2010
Annual Report
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NIWA ANNUAL REPORT 2010
contents
1501
Chairman & Chief Executive’s report
Financial summary
Organisational responsibility
Performance against Statement
of Corporate Intent
Capability funding
Board of Directors
Report of the Directors
Corporate governance statement
Financial statements
Directory 60
environmental science projects on the go through our national centres
$127.9 million revenue from research and applied science services
From the top of the
atmosphere to the
bottom of the ocean,
NIWA delivers leading
environmental science.
750 staff across 16 sites in New Zealand and Australia
Cover photo: Dave Allen, NIWA
Nelson Boustead
Nelson Boustead, NIWA
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NIWA ANNUAL REPORT 2010
“Science and innovation are key to our nation’s prosperity.”
John Morgan, Chief Executive
$127.9 million
$9.55 million profit before income tax
$127.4
revenue from research and applied science services
million total assets
Right: Chief Executive John Morgan
and Chairman Chris Mace
In spite of all these ongoing changes, the 2009–10 financial year has been another successful period for NIWA. Our productivity and revenue exceeded budget, our costs were well managed, and as an organisation we were able to invest in our most important asset, our staff, as well as some new and exciting technology.
Aspects of our science, particularly regarding climate data, continue to be scrutinised. While we must accept that scepticism and close scrutiny play a role in the assessment and validation of new knowledge, we must also be prepared to defend our reputation against inaccurate, ideologically or politically motivated criticism.
While the year ahead looks challenging, with changes to purchasing and funding procedures, I would like to sincerely thank the Directors, John Morgan and his hard working executive, and indeed all of the NIWA team, for their ongoing efforts and contribution to NIWA in this important area of environmental science.
Chris Mace Chairman
capital expenditure programme. The aim was to hold all existing business and be well positioned to take advantage of new business opportunities as they emerged by maintaining our research and applied science capability.
To achieve this we focused on being a very lean operation – taking a cautious approach to personnel costs, re-using resources, extending the life of consumables, and cutting key areas like overseas travel. We were acutely aware of how this constrained the professional lives of our staff, and we are grateful for their cooperation and willingness to temporarily suspend some important components of professional operation.
CHAIRMAN & CHIEF EXECUTIVE’S REPORT
From the Chairman
“As economic development receives unprecedented focus, attention is turning to Research, Science and Technology to address the challenges we face both nationally and globally.”
So says Neville Jordan CNZM in his statement as Chair of the Crown Research Institute (CRI) Taskforce. The Board of NIWA agrees with the statement, and with the recommendations of the Taskforce to streamline funding processes, strengthen governance structures, and clarify goals for each CRI.
The past year has set a new course for science and innovation in New Zealand by recognising its potential contribution to all New Zealanders. NIWA, with its specialist skills in environmental science, will join other CRIs and Universities at the forefront of making this contribution a reality.
NIWA continues to work alongside our Minister of Research, Science and Technology Dr Wayne Mapp, the Prime Minister’s Chief Science Advisor Sir Peter Gluckman, and officials to finalise new processes and implement the changes.
Our Chief Executive John Morgan as Chair of Science New Zealand has made a significant contribution to this work on behalf of all CRIs.
Planning for a tough year
The demand for NIWA’s environmental science has grown steadily in recent years; however, it was not clear when we were preparing our business plan for the 2009–10 year quite how much we would be affected by what was being described as the worst economic period the world had faced in a generation.
We planned for a tough year by budgeting for static revenue and cutting back on as many operating costs as we could without damaging our long- term capability. We did so with a determination to retain all permanent staff and to continue to complete the final year of an extensive three year
NIWA ANNUAL REPORT 2010
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NIWA ANNUAL REPORT 2010
- puku,
- puku at
is getting an
Tangaroa
to stay in one place (within a few metres) or move
Tangaroa
Top right: Minister of Research, Science and Technology, Dr Wayne Mapp,
officially opens NIWA’s High Performance Computing Facility (HPCF),
following successful trials and installation at NIWA’s Greta Point site
in Wellington.
The HPCF is the most powerful research computer of its type in the
Southern Hemisphere and the 15th largest p575 POWER6 supercomputer
in the world. It is one of the largest single investments in New Zealand
science and represents a major strategic asset for NIWA and the country. Photo: Dave Allen, NIWA
Bottom left: NIWA’s flagship research vessel
upgrade, with the installation of an advanced dynamic positioning system.
This will allow
unerringly along a path to deploy and operate precisely scientific, fishing,
or mining equipment.
NIWA’s multi-million dollar investment will significantly advance
New Zealand’s capability for ocean sciences and marine
resource exploration. Photo: Daniel Hayward, NIWA
Bottom right: NIWA Chief Executive, John Morgan, along with Minister of
Research, Science and Technology, Dr Wayne Mapp, and Chief Scientist,
Aquaculture & Biotechnology, Andrew Forsythe, view juvenile ha
NIWA’s Bream Bay Aquaculture Park.
NIWA has conducted six years of intensive research into farming ha
and is the first in the world to close the life cycle of this premium seafood
product in captivity.
The team started with the capture of wild broodstock and is now producing
young fish from selected breeding stock.
- puku,
- puku and kingfish. Six years ago,
- puku, and this year we market-
measurement. This year we were employed to measure and monitor environmental conditions by local authorities, developers, builders of infrastructure, and users of natural resources. NIWA runs the country’s only national-scale river water monitoring system, the National River Water Quality Network. The network this year provided a picture of the declining quality of our waterways. Although they are still exceptional by international standards, the public discussion about the issue shows that New Zealanders want to stop the decline. Our research is showing ways to fix the problems.
Another example of focus in this field is the Land and Water Forum, a group of key industries and authorities charged with producing a national freshwater strategy for New Zealand that enhances both our economy and the environment. NIWA’s freshwater expertise has been a key contributor to the Land and Water Forum’s deliberations.
Developing economic opportunities
The second key role for NIWA is to focus its research on areas that are relevant to New Zealand and make ourselves the best at the science involved in these fields in order to identify and realise economic opportunities. These fields include climate, environmental forecasting, freshwater, renewable energy, and finfish aquaculture.
One example which has come to fruition this year is the farming of ha NIWA saw that farming of new species of finfish was possible in New Zealand, and that there would be high commercial demand for it. After several years of extensive research we now have a complete understanding of the life-cycle of ha tested the results with our farmed product – to universal acclaim from chefs and buyers in the international fish market. Although we are about two years away from full commercialisation of ha our kingfish research has now
The establishment of a ‘CRI Taskforce’ resulted in a report making a number of recommendations to enhance the performance of CRIs. In essence, this was to provide clarity about the role and purpose of CRIs, improve the efficiency and administration of core science funding, increase the accountability of CRI boards and executives, and increase the connectedness between CRIs and the economic sectors they serve.
The NIWA Board and Executive have responded enthusiastically to the CRI Taskforce recommendations, recognising that there a number of key outcomes for New Zealand that NIWA’s science can contribute to. Examples include improving economic growth through the sustainable management of our nation’s freshwater and ocean resources, and growing renewable energy production utilising aquatic and atmospheric energy resources.
NIWA’s science will also help New Zealand better understand the impacts, and exploit the opportunities, of climate variability and change, and enhance New Zealand’s international reputation and competiveness through mitigating changes in atmospheric composition from greenhouse gases and air pollutants.
NIWA’s science will also make a key contribution to getting a better understanding of the Antarctic and Southern Ocean climate, oceans, and ecosystems and their longer- term impact on New Zealand, and increasing the resilience of New Zealand and the South-West Pacific Islands to weather and climate related hazards like drought, floods, tsunami, and sea level rise.
Effective and accurate environmental monitoring
Most New Zealanders recognise that the environment and our unique biodiversity is the bedrock of our economy, and that astute environmental management and balance is essential. NIWA has a key role to play in this in two main areas.
The first is effective and accurate environmental monitoring and
.
Tangaroa
CHAIRMAN & CHIEF EXECUTIVE’S REPORT
Continued investment in capability
The tighter belts were made more bearable by the professionally inspiring addition of some substantial new science facilities and equipment. As well as major upgrades in state- of-the-art laboratory equipment, we invested in the most powerful supercomputer in the southern hemisphere, an IBM p575 POWER6, at a cost of $12.7 million, and strengthened our commitment to oceans research with the first stage of a $20 million upgrade to the capability of our flagship research vessel
NIWA, through its 750 dedicated people, has a well-earned reputation internationally for the calibre and breadth of its science skills, but research and applied science need modern tools as well. For that reason, we were determined to continue the capital investment programme to support our aspiration to remain as one of the most respected environmental science organisations in the world.
As the 2009–10 year progressed, and economic conditions remained tough, the demand for NIWA’s environmental services held firm, and our people and resource capability remained fully utilised.
The final result was revenue of $127.9 million, compared with a budget of $119.2 million, with earnings before interest and taxation (EBIT) of $9.5 million, compared with a budget of $7.09 million.
A change in the treatment of property depreciation announced in the Government’s May budget had a one- off negative tax impact of $2.2 million, resulting in a net surplus after tax of $4.5 million, compared with a budget of $4.86 million.
Contributing to New Zealand’s prosperity
During the year New Zealand was seeing a new emphasis in the role of ‘science and innovation’ with the Prime Minister, John Key, announcing it would be one of the pillars for economic and environmental prosperity for our country.
NIWA ANNUAL REPORT 2010
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NIWA ANNUAL REPORT 2010
Anthony Hull, Australian Antarctic Division
2006
24.4
24.4
$’000
50,374
16,060
39,980
15,706
10,342
8,480
Previous
NZ GAAP
106,414
million
2007
22.6
22.6
$’000
53,418
17,183
43,310
15,843
10,461
9,107
Previous
NZ GAAP
113,911
ted return on average equity’
0.009%
3.5
ds. The transition required the
2007
21.2
14.1
$’000
9,813
9,107
113,911
53,418
17,183
43,310
14,279
lost time from injuries or accidents
data transfers from the Water Resources Archive made to more than 35 agencies in the past year (4000% more than last year)
2008
17.9
12.8
$’000
120,671
55,536
15,127
50,008
14,309
10,095
13,985
9.8
7.1
2009
$’000
9,050
6,011
120,438
58,883
14,121
47,434
21,187
7.0
5.2
2010
$’000
9,550
4,497
127,917
65,646
16,682
45,589
29,985
New Zealand still faces significant economic challenges, because recovery from the global recession is far from over. We expect business conditions to be difficult over the coming year, and will monitor our costs and investments accordingly.
During the past year our staff responded well to the need for cost cutting, yet remained responsive to our customers’ ongoing expectations for high quality, cost-effective research and applied science services. We thank them for their commitment and efforts.
Thank you also to the NIWA Executive Team and Board for responding appropriately to the challenges of the past year, and providing the guidance and support that led the organisation to one of its most successful years ever. The following pages highlight some of this year’s successes.
John Morgan Chief Executive
CHAIRMAN & CHIEF EXECUTIVE’S REPORT
advanced to the stage where the next step is the sharp end of commercialisation – production and marketing.
This year we have also identified and invested in upgrading our capability and commercial focus in three other areas – freshwater, climate forecasting, and ocean development. The first two are well underway, but the third is our newest frontier; applying research to working out how to benefit from, and preserve, a massive natural resource – our oceans. New Zealand is surrounded by the fourth largest economic zone in the world. It is wide and deep, it is the single largest factor in our climate (which affects our land resource), and it is filled with minerals, food, and latent energy generation. New Zealand is already a world leader in oceanography. So the step up in research knowledge, capability, and application is not only smart business, it is very achievable.
Difficult conditions ahead
As confident as we are about the opportunities for NIWA to contribute to the economic and environmental wealth of our country in the years ahead, we are mindful that
NIWA ANNUAL REPORT 2010
Total revenue (includes interest income)
– Public good science
– Ministry of Fisheries
– Commercial and other
Net profit before tax
Net profit after tax
Capital expenditure
Adjusted return on average equity (%)
Return on average equity (%)
The Group changed their accounting policies on 1 July 2007 to comply with New Zealand international financial reporting standar statement of comprehensive income to be translated into NZIFRS for the year ended 30 June 2007 which is shown above. The ‘adjus uses a valuation basis comparable to other Crown Research Institutes.
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2010
2010
2010
2009
2009
2009
2008
2008
2008
2007
2007
2007
Translated
Net surplus
Personnel expenditure
Translated
Translated
Capital expenditure
NIWA ANNUAL REPORT 2010
2007
2007
2007
Previous
NZGAAP
Previous
NZGAAP
Previous
NZGAAP
2006
2006
2006
Previous
NZGAAP
Previous
NZGAAP
Previous
NZGAAP
($) in millions
60
50
40
5
0
0
($) in millions
30
25
20
15
10
($) in millions
8
6
4
2
12
10
1.2
1.6
2008–09
0.9
1.1
2009–10
Net surplus
This financial year the NIWA Group
achieved a net surplus of $4.5 million
(2009: $6.0 million) against a budgeted
net surplus of $4.9 million.
The result reflects NIWA’s success in
generating revenue, balanced against the
relatively high fixed labour component
of our cost structure and our decision
to continue to invest for future growth
(through major capital expenditure)
despite tight economic times.
2010 includes $2.2 million of unexpected
taxation expense from the 2010
Government budget changes.
Dividend
NIWA has a track record of returning
healthy dividends to its shareholder
(the Government of New Zealand) without
compromising investment in scientific
research. Being two years through a major
three-year capital expenditure programme,
NIWA did not make a dividend payment in
2009–10.
Profitability
NIWA continues to be a profitable company.
Our return on equity this year was 5.2%.
On the basis of comparable valuations to
other Crown Research Institutes (CRIs),
NIWA’s return on equity was 7.0%.
NIWA’s return on equity based on
underlying profit (prior to adjustment for
the 2010 Government budget changes for
tax treatment) was 7.6%. These results are
in line with the expectations agreed with
our shareholder.
Liquidity
NIWA has healthy liquidity, with greater
assets than liabilities, in line with
budget expectations.
Current ratio
Quick ratio
.
Tangaroa
“Our financial strength and flexibility enable us to deliver excellent
applied science.” Kate Thomson, Chief Financial Officer
strengthen infrastructure and equipment
to rapidly advance NIWA’s science
improve the work environment and
facilities for NIWA staff
pursue commercialisation opportunities.
Expenditure
Personnel
Our employees are fundamental to
NIWA’s earnings, and that is reflected in
our investment in staff. Even though our
overall staff numbers remained relatively
static during 2009–10, the average
remuneration per staff member continued
to rise at a faster rate than New Zealand
inflation. This is a very deliberate strategy.
In line with the strategy to increase pay to
staff during 2009–10, a salary increase of
3.5% was paid to all staff and additional
monies were spent in specific areas to
more closely align NIWA with market rates.
Furthermore, in 2009–10 each eligible
full-time equivalent staff member received
a one-off, yet enduring, payment as a
profit-share buy-back; this represented
a further 3.6% increase in personnel costs.
Capital
2009–10 was the second of a planned
three-year $60 million capital expenditure
programme designed to:
•
•
•
Despite the recession, the company has
continued this investment. This year we
spent a record $30 million on capital
items, including a high performance
computing facility at NIWA Wellington
and the beginning of the retro-fit work
for RV
Total asset base
Average shareholders’ equity at
30 June 2010 totalled $86.9 million
(2009: $84.5 million). Total average assets
were $121.4 million at 30 June 2010
(2009: $114.6 million).
More information
The audited financial statements of the National Institute of Water & Atmospheric Research Ltd and
Group for the financial year ended 30 June 2010 can be found on pp. 28–57 of NIWA’s Annual Report
2010, or at www.niwa.co.nz/pubs/ar.
This financial summary is not part of NIWA’s audited accounts. All figures here relate to the NIWA
Group as a whole, unless otherwise stated.
On 1 July 2006, the Group changed its accounting policies to comply with the New Zealand
International Financial Reporting Standards (NZ IFRS). Where applicable, we show the figures for
2006–07 both as originally reported (NZ GAAP) and ‘translated’ according to the new standards.
2010
%
41%
14%
11%
6%
10%
10%
9
7%
5%
5%
5%
5%
4%
3%
3%
3%
2%
6%
2009
13%
gy
Freshwater 15%
Fisheries 13%
Oceans 11%
Biodiversity
& Biosecurity
Environmental
Information
Atmosphere
Aquaculture
& Biotechnology
Climate
Coasts
Vessels
Hazards
International
Maori
Development
Product sales
Ener
2008
Foundation for
Research, Science
and Technology
Central
government
Ministry of
Fisheries
Other sales
Capability funding
Local government
Private sector
41%
13%
11%
2007
(includes interest income)
Translated
Revenue by national centre
Revenue by source
15%
10%
2007
14%
Previous
NZGAAP
2%
6%
3%
9%
Total revenue
3%
2006
6%
Previous
NZGAAP
3%
13%
7%
0
4%
80
60
40
20
5%
5%
($) in millions
140
120
100
10%
5%
11%
5%
As I signaled last year, NIWA’s cost
structure is not elastic. Our costs are
rightly bound up in our staff, and we
continue to pursue a policy of lifting
staff remuneration wherever we can.
NIWA is a knowledge-based organisation
competing for highly skilled people in
a global marketplace, and that poses
financial challenges.
Despite this note of caution, however,
NIWA continues to be a high performing
Crown Research Institute. Our financial
strength and flexibility enable us to
maintain and develop the nation’s scientific
capability, and contribute to New Zealand’s
economic improvement by delivering
excellent applied science.
Kate Thomson
Chief Financial Officer
Revenue
Remarkably, in the face of the global
financial crisis, NIWA increased its
revenue. In 2009–10, NIWA’s total revenue
was $127.9 million (2009: $120.4 million).
The proportion of NIWA’s revenue from its
main sources remains reasonably stable.
Science staff had another successful year
in winning public good science funding,
with revenue rising from $58.9 million
in 2008–09 to $65.6 million in 2009–10.
Overall, this represented 51% of NIWA’s
revenue in 2009–10. This comprises
contestable research funding from the
Foundation for Research, Science and
Technology (41%; $53 million), and
capability funding from the Ministry
of Research, Science and Technology
(10%; $12 million).
NIWA’s second largest single source
of revenue was contestable fisheries
research contracts from the Ministry of
Fisheries (13%; $16.7 million). This year,
NIWA recouped approximately $2 million
in lost revenue through a vessel charter
postponed from 2008–09.
The remainder of NIWA’s revenue
(36%; $45.4 million) largely consisted
of commercial consultancy work.
Commercial revenue was down on
last year ($46.8 million).
takes our flagship
Tangaroa
FINANCIAL SUMMARY
total revenue of $127.9 million
(including interest income)
operational expenditure of
$118.2 million
underlying net profit (before one-off
adjustment for Government budget tax
changes) of $6.7 million
net profit after tax of $4.5 million.
Highlights
2009–10 was a tough year for most
businesses. NIWA began the year
cautiously, focusing on staff retention and
maintaining capability for the long haul.
In other areas of operational spend we
trimmed our planned spending because
we expected the financial situation to be
extremely tight. Compared with 2008–09,
we budgeted to earn slightly less (total
budget revenue: $119.2 million) and to
spend slightly more (total budget operating
expenditure: $112.1 million).
This prudent planning, and other revenue
initiatives, however, meant that by the end
of the year we were ahead of budget on
revenue, and almost meeting budget on
profit. Our key financial achievements for
2009–10 were:
•
•
•
•
The unexpectedly high income reflects
NIWA’s success at winning public good
science funding, strenuous efforts by
our senior staff to chase every dollar of
appropriate commercial revenue, and
the ‘timing’ effect of the deferment of a
fisheries research survey from 2008–09
to this year.
Our results are impressive given the
gloomy economic context, but the year
ahead will be a challenge and not an easy
one. During the later half of 2009–10
we began to see the budgets of many
of our key clients, especially in central
government, under pressure. We expect
this to continue into 2010–11.
In addition, we are in the third year
and final year of a $60 million capital
expenditure programme. In 2010–11 the
refit of RV
vessel out of action for almost five months.
The company regards the retro-fit and the
installation of a dynamic positioning system
as essential investments for the future of
New Zealand science, so we are taking a
short-term hit for long-term gain.
NIWA ANNUAL REPORT 2010
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million
NIWA ANNUAL REPORT 2010
189
87
new or improved products, processes, and services
1.6 external requests for information from our National Climate Archive
visits from overseas scientists
ensuring that all operational activities and
assets comply with resource consents,
relevant environmental standards,
biosecurity and biodiversity regulations,
and permitting requirements
ensuring that all sampling and
experiments with live animals comply with
the Animal Welfare Act 1999
ensuring that all material waste
production and water use is minimised and
that we make maximum practical use of
recycling and electronic media
ensuring that energy consumption and
greenhouse gas emissions are compliant
and best cost-effective and efficient
practice for the activities they relate to
making use of environmental initiatives
introduced and supported by local
industries, councils, and community groups
encouraging our employees to take
positive actions to reduce the effects
of their activities on the environment.
helping others meet their environmental
responsibilities by providing objective
advice on the impacts of their activities and
solutions to mitigate those impacts
providing appropriate tools and training
for community groups and others to
implement environmental monitoring and
habitat rehabilitation projects
providing information on the nation’s
unique aquatic biodiversity and threats
to it, so that wise decisions can be made.
Environmental responsibility
NIWA is committed to ensuring that we
take due care of the environment when
carrying out our activities. Whilst our science
contributes strongly to better environmental
outcomes for New Zealand, we do have
environmental effects when conducting that
science, and such effects must be minimised.
We need to encourage others to use our
knowledge to improve the environmental
outcomes they have responsibility for.
Ensuring our activities are
environmentally responsible
We are committed to:
•
•
•
•
•
•
Imparting our knowledge to others to
improve environmental outcomes
We are committed to:
•
•
•
“We are all committed to making a difference.” Dr Barry Biggs, General Manager, Operations
listening to our customers
and understanding their needs
and expectations
proposing and delivering innovative
services and solutions
regularly informing customers of progress
and maintaining a ‘no surprises’ policy
providing deliverables on time, to budget,
and to agreed specifications
maintaining professional and
ethical standards
developing long-term relationships,
so that our customers’ success is
our success.
making fiscally responsible decisions and
maintaining NIWA’s short-and long-term
financial viability
ongoing investment in capital items that
enable us to conduct excellent science and
continue to generate revenue.
using our knowledge to help others derive
economic benefit from the efficient and
effective use of New Zealand’s natural
resources and infrastructure
providing solutions that reduce or
eliminate risks from natural or human-
induced environmental impacts on
economic activities
conducting technical and market
assessments of business opportunities
arising from our science, so that
investment risk is better understood
being open to joint ventures with the
private sector where this encourages
start-up of new economic activity
working collaboratively with other parts
of government to ensure that ‘first
adopters’ are appropriately supported
and that government investment is
aligned and effective.
Working with our customers
We are committed to:
•
•
•
•
•
•
Economic responsibility
NIWA is committed to operating with
financial discipline, so that we retain our
long-term viability and thus meet our core
purpose science responsibilities. NIWA’s
knowledge and expertise provides significant
opportunities for generating economic
benefit for New Zealand, and we have a
responsibility to ensure that it does.
Continuing to be financially viable
We are committed to:
•
•
Generating economic benefit for
New Zealand
We are committed to:
•
•
•
•
•
912
948
230
presentations on technical information and research results
hours of video conference
research collaborations with overseas organisations
- ,
hapu
- ori
- ori through training in
- ori organisations throughout
- ori research capabilityMa
- ori organisations
- ori are better enabled to
remuneration and rewards that fairly
reflect an individual’s contribution to the
organisation’s success
a professional, participative, and collegial
workplace where people are respected and
supported and enjoy being part of.
engaging positively with local communities
in which we are conducting our science,
explaining what we propose to do,
respecting local traditions and culture, and
keeping them informed of our results
supporting science education and
knowledge transfer to communities
(e.g., Kelly Tarlton’s, Science & Technology
Fairs, work placements, supervision of
postgraduates, educating community
environmental groups)
raising public awareness of the value
of science and innovation through public
talks, media interviews and releases,
our website, and sponsoring local
relevant events
transferring our knowledge to
stakeholders in a way that ensures
enduring benefits for communities
being an active member of the ‘science
community’, and collaborating with others
to provide a cohesive science system that
is effective and efficient
contributing to national policy development
and decision making, so that our expertise
benefits all New Zealanders and helps
New Zealand meet its obligations
as a global citizen.
developing and maintaining effective
long-term relationships with iwi,
and other Ma
New Zealand
and capacity within NIWA and in our
partner Ma
sharing our knowledge and skills,
so that Ma
realise the potential of their resources
and exercise kaitiakitanga
increasing the capability of our staff to
interact with Ma
te reo and tikanga.
•
•
Working in the community
We are committed to:
•
•
•
•
•
•
Working in partnership with Ma
We are committed to:
•
• developing
•
•
ORGANISATIONAL RESPONSIBILITY
that research undertaken by NIWA
should be undertaken for the benefit of
New Zealand
that NIWA should pursue excellence in all
its activities
that in carrying out its activities
NIWA should comply with any applicable
ethical standards
that NIWA should promote and facilitate
the application of the results of research
and technological developments
that NIWA should be a good employer
that NIWA should be an organisation that
exhibits a sense of social responsibility
by having regard to the interests of the
community in which it operates and
by endeavouring to accommodate or
encourage those interests when able
to do so.
a safe and healthy working environment
with zero harm
a work-life balance that maintains
job satisfaction
a working environment, including learning
and development opportunities, that
enables people to reach their full potential
suitable equipment, so that staff can do the
job that is asked of them
NIWA is committed to making a positive
contribution to New Zealanders’ well-
being. This commitment is reflected in
a set of guiding principles that cover our
social, economic, and environmental
responsibilities. We are dedicated to
continual improvement of our policies,
practices, and strategies that deliver on
these responsibilities.
NIWA is committed to the principles
of operation stated in Section 5 of the
Crown Research Institutes Act 1992,
which require:
•
•
•
•
•
•
Social responsibility
NIWA is committed to work practices,
operations, and science outcomes that
support its staff and the wider community.
Our approach is one of partnership and
inclusion to ensure that we incorporate
the interests of others in our activities,
communicate our science well, and maximise
societal benefits from our science.
Caring for our people
We are committed to providing:
•
•
•
•
NIWA ANNUAL REPORT 2010
10 |
**
2
2
| 13
Actual
CO
FTE**
FTE**
52.9%
712.2
2008–09
travel to
740 hours
Wellington
than three
15.3 tonnes/
294 kWh/m
14 797 kWh/
103 kg/FTE
all recycling
168 kg/FTE
solid waste
staff – 66%
work using
sustainable
times/week
10 195 tonnes
means more
by
2010
2
2010
with
70%
Target
(NIWA
2009–10
Science)
to below
2006–07
2006–07
by 2012
per year
2003–04
emissions
emissions
levels by
levels by
reduction
reduction
for vessels
to 2006–07
Reduce to
2010 and a
compared
300 hours
in building
June 2010
Reduction
of energy
per FTE by
compared
and paper
Reduce total
and reduce
efficiency of
5 kWh/m
10% by 2012
50% by 2010
levels by 2010,
10%
with 2006–07
Improvement
consumption
with 2006–07
20%
in solid waste
usage by
compared
2
2
CO
FTE
FTE
Actual
47.4%
699.96 650
NIWA ANNUAL REPORT 2010
2009–10
Data not
948 hours
available
No survey
16.9 tonnes/
262 kWh/m
12 860 kWh/
undertaken
11 810 tonnes
) of research 2
Environmental responsibility
We have been improving the energy efficiency of our facilities and
tools for almost a decade. The results have been heartening –
keeping our energy use static even though our organisation’s size
and capability has increased. We may have reached the point where
we have achieved practical maximum energy efficiency. The targets
will now be much harder to reach, especially with the addition of
productive tools such as our new supercomputer.
Environmental responsibility
Total greenhouse gas emissions for
NIWA Science (vehicle fleet, gas,
electricity) and vessels
Total greenhouse gas emissions per
FTE
Hours of video conference
Energy efficiency (kWh/m
buildings (compared to best in
class standard)
Energy consumption per FTE
Recycling and solid waste production
Number of staff using alternative
modes of transport
Number of staff who believe
sustainability is core to the NIWA ethos
Total staff FTEs
(permanent and fixed term)
** Figure adjusted since first reported to enable year-on-year comparisons.
581
563
177
527
144
135
33
349
58
110
537
10
74%
23%
65%
Actual
2008–09
Annual
$3.2 m
2008–09
(80 staff)
275 visits
See pp.8–9
of NIWA’s
No survey
51 visitors
Report 2009
undertaken
organisations
400
400
150
300
100
200
20
260
15
50
50
100
70%
20%
80%
Target
2009–10
in client
$1.5 m
observe an
key sectors
No target set
NIWA based
50% of clients
improvement
relations with
on surveys of
83
624
912
66
449
26
52
20
304
39
230
83%
24%
70%
Actual
Report
longer
2009–10
Data no
collected
269 visits
$3.744 m
this Annual
No survey
undertaken
in 2009–10
87 visitors
See pp.8–9 of
Science outputs and collaboration
(including international connectedness)
Commissioned reports to users*
Presentations on technical
information and research results*
Publications on technical
information and research results*
- papers in trade journals, magazines,
series, or books
- conference papers and abstracts
- research monographs or books
- popular books/articles
- web-based publications
Peer-reviewed articles*
Keynote and plenary presentations*
Client profile (by revenue &
national centre)
Client feedback
Number of representations on
international committees
Number of collaborative formal links
with overseas organisations
Number of international visits/visiting
scientists
Value of international
consultancy contracts
Number of significant
interactions with companies
and industry boards in NIWA’s key
target sectors*
- percentage of significant companies
with which NIWA had meaningful
interactions
- percentage of significant companies
with which NIWA was involved in
decision making
- percentage of significant companies
providing revenue
- number of positions on
industry boards
* Measured for calendar year.
63
2217
Actual
84 500
2008–09
900 000
1000
150
Target
80 000
2009–10
200 000
87
1938
Actual
2009–10
1.6 million
3.5 million
External advice/services
Indicating the extent of the rise of public, institutional, and
commercial interest in climate and water quality matters, demand
for our free online data has had a massive increase.
The targets were raised last year after a tripling from the year
before. But even this adjustment did not sufficiently anticipate
the growth.
This year there were 1.6 million requests for data from our National
Climate Database, 700 000 more requests than last year.
Even more astounding, there were 3.5 million requests for data
from our water resources archive, an increase of over 4000% from
last year.
There was a slight rise in demand for information from our marine
invertebrate collection, from 63 last year to 87 requests this year.
In addition, scientists working with the collection registered
13 550 new samples, modified 21 256 samples, and updated
6836 identifications.
External advice/services
External requests for information from
our nationally significant databases
and collections*
National Climate Database
Water Resources Archive
NZ Freshwater Fish Database
Marine invertebrate collection
and database
* Measured for calendar year.
Science outputs and collaboration
This year, we achieved large increases in mission-critical and
income-producing science outputs.
Commissioned reports continue to climb, up from 581 last year
to 624 this year (seven percent increase). The number of peer-
reviewed articles was also up to over 300.
Our staff gave 912 presentations on technical research, which is
more than double the target. This reflects the effort of NIWA staff
in varied interpretation and application of research and data.
Although we started the year looking to reduce operating costs,
as revenue remained strong we approved more international
travel by our scientists. The result was a total of 269 visits by our
scientists overseas – against a target of 100.
The overseas profile matched an increase in the value of
international consultancy contracts, which climbed to $3.74 million
from $3.2 million last year.
The downside of increased practical application of research
and increased interaction with the wider science and commercial
community has been a reduction in the number of articles for
magazines, trade journals and popular books.
1.2
1.6
9.8%
7.1%
7.5%
7.1%
0.1%
Actual
Actual
2008–09
$120.4M
2008–09
0.9
1.2
7.8%
5.7%
6.2%
5.9%
Target
Target
2009–10
$119.2M
2009–10
An annual
initiatives
allocation of
up to $500k
per year for
sustainability
0.9
1.1
7.0%
5.2%
7.8%
7.4%
Actual
Actual
2009–10
$127.9M
2009–10
$473,806
PERFORMANCE AGAINST STATEMENT OF CORPORATE INTENT
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
to operate as a going concern.
Financial performance measures
NIWA continues to fufill its financial obligations as specified in
Section 5 of the Crown Research Institutes Act 1992. These are:
a)
b)
c)
Revenue
(total including interest income)
Current ratio
Quick ratio
Adjusted return on equity (using valua-
tion basis comparable to other CRIs)
Return on average equity after tax
Return on assets
EBIT margin
All figures in this table comply with the New Zealand International Financial Reporting Standards.
Non-financial performance measures
NIWA has a strong commitment to organisational responsibility,
as outlined on pp.10–11.
Corporate commitment
Despite the worst international and domestic financial conditions
since the 1930s, NIWA considered it essential to our organisation’s
purpose, and to our commercial value, that we stuck to our non-
financial performance goals. In this environment, critical among
these goals is our commitment to staff and to innovation.
Both factors are at the heart of NIWA’s products and services,
and therefore are essential to our revenue.
Corporate commitment
Board reporting and
communication of commitment,
sustainability one of core values
NIWA ANNUAL REPORT 2010
12 |
| 15
NIWA ANNUAL REPORT 2010
ORGANISATIONAL RESPONSIBILITY SUMMARY
Daniel Hayward, NIWA
52
10
3
9
0
0
3
4
0
0
Actual
2008–09
Actual
2008–09
Total –135
-
50
10
0
1
1
2
10
5
0
0
Target
2009–10
Target
2009–10
3
1
71
0
0
12
5
0
0
Actual
2009–10
60 PhD
15 MSc
Actual
2009–10
Total new
Total new
Total new
products – 25
processes – 59
services – 105
Grand total –189
Education
Supervising PhD and MSc students is an important contribution
to the science sector and safeguards our own interest in access
to qualified local staff. Therefore we committed to 75 students this
year, 25 more than the target. This is a healthy sign for the
science community.
Education
PhD and MSc students supervised
Postdocs funded
Scholarships awarded
Number of external training
courses run
Innovation
NIWA integrates innovation into the daily work of all staff, not only
our commercialisation team. This year we created 25 new products,
identified 59 totally new commercially saleable processes, and
created 105 new services to offer to the market.
As we increase our pool of products and processes we hope to
continue with this year’s record number of licensing arrangements.
Innovation
Patents granted*
- in New Zealand
- overseas
Licensing arrangements
entered into*
New or improved
products, processes, and services
Joint ventures or formal associations
Spin-out companies formed*
Spin-off companies formed*
* Measured for calendar year.
27
0
77
59
33 in
6.3%
65%
Actual
536 in
teams
60.5%
NIWA.
0.014
$2.9 m
0.61%
2008–09
research
research
support
179 other
76% see
439 days
Total – 748
working for
themselves
working for
NIWA in 12
positive about
months’ time
5
230
30
10
90
60
12%
5%
90%
400
Target
0.03%
2009–10
Support
Support
20 Fixed
maintain
Term staff
a balance
Technicians
40 Research
110 General
50% of staff
are able to
260 Scientists
Management
10 Postdocs
between their
personal and
working lives
No target set
19
0
55
20
39 in
Actual
529 in
teams
5.34%
0.93%
2009–10
0.009%
research
research
support
$2.75 m
have an
182 other
57.1% of
Average
taken = 7
Total – 750
shows that
a balance
Individual
hours per
employee
to maintain
91% of staff
Latest survey
staff are able
between their
personal and
working lives
Development
Plan in place
training leave
PERFORMANCE AGAINST STATEMENT OF CORPORATE INTENT
Social and cultural responsibility
Under direct pressure and threat from economic conditions
we could have cut permanent staff numbers as many other
New Zealand organisations did. As a caring employer, keeping staff
is one of our highest priorities. So we first chose to cut other costs
– which staff embraced bravely. As a result, staff turnover was only
5.3%. This was less than half our target, less than last year, and
up to four times less than the national average. Given the critical
importance of staff to our capability, it was pleasing that turnover
among ‘key staff’ was less than 1% – against a target of less
than 5%.
Social and cultural responsibility
Staff composition
Achievement of a desirable
work-life balance
Value of financial benefits received
by staff
Staff turnover
- key staff
Number of new jobs created
- main city centre
- rural areas
Staff development
- staff with personal
development plans
- staff days allocated to
personal development
Lost time from injuries/accidents
Number of incident/near-miss reports
Number of noho marae attendees
NIWA ANNUAL REPORT 2010
14 |
| 17
on tuna management, and iwi liaison -
NIWA ANNUAL REPORT 2010
- nanga with hapu
Achievements
Assessed nutrient and ecosystem management tools for improving water quality with Environment Canterbury
Included nutrient mitigation measures in catchment models
Tested novel wetland contaminant treatment methods for urban stormwater
Hydrodynamic model and sedimentation dynamics studies with Auckland and Northland regional councils
Study on sediment dynamics of central North Island coastal harbours completed
Biogeochemical models developed for regions of marine farm growth and diversification
Supported development of hydrodynamic modelling code and ocean colour algorithms
Completed analysis on tides, ocean chemistry and undersea volcanism
Contributed to Crown Minerals gas hydrate study
software upgraded and tested for catch per unit effort, catch at age analysis and random station management
15 papers published in referred journals
Participated in Ministry of Fisheries Aquatic Environment research planning and ecological risk assessments
2 papers published on traditional knowledge and climate change, hazards and resources
3 joint training wa person recruited
Assessment report and business model developed for finfish culture in Tai Tokerau
Iwi estuarine health toolkit and water balance framework for catchment management developed with iwi
New techniques developed for in-situ exposure measurements for transport and domestic environments
Micro-meteorological techniques developed to assess farm greenhouse gas flux
Modelling applied to business-as-usual and oil constrained scenarios
High resolution fluid flow model added to weather model to forecast wind-farm scales
Provide briefings to Ministers and government agencies on climate change science
15-day climate forecasts and evaporation information provided for irrigation modelling
Enhance weather-generator models for use in regional climate projections
Integrated hazard forecast models trialled on new IBM supercomputer
Linked weather and climate models to catchment models to forecast water availability
11 sea-level sites and 3 coastal buoys supported
Prototype system developed and trialled by field teams
New system for web access to metadata developed
Hapuku and kingfish broodstock enhanced
Hapuku growth trials in sea cages completed
Culture feasibility of butterfish assessed
Scalable disease management techniques for juvenile fish culture documented
Researched native fish biosystematics and new pest fish control techniques
Updated information database used to support classification system
Post-graduates supported to research control of two invasive sea squirts
New guides for marine algae and invertebrates and specimen collection access available via the web
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
- ori
- ori
- ori, through the provision of
- tauranga Ma
- ori research capability through supporting publication of Ma
Forecast
Establish project in Canterbury to test new water resource management tools, in association with stakeholders
Improve tools for managing effects of land use on water quality in rural catchments
Support skills in urban contaminant transport and green technology treatment
Initiate project on coastal resource management tools, using the Kaipara Harbour as a test-bed, in association with stakeholders
Support and enhance existing skills in coastal modelling and beach sedimentation continue support for post-doctoral fellows in key core skill areas
Develop skills in environmental studies on co-culture in marine farms
Support core skill bases in ocean modelling and satellite data interpretation
Support the analysis of datasets from previous voyages
Commence collaborative study on Hikurangi margin clathrates
Support the upgrade of core fisheries survey and analytical software tools
Support the publication of fisheries research in international journals
Conduct a gap analysis on fisheries-environment interactions research
Build Ma based research in the scientific literature
Enhance capability in science transfer to iwi through recruitment of appropriate skills in freshwater and ma
Assess opportunities in new species aquaculture as a result of iwi settlements and RMA changes
Strengthen the links between NIWA and Ma support tools, training courses, and targeted research projects
Maintain and develop capability in air quality measurement and modelling
Develop new capability in agricultural emissions measurements to support collaborative research projects
Maintain and enhance energy-scape modelling skills by applying to various nationwide transport scenarios
Develop wind forecasting tools for use in the Electricity Commission’s Wind Integration Project
Support collaboration on climate change advice through the NZ Climate Change Centre
Contribute to Canterbury water resources project (see Freshwater) through developing complementary climate information tools
Build capability in climate statistics and extreme analysis
Maintain and enhance weather, flood, and coastal hazard forecasting capability
Contribute to Canterbury water resources project (see Freshwater) through developing seamless suite of forecasting tools
Maintain sea-level and coastal buoy networks
Develop tools for real-time data quality assurance
Improve provision of metadata on NIWA’s monitoring systems to stakeholders
Maintain finfish broodstock for research and early industry start-up
Begin sea-cage trials on finfish aquaculture
Conduct proof of concept trials on the next finfish species
Develop capability in finfish disease treatment
Maintain freshwater biodiversity and biosecurity capability at risk from declining research time
Support the upgrade of the River Environment Classification to ensure its integrity for ongoing use
Develop skills in control techniques for bio-incursions
Improve web access to data and identification guides
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Dr Rob Murdoch, General Manager, Research
- ori Development
“Capability funding is helping us preserve vital research capability and
build New Zealand’s economic future.”
Areas of nationally recognised expertise
Freshwater
Coasts
Oceans
Fisheries
Ma
Atmospheric Composition
Energy
Climate
Hazards
Environmental Information
Aquaculture & Biotechnology
Aquatic Biodiversity & Biosecurity
Capabilities maintained, enhanced, or developed with Capability Fund, 2009–10
conduct a stakeholder-led collaborative process to recommend
potential reform of the nation’s freshwater management
identify shared goals and outcomes for freshwater
identify the options to achieve these.
New fish health and nutrition trial units
Management of fish health is crucial to the future success of our
aquaculture industry. As NIWA scientists work to breed high-value
native finfish such as hapuku and yellowtail kingfish in captivity,
a key part of that work is keeping them healthy.
NIWA has constructed and commissioned two new research units
to provide future support and R&D capability to the New Zealand
aquaculture sector as it diversifies and develops.
The first is a commercial scale nutrition trials unit at Bream Bay
Aquaculture Park near Whangarei, set up to investigate such things
as growth potential, feed conversion efficiency and nutrition trials to
test new ingredients for aquafeeds.
Our newest unit, a fish health investigation and challenge facility at
our Greta Point campus in Wellington, is designed to safely contain
and study fish health and any issues involving their wellbeing.
To support this unit we have a suite of microbiological and
molecular (including genetic) tools allowing us to isolate and
identify the causes of farmed fish health issues.
Each unit is directly engaged with companies servicing our existing
aquaculture sector and also employed addressing aspects of our
research under our FRST Programmes for High Value Aquaculture
Species, High Performance Aquaculture Broodstock, and
Sustainable Aquaculture programmes.
Land and Water Forum tech transfer
The Government’s Land and Water Forum is a body of almost 60
organisations that hold a stake in issues relating to the interactions
with land and freshwater.
Its mandate is to:
a)
b)
c)
The year-long process that has been run through the Forum has
involved the cultural, environmental, social, and economic aspects
of New Zealand’s freshwater resources and there was an early
recognition that science and knowledge would underpin many of
the discussions.
As the country’s leading research provider in freshwater, NIWA has
played a role as a science advisor to the Forum throughout and
also hosted a multi-agency water science workshop for
Forum members.
%
18
39
15
19
9
939
$’000
1,879
4,092
1,610
2,014
10,534
2008–09
(excl GST)
%
40
35
12
7
6
770
736
$’000
4,951
4,312
1,498
12,267
2009–10
(excl GST)
CAPABILITY FUNDING
Capability funding is provided to Crown Research Institutes (CRIs)
through the Ministry of Research, Science and Technology to
support and enhance long-term research capability.
Each CRI’s capability funding is based on its proportion of the
total government research investment. In 2009–10, NIWA received
$12.27 million (excluding GST) from this source, down from
$10.53 million in 2008–09.
Over the past year we have devoted more funds to supporting our
existing expertise and programmes, while maintaining or trimming
funds in other categories.
Support core skill bases
Advance new areas of
science & innovation
Transfer knowledge
to end-users
Build future
research capacity
Bridge the gap
between research &
commercialisation of
new products
Total
Fisheries – development of the CASAL model
Getting a measure of the size of fish stocks is essential to ensuring
New Zealand’s fishing resources are managed sustainably into the
future.
NIWA’s CASAL is a highly advanced software package developed
to assess New Zealand’s fish stocks. By modelling the age structure
of fish from catch and survey data, CASAL can estimate both the
size and productivity of fish populations, and use these to predict
future stock levels.
And although most computer models can cope only with simplified
data, CASAL’s ‘integrated modelling approach’ allows a much
larger range of observations to be combined within a single model,
producing a better informed stock assessment. CASAL also
explicitly includes assumptions of uncertainty which can be used
to evaluate and compare risks in determining future catch limits.
CASAL is being used for more than a dozen species across
New Zealand, including hoki, hake, ling, oreo, orange roughy,
and Foveaux Strait oysters. It has also been used to assess the
stocks of Antarctic toothfish in the Ross Dependency and to assess
Patagonian toothfish around both Heard Island and South Georgia.
NIWA ANNUAL REPORT 2010
16 |
| 19
EXECUTIVE TEAM
NIWA ANNUAL REPORT 2010
Irene Van de Ven, NIWA
- ori
- ori governance structures and
Chris Mace (Chairman)
Chris Mace is an Auckland-based
businessman. He chaired the Crown Research
Institute ESR in the 1990s and later Antarctica
New Zealand. He was a founding trustee of
the Sir Peter Blake Trust and continues as
a trustee of the Antarctic Heritage Trust.
Chris was awarded a CNZM for services
to Antarctica and the community and was
appointed Chairman of NIWA in July 2009.
Jason Shoebridge
Jason Shoebridge is the Managing Director of
TNS New Zealand. Jason has led consulting
assignments across a range of industries
and disciplines in New Zealand and overseas.
Prior to his consulting career, Jason held
number of senior commercial and financial
management roles internationally and in New
Zealand in large corporates, as well as with
an international chartered accounting firm.
Craig Ellison (Deputy Chairman)
Craig Ellison is a director on several boards,
including New Zealand Trade & Enterprise,
as well as chairing the New Zealand Seafood
Standards Council. Dunedin born and bred,
Craig now lives in Wellington but also has
commercial interests in Australia. He was
deeply involved in the settlement of Ma
commercial fisheries claims and maintains an
interest in Ma
resource management.
John Morgan (Chief Executive)
John joined NIWA as CEO in April 2007.
He has extensive senior executive and
governance experience in the science sector,
including as CEO of AgriQuality Ltd, Executive
Director of Orica New Zealand Ltd, and
Chairman of New Zealand Pharmaceuticals
Ltd. John is passionate about the role science
can play in contributing to the prosperity of
New Zealand’s economy and environment.
John is also currently Chairman of Science
New Zealand.
Dennis Cairns
Dennis Cairns farms a hill property in
Southland. He has held management
positions in the mercantile and meat
industries and currently holds directorships
on several private companies. Dennis was
Board member and Chair of the Southland
District Health Board from 2001 until 2008.
He was also an executive member and Chair
of DHBNZ before joining the NIWA Board.
Helen Robinson
Helen is the Global Managing Director,
Environmental Markets, for Markit Group
Ltd, a financial services organisation
headquartered in London. Helen has led
many technology companies over the past
20 years, including as CEO of Microsoft,
NZ and as Vice President of APAC, Pivotal
Corporation. Her directorships include NZ
Business Excellence Foundation, Auckland
Plus, and MGL Services NZ.
BOARD OF DIRECTORS
Dr Wendy Lawson
Dr Wendy Lawson is a glaciologist with a
particular interest in the impacts of climate
change and Earth systems. She has more
than 25 years of remote field science
experience in Arctic, Antarctic, and alpine
regions. She is Head of the Department
of Geography and Professor at the
University of Canterbury, and serves on
the Board of the Antarctic Research Centre
at Victoria University.
Ed Johnson
Ed Johnson, FInstD, is Chair of Fulton Hogan
Ltd, Goldpine Industries Ltd, Indevin Ltd and
Port Marlborough New Zealand Ltd, and a
director of several entities. He retired as
Chairman and CFO of Shell New Zealand
in 2002. In 2001, Ed became the inaugural
Honorary Fellow of Massey University’s
Centre for Business and Sustainable
Development and was made a Fellow of the
New Zealand Institute of Directors in 2003.
NIWA ANNUAL REPORT 2010
18 |
| 21 | 21
h’
ent.
eral,
easonable
Institute of
NIWA ANNUAL REPORT 2010
Ellison
Ellison
Craig
Director
Craig
Director
Mace
Mace
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-lengt
basis. Any potential conflict is recorded and minuted in Board meetings.
Directors’ remuneration
Details of the directors’ remuneration are provided in the remuneration of directors section of the corporate governance statem
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, disposed or had recorded dealings of any equity securities of the NIWA Group.
Directors’ loans
There were no recorded loans by the NIWA Group to any director.
The Board of the company is responsible for the preparation of these financial statements and the judgements used therein.
The Board of the company is responsible for establishing and maintaining a system of internal controls designed to provide r
assurance as to the integrity and reliability of financial reporting.
In the opinion of the Board, these financial statements fairly reflect the financial position and operations of the National
Water & Atmospheric Research Ltd and Group for the year ended 30 June 2010.
Auditors
In accordance with Section 21(1) of the Crown Research Institutes Act 1992, the auditors, Deloitte on behalf of the Auditor-Gen
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 types recorded in the interests register for the year.
The directors are pleased with the state of affairs of the NIWA Group.
For and on behalf of the Board:
Christopher
Chairman
27 August 2010
Statement of responsibility
The following statement is made in accordance with Section 155 of the Crown Entities Act (2004).
1.
2.
3.
Christopher
Chairman
27 August 2010
1
7.1
9.8
7.1
7.5
1.2
1.6
36
74
2009
$’000
9,050
6,011
84,465
up)
Actual
120,438
111,353
114,559
d
range
d private
f $4.9 million.
lion at
2
SCI
5.9
7.8
5.7
6.2
0.9
1.2
36
73
2010
$’000
6,517
4,862
119,234
112,141
114,827
84,991
61
7.4
7.0
5.2
7.8
0.9
1.1
44
72
2010
9,550
4,497
Actual
$’000
127,917
118,240
121,374
86,890
REPORT OF THE DIRECTORS TO THE SHAREHOLDERS
The directors take pleasure in presenting the National Institute of Water & Atmospheric Research Ltd (NIWA) and Group (NIWA Gro
Annual Report for the financial year ended 30 June 2010.
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
of other public and private sector customers. Internationally, services were provided by NIWA and its subsidiaries to public an
sector customers predominantly in the USA and Australia.
Results
This financial year the NIWA Group achieved a net surplus of $4.5 million (2009: $6.0 million) against a budgeted net surplus o
This was achieved on a turnover of $127.9 million (2009: $120.4 million), against budgeted revenue of $119.2 million.
Average shareholders’ equity at 30 June 2010 totalled $86.9 million (2009: $84.5 million). Total average assets were $121.4 mil
30 June 2010 (2009: $114.6 million).
Group actual performance versus Statement of Corporate Intent (SCI)
Years ended 30 June
Total revenue (includes interest income)
Operating expenses, depreciation, and amortisation
Operating surplus before tax
Net surplus
Average total assets
Average shareholders’ funds
Profitability
EBIT margin (%) (EBIT/revenue)
Adjusted return on average equity after tax (%) (net surplus/adjusted average equity)
Return on average equity after tax (%) (net surplus/average equity)
Return on assets (%) (EBIT/average total assets)
Liquidity and efficiency
Current ratio
Quick ratio
Financial leverage
Debt to average equity (%)
Gearing (%)
Proprietorship (%) (shareholders’ funds/total assets)
Donations
Donations of $8,677 were made during the year (2009: $8,180).
Dividends
No dividend payments (2009: $5.6 million) were made to the Government of New Zealand (the Crown) as the sole shareholder.
Directors
The appointments of Christopher Mace and Jason Shoebridge to the Board of Directors on 1 July 2009 were the changes to the Boar
of Directors for the year ended 30 June 2010.
NIWA ANNUAL REPORT 2010
20 |
1
1
1
1
1
1
1
√
√
√*
√
| 23 | 23
Committee
Remuneration
Unidata Pty Ltd
√*
√
√
√
√
√
√
5
5
5*
5
Audit
Committee
NIWA ANNUAL REPORT 2010
Research Institute
NIWA Environmental
12
11
11
10
12
12
12
Board
√*
Pty Ltd
NIWA Australia
Appointment
term expires
30 June 2011
30 June 2011
30 June 2011
30 June 2012
30 June 2012
30 June 2012
30 June 2013
√*
√√
√√
√√
√√
√√
√√
Date of
NIWA Vessel
1 July 2008
1 July 2008
1 July 2006
1 July 2009
1 July 2009
1 July 2007
appointment
9 June 2005
Management Ltd
1
2
3
2
Membership and attendance
Director
Director representing minority interest. Management members of the parent company. Management member of Unidata Pty Ltd.
Ed Johnson
Dennis Cairns
Helen Robinson
Wendy Lawson
Christopher Mace (Chairman)
Jason Shoebridge
Craig Ellison (Deputy Chairman)
* The Chairman is an ex-officio member of the Audit Committee.
Membership of subsidiary Boards
Director
Christopher Mace
Craig Ellison
Dennis Cairns
Ed Johnson
Helen Robinson
Jason Shoebridge
Wendy Lawson
Bryce Cooper
David Saunders
Kate Thomson
Matt Saunders
* Chairman.
1
2
3
We are committed to ensure that best practice governance
principles and ethical standards are upheld and applied consistently.
This governance statement outlines the main corporate governance
practices as at 30 June 2010. Unless otherwise stated, they reflect
the over-arching practices in place throughout the financial year
ending on that date.
Key elements of effective governance
An effective board has a balance of independence, skills,
knowledge, experience, and perspectives.
Board composition and activity
Shareholding Ministers appoint Board members under the Crown
Entities Act 2004 and the Board are required to meet the same
obligations as directors of private sector companies.
Board directors are selected and appointed on the basis of their
skills and experience. Additionally the balance of these skills and
experience is required to match the strategic direction and needs
of the NIWA Group.
Appointment of directors is for a term of up to three years.
Directors may be reappointed for a second term of up to three
years, although this is not automatic, with Ministers basing their
decision on the Group’s needs. Both the Chair and Deputy Chair
are appointed by the Shareholding Ministers.
During the financial year ended 30 June 2010, the Board comprised
seven independent non-executive directors (including the Chair).
The directors’ profiles are presented on page 18. Board meetings
are held monthly. The Board met formally twelve times during the
financial year.
with the
with an emphasis
which include a delegated
that promotes transparency, fairness,
to promote our responsible ethical
strategic approach and direction
external auditors
that has a balance of independence, skills,
policies and procedures
effective
audit and legislative committee
disclosure and effective communication
code of conduct
internal control framework
management of risk
enforced
effective board
proactive
remuneration committee
sound
relevant
knowledge, experience, and perspectives
input to the company’s
on internal audit
and reasonableness;
behaviour
authority framework
public, our shareholders, and our stakeholders.
CORPORATE GOVERNANCE STATEMENT
Approach and principles to corporate governance
We strongly believe as a company and as a Board of Directors
(‘the Board’) that corporate governance is of fundamental
importance no matter what the economic or financial climate.
Doing the right things for our shareholders and stakeholders
by applying our highest standards to ensure compliance is not
an exercise in ticking boxes.
We strive for continuous improvement to ensure we achieve
full and fair transparent disclosure to the public, stakeholders,
and shareholders so they are provided with relevant, reliable,
and complete information.
Our corporate governance deals with how the NIWA Group is
directed and controlled to ensure good ethical behaviour and
promote shareholders’ interests in a sustainable way. In particular,
corporate governance applies to the role of the Board and the need
to ensure a framework of effective accountability and transparency.
Our key elements of effective governance are:
• an
•
• a
• a
• a
• a
• clear,
• effective
• independent,
• transparent
The NIWA Group is a Crown Research Institute, established under
the terms of the Crown Research Institutes Act 1992 and the Public
Finance Act 1989, and all shares are held by the Minister of Finance
and the Minister of Research, Science and 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.
For Crown Research Institutes, the Crown Ownership Monitoring
Unit (COMU) issues an ‘Owner’s expectations manual’ to assist
boards to operate efficiently in their roles and to clarify their
responsibilities. In particular it takes account of expectations of
the board members of a company owned by the Crown, as opposed
to private or publicly listed companies. The manual focuses on
governance, reporting, and their role and responsibilities in general
rather than operational activities.
NIWA ANNUAL REPORT 2010
22 |
36
17
12
6
3
3
2
3
4
–
–
1
1
–
–
1
1
1
2009
| 25 | 25
35
23
14
10
3
3
5
2
3
4
2
–
–
1
1
–
2
1
2010
NIWA ANNUAL REPORT 2010
compliance with laws and regulations
that all transactions are properly accounted for to allow the
preparation of the financial statements
that assets are safeguarded against improper or unauthorised use.
The numbers of employees (not including directors) whose
total remuneration exceeded $100,000 is:
Group
$
100,000–109,999
110,000–119,999
120,000–129,999
130,000–139,999
140,000–149,999
150,000–159,999
160,000–169,999
170,000–179,999
180,000–189,999
190,000–199,999
200,000–209,999
210,000–219,999
220,000–229,999
230,000–239,999
250,000–259,999
260,000–269,999
270,000–279,999
550,000–559,999*
* Chief Executive Officer’s remuneration band.
A sound internal control framework
An internal control framework is essential to ensure that there are
controls in place to mitigate significant business risk. The internal
control framework is embedded across the NIWA Group and is clearly
understood and reinforced by management through the documented
policies and procedures which are regularly reviewed.
The framework is effective in ensuring:
•
•
•
–
45
36
36
36
36
–
72
36
2009
$’000
72
45
36
36
–
36
36
–
36
2010
$’000
we have the right people
we produce high quality science
we challenge and reward staff.
Primarily the annual review is a tool to help boards to analyse their
performance and identify any areas where performance could
be improved. The review assists to provide input into the Chair’s
succession planning and identification of director training needs.
Boards are additionally reviewed as a whole through a set of
performance measures on an ongoing basis.
Directors’ remuneration received or due and receivable
during the year is:
Parent
Directors of the National Institute of Water & Atmospheric Research Ltd
Christopher Mace (Chairman) (appointed 1 July 2009)
Craig Ellison (Deputy Chairman)
Dennis Cairns
Ed Johnson
Graham Hill (resigned 30 June 2009)
Helen Robinson
Jason Shoebridge (appointed 1 July 2009)
Sue Suckling (resigned 30 June 2009)
Wendy Lawson
No fees were paid in respect of directors of the subsidiaries NIWA
Vessel Management Ltd, NIWA Environmental Research Institute,
NIWA Australia Pty Ltd, NIWA Natural Solutions Ltd, EcoConnect Ltd,
and Unidata Pty Ltd, other than those shown above.
Remuneration of employees
The NIWA Group aims to provide a skills-influenced remuneration
system that rewards people appropriately, recognising contribution
to the business and individual performance.
Our remuneration system supports our business plan and values:
•
•
•
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.
audit
reporting.
independence – all of the members are independent of the
executive team, therefore they are able to provide objective and
impartial advice
competence – the members have the required skills and experience
to serve on the committee
clarity of purpose – the role and purpose of the committee is clearly
defined and linked to risk management
open and effective relationships – the committee believes
in and encourages open and transparent communication with
all management, employees, stakeholders, and internal and
external auditors.
legislative and regulatory compliance
the risk management framework
the internal control environment
internal audit and assurance
A proactive audit and legislative committee with an
emphasis on internal audit
Audit and Legislative Compliance Committee
(‘Audit Committee’)
The Audit and Legislative Compliance Committee is a sub-
committee of the Board. During the financial year, the Audit and
Legislative Compliance Committee comprised three members of
the Board and met formally five times with the NIWA Chair as an
ex-officio member.
Four main principles underlie the effectiveness of the
Audit Committee:
•
•
•
•
The core responsibilities of the Audit Committee include:
•
•
•
•
• external
• financial
Our Audit Committee is enhanced by regular scheduled meetings,
with prearranged dates and written agendas, papers, and minutes
which incorporate an action list.
A Remuneration Committee that promotes transparency,
fairness, and reasonableness
The Remuneration Committee is comprised of all Board members.
The Remuneration Committee reviews the remuneration policies
applicable to the Chief Executive Officer on an annual basis and
makes recommendations on remuneration packages and terms
of employment to the Board. The Remuneration Committee also
ratifies the remuneration packages of the direct reports to the
Chief 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.
objectives
risks
reviewing and approving major strategies for achieving objectives
reviewing and approving capital investments
ensuring compliance with statutory requirements
providing leadership in the relationship with key stakeholders
determining the overall policy framework within which the business
is conducted
establishing appropriate governance structures
monitoring management’s performance with respect to
these matters.
CORPORATE GOVERNANCE STATEMENT
Responsibilities of the Board and management
The Board of the NIWA Group are responsible for managing the
business and the affairs of the Group as stated within the
Companies Act.
The NIWA Group is a Crown entity and the Board differs in some
respects from a board of a privately owned company. For example,
all operation decisions must be in accordance with the company’s
SCI.
The responsibilities of the Board include but are not limited to:
• establishing
•
• managing
•
•
•
•
•
•
The Board delegates management of the day-to-day affairs and
management responsibilities of the NIWA Group to the Chief
Executive Officer (CEO) who, with the support of his executive team,
delivers the strategic direction and goals determined by the Board.
A formal delegations authority framework establishes the
operational and expenditure delegations within which the CEO must
operate.
Director development
A sector-specific induction programme is conducted for all new
directors by COMU. A formal induction into all aspects of the NIWA
Group is provided by the Chair and management representatives.
All directors are responsible for keeping up to date their knowledge
of the legal and professional duties of Board members.
Ongoing professional development is agreed between the directors
and the Chair as part of the annual review process.
Directors’ insurance
The NIWA Group has arranged policies for directors liability
insurance which, with a deed of indemnity, ensures that generally
directors will incur no monetary loss as a result of lawful actions
undertaken by them as directors. Certain actions are specifically
excluded; for example, incurring penalties and fines which may be
imposed in respect of breaches of the law.
NIWA ANNUAL REPORT 2010
24 |
| 27 | 27
NIWA ANNUAL REPORT 2010
Governance achievements
The internal audit function has grown from its infancy when it was
first introduced in 2007–08 to delivering four robust and clear
reports to the Audit Committee throughout 2009–10.
A thorough and robust banking facility review was completed
during the 2009–10 year with a full tender process conducted.
This resulted in a preferred institution being awarded NIWA’s
banking arrangements and provided NIWA with assurances that
our expectations and requirements would continue to be exceeded.
During the 2009–10 year the delegated authorities document was
completely revised, reviewed, and reconfigured to ensure the
document met NIWA’s requirements for all revenue, expenditure,
and contract authorisation.
Our employees are the core ingredient of NIWA’s success.
Interactions between staff and the Board are valuable in assisting
the Board to remain up to date with our science, people, and
activities. By holding Board meetings and luncheons at NIWA
Group’s various locations, the Board’s visibility has increased.
Transparent disclosure and effective communication with
the public, our shareholders, and our stakeholders
Effective communication underpins the trust relationship among
the shareholders, the Board, management, and stakeholders.
As expressed in the owner’s expectations manual, all Crown entities
should engage with stakeholders to assist with the Government’s
industrial, environmental, and social development objectives,
particularly for science and innovation to raise productivity and
add value. To achieve this we build on existing knowledge, develop
new knowledge, and transfer this knowledge for the benefit of
New Zealand.
Details of how the NIWA Group transfers our knowledge to
the public, end users, and our peers, are contained within the
non-financial performance measures section. 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 for the
performance against the SCI to Parliament.
The NIWA Group reports quarterly against its SCI to the COMU,
yearly to Treasury, and half-yearly and yearly reports are generated
for shareholders and stakeholders.
The NIWA Group reports annually to Parliament on its performance
in its half-yearly and annual report. 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.
Effective management of risk
Risk-averse governance is not necessarily good governance.
Effective risk management is the key to success. Each director
requires a clear understanding of the current and potential risks
the NIWA Group may be exposed to, especially in the ever-changing
economic environment.
Risk management has been incorporated into the normal business
processes of the NIWA Group, with practices such as business
planning and budgeting, operational management, and project
management. Appropriate processes are regularly verified by the
Board to identify and manage potential and relevant risks.
The Board reviews the delegations authority framework which sets
authorities for operational and expenditure delegations, including
authority for undertaking treasury activities of the NIWA Group.
Regardless of the terms of the delegated authority, ultimate
responsibility rests with the Board.
The Audit Committee receives reports on internal audit and risk
management reviews. The committee also meets with the external
auditors to discuss findings and management’s comments from the
annual audit.
Independent, effective, external auditors
The appointment of auditors to conduct statutory audit work,
and the annual audit fees, are approved annually by the
Auditor-General.
The Board and the auditors are jointly responsible for ensuring that
the audit is conducted with independence, integrity, and objectivity.
Rotation of audit partners promotes independence and objectivity.
Audit partners are rotated every six years; the 2007–08 and 2008–09
years had an audit partner change.
To ensure the independence of the external auditors, NIWA does not
consult the external auditor for tax or management related services
and takes care not to make use of the external auditors for any
work which they may need to evaluate as part of the external audit.
perform to the best of their ability, and be committed to a high
quality of work performed in a safe manner
take the initiative and be creative in resolving problems, seeking
improved productivity, and responding to opportunities within areas
of responsibility
make decisions and be responsible for those decisions and the
actions that flow from them
be supportive of their work teams
treat staff and equipment with care and respect.
CORPORATE GOVERNANCE STATEMENT
A relevant code of conduct to promote our responsible
ethical behaviour
The reputation and standing of the NIWA Group is determined
to a large degree by public perception of the conduct of its staff
(including the Board and management). We promote the highest
standards of integrity, discretion, and ethical conduct.
The NIWA Group encourages staff to:
•
•
•
•
•
It is expected that managers will guide staff in accordance with
management’s philosophy, policies, and standards.
In making decisions about conflicts of interest, management
are guided by the concepts of integrity, honesty, transparency,
openness, independence, and good faith. Situations may not be
clear-cut, and judgement is exercised when necessary on a case-
by-case basis.
Both employees and directors must disclose any financial,
professional, or personal interests (direct or indirect) that may
create a conflict with the NIWA Group’s interests. We expect our
employees and directors to be open and honest with disclosures.
Clear, enforced policies and procedures which include
a delegated authority framework
The effectiveness of the NIWA Group’s governance system
relies on the defined ‘rules’ in which the NIWA Group operates.
A comprehensive set of policies and procedures is located on our
intranet which all employees have access to. It is important that
these 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.
NIWA ANNUAL REPORT 2010
26 |
23
–
| 29 | 29
(32)
Total
equity
6,011
6,034
4,497
4,465
Total
4,119
4,119
1,394
1,394
84,273
(5,649)
84,658
84,658
89,123
equity
75,924
(5,649)
74,394
74,394
75,788
––
26
–
23
23
–
49
49
–
–
(32)
(32)
17
4,119
4,119
1,394
1,394
51,125
(5,649)
49,595
49,595
50,989
Retained
earnings
Foreign currency
translation reserve
NIWA ANNUAL REPORT 2010
–
–
–
–
–
Share
capital
24,799
24,799
24,799
24,799
ancial statements.
49
18
–
18
–
67
67
27
–
27
–
94
interest
8
8–
Non-controlling
Notes
–
–
–
5,993
5,993
4,470
4,470
59,399
(5,649)
59,743
59,743
64,213
Retained
earnings
–
–
–
–
–
–
–
–
Share
capital
24,799
24,799
24,799
24,799
8
8
Notes
National Institute of Water & Atmospheric Research Ltd and Group
STATEMENT OF CHANGES IN EQUITY for the year ended 30 June 2010
Group in thousands of New Zealand dollars
Balance at 1 July 2008
Profit for the year
Translation of foreign operations
Total comprehensive income
Dividends to equity holders
Balance at 30 June 2009
Balance at 1 July 2009
Profit for the year
Translation of foreign operations
Total comprehensive income
Dividends to equity holders
Balance at 30 June 2010
Parent in thousands of New Zealand dollars
Balance at 1 July 2008
Profit for the year
Total comprehensive income
Dividends to equity holders
Balance at 30 June 2009
Balance at 1 July 2009
Profit for the year
Total comprehensive income
Dividends to equity holders
Balance at 30 June 2010
The accompanying ‘Notes to the financial statements’ are an integral part of, and should be read in conjunction with, these fin
–
–
–
–
2009
190
(417)
481
(11)
470
5,570
6,040
4,119
4,119
4,119
4,119
4,119
4,119
Parent
Actual
48,349
10,534
14,121
39,786
(9,985)
(1,921)
112,980
(52,144)
(44,864)
(97,008)
15,972
13
–
–
–
(92)
62
2010
(953)
154
5,311
5,372
1,394
1,394
1,394
1,394
1,394
1,394
Parent
Actual
53,379
12,267
16,682
37,641
(1,660)
(2,319)
119,982
(54,610)
(47,496)
17,876
(11,612)
(102,106)
–
193
23
18
18
(464)
490
(35)
455
Group
2009
Actual
48,349
10,534
14,121
46,751
8,595
9,050
(3,039)
6,011
6,034
5,993
6,011
6,016
6,034
ancial statements.
119,948
(57,345)
(41,989)
(99,334)
20,614
(11,555)
–
–
–
–
(235)
(576)
(576)
(47)
(47)
Group
2010
7,093
6,517
(1,655)
4,862
4,862
4,909
4,862
4,909
4,862
Budget
51,760
12,267
16,018
39,189
119,234
(57,874)
(39,604)
(97,478)
21,756
(14,428)
13
55
27
27
(984)
182
(127)
(32)
Group
2010
Actual
53,379
12,267
16,682
45,394
9,495
9,550
(2,838)
(2,215)
4,497
4,465
4,470
4,497
4,438
4,465
127,735
(60,959)
(42,623)
24,153
(13,674)
(103,582)
4
5
16
18
6
7
7
Notes
in thousands of New Zealand dollars
Revenues and other gains
Public good science and technology
Contract funding
Capability Fund
Ministry of Fisheries
Commercial
Other gains
Total income
Operating expenses
Employee benefits expense
Other expenses
Profit/(loss) before interest, income tax, depreciation, and amortisation
Depreciation and impairment
Amortisation
Profit/(loss) before interest and income tax
Interest income
Finance expense
Net interest and other financing income
Profit/(loss) before income tax
Income tax credit/(expense)
Income tax credit/(expense) relating to the 2010 Budget changes
Profit/(loss) for the period
Other comprehensive income
Foreign currency translation differences for foreign operations
Total comprehensive income for the period
Profit/(loss) attributable to:
Parent interest
Non-controlling interest
Profit for the period
Total comprehensive income attributable to:
Parent interest
Non-controlling interest
Total comprehensive income for the period
The accompanying ‘Notes to the financial statements’ are an integral part of, and should be read in conjunction with, these fin
NIWA ANNUAL REPORT 2010
National Institute of Water & Atmospheric Research Ltd and Group
STATEMENT OF COMPREHENSIVE INCOME for the year ended 30 June 2010
28 |
–
–
28
–
| 31 | 31
2009
–
1,022
2,094
1,360
1,033
4,686
1,195
Parent
Actual
68,631
12,709
314
82,676
18,190
28,586
111,262
–
69
1
–
27
2010
803
703
406
1,401
1,194
4,048
1,578
Parent
Actual
76,193
12,709
90,478
16,309
24,963
115,441
NIWA ANNUAL REPORT 2010
37
–
–
–
–
314
886
Group
2009
–
Actual
84,287
3,099
1,380
4,686
2,264
84,638
18,472
30,787
ancial statements.
115,425
–
–
–
–
–
–
–
–
Group
2010
1,000
2,141
4,098
2,282
Budget
95,798
95,798
18,175
27,696
123,494
6
–
1
–
–
803
69
27
Group
2010
Actual
99,552
2,396
16,510
1,299
4,138
2,549
100,431
26,919
127,350
16
18
19
21
15
22
23
15–––
Note
Ellison
Craig
Director
Mace
intangibles
National Institute of Water & Atmospheric Research Ltd and Group
STATEMENT OF FINANCIAL POSITION as at 30 June 2010
in thousands of New Zealand dollars
ASSETS
Non-current assets
Property, plant, & equipment
Identifiable
Investments
Receivables
Prepayments
Forward exchange derivatives
Intercompany
Total non-current assets
Current assets
Cash and cash equivalents
Receivables 21
Prepayments
Taxation receivable
Uninvoiced receivables
Inventory
Intercompany
Forward exchange derivatives
Total current assets
Total assets
The accompanying ‘Notes to the financial statements’ are an integral part of, and should be read in conjunction with, these fin
For and on behalf of the Board:
Christopher
Chairman
27 August 2010
–
2009
638
650
–
–
–
2,223
2,861
9,113
7,086
1,237
5,996
9,925
Parent
Actual
24,799
49,595
74,394
74,394
–
34,007
111,262
–
–
–
2010
625
643
3,732
4,357
8,874
5,528
5,905
1,277
6,668
6,303
Parent
Actual
24,799
50,989
75,788
75,788
98
35,296
115,441
67
–
260
726
650
Group
2009
–
–
Actual
24,799
59,792
3,542
7,094
1,269
6,646
84,591
84,658
4,528
10,580
–
26,239
ancial statements.
115,425
2
––––
–
6–––
–
–
285
827
Group
2010
7,300
3,224
9,538
4,976
3,86
8,564
–
–
Budget
24,799
60,113
84,912
84,914
11,636
26,944
123,494
94
–
–
–
–
279
727
98
Group
2010
Actual
24,799
64,230
5,026
5,513
5,905
1,333
7,328
1,525
89,029
89,123
6,032
10,493
32,195
127,350
9
10
11
12
13
14
14
11
12
12
15
Note
in thousands of New Zealand dollars
EQUITY AND LIABILITIES
Equity
Share capital
Equity reserves
Shareholders’ interest
Non-controlling interest
Total equity
Non-current liabilities
Unsecured loans
Borrowings
Provision for employee entitlements
Deferred tax liability
Forward exchange derivatives
Total non-current liabilities
Current liabilities
Payables and accruals
Revenue in advance
Borrowings
Overdraft
Provision for employee entitlements
Accrued employee entitlements
Taxation payable
Intercompany
Forward exchange derivatives
Total current liabilities
Total equity and liabilities
The accompanying ‘Notes to the financial statements’ are an integral part of, and should be read in conjunction with, these fin
NIWA ANNUAL REPORT 2010
National Institute of Water & Atmospheric Research Ltd and Group
STATEMENT OF FINANCIAL POSITION as at 30 June 2010
30 |
| 33 | 33
NIWA ANNUAL REPORT 2010
New Zealand Improvements to International Financial Reporting Standards
2010 (effective for accounting periods beginning on or after 1 July 2010, and 1
January 2011).
whether total contract revenue could be measured reliably
the probability that economic benefits associated with the contract will flow
to the Group
whether the contract costs to complete the contract and the stage of contract
completion at balance date could be reliably measured
whether contract costs attributable to the contract can be clearly identified
and measured reliably so that the actual contract costs incurred can be
compared with prior estimates.
Basis of consolidation
•
All standards and interpretations above are expected to be initially applied when
they become mandatory.
With the exception of NZ IFRS 9, the directors anticipate that the above Standards
and Interpretations will have no material impact on the financial statements
of the Group or Parent in the period of initial application. It is likely that the
changes arising from NZ IFRS 9 will affect the recognition and measurement,
and classification of amounts recognised in the Group and Parent financial
statements. However, it is not practical to provide a reasonable estimate of that
effect until a detailed review has been completed.
Accounting judgements and major sources of estimation uncertainty
In the application of the Group’s accounting policies, the directors are required
to make judgements, estimates, and assumptions about the carrying amounts
of assets and liabilities that are not readily apparent from other sources. The
estimates and associated assumptions are based on historical experience and
other factors that are considered to be relevant. Actual results may differ from
these estimates.
Judgements in applying accounting policies
The following are the judgements, apart from those involving estimations that
the directors have made in the process of applying the entity’s accounting policies,
and that have the most significant effect on the amounts recognised in these
financial statements.
Revenue recognition
In determining the revenue to be recognised in the year from the rendering
of services, the directors have exercised their judgement in respect of the
percentage of completion of contracts as outlined in policy (b).
In making their judgement, the directors considered:
•
•
•
•
Following review of the Group’s contract transactions the directors are satisfied
that the above criteria have been met and the recognition of the revenue in the
current year is appropriate, in conjunction with the recognition of an appropriate
uninvoiced receivables/revenue in advance.
Major sources of estimation uncertainty
The following are the key assumptions concerning the future, and other major
sources of estimation uncertainty at 30 June 2010, that have a significant risk of
resulting in a material adjustment to the carrying amounts of assets and liabilities
within the next financial year.
Useful lives of property, plant, and equipment
As described in policy (l), the Group reviews the estimated useful lives of property,
plant, and equipment at the end of each annual reporting period.
Credit, interest, and currency sensitivity
As described in note 26, the Group is subject to credit, interest, and currency risks
which will impact upon the Group’s assets and liabilities. The note details how the
Group reduces this risk exposure.
Significant accounting policies
The following significant accounting policies have been adopted in the preparation
and presentation of the financial reports and have been applied consistently to all
periods, unless otherwise stated.
(a)
The Group financial statements incorporate the financial statements of the
company and entities (including special-purpose entities) controlled by the
company (its subsidiaries). Control is achieved where the company has the power
to govern the financial and operating policies of an entity so as to obtain benefits
from its activities.
improvements to New Zealand equivalents to International Financial
Reporting Standards 2009 (effective for accounting periods beginning
on or after 1 January 2010)
amendments to NZ IFRS 2 ‘Share-Based Payment’ – group cash-settled
share-based payment transactions (effective for accounting periods beginning
on or after 1 January 2010)
amendments to NZ IAS 32 ‘Financial Instruments: Presentation’ –
classification of rights issues (effective for accounting periods beginning
on or after 1 February 2010)
amendments to NZ IAS 24 ‘Related Party Disclosures’
(effective for accounting periods beginning on or after 1 January 2011)
New Zealand IFRS 9 ‘Financial Instruments’ (effective for accounting periods
beginning on or after 1 January 2013)
New Zealand IFRIC 19 ‘Extinguishing Financial Liabilities with Equity
Instruments’ (effective for accounting periods beginning on or after
1 July 2010)
amendments to NZ IFRIC 14 ‘Prepayments of a Minimum Funding
Requirement’ (effective for accounting periods beginning on or after
1 January 2011)
National Institute of Water & Atmospheric Research Ltd and Group
NOTES TO THE FINANCIAL STATEMENTS as at 30 June 2010
1. Reporting entity
The National Institute of Water & Atmospheric Research Ltd (NIWA) and Group
is a profit-oriented company registered in New Zealand under the Companies
Act 1993.
The consolidated (or ‘Group’) financial statements comprise NIWA (the ‘parent
company’), its subsidiaries, and the Group’s interest in associates and joint
ventures. The financial statements for NIWA and the Group are presented in
accordance with the requirements of the Crown Research Institutes Act 1992,
the Crown Entities Act 2004, the Public Finance Act 1989, the Companies Act 1993,
and the Financial Reporting Act 1993. The NIWA financial statements are for the
parent company as a separate entity.
2. Nature of activities
The NIWA Group conducts research in water and atmospheric sciences in
New Zealand and internationally.
3. Statement of accounting policies
Statement of compliance
The financial statements have been prepared in accordance with New Zealand
generally accepted accounting practice (NZ GAAP). They comply with New Zealand
equivalents to international financial reporting standards (NZ IFRS) and other
applicable financial reporting standards appropriate for profit-oriented entities.
The financial statements comply with international financial reporting standards
(IFRS). The financial statements were authorised for issue by the directors on
27 August 2010.
Basis of preparation
The measurement basis adopted in the preparation of these financial statements
is historical cost, except for financial instruments as identified in specific
accounting policies below. Cost is based on the fair value of consideration given
in exchange for assets.
The presentation and functional currency used in the preparation of these financial
statements is New Zealand dollars.
Accounting polices are selected and applied in a manner to ensure that the
resulting financial information meets the concepts of relevance and reliability,
ensuring that the substance of the underlying transaction or event is reported.
The accounting policies have been applied in preparing the financial statements
for the year ended 30 June 2010 and the comparative information for the year
ended 30 June 2009.
Adoption of new and revised standards
Standards and interpretations effective in the current period
There no new standards and interpretations effective in the current period with
a material impact.
Standards and interpretations approved but not yet effective
The following are the new or revised standards or interpretations in issue that are
not yet required to be adopted by entities preparing their financial statements for
periods ending on 30 June 2010.
•
•
•
•
•
•
•
5
(10)
2009
481
298
(417)
650
150
9,060
2,094
2,094
2,094
Parent
Actual
(1,198)
(5,649)
(7,008)
(7,116)
113,201
(97,953)
14,526
(14,515)
(14,634)
15,308
(17,317)
6
–
(92)
2010
154
(795)
110
(82)
5,255
1,573
(611)
2,094
1,401
1,401
1,401
Parent
Actual
120,437
19,010
(101,780)
17,930
(19,271)
(953)
(20,114)
(22,692)
5
490
(35)
301
650
150
Group
2009
(417)
–
–
Actual
(2,714)
(5,649)
(4,999)
9,303
3,099
3,099
3,099
ancial statements.
120,820
(99,035)
19,531
(20,770)
(20,886)
(6,354)
–
–
–
(576)
2,338
Group
2010
–
–
(1,955)
(5,000)
7,338
–
–
Budget
(1,590)
120,360
(94,892)
22,937
(26,865)
(26,865)
(2,276)
(3,866)
(3,866)
(3,866)
6
–
–
–
–––––
182
(127)
110
(953)
5,255
(565)
Group
2010
(138)
Actual
(1,158)
5,255
3,099
2,396
2,396
2,396
128,158
(103,006)
24,055
(29,032)
(29,875)
24
16
18
9
11
Note
Receipts from customers
Dividends received
Interest received
Payments to employees and suppliers
Interest paid
Taxation paid
Sale of property, plant, & equipment
Purchase of property, plant, & equipment
Purchase of intangible assets
Dividends paid to shareholders
Short-term advance facility (repaid)
Subsidiary loan proceeds
Subsidiary loan (repaid)
Cash
Short-term deposits
National Institute of Water & Atmospheric Research Ltd and Group
CASH FLOW STATEMENT for the year ended 30 June 2010
in thousands of New Zealand dollars
Cash flows from operating activities
Cash was provided from:
Cash was disbursed to:
Net cash inflow from operating activities
Cash flows from investing activities
Cash was provided from:
Cash was applied to:
Net cash (outflow) in investing activities
Cash flows from financing activities
Cash was applied to:
Net cash inflow (outflow) from financing activities
Net increase/(decrease) in cash and cash equivalents
Effects of exchange rate changes on the balance of cash held in
foreign currency
Opening balance of cash and cash equivalents
Closing cash and cash equivalents balance
Made up of:
Closing cash and cash equivalents balance
The accompanying ‘Notes to the financial statements’ are an integral part of, and should be read in conjunction with, these fin
NIWA ANNUAL REPORT 2010
32 |
| 35 | 35
years
years
10 years
26 years
16 years
20 years
10 years
4 years
3 years
5 years
10 years
4 years
5 years
5–12 years
NIWA ANNUAL REPORT 2010
hull
hull
currencies
hull
Property, plant, and equipment
Tangaroa Kaharoa Ikatere
(k)
Property, plant, and equipment are stated at cost less accumulated depreciation
to date, less any impairment losses.
Expenditure incurred on property, plant, and equipment is capitalised where such
expenditure will increase or enhance the future economic benefits provided by
the assets’ existing service potential. Expenditure incurred to maintain future
economic benefits is classified as repairs and maintenance.
The gain or loss arising on the disposal or retirement of an item of property, plant,
and equipment is determined as the difference between the sales proceeds and
the carrying amount of the asset and is recognised in profit or loss.
(l) Depreciation
Property, plant, and equipment, except for freehold land and work in progress,
are depreciated on a straight-line basis at rates estimated to write off the cost
of the property, plant, and equipment over their estimated useful lives, which are
as follows.
Buildings & leasehold improvements
Buildings 40
Leasehold improvements, freehold property
Leasehold improvements, rented property
Vessels RV RV RV
Plant & equipment Plant & equipment Scientific equipment
Electronic data processing equipment Supercomputer 8 Electronic data processing equipment Office equipment Furniture & fittings Motor vehicles Small boats
m) Receivables
Receivables are categorised as loans and receivables.
Loans and receivables are stated at amortised cost using the effective interest
rate, less any impairment.
Collectability of receivables is reviewed on an ongoing basis. Debts which are
known to be uncollectable are written off against the provision, once approved by
the Board of Directors. A provision for doubtful debts is established when there
is objective evidence that the Group will not be able to collect all amounts due
according to the original terms of receivables. Changes in the carrying amount
of the provision are recognised in profit or loss.
(n) Inventory
Inventory is stated at the lower of cost and net realisable value. Cost is calculated
on the weighted average basis for consumables and first in first out (FIFO) for
finished goods and work in progress.
(o) Foreign
i) Transactions
Transactions in foreign currencies are converted to the functional currency of
New Zealand dollars, by applying the spot exchange rate between the functional
currency and the foreign currency at the date of transaction. At the end of each
reporting period, monetary assets and liabilities are translated to New Zealand
dollars using the closing rate of exchange at balance date, and any exchange gains
or losses are taken to profit or loss.
ii) Translation of foreign operations
On consolidation, revenues and expenses of foreign operations are translated to
New Zealand dollars at the average exchange rates for the period. Assets and
liabilities are converted to New Zealand dollars at the rates of exchange ruling at
balance date. Exchange rate differences arising from the translation of the foreign
operations are recognised in other comprehensive income and accumulated as a
separate component of equity in the Group’s foreign currency translation reserve.
Such exchange differences are reclassified from equity to profit or loss (as a
reclassification adjustment) when the foreign operation is disposed of.
Goodwill and fair value adjustment arising on the acquisition of a foreign operation
are treated as assets and liabilities of the foreign operations and translated at the
exchange rate ruling at balance date.
tax
the product or process is clearly defined and the costs attributable to the
product or process can be identified separately and measured reliably
the ability to use or sell the product or process
the Group intends to produce and market, or use, the product or process
the existence of a market for the product or process or its usefulness to the
Group, if it is to be used internally, can be demonstrated
adequate resources exist, or their availability can be demonstrated, to
complete the projects and market or use the product or process.
(h) Income
The income tax expense for the period is the tax payable on the current period’s
taxable income, based on the income tax rate for each jurisdiction. This is then
adjusted by changes in deferred tax assets and liabilities attributable to temporary
differences between the tax bases of assets and liabilities and their carrying
amounts in the financial statements, and changes in unused tax losses.
Deferred tax is accounted for using the balance sheet liability method in respect
of temporary differences arising from the carrying amount of assets and
liabilities in the financial statements and the corresponding tax base of those
items. Deferred tax liabilities are generally recognised for all taxable temporary
differences. Deferred tax assets are generally recognised for all deductible
temporary differences to the extent that it is probable that sufficient taxable
amount will be available against which those deductible temporary differences
can be utilised.
Deferred tax liabilities are recognised for the taxable temporary differences
arising on investment in subsidiaries, associates and joint ventures, except where
the consolidated entity is able to control the reversal of the temporary differences
and it is probable that the temporary difference will not reverse in the foreseeable
future. Deferred tax assets arising from deductible temporary difference from
these investments are only recognised to the extent that it is probable there
will be sufficient taxable profits against which to utilise the asset and they are
expected to reverse in the foreseeable future.
Such assets and liabilities are not recognised if the temporary difference arises
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
accounting profit.
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.
Current and deferred tax is recognised in profit or loss, except when it relates to
items recognised in other comprehensive income or directly in equity, in which
case the deferred or current tax is also recognised in other comprehensive income
or directly in equity, or where it arises from the initial accounting for a business
combination. In the case of a business combination, the tax effect is taken into
account in calculating goodwill or in determining the excess of the acquirer’s
interest in the net fair value of the acquiree’s identifiable assets, liabilities, and
contingent liabilities over the cost of the business combination. The carrying
amount of deferred tax assets is reviewed at each balance date and reduced to the
extent that it is no longer probable that sufficient taxable profits will be available
to allow all or part of the asset to be recovered.
(i) Purchased intangible assets
Purchased identifiable intangible assets, comprising copyrights, and software,
are recorded at cost less amortisation and impairment. Amortisation is charged
on a straight-line basis over their estimated useful lives. The estimated useful life
and amortisation method are reviewed each balance date.
The estimated useful life for the copyrights is five years.
The estimated useful life for software is one year.
(j) Development costs
Intangible assets which arise from development costs that meet the following
criteria are recognised as an asset in the statement of financial position:
•
•
•
•
•
Capitalisation is limited to the amount which, taken together with any further
related costs, is likely to be recovered from related future economic benefits.
Any excess is recognised as an expense.
All other development and research costs are expensed as incurred.
Subsequent to initial recognition, internally generated intangible assets are
reported at cost, less accumulated amortisation and accumulated impairment
losses, on the same basis as purchased identifiable intangible assets.
grants
recognition
benefits
costs
Goods and services tax (GST)
Impairment of tangible and intangible assets (excluding goodwill)
(b) Revenue
Rendering of services
Revenue from services rendered is recognised in profit or loss in proportion
to the stage of completion of the transaction at reporting date. The amount of
revenue unbilled is represented by ‘uninvoiced receivables’, which is stated at
the proportion to the stage of completion in the statement of financial position.
Revenue received but not earned is recognised as revenue in advance on the face
of the statement of financial position.
Goods sold
Revenue from the sale of goods is measured at the fair value of the consideration
received or receivable, net of returns and allowances. Revenue is recognised
when the significant risks and rewards of ownership have been transferred to the
buyer, recovery of the consideration is probable, the associated costs and possible
return of goods can be estimated reliably, and there is no continuing management
involvement with the goods.
Transfers of risks and rewards vary depending on the individual terms of the
contract sale. For sales of instruments, transfer occurs upon receipt by the
customer.
Dividend revenue
Dividend revenue from investments is recognised when the shareholder’s right
to receive payment has been established.
(c) Government
Government grants are assistance by the government in the form of transfers
of resources to the Group in return for past or future compliance with certain
conditions relating to the operating activities of the Group. The primary condition
is that the Group should undertake research activities as defined under the
contractual agreements which award the funding.
Government grants relating to this funding are recognised as income in the
profit or loss on a systematic basis in the equivalent period in which the expense
is recognised.
There were no government grants received during the year (2009: nil).
(d) Finance
Interest expense is accrued on a time basis using the effective interest method.
(e)
These financial statements are prepared on a GST-exclusive basis, except for
receivables and payables, which are stated GST inclusive.
(f) Employee
Liabilities for wages and salaries, including non-monetary benefits and annual
leave, long-service leave, retirement leave, and training leave are recognised
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
their nominal values using the remuneration rate expected to apply at settlement.
Employee benefits are separated into current and non-current liabilities. Current
liabilities are those benefits that are expected to be settled within 12 months of
balance date.
Provisions made in respect of employee benefits which are not expected to be
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
employees up to the reporting date.
(g)
Intangible assets that have an indefinite life are not subject to amortisation and
are tested annually for impairment. Other assets are reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount
may not be recoverable. If such an indication exists, the recoverable amount of
the asset is estimated in order to determine the extent of the impairment loss.
The recoverable amount is the higher of fair value less cost to sell and value
in use.
If the recoverable amount of the asset is estimated to be less than its carrying
value, the carrying value is reduced to its recoverable amount. An impairment loss
is recognised in profit or loss.
Where an impairment loss subsequently reverses, the carrying amount of the
asset is increased to the revised recoverable amount, but only to the extent that
the increased carrying value does not exceed the carrying amount that would have
been recognised if the asset had no impairment loss recognised in the past.
This reversal is recognised in profit or loss.
the aggregate of the fair value of the consideration received and the fair
value of any retained interest, and
the previous carrying amount of the assets (including goodwill),
and liabilities of the subsidiary and any non-controlling interests.
1.
2.
Accounting for jointly controlled operations
NIWA ANNUAL REPORT 2010
National Institute of Water & Atmospheric Research Ltd and Group
NOTES TO THE FINANCIAL STATEMENTS as at 30 June 2010
Non-controlling interests in the net assets of the consolidated subsidiaries may
be initially measured either at fair value or at the non-controlling interest’s
proportionate share of the fair value of the acquirer’s identifiable net assets.
The choice of measurement basis is made on an acquisition-by-acquisition
basis. Subsequent to acquisition, non-controlling interests consist of the amount
attributed to such interests at initial recognition and the non-controlling interest’s
share of changes in equity since the date of the combination. Total comprehensive
income is attributed to non-controlling interests even if this results in the non-
controlling interests having a deficit balance.
The results of subsidiaries acquired or disposed of during the year are included
in profit or loss from the effective date of acquisition or up to the effective date of
disposal, as appropriate. Where necessary, adjustments are made to the financial
statements of subsidiaries to bring the accounting policies used into line with
those used by other members of the Group.
All intra-group transactions, balances, income, and expenses are eliminated
in full on consolidation.
Changes in the Group’s interests in a subsidiary that do not result in a loss of
control are accounted for as equity transactions. Any difference between the
amount by which the non-controlling interests are adjusted and the fair value
of the consideration paid or received is recognised directly in equity and attributed
to owners of the Company.
When the Group loses control of a subsidiary, the profit or loss on disposal is
calculated as the difference between:
Amounts previously recognised in other comprehensive income in relation to
the subsidiary are accounted for (i.e., reclassified to profit or loss, or transferred
directly to retained earnings) in the same manner as would be required if the
relevant assets or liabilities were disposed of. The fair value of any investment
retained in the former subsidiary at the date when control is lost is regarded
as the fair value on initial recognition for subsequent accounting under NZ IAS 39
Financial Instruments: Recognition and Measurement or, when applicable,
the cost on initial recognition of an investment in an associate or jointly
controlled entity.
Investments in subsidiaries are recorded at cost less any impairment in the parent
company’s financial statements.
i)
Where the Group has joint control in a jointly controlled operation, the Group
recognises the assets that it controls and the liabilities that it incurs, along with
expenses that it incurs and the Group’s share of income it earns from the sale
of goods and services by the joint venture.
ii) Accounting for goodwill
Goodwill arising on the acquisition of a subsidiary or jointly controlled entity is
recognised as an asset at the date that control is acquired (the requisition date).
Goodwill is measured as the excess of the sum of the consideration transferred,
the amount of any non-controlling interest in the acquiree, and the fair value of
the acquirer’s previously held equity interest (if any) in the acquiree over the fair
value of the identifiable net assets recognised.
If, after reassessment, the Group’s interest in the fair value of the acquiree’s
identifiable net assets exceeds the sum of the consideration transferred,
the amount of any non-controlling interests in the acquiree and the fair value
of the acquirer’s previously held equity interest (if any) in the acquiree, the excess
is recognised immediately in profit or loss as a bargain purchase gain.
Goodwill is not amortised, but is reviewed for impairment at least annually.
For the purpose of impairment testing, goodwill is allocated to each of the Group’s
cash-generating units expected to benefit from the synergies of the combination.
Cash-generating units to which goodwill has been allocated are tested for
impairment annually, or more frequently when there is an indication that the unit
may be impaired. The recoverable amount is the higher of fair value less cost to
sell, and value in use. If the recoverable amount of the cash-generating unit is
less than the carrying amount of the unit, the impairment loss is allocated first
to reduce the carrying amount of any goodwill allocated to the unit and then to the
other assets of the unit pro-rata on the basis of the carrying amount of each asset
in the unit. Any impairment loss is recognised immediately in profit or loss and is
not subsequently reversed.
On disposal of a subsidiary or jointly controlled entity, the attributable amount
of goodwill is included in the determination of the profit or loss on disposal.
34 |
(9)
–
44
| 37 | 37
2009
190
190
298
143
143
2,713
2009
2009
1,702
2009
2009
Parent
110,072
112,790
Parent
Parent
Parent
Parent
13
13
(70)
2010
297
139
139
2,188
2010
2010
(125)
2,284
2010
(654)
2010
Parent
117,775
119,969
Parent
Parent
Parent
Parent
ncial year. The total value of the payment
NIWA ANNUAL REPORT 2010
–
193
193
(9)
298
(66)
165
165
Group
2009
10,637
Group
2009
1,791
Group
2009
109,113
119,755
Group
2009
Group
2009
6565
13
13
1818
––––
297
(70)
(654)
(181)
162
162
Group
2010
10,856
Group
2010
2,383
Group
2010
116,860
127,722
Group
2010
Group
2010
Rental and operating lease costs
Remuneration of directors
Bad debts written off
Movement within doubtful debt provision
Change in the fair value of derivatives
Foreign currency gain (loss)
4. Revenues and other gains
Revenue
in thousands of New Zealand dollars
Sale of goods
Rendering of services
Dividends
Total operating revenue
Other gains
in thousands of New Zealand dollars
Net gain on sale from property, plant and equipment
Total other gains
5. Operating expenses and other gains
Operating expenses
in thousands of New Zealand dollars
Operating expenses include:
Other gains included in operating expenses
in thousands of New Zealand dollars
Other expenses include:
In 2009–10, the Parent and Group paid compensation or other benefits to two people who ceased to be an employee during the fina was $54,042.32 (2008-09: $189,757.82).
Auditor’s remuneration
in thousands of New Zealand dollars
Auditor’s remuneration to Deloitte comprise:
Audit of the financial statements
Other assurance services
Total auditor’s remuneration
Loans and receivables
Changes in accounting policies
Financial assets at fair value through profit or loss are classified as current assets
and are stated at fair value, and changes resulting in a gain or loss are recognised
in profit or loss.
(ii)
Loans and receivables have fixed or determinable payments and are not quoted
in an active market. They arise when the Group provides money, goods, or services
directly to a debtor with no intention of selling the receivable. They are included
in current assets, except for those with maturities greater than 12 months after
the statement of financial position date which are classified as a non-current
asset. These are subsequently recorded at amortised cost less impairment.
Impairment of financial assets
Financial assets, other than those at fair value through profit or loss, are assessed
for indicators of impairment at each balance date. Financial assets are impaired
where there is objective evidence that, as a result of one or more events that
occurred after the initial recognition of the financial asset, the estimated future
cashflows of the investment have been impacted.
For certain categories of financial assets, such as trade receivables, assets
that are assessed not to be impaired individually are subsequently assessed for
impairment on a collective basis. Objective evidence of impairment for a portfolio
of receivables could include the Group’s past experience of collecting payments,
an increase in the number of delayed payments in the portfolio past the average
credit period of 60 days, as well as observable changes in national or local
economic conditions that correlate with default on receivables.
For financial assets carried at amortised cost, the amount of the impairment
is the difference between the asset’s carrying amount and the present value of
estimated future cashflows, discounted at the financial asset’s original effective
interest rate.
The carrying amount of the financial asset is reduced by the impairment loss
with the exception of trade receivables, where the carrying amount is reduced
through the use of an allowance account. When a trade receivable is considered
uncollectible, it is written off against the allowance account. Changes in the
carrying amount of the allowance account are recognised in profit or loss.
Financial liabilities
Financial liabilities are classified as either financial liabilities at fair value through
profit or loss or other financial liabilities. Financial liabilities are classified as at
fair value through profit or loss where the liability is either held for trading or it is
designated as at fair value. A financial liability is classified as held for trading if it
meets similar criteria as financial assets held for trading.
A financial liability other than a financial liability held for trading may be
designated as at fair value through profit or loss upon recognition if it meets
similar criteria as financial assets designated as at fair value through profit
or loss.
Financial liabilities at fair value are stated at fair value with any resultant gain
or loss recognised in profit or loss. This incorporates any interest paid on the
financial liability.
Other financial liabilities are initially measured at fair value through profit or loss,
net of transaction costs. Other financial liabilities are subsequently measured
at amortised cost using the effective interest method, with interest expense
recognised on an effective interest basis.
The effective interest method is the method of calculating the amortised cost
of a financial liability and of allocating interest expense over the relevant period.
The effective interest rate is the rate that discounts estimated future cash
payments through the expected life of the financial liability, or, where appropriate,
a shorter period to the net carrying amount of the financial liability.
The Group derecognises financial liabilities when, and only when, the Group’s
obligations are discharged, cancelled or they expire.
(s)
There have been no changes in accounting policies this period.
instruments
Statement of cash flows
Financial assets at fair value through profit or loss
it has been incurred principally for the purpose of selling in the near future,
or
it is a derivative that is not designated and effective as a hedge instrument, or
it is part of an identified portfolio of financial instruments that the
Group manages together and has a recent actual pattern of short-term
profit making.
such designation eliminates or significantly reduces a measurement or
recognition inconsistency that would otherwise arise, or
the financial asset forms part of a group of financial assets or financial
liabilities or both, which is managed and its performance is evaluated on
a fair value basis, in accordance with either the Group’s documented risk
management or investment strategy, and information about the grouping
is provided internally on that basis, or
it forms part of a contract containing one or more embedded derivative,
and it is allowable to be designated at fair value through profit or loss.
National Institute of Water & Atmospheric Research Ltd and Group
NOTES TO THE FINANCIAL STATEMENTS as at 30 June 2010
(p) Leases
Leases are classified as finance leases whenever the terms of the lease transfer
substantially all of the risks and rewards of ownership to the lessee. All other
leases are classified as operating leases.
The Group has not contracted for any leases which would be classified as
finance leases.
Operating lease payments are recognised on a systematic basis that is
representative of the benefit to the Group (straight line).
(q)
The statement of cash flows is prepared exclusive of GST, which is consistent
with the method used in the statement of comprehensive income.
Operating activities comprise the provision of research services, consultancy,
and manufacture of scientific instruments and other activities that are not
investing or financing activities. Investing activities comprise the purchase and
disposal of property, plant, and equipment, intangible assets, and advances to
subsidiaries. Financing activities are those which result in changes in the size
and composition of the capital structure of the Group.
Cash and cash equivalents comprise cash on hand, cash in banks and investments
in money market, net of outstanding bank drafts.
(r) Financial
Derivative financial instruments
The Group may use derivative financial instruments to hedge its exposure to
foreign exchange and interest rate risks arising from operational, financing,
and investing activities.
Derivative financial instruments such as forward exchange contracts are
categorised as held for trading (unless they qualify for hedge accounting),
and are initially recognised in the statement of financial position at fair value
and transaction costs are expensed immediately. Subsequent to initial
recognition, derivative financial instruments are stated at fair value. The gain or
loss on remeasurement to fair value is recognised immediately in profit or loss
unless the derivative is designated and effective as a hedging instrument in which
event the timing of the recognition in profit or loss depends on the nature of the
hedge relationship.
The fair value of outstanding derivative financial instruments at 30 June 2010
is $70k (2009: nil).
Other financial assets
Non-derivative financial assets comprise receivables, cash and cash equivalents,
uninvoiced receivables, and intercompany and are initially recorded at fair value
plus transaction costs (except for financial assets at fair value through profit or
loss which are initially recorded at fair value).
Financial assets are classified into the following specified categories;
classification depends on the nature and purpose of the financial asset and
is determined at the time of initial recognition.
(i)
Financial assets are classified at fair value through profit or loss where the
financial asset is either held for trading or it is designated at fair value through
profit or loss.
A financial asset is classified as held for trading if:
•
•
•
A financial asset other than a financial asset held for trading may be designated
as at fair value upon recognition if:
•
•
•
NIWA ANNUAL REPORT 2010
36 |
–
| 39 | 39
2009
650
115
638
638
2009
2009
2009
Parent
24,799
1,758
4,238
1,122
7,871
7,233
Parent
Parent
Parent
–
2010
130
627
625
2010
2010
5,905
2010
Parent
24,799
2,180
4,486
1,147
8,570
7,945
Parent
Parent
Parent
l impact on the carrying amount of the
NIWA ANNUAL REPORT 2010
260
ment due on 7 May 2014. The loan is
650
115
726
726
rmined by the expected employment
Group
2009
24,799
amongst the shareholders.
Group
2009
s not subject to any interest charge.
Group
2009
Group
2009
2,081
4,565
1,154
8,641
7,915
appropriate liability. Training leave is based
on an on-call basis and a short-term advance that were applicable during this period are
279
130
723
727
Group
2010
24,799
5,905
Group
2010
Group
2010
Group
2010
2,447
4,880
1,208
9,388
8,661
Borrowings
Salary accrual
Annual leave
Training leave
Long service leave
Retirement leave
Current
Non-current
9. Share capital
in thousands of New Zealand dollars
Issued and fully paid capital
24,798,700 ordinary shares (2009: 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
10. Unsecured loan
in thousands of New Zealand dollars
Loan
The loan is unsecured and relates to a vendor finance agreement on the acquisition of a subsidiary, Unidata Pty Ltd. The loan i Repayment will be made when, and in such amounts as, the cash flow and profitability of Unidata Pty Ltd permit, with full repay recognised at amortised cost using the effective interest rate method.
11.
in thousands of New Zealand dollars
Borrowings
The facility is unsecured, but subject to various covenants that were complied with during the year. The facility is operated with a limit available to borrow of $11.5 million. (2009: $4.9m). The facility was operated on an on-call basis. Interest rates referred to in note 29.
12. Employee entitlements
in thousands of New Zealand dollars
Accrued remuneration:
Total employee entitlement and accrual provision
Comprising:
The provisions for long-service leave, retirement leave and training leave are dependent upon a number of factors that are dete period of employees, current remuneration, and the timing of employees using the benefits. Any changes in these assumptions wil liability. In determining long-service leave the employment period is based upon historical length of service to determine the upon historical usage of the benefit to calculate the likelihood of further benefits incurring.
–
11
–
–
–
154
98
2009
481
481
(11)
470
2009
1,767
1,921
2009
6,040
1,812
1,921
2009
(649)
(860)
Parent
Parent
Parent
Parent
(4,140)
–
–
–
–
62
50
13
(828)
(284)
2010
154
154
(92)
2010
2,488
2,319
3,979
2010
5,373
1,612
2,603
3,979
2010
Parent
Parent
Parent
Parent
removed depreciation on buildings
96
–
32
–
–
–
490
490
(35)
455
292
. The change recognised from the
(649)
(860)
Group
2009
Group
2009
2,943
3,039
Group
2009
9,050
2,715
3,039
Group
2009
(4,140)
38
29
–
–
–
182
182
55
(802)
(388)
(94)
Group
2010
(127)
Group
2010
3,640
2,215
5,053
Group
2010
9,550
2,865
2,603
5,053
Group
2010
0.03
0.03
0.17
Dividend
per share
National Institute of Water & Atmospheric Research Ltd and Group
NOTES TO THE FINANCIAL STATEMENTS as at 30 June 2010
6. Net interest and other financing income
in thousands of New Zealand dollars
Interest income on bank deposits
Finance income
Finance expense
Net interest and other financing income
7. Income tax
The income tax expense is determined as follows:
in thousands of New Zealand dollars
Income tax expense
Current tax
Deferred tax relating to temporary differences
Deferred tax relating to budget changes
Income tax expense
Reconciliation of income tax expense
in thousands of New Zealand dollars
Operating profit before income tax
Tax at current rate of 30%
Adjustments to taxation:
Other non-deductible expenses
Depreciation changes to buildings
Reduction in the taxation rate
Other deferred taxation adjustments
Under/(over) provision in previous year
Income taxation expense
The 2010 Crown budget introduced the reduction in the company tax rate from 30% to 28% effective from the 2011/12 tax year and from the 2010/11 year. The rate reduction and the change in depreciation impact the deferred tax calculation for the 2010 year reduction of the rate on deferred tax is recognised in the taxation expense in profit or loss.
8. Dividends
in thousands of New Zealand dollars
Payments were made on:
5 December 08
5 June 09
29 June 09
These dividend payments were made to the Government of New Zealand (the Crown) as the sole shareholder.
NIWA ANNUAL REPORT 2010
38 |
25
–
28
| 41 | 41
(2,581)
(1,405)
1,738
(2,223)
2009
9,113
7,086
2009
1,022
9,925
Closing
balance
Parent
16,199
Parent
–
–
–
–
–
–
406
703
rates
2010
8,874
5,528
2010
6,303
Parent
14,402
Parent
Changes in
income tax
nidata Pty Ltd of $810k, result in
cted to be repaid within one year
is is consistent with the Group policy that
not expected to be repaid within one year
NIWA ANNUAL REPORT 2010
51
8.7 million) and purchased workshop
(6)
301k (2009: $25k).
(65)
(95)
(3)
(2009: $1.0 million).
(118)
ment of comprehensive income.
Research Institute. The Income Tax Act 2004
Group
2009
10,580
7,094
17,674
ovided research services to NIWA Australia Pty
Charged to
profit or loss
31
3
(2,632)
(1,340)
1,833
(2,105)
Group
2010
10,493
5,513
16,006
Opening
balance
Payables and accruals, and revenue in advance
Parent
in thousands of New Zealand dollars
As at 30 June 2009
Temporary differences
Property, plant, and equipment
Library
Uninvoiced receivables
Employee benefits
Doubtful debts
The NIWA Group is not required to establish or maintain an imputation credit account by virtue of its classification as a Crown
confirms this requirement.
14.
in thousands of New Zealand dollars
Trade payables and accruals
Revenue in advance
Total
Trade payables are payable as per normal commercial terms.
Revenue in advance relates to contracted services which have been billed in advance, yet not recognised as revenue in the state
15. Intercompany
in thousands of New Zealand dollars
Current asset
Non-current asset
Current liability
An amount of $6.3 million (2009: $9.9 million) is held by the Parent Company (NIWA) on behalf of NIWA Vessel Management Ltd. Th
all surplus funds are managed by NIWA. The balance is unsecured, has no set repayment terms, and is payable upon demand, but is
of balance date. The balance is not subject to interest.
Parent Company receivables and advances to NIWA Australia Pty Ltd of $293k, NIWA Environmental Research Institute of $6k, and U
an asset of $1,109k. All balances are unsecured, have no set repayment terms and are payable upon demand, and most are not expe
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 $10.9 million (2009: $
services totalling $47k (2009: $41k). NIWA Vessel Management Ltd contracted services from its Parent, NIWA Science, totalling $
During the year NIWA contracted scientific research from its subsidiary NIWA Australia Pty Ltd totalling nil (2009: nil) and pr
Ltd of $114k (2009: $12k).
NIWA earned revenue of nil (2009: $21k) 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
The carrying amount of intercompany balances approximates their fair value.
There were no other significant transactions between any of the companies in the Group.
18
–
196
25
18
196
1,998
1,936
(4,545)
(1,215)
1,814
Closing
(3,732)
balance
(5,998)
(1,240)
(5,026)
Closing
balance
(4,097)
(1,406)
(3,542)
Closing
balance
–
–
–
–
–
–
–
–
–
–
–
–
403
(15)
388
297
(13)
284
rates
rates
rates
Changes in
income tax
Changes in
income tax
Changes in
income tax
(7)
166
77
196
57
(6)
(65)
(48)
(3)
(7)
89
(66)
190
196
(2,304)
(1,872)
(2,261)
(1,793)
Charged to
Charged to
Charged to
profit or loss
profit or loss
profit or loss
25
–
31
3
25
–
(4,097)
(1,406)
1,936
(4,154)
(1,341)
1,984
(2,581)
(1,405)
1,738
(2,223)
Opening
balance
(3,542)
Opening
balance
(3,476)
Opening
balance
National Institute of Water & Atmospheric Research Ltd and Group
NOTES TO THE FINANCIAL STATEMENTS as at 30 June 2010
13. Deferred tax liability and assets
Deferred tax assets (liabilities) arise from the following:
Group
in thousands of New Zealand dollars
As at 30 June 2010
Temporary differences
Property, plant, and equipment
Library
Uninvoiced receivables
Employee benefits
Doubtful debts
in thousands of New Zealand dollars
As at 30 June 2009
Temporary differences
Property, plant, and equipment
Library
Uninvoiced receivables
Employee benefits
Doubtful debts
Parent
in thousands of New Zealand dollars
As at 30 June 2010
Temporary differences
Property, plant, and equipment
Library
Uninvoiced receivables
Employee benefits
Doubtful debts
NIWA ANNUAL REPORT 2010
40 |
(8)
–
586
(30)
| 43 | 43
586
Total
(1,891)
(1,806)
Total
(5,066)
(5,130)
Total
(1,888)
(1,791)
Total
(5,088)
9,985
(5,088)
183,099
29,032
210,232
98,812
13,088
110,680
99,552
167,425
20,770
183,099
92,387
11,555
98,812
84,287
148,267
19,271
165,650
79,636
11,026
89,457
76,193
138,840
14,515
148,267
74,739
79,636
68,631
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
694
34
34
694
694
3,962
4,038
8,000
8,000
2,133
1,829
3,962
3,962
(660)
1,513
(819)
Work in
progress
Work in
progress
Work in
progress
Work in
progress
NIWA ANNUAL REPORT 2010
–
–
–
–
–
(131)
248
(131)
309
(64)
172
(61)
692
145
(135)
213
(131)
611
309
(61)
998
165
(61)
683
2,031
1,336
3,236
1,339
1,456
1,780
1,786
2,031
1,228
1,339
1,785
1,795
1,102
1,184
1,537
1,785
1,102
Small boats
Small boats
Small boats
Small boats
–
14
–
–
–
(61)
410
(61)
781
711
(2)
442
14
(487)
(60)
393
(60)
757
637
(450)
424
(450)
3,739
3,692
2,562
2,911
3,569
(539)
3,739
2,607
2,562
1,177
3,605
3,559
2,469
2,802
3,418
3,605
2,495
2,469
1,136
Motor vehicles
Motor vehicles
Motor vehicles
Motor vehicles
3
–
–
–
–
(20)
(3)
43
(20)
(4)
244
32
(27)
67
(52)
287
(20)
37
(20)
213
30
(53)
59
(53)
250
2,216
2,196
1,929
1,952
2,215
2,216
1,914
1,929
1,757
1,737
1,507
1,524
1,780
1,757
1,501
1,507
Furniture & fittings
Furniture & fittings
Furniture & fittings
Furniture & fittings
–
–
–
–
680
(5)
(657)
581
(590)
874
(739)
659
(654)
537
(586)
998
(740)
835
(741)
944
7,846
7,869
6,831
6,822
1,047
7,193
1,393
(735)
7,846
6,696
6,831
1,015
7,521
7,526
6,577
6,528
6,884
1,377
7,521
6,483
6,577
Office equipment
Office equipment
Office equipment
Office equipment
(2)
–
–
–
(637)
(643)
(11)
(637)
(633)
16,964
10,259
26,584
14,708
2,219
16,284
2,388
1,518
1,854
1,374
1,156
10,300
16,525
(1,938)
16,964
15,145
(1,955)
14,708
2,256
14,681
10,224
24,268
13,153
14,374
9,894
15,259
(1,952)
14,681
13,947
(1,950)
13,153
1,528
Electronic data
Electronic data
Electronic data
Electronic data
processing equipment
processing equipment
processing equipment
processing equipment
(3)
–
(9)
–
–
(377)
(354)
(893)
(374)
(354)
(937)
(893)
8,972
6,382
8,953
(868)
5,323
6,348
5,575
6,452
4,939
Plant &
68,703
77,295
48,929
54,957
22,338
Plant &
60,627
68,703
44,500
48,929
19,774
Plant &
59,189
65,163
42,721
47,942
17,221
Plant &
53,674
59,189
38,673
42,721
16,468
equipment
equipment
equipment
equipment
plans.
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
775
739
1,189
19,612
10,259
11,034
8,578
18,423
9,520
10,259
8,164
Vessels
18,423
Vessels
18,423
Vessels
Vessels
(8)
–
(7)
–
(8)
(7)
586
(895)
(943)
586
(895)
(940)
46,786
2,520
49,298
12,255
2,430
15,264
5,155
2,420
2,520
2,417
5,155
2,407
34,034
42,526
46,786
10,778
12,255
34,531
46,606
49,118
12,107
15,103
34,015
42,346
46,606
10,640
12,107
34,499
improvements
improvements
improvements
improvements
Buildings & leasehold
Buildings & leasehold
Buildings & leasehold
Buildings & leasehold
21
–
–
–
–
–
–
–
–
–
–
–
–
––
–
–
21
–
–
–
–
–
–
–
–
–
–
–
–
Land
Land
Land
12,429
12,450
Land
12,450
12,429
12,429
12,429
12,429
12,450
12,450
12,429
12,429
12,429
NIWA ANNUAL REPORT 2010
16. Property, plant, and equipment
Group
in thousands of New Zealand dollars
Cost
Balance at 1 July 2009
Additions
Disposals
Foreign currency
Balance at 30 June 2010
Accumulated depreciation and impairment losses
Balance at 1 July 2009
Depreciation charge
Impairment
Disposals
Balance as at 30 June 2010
Net book value at 30 June 2010
Group
in thousands of New Zealand dollars
Cost
Balance at 1 July 2008
Additions
Disposals
Foreign currency
Balance at 30 June 2009
Accumulated depreciation and impairment losses
Balance at 1 July 2008
Depreciation charge
Impairment
Disposals
Balance as at 30 June 2009
Net book value at 30 June 2009
Parent
in thousands of New Zealand dollars
Cost
Balance at 1 July 2009
Additions
Disposals
Balance at 30 June 2010
Accumulated depreciation and impairment losses
Balance at 1 July 2009
Depreciation charge
Impairment
Disposals
Balance as at 30 June 2010
Net book value at 30 June 2010
Parent
in thousands of New Zealand dollars
Cost
Balance at 1 July 2008
Additions
Disposals
Balance at 30 June 2009
Accumulated depreciation and impairment losses
Balance at 1 July 2008
Depreciation charge
Disposals
Balance as at 30 June 2009
Net book value at 30 June 2009
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 utilisation42 |
–
–
2
(92)
(92)
37
953
953
| 45 | 45
417
465
(723)
(723)
Total
5,282
5,607
5,195
5,570
Total
5,094
5,324
5,094
5,324
–
–
–
–
–
–
–
–
–
–
–
215
215
128
48
178
37
Copyrights
Copyrights
–––
–––
–––
–––
NIWA ANNUAL REPORT 2010
––
––
–2
–
953
(723)
953
(723)
417
(92)
417
(92)
5,094
5,324
5,094
5,324
5,067
5,392
5,067
5,392
Software
Software
Group
in thousands of New Zealand dollars
Cost
Balance as at 1 July 2008
Additions
Disposals
Currency movements
Balance as at 30 June 2009
Accumulated amortisation and impairment losses
Balance as at 1 July 2008
Amortisation
Impairment
Disposals
Currency movements
Balance as at 30 June 2009
Net book value at 30 June 2009
Parent
in thousands of New Zealand dollars
Cost
Balance as at 1 July 2009
Additions
Disposals
Currency movements
Balance as at 30 June 2010
Accumulated amortisation and impairment losses
Balance as at 1 July 2009
Amortisation
Impairment
Disposals
Currency movements
Balance as at 30 June 2010
Net book value at 30 June 2010
The opening net book value at 1 July 2008 was $nil.
953
984
Total
(723)
(723)
5,607
5,837
5,570
5,831
–
–
–
66
215
215
178
31
209
vels, quality, and flows.
Copyrights
–––
–––
–––
–
ets held for the duration of their physical
. In the directors’ view the cost of these
953
953
rations.
rposes.
(723)
(723)
5,392
5,622
5,392
5,622
Software
Description
A national reference collection of marine invertebrates.
A national electronic database of high-quality climate information, including temperatures, rainfall, wind, and other
climate elements.
A national electronic database of river and lake locations throughout New Zealand, including le
A national electronic database of the occurrence of fish in the fresh waters of New Zealand, including major
offshore islands.
intangibles
National Institute of Water & Atmospheric Research Ltd and Group
NOTES TO THE FINANCIAL STATEMENTS as at 30 June 2010
17. Heritage assets
NIWA has one collection and three databases that have been defined as heritage assets. Heritage collection assets are those ass
lives because of their unique scientific importance and databases are maintained as an incidental part of existing business ope
NIWA has the following heritage assets:
Type
Marine Benthic Biology Collection
National Climate Database
Water Resources Archive Database
New Zealand Freshwater Fish Database
The nature of these heritage assets, and their significance to the science NIWA undertakes, makes it necessary to disclose them
heritage assets cannot be assessed with any reliability, and accordingly these assets have not been recognised for reporting pu
18. Identifiable
Group
in thousands of New Zealand dollars
Cost
Balance as at 1 July 2009
Additions
Disposals
Currency movements
Balance as at 30 June 2010
Accumulated amortisation and impairment losses
Balance as at 1 July 2009
Amortisation
Impairment
Disposals
Currency movements
Balance as at 30 June 2010
Net book value at 30 June 2010
The opening net book value at 1 July 2008 was $87k.
NIWA ANNUAL REPORT 2010
44 |
(1)
314
| 47 | 47
2009
Group
2009
1,778
1,778
Parent
18,505
18,504
18,190
18,504
––
––
––
––
741
741
2010
(655)
803
Group
2010
Parent
17,767
17,112
16,309
17,112
Group’s interests in this joint venture
it risk.
considers to be low credit risk.
any service or goods are provided
NIWA ANNUAL REPORT 2010
(1)
at the reporting date for which the
impaired balances.
e at the reporting date for which the
balances below exclude the Crown-
Risk Limited (a wholly owned subsidiary
314
% (2009 Group 37% and Parent 45%)
tentions.
or impaired balances.
Group
2009
18,787
18,786
18,472
18,786
he individual contracts are complete,
unpaid at the due date.
(655)
803
Group
2010
17,967
17,312
16,509
17,312
20. Joint ventures
The Group has a 50% participating interest in Riskscape NZ, an unincorporated joint venture of equal interests with Geological
company of GNS Science Ltd). Riskscape NZ commenced operations in April 2005 and had a first balance date of 30 June 2005. The
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
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Income
Expenses
21. Receivables
in thousands of New Zealand dollars
Trade receivables
Provision for doubtful debts
Total
Classified as:
Non-current
Current
Included in the Group and Parent’s trade receivables balance at the end of the year is one debtor’s balance which equates to 45
of the total trade receivables balance. Contracts with a Crown-owned debtor specify retentions are held on each invoice until t
which can take up to five years. The non-current component of receivables relates to the long-term portion of these contract re
A large proportion of the Group’s commercial customers are from central, local government, and private sectors which the Group
Before accepting a new customer, a credit check is undertaken when deemed appropriate to ensure validity of the customer before
to the customer.
The Group reserves the right to charge interest at a rate of two percent per month, calculated daily, on all invoices remaining
Included in the Group’s trade receivable balance are debtors with a carrying amount of $506k (2009: $1,135k) which are past due
Group has not provided as the amounts are still considered recoverable. The Group does not hold any collateral over past due or
Included in the Parent’s trade receivable balance are debtors with a carrying amount of $506k (2009: $1,123k) which are past du
Parent has not provided as the amounts are still considered recoverable. The Parent does not hold any collateral over past due
The below balances indicate the past due receivables which have not been provided for as the amounts are still recoverable. The
owned debtor who has a significant amount owing to the Group as indicated above for which management consider there is low cred
%
80
417
(92)
417
(92)
100
100
100
100
100
Total
4,769
5,094
4,769
5,094
2009
2009
Parent
12,709
12,709
–
–
–
–
–
–
–
–
%
80
2010
2010
100
100
100
100
100
Parent
12,709
12,709
Copyrights
Ownership and voting interest
–––
–––
–––
–––
–
–
417
(92)
417
(92)
4,769
5,094
4,769
5,094
Group
2009
Ltd and Unidata Pty Ltd are incorporated in
Software
–
–
Group
2010
Principal activities
Vessel charters for scientific research
Scientific research and consultancy services
Scientific research and consultancy services
Supplier of environmental technology products
Non-trading shell company
Non-trading shell company
(continued)
intangibles
National Institute of Water & Atmospheric Research Ltd and Group
NOTES TO THE FINANCIAL STATEMENTS as at 30 June 2010
18. Identifiable
Parent
in thousands of New Zealand dollars
Cost
Balance as at 1 July 2008
Additions
Disposals
Currency movements
Balance as at 30 June 2009
Accumulated amortisation and impairment losses
Balance as at 1 July 2008
Amortisation
Impairment
Disposals
Currency movements
Balance as at 30 June 2009
Net book value at 30 June 2009
19. Investments
in thousands of New Zealand dollars
Investment in subsidiaries
Investments in subsidiaries
Name
NIWA Vessel Management Ltd
NIWA Australia Pty Ltd
NIWA Environmental Research Institute
Unidata Pty Ltd
NIWA Natural Solutions Ltd
EcoConnect Ltd
All subsidiaries have a balance date of 30 June.
NIWA Vessel Management Ltd, NIWA Natural Solutions Ltd, and EcoConnect Ltd are incorporated in New Zealand. NIWA Australia Pty
Australia. NIWA Environmental Research Institute is incorporated in the USA.
NIWA ANNUAL REPORT 2010
46 |
–
30
–
| 49 | 49
417
118
269
605
2009
(190)
(426)
(251)
227
4,119
(190)
9,985
(150)
2009
5,621
Parent
10,370
14,526
Parent
–
(13)
(13)
953
82
700
255
70
2010
1,394
1,509
(1,797)
1,489
1,676
2,393
2010
6,101
Parent
11,612
14,156
17,930
Parent
NIWA ANNUAL REPORT 2010
66
14
–
(193)
(18)
(193)
464
(122)
390
222
883
259
NIWA Group. All transactions with other
debts have been written off or forgiven
Group
2009
6,011
5,937
11,555
11,945
1,768
19,531
Group
2009
(13)
(13)
984
(19)
138
746
264
70
Group
2010
4,497
6,230
13,674
1,484
1,486
2,412
16,261
(1,668)
3,310
24,055
Group
2010
Related party transactions
Net loss/(gain) on disposal of property, plant, & equipment
24. Reconciliation of the profit for the period to net cash from operating activities
Depreciation and impairment
Amortisation of identifiable intangibles
Increase/(decrease) in unsecured loan
Net foreign currency (gain)/loss
Increase/(decrease) in deferred tax liability
Increase/(decrease) in payables and accruals and revenue in advance
Increase/(decrease) in employee entitlements
(Increase)/decrease in receivables and prepayments
(Increase)/decrease in inventory and uninvoiced receivables
(Increase)/decrease in taxation receivable
Increase/decrease in other financial assets and liabilities
in thousands of New Zealand dollars
Profit for the period
Add/(less) items classified as investing activities
Add/(less) non-cash items
Add/(less) movements in working capital items
Net cash flows from operating activities
25.
In addition to the disclosures in note 15 and 21, the Government of New Zealand (the Crown) is the ultimate shareholder of the
Government-owned entities are not considered to fall within the intended scope of related party transactions. No related party
during the year.
Key management personnel compensations
in thousands of New Zealand dollars
Short-term benefits
The table above includes remuneration of the Chief Executive Officer and all key management positions.
10
–
–
(9)
1
22
28
2009
157
724
242
1,123
2009
2009
4,686
2009
1,145
1,195
Parent
Parent
Parent
Parent
1
–
38
(1)
655
655
38
50
2010
161
373
572
2010
2010
4,048
2010
1,490
1,578
Parent
Parent
Parent
Parent
unt. The net carrying amount is
0
–
–
(9)
1
158
735
242
659
73
Group
2009
1,135
t which are unlikely to be recoverable.
Group
2009
Group
2009
4,686
the stage of completion in the statement
Group
2009
1,532
2,264
11
––––
(1)
–
196
38
373
607
655
655
510
65
Group
2010
Group
2010
Group
2010
4,138
Group
2010
1,974
2,549
receivables
National Institute of Water & Atmospheric Research Ltd and Group
NOTES TO THE FINANCIAL STATEMENTS as at 30 June 2010
Ageing past due but not impaired trade receivables
in thousands of New Zealand dollars
Between 60 and 90 days
Between 91 and 180 days
Over 181 days
Included in the provision for doubtful debts are individually selected debtors of $655k (2009: $1k) for the Group and the Paren
The provision recognises the difference between the carrying amount of these trade receivables and the expected recoverable amo
considered to approximate their fair value.
Movement in the provision for doubtful debts
in thousands of New Zealand dollars
Balance at the beginning of the year
Impairment loss recognised
Impairment losses reversed
Amounts written off as uncollectible
Amounts recovered during the year
22. Uninvoiced
in thousands of New Zealand dollars
Uninvoiced receivables
The amount of revenue unbilled at balance date is represented by ‘uninvoiced receivables’, which is stated at the proportion to
of financial position. Once this balance is invoiced it is transferred to trade debtors.
Management believe there are no significant concentrations of risk relating to this balance.
23. Inventory
in thousands of New Zealand dollars
Consumables
Finished goods
Work in progress
Total
Inventories are not pledged as security for liabilities, nor are any inventories subject to retention of title clauses.
NIWA ANNUAL REPORT 2010
48 |
| 51 | 51
Total
26,571
88,854
20,131
10,636
115,425
30,767
–
–
–
–
–
260
650
10,580
8,641
20,131
amortised cost
NIWA ANNUAL REPORT 2010
Financial liabilities at
–
––
–
–
–
–
––
–
3,099
18,786
4,686
26,571
Loans and
receivables
21
19
22
14
10
11
12
Note
Group
in thousands of New Zealand dollars
Balance at 30 June 2009
Assets
Cash and cash equivalents
Trade receivables
Investments
Uninvoiced receivables
Forward exchange derivatives
Total financial assets
Total non-financial assets
Total assets
Liabilities
Payables and accruals
Unsecured loans
Borrowings
Employee entitlements
Forward exchange derivatives
Total financial liabilities
Total non-financial liabilities
Total liabilities
Total
23,874
103,476
26,163
12,064
127,350
38,227
–
–
–
–
–
–
–
279
10,493
5,905
9,388
26,065
amortised cost
.
the target is to be delivered as a long-
of discounted cash flow analysis using
onal derivatives.
Financial liabilities at
ty
9.8% to 7.0%.
e development of the business.
arkets is determined with reference to
ance with valuation techniques based on
ir value.
–
–
–
–
28
28
–
–
–
–
98
98
Held for trading
–
–
–
–
–
–
–
–
2,396
17,312
4,138
23,846
Loans and
receivables
21
22
14
10
11
12
Note
maintains shareholders funds of not less than $50m of net tangible assets, and
reserves the right to review the facility in the event of a change in the shareholding structure.
to operate in a financially responsible manner so that sufficient operating funds are generated to maintain financial viabili
to provide an adequate rate of return on shareholders’ funds
to operate as a going concern.
1.
2.
The fair value of financial assets and financial liabilities with standard terms and conditions and traded on active liquid m
quoted market prices.
The fair value of other financial assets and financial liabilities (excluding derivative instruments) is determined in accord
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
the applicable yield curve for the duration of the instruments for non-optional derivatives, and option pricing models for opti
National Institute of Water & Atmospheric Research Ltd and Group
NOTES TO THE FINANCIAL STATEMENTS as at 30 June 2010
26. Financial instruments
Capital management
The Group has externally imposed requirements under the Crown Research Institutes Act 1992:
•
•
•
Specifically the Shareholding Ministers expect the targeted COMU return on equity to be 9.0%. The Ministers have indicated that
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
The Group’s policy is to maintain a strong capital base so as to maintain investor and creditor confidence and to sustain futur
The Group’s policies in respect of capital management and allocation are reviewed regularly by the Board of Directors.
The advance facility available from The National Bank is subject to two covenants:
Capital refers to the equity and borrowings of the Group and Parent.
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 Group has no level 3 financial instruments. The carrying value of all financial instruments is considered to approximate fa
Categories of financial instruments
Group
in thousands of New Zealand dollars
Balance at 30 June 2010
Assets Cash and cash equivalents
Trade receivables
Investments 19
Uninvoiced receivables
Forward exchange derivatives
Total financial assets
Total non-financial assets
Total assets
Liabilities
Payables and accruals
Unsecured loans
Borrowings
Employee entitlements
Forward exchange derivatives
Total financial liabilities
Total non-financial liabilities
Total liabilities
Fair value through profit or loss financial instruments are all level 2 of the hierarchy.
NIWA ANNUAL REPORT 2010
50 |
| 53 | 53
Total
39,043
72,219
27,559
9,309
36,868
111,262
–
–
–
–
–
–
–
–
–
–
–
12,709
12,709
accounted for at cost
NIWA ANNUAL REPORT 2010
Investment in subsidiary
due or avoid a possible past due status.
with financial institutions (cash and short-
$2,396k, uninvoiced receivables $4,138k,
s $1,401k, uninvoiced receivables $4,048k,
dit extended to third parties, and care is taken
titutions and counterparties dealt with. There
–
–
–
–
–
–
–
–
650
9,113
9,925
7,871
27,559
amortised cost
Financial liabilities at
–
–
–
–
–
–
–
–
2,094
18,504
4,686
1,050
26,334
Loans and
receivables
21
19
22
15
14
10
15
12
Note
in thousands of New Zealand dollars
Balance at 30 June 2009
Assets
Cash and cash equivalents
Trade receivables
Investments
Uninvoiced receivables
Intercompany
Forward exchange derivatives
Total financial assets
Total non-financial assets
Total assets
Liabilities
Payables and accruals
Borrowings
Intercompany
Employee entitlements
Forward exchange derivatives
Total financial liabilities
Total non-financial liabilities
Total liabilities
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, uninvoiced receivables, and transactions
term deposits and derivatives).
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 cre
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 ins
are no significant concentrations of credit risk.
The maximum exposure to credit risk for the Group is $23,874k (total exposed to credit risk, which is cash and cash equivalents
trade receivables net of provisions $17,312 and other financial assets $28k) (2009: 26,571k).
The maximum exposure to credit risk for the Parent is $23,698k (total exposed to credit risk, which is cash and cash equivalent
trade receivables net of provisions $17,112, intercompany $1,109k, and other financial assets $28k) (2009: $25,284k).
(Note 21, Receivables and prepayments, includes further analysis on 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
Total
36,407
79,034
29,750
9,903
115,441
39,653
–
–
–
–
–
–
–
–
–
–
–
12,709
12,709
accounted for at cost
Investment in subsidiary
–
–
–
–
–
–
–
–
8,874
5,905
6,303
8,570
29,652
amortised cost
Financial liabilities at
–
–
–
–
–
28
28
–
–
–
–
98
98
Held for Trading
–
–
–
–
–
–
–
–
1,401
17,112
4,048
1,109
23,670
Loans and
receivables
21
19
22
15
14
10
15
12
Note
National Institute of Water & Atmospheric Research Ltd and Group
NOTES TO THE FINANCIAL STATEMENTS as at 30 June 2010
Parent
in thousands of New Zealand dollars
Balance at 30 June 2010
Assets
Cash and cash equivalents
Trade receivables
Investments
Uninvoiced receivables
Intercompany
Forward exchange derivatives
Total financial assets
Total non-financial assets
Total assets
Liabilities
Payables and accruals
Borrowings
Intercompany
Employee entitlements
Forward exchange derivatives
Total financial liabilities
Total non-financial liabilities
Total liabilities
NIWA ANNUAL REPORT 2010
52 |
1
–
(1)
–
1
–
(1)
–
5
81
–
–
139
| 55 | 55
YEN
YEN
2009
2009
0.8059
0.6521
4.0726
0.9195
Parent
spot rate
Reporting date
35
–
USD
(219)
911
972
(206)
766
1,095
USD
(8)
2
2010
2010
131
(108)
(587)
0.8508
0.6936
4.4268
0.9550
Parent
spot rate
43
(19)
35
(16)
Reporting date
EUR
249
273
EUR
202
221
unts:
30 June 2009
30 June 2009
the above currencies to the amounts
0
–
–
NIWA ANNUAL REPORT 2010
ws, based on notional amounts:
equity by the amounts shown below.
120
101
est date on which the Group
same basis for 2009.
Group
2009
ts on an ongoing basis. In general,
ilities and has credit lines in place to
58
38
(67)
29
AUD
996
333
(247)
1,082
AUD
23
––––
117
145
(108)
(587)
–
–
–
–
–
–
–
–
Group
2010
YEN
YEN
USD
191
(121)
105
(151)
1,237
1,307
USD
1,197
1,151
16
–
(2)
14
16
–
(2)
14
EUR
30 June 2010
EUR
30 June 2010
34
77
(69)
AUD
992
315
(253)
(180)
1,054
AUD
The Group’s exposure to foreign currency denominated non-derivative financial instruments was as follows, based on notional amo
in thousands of New Zealand dollars
Cash balances
Trade receivables
Trade payables
Statement of financial position exposure
The Parent’s exposure to foreign currency denominated non-derivative financial instruments (excluding derivatives) was as follo
in thousands of New Zealand dollars
Cash balances
Trade receivables
Trade payables
Statement of financial position exposure
The following significant exchange rates applied:
in thousands of New Zealand dollars
AUD
USD
NOK
SGD
A 10% strengthening of the NZD against the following currencies at 30 June would have increased (decreased) the profit and the
This analysis assumes that all other variables, in particular interest rates, remain constant. The analysis is performed on the
in thousands of New Zealand dollars
AUD
EUR
USD
YEN
NOK
SGD
A 10% weakening of the NZD against the above currencies at 30 June would have had approximately an equal but opposite effect on
shown above, on the basis that all other variables remain constant.
Liquidity risks
Liquidity risk represents the Group’s ability to meet its contractual obligations. The Group evaluates its liquidity requiremen
the Group generates sufficient cash flows from its operating activities to meet its obligations arising from its financial liab
cover potential shortfalls.
The following tables detail the Group’s and the Parent’s contractual maturity analysis. The tables have been based on the earli
and the Parent can be required to pay.
6
(1)
–
–
–
–
–
–
349
20
367
2009
Group
2009
23,396
1,288
1,096
26,571
70
24
(8)
(14)
(1)
(1)
–5
2009
3.7%
2009
–
Fair value
2010
26
32
135
(655)
Group
2010
21,005
1,717
1,614
23,874
–
–
–
–
–
–
with a NZD contract value of
2009
isk.
d purchase of goods and services for
oreign currency arise. It is the Group’s
he Group:
3.75%
2.5%
y the Board. To manage these exposures,
ly affect the cost of borrowing and the return
2010
2010
2010
794
270
354
255
260
Contract value
4,387
–
–
–
–
–
–
2009
2010
355
243
243
3,244
1,101
4,249
Foreign currency
–
–
–
–
–
–
2009
2010
4.0903
4.0717
0.9761
1.0020
0.9530
0.9355
Average exchange rates
.
Tangaroa
National Institute of Water & Atmospheric Research Ltd and Group
NOTES TO THE FINANCIAL STATEMENTS as at 30 June 2010
The Group’s maximum exposure to credit risk by geographic regions is as follows:
in thousands of New Zealand dollars
New Zealand
Australia
USA
United Kingdom
Other European countries
Other Asia Pacific countries
Other regions
Provision for doubtful debts
Total credit risk
Interest rate risk
Interest rate risk is the risk that cashflows will fluctuate because of changes in market interest rates. This could particular
on investments.
The interest rates on the Group and Parent borrowings as at 30 June are as follows:
Borrowings
The interest rates on the Group and Parent investments as at 30 June:
Cash (on call)
The directors do not consider there is any significant exposure to interest rate risk.
All borrowings and intercompany balances 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 r
Currency risk
The Group undertakes transactions in foreign currencies from time-to-time, and, resulting from these activities, exposures in f
policy to economically hedge foreign currency trading transaction risks as they arise, unless explicitly authorised otherwise b
the Group uses forward foreign exchange contracts. At balance date the Group had forward foreign exchange arrangements in place
$6,320k) (2009: $nil).
The following table details the forward foreign currency exchange contracts outstanding as at 30 June 2010 for the Parent and t
in thousands of New Zealand dollars
Buy NOK
Less than 3 months
3 to 6 months
Buy SGD
Less than 3 months
3 to 6 months
7 to 12 months
13 to 18 months
The Parent and Group has entered into forward exchange contracts to economically hedge the exchange rate risk for the forecaste
the fit out of the RV
NIWA ANNUAL REPORT 2010
54 |
| 57 | 57
2009
532
532
1,466
1,835
4,968
2009
Parent
12,258
20,527
Parent
–
–
2010
2,101
1,861
4,804
2010
Parent
10,920
19,686
Parent
NIWA ANNUAL REPORT 2010
Group
2009
1,552
1,835
4,968
12,258
20,613
ears, with various options to extend.
Group
2009
1,670
1,670
Group
2010
2,187
1,861
4,804
10,920
19,772
Group
2010
6,034
6,034
Within 1 year
Between 1 and 2 years
Between 2 and 5 years
Over 5 years
Contracted, but not provided for
27. Commitments
27a. Operating lease arrangements
in thousands of New Zealand dollars
Obligations payable after balance date on non-cancellable operating leases:
Operating leases relate to office and laboratory facilities within New Zealand and Australia with lease terms between 1 to 11 y
27b. Capital commitments
in thousands of New Zealand dollars
Commitments for future capital expenditure:
28. Contingent liabilities
There are no material contingent liabilities that were identified during the normal course of activities (2009: $nil).
29. Subsequent events
There were no subsequent events.
476
70
476
650
70
650
Total
Total
9,113
9,925
7,871
10,493
5,917
9,388
Total
8,641
26,344
10,580
20,347
Total
8,874
6,303
5,917
8,570
29,734
27,559
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Later than 5 years
Later than 5 years
Later than 5 years
Later than 5 years
s drawn down at 30 June 2010
–
–
–
–
–
–
–
–
–
–
–
–
overnight placement and short-term
457
727
457
726
625
625
638
638
1,184
1,183
later than 5 years
later than 5 years
later than 5 years
later than 5 years
Later than 1 year and not
Later than 1 year and not
Later than 1 year and not
Later than 1 year and not
–
–
19
70
19
–
–
70
9,113
7,233
10,493
4,012
8,661
7,915
23,255
10,580
18,514
8,874
4,012
7,945
20,901
16,346
Less than 1 year
Less than 1 year
Less than 1 year
Less than 1 year
–
–
–
–
–
–
–
–
–
–
–
–
650
650
650
1,905
1,905
6,303
1,905
8,208
9,925
10,575
On demand
On demand
On demand
On demand
National Institute of Water & Atmospheric Research Ltd and Group
NOTES TO THE FINANCIAL STATEMENTS as at 30 June 2010
Group
in thousands of New Zealand dollars
As at 30 June 2010
Payables and accruals
Unsecured loan
Borrowings
Employee entitlements
Forward exchange contracts
Total
in thousands of New Zealand dollars
As at 30 June 2009
Payables and accruals
Unsecured loan
Borrowings
Employee entitlements
Total
Parent
in thousands of New Zealand dollars
As at 30 June 2010
Payables and accruals
Intercompany
Borrowings
Employee entitlements
Forward exchange contracts
Total
in thousands of New Zealand dollars
As at 30 June 2009
Payables and accruals
Intercompany
Borrowings
Employee entitlements
Total
Financing facilities
The Group has access to financing facilities; the total amount available is $11.5 million (2009: $4.9 million). $5.9 million wa
(2009: $0.65 million). The available amount of $11.5 million relates to an overdraft facility of $0.5 million (on-call) and an
advance facility of $11 million, (2009: $4.4 million). These facilities are available for the Parent company.
NIWA ANNUAL REPORT 2010
56 |
| 59
NIWA ANNUAL REPORT 2010
Natalie Schmitt, Australian Antarctic Division
Responsibilities of the Board of Directors and the Auditor
The Board of Directors is responsible for preparing the financial statements
in accordance with generally accepted accounting practice in New Zealand.
The financial statements must give a true and fair view of the financial position
of the Company and group as at 30 June 2010 and the results of operations
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
Financial Reporting Act 1993.
We are responsible for expressing an independent opinion on the financial
statements and reporting that opinion to you. This responsibility arises from
section 15 of the Public Audit Act 2001 and the Crown Research Institutes
Act 1992.
Independence
When carrying out the audit we followed the independence requirements of
the Auditor-General, which incorporate the independence requirements of the
New Zealand Institute of Chartered Accountants.
Other than the audit, we have no relationship with or interests in the Company
or any of its subsidiaries.
Andrew Dick
Deloitte On behalf of the Auditor-General Auckland, New Zealand
Matters relating to the electronic presentation of the audited
financial statements
This audit report relates to the financial statements of the National Institute
of Water & Atmospheric Research Limited and Group for the year ended
30 June 2010 included on the National Institute of Water & Atmospheric Research
Limited’s website. The National Institute of Water & Atmospheric Research
Limited’s Board of Directors is responsible for the maintenance and integrity
of the National Institute of Water & Atmospheric Research Limited’s website.
We have not been engaged to report on the integrity of the National Institute of
Water & Atmospheric Research Limited’s website. We accept no responsibility
for any changes that may have occurred to the financial statements since they
were initially presented on the website.
The audit report refers only to the financial statements named above. It does not
provide an opinion on any other information which may have been hyperlinked to
or from the financial statements. If readers of this report are concerned with the
inherent risks arising from electronic data communication they should refer to the
published hard copy of the audited financial statements and related audit report
dated 27 August 2010 to confirm the information included in the audited financial
statements presented on this website.
Legislation in New Zealand governing the preparation and dissemination of
financial information may differ from legislation in other jurisdictions.
the Company and group’s financial position as at 30 June 2010; and
the results of operations and cash flows for the year ended on that date.
AUDIT REPORT
comply with generally accepted accounting practice in New Zealand;
comply with International Financial Reporting Standards; and
give a true and fair view of:
-
-
determining whether significant financial and management controls are
working and can be relied on to produce complete and accurate data;
verifying samples of transactions and account balances;
performing analyses to identify anomalies in the reported data;
reviewing significant estimates and judgments made by the Board
of Directors;
confirming year-end balances;
determining whether accounting policies are appropriate and consistently
applied; and
determining whether all financial statement disclosures are adequate.
National Institute of Water & Atmospheric Research Ltd and Group
TO THE READERS OF
NATIONAL INSTITUTE OF WATER & ATMOSPHERIC
RESEARCH LIMITED AND GROUP’S FINANCIAL
STATEMENTS FOR THE YEAR ENDED
30 JUNE 2010
The Auditor-General is the auditor of National Institute of Water & Atmospheric
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 financial statements of the Company and Group, on her behalf, for the year
ended 30 June 2010.
Unqualified Opinion
In our opinion:
The financial statements of the Company and group on pages 20 to 57:
-
-
-
The audit was completed on 27 August 2010, and is the date at which our opinion
is expressed.
The basis of our opinion is explained below. In addition, we outline the
responsibilities of the Board 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
we considered necessary in order to obtain reasonable assurance that the
financial statements did not have material misstatements, whether caused by
fraud or error.
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 in forming
our opinion.
Audit procedures generally include:
-
-
-
-
-
-
-
We did not examine every transaction, nor do we guarantee complete accuracy
of the financial statements.
We evaluated the overall adequacy of the presentation of information in the
financial statements. We obtained all the information and explanations we
required to support our opinion above.
NIWA ANNUAL REPORT 2010
58 |
| 61
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www.niwa.co.nz
Operations Management Team
Ken Becker,
Regional Manager, Auckland
Dr Graham Fenwick,
Assistant Regional Manager, Christchurch
Dr Ken Grange,
Regional Manager, Nelson
Dr Julie Hall,
Assistant Regional Manager, Wellington
Dr Terry Hume,
Assistant Regional Manager, Hamilton
Dr Andrew Laing,
Regional Manager, Wellington
Charles Pearson,
Regional Manager, Christchurch/Lauder
Dr David Roper,
Regional Manager, Hamilton
Michael Stobart,
Regional Manager, Bream Bay
[email address]
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- ori & Oceans
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[email address]
Science Management Team
Nicholas Bain,
Manager, Commercialisation
Dr Mark Bojesen-Trepka,
[email address]
Manager, Marketing & Industry Engagement
Andrew Forsythe,
Chief Scientist, Aquaculture & Biotechnology
Alan Grey,
Manager, FRST Research
Dr Clive Howard-Williams,
[email address]
Chief Scientist, Freshwater & Coasts
Dr Barb Hayden,
Chief Scientist, Biodiversity & Biosecurity
Dr Rosemary Hurst,
Chief Scientist, Fisheries
Dr John McKoy,
Chief Scientist, Fisheries
(Retired October 2010)
Dr Murray Poulter,
Chief Scientist, Atmosphere, Natural Hazards,
& Energy
Douglas Ramsay,
Manager, Pacific Rim
Dr Charlotte Severne,
Chief Scientist, Ma
Dr Jochen Schmidt,
Chief Scientist, Environmental Information
Fred Smits,
General Manager, Vessel Operations
Dr David Wratt,
Chief Scientist, Climate
[email address]
[email address]
[email address]
[email address]
[email address]
[email address]
[email address]
[email address]
Executive Team
John Morgan,
Chief Executive
Dr Bryce Cooper,
General Manager, Strategy
Dr Rob Murdoch,
General Manager, Research
Kate Thomson,
Chief Financial Officer & Company Secretary
Geoff Baird,
General Manager, Communications & Marketing
Dr Barry Biggs,
General Manager, Operations
Dr Mary-Anne Dehar,
General Manager, Human Resources
Arian de Wit,
General Manager, Information Technology
- ori name Taihoro Nukurangi Ma
National Institute of Water & Atmospheric Research Ltd and Group
DIRECTORY National Institute of Water & Atmospheric Research Ltd
Directors
Christopher Mace (Chairman)
Craig Ellison (Deputy Chairman)
Ed Johnson
Dr Wendy Lawson
Dennis Cairns
Helen Robinson
Jason Shoebridge
NIWA ANNUAL REPORT 2010
NIWA’s
describes our work as studying the
waterways and the interface between the
Earth and the sky.
Taihoro is the flow and movement of water
(from tai ‘coast, tide’, and horo which means
‘fast moving’).
Nukurangi is the interface between the sea
and the sky (i.e., the atmosphere).
Together, we have taken it to mean
‘where the waters meet the sky’.
This ‘Annual Report’ is a companion
volume to NIWA’s 2010 Year in Review,
which gives an illustrated description
of NIWA’s environmental science.
That report is available at
www.niwa.co.nz/pubs/ar or request
a hard copy through [email address]
For enquiries, contact Michele Hollis,
Communications Manager,
[email address]
60 |
National Institute of Water & Atmospheric Research Ltd
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