Annual Report for the year ended 30 June 2001
Departmental operations (continued)
Notes to the financial statements
for the year ended 30 June 2001
Note 1: Budget composition
| Note | 30/6/2001 Budget Forecasts $000 | 30/6/2001 Supp. estimates changes $000 |
30/6/2001 Budget total $000 |
|
|---|---|---|---|---|
| Revenue | ||||
| Crown | 2 | 8,069 | 235 | 8,304 |
| Other | 3 | 30 | (30) | - |
| Interest | 5 | 30 | 28 | 58 |
| Total revenue | 8,129 | 233 | 8,362 | |
| Expenditure | ||||
| Personnel costs | 6 | 4,371 | (150) | 4,221 |
| Operating costs | 7 | 3,091 | 455 | 3,546 |
| Depreciation | 481 | (100) | 381 | |
| Capital charge | 8 | 156 | - | 156 |
| Total expenses | 8,099 | 205 | 8,304 | |
| Net operating surplus | 30 | 28 | 58 |
Note 2: Revenue - Crown
This is revenue earned for the supply of outputs to the Crown.
Note 3: Other revenue
| 30/6/2000 Actual $000 | 30/6/2001 Actual $000 |
30/6/2001 Main estimates $000 |
30/6/2001 Supp. estimates $000 |
|
|---|---|---|---|---|
| Defence Quarterly magazine |
19 | 1 | 30 | - |
| Net gain on sale of assets (Note 4) | 9 | 8 | - | - |
| Other | - | 2 | - | - |
| Total other revenue | 28 | 11 | 30 | - |
Note 4: Gain on sale of fixed assets
| 30/6/2000 Actual $000 | 30/6/2001 Actual $000 |
|
|---|---|---|
| Motor vehicles |
4 | (7) |
| Computer equipment | 5 | 15 |
| Net gain on sale of assets | 9 | 8 |
Note 5: Interest revenue
The Ministry invests surplus cash with the New Zealand Debt Management Office (NZDMO) and earns interest at variable rates.
Note 6: Personnel costs
| 30/6/2000 Actual $000 | 30/6/2001 Actual $000 |
30/6/2001 Main estimates $000 |
30/6/2001 Supp. estimates $000 |
|
|---|---|---|---|---|
| Salaries and wages |
4,144 | 3,842 | 4,368 | 4,218 |
| Retirement and resigning leave |
8 | 1 | 3 | 3 |
| Total personnel costs | 4,152 | 3,843 | 4,371 | 4,221 |
Note 7: Operating costs
| 30/6/2000 Actual $000 | 30/6/2001 Actual $000 |
30/6/2001 Main estimates $000 |
30/6/2001 Supp. estimates $000 |
|
|---|---|---|---|---|
| Consultancy | 19 | 12 | 15 | 15 |
| Professional services | 56 | 190 | 200 | 200 |
| Audit fees to auditors for audit of the financial statements | 70 | 70 | 70 | 70 |
| Share of New Zealand Defence Force costs for maintaining services | 542 | 515 | 515 | 515 |
| Grants and contributions |
167 | 208 | 152 | 252 |
| Inventory items |
11 | 335 | 280 | 280 |
| General maintenance and servicing |
171 | 230 | 112 | 132 |
| Travel and related costs |
368 | 267 | 300 | 300 |
| Courses, conferences and exhibitions |
50 | 115 | 58 | 120 |
| Rental of premises |
698 | 675 | 760 | 765 |
| Preliminary projects costs |
2,371 | 362 | 246 | 481 |
| Other operating costs | 716 | 495 | 383 | 416 |
| Total operating costs | 5,239 | 3,474 | 3,091 | 3,546 |
Note 8: Capital charge
The Ministry pays a capital charge to the Crown on its average taxpayers' funds as at 30 June and 31 December each year. The capital charge rate for the year ended 30 June 2001 was 10 percent (2000 = 10 percent).
Note 9: Short-term deposits
As at balance date the following term deposits had been placed with the New Zealand Debt Management Office (NZDMO):
| Counterparty | Interest Rate | Term | 30/6/2000 Actual $000 | 30/6/2001 Actual $000 |
|---|---|---|---|---|
| NZDMO | 4.938% | 7 Days | - | 2,000 |
| NZDMO | 5.688% | 7 Days | 1,300 | - |
| Total short-term deposits | 1,300 | 2,000 |
Note 10: Debtors and receivables
| 30/6/2000 Actual $000 | 30/6/2001 Actual $000 |
|
|---|---|---|
| Trade debtors | 25 | 54 |
| Total debtors and receivables | 25 | 54 |
Note 11: Fixed assets
| 30/6/2000 Actual $000 | 30/6/2001 Actual $000 |
|
|---|---|---|
| Leasehold improvements |
||
| At cost | 324 | 396 |
| Accumulated depreciation | (68) | (177) |
| Leasehold improvements - net book value | 256 | 219 |
| Office and computer equipment |
||
| At cost |
1,415 | 753 |
| Accumulated depreciation |
(1,134) | (621) |
| Office and computer equipment - net book value | 281 | 132 |
| Office furniture |
||
| At cost |
1,034 | 262 |
| Accumulated depreciation |
(1,004) | (262) |
| Office furniture - net book value | 30 | 0 |
| Motor vehicles |
||
| At cost |
83 | 28 |
| Accumulated depreciation |
(18) | (12) |
| Motor vehicles - net book value | 65 | 16 |
| Other assets |
||
| At cost |
539 | 732 |
| Accumulated depreciation |
(302) | (439) |
| Other assets - net book value | 237 | 293 |
| Total fixed assets |
||
| At cost |
3,395 | 2,171 |
| Accumulated depreciation |
(2,526) | (1,511) |
| Total carrying amount of fixed assets | 869 | 660 |
Note 12: Creditors and payables
| 30/6/2000 Actual $000 | 30/6/2001 Actual $000 |
|
|---|---|---|
| Trade creditors |
154 | 341 |
| Accrued expenses |
245 | 166 |
| GST payable |
14 | 75 |
| Total creditors and payables | 413 | 582 |
Note 13: Provision for employee entitlements
| 30/6/2000 Actual $000 | 30/6/2001 Actual $000 |
|
|---|---|---|
| Current liabilities |
||
| Annual leave |
207 | 209 |
| Total current portion |
207 | 209 |
| Non current liabilities |
||
| Long service, retirement and resigning leave |
154 | 136 |
| Total non-current portion |
154 | 136 |
| Total provision for employee entitlements | 361 | 345 |
Note 14: Contingent assets
The Ministry does not have any contingent assets as at 30 June 2001 (30 June 2000 = nil).
Contingent liabilities are separately disclosed in the Statement of Contingent Liabilities.
Note 15: Financial instruments
The Ministry is party to financial instrument arrangements as part of its everyday operations. These include instruments such as bank balances, investments, accounts receivable, and accounts payable.
Credit Risk
In the normal course of its business, the Ministry incurs credit risk from trade debtors, and transactions with financial institutions and the New Zealand Debt Management Office (NZDMO).
The Ministry does not require any collateral or security to support financial instruments with financial institutions that the Ministry deals with, or with the NZDMO, as these entities have high credit ratings. For its other financial instruments, the Ministry does not have significant concentrations of credit risk.
Fair Value
The fair value of all financial instruments is equivalent to the carrying amount disclosed in the Statement of Financial Position.
Currency Risk and Interest Rate Risk
Currency risk is the risk that debtors and creditors due in foreign currency will fluctuate because of foreign exchange rates. The Ministry uses forward contracts to manage foreign exchange exposures.
The Ministry has no significant exposure to interest rate risk on its financial instruments.
All interest earned on short-term deposits with the NZDMO are returned to the Crown as part of the surplus repayable to the Crown.
Note 16: Related party information
The Ministry is a wholly owned entity of the Crown. The Government significantly influences the roles of the Ministry as well as being its major source of revenue.
The Ministry enters into transactions with other Government Departments, Crown agencies and state-owned enterprises. These transactions are not considered to be related party transactions.
Note 17: Major budget variations
Statement of Financial Performance
- Revenue Crown was increased in Supplementary Estimates to fund preliminary project costs.
- Personnel costs were reduced because of lower staff levels throughout the reporting period.
- Preliminary project costs on the light operational vehicle project, which must now be expensed and not capitalised, were underspent by $119,000 due to the timing of commitments.
Statement of Financial Position (and Cash Flows)
- Net cash held was increased by the higher net operating surplus, reduced spending on the purchase of fixed assets and a higher level of trade creditors unpaid at balance date.
- Fixed assets were reclassified at 1 July 2000 pending the introduction of the new financial reporting standard FRS-3 on Property, Plant and Equipment. The minimum level for fixed assets was increased from $2,000 to $5,000. The estimated useful life of leasehold improvements was reduced to three years.
