NOTES TO THE FINANCIAL STATEMENTS continued
12. Investments:// CONTINUED 12.1 Investments in subsidiaries CONTINUED Policies
Subsidiaries are entities controlled directly or indirectly by the parent. Vector holds over 50% of the voting rights in all entities reported as subsidiaries. There are currently no indicators that Vector does not have control consistent with these voting rights. The financial statements of subsidiaries are reported in the financial statements using the acquisition method of consolidation. Intra-group balances and transactions between group companies are eliminated on consolidation. All subsidiaries are incorporated in New Zealand, except for the following which are incorporated in Australia: —— Vector Advanced Metering Services (Australia) Pty Limited; —— Vector Energy Solutions (Australia) Pty Limited; —— Ventilation Australia Pty Limited; —— HRV Australia Pty Limited.
Geography
12.2 Investment in associate
PERCENTAGE HELD
COUNTRY OF INCORPORATION
ASSOCIATE
PRINCIPAL ACTIVITY
BALANCE DATE
2018
2017
Tree Scape Limited
Vegetation management
31 March
New Zealand
50%
50%
2018 $M
2017 $M
Carrying amount of associates Balance at 1 July
9.6
15.6
Reclassification of investment in NZ Windfarms Limited to financial asset
–
(5.6)
Share of net profit/(loss) of associate
(1.5)
1.6
Dividends received Balance at 30 June
–
(2.0)
8.1
9.6
Equity accounted earnings of associate Profit/(loss) before income tax
(2.1)
2.2
Income tax benefit/(expense)
0.6
(0.6)
Share of net profit/(loss) of associate Total recognised revenues and expenses
(1.5) (1.5)
1.6 1.6
Policies
Associates are entities in which Vector has significant influence, but not control or joint control, over the operating and financial policies. Vector holds over 20%, but not more than half, of the voting rights in all entities reported as associates, and has assessed that there are currently no indicators that Vector does not have significant influence consistent with these voting rights. Where Vector has 50% voting rights in an entity reported as an associate, we have determined that this does not constitute joint control as there is more than one combination of parties that can achieve majority voting rights and control through board voting. Investments in associates are reported in the financial statements using the equity method.
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