Full Version - Essential Energy

Notes to the Financial Statements
for the year ended 30 June 2005
NOTE 1. SIGNIFICANT ACCOUNTING POLICIES
The significant policies which have been adopted in the preparation of the financial statements are:
(a) Reporting Entity
Country Energy was formed on 1 July 2001 by the merger of three NSW electricity distributors. These distributors traded as
Advance Energy, Great Southern Energy and NorthPower.
Country Energy is incorporated under the State Owned Corporations Act 1989. Country Energy’s capital comprises two (2)
fully paid $1.00 ordinary shares issued to the Minister for Finance and another Minister, currently the Special Minister of
State and Assistant Treasurer. The $2.00 share capital has been included in the amount of contributed equity disclosed in the
Statement of Financial Position (refer note 19).
(b) Financial Reporting Framework
The accompanying statements are a general purpose financial report which has been prepared in accordance with the
requirements of the Public Finance and Audit Act 1983, the Public Finance and Audit Regulation 2000 and the State Owned
Corporations Act 1989. The financial statements have been prepared on an accrual accounting, going concern basis in
accordance with these Acts and Regulation, and are in conformity with Australian Accounting Standards, other authoritative
pronouncements of the Australian Accounting Standards Board and Urgent Issues Group Consensus Views.
69
The financial statements have been prepared in accordance with the historical cost convention and do not take account of
changes in the general purchasing power of the dollar except where stated.
Comparatives have been reclassified where necessary to enhance comparability in respect of changes in the current year.
Where prior year information was not disclosed, or where it is not practical to calculate the information, comparatives have
been omitted. Where this has occurred, references have been made accordingly throughout the financial statements.
Figures have been reclassified this year to incorporate changes required by new or revised accounting standards.
(c) Principles of Consolidation
The consolidated financial statements of the economic entity include the financial statements of the Corporation, being the
parent entity, and its controlled entities. Details of holdings in controlled entities appear in note 27.
The balances and effects of transactions with the controlled entities included in the financial statements have been eliminated.
The controlled entities are EMMLINK Pty Limited, NorthPower Energy Services Pty Limited and Country Energy Gas Pty
Limited. In the prior year controlled entities included EastCoast Gas Pty Ltd. This entity was deregistered during the previous
year.
NorthPower Energy Services Pty Limited did not operate during the year.
(d) Change in Accounting Policies
The accounting policies are consistent with those applied in the previous year.
(e) Impacts of Adopting Australian Equivalents to International Financial Reporting Standards
Country Energy will apply the Australian Equivalents to International Financial Reporting Standards (AEIFRS) from the reporting
period beginning 1 July 2005.
(i) Managing the transition
The strategy to manage the transition to AEIFRS includes the following key components.
• Consultants have analysed the standards and Urgent Issues Group Abstracts to identify key areas regarding policies,
procedures, systems and financial impacts affected by the transition
• The differences between AGAAP and AEIFRS have been identified
• A project plan was prepared and is being followed to resolve these differences and assist with the transition.
• The Audit and Risk Committee is overseeing the transition. The Group General Manager, Finance and Business Development
is responsible for the project and reports regularly to the Committee on progress against the plan.
• The plan identifies the steps required to design and implement the necessary processes, procedures and policies to
achieve transition.
COUNTRY ENERGY ANNUAL REPORT 2004–2005