	Note	2001 Actual	2000 Actual
		$000	$000
Fees and fines		45,649	44,322
Electrical Levies		3,199	3,107
Inter-departmental revenue		2,113	2,158
Petroleum Fuels Monitoring Levy		1,093	1,138
Rental from sub-let of office space		761	778
Gas Levies		741	548
Sale of publications		87	146
Net gain on sale of fixed assets	3	6	25
Miscellaneous		1,266	930
Total Other Revenue		54,915	53,152

For further breakdown of fees and fines, see information under each output class.

3. Net Gain on Sale of Fixed Assets

	2001	2000
	$000	$000
Computer equipment	(19)	-
Furniture	1	-
Motor vehicles	22	30
Office equipment	2	(3)
Test equipment	-	(2)
Net Gain on Sale of Fixed Assets	6	25

4. Interest Revenue

The Ministry invests surplus cash on term deposit with the New Zealand Debt Management Office (NZDMO) and earns interest at variable rates.

5. Personnel

	2001 Actual	2000 Actual
	$000	$000
Salaries and wages	38,481	37,131
ACC levy	415	400
Pension expenses - GSF	591	611
Recruitment costs	907	493
Fringe benefit tax	43	10
Total Personnel	40,437	38,645

6. Operating

	2001 Actual	2000 Actual
	$000	$000
Rental and operating lease costs	8,045	8,335
Professional services	8,821	8,430
Technical services	3,016	4,279
Travel - domestic and overseas	3,140	2,914
Premises costs⁴	1,834	1,581
Staff training	895	915
Maintenance and repairs of fixed assets	1,835	1,720
Audit fees to auditors for audit of the financial statements
Deloitte Touche Tohmatsu for GSF	95	95
Audit New Zealand	155	155
Other services provided by auditors
Deloitte Touche Tohmatsu for GSF	19	-
Audit New Zealand	39	-
Fixed asset write-offs	246	72
Leasehold improvements revaluation loss	120	-
Change in provision for doubtful debts	(4)	(108)
Entertainment expenses	141	121
Bad debts written off	56	376
Other operating costs	21,811	15,963
Total Operating	50,264	44,848

7. Restructuring Expenses

	2001 Actual	2000 Actual
	$000	$000
Review of Corporate Information Management and Technology Group	-	258
Transition of Energy Efficiency Conservation Authority to Crown entity	-	90
Transition of Government Superannuation Fund to Crown entity	426	-
Review of Intellectual Property Office	65	-
Review of Insolvency and Trustee Service	108	-
Review of Companies Office Services	75	199
Operations Branch Support Services	176	-
Regulatory and Competition Policy Branch Support Services	75	-
Total Restructuring Expenses	925	547

8. Capital Charge

The Ministry pays a capital charge to the Crown on its taxpayers' funds as at 31 December and 30 June each year. The capital charge rate for the year ended 30 June 2001 was 10 percent (30 June 2000, 10 percent).

9. Taxpayers' Funds

Taxpayers' funds comprises two components:

	2001 Actual	2000 Actual
	$000	$000
General Funds
General funds as at 1 July	2,064	2,064
Net operating surplus	7,417	6,591
	9,481	8,655
Provision for repayment of surplus to the Crown	(7,417)	(6,591)
Capital contribution from the Crown for the development of a Personal Property Securities Register	599	-
Transfer from Department of Internal Affairs associated with the transfer of net assets of the Office of Tourism and Sport from 1 July 2000	81	-
Capital withdrawal associated with establishment of the Energy Efficiency Conservation Authority as a stand-alone Crown entity from 1 July 2000	(345)	-
General Funds as at 30 June	2,399	2,064
Revaluation Reserve
Leasehold improvements	-	221
Total Taxpayers' Funds as at 30 June	2,399	2,285

Leasehold improvements were revalued as at 30 June 2001 and this resulted in a clearance of the revaluation reserve and a revaluation loss of $120,000.

10. Short-Term Deposits

As at balance date the following term deposit had been placed with the New Zealand Debt Management Office (NZDMO):

30 June 2000 Actual	Counterparty	Interest Rate %	Term	30 June 2001 Actual
$000				$000
7,800	NZDMO	5.500	94 days	7,000
-	NZDMO	5.125	14 days	3,000
-	NZDMO	4.938	7 days	1,000
7,800	Total Short-term deposits			11,000

11. Debtors and Receivables

	2001 Actual	2000 Actual
	$000	$000
Third party debtors	4,638	3,800
Less: Provision for doubtful debts	(312)	(316)
Net	4,326	3,484
Interest accrued	2	-
Inter-departmental debtors	43	1
Total Debtors and Receivables	4,371	3,485

12. Fixed Assets

	Cost or Valuation as at 30 June 2001	Accu- mulated Depre- ciation 30 June 2001 (refer note below)	Net Carrying Amount as at 30 June 2001	Cost or Valuation as at 30 June 2000	Accu- mulated Depre- ciation 30 June 2000	Net Carrying Amount as at 30 June 2000
	$000	$000	$000	$000	$000	$000
Buildings	38	27	11	38	25	13
Leasehold improvements	1,358	-	1,358	2,866	775	2,091
Computer equipment	16,000	9,196	6,804	15,992	9,030	6,962
Furniture	3,817	2,445	1,372	3,859	2,351	1,508
Office equipment	2,201	1,630	571	2,347	1,649	698
Test equipment	3,179	1,851	1,328	2,723	1,639	1,084
Motor vehicles	1,645	834	811	1,526	715	811
Work in progress	1,195	-	1,195	406	-	406
Total Fixed Assets	29,433	15,983	13,450	29,757	16,184	13,573

Leasehold improvements are stated at net current values determined by an independent registered valuer. A revaluation of all leasehold improvements was completed by Lockwood & Associates on 30 June 2001. Leasehold improvements are revalued every three years.

All other fixed assets costing $1,000 (excluding GST) or more are capitalised and recorded at historical cost.

13. Creditors and Payables

	2001 Actual	2000 Actual
	$000	$000
Trade creditors	2,570	2,391
Accrued operating expenses	8,082	6,462
Provisions (refer note 14)	2,809	2,524
GST payable	351	309
	13,812	11,686
Accruals for fixed assets	704	384
Total Creditors and Payables	14,516	12,070

14. Provisions

	2001 Actual	2000 Actual
	$000	$000
Refund of Crown Mineral Applications	102	129
Rebate of Petroleum Fuels Monitoring Levy	245	482
Rebate of Gas Levies	113	20
Restructuring	941	348
Rebate of Electrical Levies	712	978
Other	696	567
Total Provisions	2,809	2,524

15. Unearned Income

	2001 Actual	2000 Actual
	$000	$000
Radio operations	5,621	5,589
Energy inspection	889	974
Other unearned income	5	6
Total Unearned Income	6,515	6,569

Unearned income for Radio Operations relates to annual licence fees invoiced at the beginning of the period to which they relate and are received in advance of being recognised as income. Energy Inspection unearned income includes income received in advance for electrical workers' practicing licences.

16. Employee Entitlements

	2001 Actual	2000 Actual
	$000	$000
Non-current Liabilities
Retirement and long service leave	2,041	2,224
Total Non-current Portion	2,041	2,224
Current liabilities
Retirement and long service leave	570	221
Annual leave	2,030	2,076
Total Current Portion	2,600	2,297
Total Employee Entitlements	4,641	4,521

The current liability represents the amount due for settlement within the next 12 months.

17. Provision for Payment of Net Surplus

	2001 Actual	2000 Actual
	$000	$000
Net surplus/(deficit)	7,417	6,591
Add: Other expenses (not for production of outputs)	-	-
Total Provision for Payment of Net Surplus	7,417	6,591

18. Related Parties

The Ministry is a wholly owned entity of the Crown. The Government significantly influences the roles of the Ministry as well as being a major source of its revenue.

The Ministry enters into numerous transactions with other government departments, Crown agencies and state-owned enterprises on an arm's-length basis. These transactions are not considered to be related party transactions.

Apart from those transactions described above, the Ministry has not entered into any related party transactions.

19. Financial Instruments

The Ministry is party to financial instrument arrangements as part of its everyday operations. These include instruments such as bank balances, investments, accounts receivable, trade creditors and foreign currency forward contracts.

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 and the New Zealand Debt Management Office (NZDMO).

The Ministry does not require any collateral or security to support financial instruments with financial institutions that the Ministry deals with, or with the NZDMO, as these entities have high credit ratings. For its other financial instruments, the Ministry does not have significant concentrations of credit risk.

Fair Value

The fair value of all financial instruments is equivalent to the carrying amount disclosed in the Statement of Financial Position.

Currency Risk

Currency risk is the risk that debtors and creditors due in foreign currency will fluctuate because of changes in foreign exchange rates.

The Ministry uses foreign currency forward contracts to manage foreign exchange exposures. All individual payments above the equivalent of NZ$50,000 must be made via foreign currency forward contracts. The maximum exposure for all other foreign exchange transactions that the Ministry may have at any one time is NZ$250,000.

Interest Rate Risk

Interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in market interest rates. This could impact on the return on investments or the cost of borrowing. The Ministry has no significant exposure to interest rate risk on its financial instruments.

Under section 46 of the Public Finance Act the Ministry cannot raise a loan without Ministerial approval and no such loans have been raised. Accordingly, there is no interest rate exposure for funds borrowed.

20. Major Budget Variances

Statement of Financial Performance

Revenue Crown

The increase in output class expenses and consequential increase in Crown Revenue principally result from increases in the following output classes (all exclusive of GST):

Vote: Commerce, Output Class D1 - Policy Advice on Business and Competition

The appropriation for this output class was increased by $477,000. Most of this provided for the costs associated with additional policy advice on the ongoing harmonisation of New Zealand law with that of our trading partners in respect of electronic commerce and enhancing policy to Government on e-commerce issues. Additional funding was provided to operate the Business Compliance Cost Panel, offset by a transfer to meet costs associated with the Government Superannuation Fund transition.

Vote: Energy, Output Class D1 - Policy Advice on Energy and Resource Issues

The appropriation for this output class was increased by $95,000. Most of this provided for the costs associated with specialist advice for the review of the Petroleum Specification Regulations.

Vote: Government Superannuation Fund (GSF), Output Class D1 - Management of the GSF

The appropriation for this output class was increased by $1,700,000 to meet the transitional costs associated with the transfer of functions from the Ministry of Economic Development to the new Crown Entity Government Superannuation Fund New Zealand.

Vote: Industry and Regional Development, Output Class D1 - Policy Advice: Industry and Regional Development

The appropriation for this output class was increased by $4,287,000. This mainly relates to an expense transfer from 1999/2000 for the establishment of Industry NZ, and delivery of Industry and Regional development programmes and additional funding to meet costs reflecting the transitional period of establishing roles.

Vote: Industry and Regional Development, Output Class D2 - Industrial Supplies Office

The appropriation for this output class was decreased by $280,000 as these activities were transferred to Industry NZ from October 2000.

Vote: Sport, Fitness and Leisure, Output Class D1 - Policy Advice: Sport, Fitness and Leisure

The Main Estimates appropriation for this output class of $515,000 was transferred from the Department of Internal Affairs (it was not in the original budget). This was increased by $89,000 to fund the implementation of the Sport Sector review.

Vote: Tourism, Output Class D1 - Policy Advice: Tourism

The Main Estimates appropriation for this output class of $2,083,000 was transferred from the Department of Internal Affairs (it was not in the original budget). This was decreased by $312,000 mainly due to the delay in completion of certain tourism research projects. An expense transfer to 2001/2002 was approved.

Other Revenue

Provision was made in the Supplementary Estimates for increases in third party revenue and associated increases in expenses and GST for appropriation purposes as follows:

Vote: Economic Development, Output Class D1 - Policy Advice for corporate overhead and accommodation support services provided by the Ministry of Economic Development to Industry NZ in its establishment year.

Vote: Commerce, Output Classes D1 - Policy Advice for the E-Summit Sponsorship and associated seminar fees, D4 - Registration and Granting of Intellectual Property Rights and D7 - Registration and Provision of Statutory Information reflecting forecasting changes related to increased activity in the respective output classes. The last two of these output classes are demand driven.

Vote: Consumer Affairs, Output Class D3 - Administration of Trade Measurement Legislation recognising additional contract services on international standards for Singapore.

Other revenue is below budget for Vote: Energy, Output Class D2 - Management of the Crown Mineral Estate due to the surrender of permits and licences in 1999 and 2000.

Interest Revenue

The greater-than-anticipated interest earnings from New Zealand Debt Management Office investments, reflects greater than expected third party revenue and improvements in cash flow management.

Further information on the major budget variations from the initial Budget Night (Main) Estimates are provided under each output class in the Statement of Objectives and Statement of Service Performance.

Output Expenses

Output expenses have increased mainly due to the corresponding expenses associated with the changes referred to above.

Statement of Financial Position (and Cash Flows)

The increase in cash and short term deposits, reflects the increase in current liabilities and greater-than-expected third party revenue and deferral of capital expenditure.

21. Discontinued Activities

Vote: Industry and Regional Development, Output Class: Industrial Supplies Office

The Industrial Supplies Office (ISO) facilitates purchases by New Zealand government agencies of domestic products and enhances opportunities for New Zealand suppliers to compete for Australian government business. From 7 October 2000 the activities of the ISO transferred to Industry NZ. Industry NZ is a Crown entity responsible for the delivery of industry and regional development programmes and activities under Vote: Industry and Regional Development.

Vote: Government Superannuation Fund (GSF), Output Class: Management of the GSF

This output class provides services including the purchase of policy advice, Ministerial servicing, investment management, contract management and statutory decision-making in respect of GSF schemes. From 2 October 2001 these activities are to be taken over by the GSF Authority under Vote: Finance. The GSF Authority is a Crown entity responsible for managing the GSF assets and administering the GSF schemes on behalf of the Crown.

22. Events after Balance Date

No events have occurred between the balance date and date of signing these financial statements that materially affect the financial statements.

⁴Includes rates, power and water, cleaning services and other utility charges.

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Printed: 26/11/2009