Vector Limited (VCT) Earnings Call Transcript & Summary

[Foreign Language] Good afternoon to you all, and welcome to this event, the first in-person Vector AGM in 3 years. My name is Jonathan Mason, and I am Vector's Chair. I'd like to acknowledge [indiscernible] for Central Auckland, where we are today and also thank them for their partnership over the past 2 years as Vector worked closely with them to support COVID-19 vaccination efforts. They're very, very supportive of Vector staff, including like essential controller on people and getting vaccinations when they were hard to get. So thank you, [indiscernible] . As we have a quorum and it's 2 p.m., I'll now declare open the 2022 Annual Meeting of Vector Limited shareholders. Today's meeting is a hybrid meeting. So it's shareholders attending either here in the room or online. We hope this format provides our shareholders with more convenience while also allowing them to join proceedings in a way they're comfortable with. And it's nice to be able to offer this choice, as I mentioned earlier, after 2 years of online-only meetings. A hybrid meeting does come with some special instructions to make sure everyone, whether in-person or online, has an opportunity to participate. So I apologize that I'm going to have to go through those rules now. I don't really like going through rules like this. But today's meeting is being held both in-person and online for either Computershare online meetings platform. This allows shareholders, proxies and guests who are not able to travel and attend the meeting in-person the ability to attend the meeting virtually. All online attendees can watch a live webcast of the meeting and read the company documents associated with the meeting. In addition, shareholders and proxies have the ability to ask questions and submit votes. For those of you attending the meeting virtually, if you have a question to submit during the live meeting, please select the Q&A tab on the right half of your screen anytime. Type your question into the field and press send. Your question will be immediately submitted. Should you require any assistance, you can type your query and one of the Computershare team will assist with the chat function and reply to your query. Alternatively, you can call Computershare on 0800-650-034. Please note that while those online can submit questions from now on, we will not address them until the relevant time in the meeting. Please also note that your questions may be moderated or if we receive multiple questions on one topic, we might sort of try to bunch them together, amalgamate them a little bit. And finally, due to time constraints, we may run out of time, hopefully not, but may run out of time to answer your questions. And if this happens, we'll answer them in due course via e-mail. Now for those in the room, we'll open the floor to questions at the relevant time of the meeting. We have a number of microphones that will spread out and make them available to you. So everyone in the room can hear you and the online folks can hear you. And for all those asking questions, as this is a shareholder meeting, we ask that you please do not ask operational or customer service questions in this forum. But I mean the good news is, I know that might be on the top of your mind. So we have members of our customer team available to help you with these questions after the meeting at the entrance to the room. And for those online, these types of questions can be put to our customer services team by phoning 0508 Vector or in number terms, that's 0508-832-867 or by e-mailing [email protected]. So we have telephone and email. Now for members of the media at our meeting today, if we could ask you to hold your questions during the meeting. And if you want to talk to Simon or myself or a relevant executive after the meeting, please talk to one of our communications team, who'll be at the back of the room or use our usual media phone number. So now voting today will be conducted by way of a poll on all items of business. I'll now describe how you can cast your vote starting with the online process. And again, I apologize for the rule stuff here. For those online, if you are eligible to vote at the meeting, once I declare the voting to be open, you'll be able to cast your vote under the vote tab. To vote, simply select your voting direction from the options shown on the screen. You can vote for all resolutions at once or by each resolution. Your vote has been cast when the tech appears. To change your vote, simply select change your vote. You have the ability to change your vote up until the time I declare voting closed. I suspect a lot of people aren't going to be changing their vote multiple times. But in order to provide you with enough time to vote, I will shortly open the voting for all resolutions. So now for voting for those of us in the room. Those of you in the room are able to mark your voting paper at any time and a team member from Computershare will collect the voting forms at the conclusion of the meeting. Again, just like for online, I'll indicate when voting will close so that you'll have a final opportunity to cast your vote. So with those instructions now complete, I now declare the voting open on all items of business. Those in the room, as I noted earlier, may mark your voting paper at any time. And those online will see the resolutions will now be open in the vote tab, and you can submit your votes at any time. I'll give you -- as I noted earlier, I'll give you a warning before I move to close voting. In addition to those attending the webcast today, 908 shareholders holding a total of more than 818, 575,744 shares have appointed proxies. In my capacity as Chair of the meeting and in my own name, I hold proxies for 445 shareholders, representing 812,782,076 shares. Also included in the proxies are 751 million shares held by Entrust, our majority shareholder. It is now my pleasure to introduce my fellow directors: Alastair Bell; Tony Carter; Bruce Turner; Dame Paula Rebstock; Anne Urlwin; and Dr. Paul Hutchison. Also joining us are our Group Chief Executive, Simon MacKenzie; and John Rodger, our Chief Legal and Assurance Officer and Company Secretary. We also have our Chief Financial Officer, Jason Hollingworth; and Graeme Graham Edwards from our external auditors, KPMG, Graeme is joining us via webcast. So now for the agenda of the meeting. We released our financial results on 26th August in our annual report, and that's available on our website and also has been mailed to all shareholders who requested a copy. As all shareholders have by now had the chance to review the report, I'll take this opportunity to talk about some topics. And the first topic is the dividend. And then also some key themes for the year and actually multiple years. For example, how Vector is in the forefront of decarbonization initiatives, on behalf of shareholders, customers and communities. And then before turning over to Simon, maybe just to give up just a high-level short summary of the group's financial performance for this past year. Simon, what's wrong?

[Technical Difficulty]

So the voting font is too small. Okay. So are we going to have certain breaks where people have the opportunity to think about the resolution? Could we help this gentleman during a break? Thumbs up, we'll help you during a break. As soon as we come to a break, someone will come and help you read through the resolutions, and that's before the voting closes. Is that okay? Yes, absolutely. So just to give you a preview then, I'm going to hit high themes and Simon is going to drill down and look at specific aspects of operational performance for the past year. And then after that, we'll open the meeting for specific discussion questions on the annual report, that includes the financial statements and the audit report. Any question that came up in our addresses you can ask about. So after that, we move to formal business of the meeting, that's sort of election of directors, election of the auditors. But we'll come back to that. So before I move to my address and some key themes for Vector, I did want to acknowledge some important highlights of the year. First, I, we, the Board, commend the efforts of Vector staff across New Zealand and Australia, together with our contracted field service providers who've worked extremely hard this year. They have again worked through COVID-19 lockdowns, ongoing disruption and unexpected challenges to keep delivering to our customers' need. We think back a year ago, there was that unexpected snap lockdown in Auckland in August. And gosh, it went all the way through January with a pretty hard lockdown for all of us who are here in Auckland. So not easy to operate effectively with -- in that period. And there were certainly worries with our essential staff about going out every day, meeting other people during a time with COVID. So thanks. It's -- we all went through this journey but a special thanks to the Vector staff. Secondly, and I feel so honored to do this as a lever of history. I want to call out that this year is significant for Vector as it marks 100 years since the creation of the Auckland Electric Power Board. This is a local authority established back in 1st of April 1922 to manage Auckland's power assets. It was created by an active parliament to supply about just 8,000 customers in the Auckland region. And in that time, all electricity from within the region also through gentailer back then. Since then, Auckland Electric Power Board has become the Vector of today, an innovative and globally recognized New Zealand energy company with a portfolio of businesses delivering energy, technology solutions and communication services to more than 8,000 customers actually more than 1 million homes and commercial customers across the Australasia and the Pacific. The Board and I are proud and privileged to be part of this long heritage, which has always included a strong commitment to serve the interest of Vector's customers. Today, this commitment is embodied in Vector Symphony strategy, which is enabling Vector to continue delivering today while proactively rising to the challenges of today and the future. Finally, I'd like to call out that Vector published its second task force for climate-related financial disclosure. Sorry, that was a mouthful. That's going to be required for listed companies starting in 2024, and we're trying to get ahead of the curve. And within that, a detailed carbon abatement curve sets out actions to reduce our emissions, focusing, not surprisingly, not unexpectedly on actions that save us money and make the world a better place. So improve our ability to pay you dividends and save money. And progress is being made on these initiatives. Simon will talk about this in a bit more detail. So now for the key themes and first, dividend. The full year dividend, you can see a chart, the full year dividend is $0.1675 per share, partially imputed at 10.5%, paid to shareholders on 19th September via EnTrust, I think I got what my -- we got our EnTrust money in maybe a couple of weeks ago. But as we look at this chart, there are some headwinds sort of -- we continue to go up, we haven't gone down, but we sort of flattened a bit. And I want to do some the background about why. So just 6 years ago, we were allowed in the biggest part of our assets, which generates, what, 80% to 90% of our earnings still in our regulated asset business. We earned between 7% and 7.5%. We were allowed to earn that by the Commerce Commission. As rates have declined, forgot about the recent increase, as interest rates have declined that regulated return went from 7.19%, down to 4.57%. So on the biggest part of our business, we were really only allowed to earn about maybe 60% of what we were able to earn 6 years ago. And that is the primary headwind. There's a lot of little things, but the primary headwind, lower interest rates for why we haven't been able to increase the dividend. And we think very carefully about the dividend. We know how much it means to Entrust beneficiaries, and we know how much it means to our shareholders. Now with higher interest rates, we should get a reversal of the regulated return. But the way the system works is we won't be able to recognize that for another 2 years under the rules. And so that's sort of a high-level summary for the dividend. Happy to take questions on that when we get to Q&A period. So now how have we done for our shareholders? That would be the next theme. And this is a shareholder return slide. So this looks at both dividends paid and share price change. And you can see over a 5-year period, the dark blue is Vector, the light blue is the market. So over the 5-year period, we've done actually substantially better than the market; slightly lagging, unfortunately, the market over the 10-year period. And we're in that sort of 10% to 15% range, 12.5% -- sort of 12% to 13% range for the 2 periods. So top half of the market for the last 5 years, and we're certainly worked and focused on creating value for the shareholders for the next 5 years. So I mean, we're forward-focused. Third, extremely important aspect of how we perform is how reliable are we. And we look at that in two different senses. We look at it as how many outages do we have and how long do they last? And so on infrastructure investment and reliability, we invest significant sums. Last year, our investments stood at close to [ $350 ] million or almost [ $1 ] million a day. And this covers what we need to ensure that the electricity network is ready for the demands of the future, while ensuring Auckland has the infrastructure it needs now to continue growing and to support major changes to our transport and energy systems, driven by decarbonization. We've reached a settlement agreement with the Commerce Commission and historic breaches of network quality standards. Do we have a chart on how we've done on reliability? Is that in the pack? Okay, yes. No, that's not it. Let's go back. It's okay. And we're pleased to have seen full compliance since the period in question. This reflects our strong focus on improving performance and a comprehensive program of network reliability, initiatives in recent years to mitigate the impacts of the challenges we've experienced in the operating environment. So just to put it in less fancy words, we had some headwinds in Auckland, higher traffic, more frequent storms, focus on safety, and we had a rough period where we exceeded our regulatory limits. And the last 2 years of that rough period, we're close to settling with the Commerce Commission. We went and just said, how do we get a step change. This stuff in Auckland is just going to get worse. The traffic is just going to get worse. The storms are just going to get more frequent. And we had this program called Finding 50, and we made a substantial improvement starting 3 years ago and following through into '21 and '22. So we've been below our sort of reliability measures, that means good, when you're below, it's good for the last 2 years. So now let's move on to Vector Metering. We've quietly had this metering business in New Zealand, and then we started in Australia about sort of 6 to 7 years ago. And we just gradually been increasing it in New Zealand now, it generates a lot of cash for us, and we're -- we have a very good market share in New Zealand. In Australia, we wouldn't have the leading market share, but we've been growing steadily. And so we're doing a strategic review of Vector Metering. It's a fantastic business. But when you grow initially in a market like that light blue line shows, it's a real capital expense hot because you have to do all the expenses to install meters and then you get an annuity, you get a per year revenue for 15 years, but sort of initially spending a lot of money. So the strategic review is looking as to whether we might be able to grow this business faster or better with a partner, but it's really early. So by the way, we're probably not going to be able to answer many questions on that because of sort of confidentiality. And so then the final is our role in decarbonization, a final theme. Now of course, the video sort of set the table on that. But looking at Vector Symphony strategy, as it applies to Auckland's electricity network certainly underline that video. And so as our -- as New Zealand moves to lower carbon emissions, Transport and other industries will increasingly look to industry for their -- electricity for their energy needs. And it's the biggest area where the technology already exists to really decarbonize, so pretty important. And combined with renewable generation, these are key to New Zealand achieving our decarbonization commitments. Now the good news for Vector is this will result in a significant increase in demand for electricity. The bad news is that if that demand is unmanaged, for example, if electric vehicle charges all occur from 6 to 9 p.m. during the period of peak electricity demand, that will mean Vector has to build a lot more network to accommodate that demand, very expensive. There's -- is there a chart for daily demand here in that chart maybe? Anyway, if I'll describe what the chart says 6 to 9 p.m. is a lot more than 12 to 3 p.m. And so we have to smooth basically the peak. That's sort of what the chart says. So -- but instead, if the growth in electricity demand can be managed, that's what I mean by smooth the peak, we can spend a lot less and keep your electricity rates much lower. So Vector's been looking at this as a big focus area in our thinking for a number of years. And we've been working over the last, what, 3 to 4 years with Amazon Web Services and X, which is sort of Google X on innovative new tools to enable us to handle that demand better. And so through its leadership and relationships like these, Vector has a clear line of sight into what is needed to achieve this energy transition and can offer a perspective that others just don't have. But it's crucial that policy decisions to support the changes needed are made quickly so that the energy transition can be successfully managed. So just again, sort of normal words, we need the ability to spread out when people charge their EVs. You can plug them in, but we can't have everyone charging at 6 to 9. So we need to have that delayed from 9:00 p.m. to 6 a.m. That's sort of the key point there. So my final slide, just a quick overview of financial performance before I turn over to Simon. Vector has delivered a steady result in 2022 financial year, against a backdrop of inflationary pressure, sustained supply chain challenges and constant evolution of the impacts from the COVID-19 pandemic. The group recorded adjusted EBITDA of $510 million. This was down $3.5 million or 0.7% on last year's result and is in line with guidance provided at the half year result. Group net profit after tax was $160.9 million, which is $33.7 million lower than the prior year due to a $40.2 million noncash goodwill impairment of Vector's LPG business. This goodwill impairment recognizes the impact of higher Saudi Aramco contract price of LPG, higher emission trading costs and a weaker New Zealand dollar. Those all contributed to higher cost of gas, along with the impact of the increase in discount rates as at 30 June 2022. This was offset by higher capital contributions, lower interest costs and a gain from the sale of Vector's 50% shareholding in Treescape. Total capital expenditure for the year was $545.9 million. So that illustrates just how much money we're putting back into the network, and I mentioned about metering as well. That's an increase of $4.4 million or 0.8% on the prior period. The increase reflected continued investment in infrastructure to support Auckland's continued growth, higher network replacement expenditure and continued rollout of advanced meters in Australia and New Zealand and the rollout of 4G modem upgrades across the New Zealand advanced meter base. Operating cash flow was 3.9% higher at $518.8 million. This increase was largely due to the higher capital contributions received in the period. So that's it for the themes. Simon is going to do a big drill down, so in closing I thank my supportive great Board for all their help and assistance for the company, oversight leadership in 2022. I thank Simon and his executive team for their leadership and Vector staff for all they've done to look after their customers, including, as I noted right at the start, navigating through another year of disruption from COVID-19 lockdowns. I'll now hand over to Simon.

Thanks, Jonathan. Good afternoon, everyone. Look, I'd firstly like to also thank all our staff, field service providers of essential services for another full year of hard work, [indiscernible] delivering for our customers, again, with multiple disruptions due to COVID-19, not just lockdowns, but also the need to be flexible and adaptable as we saw absenteeism increase from infection and isolation protocols. Our people have shown amazing resilience and commitment to Vector and our customers in the time of great challenge and uncertainty. So I'll start by just by reflecting on what's different about Vector compared to about 100 years ago, then I'll move to a short summary of our financial performance then provide a few operational highlights as well as talk about some of the challenges we see ahead and how we're addressing these. Well a lot has changed since the Auckland Power Board was established 100 years ago. Today's vector serves more than 600,000 electricity connections on the network. And of course, when the AEPB was formed, it was really just this side of the harbor and not on the northern side. So we obviously supply everyone on the north now as well. We served 600,000 LPG bottle swaps around New Zealand in the last year. We operate nearly 2 million advanced meters across both New Zealand and Australia. We have an extensive fiberoptic network across the greater Auckland region, including our direct access into over 1,000 commercial buildings. And we run a number of other energy-related businesses across our portfolio, including solar installation, heating and ventilating. We're continuing to deploy large amounts of capital on our networks to enable and support Auckland's significant growth and transform the electricity network to facilitate a future where consumers increasingly demand and rely on cleaner, more reliable and affordable energy. Through Vector Technology Solutions, we're looking to sell solutions to help other companies on similar transformation journeys, both locally and offshore. As Jonathan mentioned, we're looking ahead to the next chapter of our metering growth through Vector Metering and the review that's currently underway. All these activities reflect the pace of change the energy sector is going through now and the agency to transform energy systems to address decarbonization. As you've seen on one of Jonathan's slides earlier, demand for electricity is going to increase, and we're still going to build some traditional network. But not only will we be still building power lines, cables, transformers, it'll be supplemented with new forms of what we call hardware technology, whether it's things like batteries or other new solutions that will evolve. But it's no longer realistic to just build those types of assets. We've got to build new digital infrastructure on top of the physical assets. So the whole system is more resilient in the face of climate change and can accommodate the increased demand for electricity that will come with decarbonization in the smartest possible and capital-efficient way. While much of what we do is unseen by customers, our solutions are crucial to the smooth running of consumers' lives at home and at work. Customers' needs are at the core of our symphony strategy. And this includes equitable access to the energy they need to power what is important to them. I'll just quickly move now on to some operational performance for the year. For the regulated electricity and gas networks, total net connections continue to grow, with electricity connections up 1.6% to 600,112 and gas connections up 1.3% to 117,995. The level of gross investment continues to be at high levels with capital expenditure for financial year '22 at $331.9 million, that's just for the regulated assets. Electricity volumes overall were up 0.4% at 8,361 gigawatt hours, with lower business volume offset by higher residential volume. For metering, we deployed and build 93,000 advanced meters in Australia and 18,000 in New Zealand with volumes impacted by COVID-19. So these are new, not the existing. Our advanced meter fleet now totals 1.98 million across New Zealand and Australia with nearly 490,000 meters now installed in Australia and growing as previously noted. We invested CapEx of $156.7 million or 3.9% lower than the prior year in the metering business. And we're currently on a replacement of what's known as 2G modems to 4G modems, it's the cellular modems that connect to the cellular networks, which the meters talk to. So we're on a replacement program of those 2G modems with currently around 200,000 meters completed to date. For gas trading, we saw a 7.4% decrease in 9KG LPG bottle swaps to 629,651 in the year. LPG volumes were down 1.6% to 44,330 tons with bulk volumes in cylinder volumes down slightly. So I'll now share some achievements in relation to our carbon emissions. We achieved a 16.5% reduction in our carbon footprint across Scope 1, 2 and 3 from our FY '20 baseline. We also developed a tool that helps us identify and prioritize areas where we can focus on where to reduce our carbon emissions. We call this a carbon abatement cost curve. It sets out the causes of our carbon emissions and what it would cost us or save us to remove these emissions based on the alternative, which is to pay to offset them. This is a very important work lead to two initiatives this year where we've adapted our business processes to save money and reduce submissions whilst maintaining our service delivery standards. One of these initiatives involves identifying electricity maintenance jobs that can be completed using a transformer instead of a diesel generator to keep the power on for customers while we do the work. And we ran a successful trial of this program and now operationalizing it into our maintenance programs. There were hundreds of thousands of tons of carbon saved as a result of that program. A second initiative was around increasing the frequency of inspections on our gas network. By increasing the inspection frequency, we can identify and fix gas leaks more quickly. The carbon cost abatement curve was particularly important here in identifying the right balance between the cost of increasing the inspection frequency against the higher cost of the gas leaks going undetected for longer. So this abatement curve will help us reach our science-based target of 53.5% reduction in Scope 1 and 2 emissions by 2030. We've also published, as Jonathan mentioned, our TCFD report, which sets out a big picture of where the risks and opportunities are for our portfolio of energy businesses and our overall role in delivering clean, reliable and affordable energy solutions for customers. You will find this on our website. And I'll now talk about a few other highlights from the year. So earlier this year, we announced a strategic review of our metering business. This comes at a time for the business we were on track with a major modem replacement in New Zealand to future proof our fleet, and the trajectory for the business is strong as Smart Metering has become a critical part of transformation and digitalization of the energy sector around the world. We expect to announce the outcome of the strategic review by the end of this calendar year. Vector Technology Solutions continues to explore the commercial opportunities for digital solutions that we've codeveloped in our strategic alliance with Amazon Web Services and other global partners. We are already providing services to five electricity distribution businesses across New Zealand. We have several encouraging offshore leads and more local opportunities to explore, and we're getting strong validation from customers that what we are offering helps them adjust their key challenges. We're continuing our strategic collaboration with X, the Moonshot factory, formerly known as Google X, which is developing technology and tools to enable the virtualization of the energy system and assist in managing the complexities that will arise both in real time and longer-term planning. These complexities largely arise. If we go back 100 years, where the energy was really flowing from one direction to multiple directions now as more and more consumers put more devices solutions in their homes, whether it's solar battery or electric vehicle charging. So the complexities have gone up exponentially. So some of the challenges I'll talk to quickly that we're seeing in the regulatory landscape and how we are engaging with the policymakers to find solutions I'll just quickly touch on. The Commerce Commission is reviewing the input methodologies for the first time since 2016. These are the key regulatory rules that underpin the way energy networks are regulated and the large-scale investment needed to enable decarbonization. The key issues fall around incentives to invest cash flow profile, the ability to finance and how these align with shareholder expectations and others such as credit rating agencies. The slide here shows -- or gives you an idea of the scale of investment already underway and what it's going to look like into the future. So the orange bars there are a combination of what's known as the Non-exempt EDBs or electricity distribution. The blue are Transpower and the green are Vector. And it's one of those things that's important to point out that as you see with Vector, we spend over the next 10 years, roughly around the same amount as Transpower are predicting, and many people think that Transpower are the big investor in the sector. So when you see what's happening in the electric distribution business, it gives some magnitude of the amount of investment that's going to be required in the electricity distribution sector to start facilitating and enabling this decarbonization. So we are advocating that the review needs to focus squarely on the implications of the government's decarbonization goals for the sector, so these are not accounted for in the current regime. It's a critical time to ensure these settings are fit for purpose and properly support the transition to a net zero economy. We believe the review should be approached with a significantly higher level of engagement between the Commerce Commission and the industry, and we look forward to participating fully. So the Commerce Commission has also set the next default price path, quality path for gas pipeline businesses for the 4 years commencing October 1, 2022. So this is the price path that is set for the next 4 years that we can charge to customers. The new DPP allows for a moderate acceleration of asset depreciation. Our view, this is a step in the right direction, is aligned with clear and consistent direction from government and the role of gas in New Zealand by 2050. We've been working constructively with the industry, Commerce Commission and the Gas Industry company and the government, both individually as part of the Gas Infrastructure Group. To seek a transition plan that works for consumers, government and infrastructure owners as well as recognizing the option for renewable gas. More broadly, the government is looking to develop a national energy strategy. The current regulatory settings and structure of the industry has largely been the same for over 20 years. This now has to be questioned as to whether it is appropriate for the future given the challenges of decarbonization, new technologies and customer expectations that have not been considered in past settings. So we call on policymakers to consider the long-term interest of consumers in terms of an overall household energy wallet rather than just looking individually at the cost of electricity or gas for specific services such as providing the network. In many instances, electrification may lead to overall savings for households. A good example of this is the potential for EVs to reduce household spending on petrol costs by more than they increase spending on electricity, including the network investment needed to meet new demand, which consumers pay through electricity bills. We will actively engage with government as new policy is developed as we believe we bring a unique perspective given our global alliances with leading technology companies as well as proven experience in trialing, analyzing and operating new technology, how it impacts our ability to deliver to customers' energy for their daily lives. A final comment on regulatory matters, as Jonathan mentioned, we're pleased to have reached a settlement agreement with the Commerce Commission for historic breaches of network quality. We remain committed to complying with our regulatory quality limits and have put significant effort and investment over many years into ensuring the network is safe, reliable and resilient, whilst also enough flexibility to meet the challenges of Auckland growth and supporting major changes such as electrification of transport. We maintained high levels of work even over the last few years through COVID-19 lockdowns and other disruptions. I just thought it was worth sharing a few numbers from the last year to put this volume of work into perspective. We completed more than 500 complex customer requested connection projects. So these are large complex connections, expenditure $26.3 million. In addition, we also completed almost 4,000 noncomplex new connection requests with expenditure of $86 million. We did 533,205 preventive maintenance activities to maintain the reliability of the network at a total spend of $18.2 million. Put that in context, our network, electricity network, if it was laid end-to-end with bridge from Auckland to London and back a little bit of the way. So it's a significant length of network to maintain and manage. For corrective maintenance, we spent $57.6 million. And for reactive maintenance, we spent $29.7 million responding to approximately 33,000 unplanned events driven by weather, [ cast have imposed ] and other issues that we have to deal with on a day-to-day basis. So all these numbers illustrate how we've maintained productivity despite COVID-19, and we're pleased to have seen full compliance through this time with COVID to our regulatory quality limits in the 2 years since these prior breaches occurred. So in closing, I'll talk briefly about the year ahead. Vector is well positioned to enable decarbonization guided by our vision, which is to create a new energy future. Despite the challenges of climate change today, our symphony strategy helps us seize the opportunities of a decarbonized future by creating a decentralized energy system that operates future -- sorry, opens future possibilities, delivering decarbonization consistent with safe, reliable and affordable energy solutions. The wider industry has never seen the level of change that is before us or the crucial nature of getting this transition right as we see more and more consumer requirements to verge on to requiring electricity. Put that in context, if we think of the migration of everyone to electric vehicles just puts the criticality of electricity up even greater. So collaboration across the industry, government and regulators is vital as is learning from overseas counterparts. We will continue to participate fully and advocate for customers. So we look forward to the next chapter for Vector Metering with our work to date recognized by global institutions, including AWS. We expect to announce an outcome by the end of calendar year. We intend to provide guidance to the market at our financial year '23 interim results. And I'd like to thank Jonathan and the rest of the Board for their leadership and guidance over the past year. And of course, thanks once again to Vector staff and our service contractors for all the work they've done over the last challenging year.

Thank you, Simon. Now back to sort of the business of the meeting. The notice of the meeting lists the items to be considered. An ordinary resolution requires a simple majority of valid votes, and the special resolution must be approved by a majority of 75% valid votes. Don't think we have a special resolution today. A reminder for those eligible to vote, you are able to do so at any time as the voting is now open. For transparency, you'll be shown the number of discretionary proxies held by me as Chair of the meeting or in my own name. I declared that it is my intention to vote the discretionary proxies in favor of the resolutions. During discussion of the agenda items, I'll first call on questions from the room followed by questions online. I again ask that you can find your questions and any comments directly to matters that we're looking at before the meeting and to Vector business. Only questions related to the specific agenda item will be addressed as part of that discussion. We can defer others if they're not on the question. If, for example, a general question is asked during the agenda item during one of the director reelection items, it'll be held until the appropriate item on the agenda, like as an example. We are naturally happy to hear your views on how we operate our portfolio of businesses. We get great feedback from AGMs like this on areas that we're doing well and areas that we need to improve, and we're also happy to answer questions about operational policy and practice. As mentioned earlier, if you have a personal matter relating to Vector services, our customer service representatives are available here in the room or can be contacted at 0508 Vector or [email protected]. Only shareholders registered at 5:00 p.m. on Monday, September 26, 2022, or their proxies or representatives may vote. If you become a shareholder since that date, you cannot vote at this meeting, but we welcome your attendance and welcome next year when you can vote. So now to the agenda items. First agenda item is to invite questions for us -- for our reports on the financial year ended 30 June 2022, contained in our annual report. If you have a question on like Simon's last slide on future performance, we may wait for general business to take that. So let's think sort of thing back right now. So our annual report was published online on the 26th of August 2022. Hard copy reports were sent to all shareholders who requested one. We may have a few extra ones here today as well. Questions on this topic also may be put directly to our external auditors, KPMG, but try to define those as an audit question rather than a general question about business. So over to you all. Are there any questions in respect to the annual report, the financial statements and our audit report for the year ended June 30, 2022? First in the room.

Coralie Van Camp, shareholder. Now first, I'm going to start with something positive. I heard through the grapevine before coming to this meeting that this Board was very focused on maintenance of our electricity network and that gladens my heart because that, to me, is what Vector's core business is. All I want from Vector is that you supply me with electricity through my network, to my home when I need it. Now coming to your balance sheet, I'm not so positive. Your net profit was only $160.9 million, and you paid out $169.1 million in dividends, which was more than your earnings. Your total equity is $2.430 billion, of which $1.262 billion is intangible assets. Your net debt is $3.296 billion, although it sees your total liabilities of $4.382 billion. I just feel that your debt is too high, that the payment of dividends on the basis of paying out more than your net profit is unsustainable. You may have had some difficulty. This has gone on for years and way before most of you ever came on to the Board. This is a trend with Vector and it's not as bad in other companies that I invest in. This is the worst balance sheet of the companies that I invest in. Now what I'm really hoping is that you can give me an assurance that you're going to improve this.

We're working very hard and sensitive to our cash flow. So look, if I step back, what you get with the Vector, you look at the income statement, and we have a solid income statement with the headwind that I mentioned on interest rates going down, which are now reversing, okay? So income statement. The issue is when you get to the cash flow statement, and you have pointed out correctly that we -- with our CapEx -- and you had mentioned it just in -- with net income. But with the CapEx that we have, over $500 million of CapEx to improve maintenance and meet Auckland's growth needs plus our metering business, we've taken on more debt over the past year. And that cannot -- you can't just take on more debt as a percentage of your total capital year in, year out. So we're looking certainly at approaches, think of the Vector Metering review as one of the possible approaches. Also, some of our new businesses are very light on CapEx. So that would be a second attractive lever that we're pulling. But we do have to reverse increases in leverage year in, year out. Our leverage just hasn't though gone up. It has gone up, come down, bounced around, gone up a little bit this year again. But I take your point on Board.

This is a trend for years passed, and I was really hoping with this new Board, most of you are new that, that would be -- that I'd see a turnaround. So I'm really looking forward to seeing your balance sheet change.

Absolutely, absolutely. But what I will point out, when you say it's a trend for years. I mean, there was a time when I was on the board. And for example, we sold our -- the big pipeline guest pipeline from Taranaki to Auckland. Our leverage went down 15%, and that would have been 7 years ago. So I mean it's not a 10-year trend. But I'd say for the last 5 years, because of our network CapEx and metering, our leverage has gone up. Thank you for the point. Okay. Any other questions with -- could you raise your hand if you'd like a question?

[ Alex Tremisin ] . Mine's aimed at Simon. Simon, can you tell me roughly how many parking tickets Vector vehicles have got in the last 12 months for parking on the footpaths? You may laugh folks, but I'm the one that's in danger when I have to go on to the road. I've had three mobility scooters written off because I got hit because the Vector vehicle was blocking the footpath totally, and I was on my way to cancer treatment.

I obviously don't know those number, and it's something that we [Technical Difficulty].

Yes, I didn't expect you to actually know it Simon because it's probably in the hundreds.

Yes. Look, and it's something that we can definitely raise with them and express the concerns. It is surprising to hear that they're parking on the footpaths without the necessary traffic management and assistance for people such as yourselves because that's typically how the site should be set up to ensure that's safe for all residential consumers and people wanting to use the footpaths to get by any work site safely.

Yes. These weren't work sites. These are a guy that parks on the street for the weekend. I can only suspect that he's on call.

Yes. I don't know.

And he parks his Vector vehicle on the footpath and gets very abusive when he is asked to move that.

Well, perhaps afterwards, we could get the specific details. Specifically where you are, and we can then actually have that conversation with the person that's involved.

Yes, I would appreciate that. And the second question, when can Vector if they don't already guarantee residents like myself payout 24/7, because I'm going on a machine as of tomorrow called CPAP. I don't know whether you know what a CPAP is, but it helps me breath. Because I now have a health condition, I'm actually struggling at the moment to breathe.

Sure. And look, the reality is that we can't guarantee 100% reliability. What I would suggest is that because of the issue you raised that how the responsibility for this falls and the energy as you need to identify with your retailer is someone that's got that kind of dependency. And then off the back of that, then they have a process to identify whether or not if there's an outage or if there's going to be planned outages, how your circumstances get taken into account. The other thing, obviously, which we would recommend to most people, if it's appropriate is that you get what's known as standby power packs that can actually mean that your device can actually last for a period of time by which time, most of the time the network is up and running again. Of course, it very much depends on where you live because an overhead network versus an underground network is quite a different repair time profile.

Which is the better one?

Well, it depends. I mean an underground network, you typically probably don't find that you get as many outages. But if you do have an outage, it's a lot longer to repair then an overhead network.

We do have an underground network and ours is 60 years old, it might surprise people. And it's underground and the house behind us is 33 years old and is underground. That's why ours is... But I'm apparently going to need it 3 minutes for [ the repair ] and I won't be at any more meetings, unless they carry me in a coffin. That's how serious my illness is.

So we'll talk to the customer service rep and do whatever we can through your retailer to get you on the special list. But just remember, there are outages that occur.

[indiscernible] In the last six months. My wind in the hospital what I thought was a heart attack, but it's cancer in both lungs.

I'm so sorry.

As the thing goes [indiscernible] and I am 5 years past my use by [indiscernible]. So I'm not particularly worried, but my grandkids are.

Other questions? Yes. Could you want to wait for the mic, so everyone can hear you.

I'm a cloud shareholder. My question is directed to Simon MacKenzie dealing with the energy future. What is his opinion on hydrogen?

Simon, future of hydrogen?

I think one of the big challenges that this is my personal perspective, is that to produce hydrogen currently is extremely expensive. Estimates would put it against a gas equivalent at somewhere between 12x the cost of gas as it currently sits at the moment. I think in the New Zealand context with hydrogen, one of the big challenges will be the cost and where would that hydrogen be used? How do you actually transport it? What mode would it actually serve as a purpose? I mean it can be blended into gas streams, but typically only up to about 20% of the gas stream can take hydrogen. After that, you basically can't operate. I think that there is clearly the opportunity for hydrogen and what you'd say is the heavy transport kind of solution rather than electric for heavy transport. And lastly, I guess, just as an analogy around whether or not we can export hydrogen, I think we only have to look at what happened in the oil and gas market in New Zealand and recognize that we are isolated from global markets and producing hydrogen, which we know is being looked at quite significantly up in northern parts of Australia where solar panels can be deployed in large scale, hydrolyzed and then shipped into Asian markets. Obviously, they just benefit from the -- from location.

The reason for my question on this, Simon, there is a transport company, a very large one, [indiscernible]. Their headquarters is in [ Macau ], which is in transport. They're very large in that area, right [indiscernible] all the trucks are powered with diesel. Now they've been working and converting from diesel to hydrogen and they've been very successful. The last report was 2, 3 months ago, they have been congratulated from other sources outside New Zealand on the work that they've done. So it shows that can be done, and they're also -- they're looking at exporting hydrogen, which could mean a big industry for New Zealand.

Yes. And I think definitely, as I said, I think heavy transport is clearly on the area of opportunity. At the end of the day, it's still going to come down to what is the cost to be able to produce hydrogen. And currently, that's pretty high compared to other fuel sources. And then the other aspect is from an export perspective, I think we've just got to look globally and say, if someone's developing hydrogen in New Zealand, you've still got to transport it to a market. And there's no reason in those proximity markets, like, for example, Asia, they're also looking to build hydrogen generation plants. So I think that, that is what is the cost advantage when the technology is pretty similar. It's the input cost, which is fundamentally what is the cost of energy? And if it's solar, then that's going to be pretty challenging for New Zealand to compete against Solar Ladder, for example, Northern Australia.

[Technical Difficulty]

Yes. And I think that there's always going to be movements with regards to technology gains, yes.

Okay. Now any other questions on the annual financial statements? Yes.

I hope this is the appropriate question.

So we can always do it later. It's going to be appropriate at some point.

Okay. You said you needed a lot of money to invest in Australia, the metering system and all that?

So the way that metering works is, if you just think of it on a one-by-one metering, it costs you a lot to install a meter. And then you have a contract for, say, 15 years where you get paid every year with no service. I mean, minimal service required. So the metering is a big upfront spend and then very reliable annual revenue. It's almost like when you install a security system in your house, if anyone's done that, the company that does it spends a lot of money installing it but then you have to sign like a multiyear contract. It's through utilities, metering runs on the same concept. So when we're starting in Australia, we now are creating a metering base that's generating a reasonable amount of cash in Australia, but our installation rate is still so high that the cash flow is still negative for metering in Australia. Does that make sense?

Also you have done your due diligence because if you look at the past history, here in New Zealand and set here a line, [indiscernible] I've forgotten the name and then you had warehouse all they invested in Australia, and then they came back with the high ends down. What makes you so sure that it is the right investment because we got enough to do here with overhead power lines and all that. So you think you're making the right investment in Australia?

We're hitting all our milestones. And like if I were to compare it to the warehouse, for example, so warehouse is dependent on competition with other department stores there, and they were never able to create sort of a meaningful market share on metering. We've hit our milestones in terms of the installation of a metering base. Once you have the base, you actually have some reliable revenue going forward. Like we could stop installation of meters today and a very good business in Australia and a reasonably certain return, if that makes sense. And so it's a little different. So look, one of our core competencies is metering, and we have a great Australia team. The Board is very cognizant of the risks for going outside New Zealand. And as you've noted, there is a long list of companies that have thought they did great in New Zealand, and we can just reapply the business model to Australia, and it hasn't gone well. There are also New Zealand companies that have done quite well in Australia. In fact, it's driven most of their value. So it's not 100% failure, and we are confident we're hitting our milestones. Is that okay?

Okay. To date, have you come in plus or you are in minus?

In cash flow or earnings?

Yes, in earnings.

Yes. Earnings, I think, we're into the black in metering in Australia. But we're hitting our miles. As we grow, we knew we were going to lose cash flow. And it's on an expected basis. And actually, the more we grow faster in metering, the more contracts we get, the more cash flow we get because of the installation problem.

But I don't mind investing obviously as well that's fair enough, but we got enough to do here rather than taking a chance and investing all that heavy some of money. I'll give you the fourth example. A whole [indiscernible] in SkyCity. And SkyCity got Adelaide casino, which is also going in loss because this year, they are not paying dividend. So all I ask you to -- do you have due diligence [Technical Difficulty] ?

Yes. Thank you. And it's a point that the Board is very sensitive to, the risks of investing in other places. Any other questions from the floor? I don't think I see -- is there another question that I missed one?

Are you prepared in the future to do anything for pensioners over the last 2 years, we have not had an increase. We're on a fixed income. I'd like anyone else on this Board, in this room that's not over 65 to say they can honestly live on $300 a week, when your rate has come in at $4,000.

Yes. So that was the reason.

[indiscernible].

Yeah. So that was the reason, we're very sensitive to what we pay Entrust and then how Entrust -- that's Entrust decision then, but what then happens to our beneficiaries, that's 75% of our company. In my presentation, the first slide that I put up was the dividend slide, and that is the $300. And what I noted is the big headwind we have is that as interest rates have come down, the biggest part of our business, regulated networks, we've only earned about 60% of what we were able to earn 6 years ago. Now that is reversing now because of higher interest rates, unfortunately, the inflation thing, the silver lining is, for us, the higher interest rates allow us to earn more. But that is not coming through until 2024. By the way, Coralie, on your question, we will get more earnings in 2024 because of the way the regulatory system works. So it is the top of our mind, and it's -- just in the last 2 days, the Board's been meeting. A big focus has been how do we improve our cash flow and our dividend. So thank you for bringing that up.

Yes, the other two questions. One of them is we've not got a meter in our house. I mean one of these fancy meters, nor has and the house be [indiscernible]. And I know that because I own about [ 3 houses ]. We know we are planning on covering all of New Zealand before we wonder about or worry about those fellows across the Dutch.

We don't have all the meters in New Zealand. So we have to compete through all the gentailers to install meters for your house. So your gentailer determines who -- what type of meter you have in your house. And we try to get contracts sometimes successful, sometimes unsuccessful.

What's the gentailer?

Sorry, that's contact Mercury. Are you Mercury?

Yes.

So Mercury will make that decision. I apologize for the lingo.

[ Ring ] mercury and through the area. Because I've got nothing else to do all day.

Maybe you'll generate another sale for Vector by doing that. Another smart meter sales.

Anyhow, I forgotten what the other thing was.

We can come later in the meeting, and this is just the financial statements, so it's subset of questions.

I've spoken to a couple of the Board members. I don't know Meridian or something, because putting in charging points for EVs. They forget, this is an EV. It's what you guys call it, I call it from my ability [indiscernible] get away from the person that I suffer an allergy to a case. Would you consider putting charge points in the malls? I think there's about six of them in Auckland.

Simon, do you want to try -- we could leave it till the end when we hit all our general pieces.

I think what we've found with that type of solution, typically, the mall owners are the parties that control that space and look to be the -- open up the opportunity for people to put them in. We've seen public vehicle charging stations put in the perimeters of malls and supermarkets. It's probably a conversation that should be had with the likes of the mall owners about what are they going to put in their centers to enable access for the likes of their self. We typically wouldn't do that because we don't run network into premises such as malls or anything else usually stops out on the road and then just a supply into the premise itself.

Yes, because Dan, and I think that's the mall and [indiscernible], I forget what it's called. There is a charging point. Bay [indiscernible] has charging points for mobility scooters. And they had three different charge fleets because there's three different plug-in points on scooters or designed. Does the [indiscernible] but I just wondered because that would assist the disabled and the elderly. And I think you should cut off the [ PR to walk ] and transport because they don't like disabled people.

Somewhat controversial Question, this is annual or financial statements. Do you have a question?

No, I just say is this operation [indiscernible].

Yes. Yes, it is. We straight into operational. Thank you so much for keeping our focus on the agenda. Any other questions before we go online? We want to hear from the online folks. They may have questions on annual financial statements as well. One other question?

[indiscernible]. I was just wondering how many people are actually watching us online?

30. Okay. Maybe with that question, that's a great sort of lead into are there any questions online from our 30 participants? No. Okay. So no final questions on the financial statements from the floor. I think we're okay there. So now we're going to move to election and reelection of directors. And that's our second item of business. The biographies of each Director seeking election or reelection are available on Page 9 on the notice of meeting. And if you have questions online, remember, you can post them at any time. So the first Director to be considered is Dr. Paul Hutchison. And in accordance with NZX Listing Rule 2.7.1, Paul Hutchison retires having been appointed by the Board late in 2021 and being eligible, offers himself for election. I now put the resolution to elect Paul Hutchison. And as you're looking at the resolution, I'd like to invite Paul to address the meeting. Paul?

Thank you, Mr. Chairman. Good afternoon, ladies and gentlemen, and thank you very much for the opportunity to speak briefly as I seek to be elected to the Vector Board as a Non-independent Director. From the outset, I want to emphasize my support and enthusiasm for Vector as it leads the South Pacific, New Zealand and beyond in creating a new energy future. As the annual report highlights climate change, the release of New Zealand's first emissions reduction plan and rapidly increasing customer expectations together with a highlighted focus on affordability point to a future that must be different from today. I fully support the fact that Vector has focused on making changes through its symphony strategy. The strategy has the customer at the center and embraces decarbonization, innovation and technology. By way of background, I was privileged to join the Vector Board at the end of last year. I was first elected to Entrust the majority shareholder of Vector in 2015. Prior to that, I had a wide experience as a medical specialist and in public life serving as the New Zealand Parliament's Health Select Committee Chairman for 6 years and in a variety of businesses. Governance experience includes being a former member of the New Zealand Medical Council, Director of a number of smaller companies and a member of the Institute of Directors. I have a profound interest in the transformational power of science, of technology and innovation and its links to higher standards of living, economic growth and protecting our environment. Vector has to date been a leader in transforming its own business, grounded data and insights and smartly using technology to benefit customers and to support decarbonization goals. I see my role as continuing to support this focus, challenging and questioning where appropriate. As one of five trustees of Entrust, we are committed to do everything possible to increase and protect your dividend, ensure reliable and affordable power supply as a core activity, transition to a low carbon energy future, invest in innovation and digital solutions and to continue undergrounding power lines where appropriate. The optimal future of Auckland is very important to me as it is to all of us in this room. As a Vector Director, I want to ensure there is a constructive relationship with the Vector Board and Management with appropriate challenge and questioning where necessary. As a trustee of Entrust, I understand that the success of Vector means success of Entrust and of all shareholders. I believe and trust in Vector share similar goals and at the heart of that is sustainable earnings for the benefit of all shareholders. To back this, my role as a Trustee Director will see me championing Vector, maintaining the highest business standards, Vector advocating best practice regulatory reforms and embracing new opportunities such as the review of Smart Metering business, which is exploring opportunities to accelerate growth. I guess from a professional and a personal point of view as a medical practitioner, I've been very encouraged the way Vector proactively manages the health, safety, mental health and well-being of Vector's people. Their best possible health is vital to the success of the company. Finally, it's a huge privilege to sit on the Vector Board with a group of outstanding professional, independent directors and a management team that is truly leading New Zealand's energy transformation. Thank you very much for the opportunity to serve on the Vector Board. I greatly appreciate your support. Thank you.

Thank you, Paul. Now to remind shareholders, you may vote at any time, and there will be a final opportunity to cast your votes later in the meeting when all resolutions have been moved and discussed. So are there any discussion or questions? Okay, yes. Let's say, you first, then you. Yes, is that okay? And you can wait for the mic. And you can direct either the question to me or -- we'll see what the question is, and then we'll see who.

[indiscernible] speaking. With this form, is there any significance in the different colors of four and five here? And also, why is one Director being reelected for 1 year and the others over no difference compared to [indiscernible].

On the colors? John, I'm trying to think of the colors that you're referring to. The significance of the colors.

There shouldn't be any significance in the color.

It's just some ordinary color and four and five are in reddish color.

No. The ordinary resolutions are all listed on Page 2 and 3.

I'm looking at voting form.

No, there should be no significance.

We are okay on the color question?

Yes. Thanks.

Okay. Hold fire for just like 2 minutes on the 1-year thing. The 1 year is me, and I'll explain it in my talk. So it's a great setup for my talk. There was another question.

[indiscernible] Hutchison, you were appointed last year, you said? Okay. The record show that you attended one meeting. Now, is that correct?

He is on the meeting attendance schedule.

If there were more than one meeting.

Paul has attended every meeting since he's become a Director.

For sure, okay. Going through, it said attendance, it was one, which might be I'm wrong.

It could be if it's referring to a committee, directors aren't on all the committees. So sometimes it just shows up one-to-one committee meeting as an observer. Yes. Oh my gosh, this is the most questions we've had on any Director election, Paul, you should feel so honored.

I have a question for all directors intending to seek reelection. Two questions. what specific skillset, does each director bring to balance the Board's current skillset? Number two, what management subcommittee will each Director contribute to, for example, in ESG audit and so on and so forth?

Could I just try to do that to go through every Director, it's going to be a little time consuming if I just start at the high principal level. And I'm happy to go into detail like after the meeting for any specific Director. So what we did this past year is we got an independent consulting firm called Propero who came in and looked at all our skills and compared those to the skills that we wanted to have in an ideal world. You always have to make compromises, but so we need financial literacy, we need an understanding of the New Zealand regulatory environment. We needed some understanding the Australia regulatory environment. It is really handy to have at least one Director with an engineering sort of an electrical engineering background. And so to give just a couple of examples on that, like Paula Rebstock was former Head of Commerce Commission and is, I mean, Paula, just complementing you, it's so amazing when we have to approach the Commerce Commission, Electricity Authority and thinking how they would look at stuff. And it has helped us to fashion better responses to very important regulators. I mean, the Commerce Commission with the drop in the regulated interest rate has dropped our earnings 40%. Another example, Bruce Turner has worked for Vector, what, 30, 40 years ago. And as part of the energy security sort of committee in New Zealand for many years and just knows the electrical network really well. So those would be two examples of how we look at a skills matrix what do we ideally need on the Board. And we want like complementary skills. And then what do we actually have? Alastair Bell is another example, great accounting background for -- and he'd be on the accounting and Risk Committee. So and then we divide it up and committees based on our skills as well.

Thank you for that. But I think it would be advantageous for us to assess for each of the directors, if they're going to be a director, they have to stand up for themselves and sell themselves to us.

And each director -- what we didn't do with the directors and we could think about this network. We certainly beefed up in our annual report our skills matrix, our description of what we want. So if you look this year in the annual report, we didn't have it last year is the skills matrix for the directors. So anticipating your question already in this year's annual report. Each Director talks about their background. But what I would really need to do is share to address your question well, is to talk about the skills on the board, what we have and how different directors contribute to them, and that just might be a little bit time-consuming right now, but I'm happy to talk after the meeting. Is that okay? Any other questions for Paul? So I think we're -- thank you on questions for Paul.

[indiscernible], who happens to be here. He only attended one meeting. Sorry, he only attended one meeting because he stepped off the Board. That was the one meeting. So it was just a line up from Paul. I know Paul, had perfect attendance.

Okay. So I'm going for election, and I'll explain the 1-year thing. And -- but sort of for good corporate governance, I'm now going to turn over to the Deputy Chair, Paula Rebstock to take us through and to lead the meeting while I'm asking for election. So Paula?

[Foreign Language] good afternoon, everyone. Its a great pleasure to be here with you and to introduce this next item on the agenda. In accordance with NZX Listing Rule 2.7.1. Jonathan Mason retires by rotation and being eligible offers himself for reelection for a term of 1 year. I now put the resolution to reelect Jonathan Mason. I'd also now like to invite Jonathan back to the microphone to address the meeting. And hopefully, we'll answer one of the questions that was put. Thank you.

Sorry, I'm back. And I'm going to be really brief this time. So I'm Jonathan Mason, Independent Director and Chair for Vector, and I've been on the Vector Board for the last 9.5 years. And before that, I worked -- I had a career working as a Chief Financial Officer for publicly listed companies, including Fonterra, Carter Holt Harvey, and I'm also currently a Director at Air New Zealand, Zespri, and Westpac. So American started as American citizen moved here 20 years ago and loved it so much. My wife is American too, but we moved here. Now I'm going to anticipate this question again. I'm going to throw a couple of ad lib items into my -- okay, sorry, I mean it's going to be brief. I have a finance background. So I was as Chair of the Audit Committee, analyzed the financial statements to make sure that they were accurate. So the financial statements you get, I worked on them, supporting management to look at their accurate. And at places like Fonterra and International Paper where I worked huge capital budgets, just like Vector. So I had a background in analyzing capital investments to try to figure out whether they're going to work or not, what are the risks. So also risk management. Don't want to get into things that hurt Vector's reputation or hurt our profit or have unanticipated consequences. So on the risk management committee have worked over the last 9 to 10 years really thinking about its audit and risk or risk, Bruce shares it, but really looked -- helped look at the committee think about risk. So that's what I would bring to the Board. So I'm going to skip over the net section because I sort of ad lib through the last section and just go back to now for the 1-year issue. Term limits I think we have really a set of capable directors. It's not good to stay on boards forever. I've been here 9.5 years. And it made sense, like we talked as a Board, talked with Entrust and it made sense for 10.5 years. But then other people take over and change is good, and I have 10 years of history have contributed. And I just want to say I have been felt so privileged working for you. Not everything has gone perfectly. I wish our financials were a little better, and we're working to make them better. But working for beneficiaries, living in Remuera. So I'm a beneficiary to. A privilege working for you over the last 9 years, and I hope you'll support me for reelection for 1 more year. Thank you.

Okay. Thank you, Jonathan. Just to remind shareholders, you may vote at any time, and there will be a final opportunity to cast your votes later in the meeting when all resolutions have been moved and discussed. But first, I'd like to ask if there are any -- is there any discussion on this resolution to reappoint Jonathan for 1 year? It doesn't appear to be any questions in the room. I'll now ask if there are any questions online with respect to this resolution. And I can see the two heads nodding that are monitoring that. So thank you for that. And then since there appears to be no further discussion, on this resolution, you can now see the proxy voting position for this resolution on the screen. So thank you for that, and I'll hand back to Jonathan. Thanks.

So again, sorry to be repetitive, but to remind everyone, you may vote at any time, final opportunity to cast your votes later in the meeting when all resolutions have been moved. And so going to the next resolution, we're going to do sort of a swap. And so the next resolution is for Paula and the proxy voting position will be stated. And I think I'll turn it over -- do I have to reissue their listing rules out? We do this every time, NZX listening rule 2.7.1, Paula Rebstock retires by rotation and being eligible offers herself for reelection. Now put the resolution to reelect Paula and would like Paula to address the meeting. Paula?

Thank you again for just giving me a brief opportunity to give you some background on my possible reelection. First of all, I just want to acknowledge how fantastic it is to see a number of you again in person. I was here -- I've been here for the last few years, but it is nice to be back in person. I want to add my congratulations to Vector in their ability to continue to provide customers exemplary service when and where it was required throughout the series of COVID lockdowns that impacted our city. I joined the Vector Board 3 years ago in April of 2019, and I'm pleased today to have the opportunity to now seek your support for my reelection as an independent director. The last 3 years has been filled with a number of opportunities and challenges. You've heard a great deal today about the important matter of addressing the quality breaches that Vector had with the Commerce Commission. And when I came on the Board, that issue was just starting to be addressed. And as with my colleagues, I'm thrilled to see that having been addressed. And for 2 years now, we have more than met the expectations on these critical performance measures. Now this is important because it allows us to resolve a problem we have with the commission that's for certain. But what really matters about it and why the commission cares about it is because it adversely affects our customers if we don't provide the services at the quality that people in the city deserve. So it is really with great delight that we see those matters having been addressed and not just addressed in a one-off way, but in a way that can be sustained, and we can ensure that people in the city get the services they deserve and they demand and not just any service, but the best this country has to offer. Globally, the energy sector is facing levels of change, not seen by this industry in decades, if ever. Importantly, Vector continues to work towards its vision of creating a new energy future through the Symphony strategy. With the customer at the center of the strategy, Vector has, for a number of years, been working to meet the challenges and opportunities of decarbonizing New Zealand's economy. The partnerships with Amazon Web Services and X, formerly Google X are tangible examples of the sector leadership that Vector plays, and how these strategic collaborations can help to solve today's challenges in ways that are very different to the past. The company is well positioned to cross its regulated businesses, Smart Meterings, Cyber and Vector Technology Solutions. The Board has worked hard with management to find a strategy that not only delivers services today, but ensures that we're able to deliver the services you all deserve in the future. Over these past 3 years, I've served on the full range of Board committees. The Audit and Finance Committee, the Risk Committee, the Remuneration Committee, the Nominations Committee, and I'm currently chairing the People and Rem Committee. And you all know how important this particular committee is at this time. It's always important to look after your people because at the end of the day, that's all this business is, is people. But it's particularly challenging right now. Every business, you'll be shareholders in a lot of businesses. You'll hear it at every shareholders' meeting. It is very tough right now to recruit, retain and properly reward people. And this subcommittee, I have the pleasure of chairing it, and we're very focused on the well-being of our staff. I believe that my experience with the public and private sector continues to be relevant to the effective governance and commercial success of Vector. I am an economist by training, and I've worked with the energy sector in various roles for 15 years. My business and governance experience spans the financial markets, infrastructure, regulatory and health sectors. In particular, I've been fortunate to be involved in a number of large-scale digital transformations aimed at meeting the rapidly shifting consumer needs and expectations. My other current roles include being a Director of AIA, OneRail and Sealink. I'm also Chair of Kiwi Group Holdings and Asia Pacific health care group. I won't go over my past roles. They are in the material that's been provided. In conclusion, I'd like to welcome your support for my reelection as an Independent Director. If reelected, I look forward to working with my fellow directors and the senior leadership team to continue to deliver value and sustained investment and returns for you, our shareholders. So thank you.

Thank you, Paula. Is there any discussion or questions for me or the Board or Paula? I don't think I see any. So there's the proxy voting position for this resolution should be shown on the screen, sorry. And now on to Alastair Bell. Sorry to repeat this in accordance with NZX Listing Rule 2.7.1 Alastair Bell, retires by rotation and being eligible offers himself reelection I now put the resolution to reelect Alastair Bell, and I'd like to invite Alastair to address the meeting.

Thank you, Mr. Chairman, shareholders, [Foreign Language]. Thank you for the nomination for reelection to the Board. I was first appointed to the Vector Board at this meeting 3 years ago as a Director of your company, I acknowledge the opportunities ahead for Vector as well as the privilege and responsibilities being a Board member. Vector is at the heart of the massive changes impacting consumers that are occurring throughout the energy system. The sustainable value drivers for newer forms of energy and their place in the energy market are evolving at pace. Vector can look ahead and contribute to a decarbonized power system that is much more heavily electric and data-centric. Vector plays a critical role in the energy sector. It's an active participant in the value chain of energy distribution. The cost of delivering energy to consumers where the businesses of households is always a constant consideration and a rightful constraint. It's right to that intergenerational considerations continue to ensure that the enormous capital costs of delivering growing and upgrading Vector's infrastructure are fairly balanced between today's consumers and future generations. Vector's Symphony strategy places the customer, at the same term, this may sound a bit repetitive, at the center of their own energy needs, encouraging consumers to make informed data-led choices about what's best for them. Digital Solutions are critical to the delivery of the strategy and how Vector continues to deliver safe, reliable, affordable energy as demand continues to increase. All directors are appointed with the support of the majority shareholder interest, which is one of its core responsibilities undertaken with due care. As a Non-independent Director, I, along with my colleague, Dr. Paul Hutchison, act in the interest of Vector. However, I also represent the 75.1% majority shareholder. Interest has over 351,000 beneficiaries who are consumers connected to the Vector Electricity Network in Central East and South Auckland. It's a special ownership structure where the interest of energy consumers are strongly recognized and included in this regulated and critical infrastructure business. In fact, last week, as the 2022 final Vector dividend was paid to all shareholders, those 351,000 consumers, mostly not shareholders, also received their share of the dividend paid to interest. The payment to consumers amounted to over $95 million directly into the Auckland economy. Essential to consumers and shareholders alike is Vector's commitment to power reliability and affordability, rising expectations, responding to climate change and the government's policies and business and consumers' actions on decarbonization. As a media commentator said this week, there's a lot to be said for businesses involved in the transition to clean energy being likely to drive future value. It's a professional privilege to work alongside recognized highly qualified independent directors on the Vector Board led by our Chair, Jonathan Mason, and the professionals of the Vector business, including Simon MacKenzie and his team. I would welcome your support for my reelection. If reelected, I look forward to working collaboratively on delivering value and sustainable investment returns to you, our shareholders. Thank you.

Thank you, Alastair. Any discussion or questions for Alastair? I don't think I see any hands up. And so the proxy voting statistics for this resolution should be shown on the screen. Great. So now last, but not least, the Board recommends Doug McKay for election as an Additional Director. So Doug's unlike reelections, Doug is being elected. Doug being eligible offers itself for election with effect from the 1st of October. I now put the resolution to elect Doug McKay and would like to invite Doug to address the meeting. Doug?

[Foreign Language] Jonathan and [Foreign Language], everyone. Good afternoon to all fellow shareholders, future colleagues, ladies and gentlemen, it is a privilege to put myself forward as a Board member candidate for your Board. This is my first time before you, so I would like to properly introduce myself and explain why I would value your support today because of what I can bring to the company and to the Board. Firstly, an overview of my experience and background and its fit with Vector's strategic focus going forward. My executive life was spent as CEO or Managing Director in multiple industries in a diverse range of large and complex companies. I have always gravitated to businesses facing challenging strategy transformations and for whom operational excellence is at the heart of what we do. Vector has these characteristics. As an executive at Lion Nathan, Carter Holt, Goodman Fielder, Sealord and Independent Liquor and in more recent times, as a Director on Ryman Healthcare, Genesis Energy, National Australia Bank, IAG New Zealand, Fletchers and Chair of the BNZ and of Eden Park, I am now a seasoned and well-performing experienced director, also with extensive Trans-Tasman exposure, all of which I think is particularly relevant to the challenges and opportunities Vector is dealing with. With 8 years on the Genesis Board and stepping off to take up this opportunity at Vector, I have a good understanding of how the New Zealand Energy Industry works and have seen Vector from the perspective of a supplier, partner and competitor. The challenges of energy transition are all too real for me, and I look forward to applying myself to those challenges in an energy distribution business and provider of critical infrastructure. In an era of distributed energy, Vector certainly has some significant competitive advantages in leading decarbonization and network optimization, and also enabling others to reduce their carbon impact by using energy more efficiently. I believe that on New Zealand's path to decarbonization solving for process heat, empowering consumers to adopt demand response solutions and electric New Zealand passenger transport are examples of important areas where Vector can continue and increase its leadership, given its expertise in distributed energy and network management. I am confident I bring relevant, deep experience and knowledge of operating in Australia and New Zealand. Vector is on a growth trajectory in both these geographies, and I can help a lot with experience operating in both. Here in Auckland, which, of course, is Vector's home patch, I also bring unprecedented experience and knowledge, having been in Auckland most of my life and in 2009 was appointed as the inaugural CEO of the Auckland Super City, a position I held for 4 years through until 2013. I've also been Chair of Eden Park Trust for 9 years, and I'm confident I know how to operate in Auckland at all levels and do understand citizens' expectations of critical city infrastructure. That said, the Vector Group of businesses span most of New Zealand and Vector Technology Solutions opens up potential markets overseas for new energy technology. On the governance front, I mentioned earlier my current and recent Board responsibilities on which I have also been Chair of various committees, including audit, risk, health and safety and environment and remuneration. I am an experienced full-time Independent Director who will hit the ground running with your support today. I am very excited and energized to be more deeply involved in learning more about the regulatory environment Vector operates in. Not unfamiliar territory to have regulator oversight as I have had on the BNZ and NAV boards in banking and also with insurance at IAG. Even with Fletchers, of course, the Commerce Commission has loomed large recently. So while some of this will be familiar, I will also enjoy learning new perspectives as well. I look forward to being part of a senior and highly experienced board supporting and challenging a talented management team. Thank you in anticipation of your support.

Thank you, Doug. Questions or discussions, yes.

Mr. McKay, I'd like to ask you, can you give us one really bright idea on how to improve Vector's balance sheet?

So he doesn't start until the 1st of October, okay? So a pretty steep learning curve still.

I've read the report. Thank you for the question. And I'd just like to emphasize what Jonathan said to you, Ms. Van Camp also that it is a very, very good question. It is the challenge that sits in front of all of us how we leverage the balance sheet in a safe and I think I'd like to be a bit more conservative on our balance sheet. I think would be the direction of travel I'd like to see us go, but we have a few a huge infrastructure business. And remember, we're investing to maintain the current asset base while we're trying to invest to create a new asset -- set of assets in a decarbonizing world. And we're also looking to get growth for our shareholders so we can strengthen the cash flow and the earnings going forward. I can give you my commitment that I'll take a very balanced view with an objective to decreasing leverage in the balance sheet. That's what I'd like to say at this stage.

Other questions?

Mr. Chairman, one question for Doug McKay. There's no question about your ability. You certainly have it, but what I would like to know, how many companies as of the moment, are you a Director of?

Thank you for that question. My capacity is where I want it right now. I am on -- to be honest, I couldn't tell you the exact number, it's 7 or 8 or 6 or 7 boards, let's say 7 for the moment. I won't waste the time to go and count exactly. But I have been on this number of boards for the last decade. And both the shareholders associations in Australia and New Zealand are comfortable with where my portfolio sits. I could not have added Vector as an additional Board to my portfolio. And hence, as I was coming off Genesis reaching close to full term, I have replaced Genesis with Vector because I feel like I have the passion and the energy to go another round with a new company who interest me very much.

So you don't see any conflict with your time? Some directors are in so many companies, that's the feeling after a while. Then they realize it's not good for anybody, particularly the new person taking over a Director of that company.

I'd just repeat my -- the evidence that sits before you, which I have operated at this level for the last 10 years with this amount of Boards. I am full time committed to being an Independent Director. Previously in my executive life, I was like Simon, no doubt, is today, 60 to 70 hours a week, but in my full-time governance life, I'm aiming to be 40 hours a week, 40 to 50 hours a week. So I've cut it back from executive life, but I'm very comfortable as is my wife, as is my family who are very supportive of the hours and the time I spend on my boards.

Any other questions for Doug? Anything online? There was another question. Sorry.

[indiscernible] have you, at any time, considered would'nt pay out?

Okay. Why don't we hold that until the end of the meeting. Because it's just about Doug's election right now, right? So hold that thought. Any other questions on Doug's election? Okay. I don't see any further questions. The proxy voting position for this resolution is now shown on the screen. So we've completed now the director elections. And we're going to move forward now with the appointment and remuneration of the auditor. I am hoping this is a noncontroversial part of our business agenda today. Section 207T of the Companies Act 1993 provides that a company's auditor is automatically reappointed unless there is a resolution or other reason for the auditor not to be reappointed. The company wishes KPMG to continue as its auditor, and KPMG has indicated its willingness to do so. Section 207S of the Companies Act of 1993 provides that the fees and expenses of KPMG as auditor are to be fixed by the company at the annual meeting or in such a matter as the company determines at the annual meeting. The Board proposes that consistent with past practices, the auditor's fees should be fixed by the directors. Questions on the reappointment of the auditor. They're in our annual report. Jason, do you have the page number for that? We're required to put them in our annual report under the fee section. So and I always look in the annual report for it. I just don't have a page number in my mind. So right at the bottom of the sheet. But some of you won't have this in front of you. Fees paid to KPMG audited review of our financial statements, $594,000 regulatory assurance. We have to file a lot of regulatory statements, $394,000, other assurance fees, $67,000, non-audit fees, $199,000. So that's a recap of their fees. Oh, gosh. Okay. Jason, I want a subtotal in that note for next year. I'm just kidding $1.2 million happy after the meeting to add those numbers up for you and give you the exact dollar amount.

[indiscernible]

Yes. Roughly the same as the previous year, a few puts and takes in the subcategories. Other questions on auditor remuneration? I don't think I see any further questions. And so the proxy voting position for this resolution is shown on the screen. Okay. Moving on to the next matter. We have a couple of alterations to our constitution. The resolution deals with amendments to Vector's constitution. Full explanation is set out in the notice of the meeting and the proposed amended constitution has been available to view on Vector's website. In summary, the amendments fall into two categories: a, changes allowing Entrust to appoint a Director to fill a casual vacancy on the Board due to the departure of a Director that is an Entrust Trustee. So basically having one Entrust new trustee having that vacancy filled: b, changes to allow the trustees of Entrust to approve transactions involving more than 15% of Vector's average market capitalization by providing approval and writing. Just to remind shareholders, you may vote at any time. So that's, a, that's B. And then there's a final opportunity to cast your votes. So importantly though, any questions on A or B on the amendments to the constitution? Anything online? I don't think I see any questions. Proxy voting position is shown on the screen. The next item, I think we're close to the end on the resolutions, I apologize. So we have some many. We have more than normal this meeting. This resolution seeks shareholder approval to increase the total annual director fees. Implement this over 2 years and change the structure of fees from fixed amounts to a maximum pooled amount. The Board has undertaken a detailed review of directors' remuneration, including engaging PricewaterhouseCoopers to undertake independent market benchmarking. A full explanation of the proposal is set out in the Notice of Meeting and a summary of PwC's benchmarking report has been available to view on Vector's website. Questions or discussion on director fee increase? It's in the Notice of Meeting. I mean, what I'd say is we haven't had a -- there's been -- directors' fees have been flat for 9 years. And so this reflects a bump up in directors' fees. Any questions? Any questions online? No further questions. There is a question. Yes.

Yes. [ Ross Gulsen ], shareholder. I have one sort of question with this like looking at the figure, it's quite a big figure. But as you say, it's been 9 years since you had an increase, so it's probably not a great movement. Just out of interest, over the same period the general staff that worked for Vector, have they have a similar increase?

Yes. So this represents about a 2.5% per year increase 2013 to 2023. And I anticipated your question and asked our Head of HR earlier today, that very question. And I think we estimated it at about 3%, 4%, let's say, 3% to 4%. So we're -- and we were sensitive. We see ourselves as servants of you all and also overseers, but servants of the company, and we wouldn't want our remuneration to be higher than staff. So we're comfortable it's below that. And staff have got an increase every year, right? So they haven't gone 9 years without an increase. Any other question? Okay. So with that, the proxy voting position for this resolution is shown on the screen, happily, we have finished all ordinary business. Are there any items of general business to be discussed or questions to be raised? Sir, you have the question on wind power. Now what was the question exactly?

[indiscernible] I'm asking because my son-in-law owns the largest farm in the North Island, probably has an investment close to yours. It's well over a $100 million. And somebody, I think it's [indiscernible] and building the wind farm on his farm. So he still got another 80,000 acres.

Yes. I'm going to start and Simon fill in anything you'd want to. But we're not a generator, I used that linger gentailer. Generators are doing wind farms like almost, I think pretty much all of them. We're a deliverer of energy. So we transport rather than generate energy. We did have an investment in a wind farm, I'm going to say, 8, 9 years ago, but we divested out of that, and we haven't reinvested in any meaningful new wind farms because we want to define our business more narrowly and not try to be everything for everyone. Plus pretty expensive CapEx on wind farms, and we've already alluded to capital challenges. Simon, do you want to say anything else on that?

No, basically, just one point is that under the electricity, we can't invest in those kind of large farms because of the separation between the network and the generation retail market. So we can do a very minimal amount, but nothing that would ever get to scale and be of relevance.

Any other -- is that okay? Any other questions? Yes.

[indiscernible] bondholder and proxy. A question on plans and strategies for undergrounding. Dr. Hutchinson mentioned it briefly in his press, but I haven't read or seen anything lately. It was also mentioned that [ AEPB ] was 100 years ago, and I suspect that some of the infrastructure might have been put up on day 1 maybe. So I'm just wondering where we're going with it.

At least we sweated the assets in that case, but they need to be workable. Simon, do you want to talk about our status on underground? We do have bought a big project in St. Hollier currently.

And we basically have an annual undergrounding projects that typically are around about $12 million to $14 million a year depending on how things play out with regards to timing. And so that's -- the level that's undertaken, that's a commitment that we've entered into -- or sorry, that was in place because of the relationship with Entrust when we listed. So that's the level of undergrounding. And when we talk about undergrounding, of course, most of the network that we're building new is underground now.

Other questions?

[indiscernible].

Good. Thank you. Other questions, general business? Yes.

Dennis [ Pagan ], shareholder. The last actual meeting we had here, I heard somebody say that HRV when you bought, it was a dead duck. Now could you please give us some idea on how it's performed since it's been under your control?

Yes. So HRV, we did take an impairment on that 2 or 3 years ago. And since then, it's gone into the black. What I'd say though also is it has been disadvantaged on the stop start. So it's been hurt by the lockdown. So when we went into a deep lockdown 6 months or 12 months ago and stayed there, HRV business were plummeted down, and we couldn't get out to a lot of the houses in any case. But then since then, it's done reasonably well. It's not a material part of our business. But I'd say, but it is in the black. Other questions?

My name is Robert [indiscernible], shareholder. Talking about wind farms, the one you used to have shares and I remember that Michael [indiscernible] claimed that the original rate [indiscernible]. Since then, they've got a whole new Board in the company is actually doing very well. I have just come directly from the New Zealand wind farms meeting, I got ahead. So they've just been meeting just been this morning. The company seems to have a big plans for the future.

Thank you for that update.

Maybe we should shares. Maybe you should buy some more shares in it again.

We look at spending our money very wisely, but we'll take the update. Other questions, general business?

Richard Jenkins, shareholder. Says that they're creating a new energy future. Now the energy future that I see is everyone is going to have big batteries on wheels in their garages. What I think needs to happen is we need to use those batteries to generate power at peak times and then charge them at 2:00 in the morning when there's no demand. When is that going to be able to happen?

Simon? Part of a Chair's role is if they get a difficult question, they move it to the CEO immediately.

I think probably two answers to that. One is that it was already available now. You can do that. It's called Vehicle- to-Grid charging. So we have some vehicles that are -- that can enable that. One of the primary issues with Vehicle-to-Grid is actually what the vehicle manufacturers will allow their vehicles to do because it goes to battery warranty issues around the car warranty and everything else. So the technology is available now. For us, the point you raised around charging and discharging the energy from those batteries is something that we passionately believe in and have run a trial of 200 electric vehicles being charged -- primarily charged, not discharging, but charged using a platform to actually schedule when they charge so as to smooth out the amount of peak energy that they require on the system so they don't all connect at once. So that's certainly the way of the future. It's the way that we see in the U.K. that things are now playing out that there's a requirement for -- with our -- people have electric vehicles that the charging device gets connected into a system that controls us almost like an air traffic control system that said, okay, let's have these schedules so they don't all need to be charged at the same point in time. It understands what's going on in the network. So that's something we're very much pushing for. We've invested in the technology. We've done 2-year trials. We know that there are things called machine learning and algorithms that actually understand the behavior of customers and when do they need to have their vehicle charged and therefore, having it ready in time. It's really a set and forget mentality. People don't want to have to kind of wake up and think I need to plug in now or anything like that. But the other point, which is super critical about it is what it also does is it means the amount of network that needs to be invested and can be managed. So it's much more affordable for everyone in Auckland because if you build a peak, it's actually going to be a very expensive network build and our analysis shows that by around about 2040, if you had an uncontrolled environment, the amount of the network that we need to build now would be 3x what we currently have as a network asset. But if we have a controlled environment, it's about twice. So it's a very material cost difference.

[indiscernible].

Yes, the power from house -- sorry, from the vehicle to the house, as I say, can be done now, but you do need basically a different type of charging port or a port because you're doing basically a bidirectional flow. So enabling it to come in and out, there's quite a lot of complexity that's how that interfaces into the household environment.

But what you described is our vision for the future. So we have a few impediments.

So we have -- for example, we have that running in our basement in Auckland now. We have a vehicle running on it out in a rural area. The primarily the bigger issue is what is the consumer demand for it. And what is available through manufacturers, vehicle manufacturers because that's primarily where the solution we see will come from vehicle manufacturers coupled up with the people that are providing the charges [indiscernible].

Watch all the EVs come into New Zealand.

[indiscernible].

The issue will be -- which we see very much occurring now is in different parts of the country. There will be totally different solutions required. So hybrids, hydrogen for heavy transport. In urban environments, we will see probably more EVs. And what we do know from research overseas as countries like Norway, they have a very high penetration of EVs. Most people still have or quite a lot of people still have fossil or a petrol field vehicle for much longer range when they're traveling.

Other questions for general business? I don't see any. Is there any questions on general business online? Okay. That concludes our discussion on the items of business. Okay, now it's time to cast your votes if you've not already done so. And we're going to get help for you to translate any of the small words. Have we done that? All done. Okay, excellent. So time to cast your votes. I'm going to give 30 seconds. I know we've sort of had a long annual meeting already. [Voting]

So now I will shortly close the voting system. People are -- okay, let that go on for a little bit. Casting are paper votes good. Good. [Voting]

Please ensure that you've cast your vote on all resolutions. We're sort of waiting a moment for final votes to be cast. [Voting]

So as everyone in the room been able to vote? You've all got -- found a box to vote? Good. Okay. See the last few votes going through. [Voting]

Okay. We'll just say final closing of the meeting. I'd like to thank again my fellow Board members for their input during the year. Simon and his team for the performance throughout the year. Once the voting is closed, the results of these votes will be released to the stock exchange tomorrow. And everyone have their vote in. I now formally close the voting. We already had general business. Any final questions? I think we have had plenty of time for questions like to now declare the meeting closed. [Foreign Language]. Thank you, everyone, for joining us in our first in-person Vector meeting since 2019.