84 NEW ZEALAND GAZETTE, No. 4 11 JANUARY 2008

Network Waitaki Limited Lines Business

1 Statement of Accounting Policies

REPORTING ENTITY

• The financial statements presented here are for the Lines Business of Network Waitaki Limited.
• The financial statements have been prepared in accordance with the Companies Act 1993 and the Financial Reporting Act 1993.
• These financial statements have been prepared for the purpose of complying with the requirements of the Electricity Information Disclosure Requirements 2004.
• The Lines Business operates a lines business activity, as defined by Regulation 2 of the Electricity Information Disclosure Regulations, in the Waitaki area.

MEASUREMENT BASE

• The financial statements have been prepared on the basis of historical cost with the exception of certain items for which specific accounting policies are identified.
• Accrual accounting is used to match expenses and revenues.
• Reliance is placed on the fact that the Company is a going concern.

ACCOUNTING POLICIES

The financial statements are prepared in accordance with New Zealand generally accepted accounting practice. The accounting policies that materially affect the measurement of financial performance, financial position and cash flows are set out below.

Revenue

Goods and Services
Revenue comprised the amounts received and receivable for goods and services supplied to customers in the ordinary course of business.

Investment Income
Interest is accounted for as earned.

Customer Contributions
Contributions from customers in relation to the construction of new lines for the network are accounted for as income in the year in which they are received.

Property, Plant & Equipment

All Property, Plant and Equipment are initially recorded at cost. Reticulation System Property, Plant and Equipment is subsequently revalued to net current value as determined by an independent valuer using the depreciated replacement cost valuation method. Other Property, Plant and Equipment are stated at cost less an allowance for depreciation.

Reticulation System Property, Plant and Equipment was last revalued at 31 March 2004 to ODV. All additions since the last revaluation are carried at cost less an allowance for depreciation in the Statement of Financial Position.

In order to comply with the Electricity Information Disclosure Requirements 2004, Network Waitaki has provided a reconciliation of Reticulation System Property, Plant and Equipment at ODV for the year ended 31 March 2007.

Depreciation

Depreciation is provided on all Property, Plant and Equipment, other than freehold land, at rates that will allocate the assets' cost or valuation, to their residual values, over their estimated useful lives. All other assets are depreciated on a straight line basis.

The useful lives and associated depreciation rates for major classes of assets used in the preparation of the financial statements are as follows:

| Distribution system | 10 to 70 years | 1.4% to 10.0% |
| Freehold building | 40 to 100 years | 1.0% to 2.5% |
| Motor vehicles | 4 to 7 years | 15.0% to 26.0% |
| Plant and equipment | 2 to 14 years | 7.5% to 50.0% |
| Office furniture and equipment | 3 to 10 years | 10.0% to 33.0% |