SP AusNet Capital Management Initiatives Release and · PDF fileARSN 116 783 914 SP Australia Networks (RE) Ltd ABN 46 109 977 371 AFS Licence No. 294117 as responsible entity for

ASX & SGX-ST Release 16 May 2012

For further information contact: Investor Relations John Nicolopoulos Investor Relations +61 3 9695 6301 or +61 409 672 912 Media Relations Jonathon Geddes Media Advisor +61 3 9695 6401 or + 61 410 573 278

SP AusNet

SP Australia Networks (Distribution) Ltd ABN 37 108 788 245

SP Australia Networks (Transmission) Ltd ABN 48 116 124 362

SP Australia Networks (Finance) Trust ARSN 116 783 914

SP Australia Networks (RE) Ltd ABN 46 109 977 371 AFS Licence No. 294117 as responsible entity for SP Australia Networks (Finance) Trust

Level 31 2 Southbank Boulevard Southbank Victoria 3006 Australia Locked Bag 14051 Melbourne City Mail Centre Victoria 8001 Australia Tel: +61 3 9695 6000 Fax: +61 3 9695 6666

www.sp-ausnet.com.au

TO: ASX Limited Singapore Exchange Securities Trading Limited

SP AusNet Capital Management Initiatives Release and Investor Presentation

SP AusNet’s Capital Management Initiatives Release and Investor Presentation are attached. Susan Taylor Company Secretary

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ASX & SGX-ST Release

16 May 2012

Page 1 www.sp-ausnet.com.au

TO: ASX Limited Singapore Exchange Securities Trading Limited

NOT FOR DISTRIBUTION IN THE UNITED STATES

SP AusNet Capital Management Initiatives

Funding for growth

Today, SP AusNet announced an equity raising of approximately A$434 million:

• A 3 for 20 accelerated non-renounceable pro rata entitlement offer of SP AusNet stapled securities (“New Stapled Securities”) to raise approximately A$434 million (“Entitlement Offer”).

• The Entitlement Offer will be conducted at an offer price of A$1.00 (S$1.25) per New Stapled Security representing a 6.98% discount to the distribution-adjusted last close and a 6.12% discount to the distribution-adjusted theoretical ex rights price.

Funds raised from the Entitlement Offer will be used to:

• Fund significant expansion in the regulated asset base and other growth opportunities; and • Support SP AusNet’s strong credit profile, whilst delivering significant organic growth and sustainable

returns to securityholders.

Mr Nino Ficca, Managing Director of SP AusNet said “The Entitlement Offer will provide a number of benefits to SP AusNet by funding organic growth at a nil premium to its regulated asset base while maintaining our current strong credit profile. The Entitlement Offer will allow SP AusNet to continue to obtain competitive financing and highlights SP AusNet’s prudent approach towards capital management.”

Entitlement Offer overview

Under the Entitlement Offer, eligible SP AusNet securityholders may subscribe for 3 New Stapled Securities for every 20 SP AusNet stapled securities held at 7:00pm (Australian Eastern Standard Time) and 5:00pm (Singapore Standard Time) on Monday 21 May 2012 (the “Record Date”) at a price of A$1.00 (S$1.25) per stapled security (“Entitlement”).

SP AusNet has a primary listing on ASX and a secondary listing on SGX-ST.

SP AusNet’s 51% securityholder, Singapore Power International, intends to participate for its full 51% entitlement under the offer, representing approximately A$222 million. The balance of the Entitlement Offer is fully underwritten.

Under the institutional component of the Entitlement Offer (“Institutional Entitlement Offer”), New Stapled Securities not taken up by existing institutional securityholders will be offered to eligible institutional

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securityholders and certain other eligible institutional investors at the same offer price of A$1.00 (S$1.25) per New Stapled Security.

The retail component of the Entitlement Offer (“Retail Entitlement Offer”) will be open from 22 May 2012 to 12 June 2012.

New Stapled Securities issued under the Entitlement Offer will rank equally with existing SP AusNet stapled securities. However, New Stapled Securities will be allotted after the record date for the 2012 final distribution, which means that they will not be eligible to receive the final distribution for the six months ended 31 March 2012.

As the Entitlement Offer is non-renounceable, there will be no rights trading.

Distribution Policy and Guidance1

The Directors are pleased to announce a distribution of 4 cents per stapled security for the 6 months ended 31 March 2012, in line with prior guidance.

The distribution reinvestment plan is to remain active on a non-underwritten basis, at a 0% discount to VWAP2 for the final 2012 distribution, providing securityholders the opportunity to re-invest all or part of their 2012 final distribution. For the 2013 financial year, SP AusNet expects distributions to be 8.20 cents per security, representing a 2.5% increase on 2012. There is an implied 2013 distribution yield of 8.20% on New Stapled Securities. Distributions in the 2014 financial year are expected to be around 2% higher than in the 2013 financial year. Thereafter, SP AusNet intends to determine future distribution amounts after servicing all of its maintenance capital expenditure and a portion of its growth capital expenditure.

1 Guidance is subject to key risks outlined in the Capital Management Presentation lodged with ASX and SGX-ST on 16 May 2012.

2 The average of the volume weighted average price of stapled securities sold in ordinary market transactions on the ASX during the 10 trading days immediately after the record date for the distribution (as more particularly described in the DRP Rules).

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Entitlement Offer Timetable

Event ASX1 SGX-ST2

Trading halt commences Wednesday, 16 May 2012 Wednesday, 16 May 2012

Institutional bookbuild Wednesday, 16 May 2012 to Thursday, 17 May 2012

Wednesday, 16 May 2012 to Thursday, 17 May 2012

Trading in SP AusNet securities resumes

Friday, 18 May 2012 Friday, 18 May 2012

Record Date Monday, 21 May 2012 (7:00 pm) Monday, 21 May 2012 (5:00pm)

Retail Entitlement Offer Tuesday, 22 May 2012 to Tuesday, 12 June 2012 (5:00pm)

Tuesday, 22 May 2012 to Tuesday, 12 June 2012 (5:00pm/9:30pm)3

Early Retail Entitlement Offer acceptance closing date4 Wednesday, 30 May 2012 (5:00pm) Monday, 28 May 2012 (5:00pm)

Settlement of Institutional Entitlement Offer and early acceptances of the Retail Entitlement Offer

Thursday, 31 May 2012 Thursday, 31 May 2012

First allotment and trading of New Stapled Securities issued under the Institutional Entitlement Offer and early acceptances under the Retail Entitlement Offer

Friday, 1 June 2012 Friday, 1 June 2012

Retail Entitlement Offer Closing Date Tuesday, 12 June 2012 (5:00pm) Tuesday, 12 June 2012 (5:00pm/9:30pm)3

Final allotment of New Stapled Securities issued under final acceptances of the Retail Entitlement Offer

Wednesday, 20 June 2012 Wednesday, 20 June 2012

Notes: 1. ASX times and dates refer to Australian Eastern Standard Time 2. SGX times and dates refer to Singapore Standard Time 3.The closing time for applications via the CDP is 5:00pm (Singapore Standard Time). The Closing time for ATM applications is 9:30pm (Singapore Standard Time). 4.The Retail Offer Booklet will be mailed to securityholders in Singapore and Australia in the normal course after the Record Date. If you are in Singapore and you wish to apply for New Stapled Securities by the Early Retail Entitlement Offer acceptance closing date you should obtain an application form (in blank form) from the customer service counter of CDP at 4 Shenton Way #02-01 SGX Centre 2 Singapore 068807

The above timetable is indicative only and subject to change. SP AusNet, in conjunction with the joint lead managers and subject to the Corporations Act, the ASX Listing Rules and other applicable laws, has the right to vary any of the above dates without notice. The commencement of quotation of New Stapled Securities is subject to confirmation from ASX.

Securityholder Enquiries

Retail stapled securityholders who have questions regarding the entitlement offer should phone the SP AusNet Offer Information Line on 1800 240 836 (within Australia) or +61 3 9415 4142 (outside Australia) any time between 8:30am and 5:00pm Australian Eastern Standard Time, Monday to Friday during the

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Entitlement Offer period or visit the SP AusNet website at www.sp-ausnet.com.au. Retail stapled securityholders in the United States are not entitled to participate in the Entitlement Offer.

Attached to this ASX and SGX-ST release is the Capital Management Presentation for the Entitlement Offer. The Capital Management Presentation is available for download within Australia, New Zealand and Singapore at www.sp-ausnet.com.au.

* U.S. restrictions

IMPORTANT INFORMATION: This announcement does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States or to, or for the account or benefit of, any U.S. person (as defined in Regulation S under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”)). This announcement may not be distributed or released in the United States. The securities offered and sold in the Entitlement Offer have not been, and will not be, registered under the U.S. Securities Act or the securities laws of any state or other jurisdiction of the United States, and may not be offered or sold in the United States or to, or for the account for benefit of, U.S. Persons (as that term is defined in Regulation S of the U.S. Securities Act) unless the securities have been registered under the U.S. Securities Act or an exemption from the registration requirements of the U.S. Securities Act is available. The securities to be offered and sold in the Retail Entitlement Offer will only be offered and sold in offshore transactions outside the United States pursuant to Regulation S under the U.S. Securities Act.* This news release includes “forward-looking statements” within the meaning of securities laws of applicable jurisdictions. Forward-looking statements can generally be identified by the use of forward-looking words such as “may”, “will”, “expect”, “intend”, “plan”, “estimate”, “anticipate”, “believe”, “continue”, “objectives”, “outlook”, “guidance” or other similar words, and include statements regarding certain plans, strategies and objectives of management and expected financial performance. These forward-looking statements involve known and unknown risks, uncertainties and other factors, many of which are outside the control of SP AusNet, and its officers, employees, agents or associates changes in regulated revenues; a downgrade in SP AusNet’s credit ratings; fluctuations in interest rate and foreign exchange rates; and volatility in capital markets resulting in an inability to raise capital or refinance SP AusNet’s debt as it matures. Actual results, performance or achievements may vary materially from any projections and forward looking statements and the assumptions on which those statements are based. Readers are cautioned not to place undue reliance on forward-looking statements. SP AusNet assumes no obligation to update such information.

For further information contact: Investor Relations John Nicolopoulos Investor Relations +61 3 9695 6301 or +61 409 672 912 Media Relations Jonathon Geddes Media Advisor +61 3 9695 6401 or + 61 410 573 278

SP AusNet

SP Australia Networks (Distribution) Ltd ABN 37 108 788 245

SP Australia Networks (Transmission) Ltd ABN 48 116 124 362

SP Australia Networks (Finance) Trust ARSN 116 783 914

SP Australia Networks (RE) Ltd ABN 46 109 977 371 AFS Licence No. 294117 as responsible entity for SP Australia Networks (Finance) Trust

Level 31 2 Southbank Boulevard Southbank Victoria 3006 Australia Locked Bag 14051 Melbourne City Mail Centre Victoria 8001 Australia Tel: +61 3 9695 6000 Fax: +61 3 9695 6666

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NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, US PERSONS

Investing for growth 16 May 2012

Capital Management Presentation

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2

Important notice and disclaimer• The SP AusNet Group (SP AusNet) comprises SP Australia Networks (Transmission) Ltd (SP AusNet Transmission), SP Australia Networks (Distribution) Ltd (SP AusNet Distribution) (together, the Companies) and theirsubsidiaries (as defined by the Corporations Act 2001 (Cth) (Corporations Act)), SP Australia Networks (Finance) Trust (SP AusNet Finance Trust) and the responsible entity for the SP AusNet Finance Trust, SP AustraliaNetworks (RE) Ltd (Responsible Entity), which is the holder of the Australian Financial Services Licence No. 294117. Shares in each of the SP AusNet Transmission and SP AusNet Distribution are stapled to units in the SPAusNet Finance Trust.

• This Presentation contains general background information about SP AusNet’s activities current at 16 May 2012. It is information in a summary form and does not purport to be complete. It should be read in conjunction with SPAusNet’s other periodic and continuous disclosure announcements lodged with the Australian Securities Exchange, which are available at www.asx.com.au.

• The information in this presentation is not a prospectus or offering document and does not constitute an offer, invitation or recommendation to subscribe for, retain or purchase any securities in SP AusNet. The information in thispresentation is an overview and does not contain all information necessary to an investment decision. This presentation does not take into consideration the investment objectives, financial situation or particular needs of anyparticular person. Therefore, before acting on any information contained in this presentation, each person should consider the appropriateness of the information having regard to its individual objectives, financial situation andneeds, and should seek its own independent professional advice. This presentation, and the information contained herein, will not form the basis of any contract or commitment. Any decision to purchase New Stapled Securitiesof SP AusNet under the offering must be made solely on the basis of the information to be contained in any separate offer document to be prepared and issued to eligible investors in connection with any offering.

• This presentation does not constitute an offer to sell or the solicitation of an offer to buy, any securities in the United States or to, or for the account or benefit of, any ‘US person’ (as defined in Regulation S under the US SecuritiesAct of 1933, as amended (Securities Act) (US Person). SP AusNet securities have not been registered under the Securities Act or the securities laws of any state or other jurisdiction of the United States, and may not be offered orsold in the United States, or to, or for the account or benefit of, any US Person without being so registered or pursuant to an exemption from registration.

• All dollar values are in Australian dollars ($A) and financial data is presented within the financial year end of 31 March unless otherwise stated. The proforma historical financial information included in this Presentation does notpurport to be in compliance with Article 11 of Regulation S-X of the rules and regulations of the US Securities and Exchange Commission.

• Investors should also be aware that certain financial data included in this presentation are “non-GAAP financial measures” under Regulation G under the U.S. Securities Exchange Act of 1934, as amended including EBIT(earnings before interest and tax) and EBITDA (earnings before interest, taxes, depreciation and amortization). The disclosure of such non-GAAP financial measures in the manner included in this presentation would not bepermissible in a registration statement under the Securities Act. SP AusNet believes these non-GAAP financial measures provide useful information to users in measuring the financial performance and condition of its business.These non-GAAP financial measures do not have a standardized meaning prescribed by Australian Accounting Standards and, therefore, may not be comparable to similarly titled measures presented by other entities, nor shouldthey be construed as an alternative to other financial measures determined in accordance with Australian Accounting Standards. Investors are cautioned, therefore, not to place undue reliance on any non-GAAP financialmeasures and ratios included in this presentation.

• This presentation has been prepared by SP AusNet on the information available. To the maximum extent permitted by law, no representation or warranty, express or implied, is made as to the fairness, accuracy, completeness orcorrectness of the information, opinions and conclusions in this presentation and SP AusNet, its directors, officers, employees, agents and advisers disclaim all liability and responsibility (including for negligence) for any direct orindirect loss or damage which may be suffered by any recipient through use or reliance on anything contained in or omitted from this presentation.

• Past performance information given in this Presentation is given for illustrative purposes only and should not be relied upon as (and is not) an indication of future performance.• This presentation contains certain “forward-looking statements” and prospective financial information. These forward looking statements and information are based on the beliefs of SP AusNet’s management as well asassumptions made by and information currently available to SP AusNet’s management, and speak only as of the date of this presentation. All statements other than statements of historical facts included in this presentation,including without limitation, statements regarding SP AusNet’s forecasts, business strategy, synergies, plans and objectives, are forward-looking statements. In addition, when used in this presentation, the words “forecast”,“estimate”, “expect”, “anticipated” and similar expressions are intended to identify forward looking statements. Such statements are subject to significant assumptions, risks and uncertainties, many of which are outside the controlof SP AusNet and are not reliably predictable, which could cause actual results to differ materially, in terms of quantum and timing, from those described herein. Readers are cautioned not to place undue reliance on forward-looking statements and SP AusNet assumes no obligation to update such information.

• The underwriters have not authorised, permitted or caused the issue, lodgement, submission, dispatch or provisions of this presentation and do not make or purport to make any statement in this presentation and there is nostatement in this presentation which is based on any statement by the underwriters.

• The underwriters and their affiliates, officers and employees, to the maximum extent permitted by law, expressly disclaim all liabilities in respect of, make no representations regarding, and take no responsibility for, any part of thisdocument and make no representation or warranty as to the currency accuracy, reliability or completeness of information.

• In receiving this presentation, you agree to the foregoing restrictions and limitations.• Recipients should have regard to the risks set out in this presentation

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International selling jurisdictions

3

This document does not constitute an offer of new stapled securities ("New Stapled Securities") of SP AusNet in any jurisdiction in which it would be unlawful. New Stapled Securities may not be offered or sold in anycountry outside Australia except to the extent permitted below.

1 European Economic Area - Belgium, Denmark, Germany, Luxembourg and Netherlands

The information in this document has been prepared on the basis that all offers of New Stapled Securities will be made pursuant to an exemption under the Directive 2003/71/EC ("Prospectus Directive"), asimplemented in Member States of the European Economic Area (each, a "Relevant Member State"), from the requirement to produce a prospectus for offers of securities.

An offer to the public of New Stapled Securities has not been made, and may not be made, in a Relevant Member State except pursuant to one of the following exemptions under the Prospectus Directive asimplemented in that Relevant Member State:

(a) to legal entities that are authorised or regulated to operate in the financial markets or, if not so authorised or regulated, whose corporate purpose is solely to invest in securities;

(b) to any legal entity that has two or more of (i) an average of at least 250 employees during its last fiscal year; (ii) a total balance sheet of more than €43,000,000 (as shown on its last annual unconsolidated orconsolidated financial statements) and (iii) an annual net turnover of more than €50,000,000 (as shown on its last annual unconsolidated or consolidated financial statements);

(c) to fewer than 100 natural or legal persons (other than qualified investors within the meaning of Article 2(1)(e) of the Prospectus Directive) subject to obtaining the prior consent of SP AusNet or any underwriter forany such offer; or

(d) in any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of New Stapled Securities shall result in a requirement for the publication by SP AusNet of a prospectuspursuant to Article 3 of the Prospectus Directive.

2 France

This document is not being distributed in the context of a public offering of financial securities (offre au public de titres financiers) in France within the meaning of Article L.411-1 of the French Monetary and FinancialCode (Code monétaire et financier) and Articles 211-1 et seq. of the General Regulation of the French Autorité des marchés financiers ("AMF"). The New Stapled Securities have not been offered or sold and will not beoffered or sold, directly or indirectly, to the public in France.

This document and any other offering material relating to the New Stapled Securities have not been, and will not be, submitted to the AMF for approval in France and, accordingly, may not be distributed (directly orindirectly) to the public in France.

Such offers, sales and distributions have been and shall only be made in France to (i) qualified investors (investisseurs qualifiés) acting for their own account, as defined in and in accordance with Articles L.411-2-II-2°and D.411-1 to D.411-3, D.744-1, D.754-1 and D.764-1 of the French Monetary and Financial Code and any implementing regulation and/or (ii) a restricted number of non-qualified investors (cercle restreintd’investisseurs) acting for their own account, as defined in and in accordance with Articles L.411-2-II-2° and D.411-4, D.744-1, D.754-1 and D.764-1 of the French Monetary and Financial Code and any implementingregulation.

Pursuant to Article 211-3 of the General Regulation of the AMF, investors in France are informed that the New Stapled Securities cannot be distributed (directly or indirectly) to the public by the investors otherwise thanin accordance with Articles L.411-1, L.411-2, L.412-1 and L.621-8 to L.621-8-3 of the French Monetary and Financial Code.

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4

3 Switzerland

The New Stapled Securities may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange ("SIX") or on any other stock exchange or regulated trading facility in Switzerland. This documenthas been prepared without regard to the disclosure standards for issuance prospectuses under art. 652a or art. 1156 of the Swiss Code of Obligations or the disclosure standards for listing prospectuses under art. 27ff. of the SIX Listing Rules or the listing rules of any other stock exchange or regulated trading facility in Switzerland. Neither this document nor any other offering or marketing material relating to the New StapledSecurities may be publicly distributed or otherwise made publicly available in Switzerland.

Neither this document nor any other offering or marketing material relating to the New Stapled Securities have been or will be filed with or approved by any Swiss regulatory authority. In particular, this document will notbe filed with, and the offer of New Stapled Securities will not be supervised by, the Swiss Financial Market Supervisory Authority (FINMA), and the offer of New Stapled Securities has not been and will not be authorizedunder the Swiss Federal Act on Collective Investment Schemes ("CISA"). The investor protection afforded to acquirers of interests in collective investment schemes under the CISA does not extend to acquirers of NewStapled Securities.

This document is personal to the recipient only and not for general circulation in Switzerland.

4 United Kingdom

Neither the information in this document nor any other document relating to the offer has been delivered for approval to the Financial Services Authority in the United Kingdom and no prospectus (within the meaning ofsection 85 of the Financial Services and Markets Act 2000, as amended ("FSMA")) has been published or is intended to be published in respect of the New Stapled Securities. This document is issued on a confidentialbasis to "qualified investors" (within the meaning of section 86(7) of FSMA) in the United Kingdom, and the New Stapled Securities may not be offered or sold in the United Kingdom by means of this document, anyaccompanying letter or any other document, except in circumstances which do not require the publication of a prospectus pursuant to section 86(1) FSMA. This document should not be distributed, published orreproduced, in whole or in part, nor may its contents be disclosed by recipients to any other person in the United Kingdom.

Any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) received in connection with the issue or sale of the New Stapled Securities has only been communicated orcaused to be communicated and will only be communicated or caused to be communicated in the United Kingdom in circumstances in which section 21(1) of FSMA does not apply to SP AusNet.

In the United Kingdom, this document is being distributed only to, and is directed at, persons (i) who have professional experience in matters relating to investments falling within Article 19(5) (investment professionals)of the Financial Services and Markets Act 2000 (Financial Promotions) Order 2005 ("FPO"), (ii) who fall within the categories of persons referred to in Article 49(2)(a) to (d) (high net worth companies, unincorporatedassociations, etc.) of the FPO or (iii) to whom it may otherwise be lawfully communicated (together "relevant persons"). The investments to which this document relates are available only to, and any invitation, offer oragreement to purchase will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents.

5 Hong Kong

WARNING: This document has not been, and will not be, authorized by the Securities and Futures Commission in Hong Kong pursuant to the Securities and Futures Ordinance (Cap. 571) of the Laws of Hong Kong(the "SFO"). No action has been taken in Hong Kong to authorize this document or to permit the distribution of this document or any documents issued in connection with it. Accordingly, the New Stapled Securitieshave not been and will not be offered or sold in Hong Kong other than to “professional investors" (as defined in the SFO). No advertisement, invitation or document relating to the New Stapled Securities has been or willbe issued, or has been or will be in the possession of any person for the purpose of issue, in Hong Kong or elsewhere that is directed at, or the contents of which are likely to be accessed or read by, the public of HongKong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to the New Stapled Securities which are or are intended to be disposed of only to persons outside Hong Kong or onlyto professional investors as defined in the SFO and any rules made under that ordinance.

The contents of this document have not been reviewed by any Hong Kong regulatory authority. You are advised to exercise caution in relation to the offer. If you are in doubt about any contents of this document, youshould obtain independent professional advice.F

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6 Singapore Neither this document nor any accompanying letter nor other document has been or will be lodged with or registered by the Monetary Authority of Singapore as a prospectus under the Securities and Futures Act, Chapter of 289 of Singapore (the “SFA”) and the New Stapled Securities will be available to investors in Singapore only pursuant to section 273(1)(cd) and 282X(3)(e) in the SFA. Accordingly, this documents and any accompanying letter or other document may not be issued, circulated or distributed in Singapore and the New Stapled Securities may not be offered or sold or be made the subject of an invitation or offer for subscription or purchase either directly or indirectly, in Singapore other than in circumstances under which such offer or sale is permitted under the SFA (as amended from time to time) or otherwise pursuant to, and in accordance with the conditions of any other applicable provisions of the SFA as amended from time to time.

7 New Zealand

This document has not been registered, filed with or approved by any New Zealand regulatory authority under the Securities Act 1978 (New Zealand).

The New Stapled Securities in the entitlement offer are not being offered to the public in New Zealand other than to existing securityholders of SP AusNet with registered addresses in New Zealand to whom the offer ofNew Stapled Securities is being made in reliance on the Securities Act (Overseas Companies) Exemption Notice 2002 (New Zealand).

Other than in the entitlement offer, New Stapled Securities may be offered and sold in New Zealand only to:

• persons whose principal business is the investment of money or who, in the course of and for the purposes of their business, habitually invest money; or

• persons who are each required to (i) pay a minimum subscription price of at least NZ$500,000 for the securities before allotment or (ii) have previously paid a minimum subscription price of at least NZ$500,000 forsecurities of SP AusNet ("initial securities") in a single transaction before the allotment of such initial securities and such allotment was not more than 18 months prior to the date of this document.

8 United States

This presentation does not constitute an offer, invitation or recommendation to subscribe for or purchase any security and neither this presentation nor anything contained in it shall form the basis of any contract or commitment. In particular, this presentation does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States or to, or for the account or benefit of, any "U.S. person" (as defined in Regulation S under the Securities Act of 1933, as amended (the "U.S. Securities Act")). This document may not be distributed or released in the United States or to, or for the account or benefit of, any U.S. Person.

The New Stapled Securities in the proposed offering have not been and will not be registered under the U.S. Securities Act, or under the securities laws of any state or other jurisdiction of the United States. Accordingly, the New Stapled Securities imay not be offered, or sold, directly or indirectly, within the United States or to, or for the account or benefit of, U.S. Persons, except in a transaction exempt from, or not subject to, the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws.

By accepting this presentation you agree to be bound by the foregoing limitations.

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6

Executive summary

Funding initiatives

Investment proposition

Recent developments

Entitlement Offer timetable

Key risks

Appendices

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Funding for growth

7

1 SP AusNet has announced an equity raising of approximately $434 million• To be conducted by way of a 3 for 20 accelerated non-renounceable pro rata entitlement offer (Entitlement Offer)

• SP AusNet’s largest securityholder, Singapore Power International, which currently holds 51% of stapled securities on issue, intends to take up its pro rata entitlement in full

• Balance of the Entitlement Offer fully underwritten by Macquarie Capital (Australia) Limited and UBS AG, Australia Branch

2 Use of proceeds of Entitlement Offer• Proceeds of the Entitlement Offer will be used to:

- Fund significant expansion in the regulated asset base (RAB) and other growth opportunities

- Support SP AusNet’s strong credit profile, whilst delivering significant organic growth and sustainable returns to securityholders

Entitlement offer overview, use of funds and distributions

3 Distributions• Delivering on 2012 distribution guidance of 8 cents per stapled security

• 2013 distribution guidance1 of 8.2 cents per stapled security

• 2014 distribution expected to be around 2% higher than 20131

• Distributions funded by operating cash flows

• Distribution Reinvestment Plan (DRP) to remain active on a non-underwritten basis, at 0% discount to VWAP2 for the final 2012 distribution1. Distribution guidance is subject to key risks outlined in this Capital Management Presentation

2. The average of the volume weighted average price of stapled securities sold on the ASX during the 10 trading days immediately after the record date for the distribution (as more particularly described in the DRP rules)

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8

Executive summary

Funding initiatives


Recent developments


Key risks

Appendices

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Entitlement Offer

9

• 3 for 20 accelerated non-renounceable pro rata entitlement offer of SP AusNet stapled securities (New Stapled Securities) at an offer price of A$1.00 (S$1.25) per New Stapled Security to raise A$434 million

• Offer size reflects funding required to deliver the forecast capital expenditure program to 2016 (see slide 20)

• SP AusNet has chosen an underwritten accelerated non-renounceable pro rata offer, having consideration to:

- Fairness to all securityholders – each securityholder has the right to participate pro rata1

- Certainty of proceeds raised from the underwritten offer

• SP AusNet’s largest securityholder, Singapore Power International, which currently holds 51% of stapled securities on issue, intends to take up its pro rata entitlement in full

• Balance of the Entitlement Offer fully underwritten by Macquarie Capital (Australia) Limited and UBS AG, Australia Branch

• 6.12% discount to the distribution adjusted theoretical ex rights price2

• 6.98% discount to the distribution adjusted closing price2

• 2013 yield of 8.2% on New Stapled Securities3

1. Subject to offer jurisdiction restrictions as outlined on slides 3 to 5 and in the Retail Offer Booklet, in relation to the Entitlement Offer, which will be lodged with ASX and SGX-ST on 18 May 2012

2. Adjusted for the 2012 final distribution of $0.04 per stapled security, expected to be paid on 29 June 20123. Subject to the key risks outlined in this Capital Management Presentation4. All values are approximate

All securityholders able to participate under the Entitlement Offer1

Sources and uses4Sources and uses4

Sources

Entitlement Offer A$434m

Total sources A$434m

Uses

Fund capital expenditure (see slide 20) A$427m

Transaction costs A$7m

Total uses A$434m

Offer price of A$1.00Offer price of A$1.00

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Proceeds of the Entitlement Offer will be used to:

Use of funds

10

1 Fund significant expansion in the regulated asset base + other growth opportunities• Peak energy demand, transmission network augmentation requirements, Victorian government-mandated projects and the location of SP AusNet

networks in major growth corridors in Victoria, is driving substantial network investment

• 2013 capital expenditure is expected to be around 24% higher than 2012

• Forecasting RAB growth of around 8% per annum to 2016, driven by a $3.4 billion approx. capital expenditure program, relating primarily to:

- Regulatory determinations capital expenditure

- Victorian Desalination HV Transmission line (contracted)

- Advanced Metering Infrastructure Program (AMI)

- Bushfire Mitigation measures

- Transmission terminal station re-builds

2 Support SP AusNet’s strong credit profile, whilst delivering significant organic growth + sustainablereturns to securityholders

• Enhance SP AusNet’s strong credit metrics, enabling continued access to competitive financing from a variety of sources

• Net debt to RAB expected to be 65% – 71%, throughout the 2013 to 2016 period1

• Delivered on 2012 distribution guidance of 8 cents per stapled security, with distribution growth expected in 2013 and 2014

1. Debt at face value less cash divided by Regulated Asset Base (RAB)

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2012 final distribution

Distributions

11

• Distribution of 4 cents per stapled security for the 6 months ended 31 March 2012, in line with previous guidance

• New Stapled Securities allotted under the Entitlement Offer will be allotted after the record date for the 2012 final distribution and will not be entitled to this final distribution

Distributions and guidance2

• Focus on delivering sustainable growth in securityholder value

• Distributions funded from operating cash flows

• Distribution guidance for 2013 is 8.2 cents per stapled security

• 2014 distribution expected to be around 2% higher than 2013

• 2013 distribution yield of 8.2% on New Stapled Securities

• Fully franked dividend component of distribution expected in 2013 and 2014

Distribution reinvestment plan • DRP to remain active on a non-underwritten basis, at 0% discount to VWAP1 for the final 2012 distribution, providing securityholders the

opportunity to re-invest all or part of their 2012 final distribution

1. The average of the volume weighted average price of stapled securities sold in ordinary market transactions on the ASX during the 10 trading days immediately after the record date for the distribution (as more particularly described in the DRP rules)

2. Guidance is subject to key risks outlined in this Capital Management Presentation

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12

Sound fundamentals

Strong financial position

S$4.0bnA$3.1bnMarket Capitalisation

S$1.40A$1.08Security Price

Net Asset Value Per Security A$1.01 S$1.32

Market Metrics 31 Mar 12 ASX SGX

A$4.5bnNet Debt

71%

61%

73%

Net Gearing (CV) 1

Net Debt (FV) / RAB 2

2.5x2.4xInterest Cover 3

A$4.5bnTotal Borrowings

A$8.7bnTotal Assets

31 Mar 1131 Mar 12

A$4.1bn

59%

A$4.4bn

A$8.5bn

Financial Metrics

1. Calculated as net debt at carrying value divided by net debt at carrying value plus equity2. Debt at face value less cash divided by regulated asset base (RAB). Demonstrates how SP AusNet funds its capex in terms of debt vs. income generating assets. Refer to Appendices for further details regarding RAB.3. Calculated as EBITDA less customer contributions and tax paid (excluding ATO dispute payment of $48m) divided by net interest expense. This is how interest cover is measured for internal management purposes, as it provides an

accurate reflection of how after-tax operating cash flows are used to meet interest payments

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Pro-forma balance sheet – (as at 31 March 2012)

As At 31 March 2012 Adjustments

A$M Actual Entitlement Offer1 Pro-forma2

Cash and cash equivalents 19.1 - 19.1

Other current assets 316.9 - 316.9

Total current assets 336.0 - 336.0

Total non-current assets 8,394.9 - 8,394.9

Total assets 8,730.9 - 8,730.9

Current borrowings 975.6 - 975.6

Other current liabilities 338.4 - 338.4

Total current liabilities 1,314.0 - 1,314.0

Non-current borrowings 3,562.9 (426.8) 3,136.1

Other non-current liabilities 926.1 - 926.1

Total non-current liabilities 4,489.0 (426.8) 4,062.2

Total liabilities 5,803.0 (426.8) 5,376.2

Net assets 2,927.9 426.8 3,354.7

SP AusNet Distribution

- Contributed equity 0.5 - 0.5

- Reserves (131.4) - (131.4)

- Retained profits 679.8 - 679.8

SP AusNet Transmission & SP AusNet Finance Trust 2,379.0 426.8 2,805.8

Total equity 2,927.9 426.8 3,354.7

1. Assumes the Entitlement Offer raises $434.0 million, less transaction costs of $7.2 million. While it has been assumed that the proceeds will initially repay non-current borrowings, it is intended that they will ultimately be used to fund capital expenditure (see slide 20).

2. The pro-forma balance sheet excludes the impact of the final distribution for 2012 of $115.8 million (4.0 cents per stapled security) which has been approved by the Directors to be paid in June 2012.

13

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14

Executive summary

Funding initiatives


Recent developments


Key risks

Appendices

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15

• 100% control & ownership of asset base and cash flows

• Singapore Power International 51% majority securityholder since the listing of SP AusNet in December 2005

• Prudent gearing and strong credit metrics enables access to competitive financing

• Debt effectively hedged against movements in interest rates (2012 net debt hedging @ 97%)

• Stable, regulated cash flows to support growth

• Assets positioned in major growth corridors in Victoria with population and peak demand growth driving substantial network investment

• Forecast RAB growth of around 8% p.a. to 2016

• Tax effective distributions (2013 guidance of 8.2 cps) funded from operating cash flows

• Distributions in 2014 expected to be around 2% higher than 2013

• A$6.6bn RAB representing critical infrastructure assets providing stable and predictable revenues

• 87% of total revenues are regulated

• Over 1.2m consumer connections

A$6.6bn Regulated Asset Base (RAB) *A$6.6bn Regulated Asset Base (RAB) * Financial Stability & FlexibilityFinancial Stability & Flexibility

Organic Growth & YieldOrganic Growth & Yield Simple & Transparent StructureSimple & Transparent Structure

Investment proposition - overview

Own, operate & maintain assets

* RAB includes contracted transmission assets that are currently unregulated but will become regulated at the next price review as well as contracted transmission assets whose revenues and returns are set through a negotiated process rather than through regulation. See Appendices for more details.

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16 Sustainable long term growth

14.0% CAGR

9.8% CAGR9.8% CAGR

9.7% CAGR

Key metrics – long term performance

10551169

13341468

1535

0

250

500

750

1000

1250

1500

1750

FY08 FY09 FY10 FY11 FY12

Revenue growth (A$M)

623666

778863

907

0

150

300

450

600

750

900

1050


EBITDA growth (A$M)

423457

544605 613

0

100

200

300

400

500

600

700


EBIT growth (A$M)

151 147

209

253 255

0

50

100

150

200

250

300


NPAT growth (A$M)

* Based on statutory reported results

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Networks summary

Stable cash flows

Diversified regulatory reset periodsDiversified regulatory reset periods

• 87% of revenues regulated, underpinning stable cash flows

Total 2012 Revenue A$1,535mTotal 2012 Revenue A$1,535m

Staggered reset periods reduces regulatory risk

Beginning of new reset period

20182012 2013 2014 2015 2016

Gas Distribution

Electricity Distribution

Electricity Transmission

2017

87% regulated

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18 7% CAGR historical RAB growth

Strong historical RAB* growth

• RAB continues to be a key source of growth & focus

• RAB is indexed to inflation, thus providing an in-built hedge against inflation

A$bn

Electricity Transmission Electricity Distribution Gas Distribution

* RAB is an estimate that has not been audited. RAB includes contracted transmission assets that are currently unregulated but will become regulated at the next price review as well as contracted transmission assets whose revenues and returns are set through a negotiated process rather than through regulation. Refer to Appendices for further details.

• Includes contracted transmission assets as at FY12 of $380m

• Pursuant to regulatory requirements, upon reset of electricity distribution on 1 Jan 11, the historical RAB was adjusted to reflect distribution capex overspend in prior regulatory period

• Differences may occur due to rounding

4.74 4.89

6.646.25

5.825.44

7% CAGR growth

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19

• RAB growth forecast to average around 8% pa until 2016 with net debt to RAB in the 65% - 71% range

And stronger future RAB* growth forecast

A$bn

* RAB includes contracted transmission assets that are currently unregulated but will become regulated at the next price review as well as contracted transmission assets whose revenues and returns are set through a negotiated process rather than through regulation. Refer to Appendices for further details.

• RAB subject to revision at end of each regulatory reset as determined by the Regulator and excludes Victorian Desalination HV transmission line.

• Includes contracted transmission assets as at 31 Mar 12 of approx. $380m.

8% CAGR RAB growth

Around 8% CAGR forecast growth until 2016

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20

• Major terminal station re-builds at Richmond, West Melbourne and Brunswick to drive step-change in Transmission capex

• Government-mandated programs and Victorian Desalination HV line opportunity also driving significant organic growth

• Since the 2009 capital raising, 5-year capital expenditure estimates have increased by 54%

Estimated capital expenditure (2013-2016)

* Estimated capital expenditures (2013-2016) have been rounded to the nearest $50m • AER Regulatory Determinations: Electricity Distribution Price Review 2011-15, Transmission Regulatory Review 2008-14, Gas Access Arrangement Submission 2013-17• Transmission terminal station re-builds: Total terminal station rebuild budget, excluding terminal station capex already included in the Transmission Regulatory Review 2008-14. Excludes other unregulated

transmission opportunities that may arise in the forecast period• AMI: AER Final Determination AMI 2012-15 Budget Application• Bushfire Mitigation: Subject to AER pass through application. Figures are SP AusNet‘s current capex estimates, based on Powerline Bushfire Safety Taskforce, December 2011• Victorian Desalination HV transmission line: SP AusNet, ASX announcement 29 Feb 2012

2,300

3,400

450

200

200

250

1,000

1,500

2,000

2,500

3,000

3,500

AER RegulatoryDeterminations

Transmission -terminalstation rebuilds

AMI Bushfire Mitigation Victorian Desalination HVtransmission line

Total Capex

A$M

*

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21

Debt maturity profile as at 31 March 2012 – Debt approx. A$4,874m* (A$M)Debt maturity profile as at 31 March 2012 – Debt approx. A$4,874m* (A$M)

Diversified debt portfolio by maturity and source

• Extended tenor of debt and continued funding diversification

• Executed $575m of new 3-5 year bank debt facilities during the year

• As at 31 March 2012, SP AusNet had $450m in non–current undrawn committed bank debt facilities and a further $59m undrawn under its working capital facility

• SP AusNet’s next significant debt maturity is not until March 2013

40048543

* Debt at face value. Offshore debt shown at hedged rates

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22

Strong management and majority investor support

Own, operate & control assets

Experienced executive leadership team

• Extensive experience in the energy sector

• Proven operational experience

Singapore Power International will retain a 51% interest in SP AusNet

• Strong continuing support of Singapore Power International demonstrated by its intention to participate for its full 51% pro rata entitlement

Management Services Agreements

SP Australia Networks

(Finance) Trust

Singapore Power International Pte Ltd

51%

SP Australia Networks (Distribution) Ltd

SP Australia Networks (Transmission) Ltd

SPI Management Services Pty Ltd

100%Public investors49%

100% 100% 100%

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23

Executive summary

Funding initiatives


Recent developments


Key risks

Appendices

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Victorian Bushfires – Litigation / Royal Commission

24 Agreement to settle Beechworth class action

• Beechworth bushfire class action settled on 7 March 2012. Terms involve the defendants collectively paying 40% of the plaintiffs’ assessed losses plus interest of 5% up to a cap of $32.85m. SP AusNet’s share of the settlement sum is 27% of the assessed losses, and its contribution is capped at $19.71m. This amount will be paid by SP AusNet’s insurers.

• The settlement has been reached without admission of liability by SP AusNet or any other party. The settlement agreement is subject to Court approval. The Court approval hearing was held on 27 April 2012. The decision will be delivered on 16 May 2012.

• Hearings in the Kilmore East class action proceeding are presently scheduled to commence in January 2013. The Plaintiffs’ claims are yet to be assessed or quantified. Victorian Government also seeking compensation of $22m for damage sustained to schools, roads and parks from the Kilmore East fire.

• From time to time, suggestions have been made that SP AusNet may have been responsible for, or contributed to, other fires. It is possible that SP AusNet may be involved in future proceedings concerning the possible causes of other fires, although it is SP AusNet's view that none of the fires were caused by SP AusNet's negligence. SP AusNet's position is that its conduct was at all times reasonable in light of economic regulations applicable to SP AusNet. As at the date of this presentation, SP AusNet is not aware of any further claim against it.

• Royal Commission published findings on 31 July 2010 and made 67 recommendations, 8 of which relate to electricity assets. Victorian Government established the Powerline Bushfire Safety Taskforce to investigate certain key recommendations.

• The Taskforce reported its findings in late 2011 and the Victorian Government agreed on a total of $700m over 10 years, including $500m to be invested by SP AusNet and Powercor, to be approved through the normal regulatory processes.F

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Volumes – electricity distribution

25 Regulated price increases provides some insulation from the volatility in volumes

• Throughout FY08-FY11 volumes increased by approx. 1.5% (CAGR) p.a., as compared to a 3.4% period on period decline in FY12

• Excluding an estimated impact of the weather component, volumes declined 2.3% in FY12

• Volume growth in all consumer segments has been less than anticipated, due to :

- Weather - mild winter and summer

- A softer Victorian economy leading to lower commercial/industrial demand

- Customer response to higher than expected retail price

- Solar PV penetration

• Volume growth of approx. 0.3% p.a. in CY12-15 assumed in the Electricity Distribution Price Review, effective 1 Jan 2011

• Regulated tariff increases offset the revenue impact of lower volumes

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AER proposed rules and likely review timelines

26

AER proposed rule changes are currently under consideration by the AEMC

• Wider discretion to set WACC and Debt Risk Premium

• Wider discretion to set efficient costs

• Capex overspends strongly penalised by only rolling 60% of capex overspend into RAB

• Process changes to reduce ability to submit information

AEMC Directions paper issued in February 2012

• Potential for changes to WACC framework and Debt Risk Premium

• Initially rejects the AER capex overspend penalty

Jul 12Jul 12 • Draft Determination issued for consultation

Oct 12Oct 12 • Final DecisionFor

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27

ATO tax disputes

• The ATO has completed large business audits of the SP AusNet Group. The focus of the audits was as follows:

- deductions for fees imposed under Section 163AA of the Electricity Industry Act 1993 in the 1999 to 2001 tax years;

- deductions for intellectual property rights in the 1998 tax year and each subsequent year; and

- the entry allocable cost amount (ACA) step 1 amount (relating to the cost of membership interests) when SPI Australia Group Pty Ltd joined the SP AusNet Distribution tax consolidated group in August 2004.

• Section 163AA impost

- During August 2011, the ATO issued amended assessments disallowing the claim in full. Amount payable is $87.7m (representing $54m of primary tax, plus interest of $33.7m). A further $3.4m approx. of general interest charges has accrued between assessment and 31 March 2012.

- SP AusNet lodged notices of objection in October 2011 and the ATO has agreed to a part payment arrangement in respect of the disputed tax amount (whereby $30.6m was paid to the ATO in October 2011). The ATO has not yet made an objection decision.

• Intellectual Property

- During September 2011 and October 2011, the ATO issued amended assessments disallowing the claim in full. Amount payable is $44.3m (representing $27.4m primary tax, plus interest and penalties of $16.9m). A further $1.7m approx. of general interest charges has accrued between assessment and 31 March 2012.

- SP AusNet lodged notices of objection in November 2011. Under agreed part payment arrangements, SP AusNet paid $17.1m to the ATO in October 2011.

- On 17 February 2012, SP AusNet submitted a written notice to the ATO, pursuant to section 14ZYA(2) of the Taxation Administration Act 1953, requiring the ATO to make an objection decision (within 60 days of receipt of the written notice) in relation to the intellectual property objections lodged by SP AusNet. As a result of the ATO not making an objection decision within 60 days, the ATO was deemed to have disallowed the intellectual property objections on 17 April 2012.

- On 27 April 2012, SP AusNet lodged a notice of appeal and other documents in the Federal Court, appealing the ATO’s objection decision in relation to the intellectual property matter.

• ACA Step 1 (Tax Consolidation)

- On 4 August 2011, the ATO formally advised SP AusNet that it had decided not to pursue the ACA step 1 audit and that no further action was necessary in respect of this matter.F

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Executive summary

Funding initiatives


Recent developments


Key risks

Appendices

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29

Event ASX1,3 SGX2,3

Trading halt commences Wednesday, 16 May 2012 Wednesday, 16 May 2012

Institutional bookbuild Wednesday, 16 May 2012 to Thursday, 17 May 2012

Wednesday, 16 May 2012 to Thursday, 17 May 2012

Trading in SP AusNet securities resumes Friday, 18 May 2012 Friday, 18 May 2012

Record Date Monday, 21 May 2012 (7:00pm) Monday, 21 May 2012 (5:00pm)

Retail Entitlement Offer4 Tuesday, 22 May 2012 to Tuesday, 12 June 2012 (5:00pm)

Tuesday, 22 May 2012 to Tuesday, 12 June 2012 (5:00pm/9:30pm)5

Early Retail Entitlement Offer acceptance closing date Wednesday, 30 May 2012 (5:00pm) Monday, 28 May 2012 (5:00pm)

Settlement of Institutional Entitlement Offer6 and early acceptances of the Retail Entitlement Offer

Thursday, 31 May 2012 Thursday, 31 May 2012

First allotment and trading of New Stapled Securities issued under the Institutional Entitlement Offer and early acceptances under the Retail Entitlement Offer

Friday, 1 June 2012 Friday, 1 June 2012

Retail Entitlement Offer closing date Tuesday, 12 June 2012 (5.00pm) Tuesday, 12 June 2012 (5:00pm/9:30pm)5

Final allotment of New Stapled Securities issued under final acceptances of the Retail Entitlement Offer

Wednesday, 20 June 2012 Wednesday, 20 June 2012

1. Times and dates refer to Australian Eastern Standard Time2. Times and dates refer to Singapore Standard Time3. Dates and times are indicative only and subject to change4. Retail portion of the Entitlement Offer5. Closing time for applications via CDP is 5:00pm (Singapore Standard Time) and closing time for ATM applications is 9:30pm (Singapore Standard Time)6. Institutional component of the Entitlement Offer

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Executive summary

Funding initiatives


Recent developments


Key risks

Appendices

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Summary of key risks

31

Investors should be aware of the following risks1associated with an investment in SP AusNet:

Regulatory risks

Operational and Legal risks

Management risks

Financial risks

Risks related to SP AusNet’s securities

Risks related to SP AusNet’s tax position

3

2

1

4

5

6

1. See further details contained in the Appendices to this Capital Management Presentation

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Outlook & recap

32 Focus on delivering sustainable growth in securityholder value

• Entitlement Offer proceeds to fund significant expansion in the regulated asset base and other opportunities

• Organic growth continues to be strong, 2013 capital expenditure expected to be around 24% higher than 2012

• RAB growth forecast to average around 8% p.a. to 2016

• Entitlement Offer proceeds to support SP AusNet’s strong credit profile and access to competitive financing

• Forecasting net debt to RAB of between 65% - 71% to 2016 (currently 73%)

• For 2013, SP AusNet expects distributions of 8.2 cents per stapled security, an increase of 2.5%

• Distributions in 2014 are expected to be around 2% higher than 2013

• Will continue to explore growth opportunities that are closely aligned to our existing regulated businesses

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Executive summary

Funding initiatives


Recent developments


Key risks

Appendices

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Regulatory Asset Base (RAB)

• RAB is an estimate that is subject to review by the regulator and is only formally confirmed with the regulator at the end of each determination period

• RAB represents the value on which the network owner can expect to earn a return (return on capital), and the value that is returned to the network owner over the economic life of the assets (as regulatory depreciation). RAB is the starting point in the regulated revenue building block approach adopted by the regulator in order to determine SP AusNet’s regulated revenues

• Given its purpose, the RAB is not a substitute for, and is not reconciled to, the accounting carrying value of PPE. Key differences between RAB and accounting values include, but are not limited to:

- Historical fair value adjustments under accounting and initial adoption of IFRS

- Regulatory depreciation and accounting depreciation differences

- Indexation for RAB

- Regulatory treatment of customer contributions differs to accounting

- Accounting treatment for certain costs (capital or expense) differs to regulatory

- RAB valuation undertaken for the first regulatory reset

• For internal reporting purposes and for the purposes of disclosing an estimated RAB value, RAB includes contracted transmission assets that are currently unregulated but will become regulated at a future price review as well as contracted transmission assets whose revenues and returns are set through a negotiated process rather than through regulation.

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Key risks

This section discusses some of the key risks associated with an investment in SP AusNet. Before investing in SP AusNet securities, you should consider whether this investment is suitable for you. Potential investors

should consider publicly available information on SP AusNet (such as that available on the websites of SP AusNet and ASX), carefully consider their personal circumstances and consult their stockbroker or other

professional adviser before making an investment decision.

Introduction

SP AusNet’s financial performance, distributions and the market price of Stapled Securities may be adversely affected by various risk factors, including the following:

1 Regulatory risks

1.1 The energy industry in Australia is highly regulated, which limits SP AusNet’s flexibility and may adversely affect its financial performance

The energy industry in Australia is highly regulated, which limits SP AusNet’s flexibility and may adversely affect its financial performance. The regulated component of SP AusNet’s revenues (approximately 87% for

the year ended 31 March 2012) will be subject to periodic pricing resets by the Australian Energy Regulator (“AER”), where revenue or prices will be determined for each of the networks for the specified regulatory

period. Regulated charges do not necessarily reflect actual or projected operating costs, capital expenditure or the costs of capital. If the regulated charges set by the AER are lower than SP AusNet’s costs, this may

adversely affect the financial performance and position of SP AusNet. SP AusNet maintains a dedicated regulatory team to manage its regulatory environment and price review processes.

1.2 Recommendations of the Victorian Bushfires Royal Commission will result in increased costs for SP AusNet which will impact earnings if the AER does not approve the expenditure associated

with implementing the Government’s work plan

In February 2009, the state of Victoria was impacted by significant bushfires. The Victorian Government subsequently established a Royal Commission of Inquiry into the February 2009 bushfire crisis.

The Royal Commission made a number of recommendations, two of which were then analysed by a Powerline Bushfire Safety Taskforce (the “Taskforce”) established by the Victorian Government. The Victorian

Government announced on 29 December 2011 that it had accepted all of the recommendations of the Taskforce, including a package of measures of the next 10 years estimated to cost between $700 million and

$950 million. The measures include:

• electricity distributors to be required to install a new generation protection device across their networks over the next ten years, with funding subject to AER approval and estimated to cost $500 million;

• target replacement of Single Wire Earth Return (“SWER”) and 22kV powerlines in high fire loss consequence areas with underground or insulated cables, based on the relative cost-benefit assessment of risk

reduction with up to $200 million budgeted to be funded directly by the Victorian Government;

• intention by the Victorian Government to request an additional $250 million of funding from the Commonwealth Government to further reduce risk.

SP AusNet will make an application to the AER to approve the expenditure associated with implementing the Government’s work plan in its own network area but there is a risk that some or all of this may not be

approved.

1.3 There is a risk that SP AusNet may not fully recover its costs under the AMI programme

The Victorian State Government has established a range of requirements for the AMI programme, including technology functionalities, performance and service levels, as well as a framework for the regulated

recovery of costs. Under the Cost Recovery Order in Council (CROIC), the SP AusNet Group was required to lodge a budget for the period with AER to determine annual revenue. Actual costs and revenues are

adjusted through the true-up process when the expenditure is incurred. In its Determination, the AER reduced the SP AusNet Group’s proposed budget expenditure for the period from $410.7 million to $304.1 million.

On appeal of this decision the Australian Competition Tribunal ordered that the AER revise its Final Determination in accordance with the Tribunal’s reasoning. The decision means that there are still some costs that

will not be included in the budget by the AER, but the full extent of this will not be finalized until the AER releases its revised decision, which is expected in July 2012. A number of further actions will be initiated to allow

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Risks associated with SP AusNet continued

1.4 Proposed changes to National Electricity Rules and National Gas Rules

In September 2011 AER submitted rule change proposals to the Australian Energy Market Commission (“AEMC”) to change:

• the NER concerning the economic regulation of transmission and distribution network service providers; and

• the National Gas Rules (“NGR”) concerning price and revenue regulation of gas distribution and transmission services.

The AEMC is the authority with responsibility to assess rule change proposals. The AEMC also received a rule change request from the Energy Users Rule Change Committee (“EURCC”).

The changes relate both to procedural as well as substantive matters as follows.

1. Capital expenditure (“capex”) and operating expenditure (“opex”) framework: the AER proposes changes to the process by which it develops forecasts of efficient capex and opex and the incentives on

electricity networks to spend no more than is necessary and efficient, including removing restrictions in respect of the AER’s determination of forecasts and altering the mechanisms for managing uncertainty in the

determination of forecasts.

2. WACC determinations and process: the AER contends that the current framework for setting the WACC imposes too high an ‘administrative burden’ and the ‘need for persuasive evidence’ that is currently

required to depart from previously determined WACC parameters for electricity transmission and distribution determinations is unnecessary and places undue weight on previous outcomes rather than permitting the

AER to set ‘appropriate methods or values for WACC parameters’. It proposes changes to address its concerns. AER is separately reviewing electricity transmission and distribution WACC parameters and may seek

to apply different parameters from May 2014, when the review is due to be completed.

3. Regulatory process: the AER contends that network service providers should provide ‘fully formed proposals’ at the time they submit their initial regulatory proposal and that stakeholders should have more

opportunity to analyse material submitted. In respect of the NGR, the AER proposes similar changes in respect of:

• the WACC review processes;

• other WACC related changes to bring the determination of the rate of return to be calculated in line with the approach in the NER; and

• cost of equity, which the AER proposes be calculated using the capital asset pricing model (similar to the NER provisions).

The EURCC proposes changes to the methodology specified in the NER for the calculation of the return on debt component of the WACC.

AEMC has asked for further evidence on a number of matters and indicated that it does not agree with some aspects of the AER and EURCC proposals.

If implemented, the rule changes proposed by the AER and the EURCC may impact on SP AusNet in future regulatory determinations for both its regulated gas distribution and electricity transmission and distribution

networks.

1.5 SP AusNet’s licences could be revoked

The Essential Services Commission (“ESC”) can revoke SP AusNet’s licences if SP AusNet does not comply with an enforcement order served by the ESC and in limited other circumstances. ESC’s regulatory

functions are expected to transfer to the AER by 1 July 2012. Any revocation of a licence or accreditation by the ESC or, in the future, by the AER could adversely affect SP AusNet’s financial performance and

position. The loss of SP AusNet’s licence is not likely. One major risk of potential loss surrounds SP AusNet’s obligation under the AMI CROIC to use its best endeavours to install a remotely read interval meter (a

smart meter) for all SP AusNet customers with annual consumption of 160 MWh or less by December 2013. If SP AusNet did not use its best endeavors as required, it could face fines or, in the case of a serious

breach, potentially a loss of licence.

1.6 Changes in law and government policy could adversely affect SP AusNet

Changes in the structure and regulation of the energy industry in Australia could materially adversely affect SP AusNet and its business. SP AusNet is subject to environmental laws and regulations, occupational

health and safety requirements and technical and safety standards as well as general regulation including in relation to land use and land access, native title and cultural heritage and technical regulation. Changes to

government policy, law or regulations, or the introduction of new regulatory regimes (for example, in relation to climate change), may lead to an increase in operational costs and may have a material adverse effect on

SP AusNet and its businesses.

Key risks

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1.7 SP AusNet is required to comply with technical, safety and environmental standards and its compliance costs may increase

Failure to comply with operation and maintenance standards could lead to safety issues, service disruptions and adverse publicity and could otherwise result in a material adverse effect on SP AusNet’s business. SP

AusNet’s current and historic facilities do handle or contain various materials and substances that are hazardous or environmentally sensitive, such as oil, sulphur hexafluoride gas (SF6), polychlorinated biphenyls and

asbestos. There is a risk of cost and reputational damage from the handling of these substances or from historic contamination. Although SP AusNet has implemented risk management systems designed to identify

and manage risks to employees, contractors and the community, accidents, including fatalities and severe injuries, have occurred in the course of SP AusNet’s business in the past and may occur in the future. These

risks will expose SP AusNet to potential fines and increased expenses.

1.8 Changes in the structure and regulation of the energy industry in Australia could impact SP AusNet’s existing contracts

Some of SP AusNet’s contracts, such as its use of system agreements have not kept pace with regulatory developments and, if a dispute arises, SP AusNet may not be able to reach agreement with contract

counterparties as to appropriate amendments. There is a further risk that, as that framework changes further over time, the contracts may not operate as intended and SP AusNet may not be able to reach agreement

with contract counterparties as to appropriate amendments, which could adversely affect SP AusNet’s financial performance and position. This could also potentially lead to disputes. If these disputes cannot be

resolved favourably, it may adversely affect the financial performance and position of SP AusNet.

2 Operational and legal risks

2.1 Network failures, equipment breakdowns, planned or unplanned outages, bushfires and other natural disasters or sabotage may cause losses to or harm SP AusNet’s business and reputation

SP AusNet’s energy transmission and distribution networks and information technology systems are vulnerable to human error in operation, equipment failure, natural disasters (such as bushfires, severe weather,

floods and earthquakes), sabotage, terrorist attacks or other events which can cause network failures, breakdowns or unplanned outages. Effected customers may seek to recover damages from SP AusNet and SP

AusNet is also exposed to the cost of replacing faulty equipment.

2.2 Liability arising out of February 2009 Victorian bushfires may adversely affect SP AusNet’s financial position

SP AusNet is one of the defendants in litigation that has been brought in connection with the February 2009 bushfires located at Kilmore East and Beechworth.

In the Kilmore East class action the plaintiff alleges that a powerline owned and operated by SP AusNet broke and ignited a fire. The 2009 Victorian Bushfires Royal Commission stated that 119 people died and 1,242

homes were destroyed in the fire. In the Kilmore East class action the plaintiff alleges that SP AusNet was, among other things, negligent in its management, inspection and maintenance of the powerline and claims

damages. SP AusNet denies that it was negligent. In the Beechworth class action the plaintiffs allege that a fire ignited after a tree fell onto one of SP AusNet’s powerlines. . The 2009 Victorian Bushfires Royal

Commission stated that 2 people died and 38 homes were destroyed in the fire. In the Beechworth class action the plaintiffs allege that SP AusNet was, among other things, negligent in its management of vegetation

near the powerline and claim damages. SP AusNet denies that it was negligent. As part of these legal proceedings, SP AusNet has counterclaimed against several parties. Those parties have also been sued directly

by the plaintiffs in both proceedings. The parties to the Beechworth bushfire class action, including SP AusNet, agreed to settle the proceedings prior to the court hearing. The terms of the settlement involve the

defendants collectively paying 40 per cent of the plaintiffs’ assessed losses plus interest of 5 per cent up to a cap of $32.8 million. SP AusNet’s share of the settlement sum is 27 per cent of the assessed losses, and

its contribution is capped at $19.71 million. This amount will be paid by SP AusNet’s insurers. The balance of the settlement sum is to be paid by the Department of Sustainability and Environment, Parks Victoria and

Eagle Travel Tower Services Pty Ltd. The settlement agreement is subject to Court approval. The Court approval hearing was held on 27 April 2012. The decision will be delivered on 16 May 2012. The settlement

agreement was reached without the admission of liability by SP AusNet or any other party. The Kilmore East class action hearing is presently scheduled to commence in January 2013. The plaintiffs in the Kilmore East

class action proceeding are yet to identity any quantum of damages sought. The Victorian Government is also seeking compensation of $22 million for damage sustained to schools, roads and parks from the Kilmore

East fire. SP AusNet will vigorously defend these claims.

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2.2 continued

From time to time, suggestions have been made that SP AusNet may have been responsible for, or contributed to, other fires. It is possible that SP AusNet may be involved in future proceedings concerning the

possible causes of other fires, although it is SP AusNet’s view that none of the fires was caused by SP AusNet’s negligence. SP AusNet’s position is that its conduct was at all times reasonable having regard to its

regulatory environment. As at the date of this presentation, SP AusNet is not aware of any further claim against it.

SP AusNet has liability insurance which specifically provides cover for bushfire liability. SP AusNet reviews its insurance cover annually and ensures it is commensurate with the scale and size of its operations, the

risks assessed to be associated with its operations and with industry standards and practice. A judgment against SP AusNet could adversely affect its financial performance and position, and its reputation, and cause

SP AusNet to incur additional future costs to mitigate risk.

2.3 It is not known whether SP AusNet’s insurance will be sufficient to cover all potential liabilities

Although SP AusNet maintains insurance that it believes is appropriate to protect against major operating and other risks, not all risks are insured or insurable. In particular, SP AusNet does not carry insurance for

damage to its towers, poles, wires or pipelines. Due to changeable insurance market conditions, SP AusNet cannot be certain that adequate insurance coverage for potential losses and liabilities will be available in the

future on commercially reasonable terms, and may also elect to self-insure and/or carry large deductibles. If SP AusNet experiences a loss in the future, the proceeds of the applicable insurance policies, if any, may

not be adequate to cover replacement costs, lost revenues, increased expenses or liabilities to third parties. It is not known whether SP AusNet’s insurance will be sufficient to cover all losses associated with the

February 2009 bushfires. It is presently unclear whether SP AusNet could pass through any excess liability, if it arises, to customers. SP AusNet is seeking clarification of this issue.

2.4 SP AusNet’s network revenues are exposed to variations in demand for gas and electricity and other factors affecting customer load

SP AusNet’s distribution network revenues are derived from the transported volume of electricity and gas metered at the connections to the distribution networks. The volume of electricity and gas used is subject to

seasonal fluctuations and to a range of variables, including economic conditions, population growth, government policy, weather and alternative energy sources. Economic conditions would also have a direct adverse

effect on SP AusNet’s revenues. Similarly, unusually mild summers or warmer than normal winters can negatively affect distribution volumes. There could also be a potential negative reaction by consumers to higher

retail prices (including for example from a carbon tax) resulting in reduced demand. For example, in the year ended 31 March 2012 compared with the prior period there was a fall in energy usage across the

distribution networks of 3.4 per cent for electricity and 3.1 per cent for gas.

2.5 Variations in inflation could adversely impact SP AusNet’s financial position

Under SP AusNet’s regulatory arrangements, the regulatory return it receives is dependent on movements in the quarterly Australian Consumer Price Index (“CPI”). An unexpectedly low CPI result is likely to result in

lower than expected cash flows and lower than expected revenues.

2.6 Climate change and related regulations may result in increased capital and operating expenditure for the SP AusNet Group

Climate change may result in more extreme weather events, increasing bushfire risks and operational costs of responding to storm damage. SP AusNet may also be adversely affected if it is required to increase

capital expenditure to address the effects of climate change if the AER does not recognise these increased costs.

SP AusNet will be subject to the Carbon Pricing Legislation because it exceeds the annual emissions threshold of 25,000 tonnes of CO2-e. SP AusNet’s primary emissions are from fugitive emissions in the gas

distribution business (approximately 140,000 tonnes of CO2-e in the 2010/11 reporting year). . SP AusNet has made a pass-through application to the AER for the impacts of the Carbon Pricing Legislation on its gas

distribution business in its Gas Access Arrangement Review proposal.

2.7 Electric and magnetic fields may have adverse effects on human health

Electric and magnetic fields (“EMF”) produced by electricity have been the subject of employee and public health concerns. Numerous scientific studies have been undertaken on the potential adverse effects of EMF

on human health, none of which have established adverse effects, but there still remains substantial public and scientific debate. SP AusNet’s distribution, sub-transmission and transmission lines EMF are within

applicable health guidelines. Any future standards could require SP AusNet to re-design and re-construct some installations, which could adversely affect SP AusNet’s financial performance and position. Adverse

findings relating to EMF may also lead to litigation against SP AusNet which could expose SP AusNet to material damages claims.

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2.8 Under-performance in provision of network services by SP AusNet’s electricity networks would result in reduction of SP AusNet’s revenue through incentive regimes implemented by the AER or

the AEMO

Incentive mechanisms applicable to SP AusNet’s electricity networks, which are regulated by the AER or the Australian Energy Market Operator (“AEMO”), reward or penalise SP AusNet for the reliability of its

performance relative to its historic performance. Deterioration in network performance may arise from various causes, including unfavourable weather patterns, fire and the relative effectiveness of asset management

strategies. If SP AusNet is denied awards, or attracts penalties under any applicable incentive mechanism, its revenue may be adversely affected.

3 Management Risks

3.1 SPIMS management structure

SP AusNet is highly dependent on SPI Management Services Pty Ltd (“SPIMS”) to manage and operate SP AusNet’s business. SPIMS conducts the day to day management of SP AusNet’s business, management

and finances pursuant to a management services agreement with the Companies (“Management Services Agreement”) and a separate management services agreement with the SP AusNet RE (“RE Management

Services Agreement”). SPIMS is a wholly owned subsidiary of SPI and SPI is a wholly owned subsidiary of Singapore Power Limited. SP AusNet relies on the ability of SPIMS to attract and retain highly skilled

managerial personnel to manage SP AusNet’s business. SPIMS may not be successful in providing the management skills and employees required to discharge its obligations under the Management Services

Agreement or to successfully manage the business. It is possible that changes in the ownership of SPIMS or its parent companies could take place in the future, which would mean that control of the provision of

SPIMS’ services could shift to a party whose credentials or capabilities are not as favourable as those of Singapore Power Limited. This could ultimately lead to a decline in the quality of the management services. SP

AusNet can terminate the Management Services Agreement in certain circumstances, including in the event that SPIMS fails to meet 50% or more of the agreed key performance indicators for two consecutive for

events under SPIMS control, and either party can terminate the RE Management Services Agreement following termination of the Management Services Agreement.

4. Financial Risks

4.1 SP AusNet has a large amount of debt and is dependent on access to the capital markets for liquidity

As of 31 March 2012, SP AusNet’s long-term debt totalled $4.9 billion and debt maturing during the 12 month period ending 31 March 2013 was $976.5 million consisting of commercial paper, drawings under the

working capital facility and a syndicated bank debt facility. The degree to which SP AusNet may be leveraged in the future could affect the ability of SP AusNet to service debt and other obligations, to pay distributions

to securityholders, to make capital investments, to take advantage of certain business opportunities or to obtain additional financing.

In addition, SP AusNet relies on access to financial markets as a significant source of liquidity for capital requirements not satisfied by operating cash flows. SP AusNet’s access to financial markets could be adversely

impacted by various factors, such as a material adverse change in SP AusNet’s business or a reduction in its credit ratings. The inability to raise capital on favourable terms, particularly during times of uncertainty in

the financial markets, could impact SP AusNet’s ability to sustain and grow its businesses, which are capital intensive, and would likely increase its capital costs.

4.2 A downgrade in the credit ratings of SP AusNet, or a reduction in Singapore Power Limited’s ownership percentage in SP AusNet, could increase SP AusNet’s borrowing costs, reduce its sources

of liquidity, and may trigger a requirement to repay certain existing borrowings

If Singapore Power Limited reduced its indirect ownership percentage in SP AusNet to below 50.1%, or if a rating agency were to downgrade Singapore Power Limited’s long-term credit rating, it could lead to a

downgrade in SP AusNet’s credit ratings. If a rating agency were to downgrade the long-term ratings of SP AusNet, SP AusNet’s borrowing costs may increase and its potential sources of liquidity would likely

decrease. In addition, a downgrade in SP AusNet’s credit ratings below specified thresholds could trigger a requirement for SP AusNet to comply with additional financial covenants. SP AusNet could be required to

repay certain existing borrowings if Singapore Power Limited reduces its ownership in SP AusNet.

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Risks associated with SP AusNet continued.

4.3 SP AusNet is exposed to interest rate risk

As at 31 March 2012, SP AusNet effectively hedged 97% of the interest rate exposure on its debt relating to each of its businesses (electricity distribution, gas distribution and electricity transmission) for the duration of

the relevant regulatory reset periods. SP AusNet is nonetheless exposed to adverse interest rate movements in the medium to long term, as its Treasury Risk Policy permits the percentage of debt hedged to range

between 90% and 100% and, in the medium to long term, the percentage of hedged debt may vary within this limit. SP AusNet remains exposed to credit spreads on debt that is refinanced or new debt that is raised

during the regulatory period.

4.4 Hedge accounting can result in income losses

SP AusNet hedges its debt in order to reduce its exposure to interest rate and foreign currency risks. However, from time to time the refinancing of debt can give rise to non-cash accounting adjustments as a result of

hedge accounting rules and this can affect SP AusNet’s reported income in ways that can be difficult to predict.

5 Risks related to SP AusNet’s securities

5.1 If SP AusNet fails to comply with certain financial covenants, it may be unable to pay distributions to securityholders

If SP AusNet fails to comply with certain financial covenants, including interest coverage ratios, it may be unable to pay distributions to securityholders and the price of its securities may fall.

5.2 Majority interest of Singapore Power

Singapore Power Limited controls SP AusNet as it holds 51% of the issued SP AusNet Securities through a wholly owned subsidiary, Singapore Power International Pte Ltd. Singapore Power will continue to control

SP AusNet following the Offer. Singapore Power and its interests may conflict with the interests of SP AusNet’s other securityholders. Therefore, Singapore Power Limited could take actions that are in its best interests

but may not be in the best interests of SP AusNet’s other securityholders. Subject to applicable law, Singapore Power is free to sell any and all of the securities it owns in SP AusNet which may result in a change of

control or ownership of the Group. No prediction can be made as to the effect, if any, that future sales of securities, or the availability of securities for future sale, may have on the market price of the securities.

5.3 General market conditions

The value of Stapled Securities will be influenced by a number of factors common to most investments, including: • changes in general Australian and worldwide economic conditions, including commodity prices,

inflation and interest rates; • changes in government fiscal, monetary and regulatory policies; • investor perceptions and demand for listed securities generally; • movements in general level or prices on international

and local stock markets, and in the prices of the sector of the market to which SP AusNet belongs; and • changes in institutional portfolio management strategies.

5.4 Volatility and liquidity risk

While Stapled Securities are currently listed on ASX and SGX-ST, there is no guarantee that there will at all times be sufficient buyers of Stapled Securities to enable securityholders to dispose of Stapled Securities in

a timely manner at a price that the securityholder may have expected to achieve. The price of Stapled Securities may go up and down by a material amount, even over a short period of time.

5.5 Exchange rate fluctuations

Exchange rate fluctuations may adversely impact the value of the securities and any distribution of SP AusNet’s securities which are quoted in Singapore dollars on the SGX-ST. Distributions, if any, in respect of SP

AusNet’s securities will be paid in Australian dollars and converted into Singapore dollars for those investors whose securities are held in Singapore by CDP.

5.6 Foreign jurisdictions

For investors outside Australia, Australian law may operate differently from the laws of the jurisdiction in which those investors reside.

5.7 Distributions

There is a risk that SP AusNet’s future distributions may materially differ from current expectations due to operational, regulatory or other factors. In particular, SP AusNet’s future distributions may differ to current

expectations in terms of quantum, timing, the proportion of franking credits paid out, the proportion of tax deferred distributions paid out and the proportion of interest income paid out.

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Risks associated with SP AusNet continued.

6 Risks related to SP AusNet’s tax position

6.1 Australian Taxation Office disputes

SP AusNet has two unresolved issues involving the Australian Taxation Office (“ATO”), following the completion of ATO large business audits of the group. These two issues are as follows:

•Deductions claimed in respect of fees imposed under Section 163AA of the Electricity Industry Act (1993) in the 1999 to 2001 tax years; and

• Deductions claimed in respect of intellectual property referable to the 1998 tax year and each subsequent year.

(i) Section 163AA impost

During August 2011, the ATO issued amended assessments to SP AusNet in respect of the 2001 to 2006 income years, disallowing deductions claimed in each of those income years in respect of Section 163AA

imposts. Under the amended assessments, the total amount payable is $87.7 million (representing $54.0 million of primary tax, plus an interest component of $33.7 million).

On 7 October 2011, SP AusNet lodged notices of objection with the ATO in relation to the amended assessments issued. The ATO has agreed to a part-payment arrangement, on the basis that the amount due is a

disputed tax amount. Under the arrangement, SP AusNet paid $30.6 million to the ATO in October 2011. This amount has been recorded as a non-current receivable at the time of payment. A general interest charge

continues to accrue in respect of unpaid tax under the payment arrangement, in addition to the total amount disclosed on the amended assessments. As at 31 March 2012, additional accrued interest on the unpaid

portion is estimated to be $3.4 million.

In the event that the ATO does not determine the objections in favour of SP AusNet, legal proceedings, if necessary, will be initiated to bring the disputed matter before the Federal Court.

(ii) Intellectual Property

During September 2011 and October 2011, the ATO issued amended assessments to SP AusNet in respect of the 2001 to 2010 income years, disallowing deductions claimed in respect of intellectual property in each

of those income years. Under the amended assessments, the total amount payable is $44.3 million (representing $27.4 million of primary tax, plus an interest and administrative penalty component of $16.9 million).

On 4 November 2011, SP AusNet lodged notices of objection in relation to the amended assessments issued. The ATO has agreed to a part-payment arrangement, with SP AusNet making a payment of $17.1 million

to the ATO in October 2011. This amount has been recorded as a non-current receivable at the time of payment. A general interest charge continues to accrue in respect of unpaid tax under the payment arrangement,

in addition to the total amount disclosed on the amended assessments. As at 31 March 2012, additional accrued interest on the unpaid portion is estimated to be $1.7 million.

On 17 February 2012, SP AusNet submitted a written notice to the ATO, pursuant to section 14ZYA(2) of the Taxation Administration Act 1953, requiring the ATO to make an objection decision (within 60 days of

receipt of the written notice) in relation to the intellectual property objections lodged by SP AusNet. As a result of the ATO not making an objection decision within 60 days, the ATO was deemed to have disallowed the

intellectual property objections on 17 April 2012. On 27 April 2012, SP AusNet lodged a notice of appeal and other documents in the Federal Court, appealing the ATO’s objection decision in relation to the intellectual

property matter.

Subject to the outcome of any such Court proceedings and/or resolution of the disputed matters with the ATO, SP AusNet will either become partly or wholly entitled to a refund of tax paid to the ATO in respect of the

disputed matters (including interest) or will incur an additional tax liability for the unpaid tax (including interest) in respect of the disputed matters.

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42

Further Information and Contacts

SP AusNet is a major energy network business, which owns and operates key regulated electricity transmission and electricity and gas distribution assets locatedin Victoria, Australia.

Further information is on SP AusNet’s website: www.sp-ausnet.com.au

SP AusNet

SP Australia Networks (Distribution) Ltd

ABN 37 108 788 245

SP Australia Networks (Transmission) Ltd

ABN 48 116 124 362

SP Australia Networks (Finance) Trust

ARSN 116 783 914

SP Australia Networks

ABN 46 109 977 371

AFS Licence No. 294117 as responsible entity

for SP Australia Networks (Finance) Trust

2 Southbank Boulevard Southbank

Level 31

Victoria 3006 Australia

Locked Bag 14051

Melbourne City Mail Centre

Victoria 8001 Australia

Tel: +61 3 9695 6000

Fax: +61 3 9695 6666

For further information contact:

Manager, Investor Relations

Media Relations

Jonathon Geddes

Corporate Relations

+61 3 9695 6401 or +61 410 573 278

John Nicolopoulos

+61 3 9695 6301 or +61 409 672 912

Investor Relations

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Documents

SP AusNet Capital Management Initiatives Release and · PDF fileARSN 116 783 914 SP Australia Networks (RE) Ltd ABN 46 109 977 371 AFS Licence No. 294117 as responsible entity for