✨ Financial Disclosures
2696 NEW ZEALAND GAZETTE No. 108
8.0 CONTINGENT LIABILITIES
PowerNet Limited also has a number of contingent liabilities in respect of guarantees given to contractors. The maximum exposure ranges from $20,000 to $164,000 totalling $1,338,000. All of these guarantees have now been released, however there is a period of two years following the date of release for 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 $316,750 (1999 $6,250,000) in favour of 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.
9.0 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 8 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:
2000 1999Receivables 419,806 2,744,958
The above exposures are net of any recognised provision for losses on these financial instruments.
No collateral is held on the bank balances and accounts receivable, with the exception of the security over the guarantees referred to in note 8.
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 $8,500,000 (1999 $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 2000 is $26,788 (1999 $570,649).
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Online Sources for this page:
VUW Te Waharoa —
NZ Gazette 2000, No 108
Gazette.govt.nz —
NZ Gazette 2000, No 108
✨ LLM interpretation of page content
💰 Contingent Liabilities and Financial Instruments
💰 Finance & RevenueContingent Liabilities, Guarantees, Financial Instruments, Credit Risk, Interest Rate Risk