	2006 $000	2005 $000
Fees and fines	39,161	37,351
Electrical levies	3,698	3,350
Inter-departmental revenue	1,454	925
Petroleum fuels monitoring levy	1,529	1,537
Gas levies	801	815
Sale of publications	22	35
Miscellaneous	242	582
Total Other Revenue	46,907	44,595

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

3 Personnel

	2006 $000	2005 $000
Salaries and wages	50,372	46,868
ACC levy	(435)	276
Pension expenses - GSF	396	399
Pension expenses - SSRSS	896	424
Recruitment costs	990	1,075
Fringe benefit tax	4	11
Total Personnel	52,223	49,053

4 Operating

	2006 $000	2005 $000
Rental and operating lease costs	5,266	5,994
Professional services	5,703	7,463
Tourism sector research	3,377	3,028
IT costs and Technical IT support	14,228	10,405
Technical services	3,943	3,530
Travel - domestic and overseas	4,214	3,706
Premises costs²	1,348	1,378
Staff training	1,964	1,526
Maintenance and repairs of fixed assets	759	801
Audit fees to auditors for audit of the financial statements
Audit New Zealand	191	182
Fixed asset write-offs	254	332
Revaluation of fixed assets	559	-
Entertainment expenses	235	234
Bad debts written off	16	20
Doubtful debts provisions adjustments	-	(30)
Other operating costs	11,921	10,889
Total Operating	53,978	49,458

5 Restructuring

	2006 $000	2005 $000
Energy Statistics Group	65	-
Business Services Branch Corporate Support	56	364
Corporate Support	34	18
Corporate IT Group	-	515
Intellectual Property Office	-	117
Total Restructuring	155	1,014

6 Depreciation

	2006 $000	2005 $000
Buildings	5	2
Leasehold improvements	726	576
Computer equipment	3,582	2,682
Furniture	678	555
Office equipment	152	180
Test equipment	232	228
Motor vehicles	181	175
Total Depreciation	5,556	4,398

7 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 2006 was 8.0 percent (30 June 2005, 8.0 percent).

8 Taxpayers' Funds

Taxpayers' funds comprises:	2006 $000	2005 $000
General Funds
General funds as at 1 July	14,578	4,578
Net operating surplus/(deficit)	(5,773)	(5,082)
Provision for repayment of surplus to the Crown	(3,391)	(2,544)
Capital contribution from the Crown for working capital funding	4,000	10,000
Capital contribution from the Crown for climate change register	1,300	-
Capital contribution from the Crown for memorandum account deficit funding	9,164	7,626
Total Taxpayers' Funds as at 30 June	19,878	14,578

9 Receivables and Advances

	2006 $000	2005 $000
Third party debtors	3,953	5,724
Less: Provision for doubtful debts	(110)	(121)
Net	3,843	5,603
Inter-departmental debtors	250	111
Total Receivables and Advances	4,093	5,714

10 Fixed Assets

	Cost or Valuation as at 30 June 2006	Accumulated Depreciation as at 30 June 2006	Net Carrying Amount as at 30 June 2006	Cost or Valuation as at 30 June 2005	Accumulated Depreciation as at 30 June 2005	Net Carrying Amount as at 30 June 2005
Buildings	43	40	3	39	35	4
Leasehold improvements	6,003	62	5,941	5,921	799	5,122
Computer equipment	28,569	15,246	13,323	21,553	15,450	6,103
Furniture and fittings	3,632	1,401	2,231	3,147	779	2,368
Office equipment	1,190	817	373	1,128	779	349
Test equipment	2,377	1,369	1,008	2,335	1,143	1,192
Motor vehicles	1,475	869	606	1,489	755	734
Work in progress	2,899	-	2,899	4,790	-	4,790
Total Fixed Assets	46,188	19,804	26,384	40,402	19,740	20,662

Leasehold improvements are stated at net current values determined by an independent registered valuer. A revaluation of all leasehold improvements was completed by Williams Valuations Ltd on 30 June 2006. Leasehold improvements are revalued every five years.

Bespoke software (custom built in-house major registry applications) developed in-house (including work undertaken by IT outsource partners) with a total development cost of under $20,000 (GST exclusive) is expensed. In these cases any expenditure is to be treated as "software - minor enhancements". Other items of computer software costing $5,000 (excluding GST) or more are capitalised and recorded at historical cost.

All other fixed assets costing $2,000 (excluding GST) or more are capitalised and recorded at historical cost.

Work in progress are items of fixed assets that are either under construction or not completed at balance date. It consists predominantly of Computer system development and hardware.

11 Creditors and Payables

	Note	2006 $000	2005 $000
Trade creditors		5,012	3,555
Levies refundable		650	1,040
Accrued operating expenses		6,488	7,904
Provisions	12	222	853
GST payable		362	482
		12,734	13,834
Accruals for fixed assets		613	445
Total Creditors and Payables		13,347	14,279

12 Provisions

	Note	2006 $000	2005 $000
Restructuring Provision
Opening balance		627	-
Additional provision made in the year		155	1,014
Charged against the provision in the year		(782)	(387)
Unused amounts reversed during the year		-	-
Total Restructuring Provision		-	627
Provision for Onerous Contracts	16
Opening balance		226	-
Additional provision made in the year		222	226
Charged against the provision in the year		(226)	-
Unused amounts reversed during the year		-	-
Total Onerous Contract Provisions		222	226
Total Provisions		222	853

The restructuring provision arises from various organisational reviews being conducted within the Ministry.

The onerous contract provision arises from non-cancellable leases where income from sub-tenants is less than the cost of the lease.

13 Unearned Income

	2006 $000	2005 $000
Radio operations	3,226	3,539
Energy inspection	1,152	954
Crown Minerals	303	-
Total Unearned Income	4,681	4,493

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' practising licences. Crown Minerals unearned income relates to income received in advance for annual licences and permits.

14 Provision for Employee Entitlements

	2006 $000	2005 $000
Non-current Liabilities
Retirement and long service leave	2,794	2,664
Total Non-current Portion	2,794	2,664
Current Liabilities
Retirement and long service leave	590	487
Annual leave	3,173	2,393
Total Current Portion	3,763	2,880
Total Provision for Employee Entitlements	6,557	5,544

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

15 Provision for Payment of Net Surplus

	2006 $000	2005 $000
Net surplus/(deficit)	(5,773)	(5,082)
Add back deficit in:
Registration and Provision of Statutory Information memorandum account	7,233	5,426
Administration of Licensed Building Practitioners memorandum account	-	280
Management and enforcement of the Radiocommunications Act 1989 memorandum account	1,931	1,920
Total Provision for Payment of Net Surplus	3,391	2,544

16 Provision for Onerous Contracts

	2006 $000	2005 $000
Opening balance	619	-
Additional provision made in the year	326	619
Charged against the provision in the year	(226)	-
Unused amounts reversed during the year	(209)	-
Total Provision for Onerous Contracts	510	619
Represented by:
Current	222	226
Non-current	288	393
Total Provision for Onerous Contracts	510	619

The Ministry has two non-cancellable leases. These are for six floors of 47 Boulcott Street in Wellington and vacant space in a storage facility at Toop Street in Seaview, Lower Hutt. The Ministry no longer occupies the Boulcott Street floors and is not able to utilise the vacant space at Toop Street. Five of the six Boulcott Street floors have been sublet. Owing to market conditions, the rental income achieved is much lower than the rental expense being incurred. The net obligation under these lease agreements has been provided for as an onerous contract. The liability for Toop Street will be incurred over the next four years while the Boulcott Street liability will be incurred over the next two years.

17 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.

18 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.

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.

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 1989, 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.

19 Discontinued Activities

There were no discontinued activities for the 2005/06 financial year.

20 Events after Balance Date

On 1 September 2006 the operations of the Electrical Workers Registration Board were transferred the Department of Building and Housing.

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

²Includes rates, power and water, cleaning services and other utility charges.

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Printed: 25/11/2009