✨ Financial Statements Notes
28 NOVEMBER 2008 NEW ZEALAND GAZETTE, No. 185 4855
NGC HOLDINGS LIMITED
GAS WHOLESALING ACTIVITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2008
12. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (continued)
CREDIT RISK (continued)
| 2008 CARRYING AMOUNT $'000 | 2007 CARRYING AMOUNT $'000 | |
|---|---|---|
| Notional cash | 49,783 | 48,158 |
| Receivables and prepayments | 15,960 | 17,882 |
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.
13. CONTINGENT LIABILITIES
The directors are aware of claims against entities within the Vector group and, where appropriate, have recognised provisions for these within the financial statements. No material contingencies requiring disclosure have been identified. (30 June 2007: nil).
14. TRANSACTIONS WITH RELATED PARTIES
| NATURE OF THE TRANSACTION | RELATED PARTY | 2008 | 2007 |
|---|---|---|---|
| Sale of gas based on actual amounts billed and notional revenue charged based on gas wholesale’s cost of gas. | Gas Retailing Activities | 249,657 | 277,157 |
| Sale of gas by products based on standard terms and conditions. | Kapuni Gas Treatment Plant | 7,482 | 6,600 |
| Purchase of gas transmission services based on notional revenue charged to gas wholesaling activities. | Gas Transmission Activities | 468 | 316 |
| Received allocation of share of the processing fees costs. | Kapuni Gas Treatment Plant | 2,242 | 6,688 |
| Operational gas swap arrangements. | Gas Transmission Activities | 25 | 198 |
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NZ Gazette 2008, No 185
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Notes to the Financial Statements for NGC Holdings Limited Gas Wholesaling Activities
(continued from previous page)
🏭 Trade, Customs & Industry28 November 2008
Financial statements, Financial instruments, Risk management, NGC Holdings Limited