INFORMATION FOR DISCLOSURE
PURSUANT TO SECTION 57T OF THE COMMERCE ACT 1986
CENTRALINES LIMITED
CERTIFICATION OF FINANCIAL STATEMENTS, PERFORMANCE MEASURES, AND STATISTICS DISCLOSED BY DISCLOSING ENTITIES (OTHER THAN TRANSPOWER)
We, J Loughlin and J Aitken, directors of Centralines Limited certify that, having made all reasonable enquiry, to the best of our knowledge: -
(a) The attached audited financial statements of Centralines 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 Centralines 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 31st March 2006.
J R AITKEN
J J LOUGHLIN
DATED DATED
27TH November 2006
CENTRALINES LIMITED - Lines Business
Statement of Significant Accounting Policies
For the year ended 31 March 2006
Basis of Preparation
Centralines Limited ("Centralines") is a public company registered under the Companies Act 1993. These financial statements have been prepared for the purposes of complying with the requirements of the Commerce Commission's Electricity Information Disclosure Requirements 2004. The financial statements comprise separate Statements of Financial Position, Financial Performance, Cash Flows and Movements in Equity for the Line Business as required by the Regulations. This businesses operate in and around the Central Hawke's Bay area. The general accounting principles recognised as appropriate for the measurement and reporting of earnings and financial position on an historical cost basis are followed by the Company, with the exception that certain assets have been revalued.
Methodology and Separation of Businesses
Centralines has generally followed the guidelines in the Electricity Information Disclosure Handbook issued by the Commerce Commission.
The financial statements have been prepared on the historical cost basis, as modified by the revaluation of certain assets as identified in specific accounting policies below.
Operating Revenue
Sales revenue represents revenue earned for the sale of the company's products and services net of returns, trade allowances and taxes paid. Other revenue includes interest income on investments.
Income Tax
The income tax expense charged to the Statement of Financial Performance includes both the current year's provision and the income tax effects of timing differences calculated using the liability method.
The taxation charge against the surplus of the period is the estimated liability in respect of that surplus after allowance for all the permanent differences and timing differences not expected to crystallise in the foreseeable future. This is the partial basis for the calculation of deferred tax.
Future taxation benefits attributable to timing differences or losses carried forward are recognised in the financial statements only where there is virtual certainty that the benefit of the timing differences will be realised or any losses utilised.
Goods and Services Tax (GST)
The financial statements have been prepared with revenue and expense items exclusive of GST. In the Statement of Financial Position, accounts receivable and accounts payable are inclusive of GST. All other assets and liabilities are exclusive of GST.
Receivables
Receivables are carried at anticipated realisable value. An estimate is made for doubtful receivables based on a review of all outstanding amounts at year end. Bad debts are written off during the year in which they are identified.
Inventories
Inventories are valued at the lower of weighted average cost and net realisable value.
Property, Plant and Equipment
Distribution Assets
Distribution assets are valued at fair value based on Optimised Depreciated Replacement Cost (ODRC) as independently determined by Craig Rice BCom, Bachelor of Laws and Lynne Taylor Bachelor of Social Science of PricewaterhouseCoopers and Eddie Graham B.E(Elec.) FIPENZ. These valuations were completed as at 31 March 2004.
Land and Buildings
Land and Buildings assets are valued at market value as independently determined by Peter A Brabyn, B Ag Comm, M Sc, (Ag Econ) ANZPI, MNZIPIM. These valuations were completed as at 31 March 2006.
Vehicles, Plant, Furniture and Fittings and Office Equipment
The value of vehicles, plant, office equipment, furniture and fittings are at cost less depreciation.
Revaluations
Any revaluation surplus arising on the revaluation of a class of property, plant or equipment is transferred directly to the asset revaluation reserve. A revaluation deficit in excess of the asset revaluation reserve balance for the class of property, plant or equipment is recognised in the Statement of Financial Performance in the period it arises. Revaluation surpluses which reverse previous revaluation deficits recognised in the Statement of Financial Performance are recognised as revenue in the Statement of Financial Performance.
Disposal of Property, Plant and Equipment
When an item of property, plant or equipment is disposed of, any gain or loss is recognised in the Statement of Financial Performance and is calculated as the difference between the sale price and the carrying value of the asset.
The carrying values of property, plant and equipment do not exceed their estimated recoverable value.
Depreciation
Depreciation of property, plant and equipment, other than freehold land, is calculated on a straight line basis so as to expense the cost of the assets, or the revalued amounts, to their residual values over their useful lives as follows:
Estimated useful lives
Buildings 50 - 100 years
Office and computer equipment 5 - 15 years
Distribution system 0 - 70 years
Motor vehicles 3 - 15 years
GIS 10 years
Plant, equipment and tools 5 - 10 years
Subsequent Expenditure
Subsequent expenditure relating to an item of property, plant and equipment is added to its gross carrying amount when such expenditure either increases the future economic benefits beyond its existing service potential, or is necessarily incurred to enable future economic benefits to be obtained, and that the expenditure would have been included in the initial cost of the item had the expenditure been incurred at that time.
Capitalisation
Capital expenditure is defined as all expenditure incurred in the creation of a new asset, replacement of an asset that has reached the end of its economic life, or increased service potential of an existing asset. Constructed assets are included in property, plant and equipment as each becomes operational and available for use.
Employee Entitlements
A liability for annual leave, long service leave and retirement gratuities is accrued and recognised in the Statement of Financial Position. Liabilities for annual and long service leave are calculated on an entitlement basis at current rates. Retirement gratuity liability is calculated using current rates and appropriate probabilities.
Investments
All investments are stated at cost price and then adjusted to account for amortisation of premiums or discounts to face value.
Financial Instruments
Financial instruments recognised in the Statement of Financial Position include cash and bank balances, investments, receivables and trade creditors. These financial assets and financial liabilities are generally carried at their estimated fair values and, where appropriate, particular recognition methods adopted are disclosed in the individual policy statements associated with each item.
Statement of Cash Flows
The following are the definitions of the terms used in the statement of cash flows:
(1) Operating activities include all transactions and other events that are not investing or financing activities.
(2) Investing activities are those activities relating to the acquisition, holding and disposal of property, plant and equipment and of investments. Investments include securities not falling within the definition of cash.
(3) Financing activities are those activities that result in changes in the size and composition of the capital structure. This includes both equity and debt not falling within the definition of cash.
(4) Cash is considered to be cash on hand and current accounts in banks, net of bank overdrafts.
Changes in Accounting Policies
There have been no changes from the accounting policies adopted in the last audited financial statements. All other policies have been applied consistently with the previous period.
CENTRALINES LIMITED - Lines Business
Statement of Financial Performance
For the year ended 31 March 2006
2006 2005
Notes $000 $000
Operating Revenue 2 7,325 7,334
Surplus before discounts and tax 2 2,769 1,884
Discount - 495
Operating Surplus before taxation 2 2,769 1,389
Taxation expense 1 939 493
Net Surplus after income tax 1,830 896
CENTRALINES LIMITED - Lines Business
Statement of Movements in Equity
For the year ended 31 March 2006
2006 2005
Notes $000 $000
Net Surplus for the year 1,830 896
Other recognised revenues and expenses
Revaluation of land and buildings 11 (18) 62
Revaluation of network assets 11 - (14)
Total recognised revenues and expenses for the period 1,812 944
Distribution to owners 12 (50) (50)
Movements in equity for the year 1,762 894
Equity at start of the year 34,897 34,003
Equity at end of the year 36,659 34,897
The accompanying notes and significant accounting policies form part of these financial statements.
CENTRALINES LIMITED - Lines Business
Statement of Financial Position
As at 31 March 2006
2006 2005
Notes $000 $000
EQUITY
Share capital 8,000 8,000
Asset revaluation reserve 11 23,777 23,795
Retained earnings 12 4,882 3,102
36,659 34,897
Represented by:
NON CURRENT ASSETS
Property, plant and equipment 4 32,873 32,514
32,873 32,514
CURRENT ASSETS
Cash 1,443 692
Short term investments 3 2,452 1,116
Receivables 5 769 642
Inventories 187 383
Taxation refund - 613
4,851 3,446
TOTAL ASSETS 37,724 35,960
CURRENT LIABILITIES
Accounts payable and accruals 15 500 1,050
Taxation payable 544 -
Employee entitlements 13 21 13
1,065 1,063
TOTAL LIABILITIES 1,065 1,063
NET ASSETS EMPLOYED 36,659 34,897
The accompanying notes and significant accounting policies form part of these financial statements.
CENTRALINES LIMITED - Lines Business
Statement of Cash Flows
For the year ended 31 March 2006
2006 2005
CASH FLOWS FROM OPERATING ACTIVITIES Notes $000 $000
Cash was provided from:
Receipts from customers 6,616 6,863
Contributions for capital works 460 326
Tax Refunds 334 -
Interest received 128 89
7,538 7,278
Cash was disbursed to:
Payments to suppliers and employees 3,462 4,482
Interest paid and finance charges on leased assets - -
Income taxes paid - 556
3,462 5,038
Net cash flows from operating activities 8 4,076 2,240
CASH FLOWS FROM INVESTING ACTIVITIES
Cash was provided from:
Proceeds from disposal of investments 215 264
Proceeds from disposal of property, plant and equipment - -
215 264
Cash was applied to:
Purchase of investments 1,368 1,116
Purchase and construction of property, plant and equipment 2,122 1,662
3,490 2,778
Net cash flows from investing activities (3,275) (2,514)
CASH FLOWS FROM FINANCING ACTIVITIES
Cash was applied to:
Payment of dividends 50 50
(50) (50)
Net cash flow from financing activities (50) (50)
Net (decrease) increase in cash held 751 (324)
Cash balances at beginning of year 692 1,016
Cash balances at end of year 1,443 692
The accompanying notes and significant accounting policies form part of these financial statements.
CENTRALINES LIMITED - Lines Business
Notes to the Financial Statements
For the year ended 31 March 2006
Note 1: Income Tax 2006 2005
$000 $000
Taxation
Operating surplus before taxation 2,769 1,389
Prima facie tax @ 33% 914 458
Permanent differences 343 378
Timing differences not recognised (309) (328)
Prior period adjustments (9) (15)
Taxation expense/(benefit) 939 493
Taxation expense/(benefit) is represented by:
Current tax 939 493
939 493
The Company has not recognised a deferred tax liability of $3.8 million (2005 $3.4 million)
Imputation credit account
Opening balance 2,208 1,677
Taxation paid 397 556
Taxation refund received (731) -
Imputation credits attached to dividends paid (25) (25)
Closing balance 1,849 2,208
CENTRALINES LIMITED - Lines Business
Notes to the Financial Statements
For the year ended 31 March 2006
Note 2: Surplus before Taxation 2006 2005
$000 $000
Operating Revenue
Network 6,623 6,656
AC Loss Rebate 109 256
Customer contributions 460 326
Interest revenue 128 89
Other Income 5 7
7,325 7,334
Depreciation
Electrical distribution system 1,501 1,473
Motor vehicles 6 6
GIS 55 55
1,562 1,534
Operating Expenses
Audit New Zealand - audit services 45 42
Audit New Zealand - disclosure accounts 7 6
Fees paid to other auditors 8 20
Remuneration paid to directors 85 85
All other operating expenses 2,849 3,763
2,994 3,916
Surplus before discounts and tax 2,769 1,884
Discount - 495
Surplus before taxation 2,769 1,389
Note 3: Investments 2006 2005
$000 $000
Current
Short term deposits held with registered banks 1,900 900
Current Investments of other listed securities 552 216
2,452 1,116
Market fluctuations in interest rates affect the earnings on these investments but Company policy of placing deposits with high credit quality financial institutions minimises the credit exposure
Fair and market value information
Listed securities 549 422
The market value is based on prices quoted on the stock exchanges at balance date
Fixed interest securities - interest rates
The range of interest rates on investments were:
Short term bank investments 7.15% - 7.42% 6.6% - 6.8%
Listed securities: 7.17% - 7.40% 8.0% - 8.0%
CENTRALINES LIMITED - Lines Business
Notes to the Financial Statements
For the year ended 31 March 2006
Note 4: Property, Plant and Equipment 2006 2005
$000 $000
Electrical distribution network
at valuation 31,588 31,588
additions at cost 2,787 1,666
Work in progress 951 163
accumulated depreciation (2,974) (1,473)
32,352 31,944
Freehold Land
at valuation 92 80
Motor vehicles
at cost 31 31
accumulated depreciation (18) (12)
13 19
GIS
at cost 551 551
accumulated depreciation (135) (80)
416 471
Total net carrying value 32,873 32,514
This is represented by:
Property, plant and equipment at valuation 31,680 31,668
Property, plant and equipment at cost 3,369 2,248
Work in progress 951 163
Accumulated depreciation (3,127) (1,565)
32,873 32,514
Note 5: Receivables and prepayments 2006 2005
$000 $000
Trade debtors 718 619
Sundry Receivables and Accruals 46 15
Prepayments 5 8
769 642
CENTRALINES LIMITED - Lines Business
Notes to the Financial Statements
For the year ended 31 March 2006
Note 6: Related Party Information
CHB Consumers Power Trust owns all of the issued capital of Centralines Limited.
Directors' transactions with the company were made under normal terms and conditions of supply and sale. No discounts were given during the year.
2006 2005
H Donald - 817
As at 31 March 2006, the total amount outstanding was nil (2005 nil)
Contestable contracting services in asset construction and maintenance were provided by Centralines contracting division at cost, including overheads, and as detailed, respectively, here and in Note 18.12b below. Unit price and quantities have not been determined.
Sub transmission assets 21 9
Zone substations 67 32
Distribution lines and cables 745 997
Medium voltage switchgear 161 19
Distribution transformers & substations 265 120
Low voltage lines and cables 513 212
Other system fixed assets - -
Note 7: Capital Commitments
As at 31 March 2006 Centralines had capital commitments of $355,360 (2005 Nil)
Note 8: Reconciliation of Cashflow with Operating Surplus 2006 2005
$000 $000
Reported surplus after taxation 1,830 896
Add Non Cash Items
Depreciation 1,562 1,534
1,562 1,534
Changes in Working Capital
(Increase) decrease in receivables and prepayments (127) (57)
Decrease (increase) in inventories 196 78
Increase (decrease) in accounts payable, accruals (550) 412
(Decrease) increase in employee entitlements 8 (5)
(Decrease) Increase provision for taxation 1,157 (618)
684 (190)
Net cash flow from operating activities 4,076 2,240
Note 9: Contingent Liabilities
As at 31 March 2006 the company had no contingent liabilities (2005 nil).
CENTRALINES LIMITED - Lines Business
Notes to the Financial Statements
For the year ended 31 March 2006
Note 10: Financial Instruments
Centralines has no off balance sheet financing (other than those disclosed in these notes), nor any foreign exchange exposure.
The fair value of financial instruments is the carrying amount disclosed in the Statement of Financial Position.
Centralines has an approved overdraft facility with the ANZ Bank for $100,000 at an interest rate of 14%.
The interest rates on the company's deposits are presented in note 3.
Interest Rate Risk
Interest Rate risk is the risk that the value of the assets and liabilities will fluctuate due to changes in market interest rates. The Company is exposed to interest rate risk primarily through cash balances, investments and finance leases.
Credit risk
Financial instruments which potentially subject the Company to credit risk principally consist of bank balances and accounts receivable. No collateral is held on these amounts. Maximum exposure to credit risk is the amount stated in the Financial Statements and is net of any recognised provision for losses on these financial instruments.
Concentration of credit risk
The Company has exposure to one electricity retailer that may account for up to 52% of accounts receivable. To minimise this risk, the company has contractual requirements contained within the use of system agreements operating with this party. A bond may be required where deemed necessary. At balance date no such bonds were held.
Note 11: Reserves 2006 2005
$000 $000
Asset revaluation reserve
Balance at beginning of year 23,795 23,747
Revaluation of electrical distribution network - (14)
Revaluation of Land/Buildings (18) 62
Balance at end of year 23,777 23,795
Detailed as:
Land/Buildings 44 62
General 420 420
Revaluation of electrical distribution network 23,313 23,313
23,777 23,795
Note 12: Retained Earnings 2006 2005
$000 $000

Balance at beginning of year 3,102 2,256
Net surplus 1,830 896
Dividends paid (50) (50)
Balance at end of year 4,882 3,102
CENTRALINES LIMITED - Lines Business
Notes to the Financial Statements
For the year ended 31 March 2006
Note 13: Employee Entitlements
Employee entitlements expected to be taken within the 12 months following balance date are recorded as current liabilities. All other employee entitlements are recorded as term liabilities
Note 14: Events Subsequent to Balance Date
There have been no significant reporting events subsequent to balance date.
Note 15: Accounts payable and accruals 2006 2005
$000 $000
Trade creditors 379 885
Sundry creditors and accruals 121 165
500 1,050
Note 16: Electricity Information Disclosure Requirements 2004 - Requirement 6 Information to be disclosed in Financial Statements:
2006 2005
$000 $000
1 Current Assets
(a) Cash and bank balances 1,443 692
(b) Short-term investments 2,452 1,116
(c) Inventories 187 383
(d) Accounts receivable 769 642
(e) Other current assets not listed in (a) to (d) - 613
(f) Total current assets 4,851 3,446
2 Fixed Assets
(a) System fixed assets 31,401 31,781
(b) Consumer billing and information system assets 416 471
(c) Motor vehicles 13 19
(d) Office equipment - -
(e) Land and buildings 92 80
(f) Capital works under construction 951 163
(g) Other fixed assets not listed in (a) to (f) - -
(h) Total fixed assets 32,873 32,514
3 Other tangible assets not listed above - -
4 Total tangible assets 37,724 35,960
5 Intangibles
(a) Goodwill - -
(b) Other intangibles not listed in (a) above - -
(c) Total Intangibles - -
6 Total assets 37,724 35,960
CENTRALINES LIMITED - Lines Business
Notes to the Financial Statements
For the year ended 31 March 2006
Note 16: Electricity Information Disclosure Requirements 2004 - Requirement 6 Information to be disclosed in Financial Statements: (cont)
2006 2005
$000 $000
7 Current liabilities
(a) Bank overdraft - -
(b) Short-term borrowings - -
(c) Payables and Accruals 500 1,050
(d) Provision for dividends payable - -
(e) Provision for income tax 544 -
(f) Other current liabilities not listed in (a) to (e) above 21 13
(g) Total current liabilities 1,065 1,063
8 Non-current liabilities
(a) Payables and accruals - -
(b) Borrowings - -
(c) Deferred tax - -
(d) Other non-current liabilities not listed in (a) to (c) above - -
(e) Total non-current liabilities - -
9 Equity
(a) Shareholders' equity
(i) Share capital 8,000 8,000
(ii) Retained earnings 4,882 3,102
(iii) Reserves 23,777 23,795
(iv) Total shareholders' equity 36,659 34,897
(b) Minority interests in subsidiaries - -
(c) Total equity 36,659 34,897
(d) Capital notes - -
(e) Total capital funds 36,659 34,897
10 Total equity and liabilities 37,724 35,960
11 Operating revenue
(a) Revenue from line/access charges 6,623 6,663
(b) Revenue from "Other" business for services carried out by the line business (transfer payment) - -
(c) Interest on cash, bank balances and short term investments: 128 89
(d) AC loss-rental rebates 109 256
(e) Other revenue not listed in (a) to (d) 465 326
(f) Total operating revenue 7,325 7,334
CENTRALINES LIMITED - Lines Business
Notes to the Financial Statements
For the year ended 31 March 2006
Note 16: Electricity Information Disclosure Requirements 2004 - Requirement 6 Information to be disclosed in Financial Statements: (cont)
2006 2005
12 Operating expenditure $000 $000
(a) Payment for transmission charges 1,448 2,354
(b) Transfer payments to the "Other" business for:
(i) Asset maintenance 678 670
(ii) Consumer disconnection/reconnection services
(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) above 69 43
(viii) Total transfer payment to the "Other" business 747 713
(c) Expense to entities that are not related parties for
(i) Asset maintenance
(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)) - -
(d) Employee salaries, wages and redundancies 156 152
(e) Consumer billing and information system expense
(f) Depreciation on:
(i) System fixed assets 1,501 1,473
(ii) Other assets not listed in (i) 61 61
(iii) Total depreciation 1,562 1,534
(g) Amortisation of:
(i) Goodwill
(ii) Other intangibles
(iii) Total amortisation of intangibles - -
(h) Corporate and administration 268 218
(i) Human resource expenses 1 1
(j) Marketing/advertising 34 25
(k) Merger and acquisition expenses
(l) Takeover defense expenses
(m) Research and development expenses
(n) Consultancy and legal expenses 15 33
(o) Donations
(p) Directors' fees 85 85
(q) Auditors' fees
(i) Audit fees paid to principal auditors 45 42
(ii) Audit fees paid to other auditors 8 20
(iii) Fees paid for other services provided by principal and other auditors 7 6
(iv) Total auditors' fees 60 68
(r) Costs of offering credit
(i) Bad debts written off
(ii) Increase in estimated doubtful debts
(iii) Total cost of offering credit
(s) Local authority rates expense
(t) AC loss-rentals (distribution to retailers/customers) expense
(u) Rebates to consumers due to ownership interest - 495
(v) Subvention payments
(w) Unusual expenses
(x) Other expenditure not listed in (a) to (w) 180 267
13 Total operating expenditure 4,556 5,945
CENTRALINES LIMITED - Lines Business
Notes to the Financial Statements
For the year ended 31 March 2006
Note 16: Electricity Information Disclosure Requirements 2004 - Requirement 6 Information to be disclosed in Financial Statements: (cont)
2006 2005
$000 $000
14 Operating surplus before interest and income tax 2,769 1,389
15 Interest expense
(a) Interest expense on borrowings
(b) Financing charges related to finance leases
(c) Other interest expense not listed in (a) or (b)
(d) Total interest expense - -
16 Operating surplus before income tax 2,769 1,389
17 Income tax 939 493
18 Net surplus after tax 1,830 896
CENTRALINES LIMITED - Lines Business
Electricity Information Disclosure Requirements 2004 - Requirement 14 Financial Performance and Efficiency Measures
Financial Measures 2006 2005 2004 2003 2002
Return On Funds 8.18 3.99% 5.47% 7.09% -1.40%
Return On Equity 5.12 2.59% 5.76% 4.80% -0.66%
Return on Investment * 5.40 2.57% 28.52% 4.55% -2.34%
Efficiency Measures 2006 2005 2004 2003 2002
Direct Line Cost Per Kilometre $568 $559 $517 $530 $574
Indirect Line Cost Per Customer $78 $85 $114 $103 $97
CENTRALINES LIMITED - LINES BUSINESS
Electricity Information Disclosure Requirements 2004 - Requirement 20 Energy Efficiency Performance Measures and Statistics
Energy delivery efficiency performance measures 2006 2005 2004 2003
Load factor 65.00% 68.00% 67.00% 72.00%
Loss ratio 7.35% 7.33% 7.30% 7.35%
Capacity utilisation 24.80% 24.30% 26.40% 26.00%
Energy delivery efficiency performance statistics 2006 2005 2004 2003
System Length
33kV 93.10 93.10 92.00 93.00
11kV 1,389.00 1,381.30 1,381.00 1,410.00
400V 187.00 175.50 165.00 46.00
1,669.10 1,649.90 1,638.00 1,549.00
Circuit Length - Overhead
33kV 92.40 92.40 91.50 92.40
11kV 1,369.00 1,366.30 1,370.00 1,407.00
400V 155.00 156.50 156.00 33.00
1,616.40 1,615.20 1,617.50 1,532.40
Circuit Length - Underground
33kV 0.70 0.70 0.50 0.50
11kV 20.00 15.00 11.00 3.30
400V 32.00 19.00 9.00 12.50
52.70 34.70 20.50 16.30
Transformer capacity 80,100 78,427 72,117 71,077
Maximum demand 19,836 19,024 19,016 18,716
Total Electricity entering the system (before losses) 113,491,636 113,792,436 111,970,890 117,713,011
Total Electricity supplied (after losses)
Retailer 1 55,957,838 65,305,197 69,543,110 75,525,743
Retailer 2 12,912,203 8,279,653 13,155,263 24,617,535
Retailer 3 620,333 513,664 553,330 592,803
Retailer 4 35,680,861 30,891,960 21,083,280 8,224,200
Retailer 5 1,296,313 1,028,221 - 96,155
Retailer 6 - - - -
106,467,548 106,018,695 104,334,983 109,056,436
Total consumers 7,692 7,532 7,457 7,442
160
Proportion of the total number of Unplanned interruptions not restored within: 2006 2005 2004 2003
3 hours 5.60% 11.90% 21.70% 10.60%
24 hours 0.00% 0.00% 0.00% 0.00%
Faults per 100 Km's 2006 2005 2004 2003
33kV 8.66 3.23 6.56 7.53
11kV 9.05 12.30 16.35 15.80
17.71 15.53 22.91 23.33
Faults Targets (#) 2007
33kV 4
11kV 10
14
Average Total Faults Targets (#) 2007 - 2011
33kV 2
11kV 8
10
Faults per 100 Km's - Underground 2006 2005 2004 2003
33kV - - - -
11kV - 1 - -
- 1 - -
Faults per 100 Km's - Overhead 2006 2005 2004 2003
33kV 8.66 3.23 6.56 7.58
11kV 9.05 12.30 16.35 15.85
17.71 15.53 22.91 23.43
SAIDI 2006 2005 2004 2003
Planned 41.20 15.60 7.00 67.00
Unplanned 99.50 155.79 375.00 187.00
Class A - - - -
Class D 12.50 - 6.00 6.00
153.20 171.39 388.00 260.00
SAIDI Targets 2007
Planned 50
Unplanned 135
185
Average SAIDI 2007 - 2011
Planned 50
Unplanned 115
165
SAIFI 2006 2005 2004 2003
Planned 0.14 0.07 0.03 0.49
Unplanned 4.75 4.36 7.13 6.42
Class A - - - -
Class D 0.69 - 0.28 0.31
5.58 4.43 7.44 7.22
SAIFI Targets 2007
Planned 0.55
Unplanned 3.35
Average SAIFI 2007 - 2011
Planned 0.50
Unplanned 2.90
CAIDI 2006 2005 2004 2003
Planned 291.00 232.22 214.00 137.00
Unplanned 21.00 35.72 53.00 29.00
Class A - - - -
Class D 18.10 - 21.00 19.40
29.00 38.70 36.00 36.00
CAIDI Targets 2007
Planned 91
Unplanned 40
Average CAIDI 2007 - 2011
Planned 100
Unplanned 40
Operating surplus before interest and income tax adjusted pursuant to regulation 18 (OSBIIT) 2,769
Interest on cash, bank balances, and short-term investments (ISTI) 128
OSBIIT minus ISTI 2,641 a 2,641 2,641
Net surplus after tax from financial statements 1,830
Net surplus after tax adjusted pursuant to regulation 18 (NSAT) 1,830 n 1,830
Amortisation of goodwill and amortisation of other intangibles - g add - add - add -
Subvention payment - s add - add - add -
Depreciation of SFA at BV (x) 1,501
Depreciation of SFA at ODV (y) 1,501
ODV depreciation adjustment -0 d add -0 add -0 add -0
Subvention payment tax adjustment - s*t deduct - deduct -
Interest tax shield (42) q deduct (42)
Revaluations - r add -
Income tax 939 p deduct 939
Numerator 2,641 1,830 1,744
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) 32,351
Fixed assets at end of current financial year (FA1) 31,922
Adjusted net working capital at end of previous financial year (ANWC0) (37)
Adjusted net working capital at end of current financial year (ANWC1) 435
Average total funds employed (ATFE) 32,335 c 32,335 32,335
Total equity at end of previous financial year (TE0) 34,897
Total equity at end of current financial year (TE1) 36,659
Average total equity 35,778 k 35,778
WUC at end of previous financial year (WUC0) 163
WUC at end of current financial year (WUC1) 951
Average total works under construction 557 e deduct 557 deduct 557 deduct 557
Revaluations - r
Half of revaluations - r/2 deduct -
Intangible assets at end of previous financial year (IA0) -
Intangible assets at end of current financial year (IA1) -
Average total intangible asset - m add -
Subvention payment at end of previous financial year (S0) -
Subvention payment at end of current financial year (S1) -
Subvention payment tax adjustment at end of previous financial year -
Subvention payment tax adjustment at end of current financial year -
Average subvention payment & related tax adjustment - v add -
System fixed assets at end of previous financial year at book value (SFAbv0) 31,781
System fixed assets at end of current financial year at book value (SFAbv1) 31,401
Average value of system fixed assets at book value 31,591 f deduct 31,591 deduct 31,591 deduct 31,591
System Fixed assets at year beginning at ODV value (SFAodv0) 32,283
System Fixed assets at end of current financial year at ODV value (SFAodv1) 31,888
Average value of system fixed assets at ODV value 32,086 h add 32,086 add 32,086 add 32,086
Denominator 32,273 35,716 32,273
ATFEADJ = c - e - f + h Ave TEADJ = k - e - m + v - f + h ATFEADJ = c - e - ½r - f + h
Financial Performance Measure: 8.18 5.12 5.40
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
CENTRALINES LIMITED - Lines Business
Electricity Information Disclosure Requirements 2004 - Requirement 16 Annual Valuation Reconciliation Report
2006 2005
$000 $000
System fixed assets at ODV at end of previous financial year 32,283 31,741
ADD system fixed assets acquired during the year at ODV 1,122 2,024
LESS system fixed assets disposed of during the year at ODV 16 9
LESS depreciation on system fixed assets at ODV 1,501 1,473
ADD revaluation of system fixed assets -
System fixed assets at ODV at end of the financial year 31,888 32,283
AUDIT NEW ZEALAND
REPORT OF THE AUDITOR-GENERAL
TO THE READERS OF THE FINANCIAL STATEMENTS OF CENTRALINES LIMITED FOR THE YEAR ENDED 31 MARCH 2006
We have audited the financial statements of Centralines Limited on pages 1 to 16. The financial statements provide information about the past financial performance of Centralines 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 4.
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 Centralines 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 Laurie Desborough 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 Centralines 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 Westpower Limited.
In addition to issuing audit certificates pursuant to the Electricity Information Disclosure requirements 2004 we have carried out an another audit assignment for Centralines Limited. This involved issuing an audit opinion on the annual financial statements for the year ended 31 March 2006. This assignment is compatible with those independence requirements. Other than this assignment we have no relationship with or interest in Centralines Limited.
Unqualified opinion
We have obtained all the information and explanations we have required.
In our opinion:
§ proper accounting records have been maintained by Centralines Limited as far as appears from our examination of those records; and
§ the financial statements of Centralines Limited on pages 1 to 16:
(a) comply with generally accepted accounting practice in New Zealand; and
(b) give a true and fair view of Centralines 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 27 November 2006 and our unqualified opinion is expressed as at that date.
Laurie Desborough
Audit New Zealand
On behalf of the Auditor-General
Palmerston North, New Zealand
AUDIT NEW ZEALAND
AUDITOR-GENERAL'S OPINION ON THE PERFORMANCE MEASURES OF CENTRALINES LIMITED
We have examined the information on pages 17 and 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 Centralines Limited and dated 27 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.
Laurie Desborough
Audit New Zealand
On behalf of the Auditor-General
Palmerston North, New Zealand
27 November 2006