43
2017 WEL Networks
|
Annual Report
wel.co.nz
will be profitable, contract revenue is recognised over
the period of the contract. When it is probable that total
contract costs will exceed total contract revenue, the
expected loss is recognised as an expense immediately.
Construction contract revenue is calculated on an average
cost per premise connected and is recognised when the
network is ready to be used by Ultrafast Fibre Limited.
(t)
Dividend distribution
Dividend distribution to the Group’s shareholders is
recognised as a liability in the Group’s financial statements
in the period in which the dividends are approved.
(u)
Foreign currency translation
(i)
Functional and presentation currency
Items included in the financial statements of each of the
Group’s entities are-measured using the currency of the
primary economic environment in which each of the entities
operate (‘the functional currency’). The consolidated
financial statements are presented in ‘NZD’ ($000), which
is the Group’s presentation currency.
(ii)
Transactions and balances
Foreign currency transactions are translated into the
functional currency using the exchange rates prevailing
at the dates of the transactions or valuation where items
are re-measured. Foreign exchange gains and losses
resulting from the settlement of such transactions and from
the translation at year-end exchange rates of monetary
assets and liabilities denominated in foreign currencies
are recognised in the profit and loss component of the
statement of comprehensive income, except when deferred
in other comprehensive income as qualifying cash flow
hedges and qualifying net investment hedges.
(v)
Provisions
Provisions are recognised when: the Group has a present
legal or constructive obligation as a result of past events; it is
probable that an outflow of resources will be required to settle
the obligation; and the amount has been reliably estimated.
Provisions are-measured at the present value of the
expenditures expected to be required to settle the
obligation using a pre-tax rate that reflects current market
assessments of the time value of money and the risks
specific to the obligation. The increase in the provision due
to passage of time is recognised as interest expense.
(w)
Convertible notes
Convertible notes issued by WEL Networks Limited can be
converted to non-participating redeemable shares (NPRS)
at the option of the issuer, and where the number of NPRS
to be issued does not vary with changes in fair value, are
classified as equity. Convertible notes are initially measured
at fair value, and are not subsequently re-measured except
on conversion or expiry.
Interest payments on convertible notes are recorded as a
distribution through the statement of movements in equity.
Interest rate is 6.28% for the period 1 April 2016 to
31 March 2020.
(x)
Goods and Services Tax (GST)
The statement of comprehensive income has been
prepared so that all components are stated exclusive of
GST. All items in the balance sheet are stated net of GST,
with the exception of receivables and payables, which
include GST invoiced.
(y)
Leases
Leases in which a significant portion of the risks and
rewards of ownership are retained by the lessor are
classified as operating leases. Payments made under
operating leases (net of any incentives received from
the lessor) are charged to the income statement on
a straight-line basis over the period of the lease.
(z)
Changes in accounting policies
There have been no significant changes in accounting
policies during the current year. Accounting policies have
been applied on a basis consistent with prior year.
WEL NETWORKS LIMITED
Notes to the financial statements
For the year-ended 31 March 2017
(continued)
