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Notes to the financial statements

Note 1: Statement of accounting policies

Reporting Entity

The Ministry for Culture and Heritage (the Ministry) is a government department as defined by section 2 of the Public Finance Act 1989 and is domiciled and operates in New Zealand. The relevant legislation governing the Ministry’s operations includes the Public Finance Act 1989. The Ministry’s ultimate parent is the New Zealand Crown.

In addition, the Ministry has reported on Crown activities and trust monies that it administers.

The primary objective of the Ministry is to provide services to the public rather than make a financial return. Accordingly, the Ministry has designated itself as a public benefit entity (PBE) for financial reporting purposes.

The financial statements of the Ministry are for the year ended 30 June 2015. The financial statements were authorised for issue by the Chief Executive of the Ministry on 30 September 2015.

Basis of Preparation

The financial statements have been prepared on a going concern basis, and the accounting policies have been applied consistently throughout the period.

Statement of compliance

The financial statements of the Ministry have been prepared in accordance with the requirements of the Public Finance Act 1989, which include the requirement to comply with New Zealand generally accepted accounting practice (NZ GAAP), and Treasury Instructions.

These financial statements have been prepared in accordance with Tier 2 PBE Standards and disclosure concessions have been applied. The criteria under which an entity is eligible to report in accordance with Tier 2 PBE Standards are:

  • The Ministry does not have public accountability as defined in paragraph 36 of XRB A1.
  • The Ministry is not large (where large is defined as expenses greater than $30 million in paragraph 42 of XRB A1).

These financial statements comply with PBE accounting standards.

These financial statements are the first financial statements presented in accordance with the new PBE accounting standards. There are no material adjustments arising on transition to the new PBE accounting standards.

Measurement base

The financial statements have been prepared on a historical cost basis. Some assets and liabilities are recorded at “fair value”, the amount for which an item could be exchanged or a liability settled between knowledgeable and willing parties in an arm’s-length transaction.

Functional and presentation currency

The financial statements are presented in New Zealand dollars and all values are rounded to the nearest thousand dollars ($000). The functional currency of the Ministry is New Zealand dollars.

Standards issued and not yet effective and not early adopted

In May 2013, the External Reporting Board issued a new suite of PBE accounting standards for application by public sector entities for reporting periods beginning on or after 1 July 2014. The Ministry has applied these standards in preparing the 30 June 2015 financial statements. In October 2014, the PBE suite of accounting standards was updated to incorporate requirements and guidance for the not-for-profit sector. These updated standards apply to PBEs with reporting periods beginning on or after 1 April 2015. The Ministry will apply these updated standards in preparing its 30 June 2016 financial statements. The Ministry expects there will be minimal or no change in applying these updated accounting standards.

Summary of Significant Accounting Policies

Revenue

Revenue is measured at the fair value of consideration received or receivable.

Revenue Crown

Revenue from the Crown is measured based on the Ministry’s funding entitlement for the reporting period. The funding entitlement is established by Parliament when it passes the Appropriation Acts for the financial year. The amount of revenue recognised takes into account any amendments to appropriations approved in the Appropriation (Supplementary Estimates) Act for the year and certain other unconditional funding adjustments formally approved prior to balance date.

There are no conditions attached to the funding from the Crown. However, the Ministry can incur expenses only within the scope and limits of its appropriations.

The fair value of Revenue Crown has been determined to be equivalent to the funding entitlement.

Other revenue

Other departmental and third-party revenue is predominantly derived from the undertaking of historical projects on a full cost-recovery basis, contributions to other one-off projects, and reimbursement for costs of staff on secondment to other agencies. Revenue is recognised when earned and is reported in the financial period to which it relates.

The sale of publications is recognised when the product is sold to the customer. The recorded revenue is the gross amount of the sale.

Capital charge

The capital charge is recognised as an expense in the period to which the charge relates.

Grant expenditure

Discretionary grants are those grants where the Ministry has no obligation to award on receipt of the grant application. They are recognised as expenditure when approved by the Grants Approvals Committee and the approval has been communicated to the applicant. The Ministry’s grants awarded have no substantive conditions attached.

Foreign Currency transactions

Foreign currency transactions (including those for which forward foreign exchange contracts are held) are translated into NZ$ (the functional currency) using the spot exchange rates 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 surplus or deficit.

Leases

Operating leases

An operating lease is a lease that does not transfer substantially all the risks and rewards incidental to ownership of an asset to the lessee. Lease payments under an operating lease are recognised as an expense on a straight-line basis over the lease term. Lease incentives received are recognised in the surplus or deficit as a reduction of rental expense over the lease term.

Financial instruments

Financial assets and financial liabilities are initially measured at fair value plus transaction costs, unless they are carried at fair value through surplus or deficit, in which case the transaction costs are recognised in the surplus or deficit.

Cash and cash equivalents

Cash and cash equivalents include cash on hand, deposits held at call with banks, and other short-term highly liquid investments with original maturities of three months or less.

The Ministry is only permitted to expend its cash and cash equivalents within the scope and limits of its appropriations.

Debtors and other receivables

Debtors and other receivables are recorded at their face value, less any provision for impairment. 

Impairment of a receivable is established when there is objective evidence that the Ministry will not be able to collect amounts due according to the original terms of the receivable. Significant financial difficulties of the debtor, probability that the debtor will enter into bankruptcy, receivership or liquidation, and default in payments are considered indicators that the debtor is impaired. The amount of the impairment is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted using the original effective interest rate. The carrying amount of the asset is reduced through the use of a provision for impairment account, and the amount of the loss is recognised in the surplus or deficit. Overdue receivables that are renegotiated are reclassified as current (that is, not past due).

Property, plant and equipment

Property, plant and equipment consists of the following asset classes: artwork, leasehold improvements, office furniture, office equipment, computer equipment and motor vehicles.

Property, plant and equipment is measured at cost less accumulated depreciation and impairment losses.

Individual assets, or groups of assets, are capitalised if their cost is greater than $2,000. The value of an individual asset that is less than $2,000 and is part of a group of similar assets is capitalised. In addition, information communications technology (ICT) assets that individually cost more than $1,000 each and have a useful life greater than 12 months are capitalised.

Additions

The cost of an item of property, plant and equipment is recognised as an asset only when it is probable that future economic benefits or service potential associated with the item will flow to the Ministry and the cost of the item can be measured reliably.

Work in progress is recognised at cost less impairment and is not depreciated.

In most instances, an item of property, plant or equipment is recognised at its cost. Where an asset is acquired through a non-exchange transaction, it is recognised at its fair value as at the date of acquisition.

Disposals

Gains and losses on disposals are determined by comparing the disposal proceeds with the carrying amount of the asset. Gains and losses on disposals are reported net in the surplus or deficit.

Subsequent costs

Costs incurred subsequent to initial acquisition are capitalised only when it is probable that future economic benefits or service potential associated with the item will flow to the Ministry and the cost of the item can be measured reliably.

The costs of day-to-day servicing of property, plant and equipment are recognised in the surplus or deficit as they are incurred.

Depreciation

Depreciation is provided on a straight-line basis on all property, plant and equipment, at rates that will write-off the cost (or valuation) of the assets to their estimated residual values over their useful lives. The useful lives and associated depreciation rates of major classes of assets have been estimated as follows:

Office Furniture                                              5 years                                    20%
Office Equipment                                           5 years                                    20%
Computer Equipment – PC based                 3 – 5 years                  20% - 33%
Computer Equipment – other than PCs         3 – 5 years                  20% - 33%
Works of Art                                                    100 years                    1%

Leasehold improvements are depreciated over the unexpired period of the lease or the estimated remaining useful lives of the improvements, whichever is the shorter. 

The residual value and useful life of an asset is reviewed, and adjusted if applicable, at each financial year end.

Intangible assets

Software acquisition

Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and bring into use the specific software. Software is capitalised if its cost is greater than $2,000.

Costs associated with maintaining computer software are recognised as expenses when incurred.

Staff training costs are recognised as expenses when incurred.

Costs of software updates or upgrades are only capitalised when they increase the usefulness or value of the software.

Costs associated with development and maintenance of the Ministry’s websites are recognised as an expense when incurred.

Amortisation

The carrying value of an intangible asset with a finite life is amortised on a straight-line basis over its useful life. Amortisation begins when the asset is available for use and ceases at the date that the asset is derecognised. The amortisation charge for each period is recognised in the surplus or deficit.

The useful lives and associated amortisation rates of major classes of intangible assets have been estimated as follows:

Acquired Computer Software             3 years                        33%

Impairment of property, plant and equipment, and intangible assets

The Ministry does not hold any cash-generating assets. Assets are considered cash-generating where their primary objective is to generate a commercial return.

Non-cash generating assets

Property, plant and equipment and intangible assets held at cost that have a finite useful life are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An

impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable service amount. The recoverable service amount is the higher of an asset’s fair value less costs to sell and value in use.

Value in use is depreciated replacement cost for an asset where future economic benefits or service potential of the asset are not primarily dependent on the asset’s ability to generate net cash inflows and where the Ministry would, if deprived of the asset, replace its remaining future economic benefits or service potential.

If an asset’s carrying amount exceeds its recoverable amount, the asset is impaired and the carrying amount is written down to the recoverable amount. The impairment loss is recognised in the surplus or deficit. The reversal of an impairment loss is also recognised in the surplus or deficit.

Creditors and other payables

Creditors and other payables are non-interest bearing and are normally settled on 30-day terms. Creditors and other payables are recorded at their face value.

Employee entitlements

Short-term employee entitlements

Employee entitlements expected to be settled within 12 months of balance date are measured at nominal values based on accrued entitlements at current rates of pay.

These include salaries and wages accrued up to balance date, annual leave and time off in lieu earned but not yet taken at balance date, and retiring and long service leave entitlements expected to be settled within 12 months.

A liability and an expense are recognised for bonuses where the Ministry has a contractual obligation or where there is a past practice that has created a constructive obligation.

Long-term employee entitlements

Employee entitlements that are due to be settled beyond 12 months after the end of the reporting period in which the employee renders the related service, such as long service leave and retiring leave, are calculated on an actuarial basis. The calculations are based on:

  • likely future entitlements accruing to staff, based on years of service, years to entitlement, the likelihood that staff will reach the point of entitlement, and contractual entitlements information; and
  • the present value of the estimated future cash flows.

Expected future payments are discounted using market yields on government bonds at balance date with terms to maturity that match, as closely as possible, the estimated future cash outflows for entitlements. The inflation factor is based on the expected long-term increase in remuneration for employees. The Ministry uses the risk-free discount rates and consumer price index assumptions published annually by The Treasury.

Presentation of employee entitlements

Annual leave, long service leave and retirement gratuities expected to be settled within 12 months of balance date are classified as a current liability. All other employee entitlements are classified as a non-current liability.

The Ministry does not recognise any provision for sick leave as employees are not entitled to accrue sick leave during their period of employment.

Superannuation schemes

Defined contribution schemes

Obligations for contributions to the State Sector Retirement Savings Scheme, Kiwisaver, Global Retirement Trust Superannuation and Government Superannuation Fund are accounted for as defined contribution schemes and are recognised as an expense in the surplus or deficit as incurred.

Equity

Equity is the Crown’s investment in the Ministry and is measured as the difference between total assets and total liabilities. Equity is classified as taxpayers’ funds.

Commitments

Expenses yet to be incurred on non-cancellable contracts that have been entered into on or before balance date are disclosed as commitments to the extent that there are equally unperformed obligations. Information on non-cancellable capital and lease commitments are reported in the statement of commitments.

Cancellable commitments that have penalty or exit costs explicit in the agreement on exercising that option to cancel are included in the statement of commitments at the lower of the remaining contractual commitment and the value of that penalty or exit cost.

Goods and services tax

All items in the financial statements, including appropriation statements, are stated exclusive of goods and service tax (GST), except for receivables and payables,

which are stated on a GST-inclusive basis. Where GST is not recoverable as input tax, then it is recognised as part of the related asset or expense.

The net amount of GST recoverable from, or payable to, the Inland Revenue Department (IRD) is included as part of receivables or payables in the statement of financial position.

The net GST paid to, or received from the IRD, including the GST relating to investing and financing activities, is classified as an operating cash flow in the statement of cash flows.

Commitments and contingencies are disclosed exclusive of GST.

Income tax    

Government departments are exempt from income tax as public authorities. Accordingly, no provision has been made for income tax.

Statement of cost accounting policies

The Ministry has determined the cost of outputs using the cost allocation system outlined below.

Direct costs are those directly attributed to an output. Indirect costs are those that cannot be identified in an economically feasible manner with a specific output.

Direct costs are charged directly to outputs. Indirect costs are allocated to outputs through a two-stage process. The costs are assigned to cost centres within the Ministry, and then allocated to outputs on the basis of the direct staff costs attributable to the outputs of that cost centre. Depreciation and capital charge are allocated on the basis of asset utilisation. Personnel costs are charged directly to the cost centre within the output to which they belong and at the time they were incurred.

There have been no changes in cost accounting policies, since the date of the last audited financial statements.

Critical accounting estimates and assumptions

In preparing these financial statements, estimates and assumptions have been made concerning the future. These estimates and assumptions may differ from the subsequent actual results. Estimates and assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. There are no estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

Critical judgements in applying accounting policies

Management has exercised the following critical judgements in applying accounting policies for the year ended 30 June 2015.

Operating leases

Determining whether a lease agreement is a finance lease or an operating lease requires judgement as to whether the agreement transfers substantially all the risks and rewards of ownership to the Ministry. Judgement is required on various aspects that include, but are not limited to, the fair value of the leased asset, the economic life of the leased asset, whether or not to include renewal options in the lease term, and determining an appropriate discount rate to calculate the present value of the minimum lease payments. Classification as a finance lease means the asset is recognised in the statement of financial position as property, plant and equipment, whereas with an operating lease no such asset is recognised. The Ministry has exercised its judgement on the appropriate classification of equipment leases, and has determined all lease arrangements to be operating leases.

Budget and forecast figures

Basis of the budget and forecast figures

The budget figures are those included in the Information Supporting the Estimates of Appropriations (Budget) for the year ending 30 June 2015 and the Supplementary Estimates of Appropriations (Revised Budget) for the year ending 30 June 2015. The Budget is 2014 Budget Economic and Fiscal Update (BEFU 2014) and the Revised Budget is SUPPS 2015.

The forecast figures are those included in the Estimates of Appropriations for the year ending 30 June 2016. The Forecast is 2015 Budget and Economic and Fiscal Update (BEFU 2015).

The forecast financial statements have been prepared as required by the Public Finance Act to communicate forecast financial information for accountability purposes.

The budget and forecast figures are unaudited and have been prepared using the accounting policies adopted in preparing these financial statements.

The 30 June 2016 forecast figures have been prepared in accordance with PBE FRS 42 Prospective Financial Statements and comply with PBE FRS 42.

The forecast financial statements were approved for issue by the Chief Executive on 7 April 2015. The Chief Executive is responsible for the forecast financial statements, including the appropriateness of the assumptions underlying them and all other required disclosures.

While the Ministry regularly updates its forecasts, updated forecast financial statements for the year ended 30 June 2016 will not be published.

Significant assumptions used in preparing the forecast financials

The forecast figures contained in these financial statements reflect the Ministry’s purpose and activities and are based on a number of assumptions on what may occur during the 2015/16 year. The forecast figures have been compiled on the basis of existing government policies and Ministerial expectations at the time the Main Estimates were finalised.

The main assumptions, which were adopted as at 7 April 2015, were as follows:

  • The Ministry’s activities and output expectations will remain substantially the same as the previous year focusing on the Government’s priorities.
  • Operating costs were based on historical experience and other factors that are believed to be reasonable in the circumstances and are the Ministry’s best estimate of future costs that will be incurred. Remuneration rates are based on current wages and salary costs, adjusted for anticipated remuneration changes.
  • Estimated year-end information for 2014/15 was used as the opening position for the 2015/16 forecasts.

The actual financial results achieved for 30 June 2016 are likely to vary from the forecast information presented, and the variations may be material.

Since the approval of the forecasts, there have been no significant changes or events that would have a material impact on the forecasts.

Note 2: Other Revenue

 

Actual

  2014

$000

Actual
2015

$000

Forecast

2016

$000

Publication sales/royalties

16

16

Non Crown revenue – WW100

533

903

1,497

Other revenue

317

211

80

Total other revenue

866

1,130

1,577

Note 3: Personnel costs

 

Actual

  2014

$000

Actual
2015

$000

Forecast

2016

$000

Salaries and wages

11,131

10,514

10,772

Training and development

151

112

150

Employer contributions to defined contribution plans

368

343

383

Other personnel costs

66

138

156

Total personnel costs

11,716

11,107

11,461

Employer contributions to defined contribution plans include contributions to the State Sector Retirement Savings Scheme, Kiwisaver, Global Retirement Trust Superannuation and Government Superannuation Fund. The Ministry had 115 full-time equivalent (FTE) positions (including vacancies) at 30 June 2015 (2014: 117).

Note 4: Other operating expenses

 

Actual

  2014

$000

Actual
2015

$000

Forecast

2016

$000

Fees to auditor

 

 

 

- fees to Audit New Zealand for audit of financial statements

57

58

 

59

- fees to Audit New Zealand for other services

Rental and leasing expenses*

413

1,114

1,792

Other occupancy expenses

1,265

226

310

Publicity and research

2,871

216

538

Professional and specialist services – Consultancy

1,794

1,860

956

Professional and specialist services - Contractors

651

1,526

910

Travel and associated expenses

405

315

322

Information communication technology

851

546

704

Transfer to agencies**

260

4,662

900

 

 

 

 

Other operating expenses

327

478

269

Total operating expenses

8,894

11,001

6,760

* Leasing expenses include lease costs for ASB House and The Dominion Museum building. The Ministry has occupied ASB House from 1 April 2012, with the lease term expiring on 31 October 2015. The Ministry has entered into a 4 year lease of the Dominion Museum Building, with the lease term beginning on 1 December 2014 and expiring on 30 November 2018.

** Transfers to agencies includes Cultural Diplomacy International Programme agencies.

Note 5: Property, plant and equipment

Computer
equipment

$000

Office equipment

$000

Office furniture

$000

Leasehold improvements
$000

Vehicles

$000

Works
of art

$000

Total

$000

Cost

 

 

 

 

 

 

 

Balance at 1 July 2013

537

151

414

311

262

21

1,696

Additions

271

-

-

-

-

-

271

Disposals

(73)

(3)

(49)

-

(262)

-

(387)

Balance at 30 June and
1 July 2014

735

148

365

311

-

21

1,580

Additions

34

-

-

-

-

-

34

Disposals

(243)

(88)

-

-

-

-

(331)

Work in progress

-

-

-

63

-

-

63

Balance at 30 June 2015

526

60

365

374

-

21

1,346

Accumulated depreciation and impairment losses

 

 

 

 

 

Balance at 1 July 2013

389

131

404

150

108

2

1,184

Depreciation expense

105

7

4

119

23

-

258

Elimination on disposal

(64)

(3)

(49)

-

(131)

-

(247)

Balance at 30 June and
1 July 2014

430

135

359

269

-

2

1,195

Depreciation expense

107

6

3

42

-

-

158

Elimination on disposal

(242)

(85)

-

-

-

-

(327)

Balance at 30 June 2015

295

56

362

311

-

2

1,026

Carrying amounts

 

 

 

 

 

 

 

At 1 July 2013

148

20

10

161

154

19

512

At 30 June and 1 July 2014

305

13

6

42

-

19

385

At 30 June 2015

231

4

3

63

-

19

320

Leasehold improvements in the course of construction total $63,000 (2014: nil). No other asset classes have assets in the course of construction.

There are no restrictions over the title of the Ministry’s assets. No assets are pledged as security for liabilities.

Note 6: Capital charge

The Ministry pays a capital charge to the Crown on its equity (adjusted for memorandum accounts) as at 30 June and 31 December each year. The capital charge rate for the year ended 30 June 2015 was 8% (2014: 8%).

Note 7: Debtors and other receivables

 

Actual

  2014

$000

Actual
2015

$000

Trade debtors

646

102

Total debtors and other receivables

646

102

Total receivables comprise of exchange transactions.

The carrying value of debtors and other receivables approximates their fair value.

Ageing profile of receivables

All of the Ministry’s debtors and other receivables are current (within 30 days) except for debtors to the value of $16,870.26 which are between 30 and 90 days old (2014: all current except for debtors to the value of $40,691.90 which were between 60 and 90 days old).

Impairment of receivables

The Ministry has assessed that no provision for impairment is required as no losses are expected for the Ministry’s pool of debtors.

Note 8: Creditors and other payables

 

Actual

  2014

$000

Actual
2015

$000

Payables and deferred revenue under exchange transactions

 

 

Trade creditors

378

836

Accrued expenses

861

355

Total payables and deferred revenue under exchange transactions

1,239

1,191

Payables and deferred revenue under non-exchange transactions

 

 

GST payable

(21)

153

PAYE payable

143

207

Deferred Revenue

3,502

Total payables and deferred revenue

1,361

5,053

Creditors and other payables are non-interest bearing and are normally settled on 30-day terms. Therefore, the carrying value of creditors and other payables approximates their fair value.

Note 9: Return of operating surplus

The net surplus for 2014 is based on the net surplus reported in the Ministry’s 2014 Annual Report and has not been adjusted for changes arising from the transition to the new PBE accounting standards.

The return of operating surplus to the Crown is required to be paid by 31 October of each year. The total surplus to be returned is $1,435,000 (2014: $662,000) as per the Statement of Comprehensive Revenue and Expense.

The net surplus for 2014 is based on the net surplus reported in the Ministry’s 2014 Annual Report and has not been adjusted for changes arising from the transition to the new PBE accounting standards.

The return of operating surplus to the Crown is required to be paid by 31 October of each year. The total surplus to be returned is $1,435,000 (2014: $662,000) as per the Statement of Comprehensive Revenue and Expense.

Note 10: Employee entitlements

 

Actual

  2014

$000

Actual
2015

$000

Current portion

 

 

Annual leave

493

611

Long service leave

51

40

Total current portion

544

651

Non-current portion

 

 

Long service leave

51

42

Retirement leave

25

30

Total non-current portion

76

72

Total employee entitlements

620

723

The measurement of the long service and retirement leave obligations depends on a number of factors that are determined on an actuarial basis using a number of assumptions. Two key assumptions used in calculating this liability include the discount rate and the salary inflation factor. Any changes in these assumptions will affect the carrying amount of the liability.

The discount rate is based on New Zealand government bond data at 30 June 2015. The salary inflation factor has been determined after considering historical patterns and after obtaining advice from an independent actuary. The Ministry uses the risk-free discount rates and consumer price index assumptions published annually by The Treasury.

If the discount rate were to differ by 1% from the Ministry’s estimates, with all other factors held constant, the carrying amount of the liability would be an estimated $4,600 higher/lower.

If the salary inflation factor were to differ by 1% from the Ministry’s estimates, with all other factors held constant, the carrying amount of the liability would be an estimated $5,000 higher/lower.

Discount rates and salary inflation applied:

Employee entitlement variables

2015

%

2016

%

2017

%

Discount rates

2.93

2.81

4.39

Salary inflation

1.50

3.00

3.00

Note 11: Related party transactions

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. All related party transactions have been entered into on an arm’s length basis.

Related party disclosures have not been made for transactions with related parties that are within a normal supplier or client/recipient relationship on terms and conditions no more or less favourable than those that it is reasonable to expect the Ministry would have adopted in dealing with the party at arm’s length in the same circumstances. Further, transactions with other government agencies (for example, government departments and Crown entities) are not disclosed as related party transactions when they are consistent with the normal operating arrangements between government agencies and undertaken on the normal terms and conditions for such transactions.

Significant transactions with government-related entities

The Ministry has received funding from the Crown of $22.713 million (2014: $20.809 million) to provide services to the public for the year ended 30 June 2015.

Transactions with key management personnel and their close family members

Key management personnel compensation

 

Actual

  2014

$000

Actual
2015

$000

Salaries and other short-term employee benefits

955

1,018

Other long-term benefits

3

3

Total key management personnel compensation

958

1,021

Key management personnel of the Ministry comprise the Minister for Arts, Culture and Heritage, the Minister of Broadcasting, the Minister for Sport and Recreation, the Chief Executive, and the four members of the Ministry Leadership Team.

The above key management personnel compensation excludes the remuneration and other benefits the Minister for Arts, Culture and Heritage, the Minister of Broadcasting, and the Minister for Sport and Recreation receives. The Ministers’ remuneration and other benefits are not received only for their role as a member of key management personnel of the Ministry. The Ministers’ remuneration and other benefits are set by the Remuneration Authority under the Civil List Act 1979 and are paid under Permanent Legislative Authority, and not paid by the Ministry.

There are two close family members of key management personnel employed by the Ministry. The terms and conditions of these arrangements are no more favourable than the Ministry would have adopted if there were no relationship to key management personnel.

Note 12: Financial instrument categories

The carrying amounts of financial assets and financial liabilities in each of the financial instrument categories are as follows:

 

Actual

  2014

$000

Actual
2015

$000

Loans and receivables

 

 

Cash and cash equivalents

2,951

4,333

Debtors and other receivables

646

102

Total loans and receivables

3,597

4,435

Financial liabilities measured at amortised cost

 

 

Creditors and other payables

1,361

5,053

Note 13: Explanation of major variances against budget

Explanations for major variances from the Ministry’s budgeted figures in the Information Supporting the Estimates are as follows:

Statement of comprehensive income

Crown Revenue

Crown revenue was $5.262 million higher than originally budgeted due to transfers of WW100 funding brought forward to 2014/15 from out years.

Other operating expenses

Other operating expenses were $2.821 million higher than budget due to the timing of projects, including First World War commemorations.

Statement of financial position

Cash and cash equivalents

Cash and cash equivalents were $1.545 million greater than budget due the surplus of $1.475 million.

Prepayments

Prepayments were $3.709 million higher than originally budgeted due to a large prepayment of rent.

Creditors and other payables

Creditors and other payables is $3.753 million higher than originally budgeted due to revenue drawn down in advance for the prepayment of rent.

Statement of cash flows

Receipts from the Crown were $8.764 million greater than budget due to the unexpected need to pay rental in advance, the bringing forward of revenue related to WW100 projects and transfers from 2013/14 into 2014/15.

Note 14: Events after the balance date

No event has occurred since the end of the financial period (not otherwise dealt with in the financial statements) that has affected, or may significantly affect, the Ministry’s operations or state of affairs for the year ended 30 June 2015.

Note 15: Adjustments arising on transition to the new PBE accounting standards

Reclassification adjustments

There have been no reclassifications on the face of the financial statements in adopting the new PBE accounting standards.

Recognition and measurement adjustments

There have been no recognition and measurement adjustments on the face of the financial statements in adopting the new PBE accounting standards.


 


Updated on 3rd December 2015