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notes to the financial Statements
for the year ended 31 March 2012
The carrying amounts of property, plant and equipment had they been recognised under the cost model are as
follows:
Network
Land
Buildings Distribution Meters &
Plant &
(At Cost or
(At Cost or
System
Relays Vehicles Generation
Total
Valuation) Valuation) (At Valuation) (At Valuation)
(At Cost)
(At Cost)
$’000
$’000
$’000
$’000
$’000
$’000
$’000
At 31 March 2011
1,229
2,178
85,935
6,200
3,570
18,929 118,041
At 31 March 2012
1,478
2,097
92,286
5,539
3,173
19,549 124,123
Land and buildings
The land and buildings of the Group, comprising the depots at Waitete Road Te Kuiti, Te Peka Street
Taumarunui, and Old Station Road Ohakune, the residential dwellings at Te Peka Street Taumarunui and head
office at King Street East Te Kuiti were revalued to $3.087m at 31 March 2012. These valuations were prepared
by Doyle Valuations Ltd (A.N.Z.I.V, S.N.Z.P.I.), an independent valuer with local experience. These valuations
were carried out in accordance with API and PINZ Professional Practice and International Valuation Standards.
Summation and income approaches were used for the valuation.
Network distribution system
Network distribution system assets, excluding meters and relays, were revalued to $189.845 million at 31
March 2012. As the fair value of the assets was not able to be reliably determined using market based evidence,
the valuation was prepared using discounted cash flow methodology. The valuation was independently
prepared by Deloitte and the key assumptions used are shown in the table below. In all cases an element of
judgment is required. The valuation is based on revenue and cost assumptions applied against a combination of
WACC and CPI inflation rates that are generally in mid-point of the range.
Assumptions
Valuation
Assumptions adopted
Low High Valuation impact
Domestic load growth
1.2%
0.0%
2.4% +/- $20,000,000
WACC (with CPI inflation @ 1.5%)
7.5%
6.55% 7.5% + $30,000,000
- $6,000,000
CPI inflation (with WACC @ 7.5%)
1.5%
1.5%
2.5% + $11,000,000
- $6,000,000
Meters and relays
Meter and relay assets were revalued in August 2003 based on a valuation by PricewaterhouseCoopers. These
assets have not been revalued since due to its carrying amount not being materially different from its fair
value. Plant, motor vehicles and generation assets have been valued at cost less accumulated depreciation.
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