INFORMATION FOR DISCLOSURE
PURSUANT TO SECTION 57T OF THE COMMERCE ACT 1986
NETWORK WAITAKI LIMITED
LINES BUSINESS
FINANCIAL STATEMENTS
For the Year Ended 31 March 2006
Prepared for the Purposes of the Electricity Information Disclosure
Requirements 2004
INFORMATION DISCLOSURE DISCLAIMER
The information disclosed in this 2006 Information Disclosure package issued by Network Waitaki Limited has been prepared solely for the purposes of the Electricity Information Disclosure Requirements 2004.
The Requirements require the information to be disclosed in the manner it is presented.
The information should not be used for any other purpose than that intended under the requirements.
The financial information presented is for the lines business as described within the Electricity Information Disclosure Requirements 2004. There are also additional activities of the Company that are not required to be reported under the Requirements.
APPROVAL BY DIRECTORS
The Directors have approved the Consolidated Financial Statements of the Network Waitaki Limited Lines Business for the year ended 31 March 2006 on pages 1 to 14.
For and on behalf of the Board of Directors
Director Director
Mr Lindsay Mitchell Malcolm Mr John David Walker
Network Waitaki Limited Lines Business
Reference
Statement of Financial Performance for the Year Ended 31 March 2006
Schedule 1 Part 2
REVENUE Note 2006 2005
$ $
Operating revenue
Revenue from line/access charges 7,842,545 7,254,948
Revenue returned as Customer Discount (995,788) (1,001,545)
Revenue from "Other" business for services carried out by the line business 0 0
Interest on cash, bank balances and short term investments 537,887 592,265
AC loss-rental rebates 397,115 159,933
Other revenue not listed above
Capital Contributions 1,543,211 870,607
Use of Money Interest 0 0
Other 13,152 0
1,556,363 870,607
Total operating revenue 9,338,122 7,876,208
EXPENDITURE 2006 2005
$ $
Operating expenditure
Payment for transmission charges 2,173,142 2,326,560
Transfer payments to the "Other" business for
Asset maintenance 3 888,262 1,055,748
Consumer disconnection/reconnection services 0 0
Meter data 0 0
Consumer-based load control services 0 0
Royalty and patent expenses 0 0
Avoided transmission charges on account of own generation 0 0
Other goods and services 0 606,032
Total transfer payment to the "Other" business 888,262 1,661,780
Expense to entities that are not related parties for
Asset maintenance 255,818 134,936
Consumer disconnection/reconnection services 0 0
Meter data 0 0
Consumer-based load control services 0 0
Royalty and patent expenses 0 0
Total of specified expenses to non-related parties 255,818 134,936
Employee salaries, wages and redundancies 688,917 57,318
Consumer billing and information system expense 73,419 25,900
Depreciation on
System Property, Plant and Equipment 2,480,553 2,025,406
Other Property, Plant and Equipment 178,076 6,000
Total depreciation 2,658,629 2,031,406
Amortisation of
Goodwill 0 0
Other intangibles 0 0
Total amortisation of intangibles 0 0
Corporate and administration 125,847 224,646
Human resource expenses 15,815 1,096
Marketing/advertising 9,447 6,291
Merger and acquisition expenses 0 0
Takeover defence expenses 0 0
Research and development expenses 0 0
Consultancy and legal expenses 104,849 62,764
Donations 0 0
Directors' fees 65,801 83,966
Auditors' fees
Audit fees paid to principal auditors 44,835 43,778
Audit fees paid to other auditors 0 0
Fees paid for other services provided by principal and other auditors 0 0
Total auditors' fees 44,835 43,778
Network Waitaki Limited Lines Business
Reference
Statement of Financial Performance for the Year Ended 31 March 2006 - Continued
Schedule 1 Part 2
Note 2006 2005
$ $
Costs of offering credit
12ri Bad debts written off 1,846 0
12rii Increase in estimated doubtful debts 0 0
12riii Total cost of offering credit 1,846 0
12s Local authority rates expense 62,260 63,763
12t AC loss-rentals (distribution to retailers/customers) expense 0 0
12u Rebates to consumers due to ownership interest 0 0
12v Subvention payments 0 0
12w Unusual expenses 0 0
12x Other expenditure not listed above 67,661 67,457
13 Total operating expenditure 7,236,548 6,791,661
14 Operating surplus before interest and income tax 2,101,574 1,084,547
Interest expense
15a Interest expense on borrowings 0 0
15b Financing charges related to finance leases 0 0
15c Other interest expense 0 0
15d Total interest expense 0 0
16 Operating surplus before income tax 2,101,574 1,084,547
17 Income tax 4 997,603 741,288
18 Net surplus after tax 1,103,971 343,259
Reference
Network Waitaki Limited Lines Business
Schedule 1 Part 2
14 Statement of Movements in Equity for the Year Ended 31 March 2006 2006 2005
$ $
8
Equity at the beginning of the year 51,666,657 51,323,398
8 Net Surplus (Deficit) for the Period 1,103,971 343,259
Revaluation 0 0
Total Recognised Revenue and Expenses 1,103,971 343,259
Dividends Paid (70,000) 0
Equity at the end of the year 52,700,628 51,666,657
Network Waitaki Limited Lines Business
Statement of Financial Position as at 31 March 2006
Note 2006 2005
$ $
Current assets
Cash and bank balances 84,677 287,189
Short-term investments 5,453,115 9,000,000
Inventories 0 131,709
Accounts receivable 930,198 360,130
GST 290,859 276,692
Provisional tax 97,341 147,062
Other current assets 59,601 145,062
Total current assets 6,915,791 10,347,844
Plant, Property & Equipment
System Plant, Property & Equipment 49,702,911 45,677,011
Consumer billing and information system plant, property & equipment 313,570 0
Motor vehicles 41,135 0
Office equipment 69,213 0
Land and buildings 45,381 51,000
Capital works under construction (system plant, property & equipment) 1,786,563 898,608
Other Plant, Property & Equipment 762,707 4,936
Total Plant, Property & Equipment 52,721,480 46,631,555
Other tangible assets not listed above 0 0
Total tangible assets 59,637,271 56,979,399
Intangible assets
Goodwill 0 0
Other intangibles 0 0
Total intangible assets 0 0
Total assets 59,637,271 56,979,399
Current liabilities
Bank overdraft 0 0
Short-term borrowings 0 0
Payables and accruals 2,452,245 1,280,982
Provision for dividends payable 0 0
Provision for taxation 0 0
GST 0 0
Other current liabilities 0 0
Total current liabilities 2,452,245 1,280,982
Non-current liabilities
Payables and accruals 0 0
Borrowings 0 0
Deferred tax 5 4,484,398 4,031,760
Other non-current liabilities 0 0
Total non-current liabilities 4,484,398 4,031,760
Equity
Shareholders' equity
Share capital 7,368,870 7,368,870
Retained earnings 8,322,721 7,018,879
Reserves 37,009,037 37,278,908
Total Shareholders' equity 52,700,628 51,666,657
Minority interests in subsidiaries 0 0
Total equity 52,700,628 51,666,657
Capital notes 0 0
Total capital funds 52,700,628 51,666,657
Total equity and liabilities 59,637,271 56,979,399
Network Waitaki Limited Lines Business
Statement of Cash Flows for the Year Ended 31 March 2006
Note 2006 2005
$ $
CASH FLOWS FROM OPERATING ACTIVITIES
Cash was provided from:
Receipts from Customers 7,357,938 6,339,471
Interest 537,887 592,265
GST 0 0
Income Tax 376,024 0
Cash was disbursed to:
Customer Discounts
Payments to Suppliers (2,213,935) (3,063,570)
Employees (646,061) 0
Income Tax (328,529) (410,906)
GST (14,167) (123,097)
FBT 0 0
Interest Paid 0 0
NET CASH FLOWS FROM OPERATING ACTIVITIES 6 5,069,157 3,334,162
CASH FLOWS FROM INVESTING ACTIVITIES
Cash was provided from:
Proceeds from sales of Plant, Property & Equipment 0 0
Collection on Loans 0 0
Cash was applied to:
Cash Outflows for Plant, Property & Equipment (8,748,553) (2,339,402)
Investments 0 0
NET CASH FLOWS FROM INVESTING ACTIVITIES (8,748,553) (2,339,402)
CASH FLOWS FROM FINANCING ACTIVITIES
Cash was provided from:
Loan transferred from other activities 0 0
Cash was applied to:
Dividend paid (70,000) 0
Loan repaid 0 0
NET CASH FLOWS FROM FINANCING ACTIVITIES (70,000) 0
NET INCREASE (DECREASE) IN CASH HELD (3,749,396) 994,760
Add Opening Cash Brought Forward 9,287,189 8,292,429
Equity Transferred From (To) Other
ENDING CASH CARRIED FORWARD 5,537,793 9,287,189
Network Waitaki Limited Lines Business
1 Statement of Accounting Policies
REPORTING ENTITY
· The financial statements presented here are for the Lines Business of Network Waitaki Limited.
· The financial statements have been prepared in accordance with the Companies Act 1993 and the Financial Reporting Act 1993.
· These financial statements have been prepared for the purpose of complying with the requirements of the Electricity Information Disclosure Requirements 2004.
· The Lines Business operates a lines business activity, as defined by Regulation 2 of the Electricity Information Disclosure Regulations, in the Waitaki area.
MEASUREMENT BASE
· The financial statements have been prepared on the basis of historical cost with the exception of certain items for which specific accounting policies are identified.
· Accrual accounting is used to match expenses and revenues.
· Reliance is placed on the fact that the Company is a going concern.
ACCOUNTING POLICIES
The financial statements are prepared in accordance with New Zealand generally accepted accounting practice. The accounting policies that materially affect the measurement of financial performance, financial position and cash flows are set out below.
Revenue
Goods and Services
Revenue comprised the amounts received and receivable for goods and services supplied to customers in the ordinary course of business.
Investment Income
Interest is accounted for as earned.
Customer Contributions
Contributions from customers in relation to the construction of new lines for the network are accounted for as income in the year in which they are received.
Property, Plant & Equipment
All property, plant and equipment are initially recorded at cost. System property, plant and equipment are subsequently revalued to net current value as determined by an independent valuer using the depreciated replacement cost valuation method. Other property, plant and equipment are stated at cost less an allowance for depreciation.
Depreciation
Depreciation is provided on all property, plant and equipment, other than freehold land, at rates that will allocate the assets' cost or valuation, to their residual values, over their estimated useful lives. All other assets are depreciated on a straight line basis.
The useful lives and associated depreciation rates for major classes of assets used in the preparation of the financial statements are as follows:
Distribution system 10 to 70 years 1.4% to 10.0%
Freehold building 40 to 100 years 1.0% to 2.5%
Motor vehicles 4 to 7 years 15.0% to 26.0%
Plant and equipment 2 to 14 years 7.5% to 50.0%
Office furniture and equipment 3 to 10 years 10.0% to 33.0%
Gains and Losses
Disposal of property, plant and equipment are taken into account in determining the operating result for the year.
Network Waitaki Limited Line Business
Statement of Accounting Policies (Continued)
Accounts receivable
Accounts receivable are shown at expected realisable value after providing for doubtful debts.
Inventories
Inventories are valued at the lower of cost or net realisable value. Serial numbered stock is recorded at the appropriate individual value, while other stock is recorded at weighted average cost.
Goods and Services Tax (GST)
The statements of financial performance and statement of cash flows have been prepared so that all components are stated exclusive of GST. All items in the statement of financial position are stated net of GST, with the exception of receivables and payables, which include GST invoiced.
Income tax
Income tax expense has been calculated using the liability method. Tax effect accounting is applied on a comprehensive basis to all timing differences. A debit balance in the deferred tax account, arising from timing differences or income tax benefits from income tax losses, is recognised only if there is virtual certainty of realisation.
Investments
All Investments are stated at cost.
Capital Contributions
Contributions received toward capital works are recorded in the statement of financial performance and shown as income earned in the year in which they are received.
Financial Instruments
Financial Instruments carried on the statement of financial position include cash and bank balances, investments, receivables, trade creditors and borrowings. The particular recognition methods adopted are disclosed in individual policy statements associated with each item. Network Waitaki Limited has no off balance sheet exposure.
Statement of Cash Flows
The following are definitions of terms used in the statement of cash flows:
Operating activities include all transactions and other events that are not investing or financing activities.
Investing activities are those activities relating to the acquisition, holding and disposal of property, plant and equipment and of investments. Investments can include securities not falling within the definition of cash.
Financing activities are those activities that result in changes in the size and composition of the capital structure. These include both equity and debt not falling within the definition of cash.
Cash is considered to be cash on hand and current accounts in banks, net of bank overdrafts.
Changes in Accounting Policy:
There have been no changes in accounting policies.
Methodology of Separation of Business: The basis of allocation adopted is the avoidable cost methodology.
Network Waitaki Limited Lines Business
Notes to the financial statements for the year ended 31 March 2006 (Continued)
2. Commitments and Contingent Liabilities
There were capital commitments at 31 March 2006 of $597,659 (2005 $552,547).
The Lines Business has no contingent liabilities at the end of the year (2005 Nil).
3. Related Party Transactions
Associated Entity: Networks South Limited
· Networks South Limited is 50% owned by Network Waitaki Limited and provided administrative, engineering and planning functions for the network from 1 April 2004 to 31 March 2005. These services were charged on a fixed contract basis.
· During the year Network Waitaki paid Networks South Limited $337,776 (2005 $928,728) on normal commercial terms. No amount was outstanding as at 31 March 2006 (2005 $93,090). No debts were written off or forgiven and no transactions took place at nil or nominal value. Transactions do not relate to the categories specified in the Disclosure Regulations.
Associated Entity: NetCon Limited
· NetCon is wholly owned by Networks South Limited and provided asset maintenance and construction services for the network from 1 April 2005 to 31 March 2006. Services were charged on either a fixed price basis or "time and materials" basis.
· During the year, this charge totaled $3,063,585 (2005 $2,973,100). The outstanding amount as at 31 March 2006 was $786,056 (2005 $738,285) payable on normal commercial terms.
· No debts were written off or forgiven and no transactions took place at nil or nominal value.
· During the year capital construction transactions totalled the following:
Year to Year to
31/03/06 31/03/05
$ $
Sub transmission assets 722,172 297,568
Zone substations 82,203 40,357
Distribution lines 455,881 695,224
Medium voltage switchgear 0 2,222
Distribution transformers 0 48,434
Distribution substations 377,493 347,719
Low voltage lines 355,358 246,210
Other property, plant & equipment 182,216 618,079
Other transactions totalled:
Maintenance of System Property, Plant & Equipment 888,262 1,178,085
2006 2005
$ $
4. Taxation
Surplus (Deficit) Before Taxation 2,101,574 1,084,547
Income tax expense @ 33% 693,519 357,601
Plus (Less) the effect of
Non-assessable receipts (509,260) (287,300)
Non-deductible expenses 813,344 670,687
Taxation Expenses 997,603 741,288
Taxation Charge is Represented by:
Income tax liability in respect of the current year 544,965 345,969
Deferred taxation 452,638 395,319
997,603 741,288
5. Movement in Deferred Tax Account
Opening balance 4,031,760 3,636,441
Movement in deferred tax 452,638 395,319
Closing balance 4,484,398 4,031,760
6. Reconciliation of Net Surplus after Taxation with Net Cash Flow from Operating Activity
Surplus after Taxation 1,103,971 343,259
Add Non-cash items
Depreciation 2,658,629 2,031,408
Deferred tax 452,638 395,319
3,111,267 2,426,725
Add (Less) Movement in Working Capital Items
Accounts receivable (484,607) 86,068
Inventories 131,709 30,710
GST (14,167) (123,097)
Tax asset 49,721 9,862
Other current assets 0 0
Payable and accruals 1,214,119 560,635
Other current liabilities 0 0
896,775 564,178
Net Cash Flows From Operating Activity 5,112,013 3,334,162
Network Waitaki Limited Lines Business
Reference
Financial Performance Measures - 31 March 2006
Schedule 1 Part 3 2006 2005 2004 2003
Accounting return on funds 3.28% 1.07% 3.77% 0.40%
Accounting return on equity 2.17% 0.68% 2.62% (0.75)%
Accounting return on investments 0.81% (0.97)% 1.82% (1.80)%
Previous Disclosure Accounting return on total assets
Previous Disclosure Accounting rate of profit
Efficiency Performance Measures - 31 March 2006
2006 2005 2004 2003
Direct line costs per kilometre $865.34 $801.64 $803.97 $757.17
Direct expenditure 1,725,098 1,555,643 1,554,334 1,459,645
System length (km) 1,993.56 1,940.57 1,933.33 1,927.75
Indirect line costs per consumer $56.00 $42.96 $40.55 $38.31
Indirect expenditure 672,301 514,431 466,001 436,742
Total consumers 12,006 11,975 11,491 11,400
Schedule 1 Part 4
Energy Delivery Efficiency Performance Measures - 31 March 2006
2006 2005 2004 2003
Load Factor (= a/b/c x 100) 67.95% 66.03% 61.24% 71.04%
a = kWh of electricity entering system 202,325,411 194,090,295 194,267,825 194,539,566
b = Maximum Demand (kW) 33,990 33,556 36,210 31,260
c = Total number of hours 8,760 8,760 8,760 8,760
Loss Ratio (= a/b x 100) 5.87% 5.52% 5.66% 5.64%
a = Total Electricity lost in the Network (kWh)* 11,879,157 10,722,772 10,996,292 10,964,858
b = Total Electricity entering the Network before losses (kWh) 202,325,411 194,090,295 194,267,825 194,539,566
Capacity Utilisation (= a/b x 100) 23.53% 24.43% 26.85% 24.56%
a = Maximum Demand (kW) 33,990 33,556 36,210 31,260
b = Transformer Capacity (kVA) 144,433 137,347 134,837 127,270
*Network Waitaki relies on sales information reported by electricity retailers to calculate this value.
Reference
Network Waitaki Limited Lines Business
Schedule 1 Part 4
Network Statistics - 31 March 2006
2006 2005 2004 2003
33kV 154.05 138.31 138.31 138.31
Total System Length (kms) 11kV 1,611.01 1,582.90 1,575.66 1,570.22
230/400 V 228.50 219.36 219.36 219.23
Total 1,993.56 1,940.57 1,933.33 1,927.75
33kV 152.11 138.02 138.02 138.02
Overhead Circuit Length (kms) 11kV 1,568.51 1,542.52 1,537.81 1,535.51
230/400 V 200.12 192.88 192.88 193.12
Total 1,920.74 1,873.42 1,868.71 1,866.65
33kV 1.94 0.29 0.29 0.29
Underground Circuit Length (kms) 11kV 42.50 40.37 37.84 34.71
230/400 V 28.38 26.48 26.48 26.11
Total 72.82 67.14 64.61 61.10
Transformer Capacity (kVA) 11,000/400V 144,333 137,222 134,712 127,145
33,000/400V 100 125 125 125
Total 144,433 137,347 134,837 127,270
Maximum Demand (kW) 33,990 33,556 36,210 31,260
not required Total Electricity entering the Network- before losses (kWh) 202,325,411 194,090,295 194,267,825 194,539,566
"
Amount of electricity supplied from the system (kWh)*" Retailer A 127,268,638 134,877,953 161,114,352 163,386,098
Retailer B 11,046,307 10,083,253 5,361,901 4,180,152
Retailer C 12,516,802 10,778,183 9,179,280 10,028,620
Retailer D 0 0 0 0
Retailer E 2,120,650 1,982,670 1,771,768 3,214,192
Retailer F 37,493,856 25,645,464 5,844,232 2,765,646
Total 190,446,254 183,367,523 183,271,533 183,574,708
Total number of consumers Number 12,006 11,975 11,491 11,400
*Network Waitaki relies on sales information reported by electricity retailers to calculate these amounts.
Network Waitaki Limited Lines Business
Schedule 1 part 5
Reliability and Performance Measures
Interruptions Class "2007/11
(Target)" "2007
(Target)" 2006 2005 2004 2003
Number of Interruptions
Class A 0 0 0 0 0 0
Planned Interruptions Class B 125 125 178 202 102 68
Unplanned Interruptions Class C 80 80 64 58 109 75
Class D 0 0 1 0 0 0
Class E - I 0 0 0 0 0
Total 205 205 243 260 211 143
Proportion of Total Class C Interruptions not restored:
Within 3 Hours 12.50% 13.79% 34.86% 13.3%
Within 24 Hours 0.0% 0.0% 0.0% 0.0%
Faults Voltage "2006/10
(Target)" "2006
(Target)" 2006 2005 2004 2003
Overall System
Faults per 100 circuit kilometres of prescribed voltage electric line 0.57 4.68 3.29 3.37 6.53 4.39
Faults per 100 circuit kilometres 33kV 1.00 1.00 0.00 0.00 0.72 0.72
11kV 9.00 9.00 3.60 3.66 7.04 4.71
Overhead
Faults per 100 circuit kilometres of prescribed voltage electric line 3.37 3.45 6.50 4.48
Faults per 100 circuit kilometres 33kV 0.00 0.00 0.72 0.72
11kV 3.70 3.76 7.02 4.82
Underground
Faults per 100 circuit kilometres of prescribed voltage electric line 0.00 0.00 7.87 0.00
Faults per 100 circuit kilometres 33kV 0.00 0.00 0.00 0.00
11kV 0.00 0.00 7.93 0.00
Network Waitaki Limited Lines Business
Reliability and Performance Measures
Reference System Average Interruption Duration Index (SAIDI)
Schedule 1 part 5 Class "2007/11
(Target)" "2007
(Target)" 2006 2005 2004 2003
SAIDI for total number of interruptions Overall 100 100 102.31 104.85 187.0 91.6
SAIDI for total number of interruptions within each interruption class (= a/b) Class A 0.00 0.00 0.0 0.0
Class B 50 50 49.79 61.14 36.7 29.6
Class C 45 45 46.95 43.71 150.3 62.1
Class D 5.57 0.00 0.0 0.0
Class E - I 0.00 0.00 0.0 0.0
a = sum of interruption duration factors for all interruptions within the particular interruption class Class A 0 0
Class B 604,850 604,850 597,824 732,104 421,371 337,116
Class C 544,365 544,365 563,694 523,463 1,727,489 707,489
Class D 0 0
Class E - I 0 0
b = Total Consumers 12,097 12,097 12,006 11,975 11,491 11,400
System Average Interruption Frequency Index (SAIFI)
Class "2006/11
(Target)" "2007
(Target)" 2006 2005 2004 2003
SAIFI for total number of interruptions Overall 1.25 1.39 1.91 1.38 1.65 1.27
SAIFI for total number of interruptions within each interruption class (= a/b) Class A 0.00 0.00 0.00 0.00
Class B 0.35 0.35 0.29 0.35 0.18 0.15
Class C 0.90 0.90 0.92 1.03 1.47 1.12
Class D 0.70 0.00 0.00 0.00
Class E - I 0.00 0.00 0.00 0.00
a = sum of electricity consumers affected by all interruptions Class A 0 0
Class B 4,234 4,234 3,470 4,179 2,084 1,687
Class C 10,887 10,887 11,094 12,322 16,932 12,803
Class D 8,368 0 0
Class E - I 0 0
b = Total Consumers 12,097 12,097 12,006 11,975 11,491 11,400
Connection Average Interruption Duration Index (CAIDI)
Class "2006/11
(Target)" "2007
(Target)" 2006 2005 2004 2003
CAIDI for total number of interruptions Overall 76 76 53.58 76.11 113.00 72.09
CAIDI for total number of interruptions within each interruption class Class A 0.000 0.000 0.00 0.00
Class B 143 143 172.480 175.144 202.19 199.83
Class C 48 50 50.800 42.499 102.03 55.26
Class D 8.000 0.000 0.00 0.00
Classes E-I 0.000 0.000 0.00 0.00
Network Waitaki Limited Lines Business
FORM FOR THE DERIVATION OF FINANCIAL PERFORMANCE MEASURES FROM FINANCIAL STATEMENTS - YEAR ENDED 31 MARCH 2006
Derivation Table Input and Calculations Symbol ROF ROE ROI
Operating surplus before interest and income tax from financial statements 2,101,574
Operating surplus before interest and income tax adjusted pursuant to regulation 18 (OSBIIT) 2,101,574
Interest on cash, bank balances, and short-term investments (ISTI) 537,887
OSBIIT minus ISTI 1,563,687 a 1,563,687 1,563,687
Net surplus after tax from financial statements 1,103,971
Net surplus after tax adjusted pursuant to regulation 18 (NSAT) 1,103,971 n 1,103,971
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) 2,480,553
Depreciation of SFA at ODV (y) 2,480,553
ODV depreciation adjustment 0 d add 0 add 0 add 0
Subvention payment tax adjustment 0 s*t deduct 0 deduct 0
Interest tax shield 177,503 q deduct 177,503
Revaluations 0 r add 0
Income tax 997,603 p deduct 997,603
Numerator 1,563,687 1,103,972 388,582
OSBIITADJ = a + g + s + d NSATADJ = n + g + s - s*t + d OSBIITADJ = a + g - q + r + s + d - p - s*t
Plant, Property & Equipment at end of previous financial year (FA0) 46,631,555
Plant, Property & Equipment at end of current financial year (FA1) 52,721,480
Adjusted net working capital at end of previous financial year (ANWC0) (220,327)
Adjusted net working capital at end of current financial year (ANWC1) (1,074,246)
Average total funds employed (ATFE) 49,029,232 c 49,029,232 49,029,232
Total equity at end of previous financial year (TE0) 51,666,657
Total equity at end of current financial year (TE1) 52,700,628
Average total equity 52,183,643 k 52,183,643
WUC at end of previous financial year (WUC0) 898,608
WUC at end of current financial year (WUC1) 1,786,563
Average total works under construction 1,342,586 e deduct 1,342,586 deduct 1,342,586 deduct 1,342,586
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
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 Plant, Property & Equipment at end of previous financial year at book value (SFAbv0) 45,677,011
System Plant, Property & Equipment at end of current financial year at book value (SFAbv1) 49,702,911
Average value of system plant, property & equipment at book value 47,689,961 f deduct 47,689,961 deduct 47,689,961 deduct 47,689,961
System Plant, Property & Equipment at year beginning at ODV value (SFAodv0) 45,677,011
System Plant, Property & Equipment at end of current financial year at ODV value (SFAodv1) 49,702,911
Average value of system plant, property & equipment at ODV value 47,689,961 h add 47,689,961 add 47,689,961 add 47,689,961
Denominator 47,686,646 50,841,056 47,686,646
ATFEADJ = c - e - f + h Ave TEADJ = k - e - m + v - f + h ATFEADJ = c - e - ½r - f + h
Financial Performance Measure: 3.28% 2.17% 0.81%
ROF = OSBIITADJ/ATFEADJ x 100 ROE = NSATADJ/ATEADJ x 100 ROI = OSBIITADJ/ATFEADJ x 100
Network Waitaki (Lines)
Annual Valuation Reconciliation Report
2006 2005
$ $
System Property, Plant & Equipment at ODV 45,667,011 45,668,091
Add System Property, Plant & Equipment acquired during the year at ODV 6,516,453 2,024,808
Less System Property, Plant and Equipment disposed of during the year (348,501) 0
Less depreciation on System Property, Plant & Equipment (2,132,052) (2,025,888)
Closing System Property, Plant and Equipment at ODV 49,702,911 45,667,011
Valuation of the network reticulation system is at net current value on an existing use basis, as at 31 March 2004, and was conducted by KPMG, Christchurch. The Commerce Commission has adjusted this valuation following a comprehensive audit.
Certificate of Financial Statements, Performance Measures, and Statistics Disclosed by Line Owners other than Transpower
We, Lindsay Mitchell Malcolm and John David Walker, Directors of Network Waitaki Limited certify that, having made all reasonable enquiries, to the best of our knowledge:
(a) the attached audited financial statements of Network Waitaki Limited prepared for the purposes Of regulation 6 of the Electricity Information Disclosure Requirements 2004 comply with the requirements of those regulations; and
(b) the attached information, being the derivation table, financial performance measures, efficiency performance measures, statistics, and reliability performance measures in relation to Network Waitaki Limited, and having been prepared for the purpose of regulations 14, 15, 20 and 21 of the Electricity Information Disclosure Requirements 2004 complies with the requirements of those regulations.
The valuations on which those financial performance measures are based are as at
31 March 2004.
Lindsay Mitchell Malcolm John David Walker
REPORT OF THE AUDOTIR-GENERAL
TO THE READERS OF THE FINANCIAL STATEMENTS OF NETWORK WAITAKI LIMITED - LINES BUSINESS FOR THE YEAR ENDED 31 MARCH 2006
We have audited the financial statements of Network Waitaki Limited - Lines Business on pages 1 to 8. The financial statements provide information about the past financial performance of Network Waitaki 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 and 6.
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 Network Waitaki Limited - Lines Business as at 31 March 2006, and the results of its operations and cash flows for the year ended on that date.
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 Maurice Noone of PricewaterhouseCoopers 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 Network Waitaki Limited - Lines Business's circumstances, consistently applied and adequately disclosed.
We conducted the audit in accordance with the Auditing Standards published by the Auditor-General, which incorporate the Auditing Standards issued by the Institute of Chartered Accountants of New Zealand. We planned and performed our audit so as to obtain all the
information and explanations which we considered necessary in order to provide us with sufficient evidence to obtain 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 Network Waitaki Limited.
Unqualified Opinion
We have obtained all the information and explanations we have required.
In our opinion -
- proper accounting records have been maintained by Network Waitaki Limited - Lines Business as far as appears from our examination of those records; and
- the financial statements of Network Waitaki Limited - Lines Business on pages 1 to 8:
(a) comply with generally accepted accounting practice in New Zealand; and
(b) give a true and fair view of Network Waitaki Limited - Lines Business's financial position as at 31 March 2006 and the results of its operations and cash flows for the year ended on that date; and
(c) comply with the Electricity Information Disclosure Requirements 2004.
Our audit was completed on 30 October 2006 and our unqualified opinion is expressed as at that date.
Maurice Noone
PricewaterhouseCoopers
On behalf of the Auditor-General
Christchurch, New Zealand
AUDITOR-GENERAL'S OPINION ON THE PERFORMANCE MEASURES OF NETWORK WAITAKI LIMITED - LINES BUSINESS
We have examined the information on pages 13 and 14, being -
(a) the derivation table in requirement 15;
(b) the annual ODV reconciliation report in requirement 16;
(c) the financial performance measures in clause 1 of Part 3 of Schedule 1; and
(d) the financial components of the efficiency performance measures in clause 2 of Part 3 of Schedule 1, -
that were prepared by Network Waitaki Limited - Lines Business and dated 30 October 2006 for the purposes of the Commerce Commission's Electricity Information Disclosure Requirements 2004.
In our opinion, having made all reasonable enquiry, and to the best of our knowledge, that information has been prepared in accordance with those Electricity Information Disclosure Requirements 2004.
Maurice Noone
PricewaterhouseCoopers
On behalf of the Auditor-General
Christchurch, New Zealand
30 October 2006