✨ Financial Statements Notes
29 JUNE NEW ZEALAND GAZETTE 1791
TELECOM SOUTH LIMITED
NOTES TO THE FINANCIAL STATEMENTS
1 STATEMENT OF ACCOUNTING POLICIES
(a) CONSTITUTION, OWNERSHIP AND ACTIVITIES
Telecom South Limited (the "Company"), was incorporated on 6th December 1988 and is a wholly-owned subsidiary of Telecom Corporation of New Zealand Limited (the "parent company" or "Telecom"). Telecom and its subsidiaries together form the Telecom "Group".
The parent company was wholly-owned by Her Majesty the Queen in Right of New Zealand (the "Crown") until 12 September 1990, when, pursuant to an agreement dated 14 June 1990, the Crown sold its shares to subsidiaries of two American companies, Ameritech Corporation ("Ameritech") and Bell Atlantic Corporation ("Bell Atlantic"), which then agreed to sell a combined 10% interest to companies, controlled by two New Zealand companies, Freightways Holdings Limited and Midavia Holdings Limited, formerly Fay, Richwhite Holdings Limited. To comply with their agreement with the Crown, Ameritech and Bell Atlantic are obligated to reduce their combined ownership of Telecom to not more than 49.9% of the outstanding share capital by September 1994 (following the granting of a one year extension).
At 31 March 1993, following a joint worldwide offering in July 1991 and a further sale by Bell Atlantic in March 1993, Ameritech and Bell Atlantic held 34.18% and 29.56% of the outstanding share capital, respectively.
The Crown holds, and will continue to hold, one special rights convertible preference share (the "Kiwi Share") in Telecom which assures that:
- A local free-calling option will be maintained for all residential customers.
- The standard residential rental for ordinary residential telephone service will not rise faster than the cost of living as measured by the New Zealand Consumer Price Index unless Telecom's Regional Operating Company profits are unreasonably impaired.
- Line rentals for residential customers in rural areas will be no higher than the standard residential rental, and ordinary residential telephone service will remain as widely available as it was as at 11 September 1990.
The principal activity of Telecom South Limited is the provision of telecommunication services in the South Island.
(b) GENERAL ACCOUNTING POLICIES
The measurement basis adopted in the preparation of these financial statements is historical cost. Accrual accounting is used to match income and expenses.
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VUW Te Waharoa —
NZ Gazette 1993, No 94
NZLII —
NZ Gazette 1993, No 94
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Notes to the Financial Statements for Telecom South Limited
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🏭 Trade, Customs & IndustryFinancial Statements, Accounting Policies, Ownership, Telecom South Limited, Telecom Corporation of New Zealand