Annual report financial statements - Meridian Energy

Notes to the Financial Statements FOR THE YEAR ENDED 30 JUNE 2011
22. Deferred Tax (continued)
Some Group carried forward tax losses
have not been recognised as deferred tax
assets as Management have assessed that
it is not probable that future taxable profits
will be available against which the benefit
of the losses can be utilised. These total
$11.5 million (2010: $7.3 million). For tax
purposes these losses begin to expire
in 2029.
23. Borrowings
GROUP
PARENT
CURRENCY
FACE
VALUE
2011
$’000
CARRYING
VALUE
2011
$’000
FACE
VALUE
2010
$’000
CARRYING
VALUE
2010
$’000
FACE
VALUE
2011
$’000
CARRYING
VALUE
2011
$’000
FACE
VALUE
2010
$’000
CARRYING
VALUE
2010
$’000
Borrowings – Current
Unsecured Borrowings NZD 82,524 82,449 284,639 284,417 82,524 82,449 284,639 284,417
Unsecured Borrowings AUD 123,000 128,823 - - 123,000 128,823 - -
Unsecured Borrowings USD 101,789 86,895 - - 101,789 86,895 - -
Total Current Borrowings 307,313 298,167 284,639 284,417 307,313 298,167 284,639 284,417
Borrowings – Non Current
Unsecured Borrowings NZD 647,377 642,004 375,000 371,607 647,377 642,004 375,000 371,607
Unsecured Borrowings AUD 188,469 188,469 179,674 179,674 - - - -
Unsecured Borrowings AUD - - 123,000 122,600 - - 123,000 122,600
Unsecured Borrowings USD 479,860 444,906 581,649 649,177 479,860 444,906 581,649 649,177
Total Non Current
Borrowings
1,315,706 1,275,379 1,259,323 1,323,058 1,127,237 1,086,910 1,079,649 1,143,384
Total Borrowings 1,623,019 1,573,546 1,543,962 1,607,475 1,434,550 1,385,077 1,364,288 1,427,801
Meridian borrows under a negative pledge
arrangement, which does not permit it to
grant any security interest over its assets,
unless it is an exception permitted within
the negative pledge.
Meridian has entered into hedge
contracts to manage its exposure to
interest rates and borrowings sourced in
foreign currencies. The foreign currency
denominated term borrowings reported
in the financial statements at fair value
for the hedge risk are hedged by Cross
Currency Interest Rate Swaps (CCIRSs). The
NZD equivalent of these borrowings after
the effect of foreign exchange hedging of the
borrowings is $704.6 million (30 June 2010
$704.6 million).
Certain NZD and AUD denominated
borrowings are reported at amortised
cost, which is considered to approximate
fair value.
Meridian’s (net) cost of funds for the year
ended 30 June 2011 was 6.77% (2010 6.99%).
Meridian has committed bank facilities
of $1,050 million ($1,189.0 million at
30 June 2010) of which $406.0 million were
undrawn at 30 June 2011 ($686.0 million
at 30 June 2010).
For more information about Meridian’s
management of interest rate, foreign
currency and liquidity risk, see note
24 – Financial Risk Management.
24. Financial Risk Management
a) Capital Risk Management Objectives
Meridian’s objectives when managing
capital are to safeguard the Group’s ability
to continue as a going concern in order
to provide returns for shareholders and
benefits for other stakeholders and to
maintain an optimal capital structure to
reduce the cost of capital.
In order to maintain or adjust the capital
structure, Meridian may adjust the amount
of dividends paid to shareholders, return
capital to shareholders, issue new shares
or sell assets to reduce debt.
Meridian monitors capital on the basis of
the gearing ratio. The ratio is calculated
as net debt divided by total capital.
Net debt is calculated as total borrowings
less cash and cash equivalents.
Total capital is calculated as ‘equity
attributable to shareholders of the
Parent’ as shown in the Statement of
Financial Position, adjusted for the effect
of the fair value of financial instruments,
plus net debt.
MERIDIAN ENERGY LIMITED
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