13 OCTOBER NEW ZEALAND GAZETTE 3551

16. RELATED PARTY TRANSACTIONS

(a) The Line business enters into transactions with the “Other” Business.

• The relationship is managed on an arms length basis, with significant contracts generally awarded by the Line business on a competitive tendering basis.

(b) & (c)

The services provided by the “Other” Business generally include normal electrical construction and maintenance services related to the Line business electrical network.

(d) Services provided were in the following categories and at total prices as indicated in $'000:

• Construction of subtransmission assets 24
• Construction of zone substations 6
• Construction of distribution lines and cables 848
• Construction of medium voltage switch gear -
• Construction of distribution transformers 127
• Construction of low voltage reticulation 472
• Construction of other system fixed assets 36
• Maintenance of assets 742

(e) Services provided throughout the financial year.

(f) There were no outstanding balances owing at year end for services performed by the Other business for the Line business, as payment is effected by way of accounting entry at the end of each month.

(g) No debts arising from related party transactions have been written off or forgiven during the year.

(h) No transactions were undertaken at a nil or nominal value, other than minor items as would occur in a normal arms length relationship.

17. ODV VALUATION

The ODV valuation of Counties Power Limited Line Business Distribution System assets, excluding meters and relays, was calculated at $69,196,560 as at 31 March 1998 by Worley Consultants.

18. METERING BUSINESS

Meter ownership, income and expenses have in prior periods been accounted for as part of the “Line” Business. In the year ended 31 March 1999 Metering income and expenses have been accounted for as part of the “Other” Business as required by the Electricity Information Disclosure Handbook. Meter fixed assets have been transferred at book value.

Derivation Table

| Fixed Assets at year beginning (FA) | FA | | 40,209 | N/A | 40,209 |
| Fixed Assets at year end (FA) | | add | 42,057 | | 42,057 |
| Net Working Capital at year beginning (NWC) | | add | 11,270 | N/A | 11,270 |
| Net Working Capital at year end (NWC) | | add | 2,186 | | 2,186 |
| Average total funds employed (ATFE) | c = [FA + NWC]1/2 | | divide by 2 | 41,591 | N/A | divide by 2 | 41,591 |

| Total Equity at year beginning (TE) | | | | 32,953 | N/A |
| Total Equity at year end (TE) | | | | 33,853 | N/A |
| Average total equity | k = [TE]1/2 | | N/A | divide by 2 | 33,413 |

| WUC at year beginning (WUC) | | | | 6,532 | | 6,532 |
| WUC at year end (WUC) | | | | 6,532 | | 6,532 |
| Average total Works under construction | e = [WUC]1/2 | | divide by 2 | 3,266 | divide by 2 | 3,266 |

| Revaluations | r | | N/A | N/A | 0 |

| Goodwill asset at year beginning (GW) | | | N/A | N/A | N/A |
| Goodwill asset at year end (GW) | | | N/A | add | N/A |
| Average Goodwill asset | m = [GW]1/2 | | N/A | divide by 2 | N/A |

| Subvention payment at year beginning (S) | | | N/A | add | N/A |
| Subvention payment at year end (S) | | | N/A | 0 | N/A |
| Subvention payment tax adjustment at year end | | | N/A | deduct | N/A |
| Average subvention payment & related tax adjustment | V = [S + s]1/2 | | N/A | divide by 2 | N/A |

| System Fixed assets at year beginning at book value (SFA) | | 35,815 | | 35,815 | 35,815 |
| System Fixed assets at year end at book value (SFA) | | add | 31,169 | | 31,169 |
| Average value of system fixed assets at book value | T = [SFA]1/2 | | divide by 2 | 33,492 | divide by 2 | 33,492 |

| System Fixed assets at year beginning at ODV value (SFA) | | 75,161 | | 75,161 | 75,161 |
| System Fixed assets at year end at ODV value (SFA) | | add | 74,871 | | 74,871 |
| Average value of system fixed assets at ODV value | h = [SFA]1/2 | | divide by 2 | 75,016 | divide by 2 | 75,016 |

| Denominator (as adjusted) | | c = e + f + h | 79,849 | k = TE | 33,413 | c = ATFE | 79,849 |

| Financial Performance Measure: | EBIT/ATFE x 100| | 7.25% | NPAT/ATE x 100 | 13.12% | EBIT/ATFE x 100 | 5.87% |

19. ADDITIONAL DISCLOSURES

The Electricity (Information Disclosure) Regulations 1999 and the Electricity Information Disclosure Handbook require that where a Line business has nothing to report in respect of certain items, they must be disclosed as “nil”. The following are such items not disclosed elsewhere in the financial statements, and which have a nil balance:

Other Tangible Assets, Goodwill, Other Intangible Assets, Total Intangibles, Provision for Dividend.

COUNTIES POWER LIMITED – LINE BUSINESS

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 1999

CERTIFICATION OF PERFORMANCE MEASURES BY AUDITORS

We have examined the information being -

a) The derivation table specified in regulation 16; and

b) Financial performance measures specified in clause 1 of Part 3 of Schedule 1 of the Electricity (Information Disclosure) Regulations 1999; and

c) Financial components of the efficiency performance measures specified in clause 2 of Part 3 of that Schedule,

and having been prepared by Counties Power Limited and dated 31 March 1999 for the purposes of regulation 15 of those regulations.

We certify that, having made all reasonable enquiry, to the best of our knowledge, that information has been prepared in accordance with the Electricity (Information Disclosure) Regulations 1999.\n
A S Wotton
PricewaterhouseCoopers
Chartered Accountants
On behalf of the Controller and Auditor-General
23 August 1999