✨ Financial Statements
3810
NEW ZEALAND GAZETTE, No. 132
2 NOVEMBER 2012
POWERCO
GAS DIVISION
c) 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 rate is based on the outstanding balances at the end of the financial year. The interest rate swaps settle on a quarterly basis, with the Division settling the difference between fixed and floating interest rate on a net basis.
The following tables detail the notional principal amounts and remaining terms of interest rate swap contracts outstanding as at reporting date.
| 31 March 2012 | 30 June 2011 | ||
|---|---|---|---|
| Average contracted fixed interest rate | Notional principal amount | Fair value | |
| NZ$000 | NZ$000 | ||
| Fair value swaps | |||
| One to two years | 6.39% | 20,997 | 674 |
| Two to five years | 6.53% | 10,498 | 904 |
| Five years + | - | - | - |
| Total fair value interest rate swaps | 31,495 | 1,578 |
d) Forward foreign currency exchange contracts
The Division has entered into a cross currency swap to hedge the exchange rate and interest rate risk arising from the US private placement notes.
| Average exchange rate | Foreign currency 2012 / 2011 | Contract value 2012 / 2011 | Fair value 2012 | Fair value 2011 | ||
|---|---|---|---|---|---|---|
| 2012 | 2011 | Dr / (Cr) 000's | Dr / (Cr) NZ$000 | Dr / (Cr) NZ$000 | Dr / (Cr) NZ$000 | |
| Two to five years | 0.5947 | 0.5947 | 36,745 | (61,787) | (10,426) | (7,688) |
| Five years + | 0.7880 | 0.7377 | 51,442 | 65,151 | 3,272 | (9,636) |
| 88,187 | (65,282) | (7,154) | (17,324) |
e) Hedge movements recognised in the profit or loss component of the Comprehensive Income Statement
| 31 March 2012 NZ$000 | 30 June 2011 NZ$000 | |
|---|---|---|
| Gain/(loss) arising on derivatives in a designated fair value hedge relationship | 7,529 | (11,333) |
| (Loss)/gain arising on an adjustment for hedge items in a designated fair value hedge relationship | (7,356) | 12,022 |
| Net effect on profit for the period | 173 | 689 |
No items have been reclassified as measured at cost or amortised cost during the period.
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NZ Gazette 2012, No 132
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Powerco Gas Division Financial Statements
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💰 Finance & RevenueFinancial Statements, Interest Rate Swaps, Forward Foreign Currency Exchange Contracts, Hedge Movements, Powerco, Gas Division