Notice Type
General Section
Notice Title

ELECTRA LIMITED

INFORMATION FOR DISCLOSURE
Pursuant To Section 57T of the Commerce Act 1986
Index
Statement of Financial Performance
Statement of Movements in Equity
Statement of Financial Position
Statement of Cash Flows
Notes to the Financial Statements
Annual Valuation Reconciliation Report
Financial and Performance Measures
Reliability Performance Measure Targets
Derivation of Financial Measure
Auditors Report
Certificate of Performance Measures by Auditors
ODV Valuation
Directors Certificate
Certificate of Valuation Report of Line Owners
Directory
All values in this report are in thousands (000's) of New Zealand dollars (rounded) and are for years ended 31 March unless otherwise stated.
"This year" means the year ended 31 March 2006
"Last year" means the year ended 31 March 2005
"Next year" means the year ending 31 March 2007
Electra Limited
Line Business - Statement of financial performance
for the year ended 31 March 2006
Note 2006 $000 2005 $000
Operating revenue 2 23,833 22,813
Discount (8,325) (7,000)
Operating expense 2 (14,461) (14,945)
Earnings Before Interest and Tax 1,047 868
Interest Expense (830) (878)
Net profit/(loss) before taxation 217 (10)
Taxation 3 - -
Net profit/(loss) after taxation $217 ($10)
Electra Limited
Line Business - Statement of movements in equity
for the year ended 31 March 2006
Note 2006 $000 2005 $000
Equity at beginning of the year 90,747 91,611
Net profit/(loss) for the year 217 (10)
Revaluation of assets 6 1 264
Total recognised revenues and expenses 218 254
Other movements
Dividends 4 (160) (175)
Funds transferred from non-line business activities 91 (943)
Total other movements (69) (1,118)
Equity at end of the year $90,896 $90,747
The accompanying notes form part of these financial statements.
Electra Limited
Line Business - Statement of financial position
as at 31 March 2006
Note 2006 $000 2005 $000
Equity
Share capital 5 18,000 18,000
Reserves 6 64,078 64,077
Retained earnings 8,818 8,670
Total equity 90,896 90,747
Non-current liabilities
Borrowings 7 12,000 12,000
Current liabilities
Other provisions - 163
Accounts payable and accruals 8 5,245 4,897
Total current liabilities 5,245 5,060
Total equity and liabilities $108,141 $107,807
Non-current assets
Property, plant and equipment 9 104,155 105,165
Current assets
Cash 2,877 1,060
Receivables and prepayments 10 1,109 1,582
Total current assets 3,986 2,642
Total assets $108,141 $107,807
The accompanying notes form part of these financial statements.
For and on behalf of the Board
W R Thessman Piers Hamid
Director Director
The Board of Electra Limited authorise these financial statements for issue on 27 October 2006
Electra Limited
Line Business - Statement of cash flows
for the year ended 31 March 2006
Note 2006 $000 2005 $000
Cash flows from operating activities
Cash was received from:
Receipts from customers 14,702 16,043
Interest received 113 16
14,815 16,059
Cash was disbursed to:
Payments to suppliers and employees (9,139) (10,874)
Interest paid (830) (878)
(9,969) (11,752)
Net cash flows from operating activities 12 4,846 4,307
Cash flows to investing activities
Cash was provided from:
Proceeds from sale of property, plant and equipment 28 10
Proceeds from non-line business 91 -
119 10
Cash was applied to:
Disbursements to non-line business - (935)
Purchase of property, plant and equipment (2,988) (3,010)
(2,988) (3,945)
Net cash from investing activities (2,869) (3,935)
Cash flows from financing activities
Cash was provided from:
Loans raised - -
- -
Cash was applied to:
Payment of dividends (160) (175)
(160) (175)
Net cash flows used in financing activities (160) (175)
Net increase in cash held 1,817 197
Add opening cash brought forward 1,060 863
Ending cash carried forward $2,877 $1,060
The accompanying notes form part of these financial statements.
Notes to the financial statements
1. Statement of accounting policies
Reporting entity
Electra Limited is registered under the Companies Act 1993.
The financial statements are those of the Line Business Activities only of Electra Limited and have been prepared in accordance with the Electricity Information Disclosure Handbook issued by the Commerce Commission under Part 4A of the Commerce Act 1986.
Measurement base
The accounting principles recognised as appropriate for the measurement and reporting of financial performance and financial position on a historical cost basis are followed, with the exception that certain property, plant and equipment have been revalued. Revenue and expenditure are reported on an accrual basis with the exception of those items referred to in specific accounting policies.
Specific accounting policies
The following specific accounting policies which materially affect the measurement of financial performance and the financial position have been applied:
a) Property, plant and equipment
The Company has six classes of property, plant and equipment:
1. Land and buildings
2. Distribution Assets
3. Leasehold Improvements
4. Plant and Equipment
5. Vehicles
6. Work in Progress
All owned items of property, plant and equipment are initially recorded at cost. The cost of an item of property, plant and equipment comprises its purchase price plus any other costs directly attributable to bringing the item to working condition for its intended use.
The cost of self-constructed property, plant and equipment includes the cost of all materials used in construction, direct labour, costs of obtaining resource management consents, financing costs that are attributable to the project and an appropriate proportion of the variable and fixed overheads. Costs cease to be capitalised as soon as the property, plant and equipment is ready for productive use and do not include any inefficiency costs.
Subsequent expenditure relating to an item of property, plant and equipment is added to its gross carrying amount when such expenditure either increases the future economic benefits beyond its existing service potential, or is necessarily incurred to enable future economic benefits to be obtained, and that expenditure would have been included in the initial cost of the item had the expenditure been incurred at that time.
Distribution system assets are revalued every three years to fair value, or more regularly if necessary to ensure that no individual item of property, plant and equipment within a class is included at a valuation that is materially different from its fair value. Fair value is determined using optimised depreciation replacement cost.
Any revaluation increment or decrement is recognised in the statement of movements in equity. If the revaluation results in a revaluation deficit, the revaluation deficit is recognised in the statement of financial performance. To the extent that a revaluation reverses a previous revaluation deficit that was recognised in the statement of financial performance, such revaluation increment is recognised in the statement of financial performance.
Land and buildings other than those included in distribution assets, are stated at market valuation. (refer note 9).
All other property, plant and equipment is recorded at cost less accumulated depreciation.
Where the estimated recoverable amount of an asset is less than the carrying amount, the asset is written down. The impairment loss is recognised in the statement of financial performance.
b) Depreciation
Depreciation is provided on either a diminishing value (DV), or straight line (SL) basis on all property, plant and equipment, at rates calculated to allocate the assets' cost or valuation less estimated residual value, over their estimated useful lives.
Main depreciation rates are:
Substation assets 2.2 - 7.8% straight line
Other Distribution assets 1.4 - 6.7% straight line
Buildings 1% - 2.5% straight line and 4% diminishing value
Leasehold Improvements 11%-31% diminishing value
Plant and equipment 10% - 50% diminishing value
Computer equipment 20% - 50% straight line
Motor vehicles 20% - 25% diminishing value and 20% straight line
c) Receivables
Receivables are stated at their estimated realisable value after providing against debts where collection is doubtful.
d) Bad Debts and Doubtful Debts Provisioning
Bad Debts are identified on a counterparty by counterparty basis, and where there is reasonable doubt as to their collectability, they are written down, by way of a specific write off, to their expected net collectable amounts with the amount written off recognised as an expense in the Statement of Financial Performance.
e) Revenue recognition
Revenue comprises the amounts received and receivable for goods and services supplied to customers in the ordinary course of business.
f) Income tax
The tax expense against the surplus for the year is the estimated liability in respect of that surplus after allowance for permanent differences plus any adjustments arising from prior years.
Electra Limited follows the liability method of accounting for deferred tax, applied on a partial basis.
The partial basis considers the cumulative income tax effect of all timing differences. The income tax effect of timing differences is only recognised as deferred tax for those timing differences that can be expected to reverse in the foreseeable future.
Future tax benefits attributable to losses carried forward are recognised in the financial statements only where there is virtual certainty that the benefit of the losses will be utilised.
g) Leases
Operating lease payments, where the lessors retain substantially all the risks and benefits of ownership of the leased items, are included in the determination of the operating profit in equal instalments over the lease term.
h) Statement of cash flows
The following are the definitions of the terms used in the Statement of Cash Flows:
1) Cash is considered to be cash on hand, short term deposits and current accounts at the banks, net of bank overdrafts.
2) Investing activities are those activities relating to the acquisition, holding and disposal of fixed assets and of investments. Investments can include securities not falling within the definition of cash.
3) Financing activities are those activities, which result in changes in the size and composition of the capital structure of the Company. This includes both equity and debt not falling within the definition of cash. Dividends paid are included in financing activities.
4) Operating activities include all transactions and other events that are not investing or financing activities.
i) Changes in accounting policies
There were no changes in accounting policies during the year.
2. Earnings before interest and taxation
Revenue
2006 $000 2005 $000
Invoiced to consumers by electricity retailers 22,253 21,889
Line/access charges 22,253 21,889
AC loss-rental 1,136 437
Interest 113 16
Other 331 471
Total Revenue $23,833 $22,813
After Charging
2006 $000 2005 $000
Audit fees 40 27
Other accountancy services 50 120
Bad Debts 8 37
Change in provision for doubtful debts 30 -
Depreciation* 3,881 3,906
Directors fees 167 146
Interest fixed and other 830 878
Loss on sale of property, plant & equipment 90 387
Rental and lease costs 61 48
*Depreciation by Category
Land and Buildings 146 144
Distribution Assets 3,523 3,298
Leasehold Improvements 8 10
Plant and equipment 190 427
Vehicles 14 27
Customer sales discount
A total of $7.2 million plus GST was credited to consumers during the year to 31 March 2006 ($7.0 million plus GST during the year to 31 March 2005). An additional provision of $1.1 million was made during the year towards the 2006/07 sales discount.
3. Taxation
2006 $000 2005 $000
Profit/(loss) before taxation 217 (10)
Prime facie taxation at 33% (72) (3)
Plus/(less)Taxation effect of permanent differences 578 (255)
Timing differences not recognised (779) 94
Benefit of tax losses 273 164
Taxation expense (benefit) $- $-
The company has a potential deferred tax liability net of future tax benefits of $13,410,406 (2005 - $11,502,200), which is not recognised in the financial statements. This balance is made up of a deferred tax liability of $13,496,956 (2005 - $12,720,229) which arises mainly from the revaluation of assets for accounting purposes, and a future tax benefit of $86,550 (2005 - $1,218,029). These balances are not expected to crystallise and therefore have not been recorded in the financial statements.
The future tax benefit above comprises the benefit of tax losses available to carry forward of $30,349 (2005 - $1,148,269) and the benefit of other timing differences of $56,201 (2005 - $69,760).
The carrying forward of tax losses is subject to continuing to meet shareholder continuity requirements under the Income Tax Act 1994.
The company has imputation credits to carry forward as at 31 March 2006 of $394,029 (2005 - $394,029)
4. Dividend
2006 $000 2005 $000
Dividend Paid $160 $175
Dividends were paid, during the year to the Electra Trust. There is no proposed final dividend (2005 - $Nil).
5. Share capital
2006 $000 2005 $000
24,464,922 ordinary shares issued and fully paid $18,000 $18,000
All ordinary shares rank equally with one vote attached to each fully paid share.
6. Reserves
2006 $000 2005 $000
Asset revaluation reserve 64,078 64,077
$64,078 $64,077
Reconciliation of reserve movements
2006 $000 2005 $000
Asset Revaluation Reserve
Opening balance Revaluation of assets 64,0771 63,813264
Closing balance $64,078 $64,077
7. Non-current liabilities
2006 $000 2005 $000
Borrowings
Bank borrowings 12,000 12,000
Non current liabilities $12,000 $12,000
Repayable as follows:
Within one year 7,500 1,500
Within two years 500 6,000
Beyond two years 4,000 4,500
$12,000 $12,000
All bank borrowings are secured by a General Securities Agreement over Electra's assets.
Interest rates payable on bank facilities range from 6.75-7.51%.
8. Accounts payable and accruals
2006 $000 2005 $000
Creditors Trade 830 801
Other 2,709 3,834
Accruals 1,512 66
Accrued employee entitlements 194 196
$5,245 $4,897
9. Property, Plant and Equipment
2006 $000 2005 $000
Distribution assets
Land 544 544
Buildings 6,842 6,839
Substation equipment 10,743 10,736
Lines 59,569 59,432
Switchgear 4,916 4,537
TransformersOther distribution assets 13,77016,726 13,46015,469
Accumulated Depreciation (10,350) (6,686)
Total distribution assets 102,760 104,331
Non-distribution assets
Land 163 -
163 -
Leasehold improvements 142 142
Accumulated depreciation (113) (105)
29 37
Plant and equipment 1,011 1,034
Accumulated deprecation (867) (736)
144 298
Vehicles 61 118
Accumulated Depreciation (36) (53)
25 65
Capital Work in Progress 1,034 434
Total property plant and Equipment $104,155 $105,165
Valuation
Land and buildings owned by the Company, other than those referred to above as being part of distribution assets, are stated at market valuation, which was assessed as at 31 March 2004 by DTZ NZ Limited (Registered Valuers). The Land and Improvements value at valuation date was $215,000 and $675,000 respectively. The valuations are undertaken using the "highest & best use" method and are carried out on a three yearly basis.
The Optimised Deprival Value (ODV) at which distribution assets are stated, was assessed by Electra and independently reviewed by PricewaterhouseCoopers as at 31 March 2004. The report placed an ODV on Distribution assets of $101,173,265.
The ODV valuations are undertaken on a three yearly basis. The next assessment will be as at 31 March 2007. For the intervening years the distribution assets are updated for additions during the year at cost.
All other assets are recorded at cost.
10. Receivables and prepayments
2006 $000 2005 $000
Trade debtors 1,105 1,168
GST refund due - 398
Prepayments 44 26
1,149 1,592
Less provision for doubtful debts (40) (10)
$1,109 $1,582
11. Financial instruments
Credit risk
Financial assets which potentially subject the company to credit risk principally consist of bank balances and accounts receivable.
The company manages its principle credit risk by having Use of System Agreements with its major customers to maintain a minimum credit rating of BBB or better.
Maximum exposures to credit risk as at balance date are:
2006 $000 2005 $000
Bank balances 2,877 1,060
Receivables 1,109 1,582
The above maximum exposures are net of any recognised provision for losses on these financial assets. Bank balances and investments in short term deposits are made with registered banks with satisfactory credit ratings.
Concentrations of credit risk
The company has exposures to concentrations of credit risk by having six line customers. This is managed as mentioned above through the Use of System Agreements.
Currency risk
The company has no material exposure to foreign exchange risk.
Interest rate risk
Interest rate risk exposure is limited to bank borrowings. The company has no interest risk hedge contracts.
Fair values
There were no differences between the fair value and carrying amounts of financial instruments as at 31 March 2006.
12. Reconciliation
of net profit after tax with cash inflow from operating activities
2006 $000 2005 $000
Profit/(loss) after taxation 217 (10)
Add / (less) non-cash items Depreciation 3,881 3,906
Doubtful Debts Provision movement 30 -
Add item classified as investing activityCapital Loss (gain) on sale of fixed assets 90 387
Movements in working capital Increase / (decrease) in accounts payable (Increase) / decrease in receivables 185443 (659)683
Net cash inflow from operating activities $4,846 $4,307
13. Contingent liabilities
2006 $000 2005 $000
a) Guarantee of bank facilities for a subsidiary to a limit of 950 950
At balance date the amount of the bank facilities so guaranteed was
14. Commitments
Capital commitments
At balance date, there was $663,292 expenditure contracted for and approved by the company (2005 - $4,500).
Operating lease commitments
Lease commitment under non-cancellable operating leases
2006 $000 2005 $000
Not later than one year 42 37
Within one to two years - 12
Within two to five years - -
$42 $49
15. Transactions with related parties
During the year the Company purchased construction and maintenance services from its wholly owned subsidiary, Electra Contracting Limited, to an amount of $2,910,000 (2005 - $3,348,000). The amount owed to Electra Contracting at year end is $249,884 (2005 - $430,000).
2006 $000 2005 $000
(a.) Construction of subtransmission assets 55 194
(b.) Construction of zone substations 3 61
(c.) Construction of distribution lines and cables 151 360
(d.) Construction of medium voltage switchgear 190 254
(e.) Construction of distribution transformers 618 771
(f.) Construction of distribution substations - -
(g.) Construction of low voltage reticulation 147 144
(h.) Construction of other system fixed assets 72 1
(i.) Maintenance of assets 1,674 1,563
(j.) Consumer connections and disconnections - -
No related party debts have been written off or forgiven during this, or last year.
16. Further Information
The following information is required to be disclosed in the financial statements under Part 2 of the Electricity Information Disclosure Requirements 2004
2006 $000 2005 $000
1 Current assets
(a.) Cash and bank balances 877 1,060
(b.) Short-term investments 2,000 -
(c.) Inventories - -
(d.) Accounts Receivable 1,109 1,582
(e.) Other current assets not listed in (a) to (d) - -
(f.) Total current assets 3,986 2,642
2 Fixed Assets
(a.) System fixed assets 102,760 104,331
(b.) Consumer billing and information system assets - -
(c.) Motor Vehicles 25 65
(d.) Office equipment 144 298
(e.) Land and buildings 192 37
(f.) Capital works under construction 1,034 434
(g.) Other fixed assets not listed in (a) to (f) - -
(h.) Total fixed assets 104,155 105,165
3 Other tangible assets not listed above - -
4 Total tangible assets 108,141 107,807
5 Intangible assets
(a.) Goodwill - -
(b.) Other intangibles not listed in (a) - -
(c.) Total intangible assets (sum of (a) and (b)) - -
6 Total Assets 108,141 107,807
7 Current liabilities
(a.) Bank overdraft - -
(b.) Short-term borrowings - -
(c.) Payables and accruals 5,245 4,897
(d.) Provision for dividends payable - -
(e.) Provision for income tax - -
(f.) Other current liabilities not listed in (a) to (e) - 163
(g.) Total current liabilities 5,245 5,060
8 Non-current liabilities
(a.) Payables and accruals - -
(b.) Borrowings 12,000 12,000
(c.) Deferred tax - -
(d.) Other non-current liabilities not listed in (a) to (c) - -
(e.) Total non-current liabilities 12,000 12,000
2006 $000 2005 $000
9 Equity
(a.) Shareholders' equity -
(i) Share capital(ii) Retained earnings(iii) Reserves(iv) Total shareholders' equity 18,0008,81864,07890,896 18,0008,67064,07790,747
(b.) Minority interests in subsidiaries - -
(c.) Total equity 90,896 90,747
(d.) Capital notes - -
(e.) Total capital funds 90,896 90,747
10 Total Equity and Liabilities 108,141 107,807
11 Operating revenue
(a.) Revenue from line/access charges 22,253 21,889
(b.) Line charge discount to consumers (8,325) (7,000)
(c.) Revenue from "other" business for services carried out by the line business (transfer payment) - -
(d.) Interest on cash, bank balances, and short-term investments 113 16
(e.) AC loss-rental rebates 1,136 437
(f.) Other operating revenue not listed in (a) to (d) 331 471
(g) Total operating revenue 15,508 15,813
12 Operating expenditure
(a.) Payment for transmission charges 5,745 5,812
(b.) Transfer payments to the "other" business for:
(i) Asset maintenance: 1,659 1,563
(ii) Consumer disconnection/reconnection services: - -
(iii) Meter data: - -
(iv) Consumer-based load control services: - -
(v) Royalty and patent expenses: - -
(vi) Avoided transmission charges on account of own generation: - -
(vii) Other goods and services not listed in (i) to (vi): 17 -
(viii) Total transfer payment to the "other" business 1,676 1,563
(c.) Expense to entities that are not related parties for:
(i) Asset maintenance: 971 1,000
(ii) Consumer disconnection/reconnection services: - -
(iii) Meter data: - EMS 4 -
(iv) Consumer-based load control services: - -
(v) Royalty and patent expenses: - -
(vi) Total of specified expenses to non-related parties 975 1,000
(d.) Employee salaries, wages and redundancies 764 838
(e.) Consumer billing and information systems - -
(f.) Depreciation on:
(i) System fixed assets:(ii) Other assets not listed in (i):(iii) Total depreciation 3,6692123,881 3,3425643,906
(g.) Amortisation of:
(i) Goodwill(ii) Other intangibles(iii) Total amortisation of intangibles --- ---
(h.) Corporate and administration 516 579
(i.) Human resource expenses 89 97
2006 $000 2005 $000
12 Operating expenditure cont…
(j.) Marketing/Advertising 205 294
(k.) Merger and acquisition expenses - -
(l.) Takeover defence expenses - -
(m.) Research and development expenses - -
(n.) Consultancy and legal expenses 50 34
(o.) Donations - -
(p.) Directors' Fees 167 146
(q.) Auditor' Fees
(i) Audit fees paid to principal auditors:(ii) Audit fees paid to other auditors:(iii) Fees paid for other services provided by principal and other auditors(iv) Total auditors' fees 3285090 27-120147
(r.) Cost of offering credit -
(i) Bad debts written off:(ii) Increase in estimated doubtful debts(iii) Total cost of offering credit 83038 37-37
(s.) Local authority rates expense 50 48
(t.) AC loss-rental rebates (distribution to retailers/customers) expense - -
(u.) Rebates to consumers due to ownership interest - -
(v.) Subvention payments - -
(w.) Unusual expenses - -
(x.) Other expenditure not listed in (a) to (w) 215 444
13. Total operating expenditure 14,461 14,945
14. Operating surplus before interest and income tax 1,047 868
15. Interest expense
(a.) Interest expense on borrowings 830 878
(b.) Financing charges related to finance leases - -
(c.) Other interest expense not listed in (a) or (b) - -
(d) Total interest expense 830 878
16. Operating surplus before income tax 217 (10)
17. Income tax - -
18. Net surplus after tax 217 (10)
Annual valuation reconciliation report
Year ending 31 March 2006
2006 $000
System fixed assets at ODV - end of the previous financial year 102,222
Add system fixed assets acquired during the year at ODV 2,631
Less system fixed assets disposed of during the year at ODV 92
Less depreciation on system fixed assts at ODV 3,254
Add revaluations of system fixed assets -
System fixed assets at ODV - end of the financial year $101,507
Financial and efficiency performance measures for the Line Business
Introduction
The Electricity Information Disclosure Requirements 2004 forms part of the regulatory regime introduced following deregulation of the Electricity Industry.
The Regulations require Electricity Companies that operate a Line Business to publicly disclose in the Gazette and have available on request a variety of information. Included in this disclosure are Financial, Reliability and Efficiency Performance Measures and Statistics.
In order to consistently define these measures to allow comparison between Electricity Companies, the Regulations require a number of adjustments to be made to the Financial Statements. For this reason, the Financial Statements disclosed are not necessarily the basis of information used for calculations in Performance Measures and Statistics.
This information has been prepared solely for the purpose of complying with Parts 3-7 of the Electricity Information Disclosure Requirements 2004 required by the Commerce Act 1986 and is not intended for any other purpose.
Financial performance measures
Rates of return for the Line Business are as follows:
2006 2005 2004 2003
Return on funds 0.94% 0.86% 1.30% 3.29%
Return on equity 0.23% -0.01% 0.33% 2.35%
Return on investment 0.70% 0.57% 32.10% 3.88%
Efficiency performance measures
2006 2005 2004 2003
Direct line costs per kilometre $1,533 $1,534 $1,746 $1,798
In-direct line costs per electricity consumer $35 $39 $44 $48
Energy delivery
Performance measures
2006 2005 2004 2003
Load factor 51.23% 48.51% 51.46% 56.01%
Loss ratio 6.69% 6.58% 6.59% 6.69%
Capacity utilisation 31.84% 31.95% 28.95% 28.85%
Statistics
2006 2005 2004 2003
System Lengths (km's) (overhead)
33kV 153 153 153 153
11kV 854 854 853 853
400v 543 544 553 549
Total 1,550 1,551 1,559 1,555
System Lengths (km's) (underground)
33kV 21 21 24 21
11kV 193 189 180 176
400v 415 404 385 380
Total 629 614 589 577
Total Overhead and Underground 2,179 2,165 2,148 2,132
2006 2005 2004 2003
Transformer capacity kVA 288,716 284,881 283,323 279,483
Maximum demand kW 91,930 91,406 82,016 80,640
Total electricity entering the system (before losses) kWh 412,598,319 415,694,712 394,872,118 395,686,769
Electricity on behalf of other entities A 190,795,905 202,468,965 262,787,752 305,163,598
(after losses of electricity) B 9,889,250 9,595,365 9,918,360 9,841,437
C 30,513,232 30,446,069 37,730,811 40,054,797
D 7,304,510 5,964,263 1,776,596 823,345
E 32,084,474 27,083,133 20,139,519 13,330,046
F 114,402,711 112,784,393 36,558,506 -
Total Consumers 40,458 39,906 39,541 39,015
Reliability Performance
Measure Targets
Total interruptions
2006 2005 2004 2003
Class A - Planned by Transpower - - - -
Class B - Planned by Electra 88 84 80 78
Class C - Unplanned by Electra 109 106 118 88
Class D - Unplanned by Transpower 4 1 2 1
Class E - Unplanned by embedded generation - - - -
Class F - Unplanned by generation on other network - - - -
Class G - Unplanned by other line owner - - - -
Class H - Planned by other line owner - - - -
Class I - Any other loss of supply - - - -
Total 201 191 200 167
Interruptions Target for Following Financial Year
2007 2006 2005 2004
Class B - Planned 75 75 75 75
Class C - Unplanned 95 95 95 95
Total 170 170 170 170
Average Interruptions Targets (next and subsequent 4 years)
2007/11 2006/10 2005/09 2004/08
Class B - Planned 75 75 75 70
Class C - Unplanned 95 95 95 86
Total 170 170 170 164
Proportion of the total Class C interruptions not restored within:
2006 2005 2004 2003
a) 3 hours - b) 24 hours - 3.1% 0% 2.8% 0% 2.55% 0.04% 0% 0%
Number of Faults per 100 Circuit Kilometre
2006 2005 2004 2003
33kV 0.57 0.57 6.32 1.73
11kV 9.46 8.34 10.28 8.27
Total number of faults 8.19 7.87 9.72 7.32
Fault Targets per 100 Circuit Kilometre
Number of faults targeted (next year) 2007 2006 2005 2004
33kV 2.6 2.6 2.6 2.6
11kV 9.5 9.5 9.5 9.5
Total 8.5 8.5 8.5 8.5
Average Faults Targets (next and subsequent 4 years) 2007/11 2006/10 2005/09 2004/08
33kV 2.6 2.6 2.6 2.6
11kV 9.5 9.5 9.5 9.5
Total 8.5 8.5 8.5 8.5
Number of Faults per 100 Circuit Kilometre
2006 2005 2004 2003
Overhead
33kV 0.66 0.66 7.19 1.96
11kV 9.84 9.60 11.70 7.97
Total Overhead 8.44 8.24 11.01 7.05
Underground
33kV - - - -
11kV 7.70 2.65 3.78 11.40
Total Underground 7.01 2.38 3.40 10.18
Total 8.19 7.23 9.7 7.3
SAIDI
2006 2005 2004 2003
Class A - Planned by Transpower - - - -
Class B - Planned by Electra 17.56 15.23 9.98 5.86
Class C - Unplanned by Electra 51.43 62.97 107.86 49.73
Class D - Unplanned by Transpower 25.00 5.66 15.63 5.71
Class E - Unplanned by embedded generation - - - -
Class F - Unplanned by generation on other network - - - -
Class G - Unplanned by other line owner - - - -
Class H - Planned by other line owner - - - -
Class I - Any other loss of supply - - - -
Total 93.99 83.86 133.47 61.30
SAIDI targets (next year)
2007 2006 2005 2004
Class B - Planned 16 16 20 20
Class C - Unplanned 62 62 80 80
Total 78 78 100 100
Average SAIDI targets (next 5 years)
2007/11 2006/10 2005/09 2004/08
Class B - Planned 16 16 20 20
Class C - Unplanned 62 62 80 80
Total 78 78 100 100
SAIFI
2006 2005 2004 2003
Class A - Planned by Transpower - - - -
Class B - Planned by Electra 0.10 0.09 0.07 0.04
Class C - Unplanned by Electra 1.23 1.47 2.65 0.86
Class D - Unplanned by Transpower 1.54 0.39 0.78 0.34
Class E - Unplanned by embedded generation - - - -
Class F - Unplanned by generation on other network - - - -
Class G - Unplanned by other line owner - - - -
Class H - Planned by other line owner - - - -
Class I - Any other loss of supply - - - -
Total 2.87 1.95 3.50 1.24
SAIFI targets (next year)
2007 2006 2005 2004
Class B - Planned 0.16 0.16 0.2 0.2
Class C - Unplanned 1.42 1.42 1.8 1.8
Total 1.58 1.58 2.0 2.0
Average SAIFI targets (next 5 years)
2007/11 2006/10 2005/09 2004/08
Class B - Planned 0.16 0.16 0.18 0.18
Class C - Unplanned 1.42 1.42 1.80 1.80
Total 1.58 1.58 1.98 1.98
CAIDI
2006 2005 2004 2003
Class A - Planned by Transpower - - - -
Class B - Planned by Electra 175.60 169.22 143.17 139.52
Class C - Unplanned by Electra 41.81 42.84 40.75 58.03
Class D - Unplanned by Transpower 16.23 14.51 20.0 17.0
Class E - Unplanned by embedded generation - - - -
Class F - Unplanned by generation on other network - - - -
Class G - Unplanned by other line owner - - - -
Class H - Planned by other line owner - - - -
Class I - Any other loss of supply - - - -
Total 32.75 43.01 38.13 49.64
CAIDI targets (next year)
2007 2006 2005 2004
Class B - Planned 98.00 98.00 100.00 100.00
Class C - Unplanned 44.00 44.00 44.45 44.45
Total 50.00 50.00 50.00 50.00
Average CAIDI targets (next 5 years)
2007/11 2006/10 2005/09 2004/08
Class B - Planned 98.00 98.00 111.11 111.11
Class C - Unplanned 44.00 44.00 44.45 44.45
Total 50.00 50.00 50.51 50.51
FORM FOR THE DERIVATION OF FINANCIAL PERFORMANCE MEASURES FROM FINANCIAL STATEMENTS
Derivation Table Input and Calculations Symbol in formula ROF ROE ROI
Operating surplus before interest and income tax from financial statements 1,047,000
Operating surplus before interest and income tax adjusted pursuant to requirement 18 (OSBIIT) 1,047,000
Interest on cash, bank balances, and short-term investments (ISTI) 113,000
OSBIIT minus ISTI 934,000 a 934,000 934,000
Net surplus after tax from financial statements 217,000
Net surplus after tax adjusted pursuant to requirement 18 (NSAT) 217,000 n 217,000
Amortisation of goodwill and amortisation of other intangibles 0 g add 0 add 0 add 0
Subvention payment 0 s add 0 add 0 add 0
Depreciation of SFA at BV (x) 3,243,811
Depreciation of SFA at ODV (y) 3,253,931
ODV depreciation adjustment -10,120 d add -10,120 add -10,120 add -10,120
Subvention payment tax adjustment 0 s*t deduct 0 deduct 0
Interest tax shield 236,610 q deduct 236,610
Revaluations 0 r add 0
Income tax 0 p deduct 0
Numerator 923,879 206,879 687,269
OSBIITADJ = a + g + s + d NSATADJ = n + g + s - s*t + d OSBIITADJ = a + g - q + r + s + d - p - s*t
Fixed assets at end of previous financial year (FA0) 105,165,000
Fixed assets at end of current financial year (FA1) 104,155,000
Adjusted net working capital at end of previous financial year (ANWC0) -3,478,270
Adjusted net working capital at end of current financial year (ANWC1) -4,136,000
Average total funds employed (ATFE) 100,852,865 c 100,852,865 100,852,865
(or requirement 33 time-weighted average)
Total equity at end of previous financial year (TE0) 90,746,802
Total equity at end of current financial year (TE1) 90,896,000
Average total equity 90,821,401 k 90,821,401
(or requirement 33 time-weighted average)
WUC at end of previous financial year (WUC0) 434,000
WUC at end of current financial year (WUC1) 1,034,000
Average total works under construction 734,000 e deduct 734,000 deduct 734,000 deduct 734,000
(or requirement 33 time-weighted average)
Revaluations 0 r
Half of revaluations 0 r/2 deduct 0
Intangible assets at end of previous financial year (IA0) 0
Intangible assets at end of current financial year (IA1) 0
Average total intangible asset 0 m add 0
(or requirement 33 time-weighted average)
Subvention payment at end of previous financial year (S0) 0
Subvention payment at end of current financial year (S1) 0
Subvention payment tax adjustment at end of previous financial year 0
Subvention payment tax adjustment at end of current financial year 0
Average subvention payment & related tax adjustment 0 v add 0
System fixed assets at end of previous financial year at book value (SFAbv0) 104,331,000
System fixed assets at end of current financial year at book value (SFAbv1) 102,760,000
Average value of system fixed assets at book value 103,545,500 f deduct 103,545,500 deduct 103,545,500 deduct 103,545,500
(or requirement 33 time-weighted average)
System Fixed assets at year beginning at ODV value (SFAodv0) 102,222,217
System Fixed assets at end of current financial year at ODV value (SFAodv1) 101,507,286
Average value of system fixed assets at ODV value 101,864,752 h add 101,864,752 add 101,864,752 add 101,864,752
(or requirement 33 time-weighted average)
Denominator 98,438,117 88,406,653 98,438,116
ATFEADJ = c - e - f + h Ave TEADJ = k - e - m + v - f + h ATFEADJ = c - e - ½r - f + h
Financial Performance Measure: 0.94 0.23 0.70
ROF = OSBIITADJ/ATFEADJ x 100 ROE = NSATADJ/ATEADJ x 100 ROI = OSBIITADJ/ATFEADJ x 100
t = maximum statutory income tax rate applying to corporate entities, bv = book value, ave = average, odv = optimised deprival valuation, subscript '0' = end of the previous financial year, subscript '1' = end of the current financial year, ROF = return on funds, ROE = return on equity, ROI = return on investment

ODV valuation
The Optimised Deprival Value (ODV) of the network was assessed by Electra and audited by PricewaterhouseCoopers as at 31 March 2004.
DELOITTE
AUDITOR'S REPORT
TO THE READERS OF THE FINANCIAL STATEMENTS OF ELECTRA LIMITED LINES BUSINESS FOR THE YEAR ENDED 31 MARCH 2006
We have audited the financial statements on pages 2 to 18. The financial statements provide information about the past financial performance of Electra Limited Lines Business and its financial position as at 31 March 2006. This information is stated in accordance with the accounting policies set out on pages 5 to 7.
Directors' Responsibilities
The Commerce Commission's Electricity Information Disclosure Requirements 2004 made under section 57T of the Commerce Act 1986 require the Directors to prepare financial statements which give a true and fair view of the financial position of Electra Limited Lines Business as at 31 March 2006, and results of operations and cash flows for the year then ended.
Auditor's Responsibilities
Section 15 of the Public Audit Act 2001 and Requirement 30 of the Electricity (Information Disclosure) Requirements 2004 require the Auditor-General to audit the financial statements. It is the responsibility of the Auditor-General to express an independent opinion on the financial statements and report that opinion to you.
The Auditor-General has appointed G R Mitchell of Deloitte to undertake the audit.
Basis of Opinion
An audit includes examining, on a test basis, evidence relevant to the amounts and disclosures in the financial statements. It also includes assessing:
· the significant estimates and judgements made by the Directors in the preparation of the financial statements; and
· whether the accounting policies are appropriate to Electra Limited Lines Business' circumstances, consistently applied and adequately disclosed.
We conducted our audit in accordance with generally accepted auditing standards in New Zealand. We planned and performed our audit so as to obtain all the information and explanations which we considered necessary. We obtained sufficient evidence to give reasonable assurance that the financial statements are free from material misstatements, whether caused by fraud or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements.
Other than in our capacity as auditor acting on behalf of the Auditor-General, we have no relationship with or interests in Electra Limited.
DELOITTE
Unqualified Opinion
We have obtained all the information and explanations we have required.
In our opinion:
· proper accounting records have been maintained by Electra Limited as far as appears from our examination of those records; and
· the financial statements referred to above;
a) comply with generally accepted accounting practice; and
b) give a true and fair view of the financial position of Electra Limited Lines Business' financial position as at 31 March 2006 and the results of its operations and cash flows for the year then ended; and
c) comply with the Electricity (Information Disclosure) Requirements 2004.
Our audit was completed on 27 October 2006 and our unqualified opinion is expressed as at that date.
G. R. Mitchell
DELOITTE
ON BEHALF OF THE AUDITOR-GENERAL
WELLINGON, NEW ZEALAND
DELOITTE
AUDITOR-GENERAL'S OPINION ON THE PERFORMANCE MEASURES OF ELECTRA LIMITED LINES BUSINESS
We have examined the information, being:
(a) a derivation table; and
(b) the annual ODV reconciliation report; and
(c) financial performance measures; and
(d) financial components of the efficiency performance measures,
that were prepared by Electra Limited Lines Business and dated 31 March 2006 for the purposes of the Commerce Commission's Electricity Information Disclosure Requirements 2004.
In our opinion, having made all reasonable enquiry, to the best of our knowledge, that information has been prepared in accordance with those Electricity Information Disclosure Requirements 2004.
G. R. Mitchell
DELOITTE
ON BEHALF OF THE AUDITOR-GENERAL
WELLINGTON, NEW ZEALAND
27 October 2006
ODV valuation
The Optimised Deprival Value (ODV) of the network was assessed by Electra and audited by PricewaterhouseCoopers as at 31 March 2004.
PRICEWATERHOUSECOOPERS
PricewaterhouseCoopers
113-119 The Terrace
PO Box 243
Wellington, New Zealand
Telephone +64 4 462 7000
Facsimile +64 4 462 7001
AUDITOR-GENERAL'S OPINION ON THE VALUATION REPORT OF ELECTRA LIMITED (LINES BUSINESS)
We have examined the valuation report of Electra Limited (Lines Business) and dated 6 December 2004 which report contains valuations of system fixed assets as at 31 March 2004.
In our opinion, having made all reasonable enquiry, and to the best of our knowledge, the valuations contained in the report, including the total valuation of system fixed assets of $101,173,264, have been made in accordance with the ODV Handbook (as defined in the Commerce Commission's Electricity Information Disclosure Requirements 2004).
Fred Hutchings PricewaterhouseCoopers
On behalf of the Auditor-General
Wellington, New Zealand
8 December 2004
CERTIFICATION OF VALUATION REPORT OF LINE OWNERS
We, Warren Thessman, Chairman and Piers Hamid, Director of Electra Limited certify that, having made all reasonable enquiry, to the best of our knowledge, -
(a) The attached valuation report of Electra Limited, prepared for the purposes of requirement 19 of the Commerce Commission's Electricity Information Disclosure Requirements 2004 complies with those Requirements; and
(b) The replacement cost of the line business system fixed assets of Electra Limited is $177,475,288; and
(c) The depreciated replacement cost of the line business system fixed assets of Electra Limited is $101,266,158; and
(d) The optimised depreciated replacement cost of the line business system fixed assets of Electra Limited is $101,173,264; and
(e) The optimised deprival valuation of the line business system fixed assets of Electra Limited is $101,173,264; and
(f) The values in paragraphs (b) through to (e) have been prepared in accordance with the ODV Handbook (as defined in the Electricity Information disclosure Requirements 2004). These valuations are as at 31 March 2004.
Warren Thessman Piers Hamid
Chairman Director
Dated this 27th day of October 2006
DIRECTOR'S CERTIFICATES
CERTIFICATION OF FINANCIAL STATEMENTS, PERFORMANCE MEASURES AND STATISTICS DISCLOSED BY LINE OWNERS OTHER THAN TRANSPOWER
We, Warren Thessman, Chairman and Piers Hamid, Director of Electra Limited certify that, having made all reasonable enquiry, to the best of our knowledge, -
(a) The attached audited financial statements of Electra Limited prepared for the purposes of requirement 6 of the commerce Commission's Electricity Information Disclosure Requirements 2004 comply with those Requirements; and
(b) The attached information, being the derivation table, financial performance measures, efficiency performance measures, energy delivery efficiency performance measures, statistics, and reliability performance measures in relation to Electra Limited, and having been prepared for the purposes of requirements 14, 15, 20 and 21 of the Electricity Information Disclosure Requirements 2004, comply with those Requirements.
The valuations on which those financial performance measures are based are as at 31 March 2004.
Warren Thessman Piers Hamid
Chairman Director
Dated this 27th day of October 2006
Directory
Directors
W R Thessman (Chairperson)
P A T Hamid
P F McKelvey
M H Devlin
Executive
J L Yeoman (Chief Executive)
Registered office
Electra
Cnr Exeter & Bristol Streets
LEVIN
Postal address
P O Box 244
LEVIN
Telephone 0800 353 2872
Fax 06 367 6120
Auditor
Deloitte
Wellington
On behalf of the Auditor General
Bankers
Bank of New Zealand
Solicitors
Quigg Partners, Wellington