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 13. Property, Plant and Equipment (continued) Comparatives Property, plant and equipment – movement in gross carrying value company company 2009 2010 opening value Additions Disposals Depreciation Impairment Reclassification Closing value $000 $000 $000 $000 $000 $000 $000 Land 75,162 - - - - - 75,162 Buildings 88,724 10,643 - - - - 99,367 Pipelines 851,540 36,612 (242) - (557) - 887,353 Tanks, tunnels, roads and reservoirs 545,031 80,901 - - - - 625,932 Dams 190,908 124 (1) - - (181) 190,850 Machinery 404,362 37,348 (2,072) - - 181 439,819 Motor vehicles 3,730 767 (139) - - - 4,358 Office equipment 10,705 776 (1,516) - - - 9,965 2,170,162 167,171 (3,970) - (557) - 2,332,806 Work in progress 204,288 (43,847) - - - - 160,441 Gross carrying value 2,374,450 123,324 (3,970) - (557) - 2,493,247 Property, plant and equipment – movement in accumulated depreciation company company 2009 2010 opening value Additions Disposals Depreciation Impairment Reclassification Closing value $000 $000 $000 $000 $000 $000 $000 Land - - - - - - - Buildings (7) - - (2,296) - - (2,303) Pipelines (697) - 7 (24,265) - - (24,955) Tanks, tunnels, roads and reservoirs (39) - - (10,740) - - (10,779) Dams - - - (1,749) - - (1,749) Machinery (5,883) - 536 (24,415) - - (29,762) Motor vehicles (3,216) - 135 (491) - - (3,572) Office equipment (7,239) - 1,513 (1,288) - - (7,014) Accumulated depreciation (17,081) - 2,191 (65,244) - - (80,134) Property, plant and equipment – movement in net book values including revaluation company company 2009 2010 opening value Additions Disposals Depreciation Impairment Reclassification Closing value $000 $000 $000 $000 $000 $000 $000 Land 75,162 - - - - - 75,162 Buildings 88,717 10,643 - (2,296) - - 97,064 Pipelines 850,843 36,612 (235) (24,265) (557) - 862,398 Tanks, tunnels, roads and reservoirs 544,992 80,901 - (10,740) - - 615,153 Dams 190,908 124 (1) (1,749) - (181) 189,101 2011 Financial Report PAGE 90 Machinery 398,479 37,348 (1,536) (24,415) - 181 410,057 Motor vehicles 514 767 (4) (491) - - 786 Office equipment 3,466 776 (3) (1,288) - - 2,951 2,153,081 167,171 (1,779) (65,244) (557) - 2,252,672 Work in progress 204,288 (43,847) - - - - 160,441 Net book value 2,357,369 123,324 (1,779) (65,244) (557) - 2,413,113 Return to Contents page
Watercare Services Limited 2011 ANNUAL REPORT Notes to the financial statements (continued) for the year ended 30 June 2011 13. Property, Plant and Equipment (continued) All assets subject to valuation are independently valued at least every three years. The most recent valuation was completed at 30 June 2011. ANA Group completed the valuation in association with Beca Valuations Limited (Beca) who completed a peer review of the work. The assumptions used in determining the depreciated replacement cost of pipelines, tanks, roads, tunnels, reservoirs, dams and machinery were that: • construction costs based on recent contract-based construction work and the unit rates reflect the costs of replacing assets; • the useful lives of assets are calculated as the lesser of their physical life or the point where the asset is to be replaced for economic reasons; • the capital price goods index (CPGI) has been used where indexation is appropriate. At the time of valuation the CPGI was available to the March 2011 quarter; and • capitalised interest has been applied to qualifying asset types in accordance with the estimated construction period and applicable cost of debt. Beca completed the valuation of land and buildings. The land valuation was based on relevant market prices and buildings were valued using the depreciated replacement cost. The Local Government Acts 1974 and 2002 restrict the business activities of the group and effectively prevent selling of key assets. Many of the assets are specialised in nature, reflecting the activities of the group. As there is no active market for such assets and the income from them is not determined by the market, property, plant and equipment, other than land, buildings, motor vehicles and office equipment, are revalued to depreciated replacement cost, which reflects their deemed fair values. Each year, other than in the years in which the assets are revalued, the group assesses whether there has been any material change in the value of property, plant and equipment. The movement in asset values between June 2009 and June 2010 was assessed using indices deemed suitable by AECOM and Darroch registered valuers. The increase in asset value of 1.1% was not considered material by management and accordingly the assets were not revalued at 30 June 2010. group and Company Company 2011 2010 $000 $000 Work in progress relates to the following projects: Water treatment plants 17,884 12,587 Wastewater treatment plant 43,857 9,175 Wastewater pump stations and sewers 116,519 42,440 Watermains, pump stations and reservoirs 73,837 60,630 Dams and raw water transmission pipelines 8,205 21,032 Other 27,986 14,577 Total work in progress 288,288 160,441 14. Intangible Assets Intangibles – movement in gross carrying value company 1 November group and Company 2010 2010 2011 opening value Integration Additions Disposals Amortisation Reclassifications Closing value $000 $000 $000 $000 $000 $000 $000 Network models 3,301 3,346 - (673) - - 5,974 Computer software 13,960 258 14,994 (784) - 28 28,456 Resource consents 14,619 3,764 17 - - - 18,400 Easements 484 - - - - - 484 Gross carrying value 32,364 7,368 15,011 (1,457) - 28 53,314 Intangibles – movement in accumulated amortisation company 1 November group and Company 2010 2010 2011 opening value Integration Additions Disposals Amortisation Reclassifications Closing value $000 $000 $000 $000 $000 $000 $000 Network models (2,137) - - 885 (1,109) - (2,361) Computer software (11,761) - - 570 (4,693) - (15,884) Resource consents (4,092) - - - (748) - (4,840) Easements - - - - - - - Accumulated amortisation (17,990) - - 1,455 (6,550) - (23,085) 2011 Financial Report PAGE 91 Return to Contents page
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