New Zealand Gazette – 2002 – No. 122

Page 3268

✨ Financial Statements

2.5 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS (continued)

16 RECONCILIATION OF OPERATING SURPLUS AFTER TAXATION TO NET CASH INFLOW FROM OPERATING ACTIVITIES

	95,188	79,450
Reported surplus after taxation
Add non-cash items:
Depreciation	45,060	42,897
Amortisation of goodwill and intangibles	13,468	13,476
Increase (decrease) in deferred tax payable	39,954	17,345
Decrease (increase) in tax refund due	(22,004)	(10,666)
Add (less) movements in working capital items:
Decrease (increase) in accounts receivable and other debtors	447	2,774
Decrease (increase) in current portion of lease	55	(13)
Decrease (increase) in inventory	653	(16)
Increase (decrease) in accounts and sundry payables	3,731	1,430
Add (less) items classified as investing activities:
Loss (profit) on sale of assets	36	(70)
Movements in accounts payable that relate to fixed assets	4,486
Supplementary dividend paid	6,818	6,538
Add (less) other items:
Movements in term prepayment that relate to deferred financing	(6,750)	-
Costs
Net cash flow from operating activities	181,142	153,145

17 FINANCIAL INSTRUMENTS

The company has a comprehensive treasury policy to manage the risks of financial instruments which is approved by the board of directors.

Interest rate risk
The company has long term borrowings which are used to fund ongoing activities. The company actively manages interest rate exposures in accordance with treasury policy. In this respect, at least 60% of all term debt must be at fixed interest rates or effectively fixed using interest rate swaps, forward rate agreements, options and similar derivative instruments. The following profile is indicative of borrowings applicable to the electricity business.

The weighted average rates of borrowings are as follows:

	2002	2001
	Weighted avg	Weighted avg
	interest rate	interest rate

Bank loans	5.86%	7.06%
	($000s) 74,025	($000s) 719,800
Commercial paper	5.07%	6.54%
	183,692	119,499
Medium term notes - fixed rate NZ$	6.50%	-
	108,918	-
Medium term notes - floating rate A$	4.75%	-
	312,013	-
	5.24%	6.98%
	678,648	839,299

The weighted average rates of interest rate swaps are as follows:

	2002	2001
	Weighted avg	Weighted avg
	interest rate	interest rate

Interest rate swaps
Maturing in less than 1 year	5.95%	6.34%
	127,488	67,863
Maturing between 1 and 2 years	6.66%	6.07%
	50,036	105,225
Maturing between 2 and 5 years	7.16%	6.99%
	216,592	220,363
Maturing after 5 years	7.07%	7.14%
	116,521	213,500
	6.79%	6.81%
	510,637	606,951