New Zealand Gazette – 2005 – No. 27

Page 651

✨ Financial Statements Notes



Vector Limited

Electricity Lines Business

Notes to the Financial Statements

For the year ended 31 March 2004

19. FINANCIAL INSTRUMENTS - CONTINUED

Foreign exchange risk

The Vector group, of which the electricity lines business is the predominant activity, has, in this reporting period, conducted transactions in foreign currencies for the purposes of protecting the NZS value of capital expenditure.
At balance date the Vector group, of which the electricity lines business is the predominant activity, has no significant exposure to foreign currency risk.

Credit risk

In the normal course of its business, the Vector group, of which the electricity lines business is the predominant activity, is exposed to credit risk from energy retailers, financial institutions and trade debtors. The Vector group, of which the electricity lines business is the predominant activity, has credit policies, which are used to manage the exposure to credit risks.

As part of this policy, the Vector group, of which the electricity lines business is the predominant activity, can only have exposures to financial institutions having at least a credit rating of A- long term from Standard & Poor's (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 Vector group, of which the electricity lines business is the predominant activity, minimises its credit risk by spreading such exposures across a range of institutions. The Vector group, of which the electricity lines business is the predominant activity, does not anticipate non-performance by any of these financial institutions.

The Vector group, of which the electricity lines business is the predominant activity, has some concentration of credit exposures with a few large energy retailers. To minimise this risk, the Vector group, of which the electricity lines business is the predominant activity, performs credit evaluations on all energy retailers and large electricity 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.

2004 2003
$000 $000
Cash and bank overdraft - 886
Trade receivables 52,359 55,869
Interest rate swaps - -
Cross currency swaps - -


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Online Sources for this page:

VUW Te Waharoa — PDF NZ Gazette 2005, No 27


Gazette.govt.nz — PDF NZ Gazette 2005, No 27




✨ LLM interpretation of page content

🏭 Notes to the Financial Statements for Vector Limited – Electricity Lines Business (continued from previous page)

🏭 Trade, Customs & Industry
Financial Instruments, Foreign Exchange Risk, Credit Risk, Credit Policies, Financial Institutions, Credit Ratings, Energy Retailers, Trade Receivables, Interest Rate Swaps, Cross Currency Swaps