✨ Financial Statements Notes
VECTOR LIMITED & SUBSIDIARIES
GAS DISTRIBUTION ACTIVITIES
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2008
13. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (continued)
LIQUIDITY RISK
Liquidity risk is the risk of difficulty in raising funds at short notice to meet financial commitments as they fall due. In order to reduce the exposure to liquidity risk, access to undrawn committed lines of credit is maintained. Cash flow reporting systems are maintained to monitor the forecast liquidity position over an outlook of five years.
The day-to-day liquidity exposure is managed by ensuring that sufficient levels of liquid assets and committed facilities are maintained for the next four to five weeks based on daily rolling operational cash flow forecasts. Short term liquidity crisis management is managed by ensuring sufficient borrowing capacity and liquid assets are available as determined from a monthly rolling 18 month cash flow forecast.
The long term liquidity exposure is managed by ensuring estimated deficits in net cash flow are able to be met as determined by the yearly rolling five year cash flow forecast.
A detailed disclosure of the financial instruments is available under Note 27 of Vector group's annual report for the year ended 30 June 2008.
14. CONTINGENT LIABILITIES
The directors are aware of claims against the entities and, where appropriate, have recognised provisions for these within the financial statements. No other material contingencies requiring disclosure have been identified (30 June 2007: nil).
15. TRANSACTIONS WITH RELATED PARTIES
| NATURE OF THE TRANSACTION | RELATED PARTY | 2008 | 2007 |
|---|---|---|---|
| Vector gas distribution activities sold distribution services based on standard terms and conditions | Gas retailing activities | 4,721 | 4,583 |
| NGC gas distribution activities sold distribution services based on standard terms and conditions | Gas retailing activities | 3,780 | 3,640 |
16. INTERNATIONAL FINANCIAL REPORTING STANDARDS
A detailed disclosure on the explanation of the transition to New Zealand equivalents to International Financial Reporting Standards (NZ IFRS) is reported in Note 32 of the Vector group's annual report for the year ended 30 June 2008. The restatement of comparatives under NZ IFRS resulted in the following adjustments:
| 30 June 2007 | |
|---|---|
| Equity under previous NZ GAAP | 187,312 |
| Change in deferred tax on revaluations for change in company tax rate now recorded through income statement | (1,182) |
| Change in deferred tax due to restatement under NZ IFRS | 18,631 |
| Change in goodwill due to allocation of goodwill within Vector group cash generating units on transition to NZ IFRS | (93,523) |
| Equity under NZ IFRS | 111,238 |
17. EVENTS AFTER BALANCE DATE
Auckland gas distribution activities are subject to an authorisation under Section 70 of the Commerce Act. The Commerce Commission released its decision on 30 October 2008.
Next Page →
NZ Gazette 2008, No 185
✨ LLM interpretation of page content
🏭
Vector Limited & Subsidiaries Gas Distribution Activities Notes to the Financial Statements
(continued from previous page)
🏭 Trade, Customs & IndustryFinancial statements, Financial instruments, Risk management, Liquidity risk, Contingent liabilities, Related party transactions, International Financial Reporting Standards, Events after balance date