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Financial statements

This section reports on the financial performance of Statistics NZ for the year ended 30 June 2015.

Statement of comprehensive revenue and expense

For the year ended 30 June 2015

2014      2015  2015  2016 
Actual      Actual  Unaudited budget  Unaudited forecast 
$000    Note   $000 $000  $000 
Revenue           
117,396   Revenue Crown   104,551  108,798  114,806 
7,003   Revenue other  2 8,530  8,013  8,013 
124,399   Total revenue   113,081  116,811  122,819 
Expenses           
78,306   Personnel costs  3 70,584  76,263  79,639 
25,542   Other operating expenses  4 25,266  23,687  26,263 
12,446   Depreciation and amortisation expense  12–13 12,226  12,628  12,500 
3,835   Capital charge 4,362  4,233  4,417 
591   Loss on disposal of non-current assets 14  83 
120,720   Total expenses   112,521  116,811  122,819 
3,679   Net surplus / (deficit)   560 
3,679   Total comprehensive revenue and expenses   560  - 

Explanation of significant variances against the original budget 2014/15 are detailed in Note 20.

The accompanying accounting policies and notes form part of these financial statements. 

Statement of financial position

As at 30 June 2015 

2014      2015  2015  2016 
Actual      Actual  Unaudited budget  Unaudited forecast 
$000    Note   $000 $000  $000 
   Assets        
   Current assets        
32,088   Cash and cash equivalents   20,541  32,482  32,474 
 Debtor Crown   15,734 
405   Debtors and other receivables  6 531  983  440 
2,855   Advances and prepayments   2,307  1,472  3,000 
35,348   Total current assets   39,113  34,937  35,914 
           
   Non-current assets        
11,160   Property, plant, and equipment  12 7,900  14,698  12,179 
30,744   Intangible assets 13  31,141  32,615  38,724 
41,904   Total non-current assets   39,041  47,313  50,903 
77,252   Total assets   78,154  82,250  86,817 
           
   Liabilities        
   Current liabilities        
748   Creditor Crown  
4,761   Creditors and other payables  7 4,148  8,380  4,700 
3,679   Repayment of surplus to the Crown  8 560 
1,381   Provisions  9 307 
5,777   Employee entitlements 10  5,910  4,477  4,400 
1,295   Goods and services tax payable   651  (837)  1,500 
534   Deferred revenue 11  427  10 
18,175   Total current liabilities   12,003  12,030  10,600 
           
   Non-current liabilities        
343   Provisions  9
5,288   Employee entitlements 10  5,765  5,733  6,400 
5,631   Total non-current liabilities   5,765  5,733  6,400 
23,806   Total liabilities   17,768  17,763  17,000 
53,446   Net assets   60,386  64,487  69,817 
           
   Equity        
53,446   Taxpayers’ funds   60,386  64,487  69,817 
53,446   Total equity   60,386  64,487  69,817 

 Explanation of significant variances against the original budget 2014/15 are detailed in Note 20.

The accompanying accounting policies and notes form part of these financial statements.

Statement of changes in equity

For the year ended 30 June 2015  

2014    2015  2015  2016 
Actual    Actual  Unaudited budget  Unaudited forecast 
$000     $000 $000  $000 
49,499   Balance at 1 July  53,446  53,446  64,487 
3,679   Total comprehensive revenue and expense 560 
(3,679)   Repayment of surplus to the Crown (560) 
5,778   Capital injections 6,940  11,041  5,330 
(1,831)   Capital withdrawals
53,446   Balance at 30 June 60,386  64,487  69,817 

Explanation of significant variances against the original budget 2014/15 are detailed in Note 20.

The accompanying accounting policies and notes form part of these financial statements. 

Statement of cash flows

For the year ended 30 June 2015

2014      2015  2015  2016 
Actual      Actual  Unaudited budget  Unaudited forecast 
$000    Note   $000 $000  $000 
  Cash flows from operating activities        
115,407   Receipts from the Crown   88,069  108,798  114,806 
7,086   Receipts from other revenue   8,296  8,013  8,013 
(104,753)   Payments to suppliers and employees   (95,255)  (99,950)  (105,902) 
519   Goods and services tax (net)   (644) 
(3,835)   Payments for capital charge   (4,362)  (4,233)  (4,417) 
14,424   Net cash flow from operating activities  15 (3,896)  12,628  12,500 
           
   Cash flows from investing activities        
23   Receipts from sale of property, plant, and equipment   22 
(2,858)   Purchase of property, plant, and equipment   (2,784)  (6,000)  (8,000)  
(9,025)   Purchase of intangible assets   (8,150)  (11,000)  (9,000)  
(11,860)   Net cash flow from investing activities   (10,912)  (17,000)  (17,000) 
           
   Cash flows from financing activities        
3,947   Capital contribution   6,940  11,041  5,330 
(907)   Payment of operating surplus to the Crown   (3,679)  (3,679) 
3,040   Net cash flow from financing activities   3,261  11,041  1,651 
           
5,604   Net increase/(decrease) in cash and cash equivalents   (11,547)  6,669  (2,849) 
26,484   Cash and cash equivalents as at 1 July   32,088  25,813  35,323 
32,088   Cash and cash equivalents as at 30 June   20,541  32,482  32,474 

The accompanying accounting policies and notes form part of these financial statements.

Statement of commitments

As at 30 June 2015

Non-cancellable operating lease commitments

Statistics NZ leases property, plant, and equipment in the normal course of its business. The majority of these leases are for premises, which have a non-cancellable leasing period ranging from one to 12 years.

Statistics NZ will move into new premises in Christchurch in the 2015/16 financial year together with a number of other agencies. Statistics NZ will be the head tenant in a 12-year lease, and this is reflected in the significant increase in lease commitments between 2014 and 2015.

Statistics NZ’s non-cancellable operating leases have varying terms, escalation clauses, and renewal rights. There are no restrictions placed on the department by any of its leasing arrangements.

Statistics NZ has entered into non-cancellable contracts for computer maintenance, advertising, printing, consulting services, and other contracts for service. 

2014    2015 
Actual    Actual 
$000     $000
   Non-cancellable operating lease commitments  
5,559   Not later than one year 6,588 
8,806   Later than one year and not later than five years 15,576 
 Later than five years 20,958 
14,365   Total non-cancellable operating lease commitments 43,122 

The accompanying accounting policies and notes form part of these financial statements.

Statement of contingent liabilities and contingent assets

As at 30 June 2015

Contingent liabilities

 

2014    2015 
Actual    Actual 
$000     $000
   Contingent liabilities
129   Employment-related matters  20
129   Total contingent liabilities 20 

Contingent assets

Statistics NZ had no contingent assets as at 30 June 2015 (2014: $1,900,000).

The accompanying accounting policies and notes form part of these financial statements.

Notes to the financial statements

1. Statement of accounting policies for the year ended 30 June 2015

Reporting entity and statutory basis

Statistics New Zealand (abbreviated to Statistics NZ or referred to as ‘the department’) is New Zealand’s national statistical office, and operates under the authority of the Statistics Act 1975. Statistics NZ is a government department as defined by section 2 of the Public Finance Act 1989.

The department’s primary objective is give New Zealand the statistical information it needs to grow and prosper. This statistical information includes economic, environmental, fiscal, population, and social statistics.

For the purposes of these financial statements, Statistics NZ has designated itself as a public benefit entity (PBE). PBEs are reporting entities whose primary objective is to provide goods or services for community or social benefit and where any equity has been provided with a view to supporting that primary objective rather than for a financial return to equity holders.

The financial statements, which are prepared pursuant to section 45 of the Public Finance Act 1989, encompass the activities of Statistics NZ for the year ended 30 June 2015 and were authorised for issue by the Government Statistician and Chief Executive on 30 September 2015.

Basis of preparation

These financial statements have been prepared in accordance with the requirements of the Public Finance Act 1989, which include the requirement to comply with New Zealand Generally Accepted Accounting Practice (NZ GAAP) and Treasury Instructions.

These financial statements, including the comparatives, have been prepared for the first time in accordance with Public Sector PBE Accounting Standards (PBE Standards) – Tier 1. There are no material adjustments arising on transition to the new PBE accounting standards.

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) unless otherwise stated.

Standards issued and not early adopted

In May 2013, the External Reporting Board issued a new suite of PBE accounting standards for application by public sector entities for reporting periods beginning on or after 1 July 2014. The department has applied these standards in preparing the 30 June 2015 financial statements.

In October 2014, the PBE suite of accounting standards was updated to incorporate requirements and guidance for the not-for-profit sector. These updated standards apply to PBEs with reporting periods beginning on or after 1 April 2015. The department will apply these updated standards in preparing its 30 June 2016 financial statements. The department expects there will be minimal or no change in applying these updated accounting standards.

Summary of significant accounting policies

Revenue

The specific accounting policies for significant revenue items are explained below:

Revenue Crown

The fair value of Revenue from the Crown is measured based on the department’s funding entitlement for the accounting period. The funding entitlement is established by Parliament when it passes the Appropriation Acts for the financial year. The amount of revenue recognised takes into account any amendments to appropriations approved in the Appropriation (Supplementary Estimates) Act for the year and certain other unconditional funding adjustments formally approved prior to balance date.

There are no conditions attached to the funding from the Crown. However, the department can incur expenses only within the scope and limits of its appropriations.

Sale of publications/customised outputs

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

Contract surveys

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

Other income

Other sources of income are recognised when earned and are reported in the financial periods to which they relate.

Capital charge

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

Leases

Finance leases

Leases in which Statistics NZ assumes substantially all the risks and rewards of ownership are classified as finance leases. The assets and liabilities are recognised at amounts equal to the fair value of the leased asset or, if lower, the present value of the minimum lease payments, each determined at the inception of the lease. Assets acquired by way of a finance lease are included in property, plant, and equipment, and depreciated over their useful lives. If there is no reasonable certainty that the department will obtain ownership by the end of the lease term, the asset is fully depreciated over the shorter of the lease term or its useful life.

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 and cash equivalents include cash on hand and funds on deposit with banks with a maturity period of 90 days or less and are measured at its carrying value.

The department is only permitted to expend its cash and cash equivalents within the scope and limits of its appropriations.

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 receivable 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 doubtful debts 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 is recognised at cost directly attributable to bringing the assets on the location and condition necessary for it to operate on intended manner.

Property, plant, and equipment consists 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 $1,500. The value of an individual asset that is less than $1,500 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 NZ and the cost of the item can be measured reliably. Work in progress is recognised at cost less impairment and is not depreciated.

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.

The costs of day-to-day servicing of property, plant, and equipment are recognised in the surplus or deficit as they are incurred.

Derecognition

An item of property, plant, and equipment is derecognised upon sale, retirement, or disposal. Realised gains and losses arising from the derecognition of property, plant, and equipment are recognised in the Statement of comprehensive revenue and expense in the period in which the transaction occurs. The gain or loss is calculated as the difference between the carrying amount of the asset and the net disposal proceeds received (if any).

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. In determining an asset’s useful life, consideration is given to its expected usage, its expected wear and tear, technical obsolescence, and legal or similar limits on its use.

The useful lives and associated depreciation rates of major classes of assets have been estimated as follows:

Furniture and office equipment – 5 to 7 years
Computer equipment – 3 to 5 years
Leasehold improvements – remaining term of the lease or the estimated remaining useful lives of the improvements, but not to exceed 12 years 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 NZ, 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 – acquired and developed – 3 to 8 years

Impairment of non-financial assets

Property, plant, and equipment, and intangible assets are tested 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 service amount. The recoverable service amount is the higher of an asset’s fair value less costs to sell and value in use.

Value in use is determined by the department as being the depreciated replacement cost for an asset. The non-financial assets of the department are designated as non-cash generating assets as they are not primarily dependent on the asset’s ability to generate net cash inflows.

If an asset’s carrying amount exceeds its recoverable service amount, the asset is impaired and the carrying amount is written down to the recoverable service amount. The total impairment loss is recognised in the surplus or deficit.

Creditors and other payables

Short-term creditors and other payables are their face value.

Employee entitlements

Short-term employee entitlements

Employee entitlements that Statistics NZ 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 NZ 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 NZ anticipates it will be used by staff to cover those future absences.

Statistics NZ 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 using the three risk-free discount rates and a salary inflation factor as supplied by the New Zealand Treasury. The risk-free discount rates and the salary inflation factor are detailed in Note 10.
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 NZ 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.

Onerous contracts

A provision for onerous contracts is recognised when the expected benefits or service potential to be derived from a contract are lower than the unavoidable cost of meeting the obligations under the contract.

The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract.

Equity

Equity is the Crown’s investment in Statistics NZ and is measured as the difference between total assets and total liabilities.

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.

Goods and services tax (GST)

All items in the financial statements, including appropriation statements, are stated exclusive of 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.

Commitments and contingencies are disclosed exclusive of GST.

Income tax

Statistics NZ is a government department and consequently is exempt from income tax. Accordingly, no provision has been made for income tax.

Budget and forecast figures

Basis of the budget and forecast figures

The 2015 budget figures are for the year ended 30 June 2015 and were published in the 2013/14 annual report. They are consistent with the department’s best estimate financial forecast information submitted to Treasury for the Budget Economic and Fiscal Update (BEFU) for the year ending 2014/15.

The 2016 forecast figures are for the year ending 30 June 2016, which are consistent with the best estimate financial forecast information submitted to Treasury for the BEFU for the year ending 2015/16.

The forecast financial statements have been prepared as required by the Public Finance Act to communicate forecast financial information for accountability purposes.

The budget and forecast figures are unaudited and have been prepared using the accounting policies adopted in preparing these financial statements.

The 30 June 2016 forecast figures have been prepared in accordance with PBE FRS 42 Prospective Financial Statements and comply with PBE FRS 42.

The forecast financial statements were approved for issue by the Government Statistician on 13 April 2015.

The Government Statistician is responsible for the forecast financial statements, including the appropriateness of the assumptions underlying them and all other required disclosures.

While the department regularly updates its forecasts, updated forecast financial statements for the year ending 30 June 2016 will not be published.

Significant assumptions used in preparing the forecast financials

In preparing the forecast figures, estimates and assumptions have been made concerning the future based on the best information available to Statistics NZ. These estimates and assumptions may differ from the subsequent actual results. The main assumptions are as follows:

  • The forecasts have been compiled on the basis of existing government policies and Ministerial expectations. The 2015/16 actual financial statements may include changes to the baseline budget through new initiatives or technical adjustments. Any such changes will affect Revenue from the Crown and Output Expenditure.
  • Forecast sales to customers (‘Revenue other’ in the Statement of comprehensive revenue and expense) is based on the best available estimates but the actual financial result for 2015/16 is subject to demand fluctuations.
  • The forecast personnel assumptions are based on the current salaries costs adjusted for any anticipated remuneration increases for the forecast year.
  • Forecast expenditure is based on the assumption that Statistics NZ will continue to realise efficiency and effectiveness savings in 2015/16. The department is focused on improved oversight of expenditure through enhanced planning, budgeting, and prioritisation processes.
Statement of cost accounting policies

Statistics NZ 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.

Direct costs are charged directly to outputs. Indirect costs are charged to outputs based on cost drivers and related activity. Personnel costs are either charged on the basis of actual time incurred using a time recording system or assigned with other indirect costs to outputs based on the proportion of direct expenditure.

There have been material changes to the costs allocation methodology since the date of the last audited financial statements.

Critical accounting estimates and assumptions

In preparing these financial statements Statistics NZ 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 10, 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 NZ’s accounting policies

Management has exercised the following critical judgements in applying Statistics NZ’s accounting policies for the period ended 30 June 2015:

Leases classification

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 to the department. 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 NZ has exercised its judgment on rental leases, and has determined them to be operating leases.

2. Revenue other

 

2014    2015 
Actual    Actual 
$000     $000
3,739   Sale of publications/customised outputs 3,911
1,862   Contract surveys 1,699 
500   Insurance revenue 2,250 
 Training 25 
23   Rental income from sub-lease 29 
879   Other 616 
7,003   Total revenue other 8,530 

3. Personnel costs

 

2014    2015 
Actual    Actual 
$000     $000
72,565   Salaries and wages 67,335 
2,510   Employer contributions to defined contribution plans 2,216 
131   Increase/(decrease) in employee entitlements 610 
3,100   Other 423 
78,306   Total personnel costs 70,584 

4. Other operating expenses

 

2014    2015 
Actual    Actual 
$000     $000
6,271   Contracted and professional services 7,111 
5,743   Operating lease and other rentals 5,130 
4,666   Software licenses 4,925 
1,391   Domestic and Australia travel 1,585 
870   Consultancy 1,051 
780   Telecommunications 1,031 
740   Training and development 850 
859   Interviewer travel 772 
844   Printing and photocopying 734 
466   Postage and freight 487 
223   Advertising and publicity 277 
195   Overseas travel 201 
126   Maintenance 144 
82   Fees to Audit NZ for audit of the financial statements 84 
2,286   Other operating expenses 884 
25,542   Total other operating expenses 25,266 

5. Capital charge

Capital charge for 2014/15 was $4,361,680 (2014: $3,835,360).

The department pays a capital charge to the Crown based on equity as at 30 June and 31 December each year. The capital charge rate for the year ended 30 June 2015 was 8 percent (2014: 8 percent).

6. Debtors and receivables

 

2014    2015 
Actual    Actual 
$000     $000
410   Debtors and other receivables (exchange transactions) 536 
(5)   Less: Provision for doubtful debts (5) 
405   Net debtors and other receivables 531 

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

2014    2015 
Actual    Actual 
$000     $000
 Balance at 1 July
 Additional provisions made during the year
 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 NZ holds no collateral as security or other credit enhancements over receivables that are either past due or impaired.

  2014  2015 
  Gross  Impairment  Net  Gross  Impairment  Net 
  $000  $000  $000  $000  $000  $000 
 Not past due 389  389  243   243
 Past due 1–30 days (1)  268  (1)  267 
 Past due 31–60 days (1)  22  (2)  20 
 Past due 61–90 days (1)  (2) 
 Past due > 90 days (2) 
 Total 410  (5)  405  536  (5)  531 

7. Creditors and other payables

 

2014    2015 
Actual    Actual 
$000     $000
1,130   Creditors (exchange transactions) 923 
3,631   Accrued expenses (exchange transactions) 3,225 
4,761   Total creditors and other payables 4,148 

Creditors and other payables are non-interest bearing and are normally settled on 30-day terms. The carrying value of creditors and other payables approximates their fair value.

8. Repayment of surplus to the Crown

Under the Public Finance Act, no operating surplus can be retained by Statistics NZ.

The provision for the repayment of the surplus to the Crown of $560,000 (2014: $3,679,000) comprises the surplus for the year. The return of the operating surplus to the Crown is required to be paid by 31 October each year.

9. Provisions

 

  Superannuation Restructuring  Onerous contract Total 
 $000  $000 $000  $000 
 2014        
 Opening balance at 1 July 2013 124  124 
 Additional provisions recognised 1,381  307  1,688 
 Amounts used (88)  (88) 
 Unused amounts reversed
 Closing balance at 30 June 2014 36  1,381  307  1,724 
 Analysed as:        
 Current 1,381  1,381 
 Non-current 36  307  343 
         
 2015        
 Opening balance at 1 July 2014 36  1,381  307  1,724 
 Additional provisions recognised
 Amounts used (36)  (1,333)  (1,369) 
 Unused amounts reversed (48)  (48) 
 Closing balance at 30 June 2015 307  307 
 Analysed as:        
 Current 307  307 
 Non-current  -

The provision relates to Statistics NZ’s obligations in respect to employee superannuation entitlements, restructuring costs relating from an organisational change, and an onerous contract arising from the decision to move the Christchurch office from Dollan House to the Christchurch Integrated Government Accommodation (CIGA) in December 2015.

10. Employee entitlements

 

2014    2015 
Actual    Actual 
$000     $000
   Current employee entitlements  
3,921   Annual leave 4,239 
617   Sick leave 410 
1,239   Retirement and long-service leave 1,261 
5,777   Total current portion 5,910 
     
   Non-current employee entitlements  
5,288   Retirement and long-service leave 5,765 
5,288   Total non-current portion 5,765 
     
11,065   Total employee entitlements 11,675 

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 risk-free discount rates 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 applicable risk-free discount rates and salary inflation factor. Risk-free discount rates of 2.93 percent (year 1), 2.81 percent (year 2), and 4.39 percent (year 3 onwards), and a salary inflation factor of 3.00 percent were used. The risk-free discount rate used for year 3 onwards is based on the average of 20 forward rates (from year 3 to 22 inclusive) taken from the published table of discount rates as at 30 June 2015. The salary inflation factor is based on using a 2 percent medium-term inflation assumption plus 1 percent for long-term labour productivity growth for the public sector.

If the risk-free discount rates 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 $423,694 lower (1 percent increase) or $485,714 higher (1 percent decrease).

If the salary inflation factor was 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 $491,792 higher (1 percent increase) or $436,573 lower (1 percent decrease).

11. Deferred revenue

Deferred revenue of $427,000 (2014: $534,000) is the portion of operating revenue received that relates to the ensuing financial year. It will be recognised as income when the services are provided or performed.

12. Property, plant, and equipment

Carrying amounts at year-end are stated at cost less accumulated depreciation and include work in progress relating to furniture and fittings of $1,953,000 (2014: Nil) and computer hardware of $10,000 (2014: $90,000).

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

  Furniture and fittings Office equipment  Computer hardware Total 
 $000  $000 $000  $000 
Cost        
 Balance at 1 July 2013 15,187  966  22,274  38,427 
 Additions 568  79  2,236  2,883 
 Disposals (33)  (4,973)  (5,006) 
 Work in progress movement (108)  83  (25) 
 Balance at 30 June 2014 15,647  1,012  19,620  36,279 
         
 Balance at 1 July 2014 15,647  1,012  19,620  36,279 
 Additions 14  890  910 
 Disposals (1,194)  (1,194) 
 Work in progress movement 1,953  (80)  1,873 
 Balance at 30 June 2015 17,606  1,026  19,236  37,868 
         
 Accumulated depreciation and impairment losses        
 Balance at 1 July 2013 7,970  793  14,877  23,640 
 Depreciation expense 2,092  85  4,280  6,457 
 Eliminate on disposal (33)  (4,945)  (4,978) 
 Balance at 30 June 2014 10,062  845  14,212  25,119 
         
 Balance at 1 July 2014 10,062  845  14,212  25,119 
 Depreciation expense 2,392  88  3,553  6,033 
 Eliminate on disposal (1,184)  (1,184) 
 Balance at 30 June 2015 12,454  933  16,581  29,968 
         
 Carrying amounts        
 At 1 July 2013 7,217  173  7,397  14,787 
 At 30 June and 1 July 2014 5,585  167  5,408  11,160 
 At 30 June 2015 5,152  93  2,655  7,900 

13. Intangible assets

 

  Software Internally generated software Total 
 $000 $000  $000 
Cost      
 Balance at 1 July 2013 11,036  61,883  72,920 
 Additions 623  7,734  8,357 
 Disposals (402)  (9,272)  (9,674) 
 Work in progress movement (224)  892  668 
 Balance at 30 June 2014 11,033  61,238  72,271 
       
 Balance at 1 July 2014 11,033  61,238  72,271 
 Additions 271  8,343  8,614 
 Disposals (189)  (4,339)  (4,528) 
 Work in progress movement (1,929)  (1,929) 
 Balance at 30 June 2015 11,115  63,313  74,428 
       
 Accumulated amortisation and impairment losses      
 Balance at 1 July 2013 7,294  37,332  44,626 
 Amortisation expense 1,306  4,683  5,989 
 Eliminate on disposal (279)  (8,809)  (9,088) 
 Balance at 30 June 2014 8,321  33,206  41,527 
       
 Balance at 1 July 2014 8,321  33,206  41,527 
 Amortisation expense 1,094  5,099  6,193 
 Eliminate on disposal (94)  (4,339)  (4,433) 
 Balance at 30 June 2015 9,321  33,966  43,287 
       
 Carrying amounts      
 At 1 July 2013 3,742  24,551  28,294 
 At 30 June and 1 July 2014 2,712  28,032  30,744 
 At 30 June 2015 1,794  29,347  31,141 

Carrying amounts at year-end are stated at cost less accumulated amortisation and include work in progress relating to internally generated assets of $5,077,000 (2014: $7,006,000).

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

14. Loss on disposal of non-current assets

During the period there was a loss on the sale and disposal of furniture and fittings, computer hardware, and intangible assets of $83,000 (2014: $591,000).

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

 

2014    2015 
Actual    Actual 
$000     $000
3,679   Net surplus / (deficit) 560 
   Add/(less) items classified as investing or financing activities  
 (Gain)/loss on derecognition of work in progress 1,466 
591   (Gain)/loss on disposal of non-financial assets 83 
591   Total items classified as investing or financing activities 1,549 
     
   Add/(less) non-cash items  
12,446   Depreciation and amortisation 12,226 
223   Movements in non-current employee entitlements 477 
219   Movements in non-current provisions (343) 
12,888   Total non-cash items 12,360 
     
   Add/(less) working capital movements  
 (Increase)/decrease in debtor Crown (15,734) 
265   (Increase)/decrease in debtors and other receivables (126) 
(111)   (Increase)/decrease in advances and prepayments 548 
(1,988)   Increase/(decrease) in creditor Crown (748) 
(2,525)   Increase/(decrease) in creditors and other payables (613) 
519   Increase/(decrease) in goods and services tax payable (644) 
1,381   Increase/(decrease) in current provisions (1,074) 
(92)   Increase/(decrease) in employee entitlements 133 
(183)   Increase/(decrease) in deferred revenue (107) 
(2,734)   Total net working capital movements (18,365) 
14,424   Net cash flows from operating activities (3,896) 

16. Related-party transactions and key management personnel

Related-party transactions

Statistics NZ is a wholly-owned entity of the Crown.

Related-party disclosures have not been made for transactions with related parties that are within a normal supplier or client/recipient relationship on terms and conditions no more or less favourable than those that it is reasonable to expect the department would have adopted in dealing with the party at arm’s length in the same circumstances. Further, transactions with other government departments and Crown entities are not disclosed as related-party transactions when they are consistent with the normal operating arrangements between government agencies and undertaken on the normal terms and conditions for such transactions.

There were no related-party transactions that were not within a normal arm’s length supplier or client/recipient relationship.

Key management personnel compensation

 

2014    2015 
Actual    Actual 
 Executive Leadership Team(1)
2,380  Remuneration ($000) 1,521
7.5   Full-time equivalent members 6.0 
1. Executive Leadership Team includes the Government Statistician.  

There were no termination benefits and post-employment benefits paid to key management personnel for financial year ended 30 June 2015 (2014: $227,000). The remuneration of any staff member permanently in a role or acting in a role within that team has been included for the period they were a member.

The above key management personnel disclosure excludes the Minister of Statistics. The Minister’s remuneration and other benefits are not received only for his role as a member of key management personnel of the department. The Minister’s remuneration and other benefits are set by the Remuneration Authority under the Civil List Act 1979 and are paid under Permanent Legislative Authority, and not paid by the department.

17. Events after the balance sheet date

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

18. Financial instruments

Financial instrument categories

The carrying amounts of financial assets and financial liabilities in each of the PBE IPSAS 29 categories are as follows:

2014    2015 
Actual    Actual 
$000     $000
Loans and receivables 
32,088  Cash and cash equivalents  20,541 
3,260   Debtors and other receivables 2,838 
35,348   Total loans and receivables 23,379 
Financial liabilities measured at amortised cost 
4,761   Creditors and other payables 4,148 
4,761   Financial liabilities measured at amortised cost 4,148 

Financial instrument risks

Statistics NZ’s activities expose it to a variety of credit 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 Statistics NZ, 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 (NZDMO). These entities have high credit ratings. The only concentration of credit risk is the deposits held with Westpac. For its other financial instruments, the department does not have significant concentrations of credit risk.

The department’s maximum credit risk 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 NZDMO. 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 year
and 5 years 
 $000 $000  $000 
2014      
Creditors and other payables (Note 7) 4,761 
 2015      
Creditors and other payables (Note 7) 4,148 

19. Capital management

The department’s capital is its equity, which comprises the taxpayers’ 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.

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

20. 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 revenue and expense

Total expenditure was $4.29 million lower than budgeted. The underspend was partly due to $2.50 million of staff and operational savings initiatives achieved in 2014/15. There was also a timing variance underspend in the 5-year Multi-Year Appropriation programme that will deliver the 2018 Census of Population and Dwellings.

Statement of financial position

Cash and cash equivalents and Debtor Crown

Cash and cash equivalents were $11.941 million lower than budget due to a delay in the drawdown of cash from the Crown. This is reflected in the $15.734 million balance owing in Debtor Crown.

Property, plant, and equipment

Property, plant, and equipment was $8.751 million below budget due mainly to a timing difference for the fitout of the shared Christchurch Integrated Government Accommodation project.

Creditors and other payables

Creditors and other payables were $4.232 million lower than budget due to the timing of payables.

Net assets and equity

Net assets and total equity were $4.101 million lower than budget due to a delay in the drawdown of capital funding from the Crown. This is partly reflected in the $15.734 million balance owing in Debtor Crown.

Appropriation statements

The following statements report information about the expenses and capital expenditure incurred against each appropriation administered by Statistics NZ for the year ended 30 June 2015.

Statement of departmental budgeted and actual expenses and capital expenditure incurred against appropriations

For the year ended 30 June 2015

2014    2015  2015  2015  2016 
Expenditure after re-measurement    Expenditure before re-measurement  Re-measurement Expenditure after re-measurement Approved appropriation (1)
$000    $000    $000 $000  $000 
Vote Statistics            
Official Statistics multi-category appropriation 
13,102  Coordination of government statistical activities  15,548  15,548  15,459 
54,841   Population, social, and labour force statistical information services 39,047  39,047  39,153 
42,780   Economic and business statistical information services 48,475  48,475  48,500 
110,723   Total annual multi-category appropriation 103,070  103,070  103,112 
           
 Multi-year appropriation
9,997   2013 Census of Population and Dwellings 2,427  2,427  2,428 
 2018 Census of Population and Dwellings 7,024  7,024  13,100 
9,997   Total multi-year appropriation 9,451  9,451  15,528 
           
 Capital expenditure PLA
11,882   Department of Statistics capital expenditure – Permanent
Legislative Authority (PLA) under section 24(1) of the Public Finance Act
9,468  9,468  17,000 
11,882   Total capital expenditure PLA 9,468  9,468  17,000 
           
132,602   Total annual, multi-year, and permanent appropriations 121,989  121,989  135,640 
 1. These are the appropriations from the Supplementary Estimates, adjusted for any transfers under section 26A of the Public Finance Act. End-of-year performance information on these appropriations has been reported in Statement of service performance 2014/15.

Reconciliation of multi-year appropriations

For the year ended 30 June 2015

The 2018 Census appropriation was established from 1 July 2014 to 30 June 2019, to provide for flexibility in planning for the 2018 Census of Population and Dwellings as a single programme over a five-year cycle and to continue the Census Transformation work programme for 18 months.

The 2014/15 appropriation was approved for Budget 2014. The Budget from 2015/16 to 2018/19 was approved by Cabinet in June 2014 following the submission of a focused, detailed 2018 Census business case.

The 2013 Census appropriation was established from 1 October 2011 and expired 30 June 2015.

2013 Census of
Population and Dwellings 
2018 Census of
Population and Dwellings 
 Appropriation, adjustment, and use  $000  $000
 Original appropriation 72,045 13,100
 Adjustment for 2014/15 97,988 
 Total adjusted appropriation 72,045  111,088 
 Actual expenses in 2011/12 (6,340) 
 Actual expenses in 2012/13 (53,280) 
 Actual expenses in 2013/14 (9,997) 
 Actual expenses in 2014/15 (2,427)  (7,024) 
 Total actual expenses (72,044)  (7,024) 
 Balance of multi-year appropriation 104,064 

Statement of departmental unappropriated expenditure and capital expenditure

For the year ended 30 June 2015

Statistics NZ had no unappropriated expenses or capital expenditure for the year ended 30 June 2015 (2014: Nil).

Statement of departmental capital injections

For the year ended 30 June 2015

2014  2015   2015 
Actual    Actual  Approved appropriation 
$000     $000 $000  
   Vote Statistics    
5,778   Statistics New Zealand – Capital injection 6,940  11,041 

Statement of departmental capital injections without, or in excess of, authority

For the year ended 30 June 2015

Statistics NZ has not received any capital injections during the year without, or in excess of, authority.

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