✨ Financial Statements Notes
2828 NEW ZEALAND GAZETTE No. 119
TOP ENERGY LIMITED
SPECIAL PURPOSE FINANCIAL STATEMENTS
NOTES TO THE SPECIAL PURPOSE FINANCIAL STATEMENTS
FOR THE 12 MONTHS ENDED 31 MARCH 1997
15. FINANCIAL INSTRUMENTS
b. Concentration of Credit Risk
In the normal course of its business, the Company incurs credit risk from trade debtors and transactions with financial institutions.
The Company has a credit policy which is used to manage its 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 Company does not have any significant concentrations of credit risk. The Company does not require any collateral or security to support financial instruments as it only deposits with, or lends to, banks and other financial institutions of recognised quality. The Company does not expect the non-performance of any material obligations at balance date.
c. Fair Values
The following methods were used to estimate the fair values of these classes of financial instruments:
i. Cash and liquid deposits, debtors and other accounts receivable including sundry debtors, creditors and other accounts payable including sundry creditors, loans payable within twelve months.
The carrying value of these items is equivalent to their fair value.
ii. Investments
The investment of the Company is for shares in unlisted Companies.
iii. Term Liabilities
For these Financial Statements Term liabilities are largely repayable shortly after balance date, or were acquired shortly before balance date - it follows that revaluation is not appropriate at 31 March 1997.
d. Electricity Price Hedging Contracts
The Company has entered into electricity price hedges with its suppliers. Under these agreements the Company agrees with its electricity suppliers, a fixed price (hedge price) for a percentage of its estimated electricity needs. It is the Company’s current policy to hedge the majority of its estimated electricity needs. It is the Company’s policy not to enter into any speculative position in relation to electricity price hedging contracts.
On maturity of the electricity price hedges any difference between the hedge price and the spot market price is settled between the parties. Settlement occurs irrespective of the amount of electricity actually supplied. If the spot market price is greater than the hedge price, electricity suppliers must settle the difference with the Company. Conversely, if the spot market price is less than the hedge price the Company must settle the difference with electricity suppliers.
Next Page →
PDF embedding disabled (Crown copyright)
View this page online at:
VUW Te Waharoa —
NZ Gazette 1997, No 119
NZLII —
NZ Gazette 1997, No 119
✨ LLM interpretation of page content
🏭
Notes to the Special Purpose Financial Statements
(continued from previous page)
🏭 Trade, Customs & Industry8 September 1997
Financial Statements, Related Party Transactions, Financial Instruments, Currency Risk, Interest Rate Risk, Credit Risk, Fair Values, Electricity Price Hedging