Annual Report for the Year Ended 30 June 1999

• Our Vision
• Principal Functions
• Chief Executive's Overview
• The Way Forward
• Key Achievements
• The Ministry
• 1998/99 Financial Performance
• Key Statistics
• Statement of Responsibility
• Report of the Audit Office
• Financial Statements
• Output Class Performance
• References

Annual Report for the Year Ended 30 June 1999

1998/99 Financial Performance

Key Statistics for the year ended 30 June 1999

Statement of Responsibility

In terms of sections 35 and 37 of the Public Finance Act 1989, I am responsible, as the Chief Executive of the Ministry of Fisheries, for the preparation of the Ministry's financial statements and the judgements made in the process of producing those statements.

I have the responsibility of establishing and maintaining, and I have established and maintained, a system of internal control procedures that provide reasonable assurance as to the integrity and reliability of financial reporting.

In my opinion these financial statements fairly reflect the financial position and operations of the Ministry for the year ended 30 June 1999.

W R Tuck
Chief Executive

P Murray
Manager Corporate Development

Report of the Audit Office

To the Readers of the Financial Statements of the Ministry of Fisheries for the year ended 30 June 1999

We have audited the financial statements on pages 30 to 71. The financial statements provide information about the past financial and service performance of the Ministry of Fisheries and its financial position as at 30 June 1999. This information is stated in accordance with the accounting policies set out on pages 30 to 32.

Responsibilities of the Chief Executive

The Public Finance Act 1989 requires the Chief Executive to prepare financial statements in accordance with generally accepted accounting practice which fairly reflect the financial position of the Ministry of Fisheries as at 30 June 1999, the results of its operations and cash flows and service performance achievements for the year ended 30 June 1999.

Auditor's Responsibilities

Section 38(1) of the Public Finance Act 1989 requires the Audit Office to audit the financial statements presented by the Chief Executive. It is the responsibility of the Audit Office to express an independent opinion on the financial statements and report its opinion to you.

The Controller and Auditor-General has appointed Denis J Foy, of Ernst & Young, to undertake the audit.

Basis of Opinion

An audit includes examining, on a test basis, evidence relevant to the amounts and disclosures in the financial statements. It also includes assessing:

• the significant estimates and judgements made by the Chief Executive in the preparation of the financial statements; and
• whether the accounting policies are appropriate to the Ministry of Fisheries' circumstances, consistently applied and adequately disclosed.

We conducted our audit in accordance with generally accepted auditing standards, including the Auditing Standards issued by the Institute of Chartered Accountants of New Zealand. We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatements, whether caused by fraud or error. In forming our opinion, we also evaluated the overall adequacy of the presentation of information in the financial statements.

Other than in our capacity as auditor acting on behalf of the Controller and Auditor-General, we have no relationship with or interests in the Ministry of Fisheries.

Unqualified Opinion

We have obtained all the information and explanations we have required.
In our opinion the financial statements of the Ministry of Fisheries on pages 30 to 71:

• comply with generally accepted accounting practice; and
• fairly reflect:
• the financial position as at 30 June 1999;
• the results of its operations and cash flows for the year ended on that date; and
• the service performance achievements in relation to the performance targets and other measures set out in the forecast financial statements for the year ended on that date.

Our audit was completed on 30 September 1999 and our unqualified opinion is expressed as at that date.

D J Foy
Ernst & Young
On behalf of the Controller and Auditor-General
Wellington, New Zealand

Statement of Accounting Policies

Reporting Entity

The Ministry of Fisheries is a Government Department as defined by section 2 of the Public Finance Act 1989.

These are the financial statements of the Ministry of Fisheries prepared pursuant to section 35 of the Public Finance Act 1989.

In addition, the Ministry has reported trust monies which it administers.

Measurement Basis

The general accounting principles recognised as appropriate for the measurement and reporting of financial performance and financial position on an historical cost basis, modified by the revaluation of certain fixed assets, have been followed.

Specific Accounting Policies

Budget Figures

The Budget figures are those presented in the Budget Night Estimates as amended by the Supplementary Estimates and any transfer made by Order-in-Council under section 5 of the Public Finance Act 1989.

Revenue

The Ministry derives revenue through the provision of outputs to the Crown, for services to third parties and interest on its deposits with the New Zealand Debt Management Office (NZDMO). Such revenue is recognised when earned and is reported in the financial period to which it relates.

Cost Allocation

Direct costs assigned to outputs

Costs directly attributable to an output are charged directly to the output on the following basis:

For the year ended 30 June 1999, direct costs accounted for 76% of the Ministry's costs (1998: 79%).

Basis for assigning indirect and corporate costs to outputs

Those costs that cannot be identified, in an economically feasible manner, with a specific output are assigned on the proportion of direct staff costs for each output.

For the year ended 30 June 1999, indirect costs accounted for 24% of the Ministry's costs (June 1998: 21%).

Debtors and Receivables

Receivables are recorded at estimated realisable value, after providing for doubtful and uncollectable debts.

Leases

Operating lease payments, where the lessors retain substantially all the risks and benefits of ownership of the leased item, are charged as expenses in the periods in which they are incurred.

Fixed Assets

(a) Land, buildings and vessels are stated at net current value as at 1 July 1996, as established by an independent valuation for the Ministry of Fisheries, with subsequent additions at cost less depreciation. For the purpose of these financial statements, land and buildings, although owned by the Crown, are deemed to be owned by the Ministry as principal occupier or user. Land, buildings and vessels are valued every three years by an independent registered valuer.

(b) All other fixed assets are stated at cost less depreciation or the valuation placed on the assets at 1 July 1996. Only fixed assets with a cost in excess of $5,000 are capitalised.

Depreciation

Depreciation of fixed assets, other than freehold land and work in progress, is provided on a straight line basis so as to allocate the cost (or valuation) of assets over their estimated useful lives.

The estimated economic useful lives are:

The cost of leasehold improvements is capitalised and amortised over the unexpired period of the lease or the estimated remaining useful lives of the improvements, whichever is shorter.

Inventories

Inventories acquired for use in the provision of goods and services are expensed, except for bulk stocks which are capitalised and expensed when used. Inventories are valued at cost. Full provision is made for obsolescence where applicable.

Employee Entitlements

Provision is made in respect of the Ministry's liability for annual leave, long service leave and retirement leave. Annual leave has been calculated on an actual entitlement basis at current rates of pay. Employee entitlements to long service leave and retiring leave are recognised for all employees on the basis of an actuarial valuation.

Statement of Cash Flows

Cash means cash balances on hand, held in bank accounts, and deposits with the NZDMO.

Operating activities include cash received from all income sources of the Ministry and record the cash payments for the supply of goods and services.

Investing activities are those activities relating to the acquisition and disposal of non-current assets.

Financing activities comprise capital injections by, or repayment of capital to, the Crown.

Financial Instruments

Revenue and expenses in relation to all financial instruments are recognised in the Statement of Financial Performance. All financial instruments are recognised in the Statement of Financial Position.

Goods and Services Tax (GST)

The Ministry is a registered trader for GST purposes and is liable for GST on all goods and services supplied. The Statement of Unappropriated Expenditure and the Statements of Departmental and Non-Departmental Expenditure and Appropriations are inclusive of GST. All other Statements are GST exclusive. The Statement of Financial Performance, Statement of Cash Flows and the Statement of Financial Position are exclusive of GST, except for Creditors and Payables and Debtors and Receivables which are GST inclusive. The amount of GST owing to or from the Department of Inland Revenue at balance date, being the difference between Output GST and Input GST, is included in Creditors and Payables or Debtors and Receivables (as appropriate).

Taxation

Government Departments are exempt from the payment of Income Tax in terms of the Income Tax Act 1994. Accordingly, there is no provision for income tax.

Commitments

Future expenses and liabilities to be incurred on non-cancellable operating leases that have been entered into at balance date are disclosed as commitments to the extent that they are equally unperformed obligations.

Contingent Liabilities

Contingent liabilities are disclosed at the point at which the contingency is evident.

Taxpayers' Funds

This is the Crown's net investment in the Ministry.

Changes in Accounting Policies

There has been a change in accounting policies since the date of the last audited financial statements.

Employee entitlements to long service leave and retiring leave are recognised for all employees on the basis of an actuarial valuation. Previously all employee entitlements were calculated on an entitlement basis at current rates of pay. The effect of this change in accounting policy has been to increase Other Expenses in the Statement of Financial Performance and reduce taxpayers' funds in the Statement of Financial Position by $1.3 million.