VECTOR ANNUAL REPORT 2021 /
Notes to the Financial Statements
8. Operating expenses
2021 $M
2020 $M
NOTE
179.7 128.9
Electricity transmission
4 4 4
200.8 153.2
Gas purchases and production
26.4 23.1 84.2 53.3 94.8 15.7
Metering cost of sales
25.2 23.7 91.3 75.6 94.3 18.0 10.9 16.6
Energy solutions cost of sales Network and asset maintenance
4
Other direct expenses
Employee benef it expenses Administration expenses
4
8.4
Professional fees
19.6
IT expenses
9.2
Other indirect expenses
8.0
Total
643.3
717.6
Fees paid to auditors
Fees were paid to KPMG as follows: — audit or review of f inancial statements: $459,000 (2020: $562,000);
— regulatory assurance: $718,525 (2020: $663,000); — other assurance fees: $72,000 (2020: $22,000); — non-audit fees: nil (2020: $125,000). Other assurance fees include fees for the audit of guaranteeing group f inancial statements, bond registers, greenhouse gas calculations, and agreed upon procedures required by certain contractual arrangements. Non-audit fees in the prior year related to fees for compliance services for R&D tax credits.
9. Interest costs (net)
2021 $M
2020 $M
NOTE
112.4
Interest expense
121.2
7.5
Amortisation of f inance costs
7.9
(4.5) (2.9) (6.3)
Capitalised interest
(4.1) (2.2) (1.7)
Interest income
Unwinding of discount of contingent consideration
5
1.8
Interest on leases
13.3
1.9
Unwinding of discount of decommissioning provisions Interest associated with Commerce Commission settlement
0.6
18
1.7
–
1.8
Total
108.6
126.5
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 3.9% per annum (2020: 4.3%).
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