✨ Financial Statements
NEW ZEALAND GAZETTE
No. 144
BAY OF PLENTY ELECTRICITY LIMITED
Financial Statements for the purposes of the Electricity (Information Disclosure) Regulations 1999
NOTES TO THE FINANCIAL STATEMENTS
17 CAPITAL COMMITMENTS
The Group has commitments for future capital expenditure amounting to $77,472 ($372,196 in 1998).
18 FINANCIAL INSTRUMENTS
(a) The nature of activities and management policies with respect to financial instruments is described as follows:
(i) Interest Rates
The Group generally uses fixed rate loans or swaps to manage interest rate risk. The total level of fixed rate funding at 31 March was $25,500,000 (1998 $20,000,000), having a fair value of $24,867,409 (1998 $19,695,145). In addition, as at 31 March 1999, the face value of the instruments the Group held were as follows:
| Interest Rate Options: |
|---|
| Rate |
| Swap |
| Swap |
| Swap |
| Swap |
| Swap |
The mark to market value of the interest rate swap agreements as at 31 March 1999 showed a loss of $721,000.
(ii) Credit
In the normal course of its business the Company incurs credit risk from trade debtors and financial institutions. There are no significant concentrations of credit risk.
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 bank risk is reduced by spreading short term investments over high credit quality financial institutions.
(iii) Foreign Exchange
The Company has conducted transactions in foreign currencies for the purpose of capital expenditure. The Company policy is to fully hedge out foreign currency exposure by using Forward Rate Agreements (FRA) and currency options during this period.
Any gains or losses associated with hedging instruments are offset by the underlying exposure.
| Group 1999 $000 | Group 1998 $000 | |
|---|---|---|
| 299 |
The contract amounts of foreign instruments outstanding at balance date are as follows:
Forward Rate Agreements
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VUW Te Waharoa —
NZ Gazette 1999, No 144
NZLII —
NZ Gazette 1999, No 144
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Financial Statements for Bay of Plenty Electricity Limited
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