✨ Financial Statements Notes
3234 NEW ZEALAND GAZETTE No. 134
11 Financial Instruments
(a) Risk
Nature of activities and management policies with respect to financial instruments:
(ii) Concentrations of Credit Risk
In the normal course of its business, the Group incurs credit risk from trade receivables from customers and transactions with financial institutions. A provision has been set up for trade receivables which are unlikely to be collected.
The Group has a credit policy which is used to manage this exposure to credit risk. As part of this policy, limits on exposures with counterparties have been set and are monitored on a regular basis.
Prior to the sale of the Energy Business on 1 March 1999 there were no significant concentrations of credit risk. Since the sale the Group has in excess of 90% of its trade debtors owing from the incumbent retailer. This debt is subject to a written agreement and regular credit checks. The Group does not require any collateral.
(b) Fair Values
The Directors estimate that the carrying amounts of financial instruments in the Statement of Financial Position equal their fair values.
12 Related Party Transactions
The Lines Business has received services from WEL Energy Operations Division. Both entities form part of WEL Energy Group. All transactions between the two parties are at arms length and at market rates. There have been no transactions at nil or nominal value.
There are no outstanding balances between the two parties. No debts were forgiven or written off.
Details of the transactions are as follows:
WEL Energy has had a major network expansion program operating during the year ended 31 March 1999. Overhead lines have been removed and replaced with underground supply. This has mainly been completed in conjunction with realignment or upgrading of roading in its area.
| Line Business | ||
|---|---|---|
| 1999 | 1998 | |
| ($000s) | ($000s) |
The costs involved with these projects were:
(a) Construction of subtransmission assets
Approximately 20 km of 33kv underground cable laid...
2,436
(b) Construction of zone substations
Upgrading of six substations...
3,159
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VUW Te Waharoa —
NZ Gazette 1999, No 134
NZLII —
NZ Gazette 1999, No 134
✨ LLM interpretation of page content
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Notes to the Financial Statements for WEL Energy Group Limited
(continued from previous page)
🏭 Trade, Customs & IndustryFinancial statements, Financial instruments, Credit risk, Fair values, Related party transactions, Construction, Subtransmission assets, Zone substations