New Zealand Gazette – 2004 – No. 171

Page 4270

✨ Financial Statements



4270

NEW ZEALAND GAZETTE, No. 171

22 DECEMBER 2004

TRANSPOWER NEW ZEALAND LIMITED LINES BUSINESS

NOTES TO THE FINANCIAL STATEMENTS continued

FOR THE YEAR ENDED 30 JUNE 2004

  1. FIXED ASSETS
Cost Accumulated Depreciation Net Book Value Valuation
2004 2004 2004 2003
$000 $000 $000 $000
Transmission lines 809,845 31,298 778,547 806,001
Freehold land 52,997 0 52,997 51,807
Freehold buildings 44,816 2,689 42,127 38,472
Substations 821,467 35,147 786,320 773,267
HVDC link 60,299 10,155 50,144 60,309
HVDC leased assets 222,261 13,698 208,563 222,178
Communications 54,712 7,702 47,010 47,356
Administration assets 30,409 7,258 23,241 24,081
Capital work in progress 97,870 0 97,870 99,155
Total fixed assets 2,194,766 107,947 2,086,819 2,122,636

Administration assets include plant, equipment, furniture and motor vehicles.

The majority of the AC transmission assets in the South Island are subject to a cross border finance lease.

The total net book value of all South Island AC assets at 30 June 2004 is $612 million.

Capital work in progress comprises the following asset classes:

2004 2003
Transmission lines 21,130 5,700
Freehold land 4,117 247
Freehold buildings 1,374 198
Substations 53,778 68,898
HVDC link 565 191
HVDC leased assets 1,319 237
Communications 5,568 5,183
Administration assets 10,019 18,501
97,870 99,155

During the year the following borrowing costs were capitalised:

2004 2003
Transmission lines 624 348
Freehold land 20 95
Freehold buildings 10 76
Substations 1,655 1,734
HVDC link 14 6
HVDC leased assets 32 7
Communications 100 321
Administration assets 491 592
2,946 3,179

Transpower has elected to follow FRS-1, 7.2(b) and change its measurement base for fixed assets from modified historical cost to historic cost. The opening cost of the assets represents the valuation of those assets at 30 June 2003.

2003 Asset valuation

The fixed assets of the Lines Business were valued at 30 June 2003 in accordance with the ODV methodology.

The valuation was completed by Transpower, and independently reviewed by PricewaterhouseCoopers.

In conducting this valuation the following significant assumptions or limiting conditions were taken into account:

Valuations have been established in accordance with the ODV methodology as described in the Optimised Deprival Valuation of Electricity Lines Business System Fixed Assets (4th edition) (the Handbook), published by the Ministry of Economic Development.

Replacement costs for AC transmission assets have been obtained from the Handbook, or derived from costings prepared in accordance with the Handbook procedures.

Replacement Costs for HVDC assets are based on:

International costs for HVDC equipment obtained from Teshmont Consultants Inc.

Historical exchange rates over the period April 2000 to June 2003, with the average USD exchange rate over that period being 0.4760.

Equipment costs capitalised in accordance with the Handbook.

Interest during construction used in establishing replacement costs has been established as 4% of replacement cost for AC transmission lines, 4.8% for AC substation assets and 5.8% for HVDC assets.

Assets have been optimised in accordance with the Handbook, utilising demand growth assumptions. The ratio of optimised replacement cost to replacement cost is approximately 83%.

2004 2003
$000 $000
Electricity regulations additional disclosures:
Motor vehicles 752 848
Office equipment 822 55
Customer billing and information assets - -

Transpower lines business system fixed assets have a value in these financial statements of $1,919 million (2003: $1,966 million).



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Online Sources for this page:

VUW Te Waharoa — PDF NZ Gazette 2004, No 171


Gazette.govt.nz — PDF NZ Gazette 2004, No 171




✨ LLM interpretation of page content

🏭 Financial Performance of Transpower New Zealand Limited Lines Business (continued from previous page)

🏭 Trade, Customs & Industry
22 December 2004
Financial Statements, Fixed Assets, Depreciation, Valuation, Asset Classes, Borrowing Costs, Asset Valuation, Replacement Costs, ODV Methodology