New Zealand Gazette – 1999 – No. 147

Page 3521

✨ Financial Statements Notes



11 OCTOBER
NEW ZEALAND GAZETTE
3521

Notes to and forming part of the financial statements for the year ended 31 March 1999

1999 $000 1998 $000
17. FINANCIAL INSTRUMENTS (CONTINUED)
Concentrations of credit risk
Bank balances 2,816 390

The company is not exposed to any other concentrations of credit risk.

Interest rate risk

Interest rates on debt issued in the current year are generally fixed for periods of between one and three months at rates from 4.1% to 7.8% (1998: 7.1% to 10.3%). The interest rates are based on the BkBM rate plus a margin. Interest rates on debt issued prior to 1 October 1993 are fixed until maturity at a rate of 6.3% (1998: 6.3%).

Interest rate swaps and forward rate agreements are used to manage the proportion of fixed rate debt to total debt. The agreements that existed as at 31 March 1999 have a principal of $359.810 million. Interest rate swaps and forward rate agreements open as at 31 March 1999 have a principal of $209.810 million with a cash benefit of $7.883 million. The company pays a weighted average interest rate on open interest rate swaps and forward rate agreements of 7.3%.

The company values interest rate swaps by determining the net present value of future cash flows using current interest rates. The company continuously monitors the credit quality of the major international institutions that are counterparties to its off-balance sheet financial instruments and does not anticipate non-performance by any of the counterparties.

Subsequent to balance date, the company has closed out of interest rate swaps with a principal of $100 million for a cash benefit of $1.085 million.

Fair values

The following methods and assumptions were used to estimate the fair value of each class of financial instrument:

Accounts receivable, bank balances and accounts payable.

The carrying amount is the fair value for each of these classes of financial instrument.

18. COMMITMENTS

Capital expenditure commitments

Estimated capital expenditure contracted for at balance date but not provided for:
CBD reinforcement tunnel 65,600 86,880
Other commitments 9,472 4,011
75,072 90,891

Operating lease commitments
Within one year 14 -
One to two years 14 -
Two to five years 42 -
Beyond five years 19 -
89 -


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✨ LLM interpretation of page content

🏭 Financial Performance of Vector Limited for the year ended 31 March 1999 (continued from previous page)

🏭 Trade, Customs & Industry
Financial Performance, Revenue, Surplus, Deficit, Tax, Electricity Lines Business, Notes to Financial Statements, Reconciliation of Surplus, Financial Instruments, Credit Risk