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notes to the financial Statements
for the year ended 31 March 2012
23. Borrowings
Group
Parent
2012
2011
2012
2011
$’000
$’000
$’000
$’000
Non-Current
Bank loans
40,900
41,450
40,900
41,450
Subordinated debentures:
Waitomo Energy Services Customer Trust
1,000
1,000
1,000
1,000
North King Country Development Trust
2,000
2,000
2,000
2,000
43,900
44,450
43,900
44,450
Disclosed in the financial statements as:
Current borrowings
-
-
-
-
Non-current borrowings
43,900
44,450
43,900
44,450
43,900
44,450
43,900
44,450
Bank lending facilities
The Group has total bank lending facilities with Westpac of $62 million. These lending facilities are for five
years, expiring 31 March 2017. Bank loans are at floating rates and expose the Group to cash flow interest rate
risk. The Group is within the banking covenant limits and no default of event of review has occurred.
The Directors estimate the fair value of the Group’s bank loans are reflected in their book value, because they
are floating rate loans. Security held by the bank for these loans is a Composite General Security Agreement
over certain assets of the Group.
Subordinated debentures
The subordinated debentures are stated at their fair values. The Waitomo Energy Services Customer Trust
(WESCT) loan has a principal value of $1,000,000 and had fixed interest of 7.42% per annum (2011: 7.42%).
The North King Country Development Trust (NKCDT) loan has a principal value of $2,000,000 and had fixed
interest of 5.00% per annum (2011: 5.00%).
The subordinated debentures are unsecured and the interest rates are as at balance date.
The interest rate payable on the WESCT debenture is reset yearly, by negotiation, having regard to interest
paid by other entities who have issued similar debt securities. The fair value of the WESCT debenture is not
considered to be materially different from its principal value as the applicable interest rate approximates that
of similar debt securities.
The fair value of the NKCDT debenture is not considered to be materially different from its principal value as
the terms of the debenture are such that comparable instruments would not differ materially in value.
There are no specified repayment terms in relation to subordinated debentures.
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