Notes to the Forecast Financial Statements 19

Land and buildings Temporary Not depreciated Buildings – other 4 years Subterranean land Not depreciated Furniture and fittings 5 years Office equipment 5 years Computer hardware 5 years The assets’ residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at each financial year end.

Derecognition

An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits or service potential are expected from its use or disposal.

Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These are included in surplus or deficit.

Share Capital and Equity

All B class shares issued are fully paid and have a face value of $1 each. The Shareholder’s investment in CRL Ltd is made up of 2,914,282 shares as of 1 July 2022 and is expected to be 3,942,280 shares as of 30 June 2023.

Critical Accounting Estimates and Assumptions

In preparing these prospective financial statements, CRL Ltd has made estimates and assumptions concerning the future. These estimates and assumptions may differ from the subsequent actual results.

Estimates and assumptions are continually evaluated and are based on expectations of future events that are believed to be reasonable under the circumstances.

The estimates and assumptions that have significant risk of causing material adjustment to the carrying amount of the assets and liabilities within the forecast financial statements are as follows:

• Third Party Works: CRL Ltd fund work undertaken by KiwiRail Holdings Ltd on the KiwiRail Holdings

Ltd network. As part of the overall project CRL

Ltd undertakes or funds construction work across the wider Auckland rail network. The nature of the work completed, and the ownership of the assets constructed, means they do not form part of the CRL

Ltd assets, in accordance with NZ GAAP. • Asset Transfers: as CRL Ltd completes certain contracts it may transfer separable assets relating to enabling works (including assets related to a number of utility services) for the CRL to the Sponsors or their subsidiaries as those assets are commissioned for use. However, the ownership of the majority of

CRL Ltd’s key assets will stay with CRL Ltd until the completion of the Project. Therefore, they will remain as CRL Ltd work in progress until that time. Per PBE

IPSAS 37 Joint Arrangements, CRL Ltd continues to be classified as a joint venture (as opposed to joint operation) by the Sponsors as the ultimate ownership of the CRL assets is yet to be determined.

Any separable assets transferred prior to project completion will transfer without compensation and hence will be treated as a vested asset in the period in which the asset transfer occurs. CRL Ltd will recognise a vested asset expense on transfer of the asset. • Covid-19: the cost and time to completion impact of Covid-19 is yet to be fully determined across CRL

Ltd’s construction contracts.