2200 NEW ZEALAND GAZETTE No. 92

TAURANGA ELECTRICITY LIMITED

1. STATEMENT OF ACCOUNTING POLICIES

Accounting Entity

The Financial Statements are those of the line business and other business of Tauranga Electricity Limited.

Tauranga Electricity Limited is 100% owned by Tauranga Civic Holdings which, in turn, is 100% owned by the Tauranga District Council. There are four subsidiary companies of Tauranga Civic Holdings Limited - Aspen Contractors Ltd, Kaimai Hydropower Ltd, Tauranga Electricity Ltd and Testing Station Services Ltd. All are in a “prescribed” business relationship as defined by Regulation 3[i][a][iii] of the Electricity [Information Disclosure] Regulations 1994. However, Kaimai Hydropower Limited is the only entity carrying out activities in terms of Regulation 6 and is therefore the only entity which has been consolidated.

The period reported on is 1 April 1996 to 31 March 1997.

These Financial Statements are prepared in accordance with Regulations 6[2] and 6[3] of the Electricity [Information Disclosure] Regulations 1994 and have not been prepared for the purposes of the Financial Reporting Act 1993 or the Energy Companies Act 1992.

Principal Activities

The line business operates a line business activity as defined by Regulation 2 of the Electricity [Information Disclosure] Regulations 1994 in and around Tauranga.

Included in Other Businesses are all the other electricity activities [including the electricity trading and contracting activities] of Tauranga Electricity Limited which includes the operation of the Omanawa Power Station at 150kW output.

Accounting Convention

The Financial Statements are based on the general principles of historical cost accounting, including the going concern concept and the accrual basis of operating. These policies have been followed on a consistent basis.

Methodology of Separation of Businesses

Tauranga Electricity Limited has generally followed the Electricity Disclosure Guidelines issued by the Ministry of Commerce dated 23 June 1994, with the exceptions in the Allocation Methodologies Disclosure which are available on request in accordance with Regulation 19.

The Guidelines were issued by the Energy Policy Group of the Ministry of Commerce as guidance to assist electricity companies to comply with the Electricity [Information Disclosure] Regulations 1994.

Specific Accounting Policies

The following specific accounting policies which materially affect the measurement of financial performance and the financial position have been applied.

a) Revenue Recognition

Sales of electricity are determined on the basis of actual amounts billed to the customer during the year as determined by meter readings with an accrual for unbilled sales at year end.

b) Operating Lease Income

Income from an operating lease is recognised on a straight line basis over the term of the lease.

c) Depreciation

Depreciation is provided on a straight line or diminishing value basis on all tangible fixed assets other than freehold land, at rates calculated to allocate the assets’ cost or valuation less estimated residual value, over their estimated useful lives.

The accompanying Statement of Accounting Policies and Notes form part of and are to be read in conjunction with these Financial Statements. The Financial Statements have been prepared solely for the purpose of complying with Regulations 6[2] and 6[3] of the Electricity [Information Disclosure] Regulations 1994 and are not intended for any other purpose.

[A.DR97]