NGV Annual Report 2003-04-Part 2 - National Gallery of Victoria

128 Report NGV Annual Report 2003/04Financial SummaryThe financial performance of the year under review reflects the fact that the NGV’s operations are still in transition.Whilst NGV Australia was fully operational throughout the year, NGV International only opened to the public in earlyDecember 2003 and the full year financial impact of its operations have not yet been felt. Despite the fact thatsteady patterns of revenue and expenditure have not yet been experienced, it is clear that the NGV faces someconsiderable financial challenges in the forthcoming years.The table right distinguishes between the NGV’s operating and fund-raising activities, a distinction not readily seenin the Statement of Financial Performance on page 132. This distinction is important as the NGV raises substantialfunds, largely from the private sector, which are not generally available for operating purposes but are committed tothe purchase of works of art or capital works. The 2003/04 reported surplus of $30 million is arrived at after takingaccount of some $39 million of such income.In 2003/04, the NGV generated an operating deficit, before depreciation and similar charges and before takingaccount of fundraising income, of $6.8 million. Some $2 million of this deficit can be attributed to the one-off costsof re-opening NGV International. Operating costs have doubled over the last five years, reflecting the 100% growthin the size of the NGV’s buildings and the greatly increased scale and complexity of its activities. The deficit for2003/04 was funded from reserves built up in previous years.The NGV’s balance sheet (page 133) is dominated by the value of the cultural assets ($1.8 billion). Also includedare cash and other financial assets of $31 million (2002/03—$47 million). The reduction on the previous yearreflects the expenditure of accumulated campaign funds on the completion of the St Kilda Road redevelopment.The remaining balance is largely attributable to endowed funds held for the purchase of works of art with only amodest amount of other funds now available to provide working capital for 2004/05.