✨ Financial Statements
26 SEPTEMBER
12.2 VALUATION
The most recent Government valuation of land and improvements was undertaken as at September 1996 and resulted in the following values being ascribed to properties owned by Marlborough Electric.
| Land | Improvements | |
|---|---|---|
| $ | $ | |
| Hydro Electric Stations | 718,500 | 17,837,500 |
| Other Properties | 1,634,500 | 3,816,800 |
| Totals | 2,353,000 | 21,654,300 |
13. CAPITAL CONTRIBUTIONS
Customer capital contributions totalling $89,782 (1996 $91,207) were credited against the cost of reticulation assets during the year. As at 31 March 1997 the accumulated value of such contributions credited to fixed assets was $2,028,904 (1996 $1,939,122).
14. CAPITAL COMMITMENTS
| 1997 | 1996 | |
|---|---|---|
| $ | $ | |
| Total Capital Expenditure committed to but not recognised in the financial statements | 419,445 | 2,794,000 |
15. CONTINGENT LIABILITIES
The company has an obligation to meet retirement gratuities for some of its employees. Actual payment is consequential upon retirement. These payments are expensed as they fall due. The cost in any one year is not considered material. Apart from this there are no other contingent liabilities (1996 nil other than retirement gratuities).
16. FINANCIAL INSTRUMENTS
16.1 CREDIT RISK
Credit risk is the risk that an outside party will not be able to meet its obligations to the company. Financial instruments which potentially subject the company to concentrations of credit risk consist principally of cash deposits, short term deposits and trade receivables. The maximum credit risk is the book value of these financial instruments however, the company considers the risk of non-recovery of these amounts to be minimal.
The company places its cash deposits with high credit quality financial institutions. Concentration of credit risk with respect to accounts receivable is limited due to the large number of customers. The company holds hire purchase contracts over home appliances sold on the basis of time payment.
With respect to electricity price hedging contracts, the company's exposure is on any potential difference between the spot and the hedge price where, on maturity of these contracts the spot price is greater than the hedge price.
The company does not anticipate any non performance of obligations by Generators which may exist on maturity of these contracts.
16.2 INTEREST RATE RISK
Interest Rate risk is the risk that interest rates will change, increasing or decreasing the cost of borrowing or lending. The company's short term deposits are at fixed interest rates and mature within one year. Interest rates on non-current borrowings are linked to the 90 day bank bill rate (National Bank bill rate).
16.3 CURRENCY RISK
Currency risk is the risk that amounts payable in foreign currencies will change due to movements in exchange rates. The company enters into foreign currency forward exchange contracts in order to manage its exposure to fluctuations in foreign currency.
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VUW Te Waharoa —
NZ Gazette 1997, No 141
NZLII —
NZ Gazette 1997, No 141
✨ LLM interpretation of page content
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Non Current Assets
(continued from previous page)
🏭 Trade, Customs & IndustryFixed Assets, Land, Buildings, Generation Assets, Reticulation System, Plant and Equipment, Motor Vehicles, Capital Works in Progress
💰 Valuation of Land and Improvements
💰 Finance & RevenueGovernment Valuation, Land, Improvements, Hydro Electric Stations, Other Properties
💰 Customer Capital Contributions
💰 Finance & RevenueCapital Contributions, Reticulation Assets, Accumulated Value
💰 Capital Commitments
💰 Finance & RevenueCapital Expenditure, Financial Statements
💰 Contingent Liabilities
💰 Finance & RevenueRetirement Gratuities, Contingent Liabilities
💰 Financial Instruments
💰 Finance & RevenueCredit Risk, Interest Rate Risk, Currency Risk, Financial Instruments