✨ Financial Statements and Risk Disclosures
10 SEPTEMBER NEW ZEALAND GAZETTE 2761
which the banks can enforce the above guarantees against PowerNet Limited in respect of any successful claim under Section 56 of the Insolvency Act 1967.
The Power Company Limited’s exposure would amount to two thirds of these liabilities.
The Power Company Limited has a guarantee of $6,250,000 in favour of United Electricity Limited. This has been given to support the guarantees provided by United Electricity Limited in relation to facilities entered into by Pacific Energy Limited. Pacific Energy Limited acts as principal and agent in negotiating and purchasing energy and also in the provision of and accounting for hedging facilities on behalf of United Electricity Limited. This guarantee is now in the process of being released.
11.0 FINANCIAL INSTRUMENTS
Off Balance Sheet Financial Instruments
The Line Business does not have any off balance sheet financial instruments, with the exception of the guarantees referred to in Note 10 and interest rate swaps.
Credit Risk
Financial instruments which potentially subject the Line Business to credit use principally consist of bank balances and accounts receivable. Bank deposits are placed with high credit-quality financial institutions. The Line Business performs credit evaluations on all customers requiring credit and generally does not require collateral.
Maximum exposures to credit risk at balance date are:
| Year Ended
| 31 March 1999
| $000
| ---
| Bank Balances (1,579)
| Receivables 2,745
| $1,166
The above maximum exposures are net of any recognised provision for losses on these financial instruments. No collateral is held on the above amounts, with the exception of the security over the guarantees referred to in note 10.
Concentrations of Credit Risk
The Line Business is exposed to a Concentration of Credit Risk by one significant energy retailer. This entity is considered to be a high credit quality entity.
Foreign Exchange Risk
The Line Business is not exposed to any foreign exchange risk.
Interest Rate Risk
The Line Business is exposed to normal fluctuations in market interest rates except for $15,500,000 of borrowing for which interest rates are hedged by way of an interest rate swap.
Fair Values
The estimated fair value of the Line Business’ financial instruments are represented by the carrying values with the exception of interest rate swaps. The fair value of the interest rate swaps at 31 March 1999 is $570,649.
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VUW Te Waharoa —
NZ Gazette 1999, No 115
NZLII —
NZ Gazette 1999, No 115
✨ LLM interpretation of page content
💰 Financial Liabilities and Guarantees
💰 Finance & RevenueLiabilities, Guarantees, Insolvency Act 1967, PowerNet Limited, The Power Company Limited, United Electricity Limited, Pacific Energy Limited
💰 Off Balance Sheet Financial Instruments
💰 Finance & RevenueFinancial Instruments, Guarantees, Interest Rate Swaps
💰 Credit Risk Disclosure
💰 Finance & RevenueCredit Risk, Bank Balances, Receivables, Credit Evaluations
💰 Concentrations of Credit Risk
💰 Finance & RevenueCredit Risk Concentration, Energy Retailer
💰 Foreign Exchange Risk
💰 Finance & RevenueForeign Exchange Risk
💰 Interest Rate Risk
💰 Finance & RevenueInterest Rate Risk, Interest Rate Swaps, Borrowing
💰 Fair Values of Financial Instruments
💰 Finance & RevenueFair Values, Financial Instruments, Interest Rate Swaps