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 11. Integration of Retail Business On 1 November 2010 the retail water and wastewater businesses in the Auckland region were integrated as below into the company as part of the Auckland local body reorganisation: Business integrated Metrowater Limited Manukau Water Limited North Shore City Council Waitakere City Council Rodney District Council Franklin District Council Papakura District Council Auckland City Council Principal activity retail water and wastewater services retail water and wastewater services retail water and wastewater services retail water and wastewater services retail water and wastewater services retail water and wastewater services retail water and wastewater services retail water and wastewater services Subsidiaries acquired Metrowater Community Trust Auckland City Water Limited Principal activity assists water users (low income or special water usage needs) Non-trading company Businesses integrated Manukau North Waitakere Rodney Franklin Auckland Papakura Auckland Metrowater Water Shore City City District District City District Regional Adjustlimited Limited Council Council Council Council Council Council Council ments Total $000 $000 $000 $000 $000 $000 $000 $000 $000 $000 $000 Current assets Cash and bank balances - 11,953 - - - - - - - - 11,953 Trade and other receivables 32,604 32,946 9,485 9,409 7,251 729 - - - - 92,424 Inventories - - 72 - - - - - - - 72 Non-current assets Property, plant and equipment 1,386,590 1,019,143 1,204,462 482,515 323,940 154,985 70,418 84,111 - 8,799 4,734,963 Intangible assets 4,541 2,368 459 - - - - - - - 7,368 Current liabilities Bank overdraft (5,605) - - - - - - - - - (5,605) Trade and other payables (17,636) (11,869) (1,293) (1,382) (305) (61) - (9,534) - - (42,080) Retentions (660) (495) (2,494) (213) (247) (263) - - - - (4,372) Employee benefit liabilities (776) (351) (524) (208) (64) (18) - - - - (1,941) Non-current liabilities Borrowings (215,000) (134,368) (95,489) (145,428) (63,015) (21,977) (22,436) (8,297) (6,048) - (712,058) Deferred tax liability (279,537) (19,612) - - - - - - - (2,464) (301,613) Net assets integrated 904,521 899,715 1,114,678 344,693 267,560 133,395 47,982 66,280 (6,048) 6,335 3,779,111 Capital reserve (904,521) (899,715) (1,114,678) (344,693) (267,560) (133,395) (47,982) (66,280) 6,048 (6,335) (3,779,111) 2011 Financial Report PAGE 86 Return to Contents page
Watercare Services Limited 2011 ANNUAL REPORT Notes to the financial statements (continued) for the year ended 30 June 2011 11. Integration of Retail Business (continued) Adjustments for accounting policy differences: The net assets of the integrated companies were transferred into the financial statements of the company at net book value and subsequently adjusted for differences in accounting policies as explained below. See accounting policy 3 on integration of retail business. The company’s policy is to capitalise finance costs incurred during the course of construction that are attributable to a project using the finance rate applicable to the funding. To achieve consistency between the company’s policy and the integrated businesses, finance costs attributable to the integrated property, plant and equipment were estimated using the depreciated replacement cost method and capitalised as at 1 November 2010. This resulted in an increase of $8.8 million to property, plant and equipment with an increase to deferred tax liability of $2.5 million and a net increase of $6.3 million to capital reserve as shown under adjustments above. There were no other adjustments made to achieve consistency in accounting policies. Summary of assets and liabilities acquired The group acquired two subsidiaries, Metrowater Community Trust and Auckland City Water Limited (non-trading company) under the Local Government (Tamaki Makaurau Reorganisation) Act 2009, the Local Government (Auckland Council) Act 2009 and the Local Government (Auckland Transitional Provisions) Act 2010. The net assets acquired from the subsidiaries as at 1 November 2010 are as below: Metrowater Auckland City community Trust Water Limited total $’000 $’000 $’000 Subsidiaries acquired Current assets Cash and bank balances 51 - 51 Trade and other receivables 90 - 90 Current Liabilities Trade and other payables (10) - (10) Net assets acquired 131 - 131 The group disclosures in these financial statements represent the consolidated numbers of Watercare Services Limited (company) and its subsidiary Metrowater Community Trust. The net assets of Metrowater Community Trust at balance date are immaterial to the consolidated financial position of the group and comprise of a cash balance of $32,084 and accrued expenses of $15,206. PAGE 87 2011 Financial Report Return to Contents page
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Annual Report 2011 - Watercare

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