Auditors' Report

To the readers of the financial statements of The Power Company Limited – Lines Business

We have audited the accompanying financial statements of The Power Company Limited – Lines Business. The financial statements provide information about the past financial performance and cash flows of The Power Company Limited – Lines Business and its financial position as at 31 March 2004. This information is stated in accordance with the accounting policies set out in the Statement of Accounting Policies.

Directors' Responsibilities

The Commerce Commission’s Electricity Information Disclosure Requirements 2004 made under Section 57T of the Commerce Act 1986 require the Directors to prepare financial statements which give a true and fair view of the financial position of The Power Company Limited – Lines Business as at 31 March 2004, and the results of operations and cash flows for the year then ended.

Auditor's Responsibilities

Regulation 30 of the Electricity Information Disclosure Requirements 2004 requires the auditor to audit the financial statements. It is our responsibility to express an independent opinion on the financial statements presented by the Directors and report that opinion to you.

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
• whether the accounting policies are appropriate to The Power Company Limited – Lines Business’ circumstances, consistently applied and adequately disclosed.

We conducted our audit in accordance with generally accepted auditing standards in New Zealand. We planned and performed our audit so as to obtain all the information and explanations which we considered necessary. We obtained 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.

We have carried out other assignments for The Power Company Limited in the provision of other assurance services. Other than these assignments and in our capacity as auditors we have no relationship with or interests in The Power Company Limited.

Unqualified Opinion

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

In our opinion:

(a) proper accounting records have been maintained by The Power Company Limited – Lines Business as far as appears from our examination of those records; and

(b) the financial statements referred to above:

(i) comply with generally accepted accounting practice

(ii) give a true and fair view of the financial position of The Power Company Limited – Lines Business as at 31 March 2004 and the results of its operations and cash flows for the year then ended; and

(iii) comply with the Electricity Information Disclosure Requirements 2004.

Our audit was completed on 20 December 2004 and our unqualified opinion is expressed as at that date.

PricewaterhouseCoopers
Forsyth Barr House
The Octagon
PO Box 5848
Dunedin
New Zealand
Telephone +64 3 477 8784
Facsimile +64 3 477 1186

Dunedin

PricewaterhouseCoopers