Operating Outcome

During 2015–16, income, including revenue from government, amounted to $66.054 million and expenses were $75.097 million, resulting in a deficit of $9.043 million. From an income-statement perspective, the Library does not receive appropriation funding for depreciation of the national collection (totalling $11.129 million), which forms part of operating expenses. The Library receives funding for additions to the national collection through a separate Collection Development Acquisition Budget provided through an equity appropriation. During 2015–16, the Library received an equity appropriation totalling $9.679 million.

The Library’s financial statements include budget variance commentary, which identifies material variances between the original budget and the
30 June 2016 results.

Operating Income

The total operating income of $66.054 million for 2015–16 was $0.473 million above budget and –$0.504 million less than the 2014–15 actuals. Figure 1.1 shows a comparison of income across items against budget for 2015–16 and actuals in 2014–15.

 Actual 30 June 2016 $66.054 million, Budget 2015-16 $65.581 million, Actual 30 June 2015 $65.558 million.

Figure 1.1: Operating Income, 2015–16 and 2014–15. Note: A logarithmic scale is used.

The major variations between financial years relate to increases in the sales of goods and services ($0.844 million), largely due to increases in revenue received from corporate sponsorship ($0.511 million) and the Library Bookshop ($0.204 million), which are related to the Celestial Empire exhibition held during 2015–16, and consultancies ($0.198 million), which are primarily related to the digitisation of collection material for other libraries. 

The decline in interest revenue (–$0.409 million) is largely as the result of a general
decline in deposit rates and a decline in the funds available for investment. There was a decrease in government revenue (–$1.628 million) with the majority of the reduction related to the additional 3 per cent savings target (–$1.485 million) introduced as part of the 2015–16 Mid-Year Economic and Fiscal Outlook savings. 

Operating Expenses

The total operating expenses of $75.097 million for 2015–16 were –$2.151 million below budget and –$0.546 million less than the 2014–15 actuals. Figure 1.2 shows a comparison of expenditure across items and against budget for 2015–16 and actuals in 2014–15.

 Actual 2015-16 $75.097 million, Budget 2015-16 $77.248 million, Actual 2014-15 $75.643 million.

Figure 1.2: Operating Expenses, 2015–16 and 2014–15. Note: A logarithmic scale is used.

There was a minor decrease in employee expenses (–$0.523 million) compared with 2014–15.

Supplier expenses were higher ($0.795 million) than 2014–15, with the major variations primarily relating to Celestial Empire, and included promotion of Library services ($0.508 million), contractors and consultants ($0.085 million) and cost of goods sold by the Library Bookshop ($0.154 million). Other increases across supplier expenses included increased expenditure on serials ($0.251 million), with the majority of the increase related to the purchase of online subscriptions ($0.174 million) and increased expenditure on software maintenance ($0.121 million). There were also decreases in supplier expenses including power and light (-$0.153 million) as a consequence of tariff reductions and energy efficiency initiatives, and purchase of non-asset furniture and equipment (–$0.076 million) reflecting reading room furniture purchases made in 2014–15.

The decrease in depreciation and amortisation expenses (–$0.983 million) primarily relates to the revaluation of the Library’s tangible collection, which was undertaken in June 2015. Following the revaluation, the value of the collection decreased (–$152.696 million) and consequently this reduced the depreciation expense for the 2015–16 financial year.

Equity

The Library’s total equity increased by $6.656 million to $1,680.711 million in 2015–16. The net increase was a result of a net revaluation increment ($6.020 million), following the revaluation of the Library’s collections ($2.183 million), land ($0.250 million) and buildings ($3.587 million); an equity injection for collection acquisitions ($9.679 million); and the net operating result (–$9.043 million) for 2015–16.

Total Assets

Figure 1.3 shows that the total value of the Library’s assets increased by $5.292 million to $1,697.076 million in 2015–16.

 Actual 30 June 2016 $1,697.076 million, Budget 2015-16 $1,835.278 million, Actual 30 June 2015 $1,691.784 million.

Figure 1.3: Total Assets, 2015–16 and 2014–15. Note: A logarithmic scale is used.

The increase in non-financial assets ($11.573 million) was largely the result of the revaluation of the Library’s tangible collections, land and buildings (a net increment of $6.020 million) and the net difference between current-year assets acquisitions, disposals and current-year depreciation expenses ($5.520 million). In addition, there were decreases in the value of inventories (–$0.109 million) and an increase in the value of prepaid supplier expenses ($0.142 million). The decrease in financial assets (–$6.281 million) relates primarily to a decrease in investments (–$5.884 million) and cash at bank (–$0.739 million), offset by increases against other financial assets ($0.241 million) and receivables ($0.101 million).

Total Liabilities

As Figure 1.4 shows, the Library’s total liabilities decreased by –$1.364 million from last financial year to $16.365 million.

 Actual 30 June 2016 $16.365 million, Budget 2015-16 $15.719 million, Actual 30 June 2015 $17.729 million.

Figure 1.4: Total Liabilities, 2015–16 and 2014–15

The decline in the value of liabilities is primarily due to a reduction in supplier payables (–$0.701 million) and other payables (–$1.281 million) of which the majority of the variation is due to a reduction in value of accrued salary expenses as at 30 June. These reductions were offset by an increase in the value of employee provisions ($0.552 million), largely due to a decline in the long-term government bond rate, which is used to calculate the present value of long service leave entitlements.

Cash Flow 

In 2015–16, there was a decrease in the Library’s cash balance, which decreased by $0.739 million to $4.230 million as at 30 June 2016. Figure 1.5 shows a comparison of cash flow items for 2015–16 and 2014–15.

 Actual 2015-16 -$0.739 million, Budget 2015-16 $0.011 million, Actual 2014-15 -$0.888 million.

Figure 1.5: Net Cash Flow, 2015–16 and 2014–15

The decrease in net cash from operating activities (–$3.640 million) reflects the previous comments under ‘Operating Income’ and ‘Operating Expenses’. The movement in net cash used by investing activities ($3.902 million) primarily reflects the net movement of funds from investments to cash at bank between years ($4.387 million) and a decrease in the purchase of property, plant, equipment and intangibles (–$0.486 million). There was a minor decrease in net cash from financing activities between financial years (–$0.113 million) as a result of a slight reduction in the Library’s equity injection provided by government to fund collection acquisitions.