✨ Financial Statements Continuation
4692 NEW ZEALAND GAZETTE, No. 161 1 DECEMBER 2006
(Notes to the Consolidated Financial Statements Continued)
12. FINANCIAL INSTRUMENTS
Off Balance Sheet Financial Instruments
The Company does not have any off balance sheet financial instruments.
Credit Risk -
Credit risk is the risk that a third party will default on its obligation to the Joint Venture, causing the Joint Venture to incur a loss.
Financial instruments which potentially subject the Joint Venture to credit risk principally consist of cash and short term deposits and accounts receivables. Bank deposits are placed with high credit quality financial institutions. The Joint Venture performs credit evaluations on all customers requiring credit, and the Joint Venture may in some circumstances require collateral. No collateral is held at 31 March 2006.
Maximum exposures to credit risk at balance date are:
| 31 March 2006 | 31 March 2005 | |
|---|---|---|
| $000 | $000 | |
| Current Account | 22 | - |
| Short Term Bank Deposits | 140 | 165 |
| Receivables | 1,860 | 1,499 |
| 2,022 | 1,664 |
The above maximum exposures are net of any recognised provision for losses on these financial instruments. No collateral is held on the above amounts.
Concentrations of Credit Risk -
The Joint Venture has a concentration of credit risk with regard to the amounts owing by energy retailers at balance date for Line Charges as disclosed in Note 4 Receivables and Prepayments (amongst Trade Debtors). However, these entities are considered to be high credit quality entities.
Foreign Exchange Risk -
Foreign exchange risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates.
The Joint Venture does not use foreign exchange instruments for speculative purposes.
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.
The Joint Venture is exposed to normal fluctuations in market interest rates.
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Online Sources for this page:
VUW Te Waharoa —
NZ Gazette 2006, No 161
Gazette.govt.nz —
NZ Gazette 2006, No 161
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OtagoNet Joint Venture Lines Business Financial Statements for the Year Ended 31 March 2006
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