Financial Statements

Infratil Annual Report 43 Statement of Financial Performance For the Year Ended 31 March 2008

Consolidated Parent

2008 2007 2008 2007 Notes $Millions $Millions $Millions $Millions Operating revenue 1,346.7 655.1 89.7 62.5 Dividends 9.1 3.8 41.7 40.0 Equity accounted earnings of associates - 31.0 - - Total revenue 5 1,355.8 689.9 131.4 102.5 Depreciation 67.3 43.7 - - Amortisation of intangibles 12.0 4.5 - - Employee benefits 192.5 154.0 - - Other operating expenses 6 847.4 378.8 23.2 30.3 Total operating expenditure 1,119.2 581.0 23.2 30.3 Operating surplus before derivatives, realisations and impairments 236.6 108.9 108.2 72.2 Net (loss)/gain on financial derivatives - ineffective energy derivatives (9.4) 22.7 - - Net gain/(loss) on financial derivatives - investments 12.3 - - - Net investment realisations and (impairments) 5 (15.4) 43.7 - (0.9) Results from operating activities 224.1 175.3 108.2 71.3 Financial income 8 13.5 6.0 0.2 0.9 Financial expenses 8 162.3 82.5 65.2 47.5 Net financing expense 8 148.8 76.5 65.0 46.6 Surplus before taxation 75.3 98.8 43.2 24.7 Taxation expense 15 22.6 17.4 - - Net surplus for the year 52.7 81.4 43.2 24.7 Net surplus attributable to the parent entity (1.7) 68.2 43.2 24.7 Net surplus attributable to the minority interest 54.4 13.2 - - Earnings before interest, tax, depreciation, amortisation, fair value movements of financial instruments, realisations and impairments (EBITDAF) 315.9 157.1 108.2 72.2 Earnings per share cps cps

Basic (cents per share) (2007 adjusted for share split) 34 (0.4) 15.8

Diluted (cents per share) (2007 adjusted for share split) 34 (0.3) 14.9

The accompanying notes form part of these financial statements.

44 Picking the trends... Statement of Changes in Equity For the Year Ended 31 March 2008

Consolidated Parent

2008 2007 2008 2007 Notes $Millions $Millions $Millions $Millions Net surplus attributable to: - Parent entity shareholders (1.7) 68.2 43.2 24.7 - Minority shareholders in subsidiary companies 54.4 13.2 - - Currency translation reserve movements attributable to: - Parent entity shareholders (10.9) (14.8) - - - Minority shareholders in subsidiary companies (0.1) (0.1) - - Movement in revaluation reserve: - Parent entity shareholders 9.8 180.5 - - - Minority shareholders in subsidiary companies 8.0 (0.8) - - Movement in fair value reserves: - Parent entity shareholders (144.3) (0.3) - - - Minority shareholders in subsidiary companies - - - - Movement in cash flow/other reserves: - Parent entity shareholders 4.6 (11.8) - - - Minority shareholders in subsidiary companies 8.9 0.1 - - Total recognised directly in equity (124.0) 152.8 - - Total recognised directly in statement of financial performance 52.7 81.4 43.2 24.7 Total recognised revenues net of expenses for the year (71.3) 234.2 43.2 24.7 Shares issued 7.0 13.3 7.0 13.3 Rights issue proceeds from partly paid shares 88.0 - 88.0 - Net proceeds from sale of shares acquired through acquisition of subsidiary - 7.2 - - Total contributions from owners 95.0 20.5 95.0 13.3 Share buyback - (8.2) - (8.2) Minority interest dividends (50.9) (25.9) - - Parent company dividends paid in cash on ordinary shares (28.6) (27.4) (28.6) (27.4) Total distributions to owners (79.5) (61.5) (28.6) (35.6) Outside equity interest arising on establishment and stepped acquisition of subsidiaries (0.2) 620.6 - - Movements in equity for the year (56.0) 813.8 109.6 2.4 Equity at the beginning of the year Parent entity interest 809.4 602.7 259.6 257.2 Minority interest in subsidiary companies 717.0 109.9 - - 1,526.4 712.6 259.6 257.2 Equity at the end of the year Parent entity interest 733.3 809.4 369.2 259.6 Minority interest in subsidiary companies 737.1 717.0 - - 12 1,470.4 1,526.4 369.2 259.6

The accompanying notes form part of these financial statements.

Infratil Annual Report 45 Statement of Financial Position As at 31 March 2008

Consolidated Parent

2008 2007 2008 2007 Notes $Millions $Millions $Millions $Millions Cash and cash equivalents 11 255.2 128.5 5.8 2.6 Trade and accounts receivable 220.6 148.8 7.4 6.6 Derivative financial instruments 22 15.8 24.4 - - Inventories 10 9.9 4.9 - - Income tax receivable 22.7 7.0 1.6 - Current assets 524.2 313.6 14.8 9.2 Property, plant and equipment 20 3,194.2 2,982.8 - - Investment properties 21 67.5 62.3 - - Derivative financial instruments 22 74.1 18.2 - - Intangible assets 16 63.8 58.1 - - Goodwill 16 246.0 181.5 - - Investments 18 212.3 262.5 - - Deferred tax 15 17.3 8.6 - - Investment in subsidiaries - - 99.7 99.7 Advances to subsidiaries - - 1,013.2 905.1 Non current assets 3,875.2 3,574.0 1,112.9 1,004.8 Total assets 4,399.4 3,887.6 1,127.7 1,014.0 Trade payables 351.5 237.5 9.7 24.4 Derivative financial instruments 22 19.5 3.2 - - Bank debt 9 184.0 60.3 - - Income tax payable 13.1 1.5 - - Unsecured subordinated TrustPower bonds 24 50.5 86.2 - - Total current liabilities 618.6 388.7 9.7 24.4 Bank debt 9 862.9 616.3 - - Other liabilities 13 43.4 38.1 - - Deferred tax 15 341.9 368.2 - - Derivative financial instruments 22 1.9 8.5 - - Infrastructure bonds 23 508.8 508.8 508.8 508.8 Perpetual Infratil infrastructure bonds 23 240.0 221.2 240.0 221.2 Wellington International Airport bonds 24 150.0 - - - Unsecured subordinated TrustPower bonds 24 161.5 211.4 - - Non current liabilities 2,310.4 1,972.5 748.8 730.0 Attributable to shareholders of the Company 12 733.3 809.4 369.2 259.6 Minority interest in subsidiaries 12 737.1 717.0 - - Total equity 1,470.4 1,526.4 369.2 259.6 Total equity and liabilities 4,399.4 3,887.6 1,127.7 1,014.0 Net tangible assets per share before minority interest (2007 adjusted for share split) 2.6 2.9 Net tangible assets per share after minority interest (2007 adjusted for share split) 1.0 1.3 For and on behalf of the Board

Director Director 19 May 2008

The accompanying notes form part of these financial statements.

46 Picking the trends... Statement of Cash Flows For the Year Ended 31 March 2008

Consolidated Parent

2008 2007 2008 2007 Notes $Millions $Millions $Millions $Millions Cash flows from operating activities Cash was provided from: Dividends 9.1 17.2 41.7 40.0 Interest received 13.5 3.2 0.3 0.8 Taxation received - - - 2.5 Receipts from customers 1,232.5 639.7 - - 1,255.1 660.1 42.0 43.3 Cash was disbursed to: Payments to suppliers (892.1) (507.0) (37.3) (20.3) Interest paid (154.6) (71.2) (66.7) (40.6) Taxation paid (40.7) (16.5) (1.6) - (1,087.4) (594.7) (105.6) (60.9) Net cash inflow (outflow) from operating activities 29 167.7 65.4 (63.6) (17.6) Cash flows from investing activities Cash was provided from: Proceeds from sale of investments 36.2 261.3 - - Proceeds from sale of property, plant and equipment 3.0 - - - 39.2 261.3 - - Cash was disbursed to: Cash outflow for investments (151.8) (108.4) (18.4) (238.3) Cash outflow for investment derivatives (30.6) - - - Purchase of intangible assets (17.7) (2.6) - - Interest capitalised on construction of fixed assets (8.9) - Capitalisation of customer acquistion costs (9.2) (2.7) - - Acquisition of shares in subsidiaries (56.4) (472.6) - - Purchase of property, plant and equipment (274.6) (153.4) - - (549.2) (739.7) (18.4) (238.3) Net cash (outflow) from investing activities (510.0) (478.4) (18.4) (238.3) Cash flows from financing activities Cash was provided from: Proceeds from issue of shares 95.0 1.0 95.0 1.0 Net proceeds from sale of shares acquired through acquisition of subsidiary - 7.2 - - Net proceeds from re-issue of treasury stock - 12.3 - 12.3 Grants received - 8.2 - - Bank borrowings 587.5 285.8 - - Issue of bonds 169.4 248.4 18.8 248.4 851.9 562.9 113.8 261.7 Cash was disbursed to: Repay bank debt/subordinated (217.2) (13.8) - - Repay TrustPower bonds (86.2) - - - Infrastructure bonds issue expenses - (5.8) - (5.8) Share buyback - (8.2) - (8.2) Dividends paid to minority shareholders in subsidiary companies (50.9) (25.9) - - Dividends paid to parent company shareholders (28.6) (27.4) (28.6) (27.4) (382.9) (81.1) (28.6) (41.4) Net cash inflow from financing activities 469.0 481.8 85.1 220.3 Net increase/(decrease) in cash 126.7 68.8 3.2 (35.6) Cash balances at beginning of year 128.5 59.7 2.6 38.2 Cash at end of year 255.2 128.5 5.8 2.6

The accompanying notes form part of these financial statements.

Infratil Annual Report 47 Notes to the Financial Statements For the Year Ended 31 March 2008

(1) Accounting policies In respect to assets held at cost, judgements must be made about whether costs incurred relate to bringing an asset to (A) Basis of preparation working condition for its intended use, and therefore are These are the Company’s first annual NZIFRS financial appropriate for capitalisation as part of the cost of the asset. statements and NZIFRS 1 has been applied. Infratil Limited The determination of the appropriate life for a particular asset (“the Company”) is a company domiciled in New Zealand and requires management to make judgements about, among other registered under the Companies Act 1993. The Company is factors, the expected future economic benefits of the asset listed on the NZX and is an issuer in terms of the Financial and the likelihood of obsolescence. Assessing whether an Reporting Act 1993. asset is impaired may involve estimating the future cash flows, The financial statements have been prepared in accordance that the asset is expected to generate. This will, in turn, involve with Generally Accepted Accounting Practice in New Zealand a number of assumptions, including rates of expected revenue (‘NZ GAAP’). They comply with New Zealand Equivalents to growth or decline, expected future margins and the selection International Financial Reporting Standards (‘NZIFRS’) and of an appropriate discount rate for valuing future cash flows. other applicable financial reporting standards as appropriate for profit-oriented entities. Compliance with NZIFRS ensures that Valuation of investments the Group’s financial statements also comply with IFRS. The Management performs an assessment of the carrying value consolidated financial statements comprise the Company, its of investments at least annually and considers objective subsidiaries and associates (“the Group”). The presentation evidence for impairment on an investment by investment basis currency used in the preparation of these financial statements taking into account observable data on the investment, the is New Zealand dollars, which is also the Company’s functional fair value, the status or context of capital markets, its own currency. view of investment value, and its long term intentions. Infratil The financial statements comprise statements of the notes the following matters which are specifically considered in following: financial performance; changes in equity; financial terms of objective evidence of impairment of its listed market position; cash flows; significant accounting policies; as well as investments, and of whether there is a significant or prolonged the notes to those statements contained on pages 54 to 84 of decline from cost, which should be recorded as an impairment, this report. The financial statements are prepared on the basis and taken to profit and loss: any known loss events that have of historical cost, except certain property, plant and equipment occurred since the initial recognition date of the investments, valued in accordance with accounting policy (C), investment i.e. evidence of significant adverse technological, market, properties valued in accordance with accounting policy economic or legal change; its investment horizon and (D), investments are valued in accordance with accounting average holding periods for investments, specific initiatives policy (F) and financial derivatives valued in accordance with which reflect the strategic or influential nature of its existing accounting policy (L). investment position and internal valuations; and the state of financial markets. The assessment also requires management Accounting estimates and judgements to make judgements about the expected future performance The preparation of financial statements in conformity with and cash flows of the investee. NZIFRS requires management to make estimates and assumptions that affect the reported amounts of assets Accounting for income taxes and liabilities at the date of the financial statements and Preparation of the annual financial statements requires the reported amounts of revenues and expenses during management to make estimates as to, amongst other things, the reporting period. Actual results could differ from those the amount of tax that will ultimately be payable, the availability estimates. The principle areas of judgement in preparing these of losses to be carried forward and the amount of foreign tax financial statements are set out below. credits that it will receive. Actual results may differ from these estimates as a result of reassessment by management and/or Accounting for property, plant and equipment and, finite-life taxation authorities. intangible assets The Group’s property, plant and equipment are stated at Goodwill fair value by independent valuers, or cost. The basis of the The carrying value of goodwill is subject to an annual valuations include assessment of the net present value of impairment test to ensure the carrying value does not exceed the future earnings of the assets, depreciated replacement the recoverable amount at balance date. For the purpose of cost, and other market based information, in accordance with impairment testing, goodwill is allocated to the individual cash- asset valuation standards. The major inputs and assumptions generating units to which it relates. Any impairment losses that are used in the valuations that require judgement are recognised in the statement of financial performance. In include forecasts of future revenues, sales volumes, capital determining the recoverable amount of goodwill, valuation investment and expenditure profiles, capacity, replacement models to calculate the present value of expected future cash values and life assumptions for each asset and the application flows of the cash-generating units are used. The major inputs of discount rates.

48 Picking the trends... Notes to the Financial Statements For the Year Ended 31 March 2008

and assumptions that are used in the models that require comprise the consolidated entity, being the company (the management judgement include forecasts of sales, tariffs, parent entity) and its subsidiaries as defined in NZ IAS-27 customer numbers, customer churn, future energy prices and ‘Consolidated and Separate Financial Statements’ and equity costs, and discount rates. accounted associates. A list of subsidiaries and associates is shown in note 26. Consistent accounting policies are Derivatives employed in the preparation and presentation of the The key assumptions and risk factors for derivatives relate consolidated financial statements. On acquisition, the assets, to energy price hedges and their valuation. Energy price liabilities and contingent liabilities of a subsidiary are measured hedges are valued with reference to financial models of at their fair values at the date of acquisition. Any excess of future energy prices or market values for the derivatives. the cost of acquisition over the fair values of the identifiable Accounting judgements have been made in determining hedge net assets acquired is recognised as goodwill. If, after designation for the different types of derivatives employed remeasurement, the fair values of the identifiable net assets by the subsidiary company to hedge its risk exposures. acquired exceeds the costs of acquisition, the deficiency is Other derivatives including interest rate instruments, foreign credited to profit and loss in the period of acquisition. Intra- exchange contracts and S&P put contract valuations are based group balances and any unrealised income or expenses arising on market information and prices. from intra-group transactions are eliminated in preparing the consolidated financial statements. Revenue Management has exercised judgement in determining Subsidiaries estimated sales for unbilled revenues at balance date. Subsidiaries are all entities over which the Group has Specifically this involves estimates of consumption by control, that is, the power to govern the financial and customers for each unread energy meter, and for other items operating policies to derive benefits generally accompanying estimates of revenue including turnover-based rents and a shareholding of more than one half of the voting rights. passenger volumes based on customer information. The financial statements of subsidiaries are included in the consolidated financial statements using the purchase method Provision for doubtful debts of consolidation. Provisions are maintained for estimated losses incurred from customers being unable to make required payments. These Associates provisions take into account known commercial factors Associates are entities in which the Group has significant impacting specific customer accounts, as well as the overall influence, but not control, over the operating and financial profile of the debtor portfolio. In assessing the provision, policies. The consolidated financial statements include the factors such as past collection history, the age of receivable Group’s share of the net surplus of associates on an equity balances, the level of activity in customer accounts, as well as accounted basis. general macro-economic trends, are taken into account. Acquisition during the year NZIFRS Where an entity becomes part of the Group during the year, The Parent and Group changed its accounting policies on 1 the results of the entity are included in the consolidated results April 2007 to comply with NZIFRS. The transition to NZIFRS from the date that control or significant influence commenced. is accounted for in accordance with NZ IFRS-1 ‘First-time Adoption of New Zealand Equivalents to International Goodwill arising on acquisition Financial Reporting Standards’, with 1 April 2006 as the Goodwill arising on the acquisition of a subsidiary represents date of transition. An explanation of how the transition from the excess of the purchase consideration over the fair value superseded policies to NZIFRS has affected the Group’s of the identifiable net assets acquired. Goodwill is allocated financial position, financial performance and cash flows is set to cash-generating units and is not amortised, but tested for out in note 2. The accounting policies set out below have been impairment annually and whenever there is an indication that applied consistently to all periods presented in these financial the goodwill may be impaired. Any impairment is recognised statements and in preparing an opening NZIFRS Statement immediately in profit or loss and is not subsequently reversed. of Financial Position at 1 April 2006 for the purposes of the In respect of acquisitions prior to 1 April 2006 (the entity’s transition to NZIFRS. date of transition to NZIFRS) goodwill is included on the basis of the amount recorded under New Zealand’s previous GAAP (B) Basis of preparing consolidated financial on transition. statements (C) Property, plant and equipment Principles of consolidation Property, plant and equipment (PPE) is recorded at cost less The consolidated financial statements are prepared by accumulated depreciation (or fair value on acquisition), or combining the financial statements of all the entities that valuation with valuations undertaken on a systematic basis with

Infratil Annual Report 49 Notes to the Financial Statements For the Year Ended 31 March 2008

no individual asset included at a valuation undertaken more Depreciation is provided on a straight line basis and the major than five years previously. PPE that is revalued, is revalued depreciation periods (in years) are: to its fair value determined by independent valuation, in accordance with NZIAS 16: Property, Plant and Equipment. Buildings and civil works 5-80 Where the assets are of a specialised nature and do Generation assets 10-100 not have observable market values in their existing use, depreciated replacement cost is used as the basis of the Vehicles, plant and equipment 3-20 valuation, as required by NZIAS 16. Depreciated replacement Metering equipment 20 cost measures net current value as the most efficient, lowest cost which would replace existing assets and offer the same Individual assets’ remaining useful lives and residual values are amount of utility in their present use. Where there is no assessed during the revaluation process where revalued, or observable market an income based approach is used. at the reporting date and depreciation is calculated on a basis Land, buildings, leasehold improvements and civil works are consistent with those parameters. measured at fair value. Fair value is determined on the basis of (D) investment property periodic independent valuation prepared by valuation experts. The fair values are recognised in the financial statements of Investment property is property held to earn rental income. the Group, and are reviewed at the end of each reporting Investment property is measured at fair value with any change period to ensure that the carrying value of the land and therein recognised in profit or loss. Property that is being buildings is not materially different from their fair values. constructed for future use as investment property is accounted Any revaluation increase arising on the revaluation of land for as property, plant and equipment until construction or and buildings and other assets that are fair valued is credited development is complete, at which time it is remeasured to fair to the asset revaluation reserve, except to the extent that it value and reclassified as investment property. Any gain or loss reverses a valuation decrease for the same asset previously arising on remeasurement is recognised in profit or loss. recognised as an expense in profit or loss, in which case the (E) Receivables increase is credited to the Statement of Financial Performance Receivables are initially recognised at fair value and to the extent of the decrease previously charged. A decrease subsequently measured at amortised cost, less any provision in carrying amount arising from the revaluation of land and for impairment. A provision for impairment is established when buildings is charged as an expense in profit or loss to the there is objective evidence that the Group will not be able extent that it exceeds the balance, if any, held in the asset to collect all amounts due. The recoverable amount of the revaluation reserve relating to a previous revaluation of that Group’s receivables carried at amortised cost is calculated as asset. Depreciation on revalued buildings is charged to profit the present value of estimated future cash flows, discounted or loss. On subsequent sale or retirement of a revalued at the original effective interest rate (i.e., the effective interest property, the attributable revaluation surplus remaining in the rate computed at initial recognition of these financial assets). asset revaluation reserve, net of any related deferred taxes, is Receivables with a short duration are not discounted. transferred directly to retained earnings. At commencement of the lease term, finance leases are (F) investments recognised in the balance sheet at amounts equal to the Share investments held by the Company (other than fair value of the leased assets or, if lower, the present value subsidiaries and associates) are classified as available-for-sale of the minimum lease payments, each determined at the and are stated at fair value, with any resulting gain or loss inception of the lease. Subsequently they are stated at cost recognised directly in equity, except for impairment losses. less accumulated depreciation and impairment. Cost includes When these investments are derecognised, the cumulative expenditure that is directly attributable to the acquisition of the gain or loss previously recognised directly in equity is item. In the event that settlement of all or part of the purchase recognised in profit or loss. The fair value of shares are quoted consideration is deferred, cost is determined by discounting bid price where there is a quoted market bid price, or cost if the amounts payable in the future to their present value as at fair value cannot be reliably measured. Investments classified the date of acquisition. as available-for-sale are recognised/derecognised by the Generation assets are shown at fair value, based on Group on the trade date. Equity instruments are deemed to be three-yearly valuations by independent external valuers, less impaired whenever there is a significant or prolonged decline subsequent depreciation. Any accumulated depreciation at in fair value below the original purchase price or there is other the date of the revaluation is eliminated against the gross objective evidence that the investment is impaired. carrying value of the asset, and the net amount is restated to (G) other intangible assets the revalued amount of the asset. If any material changes in fair value are identified, valuations are performed on a more Leasehold intangible assets frequent basis. Leasehold intangible assets acquired by the Group are stated at fair value, less accumulated amortisation and any impairment losses. Fair value is calculated with reference to the future estimated present values of cash flows arising from

50 Picking the trends... Notes to the Financial Statements For the Year Ended 31 March 2008

those leases. Amortisation is charged to the Statement of (K) taxation Financial Performance over the period relating to the remaining Income tax comprises both current and deferred tax. Current lease tenures in proportion to the expiry profile of the leases, tax is the expected tax payable on the taxable income for the of between 1 and 20 years. Impairment testing is required year, using tax rates enacted or substantially enacted at the whenever there is an indication of impairment. balance date, and any adjustment to tax payable in respect Intangible customer base assets of previous years. Deferred tax is provided using the balance sheet liability method, providing for temporary differences Costs incurred in acquiring customers are recorded as between the carrying amounts of assets and liabilities for a customer base intangible asset based on the directly financial reporting purposes and the amounts used for attributable costs of obtaining the customer contract and are taxation purposes. The following temporary differences are amortised on a straight line basis over the period of expected not provided for: goodwill, the initial recognition of assets or benefit. This period has been assessed as between two years liabilities that affect neither accounting nor taxable profit, and and 20 years depending on the nature of the customer and differences relating to investments in subsidiaries to the extent term of the contract. The carrying value of customer bases is that they will probably not reverse in the foreseeable future. reviewed for any indication of impairment on an annual basis. The amount of deferred tax provided is based on the Generation development expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or The Group incurs costs in the exploration, evaluation, substantively enacted at the balance sheet date. A deferred consenting and construction of generation assets. Costs tax asset is recognised only to the extent that it is probable incurred are expensed in the Statements of Financial that future taxable profits will be available against which the Performance unless such costs are highly likely to be asset can be utilised. Deferred tax assets are reduced to the recouped through successful development and generation extent that it is no longer probable that the related tax benefit of electricity on the particular project. Where costs meet this will be realised. Additional income taxes that arise from the criteria and are capitalised they will ultimately be amortised distribution of dividends are recognised at the same time as over the estimated economic life of a project once complete. the liability to pay the related dividend. The status of capitalised development expenditure is Deferred tax is recognised as an expense or income in the reviewed on a regular basis and in the event that a project Statement of Financial Performance, except when it relates to is abandoned, or if it is considered that the expenditure is items credited or debited directly to equity, in which case the impaired, a write-off or provision is made in the year in which deferred tax is also recognised directly in equity, or where it that assessment is made. arises from the initial accounting for a business combination, (H) Non-current assets held for sale in which case it is taken into account in the determination of goodwill. Non-current assets (and disposal groups) classified as held for sale are measured at the lower of carrying amount or fair value (L) Derivative financial instruments less costs to sell. Non-current assets and disposal groups The Group is a party to derivative financial instruments as are classified as held for sale if their carrying amount will be part of its day to day operating activities. When appropriate, recovered through a sale transaction rather than through it enters into agreements to manage its interest rate, foreign continuing use. This condition is regarded as met only when exchange, operating and investment risks. the sale is highly probable and the asset (or disposal group) is In accordance with the Group’s risk management available for immediate sale in its present condition or the sale policies, the Group does not hold or issue derivative financial of the asset (or disposal group) is expected to be completed instruments for speculative purposes. However, derivatives within one year from the date of classification. that do not qualify for hedge accounting are accounted for (I) inventory at fair value through profit and loss. Derivative financial Inventory is stated at the lower of cost or net realisable instruments are recognised initially at fair value at the date they value. The cost of inventories is based on the first-in-first-out are entered into. Subsequent to initial recognition, derivative principle. financial instruments are stated at fair value. The resulting gain or loss is recognised in the profit or loss immediately (J) leases unless the derivative is designated effective as a hedging Assets acquired under finance leases are capitalised at the instrument, in which event, recognition of any resultant gain lower of fair value and present value of the minimum lease or loss depends on the nature of the hedging relationship. payments, with the corresponding recognition of finance lease The Group designates certain derivatives as hedges of highly liabilities. Operating lease rentals are charged to the Statement probable forecast transactions. The fair value of derivative of Financial Performance on a straight line basis over the financial instruments is classified as a non-current asset or a period of the lease. Lease incentives received are recognised non-current liability if the remaining maturity of the derivative in the Statement of Financial Performance as an integral part instrument is more than 12 months and as a current asset of the total lease expense and spread over the lease term. or current liability if the remaining maturity of the derivative

Infratil Annual Report 51 Notes to the Financial Statements For the Year Ended 31 March 2008

is less than 12 months. Counterparties to derivative financial (M) Foreign currency transactions instruments are generally major financial institutions and Transactions in foreign currencies are translated to the energy companies. The Group does not request security to respective functional currencies of Group entities at exchange support derivative financial instruments entered into. rates at the dates of the transactions. Monetary assets and Hedge accounting liabilities denominated in foreign currencies at the reporting The Group designates certain hedging instruments, which date are retranslated to the functional currency at the include derivatives, as either fair value hedges, cash flow exchange rate at that date. The foreign currency gain or loss hedges, or hedges of net investments in foreign operations. on monetary items is the difference between amortised cost in At the inception of the hedge relationship the Group the functional currency at the beginning of the period, adjusted documents the relationship between the hedging instrument for effective interest and payments during the period, and the and hedged item, along with its risk management objectives amortised cost in foreign currency translated at the exchange and its strategy for undertaking various hedge transactions. rate at the end of the period. Non-monetary assets and Furthermore, at the inception of the hedge and on an ongoing liabilities denominated in foreign currencies that are measured basis, the Group documents whether the hedging instrument that at fair value are retranslated to the functional currency at the is used in the hedging relationship is highly effective in offsetting exchange rate at the date that the fair value was determined. changes in fair values or cash flows of the hedged item. Foreign currency differences arising on retranslation are recognised in profit or loss, except for differences arising on Fair value hedges the retranslation of the net investment in a foreign operation. Changes in the fair value of derivatives that are designated and Foreign operations qualify as fair value hedges are recorded in the Statement of Financial Performance, together with any changes in the fair The assets and liabilities of foreign operations, including value of the hedged asset or liability that are attributable to the goodwill and fair value adjustments arising on acquisition, are hedged risk. translated to New Zealand dollars at exchange rates at the reporting date. The income and expenses of foreign operations Cash flow hedges are translated to New Zealand dollars at the average rate. The effective portion of changes in the fair value of derivatives (N) goods & Services Tax (“GST”) and Value Added that are designated and qualify as cash flow hedges are Tax (“VAT”) deferred in equity. The gain or loss relating to the ineffective portion is recognised immediately in profit or loss. Amounts The Company and wholly owned New Zealand subsidiaries deferred in equity are recognised in profit or loss in the (other than the NZ Bus Group of Companies which were periods when the hedged item is recognised in profit or loss. previously registered) became registered for GST during However, when the forecast transaction that is hedged results the 2007 financial year. The financial statements have been in the recognition of a non-financial asset or a non-financial prepared on a GST exclusive basis when registration existed liability, the gains and losses previously deferred in equity are or inclusive basis when not registered. Other subsidiaries are transferred from equity and included in the initial measurement registered for GST or VAT and their financial statements have of the cost of the asset or liability. been prepared on a GST or VAT exclusive basis. Hedge accounting is discontinued when the Group revokes (O) Impairment of assets the hedging relationship, the hedging instrument expires or At each reporting date, the Group reviews the carrying is sold, terminated, or exercised, or no longer qualifies for amounts of its tangible and intangible assets to determine hedge accounting. Any cumulative gain or loss deferred in whether there is any indication that those assets have equity at that time remains in equity and is recognised when suffered an impairment loss. If any such indication exists, the forecast transaction is ultimately recognised in profit or the recoverable amount of the asset is estimated in order to loss. When a forecast transaction is no longer expected to determine the extent of the impairment loss (if any). Where the occur, the cumulative gain or loss that was deferred in equity is asset does not generate cash flows that are independent from recognised immediately in profit or loss. other assets, the Group estimates the recoverable amount of Net investment hedge the cash-generating unit to which the asset belongs. Goodwill, intangible assets with indefinite useful lives and intangible Foreign currency differences arising on the retranslation of a assets not yet available for use are tested for impairment financial liability designated as a hedge of a net investment annually and whenever there is an indication that the asset in foreign operation are recognised directly in equity, in the may be impaired. Recoverable amount is the higher of fair foreign currency translation reserve, to the extent that the value less costs to sell and value in use. In assessing value in hedge is effective. To the extent that the hedge is ineffective, use, the estimated future cash flows are discounted to their such differences are recognised in profit or loss. When the present value using a pre-tax discount rate that reflects current hedged net investment is disposed of, the cumulative amount market assessments of the time value of money and the risks in equity is transferred to profit or loss as an adjustment to the specific to the asset. If the recoverable amount of an asset (or profit or loss on disposal.

52 Picking the trends... Notes to the Financial Statements For the Year Ended 31 March 2008

cash-generating unit) is estimated to be less than its carrying (V) Financial guarantees amount, the carrying amount of the asset (cash generating Where the Company or a Group company enters into financial unit) is reduced to its recoverable amount. Impairment losses guarantee contracts to guarantee the indebtedness of other are recognised in profit or loss. companies within the Group, these are treated as insurance (P) Employee benefits arrangements, and accounted for as such. In this respect, the Provision is made for benefits accruing to employees in guarantee is treated as a contingent liability until such time as it respect of wages and salaries, annual leave, long service becomes probable that the Group entity will be required to make a leave, and sick leave when it is probable that settlement will payment under the guarantee. be required and they are capable of being measured reliably. (W) Emission rights Provisions made in respect of employee benefits expected to The Group receives tradeable emission rights from specific energy be settled within 12 months, are measured at their nominal production levels of certain renewable generation facilities. The values using the remuneration rate expected to apply at the future revenue arising from the sale of these emission rights may time of settlement. Provisions made in respect of employee be a key matter in deciding whether to proceed with construction benefits which are not expected to be settled within 12 months of the generation facility and is considered to be part of the value are measured as the present value of the estimated future of the generation assets recorded in the Statements of Financial cash outflows to be made by the Group in respect of services Position. Proceeds received on the sale of emission rights are provided by employees up to reporting date. recorded as deferred income in the statements of financial position (Q) Revenue recognition until the committed energy production levels pertaining to the Revenue comprises the fair value of consideration received emission rights sold has been generated. Emission rights produced or receivable for the sale of goods or services in the ordinary are recognised in the Statements of Financial Position if the right course of the Group’s activities. Interest revenues are has been verified, it is probable that expected future economic recognised as accrued, taking into account the effective yield benefits will flow to the Group, and the rights can be measured of the financial asset. Revenue from services are recognised reliably. Emission rights are initially measured at cost. After initial in the Statement of Financial Performance over the period of recognition, the emission rights are carried at fair value. Fair value is service. determined by reference to an active market. If the emission rights cannot be revalued because there is no active market, the emission (R) Borrowings rights are carried at cost less any subsequent impairment losses. Borrowings are recorded initially at fair value, net of (X) Segment reporting transaction costs. Subsequent to initial recognition, borrowings are measured at amortised cost with any difference between A business segment is a group of assets and operations engaged the initial recognised amount and the redemption value being in providing products or services that are subject to risks and recognised in profit and loss over the period of the borrowing returns that are different to those of other business segments. A using the effective interest rate. Bond issue expenses, fees geographic segment is engaged in providing products or services and other costs incurred in raising debt finance are capitalised within a particular economic environment that are subject to risks and amortised over the term of the relevant debt instrument or and returns that are different from those of segments operating in debt facility. other economic environments. (S) Cash and cash equivalents (Y) Earnings per share Comprise cash on hand, cash at banks/financial institutions Earnings per share is calculated by dividing the operating surplus and investments in money market instruments, excluding attributable to the shareholders by the weighted average number outstanding bank overdrafts. Bank overdrafts are shown within of ordinary shares on issue during the period, on a basic and fully borrowings in current liabilities in the Statement of Financial diluted basis. Position. (Z) Adoption status of relevant new financial reporting (T) Financial instruments issued by the Group standards and interpretations Debt and equity instruments are classified as either liabilities or Infratil has chosen not to early adopt the following standards which as equity in accordance with the substance of the contractual have been issued but are not yet effective. The adoption of these arrangement. standards is not expected to have a material impact on Infratil’s financial statements. (U) Provisions NZIAS 23 Borrowing costs – revisions approved July 2007 A provision is recognised in the Statement of Financial Position and effective for annual reporting period beginning on or after when the Group has a present legal or constructive obligation 1 January 2009. as a result of a past event, and it is probable that an outflow of economic benefitswill be required to settle the obligation. NZIFRS 8 Operating segments – approved December 2006 and effective for annual reporting period beginning on or after 1 January 2009.

Infratil Annual Report 53 Notes to the Financial Statements For the Year Ended 31 March 2008

(2) New Zealand International Financial the Group has adjusted amounts reported previously in accordance with Reporting Standards New Zealand Financial Reporting Standards (NZFRS). An explanation of how the transition from NZFRS has affected the Company’s and the Reconciliation of equity, total liabilities and total assets Group’s equity and Statement of Financial Performance is set out in the on initial transition to NZIFRS as at 1 April 2006 following tables and notes that accompany the tables. There has been This is the first year financial statements have been prepared in no change to the Cash Flow Statement. accordance with NZIFRS. The accounting policies set out in note 1 The major change from the provisional NZIFRS changes presented in the have been applied in preparing the financial statements for the year 2007 financial statements to the opening balance reconciliation below, ended 31 March 2008, the comparative information presented in these is a reduction in the associate’s share of NZIFRS adjustments to ($23.2 financial statements for the year ended 31 March 2007 and in the million) from the previously reported amount of ($47.2 million). There are preparation of the opening NZIFRS balance sheet at 1 April 2006 (the no changes to the Infratil Parent on transition to NZIFRS or to the March Group’s date of transition). In preparing its opening NZIFRS balance 2007 financial statements previously reported. sheet and comparative information for the year ended 31 March 2007,

Group Group Group Assets Liabilities Equity $Millions $Millions $Millions Total reported under previous NZGAAP 1,704.9 911.5 793.4 Deferred taxation A - 107.2 - Investments D 54.2 - - Investment property C 5.1 - - Property, plant and equipment B (2.9) - - Intangible assets 1.4 - - Financial instruments E 0.2 - - Other liabilities - 8.4 - Share of associate’s NZIFRS adjustments (23.2) - - Total NZIFRS adjustments 34.8 115.6 (80.8) Restated total under the transition to NZIFRS as at 1 April 2006 1,739.7 1,027.1 712.6

54 Picking the trends... Notes to the Financial Statements For the Year Ended 31 March 2008

Impact on Group Equity, Total Liabilities, Total Assets and Earnings on transition to NZIFRS at 31 March 2007

Net surplus Assets Liabilities Equity EBITDAF after tax $Millions $Millions $Millions $Millions $Millions Total reported under previous NZGAAP 3,729.7 2,043.3 1,686.4 145.2 46.7 Deferred taxation A 10.3 295.8 - - - Receivables 4.3 - - (7.8) (7.8) Prepayments (3.3) (1.8) - 6.4 6.4 Investments D 58.7 - - - - Investment property C 1.1 - - - 5.6 Property, plant and equipment B (0.3) - - 0.4 0.4 Goodwill F 28.3 - - - 6.8 Intangible assets 12.2 1.2 - 6.0 2.7 Financial instruments E 42.6 11.6 - - 22.8 Accounts payable & accruals - 9.6 - - - Other liabilities 0.6 - - 3.8 2.4 Share of associate’s NZIFRS adjustments - - - 1.9 1.9 Taxation 3.4 1.5 - - (6.5) Total NZIFRS adjustments 157.9 317.9 (160.0) 10.7 34.7 Reclassification of expense to financing costs (non IFRS change) - - - 1.2 - Restated total under the transition to NZIFRS as at 31 March 2007 3,887.6 2,361.2 1,526.4 157.1 81.4

Taxation [A] recorded changes in the valuation of investment properties in equity Under NZIFRS the deferred tax liability is calculated using a as an investment property revaluation reserve. Under NZIFRS both “balance sheet” approach, which recognises deferred tax assets upward and downward revaluations of investment properties are and liabilities by reference to differences between the accounting recognised directly in the Statement of Financial Performance. and tax values of balance sheet items. The previous approach Investments [D] recognised differences between the accounting surplus and taxable income. Investments were previously valued at cost. Under NZIFRS investments are held either as “available for sale” or “for resale”. Property plant and equipment [B] The Group holds all investments under the category “available for The Group previously revalued land and buildings, runways, sale” which will be measured at fair value with fair value changes taxiways, aprons and infrastructure assets at a minimum of through reserves unless there is an impairment. once every five years. Revaluation increases and decreases Financial instruments [E] were previously recognised on a class by class basis. Under NZIFRS the off-setting of revaluation increases and decreases on The Group uses derivatives to manage its interest rate, foreign individual assets within a class of property, plant and equipment is exchange, operating and investment risks and were previously not permitted. recognised on a paid or received basis. Under NZIFRS all derivative financial instruments are recognised at fair value in Investment properties [C] the Statement of Financial Position. Changes in the fair value of Investment properties were previously valued annually at market the derivatives will be recognised in the Statement of Financial value less the estimated costs of disposal. Under NZIFRS Performance unless strict hedge criteria are met. If the criteria are investment properties are measured at fair value. The difference met for cash flow hedge accounting, the effective portion of the between fair value and market value is that disposal costs are not unrealised gain or loss on the hedging derivative is deferred within deducted to arrive at fair value. The result is an increase in the equity and released to the Statement of Financial Performance at value recorded for investment properties. The Group previously the same time as the transaction it is hedging is recognised in the Statement of Financial Performance.

Infratil Annual Report 55 Notes to the Financial Statements For the Year Ended 31 March 2008

Goodwill [F] Estimates exemption – estimates under NZIFRS at 1 April 2006 Goodwill was amortised under previous NZ GAAP. Under NZIFRS are consistent with estimates made for the same date under goodwill is not amortised but tested for impairment at least annually. previous GAAP. In preparing these financial statements in accordance with NZIFRS 1 the Group has applied the applicable mandatory exceptions and (3) Nature of business certain of the optional exemptions from full retrospective application of NZIFRS 1. The Group owns infrastructure investments in Europe, the United Optional exemptions applied: Kingdom, Australia and New Zealand, and owns and operates predominantly infrastructure and utility businesses. The Company Business combinations that took place prior to the 1 April 2006 is a limited liability company incorporated and domiciled in transition date have not been restated. New Zealand. The address of its registered office is 97 The Terrace, Deemed historical cost exemption – Net book value (represents fair Wellington, New Zealand. value) at 1 April 2006 has been taken to be deemed historical cost for certain generation and aeronautical assets. Hedge accounting exemption – The Group has applied hedge (4) Discontinued Operations accounting from 1 April 2006 only if the hedge relationship meets all the hedge accounting criteria under NZ IAS 39. There were no discontinued operations in either the current or the comparative year.

(5) Revenue Consolidated Parent

2008 2007 2008 2007 $Millions $Millions $Millions $Millions Trading /operating revenue 1,339.3 654.1 4.5 - Revenue from lease surrender 6.6 - - - Dividends 9.1 3.8 41.7 40.0 Grant income 0.8 1.0 - - Inter-company charges - - 85.2 62.5 Equity accounted earnings of associates - dividends - 13.3 - - - surplus after dividends - 17.7 - - Revenue 1,355.8 689.9 131.4 102.5 Investment realisations and revaluations 1.5 48.3 - - Impairment of assets and investments (16.9) (4.6) - (0.9) 1,340.4 733.6 131.4 101.6

56 Picking the trends... Notes to the Financial Statements For the Year Ended 31 March 2008

(6) other operating expenses

Consolidated Parent

2008 2007 2008 2007 $Millions $Millions $Millions $Millions Fees paid to group auditors – audit fees 0.7 0.5 0.2 0.2 – other assurance services 0.1 0.2 - - – taxation and other services 1.1 0.8 0.5 0.5 Audit fees paid to other auditors 0.2 0.1 - - Other assurance services paid to other auditors - 0.1 - - Bad debts written off 4.0 1.6 - - Increase in provision for doubtful debts 0.4 0.3 - - Directors’ fees 2.2 1.5 0.5 0.5 Administration and other 19.4 89.1 4.8 2.4 Management fee (to related party “MCIM”) 22.0 17.3 17.2 12.4 Incentive fee (to related party “MCIM”) - 14.3 - 14.3 Trading operations 797.3 253.0 - - Other operating expenses 847.4 378.8 23.2 30.3

Other assurance services include services for the audit or review of financial information other than financial reports. (7) government grants

Capital based government grants are included within creditors in the balance sheet and credited to operating profit over the useful economic lives of the assets to which they relate to. Other grants are credited to the profit and loss account when received. Government grants of $13.7 million (2007: $14.3 million) are included in accruals and other liabilities within current liabilities in the Statement of Financial Position. Grants of $7.9 million (2007: $7.7 million) will be clawed back if Lübeck Airport sells the assets related to the grants before the end of their normal working life or the company ceases to operate as an airport. (8) Finance income and expense Consolidated Parent

2008 2007 2008 2007 $Millions $Millions $Millions $Millions Interest income on cash and deposits 13.5 6.0 0.2 0.9 Finance income 13.5 6.0 0.2 0.9 Interest expense 162.3 82.5 65.2 47.5 Finance expense 162.3 82.5 65.2 47.5 Net finance cost 148.8 76.5 65.0 46.6

Infratil Annual Report 57 Notes to the Financial Statements For the Year Ended 31 March 2008

(9) iNterest-bearing loans and borrowings Financing arrangements The Group’s debt includes bank facilities with negative pledge This note provides information about the contractual terms of the arrangements, which with limited exceptions do not permit the Group’s interest-bearing loans and borrowings. borrower to grant any security over its assets. The bank facilities For more information about the Group’s exposure to interest rate require the borrower to maintain certain levels of shareholder funds and foreign currency risk, see note 22. and operate within defined performance and debt gearing ratios. Consolidated The banking arrangements may also create restrictions over the 2008 2007 sale or disposal of certain assets unless the bank loans are repaid $Millions $Millions or renegotiated. Current liabilities At year end the Group had unsecured bank debt facilities of $1,374.8 million (2007: $973.8 million), redeemable preference Unsecured bank loans 44.0 60.3 shares (RPS) of $140 million (2007: $140 million) and secured bank Redeemable preference shares - secured 140.0 - debt facilities of $nil million (2007: $6.0 million). The secured and unsecured debt facilities are able to be drawn-down as required 184.0 60.3 subject to the borrower being in compliance with undertakings Non-current liabilities in respect of those facilities. Interest rates are determined by reference to prevailing money market rates at the time of draw- Unsecured bank loans 862.9 470.3 down plus a margin. Interest rates paid during the year ranged from Secured bank facilities - 6.0 8.27% to 9.7% (31 March 2007: 6.52% to 8.27%). The Group has issued redeemable preference shares (RPS) Redeemable preference shares - secured - 140.0 which have a fixed interest rate of 6.84%, and which mature in 862.9 616.3 August 2008. The RPS is secured by a specific charge over 48.5 million TrustPower shares held by a subsidiary company and a Facilities utilised at reporting date general security charge over the other assets of that subsidiary Unsecured bank loans 906.9 530.6 company. Guarantees 16.2 - At 31 March 2008 there was an unsecured facility in place with an Australian bank of A$20 million. At balance date A$14.5 million Secured bank loans - 6.0 of this unsecured facility had been utilised by the bank issuing Redeemable preference shares - security 140.0 140.0 guarantees to third parties. A subsidiary company has entered into a fully defeased cross Facilities not utilised at reporting date border lease in relation to generation assets with a book value of Unsecured bank loans 451.7 443.2 $65.5 million. The lease liability is not recognised in these financial statements as all obligations have been prepaid to the respective lessors. This lease creates restrictions on the disposal of the asset unless the subsidiary company holding the assets is part of the disposal. The lease expires in January 2018 and is subject to a potential termination payment, up to a maximum value of $5.4 million, in the event that the subsidiary wishes to terminate the lease. Subsequent to balance date TrustPower has negotiated a further $100 million of bank facilties expiring in two to five years.

58 Picking the trends... Notes to the Financial Statements For the Year Ended 31 March 2008

(10) Inventories Consolidated

2008 2007 $Millions $Millions Raw materials and consumables 5.1 4.9 Finished goods/ trading products 4.8 - Total 9.9 4.9

(11) Cash and cash equivalents Consolidated Parent

2008 2007 2008 2007 $Millions $Millions $Millions $Millions Call deposits 225.9 128.5 5.8 2.6 Cash deposits held as security for retail energy market contracts and RPS 29.3 - - - Total 255.2 128.5 5.8 2.6

Cash of $122.6 million (2007 $56.8 million) held by TrustPower, Wellington International Airport and Perth Energy is not directly available for use as these companies are not wholly owned subsidiaries of Infratil Limited.

Infratil Annual Report 59 Notes to the Financial Statements For the Year Ended 31 March 2008

(12) Capital and reserves

Consolidated Parent

2008 2007 2008 2007 $Millions $Millions $Millions $Millions Comprises: Capital Balance at the beginning of the year 162.4 150.1 155.2 150.1 Warrants exercised 7.0 1.0 7.0 1.0 Rights issue proceeds from partly paid shares 88.0 - 88.0 - Less share buyback - (8.2) - (8.2) Net proceeds on sale of Infratil shares sold by subsidiary - 7.2 - - Treasury shares reissued - 12.3 - 12.3 Balance at the end of the year 257.4 162.4 250.2 155.2 Revaluation reserves Balance at the beginning of the year 241.9 61.4 - - Revaluation during the year 9.8 180.5 - - Balance at the end of the year 251.7 241.9 - - Retained earnings reserve Balance at the beginning of the year 359.6 318.8 104.4 107.1 Net surplus after taxation (1.7) 68.2 43.2 24.7 357.9 387.0 147.6 131.8 Less dividends paid (28.6) (27.4) (28.6) (27.4) Balance at the end of the year 329.3 359.6 119.0 104.4 Foreign currency translation reserve Balance at the beginning of the year (9.8) 5.0 - - Difference arising on translation of foreign operations (10.9) (14.8) - - Hedging of net investment in foreign operations - - - - Balance at the end of the year (20.7) (9.8) - - Fair value reserve Balance at the beginning of the year 50.2 50.5 - - Net gain on available for sale financial assets transferred to profit and loss 4.7 (19.6) Net change in fair value of available for sale financial assets recognised in equity (149.0) 19.3 - - Balance at the end of the year (94.1) 50.2 - - Hedge/Other reserve Balance at the beginning of the year 5.1 16.9 - - Fair value gains/ (losses) 4.6 (12.0) - - Transferred to energy cost expense - (5.8) - - Transfers to property, plant and equipment - 6.0 - - Balance at the end of the year 9.7 5.1 - - Minority interest Balance at the beginning of the year 717.0 109.9 - - Net surplus after taxation 54.4 13.2 - - Minority interest distributions (50.9) (25.9) - - Currency translation reserve movements (0.1) (0.1) - - Increase in revaluation reserve 8.0 (0.8) - - Increase/(decrease) in cash flow hedge 8.9 0.1 - - Outside equity interest arising on establishment of subsidiary (0.2) 620.6 - - Balance at the end of the year 737.1 717.0 - - Equity at the end of the year Parent company interest 733.3 809.4 369.2 259.6 Minority interest in subsidiary companies 737.1 717.0 - - 1,470.4 1,526.4 369.2 259.6

60 Picking the trends... Notes to the Financial Statements For the Year Ended 31 March 2008

Revaluation reserve – relates to the revaluation of property, plant and equipment. Fair value reserve – the cumulative net change in the fair value of available-for-sale financial assets until the investments are derecognised or impaired. Foreign currency translation reserve – comprises all foreign currency differences arising from the translation of the financial statements of foreign operations as well as from the translation of derivatives that hedge the Company’s net investment in a foreign subsidiary. Hedge/Other reserve – comprises the effective portion of the cumulative net change in fair value of cash flow hedging instruments relating to hedged transactions that have not yet occurred.

(13) Other liabilities – Provisions Consolidated Parent

2008 2007 2008 2007 $Millions $Millions $Millions $Millions Balance at the beginning of the year 7.1 7.1 - - Provisions used during the year (2.1) - - - Balance at year end 5.0 7.1 - -

Rebranding As a result of the contractual agreement when Infratil purchased NZ Bus from Stagecoach UK Plc, a rebranding provision was made for the consulting, rebranding and repainting of the bus fleet.

(14) Infratil shares and warrants Consolidated and Parent

2008 2007 Millions Millions Ordinary shares Movements in issued and fully paid ordinary shares Balance at the beginning of the year 219,670,670 ordinary shares (March 2007: 218,938,557) 219.7 218.9 Warrants exercised 3,837,448 (March 2007: 302,002) 3.8 0.3 Share buyback nil (March 2007: 2,050,000) - (2.0) Partly-paid instalment shares issued 3 October 2007 88,008,061 88.0 Share split 219,899,090 ordinary shares (March 2007: nil) 219.9 - Re-issue of Treasury stock ordinary shares nil (March 2007: 2,480,111) - 2.5 Total issued capital at the end of the year 443,408,484 ordinary shares and 88,008,061 partly-paid instalment shares (March 2007: ordinary shares: 219,670,670) 531.4 219.7

All ordinary shares have equal voting rights and share equally in Each Infratil warrant held entitles the holder to acquire a further dividends and equity other than partly-paid instalment shares. All share in the Company at an initial issue price of $1.62 (IFTWBs) authorised shares are issued and have a nil par value. On 3 October and $4.15 (IFTWCs) on, or before, 10 July 2009 (IFTWBs) and on, 2007 the Company completed a 1 for 5 renounceable rights issue or before, 29 June 2012 (IFTWCs). to ordinary shareholders. This resulted in the issue and allotment On 12 June 2007 the Company completed a 1 for 1 share split of 88,008,061 new partly paid shares to holders of ordinary shares which resulted in the issue of 219,899,090 new shares to existing payable in two instalments of $1.00 per instalment share. The shareholders and a 1 for 10 warrant issue which resulted in the first installment was payable by 3 October 2007 with the second issue of 52,925,599 new warrants (IFTWCs). instalment to convert these to fully paid shares is payable by 8 August 2008. These partly paid shares have 50% voting and distribution rights of an ordinary share until the second instalment is paid. There were 85,936,587 (2007: 44,951,852) and 52,826,848 (2007: nil) Infratil warrants on issue, referred to as IFTWBs and IFTWCs respectively.

Infratil Annual Report 61 Notes to the Financial Statements For the Year Ended 31 March 2008

(15) Taxation Consolidated Parent

2008 2007 2008 2007 $Millions $Millions $Millions $Millions Surplus before taxation 75.3 98.8 43.2 24.7 Taxation on the surplus for the year @ 33% tax rate 24.9 32.6 14.3 8.2 Plus/(less) taxation adjustments: Effect of tax rates in foreign jurisdictions 1.0 - - - Net benefit of imputation credits (1.4) (11.8) - - Exempt dividends - - (13.8) (13.2) Tax losses not recognised/(utilised) 11.6 19.4 (0.8) 4.7 Equity accounted earnings of associate net of dividends received - (5.3) - - Tax effect of change in corporate tax rate on deferred tax liability (13.9) - - - Timing differences not recognised 0.7 (1.0) 0.2 - Under/(over) provision in prior years (6.2) (0.2) - - Other permanent differences 5.9 (16.3) 0.1 0.3 Taxation expense 22.6 17.4 - - Current taxation 33.2 10.3 - - Deferred taxation (10.6) 7.1 - - 22.6 17.4 - -

Due to a change in tax legislation the New Zealand corporate tax rate has been reduced to 30% from 33% effective from 1 April 2008. Deferred Tax Deferred tax assets and liabilities are offset on the face of the Statement of Financial Position where they relate to entities within a Consolidated Income Tax Group. Balance at the beginning of the year (359.6) (119.9) - - Acquired on acquisition of subsidiary - (152.9) - - Prior period adjustment 2.8 - Charge for the year 7.8 (7.1) - - Deferred tax charge recognised in equity 10.5 (66.4) Effect of change in deferred tax rate 13.9 - - - Revaluation adjustment - (13.3) Balance at the end of the year (324.6) (359.6) - -

Deferred tax relating to tax losses carried forward not recognised amount to $17.3 million (2007: $8.8 million).

62 Picking the trends... Notes to the Financial Statements For the Year Ended 31 March 2008

Recognised deferred tax assets and liabilities (consolidated) Assets Liabilities Net

2008 2007 2008 2007 2008 2007 $Millions $Millions $Millions $Millions $Millions $Millions Property, plant and equipment - 1.0 (308.6) (334.2) (308.6) (333.2) Investment property - - (2.0) (2.7) (2.0) (2.7) Financial assets at fair value through profit or loss 6.2 - (19.3) (9.8) (13.1) (9.8) Employee benefits 1.7 - 1.1 - 2.8 - Available-for-sale financial assets - - (1.0) (9.0) (1.0) (9.0) Customer base assets - - (10.8) (13.1) (10.8) (13.1) Provisions 2.8 3.2 1.2 - 4.0 3.2 Other items 6.6 4.4 (2.5) 0.6 4.1 5.0 Net tax assets/(liabilities) 17.3 8.6 (341.9) (368.2) (324.6) (359.6)

Current year changes in temporary differences (consolidated) Tax expense Reserves

2008 2007 2008 2007 $Millions $Millions $Millions $Millions Other property, plant and equipment movements 2.0 (3.2) 18.5 (64.1) Intangible asset (1.1) - - - Investment property 0.6 - - (2.7) Financial instruments (3.3) (6.8) (4.4) (0.4) Available-for-sale financial assets (0.1) - 8.2 (5.4) Derivatives 4.8 - - (4.7) Customer base assets 2.3 2.9 0.6 (3.3) Provisions (1.1) 2.3 - (0.1) Other 6.5 (2.3) 1.5 1.0 10.6 (7.1) 24.4 (79.7)

Imputation credit account Parent

2008 2007 $Millions $Millions Balance at the beginning of the year 7.9 7.2 Imputation credits attached to dividends received during the year 21.3 12.7 Less imputation credits attached to dividends paid during the year (12.4) (12.0) Balance at the end of the year 16.8 7.9 At balance date the imputation credits available to the shareholders of the parent company were: Through direct shareholding in the parent company 16.8 7.9 Through indirect interests in subsidiaries 3.8 9.1 Balance at the end of the year 20.6 17.0

Infratil Annual Report 63 Notes to the Financial Statements For the Year Ended 31 March 2008

(16) Intangible assets

Consolidated

Other Intangible Goodwill Assets Total 2008 2007 $Millions $Millions $Millions $Millions $Millions Carrying amounts At 1 April 2007 181.5 58.1 239.6 At 31 March 2008 246.0 63.8 309.8 At 1 April 2006 66.2 13.0 79.2 At 31 March 2007 181.5 58.1 239.6 Goodwill Balance at beginning of the year 182.3 66.2 Arising on acquisition of subsidiaries 4.4 108.9 Disposal of part of minority interest - (0.4) Arising on acquisition of minority interest in subsidiaries 60.1 - Finalisation of reassessment of fair values of subsidiaries - 5.0 Transfer from intangible assets - 2.6 Balance at the end of the year 246.8 182.3 Amortisation and impairment losses Balance at begining of the year (0.8) - Impairment loss - (0.8) Balance at the end of the year (0.8) (0.8) Total goodwill 246.0 181.5 Other intangible assets – lease agreements Balance at beginning of the year 57.0 13.0 Arising on acquisition of subsidiary companies 0.4 39.4 Additions at cost 11.0 7.2 Transfer to goodwill - (2.6) Balance at the end of the year 68.4 57.0 Other intangible assets – customer acquisition costs Balance at beginning of the year 5.6 - Additions 8.5 5.6 Balance at the end of the year 14.1 5.6 Amortisation and impairment losses Balance at begining of the year - - Additions (4.5) - Amortisation for the year (12.4) (4.5) Impairment loss (1.8) - Balance at the end of the year (18.7) (4.5) Total other intangible assets 63.8 58.1 Total intangible assets 309.8 239.6

64 Picking the trends... Notes to the Financial Statements For the Year Ended 31 March 2008

During the 2007 year, the fair value of i-site at acquisition date was finalised which resulted in a decrease in value of $2.6 million for intangibles and a corresponding increase of $2.6 million in goodwill. This adjustment has not increased the carrying amount of goodwill above its recoverable amount. Impairment of goodwill is considered annually. Amortisation and impairment charge The impairment charge recognised in the “Net investment realisations and (impairments)” line item in the Statement of Financial Performance is $1.8 million (2007 $0.8 million). The impairment charge of $1.8 million reflects the impairment of the NZ Bus ticketing project. The aggregate carrying amounts of goodwill allocated to each cash generating unit are as follows: The following units have significant carrying amounts of goodwill.

Consolidated

2008 2007 $Millions $Millions NZ Bus 63.0 63.0 TrustPower 108.9 108.9 Victoria Electricity 60.1 - Units with insignificant goodwill 14.0 9.6 246.0 181.5

There have been no impairments to the carrying amounts of goodwill within the Group in the current year. Recoverable amount is determined based on the following analysis and key assumptions: NZ Bus assessment of recoverable amount of goodwill is based on value in use calculations. Those calculations use cash flow projections taking into account actual operating results, current business plans, budgets and forecasts for each cash generating unit and include passenger, fare, subsidy, operating costs and capital expenditure assumptions. The projected cash flows were for five years. Cash flows for a further period are extrapolated using a growth rate appropriate to each business and location. A pre-tax discount rate of 12.84% has been used in discounting the projected cash flows. TrustPower goodwill relates to the acquisition of a further 15.3% interest in TrustPower in the 2007 financial year. The recoverable amount has been assessed by reference to the fair value of TrustPower as quoted on the NZX. Victoria Electricity (VEL) assessment of the recoverable amount of goodwill has been determined by reference to fair value less cost to sell based on capitalised maintainable earnings valuation and cost per customer methodolgies. These valuations take into account the maintainable EBITDA of VEL and the application of an appropriate EBITDA multiple, and observable transaction evidence for the sale of retail energy businesses in the Australian market.

Infratil Annual Report 65 Notes to the Financial Statements For the Year Ended 31 March 2008

(17) Acquisition of subsidiaries

Consolidated

2008 2007 $Millions $Millions Pre- Pre-acquisi- Recognised acquisition Recognised tion carrying Fair value values on carrying Fair value values on amounts adjustments acquisitions amounts adjustments acquisition Net assets acquired Tangible fixed assets - - - 1,345.4 417.2 1,762.6 Intangible customer bases - - - 39.4 - 39.4 Other current assets - - - 105.0 - 105.0 Current liabilities - - - (170.9) - (170.9) Other non current liabilities - - - (309.4) - (309.4) Deferred taxation - - - (152.9) - (152.9) - - - 856.6 417.2 1,273.8 Minority interest - - - - - 514.6 Share of net assets acquired 759.2 Acquisition costs - (0.1) Cash consideration paid - (479.9) Value of existing equity interest - (437.8) Arising on disposal of part subsidiary - 56.9 Deferred consideration - (7.2) Goodwill on acquisition - (108.9)

Prior year acquisitions Business Combinations In December 2006 the Group acquired a controlling interest in On the 14 January 2008 the Group purchased the assets and TrustPower and it became a subsidiary company. As at 31 March liabilities of Adams Travelines, a transportation operator, for a cash 2008 the Group held a 50.5% (2007: 50.5%) interest in TrustPower, consideration of $2.4 million. a limited liability company, incorporated in New Zealand. The There were no material operating results for this acquisition contribution to the consolidated net surplus for the period 1 January affecting the Statement of Financial Performance for the current year. to 31 March 2007 was $14.3 million. The assets and liabilities of the entity at the purchase date were In January 2007, Infratil Energy Australia acquired a 51% interest as follows: in Perth Energy, a small retail energy company supplying electricity to commercial customers in Western Australia. There was no 2008 2007 contribution to the consolidated net surplus for the period $Millions $Millions 23 January 2007 to 31 March 2007. Assets and liabilities acquired Fixed assets 2.1 - Net assets acquired 2.1 -

Goodwill of $0.3 million was recognised on acquisition.

66 Picking the trends... Notes to the Financial Statements For the Year Ended 31 March 2008

On the 3rd of October 2007 the Group purchased the remaining On 30 March 2007 the Group purchased the assets and liabilities 4% it did not own of Fullers Group for a purchase price of of a telecommunication service provider and call centre operator, $1.0 million. for a cash consideration of $3.7 million. There were no material The assets and liabilities of the entity at the purchase date were operating results for this acquisition affecting the statement of as follows: financial performance for that year. The assets and liabilities of the acquisition at the purchase date were as follows: 2008 2007 $Millions $Millions 2008 2007 $Millions $Millions Assets and liabilities acquired Assets and liabilities acquired Tangible fixed assets 20.7 - Accounts receivable and prepayments - 1.1 Investments 0.3 - Fixed assets - 0.2 Current assets 14.0 - Intangible customer base assets - 3.7 Current liabilities (8.2) - Accounts payable and accruals - (0.1) Deferred taxation liability (1.4) - Deferred tax liability - (1.2) Net Assets 25.4 - Net assets acquired - 3.7 Share of net assets acquired 1.0 - There was no goodwill purchased with this transaction. In April 2007 the Group purchased the remaining 1.47% of VEL it did not own for a purchase price of $60.1 million and resulting in goodwill of $60.1 million. The purchase price included shares and options owned by minority interests in VEL representing 1.47% of the issued shares of VEL, or 42% on a fully diluted basis. The purchase agreement includes additional growth targets to be met by December 2008, in which case the purchase price could increase by a further amount of A$6 million. This further amount is currently treated as a contingent liability. The assets and liabilities of the acquisition at the purchase date were as follows:

2008 2007 $Millions $Millions Assets and liabilities acquired Tangible fixed assets 1.7 - Other intangible 5.6 - Fair value financial derviatives 38.0 - Current assets 32.1 - Current liabilities (18.4) - Deferred taxation (13.1) - Net assets 45.9 -

Infratil Annual Report 67 Notes to the Financial Statements For the Year Ended 31 March 2008

(18) Investments (19) Investment in associates

Investments are stated at fair value or cost if fair value cannot be Investments in associates are detailed in note 26. measured reliably. TrustPower As at 30 September 2006 the Group held a 35.18% interest 2008 2007 in TrustPower, a limited liability company, incorporated in $Millions $Millions New Zealand. Investment in associates 0.5 4.0 TrustPower is listed on the New Zealand Stock Exchange and Investments in other companies (classified operates predominantly within the electricity generation and retail 211.8 258.5 as available-for-sale) trading industry. On 29 December 2006 the Group acquired a controlling interest 212.3 262.5 in TrustPower and it became a subsidiary company as at that date. Infratil has impaired the investment in Austral Pacific ($7.1 million) The investment in the associate comprised: and Energy One ($4.3 million) to their fair value through the profit 2008 2007 and loss account due to specific loss events in respect of these $Millions $Millions investments, and the significant or prolonged decline in fair value Share of associate’s surplus before from cost. - 42.7 For its investments in Auckland International Airport (AIA) and income tax Energy Developments (EDL), Infratil does not consider there is Share of associate’s income tax (expense) - (11.8) impairment and has retained the movements in value in reserves as required by NZIAS39. Share of associate’s operating surplus - 30.9 For AIA, Infratil does not consider the decline in fair value of Dividends from associate - (27.7) $34.7 million from cost to be due to any known loss events, or Equity accounted surplus of associate for that the fall in value is significant or prolonged at 31 March 2008. - 3.2 the period In particular Infratil has taken into account the change in Overseas Investment Office approval rules by the New Zealand Government, Energy Developments (EDL) the proximity of this change to year end, and the non-approval by the New Zealand Government of the Canadian Pension Plan Infratil has a 28.4% (March 2007: 25.6%) investment in EDL which Investment Board (CPPIB) offer to acquire a 40% interest in AIA. is not equity accounted. This investment is not equity accounted as For EDL, Infratil does not consider the decline in fair value from Infratil does not believe it has significant influence over the financial cost of $59.7 million to be due to any known loss events, or that and operating policy decisions of EDL. Importantly, in forming the fall in value is significant or prolonged at 31 March 2008. In this view Infratil has considered: it has only one appointee on a particular Infratil has taken into account the operating issues of board of six directors (who is not the Chairman of EDL); it does EDL’s significant generation project expansion at West Kimberley, not participate in the policy-making processes of the Company; and the proximity of this event to year end, which resulted in a fall there are no material transactions between Infratil and EDL; and no in its quoted market price, and is of the view that these operating interchange of personnel occurs between Infratil and EDL. issues are in the process of resolution.

68 Picking the trends... Notes to the Financial Statements For the Year Ended 31 March 2008

(20) Property, plant and equipment

Consolidated

Vehicles, Capital Land and plant and work in civil works Buildings equipment progress Metering Generation Total $Millions $Millions $Millions $Millions $Millions $Millions $Millions 31 March 2008 Cost or valuation Balance at beginning of year 523.3 349.1 242.7 245.0 57.1 1,640.9 3,058.1 FX movement on opening balance (13.9) (10.3) (0.5) (0.4) (0.1) - (25.2) Additions 78.1 24.1 35.1 20.5 3.8 207.7 369.3 Disposals (57.1) (8.2) (2.2) (2.1) - (1.2) (70.8) Moved to investment properties (4.3) - - (1.2) - - (5.5) Transfers between categories - - 0.9 - - (0.9) - Effect of movements in exchange rates 3.9 2.9 0.6 1.7 - - 9.1 Balance at end of year 530.0 357.6 276.6 263.5 60.8 1,846.5 3,335.0 Accumulated depreciation and impairment losses Balance at beginning of year 3.1 8.4 35.6 - 28.2 - 75.3 FX movement on opening balance (0.1) - 0.1 - - - - Depreciation for the year 8.5 11.4 21.4 - 2.4 23.0 66.7 Impairment loss ------Disposals - - (1.6) - - - (1.6) Effect of movements in exchange rates 0.2 0.1 0.1 - - - 0.4 Balance at end of year 11.7 19.9 55.6 - 30.6 23.0 140.8 31 March 2007 Cost or valuation Balance at beginning of year 433.5 382.3 216.4 15.8 - - 1,048.0 Acquisition of subsidiary 1.1 9.7 12.8 - 53.9 1,641.0 1,718.5 Additions 36.7 17.1 36.4 234.0 3.2 (0.1) 327.3 Disposals (0.7) - (1.7) (4.7) - - (7.1) Transfer between categories 46.4 (47.8) 1.4 - - - - Revaluation adjustment 15.4 (12.2) (22.6) (0.1) - - (19.5) Moved to investment properties (9.1) - - - - - (9.1) Balance at end of year 523.3 349.1 242.7 245.0 57.1 1,640.9 3,058.1 Accumulated depreciation and impairment losses Balance at beginning of year 11.5 22.8 29.6 - - - 63.9 Acquisition of subsidiary - 2.5 8.7 - 25.3 - 36.5 Depreciation for the year 6.1 12.2 20.5 - 2.9 - 41.7 Disposals - - (1.0) - - - (1.0) Transfer between categories 9.7 (10.1) 0.4 - - - - Revaluation adjustment (23.9) (18.9) (22.5) - - - (65.3) Effect of movements in exchange rates (0.3) (0.1) (0.1) - - - (0.5) Balance at end of year 3.1 8.4 35.6 - 28.2 - 75.3 Carrying amounts At 1 April 2007 520.2 340.7 207.1 245.0 28.9 1,640.9 2,982.8 At 31 March 2008 518.3 337.7 221.0 263.5 30.2 1,823.5 3,194.2 At 1 April 2006 422.0 359.5 186.8 15.8 - - 984.1 At 31 March 2007 520.2 340.7 207.1 245.0 28.9 1,640.9 2,982.8

Infratil Annual Report 69 Notes to the Financial Statements For the Year Ended 31 March 2008

Wellington International Airport All land, buildings and civil works were revalued at 31 March 2007 in accordance with the New Zealand Institute of Valuer’s asset valuation standards. The valuation was undertaken by independent registered valuers, Telfer Young for land and buildings, and Opus International Consultants for civil works. Infratil Airports Europe Land, buildings and civil works at Infratil Airports Europe were valued at fair value at 31 March 2007 based on an external valuation performed by Drivers Jonas, England. This valuation was performed by a fellow of the Royal Institution of Chartered Surveyors (“RICS”) in accordance with the recommendations of the RICS as defined within the RICS appraisal and valuation manual.

For each revalued class the carrying amount that would have been recognised had the assets been carried on a historical cost basis are as follows; Consolidated

Land and Vehicles, plant civil works Buildings and equipment Total $Millions $Millions $Millions $Millions Revalued Assets at Deemed Cost Cost 300.8 316.9 42.0 659.7 Less accumulated depreciation (42.2) (46.8) (23.6) (112.6) Net book value 31 March 2008 258.6 270.1 18.4 547.1 Revalued Assets at Deemed Cost Cost 294.1 325.4 45.8 665.3 Less accumulated depreciation (42.1) (44.0) (25.8) (111.9) Net book value 31 March 2007 252.0 281.4 20.0 553.4

(21) Investment properties Consolidated Parent

2008 2007 2008 2007 $Millions $Millions $Millions $Millions Balance at 1 April 62.3 43.9 - - Effect of foreign exchange movement (0.9) - - - Acquisitions 3.5 2.9 - - Transfer from property, plant and equipment 5.5 9.1 - - Impairment (3.5) - - - Change in fair value 0.6 6.4 - - Balance at 31 March 67.5 62.3 - -

Infratil Airports Europe investment properties were valued at 31 March 2008 by Drivers Jonas, an independent registered valuer in the United Kingdom. Fair value of the investment properties valued was $4.7 million (2007: $10.6 million). The investment property was impaired by $3.5 million after the surrender of the long-term lease held by Ministry of Defence. The investment property has been revalued by Drivers Jonas post the lease surrender at $5.0 million. Infratil Airports Europe received a $6.6 million lease surrender payment in regards to the property, this has been booked as revenue. Wellington International Airport investment properties were valued at 31 March 2008 by Telfer Young for land and buildings. Fair value of the investment properties valued was $63.3 million (2007: $52.7 million). During the year leasehold land was transferred to investment properties totalling $4.3 million. Amounts recognised in statement of financial performance for: Consolidated Parent

2008 2007 2008 2007 $Millions $Millions $Millions $Millions Rental income from investment properties 4.0 3.5 - - Direct operating expenses arising from investment properties that generate income (0.6) (0.5) - - 3.4 3.0 - -

70 Picking the trends... Notes to the Financial Statements For the Year Ended 31 March 2008

(22) Financial instruments Liquidity risk is monitored by continuously forecasting cash flows and matching the maturity profiles of financial assets and liabilities. The Group has exposure to the following risks from its use of The Group’s approach to managing liquidity is to ensure, as far financial instruments: as possible, that it will always have sufficient liquidity to meet its • Credit risk liabilities when due and make value investments, under both normal • Liquidity risk and stress conditions, without incurring unacceptable losses or risking damage to the Group’s reputation. • Market risk Interest rate risk (cash flow and fair value). The Group’s income • Currency risk and operating cash flows are substantially unaffected by short term changes in market interest rates. The Group is primarily exposed The Board of Directors has overall responsibility for the to interest rate risk as a result of issuing term borrowings at fixed establishment and oversight of the Group’s risk management interest rates. Borrowings issued at fixed rates expose the Group framework. The Audit and Risk Committee also has a function of to fair value interest rate risk. On occasions New Zealand Dollar reviewing management practices in relation to identification and Interest Rate Swaps are used to convert floating rate exposure into management of significant business risk areas and regulatory fixed rate exposure. The Group manages its interest rate profile compliance. The Group has developed a comprehensive, enterprise so as to minimise net value volatility. In the main this means having wide risk management framework. Management and Board interest costs fixed for extended terms (when rates fall the value of participate in the identification, assessment and monitoring of new infrastructure assets rise and vice versa). At times when long rates and existing risks. Particular attention is given to strategic risks that appear to be unsustainably high, the profile may be shortened. The could affect the Group. Management report to the Audit & Risk Group is also exposed to cash flow interest rate risk as a result of Committee and the Board on Infratil’s risks and the controls and borrowings at floating interest rates and enters into swaps to fix a treatments for those risks. portion of this expense. The Group has elected to apply cash flow Credit risk refers to the risk that a counterparty will default hedge accounting to these instruments. on its contractual obligations, resulting in financial loss to the The hedged anticipated interest rate payments are expected Group. The Group is exposed to credit risk in the normal course of to occur on a quarterly basis at various dates until maturity of the business arising from trade receivables with its customers, financial floating rate borrowings. Gains or losses recognised in the cash derivatives and transactions (including cash balances) with financial flow hedge reserve in equity on interest rate swaps as of 31 March institutions. The Group has adopted a policy of only dealing with 2008 will be released to the Statement of Financial Performance credit-worthy counterparties, as a means of mitigating the risk of in each period in which the underlying interest payments are financial loss from defaults. The Group minimises its exposure to recognised in the Statement of Financial Performance. credit risk of trade receivables through the adoption of counterparty credit limits and standard payment terms. Derivative counterparties and cash transactions are limited to high-credit-quality financial institutions and other organisations in the relevant industry. The Group’s exposure and the credit ratings of counterparties are monitored, and the aggregate value of transactions concluded are spread amongst approved counterparties. The carrying amounts of financial assets recognised in the Statement of Financial Position best represent the Group’s maximum exposure to credit risk at the reporting date. No security is held on these amounts. The Group has varied risk exposure to many counterparties with differing characteristics. Concentration of credit risk with respect to trade receivables is limited due to the Group’s large customer base in a diverse range of industries throughout New Zealand, Australia and Europe. The Group has no significant concentration of credit risk with any one financial institution, however at balance date did have $99 million of cash deposits with Australia and New Zealand Banking Group Ltd/ANZ National Bank and $81.2 million of cash deposits with Westpac Banking Corporation. Both of these financial institutions have AA credit ratings from Standard & Poor’s. The Group manages prudent liquidity risk management by maintaining sufficient cash and marketable securities, the availability of funding through an adequate amount of committed credit facilities, and the spreading of debt maturities.

Infratil Annual Report 71 Notes to the Financial Statements For the Year Ended 31 March 2008

At balance date the face value of interest rate contracts outstanding were: Consolidated Parent

2008 2007 2008 2007 $Millions $Millions $Millions $Millions Interest rate swaps in place at year end 515.8 145.0 - - Fair value of interest rate swaps 1.6 2.5 - - The termination dates for the interest rate swaps are as follows: Between 0 to 1 year 30.0 20.0 - - Between 1 to 2 years 245.0 50.0 - - Between 2 to 5 years 240.8 75.0 - -

Sensitivity analysis Sensitivity analysis At 31 March 2008, if bank interest rates at that date had been 100 At 31 March 2008, if the New Zealand dollar had weakened/ basis points higher/lower with all other variables held constant, strengthened by 10 per cent against the currencies with which post-tax profit for the year would have been $13.3 million higher/ the Group has foreign currency risk with all other variables held lower (31 March 2007: $6.1 million), less the impact of fixed constant, post-tax profit for the year would not have been rate swaps in place. There would have been no effect on other materially different. Other components of equity would have been components of equity. $7.2 million higher/lower (31 March 2007: $19.0 million), arising from foreign exchange gains/losses on revaluation of foreign Foreign currency risk exchange contracts in a cash flow hedge relationship. The Group has exposure to currency risk on the value of its net The Group incurs foreign currency risk as a result of offshore investment in foreign investments, assets and liabilities denominated investments denominated in a currency other than the Group’s in foreign currencies, future investment obligations and future functional currency. The currencies giving rise to the currency risk income. Foreign currency obligations and income are recognised are pounds sterling, euros and Australian dollars (refer below). as soon as the flow of funds is likely to occur. Decisions on buying At balance date the Group has the following unhedged currency forward for likely foreign currency investments is subject to the exposures arising on foreign currency monetary assets and Group’s expectation of the fair value of the relevant exchange rate. monetary liabilities that fall due within the next twelve months: The Group has entered into a number of forward exchange Consolidated contracts to reduce the risk from price fluctuations of foreign currency costs associated with the construction of generation 2008 2007 assets. Any resulting differential to be paid or received as a result $Millions $Millions of the currency hedging of the asset is reflected in the final cost Cash, short term deposits and trade of the asset. The Group has elected to apply cash flow hedge receivables accounting to these instruments. Great British Pounds (GBP) 4.0 5.3 The aggregate notional principal amounts of the outstanding forward foreign exchange contracts at 31 March 2008 was Australian Dollars (AUD) 107.0 37.4 $72.4 million (31 March 2007: $190.3 million). At balance date the Euros (EUR) 1.3 0.8 fair value of forward foreign exchange contracts outstanding were Bank overdraft, bank debt and ($6.7million) (31 March 2007: $1.8 million). accounts payable The hedged anticipated transactions denominated in foreign currency are expected to occur at various dates between one Great British Pounds (GBP) (0.8) (6.8) month and five months from balance sheet date. Gains and losses Australian Dollars (AUD) (50.5) (18.8) recognised in the cash flow hedge reserve in equity on forward Euros (EUR) (1.0) (1.4) foreign exchange contracts as at 31 March 2008 will be recognised in the cost of any asset acquired when the cash flow from the anticipated underlying transactions occur.

72 Picking the trends... Notes to the Financial Statements For the Year Ended 31 March 2008

Energy price risk is the risk that results will be impacted by Termination dates for hedge contracts are as follows: fluctuations in spot energy prices. The Group is required to purchase a percentage of its energy sold from the energy spot Between 0 to 1 year 10.4 23.3 market. This leaves the Group exposed to fluctuations in the Between 1 to 2 years 22.6 11.0 spot price of energy. The Group has entered into a number of energy hedge contracts to reduce the energy price risk from price Between 2 to 5 years 9.7 (3.4) fluctuations on the energy spot market. These hedge contracts 42.7 30.9 establish the price at which future specified quantities of energy are purchased. Any resulting differential to be paid or received Sensitivity analysis is recognised as a component of energy costs through the term The following tables summarise the impact of increases/decreases of the contract. The Group has elected to apply cash flow hedge of the relevant forward electricity prices on the Group’s post- accounting to those instruments it deems material and which qualify tax profit for the year and on other components of equity. The as cash flow hedges while immaterial contracts will not be hedge sensitivity analysis is based on the assumption that the relevant accounted. forward energy prices had increased/decreased with all other The aggregate notional volume of the outstanding energy variables held constant. derivatives at 31 March 2008 was 9,535 GWh (31 March 2007: 2,448GWh). Impact on profit of a 10% decrease in As at 31 March 2008, the Group had energy contracts (6.0) (2.9) energy forward price outstanding with various maturities up to 31 December 2012. The Impact on profit of a 10% increase in hedged anticipated energy purchase transactions are expected to 6.0 2.9 occur continuously throughout the next five years from balance energy forward price sheet date consistent with the Group’s forecast energy generation Impact on equity of a 10% decrease in 2.7 6.6 and retail energy sales. Gains and losses recognised in the cash energy forward price flow hedge reserve on energy derivatives as of 31 March 2008 will Impact on equity of a 10% increase in be continuously released to the income statement in each period in (2.7) (6.6) energy forward price which the underlying purchase transactions are recognised in the Statement of Financial Performance.

Fair values The carrying amount of financial assets and financial liabilities recorded in the financial statements is their fair value, with the exception of debt held at carrying value (refer to note 23). Assets Liabilities Net

2008 2007 2008 2007 2008 2007 $Millions $Millions $Millions $Millions $Millions $Millions Derivative financial instruments – energy 48.4 42.6 5.7 11.7 42.7 30.9 Derivative financial instruments – investments (S&P options) and other 41.5 - 15.7 - 25.8 - 89.9 42.6 21.4 11.7 68.5 30.9

Infratil Annual Report 73 Notes to the Financial Statements For the Year Ended 31 March 2008

Estimation of fair values Capital management The fair values and net fair values of financial assets and financial The key factors in determining Infratil’s optimal capital structure are: liabilities are determined as follows: • Nature of its activities • The fair value of financial assets and liabilities with standard • Quality and dependability of earnings/cash flows terms and conditions and traded on active liquid markets are determined with reference to quoted market prices. • Capital needs over the forecast period • The fair value of other financial assets and liabilities are • Available sources of capital and relative cost calculated using market-quoted rates based on discounted cash • Tax status of shareholders flow analysis. The Group’s capital includes share capital, reserves, retained • The fair value of derivative financial instruments are calculated earnings and minority interests. From time to time the Group using quoted prices. Where such prices are not available, use purchases its own shares on the market; with the timing of these is made of discounted cash flow analysis using the applicable purchases dependent on market prices and an assessment of yield curve or available forward price data for the duration of the value for shareholders. Primarily the shares are intended to be instruments. held as treasury stock. Buy and sell decisions are made on a Where the fair value of a derivative is calculated as the present specific transaction basis by the Board. There were no changes value of the estimated future cash flows of the instrument, the two in the Group’s approach to capital management during the year. key types of variables used by the valuation techniques are: The Company and borrowers in the Group are subject to certain compliance ratios relevant to the facility agreements or the Trust • forward price curve (for the relevant underlying interest rates, Deed applicable to the borrowings. The Group seeks to ensure foreign exchange rates or commodity prices); and that no more than 25% of its non-bank debt is maturing in any one • discount rates. year period, and to spread the maturities of its bank debt between one and five years, with no more than 50% of facilities maturing The selection of variables requires significant judgement and in any six month period. Discussions on refinancing of bank debt therefore there is a range of reasonably possible assumptions in facilities will normally commence at least six months before maturity respect of these variables that could be used in estimating the fair with facility terms agreed at least two months prior to maturity. The value of these derivatives. Maximum use is made of observable Group manages its interest rate profile so as to minimise net value market data when selecting variables and developing assumptions volatility. This means having interest costs fixed for extended terms for the valuation techniques. (when rates fall the value of infrastructure assets rise and vice Ageing of trade receivables versa). At times when long rates appear to be unsustainably high, Included in trade receivables are $20.4 million (2007: $12.3 million) the profile may be shortened. which are past due, the allowance for impairment in respect of trade receivables for the year was $1.9 million (2007: $1.4 million). Trade receivables primarily represents amounts outstanding from residential customers for energy usage. Based on past experience, the Company believes that an impairment allowance is necessary in respect of trade receivables past due.

74 Picking the trends... Notes to the Financial Statements For the Year Ended 31 March 2008

(23) Infrastructure bonds

Consolidated Parent

2008 2007 2008 2007 $Millions $Millions $Millions $Millions Balance at the beginning of the year 730.0 481.6 730.0 481.6 Issued during the year 18.8 248.4 18.8 248.4 Balance at the end of the year 748.8 730.0 748.8 730.0 Current - - - - Non current fixed coupon 508.8 508.8 508.8 508.8 Non current perpetual 240.0 221.2 240.0 221.2 Balance at the end of the year 748.8 730.0 748.8 730.0 Repayment terms and interest rates: Maturing in November 2010, 7.25% per annum fixed coupon rate 0.7 0.7 0.7 0.7 Maturing in May 2011, 8.25% per annum fixed coupon rate 112.1 112.1 112.1 112.1 Maturing in November 2011, 8.5% per annum fixed coupon rate 20.0 20.0 20.0 20.0 Maturing in November 2012, 7.75% per annum fixed coupon rate 57.4 57.4 57.4 57.4 Maturing in September 2013, 8.5% per annum fixed coupon rate 85.3 85.3 85.3 85.3 Maturing in November 2015, 8.5% per annum fixed coupon rate 152.8 152.8 152.8 152.8 Maturing in February 2020, 8.5% per annum fixed coupon rate 80.5 80.5 80.5 80.5 PIIBs 240.0 221.2 240.0 221.2 Balance at the end of the year 748.8 730.0 748.8 730.0

Fixed coupon Perpetual Infratil infrastructure bonds (PIIBs) The fixed coupon bonds the Company has on issue are at a face The Company has 240,000,000 (2007: 221,247,750) infrastructure value of $1.00 per bond. Interest is payable quarterly on the bonds. bonds (series 20) on issue at a face value of $1.00 per bond. 25 days prior to the maturity date, Infratil shall elect to redeem all Interest is payable quarterly on the bonds. For the period to infrastructure bonds in that series at their $1.00 face value payable 15 November 2008 the coupon is fixed at 10.27% per annum. in cash or convert all the infrastructure bonds in the relevant series Thereafter the rate will be reset annually each 15 November at by issuing the number of shares obtained by dividing the $1.00 1.5% per annum over the then one year bank rate (quarterly), face value by the product of the relevant conversion percentage of unless Infratil’s gearing ratio exceeds certain thresholds, in which 98% and the market price. The market price is the average price case the margin increases. These infrastructure bonds have no weighted by volume of all trades of ordinary shares over the 10 fixed maturity date. business days up to the fifth business day before the maturity date. At 31 March 2008 the Infratil Infrastructure bonds had a fair value of $667.1 million (31 March 2007: $773.5 million).

Infratil Annual Report 75 Notes to the Financial Statements For the Year Ended 31 March 2008

(24) Unsecured subordinated bonds

Consolidated

2008 2007 $Millions $Millions TrustPower bonds Repayment terms and interest: Maturing in September 2007, 8.3% per annum fixed coupon rate - 86.2 Maturing in December 2008, 8.3% per annum fixed coupon rate 50.5 50.5 Maturing in September 2012, 8.5% per annum fixed coupon rate 108.6 108.6 Maturing in March 2014, 8.5% per annum fixed coupon rate 54.7 54.7 Bond issue costs (1.8) (2.4) Balance at the end of the year 212.0 297.6 At maturity the bonds can be converted at the option of the Company to ordinary shares based on the market price of ordinary shares at the time. At 31 March 2008 the bonds had a fair value of $198.5 million (31 March 2007: $299.1 million). Wellington International Airport bonds Maturing August 2017, 8.70% per annum to 1 May 2008, then repriced quarterly at BKBM plus 25bps 150.0 - Balance at the end of the year 150.0 - At 31 March 2008 the bonds had a fair value of $150 million (31 March 2007: n/a). Current portion 50.5 86.2 Non current portion 311.5 211.4 Balance at the end of the year 362.0 297.6

(25) Emission rights

Verified Voluntary Emission Reductions

(Tonnes CO2-e) (Tonnes CO2-e) 000s 000s Balance at beginning of year 213.0 - Rights verified during the year 202.0 223.0 Rights sold during the year (55.0) (10.0) Rights unsold at end of year 360.0 213.0

The Verified Voluntary Emission Reductions above relate to 1,310,000 tonnes of these carbon emission rights. This potential completed generation production for the period revenue source is taken into consideration in the evaluation 1 January 2004 to 31 December 2007. of generation development projects and in the valuation of the generation assets. Kyoto Carbon Credits A contract has been signed with Electrabel, a European energy TrustPower has received 1,476,000 (2007: 1,476,000) tonnes company, for the sale of 228,000 tonnes of carbon emission of carbon emission rights from the New Zealand Government in rights over five years from 2008-2012. This sale is dependent on relation to completed or under construction generation facilities. TrustPower’s Tararua Stage II windfarm producing a minimum level This represents the maximum rights based upon specified levels of of output. A contract has been signed with The Kansai Electric generation output from the new facilities for the period 1 January Power Company, a Japanese energy company, for the sale of 2008 to 31 December 2012 and is reliant on the ongoing support 300,000 tonnes of carbon emission rights over five years from of the Kyoto protocol and emission rights within the international 2008-2012. This sale is dependent on TrustPower’s Tararua Stage community. TrustPower believes that it will be able to utilise III windfarm producing a minimum level of output.

76 Picking the trends... Notes to the Financial Statements For the Year Ended 31 March 2008

Kyoto Carbon Credits

(Tonnes CO2-e) (Tonnes CO2-e) 000s 000s Rights earned during the year 55.0 - Rights sold during the year (55.0) - Rights unsold at end of year - -

(26) Investment in subsidiaries and associates

At 31 March 2008 the significant companies of the Infratil Group and their activities were as follows: The financial year-end of all the significant subsidiaries and associates is 31 March.

2008 2007 Country of Subsidiaries Holding Holding Principal activity incorporation Investment activities New Zealand Infratil Investments Limited 100% 100% Investment New Zealand Infratil Securities Limited 100% 100% Investment New Zealand Infratil Gas Limited 100% 100% Investment New Zealand Infratil 1998 Limited 100% 100% Investment New Zealand NZ Airports Limited 100% 100% Investment New Zealand Infratil Australia Limited 100% 100% Investment New Zealand Infratil Finance Limited 100% 100% Finance New Zealand Infratil UK Limited 100% 100% Investment New Zealand Infratil Ventures Limited 100% 100% Investment New Zealand Infratil Europe Limited 100% 100% Investment New Zealand Swift Transport Limited 100% 100% Investment New Zealand Infratil Energy Limited 100% 100% Investment New Zealand Infratil Energy NZ Limited 100% 100% Investment New Zealand Snapper Services Limited 100% 100% Technology New Zealand Infratil No. 1 Limited 100% - Investment New Zealand Infratil Infrastructure Property Limited 100% - Property Investment New Zealand Transportation activities New Zealand New Zealand Bus Finance Limited 100% 100% Investment New Zealand New Zealand Bus Limited 100% 100% Investment New Zealand Fullers Group Limited 100% 96% Public transport New Zealand Transportation Auckland Corporation Limited 100% 100% Public transport New Zealand Auckland Integrated Ticketing Limited 83% 83% Ticketing New Zealand Wellington City Transport Limited 100% 100% Public transport New Zealand North City Bus Limited 100% 100% Public transport New Zealand Cityline (NZ) Limited 100% 100% Public transport New Zealand Wellington Integrated Ticketing Limited 63% 63% Ticketing New Zealand Stagecoach New Zealand Limited 100% 100% Non-trading New Zealand

Infratil Annual Report 77 Notes to the Financial Statements For the Year Ended 31 March 2008

2008 2007 Country of Subsidiaries Holding Holding Principal activity incorporation Airport activities New Zealand Wellington International Airport Limited 66% 66% Airport New Zealand i-site Limited 66% 66% Advertising New Zealand North West Auckland Airport Limited 75% 75% Airport New Zealand United Kingdom/ Europe Infratil Airports Europe Limited 100% 100% Holding company United Kingdom Glasgow Prestwick Airport Limited 100% 100% Airport United Kingdom Prestwick Airport Limited 100% 100% Property United Kingdom Infratil Kent Facilities Limited 100% 100% Property United Kingdom Infratil Kent Airport Limited 100% 100% Airport United Kingdom Maintenance/repair/overhaul PIK MRO Limited 100% 100% United Kingdom aircraft The Airport Driving Range Company Limited 100% 100% Non-trading United Kingdom Flughafen Lübeck GmbH (‘Lübeck Airport’) 90% 90% Airport Germany Energy activities New Zealand TrustPower Limited 50.5% 50.5% Electricity retailer/generator New Zealand Cobb Power Limited 50.5% 50.5% Generator New Zealand Tararua Wind Power Limited 50.5% 50.5% Generator New Zealand TrustPower Metering Limited 50.5% 50.5% Metering New Zealand Australia Wholesale energy/holding Infratil Energy Australia Pty Limited 100% 100% Australia company Western Energy Pty Limited 69.2% - Electricity generation Australia Victoria Electricity Pty Limited 100% 98.53% Electricity retailer Australia VE Telecommunications Pty Limited 100% - Electricity retailer Australia Direct Connect Pty Limited 100% 98.53% Utility connections Australia Queensland Electricity Pty Limited 100% 98.53% Electricity retailer Australia New South Wales Electricity Pty Limited 100% 98.53% Electricity retailer Australia South Australia Electricity Pty Limited 100% 98.53% Electricity retailer Australia Perth Energy Pty Limited 69.2% 51% Electricity retailer Australia WA Power Exchange Pty Limited 69.2% - Non-trading Australia Infratil Energy Group Pty Limited 100% - Non-trading Australia Emagy Pty Limited 100% 100% Wholesale energy Australia TrustPower Australia Holdings Pty Ltd and Subsidiaries 50.5% 50.5% Retail and generation Australia Associates Mana Coach Holdings Limited 26% 26% Public transport New Zealand Just Cruising Charters Limited 50% 50% Public transport New Zealand

(27) Defined contribution plans

The Company makes contributions to a number of defined contribution plans. The amount recognised as expense was $1.0 million for the year ended 31 March 2008 (31 March 2007 $0.9 million).

78 Picking the trends... Notes to the Financial Statements For the Year Ended 31 March 2008

(28) Leases

The Group has commitments under operating leases relating to the lease of premises and hire of plant and equipment. These commitments expire as follows: Consolidated Parent

2008 2007 2008 2007 $Millions $Millions $Millions $Millions Between 0 to 1 year 12.0 3.9 - - Between 1 to 2 years 9.6 4.0 - - Between 2 to 5 years 18.7 7.8 - - More than 5 years 29.5 31.9 - - 69.8 47.6 - - Operating leases as lessor Between 0 to 1 year 2.6 2.3 - - Between 1 to 2 years 3.7 1.9 - - Between 2 to 5 years 4.3 4.4 - - More than 5 years 7.3 8.0 - - 17.9 16.6 - - i-site leases a large number of billboard and light-box sites under operating leases. The leases run for periods ranging from 1-20 years. Some leases provide for additional rent payments that are based on site revenue. During the year $2.1million was recognised as an expense in the Statement of Financial Performance in respect of operating leases.

(29) Reconciliation of net surplus with cash flow from operating activities Consolidated Parent

2008 2007 2008 2007 $Millions $Millions $Millions $Millions Net surplus 52.7 81.4 43.2 24.7 Less items classified as investing activity Loss/(profit) on investment realisations and impairments 16.0 (38.1) - 0.9 Add items not involving cash flows Movement in financial derivatives taken to the Statement of Financial Performance (2.9) (22.7) - - (Decrease)/Increase in deferred tax liability excluding transfers to reserves (13.8) 7.0 - - Changes in fair value of investment properties - (5.6) - - Non cash movements in advance to subsidiaries - - (91.5) (62.5) Depreciation 67.3 43.7 - - Provision for bad debts 4.4 1.9 - - Impairment charge - - - Amortisation 12.0 4.5 - - Other (0.1) (3.7) - - Equity accounted earnings of associate - (17.6) - - Movements in working capital (Increase)/decrease in receivables (72.6) (40.3) 0.9 (1.6) (Increase)/decrease in stock (4.9) (1.6) - - Increase /(decrease) in trade payables 99.5 55.5 (14.6) 18.3 Increase in accruals and other liabilities 14.4 1.6 - - (Increase)/decrease in taxation and deferred tax (4.3) (0.6) (1.6) 2.6 Net cash inflow/(outflow) from operating activities 167.7 65.4 (63.6) (17.6)

Infratil Annual Report 79 Notes to the Financial Statements For the Year Ended 31 March 2008

(30) Key management personnel disclosures

Key management personnel have been defined as the Chief Executive and direct reports for the Group’s operating subsidiaries.

Consolidated

2008 2007 $Millions $Millions Key management personnel remuneration comprised: Short-term employee benefits 12.0 10.0 Post-employment benefits - - Termination benefits 0.1 1.0 Other long-term benefits 0.3 0.3 Share based payments* 0.1 0.1 12.5 11.4

* The above share based payment relates to options issued by TrustPower and not Infratil Limited. TrustPower is a separate listed entity and therefore the fair value of share based payments by the entity are determined by TrustPower. See also management fees paid to Infratil’s manager in notes 35 and 36.

(31) Segment information

The primary format is business segments. As at 31 March, the Group operated in predominantly three business segments – airport, transportation and energy. The airport operations comprise the revenue and expenses associated with the Group’s investments in Wellington International Airport, Infratil Airports Europe and Auckland International Airport Ltd, transportation comprises the businesses of New Zealand Bus and subsidiaries, and the energy operations relate to TrustPower, Victoria Electricity, Infratil Energy Australia and Energy Developments Ltd. Corporate includes, other investments less the financing, management and other corporate costs.

Airports Transportation Energy Corporate Elimination Consolidated

2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 $Millions $Millions $Millions $Millions $Millions $Millions $Millions $Millions $Millions $Millions $Millions $Millions Segment revenue 194.5 178.4 210.5 197.6 961.7 271.7 3.7 40.3 (14.6) 1.9 1,355.8 689.9 Segment result 13.6 11.2 25.3 21.9 131.6 58.1 (105.0) (2.8) 9.8 10.4 75.3 98.8 Taxation expense 22.6 17.4 Group surplus 52.7 81.4 Segment assets 1,051.1 954.2 255.9 289.6 2,869.5 2,315.3 226.4 334.5 (3.5) (6.0) 4,399.4 3,887.6 Segment liabilities 395.0 397.8 51.0 60.6 1,165.2 883.1 1,313.8 1,024.8 4.0 (5.1) 2,929.0 2,361.2 Capital expenditure/ investments 177.5 75.8 44.1 17.5 234.0 287.0 37.0 5.4 - - 492.6 385.7 Depreciation and amortisation 27.0 25.4 13.7 13.4 38.6 9.4 - - - - 79.3 48.2 Impairments 3.8 - 1.7 - - - 11.4 4.6 - - 16.9 4.6

80 Picking the trends... Notes to the Financial Statements For the Year Ended 31 March 2008

Geographical segments The secondary reporting format is geographical segments. The Group operated in three principal areas New Zealand, Australia and Europe.

New Zealand Australia Europe Elimination Consolidated

2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 $Millions $Millions $Millions $Millions $Millions $Millions $Millions $Millions $Millions $Millions Segment revenue 987.6 455.3 280.3 137.8 102.5 102.0 (14.6) (5.2) 1,355.8 689.9 Segment result 91.2 77.8 (5.2) 36.4 (20.5) (18.7) 9.8 3.3 75.3 98.8 Taxation expense 22.6 17.4 Group surplus 52.7 81.4 Segment assets 3,713.0 3,396.3 351.7 141.1 341.1 356.2 (6.4) (6.0) 4,399.4 3,887.6 Segment liabilities 2,752.7 2,214.1 71.7 35.0 100.5 117.1 4.1 (5.0) 2,929.0 2,361.2 Capital expenditure/ 412.0 244.5 56.6 99.9 24.0 41.3 - - 492.6 385.7 investments Depreciation and amortisation 59.4 32.3 6.5 2.4 13.4 13.5 - - 79.3 48.2 Impairments 13.1 4.6 - - 3.8 - - - 16.9 4.6

Segmental assets and revenue is based on the geographical location of both customers and assets.

(32) Commitments

Capital commitments Energy Purchase Commitments Consolidated TrustPower has a long term contract with Mighty River Power to purchase the output from the Rotokawa geothermal power station 2008 2007 until 31 March 2013. This commitment cannot be quantified. $Millions $Millions TrustPower has a contract with Pioneer Generation to purchase all Committed but not contracted for 27.9 - of the output from its various generation sites. This commitment Contracted but not provided for 197.4 257.8 cannot be quantified. Wellington International Airport is investing in terminal 225.3 257.8 development (additional facilities at north pier) and carparking TrustPower is awaiting commissioning of the Deep Stream hydro facilities. Contractural agreements for the supply of the significant development and progressing with construction of a windfarm near components of this development have been entered into and the Snowtown in South Australia. Contractual agreements for the expected cost of these projects is $10.7 million. supply of the significant components of these developments have been entered into and the total cost of the projects is expected to be $234.2 million. At balance date $85.1 million has been spent on the developments. A further $108.9 million has been accrued for work completed but not paid for at balance date.

Infratil Annual Report 81 Notes to the Financial Statements For the Year Ended 31 March 2008

(33) Contingent liabilities (34) Earnings per share

Cash is held on deposit with banks of $0.8 million (2007: $4.6 2008 2007 million) as guarantees in the event that Victoria Electricity is unable $Millions $Millions to meet its liabilities to certain suppliers. Net surplus attributable to ordinary (1.7) 68.2 Subsidiaries have outstanding letters of credit to suppliers totaling shareholders $0.5 million (2007: $1.3 million), and performance bonds totaling $1.3 million (2007: $1.0 million). cps cps The purchase agreement in respect of Victoria Electricity includes Basic earnings per share: additional customer growth targets to be met by December 2008, From continuing operations (0.4) 15.8 in which case the purchase price could increase by a maximum amount of A$6 million. From discontinuing operations - - The Company and certain wholly owned subsidiaries are Total basic earnings per share (0.4) 15.8 guarantors of the bank debt facilities of Infratil Finance Limited under a Deed of Negative Pledge, Guarantee and Subordination 2008 2007 and the Company is a guarantor to certain obligations of subsidiary Millions Millions companies. Weighted average number of ordinary The Company has a contingent liability under the management shares agreement with MCIM in the event that the Group sells its international or venture capital fund assets or reallocates assets in the future and Issued ordinary shares at 1 April 219.7 218.9 exceeds the performance thresholds in respect to incentive fees. Effect of shares re-issued - 1.1 The Group has given certain guarantees to the City of Lübeck in respect to the Group’s commitments in the Participation Agreement Effect of share split 219.8 219.8 under which it acquired its 90% interest in Flughafen Lübeck Effect of issue of partly paid shares 19.8 - GmbH. These guarantees relate to the payment of purchase price II Effect of shares issued through warrant (provided for in the financial statements), capital expenditure for the 3.8 0.3 exercise development of the airport in the event of the Airport obtaining the Planning Approval Condition set out in the Participation Agreement, Effect of shares bought back - (3.9) and grants received. Weighted average number of ordinary 463.1 436.2 The Company has agreed to underwrite an equity issue by a shares at end of year non-wholly owned subsidiary for an amount of up to A$53 million, to be issued over the period from March 2008 to December 2009 of Diluted earnings per share recognising which A$7.6 million had been issued at year end 2008. warrants on issue During the year the European Commission opened formal From continuing operations (cps) (0.3) 14.9 proceedings alleging state aid in relation to Lübeck airport (owned From discontinued operations - - and operated by Flughafen Lübeck GmbH, one of the Group’s subsidiaries). Lübeck is one out of four airports in Germany Total diluted earnings per share (cps) (0.3) 14.9 where the European Commission opened a formal proceeding. Weighted average number of ordinary IAEL understands a significant number of others in Germany shares (diluted) and elsewhere in the European Union are in earlier stages of Weighted average ordinary shares at investigation. Of the four matters being investigated, three relate to 463.1 436.2 arrangements with Ryanair which were entered into prior to the sale end of year (calculated above) of the airport to the IAEL Group. Whilst Infratil Airports Europe and Effect of warrants on issue 21.0 23.0 Flughafen Lübeck GmbH are working with Ryanair, the Hanseatic Effect of partly paid shares on issue on City of Lübeck and the government of the Federal Republic of 43.8 - issue Germany to refute these allegations of state aid, their outcome is not expected to affect IAEL’s financial position. In relation to Weighted average number of ordinary 527.9 459.2 the fourth, Infratil Airports Europe and Flughafen Lübeck GmbH shares at end of year fully maintain their legal and factual position that the open tender The net surplus attributable to parent company shareholders is the process in 2005 that resulted in the purchase of Flughafen Lübeck same for the calculation of basic and diluted earnings per share. GmbH cannot by its very nature involve state aid and continue The average market value of the Company’s shares for the to be confident that they will be able to demonstrate this to the purposes of calculating the dilutive effect of share options was Commission and, if necessary, the European Court of Justice. based on quoted market prices for the year that the warrants As the directors cannot predict with any degree of certainty the were outstanding. outcome of the above matter, it is not possible to assess accurately the quantum of any financial cost to the Group.

82 Picking the trends... Notes to the Financial Statements For the Year Ended 31 March 2008

(35) Related parties Employees of MCO received directors fees (or MCO received the fees) from the Company’s subsidiaries or associated companies as Certain Directors have relevant interests in a number of follows: companies with which Infratil has transactions in the normal course of business. A number of key management personnel are also Wellington International Airport NZD 104,000 NZD 116,300 Directors of Group subsidiary companies. Transactions undertaken with Group companies have been entered into on an arm’s length Infratil Airports Europe GBP 87,500 GBP 91,000 commercial basis. NZ Bus NZD 140,000 NZD 105,000 Morrison & Co Infrastructure Management Limited (‘MCIM’) Victoria Electricity AUD 55,000 AUD 55,000 is the management company for the Company. MCIM received management fees and incentive fees in accordance with the TrustPower NZD 195,000 NZD 140,000 management agreement of $22.0 million excluding GST (2007: Infratil Energy Australia AUD 25,000 AUD 25,000 $17.3 million including GST) and $nil million excluding GST (2007: $14.3 million including GST) respectively. Included in trade creditors Mana Coach Holdings NZD 30,000 NZD 22,500 is an amount of $1.6 million excluding GST (2007: $16.1 million Snapper Services NZD 50,000 NZD 50,000 including GST) for management fees for the month of March 2008. MCIM is owned by H.R.L. Morrison & Co Group Limited Parent company (‘MCO’). Messrs H R L Morrison and D P Saville are directors of the Company and MCO. Entities associated with Mr Morrison and Amounts due from subsidiary companies are repayable on demand Mr Saville own shares in MCO. and are at interest rates up to 10.5 per cent During the year Ingot Capital Management Pty Limited has Note 26 identifies significant group entities and associates in provided Investment Manager services to Infratil in respect of S&P which Infratil has an interest. All of these entities are related parties option contracts set out in note 22. Ingot Capital Management Pty of the Company. Limited is a related party to Mr Saville, a director of the Company. Neither Ingot Capital Management Pty Limited, nor Mr Saville have received any fees for this service. Other fees paid to MCIM, MCO or related parties are set out below:

Consolidation and Parent

2008 2007 $Millions $Millions Investment banking services relate to: - Whenuapai Airport 0.1 0.1 - Other airports due diligence - 0.1 - Due diligence 0.3 - Electricity assets (Australia) - 0.1 - Issue of infrastructure bonds - 0.2 Financial management, accounting, treasury, compliance and administrative 0.6 0.6 services Risk management reporting 0.2 0.2 Consulting for NZ Bus 0.5 0.1 Consulting for TrustPower - 0.1 Consulting for Perth Energy 0.5 - Total fees and services 2.2 1.5

Infratil Annual Report 83 Notes to the Financial Statements For the Year Ended 31 March 2008

(36) Management fee to Morrison & Co (37) Events after balance date Infrastructure Management Limited (‘MCIM’) Dividend Subsequent to 31 March 2008 the Directors have approved a The management fee comprises a number of different components: fully imputed final dividend, of 3.75 cents per share to holders of • A New Zealand base management fee is paid on the fully paid ordinary shares and 1.875 cents per share to all holders “New Zealand Company Value” at the rates of 1.125% of partly paid ordinary shares, to be paid on 16 June 2008 to per annum on the New Zealand Company Value up to $50 shareholders on the register on 6 June 2008 amounting in total to million, 1.0% per annum on the New Zealand Company Value $18.3 million. between $50 million and $150 million and 0.80% per annum on the New Zealand Company Value above $150 million. The New Zealand Company Value is: – the Company’s market capitalisation as defined in the management agreement (i.e. the aggregate market value of the Company’s listed securities, being ordinary shares, partly paid shares, infrastructure bonds and warrants); – plus the Company and its wholly owned subsidiaries’ net debt (excluding listed debt securities and the book value of the debt in any non-Australasian investments); – minus the cost price of any non-Australasian investments; and – plus/minus an adjustment for foreign exchange gains or losses related to non-New Zealand investments. • An international fund management fee is paid at the rate of 1.50% per annum on: – the cost price of any non-Australasian investments; plus – the book value of the debt in any wholly owned non- Australasian investments. The investment in the Glasgow Prestwick group of companies is treated as an investment in a New Zealand asset for management fee purposes. • An international fund incentive fee is payable at the rate of 20% of gains on the international (including Australian) assets in excess of 12% per annum post tax. • A venture capital fund management fee is payable, at the rate of 2% per annum on investment entities with values up to $7.5 million and 1.2% per annum on investment entities with values over $7.5 million. A venture capital fund incentive fee is payable at the rate of 20% of gains on the investment assets in excess of 17.5% per annum pre-tax.

84 Picking the trends... Audit Report

To the shareholders of Infratil Limited We have audited the financial statements on pages 44 to 84. The financial statements provide information about the past financial performance and financial position of the company and group as at 31 March 2008. This information is stated in accordance with the accounting policies set out on pages 48 to 53. Directors’ responsibilities The Directors are responsible for the preparation of financial statements which give a true and fair view of the financial position of the company and group as at 31 March 2008 and the results of their operations and cash flows for the year ended on that date. Auditors’ responsibilities It is our responsibility to express an independent opinion on the financial statements presented by the Directors and report our opinion to you. Basis of opinion An audit includes examining, on a test basis, evidence relevant to the amounts and disclosures in the financial statements. It also includes assessing: • the significant estimates and judgements made by the Directors in the preparation of the financial statements; • whether the accounting policies are appropriate to the company’s and group’s circumstances, consistently applied and adequately disclosed. We conducted our audit in accordance with New Zealand Auditing Standards. We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to obtain reasonable assurance that the financial statements are free from material misstatements, whether caused by fraud or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements. Our firm has also provided other services to the company and certain of its subsidiaries in relation to taxation and general accounting services. Partners and employees of our firm may also deal with certain subsidiaries on normal terms within the ordinary course of their trading activities. These matters have not impaired our independence as auditors of the company and group. The firm has no other relationship with, or interest in, the company or any of its subsidiaries. Unqualified opinion We have obtained all the information and explanations we have required. In our opinion: • proper accounting records have been kept by the company as far as appears from our examination of those records; • the financial statements on pages 44 to 84: - comply with New Zealand generally accepted accounting practice; - give a true and fair view of the financial position of the company and group as at 31 March 2008 and the results of their operations and cash flows for the year ended on that date. Our audit was completed on 19 May 2008 and our unqualified opinion is expressed as at that date.

Wellington

Infratil Annual Report 85 Corporate Governance

Role of the board: Audit & risk committee:

The Board of Directors of Infratil is elected by the shareholders to The Board has established an Audit & Review Committee comprising supervise the management of the Company. The Board establishes the of two Directors, Mr M Tume (Chairman) and Mr D A R Newman with Company’s objectives, overall policy framework within which the business attendances by appropriate MCIM representatives. of the Company is conducted and confirms strategies for achieving The main objectives of the Audit and risk committee are to: these objectives, monitors the managers performance and ensures that procedures are in place to provide effective internal financial control. • Assist the Board to discharge its responsibility to exercise due care, The day to day management responsibilities of the Company have diligence and skill in relation to the Group’s governance processes been delegated to Morrison & Co Infrastructure Management Limited including assessing the adequacy of the Groups: (“MCIM”). – financial reporting

Board membership: – accounting policies; – financial management; The Board currently comprises five non-executive Directors including the Chairman and one executive director. During the period under – internal control system; review, the Board met six times with a full agenda and four times with – risk management system; a limited agenda. In accordance with the Company’s constitution one third, or the – systems for protecting Group assets; and number nearest to one third, of the Directors (excluding any Director – compliance with applicable laws, regulations, standards and best appointed since the previous annual meeting) retire by rotation at each practice guidelines as they relate to financial and non-financial annual meeting. The Directors to retire are those who have been longest disclosures. in office since their last election. • Enhance the efficiency of the Board by allowing delegated issues to be Directors retiring by rotation may, if eligible, stand for re-election. discussed in sufficient depth and, where necessary, with appropriate independent advice. Directors’ shareholding: • Review management’s letters of representation to the auditors. Under the constitution Directors are not required to hold shares in the Company. However, $10,000 of the directors fees for non-executive • Facilitate the continuing independence of the external auditor and directors other than Messrs Saville and Morrison are paid through the enhancing the effectiveness of external audit. issue of shares to those directors. All Directors either hold shares • Provide a formal forum for enhancing communication between the themselves or shares are held by organisations to which they are Board, senior financial management and external audit, ensuring associated parties in recognition of the benefits of aligning Directors’ there has been no unjustified restrictions or limitations placed on the interests with those of shareholders. auditors. Directors will not normally make investments in listed infrastructure or During the period under review the Audit & Risk Committee met four utilities securities in areas targeted by the Company. times with a full agenda and once with a limited agenda.

Internal financial control:

The Board has overall responsibility for the Company’s system of internal financial control. The Directors have established procedures and policies that are designed to provide effective internal financial control. Annual budgets and long term strategic plans are agreed by the Board. Financial statements are prepared regularly and reviewed by the Board throughout the year to monitor performance against budget targets and objectives.

86 Picking the trends... Corporate Governance

Risk management and compliance: The role of shareholders:

The Audit & Risk Committee also has a function of reviewing The Board aims to ensure that shareholders are informed of all major management practices in relation to the identification and management developments affecting the Group’s state of affairs. Information is of significant business risk areas and regulatory compliance. Formal communicated to shareholders in the annual report, interim report, Infratil systems have been introduced for regular reporting to the Board on Updates, regular e-mail updates and media announcements. The Board business risk and compliance matters. encourages full participation of shareholders at the annual meeting to ensure a high level of accountability and identification with the Group’s Directors’ and officers’ insurance: strategies and goals.

The Company has arranged Directors’ and Officers’ liability insurance Corporate governance best practice code: covering Directors acting on behalf of the Company. Cover is for damages, judgements, fines, penalties, legal costs awarded and defence The Company supports the Corporate Governance Best Practice Code costs arising from wrongful acts committed while acting for the Company. promulgated by the New Zealand Exchange. In a number of respects, the The types of acts that are not covered are dishonest, fraudulent, Company’s practice differs from this Code. In particular, the Company malicious acts, or omissions, wilful breach of statute or regulations, or has not established separate Director Nomination and Remuneration duty to the Company, improper use of information to the detriment of the Committees. The Company considers that it is properly dealing with Company or breach of professional duty. these issues at the full Board level. Copies of the Company’s Corporate Governance Code and Code of Ethics are available on request of the Independent professional advice: Company Secretary or can be downloaded from www.infratil.com.

With the approval of the Chairman, Directors are entitled to seek independent professional advice on any aspect of the Directors’ duties, at the Company’s expense.

Going concern:

After reviewing the current results and detailed forecasts, taking into account available credit facilities and making further enquiries as considered appropriate, the Directors are satisfied that the Company has adequate resources to enable it to continue in business for the foreseeable future. For this reason, the Directors believe it is appropriate to adopt the going concern basis in preparing the financial statements.

Board performance:

The Board as a whole and individual directors are subject to a performance appraisal from time to time using a corporate governance best practice model. This appraisal is designed to measure performance through peer review and self assessment. The Chairman then initiates a review with each Director and a collective review of Board performance. Appropriate strategies for personal and collective improvement are then agreed and actioned.

Infratil Annual Report 87 New Zealand Exchange and Statutory Information

Directors of Infratil’s other subsidiary companies (not otherwise disclosed) are set out below:

Company Directors of Subsidiary Infratil Airports Europe Limited Paul Ridley-Smith, Lloyd Morrison, David Newman and Phil Walker Resigned - Kevin Baker Glasgow Prestwick Airport Limited Lloyd Morrison, Paul Ridley-Smith, William Barr and Steven Fitzgerald Prestwick Airport Limited Lloyd Morrison, David Newman, Steven Fitzgerald, Phil Walker, Paul Ridley-Smith, William Barr PIK MRO Limited Steven Fitzgerald Prestwick Aviation Holdings Limited Steven Fitzgerald Great Holidays Limited Steven Fitzgerald Runway Realisations Limited Steven Fitzgerald Infratil Kent Airport Limited Lloyd Morrison, David Newman, Steven Fitzgerald, Paul Ridley-Smith Infratil Kent Facilities Limited Lloyd Morrison, David Newman, Steven Fitzgerald, Paul Ridley-Smith Flughafen Lübeck GmBH Paul Ridley-Smith, Thorsen Rieß, Sven Schindler, Michael Koch, Mark Weeden, Christopher Chandler, Carly Arnold and Steven Fitzgerald New Zealand Bus Finance Limited Tim Brown, Kevin Baker, Liberato Petagna and Keith Tempest Resigned - Ross Martin New Zealand Bus Limited Tim Brown, Kevin Baker, Liberato Petagna and Keith Tempest Resigned - Ross Martin Transportation Auckland Corporation Limited Allan Cannell, Warren Fowler, Scott Thorne, Bruce Emson and Ian Turner Resigned - Treena Martin, Ross Martin and William Rae Wellington City Transport Limited Allan Cannell, Warren Fowler, Scott Thorne, Bruce Emson and Ian Turner Resigned - Ross Martin and William Rae North City Bus Limited Allan Cannell, Bruce Emson, Scott Thorne, Warren Fowler and Ian Turner Resigned - Treena Martin, Ross Martin and William Rae Cityline (NZ) Limited Allan Cannell, Warren Fowler, Scott Thorne, Bruce Emson and Ian Turner Resigned - Treena Martin, Ross Martin and William Rae Auckland Integrated Ticketing Limited William Dalbeth, Charles Inwards, Andrew Ritchie, Ian Turner and Douglas Hudson Resigned - Treena Martin Fullers Group Limited Ross Martin, Scott Thorne and Bruce Emson Resigned - George Hudson , Keith Johnston, William Rae and Ian Turner Wellington Integrated Ticketing Limited Treena Martin and Ian Turner Resigned - Joanne Copland and Kerry Waddell Infratil Energy Australia Pty Limited Bruce Harker, Darryl Flukes, Kevin Baker, Roger Crawford and Marko Bogoievski. Resigned - Lloyd Morrison Wellington International Airport Steven Fitzgerald, Tim Brown, Paul Ridley-Smith, Denis Thom and Kerry Prendergast Resigned - Lloyd Morrison i-site Limited Simon Draper, Michael Basher and Paul Ridley-Smith Victoria Electricity Pty Limited Bruce Harker, Vaughan Busby, Kevin Baker, Marko Bogoievski, Simon Draper and Roger Crawford Resigned - Donald Cheesman and Stephen Eskrigge Direct Connect Pty Limited Simon Draper and Paul Forsyth Resigned - Donald Cheesman and Stephen Eskrigge South Australia Electricity Pty Limited Simon Draper and Paul Forsyth New South Wales Electricity Pty Limited Simon Draper and Paul Forsyth Queensland Electricity Pty Limited Simon Draper and Paul Forsyth VE Telecommunications Pty Limited Simon Draper and Paul Forsyth Emagy Pty Limited Darryl Flukes and Paul Forsyth Perth Energy Pty Limited Paul Forsyth, Darryl Flukes, Rodney Jones and Ky Cao Western Energy Pty Limited Darryl Flukes and Ky Cao WA Power Exchange Pty Limited Darryl Flukes and Ky Cao Infratil Energy Group Pty Limited Paul Forsyth TrustPower Limited Keith Tempest, Bruce Harker, Michael Cooney, Sam Knowles and Geoffrey Swier Resigned - Harold Titter Tararua Wind Power Limited Keith Tempest, and Michael Cooney Resigned - Harold Titter TrustPower Metering Limited Keith Tempest and Bruce Harker Waikaremoana Power Limited Keith Tempest, Rangi Manuel and Tamaroa Nikora Cobb Power Limited Michael Cooney and Keith Tempest Resigned - Harold Titter TrustPower Insurance Limited Keith Tempest and Jeremy Schultz

88 Picking the trends... New Zealand Exchange and Statutory Information

Company Directors of Subsidiary TrustPower Australia (New Zealand) Limited Keith Tempest and Michael Cooney Pulse Business Solutions Limited Keith Tempest Snowtown Wind Farm Pty Limited Keith Tempest and Jeremy Schultz TrustPower Australia (New Zealand) Limited Keith Tempest TrustPower Metering Limited Keith Tempest and Bruce Harker Bay Energy Limited Keith Tempest Paehinahina Mourea Geothermal Limited Keith Tempest Taheke Geothermal Limited Keith Tempest TrustPower Australia Holdings Pty Limited Keith Tempest Sellicks Hill Wind Farm Pty Limited Keith Tempest and Jeremy Schultz Sellicks Hill / Myponga Wind Farm Pty Limited Keith Tempest and Jeremy Schultz Northwest Auckland Airport Tim Brown and Simon Draper Snapper Services Limited Paul Ridley-Smith and Kerry Waddell Directors Fees paid by subsidiaries (not otherwise disclosed)

Director of Subsidiary Company Currency Denis Thom Wellington International Airport Limited NZD 44,000 Tim Brown Wellington International Airport Limited NZD 42,500 Paul Ridley-Smith Wellington International Airport Limited NZD 37,500 Kerry Prendergast Wellington International Airport Limited NZD 37,500 Kevin Baker Infratil Airports Europe Limited GBP 16,667 Paul Ridley-Smith Infratil Airports Europe Limited GBP 25,000 Phil Walker Infratil Airports Europe Limited GBP 25,000 William Barr Glasgow Prestwick Airport Lmited GBP 25,000 Kevin Baker NZ Bus Limited and NZ Bus Finance Limited NZD 35,000 Keith Tempest NZ Bus Limited and NZ Bus Finance Limited NZD 35,000 Liberato Petagna NZ Bus Limited and NZ Bus Finance Limited NZD 35,000 Tim Brown NZ Bus Limited and NZ Bus Finance Limited NZD 35,000 Keith Johnston Fullers Group Limited NZD 55,000 George Hudson Fullers Group Limited NZD 63,000 Ross Martin Fullers Group Limited NZD 94,000 Roger Crawford Victoria Electricity Pty Limited AUD 15,000 Bruce Harker Victoria Electricity Pty Limited AUD 40,000 Ronald Carter TrustPower Limited NZD 75,000 Harold Titter* TrustPower Limited NZD 314,723 Michael Cooney TrustPower Limited NZD 65,000 Geoffrey Swier TrustPower Limited NZD 98,352 Bruce Harker TrustPower Limited NZD 130,000 Sam Knowles TrustPower Limited NZD 36,750 Bruce Harker Infratil Energy Australia Pty Limited AUD 25,000 Darryl Flukes Perth Energy Pty Limited AUD 70,000 Paul Forsyth Perth Energy Pty Limited AUD 35,000 Rodney Jones Perth Energy Pty Limited AUD 35,000 Paul Ridley-Smith Snapper Services Limited NZD 50,000 Kerry Waddell Snapper Services Limited NZD 7,500 * Harold Titter resigned as a Director of the Company and its subsidiaries on 26 July 2007. Mr Titter’s remuneration includes the payment of a retirement allowance of $270,000 previously approved by shareholders. No other benefits have been provided by the Company or its subsidiaries to a Director for services as a Director or in any other capacity. No loans have been made by the Company or its subsidiaries to a Director nor has the Company or subsidiaries guaranteed any debts incurred by a Director.

Infratil Annual Report 89 New Zealand Exchange and Statutory Information

Employee remuneration Donations During the year ended 31 March 2008 the following number of The Company made donations of $255,000 during the year ended employees received remuneration of at least $100,000. 31 March 2008 (2007 $5,494). Number of employees Auditors

Remuneration band 2008 2007 It is proposed that KPMG will be automatically reappointed at the annual $100,000 to $110,000 25 13 meeting pursuant to section 200(1) of the Companies Act 1993. $110,001 to $120,000 23 9 New Zealand Exchange Waivers $120,001 to $130,000 26 4 As at 31 March 2008, the Company held one waiver from the $130,001 to $140,000 8 8 New Zealand Exchange. This waiver is from Listing Rule 7.3.2 (b) and $140,001 to $150,000 6 5 permits the issue of Convertible Infrastructure Bonds up until $150,001 to $160,000 7 6 30 August 2008. $160,001 to $170,000 4 3 Credit rating $170,001 to $180,000 11 3 The Company does not have a credit rating. Wellington International $180,001 to $190,000 5 1 Airport Limited has a credit rating issued BBB+/A2 stable. $190,001 to $200,000 7 1 Shareholder information $200,001 to $210,000 6 3 Substantial Security Holders: $210,001 to $220,000 3 2 $220,001 to $230,000 1 3 The following information is pursuant to Section 26(1) of the Securities Markets Act 1988. According to notices given under the Securities $230,001 to $240,000 2 1 Markets Act 1988, the following persons were substantial security $240,001 to $250,000 2 1 holders in the Company as at 20 May 2008. $250,001 to $260,000 1 - $260,001 to $270,000 1 - Ordinary Shares Securities % $270,001 to $280,000 1 - Utilico Investment Trust plc 85,227,508 19.2 $280,001 to $290,000 1 - H.R.L. Morrison Family Trust 33,908,404 7.6 $290,001 to $300,000 - - The total number of voting securities of the Company on issue as at $300,001 to $310,000 1 1 20 May 2008 were 443,410,954 fully paid ordinary shares, and 88,008,061 $310,001 to $320,000 1 - partly paid shares which have an entitlement to 50% voting rights. $330,001 to $340,000 1 - $340,001 to $350,000 1 1 Partly Paid Shares Securities % $350,001 to $360,000 1 1 Utilico Investment Trust plc 17,045,501 19.4 $360,001 to $370,000 - - H.R.L. Morrison Family Trust 6,781,681 7.7 $370,001 to $380,000 - 1 Accident Compensation Corporation 8,934,648 10.15 $400,001 to $410,000 1 - $420,001 to $430,000 - - $460,001 to $470,000 - 1 $470,001 to $480,000 1 - $480,001 to $490,000 1 - $530,001 to $540,000 1 - $540,001 to $550,000 - 1 $550,001 to $560,000 - $560,001 to $570,000 1 2 $960,001 to $969,000 1 - $2,030,001 to $2,040,000 - 1* * amount includes other benefits including one-off incentive and compensation payments.

90 Picking the trends... New Zealand Exchange and Statutory Information

Twenty Largest Shareholders (ordinary shares) Twenty Largest Shareholders (partly paid) as at 20 May 2008 as at 20 May 2008 National Nominees New Zealand Limited 73,305,417 National Nominees New Zealand Limited 20,732,774 ANZ Nominees Limited <67248 A/C> 66,589,594 Accident Compensation Corporation 8,934,648 Hettinger Nominees Limited 17,373,598 ANZ Nominees Limited 5,057,741 New Zealand Superannuation Fund Nominees Limited 12,242,981 Hettinger Nominees Limited 3,474,720 Custodial Services Limited <3 A/C> 2,965,688 Custodial Services Limited <3 A/C> 11,042,796 Norwich Union Life Insurance (Nz) Ltd - Main Fund 1,790,314 HSBC Nominees (New Zealand) Limited 9,903,400 Bell Investment A/C 1,531,904 Citibank Nominees (NZ) Ltd 7,828,946 Citibank Nominees (NZ) Ltd 1,297,169 Tea Custodians Limited 6,954,432 Hsbc Nominees (New Zealand) Limited 1,106,956 Craig Leonard Heatley + David Mark Tetro + Hayley 6,468,096 Jml Capital Limited 937,079 Maree Pyle Tea Custodians Limited 928,672 Jml Capital Limited 4,628,036 Custodial Services Limited <2 A/C> 859,132 Custodial Services Limited <2 A/C> 4,359,335 NZGT Nominees Ltd 713,670 FNZ Custodians Limited 3,828,389 Forsyth Barr Custodians Ltd <1 Nrl A/C> 683,958 Forsyth Barr Custodians Ltd <1 Nrl A/C> 3,503,786 HSBC Nominees (New Zealand) Limited 682,772 Amp Investment Strategic Equity Growth Trust Fund 3,288,412 AMP Investment Strategic Equity Growth Trust Fund 676,600 Premier Nominees Limited HSBC Nominees (New Zealand) Limited 3,153,337 NZ Guardian Trust Investment Nominees Limited 638,568 NZ Guardian Trust Investment Nominees Limited 3,015,932 Guardian Trust Investment Nominees (Rwt) Limited 594,073 Accident Compensation Corporation 2,770,433 Custodial Services Limited <1 A/C> 578,183 NZGT Nominees Ltd 2,329,609 In the above table, the shareholding of New Zealand Central Securities Forsyth Barr Custodians Ltd <1 M A/C> 2,075,261 Depositary Limited [NZCSD] has been re-allocated to the applicable In the above table, the shareholding of New Zealand Central Securities members of NZCSD. Depositary Limited [NZCSD] has been re-allocated to the applicable Spread of Shareholders (partly paid) members of NZCSD. as at 20 May 2008

Spread of Shareholders (ordinary shares) Number of Number of Total partly paid as at 20 May 2008 partly paid shares holders shares held % 1 - 1,000 4,568 2,345,451 2.7 Number of Number of shares holders Total shares held % 1,001 - 5,000 4,361 10,597,302 12.0 1 - 1,000 1,611 1,095,014 0.2 5,001 - 10,000 801 5,709,052 6.5 1,001 - 5,000 5,923 17,239,796 3.9 10,001 - 50,000 400 7,142,830 8.1 5,001 - 10,000 3,171 24,091,033 5.4 50,001 - 100,000 22 1,519,124 1.7 10,001 - 50,000 3,898 82,288,223 18.6 100,001 and Over 30 60,694,302 69.0 50,001 - 100,000 334 23,182,820 5.2 TOTAL 10,182 88,008,061 100.0 100,001 and Over 129 295,514,068 66.7 TOTAL 15,066 443,410,954 100.0

Infratil Annual Report 91 New Zealand Exchange and Statutory Information

Twenty Largest Warrant holders as at 20 May 2008 Twenty Largest Infrastructure Bondholders (Series 10,11,11b,12,13,15,20 and PIIBs) as at 20 May 2008 ANZ Nominees Limited <67248 A/C> 6,719,759 National Nominees New Zealand Limited 5,872,810 Fnz Custodians Limited 43,739,380 Hettinger Nominees Limited 2,104,832 Custodial Services Limited <3 A/C> 36,813,889 MFL Mutual Fund Limited 2,034,530 Custodial Services Limited <2 A/C> 15,927,040 Ohariu Investments Limited 1,760,428 Private Nominees Limited 12,709,300 Custodial Services Limited <3 A/C> 1,632,713 Custodial Services Limited <1 A/C> 7,986,000 Forsyth Barr Custodians Ltd <1 Nrl A/C> 948,098 Asb Nominees Limited <677680 A/C> 7,723,380 Tod Rutter 813,550 Bbb Nominees Limited 7,236,450 JML Capital Limited 589,843 Tappenden Holdings Limited 7,000,000 Custodial Services Limited <2 A/C> 580,751 Forsyth Barr Custodians Ltd <1 M A/C> 6,224,266 PP & KA Caughey Family A/C 557,000 Investment Custodial Services Limited 6,154,500 Investment Custodial Services Limited 543,963 Tea Custodians Limited 5,000,000 Peter Muir 500,000 Anz Nominees Limited <67248 A/C> 4,000,000 FNZ Custodians Limited 427,728 Premier Nominees Ltd - Armstrong Jones Secure 3,452,800 Accident Compensation Corporation 343,358 Income Fund Guardian Trust Investment Nominees (Rwt) Limited 328,428 Custodial Services Limited <4 A/C> 3,376,200 Feng Chen 306,739 Forsyth Barr Custodians Ltd <1l A/C> 2,972,079 ASB Nominees Limited <127956 A/C> 156,000 Asb Nominees Limited <127956 A/C> 2,500,000 Portfolio Custodian Limited 144,160 Northland Regional Council 2,350,000 Agra Nominees Limited 132,796 New Zealand Methodist Trust Association 2,000,000 In the above table, the shareholding of New Zealand Central Securities Southern Cross Medical Care Society 2,000,000 Depositary Limited [NZCSD] has been re-allocated to the applicable Rotoruatrust Perpetual Capital Fund Limited 1,662,000 members of NZCSD. In the above table, the shareholding of New Zealand Central Securities Spread of Warrant holders as at 20 May 2008 Depositary Limited [NZCSD] has been re-allocated to the applicable Number of Total warrants members of NZCSD. Number of warrents holders held % Spread of Infrastructure Bondholders 1 - 1,000 8,881 4,370,486 43.2 (Series 10,11,11b,12,13,15,20 and PIIBs) as at 20 May 2008 1,001 - 5,000 9,301 20,071,040 45.2 5,001 - 10,000 1,413 10,068,239 6.9 Number of Total shares Number of bonds holders held % 10,001 - 50,000 813 16,175,126 4.0 1 - 1,000 2 2,000 - 50,001 - 100,000 81 5,955,312 0.4 1,001 - 5,000 1,946 9,657,168 10.5 100,001 and Over 86 82,120,762 0.3 5,001 - 10,000 4,244 40,105,924 22.9 TOTAL 20,575 138,760,965 100.0 10,001 - 50,000 10,444 291,080,002 56.5 50,001 - 100,000 1,362 112,135,004 7.4 100,001 and Over 501 295,794,365 2.7 TOTAL 18,499 748,774,463 100.0

92 Picking the trends... New Zealand Exchange and Statutory Information

Directors’ Holding Office Entries In the Interest Register

The Company’s Directors are: Statement of Directors’ Interests (as at 31 March 2008) • H R L Morrison The information below is given pursuant to the New Zealand Exchange • A Y Muh Listing Rules. Beneficial Non beneficial • D A R Newman (Chairman) interests interests • H J D Rolleston 2008 2008 • D P Saville Ordinary Shares • M Tume H R L Morrison 25,413,718 8,494,686 Messrs D A R Newman and H R L Morrison are also Directors of Infratil D A R Newman 121,478 - Investments Limited, Infratil Securities Limited, Infratil 1998 Limited, D P Saville 8,772 101,762,314 NZ Airports Limited, Infratil Finance Limited, Infratil Ventures Limited, H J D Rolleston 7,998 - Infratil UK Limited, Infratil Australia Limited, Swift Transport Limited, A Muh 16,346 - Infratil Gas Limited, Infratil No 1 Limited, Infratil Infrastructure Property Warrants (IFTWB) Limited, Infratil Airports Europe Limited, Glasgow Prestwick Airport H R L Morrison 6,352,504 2,829,178 Limited, Prestwick Airport Limited, Infratil Kent Airport Limited, Infratil Kent Facilities Limited. Mr H R L Morrison is also a Director of Flughafen D A R Newman 20,434 - Lübeck GmBH, and Auckland International Airport Limited. D P Saville - 23,932,462 Mr D A R Newman is also a Director of Wellington International Airport. H J D Rolleston - - The Company considers that Messrs D A R Newman, H JD Rolleston, A Y Muh - - A Y Muh and M Tume are, and Messrs H R L Morrison, and D P Saville Warrants (IFTWC) are not, Independent Directors in terms of the New Zealand Exchange H R L Morrison 3,157,172 1,111,837 Listing Rules. D A R Newman 14,191 - D P Saville 877 11,979,477 H J D Rolleston 800 - A Y Muh 304 - Partly Paid Ordinary Shares H R L Morrison 5,082,744 1,698,937 D A R Newman 24,296 - D P Saville 1,754 20,722,463 H J D Rolleston 1,600 - A Y Muh 608 -

Infratil Annual Report 93 New Zealand Exchange and Statutory Information

Dealing in Securities: The following table shows transactions recorded in respect of those securities during period ended 31 March 2008:

No of No of securities Cost/ securities Cost/ Bought/ (Proceeds) Bought/ (Proceeds) Director (sold) $ Director (sold) $ H R L Morrison – Beneficial D A R Newman Ordinary shares split 1:1 8 June 2007 12,706,859 - Shares acquired on 30 May 2007 1,519 9,984 Warrants (B) split 1:1 8 June 2007 3,079,001 - Ordinary shares split 1:1 8 June 2007 60,739 - Warrants (C) issue 11 June 2007 3,157,172 - Warrants (B) split 1:1 8 June 2007 10,217 - Partly paid ordinary shares issued Warrants (C) issue 11 June 2007 14,191 - 3 October 2007 5,082,744 5,082,744 Disposal of bonds (10,000) (9,698) Warrants (B) acquired 16 January 2008 194,502 221,732 Partly paid ordinary shares issued H R L Morrison – Non beneficial 3 October 2007 24,296 24,296 Ordinary shares split 1:1 8 June 2007 4,247,343 - H J D Rolleston Warrants (B) split 1:1 8 June 2007 1,311,840 - Shares acquired on 30 May 2007 1,519 9,984 Warrants (C) issue 11 June 2007 1,111,837 - Ordinary shares split 1:1 8 June 2007 3,999 - Partly paid ordinary shares issued Warrants (C) issue 11 June 2007 800 - 3 October 2007 1,698,937 1,698,937 Partly paid ordinary shares issued Warrants (B) acquired 16 January 2008 205,498 234,268 3 October 2007 1,600 1,600 D P Saville – Beneficial A Y Muh Ordinary shares split 1:1 8 June 2007 4,386 - Shares acquired on 30 May 2007 1,519 9,984 Warrants (C) issue 11 June 2007 877 Ordinary shares split 1:1 8 June 2007 1,519 - D P Saville – Non beneficial Warrants (C) issue 11 June 2007 304 - Ordinary shares split 1:1 8 June 2007 50,881,157 - Partly paid ordinary shares issued 3 October 2007 608 608 Warrants (B) split 1:1 8 June 2007 11,516,231 - Shares acquired on 30 September 2007 3,479 10,124 Warrants (C) issue 11 June 2007 12,479,477 - Shares acquired on 21 December 2007 4,400 12,716 Warrants (B) acquired 26-30 July 2007 500,000 728,865 Shares acquired on 27 March 2008 5,429 10,917 Warrants (C) disposed 26-30 July 2007 500,000 372,790 Rights to partly paid ordinary shares purchased 10-21 September 2007 370,000 230,774 Use of Company Information: Partly paid ordinary shares issued During the period the Board has received no notices from any Director of 3 October 2007 20,352,463 20,352,463 the Company or its subsidiaries requesting to use company information D F Caygill received in their capacity as Director, which would not otherwise have been available to them. Shares acquired on 30 May 2007 1,519 9,984.37 Ordinary shares split 1:1 8 June 2007 9,653 - Warrants (C) issue 11 June 2007 1,931 - Disposal of ordinary shares in October 2007 (19,306) (57,398) Disposal of Warrants (C) in October 2007 (1,931) (1,332) Disposal of rights to partly paid shares (3,862) (3,476)

94 Picking the trends... New Zealand Exchange and Statutory Information

Other Interests: Remuneration of Directors

The following are entries in the Company’s interest register as at Directors’ remuneration in respect of the year ended 31 March 2008 was 31 March 2008: as follows:

Director Register Parent Parent 2008 2007 H R L Morrison Director of TrustPower Limited Chairman of Infratil Airports Europe Limited D A R Newman 149,700* 135,000* Chairman of H.R.L. Morrison & Co Group Limited H R L Morrison 74,900* 67,500* Chairman of H.R.L. Morrison & Co (Australia) Pty Limited D P Saville 66,500 60,000 Chairman of H.R.L. Morrison & Co Limited D F Caygill 38,800 69,000 Chairman of Morrison & Co Infrastructure Management Limited. H J D Rolleston 74,900* 67,500* Director of nzxsports.com Limited. J K Peterson 21,000 65,625 Director of Hettinger Nominees Limited Director of Morse Media Limited A Y Muh 66,500 10,000 Director Auckland International Airport Limited M Tume 38,600* - D A R Newman Chairman of Wellington International Airport Limited * Includes GST Director of Infratil Airports Europe Limited Chairman of Austral Pacific Energy Ltd D A R Newman also received Director’s fees of $68,700 (2007: $68,700) Member of the Board of the Guardians of the from Wellington International Airport Limited and GBP 30,000 New Zealand Superannuation Fund (2007: GBP 30,000) from Infratil Airports Europe Limited and Mr H R L Chairman of Loyalty New Zealand Limited Morrison also received Director’s fees of $23,000 (2007: $36,300) from D P Saville Director of VIX International Limited Wellington International Airport Limited, GBP 37,500 (2007: GBP 37,500) Director of H.R.L. Morrison & Co Group Limited from Infratil Airports Europe Limited and $56,000 (2007: $56,000) from Director of Ingot Capital Management Pty Limited TrustPower Limited. Director of ERG Limited No other benefits have been provided by the Company or its H J D Rolleston Director of Property for Industry Limited subsidiaries to a Director for services as a Director or in any other Director of Broadway Industries Limited capacity. No loans have been made by the Company or its subsidiaries Director of SKY Television Network Limited to a Director nor has the Company or subsidiaries guaranteed any debts Chairman of Simmonds Lumber Pty Limited incurred by a Director. Chairman of ANZCRO Pty Limited Chairman of Craigpine Timber Limited Chairman of Matrix Security Group Ltd Director of Asset Management Limited Director of Stray Limited Director Media Metro Limited Chairman Fraser Macandrew Ryan Chairman Murray & Co. Limited A Y Muh Director of AT Asset Management (Asia Pacific) Limited M Tume Chair – Ngäi Tahu Capital Ltd Director – Ngäi Tahu Holdings Corporation Ltd Director – Long Board Limited Director – Ascend Capital Limited Director – LTFT Holdings Limited Director – Risk Reinsurance Limited Director – Transpower Finance Limited Director – Transpower New Zealand Limited Director – Welltest Holdings Limited Director – Ngäi Tahu Property Ltd Director – Ngäi Tahu Seafood Ltd Director – Ngäi Tahu Tourism Ltd Member of the Board of the Guardians of NZ Superannuation Fund Director – New Zealand Refining Company Ltd

Infratil Annual Report 95 Comparative Financial Review

2008* 2007* 2006 2005 2004 2003 2002 2001 2000 1999 $Millions $Millions $Millions $Millions $Millions $Millions $Millions $Millions $Millions $Millions Financial Performance (31 March year ended) Operating revenue 1,346.7 655.1 301.0 172.0 148.7 142.5 120.9 68.2 55.6 20.3 Earnings before interest, depreciation taxation and investment realisations 315.9 157.1 77.6 63.8 63.6 59.4 35.1 25.0 19.0 15.2 Net gain/(loss) on financial derviatives 2.9 22.7 ------Investment realisations/(impairments) (15.4) 43.7 0.2 22.7 2.2 20.0 28.0 11.6 22.2 11.4 Net surplus after taxation and minorities (1.7) 68.2 8.0 45.0 22.5 28.1 22.6 16.5 34.2 26.6 Dividends paid and declared 28.6 27.4 23.0 26.9 16.7 5.8 13.3 17.6 18.3 15.1 Financial position Represented by Investments 212.3 262.5 475.6 430.2 377.1 247.9 218.4 161.9 203.4 183.9 Non currents assets 3,662.9 3,311.5 1,114.1 484.4 478.1 492.9 522.9 413.3 288.7 225.1 Current assets 524.2 313.6 115.2 87.9 59.9 51.0 57.1 37.9 7.8 9.3 Total assets 4,399.4 3,887.6 1,704.9 1,002.5 915.1 791.8 798.4 613.2 499.9 418.3 Current liabilities 618.6 388.7 332.7 63.1 22.2 20.2 19.5 25.6 9.5 43.7 Non-current liabilities 1,561.6 1,242.5 97.2 117.4 147.1 176.3 188.0 213.5 162.5 150.5 Infrastructure bonds 748.8 730.0 481.6 233.9 154.6 170.6 170.6 150.6 121.5 43.6 Total liabilities 2,929.0 2,361.2 911.5 414.5 324.0 367.1 378.1 389.7 293.4 237.8 Net assets 1,470.4 1,526.4 793.4 588.1 591.1 424.7 420.3 223.5 206.5 180.5 Outside equity interest in subsidiaries 737.1 717.0 127.6 57.4 50.3 95.3 100.3 61.7 38.0 39.3 Equity 733.3 809.4 665.8 530.7 540.8 329.4 320.0 161.7 168.5 141.2 Total equity 1,470.4 1,526.4 793.4 588.1 591.1 424.7 420.3 223.5 206.5 180.5 Dividends per share 6.25c 12.50c 10.50c 12.00c 9.00c 3.00c 7.00c 9.25c 9.25c 8.00c Dividends per share (adjusted for share split) 6.25c 6.25c 5.25c 6.00c 4.50c 1.50c 3.50c 4.63c 4.63c 4.00c Shares on issue (000s) 219,671 218,939 219,299 226,685 183,414 185,872 185,808 189,328 189,320 190,763 Shares on issue (000s) (adjusted for share split) 443,408 439,570 438,838 439,198 446,584 403,313 405,771 405,707 409,227 409,219 Partly paid instalment shares 88,008 ------

* Prepared in accordance with New Zealand Equivalents to International Financial Reporting Standards (‘NZIFRS’).

96 Picking the trends... Directory

Directors Bankers D A R Newman (Chairman) ANZ National Bank H R L Morrison 215-229 Lambton Quay A Y Muh Wellington H J D Rolleston D P Saville Bank of New Zealand M Tume State Insurance Tower 1 Willis Street Wellington Registered Office 97 The Terrace Commonwealth Bank of Australia PO Box 320 135 Albert Street Wellington Auckland Telephone: 04 473 3663 Internet address Hong Kong and Shanghai Banking Corporation http://www.infratil.com HSBC Tower 195 Lambton Quay Wellington Manager Morrison & Co Infrastructure Management Limited Westpac Banking Corporation 97 The Terrace 188 Quay Strreet PO Box 1395 Auckland Wellington Telephone: 04 473 2399 Facsimile: 04 473 2388 Internet address http://www.hrlmorrison.com

Share Registrar Link Market Services 138 Tancred Street PO Box 384 Ashburton Telephone: 03 308 8887 E-mail: [email protected]

Auditor KPMG Maritime Tower 10 Customhouse Quay PO Box 996 Wellington

Infratil Annual Report 97 calendar

Final Dividend Paid 16 June 2008

$1 partly-paid share instalment 14 July to 8 August 2008

Annual Meeting 18 August 2008

Infratil Update Publication September 2008

Half Year End 30 September 2008

Release of Interim Report December 2008

Infratil Update Publication March 2009

Financial Year End 31 March 2009

UPDATES

Infratil produces Update newsletters on matters of particular interest to shareholders and bondholders. These are all available from the website. Recent editions have been:

In February Infratil held its first “Investor Day” for investment analysts and institutional fund managers to March 2008 meet the Infratil team and receive briefings on Infratil’s businesses. This Update provides a summary of the presentations given that day.

Wellington’s links with the world. This Update looks at Wellington Airport’s work to encourage airlines to December 2007 provide direct links with Asia and America, why airlines can now offer this service, and why the Wellington aviation market would support such a service.

Going green is not expensive for New Zealand electricity consumers. In this Update Infratil looks at how September 2007 New Zealand’s electricity prices compare with Australia’s and how their relativities could alter as both coutnries move to a world that includes pricing of carbon.

Infratil’s public transport operations are now renamed NZ Bus: NZ Bus is the leading provider of public March 2007 transport in Auckland and Wellington.

Transtasman Air Market: Wellington Airport - taking an active role in the debate over the proposed airline cartel. September 2006

Public Transport: This Update reviews Infratil’s $252 million investment into Auckland and Wellington public March 2006 transport. It is critical for Infratil to be the public transport operator with the lowest cost and best and most liked service

Terminal Upgrade: This Update reviews Wellington Airport’s intended International Terminal development, September 2005 long-haul services to Wellington, the Tasman airfare “bloodbath”, and Infratil’s investment in Kent International Airport

Renewable Energy: This Update following the implementation of the Kyoto Protocol on 16 February, looks at March 2005 the impact of living in a carbon priced world.

CORPORATE AWARDS

Wellington Chamber of Commerce: Achievement Award for contribution to the development of Wellington Institute of Financial Professionals New Zealand (INFINZ) finalist: Best Corporate Communicator 2003, 2004, 2005, 2006, 2008. Best Debt Deal 2007. Best Corporate Treasury 2007, 2008 New Zealand Shareholders’ Association: Best and Fairest 2004 Euromoney: Asia and Pacific Most Useful and Informative Website Runner-up 2004 Finance Asia: Best New Zealand Deal 2007 Deloittes/Management Magazine Company of the Year 2007

98 Picking the trends...