Vector Annual Report 2017

NOTES TO THE FINANCIAL STATEMENTS

06. Operating expenses://

2017 $000

2016 $000

NOTE

Electricity transmission

212,620 181,744 35,662 85,267 30,331 82,856 16,074 14,438 14,447

3 3

209,740 154,969 19,435 80,649 22,922 76,433 15,052 11,224 14,767

Gas purchases and production

Technology cost of sales

Network and asset maintenance

3

Other direct expenses

Employee benefit expenses Administration expenses

3

Professional fees

IT expenses

Loss/(gain) on disposal of PPE and software intangibles

4,348

4,309

Other indirect expenses

12,180 689,967

12,264 621,764

Total

2017 $000

2016 $000

Fees paid to auditors

Audit or review of financial statements

530 508

539 547

Regulatory assurance

Other audit fees Other services

24 16

24

4

Total

1,078

1,114

Other audit fees

Other audit fees are for the audit of guaranteeing group financial statements, share registry, bond registers and agreed upon procedures required by certain contractual arrangements.

07. Interest costs (net)://

2017 $000

2016 $000

Interest expense Capitalised interest

144,094

169,036

(4,784) (7,110)

(4,901) (2,321)

Interest income

Other

5,072

6,991

Total

137,272

168,805

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 6.5% per annum (2016: 6.3%).

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