PRICEWATERHOUSECOOPERS

Report of the Audit Office

To the Readers of the Financial Statements of Electra Limited (Lines Business)
for the Year Ended 31 March 2002

We have audited the financial statements of Electra Limited (Lines Business) on pages 2 to 18. The financial statements provide information about the past financial performance of Electra Limited (Lines Business) and its financial position as at 31 March 2002. This information is stated in accordance with the accounting policies set out on pages 5 to 7.

Directors' responsibilities

The Electricity (Information Disclosure) Regulations 1999 require the Directors to prepare financial statements which give a true and fair view of the financial position of Electra Limited (Lines Business) as at 31 March 2002 and the results of operations and cash flows for the year then ended.

Auditor's responsibilities

It is the responsibility of the Audit Office to express an independent opinion on the financial statements presented by the directors and report its opinion to you.

The Controller and Auditor-General has appointed Fred Hutchings of PricewaterhouseCoopers, to undertake the audit.

Basis of opinion

An audit includes examining, on a test basis, evidence relevant to the amounts and disclosures in the financial statements. It also includes assessing:

• the significant estimates and judgements made by the Directors in the preparation of the financial statements and performance information; and

• whether the accounting policies are appropriate to Electra Limited (Lines Business) circumstances, consistently applied and adequately disclosed.

We conducted our audit in accordance with generally accepted auditing standards, including the auditing standards issued by the Institute of Chartered Accountants of New Zealand. We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatements, whether caused by fraud or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements.

Our firm carries out other assurance oriented assignments on behalf of Electra Limited (Lines Business). Other than in these capacities and in our capacity as auditor, acting on behalf of the Controller and Auditor-General, we have no relationship with or interests in Electra Limited (Lines Business).

Unqualified opinion

We have obtained all the information and explanations we have required.

In our opinion:

• proper accounting records have been maintained by Electra Limited (Lines Business) as far as appears from our examination of those records; and

• the financial statements on pages 2 to 18:
  (a) comply with generally accepted accounting practice; and
  (b) give a true and fair view of the financial position of Electra Limited (Lines Business) as at 31 March 2002 and the results of its operations and cash flows for the year then ended; and
  (c) comply with the Electricity (Information Disclosure) Regulations 1999.

Our audit was completed on 28 June 2002 and our unqualified opinion is expressed as at that date.

Fred Hutchings

On behalf of the Controller and Auditor-General

PricewaterhouseCoopers
113-119 The Terrace
P.O. Box 243
Wellington, New Zealand
Telephone +64 4 462 7000
Facsimile +64 4 462 7001

PricewaterhouseCoopers
Wellington, New Zealand