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These non-departmental schedules and statements present financial information on public funds managed by the Ministry on behalf of the Crown.
These non-departmental balances are consolidated into the Financial Statements of the Government. For a full understanding of the Crown’s financial position, results of operations and cash flows for the year, reference should also be made to the Financial Statements of the Government.
The non-departmental schedules and statements have been prepared in accordance with the Government’s accounting policies as set out in the Financial Statements of the Government, and in accordance with relevant Treasury Instructions and Treasury Circulars.
Measurement and recognition rules applied in the preparation of these non-departmental schedules and statements are consistent with New Zealand generally accepted accounting practice as appropriate for public benefit entities.
The accounting policies set out below have been applied consistently to all periods presented in these financial statements.
The following particular accounting policies have been applied.
The budget figures are those included in the Ministry’s Main Estimates for the year ended 30 June 2012. In addition, these financial statements also present the updated budget information from the Supplementary Estimates.
Foreign currency transactions are translated into New Zealand dollars using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the schedule of non-departmental income or expenses.
All items in the financial statements, including appropriation statements, are stated exclusive of GST. Receivables and payables are stated on a GST inclusive basis. In accordance with Treasury instructions, GST is returned on revenue received on behalf of the Crown, where applicable. However, an input tax deduction is not claimed on non-departmental expenditure. Instead, the amount of GST applicable to non-departmental expenditure is recognised as a separate expense and eliminated against GST revenue on consolidation of the government financial statements.
Debtors and receivables are recorded at estimated realisable value, after providing for doubtful and uncollectable debts.
Future expenses and liabilities to be incurred on contracts that have been entered into at balance date are disclosed as commitments to the extent that they are equally unperformed obligations. Commitments relating to employment contracts are not disclosed.
Contingent liabilities and contingent assets are recorded in the Statement of Contingent Liabilities and Contingent Assets at the point at which the contingency is evident. Contingent liabilities are disclosed if the possibility that they will crystallise is not remote. Contingent assets are disclosed if it is probable that the benefits will be realised.
Grants
Where grants are discretionary until payment, the expense is recognised when the payment is advised. Otherwise, the expense (and corresponding liability) is recognised when the Ministry does not have discretion over the payment. For example, for grants with conditions attached, the expense/liability is recognised when the specified criteria have been fulfilled and notice has been given to the Ministry. For grants without conditions attached, the expense/liability is recognised when the Ministry has an unconditional obligation to make payment.
Other liabilities and provisions
Other liabilities and provisions are recorded at the best estimate of the expenditure required to settle the obligation. Liabilities and provisions to be settled beyond 12 months are recorded at their present value.
Investments
Where the Ministry holds a non-controlling, minority interest, the shares are valued at cost in the financial statements.
Associates are entities in which the Ministry has significant influence, but not control over their operating and financial policies. In the Ministry’s financial statements, the Ministry’s investment in associates has been valued by the equity method.
Debtors and receivables relate principally to recoveries of payments made on behalf of the Secretariat of the Pacific Environmental Programme.
Prepayments relate to the Official Development Assistance (ODA) programme.
The Ministry held the following shares as at balance date.
European Bank for Reconstruction and Development
30/06/11 |
30/06/12 |
||||||
|---|---|---|---|---|---|---|---|
At Cost |
At Net |
Type |
Number |
Share Value EUR |
Paid in Value EUR '000 |
At Net Current Value $000 |
At Cost $000 |
|
5,781 |
3,772 |
Ordinary |
1,050 |
10,500 |
3,500 |
2,432 |
5,781 |
|
5,781 |
3,772 |
Total |
2,432 |
5,781 |
|||
The European Bank for Reconstruction and Development’s authorised share capital is EUR 30 million divided into 3.000 million shares, having a face value of EUR 10,000 each. New Zealand has been allocated 1,050 shares, amounting to 0.04 percent of the Bank’s capital. The authorised share capital is divided into paid-in and callable shares. The total par value of paid-in shares is EUR 3.500 million. A contingent liability exists for EUR 7 million for uncalled share capital. The shares have been valued at cost.
Shares held in the Pacific Forum Line have been valued by the equity method as the Crown has the right to appoint a New Zealand representative to the Board of Directors. The share value at cost has therefore been adjusted to reflect the Crown’s share of any changes in the net assets of Pacific Forum Line.
The following is based on the unaudited financial statements of the Pacific Forum Line as at 31 March 2012. The audited results were not available at the time of preparing the Ministry’s financial statements.
The Ministry holds 10,000 A shares (2011: 10,000), and 4,768,000 B shares (2011: 4,768,000). This represents 22.85 percent (2011: 22.85 percent) of total Pacific Forum Line shares.
Pacific Forum Line net assets for the year ended 31 March 2012 were $1.541 million (2011: $5.122 million). The Ministry’s share of these net assets is $0.352 million
($2011: $1.170 million).
As at 30 June 2012 62,500 (2011:62,500) B Shares in Pacific Forum Line were held on behalf of the Government of Vanuatu.
Information on the Pacific Forum Line’s assets, liabilities, revenue and net result as at 31 March 2012 were not available at the time of preparing the Ministry’s financial statements.
The audit opinion was issued on 28 September 2012 on the Pacific Forum Line’s financial statements for the year ended 31 March 2012 and is available on the Pacific Forum Line’s website.
ODA under-expenditure is mainly the result of more complex contracts and grant funding arrangements taking longer than expected, and slower than expected progress arising from reduced in-country capacity.
The higher than forecast cash balance is a result of the lower than expected ODA expenditure noted above.