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Notes to the financial statements

1. Statement of accounting policies for the year ended 30 June 2012

Reporting entity and statutory basis

Statistics New Zealand (referred to in full or as ‘the department’) is a government department as defined by section 2 of the Public Finance Act 1989. These financial statements, which are prepared pursuant to section 45 of the Public Finance Act 1989, encompass the activities of Statistics New Zealand for the year ended 30 June 2013.

For purposes of appropriation under the Public Finance Act 1989, the department’s outputs are grouped as follows:

Official Statistics – Multi-class output appropriation (MCOA)

  • Coordination of government statistical activities
  • Population, social, and labour force statistical information services
  • Economic and business statistical information services.

Multi-year appropriations (MYA)

  • 2011 Census of Population and Dwellings
  • 2013 Census of Population and Dwellings.

The primary objective of Statistics New Zealand is to provide services to the public rather than making a financial return. Accordingly, Statistics New Zealand has designated itself as a public benefit entity for the purposes of New Zealand equivalents to International Financial Reporting Standards (NZ IFRS).

The financial statements of Statistics New Zealand are for the year ended 30 June 2013. The financial statements were authorised for issue by the Government Statistician on 29 August 2013.

Basis of preparation

The financial statements of Statistics New Zealand have been prepared in accordance with the requirements of the Public Finance Act 1989, which includes the requirement to comply with New Zealand generally accepted accounting practices (NZ GAAP), and Treasury instructions.

These financial statements have been prepared in accordance with NZ GAAP, and comply with NZ IFRS as appropriate for public benefit entities.

The financial statements have been prepared on a historical cost basis.

The financial statements are presented in New Zealand dollars and all values are rounded to the nearest thousand dollars ($000). The functional currency of Statistics New Zealand is New Zealand dollars.

Changes in accounting policies

There have been no changes in accounting policies during the financial year.

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 Statistics New Zealand, 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 three main phases: Phase 1 Classification and Measurement, Phase 2 Impairment Methodology, and Phase 3 Hedge Accounting. Phase 1 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 assets (its business model) and the contractual cash flow characteristics of the financial assets. The financial liability requirements are the same as those of NZ IAS 39, except for when an entity elects to designate a financial liability at fair value through the surplus or deficit. The new standard is required to be adopted for the year ended 30 June 2016. However, as a new Accounting Standards Framework will apply before this date, there is no certainty when an equivalent standard to NZ IFRS 9 will be applied by public benefit entities.

The Minister of Commerce has approved a new Accounting Standards Framework (incorporating a Tier Strategy) developed by the External Reporting Board (XRB). Under this Accounting Standards Framework, Statistics New Zealand is classified as a Tier 1 reporting entity and it will be required to apply full Public Benefit Entity Accounting Standards (PAS). These standards are being developed by the XRB based on current International Public Sector Accounting Standards. The effective date for the new standards for public sector entities is expected to be for reporting periods beginning on or after 1 July 2014. This means the department expects to transition to the new standards in preparing its 30 June 2015 financial statements. As the PAS are still under development, the department is unable to assess the implications of the new Accounting Standards Framework at this time.  

Due to the change in the Accounting Standards Framework for public benefit entities, it is expected that all new NZ IFRS and amendments to existing NZ IFRS will not apply to public benefit entities. Therefore, the XRB has effectively frozen the financial reporting requirements for public benefit entities up until the new Accounting Standard Framework is effective. Accordingly, no disclosure has been made about new or amended NZ IFRS that exclude public benefit entities from their scope. 

Revenue

Revenue is measured at the fair value of consideration received or receivable.

Revenue Crown

Revenue earned from the supply of outputs to the Crown is recognised as revenue when earned.

Sale of publications

The sale of publications is recognised when the product is sold to the customer. The recorded revenue is the gross amount of the sale.

Other income

Revenue from contracted surveys is recognised to the extent that the service has been completed by Statistics New Zealand.

Rental income
Lease receipts under an operating sub-lease are recognised as income on a straight-line basis over the lease term.

Capital charge

The capital charge is recognised as an expense in the period to which the charge relates.

Leases

Operating leases
An operating lease is a lease that does not transfer substantially all the risks and rewards incidental to ownership of an asset. Lease payments under an operating lease are recognised as an expense on a straight-line basis over the lease term.

Cash and cash equivalents

Cash includes cash on hand and funds on deposit with banks and is measured at its face value.

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 if relevant.

Impairment of a receivable is established when there is objective evidence that the department 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. The carrying amount of the asset is reduced through the use of a provision for impairment account, and the amount of the loss is recognised in the surplus or deficit. Overdue receivables that are renegotiated are reclassified as current (that is, not past due).

Property, plant, and equipment

Property, plant, and equipment consist of computer equipment, leasehold improvements, furniture and fittings, and office equipment. All property, plant, and equipment is shown at cost, less accumulated depreciation and impairment losses.

Individual assets, or group of assets, are capitalised if their cost is greater than $1,000. The value of an individual asset that is less than $1,000 and is part of a group of similar assets is capitalised.

Additions
The cost of an item of property, plant, and equipment is recognised as an asset if, and only if, it is probable that future economic benefits or service potential associated with the item will flow to Statistics New Zealand and the cost of the item can be measured reliably. Work in progress is recognised at cost less impairment and is not depreciated. Property, plant and equipment is recognised at cost.
Disposals
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount of the asset. Gains and losses on disposals are included in the surplus or deficit.
Subsequent costs
Costs incurred subsequent to initial acquisition are capitalised only when it is probable that future economic benefits or service potential associated with the item will flow to the department and the cost of the item can be measured reliably.
Depreciation

Depreciation is provided on a straight-line basis on all property, plant, and equipment, at rates that will write off the cost of the assets to their estimated residual values over their useful lives. The useful lives and associated depreciation rates of major classes of assets have been estimated as follows:

Furniture and fittings   7 to 10 years
Office equipment   5 years
Computer equipment   3 to 5 years
Leasehold improvements   remaining term of the lease or the estimated remaining useful lives of the improvements whichever is the shorter

The residual value and useful life of an asset is reviewed, and adjusted if applicable, at each financial year end.

Intangible assets

Software acquisition and development
Acquired computer software licenses are capitalised on the basis of the costs incurred to acquire and bring to use the specific software. Costs associated with maintaining computer software are recognised as an expense when incurred. Costs that are directly associated with the development of software for internal use by Statistics New Zealand, are recognised as an intangible asset. Direct costs include the software development, employee and directly applicable operating costs.
Amortisation

The carrying value of an intangible asset with a finite life is amortised on a straight-line basis over its useful life. Amortisation begins when the asset is available for use and ceases at the date that the asset is derecognised. The amortisation charge for each period is recognised in the surplus or deficit. The useful lives and associated amortisation rates of major classes of intangible assets have been estimated as follows:

Software

3 to 7 years 

Capitalised developments:

 

Basic infrastructure systems

10 years

Capture and processing systems

5 to 10 years

Output systems 5 to 10 years
Dissemination and access systems 3 to 7 years
Office automation tools 5 to 7 years.
Impairment of non-financial assets

Intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. An intangible asset that is not yet available for use at the balance sheet date is tested for impairment annually.

Property, plant, and equipment, and intangible assets that have a finite useful life, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use.

Value in use is the depreciated replacement cost for an asset where the future economic benefits or service potential of the asset are not primarily dependent on the asset’s ability to generate net cash inflows and where the entity would, if deprived of the asset, replace its remaining future economic benefits or service potential. 

If an asset’s carrying amount exceeds its recoverable amount, the asset is impaired and the carrying amount is written down to the recoverable amount.

Creditors and other payables

Creditors and other payables are initially measured at fair value and subsequently measured at amortised cost using the effective interest method.

Employee entitlements

Short-term employee entitlements

Employee entitlements that Statistics New Zealand expects to be settled within 12 months of balance date are measured at nominal values based on accrued entitlements at current rates of pay.

These include salaries and wages accrued up to balance date, annual leave earned but not yet taken at balance date, retiring and long service leave entitlements expected to be settled within 12 months, and sick leave.

Statistics New Zealand recognises a liability for sick leave to the extent that absences in the coming year are expected to be greater than the sick leave entitlements earned in the coming year. The amount is calculated based on the unused sick leave entitlement that can be carried forward at balance date, to the extent that Statistics New Zealand anticipates it will be used by staff to cover those future absences.

Statistics New Zealand recognises a liability and an expense for bonuses where it is contractually obliged to pay them, or where there is a past practice that has created a constructive obligation.

Long-term employee entitlements

Employee entitlements that are due to be settled beyond 12 months, such as long service leave and retiring 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. Discount rates of 2.71 percent (year 1), 3.14 percent (year 2), and 5.50 percent (year 3 onwards), and a salary inflation factor of 3.50 percent 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 surplus or deficit as incurred.

Provisions

Statistics New Zealand recognises a provision for future expenditure of uncertain amount or timing when there is a present obligation (either legal or constructive) as a result of a past event, it is probable that an outflow of future economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not recognised for future operating losses.

Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a discount rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to the passage of time is recognised as a finance cost.

Taxpayers’ funds

Taxpayers’ funds is the Crown’s investment in Statistics New Zealand and is measured as the difference between total assets and total liabilities. Taxpayers’ funds is classified as general funds.

Commitments

Expenses yet to be incurred on non-cancellable contracts that have been entered into on or before balance date are disclosed as commitments to the extent that there are equally unperformed obligations.

Cancellable commitments that have penalty or exit costs explicit in the agreement on exercising that option to cancel are included in the statement of commitments at the value of that penalty or exit cost.

Commitments and contingencies are disclosed exclusive of GST.

Goods and services tax (GST)

All items in the financial statements, including appropriation statements, are stated exclusive of goods and service tax (GST), except for receivables and payables, which are stated on a GST inclusive basis. Where GST is not recoverable as input tax, then it is recognised as part of the related asset or expense. The net amount of GST recoverable from, or payable to, Inland Revenue is included as part of receivables or payables in the statement of financial position.

The net GST paid to, or received from Inland Revenue, including the GST relating to investing and financing activities, is classified as an operating cash flow in the statement of cash flows.

Income tax

Government departments are exempt from income tax as public authorities. Accordingly, no charge for income tax has been provided for.

Budget figures

The budget figures are those included in the Information Supporting the Estimates of Appropriations for the Government of New Zealand for the year ending 30 June 2013, which are consistent with the financial information in the Main Estimates. In addition, the financial statements also present the updated budget information from the Supplementary Estimates. The budget figures have been prepared in accordance with NZ GAAP, using accounting policies that are consistent with those adopted in preparing these financial statements.

Statement of cost accounting policies

Statistics New Zealand has determined the cost of outputs using the cost allocation system outlined below.

Direct costs are those costs directly attributed to an output. Indirect costs are those costs that cannot be identified in an economically feasible manner, with a specific output.

Statistics New Zealand has derived the costs of outputs shown in these financial statements using a cost driver to assign indirect costs. The cost drivers employed for assigning direct costs to outputs are based on direct charging and time recording.

The cost driver employed to allocate indirect costs to outputs is the proportion of Statistics New Zealand’s internal budget that is assigned to direct outputs. Indirect costs, excluding the costs of survey, compilation and statistical databases and development projects, accounted for 41 percent of total costs for the year ended 30 June 2013 (2012: 57 percent). The percentage fluctuates from year to year, depending on the amount of direct costs incurred in relation to the cyclical activities of the Census of Population and Dwellings.

There have been no changes in cost accounting policies since the date of the last audited financial statements.

Critical accounting estimates and assumptions

In preparing these financial statements Statistics New Zealand has made estimates and assumptions concerning the future. These estimates and assumptions may differ from the subsequent actual results. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. 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 discussed in Note 12, which provides an analysis of the exposure in relation to estimates and uncertainties surrounding retirement and long service leave liabilities.

Critical judgements in applying Statistics New Zealand’s accounting policies

Management has exercised the following critical judgements in applying Statistics New Zealand accounting policies for the period ended 30 June 2013.
Leases

Determining whether a lease agreement is a finance lease or an operating lease requires judgement as to whether the agreement transfers substantially all the risks and rewards of ownership to Statistics New Zealand. Judgement is required on various aspects that include, but are not limited to, the fair value of the leased asset, the economic life of the leased asset, whether or not to include renewal options in the lease term and determining an appropriate discount rate to calculate the present value of the minimum lease payments. Classification as a finance lease means the asset is recognised in the statement of financial position as property, plant and equipment, whereas with an operating lease no such asset is recognised.

Statistics New Zealand has exercised its judgement on rental leases, and has determined them to operating leases.

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2. Revenue other

2012 Actual 

2013 Actual

 $000

 $000

 3,831

Contract surveys

4,454

1,281

Sale of publications/customised outputs

1,177

 378

Other revenue from Government departments

449

1,339

Superannuation reimbursements

-

 16

Rental income from sub-lease

20

 575

Insurance revenue 

 1,739

 546

Other 

 450

7,966

Total 

 8,289

3. Gain on sale of assets

During the period the department disposed of computer hardware assets that resulted in a gain on disposal of $39,000 (2012: $22,000).

4. Personnel costs

2012 Actual 

2013 Actual

 $000

 $000

60,998

Salaries

97,898

1,852

Employer contributions to defined contribution plans

2,380

 614

Increase/(decrease) in employee entitlements

724

392

Other

858

 63,856

Total

101,860

5. Other operating expenses

2012 Actual 

2013 Actual

 $000

 $000

78

Audit fees for the financial statement audit

 78

-

Audit related fees for assurance and related services

 -

309

Overseas travel

337

2,237

Domestic travel (includes Australia)

5,336

637

Interviewer travel

886

679

Postage and freight 

 982

4,583

Operating lease and other rentals 

7,295

 3,848

Software license 

4,643

191

Advertising and publicity 

189

1,862

Consultancy 

 1,610

2,190

Contracted services 

 14,885

 222

Maintenance 

160

7,224

Other operating expenses 

9,108

 24,096

Total 

 45,509

6. Capital charge

Capital charge 2012/13: $3,997,080 (2012: $3,888,720).

The department 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 ended 30 June 2013 was 8 percent (2012: 8 percent).

7. Loss on write-off and disposal of non-current assets

During the period there was a loss on the write-off and disposal of furniture and fittings, computer hardware, and intangible assets of $148,000 (2012: $166,000).

8. Debtors and receivables

2012 Actual 

2013 Actual

 $000

 $000

970

Debtors

676

(5)

Less: provision for doubtful debts

(5)

965

Total debtors and other receivables

671

The carrying value of debtors and other receivables approximates their fair value. Movements in the provision for impairment are as follows:

2012 Actual 

2013Actual

 $000

 $000

5

Balance at 1 July

5

-

Additional provisions made during the year

-

5

Balance at 30 June

5

The provision for impairment has been calculated based on a review of specific overdue receivables and a collective assessment. The collective impairment provision is based on an analysis of past collection history and debt write-offs.

Statistics New Zealand holds no collateral as security or other credit enhancements over receivables that are either past due or impaired.

  2012

 2013

 

Gross

Impairment

Net 

Gross

Impairment

 Net

 

 $000

 $000

 $000

$000

$000

 $000

Not past due 

292

 -

292

589

-

589

Past due 1–30 days 

488

 (1)

487

19

(1)

18

Past due 31–60 days 

15

 (1)

14

7

(1)

 6

Past due 61–90 days 

169

 (2)

 167

60

(2)

58

Past due > 91 days 

6

 (1)

 5

1

(1)

-

Total

970

 (5)

 965

676

 (5)

671

9. Creditors and other payables

2012 Actual 

2013 Actual

 $000

 $000

858

Creditors

2,141

-

PAYE payable

-

4,777

Accrued expenses

5,144

 5,635

Total creditors and other payables 

7,285

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.

10. Repayment of surplus to the Crown

Under section 22 of the Public Finance Act 1989, no operating surplus can be retained by Statistics New Zealand.

The provision for the repayment of the surplus to the Crown of $907,000 (2012: $3,301,000) is comprised of the surplus for the year of $1,222,000 less $315,000 of the $1,739,130 insurance revenue relating to the Christchurch earthquakes which is to be retained. Statistics New Zealand had approval from the Crown to retain up to $5,900,000 of insurance revenue in the year ended 30 June 2013. The return of the operating surplus to the Crown is required to be paid by 31 October each year.

11. Provisions

 

Superannuation

Total

 

 $000

$000

2012
Opening balance 1 July 2011

196

196

Additional provisions recognised

-

-

Amounts used

(30)

(30)

Unused amounts reversed

-

-

Closing balance 30 June 2012

166

166

Analysed as:

Current  

 

-

 

-

Non-current 

166

 166

2013
Opening balance 1 July 2012

166

166

Additional provisions recognised 

 -

 -

Amounts used

 (42

 (42)

Unused amounts reversed

 -

 -

Closing balance 30 June 2013

 124

 124

Analysed as:

Current  

 

-

 

-

Non-current

 124

 124

The provision relates to Statistics New Zealand’s obligations in respect to employee superannuation entitlements.

12. Employee entitlements

2012 Actual 

2013 Actual

 $000

 $000

Current employee entitlements are represented by:

 

4,020

Annual leave

4,360

457

Sick leave 

 460

 1,236

Retirement and long-service leave 

 1,049

 5,713

Total current portion 

 5,869

     
  Non-current employee entitlements are represented by:   

 4,497

Retirement and long service leave 

5,065

 4,497

Total non-current portion 

 5,065

10,210

Total employee entitlements 

10,934

The present value of the retirement and long-service leave obligations depends on a number of factors that are determined on an actuarial basis using a number of assumptions. Two key assumptions used in calculating this liability include the discount rate and the salary inflation factor. Any changes in these assumptions will impact on the carrying amount of the liability.

The Department has used the actuarial models provided by the Treasury, including the appropriate discount rate and salary inflation factor. The discount rate is based on New Zealand Government bond data at 30 June 2013. The salary inflation factor has been determined after considering historical salary inflation patterns and after obtaining advice from an independent actuary.

If the discount rate were to differ by 1 percent from the department’s estimates, with all other factors held constant, the carrying amount of the liability would be an estimated $382,394 lower (1 percent increase) or $436,632 higher (1 percent decrease).

If the salary inflation factor were to differ by 1 percent from the department’s estimates, with all other factors held constant, the carrying amount of the liability would be an estimated $443,202 higher (1 percent increase) or $394,662 lower (1 percent decrease).

13. Deferred revenue

Deferred revenue is the portion of operating revenue received which relates to future years. It will be recognised as income in the year when the services are provided.

14. Property, plant, and equipment

 

Furniture and fittings

Office equipment

Computer hardware

Total

 

 $000

 $000

 $000

$000

Cost 
Balance at 1 July 2011

13,872

1,113

17,095

32,080

Additions

3,682

14

6,551

10,247

Disposals

(22)

(7)

(2,272)

(2,301)

Reclassification of asset classes 

-

-

-

-

Work in progress movements

 714

-

104

818

Balance at 30 June 2012

 18,246

 1,120

21,478

 40,844

Balance at 1 July 2012

18,246

 1,120

21,478

 40,844

Additions 

 405

79

4,634

5,118

Disposals 

 (2,858)

(233)

 (3,432)

(6,523)

Reclassification of asset classes 

 -

 -

 -

 -

Work in progress movements 

(606)

 -

(405)

(1,012)

Balance at 30 June 2013

15,187

966

22,274

38,427

Accumulated depreciation
Balance at 1 July 2011

8,074

921

11,342

20,337

Depreciation expense 

1,188

 55

4,159

 5,402

Eliminate on disposal 

(22)

(8)

 (2,106)

 (2,136)

Reclassification of asset classes 

-

 -

-

-

Balance at 30 June 2012

9,240

 968

13,395

23,603

Balance at 1 July 2012

 9,240

968

13,395

23,603

Depreciation expense 

1,585

 57

4,764

6,407

Eliminate on disposal  

(2,855)

(232)

(3,282)

(6,370)

Reclassification of asset classes 

 -

 -

 -

 -

Balance at 30 June 2013

7,970

 793

 14,877

23,640

Carrying amounts
At 1 July 2011

5,798

 192

5,753

11,743

At 30 June and 1 July 2012

9,006

152

8,083

17,241

At 30 June 2013

 7,217

173

7,397

14,787

Carrying amounts at year-end are stated at cost less accumulated depreciation and include work in progress relating to furniture and fittings $108,000 (2012: $714,000) and computer hardware $7,000 (2012: $412,000).

There are no restrictions over the title of Statistics New Zealand’s property, plant, and equipment. No items of property, plant, and equipment are pledged as security for liabilities.

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15. Intangible assets

 

Software

Internally generated assests

Total

 

 $000

 $000

 $000

Cost 
Balance at 1 July 2011

8,955

46,830

55,785

Additions

1,540

8,863

10,403

Disposals

(282)

(426)

(708)

Reclassification of asset classes 

-

-

-

Work in progress movements

 (1)

(2,093)

(2,094)

Balance at 30 June 2012

10,212

53,174

63,386

       
Balance at 1 July 2012

10,212

 53,174

63,386

Additions 

1,182

5,675

6,857

Disposals 

(582)

-

(582)

Reclassification of asset classes 

-

-

-

Work in progress movements 

 224

3,034

3,258

Balance at 30 June 2013

11,036

61,883

72,920

Accumulated amortisation and impairment losses
Balance at 1 July 2011

5,701

29,405

35,106

Amortisation expense

1,151

4,263

5,414

Eliminate on disposal 

(282)

(425)

 (707)

Reclassification of asset classes 

-

-

-

Impairment losses

-

-

 -

Balance at 30 June 2012

6,570

33,243

39,813

Balance at 1 July 2012

6,570

33,243

39,813

Amortisation expense

1,306

4,089

5,395

Eliminate on disposal

(582)

-

(582)

Reclassification of assets class

 -

-

-

Impairment losses

-

-

 -

Balance at 30 June 2013

7,294

37,332

44,626

Carrying amounts
At 1 July 2011

3,254

17,425

20,679

At 30 June and 1 July 2012

3,642

19,931

23,573

At 30 June 2013

3,742

24,551

28,294

Carrying amounts at year-end are stated at cost less accumulated amortisation and include work in progress relating to internally generated assets of $6,338,000 (2012: $3,080,000).

There are no restrictions over the title of the Statistics New Zealand’s intangible assets. No intangible assets are pledged as security for liabilities.

16. Taypayers' funds

2012 Actual 

2013 Actual

 $000

 $000

General funds

48,609

Balance at 1 July

49,184

3,876

Net surplus/(deficit)

1,222

-

Capital contribution from the Crown

 -

(3,301)

Provision for repayment of surplus to the Crown

(907)

 49,184

Total taxpayers’ funds 

49,499

17. Reconciliation of net surplus/(deficit) to net cash from operating activities

2012 Actual 

2013 Actual

 $000

 $000

3,876

Net operating (deficit)/surplus

1,222

Add/(less) non-cash items:

 

10,816

Depreciation and amortisation

11,802

205

Increase/(decrease) in non-current employee entitlements

568

(30)

Increase/(decrease) in non-current provisions

(42)

10,991

Total non-cash items 

12,328

  Add/(less) working capital movements:   

79

Decrease/(increase) in debtors and receivables 

 294

(89)

Decrease/(increase) in advances and prepayments 

(1,272)

1,456

Increase/(decrease) in creditors and other payables 

1,650

1,833

Increase/(decrease) in GST payable 

(220)

(13,706)

Increase/(decrease) in Provision – Creditor Crown 

1,754

409

Increase/(decrease) in employee entitlements 

 156

(43)

Increase/(decrease) in deferred revenue 

193

(10,061)

Net working capital movements 

2,555

  Add/(less) investing activity items:   

 -

(Gain)/loss on reduction of work in progress 

 -

144

(Gain)/loss on sale of fixed assets 

109

4,950

Net cash flows from operating activities 

16,214

18. Related-party transactions and key management personnel

Related-party transactions

All related-party transactions have been entered into on an arms’ length basis.

Statistics New Zealand is a wholly-owned entity of the Crown.

Significant transactions with government-related entities
Statistics New Zealand has been provided with funding from the Crown of $156.210 million (2012: $98.711 million) for specific purposes as set out in its founding legislation and the scope of the relevant government appropriations.
Collectively, but not individually, significant, transactions with government-related entities

In conducting its activities, Statistics New Zealand 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. As a government department, Statistics New Zealand is exempt from paying income tax.

Statistics New Zealand purchases goods and services from entities controlled, significantly influenced, or jointly controlled by the Crown. Purchases from these government-related entities for the year ended 30 June 2013 totalled $6.608 million (2012: $6.441 million). These purchases included the purchase of information and services from agencies such as the Accident Compensation Corporation, Meridian Energy, and New Zealand Post, and payments to the Government Superannuation Fund and the Treasury (capital charge).

Statistics New Zealand sells services to entities controlled, significantly influenced, or jointly controlled by the Crown. Sales to these government-related entities for the year ended 30 June 2013 totalled $6.069 million (2012: $6.542 million). These sales included the undertaking of surveys and the provision of customised information services, which were provided to agencies including the Ministry for Primary Industries, Ministry of Business, Innovation and Employment and Te Puni Kokiri – the Ministry of Māori Development.

Key management personnel compensation

2012 Actual 

2013 Actual

 $000

 $000

2,004

Salaries and other short-term employee benefits

1,976

-

Post-employment benefits

-

-

Other long-term benefits

-

-

Termination benefits

-

2,004

Total key management personnel compensation

1,976

Key management personnel are the Government Statistician and the eight members of the Senior Management Team which forms the Board. A new Senior Management position was established in May 2013. 

19. Events after the balance sheet date

There have been no significant events after the balance sheet date.

20. Financial instruments

Financial instrument categories

The carrying amounts of financial assets and financial liabilities in each of the NZ IAS 39 categories are as follows:

2012 Actual 

2013 Actual

 $000

 $000

Loans and receivables 

27,748

Cash and cash equivalents

26,483

2,437

Debtors and other receivables

3,415

30,185

Total loans and receivables

29,898

Financial liabilities measured at amortised cost

5,635

Creditors and other payables 

7,285

Financial instrument risks

Statistics New Zealand’s activities expose it to a variety of credit risk and liquidity risks. The department 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.

Credit risk

A credit risk is the risk that a third party will default on its obligation to the department, causing the department to incur a loss. In the normal course of its business, credit risk arises from debtors and deposits with banks.

The department 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. These entities have high credit ratings. For its other financial instruments, the department does not have significant concentrations of credit risk.

The department’s maximum credit exposure for each class of financial instrument is represented by the total carrying amount of cash and cash equivalents and net debtors and other receivables. There is no collateral held as security against these financial instruments, including those instruments that are overdue or impaired.

Liquidity risk

Liquidity risk is the risk that the department will encounter difficulty raising liquid funds to meet commitments as they fall due. In meeting its liquidity requirements, the department closely monitors its forecast cash requirements with expected cash drawdowns from the New Zealand Debt Management Office. The department maintains a target level of available cash to meet liquidity requirements. The table below analyses the department’s financial liabilities that will be settled based on the remaining period at the balance sheet date to the contractual maturity date. The amounts disclosed are undiscounted and based on the contractual cash flows, and are equal to the carrying amounts.

 

Less than 6 months

Between 6 months and 1 year

Between 1 and 5 years

 

 $000

 $000

 $000

2012

 

Creditors and other payables (note 9)

5,635

-

-

2013

Creditors and other payables (note 9)

7,285

 -

 -

21. Capital management

The department’s capital is its equity (or taxpayers’ funds), which comprise general funds and revaluation reserves. Equity is represented by net assets.

The department manages its revenues, expenses, assets, liabilities, and general financial dealings prudently. The department’s equity is largely managed as a by-product of managing income, expenses, assets, liabilities, and compliance with the Government Budget processes, Treasury Instructions, and the Public Finance Act 1989.

The objective of managing the department’s equity is to ensure that the department effectively achieves its goals and objectives for which it has been established, while remaining a going concern.

22. Explanations of major variances against budget

Explanations for major variances from the department’s budgeted figures in the Information Supporting the Estimates (Main Estimates) are detailed below.

Statement of comprehensive income

Expenditure

Total expenditure was $0.173 million higher than budgeted. Variances within personnel and other operating expenses are due to the assumptions made during the Main Estimates preparation, which assumed a different mix of internal and external resources than were actually used.

Statement of financial position

Working capital
Current assets and liabilities fluctuate due to the phasing of revenue and expenditure across the year, and the resultant timing of year end payments and receipts. Overall working capital is $3.463 million higher than budgeted, driven by a $7.781 million higher cash balance due to lower capital expenditure, partially offset by increases in creditor Crown of $2.737 million, a $1.613 million change from a budgeted GST receivable to a payable, an increase in creditors and other payables of $0.791 million, an increase of employee entitlements of $0.811 million and an increase of deferred revenue of $0.707 million from budgeted.
Intangible assets
Intangible assets are lower than budget by $4.743 million due to delays in the start of capital projects and the duration of projects being longer than was assumed in the Main Estimates.
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