Statement of Performance Expectations - NZTE · Our purpose is simple: to grow companies internationally — bigger, better, faster — for the benefit of New Zealand. OUr in-MarKet

2016/2017

G45 SPE (2016)

Statement ofPerformanceExpectations

ISSN 2382-0519© Copyright New Zealand Trade and Enterprise (NZTE) 2016.

This work is licensed under the Creative Commons Attribution 3.0 New Zealand licence. In essence, you are free to copy, distribute and adapt the work, as long as you attribute the work to the Crown and abide by the other licence terms. To view a copy of this licence, visit http://creativecommons.org/ licenses/by/3.0/nz/. Please note that no departmental or governmental emblem, logo or Coat of Arms may be used in any way which infringes any provision of the Flags, Emblems, and Names Protection Act 1981. Attribution to the Crown should be in written form and not by reproduction of any such emblem, logo or Coat of Arms. June 2016

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305419 NZTE SPE 2016 wake CMYK Grayfix Cover v2.pdf - page 1 of 2

Our purpose is simple: to grow companies internationally — bigger, better, faster — for the benefit of New Zealand.

OUr in-MarKet sUppOrt

7 Regions

39 Languages

41 International locations

240 Private sector advisors

260 Offshore NZTE employees

Mumbai

Riyadh

Abu Dhabi

New Delhi

Sydney

Brisbane

Melbourne

Hong

Vancouver

Los Angeles

San FranciscoNew York

Washington DC

Santiago

Sao Paulo

Mexico City

Kuala Lumpur

Singapore

Ho ChiMinh City

ManilaBangkok

ShenzhenGuangzhou

Shanghai

Chengdu

Seoul Tokyo

Beijing

KongTaipei

Jakarta

LondonParis

IstanbulMadrid

Milan

Dubai

Tehran

Hamburg

Moscow

Auckland

New Zealand o�ces

TaurangaHamilton

Napier

Wellington

Christchurch

Dunedin

Nelson

Palmerston North

New PlymouthPort Moresby

Bogota

INDIA, MIDDLE EAST AND AFRICA

EUROPE

GREATER CHINA

EAST ASIA

AUSTRALIA AND THE PACIFIC

SOUTH AMERICA

NORTH AMERICA

nzte stateMent OF perFOrManCe eXpeCtatiOns 2016/2017 28




305419 NZTE SPE 2016 wake CMYK Text v3.pdf - page 1 of 28

Contents

04

07

18

02

06

17

05

09

23

27

How we carry out our strategy

Our Performance Measurement Framework

Prospective Financial Statements for the Year Ending 30 June 2017

Setting the scene

Measuring and evaluating our performance

Consultation and reporting

What we will focus on in 2016/17

Statement of Performance Expectations

Accounting Policies

NZTE’s International Network

Contents

04

07

18

02

06

17

05

09

23

27

How we carry out our strategy


Prospective Financial Statements for the Year Ending 30 June 2017

Setting the scene



What we will focus on in 2016/17

Statement of Performance Expectations

Accounting Policies



New Zealand Trade and Enterprise is the Government’s international business development agency. Our light on the hill is the Government’s Business Growth Agenda (BGA), which points us towards a diversified economy, by adding value to volume and increasing our international connections. The BGA’s goal is to increase exports from 30% to 40% of GDP by 2025. From this, NZTE has a clear purpose: to grow companies internationally — bigger, better, faster — for the benefit of New Zealand. We have sharpened our focus by setting ourselves a ‘Greatest Imaginable Challenge’: to double the international revenue of our high intensity customer portfolio (Focus 700) by 2025.

In today’s market, New Zealand companies need to be competitive on a global scale. Market entry is tough, and scale and distance remain significant challenges to businesses. New Zealand has too few scaled up companies and investable propositions to take advantage of both market opportunities and global capital. This results in significant bottlenecks for growth.

However, fundamentally, there is a positive story for the economy and New Zealand’s exporters. At NZTE,

we are seeing companies pushing out into international markets, bolstered by lower exchange rates. We are seeing diversification of both products and services being offered, specifically in the added value food and beverage, ICT, education and tourism sectors. Alongside this, there is a diversification of markets, with ASEAN building momentum; new opportunities are emerging in the Gulf States, Iran and Africa; and South America and the US are strengthening.

In 2014/15, as part of the BGA, the government committed an additional investment of $69m, targeted at increasing the number of companies we work with and growing our international network. We have now completed our international footprint expansion to support our customers in market, boosting our presence in regions such as South America, Australia, Saudi Arabia, and China. We have succeeded in growing our high intensity portfolio from 500 to 700. Now this expansion is complete, it is time to consolidate and concentrate on our next performance lift.

NZTE has a clear path ahead. We will relentlessly focus on the international growth of our trade customers, providing know-how and know-who, connections and wraparound services. Working with

our investment customers, we will match capital with opportunity. We will increase catalytic investment by continuing to scale up our efforts in attracting and matching quality investment.

NZTE is committed to helping our companies take on the world. We are passionate about accelerating the growth of our internationalising customers, for the benefit of all New Zealanders.

Setting the scene

Charles Finny NZTE Board

Andrew Ferrier Chair, NZTE Board

Peter Chrisp Chief Executive, NZTE

NZTE STATEMENT OF PERFORMANCE EXPECTATIONS 2016/2017 2

New Zealand Trade and Enterprise is the Government’s international business development agency. Our light on the hill is the Government’s Business Growth Agenda (BGA), which points us towards a diversified economy, by adding value to volume and increasing our international connections. The BGA’s goal is to increase exports from 30% to 40% of GDP by 2025. From this, NZTE has a clear purpose: to grow companies internationally — bigger, better, faster — for the benefit of New Zealand. We have sharpened our focus by setting ourselves a ‘Greatest Imaginable Challenge’: to double the international revenue of our high intensity customer portfolio (Focus 700) by 2025.

In today’s market, New Zealand companies need to be competitive on a global scale. Market entry is tough, and scale and distance remain significant challenges to businesses. New Zealand has too few scaled up companies and investable propositions to take advantage of both market opportunities and global capital. This results in significant bottlenecks for growth.

However, fundamentally, there is a positive story for the economy and New Zealand’s exporters. At NZTE,

we are seeing companies pushing out into international markets, bolstered by lower exchange rates. We are seeing diversification of both products and services being offered, specifically in the added value food and beverage, ICT, education and tourism sectors. Alongside this, there is a diversification of markets, with ASEAN building momentum; new opportunities are emerging in the Gulf States, Iran and Africa; and South America and the US are strengthening.

In 2014/15, as part of the BGA, the government committed an additional investment of $69m, targeted at increasing the number of companies we work with and growing our international network. We have now completed our international footprint expansion to support our customers in market, boosting our presence in regions such as South America, Australia, Saudi Arabia, and China. We have succeeded in growing our high intensity portfolio from 500 to 700. Now this expansion is complete, it is time to consolidate and concentrate on our next performance lift.

NZTE has a clear path ahead. We will relentlessly focus on the international growth of our trade customers, providing know-how and know-who, connections and wraparound services. Working with

our investment customers, we will match capital with opportunity. We will increase catalytic investment by continuing to scale up our efforts in attracting and matching quality investment.

NZTE is committed to helping our companies take on the world. We are passionate about accelerating the growth of our internationalising customers, for the benefit of all New Zealanders.

Setting the scene

Charles Finny NZTE Board

Andrew Ferrier Chair, NZTE Board

Peter Chrisp Chief Executive, NZTE



BuSINESS GROwTh AGENdA

dIGITAl kNOwlEdGE PlATFORM

PARTNERShIP wITh NZ INC

RIGhT SERvICE, RIGhT TIME, RIGhT PlACE

GROwING COMPANIES; ONE-ON-ONE ANd IN COAlITIONS

MATChING CAPITAlwITh OPPORTuNITY

OuR PEOPlE

GROw COMPANIES INTERNATIONAllY

BIGGER, BETTER, FASTER FOR ThE BENEFIT OF NEw ZEAlANd

NZTE STATEMENT OF PERFORMANCE EXPECTATIONS 2016/20173


dIGITAl kNOwlEdGE PlATFORM

PARTNERShIP wITh NZ INC

RIGhT SERvICE, RIGhT TIME, RIGhT PlACE

GROwING COMPANIES; ONE-ON-ONE ANd IN COAlITIONS

MATChING CAPITAlwITh OPPORTuNITY

OuR PEOPlE

GROw COMPANIES INTERNATIONAllY

BIGGER, BETTER, FASTER FOR ThE BENEFIT OF NEw ZEAlANd



how we carry out our strategy

Keeping the BGA within our sights, our strategy to grow companies internationally uses two overlapping operating models for our two sets of customers:

• The Customer Way: We work with our trade customers by growing companies one-on-one and in coalitions

• The Capital Way: We work with our investment customers by matching capital with opportunity

Through the Customer Way, we engage intensively one-on-one with our Focus 700 (F700) customers, which are companies that have the aspiration and the capability to compete internationally, and where we can deliver the biggest impact. In keeping with the BGA diversification strategy, we actively segment in those companies offering knowledge intensive, value-adding premium products and services, and in particular, early stage ICT, Māori and high value food and beverage companies.

In the same way that we engage with our F700, we support business-led, go-to-market coalitions. These are groups of companies focused on international growth who collaborate to create scale and compete internationally.

We work with another 3,000 customers (our Foundation customers) using a lighter touch engagement, providing information about particular markets or connections. Through our Regional Business Partner Network, we aim to strengthen the pipeline of future exporting businesses across

New Zealand with advice and training to lift management capability and support business growth.

The Capital Way is our operating model for our investment customers, focused on matching capital with opportunities. This is a newer area of activity for NZTE, and is evolving rapidly. NZTE is a major contributor to the BGA Investment workstream, which has a key priority to support and attract investment to accelerate growth throughout New Zealand.

To match quality investment with opportunities, we identify and develop New Zealand investment opportunities in target sectors and regions. To help companies prepare for capital, we work with them to build capability and investment readiness. Then, we connect them with investors identified through our networks internationally and in New Zealand.

Alongside our own activity, we also work collaboratively with other New Zealand agencies as part of the Investment Attraction Taskforce, which, as part of the BGA, is implementing the Government’s revised New Zealand Investment Attraction Strategy. The Investment Attraction Taskforce is a coordinated approach to overcome barriers to investment and to develop a pipeline of investable opportunities.

Three enabling platforms are fundamental in delivering our strategy: our people, our technology and our NZ Inc partners. The performance of our people and building their capability, supported by a fast, intuitive and secure digital platform is vital to adding value to our customers.

In addition to engaging with our NZ Inc partners as part of the Investment Attraction Taskforce, we work closely on areas such as G2G Know-How, the New Zealand Story, the Te Hono bootcamps, and delivering actions under the BGA. We are committed to continuing our strong NZ Inc engagement to contribute to the Government’s priorities and deliver real impact over time.


how we carry out our strategy

Keeping the BGA within our sights, our strategy to grow companies internationally uses two overlapping operating models for our two sets of customers:

• The Customer Way: We work with our trade customers by growing companies one-on-one and in coalitions

• The Capital Way: We work with our investment customers by matching capital with opportunity

Through the Customer Way, we engage intensively one-on-one with our Focus 700 (F700) customers, which are companies that have the aspiration and the capability to compete internationally, and where we can deliver the biggest impact. In keeping with the BGA diversification strategy, we actively segment in those companies offering knowledge intensive, value-adding premium products and services, and in particular, early stage ICT, Māori and high value food and beverage companies.

In the same way that we engage with our F700, we support business-led, go-to-market coalitions. These are groups of companies focused on international growth who collaborate to create scale and compete internationally.

We work with another 3,000 customers (our Foundation customers) using a lighter touch engagement, providing information about particular markets or connections. Through our Regional Business Partner Network, we aim to strengthen the pipeline of future exporting businesses across

New Zealand with advice and training to lift management capability and support business growth.

The Capital Way is our operating model for our investment customers, focused on matching capital with opportunities. This is a newer area of activity for NZTE, and is evolving rapidly. NZTE is a major contributor to the BGA Investment workstream, which has a key priority to support and attract investment to accelerate growth throughout New Zealand.

To match quality investment with opportunities, we identify and develop New Zealand investment opportunities in target sectors and regions. To help companies prepare for capital, we work with them to build capability and investment readiness. Then, we connect them with investors identified through our networks internationally and in New Zealand.

Alongside our own activity, we also work collaboratively with other New Zealand agencies as part of the Investment Attraction Taskforce, which, as part of the BGA, is implementing the Government’s revised New Zealand Investment Attraction Strategy. The Investment Attraction Taskforce is a coordinated approach to overcome barriers to investment and to develop a pipeline of investable opportunities.

Three enabling platforms are fundamental in delivering our strategy: our people, our technology and our NZ Inc partners. The performance of our people and building their capability, supported by a fast, intuitive and secure digital platform is vital to adding value to our customers.

In addition to engaging with our NZ Inc partners as part of the Investment Attraction Taskforce, we work closely on areas such as G2G Know-How, the New Zealand Story, the Te Hono bootcamps, and delivering actions under the BGA. We are committed to continuing our strong NZ Inc engagement to contribute to the Government’s priorities and deliver real impact over time.



what we will focus on in 2016/17

In 2016/17, we are embarking on our next performance lift with an ambitious work programme.

In February 2015, we underwent a positive Performance Improvement Framework (PIF) review, with reviewers noting, “NZTE has enabled a focused, fast-paced and very effective transformation involving every aspect of the business”. The review also gave us a clear view of what we needed to attain the next lift in performance. In 2015/16 we embedded the many changes we made during our transformation in the last four years, and planned our next phase of growth. It is now time for NZTE to evolve, and begin the climb to the next level of performance.

‘Ascent’ is our new three year improvement programme, which sets out clear priorities to enable us to achieve our Greatest Imaginable Challenge of doubling the F700’s international revenue by 2025. Ascent focuses on further improvements to our business operations to deliver better impact for our customers, which will be enabled by internal focus on a culture of expertise, leveraging knowledge and giving our employees freedom to act.

In particular, in 2016/17, NZTE will focus on the following areas:

Increase catalytic investment

Through the Capital Way, we will lift quality investment into target sectors where we have identified and developed opportunities. These target sectors are: infrastructure, primary production, ICT, high tech manufacturing, food and beverage manufacturing, commercial services, and oil and gas. We will focus on

building a healthy flow of quality investment through our deal pipeline. To ensure that more of our F700 have support to access capital, we will further integrate our customer and capital services. In addition, the Investment Attraction Taskforce provides us with the opportunity to work with our NZ Inc partners to attract high quality foreign direct investment into New Zealand.

Relentless focus on growth

We will more actively manage our portfolio of value added companies (F700), and simplify and strengthen our customer engagements to maximise international growth outcomes. We will reassess our value proposition to clarify the support available for our different customer segments, particularly Foundation customers. Our market strategies will focus on international regions where there is a concentrated group of customers aligned with similar market opportunities. We’ll focus our resources and enrich our market offering to create greater impact across these customers.

Deliver breakthrough customer experiences

Evolving with our customers to meet their changing growth needs, we will continue to innovate our service offering, examining different models and optimal ways to deliver our services. We will make our service suite clearer for all of our customers, empower international teams to develop and deliver services needed for their market, and explore providing one-to-many and self-service options, such as Export 101, to make exporting guidance available to all companies. In addition, we’ll build the capability

of our Regional Business Partners and ensure that they better target and support Māori.

Delivering with NZ Inc

While these improvements will involve engaging with other NZ Inc agencies, we will also work with other agencies on the following:

• continue to support the BGA, particularly the export and investment work streams, the sub-themes of diversification and adding value-to-volume, and supporting leadership of the BGA

• increase the commercialisation of government knowledge through G2G Know-How

• invest in the New Zealand Story as a comprehensive and compelling narrative to support the successes of New Zealand businesses on the world stage

• continue to support and engage Māori business through our Māori business strategy and enable greater regional outreach

• continue our club funding and commitment to the Better for Business (Result 9) agenda

• use knowledge gained through working with customers to inform wider policy development

• work with MFAT to identify and resolve non-tariff measures affecting the growth of exporters

• work with Callaghan Innovation to build the pipeline of customers between NZTE and Callaghan to increase export opportunities

It’s time for the next stage in our improvement journey. We are up for the challenge.


what we will focus on in 2016/17

In 2016/17, we are embarking on our next performance lift with an ambitious work programme.

In February 2015, we underwent a positive Performance Improvement Framework (PIF) review, with reviewers noting, “NZTE has enabled a focused, fast-paced and very effective transformation involving every aspect of the business”. The review also gave us a clear view of what we needed to attain the next lift in performance. In 2015/16 we embedded the many changes we made during our transformation in the last four years, and planned our next phase of growth. It is now time for NZTE to evolve, and begin the climb to the next level of performance.

‘Ascent’ is our new three year improvement programme, which sets out clear priorities to enable us to achieve our Greatest Imaginable Challenge of doubling the F700’s international revenue by 2025. Ascent focuses on further improvements to our business operations to deliver better impact for our customers, which will be enabled by internal focus on a culture of expertise, leveraging knowledge and giving our employees freedom to act.

In particular, in 2016/17, NZTE will focus on the following areas:

Increase catalytic investment

Through the Capital Way, we will lift quality investment into target sectors where we have identified and developed opportunities. These target sectors are: infrastructure, primary production, ICT, high tech manufacturing, food and beverage manufacturing, commercial services, and oil and gas. We will focus on

building a healthy flow of quality investment through our deal pipeline. To ensure that more of our F700 have support to access capital, we will further integrate our customer and capital services. In addition, the Investment Attraction Taskforce provides us with the opportunity to work with our NZ Inc partners to attract high quality foreign direct investment into New Zealand.

Relentless focus on growth

We will more actively manage our portfolio of value added companies (F700), and simplify and strengthen our customer engagements to maximise international growth outcomes. We will reassess our value proposition to clarify the support available for our different customer segments, particularly Foundation customers. Our market strategies will focus on international regions where there is a concentrated group of customers aligned with similar market opportunities. We’ll focus our resources and enrich our market offering to create greater impact across these customers.

Deliver breakthrough customer experiences

Evolving with our customers to meet their changing growth needs, we will continue to innovate our service offering, examining different models and optimal ways to deliver our services. We will make our service suite clearer for all of our customers, empower international teams to develop and deliver services needed for their market, and explore providing one-to-many and self-service options, such as Export 101, to make exporting guidance available to all companies. In addition, we’ll build the capability

of our Regional Business Partners and ensure that they better target and support Māori.

Delivering with NZ Inc

While these improvements will involve engaging with other NZ Inc agencies, we will also work with other agencies on the following:

• continue to support the BGA, particularly the export and investment work streams, the sub-themes of diversification and adding value-to-volume, and supporting leadership of the BGA

• increase the commercialisation of government knowledge through G2G Know-How

• invest in the New Zealand Story as a comprehensive and compelling narrative to support the successes of New Zealand businesses on the world stage

• continue to support and engage Māori business through our Māori business strategy and enable greater regional outreach

• continue our club funding and commitment to the Better for Business (Result 9) agenda

• use knowledge gained through working with customers to inform wider policy development

• work with MFAT to identify and resolve non-tariff measures affecting the growth of exporters

• work with Callaghan Innovation to build the pipeline of customers between NZTE and Callaghan to increase export opportunities

It’s time for the next stage in our improvement journey. We are up for the challenge.




We use measures to better understand the impact we make and to inform our improvement programme.

Measuring our efforts is challenging, as it is for any economic development agency, and we therefore place the majority of our focus on measureswith the clearest line of sight to customer impact.

We have four windows on progress:

• Are customers growing their international revenue?

• Are customers achieving deals in-market as a result of our efforts?

• Do our customers perceive that we are adding value?

• Are we mobilising and deploying high quality investment?

To ensure that we are headed in the right direction, our Board and Leadership Team also monitor organisational performance through a monthly dashboard that tracks a series of key performance indicators. For example, we measure International Growth Outcomes (IGOs), which are earlier in the pipeline than deals. IGOs relate to commercial results or milestones that create a new platform and/or capability for NZTE customers, such as opening an office or hiring staff in-market. At an operational level, team dashboards provide performance information to support and improve our decision making capabilities.

The full set of top level performance measures are included in the following pages.



We use measures to better understand the impact we make and to inform our improvement programme.

Measuring our efforts is challenging, as it is for any economic development agency, and we therefore place the majority of our focus on measureswith the clearest line of sight to customer impact.

We have four windows on progress:

• Are customers growing their international revenue?

• Are customers achieving deals in-market as a result of our efforts?

• Do our customers perceive that we are adding value?

• Are we mobilising and deploying high quality investment?

To ensure that we are headed in the right direction, our Board and Leadership Team also monitor organisational performance through a monthly dashboard that tracks a series of key performance indicators. For example, we measure International Growth Outcomes (IGOs), which are earlier in the pipeline than deals. IGOs relate to commercial results or milestones that create a new platform and/or capability for NZTE customers, such as opening an office or hiring staff in-market. At an operational level, team dashboards provide performance information to support and improve our decision making capabilities.

The full set of top level performance measures are included in the following pages.



Business Growth AGendA

Goal: Exports to 40% of GDP by 2025

GreAtest imAGinABle ChAllenGe

Double the international revenue of NZTE’s F700 customer porfolio by 2025

top Four meAsures

investment

$ pdEI

Customer perception

% value Add

Customer deals

$ deals in–market

Customer portfolio Growth

% International revenue ($0-500m)

x2



EXPORTMARkETS

SkIllEd & SAFEwORkPlACES

CAPITAl MARkETS

NATuRAlRESOuRCES

INFRASTRuCTuRE INNOvATION

BUSINESS GROWTH AGENDA


GREATEST IMAGINABLE CHALLENGE


TOP FOUR MEASURES

Investment

$ pDEI

Customer Perception

% Value Add

Customer Deals

$ Deals in–market

Customer Portfolio Growth


x2GLOSSARY

F700 Focus 700 customersFDI Foreign Direct InvestmentODI Outward Direct InvestmentIGF International Growth FundpDEI Potential Direct Economic ImpactrDEI Realised Direct Economic ImpactSIF Strategic Investment FundNPS Net Promoter ScoreG2G Government to GovernmentCRM NZTE’s Customer Relationship Management SystemMIKE NZTE’s Enterprise Content Management SystemRBPN Regional Business Partner Network iPlan Multicustomer activities and eventsH&S Health and Safety% Value add % of businesses who agree that NZTE has added value to their business

SPE Measures

Non SPE Measures



EXPORTMARKETS

SKILLED & SAFEWORKPLACES

CAPITAL MARKETS

NATURALRESOURCES

INFRASTRUCTURE INNOVATION

NZTE STATEMENT OF PERFORMANCE EXPECTATIONS 2016/20177 NZTE STATEMENT OF PERFORMANCE EXPECTATIONS 2016/20177

Business Growth AGendA


GreAtest imAGinABle ChAllenGe


top Four meAsures

investment

$ pdEI

Customer perception

% value Add

Customer deals

$ deals in–market

Customer portfolio Growth


x2



EXPORTMARkETS

SkIllEd & SAFEwORkPlACES

CAPITAl MARkETS

NATuRAlRESOuRCES

INFRASTRuCTuRE INNOvATION



GREATEST IMAGINABLE CHALLENGE


TOP FOUR MEASURES

Investment

$ pDEI

Customer Perception

% Value Add

Customer Deals

$ Deals in–market

Customer Portfolio Growth


x2GLOSSARY

F700 Focus 700 customersFDI Foreign Direct InvestmentODI Outward Direct InvestmentIGF International Growth FundpDEI Potential Direct Economic ImpactrDEI Realised Direct Economic ImpactSIF Strategic Investment FundNPS Net Promoter ScoreG2G Government to GovernmentCRM NZTE’s Customer Relationship Management SystemMIKE NZTE’s Enterprise Content Management SystemRBPN Regional Business Partner Network iPlan Multicustomer activities and eventsH&S Health and Safety% Value add % of businesses who agree that NZTE has added value to their business

SPE Measures

Non SPE Measures



EXPORTMARKETS

SKILLED & SAFEWORKPLACES

CAPITAL MARKETS

NATURALRESOURCES

INFRASTRUCTURE INNOVATION

NZTE STATEMENT OF PERFORMANCE EXPECTATIONS 2016/20177 NZTE STATEMENT OF PERFORMANCE EXPECTATIONS 2016/20177


mAnAGement meAsures

serviCes

# IGF grants, SIF grants

# Tier 1 investment deals in the pipe line

# Days between IGF consent and approval

% iPlan activity completed on time in full

Customer wAy

% Engagement plan actions completed on time

% Customer reviews completed on time

people And orGAnisAtion

% Employee engagement

% Performance and development plans completed

% H&S incidents reported, and resolved on time

% CRM and MIKE performance standards met

# NPS: NZ Inc, internal services

% Challenge traffic lights (green)

% Budget variance

portFolio

# F700 customers

# Foundation customers

# Businesses accessing RBPN

# Coalitions under active management

# F700 entries and exits by sector

impACt meAsures

investment results

$ FDI

$ ODI

$ Capital Mobilisation

% Ratio pDEI for investment deals

Customer FeedBACk

# NPS: Services, RBPN, NZ Story

% Advisor Satisfaction

Customer Growth

% Average F700 international revenue growth

# F700 customers with growth <10%/>10%

serviCe results

# International growth outcomes

rDEI ratio for completed IGF projects

pDEI ratio for IGF grants

$ Value of contracts secured through G2G


mAnAGement meAsures

serviCes

# IGF grants, SIF grants

# Tier 1 investment deals in the pipe line

# Days between IGF consent and approval

% iPlan activity completed on time in full

Customer wAy

% Engagement plan actions completed on time

% Customer reviews completed on time

people And orGAnisAtion

% Employee engagement

% Performance and development plans completed

% H&S incidents reported, and resolved on time

% CRM and MIKE performance standards met

# NPS: NZ Inc, internal services

% Challenge traffic lights (green)

% Budget variance

portFolio

# F700 customers

# Foundation customers

# Businesses accessing RBPN

# Coalitions under active management

# F700 entries and exits by sector

impACt meAsures

investment results

$ FDI

$ ODI

$ Capital Mobilisation

% Ratio pDEI for investment deals

Customer FeedBACk

# NPS: Services, RBPN, NZ Story

% Advisor Satisfaction

Customer Growth

% Average F700 international revenue growth

# F700 customers with growth <10%/>10%

serviCe results

# International growth outcomes

rDEI ratio for completed IGF projects

pDEI ratio for IGF grants

$ Value of contracts secured through G2G



Our core performance measures represent the majority of NZTE’s spend and reflect the most important aspects of our business and performance.

Our full suite of organisational measures is shown in the diagram on the previous spread, and our core group of performance measures are set out in the following pages.

NZTE is funded under two Multi-Category Appropriations through Vote Business, Science and Innovation.

Statement of PerformanceExpectations

NZTE’S MulTI-CATEGORY APPROPRIATIONS 2016/17 $M

International business growth services 152.4

Services to support the growth and development of New Zealand businesses 15.2

Collaborative activity and special events 5.5

International Growth Fund 30.0

Sector Strategies and Facilitation – Strategic Investment Fund 1.2

TOTAl 204.3


Our core performance measures represent the majority of NZTE’s spend and reflect the most important aspects of our business and performance.

Our full suite of organisational measures is shown in the diagram on the previous spread, and our core group of performance measures are set out in the following pages.

NZTE is funded under two Multi-Category Appropriations through Vote Business, Science and Innovation.

Statement of PerformanceExpectations

NZTE’S MulTI-CATEGORY APPROPRIATIONS 2016/17 $M

International business growth services 152.4

Services to support the growth and development of New Zealand businesses 15.2

Collaborative activity and special events 5.5

International Growth Fund 30.0

Sector Strategies and Facilitation – Strategic Investment Fund 1.2

TOTAl 204.3



We support individual or groups of companies to enhance their global reach and grow in international markets, and match quality investment with opportunities, the growth of whom benefits New Zealand. This output class is our greatest area of focus.

We help individual or groups of companies to internationalise by:

• Improving their capability and readiness

• Identifying and exploiting market opportunities

• Overcoming internationalisation barriers and enabling access to international business networks

We help potential recipients of investment funds, and investors looking to invest in New Zealand business opportunities by:

• Identifying and connecting with investors domestically and internationally

• Matching quality investment with New Zealand opportunities in target sectors

Our customer managers and international teams provide tailored support, advice and linkages for our internationalising customers. Around this, we wrap services to build capability, connect with global opportunities, access capital and develop effective strategies for growth.

International business growth services

INTERNATIONAl BuSINESS GROwTh SERvICES 2016/17 REvENuE ANd EXPENSES $M

Revenue Crown 152.4

Revenue Other 4.8

Total Revenue 157.2

Expenses 157.2

NET RESulT 0


We support individual or groups of companies to enhance their global reach and grow in international markets, and match quality investment with opportunities, the growth of whom benefits New Zealand. This output class is our greatest area of focus.

We help individual or groups of companies to internationalise by:

• Improving their capability and readiness

• Identifying and exploiting market opportunities

• Overcoming internationalisation barriers and enabling access to international business networks

We help potential recipients of investment funds, and investors looking to invest in New Zealand business opportunities by:

• Identifying and connecting with investors domestically and internationally

• Matching quality investment with New Zealand opportunities in target sectors

Our customer managers and international teams provide tailored support, advice and linkages for our internationalising customers. Around this, we wrap services to build capability, connect with global opportunities, access capital and develop effective strategies for growth.

International business growth services

INTERNATIONAl BuSINESS GROwTh SERvICES 2016/17 REvENuE ANd EXPENSES $M

Revenue Crown 152.4

Revenue Other 4.8

Total Revenue 157.2

Expenses 157.2

NET RESulT 0



1

We measure the F700 (less than $500) portfolio growth against the “NZ Goods & Services Exports Benchmark”. The Benchmark is a subset of the total NZ

Goods & Services exports (sourced from Statistics New Zealand) which only includes companies with exports under $500 million, and in similar sectors as the F700.

The model adjusts for the difference in financial year end reporting dates, to create a ‘like for like’ comparison.

2

A deal is a sale of goods and services with a dollar value over a defined time period, achieved with the assistance of NZTE. The deal value should generally be

calculated over a 12 month period, but can be calculated beyond this period if it is specified in a signed contract.

3

An IGO is a result achieved with the assistance of NZTE, that is not a sale, but that provides a significant platform for future international growth.

4

Although IGOs were a new external measure in 2015/16, NZTE previously monitored this internally and reported the result in the 2014/15 Annual Report commentary.

5 The Net Promoter Score is calculated by taking the percentage of promoters (those that gave a score of 9 or 10) and subtracting the percentage of detractors

(those that gave a score of 0 to 6). This is a measure of how likely customers are to promote the service to others, and is an indicator of the perceived value added by

that service.

6

Potential DEI is the forecast return to the economy through increased profits, wages and supplier spend.

INTERNATIONAl BuSINESS GROwTh SERvICES

PERFORMANCE MEASuRE TARGET 2014/15 ACTuAl 2014/15

TARGET 2015/16 TARGET 2016/17

Annual growth in international revenue for NZTE’s F700 customers with international revenue under $500m1

N/A N/A 3 percentage points higher than NZ’s export growth

3 percentage points higher than NZ’s export growth

Total value of export deals2 achieved with NZTE involvement

Exceeds 2013/14 result

$1.1b Exceeds 2014/15 result

Meets or exceeds 2015/16 result

Number of International Growth Outcomes (IGOs) achieved with NZTE involvement3

N/A 3344 Meets or exceeds 2014/15 result


Percentage of NZTE’s F700 customers that agree or strongly agree that NZTE has added value to their business


91% Meets or exceeds 2014/15 result


Percentage of NZTE’s Foundation customers that agree or strongly agree that NZTE has added value to their business

N/A N/A 60% Meets or exceeds 2015/16 result

Total Net Promoter Score5 for NZTE services

N/A +45 +45 +45

Total value of potential Direct Economic Impact (pDEI)6 for investment deals

N/A N/A Baseline 2015/16 $1.5b


1

We measure the F700 (less than $500) portfolio growth against the “NZ Goods & Services Exports Benchmark”. The Benchmark is a subset of the total NZ

Goods & Services exports (sourced from Statistics New Zealand) which only includes companies with exports under $500 million, and in similar sectors as the F700.

The model adjusts for the difference in financial year end reporting dates, to create a ‘like for like’ comparison.

2

A deal is a sale of goods and services with a dollar value over a defined time period, achieved with the assistance of NZTE. The deal value should generally be

calculated over a 12 month period, but can be calculated beyond this period if it is specified in a signed contract.

3

An IGO is a result achieved with the assistance of NZTE, that is not a sale, but that provides a significant platform for future international growth.

4

Although IGOs were a new external measure in 2015/16, NZTE previously monitored this internally and reported the result in the 2014/15 Annual Report commentary.

5 The Net Promoter Score is calculated by taking the percentage of promoters (those that gave a score of 9 or 10) and subtracting the percentage of detractors

(those that gave a score of 0 to 6). This is a measure of how likely customers are to promote the service to others, and is an indicator of the perceived value added by

that service.

6

Potential DEI is the forecast return to the economy through increased profits, wages and supplier spend.


PERFORMANCE MEASuRE TARGET 2014/15 ACTuAl 2014/15

TARGET 2015/16 TARGET 2016/17

Annual growth in international revenue for NZTE’s F700 customers with international revenue under $500m1

N/A N/A 3 percentage points higher than NZ’s export growth

3 percentage points higher than NZ’s export growth

Total value of export deals2 achieved with NZTE involvement

Exceeds 2013/14 result

$1.1b Exceeds 2014/15 result


Number of International Growth Outcomes (IGOs) achieved with NZTE involvement3

N/A 3344 Meets or exceeds 2014/15 result


Percentage of NZTE’s F700 customers that agree or strongly agree that NZTE has added value to their business


91% Meets or exceeds 2014/15 result


Percentage of NZTE’s Foundation customers that agree or strongly agree that NZTE has added value to their business

N/A N/A 60% Meets or exceeds 2015/16 result

Total Net Promoter Score5 for NZTE services

N/A +45 +45 +45

Total value of potential Direct Economic Impact (pDEI)6 for investment deals

N/A N/A Baseline 2015/16 $1.5b



7 Performance standard is the number of F700 customers in NZTE’s customer portfolio at the end of the financial year.


ACTIvITY INdICATOR ACTIvITY STANdARd 2014/15

ACTuAl 2014/15

ACTIvITY STANdARd 2015/16


Number of F700 customers in NZTE’s customer portfolio7

550-600 621 675-725 690-720

Number of Foundation customers in NZTE’s customer portfolio

3000-3500(demand driven)

3389 3000-3500 (demand driven)

3000-3500 (demand driven)

Number of coalitions under active management

25 (demand driven)

14 25 (demand driven)

20 (demand driven)


7 Performance standard is the number of F700 customers in NZTE’s customer portfolio at the end of the financial year.



ACTuAl 2014/15



Number of F700 customers in NZTE’s customer portfolio7

550-600 621 675-725 690-720

Number of Foundation customers in NZTE’s customer portfolio

3000-3500(demand driven)

3389 3000-3500 (demand driven)

3000-3500 (demand driven)

Number of coalitions under active management

25 (demand driven)

14 25 (demand driven)

20 (demand driven)



Services to support the growth and development of New Zealand businesses

We build and enhance business and management capability by providing access to effective assessment, advice, training, mentoring and information.

Services funded under this output class are mainly delivered via the Regional Business Partner network or other third party providers.

The Regional Business Partner network is a network of 14 regional organisations that are jointly funded by NZTE and Callaghan Innovation to deliver specialist services, support and funding to enhance business management capability and grow business investment in research and development.

SERvICES TO SuPPORT ThE GROwTh ANd dEvElOPMENT OF NEw ZEAlANd BuSINESSES

PERFORMANCE MEASuRE TARGET 2014/15 ACTuAl 2014/15 TARGET 2015/16 TARGET 2016/17

Total Net Promoter Score for the Regional Business Partner Network

Baseline to be established

+48 +50 Meets or exceeds 2015/16 result


ACTuAl 2014/15 ACTIvITY STANdARd 2015/16


Number of businesses receiving business development services* through the Regional Business Partner Network

2,500(demand driven)

3,475 2,500 (demand driven)

5,000 (demand driven)

SERvICES TO SuPPORT ThE GROwTh ANd dEvElOPMENT OF NEw ZEAlANd BuSINESSES 2016/17 REvENuE ANd EXPENSES

$m

Revenue Crown 15.2

Revenue Other 0

Total Revenue 15.2

Expenses 15.2

NET RESulT 0

*These are delivered jointly with Callaghan Innovation and include business mentor matching.


Services to support the growth and development of New Zealand businesses

We build and enhance business and management capability by providing access to effective assessment, advice, training, mentoring and information.

Services funded under this output class are mainly delivered via the Regional Business Partner network or other third party providers.

The Regional Business Partner network is a network of 14 regional organisations that are jointly funded by NZTE and Callaghan Innovation to deliver specialist services, support and funding to enhance business management capability and grow business investment in research and development.

SERvICES TO SuPPORT ThE GROwTh ANd dEvElOPMENT OF NEw ZEAlANd BuSINESSES


Total Net Promoter Score for the Regional Business Partner Network

Baseline to be established

+48 +50 Meets or exceeds 2015/16 result




Number of businesses receiving business development services* through the Regional Business Partner Network

2,500(demand driven)

3,475 2,500 (demand driven)

5,000 (demand driven)

SERvICES TO SuPPORT ThE GROwTh ANd dEvElOPMENT OF NEw ZEAlANd BuSINESSES 2016/17 REvENuE ANd EXPENSES

$m

Revenue Crown 15.2

Revenue Other 0

Total Revenue 15.2

Expenses 15.2

NET RESulT 0

*These are delivered jointly with Callaghan Innovation and include business mentor matching.



We collaborate with other New Zealand agency partners to leverage New Zealand’s profile and diaspora in international markets, and secure and capitalise on special events or opportunities that support New Zealand’s export growth.

Activities within this output class include:

• G2G Know-How – established with MFAT to internationalise our public sector skills, systems and know-how

• The New Zealand Story – a free business toolkit, delivered with NZ Inc partners, to help New Zealand businesses promote themselves internationally

• Leveraging special events

Collaborative activity and special events

COllABORATIvE ACTIvITY ANd SPECIAl EvENTS


Value of contracts secured through G2G Know-How

N/A $9.4m $7m $7m

Total Net Promoter Score for the New Zealand Story

N/A N/A Baseline 2015/16 Meets or exceeds 2015/16 result

COllABORATIvE ACTIvITY ANd SPECIAl EvENTS 2016/17 REvENuE ANd EXPENSES

$m

Revenue Crown 5.5

Revenue Other 0.2

Total Revenue 5.7

Expenses 5.7

NET RESulT 0


We collaborate with other New Zealand agency partners to leverage New Zealand’s profile and diaspora in international markets, and secure and capitalise on special events or opportunities that support New Zealand’s export growth.

Activities within this output class include:

• G2G Know-How – established with MFAT to internationalise our public sector skills, systems and know-how

• The New Zealand Story – a free business toolkit, delivered with NZ Inc partners, to help New Zealand businesses promote themselves internationally

• Leveraging special events

Collaborative activity and special events

COllABORATIvE ACTIvITY ANd SPECIAl EvENTS


Value of contracts secured through G2G Know-How

N/A $9.4m $7m $7m

Total Net Promoter Score for the New Zealand Story

N/A N/A Baseline 2015/16 Meets or exceeds 2015/16 result

COllABORATIvE ACTIvITY ANd SPECIAl EvENTS 2016/17 REvENuE ANd EXPENSES

$m

Revenue Crown 5.5

Revenue Other 0.2

Total Revenue 5.7

Expenses 5.7

NET RESulT 0



NZTE administers two grants:

International Growth Fund (IGF)

The IGF supports high-growth businesses to carry out additional market development and business capability activities required for internationalising and growth in new markets. This delivers benefits for both the businesses concerned and the wider New Zealand economy.

Sector Strategies and Facilitation (Strategic Investment Fund)

The Strategic Investment Fund co-funds feasibility studies. These studies are used to develop and present the business case for investment in New Zealand.

Grants

GRANTS 2016/17 REvENuE ANd EXPENSES

$M

International Growth Fund

Revenue Grants 30.0

Revenue Other 0

Total Revenue 30.0

Expenses 30.0

NET RESulT 0

Sector Strategies and Facilitation

Revenue Grants 1.2

Revenue Other 0

Total Revenue 1.2

Expenses 1.2

NET RESulT 0


NZTE administers two grants:

International Growth Fund (IGF)

The IGF supports high-growth businesses to carry out additional market development and business capability activities required for internationalising and growth in new markets. This delivers benefits for both the businesses concerned and the wider New Zealand economy.

Sector Strategies and Facilitation (Strategic Investment Fund)

The Strategic Investment Fund co-funds feasibility studies. These studies are used to develop and present the business case for investment in New Zealand.

Grants

GRANTS 2016/17 REvENuE ANd EXPENSES

$M

International Growth Fund

Revenue Grants 30.0

Revenue Other 0

Total Revenue 30.0

Expenses 30.0

NET RESulT 0

Sector Strategies and Facilitation

Revenue Grants 1.2

Revenue Other 0

Total Revenue 1.2

Expenses 1.2

NET RESulT 0



8 Potential DEI is the forecast return to the economy through increased profits, wages and supplier spend. The target is $4 for every dollar invested (by both business

and government). The potential DEI return of 4x is measured after adjusting each application and the portfolio by a risk factor of 35%. Potential DEI does not apply to

market validation and coalition projects.9

Results are based on completed IGF projects for IGF grants approved in the preceding five years.

GRANTS


Potential Direct Economic Impact ratio for approved IGF grants

4 to 18 5.3 to 1 4 to 1 4 to 1

Realised Direct Economic Impact ratio for completed IGF projects9

N/A N/A 4 to 1 4 to 1

GRANTS




Number of IGF grants awarded

60 (demand driven) 112 60 (demand driven)

80 (demand driven)

Number of SIF grants awarded


6 (demand driven)


8 Potential DEI is the forecast return to the economy through increased profits, wages and supplier spend. The target is $4 for every dollar invested (by both business

and government). The potential DEI return of 4x is measured after adjusting each application and the portfolio by a risk factor of 35%. Potential DEI does not apply to

market validation and coalition projects.9

Results are based on completed IGF projects for IGF grants approved in the preceding five years.

GRANTS


Potential Direct Economic Impact ratio for approved IGF grants

4 to 18 5.3 to 1 4 to 1 4 to 1

Realised Direct Economic Impact ratio for completed IGF projects9

N/A N/A 4 to 1 4 to 1

GRANTS




Number of IGF grants awarded


80 (demand driven)

Number of SIF grants awarded


6 (demand driven)




As a Crown Agency, our agenda and direction is set by the government; therefore we consult with and report to Ministers regularly. The Board and/or the Chief Executive provide the Minister for Economic Development and the Minister of Trade with regular reports.

Three progress reports will be provided in 2016/17 for the periods July - October, November - February and March - June. These will be provided within 30 days following the end of each period. These reports will cover:

• Progress against key performance indicators

• Key organisational risks

• Financial management

• Areas of ministerial priority.

Ministers and relevant government agencies are consulted before NZTE makes a decision regarding:

• Any material change in the capability and functionality of NZTE’s network (in New Zealand and internationally)

• Any activities that are potentially outside of the scope of appropriations made by Parliament or relevant legislation applying to NZTE

• Any significant organisational decisions that will give rise to Parliamentary interest or public debate.

The Board reports to joint Ministers annually on full-year performance against the SPE. This report also includes Board updates regarding fees and allowances paid, and attendance levels.

NZTE is also committed to sharing information with our NZ Inc partners. We undertake to provide regular updates, insights and analysis on areas of mutual interest.

Lastly, we will be working with MBIE to share knowledge and practices so that we can better understand and demonstrate our impact on companies and the economy.



As a Crown Agency, our agenda and direction is set by the government; therefore we consult with and report to Ministers regularly. The Board and/or the Chief Executive provide the Minister for Economic Development and the Minister of Trade with regular reports.

Three progress reports will be provided in 2016/17 for the periods July - October, November - February and March - June. These will be provided within 30 days following the end of each period. These reports will cover:

• Progress against key performance indicators

• Key organisational risks

• Financial management

• Areas of ministerial priority.

Ministers and relevant government agencies are consulted before NZTE makes a decision regarding:

• Any material change in the capability and functionality of NZTE’s network (in New Zealand and internationally)

• Any activities that are potentially outside of the scope of appropriations made by Parliament or relevant legislation applying to NZTE

• Any significant organisational decisions that will give rise to Parliamentary interest or public debate.

The Board reports to joint Ministers annually on full-year performance against the SPE. This report also includes Board updates regarding fees and allowances paid, and attendance levels.

NZTE is also committed to sharing information with our NZ Inc partners. We undertake to provide regular updates, insights and analysis on areas of mutual interest.

Lastly, we will be working with MBIE to share knowledge and practices so that we can better understand and demonstrate our impact on companies and the economy.



Prospective Financial StatementsFor the year ending 30 June 2017

PROSPECTIvE FINANCIAl STATEMENTS – 2016/17

These statements are presented in accordance with the requirements of the Crown Entities Act 2004, which includes the requirement to comply with New Zealand generally accepted accounting practice (NZ GAAP). The prospective financial statements have been prepared in accordance with Tier 1 PBE (public benefit entity) accounting standards, New Zealand PBE Financial Reporting Standard No 42 – Prospective Financial Statements and other applicable financial reporting standards, as appropriate for Public Benefit entities.

Key assumptions

The financial forecast for the year ending 30 June 2017 is based on the 2016/17 budget figures as specified in the Vote Business, Science and Innovation Estimates of Appropriation 2016/17.

It is based on the following assumptions:

• Baseline is updated for approved changes in Appropriations and NZTE will perform the activities agreed

• Operating expenses are recognised in the period they are incurred

• All salary and wage related costs are expensed in the month in which they are incurred

• Depreciation and amortisation is expensed once the property, plant and equipment, or intangible item is acquired and brought to use

• Accounts receivable are due on the 20th of the month following the date of invoice

• Capital expenditure is budgeted for the year when the asset is acquired and is prepared on a zero based budget

• Grant expense is recognised when the third party recipient incurs expenditure. Revenue Crown Grants is recognised when the related grant expense is incurred.

Other information

These statements have been prepared on the basis of government policies and NZTE outputs at the time the statements were finalised.

Please note that this is forecast information and therefore the actual results achieved for the period may vary from the information presented due to external factors.


Prospective Financial StatementsFor the year ending 30 June 2017

PROSPECTIvE FINANCIAl STATEMENTS – 2016/17

These statements are presented in accordance with the requirements of the Crown Entities Act 2004, which includes the requirement to comply with New Zealand generally accepted accounting practice (NZ GAAP). The prospective financial statements have been prepared in accordance with Tier 1 PBE (public benefit entity) accounting standards, New Zealand PBE Financial Reporting Standard No 42 – Prospective Financial Statements and other applicable financial reporting standards, as appropriate for Public Benefit entities.

Key assumptions

The financial forecast for the year ending 30 June 2017 is based on the 2016/17 budget figures as specified in the Vote Business, Science and Innovation Estimates of Appropriation 2016/17.

It is based on the following assumptions:

• Baseline is updated for approved changes in Appropriations and NZTE will perform the activities agreed

• Operating expenses are recognised in the period they are incurred

• All salary and wage related costs are expensed in the month in which they are incurred

• Depreciation and amortisation is expensed once the property, plant and equipment, or intangible item is acquired and brought to use

• Accounts receivable are due on the 20th of the month following the date of invoice

• Capital expenditure is budgeted for the year when the asset is acquired and is prepared on a zero based budget

• Grant expense is recognised when the third party recipient incurs expenditure. Revenue Crown Grants is recognised when the related grant expense is incurred.

Other information

These statements have been prepared on the basis of government policies and NZTE outputs at the time the statements were finalised.

Please note that this is forecast information and therefore the actual results achieved for the period may vary from the information presented due to external factors.



Other operating expensesOther operating expenses include the following major categories: development and implementation of iPlans, business capability services, rental expense on operating leases, and promotional activities.

STATEMENT OF COMPREhENSIvE REvENuE ANd EXPENSE

Budget 2017 Income $000

Revenue Crown Operating 173,084

Revenue Crown Grants 31,231

Other operating income 5,047

Finance income 760

Total Income 210,122

Expenditure

Personnel costs 90,077

Other operating expenses 83,814

Depreciation and amortisation expense 5,000

Grant expense 31,231

Total Expenditure 210,122

NET SuRPluS / (dEFICIT) 0

STATEMENT OF ChANGES IN EquITY

Budget 2017 $000

equity at the beginnning of the year 20,843

Net operating Surplus / (Deficit) for the year 0

Total Recognised Revenue and Expenses 20,843

EquITY AT ThE ENd OF ThE YEAR 20,843


Other operating expensesOther operating expenses include the following major categories: development and implementation of iPlans, business capability services, rental expense on operating leases, and promotional activities.

STATEMENT OF COMPREhENSIvE REvENuE ANd EXPENSE

Budget 2017 Income $000

Revenue Crown Operating 173,084


Other operating income 5,047

Finance income 760

Total Income 210,122

Expenditure

Personnel costs 90,077

Other operating expenses 83,814

Depreciation and amortisation expense 5,000

Grant expense 31,231

Total Expenditure 210,122

NET SuRPluS / (dEFICIT) 0

STATEMENT OF ChANGES IN EquITY

Budget 2017 $000

equity at the beginnning of the year 20,843

Net operating Surplus / (Deficit) for the year 0

Total Recognised Revenue and Expenses 20,843

EquITY AT ThE ENd OF ThE YEAR 20,843



STATEMENT OF FINANCIAl POSITION

Budget 2017 Current Assets $000

Cash 6,561

Trade and other receivables 18,714

Crown debtor – grants 14,800

Prepayments 3,000

Deposits 811

Total Current Assets 43,886

Non Current Assets

Deposits 1,015

Property, plant and equipment 15,097

Intangible Assets 1,815

Total Non Current Assets 17,927

Total Assets 61,813

Current Liabilities

Trade and other payables 17,020

Employee benefits and provisions 5,305

Finance and other liabilities 210

Provisions – grants 14,800

Total Current Liabilities 37,335

Non Current Liabilities

Employee benefits 2,693


Total Non Current Liabilities 3,635

Total liabilities 40,970

NET ASSETS 20,843

EquITY 20,843


STATEMENT OF FINANCIAl POSITION

Budget 2017 Current Assets $000

Cash 6,561

Trade and other receivables 18,714

Crown debtor – grants 14,800

Prepayments 3,000

Deposits 811

Total Current Assets 43,886

Non Current Assets

Deposits 1,015

Property, plant and equipment 15,097

Intangible Assets 1,815

Total Non Current Assets 17,927

Total Assets 61,813

Current Liabilities

Trade and other payables 17,020

Employee benefits and provisions 5,305


Provisions – grants 14,800

Total Current Liabilities 37,335

Non Current Liabilities

Employee benefits 2,693


Total Non Current Liabilities 3,635

Total liabilities 40,970

NET ASSETS 20,843

EquITY 20,843



STATEMENT OF COSTS BY OuTPuT EXPENSE

Budget 2017 $000

International business growth services 152,430

Services to support the growth and development of New Zealand businesses 15,181

Collaborative activity and special events 5,473

Total 173,084

RECONCIlIATION: STATEMENT OF COSTS BY OuTPuT ClASS TO TOTAl EXPENdITuRE PER STATEMENT OF COMPREhENSIvE REvENuE ANd EXPENSE

Budget 2017 $000

Statement of Costs by Output Class 173,084


Sundry Revenue, including Interest 5,807

Total Expenditure per Statement of Comprehensive Income 210,122

STATEMENT OF GRANT EXPENSE

Budget 2017 $000

International Growth Fund 30,027

Strategies and Facilitation 1,204

Total 31,231


STATEMENT OF COSTS BY OuTPuT EXPENSE

Budget 2017 $000

International business growth services 152,430

Services to support the growth and development of New Zealand businesses 15,181

Collaborative activity and special events 5,473

Total 173,084

RECONCIlIATION: STATEMENT OF COSTS BY OuTPuT ClASS TO TOTAl EXPENdITuRE PER STATEMENT OF COMPREhENSIvE REvENuE ANd EXPENSE

Budget 2017 $000

Statement of Costs by Output Class 173,084


Sundry Revenue, including Interest 5,807

Total Expenditure per Statement of Comprehensive Income 210,122

STATEMENT OF GRANT EXPENSE

Budget 2017 $000

International Growth Fund 30,027

Strategies and Facilitation 1,204

Total 31,231



STATEMENT OF CASh FlOwS

Budget 2017 Net cash flows from: $000

Operating activities:

Revenue from Crown – operating 168,483

Revenue from Crown – grants 31,231

Client and other income 5,047

Interest received 760

Payments to suppliers (76,950)

Payments to employees (89,927)

Payments to grant recipients (31,231)

Capital charge paid (1,667)

Net Cash Flows from operating activities 5,746

Investing activities:

Proceeds from sale of property, plant and equipment -

Purchase of property, plant and equipment (5,050)

Purchase of intangible assets (1,350)

Net Cash Flows from investing activities (6,400)

Net increase / (decrease) in cash and cash equivalents (654)

Cash and cash equivalents at beginning of year 7,215

BAlANCE CASh AT ENd OF PERIOd 6,561


STATEMENT OF CASh FlOwS

Budget 2017 Net cash flows from: $000

Operating activities:

Revenue from Crown – operating 168,483

Revenue from Crown – grants 31,231

Client and other income 5,047

Interest received 760

Payments to suppliers (76,950)

Payments to employees (89,927)

Payments to grant recipients (31,231)

Capital charge paid (1,667)

Net Cash Flows from operating activities 5,746

Investing activities:

Proceeds from sale of property, plant and equipment -

Purchase of property, plant and equipment (5,050)

Purchase of intangible assets (1,350)

Net Cash Flows from investing activities (6,400)

Net increase / (decrease) in cash and cash equivalents (654)

Cash and cash equivalents at beginning of year 7,215

BAlANCE CASh AT ENd OF PERIOd 6,561



Accounting PoliciesREPORTING ENTITY

NZTE is a Crown Agency as defined by the Crown Entities Act 2004 and is domiciled in New Zealand. NZTE’s parent is the New Zealand Crown.

The consolidated financial statements of the Group consist of the parent entity, NZTE and its subsidiaries, NZ G2G Partnerships Ltd, NZTE Limited and the wholly owned foreign entity, New Zealand Trade and Enterprise Consulting (Shanghai) Co. Limited.

NZTE’s primary objective is to encourage and promote economic development and investment opportunities in New Zealand, as opposed to making a financial return.

NZTE has designated itself as a public benefit entity (PBE) for financial reporting purposes.

BASIS OF PREPARATION

The financial statements are prepared in accordance with the requirements of the Crown Entities Act 2004, which includes the requirement to comply with New Zealand generally accepted accounting practice (NZ GAAP). The financial statements have been prepared on a historical cost basis, except derivative financial instruments, namely foreign exchange contracts, which are stated at fair value. The financial statements have been prepared in accordance with Tier 1 PBE accounting standards. The financial statements comply with PBE accounting standards.

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

Foreign currency transactions

Foreign currency transactions (including those for which forward exchange contracts were held) are translated into New Zealand dollars using the exchange rates prevailing at the date of transaction. 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 Statement of Comprehensive Revenue and Expense.

Accounting estimates and judgements

Application of NZTE’s accounting policies requires the use of estimates and judgements. The estimates are based on historical experience and other factors that are believed to be reasonable. Actual results may differ from these estimates. The areas of significant estimation and judgement are as follows:

• grant expenditure

• useful lives of property, plant and equipment

• useful lives of intangible assets.

SIGNIFICANT ACCOUNTING POLICIES

The following significant accounting policies, which materially affect the measurement of financial results and financial position, have been applied consistently to all periods presented in these financial statements.

REVENUE CROWN OPERATING AND REVENUE CROWN GRANTS

NZTE received funding from the Crown for the specific purposes of NZTE as set out in the Statement of Performance Expectations and the scope of the relevant government

appropriations. NZTE considers there are no conditions attached to the funding and it is recognised as revenue at the point of entitlement.

NZTE received funding from the Crown for grants as set out in the Statement of Performance Expectations and the scope of the relevant government appropriations. Revenue Crown Grants is recognised when the revenue conditions have been met, which is when the related grant expenditure is incurred, and a grant receivable is due.

CAPITAL CHARGE

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

CASH AND CASH EQUIVALENTS

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

TRADE AND OTHER RECEIVABLES

Debtors and other receivables are initially measured at fair value and subsequently measured at amortised cost using the effective interest method, less any provision for impairment.

Impairment of a receivable is established when there is objective evidence that NZTE will not be able to collect amounts according to the original terms of the receivable. Significant financial difficulties of the debtor, probability that the debtor will enter into bankruptcy, 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


Accounting PoliciesREPORTING ENTITY

NZTE is a Crown Agency as defined by the Crown Entities Act 2004 and is domiciled in New Zealand. NZTE’s parent is the New Zealand Crown.

The consolidated financial statements of the Group consist of the parent entity, NZTE and its subsidiaries, NZ G2G Partnerships Ltd, NZTE Limited and the wholly owned foreign entity, New Zealand Trade and Enterprise Consulting (Shanghai) Co. Limited.

NZTE’s primary objective is to encourage and promote economic development and investment opportunities in New Zealand, as opposed to making a financial return.

NZTE has designated itself as a public benefit entity (PBE) for financial reporting purposes.

BASIS OF PREPARATION

The financial statements are prepared in accordance with the requirements of the Crown Entities Act 2004, which includes the requirement to comply with New Zealand generally accepted accounting practice (NZ GAAP). The financial statements have been prepared on a historical cost basis, except derivative financial instruments, namely foreign exchange contracts, which are stated at fair value. The financial statements have been prepared in accordance with Tier 1 PBE accounting standards. The financial statements comply with PBE accounting standards.

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

Foreign currency transactions

Foreign currency transactions (including those for which forward exchange contracts were held) are translated into New Zealand dollars using the exchange rates prevailing at the date of transaction. 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 Statement of Comprehensive Revenue and Expense.

Accounting estimates and judgements

Application of NZTE’s accounting policies requires the use of estimates and judgements. The estimates are based on historical experience and other factors that are believed to be reasonable. Actual results may differ from these estimates. The areas of significant estimation and judgement are as follows:

• grant expenditure

• useful lives of property, plant and equipment

• useful lives of intangible assets.

SIGNIFICANT ACCOUNTING POLICIES

The following significant accounting policies, which materially affect the measurement of financial results and financial position, have been applied consistently to all periods presented in these financial statements.

REVENUE CROWN OPERATING AND REVENUE CROWN GRANTS

NZTE received funding from the Crown for the specific purposes of NZTE as set out in the Statement of Performance Expectations and the scope of the relevant government

appropriations. NZTE considers there are no conditions attached to the funding and it is recognised as revenue at the point of entitlement.

NZTE received funding from the Crown for grants as set out in the Statement of Performance Expectations and the scope of the relevant government appropriations. Revenue Crown Grants is recognised when the revenue conditions have been met, which is when the related grant expenditure is incurred, and a grant receivable is due.

CAPITAL CHARGE

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

CASH AND CASH EQUIVALENTS

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

TRADE AND OTHER RECEIVABLES

Debtors and other receivables are initially measured at fair value and subsequently measured at amortised cost using the effective interest method, less any provision for impairment.

Impairment of a receivable is established when there is objective evidence that NZTE will not be able to collect amounts according to the original terms of the receivable. Significant financial difficulties of the debtor, probability that the debtor will enter into bankruptcy, 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 an allowance account, and the amount of the loss is recognised in the Statement of Comprehensive Revenue and Expense. When the receivable is uncollectible, it is written off against the allowance account for receivables. Overdue receivables that have been renegotiated are reclassified as current (i.e. not past due).

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment asset classes consist of computer hardware, leasehold improvements, furniture and office equipment, and motor vehicles. Property, plant and equipment are shown at cost, less any accumulated depreciation and impairment losses.

Leased assets

Leases where NZTE assumes substantially all the risks and rewards of ownership are classified as finance leases. The assets acquired by way of finance lease are stated at an amount equal to the lower of their fair value and the present value of the minimum lease payments at inception of the lease, less accumulated depreciation and impairment losses.

Additions

The cost of an item of property, plant or 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 NZTE and the cost of the item can be measured reliably. Where an asset is acquired at no cost, or for a nominal cost, it is recognised at fair value when control over the asset is obtained.

Disposals

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount of the asset. Gains and losses on disposals are included in the Statement of Comprehensive Revenue and Expense.

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 NZTE 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 Statement of Comprehensive Revenue and Expense 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 of the assets to their estimated residual values over their useful lives. The useful lives and associated depreciation rates of major asset classes have been estimated as follows:

Computer equipment 3 years 33%

Furniture and office equipment 4 to 5 years 20% to 25%

Leasehold improvements Up to 9 years 11% to 33%

Motor vehicles 4 years 25%

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 and development

Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and bring to use the specific software. Costs that are directly associated with the development of software for internal use by NZTE, are recognised as an intangible asset. Direct costs include software development, employee costs and an appropriate portion of relevant overheads. Staff training costs, costs associated with maintaining computer software, and costs associated with the development and maintenance of NZTE 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 when the asset is derecognised. The amortisation charge for each period is recognised in the Statement of Comprehensive Revenue and Expense. The useful lives and associated amortisation rates of major classes of intangible assets have been estimated as follows:

Computer software (developed) 3 to 5 years 20% to 33%

Computer software (acquired) 4 to 5 years 20% to 25% IMPAIRMENT OF NON-FINANCIAL ASSETS

Property, plant and equipment and intangible assets that have a


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 an allowance account, and the amount of the loss is recognised in the Statement of Comprehensive Revenue and Expense. When the receivable is uncollectible, it is written off against the allowance account for receivables. Overdue receivables that have been renegotiated are reclassified as current (i.e. not past due).

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment asset classes consist of computer hardware, leasehold improvements, furniture and office equipment, and motor vehicles. Property, plant and equipment are shown at cost, less any accumulated depreciation and impairment losses.

Leased assets

Leases where NZTE assumes substantially all the risks and rewards of ownership are classified as finance leases. The assets acquired by way of finance lease are stated at an amount equal to the lower of their fair value and the present value of the minimum lease payments at inception of the lease, less accumulated depreciation and impairment losses.

Additions

The cost of an item of property, plant or 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 NZTE and the cost of the item can be measured reliably. Where an asset is acquired at no cost, or for a nominal cost, it is recognised at fair value when control over the asset is obtained.

Disposals

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount of the asset. Gains and losses on disposals are included in the Statement of Comprehensive Revenue and Expense.

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 NZTE 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 Statement of Comprehensive Revenue and Expense 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 of the assets to their estimated residual values over their useful lives. The useful lives and associated depreciation rates of major asset classes have been estimated as follows:

Computer equipment 3 years 33%

Furniture and office equipment 4 to 5 years 20% to 25%

Leasehold improvements Up to 9 years 11% to 33%

Motor vehicles 4 years 25%

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 and development

Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and bring to use the specific software. Costs that are directly associated with the development of software for internal use by NZTE, are recognised as an intangible asset. Direct costs include software development, employee costs and an appropriate portion of relevant overheads. Staff training costs, costs associated with maintaining computer software, and costs associated with the development and maintenance of NZTE 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 when the asset is derecognised. The amortisation charge for each period is recognised in the Statement of Comprehensive Revenue and Expense. The useful lives and associated amortisation rates of major classes of intangible assets have been estimated as follows:

Computer software (developed) 3 to 5 years 20% to 33%

Computer software (acquired) 4 to 5 years 20% to 25% IMPAIRMENT OF NON-FINANCIAL ASSETS

Property, plant and equipment and intangible assets 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 amount. The recoverable 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 its future economic benefits or service potential are not primarily dependent on its ability to generate net cash inflows and where NZTE 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 total impairment loss is recognised in the Statement of Comprehensive Revenue and Expense.

For assets not carried at a revalued amount, the reversal of an impairment loss is recognised in the Statement of Comprehensive Revenue and Expense.

FINANCIAL RISK MANAGEMENT

NZTE’s principal financial instruments (other than derivatives), comprise cash and short-term deposits. The main purpose of these financial instruments is to fund NZTE’s operations. NZTE has various other financial instruments such as trade debtors and trade creditors which arise directly from its operations. NZTE also enters into derivative transactions consisting principally of forward currency contracts. The purpose of these is to manage the currency risks arising from NZTE’s operations and its sources of finance. It is NZTE’s policy that no trading in financial instruments shall be undertaken.

NZTE is exposed to credit risk, interest rate risk, liquidity risk and foreign currency risk. NZTE’s senior management oversees the management of these risks. NZTE’s

senior management is supported by an Audit and Risk Committee that provides assurance to senior management and the Board that NZTE’s financial risks are identified, measured and managed in accordance with NZTE’s policies and procedures and that financial risks are identified, measured and managed in accordance with NZTE’s policies and risk objectives.

Financial instruments categories and fair value

The carrying amounts represent the fair values of financial instruments. The carrying amounts of financial instruments included in the Statement of Financial Position reflect the fair values of the financial instruments at balance date. These have all been determined by using a valuation technique using observable inputs provided by independent trading banks.

Estimation of fair values analysis

Major methods and assumptions used in estimating the fair values of financial instruments are summarised below:

Derivatives

The fair value of forward exchange contracts has been determined using a discounted cash flow valuation methodology based on quoted forward foreign exchange market rates.

Where discounted cash flow techniques are used, estimated future cash flows are based on management’s best estimates and the discount rate is a market related rate for a similar instrument at balance date. Where other pricing models are used, inputs are based on market-related data at balance date.

Finance lease liabilities

The fair value is estimated as the present value of future cash flows, discounted at market interest rates for homogeneous lease agreements. The estimated fair values reflect change in interest rates.

Trade and other receivables and payables

For receivables and payables with a remaining life of less than one year, the notional amount is deemed to reflect the fair value.

Capital management

NZTE’s capital is its equity, which comprises capital injections by the Crown and accumulated funds. Equity is represented by net assets. NZTE is subject to the financial management and accountability provisions of the Crown Entities Act 2004, which imposes restrictions in relation to borrowings, acquisition of securities, issuing guarantees and indemnities and use of derivatives. NZTE has complied with these restrictions throughout the year. NZTE manages its equity as a by-product of prudently managing revenue, expenses, assets, liabilities, investments, and general financial dealings to ensure that NZTE effectively achieves its objectives and purpose, while remaining a going concern.

a) Credit risk

In the normal course of business, NZTE is exposed to credit risk from cash and term deposits with banks, trade and other receivables, and derivative financial instrument assets. For each of these, the maximum credit exposure is best represented by the carrying amount in the Statement of Financial Position. Concentration of credit risk from accounts receivable are limited due to the large number and variety of customers. MBIE is the largest single debtor (approximately 99 percent). As the government-funded purchaser, it is assessed to be a low risk, high-quality entity.

b) Interest rate risk

NZTE has interest rate risk arising from interest bearing Call Account and Term Deposit balances. NZTE does not actively manage its exposure to interest rate risk.


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 amount. The recoverable 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 its future economic benefits or service potential are not primarily dependent on its ability to generate net cash inflows and where NZTE 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 total impairment loss is recognised in the Statement of Comprehensive Revenue and Expense.

For assets not carried at a revalued amount, the reversal of an impairment loss is recognised in the Statement of Comprehensive Revenue and Expense.

FINANCIAL RISK MANAGEMENT

NZTE’s principal financial instruments (other than derivatives), comprise cash and short-term deposits. The main purpose of these financial instruments is to fund NZTE’s operations. NZTE has various other financial instruments such as trade debtors and trade creditors which arise directly from its operations. NZTE also enters into derivative transactions consisting principally of forward currency contracts. The purpose of these is to manage the currency risks arising from NZTE’s operations and its sources of finance. It is NZTE’s policy that no trading in financial instruments shall be undertaken.

NZTE is exposed to credit risk, interest rate risk, liquidity risk and foreign currency risk. NZTE’s senior management oversees the management of these risks. NZTE’s

senior management is supported by an Audit and Risk Committee that provides assurance to senior management and the Board that NZTE’s financial risks are identified, measured and managed in accordance with NZTE’s policies and procedures and that financial risks are identified, measured and managed in accordance with NZTE’s policies and risk objectives.

Financial instruments categories and fair value

The carrying amounts represent the fair values of financial instruments. The carrying amounts of financial instruments included in the Statement of Financial Position reflect the fair values of the financial instruments at balance date. These have all been determined by using a valuation technique using observable inputs provided by independent trading banks.

Estimation of fair values analysis

Major methods and assumptions used in estimating the fair values of financial instruments are summarised below:

Derivatives

The fair value of forward exchange contracts has been determined using a discounted cash flow valuation methodology based on quoted forward foreign exchange market rates.

Where discounted cash flow techniques are used, estimated future cash flows are based on management’s best estimates and the discount rate is a market related rate for a similar instrument at balance date. Where other pricing models are used, inputs are based on market-related data at balance date.

Finance lease liabilities

The fair value is estimated as the present value of future cash flows, discounted at market interest rates for homogeneous lease agreements. The estimated fair values reflect change in interest rates.

Trade and other receivables and payables

For receivables and payables with a remaining life of less than one year, the notional amount is deemed to reflect the fair value.

Capital management

NZTE’s capital is its equity, which comprises capital injections by the Crown and accumulated funds. Equity is represented by net assets. NZTE is subject to the financial management and accountability provisions of the Crown Entities Act 2004, which imposes restrictions in relation to borrowings, acquisition of securities, issuing guarantees and indemnities and use of derivatives. NZTE has complied with these restrictions throughout the year. NZTE manages its equity as a by-product of prudently managing revenue, expenses, assets, liabilities, investments, and general financial dealings to ensure that NZTE effectively achieves its objectives and purpose, while remaining a going concern.

a) Credit risk

In the normal course of business, NZTE is exposed to credit risk from cash and term deposits with banks, trade and other receivables, and derivative financial instrument assets. For each of these, the maximum credit exposure is best represented by the carrying amount in the Statement of Financial Position. Concentration of credit risk from accounts receivable are limited due to the large number and variety of customers. MBIE is the largest single debtor (approximately 99 percent). As the government-funded purchaser, it is assessed to be a low risk, high-quality entity.

b) Interest rate risk

NZTE has interest rate risk arising from interest bearing Call Account and Term Deposit balances. NZTE does not actively manage its exposure to interest rate risk.



c) Liquidity risk

Liquidity risk is the risk that NZTE will encounter difficulty raising liquid funds to meet commitments as they fall due. Prudent liquidity risk management implies maintaining sufficient cash and ability to close out market positions.

NZTE manages liquidity risk by continuously monitoring forecast and actual cash flow requirements.

d) Foreign currency risk

NZTE has offices overseas and undertakes transactions denominated in foreign currencies. As a result of these activities exposures in foreign currency arise. The currencies giving rise to this risk are primarily the United States dollar, Euro, Great Britain pound, Hong Kong dollar, Singapore dollar and Australian dollar. It is NZTE policy to hedge foreign currency risks and use forward and spot foreign exchange contracts to manage this exposure. In accordance with Crown policy, the foreign exchange contracts are completed approximately nine months before the financial year begins. The appropriation from the Crown for the financial year is primarily based on the same foreign exchange contracted rates.

Forecasted transactions

NZTE has not designated its forward exchange contracts as cash flow hedges. Accordingly, fair value movements in outstanding forward exchange contracts are accounted for either as a net gain or loss from derivative financial instruments directly in the Statement of Comprehensive Revenue and Expense.

Recognised assets and liabilities

Changes in the fair value of forward exchange contracts that economically hedge monetary assets and liabilities in foreign currencies and for which no hedge accounting is applied are recognised in the Statement of Comprehensive Revenue and Expense. Both the changes in fair value of the forward contracts and the foreign

exchange gains and losses relating to the monetary items are recognised as part of finance income and finance expense.

INCOME TAX

NZTE is the holding entity of subsidiaries as a Crown Entity and is consequently exempt from paying income tax. The income tax status of NZ G2G Partnerships Ltd is currently being considered by Inland Revenue. Until its status is determined with certainty, a conservative approach has been adopted in respect of the taxable income derived by NZ G2G Partnerships Ltd.

COST OF SERVICE STATEMENTS

The cost of service statements, as reported in the Statement of Costs by Output Expense, shows the net cost for the outputs of NZTE. It is represented by the costs of providing the output less all revenue that can be allocated to these activities. NZTE has derived the net cost of service for each of its significant activities using the cost allocation system outlined below.

Cost allocation policy

Direct costs are charged directly to significant activities. Indirect costs are charged to significant activities based on cost drivers and related activity and usage information.

Criteria for direct and indirect costs

“Direct costs” are costs that are directly attributable to a significant activity.

“Indirect costs” are costs that cannot be identified in an economically feasible manner with a specific significant activity.

Cost drivers for allocation of indirect costs

The cost of internal services not directly charged to activities is allocated as overheads, using appropriate cost drivers such as actual usage and full-time equivalents.


c) Liquidity risk

Liquidity risk is the risk that NZTE will encounter difficulty raising liquid funds to meet commitments as they fall due. Prudent liquidity risk management implies maintaining sufficient cash and ability to close out market positions.

NZTE manages liquidity risk by continuously monitoring forecast and actual cash flow requirements.

d) Foreign currency risk

NZTE has offices overseas and undertakes transactions denominated in foreign currencies. As a result of these activities exposures in foreign currency arise. The currencies giving rise to this risk are primarily the United States dollar, Euro, Great Britain pound, Hong Kong dollar, Singapore dollar and Australian dollar. It is NZTE policy to hedge foreign currency risks and use forward and spot foreign exchange contracts to manage this exposure. In accordance with Crown policy, the foreign exchange contracts are completed approximately nine months before the financial year begins. The appropriation from the Crown for the financial year is primarily based on the same foreign exchange contracted rates.

Forecasted transactions

NZTE has not designated its forward exchange contracts as cash flow hedges. Accordingly, fair value movements in outstanding forward exchange contracts are accounted for either as a net gain or loss from derivative financial instruments directly in the Statement of Comprehensive Revenue and Expense.

Recognised assets and liabilities

Changes in the fair value of forward exchange contracts that economically hedge monetary assets and liabilities in foreign currencies and for which no hedge accounting is applied are recognised in the Statement of Comprehensive Revenue and Expense. Both the changes in fair value of the forward contracts and the foreign

exchange gains and losses relating to the monetary items are recognised as part of finance income and finance expense.

INCOME TAX

NZTE is the holding entity of subsidiaries as a Crown Entity and is consequently exempt from paying income tax. The income tax status of NZ G2G Partnerships Ltd is currently being considered by Inland Revenue. Until its status is determined with certainty, a conservative approach has been adopted in respect of the taxable income derived by NZ G2G Partnerships Ltd.

COST OF SERVICE STATEMENTS

The cost of service statements, as reported in the Statement of Costs by Output Expense, shows the net cost for the outputs of NZTE. It is represented by the costs of providing the output less all revenue that can be allocated to these activities. NZTE has derived the net cost of service for each of its significant activities using the cost allocation system outlined below.

Cost allocation policy

Direct costs are charged directly to significant activities. Indirect costs are charged to significant activities based on cost drivers and related activity and usage information.

Criteria for direct and indirect costs

“Direct costs” are costs that are directly attributable to a significant activity.

“Indirect costs” are costs that cannot be identified in an economically feasible manner with a specific significant activity.

Cost drivers for allocation of indirect costs

The cost of internal services not directly charged to activities is allocated as overheads, using appropriate cost drivers such as actual usage and full-time equivalents.



as at 1 July 2016

Mumbai

Riyadh

Abu Dhabi

New Delhi

Sydney

Brisbane

Melbourne

Hong

Vancouver

Los Angeles


Washington DC

Santiago

Sao Paulo

Mexico City

Kuala Lumpur

Singapore

Ho ChiMinh City

ManilaBangkok

ShenzhenGuangzhou

Shanghai

Chengdu

Seoul Tokyo

Beijing

KongTaipei

Jakarta

LondonParis

IstanbulMadrid

Milan

Dubai

Tehran

Hamburg

Moscow

Auckland

New Zealand o�ces

TaurangaHamilton

Napier

Wellington

Christchurch

Dunedin

Nelson

Palmerston North


Bogota


EUROPE

GREATER CHINA

EAST ASIA


SOUTH AMERICA

NORTH AMERICA



as at 1 July 2016

Mumbai

Riyadh

Abu Dhabi

New Delhi

Sydney

Brisbane

Melbourne

Hong

Vancouver

Los Angeles


Washington DC

Santiago

Sao Paulo

Mexico City

Kuala Lumpur

Singapore

Ho ChiMinh City

ManilaBangkok

ShenzhenGuangzhou

Shanghai

Chengdu

Seoul Tokyo

Beijing

KongTaipei

Jakarta

LondonParis

IstanbulMadrid

Milan

Dubai

Tehran

Hamburg

Moscow

Auckland

New Zealand o�ces

TaurangaHamilton

Napier

Wellington

Christchurch

Dunedin

Nelson

Palmerston North


Bogota


EUROPE

GREATER CHINA

EAST ASIA


SOUTH AMERICA

NORTH AMERICA





OUr in-MarKet sUppOrt

7 Regions

39 Languages

41 International locations

240 Private sector advisors

260 Offshore NZTE employees

Mumbai

Riyadh

Abu Dhabi

New Delhi

Sydney

Brisbane

Melbourne

Hong

Vancouver

Los Angeles


Washington DC

Santiago

Sao Paulo

Mexico City

Kuala Lumpur

Singapore

Ho ChiMinh City

ManilaBangkok

ShenzhenGuangzhou

Shanghai

Chengdu

Seoul Tokyo

Beijing

KongTaipei

Jakarta

LondonParis

IstanbulMadrid

Milan

Dubai

Tehran

Hamburg

Moscow

Auckland

New Zealand o�ces

TaurangaHamilton

Napier

Wellington

Christchurch

Dunedin

Nelson

Palmerston North


Bogota


EUROPE

GREATER CHINA

EAST ASIA


SOUTH AMERICA

NORTH AMERICA

nzte stateMent OF perFOrManCe eXpeCtatiOns 2016/2017 28


2016/2017

G45 SPE (2016)

Statement ofPerformanceExpectations

ISSN 2382-0519© Copyright New Zealand Trade and Enterprise (NZTE) 2016.

This work is licensed under the Creative Commons Attribution 3.0 New Zealand licence. In essence, you are free to copy, distribute and adapt the work, as long as you attribute the work to the Crown and abide by the other licence terms. To view a copy of this licence, visit http://creativecommons.org/ licenses/by/3.0/nz/. Please note that no departmental or governmental emblem, logo or Coat of Arms may be used in any way which infringes any provision of the Flags, Emblems, and Names Protection Act 1981. Attribution to the Crown should be in written form and not by reproduction of any such emblem, logo or Coat of Arms. June 2016

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Statement of Performance Expectations - NZTE · Our purpose is simple: to grow companies internationally — bigger, better, faster — for the benefit of New Zealand. OUr in-MarKet

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