VECTOR ANNUAL REPORT 2021 /
Notes to the Financial Statements
24.Equity continued 24.4 Reserves Hedge reserves
Hedge reserves comprise the cash flow hedge reserve and cost of hedging. The cash flow hedge reserve records the effective portion of changes in the fair value of derivatives that are designated as cash flow hedges. The gain or loss relating to the ineffective portion is recorded in prof it or loss within interest costs (net). During the year, $32.8 million (2020: $37.1 million) was transferred from the cash flow hedge reserve to interest expense. Cost of hedging records the change in the fair value of the cost to convert foreign currency into New Zealand dollars as required under NZ IFRS 9. Other reserves comprise: — A share-based payment reserve relating to the employee share purchase scheme. When shares are vested to the employee, the reserve is offset with a reduction in treasury shares. — A foreign currency translation reserve to record exchange differences arising from the translation of the group’s foreign operations. — A reserve recording the group’s share of its associate’s other comprehensive income. — A reserve to record the fair value movements in the group’s investments in f inancial assets.
Other reserves
25. Related party transactions
2021 $M
2020 $M
Transactions with Entrust Dividends paid Distribution to customers
123.9
123.9
–
5.0
2021 $M
2020 $M
Transactions with joint operation (until 31 March 2020) Purchases of electricity and steam from Kapuni Energy Joint Venture (“KEJV”)
– – – –
7.3 8.2 1.5 0.1
Sale of gas to KEJV
Sales of operations and maintenance services to KEJV Sales of administration and other services to KEJV Transactions with associate Purchase of vegetation management services from Tree Scape Limited Directors’ fees received from Tree Scape Limited Transactions with key management personnel Salary and other short-term employee benef its
7.7 0.1
9.9 0.1
5.8 0.8
7.1 0.9
Directors’ fees
Related parties
As noted in note 6, the group’s investment in Tree Scape Limited has been reclassif ied as held for sale, with a target sale completion date of 31 August 2021. Until the sale is completed, Vector remains a 50% shareholder of Tree Scape Limited, who will continue to transact with the group as a related party. The Kapuni Energy Joint Venture was a joint operation to which the group was a party with 50% interest. The interest was sold on 31 March 2020 as a part of the sale of Vector’s Kapuni gas interests to Todd Petroleum Mining Company Limited. Other related parties are Entrust, the group’s ultimate parent entity and key management personnel that include the group’s directors and the executive team.
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