Orion New Zealand Limited Annual Report FY16 16 “Electricity Is Becoming More and More Relevant to Us As a Business

Orion New Zealand Limited Annual Report FY16 16 “Electricity is becoming more and more relevant to us as a business. Working with Orion and Air New Zealand we can save many millions of tonnes of carbon going into the atmosphere every year by using electricity in a smart way.”

— Malcolm Johns, CEO Christchurch International Airport 2016 highlights 4

Chairman and Chief Executive Officer’s report 6

Our values 14

Financial performance 18

The power of relationships 24

The power of our network 26

The power of keeping safe 30 Annual Report FY16

The power of community 32

The power of our people 34

Board of directors 38

Audited financial statements 40

Corporate governance statement 72

Directory 80 2016 highlights

Financial

$179m $60m electricity distribution $12m network operating $4m revenue expenses

$53m $153m profit after tax $29m dividends and share $97m buy-back

$92m $228m group capital expenditure $5m interest bearing debt $143m

$1,122m group assets $38m Network 195k customer 4k connections Annual Report FY16 3.3k gigawatt hours of 19 electricity delivered

618MW network maximum 28 demand 2016 highlights Chairman and Chief Executive Officer’s report Chairman and Chief Executive Officer’s report

Connecting communities, igniting innovation.

Jeremy Smith Rob Jamieson Chairman Chief Executive Officer Our vision is to connect communities and ignite innovation. We aim to support our customers to achieve their goals and aspirations. Every moment of every day, our 195,000 customers rely on electricity delivered by the Orion network – across 8,000 square kilometres in Annual Report FY16 Christchurch and central Canterbury. Keeping this vital infrastructure operating safely and sustainably all day, every day is our top priority and one that requires the expertise and dedication of our staff. Chairman and Chief Executive Officer’s report

The future – and our changing landscape

We strive to provide a safe, reliable and cost- • cost reflective network pricing. This provides effective electricity network service providing a solid foundation of peak-demand pricing customers the capacity they need when they for large businesses and off-peak pricing for need it. We remain focussed on restoring the homes. It’s expensive and resource intensive resilience and reliability of our network by to build additional networks to meet short 2019 and we’re continuing to support the demand peaks – so pricing that rewards wider post-quake recovery and rebuild. customers to shift demand away from peak periods adds value for Orion and As part of our strategy we look for ways to create our customers value through maintaining the relevance of our core network through a deep understanding of • encouraging the uptake of electric vehicles customer technology trends. (EVs). With our high level of renewable electricity generation, New Zealand is well Technology will continue to shape and influence positioned to deliver substantially reduced our future. Whether it’s new technology on our carbon emissions by switching to electric network or in the home, it’s an exciting time for vehicles. In support of the long-term benefits our customers and the wider industry. We’re an electric vehicle fleet would deliver to the responding to these new technologies and country, environmentally and economically, innovations and adapting our service in a variety Orion has made a commitment to better of ways. Our initiatives include: enable the uptake of EVs in our region by: • a comprehensive assessment of how - taking the lead by installing five fast emerging technologies might impact our chargers during this coming year, along business here in Canterbury and when that with a number of level-2 chargers. Our might occur. We don’t see a ‘cliff’ where our view is that access to charging stations network becomes redundant in the decades will reduce range anxiety for local EV ahead. On the contrary, our network remains drivers and promote uptake vital for customers although it may be used in some different ways - purchasing seven plug-in hybrid vehicles for Orion’s operational fleet

- continued sponsorship of Evolocity – an annual competition for young people to design, build and race their own EVs. Annual Report FY16

“We are working harder to better understand the requirements of our customers as we power a vibrant and energised region, now and into the future. We have made significant steps in this area and are challenging ourselves to do even better in the future.” Chairman and Chief Executive Officer’s report

We are seeing a small but steadily increasing number of solar arrays on our network, representing less than 1% in total of our maximum network demand. We expect that customer-owned batteries will grow in popularity.

We play a key role in helping customers understand their current and future energy choices. We appreciate that people choose emerging technologies, such as solar panels, for a number of reasons and we encourage all customers to complete due diligence, and to understand the options available.

As part of our long-term commitment to energy efficiency, we are proud sponsors of Community Energy Action, who continue to provide energy efficiency advice to customers and insulate homes.

Energy efficiency not only helps our customers reduce their power bills and have warmer and healthier homes, it also reduces New Zealand’s electricity peaks, and therefore our levels of expenditure. Energy efficiency initiatives have the added advantage of complementing New Zealand’s existing renewable sources of electricity. Nationally, 80% of electricity is from renewable sources with almost all the electricity on the Orion network originating from the South Island’s own hydro power stations. “Nationally, 80% of electricity is from renewable sources with almost all the electricity on the Orion network originating from the South Island’s own hydro power stations.” Annual Report FY16

80% “Whether it’s new technology on our network or in the home, it’s an exciting time for our customers and the wider industry.” Annual Report FY16 Our values Connect We build relationships with our customers and stakeholders so we can better power, energise and connect our communities. Create We are big picture thinkers and our innovation and agility enable us to identify opportunities, exercise sound judgement and learn continuously. Collaborate We work together building on our strengths, our initiative and our commitment to ensure our communities trust us, our business is successful and our people and environment are valued. Annual Report FY16 “It’s in our community’s best interest to have a vibrant, buzzy city and Orion plays such an integral part in that.”

— Philip Carter, Property Developer Annual Report FY16 Financial performance Financial performance Annual Report FY16

We are pleased to report another year of strong This year’s profit of $53m is not directly financial performance. We have surpassed our comparable with last year’s due to: Statement of Intent profit targets and met our • $24m of revenue (after tax) last year for regulated network reliability limits. our final quake insurance settlement Orion’s long-term financial sustainability benefits • a new $5m impairment expense (after tax) the local community through our shareholders – this year. We now recognise this impairment the Christchurch City Council and Selwyn District because capital contribution receipts reduce Council. our regulatory asset value, and this in turn We’re therefore pleased to have been able reduces our future regulatory price resets. to use the strength of our balance sheet to Adjusting for these differences, this year’s pay the following to our shareholders during profit is $10m above our statement of intent the year: target and virtually the same as last year’s. • $90m via a planned one-off share buy-back This is pleasing, given that we had higher interest expense following our $90m share • $63m via imputed dividends – $15m ahead of buy-back in September. target and $7m ahead of last year. We increased our network maintenance These distributions and our current high spend this year by $1.3m, to $26m, due to: capital expenditure programme mean that our borrowings increased by $143m this year to • a snow storm in June and several wind storms almost $230m. However, with assets valued at • planned maintenance that we had deferred over $1.1 billion and an expected return to more while we focused on our quake recovery normal levels of capital expenditure by 2018, we work and supporting the wider rebuild. believe that our borrowings will remain prudent and sustainable. Connetics continues to contribute strongly to the group’s financial performance. Its profit was close to last year’s, and workloads remain strong. Financial performance

Net profit

2012 $54m

2013 $49m

2014 $50m $100m

* 2015 $83m

2016 $53m

Cash distributions to shareholders

2012 $34m

2013 $32m

2014 $34m $200m

2015 $56m

2016 $153m

*2015 net profit includes a $24 million earthquake insurance settlement. Capital expenditure

2012 $56m

2013 $71m

2014 $84m $100m

2015 $87m

2016 $92m Annual Report FY16

Total assets

2012 $861m

2013 $889m

2014 $1,040m $2b

2015 $1,084m

2016 $1,122m Network maximum demand

618MW

MW 633 592 619 590 Year 2012 2013 2014 2015

Network volumes 3,296GWh

GWh 3,070 3,165 3,162 3,277 Year 2012 2013 2014 2015

Network connections 195k

(000) 191 189 189 191 Year 2012 2013 2014 2015 Annual Report FY16 The power of... The power of relationships We are working harder to better understand the requirements of our customers as we power a vibrant and energised region, now and into the future. We have made significant steps in this area and are challenging ourselves to do even better in the future.

Steps we have taken include:

• reviewing our Christchurch CBD network architecture. We needed to understand what level of resilience and reliability our customers require to help inform the degree of network investment we should make. To do this we conducted an independent phone survey of 380 CBD customers and drilled down further with a focus group of 10 businesses. That feedback was considered in Annual Report FY16 our CBD infrastructure decision-making

• an independent survey of 800 urban and rural residential customers. That gave us valuable insight of their awareness of Orion, perceptions of power price changes, views on network reliability and awareness of and interest in new technologies.

Whether our customers are considering the use of new technologies, or are part of the ongoing post earthquake revitalisation, they need to know that we understand their requirements and are well placed to deliver to them.

Orion doesn’t just provide a network – we give vital advice and support to customers seeking to connect to our network. We work with our customers who are looking into their energy choices. This has been critical in working with our Christchurch developers who have major projects underway in the CBD. We need to fully understand their needs to be able to provide cost-effective energy and network solutions that meet their capacity and reliability requirements.

We’re also there when the going gets tough – whether it’s a storm or a seismic event. We prepare and invest for the worst so our customers can be confident they will have electricity when they need it.

We would like to take this opportunity to thank our stakeholders and customers – your support and collaboration are vital to Orion’s success. The power of...

5 38 115 141 123 36 Years to km circuit kms of high Cable drums Cable joints Cable complete voltage cable used installed terminations installed

Waimakariri

Papanui

McFaddens

Islington (Transpower) The power The power our network of We have completed a number of significant network projects over the last year. The most significant of which is our Northern Loop Cable Project, completed in March 2016. This $60m project is a key element of our post-quake repair and resilience programme that began in the weeks following the February 2011 quake. It is one of the largest and most complex projects delivered by Orion.

The Northern Loop provides us with more options for routing power around and across the city to businesses and homes in case of any future emergency. As well as improving the reliability across our urban network, the new cable will support the significant residential Marshland and business growth in the northern parts of Christchurch since the quakes.

It’s not just the big projects that make a difference for customers, however. We are constantly seeking incremental improvements in our service and operations. We are investing in new technology to more quickly identify and isolate faults in remote Annual Report FY16 rural areas. For example, we are accelerating the installation of a number of smart switches in the Banks Peninsula area that will allow us McFaddens Rawhiti to respond to outages more quickly.

Dallington

Bromley (Transpower) “Orion has been playing a part in a bigger picture than even Orion realise. Orion funds us to be able to give advice out to the community and that advice changes behaviours.”

— Caroline Shone, CEO Community Energy Action Annual Report FY16 The power of... The power of keeping safe Annual Report FY16

Resilient and reliable electricity distribution is vital to keeping our community not only warm but safe.

Safety is all encompassing in the running of the network and involves the safety of our employees, contractors and the public. We encourage all of these parties to take their own safety, and that of their colleagues, seriously, every day. We are pleased to report that Orion staff had no notifiable injuries this year and a reduction in lost time injuries.

Our contractors had two notifiable injuries, and we are working closely with them to improve safety outcomes. It is pleasing to see more information being provided by staff and contractors on near miss events, something we expect to continue under our new processes.

The health of the team at Orion is also important. We have an active wellness programme that engages our people and helps them focus on their individual health and wellbeing. All employees have membership to Tracksuit.inc which provides health and wellbeing research and information on healthy eating, sleep and exercise. Our onsite health checks, health seminars, counselling support and pedometer challenges provide employees with opportunities to actively participate in initiatives to support their own wellbeing. The power of... The power of community Annual Report FY16

We support our local communities through a variety of programmes.

Our long-standing relationship with Community Energy Action (CEA) is our principal partnership with our community. CEA is a charitable trust that provides insulation and energy advice services to the most vulnerable in our community. Its overriding objective is to create warmer, healthier and more energy efficient homes. A recent study showed a 30% reduction in hospital nights for those recipients of CEA’s initiatives. We’re proud to have sponsored and supported CEA for over 20 years and we’re committed to continuing this in the years to come.

We continued to sponsor the Canterbury Rams basketball team, together with the Christchurch Arts Festival and the Chinese Lantern Festival, one of the city’s most popular cultural events. The power of... The power of our people Development of our employees is key to our current and future success. We are proud of the new employees we develop through our Engineering Development Programme, who after a period of time, move into permanent roles within the business. This programme supports us to manage retirements and succession, and the high calibre of these Annual Report FY16 employees may see them as future leaders in our business.

Orion also participates in professional development at the board level through the Aspiring Director programme, an initiative of Christchurch City Holdings Ltd. Connetics also has an intern director, appointed as part of a CCHL and Institute of Directors programme. These are great opportunities for those who are looking to develop their governance capability and we enjoy the fresh perspective they bring to discussions.

Overall, our success is due to the dedication of our employees and contractors and their commitment to delivering a robust, safe and secure network that supports the homes, businesses and industries within the region. Our people will continue to determine our success, both through their skills and capability, and the relationships they have with our customers and our community. As we continue to work to connect, create and collaborate, we build a more agile, responsive workforce who can more readily respond to the changing industry we work in. Our people connect communities and ignite innovation and through them we will achieve our vision. On behalf of the Orion board – thank you.

We would also like to thank our shareholders who have taken a positive and active interest in Orion throughout the year. “Orion has undertaken a significant programme of seismic strengthening, a significant investment in the future, which has paid off enormously. Thank you Orion for future-proofing our city and our region.”

— Lianne Dalziel, Christchurch Mayor Annual Report FY16 Board of directors Board of directors

Jeremy Smith John Austin Dr Nicola Crauford BSc BCom LLB CMInstD BCom LLB MBA CA BSc PhD

Jeremy was appointed as an Orion John was appointed as an Nicola was appointed as an Orion director in August 2013 and chairman Orion director in May 2014. director in August 2014. She has in August 2014. He is also chairman He is a development banker and over 25 years of experience in the of Holmes Group Limited. Jeremy has an infrastructure specialist and has oil, electricity and gas sectors in the broad experience in a variety of senior recently returned to New Zealand UK and NZ, including as a member executive and corporate governance after heading the Pacific Region of Transpower’s executive team and roles. Jeremy was formerly Managing Infrastructure Facility Coordination a director of Genesis Energy. Nicola Director and then a director of Holcim Office of the Asian Development is a director of Watercare Services New Zealand Limited. Before that, he Bank in Sydney. John is a former Limited, the Environmental Protection practiced as a commercial lawyer. executive director of the World Authority, Wellington Water Limited Bank and was a director of the and the Wellington Rural Fire Authority. Asian Development Bank. Nicola chairs GNS Science and is a member of the Local Government Risk Management Agency Establishment Board. She has formerly been chief executive of the Institute of Directors and deputy chief executive of the Institution of Professional Engineers New Zealand. Board of directors Annual Report FY16

Paul Munro Bob Simpson Geoff Vazey BCom CA (PP) CMinstD M.E. FIPENZ CPEng FIET CEng BEng (Hons)

Paul was appointed as an Orion Bob was appointed as an Orion Geoff was appointed as an Orion director in August 2012. He is a director in August 2014. He recently director in April 2009. He is a partner and director at Deloitte retired from Transpower, where he professional director with strong and leads Deloitte’s corporate was chief engineer, and he now commercial and governance finance practice in the South Island. works as a consultant. Bob is a board experience, including 20 years Paul is a director of Central Plains member of New Zealand Engineering involvement in infrastructure at the Water Limited and a member of the Diplomas and the Electricity Engineers’ Ports of Auckland. Geoff is a fellow University of Canterbury Students’ Association. of the Institution of Professional Association Advisory Board. Engineers New Zealand. Audited financial statements Audited financial statements

The board of directors is pleased to present the audited consolidated financial statements of Orion New Zealand Limited and its subsidiaries for the year ended 31 March 2016.

The company’s audited consoidated inancia statements incude ie audited peomance statements

 inancia  neto eiaiity  neto deeopment  enionment  community and empoyment

uthoised o issue on une

o and on eha o the oad o diectos

iecto iecto

Audited consolidated financial statements - Orion New Zealand Limited

ForAudited the consolidatedyear ended financial31 financial March statements statements2016 – -Orion Orion New New Zealand Zealand Limited Limited Audited consolidated financial statements – Orion New Zealand Limited

For the year ended 31 March 2016

Consolidated statement of comprehensive income 43 income…………………………………………………….

Consolidated statement of changes in equity 44

equity…………………………………………………………….. Consolidated statement of comprehensive income 43 Consolidatedincome……………………………………………………. statement of financial position 45 posposition……………………………………………………………… Consolidated statement of changes in equity 44 Consolidatedequity…………………………………………………………….. statement of cash flows 46 floflows……………………………………………………………………….. Consolidated statement of financial position 45 Notes to the consolidated financial statements 48 posposition……………………………………………………………… statstatements…………………………………………………………. Consolidated1. Statement statement of ofaccounting cash flows policies 46 floflows………………………………………………………………………..2. Operating revenues Notes to3. the Operating consolidated expenses financial statements 48 statstatements…………………………………………………………. 1.4. StatementDepreciation, of accountingamortisation policies and other impairment expenses 2.5. OperatingInterest expense revenue s 3.6. OperatingRemuneration expenses of the auditor 4.7. Depreciation,Income tax and amortisation deferred tax and other impairment expenses 5.8. InterestTrade and expense other receivables 9.6. RemunerationInventories of the auditor 10.7. IntangIncomeible tax assets and deferred tax 11.8. Property,Trade and plant other and receivables equipment 12.9. TradeInventories and other payables 13.10. EmployeeIntangible entitlementsassets 14.11. BorrowingsProperty, plant and equipment 15.12. FinancialTrade and instruments other payables 16.13. Shareholders’Employee entitlements equity and $90m share buy-back 17.14. RelatedBorrowings party transactions 18.15. InformationFinancial instruments about subsidiaries 19.16. CommitmentsShareholders’ equity and $90m share buy-back 20.17. ContingentRelated party assets transactions and liabilities 21.18. SignificantInformation events about aftersubsidiaries balance date 19. Commitments 20. Contingent assets and liabilities Performance statement  consolidated financial 63 21. Significant events after balance date

Performance statement  network reliability 64 Performance statement  consolidated financial 63 Performance statement – network development 65 Performance statement  network reliability 64 Performance statement  environment 66 Performance statement – network development 65 Performance statement  community and employment 67 Performance statement  environment 66 Audit report 70 Performance statement  community and employment 67

Audit report 70

Audited consolidated financial statements - Orion New Zealand Limited

udited consolidated financial statements rion ew ealand imited Audited consolidated financial financial statements statements – -Orion Orion New New Zealand Zealand Limited Limited uditedAudited consolidated financial financial statements statements – Orion rion New ew Zealand ealand Limited imited For the year ended 31 March 2016

or the year ended arch 0 For the year ended 31 March 2016 or the year ended arch 0

Consolidated statement of comprehensive income 43 2016 2015 income……………………………………………………. 2016 2015 Notes $000 $000 Consolidated statement of changes in equity 44 Notes $000 $000 equity…………………………………………………………….. Consolidated statement of comprehensive income 43 Consolidated statement of financial position 45 peratin reenues 09 0 income……………………………………………………. peratin reenues 09 0 posposition……………………………………………………………… Consolidated statement of changes in equity 44 Consolidated statement of cash flows 46 equity…………………………………………………………….. peratin epenses 09 0 floflows……………………………………………………………………….. peratin epenses 09 0 Consolidated statement of financial position 45 epreciation amortisation and other impairment epenses 09 9 Notes to the consolidated financial statements 48 epreciation amortisation and other impairment epenses 09 9 posposition……………………………………………………………… arnins before net interest epense and ta statstatements…………………………………………………………. arnins before net interest epense and ta Consolidated1. Statement statement of ofaccounting cash flows policies 46

floflows………………………………………………………………………..2. Operating revenues nterest income 9 Notes to3. the Operating consolidated expenses financial statements 48 nterest income 9 nterest epense stat4.statements………………………………………………… Depreciation, amortisation and other impairment………. expenses nterest epense 1. Statement of accounting policies et chane in fair alue of deriaties epense 9 2.5. OperatingInterest expense revenue s et chane in fair alue of deriaties epense 9 rofit before income ta 00 3.6. OperatingRemuneration expenses of the auditor rofit before income ta 00

4.7. Depreciation,Income tax and amortisation deferred tax and other impairment expenses ncome ta epense 09 0 5.8. InterestTrade and expense other receivables ncome ta epense 09 0 9. Inventories et profit 6. Remuneration of the auditor et profit 10. Intangible assets 7. Income tax and deferred tax 8.11. TProperty,rade and plant other and receivables equipment ther comprehensie income ther comprehensie income 9.12. InventoriesTrade and other payables tems that will not be reclassified to profit or loss tems that will not be reclassified to profit or loss 10.13. IntangEmployeeible entitlementsassets ain on realuation of property plant and equipment 14. Borrowings ain on realuation of property plant and equipment 11. Property, plant and equipment eferred ta epense on realuation of property plant and equipment 15. Financial instruments eferred ta epense on realuation of property plant and equipment 12. Trade and other payables 16. Shareholders’ equity and $90m share buy-back 13. Employee entitlements otal comprehensie income 9 14.17. BorrowingsRelated party transactions otal comprehensie income 9 15.18. FinancialInformation instruments about subsidiaries

16.19. Shareholders’Commitments equity and $90m share buy-back

20. Contingent assets and liabilities 17. Related party transactions 21.Significant events after balance date 18. Information about subsidiaries

19.Commitments

20. Contingent assets and liabilities Performance statement  consolidated financial 63 21. Significant events after balance date

Performance statement  network reliability 64

Performance statement  consolidated financial 63

Performance statement – network development 65

Performance statement  network reliability 64 Performance statement  environment 66

Performance statement – network development 65 Performance statement  community and employment 67

Performance statement  environment 66 Audit report 70

Performance statement  community and employment 67

Audit report 70

he accompanyin notes form part of and are to be read in conunction with these financial statements 42 heThe accompanyinaccompanying nonotestes form form partpart of andand areare toto bebe rreadead inin conunctionconjunction withwith thesethese financialfinancial statements statements

uditedAudited consolidated financial financial statements statements – Orion rion New ew Zealand ealand Limited imited Audited consolidated financial statements – Orion New Zealand Limited

or the year ended arch 0

Asset Share Retained revaluation Total capital earnings reserve equity Notes $000 $000 $000 $000

alance as at pril 0 0000 00 09 99

et profit ther comprehensie income otal comprehensie income 9

ransfers between reseres ealised ain on disposal of property plant and equipment 9 9 eferred ta reersed on sale of property plant and equipment

iidends paid 000 000 alance as at arch 0 0000 0 99

et profit ther comprehensie income otal comprehensie income

ransfers between reseres ealised ain on disposal of property plant and equipment eferred ta reersed on sale of property plant and equipment

Share buybac 000 000 90000 iidends paid 000 000 alance as at arch 0 0000 99 0 00

The accompanying notes form part of and are to be read in conjunction with these financial statements he accompanyin notes form part of and are to be read in conunction with these financial statements

uditedAudited consolidated financial financial statements statements – Orion rion New ew Zealand ealand Limited imited uditedAudited consolidated financial financial statements statements – Orion rion New ew Zealand ealand Limited imited

or the year ended arch 0 s at arch 0

Asset Share Retained revaluation Total capital earnings reserve equity 2016 2015 Notes $000 $000 $000 $000 Notes $000 $000

alance as at pril 0 0000 00 09 99 Current assets

ash and cash equialents 9

et profit rade and other receiables 0

ther comprehensie income Sale proceeds held in trust account 9

otal comprehensie income 9 nentories 9 9

repayments 0 09 ransfers between reseres otal current assets 00 ealised ain on disposal of property plant and equipment 9 9

eferred ta reersed on sale of property plant and equipment Non current assets

repayments 9

oodwill 0 0

iidends paid 000 000 ntanible assets 0 9

alance as at arch 0 0000 0 99 roperty plant and equipment 099 09 otal non current assets 00 09 otal assets 9 09

et profit Current liabilities ther comprehensie income rade and other payables otal comprehensie income orrowins 9 0 ncome ta liability 0 99 ransfers between reseres mployee entitlements ealised ain on disposal of property plant and equipment nterest rate swaps 0 eferred ta reersed on sale of property plant and equipment otal current liabilities 0

Non current liabilities Share buybac 000 000 90000 orrowins 0 iidends paid 000 000 mployee entitlements 9 0 alance as at arch 0 0000 99 0 00 nterest rate swaps 0

eferred ta 0 9 otal non current liabilities 9

00 99 Shareholders’ equity 00 99 otal liabilities and equity 9 09

Thehe accompanyinaccompanying notesnotes form form partpart of andand areare toto bebe read read inin conunctionconjunction with with thesethese financial financial statements statements he accompanyin notes form part of and are to be read in conunction with these financial statements

or the year ended arch 0 or the year ended arch 0

ash los ro oera aes eolao o e ro o e ash roded ro oera aes

eceipts from customers 0 09

roceeds from earthquae insurance claims 0 et profit nterest receied

ayments to suppliers and employees 0 0 dses ayments for interest and other finance costs 0 roperty plant and equipment disposed and written off 90 000 ayments for income ta 090 mpairment of property plant and equipment et cash proided from operatin actiities 0 epreciation of property plant and equipment 9

mortisation of intanible assets 00 ash los ro es aes arthquae insurance cash settlement – inestin actiity roceeds from earthquae insurance claims hane in fair alue of deriaties 9 roceeds from the sale of inestment property 000 mployee costs allocated to intanible assets 0 roceeds from the sale of property plant and equipment 90 ther 0 ayments for property plant and equipment 9 0 ayments for intanible assets 0 haes a alaes et cash used in inestin actiities 9 09 ncreasedecrease in current ta liability 9

ncreasedecrease in deferred ta liability 9 ash los ro a aes

roceeds from ban loans 0 00 reasederease asses epayment of finance leases rade and other receiables 9 iidends paid 000 000 nentories Share buybac 90000 repayments 0 et cash used in financin actiities 9

et decrease in cash and cash equialents reasederease lales

rade and other payables 09 Sar mployee entitlements 9 ash and cash equialents at beinnin of year 0 et decrease in cash and cash equialents et cash proided from operatin actiities 0 ash and cash equialents at end of year 9

he accompanyin notes form part of and are to be read in conunction with these financial statements The accompanying notes form part of and are to be read in conjunction with these financial statements he accompanyin notes form part of and are to be read in conunction with these financial statements

or the year ended arch 0 or the year ended arch 0

ash los ro oera aes eolao o e ro o e ash roded ro oera aes

eceipts from customers 0 09

roceeds from earthquae insurance claims 0 et profit nterest receied

ncreasedecrease in deferred ta liability 9 ash los ro a aes

et decrease in cash and cash equialents reasederease lales

he accompanyin notes form part of and are to be read in conunction with these financial statements heThe accompanyinaccompanying notesnotes form form partpart of andand areare toto bebe read read in in conunctionconjunction with with these these financial financial statements statements

Audited consolidated financial statements – Orion New Zealand Limited Audited consolidated financial statements – Orion New Zealand Limited

Saee o ao oles

ororae orao Saee o ao oles ororae orao – Saee o olae – Saee o olae ass o aal saee rearao ass o aal saee rearao Sa dees esaes ad assos Sa dees esaes ad assos assumptions. Actual results may differ from the group’s estimates and assumptions. assumptions. Actual results may differ from the group’s estimates and assumptions. e company’s future revenue cash flows from 1 April 2019. e company’s future revenue cash flows from 1 April 2019.

Audited consolidated financial statements rion ew ealand imited

Audited consolidated financial statements – Orion New Zealand Limited Audited consolidated financial financial statements statements – Orion rion New ew Zealand ealand Limited imited or the year ended 1 arch 201

or the year ended 1 arch 201

Saee o ao oles ignificant accounting policies

ororae orao he following significant accounting policies have een applied consistently to all periods presented in these financial statements

Saee o ao oles a asis of consolidation ignificant accounting policies ororae orao A susidiary is an entity that is directly or indirectly controlled y the company. he following significant accounting policies have een applied consistently to all periods presented in these financial statements – he consolidated financial statements are prepared y comining the financial statements of all group entities for the same reporting a asis of consolidation period using consistent accounting policies. All intragroup alances and transactions including unrealised profits arising within the Saee o olae groupA susidiary are eliminated is an entity in thatfull. is directly or indirectly controlled y the company. – heeve consolidatednue recognit ifinancialon statements are prepared y comining the financial statements of all group entities for the same reporting period using consistent accounting policies. All intragroup alances and transactions including unrealised profits arising within the Saee o olae evenue is measured at the fair value of consideration received or receivale. group are eliminated in full. evenue is recognised when the amount of revenue can e measured relialy and it is proale that the economic enefits of the ass o aal saee rearao evenue recognition transaction will flow to the group. ales of goods are recognised when the significant riss and rewards of ownership of the goods have eenevenue transferred is measured to the at uyer. the fair ales value of of services consideration are recognised received as or the receivale. services are delivered or if applicale on a percentage of completion asis. ass o aal saee rearao evenue is recognised when the amount of revenue can e measured relialy and it is proale that the economic enefits of the transactionaal oros will flow to the group. ales of goods are recognised when the significant riss and rewards of ownership of the goods have een transferred to the uyer. ales of services are recognised as the services are delivered or if applicale on a percentage of apital contriutions that are refundale to customers are treated as current liailities until refunded or applied. onrefundale cash completion asis. contriutions from customers relating to the electricity distriution networ are recognised as revenue. Sa dees esaes ad assos aal oros d orro oss apital contriutions that are refundale to customers are treated as current liailities until refunded or applied. onrefundale cash orrowing costs directly attriutale to the acuisition construction or production of a ualifying asset an asset that taes a contriutions from customers relating to the electricity distriution networ are recognised as revenue. Sa dees esaes ad assos sustantial period of time to get ready for intended sale or use and is of significant cost are capitalised as part of the cost of that asset. assumptions. Actual results may differ from the group’s estimates and assumptions. d orroAll other orrowing oss costs are epensed in the period in which they occur. e oeorrowing a c osts directly attriutale to the acuisition construction or production of a ualifying asset an asset that taes a assumptions. Actual results may differ from the group’s estimates and assumptions. ncomesustantial ta epenseperiod of comprises time to get current ready for ta intended and deferred sale or ta. use and is of significant cost are capitalised as part of the cost of that asset. All other orrowing costs are epensed in the period in which they occur. urrent ta is the income ta payale ased on the taale profit for the current year plus adustments to income ta payale for prior e oe a years. urrent ta is calculated using rates that have een enacted or sustantively enacted y alance date. ncome ta epense comprises current ta and deferred ta. eferred ta is recognised on temporary differences etween the carrying values of assets and liailities and the euivalent amounts urrentused for tataation is the purposes income ta. payale ased on the taale profit for the current year plus adustments to income ta payale for prior years. urrent ta is calculated using rates that have een enacted or sustantively enacted y alance date. eferred ta liailities are generally recognised for all taale temporary differences. eferred ta assets are recognised to the etent eferredthat it is proale ta is recognised that taale on temporaryprofits will differences e availale etween agains tthe which carrying the deductile values of temporaryassets and differencesliailities and or theta losseseuivalent can amountse utilised. used for taation purposes. eferred ta is calculated at the ta rates that are epected to apply in the period when the temporary differences will reverse. eferred ta liailities are generally recognised for all taale temporary differences. eferred ta assets are recognised to the etent urrent ta and deferred ta are charged or credited to profit or loss. hen deferred ta relates to items charged or credited to other that it is proale that taale profits will e availale against which the deductile temporary differences or ta losses can e utilised. comprehensive income then deferred ta is recognised in other comprehensive income. e company’s future revenue cash flows from 1 April 2019. eferred ta is calculated at the ta rates that are epected to apply in the period when the temporary differences will reverse. aal sres urrent ta and deferred ta are charged or credited to profit or loss. hen deferred ta relates to items charged or credited to other All financial instruments are initially recognised at fair value plus directly attriutale transaction costs where applicale. comprehensive income then deferred ta is recognised in other comprehensive income. e company’s future revenue cash flows from 1 April 2019. useuently the group applies the following accounting policies for financial instruments. aal sres oans and receivales consist of trade and other receivales. rade and other receivales are measured at face value less an All financial instruments are initially recognised at fair value plus directly attriutale transaction costs where applicale. allowance for impairment. All nown ad dets are written off through profit and loss. useuently the group applies the following accounting policies for financial instruments. The group’s availableforsale financial asset is an investment fund managed y nertech apital artners. his asset is measured at oansfair value and withreceivales impairments consist in offair trade value and recognised other receivales in profit .or rade loss .and other receivales are measured at face value less an allowance for impairment. All nown ad dets are written off through profit and loss. inancial liailities at amortised cost consist of trade and other payales and orrowings. inancial liailities at amortised cost are Themeasured group’s using available the effectiveforsale interest financial rate asset method. is an investmentue to their fund short managed term nature y nertech trade and apital other artners. payales hisare notasset discounted. is measured at fair value with impairments in fair value recognised in profit or loss. he group has not designated any derivatives as hedges for financial reporting purposes. erivatives are suseuently measured at fair inancialvalue with liailities movements at amortised recognised cost in consistprofit or of loss. trade he and fair other value payales of derivatives and orrowings. is determined inancial pursuant liailities to at amortised 1 – air cos aluet are easurementmeasured using evel the effective 2 using interest valuation rate techniues method. ueand modelsto their whereshort term all significant nature trade inputs and are other oservale. payales erivatives are not discounted. are carried as assets when their fair value is positive and as liailities when their fair value is negative and they are only offset against each other if he group has not designated any derivatives as hedges for financial reporting purposes. erivatives are suseuently measured at fair the group has a legal right of offset. value with movements recognised in profit or loss. he fair value of derivatives is determined pursuant to 1 – air alue easurement evel 2 using valuation techniues and models where all significant inputs are oservale. erivatives are carried as assets when their fair value is positive and as liailities when their fair value is negative and they are only offset against each other if the group has a legal right of offset.

uie osoliae iaial saees rio e eala iie

or he ear ee arh uieAudited consolidatedosoliae financial iaial statements saees – Orion rio New e Zealand eala Limited iie Audited consolidated financial statements – Orion New Zealand Limited

or he ear ee arh

eores veories are value a he loer o os or e realisable value e realisable value is he aou iveories are epee o realise i he oriar ourse o busiess iviual so ies are value o a eighe average os basis h roer la ad ee ropereores pla a euipe auisiios are iiiall easure a os aveories a builigs are value are a e heasure loer a o air os value or e base realisable o perioi value iepee e realisable valuaio value iss heprepare aou b iveories eeral valuers are epee hih areo baserealise o i ophe oriararable areourse saleso busiess isoue iviual ash solos iesor apialisaio are value o e a eighe ioe asaverage appropriae os basis less subseue epreiaio air value is reviee a he e o eah reporig perio o assess heher arrig value is aeriall iere o air h roer la ad ee value roper pla a euipe auisiios are iiiall easure a os The elerii isribuio eor is easure a air value base o perioi iepee valuaios prepare b a eeral valuer ahih a are builigsbase o area isoue easure ash a air lo value ehoolog base o perioi air value iepee is reviee valuaio a he es prepare o eah repor b eeralig perio valuers o ass hihess heher are basehe arr oig op valuearable is aeriall are sales iere isoue o air value ash los or apialisaio o e ioe as appropriae less subseue epreiaio air value is reviee a he e o eah reporig perio o assess heher arrig value is aeriall iere o air revaluaio irease arisig o he revaluaio o la a builigs a he elerii isribuio eor is reore i oher value oprehesive ioe a reie o he asse revaluaio reserve i eui eep o he ee ha i reverses a revaluaio Tereasehe elerii or he isribuio sae asse eor previousl is easure reogise a airas a value epese base i oproi perioi or loss iepee i hih ase valuaio he ireases prepare is reie b a eeral o proi valuer or hihloss o are he base ee o o ahe isoue erease ash prev iousllo ehoolog harge revaluaio air value ereaseis reviee is aharge he e as o a eah epese repor iig proi perio or losso ass oess he heheree heha arr is eeesig value he is balae aeriall i a iere hel i o he air asse value revaluaio reserve ro previous revaluaios o ha asse epreiaio revaluaio is provieirease oarisig proper o he pl arevaluaio a euipe o la ailuig builigs reehol a he builigs elerii bu isribuioeluig la eor epreiaio is reore o revaluei oher oprehesivebuiligs a he ioe elerii a reieisribuio o he eor asse isrevaluaio harge o reserve proi or i losseui eep o he ee ha i reverses a revaluaio erease or he sae asse previousl reogise as a epese i proi or loss i hih ase he irease is reie o proi or her pla a euipe a leasehol iprovees are reogise a os less auulae epreiaio a ipaire os loss o he ee o he erease previousl harge revaluaio erease is harge as a epese i proi or loss o he ee ilues epeiure ha is irel aribuable o he auisiio o he ie The os o selosrue asses ilues he os o ha is eees he balae i a hel i he asse revaluaio reserve ro previous revaluaios o ha asse aerials a ire labour a a alloae or overheas epreiaio is provie o proper pla a euipe iluig reehol builigs bu eluig la epreiaio o revalue epreiaio is alulae o a sraighlie basis o rie o he e os or oher revalue aou o eah asse over is epee builigs a he elerii isribuio eor is harge o proi or loss useul lie o is esiae resiual value easehol iprovees are epreiae over he perio o he lease or esiae useul lieher hihever pla a is euipe he shorer a usig leasehol he sraigh iproveeslie eho are reogiseThe esiae a os useul less lives auulae resiual valuesepreiaio a epreiaio a ipaire eho os are iluesreviee epeiurea he e o ha eah is aualirel reporig aribuable perio o he auisiio o he ie The os o selosrue asses ilues he os o aerials a ire labour a a alloae or overheas The ai bases or he alulaio o epreiaio are perios o eeeig epreiaio is alulae o a sraighlie basis o rie o he e os or oher revalue aou o eah asse over is epee

useul lie o is esiae resiual value easehol iprovees are epreiae over he perio o he lease or esiae useul lie hihever is he shorer usig he sraighlie eho Theears esiae useul lives resiual values a epreiaio eho areear s leriireviee a isribuio he e o eaheor aual reporig perio ars a vas Theuiligs ai basessruures or he alulaio o epreiaio are perios o eeeigTrus uilig servies la a euipe uilig iou ears opuer euipe ears lerii isribuio eor ars a vas esiualuiligs values sruures or a ie o proper pla a euipe are reviee Trus a ause i appropriae a he e o eah reporig periouilig servies la a euipe Theuilig arrig iou aou or a ie o proper pla a euipe is rieopuer o euipe ieiael o is reoverable aout if the asset’s arrig value is greaer ha is esiae reoverable aou

ais a losses o isposals are eerie b oparig proees ih arrig aous These gais a losses are ilue i esiual values or a ie o proper pla a euipe are reviee a ause i appropriae a he e o eah reporig proi or loss perio

The arrig aou or a ie o proper pla a euipe is rie o ieiael o is reoverable aout if the asset’s arrig value is greaer ha is esiae reoverable aou ais a losses o isposals are eerie b oparig proees ih arrig aous These gais a losses are ilue i proi or loss

uie osoliae iaial saees rio e eala iie ite siate fiaia stateets i e eaa iite

or he ear ee arh uieAudited consolidatedosoliae financial iaial statements saees – Orion rio New e Zealand eala Limited iie iteAudited consolidatedsiate financial fiaia statements stateets – Orion i New e Zealand eaa Limited iite the ea ee ah

or he ear ee arh the ea ee ah

eores are o asses veories are value a he loer o os or e realisable value e realisable value is he aou iveories are epee o The carrying amounts of the group’s assets, other than inventory, investment property and deferred tax assets ae eiee at eah realise i he oriar ourse o busiess iviual so ies are value o a eighe average os basis aae ate t eteie hethe thee is a iiati f iaient. If any such indication exists for an asset, the asset’s eeae at is estiate i e t eteie the etet f the iaiet ss if a hee the asset es t eeate h roer la ad ee are o asses ash fs that ae ieeet f the assets the estiates the eeae at f the asheeati it t hih the ropereores pla a euipe auisiios are iiiall easure a os Theasset carrying es amounts ash ofeeati the group’s it assets, is efie other as than the saestinventory, ietifiae investment property f assets and deferred that eeates tax assets ash ae ifs eiee that atae eah aeaae ieeet ate t eteie f the ashhethe ifs thee f is a the iiati assets f iaies fnt. assets If any such indication exists for an asset, the asset’s aveories a builigs are value are a e heasure loer a o air os value or e base realisable o perioi value iepee e realisable valuaio value iss heprepare aou b iveories eeral valuers are epee hih areo eeae at is estiate i e t eteie the etet f the iaiet ss if a hee the asset es t eeate baserealise o i ophe oriararable areourse saleso busiess isoue iviual ash solos iesor apialisaio are value o e a eighe ioe asaverage appropriae os basis less subseue he eeae ats ae the hihe f fai ae ess sts t se ae i se assessi ae i se the estiate fte ash fs that ae ieeet f the assets the estiates the eeae at f the asheeati it t hih the epreiaio air value is reviee a he e o eah reporig perio o assess heher arrig value is aeriall iere o air ash fs ae iste t thei eset ae si a ist ate that efets et aet assessets f the tie ae f h roer la ad ee asset es asheeati it is efie as the saest ietifiae f assets that eeates ash ifs that ae value e a the iss seifi t the asset f hih the estiates f fte ash fs hae t ee aste roper pla a euipe auisiios are iiiall easure a os ae ieeet f the ash ifs f the assets s f assets The elerii isribuio eor is easure a air value base o perioi iepee valuaios prepare b a eeral valuer i is teste f iaiet aa a heee thee is a iiati that it a e iaie iaiet f i is he eeae ats ae the hihe f fai ae ess sts t se ae i se assessi ae i se the estiate fte ahih a are builigsbase o area isoue easure ash a air lo value ehoolog base o perioi air value iepee is reviee valuaio a he es prepare o eah repor b eeralig perio valuers o ass hihess heher are t sseet eese basehe arr oig op valuearable is aeriall are sales iere isoue o air value ash los or apialisaio o e ioe as appropriae less subseue ash fs ae iste t thei eset ae si a ist ate that efets et aet assessets f the tie ae f f a eae asset is eteie t e iaie the the iaiet is fist aie aaist the eaati esee eate t that epreiaio air value is reviee a he e o eah reporig perio o assess heher arrig value is aeriall iere o air e a the iss seifi t the asset f hih the estiates f fte ash fs hae t ee aste revaluaio irease arisig o he revaluaio o la a builigs a he elerii isribuio eor is reore i oher asset ith a eaii iaiet ss eese i fit ss f the iaiet ss is sseet eese the eesa is value i is teste f iaiet aa a heee thee is a iiati that it a e iaie iaiet f i is oprehesive ioe a reie o he asse revaluaio reserve i eui eep o he ee ha i reverses a revaluaio fist aie t fit ss t the etet f eis eese iaiet sses eati t that asset ith a fthe iease t sseet eese Tereasehe elerii or he isribuio sae asse eor previousl is easure reogise a airas a value epese base i oproi perioi or loss iepee i hih ase valuaio he ireases prepare is reie b a eeral o proi valuer or tae t the eaati esee hihloss o are he base ee o o ahe isoue erease ash prev iousllo ehoolog harge revaluaio air value ereaseis reviee is aharge he e as o a eah epese repor iig proi perio or losso ass oess he heheree f a eae asset is eteie t e iaie the the iaiet is fist aie aaist the eaati esee eate t that assets hih ae t eae a iaiet ss is eese ieiate i fit ss f a iaiet ss is sseet heha arr is eeesig value he is balae aeriall i a iere hel i o he air asse value revaluaio reserve ro previous revaluaios o ha asse asset ith a eaii iaiet ss eese i fit ss f the iaiet ss is sseet eese the eesa is eese the ai ae f the asset is state at t e tha hat its ai ae hae ee ha the eaie iaiet fist aie t fit ss t the etet f eis eese iaiet sses eati t that asset ith a fthe iease epreiaio revaluaio is provieirease oarisig proper o he pl arevaluaio a euipe o la ailuig builigs reehol a he builigs elerii bu isribuioeluig la eor epreiaio is reore o revaluei oher t e oprehesivebuiligs a he ioe elerii a reieisribuio o he eor asse isrevaluaio harge o reserve proi or i losseui eep o he ee ha i reverses a revaluaio tae t the eaati esee eased asses ad lease lales erease or he sae asse previousl reogise as a epese i proi or loss i hih ase he irease is reie o proi or her pla a euipe a leasehol iprovees are reogise a os less auulae epreiaio a ipaire os assets hih ae t eae a iaiet ss is eese ieiate i fit ss f a iaiet ss is sseet loss o he ee o he erease previousl harge revaluaio erease is harge as a epese i proi or loss o he ee eases ae assifie as fiae eases heee the ease tes tasfe sstatia a f the iss a eas f eshi t the ilues epeiure ha is irel aribuable o he auisiio o he ie The os o selosrue asses ilues he os o eese the ai ae f the asset is state at t e tha hat its ai ae hae ee ha the eaie iaiet ha is eees he balae i a hel i he asse revaluaio reserve ro previous revaluaios o ha asse essee the eases ae assifie as eati eases aerials a ire labour a a alloae or overheas t e epreiaio is provie o proper pla a euipe iluig reehol builigs bu eluig la epreiaio o revalue eatieased asses ease ad eeits lease aelales eise as eee a staihtie asis e the ease te epreiaio is alulae o a sraighlie basis o rie o he e os or oher revalue aou o eah asse over is epee builigs a he elerii isribuio eor is harge o proi or loss useul lie o is esiae resiual value easehol iprovees are epreiae over he perio o he lease or esiae useul easeseati ae ease assifie aets as fiae ae eise eases heee as a eese the ease tesa staiht tasfeie sstatiaasis e the a ease f the te iss a eas f eshi t the lieher hihever pla a is euipe he shorer a usig leasehol he sraigh iproveeslie eho are reogiseThe esiae a os useul less lives auulae resiual valuesepreiaio a epreiaio a ipaire eho os are iaeessee eases the aets eases ae ae assifie aate as etee eati ee easeses a eti f the ease iaiit e the te f the ease aitaise revieeilues epeiurea he e o ha eah is aualirel reporig aribuable perio o he auisiio o he ie The os o selosrue asses ilues he os o eatiease assets ease ae eeits eeiate ae eise e the shte as eee f the estiate a staiht sefie asis ife f e the theasset ease a tethe ease te if thee is easae aerials a ire labour a a alloae or overheas The ai bases or he alulaio o epreiaio are perios o eeeig etait that the i tai eshi the e f the ease te eati ease aets ae eise as a eese a staihtie asis e the ease te epreiaio is alulae o a sraighlie basis o rie o he e os or oher revalue aou o eah asse over is epee hae ror ear oaraes useul lie o is esiae resiual value easehol iprovees are epreiae over he perio o he lease or esiae useul iae eases aets ae aate etee eese a eti f the ease iaiit e the te f the ease aitaise lie hihever is he shorer usig he sraighlie eho Theears esiae useul lives resiual values a epreiaio eho areear s theease eati assets ae eee eeiate a et e the aiteae shte f the eeite estiate seff the ifeea f ee the asset ah a the ease hae te th if theeiease is e asae t leriireviee a isribuio he e o eaheor aual reporig perio ars a vas eiseetait that eee the hih i as tai eis e shiette aaist the e e esef the ease his te hae has iat et fit Theuiligs ai basessruures or he alulaio o epreiaio are perios o eeeigTrus tateethae rorf fiaia ear oaraes siti a tes a ee etiteets f hae ee seaate state he ats hae ee eis ee ithi tae a the aaes a isis uilig servies la a euipe the eati eee a et aiteae eeite f the ea ee ah hae th iease t l eeise ao eee sadards hih as ad eis erreaos ette aaist eese his hae has iat et fit uilig iou ears opuer euipe ears tateet e ati f fiaia staas siti a iteetatis tes a that ee eae effetie etiteets f the f ei hahae a eeateia seaate iat state the he ats e hae lerii isribuio eor ars a vas eeati eis staas ee iteetatis ithi tae a that the i aaesee effetiea isis afte the ei ae eete t hae a ateia iat the esiualuiligs values sruures or a ie o proper pla a euipe are reviee Trus a ause i appropriae a he e o eah reporig l e ao sadards ad erreaos periouilig servies la a euipe e ati staas iteetatis that eae effetie f the ei ha a ateia iat the e The arrig aou or a ie o proper pla a euipe is rie o ieiael o is reoverable aout if the asset’s uilig iou opuer euipe ati staas iteetatis that i ee effetie afte the ei ae eete t hae a ateia iat the arrig value is greaer ha is esiae reoverable aou

uditedAudited consolidatedconsoidated financial financia statements statements – Orion rion New e Zealand eaand Limited imited uiteAudited consolidatedconsoliate financial financial statements statements – Orion rion New ew Zealand ealan Limited imite

udited consoidated financia statements rion e eaand imited uite consoliate financial statements rion ew ealan imite

or the year ended arch or the year ene arch

era reees oe a ad deerred a eraectricity deivery reee servicess , , oe a ad deerred a ectricityTransmission deivery renta services reates ,, ,, oe a eese orses Transmissionontracting renta reates ,, ,, oeurrent aincome eese ta chare orses ontractingae of goods and services , , urrentustments income to priorta chare years aeonsumer of goods capita and servicescontriutions ,, ,, ustmentsemporary ifferences to prior years onsumerarthuae capita insurance contriutions proceeds , ,, emporary ifferences arthuaether insurance proceeds , ,, ther ,, , eolao o ro eore oe a h oe a eese eolaorofit efore income o ro ta eore oe a h oe a eese , , rofitrima eforefacie income income ta ta epense calculate at era eeses rima facie income ta epense calculate at eraTransmission e eses , , onassessale earthuae insurance procees Transmission renta reates ,, ,, ontherassessale permanent earthuae ifferences insurance procees Transmissionmpoyee enefits renta reates ,, ,, ther permanent ifferences metorpoyee maintenance enefits , ,, ncome ta epense etorperating maintenance ease payments ,, ,, ncome ta epense peratingther ease payments ,, ,, ncome ta epense on earthuae insurance procees inclue aove ther ,, ,, ncomeurrent tata epense on earthuae insurance procees inclue aove , , urrenteferre ta ta ereao aorsao ad oher are eeses eferre ta ereaoepreciation of property, aorsao pant and ad euipment oher are eeses , , epreciationImpairment of of property, property, pant pant and and euipment euipment ,, , Impairmentmortisation of of property, intangie pant assets and euipment , , arhae mroperty,ortisation pan oft andintangie euipment assets disposed and ritten off , , roer la arhaesrae roperty,Impairment pan of tfinancia and euipment assets disposed and ritten off , roerad ee la sraeroeeds rosos her oal Impairment of financia assets , , ad ee roeeds rosos her oal , ,

eres eese eerred a lal

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o interest expense as capitaised during the year ni alance as at arch hare to income eerao o he ador harealance asto incomeat arch eeraoudit of the financia o statements he ador alance as at arch udit ofreated the financia services statements

uditreated services

uditreated services comprise assurance reviews of the company’s annual The group’s current income tax liability as at arch is m (2015: $9.5m). The liability mainly comprises the group’s  customised priceuaity path compiance statement udit reated services comprise assurance reviews of the company’s annual Thethir group’s instalment current of provisional income tax income liability ta as forat the arch year ene is archm (2015: $9.5m). arch The liability mainly comprises the group’s  reguatory information discosures.  customised priceuaity path compiance statement hethir rion instalment consoliate of provisional ta roup income comprises ta for the the company year ene onnetics arch imite an arch rion ew ealan entures imite for  reguatory information discosures. heimputation rion consoliate creit account ta purposes roup comprises the company onnetics imite an rion ew ealan entures imite for

heimputation roup’s creit imputation account creits purposes availale for use in suseuent reportin perios total as at arch m which inclues the income ta liaility of m he roup’s imputation creits availale for use in suseuent reportin perios total as at arch m which inclues the income ta liaility of m

udited consoidated financia statements rion e eaand imited uite consoliate financial statements rion ew ealan imite

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eres eese eerred a lal

uditreated services

uditreated services comprise assurance reviews of the company’s annual The group’s current income tax liability as at arch is m (2015: $9.5m). The liability mainly comprises the group’s  customised priceuaity path compiance statement udit reated services comprise assurance reviews of the company’s annual Thethir group’s instalment current of provisional income tax income liability ta as forat the arch year ene is archm (2015: $9.5m). arch The liability mainly comprises the group’s  reguatory information discosures.  customised priceuaity path compiance statement thirhe rion instalment consoliate of provisional ta roup income comprises ta for the the company year ene onnetics arch imite an arch rion ew ealan entures imite for  reguatory information discosures. heimputation rion consoliate creit account ta purposes roup comprises the company onnetics imite an rion ew ealan entures imite for

imputationhe roup’s creit imputation account creits purposes availale for use in suseuent reportin perios total as at arch m which inclues the income ta liaility of m he roup’s imputation creits availale for use in suseuent reportin perios total as at arch m which inclues the income ta liaility of m

Audited consolidated financial statements – Orion New Zealand Limited uiteAudited consolidatedconsoliate financial inancial statements statements – Orion rion New e Zealand ealan Limited imite uite consoliate inancial statements rion e ealan imite uite consoliate inancial statements rion e ealan imite uite consoliate inancial statements rion e ealan imite

or the year ene 1 arch 201 or the year ene 1 arch 201 or the year ene 1 arch 201 or the year ene 1 arch 201 lds ler

ldsad lad dsroler la ad

reehold lad roeesad lad dsroeor a eela ad reeholda ar ale lad roeesa ar ale eorar ale a eea os oal a ar ale a ar ale ar ale a os oal rade ad oher reeales roer la ad ee rade ad oher reeales roer la ad ee Trae receiables 2 11205 hargeableTrae receiables or in progress 21 11205525 ross arr ao hargeable or in progress 1 525 lloance or impairment o trae receiables () () ross arr ao lloance or impairment o trae receiables () () 0 115 alance as at 1 pril 201 115 9 2 1019 0 115 alance as at 1 pril 201 115 9 2 1019 Trae receiables beore alloance or impairment: itions 111 9 1111 2 15

urrentTrae receiables beore alloance or impairment: 02 91 isposalsitions 111(209) 9(1) 1111(1205) (122) 15(2) ealuationisposals (209) (1) (120511) (12) (211) 1urrent month oerue 0250 9110 ealuationalance as at 1 arch 2015 551 1210 1005511 959 11111 21 monthsmonth oerue oerue 150 1011 alance as at 1 arch 2015 551 1210 10055 959 111 2 months oerue 1 11 months oerue 2 5 itions 292 0 051 551 9199 months oerue 22 112055 eclassiieitions assets 29221 0 051(21) 551 9199 2 11205 isposalseclassiie assets 21() (5) (20)(21) (25) () eores alanceisposals as at 1 arch 201 555() 1510(5) 1090(20) 250(25) 1202101() ooseores or sale 21 22 alance as at 1 arch 201 555 1510 1090 250 1202101

lectricityoos or saleistribution netor stoc 921 22955

lloancelectricity istributionor impairment netor stoc 9(19) 955(22) laed dereao ad are lloance or impairment (19) (22) laed dereao ad are 9 51 alance as at 1 pril 201 2111 2125 9 51 alance as at 1 pril 201 2111 2125 ale asses isposals () (50) (155) (1) aleapitalise at asses cost 129 159 epreciationisposals expense 5() 552(50)9 (155) 95(1) ccumulateapitalise at amortisationcost (11)129 (122)159 alanceepreciation as at expense 1 arch 2015 55 595529 222 592595 ccumulate amortisation (11)291 (122)1 alance as at 1 arch 2015 5 59 222 5925 291 1 isposals (1) (2) (225) (09) eclassiieisposals assets ()(1) (2) (225) (09) ntangible assets comprise computer sotare assets hich hae a inite lie. arrying alues are amortise oer their estimate epreciationeclassiie assetsexpense () 9 51 15 ntangibleuseul lies. assets This periocomprise usually computer oes notsotare excee assets three hichyears hae– hoeer a inite or lie. signiicant arrying proects alues are esti amortisemate useul oer lies their may estima be te useulassesse lies. as Thisup to perio 10 years. usually oes not excee three years – hoeer or signiicant proects estimate useul lies may be ssetepreciation impairment expense 19 95 51299 155 assesse as up to 10 years. alancesset impairment as at 1 arch 201 11219 15 255299 105155 alance as at 1 arch 201 112 1 255 10515

et boo alue as at 1 arch 2015 551 115 91 129 10559 et boo alue as at 1 arch 2012015 555551 19115 10059291 151129 109910559 et boo alue as at 1 arch 201 555 19 100592 151 1099

apital or in progress inclue aboe: sapital at 1 or arch in 2015progress inclue aboe: 2 01 009 s at 1 arch 2012015 1 152 20501 1 01009 s at 1 arch 201 1 15 205 1 01

ssets subect to inance leases inclue aboe:

ssetss at 1 subect arch to 2015 inance leases inclue aboe: 1 1 s at 1 arch 2012015 151 151 s at 1 arch 201 15 15

5 55 5 55

or the year ene 1 arch 201 or the year ene 1 arch 201 or the year ene 1 arch 201 or the year ene 1 arch 201 lds ler

ldsad lad dsroler la ad

reehold lad roeesad lad dsroeor a eela ad reeholda ar ale lad roeesa ar ale eorar ale a eea os oal a ar ale a ar ale ar ale a os oal rade ad oher reeales roer la ad ee rade ad oher reeales roer la ad ee Trae receiables 2 11205 hargeableTrae receiables or in progress 12 11205525 ross arr ao hargeable or in progress 1 525 lloance or impairment o trae receiables () () ross arr ao lloance or impairment o trae receiables () () 0 115 alance as at 1 pril 201 115 9 2 1019 0 115 alance as at 1 pril 201 115 9 2 1019 Trae receiables beore alloance or impairment: itions 111 9 1111 2 15

urrentTrae receiables beore alloance or impairment: 02 91 isposalsitions 111(209) 9(1) 1111(1205) (122) 15(2) ealuationisposals (209) (1) (120511) (12) (211) 1urrent month oerue 0250 1091 ealuationalance as at 1 arch 2015 551 1210 1005511 959 11111 21 monthsmonth oerue oerue 150 1011 alance as at 1 arch 2015 551 1210 10055 959 111 2 months oerue 1 11 months oerue 2 5 itions 292 0 051 551 9199 months oerue 22 112055 eclassiieitions assets 29221 0 051(21) 551 9199 2 11205 isposalseclassiie assets 21() (5) (20)(21) (25) () eores alanceisposals as at 1 arch 201 555() 1510(5) 1090(20) 250(25) 1202101() ooseores or sale 21 22 alance as at 1 arch 201 555 1510 1090 250 1202101

lectricityoos or saleistribution netor stoc 921 95522

et boo alue as at 1 arch 2015 551 115 91 129 10559 et boo alue as at 1 arch 2012015 551555 11519 10059291 151129 109910559 et boo alue as at 1 arch 201 555 19 100592 151 1099

apital or in progress inclue aboe: sapital at 1 or arch in 2015progress inclue aboe: 2 01 009 s at 1 arch 2012015 1 152 01205 1 00901 s at 1 arch 201 1 15 205 1 01

ssets subect to inance leases inclue aboe:

ssetss at 1 subect arch to 2015 inance leases inclue aboe: 1 1 s at 1 arch 2012015 115 151 s at 1 arch 201 15 15

5 55 5 55

Audited consolidated financial statements Orion ew ealand imited

Audited consolidated financial statements – Orion New Zealand Limited Audited consolidated financial financial statements statements – Orion Orion New ew Zealand ealand Limited imited or the year ended 31 March 2016

or the year ended 31 March 2016

roer la ad ee roer la ad ee continued

Mr Ogg valued the company’s head office land and building using a market rental assessment and a capitalisation rate of 7.75% (evel 3), and concluded that the fair value of the company’s head office building was $10.4m, confirming its carrying value. Mr Ogg roer la ad ee continued lerroer dsr lao ad eor ee concluded that the fair value of the company’s head office land was $3.6m confirming its carrying value.

Mr Ogg reviewedvalued the the company’s group’s carrying head office value land for and land building and non usingsubstatio a marketn buildings rental assessment as at 31 March and 2015 a capitalisation and 31 March rate 2016 of 7.75%, using (evel a – – similar3), and concludedmethodology that in the both fair years value to of that the described company’s above, head inoffice accordance building withwas $10.4m, A 16, confirming A 36 its and carrying value. 13. Mr Mr Ogg Ogg concluded ler dsr o eor – thatconcluded there werethat the no indicatorsfair value ofthat the the company’s group’s carryinghead office value land for was land $3.6m and n confirmingonsubstation its carryingbuildings value. as at 31 March 2015 and 31 March 2016 were materially different to fair value as at those dates. Mr Ogg reviewed the group’s carrying value for land and nonsubstation buildings as at 31 March 2015 and 31 March 2016, using a – – similarestric tmethodologyions over title in both years to that described above, in accordance with A 16, A 36 and 13. Mr Ogg concluded – that there were no indicators that the group’s carrying value for land and nonsubstation buildings as at 31 March 2015 and 31 March There are no restrictions over the title of the group’s property, plant and equipment, nor is any property, plant and euipment pledged ts cash flow forecasts on the company’s cash flow forecasts 2016 were materially different to fair value as at those dates. as security for liabilities. estrictions over title There are no restrictions over the title of the group’s property, plant and equipment, nor is any property, plant and euipment pledged ’s key valuation assumptions were ts cash flow forecasts on the company’s cash flow forecasts as security for liabilities.  network revenues will be consistent with the company’s customised price rade ad oher aales 1 April 2014 and network revenues will return to the Commerce Commission’s default price Trade payables 27,330 30,919 ’s key valuation assumptions were T payable 1,065 1,326  expansionary “infill” growth will be 0.3% per annum  network revenues will be consistent with the company’s customised price rade ad oher aales 1 April 2014 and network revenues will return to the Commerce Commission’s default price Other 11 169  Trade payables 27,330 30,919 2,576 32,414 T payable 1,065 1,326  expansionary “infill” growth will be 0.3% per annum Other 11 169  al expenditure increase/(decrease) of 5% would decrease/(increase) the network’s fair value by $24m respectively 2,576 32,414 loee elees  a discount rate increase of 0.25% would decrease the network’s fair value by $37m Current 6,677 6,37  a discount rate decrease of 0.25% would increase the network’  al expenditure increase/(decrease) of 5% would decrease/(increase) the network’s fair value by $24m respectively on current 1,379 1,405  an operating expense increase/(decrease) of 10% would decrease/(increase) the network’s fair value by $16m respectively loee elees  a discount rate increase of 0.25% would decrease the network’s fair value by $37m ,056 7,73 Current 6,677 6,37  a 0.7% decrease in the Commerce Commission’s post  a discount rate decrease of 0.25% would increase the network’ estimate) would decrease the network’s fair value by $79m, if it is applied to the company’s network revenues from 1 April 20 mployeeon current entitlements include a provision for employee long service leave. 1,379 1,405  an operating expense increase/(decrease) of 10% would decrease/(increase) the network’s fair value by $16m respectively ey assumptions in the actuarial assessment of the provisions include ,056 7,73  a 0.7% decrease in the Commerce Commission’s post  riskfree rate 3.00% (2015 3.26%) estimate) would decrease , thebased network’s on the company’s fair value by updated $79m, financialif it is applied forecasts to the company’s network revenues from 1 April 20 mployee entitlements include a provision for employee long service leave.  salary inflation 2.00% (2015 3.00%). ey assumptions in the actuarial assessment of the provisions include  riskfree rate 3.00% (2015 3.26%) , based on the company’s updated financial forecasts orros  salary inflation 2.00% (2015 3.00%). Current – finance lease liability 967 2,013 pital contribution receipts reduce the value of the company’s regulatory asset base, and this in turn reduces the company’s future revenues from future regulatory price resets. orros on current – finance lease liability 13,915 13,605 onCurrent current – finance – bank lease loan liabilitys 213,350967 70,0002,013 pital contribution receipts reduce the value of the company’s regulatory asset on current – total 227,265 3,605 base, and this in turn reduces the company’s future revenues from future regulatory price resets. on current – finance lease liability 13,915 13,605

ad ad o ssao lds Theon financecurrent lease – bank liabilities loans relate to agreements with Transpower ew ealand imited (Transpower) for Transpower213,350 to install 70,000new onassets current at or near– total its local grid exit points. The agreements have remaining terms of between less than one and227,265 32 years (2015 two3,605 and The company’s land and non 33 years). The company does not own the assets at the end of the lease term and there is no residual value. There is no security – – – provided for the arrangements. The monthly payment amounts are reviewed periodically by Transpower based on prevailing interest The finance lease liabilities relate to agreements with Transpower ew ealand imited (Transpower) for Transpower to install new ad ad o ssao lds rates and agreed margins. The company is the only entity in the group which has a finance lease liability. assets at or near its local grid exit points. The agreements have remaining terms of between less than one and 32 years (2015 two and The company’s land and non 33 years). The company does not own the assets at the end of the lease term and there is no residual value. There is no security Mr Ogg – selected a representative sample of the company’s – substation sites and – provided for the arrangements. The monthly payment amounts are reviewed periodically by Transpower based on prevailing interest rates and agreed margins. The company is the only entity in the group which has a finance lease liability. values for approximately 35% of the company’s land and non Mr Ogg selected a representative sample of the company’s substation sites and valued land at the company’s two largest substations using discounted cashflow and/or sales comparison approaches, values for approximately 35% of the company’s land and non 57 valued land at the company’s two largest substations using discounted cashflow and/or sales comparison approaches,

Audited consolidated financial statements Orion ew ealand imited

or the year ended 31 March 2016

roer la ad ee roer la ad ee continued

udited consolidated financial statements Orion ew ealand imited udited consolidated financial statements rion e ealand imited

uditedAudited consolidated financial financial statements statements – Orion Orion New ew Zealand ealand Limited imited uditedAudited consolidated financial financial statements statements – Orion rion New e Zealand ealand Limited imited or the year ended 3 March 6 or the year ended arch

or the year ended 3 March 6 or the year ended arch

aal sres aal sres continued

rodo eres rae rs aaee

posureaals to sres interest rates, foreign currency, liquidity and credit risk arise in the normal course of the group’s business. The group has Theaal group has sres interest bearing continued floating rate debt, and so the group is eposed to variations in maret interest rates. policies to manage the risks associated with financial instruments. he significant accounting policies and methods adopted, including Interest rates on the group’s bank loans are based on market rates for bank bills plus a margin. s at arch , interest rates the criteria for recognition and the basis of measurement applied in respect of each class of financial asset, financial liability and equity (includingeres rae margins) rs onaaee the group’s bank loans averaged . .. aily commitment fees are also payable on the ban loan instrumenrodot are disclosed in note . posures to interest rates, foreign currency, liquidity and credit risk arise in the normal course of the group’s business. The group has Thefacilities. group has interest bearing floating rate debt, and so the group is eposed to variations in maret interest rates.

policies to manage the risks associated with financial instruments. he significant accounting policies and methods adopted, including Interest rates on the group’s bankfinance loans lease are liabilities based on are market at rates rates set for by bankTranspoer bills pl usplus a margin., for some s contracts at arch, a margin. , interest s at rates arch aalthe criteria aaee for recognition and the basis of measurement applied in respect of each class of financial asset, financial liability and equity (including, interest margins) rates on the group’s bankfinance loans lease averaged liabilities . averaged . .. aily . commitment.The group’s fees areother also financial payable liabilities on the ban are nonloan Theinstrumen group’st are capital disclosed includes in note share . capital, reserves and retained earnings. The group’s policy is to maintain a strong capital base to facilities.interest bearing. maintain investor, creditor and market confidence and to sustain future development of the business. InterestThe group rates enters on theinto group’s interest finance rate swaps lease to liabilities manage arethe atcompany’s rates set interestby Transpoer rate ris plus. The, for saps some are contracts ith various, a margin. e ealand s at arch aalhe board aaee of directors regularly reviews the group’s policies in respect of the management and allocation of capital. here has been no registered, interest ban rates counterparties on the group’s ith finance such credit lease ratliabilitiesings and averaged ithin limits . set by the . board.The of directors. group’s other The sapsfinancial’ cash liabilities reuirements are non are limited to the contracted fied interest rates for the periods specified in each sap. The group usually enters saps for periods up Thematerial group’s change capital to theincludes group’s share management capital, reserves and allocation and retained of capital earnings. during The the group’s year. policy is to maintain a strong capital base to interest bearing. to three years in tenor. hemaintain group investor, is not subect creditor to eternallyand market imposed confidence capital and requirements to sustain future. ll developmentbank loans are of unsecuredthe business. against the group. he group The group enters into interest rate swaps to manage the company’s interest rate ris. The saps are ith various e ealand nder interest rate sap contracts, the group agrees to pay fied interest rates and to receive floating interest rates, calculated on heprovides board certain of directors covenants regularly to its reviewskey lenders the group’, by ways policiesof a negative in respect pledge of deedthe management, that it will not and create allocation any material of capital security. here inter has beenest over no registered ban counterparties ith such credit ratings and ithin limits set by the board of directors. The saps’ cash reuirements agreed notional principal amounts for specified periods. The saps effectively convert portions of floating rate debt into fied rate debt. materialits assets change to any party,to the eceptgroup’s under management certain agreed and allocation circumstances. of capital he during deed the has year. other covenants that restrict certain asset disposals, are limited to the contracted fied interest rates for the periods specified in each sap. The group usually enters saps for periods up the lending of money to other parties, noncommercial transactions with related parties, the alteration of share capital where this toll three sap yearss are heldin tenor. by the company. The fair values of interest rate saps are based on maret values of euivalent instruments at the wouldhe group have is a not material subect adverse to eternally effect andimposed any material capital requirements change of business.. ll bank he loans deed are includes unsecured an against interest the coveragegroup. he require groupment reporting date and are disclosed belo. The group does not use hedge accounting and gains and losses on remeasurement are nder interest rate sap contracts, the group agrees to pay fied interest rates and to receive floating interest rates, calculated on andprovides an obligation certain covenants that the guaranteeing to its key lenders group, by will way comprise of a negative at least pledge 75% ofdeed the, groupthat it willin terms not create of assets any andmaterial earnings. security he inter deedest places over recognised in profit and loss immediately. its assets to any party, ecept under certain agreed circumstances. he deed has other covenants that restrict certain asset disposals, agreed notional principal amounts for specified periods. The saps effectively convert portions of floating rate debt into fied rate debt. other undertakings and obligations on the company – for eample the obligation to provide relevant lenders with information, comply The folloing table details outstanding interest rate saps as at the reporting date the lending of money to other parties, noncommercial transactions with related parties, the alteration of share capital where this ll saps are held by the company. The fair values of interest rate saps are based on maret values of euivalent instruments at the with the law and to pay taes as they fall due. he company has complied with all covenants during the two years ended 3 March 6. would have a material adverse effect and any material change of business. he deed includes an interest coverage requirement reporting date and are disclosed belo. The group does not use hedge accounting and gains and losses on remeasurement are erae andll interest an obligation bearing that bank the loans guaranteeing and finance group lease will liabilities comprise are at leastin ew 75% ealand of the dollars.group in terms of assets and earnings. he deed places recognised in profit and loss immediately. oraed ed ooal ral arr ale other undertakings and obligations on the company – for eample the obligation to provide relevant lenders with information, comply The folloing table details outstanding interest rate saperess as at rae the sreporting datesa aos asselal with the law and to pay taes as they fall due. he company has complied with all covenants during the two years ended 3 March 6. d rs aaee erae ll interest bearing bank loans and finance lease liabilities are in ew ealand dollars. Sa ar daes iquidity risk represents the risk that the group may not be able to meet its financial contractual obligations. rudent liquidity risk oraed ed ooal ral arr ale

management implies maintaining sufficient cash, sufficient committed credit facilities and the ability to close out market positions. eres raes sa aos asselal pril . , , hed group rsmanages aaee its liquidity in accordance with its boardapproved treasury policy. his policy requires that the group must ensure Sactober a r daes . , , iquiditythat prudent risk levelsrepresents of committed the risk fundingthat the facilitiesgroup may are not in beplace able at to all meet times, its using financial senior contract managementual obligations.’s best overallrudent udgement liquidity risk in

managementconunction with implies the board maintaini, andng based sufficient on prudent cash, sufficientcash flow committedforecasts. credit facilities and the ability to close out market positions. ebruary . , , ctoberpril . ,, , , hen general, group manages the group its generates liquidity insufficient accordance cash with flows its from board itsapproved operating treasury activities po tolicy. meet his its policy contractual requires obligations that the group and it musthas ensure ctober . , , sufficientthat prudent funding levels arrangements of committed infunding place tofacilities cover potential are in place shortfalls. at all times, he group using evaluatessenior management its liquidity’ srequirements best overall udgement on an ongoing in , , , basis. The group’s current forecasts for its debt/debtplusequity and its interest coverage indicate that it will maintain its financial ebruary conunction with the board, and based on prudent cash flow forecasts. . , , ability to meet its contractual obligations for the foreseeable future at least over the net month period). ctober n general, the group generates sufficient cash flows from its operating activities to meet its contractual obligations and it has . , , sufficient funding arrangements in place to cover potential shortfalls. he group evaluates its liquidity requirements on an ongoing , , , The group considers that a reasonably possible movement in e ealand interest rates is a movement in either direction. basis. The group’s current forecasts for its debt/debtplusequity and its interest coverage indicate that it will maintain its financial or ban loans, an increase of in interest rates as at arch ould increase the group’s profit before income tax by ability to meet its contractual obligations for the foreseeable future at least over the net month period ). nsecured bank overdraft facility, payable at call approimately , ,. decrease of ould decrease the group’s profit before income tax by approximately

mount used at reporting date The,, group considers that,. a reasonably hen interest possible rates movement rise, the benefit in e from eal andthe revinterestaluation rates of theis a company’s movement multi in yeareither interest direction rate. saps

mount unused at reporting date 5 5 outeighs the additional oneyear interest epense on the company’s floating rate debt. The converse applies hen interest rates decrease.or ban loans, an increase of in interest rates as at arch ould increase the group’s profit before income tax by nsecured bank overdraft facility, payable at call 5 5 approimately , ,. decrease of ould decrease the group’s profit before income tax by approximately nsecuredmount used bank at reporting loan facilities date as at 3 March 6 mature as follows For,, the group’s other financial,. hen assets interest and liabilities, rates rise an, the increase/decrease benefit from the revof aluation in interest of the rates company’s ould havemulti anyear immaterial interest rateimpact saps on outeighsthe group’s the profit additional before incomeoneyear tax interest. epense on the company’s floating rate debt. The converse applies hen interest rates $6mmount on unused 7 ovember at reporting 7 date 5 5 decrease. $m on 5 eptember 5 5 For the group’s other financial assets and liabilities, an increase/decrease of in interest rates ould have an immaterial impact on $mnsecured on 5 bank eptember loan facilities as at 3 March 6 mature as follows the group’s profit before income tax. $6m on 7 ovember 7 mount used at reporting date 3,35 7,

$m on 5 eptember mount unused at reporting date 6,65 6,

$m on 5 eptember 6, 3,

mount used at reporting date 3,35 7, mount unused at reporting date 6,65 6, 6, 3,

udited consolidated financial statements rion e ealand imited

Audited consolidated financial statements – Orion New Zealand Limited uditedAudited consolidated financial financial statements statements – Orion rion New e Zealand ealand Limited imited or the year ended arch

or the year ended arch

aal sres continued

eres rae rs aaee

Theaal group has sres interest bearing continued floating rate debt, and so the group is eposed to variations in maret interest rates.

Interest rates on the group’s bank loans are based on market rates for bank bills plus a margin. s at arch , interest rates eres(including rae margins) rs onaaee the group’s bank loans averaged . .. aily commitment fees are also payable on the ban loan Thefacilities. group has interest bearing floating rate debt, and so the group is eposed to variations in maret interest rates. Interest rates on the group’s bankfinance loans lease are liabilities based on are market at rates rates set for by bankTranspoer bills pl usplus a margin., for some s contracts at arch, a margin. , interest s at rates arch (including, interest margins) rates on the group’s bankfinance loans lease averaged liabilities . averaged . .. aily . commitment.The group’s fees areother also financial payable liabilities on the ban are nonloan facilities.interest bearing. InterestThe group rates enters on theinto group’s interest finance rate swaps lease to liabilities manage arethe atcompany’s rates set interestby Transpoer rate ris plus. The, for saps some are contracts ith various, a margin. e ealand s at arch registered, interest ban rates counterparties on the group’s ith finance such credit lease ratliabilitiesings and averaged ithin limits . set by the . board.The of directors. group’s other The sapsfinancial’ cash liabilities reuirements are non interestare limited bearing. to the contracted fied interest rates for the periods specified in each sap. The group usually enters saps for periods up to three years in tenor. The group enters into interest rate swaps to manage the company’s interest rate ris. The saps are ith various e ealand registerednder interest ban rate counterparties sap contracts, ith thesuch group credit agrees ratings to andpay ithinfied interest limits set rates by theand board to receive of directors. floating Theinterest saps rates,’ cash calculated reuirements on agreedare limited notional to the principal contracted amounts fied interestfor specified rates periods. for the periods The saps specified effectively in each co nvertsap .portions The group of floatingusually entersrate debt saps into forfied periods rate debt. up toll three sap yearss are heldin tenor. by the company. The fair values of interest rate saps are based on maret values of euivalent instruments at the reporting date and are disclosed belo. The group does not use hedge accounting and gains and losses on remeasurement are nder interest rate sap contracts, the group agrees to pay fied interest rates and to receive floating interest rates, calculated on recognised in profit and loss immediately. agreed notional principal amounts for specified periods. The saps effectively convert portions of floating rate debt into fied rate debt. llThe sap folloings are tableheld by details the company. outstanding The interest fair values rate of sap interests as rateat the saps reporting are based date on maret values of euivalent instruments at the reporting date and are disclosed belo. The group does not use hedge accounting and gains and losses on remeasurement are erae recognised in profit and loss immediately. oraed ed ooal ral arr ale The folloing table details outstanding interest rate saperess as at rae the sreporting datesa aos asselal

erae Sa ar daes oraed ed ooal ral arr ale

eres raes sa aos asselal pril . , , Sactober a r daes . , , ebruary . , , ctoberpril . ,, , , ctober . ,, ,, , ebruary . , , ctober . , , The group considers that a reasonably possible movement in e eal and interest , rates is a , movement in either, direction .

or ban loans, an increase of in interest rates as at arch ould increase the group’s profit before income tax by approimately , ,. decrease of ould decrease the group’s profit before income tax by approximately The,, group considers that,. a reasonably hen interest possible rates movement rise, the benefit in e from eal andthe revinterestaluation rates of theis a company’s movement multi in yeareither interest direction rate. saps outeighs the additional oneyear interest epense on the company’s floating rate debt. The converse applies hen interest rates ordecrease. ban loans, an increase of in interest rates as at arch ould increase the group’s profit before income tax by approimately , ,. decrease of ould decrease the group’s profit before income tax by approximately For,, the group’s other financial,. hen assets interest and liabilities, rates rise an, the increase/decrease benefit from the revof aluation in interest of the rates company’s ould havemulti anyear immaterial interest rateimpact saps on outeighsthe group’s the profit additional before incomeoneyear tax interest. epense on the company’s floating rate debt. The converse applies hen interest rates decrease.

For the group’s other financial assets and liabilities, an increase/decrease of in interest rates ould have an immaterial impact on the group’s profit before income tax.

udited consolidated financial statements rion ew ealand imited Audited consolidated financial statements rion ew ealand imited

uditedForAudited the consolidatedyear ended financial financial arch statements statements – Orion rion New ew Zealand ealand Limited imited Audited consolidated financial financial statements statements – Orion rion New ew Zealand ealand Limited imited or the year ended arch 20

For the year ended arch or the year ended arch 20

aal sres continued elated arty transations

rou struture red rs aaee The parent is rion ew ealand imited which is owned by Christchurch City oldings imited (CC) (9.2) and the Selwyn redit risk refers to the risk that a counterparty will default on its contractual obligations, resulting in financial loss to the group elated arty transations aal sres continued istrict Council (SC) (0.2). CC is owned by the Christchurch City Council (CCC). Financial instruments that potentially subect the group to concentrations of credit risk consist of cash, short term investments, trade rouelated struture parties include: receivables and derivative financial instruments red rs aaee The parentCCC and is rion SC ew ealand imited which is owned by Christchurch City oldings imited (CC) (9.2) and the Selwyn he group places its cash, short term investments and derivative financial instruments with registered ew ealand banks nly redit risk refers to the risk that a counterparty will default on its contractual obligations, resulting in financial loss to the group istrict Council (SC) (0.2). CC is owned by the Christchurch City Council (CCC). independently rated banks with a minimum Standard & Poor’s (or equivalent) credit rating of ‘A’ or better are accepted. The group  the subsidiaries of CCC and SC limitsFinancial the instrumentscredit exposure that to potentially any one bank subect in accordance the group to with concentrations its boardapproved of credit treasury risk consist policy of cash, short term investments, trade elated parties include:  the group’s key management personnel. receivables and derivative financial instruments  CCC and SC he group manages its exposure to credit risk from trade receivables by performing credit evaluations on customers reuiring credit The group undertakes many transactions with CCC and SC and their related parties all of which are carried out on a commercial and whereverhe group practicable places its cash, and monitoring short term creditinvestments exposures and toderivative individual financial customers instruments with registered ew ealand banks nly arms thelength subsidiaries basis. uring of CCC the and year SC the company repurchased 0000000 of its ordinary shares from its shareholders in proportion to independently rated banks with a minimum Standard & Poor’s (or equivalent) credit rating of ‘A’ or better are accepted. The group both shareholders’ respective shareholding. No material transactions other than the payment of dividends to CC and SC and the limitsursuant the tocredit the electricityexposure toparticipation any one bank code, in accordance the company with may its only board reuireapproved collateral treasury securities policy from its electricity retailer customers if  the group’s key management personnel. those customers do not have a tandard oor’s (or equivalent) minimum credit rating of ‘BBBminus’. he company invoices electricity share buyback were entered into with related parties during the year. The group undertakes many transactions with CCC and SC and their related parties all of which are carried out on a commercial and heretailers group and manages its direct its maor exposure customers to credit on ris thek from th tradeday of receivables the month ofby usage performing (based credit on an evaluations estimation onof usage),customers with reuiring payment creditdue on the armslength basis. uring the year the company repurchased 0000000 of its ordinary shares from its shareholders in proportion to whereverth of that practicable month Invoiced and monitoring amounts creditare subect exposures to subseuent to individual adustments customers for later (more accurate) metering data as outlined under both shareholders’ respective shareholding. No material transactions other than the payment of dividends to CC20 and SC and2 the0 critical udgements, estimates and assumptions in note Collateral security is not generally required from the group’s other customers. ursuant to the electricity participation code, the company may only reuire collateral securities from its electricity retailer customers if shareransations buyback durin were the entered year into with related parties during the year . $000 $000

hethose maximum customers exposure do not have to credit a tandard risk for bank oor’s balances, (or equivalen accountst) minimum receivable credit and ratingderivative of ‘BBB financialminus’. instrument he company assets invoices is eual electricity to the

retailerscarrying valuesand its ofdirect these maor assets customers on the th day of the month of usage (based on an estimation of usage), with payment due on the ividends paid to CC and SC 000 000 th of that month Invoiced amounts are subect to subseuent adustments for later (more accurate) metering data as outlined under Share buyback from CC and SC 9000020 20 here are no significant concentrations of credit risk within trade receivables rade receivables are noninterest bearing he critical udgements, estimates and assumptions in note Collateral security is not generally required from the group’s other customers. ransations durin the year $000 $000 carrying value of trade receivables approximates their estimated fair value

he maximum exposure to credit risk for bank balances, accounts receivable and derivative financial instrument assets is eual to the ividendsPurchases paid from to CCCSC CC and SC 9000 000 ad debts written off mostly relate to debtors who have damaged the company’s electricity distribution network assets he company carrying values of these assets ShareSales tobuy CCCSCback from CC and SC 900000 9 enters arrangements with some of these debtors to allow them to pay their debts off over time hese rearranged debts form the heremajority are of no the significant ‘three months concentrations overdue’ ca oftegory credit inrisk note within trade receivables rade receivables are noninterest bearing he carrying value of trade receivables approximates their estimated fair value Purchases from CCCSCother related parties 229 29

ad debts written off mostly relate to debtors who have damaged the company’s electricity distribution network assets he company arr ales o aal sres Sales to otherCCCSC related parties 90 209 enters arrangements with some of these debtors to allow them to pay their debts off over time hese rearranged debts form the

majorityash and of cash the ‘euivalents,three months trade overdue’ and other category receivables in note , trade payables and borrowings are measured at face value less impairment Purchasesutstandin from alanes other asrelated at partiesarh he group uses observable market prices and discounted cash flow techniues to calculate the fair value of its interest rate swaps 22 29

The discount rate used is based on the applicable market swap curve. This is the ‘level 2’ valuation category as described in IF Sales to other related parties 9 20 arr ales o aal sres Accounts payable to CCCSC 2 2 – Fair alue easurement ash and cash euivalents, trade and other receivables, trade payables and borrowings are measured at face value less impairment Accounts receivable from CCCSC 22 utstandin alanes as at arh

he group uses observable market prices and discounted cash flow techniues to calculate the fair value of its interest rate swaps Accounts payable to other related parties 0 2 ShareThe discountholders’ rate usedequity is based and on the applicable share marketa swap curve. This is the ‘level 2’ valuation category as described in IF Accounts payable to CCCSC 2 2 n – Fair eptember alue easurement , the company repurchased ,, of its ordinary shares from its shareholders at per share, in Accounts receivable from CCCSCother related parties 22 proportion to both shareholders’ respective shareholdings. As a result:  the carrying value of shareholders’ equity decreased by $90m eyAccounts anaeent payable toersonnel other related oensation parties 0 2 Shareholders’ equity and share a Accounts receivable from other related parties  the number of fullypaid ordinary shares of the company on issue reduced by ,, to ,, n eptember , the company repurchased ,, of its ordinary shares from its shareholders at per share, in Salaries and short term employee benefits 2 20 proportionhe par value to both of all shareholders’ shares on issue respective is shareholdings. per share As a result: Postemployment benefits ey anaeent ersonnel oensation 9

 the carrying value of shareholders’ equity decreased by $90m  the number of fullypaid ordinary shares of the company on issue reduced by ,, to ,, therSalaries transations and short term inolin employee related benefits arties 2 20

he par value of all shares on issue is per share Postemployment benefits 9 The group paid directors’ fees totalling $000 during the year (20: $000). o directors received a retirement gift during the year (2015: one director $935). No other transactions were entered into with any of the company’s directors, other than the payment of directors’ther transations fees and theinolin reimbu relatedrsement arties of valid companyrelated epenses such as travel costs to board meetings.

Key management personnel is defined as the company’s directors, the company’s chief executive officer and the company’s managers The group paid directors’ fees totalling $000 during the year (20: $000). o directors received a retirement gift during the who directly report to the chief eecutive officer. ey management personnel purchased goods and services from group companies year (2015: one director $935). No other transactions were entered into with any of the company’s directors, other than the payment of during the year which in total did not eceed $2000 for any individual with the eception of two employees who purchased secondhand directors’ fees and the reimbursement of valid companyrelated epenses such as travel costs to board meetings. vehicles from the group for $9 and $22 respectively (20: all less than $2000). A total of nil was due from key management personnelKey management as at personnel arch 20 is defined(20: $0). as the All company’s transactions directors, were conducted the company’s on standard chief executive commercial officer terms. and the Close company’s family member managerss of certainwho directly key management report to the pechiefrsonnel eecutiv are eemployed officer. ey by themanagement group. The personnel terms and purchased conditions goods of those and arrangements services from aregroup no companiesmore favourableduring the yearthan whichthose inthat total the did group not eceedwould have $2000 adopted for any if thereindividual was withno relationship the eception to keyof two management employees personnel.who purchased secondhand vehicles from the group for $9 and $22 respectively (20: all less than $2000). A total of nil was due from key management personnel as at arch 20 (20: $0). All transactions were conducted on standard commercial terms. Close family members of certain key management personnel are employed by the group. The terms and conditions of those arrangements are no more favourable than those that the group would have adopted if there was no relationship to key management personnel.

udited consolidated financial statements rion ew ealand imited Audited consolidated financial statements rion ew ealand imited

For the year ended arch or the year ended arch 20

aal sres continued elated arty transations

rou struture red rs aaee The parent is rion ew ealand imited which is owned by Christchurch City oldings imited (CC) (9.2) and the Selwyn redit risk refers to the risk that a counterparty will default on its contractual obligations, resulting in financial loss to the group elated arty transations aal sres continued istrict Council (SC) (0.2). CC is owned by the Christchurch City Council (CCC). Financial instruments that potentially subect the group to concentrations of credit risk consist of cash, short term investments, trade rouelated struture parties include: receivables and derivative financial instruments red rs aaee The parentCCC and is rion SC ew ealand imited which is owned by Christchurch City oldings imited (CC) (9.2) and the Selwyn he group places its cash, short term investments and derivative financial instruments with registered ew ealand banks nly redit risk refers to the risk that a counterparty will default on its contractual obligations, resulting in financial loss to the group istrict Council (SC) (0.2). CC is owned by the Christchurch City Council (CCC). independently rated banks with a minimum Standard & Poor’s (or equivalent) credit rating of ‘A’ or better are accepted. The group  the subsidiaries of CCC and SC limitsFinancial the instrumentscredit exposure that to potentially any one bank subect in accordance the group to with concentrations its boardapproved of credit treasury risk consist policy of cash, short term investments, trade elated parties include:  the group’s key management personnel. receivables and derivative financial instruments  CCC and SC he group manages its exposure to credit risk from trade receivables by performing credit evaluations on customers reuiring credit The group undertakes many transactions with CCC and SC and their related parties all of which are carried out on a commercial and hewherever group practicable places its cash, and monitoring short term creditinvestments exposures and toderivative individual financial customers instruments with registered ew ealand banks nly arms thelength subsidiaries basis. uring of CCC the and year SC the company repurchased 0000000 of its ordinary shares from its shareholders in proportion to independently rated banks with a minimum Standard & Poor’s (or equivalent) credit rating of ‘A’ or better are accepted. The group both shareholders’ respective shareholding. No material transactions other than the payment of dividends to CC and SC and the limitsursuant the tocredit the electricityexposure toparticipation any one bank code, in accordance the company with may its only board reuireapproved collateral treasury securities policy from its electricity retailer customers if  the group’s key management personnel. those customers do not have a tandard oor’s (or equivalent) minimum credit rating of ‘BBBminus’. he company invoices electricity share buyback were entered into with related parties during the year. The group undertakes many transactions with CCC and SC and their related parties all of which are carried out on a commercial and heretailers group and manages its direct its maor exposure customers to credit on ris thek from th tradeday of receivables the month ofby usage performing (based credit on an evaluations estimation onof usage),customers with reuiring payment creditdue on the armslength basis. uring the year the company repurchased 0000000 of its ordinary shares from its shareholders in proportion to whereverth of that practicable month Invoiced and monitoring amounts creditare subect exposures to subseuent to individual adustments customers for later (more accurate) metering data as outlined under both shareholders’ respective shareholding. No material transactions other than the payment of dividends to CC20 and SC and2 the0 critical udgements, estimates and assumptions in note Collateral security is not generally required from the group’s other customers. ursuant to the electricity participation code, the company may only reuire collateral securities from its electricity retailer customers if shareransations buyback durin were the entered year into with related parties during the year . $000 $000

he maximum exposure to credit risk for bank balances, accounts receivable and derivative financial instrument assets is eual to the ividendsPurchases paid from to CCCSC CC and SC 9000 000 ad debts written off mostly relate to debtors who have damaged the company’s electricity distribution network assets he company carrying values of these assets ShareSales tobuy CCCSCback from CC and SC 900000 9 enters arrangements with some of these debtors to allow them to pay their debts off over time hese rearranged debts form the majorityhere are of no the significant ‘three months concentrations overdue’ ca oftegory credit inrisk note within trade receivables rade receivables are noninterest bearing he carrying value of trade receivables approximates their estimated fair value Purchases from CCCSCother related parties 922 29

ad debts written off mostly relate to debtors who have damaged the company’s electricity distribution network assets he company arr ales o aal sres Sales to otherCCCSC related parties 09 209 enters arrangements with some of these debtors to allow them to pay their debts off over time hese rearranged debts form the

udited consolidated financial statements rion New ealand imited

uditedAudited consolidated financial financial statements statements – Orion rion New New Zealand ealand Limited imited Auditedudited consolidated consolidated financial financial statements statements – Orion ri onNew New Zealand ealand Limited imited or the year ended 31 arch 201 udited consolidated financial statements rion New ealand imited

‒ or the year ended 31 arch 201 or the year ended 31 arch 201 ‒ or the year ended 31 arch 201

noration aout susidaries tual aret tual onnetics imited is a contractor in the electricity distribution and utility sectors. he company has owned a 100 euity interest in otes tual aret tual otes onnetics since pril 199.

noration aout susidaries Net profit ($m) 1, 2 53. . 2. Net profit ($m) 1, 2 53. . 2. onnetics imited is a contractor in the electricity distribution and utility sectors. he company has owned a 100 euity interest in Net profit to average shareholders’ equity (%) 1, 2 .5 .9 11.1 onnetics since pril 199. Net profit to average shareholders’ equity (%) 1, 2 .5 .9 11.1 ebt to debt plus euity () 3 2 29 10 ebt to debt plus euity () 3 2 29 10 oitents uity to debt plus euity () 3 1 90 uity to debt plus euity () 3 1 90 apital expenditure ,5 2,0 uity to total assets () 3 59 5 0 uity to total assets () 3 59 5 0 perating leases 2,5 1,19 ully imputed dividends ($m) 3 5 ully imputed dividends ($m) 3 5 oitents hare buyback ($m) 90 90 hare buyback ($m) 90 90 ostapital commitments expenditure are expected to be incurred in the next financial year. ,5 2,0

perating leases 2,5 1,19 arianes arianes ote ostta ost commitments are expected to be incurred in the next financial year. ote ostta ontinent assets and liailities 1. Net profit was $.m above the statement of intent target because of: 1. Net profit was $.m above the statement of intent target because of: he group had no contingent assets or liabilities as at 31 arch 201 (2015: nil) elowbudget expenses 3. elowbudget expenses 3. elowbudget interest expense 2.1 iniiantontinent eentsassets aterand liailities alane date elowbudget interest expense 2.1 bovebudget network delivery revenue 1.9 hehe groupgroup ishad unaware no contingent of any significant assets or liabilitiesevents between as at 31 the arch preparation 201 (2015: and nil)authorisation of these financial statements on 10 une bovebudget network delivery revenue 1.9 bovebudget other revenues 1. 201. bovebudget other revenues 1. bovebudget capital contribution revenues 1.2

iniiant eents ater alane date bovebudget capital contribution revenues 1.2 he group is unaware of any significant events between the preparation and authorisation of these financial statements on 10 une bovebudget onnetics net profit 0. bovebudget onnetics net profit 0. 201. elowbudget depreciation expense 0.5 elowbudget depreciation expense 0.5 bovebudget interest rate swap revaluation expense (2.1)

bovebudget interest rate swap revaluation expense (2.1) bovebudget impairment expense (5.1) bovebudget impairment expense (5.1) . .

2. ote 2. ote Net profit was $29.2m below last year’s because of: Net profit was $29.2m below last year’s because of: igher network delivery revenues . igher network delivery revenues . igher capital contribution revenues 0. igher capital contribution revenues 0. ower onnetics net profit (0.3) ower onnetics net profit (0.3) ower other revenues (0.) ower other revenues (0.) igher depreciation expense (1.3) igher depreciation expense (1.3) igher interest rate swap revaluation expense (1.5) igher interest rate swap revaluation expense (1.5) igher interest expense (2.2) igher interest expense (2.2) igher operating expenses (2.) igher operating expenses (2.) mpairment expense (5.1) mpairment expense (5.1) neoff earthuake insurance claim proceeds last year (2.0) neoff earthuake insurance claim proceeds last year (2.0) ther (0.3) ther (0.3) (29.2) (29.2)

ote ote ebt is defined as interest bearing group borrowings, net of cash and cash euivalents. uity is defined as shareholders’ equity. ebt is defined as interest bearing group borrowings, net of cash and cash euivalents. uity is defined as shareholders’ equity.

3 3

udited consolidated financial statements rion New ealand imited

‒ or the year ended 31 arch 201 or the year ended 31 arch 201 ‒ or the year ended 31 arch 201

bovebudget interest rate swap revaluation expense (2.1) bovebudget impairment expense (5.1) bovebudget impairment expense (5.1) . .

3 3

udited osolidated fiaial statemets rio New ealad imited

Auditedudited consolidated osolidated financial fiaial statements statemets – Orion rio New New Zealand ealad Limited imited Audited consolidated financial statements – Orion New Zealand Limited ‒ or the year eded arh 2 ‒ or the year eded arh 2

ppro umber of osumer aetted N pproo umebteior osf tual arget tual weighted average aorshu 2mer 2 2 2 aette2d N oetios tual arget tual weighted average arh 2 2 2 2 2 rio etwor iterruptios

uratiorio et wofo supplyr ite riterruptiosruptios i miutes per year per oeted ustomer () uratio of supply iterruptios i miutes

per year per oeted ustomer ()  urba 2 9

 rural 29  urba 2 9  overall 9 9 2 292  rural 29

 overall 9 9 2 292 Number of supply iterruptios per year per

oeted ustomer () Number of supply iterruptios per year per

oeted ustomer ()  urba . . .

 rural 29 . . .  urba . . .  overall 9 .2 .2 .2 .9  rural 29 . . .

 overall 9 .2 .2 .2 .9

ortant notes ortant. aor notes storms atural disasters ad other atastrophi evets a ause sigifiat umbers ador sigifiat duratios of etwor supply iterruptios. he future occurrence and severity of ‘major events’ cannot be predicted. . aor storms atural disasters ad other atastrophi evets a ause sigifiat umbers ador sigifiat duratios of etwor 2. supplyThe Commerce iterruptios Commission. he future sets occurrence limits for andand assessesseverity of the ‘major industry’s events’ network cannot reliability be predicted performance.. The Commission assesses the industry’s actual performance, after ‘normalising’ for the impacts of ‘major events’. 2. The Commerce Commission sets limits for and assesses the industry’s network reliability performance. The Commission assesses the . heindustry’s targets actual above performance, are osistent after with ‘norma the Commission’slising’ for the etwor impacts reliability of ‘major limits events’ for. the ompay for the year eded arh 2 pursuant to the company’s customised pricequality path (). he ommission’s limits are for the company’s overall network, there is . heo urbarural targets above split. are After o sistentapplying with the the Commission’s Commission’s normalisation etwor reliability methodology, limits for the the company ompay achieved for the theyear overall eded SAIDI arh and SAI2 pursuanttargets above to the i company’s 2. customised pricequality path (). he ommission’s limits are for the company’s overall network, there is o urbarural split. After applying the Commission’s normalisation methodology, the company achieved the overall SAIDI and SAI . targetshe olums above mared i 2 .with a asteris () above are stated gross – before ormalisig for maor evets using the Commission’s methodology. . he olums mared with a asteris () above are stated gross – before ormalisig for maor evets using the Commission’s . methodologyhe gaetted .idustry averages are for all 29 New ealad eletriity distributio etwors ad ilude a miture of rural ad urba etwors. he ompay’s electricity distribution network includes a significant rural component. . he gaetted idustry averages are for all 29 New ealad eletriity distributio etwors ad ilude a miture of rural ad urba . etwors. ad he ompay are stadard’s electricity iteratioal distribution idustry network measures includes of etwor a significant reliability rural performae.component. hey ilude plaed ad uplaed iterruptios. . ad are stadard iteratioal idustry measures of etwor reliability performae. hey ilude plaed ad uplaed iterruptios. system average iterruptio duratio ide  the average duratio of supply iterruptios that eah osumer eperiees.

systemsystem average iterruptio frequeyduratio ide ide  the the average average duratio umber of of supply supply iterruptios iterruptios that that eah eah osumer osumer eperiees. eperiees.

. severe system sow average storm i iterruptio ue 2 added frequey etwor ide iterruptios  the average as umber follows (beforeof supply ormalisatio) iterruptios that eah osumer eperiees.

.  severe s –ow . storm iterruptios i ue 2 added etwor iterruptios as follows (before ormalisatio)

 – .2 miutes iterruptios

 bird strie – 2i tobermiutes 2 added etwor iterruptios as follows (before ormalisatio)

 bird strie – . i toberiterruptios 2 added etwor iterruptios as follows (before ormalisatio)

 – . miutes iterruptios.

 – miutes.

udited osolidated fiaial statemets rio New ealad imited

udited osolidated fiaial statemets rio New ealad imited Audited consolidated financial statements rion ew ealand imited Audited consolidated financial statements – Orion New Zealand Limited AuditedAudited consolidated consolidated financial financial statements statements – Orion ri onNew ew Zealand ealand Limited imited

‒ or the year eded arh 2 ‒ ‒ or the year ended arch ‒ or the year eded arh 2 or the year ended arch

ppro umber of . Lay and commission a permanent 66kV high voltage underground feed from Transpower’s Bromley grid exit point to the . Lay and commission a permanent 66kV high voltage underground feed from Transpower’s Bromley grid exit point to the osumer aetted N caddens, Dallington and awhiti Domain one substations. Then remove the temporary k overhead lines we installed after ppro umber of caddens, Dallington and awhiti Domain one substations. Then remove the temporary k overhead lines we installed after oetios tual arget tual weighted average the ebruary uake aorshu 2mer 2 2 2 aette2d N the ebruary uake oetios tual arget tual weighted average Target date August arh 2 2 2 2 2 Target date August rio etwor iterruptios Status Achieved in early December Status Achieved in early December uratiorio et wofo supplyr ite riterruptiosruptios i miutes ollowing the ebruary uake, we urgently built temporary k overhead lines from the romley grid eit point to our ollowing the ebruary uake, we urgently built temporary k overhead lines from the romley grid eit point to our per year per oeted ustomer () Dallington and awhiti one substations in order to restore power to the eastern suburbs. ur temporary lines were initially uratio of supply iterruptios i miutes Dallington and awhiti one substations in order to restore power to the eastern suburbs. ur temporary lines were initially authorised by Civil Defence and then subseuently by resource consents approved by the CCC. per year per oeted ustomer () authorised by Civil Defence and then subseuently by resource consents approved by the CCC.  urba 2 9 e commissioned and tested our new k underground cables in the eastern suburbs, and we removed the temporary overhead  rural 29 e commissioned and tested our new k underground cables in the eastern suburbs, and we removed the temporary overhead  urba 2 9 lines before their resource consents epired in midDecember .  overall 9 9 2 292 lines before their resource consents epired in midDecember .  rural 29

 overall 9 9 2 292 Number of supply iterruptios per year per . ork with the Canterbury arthuake ecovery Authority CA and the Christchurch City Council to reestablish power and . ork with the Canterbury arthuake ecovery Authority CA and the Christchurch City Council to reestablish power and oeted ustomer () network resilience to the central business district CD according to agreed priorities and timeframes Number of supply iterruptios per year per network resilience to the central business district CD according to agreed priorities and timeframes

oeted ustomer ()  urba . . . Target date ngoing Target date ngoing  rural 29 . . . Status Achieved  urba . . . Status Achieved  overall 9 .2 .2 .2 .9  rural 29 . . . e continue to work with CA, CCC, SCIT and developers on an ongoing basis. e decommission and commission connection e continue to work with CA, CCC, SCIT and developers on an ongoing basis. e decommission and commission connection points and network euipment as necessary and we provide comprehensive information and advice so that developers and their  overall 9 .2 .2 .2 .9 points and network euipment as necessary and we provide comprehensive information and advice so that developers and their advisors know what to epect and can plan accordingly.

advisors know what to epect and can plan accordingly. ur k and k underground cable assets in the CD sustained relatively little damage from the uakes. ur aim is to provide a ortant notes ur k and k underground cable assets in the CD sustained relatively little damage from the uakes. ur aim is to provide a resilient and reliable electricity distribution network to CD businesses and residents in the years ahead. resilient and reliable electricity distribution network to CD businesses and residents in the years ahead.

ortant. aor notes storms atural disasters ad other atastrophi evets a ause sigifiat umbers ador sigifiat duratios of etwor In order to ensure network resilience and safety, we no longer house new substations in building basements that are prone to In order to ensure network resilience and safety, we no longer house new substations in building basements that are prone to supply iterruptios. he future occurrence and severity of ‘major events’ cannot be predicted. flooding in the CD. ood access in the event of an emergency is a priority. . aor storms atural disasters ad other atastrophi evets a ause sigifiat umbers ador sigifiat duratios of etwor flooding in the CD. ood access in the event of an emergency is a priority. 2. supplyThe Commerce iterruptios Commission. he future sets occurrence limits for andand assessesseverity of the ‘major industry’s events’ network cannot reliability be predicted performance.. The Commission assesses the industry’s actual performance, after ‘normalising’ for the impacts of ‘major events’. 2. The Commerce Commission sets limits for and assesses the industry’s network reliability performance. The Commission assesses the . Continue to support the key regional uake recovery planning documents . heindustry’s targets actual above performance, are osistent after with ‘norma the Commission’slising’ for the etwor impacts reliability of ‘major limits events’ for. the ompay for the year eded arh 2 . Continue to support the key regional uake recovery planning documents pursuant to the company’s customised pricequality path (). he ommission’s limits are for the company’s overall network, there is Target date ngoing . ohe urbarural targets above split. are After o sistentapplying with the the Commission’s Commission’s normalisation etwor reliability methodology, limits for the the company ompay achieved for the theyear overall eded SAIDI arh and SAI2 Target date ngoing targetspursuant above to the i company’s 2. customised pricequality path (). he ommission’s limits are for the company’s overall network, there is Status Achieved o urbarural split. After applying the Commission’s normalisation methodology, the company achieved the overall SAIDI and SAI Status Achieved . targetshe olums above mared i 2 .with a asteris () above are stated gross – before ormalisig for maor evets using the Commission’s ur key role here is to restore network resilience and reliability and to plan for future customer load growth and new connections. ur key role here is to restore network resilience and reliability and to plan for future customer load growth and new connections. methodology. ur key planning and accountability document is our tenyear network asset management plan A. . he olums mared with a asteris () above are stated gross – before ormalisig for maor evets using the Commission’s ur key planning and accountability document is our tenyear network asset management plan A. . methodologyhe gaetted .idustry averages are for all 29 New ealad eletriity distributio etwors ad ilude a miture of rural ad urba e aim to ensure that our A remains up to date and consistent with good industry practice, while taking approved regional e aim to ensure that our A remains up to date and consistent with good industry practice, while taking approved regional etwors. he ompay’s electricity distribution network includes a significant rural component. recovery documents fully into account. . he gaetted idustry averages are for all 29 New ealad eletriity distributio etwors ad ilude a miture of rural ad urba recovery documents fully into account. . etwors. ad he ompay are stadard’s electricity iteratioal distribution idustry network measures includes of etwor a significant reliability rural performae. component. hey ilude plaed ad uplaed iterruptios. . ad are stadard iteratioal idustry measures of etwor reliability performae. hey ilude plaed ad uplaed  iterruptios. system average iterruptio duratio ide the average duratio of supply iterruptios that eah osumer eperiees. systemsystem average iterruptio frequeyduratio ide ide  the the average average duratio umber of of supply supply iterruptios iterruptios that that eah eah osumer osumer eperiees. eperiees.

. severe system sow average storm i iterruptio ue 2 added frequey etwor ide iterruptios  the average as umber follows (beforeof supply ormalisatio) iterruptios that eah osumer eperiees.

.  severe s –ow . storm iterruptios i ue 2 added etwor iterruptios as follows (before ormalisatio)

 – .2 miutes iterruptios

 bird strie – 2i tobermiutes 2 added etwor iterruptios as follows (before ormalisatio)  bird strie – . i toberiterruptios 2 added etwor iterruptios as follows (before ormalisatio)  – . miutes iterruptios.  – miutes.

Auditedudited consolidated consolidated financial financial statements statements – Orion rion New ew Zealand ealand Limited Limited Audited consolidated financial statements – Orion New Zealand Limited udited consolidated financial statements rion ew ealand Limited

‒ or the year ended arch 6 ‒ or the year ended arch 6

ntroduction ntroduction e aim to e environmentally responsile consistent with our principal oective to operate as a successful usiness e review e aim to e environmentally responsile consistent with our principal oective to operate as a successful usiness e review our environmental policy at least annually and we pulish it on our wesite ur most significant environmental impacts are our environmental policy at least annually and we pulish it on our wesite ur most significant environmental impacts are • our caron footprint • our caron footprint

• sulphur hexafluoride 6 gas losses to the atmosphere from our network euipment • sulphur hexafluoride 6 gas losses to the atmosphere from our network euipment • unconstrained oil spills from our network transformers • unconstrained oil spills from our network transformers

ontinue to undertake and encourage demand side management ontinue to undertake and encourage demand side management Target date ngoing Target date ngoing tatus chieved tatus chieved ver of our annual caron footprint comes from ver of our annual caron footprint comes from  electrical losses a natural phenomenon caused y heating as electricity passes through network euipment  electrical losses a natural phenomenon caused y heating as electricity passes through network euipment  carbon that’s embedded in our electricity distribution network.  carbon that’s embedded in our electricity distribution network. lectrical losses increase consideraly when network assets are highly loaded during peak demand periods t therefore makes lectrical losses increase consideraly when network assets are highly loaded during peak demand periods t therefore makes sense to try to reduce system peaks via demand side management initiatives where practicale ur initiatives also aim sense to try to reduce system peaks via demand side management initiatives where practicale ur initiatives also aim to prevent over investment in network assets to prevent over investment in network assets ur network price structures aim to reflect the long run economic costs of providing our network delivery service The aim is for ur network price structures aim to reflect the long run economic costs of providing our network delivery service The aim is for consumers to make efficient decisions aout when to use and not use electricity in order to reduce system peaks and reduce the consumers to make efficient decisions aout when to use and not use electricity in order to reduce system peaks and reduce the long run costs of our network e also help local usinesses to install standy generation and we send them realtime price long run costs of our network e also help local usinesses to install standy generation and we send them realtime price signals in order to reduce system peaks n many cases standy generation helps reduce system peaks and this reduces electrical signals in order to reduce system peaks n many cases standy generation helps reduce system peaks and this reduces electrical losses and the need for additional network assets e continue to cooperate with other electricity distriutors on the upper outh losses and the need for additional network assets e continue to cooperate with other electricity distriutors on the upper outh sland centralised load management control system – this assists with reducing system peaks on the outh sland transmission sland centralised load management control system – this assists with reducing system peaks on the outh sland transmission grid grid

eep annual 6 gas losses elow per year eep annual 6 gas losses elow per year Target date ngoing Target date ngoing tatus chieved tatus chieved ulphur hexafluoride is an excellent electrical insulator. It’s inorganic, colourless, odourless and nonflammable. But it’s a potent ulphur hexafluoride is an excellent electrical insulator. It’s inorganic, colourless, odourless and nonflammable. But it’s a potent greenhouse gas is mainly a legacy network euipment issue for the industry ur recent purchases of Transpower spur assets greenhouse gas 6 is mainly a legacy network euipment issue for the industry ur recent purchases of Transpower spur assets means that we now 6have over tonne of the gas in our network – so we are now part of the Environmental Protection Agency’s means that we now have over tonne of the gas in our network – so we are now part of the Environmental Protection Agency’s mandatory compliance regime for n our memorandum of understanding with the inistry for the nvironment we commit to mandatory compliance regime for 6 n our memorandum of understanding with the inistry for the nvironment we commit to keeping our annual gas losses elow6 of the total contained in our network euipment ur gas losses were elow keeping our annual 6 gas losses elow of the total contained in our network euipment ur 6 gas losses were elow in 6 6 6 in 6

eep noncontained transformer oil spills to nil eep noncontained transformer oil spills to nil Target date ngoing Target date ngoing tatus chieved tatus chieved e have installed oil containment unding at our one sustations e also have oil spill mitigation procedures to uickly and e have installed oil containment unding at our one sustations e also have oil spill mitigation procedures to uickly and effectively deal with incidents should they occur uring the year we had no significant oil spills effectively deal with incidents should they occur uring the year we had no significant oil spills

Continue to support the Christchurch City Council’s sustainable energy strategy Continue to support the Christchurch City Council’s sustainable energy strategy Target date ngoing Target date ngoing tatus chieved tatus chieved e continue to seek ways to reduce peak loads on our network and increase our network load factor e also enale the safe and e continue to seek ways to reduce peak loads on our network and increase our network load factor e also enale the safe and efficient connection of a range of distriuted electricity generation including renewales efficient connection of a range of distriuted electricity generation including renewales 66 66

Auditedudited consolidated consolidated financial financial statements statements – Orion rion New ew Zealand ealand Limited Limited AuditedAudited consolidated consolidated financial financial statements statements – Orion ri onNew ew Zealand ealand Limited imited udited consolidated financial statements rion ew ealand Limited Audited consolidated financial statements rion ew ealand imited

‒ ‒ or the year ended arch 6 ‒ or the year ended arch ‒ or the year ended arch 6 or the year ended arch

ntroduction . ero work related lost time accidents for our employees and contractors ntroduction . ero work related lost time accidents for our employees and contractors e aim to e environmentally responsile consistent with our principal oective to operate as a successful usiness e review arget date arch e aim to e environmentally responsile consistent with our principal oective to operate as a successful usiness e review our environmental policy at least annually and we pulish it on our wesite ur most significant environmental impacts are arget date arch our environmental policy at least annually and we pulish it on our wesite ur most significant environmental impacts are tatus ot achieved • our caron footprint tatus ot achieved • our caron footprint ur aim is ero harm. ur aim is ero harm. • sulphur hexafluoride 6 gas losses to the atmosphere from our network euipment • sulphur hexafluoride 6 gas losses to the atmosphere from our network euipment his target covers rion and its contractors including Connetics. his is a challenging target, due to the physical nature of the • unconstrained oil spills from our network transformers hiswork target reuired covers on our rion electricity and its contractorsdistribution includingnetwork. Connetics. his is a challenging target, due to the physical nature of the • unconstrained oil spills from our network transformers work reuired on our electricity distribution network. In the year to arch , we had three employee lost time accidents, resulting in days of lost time euivalent period last

Inyear the four year accidents to arch and days, we ofhad lost three time. employee lost time accidents, resulting in days of lost time euivalent period last ontinue to undertake and encourage demand side management year four accidents and days of lost time. ontinue to undertake and encourage demand side management In the year to arch , our contractors had seven lost time accidents, resulting in days of lost time euivalent period last Target date ngoing yearIn the nine year accidents to arch and days, our ofcontractors lost time. had seven lost time accidents, resulting in days of lost time euivalent period last Target date ngoing year nine accidents and days of lost time. tatus chieved tatus chieved ver of our annual caron footprint comes from . Comply with health and safety legislation ver of our annual caron footprint comes from . Comply with health and safety legislation  electrical losses a natural phenomenon caused y heating as electricity passes through network euipment  electrical losses a natural phenomenon caused y heating as electricity passes through network euipment arget date arch arget date arch  carbon that’s embedded in our electricity distribution network.  carbon that’s embedded in our electricity distribution network. tatus Achieved tatus Achieved lectrical losses increase consideraly when network assets are highly loaded during peak demand periods t therefore makes lectrical losses increase consideraly when network assets are highly loaded during peak demand periods t therefore makes e aim to have safe worksites and a safe network – for our employees, contractors, visitors and the public. Electricity and sense to try to reduce system peaks via demand side management initiatives where practicale ur initiatives also aim e aim to have safe worksites and a safe network – for our employees, contractors, visitors and the public. Electricity and sense to try to reduce system peaks via demand side management initiatives where practicale ur initiatives also aim electricity distribution are inherently high risk. he electricity industry has specific health and safety legislative and regulatory to prevent over investment in network assets electricity distribution are inherently high risk. he electricity industry has specific health and safety legislative and regulatory to prevent over investment in network assets reuirements. reuirements. ur network price structures aim to reflect the long run economic costs of providing our network delivery service The aim is for ur network price structures aim to reflect the long run economic costs of providing our network delivery service The aim is for rion and Connetics are well underway with riskbased safety improvement programmes, in advance of new health and safety consumers to make efficient decisions aout when to use and not use electricity in order to reduce system peaks and reduce the rion and Connetics are well underway with riskbased safety improvement programmes, in advance of new health and safety consumers to make efficient decisions aout when to use and not use electricity in order to reduce system peaks and reduce the legislation taking effect in April . ey programme initiatives include long run costs of our network e also help local usinesses to install standy generation and we send them realtime price legislation taking effect in April . ey programme initiatives include long run costs of our network e also help local usinesses to install standy generation and we send them realtime price signals in order to reduce system peaks n many cases standy generation helps reduce system peaks and this reduces electrical • increased profile and leadership of the importance of safety and what we want to achieve – safe outcomes signals in order to reduce system peaks n many cases standy generation helps reduce system peaks and this reduces electrical losses and the need for additional network assets e continue to cooperate with other electricity distriutors on the upper outh • increased profile and leadership of the importance of safety and what we want to achieve – safe outcomes losses and the need for additional network assets e continue to cooperate with other electricity distriutors on the upper outh sland centralised load management control system – this assists with reducing system peaks on the outh sland transmission • effective engagement at all levels – the board of directors, management, all employees, contractors and suppliers sland centralised load management control system – this assists with reducing system peaks on the outh sland transmission • effective engagement at all levels – the board of directors, management, all employees, contractors and suppliers grid • increased use of lead and lag indicators grid • increased use of lead and lag indicators

• effective and timely investigation, analysis and corrective actions for accidents and near miss incidents. • effective and timely investigation, analysis and corrective actions for accidents and near miss incidents. eep annual 6 gas losses elow per year eep annual 6 gas losses elow per year Target date ngoing . ero inury accidents excluding car versus pole traffic accidents involving members of the public Target date ngoing . ero inury accidents excluding car versus pole traffic accidents involving members of the public tatus chieved arget date ngoing tatus chieved arget date ngoing ulphur hexafluoride is an excellent electrical insulator. It’s inorganic, colourless, odourless and nonflammable. But it’s a potent ulphur hexafluoride is an excellent electrical insulator. It’s inorganic, colourless, odourless and nonflammable. But it’s a potent tatus Achieved greenhouse gas is mainly a legacy network euipment issue for the industry ur recent purchases of Transpower spur assets tatus Achieved greenhouse gas 6 is mainly a legacy network euipment issue for the industry ur recent purchases of Transpower spur assets means that we now 6have over tonne of the gas in our network – so we are now part of the Environmental Protection Agency’s his target covers all accidents on our network, except for car versus pole accidents. means that we now have over tonne of the gas in our network – so we are now part of the Environmental Protection Agency’s his target covers all accidents on our network, except for car versus pole accidents. mandatory compliance regime for 6 n our memorandum of understanding with the inistry for the nvironment we commit to mandatory compliance regime for 6 n our memorandum of understanding with the inistry for the nvironment we commit to In the year to arch , no members of the public had an inury accident related to our electricity distribution network or work keeping our annual 6 gas losses elow of the total contained in our network euipment ur 6 gas losses were elow In the year to arch , no members of the public had an inury accident related to our electricity distribution network or work keeping our annual 6 gas losses elow of the total contained in our network euipment ur 6 gas losses were elow sites euivalent period last year nil in 6 sites euivalent period last year nil in 6

eep noncontained transformer oil spills to nil eep noncontained transformer oil spills to nil Target date ngoing Target date ngoing

tatus chieved tatus chieved e have installed oil containment unding at our one sustations e also have oil spill mitigation procedures to uickly and e have installed oil containment unding at our one sustations e also have oil spill mitigation procedures to uickly and effectively deal with incidents should they occur uring the year we had no significant oil spills effectively deal with incidents should they occur uring the year we had no significant oil spills

e continue to seek ways to reduce peak loads on our network and increase our network load factor e also enale the safe and e continue to seek ways to reduce peak loads on our network and increase our network load factor e also enale the safe and efficient connection of a range of distriuted electricity generation including renewales efficient connection of a range of distriuted electricity generation including renewales 66 66

Audited consolidated financial statements – Orion New Zealand Limited Audited consolidated financial statements – Orion New Zealand Limited

‒ ‒

fety education programme covers issues such as tree owners’ responsibilities near overhead lines, close approach to fety education programme covers issues such as tree owners’ responsibilities near overhead lines, close approach to – –      work with the Electricity Engineers’ Association (EEA) and representatives from across the electricity industry on a p  work with the Electricity – Engineers’ Association (EEA) and representatives from across the electricity industry on a p –  

res employees’ perceptions of workplace culture attributes. We’re now working res employees’ perceptions of workplace culture attributes. We’re now working

   

Audited consolidated financial statements – Orion New Zealand Limited AuditedAudited consolidated consolidated financial financial statements statements – Orion ri onNew ew Zealand ealand Limited imited Audited consolidated financial statements rion ew ealand imited

‒ ‒ ‒ or the year ended arch ‒ or the year ended arch

. ontinue with our rion engineering development programme . ontinue with our rion engineering development programme arget date ngoing arget date ngoing tatus Achieved tatus Achieved fety education programme covers issues such as tree owners’ responsibilities near overhead lines, close approach to As at arch , we employed seven employees in our engineering development programme (euivalent date last year si). fety education programme covers issues such as tree owners’ responsibilities near overhead lines, close approach to Asuring at the arch year two ,employee we employeds were seven appointed employees to permanent in our engineering roles with development rion. programme (euivalent date last year si). uring the year two employees were appointed to permanent roles with rion. ur programme continues to successfully develop and place talented and motivated people into key positions in our business. urositions programme in the programme continues to are successfully advertised develop internally and and place eternally. talented uccessful and motivated candidates people areinto selectedkey positions on merit. in our business. ositions in the programme are advertised internally and eternally. uccessful candidates are selected on merit. – Engineering trainees are trained and gain work eperience in the business, with a view to placing them in areas with skill shortages – Engineeringandor succession trainees oppor aretunities. trained andrainees gain workusually eperience complete in the the programme business, with in three a view years, to placing and are them then in placed areas within permanent skill shortages roles inandor the company. succession opportunities. rainees usually complete the programme in three years, and are then placed in permanent roles in the company. . ontinue to develop our onnetics apprentice scheme . ontinue to develop our onnetics apprentice scheme arget date ngoing   arget date ngoing tatus Achieved tatus Achieved As at arch , onnetics employed apprentices (euivalent date last year ) as follows  As at arch , onnetics employed apprentices (euivalent date last year ) as follows   electrical – including substations, streetlighting and wider electrician units  work with the Electricity Engineers’ Association (EEA) and representatives from across the electricity industry on a p  electrical – including substations, streetlighting and wider electrician units  work with the Electricity – Engineers’ Association (EEA) and representatives from across the electricity industry on a p  multiskill – overhead lines and underground cables –  multiskill – overhead lines and underground cables  overhead lines.  overhead lines.   . ontinue to support the rades nnovation entre

. ontinue to support the rades nnovation entre arget date ngoing arget date ngoing tatus Achieved tatus Achieved he hristchurch olytechnic nstitute of echnology () has a simulated subdivision at its ullivan Avenue site, where trades hetrainees hristchurch can be trained olytechnic in real nstitute life network of echnology situations. () he facility has a issimulated fully operational subdivision for electricityat its ullivan distribution Avenue site,– including where troverheadades res employees’ perceptions of workplace culture attributes. We’re now working lines,trainees underground can be trained cables in real and lifesubstations. network situations. he facility he is an facility important is fully part operational of our competence for electricity training distribution for our employees,– including overheadfor our res employees’ perceptions of workplace culture attributes. We’re now working lines,contractors underground and for cablesthe industry. and substations. he facility is an important part of our competence training for our employees, for our contractors and for the industry.

   

Audited consolidated financial statements – Orion New Zealand Limited Audited consolidated financial statements – Orion New Zealand Limited

Independent Auditor’s Report

Independent Auditor’s Report fraud or error. In maing those ris assessments, we consider internal control relevant to the preparation of the Group’s o te reders o rion e end iited roup’s financial statements and performance information in order to design audit procedures that are appropriate in the inni stteents nd perorne inortion o te reders o rion e end iited roup’s circumstances but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. or te er ended r inni stteents nd perorne inortion An audit also involves evaluating or te er ended r  the appropriateness of accounting policies used and whether the have een consistentl applied The uditoenea is the audito o ion e eaand imited oup the oup The uditoenea has appointed me  the reasonaleness of the significant accounting estimates and udgements made the oard of irectors ohn acey usin the sta and esouces o udit e eaand to cay out the audit o the inancia statements and the Thepeomance uditoenea inomation is the o audito the oup o ion consistin e eaand o ion imited e eaand oup theimited oup and itsThe susid uditoiaiesenea on he has eha appointed me  the appropriateness of the performance information within the Group’s framework for reporting performance; ohn acey usin the sta and esouces o udit e eaand to cay out the audit o the inancia statements and the pinionpeomance on te inomation inni stteents o the oup nd consistin te perorne o ion e inortion eaand imited and its susidiaies on he eha  the adeuac of the disclosures in the financial statements and in the performance information and  pinione hae on audited te inni stteents nd te perorne inortion the overall presentation of the financial statements and the performance information.

e hae theaudited inancia statements o the oup on paes to that compise the statement o inancia position as at e did not eamine ever transaction, nor do we guarantee complete accurac of the financial statements and the ach the statement o compehensie income statement o chanes in euity and statement o cash performance information. Also we did not evaluate the securit and controls over the electronic pulication of the financial  osthe inancia o the statementsyea ended oon the that oup date andon paes the notes to to the that inancia compise statements the statem thatent incude o inancia accountin position poicies as at and statements and the performance information. othe ach epanatoy the inomation statement o and co mpehensie income statement o chanes in euity and statement o cash os o the yea ended on that date and the notes to the inancia statements that incude accountin poicies and e elieve we have otained sufficient and appropriate audit evidence to provide a asis for our audit opinion.  theothe peomance epanatoy inomation inomation o and the oup on paes to Responsibilities of the Board of Directors

n ou opinionthe peomance inomation o the oup on paes to he oard of irectors is responsile for the preparation and fair presentation of financial statements in accordance with ew ealand euivalents to International inancial eporting Standards and generall accepted accounting practice, and for the  the inancia statements o the oup n ou opinion preparation and fair presentation of performance information for the Group.  pesent aiy in a mateia espects  the inancia statements o the oup he oard of irectors’ responsiilities arise from the nerg ompanies Act .

 its inancia position as at ach and  pesent aiy in a mateia espects he oard of irectors is also responsile for such internal control as it determines is necessar to enale the preparation of

  its inancia positionpeomance as at and ach cash os o and the yea then ended and financial statements and performance information that are free from material misstatement, whether due to fraud or error. he oard of irectors is also responsile for the pulication of the financial statements and the performance information,  compy ith eneay accepted accountin pactice in e eaand in accodance ith e eaand  its inancia peomance and cash os o the yea then ended and whether in printed or electronic form. euiaents to ntenationa inancia epotin tandads  compy ith eneay accepted accountin pactice in e eaand in accodance ith e eaand Responsibilities of the Auditor  the peomanceeuiaents inomation to ntenationa o the oup inancia pesents epotin aiy in tandadsa mateia espects the Group’s achievements measued aainst the peomance taets adopted o the yea ended ach e are responsile for epressing an independent opinion on the financial statements and the performance information and  the peomance inomation o the oup pesents aiy in a mateia espects the Group’s achievements reporting that opinion to ou ased on our audit. ur responsiilit arises from the ulic Audit Act . u auditme asasued competed aainst on the peomance une This taets is the adopted date at ohich the ou yea opinion ended is epessed ach Independence uThe asisaudit oas ou competed opinion is on epained une eo This n addition is the date e at outine hich the ou esponsii opinion isities epessed o the oad o iectos and ou esponsiiities and epain ou independence hen carring out the audit, we followed the independence reuirements of the AuditorGeneral, which incorporate the The asis o ou opinion is epained eo n addition e outine the esponsiiities o the oad o iectos and ou independence reuirements of the ternal eporting oard. esponsiiitiessis o opinion and epain ou independence In addition to the audit, we have carried out two assurance engagements for the compan. hese engagements were in e caied out ou audit in accodance ith the uditoGeneral’s Auditing Standards, which incorporate the International sis o opinion respect of the company’s disclosure information prepared under the Electricity Distribution Information Disclosure tandads on uditin e eaand Those standads euie that e compy ith ethica euiements and pan and cay etermination and the ompliance Statement prepared under the rion ew ealand imited ustomised riceualit eout caiedou audit out to ou otain audit easonae in accodance assuance ith the aout udito hetheGeneral’s the inancia Auditing statements Standards, and which the incorporatepeomance the inomation International ae ath etermination . hese assignments are compatile with the independence reuirements. tandadsee om mateiaon uditin misstatement e eaand Those standads euie that e compy ith ethica euiements and pan and cay out ou audit to otain easonae assuance aout hethe the inancia statements and the peomance inomation ae ther than the audit, and these assignments, we have no relationship with or interests in the Group. eeateia om misstatements mateia misstatement ae dieences o omissions o amounts and discosues that in ou udement ae iey to inuence readers’ overall understanding of the financial statements and the performance information. If we had found material misstatementsateia misstatements that ee ae not dieences coected oe omissions oud hae o amountseeed toand them discosues in ou opinion that in ou udement ae iey to inuence readers’ overall understanding of the financial statements and the performance information. If we had found material misstatementsn audit inoes that cayin ee not out coected pocedues e to oud otain hae audit eeed eidence to aout them inthe ou amounts opinion and discosues in the inancia statements and in the peomance inomation The pocedues seected depend on ou udement incudin ou assessmentn audit inoes o iss cayin o mateia out pocedues misstatement to otain o the auditinancia eidence statements aout and the theamounts peomance and discosues inomation in the hethe inancia due to ohn ace statements and in the peomance inomation The pocedues seected depend on ou udement incudin ou Audit ew ealand assessment o iss o mateia misstatement o the inancia statements and the peomance inomation hethe due to n ehalf of the AuditorGeneral hristchurch, ew ealand

Audited consolidated financial statements – Orion New Zealand Limited Audited consolidated financial statements – Orion New Zealand Limited

Independent Auditor’s Report

 its inancia position as at ach and  pesent aiy in a mateia espects he oard of irectors is also responsile for such internal control as it determines is necessar to enale the preparation of

OrionOrion New New Zealand Zealand Limited Limited annual annual report –– 3131 March March 2016 2016

Orion New Zealand Limited annual report – 31 March 2016 Corporate governance statement Corporate governance statement Ownership

The company is owned by: Ownership  Christchurch City Holdings Limited (which is 100% owned by the Christchurch City Council) 89.275% The company is owned by:  Selwyn District Council 10.725%  Christchurch City Holdings Limited (which is 100% owned by the Christchurch City Council) 89.275% 100.000%  Selwyn District Council 10.725%

100.000% Principal activities

The group’s principal activities during the year were to: Principal activities  The group provide’s principal electricity activities distribution during the network year were services to: to customers in the Christchurch and central Canterbury region  provide contracting services in the utilities sector  provide electricity distribution network services to customers in the Christchurch and central Canterbury region  seek investment opportunities in the infrastructure and energy sectors.  provide contracting services in the utilities sector

 seek investment opportunities in the infrastructure and energy sectors. Role of the board The company’s shareholders appoint the directors to govern and direct the company’s activities. The board of directors is the overall and final Rolebody ofresponsible the board for the proper direction and control of the company’s activities and decision-making within the company. The board’s Theresponsibility company’s includes shareholders areas ofappoint stewardship the directors such as: to govern and direct the company’s activities. The board of directors is the overall and final body responsible for the proper direction and control of the company’s activities and decision-making within the company. The board’s  responsibility commercial includes performance areas of stewardship such as:  business plans and budgets  commercial performance  company policies  business plans and budgets  financial and dividend policies  company policies  management oversight and development  financial and dividend policies  delegations of authority  management oversight and development  identification and management of business risks  delegations of authority  identification and management of business opportunities  identification and management of business risks  internal control systems  identification and management of business opportunities  integrity of management information systems  internal control systems  relationships with stakeholders and external parties  integrity of management information systems  compliance with relevant law  relationships with stakeholders and external parties  reports to shareholders.  compliance with relevant law In accordance with section 36 of the Energy Companies Act 1992, the company’s principal objective is to operate as a successful business.  reports to shareholders.

In accordance with section 36 of the Energy Companies Act 1992, the company’s principal objective is to operate as a successful business. Statement of intent In accordance with section 39 of the Energy Companies Act 1992 and the company’s constitution, in February each year the board submits a draftStatement statement of intent of intent (SOI) to its shareholders. The draft SOI sets out the company’s overall objectives and intentions, as well as financial, earthquIn accordanceake recovery, with section network 39 ofreliability, the Energy environmental, Companies Act community, 1992 and theemployment company’s and constitution, health and insafety February performance each year targets the board for the submits next three a draftfinancial statement years. of intent (SOI) to its shareholders. The draft SOI sets out the company’s overall objectives and intentions, as well as financial, earthquake recovery, network reliability, environmental, community, employment and health and safety performance targets for the next three financialAfter due years consultation. with the company’s shareholders and after considering comments from those shareholders, the board approves the final SOI and delivers it to the company’s shareholders. A copy is also placed on the company’s public website. After due consultation with the company’s shareholders and after considering comments from those shareholders, the board approves the final SOIThe andboard delivers also aims it to tothe ensure company’s that shareholders shareholders are. A copyinformed is also of placedall major on developmentsthe company’s andpublic issues website. affecting the company.

The board also aims to ensure that shareholders are informed of all major developments and issues affecting the company. Board membership Pursuant to the company’s constitution: Board membership  one director is appointed by the Selwyn District Council Pursuant to the company’s constitution:  all other directors are appointed by Christchurch City Holdings Limited.  one director is appointed by the Selwyn District Council The board chairman is elected by the board.  all other directors are appointed by Christchurch City Holdings Limited.

The board chairman is elected by the board. Board operation The operation of the board is governed by the company’s constitution and the board’s code of conduct. Board operation The operationboard chairman of the boardhas a leadershipis governed role by thein the company’s conduct constitutionof the board andand theits relationshipboard’s code with of conduct. the shareholders and other major stakeholders. The chairman maintains a close professional relationship with the company’s chief executive officer, and through him, the senior management Theteam. board chairman has a leadership role in the conduct of the board and its relationship with the shareholders and other major stakeholders. The chairman maintains a close professional relationship with the company’s chief executive officer, and through him, the senior management team.New directors undertake an induction process to familiarise them with matters related to the company. 72 New directors undertake an induction process to familiarise them with matters related to the company. 72

Orion New Zealand Limited annual report – 31 March 2016 rionOrion ew New ealand Zealand imited Limited annual annual report –– 3131 March March 2016 2016 rion ew ealand imited annual report – 31 March 2016 Orion New Zealand Limited annual report – 31 March 2016 Corporate governance statement Corporate governance statement Corporate governance statement

Corporate governance statement Ownership

The company is owned by: Code of conduct Ownership Code of conduct The board has adopted a code of conduct. The code clarifies how the board and directors shall undertake their responsibilities, including:  Christchurch City Holdings Limited (which is 100% owned by the Christchurch City Council) 89.275% The company is owned by: The board has adopted a code of conduct. The code clarifies how the board and directors shall undertake their responsibilities, including:  Selwyn District Council 10.725%  the role and fundamental obligations of the board and directors  Christchurch City Holdings Limited (which is 100% owned by the Christchurch City Council) 89.275%  the role and fundamental obligations of the board and directors 100.000%  Selwyn District Council 10.725%  the terms of reference and operation of board committees  the terms of reference and operation of board committees 100.000%  independence and conflicts of interest, including any conflicts with management  independence and conflicts of interest, including any conflicts with management Principal activities  board procedures The group’s principal activities during the year were to:  board procedures Principal activities  the role of the chairman  provide electricity distribution network services to customers in the Christchurch and central Canterbury region  the role of the chairman The group’s principal activities during the year were to:  interaction with the chief executive officer and the senior management team  provide contracting services in the utilities sector  interaction with the chief executive officer and the senior management team  provide electricity distribution network services to customers in the Christchurch and central Canterbury region  reliance on information and independent advice  seek investment opportunities in the infrastructure and energy sectors.  reliance on information and independent advice  provide contracting services in the utilities sector  confidentiality of company information  confidentiality of company information  seek investment opportunities in the infrastructure and energy sectors. Role of the board  shareholder participation  shareholder participation The company’s shareholders appoint the directors to govern and direct the company’s activities. The board of directors is the overall and final  board and director performance review and development. Role of the board  board and director performance review and development. body responsible for the proper direction and control of the company’s activities and decision-making within the company. The board’s The board reviews the code of conduct every year. Theresponsibility company’s includes shareholders areas ofappoint stewardship the directors such as: to govern and direct the company’s activities. The board of directors is the overall and final The board reviews the code of conduct every year. body responsible for the proper direction and control of the company’s activities and decision-making within the company. The board’s  responsibility commercial includes performance areas of stewardship such as: Policies Policies  business plans and budgets The board reviews the company’s key policies, and any recommendations for changes from management.  commercial performance The board reviews the company’s key policies, and any recommendations for changes from management.  company policies  business plans and budgets Board performance and review  financial and dividend policies Board performance and review  company policies The board regularly reviews its performance and the performance of the chief executive officer. The reviews aim to identify opportunities and  management oversight and development Theset plan boards for regularly performance reviews development its performa andnce improvement and the performance. of the chief executive officer. The reviews aim to identify opportunities and  financial and dividend policies set plans for performance development and improvement.  delegations of authority  management oversight and development Board meetings  identification and management of business risks Board meetings  delegations of authority The board meets approximately ten times per year. Additional meetings are convened as and when reuired. The board’s annual work  identification and management of business opportunities The board meets approximately ten times per year. Additional meetings are convened as and when reuired. The board’s annual work  identification and management of business risks programme is set by the board before the start of each calendar year. programme is set by the board before the start of each calendar year.  internal control systems  identification and management of business opportunities The board receives formal agenda papers and regular reports, generally a week in advance of meetings. The board receives formal agenda papers and regular reports, generally a week in advance of meetings.  integrity of management information systems  internal control systems enior managers are regularly involved in board discussions. irectors also have opportunities to obtain further information and seek enior managers are regularly involved in board discussions. irectors also have opportunities to obtain further information and seek  relationships with stakeholders and external parties independent expert advice.  integrity of management information systems independent expert advice.  compliance with relevant law  relationships with stakeholders and external parties Board committees  reports to shareholders. Board committees  compliance with relevant law The board delegates some responsibilities and tasks to board committees. owever, the board retains the ultimate responsibility and In accordance with section 36 of the Energy Companies Act 1992, the company’s principal objective is to operate as a successful business. Theaccountability board delegate for anys some committee’s responsibilitie actionss orand inactions. tasks to boardAll directors committee receives. owever, agenda papers the board for committeeretains the meetings ultimate responsibilityand all directors and have the  reports to shareholders. accountabilityright to attend forcommittee any committee’s meetings. actions or inactions. All directors receive agenda papers for committee meetings and all directors have the In accordance with section 36 of the Energy Companies Act 1992, the company’s principal objective is to operate as a successful business. right to attend committee meetings. Statement of intent The board’s two standing committees are as follows: The board’s two standing committees are as follows: In accordance with section 39 of the Energy Companies Act 1992 and the company’s constitution, in February each year the board submits a Statement of intent  the audit committee liaises with the company’s independent auditor and it reviews the uality and reliability of internal controls and draft statement of intent (SOI) to its shareholders. The draft SOI sets out the company’s overall objectives and intentions, as well as financial,  financialthe audit informationcommittee liaises used by with and the issued company’s by the boardindependent auditor and it reviews the uality and reliability of internal controls and earthquIn accordanceake recovery, with section network 39 ofreliability, the Energy environmental, Companies Act community, 1992 and theemployment company’s and constitution, health and insafety February performance each year targets the board for the submits next three a financial information used by and issued by the board draftfinancial statement years. of intent (SOI) to its shareholders. The draft SOI sets out the company’s overall objectives and intentions, as well as financial,  the remuneration committee reviews the company’s remuneration policies and practices, and reviews and sets the remuneration of  the remuneration committee reviews the company’s remuneration policies and practices, and reviews and sets the remuneration of earthquake recovery, network reliability, environmental, community, employment and health and safety performance targets for the next three the company’s chief executive officer and senior management team respectively. the company’s chief executive officer and senior management team respectively. financialAfter due years consultation. with the company’s shareholders and after considering comments from those shareholders, the board approves the final SOI and delivers it to the company’s shareholders. A copy is also placed on the company’s public website. The following directors served as standing committee members during the year ended 31 arch 216: The following directors served as standing committee members during the year ended 31 arch 216: After due consultation with the company’s shareholders and after considering comments from those shareholders, the board approves the final The board also aims to ensure that shareholders are informed of all major developments and issues affecting the company. SOI and delivers it to the company’s shareholders. A copy is also placed on the company’s public website. Audit committee Remuneration committee Audit committee Remuneration committee The board also aims to ensure that shareholders are informed of all major developments and issues affecting the company. aul unro – chairman eoff aey – chairman

Board membership aul unro – chairman eoff aey – chairman ohn Austin eremy mith Pursuant to the company’s constitution: ohn Austin eremy mith Board membership icola Crauford  one director is appointed by the Selwyn District Council icola Crauford Pursuant to the company’s constitution: eremy mith eremy mith  all other directors are appointed by Christchurch City Holdings Limited.  one director is appointed by the Selwyn District Council

The board chairman is elected by the board.  all other directors are appointed by Christchurch City Holdings Limited.

The board chairman is elected by the board. Board operation

The operation of the board is governed by the company’s constitution and the board’s code of conduct. Board operation

The operationboard chairman of the boardhas a leadershipis governed role by thein the company’s conduct constitutionof the board andand theits relationshipboard’s code with of conduct. the shareholders and other major stakeholders. The chairman maintains a close professional relationship with the company’s chief executive officer, and through him, the senior management team.The board chairman has a leadership role in the conduct of the board and its relationship with the shareholders and other major stakeholders. The chairman maintains a close professional relationship with the company’s chief executive officer, and through him, the senior management New directors undertake an induction process to familiarise them with matters related to the company. team. 72 3 New directors undertake an induction process to familiarise them with matters related to the company. 3

rionOrion ew New ealand Zealand imited Limited annual annual report –– 3131 March March 2016 2016 rion ew ealand imited annual report – 31 March 2016 Corporate governance statement Corporate governance statement

Subsidiary companies SubsidiaryThe following companies served as directors of subsidiary companies during the year ended arch The following served as directors of subsidiary companies during the year ended arch onnetics imited ob amieson chairman, rendan earney, eoff aey onnetics imited ob amieson chairman, rendan earney, eoff aey rion ew ealand entures imited rendan earney rion ew ealand entures imited rendan earney

Legislative compliance LegislativeThe board receives compliance regular updates and representations from management on legislative compliance. reas of relevant law include corporate, taxation,The board financial receives reporting, regular updates electricity and industry representations regulation, from commercial, management environmental, on legislative human compliance. resources, reas health of relevant and safety law includeand privacy. corporate, ompliancetaxation, financial manuals reporting, and training electricity are made industry available regulation, to all commercial,employees and environmental, the company humanengages resources, independent health experts and safetyfor advice and onprivacy. some omplianceissues. manuals and training are made available to all employees and the company engages independent experts for advice on some issues. Directors’ insurance Directors’The company insurance arranges comprehensive liability insurance policies for the group, directors and officers within the limits and reuirements as set Theout incompany the ompanies arranges ct comprehensive 1993 and the company’sliability insurance constitution policies. for the group, directors and officers within the limits and reuirements as set out in the ompanies ct 1993 and the company’s constitution. Loans to directors LoansThe group to directors does not make loans to directors. The group does not make loans to directors. Donations DonationsThe group made , of donations to charitable causes during the year ,. The group made , of donations to charitable causes during the year ,. Auditor Auditorn accordance with section of the nergy ompanies ct and section of the ublic udit ct , udit ew ealand on behalf of the nuditor accordanceeneral with is thesection auditor ofof thethe nergycompany. ompanies ct and section of the ublic udit ct , udit ew ealand on behalf of the uditor eneral is the auditor of the company. Conflicts of interest ConflictsThe board of operates interest a formal directors’ interests register and this register is reviewed for any necessary updates at the start of every board Themeeting. board irectors operates are a formal reuired directors’ to interests register and this register is reviewed for any necessary updates at the start of every board meeting. irectorsnot have any are significantreuired to conflict of interest andor the appearance of a conflict of interest that is potentially detrimental to the company  notdeclare have any any int significanterest immediately conflict of to interest the board andor and therefrain appearance from voting of a onconflict an issue of interest or transaction that is potentially in which they detrimental have an interest to the company  disdeclareclose any to the int erestboard immediately all business torelationships the board and relevant refrain to from the companyvoting on an issue or transaction in which they have an interest  ifdis reuestedclose to the by boardany other all business director, relationshipswithdraw from relevant any meeting to the wherecompany discussion of an issue or a transaction will occur in which they  ifhave reuested an interest by any other director, withdraw from any meeting where discussion of an issue or a transaction will occur in which they  havecomply an withinterest sections to of the ompanies ct  notcomply generally with sections provide business to or of professional the ompanies services ct of an ongoing nature to the company. mployees not may generally not become provide involved business in any or professionalactivity that may services affect of or an compromise ongoing nature their to ability the company. to perform their duties, or may be in conflict with themployees interests may of thenot company.become involved f employees in any become activity thataware may that affect they or or compromise their family theirmembers ability or to associates perform their have duties, a potential or may co benflict in conflict of interest, with thethey interests are reuired of the to company. advise their f employees manager. become aware that they or their family members or associates have a potential conflict of interest, they are reuired to advise their manager.

rion ew ealand imited annual report – 31 March 2016 rionOrion e New ealand Zealand imited Limited annual annual report –– 3131 March March 2016 2016 rion ew ealand imited annual report – 31 March 2016 rion e ealand imited annual report – 31 March 2016 Corporate governance statement Corporate governance statement Corporate governance statement Corporate governance statement

nterests reister Subsidiary companies irectors recorded the folloing interests in the interests register during the year ended 31 arch 1 SubsidiaryThe following companies served as directors of subsidiary companies during the year ended arch nterests reister

The following served as directors of subsidiary companies during the year ended arch irectors recorded the folloing interests in the interests register during the year ended 31 arch 1 onnetics imited ob amieson chairman, rendan earney, eoff aey ohn ustin Thomas ustin ecurities imited irector

onnetics imited ob amieson chairman, rendan earney, eoff aey rion ew ealand entures imited rendan earney ohn ustin Thomas ustin ecurities imited irector icola rauford ooperatie an imited – electoral authority ember rion ew ealand entures imited rendan earney rauford obertson onsulting imited irector icola rauford ooperatie an imited – electoral authority ember Legislative compliance nironmental rotection uthority irector rauford obertson onsulting imited irector LegislativeThe board receives compliance regular updates and representations from management on legislative compliance. reas of relevant law include corporate, cience irector taxation,The board financial receives reporting, regular updates electricity and industry representations regulation, from commercial, management environmental, on legislative human compliance. resources, reas health of relevant and safety law includeand privacy. corporate, nironmental rotection uthority irector ocal oernment is anagement gency stablishment oard ember ompliance manuals and training are made available to all employees and the company engages independent experts for advice on some cience irector taxation, financial reporting, electricity industry regulation, commercial, environmental, human resources, health and safety and privacy. omplianceissues. manuals and training are made available to all employees and the company engages independent experts for advice on some artin rauford imited irector ocal oernment is anagement gency stablishment oard ember issues. iposte onsulting imited irector artin rauford imited irector atercare erices imited irector Directors’ insurance iposte onsulting imited irector ellington ural ire uthority irector Directors’The company insurance arranges comprehensive liability insurance policies for the group, directors and officers within the limits and reuirements as set atercare erices imited irector

Theout incompany the ompanies arranges ct comprehensive 1993 and the company’sliability insurance constitution policies. for the group, directors and officers within the limits and reuirements as set ellington ater imited irector ellington ural ire uthority irector out in the ompanies ct 1993 and the company’s constitution. orleyarsons e ealand imited onsultant ellington ater imited irector

Loans to directors orleyarsons e ealand imited onsultant LoansThe group to directors does not make loans to directors. aul unro entral lains ater imited irector

The group does not make loans to directors. eloitte imited irector Donations aul unro entral lains ater imited irector niersity of anterbury tudents ssociation disory board DonationsThe group made , of donations to charitable causes during the year ,. eloitte imited irector

The group made , of donations to charitable causes during the year ,. niersity of anterbury tudents ssociation disory board ob impson lectricity ngineers ssociation irector Auditor

Auditorn accordance with section of the nergy ompanies ct and section of the ublic udit ct , udit ew ealand on behalf of the e ealand oard of ngineering iploma irector ob impson lectricity ngineers ssociation irector nuditor accordanceeneral with is thesection auditor ofof thethe nergycompany. ompanies ct and section of the ublic udit ct , udit ew ealand on behalf of the impson ssociates imited irector e ealand oard of ngineering iploma irector uditor eneral is the auditor of the company.

Conflicts of interest impson ssociates imited irector eremy mith tlas esources imited irector ConflictsThe board of operates interest a formal directors’ interests register and this register is reviewed for any necessary updates at the start of every board meeting. irectors are reuired to arhill hertsey rrigation imited irector The board operates a formal directors’ interests register and this register is reviewed for any necessary updates at the start of every board eremy mith tlas esources imited irector arra ngineering imited irector meeting. irectorsnot have any are significantreuired to conflict of interest andor the appearance of a conflict of interest that is potentially detrimental to the company arhill hertsey rrigation imited irector

 not have any significant conflict of interest andor the appearance of a conflict of interest that is potentially detrimental to the company olcim e ealand imited irector  declare any interest immediately to the board and refrain from voting on an issue or transaction in which they have an interest arra ngineering imited irector olmes roup imited irector  disdeclareclose any to the int erestboard immediately all business torelationships the board and relevant refrain to from the companyvoting on an issue or transaction in which they have an interest olcim e ealand imited irector McDonald’s Lime imited irector

 ifdis reuestedclose to the by boardany other all business director, relationshipswithdraw from relevant any meeting to the wherecompany discussion of an issue or a transaction will occur in which they olmes roup imited irector ortland ement ssociation imited irector McDonald’s Lime imited irector  ifhave reuested an interest by any other director, withdraw from any meeting where discussion of an issue or a transaction will occur in which they ort ills eisure imited irector  complyhave an withinterest sections to of the ompanies ct ortland ement ssociation imited irector eamount disory imited irector  comply with sections to of the ompanies ct ort ills eisure imited irector  not generally provide business or professional services of an ongoing nature to the company. outh acific ement imited irector  not generally provide business or professional services of an ongoing nature to the company. eamount disory imited irector mployees may not become involved in any activity that may affect or compromise their ability to perform their duties, or may be in conflict with ater tilities shburton imited irector the interests of the company. f employees become aware that they or their family members or associates have a potential conflict of interest, outh acific ement imited irector mployees may not become involved in any activity that may affect or compromise their ability to perform their duties, or may be in conflict with thethey interests are reuired of the to company. advise their f employees manager. become aware that they or their family members or associates have a potential conflict of interest, ater tilities shburton imited irector eoff aey usiness entors e ealand imited hairman they are reuired to advise their manager. onsult imited irector eoff aey usiness entors e ealand imited hairman onstruction imited irector onsult imited irector oo slands ort uthority irector onstruction imited irector aphona arms imited irector oo slands ort uthority irector reen alley airies imited irector aphona arms imited irector reen alley istribution imited irector reen alley airies imited irector

reen alley istribution imited irector

ionOrion e New ealand Zealand Limied Limited annal annual eoreport –– 3131 March March 2016 2016 rion ew ealand imited annual report – 31 March 2016 ion e ealand Limied annal eo – 31 March 2016 rion ew ealand imited annual report – 31 March 2016 Corporate governance statement Corporate governance statement

Corporate governance statement Corporate governance statement

rou emoee remuneration Directors’ remuneration The number of group employees and former employees, whose remuneration and benefits fall within specified bands is listed below. Directors’he group’s remuneration directors eceied e olloin emneaion din e ea as as ollos emunerationrou emoee includes remuneration all non cash benefits and redundancy payments where applicable. he group’s directors eceied e olloin emneaion din e ea as as ollos The number of group employees and former employees, whose remuneration and benefits fall within specified bands is listed below. emuneration includes all noncash benefits and redundancy payments where applicable.

emuneration rion Connetics rion Connetics emuneration on sin 100 110 1 33 onicola sin aod 110 120 2 21 100 110 1 33 icolaal Mno aod 120 130 2 2 110 120 2 21 alo imson Mno 130 10 1 1 120 130 2 2 10 10 oeem imson mi 130 10 1 1 10 10 eemeo ae mi 10 10 10 10 eo ae 10 10 10 10 2 1 10 10 10 10 1 moee remuneration 10 10 2 1 10 200 1 1 moeeThe group remunerationaims to attract, retain, develop and motivate high calibre employees at all levels of the organisation. The group’s emloee 10 10 1 210 220 2 2 Theremuneration group aims strategy to attract, aims retain, for consistency, develop and fairness motivate and high alignment calibre employees with the group’s at all levels principal of the objective organisation. – o oeae The group’s as a sccessl emloee 10 200 1 1 siness e o elal comaes is emloee emneaion aains mae daa n eneal e o aims o mee e mae 220 230 1 remuneration strategy aims for consistency, fairness and alignment with the group’s principal objective – o oeae as a sccessl 210 220 2 2 sec o emloee eomance 230 20 3 2 siness e o elal comaes is emloee emneaion aains mae daa n eneal e o aims o mee e mae 220 230 1 sec o emloee eomance 20 20 1 All individual employment agreement terms and conditions are subject to “oneup” approval. For example, the board approves the 230 20 3 2 chief executive’s employment terms and conditions and the board remuneration committee approves those of the direct reports to 20 20 1 1 All individual employment agreement terms and conditions are subject to “oneup” approval. For example, the board approves the 20 20 1 e cie eecie o collecie emlomen aeemens coe aond of the group’s employees. 300 310 1 1 chief executive’s employment terms and conditions and the board remuneration committee approves those of the direct reports to 20 20 1 1 310 320 1 e cie eecie o collecie emlomen aeemens coe aond of the group’s employees. 300 310 1 1 30 30 1 Chief executive officer’s remuneration 310 320 1 30 30 1 Chiefe oad executive negotiates officer’s the remuneration chief executive officer’s emneaion ae ain indeenden ee adice on elean mae daa and 30 30 1 e emneaionoad negotiates o cie the chiefeecies executive o comaaleofficer’s emneaion comanies ae e oaainrd reviews indeenden the chief ee executive adice officer’son elean emneaion mae daa and 0 0 1 30 30 1 annalle emneaion o cie eecies o comaale comanies e oard reviews the chief executive officer’s emneaion 0 0 1 1 0 0 1 annall 0 0 1 e coman emloed M amieson as cie eecie oice in August 2011. Mr Jamieson’s employment agreement provided for a 0 0 1 1 oneo deeed amen a e end o ee eas sec o aciein eomance oecies oo ose ee eas and 00 10 1 e coman emloed M amieson as cie eecie oice in August 2011. Mr Jamieson’s employment agreement provided for a 0 0 1 sec o M amieson emainin in e ole e oneoff deferred payment was the equivalent of six months’ total remuneration. 10 20 1 oneo deeed amen a e end o ee eas sec o aciein eomance oecies oo ose ee eas and 00 10 1 sec o M amieson emainin in e ole e oneoff deferred payment was the equivalent of six months’ total remuneration. n eal e ion oad caell consideed Mr Jamieson’s performance and confirmed that Mr Jamieson had achieved the 10 20 1 eiemensn eal eo ean ion e oad deeed caell one consideedoff payment. Mr In Jamieson’s taking the company’s performance overall and confirmedbest interes thats ino Mr Jamiesonaccon e had oad achieved decided the o

eiemens• a o eanal o e e deeed oneo onedeeedoff payment. amen In in taking e ea the ended company’s Mac overall best interess ino accon e oad decided o

• a al o e oneo deeed amen in e ea ended Mac • a one ae in e ea ended Mac • a one ae in e ea ended Mac

• a one ae in e ea ended Mac

• a one ae in e ea ended Mac Following the final payment above, Mr Jamieson’s employment agreement no as no deeed amen comonen o i

Following the final payment above, Mr Jamieson’s employment agreement no as no deeed amen comonen o i Mr Jamieson’s total remuneration over the last two financial years has been as follows:

Mr Jamieson’s total remuneration over the last two financial years has been as follows:

ied emneaion

neo deeed amen ied emneaion neo deeedolida a amen eec

ne o olida a eec

n accodance i e olidas c 03, Mr Jamieson’s holiday pay has been paid at his average dail a ae calclaed

nee accodanceence o is i oss e aale olidas eanins c 03, o Mr e Jamieson’s eios holiday mons pay e has one beeno paid deee at hisd amensaverage dail noed a aoe ae aecalclaed eeoe

eeinceaseenced oMr is Jamieson’s oss aale holiday eanins pay in oe eeas eios ended monsMac e and one o deee d amens noed aoe ae eeoe

inceased Mr Jamieson’s holiday pay in e eas ended Mac and

ion e ealand Limied annal eo – 31 March 2016 rionOrion ew New ealand Zealand imited Limited annual annual report –– 3131 March March 2016 2016 ion e ealand Limied annal eo – 31 March 2016 rion ew ealand imited annual report – 31 March 2016 Corporate governance statement Corporate governance statement

Corporate governance statement Corporate governance statement

emuneration rion Connetics rion Connetics emuneration on sin 100 110 1 33 onicola sin aod 110 120 2 21 100 110 1 33 icolaal Mno aod 120 130 2 2 110 120 2 21 alo imson Mno 130 10 1 1 120 130 2 2 10 10 oeem imson mi 130 10 1 1 10 10 eemeo ae mi 10 10 10 10 eo ae 10 10 10 10 2 1 10 10 10 10 1 moee remuneration 10 10 2 1 10 200 1 1 moeeThe group remunerationaims to attract, retain, develop and motivate high calibre employees at all levels of the organisation. The group’s emloee 10 10 1 210 220 2 2 Theremuneration group aims strategy to attract, aims retain, for consistency, develop and fairness motivate and high alignment calibre employees with the group’s at all levels principal of the objective organisation. – o oeae The group’s as a sccessl emloee 10 200 1 1 siness e o elal comaes is emloee emneaion aains mae daa n eneal e o aims o mee e mae 220 230 1 remuneration strategy aims for consistency, fairness and alignment with the group’s principal objective – o oeae as a sccessl 210 220 2 2 sec o emloee eomance 230 20 3 2 siness e o elal comaes is emloee emneaion aains mae daa n eneal e o aims o mee e mae 220 230 1 sec o emloee eomance 20 20 1 All individual employment agreement terms and conditions are subject to “oneup” approval. For example, the board approves the 230 20 3 2 chief executive’s employment terms and conditions and the board remuneration committee approves those of the direct reports to 20 20 1 1 All individual employment agreement terms and conditions are subject to “oneup” approval. For example, the board approves the 20 20 1 e cie eecie o collecie emlomen aeemens coe aond of the group’s employees. 300 310 1 1 chief executive’s employment terms and conditions and the board remuneration committee approves those of the direct reports to 20 20 1 1 310 320 1 e cie eecie o collecie emlomen aeemens coe aond of the group’s employees. 300 310 1 1 30 30 1 Chief executive officer’s remuneration 310 320 1 30 30 1 Chiefe oad executive negotiates officer’s the remuneration chief executive officer’s emneaion ae ain indeenden ee adice on elean mae daa and 30 30 1 e emneaionoad negotiates o cie the chiefeecies executive o comaaleofficer’s emneaion comanies ae e oaainrd reviews indeenden the chief ee executive adice officer’son elean emneaion mae daa and 0 0 1 30 30 1 eannall emneaion o cie eecies o comaale comanies e oard reviews the chief executive officer’s emneaion 0 0 1 1 0 0 1 annall 0 0 1 e coman emloed M amieson as cie eecie oice in August 2011. Mr Jamieson’s employment agreement provided for a 0 0 1 1 oneo deeed amen a e end o ee eas sec o aciein eomance oecies oo ose ee eas and 00 10 1 e coman emloed M amieson as cie eecie oice in August 2011. Mr Jamieson’s employment agreement provided for a 0 0 1 sec o M amieson emainin in e ole e oneoff deferred payment was the equivalent of six months’ total remuneration. 10 20 1 oneo deeed amen a e end o ee eas sec o aciein eomance oecies oo ose ee eas and 00 10 1 sec o M amieson emainin in e ole e oneoff deferred payment was the equivalent of six months’ total remuneration. n eal e ion oad caell consideed Mr Jamieson’s performance and confirmed that Mr Jamieson had achieved the 10 20 1 neiemens eal eo ean ion e oad deeed caell one consideedoff payment. Mr In Jamieson’s taking the company’s performance overall and confirmedbest interes thats ino Mr Jamiesonaccon e had oad achieved decided the o

eiemens• a o eanal o e e deeed oneo onedeeedoff payment. amen In in taking e ea the ended company’s Mac overall best interess ino accon e oad decided o

• a al o e oneo deeed amen in e ea ended Mac • a one ae in e ea ended Mac • a one ae in e ea ended Mac

• a one ae in e ea ended Mac

• a one ae in e ea ended Mac Following the final payment above, Mr Jamieson’s employment agreement no as no deeed amen comonen o i

Following the final payment above, Mr Jamieson’s employment agreement no as no deeed amen comonen o i Mr Jamieson’s total remuneration over the last two financial years has been as follows:

Mr Jamieson’s total remuneration over the last two financial years has been as follows:

ied emneaion

neo deeed amen ied emneaion neo deeedolida a amen eec

neo olida a eec

n accodance i e olidas c 03, Mr Jamieson’s holiday pay has been paid at his average dail a ae calclaed

nee accodanceence o is i oss e aale olidas eanins c 03, o Mr e Jamieson’s eios holiday mons pay e has one beeno paid deee at hisd amensaverage dail noed a aoe ae aecalclaed eeoe

eeinceaseenced oMr is Jamieson’s oss aale holiday eanins pay in oe eeas eios ended monsMac e and one o deee d amens noed aoe ae eeoe

inceased Mr Jamieson’s holiday pay in e eas ended Mac and

Orion New Zealand Limited annual report –– 3131 March March 2016 2016

Five -year trends – group – 31 March 2016

Five-year trends – group m m m m m

tatement of comrehensive income m m m m m

tatement of comrehensive income tatement of financia osition Current assets tatement of financia osition Current assets

on current assets

Current iaiities

on current iaiities

uit

uit tatement of cash fo s tatement of cash fos

– 31 March 2016 Orion New Zealand Limited annual report –– 3131 March March 2016 2016

– 31 March 2016 Five -year trends – group – 31 March 2016 Five-year trends – group

Five-year trends – group Five-year trends – group m m m m m m m m m m

tatement of comrehensive income m m m m m inancia erformance inicators m m m m m

tatement of comrehensive income inancia erformance inicators Net profit to average shareholders’ equity (%) Net profit to average shareholders’ equity (%)

tatement of financia osition

Current assets

tatement of financia osition on financia measures Current assets on financia measures –

– on current assets

on current assets

Current iaiities

on current iaiities

uit

uit tatement of cash fo s tatement of cash fos

rioOrion Ne New ealad Zealand iited Limited aual annual report –– 3131 March March 2016 2016