✨ Financial Statements Notes
2358 NEW ZEALAND GAZETTE No. 94
Notes to and Forming Part of the Financial Statements
For the Year Ended 31 March 2000
9 CONTINGENT LIABILITIES AND COMMITMENTS
Contingencies
The company has been named as a second defendant in a claim issue by Todd Energy Limited and Kiwi Co-Operative Dairies Limited against Transpower. The Plaintiffs allege various breaches of the Commerce Act 1986 and claim various declarations and injunctions together with damages totalling $19.9 million. The claim is being defended by Powerco, which contends that it is not in breach of any of its obligations. There is an insurance indemnity available for the company in respect of costs associated with the claim. No provision for the claim has been included in the financial statements.
Capital Commitments
The Directors have approved expenditure totalling $3.3 million over the next years in respect of the AMFM asset management system. At balance date $78,304 of this has been contractually committed.
10 FINANCIAL INSTRUMENTS
(i) Credit Risk
Financial instruments which potentially subject the Company to credit risk principally consist of bank balances and accounts receivable. The five largest accounts receivable balances as at 31 March 2000 comprise 81.46% of total accounts receivable. These accounts are subject to a Board Prudential Supervision Policy. Cash deposits are only made with registered banks.
(ii) Interest Rate Risk
Interest rate risk is the risk that interest rates will change, increasing or decreasing the cost of borrowing or lending. The company's short-term borrowings are on a floating daily interest rate. Long-term debt is funded via Powerco's Commercial Paper program based on 90 day Bank Bills. Powerco has entered into interest rate swap agreements to reduce the impact of the changes in interest rates on its Commercial Paper program. At 31 March 2000 the company had interest rate swap agreements outstanding with commercial banks. The total notional principal amount of these arrangements totalled $61 million with the last of these agreements maturing within 5 years. The weighted average of these swap agreements produce an interest rate of 7.22%.
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Online Sources for this page:
VUW Te Waharoa —
NZ Gazette 2000, No 94
Gazette.govt.nz —
NZ Gazette 2000, No 94
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Notes to the Financial Statements for Powerco Limited
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🏭 Trade, Customs & IndustryContingent Liabilities, Commitments, Financial Instruments, Credit Risk, Interest Rate Risk, Powerco Limited