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GNS Science Annual Report 2010
Reporting and Financial Statements
Reporting and Financial Statements
34 CorporateGovernance36 CRICapabilityFundReport41 ReportoftheDirectors42 IncomeStatement43 StatementofComprehensiveIncome43 StatementofChangesinEquity44 BalanceSheet45 StatementofCashFlows46 NotestotheFinancialStatements61 PerformanceIndicators63 StatementofResponsibility64 AuditReport65 Directory
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GNS Science Annual Report 2010
Corporate Governance
Overview
TheBoardandmanagementofGNSSciencearecommittedtoensuringtheCompanyanditssubsidiariesmaintainbestpracticegovernanceprinciplesandadheretothehighestethicalstandards.ThebasisfortheseissetoutinaBoardCharterandinpoliciesandproceduresestablishedandmaintainedbytheCompany.
Role of the Board and management
TheBoardisresponsibletotheshareholdingministersfordirectingthemanagementofthebusinessandaffairsofGNSScience,including:
• establishingtheCompany’sobjectives
• developingmajorstrategies
• managingrisks
• determiningthekeypolicies
• monitoringmanagement’sperformance.
TheBoarddelegatesmanagementoftheday-to-dayaffairsandresponsibilitiesoftheCompanytotheChiefExecutive.TheChiefExecutiveleadstheExecutiveManagementteamwhoseroleistoimplementthestrategiesforachievingtheCompany’sobjectives.AformaldelegatedauthoritiespolicysetstheoperationalandexpendituredelegationswithinwhichtheChiefExecutiveandmanagementoperate.
Appointment of Directors and composition of the Board
UndertheCompany’sConstitution,theBoardcancompriseuptoninenon-executiveDirectors.Directorsareappointedbytheshareholdingministers–theMinisterofFinanceandtheMinisterofResearch,Science,andTechnology.Thetermisgenerallythreeyearswithreappointmentforfurthertermsatthediscretionoftheshareholdingministers.TheChairmanandDeputyChairmanareappointedbytheshareholdingministers.
DuringtheyeartheBoardconsistedofaChairman,DeputyChairmanandfiveDirectors.Profilesofthecurrentmembersaresetoutonpage30.
Onappointment,DirectorsreceiveguidelinesontheGovernment’sexpectations,whichareinadditiontothoserequiredbytheCompaniesAct1993.TheyalsoreceiveaDirectors’ManualwhichcontainskeyinformationontheCompanyanditssubsidiaries,theBoardCharter,TermsofReferenceforthesubcommitteesoftheBoard,detailsofDirectors’andOfficers’insurance,theDeedofIndemnityandcopiesofrelevantActs.NewDirectorsalsohavethebenefitofaninductionprogrammetoprovidethemwithanunderstandingoftheCompany’soperations,businessandthemarketsinwhichitoperates.
Operation of the Board
TheBoardChartersetsouttheframeworkfortheBoard’soperation.
TheBoardhastwostandingcommittees–theAuditandRiskCommitteeandtheRemunerationCommittee.BothcommitteesoperateinaccordancewithagreedTermsofReference.
Directors’ meetings
ThefullBoardhad10formalmeetingsduringtheyearended30June2010.AnadditionalseparatemeetingwasheldduringtheyearwithseniormanagementtodiscusstheCompany’sstrategicdirectionandlong-termgoals,aspartofthedevelopmentoftheCompany’sStrategicPlanandStatementofCorporateIntentforthe2011financialyear.Telephoneconferencecallswerealsoheldduringtheyeartodiscussparticularissues.
TherewasanongoingprogrammeofsitevisitsandpresentationstotheBoardbymanagementandsciencestafftoenableDirectorstokeepabreastofkeyaspectsoftheCompany’sactivities.
Audit and Risk Committee
TheAuditandRiskCommitteeassiststheBoardincarryingoutitsresponsibilitiesundertheCompaniesAct1993,PublicFinanceAct1989,CrownResearchInstitutesAct1992,FinancialReportingAct1993andCrownEntitiesAct2004.MembersofthecommitteeinthelastfinancialyearwereRossButler(Chair),ConAnastasiou,JaneTaylorandJohnWalters.TomCampbellreplacedConAnastasiouasamemberofthecommitteeonCon’sretirementfromtheBoard.AllDirectorsareentitledtoattendthemeetings.TheChiefExecutive,theChiefFinancialOfficer,theInternalAuditorandrepresentativesofDeloitte,theexternalauditors,arenormallyinattendance.
Thecommitteemetthreetimesduringthepastfinancialyear.Itreviewedanddiscussedtheexternalauditplanandtheexternalauditreport,theriskassessmentdocument,theinternalauditplanandinternalauditreports,andthesix-monthlystatutorycompliancereports.ItalsoreviewedandrecommendedtothefullBoardtheapprovalofthehalf-yearlyandannualfinancialstatements,amendmentstothedelegatedauthoritiesandcapitalexpenditurepolicies,andamendmentstotheInternalAuditCharter.Thecommitteemetseparatelywiththeexternalauditorforapartofeverymeetingwithoutmanagementpresent.MinutesofthecommitteemeetingsweretabledatthesubsequentBoardmeetingsandkeyitemswerediscussedandresolvedbythefullBoard.
Remuneration Committee
TheRemunerationCommitteereviewsandmakesrecommendationstotheBoardontherecruitmentoftheChiefExecutive,thereviewandsettingoftheChiefExecutive’sremuneration,andtheframeworkfortheremunerationoftheExecutiveManagersandthereviewoftheirperformance.MembersofthecommitteeinthelastfinancialyearwereConAnastasiou,EllenFörchandJohnHercus.TomCampbellandKenShirleyreplacedConAnastasiouandEllenFörchasmembersofthiscommitteeontheirretirementfromtheBoard.ThecommitteetakesadvicefromtheChiefExecutiveandtheGeneralManager,HumanResources,asappropriate.
Thecommitteemetonceduringtheyear.MattersdiscussedbythecommitteewerereportedbackatthesubsequentBoardmeetingandkeyitemswerediscussedandresolvedbythefullBoard.
Corporate Governance
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GNS Science Annual Report 2010
Meetings in the year to 30 June 2010
Board Audit and Risk Committee Remuneration Committee
Held Attended Held Attended Held Attended
ConAnastasiou 10 10 3 3 1 1
RossButler 10 9 3 3
TomCampbell 10 10 1*
EllenFörch 10 8 2* 1 1
JohnHercus 10 9 1 1
JaneTaylor 10 10 3 3
JohnWalters 10 10 3 3
*AllDirectorsareentitledtoattendAuditandRiskCommitteemeetings.
Conflicts of interest
EachDirectormakesafulldeclarationoftheirinterests.ThisisupdatedateachBoardmeeting.Whereaconflictofinterestexists,Directorsexcusethemselvesfromdiscussionanddonotreceivetherelevantpaperinrespectofthoseinterests.
Provision of professional services
Exceptinexceptionalcircumstances,BoardmemberswillnotprovideprofessionalservicestotheCompany.Thisistoavoidaconflictofinterest–actualorperceived.
NoDirectorsprovidedprofessionalservicestotheCompanyduringtheyear.
Independent professional advice
Directorsareentitled,withapprovalfromtheChairman,toobtainindependentprofessionaladvicerelatingtotheaffairsoftheCompanyortotheirduties,attheCompany’sexpense.
Noindependentprofessionaladvicewassoughtorobtainedduringtheyear.
Board evaluation
TheBoardevaluatesitsownperformanceandprovidestheresultsoftheevaluationtotheCrownOwnershipMonitoringUnit.
Corporate Governance
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GNS Science Annual Report 2010
CRI Capability Fund Report Fortheyearended30June2010
AsrequiredbyouragreementwiththeMinisterofResearch,Science,andTechnologywereportachievementsfromactivitiesweundertookwithCRICapabilityFunding.Ourshareofthisfundingforthefinancialyear,asspecifiedintheGovernment’sEstimatesofAppropriations,was$5.3million.
Capability and organisational performance
ThefundingsupportedfurtherdevelopmentoftheCompanythroughmaintenanceandenhancementofexistingcapabilities,andexplorationanddevelopmentofover-the-horizonpossibilities.Thesefallunderfivebroadcategories:(1)underpinningandbasicscience,(2)technologytransfer,(3)naturalhazards,(4)geologicalresources,and(5)environmentalresearch.Weachievedorover-achieved74ofthe88plannedindicators.
Thelargerpartoftheworkwastoinstallthenewacceleratormassspectrometer,andtomaintainandenhanceat-riskcapabilitiesingeologicalhazards,isotopescience,andgroundwater.Inaddition,weexploredover-the-horizonopportunitiesin3Dmapping,scientificdrilling,marineenergy,gashydrates,andgeothermalenergy.
Thefundinghasallowedustoimprove:(a)ourunderpinningscienceinearthquakes,volcanoes,tsunami,landslides,pastenvironmentsandisotopemethods,(b)ourapplicationsofscienceinhazardsassessment,energyandgroundwaterresourceassessment,climatechange,industrialmeasurementsystems,technologytransfer,andoutreach,and(c)ourdiscoveryscienceindeep-oceanexplorationandgeomicrobiology.WeoutlinetheseachievementswithshortillustrationscorrespondingtotheindicatorsgiveninourStatementofCorporateIntent2009-2010.
1 Underpinning and basic science
Economics (2 of 2 indicators achieved)
• Werecruitedaresearcheconomist.
• WedemonstratedlinksbetweenNewZealandeconomicdataanddynamicland-vegetationmodelsbyusingandmakingdecisionsaboutMotu’sLandUseinRuralNewZealandmodeloutto2050.Anothernewrecruitissupportingthedevelopmentofthebiogeophysicalmodellingrequiredtounderpintheeconomicanalyses.
3D geology mapping (3 of 3 indicators achieved)
• Weincreasedthenumbersandskillsofstaffusing3Dmodellingsoftwarethroughinternaltrainingcoursesandworkshopsonrelevantsoftwarepackages.Thishasallowedhydrocarbonsresearcherstoreplacemoreexpensiveoptions.WehaveevaluatedtheBritishGeologicalSurvey’sGSI3DsoftwareandimplementeditfortheHuttValleyaspartoftheIt’s Our Faultproject.WealsocontinuedourpartnershipwithaNewZealandsoftwareprovider.
• Weincorporated3DmappingmethodologyintotheGeologicalMapofNewZealandobjectiveofourNationallySignificantDatabaseprogramme.
• Weimprovedourdrill-holedatabasesbyintegratingIt’s Our FaultandDEVORAdrill-holedataintoPETLAB,followingminordesignchangestobothdatabasesandpreparationofatestdataset.WeverifiedthatimplementationofaGeoSciML‘gluer’servicetolinkstandalonedrill-holedatabasesisaviablesolutionforNewZealand.
Remotely sensed imagery (½ of 3 indicators achieved)
• Adesignforadigitalimagecataloguewaspartlydevelopedandcommercialoff-the-shelfoptionsarestillbeingevaluated.
• Duetotheresignationofakeystaffmember,nocross-traininginanalysisofopticalandsyntheticapertureradardatacouldbecompleted.TheseactivitieswillberesumedwhenanewlyappointedstaffmemberarrivesinOctober2010.
• Forthesamereason,imagerycouldnotbeappliedtoanynewapplicationsandnorwasanycapturepossibleoftheinfra-structurefootprintinanyurbanarearelatedtoRiskScapeneeds.
International scientific drilling (4 of 4 indicators achieved)
• WeexploredandenhancedtheoptionsformultinationaldrillingconsortiabyestablishingtheDrillNZconsortiumtomanageandcoordinateNewZealandparticipationinIODPandICDP.ThisinvolveddevelopinginternationallinkagesandoutreachlinkedtoIODPexpeditionsinourregion.WehostedtheJOIDES ResolutionportcallinWellington,withhigh-visibilitymediacoverage,goodattendancebyVIPs,andahighlysuccessfulholidayprogrammeforschoolpupils.WealsosuccessfullyhostedtheIODPSiteSurveyPanel.
• Weparticipatedindrilling-basedmultidisciplinaryresearchthroughtheIODPCanterburyShelfexpedition,makingamajorcontributionbycoordinatingmuchofthepaleontologicalwork.
• WeadvancedactiveICDPandIODPproposalsthroughworkshopsfordrillingtheAlpineFaultandtheHikurangimargin.PilotcorescollectedfortheLAKENZprojectareawaitinggeochemicalanalyses.
• Weexploredopportunitiesforexternalfundingofscientificdrillinginfrastructure(membership,administration,advisorypanels,workshops,databases,corestoragefacility)securinginterimfundingasacontributiontotheNewZealandmembershipfeetoIODP.ApreliminarycaseforDrillNZwassubmittedtotheMoRSTteamreviewingprioritiesforinvestmentinlarge-scaleresearchinfrastructure.
Crustal modelling (3 of 3 indicators achieved)
• Weheldaseminaroncurrentresearchonvolcano-faultinteractionstoidentifyoutstandingproblems.
• Weassessedmodelsofprocessesgoverningsubductionearthquakepotentialbydevelopingourprimarymodellingcode(PyLith)toenablesimulationsofsubductionzonestressanddeformation.Anumberofnewfeatureswereaddedtothecode,mostimportantlyfaultfriction.Initialinvestigationsintotheeffectsofmaterialpropertiesonslow-slipinversionshavebeenperformedandnewmesheshavebeencreated.Theseformthegroundworkforfuturestudiesofslowslip.
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• Wemadeprogressonintegratedvolcano-tectonicmodelsdemonstratingtheamplitudeanddistancetermsofstressperturbationsbytestingsolutionsformagmachamberdeformationusingthreedifferentmethodsthatallshowverygoodagreementforatestproblem.Themethodology,developedpreviouslyforvolcanomodellingtoincludetheeffectsoftopography,gravity,andplasticdeformation,isnowbeingusedtoinvestigatestressanddeformationatMt.Ruapehu,incollaborationwithVictoriaUniversityofWellington.
National Isotope Centre facility (9½ of 14 indicators achieved)
• Thehighlightachievementwasthesuccessfulinstallationandtestingofournewacceleratoranditsperipherals.Allworkhasnowbeentransferredtoit.Thismajorefforttookmoretimethanexpectedandresourcesweretransferredtothistaskfromthefollowingtwoprojects.
• Wemadeonlylimitedprogressinplanningimprovementstoradiocarbonsampleprocessing.VisitstotwoUSlaboratorieshelpedustofocusonusingnewmethodsofconvertingCO2tographite,takingintoaccountthedifferentcharge-stateandon-linecorrectionswewillusewithournewaccelerator.
• Wealsodeferredstepcombustionforradiocarbonmeasurementinordertofocusoninstallingthenewaccelerator.
• Theautomatedcombustionsystemisnowfullyoperationalforthed13C/CO2collectionmethodfor14Csamples,withverygoodtestresults.Thenextstepswillbetotesttheapplicabilityofthismethodforverysmallsamples,soilsandsediments,andveryoldsamples.
• WecompletedtestingseveralmethodsforimprovingNandOisotopemeasurementfornitrates.Noneproducedimprovementoverourcurrentmethodandtheprecisionisstilllessthanweoriginallydesired.Overseaslaboratorieshavehadasimilarexperience.
• WesuccessfullydevelopedandimplementedamethodformeasuringSisotopesinorganicmaterial.
• WedevelopedCompoundSpecificIsotopeAnalysisofHisotopesforhydrocarbonliquidsandgases.Ongoingfine-tuningwillensureHisotopecomparabilitybetweensamples,withaparticularfocusoncomparabilitybetweenoilsandcondensates.
• Wedevelopedhalfoftheisotopereferencematerialweplannedto,withcompletionofreferencematerialsforNO3,aswellasHandOinsolidsamples.Anewemployeehascompletedworkonstatisticalscriptstobetterinterpretresultsofunknownsagainstreferencematerials.
• Afterscanningthemarketwedeterminedthatforthecomingperiod,ratherthanpurchasinganexpensivesystem,anin-housedatabasewouldsufficeforthestableisotopes,waterdating,andthenewAMSsystem.
• The7thQuaternaryTechniquesshort-coursewasconductedhighlysuccessfully,with27studentparticipants.
• WepreparedsomesamplesforC,N,andSisotopesforairparticulateanalysisbuttheprojectwassetasidetofocusontheothertaskslistedhere.
• SupportwasprovidedtotheFRST-fundedLand-to-WaterNitrogenTransfersprogrammetoup-skillstaffinunderstandinggroundwater-surfacewaterinteractionsasappliedtoisotopemethodsfortrackingthesourcesandfateofnitrate.
• Wesupportedresearchonisoscapesandunderstandingofgroundwater-surfacewaterinteractionsatthenationalscale,throughregularmonthlyanalysesofwaterfromtheNIWArivermonitoringprogramme.Preliminaryisoscapemapsandinterpretationshavealsobeenmade.
• Wedeterminedthatweshouldprogressourfoodresearchcapability.Thisdecisionwasunderpinnedbyprogressoneggverification,adulterationofhoney,andidentificationofthesourcesofnitratecontaminationofmilk.ThisdecisionwasstronglysupportedbytheJuly2010FRSTpanelwhoreviewedourNationalIsotopeCentre.
2 Technology transfer
Intelligent measurement systems for industry (4 of 4 indicators achieved)
• Wemaintainedourservicelevelsforcustomersandreceivedpositivecustomerfeedback.
• Theneedforanadditionalion-beamanalysisspecialistoperatorwasmetintheinterimbytraininganexistingstaffmemberuntilanewappointeearrivesduring2010/11.
• Wehavedevelopedtheproof-of-conceptforthreenewideasthatcouldbecapableofcommercialapplication,includinghumidityandlightsensors,fieldemitterprototypes,andaminiaturisedscintillationdetector.
• Twonewresearchprogrammes/commercialproductswereestablished:(1)anairsamplingconceptforroadtunnels;and(2)acontinuoussystemformicrowavepyrolysisofwasteproducts.Inaddition,anotherprojectundertheumbrellaoftheMaterialsAccelerator(hostedbyTheUniversityofAuckland)isinthefinalstageofapproval.
Pre-seed portfolio supplement (1 of 1 indicator achieved)
• Aportfolioofeightprojectsisinprogress:basinmodellingsoftwareBASSIM,non-invasivescanningdevicePortaScan,anX-raysource,ZnOlightemittingdiode,AlScalloy,air-particulatetracking,nanotechnologygassensors,andaGISpolygonmerger.
Ma-ori research (2 of 2 indicators achieved)
• TheMa-taurangaMa-oriAdvisoryGroupheldfourhuifocusingonidentifyingfundingandinvestmentopportunities.
• OneworkshopforstaffwasheldatAvalonandoneatWairakei,andafocusedsessionwasheldwiththeAdvisoryGroupduringthedevelopmentofproposals;inaddition,tworefreshercoursesonproposaldevelopmentandinitialthinkingwereheldwithkeystaff.
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Outreach (5 of 5 indicators achieved)
• Oureducationaloutreachpositionisnowfull-timeandpermanent.
• Weenhancedoureducationalandpublicoutreachwebsitecontent,initiallyfocusingonvolcanoesandfossils.
• TheGNSScienceYouTubechannelnowhosts23educationalvideos.VideofootageofdinosaurfootprintswasusedbyNelsonMuseumandTePapaintheNZ Fossils: Dead Precious! exhibitionaswellasonTVnewsbroadcasts.FootageoftheoceandrillingshipJOIDES ResolutionwasalsousedonTVnews.
• WeestablishedsuccessfulrelationshipswithMuseumofCityandSeaforaschoolholidayprogramme,aswellascontinuedworkwithTePapaandRivertonMuseum.
• WehostedthreeRoyalSocietyofNewZealandteacherfellows.
3 Natural hazards
Volcanology (4 of 5 indicators achieved)
• TheneedformorepetrologycapabilityisbeingaddressedbysupportingoneofourstafftoundertakePhDstudiesattheUniversityofBristol,UK;intheinterim,theneedwasfilledbyotherstaffmemberswhodeferredotherwork.
• AcontinuousgravitymeterisnowoperatingonWhiteIsland,afterverysuccessfultestingatWaimangu.
• TwonewoverseasrecruitswithvolcanicgasmonitoringandgeodeticskillsarenowattunedtoNewZealandconditions.Thegeochemistisdevelopingnewprogrammesusingradongasanalysis.ThegeodesistisnowwellintegratedandhaswonEQCfunding.
• AfeasibilitystudyonslopefailuremodelsforTaranakivolcanoisessentiallycomplete,withkeyfactorscontrollingthegenerationoflargescaleslipsbeingidentified.AsamplesectionthroughtheconeatTaranakihasbeenusedtostartmodellingthecurrentstateofthecone.Themodellingworkwillfinishearlyin2010/11.
• Aninitialreviewofinformationontheuseofdeformationandboreholegroundwatertoassessafactorofsafetyfortheconehasbeencompleted,butresultsfromtheslope-stabilitymodellingarerequiredbeforeareasofinterestcanbeidentified.Thiswillbecompletedin2010/11.
Geotechnical research (2 of 3 indicators achieved)
• Therecruitmentofanengineeringgeologistiswell-advanced,aftertwoextensiveinternationalsearches.
• Supportwassecuredfromuniversitiesforthelandslidedatabaseprojectandasuccessfulresearchforumwasheld.Inaddition,wehavealreadyachievedsomeofthecomingyear’sworkinleadingthecoordinationofuniversityandotherCRIresearchingeotechnical,engineeringgeology,andlandslideareasundertheumbrellaoftheNaturalHazardsResearchPlatform.
• Thespecificationsforthelandslidedatabaseweredetermined,andthedatabasebuildingisscheduledforthecomingyear.
Tsunami modelling (2 of 2 indicators achieved)
• Wemaintainedtheskillstocollect,processandinterpretdataonpasttsunami,viafieldsurveys,tidegaugemeasurements,andhistoricalobservations.Specificworkincluded(a)fieldinvestigationoftracesofthe1947Gisbornetsunami,(b)improvementtomethodsofinputtingsea-floordeformationtoenablefasterreal-timemodellingafterourexperiencewiththe2009Samoatsunami,and(c)presentationofmodellingresultstotheAsiaOceaniaGeosciencesSocietymeetinginSingapore.
• WecontinueddevelopmentandvalidationoftheComcotcodeinorderforitremainoneoftheforemosttsunamipropagationandinundationcodesintheworld.Enhancementsweremadeto(a)thenonlinear-nonlinearcouplingscheme,(b)thefrequencydispersioncalculation,(c)theoutputfunctions,(d)themovingboundaryscheme,(e)thelandslidemodel,(f)thecalculationofnestedgrids,and(g)theevaluationofforcesonstructures.Wealsoincorporatedvariableslipcapabilityandparallelisedthecode.Thesemodificationswereextensivelytestedandappliedtoregionalstudies.Wealsomadeseveralconferencepresentationsandpreparedseveralpublications,includingonesubmittedtoNatureontherecentSamoanearthquakesandtsunami.
Time varying hazard and risk (2 of 2 indicators achieved)
• Werecruitedastatisticalseismologist.
• Weenhancedtherangeofforecastmodelsbeingdevelopedandtested.Inparticular:(a)wedevelopedanewshort-termforecastingmodelandhavepartiallyinstalleditinthetestingcentre;(b)wecontinuedworkonnewmodelsderivedfromtheEEPASmedium-termforecastingmodel,namely(i)ERDEEP,whichadjuststhemodelforthelocalseismicityrate;(ii)EAS,whichallowsforaftershocksofpredictedevents;and(iii)amodelwhichtakesaccountofdifferentearthquaketypesinsubductionzones;and(c)amodel(STEP-EEPAS),whichcombinesEEPASwiththeshort-termforecastingmodelSTEP,wassubmittedtothetestingcentreasanothernewshort-termmodel.
Disaster risk reduction (1 of 1 indicator achieved)
• OuractiveparticipationinaGlobalEarthModelworkinggroupincluded:(a)attendinginternationalmeetings;(b)devisinginternationalfundingstrategies;and(c)collaboratingwiththedatacollectionprocessforthePadangpost-earthquakelossesinordertoassessthemeritsofobservingstreet-frontdamage.
4 Geological resources
Marine energy (2½ of 4 indicators achieved)
• WeassessedthetidalenergyresourceofCookStrait,withtheresultsforminganMScthesis.
• WeestablishedcontactsandcollaborationswithgroupsinNewZealandwhoareinterestedinmarineenergyingeneral,andinCookStraitparticularly.
• Weformedourinternalresearchteamoffourparticipatingscientists,andinthecomingyearwewilllooktoincludingscientistsfromotherinstitutions.
• Thefieldexperimentalprogrammeisyettocommence,asessentialequipmentisnotyetavailable.
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Airborne geophysics (1 of 1 indicator achieved)
• Wedevelopedandappliednewinversiontechniquesforon-shoreaeromagneticdatafromtheTaupoVolcanicZone.BothCurie-depthandapparentmagnetisationmapswereproducedfromcommercialsurveydata.
Seabed and subsurface mapping and resource characterisation (4 of 4 indicators achieved)
• Wedevelopednewgeophysicalhardware/softwareforoffshoremineralexploration,bywritingandtestingsoftwareforbothCurie-depthandapparentmagnetisation.WeareabouttocommenceanupgradeofthemarinegravitymeterprovidedtousbytheRoyalNewZealandNavy.
• Wecontinuedupgradingmarinedatabases,completingthegeophysicalmetadatacompilation.
• Weinterpretednewhighresolutionmarinegeophysicaldata,presentingresultsataconferenceandpreparingareportforLINZ.
• WepresentedtwopapersdescribingtheforwardmodellingmethodologyofcharacterisingtheseafloorattheGeohabitatsconference.
Marine geochemistry (0 of 1 indicator achieved)
• Wecouldnotdeveloprobusttechniquesforunderseaventfluidandplumeanalysisbecauseofinstrumentfailure.However,weidentifiedthesourceoftheproblemandthesupplierisworkingontheissue.
Interpretation of subsurface geophysics and geology (3 of 3 indicators achieved)
• Sixstaffmembersreceivedtraininginavarietyofnewsoftwarepackagesusedbythepetroleumindustry.
• OnestaffmemberreceivedtrainingininversionandAVOanalysis,andwecompletedoneprojectforindustry.
• Tenstaffreceivedtraininginimage-loganalysis,andwesubmittedforpublicationamanuscriptontrackingmethane.
Geothermal sector research skills (2 of 2 indicators achieved)
• Wereviewedremotesensingtechniques.Previouslyusedinfraredtechniques,needingon-groundcalibration,arenowbeingsupersededbyradiometricimagingthatrecordsabsolutetemperaturedata.Wehavealsolearnttheimportanceofrecognisingsourceemissivityandatmosphericabsorptioneffectsonthedata.Thetechnologyhasthepotentialforveryhighresolutionwitha20cmpixelsize.
• Weachievedrefineddatahandling,fasterprocessing,andfasterresultvisualisation.Wecompletedanexampleofauser-selectablemap-imagelocator,anddevelopedthermalinfraredimagemosaickingmethods.Wedevelopedcodingtoidentifyimagesthatrevealtemperaturesindicativeofthermalfeatures.Usingthesemethods,wesuccessfullycreatedmapsoftemperatureforfourgeothermalfieldsintheTaupoVolcanicZone.
Gas hydrates characterisation (1 of 1 indicator achieved)
• WesecuredadditionalfundingfromFRSTforgashydrateresearch.Inaddition,wemadeprogressinestablishingournewresearchprogrammeonNewZealand’sgashydrateresources,withtheconfirmationofamarinesurveytobeconductedin2011,byhostingtheinternationalFieryIceconference,bypreparingareportforanoptionsanalysisforMED,andbysubmittingaresearchpaperforpublication.
Geomicrobiology (5 of 6 indicators achieved)
• Werecruitedanewmemberofourteam.
• Weaddedtoourteam’spublicationrecordwithtwopublishedpapers,onemanuscriptinpress,andtwoothermanuscriptshavingbeensubmitted.
• Wecouldnotstrengthenlinkstobiotechnologyindustrytotheextentwehopedbecausethecompaniesinquestionhavestatedtheyhavenocurrentrequirementsinourspecialistresearcharea.However,wearemaintainingcontactwiththemtotakeadvantageoffutureopportunities.
• Weinvestigatedandinitiatednewscreeningmethodsforpotentialtargetmoleculesviagenomicandbiochemicaltechniques.
• Weidentifiedseveralpotentialtargetmoleculesforindustrialdevelopment.
• Wedidnotidentifyanytargetspeciesinourculturecollectiontoscreenforbioactivecompoundsofinteresttobiotechnologypartners.Instead,wefocusedonworkingwithtwootherCRIstofacilitatecommercialuptakeofbioactivemolecules.Thesecollaborationshaveenabledtheidentificationofsixpreliminarytargetsforbioactivityscreeningforfuturecommercialinterest.
Bioproxies: proxies for determining biological and environmental changes (2 of 2 indicators achieved)
• Weestablishedtheappropriateleveloffilteringforthecost-effectiveanalysisofthequalityofhoneyusingpalynology.
• Wemadesignificantprogressinintegratingpaleodepthestimatesfrompaleontologywithseismicfaciesanalysis.Ourpublicationonsea-levelchangesassociatedwithdepositionofaformationintheGreatSouthBasinshowsthatitswellsarebettersuitedforthisprojectthanTaranakiBasinwells.Wehavenowselectedsuitablewellsandourmicropaleontologyindicatesthatthereisgoodpotentialtorefinepaleodepthestimatesbasedonthefirstdown-holeoccurrencesofkeyindicatorspecies.
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5 Environmental research
Groundwater (1½ of 2 indicators achieved)
• Wemaintainedourabilitytoprovidegroundwatersciencetolocalgovernmentend-users.Thesearespecifically:(a)groundwatermodelling,includingassessingtheeffectofshiftingurbanwatersupplywelllocationsontheWaimeaPlains,anddevelopingasteady-stategroundwater-streammodeltodeterminetheeffectofgroundwaterabstractiononspring-fedstream-flowintheLakePoukawacatchment;(b)3DgeologicalmodellingoftheWairauPlainandoftheHorowhenuaarea;(c)groundwater-surfacewaterinteractionsincludingafieldinvestigationofgroundwater-surfacewaterinteractionsinRuataniwhaPlain,andhydrochemicalclassificationofgroundwaterandriverstateoftheWellingtonRegionalCouncilenvironmentmonitoringsites.
• Weachievedonlyabouthalfourplannedprogressinreplacingourtritiumenrichmentandanalysissystem.Thenewelectrolysiscontrolunitisinplaceandwearenowfixingsoftwarebugs.Wecommissionedthenewlasersystemforanalysingdeuteriumconcentrationsinenrichedsamplesanditisworkingverywell.OurnewQuantuluscounterhasnotyetbeendelivered,butthemanufacturerhascompletedperformancetestingforus.Wearestillseekingappropriateimpurity-freematerialfortheconstructionofreplacementelectrolysiscells.
Predicting climate change (5 of 6 indicators achieved)
• Wewereunabletotransferradiometricdatingskillstojuniorstaffduetohighworkloads.
• Inordertoraisepublicawarenessofclimatechangeissues,weintegratedresearchresultsintotheNewZealandClimateChangeCentreprogrammethroughparticipationinconferences,workshopsandseminars.Wealsocompletedanoverviewofthekeyevidenceforhuman-inducedclimatechange,arebuttalofthemaincriticismsofthetheory,andadiscussionofsomeoftheuncertainties.Thisreportisbeingadaptedforuploadingtoourpublicwebsite.
• WeintegratedglacialgeomorphicmappingintoFRST-fundedresearchontheimpactsofclimatechangeonthehydrologyofalpineregionsthroughaseriesofmapspreparedincollaborationwithanoverseasexpert.
• WecollectedpilotsedimentcoresfromMcKenzieBasinglaciallakes.TheywerescannedattheUniversityofOtago.IntegratedstratigraphicandpaleoclimateanalysiswascompletedatourAvalonlaboratory.
• Weimprovedandcalibratedthecontinuousmelterforobtainingandsplittingsamplesintheicecorelaboratory.Throughputtodateis6000samples.Inaddition,weimplementedandtrainedstaffinDEXAice-scanning,withTasmanGlaciericecorebeingscannedandAntarcticcoresbeingrescannedtoimproveresults.
• Webuiltandcalibratedtheminiaturetritiumenrichmentsystem,designedforicecoresamples.
Carbon capture and storage (2 of 2 indicators achieved)
• WecontinuedtoreceiveworkthroughtheAustralianCO2CRC,whichsupportsourworkonNewZealandprojects.Theprojectsundertakenthisyearinclude:riskassessment,apetrographicstudyofKapuniGroupsediments,faultingandgeomechanics,highCO2naturalanalogues,andimageanalysisofthenewOtwayBasinwellCRC2.
• OursocialscienceteamhasdesigneditsworkprogrammeonpublicperceptionsandknowledgeofcarboncaptureandstorageinpartnershipwithMEDtoensurethatitsneedsaremet.WegainedsignificantknowledgethroughattendingmeetingsinFranceandAustralia.Wealsohostedcommunityfocusgroupstobetterunderstandpublicperceptionsofcarboncaptureandstorage.
Inaddition,wehaveincreasedouroverallstaffskills–13staffattendedtheCO2CRCSymposiumin2009inordertobecomefamiliarwiththebroadrangeoftopicscoveredbyresearchinAustraliaandNewZealand,andtoenhanceresearchcontactsinthoseareas.
CRI Capability Fund Report (continued)
41
GNS Science Annual Report 2010
Report of the Directors Fortheyearended30June2010
TheDirectorshavepleasureinpresentingtheAnnualReportandauditedaccountsofGNSSciencefortheyearended30June2010.ThefinancialstatementshavebeenpreparedinaccordancewithgenerallyacceptedaccountingpracticeinNewZealandandtheFinancialReportingAct1993.
TheAuditor-Generalisthestatutoryauditorpursuanttosection21oftheCrownResearchInstitutesAct1992.TheAuditor-GeneralhasappointedDeloittetoauditthefinancialstatementsandtoexpressanopiniononthem.Theirreportissetoutonpage64.
Principal activity
GNSScience’sprincipalactivityistoconductscientificresearch,consultancyservicesandproductdevelopmentinearthsciencesandisotopetechnologiesinaccordancewiththeprinciplesfortheoperationofCrownResearchInstitutessetoutinsections4and5oftheCrownResearchInstitutesAct1992.
Dividend
Subsequentto30June2010,adividendof$100,000wasdeclaredinrelationtothelastfinancialyear(2009:$240,000).
Remuneration of Directors
Directors’feesaresetbytheshareholdingministersannually.FeespaidtoDirectorsduringtheyearwere:
2010 $
2009 $
ConAnastasiou 46,000 46,000
RossButler 28,750 28,750
TomCampbell 23,000 -
EllenFörch 23,000 23,000
JohnHercus 23,000 23,000
SarahSchiess - 23,000
JaneTaylor 23,000 23,000
JohnWalters 23,000 23,000
MikeWilliams - 11,500
Employee remuneration
Inaccordancewithsection211(1)(g)oftheCompaniesAct1993,thenumbersofemployeeswhoreceivedremunerationandotherbenefitstotalling$100,000ormore,in$10,000bands,duringtheyearwere:
$000 2010 2009
100-110 28 24
110-120 25 13
120-130 9 10
130-140 9 6
140-150 5 5
150-160 1 1
160-170 5 -
$000 2010 2009
170-180 2 -
180-190 - 1
190-200 2 1
200-210 1 1
210-220 - 2
230-240 1 1
240-250 2 -
380-390* - 1
410-420* 1 -
*ChiefExecutive
Board composition
ConAnastasiouandEllenFörchretiredfromtheBoardon30June2010.ClaireMcGowan,KenShirleyandSteveWeaverwereappointedtotheBoardon1July2010.
Subsidiaries
TheCompanyhasfivesubsidiarycompanies:IsoscanLimitedGeologicalSurveys(NZ)LimitedIsoscanFoodLimitedGeologicalRiskLimitedGNSScienceInternationalLimited
ConAnastasiouandAlexanderMalahoffweretheDirectorsofeachofthesubsidiarycompaniesforthefinancialyear.TomCampbellreplacedConAnastasiouasDirectorofthecompaniesfrom1July2010.
Donations
TheCompanydonated$2,000totheLifeFlightTrustduringtheyear(2009:$2,000).
Directors’ indemnity
TheCompanyhasinsurancecoverforDirectorsinrespectofanyactoromissionintheircapacityasaDirectoroftheCompany.DirectorshavedeclaredtheirinterestsinaDeedofIndemnitydated17October1996,wherebytheCompanyindemnifiesDirectorsagainstanyliabilityforanyactoromissionsincurredintheircapacityasaDirector.
Events subsequent to balance date
TheDirectorsarenotawareofanymatterorcircumstancesincetheendofthefinancialyearnototherwisedealtwithinthisreportthathas,ormayhave,asignificanteffectontheoperationoftheCompany.
Certification
TheDirectorsconfirmthattheCompanyhasoperatedinaccordancewiththeCrownResearchInstitutesAct1992andtheCompaniesAct1993duringtheyear.
Note: Directors’ disclosures can be found on page 30.
OnbehalfoftheDirectors
Tom CampbellChairman18August2010
Report of the Directors
42
GNS Science Annual Report 2010
Income Statement Fortheyearended30June2010
inthousandsofNewZealanddollars Note
GroupActual
2010
GroupBudget
2010
GroupActual
2009
CompanyActual
2010
CompanyActual
2009
Revenue
Researchcontracts 18 34,532 32,803 29,792 34,532 29,792
Consultancy,servicesandproducts 21,688 21,740 21,938 21,470 21,558
GeoNet 18 8,742 8,770 8,789 8,742 8,789
Otherincome 161 104 187 161 187
Total revenue 3 65,123 63,417 60,706 64,905 60,326
Expenses
Employeebenefitexpense 31,584 32,530 30,506 31,581 30,432
Operatingexpenses 4 22,615 19,504 19,369 22,547 19,110
GeoNetdirectexpenses 18 4,119 4,274 4,395 4,119 4,395
Depreciation 8 3,473 3,452 3,272 3,473 3,272
Amortisation 9 753 700 627 679 550
Total expenses 62,544 60,460 58,169 62,399 57,759
Profit before finance costs and tax 2,579 2,957 2,537 2,506 2,567
Financeincome 12 25 128 7 126
Financeexpense (207) (360) (423) (207) (423)
Net finance costs (195) (335) (295) (200) (297)
Profit before tax 2,384 2,622 2,242 2,306 2,270
Incometaxexpense (661) (787) (702) (635) (702)
Taxeffectofremovaloftaxdepreciationonbuildings (675) - - (675) -
Total income tax expense 5 (1,336) (787) (702) (1,310) (702)
Profit after tax 1,048 1,835 1,540 996 1,568
Financial Statements
43
GNS Science Annual Report 2010
Statement of Comprehensive Income Fortheyearended30June2010
inthousandsofNewZealanddollars Note
GroupActual
2010
GroupBudget
2010
GroupActual
2009
CompanyActual
2010
CompanyActual
2009
Profit after tax 1,048 1,835 1,540 996 1,568
Other comprehensive income
Cashflowhedges(netoftax) 7 483 - (483) 483 (483)
Total comprehensive income attributable to owners 1,531 1,835 1,057 1,479 1,085
Statement of Changes in Equity Fortheyearended30June2010
inthousandsofNewZealanddollars Note
GroupActual
2010
GroupBudget
2010
GroupActual
2009
CompanyActual
2010
CompanyActual
2009
Balanceat1July 20,386 20,973 19,569 20,150 19,305
Profitaftertaxation 1,048 1,835 1,540 996 1,568
Hedgingreserve 7 483 - (483) 483 (483)
Total comprehensive income 1,531 1,835 1,057 1,479 1,085
Lessdividend 16 - (225) (240) - (240)
Balance at 30 June 21,917 22,583 20,386 21,629 20,150
Financial Statements
44
GNS Science Annual Report 2010
Balance Sheet Asat30June2010
inthousandsofNewZealanddollars Note
GroupActual
2010
GroupBudget
2010
GroupActual
2009
CompanyActual
2010
CompanyActual
2009
Equity
Sharecapital 6 6,167 6,167 6,167 6,167 6,167
Hedgingreserve 7 - - (483) - (483)
Retainedearnings 15,750 16,416 14,702 15,462 14,466
Total equity 21,917 22,583 20,386 21,629 20,150
Represented by:
Non-current assets
Property,plantandequipment 8 29,114 29,629 24,670 29,114 24,670
Intangibleassets 9 3,865 2,250 3,347 3,702 3,111
Investments 10 194 76 194 204 204
Assetsheldforsale 1,209 1,319 1,282 1,209 1,282
Total non-current assets 34,382 33,274 29,493 34,229 29,267
Current assets
Cashandcashequivalents 632 1,074 1,183 438 995
Tradereceivables 11 5,600 4,640 6,607 5,502 6,567
Prepayments 1,200 - 1,010 1,200 1,010
Currenttax 132 - - 180 -
Intercompanyadvances 19 - - - 453 183
Workinprogress 3,102 4,600 3,158 2,724 3,133
Total current assets 10,666 10,314 11,958 10,497 11,888
Total assets 45,048 43,588 41,451 44,726 41,155
Non-current liabilities
Borrowings 12 5,013 7,600 4,150 5,013 4,150
Deferredtax 13 1,168 319 366 1,153 318
Non-currentprovisions 14 1,703 1,360 1,406 1,703 1,406
Total non-current liabilities 7,884 9,279 5,922 7,869 5,874
Current liabilities
Tradeandotherpayables 15 4,938 3,561 5,007 4,919 4,955
Currentprovisions 14 1,856 2,240 1,944 1,856 1,944
Revenueinadvance 8,453 5,700 7,796 8,453 7,796
Provisionforincometax - - 156 - 196
Provisionfordividend 16 - 225 240 - 240
Total current liabilities 15,247 11,726 15,143 15,228 15,131
Total liabilities 23,131 21,005 21,065 23,097 21,005
Net assets 21,917 22,583 20,386 21,629 20,150ForandonbehalfoftheBoard:
Tom Campbell Ross Butler Chairman Deputy Chairman 18August2010
Financial Statements
45
GNS Science Annual Report 2010
Statement of Cash Flows Fortheyearended30June2010
inthousandsofNewZealanddollars Note
GroupActual
2010
GroupBudget
2010
GroupActual
2009
CompanyActual
2010
CompanyActual
2009
Cash flows from operating activities
Cash was provided from:
Receiptsfromcustomers 66,843 63,227 62,019 67,036 61,506
Interestreceived 12 25 128 7 126
66,855 63,252 62,147 67,043 61,632
Cash was applied to:
Paymentstosuppliersandemployees (57,891) (56,059) (54,223) (57,787) (53,916)
Interestpaid (207) (360) (423) (207) (423)
Incometaxpaid (822) (787) (199) (851) (177)
(58,920) (57,206) (54,845) (58,845) (54,516)
Net cash flows from operating activities 17 7,935 6,046 7,302 8,198 7,116
Cash flows from investing activities
Cash was provided from:
Saleofproperty,plantandequipment 6 - 53 6 53
Repaymentofadvancesbysubsidiaries - - - - 78
6 - 53 6 131
Cash was applied to:
Increaseininvestments - - (118) - (118)
Advancestosubsidiaries - - - (270) -
Purchaseofproperty,plant,equipmentandintangibleassets
(9,115) (8,700) (4,695) (9,114) (4,663)
(9,115) (8,700) (4,813) (9,384) (4,781)
Net cash flows from investing activities (9,109) (8,700) (4,760) (9,378) (4,650)
Cash flows from financing activities
Cash was provided from:
Bankborrowings 863 2,900 - 863 -
Cash was applied to:
Repaymentofbankloans - - (2,550) - (2,550)
Dividendspaid (240) (240) (175) (240) (175)
(240) (240) (2,725) (240) (2,725)
Net cash flows from financing activities 623 2,660 (2,725) 623 (2,725)
Net (decrease)/increase in cash and cash equivalents
(551) 6 (183) (557) (259)
Opening cash and cash equivalents 1,183 1,068 1,366 995 1,254
Closing cash and cash equivalents 632 1,074 1,183 438 995
Financial Statements
46
GNS Science Annual Report 2010
Notes to the Financial Statements Fortheyearended30June2010
1. Statement of Accounting Policies
1.1 Reporting entity and activities
TheInstituteofGeologicalandNuclearSciencesLimitedisestablishedundertheCrownResearchInstitutesAct1992andtheCompaniesAct1993.Itssubsidiarycompanies,IsoscanLimited,IsoscanFoodLimited,GeologicalSurveys(NewZealand)Limited,GNSScienceInternationalLimitedandGeologicalRiskLimitedareestablishedundertheCompaniesAct1993.Thefinancialstatementshavebeenpreparedinaccordancewithsection17oftheCrownResearchInstitutesAct1992,thePublicFinanceAct1989,theCompaniesAct1993andtheCrownEntitiesAct2004.
FinancialstatementsfortheInstituteofGeologicalandNuclearSciencesLimited(the“Company”)andconsolidatedfinancialstatements(the“Group”)arepresented.TheconsolidatedfinancialstatementscomprisetheCompanyanditssubsidiaries(setoutinnote10).
TheprincipalactivitiesoftheCompanyaretoundertakegeoscienceandisotopescienceresearch,developmentandconsultancy,predominantlyinNewZealand.
1.2 Statement of compliance
ThesefinancialstatementshavebeenpreparedinaccordancewithNewZealandgenerallyacceptedaccountingpractice.TheycomplywithNewZealandequivalentstoInternationalFinancialReportingStandards(NZIFRS)andotherapplicableFinancialReportingStandards,asappropriateforprofit-orientedentities.ThefinancialstatementsalsocomplywithInternationalFinancialReportingStandards(IFRS).
Theaccountingpoliciessetoutbelowhavebeenappliedconsistentlytoallperiodspresentedinthefinancialstatements.
1.3 Significant Accounting Policies
1.3.1 Measurement basis
ThefinancialstatementsoftheGroupandCompanyhavebeenpreparedonanhistoricalcostbasis,exceptthatderivativefinancialinstrumentsarerecognisedbothinitiallyandsubsequentlyattheirfairvalue.
ThefinancialstatementsarepresentedinNewZealanddollarsandallvaluesareroundedtothenearestthousanddollars.ThefunctionalcurrencyoftheGroupisNewZealanddollars.
1.3.2 Subsidiaries – basis of consolidation
SubsidiariesarethoseentitiescontrolledbytheCompany.ControlisachievedwheretheCompanyhasthepowertogovernthefinancialandoperatingpoliciesofanentitytoobtainbenefitsfromitsactivities.
Thefinancialstatementsofsubsidiariesareincludedintheconsolidatedfinancialstatementsusingthepurchasemethodofconsolidation.Theeffectsofintra-grouptransactionsareeliminatedintheconsolidatedfinancialstatements.
InvestmentsinsubsidiariesarerecordedatcostintheCompany’sfinancialstatements.
1.3.3 Interest in joint ventures
Jointventuresarecontractualarrangementswithotherparties,inwhichtheCompanyoritssubsidiarieshavejointandseveralliabilityinrespectofcostsandliabilitiesandsharesinanyresultingoutput.TheCompany’sshareoftheassets,liabilities,revenuesandexpensesofjointventuresisincorporatedintotheconsolidatedfinancialstatementsonaline-by-linebasisusingtheproportionatemethod.
1.3.4 Critical accounting estimates and judgements
InapplyingtheCompany’saccountingpolicies,thereistherequirementforjudgements,estimatesandassumptionstobemadeaboutthecarryingamountsofsomeassetsandliabilities.Theestimatesandassumptionsarebasedonhistoricalexperienceandotherrelevantfactors.Actualresultsmaydifferfromtheseestimates.
Theaccountingpolicieswherecriticalestimatesandjudgementshavebeenmadeincludeproperty,plantandequipment,intangibleassets,impairmentofassetsandliabilities,employeebenefits,andthevaluationofworkinprogress.Refertoparticularaccountingpoliciesnote.
2. Particular Accounting Policies
2.1 Revenue recognition
2.1.1 Revenue from goods and services
Revenueearnedfromthesupplyofgoodsandservicesismeasuredatthefairvalueofconsiderationreceived.Revenuefromservicesisrecognisedbasedonthepercentageofworkcompleted.Anyamountsreceivedinrelationtoworknotyetcommencedarerecordedasrevenueinadvance.
Revenuefromthesupplyofgoodsisrecognisedwhenthesignificantrisksandrewardsofownershipofthegoodshavebeentransferredtothebuyer.
2.1.2 Royalties
Royaltyrevenueisrecognisedonanaccrualbasisinaccordancewiththesubstanceoftherelevantagreement.Royaltiesdeterminedonatimebasisarerecognisedonastraight-linebasisovertheperiodoftheagreement.
2.1.3 Interest revenue
Interestrevenueisaccruedonatimebasisattheeffectiveinterestrate.
2.1.4 Rental income
Rentalincomefromoperatingleasesisrecognisedonastraight-linebasisoverthetermofthelease.
2.2 Goods and services tax
ThefinancialstatementsarepresentedexclusiveofGST,exceptforreceivablesandpayables,whicharepresentedonaGSTinclusivebasis.
Notes to the Financial Statements
47
GNS Science Annual Report 2010
2.3 Work in progress
Workinprogressisvaluedbasedonthepercentageofworkcompleted,lessamountsinvoicedandprovisionsforunrecoverableamounts.Costincludeslabour,directcostsandanallocationofoverhead.Thevalueofworkinprogressisregularlyassessedwithreferencetocontractvaluesorestimatedlikelyfutureincomestreams.
2.4 Assets held for sale
Assetsareclassifiedasheldforsaleiftheassetisavailableforsaleinitspresentcondition.Theywillbeclassifiedaseitheranon-currentorcurrentassetdependingonwhetheritcanbereasonablyexpectedthatasalewillbecompletedwithinoneyear.
Theyarerecordedinthebalancesheetvaluedattheloweroftheircarryingamountandfairvaluelesscoststosell.
2.5 Property, plant and equipment
Property,plantandequipmentarestatedatcostlessaccumulateddepreciationandimpairment.Costincludesexpenditurethatisdirectlyattributabletotheacquisitionoftheitem.Assetshavebeendepreciatedonastraight-linebasisatratescalculatedtoallocatetheassets’costovertheirestimatedremainingusefullives.Freeholdlandisnotdepreciated.
Theestimatedusefullives,residualvaluesanddepreciationmethodsarereviewedannually,withtheeffectofanychangesinestimateaccountedforonaprospectivebasis.
Thegainorlossarisingonthedisposalorretirementofanitemofproperty,plantandequipmentisrecognisedintheincomestatement.
Thefollowingusefullivesareusedinthecalculationofdepreciation:
Buildings–woodenconstruction–concreteconstruction
40years50years
Plant,machineryandlaboratoryequipment 3–15years
Furniture,fittingsandofficeequipment 3–15years
ITequipment 4–8years
Vehicles 5years
Leaseholdimprovements 9–10years
2.6 Intangible assets
Softwareandpatentshaveafinitelifeandareincludedatcostlessaccumulatedamortisationandimpairment.Amortisationischargedonastraight-linebasisatratescalculatedtoallocatetheassets’costovertheirestimatedremainingusefullives.
Theestimatedusefullifeandamortisationmethodarereviewedannually,withtheeffectofanychangesinestimatebeingaccountedforonaprospectivebasis.
Thefollowingusefullivesareusedinthecalculationofamortisation:
Software 4–8years
Patents 4–17years
Intangibleassetsunderconstructionarecapitalisedatcostandarenotamortiseduntiltheassethasbeencompleted.
2.7 Impairment of tangible and intangible assets
Thecarryingamountsoftangibleandintangibleassetsarereviewedateachbalancedatetodeterminewhetherthereisanyindicationthatthoseassetshavesufferedanimpairmentloss.Ifanysuchindicationexists,referenceismadetotheasset’srecoverableamount.Therecoverableamountisthehigherofanasset’sfairvaluelesscoststosell,andvalueinuse.
Iftherecoverableamountofanassetisestimatedtobelessthanitscarryingamount,thecarryingamountoftheassetisreducedtoitsrecoverableamount.Animpairmentlossisrecognisedimmediatelyintheincomestatement.
Whereanimpairmentlosssubsequentlyreverses,thecarryingamountoftheassetisincreasedtotherevisedestimateofitsrecoverableamount,onlytotheextentthattheincreasedcarryingamountdoesnotexceedthecarryingamountthatwouldhavebeendeterminedhadnoimpairmentlossbeenrecognisedfortheassetinprioryears.Areversalofanimpairmentlossisrecognisedintheincomestatement.
2.8 Collections, library and databases
TheCompanyownsvariouscollections,libraryresourcesanddatabasesthatareanintegralpartoftheresearchworkundertakenbytheCompany.Thesecollectionsarehighlyspecialisedandthereisnoreliablebasisforestablishingavaluation.Theyhavethereforenotbeenvaluedforfinancialreportingpurposes.Thetwomajorcollectionsare:
TheNationalPaleontologicalCollection
TheNationalPetrologicalReferenceCollection
2.9 Financial assets
2.9.1 Classification of financial assets
Financialassetsareclassifiedintothefollowingcategories:‘financialassetsatfairvaluethroughprofitorloss’(FVTPL),‘heldtomaturityinvestments’,‘available-for-salefinancialassets’and‘loansandreceivables’.Theclassificationdependsonthenatureandpurposeofthefinancialassetandisdeterminedatthetimeofinitialrecognition.
FVTPLassetsaremeasuredatfairvaluewithanyresultantgainorlossrecognisedintheincomestatement.
TheCompanyholdsloansandreceivables.Thesearemeasuredatcostlessimpairment,orinthecaseoftradereceivables,reducedbyanallowancefordoubtfuldebts.
2.9.2 Impairment of financial assets
Financialassetsareassessedforindicatorsofimpairment.Financialassetsareimpairedwhenthereisobjectiveevidencethattheestimatedfuturecashflowsoftheassethavebeenimpacted.
Whenatradereceivableisconsidereduncollectible,itiswrittenoffagainsttheallowance.Subsequentrecoveriesofamountspreviouslywrittenoffarecreditedagainsttheallowancefordoubtfuldebts.Changesinthecarryingamountofdoubtfuldebtsarerecognisedintheincomestatement.
Notes to the Financial Statements
48
GNS Science Annual Report 2010
2.10 Financial liabilities
2.10.1 Classification of financial liabilities
Financialliabilities,excludingderivativefinancialinstruments,areclassifiedas‘otherfinancialliabilities’.
Otherfinancialliabilities,includingborrowings,areinitiallymeasuredatfairvalue,netoftransactioncosts.Otherfinancialliabilitiesaresubsequentlymeasuredatamortisedcost,withinterestexpenserecognisedonaneffectiveinterestbasis.
2.10.2 Effective interest rate method
Theeffectiveinterestratemethodcalculatestheamortisedcostofafinancialassetorliabilityandallocatesinterestincomeorexpenseovertherelevantperiod.Theeffectiveinterestrateistheratethatexactlydiscountsestimatedfuturecashreceiptsorpaymentsthroughtheexpectedlifeofthefinancialassetorliabilitytothenetcarryingamountofthefinancialassetorliability.
2.11 Derivative financial instruments
TheCompanyusesderivativefinancialinstruments,mainlyforwardexchangecontracts,tohedgeitsexposuretoforeignexchangeriskarisingfromitsoperations.TheCompanydoesnotholdorissuetheseinstrumentsfortradingpurposes.
Derivativefinancialinstrumentsarerecognisedbothinitiallyandsubsequentlyatfairvaluewithreferencetoobservablemarketinputs.
TheCompanydesignatesallinstrumentshedgingafirmcommitmentascashflowhedges.Attheinceptionofthehedge,theCompanydocumentstherelationshipbetweenthehedginginstrumentandthehedgeditemalongwithitsriskmanagementobjectivesforundertakingthehedge.Itperiodicallyevaluatestheeffectivenessofthehedge.Wherethehedgequalifiesaseffective,changesinthefairvalueoftheinstrumentaredeferredinequity.Theamountsdeferredarerecycledfromequitytotheincomestatementortothebalancesheetontherecognitionofthehedgedtransaction.
Whentheforecasttransactionthatishedgedresultsintherecognitionofanon-financialassetoranon-financialliability,thegainsandlossespreviouslyrecognisedinthehedgingreservearereclassifiedfromequityandincludedintheinitialmeasurementofthecostoftheassetorliability.
HedgeaccountingisdiscontinuedwhentheCompanyrevokesthehedgingrelationship,orthehedginginstrumentexpiresorissold,terminatedorexercised,ornolongerqualifiesforhedgeaccounting.Anycumulativegainorlossrecognisedinthehedgingreserveatthetimeremainsinequityandisrecognisedwhentheforecasttransactionisultimatelyrecognisedinprofitorloss.Whenaforecasttransactionisnolongerexpectedtooccur,thecumulativegainorlossthatwasrecognisedinthehedgingreserveisrecognisedimmediatelyinprofitorloss.
Movementsinthevalueofinstrumentsthatarenotdesignatedascashflowhedgesordonotqualifyaseffectivearerecognisedintheincomestatement.
2.12 Foreign currencies
TransactionsinforeigncurrenciesareconvertedattheNewZealandrateofexchangerulingonthedateofthetransaction.MonetaryassetsandliabilitiesatyearendareconvertedtoNewZealanddollarsattheexchangeraterulingatbalancedate.Allexchangedifferencesarerecordedintheincomestatement,exceptwhendeferredinequitywhenhedgeaccountingisapplied.
2.13 Employee benefits
Liabilitiesforwagesandsalaries,annualleave,longserviceleaveandretirementleavearerecognisedwhenitisprobablethatsettlementwillberequiredandtheyarecapableofbeingreliablymeasured.
Employeebenefitstobesettledwithintwelvemonthsarereportedattheamountexpectedtobepaid.Employeebenefitsnotexpectedtobesettledwithintwelvemonthsarereportedatthepresentvalueoftheestimatedfuturecashoutflows.
Provisionsforlongserviceleaveandretirementleavedependonanumberofassumptionssuchastheexpectedemploymentperiodofemployees,salarylevelsandthetimingofemployeestakingleave.WhenmeasuringemployeebenefitliabilitiesthetenyearNewZealandGovernmentbondrateisusedastheappropriatediscountrate,thesalaryincreasefactorisbasedonforecastinformationandemployeepatternofleaveisdeterminedafterconsideringhistoricaldata.
2.14 Taxation
Incometaxexpenserepresentsthesumofthetaxcurrentlypayableanddeferredtax.
Currenttaxiscalculatedbyreferencetotheamountofincometaxpayableorrecoverableinrespectofthetaxableprofitorlossfortheperiod.Currenttaxforcurrentandpriorperiodsisrecognisedasaliability(orasset)totheextentthatitisunpaid(orrefundable).Taxableprofitdiffersfromprofitasreportedintheconsolidatedincomestatementbecauseitexcludesitemsofincomeorexpensethataretaxableordeductibleinotheryearsanditfurtherexcludesitemsthatarenevertaxableordeductible.TheCompany’sliabilityforcurrenttaxiscalculatedusingtaxratesthathavebeenenactedorsubstantivelyenactedatbalancedate.
Deferredtaxisaccountedforusingthecomprehensivebalancesheetliabilitymethodinrespectoftemporarydifferencesarisingfromdifferencesbetweenthecarryingamountofassetsandliabilitiesinthefinancialstatementsandthecorrespondingtaxbaseofthoseitems.Inprinciple,deferredtaxliabilitiesarerecognisedforalltaxabletemporarydifferences.
Deferredtaxassetsarerecognisedtotheextentthatitisprobablethatsufficienttaxableamountswillbeavailableagainstwhichdeductibletemporarydifferencesorunusedtaxlossesandtaxoffsetscanbeutilised.
Thecarryingamountofdeferredtaxassetsisreviewedateachbalancesheetdateandreducedtotheextentthatitisnolongerprobablethatsufficienttaxableprofitswillbeavailabletoallowallorpartoftheassetstoberecovered.
Deferredtaxassetsandliabilitiesaremeasuredatthetaxratesthatareexpectedtoapplyintheperiodinwhichtheliabilityissettledortheassetrealised.
Notes to the Financial Statements (continued)
49
GNS Science Annual Report 2010
2.15 Leases
Leasesareclassifiedasfinanceleaseswheneverthetermsoftheleasetransferasignificantportionofalloftherisksandrewardsofownershiptothelessee.Allotherleasesareclassifiedasoperatingleases.
TheGrouphasnoleaseswhichwouldbeclassifiedasfinanceleases.
Operatingleasepaymentsarerecognisedonasystematicbasisrepresentingthepatterninwhicheconomicbenefitsfromtheleasedassetareconsumedovertheleaseterm.
2.16 Statement of cash flows
Forthepurposeofthestatementofcashflows,cashandcashequivalentsincludecashonhandandinbanksandinvestmentsinmoneymarketinstruments,netofoutstandingbankoverdrafts.Thefollowingtermsareusedinthestatementofcashflows:
Operating activities–aretheprincipalrevenue-producingactivitiesoftheCompanyandotheractivitiesthatarenotinvestingorfinancingactivities.
Investing activities–aretheacquisitionanddisposaloflong-termassetsandotherinvestmentsnotincludedincashequivalents.
Financing activities–areactivitiesthatresultinchangesinthesizeandcompositionoftheequityandborrowingsoftheCompany.
3. Revenue
inthousandsofNewZealanddollarsGroup
2010Group
2009Company
2010Company
2009
Provisionofservices 63,461 58,446 63,436 58,695
Saleofgoods 127 532 127 145
Royaltiesandlicencerevenue 1,375 1,541 1,182 1,299
Rentalincome 127 184 127 184
Otherincome 33 3 33 3
Total revenue 65,123 60,706 64,905 60,326
4. Operating expenses
Operatingexpensesinclude:
Auditor’sremuneration
–Auditofthefinancialstatements 74 68 63 62
–Otherassuranceservices 7 5 7 5
Baddebts 5 114 5 114
Directors’fees 190 201 190 201
Donations 2 2 2 2
Lossonforeignexchange 302 14 293 45
Rentexpense 208 217 208 217
Developmentcosts 200 176 200 176
Siteandcommunications 2,254 2,102 2,254 2,102
Materialsandsupplies 3,740 2,592 3,729 2,592
Conferencesandtraining 829 972 829 972
Servicesandcontracts 11,440 10,291 11,413 10,405
Otherexpenses 3,364 2,615 3,354 2,217
Total operating expenses 22,615 19,369 22,547 19,110
Notes to the Financial Statements (continued)
50
GNS Science Annual Report 2010
5. Income taxes
Theincometaxexpenseisdeterminedasfollows:
inthousandsofNewZealanddollarsGroup
2010Group
2009Company
2010Company
2009
Reconciliation of income tax expense
Profitbeforeincometax 2,384 2,242 2,306 2,270
Taxatcurrentrateof30% 715 673 692 681
Effectofexpensesthatarenotdeductibleindeterminingtaxableprofit 28 29 25 21
Effectondeferredtaxbalancesduetothechangeinincometaxratefrom30%to28%(effective1July2010)
(82) - (82) -
Tax before adjustment for removal of tax depreciation on buildings 661 702 635 702
Effectofremovaloftaxdepreciationonbuildings* 675 - 675 -
Total tax expense 1,336 702 1,310 702
Thetaxationchargeisrepresentedby:
Currenttax 547 671 488 670
Deferredtax 789 31 822 32
Total tax expense 1,336 702 1,310 702
*Inthe2010BudgetStatementtheGovernmentannounced(andsubsequentlyenacted)legislationtoeffectivelyremovedepreciationdeductionsonbuildingswithexpectedlivesof50yearsormorefromthe2012incomeyear.Thischangelowersthetaxbaseforsuchbuildingswhichcreatesa“one-off”increaseinboththedeferredtaxliabilityandtaxexpenseinthecurrentyear.
6. Share capital
Authorisedandissuedcapital:6,167,000ordinaryshares 6,167 6,167 6,167 6,167
Allordinarysharesrankequallywithrespecttodividendsandrepaymentofcapitalandeachcarrytherighttoonevoteatanyannualgeneralmeeting.
7. Hedging reserve
Balanceat1July (483) - (483) -
Lossrecognisedoncashflowhedges (323) (468) (323) (468)
Incometaxrelatedtoamountsrecognisedinequity 242 (5) 242 (5)
Transferredtoinitialcarryingvalueofhedgeditem–cashflowhedges 806 (15) 806 (15)
Taxonamountstransferredtoinitialcarryingvalueofhedgeditem (242) 5 (242) 5
- (483) - (483)
Thehedgingreserverelatestotheaggregateamountofunrealisedlossesunderforwardforeignexchangecontractsdesignatedascashflowhedgesdeferredinequity.Referalsotonote21.5.
Notes to the Financial Statements (continued)
51
GNS Science Annual Report 2010
8.
Pro
per
ty, p
lant
and
eq
uip
men
t
Gro
up a
nd C
om
pan
y
inth
ousa
nds
ofN
ewZ
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nd
dol
lars
Land
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ldin
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nd
Imp
rove
men
tsP
lant
and
M
achi
nery
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bor
ator
yE
qui
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ent
ITE
qui
pm
ent
Furn
iture
and
Fi
ttin
gsVe
hicl
esO
ffice
E
qui
pm
ent
Tota
l
Co
st
Bal
ance
at1
Jul
y20
082,
420
13,8
062,
203
19,0
335,
260
1,86
791
055
946
,058
Ad
diti
ons
-86
835
01,
299
713
203
143
135
3,71
1
Dis
pos
als
-(2
,497
)(1
42)
(1,0
10)
(453
)(2
9)(2
9)(1
0)(4
,170
)
Bal
ance
at3
0Ju
ne2
009
2,42
012
,177
2,41
119
,322
5,52
02,
041
1,02
468
445
,599
Ad
diti
ons
-1,
845
495,
031
659
176
134
121
8,01
5
Dis
pos
als
-(1
)(1
31)
(540
)(1
92)
(87)
(72)
(61)
(1,0
84)
Bal
ance
at
30 J
une
2010
2,42
014
,021
2,32
923
,813
5,98
72,
130
1,08
674
452
,530
Acc
umul
ated
dep
reci
atio
n an
d im
pai
rmen
t
Bal
ance
at1
Jul
y20
08-
2,92
31,
029
11,1
483,
592
887
444
374
20,3
97
Dis
pos
als
-(1
,105
)(1
01)
(1,0
19)
(452
)(2
3)(2
9)(1
1)(2
,740
)
Dep
reci
atio
n-
544
165
1,47
071
915
014
678
3,27
2
Bal
ance
at3
0Ju
ne2
009
-2,
362
1,09
311
,599
3,85
91,
014
561
441
20,9
29
Dis
pos
als
-(1
)(1
22)
(486
)(1
86)
(79)
(57)
(55)
(986
)
Dep
reci
atio
n-
665
165
1,51
671
015
817
287
3,47
3
Bal
ance
at
30 J
une
2010
-3,
026
1,13
612
,629
4,38
31,
093
676
473
23,4
16
Net
bo
ok
valu
e at
30
June
201
02,
420
10,9
951,
193
11,1
841,
604
1,03
741
027
129
,114
Net
boo
kva
lue
at3
0Ju
ne2
009
2,42
09,
815
1,31
87,
723
1,66
11,
027
463
243
24,6
70
An
imp
airm
entr
evie
ww
asu
nder
take
nat
yea
ren
d.T
his
revi
ewd
eter
min
edth
ata
nim
pai
rmen
tad
just
men
tof$
78,0
00to
net
boo
kva
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was
nec
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ry(2
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–$3
2,00
0im
pai
rmen
t w
rite-
dow
n).
Notes to the Financial Statements (continued)
52
GNS Science Annual Report 2010
9. Intangible assets
Group
inthousandsofNewZealanddollarsSoftware Patents Capitalised
development costsTotal
Cost
Balanceat1July2008 4,303 376 1,006 5,685
Additions 1,300 131 - 1,431
Disposals (371) (36) (300) (707)
Balanceat30June2009 5,232 471 706 6,409
Additions 1,136 86 49 1,271
Disposals (584) - - (584)
Balance at 30 June 2010 5,784 557 755 7,096
Accumulated amortisation and impairment
Balanceat1July2008 2,673 99 - 2,772
Disposals (335) (2) - (337)
Amortisation 600 27 - 627
Balanceat30June2009 2,938 124 - 3,062
Disposals (584) - - (584)
Amortisation 646 33 74 753
Balance at 30 June 2010 3,000 157 74 3,231
Net book value at 30 June 2010 2,784 400 681 3,865
Netbookvalueat30June2009 2,294 347 706 3,347
Company
Cost
Balanceat1July2008 3,813 376 1,006 5,195
Additions 1,256 131 - 1,387
Disposals (351) (36) (300) (687)
Balanceat30June2009 4,718 471 706 5,895
Additions 1,135 86 49 1,270
Disposals (584) - - (584)
Balance at 30 June 2010 5,269 557 755 6,581
Accumulated amortisation and impairment
Balanceat1July2008 2,464 99 - 2,563
Disposals (327) (2) - (329)
Amortisation 523 27 - 550
Balanceat30June2009 2,660 124 - 2,784
Disposals (584) - - (584)
Amortisation 572 33 74 679
Balance at 30 June 2010 2,648 157 74 2,879
Net book value at 30 June 2010 2,621 400 681 3,702
Netbookvalueat30June2009 2,058 347 706 3,111
AnimpairmentreviewofintangibleassetswasundertakenbytheCompanyatyearend.Thisreviewdeterminedthatnoimpairmentadjustmentwasnecessary.
Notes to the Financial Statements (continued)
53
GNS Science Annual Report 2010
10. Investments
inthousandsofNewZealanddollarsGroup
2010Group
2009Company
2010Company
2009
Investmentinsubsidiaries - - 10 10
Otherinvestments 194 194 194 194
Total investments 194 194 204 204
10.1 Investment in subsidiaries
Subsidiary Balance DateOwnership and voting interest Principal Activity
IsoscanLimited 30June 100% Developmentandsaleofnon-invasivescanningtechnologyforindustry.
IsoscanFoodLimited 30June 100% Holdsa50%interestinMeatvisionLimited,ajointventureundertakingthedevelopmentandsaleofnon-invasivescanningtechnologyforthemeatindustry.
GeologicalSurveys(NZ)Limited 30June 100% Holdsa45%interestinPropertyInsight,anunincorporatedjointventurewhichsellspropertydata.
GeologicalRiskLimited 30June 100% Holdsa50%interestinRiskscapeNZ,anunincorporatedjointventureundertakinghazardassessmentresearch.
GNSScienceInternationalLimited 30June 100% Undertakesinternationalresearchconsultancywork.
10.2 Other investments
TheCompanyhasaninvestmentof$194,000(2009:$194,000)inNewZealandSynchrotronGroupLimited,representinga6.75%interest.ThisinvestmentallowstheCompanyrightstobeamtimeontheAustralianSynchrotron(lightandx-raysource).
11. Trade receivables
inthousandsofNewZealanddollarsGroup
2010Group
2009Company
2010Company
2009
Tradereceivables 5,605 6,725 5,507 6,685
Allowancefordoubtfuldebts (5) (118) (5) (118)
5,600 6,607 5,502 6,567
Thecarryingvalueofreceivablesapproximatestheirfairvalue.Asat30June2010,alloverduereceivableswereassessedforimpairmentandappropriateprovisionsapplied.
11.1 Ageing profile of past due trade receivables at balance date
Pastdue1-30days 224 850 224 853
Pastdue30-60days 129 584 129 573
Pastdueover61days 535 1,156 461 1,133
888 2,590 814 2,559
11.2 Movement in the provision for doubtful debts
Balanceat1July 118 9 118 9
Accountswrittenoffduringtheyear (118) (5) (118) (5)
Increaseinallowancerecognisedinprofitorloss 5 114 5 114
5 118 5 118
Thecreditqualityoftradereceivablesthatareneitherpastduenorimpairedisconsideredsound.
Notes to the Financial Statements (continued)
54
GNS Science Annual Report 2010
12. Borrowings
inthousandsofNewZealanddollarsGroup
2010Group
2009Company
2010Company
2009
LoanfromTheNationalBankofNewZealandLimited 5,013 4,150 5,013 4,150
FacilityThetotalfacilityavailabletotheCompanyat30June2010is$9,250,000(2009:$7,650,000).Thefacilityismadeupofa$3,000,000termloanmaturingon27November2011withtheremaining$6,250,000facilitybeingaflexiblecreditfacility.
InterestThetermloanhasaninterestrateof5.53%fixeduntil27November2010.Theflexiblecreditfacilityincursinterestbasedonthebank’scostoffundsplusamarginof0.85%.Thisrateisreviewedbythebankonaquarterlybasis.
Repayment termsThetermloanmatureson27November2011andinterestispaidmonthly.Interestcostsarepaidmonthlyontheflexiblecreditfacilityandthefacilityhasareviewdateof31July2011.
SecurityThefacilityisprovidedsubjecttoanegativepledgethattheCompanydoesnotencumberanyassetsorprovidesecuritywherebytheaggregateofsuchencumbrancesisgreaterthan5%oftotaltangibleassets.
13. Deferred tax liability
13.1 Temporary differences
Deferred tax liabilities/(assets) arise from the following:
Property,plantandequipment 1,713 1,084 1,713 1,084
Intangibleassets 315 255 325 251
Provisions (851) (927) (876) (971)
Doubtfuldebts (1) (35) (1) (35)
Capitalisedrelocationexpenses (8) (11) (8) (11)
1,168 366 1,153 318
13.2 Movements in deferred tax
Balanceat1July 366 335 318 286
Chargedtoincome 196 31 229 32
Effectofremovaloftaxdepreciationonbuildings 675 - 675 -
Changeintaxrate(30%to28%effective1July2010) (82) - (82) -
789 31 822 32
Adjustmentbetweencurrentanddeferredtax–prioryear 13 - 13 -
1,168 366 1,153 318
UndersectionME1oftheIncomeTaxAct(2004),theCompanyisnotrequiredtomaintainanimputationcreditaccount.
Notes to the Financial Statements (continued)
55
GNS Science Annual Report 2010
14. Provisions
Current Non-current
inthousandsofNewZealanddollarsGroup
2010Group
2009Company
2010Company
2009Group
2010Group
2009Company
2010Company
2009
Annualleave 1,612 1,890 1,612 1,890 415 - 415 -
Longserviceleave 99 54 99 54 794 756 794 756
Retirementleave 145 - 145 - 494 650 494 650
1,856 1,944 1,856 1,944 1,703 1,406 1,703 1,406
15. Trade and other payables
inthousandsofNewZealanddollarsGroup
2010Group
2009Company
2010Company
2009
Tradepayables 2,700 1,700 2,681 1,648
Accruedexpenses 708 2,409 708 2,409
Otherpayables 1,530 415 1,530 415
Otherfinancialliabilities - 483 - 483
4,938 5,007 4,919 4,955
Tradeandotherpayablesarenon-interestbearingandarenormallysettledonthe20thofthemonthfollowingreceiptofinvoice.Thecarryingvalueofcreditorsandotherpayablesapproximatestheirfairvalue.
16. Provision for dividend
On7August2009adividendof$240,000(2009:$175,000)waspaidtoholdersoffullypaidordinarysharesinrespectofthepreviousfinancialyear.On21July2010theDirectorsapprovedadividendof$100,000inrespectofthe2010year.
17. Reconciliation of profit after tax to statement of cash flows
Profit after tax 1,048 1,540 996 1,568
Adjust non-cash items
Depreciation 3,473 3,272 3,473 3,272
Amortisation 753 627 679 550
(Increase)/decreaseincurrenttax (288) 472 (376) 493
Increaseindeferredtax 802 31 835 32
(Gain)/lossonsaleofassets (6) 18 (6) 18
Increaseinnon-currentprovisions 297 90 297 90
5,031 4,510 4,902 4,455
Add/(less) movements in working capital items:
Decrease/(Increase)inaccountsreceivableandprepayments 817 (1,226) 875 (1,359)
Increaseincurrentliabilities 260 2,539 293 2,513
Decreaseinworkinprogress 56 487 409 487
1,133 1,800 1,577 1,641
Lessmovementincurrentliabilitiesclassifiedasfinancingactivities 240 (65) 240 (65)
Lessmovementincurrentliabilitiesrelatingtohedgingreserve 483 (483) 483 (483)
723 (548) 723 (548)
Net cash flows from operating activities 7,935 7,302 8,198 7,116
Notes to the Financial Statements (continued)
56
GNS Science Annual Report 2010
18. Related party transactions
TheultimateshareholderoftheCompanyistheCrown.AlltransactionswiththeCrownareundertakenonanarm’slengthbasis.RevenuederivedfromtheCrown,assetoutintheincomestatement,includes:
inthousandsofNewZealanddollars 2010 2009 Source
Researchcontracts 28,109 24,645 FoundationforResearch,ScienceandTechnology
Capabilityfundingcontract 5,317 4,215 MinistryofResearch,ScienceandTechnology
Marsdenfundingcontracts 1,106 932 RoyalSocietyofNewZealand
34,532 29,792
TheCompanyhasanagreementwiththeEarthquakeCommission(EQC)toimplementandoperateaseismicnetworkthroughoutNewZealandontheirbehalf(GeoNet).Amountsfortheyearended30June2010are:
inthousandsofNewZealanddollars 2010 2009
Revenue 8,742 8,789
Directcosts(includingequipmentpurchases) 4,119 4,395
Personnelandoverheadrecoveries 4,623 4,394
8,742 8,789
Workinprogress (173) 84
TheCompanyundertakesmanytransactionswithState-OwnedEnterprises,governmentdepartments,otherCrownentitiesandotherCrownResearchInstitutes.Thesetransactionsarecarriedoutonacommercialandarm’slengthbasisanditisnotconsideredthattheserequirerelatedpartydisclosure.
ThetotalremunerationpaidtoDirectorsandkeymanagementpersonnelduringtheyearwasasfollows:
Short-termbenefits 2,139 2,273
19. Transactions with subsidiaries
DuringtheyeartheCompanyprovidedtechnicalanddevelopmentservicesrelatingtotimberscanningproductstoIsoscanLimitedtotalling$15,000(2009:$347,000).
TheCompanyprovidedconsultancyservicestotalling$901,000(2009:$283,000)toGNSScienceInternationalLimitedforthedeliveryofconsultancyservicestooverseascustomers.TheCompanypaidamanagementfeeof$50,000toGNSScienceInternationalLimitedduringtheyear(2009:$nil).At30June2010atradereceivableof$5,000(2009:$3,080)wasduefromGNSScienceInternationalLimited.
InterestfreetreasuryadvanceswithnospecificrepaymenttermsweremadebytheCompanytoitssubsidiariesduringtheyear.Allothertransactionswithsubsidiarycompaniesaremadeonanarm’slengthbasis.
20. Transactions with joint ventures
IsoscanFoodLimitedhasa50%interestinMeatvisionLimited–ajointventurewithAnzcoFoodsLimited.Alltransactionswerecarriedoutonacommercialandarm’slengthbasis.DuringtheyeartheCompanyprovidedtechnicalanddevelopmentservicestoMeatvisionLimitedfornon-invasivemeatscanningtechnologytotalling$32,000(2009:$125,000).TheCompanyalsoonchargedpatentcoststoMeatvisionLimitedtotalling$1,000(2009:$41,000).Servicefeesof$nil(2009:$9,000)werepaidbyMeatvisionLimitedtoIsoscanFoodLimitedduringtheyear.
GeologicalRiskLimitedhasajointventure,RiskscapeNZ,withtheNationalInstituteforWaterandAtmosphericResearchLimited.Researchservicestotalling$370,000(2009:$889,000)wereprovidedbytheCompanytoRiskscapeNZduringtheyear.Alltransactionswerecarriedoutonacommercialandarm’slengthbasis.
GeologicalSurveys(NZ)Limitedhasa45%interestinPropertyInsight–ajointventurewithQuotableValueLimitedandNiuPacificLimited.TheCompanybilledanamountof$nil(2009:$29,000)toPropertyInsightfortheprovisionofdataandservices.Alltransactionswerecarriedoutonacommercialandarm’slengthbasis.
Notes to the Financial Statements (continued)
57
GNS Science Annual Report 2010
ThefollowingamountshavebeenincludedintheconsolidatedfinancialstatementsastheCompany’sshareofthejointventures:
inthousandsofNewZealanddollars 2010 2009
Revenue 219 295
Expenses 223 319
Operatingprofitbeforetax (4) (24)
Incometax (1) (7)
Operatingprofitaftertax (5) (31)
Currentassets 223 241
Non-currentassets 162 236
Currentliabilities 67 116
Non-currentliabilities 16 48
Therearenocontingentliabilitiesinanyoftheabovejointventures(2009:nil).
21. Financial instruments
21.1 Capital risk management
TheCompanymanagesitscapitaltoensurethatentitiesintheGroupwillbeabletocontinueasgoingconcernswhilemaximisingthereturntoshareholdersthroughtheoptimisationofthedebtandequitybalance.TheCompany’soverallstrategyremainsunchangedfrom2009.
ThecapitalstructureoftheCompanyconsistsofdebt,whichincludestheborrowingsdisclosedinnote12,cashandcashequivalents,andequityattributabletoequityholdersoftheparent,comprisingissuedcapital,reservesandretainedearnings.
TheCompanyisnotsubjecttoanyexternallyimposedcapitalrequirements.
21.2 Categories of financial instruments
inthousandsofNewZealanddollarsGroup
2010Group
2009Company
2010Company
2009
Financial assets – loans and receivables
Cashandcashequivalents 632 1,183 438 995
Tradeandotherreceivables 5,600 6,607 5,502 6,567
Total financial assets 6,232 7,790 5,940 7,562
Investments 194 194 204 204
Financial liabilities measured at amortised cost
Tradeandotherpayables (4,938) (4,524) (4,919) (4,472)
Borrowings (5,013) (4,150) (5,013) (4,150)
Total financial liabilities (9,951) (8,674) (9,932) (8,622)
Derivatives designated as fair value hedging instruments - (483) - (483)
21.3 Financial risk management objectives
TheCompanymonitorsandmanagesthefinancialrisksrelatingtoitsoperationsthroughdailymonitoringofitscashpositionandregularboardreporting.
TheCompanyseekstominimisetheeffectsoffinancialrisksbyfollowingprudenttreasurymanagementpoliciesanddelegationsofauthority.Increasesinborrowingsandenteringintointerestrateswaps,floatingrateagreements,optionsandotherfinancialinstrumentsaresubjecttoapprovalbytheBoard.Compliancewithpoliciesandexposurelimitsisreviewedbytheinternalauditor.TheCompanydoesnotenterintofinancialinstrumentsforspeculativepurposes.
Notes to the Financial Statements (continued)
58
GNS Science Annual Report 2010
21.4 Market risk
TheCompany’sactivitiesexposeitprimarilytothefinancialrisksofchangesinforeigncurrencyexchangeratesandinterestrates.TherehasbeennomaterialchangetotheCompany’sexposuretomarketrisksorthemannerinwhichitmanagesandmeasurestherisk.TheCompanyisnotexposedtosubstantialothermarketriskarisingfromfinancialinstruments.
21.5 Currency risk
TheCompanyundertakescertaintransactionsdenominatedinforeigncurrencies.Exchangerateexposuresaremanagedwithinapprovedpolicylimitsusingforwardforeignexchangecontracts.
ThecarryingamountsoftheCompany’sforeigncurrencydenominatedmonetaryassetsandmonetaryliabilitiesatthereportingdateareasfollows:
Liabilities Assets
inthousandsofNewZealanddollars 2010 2009 2010 2009
GPBSterling (2) (6) 31 42
USDollar (8) (890) 857 2,548
NorwegianKrona - - - 23
CanadianDollar - - 12 -
SingaporeDollar (4)
Euro (1) (10) 43 15
AustralianDollar (7) (187) 20 71
TheCompanyhasapolicyofnotholdinglargeamountsofforeigncurrencydenominatedmonetaryassets.Fixedrateforwardforeignexchangecontractsaretakenoutforsignificantforeigncurrencydenominatedcommitments.
Asat30June2010,iftheNewZealanddollar(NZD)hadstrengthenedby5%againstforeigncurrencies,withallothervariablesheldconstant,theprofitfortheyearandequityfortheCompanywouldhavebeenincreased/(decreased)asfollows:
inthousandsofNewZealanddollars 2010 2009
GPBSterling (1) (2)
USDollar (41) (67)
NorwegianKrona - (1)
CanadianDollar (1) -
Euro (2) -
AustralianDollar (1) 6
A5%weakeningoftheNZDwouldhavehadtheequalbutoppositeeffectontheamountshownabove.
Thismovementisattributabletoforeignexchangegains/lossesontranslationofforeigncurrencydenominatedreceivables,payablesandcashandcashequivalentbalances.
A5%strengthening/weakeningintheNZDwouldalsohavedecreased/increasedequitythroughanadjustmentof$20,000(2009:$157,000)tothehedgingreservewithacorrespondingadjustmenttootherfinancialliabilities.
At30June2010theCompanyhasforwardforeigncurrencycontractsforthepurchaseofcurrenciestocoverfirmforeigncurrencydenominatedcommitments.Detailsofforwardforeignexchangecontractsoutstandingatbalancedateare:
Foreign currency Contract value (NZD) Fair value (NZD)
inthousandsofdollars 2010 2009 2010 2009 2010 2009
Outstanding contracts
Lessthanthreemonths(USD) 172 222 250 405 - (63)
Morethanthreemonths(USD) - 1,910 - 3,379 - (420)
Morethanthreemonths(AUD) 46 - 56 - - -
218 2,132 306 3,784 - (483)
Notes to the Financial Statements (continued)
59
GNS Science Annual Report 2010
21.6 Interest rate risk management
TheCompanyincursinterestonborrowingsasdetailedatnote12.TheCompanyisexposedtofloatinginterestratesonitsflexiblecreditfacility.Thefixedtermloanisatafixedinterestrateuntil27November2010afterwhichthebank’sfloatinginterestratewillapplyortheapplicableinterestratecanbefixedthroughtotheloan’smaturityon27November2011.
TheCompanyalsohasacallaccountonwhichinterestisearned.WherepossibletheCompanymanagesexposurestointerestratefluctuationsthroughprudentmanagementofitstreasuryoperations.
InmanaginginterestrateriskstheCompanyaimstoreducetheimpactofshort-termfluctuationsonearnings.Overthelongerterm,however,permanentchangesininterestrateswillhaveanimpactonprofit.
Ifinterestrateshadbeen50basispointshigher/lowerandallothervariableswereheldconstant,theGroup’sprofitfortheyearwoulddecrease/increaseby$17,000(2009:$27,000).
21.7 Credit risk management
CreditriskreferstotheriskthatacounterpartywilldefaultonitscontractualobligationsresultinginfinanciallossfortheCompany.
ThefinancialinstrumentswhichexposetheCompanytocreditriskareprincipallybankbalances,short-terminvestmentsandaccountsreceivable.TheCompanymonitorscreditriskonanongoingbasis.
Bankbalancesandshort-terminvestmentsareheldwithNewZealandregisteredbanksinaccordancewiththeCompany’streasurypolicy.
Anallowancefordoubtfuldebtsismaintainedinrespectofaccountsreceivableandthisisassessedonaregularbasis.TheCompanyisnotusuallyexposedtoanyconcentrationsofcreditriskrelatingtoaccountsreceivableotherthanfromtheCrownandtheEQC.
NocollateralisheldbytheCompanyinrespectofbankbalances,short-terminvestmentsoraccountsreceivable.Themaximumexposuretocreditriskisrepresentedbythecarryingvalueofeachfinancialassetinthebalancesheet.
21.8 Liquidity risk management
TheCompanymanagesliquidityriskbymaintainingadequatereserves,bankingfacilitiesandreserveborrowingfacilities,bymonitoringforecastandactualcashflowsandmatchingthematurityprofilesoffinancialassetsandliabilities.TheCompanyhasaccesstofinancingfacilitiesandexpectstomeetitsotherobligationsfromoperatingcashflows.
Thefollowingtabledetailstheexpectedcontractualmaturity(undiscounted)fortheGroup’snon-derivativefinancialinstruments.
2010
inthousandsofNewZealanddollars6months
orless6-12
months1-5years morethan
5yearsTotal
Cashandcashequivalents 632 - - - 632
Tradeandotherreceivables 5,600 - - - 5,600
Tradeandotherpayables (4,938) - - - (4,938)
Borrowings (138) (138) (5,035) - (5,311)
2009
inthousandsofNewZealanddollars6months
orless6-12
months1-5years morethan
5yearsTotal
Cashandcashequivalents 1,183 - - - 1,183
Tradeandotherreceivables 6,607 - - - 6,607
Tradeandotherpayables (5,007) - - - (5,007)
Borrowings (98) (100) (4,183) - (4,381)
Notes to the Financial Statements (continued)
60
GNS Science Annual Report 2010
21.9 Fair value of financial instruments
FinancialinstrumentsmeasuredsubsequenttoinitialrecognitionatfairvaluearegroupedintoLevels1to3basedonthedegreetowhichthefairvalueisobservable:
• Level1fairvaluemeasurementsarethosederivedfromquotedpricesinactivemarketsforidenticalassetsorliabilities.• Level2fairvaluemeasurementsarethosederivedfrominputsotherthanquotedpricesincludedwithinLevel1thatareobservable
fortheassetorliability,eitherdirectlyorindirectly.• Level3fairvaluemeasurementsarethosederivedfromvaluationtechniquesthatincludeinputsfortheassetorliabilitythatare
notbasedonobservablemarketdata.
TheCompanyhasLevel2financialinstrumentsasdetailedatnote21.2.
Therewerenomaterialdifferencesbetweenthefairvalueandcarryingamountsofthefinancialinstrumentsat30June2010(2009:nomaterialdifferences).
22. Commitments
22.1 Non-cancellable operating lease commitments (Group and Company)
inthousandsofNewZealanddollars 2010 2009
Withinoneyear 183 173
Betweenoneandfiveyears 39 77
Overfiveyears - -
222 250
22.2 Capital commitments (Group and Company)
Contractedcapitalcommitments 1,900 4,192
23. Contingent liabilities
TheGroupandCompanyhavenocontingentliabilities(2009:nil).
24. Events after the balance date
Therewerenosignificanteventsafterthebalancedate(2009:nil).
25. Adoption of new and revised Standards and Interpretations
25.1 Standards and Interpretations effective in the current period
NZ IAS 1 (Revised) Presentation of Financial Statements (effective for accounting periods beginning on or after 1 January 2009)ChangestoNZIAS1haveimpacteddisclosuresrelatingtorecognisedincomeandexpensesfortheCompanyandGroup.Allrecognisedincomeandexpenseshavebeenrecognisedintwostatements(anincomestatementandastatementofcomprehensiveincome),separatelyfromownerchangesinequity.TherevisedStandardalsoincludeschangestopresentationanddisclosurerequirements.
NZ IFRS 7 (Revised) Financial Instruments Disclosures (effective for accounting periods beginning on or after 1 January 2009)UnderamendmentstoNZIFRS7additionaldisclosureshavebeenmadeatnote21.9regardingthefairvalueoffinancialinstrumentsandwhetherfairvaluesaredeterminedbyreferencetopublishedpricequotationsinamarketorareestimatedusingothermethods.
25.2 Early adoption of Standards and Interpretations
NZ IAS 24 (Revised) Related Party Disclosures (effective for accounting periods beginning on or after 1 January 2011TheGrouphaselectedtoearlyadoptNZIAS24.Theamendmentssimplifythedisclosurerequirementsforentitiesthatarecontrolled,jointlycontrolledorsignificantlyinfluencedbyagovernment(referredtoasgovernment-relatedentities)andhavebeenappliedinnote18.
25.3 Standards and Interpretations in issue not yet adopted
Atthedateofauthorisationofthesefinancialstatements,thefollowingStandardsandInterpretationswereissuedbutnotyeteffective.
NZ IFRS 9 Financial InstrumentsTheStandardintroducesnewrequirementsfortheclassificationandmeasurementoffinancialassetsandiseffectivefrom1January2013.AllrecognisedfinancialassetsthatarecurrentlyinthescopeofIAS39willbemeasuredateitheramortisedcostorfairvalue.Inorderforfinancialassetstobemeasuredatamortisedcostcertaincriteriamustbemet.
InitialapplicationofthisStandardisnotexpectedtohaveanymaterialimpactontheamountsreportedordisclosuresmadebytheGrouporCompany.
Notes to the Financial Statements (continued)
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GNS Science Annual Report 2010
Performance Indicators
GroupActual
2010
GroupBudget
2010
GroupActual
2009
Financial performance measures
Revenue (Excluding interest received) ($000) 65,123 63,417 60,706
ReturnonEquitybeforedevelopmentexpenses 5.6% 9.1% 8.3%
ReturnonEquitybeforeeffectofdeferredtaxrelatingtobuildingdepreciation 8.1% 8.4% 7.7%
ReturnonEquity(Surplus after taxation/average equity) 5.0% 8.4% 7.7%
Equityratio(Equity/Total assets) 48.7% 51.8% 49.2%
Gearing(Term loan/Equity plus term loan) 18.6% 25.2 16.9%
Interestcover (Operating surplus before interest/Interest expense) 12 Times 9Times 6Times
Other performance measures
Research Contracts:
FRST ($000) 27,840 25,912 24,378
CapabilityFunding($000) 5,317 5,316 4,215
Marsden($000) 1,106 1,309 932
PreseedAcceleratorFund ($000) 269 266 267
RevenuefromGeoNet ($000) 8,742 8,770 8,789
Commercial contracts:
RevenuefromcommercialactivitiesfromNewZealand($000) 14,668 15,030 15,695
Revenuefromcommercialactivitiesfromoverseas($000) 7,020 6,710 6,243
Clientsprovidingover$150,000perannum 20 20 31
Research indicators:
Peer-reviewedscientificpapers 228 250 128
Researchmonographsandmaps 32 3 7
Otherscientificpapers 161 60 202
Keynoteandplenarypresentations 51 10 3
NewMarsdenprojects 3 2-3 3
Graduatescholarshipsfunded 26 15 18
Graduatestudentssupervised 124 65 97
ContractsfromTEOs($000) 1,200 800 1,079
ContractstoTEOs($000) 4,421 1,400 2,554
ProjectsinvolvingMa-ori 18 12 21
Research application indicators:
Commissionedreportstousers 285 220 304
Presentationstousers 265 15 34
User-sector/industryarticles 111 12 5
Newandimprovedproducts/processes/services 33 12 7
Jointventures/formalassociations 5 4 5
Patentsgranted–NewZealand - 1 -
Patentsgranted–Overseas - 1 1
Licensingagreementsenteredinto 36 26 24
InternationalforarepresentingNewZealand 5 15 3
NationallySignificantDatabasesandCollectionsheld 8 8 8
Otherdatabasesheld 16 16 16
Performance Indicators
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GNS Science Annual Report 2010
GroupActual
2010
GroupBudget
2010
GroupActual
2009
Human resources:
Full-timeequivalents(FTEs) 369 360 354
Researchers 258 263 256
Researchsupport 47 43 44
Generalsupportandmanagement 64 54 54
Averagesalaryincrease 4.7% 3-5% 5.6%
Traininganddevelopment(% salary budget) 2.9% 3.1% 3.7%
Workdaysmissedduetoinjury 3 <10days 16
ACCworkplacesafetyaccreditation Secondary Secondary Secondary
Productivity Measures
RevenueperFTE ($000) 176 176 171
OperatingmarginperFTE($000) 7.0 8.2 7.2
TotalassetsperFTE ($000) 122 121 117
Revenueearnedper$investedinassets 1.4 1.5 1.5
Capitalinvestment($000) 9,100 8,700 4,700
Performance Indicators (continued)
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GNS Science Annual Report 2010
Statement of Responsibility
TheBoardisresponsibleforthepreparationoftheannualfinancialstatementsandthejudgementsusedtherein.
TheBoardisresponsibleforestablishingandmaintainingasystemofinternalcontroldesignedtoprovidereasonableassurancesastotheintegrityandreliabilityofthefinancialreporting.
IntheopinionoftheBoard,theannualfinancialstatementsforthefinancialyearfairlyreflectthefinancialpositionandoperationsoftheGroup.
Tom CampbellChairman
Ross ButlerDeputy Chairman
18August2010DateofApproval
Statement of Responsibility
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GNS Science Annual Report 2010
Auditproceduresgenerallyinclude:
• determiningwhethersignificantfinancialandmanagementcontrolsareworkingandcanbereliedontoproducecompleteandaccuratedata;
• verifyingsamplesoftransactionsandaccountbalances;
• performinganalysestoidentifyanomaliesinthereporteddata;
• reviewingsignificantestimatesandjudgementsmadebytheBoardofDirectors;
• confirmingyear-endbalances;
• determiningwhetheraccountingpoliciesareappropriateandconsistentlyapplied;and
• determiningwhetherallfinancialstatementdisclosuresareadequate.
Wedidnotexamineeverytransaction,nordoweguaranteecompleteaccuracyofthefinancialstatements.
Weevaluatedtheoveralladequacyofthepresentationofinformationinthefinancialstatements.Weobtainedalltheinformationandexplanationswerequiredtosupportouropinionabove.
Responsibilities of the Board of Directors and the Auditor
TheBoardofDirectorsisresponsibleforpreparingfinancialstatementsinaccordancewithgenerallyacceptedaccountingpracticeinNewZealand.ThosefinancialstatementsmustgiveatrueandfairviewofthefinancialpositionoftheCompanyandGroupasat30June2010.Theymustalsogiveatrueandfairviewoftheresultsofoperationsandcashflowsfortheyearendedonthatdate.TheBoardofDirectors’responsibilitiesarisefromtheCrownResearchInstitutesAct1992andtheFinancialReportingAct1993.
Weareresponsibleforexpressinganindependentopiniononthefinancialstatementsandreportingthatopiniontoyou.Thisresponsibilityarisesfromsection15ofthePublicAuditAct2001andtheCrownResearchInstitutesAct1992.
Independence
WhencarryingouttheauditwefollowedtheindependencerequirementsoftheAuditor-General,whichincorporatetheindependencerequirementsoftheInstituteofCharteredAccountantsofNewZealand.
Inadditiontotheauditwehavecarriedoutassignmentsintheareasofotherassuranceservices,whicharecompatiblewiththoseindependencerequirements.Otherthantheauditandtheseassignments,wehavenorelationshipwithorinterestsintheCompanyandGroup.
J M RobertsonPartnerDeloitteon Behalf of the Auditor-GeneralWellington, New Zealand
Audit Report
To the readers of the Institute of Geological and Nuclear Sciences Limited and Group’s Financial Statements for the year ended 30 June 2010
TheAuditor-GeneralistheauditoroftheInstituteofGeologicalandNuclearSciencesLimited(the“Company”)andGroup.TheAuditor-Generalhasappointedme,JMRobertson,usingthestaffandresourcesofDeloitte,tocarryouttheauditofthefinancialstatementsoftheCompanyandGroupfortheyearended30June2010.
Unqualified Opinion
Inouropinion:
• ThefinancialstatementsoftheCompanyandGrouponpages42to60:
- complywithgenerallyacceptedaccountingpracticeinNewZealand;
- complywithInternationalFinancialReportingStandards;and
- giveatrueandfairviewof:
- theCompanyandGroup’sfinancialpositionasat30June2010;and
- theresultsofoperationsandcashflowsfortheyearendedonthatdate.
• BasedonourexaminationtheCompanyandGroupkeptproperaccountingrecords.
Theauditwascompletedon18August2010,andisthedateatwhichouropinionisexpressed.
Thebasisofouropinionisexplainedbelow.Inaddition,weoutlinetheresponsibilitiesoftheBoardofDirectorsandtheAuditor,andexplainourindependence.
Basis of Opinion
WecarriedouttheauditinaccordancewiththeAuditor-General’sAuditingStandards,whichincorporatetheNewZealandAuditingStandards.
Weplannedandperformedtheaudittoobtainalltheinformationandexplanationsweconsiderednecessaryinordertoobtainreasonableassurancethatthefinancialstatementsdidnothavematerialmisstatements,whethercausedbyfraudorerror.
Materialmisstatementsaredifferencesoromissionsofamountsanddisclosuresthatwouldaffectareader’soverallunderstandingofthefinancialstatements.Ifwehadfoundmaterialmisstatementsthatwerenotcorrected,wewouldhavereferredtotheminouropinion.
Theauditinvolvedperformingprocedurestotesttheinformationpresentedinthefinancialstatements.Weassessedtheresultsofthoseproceduresinformingouropinion.
Audit Report
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GNS Science Annual Report 2010
Matters Relating to the Electronic Presentation of the Audited Financial Statements This audit report relates to the financial statements of the Institute of Geological and Nuclear Sciences Limited for the year ended 30 June 2010 included on the Institute of Geological and Nuclear Sciences Limited’s website. The Institute of Geological and Nuclear Sciences Limited’s Board of Directors is responsible for the maintenance and integrity of the Institute of Geological and Nuclear Sciences Limited’s website. We have not been engaged to report on the integrity of the Institute of Geological and Nuclear Sciences 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 30 June 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.