✨ Financial Statements Notes
ELECTRICITY DIVISION
Judges refer to practice note [2006] NZLJ 139 for the future statements required under s 60 of the Electricity Act 1992.
a) Interest rate swap contracts
Where parties have swap contracts, the swap contractually agrees to exchange the difference between fixed and floating interest amounts calculated on agreed notional principal amounts. Such contracts enable the swap-dealer easily to migrate the risk of changes in interest rates on debt held. The fair value of interest rate swaps and remaining terms of existing swaps generally determines the national principal amounts outstanding as at reporting date and are disclosed below. The following tables detail the national principal amounts and remaining terms of interest rate swap contracts outstanding at the end of the financial year.
| Floating to fixed contracts | Average contracted fixed interest rate | NZ $000 | National principal amount | Fair value | Average fixed interest NZ $000 | Fair value NZ $000 |
|---|---|---|---|---|---|---|
| Less than 1 year | 6.48% | NZS000 | 755,365 | 2,495 | 6.51% | (NZS2160) |
| 1 to 2 years | 6.49% | 322,925 | 873 | 6.49% | 233 | |
| 2 to 3 years | 6.71% | 22,026 | 685 | 6.84% | 136 | |
| 3 to 4 years | 6.93% | 47,440 | 1,067 | 6.71% | 115 | |
| 4 to 5 years | 6.92% | 5,330 | 6.83% | (13,962) | ||
| 5 years + |
| Fixed to floating contracts | | | 11,162 | (339) |
| Less than 1 year | 6.88% | NZS000 | 111,639 | (473) |
| 1 to 2 years | 6.34% | | 11,162 | (462) |
| 2 to 3 years | 5.69% | | 106,054 | (5,641) |
| 3 to 4 years | 6.47% | | | (554) |
| 4 to 5 years | 6.46% | | |
| 5 years + | | |
| Total cross currency swaps | |
| Total swaps | | | 1,017,985 | 12,300 |
| | | | 7,298,766 | 29,766 |
| | | | 1,783,392 | (2,898) |
31 March 2007
| Floating to fixed contracts | Average contracted fixed interest rate | NZ $000 | National principal amount | Fair value |
|---|---|---|---|---|
| Less than 1 year | 6.39% | NZS000 | 775,365 | 4,295 |
| 1 to 2 years | 6.51% | 123,120 | 673 | |
| 2 to 3 years | 6.49% | 28,920 | 176 | |
| 3 to 4 years | 6.84% | 26,800 | 233 | |
| 4 to 5 years | 6.85% | 28,800 | 112 | |
| 5 years + | 6.71% | 58,000 | 146 |
| Fixed to floating contracts | | | 11,162 | (3,385) |
| Less than 1 year | 6.88% | NZS000 | 88,400 | (493) |
| 1 to 2 years | 6.48% | | 75,400 | (2,323) |
| 2 to 3 years | 6.34% | | 82,800 | (3,338) |
| 3 to 4 years | 6.24% | | 151,200 |
| 4 to 5 years | 6.47% | | |
| 5 years + | 6.46% | | |
| Total cross currency swaps | |
| Total swaps | | | 7,128,640 | (2,164) |
| | | | 217,385 | 29,254 |
30 June 2006
| Floating to fixed contracts | Average contracted fixed interest rate | NZ $000 | National principal amount | Fair value |
|---|---|---|---|---|
| Less than 1 year | 6.51% | NZS000 | 673 | 1,716 |
| 1 to 2 years | 6.54% | 123,120 | 673 | |
| 2 to 3 years | 6.49% | 26,920 | ||
| 3 to 4 years | 6.94% | 28,800 | ||
| 4 to 5 years | 6.84% | 26,800 | ||
| 5 years + | 6.71% | 58,000 |
| Fixed to floating contracts | | | 75,400 | (1,561) |
| Less than 1 year | 6.45% | NZS000 | 151,260 |
| 1 to 2 years | 6.47% |
| Total cross currency swaps | |
| Total swaps | | | 217,385 |
| | | | 2,668,276 |
d) Hedge movements recognised in the Income Statement
| Period | Gain/(loss) on fair value hedges recognised in the Income Statement |
|---|---|
| 9 months to 31 March 2007 | (12,981) |
| 12 months to 30 June 2006 | 5,592 |
| 3 months to 30 June 2007 | (5,232) |
| 12 months to 31 March 2008 | (4,216) |
The fair value of each forward hedges recognised in the Income Statement.
Adjustment for fair value of interest rate risk on borrowings.
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Online Sources for this page:
VUW Te Waharoa —
NZ Gazette 2008, No 46
Gazette.govt.nz —
NZ Gazette 2008, No 46
✨ LLM interpretation of page content
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Notes to Financial Statements for Powerco Electricity Division
(continued from previous page)
🏭 Trade, Customs & Industry25 February 2008
Financial Instruments, Interest Rate Swaps, Currency Swaps, Fair Value, Accounting Policies