Notice Type
General Section
Notice Title

NORTHPOWER LIMITED

INFORMATION FOR DISCLOSURE
PURSUANT TO SECTION 57T OF THE COMMERCE ACT 1986
Northpower
Certification of Financial Statements, Performance Measures, and Statistics Disclosed by Disclosing Entities (other than Transpower)
We, Warren William Moyes and John Joseph Ward, Directors of Northpower Limited, certify that, having made all reasonable enquiry, to the best of our knowledge:-
(a) The attached audited financial statements of Northpower 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 Northpower 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.
Dated this 23 day of November 2006
Director Director
Certification of Valuation Report of Disclosing Entities
AUDIT NEW ZEALAND
REPORT OF THE AUDITOR-GENERAL
TO THE READERS OF THE FINANCIAL STATEMENTS OF NORTHPOWER LIMITED FOR THE YEAR ENDED 31 MARCH 2006
We have audited the financial statements of Northpower Limited on pages 1 to 9 and 12 to 14. The financial statements provide information about the past financial performance of Northpower Limited and its financial position as at 31 March 2006. This information is stated in accordance with the accounting policies set out on pages 1 to 3.
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 Northpower 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 F Caetano 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:
* the significant estimates and judgements made by the Directors in the preparation of the financial statements; and
* whether the accounting policies are appropriate to Northpower 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 Northpower Limited.
Unqualified Opinion
We have obtained all the information and explanations we have required.
In our opinion:
* proper accounting records have been maintained by Northpower Limited as far as appears from our examination of those records; and
* the financial statements of Northpower Limited on pages 1 to 9 and 12 to 14:
(a) comply with generally accepted accounting practice in New Zealand; and
(b) give a true and fair view of Northpower 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 November 2006 and our unqualified opinion is expressed as at that date.
F Caetano
Audit New Zealand
On behalf of the Auditor-General
Auckland, New Zealand
AUDIT NEW ZEALAND
AUDITOR-GENERAL'S OPINION ON THE PERFORMANCE MEASURES OF NORTHPOWER LIMITED
We have examined the information on pages 10, 17 and 18, 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 Northpower Limited and dated 24 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.
F Caetano
On behalf of the Auditor-General
Audit New Zealand
Auckland, New Zealand
24 November 2006
NORTHPOWER LIMITED AND SUBSIDIARY
STATEMENT OF ACCOUNTING POLICIES
For The Year Ended 31 March 2006
Reporting Entity
Northpower Limited is a company formed under the Energy Companies Act 1992 and registered under the Companies Act 1993. The group consists of Northpower Limited and its subsidiary Metro Power Limited.
The financial statements have been prepared in accordance with the Financial Reporting Act 1993 and Section 44 of the Energy Companies Act 1992.
Measurement Base
The general accounting policies recognised as appropriate for the measurement and reporting of results, cashflows and financial position under the historical cost method, as modified by the revaluation of land, buildings and the distribution system assets, have been followed in the preparation of these financial statements.
Particular Accounting Policies
The following particular accounting policies, which significantly affect the measurement of profit and of financial position, have been applied:
(i) Basis of Consolidation - Purchase Method
The consolidated financial statements include the holding company and its subsidiary, accounted for using the purchase method. All significant intercompany transactions are eliminated on consolidation. In the parent company's financial statements, investments in the subsidiary are stated at cost.
(ii) Operating Revenue
Operating Revenue shown in the Statement of Financial Performance comprise the amounts received and receivable by the Company for goods and services supplied to customers in the ordinary course of business. Operating Revenue is stated exclusive of Goods and Services Tax collected from customers.
(iii) Investments
Investments are stated at cost and net realisable value. Any decreases are recognised in the Statement of Financial Performance.
(iv) Properties Intended For Sale
Properties intended for sale are classified as current assets if sale is expected within 1 year. Such properties are shown at carrying value unless this exceeds net realisable value.
(v) Fixed Assets
All fixed assets are initially recorded at historical cost except for land and buildings, and distribution system assets, which are valued as detailed below.
The cost of purchased fixed assets is the value of the consideration given to acquire the assets and the value of other directly attributable costs which have been incurred in bringing the assets to the location and condition necessary for their intended service.
The cost of assets constructed by the Company includes the cost of all materials used in construction, direct labour on the project and an appropriate proportion of production overhead. Costs cease to be capitalised as soon as the asset is ready for productive use.
Land and buildings have been revalued to fair value based on a valuation conducted by Telfer Young (Northland) Ltd, Registered Valuers of Whangarei, as at 31 March 2006.
Buildings on land not owned by the Company are recorded at cost less depreciation and are not revalued.
The farm land and buildings for the subsidiary, Metro Power Ltd, are stated at cost and not revalued.
Distribution system assets have been revalued to Depreciated Replacement Cost (DRC) as at 31 March 2004, based on a valuation conducted by PriceWaterhouseCoopers, Registered Valuers, as at 31 March 2004.
The results of the revaluation of land and buildings, and distribution system assets, are credited or debited to the appropriate revaluation reserve. Where this results in a debit balance in the asset revaluation reserve this balance is expensed in the Statement of Financial Performance.
Land and buildings, and distribution system assets, are revalued by independent registered valuers on a five-yearly basis. Valuations will be undertaken more regularly if necessary to ensure no individual item of property, plant and equipment within a class is included at a valuation that is not materially different from its fair value.
Additions between revaluations are recorded at cost.
(vi) Depreciation
Depreciation is charged on a straight line basis so as to write off the cost or valuation of the fixed assets to their estimated residual value over their expected economic lives. The estimated economic lives are as follows:-
Distribution system:
Lines/transformers/substations 45-70 years
Distribution switchgear 35-55 years
Meters/communication/SCADA 5-15 years
Buildings - structural 50 years
- electrical and mechanical 20 years
- other 10 years
Motor vehicles 5-15 years
Plant and equipment 3-20 years
(vii) Inventories
Inventories are stated at the lower of cost and net realisable value.
The cost of inventories is principally determined on a weighted average basis.
(viii) Accounts Receivable
Accounts Receivable are stated at estimated realisable value after providing against debts where collection is doubtful.
(ix) Work in Progress
The value of work in progress is determined using the percentage of completion method. Profits are recognised only when the outcome of the contract can be reliably estimated. Foreseeable losses on a contract are recognised in the Statement of Financial Performance immediately.
(x) Taxation
The taxation charge against the profit for the year is the estimated liability in respect of that profit after allowance for permanent differences and timing differences not expected to reverse in future periods. This is the partial basis for the calculation of deferred taxation.
The Company follows the liability method of accounting for deferred taxation.
Future taxation benefits attributable to losses carried forward, or timing differences, are recognised in the financial statements only where there is virtual certainty of realisation.
(xi) Research and Development Costs
Research and development costs are normally expensed in the period incurred except that development costs are deferred where future benefits are expected to exceed these costs. Deferred development costs are amortised over future periods on a basis related to expected future revenue.
(xii) Financial Instruments
Northpower and its subsidiary are party to financial instrument arrangements as part of everyday operations. These instruments include bank accounts, accounts receivable, creditors, and short term deposits. Revenues and expenses in relation to all financial instruments are recognised in the Statement of Financial Performance. All financial instruments are recognised in the Statement of Financial Position.
Northpower has limited its exposure to credit risk in respect of its investments by only investing in institutions with a high credit rating, and limiting the proportion that can be invested in any one institution. Northpower believes this policy reduces the risk of any loss which could arise from its investing activities.
(xiii) GST
These Financial Statements are prepared on a GST exclusive basis, with the exception of accounts receivable and accounts payable, which are GST inclusive. Where GST is irrecoverable as an input tax, it is recognised as part of the related asset or expense.
(xiv) Employee Entitlements
Provision is made in respect of the group's liability for annual leave, long service leave and retirement gratuities. Annual leave has been calculated on an actual entitlement basis at current rates of pay, while the other provisions have been calculated on an actuarial basis at current rates of pay.
(xv) Goodwill
Goodwill may arise from the acquisition of a business. An assessment of the economic life of goodwill will be made on a case by case basis and it will be amortised over a period not exceeding five years.
(xvi) Leases
Northpower Group entities lease certain land and buildings. Operating lease payments, where the lessors effectively retain substantially all the risks and benefits of ownership of the lease items, are included in the determination of the net surplus in equal instalments over the period of the lease.
(xvii) Statement of Cash Flows
Cash means cash balances on hand, held in bank accounts, demand deposits and other highly liquid investments in which Northpower invests as part of its day-to-day cash management.
Operating activities include all activities other than investing and financing activities. The cash inflows include all receipts from the sale of goods and services and other sources of revenue that support Northpower's operating activities. Cash outflows include payments made to employees, suppliers and for taxes.
Investing activities are those activities relating to the acquisition and disposal of current and non-current securities and any other non-current assets.
Financing activities are those activities relating to changes in equity and debt capital structure of Northpower and those activities relating to the cost of servicing Northpower's equity capital.
Changes in Accounting Policies:
There have been no changes in accounting policies. The policies have been applied on a basis consistent with previous years.
NORTHPOWER LIMITED
STATEMENT OF FINANCIAL POSITION - LINE BUSINESS
As At 31 March 2006
Notes 2006 2005
$000's $000's
EQUITY:
Share Capital 6 27,739 27,739
Asset Revaluation Reserve 7 109,844 107,939
Retained Earnings 8 24,213 19,575
TOTAL EQUITY $161,796 $155,253
NON CURRENT LIABILITIES
Employee Entitlements 121 107
$121 $107
CURRENT LIABILITIES
Bank Overdraft - -
Sundry Creditors 1,288 2,458
GST Payable 145 57
Provision for Dividend 4,155 4,095
Employee Entitlements 191 130
TOTAL CURRENT LIABILITIES $5,779 $6,740
$167,696 $162,100
NON CURRENT ASSETS
Fixed Assets 5 151,686 145,393
$151,686 $145,393
CURRENT ASSETS
Cash and Bank 12,345 12,740
Short Term Deposits - 100
Accounts Receivable 3,072 2,955
Inventory 593 545
Tax Refund Due - 367
TOTAL CURRENT ASSETS $16,010 $16,707
$167,696 $162,100
DIRECTOR DIRECTOR
Date: Date: 23/11/06
The accompanying Notes and Accounting Policies form part of these financial statements.
NORTHPOWER LIMITED
STATEMENT OF CASH FLOWS - LINE BUSINESS
For the Year Ended 31 March 2006
Notes 2006 2005
$000's $000's
Cash Flows from Operating Activities -
Cash was provided from:
Receipts from Customers 31,717 33,505
Interest Received 106 196
Cash was distributed to:
Payments to Suppliers (19,185) (17,071)
Payments to Employees (2,394) (2,734)
Interest Paid -
Income Tax Paid (2,082) (2,929)
Net Cash Inflow from Operating Activities 9 $8,162 $10,967
Cash Flows from Investing Activities -
Cash was provided from:
Term Receivable -
Sale of Assets -
Short Term Deposits Matured 100 4,009
Cash was applied to:
Short Term Deposits -
Purchase of Fixed Assets (4,562) (4,138)
Net Cash Inflow from Investing Activities ($4,462) ($129)
Cash Flows from Financing Activities -
Cash was applied to:
Dividends (4,095) (3,512)
Net Cash Outflow from Financing Activities (4,095) (3,512)
Net Increase (Decrease) in Cash Held (395) 7,326
Add Opening Cash Brought Forward 12,740 5,414
Ending Cash Carried Forward $12,345 $12,740
The accompanying Notes and Accounting Policies form part of these financial statements. NORTHPOWER LIMITED
STATEMENT OF CASH FLOWS - LINE BUSINESS
For the Year Ended 31 March 2006
Notes 2006 2005
$000's $000's
Cash Flows from Operating Activities -
Cash was provided from:
Receipts from Customers 31,717 33,505
Interest Received 106 196
Cash was distributed to:
Payments to Suppliers (19,185) (17,071)
Payments to Employees (2,394) (2,734)
Interest Paid -
Income Tax Paid (2,082) (2,929)
Net Cash Inflow from Operating Activities 9 $8,162 $10,967
Cash Flows from Investing Activities -
Cash was provided from:
Term Receivable -
Sale of Assets -
Short Term Deposits Matured 100 4,009
Cash was applied to:
Short Term Deposits -
Purchase of Fixed Assets (4,562) (4,138)
Net Cash Inflow from Investing Activities ($4,462) ($129)
Cash Flows from Financing Activities -
Cash was applied to:
Dividends (4,095) (3,512)
Net Cash Outflow from Financing Activities (4,095) (3,512)
Net Increase (Decrease) in Cash Held (395) 7,326
Add Opening Cash Brought Forward 12,740 5,414
Ending Cash Carried Forward $12,345 $12,740
The accompanying Notes and Accounting Policies form part of these financial statements.
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
For the Year Ended 31 March 2006
Line Business
2006 2005
$000's $000's
1. Operating Revenue
Line Charges 30,527 29,713
Loss Rental Rebate 1,255 622
Line Contributions 3,821 2,978
Interest Received 106 196
Sundry Income 52 39
$35,761 $33,548
2. Operating Surplus Before Tax After Charging:
Bad Debts Written Off 6 14
Depreciation - System Assets 3,566 3,538
- Centralised Load Equipment 96 93
- Computer Equipment 120 120
- Plant and Equipment 119 100
- Motor Vehicles 27 36
- Buildings 67 67
Directors' Fees 97 95
Interest - -
Rental and Operating Lease Costs - -
Research and Development 8 1
Donations - -
(Gain) Loss on Sale of Assets (3) (150)
3. Auditors' Remuneration
Auditing Financial Statements 26 24
Other Services 10 7
4. Taxation
Operating Surplus Before Taxation 11,242 10,885
Prima Facie Taxation @ 33% 3,710 3,592
Plus Tax Effect of Permanent Differences:-
Permanent Differences (1,261) (983)
Timing differrences not recognised - -
Prior Period Adjustment - -
Deferred Tax Adjustment - -
Tax on Profits for Year $2,449 $2,609
The Taxation Charge is Represented by:-
Current Taxation 2,449 2,609
Deferred Taxation - -
$2,449 $2,609
A deferred tax liability of $15,760,000 (2005: $14,735,000) has not been recognised
Imputation Credit Account:
Opening Balance 8,805 7,606
Imputation Credits Attached to Dividends Paid (2,017) (1,730)
Income Tax Payments During Year 2,082 2,929
$8,870 $8,805
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS (Continued)
Line Business
2006 2005
$000's $000's
5. Fixed Assets
System Assets - At Valuation 136,239 136,239
- At Cost 12,787 5,138
- Under Construction 437 61
Less Accumulated Depreciation (6,976) (3,538)
$142,487 $137,900
Centralised Load Equipment - At Valuation 2,089 2,089
- At Cost 90 88
Less Accumulated Depreciation (190) (93)
$1,989 $2,084
Computer Equipment - At Cost 1,197 1,197
Less Accumulated Depreciation (1,092) (1,042)
$105 $155
Plant and Equipment - At Cost 1,973 1,964
Less Accumulated Depreciation (1,294) (1,152)
$679 $812
Motor Vehicles - At Cost 128 267
Less Accumulated Depreciation (54) (146)
$74 $121
Buildings - At Valuation 3,444 2,766
- At Cost - 231
Less Accumulated Depreciation (19) (145)
$3,425 $2,852
Land - At Valuation $2,927 $1,469
Total Fixed Assets $151,686 $145,393
6. Share Capital:
Authorised, issued and paid up capital 27,739 27,739
Total Issued and Paid Up Capital $27,739 $27,739
7. Asset Revaluation Reserve:
Distribution System - Opening Balance 102,793 102,793
- Revaluation - -
- Closing Balance $102,793 $102,793
Buildings - Opening Balance 4,176 4,176
- Revaluation 447 -
- Closing Balance $4,623 $4,176
Land - Opening Balance 970 970
- Revaluation 1,458 -
- Closing Balance $2,428 $970
8. Retained Earnings:
Opening Balance 19,575 15,394
Net Surplus After Taxation 8,793 8,276
Total Available for Appropriation 28,368 23,670
Dividends (4,155) (4,095)
Closing Balance $24,213 $19,575
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS (Continued)
Line Business
2006 2005
$000's $000's
9. Reconciliation of Net Surplus After Taxation
with Cash Inflow from Operating Activities:
Net Surplus After Taxation 8,793 8,276
Add (less) Non Cash Items:
Depreciation 3,995 3,954
Capital Contributions (3,821)
Movements in Working Capital
Increase (Decrease) in Creditors (1,007) (1,060)
(Increase) Decrease in Taxation Refund 367 (320)
(Increase) Decrease in Accounts Receivable (117) 153
(Increase) Decrease in Inventory (48) (36)
Net Cash Flow from Operating Activities $8,162 $10,967
10. Financial Instruments:
Financial Instruments which potentially subject the company to credit risk principally consist of cash
bank balances, short term deposit, and accounts receivable. Northpower does not generally require
collateral from customers.
Northpower places its cash and short term deposits with high credit quality financial institutions (A1 or
better), and limits the amount of credit exposure to any one institution, in accordance with Company
policy.
The fair value of all financial instruments is approximated by the carrying value recorded in the
Statement of Financial Position.
11. Segment Information:
Northpower Ltd operates predominantly in the electricity network industry within the Northland area.
Therefore, there is no segmental information.
12. Contingent Liabilities:
There are no contingent liabilities (2005 $Nil)
13. Commitments: 2006 2005
Commitments relate to purchase of Distribution equipment 286
- -
14. Related Parties:
Provision has been made in the accounts for payment of a final dividend to Northpower
Electric Power Trust of $4,154,900 (2005 $4,094,650) and as at 31 March 2006 the
amount owing to the Trust is $4,154,900 (2005 $4,094,650).
The Northpower Electric Power Trust is the sole shareholder. All related party transactions
with the Northpower Electric Power Trust have been conducted on a commercial and arms length basis.
Northpower's Contracting Division provided the following services to 2006 2005
the Network Division, for the full year, at cost, including overheads:- $000'S $000'S
(i) Maintenance of Assets 5,545 3,234
(ii) Consumer disconnections/reconnections 11 10
(iii) Other Services 633 787
Construction of New Assets:-
(a) Subtransmission Assets 325 -
(b) Zone Substations 1,021 465
(c) Distribution Lines and Cables 624 443
(d) Medium Voltage Switchgear 844 29
(e) Distribution Transformers 454 169
(f) Distribution Substations - -
(g) Low Voltage Reticulation 52 105
Network Maintenance and Capital Works are charged in accordance
with a Fixed Term Contract.
- No balance is outstanding at balance date.
- No amounts have been written off or forgiven during the year.
- No transactions have been made at nil or nominal value.
DISCLOSURE OF FINANCIAL PERFORMANCE MEASURES AND EFFICIENCY PERFORMANCE
MEASURES PURSUANT TO PART 3 OF THE ELECTRICITY INFORMATION DISCLOSURE
REQUIREMENTS 2004
1. Financial Performance Measures 2006 2005 2004 2003 2002
(a) Return on Funds 7.6% 7.5% 6.7% 7.3% 6.2%
(b) Return on Equity 5.7% 5.5% 4.8% 5.4% 4.2%
(c) Return on Investment 5.9% 5.7% 24.1% 5.5% 4.1%
2. Efficiency Performance Measures 2006 2005 2004 2003 2002
(a) Direct line cost per kilometre $1,425 $1,099 $1,081 $1,041 $1,044
(b) Indirect line cost per electricity customer $46 $57 $46 $38 $45
DISCLOSURE OF RECONCILIATION OF ODV VALUATION PURSUANT TO PART 8 OF THE
ELECTRICITY INFORMATION DISCLOSURE REQUIREMENTS 2004
2006 2005 2004 2003 2002
$000's $000's $000's $000's $000's
ODV Valuation 1 April 136,693 135,098 111,626 111,840 110,934
Additions for Year 8,651 5,226 4,290 3,187 4,124
Disposals for Year - - - - -
Annual Depreciation (3,662) (3,631) (3,242) (3,401) (3,218)
Revaluations - - 22,424 - -
ODV Valuation 31 March 141,682 136,693 135,098 111,626 111,840
DISCLOSURE OF ENERGY EFFICIENCY PERFORMANCE MEASURES AND STATISTICS PURSUANT
TO SCHEDULE 1, PART 4 OF THE ELECTRICITY INFORMATION DISCLOSURE REQUIREMENTS 2004
1. Energy Delivery Efficiency 2006 2005 2004 2003 2002
Performance Measures
(a) Load Factor 76.20% 76.37% 77.87% 77.38% 74.85%
(b) Loss Ratio 3.12% 3.22% 3.54% 3.13% 4.50%
Loss Ratio Estimated *3.60% * 3.60% * 3.70% * 3.70% * 3.60%
(c) Capacity Utilisation 33.19% 32.23% 31.82% 32.35% 32.70%
* Estimated, based on distribution
system configuration
2. Statistics
(a) System length, broken down
by voltage:
- 33 kV 231.0 km 235.0 km 235.0 km 230.4 km 229.6 km
- 11 kV 3298.0 km 3,244.0 km 3,197.0 km 3,194.1 km 3,137.0 km
- 400V 2057.0 km 1,940.0 km 1,873.0 km 2,006.0 km 1,970.0 km
- Total 5586.0 km 5,419.0 km 5,305.0 km 5,430.5 km 5,336.6 km
(b) Circuit length of overhead lines,
broken down by voltage:
- 33 kV 215.0 km 219.0 km 219.0 km 213.0 km 213.0 km
- 11 kV 3149.0 km 3,125.0 km 3,093.0 km 3,097.0 km 3,050.0 km
- 400V 1582.0 km 1,562.0 km 1,557.0 km 1,733.0 km 1,716.0 km
- Total 4946.0 km 4,906.0 km 4,869.0 km 5,043.0 km 4,979.0 km
(c) Circuit length of underground
cables broken down by voltage:
- 33 kV 16.0 km 16.0 km 16.0 km 17.4 km 16.6 km
- 11 kV 149.0 km 119.0 km 104.0 km 97.1 km 87.0 km
- 400V 475.0 km 378.0 km 316.0 km 273.0 km 254.0 km
- Total 640.0 km 513.0 km 436.0 km 387.5 km 357.6 km
d) Transformer capacity 433235kVA 419,982 kVA 414,440 kVA 406,685 kVA 397,445 kVA
(e) Maximum demand 143,800kW 135,344 kW 131,880 kW 131,560 kW 129,978 kW
(f) Total electricity entering the
system - kWh 959,899,374 905,439,718 899,598,208 891,815,703 852,225,151
(g) Total electricity supplied from
the system for other retailers
- Meridian Energy 234,998,959 296,082,158 298,266,724 322,048,156 265,038,676
- Trust Power 125,036,672 111,027,589 118,620,725 136,055,824 155,862,292
- On Energy 0 0 0 2,359,302 181,022,296
- Genesis 117,444,845 108,385,534 94,838,915 262,402,357 182,238,158
- Energy Waikato 0 0 0 0 6,678,958
- Mighty River 347,980,217 310,011,324 305,675,711 113,104,961 15,016,205
- Empower 0 0 942,581 1,538,915 192,485
- Contact Energy 929,935,552 50,803,828 49,375,781 26,420,176 7,758,292
(h) Total Customers 50,753 49,820 48,852 47,785 46,712
DISCLOSURE OF INFORMATION RELATING TO FINANCIAL STATEMENTS UNDER THE
ELECTRICITY INFORMATION DISCLOSURE REQUIREMENTS 2004, SCHEDULE 1 PART 2
2006 2005 2004 2003 2002
$000's $000's $000's $000's $000's
1. Current Assets
(a) Cash and Bank Balances 12,345 12,740 5,414 1 169
(b) Short Term Investments 100 4,109 5,266 -
(c) Inventories 593 545 509 483 222
(d) Accounts Receivable 3,072 2,955 3,108 3,299 3,045
(e) Other Current Assets Not Listed in (a) to (d) 367 47 245 19
(f) Total Current Assets 16,010 16,707 13,187 9,294 3,455
2. Fixed Assets
(a) System Fixed Assets 144,039 139,923 138,328 111,667 112,126
(b) Customer Billing and Information System Assets 105 155 69 163 285
(c) Motor Vehicles 74 121 45 69 58
(d) Office Equipment 61 70 99 99 109
(e) Land and Buildings 6,352 4,321 4,962 4,910 4,871
(f) Capital Works Under Construction 437 61 1,054 1,074 203
(g) Other Fixed Assets Not Listed in (a) to (f) 618 742 652 735 848
(h) Total Fixed Assets 151,686 145,393 145,209 118,717 118,500
3. Other Tangible Assets Not Listed Above - - 114 571
4. Total Tangible Assets 167,696 162,100 158,396 128,125 122,526
5. Intangible Assets
(a) Goodwill - - - -
(b) Other intangibles not listed in (a) - - - -
(c) Total Intangible Assets - - - -
6. Total Assets 167,696 162,100 158,396 128,125 122,526
7. Current Liabilities
(a) Bank Overdraft - - - -
(b) Short Term Borrowings - - - -
(c) Payables and Accruals 1,288 2,458 3,455 2,246 1,698
(d) Provision for Dividend Payable 4,155 4,095 3,512 3,264 1,608
(e) Provision for Income Tax - - - -
(f) Other Current Liabilities Not Listed in (a) to (e) 336 187 183 - -
(g) Total Current Liabilities 5,779 6,740 7,150 5,510 3,306
8. Non-current Liabilities
(a) Payables and Accruals 121 107 174 174 121
(b) Borrowings - - - -
(c) Deferred Tax - - - -
(d) Other Non-current Liabilities Not Listed in (a) to (c) - - - -
(e) Total Non-current Liabilities (sum of (a) to (d)) 121 107 174 174 121
DISCLOSURE OF INFORMATION RELATING TO FINANCIAL STATEMENTS UNDER THE ELECTRICITY
INFORMATION DISCLOSURE REQUIREMENTS 2004, SCHEDULE 1, PART 2
Continued
2006 2005 2004 2003 2002
$000's $000's $000's $000's $000's
9. Equity
(a) Shareholders' Equity:-
(i) Share capital 27,739 27,739 27,739 27,739 27,739
(ii) Retained earnings 24,213 19,575 15,394 12,512 9,299
(iii) Reserves 109,844 107,939 107,939 82,190 82,061
(iv) Total Shareholders' Equity (sum of (i) to (iii)) 161,796 155,253 151,072 122,441 119,099
(b) Minority Interests in Subsidiaries - - - -
(c) Total Equity (sum of (a) and (b)) 161,796 155,253 151,072 122,441 119,099
(d) Capital Notes - - - -
(e) Total Capital Funds (sum of (c) and (d)) 161,796 155,253 151,072 122,441 119,099
10. Total Equity and Liabilities (Total Assets) 167,696 162,100 158,396 128,125 122,526
11. Operating Revenue
(a) Revenue from line/access charges 31,782 30,335 28,128 27,524 26,953
(b) Revenue from "Other" business (transfer payment) - - - -
(c) Interest on Cash, Bank Balances and Short Term 106 196 222 140 50
Investments
(d) AC Loss-Rental Rebates 1,255 622 1,097 857 1,607
(e) Other Operating Revenue Not Listed in (a) to (d) 3,876 3,017 1,880 1,810 819
(f) Total Operating Revenue 37,019 34,170 31,327 30,331 29,429
12. Operating Expenditure
(a) Payment for Transmission Charges 10,251 10,067 9,659 9,376 9,003
(b) Transfer Payments to the "other" business for:-
(i) Asset maintenance 5,545 3,234 2,934 3,366 2,688
(ii) Consumer disconnection/reconnection services 11 10 15 15 -
(iii) Meter data - - - -
(iv) Consumer-based load control services - - - -
(v) Royalty and patent expenses - - - -
(vi) Avoided transmission charges on account of - - - -
own generation
(vii) Other goods and services not listed in (i) to (vi) 633 787 853 873 960
(viii) Total transfer payment to the 'Other' business
(sum of (i) to (vii)) 6,189 4,031 3,802 4,254 3,648
(c) Expense to Entities That Are Not Related Parties for:-
(i) Asset maintenance 38 281 101 259 360
(ii) Consumer disconnection/reconnection services - - - -
(iii) Meter data - - - -
(iv) Consumer-based load control services - - - -
(v) Royalty and patent expenses - - - -
(vi) Total of specified expenses to non-related parties
(sum of (i) to (v)) 38 281 101 259 360
(d) Employee Salaries, Wages and Redundancies 2,469 2,656 2,408 1,879 2,011
(e) Consumer Billing and Information System Expense 125 127 111 113 294
(f) Depreciation On:-
(i) System fixed assets 3,662 3,631 3,242 3,401 3,218
(ii) Other assets not listed in (i) 333 323 305 430 588
(iii) Total depreciation (sum of (i) and (ii)) 3,995 3,954 3,547 3,831 3,806
DISCLOSURE OF INFORMATION RELATING TO FINANCIAL STATEMENTS UNDER THE
ELECTRICITY INFORMATION DISCLOSURE REQUIREMENTS 2004, SCHEDULE 1 PART 2
Continued
2006 2005 2004 2003 2002
$000's $000's $000's $000's $000's
12. Operating Expenditure continued
(g) Amortisation of:-
(i) Goodwill - - - - -
(ii) Other intangibles - - - - -
(iii) Total amortisation of intangibles (sum of (i) and (ii)) - - - - -
(h) Corporation and Administration 949 838 1,051 535 705
(i) Human Resources Expenses 26 24 28 - -
(j) Marketing/Advertising 183 352 332 108 295
(k) Merger and Acquisition Expenses - - - - -
(l) Takeover Defence Expenses - - - - -
(m) Research and Development Expenses 8 1 5 24 23
(n) Consultancy and Legal Expenses 123 167 127 176 190
(o) Donations - - - - -
(p) Directors' Fees 97 95 89 84 82
(q) Auditors' Fees
(i) Audit fees paid to principal auditors 26 24 15 12 12
(ii) Audit fees paid to other auditors - - - - -
(iii) Fees paid for other services provided by 10 7 3 3 3
principal and other auditors
(iv) Total auditors' fees (sum of (i) to (iii) 36 31 18 15 15
(r) Cost of Offering Credit
(i) Bad debts written off 6 14 - - -
(ii) Increase in estimated doubtful debts - - - - -
(iii) Total cost of offering credit (sum of (i) to (ii)) 6 14 - - -
(s) Local Authority Rates Expense 27 25 26 18 19
(t) AC Loss-Rental Rebates (Distribution to 1,255 622 1,097 857 1,609
Retailers/Customers) expense
(u) Rebates to Consumers Due to Ownership Interest - - - - -
(v) Subvention Payments - - - - -
(w) Unusual Expenses - - - -
(x) Other Expenditure Not Listed in (a) to (w) - - - - -
13. Total Operating Expenditure (sum of 12 (a) to 12 (x) 25,777 23,285 22,401 21,529 22,060
14. Operating Surplus Before Interest and Income Tax 11,242 10,885 8,926 8,802 7,369
15. Interest Expense
(a) Interest expense on borrowings - - - 3 23
(b) Financing charges related to finance leases - - - - -
(c) Other interest expense - - - - -
- - - 3 23
16. Operating Surplus Before Income Tax (14 - 15 (d)) 11,242 10,885 8,926 8,799 7,346
17. Income Tax (2,449) (2,609) (2,532) (2,322) (2,414)
18. Net Surplus After Tax (16 - 17) 8,793 8,276 6,394 6,477 4,932
DISCLOSURE OF RELIABILITY PERFORMANCE MEASURES UNDER THE ELECTRICITY INFORMATION
DISCLOSURE REQUIREMENTS 2004
2006 2005 2004 2003 2002
1. Total Number of Interruptions
Class A - Planned - by Transpower 0 1 1 0 1
Class B - Planned - by Northpower 211 251 149 160 225
Class C - Unplanned - by Northpower 290 225 256 361 271
Class D - Unplanned - by Transpower 1 1 0 2 0
Total 502 478 406 523 497
2. Interruption Targets for 2006/2007
Class B - Planned - by Northpower 180 180 180 200 210
Class C - Unplanned - by Northpower 220 220 240 240 240
3. Average Interruption Targets for Next 5 Yrs
Class B - Planned - by Northpower 160 160 160 170 180
Class C - Unplanned - by Northpower 170 170 170 190 190
4. Proportion of Class C 3 Hrs 16.8% 16.4% 15.5% 15.7% 14.4%
Interruptions not restored within 24 Hrs 0% 0% 0% 0% 0%
5. (a) Total No. of Faults per 11 kV 8.52 6.72 7.79 10.74 8.54
100 circuit kilometres of 33 kV 5.63 5.11 7.76 9.57 2.17
prescribed voltage electric line Total 8.33 6.61 7.79 10.66 8.11
(b) Target for 2006/2007 Year 11 kV 7.30 7.30 7.30 7.50 7.50
33 kV 2.00 2.00 2.00 2.00 2.00
Total 7.00 7.00 7.00 7.12 7.12
(c) Average Target for 11 kV 5 5 5 5 5
2006/2007 to 2010/2011 years 33 kV 2 2 2 2 2
Total 5 5 5 5 5
6. Total No. of Faults per 100 circuit 11 kV 2.01 1.68 1.92 1.03 2.30
kilometres of underground 33 kV 0.00 0.00 0.00 0.00 0.00
prescribed voltage electric line Total 1.82 1.48 1.67 0.88 1.92
7. Total No. of Faults per 100 circuit 11kV 8.83 6.91 7.76 11.04 8.72
kilometres of overhead 33 kV 6.05 5.48 7.79 10.33 2.35
prescribed voltage electric line Total 8.65 6.82 7.79 11.00 8.31
8. The SAIDI for the total No. of Interruptions 119.23 113.24 145.32 181.83 219.86
9. SAIDI Targets for 2006/07
Class B - Planned - by Line Owners 30 30 30 30 30
Class C - Unplanned - by Line Owners 87 90 95 100 100
10. Average SAIDI Target for 2006/7 to 2010/11 Yrs
Class B - Planned - by Line Owners 30 30 30 30 30
Class C - Unplanned - by Line Owners 85 85 85 85 85
DISCLOSURE OF RELIABILITY PERFORMANCE MEASURES UNDER THE ELECTRICITY
INFORMATION DISCLOSURE REQUIREMENTS 2004
Continued
2006 2005 2004 2003 2002
11.SAIDI For Total No. of Interruptions
within each Interruption Class
Class A - Planned - by Transpower 0 15.49 25.79 0 31.24
Class B - Planned - by Northpower 27.57 28.95 36.96 31.96 53.53
Class C - Unplanned - by Northpower 89.46 67.66 82.57 140.53 135.09
Class D - Unplanned - by Transpower 2.2 1.14 0 9.73 0
12. SAIFI for the Total No. of Interruptions 2.47 2.6 2.71 4.07 2.94
13. SAIFI Targets for 2006/07
Class B - Planned - by Northpower 0.27 0.27 0.27 0.27 0.27
Class C - Unplanned - by Northpower 2.5 2.5 2.5 2.5 2.5
14. Av. SAIFI target for 2006/07 to 2010/11 Yrs
Class B - Planned - by Northpower 0.27 0.27 0.27 0.27 0.27
Class C - Unplanned - by Northpower 2.5 2.5 2.5 2.5 2.5
15. SAIFI for the Total No. of Interruptions
within Each Interruption Class
Class A - Planned - by Transpower 0 0.06 0.08 0.00 0.08
Class B - Planned - by Northpower 0.17 0.21 0.21 0.21 0.37
Class C - Unplanned - by Northpower 2.19 1.90 2.42 3.57 2.49
Class D - Unplanned - by Transpower 0.11 0.42 0 0.29 0
16. CAIDI for the Total No. of Interruptions 48.3 43.6 53.7 44.7 74.8
17. CAIDI Targets for 2006/07
Class B - Planned - by Northpower 110 110 110 110 110
Class C - Unplanned - by Northpower 35 36 38 40 40
18. Av. CAIDI Target for 2006/07 to 2010/11 Yrs
Class B - Planned - by Northpower 110 110 110 110 110
Class C - Unplanned - by Northpower 34 34 34 34 34
19. CAIDI for the Total No. of Interruptions
within each Interruption Class
Class A - Planned - by Transpower 0 250.0 315.0 0.0 374.0
Class B - Planned - by Northpower 161.6 136.9 179.0 150.0 144.4
Class C - Unplanned - by Northpower 40.9 35.6 34.1 39.4 54.4
Class D - Unplanned - by Transpower 19.7 2.7 0 32.1 0
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 11,242
Operating surplus before interest and income tax adjusted pursuant to regulation 18 (OSBIIT) 11,242
Interest on cash, bank balances, and short-term investments (ISTI) 106
OSBIIT minus ISTI 11,136 a 11,136 11,136
Net surplus after tax from financial statements 8,793
Net surplus after tax adjusted pursuant to regulation 18 (NSAT) 8,793 n 8,793
Amortisation of goodwill and amortisation of other intangibles 0 g add 0 add 0 add 0
Subvention payment 0 s add 0 add 0 add 0
Depreciation of SFA at BV (x) 3,662
Depreciation of SFA at ODV (y) 3,662
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 35 q deduct 35
Revaluations 0 r add 0
Income tax 2,449 p deduct 2,449
Numerator 11,136 8,793 8,652
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) 145,393
Fixed assets at end of current financial year (FA1) 151,686
Adjusted net working capital at end of previous financial year (ANWC0) 855
Adjusted net working capital at end of current financial year (ANWC1) 2,041
Average total funds employed (ATFE) 149,988 c 149,988 149,988
(or regulation 32 time-weighted average)
Total equity at end of previous financial year (TE0) 155,253
Total equity at end of current financial year (TE1) 161,796
Average total equity 158,525 k 158,525
(or regulation 32 time-weighted average)
WUC at end of previous financial year (WUC0) 61
WUC at end of current financial year (WUC1) 437
Average total works under construction 249 e deduct 249 deduct 249 deduct 249
(or regulation 32 time-weighted average)
Revaluations 1,905 r
Half of revaluations 953 r/2 deduct 953
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 32 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) 139,923
System fixed assets at end of current financial year at book value (SFAbv1) 144,039
Average value of system fixed assets at book value 141,981 f deduct 141,981 deduct 141,981 deduct 141,981
(or regulation 32 time-weighted average)
System Fixed assets at year beginning at ODV value (SFAodv0) 136,693
System Fixed assets at end of current financial year at ODV value (SFAodv1) 141,682
Average value of system fixed assets at ODV value 139,188 h add 139,188 add 139,188 add 139,188
(or regulation 32 time-weighted average)
Denominator 146,945 155,482 145,993
ATFEADJ = c - e - f + h Ave TEADJ = k - e - m + v - f + h ATFEADJ = c - e - ½r - f + h
Financial Performance Measure: 7.6 5.7 5.9
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
Northpower
Certification of Valuation Report of Disclosing Entities
We, Warren William Moyes and John Joseph Ward, Directors of Northpower Limited, certify that, having made all reasonable enquiry, to the best of our knowledge:-
(a) The attached Valuation Report of Northpower Limited, prepared for the purposes of requirement 19 of the Commerce Commission's Electricity Information Disclosure Regulations 2004, complies with those Requirements; and
(b) The Replacement Cost of the line business system fixed assets of Northpower Limited is $283,377,000; and
(c) The Depreciated Replacement cost of the line business system fixed assets of Northpower Limited is $140,922,000; and
(d) The Optimised Depreciated Replacement Cost of the line business fixed assets of Northpower Limited is $135,098,000; and
(e) The Optimised Deprival Valuation of the line business system fixed assets of Northpower Limited is $135,098,000; and
(f) The values in (b) through to (e) have been prepared in accordance with the ODV Handbook (as defined in the Electricity Information Disclosures Requirements 2004).
These valuations are as at 31 March 2004.
Dated this 23 day of November 2006.
Director Director