1 AUGUST

NEW ZEALAND GAZETTE

1969

hedge price, electricity generators must settle the difference with the Company. Conversely if the spot market price is less than the hedge price, the Company must settle the difference with the electricity generators.

Credit Risk - electricity price hedging contracts

With respect to electricity price hedges, the Company's exposure is on any potential difference between the spot price and the hedge price, where on maturity of these agreements the spot price is greater than the hedge price. The company does not anticipate any non-performance of any obligations which may exist on maturity of these agreements.

Fair value - electricity price hedging contracts

The fair value of electricity price hedging contracts can vary from day to day as the spot market price for electricity varies. As at balance date the secondary market for electricity price hedging contracts was not sufficiently active in order to obtain a reliable measure of the fair value of the Company's hedging contracts. On maturity of these agreements there is potentially an asset or liability in relation to the electricity price hedges which has not been recognised in the financial statements. As at balance date the contract amount of the electricity hedging activity amounted to $5,925,000.

(B) Fair Values

Cash and Liquid Deposits, Short Term Loans, Provision for Uneconomic Lines and Investments.

The carrying value of these items is equivalent to their fair value.

15. RELATED PARTY TRANSACTIONS

There have been no material transactions with related parties during the period.

16. SUBSIDIARY

Cambie Corporation Limited is a shell company controlled by Counties Power Limited. Cambie Corporation has no assets or liabilities and did not trade during the year ended 31 March 1997. Cambie Corporation is in the process of being wound up.

17. ODV VALUATION

The ODV valuation of Counties Power Limited Lines Business Distribution System assets was calculated at $54,450,000 (31.3.95) by Worley Consultants.

COUNTIES POWER LIMITED

DISCLOSURE OF FINANCIAL PERFORMANCE MEASURES AND EFFICIENCY PERFORMANCE MEASURES PURSUANT TO REGULATION 13 AND PART II OF THE FIRST SCHEDULE OF THE ELECTRICITY (INFORMATION DISCLOSURE) REGULATIONS 1994

CERTIFICATION OF PERFORMANCE MEASURES BY AUDITORS

We have examined the information appearing on page 6 being -

a) Financial performance measures specified in clause 1 of Part II of the First Schedule to the Electricity (Information Disclosure) Regulations 1994; and

b) Financial components of the efficiency performance measures specified in clause 2 of Part II of that Schedule, -

and having been prepared by Counties Power Limited for the year ended 31 March 1997 for the purposes of regulation 13 of those regulations.

We certify that, having made all reasonable enquiry, to the best of my knowledge, that information has been prepared in accordance with the Electricity (Information Disclosure) Regulations 1994.

Signature

D.P. Scott

COOPERS & LYBRAND Chartered Accountants

On behalf of the Controller and Auditor-General

25 June 1997

1 April 1996 to 31 March 1997

1997

1996

1. Financial Performance Measures

(a) Accounting return on total assets, being earnings before interest and tax, divided by average total funds employed

2.2%

3.1%

(b) Accounting return on equity, being net profit after tax, divided by average total shareholders’ funds

1.8%

2.1%

(c) Accounting rate of profit

1.2%

2.3%

2. Efficiency Performance Measures

(a) Direct line cost per kilometre

$1,176

$1,091

(b) Indirect line cost per electricity customer

$79

$96

(Includes line business allocation of billing and customer liaison costs)

CERTIFICATION BY AUDITOR IN RELATION TO ODV VALUATION

We have examined the valuation report prepared by Counties Power Ltd dated 23 August 1995 which report contains valuations as at 31 March 1995.

We certify that, having made all reasonable enquiry, to the best of our knowledge, the valuations contained in the report have been made in accordance with the ODV Handbook.

Signature

Coopers & Lybrand

Chartered Accountants

Auckland

28 August 1995

COUNTIES POWER LIMITED

DISCLOSURE OF ENERGY EFFICIENCY PERFORMANCE MEASURES AND STATISTICS PURSUANT TO REGULATION 15 OF THE ELECTRICITY (INFORMATION DISCLOSURE) REGULATIONS 1994

Period 1/4/96 to 31/3/97

Energy delivery efficiency performance measures

(a) Load factor

56.3%

(b) Loss ratio

7.8%

(c) Capacity utilisation

35%

Statistics

(a) System length, broken down by voltage

33 kV

174 km

22 kV

138 km

11 kV

1410 km

400 V

1273 km

Total

2995 km

(b) Circuit length of overhead lines, broken down by voltage

33 kV

173 km

22 kV

77 km

11 kV

1410 km

400 V

1110 km

Total

2770 km

(c) Circuit length of underground cables, broken down by voltage

22 kV

61 km

33 kV

1 km

400 V

163 km

Total

225 km

(d) Transformer capacity

229,808 kVA

(e) Maximum demand

75,335 kW