✨ Financial Statements Notes
10. Financial Instruments
Financial Instruments which potentially subject the Company to credit risk principally consist of bank balances and accounts receivable. Generally the Company does not require collateral. Maximum exposure to credit risk is the amount stated in the financial statements and is not of any recognised provision for losses on these financial instruments. An amount of $\$123,204 (2005: $\$134,786) is included in Retail’s current liabilities which is the value of consumer deposits held. No other collateral is held on these amounts.
The Company is not exposed to any concentrations of risk or currency risk.
The Company has no bank overdraft facility.
The methods and assumptions used are that the carrying amount in the financial statements reflects the estimated fair value of the financial instruments including receivables, bank and investments and accounts payable.
The Company has long term borrowings which are used to fund ongoing activities.
The Company has arranged a bank guarantee for $\$388,203 (2005: $\$335,000) which is required by Vector Ltd to ($\$335,000) to gain access to their distribution networks and Maui Development Limited ($\$53,203) for use of the Maui pipeline under the open access agreement.
Interest Rate Risk
Interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in market interest rates. This could particularly impact on the cost of borrowing or the return on investments.
The interest rates on the Company’s investments are 6.68% to 7.44% (2005: 5.65% to 6.80%).
| Distribution | Retail | ||
|---|---|---|---|
| 2006 | 2005 | 2006 | |
| $ | $ | $ | |
| Short term deposits | - | - | 1,000,000 |
The Directors do not consider there is any significant exposure to interest rate risk on the Company’s investments.
The interest rates on the Company’s borrowings are disclosed in note 7. Interest rates are reviewed regularly.
There are no interest rate options or interest rate swap agreements in place as at 30 June 2006 (2005 : Nil).
Currency Risk
No currency risk.
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Online Sources for this page:
VUW Te Waharoa —
NZ Gazette 2006, No 138
Gazette.govt.nz —
NZ Gazette 2006, No 138
✨ LLM interpretation of page content
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Notes to the Financial Statements for Wanganui Gas Limited
(continued from previous page)
🏭 Trade, Customs & IndustryFinancial Instruments, Credit Risk, Bank Balances, Accounts Receivable, Consumer Deposits, Bank Guarantee, Interest Rate Risk, Currency Risk