8 SEPTEMBER NEW ZEALAND GAZETTE 2689

WAITAKI POWER LIMITED

STATEMENT OF ACCOUNTING POLICIES

1. REPORTING ENTITY

1.1 Waitaki Power Limited is an unlisted Company registered under the Companies Act 1993. Waitaki Power Limited is a reporting entity for the purpose of the Financial Reporting Act 1993.

2. SPECIAL PURPOSE FINANCIAL STATEMENTS

2.1 These financial statements have been prepared for the purpose of complying with the requirements of the Electricity (Information Disclosure) Regulations 1999.

3. MEASUREMENT BASE

3.1 The measurement base adopted is that of historical cost for all assets except Land and Buildings for which modified historical cost has been adopted.

3.2 Accrual accounting is used to match expenses and revenues.

3.3 Reliance is placed on the fact that the Company is a going concern.

4. ACCOUNTING POLICIES

4.1 Accounts Receivable are shown at expected realisable value after providing for doubtful debts.

4.2 Inventories are valued at the lower of cost and net realisable value. Serial numbered stock is recorded at their individual cost, while other stock is recorded at weighted average cost.

4.3 Land and buildings are valued at net current value. Distribution and Substation assets in place prior to 1 April 1987 and Motor Vehicles, Plant and Equipment purchases prior to 1 April 1987 have been valued as follows:

A) Distribution — current written down book value as at 31 March 1987 less 20%.
B) Substation Equipment — depreciated replacement cost certified internally by a registered engineer.

All other assets are valued at cost less accumulated depreciation:

• Globo Distribution System: 5.0% SL
• Distribution System: 5.0% - 9.5% DV
• Substation Transformers etc: 7.5% DV
• Distribution Transformers: 7.5% DV
• Buildings: 1.0% SL - 2.5% SL
• Office Equipment and Furniture: 12.0% DV - 50% DV
• Plant/Machinery: 10.0% DV - 50% DV
• Motor Vehicles: 15.0% DV - 26.0% DV

These accounts are exclusive of GST except for Debtors and Creditors.

4.4 Income tax expense has been 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 losses, benefits from income tax losses, is only recognised if there is virtual certainty of realisation.

4.5 Investments are stated at cost.

4.6 Contributions received towards capital works are charged to the Statement of Financial Performance and shown as income earned during the year in which they are received.

4.7 Employee Entitlements. Provisions is made in respect of the Company’s liability for annual, long-service and retirement leave. Annual and long-service leave has been calculated on an actual entitlement basis at current rates of pay, whilst the other provisions have been calculated on an actuarial basis at current rates of pay.

5. CHANGE IN ACCOUNTING POLICY

5.1 Accounting policies have been applied consistently with the previous year.

6. METHODOLOGY OF SEPARATION OF BUSINESS

6.1 The costs, revenues, assets and liabilities for the 1999 disclosures have been allocated in accordance with the Electricity (Information Disclosure) Regulations 1999. The basis of allocation adopted this year is the avoidable cost methodology.