
rewards people appropriately, recognising contribution to the business
• compliance with laws and regulations;
and individual performance.
• that all transactions are properly accounted for to allow
the preparation of the financial statements; and
Our remuneration system supports our business plan and values:
• that assets are safeguarded against improper
• we have the right people;
or unauthorised use.
• we produce high quality science; and
• we challenge and reward staff.
Our remuneration system will continue to be upgraded and reviewed
as required to meet the NIWA Group’s and employees’ needs.
Remuneration packages for all employees are reviewed with due regard
to performance and other relevant factors.
NIWA ANNUAL REPORT 2009 | 29
CORPORATE GOVERNANCE STATEMENT
A relevant code of conduct to promote our responsible
Effective management of risk
ethical behaviour
Risk averse governance is not good governance. Effective risk
The reputation and standing of the NIWA Group is determined
management is the key to success. Each director requires
to a large degree by public perception of the conduct of its staff
a clear understanding of the current and potential risks the NIWA
(including the Board and management). We promote the highest
Group may be exposed to, especially in the ever-changing
standards of integrity, discretion, and ethical conduct.
economic environment.
The NIWA Group encourages staff to:
Risk management has been incorporated into the normal business
processes of the NIWA Group, with practices such as business planning
• perform to the best of their ability, and be committed to a high
and budgeting, operational management, and project management.
quality of work performed in a safe manner;
Appropriate processes are regularly verified by the Board to identify
• take the initiative and be creative in resolving problems, seeking
and manage potential and relevant risks.
improved productivity, and responding to opportunities within areas
The Board reviews the delegations authority framework which sets
of responsibility;
authorities for operational and expenditure delegations, including
• make decisions and be responsible for those decisions and the
authority for undertaking treasury activities of the NIWA Group.
actions that flow from them;
Regardless of the terms of the delegated authority, ultimate
• be supportive of their work teams; and
responsibility rests with the Board.
• treat staff and equipment with care and respect;
The Audit and Legislative Compliance Committee receives reports
on internal audit and risk management reviews. The committee
It is expected that managers will guide staff in accordance with
also meets with the external auditors to discuss findings
management’s philosophy, policies, and standards.
and management comments from the annual audit.
In making decisions about conflicts of interest, management are
guided by the concepts of integrity, honesty, transparency, openness,
Independent, effective external auditors
independence, and good faith. Situations may not be clear-cut,
The appointment of auditors to conduct statutory work, and the annual
and judgement is exercised when necessary on a case by case basis.
audit fees, are approved annually by the Auditor-General.
Both employees and directors must disclose any financial, professional,
The Board and the auditors are jointly responsible for ensuring that
or personal interests (direct or indirect) that may create a conflict with
the audit is conducted with independence, integrity, and objectivity.
the Group’s interests. We expect both our employees and directors
to be open and honest with disclosures.
Rotation of audit partners promotes independence and objectivity.
Audit partners are rotated every six years; the 2007–08 and 2008–09
Clear, enforced policies and procedure
years had an audit partner rotation.
The effectiveness of the NIWA Group’s governance system relies
To ensure the independence of the external auditors, NIWA does not
on the defined “rules” in which the NIWA Group operates.
consult the external auditor for tax or management related services
A comprehensive set of policies and procedures is located on our
and takes care not to make use of the external auditors for any work
intranet to which all employees have access. It is important that these
which they may need to evaluate as part of the external audit.
are documented, accessible, understood, and enforced as they create
the foundation of right and wrong in our business processes
and activities. The policies and procedures are reviewed on a regular
basis to ensure new developments and processes are reflected.
30 |
NIWA ANNUAL REPORT 2009
Transparent disclosure and effective communication
Governance achievements
with the public, our shareholders, and our stakeholders
Our employees are the core ingredient of NIWA’s success.
Effective communication underpins the trust relationship among
Interactions between staff and the Board are valuable in assisting
the shareholders, the Board, management, and stakeholders.
the Board to remain up-to-date with our science, people and activities.
Increased visibility has resulted from holding Board meetings
As expressed in the owner’s expectations manual, all Crown entities
and luncheons at NIWA’s various locations.
should engage with stakeholders to assist with the government’s
industrial, environmental, and social development objectives,
As part of continuous improvement, and to meet the demands
particularly for science and innovation to raise productivity
of remaining competitive, we have begun to implement a more
and add value. To achieve this we build on existing knowledge,
rigorous procurement function. During 2008–09 a procurement
develop new knowledge, and transfer this knowledge for the benefit
and asset manager was employed to lead this activity.
of New Zealand.
Contained within the non-financial performance measures section
are details on how the NIWA Group transfers our knowledge
to the public, end-users, and our peers. Examples of this transfer
of knowledge include the access of information on our free databases,
presentations of work from scientists to users and peers, reports
to users, and sponsorships of various science fairs.
Our direct customers are those who fund our research and applied
science services. The government is our largest customer, but we also
conduct research for, and provide advice and information to, many
others, ranging from international conglomerates to local commercial
fishers and schools.
Most of our research and applied science is aimed at addressing issues
which are relevant to the general public – the sustainability of our
society and civilisation.
Each year an operating framework is issued to Crown Research
Institutes and is the cornerstone document in which Shareholding
Ministers communicate their yearly expectations.
From the operating framework, the Board develops a Statement
of Corporate Intent (SCI) which Shareholding Ministers need to approve
before it is tabled in Parliament and becomes a public document.
Shareholding Ministers are then accountable to Parliament for the
performance against the SCI.
The NIWA Group reports annually to Parliament on its performance
in its annual report. A half-yearly report and quarterly progress reports
are also prepared for Shareholding Ministers and performance
is measured against the objectives in the SCI. This continuous
disclosure is a major contributor to the high standard of information
provided to our shareholders.
NIWA ANNUAL REPORT 2009 | 31
National Institute of Water & Atmospheric Research Ltd and Group
STATEMENT OF COMPREHENSIVE INCOME
for the year ended 30 June 2009
in thousands of New Zealand dollars
Notes
Group
Group
Group
Parent
Parent
2009
2009
2008
2009
2008
Actual
Budget
Actual
Actual
Actual
Revenues and other gains
4
Public good science and technology
Contract funding
48,349
47,894
45,453
48,349
45,453
Capability Fund
10,534
10,534
10,083
10,534
10,083
Ministry of Fisheries
14,121
17,207
15,127
14,121
15,127
Commercial
46,944
50,074
49,284
39,976
39,289
Share of associate’s net gain/(deficit)
–
(91)
38
–
–
Dividends from subsidiaries
–
–
–
–
2,500
Total income
119,948
125,618
119,985
112,980
112,452
Operating expenses
5
Employee benefits expense
(57,345)
(59,820)
(55,090)
(52,144)
(49,889)
Other expenses
(41,989)
(43,633)
(41,086)
(44,864)
(43,230)
(99,334)
(103,453)
(96,176)
(97,008)
(93,119)
Profit/(loss) before interest, income tax, depreciation,
and amortisation
20,614
22,165
23,809
15,972
19,333
Depreciation and impairment
15
(11,555)
(11,315)
(9,714)
(9,985)
(8,498)
Amortisation
(464)
(299)
(448)
(417)
(311)
Profit/(loss) before interest and income tax
8,595
10,551
13,647
5,570
10,524
Interest income
490
–
685
481
679
Finance expense
(35)
(22)
(23)
(11)
–
Net interest and other financing income
6
455
(22)
662
470
679
Profit/(loss) before income tax
9,050
10,529
14,309
6,040
11,203
Income tax credit/(expense)
7
(3,039)
(2,859)
(4,214)
(1,921)
(2,776)
Profit/(loss) for the period
6,011
7,670
10,095
4,119
8,427
Other comprehensive income
Foreign currency translation differences for foreign
23
–
26
–
–
operations
Total comprehensive income for the period
6,034
7,670
10,121
4,119
8,427
Profit/(loss) attributable to:
Parent interest
5,993
7,612
10,035
4,119
8,427
Minority interest
18
58
60
–
–
Profit for the period
6,011
7,670
10,095
4,119
8,427
Total comprehensive income attributable to:
Parent interest
6,016
7,612
10,061
4,119
8,427
Minority interest
18
58
60
–
–
Total comprehensive income for the period
6,034
7,670
10,121
4,119
8,427
The accompanying ‘Notes to the financial statements’ are an integral part of, and should be read in conjunction with, these financial statements.
32 |
NIWA ANNUAL REPORT 2009
National Institute of Water & Atmospheric Research Ltd and Group
STATEMENT OF CHANGES IN EQUITY
for the year ended 30 June 2009
Group
Notes
Share
Retained
Minority
Foreign currency
Total
in thousands of New Zealand dollars
capital
earnings
interest
translation reserve
equity
Balance at 1 July 2007
24,799
49,551
(11)
–
74,339
Profit for the year
–
10,035
60
–
10,095
Translation of foreign operations
–
–
–
26
26
Total comprehensive income
–
10,035
60
26
10,121
Dividends to equity holders
9
–
(187)
–
–
(187)
Balance at 30 June 2008
24,799
59,399
49
26
84,273
Balance at 1 July 2008
24,799
59,399
49
26
84,273
Profit for the year
–
5,993
18
–
6,011
Translation of foreign operations
–
–
–
23
23
Total comprehensive income
–
5,993
18
23
6,034
Dividends to equity holders
9
–
(5,649)
–
–
(5,649)
Balance at 30 June 2009
24,799
59,743
67
49
84,658
Parent
Notes
Share
Retained
Total
in thousands of New Zealand dollars
capital
earnings
equity
Balance at 1 July 2007
24,799
42,885
67,684
Profit for the year
–
8,427
8,427
Total comprehensive income
–
8,427
8,427
Dividends to equity holders
9
–
(187)
(187)
Balance at 30 June 2008
24,799
51,125
75,924
Balance at 1 July 2008
24,799
51,125
75,924
Profit for the year
–
4,119
4,119
Total comprehensive income
–
4,119
4,119
Dividends to equity holders
9
–
(5,649)
(5,649)
Balance at 30 June 2009
24,799
49,595
74,394
The accompanying ‘Notes to the financial statements’ are an integral part of, and should be read in conjunction with, these financial statements.
NIWA ANNUAL REPORT 2009 | 33
National Institute of Water & Atmospheric Research Ltd and Group
STATEMENT OF FINANCIAL POSITION
as at 30 June 2009
in thousands of New Zealand dollars
Note
Group
Group
Group
Parent
Parent
2009
2009
2008
2009
2008
Actual
Budget
Actual
Actual
Actual
Equity
Share capital
8
24,799
24,799
24,799
24,799
24,799
Equity reserves
59,792
65,960
59,425
49,595
51,125
Shareholders’ interest
84,591
90,759
84,224
74,394
75,924
Minority interest
67
25
49
–
–
Total equity
84,658
90,784
84,273
74,394
75,924
Non-current liabilities
Unsecured loans
10
260
231
241
–
–
Employee entitlements
11
726
811
812
638
725
Deferred tax liability
12
3,542
4,133
3,476
2,223
2,105
Intercompany
22
–
–
–
8,875
10,884
Total non-current liabilities
4,528
5,175
4,529
11,736
13,714
Current liabilities
Payables and accruals
13
10,580
8,225
10,221
9,113
9,531
Revenue in advance
13
7,094
7,906
7,063
7,086
7,094
Short-term advance facility
14
650
–
–
650
–
Employee entitlements
11
7,915
8,312
7,607
7,233
7,118
Taxation payable
–
–
–
–
–
Total current liabilities
26,239
24,443
24,891
24,082
23,743
Total equity and liabilities
115,425
120,402
113,693
110,212
113,381
Non-current assets
Property, plant, & equipment
15
84,287
85,917
75,038
68,631
64,101
Identifiable intangibles
17
37
40
87
–
–
Investments
21
–
–
–
12,709
12,709
Receivables 18
314
–
335
314
335
Total non-current assets
84,638
85,957
75,460
81,654
77,145
Current assets
Cash and cash equivalents
3,099
7,722
9,303
2,094
9,060
Receivables 18
18,472
18,996
19,704
18,190
18,814
Prepayments
1,380
600
1,011
1,360
987
Taxation receivable
886
27
1,144
1,033
1,638
Uninvoiced receivables
26
4,686
4,901
4,471
4,686
4,466
Assets held for sale
15
–
–
107
–
107
Inventory
19
2,264
2,199
2,493
1,195
1,164
Total current assets
30,787
34,445
38,233
28,558
36,236
Total assets
115,425
120,402
113,693
110,212
113,381
For and on behalf of the Board:
Christopher
Mace
Craig
Ellison
Chair
Director
28 August 2009
The accompanying ‘Notes to the financial statements’ are an integral part of, and should be read in conjunction with, these financial statements.
34 |
NIWA ANNUAL REPORT 2009
National Institute of Water & Atmospheric Research Ltd and Group
CASH FLOW STATEMENT
for the year ended 30 June 2009
in thousands of New Zealand dollars
Note
Group
Group
Group
Parent
Parent
2009
2009
2008
2009
2008
Actual
Budget
Actual
Actual
Actual
Cash flows from operating activities
Cash was provided from:
Receipts from customers
120,820
124,665
119,976
113,201
110,302
Dividends received
5
–
2
5
2,502
Interest received
490
–
686
481
679
Cash was disbursed to:
Payments to employees and suppliers
(99,035)
(102,375)
(97,208)
(97,953)
(93,746)
Interest paid
(35)
(22)
(23)
(10)
–
Taxation paid
(2,714)
(3,177)
(4,731)
(1,198)
(3,244)
Net cash inflow from operating activities
20
19,531
19,091
18,702
14,526
16,493
Cash flows from investing activities
Cash was provided from:
Sale of property, plant, & equipment
301
–
95
298
95
Cash was applied to:
Purchase of property, plant, & equipment
15
(20,770)
(19,324)
(13,527)
(14,515)
(12,455)
Purchase of intangible assets
17
(417)
(400)
(458)
(417)
(311)
Sale of associate
–
500
500
–
500
Net cash (outflow) in investing activities
(20,886)
(19,224)
(13,390)
(14,634)
(12,171)
Cash flows from financing activities
Cash was applied to:
Dividends paid to shareholders
9
(5,649)
(860)
(187)
(5,649)
(187)
Short-term advance facility (repaid)
14
650
–
–
650
–
Subsidiary loan proceeds
–
22
–
15,308
21,129
Subsidiary loan (repaid)
–
–
–
(17,317)
(19,832)
Net cash inflow (outflow) from financing activities
(4,999)
(838)
(187)
(7,008)
1,110
Net increase/(decrease) in cash and cash equivalents
(6,354)
(971)
5,125
(7,116)
5,432
Effects of exchange rate changes on the balance of
150
–
40
150
9
cash held in foreign currency
Opening balance of cash and cash equivalents
9,303
8,693
4,138
9,060
3,619
Closing cash and cash equivalents balance
3,099
7,722
9,303
2,094
9,060
Made up of:
Cash
3,099
7,722
4,303
2,094
4,060
Short-term deposits
–
–
5,000
–
5,000
Closing cash and cash equivalents balance
3,099
7,722
9,303
2,094
9,060
The accompanying ‘Notes to the financial statements’ are an integral part of, and should be read in conjunction with, these financial statements.
NIWA ANNUAL REPORT 2009 | 35
National Institute of Water & Atmospheric Research Ltd and Group
NOTES TO THE FINANCIAL STATEMENTS
as at 30 June 2009
1. Reporting entity
•
Operating segments (NZ IFRS 8 effective for accounting periods beginning
on or after 1 January 2009)
The National Institute of Water & Atmospheric Research Ltd (NIWA) and Group
•
Hedges of a net investment in a foreign operation (NZ IFRIC 16 effective
is a profit-oriented company registered in New Zealand under the Companies
for accounting periods beginning on or after 1 October 2008)
Act 1993.
•
Borrowing costs (NZ IAS 23 effective for accounting periods beginning
The consolidated (or ‘Group’) financial statements comprise NIWA (the ‘parent
on or after 1 January 2009)
company’), its subsidiaries, and the Group’s interest in associates and joint
ventures. The financial statements for NIWA and the Group are presented in
•
Consolidated and separate financial statements (NZ IAS 27 revised)
accordance with the requirements of the Crown Research Institutes Act 1992,
•
Amendments to financial instruments: presentation (NZ IAS 32 effective
the Crown Entities Act 2004, the Public Finance Act 1989, the Companies Act 1993,
for accounting periods beginning on or after 1 January 2009)
and the Financial Reporting Act 1993. The NIWA financial statements are for the
•
Amendments to financial instruments: recognition and measurement
parent company as a separate entity.
(NZ IAS 39)
2. Nature of activities
Application of the following standards and interpretations, which are effective
from 1 July 2009 unless otherwise stated, will not have any impact on the financial
The NIWA Group conducts research in water and atmospheric sciences in
report of the company because they are not relevant to the company’s current
New Zealand and internationally.
activities:
3. Statement of accounting policies
•
Share based payments (NZ IFRS 2 effective for accounting periods beginning
on or after 1 January 2009)
•
Business combinations (NZ IFRS 3)
Statement of compliance
•
Insurance contracts (NZ IRRS 4 effective for accounting periods beginning
The financial statements have been prepared in accordance with New Zealand
on or after 1 January 2009)
generally accepted accounting practice (NZ GAAP). They comply with the
New Zealand equivalents to international financial reporting standards
•
Agreements for the construction of real estate (NZ IFRIC 15 effective
(NZ IFRS) and other applicable financial reporting standards appropriate for
for accounting periods beginning on or after 1 January 2009)
profit-oriented entities.
•
Distribution of non-cash assets to owners (NZ IFRIC 17)
The financial statements comply with international financial reporting standards
•
Transfer of assets from customers (NZ IFRIC 18)
(IFRS). The financial statements were authorised for issue by the directors on
28 August 2009.
Critical accounting estimates and judgements
The preparation of financial statements requires the use of certain critical
Basis of preparation
accounting estimates and assumptions concerning the future. It also requires
The measurement basis adopted in the preparation of these financial statements
the company to exercise its judgement in the process of applying the Group’s
is historical cost, except for financial instruments as identified in specific
accounting policies.
accounting policies below. Cost is based on the fair value of consideration given
Estimates and underlying assumptions are reviewed on an ongoing basis.
in exchange for assets.
Revisions to accounting estimates are recognised in the period in which the
The presentation and functional currency used in the preparation of these financial
estimate is revised and in any future periods affected.
statements is New Zealand dollars.
In particular, information about significant areas of estimation uncertainty
Accounting polices are selected and applied in a manner to ensure that the
and critical judgements in applying accounting policies that have a significant
resulting financial information meets the concepts of relevance and reliability,
risk of causing a material adjustment within the next year or that have the most
ensuring that the substance of the underlying transaction or event is reported.
significant effect on the amounts recognised in the financial statements
The accounting policies have been applied in preparing the financial statements
is included in the following notes:
for the year ended 30 June 2009 and the comparative information for the year
•
Note 11
Provision for employee entitlements
ended 30 June 2008.
•
Note 13
Valuation of revenue in advance
Adoption of new and revised standards
•
Policy (k)
The estimated useful economic lives of assets
Standards issued and adopted early
Significant accounting policies
NZ IAS 1 (Revised) Presentation of Financial Statements (effective for accounting
The following significant accounting policies have been adopted in the preparation
periods beginning on or after 1 January 2009);
and presentation of the financial reports and have been applied consistently to all
periods, unless otherwise stated.
The impact of the changes to NZ IAS 1 has been to change the disclosures
provided in these financial statements regarding the Group’s recognised income
(a) Basis of consolidation
and expenses. The revised NZ IAS 1 requires the presentation of all recognised
income and expenses in one statement (a statement of comprehensive income)
i) Consolidation of subsidiaries
or in two statements (an income statement and a statement of comprehensive
income), separately from owner changes in equity. The revised standard also
Subsidiaries are those entities controlled by NIWA. The Group’s financial
includes other minor changes to presentation and disclosure requirements
statements have been prepared using the purchase method of consolidation.
This involves adding corresponding assets, liabilities, revenues, and expenses
Standards and interpretations in issue not yet adopted
on a line-by-line basis. All intercompany transactions, balances, and unrealised
profits are eliminated on consolidation. The results of any subsidiaries that
The following new standards and interpretations had been issued at reporting date
become or cease to be part of the Group during the year are consolidated from
but are not yet effective.
the date that control commenced
Application of the following standards, which are effective from 1 July 2009 unless
or until the date that control ceased.
otherwise stated, will require additional disclosure or will have no material impact
The interest of minority shareholders is stated at the minority’s proportion of
on the financial statements in the period of initial application:
the fair values of the identifiable assets and liabilities recognised on acquisition
•
Improvements to New Zealand Equivalents to International Financial
together with the minority interest’s share of post acquisition surpluses. Losses
Reporting Standards (effective for accounting periods beginning on or after
applicable to the minority in excess of the minority’s interest in the subsidiary’s
1 July 2009 and 1 January 2010)
equity are allocated against the interests of the Group except to the extent that
•
Omnibus amendments (2009-1)
the minority has a binding obligation and is able to make an additional investment
to cover the losses.
•
Omnibus amendments (2008 effective for accounting periods beginning
on or after 1 January 2009)
Investments in subsidiaries are recorded at cost in the parent
financial statements.
•
First time adoption of NZ IFRS (NZ IFRS1 restructured)
•
Improving disclosures about financial instruments (amendments to NZ IFRS 7
Financial Instruments: disclosure, effective for accounting periods beginning
on or after 1 January 2009)
36 |
NIWA ANNUAL REPORT 2009
ii) Accounting for associates
(c) Government
grants
An associate is an investee, not being a subsidiary or joint venture arrangement,
Government grants are assistance by the government in the form of transfers
over which the Group has the capacity to exercise significant influence, but not
of resources to the group in return for past or future compliance with certain
control, through participation in the financial and operating policy decisions
conditions relating to the operating activities of the group. The primary condition
of the investee.
is that the Group should undertake research activities as defined under the
The Group financial statements incorporate the Group’s interest in associates,
contractual agreements which award the funding.
using the equity method, as from the date that significant influence commenced
Government grants relating to this funding are recognised as income in the
until the date the significant influence ceased. The investments are recorded at
statement of comprehensive income on a systematic basis in the equivalent period
the lower of carrying value and recoverable amount.
in which the expense is recognised.
The Group recognises its share of the associates’ net surplus or deficit for the year
There were no government grants received during the year (2008: Nil).
in its statement of comprehensive income. The Group recognises its share of other
post-acquisition movements in reserves in its statement of changes in equity.
(d) Goods and services tax (GST)
Dividends received from associates are recognised directly against the carrying
These financial statements are prepared on a GST-exclusive basis, except for
value of the investment. In the statement of financial position the investment and
receivables and payables, which are stated GST inclusive.
the reserves are increased by the Group’s share of the post-acquisition retained
surplus and other post-acquisition reserves of the associates less any impairment.
(e) Employee
benefits
In assessing the Group’s share of earnings of associates, the Group’s share
Liabilities for wages and salaries, including non-monetary benefits and annual
of any unrealised profits between group companies and associates is eliminated.
leave, long service leave, retirement leave and training leave are recognised
iii) Accounting for joint ventures
when it is probable that settlement will be required and they are capable of being
measured reliably. Provisions, in respect of employee benefits, are measured at
Joint ventures are joint arrangements between NIWA and another party in which
their nominal values using the remuneration rate expected to apply at settlement.
there is a contractual agreement to undertake a specific business project in
Employee benefits are separated into current and non-current liabilities. Current
which the venturers share joint and several liabilities in respect of the costs and
liabilities are those benefits that are expected to be settled within 12 months of
liabilities of the project and share in any resulting output. NIWA’s share of the
balance date.
assets, liabilities, revenues, and expenses of the joint ventures is incorporated into
the parent company and Group financial statements on a line-by-line basis using
Provisions made in respect of employee benefits which are not expected to be
the proportionate consolidation method.
settled within 12 months are measured at the present value of the estimated
future cash outflows to be made by the Group in respect of services provided by
iv) Accounting for goodwill
employees up to the reporting date.
Goodwill arising on the acquisition of a subsidiary or a jointly controlled entity
(f) Impairment of tangible and intangible assets (excluding goodwill)
represents the excess of the cost of acquisition over the Group’s interest in the
net fair value of the identifiable assets, liabilities and contingent liabilities of the
Intangible assets that have an indefinite life are not subject to amortisation and
subsidiary or jointly controlled entity recognised at the date of acquisition.
are tested annually for impairment. Other assets that are subject to amortisation
Goodwill is initially recognised as an asset at cost and is subsequently measured
are reviewed for impairment whenever events or changes in circumstances
at cost less any accumulated impairment losses. For the purpose of impairment
indicate that the carrying amount may not be recoverable. If such an indication
testing, goodwill is allocated to each of the Group’s cash-generating units
exists, the recoverable amount of the asset is estimated in order to determine the
expected to benefit from the synergies of the combination. Cash-generating
extent of the impairment loss. The recoverable amount is the higher of fair value
units to which goodwill has been allocated are tested for impairment annually,
less cost to sell and value in use.
or more frequently when there is an indication that the unit may be impaired.
If the recoverable amount of the asset is estimated to be less than its carrying
The recoverable amount is the higher of fair value less cost to sell and value
value, the carrying value is reduced to its recoverable amount. An impairment loss
in use. If the recoverable amount of the cash-generating unit is less than the
is recognised to the profit or loss.
carrying amount of the unit, the impairment loss is allocated first to reduce
Where an impairment loss subsequently reverses, the carrying amount of the
the carrying amount of any goodwill allocated to the unit and then to the other
asset is increased to the revised recoverable amount, but only to the extent that
assets of the unit pro-rata on the basis of the carrying amount of each asset
the increased carrying value does not exceed the carrying amount that would
in the unit. An impairment loss recognised for goodwill is not reversed
have been recognised if the asset had no impairment loss recognised in the past.
in a subsequent period.
This reversal is recognised to profit or loss.
On disposal of a subsidiary or a jointly controlled entity, the attributable amount
of goodwill is included in the determination of the profit or loss on disposal
(g) Income tax
The income tax expense for the period is the tax payable on the current period’s
(b) Revenue recognition
taxable income, based on the income tax rate for each jurisdiction. This is then
adjusted by changes in deferred tax assets and liabilities attributable to temporary
Rendering of services
differences between the tax bases of assets and liabilities and their carrying
Revenue from services rendered is recognised in the statement of comprehensive
amounts in the financial statements, and changes in unused tax losses.
income in proportion to the stage of completion of the transaction at reporting
Deferred tax is accounted for using the balance sheet liability method in respect of
date. The amount of revenue unbilled is represented by ‘uninvoiced receivables’,
temporary differences arising from the carrying amount of assets and liabilities in
which is stated at the proportion to the stage of completion in the statement
the financial statements and the corresponding tax base of those items. Deferred
of financial position. Revenue received but not earned is recognised as revenue
tax liabilities are generally recognised for all taxable temporary differences.
in advance on the face of the statement of financial position.
Deferred tax assets are generally recognised for all deductible temporary
Goods sold
differences to the extent that it is probable that sufficient taxable amount will be
available against which those deductible temporary differences can be utilised.
Revenue from the sale of goods is measured at the fair value of the consideration
Deferred tax liabilities are recognised for the taxable temporary differences
received or receivable, net of returns and allowances. Revenue is recognised
arising on investment in subsidiaries, associates and joint ventures, except where
when the significant risks and rewards of ownership have been transferred to the
the consolidated entity is able to control the reversal of the temporary differences
buyer, recovery of the consideration is probable, the associated costs and possible
and it is probable that the temporary difference will not reverse in the foreseeable
return of goods can be estimated reliably, and there is no continuing management
future. Deferred tax assets arising from deductible temporary difference from
involvement with the goods.
these investments are only recognised to the extent that it is probable there will
Transfers of risks and rewards vary depending on the individual terms of
be sufficient taxable profits against which to utilise the asset and they are
the contract sale. For sales of instruments, transfer occurs upon receipt by
expected to reverse in the foreseeable future.
the customer.
Such assets and liabilities are not recognised if the temporary difference arises
Dividend revenue
from the initial recognition (other than in a business combination) of other assets
and liabilities in a transaction that affects neither the taxable profit nor the
Dividend revenue from investments is recognised when the shareholder’s right
accounting profit.
to receive payment has been established.
Deferred tax assets and liabilities are measured at the tax rates that 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 been enacted or substantively enacted
at balance date.
NIWA ANNUAL REPORT 2009 | 37
National Institute of Water & Atmospheric Research Ltd and Group
NOTES TO THE FINANCIAL STATEMENTS
as at 30 June 2009
Current and deferred tax is recognised as an expense or income in the statement
(l) Receivables
of comprehensive income, except when it relates to items credited or debited
Receivables are categorised as loans and receivables.
direct to equity, in which case the deferred or current tax is recognised directly
to equity. The carrying amount of deferred tax assets is reviewed at each balance
Loans and receivables are stated at amortised cost using the effective interest
date and reduced to the extent that it is no longer probable that sufficient taxable
rate, less any impairment.
profits will be available to allow all or part of the asset to be recovered.
Collectability of receivables is reviewed on an ongoing basis. Debts which are
known to be uncollectable are written off against the provision, once approved
(h) Purchased intangible assets
by the Board of Directors. A provision for doubtful debts is established when there
Purchased identifiable intangible assets, comprising copyrights, and software,
is objective evidence that the Group will not be able to collect all amounts due
are recorded at cost less amortisation and impairment. Amortisation is charged
according to the original terms of receivables. Changes in the carrying amount
on a straight-line basis over their estimated useful lives. The estimated useful life
of the provision are recognised in the statement of comprehensive income.
and amortisation method are reviewed each balance date.
(m) Inventory
The estimated useful life for the copyrights is 5 years.
Inventory is stated at the lower of cost and net realisable value. Cost is calculated
The estimated useful life for software is 1 year.
on the weighted average basis for consumables and first in first out (FIFO) for
(i) Development costs
finished goods and work in progress.
Intangible assets which arise from development costs that meet the following
(n) Foreign currencies
criteria are recognised as an asset in the statement of financial position:
•
the product or process is clearly defined and the costs attributable
i) Transactions
to the product or process can be identified separately and measured reliably;
Transactions in foreign currencies are converted to the functional currency of
•
the ability to use or sell the product or process;
New Zealand dollars, by applying the spot exchange rate between the functional
currency and the foreign currency at the date of transaction. Monetary assets and
•
the Group intends to produce and market, or use, the product or process;
liabilities are translated to New Zealand dollars using the closing rate of exchange
•
the existence of a market for the product or process or its usefulness
at balance date, and any exchange gains or losses are taken to the statement of
to the Group, if it is to be used internally, can be demonstrated;
comprehensive income.
•
adequate resources exist, or their availability can be demonstrated,
ii) Translation of foreign operations
to complete the projects and market or use the product or process.
On consolidation, revenues and expenses of foreign operations are translated
Capitalisation is limited to the amount which, taken together with any further
to New Zealand dollars at the average exchange rates for the period. Assets and
related costs, is likely to be recovered from related future economic benefits.
liabilities are converted to New Zealand dollars at the rates of exchange ruling
Excess is recognised as an expense.
at balance date. Exchange rate differences arising from the translation of the
Development costs recognised as an asset are amortised in the statement of
foreign operations are recognised in the foreign currency exchange reserve.
comprehensive income on a straight-line basis over the period of expected benefits.
Goodwill and fair value adjustment arising on the acquisition of a foreign operation
When the unamortised balance of development costs exceeds the recoverable
are treated as assets and liabilities of the foreign operations and translated at the
amount, the excess is written down and recognised immediately as an expense.
exchange rate ruling at balance date.
All other development and research costs are expensed as incurred.
(o) Leases
Subsequent to initial recognition, internally generated intangible assets are
Leases are classified as finance leases whenever the terms of the lease transfer
reported at cost, less accumulated amortisation and accumulated impairment
substantially of all of the risks and rewards of ownership to the lessee. All other
losses, on the same basis as purchase identifiable intangible assets.
leases are classified as operating leases.
The estimated useful life is between 1 and 5 years.
The Group has not contracted for any leases which would be classified as
There were no development costs during the year.
finance leases.
(j) Property, plant, and equipment
Operating lease payments are recognised on a systematic basis that is
representative of the benefit to the Group (straight line).
Property, plant, and equipment are stated at deemed cost less accumulated
depreciation to date less any impairment losses.
(p) Statement of cash flows
Expenditure incurred on property, plant, and equipment is capitalised where such
The statement of cash flows is prepared exclusive of GST, which is consistent with
expenditure will increase or enhance the future economic benefits provided by
the method used in the statement of comprehensive income. Operating activities
the assets’ existing service potential. Expenditure incurred to maintain future
comprise the provision of research services, consultancy, and manufacture of
economic benefits is classified as repairs and maintenance.
scientific instruments and other activities that are not investing or financing
activities. Investing activities comprise the purchase and disposal of property,
(k) Depreciation
plant, and equipment, and advances to subsidiaries. Financing activities are those
Property, plant, and equipment, except for freehold land and work in progress,
which result in changes in the size and composition of the capital structure of the
are depreciated on a straight-line basis at rates estimated to write off the cost
Group.
of the property, plant and equipment over their estimated useful lives, which are
Cash and cash equivalents comprise cash on hand, cash in banks and investments
as follows:
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
Realised gains and losses arising from effective hedges of net interest and other
Leasehold improvements, rented property
5–12 years
financing costs are recognised in the same line as related hedged item.
Interest revenue is accrued on a time basis, by reference to the principal
Vessels
outstanding and at the effective interest rate applicable, which is the rate that
RV Tangaroa hull
26 years
exactly discounts estimated future cash receipts through the expected life of the
RV Kaharoa hull
16 years
financial asset to that asset’s net carrying amount.
Plant & equipment
Plant & equipment
10 years
(r) Financial
instruments
Scientific equipment
4 years
Derivative financial instruments
Electronic data processing equipment
The Group may use derivative financial instruments to hedge its exposure to
Supercomputer 5
years
foreign exchange and interest rate risks arising from operational, financing,
Electronic data processing equipment
3 years
and investing activities.
Office equipment
5 years
Furniture & fittings
10 years
Motor vehicles
4 years
Small boats
5 years
38 |
NIWA ANNUAL REPORT 2009
Derivative financial instruments such as forward exchange contracts are
4) Loans and receivables
categorised as held for trading (unless they qualify for hedge accounting),
Loans and receivables have fixed or determinable payments and are not quoted
and are initially recognised in the statement of financial position at fair value
in an active market. They arise when the Group provides money, goods or services
and transaction costs are expensed immediately. Subsequent to initial
directly to a debtor with no intention of selling the receivable. They are included
recognition, derivative financial instruments are stated at fair value.
in current assets, except for those with maturities greater than 12 months after
The gain or loss on re-measurement to fair value is recognised immediately
the statement of financial position which are classified as a non-current asset.
in the statement of comprehensive income. However, where derivatives qualify
These are subsequently recorded at amortised cost less impairment.
for hedge accounting, recognition of any resultant gain or loss depends on the
nature of the hedging relationship:
A financial asset is classified as held for trading if:
1) Cash flow hedges
•
it has been incurred principally for the purpose of repurchasing in the near
future; or
Changes in the fair value of the derivative hedging instrument designated as a
cash flow hedge are recognised directly in equity to the extent that the hedge is
•
it is a derivative that is not designated and effective as a hedge instrument; or
effective. If the hedge is ineffective, changes in the fair value are recognised in
•
it is part of an identified portfolio of financial instruments that the Group
the statement of comprehensive income. The effective portion of changes in the
manages together and has a recent actual pattern of short-term profit-
fair value of derivatives that are designated and qualify as cash flow hedges are
making.
deferred in equity. The gain or loss relating to the ineffective portion is recognised
A financial asset other than a financial asset held for trading may be designated
immediately in profit or loss, and is included in the “other gains and losses” line of
as at fair value upon recognition if:
the statement of comprehensive income.
•
such designation eliminates or significantly reduces a measurement or
Amounts deferred in equity are recycled in profit or loss in the periods when
recognition inconsistency that would otherwise arise; or
the hedged item is recognised in profit or loss, in the same line of the income
statement as the recognised hedged item. However, when the forecast transaction
•
the financial asset forms part of a group of financial assets or financial
that is hedged results in the recognition of a non-financial asset or a non-financial
liabilities or both, which is managed and its performance is evaluated on
liability, the gains and losses previously deferred in equity are transferred from
a fair value basis, in accordance with either the Group’s documented risk
equity and included in the initial measurement of the cost of the asset or liability.
management or investment strategy, and information about the grouping
is provided internally on that basis; or
Hedge accounting is discontinued when the Group revokes the hedging
relationship, the hedging instrument expires or is sold, terminated, or exercised,
•
it forms part of a contract containing one or more embedded derivatives,
or no longer qualifies for hedge accounting. Any cumulative gain or loss deferred
and it is allowable to be designated at fair value through profit or loss.
in equity at that time remains in equity and is recognised when the forecast
Financial assets, other than those at fair value, are assessed for indicators
transaction is ultimately recognised in profit or loss. When a forecast transaction
of impairment at each balance date. Financial assets are impaired where there
is no longer expected to occur, the cumulative gain or loss that was deferred in
is objective evidence that, as a result of one or more events that occurred after
equity is recognised immediately in profit or loss.
the initial recognition of the financial asset, the estimated future cash flows
There were no derivative financial instruments outstanding at 30 June 2009
of the investment have been affected.
(2008: Nil).
Financial liabilities
Other financial assets
Financial liabilities are categorised as either financial liabilities at fair value
Non-derivative financial instruments comprise trade receivables, cash and cash
through profit or loss or other financial liabilities.
equivalents, and uninvoiced receivables, and are initially recorded at fair value
Financial liabilities are categorised as at fair value through profit and loss where
plus transaction costs (except for fair value through profit or loss which are
the liability is either held for trading or it is designated as at fair value. A financial
initially recorded at fair value.
liability is classified as held for trading if:
Subsequent to initial recognition, investments in subsidiaries are measured
•
it has been incurred principally for the purpose of repurchasing in the near
at cost. Investments in associates are accounted for under the equity method
future; or
in the consolidated financial statements and recorded at cost in the parent’s
•
it is a derivative that is not designated and effective as a hedge instrument; or
financial statements.
•
it is part of an identified portfolio of financial instruments that the Group
These are classified into the following specified categories; classification depends
manages together and has a recent actual pattern of short-term
on the nature and purpose of the financial asset and is determined at the time
profit-making.
of initial recognition, this designation is re-evaluated at each reporting date:
A financial liability other than a financial liability held for trading may be
1) Financial assets at fair value through the statement of comprehensive income
designated as at fair value upon recognition if:
Financial assets held for trading purposes are classified as current assets and are
•
such designation eliminates or significantly reduces a measurement
stated at fair value, and changes resulting in a gain or loss are recognised in the
or recognition inconsistency that would otherwise arise; or
statement of comprehensive income.
•
the financial liability forms part of a group of financial assets or financial
2) Held to maturity investments
liabilities or both, which is managed and its performance is evaluated on
Held to maturity investments have fixed or determinable payments and fixed
a fair value basis, in accordance with either the Group’s documented risk
maturities and the Group has the positive intention and ability to hold to maturity.
management or investment strategy, and information about the grouping
These are subsequently recorded at amortised cost using the effective interest
is provided internally on that basis; or
method less impairment; revenue is recognised on an effective interest basis.
•
it forms part of a contract containing one or more embedded derivatives,
3) Available for sale financial assets
and it is allowable to be designated at fair value through profit or loss.
Unlisted shares and listed redeemable notes held by the Group that are traded
Financial liabilities at fair value are stated at fair value with any resultant gain
in an active market are classified as being available for sale and are stated at
or loss recognised in the statement of comprehensive income. This incorporates
fair value. Gains and losses arising from changes in fair value are recognised
any interest paid on the financial liability.
directly in equity in the available-for-sale revaluation reserve with the exception
Other financial liabilities, including borrowings, are initially measured at fair value,
of impairment losses, interest calculated using the effective interest method and
net of transaction costs and are subsequently measured at amortised cost using
foreign exchange gains and losses on monetary assets, which are recognised
the effective interest method.
directly in profit or loss. Where the investment is disposed of or is determined to
be impaired, the cumulative gain or loss previously recognised in the available-
The effective interest method is the method of calculating the amortised cost
for-sale revaluation reserve is included in profit or loss for the period.
of a financial liability and of allocating interest expense over the relevant period.
The effective interest rate is the rate that exactly discounts estimated future cash
Dividends on available for sale equity instruments are recognised in profit or loss
payments through the expected life of the financial liability, or, where appropriate,
when the Group’s right to receive the dividends is established.
a shorter period to the net carrying amount of the financial liability.
The fair value of available for sale monetary assets denominated in a foreign
currency is determined in that foreign currency and translated at the spot rate
(s) Changes in accounting policies
at the balance sheet date. The change in fair value attributable to translation
There have been no changes in accounting policies this period.
differences that result from a change in amortised cost of the asset is recognised
in profit or loss, and other changes are recognised in equity.
NIWA ANNUAL REPORT 2009 | 39
National Institute of Water & Atmospheric Research Ltd and Group
NOTES TO THE FINANCIAL STATEMENTS
as at 30 June 2009
4. Revenues and other gains
in thousands of New Zealand dollars
Group
Group
Parent
Parent
2009
2008
2009
2008
Sale of goods
10,637
14,129
2,713
2,732
Rendering of services
109,113
105,837
110,072
107,142
Dividends
5
2
5
2,502
Total operating revenue
119,755
119,968
112,790
112,376
Other gains
193
16
190
76
Total operating revenue and other gains
119,948
119,985
112,980
112,452
Revenue for the 2009 and 2008 period is generated from continuing operations.
5. Operating expenses
Operating expenses
in thousands of New Zealand dollars
Group
Group
Parent
Parent
2009
2008
2009
2008
Operating expenses include:
Rental and operating lease costs
1,791
1,045
1,702
986
Remuneration of directors
298
304
298
304
Net (gain)/loss on sale of property, plant, & equipment
(193)
(21)
(190)
(76)
Net (gain)/loss on sale of associates
–
97
–
–
Bad debts written off
8
14
8
14
Movement within doubtful debt provision
(9)
(48)
(9)
(48)
(Gain)/loss on foreign currency cash held
150
40
150
9
Auditor’s remuneration
in thousands of New Zealand dollars
Group
Group
Parent
Parent
2009
2008
2009
2008
Auditor’s remuneration to Deloitte comprise:
Audit of the financial statements
165
113
143
95
Other assurance services
–
–
–
–
Total auditor’s remuneration
165
113
143
95
In 2008-09, the Group paid compensation or other benefits to seven people who ceased to be employees during the financial year. The total value of the payment was
$189,757.82 (2007-08: $103,812.36).
6. Net interest and other financing income
in thousands of New Zealand dollars
Group
Group
Parent
Parent
2009
2008
2009
2008
Interest income on bank deposits
490
685
481
679
Finance income
490
685
481
679
Finance expense
35
23
11
–
Net interest and other financing income
455
662
470
679
40 |
NIWA ANNUAL REPORT 2009
7. Income tax
The income tax expense is determined as follows:
in thousands of New Zealand dollars
Group
Group
Parent
Parent
2009
2008
2009
2008
Income tax expense
Current tax
2943
5,110
1,767
3,469
Deferred tax relating to temporary differences
96
(896)
154
(693)
Income tax expense
3,039
4,214
1,921
2,776
Reconciliation of income tax expense
in thousands of New Zealand dollars
Group
Group
Parent
Parent
2009
2008
2009
2008
Operating profit before income tax
9,050
14,309
6,040
11,203
Tax at current rate of 30% (2008: 33%)
2,715
4,721
1,812
3,697
Adjustments to taxation:
Intercompany dividends
–
–
–
(750)
Share of associate’s net gain
–
11
–
–
Other non deductible expenses
32
63
11
18
Under/(over) provision in previous year
292
(581)
98
(189)
Income taxation expense
3,039
4,214
1,921
2,776
The 2007 Crown budget introduced the reduction in the company tax rate from 33% to 30%. This impacted the NIWA Group’s calculation from 1 July 2008.
8. Share capital
in thousands of New Zealand dollars
Group
Group
Parent
Parent
2009
2008
2009
2008
Issued and fully paid capital
24,799
24,799
24,799
24,799
24,798,700 ordinary shares (2008: 24,798,700 ordinary shares)
All shares carry equal voting and distribution rights; if the company is to be wound down, all proceeds are distributed equally amongst the shareholders.
9. Dividends
in thousands of New Zealand dollars
Group
Group
Parent
Parent
2009
2008
2009
2008
Payments were made on:
22 May 08
–
(187)
–
(187)
5 December 08
(649)
–
(649)
–
5 June 09
(860)
–
(860)
–
29 June 09
(4,140)
–
(4,140)
–
These dividend payments were made to the Government of New Zealand (the Crown) as the sole shareholder.
NIWA ANNUAL REPORT 2009 | 41
National Institute of Water & Atmospheric Research Ltd and Group
NOTES TO THE FINANCIAL STATEMENTS
as at 30 June 2009
10. Unsecured loan
in thousands of New Zealand dollars
Group
Group
Parent
Parent
2009
2008
2009
2008
Shareholder loan
260
241
–
–
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.
11. Employee entitlements
in thousands of New Zealand dollars
Group
Group
Parent
Parent
2009
2008
2009
2008
Accrued remuneration:
Salary accrual
2,081
1,629
1,758
1,451
Annual leave
4,565
4,786
4,238
4,494
Training leave
115
97
115
97
Long service leave
1,154
1,094
1,122
1,076
Retirement leave
726
813
638
725
Total employee entitlement provision
8,641
8,419
7,871
7,843
Comprising:
Current
7,915
7,607
7,233
7,118
Non-current
726
812
638
725
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 incurring further benefits.
in thousands of New Zealand dollars
Group
Group
Parent
Parent
2009
2008
2009
2008
Balance at the beginning of the year
8,419
9,988
7,843
9,203
Additional provision recognised
4,906
2,901
4,214
2,562
Amount utilised
(4,684)
(4,470)
(4,186)
(3,922)
Balance at the end of the year
8,641
8,419
7,871
7,843
42 |
NIWA ANNUAL REPORT 2009
12. Deferred tax liability and assets
12a. Deferred tax liability
in thousands of New Zealand dollars
Group
Group
Parent
Parent
2009
2008
2009
2008
The balance comprises temporary differences attributable to:
Amounts recognised in profit or loss:
Provisions and prepayments
(555)
(678)
(358)
(527)
Depreciation
4,097
4,154
2,581
2,632
3,542
3,476
2,223
2,105
Movements:
Balance at the beginning of the year
3,476
4,424
2,105
2,871
Under-provided in prior years
(30)
(52)
(36)
(73)
Charged to the statement of comprehensive income
96
(896)
154
(693)
Balance at the end of year
3,542
3,476
2,223
2,105
12b. 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.
13. Payables and accruals
in thousands of New Zealand dollars
Group
Group
Parent
Parent
2009
2008
2009
2008
Trade payables
10,580
10,221
9,113
9,531
Revenue in advance
7,094
7,063
7,086
7,094
Total
17,674
17,284
16,199
16,625
Trade payables are payable per normal commercial terms.
Revenue in advance relates to contracted services which have been billed in advance, yet not recognised as revenue in the statement of comprehensive income.
Assumptions underlying the revenue in advance which is a function of expected costs to complete the required contractual arrangements 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.
These assumptions are based upon management discretion utilising regularly updated budgets.
14. Short-term advance facility
A short-term advance facility is available from Westpac Banking Corporation.
in thousands of New Zealand dollars
Group
Group
Parent
Parent
2009
2008
2009
2008
Advance facility
650
–
650
–
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 a further $4.4 million (2008: $3.5 million).
NIWA ANNUAL REPORT 2009 | 43
15. Property, plant, and equipment
Group
Land
Buildings & leasehold
Vessels
Plant &
in thousands of New Zealand dollars
improvements
equipment
Cost
Balance at 1 July 2008
12,429
42,526
18,423
60,627
Additions
–
5,155
–
8,953
Disposals
–
(895)
–
(868)
Foreign currency
–
–
–
(9)
Balance at 30 June 2009
12,429
46,786
18,423
68,703
Accumulated depreciation and impairment losses
Balance at 1 July 2008
–
10,778
9,520
44,500
Depreciation charge
–
2,420
739
5,323
Impairment
–
–
–
–
Disposals
–
(943)
–
(893)
Balance as at 30 June 2009
–
12,255
10,259
48,929
Net book value at 30 June 2009
12,429
34,531
8,164
19,774
Group
Land
Buildings & leasehold
Vessels
Plant &
in thousands of New Zealand dollars
improvements
equipment
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
–
10,775
9,520
44,500
Net book value at 30 June 2008
12,429
31,751
8,903
16,127
Parent
Land
Buildings & leasehold
Vessels
Plant &
in thousands of New Zealand dollars
improvements
equipment
Cost
Balance at 1 July 2008
12,429
42,346
–
53,674
Additions
–
5,155
–
6,452
Transfers
–
–
–
–
Disposals
–
(895)
–
(937)
Balance at 30 June 2009
12,429
46,606
–
59,189
Accumulated depreciation and impairment losses
Balance at 1 July 2008
–
10,640
–
38,673
Depreciation charge
–
2,407
–
4,939
Transfers
–
–
–
–
Impairment
–
–
–
–
Disposals
–
(940)
–
(893)
Balance as at 30 June 2009
–
12,107
–
42,721
Net book value at 30 June 2009
12,429
34,499
–
16,468
Parent
Land
Buildings & leasehold
Vessels
Plant &
in thousands of New Zealand dollars
improvements
equipment
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
44 |
NIWA ANNUAL REPORT 2009
Electronic data
Office equipment
Furniture & fittings
Motor vehicles
Small boats
Work in
Total
processing equipment
progress
16,525
7,193
2,215
3,569
1,786
2,133
167,425
2,388
1,393
32
711
309
1,829
20,770
(1,938)
(735)
(27)
(539)
(64)
–
(5,066)
(11)
(5)
(4)
(2)
–
–
(30)
16,964
7,846
2,216
3,739
2,031
3,962
183,099
15,145
6,696
1,914
2,607
1,228
–
92,387
1,518
874
67
442
172
–
11,555
–
–
–
–
–
–
–
(1,955)
(739)
(52)
(487)
(61)
–
(5,130)
14,708
6,831
1,929
2,562
1,339
–
98,812
2,256
1,015
287
1,177
692
3,962
84,287
Electronic data
Office equipment
Furniture & fittings
Motor vehicles
Small boats
Work in
Total
processing equipment
progress
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
–
–
24
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
Electronic data
Office equipment
Furniture & fittings
Motor vehicles
Small boats
Work in
Total
processing equipment
progress
15,259
6,884
1,780
3,418
1,537
1,513
138,840
1,374
1,377
30
637
309
(819)
14,515
–
–
–
–
–
–
–
(1,952)
(740)
(53)
(450)
(61)
–
(5,088)
14,681
7,521
1,757
3,605
1,785
694
148,267
13,947
6,483
1,501
2,495
998
–
74,739
1,156
835
59
424
165
–
9,985
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(1,950)
(741)
(53)
(450)
(61)
–
(5,088)
13,153
6,577
1,507
2,469
1,102
–
79,636
1,528
944
250
1,136
683
694
68,631
Electronic data
Office equipment
Furniture & fittings
Motor vehicles
Small boats
Work in
Total
processing equipment
progress
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
NIWA ANNUAL REPORT 2009 | 45
National Institute of Water & Atmospheric Research Ltd and Group
NOTES TO THE FINANCIAL STATEMENTS
as at 30 June 2009
15. Property, plant, and equipment (continued)
The opening net book value for the Group at 1 July 2008 was $75,038k.
The opening net book value for the Parent at 1 July 2008 was $64,101k.
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
2009
2008
2009
2008
Property
–
107
–
107
Total
–
107
–
107
Property was reclassified from property, plant, 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.
15a. 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.
16. Heritage assets
NIWA has one collection and three databases that have been defined as heritage assets. Heritage collection assets are those assets held for the duration of their physical
lives because of their unique scientific importance and databases are maintained as an incidental part of existing business operations.
NIWA has the following heritage assets:
Type
Description
Marine Benthic Biology Collection
A national reference collection of marine invertebrates.
A national electronic database of high quality climate information, including temperatures, rainfall,
National Climate Database
wind, and other climate elements.
A national electronic database of river and lake locations throughout New Zealand, including levels,
Water Resources Archive Database
quality, and flows.
A national electronic database of the occurrence of fish in the fresh waters of New Zealand,
New Zealand Freshwater Fish Database
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 cost of these
heritage assets cannot be assessed with any reliability, and accordingly these assets have not been recognised for reporting purposes.
46 |
NIWA ANNUAL REPORT 2009
17. Identifiable intangibles
Group
in thousands of New Zealand dollars
Software
Copyrights
Total
Cost
Balance as at 1 July 2008
5,067
215
5,282
Additions
417
–
417
Disposals
(92)
–
(92)
Currency movements
–
–
–
Balance as at 30 June 2009
5,392
215
5,607
Accumulated amortisation and impairment losses
Balance as at 1 July 2008
5,067
128
5,195
Amortisation
417
48
465
Impairment
–
–
–
Disposals
(92)
–
(92)
Currency movements
–
2
2
Balance as at 30 June 2009
5,392
178
5,570
Net book value at 30 June 2009
–
37
37
The opening net book value at 1 July 2008 was $87k.
Group
in thousands of New Zealand dollars
Software
Copyrights
Total
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
NIWA ANNUAL REPORT 2009 | 47
National Institute of Water & Atmospheric Research Ltd and Group
NOTES TO THE FINANCIAL STATEMENTS
as at 30 June 2009
17. Identifiable intangibles (continued)
Parent
in thousands of New Zealand dollars
Software
Copyrights
Total
Cost
Balance as at 1 July 2008
4,769
–
4,769
Additions
417
–
417
Disposals
(92)
–
(92)
Currency movements
–
–
–
Balance as at 30 June 2009
5,094
–
5,094
Accumulated amortisation and impairment losses
Balance as at 1 July 2008
4,769
–
4,769
Amortisation
417
–
417
Impairment
–
–
–
Disposals
(92)
–
(92)
Currency movements
–
–
–
Balance as at 30 June 2009
5,094
–
5,094
Net book value at 30 June 2009
–
–
–
The opening net book value at 1 July 2008 was Nil.
Parent
in thousands of New Zealand dollars
Software
Copyrights
Total
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
–
–
–
48 |
NIWA ANNUAL REPORT 2009
18. Receivables
in thousands of New Zealand dollars
Group
Group
Parent
Parent
2009
2008
2009
2008
Trade receivables
18,786
20,049
18,505
19,159
Provision for doubtful debts
(1)
(10)
(1)
(10)
Total
18,785
20,039
18,504
19,159
Classified as:
Non-current
314
335
314
335
Current
18,471
19,704
18,190
18,824
18,785
20,039
18,504
19,159
Included in the Group’s trade receivables balance at the end of the year is one debtor’s balance which equates to 37% (2008: 35%) of the total trade receivables balance.
Contracts with a 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 the Group considers to be low credit 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 $1,135k (2008: $1,203k) 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 past due or impaired balances.
Included in the Parent’s trade receivable balance are debtors with a carrying amount of $1,123k (2008: $1,198k) 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 past due or impaired 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 consider there is low credit risk.
Ageing past due but not impaired trade receivables
in thousands of New Zealand dollars
Group
Group
Parent
Parent
2009
2008
2009
2008
Between 60 and 90 days
158
325
157
325
Between 91 and 180 days
735
725
724
720
Over 181 days
242
153
242
153
1,135
1,203
1,123
1,198
Included in the provision for doubtful debts are individually selected debtors $1k (2008: $10k) 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
in thousands of New Zealand dollars
Group
Group
Parent
Parent
2009
2008
2009
2008
Balance at the beginning of the year
10
58
10
58
Impairment loss recognised
–
–
–
–
Impairment losses reversed
–
–
–
–
Amounts written off as uncollectible
–
(35)
–
(35)
Amounts recovered during the year
(9)
(13)
(9)
(13)
1
10
1
10
NIWA ANNUAL REPORT 2009 | 49
National Institute of Water & Atmospheric Research Ltd and Group
NOTES TO THE FINANCIAL STATEMENTS
as at 30 June 2009
19. Inventory
in thousands of New Zealand dollars
Group
Group
Parent
Parent
2009
2008
2009
2008
Consumables
659
1,054
22
–
Finished goods
1,532
1,139
1,145
948
Work in progress
73
300
28
216
Total
2,264
2,493
1,195
1,164
Inventories are not pledged as security for liabilities, nor are any inventories subject to retention of title clauses.
20. Reconciliation of the profit for the period to net cash from operating activities
in thousands of New Zealand dollars
Group
Group
Parent
Parent
2009
2008
2009
2008
Profit for the period
6,016
10,061
4,119
8,427
Add/(less) items classified as investing activities
Net loss/(gain) on disposal of property, plant, & equipment
(193)
(21)
(190)
(76)
Net loss/(gain) on disposal of associate
–
97
–
–
(193)
76
(190)
(76)
Add/(less) non-cash items
Share of associate’s (profit)/deficit for the year
–
(38)
–
–
Depreciation and impairment
11,555
9,714
9,985
8,498
(Surplus)/deficit attributable to minority interests
(18)
(60)
–
–
Amortisation of identifiable intangibles
464
448
417
311
Unrealised changes in the value of subsidiaries
23
57
–
–
(Gain)/loss on foreign currency cash held
(150)
(40)
(150)
(9)
Increase/(decrease) in employee entitlements
(86)
(116)
(87)
(110)
Increase/(decrease) in deferred tax liability
66
(948)
118
(766)
11,854
9,017
10,283
7,924
Add/(less) movements in working capital items
Increase/(decrease) in payables and accruals
390
862
(426)
1,174
Increase/(decrease) in employee entitlements
308
(1,364)
117
(1,252)
(Increase)/decrease in receivables and prepayments
883
(559)
269
(300)
(Increase)/decrease in inventory and uninvoiced receivables
14
136
(251)
299
(Increase)/decrease in taxation receivable
259
431
605
297
1,854
(494)
314
218
Net cash flows from operating activities
19,531
18,702
14,526
16,493
50 |
NIWA ANNUAL REPORT 2009
21. Investments
in thousands of New Zealand dollars
Group
Group
Parent
Parent
2009
2008
2009
2008
Investment in subsidiaries
–
–
12,709
12,709
-
-
12,709
12,709
Investments in subsidiaries
Name
Principal activities
Ownership and voting interest
2009
2008
%
%
NIWA Vessel Management Ltd
Vessel charters for scientific research
100
100
NIWA Australia Pty Ltd
Scientific research and consultancy services
100
100
NIWA Environmental Research Institute
Scientific research and consultancy services
100
100
Unidata Pty Ltd
Supplier of environmental technology products
80
80
NIWA Natural Solutions Ltd
Non-trading shell company
100
–
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 Environmental Research Institute is incorporated in the USA.
Investments in associate, equity accounted
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 Nil (2008: $38k).
CRL Energy Ltd was sold on 30 June 2008.
Movements in the carrying value of equity accounted associate
in thousands of New Zealand dollars
Group
Group
2009
2008
Balance at 1 July
–
559
Share of profit/(loss)
–
38
Sale of CRL Energy Ltd
–
(500)
(Loss)/ gain on sale
–
(97)
Balance at 30 June
–
–
22. Intercompany
in thousands of New Zealand dollars
Parent
Parent
2009
2008
NIWA non-current liability
8,875
10,884
An amount of $9.9 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 $211k, NIWA Environmental Research Institute of
$28k, and Unidata Pty Ltd of $801k, resulting in a net non-current liability of $8.9 million. All balances are unsecured, have no set repayment terms and are payable upon
demand, 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 $8.7 million (2008: $9.1 million) and purchased workshop
services totalling $41k (2008: $153k). NIWA Vessel Management Ltd contracted services from its parent, NIWA Science, totalling $25k (2008: $582k).
During the year NIWA contracted scientific research from its subsidiary NIWA Australia Pty Ltd totalling Nil (2008: Nil) and provided research services to NIWA Australia
Pty Ltd of $12k (2008: $304k).
NIWA earned revenue of $21k (2008: $43k) from research subcontracts with NIWA Environmental Research Institute.
NIWA charged its subsidiaries for administration expenses and management services totalling $1.0 million for the financial year (2008: $1.0 million).
There were no other significant transactions between any of the companies in the Group.
NIWA ANNUAL REPORT 2009 | 51
National Institute of Water & Atmospheric Research Ltd and Group
NOTES TO THE FINANCIAL STATEMENTS
as at 30 June 2009
23. 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
2009
2008
Current assets
–
–
Non-current assets
–
–
Current liabilities
–
–
Non-current liabilities
–
–
Income
1,778
1,778
Expenses
1,778
1,778
24. Related party transactions
In addition to the disclosures in note 22, 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, and are not considered to fall within the intended scope of related party transactions. No related
party debts have been written off or forgiven during the year.
Key management personnel compensations
in thousands of New Zealand dollars
Group
Group
Parent
Parent
2009
2008
2009
2008
Short-term benefits
5,517
4,872
5,209
4,708
5,517
4,872
5,209
4,708
The table above includes remuneration of the Directors and all key management positions.
25. Segment Reporting
The NIWA Group comprises the following main business segments:
1. Research
atmospheric and aquatic scientific research
2. Vessel charter
charter of vessels for scientific research
3. Product sales and services
sale of associated instrumentation and data
The NIWA Group operates predominately in New Zealand in the research segment where 96% (2008: 92%) of the revenue is contracted through the New Zealand
Government, central government agencies, and subsidiaries.
52 |
NIWA ANNUAL REPORT 2009
25a. Business segments
in thousands of
Research
Vessel Charter
Product sales
Eliminations
Total
New Zealand dollars
and services
2009
2008
2009
2008
2009
2008
2009
2008
2009
2008
External revenue
109,467
105,807
4,794
9,439
5,843
4,757
–
–
119,948
119,985
Inter-segment revenue
–
–
8,730
8,730
460
451
(9,190)
(9,181)
–
–
Total segment revenue
109,155
105,771
13,524
18,169
6,303
5,208
(9,190)
(9,181)
119,948
119,985
Depreciation
9,985
8,400
1,543
1,279
27
35
–
–
11,555
9,714
Amortisation
416
311
–
98
48
39
–
–
464
448
Impairment loss
–
51
–
–
–
–
–
–
51
Segment result
43,241
49,035
4,230
6,788
2,341
865
(9,624)
(10,644)
40,189
46,045
Unallocated revenue
156
18
Unallocated expenses
(31,594)
(32,398)
Net finance costs
455
662
Income tax expense
(3,039)
(4,214)
Profit (loss) for the period
6,011
10,095
Segment assets
87,629
87,108
25,895
23,611
1,900
2,973
–
–
115,425
113,693
Segment liabilities
25,801
24,919
3,222
2,935
1,744
1,566
–
–
30,767
29,420
Capital expenditure
14,932
12,766
6,226
1,170
29
49
–
–
21,187
13,985
25b. Geographical segments
Segment revenue is based on the geographical location of customers. Segment assets are based on the geographical location of the assets.
in thousands of New Zealand dollars
New Zealand
Australia
United States
Other regions
Consolidation
of America
2009
2008
2009
2008
2009
2008
2009
2008
2009
2008
Revenue from
external customers
114,632
110,076
1,984
6,800
2,219
1,253
957
1,838
119,792
119,967
Segment assets
114,583
112,065
744
1,964
97
78
–
–
115,425
113,693
NIWA ANNUAL REPORT 2009 | 53
National Institute of Water & Atmospheric Research Ltd and Group
NOTES TO THE FINANCIAL STATEMENTS
as at 30 June 2009
26. Financial instruments
Capital management
The Group has externally imposed requirements under the Crown Research Institutes Act 1992:
•
to operate in a financially responsible manner so that sufficient operating funds are generated to maintain financial viability;
•
to provide an adequate rate of return on shareholders’ funds; and
•
to operate as a going concern.
Specifically the Shareholding Ministers expect the targeted CCMAU return on equity to be 9.0%. 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 adjusted return on equity each year. This year return on equity has decreased from 17.9% to 9.8%. The long-term average
is expected to remain constant and above the required 9.0%.
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:
•
the fair value of financial assets and financial liabilities with standard terms and conditions and traded on active liquid markets is determined with reference
to quoted market prices;
•
the fair value of other financial assets and financial liabilities (excluding derivative instruments) is determined in accordance with valuation techniques based
on discounted cash flow analysis using prices from observable recent market transactions, or dealer quotes for similar instruments;
•
the fair value of derivative instruments is calculated using quoted prices. Where such prices are not available, use is made of discounted cash flow analysis using
the applicable yield curve for the duration of the instruments for non-optional derivatives, and option pricing models for optional derivatives; and
The short term advance facility available from Westpac is subject to two covenants:
Equity ratio – Maintain shareholders funds of not less than 40.0% of adjusted tangible assets, and
Interest cover ratio – Ensure that earnings for each financial year are not less than 3.00 times its consolidated funding costs in the financial year.
The carrying value of financial instruments approximates fair value as all material financial instruments, which are not measured at fair value are current with the
exception for the Intercompany balances that have a carrying value of $8,875k (2008: $10,884k) and a fair value of $6,673k (2008: $5,041k).
Categories of financial instruments
Group
in thousands of New Zealand dollars
Note
Loans and
Financial liabilities at
Total
receivables
amortised cost
Balance at 30 June 2009
Assets
Cash and cash equivalents
3,099
–
Trade receivables
18
18,786
–
Investments 21
–
–
Uninvoiced receivables
26
4,686
–
Total financial assets
26,571
–
26,571
Total non-financial assets
88,854
Total assets
115,425
Liabilities
Trade payables
13
–
10,580
Unsecured loans
10
–
260
Short-term loan facility
14
–
650
Intercompany
22
–
–
Employee entitlements
11
–
8,641
Total financial liabilities
–
20,131
20,131
Total non-financial liabilities
10,636
Total liabilities
30,767
54 |
NIWA ANNUAL REPORT 2009
Group
in thousands of New Zealand dollars
Note
Loans and
Financial liabilities at
Total
receivables
amortised cost
Balance at 30 June 2008
Assets
Cash and cash equivalents
9,303
–
Trade receivables
18
20,039
–
Investments
21
–
–
Uninvoiced receivables
26
4,471
–
Total financial assets
33,813
–
33,813
Total non-financial assets
79,880
Total assets
113,693
Liabilities
Trade payables
13
–
10,221
Unsecured loans
10
–
241
Intercompany
22
–
–
Employee entitlements
11
–
8,419
Total financial liabilities
–
18,881
18,881
Total non-financial liabilities
10,539
Total liabilities
29,420
Parent
in thousands of New Zealand dollars
Note
Loans and Financial liabilities Investment in subsidiary
Total
receivables
at amortised cost
accounted for at cost
Balance at 30 June 2009
Assets
Cash and cash equivalents
2,094
–
–
Trade receivables
18
18,505
–
–
Investments
21
–
–
12,709
Uninvoiced receivables
26
4,686
–
–
Total financial assets
25,285
–
12,709
37,994
Total non-financial assets
72,218
Total assets
110,212
Liabilities
Trade payables
13
–
9,113
–
Short term loan facility
14
–
650
–
Intercompany
22
–
8,875
–
Employee entitlements
11
–
7,871
–
Total financial liabilities
–
26,509
–
26,509
Total non-financial liabilities
9,309
Total liabilities
35,818
NIWA ANNUAL REPORT 2009 | 55
National Institute of Water & Atmospheric Research Ltd and Group
NOTES TO THE FINANCIAL STATEMENTS
as at 30 June 2009
26. Financial instruments (continued)
in thousands of New Zealand dollars
Note
Loans and Financial liabilities Investment in subsidiary
Total
receivables
at amortised cost
accounted for at cost
Balance at 30 June 2008
Assets
Cash and cash equivalents
9,060
–
–
Trade receivables
18
19,149
–
–
Investments
21
–
–
12,709
Uninvoiced receivables
26
4,466
–
–
Total financial assets
32,675
–
12,709
45,384
Total non-financial assets
67,997
Total assets
113,381
Liabilities
Trade payables
13
–
9,531
–
Intercompany
22
–
10,884
–
Employee entitlements
11
–
7,843
–
Total financial liabilities
–
28,258
–
28,258
Total non-financial liabilities
9,199
Total liabilities
37,457
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 counterparts
dealt with.
There are no significant concentrations of credit risk. The maximum exposure to credit risk is $26,570k (total exposed to credit risk, which is cash and cash equivalents
$3,099k; uninvoiced receivables $4,686k; and trade receivables net of provisions $18,786).
Note 18, (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
2009
2008
New Zealand
17,889
18,676
Australia
290
731
USA
63
199
United Kingdom
56
11
Other European countries
102
72
Other Asia Pacific countries
19
241
Other regions
367
119
Provision for doubtful dets
(1)
(10)
Trade receivables
18,785
20,039
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 2009 is $4.7k (2008: $4.5k) and the parent at June 2009
$4.7k (2008: $4.5k). Management believe there are no significant concentrations of risk relating to this balance.
56 |
NIWA ANNUAL REPORT 2009
Interest rate risk
Interest rate risk is the risk that cashflows 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 the Group’s borrowings as at 30 June:
2009
2008
–
Short term advance facility
3.7%
The interest rates on the Group’s investments as at 30 June:
2009
2008
Cash (on call)
–
8.2%
Short term deposits
–
8.60% - 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.
Currency risk
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 (2008: $nil).
The Groups 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 2009
30 June 2008
Cash balances
996
249
1,095
1
263
12
49
1
Trade receivables
333
43
35
–
898
–
60
–
Trade payables
(247)
(19)
(219
(1)
(161)
–
–
–
Statement of financial position exposure
1,082
273
911
–
1,000
12
109
1
The following significant exchange rates applied during the year:
NZD
Average rate
Reporting date spot rate
2009
2008
2009
2008
AUD
0.8151
0.8579
0.8059
0.7838
USD
0.6079
0.7684
0.6521
0.7535
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 2008.
in thousands of New Zealand dollars
Group
Group
2009
2008
AUD
120
111
EUR
30
1
USD
101
12
YEN
–
–
A 10% weakening of the NZD against the above currencies at 30 June would have had approximately an equal but opposite effect on the above currencies to the amounts
shown above, on the basis that all other variables remain constant.
NIWA ANNUAL REPORT 2009 | 57
National Institute of Water & Atmospheric Research Ltd and Group
NOTES TO THE FINANCIAL STATEMENTS
as at 30 June 2009
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
On demand
Less than 1 year
Later than 1 year and
Later than 5 years
Total
not later than 5 years
As at 30 June 2009
Trade payables
–
10,580
–
–
10,580
Unsecured loan
–
19
457
–
476
Short term advance facility
–
650
–
–
650
Employee entitlements
–
7,915
726
–
8,641
Total
–
19,164
1,183
–
20,347
in thousands of New Zealand dollars
On demand
Less than 1 year
Later than 1 year and
Later than 5 years
Total
not later than 5 years
As at 30 June 2008
Trade payables
–
10,221
–
–
10,221
Unsecured loan
–
19
76
381
476
Short term advance facility
–
–
–
–
–
Employee entitlements
–
7,607
812
–
8,419
Total
–
17,847
888
381
19,116
Parent
in thousands of New Zealand dollars
On demand
Less than 1 year Later than 1 year and not
Later than 5 years
Total
later than 5 years
As at 30 June 2009
Trade payables
–
9,113
–
–
9,113
Intercompany
8,875
–
–
–
8,875
Short term advance facility
–
650
–
–
650
Employee entitlements
–
7,233
638
–
7,871
Total
8,875
16,996
638
–
26,509
in thousands of New Zealand dollars
On demand
Less than 1 year
Later than 1 year and
Later than 5 years
Total
not later than 5 years
As at 30 June 2008
Trade payables
–
9,531
–
–
9,531
Intercompany
10,884
–
–
–
10,884
Short term advance facility
–
–
–
–
–
Employee entitlements
–
7,118
725
–
7,843
Total
10,884
16,649
725
–
28,258
58 |
NIWA ANNUAL REPORT 2009
Financing facilities
The Group has access to financing facilities; the total amount uncalled and available is $4.9 million (2008: $4.0 million) at the balance date. $0.65 million was drawn down
at 30 June 2009. The uncalled and available amount of $4.9 million relates to the undrawn overdraft facility of $0.5 million and the advance facility of $4.4 million
(2008: $3.5 million). These facilities are available for the parent company.
27. Commitments
27a. Operating lease arrangements
in thousands of New Zealand dollars
Group
Group
Parent
Parent
2009
2008
2009
2008
Obligations payable after balance date on non-cancellable operating leases:
Within 1 year
1,552
1,439
1,466
1,358
Between 1 and 2 years
1,835
1,448
1,835
1,448
Between 2 and 5 years
4,968
3,980
4,968
3,980
Over 5 years
12,258
4,780
12,258
4,780
20,613
11,647
20,527
11,566
Operating leases relate to office and laboratory facilities within New Zealand and Australia with lease terms between 1 to 11 years, with various options to extend.
27b. Capital commitments
in thousands of New Zealand dollars
Group
Group
Parent
Parent
2009
2008
2009
2008
Commitments for future capital expenditure:
Contracted, but not provided for
1,670
98
532
98
1,670
98
532
98
28. Contingent liabilities
There are no material contingent liabilities that were identified during the normal course of activities (2008: Nil).
29. Subsequent events
Subsequent to balance date, two contracts totalling $3,533k were entered into for modifications to RV Tangaroa (2008: Nil).
NIWA ANNUAL REPORT 2009 | 59
National Institute of Water & Atmospheric Research Ltd and Group
AUDIT REPORT
TO THE READERS OF
NATIONAL INSTITUTE OF WATER & ATMOSPHERIC
RESEARCH LIMITED AND GROUP’S FINANCIAL
STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2009
The Auditor-General is the auditor of National Institute of Water & Atmospheric
Responsibilities of the Board of Directors and the Auditor
Research Limited (the company) and group. The Auditor-General has appointed
me, Andrew Dick, using the staff and resources of Deloitte to carry out the audit of
The Board of Directors is responsible for preparing the financial statements
the financial statements of the company and group for the year ended
in accordance with generally accepted accounting practice in New Zealand.
30 June 2009.
The financial statements must give a true and fair view of the financial position
of the company and group as at 30 June 2009 and the results of operations
Unqualified Opinion
and cash flows for the year ended on that date. The Board of Directors’
responsibilities arise from the Crown Research Institutes Act 1992 and the
In our opinion:
Financial Reporting Act 1993.
The financial statements of the company and group on pages 32 to 59:
We are responsible for expressing an independent opinion on the financial
-
comply with generally accepted accounting practice in New Zealand;
statements and reporting that opinion to you. This responsibility arises
from section 15 of the Public Audit Act 2001 and the Crown Research Institutes
-
comply with International Financial Reporting Standards; and
Act 1992.
-
give a true and fair view of:
-
the company and group’s financial position as at 30 June 2009; and
Independence
-
the results of operations and cash flows for the year ended on that date.
When carrying out the audit we followed the independence requirements
Based on our examination the company and group kept proper
of the Auditor-General, which incorporate the independence requirements
accounting records.
of the Institute of Chartered Accountants of New Zealand.
The audit was completed on 28 August 2009, and is the date at which
Other than the audit, we have no relationship with or interests in the company
our opinion is expressed.
or any of its subsidiaries.
The basis of our opinion is explained below. In addition, we outline the
responsibilities of the Board of Directors and the Auditor, and explain
our independence.
Basis of Opinion
We carried out the audit in accordance with the Auditor-General’s Auditing
Standards, which incorporate the New Zealand Auditing Standards.
We planned and performed the audit to obtain all the information and explanations
Andrew Dick
we considered necessary in order to obtain reasonable assurance that the
Deloitte
financial statements did not have material misstatements, whether caused by
On behalf of the Auditor-General
fraud or error.
Auckland, New Zealand
Material misstatements are differences or omissions of amounts and disclosures
that would affect a reader’s overall understanding of the financial statements.
If we had found material misstatements that were not corrected, we would have
referred to them in our opinion.
The audit involved performing procedures to test the information presented
in the financial statements. We assessed the results of those procedures
Matters Relating to the Electronic Presentation of the Audited
in forming our opinion.
Financial Statements
Audit procedures generally include:
-
determining whether significant financial and management controls
This audit report relates to the financial statements of the National Institute
are working and can be relied on to produce complete
of Water & Atmospheric Research Limited and group for the year ended 30
and accurate data;
June 2009 included on the National Institute of Water & Atmospheric Research
-
verifying samples of transactions and account balances;
Limited’s website. The National Institute of Water & Atmospheric Research
Limited’s Board of Directors is responsible for the maintenance and integrity
-
performing analyses to identify anomalies in the reported data;
of the National Institute of Water & Atmospheric Research Limited’s website.
-
reviewing significant estimates and judgements made by the
We have not been engaged to report on the integrity of the National Institute
Board of Directors;
of Water & Atmospheric Research Limited’s website. We accept no responsibility
-
confirming year-end balances;
for any changes that may have occurred to the financial statements since they
were initially presented on the website.
-
determining whether accounting policies are appropriate
and consistently applied; and
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
-
determining whether all financial statement disclosures
or from the financial statements. If readers of this report are concerned with the
are adequate.
inherent risks arising from electronic data communication they should refer to the
We did not examine every transaction, nor do we guarantee complete accuracy
published hard copy of the audited financial statements and related audit report
of the financial statements.
dated 28 August 2009 to confirm the information included in the audited financial
We evaluated the overall adequacy of the presentation of information in the
statements presented on this website.
financial statements. We obtained all the information and explanations we
Legislation in New Zealand governing the preparation and dissemination
required to support our opinion above.
of financial information may differ from legislation in other jurisdictions.
60 |
NIWA ANNUAL REPORT 2009
National Institute of Water & Atmospheric Research Ltd and Group
DIRECTORY
National Institute of Water
& Atmospheric Research Ltd
Directors
Operations Management Team
Regional Offices
Christopher Mace (Chairman)
Ken Becker, [email address]
Bream Bay Aquaculture Park
(appointed 1 July 2009)
Regional Manager, Auckland
Station Road, Ruakaka 0116
Craig Ellison (Deputy Chairman)
Dr Graham Fenwick, [email address]
PO Box 147, Ruakaka 0151
Tel +64-9-432 5500
Ed Johnson
Assistant Regional Manager, Christchurch
Fax +64-9-432 5501
Dr Wendy Lawson (reappointed 1 July 2009)
Dr Ken Grange, [email address]
Regional Manager, Nelson
Auckland
Dennis Cairns (appointed 1 July 2008)
41 Market Place
Dr Julie Hall, [email address]
Helen Robinson (appointed 1 July 2008)
Auckland Central 1010
Assistant Regional Manager, Wellington
Jason Shoebridge (appointed 1 July 2009)
Private Bag 99940
Dr Terry Hume, [email address]
Newmarket,
Sue Suckling (Chair) (resigned 30 June 2009)
Assistant Regional Manager, Hamilton
Auckland 1149
Dr Graham Hill (resigned 30 June 2009)
Dr Andrew Laing, [email address]
Tel +64-9-375 2050
Regional Manager, Wellington
Fax +64-9-375 2051
Executive Team
Charles Pearson, [email address]
Hamilton
John Morgan, [email address]
Regional Manager,Christchurch & Lauder
Gate 10, Silverdale Road,
Chief Executive Officer
Dr David Roper, [email address]
Hillcrest, Hamilton 3216
Dr Bryce Cooper, [email address]
Regional Manager, Hamilton
PO Box 11115, Hillcrest,
General Manager, Strategy
Hamilton 3251
Michael Stobart, [email address]
Tel +64-7-856 7026
Dr Rob Murdoch, [email address]
Regional Manager, Bream Bay
Fax +64-7-856 0151
General Manager, Research
Wellington
Kate Thomson, [email address]
Registered Office
301 Evans Bay Parade,
Chief Financial Officer & Company Secretary
41 Market Place
Greta Point, Wellington 6021
Geoff Baird, [email address]
Auckland Central 1010
Private Bag 14901, Kilbirnie,
General Manager, Communications
New Zealand
Wellington 6241
& Marketing
Tel +64-4-386 0300
Dr Barry Biggs, [email address]
Auditors
Fax +64-4-386 0574
General Manager, Operations
Deloitte on behalf of the Auditor-General
Nelson
Dr Mary-Anne Dehar, [email address]
217 Akersten St, Port Nelson
Bankers
General Manager, Human Resources
PO Box 893, Nelson 7040
The National Bank of New Zealand Limited
Tel +64-3-548 1715
Arian de Wit, [email address]
Fax +64-3-548 1716
General Manager, Information, Systems,
Solicitors
& Technology
Christchurch
Bell Gully
10 Kyle Street,
Science Management Team
Riccarton, Christchurch 8011
Insurance Broker
P O Box 8602, Christchurch 8440
Nicholas Bain, [email address]
Marsh Limited
Tel +64-3-348 8987
Manager, Commercialisation
Fax +64-3-348 5548
Andrew Forsythe, [email address]
Head Office
Lauder (Central Otago)
Chief Scientist, Aquaculture & Biotechnology
41 Market Place
State Highway 85, Lauder,
Dr Clive Howard-Williams,
Auckland Central 1010
Central Otago 9320
[email address]
Private Bag 99940
Private Bag 50061,
Chief Scientist, Freshwater & Coasts
Newmarket,
Omakau 9352,
Auckland 1149
Dr John McKoy, [email address]
Central Otago
New Zealand
Chief Scientist, Fisheries
Tel +64-3-440 0055
Tel +64-9-375 2050
Fax +64-3-447 3348
Dr Murray Poulter, [email address]
Fax +64-9-375 2051
Chief Scientist, Atmosphere, Natural Hazards,
Unidata Pty Ltd
& Energy
General Manager: Matt Saunders
40 Ladner Street,
Doug Ramsay, [email address]
O’Connor, WA 6163
Manager, Pacific Rim
Australia
Dr Don Robertson, [email address]
Tel +61-8-9331 8600
Chief Scientist, Aquatic Biodiversity & Biosecurity
Fax +61-8-9331 8611
Dr Charlotte Severne, [email address]
www.unidata.com.au
Chief Scientist, Ma–ori & Oceans
Fred Smits, [email address]
General Manager, Vessel Operations
For enquiries, contact Michele Hollis,
Dr David Wratt, [email address]
Communications Manager,
Chief Scientist, Climate
[email address]
www.niwa.co.nz
NIWA ANNUAL REPORT 2009 |
National Institute of Water & Atmospheric Research Ltd
The 2009 NIWA Annual Report is printed on paper produced
using the ECF (Elemental Chlorine Free) process at an ISO 14001
accredited mill. Paper content is 55% recycled fibre and 45%
from timber harvested from sustainably managed forests.
The printer recycles waste materials. Waste chemicals are
collected and destroyed by a certified company.
|
NIWA ANNUAL REPORT 2009
