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Summary of

Securities Act (Central Plains Water Limited) Exemption Notice 2004

2004/384

Gazetted on 4 November 2004
Expires on 31 October 2009

Effects of the exemption
The registered prospectus for a share offer by Central Plains Water Limited is able to include two auditors' reports prepared by different auditors, one report covering historical financial information, the other covering prospective financial information.

Background
Central Plains Water Limited is currently owned by Christchurch City Council and Selwyn District Council. It is audited by the Auditor-General. The company's share offer will be used to fund applications for resource consent for the construction of a Central Plains irrigation scheme.

The exemption
Central Plains Water Limited is exempted from clause 42(2) of the First Schedule of the Securities Regulations 1983 in relation to an offer of ordinary shares.

Conditions
The exemption is subject to the condition that the registered prospectus contains a copy of a report by a qualified auditor, which includes a statement in the following form:

"In our opinion, the prospective financial information set out on pp.... of this prospectus, so far as accounting policies and calculations are concerned, has been properly compiled on the footing of the assumptions made or adopted by the company set out on pp.... of this prospectus and is presented on a basis consistent with the accounting policies normally adopted by the company."

Reasons
As a public entity in terms of the Public Audit Act 2001, Central Plains Water Limited is required to be audited by the Auditor-General. The auditor's report required in a registered prospectus must contain a statement about any prospective financial information in the prospectus. Central Plains Water Limited has been informed that it is not within the normal functions of Audit New Zealand to express an opinion on prospective financial information. Central Plains Water Limited is therefore unable to comply with the requirements of the Securities Regulations 1983 to have a single auditor's report in the registered prospectus. The exemption allows Central Plains Water Limited to comply with its statutory obligations in so far as historical financial statements are concerned, but also to prepare a prospectus containing an auditor's statement from another auditor about the prospective financial information in the form required by those regulations.

The exemption and the condition of exemption are consistent with the policy of previous exemptions the Commission has granted from clause 42(2) of the First Schedule of the Securities Regulations 1983.