✨ Financial Statements
3010
NEW ZEALAND GAZETTE
No. 113
HORIZON ENERGY DISTRIBUTION LIMITED
Financial Statements for the purposes of the Electricity (Information Disclosure) Regulations 1999 and the Electricity (Information Disclosure) Amendment Regulations 2000, 2001
NOTES TO THE FINANCIAL STATEMENTS
17 CAPITAL COMMITMENTS
The Group has commitments for future capital expenditure amounting to $nil ($20,000 in 2001).
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 nil (2001 $8,650,000), having a fair value of nil (2001 $8,707,641). In addition, as at 31 March 2002, the face value of the instruments the Group held were as following:
| Interest Rate Options: | Rate | Term | Commencement Date | 2002 $000 | 2001 $000 |
|---|---|---|---|---|---|
| Swap | 7.16% | Six Years | 29 June, 2001 | 4,000 | - |
| Swap | 7.16% | 42 Months | 20 December, 2000 | 4,000 | 4,000 |
| Swap | 7.27% | 66 Months | 20 December, 2000 | 4,000 | 4,000 |
| Swap | 7.07% | Six Years | 3 April, 1998 | 10,400 | 13,000 |
The mark to market value of the interest rate swap agreements as at 31 March 2002 showed a loss of $175,033 (2001 - loss of $561,681).
(ii) Credit
In the normal course of its business the Company incurs credit risk from trade debtors and financial institutions. 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.
(b) Fair Values
Financial instruments in the current section of the balance sheet, with the exception of the current portion of term loans, are shown at values equivalent to their fair values. The fair value of term loans is disclosed in section (a) (i) above. Investments are shown at cost which is not significantly different from their fair values.
19 SEGMENTAL
The Company operates predominantly in one industry, the distribution of electricity. Its operations are carried out solely in New Zealand and are therefore within one geographical segment for reporting purposes.
20 CONTINGENT LIABILITIES
The Company has assigned its rights under a long term agreement for the purchase of electricity in respect of which the current purchase price may be greater than current market rates. However the Company remains contingently liable to purchase this electricity until the end of the contract (2008 - plus option to renew for a further 9 years) should the purchasers fail to perform their obligations under the contract.
Judgement was awarded in the company’s favour in February 2002 on the remaining litigation issues between the company and Todd Energy Limited in relation to the 31 March 1999 sale and purchase agreement for the company’s previous retail and generation assets and businesses. Todd Energy Limited has appealed the judgement. The income ($1.271m) which was subject to the litigation has been recorded in the current years accounts and has been received after balance date. Directors do not consider it necessary to make any provisions for the outcome of the appeal.
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Online Sources for this page:
VUW Te Waharoa —
NZ Gazette 2002, No 113
Gazette.govt.nz —
NZ Gazette 2002, No 113
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Financial Statements of Horizon Energy Distribution Limited
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🏗️ Infrastructure & Public WorksElectricity, Financial Performance, Revenue, Expenditure, Taxation, Horizon Energy, Distribution