P-2 ///////// UNISON ANNUAL REPORT 2021 UNISON ANNUAL REPORT 2021 ///////// P-3

CONTENTS

1 / CHAIR & GROUP CHIEF EXECUTIVE'S ANNUAL REVIEW P4

2 / CORPORATE GOVERNANCE STATEMENT P36

3 / BOARD OF DIRECTORS P42

4 / STATUTORY INFORMATION P48

5 / TRUSTEES’ STATEMENT P52

6 / FINANCIAL STATEMENTS P56

Front Cover: Unison Contracting Services Limited The Hyundai Kona is the newest addition to (UCSL) installing new poles on remote terrain, Unison’s EV fleet – bringing increased range Napier-Taihape Road. capacity, Waimarama Beach, Hawke’s Bay. P-4 ///////// UNISON ANNUAL REPORT 2021 CHAIR AND GROUP CHIEF EXECUTIVE'S ANNUAL REVIEW CHAIR AND GROUP CHIEF EXECUTIVE'S ANNUAL REVIEW UNISON ANNUAL REPORT 2021 ///////// P-5

L:R – Group Chief Executive Ken Sutherland and Group Chair Phil Hocquard. P-6 ///////// UNISON ANNUAL REPORT 2021 CHAIR AND GROUP CHIEF EXECUTIVE'S ANNUAL REVIEW CHAIR AND GROUP CHIEF EXECUTIVE'S ANNUAL REVIEW UNISON ANNUAL REPORT 2021 ///////// P-7

UCSL continued to ensure a resilient network during all stages of the COVID-19 pandemic – pole replacement, Hawke’s Bay. GROUP PERFORMANCE

Despite the exceptional issues consumption data to help build Focus remained on embedding faced during the 2020/21 an understanding of the direct sustainability as a cornerstone financial year, the Unison Group impacts of COVID-19 on Unison’s of the business. Unison has an coped well with the unforeseen consumer-base. Temporary important role to play by providing challenges and performed reduced charges were instituted a resilient network and response strongly overall. to provide relief for commercial capability to more frequent and businesses significantly impacted extreme weather events and by Through the various stages by the level 3 and 4 government enabling consumers to contribute of the COVID-19 pandemic lockdowns. to environmental sustainability and associated government by accessing renewable energy lockdowns, Unison continued The Company acted quickly sources with good management to deliver on its commitment to to adapt its processes and of changes in electricity demand its ‘people’ – our employees, operations to maintain across the network. our customers and the wider continuity of supply whilst also communities in which we operate minimising risk to its people - by prioritising the health and and communities. A number wellbeing of the Unison team and of flexible working policies were maintaining an agile and reliable tested during the various stages network during such times of of government lock down. This uncertainty and hardship. The proved for Unison that all of its network performed well this non-field-based roles can operate year and exceeded all regulatory seamlessly from anywhere – requirements. highlighting the fact that mobility and agility have become strengths This was achieved by adapting in how Unison operates as a the works programme to minimise business. interruption to customers and by investing significant time and resource into examining real-time

Through the various stages of the COVID-19 pandemic and associated government lockdowns, Unison continued to deliver on its commitment to its ‘people’ – our employees, our customers and the wider communities in which we operate...” P-8 ///////// UNISON ANNUAL REPORT 2021 CHAIR AND GROUP CHIEF EXECUTIVE'S ANNUAL REVIEW CHAIR AND GROUP CHIEF EXECUTIVE'S ANNUAL REVIEW UNISON ANNUAL REPORT 2021 ///////// P-9

UCSL responding with its full fleet to a large fire in Fernhill, Hawke's Bay in January 2021.

FLEXIBLE WORKING

Unison, along with the rest of sustained agility, decisive action During this reporting period Dan the world, started the 2020/21 and overall commitment to Druzianic was welcomed to the financial year in the most unusual the communities it serves. On Board as a Director of Unison of circumstances. At all stages reflection, how Unison responded Networks Limited. The Company of the COVID-19 pandemic to to the unsettled year provides looks forward to the contribution date, which essentially put every considerable confidence in the he will bring to the governance element of Unison’s business Company’s management and team going forward. to the test, the Unison team did direction. the Company proud by showing

…the Unison team did the Company proud by showing sustained agility, decisive action and overall commitment to the communities ...mobility and agility have we serve”

become strengths in how Unison employees Sharon Jarvis, and Bruce Harrison, working remotely during the level 4 we operate as a business.” COVID-19 government lockdown. P-10 ///////// UNISON ANNUAL REPORT 2021 CHAIR AND GROUP CHIEF EXECUTIVE'S ANNUAL REVIEW CHAIR AND GROUP CHIEF EXECUTIVE'S ANNUAL REVIEW UNISON ANNUAL REPORT 2021 ///////// P-11

HEALTH A new Group Health AND SAFETY and Safety Strategy was implemented With a network spanning more Advisor for the Central Region is Unison is required to have a in April, focussing than 9,300 km, ensuring its also reflective of the sustained Public Safety Management people return home healthy and growth continuing to be seen in System (PSMS) to ensure its on six key initiatives safe to their families each day Taupo and Rotorua. energy assets do not pose a continues to be a key priority for significant risk of serious harm to which have and will Unison, as reflected in all facets The Health and Safety members of the public or damage of the business. The Company’s Management Systems (HSMS) for to their property. During this continue to drive the response to the COVID-19 both Unison Contracting Services reporting period the Company Company’s safety pandemic served as an example Limited and UnisonFibre Limited was successfully recertified to of this. were both successfully audited the NZS 7901: 2008, Electricity culture and results.” to the international AS/NZS 4801 and Gas Industries – Safety Although there was a heightened Occupational Health and Safety Management Systems for Public emphasis on health and safety, Management Systems standard Following the Fernhill fire, UCSL Safety standard. worked safely and methodically the business recorded eight lost by the external auditing body, to restore power. time injuries (LTI) to employees Telarc, with no non-conformances and four medical treatment identified. injuries during the financial year. It is pleasing to note this was Specific focus was placed on SIX KEY HEALTH & an improvement on the last two improving worker engagement SAFETY INITIATIVES years. The majority of injuries during the financial year in the reported were minor and soft form of training and upskilling the Company’s dedicated health HEALTH AND SAFETY tissue related, such as sprains 1 MANAGEMENT SYSTEM and strains. Disappointingly, one and safety representatives. These of the LTIs occurred in an area of people sit at the heart of the HSMS and serve as a vital means critical risk (driving a vehicle) as WORKER the result of a third party causing of ensuring the Company reaches 2 ENGAGEMENT an accident. and engages with people at all levels. A new Group Health and Safety SAFETY LEADERSHIP Strategy was implemented With the combined impact 3 in April, focussing on six key of COVID-19 and a large- initiatives which have and will scale programme of work this year, Unison recognised the continue to drive the Company’s SAFETY CULTURE safety culture and results. These potential toll on employees’ 4 initiatives include a best practice mental health and wellbeing. Health and Safety Management To increase the Company’s System (HSMS); worker support in these areas, a new 5 WELLBEING engagement; safety leadership; initiative – ‘GoodYarn’ – was safety culture; wellbeing and launched during the year. This is a peer delivered programme public safety. A new Group Health PUBLIC SAFETY and Safety Manager role was aimed at making mental health 6 also implemented during the year and wellbeing a part of everyday to further enhance the synergy conversation. Nine Unison between Unison Networks employees from across the Limited, Unison Contracting business completed facilitator Services Limited, and Unison training and Company-wide Fibre Limited. The implementation workshops are planned for next of a new Health and Safety year. Jayden Falcon, Marketing Co-ordinator presenting Unison’s Safe Sparks Programme to students from Owhata School, Rotorua. P-12 ///////// UNISON ANNUAL REPORT 2021 CHAIR AND GROUP CHIEF EXECUTIVE'S ANNUAL REVIEW CHAIR AND GROUP CHIEF EXECUTIVE'S ANNUAL REVIEW UNISON ANNUAL REPORT 2021 ///////// P-13

OUR PEOPLE

Across the Group, leadership Targeted programmes continue and nurturing much of what and culture continue to be key to be invaluable in helping to was already in effect across the enablers for Unison’s business improve leadership at all levels Company. Committee members strategies and underscored the by defining and measuring and leaders from across the Company’s success through the leadership effectiveness, and for Company received ‘Unconscious year. identifying strength-based areas Bias’ training from Diversity for development. In September, Works New Zealand. Being Feedback from staff who a review of the Company’s diverse and inclusive involves not completed the COVID-19 systems and processes was only good gender balance across debrief survey was unanimous launched, with a view to the team but encompasses in acknowledging Unison for the improve training, learning and a desire to connect with the priority placed on the health, development opportunities communities in which we operate safety and wellbeing of its available to employees. and to ensure that all employees people throughout each stage have the right employment of the pandemic and associated Unison’s Diversity and Inclusion experience. government lockdowns. The programme remains a key Company worked to ensure initiative. A dedicated strategy that everyone remained usefully was implemented during this Unison employee Ela Potorska, helping to protect new tree plantings as part of Unison’s employed and invested time and reporting period building on support of the Maraetotara Tree Trust. resource into developing new work patterns that enabled the business to operate effectively despite the restrictions and uncertainties that prevailed from time to time.

UCSL Line Mechanic, Cole Lovell conducting part of Unison’s some network repair work. Diversity and Inclusion programme remains a key initiative.”

As part of the 'Girls in High Vis' initiative - Emily Flynn, UCSL Line Mechanic gives a Hawke’s Bay high school student an insight into working at Unison. P-14 ///////// UNISON ANNUAL REPORT 2021 CHAIR AND GROUP CHIEF EXECUTIVE'S ANNUAL REVIEW CHAIR AND GROUP CHIEF EXECUTIVE'S ANNUAL REVIEW UNISON ANNUAL REPORT 2021 ///////// P-15

...Unison teamed up with EnergyMate during the year to help its customers better understand their electricity needs and, in turn, to identify potential savings.”

In line with its customer-centric during the year to help its focus, Unison provided an customers better understand industry-leading support package their electricity needs and, in to small-medium enterprises that turn, to identify potential savings. were unable to operate during Unison hopes that by working the lockdown, in the form of relief more closely with social support from fixed charges for April and agencies and consumers and May. providing a better understanding around energy in general, it can To better understand the drivers Unison customers utilising various help make a difference for those forms of electricity in their home. of energy hardship, Unison in need. teamed up with EnergyMate

Unison Relationship Manager, Danny Gough, taking part in an EnergyMate workshop to better understand and OUR address energy hardship issues in our communities. CUSTOMERS

Despite the anticipated negative in which to examine billing and impact of COVID-19, the network meter data for real-time Company continued to support information on consumption. regional growth and the thriving This was, of course, more vital economies in each of its three than ever during the changing 1,574 regions by connecting 1,574 new circumstances presented by NEW CUSTOMERS CONNECTED customers (an increase of around the pandemic. Throughout TO THE NETWORK 16% on last year). Unison also each stage of the COVID-19 facilitated the connection of 432 government lockdowns, the solar installations (of which 40% Company monitored and included battery storage). This observed dramatic changes increase in demand was driven in consumption across its significantly by retirement villages electricity network. Unsurprisingly, and subdivision connections, as residential consumption was well as infrastructure requirements significantly higher than usual from local and regional authorities. during April and May while businesses that could not operate To ensure efficiency in network saw significant falls in their usual 432 planning and investment, consumption. SOLAR INSTALLATIONS ENERGYMATE the Company continues to (OF WHICH 40% INCLUDED explore more innovative ways BATTERY STORAGE) P-16 ///////// UNISON ANNUAL REPORT 2021 CHAIR AND GROUP CHIEF EXECUTIVE'S ANNUAL REVIEW CHAIR AND GROUP CHIEF EXECUTIVE'S ANNUAL REVIEW UNISON ANNUAL REPORT 2021 ///////// P-17

OUR COMMUNITY

Following an intensive and Unison formed a four-year successful marketing campaign, partnership with the Taupo over 67% of Hawke’s Bay power Chamber of Commerce as consumers now receive the naming rights sponsor of the Hawke’s Bay Power Consumers’ Great Lake Taupo Business Trust dividend via direct credit. Awards – a biennial event. As The successful uptake is a credit a company, Unison remains to the Trustees who played a key committed to supporting the role in driving the success of the growth and prosperity in each campaign. With the progressive of its regions and were therefore demise of bank cheques, Unison thrilled to align with an event

will be supporting the Trust to that celebrates local businesses, Unison supported youth move to a 100% direct credit especially on the back of a leadership programme, 'Cactus', approach going forward. challenging year for many. which aims to develop leadership in senior students ahead of graduating from secondary school.

As a company, Unison remains committed to supporting the growth and prosperity in each of its regions...”

UCSL Vegetation Controller, Travis Harris after completing a job for a satisfied customer.

Unison staff L:R - Bob Wallace, Neal Gribben, Bruce Dockary, Paul Fisher, Ken Laurie, Ruben Smith and Ross Berry all give back to the local community as volunteers with the fire service. P-18 ///////// UNISON ANNUAL REPORT 2021 CHAIR AND GROUP CHIEF EXECUTIVE'S ANNUAL REVIEW CHAIR AND GROUP CHIEF EXECUTIVE'S ANNUAL REVIEW UNISON ANNUAL REPORT 2021 ///////// P-19

Unison’s long-standing support of the Rotorua night market has provided opportunities for local businesses, LEADING A artists and musicians to display their OUR talents to locals and visitors alike. PURPOSE SUSTAINABLE Unison’s newest EV, Hyundai Kona travelling down Oak Avenue, Hawke’s Bay. ENERGY FUTURE TO ENABLE COMMUNITIES TO PROSPER,

Unison is committed to a Unison will continue to support its During this reporting period, BY DELIVERING CUSTOMERS’ ENERGY NEEDS THROUGH A DYNAMIC, FLEXIBLE vision of leading a sustainable communities in the transition to Unison completed the design AND SUSTAINABLE ELECTRICITY energy future that enables its Electric Vehicles (EVs) – a space of an innovative sustainable SYSTEM. communities to continually the Company has been investing zone substation while prosper and grow. Sustainability in for some years. The strategic planning the replacement encompasses the needs of our positioning of EV chargers on of the 11kV switchboard at environment, our people and routes into Unison’s regions, as Windsor zone substation. The our communities, as well as the well as assisting other parties design incorporates a strong Company’s financial health – with fast charger investments, sustainability element through ensuring each of these thrive in has helped to reduce concerns its use of renewable material. balance. around range anxiety and the Though the project’s primary Company has continued to see deliverable is to replace the 11kV The Climate Change strong growth in their usage. switchboard, which had reached Commission’s draft report has end of life, the Company identified crystalised the urgent actions While climate change and an opportunity to be an industry it believes will need to be decarbonisation are important, leader in this space. Construction taken to contribute to global Unison’s vision of a sustainable is set to commence in the coming decarbonisation efforts. Electricity energy future does not stop there. financial year. plays an important role in meeting The Company has continued to such objectives with a particular work towards ensuring that its The Unison Group continued to focus on electrifying the transport vision underpins all aspects of the invest time and resources into fleet and helping industry identify business - whether in the space of understanding and improving opportunities to decarbonise health and wellbeing, training and how it can contribute to process heat. Unison has leadership, diversity and inclusion, decarbonisation. A number of measured its own carbon employment opportunities or the critical business functions where footprint and is actively exploring overall financial health and growth we can make a difference have opportunities to reduce this to of Unison as a Group. been identified and applied during ultimately become carbon neutral. this reporting period. OUR VISION

HIGHLIGHTS OF THESE INCLUDE: LEADING A SUSTAINABLE CONTRACT SUPPORT FOR LARGE FURTHER ELECTRIFICATION OF SCALE REGIONAL RENEWABLE ENERGY FUTURE. OUR VEHICLE FLEET GENERATION PROJECTS

IMPROVED SOPHISTICATION IN THE TELEMETRIC MEASUREMENT TREE PLANTING PROJECTS OF OUR VEHICLE EMISSIONS

IMPROVED PLANNING AND TOOLS INNOVATIVE DESIGN AND FOR MEASURING PROGRESS IN CONSTRUCTION OF A NEW REDUCING OUR TOTAL CARBON SUBSTATION FOOTPRINT P-20 ///////// UNISON ANNUAL REPORT 2021 CHAIR AND GROUP CHIEF EXECUTIVE'S ANNUAL REVIEW CHAIR AND GROUP CHIEF EXECUTIVE'S ANNUAL REVIEW UNISON ANNUAL REPORT 2021 ///////// P-21

Construction of Unison's Windsor Substation under way.

WINDSOR SUBSTATION PROJECT

Architect's impression of new sustainable Windsor Substation.

The design incorporates a strong sustainability element through its use of renewable material.” P-22 ///////// UNISON ANNUAL REPORT 2021 CHAIR AND GROUP CHIEF EXECUTIVE'S ANNUAL REVIEW CHAIR AND GROUP CHIEF EXECUTIVE'S ANNUAL REVIEW UNISON ANNUAL REPORT 2021 ///////// P-23

NAPIER FLOOD NETWORK

Graduate Engineer, and Unison Scholarship recipient David Bredda pictured in the PERFORMANCE Unison Control Room.

Unison’s electricity network Unison passed its recertification continued its strong overall to the ISO 55001 standard for performance this year, once Asset Management this year. This again comfortably falling within is regarded as the benchmark regulatory targets for SAIDI for asset management globally. (System Average Interruption The Company’s conformance to Duration Index) and SAIFI (System the standard was re-assessed Average Interruption Frequency through a four-day remote audit Index). by an external auditor from British Standards Institute, who found This can be attributed to greater Unison to be fully compliant in asset performance and visibility continuing to ensure a ‘best through Unison’s Smart Network practice’ approach to managing as well as the largely benign the lifecycle of its assets. weather conditions experienced during the year. Due to high demand for TARGET: <75.8 infrastructure in new residential SAIDI: LIMIT: 82.34 and commercial subdivisions, 44.67 Unison saw a marked increase in Napier floods, November 2020. planned work on last year. This meant the need to undertake a careful and considered approach, TARGET: <1.57 in terms of planned outages SAIFI: LIMIT: 1.82 across the network, to ensure 1.13 completion of the work with the minimal amount of disruption to customers as possible. Unison General Manager Networks and Operations, Jaun Park pictured with Transpower Project Manager, Brian Carwell – Cooke, at the Fernhill Substation, which was upgraded The crews involved in this response displayed to facilitate future load, including the ability to service new and emerging technologies. excellent service, working safely and efficiently to restore power to the nearly 3,000 customers affected by this event.”

Despite the absence of any major During the year, following an Ultimately it should provide the storms during the 2020/21 year, independent, external review Company with sound information the network was faced with of network resilience, Unison on how such events could a major flooding event in the launched a capability project affect Unison’s ability to supply Napier urban area in November working to develop a sustainable, its customers, enabling the 2020. The crews involved in this network vulnerability assessment Company to work in advance response displayed excellent model that can quantify the to mitigate these or to plan its service, working safely and potential damage of various response where mitigation is not efficiently to restore power to the “extreme events” on Unison’s possible. nearly 3,000 customers affected assets and asset systems. by this event. P-24 ///////// UNISON ANNUAL REPORT 2021 CHAIR AND GROUP CHIEF EXECUTIVE'S ANNUAL REVIEW CHAIR AND GROUP CHIEF EXECUTIVE'S ANNUAL REVIEW UNISON ANNUAL REPORT 2021 ///////// P-25

One Energy project manager, Chris Gracie talking to Unison board members about the new Enterprise Resource Planning System.

Unison now uses drones to photograph and assess network assets, for increased safety and efficiency. INNOVATION CONDUCTOR AND AGILITY CONDITION RECOGNITION Unison launched its Asset Unison continued its journey of and commissioned which then Management System (AMS) reducing the labour-intensive task enabled them to begin collecting PROJECT Digital Strategy in April. This led of overhead conductor inspection, disturbance data on the network. to the establishment of several with a dedicated project launched The next steps, and the focus for asset management digitalisation in June. Callaghan Innovation the 2021/22 year, will be around initiatives during the financial year awarded Unison a grant and developing the analytics software and the continuation of others an experienced drone operator in conjunction with Sentient already in motion. to capture aerial images of Energy so as to be able to use conductors. With this having that data to recognise the different The implementation of Unison’s been completed during the year, footprint for each type of fault new Enterprise Resource the next step is to analyse the and, in time, predict defects on Planning System, One Energy, data. The goal is to produce the network before they cause was a significant focus across images with the qualities required an outage and disrupt supply to the business once again. The to use machine learning and customers. software, which went ‘live’ in May artificial intelligence for accurately 2021, will prove invaluable to assessing the condition of assets Unison with the comprehensive, on the Company’s network. modern, and mobile-optimised nature of its functionality enabling Progress continued on Unison’s the Group to leverage data to Fault Anticipation and Avoidance manage the business more project. During this reporting efficiently and effectively. period, sensors were installed P-26 ///////// UNISON ANNUAL REPORT 2021 CHAIR AND GROUP CHIEF EXECUTIVE'S ANNUAL REVIEW CHAIR AND GROUP CHIEF EXECUTIVE'S ANNUAL REVIEW UNISON ANNUAL REPORT 2021 ///////// P-27

In line with the Company’s ongoing support for uptake of electric vehicles (EVs), Unison continued to work REGULATORY on enhancing its time-of-use price offering to the AND PRICING residential market.”

As of 1 April 2020, Unison Innovation and Employment has In line with the Company’s Average Interruption Duration Overall, the policy and regulatory need to become much more reduced its prices by an been developing policy proposals ongoing support for uptake of Index) were related to weather environment Unison is operating flexible if New Zealand is to meet average of 10% to comply with to reform Low Fixed Charge electric vehicles (EVs), Unison events and other events out of in was relatively stable and, for the decarbonisation agenda, the Commerce Commission’s Regulations and Tree Regulations continued to work on enhancing the Company’s control. The the most part, predictable during especially as consumers take revenue cap determination – reforms which are well overdue. its time-of-use price offering to the Commission issued compliance this reporting period. However, up electric vehicles at a greater made in November 2019. Reform of the Low Fixed Charge residential market. The updated advice to Unison but otherwise COVID-19 and the resulting rate and heavy industry converts The decrease was welcome Regulations would allow Unison plan will enable retailers trading determined no enforcement economic fall-out has not process heat requirements to news for customers facing to rebalance its residential lines on the Company’s network to action was required. necessarily shown its full impact electricity. Unison continues significant economic challenges charges so that less reliance is develop retail electricity price yet and may continue to challenge to work cooperatively with its brought on by COVID-19 but, placed on variable lines charges. plans suited to EVs, offering low It was pleasing to see the regulators’ abilities to make electricity distribution peers unfortunately, these may have These can often disadvantage overnight rates to encourage off- Commission’s independent expert timely changes to their regimes and the Electricity Network been subsequently offset by large families with high electricity peak charging. recognise Unison as industry to support effective customer Association to engage with rising wholesale electricity prices. needs and other customers leading across a range of asset outcomes. regulators. Unison’s advice to customers that may be struggling. Reform Following extensive review of management practices, meeting is to always shop around by of the Tree Regulations would Unison’s asset management the applicable standard of ‘good In addition, the rapid need to using Consumer New Zealand’s allow Unison to more effectively practices, the Commerce industry practice’. Unison is decarbonise the economy will Powerswitch website to compare manage vegetation which causes Commission determined that the acutely aware of the disruption challenge regulatory responses retail electricity prices. around 20% of all unplanned quality standard breaches of the that a power outage brings which tend to assume historical power outages on the network. 2017/18 years (relating to the and places great emphasis on trends will continue. The As part of the background to It is hoped that regulatory reform regulatory limit for the average minimising impacts for customers. regulatory environment will the Government’s COVID-19 will make some real progress in amount of time a customer is response, the Ministry of Business the near term. without electricity – System

Drone image of UCSL carrying out a UCSL Vegetation Controller conducting pole replacement in Havelock North to tree trimming to ensure network resilience. proactively ensure network reliability. P-28 ///////// UNISON ANNUAL REPORT 2021 CHAIR AND GROUP CHIEF EXECUTIVE'S ANNUAL REVIEW CHAIR AND GROUP CHIEF EXECUTIVE'S ANNUAL REVIEW UNISON ANNUAL REPORT 2021 ///////// P-29 SUBSIDIARIES

Despite losing six weeks of With UCSL’s support, Aurora Twenty trainee line mechanics productivity due to COVID-19, Energy’s network programme graduated during the year Unison Contracting Services has seen significant growth and following completion of the Limited (UCSL) improved on improvement in the past two comprehensive training pathway the prior year in terms of the years. This is set to continue, provided by Unison’s Centre of delivery of its planned programme with the Commerce Commission Excellence in Hawke's Bay. This of works. This can be directly recently publishing its decision programme, coupled with the attributed to a works optimisation on Aurora Energy’s customised Group’s investment in targeted initiative launched during the price-quality path (CPP), leadership development training latter stages of the Government which incorporates a five-year for 15 future leaders within the lockdown – a ‘Call to Arms’. programme of investment in its business, continues to ensure Underpinned by a focus on network. UCSL attracts and retains a working smarter right across the competent workforce. project lifecycle, from initiation UCSL adopted an exciting new through to design, planning, technology during this reporting scheduling and field operation, period - Partial Discharge this initiative has led to significant Testing. This enables the non- improvements in productivity and invasive testing of network cables and allows Asset Managers efficiency. The teamwork and UnisonFibre customer enjoying collaboration across the Group to access more accurate and a high-speed broadband connection at home. played a key role in the success comprehensive information on of this initiative. the likes of asset lifecycles and TRAINEE LINE time to replacement. UCSL is one MECHANICS GRADUATED UCSL entered the second of an of only two lines companies in IN HAWKE’S BAY initial three-year Field Services New Zealand with this technology Agreement (FSA) with Aurora and has already assisted a Energy. This sees the contracting neighbouring provider, Wellington company providing specialist Electricity, to successfully develop contracting services to the Otago, and deliver a turn-key solution to Dunedin-based, lines company. a problem.

UnisonFibre’s customer to the fibre network. Average connection volumes were 626 connection costs during the against a budgeted 660. This financial year decreased by was a pleasing result in light 17% on the previous year. of the significant disruption A key highlight during this caused by COVID-19. This reporting period was the strong represented a 6.6% net increase connection uptake in new this financial year and a total of residential subdivisions, which 3,325 customers now connected continues to trend above 80%.

NEW CUSTOMERS CONNECTED TO UCSL Line Mechanics carrying UNISONFIBRE'S NETWORK out network maintenance on the Aurora network in Dunedin. P-30 ///////// UNISON ANNUAL REPORT 2021 CHAIR AND GROUP CHIEF EXECUTIVE'S ANNUAL REVIEW CHAIR AND GROUP CHIEF EXECUTIVE'S ANNUAL REVIEW UNISON ANNUAL REPORT 2021 ///////// P-31

Similar to ETEL, RPS Switchgear experienced challenging trading conditions, particularly in its Australian and UK markets. Given the ongoing impact being felt in these areas, it is expected that planned works will again be deferred for distribution networks Despite the in those markets. Despite the challenging conditions, RPS continues to enhance its product range to also challenging incorporate 33kV switchgear, 11kV ring main units, as well as protection devices suitable for the low voltage conditions, (400V) networks. These products will be essential for creating LV visibility and security as communities RPS continues Pole mounted ETEL transformers. take-up of electric vehicles and solar energy gains momentum. to enhance its Both ETEL and RPS Switchgear remain valuable assets product range...” to the Unison Group and play key roles in enabling the ETEL’s trading results during wider Unison Group to innovate and offer value-added the 2020/21 financial year were niche products and services both in the electricity sector adversely impacted by COVID-19, ..during the year ETEL and beyond. particularly in the Australian and

Indonesian markets where the negotiated the acquisition of UCSL staff conducting testing on new switchgear pandemic has been more severe. in an upgraded substation, Dunedin. This led to deferral of planned ABB’s New Zealand Motor and works by distribution networks. Generator Services business Notwithstanding this, during the year ETEL negotiated the via a new subsidiary called acquisition of ABB’s New Zealand Motor and Generator Services ETEL Services Limited...” business via a new subsidiary called ETEL Services Limited, with effect from 1 April 2021. ETEL’s transformer servicing operation will be incorporated within the servicing business so that the range of operations covers electric motors, generators and transformers.

ETEL employee applying a coat of paint to a transformer in the Auckland-based ETEL factory. P-32 ///////// UNISON ANNUAL REPORT 2021 CHAIR AND GROUP CHIEF EXECUTIVE'S ANNUAL REVIEW CHAIR AND GROUP CHIEF EXECUTIVE'S ANNUAL REVIEW UNISON ANNUAL REPORT 2021 ///////// P-33 FINANCIAL PERFORMANCE Despite the global uncertainty negative impact of COVID-19 Cash Flow $242.5 caused by COVID-19, the on transformer sales volumes. Operating cash flow was 2.5% MILLION Unison Group’s overall financial Partially offsetting the decline in higher than the comparative performance for the year was manufacturing profitability was a figure at $72.3 million, primarily more favourable than expected, $2.1 million gain on the fair value driven by an improved working TOTAL GROUP REVENUE primarily driven by strong of Unison Insurance Limited’s capital position, particularly residential electricity volumes investment portfolio. inventories. and capital contributions offsetting lower commercial and Capital contributions remained Capital Expenditure manufacturing profitability. solid and increased by $1.2 Capital expenditure was $56.1 million to $10.3 million this year, million, $7.8 million less than last Group earnings before interest, driven by continued strong growth year. This decrease reflected tax, and financial instruments in residential and commercial deferral of some non-network (EBITF) was $53.8 million, which developments. asset expenditure in response was $2.2 million higher than to the uncertainty posed by budget but down by $5.6 million Unison Contracting Services COVID-19. on last year’s result. This was Limited also increased its revenue $89.6 largely expected due to the reset on the prior year, with external Balance Sheet MILLION of regulated lines charges for the customer work increasing by Unison’s debt (face value $2.3 million or 31%. This was excluding fair value movements) regulatory period 1 April 2020 EBITDAF to 31 March 2025, under the attributed to continued growth in increased by $7.0 million to Commerce Commission’s Default construction works in Dunedin as $258.0 million, largely to fund Price-Quality Path Determination. part of the Company’s ongoing Unison Networks’ growth capex. contract with Aurora Energy. Unison’s balance sheet remains The regulated reset was budgeted modestly geared at 36%, the to reduce Unison’s FY21 line As highlighted above, ETEL same as the previous year. revenues to $134.4 million - a drop Limited’s profitability was Shareholders’ funds increased of $15.8 million on the prior year. impacted by COVID-19, with by $18.3 million or 4.1% on the Actual regulated lines revenue revenue at $68.0 million - down previous year. was $137.1 million, $2.7 million $7.5 million on the year prior. favourable to budget, largely due RPS Switchgear Limited’s sales Dividend were impacted as well, with sales This year, shareholders will $15.8 $33.0 to higher residential electricity volumes than forecasted. Under at $9.9 million – a figure well receive a fully imputed final MILLION MILLION the Commerce Commission’s below historical averages. dividend of $15.8 million. The dividend will be paid to the allowable revenue cap rules, this Group net profit after tax was DIVIDEND (DECLARED) NET PROFIT AFTER TAX over-recovery of lines revenue Hawke’s Bay Power Consumers’ $33.0 million, $1.0 million higher Trust on or around 3 August will be returned to consumers via than the prior year. a line charge adjustment in the 2021. 2022/23 financial year. EBIT from the regulated lines business was $46.9 million (2019/20 $51.0 million), which was a pleasing result given the regulated reset of lines charges referred to above in addition to the Despite the global uncertainty uncertainties posed by COVID-19. 52% $56.1 EBIT from the Group’s unregulated caused by COVID-19, the PERCENT MILLION businesses declined by $1.5 Unison Group’s overall financial million to $6.9 million (2019/20 EQUITY/TOTAL ASSETS CAPITAL EXPENDITURE $8.4 million). This was primarily performance for the year was driven by ETEL’s results where EBIT was down $3.8m on more favourable than expected..” the previous year due to the P-34 ///////// UNISON ANNUAL REPORT 2021 CHAIR AND GROUP CHIEF EXECUTIVE'S ANNUAL REVIEW CHAIR AND GROUP CHIEF EXECUTIVE'S ANNUAL REVIEW UNISON ANNUAL REPORT 2021 ///////// P-35

OUTLOOK

The global disruption and People are central to Unison’s As always, the Board thanks the uncertainty experienced during ongoing growth and success – Hawke’s Bay Power Consumers’ the past year has shown the that is, its staff, its customers, and Trust for the valuable role the difficulty of foreseeing exactly the wider communities it serves. Trustees play in helping to ensure what the future holds. Pandemics Helping its communities to grow Unison’s ongoing success and aside, the challenge for Unison and prosper underpins Unison’s sustainability. remains the same. The pace and purpose, vision, and company With a big programme of work exact nature of future technology values. ahead the Company looks and consumer behaviour, forward to another busy and alongside regulatory reform, The Board continues to be challenging year. remains largely unknown and impressed with the level and difficult to predict. As a business, depth of talent within the Unison the Company can only continue team and will sustain its focus on to look ahead – trying to identify building further on this through trends and working on what it can its work in the leadership and work to do better and how. The engagement space. breadth of the programmes and activities currently being delivered on, worked on and proposed Unison continued its support for Junior Sport through its Greatest are set out above. These will Unison’s Lake Safety Programme in Supporter Programme. action in Rotorua, Lake Tarawera. continue in the coming year and new initiatives will be identified as circumstances require. PHILIP HOCQUARD KEN SUTHERLAND Unison is aware that COVID-19 UNISON GROUP CHAIR UNISON GROUP CHIEF EXECUTIVE is by no means an issue of the past but is cautiously optimistic that it is well placed to deal with challenges as they arise. P-36 ///////// UNISON ANNUAL REPORT 2021 CORPORATE GOVERNANCE STATEMENT CORPORATE GOVERNANCE STATEMENT UNISON ANNUAL REPORT 2021 ///////// P-37

Lucknow Primary School student competing in the Flaxmere Chess Tournament that Unison supported during the year. P-38 ///////// UNISON ANNUAL REPORT 2021 CORPORATE GOVERNANCE STATEMENT CORPORATE GOVERNANCE STATEMENT UNISON ANNUAL REPORT 2021 ///////// P-39

During Unison’s Switch Gala Day a group of boys enjoy a game of netball in Hawke’s Bay, while female students get stuck in on the rugby field. THIS STATEMENT PROVIDES AN OVERVIEW OF THE COMPANY’S MAIN CORPORATE GOVERNANCE POLICIES, PRACTICES AND PROCESSES ADOPTED OR FOLLOWED BY THE BOARD

ROLE OF THE BOARD OF BOARD COMMITTEES DIRECTORS Audit and Risk Committee Other Committees The Board of Directors (the Unison has a formally constituted In addition, the Board establishes “Board”) is appointed by the Audit and Risk Committee, other committees on an “as shareholders’ representatives, the responsible for reviewing the required” basis to consider Trustees of Hawke’s Bay Power Company’s accounting policies, matters such as due diligence Consumers’ Trust. financial management, financial reviews of acquisitions and other statements, management of major transactions. The Board is responsible for information systems and systems setting and monitoring the of internal control, external strategic direction, policies, and internal risk management RISK MANAGEMENT and control of the Company’s functions, and the treasury policy. activities, with day-to-day The Board oversees a formal The Committee also considers management delegated to the risk management policy and internal risk assessments and Group Chief Executive. framework that are consistent external audit reports as well as with ISO 31000:2018 Risk The Board has a formal charter the appointment of the external Management - Guidelines. that outlines the responsibilities auditor, audit relationship matters of the Board and the Group Chief and fees. The Board is responsible for Executive and that provides a reviewing and ratifying the code of ethics to guide Directors The Committee meets on average Company’s risk management and the Group Chief Executive six times a year, with additional practices and its internal controls in carrying out their duties and meetings being convened when systems. responsibilities. This is available required. The Board monitors the on the Company’s website. Remuneration Committee Company’s risk position and The Board meets regularly during The Board promotes activities, principally through the financial year, with additional remuneration of directors and the Audit and Risk Committee, full meetings and sub-committee executives that is transparent, fair and the Board considers the meetings being convened when and reasonable in a competitive recommendations and advice of required. market for the skills, knowledge external and internal auditors and and experience required by the other external advisors on the Company. risks that face the Company. The Committee makes The Board ensures that recommendations to the Board recommendations made by the regarding the appointment of external and internal auditors the Group Chief Executive and and other external advisers are annually reviews the remuneration investigated and appropriate packages of executive managers, action is taken to ensure that the including the Group Chief Company has an appropriate Executive, as well as reviewing the internal control environment in performance of the Group Chief place to manage the key risks Executive. External advice may identified. be sought as part of its review. The Committee also periodically reviews and makes recommendations to the Board regarding general remuneration policy. P-40 ///////// UNISON ANNUAL REPORT 2021 CORPORATE GOVERNANCE STATEMENT CORPORATE GOVERNANCE STATEMENT UNISON ANNUAL REPORT 2021 ///////// P-41

Unison Board members and the Executive Management team during one of their monthly board meetings.

HEALTH AND SAFETY TREASURY POLICY STATEMENT OF DIRECTORS’ INTERESTS MANAGEMENT Exposure to treasury-related CORPORATE INTENT REGISTER The Board has a strong progress of current initiatives for as workplace health and safety financial risks is managed in In accordance with Section 39 of The Company maintains and commitment to ensuring that continual improvement within this reporting, with the Board receiving accordance with the Company’s the Energy Companies Act 1992, reviews monthly an Interests Unison’s workers return from work core value area of the company. the external audit report on the treasury policy. This policy the Directors annually submit a Register to record particulars of healthy and safe, and that our performance of Unison’s PSMS. sets out financial and treasury Statement of Corporate Intent for transactions or matters involving Public safety is also an area of assets do not present a significant management objectives, the coming financial year to the Directors. vital importance to Unison and In addition to receiving information risk to the public or property, as specific responsibilities, limits Hawke’s Bay Power Consumers’ accordingly we have in place on health and safety performance, the Company works towards its on management authority, Trust for endorsement. This a Public Safety Management and the progress of initiatives, goal of “Zero Harm”. permissible financial instruments, document outlines the Company’s System (PSMS) certified to the Board members undertake field counterparty credit limits and overall objectives, intentions and NZS 7901:2008 “Electricity observation visits to witness, first- Monthly Board reporting collates reporting, and monitoring financial performance targets and and gas industries – Safety hand, Unison’s health and safety a summary of Unison Networks’ requirements. is available on the Company’s management systems for public systems in action. workplace health and safety website. performance against leading and safety” standard. Board reporting Under the treasury policy the lagging indicators. In addition, the on public safety matters follows Board is responsible for approving Board receives information on the the same format and structure all treasury and interest rate strategies and any changes to those strategies. P-42 ///////// UNISON ANNUAL REPORT 2021 BOARD OF DIRECTORS BOARD OF DIRECTORS UNISON ANNUAL REPORT 2021 ///////// P-43

Philip Hocquard, Unison Group Chair. P-44 ///////// UNISON ANNUAL REPORT 2021 BOARD OF DIRECTORS BOARD OF DIRECTORS UNISON ANNUAL REPORT 2021 ///////// P-45

PHILIP LUCY HOCQUARD ELWOOD Audit and Risk Committee Member Chair, Audit and Risk Committee Member and Remuneration Committee Member Lucy Elwood has experience across diverse industries, including extensive regulatory, digital, consumer and risk Philip Hocquard is a business adviser, company executive experience. and director with broad experience of many different types of business, corporate and commercial structures, Lucy is a Wellington based director and currently Chief financing options, business strategies and governance. Executive of the Cancer Society. Prior to this Lucy was Head He holds a law degree from Victoria University and is of Legal, Regulatory and Risk at Trade Me. Lucy has over 15 a Chartered Member of the New Zealand Institute of years in legal practice advising on projects at the crossroads Directors. of commercial interests and Government policy, including over five years as Managing Director of Elwood Law. Philip was appointed to the Unison Networks Limited Board in July 2009. He joined the Unison Contracting Lucy was appointed to the Unison Board in June 2015 Services Limited Board in June 2010. He is a director and the UnisonFibre Limited Board in June 2018. She is a and chair of a number of privately owned Hawke’s Bay chartered member of the Institute of Directors. Lucy has companies. Philip is also a Trustee of the Hawke’s Bay a science degree as well as an honours degree in law, and Rescue Helicopter Trust. has previously held roles in listed companies, government departments and at regulatory bodies.

ROBERT BRENDEN WHEATER Audit and Risk Committee Chair and Remuneration HALL Committee Member Rob has worked in senior business roles in New Zealand, Deputy Chair, Audit and Risk Committee Member the Middle East, Australia, China and North America. This and Remuneration Committee Member work included 27 years’ in the electrical industry where he Brenden Hall is an independent director and business gained experience in many fields including strategy, business advisor with over thirty years of experience across development, mergers and acquisitions, electrical contracting a multiple range of industries including electricity, and manufacturing, finance and information technology. information technology and agricultural export. He has served on various boards, advisory boards and other Brenden holds a Commerce degree from Victoria governance committees. Rob joined the Board of Unison University of Wellington and is a Chartered Member Networks Limited in February 2017. He was appointed to the of the Institute of Directors. He currently provides ETEL Limited Board in June 2018 and was elected the Audit advisory services in strategy development, mergers and Risk Committee Chair in August 2019. He is also the and acquisitions and export market development. Chair of Freedom Internet NZ Limited and True North Equities Limited and is on the boards of Mindhive Limited and Te Mata Brenden has held board governance positions since Mushroom Holdings Limited. 2002. He joined the ETEL Limited Board in May 2009, the Unison Networks Limited Board in July 2011 and Rob lives in Havelock North and has an honours degree in the UnisonFibre Limited Board in December 2011. He commerce and is a member of the Chartered Accountants was born and educated in Wellington and now resides Australia and New Zealand and is a Chartered Member of the in Auckland. Institute of Directors. P-46 ///////// UNISON ANNUAL REPORT 2021 BOARD OF DIRECTORS BOARD OF DIRECTORS UNISON ANNUAL REPORT 2021 ///////// P-47

CHRISTINE SPRING Audit and Risk Committee Member and Remuneration Committee Member Christine Spring was appointed a director of the Company in July 2017. Christine is a civil engineer and has approximately 25 years' experience in infrastructure development in New Zealand, Australia, England, United Arab Emirates, Asia and the Pacific Islands. Her executive management expertise was focused on the strategy, stakeholder management and planning of significant capital development projects, primarily in the aviation industry. She has been a Hawke's Bay resident since 2013, after choosing to relocate back to New Zealand after ten years of working abroad. She is delighted to be able to contribute to the Bay with her appointment to the Board of Unison Networks Limited. In June 2018 Christine was appointed to the Board of Unison Contracting Services Limited, a wholly owned subsidiary of Unison Networks Limited. Christine is also a non-Executive Director of Auckland International Airport Limited, NZ Windfarms Limited, Western Sydney Airport Limited in Australia, and Chair of Isthmus.

DAN DRUZIANIC Audit and Risk Committee Member Dan is a chartered accountant, business advisor and independent director with broad experience across business sectors including agribusiness, health, infrastructure, property and investment. He holds a Commerce degree from Lincoln University, is a Fellow of Chartered Accountants of Australia and New Zealand (CAANZ) and is a member of the New Zealand Institute of Directors. Dan was appointed to the Unison board on 5 May 2020. He resides in Hawke’s Bay and is also Chairperson of the Hawke’s Bay Regional Investment Company Limited (HBRIC). He also sits on the board of Bostock New Zealand Limited and the Hawke’s Bay Community Fitness Centre Trust. P-48 ///////// UNISON ANNUAL REPORT 2021 STATUTORY INFORMATION STATUTORY INFORMATION UNISON ANNUAL REPORT 2021 ///////// P-49

UCSL employee laying cables as part of a new subdivision in Parklands, Napier. P-50 ///////// UNISON ANNUAL REPORT 2021 STATUTORY INFORMATION STATUTORY INFORMATION UNISON ANNUAL REPORT 2021 ///////// P-51

THE DIRECTORS ARE PLEASED TO PRESENT THE ANNUAL REPORT DIRECTORS’ INTERESTS AND ACCOMPANYING FINANCIAL STATEMENTS IN RESPECT OF UNISON Some Directors have an interest transactions which the Company NETWORKS LIMITED’S OPERATIONS FOR THE TWELVE MONTHS TO in transactions with the Company has with other consumers. 31 MARCH 2021 involving the supply of services on standard terms and conditions The following Directors declared to premises in which they have interests in the entities listed. The interests. The interest which declaration serves as notice that FINANCIAL RESULTS On 17 June 2021, the Directors declared the same amount, these Directors may have in such the Director may benefit from being a fully imputed dividend of $15.8 million ($22.0 million transactions is no different in kind, any transactions between the The Group’s earnings before inclusive of imputation credits), which equates to 24.7 cents quality, benefit or obligation from Company and the identified entity. interest and tax for the twelve per share, in respect of the 2020/21 financial year. This months under review was $53.8 dividend will be paid to the Trust on or about 3 August 2021. million, compared with $59.4 million for the previous twelve DIRECTOR ENTITY months. The net surplus for 2021 DIRECTORS • Trustee, Hawke’s Bay Helicopter Rescue Trust was $33.0 million (2020: $32.0 At the Annual General Meeting held on 23 July 2020, Mr Dan P Hocquard million). Druzianic’s appointment effective 5 May 2020 was confirmed, • Director, Mission Estate Winery Limited and Miss Spring was re-elected for a further term. Mr Connell’s • Director, Telarc Limited PRINCIPAL ACTIVITIES resignation effective 31 August 2019 was noted. • Director, WEL Networks Limited P Connell Unison Networks Limited • Chair, Accreditation Council (formerly Testing and its subsidiaries (together DIRECTORS’ REMUNERATION AND OTHER Laboratory Registration Council) the Group) provide electricity BENEFITS distribution and line function B Hall • Director of Aurora Energy Limited Directors’ remuneration from the Company in the year to services to consumers and 31 March 2021 was: businesses, as well as fibre R Wheater • Shareholder, Askyourteam NZ Limited optic network interconnections and related services throughout PARENT SUBSIDIARIES A Bayly • Director, Askyourteam NZ Limited the Hawke’s Bay, Rotorua and Taupo regions. The Group also $ $ provides electrical, fibre, civil and vegetation contracting services; P Hocquard 130,000 25,000 manufactures electrical products for the New Zealand, Australian, B Hall 88,000 53,400 DIRECTORS’ INDEMNITY AUDITORS Pacific and Indonesian markets; AND INSURANCE In accordance with Section 45 of the Energy Companies Act 1992, and operates a captive insurance R Wheater 88,000 38,000 The Company provides cover and Section 15 of the Public Audit Act 2001, the Auditor-General company. to its Directors and certain continues as Auditor. L Elwood 65,000 15,400 executives for personal loss The amount payable by the Company to Audit New Zealand is COMPANY’S AFFAIRS (being judgements, settlements C Spring 65,000 25,000 $254,000. The Directors consider the state and defence costs) caused by wrongful acts in the course of of the Company’s affairs to be D Druzianic 59,583 their duties where indemnity is not satisfactory. Details of the year THIS IS MADE UP OF: available from the Company. under review are included in the A Bayly 25,000 Annual Report and the Financial Unison Networks Limited $160,000 Statements accompanying this B Martin 8,500 INFORMATION USED BY report. DIRECTORS J Palairet 8,500 Unison Insurance Limited $22,000 There were no notices from DIVIDEND Directors requesting the use of P Connell 38,000 For other services $72,000 A fully imputed dividend of $15.8 company information received in million ($22.0 million inclusive D Frow 38,000 their capacity as Directors, which of imputation credits), which would not otherwise have been equates to 24.7 cents per share, S Blanch 16,038 available to them. was declared during the year and paid to the Hawke’s Bay Power DONATIONS Consumers’ Trust on 1 August 2020. Donations of $30,000 were made by the Group in the financial year to 31 March 2021. P-52 ///////// UNISON ANNUAL REPORT 2021 TRUSTEES' STATEMENT TRUSTEES' STATEMENT UNISON ANNUAL REPORT 2021 ///////// P-53

Diana Kirton, Hawke’s Bay Power Consumers’ Trust Chair. P-54 ///////// UNISON ANNUAL REPORT 2021 TRUSTEES' STATEMENT TRUSTEES' STATEMENT UNISON ANNUAL REPORT 2021 ///////// P-55

ON THE COMPLIANCE BY UNISON NETWORKS LIMITED WITH THE STATEMENT OF CORPORATE INTENT FOR THE YEAR ENDED 31 MARCH 2021 COMPLIANCE WITH OTHER MATTERS All of the shares in Unison Networks Limited are held by the Hawke’s Bay Power Consumers’ Trust on The Statement of Corporate Intent also details matters relating to behalf of consumers who are connected to Unison’s network in Hawke’s Bay. the Company’s scope of activities, dividend distributions, accounting As the Trust is the majority shareholder, the Trustees are required to prepare a statement, for inclusion policies, information to be provided to shareholders and administrative in Unison’s Annual Report, commenting on the Company’s compliance with the Statement of matters relating to procedures and communications with the Trust, Corporate Intent. as the sole shareholder. We are satisfied that in all these matters the Company has complied with the Statement of Corporate Intent.

SUMMARY THE 2021 STATEMENT Despite the exceptional issues that occurred during the 2020-2021 year OF CORPORATE INTENT the Trustees are pleased to report a solid financial result and can also KEY PURPOSE PERFORMANCE TARGETS report that the Company achieved all the network performance targets. Purpose: Unison’s purpose is to Unison’s 2021 Statement of enable communities to prosper Corporate Intent sets targets by delivering customers’ energy for both financial and network needs through a dynamic, flexible performance. and sustainable electricity system. Compliance: The Company Compliance: The 2020-2021 met all its financial performance trading results were impacted by targets and achieved its network DIANA KIRTON the global uncertainty caused by performance targets. The Trustees CHAIR COVID-19 and by the Commerce are satisfied with the trading results On behalf of the Trustees – Barbara Arnott, David Pearson, Commission’s regulatory reset. and the network performance. Jeff Farnworth and Kirsten Westwood Despite these influences the overall financial performance for ACTUAL the year was more favourable STATEMENT OF CORPORATE INTENT TARGETS RESULTS than expected. Total group 2021 2021 revenue was $243 million, $11 million down on the previous year FINANCIAL PERFORMANCE and operating expenditure was $7 million lower at $153 million. Earnings before interest, taxation, depreciation, amortisation and financial There was a favourable movement 10.1% 10.2% on financial instruments of $6.2 instruments as a percentage of average million resulting in a net profit assets employed before tax of $46.9 million, an increase of $5 million. Earnings before interest, taxation and financial instruments as a percentage of 5.8% 6.1% Shareholder values showed an average assets employed increase of $18 million or 4% increasing to $464 million. All Total line operating costs per consumer $357 $357 network performance targets were met during the year. NETWORK PERFORMANCE RATIO OF CONSOLIDATED Unplanned SAIDI - System Average SHAREHOLDERS’ FUNDS TO <75.8 44.67 TOTAL ASSETS Interruption Duration Index (Minutes)

• The minimum target ratio of Unplanned SAIFI - System Average <1.57 1.13 consolidated shareholders’ Interruption Frequency Index funds to total assets is set at not less than 40%. HEALTH & SAFETY PERFORMANCE • Target goal for 2021 – 51%. Medical Treatment Injuries Nil Nil Compliance: The minimum target ratio was achieved and the target Number of Public Accidents Nil 2 goal was slightly ahead of target. Hawke’s Bay Power Consumers’ Trustees L:R – The actual ratio met was 52%. Barbara Arnott, David Pearson, Kirsten Westwood, Jeff Farnworth and Diana Kirton. P-56 ///////// UNISON ANNUAL REPORT 2021 FINANCIAL STATEMENTS FINANCIAL STATEMENTS UNISON ANNUAL REPORT 2021 ///////// P-57

Hawke’s Bay Junior Hockey in action at the Unison Hockey Staduim, Mitre10 Sports Park, Hastings. P-58 ///////// UNISON ANNUAL REPORT 2021 FINANCIAL STATEMENTS FINANCIAL STATEMENTS UNISON ANNUAL REPORT 2021 ///////// P-59

STATEMENT OF PERFORMANCE 6 Unplanned SAIDI - Unplanned System Average Interruption Duration Index –this represents the average number of minutes per annum that a customer was without power as a result of unplanned outages.Targets are based on normalised values, where SAIDI is adjusted to account for major events.

7 STATEMENT OF Unplanned SAIFI - Unplanned System Average Interruption Frequency Index – this normalised value is based on the average number of interruptions per annum that a customer experiences as a result of unplanned outages. Targets are based on normalised values, where SAIFI is adjusted to account for major eventsoutages. CORPORATE INTENT 2020/21 31 MARCH 31 MARCH FOR THE YEAR ENDED 31 MARCH 2021 TARGETS 2021 2020 8 The dividend target is the dividend expected to be declared in relation to that financial year and hence paid out during the following financial year.

Safety performance Lost Time Injuries1 Nil 1 2

Medical treatment injuries in focus areas2 Nil Nil Nil

Number of public accidents3 Nil 2 Nil

Operational performance Total Line Business Cost per Consumer (nominal $’s)4 $357 $357 $377 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME Network performance5 SAIDI - System Average Interruption Duration Index6 <75.8 44.67 62.06 2021 2020 SAIFI - System Average Interruption Frequency Index7 <1.57 1.13 1.45 FOR THE YEAR ENDED 31 MARCH 2021 NOTES $’000 $’000

Group financial performance Revenue Earnings before interest, taxation, depreciation, amortisation and financial 10.1% 10.2% 11.4% instruments as a percentage of average assets employed Revenue from contracts with customers 3 239,779 252,689 Other Income 3 2,736 1,285 Earnings before interest and taxation as a percentage of average assets 5.8% 6.1% 7.2% employed Total Revenue 242,515 253,974

Profit as a percentage of average shareholders’ funds 6.1% 7.2% 7.3% Expenses Ratio of shareholders’ funds to total assets 51% 52% 53% Electricity transmission charges (33,015) (37,638)

8 Dividend target ($M) $15.8m $15.8m $15.8m Network maintenance (11,223) (10,979)

Raw materials and consumables used (40,172) (37,666)

Employee related expenses (36,062) (39,650) 1 Lost Time Injuries (LTIs) relate to the electricity lines business and are: injuries related to Unison’s critical H&S risks being risks that, prior to controls, could result in catastrophic Realised foreign exchange gains/(losses) (270) 428 consequences, such as a fatality, permanent disability, or irreversible health effects. Unison has 10 Critical Risks, including: accidental contact with live electricity; worker struck by vehicle, plant, or object; and fall from height. The 1 LTI in 2020/21 relates to an employee who was involved in a vehicle collision accident, where a member of the public fell asleep at the Other expenses (30,766) (33,267) wheel and collided with one of Unison’s vehicles. Our employee suffered concussion and required time off work to recover. Note there has been a change in the reporting of LTIs for the 2020/21 year. Unison now reports LTIs relating to critical risks only, in order to acknowledge that strain/sprain type LTIs can be unpredictable and unavoidable and to distinguish critical Loss on sale of property, plant and equipment (1,404) (1,183) from non-critical LTIs. Last year's Statement of Performance (2019/20) reported 12 LTIs, made up of 2 critical LTIs and 10 non critical LTI's. For comparison purposes there was a total of 8 LTIs in the 2020/21 year, made up of 1 critical LTI and 7 non critical LTIs. Total operating expenses (152,912) (159,955)

2 Medical Treatment Injuries relate to the electricity lines business and are: injuries that do not result in an LTI and related to Unison’s critical H&S risks being risks that, prior to controls, Earnings before interest, taxes, depreciation, amortisation and financial could result in catastrophic consequences, such as a fatality, permanent disability, or irreversible health effects. Unison has 10 Critical Risks, including: accidental contact with live instrument expenses (EBITDAF) 89,603 94,019 electricity; worker struck by vehicle, plant, or object; and fall from height. Depreciation and amortisation expense 4,5 (35,813) (34,594)

3 Public Accidents represent either harm to the public or significant damage to property caused by Unison’s operation of the electricity system.There were 2 public accidents in Earnings before interest and tax (EBIT) 53,790 59,425 2020/21:A gas worker was working on gas fittings at a property in Rotorua when he received an electric shock. A Unison Faultsperson attended and identified a broken neutral on a pole – noting broken neutrals are fixed on a reactive basis; and as part of a pole replacement project in Rotorua, service main cables needed to be extended. After the work had been completed a homeowner advised she (and another) received “tingles” off the fridge (and outside tap). The direct cause of this event was identified as the incorrect connection and Borrowings costs 8 (13,059) (13,629) livening of the service main. Operating profit before income tax 40,731 45,796

4 This represents the total operating costs of the Electrical Lines Business (which includes Unison Networks Limited and Unison Contracting Services Limited, excluding Unison Change in fair value of derivative financial instruments 6,209 (3,905) Contracting Services Limited’s margin and costs related to servicing customers other than Unison Networks Limited), but does not include the Transmission charges from Transpower New Zealand Limited. Note that last year’s Statement of Performance (2019/20) reported $346 for the 2019/20 year whereas the actual figure was $377, being the finalised amount of Profit before income tax 46,940 41,891 lines business costs per Unison’s Information Disclosures filed with the Commerce Commission. Income tax 14 (13,974) (9,860)

5 SAIDI and SAIFI were under targets due to a reduction in vegetation and environmental faults relative to historical averages, driven by stable weather conditions. Profit for the year 32,966 32,031 For 2020/21 SAIDI and SAIFI targets and actual performance are based on unplanned outages and normalised according to the requirements of the Electricity Distribution Services Default Price Quality Path Determination 2020. Last year's Statement of Performance (2019/20) reported these measures based on different regulatory methodologies, which combined CONTINUED OVER THE PAGE > planned and unplanned outages. The published figures based on those methodologies were 90.80 SAIDI and 1.87 SAIFI.For comparative purposes the 2019/20 figures on the Statement of Performance (2020/21) have been recalculated using the same methodology as the current year.On a comparable basis, If the current year figures were calculated using the previous methodology the 2020/21 performance would be 107.9 SAIDI and 1.47 SAIFI. A SAIDI major event means any period of 24 hours that starts on the hour or half past the hour, where the sum of SAIDI values over that period for unplanned interruptions exceeds the applicable SAIDI unplanned boundary value. In the 2021 financial year this meant any 24 hour period starting on the hour or half past the hour under which the class C SAIDI exceeded 4.48 minutes. There were two SAIDI major events in the 2021 financial year, so unplanned SAIDI from class C incidents within the respective SAIDI major event periods have been normalised in the unplanned SAIDI calculation.A SAIFI major event means any period of 24 hours that starts on the hour or half past the hour, where the sum of SAIFI values over that period for unplanned interruptions exceeds the applicable SAIFI unplanned boundary value. In the 2021 financial year this meant any 24 hour period starting on the hour or half past the hour under which the class C SAIFI exceeded 0.0735 interruptions. There was one SAIFI major event in the 2021 financial year, so unplanned SAIFI from class C incidents within this SAIFI major event period have been normalised in the unplanned SAIFI calculation. Note: The separation of planned and unplanned network performance measures have corresponded with changes in regulation introduced by the Commerce Commission under the new Default Price Quality Path determination from 1 April 2020. An unplanned loss of supply event can, in some circumstances, be followed by restoration of supply to some consumers and then by a successive interruption as a result of isolating the initial cause or making repairs and completing the permanent restoration of supply to all consumers. For the avoidance of doubt, where this occurs, Unison’s reported SAIFI records the initial outage and not any subsequent short duration outages required to effect the restoration of supply. Unison’s reported SAIDI includes the consumer minutes from subsequent short duration outages required to effect the restoration of supply. This recording approach has not changed from Unison’s previous statements. The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes. P-60 ///////// UNISON ANNUAL REPORT 2021 FINANCIAL STATEMENTS FINANCIAL STATEMENTS UNISON ANNUAL REPORT 2021 ///////// P-61

CONSOLIDATED STATEMENT OF FINANCIAL POSITION CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME (CONTINUED) 2021 2020 AS AT 31 MARCH 2021 NOTES $’000 $’000

2021 2020 ASSETS FOR THE YEAR ENDED 31 MARCH 2021 NOTES $’000 $’000 Current assets Cash and cash equivalents 6 12,529 10,097 Other comprehensive income: Trade and other receivables 9 29,333 30,611 Items that may be subsequently reclassified to profit or loss: Inventories 10 31,752 36,381 Gain/(loss) on financial instruments taken to equity 1,341 (3,007) Derivative financial instruments 19 93 1,374 Deferred tax impact (376) 842 Total current assets 73,707 78,463 Currency translation differences 225 (48)

Other comprehensive income for the year, net of tax 1,190 (2,212) Non current assets Property, plant and equipment 4 762,132 741,997 Total comprehensive income for the year 34,156 29,819 Intangible assets 5 45,696 46,709

Profit is attributable to: Other non current assets 27 22

Owners of Unison Networks Limited 33,070 32,059 Other financial assets 11 9,507 6,455

Non controlling interest (104) (28) Derivative financial instruments 19 29,362 54,523

32,966 32,031 Total non current assets 846,724 849,706

Total comprehensive income for the year is attributable to: Total assets 920,431 928,169

Owners of Unison Networks Limited 34,260 29,847 LIABILITIES Non controlling interest (104) (28) Current liabilities 34,156 29,819 Trade and other payables 12 18,605 21,798

Borrowings 7 58,997 73,000

Current tax liabilities 2,787 1,562

Employee entitlements 7,718 9,342

Derivative financial instruments 19 2,129 509

Deferred income 4,019 2,520

Other current liabilities 13 2,565 2,575

Total current liabilities 96,820 111,306

Non current liabilities Borrowings 7 230,272 237,272

Employee entitlements 802 658

Derivative financial instruments 19 15,195 22,625

Deferred tax liabilities 14 89,395 84,642

Other non current liabilities 13 23,609 25,587

Total non current liabilities 359,273 370,784

Total liabilities 456,093 482,090

Net assets 464,338 446,079

EQUITY Share capital 15 66,661 66,661

Reserves 165 (780)

Retained earnings 397,529 380,111

Equity attributable to equity holders of Unison Networks Limited 464,355 445,992

Non controlling interest (17) 87

Total equity 464,338 446,079

The Board of Directors of Unison Networks Limited For and on behalf authorised these financial statements presented on Director Director of the Board pages 58 to 90 for issue on 23 June 2021.

The above consolidated statement of profit or loss and other The above consolidated statement of financial position should be comprehensive income should be read in conjunction with the read in conjunction with the accompanying notes. accompanying notes. P-62 ///////// UNISON ANNUAL REPORT 2021 FINANCIAL STATEMENTS FINANCIAL STATEMENTS UNISON ANNUAL REPORT 2021 ///////// P-63

CONSOLIDATED STATEMENT OF CASH FLOW CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

2021 2020 FOR THE YEAR ENDED 31 MARCH 2021 $’000 $’000 ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY TRANSLATION NON Cash flows from operating activities SHARE RETAINED OF FOREIGN CONTROLLING TOTAL FOR THE YEAR ENDED 31 CAPITAL EARNINGS OPERATIONS RESERVES TOTAL INTEREST EQUITY Receipts from customers 243,957 254,698 MARCH 2021 $’000 $’000 $’000 $’000 $’000 $’000 $’000 Payments to suppliers and employees (150,060) (158,907)

Interest paid (13,752) (14,172) Balance as at 1 April 2020 66,661 380,112 (165) (616) 445,993 87 446,080 Interest received 126 113 Profit for the year - 33,070 - - 33,070 (104) 32,966

Income taxes paid (7,995) (11,191) Gain on the revaluation of land and ------Net cash inflow / (outflow) from operating activities 72,276 70,541 buildings, net of tax Prior year adjustment - (93) - - (93) - (93) Cash flows from investing activities Cash flow hedges, net of tax - - - 965 965 - 965 Purchase and construction of property, plant and equipment (56,101) (63,867) Currency translation differences - 244 (19) - 225 - 225 Proceeds from sale of property, plant and equipment 49 112 Total other comprehensive income - 151 (19) 965 1,097 - 1,097 Purchases of intangible assets (232) (420)

Purchase of financial assets at fair value through the profit or loss (2,876) (2,404) Total comprehensive income - 33,221 (19) 965 34,167 (104) 34,063 Proceeds from disposal of financial assets at fair value through the profit or loss 1,645 3,768

Net cash inflow / (outflow) from investing activities (57,515) (62,811) Dividends paid (24.70c per share) - (15,805) - - (15,805) - (15,805)

Cash flows from financing activities Balance as at 31 March 2021 66,661 397,528 (184) 349 464,355 (17) 464,338 Proceeds from borrowings 7,000 19,000

Repayments of borrowings - - Balance as at 1 April 2019 66,661 363,871 (130) 1,549 431,951 115 432,066 Dividends paid to owners of the parent (15,805) (15,805) Profit for the year - 32,059 - - 32,059 (28) 32,031 Payment of principal portion of lease liabilities (3,524) (3,108) Cash flow hedges (net of tax) - - - (2,165) (2,165) - (2,165) Net cash inflow / (outflow) from financing activities (12,329) 87 Currency translation differences - (13) (35) - (48) - (48)

Net increase (decrease) in cash and cash equivalents 2,432 7,817 Total other comprehensive income - (13) (35) (2,165) (2,212) - (2,213) Cash and cash equivalents at the beginning of the financial year 10,097 2,280

Effects of exchange rate changes on cash and cash equivalents - - Total comprehensive income - 32,046 (35) (2,165) 29,847 (28) 29,818

Cash and cash equivalents at end of year 12,529 10,097 Dividends paid (24.70c per share) - (15,805) - - (15,805) - (15,805)

Balance as at 31 March 2020 66,661 380,112 (165) (616) 445,993 87 446,079 RECONCILIATION OF PROFIT AFTER INCOME TAX TO NET CASH INFLOW FROM 2021 2020 OPERATING ACTIVITIES $’000 $’000

Profit for the year 32,966 32,031

Adjustments for: Depreciation and amortisation 35,813 34,594

Net (gain)/loss on sale of property, plant and equipment 1,404 1,183

Fair value change in financial instruments via the statement of comprehensive income (6,209) 3,905

Adjustment for lease recognition - 3,390

Capitalised interest (440) (457)

Change in assets and liabilities: (Increase)/decrease in receivables, prepayments and inventory 5,934 (3,695) Increase/(decrease) in payables (excluding capital items), accruals and employee (3,171) 921 entitlements Increase/(decrease) in income taxes payable 1,226 (1,167)

Deferred tax 4,753 (164)

Net cash inflow / (outflow) from operating activities 72,276 70,541

The above consolidated statement of cash flows should be read in The above consolidated statement of changes in equity should be conjunction with the accompanying notes. read in conjunction with the accompanying notes. P-64 ///////// UNISON ANNUAL REPORT 2021 FINANCIAL STATEMENTS FINANCIAL STATEMENTS UNISON ANNUAL REPORT 2021 ///////// P-65

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1 ABOUT THIS REPORT

(a) Entity reporting ii Historical cost convention The adoption of these amendments listed (f) Foreign currency translation historical experience and various other above did not have any impact on the factors that are believed to be reasonable Unison Networks Limited is a company These consolidated financial statements Transactions in foreign currencies are current period or any prior period and is under the circumstances. Actual results registered under the Companies Act 1993. have been prepared under the historical translated at the New Zealand dollar not likely to affect future periods. may differ from these estimates. cost convention, as modified by the rate of exchange at the date of the Unison Networks Limited and its revaluation of financial assets and liabilities transaction. At balance date foreign The estimates and underlying assumptions subsidiaries (together the Group) (d) Standards, amendments and (including derivative instruments) at fair monetary assets and liabilities not hedged are reviewed on an on going basis. provide electricity distribution and line interpretations to existing standards value through profit or loss, and certain by foreign currency derivative instruments Revisions to accounting estimates are function services to consumers and that are not yet effective classes of property, plant and equipment. are translated at the closing rate, and recognised in the period in which the businesses, as well as fibre optic network exchange variances arising are included estimate is revised if the revision affects interconnections and related services Certain new accounting standards and in the statement of profit or loss and other only that period, or in the period of the throughout the Hawke's Bay, Rotorua (c) New and amended standards amendments have been issued that are comprehensive income. revision and future periods if the revision and Taupo regions. The Group also adopted by the Group not mandatory for the 31 March 2021 financial year and have not been early affects both current and future periods. provides civil, vegetation, electrical and The accounting policies adopted in the Monetary assets and liabilities in foreign adopted. Those new standards and fibre contracting services; manufactures preparation of the financial statements currencies at balance date hedged by The Directors believe that, as at the date amendments that are relevant to the electrical products for the New Zealand, are consistent with those followed in the foreign currency derivative instruments are of these consolidated financial statements, Group are: Australian, Pacific, United Kingdom and preparation of the Group’s annual financial translated at the contract rates. there are no significant sources of Indonesian markets; and operates a statements for the year ended 31 March Interest Rate Benchmark Reform— estimation uncertainty that have not been Goodwill and fair value adjustments captive insurance company. 2020, except for the adoption of new Phase 2, Amendments to NZ IAS 1 – disclosed in these notes (refer to notes 4 arising on the acquisition of a foreign standards effective as of 1 January 2020. Classification of Liabilities as Current or and 5). The consolidated financial statements entity are treated as assets and liabilities The Group has not early adopted any Non current, Amendments to NZ IAS 1 – incorporate the assets and liabilities of all of the foreign entity and translated at the standard, interpretation or amendment Disclosure of Accounting Policies. subsidiaries of Unison Networks Limited closing rate. Exchange differences arising that has been issued but is not yet as at 31 March 2021 and the results There are no other standards that are not are recognised in other comprehensive effective. of all subsidiaries for the period then yet effective and that would be expected income. ended. Unison Networks Limited and its The Group has applied the following to have a material impact on the Group in subsidiaries together are referred to in standards and amendments for the first the current or future reporting periods and (g) Goods and Services Tax (GST) these financial statements as the Group or time for their annual reporting period on foreseeable future transactions. All items in the financial statements have the consolidated entity. commencing 1 April 2020. (e) Principles of consolidation been prepared net of GST, with the (i) 2019 Omnibus Amendments to NZ exception of receivables and payables, (b) Basis of preparation Subsidiaries are all entities over which the IFRS (effective 1 January 2020). The which include GST invoiced. Group has control. The Group controls i Compliance with NZ IFRS Standard has been issued to make minor an entity when the Group is exposed to, amendments to NZ IFRSs, including NZ (h) Notes to the financial statements The financial statements of the Group or has rights to, variable returns from its IFRS 44, NZ IFRS 10, and NZ IAS 28. have been prepared in accordance involvement with the entity and has the Information that is considered material and with Generally Accepted Accounting (ii) Definition of a Business (Amendments ability to affect those returns through its relevant to the users of these consolidated Practice in New Zealand (NZ GAAP). They to NZ IFRS 3) (effective 1 January 2020). power over the entity. Subsidiaries are financial statements is included within comply with New Zealand equivalents to The Standard has been issued to clarify fully consolidated from the date on which the notes to the consolidated financial International Financial Reporting Standards the definition of a business and provide control is transferred to the Group. They statements. The assessment of materiality ('NZ IFRS') and other applicable Financial guidance to help entities determine are deconsolidated from the date that and relevance includes qualitative as Reporting Standards, as applicable for whether an acquisition is of a business or control ceases. well as quantitative factors including the profit oriented entities. The financial a group of assets. size and nature of the balance and if the Inter company transactions, balances statements also comply with International balance is important in understanding the (iii) Interest Rate Benchmark Reform and unrealised gains on transactions Financial Reporting Standards (IFRS). Group's current or future performance. – Phase 1 (effective 1 January 2020) between group companies are eliminated. The Group is designated as a profit The Standard amends NZ IFRS 9 Unrealised losses are also eliminated Other relevant accounting policy oriented entity for financial reporting Financial Instruments, NZ IAS 39 unless the transaction provides evidence information not included in the notes to the purposes. Financial Instruments: Recognition and of an impairment of the transferred asset. accounts is included below. Measurement, and NZ IFRS 7 Financial Accounting policies of subsidiaries have The consolidated financial statements Instruments: Disclosures. been changed where necessary to ensure have been prepared in accordance with (i) Critical judgements and estimations consistency with the policies adopted by the requirements of the Companies Act (iv) Definition of Material (Amendments to in applying accounting policies the Group. 1993 and Energy Companies Act 1992. NZ IAS 1 and NZ IAS 8). The Standard The preparation of financial statements definition of material has been amended Non controlling interests in the results and The consolidated financial statements in conformity with NZ IFRS requires and additional guidance provided to make equity of subsidiaries are shown separately are presented in New Zealand dollars judgements, estimates and assumptions it easier for entities to make materiality in the consolidated statement of profit or and all values are rounded to the nearest that affect the application of policies and judgements in the preparation of their loss and other comprehensive income, thousand ($000), except where otherwise reported amounts of assets and liabilities, financial statements. consolidated statement of changes in indicated. income and expenses. The estimates and equity and consolidated statement of associated assumptions are based on financial position respectively. P-66 ///////// UNISON ANNUAL REPORT 2021 FINANCIAL STATEMENTS FINANCIAL STATEMENTS UNISON ANNUAL REPORT 2021 ///////// P-67

2 INVESTMENTS IN SUBSIDIARIES

Accounting policy REVENUE REVENUE Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Company is The Group derives revenue from the transfer of goods RECOGNISED AT A RECOGNISED OVER exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those and services over time and at a point in time as follows: POINT IN TIME TIME TOTAL $’000 $’000 $’000 returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. 2020 The consolidated financial statements incorporate the assets, Electricity distribution liabilities and results of the following subsidiaries note e(1): Line revenue - 150,890 150,890

Capital contributions - 9,051 9,051 NAME OF ENTITY COUNTRY OF CLASS OF EQUITY HOLDING Distribution transformers 2021 2020 % % Sale of manufactured goods - 70,899 70,899 Transformer servicing - 1,032 1,032 Unison Contracting Services Limited New Zealand Ordinary 100 100 Switchgear Unison Fibre Limited New Zealand Ordinary 100 100 Sale of manufactured goods - 4,032 4,032 Unison Insurance Limited New Zealand Ordinary 100 100 Parts and servicing - 785 785 ETEL Limited New Zealand Ordinary 100 100 Electrical contracting services - 8,045 8,045 - ETEL Transformers PTY Limited Australia Ordinary 100 100 Fibre network access services - 2,307 2,307 - ETEL Services Limited New Zealand Ordinary 100 - All other income 4,053 1,595 5,648 - Pt Lucky Light Globalindo Indonesia Ordinary 90 90 Total revenue from contracts with customers 4,053 248,636 252,689 Unison Energy Limited New Zealand Ordinary 100 100

- RPS Switchgear Limited New Zealand Ordinary 100 100

- RPS Switchgear Pty Limited Australia Ordinary 100 100

- Kirkwall Holdings SA Pty South Africa Ordinary 100 100 Accounting policy alternative use to the asset without a third party, revenue is recognised over significant economic losses and the Group time as a result of control of the asset (i) Electricity line revenue having a right to payment for performance transferring to the customer over the time. The Group owns, manages and operates completed to date. For contracts with Connection fee revenue is recognised an electricity distribution network. The multiple performance obligations revenue at a point in time when the performance 3 REVENUE 2021 2020 Group distributes electrical energy on is recognised at a point in time when the obligation is satisfied. $’000 $’000 behalf of electricity retailers that has been performance obligation is satisfied. (v) Fibre network access services brought to points of supply by the National (iii) Sale of manufactured goods Grid operator or produced by embedded The Group owns and operates a fibre Revenue from contracts with customers 239,780 252,689 generators, to consumers connected to The Group manufactures and sells a range optic network. the Group's electricity distribution network. of electricity distribution transformers and Other Services Income 654 1,258 Revenue is recognised as fibre optic switchgear. Sales are recognised when Line revenue relates to the provision of services are provided to retail service Interest Received 119 164 control of the products has transferred, electricity distribution services and includes providers. Billing for network access being when the products are delivered to Investment Income 1,945 (188) pass through revenue and recoverable services are made on a monthly basis. the customer, and there is no unfulfilled cost revenue. Prices are regulated, and Unbilled revenue from the date of Recovery of debt previously written off 17 51 obligation that could affect the customer’s customers are charged through a mix of connection to the billing cycle date is Total revenue 242,515 253,974 acceptance of the products. Delivery fixed charges which are recognised on a recognised in the month of service. occurs when the products have been straight line basis and variable charges Revenue is deferred in respect of the shipped to the specific location, the risks which are recognised based on the portion of the fixed monthly charges that of obsolescence and loss have been REVENUE REVENUE volume of distribution services provided. have been billed in advance. Revenue The Group derives revenue from the transfer of goods transferred to the customer, and either the RECOGNISED AT A RECOGNISED OVER Consistent with NZ IFRS 15 this revenue from installations and connections are and services over time and at a point in time as follows: POINT IN TIME TIME TOTAL customer has accepted the products in is recognised over time at the fair value recognised upon completion of the $’000 $’000 $’000 accordance with the sales contract, the of services provided based on an output installation or connection. acceptance provisions have lapsed, or method as the service is delivered to 2021 the Group has objective evidence that all Impact of 2020 Default Price Quality Path match the pattern of consumption. Pass Electricity distribution criteria for acceptance have been satisfied. determination on revenue recognition through and recoverable costs include Line revenue - 137,531 137,531 transmission costs, statutory levies and A receivable is recognised when the goods Regulated lines revenue for the 2020/21 utility rates. are delivered as this is the point in time financial year was $2.7 million favourable Capital contributions - 10,288 10,288 that the consideration is unconditional to budget, largely due to higher residential (ii) Capital contributions Distribution transformers because only the passage of time is electricity volumes than forecasted. Under Sale of manufactured goods - 62,709 62,709 Customer contribution revenue relates to required before the payment is due. the Commerce Commission’s allowable contributions received from customers revenue cap rules, this over-recovery (iv) Electrical contracting services Transformer servicing - 1,069 1,069 towards the costs of reticulating electricity of lines revenue will be returned to revenue Switchgear to new subdivisions, constructing consumers via a line charge adjustment in uneconomic lines and relocating existing The Group provides electrical contracting the 2022/23 financial year. Sale of manufactured goods - 9,521 9,521 lines. The revenue recognised is the fair services to third parties. Revenue is Parts and servicing - 397 397 value of the asset being constructed. recognised as the fair value of the service Electrical contracting services - 10,206 10,206 For major works, revenue is recognised provided or asset being constructed. over time as a result of there being no Where an asset is being constructed for Fibre network access services - 2,587 2,587

All other income 3,778 1,694 5,472

Total revenue from contracts with customers 3,778 236,002 239,780 P-68 ///////// UNISON ANNUAL REPORT 2021 FINANCIAL STATEMENTS FINANCIAL STATEMENTS UNISON ANNUAL REPORT 2021 ///////// P-69

ELECTRICITY ROU (b) Carrying amounts that would have 4 PROPERTY, been recognised if land and buildings PLANT AND DISTRIBUTION FIBRE BUILDING LAND & OTHER ASSETS UNDER NETWORK NETWORK ASSETS BUILDINGS ASSETS CONSTRUCTION* TOTAL were stated at cost EQUIPMENT $’000 $’000 $’000 $’000 $’000 $’000 $’000 If freehold land and buildings were stated on the historical cost basis, the amounts would be as follows: Year ended 31 March 2021 2021 2020 Opening net book amount 624,081 24,876 24,552 17,746 35,343 15,399 741,997 $’000 $’000 IFRS 16 Adjustment ------

Additions 37,914 1,454 790 299 6,030 10,370 56,857 Freehold land & buildings Disposals (1,384) - (72) - (217) (481) (2,154) Cost 14,769 14,473 Depreciation charge (22,669) (1,408) (3,023) (485) (6,983) - (34,568) Accumulated depreciation (3,830) (3,378) Closing net book amount 637,942 24,922 22,247 17,560 34,173 25,288 762,132 Net book amount 10,939 11,095

At 31 March 2021

Cost 918,641 33,862 26,863 19,769 92,771 25,288 1,117,194 Accounting policy Assets carried at fair value are assessed exists, the recoverable amount of assets is Accumulated depreciation (280,699) (8,940) (4,616) (2,209) (58,598) - (355,062) annually to ensure there is no material estimated to determine the extent of any (i) Assets carried at historic cost Net book amount 637,942 24,922 22,247 17,560 34,173 25,288 762,132 difference between the carrying value and impairment loss. The recoverable amount The electrical distribution network, fibre fair value. is the higher of an asset's net selling price network and other assets are recognised and value in use. An impairment loss is (iii) Self constructed assets Year ended 31 March 2020 at historical cost less depreciation and recognised whenever the carrying amount impairment. Subsequent additions are of an asset exceeds its recoverable Opening net book amount 601,302 24,378 - 18,206 28,060 12,890 684,836 The cost of self constructed assets recognised at cost and are included in includes the cost of all materials used amount. Impairment losses are recognised IFRS 16 Adjustment - - 21,808 - - - 21,808 the asset’s carrying amount or recognised on construction, direct labour on the in the statement of profit or loss and other Additions 45,748 1,859 4,885 591 14,148 2,506 69,737 as a separate asset, as appropriate, only project, costs of obtaining Resource comprehensive income except impairment when it is probable that future economic Management Act consents, financing losses on revalued assets which are first Disposals (1,049) (3) - - (172) - (1,224) benefits associated with the item will flow costs that are directly attributable to the taken to the revaluation reserve if there is a Depreciation charge (21,920) (1,359) (2,141) (1,049) (6,691) - (33,160) to the Group and the cost of the item can project and an appropriate proportion of surplus in respect of that asset. be measured reliably. All other repairs and variable and fixed overhead. Costs cease Closing net book amount 624,081 24,875 24,552 17,748 35,345 15,396 741,997 An assessment was carried out which maintenance are charged to the statement to be capitalised as soon as the assets concluded that there were no impairment of comprehensive income during the are ready for productive use and do not indicators for UNL Electricity Distribution financial period in which they are incurred. include any inefficiency costs. At 31 March 2020 Network, USCL and UIL. RPS had Cost 883,709 32,410 26,693 4,903 88,287 15,396 1,051,398 (ii) Assets carried at fair value (iv) Assets under construction indications of impairment and so an impairment test was completed. The DCF Land and buildings are stated at fair Valuation - - - 13,321 - - 13,321 The cost of assets under construction analysis showed that no impairment was value based on periodic, but at least includes direct materials, labour, an Accumulated depreciation (259,628) (7,535) (2,141) (476) (52,942) - (322,722) necessary. Key assumptions include a five yearly, valuations determined by an allocation of overheads that directly relate discount rate of 8.4%. Net book amount 624,081 24,875 24,552 17,748 35,345 15,396 741,997 independent registered valuation company, to the work performed, and financing and are adjusted for additions at cost and costs that are directly attributable to the depreciation at appropriate rates. project. Depreciation method and useful lives *Assets under construction include $5.8 million (31 March 2020: $4.1 million) of intangible work in progress. Any accumulated depreciation as at the (v) Disposal of Property, Plant and The Group uses judgement to determine revaluation date is eliminated against the Equipment the useful lives of assets, as detailed below: (a) Valuations of land and buildings gross carrying amount of the asset and the net amount is restated to the revalued When an item of property, plant or (i) Electrical Distribution and Fibre Land and buildings in Omahu Road, Land and buildings have been valued amount of the asset. equipment is disposed of, any gain or loss Networks Hastings and Fleet Street, Taupo were using level 2 methodology. There were no is recognised in the statement of profit or Increases in the carrying amounts arising independently valued by registered valuer transfers between levels during the period. loss and other comprehensive income and Assessing the appropriateness of useful on revaluation of land and buildings are Telfer Young Ltd, as at 22 January 2019. is calculated as the difference between life and residual value estimates of network Level 2 fair values of land, office buildings, credited to other reserves in shareholders' the sale price and the carrying value of the assets requires a number of factors to be Non financial assets carried at fair value workshops and warehouse facilities have equity. To the extent that the increase asset. On disposal of an item of property, considered such as the physical condition may be measured using different valuation been derived using the rental capitalisation reverses a decrease previously recognised plant or equipment, any revaluation surplus of the asset, expected period of use of the methods. The different levels have been approach. Market rental and sales data in the statement of profit or loss and other in respect of that asset is transferred to asset, technological advances, regulation defined as follows: of comparable land and buildings in close comprehensive income, the increase is retained earnings. and expected disposal proceeds from the proximity are adjusted for differences in first recognised in the statement of profit – Quoted prices (unadjusted) in active future sale of the asset. key attributes such as building quality, or loss and other comprehensive income. (vi) Impairment of property, plant and markets for identical assets or liabilities tenant strength (if sold under a sale and Decreases that reverse previous increases equipment (Level 1). leaseback arrangement), and other market of the same asset are first charged against The carrying amounts of the Group's – Inputs other than quoted prices included factors. The most significant inputs into revaluation reserves directly in equity to the property, plant and equipment are within level 1 that are observable for the this valuation approach are price per extent of the remaining reserve attributable reviewed at each balance date to asset or liability, either directly (that is, as square metre, and yield. to the asset; all other decreases are determine whether there is any indication prices) or indirectly (that is, derived from charged to the statement of profit or loss of impairment. If any such indication prices) (Level 2). and other comprehensive income. – Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (Level 3). P-70 ///////// UNISON ANNUAL REPORT 2021 FINANCIAL STATEMENTS FINANCIAL STATEMENTS UNISON ANNUAL REPORT 2021 ///////// P-71

(a) Impairment tests for goodwill year plan as opposed to a five year period Impairment losses on goodwill are not (as required by NZ IAS 36) as a longer reversed. Gains and losses on the disposal The Group regularly monitors the carrying timeframe is more relevant to infrastructure of an entity include the carrying amount value of its goodwill and reviews it annually assets. The model uses the Business Plan of goodwill relating to the entity sold. or more regularly if there are indications (ii) Buildings approved by the Directors as the base Goodwill is allocated to cash generating that goodwill may be impaired. The estimated useful lives of buildings are determined by an independent registered year, with network capex and maintenance units for the purpose of impairment valuation company when assessing the periodic valuation of land and buildings. The Directors believe that any reasonably being based on the most recent testing. The allocation is made to those possible change in the key assumptions Regulatory Asset Management Plan. cash generating units or groups of cash Depreciation methods and estimated useful lives are as follows: on which the recoverable amount is generating units that are expected to The value in use calculation uses the based would not cause the aggregate benefit from the business combination in following key assumptions: which the goodwill arose. ASSET CLASS DEPRECIATION METHOD USEFUL LIVES carrying amount to exceed the aggregate recoverable amount of the cash generating - Line Revenue: The impairment test The recoverable amount of goodwill is unit. uses the FY22 distribution revenue calculated using value in use (the net based on Unison’s FY22 budget. The Electrical Distribution Network Straight line 5-80 years There has been no movement in goodwill present value of expected future cash model includes forecast DPP allowable in 2021 (2020: nil movement). The carrying flows) of the cash generating units. Key Fibre Network Straight line 5-75 years revenue for FY22 FY29 using the current amount of goodwill in ETEL was $28.3m assumptions used in the value in use Buildings Straight line 7-80 years Commerce Commissions revenue cap and in Taupo/Rotorua network was model that require the Group’s estimation model as the basis for modelling the Land n/a Indefinite $14.0m. and judgement include revenue forecasts revenue forecasts from 1 April 2022 to 31 (including volumes and pricing), costs and Other assets (incl.): March 2025 and again from 1 April 2025 (b) Key assumptions used for value in discount rates. - Plant and equipment Straight line 2-25 years through to 31 March 2031. The revenue use calculations model uses a vanilla Weighted Average (ii) Computer software - Furniture and fittings Straight line 2-60 years Cost of Capital (WACC) 67th percentile ETEL Limited Acquired software licences are capitalised of 4.57% (4.23% post tax WACC) based - Motor vehicles Straight line 3-10 years on the basis of the costs incurred to The recoverable amount of this cash on the Commerce Commission’s 1 April acquire and bring to use the specific - Information technology Diminishing value or straight line 2-10 years generating unit was assessed by reference 2020 revenue reset calculation and capex software. These costs are amortised on - Leasehold Improvements Straight line 5 years to a value in use calculation which uses and opex forecasts are based on the most a straight line basis over their estimated cash flow projections based on financial recent Regulatory Asset Management useful lives (three to ten years). Leasehold improvements are depreciated over the unexpired period of the lease or the estimated remaining plans covering a 5 year period, based Plan. useful life of the improvements, whichever is shorter. The assets' residual values and useful lives are on the most recent budget and 5 year Costs associated with developing or - a post tax discount rate of 4.23% per reviewed, and adjusted if appropriate, at the end of each reporting period. strategic plan approved by the Directors. maintaining software programmes are annum (2020: 4.23% per annum). The value in use calculation uses the recognised as an expense as incurred. Costs that are directly associated with following key assumptions: Pt Lucky Light Globalindo (LLG) the production of identifiable and unique COMPUTER OTHER - Sales Real Growth Rate that assumes The recoverable amount of this cash software products controlled by the 5 INTANGIBLE ASSETS GOODWILL SOFTWARE INTANGIBLE TOTAL the cumulative average sales growth rate generating unit was assessed by reference Group, and that will probably generate $’000 $’000 ASSETS $’000 $’000 assumed by management for the next to a value in use calculation which uses economic benefits exceeding costs five years (2022 to 2026) is 6.7%. The cash flow projections based on financial beyond one year, are recognised as Directors believe that the planned growth plans covering a 5 year period, based intangible assets. Direct costs include the Year ended 31 March 2021 in the export market is reasonable and on the most recent budget and 5 year software development, employee costs Opening net book amount 42,315 3,461 933 46,709 achievable. strategic plan approved by directors. and an appropriate portion of relevant overheads. Additions - 129 103 232 - Capex: The impairment model uses The value in use calculation uses the ETEL’s budget capex in 2021-22 business Amortisation charge - (1,212) (33) (1,245) following key assumptions: (iii) Other intangible assets plan for years 2023 to 2026. The 2021- Closing net book amount 42,315 2,378 1,003 45,696 22 budget has capex of $3.1m which - Sales Growth Rate that assumes LLG will Other intangible assets include includes business assets and development grow its volume with PLN, the Indonesian indefeasible rights of use (IRU) and land expenditure split into growth and efficiency government owned corporation for easements. IRU's are cash generating in At 31 March 2021 projects of $1.6m and business as usual electricity distribution in Indonesia. As LLG nature as they provide the Group the right to connect to and use third party fibre Cost 118,203 17,119 1,436 136,758 capex of $1.5m. Spend on growth and is in a high growth phase sales growth efficiency projects includes continued rates have been modelled higher in the optic cables. Accumulated amortisation and impairment (75,888) (14,741) (433) (91,062) early years and then dropping back to a development of the drying project, ground At each balance date, the Group reviews steady growth rate. The Directors believe Net book amount 42,315 2,378 1,003 45,696 and polemount assembly lines, building the carrying amounts of its software that the planned growth in the PLN is improvements and coil press controller. and other intangible assets to determine reasonable and achievable. Business as usual includes various whether there is any indication that those Year ended 31 March 2020 equipment replacement purchases and - A post tax discount rate of 10.0% per assets have suffered an impairment loss. ongoing IT projects Opening net book amount 42,315 4,520 893 47,728 annum (2020:10.7% per annum). Additions - 347 73 420 - A post tax discount rate of 8.2% per annum (2020: 8.8% per annum). Disposals - (5) - (5) Accounting policy - Management have decided that due to Amortisation charge - (1,401) (33) (1,434) (i) Goodwill the level of headroom available that there Closing net book amount 42,315 3,461 933 46,709 is no impairment of the ETEL NZ/AU CGU Goodwill represents the excess of goodwill. the cost of an acquisition over the fair value of the Group's share of the net At 31 March 2020 Taupo/Rotorua Network identifiable assets of the acquired entity Cost 118,203 16,991 1,334 136,528 at the date of acquisition. Separately The recoverable amount of the Taupo/ recognised goodwill is tested annually for Accumulated amortisation and impairment (75,888) (13,530) (401) (89,819) Rotorua Network cash generating unit was impairment (or more frequently if events Net book amount 42,315 3,461 933 46,709 assessed by reference to a value in use or changes in circumstances indicate a calculation. The cash flow projections are potential impairment) and carried at cost *Assets under construction in Note 4 include $5.8 million (31 March 2020: $4.1 million) of intangible work in progress. based on financial forecasts covering a ten less accumulated impairment losses. P-72 ///////// UNISON ANNUAL REPORT 2021 FINANCIAL STATEMENTS FINANCIAL STATEMENTS UNISON ANNUAL REPORT 2021 ///////// P-73

6 CASH AND CASH EQUIVALENTS 2021 2020 $’000 $’000 All borrowings are unsecured and (a) Interest rate risk exposures are subject to a negative pledge and The Group manages interest rate cross guarantee. The following Group exposure in accordance with its Treasury NZD accounts 7,417 6,988 companies are parties to a negative Management Policy by ensuring the pledge and cross guarantee; Unison AUD accounts 2,353 1,515 Group’s interest rate profile is within the Networks Limited; Unison Energy Limited; interest rate risk control limits set in the USD account 1,254 326 Unison Contracting Services Limited; Policy calculated against projected total IDR account 1,505 1,256 Unison Fibre Limited; and ETEL Limited. debt over a Regulatory Control Period EUR account - 12 RPS has guarantees and liabilities with interest rate hedge instruments. outstanding under credit. 12,529 10,097 While the interest rate hedging limits Borrowings are subject to various lending allow for continuous interest rate covenants such as limitation on long risk management, hedging activity is Cash and cash equivalents includes cash (a) Risk exposure term indebtedness, leverage and other predominantly concentrated within on hand, deposits held at call with financial The maximum exposure to credit risk at the end of the ratios. The Group has complied with the reset window prior to the start of a institutions, other short term, highly liquid reporting period is the carrying amount of each class all covenants for the current and prior Regulatory Control Period. investments with original maturities of of cash and cash equivalents mentioned above. financial periods. three months or less that are readily Exposures arise predominantly from convertible to known amounts of cash and Cash and cash equivalents has a credit rating of AA. COVID-19 has had no impact on the liabilities bearing variable interest rates which are subject to an insignificant risk ability to repay borrowings when they as the Group intends to hold fixed rate of changes in value, and bank overdrafts. (b) Fair value become due and the ability to meet debt liabilities to maturity. Bank overdrafts are shown within The carrying amount for cash and cash equivalents covenants. borrowings in current liabilities on the equals the fair value. statement of financial position.

FIXED INTEREST RATE

The weighted average rates on interest rate 1 YEAR OR OVER 1 TO 2 OVER 2 TO 5 OVER 5 2021 2020 LESS YEARS YEARS YEARS TOTAL 7 BORROWINGS $’000 $’000 swaps and options are as follows: $’000 $’000 $’000 $’000 $’000

Current borrowings 31 March 2021

Bank loans - maturing within 1 year - 73,000 Interest rate swaps ($'000)* (note 19) 38,000 6,000 165,000 40,000 249,000

US Senior Notes Fixed Rate 58,997 - Weighted average interest rate (%) 4.77% 4.75% 3.13% 3.82% - Total current borrowings 58,997 73,000 USD Senior Notes Interest Rate Cross Currency 50,000 - 50,000 - 100,000 (USD'000) Term Borrowings Weighted average interest rate (%) 3.78% - 3.98% - - Bank loans - maturing between 1 and 5 years 140,000 60,000

US Senior Notes Fixed Rate 58,997 117,994 31 March 2020

198,997 177,994 Interest rate swaps ($'000)* (note 19) 27,000 38,000 136,000 75,000 276,000

Weighted average interest rate (%) 4.85% 4.77% 3.00% 3.87% - Fair Value Movement USD Senior Notes Interest Rate Cross Currency US Senior Notes Fixed Rate 6,060 11,210 - 50,000 50,000 - 100,000 (USD'000) Foreign Currency Movement Weighted average interest rate (%) - 3.78% 3.98% - -

US Senior Notes Fixed Rate 25,215 48,068 * Notional principal amounts 31,275 59,278

Total non current borrowings 230,272 237,272 Accounting policy All borrowings are measured at amortised the proceeds (net of transaction costs) and is deferred until the draw down occurs. Total interest bearing liabilities 289,269 310,272 cost adjusted for fair value movements in the redemption value is recognised in the To the extent there is no evidence that it respect of the hedged risk on borrowings consolidated statement of profit or loss is probable that some or all of the facility designated in fair value hedge relationships and other comprehensive income over will be drawn down, the fee is capitalised Borrowings are a combination of: (ii) US Senior Notes and are classified between current and the period of the borrowings using the as a prepayment for liquidity services and non current dependent on contractual effective interest method. amortised over the period of the facility to (i) Bank Loans In October 2011, USD100 million of obligations. which it relates. unsecured senior notes were issued in Fees paid on the establishment of loan The Group utilises multi tranche revolving a private placement to US institutional Borrowings are recognised initially at fair facilities are recognised as transaction debt bank facilities totalling $202 million investors, using a derivative contract to fix value, net of transaction costs incurred. costs of the loan to the extent that it is (31 March 2020: $161 million) with an exchange rate of USD 0.8475 for every Borrowings are subsequently carried at probable that some or all of the facility maturities between 13 months and 2.3 NZD. Interest is paid semi annually. USD50 amortised cost; any difference between will be drawn down. In this case, the fee years (31 March 2020: between 4 months million matures in October 2021, and and 3 years). Interest rates for all bank USD50 million matures in October 2023. loans are floating based on the bank bill rate plus a margin. P-74 ///////// UNISON ANNUAL REPORT 2021 FINANCIAL STATEMENTS FINANCIAL STATEMENTS UNISON ANNUAL REPORT 2021 ///////// P-75

2021 2020 2021 2020 10 INVENTORIES $’000 $’000 8 BORROWINGS COSTS $’000 $’000

Raw materials

Interest and finance charges paid/payable 13,788 14,429 Raw materials 14,315 14,796

Loans from related parties (289) (342) Provision for obsolescence 10 -

Capitalised interest (440) (458) 14,325 14,796

Total borrowing costs 13,059 13,629 Work in progress 2,944 3,185

Finished goods 11,177 14,138

Accounting policy Electrical and fibre related inventories 4,602 5,194 General and specific borrowing costs The Group policy is that an asset qualifies Provision for obsolescence (1,296) (932) directly attributable to the acquisition, when the cost of construction is greater construction or production of a qualifying than $500,000 and the construction Total inventories 31,752 36,381 asset, are added to the cost of those period is longer than 6 months. Interest on assets, until such time as the assets are borrowing costs are calculated based on No inventories are pledged as security for liabilities (2020: nil). substantially ready for their intended use the effective yearly interest rate of 4.87% or sale. Qualifying assets are assets that (31 March 2020: 5.34%). Accounting policy necessarily take a substantial period of All other borrowing costs are recognised in Inventories held for sale or use in the (based on normal operating capacity). It The cost of purchased electrical and fibre time to get ready for their intended use or the statement of comprehensive income in production of goods and services on a excludes borrowing costs. Net realisable related inventory is determined using the sale. the period in which they are incurred. commercial basis are valued at the lower value is the estimated selling price in average cost method. of cost and net realisable value. Cost the ordinary course of business less The write down from cost to net realisable is determined using the standard cost applicable variable selling expenses. Costs value is recognised in the statement of method. The cost of finished goods and of inventories include the transfer from profit or loss and other comprehensive work in progress comprises design costs, equity of any gains or losses on qualifying income in the period when the write down raw materials, direct labour, other direct cash flow hedges for purchases of raw occurs. costs and related production overheads materials. 2021 2020 9 TRADE AND OTHER RECEIVABLES $’000 $’000

Trade receivables 25,323 25,429 11 NON CURRENT ASSETS - OTHER FINANCIAL ASSETS 2021 2020 Other receivables 1,877 1,974 $’000 $’000

Provision for impairment of receivables (406) (443)

Total trade receivables 26,794 26,960 Corporate bonds 942 1,041

Global bond funds 1,407 789

Related party receivables 1,701 1,446 Equities 7,158 4,625

Prepayments 838 2,205 9,507 6,455

Total trade and other receivables 29,333 30,611 (a) Impairment and risk exposure The maximum exposure to credit risk at the reporting date is the carrying amount of the investments.

(a) Bad and doubtful trade receivables (c) Fair value and credit risk The Group has recognised a loss of Due to the short term nature of these Trade receivables are recognised initially at $325k (2020: $320k) in respect of bad receivables, their carrying value is fair value and subsequently measured at and doubtful trade receivables during the assumed to approximate their fair value. amortised cost using the effective interest year ended 31 March 2021. The loss method, less provision for impairment. 12 TRADE AND OTHER PAYABLES 2021 2020 The maximum exposure to credit risk at has been included in ‘other expenses’ in $’000 $’000 the reporting date is the fair value of each A provision for impairment of trade the statement of profit or loss and other class of receivables mentioned above. receivables is established when there comprehensive income. Refer to note 20(c) for more information on is objective evidence of the Group's Trade payables 13,870 15,550 There has been no indication of any the risk management policy of the Group. customers being unable to make increased bad or doubtful trade required payments. The Group makes an Interest payable 1,731 1,984 Trade receivables are amounts due receivables post balance date as a result assessment for doubtful debts where debt from customers for merchandise sold or Other payables 3,004 4,264 of COVID-19. This will continue to be is more than 90 days overdue. There have services performed in the ordinary course carefully monitored. been no significant individual impairment Total trade and other payables 18,605 21,798 of business. If collection is expected in one amounts recognised as an expense. (b) Foreign exchange and interest rate year or less (or in the normal operating Accounting policy risk cycle of the business if longer), they are classified as current assets. If not, they are These amounts represent liabilities for goods and services provided to the Group prior to Refer to note 20(f) for an analysis of presented as non current assets. the end of the financial period which are unpaid, and are initially measured at fair value, Group's exposure to foreign currency risk net of any transaction costs. These are subsequently measured at amortised cost using in relation to trade and other receivables. the effective interest rate method. The amounts are unsecured and are usually paid within 30 to 60 days of recognition. P-76 ///////// UNISON ANNUAL REPORT 2021 FINANCIAL STATEMENTS FINANCIAL STATEMENTS UNISON ANNUAL REPORT 2021 ///////// P-77

13 COMMITMENTS

(a) Capital commitments Capital expenditure contracted for at the end of the reporting period but not yet incurred is as follows: 2021 2020 $’000 $’000 Accounting policy The Group recognises a right of use borrowing rate as the discount rate. After The Group elected to use the transition Property, plant and equipment 1,715 2,556 asset and a lease liability at the lease the commencement date, the amount practical expedient to not reassess commencement date. The right of use of lease liabilities is increased to reflect whether a contract is, or contains, a lease Intangible assets 29 1,890 asset is initially measured at cost, less the accretion of interest and reduced for at 1 April 2019. Instead, the Group applied 1,744 4,446 any accumulated depreciation and the lease payments made. In addition, the standard only to contracts that were impairment losses, and adjustment for any the carrying amount of lease liabilities is previously identified as leases applying remeasurement of lease liabilities. The cost remeasured if there is a modification, a IAS 17 and IFRIC 4 at the date of initial of right of use assets comprises the initial change in the lease term, a change in the application. The above balances have been committed in relation to future expenditure on capital amount of the lease liability adjusted for lease payments (e.g. changes to future projects. Amounts already spent have been included as assets under construction. any lease payments made at or before the payments resulting from a change in an (b) Leases commencement date, plus any initial direct index or rate used to determine such lease costs incurred and an estimate of costs to payments) or a change in the assessment This note provides information for leases where the Group is a lessee. dismantle and remove the underlying asset of an option to purchase the underlying or to restore the underlying asset or the asset. The Group leases offices, manufacturing and warehouse facilities under non cancellable site on which it is located, less any lease operating leases. No operating lease contracts contain options to purchase the leased The Group cannot readily determine the incentives received. asset at the expiry of the lease period. The lease for manufacturing and warehouse interest rate implicit in the lease, therefore, facilities has an initial term of nine years with one right of renewal of six years. The lease The right of use asset is subsequently it uses its incremental borrowing rate (IBR) contains a market review clause seven years from commencement date and four years depreciated using the straightline method. to measure lease liabilities. The IBR is from renewal date. If the lease transfers ownership of the the rate of interest that the Group would underlying asset to the lessee by the have to pay to borrow over a similar term, (i) Amounts recognised in the balance sheet* end of the lease term or if the the cost and with a similar security, the funds The statement of financial position shows the following amounts relating to leases: of the right of use asset reflects that the necessary to obtain an asset of a similar 2021 2020 lessee will exercise a purchase option, value to the right of use asset in a similar $’000 $’000 the lessee shall depreciate the right of economic environment. The IBR therefore use asset from the commencement reflects what the Group 'would have to date to the end of the useful life of the pay', which requires estimation when Right-of-use assets underlying asset. Otherwise, the lessee no observable rates are available (such Buildings 22,247 24,552 shall depreciate the right of use asset as for subsidiaries that do not enter into from the commencement date to the financing transactions) or when they need 22,247 24,552 earlier of the end of the useful life of the to be adjusted to reflect the terms and *included in the line item ‘Property, plant and equipment’ in the statement of financial position. right of use asset or the end of the lease conditions of the lease (for example, when term. In addition, the right of use asset leases are not in the subsidiary's functional is periodically reduced by impairment currency). The Group estimates the IBR Lease liabilities ** losses, if any, and adjusted for certain using observable inputs (such as market Current 2,565 2,354 remeasurements of the lease liability. interest rates) when available and is required to make entity specific estimates Non-current 23,609 25,587 The lease liability is initially measured at the (such as the subsidiary's stand alone present value of the lease payments, that 26,174 27,941 credit rating). are not paid at the commencement date, **included in the line item ‘other liabilities’ in the statement of financial position. Current other liabilities in 2020 include a lease discounted using the interest rate implicit The Group has elected not to recognise make good provision of $221k in the lease or, if that rate cannot be readily right of use assets and lease liabilities determined, the Group’s incremental for leases of low value assets and short borrowing rate. The lease payments term leases, including IT equipment e.g. include fixed payments (including in those leases that have a lease term of 12 substance fixed payments) less any months or less from the commencement (ii) Amounts recognised in the statement of profit or loss lease incentives receivable, variable lease date and do not contain a purchase payments that depend on an index or a option. The Group recognises the lease The statement of profit or loss shows the following amounts relating to leases: rate, and amounts expected to be paid payments associated with these leases as 2021 2020 under residual value guarantees. The an expense on a straight line basis over $’000 $’000 lease payments also include the exercise the lease term. price of a purchase option reasonably From 1 April 2019, the Group has Depreciation charge of right of use assets certain to be exercised by the Group and recognised right of use assets for these payments of penalties for terminating Buildings 3,023 2,141 leases, except for short term and low value the lease, if the lease term reflects the leases, see note 13(i) above for further 3,023 2,141 Group exercising the option to terminate. information. Generally, the Group uses its incremental Interest expense (included in borrowing cost) 1,098 958

Expense relating to low-value assets and short-term leases (included in other expenses) 72 317

Total lease amounts 1,170 1,275

Total cash outflow for leases was $3,524m (2020: $3,425m) P-78 ///////// UNISON ANNUAL REPORT 2021 FINANCIAL STATEMENTS FINANCIAL STATEMENTS UNISON ANNUAL REPORT 2021 ///////// P-79

2021 2020 14 TAXATION $’000 $’000 Accounting policy The tax expense for the period comprises to income tax payable in respect of prior temporary difference arises from the current and deferred tax. Tax is recognised years. Current tax is calculated using rates initial recognition of goodwill or from the (a) Income tax expense in the statement of profit or loss, except that have been enacted or substantively initial recognition of an asset and liability Current tax: to the extent that it relates to items enacted by balance date. in a transaction that is not a business recognised in other comprehensive combination, and at the time of the Deferred tax liabilities are generally Current tax on profits for the year 9,619 9,293 income or directly in equity. In this transaction, affects neither accounting recognised for all taxable temporary Adjustments in respect of prior years (36) (222) case, the tax is also recognised in other profit nor taxable profit. Deferred tax differences. Deferred tax assets are comprehensive income or directly in is calculated at the tax rates that are Total current tax 9,583 9,071 recognised to the extent that it is probable equity, respectively. expected to apply in the period when the that taxable profits will be available liability is settled, or the asset is realised, Current tax is the amount of income tax against which the deductible temporary using tax rates that have been enacted or Deferred tax: payable based on the taxable profit for differences or tax losses can be utilised. substantively enacted by balance date. the current year, plus any adjustments Deferred tax is not recognised if the Deferred tax associated with temporary timing differences 4,328 586

Adjustments in respect of prior years 63 203

Total deferred tax 4,391 789 Income tax expense 13,974 9,860 15 SHARE CAPITAL

(b) Reconciliation of income tax expense to prima facie tax payable 2021 2020 2021 2020 GROUP AND PARENT SHARES SHARES $’000 $’000 Profit before income tax expense 46,940 41,891

Income tax @ 28% 13,143 11,729 Ordinary shares Fully paid (no par value) 64,000,000 64,000,000 66,661 66,661

Tax effect of amounts which are not deductible (taxable) in calculating taxable income:

- Income not subject to tax (554) (133) (a) Capital risk management - Expenses not deductible for tax purposes 1,355 307 The Parent entity's objectives when In order to maintain or adjust the capital Prior period current tax adjustment (103) (222) managing capital is to safeguard its structure, the Parent entity may adjust the ability to continue as a going concern, amount of dividends paid to shareholders, Prior period deferred tax adjustment 130 203 so that it can continue to provide returns return capital to shareholders, issue new Impact of recognition of IFRS16 leases - 20 for shareholders and benefits for other shares or sell assets to reduce debt. stakeholders and to maintain an optimal Effect of change to tax deprecation on buildings - (2,125) capital structure to reduce the cost of Effect of difference in foreign tax rate 3 81 capital. Income tax expense 13,974 9,860

(c) Deferred tax liabilities

The balance comprises temporary differences attributable to: 16 DIVIDENDS 2021 2020 Property, plant and equipment 95,132 90,489 $’000 $’000 IFRS 16 Leases (374) (126)

Derivative financial instruments (2,339) (2,665) Final dividend for the period ended 31 March 2020 of 24.70 cents (2020: 24.70 cents) Employee provisions (1,895) (2,068) per fully paid share paid on 1 August 2020 (2019: 1 November 2019) 15,805 15,805 Other provisions (1,129) (988)

Total deferred tax liabilities 89,395 84,642 A fully imputed dividend of $15.8 million ($22.0 million inclusive of imputation credits), which equates to 24.7 cents per share, in respect of the 2020/21 financial year was declared on 17 June 2021. This dividend will be paid to the Hawke's Bay Power Consumers' Trust on or about 3 August 2021. Movements:

Opening balance 84,642 84,806 Accounting policy Property, plant and equipment 4,643 1,582 The Group recognises a liability to make IFRS 16 Leases (248) (126) a distribution to equity holders of the Derivative financial instruments 326 (710) Parent when the distribution is authorised, Employee entitlements 173 (190) and the distribution is no longer at the discretion of the Group. As per company Provision for impairment of receivables - - law in New Zealand, a distribution is Other provisions (141) (720) authorised when it is approved by the Directors. A corresponding amount is Closing balance 89,395 84,642 recognised in equity. P-80 ///////// UNISON ANNUAL REPORT 2021 FINANCIAL STATEMENTS FINANCIAL STATEMENTS UNISON ANNUAL REPORT 2021 ///////// P-81

(e) Transactions with Directors, Key Management and their immediate family 17 IMPUTATION CREDITS 2021 2020 During the year the following entities, in which Directors had an interest, provided or $’000 $’000 received services to or from the Group under normal commercial terms. All related party transactions were conducted at arm's length.

Imputation credits available for use in subsequent periods 49,399 46,088 Transactions with related parties TRANSACTION YEAR END

2021 2020 2021 2020 RELATED PARTY RELATIONSHIP WITH COMPANY $’000 $’000 $’000 $’000

Hawke’s Bay Helicopter Rescue Trust P Hocquard (Trustee) (50) (50) - -

Mission Estate Winery P Hocquard (Director) (22) (25) - - 18 RELATED PARTY TRANSACTIONS Wel Networks Limited P Connell (Director) - 1 - -

Telarc Limited P Connell (Director) (18) (6) - - (a) Related parties (b) Key management and personnel compensation Ask Your Team A Bayley (Director) (57) (40) - - Related parties of the Group include: Key management personnel compensation Starfish Software Limited Q Varcoe (GM People & Culture) (12) (16) - - - Hawke's Bay Power Consumers' Trust for the years ended 31 March 2021 and Aurora Energy Limited B Hall (Director) 6,394 1,185 - Centralines Limited 8,822 3,130 31 March 2020 is set out below. The - The Group's Directors and key key management personnel are all the There were no other related party transactions management personnel directors of the Group and the executives - Entities in which Directors had an interest with the greatest authority for the strategic direction and management of the Group.

2021 2020 19 DERIVATIVE FINANCIAL INSTRUMENTS 2021 2020 $’000 $’000 $’000 $’000

Short term employee benefits 3,533 3,743 Current assets

Post employment benefits 44 66 Forward foreign exchange contracts - hedged ((a)(i)) 93 1,374

Long term benefits 602 124 Total current derivative financial instrument assets 93 1,374 4,179 3,933 Non current assets

Cross currency interest rate swaps - fair value hedged ((a)(iii)) 29,280 54,523 (c) Transactions with other related parties Foreign currency forward contracts - hedged ((a)(i)) 82 -

The following transactions occurred with related parties other than key management Total non-current derivative financial instrument assets 29,362 54,523 personnel or entities related to them: Total derivative financial instrument assets 29,455 55,897 - The Hawke's Bay Power Consumers' Trust holds the shares of the Group on behalf of the consumers in their capacity as owners. Current liabilities - The Group operates a management contract for Centralines Limited, an electricity lines Foreign currency forward contracts - hedged ((a)(i)) 1,238 - company based in Waipukurau. This contract provides for executive, financial, technical and managerial services for Centralines Limited. For commercial reasons the value of this Interest rate swaps - hedged ((a)(ii)) 14 - contract is not disclosed. Interest rate swaps - unhedged ((a)(ii)) 877 509

Total current derivative financial instrument liabilities 2,129 509

(d) Outstanding balances Non-current liabilities

The following balances are outstanding at the balance date Interest rate swaps - unhedged ((a)(ii)) 9,471 14,738 in relation to transactions with related parties other than Interest rate swaps - hedged ((a)(ii)) 5,724 7,887 Directors and key management personnel: 2021 2020 $’000 $’000 Total non-current derivative financial instrument liabilities 15,195 22,625

Total derivative financial instrument liabilities 17,324 23,134

Current receivables (sales of goods and services) Net derivative financial instrument asset/(liability) 12,131 32,763 Centralines Limited 558 232

558 232

No provisions for doubtful debts have been raised in relation to any outstanding balances, and no expense has been recognised in respect of bad or doubtful debts due from related parties. P-82 ///////// UNISON ANNUAL REPORT 2021 FINANCIAL STATEMENTS FINANCIAL STATEMENTS UNISON ANNUAL REPORT 2021 ///////// P-83

(a) Instruments used by the Group LIBOR to an alternative Risk free rate (i) Fair value hedge 20 FINANCIAL RISK MANAGEMENT (RFR) and while that uncertainty exists The full fair value of a hedging derivative is The Group only applies fair value hedge Unison will apply the Phase 1 Amendment classified as a non current asset or liability accounting for hedging fixed interest risk and assume the hedged interest coupons The Group's activities expose it to a variety Financial risk management is carried out covering specific areas, such as foreign if the remaining maturity of the hedged on borrowings. Gains or losses from re on the associated hedging instrument will of financial risks: market risk (including by a central treasury department (Group exchange risk, interest rate risk, credit risk, item is more than 12 months and, as a measuring the fair value of the hedging remain US LIBOR based cash flows for currency risk, fair value interest rate risk, treasury) under policies approved by use of derivative financial instruments and current asset or liability, if the maturity of instrument are recognised in the statement the purpose of assessing and measuring cash flow interest rate risk and price risk), the Directors. Group treasury identifies, non derivative financial instruments, and the hedged item is less than 12 months. of profit or loss and other comprehensive effectiveness. credit risk and liquidity risk. The Group's evaluates and hedges financial risks investment of excess liquidity. income together with any changes in the (i) Forward foreign exchange contracts overall risk management programme in close co operation with the Group's fair value of the hedged asset or liability. focuses on the unpredictability of financial operating units. The Board provides The notional principal amounts of Accounting policy (ii) Cash flow hedge markets and seeks to minimise potential written principles for overall financial risk the outstanding forward foreign The Group uses derivative financial adverse effects on the Group's financial management, as well as written policies exchange contracts at 31 March 2021 instruments to reduce its exposure to For cash flow hedges, the effective portion performance. were $18,664,431 (31 March 2020: fluctuations in foreign currency exchange of gains or losses from re measuring $13,492,218). rates and interest rates. The use of the fair value of the hedging instrument hedging instruments is governed by the is recognised in statement of profit or (ii) Interest rate swaps treasury policy approved by the Board. loss and accumulated in the cash flow (a) Financial instruments by category The notional principal amounts of the hedge reserve. Accumulated gains or Unison has elected to use the transitional ASSETS AT FAIR FAIR VALUE outstanding interest rate swap contracts at losses are subsequently transferred to provision to continue to apply NZ IAS 39 AMORTISED VALUE THROUGH THROUGH 31 March 2021 is $199 million the statement of profit or loss when the hedge accounting on transition to NZ IFRS FINANCIAL ASSETS AS PER STATEMENT OF COST PROFIT OR LOSS OCI TOTAL (31 March 2020: $216 million). The Group hedged item affects the statement of profit 9. FINANCIAL POSITION $’000 $’000 $’000 $’000 has a further $50 million of future dated or loss and other comprehensive income, interest swaps to replace some of the Derivatives are initially recognised at fair or when the hedged item is a forecast At 31 March 2021 Group's current interest rate swaps when value on the date a derivative contract transaction that is no longer expected to they mature. This provides more certainty is entered into and are subsequently re occur. Alternatively, when the hedged item Derivative financial instruments - - 29,455 29,455 around future interest expenditure. results in a non financial asset or liability, measured at their fair value. The method Trade and other receivables 29,333 - - 29,333 the accumulated gains and losses are At 31 March 2021, the fixed interest rates of recognising the resulting gain or loss included in the initial measurement of the Other financial assets through profit or loss - - - - on the interest rate swaps range from depends on whether the derivative is cost of the asset or liability. 1.34% to 5.2% (31 March 2020: 1.34% designated as a hedging instrument, and Cash and cash equivalents 12,529 - - 12,529 if so, the nature of the item being hedged. to 5.795%), and the main floating rate is The re measurement gain or loss on the The Group designates certain derivatives 41,862 - 29,455 71,317 BKBM. Gains and losses recognised in the ineffective portion of a cash flow hedge is hedging reserve in equity on interest rate as either: recognised immediately in the statement At 31 March 2020 swap contracts as of 31 March 2021 will 1. hedges of the fair value of recognised of profit or loss and other comprehensive be continuously released to the statement assets or liabilities or a firm income. Derivative financial instruments - - 55,897 55,897 of profit or loss within finance cost until the commitment (fair value hedge); or Trade and other receivables 30,611 - - 30,611 repayment of the bank borrowings. (iii) Hedges no longer meeting the 2. hedges of a particular risk associated criteria for hedge accounting Other financial assets through profit or loss - 6,455 - 6,455 (iii) Cross currency interest rate swap with a recognised asset or liability or If the hedge no longer meets the criteria Cash and cash equivalents 10,097 - - 10,097 ('CCIRS') a highly probable forecast transaction for hedge accounting, the adjustment to (cash flow hedge). 40,708 6,455 55,897 103,060 Cross currency interest rate swaps, which the carrying amount of a hedged item, are used to manage the combined interest The Group documents at the inception of for which the effective interest method is and foreign currency risk on borrowings the transaction the relationship between used, is amortised to profit or loss over the issued in foreign currency, have been split hedging instruments and hedged items, period to maturity. into two components for the purpose as well as its risk management objectives (iv) Derivatives that do not qualify for LIABILITIES AT of hedge designation: the hedge of the and strategy for undertaking various hedge accounting FAIR VALUE MEASURED AT benchmark interest rate is designated as hedging transactions. The Group also THROUGH FAIR VALUE AMORTISED a fair value hedge; and the hedge of the documents its assessment, both at hedge Certain derivative instruments do not FINANCIAL LIABILITIES AS PER STATEMENT OF PROFIT OR LOSS THROUGH OCI COST TOTAL issuance margin is designated as a cash inception and on an ongoing basis, of qualify for hedge accounting. Changes in FINANCIAL POSITION $’000 $’000 $’000 $’000 flow hedge. whether the derivatives that are used in the fair value of any derivative instrument Unison is exposed to US LIBOR in relation hedging transactions are highly effective that does not qualify for hedge accounting At 31 March 2021 in offsetting changes in fair values or cash are recognised immediately in the to the Cross Currency Interest Rate Swaps Borrowings - 31,275 257,994 289,269 (CCIRS) held against USPP borrowings. flows of hedged items. statement of profit or loss and other comprehensive income. Derivative financial instruments 11,586 5,738 - 17,324 The nominal amount of hedging The fair values of various derivative instruments in hedging relationships that instruments used for hedging purposes Trade and other payables - - 18,605 18,605 are exposed to US LIBOR as at 31/03/21 are disclosed below. Movements on the Lease liabilities - - 26,174 26,174 is USD $100m (NZD $118m). The extent hedging reserve in other comprehensive of the risk exposure that is affected by income are shown in the statement of 11,586 37,013 302,773 351,372 the IBOR reform is NZD $4.5m. Transition changes in equity. The full fair value of to alternative benchmark interest rates is a hedging derivative is classified as a At 31 March 2020 being managed by working closely with non current asset or liability when the external advisors on any movement in the remaining hedged item is more than 12 Borrowings - 59,278 250,994 310,272 reform and acting accordingly. Significant months, and as a current asset or liability Derivative financial instruments 15,247 7,887 - 23,134 assumptions or judgements made in when the remaining maturity of the hedged Trade and other payables - - 21,798 21,798 applying the amendments: There has item is less than 12 months. Trading been no indication from external advisors derivatives are classified as a current asset Lease liabilities - - 27,941 27,941 as to a firm change over date from USD or liability. 15,247 67,165 300,733 383,145 P-84 ///////// UNISON ANNUAL REPORT 2021 FINANCIAL STATEMENTS FINANCIAL STATEMENTS UNISON ANNUAL REPORT 2021 ///////// P-85

(b) Fair value estimation There were no transfers between Levels 1 Specific valuation techniques used to Concentration of Credit Exposure and 2 during the year. value financial instruments include: The fair value of financial assets and financial liabilities must be estimated for recognition The Group has exposure to 23 electricity and measurement or for disclosure purposes. (a) Financial instruments in Level 1 • Quoted market prices or dealer quotes retailers that account for 48% (31 March for similar instruments; 2020: 50%) of accounts receivable. To The following table presents the Group’s financial assets and liabilities that are measured The fair value of financial instruments minimise this risk, the Group performs at fair value: traded in active markets is based on • The fair value of interest rate swaps is credit evaluations on all energy retailers TOTAL quoted market prices at the balance date. calculated as the present value of the in conjunction with the contractual LEVEL 1 LEVEL 2 LEVEL 3 BALANCE A market is regarded as active if quoted estimated future cash flows based on requirements contained within the use 31 MARCH 2021 $’000 $’000 $’000 $’000 prices are readily and regularly available observable yield curves; of system agreements operating with from an exchange, dealer, broker, industry • The fair value of forward foreign these parties. A loan, bond or bank group, pricing service, or regulatory Assets exchange contracts is determined using undertaking may be required where agency, and those prices represent forward exchange rates at the balance deemed necessary. At balance date bank Financial assets at fair value through profit or loss actual and regularly occurring market date, with the resulting value discounted guarantees of $7.24 million (31 March transactions on an arm’s length basis. – Equity securities 9,507 - - 9,507 back to present value; 2020: $6.4 million) are currently held in The quoted market price used for financial respect of six electricity retailers, and cash – Debt investments - - - - assets held by the Group is the current • Other techniques, such as discounted and bonds of $389k (31 March 2020: bid price. These instruments are included Fair value through OCI cash flow analysis, are used to determine $440k) in respect of another two electricity in Level 1. Instruments included in Level fair value for the remaining financial retailers. – Interest rate contracts - - - - 1 comprise primarily NZX and ASX equity instruments. – Foreign exchange contracts - 175 - 175 investments classified as trading securities The impairment provision has been or available for sale. calculated based on expected losses from (c) Credit risk – Cross currency interest rate swaps - 29,362 - 29,362 the Group's pool of debtors. Expected (b) Financial instruments in Level 2 Total assets 9,507 29,537 - 39,044 Credit risk is the risk that a third party will losses have been determined based on The fair value of financial instruments that default on its obligations to the Group, analysis of specific debtors. Liabilities are not traded in an active market (for causing it to incur a loss. Financial example, over the counter derivatives) is instruments which potentially subject the Financial liabilities at fair value through profit or loss determined by using valuation techniques. Group to credit risk principally consist – Interest rate contracts - 10,348 - 10,348 These valuation techniques maximise the of bank balances, accounts receivable, use of observable market data where it is derivative financial instruments with Fair value through OCI available and rely as little as possible on unrealised gains and CCIRS's. No – Interest rate contracts - 5,738 - 5,738 entity specific estimates. If all significant collateral is held on these amounts (2020: inputs required to fair value an instrument nil). – Foreign exchange contracts - 1,238 - 1,238 are observable, the instrument is included The Group manages credit risk associated Total liabilities - 17,324 - 17,324 in level 2. with bank balances and derivative financial If one or more of the significant inputs is instruments through the Group's central not based on observable market data, the treasury department under policies instrument is included in Level 3. approved by the Parent's Board of TOTAL Directors. LEVEL 1 LEVEL 2 LEVEL 3 BALANCE 31 MARCH 2020 $’000 $’000 $’000 $’000

Assets The ageing of the Groups trade receivables is as follows: 2021 2020 Financial assets at fair value through profit or loss $’000 $’000 – Equity securities 6,455 - - 6,455

– Debt investments - - - - Trade receivables

Fair value through OCI 0 - 30 days 23,292 22,170

– Interest rate contracts - - - - Past due 31 - 60 days 896 1,971

– Foreign exchange contracts - 1,374 - 1,374 Past due more than 60 days 1,134 1,288

– Cross currency interest rate swaps - 54,523 - 54,523 25,322 25,429 Total assets 6,455 55,897 - 62,352

Liabilities Financial instruments Financial liabilities at fair value through profit or loss Financial instruments which potentially larger investments and those with – Interest rate contracts - 15,247 - 15,247 subject the Group to credit risk principally longer durations will be made in higher consist of bank balances, term deposits, quality investments; and diversifying the Fair value through OCI interest receivable, corporate bonds, investment portfolio so that potential losses on individual investments will be – Interest rate contracts - 7,887 - 7,887 global bonds and related party receivables. No collateral is held on these amounts minimised. – Foreign exchange contracts - - - - (31 March 2020: nil). Total liabilities - 23,134 - 23,134 The Group minimises its exposure to credit risk by: pre qualifying the financial institutions or Brokers/Dealers with which the Group will do business. In principle P-86 ///////// UNISON ANNUAL REPORT 2021 FINANCIAL STATEMENTS FINANCIAL STATEMENTS UNISON ANNUAL REPORT 2021 ///////// P-87

The following table analyses the Group's contractual cash flows for financial liabilities into relevant maturity groupings based on the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows: An analysis of the credit quality of financial assets that are 2021 2020 neither past due nor impaired is as follows: $’000 $’000 TOTAL CARRYING LESS THAN 1 BETWEEN 1 BETWEEN 2 OVER 3 CONTRACTUAL AMOUNT YEAR AND 2 YEARS AND 3 YEARS YEARS CASH FLOWS LIABILITIES Fair value through profit or loss 31 MARCH 2021 $’000 $’000 $’000 $’000 $’000 $’000 Counterparties with external credit rating (Moody’s)

AA 3,637 3,288 Non derivatives

A 2,689 481 Borrowings 72,604 20,026 200,839 (277) 293,192 289,269

6,326 3,769 Trade and other payables 18,605 - - - 18,605 18,605 Lease liabilities 3,646 3,782 3,610 22,113 33,151 26,174

The maximum exposure to credit risk at the reporting date is the carrying amount of the investments. Total non derivatives 94,855 23,808 204,449 21,836 344,948 334,048

Derivatives Interest rate swaps (hedged) 1,020 1,004 1,004 429 3,457 5,738 (d) Liquidity risk Interest rate swaps (unhedged) 4,555 3,351 2,989 1,700 12,595 10,348 Liquidity risk represents the risk that the generates sufficient cash flows from its Group may not have the financial ability operating activities to meet its obligations Forward exchange contracts - - - - - 1,238 to meet its contractual obligations. The arising from its financial liabilities and Total derivatives 5,575 4,355 3,993 2,129 16,052 17,324 Group evaluates its liquidity requirements has funding in place to cover potential on an ongoing basis. Overall the Group shortfalls. 31 MARCH 2020

Financing arrangements Non derivatives Borrowings 73,437 58,859 337 177,948 310,581 310,272 The Group had access to the following undrawn borrowing facilities at the Trade and other payables 21,798 - - - 21,798 21,798 reporting date: 2021 2020 Lease liabilities 3,356 3,494 3,634 26,052 36,536 27,941 $’000 $’000 Total non derivatives 98,591 62,353 3,971 204,000 368,915 360,011

Derivatives Expiring within one year (bank overdraft and bill facility) 4,500 4,500 Interest rate swaps (hedged) 1,174 1,020 1,004 1,433 4,631 7,887 Expiring within one year (bank loans) - 7,000 Interest rate swaps (unhedged) 5,845 4,555 3,351 4,689 18,440 15,247 Expiring beyond one year (bank loans) 60,000 20,000 Forward exchange contracts ------64,500 31,500 Total derivatives 7,019 5,575 4,355 6,122 23,071 23,134

The bank overdraft facilities may be drawn at any time and may be terminated by the The gross inflows/(outflows) disclosed in the above table represent the contractual undiscounted cash flows relating to derivative financial liabilities held for bank without notice. The unsecured bill acceptance facility may be drawn at any time risk management purposes and which are not usually closed out before contractual maturity. The disclosure shows net cash flow amounts for derivatives and is subject to annual review. Subject to the continuance of compliance with debt that are net cash settled and gross cash inflow and outflow amounts for derivatives that have simultaneous gross cash settlement. covenants, the bank loan facilities may be drawn at any time and have an average maturity of 1.9 years (2020: 1.56 years).

(e) Cash flow interest rate risk Maturities of financial liabilities Cash flow interest rate risk is the risk that calculated by reference to the agreed the cash flows from a financial instrument notional principal amounts. Cash flow forecasting is performed in limits or covenants (where applicable) will fluctuate because of changes in the operating entities of the Group and on any of its borrowing facilities. Such In managing interest rate risks the Group market interest rates. Derivatives and aggregated by group finance. Group forecasting takes into consideration the aims to reduce the impact of short term borrowings issued at variable interest rates finance monitors rolling forecasts of the Group's debt financing plans, covenant fluctuations on the Group's earnings. expose the Group to cash flow interest Group's liquidity requirements to ensure compliance, compliance with internal Over the longer term, however, permanent rate risk. The Group manages its cash flow it has sufficient cash to meet operational statement of financial position ratio targets changes in interest rates will have an interest rate risk on borrowings by using needs while maintaining sufficient and, if applicable external regulatory or impact on profit. floating to fixed interest rate swaps and headroom on its undrawn committed legal requirements – for example, currency options. Such interest rate swaps have the Sensitivity borrowing facilities at all times so that restrictions. economic effect of converting borrowings the Group does not breach borrowing at floating rates and swaps them into If interest rates on borrowings at 31 March fixed rates that are generally lower than 2021 had fluctuated by plus or minus those available if the Group borrowed 0.5%, the effect would have been to at fixed rates directly. Under the interest decrease or increase the profit after tax rate swaps, the Group agrees with other and equity by $248k (2020: $126k) as a parties to exchange, at specified intervals, result of a higher or lower interest expense the difference between fixed contract on floating rate borrowings. rates and floating rate interest amounts P-88 ///////// UNISON ANNUAL REPORT 2021 FINANCIAL STATEMENTS FINANCIAL STATEMENTS UNISON ANNUAL REPORT 2021 ///////// P-89

(g) Foreign currency sensitivity analysis The Group is mainly exposed to the rates is considered a reasonably possible (f) Foreign currency risk currency of the United States (USD) change. The sensitivity analysis only Foreign currency risk is the risk that the Management has set up a policy to and the currency of Australia (AUD). includes outstanding foreign currency value of the Group's assets and liabilities require Group companies to manage The following table details the Group's denominated monetary items and adjusts or revenues and expenditure will fluctuate their foreign currency risk against their sensitivity to a 1 cent increase and their translation at the period end for a 1 due to changes in foreign exchange rates. functional currency. The Group companies decrease in the relevant foreign currencies cent change in foreign currency exchange are required to hedge their foreign against the New Zealand dollar. Given the rates. A positive number indicates an The Group operates internationally and is currency risk exposure. To manage their volatility of the foreign markets a 1 cent increase in profit and equity. exposed to foreign currency risk arising foreign currency risk arising from future change in foreign currency exchange from various currency exposures, primarily 2021 2020 commercial transactions and recognised with respect to the US dollar, Australian $’000 $’000 assets and liabilities, entities in the Group dollar, Japanese Yen and the Indonesian use forward contracts. Foreign currency Rupiah. Foreign currency risk arises risk arises when future commercial from future commercial transactions, Assets transactions or recognised assets or recognised assets and liabilities and net liabilities are denominated in a currency Profit / (loss) - strengthening in NZD (59) 24 investments in foreign operations. that is not the entity's functional currency. Profit / (loss) - weakening in NZD 61 (25)

The Group’s exposure to foreign currency Liabilities risk at the reporting date was as follows: NZD AUD USD EURO YEN IDR $’000 $’000 $’000 E’000 Y’000 RP’M Profit / (loss) - strengthening in NZD (44) (40)

Profit / (loss) - weakening in NZD 44 40 31 March 2021 Cash and cash equivalents 7,704 1,795 874 1 10 15,192 (h) Offsetting financial assets and financial liabilities Trade and other receivables 22,859 2,953 209 3 - 11,254

Trade and other payables 10,831 170 1,087 (6) - 2,824 The table below details changes in the Group’s liabilities arising from financing activities, including both cash and non cash changes. Liabilities arising from financing activities are those for which cash flows were, or future cash flows will be, classified in the Group’s 31 March 2020 consolidated statement of cash flows as cash flows from financing activities. Cash and cash equivalents 6,538 1,698 249 8 2,150 12,307

Trade and other receivables 23,943 3,868 11 3 - 25,831 FINANCING FAIR VALUE OTHER Trade and other payables 14,030 292 1,438 24 - 2,878 1/04/2020 CASH FLOWS ADJUSTMENTS CHANGES 31/03/2021 $’000 $’000 $’000 $’000 $’000

As at 31 March 2021 As at balance date the Group held the following forward 2021 2020 exchange contracts with maturities less than 1 year: $’000 $’000 Bank loans 250,994 7,000 - - 257,994 US senior notes fixed rate 59,278 - (5,150) (22,853) 31,275

Buy USD/Sell NZD Interest rate swaps fair value hedging or economically 23,134 - (7,049) - 16,085 Foreign current amount (FC' 000) 3,025 425 hedging financing liabilities Contract Value (NZD' 000) 4,428 666 333,406 7,000 (12,199) (22,853) 305,354 Average exchange rate 0.7016 0.6385

Sell AUD/Buy NZD

Foreign current amount (FC' 000) - 400

Contract Value (NZD' 000) - 426 21 AUDIT FEES 2021 2020 $’000 $’000 Average exchange rate - 0.9397

Sell AUD/Buy USD Audit services

Foreign current amount (FC' 000) 9,200 7,420 Audit of financial statements by Parent company auditors - Audit NZ 182 189

Contract Value (NZD' 000) 14,236 10,689 Audit of financial statements by Subsidiary company auditors - KPMG 83 60

Average exchange rate 0.7369 0.6942 Other auditor's fees for the audit of subsidiary financial statements in foreign jurisdictions - PwC Indonesia 21 25

Other services

Regulatory audit and assurance work by Parent company auditors - Audit NZ 72 61

Total remuneration for assurance services 358 335 P-90 ///////// UNISON ANNUAL REPORT 2021 FINANCIAL STATEMENTS INDEPENDANT AUDITOR'S REPORT UNISON ANNUAL REPORT 2021 ///////// P-91

INDEPENDANT AUDITOR'S REPORT

22 CONTINGENCIES

Contingent liabilities are subject to two separate insurance claims being made (b) Contingent assets uncertainty or cannot be reliably measured to the Group's insurer. With respect to The Group commenced proceedings To the readers of Unison Networks The basis for our opinion is explained Responsibilities of the auditor for the and are not provided for. Disclosures as both claims FENZ has been advised by the for an action in nuisance to recover Limited’s Group financial statements below. In addition, we outline the audit of the financial statements and to the nature of any contingent liabilities Group's insurer that Unison has no liability costs of $275k for damage to Unison's and performance information for the responsibilities of the Board of Directors the performance information are set out below. Judgements and in regard to these claims. The matter is electricity network from hazardous trees. year ended 31 March 2021 and our responsibilities relating to estimates are applied to determine the ongoing. Our objectives are to obtain reasonable Unison Networks Limited (as plaintiff) the financial statements and the probability that an outflow of resources will The Auditor-General is the auditor assurance about whether the financial On 27 July 2018 an employee of Unison was successful in these proceedings performance information, we comment be required to settle an obligation. These of Unison Networks Limited Group statements and the performance Contracting Services Limited (UCSL) brought against four related forestry on other information, and we explain our are made based on a review of the facts (the Group). The Auditor-General has information, as a whole, are free from suffered a serious injury while completing parties (the defendants) in the High Court independence. and circumstances surrounding the event appointed me, Chris Webby, using material misstatement, whether due to low voltage tests on a new overhead in Wellington, with the judgment delivered and advice from both internal and external the staff and resources of Audit New Basis for our opinion fraud or error, and to issue an auditor’s transformer. UCSL has entered into an in September 2019. An appeal was parties. Zealand, to carry out the audit of the report that includes our opinion. We carried out our audit in accordance Enforceable Undertaking with Worksafe, subsequently filed by the defendants (now financial statements and the performance with the Auditor-General’s Auditing Reasonable assurance is a high level of (a) Contingent liabilities which commits it to a number of actions ‘the appellants’) and was heard in the information of the Group on his behalf. with a total committed expenditure of not Court of Appeal on 8 September 2020. Standards, which incorporate the assurance, but it is not a guarantee that The Group has contingent liabilities at less than $325,000. There is only $25,000 We are still awaiting the Court of Appeal’s Opinion on the financial statements and Professional and Ethical Standards and an audit carried out in accordance with 31 March 2021 in respect of: of this committed expenditure remaining decision. the performance information the International Standards on Auditing the Auditor-General’s Auditing Standards to be paid to the EEA as part of the (New Zealand) issued by the New Zealand will always detect a material misstatement There were a number of rural fires in the We have audited: Hawkes Bay region during January 2017 Enforceable Undertaking. Auditing and Assurance Standards Board. when it exists. Misstatements are and February 2017 due to the ongoing • the financial statements of the Group Our responsibilities under those standards differences or omissions of amounts or The Group is not aware of any other dry conditions fanned by strong winds. on pages 59 to 90, that comprise the are further described in the Responsibilities disclosures, and can arise from fraud material contingent liabilities at balance The Group has received two separate consolidated statement of financial of the auditor section of our report. or error. Misstatements are considered date (31 March 2020: Nil). position as at 31 March 2021 the material if, individually or in the aggregate, claims from Fire and Emergency New We have fulfilled our responsibilities in consolidated statement of profit or they could reasonably be expected to Zealand (FENZ), and are the subject of accordance with the Auditor-General’s loss and other comprehensive income, influence the decisions of readers taken on Auditing Standards. consolidated statement of changes the basis of these financial statements and in equity and consolidated statement We believe that the audit evidence we performance information. of cash flows for the year ended on have obtained is sufficient and appropriate We did not evaluate the security and 23 THE EFFECTS OF COVID-19 that date and the notes to the financial to provide a basis for our opinion. controls over the electronic publication statements that include accounting Responsibilities of the Board of of the financial statements and the COVID-19 policies and other explanatory Directors for the financial statements performance information. information; and and the performance information On 11 March 2020, the World Health based staff were working from home. results. The manufacturing subsidiaries As part of an audit in accordance with Organisation declared the outbreak of During Alert Level 2, most business were hardest hit by COVID-19 with • the performance information of the The Board of Directors is responsible, on the Auditor-General’s Auditing Standards, COVID-19 a pandemic, and two weeks activity resumed with the required health reduced orders and revenue for the year Group on pages 58 to 59. behalf of the Group, for preparing financial we exercise professional judgement later the New Zealand Government and safety protocols in place, and staff offset partially by expense reductions. In our opinion: statements that are fairly presented and and maintain professional scepticism declared a State of National Emergency. returned to their usual place of work. Unison’s external valuer has confirmed that that comply with generally accepted throughout the audit. Also: From this, the country was in lockdown Alert Level 1 predominantly saw a return the fair value of land and non substation • the financial statements of the Group: accounting practice in New Zealand. at Alert Level 4 for the period 26 March to pre COVID-19 activity. The regulated buildings was not materially different to • We identify and assess the risks of • present fairly, in all material respects: to 27 April and remained in lockdown at electricity lines revenue saw no adverse current carrying value as at 31 March The Board of Directors is also responsible, material misstatement of the financial Alert Level 3 until 13 May. The country impact for the year. Contracting revenue 2021. No impairment test has been • its financial position as at on behalf of the Group, for preparing statements and the performance moved to Alert Level 1 on 9 June 2020. dropped during the first quarter as performed over the carrying value of the 31 March 2021; and performance information that is fairly information, whether due to fraud Additionally, parts of the country moved projects were delayed or deferred but electricity distribution, contracting, captive presented. or error, design and perform audit into Alert Level 2 for some time during has since recovered strongly. There were insurance and fibre cash generating units • its financial performance and procedures responsive to those risks, The Board of Directors is responsible for August and September 2020 and no negative impacts on the overall level this year because the Group considers cash flows for the year then and obtain audit evidence that is such internal control as it determines is February and March 2021. During Alert of network maintenance for the year. that there are no impairment indictors as ended; and sufficient and appropriate to provide necessary to enable it to prepare financial a basis for our opinion. The risk of Level 4 Unison's business activity was Capital expenditure for the year was 3% at 31 March 2021. • comply with generally accepted statements and performance information not detecting a material misstatement restricted to emergency works response, below budget due to delays in projects accounting practice in New that are free from material misstatement, resulting from fraud is higher than some essential preventative maintenance, during Alert Levels 3 and 4. There was no Zealand in accordance with New whether due to fraud or error. one resulting from error, as fraud may and high priority capital work. Most office noticeable impact on our SAIDI and SAIFI Zealand Equivalents to International involve collusion, forgery, intentional Financial Reporting Standards and In preparing the financial statements and omissions, misrepresentations, or the International Financial Reporting the performance information, the Board override of internal control. Standards; and of Directors is responsible, on behalf of the Group, for assessing the company’s • We obtain an understanding of internal 24 SIGNIFICANT EVENTS OCCURING AFTER BALANCE DATE • the performance information of the ability to continue as a going concern. The control relevant to the audit in order Group presents fairly, in all material Board of Directors is also responsible for to design audit procedures that are On 1 April 2021, the Group acquired the related to this. The financial effects of this respects, the Group’s achievements disclosing, as applicable, matters related appropriate in the circumstances, but Hamilton and Christchurch motor and transaction have not been recognised measured against the performance to going concern and using the going not for the purpose of expressing an generator servicing workshop assets of at 31 March 2021. The operating results targets adopted for the year ended concern basis of accounting, unless there opinion on the effectiveness of the ABB Ltd, for consideration of $2,738,963. and assets and liabilities of the acquired 31 March 2021. is an intention to liquidate the Group or to Group’s internal control. The acquisition will expand ETEL's company will be consolidated from 1 April Our audit was completed on 23 June cease operations, or there is no realistic offering into the servicing of motors and 2021. • We evaluate the appropriateness of 2021. This is the date at which our opinion alternative but to do so. generators and the manufacture of coils the reported performance information is expressed. The Board of Directors’ responsibilities within the Group’s framework for arise from the Energy Companies Act reporting its performance. 1992. P-92 ///////// UNISON ANNUAL REPORT 2021 INDEPENDANT AUDITOR'S REPORT DIRECTORY UNISON ANNUAL REPORT 2021 ///////// P-93

• We evaluate the appropriateness In connection with our audit of the REGISTERED OFFICE of accounting policies used and financial statements and the performance the reasonableness of accounting information, our responsibility is to read 1101 Omahu Road estimates and related disclosures the other information. In doing so, we PO Box 555 made by the Board of Directors. consider whether the other information is Hastings 4156, New Zealand materially inconsistent with the financial Telephone: +64 6 873 9300 • We conclude on the appropriateness statements and the performance Facsimile: +64 6 873 9311 of the use of the going concern information or our knowledge obtained Faults: +64 6 873 9333 basis of accounting by the Board of in the audit, or otherwise appears to be Directors and, based on the audit materially misstated. If, based on our Freephone: 0800 286 476 evidence obtained, whether a material work, we conclude that there is a material Website: www.unison.co.nz uncertainty exists related to events or misstatement of this other information, we conditions that may cast significant are required to report that fact. We have doubt on the Group’s ability to continue nothing to report in this regard. BOARD OF DIRECTORS as a going concern. If we conclude that a material uncertainty exists, Independence Philip Hocquard Chair we are required to draw attention We are independent of the Group in in our auditor’s report to the related accordance with the independence Brenden Hall Deputy Chair disclosures in the financial statements requirements of the Auditor-General’s and performance information or, if such Lucy Elwood Auditing Standards, which incorporate disclosures are inadequate, to modify the independence requirements of Robert Wheater our opinion. Our conclusions are Professional and Ethical Standard 1: based on the audit evidence obtained International Code of Ethics for Assurance Christine Spring up to the date of our auditor’s report. Practitioners issued by the New Zealand However, future events or conditions Dan Druzianic Auditing and Assurance Standards Board. may cause the Group to cease to continue as a going concern. In addition to the audit, we have carried out the following engagements which GROUP CHIEF EXECUTIVE • We evaluate the overall presentation, are compatible with those independence structure and content of the financial requirements: statements and the performance Ken Sutherland information, including the disclosures, • an assurance engagement pursuant to and whether the financial statements the Electricity Distribution Information and the performance information Disclosure Determination 2012 — UNISON NETWORKS LIMITED EXECUTIVE MANAGEMENT represent the underlying transactions (consolidated in 2015) for the period and events in a manner that achieves ended 31 March 2020; fair presentation. Greg Morgan Chief Financial Officer • an assurance engagement pursuant • We obtain sufficient appropriate to the Electricity Distribution Jaun Park General Manager Networks & Operations audit evidence regarding the financial Services Default Price-Quality Path Michael McGarvey Chief Information Officer statements of the entities or business Determination 2020 for the assessment activities within the Group to express period ended 31 March 2021; and Nathan Strong General Manager Commercial an opinion on the consolidated financial statements and performance • an assurance engagement for a Quentin Varcoe General Manager People & Culture information. We are responsible for the subsidiary of the group in compliance direction, supervision and performance with the Reserve Bank of New Zealand’s solvency standard for captive of the Group audit. We remain solely UNISON CONTRACTING SERVICES LIMITED EXECUTIVE responsible for our audit opinion. insurers transacting non-life insurance business for the assessment period MANAGEMENT We communicate with the Board of ended 31 March 2021. Directors regarding, among other matters, Toby Davis Chief Executive the planned scope and timing of the audit Other than the audit and the assurance and significant audit findings, including any engagement, we have no relationship with or interests in the Group. significant deficiencies in internal control UNISON FIBRE LIMITED EXECUTIVE MANAGEMENT that we identify during our audit. Our responsibilities arise from the Public Michael McGarvey General Manager Audit Act 2001. Other Information ETEL LIMITED EXECUTIVE MANAGEMENT The Board of Directors is responsible for the other information. The other Peter Leece Chief Executive information comprises the information Chris Webby included on pages 2 to 55 and 93, but Audit New Zealand does not include the financial statements and the performance information, and our On behalf of the Auditor-General RPS SWITCHGEAR LIMITED EXECUTIVE MANAGEMENT auditor’s report thereon. Palmerston North, New Zealand Our opinion on the financial statements Ronald Bekker Chief Executive and the performance information does not cover the other information and we do not express any form of audit opinion or AUDITORS assurance conclusion thereon. Audit New Zealand, on behalf of the Auditor-General