✨ Financial Statements Notes
HORIZON ENERGY DISTRIBUTION LIMITED - Lines Business
NOTES TO THE FINANCIAL STATEMENTS
17 CAPITAL COMMITMENTS
The Group has commitments for future capital expenditure amounting to $395,283 ($181,090 in 2005).
18 FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
(a) The nature of activities and management policies with respect to financial instruments is described as follows:
(i) Interest Rates
The Group generally uses swaps to manage interest rate risk.
As at 31 March 2006, the face value of the swaps the Group held were as follows:
Interest Rate Options:
| Commencement Date | Rate | Term | Notional Amount 2006 $000 | Notional Amount 2005 $000 |
|---|---|---|---|---|
| 3 April, 1998 | 7.07% | 144 Months | 4,800 | 4,800 |
| 29 June, 2001 | 7.16% | 72 Months | 4,000 | 4,000 |
| 16 August, 2002 | 6.68% | 84 Months | 3,000 | 3,000 |
| 20 March, 2003 | 6.76% | 45 Months | 4,000 | 4,000 |
| 20 September, 2004 | 6.98% | 69 Months | 19,800 | 19,800 |
The mark to market value of the interest rate swap agreements as at 31 March 2006 showed a loss of $217,946 (2005 - loss of $54,490). These interest rate swaps are treated as off balance sheet financial instruments.
(ii) Credit
In the normal course of its business the Company incurs credit risk from trade debtors and financial institutions. The Company has a credit policy which is used to manage this exposure to credit risk. As part of this policy, limits on exposures have been set and are monitored on a regular basis.
Maximum Exposures to Credit Risk at balance date are:
| 2006 | 2005 | |
|---|---|---|
| Cash | 46 | (752) |
| Accounts Receivable | 4,475 | 2,580 |
(b) Fair Values: Term Loans, Accounts Receivable, Accounts Payables, Accruals and Cash
Except for the Company’s off balance sheet financial instruments, the fair value of the Company’s financial instruments do not differ from their carrying values, as reported in these Financial Statements and accompanying notes.
19 PROVISIONS
| 2006 | 2005 | |
|---|---|---|
| Balance at Beginning of Year | 90 | 90 |
| Current Year Provision | - | - |
| Provision Released | (70) | - |
| Balance at 31 March | 20 | 90 |
The provision includes allowances for costs associated with disputes.
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Online Sources for this page:
VUW Te Waharoa —
NZ Gazette 2006, No 151
Gazette.govt.nz —
NZ Gazette 2006, No 151
✨ LLM interpretation of page content
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Notes to the Financial Statements for Horizon Energy Distribution Limited
(continued from previous page)
🏭 Trade, Customs & IndustryFinancial Statements, Capital Commitments, Financial Instruments, Interest Rate Swaps, Credit Risk, Fair Values, Provisions