NOTES TO THE FINANCIAL STATEMENTS continued
02. Summary of significant accounting policies:// CONTINUED New and amended accounting standards adopted
—— Disclosure Initiative (Amendments to IAS 7) The group has adopted Disclosure Initiative (Amendments to IAS 7) in the current year. The impact of the amendment is limited to disclosures only, requiring a disclosure of changes in liabilities arising from financing activities. Refer to note 21.2.
03. Significant transactions and events://
Significant transactions and events that have occurred during the year ending 30 June 2018:
Commerce Commission settlement
On 7 July 2017, Vector and the Commerce Commission agreed the settlement of an over- recovery of electricity revenue by Vector during the regulatory years ended 31 March 2014 and 31 March 2015. The agreement was to effect the settlement through future price adjustments for the regulatory years ending 31 March 2019 and 31 March 2020. Total value of the adjustments is approximately $13.9 million, including accumulated interest of $3.8 million. Financially the adjustments will impact the group’s reported revenues and interest costs over three financial years, commencing in the current year ended 30 June 2018 (3 months), and subsequently in years ended 30 June 2019 (12 months) and 30 June 2020 (9 months). mPrest Systems (2003) Limited On 4 October 2017, Vector invested $14.0 million (US $10.0 million) into mPrest Systems (2003) Limited (mPrest). The investment is accounted for as a financial asset on the Balance Sheet. The mPrest technology allows utilities to better monitor, analyse, forecast and control energy networks and connect traditional infrastructure like electricity lines and substations with new technologies like solar and battery energy solutions. Vector is in the process of rolling out the mPrest technology across its Auckland network to improve its services to its customers. At 30 June 2018, Vector holds 7.8% of the issued capital in mPrest. SolPho Limited Vector Energy Solutions Limited acquired 100% of the shares in SolPho Limited for cash consideration of $0.7 million on 1 November 2017. SolPho Limited owns one of the largest solar arrays in New Zealand, and the power is sold via a long-term offtake agreement. Aircon Direct Limited E-Co Products Group Limited and its associated subsidiary acquired the business of Aircon Direct Limited for cash consideration of $1.0 million on 22 September 2017. Aircon Direct Limited is a provider of air conditioning and ventilation system services and represents a geographical expansion to E-Co Products Group’s business. NZ Windfarms Limited On 23 February 2018, the group executed the unconditional sale of its 22.11% shareholding in NZ Windfarms Limited, an NZX listed renewable power generation entity. The sale transaction settled on 27 February 2018 for a total consideration of $6.4 million, representing the fair value of the investment at the time of sale. No gains and losses arose from the sale. Power Ledger Pty Limited Vector purchased a 2.7% equity stake in Power Ledger Pty Limited (“PowerLedger”) for $0.4m in the prior year and concurrently entered into a trial arrangement with the company to test its blockchain peer-to-peer technology on Vector’s network. The equity stake was repurchased by PowerLedger from Vector in the current year for a consideration of $1.4 million, giving rise to a gain of $1.0 million. The trial arrangement between the two parties ended at the time of the repurchase.
Investments
Sale of investments
72
Vector://AR 18
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