✨ Financial Statements Notes
Notes to and Forming Part of the Financial Statements
For the Seven Months Ending 31 March 2001
9 CALCULATION OF RATIOS
The calculation of the ratios disclosed in note 8 is based on the 12 month actual results of the amalgamated companies Powerco Limited and Centralpower Limited as disclosed in the proforma results in note 6. The balance sheet denominator used in the calculation is based on the weighted average of the balance sheet since the amalgamation on 1 September 2000.
10 CONTINGENT LIABILITIES AND COMMITMENTS
Contingencies
As Powerco is an integrated business, this disclosure relates to the business as a whole.
The company has been named as a Second Defendant in a claim issued by Todd Energy Limited and Kiwi Co-operative Dairies Limited against Transpower Limited. Kiwi Co-generation Limited has applied to the Court to be substituted as a Plaintiff in place of Kiwi Co-Operative Dairies Limited. 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. No provision for the claim has been included in the financial statements.
Capital Commitments
As Powerco is an integrated business, this disclosure relates to the business as a whole.
Commitments for future capital expenditure resulting from contracts entered into amounts to $16,000.
11 FINANCIAL INSTRUMENTS
(i) Credit Risk
As Powerco is an integrated business, this disclosure relates to the business as a whole.
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 2001 comprise 73.76% 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 by the Fixed Coupon bonds and 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 and has converted the fixed interest rates on Bonds into floating by a reverse swap agreement, and re-fixed interest rates via additional swap agreements. As at 31 March 2001 the Company had interest rate swap agreements with registered counterparties maturing within 10 years. The weighted average of these swap agreements produce an interest rate of 7.408% p.a.
(iii) Fair Value
All assets and liabilities are considered to be at their fair value with the exception of the following items:
| Items | Notional Values Current 31 March 2001 $000 | Notional Values Forward rate 31 March 2001 $000 | Mark to Market Adjustment 31 March 2001 $000 |
|---|---|---|---|
| Interest rate swaps | 282,038 | - | (6,471) |
| Forward rate swaps | - | 222,801 | (4,267) |
| Swaps (Fixed to floating for Bonds) | (161,944) | - | 5,783 |
| Total Bonds Debt (Fixed payments to Bond Holders) | 160,129 | - | - |
| (3,955) |
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Online Sources for this page:
VUW Te Waharoa —
NZ Gazette 2001, No 107
Gazette.govt.nz —
NZ Gazette 2001, No 107
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Powerco Limited Financial Statements
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🏭 Trade, Customs & IndustryFinancial Statements, Proforma Combined Net Profit After Tax, Taxation, Performance Measures, Electricity (Information Disclosure) Regulations 2000