✨ Financial Statements
TRANSPOWER NEW ZEALAND LIMITED LINES BUSINESS
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 30 JUNE 2002
18. CONTINGENCIES
(i) Guarantees
Cross Border Lease
Transpower has entered into two cross border leases in respect of certain HVDC converter stations and the submarine cables. The nature of these transactions is described in Note 11. Transpower has given guarantees and certain undertakings in accordance with a limited guarantee dated 24 October 1996 in respect of certain HVDC converter stations and a limited guarantee dated 31 May 1996 in respect of the submarine cables.
The likelihood of losses in respect of these matters is considered to be remote.
(ii) Todd Energy and Kiwi Co-operative Dairies Claim
Todd Energy Limited and Kiwi Co-operative Dairies Limited have commenced a claim against both Transpower and Powerco Limited alleging breaches of the Commerce Act. The damages claimed total $20 million. Transpower has filed a statement of defence and believes that it has not breached the Commerce Act in any respect. Kiwi Co-operative Dairies Limited has since withdrawn from the proceedings.
(iii) Network Tasman
Network Tasman Limited has commenced a claim against Transpower alleging misrepresentation, breach of good faith, breach of collateral contract, estoppel, breach of the Fair Trading Act and breach of implied servat. The damages claimed total $7 million. Transpower has filed a statement of defence and believes that the claims against it are without merit.
(iv) Economic Gain (Loss) Account
Transpower operates its pricing methodology within an EVA framework that analyses economic gains and losses between those attributable to shareholders and those attributable to customers. The balance of the accumulated gain (loss) from monopoly activities attributable to customers may be passed on to customers over time. This transfer to customers will occur after consideration by Directors of the balance of this account and its likely future movement in order to preserve stability and predictability of prices. The EVA financial statements disclose that at 30 June 2002 there is $126,376,000 to the credit of the customer account.
The electricity industry is undergoing significant change including the proposed establishment of an EGB (Electricity Governance Board). This EGB will be required to endorse Transpower’s pricing methodology, and may make changes accordingly.
(v) Provision for Industry Related Costs
Directors have provided for certain industry related costs. Directors believe that further disclosure of the details of these costs could adversely influence Transpower’s position in its negotiations with third parties. As a result, disclosure is limited in accordance with section 11.13 of FRS-15.
There are no other material contingencies for The Transpower Lines Business as at balance date.
19. SEGMENTAL INFORMATION
The Transpower Lines Business operates predominantly in one industry, the transmission of high voltage electricity. Transpower’s operations are carried out in New Zealand and are therefore within one geographical segment for reporting purposes.
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Online Sources for this page:
VUW Te Waharoa —
NZ Gazette 2002, No 173
Gazette.govt.nz —
NZ Gazette 2002, No 173
✨ LLM interpretation of page content
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Transpower New Zealand Limited Notes to Financial Statements
(continued from previous page)
🏭 Trade, Customs & IndustryFinancial Statements, Contingencies, Guarantees, Legal Claims, Economic Gain (Loss) Account, Segmental Information