ALPINE ENERGY LIMITED LINES BUSINESS

Notes to and Forming Part of the Financial Statements

For the Year Ended 31 March 2007

1 General information

Alpine Energy Limited is an asset management company.
The Company is a limited liability company incorporated and domiciled in New Zealand. The address of its registered office is Meadows Road, Washdyke, Timaru.

2 Summary of significant accounting policies

These financial statements have been prepared in accordance with Generally Accepted Accounting Practice in New Zealand. They comply with the New Zealand Equivalents to International Financial Reporting Standards (NZ IFRS) and other applicable Financial Reporting Standards, as appropriate for profit orientated entities.

(a) Basis of preparation

The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

Entities reporting
The financial statements for the "Parent" are for Alpine Energy Limited as a separate legal entity.

Statutory base
Alpine Energy Limited is a company registered under the Companies Act 1993.
The financial statements have been prepared in accordance with the requirements of the Financial Reporting Act 1993 and the Companies Act 1993.

These financial statements have been prepared for the purpose of complying with the requirements of the Electricity Information Disclosure Requirements 2004.

The financial information presented is for the line business activities of Alpine Energy Limited. There are also additional activities of the Company that are not required to be reported under the Requirements.

Application of NZ IFRS 1 First time Adoption of New Zealand Equivalents to International Financial Reporting Standards (NZ IFRS 1)

Financial statements of Alpine Energy Limited until 31 March 2006 had been prepared in accordance with previous New Zealand Financial Reporting Standards (NZ FRS). NZ FRS differs in certain respects from NZ IFRS.

When preparing the Company financial statements for the year ended 31 March 2007, management has amended certain accounting and valuation methods applied in the previous NZ FRS financial statements to comply with NZ IFRS. The comparative figures were restated to reflect these adjustments.

In preparing these financial statements in accordance with NZ IFRS the Company has applied certain optional exemptions from full retrospective application of NZ IFRS.

Historical cost convention
These financial statements have been prepared under the historical cost convention, as modified by the revaluation of certain assets as identified in specific accounting policies below.

(b) Revenue recognition

Revenue comprises the fair value for the sale of goods and services, excluding Goods and Services Tax, rebates and discounts and after eliminating sales within the company. Revenue is recognised as follows:

(i) Sales of goods
Sales of goods are recognised when an entity has delivered a product to the customer. Retail sales are usually in cash or by bank transfer. The recorded revenue is the gross amount of sale.

(ii) Sales of services
Sales of services are recognised in the accounting period in which the services are rendered, by reference to completion of the specific transaction assessed on the basis of the actual service provided as a proportion of the total services to be provided.

(iii) Construction contracting
Contract revenue and expenses related to individual construction contracts are recognised on completion of each contract.