table of contents - westpower · have been expanded significantly to include measurements which are...

WESTPOWER annual REPORT 2013 1

COMPANY DETAILSRegistered Office146 Tainui StreetPO Box 375, Greymouth

Telephone 03 768 9300Facsimile 03 768 2766

AuditorsAudit New Zealand On behalf of the Auditor-GeneralPrivate Box 2, Christchurch

BAnkersWestpac Banking Corporation LtdPO Box 25, Greymouth

LoAn underwritersWestpac Banking CorporationPO Box 2721, Christchurch

tAx AdvisorsKPMGPO Box 996, Wellington

soLicitorsHannan and SeddonPO Box 8, GreymouthBuddle FindlayPO Box 2694, Wellington

Table of Contents

Chairman and Chief Executive’s Report 3

Directors’ Report 12

Financial Statements 16

Notes to the Financial Statements 20

Auditor’s Report 53

2 WESTPOWER annual REPORT 2013

MissionStatement A West Coast Company operating successful businesses which provide first class electrical and technology solutions wherever our customers take us.

Vision Recognised for excellence in all links of the electricity value chain.


ChairMan and Chief exeCuTiVe’S reporT

Health and Safety Commitment Robust Health and Safety systems and processes are extremely important in the electricity sector, both in terms of ensuring our employees are kept safe, and also to ensure that we keep the public safe from potential or actual harm from our assets.

During 2013, the Board and Management undertook a review of our systems, and from this review we reestablished our joint commitment to providing resources that facilitate:• providing Health and Safety leadership for the organization;• building a culture of excellence in Health and Safety;• developing and maintaining appropriate Health and Safety systems;• monitoring Health and Safety at a governance and management level;• designing and building our assets with safety in mind;

Part of the review process included establishing a strategic plan with a vision of achieving ZERO HARM. We established a series of key performance indicators designed to measure our performance in the goals we set to realize our vision. While the KPI’s include the standard measurements of performance which have in the past been reviewed monthly by the Board, they have been expanded significantly to include measurements which are more forward thinking, and focus on continual improvement.

The biennial audit of our systems by ACC endorsed our tertiary level qualification under the Workplace Safety Management Program, providing external assurance that our systems and processes are robust.

Tricia Rands, Finance Manager, Greymouth

Maulik Patel, Philip Boys and Stuart Banks, Engineers, Christchurch

Ross Wieblitz, Line Mechanic, Greymouth



Health and Safety Performance Our accident and lost time injury rates reduced in 2013 as compared to 2012, and while this trend is good we recognize that there is more work required to continue this trend and reach our goal of Zero Harm.

In 2012 the ElectroNet Transmission team received an award at the annual transmission industry Safety Thanks and Recognition (STAR) Awards. The team had undertaken a significant line realignment project in the Bealey River in the heart of the southern alps, in often treacherous conditions. The safety record for the team was such that they were awarded the Top Project Safety Award.

Lost tiMe inJurY FreQuencY rAte



Group PerformanceAll group companies performed well during the year, providing the opportunity to share that success with the community through the payment of a special discount on line charges of $1m.

The following table provides a comparison to the last two years results both on a pre and post discount basis.

($000’s) 2013 2012 2011Operating Surplus Before Discount

8,725 5,932 6,028

Less Discount to Consumers (997) (2,062) (929)

Operating Surplus Before Tax

7,728 3,870 5,099

Taxation Expense (2,486) (1,092) (1,885)

Net Surplus After Taxation 5,242 2,778 3,214

Electricity delivery through the network has declined since the highs of 2010 and 2011, reflecting the changes that have impacted local industry on the West Coast. Even so, electricity flowing through the network is still significantly higher than through the early 2000’s, showing that the gains made are not eroding quickly. We expect that over time the load lost in the past two years will be replaced as new industry establishes in the region and existing industries expand.

Adjusted for capital contributions

net ProFit BeFore tAx And discount

eLectricitY deLiverY

Hazel Mathieson, Junior Sales Person, Greymouth

Cosmin Cosma, Senior Electrical Engineer, Greymouth

James Rouse, Engineering Team Leader, Christchurch



Asset Valuation ImpactsThe impact of closure of mining operations has required us to review our forward network revenue forecasts. When those amended forecasts are viewed on a discounted cash flow basis, a revaluation impairment of $10.9m on our network assets has resulted, and this has been adjusted against our revaluation reserves.

Amethyst Hydro As shown separately in this report, Westpower’s majority owned subsidiary Amethyst Hydro Ltd successfully commissioned the 7.6MW Amethyst River hydro generation scheme in June 2013.

This run of the river scheme is a key asset for Westpower and the West Coast community, providing many benefits including improved security of supply for our consumers.

Refer to pages 10 and 11.

Waitaha Hydro SchemeInvestigation of feasibility for a hydro scheme on the Waitaha River in South Westland continued during 2013. Based on the outcome of our investigations we expect to apply for a concession from the Department of Conservation later this year.

Peter Whitehead, Senior Lines Surveyor, Greymouth

Melanie Wilson, Administration Clerk, Greymouth

Matt Clough and Hayden Booker – Team Leader and Line Mechanic, Nelson



Quality of SupplyThe 2013 outage performance was slightly higher than targeted, but still down on the average of the previous five years.

The following graphs show the outage trends on a System Average Interruption Duration Index (SAIDI) basis over the years, along with a detailed view of outages experienced during the year.

sAidi

system Average interruption duration index

sAidi worM APriL 2012 - MArch 2013


SuMMARY Mike Newcombe ChairmanThe Board of Directors is very satisfied to see the result of the good work of the Company and the subsidiaries during this past year. Consumers on the Westpower network can be assured these community owned businesses are operating well and providing the best possible service in sometimes challenging conditions.

The growth in the subsidiaries has been particularly pleasing. The Companies are well managed and we have skilled and experienced staff throughout all of the businesses. Many of our people have been engaged in work away from their home bases for long periods, some outside of New Zealand.

There has been a major effort on the part of many of our staff to advance the Amethyst project in South Westland. I am confident that Amethyst and the solid subsidiary businesses will benefit the West Coast consumers for years into the future.

Our group is one of the smaller in the national scene but we represent ourselves well amongst our peers particularly where safety and performance are measured. These important measures feature in our financial result which for this year has been very good.


Tony Reidie, Lines Project Supervisor, Greymouth

Simon Harvey , Electrician, Greymouth

Hayden Booker and Dave Couper, Line Mechanics, Greymouth and Nelson


The Board continues to have the support of the Trustees. I am grateful for the support of my fellow Directors and we are all pleased to acknowledge the work of our management team and our staff that has brought about this very sound result for our shareholders.

M J NewcombeChairman

Pictured below from left to right:

Steve Jay – General Manager, Mitton ElectroNet Ltd

Rodger Griffiths – Group General Manager Assets and Engineering

Pete Theron – General Manager Contracting

Rob Caldwell – Group Chief Executive



AMETHYST HYDRO

The Amethyst River hydro generation scheme was successfully commissioned on 10 June 2013. The 7.6MW scheme is a joint venture between Westpower Ltd and Hari Hari Hydro Ltd, and provides additional electricity capacity and security to Westland. Construction of the scheme included a 1km tunnel on a steep 1 in 4.4 grade, along with intake works in a confined space in a gorge initially accessible only by helicopter. The tunnel and intake were two of the most challenging parts of the projects, and the standard of the completed works speaks volumes for local contractors Geotech Ltd and Grant Gibb Construction Ltd.


scheme component contractor description

Intake Gibb Construction Ltd and Geotech Ltd Elevation RL 505mStream bed intake - no dam or lake

Settling Basin Gibb Construction Ltd and Geotech Ltd Sited inside and outside tunnelDesigned to settle out sand and larger silt sized material3m wide* 4.5m deep* 40m long

Tunnel Geotech Ltd 1040m long on a steep 1 in 4.4 grade in schist

Penstock Supplied by Mico and Pipes NZTunnel Install by Geotech LtdInstallation in the Road by Kidson Construction Ltd and Westland Contractors Ltd

2540m long1000/900mm diameterPipes on pedestals in tunnel and buried outside tunnelGRP for first 1700m then Steel to the powerhouse

Access Road Downers and MBD Contractors Ltd 7.5m wide and 1.5km long - similar to local rural road

Powerhouse John Griffin Builders Elevation RL 90mTilt slab concrete panels

Generation Set Turbine Designed by Hydroworks Christchurch andManufactured by Allied Industrial Engineering Ltd Kawerau

Generator designed and built by Hyundai Ideal Ohio, USA

Turbine - Vertical Pelton with 6 nozzlesSpeed 750 rpm

Generator – Synchronous 8-pole machine

Transmission Designed and built by ElectroNet Switchyard beside powerhouse with connection into the South Westland 33 kV subtransmission line 500m away

Generation Voltage 11 kV

Installed Flow 2100l/sec

Gross Head 415m

Head Losses 20m

Net Head 395m

Maximum Output 7.6 MW

Annual Output 46 GWh

Assumed Efficiency 89%


WeSTpoWer LiMiTed direCTorS’ reporT

In respect of the financial year ended 31 March 2013 the Directors of Westpower Limited submit the following report:

The names of the Directors of the company in office at the end of the year and their remuneration were as follows:

Michael John Newcombe $65,000Chairman, Director of Subsidiaries

Suzanne Peta Merriman $40,500Non Executive Director, Director of SubsidiariesChair of Audit Committee

Richard Snowden Cornelius $34,000Non Executive Director, Director of Subsidiaries

Anthony Graham Williams $34,000Non Executive Director, Director of Subsidiaries

Hugh Robert Little $38,110Non Executive Director, Director of Subsidiaries

Principal Activities of the CompanyThe Group’s principal activities for the financial year ended 31 March 2013 were the reticulation of electricity and electrical contracting.

Recommended DividendThe Directors recommend that in respect of the year ended 31 March 2013:• a final ordinary dividend of $134,250 be paid• a preference dividend of 7.25% per annum amounting to $21,750 be paid• the dividends carry full imputation credits and are payable following the company’s annual general meeting in August 2013.

Auditor’s RemunerationIn accordance with section 45 of the Energy Companies Act 1992, the Auditor-General is responsible for the audit of Westpower Limited. The audit is undertaken by Audit New Zealand on behalf of the Auditor-General. It is recommended that the Directors be authorised to fix the remuneration of the auditor.

Review of OperationsThe Group’s net surplus for the year ended 31 March 2013 was $7.7m before taxation. (2012: $3.9m)

Election of DirectorsThe Director’s are appointed by the shareholders.

Directors’ Indemnity and Liability and InsuranceA Directors’ and Officers’ Liability Insurance is in place for Directors. The sum insured is $5 million.


WeSTpoWer LiMiTeddireCTorS’ reporT

Employees’ RemunerationDuring the year, the number of non-director employees who received remuneration and other benefits of $100,000 or more was as follows:

Total Remuneration and Other Benefits Number of Employees$100,000 - $110,000 11$110,000 - $120,000 5$120,000 - $130,000 3$130,000 - $140,000 4$150,000 - $160,000 2$240,000 - $250,000 2$290,000 - $300,000 1

No other non-director employees received remuneration and other benefits which totaled more than $100,000.

Directors’ Interests DisclosedThe following Directors have declared interests in the identified entities as shareholder and/or director. The declaration serves as notice that the Director may benefit from any transactions between the Company or Group and the identified entities.

POSITION HELD ENTITY RELATIONSHIP WITH WESTPOWER LIMITEDDirector ElectroNet Services Limited Subsidiary of WestpowerOwner/Director Stations Inn Restaurant, Bar and AccommodationOwner/Director Little Farms LimitedDirector/Shareholder Rydan Farms LimitedDirector/Shareholder Stations 2004 LimitedDirector/Shareholder Eastgate 2004 LimitedDirector Amethyst Hydro Limited Subsidiary of WestpowerDirector Mitton ElectroNet Limited Subsidiary of ElectroNet ServicesDirector ElectroNet Transmission Limited Subsidiary of ElectroNet ServicesShareholder Westland Milk Products

hugh Little

POSITION HELD ENTITY RELATIONSHIP WITH WESTPOWER LIMITEDDirector ElectroNet Services Limited Subsidiary of WestpowerDirector Amethyst Hydro Limited Subsidiary of WestpowerDirector ANZCO Foods LimitedDirector Mitton ElectroNet Limited Subsidiary of ElectroNet ServicesDirector Donna Cornelius Naturopathic LimitedDirector ElectroNet Transmission Limited Subsidiary of ElectroNet Services

richard cornelius


POSITION HELD ENTITY RELATIONSHIP WITH WESTPOWER LIMITEDDirector ElectroNet Services Limited Subsidiary of WestpowerManaging Director/Partner Marshall and Heaphy LimitedDirector/Shareholder Moet LimitedDirector/Shareholder Westland Consultancy LimitedDirector Amethyst Hydro Limited Subsidiary of WestpowerDirector Coast Investments LimitedTrustee Merriman Family TrustTrustee Williams Investment TrustDirector Mitton ElectroNet Limited Subsidiary of ElectroNet ServicesShareholder Top Gear Performance LimitedDirector ElectroNet Transmission Limited Subsidiary of ElectroNet ServicesDirector/Shareholder HSBP LimitedDirector M & H Trustee One – Twelve LimitedDirector M & H Trustee Fourteen Limited

sue Merriman

POSITION HELD ENTITY RELATIONSHIP WITH WESTPOWER LIMITEDDirector ElectroNet Services Limited Subsidiary of WestpowerDirector Mitton ElectroNet Limited Subsidiary of ElectroNet ServicesDirector ElectroNet Transmission Limited Subsidiary of ElectroNet ServicesDirector/Shareholder Williams Hotel Group LimitedDirector/Shareholder WHG Oakridge Land LimitedDirector/Shareholder WPH LimitedDirector/Shareholder WML LimitedDirector/Shareholder The Towers on the Park LimitedDirector/Shareholder The Ashley Hotel LimitedDirector/Shareholder Williams Mining LimitedDirector/Shareholder WHG Oakridge LimitedDirector/Shareholder WHG Oakridge Management LimitedDirector/Shareholder GE Williams Road Metals LimitedDirector/Shareholder Mitchells Lifestyle Company LimitedDirector/Shareholder WHG Management Limited

Director/Shareholder W Group LimitedDirector/Shareholder The Ashley Hotel Christchurch LimitedDirector/Shareholder WHG Punakaiki Land LimitedDirector/Shareholder WHG Punakaiki Resort LimitedDirector/Shareholder Moet LimitedDirector Westland Holdings LimitedTrustee Williams Investment TrustTrustee Williams Development TrustTrustee Williams Family Trust

tony williams



POSITION HELD ENTITY RELATIONSHIP WITH WESTPOWER LIMITEDDirector ElectroNet Services Limited Subsidiary of WestpowerDirector Standby Power LimitedDirector Amethyst Hydro Limited Subsidiary of WestpowerTrustee Otautahi Education Development TrustDirector Mitton ElectroNet Limited Subsidiary of ElectroNet ServicesDirector Luggate Hangers LimitedDirector ElectroNet Transmission Limited Subsidiary of ElectroNet ServicesTrustee Wanaka Terraces TrustTrustee Rotary Club of Christchurch Charitable TrustTrustee Aged Concern Canterbury Incorporated

Mike newcombe


Particulars of Directors’ Interest in the Shares of Westpower LimitedThere are no directors who held an interest in the shares of Westpower Limited.

Directors’ BenefitsNo Director of the Company has, since the end of the previous financial year, received or become entitled to receive a benefit other than a benefit included in the total remuneration received or due and receivable by Directors shown in the group financial statements.

There were no notices from Directors to the company requesting to use company information received in their capacity as Directors which would not otherwise have been available to them.

Events Subsequent to Balance Date The Directors are not aware of any matter or circumstance since the end of the financial year that is not otherwise dealt with in this report or financial statements and that has significantly affected, or may significantly affect, the operations of Westpower group, the result of those operations or the state of affairs of the group.

Financial StatementsThe financial statements for the year ended 31 March 2013 immediately follow this report.

On behalf of the Board,

M J Newcombe S P MerrimanChairman Director28 June 2013

From left to right: Sue Merriman, Tony Williams, Hugh Little, Richard Cornelius, and Mike Newcombe

Group ParentNotes 31-Mar-13 31-Mar-12 31-Mar-13 31-Mar-12

$000 $000 $000 $000

Operating Revenue 5 49,285 42,354 20,210 20,033Other Income 6 54 49 2,506 2,078

49,339 42,403 22,716 22,111

Operating Expenses 7 35,499 31,999 12,519 14,521Depreciation, Amortisation and Impairment 5,287 5,206 4,218 4,206

40,786 37,205 16,737 18,727

operating Profit 8,553 5,198 5,979 3,384

Finance Income 66 81 316 266Finance Expenses (891) (1,409) (1,006) (1,512)net Finance cost 8 (825) (1,328) (690) (1,246)

Profit Before income tax 7,728 3,870 5,289 2,138

Income Tax 9 2,486 1,092 846 (22)

Profit After income tax 5,242 2,778 4,443 2,160

Attributable to:Company Shareholders 5,315 2,787 4,443 2,160Minority Interests (73) (9)

5,242 2,778 4,443 2,160

The accounting policies and notes on pages 20 to 52 are an integral part of these financial statements.

STaTeMenT of finanCiaL perforManCe for The Year ended 31 MarCh 2013


STaTeMenT of CoMprehenSiVe inCoMefor The Year ended 31 MarCh 2013


$000 $000 $000 $000Profit (Loss) For the Period 18 5,242 2,778 4,443 2,160

Impairment loss on revaluation 18 (15,330) (15,772)Fair value of cashflow hedges 18 1,139 123 242 240 Income tax on other comprehensive income 9,18 4,116 (51) 4,348 (67)Other comprehensive income (10,075) 72 (11,182) 173

total comprehensive income (4,833) 2,850 (6,739) 2,333

Attributable to:Parent Entity (4,839) 2,871 (6,739) 2,333Minority Interest 6 (21)

(4,833) 2,850 (6,739) 2,333

STaTeMenT of ChanGeS in eQuiTYfor The Year ended 31 MarCh 2013


$000 $000 $000 $000Balance at 1 April 115,168 112,104 101,720 99,543

Total comprehensive income (4,833) 2,850 (6,739) 2,333

Contributions from equity holders 18 370 Dividends to equity holders 18 (156) (156) (156) (156)

Balance at 31 March 18 110,179 115,168 94,825 101,720

Attributable to:Parent Entity 108,781 113,776 94,825 101,720Minority Interest 1,398 1,392

110,179 115,168 94,825 101,720



STaTeMenT of finanCiaL poSiTionaS aT 31 MarCh 2013


$000 $000 $000 $000non current AssetsProperty, Plant and Equipment 10 144,706 142,005 106,747 121,660Goodwill and Other Intangible Assets 11 7,578 7,647 333 380Investments in Subsidiaries 12 15,480 15,480Other Investments 13 906 889 903 880Finance Lease Receivable 14 6 6Financial Derivatives 22 906total non current Assets 154,096 150,547 123,463 138,406

current AssetsCash and Cash Equivalents 15 2,104 2,692 39 397Trade and Other Receivables 16 9,567 10,288 3,790 3,025Finance Lease Receivable 14 6 20 6 20Foreign Exchange Contracts 65Inventories 1,123 1,124Income Tax Receivable 116 199total current Assets 12,800 14,240 3,835 3,706

totAL Assets 166,896 164,787 127,298 142,112

eQuitYShare Capital 18 30,000 30,000 30,000 30,000Reserves 18 10,869 21,023 6,988 18,170Retained Earnings 18 67,912 62,753 57,837 53,550Minority Interest 18 1,398 1,392totAL eQuitY 110,179 115,168 94,825 101,720

non current LiABiLitiesLoans and Borrowings 19 21,600 4,550 300 300Financial Derivatives 22 304 347 180 365Contract Retentions Held 305Employee Benefits 506 439Deferred Tax Liabilities 9 15,299 18,964 15,130 19,031total non current Liabilities 37,709 24,605 15,610 19,696

current LiABiLitiesTrade and Other Payables 21 4,645 4,871 2,216 2,280Contract Retentions Held 243Employee Benefits 1,806 1,698 80 83Finance Lease Payable 20 47Financial Derivatives 22 62 248 62 183Current Portion of Borrowings 19 11,800 18,150 14,415 18,150Income Tax Payable 452 90total current Liabilities 19,008 25,014 16,863 20,696

totAL LiABiLities 56,717 49,619 32,473 40,392

totAL eQuitY And LiABiLities 166,896 164,787 127,298 142,112

Authorised for issue on 28 June 2013 for and on behalf of the Board:

M J Newcombe S P MerrimanChairman DirectorThe accounting policies and notes on pages 20 to 52 are an integral part of these financial statements.


STaTeMenT of CaSh fLoWSfor The Year ended 31 MarCh 2013


$000 $000 $000 $000cAsh FLows FroM oPerAtinG ActivitiesReceipts from customers 49,740 52,162 19,054 31,765Interest Received 43 31 294 213Dividends Received 11 20 2,506 13

Payments to suppliers and employees (35,222) (31,162) (12,486) (14,216)Interest Paid (944) (1,466) (1,069) (1,567)Income Tax (Paid) Received (1,466) (1,512) (111) (115)Net GST Paid 47 (65) (13) 46net cash inflows/(outflows) from operating activities 25 12,209 18,008 8,175 16,139

cAsh FLows FroM investinG ActivitiesProceeds from sale of property, plant and equipment 71 47

Acquisition of property, plant and equipment (23,271) (15,633) (4,642) (4,933)Purchase of goodwill and intangibles (93) (230) (77)net cash inflows/(outflows) from investing activities (23,293) (15,816) (4,642) (5,010)

cAsh FLows FroM FinAncinG ActivitiesProceeds from borrowings 27,450 50,450 19,885 47,990Contributions from equity holders 370

Repayment of borrowings (16,797) (51,645) (23,620) (58,670)Dividends paid (156) (156) (156) (156)

net cash inflows/(outflows) from financing activities 10,496 (981) (3,891) (10,836)

net increase (decrease) in cash and cash equivalents (588) 1,211 (358) 293

Cash and cash equivalents at 1 April 2,692 1,481 397 104

cash and cash equivalents at 31 March 15 2,104 2,692 39 397

The GST (net) component of operating activities reflects the net GST paid and received with the IRD. The GST (net) component has been presented on a net basis, as the gross amounts do not provide meaningful information for financial statement purposes.

For the parent company, in 2012 the following non cash items were applied to offset loans from subsidiaries:

Dividends from subsidiaries $2,000,000Equity contributions to subsidiaries $4,630,000



1. rePortinG entitY

Westpower Limited (the parent) is a company domiciled in New Zealand and registered under the Companies Act 1993. Financial statements for the parent (separate financial statements) and consolidated financial statements are presented. The consolidated financial statements of Westpower Limited as at and for the year ended 31 March 2013 comprise the parents and its subsidiaries (see note 27), together referred to as the Group. The company is a reporting entity for the purposes of the Financial Reporting Act 1993 and its financial statements comply with that Act and section 44 of the Energy Companies Act 1992. Westpower Limited is primarily involved in the reticulation of electricity and electrical contracting. The financial statements were authorised for issue by the Board on 28 June 2013.

2. BAsis oF PrePArAtion

(a) Statement of ComplianceThe financial statements have been prepared in accordance with New Zealand generally accepted accounting practice (NZ GAAP). They comply with NZ equivalents to International Financial Reporting Standards (NZ IFRSs) and other applicable financial reporting standards appropriate for profit-oriented entities.

(b) Basis of MeasurementThe financial statements have been prepared on the historical cost basis except for the following:• derivative financial instruments are measured at fair value.• available for sale financial assets are measured at fair value.• distribution assets and land and buildings are measured at fair value. The methods used to measure fair value are discussed further in Note 4.

(c) Functional and Presentation CurrencyThese financial statements are presented in New Zealand dollars ($), which is the parent’s functional currency. All financial information has been rounded to the nearest thousand.

(d) Use of Estimates, Judgments and AssumptionsThe preparation of financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected. In particular, information about significant areas of estimation uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amount recognised in the financial statements are described in the following notes:- Note 3(j)(iii) Measurement of the recoverable amount of cash generating units.

3. siGniFicAnt AccountinG PoLicies

(a) Basis of Consolidation

(i) Subsidiaries Subsidiaries are entities controlled by the Group. Control exists when the Group has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that presently are exercisable are taken into account. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.

(ii) Transactions Eliminated on Consolidation Intra-group balances, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealised gains arising from transactions with equity accounted investees are eliminated against the investment to the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

noTeS To The finanCiaL STaTeMenTS


(b) Foreign Currency Transactions Transactions in foreign currencies are translated at the foreign exchange rate ruling on the date of the transaction. Foreign currency monetary items at reporting date are translated at the exchange rate existing at reporting date. Non-monetary assets and liabilities carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when the fair value was determined. Exchange differences are recognised in the profit or loss statement in the period in which they arise.

(c) Financial Instruments

(i) Non-Derivative Financial Instruments Non-derivative financial instruments comprise investments in equity securities, trade and other receivables, cash and cash equivalents, loans and borrowings, customer deposits and trade and other payables. Non-derivative financial instruments are recognised initially at fair value plus, for instruments not at fair value through profit or loss, any directly attributable transaction costs. Subsequent to initial recognition non-derivative financial instruments are measured as described below.

investments in subsidiaries Investments in equity securities of subsidiaries, associates and joint ventures are measured at cost less impairment losses in the separate financial statements of the parent.

Available For sale Financial Assets The Group’s investment in non subsidiary equity securities are classified as available-for-sale financial assets. Subsequent to initial recognition, they are measured at fair value and changes therein, other than impairment losses (see note 3(j)(i)), are recognised directly in equity. When an investment is derecognised, the cumulative gain or loss in equity is transferred to profit or loss. The fair value of equity investments that are not traded in an active market and are classified as available-for-sale, is based on the non-market valuation techniques.

otherSubsequent to initial recognition, other non-derivative financial instruments are measured at amortised cost using the effective interest method, less any impairment losses.

trade and other receivableTrade and other receivables are stated at their cost less impairment losses. A provision for impairment of receivables is established where there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the receivables. The amount of the provision is the difference between the asset’s carrying amount and the present value of the estimated future cash flows, discounted using the effective interest method.

interest Bearing BorrowingsInterest-bearing borrowings are classified as other non-derivative financial instruments. Borrowings are recorded at amortised cost.

cash and cash equivalentsCash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on demand and form an integral part of the Group’s cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.

trade and other PayablesTrade and other payables are stated at cost.



(ii) Derivative Financial InstrumentsThe Group uses derivative financial instruments to hedge its exposure to interest rate risks and electricity price risks arising from operational, financing and investment activities. In accordance with its treasury policy, the Group does not hold or issue derivative financial instruments for trading purposes. However, derivatives that do not qualify for hedge accounting are accounted for as trading instruments. Derivative financial instruments are recognised initially at fair value and transaction costs are expensed immediately. Subsequent to initial recognition, derivative financial instruments are stated at fair value at each balance date. The gain or loss on remeasurement to fair value is recognised immediately in profit or loss. However, where derivatives qualify for hedge accounting, recognition of any resultant gain or loss depends on the nature of the hedging relationship (see below).

cash Flow hedgesChanges in the fair value of the derivative hedging instrument designated as a cash flow hedge are recognised directly in equity to the extent that the hedge is effective. To the extent that the hedge is ineffective, changes in fair value are recognised in profit or loss. If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated or exercised, then hedge accounting is discontinued prospectively. The cumulative gain or loss previously recognised in equity remains there until the forecast transaction occurs. When the hedged item is a non-financial asset, the amount recognised in equity is transferred to the carrying amount of the asset when it is recognised. In other cases the amount recognised in equity is transferred to profit or loss in the same period that the hedged item affects profit or loss.

(iii) Share Capital

ordinary shares Incremental costs directly attributable to the issue of ordinary shares and share options are recognised as a deduction from equity.

Preference share capital Preference share capital is classified as equity if it is non-redeemable, or redeemable only at the Parent’s option, and any dividends are discretionary. Dividends thereon are recognised as distributions within equity. Preference share capital is classified as a liability if it is redeemable on a specific date or at the option of the shareholders, or if dividend payments are not discretionary. Dividends thereon are recognised as interest expense in profit or loss.

(d) Property, Plant and Equipment

(i) Recognition and Measurement Property, plant and equipment are stated at cost or valuation less accumulated depreciation and impairment losses. The cost of property, plant and equipment at 1 April 2006, the date of transition to NZ IFRS, was determined by reference to its fair value at that date. Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the asset to a working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located. When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

(ii) Subsequent Costs The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Group and its cost can be measured reliably. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred.




(iii) Depreciation Depreciation is recognised in profit or loss on a straight-line or diminishing value basis over the estimated useful lives of each part of an item of property, plant and equipment. Land is not depreciated. The estimated useful lives for the current and comparative periods are as follows: • electricity distribution system 15-70 years SL • buildings 5-50 years SL • motor vehicles 10-50% DV • plant and equipment 7-50% DV • furniture and fittings including computers 6-48% DV Depreciation methods, useful lives and residual values are reassessed at the reporting date.

(iv) Subsequent Measurement Land and buildings are subsequently measured at fair value. Fair value is determined on the basis of a periodic independent valuation prepared by external valuers. Land and buildings were revalued as at 1 April 2010 by Coast Valuations Limited, registered valuers at $6,970,500. These are reviewed at the end of each reporting period to ensure that the carrying value of land and buildings is not materially different from fair value. The distribution system is subsequently measured at fair value. Fair value is determined on the basis of a periodic independent valuation prepared by external valuers, based on a discounted cashflow approach. Distribution system assets were revalued by PricewaterhouseCoopers as at 31 March 2013 at $101,728,000. These are reviewed at the end of each reporting period to ensure that the carrying value of the distribution system is not materially different from fair value. Consideration is given as to whether the distribution system is impaired as detailed in note 3(j)(iii). Any revaluation increase arising on the revaluation of land and buildings and the distribution system is credited to the asset revaluation reserve, except to the extent that it reverses a revaluation decrease for the same asset previously recognised as an expense in profit or loss, in which case the increase is credited to the profit or loss to the extent of the decrease previously charged. A decrease in carrying amount arising on the revaluation of land and buildings and the distribution system is charged as an expense in profit or loss to the extent that it exceeds the balance, if any, held in the asset revaluation reserve relating to a previous revaluation of that asset. Depreciation on revalued buildings and the distribution system is charged to profit or loss. On the subsequent sale or retirement of a revalued item, the attributable revaluation surplus remaining in the asset revaluation reserve, net of any related deferred taxes, is transferred directly to retained earnings.

(e) Goodwill Goodwill arises on the acquisition of subsidiaries. Goodwill represents the excess of the cost of the acquisition over the group’s interest in the net fair value of the assets and liabilities of the acquiree. Goodwill is measured at cost less accumulated impairment losses. Where impairment losses are recognised these are not reversible.

(f) Other Intangible Assets Other intangible assets that are acquired by the Group, which have finite useful lives, are measured at cost less accumulated amortisation and accumulated impairment losses. Amortisation is recognised in profit or loss on a diminishing value basis over the estimated useful lives of the intangible assets, other than goodwill, from the date that they are available for use. The estimated useful lives for the current and comparative periods are as follows • software 20-40% DV

(g) Work In Progress Work in progress represents the gross unbilled amount expected to be collected from customers for contract work performed to date. It is measured at cost plus profit recognised to date less progress billings and recognised losses. Cost includes all expenditure related directly to specific projects and an allocation of fixed and variable overheads incurred in the Group’s contract activities based on normal operating capacity. Work in progress is presented as part of trade and other receivables in the balance sheet. If payments received from customers exceed the income recognised, then the difference is presented as deferred income in the balance sheet.



(h) Leased Assets (as lessor) Leases in terms of which the Group transfers substantially all the risks and rewards of ownership are classified as finance leases. These assets are disposed of by the Group and a receivable recognised at an amount equal to the lower of its fair value and the present value of the minimum lease payments.

(i) Inventories Inventories consist of construction materials. Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on the weighted average cost principle, and includes expenditure incurred in acquiring the inventories and bringing them to their existing location and condition. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

(j) Impairment The carrying amounts of the Group’s assets are reviewed at each balance sheet date to determine whether there is any objective evidence of impairment. An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. Impairment losses directly reduce the carrying amount of assets and are recognised in the profit or loss.

(i) Impairment of Equity Instruments Equity instruments are deemed to be impaired whenever there is a significant or prolonged decline in fair value below the original purchase price. For this purpose prolonged is regarded as any period longer than nine months and significant as more than 20 percent of the original purchase price of the equity instrument. Any subsequent recovery of an impairment loss in respect of an investment in an equity instrument classified as available for sale is not reversed through profit or loss.

(ii) Impairment of Receivables The recoverable amount of the Group’s receivables carried at amortised cost is calculated as the present value of estimated future cash flows, discounted at the original effective interest rate (i.e., the effective interest rate computed at initial recognition of these financial assets). Receivables with a short duration are not discounted. Impairment losses on an individual basis are determined by an evaluation of the exposures on an instrument by instrument basis. All individual instruments that are considered significant are subject to this approach.

(iii) Impairment of Non Financial Assets The carrying amounts of the Group’s non-financial assets, other than inventories and deferred tax assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists then the asset’s recoverable amount is estimated. An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. A cash-generating unit is the smallest identifiable asset group that generates cash flows that are largely independent from other assets and groups. Impairment losses are recognised in profit or loss. The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

(k) Trade and Other Payables Trade and other payables are stated at amortised cost.



(l) Employee Benefits

(i) Defined Contribution Plans Obligations for contributions to defined contribution pension plans are recognised as an expense in profit or loss when they are due.

(ii) Other Long Term Employee Benefits The Group’s net obligation in respect of long-term employee benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value, and the fair value of any related assets is deducted. The discount rate is the risk free interest rate. Any actuarial gains or losses are recognised in profit or loss in the period in which they arise.

(iii) Short Term Benefits Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided.

(m) Provisions A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.

(n) Revenue

(i) Goods Sold Revenue is recognised when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, and there is no continuing management involvement with the goods. Lines charges represent income charged to energy retailers based on their meter readings during the period. An allowance is made for unbilled line charges from energy retailers to the end of the period.

(ii) Services Revenue from services rendered comprises the amounts received and receivable by the Group for services supplied to customers in the ordinary course of business.

(iii) Vested Assets and Capital Contribution Vested assets are recognised as revenue at the fair value of the assets at the point that assets are connected to the network. Capital contribution payments are calculated in line with Westpower’s capital contribution policy. Capital contributions are recognised as revenue when payable at the point that the assets are connected to the network.

(o) Leases (as lessee)

(i) Finance Leases A finance lease is a lease that transfers to the lessee substantially all the risks and rewards incidental to ownership of an asset, whether or not title is eventually transferred. At the commencement of the lease term, the Group recognises finance leases as assets and liabilities in the balance sheet at the lower of the fair value of the leased item or the present value of the minimum lease payments. The finance charge is charged to the profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability. The amount recognised as an asset is depreciated over its useful life. If there is no certainty as to whether the Group will obtain ownership at the end of the lease term, the asset is fully depreciated over the shorter of the lease term and its useful life.

(ii) Operating Leases An operating lease is a lease that does not transfer substantially all the risks and rewards incidental to ownership of an asset. Payments made under operating leases are recognised as an expense on a straight-line basis over the term of the lease.



(p) Finance Income and Expenses Finance income comprises interest income on funds invested, unwinding of the discount on assets and dividend income. Interest income is recognised as it accrues, using the effective interest method. Dividend income is recognised on the date that the Group’s right to receive payment is established. Finance expenses comprise interest expense on borrowings and dividends on preference shares classified as liabilities. Borrowing costs directly attributable to the acquisition, construction, or production of a qualifying asset are capitalised as part of the cost of that asset. A qualifying asset is defined as a separate asset where the construction period exceeds twelve months and costs in excess of $2m. All other borrowing costs are recognised in profit or loss using the effective interest method.

(q) Borrowings Borrowings are recognised at cost. After initial recognitions, all borrowings are measured at amortised cost using the effective interest rate method.

(r) Income Tax Expense Income tax expense comprises current and deferred tax. Income tax expense is recognised in profit or loss except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Deferred tax is the amount of income tax payable or recoverable in future periods in respect of temporary differences and unused tax losses. Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for differences relating to investments in subsidiaries and jointly controlled entities to the extent that they probably will not reverse in the foreseeable future. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which temporary difference can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

(s) Goods and Services Tax All items in the financial statements are net of Goods and Services Tax except for debtors and creditors which are shown in the balance sheet inclusive of GST.

(t) Changes in accounting policies and disclosures There have been no changes in accounting policies and disclosures during the financial year.

(u) New Standards adopted and interpretations on issue but not yet effective The company has adopted the following new and amended standards as of 1 April 2012: NZ IFRS 7 Disclosures – Transfers of Financial Assets (amendments) effective 1 January 2013 FRS 44 NZ Additional Disclosure effective 1 December 2012 Harmonisation Amendments effective for the financial year ended 31 March 2013 Adoption of the above standards did not have a material impact on the financial statements of the company. The amendments to the following standards and interpretations are not expected to have a significant impact on the company’s operations.

Effective for the financial year ending 31 March

NZ IAS 1 Presentation of items of Other Comprehensive Income – Amendment to NZ IAS 1 2014

NZ IAS 12 Income Taxes: Deferred Tax Recovery of Underlying Assets (amendments) 2014

NZ IAS 19 Employee Benefits (Revised) 2014

NZ IFRS 12 Disclosures of Interests in Other Entities 2014

NZ IFRS 13 Fair Value Measurement 2014

NZ IFRS 9 Financial Instruments – Classification and Measurements 2016



4. deterMinAtion oF FAir vALues A number of the Group’s accounting policies and disclosures require the determination of fair value, for both financial and non-financial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the following methods. Where applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.

(a) Property, Plant and Equipment The fair value of the distribution system assets is based on a discounted cashflow methodology. The fair value of property, plant and equipment recognised is based on market values. The market value of property is the estimated amount for which a property could be exchanged on the date of valuation between a willing buyer and a willing seller in an arm’s length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion.

(b) Investments in Equity The fair value of financial assets at available-for-sale financial assets is determined by non-market valuation techniques at the reporting date.

(c) Trade and Other Receivables The fair value of trade and other receivables, excluding construction work in progress, is estimated at cost less impairment losses.

(d) Derivatives The fair value of interest rate swaps is based on broker quotes. Those quotes are tested for reasonableness by discounting estimated future cash flows based on the terms and maturity of each contract and using market interest rates for a similar instrument at the measurement date. The fair value of electricity swaps is calculated as the present value of estimated future cash flows of the instruments. Where possible observable market data is used in preparing these valuations including:• forward electricity price curve generated using Australian Securities Exchange (ASX) quoted priced adjustment using location factors published by the Electricity Authority; and • discount rates derived from market interest rates.

5. oPerAtinG revenueGroup Parent

31-Mar-13 31-Mar-12 31-Mar-13 31-Mar-12$000 $000 $000 $000

Line Charges 19,554 19,465 19,554 19,465Less Special Discount (997) (2,062) (997) (2,062)Rentals & Sundry Income 374 810 449 528Vested Assets 433 726 433 726Capital Contributions 81 35 656 43Contracting and Consulting Income 29,840 23,380 115 1,333Total Operating Revenue 49,285 42,354 20,210 20,033

6. other incoMeGroup Parent

31-Mar-13 31-Mar-12 31-Mar-13 31-Mar-12$000 $000 $000 $000

Gain on sale of property, plant and equipment 43 29Dividends from subsidiaries 2,500 2,000Dividend income on available for sale financial assets 11 20 6 13Foreign exchange gains 65Total Other Income 54 49 2,506 2,078



7. oPerAtinG exPensesGroup Parent

31-Mar-13 31-Mar-12 31-Mar-13 31-Mar-12$000 $000 $000 $000

Loss on disposal of property, plant and equipment 272 476 260 428Foreign exchange losses 65Directors’ Fees 211 216 149 154Auditor’s remuneration to Audit New Zealand comprises:- Audit of financial statements 137 134 53 51- Other audit related services 12 12 12 12Operating Lease Expense 287 221Transmission Charges 3,867 3,973 3,867 3,973Maintenance and Operations 4,783 4,697 4,783 4,697Employee Related Expenses:- Defined contribution schemes 513 445- Other employee benefits 15,784 14,209 328 324Other Expenses 9,633 7,616 3,067 4,817

35,499 31,999 12,519 14,521

8. FinAnce incoMe And exPensesGroup Parent

31-Mar-13 31-Mar-12 31-Mar-13 31-Mar-12$000 $000 $000 $000

Interest income 43 28 293 213Unwinding of discount 23 53 23 53Finance Income 66 81 316 266

Interest expense on financial liabilities measured at amortised cost 891 1,409 1,006 1,512

Finance Expense 891 1,409 1,006 1,512

Net Finance Costs (825) (1,328) (690) (1,246)

9. incoMe tAxGroup Parent

31-Mar-13 31-Mar-12 31-Mar-13 31-Mar-12

$000 $000 $000 $000

current tax expense

Current Period 2,123 1,261 399 88

Adjustment for prior period 5

2,128 1,261 399 88

deferred tax expense

Origination and reversal of temporary differences 358 (111) 447 (52)

Deferred tax expense - removal of depreciation on buildings (58) (58)

358 (169) 447 (110)

Income Tax Expense Recognised in Profit 2,486 1,092 846 (22)



reconciliation of effective tax rate

Group Parent

31-Mar-13 31-Mar-12 31-Mar-13 31-Mar-12

$000 $000 $000 $000

Profit before income tax 7,728 3,870 5,289 2,138

Prima facie tax at 28% 2,164 1,084 1,481 599

Non deductible expenses 249 74

Tax exempt income (699) (558)

Under (over) provided in prior periods 11

Imputation credits received (5) (8) (3) (5)

Change in temporary differences 67 67

Effect on deferred tax balances of

- removal of depreciation on buildings (58) (58)

Income Tax Expense Recognised in Profit 2,486 1,092 846 (22)

income tax recognised directly in equityGroup Parent

31-Mar-13 31-Mar-12 31-Mar-13 31-Mar-12

$000 $000 $000 $000

Movement in fair value of derivatives 300 52 68 67

Reversal of deferred tax liability on revaluation of distribution system assets

(4,416) (4,416)

Total Income Tax Recognised Directly In Equity (4,116) 52 (4,348) 67



9. incoMe tAx (continued)recognised deferred tax Assets and LiabilitiesDeferred tax assets and liabilities are attributable to the following:

opening Balance

charged to income

charged to equity

closing Balance

Group 31-Mar-12 31-Mar-13

$000 $000 $000 $000

Deferred Tax Liabilities

Property, plant and equipment 19,686 713 (4,416) 15,983

Available for sale assets 21 21

Construction contracts 2 2

Derivatives (151) 300 149

19,558 713 (4,116) 16,155

Deferred Tax Assets

Employee Provisions 441 14 455

Provision for Doubtful Debts 25 14 39

Tax Losses 128 234 362

594 262 856

Net Deferred Tax Liability 18,964 451 (4,116) 15,299

Attributable to:

Parent 19,031 447 (4,348) 15,130

Subsidiaries (67) 4 232 169

18,964 451 (4,116) 15,299

opening Balance

charged to income

charged to equity

closing Balance

31-Mar-11 31-Mar-12

Deferred Tax Liabilities $000 $000 $000 $000

Property, plant and equipment 19,419 267 19,686


Construction Contracts 306 (304) 2

19,746 (37) 19,709

Deferred Tax Assets

Employee Provisions 388 53 441

Provision for Doubtful Debts 24 1 25

Derivatives 202 (51) 151

Tax Losses 43 85 128

657 139 (51) 745

Net Deferred Tax Liability 19,089 (176) 51 18,964

Attributable to:

Parent 19,080 (116) 67 19,031

Subsidiaries 9 (60) (16) (67)

19,089 (176) 51 18,964



9. incoMe tAx (continued)recognised deferred tax Assets and LiabilitiesDeferred tax assets and liabilities are attributable to the following:

Parent opening Balance

charged to income

charged to equity

closing Balance

31-Mar-12 31-Mar-13


Property, plant and equipment 19,172 447 (4,416) 15,203


19,193 447 (4,416) 15,224

Deferred Tax Assets

Provision for doubtful debts 4 1 5


Employee Entitlements 23 (1) 22

162 (68) 94

Net Deferred Tax Liability 19,031 447 (4,348) 15,130

opening Balance

charged to income

charged to equity

closing Balance

31-Mar-11 31-Mar-12


Property, plant and equipment 18,972 200 19,172


Construction Contracts 294 (294)

19,287 (94) 19,193

Deferred Tax Assets

Provision for doubtful debts 5 (1) 4


Employee Entitlement 23 23

207 22 (67) 162

Net Deferred Tax Liability 19,080 (116) 67 19,031

imputation creditsGroup Parent

31-Mar-13 31-Mar-12 31-Mar-13 31-Mar-12

$000 $000 $000 $000

Imputation credits are available to shareholders of the Company:

Through the Parent 13,245 12,128 13,245 12,128

Through subsidiaries 5,600 5,315

18,845 17,443 13,245 12,128



10. ProPertY, PLAnt And eQuiPMent

electricity hydro Land andGroup distribution Generation Buildings other total

$000 $000 $000 $000 $000Cost or deemed costBalance at 31 March 2011 117,447 6,141 7,007 8,807 139,402Additions 5,201 10,453 15 1,079 16,748Disposals (506) (230) (736)Balance at 31 March 2012 122,142 16,594 7,022 9,656 155,414

Additions 5,181 16,695 7 1,542 23,426Disposals (450) (370) (820)Impairment loss on revaluation (26,817) (26,817)Balance at 31 March 2013 100,056 33,289 7,029 10,828 151,203

Accumulated Depreciation, Amortisation and ImpairmentBalance at 31 March 2011 3,761 129 4,709 8,599Depreciation for the year 3,990 129 934 5,053Disposals (78) (165) (243)Balance at 31 March 2012 7,673 258 5,478 13,409

Depreciation for the year 4,004 130 962 5,096Disposals (190) (331) (521)Impairment loss on revaluation (11,487) (11,487)Balance at 31 March 2013 388 6,109 6,497

net Book value at 31 March 2012 114,469 16,594 6,764 4,178 142,005

net Book value at 31 March 2013 100,056 33,289 6,642 4,719 144,706

Borrowing costs of $666,591 have been capitalised during the period at a weighted average interest rate of 4.48% (2012 $102,743 4.59%).


electricity Land andParent distribution Buildings other total

$000 $000 $000 $000Cost or deemed costBalance at 31 March 2011 117,696 7,007 325 125,028Additions 5,321 15 12 5,348Disposals (506) (506)Balance at 31 March 2012 122,511 7,022 337 129,870

Additions 5,254 7 5,261Disposals (450) (450)Impairment loss on revaluation (27,259) (27,259)Balance at 31 March 2013 100,056 7,029 337 107,422

Depreciation and impairment lossesBalance at 31 March 2011 3,761 129 270 4,160Depreciation for the year 3,990 129 9 4,128Disposals (78) (78)Balance at 31 March 2012 7,673 258 279 8,210

Depreciation for the year 4,004 130 8 4,142Disposals (190) (190)Impairment loss on revaluation (11,487) (11,487)Balance at 31 March 2013 388 287 675

net Book value 31 March 2012 114,838 6,764 58 121,660

net Book value 31 March 2013 100,056 6,641 50 106,747

Capital work in progress is contained in the following categories:Group Parent

31-Mar-13 31-Mar-12 31-Mar-13 31-Mar-12$000 $000 $000 $000

Electricity Distribution System 634 1,289 634 1,289Hydro Generation 33,289 16,594Land and Buildings 7 7Other 128 166

34,058 18,049 641 1,289

securityAt 31 March 2013, the assets of the group are subject to a guarantee to secure bank loans.




11. GoodwiLL And other intAnGiBLes

Group Goodwill software total$000 $000 $000

Cost or deemed costBalance at 31 March 2011 6,993 1,458 8,451Additions 230 230Balance at 31 March 2012 6,993 1,688 8,681

Additions 122 122

Balance at 31 March 2013 6,993 1,810 8,803

Depreciation and impairment lossesBalance at 31 March 2011 882 882Amortisation for the year 152 152Balance at 31 March 2012 1,034 1,034

Amortisation for the year 191 191

Balance at 31 March 2013 1,225 1,225

net Book value 31 March 2012 6,993 654 7,647

net Book value 31 March 2013 6,993 585 7,578

Goodwill has been assessed based on profitability forecasts for these entities and no impairment has occurred.

Parent Goodwill software total$000 $000 $000

Cost or deemed costBalance at 31 March 2011 861 861Additions 77 77Balance at 31 March 2012 938 938

Additions 29 29

Balance at 31 March 2013 967 967

Depreciation and impairment lossesBalance at 31 March 2011 479 479Amortisation for the year 79 79Balance at 31 March 2012 558 558

Amortisation for the year 76 76

Balance at 31 March 2013 634 634

net Book value 31 March 2012 380 380

net Book value 31 March 2013 333 333


12. investMent in suBsidiAriesParent

31-Mar-13 31-Mar-12

$000 $000

Shares in ElectroNet Services Limited 800 800Shares in Amethyst Hydro Limited 9,680 9,680Loan to Mitton ElectroNet Limited 3,500 3,500Loan to ElectroNet Transmission Limited 1,500 1,500

15,480 15,480

13. other investMentsGroup Parent

31-Mar-13 31-Mar-12 31-Mar-13 31-Mar-12$000 $000 $000 $000

Non Current InvestmentsAvailable for sale financial assets- International Panel & Lumber (West Coast) Limited 103 103 103 103- Other investments 3 9Other Loans 800 777 800 777

906 889 903 880

14. FinAnce LeAse receivABLe (PArent And GrouP)Minimum Future Lease

PaymentsPresent value of Future

Lease Payments31-Mar-13 31-Mar-12 31-Mar-13 31-Mar-12

$000 $000 $000 $000No longer than one year 6 24 6 20Later than one year and not later than five years 6 6Minimum lease payments 6 30 6 26Less future finance charges (4)Present value of minimum lease payments 6 26 6 26

Comprising:Current 6 20Non Current 6

6 26

15. cAsh And cAsh eQuivALents

Group Parent31-Mar-13 31-Mar-12 31-Mar-13 31-Mar-12

$000 $000 $000 $000

Bank Balances 494 470 36 42Call Deposits 1,610 2,222 3 355

Cash and Cash Equivalents in Statement of Cashflows 2,104 2,692 39 397




16. trAde And other receivABLesGroup Parent

31-Mar-13 31-Mar-12 31-Mar-13 31-Mar-12$000 $000 $000 $000

Trade and other receivables 7,048 7,959 2,439 2,265Trade receivables due from related parties 640 44Construction work in progress 2,557 2,378 730 730

9,605 10,337 3,809 3,039less provision for impairment (38) (49) (19) (14)

9,567 10,288 3,790 3,025

17. construction contrActsGroup Parent

31-Mar-13 31-Mar-12 31-Mar-13 31-Mar-12$000 $000 $000 $000

Construction costs incurred 2,824 2,460Recognised profits (less recognised losses to date) 756 798

3,580 3,258Less progress billings (3,307) (2,883)Due from customers 273 375

The balance due from customers is included in Construction Work In Progress (Note 16). No advances have been received and no retentions have been included in Progress Billings.

18. eQuitYshare capitalThe Company has 25,000,000 (2012 25,000,000) ordinary shares on issue, 300,000 (2012 300,000) 7.25% redeemable preference shares on issue and 5,000,000 (2012 5,000,000) preference shares on issue. There have been no movements in share capital in the current and comparative years.

All issued shares are fully paid and have no par value. The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Parent.

The redeemable preference shares are classified as liabilities. The shares have a fixed dividend payment and can be redeemed to cash at the option of the Company.

Holders of preference shares receive a dividend of per share at the Parent’s discretion determined by the Company in a general meeting. They do not have the right to participate in any additional dividends declared for ordinary shareholders.

Preference shares and redeemable preference shares do not carry the right to vote. All shares rank equally with regard to the Parent’s residual assets, except that preference shareholders participate only to the extent of the face value of the shares.

hedging reserveThe hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedging instruments related to hedged transactions that have not yet occurred.

Fair value reserveThe fair value reserve comprises the cumulative net change in the fair value of available-for-sale financial assets until the investment is derecognised.

revaluation reserve The revaluation reserve relates to the revaluation of property, plant and equipment.


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18. eQuitY (continued)



18. eQuitY (continued)

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19. LoAns And BorrowinGsGroup Parent

31-Mar-13 31-Mar-12 31-Mar-13 31-Mar-12$000 $000 $000 $000

non current LiabilitiesNon current portion of secured bank loans 21,300 4,250Redeemable preference shares 300 300 300 300

21,600 4,550 300 300current LiabilitiesCurrent portion of secured bank loans 11,000 17,350 11,000 17,350Loan from WCEPT 800 800 800 800Loans from subsidiaries 2,615

11,800 18,150 14,415 18,150

33,400 22,700 14,715 18,450

weighted Average

interest rateFace value

2013carrying

value 2013Face

value 2012GrouP

$000 $000 $000Less than one yearSecured bank loans 6.01% 11,000 11,000 17,350Loan from WCEPT 0% 800 800 800

11,800 11,800 18,150Longer than one yearSecured bank loans 4.59% 21,300 21,300 4,250Redeemable preference shares 7.25% 300 300 300

21,600 21,600 4,550

Total Interest Bearing Liabilities - Group 33,400 33,400 22,700

weighted Average

interest rateFace value

2013carrying

value 2013Face

value 2012PArent

$000 $000 $000Less than one yearSecured bank loans 6.01% 11,000 11,000 17,350Loan from WCEPT 0% 800 800 800Loans from Subsidiaries 4.10% 2,615 2,615

14,415 14,415 18,150Longer than one yearRedeemable preference shares 7.25% 300 300 300

Total Interest Bearing Liabilities - Parent 14,715 14,715 18,450

The parent’s Westpac loan facility is due to roll over in December 2013. The roll over of this facility is at the discretion of the Bank and therefore is required to be disclosed as current. However, the Company expects that this facility will be rolled over for at least another year.

The bank loans are secured over all the assets of the Group.



20. FinAnce LeAse PAYABLe (GrouP)Minimum Future Lease

PaymentsPresent value of Future Lease

Payments31-Mar-13 31-Mar-12 31-Mar-13 31-Mar-12

$000 $000 $000 $000No longer than one year 48 47Later than one year and not later than five yearsMinimum lease payments 48 47Less future finance charges (1)Present value of minimum lease payments 47 47

Comprising:Current 47Non Current

47

21. trAde And other PAYABLesGroup Parent

31-Mar-13 31-Mar-12 31-Mar-13 31-Mar-12$000 $000 $000 $000

Trade payables due to related parties 1,540 1,499Other trade payables 4,537 4,727 610 652Accrued interest 108 145 66 129

4,645 4,872 2,216 2,280

22. FinAnciAL instruMents

Exposure to credit, interest rate, foreign currency, and liquidity risks arises in the normal course of the Group’s business.

credit riskFinancial instruments which potentially subject the Group to credit risk are cash and cash equivalents, trade receivables and investments. The Group places its cash with high quality financial institutions and limits the amount of exposure to any one financial institution. The Group has a high concentration of credit risk to Trustpower in relation to distribution line charges to the electricity retailer and other contract works and Transpower in relation to contract works. Trustpower and Transpower represent 16% and 28% respectively of receivables as at 31 March 2013 (2012 14% and 21% respectively).

Management has a credit policy in place under which each new customer is individually analysed for credit worthiness and assigned a purchase limit before the standard payment and delivery terms and conditions are offered. The parent company has debtors who have damaged network assets. Many of these debtors are unable to settle their accounts immediately and payment arrangements have been entered into through the Courts.

The carrying amount of financial assets represents the Group’s maximum credit exposure.

The Group has not renegotiated the terms of any financial assets which would result in the carrying amount no longer being past due or avoid a possible past due status.

The Group’s exposure to geographical credit risk is almost entirely within New Zealand, with some transactions to Australia.


The status of trade and finance lease receivables at the reporting date is as follows:


$000 $000 $000 $000

Not past due 8,424 8,142 3,688 3,026Past due 0-30 days 626 1,366 89Past due 31-60 days 210 91 6Past due more than 60 days 350 758 32 33

9,611 10,357 3,815 3,059Allowance for impairment (38) (49) (19) (14)

9,573 10,308 3,796 3,045

An allowance for impairment of receivables relates to debts past due by more than 60 days and is based on an analysis of individual balances.

Loans receivable are secured by way of bond or other commercial arrangement. The value of security is at least equal to the value of the outstanding loan balance.

Liquidity riskLiquidity risk represents the Group’s ability to meet its contractual obligations. The Group evaluates its liquidity requirements on an ongoing basis. In general, the Group generates sufficient cash flows from its operating activities to meet its obligations arising from its financial liabilities and has credit lines in place to cover potential shortfalls.

Foreign currency riskThe Group has minimal currency risk given that financial instruments are principally transacted in New Zealand dollars. Foreign exchange contracts are employed by the Group to manage its exposure to currency fluctuations for major transactions denominated in currencies other than New Zealand dollars. At 31 March 2012, the Group had in place Australian dollar forward exchange contracts to cover exposure to Australian dollar receivables of $1,079,000 NZD. The principal amount of these contracts is $994,000 NZD (Fair Value $5,000).

At 31 March 2012, the Group also had in place US dollar forward exchange contracts to cover exposure to future US dollar payables of $971,000 NZD. The principal amount of these contracts is $971,000 NZD (Fair Value $(60,254)).

The Group did not have any forward exchange contracts in place at 31 March 2013.




interest rate riskThe Group manages its exposure to changes in interest rates on borrowings in line with policy parameters set in its Treasury Policy. Interest rate swaps have been entered into to achieve an appropriate mix of fixed and floating interest rate exposures.

Interest rate swap contracts outstanding at balance date:

contracted Fixed interest rate

notional Principal Amount

Fair value

PArent 31-Mar-13 31-Mar-12 31-Mar-13 31-Mar-12 31-Mar-13 31-Mar-12

$000 $000 $000 $000 $000 $000

Outstanding floating to fixed contracts:

Less than 1 year 5.74% 7.51% 4,000 5,000 (62) (118)

1 to 3 years 4.28% 5.70% 7,000 7,000 (180) (365)

11,000 12,000 (242) (483)

contracted Fixed interest rate

notional Principal Amount

Fair value

GrouP 31-Mar-13 31-Mar-12 31-Mar-13 31-Mar-12 31-Mar-13 31-Mar-12

$000 $000 $000 $000 $000 $000

Outstanding floating to fixed contracts:

Less than 1 year 5.74% 7.51% 4,000 5,000 (62) (118)

1 to 3 years 3.91% 5.36% 14,100 8,438 (269) (422)

3 to 5 years 3.45% 7,000 (35)

25,100 13,438 (366) (540)

These swap contracts have been designated as cashflow hedges.

other Market Price riskThe Group is exposed to variability in electricity generation sales revenue due to changes in electricity spot prices. To manage this risk the Group has entered into an electricity swap to fix the price for a specified volume of generation. The notional value of the outstanding electricity swaps at 31 March 2013 was 56.4 MWh with a fair value of $905,619. This swap contract has been designated as a cashflow hedge.

capital ManagementThe Group’s capital includes share capital, reserves, retained earnings and minority interests. The Group’s policy is to maintain a strong capital base so as to maintain investor, creditor and shareholder confidence and to sustain future development of the business. The impact of the level of capital on shareholders’ returns is also recognised and the Group recognises the need to maintain a balance between the higher returns that might be possible with greater gearing and the advantages and security afforded by a sound capital position. The Group is not subject to any externally imposed capital requirements.

The allocation of capital between its specific business segments operations and activities is, to a large extent, driven by optimisation of the return achieved on the capital allocated. The process of allocating capital to specific business segment operations and activities is undertaken independently of those responsible for the operations and activities.

The Group’s policies in respect of capital management and allocation are reviewed regularly by the Board of Directors. There have been no material changes in the Group’s management of capital during the period.

sensitivity AnalysisIn managing interest rate and currency risks, the Group aims to reduce the impact of short term fluctuations on the Group’s earnings. Over the longer term however, permanent changes in foreign exchange and interest rates will have an impact on profit.



At 31 March 2013, it is estimated that a general increase of one percentage point in interest rates could decrease the Group’s profit by $72,000 (2012 $81,625) and increase equity (excluding retained earnings) by $551,652 (2012 $247,000).

A decrease of one percentage point in interest rates would have the opposite impact on profit and decrease equity by $586,948.

At 31 March 2013, it is estimated that an increase of ten percentage points in forward electricity prices will decrease equity (excluding retained earnings) by $686,751. The decrease in forward electricity prices would have the opposite impact on equity than described above.

It is estimated that a general increase of ten percentage points in the value of the New Zealand dollar against other foreign currencies would have decreased the Group’s profit before tax by less than $10,000 for the year ended 31 March 2013 (2012 less than $10,000).

classification of Financial instruments

designatedat fair value

Loans andreceivables

Availablefor sale

otherAmortised

cost

totalcarrying

valueGrouP - 2013 Notes

$000 $000 $000 $000 $000

current Assets

Cash and cash equivalents 15 2,104 2,104

Trade and other receivables 16 9,567 9,567

Finance lease receivable 14 6 6

11,677 11,677

non current Assets

Other investments 13 106 800 906

Financial Derivatives 14 906 906

906 106 800 1,812

total Financial Assets 906 11,677 106 800 13,489

current Liabilities

Trade and other payables 21 4,645 4,645

Contract retentions 243 243

Loans and borrowings 19 11,800 11,800

Financial derivatives 22 62 62

62 16,688 16,750

non current Liabilities



304 21,600 21,904

total Financial Liabilities 366 38,288 38,654





Availablefor sale

otherAmortised

cost

totalcarrying

valueGrouP - 2012 Notes

$000 $000 $000 $000 $000

current Assets

Cash and cash equivalents 15 2,692 2,692



13,000 13,000

non current Assets


Finance lease receivables 14 6 6

6 112 777 895

total Financial Assets 13,006 112 777 13,895

current Liabilities


Finance lease payable 20 47 47

Contract retentions 305 305



248 23,373 23,621




347 4,550 4,897






Availablefor sale

otherAmortised

cost

totalcarrying

valuePArent - 2013 Notes

$000 $000 $000 $000 $000

current Assets

Cash and cash equivalents 15 39 39



3,835 3,835

non current Assets

Loans to subsidiaries 12 5,000 5,000


5,000 103 800 5,903

total Financial Assets 8,835 103 800 9,738

current Liabilities




62 16,631 16,693


Loans and borrowings 19 300 300


180 300 480






Availablefor sale

otherAmortised

cost

totalcarrying

valuePArent - 2012 Notes

$000 $000 $000 $000 $000

current Assets

Cash and cash equivalents 15 397 397



Foreign exchange contracts 65 65

65 3,442 3,507

non current Assets

Loan to subsidiaries 12 5,000 5,000


Finance lease receivables 14 6 6

5,006 103 777 5,886

total Financial Assets 65 8,448 103 777 9,393

current Liabilities




183 20,430 20,613


Loans and borrowings 19 300 300


365 300 665


Maturity Analysis of Financial Liabilities

Balance sheet

contractualcashflows

Less than1 Year 1-2 Years 2-5 YearsGroup 2013

$000 $000 $000 $000 $000

Secured bank loans 32,300 32,541 32,541

Redeemable preference shares 1 300 109 22 22 65

Trade and other payables 4,645 4,645 4,645

Loan from WCEPT 800 800 800

total non derivative Liabilities 38,045 38,095 38,008 22 65

interest rate swaps:

Net Interest Settled Outflow (Inflow) 366 372 293 143 (63)

electricity swaps (inflow/asset) (906) (961) (137) (284) (540)

37,505 37,506 38,164 (120) (538)



Balance sheet


Less than1 Year 1-2 Years 2-5 YearsGroup 2012

$000 $000 $000 $000 $000






interest rate swaps

Net Interest Settled Outflow (Inflow) 540 554 356 150 48

Foreign exchange contracts

Net Cash Outflow (Inflow) 55 (24) (24)

28,166 28,792 28,507 172 113

Balance sheet


Less than1 Year 1-2 Years 2-5 YearsParent 2013

$000 $000 $000 $000 $000




Loans from subsidiaries 2,615 2,615 2,615




Net Interest Settled Outflow (Inflow) 242 249 175 74

17,173 17,093 16,932 96 65

Balance sheet


Less than1 Year 1-2 Years 2-5 YearsParent 2012

$000 $000 $000 $000 $000







Net Interest Settled Outflow (Inflow) 365 496 323 127 46

21,095 21,736 21,476 149 111

1 Annual cashflows continue in perpetuity until preference shares are redeemed.



23. coMMitMentsGroup Parent

31-Mar-13 31-Mar-12 31-Mar-13 31-Mar-12capital commitments $000 $000 $000 $000No longer than 1 year 7,372 326

operating Lease commitmentsNo longer than 1 year 280 2311 to 2 years 146 2022 to 5 years 78 110

24. continGencies

• ElectroNet Services Limited, Mitton ElectroNet Limited and ElectroNet Transmission Limited have provided guarantees secured over the assets of the companies, to Westpac in relation to debts owed by Westpower Limited. (No change from 2012)• Westpower has provided a guarantee to Westpac in relation to the debts owed by Amethyst Hydro Limited.• Westpower Limited has provided bank guarantees from Westpac to the value of $600,000. (2012 $300,000)• ElectroNet Services has provided a performance bond of $650,000 in relation to contract work undertaken during the period. (2012 nil)• The Group has no other contingent liabilities or contingent assets.

25. reconciLiAtion oF ProFit For the Period with net cAsh FroM oPerAtinG Activities


$000 $000 $000 $000

Profit for the period 5,242 2,778 4,443 2,160

Adjustments for non cash itemsDepreciation 5,096 5,053 4,142 4,128Amortisation of intangibles 191 152 76 79Vested assets (433) (726) (433) (726)Unwinding of discount (23) (53) (23) (53)Loss (Gain) on sale of property, plant and equipment 229 447 260 428Change in deferred tax 451 (176) 447 (116)Change in employee entitlements (non current) 67 7Change in foreign exchange contracts 5 (5)Dividend from subsidiary (non cash) (2,000)

5,583 4,699 4,469 1,740Movement in working capital itemsChange in trade and other receivables 721 10,189 (765) 12,582Change in inventories 1 (76)Change in trade and other payables (226) 594 (64) (654)Change in employee benefits 108 134 (3) 4Change in current tax asset 568 (241) 289 (20)

Adjustments for items classified as investing activitiesChange in capital creditors 232 12 (214) 310Change in capital prepayments (40) (98)Change in finance lease receivable (current) 14 (3) 14 (3)Change in finance lease receivable (non current) 6 20 6 20net cashflow from operating Activities 12,209 18,008 8,175 16,139


26. reLAted PArties

Parent and ultimate controlling PartyThe immediate parent of the Group is Westpower Limited and the ultimate controlling party of the Group is West Coast Electric Power Trust. See summary of group entities Note 27.

directors interestsDirectors or their related parties hold positions in other entities that result in them having control or significant influence over the financial or operating policies of these entities.

A number of these entities transacted with the Group in the reporting period. The transactions were for the purchase of electricity contracting and IT services. The terms and conditions of the transactions with directors and their related parties were no more favorable than those available, or which might reasonably be expected to be available, on similar transactions to unrelated entities on an arm’s length basis.

The aggregate value of transactions and outstanding balances relating to key management personnel and entities over which they have control or significant influence were as follows:

transaction value for the period ended Balance outstanding

director Note 31-Mar-13 31-Mar-12 31-Mar-13 31-Mar-12

Services provided to: $000 $000 $000 $000

H Little (i) 7 7 - -

S Merriman (ii) 52 55 5 2

A Williams (iii) - 5 - -

Services received from:

S Merriman (iv) 223 200 21 -

A Williams (v) 2 - - -

(i) The Group provided services to H Little and Westland Milk Products Limited. H Little is a shareholder of this company. (ii) The Group provides services to Marshall and Heaphy Limited and High Street Business Park Limited. S Merriman is the managing director and shareholder of Marshall and Heaphy Limited, and a shareholder in High Street Business Park Limited.(iii) The Group provided services to The Ashley Hotel Limited. A Williams is a director of this company.(iv) The Group received services from Top Gear Performance Limited. S Merriman is a shareholder of Top Gear Performance Limited.(v) The Group received services from The Ashley Hotel Limited. A Williams is a director and shareholder of this company.




other related Party transactions

transaction value for the period ended

Balance outstanding

31-Mar-13 31-Mar-12 31-Mar-13 31-Mar-12

$000 $000 $000 $000

ElectroNet Services Limited and Westpower Limited

Services provided to Westpower 11,493 12,895 1,505 1,400

Services received from Westpower 75 75 17 14

Loan advances to Westpower 5,450 1,400 1 1,630 -

Loan repayments from Westpower 3,820 2,935 1

Interest paid by Westpower 57 56 6 -

Dividend paid to Westpower 2,500 2,000 1 - -

ElectroNet Services Limited and Amethyst Hydro Limited

Services provided to Amethyst Hydro 1,832 107 201 102

ElectroNet Services Limited and Mitton ElectroNet Limited

Services provided to Mitton ElectroNet 152 201 9 15

Services received from Mitton ElectroNet 434 495 48 67

Dividend paid by Mitton ElectroNet 750 500 1 - -

ElectroNet Services Limited and West Coast Electric Power Trust (WCEPT)

Services provided to WCEPT 11 10 1 3

Mitton ElectroNet Limited and Westpower Limited

Services provided to Westpower 110 312 25 101

Loan advance from Westpower - - 3,500 3,500

Interest paid to Westpower 198 144 18 12

Loan advance to Westpower 1,425 340 275 -

Loan repayments from Westpower 1,150 750 1 - -


Mitton ElectroNet Limited and Amethyst Hydro Limited

Services provided to Amethyst Hydro 743 451 19 129

Mitton ElectroNet Limited and ElectroNet Transmission Limited (ETL)

Services provided by ETL 12 - - -

1 In 2012 the dividend from Mitton ElectroNet ($500,000) and the dividend to Westpower ($2,000,000) were applied to offset the loan to Westpower.


transaction value for the period ended

Balance outstanding

31-Mar-13 31-Mar-12 31-Mar-13 31-Mar-12

$000 $000 $000 $000

Westpower Limited and Amethyst Hydro Limited

Interest paid to Amethyst Hydro - 32 - -

Advance to Westpower - 5,285 - -

Equity Contributions from Westpower - 4,630 - -

Capital Contributions to Westpower 575 7 590 8


- Fair value - - - (60)

- Nominal value - - - 971

ElectroNet Services Limited and ElectroNet Transmission Limited (ETL)

Services provided to ETL 508 154 241 35

Services provided by ETL 89 119 10 -

Loan advance to ETL - 480 - -

Loan repayments from ETL - 480 - -

Interest paid by ETL - 2 - -

Dividend paid by ETL 750 - - -

Westpower Limited and ElectroNet Transmission Limited

Loan advance to ETL - - 1,500 1,500

Interest paid by ETL 85 60 8 5

Loan advance to Westpower 2,610 500 710 -

Loan repayments from Westpower 1,900 700 - -



- Fair value - - - 5

- Nominal value - - - 994

Westpower Limited and West Coast Electric Power Trust (WCEPT)

Loan from WCEPT - 800 800 800

Dividend paid to WCEPT 156 156 - -

key Management Personnel compensationKey management personnel include the Board of Directors and senior management.

31-Mar-13 31-Mar-12

$000 $000

Salaries and other short term benefits 1,590 1,459

Post employment benefits - -

Other long term benefits - -

1,590 1,459



27. GrouP entitiessubsidiaries

country of ownership incorporation

interest (%)

2013 2012

ElectroNet Services Limited (ENS) (subsidiary of Westpower) New Zealand 100 100

Mitton ElectroNet Limited (subsidiary of ENS) New Zealand 100 100

ElectroNet Transmission Limited (subsidiary of ENS) New Zealand 100 100

Amethyst Hydro Limited (subsidiary of Westpower) New Zealand 88 88

28. stAteMent oF PerForMAnceNotes Actual

2012/13target

2012/13target

2013/14target

2014/15

safety

Lost time injury frequency rate a) 4.81 0 0 0

reliability

SAIDI (System Average Interruption Duration Index) b) 212 175 175 175

SAIFI (System Average Interruption Frequency Index) b) 3.12 1.99 1.99 1.99

Asset Management

Opex Ratio 1 7.8% 6.6% 8.1% 8.3%

Capex Ratio 2 4.5% 4.9% 2.7% 2.2%

Renewal Ratio 3 c) 59% 39% 42% 37%

environment

Number of reported breaches of resource consent conditions per annum 0 0 0 0

Number of environmental incidents 0 0 0 0

Financial Performance

Group operating surplus before tax d) $7.7m $6.95m $8.9m $9.6m

Pre discount operating surplus before tax on consolidated shareholder funds d) 7.9% 6.7% 8.8% 8.7%

Post discount operating surplus before tax on consolidated shareholder funds d) 7.0% 5.9% 7.9% 7.1%

% of contracting revenue from group external parties 68% >30% >30% >30%

Consolidated shareholder funds to total assets 66% >50% >50% >50%

1 Operational Expenditure/System Assets Depreciated Replacement Cost2 Capital Expenditure/System Assets Depreciated Replacement Cost3 Asset Renewal-Refurbishment Opex and Capex/Depreciation

notesa) The Lost Time Injury Frequency Rate reflects 2 incidents with total days lost of 15 against a target of zero.b) The higher SAIDI and SAIFI results for 2013 reflects a number events during the year including storm related damage, vehicle accidents, planned outages etc.c) The 39% target did not reflect the actual level of budgeted renewals and the target should been restated at 68%. However delays in some project meant that all budgeted renewals were completed.d) The Group Operating Surplus Before Tax was up on target due to increased contracting income during the period

29. Post BALAnce dAte eventsThe Amethyst hydro scheme was commissioned in June 2013.

No other significant events have occurred in the period between balance date and the authorisation of the financial statements for issue by the Board of Directors.



WeSTpoWer LiMiTed audiTor’S reporT

Independent Auditor’s Report

To the readers of

Westpower Limited’s and group’s

financial statements and statement of performance

for the year ended 31 March 2013

The AuditorGeneral is the auditor of Westpower Limited (the company) and group. The AuditorGeneral has appointed me, John Mackey, using the staff

and resources of Audit New Zealand, to carry out the audit of the financial statements and statement of performance of the company and group on

her behalf.

We have audited:

• the financial statements of the company and group on pages 16 to 52, that comprise the statement of financial position as at 31 March 2013,

the statement of financial performance, statement of comprehensive income, statement of changes in equity and statement of cash flows for

the year ended on that date and the notes to the financial statements that include accounting policies and other explanatory information; and

• the statement of performance of the company and group on page 52.

Opinion

Financial statements and the statement of performance

In our opinion,

• the financial statements of the company and group on pages 16 to 52:

º comply with generally accepted accounting practice in New Zealand; and

º give a true and fair view of the company and group’s:

· financial position as at 31 March; and

· financial performance and cash flows for the year ended on that date;

· the statement of performance of the company and group on page 52:

º complies with generally accepted accounting practice in New Zealand; and

º gives a true and fair view of the company and group’s achievements measured against the performance

targets adopted for the year ended 31 March.

Other legal requirements

In accordance with the Financial Reporting Act 1993 we report that, in our opinion, proper accounting records have been kept by the company and

group as far as appears from an examination of those records.

Our audit was completed on 28 June 2013. This is the date at which our opinion is expressed.

The basis of our opinion is explained below. In addition, we outline the responsibilities of the Board of Directors and our responsibilities, and explain

our independence.

Basis of opinion

We carried out our audit in accordance with the AuditorGeneral’s Auditing Standards, which incorporate the International Standards on Auditing

(New Zealand). Those standards require that we comply with ethical requirements and plan and carry out our audit to obtain reasonable assurance

about whether the financial statements and statement of performance are free from material misstatement.

Material misstatements are differences or omissions of amounts and disclosures that, in our judgement, are likely to influence readers’ overall

understanding of the financial statements and statement of performance. If we had found material misstatements that were not corrected, we would

have referred to them in our opinion.


An audit involves carrying out procedures to obtain audit evidence about the amounts and disclosures in the financial statements and statement of

performance. The procedures selected depend on our judgement, including our assessment of risks of material misstatement of the financial statements

and statement of performance whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the preparation

of the company and group’s financial statements and statement of performance that give a true and fair view of the matters to which they relate. We

consider internal control in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion

on the effectiveness of the company and group’s internal control.

An audit also involves evaluating:

• the appropriateness of accounting policies used and whether they have been consistently applied;

• the reasonableness of the significant accounting estimates and judgements made by the Board of Directors;

• the adequacy of all disclosures in the financial statements and statement of performance; and

• the overall presentation of the financial statements and statement of performance.

We did not examine every transaction, nor do we guarantee complete accuracy of the financial statements and statement of performance. Also we did

not evaluate the security and controls over the electronic publication of the financial statements and statement of performance.

In accordance with the Financial Reporting Act 1993, we report that we have obtained all the information and explanations we have required. We

believe we have obtained sufficient and appropriate audit evidence to provide a basis for our audit opinion.

Responsibilities of the Board of Directors

The Board of Directors is responsible for preparing financial statements and a statement of performance that:

• comply with generally accepted accounting practice in New Zealand;

• give a true and fair view of the company and group’s financial position, financial performance and cash flows; and

• give a true and fair view of the company and group’s service performance achievements.

The Board of Directors is also responsible for such internal control as it determines is necessary to enable the preparation of financial statements and

a statement of performance that are free from material misstatement, whether due to fraud or error. The Board of Directors is also responsible for the

publication of the financial statements and statement of performance, whether in printed or electronic form.

The Board of Directors’ responsibilities arise from the Energy Companies Act 1992 and the Financial Reporting Act 1993.

Responsibilities of the Auditor

We are responsible for expressing an independent opinion on the financial statements and reporting that opinion to you based on our audit. Our

responsibility arises from section 15 of the Public Audit Act 2001 and section 45(1) of the Energy Companies Act 1992.

Independence

When carrying out the audit, we followed the independence requirements of the AuditorGeneral, which incorporate the independence requirements of

the External Reporting Board.

In addition to the audit of the annual financial statements we have carried out an assurance assignment for the company and group. This involved

issuing an audit certificate pursuant to the Electricity Distribution (Information Disclosure) Requirements 2008.

Other than the audit and this assignment, we have no relationship with or interests in the company or any of its subsidiaries.

John Mackey

Audit New Zealand

On behalf of the AuditorGeneral

Christchurch, New Zealand




Matters relating to the electronic presentation of the audited financial statements

This audit report relates to the financial statements of Westpower Limited (the company) for the year ended 31 March 2013 included on the company’s website. The Board of Directors are responsible for the maintenance and integrity of the company’s website. We have not been engaged to report on the integrity of the company’s website. We accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website.

The audit report refers only to the financial statements named above. It does not provide an opinion on any other information which may have been hyperlinked to or from these financial statements. If readers of this report are concerned with the inherent risks arising from electronic data communication they should refer to the published hard copy of the audited financial statements and related audit report dated 28 June 2013 to confirm the information included in the audited financial statements presented on this website.

Legislation in New Zealand governing the preparation and dissemination of financial information may differ from legislation in other jurisdictions.

Westpower Limited 146 Tainui STreeT

PO BOx 375, GreymOuThTelephone: 03 768 9300Facsimile: 03 768 2766

Cover photo by: Jean Willis

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