New accounting standards and interpretations

31 March 2012

Introduction
This document is a supplement to Castle (International) Limited (December 2010 edition) and contains disclosure information on changes in accounting policy on adoption of new and amended New Zealand Equivalents to International Accounting Standards (NZ IFRS) and NZ IFRS issued but not yet effective. Castle (International) Limited does not cover NZ IFRS issued after 31 October 2010. This publication lists all applicable NZ IFRS issued as of 31 March 2012 and is applicable for 31 March 2012 year ends.
This document has two parts: Part A changes in accounting policy This table lists all the applicable accounting standards which would have been adopted for the first time for entities with a 31 March 2012 year end. Paragraph 28 of NZ IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors (NZ IAS 8) states that when an initial application of a standard has an effect on the current period, or any prior period, an entity shall disclose: a) The title of the Standard b) When applicable, that the change in accounting policy is made in accordance with the transitional provisions c) The nature of the change in accounting policy d) When applicable, a description of the transitional provisions e) When applicable, the transitional provisions that might have an effect on future periods The table is designed to be used for the disclosure in note 2(c)(i) of Castle (International) Limited. f) For the current period and each prior period presented, to the extent practicable, the amount of the adjustment: i. For each financial statement line item affected ii. If NZ IAS 33 Earnings per Share applies to the entity, for basic and diluted earnings per share g) The amount of the adjustment relating to periods before those present, to the extent practicable h) If retrospective application is impracticable for a particular prior period, or for the periods before those presented, the circumstances that led to the existence of that condition and a description of how and from when the change in accounting policy has been applied.

Ernst & Young New accounting standards and interpretations 31 March 2012

Part B accounting standards issued but not yet effective This table lists all applicable NZ IFRS issued but not yet effective for 31 March 2012 year ends and assumes that the entity has elected not to early adopt any of these Standards/Interpretations. Paragraph 30 of NZ IAS 8 requires disclosure of the possible impact of new and revised Accounting Standards that have been issued but are not yet effective. This includes pronouncements issued by the International Accounting Standards Board (IASB) and International Financial Reporting Standards Interpretations Committee (IFRS Interpretations Committee, previously known as IFRIC) for entities that are required to make a statement of compliance with IFRS. The table is designed to be for the disclosure in Note 2(c)(ii) of Castle (International) Limited. The table is complete as at 31 March 2012 and any further Standards/Interpretations issued after this date will also need to be disclosed up until the date of authorisation of the financial report. An entity does not need to refer to Standards/ Interpretations that are not applicable to them provided the entity ensures that the Standard/Interpretation is, in fact, not relevant. If the effect of a particular Standard/ Interpretation has not yet been determined, those details should be disclosed.

The impact on Group financial statements should be added based on the entitys specific circumstances. This table will be updated and released for reporting periods ending 31 March, 30 June, 30 September and 31 December. Important note for public benefit entities In 2011, the Accounting Standards Review Board (ASRB) announced its decision to adopt a multi-standards approach to financial reporting in New Zealand. As a consequence of this decision, the ASRB and Financial Reporting Standards Board (FRSB) agreed that all new and amended NZ IFRSs with a mandatory effective date of 1 January 2012 or later would apply to profit-oriented entities only. Therefore, for public benefit entities, the following new and amended standards included in the table below do not apply and hence should not be included in the NZ IAS 8 disclosure of standards issued but not yet effective: NZ IFRS 10 Consolidated Financial Statements NZ IFRS 11 Joint Arrangements NZ IFRS 12 Disclosure of Interests in Other Entities NZ IFRS 13 Fair Value Measurement NZ IAS 19 (as amended in 2011) Employee Benefits NZ IAS 27 (as amended in 2011) Separate Financial Statements

NZ IAS 28 (as amended in 2011) Interests in Associates and Joint Ventures Amendments to NZ IAS 1 Presentation of Financial Statements - Presentation of Other Comprehensive Income Amendments to NZ IAS 32 Financial Instruments: Presentation Offsetting Financial Assets and Financial Liabilities Amendments to NZ IFRS 7 Financial Instruments: Disclosures - Offsetting Financial Assets and Financial Liabilities NZ IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine The ASRB decision was made after NZ IFRS 9 Financial Instruments (2009) and NZ IFRS 9 Financial Instruments (2010) had already been issued. Accordingly, at present, NZ IFRS 9 (2009) and NZ IFRS 9 (2010) remain applicable to all entities, including public benefit entities, and therefore should be considered for the purpose of the NZ IAS 8 disclosure on standards issued but not yet effective.

Ernst & Young New accounting standards and interpretations 31 March 2012

Part A Changes in accounting policy

The following standards and interpretations would have been applied for the first time for entities with years ending 31 March 2012 (unless early adopted):
Reference NZ IFRS 1 Title Amendment to NZ IFRS 1 Limited Exemption from Comparative NZ IFRS 7 Disclosures for First-time Adopters. This amendment provides first time adopters of NZ IFRS with the ability to apply the transitional provisions in NZ IFRS 7 Improving Disclosures about Financial Instruments, as they relate to the March 2009 amendments. NZ IFRS 1 Amendment to NZ IFRS 1 First-time Adoption of New Zealand Equivalents to International Financial Reporting Standards. This amendment to NZ IFRS 1 allows a first-time adopter to apply the transitional provisions in NZ IFRIC 19. NZ IFRIC 19 NZ IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments. This interpretation clarifies that equity instruments issued to a creditor to extinguish a financial liability are consideration paid in accordance with paragraph 41 of IAS 39. As a result, the financial liability is derecognised and the equity instruments issued are treated as consideration paid to extinguish that financial liability. The interpretation states that equity instruments issued as payment of a debt should be measured at the fair value of the equity instruments issued, if this can be determined reliably. If the fair value of the equity instruments issued is not reliably determinable, the equity instruments should be measured by reference to the fair value of the financial liability extinguished as of the date of extinguishment. Improvements to NZ IFRSs Amendments to NZ IFRSs arising from the Annual Improvements Project (2010). [NZ IFRS 1, 3, 7, NZ IAS 1, 27, 34, NZ IFRIC 13] 1 January 2011 1 April 2011 1 July 2010 1 April 2011 1 July 2010 1 April 2011 Application date of standard* 1 July 2010 Application date for Group* 1 April 2011

NZ IFRIC 14

Amendments to NZ IFRIC 14 Prepayments of a Minimum Funding Requirement. These amendments arise from the issuance of Prepayments of a Minimum Funding Requirement (Amendments to NZ IFRIC 14). The requirements of NZ IFRIC 14 meant that some entities that were subject to minimum funding requirements could not treat any surplus in a defined benefit pension plan as an economic benefit. The amendment requires entities to treat the benefit of such an early payment as a pension asset. Subsequently, the remaining surplus in the plan, if any, is subject to the same analysis as if no prepayment had been made.

1 January 2011

1 April 2011

* Designates the beginning of the applicable annual reporting period unless otherwise stated.

Ernst & Young New accounting standards and interpretations 31 March 2012

Reference NZ IAS 24

Title NZ IAS 24 Related Party Disclosures (Revised 2009). The revised NZ IAS 24 simplifies the definition of a related party, clarifying its intended meaning and eliminating inconsistencies from the definition, including: (a) The definition now identifies a subsidiary and an associate with the same investor as related parties of each other (b) Entities significantly influenced by one person and entities significantly influenced by a close member of the family of that person are no longer related parties of each other (c) The definition now identifies that, whenever a person or entity has both joint control over a second entity and joint control or significant influence over a third party, the second and third entities are related to each other The amendment explicitly adds disclosure requirements for commitments (including executory contracts) with related parties. A partial exemption is provided from the disclosure requirements for government-related entities. Entities that are related by virtue of being controlled by the same government can provide reduced related party disclosures. A partial exemption is also provided for public benefit entities in respect of certain transactions with Ministers of the Crown.

Application date of standard* 1 January 2011

Application date for Group* 1 April 2011

NZ IFRS 8

NZ IAS 24 Related Party Disclosures (Revised 2009) amended NZ IFRS 8 in that it requires an entity to exercise judgement in assessing whether a government, including government agencies and similar Bodies, and entities known to be under the control of that government are considered a single customer for the purposes of certain operating segment disclosures. Amendments to NZ IAS 26 Accounting and Reporting by Retirement Benefit Plans. These amendments to NZ IAS 26 remove a number of New Zealand specific requirements, including most of the New Zealand specific scope paragraphs. The amendments to NZ IAS 26 also align the terminology in the Standard with that in IAS 26 Accounting and Reporting by Retirement Benefit Plans.

1 January 2011

1 April 2011

NZ IAS 26

1 April 2011

1 April 2011

Ernst & Young New accounting standards and interpretations 31 March 2012

Part B Accounting standards issued but not effective

The following standards and interpretations have been issued but are not yet effective for the period ending 31 March 2012.
Application date of standard* 1 July 2011 Impact on Group financial statements Application date for Group* 1 April 2012 Reference NZ IFRS 1 Title Amendments to NZ IFRS 1 First-time Adoption of New Zealand Equivalents to International Financial Reporting Standards. Summary These amendments make two changes to NZ IFRS 1: (a) The amendments provide relief for first-time adopters of NZ IFRSs from having to reconstruct transactions that occurred before their date of transition to NZ IFRSs (b) The amendments provide guidance for entities emerging from severe hyperinflation either to resume presenting NZ IFRS financial statements or to present NZ IFRS financial statements for the first time NZ IFRS 7 Amendments to NZ IFRS 7 Financial Instruments: Disclosures The amendments to NZ IFRS 7 enhance the transparency of disclosure requirements for the transfer of financial assets. For transferred financial assets that are derecognised in their entirety but where the entity has a continuing involvement in them, the amendments require disclosure of information that enables users of financial statements to evaluate the nature of, and risks associated with, the entitys continuing involvement in those derecognised assets. For transferred financial assets that are not derecognised in their entirety, the amendments require disclosure of information that enables users of financial statements to understand the relationship between those assets which are not derecognised and their associated liabilities. All the information will need to be presented in a single note in an entitys financial statements. 1 July 2011 1 April 2012

Ernst & Young New accounting standards and interpretations 31 March 2012

Reference FRS 44

Title New Zealand Additional Disclosures

Summary FRS 44 is a consequence of the joint Trans-Tasman Convergence project of the Australian Accounting Standards Board (AASB) and Financial Reporting Standards Board (FRSB). This standard relocates New Zealand specific disclosures from other standards to one place and revises disclosures in the following areas: (a) Compliance with NZ IFRS (b) The statutory basis or reporting framework for financial statements (c) Aaudit fees (d) Imputation credits (e) Reconciliation of net operating cash flow to profit (loss) (f) Prospective financial statements (g) Elements in the statement of service performance

Application date of standard* 1 July 2011

Impact on Group financial statements

Application date for Group* 1 April 2012

Harmonisation Amendments

Amendments to NZ IFRS to Harmonise with IFRS and Australian Accounting Standards [NZ IAS 1, 7, 8, 12, 16, 20, 28, 31, 34 & 40]

These amendments; (a) Remove the disclosures which have been relocated to FRS 44 (b) Harmonise audit fee disclosure requirements in NZ IFRS 1 with AASB 101 (c) Harmonise imputation/franking credits disclosure requirements in NZ IAS 12 with AASB 101 (d) Introduce of the option to use the indirect method of reporting cash flows in NZ IAS 7 (e) Introduce an accounting policy choice to use the cost model for investment property under NZ IAS 40 (f) Remove the requirement to use an independent valuer and the related disclosure requirements currently in NZ IAS 16 and NZ IAS 40 (g) Remove some New Zealand specific disclosures

1 July 2011

1 April 2012

Ernst & Young New accounting standards and interpretations 31 March 2012

Reference NZ IAS 12

Title Amendments to NZ IAS 12 Income Taxes Deferred Tax: Recovery of Underlying Assets

Summary These amendments update NZ IAS 12 to include: A rebuttable presumption that deferred tax on investment property measured using the fair value model in NZ IAS 40 should be determined on the basis that its carrying amount will be recovered through sale. This presumption is rebutted if the investment property is held within a business model whose objective is to consume substantially all of the economic benefits embodied in the investment property over time, rather than through sale. A requirement that deferred tax on non-depreciable assets, measured using the revaluation model in NZ IAS 16, should always be measured on a sale basis. The amendments incorporate NZ SIC-21 Income Taxes Recovery of Revalued Non-Depreciable Assets into NZ IAS 12 for non-depreciable assets measured using the revaluation model in NZ IAS 16 Property, Plant and Equipment.

Application date of standard* 1 January 2012

Impact on Group financial statements

Application date for Group* 1 April 2012

NZ IAS 1

Amendments to NZ IAS 1 Presentation of Financial Statements Presentation of Other Comprehensive Income

This Standard requires entities to group items presented in other comprehensive income on the basis of whether they are potentially reclassifiable to profit or loss in subsequent periods (reclassification adjustments). The amendments to NZ IAS 1 do not apply to public benefit entities.

1 July 2012

1 April 2013

NZ IAS 19

Employee Benefits

The main change introduced by this standard is to revise the accounting for defined benefit plans. The amendment removes the options for accounting for the liability, and requires that the liabilities arising from such plans are recognised in full with actuarial gains and losses being recognised in other comprehensive income. It also revised the method of calculating the return on plan assets. Consequential amendments were also made to other standards. NZ IAS 19 (as amended in 2011) does not apply to public benefit entities.

1 January 2013

1 April 2013

Ernst & Young New accounting standards and interpretations 31 March 2012

Reference NZ IAS 27

Title Separate Financial Statements

Summary NZ IAS 27 Separate Financial Statements (as amended in 2011) removes the accounting and disclosure requirements for consolidated financial statements, as a result of the issue of NZ IFRS 10 Consolidated Financial Statements and NZ IFRS 12 Disclosures of Interests in Other Entities, which establish new consolidation and disclosure standards. NZ IAS 27 (as amended in 2011) contains accounting and disclosure requirements for investments in subsidiaries, joint ventures and associates when an entity prepares separate financial statements. NZ IAS 27 (as amended in 2011) does not apply to public benefit entities.

Application date of standard* 1 January 2013

Impact on Group financial statements

Application date for Group* 1 April 2013

NZ IAS 28

Investments in Associates and Joint Ventures

NZ IAS 28 Investments in Associates and Joint Ventures (as amended in 2011) supersedes NZ IAS 28 Investments in Associates (2004), as a result of the issue of NZ IFRS 11 Joint Arrangements and NZ IFRS 12 Disclosure of Interests in Other Entities. NZ IAS 28 (as amended in 2011) prescribes the accounting for investments in associates and sets out the requirements for the application of the equity method when accounting for investments in associates and joint ventures. Disclosure requires relating to these investments are now contained in NZ IFRS 12. NZ IAS 28 (as amended in 2011) does not apply to public benefit entities.

1 January 2013

1 April 2013

NZ IAS 32

Amendments to NZ IAS 32 Financial Instruments: Presentation Offsetting Financial Assets and Financial Liabilities

These amendments clarify the meaning of currently has a legally enforceable right to set-off and also clarify the application of the NZ IAS 32 offsetting criteria to settlement systems (such as central clearing house systems) which apply gross settlement mechanisms that are not simultaneous. The amendments to NZ IAS 32 do not apply to public benefit entities.

1 January 2014

1 April 2014

Ernst & Young New accounting standards and interpretations 31 March 2012

Reference NZ IFRS 7

Title Amendments to NZ IFRS 7 Financial Instruments: Disclosures Offsetting Financial Assets and Financial Liabilities

Summary These amendments introduce disclosures, which provide users with information that is useful in evaluating the effect or potential effect of netting arrangements on an entitys financial position. The amendments to NZ IFRS 7 do not apply to public benefit entities. These amendments to NZ IFRS 7 remove the requirement for the restatement of comparative period financial statements upon initial application of the classification and measurement requirements of NZ IFRS 9. Instead, the amendments introduce additional disclosures on transition from the classification and measurement requirements of NZ IAS 39 Financial Instruments: Recognition and Measurement to those of NZ IFRS 9. For entities adopting NZ IFRS 9 from 2013 onwards, these disclosures are required even if they choose to restate the comparative figures for the effect of applying NZ IFRS 9.

Application date of standard* 1 January 2013

Impact on Group financial statements

Application date for Group* 1 April 2013

NZ IFRS 7

Amendments to NZ IFRS 7 Financial Instruments: Disclosures Transition Disclosures

1 January 2013

1 April 2013

NZ IFRS 10

Consolidated Financial Statements

NZ IFRS 10 establishes a new control model. It replaces parts of NZ IAS 27 Consolidated and Separate Financial Statements dealing with the accounting for consolidated financial statements and SIC-12 Consolidation Special Purpose Entities. The new control model broadens the situations when an entity is considered to control another entity and includes new guidance for applying the model to specific situations, including when acting as a manager may give control, the impact of potential voting rights and when holding less than a majority voting rights may give control. This could lead to more entities being consolidated. NZ IFRS 10 does not apply to public benefit entities.

1 January 2013

1 April 2013

Ernst & Young New accounting standards and interpretations 31 March 2012

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Reference NZ IFRS 11

Title Joint Arrangements

Summary NZ IFRS 11 replaces NZ IAS 31 Interests in Joint Ventures and SIC-13 Jointly controlled Entities Non-monetary Contributions by Ventures. NZ IFRS 11 uses the principle of control in NZ IFRS 10 to define joint control, and therefore the determination of whether joint control exists may change. In addition NZ IFRS 11 removes the option to account for jointly controlled entities (JCEs) using proportionate consolidation. Instead, accounting for a joint arrangement is dependent on the nature of the rights and obligations arising from the arrangement. Joint operations that give the venturers a right to the underlying assets and obligations themselves are accounted for by recognising the share of those assets and obligations. Joint ventures that give the venturers a right to the net assets are accounted for using the equity method. This may result in a change in the accounting for joint arrangements. NZ IFRS 11 does not apply to public benefit entities. NZ IFRS 12 includes all disclosures relating to an entitys interests in subsidiaries, joint arrangements, associates and structures entities. New disclosures have been introduced about the judgments made by management to determine whether control exists, and to require summarised information about joint arrangements, associates and structured entities and subsidiaries with non-controlling interests. NZ IFRS 12 does not apply to public benefit entities.

Application date of standard* 1 January 2013

Impact on Group financial statements

Application date for Group* 1 April 2013

NZ IFRS 12

Disclosure of Interests in Other Entities

1 January 2013

1 April 2013

Ernst & Young New accounting standards and interpretations 31 March 2012

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Reference NZ IFRS 13

Title Fair Value Measurement

Summary NZ IFRS 13 establishes a single source of guidance under NZ IFRS for determining the fair value of assets and liabilities. NZ IFRS 13 does not change when an entity is required to use fair value, but rather, provides guidance on how to determine fair value under NZ IFRS when fair value is required or permitted by NZ IFRS. Application of this guidance may result in different fair values being determined for the relevant assets. NZ IFRS 13 also expands the disclosure requirements for all assets or liabilities carried at fair value. This includes information about the assumptions made and the qualitative impact of those assumptions on the fair value determined. NZ IFRS 13 does not apply to public benefit entities.

Application date of standard* 1 January 2013

Impact on Group financial statements

Application date for Group* 1 April 2013

NZ IFRIC 20

Stripping Costs in the Production Phase of a Surface Mine

NZ IFRIC 20 applies to stripping costs incurred during the production phase of a surface mine. Production stripping costs are to be capitalised as part of an asset, if an entity can demonstrate that it is probable future economic benefits will be realised, the costs can be reliably measured and the entity can identify the component of an ore body for which access has been improved. This asset is to be called the stripping activity asset. The stripping activity asset shall be depreciated or amortised on a systematic basis, over the expected useful life of the identified component of the ore body that becomes more accessible as a result of the stripping activity. The units of production method shall be applied unless another method is more appropriate. NZ IFRIC 20 does not apply to public benefit entities.

1 January 2013

1 April 2013

Ernst & Young New accounting standards and interpretations 31 March 2012

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Reference NZ IFRS 9 (2010)

Title Financial Instruments

Summary NZ IFRS 9 (2010) supersedes NZ IFRS 9 (2009). The requirements for classifying and measuring financial liabilities were added to NZ IFRS 9 as issued in 2009. The existing NZ IAS 39 Financial Instruments: Recognition and Measurement requirements for the classification of financial liabilities and the ability to use the fair value option have been retained. However, where the fair value option is used for financial liabilities, the change in fair value is accounted for as follows: The change attributable to changes in credit risk are presented in other comprehensive income (OCI). The remaining change is presented in profit or loss. If this approach creates or enlarges an accounting mismatch in the profit or loss, the effect of the changes in credit risk are also presented in profit or loss.

Application date of standard* 1 January 2015

Impact on Group financial statements

Application date for Group* 1 April 2015

Ernst & Young New accounting standards and interpretations 31 March 2012

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Reference NZ IFRS 9 (2009)

Title Financial Instruments

Summary NZ IFRS 9 (2009) includes requirements for the classification and measurement of financial assets resulting from the first part of Phase 1 of the IASBs project to replace NZ IAS 39. These requirements improve and simplify the approach for classification and measurement of financial assets compared with the requirements of NZ IAS 39. The revised Standard introduces a number of changes to the accounting for financial assets, the most significant of which includes: Two categories for financial assets being amortised cost or fair value Removal of the requirement to separate embedded derivatives in financial assets Strict requirements to determine which financial assets can be classified as amortised cost or fair value. Financial assets can only be classified as amortised cost if (a) the contractual cash flows from the instrument represent principal and interest and (b) the entitys purpose for holding the instrument is to collect the contractual cash flows An option for investments in equity instruments which are not held for trading to recognise fair value changes through other comprehensive income with no impairment testing and no recycling through profit or loss on derecognition Reclassifications between amortised cost and fair value no longer permitted unless the entitys business model for holding the asset changes Changes to the accounting and additional disclosures for equity instruments classified as fair value through other comprehensive income

Application date of standard* 1 January 2015

Impact on Group financial statements

Application date for Group* 1 April 2015

Ernst & Young New accounting standards and interpretations 31 March 2012

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