✨ Financial Statements Notes
4566 No. 173
NEW ZEALAND GAZETTE
TRANS POWER NEW ZEALAND LIMITED GROUP
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 1996
21. FINANCIAL INSTRUMENTS (cont.)
(i) Credit Risk
To the extent that the Group has a receivable from another party there is a credit risk in the event of non-performance by that counterparty. Financial instruments which potentially subject the Group to credit risk principally consist of bank balances, receivables, investments and off balance sheet instruments.
The Group has a credit policy which is used to manage its exposure to credit risk. As part of this policy, credit limits for approved counterparties are set and approved by the Board of Directors. These limits are monitored on a daily basis. Approved counterparties must be financial institutions with a minimum long term credit rating of Standard & Poor’s (or equivalent rating) of A or above; or corporates with a minimum short term credit rating of A-1 or above.
Trade and other receivables are presented net of any allowance for estimated doubtful receivables. The concentration of credit risk with respect to trade receivables is high due to the small number of customers comprising the customer base. The Group generally performs credit evaluations on customers requiring credit and may in some circumstances require collateral. No collateral is held as at 30 June 1996 (1995: nil).
(ii) Fair Values
The estimated fair values of financial instruments, where these vary from the carrying values, are noted below:
| 30 June 1996 Carrying Value $000 | 30 June 1996 Fair Value $000 | 30 June 1995 Carrying Value $000 | 30 June 1995 Fair Value $000 | |
|---|---|---|---|---|
| Short term investments | 141,684 | 141,616 | - | - |
| Debt | (1,655,635) | (1,580,331) | (1,597,621) | (1,584,668) |
| Foreign exchange forward contracts | (3,579) | (14,640) | - | (1,568) |
| Interest rate swaps | (226) | 16,232 | (28) | (6,848) |
| Cross currency interest rate swaps | 3,731 | (21,474) | - | - |
| Forward rate agreements | - | 1,686 | - | (833) |
| Interest rate options | - | - | - | (29) |
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VUW Te Waharoa —
NZ Gazette 1996, No 173
NZLII —
NZ Gazette 1996, No 173
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Notes to the Financial Statements for Trans Power New Zealand Limited
(continued from previous page)
🏭 Trade, Customs & Industry5 November 1996
Financial Statements, Credit Risk, Fair Values, Financial Instruments