STATEMENT OF PERFORMANCE EXPECTATIONS 2018/2019 - NZTE
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G45 SPE (2018)
STATEMENT OF
PERFORMANCE
EXPECTATIONS
2018/2019
ISSN 2382-0519
nzte.govt.nz
Disclaimer: This document only contains general information and is not formal advice. The New Zealand Government and its associated agencies (‘the
New Zealand Government’) do not endorse or warrant the accuracy, reliability or fitness for any purpose of any information provided. It is recommended
that you seek independent advice on any matter related to the use of the information. In no event will the New Zealand Government be liable for any loss
or damage whatsoever arising from the use of the information. While every effort is made to ensure the accuracy of the information contained herein, the
New Zealand Government, its officers, employees and agents accept no liability for any errors or omissions or any opinion expressed, and no responsibility
is accepted with respect to the standing of any firms, companies or individuals mentioned. JUNE 2018Contents NZTE at a glance
NZTE at a glance
1 NZTE at a glance Who are we?
2 Setting the scene New Zealand Trade and Enterprise (NZTE) is the Government’s international business development agency.
Our Māori name is Te Taurapa Tūhono. Taurapa is the stern post of a traditional Māori waka, which records
4 Our strategy
valuable knowledge, stabilises, and guides the craft forward. Tūhono represents connections to people and
6 What we will focus on in 2018/19 an ability to build relationships.
8 Measuring our performance
9 NZTE’s Performance Framework
What we do Our structure and governance
10 Statement of Performance Expectations
NZTE works to increase New Zealand companies’ The Minister for Economic Development and the Minister
15 Consultation and reporting international success by helping them boost their for Trade and Export Growth has delegated responsibility
16 Prospective Financial Statements global reach and build capability, as well as attracting for NZTE.
for the Year Ending 30 June 2019 investment that benefits New Zealand. We do this using
our knowledge and our international connections. Our Board provides governance over our strategy and
24 NZTE’s International Network future operating intentions, and monitors organisational
performance. The Board makes decisions in accordance
Our customers
with the New Zealand Trade and Enterprise Act 2003
We have two sets of customers: and the Crown Entities Act 2004.
• Export customers are companies growing
from New Zealand.
How we are funded
• Investment customers are the companies, sectors
We are funded by the Government under a Vote
and regions we work with to develop investment
Business, Science and Innovation non-departmental
opportunities, and the investors with whom we match
multi-category appropriation (MCA). In 2018/19, this will
these opportunities.
be $168.3 million for operating expenses and a second
MCA of $31.2 million for co-investment (grants).
NZTE’s network
We have around 600 staff in 40 locations around the How we measure success
world, and 46% of NZTE employees are based outside
NZTE’s performance measures are set out in our
New Zealand. We also draw on the expertise of another
Performance Framework. We report our results against
200 private sector advisors.
this in our Annual Report.
Our partners: NZ Inc
NZTE works closely with other internationally facing
government agencies, known as NZ Inc, to achieve
system-wide outcomes to help grow New Zealand’s
economy. We see our collaboration as critical to our
success. Our key NZ Inc partners include: the Ministry
of Business Innovation and Employment (MBIE), the
Ministry of Foreign Affairs and Trade (MFAT), the Ministry
of Primary Industries (MPI), the Export Credit Office, and
Callaghan Innovation.
Our purpose is to grow
companies internationally
— bigger, better, faster —
for the benefit of New Zealand.
NZTE Statement of Performance Expectations 1ABOUT NZTE
Setting the scene
Our Government is committed to improving the In 2018/19, NZTE will continue its strategy of delivering Within our commitment to export and investment
wellbeing and living standards of New Zealanders value to our two overlapping groups of customers: export customers there are three particular themes, which are
through productive, sustainable, and inclusive growth. customers and investment customers. We’ll be focusing integrated within our overall strategy and are crucial to
As a small country with a domestic market of 4.7 million on consolidating the improvements we’ve made to our success. These are:
people, New Zealand relies on exports to grow our our core operating models: the Customer Way and the • Māori economic development.
economy. The main challenges we face are our distance Investment Way. We’ll also be working on future focused
• Regional economic development.
from key markets and the comparatively small scale of initiatives such as digital delivery of services to customers.
our companies. • Working with New Zealand Inc.
Our export customers are companies that we help to grow
To overcome these challenges and to build resilience and compete internationally. Through the Customer Way, At NZTE, we’re absolutely committed to growing the
in a fast-changing world, New Zealand needs to grow we will continue to work intensively with our Focus700, a New Zealand economy so that everyone benefits. We
competitive, value-added and internationally connected diversified portfolio of knowledge-intensive, value-adding believe that our purpose and strategy are pointing us in
companies. New Zealand needs to make more productive companies and coalitions. We will also continue to improve the right direction, and we continue to learn how to have
use of what we have, and export a diverse mix of goods our one-to-many service offering to our Foundation Build greater impact for our customers. The next year will be
and services to a broad range of markets. To fuel and and Start export customers, many of whom are regional about building on the strength of previous initiatives and
accelerate growth, we need to attract quality investment. based, small to medium sized companies. continuing to seek new opportunities for New Zealand
companies to flourish on the international stage.
As the Government’s international business development We will also continue to work closely with our investment
agency, NZTE’s purpose is to grow companies customers. Through the Investment Way, we match
internationally — bigger, better, faster — for the benefit domestic and international investors with investment
of New Zealand. We aim to increase New Zealand opportunities in New Zealand. In particular, NZTE will
companies’ international success by helping them focus on greenfield and early stage opportunities that
boost their global reach and build capability, as well as stimulate regional growth and offer inclusive benefits
attracting smart investment that enables our regions to to New Zealand. NZTE plays a key role in attracting and
thrive and that benefits New Zealand. We do this using facilitating investment into the regions, and this will be
our collective knowledge and the connections of our enhanced through NZTE’s new responsibilities with the Andrew Ferrier Charles Finny Peter Chrisp
global team. Provincial Growth Fund. Chair, NZTE Board NZTE Board Chief Executive, NZTE
(Left to right) Robin Hapi, Charles Finny, Jennifer Kerr, Andrew Ferrier, Wayne Norrie, Charlotte Walshe, Carmel Fisher, Peter Chrisp.
2 NZTE Statement of Performance Expectations 3ABOUT NZTE
Our strategy
Our customers Three elements are an integral part of our strategy:
Our customers are at the heart of everything we do. 1. Growing more Māori companies of international
We have two sets of customers: export customers and scale across a range of industries, and mobilising
investment customers. To deliver on our purpose and more capital and partners. NZTE has a dedicated
To grow provide value to our overlapping groups of customers, Māori business group with commercial and specialist
WHY companies
NZTE has two operating models: Māori know-how and know-who to engage with our
internationally
BIGGER, BETTER, investment and export customers. NZTE is committed
FASTER The Customer Way to increasing the number of Māori companies we work
for the benefit of with, increasing their impact in international markets
This is how we work with export customers: companies
New Zealand. and building their investment-readiness. Alongside our
we help to grow internationally. Our customers have
NZ Inc partners, NZTE also plays an active role in the
differing growth stages, capability and aspirations, so
KNOW HOW & KNOW WHO implementation of the Māori Economic Development
To grow companies internationally based on this, we have classified our customers into
Strategy, He kei kai aku ringa.
Focus, Build and Start segments. We help customers
to grow their capability and strengthen their business, 2. Working with regional economic development
to boost global reach, and assist customers to connect agencies. Local development agencies are
with other businesses. fundamental to the value we can provide to early stage
WHAT EXPORT INVESTMENT
companies, and to attract investment into regions.
In order to use our resources most effectively and achieve Many of NZTE’s regional offices are co-located with
CUSTOMERS CUSTOMERS
Growing companies Matching investors the most impact, the majority of our efforts are on the local economic development agencies, who are the
from New Zealand with opportunities Focus700 portfolio and Focus coalitions. We’ve weighted backbone of our Regional Business Partner Network.
the Focus700 towards technology, high value food and Local industry connections, advice and business
beverage (F&B), specialised manufacturing and Māori mentors can help these companies start strong.
companies, reflecting the Government’s commitment to
3. Collaborating with NZ Inc to benefit our partners
grow a knowledge-intensive, value-added economy.
and New Zealand. We work with other internationally-
facing agencies, our NZ Inc partners, to achieve
A coalition is a self-selected, business-led group of
AMBITION DRIVES US system-wide outcomes. This includes the Provincial
companies, who are willing to work together for a
ADVENTURE TEACHES US Growth Fund, G2G Know-How and the NZ Story. NZ
common go-to-market purpose. Companies who form
Inc enables our customers to access and benefit from
HOW HONESTY FREES US a coalition can benefit by sharing knowledge, and
the specific expertise of our partners, for example, how
TRUST BINDS US leveraging collective resources, expertise and technology,
to make the most of free trade agreements.
to bolster their chances of long-term success.
MANAAKI IS US
Our Foundation (Build and Start) customers are Measuring growth
generally at an earlier stage in their international journey. NZTE has two headline growth measures that reflect the
They are either committed to getting started, already performance of our two core operating models and which
exporting and wanting to become better, or they may be are aligned to NZTE’s purpose of growing companies
Our purpose Our unique value is in the knowledge companies who prefer a less intense engagement. NZTE internationally – bigger, better, faster – for the benefit of
At NZTE, we’re here to be part of something that is and the connections of our global team supports Foundation customers with the practical tools, New Zealand.
bigger than ourselves: to grow companies internationally We use our knowledge and connections to help knowledge and advice they need to start or build their
— bigger, better, faster — for the benefit of New Zealand. customers grow internationally or match them with the international journey. These headline measures are annual customer revenue
right investment opportunities. We call this our ‘know- growth compared with the performance of similar parts
To mitigate New Zealand’s challenges of distance and how’ and ‘know-who’. Our global team has in-depth Through the Regional Business Partner Network, we of the export economy, and investment impact (pDEI).
scale, and build resilience in a fast-changing environment, knowledge and experience of how to compete in a range also support small, emerging businesses who may be
New Zealand needs to become more internationally tomorrow’s international growth success story.
connected through flows of people, technology and ideas.
of markets. Our international networks and New Zealand One Global Team
government status mean that we know who to call in our
We know that we can only provide optimal value to our
customers’ interests to open doors in global markets. The Investment Way
customers if our global team is aligned in terms of how we
The Investment Way is our operating model for
work together. We share five values or ‘characters’, which
investment customers, focused on matching quality
guide our actions and behaviour. It’s what we do and how
investment with opportunities. NZTE originates and
we treat others. Ambition drives us, Adventure teaches us,
develops New Zealand opportunities for investment,
Honesty frees us, Trust binds us and Manaaki is us.
then matches those opportunities with domestic and
international investors. Investment opportunities may be It’s about how we do what we do – we want to embody
early stage New Zealand companies who need capital these characters to work across continents and time
to expand. New Zealand’s diverse regions and sectors zones. We believe that together, as One Global Team, we
offer unique advantages to investors looking to develop can show the world just how big a small country can be.
‘greenfields’ operations. These can provide significant
benefits shared across New Zealand.
4 NZTE Statement of Performance Expectations 5ABOUT NZTE
What we will focus on in 2018/19
NZTE remains committed to its strategy and core Investment customers Regional Economic Development the New Zealand government and around the world
operating models that enable companies to grow to create an environment that will help our companies
We will continue to support and attract quality In the upcoming year, NZTE will support regional
internationally – bigger, better, faster – for the benefit succeed internationally.
investment to accelerate growth throughout economic development through its role in the Provincial
of New Zealand.
New Zealand. NZTE’s investment team originate and Growth Fund.
In 2018/19, NZTE will focus on the following areas:
develop propositions and then match these with
Through our Ascent improvement programme, we’ve • Work with NZ Inc agencies (including Callaghan
domestic and international investors. NZTE currently has 10 offices around New Zealand that
made strong progress to lift our impact through the Innovation) on a programme to deliver specialised
support exporters, or companies that are interested in
Customer Way and the Investment Way. However, we services to shared customers.
In particular, NZTE will focus on greenfield and early finding out more about exporting. In addition, NZTE
know we can derive more value from these two operating
stage opportunities that offer significant benefits shared works with Callaghan Innovation through the Regional • Work with Callaghan Innovation and relevant Crown
models. In 2018/19, our big focus will be on consolidating
across New Zealand. NZTE plays a key role in attracting Business Partner network. Business Advisors throughout Research Institutes, to encourage more productive
the improvements we’ve made to date to drive even
and facilitating investment into the regions and this will New Zealand provide support and capability assessments use of land by identifying and matching investors and
more impact for our customers. While we strengthen our
be enhanced through NZTE’s new responsibilities with of companies in the regions and are an important feeder opportunities in precision technology agriculture and
core, we’ll also be working on initiatives to get ahead of
the Provincial Growth Fund. into NZTE’s company prospecting. agri-tech.
our customers, such as digital delivery, e-commerce and
channels to market, and a more activist investment model. • Continue to develop measurement capability to
Three themes are integrated within our overall strategy,
Working with NZ Inc assess quality and cost of services, in dialogue with
and are specific areas of focus for NZTE in 2018/19: MBIE. NZTE is committed to understanding the
Our priorities for 2018/19 are set out below: We are committed to building strong and productive
drivers of quality service delivery and efficiency as
relationships with our NZ Inc partners. We know that
Export customers Māori Economic Development we need to work seamlessly with all our partners across
part of its strong customer focus and to enable better
decision making.
Māori companies have a significant role in leading
We will remain focused on growing knowledge-intensive,
growth, due to the strong Māori asset base, a young
value-adding companies through intensive engagement
growing population and the positive impact of a cultural-
with our Focus700 portfolio and Focus coalitions. We’ve
led approach to exporting.
amped up our performance monitoring and portfolio
management to ensure we work with the very best 700
NZTE’s Māori business group will continue to focus on:
companies that are ready for growth. NZTE will continue
to refine this approach. • Increasing the number of Māori companies in the
NZTE portfolio.
We’ll continue to improve our service offering to • Growing the international revenue of Māori companies.
our Foundation Build and Start customers, many of • Supporting the formation of coalitions that include
whom are small to medium sized businesses. We’ll be Māori companies to create economies of scale.
fully implementing our service model for Foundation
• Enhancing Māori export capability, in particular
customers and we’ll also be moving towards greater
investment-readiness capability.
digital delivery of our services to enable us to reach a
broader population of exporters in an easily scalable way.
NZTE is also fully committed and has aligned its
activities to He kei kai aku ringa (HKKAR), the Crown-
NZTE’s International Growth Fund (IGF) is an important
Māori Economic Development growth partnership, and
resource in our company support kit and is a tool to
the action framework Erere. NZTE works closely with
provide direct positive impact for the New Zealand
HKKAR partners to support best practice to grow Māori
economy. We will continue to closely monitor projects
companies. This growth contributes to the regional
funded through the IGF and their subsequent successes
economic development goals in priority regions across
and failures. An ongoing focus for us is to build lessons
New Zealand.
from completed projects back into the process to enable
customers to learn from others’ experiences.
In 2018/19, NZTE will continue rollout of the NZTE-
developed investment-readiness programme,
Te Aukaha. Te Aukaha brings together local Māori
companies and regional investment experts, enabling
the companies to learn more about the capital-raising
process, discuss approaches to assessing investment
opportunities, and explore how investment can enable
their growth aspirations.
6 NZTE Statement of Performance Expectations 7ABOUT NZTE
Measuring our performance NZTE’s Performance Framework
NZTE’s measurement framework is aligned with managing our portfolios and pipelines, and providing
our purpose: to grow companies internationally services that will achieve results for our customers.
– bigger, better, faster – for the benefit of New Zealand. We have a range of indicators to track our servicing Our purpose is to grow companies internationally
We have two headline growth measures, for our two sets
and engagement, such as the number of customers in
our portfolios and the Net Promoter Score, to measure
– bigger, better, faster –
of customers. These provide us with a clear view of how satisfaction with our services. for the benefit of New Zealand.
we are progressing towards our purpose:
• Are export customers growing their international We know that we need to have robust organisational
revenue? health to achieve the outcomes we’re striving for. This
means keeping our finances healthy and keeping a close EXPORT CUSTOMERS INVESTMENT CUSTOMERS
• Are we attracting and matching high quality Annual F700 Customer Growth Annual Investment Impact
eye on the health, safety and engagement of employees.
investment? % International Revenue Growth $ pDEI
To keep us on track, our Board and Leadership Team
NZTE’s impact on our customers is the key to achieving
monitor organisational performance through a monthly
growth. We look at measures such as:
dashboard of key performance indicators. At an
• Are export customers achieving deals in-market as a operational level, team dashboards provide performance IMPACT MEASURES: Contributions to growth
result of our efforts? information to support decision making, and our
$ Export # International $ International Growth Fund: % Customer View: $ Investment
• Do our customers believe that we are putting them customer facing employees use dashboards to help Deals Growth Outcomes pDEI & rDEI F700 customers in a stronger Deals
in a better position to grow internationally? manage their portfolios. position to grow internationally
To deliver impact, we need to ensure that we are The full set of top level performance measures are
effectively engaging with our customers, actively included in the following pages.
SERVICING & ENGAGEMENT INDICATORS
# F700 # Foundation # Business # Active % Growth # IGF # Days # Services # NPS # Tier 1 # F700
Customers Customers accessing Coalitions Plan Actions & SIF between IGF NPS All Investment Customers
RBPN completed grants consent and Customers deals in the working with
approval pipeline Callaghan
Innovation
ORGANISATIONAL HEALTH
% H&S incidents and hazards
% Employee % PDPs # NPS: % Challenge Traffic % Budget
reported, investigated and
Engagement completed NZ Inc, IP & Strategy Lights (Green) Variance
controlled/closed within 4 weeks
GLOSSARY
F700 Focus700 customers NPS Net Promoter Score IGF
International Growth Fund SPE Measures
pDEI Potential Direct Economic Impact RBPN Regional Business Partner Network IP Internal Partners Non SPE Measures
rDEI Realised Direct Economic Impact H&S Health and Safety
SIF Strategic Investment Fund PDP Performance Development Plan
* By the end of the 2020/21 financial year.
8 NZTE Statement of Performance Expectations 9REPORTING
Statement of Performance Expectations
Our core performance measures represent the majority of NZTE’s spend and reflect the most important aspects
of our business and performance.
International Business Growth Services
Our full suite of organisational measures is shown in the diagram on the previous spread, and our core group of Performance Target Actual Target Target
Measure 2016/17 2016/17 2017/18 2018/19
performance measures are set out in the following pages.
NZTE is funded under two Multi-Category Appropriations through Vote Business, Science and Innovation. Annual growth in international revenue for 3 percentage 3.3 percentage 3 percentage 3 percentage
NZTE’s F700 customers with international points above points above points above points above
NZ export NZ export NZ export NZ export
revenue under $500m benchmark benchmark benchmark benchmark
NZTE’S Multi-category appropriations 2018/19 $m $ potential Direct Economic Impact (pDEI) for $1.5b $1.7b $2b $2b
investment deals
Category: International business growth services 147,298
Services to support the growth and development of New Zealand businesses 15,181 Total value of export deals1 achieved with Exceeds $1.8b $1.5b $1.5b
Collaborative activity and special events 5,786 NZTE involvement 2015/16 result
($1.5b)
Grants: International Growth Fund 30,027
Number of International Growth Outcomes (IGOs) Meets or 890 700 700
Sector Strategies and Facilitation – Strategic Investment Fund 1,204 exceeds
achieved with NZTE involvement2
2015/16 result
Total 199,496 (635)
% F700 that consider to a great or very great New measure 57%3 60% Meets or
extent that NZTE has put them in a stronger in 2017/18 exceeds
2017/18 result
position to grow internationally
International Business Growth Services Total Net Promoter Score for Foundation New measure +233 +30 Meets or
We support individual or groups of companies to enhance their global reach and grow in international markets, and Build customers in 2017/18 exceeds
match quality investment with opportunities, the growth of whom benefits New Zealand. This output is our greatest 2017/18 result
area of focus. Total Net Promoter Score for NZTE services +45 +62 +50 +50
We help individual or groups of companies to internationalise by:
• Improving their capability and readiness. Activity Activity Actual Activity Activity
• Identifying and exploiting market opportunities. Indicator Standard 2016/17 Standard Standard
• Overcoming internationalisation barriers and enabling access to international business networks. 2016/17 2017/18 2018/19
Number of F700 customers in NZTE’s 690-720 671 670-730 650-750
We help potential recipients of investment funds, and investors looking to invest in New Zealand business customer portfolio4
opportunities by:
• Identifying and connecting with investors domestically and internationally. Total number of customers in NZTE’s foundation 3000-3500 4365 3500 (demand 3500 (demand
customer portfolio (demand driven) driven)
• Matching quality investment with New Zealand opportunities in target sectors. driven)
Number of coalitions under active management 20 (demand 24 25 (demand 25 (demand
Our customer managers and international teams provide tailored support, advice and linkages for our internationalising driven) driven) driven
customers. Around this, we wrap services to build capability, connect with global opportunities, access capital and
develop effective strategies for growth.
2018/19 Revenue And Expenses $m
Revenue Crown 147,298
Revenue Other 4,966
Total Revenue 152,264
Expenses 152,264
Net Result 0
1 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 an agreed signed contract.
2 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.
3 Unaudited results.
4 Activity standard is the number of F700 customers in NZTE’s customer portfolio at the end of the financial year.
10 NZTE Statement of Performance Expectations 11REPORTING
Statement of Performance
2018/2019
Services to support the growth and Collaborative Activity and Special Events
development of New Zealand businesses We collaborate with other New Zealand agency partners to leverage New Zealand’s profile in international
markets, and secure and capitalise on special events or opportunities that support New Zealand’s export growth.
We build and enhance business and management capability by providing access to effective assessment,
advice, training, mentoring and information.
Activities within this output include:
Services funded under this output are mainly delivered via the Regional Business Partner Network or other third • G2G Know-How – established with MFAT to internationalise our public sector skills, systems and know-how.
party providers. • The New Zealand Story – a free business toolkit, delivered with NZ Inc partners, to help New Zealand businesses
The Regional Business Partner Network is a network of 14 regional organisations that are jointly funded by NZTE and promote themselves internationally.
Callaghan Innovation to deliver specialist services, support and funding to enhance business management capability • Leveraging special events.
and grow business investment in research and development.
2018/19 Revenue And Expenses $m
2018/19 Revenue And Expenses $m
Revenue Crown 5,786
Revenue Crown 15,181 Revenue Other 783
Revenue Other 0 Total Revenue 6,569
Total Revenue 15,181 Expenses 6,569
Expenses 15,181 Net Result 0
Net Result 0
Performance Target Actual Target Target
Performance Target Actual Target Target Measure 2016/17 2016/17 2017/18 2018/19
Measure 2016/17 2016/17 2017/18 2018/19
Value of contracts secured through $21m $15.1m $16m
Total Net Promoter Score for the Regional Meets or exceeds +60 +60 +60 G2G Know-How Cumulative Cumulative target for the period
2015/16 result target for the Jul 17 – Jun 19
Business Partner Network period
(+56)
Jul 14 – Jun 17
Total Net Promoter Score for the Meets or +53 +52 +52
New Zealand Story exceeds
Activity Activity Standard Actual Activity Standard Activity Standard 2015/16 result
Indicator 2016/17 2016/17 2017/18 2018/19 Total number of organisations working New measure NA Baseline Meets or
with Callaghan Innovation and NZTE as in 2017/18 exceeds
Number of businesses receiving business 5,000 6,015 5,000 5,000 2017/18 result
development services through the Regional (demand driven) (demand driven) (demand an F700 customer
Business Partner Network driven)
12 NZTE Statement of Performance Expectations 13REPORTING
Statement of Performance
2018/2019
Consultation and reporting
Grants 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
NZTE administers two grants: and the Minister for Trade and Export Growth with regular reports.
International Growth Fund (IGF)
Three progress reports will be provided in 2018/19 for the periods July – October, November – February and
The IGF supports high-growth businesses to carry out additional market development and business capability activities
March – June. These will be provided within 30 days following the end of each period. These reports will cover:
required for internationalising and growth in new markets. This delivers benefits for both the businesses concerned and
the wider New Zealand economy. • Progress against key performance indicators.
• Key organisational risks.
Sector Strategies and Facilitation (Strategic Investment Fund)
• Financial management.
The Strategic Investment Fund co-funds feasibility studies. These studies are used to develop and present the business
case for investment in New Zealand. • Areas of ministerial priority.
Ministers and relevant government agencies are consulted before NZTE makes a decision regarding:
2018/19 Revenue And Expenses $m • Any material change in the capability and functionality of NZTE’s network (in New Zealand and internationally).
International Growth Fund • Any activities that are potentially outside of the scope of appropriations made by Parliament or relevant
Revenue Crown 30,027 legislation applying to NZTE.
Revenue Other 0 • Any significant organisational decisions that will give rise to Parliamentary interest or public debate.
Total Revenue 30,027
Expenses 30,027 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.
Net Result 0
NZTE is also committed to sharing information with our NZ Inc partners. We undertake to provide regular updates,
Sector Strategies and Facilitation insights and analysis on areas of mutual interest.
Revenue Crown 1,204
Lastly, we will be working with MBIE to share knowledge and practices so that we can better understand and
Revenue Other 0
demonstrate our impact on companies and the economy.
Total Revenue 1,204
Expenses 1,204
Net Result 0
Performance Target Actual Target Target
Measure 2016/17 2016/17 2017/18 2018/19
Potential Direct Economic Impact ratio for 4 to 1 4.2 to 1 4 to 1 4 to 1
approved IGF grants5
Realised Direct Economic Impact ratio for 4 to 1 6.1 to 1 4 to 1 4 to 1
completed IGF projects6
Activity Activity Standard Actual Activity Standard Activity Standard
Indicator 2016/17 2016/17 2017/18 2018/19
Number of IGF grants awarded 80 (demand 82 80 (demand driven) 80 (demand
driven) driven)
Number of SIF grants awarded 6 (demand 5 6 (demand driven) 6 (demand
driven) driven)
5 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.
6 Results are based on completed IGF projects for IGF grants approved in the preceding five years.
14 NZTE Statement of Performance Expectations 15REPORTING
Prospective Financial Statements
For the year ending 30 June 2019
Statement of Comprehensive Revenue and Expense Statement of Financial Position
Budget Budget
2019 2019
$000 $000
Income Current Assets
Cash 9,574
Revenue Crown Operating 168,265
Trade and other receivables 17,641
Revenue Crown Grants 31,231
Crown debtor – grants 13,600
Other operating income 5,749
Prepayments 3,000
Finance income 610
Deposits 400
Total income 205,855
Total Current Assets 44,215
Non Current Assets
Expenditure
Deposits 1,780
Personnel costs 94,019
Property, plant and equipment 14,244
Other operating expenses 75,605
Intangible Assets 3,956
Depreciation and amortisation expense 5,000
Total Non Current Assets 19,980
Grant expense 31,231
Total Assets 64,195
Total Expenditure 205,855
Net Surplus/(Deficit) 0
Current Liabilities
Trade and other payables 19,651
OTHER OPERATING EXPENSES
Employee benefits and provisions 6,050
Other operating expenses include the following major categories: development and implementation of iPlans, business
capability services, rental expense on operating leases, and promotional activities. Finance and other liabilities 130
Provisions – grants 13,600
Total Current Liabilities 39,431
Non Current Liabilities
Statement of Changes in Equity Employee benefits 2,537
Budget Finance and other liabilities 2,195
2019 Total Non Current Liabilities 4,732
$000 Total Liabilities 44,162
Net Assets 20,033
Equity at the beginnning of the year 20,033
Equity 20,033
Net operating Surplus/(Deficit) for the year 0
Total Recognised Revenue and Expenses 20,033
Equity at the end of the year 20,033
16 NZTE Statement of Performance Expectations 17REPORTING
Statement of Costs by Output Expense Statement of Cash Flows
Budget Budget
2019 2019
$000 $000
International Business Growth Services 147,298 Net cash flows from:
Services to Support the Growth and Development of NZ Businesses 15,181 Operating activities:
Collaborative Activity and Special Events 5,786 Revenue from Crown – operating 167,028
Total 168,265 Revenue from Crown – grants 31,231
Client and other income 5,749
Interest received 610
Statement of Grant Expense Payments to suppliers (72,945)
Budget Payments to employees (93,819)
2019 Payments to grant recipients (31,231)
$000 Capital Charge Paid (1,202)
Net Cash Flows from operating activities 5,421
International Growth Fund 30,027
Sector Strategies and Facilitation 1,204
Investing activities
Total 31,231
Proceeds from sale of property, plant and equipment –
Purchase of property, plant and equipment (2,240)
Reconciliation: Statement of Costs by Output Class to Total Expenditure Purchase of intangible assets (2,000)
Net Cash Flows from investing activities (4,240)
Budget
2019
Net increase/(decrease) in cash and cash equivalents 1,181
$000
Cash and cash equivalents at beginning of year 8,393
Statement of Costs by Output Class 168,265 Balance cash at end of period 9,574
Revenue Crown Grants 31,231
Sundry Revenue, including Interest 6,359
Total Expenditure per Statement of Comprehensive Income 205,855
18 NZTE Statement of Performance Expectations 19REPORTING
Accounting Policies
REPORTING ENTITY PROPERTY, PLANT AND EQUIPMENT
NZTE is a Crown Agency as defined by the Crown Entities Act 2004 and is domiciled in New Zealand. NZTE’s parent is the Property, plant and equipment asset classes consist of computer hardware, leasehold improvements, furniture and office
New Zealand Crown. equipment, and motor vehicles. Property, plant and equipment are shown at cost, less any accumulated depreciation and
The consolidated financial statements of the Group consist of the parent entity NZTE and its subsidiaries, NZ G2G Partnerships impairment losses.
Ltd, NZTE Limited and the wholly owned foreign entity, New Zealand Trade and Enterprise Consulting (Shanghai) Co. Limited.
Leased assets
NZTE’s primary objective is to encourage and promote economic development and investment opportunities in New Zealand,
Leases where NZTE assumes substantially all the risks and rewards of ownership are classified as finance leases. The assets
as opposed to making a financial return.
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
NZTE has designated itself as a public benefit entity (PBE) for financial reporting purposes. minimum lease payments at inception of the lease, less accumulated depreciation and impairment losses.
Foreign currency transactions Additions
Foreign currency transactions (including those for which forward exchange contracts were held) are translated into The cost of an item of property, plant or equipment is recognised as an asset only when it is probable that future economic
New Zealand dollars using the exchange rates prevailing at the date of transaction. Foreign exchange gains and losses benefits or service potential associated with the item will flow to NZTE and the cost of the item can be measured reliably.
resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and Where an asset is acquired at no cost, or for a nominal cost, it is recognised at fair value when control over the asset
liabilities denominated in foreign currencies are recognised in the Statement of Comprehensive Revenue and Expense. is obtained.
Accounting estimates and judgements Disposals
Application of NZTE’s accounting policies requires the use of estimates and judgements. The estimates are based on historical Gains and losses on disposals are determined by comparing the proceeds with the carrying amount of the asset. Gains and
experience and other factors that are believed to be reasonable. Actual results may differ from these estimates. The areas of losses on disposals are included in the Statement of Comprehensive Revenue and Expense.
significant estimation and judgement are as follows:
• grant accrual Subsequent costs
• useful lives of property, plant and equipment, Costs incurred subsequent to initial acquisition are capitalised only when it is probable that future economic benefits or service
• useful lives of intangible assets 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.
SIGNIFICANT ACCOUNTING POLICIES
The following significant accounting policies, which materially affect the measurement of financial results and financial
Depreciation
position, have been applied consistently to all periods presented in these financial statements. 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:
REVENUE CROWN OPERATING AND REVENUE CROWN GRANTS
Computer hardware 3 years 33%
NZTE receives 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 Furniture and office equipment 4 to 5 years 20% to 25%
the funding and it is recognised as revenue at the point of entitlement. Leasehold improvements up to 9 years 11% to 33%
NZTE receives funding from the Crown for grants as set out in the Statement of Performance Expectations and the scope of Motor vehicles 4 years 25%
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. Grant expenditure is recognised when Leasehold improvements are depreciated over the unexpired period of the lease or the estimated remaining useful lives of the
the third party recipient incurs expenditure that meets the grant conditions. These two revenue streams are considered non- improvements, whichever is the shorter. The residual value and useful life of an asset is reviewed, and adjusted if applicable, at
exchange transactions. each financial year end.
CAPITAL CHARGE INTANGIBLE ASSETS
The capital charge is recognised as an expense in the period to which the charge relates. 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
CASH AND CASH EQUIVALENTS intangible asset. Direct costs include software development, employee costs and an appropriate portion of relevant overheads.
Cash and cash equivalents include cash on hand, deposits held on call with both domestic and international banks, and other Staff training costs, costs associated with maintaining computer software, and costs associated with the development and
short-term, highly liquid investments, with original maturities of three months or less. maintenance of NZTE websites are recognised as an expense when incurred.
TRADE AND OTHER RECEIVABLES
Trade and other receivables are recorded at the amount due, less any provision for uncollectability.
20 NZTE Statement of Performance Expectations 21REPORTING
Amortisation Trade and other receivables and payables
The carrying value of an intangible asset with a finite life is amortised on a straight-line basis over its useful life. Amortisation For receivables and payables with a remaining life of less than one year, the notional amount is deemed to reflect the fair value.
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 Capital management
major classes of intangible assets have been estimated as follows: 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,
Computer software (developed) 3 to 5 years 20% to 33% which imposes restrictions in relation to borrowings, acquisition of securities, issuing guarantees and indemnities and use
Computer software (acquired) 4 to 5 years 20% to 25% of derivatives. NZTE will comply with these restrictions throughout the period. 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
IMPAIRMENT OF NON-FINANCIAL ASSETS
In the normal course of business, NZTE is exposed to credit risk from cash and term deposits with banks, trade and other
Property, plant and equipment and intangible assets that have a finite useful life are reviewed for impairment whenever events receivables, and derivative financial instrument assets. For each of these, the maximum credit exposure is best represented
or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for by the carrying amount in the Statement of Financial Position.
the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an
Concentration of credit risk from accounts receivable are limited due to the large number and variety of customers. MBIE is
asset’s fair value less costs to sell and value in use.
the largest single debtor (approximately 99 percent). As the government-funded purchaser, it is assessed to be a low risk,
Value in use is depreciated replacement cost for an asset where its future economic benefits or service potential are not high-quality entity.
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. b) Interest rate risk
NZTE has interest rate risk arising from interest bearing Call Account and Term Deposit balances. NZTE manages its exposure
If an asset’s carrying amount exceeds its recoverable amount, the asset is impaired and the carrying amount is written down
to interest rate risk by regularly reviewing placement of funds.
to the recoverable amount. The total impairment loss is recognised in the Statement of Comprehensive Revenue and Expense.
c) Liquidity risk
For assets not carried at a revalued amount, the reversal of an impairment loss is recognised in the Statement of
Comprehensive Revenue and Expense. 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.
FINANCIAL RISK MANAGEMENT d) Foreign currency risk
NZTE’s principal financial instruments (other than derivatives), comprise cash and short-term deposits. The main purpose of NZTE has offices overseas and undertakes transactions denominated in foreign currencies. As a result of these activities
these financial instruments is to fund NZTE’s operations. NZTE has various other financial instruments such as trade debtors exposures in foreign currency arise. The currencies giving rise to this risk are primarily the United States dollar, Chinese
and trade creditors which arise directly from its operations. NZTE also enters into derivative transactions consisting principally renminbi, Euro, Great Britain pound, Hong Kong dollar, Singapore dollar and Australian dollar. It is NZTE policy to hedge
of forward currency contracts. The purpose of these is to manage the currency risks arising from NZTE’s operations. It is foreign currency risks and use forward and spot foreign exchange contracts to manage this exposure. In accordance with
NZTE’s policy that no trading in financial instruments shall be undertaken. Crown policy, the foreign exchange contracts are completed approximately nine months before the financial year begins.
NZTE is exposed to credit risk, interest rate risk, liquidity risk and foreign currency risk. NZTE’s senior management oversees The appropriation from the Crown for the financial year is primarily based on the same foreign exchange contracted rates.
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 Forecasted transactions
accordance with NZTE’s policies and procedures. 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
Financial instruments categories and fair value directly in the Statement of Comprehensive Revenue and Expense.
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. Recognised assets and liabilities
Changes in the fair value of forward exchange contracts that economically hedge monetary assets and liabilities in foreign
Estimation of fair values analysis currencies and for which no hedge accounting is applied are recognised in the Statement of Comprehensive Revenue and
Major methods and assumptions used in estimating the fair values of financial instruments are summarised below: 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.
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. COST OF SERVICE STATEMENTS
Where discounted cash flow techniques are used, estimated future cash flows are based on management’s best estimates and The cost of service statements, as reported in the Statement of Costs by Output Expense, shows the net cost for the outputs
the discount rate is a market related rate for a similar instrument at balance date. Where other pricing models are used, inputs of NZTE. It is represented by the costs of providing the output less all revenue that can be allocated to these activities. NZTE
are based on market-related data at balance date. has derived the net cost of service for each of its significant activities using the cost allocation system outlined below.
22 NZTE Statement of Performance Expectations 23OPERATIONS
NZTE’s international network
EuropeEurope
North America
North America
Tehran Tehran GreaterGreater
China China
Chengdu
Chengdu
India, Middle
India, Middle
East And
East
Africa
And Africa
East Asia
East Asia Bogotá Bogotá
Port Moresby
Port Moresby South America
South America
Australia
Australia
and theand
Pacific
the Pacific São Paulo
São Paulo
Brisbane
Brisbane
New Zealand
New Zealand
OfficesOffices
OUR IN-MARKET SUPPORT
7 regions
40 languages
40 international locations
200 private sector advisors
270 offshore NZTE employees
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