INFORMATION FOR DISCLOSURE
PURSUANT TO SECTION 57T OF THE COMMERCE ACT 1986
ALPINE ENERGY 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 Alpine Energy Limited has been prepared in accordance with, and for the specific use intended under, the Electricity Information Disclosure Requirements 2004 (the Requirements).
The Requirements set out the information to be disclosed and the manner in which it is to be presented. The information should not be used for any other purpose than that intended under the requirements.
The financial information presented is for the line 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 Alpine Energy Limited Line Business for the period ended 31 March 2006 on pages 1 to 14.
For and on behalf of the Board of Directors
___________________________ _____________________________
Ian James Bowan Stephen Richard Thompson
9 November 2006
Alpine Energy Limited Lines Business
Statement of Financial Performance for the Year Ended 31 March 2006
REVENUE Note 2006 2005
$ $
Operating revenue
Revenue from line/access charges 26,644,166 24,814,466
Revenue from "Other" business for services carried out by the line business 0 0
Interest on cash, bank balances and short term investments 232,505 368,353
AC loss-rental rebates 1,391,624 674,140
Other revenue not listed above
Capital Contributions 2,183,347 1,305,259
Other 6,306 442
2,189,653 1,305,701
Total operating revenue 30,457,948 27,162,660
EXPENDITURE 2006 2005
Operating expenditure
Payment for transmission charges 8,480,826 8,533,892
Transfer payments to the "Other" business for
Asset maintenance 8 1,252,427 1,900,370
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 8 280,683 1,818,125
Total transfer payment to the "Other" business 1,533,110 3,718,495
Expense to entities that are not related parties for
Asset maintenance 8 176,172 30,209
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 176,172 30,209
Employee salaries, wages and redundancies 1,841,046 0
Consumer billing and information system expense 0 0
Depreciation on
System property, plant and equipment 4,195,242 3,610,155
Other property, plant and equipment 2,034 1,292
Total depreciation 4,197,276 3,611,447
Amortisation of
Goodwill 0 0
Other intangibles 0 0
Total amortisation of intangibles 0 0
Corporate and administration 231,900 120,437
Human resource expenses 22,085 0
Marketing/advertising 53,644 22,128
Merger and acquisition expenses 0 0
Takeover defense expenses 0 0
Research and development expenses 0 0
Consultancy and legal expenses 148,751 416,827
Donations 0 0
Alpine Energy Limited Line Business
Statement of Financial Performance for the Year Ended 31 March 2006 - Continued
Note 2006 2005
$ $
Directors' fees 119,788 90,460
Auditors' fees
Audit fees paid to principal auditors 27,805 18,000
Audit fees paid to other auditors 0 0
Fees paid for other services provided by principal and other auditors 42,006 28,704
Total auditors' fees 69,811 46,704
Costs of offering credit
Bad debts written off 0 0
Increase in estimated doubtful debts 0 0
Total cost of offering credit 0 0
Local authority rates expense 65,637 66,884
AC loss-rentals (distribution to retailers/customers) expense 0 0
Rebates to consumers due to ownership interest 0 0
Subvention payments 0 0
Unusual expenses 0 0
Other expenditure not listed above 138,710 125,891
Total operating expenditure 17,078,756 16,783,374
Operating surplus before interest and income tax 13,379,192 10,379,286
Interest expense
Interest expense on borrowings 0 0
Financing charges related to finance leases 0 0
Other interest expense 0 0
Total interest expense 0 0
Operating surplus before income tax 13,379,192 10,379,286
Income tax 2 5,080,114 4,186,206
Net surplus after tax 8,299,078 6,193,080
Statement of Movements in Equity for the Year Ended 31 March 2006
2006 2005
$ $
Equity at the Beginning of the Year 73,440,009 73,639,929
Net Surplus (Deficit) for the Period 8,299,078 6,193,080
Revaluation 0 0
Total Recognised Revenue and Expenses 8,299,078 6,193,080
Dividends Paid (6,984,435) (6,393,000)
Transfer on Disposal of Plant, Property and Equipment 0 0
Equity at the End of the Year 74,754,652 73,440,009
Alpine Energy Limited Lines Business
Statement of Financial Position as at 31 March 2006
Note 2006 2005
$ $
Current assets
Cash and bank balances 90,418 94,555
Short-term investments 2,700,000 3,000,000
Inventories 0 0
Accounts receivable 669,230 1,107,699
Other current assets 5,849 4,199
Total current assets 3,465,497 4,206,453
Fixed assets
System property, plant and equipment 85,247,000 83,077,000
Consumer billing and information system assets 0 0
Motor vehicles 0 0
Office equipment 0 0
Land and buildings 0 0
Capital works under construction (system fixed assets) 5,280,205 4,193,656
Other property, plant and equipment 0 0
Total fixed assets 90,527,205 87,270,656
Other tangible assets not listed above
Deferred tax 0 0
Total tangible assets 93,992,702 91,477,109
Intangible assets
Goodwill 0 0
Other intangibles 0 0
Total intangible assets 0 0
Total assets 93,992,702 91,477,109
Current liabilities
Bank overdraft 0 0
Short-term borrowings 0 0
Payables and accruals 1,858,303 2,211,489
Provision for dividends payable 0 0
Provision for income tax 1,145,845 939,729
Other current liabilities 0 0
Total current liabilities 3,004,148 3,151,218
Non-current liabilities
Payables and accruals 0 0
Borrowings 0 0
Deferred tax 2 16,233,902 14,885,882
Other non-current liabilities 0 0
Total non-current liabilities 16,233,902 14,885,882
Equity
Shareholders' equity
Share capital 26,596,000 26,596,000
Retained earnings 13,251,652 11,937,009
Reserves 3 34,907,000 34,907,000
Total Shareholders' equity 74,754,652 73,440,009
Minority interests in subsidiaries 0 0
Total equity 74,754,652 73,440,009
Capital notes 0 0
Total capital funds 74,754,652 73,440,009
Total equity and liabilities 93,992,702 91,477,109
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 30,894,767 27,222,304
Cash was disbursed to:
Payments to Suppliers and Employees (13,234,666) (12,845,653)
Income Tax (3,525,978) (3,018,379)
NET CASH FLOWS FROM OPERATING ACTIVITIES 7 14,134,123 11,358,272
CASH FLOWS FROM INVESTING ACTIVITIES
Cash was provided from:
Proceeds from sales of property, plant and equipment 0 0
Cash was applied to:
Purchase of Property, Plant and Equipment (7,453,825) (10,207,389)
NET CASH FLOWS FROM INVESTING ACTIVITIES (7,453,825) (10,207,389)
CASH FLOWS FROM FINANCING ACTIVITIES
Cash was applied to:
Dividend paid (6,984,435) (7,715,497)
Loan repaid 0 0
NET CASH FLOWS FROM FINANCING ACTIVITIES (6,984,435) (7,715,497)
NET INCREASE (DECREASE) IN CASH HELD (304,137) (6,564,614)
Add Opening Cash Brought Forward 3,094,555 9,659,169
ENDING CASH CARRIED FORWARD 2,790,418 3,094,555
Alpine Energy Limited Lines Business
Notes to and Forming Part of the Financial Statements
For the Year Ending 31 March 2006
1. Statement of Accounting Policies
These financial statements have been prepared for the purpose of complying with the requirements of the Electricity Information Disclosure Requirements 2004.
The financial information presented is for the line business activities of Alpine Energy Limited. There are also additional activities of the Company that are not required to be reported under the Requirements.
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.
a) 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
Dividend income is recognised in the period the dividend is declared.
Interest and rental income are accounted for as earned.
b) Customer Contributions
Contributions from customers, in relation to the construction of new lines for the network, and contributions from district councils towards the costs of replacing overhead lines with underground cables are accounted for as income in the year in which they are received.
c) Capital and Operating Expenditure
Capital expenditure relates to expenditure incurred in the creation of a new asset and expenditure incurred on existing reticulation system assets to the extent the system is enhanced.
Operating expenditure relates to expenditure which restores an asset closer to its original condition and includes expenditure incurred in maintaining and operating the fixed assets of the network.
d) Depreciation
Depreciation is charged as follows:
System Property, Plant and Equipment - straight line over useful life (from 10 to 80 years)
Buildings 1 to 2.5% of cost
Plant and Office Equipment 8 to 60% on diminishing value
Depreciation for taxation purposes recognises that:
- Additions to the network exclude any allocation of indirect costs.
- Only 80% of the book value of the Globo distribution system at 1 April 1987 is depreciated.
e) Taxation
The taxation charge is the estimated liability payable in respect of the accounting profit for the year, adjusted for non assessable income and non deductible costs and including any adjustments in respect of prior years.
f) Accounts Receivable
Accounts receivable are stated at estimated realisable value after making provision for doubtful debts. Bad debts are written off during the period in which they are identified.
g) Property, Plant and 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.
h) Financial Instruments
Financial instruments carried in the Statement of Financial Position include cash and bank balances, receivables and trade creditors. These instruments are generally carried at their estimated fair value.
i) Goods and Services Tax (GST)
The financial statements have been prepared on a GST exclusive basis except for Accounts Receivable and Accounts Payable.
j) Changes in Accounting Policies
There have been no changes in accounting policies. All policies have been applied on bases consistent with those used in previous years.
2. Taxation
2006$ 2005$
Income Tax Expense
Operating Surplus before Income Tax 13,379,192 10,379,286
Add/(Deduct):
Non Deductible Costs 4,197,276 3,611,447
Non Assessable Income (2,183,347) (1,305,259)
Timing Differences 0 0
Taxable Income 15,393,121 12,685,474
Taxation Charge @ 33% 5,080,114 4,186,206
Prior Year Over (Under) Provisions 0 0
Income Tax Expense 5,080,114 4,186,206
The income tax expense is represented by:
Current Taxation 3,732,094 3,039,169
Deferred Taxation 1,348,020 1,147,037
5,080,114 4,186,206
Deferred Income Tax Liability (Asset)
Balance at Beginning of Year 14,885,882 13,738,845
Current Year Timing Differences 1,348,020 1,147,037
Adjustment on Disposal of Business 0 0
Balance at End of Year 16,233,902 14,885,882
Taxation Liability (Asset)
Income Tax Expense 5,080,114 4,186,206
Add/(Deduct):
Deferred Tax (1,348,020) (1,147,037)
Income Tax Paid (3,525,978) (3,018,379)
Income Tax Liability at Beginning of Year 939,729 918,939
Provision for Tax 1,145,845 939,729
3. Reserves
2006$ 2005$
Asset Revaluation Reserve
Balance at Beginning of the Year 34,907,000 34,907,000
Net Revaluations 0 0
Transfer on Disposal of Property, Plant & Equipment 0 0
Balance at End of the Year 34,907,000 34,907,000
Alpine Energy Limited Lines Business
Notes to and Forming Part of the Financial Statements - Continued
For the Year Ending 31 March 2006
4. Contingent Liabilities
In respect of the business activities being reported on, the Company has no contingent liabilities as at 31 March 2006 (2005 nil).
5. Capital Commitments
In respect of the business activities being reported on, the Company has capital commitments amounting to $2,535,427 as at 31 March 2006 (2005 $1,578,344).
6. Financial Instruments
a) Concentration of Credit Risk
Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of bank deposits and accounts receivable. The maximum credit risk is the book value of these financial instruments, however the Company considers the risk of non recovery of these amounts to be minimal.
The Company places its cash and bank deposits with high credit quality financial institutions and limits the amount of credit exposure to any one financial institution.
The Company continually evaluates and monitors the credit quality of its customers. There is a concentration of credit risk in relation to activities with associated entities. This risk is managed indirectly through appointments to the governing bodies of these associated entities.
b) Fair Value
The carrying value of cash and bank deposits, accounts receivable and accounts payable is equivalent to their fair value.
7. Reconciliation Of Operating Surplus With Cash Flows From Operating Activities
2006$ 2005$
Operating Surplus After Income Tax 8,299,078 6,193,080
Add/ (Deduct) Non Cash Items
Depreciation 4,197,276 3,611,447
Deferred Tax 1,348,020 1,147,037
Goodwill
13,844,374 10,951,564
Add/ (Deduct) Movements in Working Capital
(Increase)/Decrease in Debtors 436,819 18,860
Increase/(Decrease) in Creditors (353,186) 367,058
Increase/(Decrease) in Provision for Tax 206,116 20,790
289,749 406,708
14,134,123 11,358,272
8. Related Party Transactions
Associated Entity: Networks South Limited (excl GST)
Networks South Limited is 50% owned by Alpine Energy Limited and provided administrative, engineering and planning functions for the network from 1 April 2004 to 31 March 2006. These services are charged on a fixed contract basis.
During the period, this charge totalled $336,072 (2005 $1,960,798). The outstanding amount as at 31 March 2006 was $2,048 (2005 $185,893) payable on normal commercial terms.
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 Regulations except 'Maintenance of Assets' which totalled $1,428,599 in 2006 (2005 $1,848,334).
Alpine Energy Limited Lines Business
Notes to and Forming Part of the Financial Statements - Continued
For the Year Ending 31 March 2006
Associated Entity: NetCon Limited (excl GST)
NetCon is wholly owned by Networks South Limited and provided asset maintenance and construction services for the network from 1 April 2004 to 31 March 2006. Services were charged on both a fixed price basis or 'time and materials' basis.
During the period, this charge totalled $8,540,876 (2005 $5,231,436). The outstanding amount as at 31 March 2006 was $777,165 (2005 $860,476) payable on normal commercial terms.
No debts were written off or forgiven and no transactions took place at nil or nominal value.
During the period capital construction transactions totalled the following:
2006 $ 2005$
Asset Construction:
Subtransmission assets 0 0
Zone Substations 725,760 385,089
Distribution Lines 3,575,120 1,826,500
Medium Voltage Switchgear 0 0
Distribution Transformers 631,594 42,787
Distribution Substations 138,240 72,790
Low Voltage lines 1,760,880 897,958
Other System Fixed Assets (as per the ODV Handbook) 0 0
Maintenance of Assets 1,428,599 1,848,334
Customer Connections and Disconnections 0 0
Other Goods and Services 280,683 157,978
Alpine Energy Limited Lines Business
Financial Performance Measures - 31 March 2006
2006 2005 2004 2003
Accounting return on funds 15.3% 12.1% 16.0% 17.5%
Accounting return on equity 11.5% 8.4% 10.3% 11.7%
Accounting return on investments 9.5% 7.2% 36.7% 12.1%
Efficiency Performance Measures - 31 March 2006
2006 2005 2004 2003
Direct line costs per kilometre $930 $993 $1,150 $992
Direct expenditure 3,550,328 3,748,704 4,290,866 3,670,939
System length (km) 3,816 3,775 3,730 3,701
Indirect line costs per consumer $29 $31 $23 $29
Indirect expenditure 850,326 889,331 655,219 809,694
Total consumers 29,163 28,697 28,409 28,248
Energy Delivery Efficiency Performance Measures - 31 March 2006
2006 2005 2004 2003
Load Factor (= a/b/c x 100) 68.8% 71.0% 69.5% 72.7%
a = kWh of electricity entering system 667,702,150 640,636,632 629,964,387 624,177,487
b = Maximum Demand (kW) 110,793 103,062 103,502 98,018
c = Total number of hours 8,760 8,760 8,760 8,760
Loss Ratio* (= a/b x 100) 6.4% 10.0% 6.4% 6.0%
a = Total Electricity lost in the Network (kWh) 41,790,473 64,179,267 40,280,103 37,625,216
b = Total Electricity entering the Network before losses (kWh) 667,702,150 640,636,632 629,964,387 624,177,487
Capacity Utilisation (= a/b x 100) 35.0% 33.8% 35.1% 34.6%
a = Maximum Demand (kW) 110,793 103,062 103,502 98,018
b = Transformer Capacity (kVA) 316,550 304,932 295,055 283,188
* Alpine Energy relies on the sales information reported by electricity retailers to calculate these amounts.
Alpine Energy Limited Lines Business
Network Statistics - 31 March 2006
2006 2005 2004 2003
Total System Length (kms) 33kV 213 203 189 189
22kV 146 146 146 146
11kV 2,866 2,841 2,815 2,788
6.6kV 8 8 8 8
230/400 V 583 577 572 570
Total 3,816 3,775 3,730 3,701
Overhead Circuit Length (kms) 33kV 183 183 183 183
22kV 145 145 145 145
11kV 2,634 2,624 2,603 2,585
6.6kV 8 0 0 0
230/400 V 326 330 332 333
Total 3,296 3,282 3,263 3,246
Underground Circuit Length (kms) 33kV 30 20 6 6
22kV 0.5 0.5 0.5 0.5
11kV 232 217 212 203
6.6kV 0 8 8 8
230/400 V 257 246.5 240 237
Total 520 492 467 455
Transformer Capacity (kVA) 316,550 304,932 295,055 283,188
Maximum Demand (kW) 110,793 103,062 103,502 98,018
Total Electricity entering the Network - before losses (kWh) Embed Generation 20,867,018 24,432,331 27,996,408 20,513,352
Import 646,835,132 616,204,301 601,967,979 603,664,135
Total 667,702,150 640,636,632 629,964,387 624,177,487
Amount of electricity supplied from the Network - after losses (kWh)* Retailer A 369,824,665 234,972,890 261,319,111 234,456,051
Retailer B 9,839,268 10,602,475 8,952,864 39,832,655
Retailer C 31,245,046 24,495,613 22,172,818 45,698,409
Retailer D 73,327,817 74,784,595 77,633,665 89,440,542
Retailer E 0 0 0 0
Retailer F 128,919,456 216,007,050 201,537,690 164,352,449
Retailer G 0 0 0 0
Export 12,755,425 15,594,742 18,068,136 12,772,164
Total 625,911,677 576,457,365 589,684,284 586,552,271
Total number of Consumers 29,163 28,697 28,409 28,248
*Alpine Energy relies on the sales information reported by electricity retailers to calculate these amounts.
Alpine Energy Limited Lines Business
Reliability and Performance Measures - Interruptions and Faults - 31 March 2006
Interruptions Class "2008/11
(Target)" "2007
(Target)" 2006 2005 2004 2003
Number of Interruptions
Planned Interruptions - Transpower Class A 1 1 0 2
Planned Interruptions - Alpine Class B 40 40 22 43 42 46
Unplanned Interruptions - Alpine Class C 80 80 83 81 90 65
Unplanned Interruptions - Transpower Class D 2 1 0 0
Class E - I 0 0 0 0
Total 108 126 132 113
Proportion of Total Class C Interruptions not restored:
Within 3 Hours 10% 10% 20% 21% 27% 37%
Within 24 Hours 1% 1% 2% 2% 9% 12%
Faults Voltage "2008/11
(Target)" "2007
(Target)" 2006 2005 2004 2003
Overall System
Faults per 100 circuit kilometres of prescribed voltage electric line 4.0 4.0 3.3 3.0 3.2 2.08
Faults per 100 circuit kilometres 33kV 1.0 1.0 0.5 1.0 1.1 0.53
22kV 0.0 0.0 15.1 0.7 0.7 0.00
11kV 3.0 3.0 3.0 3.2 3.4 2.30
6.6kV 0.0 0.0 0.0 0.0 0.0 0.00
Overhead
Faults per 100 circuit kilometres of prescribed voltage electric line 4.0 4.0 3.6 3.2 3.3 2.13
Faults per 100 circuit kilometres 33kV 1.0 1.0 0.5 1.1 1.1 0.55
22kV 0.0 0.0 15.2 0.7 0.7 0.00
11kV 3.0 3.0 3.2 3.4 3.6 2.36
6.6kV 0.0 0.0 0.0 0.0 0.0 0.00
Underground
Faults per 100 circuit kilometres of prescribed voltage electric line 1.0 1.0 0.8 0.8 1.3 1.38
Faults per 100 circuit kilometres 33kV 0.0 0.0 0.0 0.0 0.0 0.00
22kV 0.0 0.0 0.0 0.0 0.0 0.00
11kV 1.0 1.0 0.9 0.9 1.4 1.48
6.6kV 0.0 0.0 0.0 0.0 0.0 0.00
Alpine Energy Limited Lines Business
Reliability and Performance Measures
System Average Interruption Duration Index (SAIDI) - 31 March 2006
Class "2008/11
(Target)" "2007
(Target)" 2006 2005 2004 2003
SAIDI for total number of interruptions Overall 81 80 116 204
Class A 17 9 0 22
SAIDI for total number of interruptions within each interruption class (= a/b) Class B 15 15 8 12 12 20
Class C 66 66 50 57 103 162
Class D 5 2 0 0
Class E - I 0 0 0 0
Class A 510,026 262,560 0 609,600
a = sum of interruption duration factors for all interruptions within the particular interruption class Class B 240,000 240,000 239,831 339,577 350,995 570,856
Class C 1,500,000 1,500,000 1,459,270 1,630,077 2,935,049 4,580,897
Class D 142,774 51,508 0 0
Class E - I 0 0 0 0
b = Total Consumers 29,163 28,697 28,409 28,248
System Average Interruption Frequency Index (SAIFI) - 31 March 2006
Class "2008/11
(Target)" "2007
(Target)" 2006 2005 2004 2003
SAIFI for total number of interruptions Overall 1.3 1.0 1.6 1.1
Class A 0.0 0.0 0.0 0.1
SAIFI for total number of interruptions within each interruption class (= a/b) Class B 0.1 0.1 0.1 0.1 0.1 0.1
Class C 1.2 1.2 1.0 0.9 1.5 0.9
Class D 0.1 0.0 0.0 0.0
Class E - I 0.0 0.00 0.0 0.0
Class A 1,068 450 0 1,977
a = sum of electricity consumers affected by all interruptions Class B 3,600 2,640 3,930 3,390
Class C 29,000 24,700 41,406 25,988
Class D 3,900 907 0 0
Class E - I 0 0 0 0
b = Total Consumers 29,163 28,697 28,409 28,248
Connection Average Interruption Duration Index (CAIDI) - 31 March 2006
Class "2008/11
(Target)" "2007
(Target)" 2006 2005 2004 2003
CAIDI for total number of interruptions Overall 63 80 72 184
Class A 478 583 0 308
CAIDI for total number of interruptions within each interruption class (= a/b) Class B 85 85 67 129 89 168
Class C 62 62 50 66 71 176
Class D 37 57 0 0
Class E - I 0 0 0 0
Alpine Energy Limited (Lines)
Form for the Derivation of Financial Performance Measures from Financial Statements
Symbol ROF ROE ROI
Operating surplus before interest and income tax from financial statements 13,379,192
Operating surplus before interest and income tax adjusted pursuant to regulation 18 13,379,192
Interest on cash, bank balances, and short-term investments (ISTI) 232,505
OSBIIT minus ISTI 13,146,687 a 13,146,687 13,146,687
Net surplus after tax from financial statements 8,299,078
Net surplus after tax adjusted pursuant to regulation 18 (NSAT) 8,299,078 n 8,299,078
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) 4,195,242
Depreciation of SFA at ODV (y) 4,195,242
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 -76,727 q deduct -76,727
Revaluations 0 r add 0
Income tax 5,080,114 p deduct 5,080,114
Numerator 13,146,687 8,299,078 8,143,300
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) 87,270,656
Fixed assets at end of current financial year (FA1) 90,527,205
Adjusted net working capital at end of previous financial year (ANWC0) -1,099,591
Adjusted net working capital at end of current financial year (ANWC1) -1,183,224
Average total funds employed (ATFE) 87,757,523 c 87,757,523 87,757,523
Total equity at end of previous financial year (TE0) 73,440,009
Total equity at end of current financial year (TE1) 74,754,652
Average total equity 74,097,330 k 74,097,330
WUC at end of previous financial year (WUC0) 4,193,656
WUC at end of current financial year (WUC1) 5,280,205
Average total works under construction 4,736,931 e deduct 4,736,931 deduct 4,736,931 deduct 4,736,931
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 fixed assets at end of previous financial year at book value (SFAbv0) 83,077,000
System fixed assets at end of current financial year at book value (SFAbv1) 85,247,000
Average value of system fixed assets at book value 84,162,000 f deduct 84,162,000 deduct 84,162,000 deduct 84,162,000
System Fixed assets at year beginning at ODV value (SFAodv0) 85,666,845
System Fixed assets at end of current financial year at ODV value (SFAodv1) 88,581,603
Average value of system fixed assets at ODV value 87,124,224 h add 87,124,224 add 87,124,224 add 87,124,224
Denominator 85,982,817 72,322,624 85,982,817
ATFEADJ = c - e - f + h Ave TEADJ = k - e - m + v - f + h ATFEADJ = c - e - ½r - f + h
Financial Performance Measure: 15.29 11.48 9.47
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
Alpine Energy Limited (Lines)
Annual Valuation Reconciliation Report
2006 2005
$ $
System Property, Plant & Equipment at ODV (start of period) 85,666,845 81,784,000
Add System Property, Plant & Equipment acquired during the period at ODV 7,110,000 7,493,000
Less System Property, Plant & Equipment disposed of during the period at ODV 0 0
Less depreciation on System Property, Plant & Equipment at ODV (4,195,242) (3,610,155)
Add revaluations of System Property, Plant & Equipment 0 0
Gives System Property, Plant & Equipment at ODV (end of period) 88,581,603 85,666,845
Valuation of the Network Reticulation System
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 (as shown) following a comprehensive audit.
Explanation of Terms
General
km kilometres
kV kilovolts
kVA kilovolt amperes
kW kilowatts
kWh kilowatt hours (also referred to as units)
ODV Optimised Deprival Valuation
GXP Grid Exit Point
Network Statistics
Generation Electricity provided by embedded generation from Opuha Dam.
Import Electricity supplied to the Network from Transpower's Network.
Export Electricity supplied to Transpower's Network from the Network at Albury GXP due to a surplus of embedded generation over demand.
Reliability and Performance Measures
Class A planned interruptions by Transpower.
Class B planned interruptions by Alpine Energy.
Class C unplanned interruptions by Alpine Energy.
Class D unplanned interruptions by Transpower.
Class E unplanned interruptions on 'generation' lines used by Alpine Energy.
Class F unplanned interruptions on 'generation' lines used by another line owner.
Class G unplanned interruptions caused by another line owner.
Class H planned interruptions caused by another line owner.
Class I an interruption not referred to in Classes A to H.
Certificate of Financial Statements, Performance Measures, and Statistics Disclosed by Line Owners other than Transpower
We, Ian James Bowan and Stephen Richard Thompson, Directors of Alpine Energy Limited certify that, having made reasonable enquiry, to the best of our knowledge,
(a) the attached audited financial statements of Alpine Energy Limited prepared for the purposes of regulation 6 of the Commerce Commissions 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, energy delivery efficiency performance measures, statistics, and reliability performance measures in relation to Alpine Energy Limited, and having been prepared for the purpose of regulations 14, 15, 20, and 21 of the Electricity Information Disclosure Requirements 2004 comply with the requirements of those regulations.
The valuations on which those financial performance measures are based are as at 31 March 2004.
___________________________ _____________________________
Ian James Bowan Stephen Richard Thompson
9 November 2006
Certification of Valuation Report of Line Owners
We, Ian James Bowan and Stephen Richard Thompson, Directors of Alpine Energy Limited certify that, having made reasonable enquiry, to the best of our knowledge,
(a) the attached valuation report of Alpine Energy Limited, prepared for the purposes of regulation 19 of the Commerce Commissions Electricity Information Disclosure Requirements 2004, complies with the requirements of that regulation; and
(b) the replacement cost of the line business system fixed assets of Alpine Energy is $150,206,545; and
(c) The depreciated replacement cost of the line business system fixed assets of Alpine Energy is $67,234,737; and
(d) The optimised depreciated replacement cost of the line business system fixed assets of Alpine Energy is $66,782,851; and
(e) The optimised deprival valuation of the line business system fixed assets of Alpine Energy is $66,782,851; and
(f) The values in paragraphs (b) through to (e) have been prepared in accordance with the ODV Handbook.
These valuations are as at 31 March 2004.

___________________________ _____________________________
Ian James Bowan Stephen Richard Thompson
9 November 2006
PRICEWATERHOUSE COOPERS
REPORT OF THE AUDITOR-GENERAL
TO THE READERS OF THE FINANCIAL STATEMENTS OF ALPINE ENERGY LIMTED - LINES BUSINESS FOR THE YEAR ENDED 31 MARCH 2006
We have audited the financial statements of Alpine Energy Limited - Lines Business on pages 1 to 8. The financial statements provide information about the past financial performance of Alpine Energy 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 Alpine Energy 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 Robert Harris 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 Alpine Energy 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 Alpine Energy Limited.
Unqualified Opinion
We have obtained all the information and explanations we have required.
In our opinion -
- proper accounting records have been maintained by Alpine Energy Limited - Lines Business as far as appears from our examination of those records; and
- the financial statements of Alpine Energy 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 Alpine Energy 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 9 November 2006 and our unqualified opinion is expressed as at that date.
Robert Harris
PricewaterhouseCoopers
On behalf of the Auditor-General
Christchurch, New Zealand
PRICEWATERHOUSE COOPERS
AUDITOR-GENERAL'S OPINION ON THE PERFORMANCE MEASURES OF ALPINE ENERGY 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 Alpine Energy Limited - Lines Business and dated 9 November 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.
Robert Harris
PricewaterhouseCoopers
On behalf of the Auditor-General
Christchurch, New Zealand
9 November 2006