✨ Financial Statements
22 AUGUST NEW ZEALAND GAZETTE 2363
NOTE 13 : NON CURRENT LIABILITIES
| LINE BUSINESS $'000 | ENERGY BUSINESS $'000 | GENERATION BUSINESS $'000 | |
|---|---|---|---|
| Unsecured Loans | 35,609 | - | 31,881 |
| Deferred Taxation | 109 | 20 | 52 |
| 35,718 | 20 | 31,933 |
Unsecured Loans:
Repayment Terms
One to Two Years | - | - | - |
Two to Five Years | 35,609 | - | 31,881 |
Weighted Average Interest | 8.01% | 8.01% | 8.01% |
NOTE 14 : FINANCIAL INSTRUMENTS
In the normal course of business, the Company incurs credit risk from trade receivables and transactions with financial institutions and electricity purchase price hedges. The Company has a credit policy to manage the risk from trade receivables and has a provision for trade receivables that are unlikely to be collected. The Company also requires a bond from customers who do not meet certain credit criteria.
The Company does not have any significant concentration of credit risk. The Company does not require any collateral or security to support financial instruments as it only deposits with banks or other financial institutions with high credit ratings. The Company further minimises its credit exposure by limiting the amount of funds placed with any one financial institution at any one time. The Directors estimate that the carrying amount of financial instruments in the balance sheet equal their face value.
INTEREST RATE HEDGING
TrustPower Limited has entered into a series of forward rate and option agreements to reduce the impact of changes in interest rates on its floating rate loans. These arrangements are timed to mature at the time the related loans mature and effectively fix the floating rate loans. The total value of interest rate hedging contracts at balance date amounted to $75,000,000. The contract expiry dates range from one to five years and fixed interest in the range of 7.42% to 9.32%.
ELECTRICITY PRICE HEDGES
As a normal business practice the Company has entered into a number of electricity hedges in order to reduce the risk from price fluctuations on the electricity spot market. The Directors are of the opinion that the level of hedges carried are appropriate for TrustPower’s business and in accordance with the Company’s risk management policies.
The fair value of electricity price hedging contracts can vary from day to day as the spot market price for electricity varies. As at balance date this secondary market for electricity price hedging contracts was not sufficiently active in order to obtain a reliable measure of fair value of TrustPowers hedging contracts.
The total contract value of the electricity hedges at balance date was $60,265,263, ranging for a period of one to four years.
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VUW Te Waharoa —
NZ Gazette 1997, No 100
NZLII —
NZ Gazette 1997, No 100
✨ LLM interpretation of page content
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TrustPower Limited Financial Position Statements
(continued from previous page)
🏭 Trade, Customs & Industry1 August 1997
Financial Statements, Non-Current Liabilities, Unsecured Loans, Deferred Taxation, Financial Instruments, Interest Rate Hedging, Electricity Price Hedges