G45 AR (2015)

NZTE ANNUAL REPORT 2014/2015 NZTE’s Story 1

Annual Report 2014/2015 Contents

02 32 45 Our purpose is simple: to grow NZTE’s Story Performance Measures Financial Statements companies internationally — bigger, better, faster — 02 Executive Summary 32 Our Performance 45 Financial Statements for the benefit of New Zealand. Measurement Framework 04 Our Strategy 49 Notes to Financial 34 Statement of Statements 05 Delivering on our Responsibility Strategy 71 Independent Auditor’s 35 Statement of Opinion 05 Growing companies Performance internationally: 73 Other Statutory The Customer Way Reporting Requirements 12 Matching capital 75 NZTE’s International with opportunities: Network The Capital Way 15 Services 22 Delivered with NZ Inc 22 Special focus areas: Māori and regions 25 Growing and Evolving Internally 25 Evolving our digital knowledge platform and processes 25 Our people 29 Governance and Accountability 30 What We Have Learnt About Companies 31 What We Have Learnt About Ourselves NZTE ANNUAL REPORT 2014/2015 NZTE ANNUAL REPORT 2014/2015 2 NZTE’s Story NZTE’s Story 3

Executive Summary MEASURE 2011 2015

New Zealand Trade and Enterprise • Evolved the way we work with competence. Employee engagement (NZTE) is the Government’s groups of companies, or ‘coalitions’. has again lifted to 81%, up from 69% in international business development As at June 2015, we were working 2011. We continue to believe that the agency. Our purpose is to grow with 24 coalitions, across sectors stronger the employee engagement, companies internationally such as ICT and services, F&B, the better the customer experience. F700 PORTFOLIO TOTAL – bigger, better, faster – and agritech. In February 2015, we underwent a INTERNATIONAL REVENUE for the benefit of New Zealand. • Stepped up our role in facilitating positive Performance Improvement $21b $34b Over the last year, we focused on capital flows from both domestic Framework (PIF) review with reviewers developing and expanding our and international investors into noting, “NZTE has enabled a focused, underlying operating model while targeted sectors and regions. The fast-paced and very effective delivering results for customers. underlying operating model, ‘The transformation involving every aspect In 2014, as part of the Business Growth Capital Way’, is designed to match of the business”. It also gave us a clear Agenda (BGA), the Government willing investors with qualified view of what we need to do to lift our committed an additional investment investment opportunities, and game to the next level of performance. TRADE DEALS of $69m over four years, targeted at measure both deal flow and results. We believe that our results to date increasing the number of companies m b In 2014/15, international revenue for and feedback from our customers tell $403 $1.1 we work with and growing our customers in our F700 portfolio was us we are on the right track. We are international network. The BGA also $34b, up $6.7b from last year, with confident in our operating models of aims to diversify both products and a portfolio growth rate of 8.7%1 . We The Customer Way and The Capital markets. Accordingly, NZTE efforts worked with customers to generate Way and believe that staying true to have been weighted towards the $1.1b in new export deals, over $300m these methodologies will deliver the value added part of the economy, more than last year, and 91% of our greatest impact for our customers. specifically added value food and customers said that we added value to CAPITAL DEPLOYED beverage (F&B), ICT and services, In this coming year, we will continue their business. To support growth, we and specialised manufacturing, as our improvement journey and climb m m helped deploy $866m of capital, with $505 $866 well as attracting investment which to the next level of performance. a potential direct economic impact for benefits New Zealand. We will continue to weight our efforts New Zealand of $1.45b. to support the BGA’s strategy to In keeping with this broad strategy, We have worked in partnership with diversify the economy and develop we have: other NZ Inc agencies including: greater value-add in New Zealand’s • Continued to refine our underlying products and services. To achieve this • MFAT: together we established operating model ‘The Customer success, we need to execute our NZTE G2G Know-How, a joint venture to Way’. Under this framework we strategy with tight focus, detailed F700 INTERNATIONAL take NZ government skills, systems segment customers, discover their discipline, energy and passion. REVENUE GROWTH and know-how to market on a needs, plan for delivery, deliver COMPANIES UNDER $500M REVENUE 2% 8.7% commercial basis. G2G generated services in both in New Zealand $9.37m in its first year of operation. and internationally, and measure results. • MFAT, MPI, Tourism, Education and TPK and the private sector: • Ramped up our efforts to grow to support the launch and evolution our intensively managed portfolio, of the NZ Story. the Focus 700 (F700) from 500 to Andrew Ferrier Charles Finny • The Te Hono Bootcamp, F700 VALUE ADD 700. As at June 2015 we reached Chair, NZTE Board NZTE Board 621 companies, with a goal of a business-led private/public

increasing to 700 by June 2016. collaboration aimed at adding 82% 91% We are half way there. value to the Primary Sector.

• Boosted our presence in South The internal journey also continues, America, Australia, Saudi Arabia with intensity. In the last year, we’ve Peter Chrisp increased the capability of our staff and China to better serve our Chief Executive, NZTE customers, with further resources in customer-facing roles and we to be rolled out in the coming year. continue to lift business acumen and October 2015 EMPLOYEE ENGAGEMENT 1 International Revenue of F700 companies under $500m 69% 81% NZTE ANNUAL REPORT 2014/2015 NZTE ANNUAL REPORT 2014/2015 4 NZTE’s Story NZTE’s Story 5

Our Strategy Delivering on our Strategy Growing companies internationally: The Government’s Business Growth Over the last year, we have refined our We deliver a range of services to Agenda (BGA) is our light on the hill. strategic framework to better reflect these groups of customers, matched Working alongside other agencies, our dual focus: growing companies to their business needs, which we aim The Customer Way we are a key player in helping to one-on-one and in coalitions, and to deliver at the right time and in the achieve the BGA goal of increasing matching capital with opportunity. right place. exports from 30% to 40% of GDP by We have two sets of customers, the Three enabling platforms are Behind every engagement with our in New Zealand and international Our annual Customer Experience 2025. Our particular areas of focus are growth of whom benefits fundamental to our strategy: our internationalising customers is The markets, to support the customer’s Survey, carried out in March 2015, in the Export Markets and Investment New Zealand: people, our technology and our NZ Customer Way. Rolled out in 2013/14, international growth goals. asked customers to report on workstreams. We need to attract high The Customer Way is our customer whether NZTE has added value to Inc partners. The performance of our We’ve continued to embed The quality investment into all parts of 1. The companies who are growing engagement engine. It is a consistent, their business. For F700 customers, people, supported by a fast, intuitive Customer Way in 2014/15 with internal New Zealand, and to develop internationally either individually or collaborative, problem solving this year’s survey has shown an and secure digital platform is vital to targets set around ingraining key companies that are able to add value in coalitions. approach that is designed to add value improvement in our overall Value Add adding value for our customers. processes, lifting the capability of to volume in an increasingly Asia and accelerate international growth. score, from 89% in 2014 to 91% this 2. Potential recipients of investment We work closely with our NZ Inc our customer facing employees, and Pacific world. We can contribute year. Pleasingly, there was a significant funds, and investors looking to partners on key areas of collaboration, The Customer Way provides a raising quality of engagement and to this by growing companies increase in the ‘top box’ (strongly invest in New Zealand business such as G2G Know-How, the NZ Story framework to capture and understand action plans. internationally – bigger, better, faster – agree) result, rising from 38% to 43%. opportunities. and delivering actions under the BGA. a customer’s business model, strategy for the benefit of New Zealand. We firmly believe that only a joined up The Customer Way applies to our work We also saw the customers’ verbatim and specific targets for key markets. approach with our NZ Inc partners will both one-on-one with customers, and comments reflecting and supporting Then, we wrap around a tailored deliver real impact over time. with groups of customers. The Customer Way approach. package of services, delivered both

CUSTOMERS DISCOVER PLAN PERFORM Every customer is unique Customer needs Customised plan Deliver services BUSINESS GROWTH AGENDA

Strategy GROW COMPANIES INTERNATIONALLY Brand and Design ­BIGGER, BETTER, FASTER Discover FOR THE BENEFIT OF NEW ZEALAND Canvas Access to Markets

Global Leadership

GROWING COMPANIES: MATCHING CAPITAL Access to Capital ONE-ON-ONE AND IN WITH OPPORTUNITY COALITIONS Other NZ Inc. services: – Callaghan Innovation – MFAT – R&D – MPI – Leadership – MBIE RIGHT SERVICE, RIGHT TIME, RIGHT PLACE – Regional Partners – Strategy – Capital – Marketing OUR PEOPLE – Operations – Markets

DIGITAL KNOWLEDGE PLATFORM

PARTNERSHIP WITH NZ INC. 6 ONE-ON-ONE WORKING WITHCOMPANIES Coalitions Focus 700 and 621 collaborate to compete internationally. and objective growth international have ashared willing the of coalitions of companies. These business-led groups with intensively work We also value. significant add we can to which and us, with to work keen are who ambitions, growth international strong with companies value-adding of aportfolio is F700 The F700. our impact, greatest have the we can where resources our of most We focus EXPORT GOODS + SERVICES EARNINGS, YEAR TO DECEMBER 2014* DECEMBER TO YEAR EARNINGS, +SERVICES GOODS EXPORT $ NZTE’s Story NZTE ANNUAL REPORT2014/2015 44 b $ 6 $

b 4 b earning < $5 million <$5 earning COMPANIES 12,000 F700. to our pipeline the form potential growth have high that customers customer Foundation managers. Foundation with engagement touch alight and services our of to avariety access We provide growth. of stages various at companies of group diverse avery are customers Foundation Our customers Foundation 3,389 $5 – $25 million –$25 $5 595 COMPANIES

> million $25 COMPANIES 255

NUMBER OF NEW ZEALAND EXPORTERS ZEALAND NEW OF NUMBER

growth. growth. business to support and capability management to lift training and advice with businesses to medium small we support Network, Partner Business Regional our Through Zealand. New across businesses exporting future of pipeline the toWe strengthen aim businesses Small to medium 3,475 WE HAVE 4,000 CUSTOMERS F700 customers Foundation customers MORE SMALLCOMPANIES INLOWER BANDS NUMBER OFF700 COMPANIES BY INTERNATIONAL REVENUEBAND: customers one-on-one. were engagedintensively with621 by June2016. Asat June2015, we of companies. We aimto reach 700 growth supportfor alarger number in order to provide international high intensity portfolio, ourF700, In 2014/15, we setoutto grow our OUR F700 PORTFOLIO international revenue bands. bands. revenue international lower in companies towards shifted has balance portfolio the a result, As their internationalisation journey. in earlier companies with engaging we are means companies ICT stage early growing, fast on focus Our PORTFOLIO COMPOSITION: F&B 28%,MANUFACTURING 28%,ICT23% F700 BY SECTOR: Number of companies Number of companies 0 50 100 150 200 250 0 50 100 150 200 250 51 Biotechnology 166 Under $3m 55 63 232 Creative &Services Creative 62 139 $3m-$10m 61 companies offering knowledge- knowledge- offering companies those in we segment BGA, the within strategy diversification the Reflecting revenue. international their to double goal long-term the with F700, the on resources and time our of majority the concentrate We internationally. to compete capability the and ambition the hunger, have the companies These Although we only have a small number number have asmall we only Although portfolio. the of revenue international total the of 55% for accounts companies of group this but $500m, over of band revenue international the in are customers F700 our of 2% or 12 only scale, the of end other At the 147 72 International Revenue Band $10m-$25m 89 117 Sector 100 F&B 144 173 $25m-$100m 76 90 90 from $12b to $18b this year. this to $18b $12b from growing revenue international total combined their with economy, export to the amount ahuge contributes group this size, this of customers of Māori companies.Māori and ICT have targeted intakes recent most the this, Within manufacturing. specialised third one and services and ICT third one beverage, and food value added third one approximately approaching is portfolio the this, of aresult As services. and products premium value-adding intensive, NZTE ANNUAL REPORT2014/2015 ICT 102 $100m-$500m 40 140 40 NZTE’s Story 147 Manufacturing Over $500m 10 161 2014/15 2013/14 12 173 2014/15 2013/14 2012/13 7 NZTE ANNUAL REPORT 2014/2015 NZTE ANNUAL REPORT 2014/2015 8 NZTE’s Story NZTE’s Story 9

GROWING F700 CUSTOMERS Our purpose is to help companies and in turn, make a larger contribution Below the topline growth figure for the dairy sector: 78% of growth came was biotechnology, which shrunk by grow, to move up into higher to the export economy for the benefit the F700 (less than $500m) portfolio, from 14 companies in the dairy sector, $20m. Our strategy focuses on doubling the international revenue bands of New Zealand. there is solid growth across most which had a combined growth of We will continue our focus on international revenue of our customers. sectors. By international revenue, $701m. However, we also see solid companies in the ICT, specialised F&B companies make up the largest growth across other sectors in the manufacturing and high-value F&B F700 COMPANIES WHO MOVED INTERNATIONAL REVENUE BAND: portion of our F700 portfolio, at portfolio, particularly ICT, which grew 68 COMPANIES MOVED UP A REVENUE BAND sectors, helping these companies around 40% of the total portfolio 10% or around $180m. The creative Moved down to grow and in time make a larger value, and contributed growth of 15% and services, and manufacturing Moved up contribution to the value of the or around $900m. The strong growth sectors both grew by around $90m. 35 Reading the chart: portfolio and the export economy. in F&B is due largely to results from The only sector which did not grow A total of 29 companies moved into the 30 $3m-10m international revenue band in 2014/15. Four moved down from a higher 4 band, and 25 moved up from a lower band. 25 25

20 2 F700 (COMPANIES LESS THAN $500M) ANNUAL GROWTH IN INTERNATIONAL 3 REVENUE BY SECTOR: GROWTH ACROSS MOST SECTORS 19 15 17

14 10

5 5 F & B 15%

Number of companies changing band changing companies of Number 2 0 Under <$3m $3m-$10m $10m-$25m $25m-$100m $100m-$500m Over >$500m ICT 10% International revenue band

Creative & Services 5%

OUR F700 PORTFOLIO growth result to 23.6% or 18.2 is more representative of our impact Manufacturing 2% GROWTH percentage points ahead of our export and the performance of the portfolio economy benchmark.2 Without this overall. For the second year in a row, our Biotechnology -2% company, growth is significantly lower. growth results have been affected by To illustrate, in 2014/15, our F700 a few large companies. In 2013/14, Given the effect of a few large customer portfolio (less than $500m) -4% -2% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% companies on our growth results, our grew 8.7%, which is 5.4 percentage this meant performance was below % International Revenue Growth our target. In 2014/15 it is the future headline growth KPIs will only points above our NZ goods and opposite, with the performance of include companies with international services exports benchmark (also a single company lifting our F700 revenue under $500m. We believe this companies under $500m).

F700 (COMPANIES LESS THAN $500M) GROWTH VS SIMILAR NZ Growth of F700 (<$500m int revenue) GOODS AND SERVICES EXPORTS BENCHMARK: F700 TRACKING ABOVE Under $500m NZ Goods & Services Exports Benchmark

10 F700 (<$500m ) 8.7% portfolio growth

8

6 5.4 percentage points

4 NZ Goods & Services Exports Benchmark (<$500m) 3.3% growth rate 2

Percentage Annual Growth Annual Percentage 0

-2 Mar 2013 Jun 2013 Sep 2013 Dec 2013 Mar 2014 Jun 2014 Sep 2014 Dec 2014 Mar 2015

Month-year end

2 We introduced a new benchmark in 2014/15, known as the ‘NZ Goods & Services Exports Benchmark’. This enables us to use a ‘like for like’ approach to better compare the growth of our F700 portfolio with the overall growth of New Zealand’s export economy. The model adjusts for the lag in time when our customer’s data is reported and provides a more relevant comparison. NZTE ANNUAL REPORT 2014/2015 NZTE ANNUAL REPORT 2014/2015 10 NZTE’s Story Case Study 11

WORKING WITH GROUPS OF For businesses, the main drivers Active coalitions have agreed COMPANIES: COALITIONS towards forming a coalition are objectives and are supported by a developing a new product, service or dedicated coalition manager with Case Study: In the same way that we engage with competency quickly, and capitalising an engagement plan that focuses our F700, we work together with on an emerging opportunity by on actions to achieve the coalition’s business-led, go-to-market coalitions working together and sharing costs objectives. Fourteen of our coalitions New Zealand Craft Beer Collective of the willing. These are groups of and risk. Companies who form a are active, and 10 are being fostered. companies focused on international coalition can benefit by sharing growth with a shared commitment in Coalitions have been formed within knowledge, and leveraging collective collaboration to scale up and compete various sectors, including F&B, expertise and technology to bolster THE CUSTOMER OUR INPUT internationally. By the end of 2014/15, agritech, specialised manufacturing, their chances of long-term success. The New Zealand Craft Beer Collective is a coalition of We provided a range of support for the Collective including we identified and supported ICT and services. five craft beer companies – 8 Wired Brewing, Renaissance in-market assistance and introductions, and co-funding 24 coalitions. Coalitions are first segmented as Brewing, Three Boys Brewery, Tuatara Brewing Company, to launch in the UK and to support the appointment of a ‘fostered’, then as ‘active’ when they and Yeastie Boys – formed through a common goal to UK-based New Zealand beer ambassador to help build reach a level of active commitment. tackle the UK market. understanding and consumer awareness of New Zealand craft beer. THE CHALLENGE THE RESULT All members of the Collective had identified that the UK market is an evolving (but exploding) market for craft Using two of each brewer’s ‘hero brands’, the Collective COALITIONS beer. However, they knew it would be difficult for a single, created a portfolio that enabled them to successfully secure small(ish) brewer to be able to offer a suitable range of a distributor, Instil Drinks, and then launch in the UK market. SPECIALISED ICT AND F&B AND styles/offering that would be attractive for a significant At the same time they appointed their NZ Beer Ambassador MANUFACTURING SERVICES AGRITECH distributor. They also realised that they were all separately and continue to generate positive PR and exposure in the shipping small beer volumes to market and paying higher UK Craft Beer channels. By shipping together they have 3 7 14 shipping rates as a consequence. They knew that together achieved greater cost efficiencies, reducing individual costs they could provide a wider product range, more regular by approximately half. Sales in the first six months of being 24 supply, greater volumes, and grow exports faster by jointly in the market are on track and the Collective is positive funding an in-market presence in the UK. Simply put: the about the market growth ahead. whole was greater than the sum of the parts.

WWW.BEERCOLLECTIVE.NZ

UK NZTE ANNUAL REPORT 2014/2015 NZTE ANNUAL REPORT 2014/2015 12 NZTE’s Story NZTE’s Story 13

Matching capital with opportunities: The Capital Way

Lifting New Zealand’s rate of business The matching of these two approaches 3. Expand New Zealand’s pool investment is crucial to growing the is our ‘deal catalogue’. As at June 2015, of smart capital by attracting economy and reaching the overall BGA the total deal potential was $3.9b individual investors and target of lifting exports to 40% of GDP across 72 opportunities. Over 130 entrepreneurs to reside in New by 2025. NZTE is a major contributor active investors were tagged to New Zealand. to the BGA Investment workstream, Zealand investment opportunities. Several government agencies impact which has a key priority to support This methodology is supported by on New Zealand’s ability to attract high and attract investment to accelerate our Better by Capital programme, quality FDI. The Investment Taskforce growth throughout New Zealand. a service which helps companies is a focused and joined-up approach NZTE has developed a systematic prepare for capital and to connect across NZ Inc agencies to overcome operating model to match domestic them with the most appropriate barriers to investment and to develop and international investors with New funding sources. In 2014/15, the investment opportunities. Zealand investment opportunities in Better by Capital programme New Zealand Tech Investment target sectors. mobilised $147m of capital across Showcase in Singapore 21 companies. An additional 82 First, we identify investors through companies exited the programme with Eight New Zealand high-growth tech both our international and New capital capability improvements. companies pitched their business Zealand teams. We have relationships propositions to more than 100 with New Zealand-based private NZTE also delivered two successful international investors at the New sector advisors and corporates, as well investment showcases for New Zealand Tech Investment Showcase as with global investors, corporates Zealand companies to pitch their on 18 March. NZTE Capital’s East and high net worth individuals. business propositions: an ICT event in Asia team organised the event at Singapore, and the NZ Agribusiness The second part of our approach, and Singapore’s ArtScience Museum to Investment Showcase in Palmerston the main focus of our operating model, encourage New Zealand tech firms North. is to identify and develop investment to look towards Singapore, which is opportunities through our New By June 2015, our approach of CAPITAL DEPLOYED increasingly recognising New Zealand Zealand team. We proactively attract matching willing investors with as a start-up hub for tech innovation. investment into sectors where New qualified investment opportunities Company innovations included Zealand can be globally competitive: delivered an annual deal flow of m 2015 wearable sports technology, primary industries, premium food and $866m with a potential direct $866 3D-augmented reality, cloud video beverage, specialised manufacturing, economic impact (pDEI) of $1.45b. production, social media analytics infrastructure, oil, gas and mining, pDEI is the forecast return to the for emergency management, ICT/digital and shared services. NZTE economy through increased profits, mobile indoor mapping technology, also attracts investment into Māori wages and supplier spend. immersive soundtracks for e-books, opportunities and R&D. In addition to this approach, we are retail enablement payment We also work with New Zealand’s now fully engaged in the Investment technology and micro-tasking regions to direct investors towards Taskforce, which as part of the BGA voice-to text transcription services. regions where opportunities are will implement the Government’s Within four months, two companies strongest and the need is greatest. revised New Zealand Investment raised capital from the event. NZTE’s regional investment Attraction Strategy. The strategy has attraction programme identifies and three pillars: develops investment opportunities in the regions to pitch to investors. 1. Attract high-value foreign direct In 2014/15, NZTE completed five investment (FDI) in areas of PDEI workshops with 100 economic competitiveness in New Zealand. development professionals from 14 2. Attract overseas investment in regions around the country to improve R&D, especially multi-national 2015 joint investment attraction and corporations’ R&D activity. $1.45b retention efforts. NZTE ANNUAL REPORT 2014/2015 NZTE ANNUAL REPORT 2014/2015 14 Case Study NZTE’s Story 15

Services Case Study: OPERATIONS MARKETING Streamline the way Create and execute you operate marketing plans Booktrack As part of The Customer and Capital Way operating models, NZTE delivers a range of services, both in NZ and internationally, based on customer THE COMPANY OUR INPUT need. We aim to deliver the right R&D CUSTOMERS CAPITAL service, at the right time and in the Innovate and & MARKETS Access the capital commercialise Connect with and investments Booktrack is an Auckland-based technology company In March 2015 Booktrack participated in our inaugural right place to all our customers. your business global opportunities you need that offers a new content creation and distribution New Zealand Tech Investment Showcase in Singapore, Our services help companies and grow platform that turns reading into an immersive movie-like where the company pitched to around 25 investors. Prior connect with global opportunities, experience. Booktrack’s patented technology lets anyone to the showcase, we provided training and advice on the access capital and develop effective add a synchronised movie-style soundtrack to an e-book development and delivery of their pitch presentation. strategies for growth. Currently, STRATEGY LEADERSHIP or other digital text content, with the audio paced to each we have 40 services in our modular Develop eective Benchmark your individual’s reading speed. THE RESULT service suite, designed to be accessed strategies for growth business against global trends and Through the showcase, Booktrack secured several independently as needed, but can THE CHALLENGE access key people Singapore-based investors, including COENT Venture be grouped together as complete In less than two years, Booktrack has grown its customer Partners, who contributed to its total fundraising round of programmes. base to 2.5 million users worldwide, in particular in New more than $7m. The investment will enable Booktrack to Zealand and the United States. The company wanted to grow faster and stronger in global markets and to acquire attract additional investment from Asia, however, they did premium content. not know who the key technology investors in the region were, or how to get their attention. INTERNATIONAL SERVICES such as identifying and establishing We track both the number of connections with distributors and International Growth Outcomes To provide greater support to our agents, and potential partners, (IGOs) and the value of deals forour customers in market, in the last year as well as advising on offices, customers. An IGO is a milestone we’ve boosted our presence in South staffing and gaining regulatory on the journey to becoming fully America, Australia, Saudi Arabia and approval. We help customers secure established in market (e.g. opening China. Where possible, our sites share deals though a range of activities, an office, hiring employees in market, WWW.BOOKTRACK.COM services with MFAT and other NZ Inc such as introductions to potential or securing a distributor). It is earlier partners. This gives New Zealand customers, hosting and networking in the pipeline than a deal, and a lead companies a bigger footprint on the events, providing technical advice indicator for success. world stage than they could afford about country challenges, and setting themselves. In 2014/15, we recorded 334 IGOs up and facilitating meetings between for our customers, with the majority NZTE’s assistance to our customers buyers and sellers. of these relating to establishing in market is wide ranging and will vary We draw on our government connections in market. Growing based on the individual goals of the imprimatur to assist customers customers’ international sales is customer, the particular challenges SG engaging with foreign government one of the strongest indicators of of a market, and their sector and officials to demonstrate credibility and whether NZTE is getting it right. We size. We aim to help customers build presence. We work closely in market assisted with $1.1b in deals last year, a a sustainable platform in market for with our NZ Inc partners, such as significant increase from the $794m international growth, and ultimately MFAT and MPI, drawing on achieved in 2013/14. achieve trade deals. complementary skills and networks We help customers set up and gain to enable the right introductions, partners in market through activities technical assistance and facilitation.

TRADE DEALS INTERNATIONAL GROWTH OUTCOMES

$1.1b 2015 334 2015 NZTE ANNUAL REPORT 2014/2015 NZTE ANNUAL REPORT 2014/2015 16 Case Study NZTE’s Story 17

MISSIONS AND for our customers. Through an online The Cricket World Cup was also EVENTS DELIVERED IN portal, customers are able to view a utilised as an opportunity to share the Case Study: INTERNATIONAL MARKETS range of NZTE-supported activities NZ Story with participating nations that have been customised to their through social media – reaching more We work with groups of companies sector and the markets they are than 500,000 people. on events such as trade shows, trade NZ Mint targeting. They can then select which missions and leveraging special events, activities they are keen to participate such as the Cricket World Cup. in. E-commerce in China Events in 2014/15 included New Customers have welcomed this During the 2014/15 year, NZTE THE CUSTOMER OUR INPUT Zealand Wine Tasting in Poland, communications tool, which eliminates established platforms on China’s key NZ Mint designs, markets, manufactures, wholesales and Fieldays Chile, and the East Asia e-commerce channels to enable We worked with NZ Mint to identify suitable distribution the need for companies to respond retails commemorative coins. New Zealand Food Connection New Zealand companies to sell direct providers in Beijing and provided guidance and support to individual email invitations sent Roadshow held in seven countries over to consumers online. NZTE has been during the commercial negotiations with the two best from NZTE to participate in different THE CHALLENGE four weeks. We completed a further one of the most active national trade providers. activities and events. nine Minsterial trade missions to agencies in the e-commerce space in The company wanted to enter the China market, where they markets such as the Republic of Korea In 2014/15 our multi-customer work China, with a series of trend-leading THE RESULT knew there was significant demand for their silver Disney and the Gulf Cooperation Council. included: national online B2C promotions and comic character coins. Specifically they wanted to establish In October 2014, four months after identifying suitable the creation of national pavilions on To improve event delivery, we have a relationship with one or more distributors that would providers, NZ Mint signed an agreement with e-commerce e-commerce platforms Tmall and created our Mission and Events Centre Cricket World Cup connect them to retail markets throughout China. operator China Today International, which is linked to YHD. In the case of YHD we were the (MEC), a centre of excellence for This was challenging for NZ Mint as they were new to the the Alibaba electronic trading site and has a distribution During the Cricket World Cup, first country to establish a national event delivery. MEC is NZTE’s central China market and had no existing connections in China. network that extends across all of China. Within two months NZTE worked with 187 companies to pavilion. E-commerce activity has resource, providing specialist event of signing the arrangement, NZ Mint has shipped an order maximise their business opportunities primarily focused on well designed and expertise to onshore and offshore of over 10,000 coins, eclipsing the volume of all past sales and connections as part of our executed promotions complemented trade missions and events. Following to the Chinese market. In addition, NZ Mint has negotiated business leveraging programme. by broader social media activity this, we created a Missions and a multi-year supply agreement based on minimum annual on Weibo and WeChat to attract Events toolkit to assist employees A total of 14 events were hosted during order quantities in the tens of thousands of coins per year. attention. with best practice scoping, planning the World Cup, with 1,194 guests and consistent delivery of global attending. Seven delegations were missions and events. We also also brought to New Zealand through successfully developed and launched collaboration with NZ Inc partnerships. a personalised communications tool WWW.NZMINT.COM

CN NZTE ANNUAL REPORT 2014/2015 NZTE ANNUAL REPORT 2014/2015 18 NZTE’s Story NZTE’s Story 19

We launched three new services in the Business in the Clouds New Zealand and Australia, offered Fieldays 2015 SERVICES DELIVERED IN MEASURING AND IMPROVING last year: a high-profile forum to showcase NEW ZEALAND SERVICE EXPERIENCE To recognise an increase in activity NZTE was the principal sponsor of this expertise as well as investment • Accelerate China helps companies for New Zealand ICT companies in the the Business and International Centre We offer a number of services in In addition to our annual customer opportunities in New Zealand. prepare for the realities and UK market, in June NZTE hosted its (BIC) at Fieldays 2015. New Zealand to provide focused survey, we capture customer feedback complexities of the Chinese market, Business in the Clouds event In partnership with MFAT, MBIE and assistance in areas such as leadership, after completion of a service through With more than 90% of NZTE’s and reduce market entry from 2-3 – a showcase of some of New GNS Science, NZTE led a 200-strong strategy, marketing, operations, R&D our Services Pulse Survey. This agritech companies exhibiting at years to 6 months through a series Zealand’s top retail technology New Zealand contingent, including 17 and capital. enables us to monitor the quality of the annual agri-showcase, NZTE of market immersions focused on: our services and rapidly introduce companies. More than 150 businesses companies with know-how spanning Our services are aligned across NZ worked with the organisers and NZ improvements. Based on a Net and advisors attended the event the geothermal industry value-chain. Inc partners and other economic • Leadership and Governance. Inc agencies to provide the centre Promoter Score (NPS), the survey to gain a greater understanding of development agencies, and as a result, The Congress, which is held every and assist with exhibitors’ business • Understanding Customer and asks if a customer would recommend how New Zealand companies are a number of services are delivered five years, attracted about 1,400 needs and allow local and international Market Needs. transforming the landscape for small the service they just received and international delegates, the largest connections to be made. by Callaghan Innovation, Immigration businesses. Guests were able to see • Validation and Development of what would make them more likely of which were from New Zealand’s New Zealand and the Regional innovative New Zealand technology More than 400 people utilised the a Market Entry Approach. to recommend. NPS is a globally priority markets of the Philippines and Business Partner Network (co-funded that can make running their businesses BIC during Fieldays and many others recognised way of measuring Indonesia. by NZTE and Callaghan Innovation). easier and more efficient. The event attended the various networking customer loyalty and service Our ‘Better by’ programmes are made • International Marketing and shone a spotlight on New Zealand’s Indonesia is considered to have events and market seminars, which experience for products and services. up of a collection of services that Communication Toolkit is an ICT capabilities and resulted in deals the world’s greatest endowment were designed to assist people in build expertise in specific areas, like online, self-service resource Survey recipients are asked to for participating companies. of geothermal resource, while the understanding the challenges and strategy or design. They are delivered offering valuable tips, simple respond using a rating from 0–10. Philippines is the second largest opportunities of exporting. over a set period of time with the help checklists and practical templates Ratings from 0–6 are considered as geothermal energy producer after NZTE also brought two international of private sector experts and one-on- to assist customers with their detractors, 7-8 are passives and 9-10 Showcasing Geothermal the United States. journalists to Fieldays – from Colombia one coaching. We have just over 180 international marketing strategy. are promoters. To determine the NPS, As the world’s fourth-largest generator A post-Congress field trip to New and the UK – who provided a high level private sector experts and in 2014/15, The service is currently made we take the percentage of responders of geothermal power, New Zealand is Zealand also targeted these delegates. of coverage of the New Zealand our customers accessed over 1,800 up of 10 modules, which will be who are promoters, then subtract a world leader in the development of It included geothermal site visits agri-industry back in their home capability services delivered in expanded to include more topics. the percentage who are detractors. geothermal resources. There are few and a three-day course providing an markets. New Zealand. The result across all services for • Better by Procurement is a service developments around the world where overview of New Zealand’s regulatory the year to June 2015 was an NPS NEW SERVICES that offers specialist training our expertise has not played a part. framework and our use of geothermal score of 45, with 55% promoters In 2014/15, we continued to refine and in how to strategise, plan and and 10% detractors. An NPS of 45 is The World Geothermal Congress held resources. embed our service design process. develop tender responses as well considered very good in the services in Melbourne in April, co-hosted by The flexibility of the modular service as understand the post tender sector. suite allowed us to review a number process. It helps companies of services and either refresh or retire increase their win rate and lower them as needed. costs when formally pitching or tendering for contracts.

NPS

+45 2015 NZTE ANNUAL REPORT 2014/2015 NZTE ANNUAL REPORT 2014/2015 20 NZTE’s Story Case Study 21

INTERNATIONAL GROWTH need is greatest, and to enable more FUND F700 customers to access the IGF. Changes were around eligibility and Case Study: The International Growth Fund (IGF) the level of co-investment. supports high-growth businesses to carry out additional market In 2014/15, there were 112 IGF grants approved with a pDEI of 5.3 to 1, or for Discovery Partners development and business capability activities to internationalise and grow every dollar invested, there is a pDEI in new markets. of $5.30.

In 2014, MBIE carried out an evaluation This year we started analysing results THE CUSTOMER THE RESULT from completed IGF projects to see which included reviewing project Discovery Partners is a Māori brand tourism business Following the appointment of a Chief Operating Officer how closely our forecasts match actual completion reports, surveys, and that researches, designs, builds and manages tourism to expand growth internationally, Discovery Partners results, and to see what lessons and interviews of participants, and attractions, telling the story of global iconic brands through secured a cornerstone investor and successfully pitched to insights we can learn that we can consultation with government providing world-class visitor experiences. Manchester City Football Club, becoming the global tourism share with our customers. The results stakeholders. partner for City Football Group (owners of Manchester City from the 96 close-out reports we have The evaluation found that the IGF THE CHALLENGE Football Club and affiliated clubs in New York, Melbourne received to date show a realised direct was achieving its policy objectives and Yokohama). They have a solid pipeline of potential economic impact (rDEI) ratio of 4.8 to The company was a small start-up with limited capability and having a positive impact on the iconic brand partners in the UK and US, new agreements 1, or $4.80 for every dollar invested by and capacity to scale in order to capture the global New Zealand economy. with Dyson Innovation, Rocket Management (owned by government and the business. opportunities they knew existed, in particular in the UK and Sir Elton John) and The All Blacks Experience, and have Europe. Following the evaluation, four key cemented themselves as a global leader in the new ‘brand policy changes were implemented in tourism’ sector. order to focus on customers where the OUR INPUT Through Fresh Thinking workshops we helped Discovery Partners refine a new business model to help them maximise their ‘brand tourism’ approach. We also provided co-funding to help them fast-track their entry to market and establishment of an operations capability in the UK.

WWW.DISCOVERYPARTNERS.COM

UK

CUSTOMER SATISFACTION WITH THE INTERNATIONAL GROWTH FUND

77% 2011 98% 2015 NZTE ANNUAL REPORT 2014/2015 NZTE ANNUAL REPORT 2014/2015 22 NZTE’s Story NZTE’s Story 23

REGIONS 2. Facilitating access to capital 4. Helping build strong local institutions Delivered with NZ Inc Outside the main centres, NZTE helps • We help New Zealand businesses to grow regions in four ways: who need to access capital to • Where possible, we co-locate with NZTE partners with public and agriculture, education and food Te Hono means connections to the unlock business potential by economic development agencies private sector organisations across safety. land, the people, the past and the 1. Growing companies helping to build capability and (EDAs) in the regions. New Zealand’s economic development future. There are now over 150 • Launch a new marketing providing access to investor ecosystem to build a more productive Stanford Bootcamp alumni and it • We work with New Zealand • We are working with EDAs to programme to increase the networks. and competitive economy, and to is building a powerful movement. companies (our F700, Coalition support their investment attraction awareness and uptake of the make it easier for business to engage and Foundation customers) in the • We work to match capital into efforts through activities such NZ Story among the export • Establish the Saudi Arabia- with government. regions to help boost global reach investment opportunities located as regional investment profiles, community, as well as providing New Zealand Agri hub in and build capability to succeed in the regions. facilitation of potential investment Over the past year, we have worked a refreshed toolkit for users. partnership with MFAT and MPI, internationally. opportunities and capability with NZ Inc to: Since the start of the NZ Story in to build a platform for agricultural 3. Capability building building workshops. November 2013, there have been development in the Middle East. • Our customer base closely matches • Deliver actions under export, over 120,000 website views and economic activity in the regions, • We help support small and medium capital and innovation areas of • Complete nine Ministerial trade over 19,000 downloads of NZ Story with approximately one third of enterprises (SMEs) to build the BGA. missions, including the Republic content. the F700 portfolio located in the capability and access business of Korea and the Gulf Cooperation • Expand business development regions. advice and training through our • Actively support the Te Hono Council. activities for G2G Know-How, network of Regional Business Bootcamps, along with MBIE, TPK, • We have seven regional offices growing and diversifying G2G • Deliver the Result 9 Better for Partners. Through this network, Callaghan Innovation, Treasury and to support companies located projects to more countries, and Business work programme, NZTE helped 3,475 SMEs in MPI. The Bootcamps are a new around New Zealand. over an expanded range including updating NZTE’s CRM 2014/15. style of primary sector leadership, of intellectual property. G2G so that it is ready for rollout of designed to improve collaboration Know-How secured revenue the NZ business number. to lift the performance of NZ’s of $9.37m for 2014/15, across primary sector. fields such as the environment, Miraka wins award

In 2014/15, NZTE introduced a new category to our International Business Special focus areas: Māori and regions Awards: the He kai kei aku ringa award for Māori Excellence in Export award. GROWING MĀORI BUSINESS The new category is intended to raise the profile of Māori businesses and to NZTE is committed to growing the help inspire others. Māori economy. In 2014/15, we Taupo based company Miraka took out grew our Māori business team to the inaugural award, presented by support increased engagement with Hon Te Uroroa Flavell. Miraka – Māori companies and enable greater Māori for ‘milk’ – is a relatively young regional outreach. company, established in 2011. Māori In the past year, we have increased customs and the values of tikanga, the number of companies in the kaitiakitanga, innovation, excellence F700 from 15 to 25, and developed and integrity are an integral part of a pipeline of another 50 companies. Miraka’s operations. Miraka is the Two of the 14 active coalitions are first company in the world to use Māori companies, with another three renewable electricity and steam to under development. run milk powder processing We’ve also made good progress in operations. It manufactures UHT developing a better connected NZ milk products and milk powder to Inc to support Māori business with 23 countries through Africa, the the design concept being a seamless Middle East, Asia, the Pacific and value chain of government services. Latin America. To achieve this, we have worked closely with other agencies such as TPK, Callaghan Innovation and MPI. NZTE ANNUAL REPORT 2014/2015 NZTE ANNUAL REPORT 2014/2015 24 Case Study NZTE’s Story 25

Case Study: Growing and evolving Independent Petroleum Laboratory internally

THE CUSTOMER OUR INPUT Evolving our digital knowledge platform

Independent Petroleum Laboratory (IPL) is a specialist We helped IPL to identify and then meet with oil and gas petrochemical and environmental laboratory providing companies in the Australian industry. We also assisted them and processes testing services to fuel terminals, refineries and the oil and at a major Australian oil and gas conference (APPEA) gas industry. where they connected with a wide range of key industry In the past year, we have sought to sharing of our knowledge across the We streamlined a number of internal contacts and gathered a large amount of information enhance the flow of the organisation organisation and provide a platform processes including mobile phone THE CHALLENGE about the market. by improving our digital knowledge for us to collaborate. We also increased billing, reporting requirements, travel platform and simplifying processes. mobility by introducing iPads, new and expense claims, and performance IPL wanted to learn more about the industry in Australia and THE RESULT websites and intranets and improved and development plans. We also the opportunities there, build relationships with customers, The most significant change was stability and security, with upgrades to established a business improvement and understand potential competitors in the market. They Immediately following meetings with key oil and gas the implementation of MIKE, our our network and core systems. team to drive NZTE’s improvement knew it was a difficult time in the global oil and gas industry, companies in Australia, IPL were asked for four quotes for Enterprise Content Management work programme. with a drop in crude oil prices and the postponement of a work. Within one month they secured a significant ongoing System. Its purpose is to enable large number of projects and investments. work agreement with an Australian customer.

Our people

Our performance as a team determines behaviours to increase our level of top 25% of organisations in the Best our ability to deliver on our goals. responsiveness, considered risk-taking Workplaces Survey, which have an Creating a highly engaged team with and commercial focus. average score of 84%. the right skills, commitment and WWW.IPL.CO.NZ In May 2015, we completed our annual As our employee engagement score support increases our ability to deliver engagement survey. Our employee has increased, so has the number of for our customers. engagement index score has risen customers who said we added value Our organisational ‘character’ is from a base of 69% in 2011 to 81% to their business. We believe that to work together as one team, this year. NZTE remains the top in one thing leads to another: the more demonstrating adventurous, agile and the public sector, compared to an engaged our employees are, the better astute behaviour. We focus on these average of 68%. Our aim is to be in the customer service we provide.

AU EMPLOYEE ENGAGEMENT F700 CUSTOMER VALUE-ADD

100 100

95 95 91 90 90 89 88 87

85 85

81 82 80 78 80

75 75 add value % 75 % engagement % 73

70 69 70

65 65 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015

Year Year NZTE ANNUAL REPORT 2014/2015 NZTE ANNUAL REPORT 2014/2015 26 NZTE’s Story NZTE’s Story 27

GOOD EMPLOYER ELEMENTS • Each new starter at NZTE has a • Both women and men now hold the now starting to see an increase in the beyond business as usual, behaviours BEING A GOOD EMPLOYER 90 day induction plan and same average position in range for number of Māori working within NZTE. that epitomise our characters in action. Our activities in 2014/15 are NZTE is committed to being a good participates in Ignite, our two remuneration. summarised against the seven employer, and an employer of choice. Awareness across the organisation The Adventurous Award - symbolised day induction event. key requirements of being a good • Our Pounamu Awards recognise We value our diverse workplace, our has lifted significantly around Māori by the Mere, was a weapon wielded employer, as set out by the New the contribution individuals and inclusive culture, and our commitment culture and business, in a large part by chiefs and warriors, but these days Employee development, Zealand Human Rights Commission: teams have made to our customers due to our Māori economy and culture symbolises facing and overcoming promotion and exit to equality. We promote Equal and to the wider organisation programme, Kia Kaha. Kia Kaha is a life’s challenges and difficulties. Employment Opportunities through Leadership, accountability and • All employees have an annual by exemplifying NZTE’s four two-day marae based programme organisation-wide practices relating In December 2014, a number of culture development plan which is formally characters – Agile, Astute, where employees learn about Māori 4 to the recruitment and selection, employees were recognised with reviewed twice a year . Adventurous and One Team. business, culture, language and • We deliver senior leadership development, management and Pounamu Awards, including Echo Tan, Each person works with their people. It helps us understand the programmes and planned retention of all employees. our Shanghai Business Development manager to identify specific Harrassment and bullying opportunity for Māori business succession development for In particular, our commitment to Manager. Echo won an Adventurous learning and development needs prevention and culture, to lift the New Zealand critical roles. increased diversity is driven both by Award for spearheading a valuable and opportunities, through on the economy and differentiate us on the • Our characters, together with our the diversity of our customer base, and collaboration with B2C e-commerce • NZTE’s characters are embedded job or more formalised training. world stage. This is an important part Standards of Integrity and Conduct the importance of reflecting a range of platform, Tmall, under the China throughout the organisation such of our approach to have our full team • We support our employees’ and our Anti-Harassment policy perspectives into our decision-making Connection Project. as recruitment, performance plans of 550 people offering value to Māori career ambitions by promoting detail our expected behaviours. processes. Our appointments are and training as well as weekly economic development, not just a This was NZTE’s first promotional secondment and development No cases were reported in the based on merit, to ensure fairness in leadership blogs and quarterly dedicated few. event with both sides exploring a new opportunities with both customers 2014/15 year. employment for all people. ‘Impact’ briefings delivered by the way of collaboration - everything was and NZ Inc partners around the To date we have had 349 employees Chief Executive. We have two specific areas of focus: new and cross-team engagement world. Safe and healthy environment participate in Kia Kaha. was under exploration. Since the • We drive excellence and increasing the proportion of women • Exits are managed in keeping with • NZTE takes the health and safety successful campaign, the NZTE team accountability through individual in leadership positions, and increasing NZTE’s leaving guidelines, which of its employees seriously. Our goal has continued to build a series of performance plans. The plans the total number of Māori and Pacific Pounamu Awards require that employees who leave is One Team, zero harm, where events with Tmall to further promote recognise delivery against key peoples coming into the organisation the organisation are treated in a leaders lead and create a safe work NZTE’s biannual Pounamu Awards New Zealand’s wider F&B categories, performance indicators, agreed 90 as a whole. A total of 49% of our manner that is consistent with the environment and individuals take recognise and celebrate the individuals including dairy, meat, fresh produce, day actions3 and the demonstration leadership positions are filled by principles of fairness, equity and responsibility for their own and and teams who exemplify NZTE’s wine and other beverage products. of NZTE characters and women; both women and men now EEO principles. their workmates’ health and safety. four characters – Agile, Astute, hold the same average position in behaviours, along with a focused Adventurous and One Team. We look • We have processes in place range for remuneration. We are also section on career aspirations and Flexibility and work design for behaviours that are above and development plans. to support the management, • NZTE has an organisation wide reporting, and resolution of “THE LEAD TEAM IS RECOGNISED flexible working policy in place hazards, incidents and near misses. AS CONSISTENTLY AND to provide flexibility and work Health and safety is tracked on our TRANSPARENTLY LIVING BY THE life balance for employees. This organisational dashboard, which CHARACTER AND VALUES.” includes flexible or reduced is reviewed monthly by our senior - 2015 PIF Review working hours, the ability to work leadership team and is available to remotely including from NZTE all employees. Recruitment, induction and offices around the world and • We support employee wellbeing selection additional unpaid leave. through a range of initiatives, • We actively recruit to reflect the including an employee assistance Remuneration, recognition and diversity of our customer base. program, influenza vaccinations, conditions NZTE’s employment process is eyesight and ergonomic impartial and transparent. • To support our drive for excellence, assessments. • We target increased women individual performance plans in leadership by ensuring that recognise delivery against key recruitment pools contain good performance indicators, delivery quality women candidates. of agreed actions and the Selections are then made on merit. demonstration of NZTE characters and behaviours.

3 From 2015/16, NZTE is moving from a 90 to a 120 day planning and reporting cycle. 4 In 2015/16, performance and development plans will be reviewed three times a year – in line with our new 120 day cycle. NZTE ANNUAL REPORT 2014/2015 NZTE ANNUAL REPORT 2014/2015 28 NZTE’s Story NZTE’s Story 29

PROFILE OF OUR PEOPLE Governance and NZTE EMPLOYEE AGE: MOST AGED 30-50 FULL TIME EMPLOYEES Accountability

20-29 10% THE ROLE OF THE BOARD In addition, the chief executives To ensure the most effective and 30-39 35% 565 AND COMMITTEES of MBIE and MFAT act as special efficient use of its time and resources, 40-49 31% advisors to the Board. In 2014/15, the Board convenes committees to NZTE’s Board provides governance 50-59 17% 1.25 INTERNATIONAL FTES FOR MBIE delegated the role to Paul Stocks deal with specific matters. During over our strategy and future 60+ EVERY FTE IN NEW ZEALAND (Deputy Chief Executive, Science, 2014/15, these were: 5% operating intentions, in conjunction Skills and Innovation), and MFAT was Unknown with overseeing and monitoring • Audit and Risk Committee. 2% 2.74 CUSTOMER-FACING FTES represented by John Allen (July 2014 organisational performance. Our Board FOR EVERY CORPORATE FTE5 - January 2015) and Brook Barrington • Human Resources and members have extensive business and (January - June 2015). Remuneration Committee. international knowledge. Over the past year, the Board has • International Growth Fund During 2014/15, the Board members continued its approach to focusing on Committee. were Andrew Ferrier (Chairperson), the key strategic themes and priorities Julie Christie, Charles Finny, Karen Other ad-hoc committees may be to drive increased performance in Fistonich, Robin Hapi, Jennifer Kerr, formed from time to time to deal with OVERALL NZTE ETHNICITY NZTE OVERALL GENDER all areas of the organisation. The PIF Wayne Norrie, Peter Townsend and specific issues as required, and each review provided a valuable platform Charlotte Walshe. committee is guided by Terms of to inform and shape the discussions Reference. Both Julie Christie and Peter Townsend and strategic direction that the Board ended their terms on 31 July 2015 and will implement for NZTE’s ongoing “IT IS OUR VIEW THAT THE BOARD IS the Board acknowledge the significant success. VERY COMMITTED TO THE SENSE OF contribution of these outgoing board PURPOSE OF NZTE AND HAS PLAYED The Board is guided by a charter A KEY ROLE IN THE ORGANISATION’S members. Charlotte Walshe and that documents its intentions and TRANSFORMATION.” Wayne Norrie were welcomed to the general approach to the fulfilment of FEMALE board on 1 June 2015 for a period of - 2015 PIF Review 56.1% its governance responsibilities. This three years. incorporates a code of conduct and rules regarding disclosure of interests.

European 58% BOARD MEMBER MEETING ATTENDANCE Asian 24.3% MALE Other 10.4% 43.9% BOARD MEMBER BOARD AUDIT & RISK HUMAN RESOURCES INTERNATIONAL GROWTH Middle Eastern, Latin American, African 3% COMMITTEE & REMUNERATION FUND COMMITTEE Māori 2.3% COMMITTEE Undeclared 1.8% Pacific peoples 0.4% Andrew Ferrier 7 / 7 - 1 / 1 1 / 1

Julie Christie 6 / 7 - - 9 / 9

Charles Finny 7 / 7 4 / 4 4 / 5 -

Karen Fistonich 7 / 7 - 5 / 5 - DISABILITY Robin Hapi 6 / 7 - - 8 / 9

NZTE is an equal opportunities employer. We value our Jennifer Kerr 5 / 7 3 / 4 5 / 5 - diverse workplace and inclusive culture and therefore we appreciate the importance of eliminating all barriers that Wayne Norrie * 1 / 1 - - 1 / 1 cause inequality in the workplace. In all NZTE owned Peter Townsend 6 / 7 4 / 4 - 7 / 9 properties, we ensure that the building and design caters to people of all abilities. Assistive technology is available to all Charlotte Walshe * 1 / 1 - - - employees as required.

5 Customer-facing includes customer-facing roles and roles directly supporting customer-facing * Wayne Norrie and Charlotte Walshe joined the Board on 1 June 2015 NZTE ANNUAL REPORT 2014/2015 NZTE ANNUAL REPORT 2014/2015 30 NZTE’s Story NZTE’s Story 31

What We Have Learnt About What We Have Learnt About Companies Ourselves

The six most common mistakes companies Insights from the customer experience make: Insights from the Beachheads survey programme CUSTOMERS AT DIFFERENT WE HAVE THE GREATEST MORE SERVICES ACCESSED = STAGES OF GROWTH VALUE IMPACT WHEN THE MORE CUSTOMER VALUE DIFFERENT THINGS CHEMISTRY IS RIGHT LACK OF EFFECTIVE FOCUSING ON PRODUCT LACK OF A CLEAR BETWEEN US AND OUR GOVERNANCE INSTEAD OF MARKET GO-TO-MARKET STRATEGY CUSTOMER

LOOKING OFFSHORE TO FAILURE TO HIRE AND AN INTERNATIONAL SOLVE PROBLEMS AT HOME UTILISE THE RIGHT PEOPLE STRATEGY THAT IS TOO BROAD

Lessons learnt from International Growth Fund customers INSIGHTS FROM THE PIF • Moving from agency intelligence • Its not a sprint but a marathon. REVIEW to system insight. If NZTE knew This relates to how NZTE relates to KNOW YOUR MARKET MAINTAIN FOCUS AND CONSIDER AN IN-MARKET what its network knows, it could internal organisation development The 2015 PIF review provided us PERSEVERE OFFICE OR REPRESENTATIVES do better. If the wider system following transformation, with the with a clear view of what we need to knew what NZTE knows, it would need to pause and reset before do to lift our game and provided us be enabled to be more innovative moving towards a more mature yet with some real insight into the future in pursuit of better economic adaptive operating model. challenges we face. The PIF reviewers performance. raised five ‘paradoxes’ or strategic • Less of this but more of that. This BRAND INVESTMENT AND INVEST IN THE RIGHT IGFS MORE SUCCESSFULL performance challenges that we face • Be unrelentingly optimistic but relates to being both more and less CUSTOMER EDUCATION RESOURCES WITH OTHER NZTE SERVICES as an organisation. We agree with never take the easy path. A little like the rest of the public sector. BUILDS CONNECTIONS these strategic challenges and are more edge might be required in the Less in terms of raising the bar in committing to a programme of action next phase of NZTE’s development, some areas, and more in terms to address each of them: and where it has been rightfully of NZTE’s people influencing the earned through trusted advisor public sector with good traits and • Leading the NZ Inc system without relationships, it should be used to behaviours to enhance spillover leading. Can the prescription inspire, test or encourage bigger benefits. that has successfully transformed shifts in customer and industry NZTE be thoughtfully applied to performance. transform the wider system?

NZTE ANNUAL REPORT 2014/2015 NZTE ANNUAL REPORT 2014/2015 32 Performance Measures Performance Measures 33

Our Performance Measurement TOP FOUR MEASURES MANAGEMENT MEASURES Customer Portfolio Growth Framework % International revenue IMPACT MEASURES ($0-500m IR) PORTFOLIO

# F700 customers CUSTOMER GROWTH # Foundation customers # Business accessing RBPN % Average F700 export (international) revenue growth # Coalitions under active management # F700 customers with growth <10%/>10% # F700 entries and exits by sector Customer Deals % Coalitions still active after 2 years (2016/17) $ Deals in–market SERVICE RESULTS BUSINESS GROWTH GREATEST IMAGINABLE AGENDA CHALLENGE # International growth outcomes CUSTOMER WAY rDEI ratio for completed IGF projects Goal: Exports to 40% Double the international % Engagement plan actions completed on time of GDP by 2025 revenue of NZTE’s F700 pDEI ratio for IGF grants customer porfolio by 2025 % Customer reviews completed on time % Coalition objectives met

EXPORT MARKETS $ Value of contracts secured through G2G

INFRASTRUCTURE INNOVATION SERVICES

BUSINESS Customer Perception GROWTH # IGF grants, SIF grants AGENDA CUSTOMER FEEDBACK

NATURAL SKILLED & SAFE RESOURCES WORKPLACES % Value Add # Tier 1 investment deals in the pipe line # NPS: Services, RBPN, IGF, NZ Story CAPITAL # Days between IGF consent and approval MARKETS % Customer Satisfaction (F700 & Foundation) % Gumball stage gates achieved on time x % Advisor Satisfaction 2 % iPlan and MEC activity completed on time in full

CAPITAL RESULTS GLOSSARY PEOPLE AND ORGANISATION $ FDI F700 Focus 700 customers % Employee engagement Capital FDI Foreign Direct Investment $ ODI % Performance and development plans completed ODI Outward Direct Investment $ Capital deals $ Capital Mobilisation IGF International Growth Fund # H&S incidents pDEI Potential Direct Economic Impact % Ratio pDEI to capital deployed for investment deals % Satisfaction for IP and SPP teams rDEI Realised Direct Economic Impact SIF Strategic Investment Fund % CRM and MIKE performance standards met NPS Net Promoter Score % NZ Inc satisfaction G2G Government to Government IP Internal Partners % Challenge traffic lights (green) SPP Strategy Performance and Partners % Budget variance CRM NZTE’s Customer Relationship Management System MIKE NZTE’s Enterprise Content Management System RBPN Regional Business Partner Network iPlan Multicustomer activities and events MEC Missions and Events Centre H&S Health and Safety % Value add % of businesses who agree that NZTE has added value to their business SPE Measures Non SPE Measures NZTE ANNUAL REPORT 2014/2015 NZTE ANNUAL REPORT 2014/2015 34 Performance Measures Performance Measures 35

Statement of Responsibility Statement of Performance

The NZTE Board is responsible for the preparation of the annual financial statements and statement of performance, This statement of performance reports against the performance measures in NZTE’s Statement of Performance Expectations and the judgements used in them. This includes responsibility for any end-of-year performance information provided by (SPE) 2014-15. It covers the period 1 July 2014 to 30 June 2015. NZTE, whether or not that information is included in this annual report.

The Board is also responsible for establishing and maintaining a system of internal controls designed to provide reasonable assurance as to the integrity and reliability of financial reporting. NZTE’S OUTPUT EXPENSE CLASS STRUCTURE

In the opinion of the Board, the annual financial statements and statement of performance for the year ended 30 June 2015 DESCRIPTION REVISED BUDGET fairly reflect the financial position and operations of NZTE. 2015 $000

On behalf of the Board International business growth services 112,023

Services to support sector development and special events 31,429

Services to support the growth and development of New Zealand businesses 13,181

International Growth Fund 27,212 Sector Strategies and Facilitation 1,004

Total 184,849 Andrew Ferrier Charles Finny Chair, NZTE Board NZTE Board

30 October 2015

Above Robin Hapi Julie Christie Peter Townsend Andrew Ferrier Karen Fistonich Charles Finny Jennifer Kerr

Left to right (New Board members from 1 June 2015) Charlotte Walshe Wayne Norrie NZTE ANNUAL REPORT 2014/2015 NZTE ANNUAL REPORT 2014/2015 36 Performance Measures Performance Measures 37

ANNUAL GROWTH IN INTERNATIONAL REVENUE FOR NZTE’S HIGH INTENSITY CUSTOMER PORTFOLIO (F700 LESS THAN $500M INTERNATIONAL REVENUE)

International business growth services 2014/15 Performance Standard: NA8

2012/2013 2013/2014 2014/2015

N/A 3.4 percentage points above the NZ 5.4 percentage points above the NZ We support individual or groups of companies to enhance their global reach and grow in international markets, and match export benchmark export benchmark willing investors with qualified 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 TOTAL VALUE OF EXPORT DEALS EFFECTED WITH NZTE INVOLVEMENT9

• Overcoming internationalisation barriers and enabling access to international business networks 2014/15 Performance Standard: Exceeds 2013/14 result

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

• Identifying willing investors domestically and internationally 2012/2013 2013/2014 2014/2015

• Matching investors with New Zealand investment opportunities in target sectors $694 million $794 million $1.1 billion*

Our customer managers and international teams provide tailored support, advice and linkages for our internationalising customers. Around this, we wrap services to build capability and international connections, such as Better by Design, Better *The total value of export deals significantly exceeded the target in 2014/15. This was due to 3 customers each achieving by Capital, and Connecting with Key Customers in Market as well as, trade missions and events. We work with international deals of over $100million. investors to identify opportunities in sectors and regions that will make the biggest contribution to the New Zealand economy.

For the financial performance of this output class, refer to the Statement of Cost of Service – Output Expense on page 70.

PERCENTAGE OF HIGH INTENSITY CUSTOMERS (F700) THAT AGREE OR STRONGLY AGREE THAT PERFORMANCE MEASURES NZTE HAS ADDED VALUE TO THEIR BUSINESS

2014/15 Performance Standard: Meets or exceeds 2013/14 result ANNUAL GROWTH IN INTERNATIONAL REVENUE FOR NZTE’S HIGH INTENSITY CUSTOMER PORTFOLIO (F700) 2012/2013 2013/2014 2014/2015 2014/15 Performance Standard: 3 percentage points higher than NZ’s overall total export growth6 87% 89% 91%

2012/2013 2013/2014 2014/2015

3.2 percentage points higher than NZ’s 0.6 percentage points lower than NZ’s 18.2 percentage points higher that NZ’s overall total export growth overall total export growth overall total export growth*

TOTAL VALUE OF CAPITAL DEPLOYED10 (DEBT AND EQUITY) WITH NZTE INVOLVEMENT *The annual growth in international revenue for NZTE’s F700 portfolio in 2014/15 was 23.6%, compared with 5.4% for New Zealand’s total overall export growth, giving a performance result of 18.2 percentage points higher than New Zealand’s 2014/15 Performance Standard: $600 million overall export growth7. The F700 growth figure was driven by the performance of a single large company. If this company is removed from the calculations, the F700 portfolio result would have been 3.4 percentage points above the economy. 2012/2013 2013/2014 2014/2015

N/A $1.6 billion $866 million

8 This measure was not included in the 2014/15 SPE, but will be introduced for the 2015/16 year. This measure compares the F700 portfolio growth (for companies 6 with less than $500m International Revenue) to a revisited NZ export economy benchmark (companies under $500m export revenue). E.g. If NZ’s overall total export growth is 5%, performance standard is 8%. Source: Customer financial data provided directed to NZTE and Statistics NZ National 9 Accounts. 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 7 calculated over a 12 month period, but the value can be calculated beyond this period in circumstances where it is specified in an agreed signed contract. We introduced a new benchmark in 2014/15, known as the ‘NZ Goods & Services Exports Benchmark’. This enables us to use a ‘like for like’ approach to better 10 compare the growth of our F700 portfolio with the overall growth of New Zealand’s export economy. This approach adjusts for the lag in timing when our Capital deployed may include the amount anticipated to be spent by an investee, not just the contractual amount, where NZTE is confident that additional funds will customers’ data is reported and provides a more relevant comparison. be invested. NZTE ANNUAL REPORT 2014/2015 NZTE ANNUAL REPORT 2014/2015 38 Performance Measures Performance Measures 39

PERCENTAGE OF NZTE’S MANAGED FOUNDATION CUSTOMERS THAT AGREE OR STRONGLY AGREE THAT NZTE HAS ADDED VALUE TO THEIR BUSINESS Services to support sector development 2014/15 Performance Standard: Exceeds 2013/14 result and events 2012/2013 2013/2014 2014/2015

58% 67% 71%

NZTE works with groups of businesses, sectors and other government agencies on projects and activities that capitalise on significant economic growth opportunities for New Zealand.

At the beginning of 2014/15, to provide greater impact, we made a change to the way we work with groups of customers and ACTIVITY INDICATORS sectors, moving from delivering broad sector based high impact programmes to supporting business-led coalitions with a shared objective. In our 2014/15 Statement of Performance Expectations (SPE), we noted that new performance measures would be established to reflect the change in activity. This was to be reported in conjunction with the 2014/15 Estimates of NUMBER OF CUSTOMERS IN NZTE’S HIGH INTENSITY (F700) PORTFOLIO11 Appropriation measures.

2014/15 Activity Indicator: 550-60012 As the coalitions were still being established in 2014/15, the measures below are from the 2014/15 Estimates. We have also included the SPE 2015/16 coalitions measures to show how we will be assessing performance in this area. It should be noted 2012/2013 2013/2014 2014/2015 however, that from 2015/16, coalitions are part of the Output Class: International business growth services.

456 525 621 For the financial performance of this output class, refer to the Statement of Cost of Service – Output Expense on page 70.

PERFORMANCE MEASURES (FROM 2014/15 ESTIMATES)

TOTAL NUMBER OF CUSTOMERS IN NZTE’S CUSTOMER PORTFOLIO (EXCLUDING THE HIGH INTENSITY PORTFOLIO)13

2014/15 Activity Indicator: 3000-3500 (Demand driven) In 2014/15, NZTE exited High Impact Programmes and introduced coalitions. This occurred at the end of Q1 in 2014/15, so results for the High Impact Programmes were not measured. 2012/2013 2013/2014 2014/2015 PERCENTAGE OF DELIVERABLES ACHIEVED FOR HIGH IMPACT PROGRAMMES 3,115 3,130 3,389 2014/15 Performance Standard: 85%

2012/2013 2013/2014 2014/2015

93% 80% Not measured due to discontinuation of High Impact Programmes.

UNDER DEVELOPMENT – EFFECTIVENESS MEASURE FOR HIGH IMPACT PROGRAMMES

2014/15 Performance Standard: Under development

2012/2013 2013/2014 2014/2015

N/A N/A Not measured due to discontinuation of High Impact Programmes.

11 Companies that have an assigned account manager and are managed to a written engagement plan. 12 Standard is the number of F700 customers in NZTE’s customer portfolio at the end of each year. 13 NZTE refers to this customer group as our Foundation portfolio. NZTE ANNUAL REPORT 2014/2015 NZTE ANNUAL REPORT 2014/2015 40 Performance Measures Performance Measures 41

ACTIVITY INDICATORS Services to support the growth and NUMBER OF HIGH IMPACT PROGRAMMES FUNDED BY NZTE development of New Zealand businesses 2014/15 Activity Indicator: Up to 10

2012/2013 2013/2014 2014/2015

8 7 Not measured due to discontinuation We build and enhance business and management capability by providing access to effective assessment, advice, training, of High Impact Programmes. 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 PERFORMANCE MEASURES (FROM 2015/16 SPE) grow business investment in research and development. For the financial performance of this output class, refer to the Statement of Cost of Service – Output Expense on page 70.

PERCENTAGE OF COALITION OBJECTIVES MET

2014/15 Performance Standard: N/A PERFORMANCE MEASURES

2014/2015 Following the introduction of coalitions, NZTE worked with coalitions to establish clear objectives. These have completion horizons from 6-18 months, so have not TOTAL NET PROMOTER SCORE FOR THE REGIONAL BUSINESS PARTNER NETWORK14 Not measured been measured in the 2014/15 year. 2014/15 Performance Standard: Baseline to be established in 2014/15

2012/2013 2013/2014 2014/2015

N/A N/A +48

ACTIVITY INDICATORS

NUMBER OF COALITIONS UNDER ACTIVE MANAGEMENT PERCENTAGE OF BUSINESSES THAT GIVE A POSITIVE15 SATISFACTION RATING TO SERVICES PROVIDED THROUGH THE 2014/15 Activity Indicator: N/A REGIONAL BUSINESS PARTNER NETWORK

2014/2015 As well as active coalitions, there were 10 fostered coalitions in 2014/15. These are 2014/15 Performance Standard: Meets or exceeds 2013/14 result early stage groups that are segmented to “active” when they reach an active level of 14 commitment. 2012/2013 2013/2014 2014/2015

92% 90% 92%

14 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). 15 NZTE surveys use a 7 point scale. A positive rating means any rating in the top 3. NZTE ANNUAL REPORT 2014/2015 NZTE ANNUAL REPORT 2014/2015 42 Performance Measures Performance Measures 43

ACTIVITY INDICATORS Grants

NUMBER OF BUSINESSES RECEIVING BUSINESS DEVELOPMENT SERVICES THROUGH THE REGIONAL BUSINESS PARTNER NETWORK

2014/15 Activity Indicator: 2,500 (demand driven) NZTE administers two grants:

2012/2013 2013/2014 2014/2015 International Growth Fund (IGF)

2,751 2,539 3,475* 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 Regional Business Partner Network is jointly funded by NZTE and Callaghan Innovation. The actual number of the wider New Zealand economy. businesses receiving business development services appears higher in 2014/15 than in previous years, as not all “Callaghan” businesses were registered in NZTE’s system. From 1 July 2014, all businesses meeting with Regional Business Partner Sector Strategies and Facilitation (Strategic Investment Fund) advisors were required to be entered in the system. The Strategic Investment Fund co-funds feasibility studies. These studies are used to develop and present the business case for investment in New Zealand

FINANCIAL PERFORMANCE

BUDGET REVISED BUDGET ACTUAL % OF REVISED $000 $000 $000 BUDGET USED

30,916 28,216 22,083 78%

PERFORMANCE MEASURES

PERCENTAGE OF BUSINESSES THAT GIVE THEIR EXPERIENCE WITH THE IGF A POSITIVE RATING16

2014/15 Performance Standard: Meets or exceeds 2013/14 result

2012/2013 2013/2014 2014/2015

92% Not measured17 98%

POTENTIAL DIRECT ECONOMIC IMPACT RATIO FOR APPROVED IGF GRANTS

2014/15 Performance Standard: 4 to 118

2012/2013 2013/2014 2014/2015

4.5 to 1 5.2 to 1 5.3 to 1

16 NZTE surveys use a 7 point scale. A positive rating means any rating in the top 3. 17 The specific IGF question used for this measure was removed from the 2014 Annual survey. Instead respondents were asked to rate all services they had used collectively in 2013/2014. 96 percent of IGF respondents agreed or strongly agreed that the services they had received added value to their business, compared with an overall rating of 82 percent across all services. The specific IGF question was reinstated for 2014/15. 18 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 validations and coalition projects. NZTE ANNUAL REPORT 2014/2015 NZTE ANNUAL REPORT 2014/2015 44 Performance Measures Financial Statements 45

ACTIVITY INDICATORS Financial statements NUMBER OF BUSINESSES RECEIVING AN IGF GRANT

2014/15 Activity Indicator: 60 (Demand driven) These financial statements cover all NZTE operating revenue, expenses, grant programmes, assets and liabilities for the year ended 30 June 2015. 2012/2013 2013/2014 2014/2015

73 72 112*

*112 companies received an IGF, which is significantly more than the activity indicator of 60. In 2014/15, a greater number STATEMENT OF COMPREHENSIVE REVENUE AND EXPENSE (FOR THE YEAR ENDED 30 JUNE 2015) of companies opted to do a market validation (less than $100k) prior to making an application for a full IGF. 44 companies out of the 112 received an IGF for a market validation. BUDGET NOTES ACTUAL ACTUAL 2015 2015 2014 $000 $000 $000

Income

NUMBER OF STRATEGIC INVESTMENT FUND (SIF) GRANTS AWARDED 155,259 Revenue from Crown - operating 2 156,633 146,414

2014/15 Activity Indicator: 6 (Demand driven) 30,916 Revenue from Crown - grants 2 22,083 24,850 - Customer revenue 236 213 2012/2013 2013/2014 2014/2015 1,800 Other operating revenue 3 12,988 3,844 7 3 3 180 Finance income 4 5,330 300

188,155 Total revenue 197,270 175,621

Expenditure

78,822 Personnel costs 5 78,013 73,362

4,900 Depreciation and amortisation expense 12,13 5,004 5,034

- Finance expense 6 1,615 4,073

30,916 Grant expense 7 22,083 24,850

73,517 Other operating expenses 8 82,366 70,176

188,155 Total expenses 189,081 177,495

- Surplus before income tax 8,189 (1,874)

- Income tax 20 (43) -

- Total Comprehensive Revenue and Expense 8,146 (1,874)

Explanations of significant variances against budget are detailed in note 25.

The accompanying notes form part of these financial statements. NZTE ANNUAL REPORT 2014/2015 NZTE ANNUAL REPORT 2014/2015 46 Financial Statements Financial Statements 47

STATEMENT OF CHANGES IN EQUITY (FOR THE YEAR ENDED 30 JUNE 2015) STATEMENT OF FINANCIAL POSITION (FOR THE YEAR ENDED 30 JUNE 2015) GROUP BUDGET ACTUAL ACTUAL 2015 2015 2014 GROUP BUDGET NOTES ACTUAL ACTUAL $000 $000 $000 2015 2015 2014 $000 $000 $000 Contributed Capital ASSETS - Balance at 1 July 15,648 15,648 Current assets - Capital contribution - - 8,440 Cash and cash equivalents 9 10,648 9,133 - Balance at 30 June 15,648 15,648 16,431 Trade and other receivables 10 17,204 17,807

20,532 Debtor from Crown - grants 10 11,832 13,442

1,500 Prepayments 3,041 2,303 Accumulated surplus/(deficit) 400 Deposits 893 457 - Balance at 1 July 3,174 5,048 - Derivative financial asset 11 2,640 - - Surplus/(deficit) for the year 8,146 (1,874) 47,303 Total current assets 46,258 43,142 - Balance at 30 June 11,320 3,174 Non-current assets

60,688 Debtor from Crown - grants - -

11,662 Property, plant and equipment 12 11,147 9,917

5,069 Intangible assets 13 3,265 4,141 20,928 Total Equity 26,968 18,822 1,200 Deposits 1,118 1,198

The accompanying notes form part of these financial statements. 78,619 Total non-current assets 15,530 15,256

125,922 Total assets 61,788 58,398 LIABILITIES

Current liabilities

16,160 Trade and other payables 14 14,417 15,875

4,650 Employee benefits and provisions 15 4,775 5,286

175 Finance and other liabilities 16 371 177

20,532 Accruals - grants 17 11,832 13,442

- Derivative financial liabilities 11 - 1,878

41,517 Total current liabilities 31,395 36,658

Non-current liabilities

60,688 Accruals - grants - -

1,800 Employee benefits 15 2,273 1,762

989 Finance and other liabilities 16 1,152 1,156

63,477 Total non-current liabilities 3,425 2,918

104,994 Total liabilities 34,820 39,576

20,928 Net assets 26,968 18,822

20,928 Equity 26,968 18,822

The accompanying notes form part of these financial statements. For and on behalf of the members of the Board, which authorised the issue of the financial statements on 30 October 2015.

Andrew Ferrier Charles Finny Chair, NZTE Board NZTE Board NZTE ANNUAL REPORT 2014/2015 NZTE ANNUAL REPORT 2014/2015 48 Financial Statements Financial Statements 49

STATEMENT OF CASH FLOWS (FOR THE YEAR ENDED 30 JUNE 2015) BUDGET NOTES 2015 2014 Notes to the Financial 2015 $000 $000 $000

CASH FLOWS FROM OPERATING ACTIVITIES Statements

147,625 Revenue from Crown - operating 158,236 145,424

30,916 Revenue from Crown - grants 23,693 25,784 NOTE 1 : STATEMENT OF ACCOUNTING POLICIES FOR THE YEAR ENDED 30 JUNE 2015

1,800 Client and other income 12,815 1,928 Reporting entity NZTE is a Crown Agency as defined by the Crown Entities Act 2004 and is domiciled in New Zealand. NZTE’s parent 180 Interest received 605 300 is the New Zealand Crown. The consolidated financial statements of the Group consist of the parent entity, NZTE, (63,751) Payments to suppliers (84,761) (71,318) and it’s 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 (78,822) Payments to employees (79,444) (72,524) development and investment opportunities in New Zealand, as opposed to making a financial return. NZTE has designated (30,916) Payments to grant recipients (23,693) (25,784) itself as a public benefit entity (PBE) for financial reporting purposes. The financial statements for NZTE are for the year ended 30 June 2015, and were approved on behalf of the Board on 30 October 2015. - Net Goods and Services Tax 1,058 53

- Interest paid on finance lease liabilities - (2) Basis of preparation The financial statements are prepared in accordance with the requirements of the Crown Entities Act 2004, which (1,632) Capital charge paid (1,506) (1,561) 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 forward 5,400 Net cash flows from operating activities 18 7,003 2,300 exchange contracts, which are stated at fair value. The financial statements have been prepared in accordance with Tier 1 PBE accounting standards. These financial statements comply with PBE accounting standards. These financial statements CASH FLOWS FROM INVESTING ACTIVITIES are the first financial statements presented in accordance with the new PBE accounting standards. There are no material adjustments arising on transition to the new PBE accounting standards, however adjustments have been made due to the - Proceeds from sale of property, plant and equipment 74 148 implementation of a new accounting policy for grant and voucher accounting.

(5,500) Purchase of property, plant and equipment (4,820) (5,595) The financial statements are presented in New Zealand dollars and all values are rounded to the nearest thousand dollars (2,300) Purchase of intangible assets (1,254) (1,147) ($000). The functional currency of NZTE is New Zealand dollars.

(7,800) Net cash flows used in investing activities (6,000) (6,594) Standards issued and not yet affected and not early adopted In May 2013, the External Reporting Board issued a new suite of PBE accounting standards for application by public sector entities for reporting periods beginning on or after 1 July 2014. NZTE has applied these standards in preparing the 30 June CASH FLOWS FROM FINANCING ACTIVITIES 2015 financial statements. In October 2014, the PBE suite of accounting standards was updated to incorporate requirements and guidance for the - Landlord contribution to other lease liabilities 190 371 not-for-profit sector. These updated standards apply to PBEs with reporting periods beginning on or after 1 April 2015. - Net cash flows from/(used in) financing activities 190 371 NZTE will apply these updated standards in preparing its 30 June 2016 financial statements. NZTE expects there will be minimal or no change in applying these accounting standards.

(2,400) Net increase in cash and cash equivalents 1,193 (3,923) Foreign currency transactions Foreign currency transactions (including those for which forward exchange contracts were held) are translated into New 10,840 Cash and cash equivalents at beginning of year 9,133 13,345 Zealand dollars using the exchange rates prevailing at the date of transaction. Foreign exchange gains and losses resulting - Effect of exchange rate fluctuations on cash held 322 (289) 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 8,440 Cash and cash equivalents at end of year 9 10,648 9,133 Accounting estimates and judgements Application of NZTE’s accounting policies requires the use of estimates and judgements. The estimates are based on The GST (net) component of operating activities reflects the net GST paid and received with the Inland Revenue historical experience and other factors that are believed to be reasonable. Actual results may differ from these estimates. Department (IRD). GST has been presented on a net basis as the gross amounts do not provide meaningful information for The areas of significant estimation and judgement are as follows: financial reporting purposes. - grant expenditure (note 17) The accompanying notes form part of these financial statements. - useful lives of property, plant and equipment (note 12) - useful lives of intangible assets (note 13) NZTE ANNUAL REPORT 2014/2015 NZTE ANNUAL REPORT 2014/2015 50 Financial Statements Financial Statements 51

Accounting policies and standards Explanatory Notes

The following changes have been made to accounting policies: 1) Assets and liabilities arising from accounting for grants

Recognition and measurement adjustments During 2014/15 NZTE changed its accounting policy in relation to accounting for grants for assets and liabilities. Previously when grant applications were approved they were recognised as an expense and liability with the corresponding The table below explains the recognition and measurement adjustments to the 30 June 2014 comparative information revenue and asset being the grant receivable due from MBIE. They are now calculated for each different grant type as an resulting from the changes in accounting policy. assessment made based on historical data of the probability of a grant recipient having incurred qualifying expenditure for which a claim has not yet been received and management’s estimation of project progress. An operating commitment is disclosed in the Notes to the Accounts for those grant contracts awarded but not yet drawn down. NZTE has changed NOTE NZ IFRS ADJUSTMENT RESTATED its policy on accounting for grants to reflect a consistent approach across government to the treatment of funding (PBE) ACCOUNTS agreements. This has given rise to the following adjustments to the 2013-14 financial statements, presented as comparative 2014 information. $000 $000 a) Debtor from Crown – grants and Accruals – grants have been restated to $13.442m at 30 June 14 which is a reduction of $0.752m.

STATEMENT OF FINANCIAL POSITION b) Non-current assets: Debtor from Crown - grants: As a consequence of the new accounting policy for grant recognition, there are no non-current Debtors from Crown and Accruals - grants, because all amounts are expected to be paid within the 12 months after balance date. This has reduced the balances by $34.477m. Current assets 2) Revenue and expense arising from accounting for grants Debtor from Crown - grants 1(a) 14,194 (752) 13,442 During 2014/15 NZTE changed its accounting policy for accounting for grants. Revenue from Crown - grants is now recognised when the revenue conditions have been met, which is when the related grant expenditure is incurred, and a Non-current assets grant receivable is due. Grant expenditure is recognised when the third party recipient incurs expenditure that meets the grant conditions. This has given rise to the following adjustments to the 2013-14 financial statements, presented as Debtor from Crown - grants 1(b) 34,477 (34,477) - comparative information.

a) Revenue from Crown – grants: $24.850m of grants and matching grant expenses have been recognised. Current liabilities 3) Payables and operating expenditure arising from accounting for vouchers Accruals - grants 1(a) 14,194 (752) 13,442 During 2014/15, NZTE changed its accounting policy for Business Capability Voucher expenditure. Vouchers are issued Accounts Payable (incl voucher accrual) 3(a) 15,942 (67) 15,875 to businesses to build capability. A business may receive up to a maximum of $5,000 used to co-fund up to 50% of the training or coaching. In previous periods the total value of vouchers issued was expensed. NZTE now recognises voucher expenditure when a voucher recipient incurs training voucher expenditure meeting the voucher conditions. NZTE has Non-current liabilities changed its policy on accounting for vouchers to reflect a consistent approach across government to the treatment of Provisions – grants 1(b) 34,477 (34,477) - funding agreements.

a) A liability of $413,000 has been determined in relation to the new accounting policy. This has reduced the closing STATEMENT OF COMPREHENSIVE REVENUE AND EXPENSE voucher accrual by $1,731,000, and operating expenditure and the accumulated deficit by $67,000. No other changes to accounting policies have been made during the year, and policies have been consistently applied to all years presented in these financial statements. Income

Revenue from Crown - grants 2(a) 19,909 4,941 24,850 NOTE 2 : REVENUE FROM CROWN OPERATING AND REVENUE FROM CROWN GRANTS

NZTE received funding from the Crown for the specific purposes of NZTE as set out in the Statement of Service Expenditure Performance Expectations 2014-15 and the scope of the relevant government appropriations. Grant Expense 2(a) 19,909 4,941 24,850 NZTE considers there are no conditions attached to the funding and it is recognised as revenue at the point of entitlement. Other Operating Expenses (incl voucher expense) 3(a) 70,243 (67) 70,176 NZTE received funding from the Crown for grants as set out in the Statement of Service Performance Expectations 2014-15 and the scope of the relevant government appropriations. Refer to Note 1 for revenue recognition policy

STATEMENT OF CHANGES IN EQUITY These two revenue streams are considered non-exchange transactions.

Equity at the beginning of the year 20,696 20,696

Total comprehensive income/(loss) 3(a) (1,941) 67 (1,874)

Equity at the end of the year 18,755 67 18,822 NZTE ANNUAL REPORT 2014/2015 NZTE ANNUAL REPORT 2014/2015 52 Financial Statements Financial Statements 53

2015 2014 2015 2014 $000 $000 $000 $000

NOTE 3 : OTHER OPERATING REVENUE NOTE 8 : OTHER OPERATING EXPENSES

Rental income 2,086 757 Audit fees - for the audit of the financial statements 246 240

Other income 5,792 3,087 Audit fees - other than Audit New Zealand 3 6

Revenue from sale of consultancy services to offshore government entities 5,110 - Board fees 220 217

Total other operating revenue 12,988 3,844 Development and implementation of high impact projects, iPlans and other initiatives 10,181 9,258

Capability training and mentoring services 9,551 8,468

NOTE 4 : FINANCE INCOME Loss on disposal of property, plant and equipment 15 9

Interest Income 605 300 Operating lease expenses 14,260 11,771

Gains on derivative financial instruments - unrealised 4,517 - Telling the New Zealand Story 1,680 3,531

Foreign exchange gains - unrealised 208 - Other services provided by third parties 5,255 4,572

Total finance income 5,330 300 Costs to 3rd party service providers for sale of consulting services to offshore government 5,094 - entities

Other Sponsorship and promotional activity 3,874 6,232 NOTE 5 : PERSONNEL COSTS Total Missions and Events Centre and Coalitions (including Cricket World Cup and Rugby 3,106 - Wages and salaries 76,224 72,311 World Cup)

Contributions to superannuation plans 206 272 Capital charge 1,506 1,561

Increase/(decrease) in employee benefit provisions 1,583 779 Capital Charge

Total personnel costs 78,013 73,362 NZTE pays a capital charge to the Crown on its equity as at 30 June and 31 December each year. The capital charge rate for the year ended 30 June 2015 was 8.0 percent (2014: 8.0 percent).

NOTE 6 : FINANCE EXPENSES

Interest paid on finance lease liabilities - 2 NOTE 9 : CASH AND CASH EQUIVALENTS

Net losses from derivative financial instruments - realised 1,615 2,129 Cash and cash equivalents include cash on hand, deposits held on call with both domestic and international banks, and Net foreign exchange losses - 1,646 other short-term, highly liquid investments, with original maturities of three months or less.

Losses on derivative financial instruments - unrealised - 296 Current account 27 20

Total finance expense 1,615 4,073 Call account 8,400 7,216 Foreign currency accounts 2,221 1,897

NOTE 7 : GRANT EXPENSE Total cash and cash equivalents in the Statement of Cash Flows 10,648 9,133

Total grant expense 22,083 24,850 The cheque account is interest bearing, the call account earns interest at rates set from time to time by NZTE bankers, Westpac Banking Corporation. Some foreign currency accounts earn interest at floating rates based on daily bank deposit rates. NZTE ANNUAL REPORT 2014/2015 NZTE ANNUAL REPORT 2014/2015 54 Financial Statements Financial Statements 55

NOTE 12 : PROPERTY, PLANT AND EQUIPMENT NOTE 10 : TRADE AND OTHER RECEIVABLES Property, plant and equipment asset classes consist of computer hardware, leasehold improvements, furniture and office Debtors and other receivables are initially measured at fair value and subsequently measured at amortised cost using the equipment, and motor vehicles. Property, plant and equipment are shown at cost, less any accumulated depreciation and effective interest method, less any provision for impairment. Impairment of a receivable is established when there is objective impairment losses. evidence that NZTE will not be able to collect amounts due according to the original terms of the receivable. Significant Leased Assets financial difficulties of the debtor, probability that the debtor will enter into bankruptcy, and default in payments are Leases where NZTE assumes substantially all the risks and rewards of ownership are classified as finance leases. The assets considered indicators that the debtor is impaired. The amount of the impairment is the difference between the asset’s carrying acquired by way of finance lease are stated at an amount equal to the lower of their fair value and present value of the amount and the present value of estimated future cash flows, discounted using the original effective interest rate. minimum lease payments at inception of the lease, less accumulated depreciation and impairment losses. 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 Additions against the allowance account for receivables. Overdue receivables that have been renegotiated are reclassified as current (i.e. The cost of an item of property, plant or equipment is recognised as an asset only when it is probable that future economic not past due). 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. 2015 2014 $000 $000 Disposals Gains and losses on disposals are determined by comparing the proceeds with the carrying amount of the asset. Gains and Trade and other receivables losses on disposals are included in the Statement of Revenue and Expense.

Crown debtor - operating 16,491 16,978 Subsequent costs Costs incurred subsequent to initial acquisition are capitalised only when it is probable that future economic benefits or Trade receivables from non-related parties 713 829 service potential associated with the item will flow to NZTE and the cost of the item can be measured reliably. The costs of Total current trade and other receivables 17,204 17,807 day-to-day servicing of property, plant and equipment are recognised in the Statement of Comprehensive Revenue and Expense as they are incurred.

Depreciation Debtor from Crown - grants Depreciation is provided on a straight-line basis on all property, plant and equipment at rates that will write off the cost Current portion of grants receivable 11,832 13,442 of the assets to their estimated residual values over their useful lives. The useful lives and associated depreciation rates of Total Debtor from Crown - grants 11,832 13,442 major asset classes have been estimated as follows:

Trade receivables from non-related parties are non-interest bearing and are generally on 30-day terms. Trade receivables are Computer equipment 3 years 33% shown net of provision for doubtful debts amounting to $2k (2014: $2k) recognised in the current year. Furniture and office equipment 4 to 5 years 20% to 25% Debtor from Crown - grants are due from MBIE to pay grants administered by NZTE. MBIE pays funds to NZTE just before the grant is paid to the recipient. Leasehold improvements up to 9 years 11% to 33%

Motor vehicles 4 years 25% NOTE 11 : DERIVATIVE FINANCIAL ASSETS

Current portion of derivative financial assets/(liabilities) 2,640 (1,878) Leasehold improvements are depreciated over the unexpired period of the lease or the estimated remaining useful lives of the improvements, which ever is the shorter.

The residual value and useful life of an asset is reviewed, and adjusted if applicable, and adjusted if applicable, at each The notional principal amounts of material outstanding forward exchange contracts at 30 June 2015 are as follows: financial year end.

Impairment CURRENCY MILLION MILLION Property, plant and equipment and intangible assets that have a finite useful life are reviewed for impairment whenever Australian dollar 4 3 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 Canadian dollar 1 1 is the higher of an asset’s fair value less costs to sell and value in use. Euro 3 3 Value in use is depreciated replacement cost for an asset where its future economic benefits or service potential are not Great Britain pound 2 1 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. Hong Kong dollar 14 14 If an asset’s carrying amount exceeds its recoverable amount, the asset is impaired and the carrying amount is written Japanese yen 141 138 down to the recoverable amount. The total impairment loss is recognised in the Statement of Revenue and Expense. Singapore dollar 4 4 For assets not carried at a revalued amount the reversal of an impairment loss is recognised in the Statement of Revenue United States dollar 7 6 and Expense.

As at 30 June 2015, all financial instruments measured at fair value were categorised as level 2.

Comparatives have been presented to disclose the gain on the valuation of the derivative financial assets. NZTE ANNUAL REPORT 2014/2015 NZTE ANNUAL REPORT 2014/2015 56 Financial Statements Financial Statements 57

COMPUTER FURNITURE LEASEHOLD MOTOR TOTAL 2015 2014 HARDWARE AND OFFICE IMPROVEMENTS VEHICLES $000 $000 EQUIPMENT

$000 $000 $000 $000 $000 Summary of Work in Progress Computer Hardware 22 89 Year ended 30 June 2015 Cost Furniture and Office Equipment 39 260 Leasehold Improvements 208 1,264 At 1 July 2014 10,681 6,367 14,763 2,723 34,534 Total Work in Progress 269 1,613 Additions 645 468 2,972 376 4,461

Disposals (169) (982) (647) (324) (2,122) Restrictions Impairment - - - - - There have been no restrictions on property, plant and equipment throughout the reporting period.

Balance at 30 June 2015 11,157 5,853 17,088 2,775 36,873 NOTE 13 : INTANGIBLE ASSETS

Year ended 30 June 2014 Software acquisition and development Cost 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 At 1 July 2013 10,674 6,043 14,085 2,691 33,493 as an intangible asset. Direct costs include software development, employee costs and an appropriate portion of relevant Additions 732 830 3,771 402 5,735 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. Disposals (725) (506) (3,093) (370) (4,694) Amortisation Impairment - - - - - The carrying value of an intangible asset with a finite life is amortised on a straight-line basis over its useful life. Amortisation Balance at 30 June 2014 10,681 6,367 14,763 2,723 34,534 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 Year ended 30 June 2015 major classes of intangible assets have been estimated as follows: Accumulated depreciation and impairment loss

At 1 July 2014 9,060 5,140 8,440 1,977 24,617 Computer software (developed) 3 to 5 years 20% to 33%

Depreciation charge for the year 1,051 410 1,440 310 3,211 Computer software (acquired) 4 to 5 years 20% to 25% Elimination on disposal (167) (972) (639) (324) (2,102)

Impairment - - - - -

Balance at 30 June 2015 9,944 4,578 9,241 1,963 25,726

Year ended 30 June 2014 Accumulated depreciation and impairment loss

At 1 July 2013 8,405 5,307 9,990 2,029 25,731

Depreciation charge for the year 1,375 333 1,542 266 3,516

Elimination on disposal (720) (500) (3,092) (318) (4,630)

Impairment - - - - -

Balance at 30 June 2014 9,060 5,140 8,440 1,977 24,617

At 30 June 2015

Cost 11,157 5,853 17,088 2,775 36,873

Accumulated depreciation and (9,944) (4,578) (9,241) (1,963) (25,726) impairment

Net carrying amount 1,213 1,275 7,847 812 11,147

At 30 June 2014

Cost 10,681 6,367 14,763 2,723 34,534

Accumulated depreciation and (9,060) (5,140) (8,440) (1,977) (24,617) impairment

Net carrying amount 1,621 1,227 6,323 746 9,917 NZTE ANNUAL REPORT 2014/2015 NZTE ANNUAL REPORT 2014/2015 58 Financial Statements Financial Statements 59

COMPUTER TOTAL NOTE 14 : TRADE AND OTHER PAYABLES SOFTWARE $000 $000 2015 2014 $000 $000 Year ended 30 June 2015 Cost Payables due to non-related parties 10,655 14,100

At 1 July 2014 14,468 14,468 Income in advance - 92 Additions 917 917 FBT, GST, VAT and PAYE payable 3,762 1,683 Disposals (4,045) (4,045) Total trade and other payables 14,417 15,875 Impairment - - Balance at 30 June 2015 11,340 11,340 Creditors and other payables are non interest bearing and are normally settled on the 20th of month following invoice terms. The carrying value of trade and other payables therefore approximates fair value. Year ended 30 June 2014 Cost At 1 July 2013 12,983 12,983 NOTE 15 : EMPLOYEE BENEFITS AND PROVISIONS

Additions 1,485 1,485 Current liabilities

Disposals - - Salary and wages accrual 36 1,381 Impairment - - Annual leave 4,321 3,620 Balance at 30 June 2014 14,468 14,468 Sick leave 130 130

Year ended 30 June 2015 Provision for restructuring 288 155 Accumulated Amortisation and Impairment Loss Total current employee benefits 4,775 5,286 At 1 July 2014 10,327 10,327 Amortisation expense 1,793 1,793 Disposals (4,045) (4,045) Non-current liabilities

Impairment - - Long-service leave 86 75 Balance at 30 June 2015 8,075 8,075 Retirement leave and other leave 2,187 1,687

Total non-current employee benefits 2,273 1,762 Year ended 30 June 2014 Accumulated amortisation and impairment loss

At 1 July 2013 8,809 8,809 Movement in provision for restructuring Amortisation expense 1,518 1,518 Opening balance 155 199 Disposals - - Additions for the year 589 155 Impairment - - Amounts used (456) (199) Balance at 30 June 2014 10,327 10,327 Closing balance 288 155 At 30 June 2015 Cost 11,340 11,340 NZTE continues to review and evaluate its organisational structure and skillsets to meet the performance of its responsibilities. Accumulated amortisation (8,075) (8,075) Net carrying amount 3,265 3,265 NOTE 16 : FINANCE AND OTHER LIABILITIES

At 30 June 2014 Other non-current financial liabilities 522 434 Cost 14,468 14,468 Total financial liabilities 522 434 Accumulated amortisation (10,327) (10,327) Net carrying amount 4,141 4,141 Lease incentives - landlords The total amount of intangibles in work in progress is $56,000 (2014: $1,537,000). The majority of intangible assets are internally generated software projects which may include components which have been externally aquired. Not later than one year 371 177

Restrictions Later than one year and not later than five years 630 722 There are no restrictions on intangibles. Total lease incentives 1,001 899 NZTE ANNUAL REPORT 2014/2015 NZTE ANNUAL REPORT 2014/2015 60 Financial Statements Financial Statements 61

NZTE subleases office space at Quay Street, Auckland. The total non-cancellable operating lease relates to the lease of Total non-cash items 783 7,100 3604m2 over two floors and represents the landlord contribution to the fitout. The lease expires 31 December 2018, with an option of one right of renewal for six years. Add / less items not classified as operating activity: NZTE leases office space at Madison Avenue, New York. The total non-cancellable operating lease relates to the lease of 349m2 and represents the landlord contribution to the fitout. The lease expires on 31 August 2018, with an option of one Net loss/(gain) on disposal of property, plant and equipment (68) (85) right of renewal for two years. Finance lease liability/Lease Incentive - (371) NZTE leases office space at West Pender Street, Vancouver. The total non-cancellable operating lease relates to the lease of 166m2 and represents the landlord contribution to the fitout. The lease expires on 31 August 2018, with an option of one Add / less working capital movements: right of renewal for five years. (Increase)/decrease in trade and other receivables and prepayments (135) (3,632) NZTE leases office space at William Street, Melbourne. The total non-cancellable operating lease relates to the lease of 202.3m2 and represents the landlord contribution to the fitout. The lease expires on 15 June 2016, with an option of right of (Increase)/decrease in Crown debtor grants 1,610 5,875 renewal for two further terms of three years. Increase/(decrease) in trade payables (1,212) 507 NZTE leases office space at Olympic Boulevard, Los Angeles. The total non-cancellable operating lease relates to the lease Increase/(decrease) in grants accrual (1,610) (5,875) of 668m2 and represents the rent freeperiod of 6 months to NZTE. The lease expires on 31 July 2020, with an option of one right of renewal for five years. Increase/(decrease) in employee benefits (511) 655

Total working capital movements (1,858) (2,470)

NOTE 17 : ACCRUALS - GRANTS Net cash flow from operating activities 7,003 2,300

2015 2014 $000 $000 NOTE 19 : FINANCIAL RISK MANAGEMENT NZTE’s principal financial instruments (other than derivatives), comprise cash and short-term deposits. The main purpose Current portion of grants payable 11,832 13,442 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 The grant accrual at year end is based on an estimate of the amount of qualifying grant expenditure claimable by grant consisting principally of forward currency contracts. The purpose of these is to manage the currency risks arising from recipients that has not yet been invoiced to NZTE. The estimate is based on the average number of months since the NZTE’s operations and its sources of finance. It is NZTE’s policy, and has been throughout the period under review, that no previous claim, (2015 - 6.2 months, 2014 - 6.2 months), the percentage of overall grants claimed per annum over the grant trading in financial instruments shall be undertaken. period (Year 1 – 8%, Year 2 – 28%, Year 3 – 25%, Year 4 – 15%, Year 5 – 10%, with an unclaimed portion of 12%), and the amount NZTE is exposed to credit risk, interest rate risk, liquidity risk and foreign currency risk. NZTE’s senior management approved in each year. 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 NZTE had no contingent liabilities in relation to crown grants as at 30 June 2015 (2014: nil). 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.

NOTE 18 : RECONCILIATION OF TOTAL COMPREHENSIVE INCOME / (LOSS) Financial instruments categories and fair value WITH NET CASH FLOWS FROM OPERATING ACTIVITIES The fair values together with the carrying amounts shown in the Statement of Financial Position are as follows:

Total comprehensive income / (loss) 8,146 (1,874) NOTE CARRYING CARRYING AMOUNT AMOUNT Add non cash items: 2015 2014 Depreciation of property, plant and equipment 3,211 3,516 $000 $000

Amortisation of intangible assets 1,793 1,518 Financial assets, loans and receivables Net unrealised foreign exchange (gains) / losses (214) 296 Cash and cash equivalents 9 10,648 9,133 Increase /(decrease) in non-current employee entitlements 511 124

Fair value changes in derivatives (4,518) 1,646 Trade and other receivables and Debtor from Crown - grants 10 29,036 31,249

Deposits 2,011 1,655

Financial liabilities measured at amortised cost

Trade and other payables 14 14,417 15,875 Financial liabilities 16 522 434

Fair value through Statement of Revenue and Expense

Derivative financial assets/(liabilities) 11 2,640 (1,878) NZTE ANNUAL REPORT 2014/2015 NZTE ANNUAL REPORT 2014/2015 62 Financial Statements Financial Statements 63

The carrying amounts represent the fair values of financial instruments The carrying amounts of financial instruments The status of trade receivables for NZTE at the reporting date is as follows: 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. GROSS IMPAIRMENT GROSS IMPAIRMENT In the 2014 Notes to the Financial Statements the carrying amount of the deposits balance was incorrectly stated as RECEIVABLE 2015 RECEIVABLE 2014 $2,303. This has been restated to $1,655. 2015 2014 $000 $000 $000 $000 Estimation of fair values analysis Major methods and assumptions used in estimating the fair values of financial instruments reflected in the table above are summarised below. Trade and other receivables 17,206 (2) 17,809 (2)

Derivatives Analysed as: 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. Not past due 17,009 - 17,429 -

Where discounted cash flow techniques are used, estimated future cash flows are based on management’s best estimates Past due 0-30 days 113 - 313 - 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. Past due 31-120 days 57 - 52 -

Finance lease liabilities Past due 121-364 days 27 (2) 15 (2) 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. Past due more than one year - - - - Trade and other receivables and payables Total trade and other receivables 17,206 (2) 17,809 (2) 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 In summary, trade receivables for NZTE are determined to be impaired 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, 2015 2014 which imposes restrictions in relation to borrowings, acquisition of securities, issuing guarantees and indemnities and $000 $000 use of derivatives. 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 Gross trade receivables 17,206 14,292 remaining a going concern.

a) Credit risk Individual impairment (2) (2) 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 Total trade and other receivables net 17,204 14,290 by the carrying amount in the Statement of Financial Position. Movements in the provision for impairment of receivables are as follows: 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, Balance at 1 July (2) (2) high-quality entity.

Additional provisions made during the - - year

Receivables written-off during period - -

Impairments at 30 June (2) (2)

Individually impaired trade receivables relate to insolvent customers or debts in recovery assessed as uncollectible. In the case of insolvency, the group generally writes off the receivable in full unless there is clear evidence that a receipt is highly probable. NZTE ANNUAL REPORT 2014/2015 NZTE ANNUAL REPORT 2014/2015 64 Financial Statements Financial Statements 65

b) Interest rate risk CONTRACTUAL LESS THAN 6 TO 12 1 TO 2 2 TO 5 MORE NZTE has interest rate risk arising from interest bearing Call Account and Term Deposit balances. NZTE does not actively CASHFLOWS 6 MONTHS MONTHS YEARS YEARS THAN 5 YEARS manage its exposure to interest rate risk. $000 $000 $000 $000 $000 $000

2015 WITHIN ONE YEAR Trade and other payables 14,417 14,417 - - - -

As at 30 June 2015 Finance and other liabilities 522 - - 522 - -

Floating Rate: Total 14,939 14,417 - 522 - -

Cash and Deposits 2.7% to 3.2%

2014

As at 30 June 2014 Trade and other payables 15,875 15,875 - - - -

Floating Rate: Finance and other liabilities 434 - - - 434 -

Cash and Deposits 3% to 3.7% Derivative financial liabilities 1,878 1,008 870 - - -

NZTE has floating rate exposures of cash and deposits which are due to reset within one year. Total 18,187 16,883 870 - 434 -

Sensitivity Analysis In the 2014 Notes to the Financial Statements the carrying amount of Finance and other liabilities was incorrectly stated as A change of 50 basis points in interest rates with all other variable held constant, would increase/(decrease) equity by the $1,333,000. This has been restated to $434,000. amounts shown below: d) Foreign currency risk NZTE has offices overseas and undertakes transactions denominated in foreign currencies. As a result of these activities TAX PAYERS FUNDS exposures in foreign currency arise. The currencies giving rise to this risk are primarily the United States dollar, Euro, Great $000 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 As at 30 June 2015 exchange contracts are completed approximately nine months before the financial year begins. The appropriation from the 50 basis point increase 42 Crown for the financial year is primarily based on the same foreign exchange contracted rates. The total foreign exchange 50 basis point decrease (42) exposure hedged during the year ended 30 June 2015 was 53 percent (2014: 57 percent) of total overseas expenditure in foreign currencies.

Forecasted transactions As at 30 June 2014 NZTE has not designated its forward exchange contracts as cash flow hedges. Accordingly, fair value movements in 50 basis point increase 36 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. The net fair value of forward exchange contracts used as 50 basis point decrease (36) hedges of forecasted transactions at 30 June 2015 was $2,640,000 asset (2014: $1,878,000 liability), comprising $2,640,000 assets (2014: $0) and liabilities of $0 (2014: $1,878,000) that were recognised in fair value derivatives.

c) Liquidity Risk Recognised assets and liabilities Changes in the fair value of forward exchange contracts that economically hedge monetary assets and liabilities in foreign Liquidity risk is the risk that NZTE will encounter difficulty raising liquid funds to meet commitments as they fall due. Prudent currencies and for which no hedge accounting is applied are recognised in the Statement of Comprehensive Revenue and liquidity risk management implies maintaining sufficient cash and ability to close out market positions. 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 (see notes 4 and 6). The fair value of forward NZTE manages liquidity risk by continuously monitoring forecast and actual cash flow requirements. exchange contracts used as economic hedges of monetary assets and liabilities in foreign currencies at 30 June 2015 was $2,640,000 (2014: $1,878,000) recognised in fair value derivatives. The following are the contractual maturities of financial liabilities, including estimated interest payments. The amounts Sensitivity analysis disclosed are the contractual undiscounted cash flows. At 30 June 2015, it is estimated that a general increase of one percentage point in the value of the New Zealand dollar against other foreign currencies would have decreased NZTE’s total comprehensive revenue / (expense) by approximately ($330,000) for the year ended 30 June 2015 (2014: ($297,000). A general decrease of one percentage point in the value of the New Zealand dollar against other foreign currencies would have increased NZTE's total comprehensive income / (loss) by approximately $335,000 for the year ended 30 June 2015 (2014: $233,000). The forward exchange contracts have been included in this calculation. NZTE ANNUAL REPORT 2014/2015 NZTE ANNUAL REPORT 2014/2015 66 Financial Statements Financial Statements 67

Grant Commitments NOTE 20 : INCOME TAX Grant commitments for those grant contracts awarded but yet to be drawn down. 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 of NZ G2G Partnerships Ltd. 2015 2014 $000 $000 37,468 33,213 2015 2014 $000 $000 There are no restrictions placed on NZTE by any of its leasing arrangements. Statement of Comprehensive Revenue and Expense

Current income tax charge 43 - NOTE 22 : CONTINGENT LIABILITIES Deferred income tax - - NZTE has provisioned potential employment and contractual dispute related matters, and estimated that the maximum Temporary differences - - value of these contingent liabilities (not including costs) at 30 June 2015 is $45,000 (2014: $493,000 for employment related matters and potential contractual disputes) Total tax expense/(credit) reported in the Statement of 43 - Comprehensive Revenue and Expense NZTE has indemnities in place for the directors of NZTE's subsidiary companies, the general managers of NZTE's subsidiary company that is incorporated in China, and for the independent business people who provide advice to New Zealand businesses through NZTE's Beachheads programme. The indemnities were approved by the NZTE Board and Reconciliation of effective tax rate (2) (2) NZTE has insurance in place to cover any liability that may arise under the terms of the indemnities.

Net earnings for the year 8,189 - NZTE has no contingent assets (2014: $nil).

Earnings not subject to income tax 8,036 -

Net earnings subject to income tax 153 NOTE 23 : RELATED PARTY DISCLOSURE

Income tax at 28% 43 - All related party transactions have been entered into on an arm's length basis. NZTE is a Crown entity in terms of the Crown Entities Act 2004, and is a wholly owned entity of the Crown. The government significantly influences the roles of NZTE as well as being its major source of revenue. 2015 2014 Controlled Entity $000 $000 NZTE has a 50 percent shareholding in The New Zealand Way Ltd. This company is the operating entity of a joint venture between NZTE and Tourism New Zealand. NOTE 21 : COMMITMENTS AT BALANCE DATE The carrying value as at 30 June 2015 of $75 (2014: $75) represents NZTE's share in the issued and paid up capital of Capital Commitments The New Zealand Way Ltd. The financial year end of The New Zealand Way Limited is 30 June.

Leasehold Improvements 790 2,631 The New Zealand Way owns the intellectual property to the Brand New Zealand fern mark and the website URL Total capital commitments 790 2,631 NewZealand.com.

Capital commitments represent capital expenditure contracted for at balance date but not yet incurred Significant transactions with government-related entities The Crown provides NZTE with actual funding of $179 million (2014: $171 million) for the specific purposes set out in its Non-cancellable operating lease commitments founding legislation and the scope of NZTE government appropriations. Not later than one year 10,576 8,534 Collectively, but not individually, significant, transactions with government-related entities. Later than one year and not later than five years 17,790 17,345 In conducting its activities, NZTE is required to pay various taxes and levies (such as GST, FBT, PAYE and ACC levies) to the Crown and entities related to the Crown. The payment of these taxes and levies, other than income tax, is based on the Later than five years 5,667 2,242 standard terms and conditions that apply to all tax and levy payers. NZTE is exempt from paying income tax. Total non-cancellable operating lease commitments 34,033 28,121

A significant portion of the total non-cancellable operating lease commitments are for office rental, international residential rental and information technology service agreements. The operating lease commitments expire from July 2015 to June 2023.

There are no restrictions placed on NZTE by any of its leasing arrangements. NZTE ANNUAL REPORT 2014/2015 NZTE ANNUAL REPORT 2014/2015 68 Financial Statements Financial Statements 69

KEY MANAGEMENT PERSONNEL COMPENSATION NOTE 24 : BOARD MEMBER REMUNERATION

2015 2014 $000 $000 Board members earned the following remuneration (fees) during the year.

Board Members MEMBER 2015 2014 Remuneration 221 216 $ $

Number of members 7.2 7 Andrew Ferrier 56,000 56,000

Leadership Team Charles Finny 26,950 26,950

Remuneration 2,673 2,464 Peter Townsend 26,950 26,950

Full-time equivalent members 7 7 Robin Hapi 26,950 26,950

Total key management personnel remuneration 2,894 2,680 Karen Fistonich 24,500 24,500

Total full-time equivalent members 14.2 14 Julie Christie 28,175 28,175 Jennifer Kerr 26,950 26,950

Key management personnel include the Board, Chief Executive, and the other six members of the Lead Team. Board Wayne Norrie (appointed 1/6/15) 2,042 - members calculated as full-time equivalents based on time spent on board activities. Charlotte Walshe (appointed 1/6/15) 2,042 - Related Party Transactions required to be disclosed Total 220,559 216,475 All transactions entered into with government departments and other Crown entities are conducted at arm’s length on normal business terms. In overseas countries, NZTE operates with other government agencies in securing cost-effective representation. There have been no payments made to committee members appointed by the Board who are not Board members during the A number of companies in which NZTE Board members have an interest are members of industry groups. All transactions financial year. NZTE has provided a deed of indemnity to Board members for certain activities undertaken in the performance with these industry groups are on the same basis as all other industry groups and are not considered related party of NZTE’s functions. NZTE has effected Directors’ and Officers’ Liability and Professional Indemnity insurance cover transactions. The schedule below presents material related party transactions for the year ended 30 June 2015, which during the financial year in respect of the liability or costs of Board members and employees. No Board members received cannot be demonstrated to be arm’s length transactions on normal commercial terms. No permissions to act despite being compensation or other benefits in relation to cessation as at 30 June 2015 (2014: $nil). interested in a matter, in terms of section 68 of the Crown Entities Act 2004, were granted in the year ended 30 June 2015. All items are shown exclusive of GST. NOTE 25 : MAJOR BUDGET VARIATIONS

Revenue from Crown-grants and grant expenses are below budget primarily due to a change in the accounting policy for recognising grant revenue and expenditure. The policy change reflects recognising the revenue and expense based on the NAME OF BOARD RELATIONSHIP TRANSACTION AMOUNT BALANCE OUTSTANDING activities completed under the grant by the grant recipient, rather than the time of approval of the grant. MEMBER AND ENTITY AS AT 30 JUNE 2015 ($) Other operating revenue is above budget due to receiving revenue for consulting services to offshore government entities, ($) contributions from other government agencies to The New Zealand Story, and other New Zealand Government agencies PETER TOWNSEND support for missions and events.

NZTE purchased the following: Finance income is above budget, primarily due to the difference arising from the revaluation of the contracted foreign Canterbury Employers’ Chamber Chief Executive Event management 26,789 10,591 exchange derivatives for the 2015/16 financial year and the foreign exchange rates applying as at 30 June 2015. of Commerce paid by NZTE Finance expense is above budget due to translating expenditure incurred overseas into New Zealand dollars at a higher rate to Canterbury than the foreign exchange derivatives contracted exchange rates. Employers’ Chamber Other operating expenses are above budget due to the costs of delivering consulting services to offshore government entities of and missions and events. Commerce Total Comprehensive Revenue and Expense and Accumulated comprehensive revenue is above budget due to the impact of the revaluation of the foreign exchange derivatives at 30 June 2015, and the small surplus arising during the year. KAREN FISTONICH

NZTE purchased the following: Current and non-current Debtor from Crown - grants and accrual grants are below budget due to a change in the accounting policy for recognising the debtor and liability accrual. The policy change reflects recognising the grant debtor and liability, Villa Maria Estate Ltd Director Reimbursement 148,044 - based on the activities completed under the grant by the grant recipient, rather than the balance of the grant approved not of conference and paid. meeting expenses paid by NZTE to Villa Maria Estate Ltd NZTE ANNUAL REPORT 2014/2015 NZTE ANNUAL REPORT 2014/2015 70 Financial Statements Financial Statements 71

The derivative financial asset is above budget due to the impact of revaluing the foreign exchange derivatives for the 2015/16 financial year at the 30 June 2015 rates, compared to the contracted rates. Independent Intangible assets are below budget, primarily due to the deferral of the planned financial management information system upgrade and other software budgeted. Auditor’s Opinion Cash flow from operating activities for client and other income is above budget due to receiving revenue for consulting services to offshore government entities, contributions for other New Zealand government agencies for the New Zealand Story, and other New Zealand agencies support for mission and events.

To the readers of New Zealand Trade • comply with generally statements and the performance and Enterprise group’s financial accepted accounting practice information are free from material statements and performance in New Zealand and have been misstatement. information for the year ended 30 prepared in accordance with NOTE 26 : RECONCILIATION OF OUTPUT CLASS COSTS TO TOTAL EXPENSES PER STATEMENT Material misstatements are differences June 2015. Public Benefit Entity Standards. OF COMPREHENSIVE REVENUE AND EXPENSE or omissions of amounts and The Auditor General is the auditor of • the performance information: disclosures that, in our judgement, STATEMENT OF COST OF SERVICE - ACTUAL BUDGET New Zealand Trade and Enterprise and are likely to influence readers’ overall OUTPUT EXPENSE 2015 2015 • presents fairly, in all material its New Zealand domiciled subsidiaries. understanding of the financial $000 $000 respects, the Group’s The Auditor General has appointed statements and the performance performance for the year me, Karen Young using the staff and information. If we had found material Services to Support the Growth and Development of New Zealand Businesses ended 30 June 2015, including resources of Audit New Zealand, to misstatements that were not for each class of reportable Revenue Crown 13,181 13,181 carry out the audit of the financial corrected, we would have referred to outputs: Revenue Other - - statements and the performance them in our opinion. information of the group consisting of ·· its standards of performance An audit involves carrying out Total Revenue 13,181 13,181 New Zealand Trade and Enterprise and achieved as compared with procedures to obtain audit evidence its subsidiaries and other controlled forecasts included in the Expenses (13,105) (13,181) about the amounts and disclosures entities (collectively referred to as “the statement of performance in the financial statements and Net Result 76 - Group”), on her behalf. expectations for the financial the performance information. The year; Opinion on the financial statements procedures selected depend on our and the performance information ·· its actual revenue and output judgement, including our assessment International Business Growth Services expenses as compared with of risks of material misstatement We have audited: Revenue Crown 112,023 111,006 the forecasts included in the of the financial statements and the • the financial statements of the statement of performance performance information, whether Revenue Other 9,673 1,980 Group on pages 45 to 74, that expectations for the financial due to fraud or error. In making those Total Revenue 121,696 112,986 comprise the statement of financial year; and risk assessments, we consider internal position as at 30 June 2015, the control relevant to the preparation Expenses (118,786) (112,986) • complies with generally statement of comprehensive revenue of the Group’s financial statements accepted accounting practice in and expense, statement of changes in and performance information in order Net Result 2,910 - New Zealand. equity and statement of cash flows for to design audit procedures that are the year ended on that date and the Our audit was completed on 30 appropriate in the circumstances, but notes to the financial statements that October 2015. This is the date at which not for the purpose of expressing an Services to Support Sector Development and Special Events include accounting policies and other our opinion is expressed. opinion on the effectiveness of the Revenue Crown 31,429 31,072 explanatory information and Group’s internal control. The basis of our opinion is explained Revenue Other 8,882 0 • the performance information of the below. In addition, we outline the An audit also involves evaluating: Group on page 3 and 35 to 44. responsibilities of the Board and Total Revenue 40,311 31,072 • the appropriateness of accounting our responsibilities, and explain our In our opinion: policies used and whether they have Expenses (39,876) (31,072) independence. been consistently applied; • the financial statements of the Net Result 435 - Basis of opinion Group: • the reasonableness of the significant We carried out our audit in accordance accounting estimates and judgements • present fairly, in all material with the Auditor General’s Auditing made by the Board; respects: Standards, which incorporate the • the appropriateness of the reported ·· its financial position as at 30 International Standards on Auditing NOTE 27 : EVENTS AFTER BALANCE performance information within the June 2015; (New Zealand). Those standards crown entity’s framework for reporting There were no significant events after balance date that required the financial statements to be adjusted (2014: nil). require that we comply with ethical ·· its financial performance and performance; requirements and plan and carry cash flows for the year then out our audit to obtain reasonable ended; and assurance about whether the financial NZTE ANNUAL REPORT 2014/2015 NZTE ANNUAL REPORT 2014/2015 72 Financial Statements Independent Auditor’s Opinion 73

• the adequacy of the disclosures Independence in the financial statements and the When carrying out the audit, performance information; and Other Statutory we followed the independence • the overall presentation of requirements of the Auditor General, the financial statements and the which incorporate the independence performance information. requirements of the External Reporting Reporting Requirements Board. We did not examine every transaction, nor do we guarantee complete Other than the audit, we have no accuracy of the financial statements relationship with or interests in the MINISTERIAL DIRECTIONS and the performance information. Also, Group. (Sections 114 and 115 Crown Entities Act 2004) we did not evaluate the security and controls over the electronic publication No directions were given to NZTE in writing by a Minister under any enactment during the year ended 30 June 2015. of the financial statements and the performance information. ENFORCEMENT OF ACTS

We believe we have obtained sufficient (Section 20(3) Crown Entities Act 2004) and appropriate audit evidence to No natural person acts were enforced against NZTE in reliance on section 20 of the Crown Entities Act 2004 during the Karen Young provide a basis for our audit opinion. year ended 30 June 2015. Responsibilities of the Board Audit New Zealand On behalf of the Auditor General EMPLOYEE REMUNERATION The Board is responsible for preparing Wellington, New Zealand financial statements and performance The table below shows the number of NZTE employees who received remuneration and/or benefits (excluding redundancy information that: and cessation payments) of $100,000 or more during the year ended 30 June 2015.

• comply with generally accepted accounting practice in New Zealand and have been prepared in accordance 2014/15 2014/15 2014/15 2013/14 2013/14 2013/14 with Public Benefit Entity Standards; TOTAL DOMESTIC EXPATRIATES INTERNATIONAL DOMESTIC EXPATRIATES INTERNATIONAL • present fairly the Group’s financial REMUNERATION NZ SECONDED LOCALLY NZ SECONDED LOCALLY AND BENEFITS OVERSEAS ENGAGED OVERSEAS ENGAGED position, financial performance and ($) cash flows; and

• present fairly the Group’s 100,000–109,999 24 0 13 32 0 8 performance. 110,000–119,999 28 1 14 21 1 13 The Board’s responsibilities arise from 120,000–129,999 27 0 18 24 0 13 the Crown Entities Act 2004. 130,000–139,999 19 0 2 20 0 13 The Board are responsible for such internal control as it determines is 140,000–149,999 8 1 12 11 0 4 necessary to enable the preparation of 150,000–159,999 8 0 5 4 1 9 financial statements and performance information that are free from material 160,000–169,999 12 2 6 5 1 3 misstatement, whether due to fraud or 170,000–179,999 3 0 1 1 2 3 error. The Board are also responsible for the publication of the financial 180,000–189,999 2 2 2 4 3 1 statements and the performance 190,000–199,999 5 1 2 2 1 2 information, whether in printed or electronic form. 200,000–209,999 2 3 2 3 2 1

Responsibilities of the Auditor 210,000–219,999 2 3 0 1 4 1

We are responsible for expressing an 220,000–229,999 0 1 1 1 5 1 independent opinion on the financial statements and the performance 230,000–239,999 1 3 0 1 4 0 information and reporting that opinion 240,000–249,999 1 5 1 0 1 0 to you based on our audit. Our responsibility arises from the Public 250,000–259,999 0 4 0 0 3 0 Audit Act 2001. 260,000–269,999 1 1 0 0 1 2

270,000–279,999 0 2 0 0 0 0 74

2014/15 2014/15 2014/15 2013/14 2013/14 2013/14

TOTAL DOMESTIC EXPATRIATES INTERNATIONAL DOMESTIC EXPATRIATES INTERNATIONAL REMUNERATION NZ SECONDED LOCALLY NZ SECONDED LOCALLY AND BENEFITS OVERSEAS ENGAGED OVERSEAS ENGAGED ($)

280,000–289,999 0 2 0 1 1 0

290,000–299,999 0 1 0 0 0 0

300,000–309,999 0 0 0 2 0 0

310,000–319,999 1 0 1 0 2 0

320,000–329,999 1 0 0 1 0 0

330,000–339,999 0 0 0 1 0 0

340,000-349,999 0 1 0 0 0 0

350,000-359,999 0 0 0 0 0 0

360,000-369,999 2 0 0 0 1 0

370,000-379,999 0 0 0 0 1 0

380,000-389,999 0 1 0 1 0 0

390,000-399,999 0 1 0 0 1 0

400,000-409,999 0 0 0 0 0 0

410,000-419,999 1 0 0 0 0 0

420,000-429,999 0 0 0 0 0 0

430,000-439,999 0 1 0 0 0 0

440,000-449,999 0 0 0 0 0 0

450,000-459,999 0 0 0 0 0 0

460,000-469,999 0 0 0 0 0 0

470,000-479,999 0 0 0 0 0 0

480,000-489,999 0 0 0 0 0 0

490,000-499,999 0 0 0 0 0 0

500,000-509,999 0 0 0 0 0 0

510,000-519,999 0 0 0 0 0 0

520,000-529,999 0 0 0 0 0 0

530,000-539,999 0 0 0 0 0 0

540,000-549,999 0 0 0 0 0 0

550,000-559,999 0 0 0 1 0 0

560,000-569,000 0 0 0 0 0 0

570,000-579,000 1 0 0 0 0 0

The total remuneration paid to locally engaged employees in our international offices has been converted to New Zealand dollars, based on the average exchange rate during the year ended 30 June 2015.

During the year ended 30 June 2015, 15 domestic and expatriate employees received cessation payments totalling NZ$486,699. No locally engaged employees received cessation payments. NZTE’s OUR IN MARKET SUPPORT International 7 Regions 32 Languages Network 37 International locations 180 Private sector advisors Offshore NZTE employees as at 1 September 2015 250

Moscow Moscow Hamburg Hamburg London London Paris EUROPEParis EUROPE Vancouver Vancouver Milan Milan Istanbul Istanbul Madrid Madrid Beijing Beijing NORTH AMERICNORTHA AMERICA NewYork NewYork San Francisco San Francisco Seoul Seoul Washington DC Washington DC Tokyo Tokyo Los Angeles Los Angeles NewDelhi NewDelhiShanghai Shanghai GREATER CHINAGREATER CHINA Dubai Dubai Riyadh Riyadh Guangzhou GuanTagzipeihou Taipei Shenzhen Shenzhen Abu Dhabi Abu Dhabi Hong Kong Hong Kong Mumbai Mumbai Mexico City Mexico City INDIA, MIDDLE INDIA,EAST AND MIDDLE AFRICA EAST AND AFRICA Manila Manila Bangkok Bangkok Ho Chi Ho Chi Minh City Minh City

KualaLumpur KualaLumpur Bogota Bogota EAST ASIA EAST ASIA Auckland Auckland Singapore Singapore Hamilton TaurangaHamilton Tauranga Jakarta Jakarta New Plymouth New Plymouth Port Moresby Port Moresby Napier Napier Palmerston North Palmerston North SOUTH AMERICSOUTHA AMERICA

Nelson Nelson Wellington Wellington

SaoPaulo SaoPaulo AUSTRALIA ANDAUSTRALIA THE PACIFIC AND THE PACIFIC Christchurch Christchurch Santiago Santiago Sydney Sydney

Melbourne Melbourne Dunedin Dunedin New ZealandNew Zealand oces oces

Planned resource increase 78 NZTE ANNUAL REPORT 2014/2015 ENTERPRISE AND TRADE ZEALAND NEW Report Annual 2014/2015

ISSN 1177-665X

© Copyright New Zealand Trade and Enterprise (NZTE) 2015.

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 October should be in written form and not by reproduction of any such emblem, logo or Coat of Arms. 2015