Audited financial statements

Statement of Financial Performance
                CONSOLIDATED     PARENT
for the Year ended 30 June: 2004 2004 2003   2004 2004 2003
      Budget     Budget  
  Note $000s $000s $000s   $000s $000s $000s
Total Revenue 1 45,166 45,654 42,678   42,790 42,776 40,114
Operating Surplus [EBIT]   1,637 1,914 3,461   1,460 1,145 2,769
Interest and Net Non-Operating Income   (77) (266) 341   438 234 760
Investment Project Expenditures   (1,506) (3,103) (4,118)   (1,472) (3,103) (4,118)
Amortisation of Goodwill on Consolidation   (15) -  -    -  -  - 
Net Surplus / (Deficit) before Taxation 2 39 (1,455) (315)   426 (1,724) (589)
Taxation (Credit) / Expense 3 72 (480) (78)   200 (536) (136)
Net Surplus / (Deficit) after Taxation 4 (33) (975) (237)   226 (1,188) (453)
  add-back tax-paid net deficit attributable to minority shareholders in subsidiaries   28 - -   - - -
Net surplus / (deficit) attributable to
parent company shareholders		   (5) (975) (237)   226 (1,188) (453)
       

For non-accountants:
The parent company is Landcare Research New Zealand Limited (Landcare Research or Manaaki Whenua); the consolidated company includes Sirtrack Ltd and Landcare Research International Ltd, which has an 81.5% share of Fertility control Pty Ltd. We paid more for our share in Fertility Control Pty Ltd than the net tangible assets — hence the concept of ‘goodwill’ arises.

Manaaki Whenua’s operating surplus was more than budgeted. However, Sirtrack did not earn as much as expected resulting in the consolidated operating surplus before tax being less than expected. Another key point is that Manaaki Whenua did not spend as much on investments as budgeted — there were fewer opportunities for commercialisation than anticipated. This means that instead of making a loss, we had a surplus on which we paid tax. (We would have received a tax credit on a loss).

Our Crown owners believe CRIs should have debt because debt imposes a discipline on cash management. Part of that discipline is to make more money than the interest costs incurred on the borrowed amount.

Statement of Movements in Equity
              CONSOLIDATED     PARENT
for the Year ended 30 June : 2004 2004 2003   2004 2004 2003
    Budget   Budget  
  Note $000s $000s $000s   $000s $000s $000s
Equity at beginning of year   22,371 20,751 21,869   21,437 19,882 21,151
Net (deficit) / surplus after taxation                
  attributable to parent company   (5) (975) (237)   226 (1,188) (453)
  attributable to minority interests   (28) -  -    -  -  - 
Movement in foreign currency reserves   (9) -  -    -  -  - 
Recognition of library assets 5 -  -  739   -  -  739
Total recognised revenue and expenses   (43) (975) 502   226 (1,188) 286
Minority Interest in Contributions from Owners 86 - -   - - -
Equity at end of year   22,415 19,776 22,371   21,663 18,694 21,437
 
The accompanying Accounting Policies and Notes form part of these Financial Statements.
 

For non-accountants:
Equity is explained in more detail in the Statement of Financial Position below.
Statement of Financial Position
            CONSOLIDATED   PARENT
As at 30 June : 2004 2004 2003   2004 2004 2003
      Budget   Budget  
  Note $000s $000s $000s   $000s $000s $000s
Total Equity   6 22,415 19,776 22,371   21,663 18,694 21,437
Assets                  
  Bank Balances and Deposits   1,309 186 3,608   824 73 3,487
  Debtors and Prepayments   7 5,758 5,100 5,553   5,273 4,500 4,708
  Stocks and Work in Progress     587 875 699   77 100 80
  Total Current Assets     7,655 6,161 9,860   6,174 4,673 8,275
  Deferred Tax Benefits   3 935 1,961 1,007   1,033 2,214 1,234
  Fixed Assets & Patents   8 30,548 26,834 21,178   30,216 26,333 20,887
  Library Asset   5 1,169 262 1,100   1,169 262 1,100
  Investments in / Loans to Subsidiaries     -  450 -    662 700 250
  Goodwill on Consolidation     105 -  -    -  -  - 
  Total Non-Current Assets     32,757 29,507 23,285   33,080 29,509 23,470
  Total Assets     40,412 35,668 33,144   39,254 34,182 31,745
Liabilities                  
  Bank Credit Facility   11 3,062 -  -    3,062 -  - 
  Creditors and Accruals   9 5,227 3,820 4,458   5,157 3,700 >4,242
  Provision - Staff liabilities     3,447 3,991 4,154   3,332 3,827 4,026
  Revenue in Advance   10 1,822 1,120 1,699   1,601 1,000 1,578
  Total Current Liabilities     13,557 8,931 10,311   13,152 8,527 9,846
  Term Payment Facilities     -  -  6   -  -  6
  Long Term Debt Finance   11 4,000 6,500 -    4,000 6,500 - 
  Term Provision - Staff liabilities     440 461 457   440 461 457
  Total Non-Current Liabilities     4,440 6,961 462   4,440 6,961 462
  Total Liabilities     17,997 15,892 10,773   17,591 15,488 10,308
Net Assets     22,415 19,776 22,371   21,663 18,694 21,437
                     
The accompanying Accounting Policies and Notes form part of these Financial Statements.
JR Raine
Director
Date: 23 August 2004 		  AJ Urlwin
Director
Date: 23 August 2004
Statement of Cash Flows
                  CONSOLIDATED     PARENT
  for the Year ended 30 June : 2004 2004 2003   2004 2004 2003
          Budget       Budget  
      Note $000s $000s $000s   $000s $000s $000s
Cashflows from / used in Operating Activities                  
  Received from Customers     45,057 45,374 41,323   42,235 42,526 39,154
  Interest Received     89 12 403   69 12 401
  Dividend Received     -  -  -    535 500 420
  Disbursed to Suppliers & Employees     (41,670) (43,552) (39,537)   (39,423) (41,459) (37,810)
  Interest Paid     (169) (278) (2)   (169) (278) (2)
  Tax Refund / (Paid)     -  -  1   -  -  - 
  Net Cash Flows from Operating Activities   4 3,308 1,556 2,189   3,247 1,301 2,163
Cashflows from / used in Investing Activities                
  Capital Gains / Sale of Fixed Assets   33 -  -    33 -  - 
  Purchase of Fixed Assets & Patents     (12,656) (8,066) (4,962)   (12,592) (7,834) (4,785)
  Investment in / Loan to Subsidiaries     (34) -  -    (412) -  - 
  Net Cash Flows used in Investing Activities   (12,657) (8,066) (4,962)   (12,971) (7,834) (4,785)
Cashflows from / used in Financing Activities                
  Debt Finance     7,062 6,000 -    7,062 6,000 - 
  Net Cash Flowsfrom Financing Activities   7,062 6,000 -    7,062 6,000 - 
Net Increase/(Decrease) in Cash   (2,287) (510) (2,774)   (2,662) (533) (2,622)
Opening Bank Balances and Deposits   3,608 696 6,381   3,487 606 6,109
Effect of Exchange Rate Fluctuations on Cash (11) -  -    -  -  - 
Closing Bank Balances and Deposits   1,309 186 3,608   824 73 3,487
 

The accompanying Accounting Policies and Notes form part of these Financial Statements.
 

For non-accountants:
The adjustments made to reconcile the operating ‘Net Surplus after Tax’ (Statement of Financial Performance — accrual accounting) with the operating ‘Net Cash Flow surplus’ (Statement of Cash Flows — cash accounting).

Accounting policies:
See the Statement of Accounting Policies.
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Annual Report 2003/04

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