✨ Gas Division Financial Statements
9 DECEMBER 2008 NEW ZEALAND GAZETTE, No. 191 5015
GAS DIVISION
Interest rate swap contracts
Under interest rate swap contracts, the Division agrees to exchange the difference between fixed and floating interest amounts calculated on agreed notional principal amounts. Such contracts enable the Division to mitigate the risk of changing interest rates on debt held. The fair value of interest rate swaps is determined by discounting the future cash flows using the yield curve at the reporting date. The average interest rates used are based on the outstanding balances at the end of the financial year. The table below presents exposures with the Division relating to interest rate swap contracts outstanding as at reporting date.
| 30 June 2008 | Average contracted fixed rate | Cash flow swaps NZ$000 | Fair value NZ$000 |
|---|---|---|---|
| Less than 1 year | 7.32% | 5,610 | 46 |
| 1 to 2 years | 6.48% | 11,200 | 138 |
| 3 to 5 years | 6.73% | 67,200 | 846 |
| 5 years + | 6.78% | 44,400 | 7,100 |
| Total cash flow interest rate swaps | 6.77% | 128,410 | 8,130 |
| 30 June 2008 | Less than 1 year | Fair value interest rate swaps NZ$000 |
|---|---|---|
| 7.64% | 20,000 | |
| 6.53% | 14,600 | |
| 6.83% | 46,000 | |
| 6.44% | 38,600 | |
| Total fair value interest rate swaps | 6.81% | 119,200 |
| 30 June 2007 | National principal amount NZ$000 | Fair value NZ$000 |
|---|---|---|
| 4,320 | 30 | |
| 4,220 | - | |
| 56,600 | 82 | |
| 64,600 | 2,114 | |
| 74,200 | 2,236 |
Forward foreign currency exchange contracts
The division has entered into a cross currency swap and interest rate swap arising from the US private placement notes:
| Contract Value | 2006 Fair Value 2007 (NZ$000) | (DR)/CR NZ$000 |
|---|---|---|
| 29,287 | (3,134) | |
| 25,000 | (5,134) |
| Average Exchange Rate | 2007 | 2008 |
|---|---|---|
| 0.5947 | 0.7809 |
Hedge movements recognised in the income statement
|| 30 June 2007 NZ$000 | 30 June 2008 NZ$000 |
|---|---:|---:|
| (Loss)/gain arising on derivatives fair value hedges recognised | (6,138) | 6,139 |
| Net effect on profit for the year | (19,522) | 19,522 |
Note:
- Gain/(loss) arising on derivatives has been disclosed separately.
- Net items have been reclassified at cost or amortised cost during the period.
Next Page →
NZ Gazette 2008, No 191
✨ LLM interpretation of page content
💰
Powerco Gas Division Financial Statements
(continued from previous page)
💰 Finance & RevenueRevenue, Expenditure, Taxation, Powerco, Gas Division, Derivative Financial Instruments, Interest Rate Swaps, Foreign Currency Exchange Contracts, Hedge Movements