43
2005
2004
NOTE 15: COMMITMENTS
$000's
$000's
Capital commitments
277
368
Operating lease commitments
Less than one year
1,292
1,050
One to two years
949
625
Two to five years
549
619
2,790
2,294
NOTE 16: RELATED PARTY TRANSACTIONS
(a) Intergroup transactions and balances
During the year the Company entered into various transactions
with Christchurch City Council (CCC) and its subsidiary
companies. The value of transactions and balances with the
Council and its related entities were as follows:
Services provided to CCC
42,964
37,031
Goods and services received from
CCC
2,014
1,941
Rent and rates paid to CCC
636
598
Accounts payable to CCC
611
146
Accounts receivable from CCC
6,894
6,524
Retentions receivable from CCC
410
346
Services provided to :
Christchurch International Airport
2
6
Lyttelton Port Company
1
4
Connetics
296
278
Services received from:
Orion
2
8
Lyttelton Port Company
28
20
Connetics
266
20
Christchurch International Airport
-
1
Accounts receivable from:
Connetics
44
17
Accounts payable to:
Lyttelton Port Company
10
-
(b) Key management and directors
During the year $1,030 of work was carried out for Mr W. D
Crombie. This work was carried out at commercial rates.
Other than this transaction no directors or senior management
have entered into related party transactions with the Company.
(c) Other related parties
No related party debts have been written off or forgiven during
the year.
NOTE 17: FINANCIAL INSTRUMENTS
City Care Ltd is party to financial instruments as part of its
everyday operation. These include instruments such as bank
balances, investments, accounts receivable, accounts payable
and term loans.
The Company has a series of policies providing risk
management for interest rates and the concentration of credit.
Interest rate risk
Interest rate risk is the risk that the value of a financial
instrument will fluctuate due to the changes in market interest
rates. This could particularly impact on the cost of borrowing or
the return from investments.
The interest rates on the Company's borrowings are disclosed
in notes 10 and 11.
The directors do not consider there is any significant exposure
to interest rate risk on the Company's borrowings.
Currency risk
Currency risk is the risk that the value of a financial instrument
will fluctuate due to changes in foreign exchange rates.
City Care Ltd has no exposure to currency risk.
Credit risk
Credit risk is the risk that a third party will default on its
obligation to the Company, causing the Company to incur
a loss.
Financial instruments which potentially subject the Company to
credit risk consist principally of cash and trade receivables.
Concentrations of credit risk with respect to accounts
receivable are high due to the reliance on the Christchurch
City Council for 52% of City Care Ltd revenue. However,
Christchurch City Council is considered a high credit quality
entity.
