NEW ZEALAND GAZETTE

No. 140

NOTES TO THE FINANCIAL STATEMENTS

24. TRANSACTIONS WITH RELATED PARTIES

The ultimate shareholder of ECNZ is the Crown. ECNZ undertakes many transactions with other State-Owned Enterprises and Government Departments, carried out on a commercial and arms length basis. Because it is considered that these do not fall within the intended scope of related party disclosures, they have not been treated as such in these financial statements.

During the year ECNZ paid professional engineering fees of $158,756 (1994 $303,139) to Beca Carter Hollings & Ferner Limited which is wholly owned by Beca Carter Group Limited of which Mr R P Carter is the Executive Chairman and a minority shareholder. Mr Carter is a Director of ECNZ Limited. Professional engineering services provided by Beca Carter Hollings & Ferner Limited were supplied on normal commercial terms. A balance of $27,631 outstanding at 30 June 1995 (1994 $54,350) is included in trade creditors.

Trans Power New Zealand Limited (Trans Power) was a wholly owned subsidiary of ECNZ. As at 1 July 1994 ECNZ disposed of Trans Power at book value to the Crown (ultimate shareholder of both companies). Trans Power owns and operates the National Grid (transmission system). ECNZ owns and operates the electricity generation assets. Due to the nature of the electricity business, Trans Power and ECNZ depend on each other for their revenue. All related party transactions with Trans Power are conducted on a commercial and arms length basis.

During the two periods covered by this annual report, namely 12 months to June 1995 and 15 months to June 1994, ECNZ entered into certain transactions with Trans Power New Zealand Limited and its subsidiaries (Trans Power Group). Related party transactions between ECNZ and Trans Power Group are disclosed as follows:

| OPERATING EXPENSES | | | |
| Transmission Charges | 3 | $130,067 | $347,892 |
| Other Expenses | 3 | $154 | $813 |
| | | $130,221 | $348,705 |

Transmission charges consist of connection to and the use of the National Grid to transmit bulk electricity from the point of generation to the point of supply. Since 1 October 1993, with the exception of a few customers Trans Power has invoiced the customer directly for this service. Previously, Trans Power invoiced ECNZ for transmission services and ECNZ then invoiced the customers on a bundled, energy and transmission basis.

| NET INTEREST INCOME | 4 | $3,718 | $138,667 |

| OUTSTANDING BALANCES | | | |
| CURRENT ASSETS | | | |
| Receivables | 7 | $6,465 | $18,308 |
| Short Term Advances | 7 | - | $1,738,933 |

| CURRENT LIABILITIES | | | |
| | | $6,465 | $1,757,241 |
| Amounts Payable | 11 | $12,473 | $15,523 |

ECNZ enters into certain transactions with its subsidiaries. Outstanding balances at year end are disclosed in the current assets and liabilities notes.