✨ Financial Statements Notes
1400 NEW ZEALAND GAZETTE No. 51
2.3 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
(con’t)
14 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.
Indicative weighted average rates of borrowings are as follows:
| 2001 | 2000 | |||
|---|---|---|---|---|
| Weighted ave interest rate | Face value ($000) | Weighted ave interest rate | Face value ($000) | |
| Bank loans | 5.68% | 68,373 | 7.19% | 458,965 |
| Commercial paper | 5.10% | 143,155 | 6.73% | 78,455 |
| Medium term notes - fixed | 6.50% | 85,466 | - | - |
| rate NZ$ | ||||
| Medium term notes - | 4.88% | 243,158 | - | - |
| floating rate A$ | ||||
| 5.30% | 540,152 | 7.12% | 537,420 |
Indicative weighted average rates of interest rate swaps are as follows:
| 2001 | 2000 | |||
|---|---|---|---|---|
| Weighted ave interest rate | Face value ($000) | Weighted ave interest rate | Face value ($000) | |
| Interest rate swaps | ||||
| Maturing in less than 1 | 5.91% | 79,056 | 6.20% | 48,750 |
| year | ||||
| Maturing between 1 and 2 | 6.20% | 47,006 | 6.05% | 44,850 |
| years | ||||
| Maturing between 2 and 5 | 7.11% | 190,161 | 6.81% | 167,700 |
| years | ||||
| Maturing after 5 years | 7.01% | 106,832 | 7.13% | 142,350 |
| 6.76% | 423,055 | 6.76% | 403,650 |
Foreign exchange risk
The company has, in this reporting period, conducted transactions in foreign currencies for the purposes of protecting the NZ $ value of capital expenditure and for the issuance of A$ bonds which have been hedged with cross currency swaps. Of the interest rate swaps, $243,158,000 relates to cross currency swaps.
At balance date the group has no significant exposure to foreign currency risk.
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Online Sources for this page:
VUW Te Waharoa —
NZ Gazette 2002, No 51
Gazette.govt.nz —
NZ Gazette 2002, No 51
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