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New Zealand Gazette – 2005 – No. 129

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✨ Financial Statements Notes

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NEW ZEALAND GAZETTE, No. 129

17 AUGUST 2005

TOP ENERGY LIMITED

NOTES TO THE SPECIAL PURPOSE FINANCIAL STATEMENTS

FOR THE 12 MONTHS ENDED 31 MARCH 2005

15 FINANCIAL INSTRUMENTS

ii.  *Interest Rate*

    The Company has a $65m Facility Agreement with BNZ. An amount of $35m is a facility in relation to the possible expansion of the Ngawha geothermal project, no advance has been made at balance date. The Core business facility of $30m allows borrowings to be made over variable periods. At balance date $9.9m was advanced to the Line business and these advances will be renewed to coincide with funding requirements. The expected repayment dates are disclosed in Note 8.

    The principal or contract amounts of interest rate contracts outstanding at 31 March 2005 for the Line business are $7.68m (2004: $7m). The effective interest rates are disclosed in Note 8.

    The Company has not entered into forward agreements or futures transactions.

b.  *Concentration of Credit Risk*

    In the normal course of its business, the Company incurs credit risk from trade debtors and transactions with financial institutions.

    The Company has a credit policy which is used to manage its exposure to credit risk. As part of this policy, limits on exposures with counterparties have been set and approved by the Board of Directors and are monitored on a regular basis.

    The Company does not have any significant concentrations of credit risk. The Company does not require any collateral or security to support financial instruments as it only deposits with, or lends to, banks and other financial institutions of recognised quality. The Company does not expect the non-performance of any material obligations at balance date.

c.  *Fair Values*

    The following methods were used to estimate the fair values of these classes of financial instruments:

    i.  Cash and liquid deposits, debtors and other accounts receivable including sundry debtors, creditors and other accounts payable including sundry creditors, loans payable within twelve months.

        The carrying value of these items is equivalent to their fair value.

    ii.  *Term Liabilities* – see Note 8.

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