INFORMATION FOR DISCLOSURE
PURSUANT TO SECTION 57T OF THE COMMERCE ACT 1986
BULLER ELECTRICITY LIMITED
INFORMATION DISCLOSURE
Information Disclosure Disclaimer
The information disclosed has been prepared in accordance with and for the specific use intended in the Electricity Act and information disclosure requirements. No responsibility will be accepted for any third party that may use or rely on this report or any part thereof without the express written permission of Buller Electricity Limited.
Except as allowed for by the Electricity Act 1992 and information disclosure requirements promulgated by the Act, neither the whole or any part of the information disclosed or any reference thereto may be included in any published document, circular or statement or published in any way without Buller Electricity's written approval of the form and context in which it may appear.
The information disclosed is for the line business as described in the Electricity Information Disclosure Requirements 2004. There are also additional activities of the company that are not required to be reported under the Requirements.
IN ACCORDANCE WITH
THE ELECTRICITY INFORMATION DISCLOSURE
REQUIREMENTS 2004
CERTIFICATION OF FINANCIAL STATEMENTS, PERFORMANCE MEASURES AND STATISTICS DISCLOSED BY DISCLOSING ENTITIES (OTHER THAN TRANSPOWER)
WE, Peter William Young and Kevin Fredrick Poynter, directors of Buller Electricity Limited certify that, having made all reasonable enquiry, to the best of our knowledge,-
(a) The attached audited financial statements of Buller Electricity Limited prepared for the purposes of requirement 6 of the Commerce Commission's Electricity Information Disclosure Requirements 2004 comply with those Requirements; and
(b) The attached information, being the derivation table, financial performance measures, efficiency performance measures, energy delivery efficiency performance measures, statistics and reliability performance measures in relation to Buller Electricity Limited and having been prepared for the purposes of requirements 14, 15, 20 and 21 of the Electricity Information Disclosure Requirements 2004, comply with those Requirements.
The valuations on which those financial performance measures are based are as at 31 March 2006.
For and on behalf of Directors
P W YOUNGDirector Date: 30 October 2006
K F POYNTERDirector Date: 30 October 2006
Statement of Financial Performance
for the year ended 31 March 2006
Note 2006$ 2005$
Total Operating Revenue 5,528,656 5,074,548
Total Operating Expenditure 4,496,117 4,402,919
Operating Surplus before Interest Expense and Income Tax 1,032,539 671,629
Interest Expense 224,278 209,048
Operating Surplus before Income Tax 808,261 462,581
Income Tax 2 115,000 (36,000)
Net Surplus after Tax 693,261 498,581
Statement of Movements in Equity
for the year ended 31 March 2006
Note 2006$ 2005$
Equity as at 1 April 2005 19,431,354 18,932,773
Net Surplus after Tax for the Year 693,261 498,581
Revaluation Reserve Movements (1,223,747) 0
Total Recognised Revenues and Expenses for the Year (530,486) 498,581
Reallocation of Equity
Dividend 0 0
Equity as at 31 March 2006 18,900,868 19,431,354
Statement of Financial Position as at 31 March 2006
Note 2006$ 2005$
Equity
Share Capital 4,964,358 4,964,358
Retained Earnings 4,478,783 3,785,522
Reserves 3 9,457,727 10,681,474
Total Equity 18,900,868 19,431,354
Represented by:
Current Assets
Cash at Bank and on Hand 19,753 102,017
Term Deposits 0 0
Receivables and Prepayments 504,805 499,079
Tax Refund DueDeferred Tax 106,95124,000 300,0920
Other 256,054 261,609
911,563 1,162,797
Current Liabilities
Creditors 307,462 412,729
Provision for Dividend 0 0
Taxation Payable 0 0
Other Current Liabilities 4,407 45,064
Total Liabilities 311,869 457,793
Net Current Assets 599,694 705,004
Non Current Assets
Property, Plant and Equipment 4 20,172,716 21,259,892
Long Term Investments 168,973 756,973
20,341,689 22,016,865
Term Liabilities
Loans 2,040,515 3,290,515
Net Assets 18,900,868 19,431,354
For and on Behalf of the Board
P W Young K F Poynter
Director Director
30 October 2006 30 October 2006
Statement of Cashflows for the year ended 31 March 2006
Note 2006$ 2005$
Cash Flows from Operating Activities
Cash was provided from:
Receipts from customers 5,170,329 4,923,519
Interest received 0 437
Taxation Refund 154,539 0
5,324,868 4,923,956
Cash was disbursed to:
Payment to Suppliers & Employees 3,811,474 3,890,818
Interest Paid 224,278 209,047
Income Tax Paid 102,110 269,474
4,137,862 4,369,339
Net cash inflow from operating activities 11 1,187,006 554,617
Cash Flows from Investing Activities
Cash was provided from:
Sale of Property, Plant and Equipment 0 0
Sale of Investments 588,000 2,386
588,000 2,386
Cash was applied to:
Purchase of Investments
Purchase of Property, Plant and Equipment 607,270 2,228,830
607,270 2,228,830
Net cash outflow from investing activities (19,270) (2,226,444)
Cash Flow from Financing Activities
Cash was provided from:
Borrowing 0 2,600,000
0 2,600,000
Cash was applied to:
Dividend Paid 0 0
Loan Payments 1,250,000 850,000
1,250,000 850,000
Net cash inflow (outflow) from financing activities (1,250,000) 1,750,000
Net Increase/(Decrease) in cash held (82,264) 78,172
Add opening cash brought forward 102,017 23,845
Ending Cash and Term Deposits carried forward 19,753 102,017
End of Year Balance Represented By:
Cash at Bank and on Hand 19,753 102,017
Short Term Deposits 0 0
19,753 102,017
Notes to and forming part of the Financial Statements
for the year ended 31 March 2006
1 STATEMENT OF ACCOUNTING POLICIES
Reporting Entity
Buller Electricity Limited is a company registered under the Companies Act 1993 and owns 100% of Buller Energy Limited and 100% of Buller Communications Limited.
These financial statements have been prepared in accordance with the Companies Act 1993, the Financial Reporting Act 1993 and Section 44 of the Energy Companies Act 1992.
Measurement Base
The general accounting policies recognised as appropriate for the measurement and reporting of financial performance, movements in equity, cash flows and financial position under the historical cost method, as modified by the revaluation of certain assets, have been followed by the Company.
Specific Accounting Policies
The following particular accounting policies which materially affect the measurement of the financial performance and the financial position have been applied:
a) Revenue
Fixed and variable line charges are recognised as actual amounts invoiced during the period. Contributions received from customers towards the cost of reticulating subdivisions and constructing line extensions are recognised as revenue in the year received.
b) Receivables
Receivables are stated at their estimated realisable value after providing for doubtful debts. All known bad debts have been written off during the year.
c) Investments
Investments are recorded at the lower of cost or net realisable value.
d) Property, Plant and Equipment
The Distribution System Assets are stated at valuation, as determined every 3 years by a valuer. These assets were revalued on 31 March 2006 by Mike McSherry MIPENZ CPENG IPER Chief Executive Buller Electricity Limited using the depreciated replacement cost basis. Subsequent additions to the distribution system assets are recorded at cost less disposals.
Land and buildings were revalued by Coast Valuations Limited an independent registered valuer as at 31 March 2004 in accordance with the New Zealand Institute of Valuers Asset Valuation Standards at net current value.
All other fixed assets are recorded at cost less accumulated depreciation to date.
e) Depreciation
Depreciation is provided on a straight line basis on all Property, Plant and Equipment (Land is not depreciated), at rates calculated to allocate the assets cost less expected residual value over their estimated useful lives as follows:
Buildings 40 - 50 years
Distribution System Assets 3 - 60 years
Other 3 - 10 years
Depreciation has been charged on a monthly basis on assets acquired and which became operational during the month.
f) Employee Entitlements
Employee entitlements to salaries and wages, annual and long service leave and other benefits are recognised when they accrue to employees. Allowance is also made for the present value of future staff retirement and gratuity benefits.
g) Goods and Services Tax (GST)
The Statement of Financial Performance and Statement of Cash Flows have been prepared so that all components are stated exclusive of GST. All items in the Statement of Financial Position are stated net of GST with the exception of receivables and creditors which include GST.
h) Income Tax
Income tax expense is recognised on the surplus before taxation adjusted for permanent differences between taxable and accounting income. Deferred tax is calculated using the partial basis under the liability method. This basis is applied by considering the cumulative income tax effect of all timing differences, but recognising in the financial statements, as deferred tax, the income tax effect only to the extent that it can be foreseen to crystallise in the future. Deferred tax assets are only recognised to the extent that there is virtual certainty of realisation.
i) Financial Instruments
Financial instruments carried in the Statement of Financial Position include cash and bank balances, investments, receivables and trade creditors. These instruments are carried at their estimated fair value.
j) Statement of Cash Flows
The following are the definitions of the terms used in the Statements of Cash Flows.
(i) Cash means all cash balances, bank accounts and demand deposits which the company invests as part of its day to day cash management.
(ii) Operating activities include cash received from all revenue sources of the company and records all cash payments made by the company for the supply of goods and services.
(iii) Investing activities are those activities relating to the ownership of shares in investment companies and disposal/acquisition of fixed assets.
(iv) Financing activities are those activities which change the debt and equity structure of the company.
CHANGES IN ACCOUNTING POLICIES
There have been no changes in accounting policies this year.
2006$ 2005$
2 INCOME TAX
Operating Surplus before Income Tax 808,261 462,581
Prima Facie Taxation at 33% 266,726 152,651
Plus tax losses offset (18,726) (107,651)
Plus Tax effect of permanent differences (115,000) (45,000)
Less Tax effect of timing differences not Recognised 6,000 (36,000)
Timing Differences on Holiday Pay (24,000) 0
Total Income Tax Expense (Benefit) 115,000 (36,000)
The income tax expense comprises:
- current taxationDeferred Tax Charge/(Credit) 139,000(24,000) (36,000)0
115,000 (36,000)
A deferred tax liability of $1,917,034 has not been recognised (2005 $1,887,712). This liability primarily relates to asset revaluations of the reticulation assets which would only crystallise on disposal.
3 RESERVES
Share Premium Reserve 255,796 255,796
Revaluation Reserve Land and Buildings 93,454 93,454
Revaluation Distribution System 9,074,427 10,298,174
Revaluation other Assets 34,050 34,050
9,457,727 10,681,474
4 PROPERTY, PLANT & EQUIPMENT
Distribution System Assets
At Valuation - end of previous year 20,128,645 18,653,438
System Fixed Assets acquired during the year 893,252 2,193,435
Less Disposal of Stock 0 0
Less Depreciation on System Fixed Assets (744,880) (718,228)
Revaluation Movement (1,223,747) 0
System Fixed Assets at valuation - end of financial year 19,053,270 20,128,645
Land and Buildings
At Valuation 940,094 940,094
Accumulated Depreciation (59,539) (42,190)
Net Book Value at end of year 880,555 897,904
Customer Billing and IS
Cost 373,297 329,458
Accumulated Depreciation (311,665) (279,427)
Net Book Value at end of year 61,632 50,031
Office Equipment
Cost 96,835 94,044
Accumulated Depreciation (61,747) (52,162)
Net Book Value 35,088 41,882
2006$ 2005$
Motor Vehicles
Cost 128,771 128,771
Accumulated Depreciation (57,467) (41,921)
Net Book Value 71,304 86,850
Other
Cost 200,350 184,430
Accumulated Depreciation (129,483) (129,850)
Net Book Value 70,867 54,580
Total Net Book Value 20,172,716 21,259,892
The system fixed assets are stated at valuation, as determined every 3 years by a valuer. These assets were revalued on 31 March 2006 to a value of $19,053,270 by Mike McSherry MIPENZ CPENG IPER Chief Executive Buller Electricity Limited using depreciated replacement cost basis. Land and Buildings were revalued by Coast Valuation Limited on 31 March 2004.
5 SEGMENTAL REPORTING
Buller Electricity operates predominantly in one industry, distribution of electricity. All its core functions are carried out within the Buller region conveying electricity and managing and operating assets of the line business.
6 RELATED PARTIES
The related parties of Buller Electricity Limited are the Buller Electric Power Trust, Buller Energy Limited, Buller Communications Limited. The Buller Electric Power Trust owns 100% of Buller Electricity Limited who owns 100% of Buller Communications Limited. The Buller Electric Power Trust loaned to Buller Electricity Limited $1,740,515 by way of an interest bearing, unsecured loan, repayable on demand. Buller Electricity Limited has on loan to Buller Communications Limited $242,873 against which there is a provision of $74,000, resulting in a net balance of $168,873.
Transactions between Related Parties
The Line Business purchased line construction and maintenance services at cost including overheads from its contracting division for the period 1 April 2005 to 31 March 2006. At year end there was an outstanding debtor of $256,054 for related parties and no debts were written off or forgiven during the year. The following Table lists the value of the related party transactions.
2006$ 2005$
Construction of subtransmission assets 28,030 0
Construction of zone substations 132,257 549,562
Construction of distribution lines and cables 389,218 173,487
Construction of medium voltage switchgear 43,944 71,431
Construction of distribution transformers 101,992 46,503
Construction of distribution substations 48,976 46,462
Construction of low voltage reticulation 148,834 49,954
Construction of other system fixed assets 0 0
Maintenance of assets 720,377 552,788
Consumer connections and disconnections 0 0
Other Services 0 4,601
7 FINANCIAL INSTRUMENTS
(a) Credit Risk
i) In the normal course of business the company incurs credit risks being cash, bank deposits and debtors transactions with electricity retailers and financial institutions.
ii) The company has a credit evaluation policy and requires a bond or a guarantee from customers.
iii) The company has concentrations of credit risk in accounts receivable balances. Of total electricity line charges receivable, 100% are due from TrustPower Limited, Meridian Energy Limited, Genesis Power Limited, Mercury Energy Limited and Contact Energy Limited.
iv) The company has a policy that minimises its credit risk to financial institutions by limiting the amount of cash and short term investments placed with any one financial institution at any one time.
(b) Interest Rate Risk
i) All term loans are unsecured and subject to negative pledge undertakings. The term loans are not hedged and are at the floating 90 day bill rate. The company currently has $5million rolling loan facilities.
ii) The company has a loan of $1,740,515 that is interest bearing (8%), unsecured and repayable on demand.
iii) Deposit interest rates range from 7.30% pa - 7.80% pa at balance date 31 March 2006.
c) Fair Values
The directors consider that the carrying amount of financial instruments in the statement of financial position is equal to their fair value.
8 COMMITMENTS
There are no capital commitments at 31 March 2006. (2005 $Nil)
9 CONTINGENT LIABILITIES
There is a contingent liability for discrepancies that may arise on the reconciliation of energy transported versus energy charged by the various energy retailers. The potential or maximum liability is not able to be estimated. (2005 $Nil)
10 PRICE THRESHOLD COMPLIANCE
Buller Electricity Limited was in breach of the price path thresholds set by the Commerce Commission in September 2003 and March 2004. Directors believe that any liability arising from these breaches will not be material. The company was not in breach of the price and quality thresholds at March 2006.
2006$ 2005$
11 RECONCILIATION OF NET SURPLUS TO NET CASH FLOW FROM OPERATING ACTIVITIES
Reported Net Surplus after tax 693,261 498,581
Add (Less) Non Cash Items:
Depreciation 823,433 796,311
Vested Assets (352,734) (146,716)
Add (Less) Movements in Working Capital Items: 0
Decrease (Increase) in Tax Receivable 169,141 (305,474)
Decrease (Increase) in Receivables (5,726) (4,360)
(Decrease) Increase in Creditors (145,924) (22,116)
(Decrease)Increase in Tax Payable 0 0
Decrease (Increase) in other Current Assets 0 0
Decrease (Increase) in Interdivisional Balance 5,555 (261,609)
493,745 554,617
Add (Less) Movements in Non-current Items:
Net Loss (Gain) on Disposal of Assets 0 0
Net Cash Inflows from Operating Activities 1,187,006 554,617
12 Information to be Disclosed in Financial Statements under requirement 6 of the Electricity Information Disclosure Requirements 2004.
Statement of Financial Position Disclosure (Schedule 1, Part 2) 2006$ 2005$
1 Current Assets
(a) Cash & Bank balances 19,753 102,017
(b) Short term investments 0 0
(c) Inventories 0 0
(d) Accounts receivable 504,805 499,079
(e) Other current assets not listed in (a) to (d) 387,005 561,701
(f) Total current assets 911,563 1,162,797
2 Fixed Assets
(a) System fixed assets 19,053,270 20,128,645
(b) Customer billing and information system assets 61,632 50,030
(c) Motor Vehicles 71,304 86,851
(d) Office Equipment 35,088 41,882
(e) Land and Buildings 880,555 897,904
(f) Capital works under construction 0
(g) Other fixed assets not listed in (a) to (f) 70,867 54,580
(h) Total fixed assets 20,172,716 21,259,892
3 Other tangible assets not listed above 168,973 756,973
4 Total tangible assets 21,253,252 23,179,662
5 Intangible assets
(a) Goodwill 0 0
(b) Other intangible not listed in (a) 0 0
(c) Total intangible assets 0 0
6 Total Assets 21,253,252 23,179,662
7 Current Liabilities
(a) Bank Overdraft 0
(b) Short term borrowings 0
(c) Payables and accruals 307,462 412,729
(d) Provision for dividend payable 0 0
(e) Provision for income tax 0 0
(f) Other Current Liabilities not listed in (a) to (e) 4,407 45,064
(g) Total Current Liabilities 311,869 457,793
8 Non-current Liabilities
(a) Payables and accruals 0 0
(b) Borrowings 2,040,515 3,290,515
(c) Deferred tax 0 0
(d) Other Non-current Liabilities not listed in (a) to (e) 0 0
(e) Total Non-current Liabilities 2,040,515 3,290,515
9 Equity
(a) Shareholders equity
(i) Share Capital 4,964,358 4,964,358
(ii) Retained Earnings 4,478,783 3,785,522
(iii) Reserves 9,457,727 10,681,474
(iv) Total Shareholders equity 18,900,868 19,431,354
(b) Minority interests in subsidiaries 0
(c) Total Equity 18,900,868 19,431,354
(d) Capital Notes 0
(e) Total capital funds 18,900,868 19,431,354
10 Total equity and liabilities 21,253,252 23,179,662
Statement of Financial Performance Disclosure (Schedule 1, Part 2)
2006$ 2005$
11 Operating revenue
(a) Revenue from line/access charges 5,027,999 4,848,060
(b) Revenue from "Other" business (transfer payment) 5,930 6,327
(c) Income from interest on bank & short term investments 0 437
(d) AC loss rental rebates 147,144 70,474
(e) Other operating revenue not listed in (a) to (d) 347,583 149,251
(f) Total operating revenue 5,528,656 5,074,549
12 Operating expenditure
(a) Transmission Charges 1,769,223 1,944,759
(b) Transfer payments to "Other" business
(i) Asset maintenance 720,377 551,574
(ii) Consumer disconnections and reconnections 0 0
(iii) Meter data 0 0
(iv) Consumer based load control 0 0
(v) Royalty and patent expenses 0 0
(vi) Avoided transmission charges for own generation 0 0
(vii) Other goods & services not listed in (i) to (vi) above 0 0
(viii) Total transfer payment to the "Other" business 720,377 551,574
(c) Payments to non-related entities
(i) Asset maintenance 116,553 91,770
(ii) Consumer disconnections and reconnections 0 0
(iii) Meter data 0 0
(iv) Consumer based load control 0 0
(v) Royalty and patent expenses 0 0
(vi) Total of specified expenses to non-related parties 116,553 91,770
(d) Employee salaries, wages and redundancies 441,634 451,245
(e) Consumer billing and information system expense 0 0
(f) Depreciation on
(i) System fixed assets 721,590 713,143
(ii) Other assets not listed in (i) 105,815 83,167
(iii) Total depreciation expense 827,405 796,310
(g) Amortisation of
(i) Goodwill 0 0
(ii) Other intangibles 0 0
(iii) Total amortisation of intangibles 0 0
(h) Corporate and administration 320,908 257,062
(i) Human resource expense 67,833 32,824
(j) Marketing and advertising 0 0
(k) Merger and acquisition expenses 0 0
(l) Takeover defence expenses 0 0
(m) Research and development expenses 0 0
(n) Consultancy and legal expenses 19,691 2,660
(o) Donations 40,149 38,263
(p) Directors fees 83,750 77,917
(q) Audit fees
(i) Audit fees paid to principal auditors 30,400 29,000
(ii) Audit fees paid to other auditors 0
(iii) Fees paid for other services provided by auditors 46,903 117,983
(iv) Total auditors fees 77,303 146,983
(r) Costs of offering credits
(i) Bad debts written off 0 0
(ii) Increase in estimated doubtful debts 0 0
(iii) Total costs of offering credit 0 0
(s) Local authority rates 11,292 11,553
(t) AC loss-rental rebates expense 0 0
(u) Rebates to customers due to ownership interest
(v) Subvention payments 0 0
(w) Unusual expenses 0 0
(x) Other expenditure not listed in (a) to (w) 0 0
13 Total operating expenditure 4,496,117 4,402,919
14 Operating surplus before interest and income tax 1,032,539 671,629
15 Interest
(a) Interest expense on borrowings 224,278 209,048
(b) Financing charges related to finance leases 0 0
(c) Other interest expense 0 0
(d) Total interest expense 224,278 209,048
16 Operating surplus before income tax 808,261 462,581
17 Income Tax 115,000 (36,000)
18 Net surplus after tax 693,261 498,581
19 Annual Valuation Reconciliation Report for the year ending 31 March 2006
System fixed assets at ODV - end of the previous financial year 20,128,645 18,653,438
Add system fixed assets acquired during the year at ODV 893,252 2,193,435
Less depreciation on system fixed assets at ODV (744,880) (718,228)
Add revaluations of system fixed assets 0 0
Equals system fixed assets at ODV - end of financial year 20,277,017 20,128,645
13 PERFORMANCE MEASURES
Disclosure of financial performance measures and efficiency performance measures under requirement 14 of the Electricity Information Disclosure Requirements 2004.
2006 2005 2004 2003
1 Financial Performance Measures
(a) Return on Funds 4.72% 3.34% 6.8% 5.1%
(b) Return on Equity 3.52% 2.67% 4.6% 3.6%
(c) Return on Investment 3.85% 3.14% 4.9% 3.6%
2 Efficiency Performance Measures
(a) Direct line costs per kilometre $2,184 $1,830 $2,548 $2,494
System Length Km 586 598 608 598
(b) Indirect line costs per electricity customer $147 $136 $111 $135

Total consumers 4,211 4,178 4,171 4,187
Disclosure of energy delivery efficiency performance measures under requirement 20 of the Electricity Information Disclosure Requirements 2004.
2006 2005 2004 2003
1 Energy Delivery efficiency performance measures:
(a) Load Factor (=a/b*c*100) 66% 66% 64% * 63%*
a = kWh of electricity entering system 45,579,301 45,629,456 44,037,981 * 42,764,385*
b = Maximum demand 7,846 7,903 7,820 * 7,749*
c = Total number of hours in year 8,760 8,760 8,784 8,760
(b) Loss Ratio (=a/b*100) 10.96% 9.78% 8.98% * 11.44%*
a = losses in electricity in kWh 4,993,733 4,460,951 3,955,387 * 4,893,797*
b = kWh of electricity entering system 45,579,301 45,629,456 44,037,981 * 42,764,385*
(c) Capacity Utilisation (=a/b*100) 27% 27% 27% * 27%*
a = Maximum demand 7,846 7,903 7,820 * 7,749*
b = Transformer Capacity 29,103 28,735 28,550 28,775
2 Statistics
(a) System Length (Total) (kms)
Circuit Kilometres 110kV 2 2 1 0
Circuit Kilometres 33kV 102 101 103 111
Circuit Kilometres 11kV 355 367 374 357
Circuit Kilometres 400V 128 128 130 130
Total 587 598 608 598
(b) Circuit Length (Overhead) (kms)
Circuit Kilometres 110kV 2 2 1 0
Circuit Kilometres 33kV 101 101 103 111
Circuit Kilometres 11kV 345 360 370 351
Circuit Kilometres 400V 115 118 118 118
Total Overhead 563 581 592 580
(c) Circuit Length (Underground) (kms)
Circuit Kilometres 110kV 0.0 0.0 0.0 0.0
Circuit Kilometres 33kV 0.5 0.2 0.2 0.2
Circuit Kilometres 11kV 10.3 7.0 4.2 5.0
Circuit Kilometres 400V 12.7 10.0 11.8 11.6
Total Underground 23.5 17.2 16.2 16.8
(d) Transformer Capacity (In Kilovolt Amperes) 29,103 28,735 28,550 28,775
(e) Maximum Demand (kW) 7,846 7,903 7,820 * 7,749*
2006 2005 2004 2003
(f) Total Electricity Entering the system (before losses of electricity, kWh) 45,579,301 45,629,456 44,037,981 * 42,764,385*
(g) Electricity conveyed for each retailer including losses
Retailer 1 22,501,318 23,506,625 23,626,294 27,950,508
Retailer 2 12,893,416 12,559,755 12,559,535 7,341,546
Retailer 3 3,371,825 3,017,768 3,073,096 2,578,535
Retailer 4 0 0 0 0
Retailer 5 1,138,848 2,044,202 823,668 0
Retailer 6 680,161 40,155 0 0
40,585,568 41,168,505 40,082,593 * 37,870,589*
(h) Total Customers 4,211 4,178 4,171 4,187
* Restated to remove previous information that related to one customer supplied directly from the Transpower Grid Exit Point that had previously been included as though it was supplied from the Buller Electricity Limited network.
Disclosure of reliability performance measures under requirement 21 of the Electricity Information Disclosure Requirements 2004.
2006 2005 2005 2003
1 Total Number of Interruptions
Class A - Planned by Transpower 0 0 0 0
Class B - Planned by Line Owners 39 24 44 29
Class C - Unplanned by Line Owners 38 32 34 44
Class D - Unplanned by Transpower 0 0 0 0
Class E - Unplanned by ECNZ 0 0 0 0
Class F - Unplanned by other generation 0 0 0 0
Class G - Any Other Loss of Supply 0 0 0 1
Class H - Planned - by another Line Owner 0 0 0 0
Class I - Any Other Loss of Supply 1 1 1 0
78 57 79 74
2 Interruption Targets for 2006/2007
Class B - Planned by Line Owners 40
Class C - Unplanned by Line Owners 32
3 Average Interruption Targets for 2006/2011
Class B - Planned by Line Owners 35
Class C - Unplanned by Line Owners 26
4 Proportion of Class C Interruptions not restored within:
3 Hours 6
24 Hours 0
5 (a) The total number of faults per 100 circuit kilometres of prescribed voltage electric line
11kV 10.1 8.7 7.5 10.9
33kV 1.9 2.0 3.9 4.5
Total 8.2 7.1 6.7 9.4
(b) Target for 2006/2007 year
11kV 6.0
33kV 4.0
Total 5.5
(c) Average Target for 2006/2011 years
11kV 5.2
33kV 3.2
Total 4.7
6 The total number of faults per 100 circuit kilometres of underground prescribed voltage electric line
11kV 0 0 0 0
33kV 0 0 0 0
Total 0 0 0 0
7 The total number of faults per 100 circuit kilometres of overhead prescribed voltage electric line
11kV 10.4 8.5 7.5 11.1
33kV 1.9 1.8 3.9 4.5
Total 8.5 6.9 6.7 9.5
Note: The totals in clauses 5, 6 and 7 are not designed to sum the figures above each total.
2006 2005 2004 2003
SAIDI
8 SAIDI for the total number of interruptions 196 134 256 370
9 SAIDI targets for 2006/2007
Class B - Planned by Line Owners 170
Class C - Unplanned by Line Owners 85
10 Average SAIDI targets for 2007/2011 years
Class B - Planned by Line Owners 137
Class C - Unplanned by Line Owners 78
11 SAIDI for the total number of interruptions within each interruption class
Class A - Planned by Transpower 0 0 0 0
Class B - Planned by Buller Electricity 108 64 165 222
Class C - Unplanned by Buller Electricity 84 65 84 144
Class D - Unplanned by Transpower 4 0 0 0
Class E - Unplanned by Line Owner generation 0 0 0 0
Class F - Unplanned by other generator 0 0 0 0
Class G - Unplanned - by another line owner 0 0 0 0
Class H - Planned - by another Line Owner 0 0 0 0
Class I - Any Other Loss of Supply 0 5 8 4
196 134 257 370
SAIFI
12 The SAIFI for the total number of Interruptions 1.88 1.34 2.41 1.98
13 SAIFI Targets for 2006/2007
Class B - Planned by Line Owners 0.85
Class C - Unplanned by Line Owners 0.97
14 Average SAIFI targets for 2007/2011 years
Class B - Planned by Line Owners 0.79
Class C - Unplanned by Line Owners 0.94
15 The SAIFI for the total number of interruptions within each interruption class
Class A - Planned by Transpower 0 0.00 0.00 0.00
Class B - Planned by Buller Electricity 0.62 0.44 1.01 0.54
Class C - Unplanned by Buller Electricity 1.18 0.78 1.22 1.32
Class D - Unplanned by Transpower 0.08 0.00 0.00 0.00
Class E - Unplanned by Line Owner generation 0 0.00 0.00 0.00
Class F - Unplanned by other generator 0 0.00 0.00 0.00
Class G - Unplanned - by another Line Owner 0 0.00 0.00 0.00
Class H - Planned - by another Line Owner 0 0.00 0.00 0.00
Class I - Any Other Loss of Supply 0 0.12 0.17 0.12
1.88 1.34 2.41 1.98
2006 2005 2004 2003
CAIDI
16 The CAIDI for the total number of interruption 104 100 107 187
17 CAIDI targets for 2006/2007
Class B - Planned by Line Owners 200
Class C - Unplanned by Line Owners 88
18 Average CAIDI Target for 2007/2011 years
Class B - Planned by Line Owners 173
Class C - Unplanned by Line Owners 83
19 The CAIDI for the total number of interruptions within each interruption class
Class A - Planned by Transpower 0 0 0 0
Class B - Planned by Buller Electricity 176 145 163 411
Class C - Unplanned by Buller Electricity 71 84 69 109
Class D - Unplanned by Transpower 42 0 0 0
Class E - Unplanned by Line Owner generation 0 0 0 0
Class F - Unplanned by other generator 0 0 0 0
Class G - Unplanned - by another Line Owner 0 0 0 30
Class H - Planned - by another Line Owner 0 0 0 0
Class I - Any Other Loss of Supply 0 40 45 0
104 100 107 187
Note: The totals in clause 19 are not designed to sum the figures above each total.
Buller Electricity Limited - LINES BUSINESS
SCHEDULE 1 - PART 7
FORM FOR THE DERIVATION OF FINANCIAL PERFORMANCE MEASURES FROM FINANCIAL STATEMENTS
Derivation Table Input and Calculation Symbol in ROF ROE ROI
formula
Operating surplus before interest and income tax from
financial statements 1,033
Operating surplus before interest and income tax
adjusted pursuant to regulation 18 (OSBIT) 1,033
Interest on cash, bank balances, and short-tem
investments (ISTI)
OSBIT minus ISTI 1,033 a 1,033 1,033
Net Surplus after tax from financial statements 693
Net surplus after tax adjusted pursuant to regulation 18
(NSAT) 693 n 693
Amortisation of goodwill and amortisation of other
intangibles g add - add - add -
Subvention payment s add - add - add -
Depreciation of SFA at BV (x) 745
Depreciation of SFA at ODV (y) 745
ODV depreciation adjustment - d add - add - add -
Subention payment tax adjustment - s*t deduct - deduct -
Interest tax shield 74 q deduct 74
Revaluations r add
Income tax 115 p deduct 115
Numerator 1,033 693 844
OSBITTADJ=a+g+s+d NSATADJ=n+g+s-s*t+d BIITADJ=a+g-q+r+s+d-p-s*t
Fixed asset at end of previous year (FA0) 21,260
Fixed assets at end of current financial year (FA1) 20,173
Adjusted net working capital at end of previous
financial year (ANWC0) -88
Adjusted net working capital at end of current financial
year (ANWC1) 197
Average total funds employed (ATFE) 20,771 c 20,771 20,771
Total equity at end of previous financial year (TE0) 19,431
Total equity at end of current financial year (TE1) 18,901
Average total equity 19,166 k 19,166
WUC at end of previous financial year (WUC0)
WUC at end of current financial year (WUC1)
Average total works under construction e deduct deduct deduct
Revaluations (1,224) r
Half of revaluations (612) r/2 -612 deduct (612)
Intangible assets at end of previous financial year
(IA0) -
Intangible assets of end of current financial year
(IA1) -
Average total intangible asset - m add -
Subvention payment at end of previous financial
year (S0) -
Subvention payment at end of current financial year
(S1) -
Subvention payment tax adjustment at end of previous
financial year -
Subvention payment tax adjustment at end of current
financial year -
Average subvention payment and related tax adjustment - v add -
System fixed assets at end of previous year at
book value (SFABV0) 20,338
System fixed assets at end of current financial year
at book value (SFAbv1) 19,053
Average value of system fixed assets at book value 19,696 f deduct 19,696 deduct 19,696 deduct 19,696
System fixed assets at year beginning at ODV value
(SFAodv0) 20,129
System fixed assets at end of current financial year
at ODV value (SFAodv1) 20,277
Average value of system fixed assets at ODV value 20,203 h add 20,203 add 20,203 add 20,203
Denominator 21,890 19,674 21,890
ATFEADJ=c-e-f+h AveTEADJ=k-e-m+v-f+h ATFEADJ=c-e-1/2r-f+h
Financial performance measure 4.72% 3.52% 3.85%
ROF=OSBIITADJ/ATFRADJ x 100 ROE=NSATADJ/ATEADJ x 100 ROI=OSBIITADJ/ATFEADJ x 100
t = maximum statutory income tax rate applying to corporate entities, bv = book value, ave = average, odv = optimised deprival valuation, subscript '0' = end of previous financial year
subscript '1' = end of current financial year ROF = return on funds ROE = return on equity ROI = return on investment REPORT OF THE AUDITOR-GENERAL
TO THE READERS OF THE FINANCIAL STATEMENTS OF
BULLER ELECTRICITY LIMITED
FOR THE YEAR ENDED 31 MARCH 2006
We have audited the financial statements of Buller Electricity Limited on pages 2 to 12. The financial statements provide information about the past financial performance of Buller Electricity Limited and its financial position as at 31 March 2006. This information is stated in accordance with the accounting policies set out on pages 5 and 6.
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 Buller Electricity Limited as at 31 March 2006, and the results of its operations and cash flows for the year ended on that date.
Auditor's Responsibilities
Section 15 of the Public Audit Act 2001 and Requirement 30 of the Electricity Information Disclosure Requirements 2004 require the Auditor-General to audit the financial statements. It is the responsibility of the Auditor-General to express an independent opinion on the financial statements and report that opinion to you.
The Auditor-General has appointed Bruce Loader of KPMG Christchurch 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
· whether the accounting policies are appropriate to Buller Electricity Limited's circumstances, consistently applied and adequately disclosed.
We conducted the audit in accordance with the Auditing Standards published by the Auditor-General, which incorporate 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 obtain 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.
In addition to issuing audit certificates pursuant to the Electricity Information Disclosure Requirements 2004 we have carried out other audit assignments for Buller Electricity Limited. This involved issuing an audit opinion on the annual financial statements for the year ended 31 March 2006 as well as audit certificates pursuant to the Commerce Act Electricity Lines Threshold Notice 2004. We have also performed accounting advice and taxation assignments for Buller Electricity Limited. These assignments are compatible with those independence requirements. Other than these assignments we have no relationship with or interest in Buller Electricity Limited.
Unqualified Opinion
We have obtained all the information and explanations we have required.
In our opinion:
· proper accounting records have been maintained by Buller Electrcity Limited as far as appears from our examination of those records; and
· the financial statements of Buller Electricity Limited on pages 2 to 12:
(a) comply with generally accepted accounting practice in New Zealand; and
(b) give a true and fair view of Buller Electricity Limited's financial position as at 31 March 2006 and the results of its operations and cash flows for the year ended on that date; and
(c) comply with the Electricity Information Disclosure Requirements 2004.
Our audit was completed on 30 October 2006 and our unqualified opinion is expressed as at that date.
Bruce Loader
KPMG Christchurch
On behalf of the Auditor-General
Christchurch, New Zealand
30 October 2006
AUDITOR-GENERAL'S OPINION ON THE PERFORMANCE MEASURES OF BULLER ELECTRICITY LIMITED
We have examined the information on pages 12 to 19, being:
(a) the derivation table in requirement 15;
(b) the annual ODV reconciliation report in requirement 16;
(c) the time-weighted averages calculations in requirement 32;
(d) the financial performance measures in clause 1 of Part 3 of Schedule 1; and
(e) the financial components of the efficiency performance measures in clause 2 of Part 3 of Schedule 1, -
that were prepared by Buller Electricity Limited and dated 30 October 2006 for the purposes of the Commerce Commission's Electricity Information Disclosure Requirements 2004.
In our opinion, having made all reasonable enquiry, and to the best of our knowledge, that information has been prepared in accordance with those Electricity Information Disclosure Requirements 2004.
Bruce Loader
KPMG Christchurch
On behalf of the Auditor-General
Christchurch, New Zealand
30 October 2006