676

NEW ZEALAND GAZETTE, No. 28

25 JANUARY 2005

CENTRALINES LIMITED - LINES BUSINESS

Statement of Significant Accounting Policies

For the year ended 31 March 2004

Revaluations

Any revaluation surplus arising on the revaluation of a class of property, plant or equipment is transferred directly to the asset revaluation reserve. A revaluation deficit in excess of the asset revaluation reserve balance for the class of property, plant or equipment is recognised in the Statement of Financial Performance in the period it arises. Revaluation surpluses which reverse previous revaluation deficits recognised in the Statement of Financial Performance are recognised as revenue in the Statement of Financial Performance. As part of the revaluation process there were assets identified that were not previously on the asset register. These assets have been recognised for the first time this year and have been brought to account through the Statement of Financial Performance.

Depreciation

Depreciation of property, plant and equipment, other than freehold land, is calculated on a straight line basis so as to expense the cost of the assets, or the revalued amounts, to their residual values over their useful lives as follows:

Estimated useful lives

Buildings 50 - 100 years
Office and computer equipment 5 -15 years
Distribution system 0 - 70 years
Motor vehicles 3 - 15 years
Plant, equipment and tools 5 - 10 years

Employee Entitlements

A liability for annual leave, long service leave and retirement gratuities is accrued and recognised in the Statement of Financial Position. Liabilities for annual and long service leave are calculated on an entitlement basis at current rates. Retirement gratuity liability is calculated using current rates and appropriate probabilities.

Investments

All investments are stated at cost price and then adjusted to account for amortisation of premiums or discounts to face value.

Leases

Leases under which the Company assumes substantially all the risks and rewards of ownership are classified as finance leases. Assets acquired by way of finance lease are stated at an amount equal to the present value of the future minimum lease payments, and are depreciated as described above.

Financial Instruments

Financial instruments carried on the statement of financial position include cash and bank balances, investments, receivables and trade creditors. These financial assets and financial liabilities are, generally, carried at their estimated fair values and, where appropriate, particular recognition methods adopted are disclosed in the individual policy statements associated with each item.

Statement of Cash Flows

The following are the definitions of the terms used in the statement of cash flows:

(1) Operating activities include all transactions and other events that are not investing or financing activities.

(2) Investing activities are those activities relating to the acquisition, holding and disposal of property, plant and equipment and of investments. Investments include securities not falling within the definition of cash.

(3) Financing activities are those activities that result in changes in the size and composition of the capital structure. This includes both equity and debt not falling within the definition of cash.

(4) Cash is considered to be cash on hand and current accounts in banks, net of bank overdrafts.

Changes in Accounting Policies

There has been a change in accounting policy for the revaluation of distribution assets from Optimised Depreciated Value to Optimised Depreciated Replacement Cost in accordance with FRS-3. The net effect of the revaluation is an increase of $5.678m in distribution assets. There have been no other changes from the accounting policies adopted in the last audited financial statements. All other policies have been applied consistently with the previous period.