― 54
7. Operating expenses
2020 $M
2019 $M
NOTE
200.8 153.2
Electricity transmission
4 4 4
209.6 179.2
Gas purchases and production
25.2 23.7 91.3 75.6 94.3 18.0 10.9 16.6
Metering cost of sales
22.8 25.7 88.7 65.0 99.0 26.0 13.0 16.0
Energy solutions cost of sales Network and asset maintenance
4
Other direct expenses
Employee benef it expenses Administration expenses
4
Professional fees
IT expenses
8.0
Other indirect expenses
8.5
Total
717.6
753.5
Fees were paid to KPMG as follows: — audit or review of f inancial statements: $562,000 (2019: $597,000);
Fees paid to auditors
— regulatory assurance: $663,000 (2019: $392,185); — other assurance fees: $22,000 (2019: $74,485); — non–audit fees: $125,000 (2019: $174,000).
Other assurance fees include fees for the audit of guaranteeing group f inancial statements, bond registers, and agreed upon procedures required by certain contractual arrangements. Non-audit fees include fees for compliance services for R&D tax credits (2019: fees for IT forensics and other forensic services). The group applied for and was granted a total wage subsidy of $1.6 million from the New Zealand Government Wage Subsidy Scheme for one of the group’s subsidiary companies. The lump sum payment was initially recognised as a deferred income and subsequently amortised to the prof it or loss, as a reduction in expenses, over the 12–week subsidy period commencing April 2020.
Government wage subsidy
8. Interest costs (net)
2020 $M
2019 $M
NOTE
121.2
Interest expense
125.9
7.9
Amortisation of f inance costs
6.5
(4.1) (2.2) (1.7)
Capitalised interest
(5.4) (1.1)
Interest income
Unwinding of contingent consideration
5
–
1.9 1.7
Interest on leases
12.3
2.0 2.0
Unwinding of decommissioning provisions Interest associated with Commerce Commission settlement
17
1.8
3
1.7 1.7
–
Other Total
126.5
133.3
Policies
Interest costs (net) include interest expense on borrowings and interest income on funds invested which are recognised using the effective interest rate method.
Capitalised interest
Vector has capitalised interest to PPE and software intangibles while under construction at an average rate of 4.3% per annum (2019: 5.3%).
THE INTERPLAY OF TODAY AND TOMORROW
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