Annual Report 2011 - Watercare

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Watercare Services Limited 2011 ANNUAL REPORT Notes to the financial statements (continued) for the year ended 30 June 2011 23. Commitments group and Company Company 2011 2010 $000 $000 Capital expenditure The capital expenditure committed to, but not recognised in, these financial statements at balance date was: Buildings 488 97 Pipelines 63,463 10,722 Tanks, tunnels, roads and reservoirs 4,295 5,654 Other 35,018 19,602 Total capital expenditure commitments 103,264 36,075 Anticipated payment schedule: Less than one year 79,636 25,121 One to two years 22,713 3,651 Two to five years 915 7,303 Total capital expenditure commitments 103,264 36,075 The commitments relate to the following projects: Hobson Bay sewer replacement - 5,527 Wastewater treatment plant 4,109 15,793 Water treatment plants 10,253 1,712 Bulk supply meters 6,797 - Expansion of the Waikato water treatment plant 11,156 - South Western interceptor 13,019 - Stage 1 Northern Waitakere wastewater 6,985 - Other projects 50,945 13,043 Total capital expenditure commitments 103,264 36,075 Operating leases Anticipated payments under non-cancellable operating leases: Less than one year 3,159 2,411 One to two years 3,003 2,357 Two to five years 6,361 6,299 Beyond five years 49,288 49,859 Total lease commitments 61,811 60,926 The major lease commitment is a long-term lease of the land forming the water catchments areas, which expires in July 2092. The annual rental of $510,000 has been included in these commitments at face value. Other leases include Newmarket office, parks, reservoirs and office equipment. 2011 Financial Report 24. Contingencies The Bank of New Zealand has issued performance bonds of $400,000 for 2011 (2010: $400,000). The performance bonds are to support the group’s obligations to Auckland Regional Council (now Auckland Council) for risks of environmental damage arising from the upgrade and operations of the Mangere Wastewater Treatment Plant. In the normal course of its business the group is exposed to claims, legal proceedings and arbitrations that may in some cases result in costs to the group. The directors believe that these have been adequately provided for by the group within note 19, page 94 of these financial statements and no additional material contingent liabilities requiring disclosure have been identified. PAGE 104 Return to Contents page
Watercare Services Limited 2011 ANNUAL REPORT Notes to the financial statements (continued) for the year ended 30 June 2011 25. Retirement Benefit Plans The employees of the group can elect to join the KiwiSaver scheme. KiwiSaver is a work-based savings scheme run through a selection of private providers. The obligation of the group is to contribute a specified percentage of payroll costs to the KiwiSaver scheme in line with employee contributions and the only obligation of the group to the KiwiSaver scheme is to make the specified contributions. The total defined contribution expense recognised in the statement of comprehensive income for 2011 was $566,483 (2010: $342,369). 26. Remuneration The directors and key management personnel are included in this compensation. group and Company Company 2011 2010 $000 $000 Compensation of directors and key management personnel Employees’ salaries and wages and directors’ fees 4,046 2,952 Post-employment benefits 67 - Other long-term employee benefits 8 20 Termination benefits 45 260 Total compensation for directors and key executives 4,166 3,232 2011 2010 appointed $000 $000 Directors’ remuneration Graeme Hawkins (retired December 2010) december 2002 96 75 David Clarke (Deputy Chairman) July 2008 72 38 Peter Drummond march 2010 65 16 Susan Huria July 2008 66 38 Terry Kayes (retired January 2010) January 2007 - 19 Ross Keenan (Chairman) march 2010 100 18 Dr Ian Parton (resigned December 2009) march 2001 - 24 Patrick Snedden december 2002 66 38 Jeff Todd May 2007 77 44 Tony Lanigan may 2011 9 - Catherine Harland may 2011 9 - Total 560 310 Directors’ fees paid during the year includes additional fees of $165,451 which were paid to directors as a result of the increased workload and commitment leading up to the integration. Of this amount, $94,312 was a back payment relating to the year ended 30 June 2010. 27. Events Occurring after Balance Date On 19 September 2011, Standard & Poor’s announced that it had upgraded its corporate credit ratings on Watercare Services Limited. The long-term rating was raised to ‘AA-’ from ‘A’ and the short-term rating was raised to ‘A-1+’ from ‘A-1’. The outlook is stable. The credit ratings on Watercare debt guaranteed by Auckland Council are unchanged at ‘AA’ long-term and ‘A-1+’ short-term. No adjustments are required to these financial statements in respect of this event. No other significant events have occurred since balance date requiring disclosure in these financial statements. PAGE 105 2011 Financial Report Return to Contents page
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Annual Report 2011 - Watercare

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