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WE L ANNUA L REPOR T
56
13. Investment in joint venture (continued)
Ultrafast Fibre Limited is incorporated in New Zealand, and has a financial year end of 30 June.
A Shares in Ultrafast Fibre Limited are issued to Crown Fibre Holdings Limited as payment for each premise passed. When the premise
connects to the fibre network Waikato Networks Limited is required to purchase the A shares from Crown Fibre Holdings Limited. The cost
of connecting a premise to the fibre network is incurred by Waikato Networks Limited, who then sell the assets to Ultrafast Fibre Limited,
in return for B shares or cash in accordance with the contract. In additionWaikato Networks Limited also receive B shares in Ultrafast Fibre
Limited as consideration for working capital and for expenditure on communal fibre optic network infrastructure (Layer 2). The value of the
consideration for A shares and B shares (with the exception of working capital) is determined by the Shareholders’Agreement, Schedule 2.
The percentage interest held is determined by the number of shares, divided by the total number of all classes of shares issued.
Under the Deed of Amendment signed on the 31 July 2014, Clause 8 of the Shareholders Agreement is suspended for the period from
the date of the variation to the end of the concession period. The effect of this variation is to suspend the obligation to purchase the
A shares for the year ended 30 June 2015 and 30 June 2016 and to limit the obligation to purchase A shares to $10 million in the year to
30 June 2017, $15 million in the year to 30 June 2018 and $20 million in the year to 30 June 2019. Waikato Networks Limited are not required
to purchase A shares from Crown Fibre Holdings during the suspension period except for the committed A shares however they can elect to
exercise their rights under clause 8 of the Shareholders Agreement and purchase additional A shares in respect of the number of End Users
connected and receiving services during that period. For any A shares that WNL has not acquired from CFH during the suspension period
these shares convert to ordinary shares and continue to be held by CFH.
Due to the frequent share issues as noted above this causes changes in the percentage of ownership held in Ultrafast Fibre Limited.
These changes are accounted for as acquisitions of shares and deemed disposals of investment.
14. Derivative financial instruments
The company and group had the following derivative financial instruments at year end as follows.
2015
2014
Assets
Liabilities
Assets
Liabilities
($000)
($000)
($000)
($000)
Group and Parent
USD foreign exchange contracts
-
-
-
367
Total
-
-
-
367
Less non-current portion
Interest rate swaps - cashflow hedges
-
1,805
-
-
Total Derivatives
-
1,805
-
-
The notional principal amounts of the outstanding interest rate swap contracts at 31 December 2015 were $100 million (2014: nil).
At 31 March 2015, the fixed interest rates vary from 3.89% to 4.1% (2014: nil), and the floating rate is NZD-BBR. Gains and losses
recognised in the hedging reserve in equity (note 29) on interest rate swap contracts as of 31 March 2015 will be continuously
released to the income statement within finance cost until the repayment of the bank borrowings (note 30).
The notional principal amounts of the outstanding forward foreign exchange contracts at 31 March 2015 were nil (2014: (367,000)).
As foreign exchange rates change these derivative financial instruments are revalued to fair value and the change in value recorded
in the statement of changes in equity. Fair value is determined in accordance with the Group policy in 2.4.
15. Cash and cash equivalents
(a) Cash on hand and bank deposit balances at call
There were no deposits during the year.
(b) Fair value
The carrying amount for cash and cash equivalents equals the fair value.
Group
Group
Parent
Parent
2015
2014
2015
2014
($000)
($000)
($000)
($000)
16. Share capital
No. of Shares
Authorised issued and fully paid ordinary shares.
The shares have no par value.
Balance at 1 April
8,153,000
111,142
111,142
111,142
111,142
Shares issued during the year
-
-
-
-
-
Closing balance at 31 March
8,153,000
111,142
111,142
111,142
111,142
All ordinary shares carry equal voting rights.
