7 3
Tainui Group Holdings
Annual Report
2012
7 3
Tainui Group Holdings
Annual Report
2012
Valuations of farm and other properties
TelferYoung (Waikato) Limited and Curnow Tizard were contracted as independent valuers to value farm and other
properties. Fair value has been assessed as the amount for which an asset could be exchanged or a liability settled
between knowledgeable willing parties in an arms length transaction.
The signifcant methods and assumptions applied in estimating the fair value were:
‑ the direct comparison approach (based on analysis of sales of vacant property. This analysis includes determination
of land value, other improvements and residual value for principal improvements);
‑ the traditional capitalisation approach (focusing on the net maintainable income and the level of investment return);
‑ the discounted cash fow approach (based on establishing a cash fow budget for the property having particular
regard to the length of lease term and nature of the leasehold interest and the following factors; discount rate, land
infation and rental rates); and
‑ comparing market evidence of transaction prices for similar properties.
The total value of farm properties valued by TelferYoung (Waikato) Limited at 31 March 2012 is $20.1m (2011: $17.2m).
The carrying amount that would have been reported for farm properties under the historical cost method is $9.2m (2011:
$9.0m).
The total value of other properties by Curnow Tizard Limited at 31 March 2012 is $1.7m (2011: $1.6m). The carrying
amount that would have been reported for other properties under the historical cost method is $0.9m (2011: $1.2m).
All valuers are independent registered valuers not related to the Company or Group. All valuers hold recognised and
relevant professional qualifcations and have recent experience in the locations and categories of farm and other
properties they have valued.
18 Investment properties
Consolidated
Parent
2012
2011
2012
2011
Notes
$’000
$’000
$’000
$’000
Balance at beginning of year
457,728 385,061
71,778
67,510
Development
48,420
67,846
-
-
Net gain from fair value adjustment
8
23,624
8,571
9,255
4,268
Transfer to property, plant and equipment
17
(1,360)
-
-
-
Disposals
-
(3,750)
-
-
Balance at end of year
528,412 457,728
81,033
71,778
Valuation basis of investment properties
Investment property valuations were completed as follows:
D.J. Saunders from TelferYoung (Waikato) Limited valued properties at fair value of $131m and parent $24m on 31 March
2012 (31 March 2011: $122m and Parent: $22m) using a mixture of market evidence of transaction prices for similar
properties, direct comparison, capitalisation and discounted cash fow approaches.
T. Arnott from CB Richard Ellis Limited valued properties at fair value of $282m and parent $57m on 31 March 2012 (31
March 2011: $114m and Parent: $50m) using a mixture of market evidence of transaction prices for similar properties,
capitalisation and discounted cash fow approaches.
M. J. Snelgrove from Curnow Tizard Limited valued properties at fair value of $107m on 31 March 2012 (31 March 2011:
$104m) using a mixture of market evidence of transaction prices for similar properties, direct comparison, capitalisation
and discounted cash fow approaches.
R. H. Martin from Property Valuations Limited valued properties at fair value of $1m on 31 March 2012 (31 March 2011: $2m)
using a mixture of market evidence of transaction prices for similar properties and the direct comparison approaches.