2994 NEW ZEALAND GAZETTE, No. 103 27 AUGUST 2012

Notes to the financial statements

For the year ended 31 March 2012

3 Significant accounting policies (continued)

(j) New standards, amendments and interpretations not yet adopted

A number of new interpretations and amendments to current standards are not yet effective for the year ended 31 March 2012, and have not been applied in preparing these consolidated financial statements. The Group expects the following amendments to standards to have an impact on its financial statements in future periods:

NZ IFRS 9 "Financial Instruments" was approved for periods beginning on or after 1 January 2013. This standard replaces the multiple classification and measurement models in IAS 39 financial instruments: Recognition and measurement with a single model that has only two categories: amortised cost and fair value. The Group intends to adopt this standard in the 2013 financial year. The new standard is not expected to significantly impact the Group but will result in some amended presentation within the Financial Statements.

NZ IFRS 13 "Fair value measurement" was approved for periods on or after 1 January 2013. This Standard establishes a single framework for measuring fair value where that is required by other Standards. The Group intends to adopt this standard in the 2013 financial year. The new standard is not expected to significantly impact the Group but will result in some amended presentation within the Financial Statements.

(k) Change in accounting policies

There have not been any changes in accounting policies during the year.

4 Determination of fair values

A number of the Group's accounting policies and disclosures require the determination of fair value, for both financial and non-financial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the following methods. Where applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.

(a) Investment property

External, independent valuation companies, Colliers International Valuation (Chch) Limited and BBK Property (Christchurch properties) and Duke and Cooke (Nelson properties) having appropriate recognised professional qualifications and recent experience in the location and category of property being valued, values the Group's investment property portfolio annually. The fair values are based on market values, being the estimated amount for which a property could be exchanged on the date of the valuation between a willing buyer and a willing seller in an arm's length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion.

In the absence of current prices in an active market, the valuations are prepared by considering the aggregate of the estimated cash flows expected to be received from renting out the property. A yield that reflects the specific risks inherent in the net cash flows then is applied to the net annual cash flows to arrive at the property valuation.

Valuations reflect, where appropriate: the type of tenants actually in occupation or responsible for meeting lease commitments or likely to be in occupation after letting vacant accommodation, and the market's general perception of their creditworthiness; the allocation of maintenance and insurance responsibilities between the Group and the lessee; and the remaining economic life of the property. When rent reviews or lease renewals are pending with anticipated reversionary increases, it is assumed that all notices and where appropriate counter-notices have been served validly and within the appropriate time.

(b) Investments in equity and debt securities

The fair value of financial assets at fair value through profit or loss, is determined by reference to their quoted bid price at the reporting date wherever this information is available. Certain investments in emerging markets are only traded on certain days. In this instance the trades that occurred on the date nearest to the balance date have been used.

For investments where there is no active market, investments have been valued using Australian Private Equity & Venture Capital Association Limited ("AVCAL") reporting guidelines. This broadly requires the investment to be valued at cost for the first 18 months and subsequently based on net asset value.