New Zealand Gazette – 2005 – No. 23

Page 543

✨ Financial Statements



UNION NETWORKS - LINES BUSINESS

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

For The Year Ended 31 March 2004

12 CONTINGENT LIABILITIES

The Company was audited by the Inland Revenue Department for the tax year ending 31 March 2001. In respect to some issues the department extended its audit to two preceding tax years. At balance date there was one remaining issue under discussion with the Department. The Company has not received any notification of intention to reassess the years under review.

13 Reconciliation of Reported Net Operating Surplus After Tax With Net Cash Flows From Operating Activities

2004 $\000 2003* $\000
Net Surplus 10,977 4,113
(Gain)/loss on sale of property, plant and equipment (95) (2)
Amortisation 4,495 1,844
Depreciation 11,599 7,601
26,976 13,556

| (Increase)/decrease in receivables and prepayments | (1,228) | (4,881) |
| (Increase)/decrease in inventories | (580) | (318) |
| (Decrease)/increase in accounts payable, accruals | (867) | 3,964 |
| and employee entitlements | | |
| (Decrease)/increase in taxation payable | (1,718) | (1,683) |

| Net cash inflow from operating activities | 22,583 | 10,638 |

14 FINANCIAL INSTRUMENTS

a) Interest rate risk

The Company has a comprehensive treasury policy approved by the Board of Directors to manage the risks of financial instruments.

For the period ending 31 March 2004 the company managed interest rate exposure in accordance with its treasury policy by hedging no less than 90% of all borrowings with interest rate hedge instruments.

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

2004 % 2004 $\000 2003 % 2003 $\000
Maturing in less than 1 year 6.11 24,000 5.90 24,000
Maturing between 1 and 2 years 6.27 30,000 6.11 24,000
Maturing between 2 and 5 years 6.43 84,000 6.38 72,000
Maturing after 5 years 6.60 36,000 6.60 60,000
174,000 180,000

The market valuation of these hedges at 31 March 2004 is $\171,636,691 (2003: $\177,536,000).

b) Credit risk

Financial instruments which potentially subject the Company to credit risk principally consist of bank balances and accounts receivable. (No collateral is held on these amounts. (2003: nil))

Maximum exposure to credit risk is the amount stated in the Financial Statements and is net of any recognised provision for losses on these financial instruments.

c) Concentration of credit risk

The Company has exposure to two electricity retailers that may account for 70% of accounts receivables. To minimise this risk, the Company performs credit evaluations on all energy retailers in conjunction with the contractual requirements contained within the use of system agreements operating with these parties. A bond may be required where deemed necessary.

d) Fair values

The methods and assumptions used are that carrying amounts in the Financial Statements reflect the estimated fair value of the financial instruments including receivables, bank and investments, accounts payable and term debt.

There were no material investments at balance date.

*Comparisons for 2003 include the Hawke's Bay area for the full year and Rotorua/Taupo for 5 months only.



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Online Sources for this page:

VUW Te Waharoa — PDF NZ Gazette 2005, No 23


Gazette.govt.nz — PDF NZ Gazette 2005, No 23




✨ LLM interpretation of page content

🏭 Notes to and Forming Part of the Financial Statements for Unison Networks - Lines Business (continued from previous page)

🏭 Trade, Customs & Industry
Contingent liabilities, Financial reconciliation, Interest rate risk, Credit risk, Financial instruments