NEW ZEALAND GAZETTE

No. 80

1968

9. ACCOUNTS PAYABLE

As at 31 March 1997

March 1993 year end of which $369,000 has been utilised during the current year. The basis of charging the provision is the cost of actual work carried out during the year.

10. FIXED ASSETS

As at 31 March 1997

Line Business

Other Business

Recent valuations of major properties as at February 1996 are as follows:

Land & Buildings

(Main Depot complex at Glasgow Road/Nelson Street, Pukekohe)

Valuation for Accounting Purposes: $2,055,000

The valuers used by Counties Power were Marsh & Irwin Ltd who are Associates of the New Zealand Institute of Valuers.

The accounting book value in the Financial Statements as at 31 March 1997 is $1,995,000

(Other properties with a total accounting net book value amounting to $723,000 are not included in above valuations).

Depreciation charged in total amounted to:

11. PROVISION FOR REPLACEMENT OF UNECONOMIC LINES

As at 31 March 1997

Section 62 of the Electricity Act 1992 requires Counties Power to maintain line services for the next 16 years. A provision of $1,392,000 for the replacement of some uneconomic lines was created at the 31...

12. OPERATING LEASE COMMITMENT

Obligations payable after balance date on non-cancellable operating leases are as follows:

There is a right of renewal on the leases for a further term of three years.

13. CAPITAL COMMITMENTS AND CONTINGENT LIABILITIES

Counties Power has commitments for future capital expenditure at 31 March 1997 amounting to $176,000. This expenditure related to the improvement of the Pahurehure/Karaka area supply (1996: $2,700,000 - this expenditure related to the improvement of the Pukekohe area supply and the new Pukekohe substation).

14. FINANCIAL INSTRUMENTS

(A) Nature of activities and management policies with respect to financial instruments.

(i) In the normal course of its business the company incurs credit risk from trade debtors and financial institutions.

The company has a credit policy which is used to manage this exposure to credit risk. As part of this policy limits on exposures have been set, 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 due to the quality of the financial institutions dealt with.

(ii) Provision for uneconomic lines (refer note 11).

(iii) The company does not generally undertake any transactions denominated in foreign currencies apart from the purchase of distribution system equipment and does not hold any long term borrowings.

(iv) Revenue - electricity price hedging contracts

Counties Power Limited has entered into electricity price hedges with its generators. Under these agreements the Company agrees with its electricity generators a fixed price (hedge price) for a percentage of its estimated electricity needs. It is the Company's current policy to hedge between 70 - 90% 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...