INFORMATION FOR DISCLOSURE
PURSUANT TO SECTION 57T OF THE COMMERCE ACT 1986
NELSON ELECTRICITY LIMITED
Statement of Financial Performance for the Year Ended 31 March 2006
Notes 2006 2005
Line Line
Business Business
INCOME $ooo $ooo
Interest received 29 47
Network revenue 7,057 6,798
Other income 401 191
7,487 7,036
EXPENDITURE
Operations and maintenance 601 485
Transmission charges 1,782 1,797
Directors fees 63 58
Audit fees 22 17
Other administration 873 862
Interest expense 76 52
Depreciation 973 938
4,390 4,209
SURPLUS BEFORE TAXATION 3,097 2,827
Provision for Taxation 3 1,127 1,057
SURPLUS AFTER TAXATION 1,970 1,770
Statement of Movements in Equity for the Year Ended 31 March 2006
2006 2005
Line Line
Business Business
$ooo $ooo
Equity at Beginning of Year 23,236 14,903
Surplus and Revaluations
Revaluations 0 8,763
Net Surplus for Period 1,970 1,770
Total Recognised Revenue and Expenses 1,970 10,533
Other Movements
Distributions to Owners (3,800) (2,200)
Total Other Movements (3,800) (2,200)
Equity at End of Year 21,406 23,236
The Accompanying Notes form an Integral part of These Financial Statements
NELSON ELECTRICITY LIMITED
Statement of Financial Position as at 31 March 2006
2006 2005
Line Line
Business Business
EQUITY $ooo $ooo
Share Capital 5 1 1
Revaluation Reserves 7 19,982 19,982
Pre Acquisition Reserves 7 1,291 1,291
Retained Earnings 6 132 1,962
21,406 23,236
Represented by
CURRENT ASSETS
Bank and Cash 36 80
Accounts Receivable 608 636
Tax Refund Due 70 27
Inventories 137 93
851 836
CURRENT LIABILITIES
Bank Overdraft 0 30
Creditors and Accruals 531 537
531 567
Working Capital 320 269
NON CURRENT ASSETS
Deferred Tax Benefit 4 11 10
Fixed Assets 8 24,575 24,057
24,586 24,067
NON CURRENT LIABILITIES
Term Loans 9 3,500 1,100
3,500 1,100
NET ASSETS 21,406 23,236
The Accompanying Notes form an Integral part of These Financial Statements
NELSON ELECTRICITY LIMITED
Statement of Cash Flows for the Year Ended 31 March 2006
2006 2005
Line Line
CASH FLOWS FROM OPERATING ACTIVITIES Business Business
Cash was Provided From
Receipts from Customers 7,486 7,035
Interest Received 29 47
7,515 7,082
Cash was Applied to
Payments to Suppliers (3,372) (3,213)
Interest Paid (76) (51)
Net GST Paid 2 (45)
Taxation Paid (1,170) (1,128)
(4,616) (4,437)
Net Cash Flow From Operating Activities 2,899 2,645
CASH FLOW FROM INVESTING ACTIVITIES
Cash was Provided From
Proceeds From Sale of Fixed Assets 4 0
Cash was Applied to
Purchase of Fixed Assets (1,517) (1,358)
Net Cash Flow From Investing Activities (1,513) (1,358)
CASH FLOW FROM FINANCING ACTIVITIES
Cash was Provided From
Term Debt Raised 2,400 100
Cash was Applied to
Payment of Dividends (3,800) (2,200)
Net Cash Flow From Financing Activities (1,400) (2,100)
Net Increase in Cash Held (14) (813)
Opening Cash Bought Forward 50 863
Cash Balance at End of Year 36 50
Cash Balance at End of Year Comprises
Bank (Overdraft) 36 (30)
Short Term Deposits 0 80
Reconciliation of Surplus After Taxation With Cash Flow From Operating Activities
Net Surplus After Taxation 1,970 1,770
Add/(Less) Non Cash Items
Depreciation 973 938
Movement in Deferred Taxation (1) (1)
972 937
Add/(Less) Movements in Working Capital
(Increase)/Decrease in Receivables 28 46
(Increase)/Decrease in Inventories (45) 17
Increase/(Decrease) in Creditors and Accruals (6) (158)
Increase/(Decrease) in Taxation (42) (88)
(65) (183)
Less Items Classified as Investing activities
Capital Expenditure in Creditors (net movement) 22 121
Net cash Flow from Operating Activities 2,899 2,645
NELSON ELECTRICITY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
for the year to 31 March 2006
Statement of Accounting Policies
1. Entity Statement
Nelson Electricity Limited is a public company registered under the Companies Act 1993 and
a reporting entity for the purposes of the Financial Reporting Act 1993.
Nelson Electricity owns the electricity distribution network which serves the central Nelson City
area.The distribution network assets were leased to Citipower Ltd between December 1991 and
March 1999. As a result of restructuring required in accord with the Energy Industry Reform Act
the lease was terminated on 1 April 1999 and Nelson Electricity now contracts with the electricity
retailers (Trustpower, Meridian etc) who supply electricity across the Nelson network.
2. Accounting Policies
2.1 Authority
These financial statements have been prepared for the sole purpose of complying with
Requirement 6 of the Electricity (Information Disclosure) Requirements 2004.
2.2 Measurement Base
The measurement base adopted is that of historic cost with the exception of certain items for which
specific accounting policies are disclosed.
2.3 Depreciation
Depreciation has been provided on all major assets, excluding land, at the following rates.
Buildings 2% SL
Distribution System 1.43% to 6.67% SL
Plant and Equipment 14.4% - 60% DV
2.4 Taxation
The income tax expense charged to the Statement of Financial Performance includes both the current
year's provision and the income tax effects of timing differences calculated using the liability method.
A debit balance in the deferred taxation account arising from timing differences or income tax losses
is only recognised when there is virtual certainty of realisation.
2.5 Financial Instruments
The company is party to financial instruments as part of its every day operations. These financial
instruments include cash and bank deposits, accounts receivable and payable, and loans which
have been recognised in the statement of financial position.
Revenues and expenses in relation to all financial instruments are recognised in the Statement
of financial performance.
Except for loans, which are recorded at cost and those items covered by a separate accounting policy
all financial instruments are shown at their estimated fair value.
2.6 Plant Property and Equipment
Distribution system assets were revalued as at 1 April 2004 to current depreciated replacement cost (DRC)
as assessed by independent valuers PricewaterhouseCoopers and certified in their advice of 6 May 2005.
Revaluation surpluses are transferred directly to the asset revaluation reserve.
Land assets are carried at current market value.
It is intended that network and land assets will be revalued every three years. Subsequent additions are recorded
at cost. All other assets are recorded at cost less depreciation.
NELSON ELECTRICITY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
for the year to 31 March 2006
2.7 Good and Services Tax
The Statement 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 exclusive of GST with the
exception of receivables and payables which include GST invoiced.
2.8 Receivables
Receivables are stated at the amount they are expected to realise. Bad debts will be written off in the year in which
they are identified.
2.9 Inventories
Inventories are valued on the basis of the lower of cost (on a weighted average basis) and net realisable value.
Allowance is made for damaged or obsolete items.
2.10 Operating Leases
Leases where the lessor retains substantially all the risks and benefits of ownership of the
leased items are classified as operating leases. Payments under these leases are recognised
as expenses in the periods in which they occur.
2.11 Network Revenue
The Company's principal source of revenue arises from the supply of network services to electricity
traders who trade across the network. Terms and conditions for supply of these services are
provided for in "use of system" agreements signed with the electricity retailers.
2.12 Employee Entitlements
Provision is made in respect of the company's liability for employees annual leave. Annual leave is
calculated on an actual entitlement basis at current rates of remuneration.
2.13 Statement of Cash Flows
Cash means cash balances on hand, held in bank accounts, demand deposits and other highly
liquid investments in which the company invests as part of its day to day cash management.
Operating activities include all cash received from all income sources of the company and
records the cash payments made for the supply of goods and services.
Investing activities are those activities relating to the acquisition and disposal of non current assets
Financing activities comprise the change in equity and debt capital structure of the company.
2.14 Changes in Accounting Policies
There have been no changes in accounting policies during the year. All policies have been
applied on bases consistent with those used in other years.
Year Ended Year Ended
31-Mar-06 31-Mar-05
3. Taxation $ooo $ooo
Surplus Before Taxation 3,097 2,827
Taxation @ 33 % 1,022 933
Over Provision from Prior Year (15) (10)
Effect of Permanent Differences 120 134
Tax Expense as per Statement of Financial Performance 1,127 1,057
Comprising:
Current Taxation 1,128 1,058
Deferred Taxation (1) (1)
1,127 1,057
Imputation Credit Account
Balance 1 April 823 759
Imputation Credits Attached to Dividends Paid in the Year (1,871) (1,084)
Income Tax Payments During the Year 1,179 1,152
Refunds Received From Inland Revenue (12) (4)
Balance 31 March 119 823
NELSON ELECTRICITY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
for the year to 31 March 2006
31-Mar-06 31-Mar-05
4. Deferred Taxation $ooo $ooo
Balance 1 April (10) (9)
Current Period Provision (1) (1)
Balance 31 March (11) (10)
5. Share Capital 31-Mar-06 31-Mar-05
$ooo $ooo
Share Capital 1 1
As at 31 March 2006 Marlborough Lines Ltd and Network Tasman Ltd each held 500 shares. (2005 500 shares each)
6. Retained Earnings 31-Mar-06 31-Mar-05
$ooo $ooo
Opening Balance 1 April 1,962 2,392
Net Surplus for Year 1,970 1,770
Dividends Paid (3,800) (2,200)
Closing Balance 31 March 132 1,962
7. Reserves 31-Mar-06 31-Mar-05
$ooo $ooo
Pre acquisition Reserves (Retained earnings accumulated to
19.06.96 when the company was purchased by
Marlborough Lines Ltd and Network Tasman Ltd) 1,291 1,291
Revaluation Reserves - Credits to Revaluation Reserves
Land and Buildings 1,054 1,054
Distribution System assets 18,928 18,928
19,982 19,982
Distribution system assets were revalued as at 1 April 2004 to current depreciated replacement cost (DRC). The valuation
was completed in accord with the requirements of FRS 3 by PricewaterhouseCoopers and their valuation report is dated
6 May 2005. The company's Haven Road land was also revalued to net current value as at 1 April 2004.
As At As At
31-Mar-06 31-Mar-05
8. Plant Property and Equipment $ooo $ooo
Land (at valuation) 1,163 1,163
Buildings (at cost) 175 175
Accumulated Depreciation 86 82
Book Value 89 93
Distribution System Assets (at valuation)
Subtransmission Assets 3,928 3,725
Accumulated Depreciation 1,710 1,635
Book Value 2,218 2,090
Zone Substations 3,253 3,028
Accumulated Depreciation 1,999 1,917
Book Value 1,254 1,111
Distribution Assets 35,885 34,478
Accumulated Depreciation 17,807 17,099
Book Value 18,078 17,379
Other System Fixed Assets 3,350 3,227
Accumulated Depreciation 1,637 1,564
Book Value 1,713 1,663
Plant and Equipment (at cost) 252 215
Accumulated Depreciation 192 169
Book Value 60 46
Capital Work in Progress 512
Total Fixed Assets 24,575 24,057
NELSON ELECTRICITY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
for the year to 31 March 2006
Note 8 Continued
The most recent Optimised Deprival Valuation for the Nelson Electricity Ltd network
system assets was dated 31 March 2004 and the total value recorded was $19.393m.
The current rating valuation for improvements is $138,000 (2005 $138,000)
9. Term Loans As At As At
31-Mar-06 31-Mar-05
$ooo $ooo
Westpac Trust Multi Option Credit Facility 3,500 1,100
The effective interest rate at 31 March 2006 is 7.70% (2005, 7.59%) This is a three year revolving facility reviewed and
able to be extended annually. The facility limit is $8.1m and the company has granted a negative pledge as an
alternative to issuing security in respect of the facility. The agreement expires on 31 October 2008.
10. Related Party Transactions
Marlborough Lines limited and Network Tasman Limited each own 50% of the shares in Nelson Electricity limited and
have in the past year provided management and administrative services to the following value:
2006 2005
$ $
Marlborough Lines Ltd 167,496 167,496
Network Tasman Ltd 132,502 132,504
Payable to Marlborough Lines at 31 March. 13,958 13,958
Payable to Network Tasman at 31 March. 11,042 11,042
Nelson Electricity reimburses Marlborough Lines for salaries paid to staff on their behalf. Salaries totalling $31,510
remained payable to Marlborough Lines as at 31 March 2006. (2005 $35,809)
Network Tasman oncharged to Nelson Electricity Transpower national grid charges during the year
totalling $1,782,305 (net). (2005, $1,797,012). As at 31 March 2006 Nelson Electricity owed Network Tasman
$148,735 (net) for transmission charges. (2005, $149,738)
Network Tasman credited Nelson Electricity with loss rental rebates (from Transpower) totalling $280,506 (net). (2005, $126,084)
As at 31 March 2006 Network Tasman owed Nelson Electricity $22,200 (net) for loss rental rebates. (2005, $12,846)
During the year Nelson Electricity paid dividends totalling $1,900,000 to each of Marlborough Lines limited and Network Tasman
Limited. (2005, $1,100,000 each)
2006 2005
$ $
Directors fees paid to Marlborough Lines in respect of Mr K Forrest 10,080 9,340
There were no related party transactions at nil or nominal value.
There were no related party debts written off or forgiven during the year. (2005 Nil)
11. Financial Instruments
Credit Risk
Credit risk is the risk that an outside party will not be able to meet its obligations to the company.
The company places its cash deposits with high credit quality financial institutions. Credit risk in respect
of accounts receivable is minimised through the company's ability to place bonding requirements on its
major electricity retailing customers and the substantial financial nature of these businesses. The
company does not have any other significant contrations of credit risk.
NELSON ELECTRICITY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
for the year to 31 March 2006
Interest Rate risk
Interest rate risk is the risk that interest rates will change, increasing or decreasing the cost of borrowing
or lending. The company's short term deposits are at fixed interest rates and mature within one year.
The company has the opportunity to vary interest rates on its non current borrowings on such terms as it
selects. The interest rate applying to the company's current borrowings is disclosed in note 9.
Currency Risk
The company has no present exposure to risks arising from movement in exchange rates. (2005, Nil)
12. Commitments and Contigent Liabilities
As at 31 March 2006 the company had no commitments or contingent liabilities that are not
included in these financial statements. (2005, Nil)
There were no uncompleted capital projects as at 31 March 2006. (2005, $197,161)
13. Events Subsequent to Balance Date
There were no events subsequent to balance date requiring notification in these financial statements.
Schedule 1 Part 8 31-Mar-06 31-Mar-05
Annual Valuation Reconciliation Report for Year ending 31 March 2006 $ooo $ooo
System Fixed Assets at ODV at 31 March 2005 19,522 19,393
Add System Fixed Assets Acquired During the Year at ODV 1,684 883
Less System Fixed Assets Disposed of During the Year At ODV (248) (86)
Less Depreciation on System Fixed Assets (668) (668)
Add Revaluations of System Fixed Assets 0 0
Equals System Fixed Assets at ODV at 31 March 2006 20,290 19,522
Schedule 1, Part 2
Items required to be separately listed in financial statements required under
requirement 5(1) or requirement 6(1):
Statement of Financial Position 2006 2005
$(ooo) $(ooo)
1 Current assets
(a) Cash and bank balances: 36 0
(b) Short-term investments: 0 80
(c ) Inventories: 137 93
(d) Accounts receivable: 608 636
(e) Other current assets not listed in (a) to (d): 0 0
(f) Total current assets (sum of (a) to (e)). 781 809
2 Fixed assets
(a) System fixed assets: 23,263 22,243
(b) Consumer billing and information system assets: 0 0
(c) Motor Vehicles: 18 11
(d) Office equipment: 42 35
(e) Land and buildings: 1,252 1,256
(f) Capital works under construction: 0 512
(g) Other fixed assets not listed in (a) to (f): 0 0
(h) Total fixed assets (sum of (a) to (g)). 24,575 24,057
3 Other tangible assets not listed above 0 0
4 Total tangible assets (1(f)+2(h)+3). 25,356 24,866
5 Intangible assets
(a) Goodwill: 0 0
(b) Other intangibles not listed in (a): 0 0
(c ) Total intangible assets (sum of (a) and (b)). 0 0
6 Total assets (4+5(c)). 25,356 24,866
7 Current liabilities
(a) Bank overdraft: 0 30
(b) Short-term borrowings: 0 0
(c ) Payables and accruals: 531 505
(d) Provision for dividends payable: 0 0
(e) Provision for income tax: (70) (27)
(f) Other current liabilities not listed in (a) to (e): 0 32
(g) Total current liabilities (sum of (a) to (f)). 461 540
8 Non-current liabilities
(a) Payables and accruals: 0 0
(b) Borrowings: 3,500 1,100
(c ) Deferred tax: (11) (10)
(d) Other non-current liabilities not listed in (a) to (c ): 0 0
(e) Total non-current liabilities (sum of (a) to (d)). 3,489 1,090
9 Equity
(a) Shareholders' equity-
(i) Share capital: 1 1
(ii) Retained earnings: 132 1,962
(iii) Reserves: 21,273 21,273
(iv) Total Shareholders' equity (sum of (i) to (iii)): 21,406 23,236
(b) Minority interests in subsidiaries: 0 0
(c ) Total equity (sum of (a) and b)): 21,406 23,236
(d) Capital notes: 0 0
(e) Total capital funds (sum of (c) and (d)). 21,406 23,236
10 Total equity and liabilities (7(g)+8(e)+9(e)). 25,356 24,866
Statement of Financial Performance 2006 2005
$(ooo) $(ooo)
11 Operating revenue
(a) Revenue from line / access charges: 7,057 6,798
(b) Revenue from "Other" business for services carried out by 0 0
the line business (transfer payment): 0 0
(c) Interest on cash, bank balances and short term investments: 29 47
(d) AC loss-rental rebates: 281 126
(e) Other revenue not listed in (a) to (d): 120 65
(f) Total operating revenue (sum of (a) to (e)). 7,487 7,036
2006 2005
$(ooo) $(ooo)
12 Operating expenditure
(a) Payment for transmission charges: 1,782 1,797
(b) Transfer payments to the "Other" business for-
(i) Asset maintenance: 0 0
(ii) Consumer disconnection/reconnection services: 0 0
(iii) Meter data: 0 0
(iv) Consumer-based load control services: 0 0
(v) Royalty and patent expenses: 0 0
(vi) Avoided transmission charges on account of own generation 0 0
(vii) Other goods and services not listed in (i) to (vi): 0 0
(viii) Total transfer payment to the "Other" business (sum of (i) to (vii)): 0 0
(c ) Expense to entities that are not related parties for-
(i) Asset maintenance: 601 485
(ii) Consumer disconnection / reconnection services: 0 0
(iii) Meter data: 0 0
(iv) Consumer-based load control services: 0 0
(v) Royalty and patent expenses: 0 0
(vi) Total of specified expenses to non-related parties (sum of (i) to (v)): 601 485
(d) Employee salaries, wages, and redundancies: 308 291
(e) Consumer billing and information system expense: 0 0
(f) Depreciation on-
(i) System fixed assets: 940 905
(ii) Other assets not listed in (i): 33 33
(iii) Total depreciation (sum of (i) and (ii)): 973 938
(g) Amortisation of-
(i) Goodwill: 0 0
(ii) Other intangibles: 0 0
(iii) Total amortisation of intangibles (sum of (i) and (ii)): 0 0
(h) Corporate and administration: 504 487
(i) Human resource expenses: 0 0
(j) Marketing / advertising: 0 0
(k) Merger and acquisition expenses: 0 0
(l) Takeover defence expenses: 0 0
(m) Research and development expenses: 0 0
(n) Consultancy and legal expenses: 43 73
(o) Donations: 0 0
(p) Directors' fees: 63 58
(q) Auditors' fees:
(i) Audit fees paid to principal auditors: 22 14
(ii) Audit fees paid to other auditors: 0 0
(iii) Fees paid for other services provided by principal and other auditors: 3 3
(iv) Total auditors' fees (sum of (i) to (iii)): 25 17
(r ) Costs of offering credit:
(i) Bad debts written off: 3 0
(ii) Increase in estimated doubtful debts: 0 0
(iii) Total cost of offering credit (sum of (i) to (ii)): 3 0
(s) Local authority rates expense: 12 11
(t) AC loss-rentals (distribution to retailers/customers) expense: 0 0
(u) Rebates to consumers due to ownership interest: 0 0
(v) Subvention payments: 0 0
(w) Unusual expenses: 0 0
(x) Other expenditure not listed in (a) to (w) 0 0
0 0
13 Total operating expenditure (sum of 12(a) to 12(x)). 4,314 4,157
14 Operating surplus before interest and income tax (11(f)-13). 3,173 2,879
15 Interest expense
(a) Interest expense on borrowings: 76 52
(b) Financing charges related to finance leases: 0 0
(c) Other interest expense not listed in (a) or (b): 0 0
(d) Total interest expense (sum of (a) to (c)): 76 52
16 Operating surplus before income tax (14-15(d)) 3,097 2,827
17 Income tax 1,127 1,057
18 Net surplus after tax (16-17) 1,970 1,770
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 3,173
Operating surplus before interest and income tax adjusted pursuant to requirement 18 (OSBIIT) 3,173
Interest on cash, bank balances, and short-term investments (ISTI) 29
OSBIIT minus ISTI 3,144 a 3,144 3,144
Net surplus after tax from financial statements 1,970
Net surplus after tax adjusted pursuant to requirement 18 (NSAT) 1,970 n 1,970
Amortisation of goodwill and amortisation of other intangibles - g add 0 add 0 add 0
Subvention payment - s add 0 add 0 add 0
Depreciation of SFA at BV (x) 940
Depreciation of SFA at ODV (y) 668
ODV depreciation adjustment 272 d add 272 add 272 add 272
Subvention payment tax adjustment - s*t deduct 0 deduct 0
Interest tax shield 16 q deduct 16
Revaluations - r add 0
Income tax 1,127 p deduct 1,127
Numerator 3,416 2,242 2,273
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) 24,057
Fixed assets at end of current financial year (FA1) 24,575
Adjusted net working capital at end of previous financial year (ANWC0) 192
Adjusted net working capital at end of current financial year (ANWC1) 214
Average total funds employed (ATFE) 24,519 c 24,519 24,519
(or requirement 32 time-weighted average)
Total equity at end of previous financial year (TE0) 23,236
Total equity at end of current financial year (TE1) 21,406
Average total equity 22,321 k 22,321
(or requirement 32 time-weighted average)
WUC at end of previous financial year (WUC0) 512
WUC at end of current financial year (WUC1) -
Average total works under construction 256 e deduct 256 deduct 256 deduct 256
(or requirement 32 time-weighted average)
Revaluations - r
Half of revaluations - r/2 deduct 0
Intangible assets at end of previous financial year (IA0) -
Intangible assets at end of current financial year (IA1) -
Average total intangible asset - m deduct 0
(or requirement 32 time-weighted average)
Subvention payment at end of previous financial year (S0) -
Subvention payment at end of current financial year (S1) -
Subvention payment tax adjustment at end of previous financial year -
Subvention payment tax adjustment at end of current financial year -
Average subvention payment & related tax adjustment - v add 0
System fixed assets at end of previous financial year at book value (SFAbv0) 22,243
System fixed assets at end of current financial year at book value (SFAbv1) 23,263
Average value of system fixed assets at book value 22,753 f deduct 22,753 deduct 22,753 deduct 22,753
(or requirement 32 time-weighted average)
System Fixed assets at year beginning at ODV value (SFAodv0) 19,522
System Fixed assets at end of current financial year at ODV value (SFAodv1) 20,290
Average value of system fixed assets at ODV value 19,906 h add 19,906 add 19,906 add 19,906
(or requirement 32 time-weighted average)
Denominator 21,416 19,218 21,416
ATFEADJ = c - e - f + h Ave TEADJ = k - e - m + v - f + h ATFEADJ = c - e - ½r - f + h
Financial Performance Measure: 16.0 11.7 10.6
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
PERFORMANCE MEASURES
PREPARED IN ACCORDANCE WITH THE ELECTRICITY (INFORMATION DISCLOSURE) REQUIREMENTS 2004
2006 2005 2004 2003 2002
1 Financial Performance Measures
note The Electricity conveyed through the system on behalf of retailers includes an estimate of usage due to lack of
reliable data from retailers, the statistics including loss factors relating to this information should be read with caution.
(a) Return on Funds 16.0% 14.8% 16.6% 20.7% 24.1%
(b) Return on Equity 11.7% 10.0% 11.7% 13.0% 14.7%
(c) Return on Investment 10.6% 9.7% 57.0% 12.8% 14.0%
2 Efficiency Performance Measures
(a) Direct Line Costs per Kilometre $3,089 $2,639 $2,536 $2,864 $1,884
(b) Indirect line costs per Consumer $90 $89 $92 $84 $118
1 Energy Delivery Efficiency Performance Measures
(a) Load Factor 56.3% 58.5% 56.1% 57.7% 55.0%
(b) Loss Ratio 5.08% 5.0% 5.8% 5.8% 2.5%
(c) Capacity Utilisation 36.3% 37.2% 36.8% 37.6% 39.0%
2 Statistics
(a) System Length Break Down in Kilometres
33kV 11 11 11 17 17
11kV 79 78 78 78 78
LV 154 153 151 147 146
Total 244 242 240 242 241
(b) Circuit Length of Overhead System in Kilometres
33kV 1 1 1 7 8
11kV 8 8 8 9 9
LV 26 27 28 25 25
Total 35 36 37 41 42
(c) Circuit Length of Underground System in Kilometres
33kV 10 10 10 10 10
11kV 71 70 69 69 68
LV 128 126 123 122 121
Total 209 206 202 201 199
(d) Transformer Capacity in kVA 85485 80920 81,005 79,100 78,190
(e) Maximum demand in kW 31,066 30120 29,800 29,767 30,470
(f) Total Electricity supplied from the System in kWh 153215839 154295704 146,420,659 150,532,170 146,924,719
(g) Total Electricity Conveyed through the System on behalf of each generator and retailer in kWh
Retailer A 91315743 98252944 98,433,829 110,038,068 116,967,198
Retailer B 28753864 23913677 21,734,016 20,725,835 17,346,953
Retailer C 22058579 20455452 15,066,831 8,381,913 3,294,004
Retailer D 2712092 3389660 1,961,175 1,969,082 2,723,393
Retailer E 592717 623124 474,878 1,219,138 3,049,344
(h) Total Consumers 8915 8876 8,735 8,614 8,575
Reliability Performance Measures
1 Number of interruption by class 2006 2005 2004 2003 2002
Class Description number of interruptions
A Transpower Planned - - - - -
B Nelson Electricity Planned 27 25 10 22 9
C Nelson Electricity Unplanned 4 13 7 13 7
D Transpower Unplanned 2 - - - -
E ECNZ Unplanned - - - - -
F Other Generation - - - - -
G Unplanned Other Line Owner - - - - -
H Planned Other Line Owner - - - - -
I Other - - - - -
Total 33 38 17 35 16
2/3 Interruption targets for the average of the next five years 2008-2011 2007
Class Description
(a) B Nelson Electricity Planned 25 25
(b) C Nelson Electricity Unplanned 8 8
4 Percentage of Class C interruptions not restored 2006 2005 2004 2003 2002
within:
% of total class interruptions
(a) Three hours 0 15.4% 5.9% 7.7% 14.0%
(b) 24 hours 0 0.0% 0.0% 0.0% 0.0%
5 Faults (Class C) per 100 kilometres
(a) Total number of faults per 100 km
Voltage 2006 2005 2004 2003 2002
33 kV 0 - - 11.5 -
11kV 5 16.6 9.1 14.0 3.9
Total 4.4 14.7 8.0 13.6 3.9
(b/c) Average total number of faults per 100 km for the next five years 2008-2011
Voltage average total number of faults per 100 kms each year over this period 2007
33 kV 3.8 3.8
11kV 3.8 3.8
Total 3.8 3.8
6 Faults (Class C) per 100 kilometres underground
Voltage 2006 2005 2004 2003 2002
33 kV 0 - - - -
11kV 4.2 15.7 7.2 8.7 2.9
Total 3.7 13.8 6.3 7.6 2.9
7 Faults (Class C) per 100 kilometres overhead
Voltage 2006 2005 2004 2003 2002
33 kV 0 - - 26.8 -
11kV 11.9 23.9 25.0 54.3 10.9
Total 11 22.1 22.2 42.0 10.9
8 SAIDI 2006 2005 2004 2003 2002
Customer Minutes 122 51.0 53.2 99.6 38.7
9/10 SAIDI target 2008-2011 2007
average SAIDI for each year over this period
(a) Class B 15.0 12.0
(b) Class C 30.0 28.0
11 SAIDI per interruption class 2006 2005 2004 2003 2002
Class Description customer minutes
A Transpower Planned 0 - - - -
B Nelson Electricity Planned 12.2 12.5 6.6 27.4 0.6
C Nelson Electricity Unplanned 10.1 38.6 46.6 72.1 38.1
D Transpower Unplanned 99.8 - - - -
E ECNZ Unplanned 0 - - - -
F Other Generation 0 - - - -
G Unplanned Other Line Owner 0 - - - -
H Planned Other Line Owner - - - - -
I Other - - - - -
12 SAIFI 2006 2005 2004 2003 2002
Total Interruptions 2.2 0.8 0.8 1.4 1.0
13/14 SAIFI target 2008-2011 2007
average SAIFI for each year over this period
(a) Class B Planned 0.3 0.3
(b) Class C Unplanned 0.6 0.6
15 SAIFI per interruption class 2006 2005 2004 2003 2002
Class Description customer minutes
A Transpower Planned 0 - - - -
B Nelson Electricity Planned 0.1 0.1 0.3 0.0 0.1
C Nelson Electricity Unplanned 0.2 0.8 0.5 1.0 1.7
D Transpower Unplanned 1.9 - - - -
E ECNZ Unplanned 0 - - - -
F Other Generation 0 - - - -
G Unplanned Other Line Owner 0 - - - -
H Planned Other Line Owner 0 - - - -
I Other 0 - - - -
16 CAIDI 2006 2005 2004 2003 2002
Customer minutes 54.8 61.1 70.7 69.6 40.5
17 CAIDI target 2008-2011 2007
average CAIDI for each year over this period
(a) Class B Planned 50.0 40.0
(b) Class C Unplanned 50.0 46.7
19 CAIDI per interruption class 2006 2005 2004 2003 2002
Class Description customer minutes
A Transpower Planned 0 - - - -
B Nelson Electricity Planned 161 142.3 23.4 171.1 134.5
C Nelson Electricity Unplanned 61.8 51.6 99.5 57.0 40.1
D Transpower Unplanned 50.2 - - - -
E ECNZ Unplanned 0 - - - -
F Other Generation 0 - - - -
G Unplanned Other Line Owner 0 - - - -
H Planned Other Line Owner - - - - -
I Other - - - - -
Deloitte
AUDITOR'S REPORT
TO THE READERS OF THE FINANCIAL STATEMENTS OF NELSON ELECTRICITY LIMITED LINES BUSINESS FOR THE YEAR ENDED 31 MARCH 2006
We have audited the accompanying financial statements of Nelson Electricity Limited Lines Business. The financial statements provide information about the past financial performance of Nelson Electricity Limited and its financial position as at 31 March 2006. This information is stated in accordance with the accounting policies set out on Page 4 and 5.
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 Nelson Electricity 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 Nelson Electricity 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 Nelson Electricity Limited.
Unqualified Opinion
We have obtained all the information and explanations we have required.
In our opinion:
· proper accounting records have been maintained by Nelson Electricity 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 Nelson Electricity Limited Lines Business' financial position as at 31 March 2006 and the results of its operations and cash flows for the year ended; and
c) comply with the Electricity (Information Disclosure) Requirements 2004.
Our audit was completed on 3 November 2006 and our unqualified opinion is expressed as at that date.
G. R. Mitchell
DELOITTE
APPOINTED AUDITOR
ON BEHALF OF THE AUDITOR-GENERAL
WELLINGTON, NEW ZEALAND
Deloitte
AUDITOR-GENERAL'S OPINION ON THE PERFORMANCE MEASURES OF NELSON ELECTRICITY 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 Nelson Electricity 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
Appointed Auditor
On behalf of the Auditor-General
Wellington, New Zealand
3 November 2006
Form 4
Requirement 31(1)
CERTIFICATION OF FINANCIAL STATEMENTS, PERFORMANCE
MEASURES, AND STATISTICS DISCLOSED BY DISCLOSING ENTITIES
(OTHER THAN TRANSPOWER)
We, David William Richard Dew and Kenneth John Forrest, directors of Nelson Electricity Limited certify that, having made all reasonable enquiry, to the best of our knowledge, -
(a) The attached audited financial statements of Nelson Electricity 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 Nelson Electricity 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 2006.
Signed:
D W R Dew
Signed:
K J Forrest
Date: 3 November 2006