6. Contingent consideration
2023 $M
2022 $M
NOTE
Carrying value of contingent consideration Opening balance
79.8
81.7
6.0
Unwinding of discount Payments received Fair value movement
10
6.5
(14.2) (10.7)
(6.1) (2.3)
22.2
Closing balance at 30 June
60.9
79.8
Comprising: Current Non-current
11.5 49.4
15.0 64.8
Key accounting estimate
The fair value of the contingent consideration was estimated by calculating the present value of the future expected cash flows payable by Todd Petroleum Mining Company Limited to Vector. The future period of payment is not fixed by the contract but is dependent on the remaining useful life of the Kapuni gas treatment plant (KGTP), which is directly correlated to the volume of gas available at the Kapuni gas field and the rate at which the gas is extracted. The values of future cash flows are highly dependent on the future sale prices of gas products (LPG and oil) in the market. Underpinning this all is the assumption that there is an active market for processed gas products in the future and government policy relating to the transition of New Zealand to a low carbon economy. Management have re-estimated the same unobservable inputs when calculating the fair value of the contingent consideration at balance date. Refer to note 20 for details and sensitivity analysis around significant unobservable inputs used in measuring fair values.
7. Cash and cash equivalents and short-term deposits
2023 $M
2022 $M
MATURITY DATE
NOTE
89.9
Cash and cash equivalents
20.0
447.1
Short-term deposits
Sep 2023 – Apr 2024
10
2.5
Policies
Cash and cash equivalents and short-term deposits are carried at amortised cost. Cash and cash equivalents includes deposits that are on call, short-term deposits includes deposits with a maturity date.
70
Vector Annual Report 2023
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