2 0 1 5 |
WE L ANNUA L REPOR T
50
9. Property, plant and equipment (continued)
Land and
buildings
($000)
Distribution
network
($000)
Plant and
equipment
($000)
Generation
assets
($000)
Total
($000)
Year ended 31 March 2015
Opening net book amount
12,009
486,900
26,435
-
525,344
Revaluation surplus/(deficit)
-
-
-
-
-
Additions
5
43,878
7,184
-
51,067
Work in progress
-
191
5,585
-
5,776
Disposals
-
(2,567)
(511)
-
(3,078)
Depreciation charge
(148)
(17,852)
(3,528)
-
(21,528)
Closing net book amount
11,866
510,550
35,165
-
557,581
At 31 March 2015
Cost or valuation
12,236
545,948
47,370
-
605,554
Accumulated depreciation
(370)
(35,398)
(12,205)
-
(47,973)
Net book amount
11,866
510,550
35,165
-
557,581
Capital work in progress included in cost
and net book amount
-
24,987
5,656
-
30,643
Additions of distribution system cost includes $631,000 (2014: $169,000) of interest capitalised at an average borrowing rate of 4.92%.
(2014: 4.05%)
Revaluations and impairment review
Land was revalued to market value for highest and best use on 31 March 2013 by independent valuers, Telfer Young (Waikato) Ltd
Registered Valuers. Buildings are recorded at purchase price following the acquisition in October 2012.
The company’s electricity distribution network was revalued as at 31 March 2013 to fair value by Deloitte. The fair values were established
in accordance with NZ IAS 16 - Property, Plant and Equipment and subsequent years IFRS 13 Fair Value Measurement. The valuation was
prepared using discounted cash flow methodology. This valuation was reviewed by Deloitte at 31 March 2015 to ensure it still represented
fair value.
The key assumptions used in the valuation as at 31 March 2013 include forecasts of future demand for electricity distribution services,
electricity distribution prices, operating and capital expenditure associated with existing assets, and the discount rate.
Assumptions
Valuation
assumptions
adopted
Low
High
Valuation
Impact
($000)
Domestic Load Growth
0.5%
0.0%
1.0% - $44m + $46m
Capital expenditure
$189m 90.0% 110.0%
-/+ $40m
WACC (with CPI inflation 2.25%)
7.08%
6.62%
7.54% +$53m - $45m
CPI Inflation (withWACC 7.08%)
2.25%
1.75%
2.75% +$23m - $21m
Terminal growth
2.00%
1.75%
2.25% +$37m - $31m
If property, plant and equipment were stated on the historical cost basis, the amounts would be as follows:
Land and
buildings
($000)
Distribution
network
($000)
Plant and
equipment
($000)
Generation
assets
($000)
Total
($000)
Cost
10,013
439,625
35,812
-
485,450
Accumulated depreciation
(222)
(156,668)
(9,377)
-
(166,267)
Net book amount at 31 March 2014
9,791
282,957
26,435
-
319,183
Cost
10,020
480,509
47,370
-
537,899
Accumulated depreciation
(370)
(163,144)
(12,205)
-
(175,719)
Net book amount at 31 March 2015
9,650
317,365
35,165
-
362,180
