NOTES TO THE FINANCIAL STATEMENTS continued
06. Operating expenses://
2018 $M 220.6 187.1
2017 $M 212.6 181.7
NOTE
Electricity transmission
4 4 4 4
Gas purchases and production
Technology cost of sales
78.5 87.7 59.0 88.5 20.0 15.0 15.0 15.4
35.7 85.3 30.4 82.8 16.1 14.4 14.4 16.6
Network and asset maintenance
Other direct expenses
Employee benefit expenses Administration expenses
4
Professional fees
IT expenses
Other indirect expenses
Total
786.8
690.0
Fees paid to auditors
Fees were paid to KPMG as follows: —— audit or review of financial statements: $506,000 (2017: $530,000); —— regulatory assurance: $366,000 (2017: $508,000); —— other audit fees: $50,000 (2017: $24,000) Other audit fees include the audit of guaranteeing group financial statements, bond registers and agreed upon procedures required by certain contractual arrangements. There were no other services provided by KPMG during the year ended 30 June 2018 (2017: $16,000).
07. Interest costs (net)://
2018 $M
2017 $M
Interest expense Capitalised interest
133.0
144.1
(4.4) (2.2)
(4.8) (7.1)
Interest income
Other
4.3
5.1
Total
130.7
137.3
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 5.8% per annum (2017: 6.5%).
78
Vector://AR 18
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