New Zealand Gazette – 1994 – No. 128

Page 3839

✨ Financial Statements Notes



30 NOVEMBER
NEW ZEALAND GAZETTE
3839

NOTES TO THE FINANCIAL STATEMENTS

Fair values

June 1994 Carrying value $000 Fair value $000
Short term loans 90,017 104,380
Term liabilities 2,646,887 2,730,000
Currency and interest rate swaps - (23,977)
Foreign exchange contracts - 286
Forward rate agreements - 17
Interest rate options - 806

Cash and liquid deposits, debtors, trade creditors, other/sundry debtors and creditors, and short term investments are excluded from the table above because, due to their short term nature, are the carrying value of these items are equal to the fair value.

The following methods were used to estimate the fair values of these classes of financial instrument:

Term liabilities and short term loans
The fair value of the Corporation's term liabilities and short term loans is estimated based on current market rates available to the Corporation for debt of similar maturity. The Corporation anticipates that these liabilities will be held to maturity and that settlement at fair value is unlikely.

Currency and interest rate swaps, foreign exchange contracts, interest rate swaps, forward rate agreements, interest rate options and interest rate futures.
The fair value of these instruments is estimated based on their quoted market prices.

Concentration of credit risk
In the normal course of its business the Corporation incurs credit risk from trade debtors and from transactions with financial institutions.

The Corporation has a credit policy that is used to manage this exposure to credit risk. As part of this policy, limits on exposures with counterparties have been set and approved by the Board of Directors and are monitored on a regular basis.

The Corporation does not have any significant concentrations of credit risk. The Corporation does not require collateral or security to support financial instruments, due to the high credit rating of the financial institutions dealt with. The Corporation further minimises its credit exposure by limiting the amount of funds placed with any one financial institution at any one time. The Corporation does not anticipate the non-performance of any obligations that existed at balance date.

  1. RESOURCE CONSENTS
    The Corporation has water and air consents, obtained under the Resource Management Act 1991, which enable it to operate its thermal and hydro power stations. The consents are renewable between two and thirty years. The number of significant consents, and their respective renewable dates, are summarised below.
Renewable dates Number of consents
Within 2 years 7
Between 2 and 4 years -
Between 4 and 6 years 2
Between 6 and 8 years 19
Between 8 and 10 years -
Later than 10 years 8
36
  1. DEBT DEFEASANCE
    In the year ended 31 March 1993 a payment of $216.4 million was made to a third party which extinguished financial obligations of $233 million arising under a new finance lease for high voltage electricity equipment. As a result of the payment a net gain of $12.53 million was recorded in the 1992/93 year. The Corporation has a purchase option under the finance lease to acquire all of the leased equipment on 31 March 2008.


Next Page →

PDF embedding disabled (Crown copyright)

View this page online at:


VUW Te Waharoa — PDF NZ Gazette 1994, No 128


NZLII — PDF NZ Gazette 1994, No 128




✨ LLM interpretation of page content

🌾 Electricity Corporation of New Zealand Limited Financial Statements (continued from previous page)

🌾 Primary Industries & Resources
Financial statements, Fair values, Credit risk, Resource consents, Debt defeasance