✨ Financial Risk Disclosures
NEW ZEALAND GAZETTE, No. 184
28 NOVEMBER 2011
TRANSPOWER NEW ZEALAND LIMITED LINES BUSINESS
| Yield curve interest rate change: | 2011 +100bp | 2011 -100bp | 2010 +100bp | 2010 -100bp |
|---|---|---|---|---|
| Yield curve impact on profit / (loss) | $M | $M | $M | $M |
| (Loss) / Equity | (131.4) | (142.1) | 116.2 | (125.8) |
(d) Financial risks - operating related
i.
Currency risk - foreign purchases
Currency risk is the risk of the adverse impact of exchange rate movements, which determine the NZD cost of foreign denominated purchases. It is the Group's policy to hedge all committed foreign currency denominated payments greater than NZD 1 million (NZD equivalent) by using forward foreign exchange forward contracts to fix or offset the NZD cost.
The majority of foreign currency payments greater than NZD 1 million (NZD equivalent) are hedge accounted.
The notional gross contract amounts of foreign exchange forward contracts outstanding at balance date, by maturity banding, are:
| 2011 | 2010 | |
|---|---|---|
| Within one year | 286.2 | 139.4 |
| One to two years | 3.3 | 136.4 |
| Two to five years | 16.6 | 21.1 |
| Greater than five years | - | - |
| Total foreign exchange forward contracts | 321.1 | 296.9 |
ii.
Commodity risk
Commodity risk is the risk of an adverse impact in commodity prices such as prices for aluminium and copper. These are some of the raw materials used in the construction of the electricity transmission network. Generally, Transpower has used contracts with commodity risk borne by the supplier.
iii.
Customer credit risk
Transpower's customers comprise predominantly electricity generators, electricity distribution companies and some large industrial users. There is a high concentration of credit risk with respect to trade receivables due to the small number of significant customers which the majority of revenue is received from. It is the Group's policy to perform credit evaluations on customers requiring credit and the Group may in some circumstances require collateral. No collateral is held at 30 June 2011 (2010: none).
Significant receivables balances at balance date were:
| LINES BUSINESS 2011 | LINES BUSINESS 2010 | |
|---|---|---|
| Vector | $M 12.0 | $M 10.9 |
| Meridian | $M 5.9 | $M 8.5 |
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NZ Gazette 2011, No 184
✨ LLM interpretation of page content
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Provisions for Transpower New Zealand Limited
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💰 Finance & RevenueFinancial statements, Debt, Derivative securities, Interest rates, Transpower