✨ Financial Statements Notes
2.4 NOTES TO THE FINANCIAL STATEMENTS
14 Financial instruments continued
Indicative weighted average rates of interest rate swaps are as follows:
| 30 Jun 2003 | 31 Dec 2002 | |||
|---|---|---|---|---|
| Weighted | Face value | Weighted | Face value | |
| avg interest rate | ($000) | avg interest rate | ($000) | |
| Interest rate swaps | ||||
| Maturing in less than 1 | 5.89% | 37,137 | 6.63% | 6,641 |
| year | ||||
| Maturing between 1 and 2 | 7.08% | 38,664 | 7.28% | 38,823 |
| years | ||||
| Maturing between 2 and 5 | 7.15% | 135,323 | 7.19% | 146,608 |
| years | ||||
| Maturing after 5 years | 6.88% | 17,297 | 6.78% | 37,290 |
| 6.91% | 228,421 | 7.12% | 229,362 |
Foreign exchange risk
The company has conducted transactions in foreign currencies for the purposes of protecting the NZ$ value of capital expenditure and for the issuance of A$ bonds which have been hedged with cross currency swaps.
At balance date the company has no significant exposure to foreign currency risk.
Credit risk
In the normal course of its business, the company incurs credit risk from energy retailers, financial institutions and trade debtors. The company has a credit policy, which is used to manage this exposure to credit risk.
As part of this policy, the company can only have exposures to financial institutions having at least a credit rating of A- long term from Standard & Poors (or equivalent rating). In addition, limits on exposures to financial institutions have been set by the board of directors and are monitored on a regular basis. In this respect, the company minimises their credit risk by spreading such exposures across a range of institutions. The company does not anticipate non-performance by any of these financial institutions.
The company has some concentration of credit exposures to a few large energy retailers. To minimise this risk, the company performs credit evaluations on all energy retailers and other large customers and requires a bond or other form of security where deemed necessary.
The maximum exposure to credit risk is represented by the carrying value of each financial asset.
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Online Sources for this page:
VUW Te Waharoa —
NZ Gazette 2003, No 163
Gazette.govt.nz —
NZ Gazette 2003, No 163
✨ LLM interpretation of page content
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Notes to the Financial Statements
(continued from previous page)
🏭 Trade, Customs & IndustryFinancial Statements, Interest Rate Swaps, Foreign Exchange Risk, Credit Risk, Financial Instruments