Air New Zealand 2013 Annual Report Download - page 26

Download and view the complete annual report

Please find page 26 of the 2013 Air New Zealand annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 80

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80

Air New Zealand Annual Financial Results 
24
. INVESTMENT IN QUOTED EQUITY INSTRUMENTS
GROUP

M
GROUP

M
COMPANY

M
COMPANY

M
Investment in Virgin Australia Holdings Limited
Balance at the beginning of the year 203 120 - -
Acquisitions 62 43 - -
Fair value changes recognised in other comprehensive income (6) 40 - -
Transaction costs 2 - - -
Balance at the end of the year
261 203 - -
The investment is denominated in Australian Dollars. The investment is part of the Group’s Australasian aviation market strategy.
At 30 June 2013 the Group held a 19.99% direct equity interest in Virgin Australia (30 June 2012: 18.49%).
During the year ended 30 June 2013, the Group exercised an equity derivative to acquire a further 1.5% interest in Virgin Australia Holdings
Limited (Virgin Australia) taking the direct equity holding to 19.99%. The cost of the acquisition excluding transaction costs (which was
recognised within “Other assets” as at 30 June 2012) was A$10 million or 30 cents per share. In November 2012 and April 2013 upon the issue
of additional share capital by Virgin Australia, the Group contemporaneously paid a further A$35 million (excluding transaction costs) or
48 cents per share to maintain a continuous ownership interest at 19.99%.
During the year ended 30 June 2013, Air New Zealand entered into an equity derivative representing an additional interest of 3% of shares
in Virgin Australia. The derivative is a share purchase option which confers no ownership rights or carries any voting rights and has been
recognised within current “Other assets” in the Statement of Financial Position. The conversion of the derivative to shares is subject to
Foreign Investment Review Board (FIRB) and Australian Competition and Consumer Commission (ACCC) approval. Upon approval being
received, Air New Zealand’s direct equity interest in Virgin Australia will increase to 22.99% and Air New Zealand will continue to treat this
investment as an investment in quoted equity instruments as opposed to an equity accounted associate. The directors consider that the
Group does not have the ability to exercise significant influence over Virgin Australia due to the composition of other shareholdings and
lack of representation on the Board.
. INVESTMENTS IN OTHER ENTITIES
GROUP

M
GROUP

M
COMPANY

M
COMPANY

M
Investments in subsidiaries - - 367 407
Investments in associates 45 59 - -
Investments in other entities 1 1 1 1
46 60 368 408
During the year ended 30 June 2012, the Company reversed $129 million of impairment losses in subsidiaries. Refer to Note 28 for further details.
SUBSIDIARIES
Significant subsidiaries comprise:
NAME PRINCIPAL ACTIVITY COUNTRY OF INCORPORATION
Air Nelson Limited Aviation New Zealand
Air New Zealand Aircra Holdings Limited Aircra leasing and financing New Zealand
Air New Zealand Associated Companies Limited Investment New Zealand
Air New Zealand Tasman Pacific Limited Aviation crew resourcing New Zealand
Altitude Aerospace Interiors Limited Aviation design engineering New Zealand
Eagle Airways Limited Aviation New Zealand
Mount Cook Airline Limited Aviation New Zealand
Safe Air Limited Engineering services New Zealand
TAE Gas Turbines Pty Limited Engineering services Australia
TAE Aviation Pty Limited Aviation engineering Australia
Valetport Limited Car parking services New Zealand
All subsidiary entities above have a balance date of 30 June and are 100 percent owned. Subsidiaries are accounted for using the cost method.
Notes to the Financial Statements (Continued)
As at 30 June 2013