✨ Financial Statements and Related Party Transactions
19 SEPTEMBER NEW ZEALAND GAZETTE 3161
WAIPA POWER LIMITED - OTHER BUSINESS
12 RELATED PARTIES
Related party transactions in the accounts of Waipa Power Limited are;
i) Related Parties purchase goods and services on normal terms of trade.
In addition, provision has been made in the accounts for payment of a dividend to the Waipa Power Trust of $823,859 (1996 $388,108)
13 FINANCIAL INSTRUMENTS
Waipa Power Limited has entered into electricity price hedges which establish a fixed price for a significant percentage 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.
Credit Risk
Electricity price hedge exposure is on any potential difference between the spot price and the hedge price, where on maturity the spot price is greater than the hedge price. Waipa Power Limited does not anticipate any non-performance of any obligations which may exist on maturity of these agreements.
In the normal course of it's business, Waipa Power Limited incurs credit risk from trade receivables from customers. There are no significant concentrations of credit risk and Waipa Power Limited does not require any collateral.
Waipa Power Limited places its cash and short term deposits with high credit quality financial institutions with a recognised credit rating of A- or better and limits the amount of credit exposure to any one institution, as set forth by the Board of Directors. While the company may be subject to credit losses up to the contract amounts in the event of non-performance by other parties, it does not expect such losses to occur.
Fair Value
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 the secondary market for electricity price hedging contracts was not sufficiently active in order to obtain a reliable measure of the fair value of Waipa Power Limited's hedging contracts. On maturity of these agreements there is potentially an asset or liability in relation to the electricity price hedges which has not been recognised in the Financial Statements. As at balance date the contract amount of the electricity hedging activity amounted to $24,004,164.
The estimated fair value of Waipa Power Limited's other financial instruments at 31 March 1997 are stated in the Statement of Financial Position.
PUBLISHED BY AUTHORITY OF DEPARTMENT OF INTERNAL AFFAIRS:
GP LEGISLATION SERVICES, NEW ZEALAND—1997
ISSN 0111-5650
Price $3.95 (inc. G.S.T.)
87391—97A
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VUW Te Waharoa —
NZ Gazette 1997, No 134
NZLII —
NZ Gazette 1997, No 134
✨ LLM interpretation of page content
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Financial Statements of Waipa Power Limited
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🏭 Trade, Customs & IndustryFinancial Statements, Related Parties, Dividends, Financial Instruments, Electricity Price Hedges, Credit Risk, Fair Value