New Zealand Gazette – 2008 – No. 27

Page 599

✨ Financial Statements



18 FEBRUARY 2008 NEW ZEALAND GAZETTE, No. 27

  1. COMMITMENTS

13.1 Capital Commitments.
Capital expenditure committed to at balance date but not recognised in the financial statements

                                        2007
                                        $000’s

                                        1,279               2,051

13.2 Lease Commitments
Commitments under present lease agreements over the next five years for the parent company are presently estimated as follows: less than 1 year - $11,775, less than 2 years - $13,275 8, 3-5 years - $29,825, greater than 5 years - $24,730. The Company will continue to incur lease costs for a number of substation and repeater sites beyond 2011.

  1. CONTINGENT LIABILITIES
    Marlborough Lines has no contingent liabilities as at 31 March 2007. (2006: $nil)

  2. FINANCIAL INSTRUMENTS

15.1 Credit Risk
Credit risk is the risk that an outside party will not be able to meet its obligations to the Company. Financial instruments which potentially subject the Company to concentrations of credit risk consist primarily of cash deposits, short term deposits and trade receivables. The maximum credit risk is the book value of these financial instruments; however, the Company considers the risk of non-recovery of these amounts to be minimal. The Company places its cash deposits with high credit quality financial institutions. Credit risk exists in respect of accounts receivable and bank deposits. The Company is able to impose bond requirements on retailers trading across its network in accord with the use of system agreements held with the retailers. Currently approximately one-third in value of the total of accounts receivable is concentrated with one of the larger electricity retailing companies.

15.2 Interest Rate Risk
Interest rate risk is the risk that interest rates will change, increasing or decreasing the cost of borrowing or lending. The Company’s short term deposits are at fixed interest rates and mature within one year. Interest rates of non current borrowings are lined to the 90 Day Bank Bill rate (Westpac Bank buy rates). The Company manages this risk by entering into interest rate swap arrangements to minimise exposure to interest rate movements.

15.3 Currency Risk
Currency risk is the risk that amounts payable in foreign currencies will change due to movements in exchange rates. The Company enters into foreign currency forward exchange contracts in order to manage its exposure to fluctuations in foreign currency exchange rates on the purchase of specific plant and equipment items from overseas suppliers. Total cover under forward exchange contracts at balance date was $nil (2006: $nil).

15.4 Fair Values
The carrying amount of cash, short term deposits, trade receivables, trade payables, term loans and short term investments reflect their fair values.
The estimated fair value of the interest rate swap agreements held at 31 March 2007 is $119,057 (2006 - $22,506).
The estimated fair value of foreign currency forward exchange contracts at 31 March 2007 is $40,337 (2006 - $126,109).



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Online Sources for this page:

VUW Te Waharoa — PDF NZ Gazette 2008, No 27


Gazette.govt.nz — PDF NZ Gazette 2008, No 27




✨ LLM interpretation of page content

🏭 Marlborough Lines Limited Financial Statements (continued from previous page)

🏭 Trade, Customs & Industry
Financial Statements, Capital Commitments, Lease Commitments, Contingent Liabilities, Financial Instruments, Credit Risk, Interest Rate Risk, Currency Risk, Fair Values