INFORMATION FOR DISCLOSURE
PURSUANT TO SECTION 57T OF THE COMMERCE ACT 1986
Certification of Financial Statements, Performance Measures,
and Statistics Disclosed by Disclosing Entitles (other than Transpower).
We, Diane Reed and Richard Francis, Directors of Waipa Networks Limited certify that, having made all reasonable enquiry, to the best of our knowledge -
(a) The attached audited financial statements of Waipa Networks Limited prepared for the purposes of regulation 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 Waipa Networks Limited, and having been prepared for the purposes of regulations 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 as at 31 March 2005.
Dated this 24th day of October 2006.
D M Reed R T Francis
Director Director
WAIPA NETWORKS LIMITED - LINES BUSINESS
STATEMENT OF FINANCIAL PERFORMANCE
FOR THE YEAR ENDED 31 MARCH 2006
Note 2006 2005
$ $
Revenue 15,826,928 13,674,028
Less Discounts 4,085,537 3,499,150
Net Revenue 11,741,391 10,174,878
Net Operating Surplus Before Taxation 2 942,536 716,713
Less Taxation Expense 3 151,855 78,997
Net Surplus 790,681 637,716
STATEMENT OF MOVEMENTS IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2006
2006 2005
$ $
Equity as at 1 April 51,964,826 41,673,046
Net Surplus 790,681 637,716

Revaluation of Assets 5 - 9,654,064
Total Recognised Revenue and Expenses for the Year 790,681 10,291,780

Equity as at 31 March 52,755,507 51,964,826
The accompanying notes form part of these financial statements.
STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2006
Note 2006 2005
$ $
EQUITY
Share capital 4 - -
Reserves 5 44,516,299 44,516,299
Retained earnings 6 8,239,208 7,448,527
TOTAL EQUITY 52,755,507 51,964,826
Represented By:
CURRENT ASSETS
Cash and Bank 154,719 299,244
Short term investments - -
Receivables and prepayments 7 1,224,294 1,308,143
Tax refund due 43,119 16,532
Inventories 392,844 368,446
1,814,976 1,992,365
NON - CURRENT ASSETS
Property, Plant and Equipment 9 60,784,458 58,774,792
TOTAL ASSETS 62,599,434 60,767,157
CURRENT LIABILITIES
Creditors 8 813,900 775,073
NON - CURRENT LIABILITIES
Employee entitlements 30,027 27,258
Term Liabilities 10 9,000,000 8,000,000
TOTAL LIABILITIES 9,843,927 8,802,331
NET ASSETS 52,755,507 51,964,826
For and on behalf of the Board
D M Reed Director R T Francis Director
24 October 2006 24 October 2006
The accompanying notes form part of these financial statements.
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 9,422,913 8,976,357
Interest received 18,438 30,487
Net GST 27,392 14,511
9,468,743 9,021,355
Cash was disbursed to:
Payments to suppliers and employees 7,136,971 6,905,977
Interest Paid 816,000 796,000
Taxes paid 178,442 (5,794)
8,131,413 7,696,183
Net cash flows from operating activities 15 1,337,330 1,325,172
CASH FLOWS FROM INVESTING ACTIVITIES
Cash was provided from:
Proceeds from sale of assets 29,021 8,164
Capital Contributions 1,120,560 851,615
1,149,581 859,779
Cash was applied to:
Purchase of assets 3,631,436 2,846,371
3,631,436 2,846,371
Net cash flows from investing activities (2,481,855) (1,986,592)
CASH FLOW FROM FINANCING ACTIVITIES
Cash was provided from:
Increase in term liabilities 1,000,000 -
Net cash flows from financing activities 1,000,000 -
Net decrease in cash held (144,525) (661,420)
Add opening cash brought forward 299,244 960,664
Ending cash carried forward 154,719 299,244
CASH BALANCES IN THE STATEMENT OF
FINANCIAL POSITION
Cash and Bank 154,719 299,244
The accompanying notes form part of these financial statements.
NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2006
1 STATEMENT OF ACCOUNTING POLICIES
Reporting Entity
Waipa Networks Limited is a company registered under the Companies Act 1993. The financial statements have been prepared for the purpose of complying with the requirements of the Commerce Commission's Electricity Information Disclosure Requirements 2004.
Measurement Basis
The general accounting polices recognised as appropriate for the measurement and reporting of performance, cash flows and financial position under the historical cost method, as modified by the revaluation of certain assets, have been followed in the preparation of these financial statements.
Accounting Policies
The following accounting policies which materially affect the measurement of profit and the financial position have been applied:
a) Network Charges
Income from Network charges includes an estimated amount for accrued sales from meters unread as at 31 March 2006.
b) Property, Plant and Equipment
"The Line Business has five classes of Property, Plant and Equipment as follows:
Freehold Land
Freehold Buildings
Reticulation Assets
Motor Vehicles
Plant, Furniture & Fittings
The Reticulation Assets were revalued on an optimised depreciated replacement cost basis by independent valuers on 31 March 2004 and subsequently will be revalued at least every 3 years. Additions to the Reticulation Assets since revaluation are stated at cost.
Assets constructed by the line business are capitalised at direct cost plus a proportion of indirect overheads.
All other Property, Plant and Equipment are recorded at cost less accumulated depreciation."
c) Capital Contributions
Contributions towards the cost of additions to the Reticulation Assets are recognised as income when received.
d) Depreciation
"Land is not depreciated. Depreciation has been provided on other Property, Plant and Equipment using the straight line method at rates which amortise the cost or valuation less estimated residual value over their economic lives.
Depreciation on assets purchased during the year has been charged on a monthly basis from month of purchase."
"Buildings
Reticulation Assets
Motor Vehicles
Computers Equipment & Software
Plant, Furniture & Fittings " 3.0%
2.5%
20.0%
20.0%
10.0%
e) Receivables
Receivables are stated at their estimated realisable value after adequate provision for doubtful debts. Bad debts are written off in the period they are identified.
f) Income Tax
"The income tax expense charged to the Statement of Financial Performance includes both current and deferred tax. Deferred tax is calculated using the liability method, and is accounted for using the partial basis.
A debit balance in the deferred tax account, arising from timing differences or income tax benefits from income tax losses, is only recognised if there is virtual certainty of realisation."
g) Inventories
"Inventories are stated at the lower of weighted average cost and net realisable value.
Cost of work in progress and finished goods includes the cost of direct material, direct labour and a proportion of the manufacturing overhead expended in putting the inventories in their present location and condition."
h) Financial Instruments
"The Line Business includes all financial instrument arrangements in the statement of financial position using the concepts of accrual accounting. These instruments arise as a result of everyday operations and include: cash, receivables, creditors and investments.
Revenues and expenses in relation to all financial instruments are recognised in the statement of financial performance. Financial instruments are shown at their fair values. "
i) Employee entitlements
Provision is made in respect of the Line Businesses liability for annual leave, long service leave and retirement gratuities. Where the qualifying criteria has been met these have been calculated on an actual entitlement basis at current rates of pay. Further provision has been made for long service and retirement gratuities where the qualifying criteria has not yet been met, bringing to account what is likely to be payable in the future in respect of service that employees have accumulated up until the 31 March 2006
CHANGES IN ACCOUNTING POLICIES
There have been no changes in accounting policies. All policies have been consistently applied during the year.
2006 2005
$ $
2 NET SURPLUS BEFORE TAXATION
After Charging:
Direct Expenditure 2,679,050 2,108,683
Audit fees for these financial statements 5,880 5,960
Audit fees for other Company financial statements 36,195 29,480
Directors' fees 125,184 123,181
Electricity Reform Costs 23,595 14,513
Other Indirect expenditure 1,209,173 1,092,855
Depreciation 1,578,049 1,520,220
Buildings 11,517 11,484
Reticulation Assets 1,497,378 1,439,386
Motor Vehicles 29,794 28,354
Plant, Furniture and Fittings 39,360 40,996
Net Gain on Disposal of Assets (13,295) (4,725)
Interest Paid 816,000 796,000
After Crediting:
Interest Received 15,821 33,073
2006 2005
$ $
3 TAXATION
Net surplus before taxation 942,536 716,713
Prima facie taxation at 33% 311,037 236,515
Plus Tax effect of permanent differences 494,135 474,997
Less Tax effect of timing differences not Recognised (653,317) (632,515)
Total Taxation Expense 151,855 78,997

The Taxation charge comprises:
- current taxation 151,855 78,997
- deferred taxation - -
151,855 78,997
A deferred tax liability of $4,910,331 (2005 $4,076,136), has not been recognised. This liability
primarily relates to asset revaluations of the reticulation assets which would only crystallise on
disposal.
Imputation credit memorandum account.
Balance at the beginning of the year 1,659,269 1,665,063
Dividends Allocated - -
Taxation paid 178,442 (5,794)
Balance at end of year 1,837,711 1,659,269
4 SHARE CAPITAL
Balance at end of year - -
At 31 March 2006 the company has 6,800,000 fully paid issued shares.
All shares carry equal voting rights and share in any surplus on winding up of the company equally.
None of the shares carry fixed dividend rights.
2006 2005
$ $
5 REVALUATION OF ASSETS RESERVE
Revaluation of Assets Reserve
Balance at beginning of year 44,516,299 34,862,235
Asset Revaluation Reticulation - 9,654,064
Balance at end of year 44,516,299 44,516,299
6 RETAINED EARNINGS
Balance at beginning of year 7,448,527 6,810,811
Net Surplus after Taxation 790,681 637,716
Balance at end of year 8,239,208 7,448,527
7 RECEIVABLES
Trade debtors 1,179,547 1,260,112
Accrued Interest Income 50 2,667
Prepayments 44,697 45,364
1,224,294 1,308,143
8 CREDITORS
Accounts payable and accruals - trade 711,488 679,130
Employee entitlements 98,475 93,579
Payables to Directors 3,937 2,364
813,900 775,073
2006 2005
$ $
9 PROPERTY, PLANT AND EQUIPMENT
Freehold Land
Cost 1,610 1,610
Freehold Buildings
Cost 895,861 895,861
Accumulated Depreciation 205,054 193,788
Net Book Value 690,807 702,073
Reticulation Assets
Cost - additions since 1 April 2004 6,239,937 2,725,734
Valuation 56,540,820 56,540,820
62,780,757 59,266,554
Accumulated Depreciation at cost 108,567 25,531
Accumulated Depreciation at valuation 2,827,041 1,413,521
Net Book Value 59,845,149 57,827,502
Motor Vehicles
Cost 166,936 166,594
Accumulated Depreciation 49,889 45,681
Net Book Value 117,047 120,913
Plant, Furniture and Fittings
Cost 1,276,829 1,209,258
Accumulated Depreciation 1,146,984 1,086,564
Net Book Value 129,845 122,694
Total Net Book Value 60,784,458 58,774,792
The Reticulation Assets were revalued by E W Graham, B.E. (Elect), F.I.P.E.N.Z. and PricewaterhouseCoopers on 31 March 2004 to a value of $56,540,820 on a optimised depreciated replacement cost basis.
The fair value of Land and Buildings is assessed at $980,000 based on a valuation by Quotable Value New Zealand as at 1 September 2005 for GV purposes.
2006 2005
$ $
10 TERM LIABILITIES
Inter-business Loan - Other Business (9.25%) 9,000,000 8,000,000
Repayable between 2 and 5 years.
11 FINANCIAL INSTRUMENTS
Credit Risk
In the normal course of it's business, Waipa Networks incurs credit risk from trade receivables from customers. Waipa Networks largest customer accounts for 52% (2005 55%) of total sales and 92% (2005 80%) of trade receivables at balance date for which a bank performance bond is held. There are no other significant concentrations of credit risk and Waipa Networks generally does not require any collateral.
Waipa Networks places its cash and short term deposits with high credit quality financial institutions with a recognised credit rating of A- or better and limits the amount of credit exposure to any one institution, as set forth by the Board of Directors. While the company may be subject to credit losses up to the contract amounts in the event of non-performance by other parties, it does not expect such losses to occur.
Currency Risk
Waipa Networks has no exposure to currency risk.
Interest Rate Risk
Waipa Networks has no significant exposure to interest rate risk as its term loan has fixed interest rates. The interest rate on the term loan is disclosed in note 10.
Fair Value
The estimated fair value of Waipa Networks financial instruments at 31 March 2006 are stated in the Statement of Financial Position.
12 CONTINGENT LIABILITIES AND CAPITAL COMMITMENTS
There are no contingent liabilities as at 31 March 2006 (2005 Nil);
There are no commitments for future capital expenditure as at 31 March 2006 (2005 Nil).
13 SEGMENTAL REPORTING
Waipa Networks operates predominantly in one industry, distribution of electricity. All operations
are carried out within New Zealand, and are therefore within one geographical segment for reporting
purposes.
14 RELATED PARTIES
At balance date, the Waipa Networks Trust held 100 per cent of the shares in Waipa Networks Limited
All related party transactions in the accounts of Waipa Networks have been conducted on a
commercial and arms length basis.
The contracting department of Waipa Networks has provided the following services at cost, including overheads, for the year ended 31 March 2006
2006 2005
Construction of distribution lines & cables 1,276,026 919,640
Construction of medium voltage switchgear 679,939 544,466
Construction of distribution transformers 728,884 557,739
Construction of distribution substations 354,416 235,251
Construction of low voltage lines and cables 317,808 262,153
Construction of other system fixed assets 157,130 206,485
Maintenance of assets 1,689,973 1,299,478
Consumer connections and reconnections 8,533 6,636
Other services 46,244 50,877
The following transactions occurred between the line business and other business.
Interest paid to Other 816,000 796,000
The line business has a loan from the other business refer note 10.
The amount outstanding at balance date was $9,000,000 (2005 $8,000,000).
At year end there were no other outstanding balances for related parties (2005 Nil).
No related party debt has been written off or forgiven during 2006 or 2005.
No provision has been made in the accounts for payment of a final dividend to the Waipa Networks
Trust. (2005 Nil). No Interim dividends have been paid (2005 Nil).
2006 2005
$ $
15 RECONCILIATION OF NET SURPLUS TO NET CASH FLOW FROM
OPERATING ACTIVITIES
Reported Net Surplus after tax 790,681 637,716
Add (Less) Non Cash Items:
Depreciation 1,578,049 1,520,220
Increase in Non-current Liabilities Leave Provisions 2,769 5,325
2,371,499 2,163,261
Add (Less) Movements in Working Capital Items
Decrease (Increase) in Tax Receivable (26,587) 84,791
Decrease (Increase) in Receivables 83,849 (80,714)
Increase in Inventories (24,398) (123,881)
Decrease in Accounts Payable 33,931 109,998
Increase in Leave Provisions 4,896 18,922
71,691 9,116
2,443,190 2,172,377
Add (Less) Items Classified as Investing Activities
Net Loss (Gain) on Disposal of Assets (13,295) (4,725)
Increase in Creditors for Property, Plant and Equipment 27,995 9,135
Capital Contributions (1,120,560) (851,615)
(1,105,860) (847,205)
Net Cash Inflows from Operating Activities 1,337,330 1,325,172
16 ODV RECONCILIATION REPORT
System fixed assets at ODV at beginning of year 58,537,486 56,540,820
Add system fixed assets acquired during the year at ODV 3,651,239 4,178,664
Less system fixed assets disposed of during the year at ODV 73,343 146,118
Less depreciation system fixed assets at ODV 2,167,219 2,035,880
Add revaluations of system fixed assets - -
System fixed assets at ODV at end of year 59,948,163 58,537,486
17 Disclosure of Information to be Disclosed in Financial Statements under regulation 6 of the Electricity (Information Disclosure) Regulations 1999 Schedule 1 Part 2 as amended by the Electricity (Information Disclosure) Amendment Regulations 2000.
2006 2005
$ $
Statement of Financial Position Disclosure (Schedule 1, Part 2)
1 Current Assets
(a) Cash and Bank balances 154,719 299,244
(b) Short-term investments - -
(c) Inventories 392,844 368,446
(d) Accounts receivable 1,179,547 1,260,112
(e) Other currents assets not listed in (a) to (d) 87,866 64,563
(f) Total current assets 1,814,976 1,992,365
2 Fixed Assets
(a) System fixed assets 59,845,149 57,827,502
(b) Customer billing and information system assets 71,564 53,409
(c) Motor vehicles 117,047 120,913
(d) Office Equipment 58,281 69,285
(e) Land & Buildings 692,417 703,683
(f) Capital works under construction - -
(g) Other fixed assets not listed in (a) to (f) - -
(h) Total fixed assets 60,784,458 58,774,792
3 Other tangible assets not listed above - -
4 Total tangible assets 62,599,434 60,767,157
5 Intangible assets
(a) Goodwill - -
(b) Other intangible not listed in (a) - -
(c) Total intangible assets - -
6 Total Assets 62,599,434 60,767,157
7 Current Liabilities
(a) Bank Overdraft - -
(b) Short-term borrowings - -
(c) Payables and accruals 813,900 775,073
(d) Provision for dividend payable - -
(e) Provision for income tax - -
(f) Other Current Liabilities not listed in (a) to (e) - -
(g) Total Current Liabilities 813,900 775,073
8 Non-current liabilities
(a) Payables and accruals 30,027 27,258
(b) Borrowings 9,000,000 8,000,000
(c) Deferred tax - -
(d) Other Non-current Liabilities not listed in (a) to (c) - -
(e) Total Non-current Liabilities 9,030,027 8,027,258
2006 2005
$ $
9 Equity
(a) Shareholders' equity
(i) Share Capital - -
(ii) Retained Earnings 8,239,208 7,448,527
(iii) Reserves 44,516,299 44,516,299
(iv) Total Shareholders' equity 52,755,507 51,964,826
(b) Minority interests in subsidiaries - -
(c) Total Equity 52,755,507 51,964,826
(d) Capital notes - -
(e) Total capital funds 52,755,507 51,964,826
10 Total equity and liabilities 62,599,434 60,767,157
Statement of Financial Performance Disclosure (Schedule 1, Part 2)
11 Operating revenue
(a) Revenue from line/access charges 9,973,679 9,057,021
(b) Revenue from "Other" business (transfer payment) - -
(c) Income from interest on bank & short-term investments 15,821 33,073
(d) AC loss-rental rebates 631,331 233,169
(e) Other operating revenue not listed in (a) to (d) 1,120,560 851,615
(f) Total operating revenue 11,741,391 10,174,878
12 Operating expenditure
(a) Transmission Charges 3,707,693 3,771,997
(b) Transfer payments to "Other " business -
(i) Asset maintenance 1,689,973 1,299,478
(ii) Consumer disconnections and reconnections 8,533 6,636
(iii) Meter data - -
(iv) Consumer-based load control 46,244 50,877
(v) Royalty and patent expenses - -
(vi) Avoided transmission charges for own generation - -
(vii) Other goods & services not listed in (i) to (vi) above - -
(viii) Total transfer payment to the "Other" business 1,744,750 1,356,991
(c) Payments to non-related entities
(i) Asset maintenance 480,099 303,432
(ii) Consumer disconnections and reconnections - -
(iii) Meter data - -
(iv) Consumer-based load control - -
(v) Royalty and patent expenses - -
(vi) Total of specified expenses to non-related parties 480,099 303,432
(d) Employee salaries, wages and redundancies 916,867 861,950
(e) Consumer billing and information system expense 46,093 40,759
(f) Depreciation on
(i) System fixed assets 1,497,378 1,439,386
(ii) Other assets not listed in (i) 80,671 80,834
(iii) Total depreciation expense 1,578,049 1,520,220
2006 2005
$ $
(g) Amortisation of
(i) Goodwill - -
(ii) Other intangibles - -
(iii) Total amortisation of intangibles - -
(h) Corporate and administration 204,941 197,626
(i) Human resource expenses 58,657 48,856
(j) Marketing and advertising 143,199 88,087
(k) Merger and acquisition expenses - -
(l) Takeover defence expenses - -
(m) Research and development expenses - -
(n) Consultancy and legal expenses 43,598 61,077
(o) Donations - -
(p) Directors fees 125,184 123,181
(q) Audit fees
(i) Audit fees paid to principal auditors 42,075 35,440
(ii) Audit fees paid to other auditors - -
(iii) Fees paid for other services provided by auditors - -
(iv) Total auditors fees 42,075 35,440
(r) Costs of offering credit
(i) Bad debts written off - -
(ii) Increase in estimated doubtful debts - -
(iii) Total costs of offering credit - -
(s) Local authority rates 79,026 83,527
(t) AC loss-rental (distribution of) expense 631,331 -
(u) Rebates to customers due to ownership interest - -
(v) Subvention payments - -
(w) Unusual expenses - -
(x) Other expenditure not listed in (a) to (w) 181,293 169,022
13 Total operating expenditure 9,982,855 8,662,165
14 Operating surplus before interest and income tax 1,758,536 1,512,713
15 Interest
(a) Interest expense on borrowings 816,000 796,000
(b) Financing charges related to finance leases - -
(c) Other interest expense - -
(d) Total interest expense 816,000 796,000
16 Operating surplus before income tax 942,536 716,713
17 Income Tax 151,855 78,997
18 Net surplus after tax 790,681 637,716
WAIPA NETWORKS LIMITED - LINES BUSINESS
2006 2005 2004 2003
18 PERFORMANCE MEASURES
Disclosure of financial performance measures and efficiency performance measures.
1. Financial performance measures
(a) Return on funds 1.76% 1.49% 2.93% 2.94%
(b) Return on equity 0.23% 0.08% 1.23% 0.93%
(c) Return on investment 1.08% 0.93% 22.73% 1.90%
2. Efficiency performance measures:
(a) Direct line costs per kilometre $1,370 $1,046 $1,005 $1,090
Direct Expenditure $2,679,050 $2,108,683 $1,911,216 $1,927,280
System Length 1,955 2,015 1,902 1,768
(b) Indirect line costs per electricity customer $65 $60 $55 $54
Indirect Expenditure $1,400,027 $1,265,989 $1,151,534 $1,107,857
Total consumers 21,538 21,107 20,773 20,510
Disclosure of energy delivery efficiency performance measures.
1. Energy Delivery efficiency performance measures:
(a) Load factor (=a/b*c*100) 65.38 63.09 64.98 66.79
a = kWh of electricity entering system 336,382,834 334,710,530 323,352,769 323,000,166
b = Maximum demand 58,732 60,560 56,808 55,206
c = Total number of hours in year 8,760 8,760 8,760 8,760
(b) Loss ratio (=a/b*100) 6.31 6.30 6.23 6.23
a = losses in electricity in kWh 21,223,522 21,077,483 20,134,172 20,113,092
b = kWh of electricity entering system 336,382,834 334,710,530 323,352,769 323,000,166
(c) Capacity utilisation (=a/b*100) 31.84 34.28 33.43 33.51
a = Maximum demand 58,732 60,560 56,808 55,206
b = Transformer Capacity 184,434 176,646 169,941 164,753
2. Statistics
(a) System Length
Circuit Kilometres >11kV 0 0 0 0
Circuit Kilometres 11kV 1,294 1,336 1,307 1,326
Circuit Kilometres 400V 661 679 595 442
Total 1,955 2,015 1,902 1,768
(b) System Length - Overhead
Circuit Kilometres >11kV 0 0 0 0
Circuit Kilometres 11kV 1,228 1,281 1,254 1,291
Circuit Kilometres 400V 495 538 475 361
Total Overhead 1,723 1,819 1,729 1,652
(c) System Length - Underground
Circuit Kilometres >11kV 0 0 0 0
Circuit Kilometres 11kV 66 55 53 35
Circuit Kilometres 400V 166 141 120 81
Total Underground 232 196 173 116
(d) Transformer Capacity (In Kilovolt Amperes) 184,434 176,646 169,941 164,753
(e) Maximum Demand 58,732 60,560 56,808 55,206
(f) Total electricity entering the system 336,382,834 334,710,530 323,352,769 323,000,166
before losses (in Kilowatt Hours)
(g) Electricity conveyed from the system
after losses for each retailer.
Retailer 1 164,253,756 175,665,524 181,228,143 201,619,872
Retailer 2 28,787,574 23,615,904 17,486,319 8,937,740
Retailer 3 60,369,241 61,110,325 67,541,673 75,576,369
Retailer 4 1,474,085 490,550 417,203 334,276
Retailer 5 33,846,877 30,694,705 18,651,418 5,605,676
Retailer 6 8,799,213 8,723,945 9,648,851 8,962,294
Retailer 7 17,587,046 13,332,094 8,244,990 1,850,847
Retailer 8 41,520 0 0 0
315,159,312 313,633,047 303,218,597 302,887,074
(h) Total Customers 21,538 21,107 20,773 20,510
Disclosure of reliability performance measures.
1 Total number of interruptions
Class A - Planned - by Transpower 0 0 1 0
Class B - Planned - by Waipa Networks 51 38 50 122
Class C - Unplanned - by Waipa Networks 109 131 133 111
Class D - Unplanned - by Transpower 3 4 1 1
Class E - Unplanned - by Line Owner generator 0 0 0 0
Class F - Unplanned - by other generation 0 0 0 0
Class G - Unplanned - by another line owner 1 1 2 3
Class H - Planned - by another line owner 0 0 0 0
Class I - Any other loss of supply 0 0 0 0
Total 164 174 187 237
2 Interruption targets for 2006 / 2007
Class B - Planned - by Waipa Networks 75
Class C - Unplanned - by Waipa Networks 103
3 Average interruption targets for 2006 / 2007 to 2010 / 2011 years
Class B - Planned - by Waipa Networks 66
Class C - Unplanned - by Waipa Networks 98
4 Proportion of Class C interruptions not restored within: (=a/b*100)
3 Hours 31% 26% 29% 23%
a = number of interruptions not restored 34 34 39 25
within 3 hours
b = Total number of Class C interruptions 109 131 133 111
24 Hours 1% 0% 1% 0%
a = number of interruptions not restored 1 0 1 0
within 24 hours
b = Total number of Class C interruptions 109 131 133 111
5 (a) The total number of faults per 100 circuit kilometres of prescribed voltage electric line
11kV 8.42 9.81 10.18 8.37
(b) Target for 2006 / 2007 year
11kV 7.96
(c) Average Target for 2006 / 2007 to 2010 / 2011 years
11kV 7.57
6 The total number of faults per 100 circuit kilometres of underground prescribed voltage
electric line
11kV 3.03 5.45 0.00 0.00
7 The total number of faults per 100 circuit kilometres of overhead prescribed voltage
electric line
11kV 8.71 9.99 10.61 8.60
8 The SAIDI for the total number of interruptions 176.23 278.74 491.04 247.32
9 SAIDI targets for 2006 / 2007
Class B - Planned - by Waipa Networks 38
Class C - Unplanned - by Waipa Networks 168
10 Average SAIDI target for 2006 / 2007 to 2010 / 2011 years
Class B - Planned - by Waipa Networks 34
Class C - Unplanned - by Waipa Networks 154
11 The SAIDI for the total number of interruptions within each interruption class
Class A - Planned - by Transpower 0.00 0.00 204.14 0.00
Class B - Planned - by Waipa Networks 16.97 9.48 19.02 73.74
Class C - Unplanned - by Waipa Networks 154.48 152.68 244.74 162.40
Class D - Unplanned - by Transpower 4.70 113.08 20.57 4.49
Class E - Unplanned - by Line Owner generator 0.00 0.00 0.00 0.00
Class F - Unplanned - by other generation 0.00 0.00 0.00 0.00
Class G - Unplanned - by another line owner 0.08 3.50 2.57 6.69
Class H - Planned - by another line owner 0.00 0.00 0.00 0.00
Class I - Any other loss of supply 0.00 0.00 0.00 0.00
12 The SAIFI for the total number of interruptions 3.94 4.29 5.58 4.21
13 SAIFI targets for 2006 / 2007
Class B - Planned - by Waipa Networks 0.15
Class C - Unplanned - by Waipa Networks 2.54
14 Average SAIFI target for 2006 / 2007 to 2010 / 2011 years
Class B - Planned - by Waipa Networks 0.14
Class C - Unplanned - by Waipa Networks 2.40
15 The SAIFI for the total number of interruptions within each interruption class
Class A - Planned - by Transpower 0.00 0.00 0.56 0.00
Class B - Planned - by Waipa Networks 0.08 0.05 0.08 0.32
Class C - Unplanned - by Waipa Networks 2.68 3.04 4.31 3.23
Class D - Unplanned - by Transpower 1.18 1.14 0.56 0.56
Class E - Unplanned - by Line Owner generator 0.00 0.00 0.00 0.00
Class F - Unplanned - by other generation 0.00 0.00 0.00 0.00
Class G - Unplanned - by another line owner 0.00 0.06 0.07 0.10
Class H - Planned - by another line owner 0.00 0.00 0.00 0.00
Class I - Any other loss of supply 0.00 0.00 0.00 0.00
16 The CAIDI for the total number of interruptions 45 65 88 59
17 CAIDI targets for 2006 / 2007
Class B - Planned - by Waipa Networks 250
Class C - Unplanned - by Waipa Networks 66
18 Average CAIDI Target for 2006 / 2007 to 2010 / 2011 years
Class B - Planned - by Waipa Networks 250
Class C - Unplanned - by Waipa Networks 64
19 The CAIDI for the total number of interruptions within each interruption class
Class A - Planned - by Transpower 0 0 366 0
Class B - Planned - by Waipa Networks 222 205 253 232
Class C - Unplanned - by Waipa Networks 58 50 57 50
Class D - Unplanned - by Transpower 4 100 37 8
Class E - Unplanned - by Line Owner generator 0 0 0 0
Class F - Unplanned - by other generation 0 0 0 0
Class G - Unplanned - by another line owner 25 63 35 65
Class H - Planned - by another line owner 0 0 0 0
Class I - Any other loss of supply 0 0 0 0
WAIPA NETWORKS LIMITED - LINES BUSINESS
SCHEDULE 1 - PART 7
FORM FOR THE DERIVATION OF FINANCIAL PERFORMANCE MEASURES FROM FINANCIAL STATEMENTS
Derivation Table Input and Calculations Symbol in formula ROF ROE ROI
Operating surplus before interest and income tax from financial statements 1,758,536
Operating surplus before interest and income tax adjusted pursuant to regulation 18 (OSBIIT) 1,758,536
Interest on cash, bank balances, and short-term investments (ISTI) 15,821
OSBIIT minus ISTI 1,742,715 a 1,742,715 1,742,715
Net surplus after tax from financial statements 790,681
Net surplus after tax adjusted pursuant to regulation 18 (NSAT) 790,681 n 790,681
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) 1,497,378
Depreciation of SFA at ODV (y) 2,167,219
ODV depreciation adjustment -669,841 d add -669,841 add -669,841 add -669,841
Subvention payment tax adjustment 0 s*t deduct 0 deduct 0
Interest tax shield 264,059 q deduct 264,059
Revaluations 0 r add 0
Income tax 151,855 p deduct 151,855
Numerator 1,072,874 120,840 656,960
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) 58,774,792
Fixed assets at end of current financial year (FA1) 60,784,458
Adjusted net working capital at end of previous financial year (ANWC0) 898,849
Adjusted net working capital at end of current financial year (ANWC1) 803,188
Average total funds employed (ATFE) 60,630,644 c 60,630,644 60,630,644
(or regulation 33 time-weighted average)
Total equity at end of previous financial year (TE0) 51,964,826
Total equity at end of current financial year (TE1) 52,755,507
Average total equity 52,360,167 k 52,360,167
(or regulation 33 time-weighted average)
WUC at end of previous financial year (WUC0) 0
WUC at end of current financial year (WUC1) 0
Average total works under construction 0 e deduct 0 deduct 0 deduct 0
(or regulation 33 time-weighted average)
Revaluations 0 r
Half of revaluations 0 r/2 deduct 0
Intangible assets at end of previous financial year (IA0) 0
Intangible assets at end of current financial year (IA1) 0
Average total intangible asset 0 m add 0
(or regulation 33 time-weighted average)
Subvention payment at end of previous financial year (S0) 0
Subvention payment at end of current financial year (S1) 0
Subvention payment tax adjustment at end of previous financial year 0
Subvention payment tax adjustment at end of current financial year 0
Average subvention payment & related tax adjustment 0 v add 0
System fixed assets at end of previous financial year at book value (SFAbv0) 57,827,502
System fixed assets at end of current financial year at book value (SFAbv1) 59,845,149
Average value of system fixed assets at book value 58,836,326 f deduct 58,836,326 deduct 58,836,326 deduct 58,836,326
(or regulation 33 time-weighted average)
System Fixed assets at year beginning at ODV value (SFAodv0) 58,537,486
System Fixed assets at end of current financial year at ODV value (SFAodv1) 59,948,163
Average value of system fixed assets at ODV value 59,242,825 h add 59,242,825 add 59,242,825 add 59,242,825
(or regulation 33 time-weighted average)
Denominator 61,037,143 52,766,666 61,037,143
ATFEADJ = c - e - f + h Ave TEADJ = k - e - m + v - f + h ATFEADJ = c - e - ½r - f + h
Financial Performance Measure: 1.76 0.23 1.08
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
AUDIT NEW ZEALAND
REPORT OF THE AUDITOR-GENERAL
TO THE READERS OF THE FINANCIAL STATEMENTS OF WAIPA NETWORKS LIMITED FOR THE YEAR ENDED 31 MARCH 2006
We have audited the financial statements of Waipa Networks Limited on pages 1 to 12. The financial statements provide information about the past financial performance of Waipa Networks Limited and its financial position as at 31 March 2006. This information is stated in accordance with the accounting policies set out on pages 4 to 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 Waipa Networks Limited 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 John Scott of Audit New Zealand 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:
n the significant estimates and judgements made by the Directors in the preparation of the financial statements; and
n whether the accounting policies are appropriate to Waipa Network Limited'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 Waipa Networks Limited.
Unqualified Opinion
We have obtained all the information and explanations we have required.
In our opinion:
n proper accounting records have been maintained by Waipa Networks Limited as far as appears from our examination of those records; and
n the financial statements of Waipa Networks Limited on pages 1 to 12:
(a) comply with generally accepted accounting practice in New Zealand; and
(b) give a true and fair view of Waipa Network Limited'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 24 October 2006 and our unqualified opinion is expressed as at that date.
John Scott
Audit New Zealand
On behalf of the Auditor-General
Auckland, New Zealand
AUDIT NEW ZEALAND
AUDITOR-GENERAL'S OPINION ON THE PERFORMANCE MEASURES OF WAIPA NETWORKS LIMITED
We have examined the information on pages 13 to 21, 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 Waipa Networks Limited and dated 24 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.
John Scott
Audit New Zealand
On behalf of the Auditor-General
Auckland, New Zealand
24 October 2006