3522 NEW ZEALAND GAZETTE No. 147

Notes to and forming part of the financial statements for the year ended 31 March 1999

19. CONTINGENT LIABILITIES

CBD Power outage

Following the CBD power outages the company has been threatened with claims for compensation. As at the date of completion of these financial statements no legal claims for compensation resulting from the power outages have been filed against the company. Adequate provision has been made in these financial statements for further costs relating to restoring the CBD network and for compensation offered by the company to its CBD customers affected by the outages.

Transpower

The company is currently negotiating with Transpower with respect to the level and basis of transmission charges. The charges Transpower are claiming from the company are in excess of the charges set out in a deed negotiated between the parties. The company does not accept any liability in respect of these charges.

20. TRANSACTIONS WITH RELATED PARTIES

During the year VECTOR Limited had the following transactions with the Auckland Energy Consumer Trust (AECT), which is the majority shareholder of VECTOR Limited:

• Payment of Dividends $9.6 million (1998: $nil)

Transfield Utility Services Limited (TUSL) was a related party for the purpose of these accounts from 1 April 1998 to 14 December 1998. During this period VECTOR Limited had the following transactions with TUSL.

• Payment for Capital work

  • Subtransmission assets $5.4 million
  • Zone substations $1.8 million
  • Distribution lines and cables $0.2 million
  • Medium voltage switchgear $0.1 million
  • Distribution transformers $0.2 million
  • Distribution substations $0.1 million
  • Low voltage lines and cables $0.1 million
  • Other system fixed assets $0.1 million

• Payment for Maintenance work $5.3 million

During the year the electricity line business had the following transfers between its "Line" and "Other" businesses. These costs are allocated on a full cost basis including an appropriate return on assets. The provision of consumer billing, sales & marketing and meter data services were provided by the internal Retail business. This business was sold on the 28th of February 1999.

• Payment to "Other" - Consumer billing $6.0 million
• Payment to "Other" - Sales and Marketing $5.2 million
• Payment to "Other" - Meter data $3.1 million
• Payment to "Other" - Information systems $12.2 million
• Payment to "Other" - Corporate services $10.2 million
• Payment to "Other" - Building occupancy $1.3 million
• Payment to "Other" - Vehicle lease $0.5 million

No related party debts have been written off or forgiven during the year. All transactions took place on a commercial arms length basis.