8 SEPTEMBER NEW ZEALAND GAZETTE 3023

COUNTIES POWER LIMITED
STATEMENT OF PROFIT AND LOSS
AND RETAINED EARNINGS - OTHER BUSINESS
For the Year Ended 31 March 1995

Notes 31 March 1995
SALES (2) 20479
NET PROFIT/(LOSS) BEFORE TAXATION (3) 389
Taxation Expense (4) 128
NET PROFIT/(LOSS) AFTER TAXATION 261
Retained Earnings at Beginning of Year -
RETAINED EARNINGS AT END OF YEAR 261

COUNTIES POWER LIMITED
BALANCE SHEET - OTHER BUSINESS
As at 31 March 1995

Notes 31 March 1995
SHAREHOLDERS FUNDS
Share Capital (5) 1486
Retained Earnings 261
TOTAL SHAREHOLDERS FUNDS 1747
CURRENT ASSETS
Cash (7) 2756
Inventories (8) 349
TOTAL CURRENT ASSETS 3105
CURRENT LIABILITIES
Accounts Payable (9) 1917
TOTAL CURRENT LIABILITIES 1917
Working Capital 1188
FIXED ASSETS (10)
Plant and Equipment Less Provision for Depreciation 185
Motor Vehicles Less Provision for Depreciation 374
TOTAL FIXED ASSETS 559
TOTAL ASSETS LESS CURRENT LIABILITIES 1747
NET ASSETS 1747

Counties Power Limited and Subsidiary

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

For the Year Ended 31 March 1995

1. STATEMENT OF ACCOUNTING POLICIES

These financial statements are presented in accordance with the Companies Act 1955 and have been prepared in accordance with the Financial Reporting Act 1993.

The parent company's financial statements are for Counties Power Limited as a separate entity and the consolidated financial statements for the Counties Power Group, which include the dormant subsidiary as disclosed in Note 17.

METHODOLOGY FOR REPORTING ON SEPERATE BUSINESS ACTIVITIES

The methodology adopted for preparing these financial statements does not follow that used in the guidelines issued by the Ministry of Commerce dated 23 June 1994 in all respects.

In terms of Regulation 19 of the Electricity (Information Disclosure) Regulations 1994 copies of the allocation methodology adopted are available from Counties Power Limited on request.

GENERAL ACCOUNTING POLICIES

The general accounting policies recognised as appropriate for the measurement and reporting of results, cash flows and the financial position based on historical cost, have been followed. Accrual accounting is used to match expenses and revenues. Reliance is placed on the fact that the Group is a going concern.

PARTICULAR ACCOUNTING POLICIES

The following particular accounting policies which materially affect the measurement of profit and financial position are consistently applied:

Sales

Sales shown in the profit and loss account comprise the amounts received and receivable by the company for goods supplied to customers in the ordinary course of business. The sales are shown exclusive of Goods and Services Tax collected from customers.

Electricity Sales

Electricity meters are read on the basis of constant cycles each year. Interim assessed monthly bills are issued for most customers. Unbilled sales at the financial year end have been accrued.

Accounts Receivable

Accounts receivable are stated at expected net realisable value after providing against debts where collection is doubtful.

Inventories

Inventories are stated at the lower of cost or net realisable value. Cost is determined at average in store prices. Allowance for obsolescence is made when necessary.

Fixed Assets

Fixed assets are stated at cost less accumulated depreciation. The cost of fixed assets created or enhanced by the Company (self-constructed assets) is direct expenses incurred and an appropriate proportion of indirect expenses.

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.

Depreciation

Fixed assets have been depreciated, so as to write off cost less estimated residual value over their estimated useful lives, on the following basis:

Distribution System 4% straight line
Buildings 22% DV for system automation equipment
2% straight line for majority of buildings (some at 1% straight line)
Plant & Equipment 20% and 25% DV for majority of items
40% DV for computer hardware and software
Motor Vehicles 20% and 25% DV for majority of vehicles

Investments

Investment in subsidiary is shown at cost as described in Note 17.

Taxation

The statement of profit and loss and retained earnings includes taxation expense on operating results.

The income tax expense charged to the profit and loss and retained earnings includes both the current year expense and the income tax effects of timing differences calculated using the liability method.

Tax effect accounting is applied on a comprehensive basis to all timing differences. 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.

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