Annual Report 2011 - Watercare

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
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