New Zealand Gazette – 2008 – No. 34

Page 792

✨ Financial Statements Notes



HORIZON ENERGY DISTRIBUTION LIMITED - Lines Business

NOTES TO THE FINANCIAL STATEMENTS

17 CAPITAL COMMITMENTS

The Group has commitments for future capital expenditure amounting to $190,683 ($395,283 in 2006).

18 FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

(a) The nature of activities and management policies with respect to financial instruments is described as follows:

(i) Interest Rates
The Group generally uses swaps to manage interest rate risk.
As at 31 March 2007, the face value of the swaps the Group held were as follows:

Interest Rate Options: Rate Termination Date Notional Amount 2007 $000 Notional Amount 2006 $000
Commencement Date
3 April, 1998 7.025% (2006: 7.07%) 5-Mar-14 (2006: 5-Sep-11) 4,800 4,800
29 June, 2001 7.16% 29-Jun-07 4,000 4,000
16 August, 2002 6.68% 17-Aug-09 3,000 3,000
20 March, 2003 6.76% 21-Dec-06 - 4,000
20 September, 2004 6.98% 21-Jun-10 4,000 4,000
29 March 2008 7.20% 26-Mar-14 6,000 -

The mark to market value of the interest rate swap agreements as at 31 March 2007 showed a gain of $257,141 (2006 - loss of $217,946). These interest rate swaps are treated as off balance sheet financial instruments.

(ii) Credit
In the normal course of its business the Company incurs credit risk from trade debtors and financial institutions. The Company has a credit policy which is used to manage this exposure to credit risk. As part of this policy, limits on exposures have been set and are monitored on a regular basis.

Maximum Exposures to Credit Risk at balance date are:

2007 2006
Cash 62 46
Accounts Receivable 2,825 4,475

(b) Fair Values: Term Loans, Accounts Receivable, Accounts Payables, Accruals and Cash
Except for the Company’s off balance sheet financial instruments, the fair value of the Company’s financial instruments do not differ from their carrying values, as reported in these Financial Statements and accompanying notes.

19 PROVISIONS

2007 2006
Balance at Beginning of Year 20 90
Current Year Provision 3,347 -
Provision Released (20) (70)
Balance at 31 March 3,347 20

Provisions at 31 March 2007 include:

  • During the year Transpower rebated $660,000 to Horizon Energy via a reduction in transmission costs. The Commerce Commission has advised Horizon Energy that it must refund these monies to consumers and/or retailers. The Company will refund these monies (including interest) in the 2008 financial year and accordingly has recognised this obligation as a provision at 31 March 2007.
  • As previously announced Horizon Energy’s Directors have decided to refund $926,000 to consumers relating to an Award received following legal proceedings. This refund will be paid in the 2008 financial year and is recognised as a provision at 31 March 2007.
  • Provisions also include allowances for costs associated with disputes.


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Online Sources for this page:

VUW Te Waharoa — PDF NZ Gazette 2008, No 34


Gazette.govt.nz — PDF NZ Gazette 2008, No 34




✨ LLM interpretation of page content

🏭 Financial Statements for Horizon Energy Distribution Limited (continued from previous page)

🏭 Trade, Customs & Industry
Financial Statements, Capital Commitments, Financial Instruments, Risk Management, Provisions