NATIONAL LIBRARY OF NEW ZEALAND

Transcription

1 G.13 NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY - JANUARY

2 A NATIONAL LIBRARY FOR ALL NEW ZEALANDERS FIND OUT MORE HE PUNA MÄTAURANGA MÄ TÄTAU KATOA The National Library of New Zealand s purpose is to enrich the cultural and economic life of New Zealand, and its interchanges with other nations. Kökiri, kökiri, kökiri! Whakarongo ake au ki ngä reo o te motu, E karanga mai ana, Huakina mai ngä tatau o tö whare, Kia mahi tahi tätou, kia inu ai mätou, I Te Puna Mätauranga o Aotearoa. The message from the people, Clearly asks us, To open our doors, So that we may work together, And share the information, Held in the National Library of New Zealand. NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY - JANUARY EXPLANATORY NOTE The National Library of New Zealand was merged with the Department of Internal Affairs on 1 February. Section 45J of the Public Finance Act 1989 requires that an entity that is disestablished before the end of a financial year must as soon as practicable after the date on which is it disestablished provide a final report for the period up to that date. This report therefore covers the period 1 July to 31 January. A full report on the activities of the National Library of New Zealand for the year 1 July to 30 June will be included within the Annual Report of the Department of Internal Affairs. NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY -JANUARY

3 CONTENTS Minister s Foreword 2 Chief Executive s Introduction 3 National Librarian s Overview 4 Our Performance 6 Implementing the New Generation strategy 6 Increasing access and preservation for heritage collections 7 Collaboration and partnering for greater efficiency 9 NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY -JANUARY 1

4 MINISTER S FOREWORD The integration of the National Library of New Zealand, Archives New Zealand and the Department of Internal Affairs on 1 February signals a new chapter in the history of the National Library. This move strengthens the mandate of the National Library in caring for, and protecting, the nation s documentary heritage while supporting the wider library sector. The new Department has solid foundations, using the combined expertise and skills of all three organisations to make the best use of digital technology and ensure public information is widely accessible to all New Zealanders. The heritage collections housed within the National Library and Alexander Turnbull Library will be an important part of this. I have been impressed with the way this merger has taken place and I would like to thank National Library staff for their professional approach to the integration. There is a real determination to maximise the benefits of this move and meet the Government s priority of delivering better value services to New Zealanders. For the National Library, the integration has not detracted from its focus on building modern services and capabilities to reflect the digital environment and changing needs of its customers. The National Library has continued to make significant progress in this area, embracing technology and proactively building digital capability to broaden access to the heritage collections. As well as increasing access, a major priority is to ensure the nation s heritage collections are preserved and stored safely in perpetuity. I have been pleased with the progress made on the Government Digital Archive, a $12.6 million initiative which will provide a secure system for storing, preserving and giving ongoing access to important public records. This is a joint initiative with Archives New Zealand, with the potential to extend its use as a repository for government agencies. The revamp of the National Library Wellington building is expected to be complete next year. This capital investment will ensure collections are preserved for future generations to enjoy and are overall more accessible. Already we are seeing the benefits of modern and relevant infrastructure with the new library and learning cultural centre in Auckland, which I was proud to open last year. This centre has been working closely with the education sector to build innovative services for young New Zealanders. I am also pleased that the Auckland centre has widened access to the Turnbull Library s digitised collections. Advancements in technology will continue to be crucial in opening these collections to much broader audiences. The National Library of New Zealand has a strong future within the new Department, one which recognises its place as a national cultural institution housing the collections of both the National Library and the Alexander Turnbull Library. I look forward to supporting the National Library in its enduring role and purpose of enriching the cultural, social and economic life of New Zealand. Hon Nathan Guy Minister Responsible for the National Library 2 NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY -JANUARY

5 CHIEF EXECUTIVE S INTRODUCTION I have great pleasure in welcoming the National Library of New Zealand into the new Department of Internal Affairs and presenting the seven-month financial statements outlined in this report. The first seven months of /11 were focused on building infrastructure and processes to support the new Department from 1 February and I have appreciated the commitment, hard work and professionalism of the National Library staff during this time. The National Library, as one of the country s leading cultural organisations, has made significant inroads into reshaping its services to be more responsive in the digital age and ensuring its collections are more accessible to New Zealanders from all walks of life. This work continues to remain a priority for the Library. I am confident that the combined skills and capability within the Department provide a strong foundation to deliver improved services to all our customers and communities, as well as continuing to meet the Government s expectations of better value within the public sector. Brendan Boyle Chief Executive NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY -JANUARY 3

6 NATIONAL LIBRARIAN S OVERVIEW E aku nui, e aku rahi, e aku whakatamarahi ki te rangi, tënä koutou, tënä koutou, tënä tätou katoa. The seven months up to 1 February saw the National Library s workload intensify significantly as we integrated with the Department of Internal Affairs while continuing to deliver the New Generation strategy aimed at modernising the Library. It is therefore very satisfying to report a smooth transition into the new Department along with the achievement of key milestones within our modernisation programme. The integration with Archives New Zealand and the Department of Internal Affairs marks a new chapter for the National Library. All three agencies are connected by the history of early European settlement in this country. In coming together, the collective leadership of the new entity has an important task to ensure that our heritage and taonga, the tangible and intangible assets under our care, are valued, preserved and strengthened so that New Zealand prospers economically, socially, environmentally and spiritually. I am confident that we will achieve this with support from within the new Department and from our stakeholders. The New Generation strategy has been a focus of the National Library since The strategy followed a fundamental review aimed at positioning the Library to respond more effectively within a digital world, while also delivering better value services. Over the past seven months significant progress has been made in the strategy s key streams of work, which include improving services and infrastructure and building people capability. In regard to improving services, we successfully completed organisational reviews for the Alexander Turnbull Library, Public Programmes and Services to Mäori. The reviews are aimed at making the Library s collections and services available to broader audiences in new and innovative ways, including online, on site and within communities. New services are being developed in preparation for our return in 2012 to the Library s Molesworth Street building in Wellington. These services are being supported by leadership and change management training, focused on building a values-based and high-achievement culture among Library staff. On the infrastructure front, the Wellington building redevelopment programme is progressing well with extensive internal and external works taking place. This includes fixing the leaks on the roof and ground floor plaza, while internally replacing ageing systems and plant and optimising research spaces. The redevelopment will provide more room and upgraded environments to store the collections for the next twenty years, ensuring they are protected and safe for future generations of New Zealanders. A prime consideration at all times during the construction activity is the safety of the collections, particularly those still in the building. It was pleasing to receive a positive review of our collection protection programme from an independent collection protection advisor in December. In addition to improving storage space and upgrading ageing plant and infrastructure, the redevelopment programme will undertake a modest refurbishment of the third, ground and lower ground floors. This will mean more open access for our customers, providing an enhanced bicultural experience, renovated public spaces and meeting rooms, as well as improved open plan environments for staff. The National Library continued to support its library sector partners with the Aotearoa People s Network Kaharoa (APNK) expanding its reach to public libraries and marae around the country. 4 NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY -JANUARY

7 Winning the Australia and New Zealand Internet Best Practice Award in the Best Access Initiative category was a great honour. The APNK has given New Zealand communities, large and small, the opportunity to engage in the digital world and increase their digital literacy. In Decrember, Penny Carnaby finished her term as Chief Executive and National Librarian, a post she held for eight years. Her significant contribution to leading the National Library into the digital age, and to opening up the collections and services to a wider audience is noted with warm appreciation. Her contribution to the library sector was acknowledged at the 100th anniversary conference of LIANZA with the awarding of an honorary life membership. Finally, I would like to thank National Library staff for their commitment and resilience over a very busy time, and also thank our stakeholders, partners and customers for their ongoing support through significant change. I look forward to seeing the National Library realise the New Generation strategy on its return to the Wellington building, and deliver on its commitment to connect New Zealanders with documentary heritage and information important to all aspects of their lives. Nö reira, noho ora mai rä. Kia ora mai tätou katoa. Näku nei, nä Sue Sutherland Acting National Librarian NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY -JANUARY 5

8 OUR PERFORMANCE In March the Government decided to amalgamate the National Library and Archives New Zealand with the Department of Internal Affairs as part of State sector changes to improve performance. The National Library has continued to deliver its services and to focus on its strategic priorities since the decision. These include maintaining standards of service performance and working to have an impact on the outcomes set out in the National Library Statement of Intent -13. These outcomes are outlined below. The National Library s Primary Outcome New Zealanders connected with information important to all aspects of their lives The National Library s Outcomes Outcome 1: New Zealand s documentary heritage is nurtured Outcome 2: New Zealanders can readily access information Outcome 3: New Zealanders are creating new knowledge Outcome 4: New Zealanders are skilful and confident in using information Implementing the New Generation strategy The New Generation National Library Strategic Directions to 2017 has been the driver for the Library s strategic changes since its launch in At its core is the modernisation of the Library s services. This involves the redevelopment of the Auckland and Wellington National Library buildings and the redesign of services to schools, researchers and the public. In the seven months from its official opening on 1 July, the National Library s Auckland centre has continued to build its offering to educators, school libraries and the Auckland community. As a development hub for Services to Schools, the new centre has created opportunities to improve the Library s support of literacy and learning in New Zealand. An example of this was the successful collaboration with the New Zealand Book Council in October to run a special event for 50 Auckland intermediate students. Speed Date an Author involved two poets, one illustrator and three writers talking to five groups of students for 20 minutes each about a key aspect of writing. For the wider public, the introduction of large interactive touch screens at the entrance to the centre provides a digital showcase for images from the collections. These present an engaging experience that has caught the imagination and interest of customers. The main contract for the redevelopment of the Wellington National Library building in Molesworth Street was accepted in late, with pre-construction work commencing in November. While the building is closed to the public, access to selected collections is available at other sites in Wellington. The building is due to reopen in NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY -JANUARY

9 The detailed development of New Generation services continued in parallel with the building redevelopment. The building design decisions have been made based on this service development, and the two are mutually dependent and make up one total service package. The new service model integrates physical and digital services into one delivery layer, aimed at increasing access, reach and availability of the collections and expertise in financially sustainable ways. What we sought to achieve Heritage collections/ taonga developed, cared for and preserved New Zealanders engaged in creative and interactive learning Schools supported to improve 21st century literacies What we delivered to 31 January No loss or damage to the collections during the building redevelopment The Wellington building redevelopment remains on track for completion in 2012 Design work was undertaken to create a suite of new services for researchers to be implemented by 2012 We implemented a new online service delivery platform for educators and school libraries 55,848 curriculum resource items delivered to schools to support literacy and learning Outcome New Zealand s documentary heritage is nurtured New Zealanders are creating new knowledge New Zealanders are skilful and confident in using information Increasing access and preservation for heritage collections The National Library s heritage collections are mostly held within the Alexander Turnbull Library, and contain a wealth of unique documentary material relating to New Zealand and its people. The Library continued to invest in preserving this material to increase its longevity, and worked to increase access to the collections in new and more effective ways. During the period of the Wellington building closure, the Library has been able to increase both its preservation efforts and its activity to improve online access to the collections. Work on collection re-housing and boxing continued as part of the protection mechanisms put in place for the building redevelopment. A two-year preservation programme commenced for audio recordings, many of them oral histories. Cassettes are the single most numerous audio media in Alexander Turnbull Library collections. A varying range of media related issues, coupled with advancing technological obsolescence of the cassette format, make this format a high priority for preservation. A landmark update to the popular Papers Past online digital collection of heritage newspapers occurred in August. Through an agreement with Fairfax Media, the Library was able to extend Papers Past website coverage of the Evening Post through to This is the first newspaper in Papers Past to span the Second World War. The Evening Post was Wellington s longest running daily newspaper, published for 137 years, and the first 80 years are now available online. Another notable addition to the website is the first ten years of the Lyttelton Times, one of the Library s most requested newspapers and a premier source of information on early immigration to Canterbury. In the first week of December the NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY -JANUARY 7

10 Library reached a historic agreement with Auckland Libraries to work collaboratively with them to bring the Auckland Herald into Papers Past. The Appendices to the Journals of the House of Representatives (AJHR) are dear to the hearts of many academics, researchers and historians and contain some of most detailed and extensive reports of New Zealand events and history, going back to They are a great source of information that is not always easily accessible or searchable. The AJHR digitisation project has seen the National Library working closely with a range of partners, including the Parliamentary Library, to get the Appendices digitised and online. The first set of Appendices from the 1860s and 1870s has been digitised by the National Library and was launched online at Parliament by the Speaker of the House in August. The Alexander Turnbull Library continued to build its collections, including receipt of many heritage items from donors. In November the New Zealand Cartoon Archive, which is part of the Turnbull Library, was presented with a donation of original cartoons drawn by Neville Colvin. Neville Colvin s daughter Claire and his granddaughter Jess, who were visiting New Zealand from England, donated over 60 originals of cartoons Colvin had produced when he worked as the Evening Post s first cartoonist between 1946 and What we sought to achieve Heritage collections/ taonga developed, cared for and preserved Collections of digital information preserved for future generations Information more readily discovered and shared by New Zealanders A wider range of information easily accessible to New Zealanders Researchers finding the information they need New Zealanders engaged in creative and interactive learning What we delivered to 31 January Acquired 37,450 items for the Alexander Turnbull Library, including 34,235 items through the Legal Deposit scheme 37,019 collection items were re-housed and protected 695 at-risk audio items were digitised 202,968 digital objects, consisting of 417,256 files, were uploaded by the Library to the National Digital Heritage Archive 19 community Kete and 20 scanners were made available through the Aotearoa People s Network Kaharoa 404,462 items were digitised and made available online 84% of published heritage records now have online records Assisted with 46,446 individual research enquiries Hosted 462,245 visits to the National Library website Outcome New Zealand s documentary heritage is nurtured New Zealanders can readily access information New Zealanders are creating new knowledge New Zealanders are skilful and confident in using information 8 NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY -JANUARY

11 Collaboration and partnering for greater efficiency Part of the National Library s statutory purpose is to further the work of other libraries and collaborate with other similar institutions in order to enrich the cultural and economic life of New Zealand, and its interchanges with other nations. Collaboration and partnerships have been an effective and efficient means to maintain and develop services nationwide and, on occasion, internationally. Te Puna catalogue and interloan services are some of the National Library s core collaborative offerings to the libraries of New Zealand. Approximately 98% of New Zealand s libraries participate in Te Puna. The Library has worked with the Te Puna Strategic Advisory Committee to identify a range of projects with the aim of finding ways to increase the value of the collaboration. The first project focuses on systems and processes associated with how New Zealand libraries use the Te Puna National Union Catalogue to support acquisition, cataloguing and discovery services. Digital New Zealand now has over 100 content partners, helping make digital content easier to find, share and use by New Zealanders. In October Digital New Zealand incorporated all of the Papers Past records into its metadata search service, growing the service from 1.7 million records to more than 19 million. One new feature is the ability to filter the illustrations found in Papers Past, resulting in the discovery of 90,000 images which have no known copyright restrictions. November saw the launch of Mix and Mash, a competition organised by Digital New Zealand, the National Library, NZ On Screen, Creative Commons Aotearoa New Zealand, Open New Zealand, data.govt.nz, and Creative Freedom Foundation. The competition encouraged people to create new works from New Zealand s remarkable digital content and data. The competition had something for everyone: cartoon remixes, poetry, a poster for the great kiwi summer holiday, mobile applications, visualisation mashups, an open government data category, a newbie award and much more. The Aotearoa People s Network Kaharoa (APNK) won the Australia and New Zealand Internet Best Practice Award in the Best Access Initiative category which awards initiatives that aim to combat the digital divide, facilitating access for groups such as the elderly, disabled or socially disadvantaged. The APNK is a collaboration between the National Library and public libraries, with initial funding received from the Government s Community Partnership Fund. The funding covers equipment, networking, training and access to web-based tools and services. The Kiwi Research Information Service (KRIS) passed the milestone of 20,000 documents in October as usage of nzresearch.org.nz continues to grow. These publications connect people with high quality peer reviewed New Zealand research material. KRIS also helps to enhance capabilities within the public and private sector institutions like Te Puni Kökiri, the Ministry of Justice and Statistics New Zealand have integrated the accessibility of research that KRIS provides to deliver better services to staff and clients. Statistics New Zealand also uses the site to drive their own research work producing high quality data informed by contemporary academia. NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY -JANUARY 9

12 What we sought to achieve More information made available for re-use by New Zealanders Information more readily discovered and shared by New Zealanders Opportunities for New Zealanders to develop 21st century literacies More information made available for re-use by New Zealanders What we delivered to 31 January 31 volumes of the Appendices to the Journals of the House of Representatives covering 19 sessions of Parliament from 1862 to 1879 available online for access Digital New Zealand aggregated metadata for 19,248,220 digital assets online Delivered the Aotearoa People s Network Kaharoa to 133 libraries and three marae 83,985 online visits to the Kiwi Research Information Service Outcome New Zealanders can readily access information New Zealanders are skilful and confident in using information New Zealanders are creating new knowledge 10 NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY -JANUARY -JANUARY

13 Financial Statements and Statement of Objectives and Service Performance July January Statement of Responsibility Departmental Statements Statement of Comprehensive Income Statement of Financial Position Statement of Changes in Taxpayers Funds Statement of Cash Flows Statement of Departmental Expenses and Capital Expenditure Against Appropriations Statement of Commitments Statement of Contingent Liabilities and Contingent Assets Statement of Unappropriated Expenditure and Capital Expenditure Memorandum Accounts Departmental Notes Notes to the Financial Statements Statement of Objectives and Service Performance Non- Departmental Non-Departmental Statements and Schedules Notes to the Non-Departmental Statements and Schedules Statement of Trust Monies Audit Report NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY -JANUARY 11

14 STATEMENT OF RESPONSIBILITY Pursuant to section 45J of the Public Finance Act 1989 the Minister of Finance has transferred the responsibility for preparing the final National Library of New Zealand annual report to the Department of Internal Affairs. In terms of the Public Finance Act 1989, I am responsible as Chief Executive of the Department of Internal Affairs, for the preparation of the National Library of New Zealand financial statements and statement of service performance, and for the judgements made in them. I confirm that the National Library established and maintained a system of internal control designed to provide reasonable assurance as to the integrity and reliability of the National Library s financial and nonfinancial reporting. In my opinion, these financial statements and statement of service performance fairly reflect the financial position and operations of the National Library for the seven months ended 31 January. Brendan Boyle Shirley Smith Chief Executive Chief Financial Officer 12 May 12 May 12 NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY -JANUARY

15 DEPARTMENTAL STATEMENTS Statement of Comprehensive Income for the seven months ended 31 January Note (*) Mains Est Income Revenue from the Crown 38,159 38,092 62,423 64,295 Department and other revenue 2 2,696 3,780 5,876 5,063 Gain on disposal of assets Total income 40,885 41,872 68,299 69,507 Expenditure Personnel costs 3 14,670 15,559 26,590 25,661 Depreciation and amortisation expense 4 4,706 5,601 10,405 8,260 Capital charge 5 4,851 4,907 8,328 8,303 Finance costs 6 (713) 35 (478) Restructuring costs 957 Other operating expenses 7 12,536 14,190 23,149 22,913 Total expenditure 36,050 40,292 68,472 65,616 Surplus / (Deficit) 4,835 1,580 (173) 3,891 Total comprehensive income 4,835 1,580 (173) 3,891 Explanations of significant variances against budget are detailed in note 25. The accompanying notes form part of these financial statements. (*) is based on the October Baseline Update (OBU) for the seven months to 31 January. OBU is the first baseline update to the Main Estimates. NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY -JANUARY 13

16 Statement of Financial Position as at 31 January Note Mains Est Assets Current assets Cash and cash equivalents 20,947 10,129 11,498 15,835 Debtors and other receivables ,879 7,110 9,439 Inventories Prepayments 2,756 2,707 3,212 2,844 General collections 10 12,995 12,977 12,037 13,994 Schools collection 11 2,819 2,814 2,840 2,717 Property, plant and equipment 12 74,883 80,181 94,264 71,629 Intangible assets 13 9,335 9,484 11,065 10,273 Total current assets 124, , , ,785 Liabilities Current liabilities Creditors and other payables 14 4,635 5,308 7,470 7,070 Repayment of surplus 15 4,835 1,580-4,047 Current provisions 16 1,730 2, ,103 Employee entitlements 17 2,482 2,413 2,640 2,684 Total current liabilities 13,682 11,347 10,864 15,904 Net assets 110, , , ,881 Taxpayers funds General funds , , , ,114 Property revaluation reserves 18 7,767 7,767 7,767 7,767 Total taxpayers funds 110, , , ,881 Explanations of significant variances against budget are detailed in note 25. The accompanying notes form part of these financial statements. 14 NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY -JANUARY

17 Statement of Changes in Taxpayers Funds as at 31 January Note Mains Est General funds 103, , , ,943 Property revaluation reserves 7,767 7,767 7,767 7,767 Opening balance 110, , , ,710 Property revaluation reserves gain taken to equity 18 Comprehensive income 4,835 1,580 (173) 3,891 Total recognised income and expenditure 4,835 1,580 (173) 3,891 Repayment of surplus to the Crown (4,835) (1,580) (4,047) Capital contribution from the Crown 3,900 20, Repayment of Capital (26) (26) Closing balance 110, , , ,881 Explanations of significant variances against budget are detailed in note 25. The accompanying notes form part of these financial statements. NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY -JANUARY 15

18 Statement of Cash Flows for the seven months ended 31 January Note Mains Est Cash flows from operating activities Receipts from the Crown 47,004 43,634 62,423 61,775 Receipts from other parties 1,499 3,574 5,494 4,426 Payments to suppliers (15,326) (16,647) (24,057) (26,668) Payments to employees (14,242) (15,767) (26,420) (22,871) Payments for capital charge (4,158) (4,206) (8,328) (8,212) Goods and Services tax (net) 9 (3,674) 196 Net cash from operating activities 19 14,786 6,914 9,112 8,646 Cash flows from investing activities Receipts from sale of property, plant and equipment Purchase of collections (637) (952) (1,626) (1,505) Purchase of plant, property and equipment (4,904) (11,272) (23,931) (7,647) Purchase of intangible assets (134) (221) (3,898) (2,410) Net cash from investing activities (5,627) (12,445) (29,455) (11,078) Cash flows from financing activities Capital contributions 3,900 20, Capital withdrawals (26) (26) Payment of surplus to the Crown (4,047) (4,047) (2,146) (3,510) Net cash from financing activities (4,047) (173) 18,382 (3,183) Net (decrease) / increase in cash and cash equivalents 5,112 (5,704) (1,961) (5,615) Cash and cash equivalents at beginning of the year 15,835 15,833 13,459 21,450 Cash and cash equivalents at the end of the year 20,947 10,129 11,498 15,835 The goods and services tax (GST) (net) component of operating activities reflects the net GST paid and received with the Inland Revenue Department. The GST (net) component has been presented on a net basis, as the gross amounts do not provide meaningful information for financial statement purposes. The accompanying notes form part of these financial statements. 16 NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY -JANUARY

19 Statement of Departmental Expenses and Capital Expenditure Against Appropriations for the seven months ended 31 January Note Mains Est Vote National Library Appropriations for departmental output expenses Access to information 16,943 18,706 30,100 31,065 Collecting and preserving information 11,652 13,275 21,655 21,443 Library and information to schools 6,991 7,778 15,575 12,195 Policy advice , Total departmental output expenses 36,050 40,292 68,472 65,616 Capital appropriations Capital expenditure 5,936 11,844 30,237 12,279 Total appropriation for departmental output expenses 41,986 52,136 98,709 77,895 The National Library has a multi-class output appropriation ( MCOA ) that allows the grouping of multiple output classes under a single appropriation. The accompanying notes form part of these financial statements. NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY -JANUARY 17

20 Statement of Commitments for the seven months ended 31 January Capital commitments Property, plant and equipment 19,614 2,904 Intangible assets 40 Total capital commitments 19,614 2,944 Non-cancellable operating lease commitments Not later than 5 months 1,277 Not later than one year 2,925 2,854 Later than one year and not later than five years 4,542 7,255 Later than five years 9,660 14,551 Total non-cancellable operating lease commitments 18,404 24,660 Other non-cancellable operating commitments Not later than 5 months 577 Not later than one year 709 6,260 Later than one year and not later than five years 372 1,315 Later than five years Total other non-cancellable operating commitments 1,658 7,575 Other operating commitments Not later than 5 months 3,442 Not later than one year 5,455 4,538 Later than one year and not later than five years 1,706 2,951 Later than five years Total other operating commitments 11,059 7,508 Total commitments 50,735 42,687 An additional period (not later than 5 months) has been included in this year s commitments schedule to reflect the commitments between 31 January and 30 June. All other periods disclosed above start on 1 July, and end on 30 June. The National Library leases a number of buildings under non-cancellable operating lease agreements. The lease terms are between one year and 22 years, with an option to renew the lease after that date. Lease payments are subject to regular rent reviews to reflect market rentals. There are no restrictions placed on the National Library by any of the leasing arrangements. The National Library commitments as at 31 January transferred to the Department of Internal Affairs from 1 February. The accompanying notes form part of these financial statements. 18 NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY -JANUARY

21 Statement of Contingent Liabilities and Contingent Assets as at 31 January The National Library has no contingent liabilities or contingent assets as at 31 January (30 June : Nil). The National Library has not given any guarantees under the Public Finance Act as at 31 January (30 June : Nil). Statement of Unappropriated Expenditure and Capital Expenditure for the seven months ended 31 January Expenses and capital expenditure approved under Section 26B of the Public Finance Act January Nil (30 June : Nil) Expenses and capital expenditure incurred in excess of appropriation 31 January Nil (30 June : Nil) Expenses and capital expenditure incurred without appropriation or other authority 31 January Nil (30 June : Nil) Breaches of projected departmental net asset schedules 31 January Nil (30 June : Nil) The accompanying notes form part of these financial statements. NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY -JANUARY 19

22 Memorandum Accounts for the seven months ended 31 January Opening Balance Movement Closing Balance Kotui library services Aotearoa people s network kaharoa _ Memorandum accounts are notional accounts to record the accumulated balance of surpluses and deficits for outputs funded by fees charged to third parties. They are intended to provide a long-run perspective to the pricing of outputs. The memorandum records were established on 30 January. Action taken to address surpluses and deficits Kotui library services The Library has been working towards providing a shared service for public library management and discovery systems in collaboration with the Association of Public Library Managers (APLM). The business model is a subscription service where libraries will pay a one-off licence fee followed by annual subscription. With the memorandum account only established on 30 January no transactions have gone through this account for the seven months ended 31 January. Aotearoa people s network kaharoa (APNK) The award winning APNK is a successful partnership between the Library and public libraries in delivering internet based content and tools to public library customers across New Zealand. The business model is a subscription service to receive the internet based content. The subsciptions will cover approximately 25% of the total cost of running the network with a carry forward of Government funding covering the rest. The cost model developed will ensure the cash flow remains positive over a 10 year period without the need to have the subscription change from year to year. The Library owns and maintains the technical infrastructure, including hardware and software.with the memorandum account only established on 30 January no transactions have gone through this account for the seven months ended 31 January. 20 NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY -JANUARY

23 Notes to the Financial Statements for the seven months ended 31 January 1. Statement of accounting policies Reporting entity The National Library is a Government department as defined by section 2 of the Public Finance Act The National Library s financial statements have been prepared in accordance with the requirements of the Public Finance Act For the purposes of financial reporting the National Library is a public benefit entity. The financial statements include all the activities of the National Library as constituted by the National Library of New Zealand (Te Puna Mätauranga o Aotearoa) Act The National Library also reports on non-departmental activity and trust monies that it administers. The financial statements for the National Library are for the seven months ended 31 January. The financial statements were authorised for issue by the Chief Executive of the Department of Internal Affairs on 12 May, under authority from the Minister of Finance in accordance with section 45J of the Public Finance Act The Department of Internal Affairs became responsible for the administration of the National Library on 1 February. Integration with the Department of Internal Affairs Going concern The National Library was integrated with the Department of Internal Affairs on 1 February. These accounts have been prepared on a disestablishment basis where all assets and liabilities have been shown as current. The assets and liabilities of the National Library have been transferred and are relevant to the Department of Internal Affairs. For that reason, while the financial statements have been prepared on a disestablishment basis, no adjustments have been made to the measurement of assets and liabilities because of the disestablishment basis of preparation. This report covers the final seven months of operation for the National Library as a stand-alone reporting entity. Basis of preparation Statement of compliance These financial statements have been prepared in accordance with New Zealand generally accepted accounting practice (NZ GAAP). They comply with New Zealand equivalents to IFRS (NZ IFRS) and other applicable Financial Reporting Standards, as appropriate for public benefit entities. figures The budget figures are those included in the National Library financial information in the October Baseline Update (OBU) for the seven months to 31 January. The Mains Estimates is the budget for the full / financial year. Changes in accounting policies The accounting policies set out below have been applied consistently to all periods presented in these financial statements. Comparatives When presentation or classification of items in the financial statements is amended or accounting policies are changed voluntarily, comparative figures are restated to ensure consistency with the current period unless it is impracticable to do so. The comparative balances for all balance sheet items have been reclassified as current to ensure consistency with the reclassification of balance sheet items within the current year due to the disestablishment of the National Library. Effects from accounting standard adoption The Library has adopted the following revisions to accounting standards during the financial period, which have had only a presentational or disclosure effect: NZ IAS 24 Related Party Disclosures (Revised 2009) replaces NZ IAS 24 Related Party Disclosures (Issued 2004). The revised standard simplifies the definition of a related party, clarifying its intended meaning and eliminating inconsistencies from the definition. NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY -JANUARY 21

24 Standards, amendments, and interpretations issued that are not yet effective and have not been early adopted Standards, amendments, and interpretations issued but not yet effective that have not been early adopted, and which are relevant to the National Library, are: NZ IFRS 9 Financial Instruments will eventually replace NZ IAS 39 Financial Instruments: Recognition and Measurement. NZ IAS 39 is being replaced through the following 3 main phases: Phase 1 Classification and Measurement, Phase 2 Impairment Methodology, and Phase 3 Hedge Accounting. Phase 1 on the classification and measurement of financial assets has been completed and has been published in the new financial instrument standard NZ IFRS 9. NZ IFRS 9 uses a single approach to determine whether a financial asset is measured at amortised cost or fair value, replacing the many different rules in NZ IAS 39. The approach in NZ IFRS 9 is based on how an entity manages its financial instruments (its business model) and the contractual cash flow characteristics of the financial assets. The new standard also requires a single impairment method to be used, replacing the many different impairment methods in NZ IAS 39. The new standard is required to be adopted for the year ended 30 June The National Library has not early adopted this standard. Functional and presentation currency The functional currency of the National Library is New Zealand dollars. The financial statements are presented in New Zealand dollars and all values are rounded to the nearest thousand dollars (). Critical judgements in applying accounting policies The preparation of financial statements in conformity with NZ IFRS requires judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. These estimates and assumptions may differ from the subsequent actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are: Building fit out The carrying amount of the building fit out is affected by the decision to redevelop the existing building in Wellington. There is uncertainty about the extent of re-use of existing building plant and equipment (fit out) upon return to the Wellington building after the redevelopment is completed. Significant accounting policies The measurement base used in preparing the financial statements is historical cost modified by the revaluation of land and buildings and certain financial instruments (including derivative instruments). The accrual basis of accounting has been used unless otherwise stated. The following particular accounting policies have been applied: Financial instruments Financial assets and financial liabilities are measured at fair value plus transaction costs. Any profit or loss from the financial transaction is recognised in the Statement of comprehensive income. Revenue Operations The National Library derives revenue from the provision of outputs to the Crown and from the provision of services to third parties. Revenue is recognised when earned and is reported in the financial period to which it relates. Revenue from the supply of goods and services is measured at the fair value of consideration received. Revenue from the supply of goods is recognised when the 22 NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY -JANUARY

25 significant risks and rewards of ownership have been transferred to the buyer. Revenue from the supply of services is recognised at balance date on a straight-line basis over the specified period for the services. Donated or subsidised assets Where a physical asset is acquired for nil or nominal consideration the fair value of the asset received is recognised as revenue in the Statement of comprehensive income. Cash and cash equivalents Cash includes cash on hand and funds held within bank accounts. Debtors and other receivables Debtors and other receivables are initially measured at fair value and subsequently measured at amortised cost using the effective interest rate, less impairment changes. Impairment of a receivable is established when there is objective evidence that the National Library will not be able to collect amounts due according to the original terms of the receivable. Significant financial difficulties of the debtor, probability that the debtor will enter into bankruptcy, and default in payments are considered indicators that the debtor is impaired. The amount of the impairment is the difference between the asset s carrying amount and the present value of estimated future cash flows, discounted using the original effective interest rate. Inventories Inventories held for distribution, or consumption in the provision of services, that are not issued on a commercial basis are measured at the lower of cost (determined on the first-in first-out method) and current replacement costs. Where inventories are acquired at no cost, or for nominal consideration, the cost is the current replacement cost at date of acquisition. The replacement cost of the economic benefits or service potential of inventory held for distribution reflects any obsolescence or any other impairment. Any write-down from cost to current replacement cost is recognised in the Statement of comprehensive income in the period when the writedown occurs. Accounting for derivative financial instruments, hedging activities and foreign currency transactions The National Library uses derivative financial instruments to hedge exposure to foreign exchange. In accordance with its foreign exchange policy, the National Library does not hold or issue derivative financial instruments for trading purposes. The National Library has not adopted hedge accounting. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured at their fair value at each balance date. Movements in the fair value of derivative financial instruments are recognised in the Statement of comprehensive income. Foreign currency transactions (including those for which forward exchange contracts are held) are translated into New Zealand dollars using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of comprehensive income. Property, plant and equipment Overview Additions Items of property, plant and equipment costing more than $2,000 are initially recorded at cost. Where an asset is acquired for nil or nominal consideration the asset will be recognised initially at fair value. Where fair value can be reliably determined assets are recognised at fair value less costs incurred to acquire the asset. The fair value of donated assets is also recognised as revenue in the Statement of comprehensive income. NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY -JANUARY 23

26 Revaluation Classes of property, plant and equipment that are revalued are revalued at least every three years or whenever the carrying amount differs materially to fair value. Unrealised gains and losses arising from changes in the value of property, plant and equipment are recognised as at balance date. To the extent that a gain reverses a loss previously charged to the Statement of comprehensive income for the asset class, the gain is credited to other comprehensive income. Otherwise, gains are credited to an asset revaluation reserve for that class of asset. To the extent that there is a balance in the asset revaluation reserve for the asset class any loss is debited to the reserve. Otherwise, losses are reported in the Statement of comprehensive income. Accumulated depreciation at revaluation date is eliminated against the gross carrying amount so that the carrying amount after revaluation equals the revalued amount. Disposal Realised gains and losses arising from disposal of property, plant and equipment are recognised in the Statement of comprehensive income in the period in which the transaction occurs. Any balance attributable to the disposed asset in the asset revaluation reserve is transferred to retained earnings. Impairment The carrying amounts of plant, property and equipment are reviewed at least annually to determine if there is any indication of impairment. Where an asset s recoverable amount is less than its carrying amount, it will be reported at its recoverable amount and an impairment loss will be recognised. Losses resulting from impairment are reported in the Statement of comprehensive income, unless the asset is carried at a revalued amount in which case any impairment loss is treated as a revaluation decrease. Specific asset class policies The following asset class specific policies have been applied: Land and buildings Land and buildings are recorded at fair value less impairment losses and for buildings less depreciation accumulated since the assets were last revalued. Revaluations are carried out for land and buildings to reflect the service potential or economic benefit obtained through control of the asset. Revaluation is based on the fair value of the asset, with changes reported by class of asset. Valuations are undertaken in accordance with standards issued by the New Zealand Property Institute. The last valuation was undertaken on 1 June 2008 by DTZ New Zealand Limited. The valuation was prepared on the basis of fair value and has been treated as synonymous with market value as defined in the Property Institute of New Zealand. This is defined as the estimated amount for which an asset should exchange on the date of valuation between a willing buyer and a willing seller at an arms length transaction after property marketing wherein all parties had each acted knowledgeably and prudently and without compulsion. Collections The National Library s collections consist of the General collections and the Schools collection. These current use collections are recorded at cost less accumulated depreciation and accumulated impairment losses. Other property, plant and equipment Other property, plant and equipment, which include motor vehicles and office equipment, are recorded at cost less accumulated depreciation and accumulated impairment losses. 24 NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY -JANUARY

27 Intangible assets Additions Intangible assets are initially recorded at cost. Intangible assets with finite lives are subsequently recorded at cost less any amortisation and impairment losses. Disposal Realised gains and losses arising from disposal of intangible assets are recognised in the Statement of comprehensive income in the period in which the transaction occurs. Impairment Intangible assets with finite lives are reviewed at least annually to determine if there is any indication of impairment. Where an intangible asset s recoverable amount is less than its carrying amount, it will be reported at its recoverable amount and an impairment loss will be recognised. Losses resulting from impairment are reported in the other comprehensive income. Depreciation and amortisation expense Depreciation Depreciation is charged on a straight-line basis at rates calculated to allocate the cost or valuation of an item of property, plant and equipment or collections, less any estimated residual value, over its estimated useful life. Depreciation is not charged on land, artworks or capital work in progress. The estimated useful lives and associated depreciation rates of major classes of assets have been estimated as follows: Asset category General collections: Asset life years Depreciation Percentage Children s 50 2% Microfilm 50 2% Lending 20 5% Serials 3 to % New Zealand / Pacific 10 10% Reference 10 10% Medical / Health 10 10% Music collected editions 20 5% Music scores 20 5% Music choral sets % Music orchestral sets % Music compact discs 10 10% Music cassettes and video 5 20% Print disabilities 5 20% Schools collection: Print items and video 5 20% Other assets: Furniture and fittings 5 20% Computer hardware 3 to % Office equipment 5 20% Buildings 44 to % Building fit out 15 and % Motor vehicles 5 20% Leasehold improvements The unexpired period of the lease or the estimated life of the improvements, whichever is shorter % NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY -JANUARY 25

28 Amortisation Amortisation is charged to the Statement of comprehensive income on a straight-line basis over the useful life of the asset. Amortisation is not charged on capital work in progress. The estimated useful lives of intangible assets are as follows: Asset category Asset life years Depreciation Percentage Computer software 2 to % Digitised collections % Employee benefits Employee entitlements to salaries and wages, annual leave, and long service leave are recognised in the Statement of comprehensive income when they accrue to employees. Employee entitlements to be settled within 12 months are reported at the amount expected to be paid. Short-term employee entitlements termination benefits Termination benefits are recognised in the Statement of comprehensive income only when there is a demonstrable commitment to either terminate employment prior to normal retirement date or to provide such benefits as a result of an offer to encourage voluntary redundancy. Termination benefits settled within 12 months are reported at the amount expected to be paid, otherwise they are reported as the present value of the estimated future cash outflows. Long-term employee entitlements long service leave Entitlements that are payable beyond 12 months for long service leave have been calculated on an actuarial basis. The calculations are based on: likely future entitlements based on years of service, years to entitlement, the likelihood that staff will reach the point of entitlement and contractual entitlements information; and the present value of the estimated future cash flows. A weighted average discount rate of 6.0% ( 6.0%) and a salary inflation factor of 3.5% (: 3.5%) were used. The discount rate is based on the weighted average of government bonds with terms to maturity similar to those of the relevant liabilities. The inflation factor is based on the expected long-term increase in remuneration for employees. Superannuation schemes Defined contribution schemes Obligations for contributions to the State Sector Retirement Savings Scheme, KiwiSaver and the Government Superannuation Fund are accounted for as defined contribution schemes and are recognised as an expense in the Statement of comprehensive income when incurred. Leases Operating leases, where the lessor substantially retains the risks and rewards of ownership, are recognised in a systematic manner over the term of the lease. Leasehold improvements are capitalised and the cost is amortised over the unexpired period of the lease or the estimated useful life of the improvements, whichever is shorter. Lease incentives received are recognised evenly over the term of the lease as a reduction in rental expense. Other liabilities and provisions Other liabilities and provisions are recorded at the best estimate of the expenditure required to settle the obligation. Liabilities and provisions are recorded at their present value. The increase in the provision due to the passage of time is recognised as a finance cost. An onerous contract is a contract in which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it. Where the National Library has a contract that it onerous, the present obligation under the contract is recognised and measured as a provision. Taxation The National Library, as a government department, is exempt from income tax. Accordingly, no charge for income tax has been provided for. Goods and Services Tax (GST) All items in the financial statements are GST exclusive, except for receivables and payables that are GST inclusive. Where GST is not recoverable as an input tax it is recognised as part of the related asset or expense. 26 NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY -JANUARY

29 The amount of GST owing by or payable to the National Library at balance date, being the difference between output GST and input GST, is included in either receivables or payables. Statement of cost accounting policies The National Library has determined the cost of outputs using the cost allocation system outlined below: Criteria for direct and indirect costs Direct costs are those costs directly attributed to an output. Indirect costs are those costs that cannot be identified with a specific output in an economically feasible manner. Cost allocation policy Direct costs are charged directly to significant activities. Indirect costs are charged to significant activities based on cost drivers and related activity/usage information. Method of assigning direct costs to outputs Direct charging of costs to outputs includes capital charge and depreciation (which are charged on the basis of assets utilised), personnel costs (which are charged by recording time spent on each output) and operating costs. For the seven months ended 31 January 62% of output costs were direct costs (30 June : 58%). Bases for assigning indirect costs to outputs Indirect costs are pro-rated to outputs on the proportion of direct employee costs used in each output, with the exception of the National Library s Finance unit costs which are pro-rated on the proportion of direct total costs used in each output, and property maintenance charges which are charged on the basis of the floor area occupied by each output. Indirect costs amounted to 38% of total output costs for the seven month ended 31 January (30 June : 42%). NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY -JANUARY 27

30 2. Department and other revenue Sale of services 2,309 4,328 Donations and legal deposits Sponsorship Other Total department and other revenue 2,696 5, Personnel costs Salaries and wages 13,455 22,853 Employers contributions to defined contribution plans Increase / (decrease) in employee entitlements (280) 51 Other 1,002 2,032 Total personnel costs 14,670 25,661 Employer contributions to defined contribution plans include contributions to the State Sector Retirement Savings Scheme, KiwiSaver, Government Superannuation Fund and the Defined Benefit Plan Contributions Scheme. 28 NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY -JANUARY

31 4. Depreciation and amortisation expense Note Depreciation: General collections 10 1,381 1,784 Schools collection ,271 Buildings Building fit out Leasehold improvements Furniture and fittings 12 (68) 583 Motor vehicles Computer hardware ,425 Office equipment Total depreciation 3,634 6,920 Amortisation: Intangible assets 13 1,072 1,340 Total amortisation 1,072 1,340 Total depreciation and amortisation expense 4,706 8, Capital charge The National Library pays a capital charge to the Crown on its taxpayers funds as at 30 June and 31 December each year. The capital charge rate for the year was 7.5% (30 June : 7.5%). 6. Finance costs Reversal of unused provision (note 16) (747) (585) Discount unwind (note 16) Total Finance costs (713) (478) NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY -JANUARY 29

32 7. Other operating expenses Fees to auditor: Audit fees for the financial statements audit Audit fees for assurance and related services Advisory committee fees Donations Operating lease and rental payments 2,031 2,623 Net foreign exchange losses Provision for bad debts 20 - Professional services consultancy 2,610 6,083 Subscriptions 1,438 2,205 Building maintenance and repairs 1,286 2,305 Computer maintenance, licensing and communication costs 2,655 4,579 Other operating expenses 2,340 4,822 Total other operating expenses 12,536 22, NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY -JANUARY

33 8. Debtors and other receivables Debtors Crown 88 8,933 Debtors other Less: provision for doubtful debts (20) Total debtors and other receivables 779 9, Jan 30 June Gross Impairment Net Gross $00 Impairment Net Not past due ,152 9,152 Past due 1-30 days Past due days Past due days 11 (6) Past due > 91 days 14 (14) Total 799 (20) 779 9,439 9,439 The carrying value of debtors and other receivables approximates their fair value. At 31 January, a provision of $0.020 million was made for overdue receivables where collection was considered doubtful (30 June : Nil). 9. Inventories Property resource management stores Total inventory There has been no write down of inventories for the 7 months ended 31 January (30 June : $0.017 million). There have been no reversals of writedowns. No inventories are pledged as security for liabilities. NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY -JANUARY 31

34 10. General collections /11 Serials Lending Music Reference Print Disabilities Children Medical / Health NZ / Pacific Microfilm Total Cost or valuation Balance at 1 July 18,793 3,115 1, ,661 Additions Disposals Balance as at 31 January 18,951 3,252 1, ,043 Accumulated depreciation and impairment losses Balance at 1 July 8,411 1, ,667 Depreciation expense ,381 Balance as at 31 January 9,198 1, ,048 Net carrying amount as at 31 January 9,753 1, , /10 Serials Lending Music Reference Print Disabilities Children Medical / Health NZ / Pacific Microfilm Total Cost or valuation Balance at 1 July 18,494 2,819 1, ,854 Additions Disposals Balance as at 30 June 18,793 3,115 1, ,661 Accumulated depreciation and impairment losses Balance at 1 July 7, ,883 Depreciation expense 1, ,784 Balance as at 30 June 8,411 1, ,667 Net carrying amount as at 30 June 10,382 1, ,994 There are no general collection assets that have been pledged as security or have restrictions on their use (30 June : Nil). 32 NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY -JANUARY

35 11. Schools collection Cost or valuation Opening balance 11,231 10,084 Additions 461 1,147 Closing balance 11,692 11,231 Accumulated depreciation and impairment losses Opening balance 8,514 7,243 Depreciation expense 359 1,271 Closing balance 8,873 8,514 Closing net carrying value 2,819 2,717 There are no school collection assets that have been pledged as security or have restrictions on their use (30 June : Nil). NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY -JANUARY 33

36 12. Property, plant and equipment /11 Land Buildings Leasehold improvements Building fit out Computer hardware Office equipment Furniture & fittings Artworks Motor vehicles Work in progress Total Cost or valuation Balance at 1 July 25,250 29,875 3,279 25,301 13,792 3,667 7, , ,630 Additions 31 1, ,719 5,166 Revaluation increase Disposals (13,984) (461) (31) (14,476) Transfer to additions ,012 (1,081) Balance as at 31 January 25,250 29,875 3,372 11,317 14,563 3,698 8, , ,320 Accumulated depreciation and impairment losses Balance at 1 July 1,103 1,162 18,611 9,821 3,209 5, ,001 Depreciation expense (68) 71 1,894 Eliminate on disposal (13,984) (461) (13) (14,458) Eliminate on revaluation Balance as at 31 January 1,415 1,532 4,895 10,179 3,331 5, ,437 Net carrying amount as at 31 January 25,250 28,460 1,840 6,422 4, , ,616 74, NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY -JANUARY

37 2009/10 Land Buildings Leasehold improvements Building fit out Computer hardware Office equipment Furniture & fittings Artworks Motor vehicles Work in progress Total Cost or valuation Balance at 1 July 25,250 29,875 1,642 25,225 13,065 4,514 11, , ,095 Additions , ,147 4,434 7,552 Revaluation increase Disposals (748) (4) (2,446) (1,102) (5,554) (7) (156) (10,017) Transfer to additions 2, , ,088 (5,010) Balance as at 30 June 25,250 29,875 3,279 25,301 13,792 3,667 7, , ,630 Accumulated depreciation and impairment losses Balance at 1 July 573 1,541 17,995 10,613 4,120 10, ,812 Depreciation expense , ,865 Eliminate on disposal (748) (1) (2,217) (1,102) (5,554) (54) (9,676) Balance as at 30 June Net carrying amount as at 30 June 1,103 1,162 18,611 9,821 3,209 5, ,001 25,250 28,772 2,117 6,690 3, , ,978 71,629 There are no items of Property, Plant and Equipment assets that have been pledged as security or have restrictions on their use (30 June : Nil). NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY -JANUARY 35

38 13. Intangible assets 31 Jan 30 June Acquired software Digitised Collections Work in progress Total Acquired software Digitised Collections Work in progress Total Cost Opening balance 21, ,978 18, ,668 Additions ,483 2,773 Disposals (240) (223) (463) Transfer from work in progress 115 (115) 2, (2,912) Closing balance 21, ,112 21, ,978 Accumulated amortisation and impairment losses Opening balance 11,705 11,705 10,607 10,607 Amortisation expense 1, ,072 1,340 1,340 Disposals (242) (242) Closing balance 12, ,777 11,705 11,705 Closing net carrying amount 9, ,335 10, ,273 The cost of Acquired Software includes $ million for the National Digital Heritage Archives. The full $0.144 million cost of Digitised collections relates to an amount capitalised for an all of domain. NZ web harvest to be stored in the National Digital Heritage Archive. There are no intangible assets that have been pledged as security or have restrictions on their use (30 June : Nil). 14. Creditors and other payables Creditors 694 2,879 GST payable Accrued expenses 2,117 1,590 3,174 4,823 Revenue in advance 1,461 2,247 Total creditors and other payables 4,635 7,070 Creditors and other payables are non-interest bearing and are normally settled on 30-day terms; therefore the carrying value of creditors and other payables approximates their fair value. 36 NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY -JANUARY

39 15. Repayment of surplus Comprehensive Income 4,835 3,891 Add: Net deficit not recovered from the Crown 156 Total repayment of surplus 4,835 4,047 For the periods ended 31 January and 30 June the National Library did not retain any surplus from legal deposits. 16. Current provisions 31 Jan 30 June Lease make good Restructuring Other Total Lease make good Restructuring Other Total Opening balance ,103 1,569 1, ,485 Additional provisions made ,135 Amounts used (75) (28) (103) (173) (777) (829) (1,779) Unused amounts reversed (747) (21) (125) (893) (586) (255) (841) Discount unwind Closing balance , ,103 Lease make-good The National Library is required at the expiry of the lease term of its leased premises to make good any damage and to remove any fixtures or fittings installed. Provision is allowed in both and for the projected costs for the making good on the leasing of buildings. Restructuring Provision has been made for one-off costs for the realignment of the National Library s services as part of the New Generation strategy and for the integration with the Department of Internal Affairs. Other The current provision is to cover remedial plumbing in Wanganui and release of the rent-free period concession in Auckland over the term of the lease. NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY -JANUARY 37

40 17. Employee entitlements Annual leave 1,391 1,604 Long service leave Accrued payroll expenses Total employee entitlements 2,482 2,684 Accrued payroll expenses have been reclassified from Accrued expenses where they were disclosed in the prior year. The comparative figures have bee updated this year to reflect the change in classification. 18. Taxpayers funds General funds Opening Balance 103, ,943 Net surplus 4,835 3,891 Capital contribution from the Crown 353 Repayment of capital (26) Provision for repayment of surplus to the Crown (4,835) (4,047) Closing General funds 103, ,114 Property revaluation reserves Opening Balance 7,767 7,767 Revaluation gains Closing Property revaluation reserves 7,767 7,767 Total taxpayers funds 110, ,881 Property revaluation reserves consist of: Land revaluation reserve Building revaluation reserve 7,767 7,767 Total revaluation reserves 7,767 7, NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY -JANUARY

41 19. Reconciliation of net surplus to net cash from operating activities Total comprehensive income 4,835 3,891 Add / (less) non-cash items: Depreciation and amortisation expense 4,706 8,260 Revenue from donations and legal deposit (206) (451) Discount unwind adjustment for lease make-good (713) (478) Reversal of unused provisions (125) Provision for bad debts 20 Net foreign exchange losses / (gains) Total non-cash items 3,695 7,463 Add / (less) items classified as investing or financing activities: (Gains) / losses on disposal of property, plant and equipment (30) (149) Total items classified as investing and financing activities (30) (149) Add / (less) movements in working capital items: (Increase) / decrease in debtors and other receivables 8,640 (2,247) (Increase) / decrease in prepayments (Increase) / decrease in inventories 5 20 Increase / (decrease) in creditors and other payables (2,710) 619 Increase / (decrease) in provisions 465 (1,486) Increase / (decrease) in employee entitlements (202) 51 Increase / (decrease) in derivative financial instruments Net movements in working capital items 6,286 (2,559) Net cash from operating activities 14,786 8,646 NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY -JANUARY 39

42 20. Related party transactions and key management personnel Related party transactions The National Library is a wholly owned entity of the Crown. The National Library has been provided with funding from the Crown of $38.16 million (30 June : $64.30 million) for specific purposes as set out in its founding legislation and the scope of the relevant government appropriations. In conducting its activities, the National Library is required to pay various taxes and levies (such as GST, FBT, PAYE, and ACC levies) to the Crown and entities related to the Crown. The payment of these taxes and levies, other than income tax, is based on the standard terms and conditions that apply to all tax and levy payers. The Library is exempt from paying income tax. In conducting its activities the Library also purchased goods and services from entities controlled, significantly influenced, or jointly controlled by the Crown. Purchases of these government-related entities for the 7 month period ended 31 January totalled $0.596 million (30 June : $0.415 million). These purchases included reimbursement of shared services with the Department of Internal Affairs around the integration, rental costs to Archives New Zealand while the Library is out of the Molesworth Street building and salary remuneration to State Services Commission. The National Library also provides various levels of secretarial and administrative support at no charge to: The Library and Information Advisory Commission Lilburn Trust The Guardians Kaitiaki of the Alexander Turnbull Library National Library Society Alexander Turnbull Library Endowment Trust New Zealand Cartoon Archive Trust Key management personnel compensation Salaries and other short-term employee benefits (including the Chief Executive) 804 1,651 Termination benefits - 88 Other long-term benefits Total key management personnel compensation 841 1,823 Key management personnel are the 11 (30 June :10) members of the National Library s Strategic Leadership Team. 21. Events after the balance date The National Library was dissolved as a separate department of state on 31 January. All key assets, liabilities and commitments transferred to the Department of Internal Affairs on 1 February. The 22 February earthquake in Christchurch brought a hold to the Library s activities from its Christchurch Manchester Street location now performed from the temporary location in Christchurch and the Library s Palmerston North branch. The Manchester Street building is red-stickered and discussions are underway with the insurance company to determine how our assets and collections will be recovered from the building. Also, as a result of the 40 NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY -JANUARY

43 earthquake, the Library may no longer have a make-good provision obligation for the Manchester Street location. No official decisions have been made regarding the building. 22. Financial instrument risks The National Library s activities expose it to a variety of financial instrument risks, including market risk, credit risk and liquidity risk. The National Library has a series of policies to manage the risks associated with financial instruments and seeks to minimise exposure from financial instruments. These policies do not allow any transactions that are speculative in nature to be entered into. Market risk Currency risk Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The National Library purchases computer software (intangible assets) internationally and is exposed to currency risk arising from currency exposure to the US dollar. Currency risk arises from future purchases and recognised liabilities, which are denominated in a foreign currency. The National Library s foreign exchange policy requires the Library to manage currency risk arising from future transactions and recognised liabilities by entering into foreign exchange forward contracts to hedge the entire foreign currency risk exposure. The National Library s policy has been approved by the Treasury and is in accordance with the requirements of the Treasury Guidelines for the Management of Crown and Departmental Foreign Exchange Exposure. Sensitivity analysis As at 31 January, if the NZ dollar had weakened / strengthened by 5% against the US dollar with all other variables held constant, the surplus / deficit for the year would have been Nil lower/higher (30 June : Nil). This movement is attributable to the foreign exchange gains / losses on translation of US denominated creditors. Interest rate risk Interest rate risk is the risk that the fair value of a financial instrument will fluctuate or, the cash flows from a financial instrument will fluctuate, due to changes in market interest rates. The National Library has no interest bearing financial instruments and accordingly, has no exposure to interest rate risk. Credit risk Credit risk is the risk that a third party will default on its obligations to the National Library, causing the National Library to incur a loss. In the normal course of business, credit risk arises from debtors, deposits with banks and derivative financial instrument assets. The National Library is only permitted to deposit funds with Westpac, a registered bank, and enter into foreign exchange forward contracts with the New Zealand Debt Management Office. The National Library s maximum credit exposure for each class of financial instrument is represented by the total carrying amount of cash and cash equivalents, net debtors (note 8). Liquidity risk Liquidity risk is the risk that the National Library will encounter difficulty raising liquid funds to meet commitments as they fall due. In meeting its liquidity requirements, the National Library closely monitors its forecast cash requirements with expected cash drawdowns from the New Zealand Debt Management Office. The National Library maintains a target level of available cash to meet liquidity requirements. NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY -JANUARY 41

44 The table below analyses the National Library s financial liabilities that will be settled based on the remaining period at balance date to the contractual maturity date. The amounts disclosed are the contractual undiscounted cash flows. 31 Jan 30 June Less than 6 months Between 6 months & 1 year Between 1 & 5 years Over 5 years Less than 6 months Between 6 months & 1 year Between 1 & 5 years Over 5 years Creditors and other payables (note 14) Derivative financial instrument liabilities 3,174 4,823 Closing balance 3,174 4, Categories of financial instruments The carrying amounts of financial assets and financial liabilities are as follows: Financial Assets Loans and receivables Cash and cash equivalents 20,947 15,835 Debtors and other receivables (note 8) 779 9,439 Loans and receivables 21,726 25,274 Fair value through statement of comprehensive income Derivative financial instrument assets Fair value through statement of comprehensive income Total financial assets 21,726 25,274 Financial liabilities Measured at amortised cost Creditors and other payables (note 14) 4,635 7,070 Measured at amortised cost 4,635 7,070 Fair value through statement of comprehensive income Derivative financial instrument liabilities Fair value through statement of comprehensive income Total financial liabilities 4,635 7, NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY -JANUARY

45 24. Capital management The National Library s Taxpayers funds (equity) comprise general funds and revaluation reserves. Net assets represent taxpayers funds. The National Library manages its revenues, expenses, assets, liabilities and general financial dealings prudently. The National Library s Taxpayers funds is largely managed as a by-product of managing income, expenses, assets, liabilities and compliance with the Government s budget process and with Treasury instructions. The objective of managing the National Library s Taxpayers funds is to ensure the National Library effectively achieves the goals and objectives for which it was established. 25. Explanation of major variances against budget Explanations for major variances from the National Library s October baseline update are as follows: Statement of comprehensive income Department and other revenue The variance between actual revenue and the October Baseline Update budget mainly relates to an evenly spread budget where as billing occurs quarterly and revenue received in advance for Electronic Purchase in Collaboration (EPIC) and Te Puna. Statement of financial position Current Assets The variance between the assets reported and the October Baseline Update budget relates to more groundwork being undertaken on the Wellington building in earlier design stages, delaying onsite construction and resulting in a higher bank and lower asset balance at the end of January than anticipated. The programme is on track to be back in the Molesworth Street building by April 2012 as per the original programme timetable. The additional modest refurbishment of the third, ground and lower ground floors will mean some work will be completed while the Library is operating from the Molesworth Street building. Liabilities The reduction in liabilities mainly came from the reduction of $2.563 million in creditors and other payables. The Library has put a big effort into paying as many creditors as possible prior to the integration into the Department of Internal Affairs from 1 February. Expenditure A significant part of the variance between the actual spend and the October Baseline Update budget mainly relates to: Personnel costs: not filling personal vacancies Depreciation and amortisation expense: a reduction in depreciation from deferred capital projects Finance costs: releasing part of the Christchurch make good provision Other operating expenses: greater savings on Voice over Internet Provider (VolP) than forecast, finding sponsorship for Mix n Match competition, delay in Aotearoa Peoples Network Kaharoa (APNK) roll out and organisational development now taking place next year before opening the redeveloped Molesworth Street building for which an expense transfer has been approved. NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY -JANUARY 43

46 Statement of Objectives and Service Performance for the seven months ended 31 January 1. Access to information ) Mains Est Income Revenue from the Crown 15,657 15,614 24,892 28,844 Revenue from Government departments Other revenue 2,142 3,194 4,255 3,586 Total income 17,911 18,939 29,927 33,193 Total operating expenditure 16,943 13,401 21,655 31,065 Net surplus 968 5,538 8,272 2,128 Mains Est Maintaining and building databases and access tools The number of descriptive records added to the TAPUHI database of unpublished heritage collection items making them searchable online will be at least. Variance Explanation: The annual target is premised on the implementation of an optimal workflow for the Pictures Online project. Achieving this has not been possible in the context of the Library s temporary relocation. A rescoping exercise is currently underway to revise the year-end forecast. The number of items digitised and made available online will be at least. Note: previous measure was Number of digital objects in a number of formats. Variance Explanation: Due to the way this data is collected the total figure to date is for eight months rather than seven, and it is expected that the final total for the year will be on target. Percentage of catalogue records created for newly published material added to the heritage and general collections and items accessible within 15 working days. 45, , ,000 N/A 404, , , ,190 91% 90% 90% 88% 44 NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY -JANUARY

47 Mains Est Providing access to the collections Deliver on the agreed service models for Services for Researchers and Visitor Experience. Explanation: Work on Services for Researchers (initiation of the 0800 Freephone and Distance Enquiry projects) progressed, with these projects on track to be completed by end, and Phase 1 of the Online Channel to be released in July as scheduled. The Visitor Experience components are progressing to plan: the coordinated content plan of The Commons will be completed by 29 April and the design and prototyping of Lifelines will be completed by 29 July. The availability of National Library of New Zealand websites will be a minimum of 95%. Number of unique visits to the National Library website ( Variance Explanation: The forecast for -11 was based on the total number of visits for Further analysis to identify the -11 variance shows that had an unusually busy period of web activity when the Library moved out of its Wellington building and launched a popular new web product. When adjusting for this, the forecast for -11 should have been closer to 700,000. In -11 the Library also launched a new website for its schools services, and this has taken traffic away from the Library s main website. Number of researchers assisted (Assisted access onsite, telephone and correspondence). Variance Explanation: This measure was set too high as a result of the Library s on-site access services being unavailable for longer than anticipated during the relocation. These figures are also affected by the reporting period ending with December-January, when visitor numbers are lower than average across the whole year. Achieved Achieved Achieved N/A 95% 95% 95% N/A 462, , , ,912 31,934 48,000 80,000 86,209 Advice and support for New Zealand libraries and information organisations Percentage of Document Supply Service Requests (non school) completed within 2 working days will be at least 95%. 100% 95% 95% N/A User satisfaction and access Develop a set of surveys to measure the satisfaction of customers with the assistance and facilities provided for access to collections. Note: This is an interim result from our pilot in- person surveys undertaken at the Thorndon Quay and Archives New Zealand reading rooms. Routine customer testing is in place for service development. 93% 95% 95% 100% NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY -JANUARY 45

48 2. Collecting and preserving information Mains Est Income Revenue from the Crown 14,216 14,017 21,270 21,067 Revenue from Government departments Other revenue Total income 14,561 14,345 21,655 21,728 Total operating expenditure 11,652 18,501 30,100 21,443 Net surplus 2,909 (4,156) (8,445) 285 Mains Est Collecting and Preserving Information Percentage of accession records completed within 10 working days of material arriving in the Library will be at least 95%. Note: This is a new measure for. A sample survey of activity and turnaround is planned for April-May and the information gathered will be available for end of year reporting. Preservation and Conservation activities Not Available 95% 95% N/A The number of at-risk items copied to digital formats and preserved in the National Digital Heritage Archive will be at least 1,000. Variance Explanation: This was a new measure in and the forecast was set too low as a result. As items in a digital format differ from items in physical cataloguing, it is necessary to distinguish these. There were 46 pictorial and manuscript items copied in the Turnbull Library Preservation Copying Programme, resulting in 2,921 digital images. There were 695 audio items copied as part of the Retrospective Audio Preservation Programme resulting in 695 digital objects. Programme Manage the building construction to fully address the scope of works as agreed by cabinet, to schedule and within budget. Explanation: Work on building construction continued on track, including the tendering of a subcontract for Part 2 of the works scheduled to commence in March and for the completion of Part 1 and 2 of the works by March 2012 and Part 3 by July ,000 N/A Achieved Achieved Achieved N/A 46 NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY -JANUARY

49 3. Library and information services to schools Mains Est Income Revenue from the Crown 7,767 7,912 15,140 13,304 Revenue from Government departments Other revenue Total income 7,882 8,032 15,575 13,486 Total operating expenditure 6,991 7,852 15,575 12,195 Net surplus ,291 Mains Est Curriculum and library information support to schools Number of advisory contacts and engagements with schools Note: This was a new measure in and the forecast for was set too low as a result. This will be revised for Variance Explanation: Increased results are due to the 0800 service introduced in ; increased access to advisory support via the new Services to Schools website; and heightened awareness of the Library s services to schools arising from the new National Library Auckland centre. Percentage of Document Supply Service Requests for schools completed in 4 working days will be at least 95%. Percentage of Requests to Curriculum Information Services completed within 5 working days will be at least 85%. Variation Explanation: This is an annual target, set across three collection locations and reflects a range of achievement in response to policy changes, demand patterns, resourcing and measurement systems. System improvements at a national level will be introduced to ensure more consistent measurement and standard management practices for requests. User satisfaction with access advice for services for young New Zealanders in schools will be at least 95%. Explanation: This is an annual target based on data collected across a 12-month period. Response rates average 20% of participants in each activity for the seven months to 31 January. Full-year results will be available at the end of June. 2,111 1,200 1,900 3, % 95% 95% N/A 71% 85% 85% 81% 91% 95% 95% N/A NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY -JANUARY 47

50 4. Policy and statutory servicing Mains Est Income Revenue from the Crown ,121 1,080 Revenue from Government departments Other revenue Total income ,142 1,100 Total operating expenditure , Net surplus Mains Est Percentage of Policy papers that the Minister is satisfied with in regard to the following characteristics: Purpose, Logic, Accuracy, Options, Consultation, Practicality, Timeliness, Presentation. Percentage of questions and other requests completed within statutory and other agreed timeframes. 100% 95% 95% 100% 100% 95% 95% 100% Satisfaction of the Chair of the Library and Information Advisory Committee with the quality of support. Note: This is an end of year measure, which is collected and analysed annually. The next survey is due in June and will be reported in the full year results. Not Available Achieved Achieved Satisfactory 48 NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY -JANUARY

51 NON-DEPARTMENTAL STATEMENTS Non-Departmental Statements and Schedules for the seven months ended 31 January The following non-departmental statements and schedules record the income, expenses, assets, liabilities, commitments, contingent liabilities, contingent assets and trust accounts that the National Library manages on behalf of the Crown. This activity relates to the management of the heritage collections owned by the Crown and held in the Alexander Turnbull Library and the administering of the Public Lending Rights for New Zealand Authors scheme. Schedule of Non-Departmental Income for the seven months ended 31 January Note Mains Est Income Donations and legal deposit 748 1,160 1,160 1,160 Total non-departmental income 748 1,160 1,160 1,160 Schedule of Non-Departmental Expenses for the seven months ended 31 January Note Mains Est Expenses Grants to authors ( Public lending rights) 1,993 2,000 2,000 2,002 GST input expense Total non-departmental expenses 2,148 2,185 2,065 2,151 NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY -JANUARY 49

52 Schedule of Non-Departmental Assets as at 31 January Note Mains Est Assets Current assets Cash and cash equivalents 2,042 2,185 2,435 2,082 Total current assets 2,042 2,185 2,435 2,082 Non-current assets Heritage collections 2 968, , , ,828 Total non-current assets 968, , , ,828 Total non-departmental assets 970, , , ,910 Section 11 of the National Library of New Zealand (Te Puna Mätauranga o Aotearoa) Act 2003 states that the Crown must continue to own the collections of the Alexander Turnbull Library in perpetuity. The accompanying notes form part of these financial statements. For a full understanding of the Crown s financial position and operations, reference should be made to the consolidated Financial Statements of the Government for the year ended 30 June. Schedule of Non-Departmental Liabilities and Revaluation Reserves as at 31 January Note Mains Est Liabilities Current liabilities Creditors and other payables Total current liabilities Revaluation reserve Heritage collections revaluation reserve 4 410, , , ,960 Total revaluation reserve 410, , , ,960 Total non-departmental liabilities and revaluation reserve 411, , , , NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY -JANUARY

53 Schedule of Non-Departmental Commitments as at 31 January The National Library on behalf of the Crown has no commitments (30 June : $ nil). Schedule of Non-Departmental Expenses and Capital Expenditure against Appropriations for the seven months ended 31 January Vote Public Issues The National Library has an output expenses appropriation of $2.000 million for Public Lending Right payments to authors (30 June : $2 million). Appropriation for capital expenditure The National Library has an annual appropriation for purchases for the heritage collections, which are owned by the Crown and held in the Alexander Turnbull Library. Note Mains Est Capital appropriation Purchase of Heritage collections 787 2,518 1,546 1,482 Total capital appropriation 787 2,518 1,546 1,482 Schedule of Non-Departmental Unappropriated Expenses and Capital Expenditure for the seven months ended 31January There has been no unappropriated expenditure and no unappropriated capital expenditure for the seven months ended 31 January (30 June : $ nil). Schedule of Non-Departmental Contingent Liabilities and Contingent Assets as at 31 January Unquantified contingent liabilities The National Library on behalf of the Crown has no unquantified contingent liabilities (30 June : $ nil). Unquantified contingent assets The National Library on behalf of the Crown has no unquantified contingent assets (30 June : $ nil). The accompanying notes form part of these financial statements. For a full understanding of the Crown s financial position and the operations for the period, reference should be made to the consolidated Financial Statements of the Government for the year ended 30 June. NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY -JANUARY 51

54 Notes to the Non Departmental Statements and Schedules for the seven months ended 31 January 1. Statement of accounting policies Reporting entity These non-departmental schedules and statements present financial information on public funds managed by the National Library on behalf of the Crown. This activity relates to the management of the heritage collections owned by the Crown and held in the Alexander Turnbull Library and the administering of the Public Lending Rights scheme established by the Public Lending Rights for New Zealand Authors Act These non-departmental balances will be consolidated into the Financial Statements of the Government as at 30 June. For a full understanding of the Crown s financial position, results of operations and cash flows for the year, reference should also be made to the consolidated Financial Statements of the Government. Basis of preparation These financial statements have been prepared in accordance with New Zealand generally accepted accounting practice (NZ GAAP). They comply with New Zealand equivalents to IFRS (NZ IFRS) and other applicable Financial Reporting Standards, as appropriate for public benefit entities. figures The budget figures are those included in the National Library financial information in the October Baseline Update (OBU) for the seven months to 31 January. The Mains Estimates is the budget for the full / financial year. Accounting policies The non-departmental schedules have been prepared in accordance with the Government s accounting policies as set out in the consolidated Financial Statements of the Government, and in accordance with relevant Treasury instructions and Treasury circulars. The accrual basis of accounting has been used unless otherwise stated. These financial statements are presented in New Zealand dollars rounded to the nearest thousand. The accounting policies set out below have been applied consistently to all periods presented in these financial statements. The following particular accounting policies have been applied: Revenue Donations and legal deposits When a heritage collection asset is acquired for nil or nominal consideration the fair value of the asset received is recognised as revenue in the Statement of comprehensive income. The classification of Crown funding has changed from income as it was disclosed last year, to capital contributions as agreed with Treasury. The comparative figures have been updated this year to reflect the change in classification. Goods and services tax (GST) All items in the financial statements, including appropriation statements, are stated exclusive of GST, except for payables, which are stated on a GST inclusive basis. An input tax deduction is not claimed on non-departmental capital expenditure. Instead, the amount of GST applicable to non-departmental expenditure is recognised as a separate expense and eliminated against GST revenue on consolidation of the Government financial statements. 52 NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY -JANUARY

55 2. Heritage collections Cost or valuation Opening balance 966, ,310 Additions 1,535 2,518 Revaluation increase (note 4) Closing balance 968, ,828 There are difficulties associated with obtaining an objective valuation for the specified cultural and heritage assets of the Government. These are discussed below. National Library Collections The Heritage collections are measured at fair value. Due to the unique nature of the Heritage collections it is not always practical or possible to obtain a market valuation. In these circumstances collections have been adjusted by the movement in the CPI to better reflect their current value. The valuation is performed every three years. The Heritage collections were last revalued on 30 June 2008 by National Library staff. An appropriately qualified valuer, Mr Rowan Gibbs proprietor, Smiths Bookshop Limited, independently reviewed the valuation methodology. The carrying value includes the value of purchases for the collections since the last revaluation and the value of material received through donations and legal deposit. Section 11 of the National Library of New Zealand (Te Puna Mätauranga o Aotearoa) Act 2003 requires the Crown to own the collections held in the Alexander Turnbull Library in perpetuity. The Heritage Collections are not depreciated. NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY -JANUARY 53

56 3. Creditors and other payables Creditors Accrued heritage collection purchases 5 15 Total creditors and other payables Creditors and other payables are non-interest bearing and are normally settled on 30-day terms; therefore the carrying value of creditors and other payables approximates their fair value. 4. Heritage collections revaluation reserve Opening balance 410, ,960 Revaluation gains (note 2) Closing balance 410, , Explanation of major variances against budget Explanations for major variances from the National Library s mains estimates figures are as follows: Schedules of income and expenses There are no significant variations to budget. Schedules of assets, liabilities and revaluation reserves There are no significant variations to budget. 54 NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY -JANUARY

57 Statement of Trust Monies for the seven months ended 31 January Under the National Library of New Zealand (Te Puna Mätauranga o Aotearoa) Act 2003, the Macklin Bequest Fund and the Interloans Billing System Fund are held and administered by the National Library. The funds are administered on behalf of the Crown under part 7 of the Public Finance Act 1989 and by delegation from the Secretary to the Treasury. Trust money can only be invested in New Zealand registered banks. 1. Macklin Bequest Fund Trust Account The Macklin Bequest Fund is used to fund special activities and purchases, which are clearly and separately identifiable. Opening balance Interest income 5 10 Expenditure (10) Closing balance Interloan Billing System Trust Account The Interloan Billing System administers the interloan billing activities carried out between New Zealand Libraries. Opening balance 3 Receipts Payments (237) (393) Closing balance 3 NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY -JANUARY 55

58 AUDIT REPORT INDEPENDENT AUDITOR S REPORT TO THE READERS OF THE NATIONAL LIBRARY OF NEW ZEALAND S FINANCIAL STATEMENTS, STATEMENT OF SERVICE PERFORMANCE AND SCHEDULES OF NON- DEPARTMENTAL ACTIVITIES FOR THE SEVEN MONTHS ENDED 31 JANUARY The Auditor-General is the auditor of the National Library of New Zealand (the National Library). The Auditor-General has appointed me, Phil Kennerley, using the staff and resources of Audit New Zealand, to carry out the audit of the financial statements, statement of service performance and schedules of non-departmental activities of the National Library on her behalf. We have audited: the financial statements of the National Library on pages 13 to 43, that comprise the statement of financial position, statement of commitments and statement of contingent liabilities and contingent assets as at 31 January, the statement of comprehensive income, statement of changes in taxpayer s funds, statement of departmental expenses and capital expenditure against appropriations, statement of unappropriated expenditure and capital expenditure, and statement of cash flows for the seven months ended on that date and the notes to the financial statements that include accounting policies and other explanatory information; the statement of service performance of the National Library on pages 44 to 48; and the schedules of non-departmental activities of the National Library on pages 49 to 55 that comprise the schedule of assets, schedule of liabilities and revaluation reserves, schedule of commitments and schedule of contingent liabilities and contingent assets as at 31 January, the schedule of expenses, schedule of expenditure and capital expenditure against appropriations, schedule of unappropriated expenditure and capital expenditure, schedule of income and statement of trust monies, for the seven months ended on that date and the notes to the schedules that include accounting policies and other explanatory information. Opinion In our opinion: the financial statements of the National Library on pages 13 to 43, that are prepared on a disestablishment basis: comply with generally accepted accounting practice in New Zealand; and fairly reflect the National Library s: financial position as at 31 January ; financial performance and cash flows for the seven months ended on that date; expenses and capital expenditure incurred against each appropriation administered by the National Library and each class of outputs included in each output expense appropriation for the seven months ended 31 January ; and unappropriated expenses and capital expenditure for the seven months ended 31 January. the statement of service performance of the National Library on pages 44 to 48: complies with generally accepted accounting practice in New Zealand; and fairly reflects for each class of outputs for the seven months ended 31 January : its service performance compared with the forecasts in the statement of forecast service performance at the start of the financial year; and its actual revenue and output expenses compared with the forecasts in the statement of forecast service performance at the start of the financial year. the schedules of non-departmental activities of the National Library on pages 49 to 55, fairly reflect: the assets, liabilities, contingencies, commitments and trust monies as at 31 January managed by the National Library on behalf of the Crown; and the revenues, expenses, expenses and capital expenditure against appropriations and unappropriated 56 NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY -JANUARY

59 expenditure and capital expenditure for the seven months ended on that date managed by the National Library on behalf of the Crown. Emphasis of Matter The financial statements are appropriately prepared on a disestablishment basis Without modifying our opinion, we considered the accounting policy on page 21 about the financial statements being prepared on a disestablishment basis. The National Library of New Zealand (Te Puna Mätauranga o Aotearoa) Amendment Act dissolved the National Library from 31 January and vested its assets and liabilities in the Department of Internal Affairs (the Department). We consider the basis of preparation of the financial statements and the related disclosures to be appropriate to the National Library s circumstances. Our audit was completed on 12 May. This 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 Chief Executive of the National Library, the Chief Executive of the Department and our responsibilities, and we explain our independence. Basis of opinion We carried out our audit in accordance with the Auditor-General s Auditing Standards, which incorporate the International Standards on Auditing (New Zealand). Those standards require that we comply with ethical requirements and plan and carry out our audit to obtain reasonable assurance about whether the financial statements, statement of service performance and schedules of non-departmental activities are free from material misstatement. Material misstatements are differences or omissions of amounts and disclosures that would affect a reader s overall understanding of the financial statements, statement of service performance and schedules of non-departmental activities. If we had found material misstatements that were not corrected, we would have referred to them in our opinion. An audit involves carrying out procedures to obtain audit evidence about the amounts and disclosures in the financial statements, statement of service performance and schedules of non-departmental activities. The procedures selected depend on our judgement, including our assessment of risks of material misstatement of the financial statements, statement of service performance and schedules of non-departmental activities, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the preparation of the financial statements, statement of service performance and schedules of non-departmental activities that fairly reflect the matters to which they relate. We consider internal control in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the internal control. An audit also involves evaluating: the appropriateness of accounting policies used and whether they have been consistently applied; the reasonableness of the significant accounting estimates and judgements made; the adequacy of all disclosures in the financial statements, statement of service performance and schedules of non-departmental activities; and the overall presentation of the financial statements, statement of service performance and schedules of nondepartmental activities. We did not examine every transaction, nor do we guarantee complete accuracy of the financial statements, statement of service performance and schedules of non-departmental activities. We have obtained all the information and explanations we have required and we believe we have obtained sufficient and appropriate audit evidence to provide a basis for our audit opinion. Responsibilities of the Chief Executive of the Department of Internal Affairs and the Chief Executive of the National Library The National Library s financial statements, statement of service performance and schedules of non-departmental activities for the seven months ended 31 January have been completed by the Chief Executive of the Department under the authority from the Minister of Finance in accordance with section 45J of the Public Finance Act The Chief Executive of the Department is responsible for preparing: financial statements and a statement of service performance that: comply with generally accepted accounting practice in New Zealand; fairly reflect the National Library s financial position, financial performance, cash flows, expenses and NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY -JANUARY 57

60 capital expenditure incurred against each appropriation and its unappropriated expenses and capital expenditure; and fairly reflects its service performance; and schedules of non-departmental activities, in accordance with the Treasury Instructions that fairly reflect those activities managed by the National Library on behalf of the Crown. Up until 31 January, the Chief Executive of the National Library was responsible for such internal control as determined necessary to enable the preparation of financial statements, a statement of service performance and schedules of non-departmental activities that are free from material misstatement, whether due to fraud or error. From 1 February, the Chief Executive of the Department took over these responsibilities to enable the completion of the financial statements, statement of service performance and schedules of non-departmental activities. The responsibilities of the Chief Executive of the Department and the Chief Executive of the National Library arise from the Public Finance Act Responsibilities of the Auditor We are responsible for expressing an independent opinion on the financial statements, statement of service performance and schedules of non-departmental activities and reporting that opinion to you based on our audit. Our responsibility arises from section 15 of the Public Audit Act 2001 and the Public Finance Act 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 National Library. Phil Kennerley Audit New Zealand On behalf of the Auditor-General Wellington, New Zealand Matters relating to the electronic presentation of the audited financial statements, statement of service performance and schedules of non-departmental activities for the National Library of New Zealand. This audit report relates to the financial statements, statement of service performance and schedules of non-departmental activities of the National Library of New Zealand for the seven months ended 31 January included on the National Library s website. As from 1 February the Chief Executive of the Department of Internal Affairs is responsible for the maintenance and integrity of the National Library of New Zealand s website. We have not been engaged to report on the integrity of the National Library of New Zealand s website. We accept no responsibility for any changes that may have occurred to the financial statements, statement of service performance and schedules of non-departmental activities since they were initially presented on the website. The audit report refers only to the financial statements, statement of service performance and schedules of non-departmental activities named above. It does not provide an opinion on any other information which may have been hyperlinked to or from the financial statements, statement of service performance and schedules of non-departmental activities. 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, statement of service performance and schedules of non-departmental activities and related audit report dated 12 May to confirm the information included in the audited financial statements, statement of service performance and schedules of non-departmental activities presented on this website. Legislation in New Zealand governing the preparation and dissemination of financial information may differ from legislation in other jurisdictions. 58 NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY -JANUARY

61 COVER PHOTO: Group of children with books, at a kindergarten in Wellington. Photograph taken by Stanley Polkinghorne Andrew in the 1930s. S P Andrew Collection Reference number: 1/ F G.13

62 DIRECTORY National Library of New Zealand Te Puna Mätauranga o Aotearoa 77 Thorndon Quay PO Box 1467 Wellington 6001 New Zealand T F E. reference@natlib.govt.nz Alexander Turnbull Library PO Box Wellington 6001 New Zealand T F E. atl@natlib.govt.nz Auditor Audit New Zealand Wellington On behalf of the Auditor-General Banker Westpac ISSN NATIONAL LIBRARY OF NEW ZEALAND TE PUNA MÄTAURANGA O AOTEAROA ANNUAL REPORT JULY -JANUARY