✨ Financial Instruments Notes
2860 NEW ZEALAND GAZETTE No. 120
Notes to and Forming Part of the Financial Statements
For the Year Ended 31 March 1997
25 FINANCIAL INSTRUMENTS
(i) Credit risk
Financial instruments which potentially subject the Company to credit risk principally consist of bank balances and accounts receivable. The five largest accounts receivable balances as at 31 March 1997 comprise 8.05% of total accounts receivable. Cash deposits are only made with registered banks, no specific concerns regarding credit risk exist.
The company performs credit evaluations on customers where possible. New customers with known high credit risk are required to pay a bond before energy is supplied to them.
(ii) Wholesale electricity purchases
The company has exposure to wholesale electricity price fluctuations in respect of the purchase of electricity, in respect of commercial sales commitments at fixed prices over periods of one to two years through its associate company, and domestic sales at prices which may be changed by the company within commercial limits. The price fluctuation risks are minimised by entering into back to back electricity hedge contracts through its associate company, which are fixed forward supply agreements to ensure the supply of electricity at predetermined prices.
The balance of off Statement of Financial Position financial instruments of the company are as follows:
| 1997 | 1996 | |||
|---|---|---|---|---|
| Contract | Fair | Contract | Fair | |
| Amount | Value | Amount | Value | |
| $000 | $000 | $000 | $000 | |
| Electricity Purchase Contracts | 9,000 | 9,000 | - | - |
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VUW Te Waharoa —
NZ Gazette 1997, No 120
NZLII —
NZ Gazette 1997, No 120
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💰 Notes to Financial Statements - Financial Instruments
💰 Finance & RevenueFinancial Instruments, Credit Risk, Electricity Purchases, Contracts, Fair Value