26 JANUARY NEW ZEALAND GAZETTE 151

TRANSALTA NEW ZEALAND LIMITED

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

FOR THE TWELVE MONTHS ENDED 31 MARCH 1997

■ STATEMENT OF ACCOUNTING POLICIES

Reporting Entity

The Financial Statements have been extracted from the unaudited Financial Statements of Capital Power Limited for the six months ended 30 September 1996, the unaudited Financial Statements of EnergyDirect Corporation for the six months ended 30 September 1996, and the audited Group Financial Statements of TransAlta New Zealand Limited for the six months ended 31 March 1997.

Capital Power Limited and EnergyDirect Corporation Limited amalgamated with effect from 1 October 1996. The figures in these Financial Statements represent the consolidated activity of all three companies as if the three companies had been a single entity for the full twelve months ended 31 March 1997. The Statement of Financial Position and notes related to that Statement are stated as at 31 March 1997 and reflect the activities of the new company which was formed as a result of the amalgamation, namely TransAlta New Zealand Limited. Adjustments have been made to reflect the altered capital structure of the amalgamated company, including retained earnings, upon amalgamation.

TransAlta New Zealand Limited (the “Company”) was formed on 1 October 1996 following the amalgamation of EnergyDirect Corporation Limited and Capital Power Limited under the Companies Act 1993. The Company is a public company registered under the Companies Act 1993 and is listed on the New Zealand Stock Exchange. The Company is an issuer for the purposes of the Financial Reporting Act 1993.

The Financial Statements have been prepared in accordance with the methodology required by the Gas (Information Disclosure) Regulations 1997, the Companies Act 1993, the Financial Reporting Act 1993, and in accordance with generally accepted accounting practice.

The Group consists of:

TransAlta New Zealand Limited, the parent company;
Citipower Limited, an in-substance subsidiary of TransAlta New Zealand Limited which has a lease expiring on 30 November 2001 for the electricity distribution system from Nelison Electricity Limited and in which the parent company has a 49% interest;
Pacific Energy Limited, an associate company in which the parent company has a 25% shareholding which purchases and sells electricity on behalf of its customers at the wholesale level;
Energy Supply Limited, a wholly owned subsidiary of TransAlta New Zealand Limited which markets and sells propane gas; and
National Electricity Trading Company, a wholly owned non-trading subsidiary of TransAlta New Zealand Limited.

These companies all have balance dates of 31 March.

Gas (Information Disclosure) Regulations 1997

Where practical, all costs, revenues, assets and liabilities have been directly allocated to the appropriate Distribution or Retail businesses. Other costs, revenues, assets and liabilities are allocated using the allocation bases as disclosed.

Measurement Base

The Financial Statements have been prepared on an historical cost basis, modified by the revaluation of certain assets as detailed below in the specific accounting policies. Accrual accounting is used to match revenues and expenses. Reliance is placed on the fact that the Company is a going concern.