Annual Report for the year ended 30 June 2002
Presented to the House of Representatives pursuant to Section 39 of the Public Finance Act, 1989
Contents
- Letter to Minister
- Our Vision
- Chief Executive’s Overview
- Strategic Context 2001/04
- Key Achievements
- Fisheries Research
- Ministry Performance For The Year Ended 30 June 2002
- Statement of Resources
- Terms and Definitions Used
- Legislation Administered by the Ministry of Fisheries at 30 June 2002
- Ministry Directory
Valuation information
Land, buildings and vessels were revalued during the 1999/2000 financial year at net current value (“existing use” basis) as established by Darroch Limited, an independent registered valuer, with subsequent additions at cost less depreciation.
Reassessment of useful lives, and residual values
During 2002, the Ministry conducted a review of the useful lives, residual values and depreciation methods used to depreciate fixed assets to ensure they continued to be appropriate. As a consequence of the review, the useful lives of certain items of plant and equipment and leasehold improvements were reassessed and, as a result, a net increase in the depreciation charge of $583,000 (2001 - nil) has been recognised in the Statement of Financial Performance.
Notes to the Financial Statements for the Year Ended 30 June Notes 11 - 12.
2001
Actual
$000 |
|
2002
Actual
$000 |
|
Note 11: Creditors and Payables |
|
4,315 |
Trade creditors |
558 |
7,632 |
Accrued expenses |
8,699 |
1,206 |
GST payable |
1,895 |
|
13,153 |
Total creditors and payables |
11,152 |
|
Note 12: Provision for Repayment of Surplus to the Crown |
2,478 |
Net surplus |
5,660 |
|
Add other expenses: |
160 |
- Organisational review |
197 |
|
2,638 |
Total provision for repayment of surplus |
5,857 |
|
Notes to the Financial Statements for the Year Ended 30 June Note 13: Employee Entitlements.
Note 13: Employee Entitlements |
|
Annual
Leave
($000) |
Other
Personnel
Costs
($000) |
Total
($000) |
|
|
Current liabilities |
Balance at start of period 2001 |
1,138 |
823 |
1,961 |
Expenditure during the period |
(1,169) |
(823) |
(1,992) |
Increase in provision |
1,258 |
1,013 |
2,271 |
Balance at end of period 2002 |
1,227 |
1,013 |
2,240 |
|
Balance at end of period 2002 |
1,227 |
1,013 |
2,240 |
|
|
Retiring
Leave
($000) |
Long
Service
Leave
($000) |
Total
($000) |
|
Term liabilities |
Balance at start of period 2001 |
1,154 |
392 |
1,546 |
Expenditure during the period |
0 |
(38) |
(38) |
Increase in provision |
162 |
16 |
178 |
|
Balance at end of period 2002 |
1,316 |
370 |
1,686 |
|
Retiring Leave
Employees are entitled to retiring leave or approved early retirement, providing they have completed 10 or more years of service and the retirement is the permanent cessation of regular paid employment. The timing of outflows for retiring leave is dependent on the actual retirement date of employees.
Long Service Leave
Employees who have completed 10 year’s continuous service may be granted, only once, two weeks long service leave. A further ten working days are available after completion of 20 years’ continuous service. Long service leave must be taken within five years of qualification. As at 30 June 2002, employee entitlements to long service leave and retiring leave were valued on an actuarial basis by Mr Bernie Higgins of Aon Consulting New Zealand Limited, an independent consulting actuary.
The discount rate used to assess the net present value of retiring leave and long service leave was 5.75% (2001 = 5.75%).
Note 14: 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 trade creditors.
Credit Risk
Credit risk is the risk that 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 trade debtors, and transactions with financial institutions.
The Ministry does not require any collateral or security to support financial instruments with financial institutions that 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.
Maximum Credit Risk at 30 June
Maximum Credit Risk at 30 June.
2001
Actual
$000 |
|
2002
Actual
$000 |
|
2,214 |
Cash |
1,883 |
15,486 |
Debtors and Receivables |
17,341 |
|
17,700 |
Maximum credit risk |
19,224 |
|
Fair Value
The fair value of all financial instruments is equivalent to the carrying amount disclosed in the Statement of Financial Position.
Currency Risk and Interest Rate Risk
Currency risk is the risk that debtors and creditors due in foreign currency will fluctuate because of changes in foreign exchange rates.
Interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in market interest rates. Under sections 46 and 47 of the Public Finance Act, the Ministry cannot raise a loan without Minister of Finance approval and no such loans have been raised. Accordingly there is no interest rate exposure for funds borrowed.
The Ministry has no significant exposure to currency risk or interest rate risk on its financial instruments.
Note 15: Contingencies
The Ministry does not have any contingent assets as at 30 June 2002 (30 June 2001: Nil). Contingent liabilities are separately disclosed in the Statement of Contingent Liabilities.
Note 16: Related Party Information
The Ministry is a wholly owned entity of the Crown. The Government significantly influences the roles of the Ministry as well as being its major source of revenue.
The Ministry enters into numerous transactions with other government departments, Crown agencies and state-owned enterprises on an arms-length basis. Where those parties are acting in the course of their normal dealings with the department, related party disclosures have not been made for transactions of this nature.
Apart from those transactions described above, the Ministry has not entered into any related party transactions.
Note 17: Major Budget Variations
Statement of Financial Performance
The variations from the initial 2001/02 Budget Night (Main) Estimates to Supplementary Estimates are due to:
The variations from the initial 2001/02 Budget Night (Main) Estimates to Supplementary Estimates are due to:
$000 |
(i) |
finalisation of fisheries research services to be provided in the 2001/02 financial year, following consultation with fisheries stakeholders |
3,997 |
(ii) |
an increase in observer coverage |
1,200 |
(iii) |
an increase in prosecution costs |
800 |
(iv) |
an increase in debt recovery costs |
150 |
(v) |
introduction of the Infringement Notice System |
188 |
(vi) |
increased activity costs in relation to Operation Pacman |
200 |
(vii) |
funding transfers between the 2000/01 and 2001/02 financial years for |
|
|
- marine biosecurity research |
571 |
|
- input and participation into fisheries management processes |
340 |
(viii) |
a funding transfer from the Ministry of Fisheries to the Ministry of Agriculture and Forestry under the biodiversity package |
(40) |
|
Total |
7,406 |
|
Note 18: Segment Information
The Ministry undertakes fisheries management activities throughout New Zealand.