15 FINANCIAL INSTRUMENTS
The Ministry is party to financial instrument arrangements as part of its everyday operations. These include instruments such as bank balances, accounts receivable and creditors.
Credit Risk
Credit risk is the risk a third party will default on its obligations to the Ministry, causing the Ministry to incur a loss. In the normal course of its business, the Ministry incurs credit risk from debtors and transactions with financial institutions. The Ministry does not require any collateral or security to support financial instruments with financial institutions the Ministry deals with, as these entities have high credit ratings. For its other financial instruments, the Ministry does not have significant concentrations of credit risk.
Financial instruments.
2003
Actual
$000 | | 2004
Actual
$000 |
|---|
| 2,763 | Cash | 2,139 |
|---|
| 17,633 | Debtors and receivables | 14,762 |
|---|
| 20,396 | Maximum credit risk | 16,901 |
|---|
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 the amounts recorded as debtors and creditors may fluctuate as a result of changes in foreign exchange rates. Interest rate risk is the risk the value of a financial instrument will fluctuate due to changes in market interest rates. The Ministry has no significant exposure to either currency risk or interest rate risk.
16 CONTINGENCIES
The Ministry does not have any contingent assets as at 30 June 2004 (2003: Nil).
Contingent liabilities are separately disclosed in the Statement of Contingent Liabilities.
17 RELATED PARTY INFORMATION
The Ministry is a wholly owned entity of the Crown and enters into transactions with other government departments, Crown agencies and state-owned enterprises. These transactions are not considered to be related party transactions.
18 SEGMENT INFORMATION
The Ministry undertakes fisheries management activities throughout New Zealand.
19 MAJOR BUDGET VARIATIONS
Statement of Financial Performance
The variations from the initial 2003/04 Budget Night (Main) Estimates to Supplementary Estimates were due to:
Major budget variations.
| | $000 |
|---|
| A funding transfer from 2002/03 to 2003/04 for: | |
|---|
| – completion of 2002/03 fisheries marine biodiversity research commitments | 3,473 |
|---|
| – completion of 2002/03 biosecurity research commitments | 400 |
|---|
| – prosecutions managed | 250 |
|---|
| An increase in observer coverage | 900 |
|---|
| An increase in legal expenses | 616 |
|---|
| An increase in prosecution costs | 300 |
|---|
| The estimated cost of the Deep Sea Conference | 224 |
|---|
| The costs of systems developments | 200 |
|---|
| The cost of the State Sector Retirement Savings Scheme | 72 |
|---|
| Increased funding for biodiversity research | 50 |
|---|
| The costs of the biosecurity programme for eradication and control of undaria seaweed | 50 |
|---|
| The cost of tendering Crown quota | 30 |
|---|
| Costs of a fisher training exchange | 12 |
|---|
| A transfer from 2003/04 to 2005/06 to fund the observer coverage for monitoring incidental catch of seabirds in commercial fishing operations | (2,211) |
|---|
| A reduction in the contract price for services delivered by external providers | (239) |
|---|
| The reclassification of funding for payment of subscriptions to international organisations to a non-departmental other expense | (160) |
|---|
| A transfer to 2004/05 to fund the new management regime for aquaculture | (100) |
|---|
Total | 3,867 |
|---|