Generating change:
Changing generation
Meridian
Energy
Limited.
Integrated
Report 2021.
Change needs energy.
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Introduction
Change needs energy
A material difference
Our process
Reducing our material topics
We are one of New Zealand’s largest organisations
What drives us
Directors’ statement
Our commitment to effective governance
Chair and CEO’s report
Pushing forward with change
Market leadership
Taking care of our own backyard
Working with our suppliers
Contribution to public policy
Energy wellbeing
Putting customers first
Green financing
Building sustainable relationships
NZAS extended exit agreement
Challenging hydrology
Relationships with local communities and iwi
Impact on water
Impact on biodiversity
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Meeting changing needs of our customers
Healthy customer growth
Flux growth underpins our success
Work on Harapaki wind farm begins
Pipeline of generation options
Distributed energy
Shining examples of solar
Equipping our people for changes ahead
Future of work
More work needed to increase safety
Supporting the work of others
Stronger sense of belonging
Keeping our technology systems safe
Rewarding energy
Our approach to remunerating our people
Further disclosures
Generating returns
Financial statements
Financial auditor’s report
Global Reporting Initiative (GRI) Standards
assurance report
GRI Content Index
Directory
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MERIDIAN INTEGRATED REPORT 2021 1
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This needs
to change
Extreme weather events are one of the effects of climate change that directly affect Meridian.
Our commitment to decarbonisation is about limiting the changes New Zealand faces.
This needs
to change
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MERIDIAN INTEGRATED REPORT 2021INTRODUCTION 1
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This will
change
Our contract with New Zealand’s Aluminium Smelter (NZAS) runs until
the end of 2024. We are looking at new ways to maximise the use of
Aotearoa’s renewable energy advantage to make the most of this power.
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MERIDIAN INTEGRATED REPORT 2021INTRODUCTION This is
changing
Our partnerships focus on how we can help people and our planet.
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MERIDIAN INTEGRATED REPORT 2021INTRODUCTION 7
MERIDIAN INTEGRATED REPORT 2021INTRODUCTION This isn’t changing
fast enough
Australia’s dependence on fossil fuels is holding back the adoption of renewables. This year we grew our customer base,
but low wholesale prices and the uncertain policy environment are potentially stifling incentives to innovate.
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MERIDIAN INTEGRATED REPORT 2021INTRODUCTION 9
MERIDIAN INTEGRATED REPORT 2021INTRODUCTION 1 0
MERIDIAN INTEGRATED REPORT 2021INTRODUCTION Change
needs
energy
Big challenges and opportunities are here right
now – and more are on their way. We are excited
and committed to shaping the journey to a net
zero world. As Aotearoa’s largest renewable
electricity generator and a sustainability pioneer in
Australia, Meridian has the scale and the resources
to help secure a clean energy future, where all
New Zealanders thrive. Generating affordable,
clean, renewable power is key to a more equitable
and sustainable future and our goal is to make the
renewable energy we generate as accessible as
possible to households, businesses and industries.
The immediate challenges of a dry year, decisions
around Tīwai Point, a downward-sliding trading
situation in Australia and regulator rulings have
been complemented by the commencement of
our Harapaki wind farm, a positive trading year in
New Zealand, growth in our Australian customer
base and a financial result that reflects the hard
work and commitment of our team.
Meridian is set on shaping a clean energy future
that our customers, communities and country can
be proud of. It’s about working together for the
long term, caring about the big things and the small
things; it’s in the actions we take today and how we
plan for and invest in our future.
Clean energy for a fairer and healthier world.
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MERIDIAN INTEGRATED REPORT 2021INTRODUCTION A material
difference
We rely on the effective management of a wide range of resources, including our physical
assets, our technology platforms, our financial capital, our people and their knowledge,
our many relationships and the natural resources we use to generate electricity and value.
We are committed to providing transparent, evidence-based information
in a way that is simple to digest and is consistent with best practice.
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MERIDIAN INTEGRATED REPORT 2021INTRODUCTION 1 3
MERIDIAN INTEGRATED REPORT 2021INTRODUCTION 14
MERIDIAN INTEGRATED REPORT 2021INTRODUCTION Our process
This year we conducted a materiality assessment with key stakeholders through
an independent consultant. This included reviewing the Global Reporting Initiative
topics and material topics regularly reported on by electricity generators and
retailers in New Zealand and Australia.
We asked our stakeholders to identify Meridian’s most material topics and what we
should be reporting on and addressing. We applied the outputs from this process
to help develop a stakeholder strategy and inform the material topics for this annual
report. As in previous years, we also examined Board papers, assessed our risk
register and reviewed issues that had received media coverage.
In FY18 we identified the United Nations Sustainable Development Goals (SDGs)
that we believe are most relevant to our business. Our commitment to making a
renewable difference for the future led us to focus on two SDGs – SDG7 Affordable
and Clean Energy and SDG13 Climate Action – as these apply to areas where we
believe we can make the biggest difference.
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MERIDIAN INTEGRATED REPORT 2021INTRODUCTION Reducing our material topics
This year we reduced our
material topics to 12 from
16 based on the materiality
assessment completed with
our stakeholders. In this
report, we focus on:
1. Pipeline of generation options
2. Electricity pricing
3. Sustainability leadership
4. Action on climate change
5. Support for vulnerable customers
6. Distributed energy resources
7. Good governance, ethical
behaviour and reporting
8. Impact on water
9. Contribution to public policy
10. Financial impacts of climate change
11. Cybersecurity
12. Impact on biodiversity
Our key stakeholders are those
who can have a significant
impact on our business, or
on whom we can have a
significant potential impact
through our activities.
•
Investors
• The Crown
• Ngāi Tahu and other iwi
• Shareholders
• Customers
• New Zealand public
(and their elected officials)
• Regulators
• The electricity sector
• Asset communities
Local government
•
Employees
•
• Suppliers
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MERIDIAN INTEGRATED REPORT 2021INTRODUCTION I
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MERIDIAN INTEGRATED REPORT 2021INTRODUCTION 1 8
MERIDIAN INTEGRATED REPORT 2021INTRODUCTION Authenticity in reporting
In FY20 we were assessed for and included in the Asia Pacific
Dow Jones Sustainability Index (DJSI), which adopts a robust and
structured Environmental, Social, and Governance framework
to assess performance. We also were assessed in FY20 under the
Carbon Disclosure Project (CDP), a global environmental disclosure
system, and were proud to receive an increased rating of A-
for climate change in FY20. We submitted again in FY21 for
inclusion in the Asia Pacific DJSI and to be assessed under the
CDP framework.
We’ve entered our third year of completing a voluntary Climate
Change Disclosure report, in accordance with the recommendations
of the Taskforce on Climate-Related Financial Disclosures (TCFD).
Our annual Climate Risk Disclosure report has again been
prepared in accordance with the recommendations of the TCFD.
This report describes the financial impacts of climate-related risks
and opportunities – including how these are governed, how risks
are managed, any impacts or influences of these on our strategy and
what associated metrics and targets we set for ourselves. Our FY21
Climate Change Disclosure is available at www.meridianenergy.co.nz/
who-we-are/sustainability/climate-disclosures.
We also prepare our annual report to meet integrated reporting
standards to ensure we communicate concisely how our strategy,
governance and performance, in the context of our external
environment, seek to cause balanced, sustainable value creation.
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MERIDIAN INTEGRATED REPORT 2021INTRODUCTION This is our business
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MERIDIAN INTEGRATED REPORT 2021INTRODUCTION We are one of New Zealand’s
largest organisations
Up
$5b
NET ASSETS
This is our business
$4bUp
FY21 REVENUE
Up
$13b
TOTAL MARKET CAPITALISATION
NZ MAJORITY OWNED BY
THE NZ GOVERNMENT
10% LEGISLATED MAXIMUM
NON-CROWN OWNERSHIP
LISTED ON
BOTH THE NZX + ASX
$729mDown
FY21 EBITDAF*
100% RENEWABLE ENERGY GENERATOR
– FROM WIND, WATER AND SUN
* EBITDAF is a non-GAAP financial measure of earnings before interest, tax, depreciation, amortisation, changes in fair value of hedges, impairment and gains or losses on sales of assets.
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MERIDIAN INTEGRATED REPORT 2021INTRODUCTION What drives us
Our purpose of clean energy for a fairer
and healthier world is at the centre of
everything we do. To deliver on our
purpose we have focused on areas
in which we can make a meaningful
difference, and that also align with
our values and goals of climate action,
putting our customers first, and being
a great place to work and our role as
a responsible generator. We strive to
achieve these goals by ‘being gutsy’,
‘being in the waka’ and ‘being a good
human’ to ensure that we are able
to deliver positive outcomes for
New Zealand and our shareholders.
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Our purpose:
Cleaner energy
for a fairer and
healthier world.
Great place to w o r k S D
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MERIDIAN INTEGRATED REPORT 2021INTRODUCTION
5 offices
869 employees
(94 at our power stations)
AU 1 office
88 employees
(17 at our power stations)
FLUX Remote-first
workforce spread
across 3 countries.
131 employees
NZ
CUSTOMERS
346K
Customer connections
~15% national retail volume1
Retailing as:
Meridian Energy
Powershop
GENERATION
5
185K
Customer connections (incl gas)
Retailing as:
Powershop, and providing energy services to Kogan Energy
Licensing the Flux platform
7
2
~30% national electricity generation
1 Excludes Tīwai Point aluminium smelter
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MERIDIAN INTEGRATED REPORT 2021INTRODUCTION Key changes this year
Environment
Performance
• Climate Change Commission report
released, sets policy direction for
decarbonisation of the economy
• Launched Process Heat Electrification
Programme to electrify process heat
• Launched AC EV charging network
• 60,000 stems planted to date
under Forever Forests programme
• Group retail electricity sales volumes
for FY21 were 14% higher than last year
• 7% growth in New Zealand customer numbers
• Powershop passed 100,000 customers
• 4% growth in Australian electricity
customer numbers
• 500,000 customers migrated to Flux
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MERIDIAN INTEGRATED REPORT 2021INTRODUCTION Community & people
Looking ahead
•
Issued first Modern Slavery Statement
• Arrangements with NZAS finalised
• Reaffirmed our commitment
to support KidsCan
• Harapaki wind farm consented,
construction commenced
• 92% positive staff safety, health
• New demand opportunities identified
and wellbeing sentiment
• Launched a Future of Work initiative
to help future-proof our workforce
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MERIDIAN INTEGRATED REPORT 2021INTRODUCTION Sizing up our risks
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MERIDIAN INTEGRATED REPORT 2021INTRODUCTION The Board sets Meridian’s overall
The risks identified are:
• demand risks
• market supply
• adverse hydrological conditions
•
•
catastrophic event
critical equipment or
technology failure
•
•
•
•
•
regulatory risk of access to water
legislative and regulatory risk
competitor behaviour
information technology security
substantial changes in the costs of
different generation technologies
•
transmission pricing methodology
appetite for risk and its approach
to risk management. A summary of
Meridian’s key risks can be found in the
FY21 Corporate Governance Statement,
available at www.meridianenergy.
co.nz/assets/Investors/Governance/
Meridian-Energy-Corporate-
Governance-Statement.pdf.
The three risks identified
as priorities are:
• demand risks – there is a risk that
new electricity demand will not
• health and safety
• COVID-19.
• market supply – there is a risk
•
In response, Meridian has adapted
regulation of wholesale market
of a disorderly transition to 100%
its underlying assumptions to
trading or from initiatives such
emerge to offset the reduction
renewable electricity generation.
the market position, updating its
as the NZ Battery project which
in electricity use caused by the
One key risk is the premature
strategy. This flows through to the
may result in the Crown having
expiry of our contract with NZAS
retirement of thermal generation
preparation for and accelerated
a direct stake in pumped hydro
and potential closure of Tiwai
prior to new renewable electricity
delivery of new generation
generation), changes in policies
Point aluminium smelter in
being in place – specifically the
and flexible demand response
to support renewable energy, and
December 2024. The key mitigation
risk of the early retirement of
investments, such as options like
new or amended environmental
here is Meridian’s project to find
gas generation given its role as
hydrogen and the role it could play,
regulations. Meridian engages
new sources of demand, which
a transition fuel. Another key risk
in a dry year scenario, operating
with Government and industry
includes projects such as process
is that market interventions
practices and how the company
regulators and is involved in
heat electrification, data centres
will affect the potential returns
engages with stakeholders and
relevant regulatory processes.
and green hydrogen production.
from new renewable electricity
the messages it shares.
Meridian’s 2021 Climate Related
projects, which would likely
Disclosure (our TCFD report)
have a detrimental impact on
also captures the opportunity
investment in new generation.
for new electricity demand, the
In addition, Meridian’s 2021 TCFD
electrification of industrial heat
report identifies the potential for
and transport.
an increase in electricity spot price
volatility as a result of the increased
proportion of renewable generation.
•
legislative and regulatory risk –
changes in public policy that
lead to changes in legislation or
regulation, including electricity
regulation (i.e. change to market
regulation and potentially market
structures resulting from ongoing
scrutiny and evolving attitudes to
Meridian actively supports work
on climate change, including the
Government’s sustainable 2030
future of New Zealand. As such,
we were the first New Zealand
listed company to meet TCFD
reporting requirements.
We have mitigation plans in place
for all these risks.
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MERIDIAN INTEGRATED REPORT 2021INTRODUCTION 2 8
MERIDIAN INTEGRATED REPORT 2021DIRECTORS’ STATEMENT Directors’
statement
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MERIDIAN INTEGRATED REPORT 2021DIRECTORS’ STATEMENT About this report
This integrated report reviews our financial,
economic, social and environmental performance
for the year ended 30 June (FY21). It has been
prepared using the Value Reporting Foundation’s
integrated reporting framework.
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MERIDIAN INTEGRATED REPORT 2021DIRECTORS’ STATEMENT The report covers the performance of all members of the Meridian Group,
About the Meridian Group
including our Meridian Energy and Powershop brands in New Zealand and
Australia, Dam Safety Intelligence in New Zealand and Flux Federation (Flux),
our electricity retailing software business that operates in New Zealand,
Australia and the United Kingdom.
The Meridian Group is listed on the New Zealand Stock Exchange (NZX) and
the Australian Stock Exchange (ASX). It is one of New Zealand’s largest companies
on the NZX, with a total market capitalisation in excess of $13 billion, operating
revenue in FY21 of $4 billion, EBITDAF of $729 million and net assets of $5 billion.
For the most part, the focus is on Group performance, although many of the
Our workforce of around 1,088 people is directly employed by or contracted to us.
topics discussed centre primarily on the parent company because the other
Third parties provide us with ICT, facilities’ management and meter-reading services.
businesses are smaller (less than 10% of Group revenue).
We are majority owned by the New Zealand Government. Legislation specifically
The report reflects the responsibility we feel throughout the Group for Meridian
precludes our having any other significant shareholders (i.e. more than a 10% holding).
to make best use of the natural forces at its disposal and to take care of its
customers, our people, our local communities, iwi and the environment.
We believe this approach strengthens Meridian’s ability to continue to
deliver both attractive shareholder returns and value to all our stakeholders.
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MERIDIAN INTEGRATED REPORT 2021DIRECTORS’ STATEMENT How we prepared
this report
Our commitment to
effective governance
Our Board structure
The role of committees
Meridian recruits Board members with
Committees support the Board by
The Board has established processes to
Our Board closely monitors how
a range of skills and experience. There
providing detail on specific issues and
ensure the quality and integrity of this
the company is managing long-term
are currently four female members
having subject matter experts provide
integrated report and has entrusted
drivers of value, such as retaining
and four male members, bringing
insights and advice. The Committees,
Management with preparing and
access to water, building employee
gender balance to our Board as well as
and the Board as a whole, cover the
presenting it accordingly.
engagement, investing in new assets,
contributing to the Board’s expertise.
spectrum of resources on which we
To ensure all data is as accurate as
possible, the financial information
has been prepared in accordance
enhancing environmental performance,
satisfying customers and building our
reputation and brand.
While the company’s constitution
does not specifically require it,
Meridian’s Board has a collective
with appropriate financial reporting
Strategy days and regular meetings
view that Ngāi Tahu, which has mana
depend for our business success, feed
in to the company’s overall strategy
and direction and keep the Board well
informed of day-to-day operations.
standards (see page 119) and audited
allow Board members to share their
whenua (authority over the land) over
The Board and Committees also
by Mike Hoshek for Deloitte Limited
thoughts and challenge Management
the majority of the South Island where
oversee progress on our SDGs. The
on behalf of the Auditor-General
on the direction in which they wish
most of Meridian’s assets are located,
Safety and Sustainability Committee
(see the Independent Auditor’s
to take the business.
is such an important stakeholder that
has responsibility for our progress on
Report on page 161).
The Board also sets Meridian’s overall
The non-financial information has
appetite for risk and approach to risk
been prepared in accordance with
management. Our FY21 Corporate
the GRI Standards: Core option
Governance Statement summarises
requirements of the Global Reporting
our key risks. You can find a copy of this
Initiative’s (GRI Standards) Sutainability
Statement at www.meridianenergy.
Reporting Standards. This sustainability
co.nz/assets/Investors/Governance/
a position on the Board for someone
SDG7 Affordable and Clean Energy
with connectivity to Ngāi Tahu should
and SDG13 Climate Action.
always be considered. This role is
currently undertaken by Anake Goodall,
the former Chief Executive Officer of
Te Rūnanga o Ngāi Tahu (Ngāi Tahu’s
governing body).
The Board as a whole oversees our
progress as a responsible generator,
particularly as it pertains to the
Waitaki reconsenting process. Our
People and Remuneration Committee
content has received a limited assurance
Meridian-Energy-Corporate-
Biographies of our directors and
oversees Meridian’s maintenance
engagement from Deloitte Limited
Governance-Statement.pdf. We have
the Executive Team are available at
and development of being a great
(see the Independent Accountant’s
also included information on our risks
www.meridianenergy.co.nz/who-
place to work. Our Audit and Risk
Assurance Report on page 165).
and how we manage them in this report.
we-are. All directors are independent
Committee assists the Board in fulfilling
The Meridian Group Greenhouse
Meridian complies with the NZX
Gas Inventory Report FY21 is
Corporate Governance Code
summarised on pages 50 and 51
recommendations in all material
of this report. It has received a
respects (with the exception of
reasonable assurance engagement
recommendation 3.6 – see
from Deloitte Limited.
page 110 for more details).
3 2
directors.
its responsibilities in matters related
to risk management and financial
accounting and reporting.
MERIDIAN INTEGRATED REPORT 2021DIRECTORS’ STATEMENT Our Board
Nagaja Sanatkumar
Anake Goodall
Julia Hoare
Peter Wilson
Mark Cairns
Jan Dawson
Michelle Henderson
Mark Verbiest
Independent Director
Independent Director
Independent Director
Deputy Chair
Independent Director
Independent Director
Independent Director
Chair
Diversity of perspective is important.
Meridian recruits Board members with
a range of skills and experience.
View director biographies at:
www.meridianenergy.co.nz/who-we-are/about-meridian/board-of-directors.
3 3
MERIDIAN INTEGRATED REPORT 2021DIRECTORS’ STATEMENT Resources
Board oversight
Financial and manufactured capital
(our cash and assets)
Audit and Risk Committee
The role of
people and culture
If you would like
further information
Our people are critical to the successful
As a business with a significant retail
delivery of our strategic goals, policies
shareholder base, we want to be as
Full Board
and processes.
Technology
Human capital
— Our people and expertise
People and Remuneration Committee
— Health and safety
Safety and Sustainability Committee
Relationships and reputation
— Our people and expertise
People and Remuneration Committee
The Board has approved a wide range
of policies that Management are
required to adhere to and incorporate
in the company’s operations, including
a Code of Conduct, the content of
which all employees agree to honour.
accessible and open as possible. If you
are a shareholder, please feel free to
ask questions, request information or
comment on this report via Meridian’s
website or by directly contacting
the Investor Relations Manager at
investors@meridianenergy.co.nz.
— All other groups
Natural resources
Significant risks around resources,
including risks due to climate change
Safety and Sustainability Committee and full Board
The Code provides guidance to staff
We hope you will be able to attend
Safety and Sustainability Committee
Audit and Risk Committee
on the behaviours that are expected
the 2021 annual shareholder meeting
and how to handle the issues and
in person. The Board has a policy of
challenges they may face. Our
rotating the location of the meeting
approach to remunerating our
between Auckland, Wellington and
people is on page 84.
Christchurch, and our 2021 meeting will
be held in Auckland. We will provide
you with more information closer to the
time in the Notice of Meeting. If you
can not attend, there will be a link to a
live webcast on the Meridian website.
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MERIDIAN INTEGRATED REPORT 2021DIRECTORS’ STATEMENT
Our Executive Team
Chief Executive
Chief People Officer
Chief Financial Officer
Chief Customer Officer
Neal Barclay
Tania Palmer
Mike Roan
Lisa Hannifin
Guy Waipara General Manager, Generation and Natural Resources
Jason Woolley General Counsel and Company Secretary
Claire Shaw
Jason Stein
General Manager, Corporate Affairs and Sustainabillity
Chief Executive, Meridian Energy Australia Pty Limited,
Powershop Australia Pty Limited
Chief Executive, Flux Federation Limited
General Manager, Wholesale
Nic Kennedy
Chris Ewers
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MERIDIAN INTEGRATED REPORT 2021DIRECTORS’ STATEMENT Leadership
means speaking up when it counts
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vtMERIDIAN INTEGRATED REPORT 2021CHAIR AND CEO’S REPORT
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vtMERIDIAN INTEGRATED REPORT 2021CHAIR AND CEO’S REPORT
Pushing forward with change
This has been perhaps the most challenging year
for Meridian since the company was listed. The
announcement very early in the year of the planned
closure of NZAS at Tīwai Point in Southland, the
prolonged drought through the second half of the
year and of course from COVID-19, all required close and
careful management. Despite the challenges we were
very pleased that our underlying business performance
remained strong. And the opportunities for the future
that are starting to take shape appear promising.
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MERIDIAN INTEGRATED REPORT 2021CHAIR AND CEO’S REPORT Ultimately, we believe our company is exceptionally well placed for the future,
In essence, the expiry of the supply contract with NZAS in late 2024 has created
as is the electricity sector as a whole. The expiry of the NZAS contract in
a ‘once in a generation’ opportunity to help grow Aotearoa and decarbonise our
December 2024 and the Government’s commitment to combating climate
economy. Meridian’s strategy to take advantage of the 5,000 GWh per annum
change have accelerated the opportunity to transition to a more sustainable
of energy that will become available when NZAS closes is multi-faceted and can
energy sector at a much faster rate than previously imagined possible. We
be summarised as follows:
have an immense opportunity in front of us, and a tailwind of climate activism
and global investor support for companies like Meridian that are committed
to sustainability and climate action.
An exit becomes an opportunity
NZAS accounts for 13% of our country’s electricity demand and is a large
employer in Southland. So the quick exit of the smelter by August 2021,
originally proposed by the owners, would have been very disruptive for the
Southland community and the electricity sector. Consequently, we negotiated
a discounted price with the smelter’s owners in exchange for an extension to
our fixed-price contract to December 2024. The revised pricing reflects a ‘cents
in the dollar’ deal that was designed to buy time and does not represent pricing
that is sustainable for the long term. The contract extension was critical to soften
the blow on the Southland community and allow it time to transition away from
a major employer in the area. The additional time will also allow the electricity
sector to adapt to the loss in demand by enhancing the transmission network
in the lower South Island and working with alternative industries that value
• We have supported and appreciate Transpower’s agreement to speed up
the upgrade of the lower South Island grid to ensure any surplus energy in
the region can be exported to the rest of New Zealand. That work should
be complete by May 2022.
• We are exploring the feasibility of a grid-scale battery, located in the North
Island. The battery will provide reserve energy and therefore increase the
effective capacity of the Cook Strait cable and allow a greater flow of power
from the South Island to the North Island.
• We continue to grow our retail customer base to, in part, offset the loss
of our largest customer, NZAS.
• We have developed and launched a Process Heat Electrification Programme
to support industrial customers in converting their fossil-fuel-based processes
to electricity.
• We are exploring new demand opportunities that will grow economic value
and jobs for the country, including green data centres and the production
of green hydrogen for both export and domestic use.
renewable energy to establish new demand in the lower South Island.
We believe all these opportunities have the potential to not only enhance
the value of our business, but also create long-lasting value for New Zealand.
3 9
MERIDIAN INTEGRATED REPORT 2021CHAIR AND CEO’S REPORT Focusing on our customers
Our focus on delivering great value
and billing platform. We believe Flux
impaired credit situations and we
for our customers continued to pay off
provides a world-class, integrated
provide products such as Level Pay
in FY21, and at a headline level we saw
platform and it will enhance our ability
and Shopper to help customers
strong growth in our customer numbers
to delight our customers with best-
manage their energy bills.
on both sides of the Tasman.
in-class products and services.
In New Zealand, our dual-brand strategy
We remain very conscious of the need
and focus on customer satisfaction
continued to resonate, reaching a wide
group of New Zealanders by offering
products for different market segments
and making it easier to work with us.
Powershop led the industry in engaging
with customers, as was evidenced in
its winning the Canstar and Consumer
New Zealand awards for customer
satisfaction and trust.
In Australia we continued to set the
benchmark for a great customer
proposition. Powershop Australia was
once again recognised by Canstar
Blue, Finder and Roy Morgan for
customer satisfaction and market-
leading products and service.
to support those customers facing
hardship. During the lockdown in
2020 we increased our contribution
to KidsCan by $1 million as we were
concerned about its sources of funding
drying up. In FY21 we matched that
and are now working with KidsCan
to leverage our contribution through
its fundraising activities. We are very
proud of our relationship with KidsCan
as it does an amazing job in supporting
under-privileged children in our society.
We continued our support of the
EnergyMate programme (run by the
Electricity Retailers’ Association of
The very high wholesale prices
experienced during the year created
challenges for some customers,
particularly those who chose to take
exposure to spot market prices.
The high prices were driven by a
combination of low hydro inflows
and some, yet to be resolved, supply
constraints in the gas market that first
emerged during 2018. We believe our
Wholesale Team managed our hydro
storage exceptionally well as they
progressively layered in hedge positions
to allow us to conserve water while still
meeting customer needs. Most pundits
expect the gas deliverability issues to
take another year or two to resolve, so
relatively high wholesale prices could
New Zealand) and were a big advocate
be a feature of the market for some
of the introduction by the Electricity
time to come. Fortunately, the vertically
Authority of consumer care guidelines
integrated business model Meridian
We made very good progress on our
to ensure the industry adopted a
has adopted means we have been
digitalisation journey and around 95% of
consistent approach to supporting our
able to shield most of our customers,
customers’ accounts were successfully
most vulnerable customers. We play
particularly retail customers, from
migrated to our Flux customer care
our part with customers who have
those high wholesale prices.
4 0
MERIDIAN INTEGRATED REPORT 2021CHAIR AND CEO’S REPORT The regulatory environment
signalled increased monitoring of
for the last few years, began to ease.
offers and a desire to test the new
Recently, Australian wholesale prices
rules. More positively, the EA has
have lifted from the low levels during
made good progress on the suite of
the 2021 financial year.
Early in the year the Electricity
Authority (EA) decided that an
Undesirable Trading Situation (UTS)
occurred during the large flood events
in the South Island in December
2019. While we did not necessarily
agree with the Authority’s finding,
we acknowledge its authority as an
independent regulator to make that
decision and we also acknowledge
that it did consult extensively with
the industry on the issue. We were
pleased that the Authority cleared
Meridian of the alleged breach of
High Standard of Trading Conduct
rules that were in place at the time.
recommendations from the Electricity
Price Review that was concluded
in 2019. Progress has included
the development of a commercial
market-making framework for the
exchange-traded electricity futures
product in New Zealand.
For the next financial year, we
expect a continued focus on security
of electricity supply following the
forced outages on the evening of
9 August 2021. Reviews have been
initiated by the Minister of Energy
The remedial action decided by
and Resources and the EA.
the EA was to reset wholesale prices
during December 2019. While the
implementation of that reset is yet to
take place, it will be completed by the
end of the 2021 calendar year and the
financial impact Meridian is likely to
be immaterial and within the amount
we provided for in last year’s financial
statements.
Difficult operating
conditions in Australia
While our retail sales volume
increased, wholesale prices in the
Australian market fell to unsustainably
low levels and this impacted the
performance of our generation assets.
Overall, the Meridian Energy Australia
This year the EA also implemented
Group result was down on the prior
changes to the trading conduct rules
year even though we had more hydro
The strategic rationale for investing
in renewable energy in Australia
is still sound, and given that only
around 30% of Australia’s electricity is
generated by renewable sources, the
potential for growth in renewables is
large as Australia looks to decarbonise
its economy. But the energy market
in Australia is highly politicised,
and government and regulatory
interventions at both State and
Federal levels are creating significant
uncertainty for our business.
Accordingly, towards year end we
announced we would be revisiting our
growth strategy and our ownership of
Meridian Energy Australia. This review
will consider a full range of options,
including accelerated growth as well
as partial or full divestment.
The ownership review is expected
to take a number of months and no
decision will be made on the future
direction of or options for Meridian
for generators offering into the
generation available as the drought
Energy Australia until the completion
whole-sale spot market. The EA has
conditions, that had been a feature
of that process.
41
MERIDIAN INTEGRATED REPORT 2021CHAIR AND CEO’S REPORT The road to decarbonisation
We are supportive of the direction
and operate a new renewable generator
of travel in the Climate Change
than operate an existing coal- or gas-
Commission’s final advice to the
fired generator. And there is presently
Government. If adopted, the measures
more than $2 billion of announced
could help enable Aotearoa to change
new renewable generation projects
course with sufficient pace and scale
in Aotearoa that should be producing
to set us on a path to achieving our
power well before the expected
climate commitments. We are also
significant growth in demand occurs.
supportive of the Government’s
recent announcements, such as the
introduction of a clean car standard
and the Clean Car Discount for electric
vehicles (EVs). Ideally we’d like to see a
fully developed and all-encompassing
Emissions Trading Scheme as the key
policy tool to support New Zealand’s
decarbonisation journey, but we also
acknowledge that additional policies
will be necessary to build momentum.
It goes without saying that the
effectiveness of policies like the EV
feebate scheme should be measured
and adjusted over time to ensure they
are achieving the outcomes envisioned.
Electrification is critical to the delivery
of a net-zero carbon economy in
New Zealand, so a massive amount
of electricity infrastructure will need
to be built in the next 30 years.
The good news is, the cost of new
renewable generation has come down
to a point where it is cheaper to build
The economics are driving us toward a
more renewable future, and we expect
the electricity grid in New Zealand to be
transporting more than 90% renewable
electricity on average by 2025.
The Harapaki wind farm is Meridian’s
contribution to the nation’s current
build programme, and we are working
hard to grow our pipeline of additional
renewable generation options. Harapaki
itself is a significant investment on a
New Zealand scale as it will produce
enough energy to power around
70,000 Kiwi homes. It is expected
to start producing that power from
as soon as 2023.
New Zealand’s existing hydro power
stations are the foundation for the
massive amount of new renewable
projects that will need to be built in
the next three decades. Flexible hydro
is the perfect complement to more
intermittent renewables like wind and
4 2
MERIDIAN INTEGRATED REPORT 2021CHAIR AND CEO’S REPORT solar. But across all New Zealand there
Hydrogen production can be a very
At Meridian we are very aware of the
ammonia as that demand grows. And
is limited hydro storage available, so
flexible process. If a hydrogen producer
need to show leadership and we have
thirdly, as discussed it can provide a
Aotearoa currently relies on coal- and
is willing to reduce production and its
made a commitment to halve our gross
demand response to the electricity
gas-fired generation to meet consumer
demand on the electricity system at
operational emissions by 2030. We have
market that will help balance demand
demand when rainfall into the hydro
times when the hydro lakes are low,
made good progress in electrifying
and supply over the entire system.
lakes is below average.
it helps balance supply and demand
our vehicle fleet and now all our light
Aotearoa currently generates around
80–85% of its electricity from renewable
sources, and as we move toward a
coal or gas.
across the whole system without
passenger vehicles are electric. We have
introducing carbon emissions from
a range of other initiatives in play and
fully renewable future and we reduce
We believe this type of demand
the amount of coal- and gas-fired
response is likely to be commercially
generation available, we will need
viable for flexible processes like
to find alternative ways to meet
hydrogen production, and would
New Zealand’s demand for electricity
deliver a very cost-efficient outcome
when the hydro lakes run low.
for the electricity system as a whole
The Government is pursuing the
NZ Battery project, which is testing
and ultimately the end consumers
of electricity.
the feasibility of a massive pumped
On the demand side, our sense is that
hydro scheme in Central Otago as a
New Zealand business is buying in to
potential means of storing water for
the need to decarbonise and is getting
hydro generation when we experience
on with it. Meridian is a member of
a dry year. While the outcome of the
the Climate Leaders Coalition, which
feasibility work is not yet known, other
represents 105 large New Zealand
innovative ideas that could also help
businesses that account for 38% of
solve this problem are starting
New Zealand’s GDP and 59% of our
to emerge.
The work that Meridian and Contact
are jointly leading on the opportunity
to establish a large-scale green
hydrogen production facility based in
Southland is a good example of these.
greenhouse gas emissions. The Coalition
members are, in total, planning to invest
more than $9.5 billion in initiatives to
reduce their emissions in the next
five years. Each of the members is
committed to playing its part in our
transition away from fossil fuels in a
way that is equitable and achievable.
are confident we can reach our 2030
goal. But we also have a strong part
to play in supporting our customers
to achieve their carbon-abatement
targets. Our Process Heat Electrification
Programme is aimed at supporting
industrial customers to decarbonise and
electrify their industrial plant. We can
offer customers a long-term commercial
package that supports their business
cases for change. The reality is that
these packages are enabled by the
renewable energy freed up with the
expected closure of NZAS.
If built, the green hydrogen opportunity
referred to above would be the largest
facility of its type in the world and
powered by genuine renewable energy
with a very high capacity factor. The
potential benefits to Aotearoa are
three-fold. Firstly, it will create export
dollars for our renewable energy and
high-value jobs in Southland. Secondly
it can be scaled to meet New Zealand’s
domestic demand for hydrogen or
The electrification of the transport
sector received a leg-up this year with
the introduction of EV feebates. These
should encourage more businesses
and individuals to go electric. This year
we started building our own public
charging network to support more EVs
on the road. Our intermediate aim is to
establish a network of 200 AC chargers
in the South Island and then extend
that reach to the North Island, while
also supporting business customers
requiring fleet charging solutions.
Research done in New Zealand
and offshore shows that ultimately
ceasing import-intensive petrol and
diesel transport should result in higher
employment, earnings, productivity
and average wages. And as we electrify
more of our economy, we are likely
also to see lower wholesale electricity
and transmission costs, alongside
climate benefits as modern, lower-cost
renewable generation makes up more
of the supply mix. Decarbonisation
for Aotearoa is an opportunity we
must grasp.
4 3
MERIDIAN INTEGRATED REPORT 2021CHAIR AND CEO’S REPORT Aotearoa’s natural resources
are our competitive advantage
Meridian welcomed the Government’s
plan to reform the Resource Management
Act 1991 to ensure that new renewable
projects of significance are supported
through a swifter consenting process.
This reform will be instrumental in
Aotearoa meeting its decarbonisation
goals. We support the Government’s
plan to provide better guidance on
balancing the national importance
of renewable projects with local
environmental impacts. We will play
our part in helping communities
understand why more clean energy
is good for New Zealand and ensure
communities realise the benefits
of having a renewable project in
their backyard.
We are also highly conscious of the
absolute need to take New Zealanders
with us on this journey. We are
committed to continuing our work
with communities and local bodies
to ensure our renewable projects
mitigate any environmental impacts
they cause and bring benefits to
local communities beyond just the
renewable energy they produce.
4 4
We specifically acknowledge iwi
seizing opportunities, looking after
rights under the Treaty of Waitangi
our customers and doing right by
Changes at Executive
and Board level
and the importance for us, as a large
each other.
user of natural resources, to partner
with iwi in finding ways to deliver
improved environmental, commercial
and cultural outcomes.
Our people have
done great work
We want to pay tribute to the hard
work and successes of all our people
this year. Our teams responded
positively and quickly to the demands
of working with COVID-19 restrictions,
and our business never missed a
beat. We would like to acknowledge
our teams based in Victoria who have
endured more than a year of COVID-19-
related restrictions – their commitment
and resilience have been amazing.
Also, many of our people are in
frontline roles either maintaining our
large generation fleet or servicing
our customers, and they have stepped
up and adapted seamlessly to new
ways of operating so that our service
levels remained strong.
Our team’s overall engagement
scores have remained high, and
we know we have a committed,
resilient team who are up for
This year we appointed a Future of
Work lead to help us develop strategies
that will support our people to learn,
grow and adapt to new technology
and ever more agile ways of working,
as well as transition to other roles more
easily as circumstances change. Our
vision is to be an organisation that lives
and breathes learning and we have
committed to double our investment
in training and development by 2025.
We are executing our strategy through:
better learning technology; educating,
motivating and changing mindsets
about how people learn; equipping our
leaders to be learning champions; and
managing learning more holistically
(beyond eLearning and formal courses).
Disappointingly, our health and safety
statistics slipped, with an increase in
our reportable injuries, more injuries
overall and more time off work due
to injuries. While none of the injuries
suffered by our people was serious
or long lasting in nature, the Board
and Management are not accepting our
level of performance and we continue
to have an absolute focus on keeping
During the year we announced one
change to our Executive Team. Jason
Stein signalled his intention to step
away from the role of Chief Executive
of Meridian Energy Australia and
Powershop Australia in December
2021. Jason had done an exceptional
job of steering our Melbourne-based
team through a prolonged lockdown
and difficult trading conditions. We
thank Jason for his hard work and look
forward to working with him through
to the end of his time with us.
The Board too worked hard during
the year to oversee our strategy and
provide guidance in testing times.
Two members of our Board will be
retiring at our Annual Shareholder
Meeting (ASM) in October. Peter
Wilson, Deputy Chair, and Anake
Goodall, have both served on the
Board since 2011 and steered us
through becoming a listed company
on the NZX and several wind farm
developments. Peter and Anake
have been strong supporters of our
sustainability leadership position
and we thank them for their significant
contributions and guidance in the
our people safe from harm.
past decade.
MERIDIAN INTEGRATED REPORT 2021CHAIR AND CEO’S REPORT Financial results
The previous two years saw record
results powered by strong generation
and growing retail sales volumes. This
year we maintained that strong retail
sales growth with New Zealand volumes
up 14% on the prior year. Drought
conditions during the second half of
the financial year dampened our cash
Noting that the last financial year
the market price. The programme will
was a record year for earnings through
enable investors to invest effortlessly
generation, Group EBITDAF decreased
in our future at the same time as it will
by 15% to $729 million. Net profit
enable us to reduce our debt position
after tax was impacted by fair value
and manage our debt more prudently.
movements on its hedge instruments,
increasing 145% to $428 million.
An exciting new context
Under-lying net profit after tax
decreased 27% to $232 million.
The Board will appoint Tania Simpson
as an independent director effective
from the date the Electricity Authority’s
approval is Gazetted. Tania will bring
extensive governance experience
in many industries, including Tainui
Group Holdings, Ngāi Tahu Tourism
and Auckland International Airport.
She will be standing for election at the
ASM in October along with Mark Cairns,
who will stand for re-election for a
further two-year term.
earnings by reducing generation and
Our balance sheet is resilient. Last
increasing hedge costs – that is just the
year the smelter decision saw rating
nature of our business and the variable
agency Standard & Poor’s change
New Zealand weather. The price we
Meridian’s credit rating outlook from
negotiated with the owners of Tiwai
stable to negative. However, on the
Point Aluminum Smelter to extend
first day of the new 2022 financial
operations to 2024 reduced during the
year, S&P Global Ratings reaffirmed
second half of the year. Whilst both
Meridian’s corporate credit rating as
events impacted financial performance,
BBB+/Stable/A-2.
the underlying drivers of future business
value remained strong, in particular
growth in customer sales and our
commitment to build the Harapaki
The Board has declared a final
ordinary dividend of 11.20 cents per
share, unchanged from the previous
year. This brings the total ordinary
dividends declared in FY21 to 16.90
cents per share, also unchanged
Operating cash flow
wind farm.
635
604
As discussed, we are actively
427
431
managing these issues and have a
from the previous year. This year, for
range of mitigations in place to improve
the first time, we are introducing a
Meridian’s position progressively as
dividend reinvestment programme
we approach the end of the contract
and the Board has determined that
with NZAS and potential closure date
shares issued under the Plan in respect
in 2024. We are also reviewing our
of the 2021 final ordinary dividend
2018
2019
2020
2021
strategy in Australia.
will be issued at a discount of 2.0% to
700
600
500
400
300
200
100
0
$M
Aotearoa’s imperative to decarbonise
the economy and the expiry of our
contract to supply the aluminium
smelter at Tīwai Point in late 2024 have
reset the playing field for Meridian and
the electricity sector as a whole. We
believe our brands, our people and our
renewable asset base serve as strong
sources of competitive advantage for
Meridian. Leveraging these advantages
while staying true to our sustainability
values means Meridian can execute our
customer and renewable-generation
growth strategies and continue to
deliver value for all our stakeholders.
Finally, a sincere thank you, on behalf
of the Board and the Executive Team,
to everyone we work with or are our
customers, those who invest in us and
everyone in our teams for helping us
to continue delivering cleaner energy
for a fairer and healthier world.
4 5
MERIDIAN INTEGRATED REPORT 2021CHAIR AND CEO’S REPORT 4 6
MERIDIAN INTEGRATED REPORT 2021CHAMPION Champion
I
N
O
P
M
A
H
C
47
MERIDIAN INTEGRATED REPORT 2021CHAMPION Market leadership
We are actively involved in a wide range of
initiatives and engagements to transform our
business, our society and our economy in
response to the climate emergency facing us all.
4 8
MERIDIAN INTEGRATED REPORT 2021CHAMPION Taking care of our own backyard
We have an ambitious target to halve our operational emissions by 2030 from
a 2019 baseline, which we describe as ‘Half by 30’. In the meantime, we continue
to offset our emissions via the purchase and surrender of Gold Standard Verified
Emission Reductions (VERs) to ensure our operations are carbon neutral. For
FY21, these VER credits have been retired from two wind farms projects in
India. In this decade, we will displace the use of Gold Standard VERs and through
our Forever Forests programme create our own carbon sink and offset those
emissions we have not been able to remove through our Half by 30 work.
Forever Forests will create a carbon sink here in Aotearoa and involves planting
over 1.5 million native and exotic trees over approximately 1,100 hectares.
To date our Forever Forests work resulted in 60,000 trees being planted over
approximately 45 hectares of our own land representing about 4% of our total
target. Our focus now is on scaling up our planting effort to date and securing
access to land. We will plant another 80,000 trees in 2021. We will also look to
partner with other landowners to get the rest of the stems in the ground. One
partnership involves the Christchurch Foundation and Sustainable Coastline
in creating the ‘Tūī Corridor’ initiative. This project will welcome tūī back to
Christchurch by planting a corridor of tūī tucker (their favourite native plants)
across the city.
24 ha
22 ha
24 ha
130 ha
14 ha
30 ha
80 ha
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49
MERIDIAN INTEGRATED REPORT 2021CHAMPION
Progress towards our Half by 30 target
2050. We focused on and prioritised
having a high risk of modern slavery
has this year focused on reducing
our supplier engagement based on
amongst our Tier 1 suppliers were
Total operational greenhouse
gas emissions by scope (tCO2e)
our light vehicle fleet and electrifying
criticality (risk/spend), the ability to
with our cleaning and security service
the balance, resulting in a 100% light
influence and the materiality of the
providers, which are all are located in
vehicle fleet and 195 tonnes of carbon
relevant greenhouse gas footprint.
New Zealand and Australia. To assess
abatement every year from here.
In the coming financial year we
these potential risks accurately, Meridian
We are now investigating electric
will take this further and develop a
issued a self-assessment questionnaire
alternatives for the utility vehicles
Group Half by 2030 roadmap, which
to each associated supplier as well as a
used by our hydro and wind asset
we will then execute and against
request for supporting documentation.
maintenance teams, one third of which
which we will report progress. Our
Based on these further actions, we
is already electric. We aim to complete
Greenhouse Gas Inventory for this
did not identify any modern slavery
that conversion by 2025. We are also
year, with a breakdown on category
practices in our suppliers within the
actively assessing options to electrify
movements from FY20, is available at
reporting period.
our Mararoa ferry, which enables our
www.meridianenergy.co.nz/who-we-
staff to get to and from the Manapōuri
are/sustainability/greenhouse-gas-
Power Station each day.
emissions.
We have also been encouraging other
companies to reduce carbon emissions
from their businesses. One way we are
Tackling the challenge of Half by 30
Also connected to our Half by 30
doing that is through a collaborative
will require a deliberate effort across
supplier engagement conversation,
partnership4 creating a climate action
the Group and in particular include a
we are ensuring our suppliers meet
toolbox. The Toolbox targets small to
sharp focus on our supply chain, which
the requirements of modern slavery
medium businesses (SMEs) with offers
is where over 95% of our operational
legislation. In FY21 Meridian released
of practical advice on five areas where
emissions lie. Achieving this will see us
its first Modern Slavery Statement3.
they can make a difference and reduce
continue to engage and collaborate
For the purposes of the Australian
emissions: moving people; moving
with our suppliers. In FY20 we
Modern Slavery Act 2018, both Meridian
goods; office operations; site operations
commenced a supplier engagement
Energy Limited and Powershop Australia
and equipment; and designing
plan, building on foundations set
Pty are considered ‘reporting entities’.
products. We look forward to enabling
out in our Supplier Code of Conduct2,
The 2020 Modern Slavery Statement is
a scale-up of this initiative and ensuring
investigating how our suppliers can
for the Meridian Group, both reporting
that SMEs in Aotearoa have easy access
take climate action in ways that work
entities (under the Act) and all Group
to practical advice and are empowered
for their businesses and get us on our
operational subsidiaries. In FY21 two
to take climate action.
way to a net-zero-carbon Aotearoa in
areas that were identified as potentially
5 0
2 www.meridianenergy.co.nz/assets/Investors/Governance/Policies/Supplier_Code_of_Conduct_Rev2.pdf.
3 www.meridianenergy.co.nz/assets/Sustainability/MER0117-Modern-Slavery-Statement-8_0.pdf.
4 Created in collaboration with seven leading organisations, see more at www.tools.business.govt.nz/climate.
Scope 1:
1,376 (4%)
Scope 2
(market based):
14 (0.0%)
Scope 3:
31,085 (96%)
MERIDIAN INTEGRATED REPORT 2021CHAMPION Working with our suppliers
The bulk of our carbon footprint is in
needed to build and maintain our
or contracted to us. The majority of
by national and local lines and
our supply chain. This makes our work
generation assets, as well as a mix of
our work is conducted by permanent
metering companies. Our retail
to engage our suppliers crucial if we’re
general engineering consumable and
employees, not contractors. In our
operation requirements are similar
to achieve our reduction targets. In
specialist parts’ suppliers, and service
retail businesses we have very short
to those of many corporate offices.
the generation side of our business we
providers including ICT and facilities’
supply chains because the physical
They include physical facilities and
have local and global suppliers provide
management providers. More than
assets used to distribute electricity
ICT, sales and marketing, billing
us with the parts and components
1,000 people are employed directly
and meter its use are managed
and governance functions.
Progress against our Half by 2030 goal (tCO2e)
Meridian Group greenhouse gas emissions
5
6
4
6
4
,
4
4
4
3
4
,
5
7
4
2
3
,
60,000
50,000
40,000
30,000
20,000
10,000
0
9
1
Y
F
0
2
Y
F
1
2
Y
F
2
2
Y
F
3
2
Y
F
4
2
Y
F
5
2
Y
F
6
2
Y
F
7
2
Y
F
8
2
Y
F
9
2
Y
F
0
3
Y
F
l
a
u
t
c
A
t
e
g
r
a
T
tCO2e
Scope 1
Scope 2
FY19
1,099
1,605
FY20
1,177
17
FY21
1,376
14
Scope 3 operational
43,761
42,250
31,085
Total Group operational emissions*
46,465
43,444
32,475
Scope 3 energy purchased and onsold**
New Zealand electricity
0
0
0
Australian electricity and gas
611,822
813,054
881,461
Scope 3 one-time construction and upgrades
68
32
285
Total Group value chain emissions
658,355
856,530
914,221
* Emissions from our electricity purchased and onsold are calculated using market-based methodologies.
In New Zealand we use the annual netting off methodology. In Australia we use the National Carbon Offset
Standard (NCOS) administered by the Austrailan Government.
** Group operational emissions are offset using Gold Standard Voluntary Emission Reductions and credits purchased
by Powershop Australia as part of NCOS, and taking into account credits cancelled by suppliers against their own
emissions.
In FY21 we applied inflation adjustments to our purchased goods and services emission factors to align with Scope 3
calculation guidance. To be consistent we also applied these adjustments to FY19 and FY20, resulting in restatements.
The restated figures are used here.
51
MERIDIAN INTEGRATED REPORT 2021CHAMPION
Our Process Heat Electrification
tonnes per annum (the carbon
Programme is designed to help
emissions equivalent of more than
customers who rely on fossil fuels,
50,000 cars every year) and add 250
mostly old coal boilers, to decarbonise
GWh to 500 GWh to our demand in
their businesses by electrifying their
sectors like food manufacturing, dairy,
heat processes.
chemical and wood processing.
The opportunity is significant.
Our first three projects include ANZCO,
Fossil-fuel-fired industrial boilers
WoolWorks and Meadow Mushrooms
are the second-largest source of
as pilot customers. Together we aim
energy-related greenhouse gas
to remove more than 15,000 tonnes
emissions, while process heat
of carbon emissions every year – the
accounts for 34% of New Zealand’s
equivalent of removing more than
total energy consumption and
8,000 cars from the road. Meridian’s
generates 8.5 million tonnes of carbon
assistance will support Meadow
emissions every year. Through 10-year
Mushrooms, for example, to reduce
contracts, highly competitive electricity
its carbon emissions by 1,300 tonnes
pricing and a capital contribution towards
per year by decommissioning and
conversion costs, we can potentially
replacing an existing diesel-fired
reduce carbon emissions by 100,000
boiler with an electric alternative.
5 2
MERIDIAN INTEGRATED REPORT 2021CHAMPION Contribution to public policy
Energy wellbeing
We actively contribute to public
generation and works well because
on total emissions and price signals to
We believe in a world where all people
policy, legislative and regulatory
the Government has largely stayed
ensure businesses are incentivised to
have access to the energy they need for
developments5. We do so to share
out of operations. Wholesale
make the transition to a low-emissions
wellbeing in their lives. We also believe
our perspective, ensure that decision-
electricity prices in New Zealand have
future successfully. Complementary
that achieving wellbeing requires an
makers are fully informed, and
been high for much of the year due
policies may be needed in addition to
appreciation of a range of factors such
ensure that decisions are made in
to below-average hydro inflows and
the Emissions Trading Scheme, and for
as housing quality, financial hardship,
the best interests of our customers
gas shortages. While these prices
us priority actions include increasing
and electricity pricing. We have
and all New Zealanders. This year
are challenging for larger consumers
the number of EVs on our roads and
initiatives in place to maximise energy
we provided submissions to a wide
exposed to the wholesale market,
increasing total renewable energy use,
wellbeing while taking into account
range of organisations, including
they reflect supply and demand and
particularly in heating for industrial
this wide set of considerations, and
the Climate Change Commission,
are encouraging further investment
processes. It is also important that the
continually strive to do more.
the Electricity Authority, the Ministry
in renewable electricity generation.
transition happens in an equitable and
for the Environment, the Ministry of
Business, Innovation and Employment,
the Infrastructure Commission,
the Commerce Commission and
Transpower.
We are supportive of having a
inclusive way.
New Zealand’s electricity retail prices
remain among the lowest in the OECD,
policy framework in place that enables
It is vital for the country that current
and data from the Ministry of Business,
Aotearoa to change course and sets us
and future governments deliver policy
Innovation and Employment shows
up to deliver our climate commitments.
stability, transparency and continuity on
that the real average annual household
The Government’s key role in our view
climate change. We look forward to the
bill in 2020 was $140 lower than in
In our assessment, intervention
is to put in place conducive regulatory
Government’s first emission-reductions
2014, and the real price per kilowatt
in the Australian electricity market
environments and guidelines. To that
plan due to be published later in 2021
hour was at its lowest level since 2012.
and a lack of emissions pricing have
end, we remain supportive of the work
and expect to see a strong commitment
This suggests that the healthy degree
led to spiralling and unintended
of the Climate Change Commission,
to deliver on the recommendations
of competition and choice that comes
consequences that will hinder
which has demonstrated how Aotearoa
of the Climate Change Commission.
with having more than 40 retailers
investment in renewable generation
can viably achieve our emission-
A response that closely aligns with the
competing across the market is
and limit the overall ability of
reductions targets while continuing
Commission’s recommendations will
working for customers.
Australia’s energy sector to mitigate
to grow as a country.
climate change. By contrast, the
New Zealand electricity market
continues to incentivise the
construction of renewable electricity
The Emissions Trading Scheme with its
recent improvements will play a critical
role in the transition to a low-emissions
future. It now provides a sinking cap
establish expectations of the weight
that future governments will give to
the Commission’s advice in the years
to come.
5 www.meridianenergy.co.nz/investors/reports-and-presentations/submissions.
5 3
MERIDIAN INTEGRATED REPORT 2021CHAMPION New Zealand disconnections*
%
9
3
.
0
%
5
2
.
0
%
3
1
.
0
%
1
3
.
0
%
3
2
.
0
%
0
1
.
0
0.4%
0.3%
0.2%
0.1%
0.0%
i
n
a
d
i
r
e
M
e
g
a
r
e
v
a
Z
N
Z
N
p
o
h
s
r
e
w
o
P
%
2
2
0
.
%
8
0
.
0
%
5
0
.
0
%
7
1
.
0
%
8
0
.
0
%
0
.
0
FY18
FY19
FY20**
FY21***
Our ambition is to achieve a world with no disconnections. We continue to focus
on lowering our disconnection rates, and during lockdown adopted a policy of
no disconnections. We offer customers products like LevelPay and have a trained
Credit team to support customers in need with alternative payment options and
access to support with a range of agencies.
* Data from the Electricity Authority (emi.ea.govt.nz/Datasets/Retail/Disconnections).
** FY20 restated with four quarters of data.
** Showing as 0% due to decimal place rounding.
*** Does not include Q4 data as unavailable.
Energy retailers also have an ongoing
EnergyMate programme, which
responsibility to ensure that in
provides free in-home coaching and
situations where consumers become
community hui workshops to help
vulnerable, there are safeguards in
Kiwis in need manage their energy use
place to protect them. Vulnerable
are proud to see that this programme
Consumer and Medically Dependent
has now enabled support for more
Consumer guidelines have been
than 150 families and an expansion is
around since the mid-2000s and were
planned this year to reach more than
introduced in collaboration with the
1,500 families.
industry and stakeholders including
Meridian. The Electricity Authority said
these guidelines had “generally served
New Zealand consumers well, and
electricity system stakeholders could
be proud of their shared commitment
to implementing them.” However, the
Authority said that after more than 10
years the guidelines needed updating
and a review. Meridian supported the
review and the resulting Consumer
Care Guidelines – in fact we think the
Authority should now go further and
make mandatory rules for all retailers
to follow. We will fully align our
practices with the new guidelines.
We have a trained Credit Team
to support customers in need, with
support that includes alternative
payment options (such as our LevelPay
product), and plans and support with
Work and Income and FinCap. In
addition, we support the funding of
the Electricity Retailers’ Association
In Australia, retail prices have followed
wholesale prices down to, in our view,
unsustainable lows, while prolonged
lockdowns have had pronounced
effects on people’s mental health and
their ability to earn. (On the face of it,
low pricing overall may seem a good
thing for consumers. Our concern with
the wholesale situation in Australia is
that, unless prices lift, there will be no
incentives to introduce new generation
and the country will continue
struggling to decarbonise.)
In FY21, we banded together with
others to offer Australian consumers
a range of supports. These included
work by the Energy Cluster and
campaigns to publicise the COVID-19
Support Hub. We also created a new
Usage Specialist role in our Contact
Centre to encourage customers to
talk about minimising their usage,
especially gas customers in Victoria.
5 4
MERIDIAN INTEGRATED REPORT 2021CHAMPION
Meanwhile, our Power It Forward
campaign asked those Australian
business customers who could afford
it to pay a little more so that we could
distribute the proceeds to smaller
businesses affected by COVID-19.
Our Switch Your Mates campaign also
encouraged our current customers
to refer their friends to us, with each
party getting a $100 credit and $100
going to Foodbank Australia. We are
proud to have raised $50,000 for
Foodbank Australia to feed vulnerable
people. All up, through our various
initiatives for vulnerable customers
in Australia this year, we raised and
contributed more than $250,000.
We are also planning a new Community
Energy partnership in FY22.
5 5
MERIDIAN INTEGRATED REPORT 2021CHAMPION Putting customers first
Green finance programme
Ultimately, our retail businesses judge
absolute competitiveness of this brand
In August 2020 Meridian announced
and hydro projects and assets that
their success by our collective ability
that we have won this prestigious
a Green Finance Programme, which
meet the following market standards:
to secure and retain the loyalty of
award five times in the past six years.
covers both existing and future
customers. In Aotearoa we monitor
Powershop also won two Finder
issuances of debt instruments. The
our Meridian Energy and Powershop
awards, Gentailer and Overall, for
Programme recognises Meridian’s
brands using customer satisfaction and
Greenest Energy Retailer. To quote
commitment to and leadership
compare our brands to the average
Finder: “Powershop once again showed
investment in renewable energy
score for gentailer brands (generators
why it tops the leaderboards when it
generation and will be used to
• The International Capital Market
Association Green Bond Principles.
• The Climate Bonds Standard.
• The Asia Pacific Loan Market
Association Green Loan Principles.
and retailers combined), challenger
comes to green energy in Australia.
finance or refinance sustainable
Further information on the Green
brands and the category as a whole.
Zero emissions electricity generation,
projects and assets such as new and
Finance Programme, including the
We have been very pleased to see
carbon-neutral plans for all customers
existing renewable energy assets.
Programme framework document,
both our brands holding their own,
and innovative efforts to support
which highlights the effectiveness of
clean technology helped Powershop
the customer focus and service ethos
differentiate itself.” The brand also won
we have been building steadily in
the Roy Morgan Customer Satisfaction
recent years.
Powershop New Zealand won the 2021
Consumer People’s Choice Award and
the 2021 Canstar Blue Most Satisfied
Customers Award. It is a sign of the
award – Electricity Provider of the
Year 2020. It was the second year in a
row that we had won this award. The
breadth of awards shows Powershop
leading the way in caring for both the
planet and customers.
The Programme enables Meridian
to connect its company strategy and
vision to its financing requirements, and
provides investors with an opportunity
to invest in a range of accredited debt
instruments. The proceeds of these have
been allocated (directly or notionally)
to refinance eligible wind
opinions from DNV GL Business
Assurance Pty. Limited, Climate Bonds
Standard Certification and Green
Asset and Debt registers, is available
on Meridian’s website at www.meridian
energy.co.nz/investors/reports-and-
presentations/green-finance.
Page 140 also provides detailed
information on the Green Debt
included in the Programme for FY21.
Customer satisfaction – brand monitor NZ
Meridian Energy
Gentailer average
Powershop
Challenger average
Category average
June 2020
June 2021
7.40
7.34
8.03
7.66
7.53
7.49
7.40
8.04
7.57
7.57
* Data is collected through brand tracking and results reported on a 12-month moving average.
5 6
MERIDIAN INTEGRATED REPORT 2021CHAMPION Our customers
NZ
Meridian
241K
Customer connections
residential
business
corporate
agri-business
Powershop NZ
105K
Customer connections
residential
business
AU
Powershop AU
142K
Electricity customer
connections
43K
Carbon-neutral gas
customer connections
~15% national retail volume
Available in four Australian states. All on the Flux platform.
NZAS
A large financial contract with NZAS at
Tīwai Point that accounts for the equivalent
of 38% of Meridian’s generation
57
MERIDIAN INTEGRATED REPORT 2021CHAMPION Building sustainable
relationships
Relationships underpin our ability to operate. This
year, while the extension of NZAS’s exit arrangement
may have dominated headlines, we continued
conversations with a wide range of groups on
subjects as important as water, biodiversity and
helping communities to prosper that will enable us
to continue to generate 100% renewable energy.
5 8
MERIDIAN INTEGRATED REPORT 2021CHAMPION 2025 Waitaki reconsenting
NZAS extended exit agreement
The water resource consents for the Waitaki chain of power stations are
Deliberations on the aluminium smelter at Tīwai Point took the better part
due for reconsent by 2025. This is a major catchment. 18% of New Zealand’s
of six months to resolve.
power is generated here and we are engaging with Ngāi Tahu and a full range
of stakeholders.
On 9 July 2020, NZAS gave notice terminating the existing electricity agreement
with effect from the end of August 2021. An offer allowing for a longer exit
Last year, new clean-water regulations sought to prioritise healthy water ahead
period up to the end of 2024 was put to NZAS. Terms for an extended closure
of human and commercial needs and explicitly recognised the importance
were agreed in January 2021. These give NZAS a lower price over the remaining
of maintaining flexibility at and output from the five largest hydro schemes in
contract and the option to reduce the contract volume from 572 MW to 400 MW
New Zealand, including our Manapōuri and Waitaki schemes. Keeping climate
with effect from 1 July 2022. NZAS consumes around 40% of Meridian’s generation
change front and centre is part of the context for the National Policy Statement
output in any year, depending on generation output and demand, so this
for Freshwater Management 2020 and we acknowledge the vital role that hydro
negotiation was significant. Its potential exit from the market and the expiry
schemes play in allowing Aotearoa to maintain renewable electricity generation,
of our contract with NZAS in four years represents a significant reduction in
ensure security of supply and enable and accelerate decarbonisation.
demand and will likely result in a near-term reduction in Meridian’s revenue.
Meridian will be applying to reconsent on the basis of the current arrangements
for the use and storage of water for hydro-electricity generation, such that
we can retain the benefits our hydro assets provide Aotearoa. We remain
However, once NZAS leaves, more renewable energy will be available to
potentially displace fossil fuel use and this will make a noticeable difference
to the percentage of renewable electricity on the grid.
strongly committed to working in good faith with all those involved to resolve
We have been working closely with Transpower, along with Contact Energy,
this large, complex and public process.
on the Clutha Upper Waitaki Lines Project as part of preparing the expiry of our
contract with NZAS in December 2024 and their potential exit. This project is now
due to be completed by May 2022. We are exploring the feasibility of a grid scale
battery, located in the North Island. The battery will provide reserve energy and
therefore increase the effective capacity over the Cook Strait Cable and allow a
greater flow of power from the South Island to the North Island.
59
MERIDIAN INTEGRATED REPORT 2021CHAMPION Hydrology this year
has been challenging
Recent good hydrological years were
such a notice, NZAS must manage its
Plant availability
followed this year by a record-setting
electricity consumption to achieve a
drought. About mid-November, the
reduction in electricity consumption
La Niña climate pattern took hold and
of 250 GWh in 130 days.
At the end of April 2021 we agreed
an electricity swap to assist NZAS to
Hydro New Zealand
%
FY16
FY17
FY18
FY19
FY20
FY21
Wind Australia
Wind New Zealand
Hydro Australia
91.0
88.9
93.4
92.6
85.4
93.4
83.9
91.3
90.4
85.8
88.6
83.3
91.6
80.1
89.0
89.8
88.9
92.2
89.0
91.1
68.0
70.9
Outages for FY21 – maintenance 12,160 hours, planned 9,608 hours, forced 2,991 hours.
coal, resulting in increased carbon
The dry conditions were part of the
dioxide emissions. We will continue to
reason for spot prices in the wholesale
look for a replacement of the Genesis
market and near-future prices on the
swaption from 2023 onwards with a
ASX climbing during the financial year.
range of parties.
voluntarily reduce its consumption
of electricity by up to 30.5 MWh
through to 31 May 2021 to assist with
managing the dry hydrology conditions
the country was experiencing. The
arrangement compensated NZAS for
any load it voluntarily decided to reduce
as a means of supporting us to manage
the dry period. This new arrangement
did not override our ability to call a
continued throughout summer.
As a result we experienced above-
average temperatures and lower-
than-average rainfall across much of
Aotearoa, reducing inflows to their
lowest levels on record for 88 years
and taking our main storage lakes to
800 GWh below average. Meanwhile
in Australia, wind generation was 5%
lower than at the same time in the
previous year and at a 49% lower
average price. Australian hydro
generation improved as drought
conditions eased during the second
half of 2020.
Smelter Demand Response if the dry-
We envisage that load management
year trigger level in our main electricity
(controlling how we deal with periods
contract was reached. An extension to
of peak demand) will form a key part
Meridian is well prepared operationally
the electricity swap was agreed again
of the arrangement going forward.
to ride significant droughts, with
in late May, to 30 June 2021.
Since the Genesis swaption was
arrangements and contingencies in
place to help us conserve our hydro
storage, continue to support our
customers and manage the financial
impacts of this challenge.
Meridian has a swaption arrangement
agreed, we have overcome the
with Genesis for up to 150 MW (three
engineering and operational issues
tranches of 50 MW each) until the end
that previously prevented us accessing
of 2022. This financial arrangement
the full range of Lake Pūkaki contingent
locks in a fixed price for the volume
storage. This has given us additional
Under our contract with NZAS we can
called. The climatic downside of the
flexibility to use Lake Pūkaki down to
require a Smelter Demand Response
swaption is that Genesis can hedge
513.0 m in some circumstances, and
if hydro storage is less than the Dry
its own exposure under the swaption
our operations recognise the potential
Year Trigger Level. When we issue
using thermal generation including
to utilise this additional water.
6 0
But they were not the only reason.
The market also factored in a loss of
gas field production because there is
less gas coming off New Zealand’s gas
fields, and there are concerns about the
implications for supply caused in part by
the gas industry responding to zero-
carbon policy settings. This sentiment
around gas supply resiliency saw the
longer-term demand curve rise.
MERIDIAN INTEGRATED REPORT 2021CHAMPION Generation (GWh)
Capacity (MW)
Z
N
o
r
d
y
H
Z
N
d
n
W
i
U
A
d
n
W
i
U
A
o
r
d
y
H
203
525
1,244
12,326
113
528
1,465
12,758
236
502
1,395
11,297
28
553
1,263
11,265
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
3,500
3,000
2,500
2,000
1,500
1,000
500
0
92.4
201
416
2,353
92.4
201
416
2,353
92.4
201
416
2,353
99.2
201
416
2,353
FY18
FY19
FY20
FY21
FY18*
FY19
FY20
FY21**
* Waitaki Power Station total generation capacity updated following restoration.
** Approval has been received for operational improvements to increase Burrinjuck
capacity from 27.2 MW to 34 MW.
61
MERIDIAN INTEGRATED REPORT 2021CHAMPION
Relationships with
local communities and iwi
Building long-term relationships with
communities close to the assets we
operate is an important part of what
we do. Our community fund Power Up
continues to support local projects in
Te Āpiti, Mill Creek, Manapōuri, West
Wind, White Hill, Te Uku and Waitaki.
In the 14 years that we have offered this
fund, we have been able to undertake
a range of projects that are important
to locals, and have invested more than
$8.5 million back into these local
communities through 1,161 projects.
We engage with our asset communities
in various ways, including via dedicated
Community Relationship Managers
across the country. We want people,
groups and communities to feel
included and consulted, and that we
have worked with them to understand
any concerns they might have.
We also recognise the mana whenua
of Ngāi Tahu, particularly in relation to
our hydro schemes in the Ngāi Tahu
takiwā, and engage with Ngāi Tahu and
other iwi in several ways. We recognise
and respond to the kaupapa of ki uta
ki tai (from the mountains to the sea)
and work closely with local rūnaka
(Arowhenua, Awarua, Hokonui, Moeraki,
62
MERIDIAN INTEGRATED REPORT 2021CHAMPION Impact on water
Water use in both New Zealand
consent conditions and subject to
In Australia we operate the hydro
Ōraka Aparima, Waihao and Waihōpai)
and Australia continues to be a
annual reporting to Environment
stations but we do not own the dam
through Te Ao Marama and the Waitaki
highly emotive and important issue,
Southland. Potential for erosion in the
structures. The environmental impacts
Governance Group, as well as trusts, to
enhance mahinga kai and native fish in
particularly in relation to quality and
Lower Waiau and Lower Waitaki rivers
of these dam structures and the water
access. As water and waterways are
is subject to stakeholder agreements
use are the responsibility of WaterNSW.
When the Manapōuri Power Station
was commissioned 51 years ago, the
tailrace began discharging freshwater
to Deep Cove.
All of the fiords in Fiordland have
a low salinty layer, a function of the
shape of the landscape and very high
rainfall levels. The ecology of all the
fiords is unique due to the naturally
low salinity layer and is one of the
reasons why black coral grows at
shallower depths here than is
common in other marine settings.
the Waitaki and Waiau catchments. At
fundamental elements in our business,
with Environment Southland and
Harapaki we are working with two iwi
we are acutely aware of their value
Environment Canterbury respectively,
in the region,the Ngāti Hineuru Trust
and role. We actively work with as
with powers for the councils holding
and the Maungaharuru Tangitu Trust, to
many parties as we can to collaborate
Meridian resource consents to
determine how we can be a good long-
and reach agreements on the use of
review our operations in the event
term partner, and work together to fulfil
water. We are committed to working
of unexpected impacts; risks of
what is culturally appropriate to iwi and
in good faith with all regulatory
contaminants from the stations
good for the broader community.
authorities involved in water access,
entering water ways is protected
We recognise the need to strengthen
water purity and water rights.
through requirements in resource
our iwi partnerships and have been
Hydro generation does not primarily
talking with people about how they
change the chemical composition of
would like those arrangements to
water where it’s used in our power
look. Over many years, together with
stations. Where there are potential
ngā rūnaka (Arowhenua, Waihao, and
consequential impacts on fresh water
consents to operate oil interceptors
with standards for contamination
levels being set conservatively and
with annual reporting requirements
with councils.
Moeraki) and landowners Jan and Geoff
quality, these are managed through
Water quality on the Waiau and Waitaki
Keeling, we have been developing
our resource consent conditions and
river systems can be compromised by
a mahika kai project (gathering of
stakeholder agreements. The discharge
the activities of other users, potentially
food and resources) focused on the
of fresh water from Manapōuri Power
boosting the chances of algal growth
restoration of the Takiroa Stream and
Station into a marine environment at
and weeds. Our preference is for the
wetland complex in the Waitaki Valley.
Deep Cove is undertaken in accordance
water in these catchments to be as
The wetlands and the associated rock
with resource consent conditions and
clean as possible. While we can release
art at Takiroa were once a seasonal
annual marine environment monitoring
more water into waterways to dilute
settlement or nohoanga area, with rich
and reporting; potential risks of
the effects of these contaminants,
resources of mahika kai such as raupō
sediment laden and turbid water
such actions affect the amount of
(bulrush), harakeke (flax), waterbirds,
entering Lake Manapōuri is managed in
renewable energy we can deliver to
ducks and tuna (freshwater eels).
accordance with our resource
meet New Zealand’s power needs,
and our profitability.
6 3
MERIDIAN INTEGRATED REPORT 2021CHAMPION Impact on biodiversity
Projects like the Takiroa Stream
catchment through predator and
‘trap and transfer’ programmes in
complement our extensive and ongoing
weed eradication. This has helped
both our hydro catchments, ensuring
work to minimise our impacts on water
to protect the endangered black-
that as many elvers and migrant eels
and biodiversity in our catchments.
fronted tern/tarapirohe and kakī/
as possible are transported across
They include our funding of Project
black stilt colonies and increase their
the dam structures every year.
River Recovery (PRR), Aotearoa’s
populations, as well as significantly
longest-running conservation/business
increase the wetland areas.
We are achieving co-benefits of
stronger biodiversity outcomes and
partnership, and the Waiau Fisheries
and Wildlife Habitat Enhancement
Trust (the Waiau Trust).
For 30 years PRR, in partnership with
habitats for fisheries and wildlife.
to enhance stream and wetland
In our Waiau catchment we continue
growing our own carbon sink through
to work closely with the Waiau Trust
our Forever Forests programme.
the Department of Conservation, has
been working to preserve and restore
braided river habitats in the Waitaki
We acknowledge that hydro generation
remove wilding pines and replace them
does have impacts on native fish such
with a mixture of sterile pinus radiata
as tuna (eels). We support and fund
and natives endemic to the area.
We have been working with local
performance and compliance with
authorities in the Waitaki District to
resource consent conditions. We are
No serious
environment breaches
All our hydro operations are governed
by resource consents, and in the case
of Manapōuri specific legislation,
supported in many cases by agreements
with groups connected with the
waterways. We work closely with
local bodies, particularly during
planning and consenting, and we
report regularly on our environmental
again pleased to report there were
no prosecutions in FY21. While we did
record eight breaches of environmental
compliance in New Zealand, none was
serious and there were no significant
adverse effects. There were no
breaches in Australia.
Water consumption*
Mm3
New Zealand
FY18
FY19
FY20
FY21
Fresh surface water (lakes, rivers)
65,562
74,183
85,339
66,434
Water returned to the source of extraction
at similar quality
53,823
61,832
72,994
54,769
Total net freshwater consumption**
11,739
12,351
12,345
11,665
Australia
Fresh surface water (lakes, rivers)
3,696
2,574
3,832
Water returned to the source of extraction at similar quality
3,696
2,574
3,832
* Municipal water consumption not reported as minimal
and not metered. While in New Zealand we have no
exposure to water-stressed areas, in Australia our
power stations are operating in areas that can suffer
from drought. Note we only hold the right to generate
electricity from water passing through the dams
associated with our Australian hydro power stations;
we do not hold the water rights themselves.
** Fresh water taken from Lake Manapōuri is released
into Doubtful Sound, and is not altered in terms of
water quality.
6 4
MERIDIAN INTEGRATED REPORT 2021CHAMPION NZ
AU
NZ’s largest
electricity generator
Generating <1% of the
National Energy Market
~30% national electricity generation
Enough electricity for about 167,000 homes yearly
White Hill
West Wind
Mill Creek
Te Āpiti
Te Uku
Harapaki – under
development
Waitaki and
Manapōuri
generate around
50% of NZ’s
total hydro
200K
Equivalent to the power
needs of around 200,000
NZ homes yearly
Hume
Burrinjuck
Keepit
1.7M
Equivalent to the
power needs of
around 1.7 million
NZ homes yearly
Mt Millar
Mt Mercer
Long-term power purchase
agreements with two other
wind farms
46K
Equivalent to the
power needs of
around 46,000
Australian
homes yearly
190K
Equivalent to the
power needs of
around 190,000
Australian
homes yearly
6 5
MERIDIAN INTEGRATED REPORT 2021CHAMPION Meeting the changing
needs of our customers
We are the largest generator of renewable
energy in Aotearoa. Our hydro dams and wind
farms generate around a third of the country’s
energy. In Australia our market share is much
smaller, and we are seen as a challenger brand
providing conscientious consumers with the ability
to offset the carbon emissions associated with
their energy usage, and innovative products that
allow them to engage with their energy use.
6 6
MERIDIAN INTEGRATED REPORT 2021CHAMPION Healthy customer growth across our three brands
Net double-digit growth in all segments – most notably in the Commercial and
Our Powershop brand in Australia focuses on sustainability. While the business
Industrial segment for Meridian and Residential and Small Business market share
is a small player in the Australian market overall, it continues to grow rapidly as
for Powershop – means Meridian is now the third-largest retailer in New Zealand.
more and more Australian consumers look for cleaner options.
New Zealand retail sales volumes for FY21 were 14% higher than last year. Sales
The requirement to pass on lower wholesale and input costs coupled with
increased in all segments; by 4% in residential, 24% in SME, 9% in agricultural,
market/default offer prices has led to continued margin pressure in retail in
13% in large business and 18% in corporate. Customer numbers were also up –
Australia. Nevertheless, Powershop has continued to grow its customer base
increasing by 7% from the previous year.
in a very competitive market, and our Net Promoter Score, which measures
Our New Zealand and Australian retail businesses, with their three distinctive
customer brands, continued to deliver sustained customer growth this year.
customer satisfaction, remains very high against the market. Given the erosion
of margins, our strategic focus going forward will be to lower our cost to serve
without compromising quality, and offering the best range of products,
Our Meridian brand appeals to New Zealand customers looking for a
priced competitively.
renewable energy generator that is deeply connected to the environment and
New Zealand. The brand achieved profitable growth through good volume and
margin management. Financial performance also improved despite increased
competition and pressure on retail margins.
Powershop in New Zealand uses innovative marketing communications to offer
By year end, Australian electricity customer numbers were 4% higher than in
the same time last year. In the same timeframe, Australian retail sales volumes
were 15% higher at an 8% lower average price. Our certified carbon-neutral
retail gas product, which is currently available in Victoria (and soon to be released
in New South Wales), had 43,905 customer connections as at 30 June 2021, up
customers greater personal control with its ‘shop’ proposition. This year the brand
from 37,878 the previous year.
hit a significant milestone – surpassing 100,000 customer accounts for the first
time thanks to a service proposition, pricing and brand positioning that stood
out in a bustling retail energy sector.
67
MERIDIAN INTEGRATED REPORT 2021CHAMPION p
o
h
s
r
e
w
o
P
e
t
a
r
o
p
r
o
C
–
n
a
d
i
r
e
M
i
E
M
S
,
i
r
g
A
,
s
e
R
–
n
a
d
i
r
e
M
i
5
0
4
8
,
1,075
4,130
3,200
Customer connections* (ICPs)
Customer sales volume (GWh)*
500,000
450,000
400,000
350,000
3
00,000
250,000
2
00,000
150,000
100,000
50,000
0
6
5
7
,
0
9
2
1
4
2
7
9
,
7
7
2
,
2
0
3
4
0
8
9
0
1
,
,
3
5
2
4
2
3
2
0
2
6
3
1
,
0
3
8
6
4
3
,
105,804
29,262
211,764
4
3
9
5
8
1
,
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
6
7
3
7
,
1
8
9
5
,
0
4
2
6
,
9
4
5
3
5
5
3
8
6
5
8
7
NZ AU**
FY18
NZ AU
FY19
NZ AU
FY20
NZ AU***
FY21
NZ
AU
NZ
AU
NZ
AU
NZ
AU
FY18
FY19
FY20
FY21
* Excludes the Tīwai Point aluminium smelter; <10 of the above ICPs are connected to the
transmission network; around 4,700 customer connections have distributed generation metering.
** Powershop Australia FY18 figure restated to correct value of 97,241.
*** Also 43,905 gas customer connections in Australia with a total of 1,711 TJ in volume.
Switching rates*
Customer satisfaction*
FY18
FY19
FY20**
FY21
Net Promoter Score (NPS)**
FY18
FY19
FY20
FY21
Powershop New Zealand
33.63%
30.35%
24.97%
25.81%
Powershop Australia
Meridian
17.63%
16.94%
14.18%
14.45%
Australian industry average***
New Zealand combined
21.16%
20.08%
16.98%
17.76%
Powershop New Zealand
53
(14)
55
New Zealand industry
20.95%
20.64%
18.91%
20.77%
Meridian
53
(18)
61
28
18
57
18
64
30
22
46
N/A
66
28
N/A
* Data from the Electricity Authority (emi.ea.govt.nz) and Meridian analysis.
Switching rates are not published by the market operator in Australia.
** Data restated based on final figures from the Electricity Authority.
6 8
New Zealand industry average***
14
*
Australia surveys both residential and business customers (with exception being customers
who opted “do not contact”). Powershop New Zealand and Meridian New Zealand residential
customers only.
** Calculated from a survey asking customers using a 0–10 scale “How likely is it that you would
recommend Meridian/Powershop to a friend or colleague?” and then subtracting the percentage
of detractors from the percentage of promoters. A positive value indicates that more customers are
promoters versus detractors (and vice versa). All results are a 12-month moving average from July
to June each financial year.
*** Perceptive Group Limited: New Zealand and Australia NPS Industry Benchmarks. FY21 data
currently unavailable.
MERIDIAN INTEGRATED REPORT 2021CHAMPION
Flux growth
underpins our success
Work on Harapaki
wind farm begins
A pipeline of
generation options
Flux is helping Meridian to lead
Most of Meridian’s customer base
Construction has begun on our new,
Our analysis suggests New Zealand
the energy transition with flexible,
has been successfully migrated to
$395 million wind farm in Hawke’s
needs approximately 12 TWh of new
innovative software that changes
the Flux platform under Project
Bay; it will be our sixth wind farm in
grid generation by 2030 to meet
the way we produce, sell and use
Momentum, with the remainder
Aotearoa. New Zealand’s second-
its 100% renewable energy target.
energy. The platform assists retailers
due for completion during 2021.
largest wind farm will have 41 turbines
A third of that growth (our current
with energy retail best practice,
This exciting achievement will enable
generating up to 176 MW of renewable
market share) equates to at least
operational improvements, cost
Meridian to grow customer numbers
energy and will increase our wind
seven Meridian generation projects
savings, risk reductions, digital
with a scalable and modern platform,
assets by 40% at a time when the
by 2035. Longer-term analysis suggests
transformations and change
bringing to life new products and
market is building. Construction
further system demand growth of at
management, and data insights.
enabling greater innovation for
will take around three years and is
least approximately 10 TWh between
Flux’s suite of market-leading
the Group.
expected to create 260 new jobs.
2035 and 2050.
software products allows energy
The platform is now ready for the
Our investment in Harapaki will not
Our current development pipeline
retailers to move faster, offer more
global market, with Flux confident
only boost our wind farm portfolio by
amounts to 1.9 GW (4,400 GWh),
pricing options and integrate with
of impressive results as it looks to
542 GWh per annum, but support our
and development challenges
a wide range of chosen partners.
acquire new clients in its three focus
plans for greater existing flexibility and
include the likelihood of needing
The products, which include an
markets before expanding to Asia
continued retail customer growth.
to re-consent consented sites for
industry-leading complex billing
and the United States.
engine, are backed by bespoke
customer service and comprehensive
privacy and security tooling. In the
past year client satisfaction with
the products has improved by 30%,
lifting the performance of teams
like Meridian and reducing the
cost to serve customers.
Harapaki will boost New Zealand’s
Since March 2020 Flux has transitioned
overall ability to take action on
to remote-first working, empowering
climate change, help accelerate the
its 200+ staff to work from anywhere
transformation of the economy to clean
in New Zealand, Australia and the UK.
energy sources, and encourage the
This has seen significant reductions
retirement of aging thermal plant. Five
in costs and carbon emissions, thanks
big projects currently underway by
better technology fit and the reality
that design, development and
construction timeframes are all subject
to site complexity. Inevitably, some
opportunities will not crystalise,
meaning more development options
will be needed.
to reduced commuting and increased
various energy companies will take the
While the Government is proposing
staff satisfaction due to flexible
country from 85% to 90% renewable
the Onslow-Manorburn pumped
working arrangements.
energy by 2023, putting New Zealand
storage scheme as a key plank towards
ahead of the 90% by 2025 target.
its 100% renewable system goal, the
Tīwai Point smelter closure could see
5 TWh of excess Southland-Otago
69
MERIDIAN INTEGRATED REPORT 2021CHAMPION Through integrated marketing strategies and
campaigns for our brands, we successfully
grew awareness, consideration and business
performance across our portfolio. We also
invested in our cornerstone partnerships
with the Department of Conservation for
the Kākāpō Recovery Programme, and
KidsCan. In total, we spent $19.5 million
on marketing activities.
70
generation attempting to flow
The second is engaging with
northward by as soon as the end of
potential developers on a green
2024. In response, we are currently
data hub in Southland that connects
investigating three initiatives.
First, we are working with South Island
industrial customers to assist with the
decarbonisation and electrification of
industrial plant. We estimate that the
potential new demand opportunity here
is 250 GWh to 500 GWh each year.
New Zealand to the east coast of
Australia. With the Australian data
centre market forecast to grow from
500 MW in 2021 to 2,200 MW in 2026,
we believe Southland could have a
hyperscale data centre in place in the
medium term that can service Australia
at significant discounts to its domestic
green options.
The third is the development of green
hydrogen for global industries like steel
manufacturing, fertiliser manufacture
and heavy transport (trucks, trains and
shipping), which are traditionally carbon
intensive and difficult to abate. At
year end we are preparing a feasibility
study to examine potential markets,
the technology and engineering
required and how we can incorporate
dry-year flexibility. It could provide a
large amount of New Zealand’s dry-
year reserve at a fraction of the cost of
building new power stations. Having
a large amount of demand with the
flexibility to turn it down or turn it off
during a dry year could add a huge
benefit to New Zealand in managing
the security of our energy supply.
That study is due to be completed
in August 2021.
MERIDIAN INTEGRATED REPORT 2021CHAMPION Significant progress was made on
the Hume Battery Energy Storage
System (BESS) project this year, with
the Board creating a subcommittee to
monitor progress and ultimately drive
the project to final approval. What is
unique about the Hume BESS project
is it will be the first pairing of a hydro
and battery storage system in the
Southern Hemisphere, and the only
known combination project that
dispatches into multiple regions
(New South Wales and Victoria).
We continue to look for new wind
and solar sites to enable us to meet
the expected increase in demand
for renewable generation.
Distributed energy
Shining examples of solar
We have been working to identify
and respond to distributed energy
opportunities, in particular rooftop and
small-scale solar, and storage batteries.
We continue to look at how we
Impact, ChargeForce, our ‘Curb
can introduce large-scale solar
Your Power’ demand response
in the medium term to build out
programme in Victoria and the
New Zealand’s energy portfolio.
‘Better Solar’ advisory service.
While the electrification of transport
is one of the biggest ways that we
can help combat climate change,
New Zealand needs a more extensive
charging infrastructure to help build
real momentum for the switch to
electric. This year we committed
$4 million to roll out a new network
of at least 200 EV chargers in the
next three years.
In Australia we have been encouraging
In New Zealand we have completed
the use of solar energy residentially
four significant commercial solar
for some time. Through Powershop
projects and contracted two more
Australia we have already successfully
under standard power purchase
introduced a range of initiatives to
agreements that will total 720 kWp.
help reduce demand on the electricity
All of these are with either Kiwi
grid and help customers save on their
Property or Lincoln University.
energy bills. These include Grid
The AC chargers we are rolling out
NZ SOLAR INSTALLATIONS
Northlands Mall, Kiwi Property
Te Kete Ika, Lincoln University
The Plaza, Kiwi Property
RFH Building, Lincoln University
Rec Centre, Lincoln University
Science South, Lincoln University
Total
YTD Perf
against
forecast
+8%
+4%
+1%
+5%
Completion
date
June 2019
October 2019
January 2020
July 2020
May 2021
June 2021
Size
185 kWp
102 kWp
111 kWp
94 kWp
168 kWp
60 kWp
+5%
720 kWp
are ideally suited to shopping malls,
retail and business parks and community
facilities and will complement the
existing DC fast chargers that are
available for those who need to charge
quickly and travel long distances. Twelve
chargers have been installed to date.
In Australia, we have encouraged
investment in battery installations
through our Charge Force Virtual
Power Plant programme. Through
the programme we have created a
battery offer for customers to cater
for this distributed energy resource.
We are also providing shared learnings
from the programme to the industry.
7 1
MERIDIAN INTEGRATED REPORT 2021CHAMPION
Equipping our people
for the changes ahead
We are very proud of our people and their
contributions to our success. This year, while
operations returned pretty much to normal
in New Zealand, our Australian team endured a
severe and prolonged lockdown that saw them
working out of the office for much of the year.
7 2
MERIDIAN INTEGRATED REPORT 2021CHAMPION By the time the team in Melbourne returned to the office, they had developed
We have continued to train our people in tikanga and proper pronunciation
new ways of working that were more effective and more connected with our
of te reo to reflect our commitment to respecting Te Ao Māori and connecting
Contact Centre (based in Masterton) and our customer base. Once they could
with our stakeholders. We have undertaken cultural training as a part of National
return, from late March, we took the opportunity to re-order the office space
Reconciliation Week in Australia to recognise Indigenous people’s rights.
to incorporate more remote working and lots of breakout areas. It is a tribute
to our Australian team’s resilience that they continued to work effectively and
enabled us to continue growing our Australian customer base across four states.
With the ongoing challenges COVID-19 continues to bring around the world, we
are particularly mindful of the wider impacts this may be having on our people.
Our Healthy Minds programme launched its second evolution during the year,
We think that helping teams perform well means making sure everyone feels
providing support, guidance and understanding to those dealing with mental
included, welcomed and valued for their experiences and perspectives. Getting
health issues. This included workshops and seminars for all staff.
that mix right is important to us because it equips us to better understand and
meet the needs of our changing demographics in the countries and markets
in which we compete. In the case of our Flux team, adopting a remote-first
approach, for example, has enabled us to source highly skilled professionals
who see the offices as hubs for connection and collaboration. Fitting our work
around people’s lives is part of giving them the flexibility to work in ways that
are best for them and their circumstances.
Overall our employee engagement held up well across the Group, with
engagement scores in Meridian, Powershop and our Australian companies at 78%.
This year, to help round out our understanding of overall cultural commitment, we
included Employee Net Promoter Score elements that asked things like “would you
recommend Meridian to your friends?”. 100% of our people said they would (NPS
of 100, with >50 being best practice).
73
MERIDIAN INTEGRATED REPORT 2021CHAMPION Employee engagement*
%
0
6
8
.
%
0
0
8
.
%
0
3
7
.
%
0
8
7
.
%
0
0
8
.
%
0
5
8
.
%
0
5
8
.
%
0
.
1
8
%
0
0
8
.
%
0
8
7
.
%
0
6
7
.
%
5
2
p
o
t
Z
N
t
e
k
r
a
m
l
a
t
o
T
%
5
2
p
o
t
l
a
b
o
G
l
*
*
Z
N
n
a
d
i
r
e
M
i
Z
N
p
o
h
s
r
e
w
o
P
*
*
*
a
i
l
a
r
t
s
u
A
n
a
d
i
r
e
M
i
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
* Measured by ‘level of agreement’ – the percentage
of staff who ‘agree’ or ‘strongly agree’ with the five
questions that collectively determine our Engagement
Index (previously calculated as a weighted mean).
From FY19 onwards Powershop New Zealand is
reported as part of Meridian New Zealand. Dam Safety
Intelligence is included but does not include Flux.
*** Meridian and Powershop Australia plus the Powershop
**
Call Centre in Masterton are all included in Australian
engagement numbers.
FY18
FY19
FY20
FY21
Dec
Y21
F
May
Meridian Group Workforce
New Zealand**
Australia***
Permanent employees
Female
Male
Female
Male
Total
Permanent full time*
438
481****
Permanent part time
23
4
Temp/Fixed-term employees
Temp/fixed-term full time
Temp/fixed-term part time
24
8
14
8
25
0
1
1
57
1
3
0
1,001
28
42
17
Flux has a remote-first workforce
and takes a weekly ‘pulse check’ of all
staff to gain insights into how people
at Flux are feeling at work, and to
enable fast action for any areas of
concern. This score is currently at
4.1 (an average rating out of 5 as
at 30 June 2021). Additionally and
on a fortnightly basis, we ask two
engagement-related questions –
A significant percentage
of our experienced staff
may soon be considering
retirement. To help
ensure that their skills
are passed on, we have
actively encouraged
young professionals
to join our teams
Total
493
507
27
61
1,088
our average score is 8.2 (scale of
Two of these employees are based in the UK. Both are male.
131 of these employees work for Flux New Zealand.
*
**
*** 3.41% of these staff are covered by collective bargaining agreements.
**** The Meridian Australia Chief Executive is included in New Zealand as part of the Group Executive Team.
1–10) for the 12 questions asked
since November 2020.
74
MERIDIAN INTEGRATED REPORT 2021CHAMPION
Future of work
Succession planning
Recognising that the future of work
leadership), technology, digitisation,
Succession planning is a key aspect
at Meridian will be very different from
automation and outward thinking,
of ensuring that we are a successful
what has been expected of a large
such as the external and global forces
business for years to come. Along
gentailer, this year we introduced
that will lead us to a new future or
with our Future of Work strategy
the role of a Future of Work lead to study
force change (sustainability as
we continue to build our talent
Generation and wholesale
staff turning age 65
A significant percentage of our
experienced staff may soon be
considering retirement – especially
those in our generation team. To
pending disruptions across our business
an example).
and succession strengths with the
successfully ensure that skills are
and to plan how we might respond.
Also, as part of future-proofing our
The Future of Work is about more than
workforce, we rolled out a bold new
just looking at our new, flexible way
recruitment, onboarding and core
of working. It is about ensuring our
people data platform that will give us
people have the opportunity to learn
much deeper insights into key first
new skills for future roles. Roughly
experiences and how our expectations
40–55% of our people will need to
of the people we hire compare with
be upskilled or reskilled into new or
their actual performance. Tracking
existing roles in the next five years.
and adjusting how we look for people
Our Future of Work strategy will look
and how they perform inside our culture
at the work we do today and how it will
will provide us with a much more
be completed in the future, including
evidence-based approach to appraising
how we create an engaging workplace
performance both initially and for the
experience for our people, how we
longer term. Next year we will add to
take a lifelong learning approach
the resources we make available to our
and what is needed in our workplace
people with a new Learning Hub that,
environment to ensure we are set up
for the first time, will put everything
implementation of Talent Pools for
passed on, we are encouraging young
hard-to-fill roles, along with new-
professionals to join our business and
skilling existing employees with skills
providing opportunities for people to
that will be more in demand in the
complete their trade apprenticeships
future. We are building frameworks
with us. Our goal is to ensure that, as
and success profiles for an executive
people consider retirement, they are
development pool that, once it is
supported to transition out of work
operational, we will look to use
through all levels of leadership.
smoothly (for example, through
part-time arrangements) and that
we have clear succession plans for
their areas of expertise.
Generation and Wholesale staff turning age 65
FY18
FY19
FY20
FY21
to collaborate, innovate and create
learning and development in one
In five years
9.1%
10.9%
12.5%
13.3%
together. The initiative also involves
place, meaning we can directly and
looking at things like psychological
easily access and align learning
In 10 years
20.3%
22.5%
23.9%
24.3%
safety (remote and face-to-face
content and records.
The common retirement age in New Zealand and Australia is 65.
75
MERIDIAN INTEGRATED REPORT 2021CHAMPION Total recordable injury frequency rate (TRIFR*)
Lost time injury frequency rate (LTIFR*)
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
2
8
.
1
8
8
.
0
0
7
.
0
6
4
.
5
6
6
2
.
1
4
2
.
9
9
.
3
2
7
.
1
4
3
.
1
4
9
.
2
3
2
.
1
3
0
.
1
5
9
4
1
.
3
6
.
3
1
8
1
.
4
4
7
.
1
16
14
12
10
8
6
4
2
0
0
1
.
3 9
0
8
.
6
3
.
7
4
4
.
3
FY18
FY19
FY20
FY21
FY18
FY19
FY20
FY21
* The TRIFR is calculated per 200,000 hours and includes all lost time, medical treatment and
restricted work injuries for Meridian New Zealand employees and contractors only. While
we have incident numbers for Powershop New Zealand, Powershop Australia and offsite
contractors, the TRIFR cannot be calculated as the number of hours worked for those
periods has not been recorded.
* FY21 data excludes Meridian Australia, Flux and offsite contractors.
* The LTIFR is calculated per 1,000,000 hours and includes all lost time work injuries for Meridian
New Zealand employees and contractors only. While we have incident numbers for Powershop
New Zealand, Powershop Australia and offsite contractors, the LTIFR cannot be calculated as the
number of hours worked for those periods has not been recorded.
* FY21 data excludes Meridian Australia, Flux and offsite contractors.
l
s
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y
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)
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More work needed
to increase safety
Safety is our greatest priority.
Our environments are technically
challenging with extremely large
hydro structures and close to large
There is a structured health and safety
management that we build into our
volumes of water. For those who
training plan for all employees relative
daily operations reflect our concern
predominantly work from home, risks
to their job, almost always to NZQA
for everyone who works with us.
include mental health and trip hazards.
standards. The management system
For example, we have site-specific
Because of the risk of incidents, we
is accredited to NZS7901 to meet the
Health and Safety Committees that
electrical and mechanical assets, and
are always evolving our health and
requirements of the Electricity Act.
represent all employees on our sites,
our people work in locations that range
safety culture to keep our people
We’re focussed on developing and
including contractors, and our Learning
from home to underground, inside
as safe as possible and to manage
maintaining an empathetic, caring
Teams are effective in responding
large structures, on tall wind and
wellbeing through pace and change.
culture – and the levels of safety
to events, creating an environment
76
MERIDIAN INTEGRATED REPORT 2021CHAMPION
where speaking up without fear or
We are an active member of Stay Live,
blame is encouraged, and improving
an electricity industry forum focusing
our opportunities to gather better
on working together across the sector
operational information and increase
to improve safety. Our Head of Safety
worker engagement. More detail can
is Deputy Chair of the forum.
be found in our Health and Safety
Policy at www.meridianenergy.co.nz/
investors/governance/policies.
Regrettably, despite all our efforts,
there was an increase in our reportable
injuries this year, with more injuries
These Committees meet every month
overall and more time off work due to
to identify hazards and review incidents
injury recorded. In FY21 our calculated
that have occurred. The Committee
total recordable injury frequency rate
representatives are freely elected by
for employees and contractors per
their colleagues and receive regular
200,000 hours worked (TRIFR) was
training in risk identification and
2.66 (compared with 1.23 in FY20),
controls. They are further supported
representing 18 people hurt (three
by dedicated business unit safety
contractors and 15 employees). The
specialists who provide extensive
main types of injury in FY21 were
technical expertise and support. All
sprains, strains and superficial injuries;
our people are required to log any
no serious injuries were reported.
incidents or near misses directly into
our Safety Manager system. We have a
stop work policy, which includes mental
health risk, and all corrective actions
are implemented as per our Health and
Safety Policy at www.meridianenergy.
co.nz/investors/governance/policies.
We apply this approach to safety across
our Australian and New Zealand assets,
including Flux and our contractors.
7 7
MERIDIAN INTEGRATED REPORT 2021CHAMPION Supporting the work of others
A stronger sense of belonging
Two key reasons for people being drawn
Despite some good progress in
working groups have initiatives to
to Meridian are that they perceive us as a
attracting and appointing more
help with the retention of women and
force for good through our commitment
female candidates this year, we still
embedding gender and non-binary
to renewable energy, and they consider
do not have a good gender balance in
practices wherever possible to assist
us a good corporate citizen.
the engineering parts of our business
in achieving our goals.
We have been a National Partner of
the Department of Conservation’s
or in leadership and senior-level roles
throughout the business.
In FY21, our average level of gender
pay equity was similar to that of FY20
Kākāpō Recovery Programme for five
Currently 37.2% of our staff in people
(96.7% compared with 96.3%).
years now, contributing to vital research
leadership and senior specialist
to help these precious native parrots
positions below Executive Team level
to increase in numbers. Many of our
are women. This is a positive lift from
people are involved in helping change
the 34.3% achieved on this measure in
the future for the kākāpō through
2020, but still means we have missed
volunteering and raising awareness
our target of 40% by year-end 2021.
of the plight of these beautiful birds.
To address this we are working on
KidsCan is another organisation close
to our hearts. This amazing charity
provides essentials to children affected
initiatives to deepen our understanding
of the drivers for women’s aspirations
to leadership within our company.
To address this, our recruitment
team will build and maintain an
internally run Māori and Pacifika
internship programme, leverage
our relationships with iwi to promote
work opportunities within our company
and use opportunities such as our
Harapaki wind farm development
to improve our relationships with iwi
and promote scholarships, upskilling
by poverty so they can participate in
We also continue to deepen our
and job opportunities.
learning. As Principal Partner, we work
commitment to developing staff,
with KidsCan to provide thousands of
with a particular focus on women, to
Kiwi kids with basics such as food,
reach their full potential as leaders.
raincoats, shoes and socks and basic
hygiene and healthcare items. This
year, we contributed more than
$1 million to help KidsCan to help
young New Zealanders in need and
we have committed to doing this every
year for at least the next three years.
The Board has agreed a new
gender-diversity, which is to achieve
a gender balance in leadership and
senior roles. In order to achieve this,
we will strive for recruitment to result
in appointments that are 45% men,
45% women and 10% any gender, by
2023. Our Gender and Team Rainbow
7 8
MERIDIAN INTEGRATED REPORT 2021CHAMPION Diversity by gender (headcount)
Women remain underrepresented
in the engineering parts of our
business, and in leadership and
senior-level roles throughout the
business. Currently 37.2% of our
staff in people leadership and
senior specialist positions below
Executive Team level are women,
against a target of 40% by year-
end 2021.
Traditionally, generation, with its
80% male workforce, has had the
biggest gender gap.
Includes Dam Safety Intelligence.
*
** Includes Flux-UK staff.
500
450
400
350
300
250
200
150
100
50
0
%
0
0
5
.
%
0
0
5
.
d
r
a
o
B
%
2
8
6
.
%
8
.
1
3
T
C
I
%
6
3
6
.
%
4
6
3
.
e
v
i
t
u
c
e
x
E
%
8
9
2
.
%
2
0
7
.
e
r
t
n
e
C
e
t
a
r
o
p
r
o
C
%
1
.
7
7
%
9
2
2
.
d
n
a
n
o
i
t
a
r
e
n
e
G
*
s
e
c
r
u
o
s
e
R
l
a
r
u
t
a
N
%
0
5
7
.
%
0
5
2
.
l
e
a
s
e
o
h
W
l
%
3
6
3
.
%
7
3
6
.
m
a
e
T
r
e
m
o
t
s
u
C
e
h
T
l
e
a
M
l
e
a
m
e
F
%
5
6
5
.
%
5
3
4
.
*
*
Z
N
x
u
F
l
%
3
9
6
.
%
7
0
3
.
a
i
l
a
r
t
s
u
A
We strive to build a culture where
Female representation
everyone is welcome. Our people
identify themselves in a range
of ways.
Female share of total workforce (%)
Females on the Board
FY18
FY19
FY20
FY21
41.8%
45.3%
46.2%
47.8%
25.0%
28.6%
50.0%
50.0%
Females in management positions (as % of total management workforce)
33.6%
37.2%
37.4%
36.1%
Females in junior management positions, i.e. first level of management
(as % of total junior management positions)
36.3%
40.8%
40.0%
40.1%
Females in top management positions, i.e. maximum two levels away from
the Chief Executive or comparable positions (as a % of total top management positions)
30.7%
33.6%
34.8%
32.4%
Females in management positions in revenue-generating functions (e.g. sales)
as a % of all such managers (i.e. excluding support functions such as HR, IT, and Legal)
29.4%
33.7%
34.0%
33.3%
Percentage of women in senior roles at 30 June*
32.8%
35.2%
34.3%
37.2%
* Parent company only, women in people leadership and senior specialist roles, excluding the Executive Team.
7 9
MERIDIAN INTEGRATED REPORT 2021CHAMPION
Diversity by age (headcount)
260
240
220
200
180
160
140
120
100
80
60
40
20
0
%
5
.
1
5
%
9
7
3
.
%
0
0
0
.
%
5
2
1
.
%
5
7
8
.
%
5
5
4
.
%
5
4
5
.
%
0
%
3
4
5
.
%
7
7
2
.
%
0
8
1
.
%
4
0
7
.
%
3
7
2
.
%
3
2
.
%
6
0
1
.
%
3
8
5
.
%
3
3
3
.
%
3
8
.
0
5
–
0
3
0
5
r
e
v
O
0
3
r
e
d
n
U
%
3
4
5
.
%
7
.
1
3
%
1
.
4
7
%
0
4
1
.
%
7
2
7
.
%
6
2
1
.
%
3
3
1
.
%
2
8
1
.
%
1
.
9
* Includes Dam Safety Intelligence
** Includes Flux-UK staff
Board
Executive
Corporate
Centre
ICT
Generation
and Natural
Resources*
Wholesale
The Customer
Team
Flux NZ**
Australia
We are committed to achieving pay
Group % ratio female salary to male salary
Percentage of women by salary band
equity for all employees in similarly
sized roles and with similar skills,
experience and accountabilities.
In FY21 the average level of gender
pay equity was similar to that in FY20
(96.3 compared with 96.7). The average
G–H
K–L
I–J
E–F
C–D
A–B
salary for men across the organisation
remains higher than the average salary
for women. There are still more men
than women at senior levels. What
we are seeing is a healthy increase
in the proportion of females at mid-
senior levels.
8 0
by salary band*
FY19
FY20
FY21
by salary band*
FY19
FY20
FY21
91.5%
89.9%
88.7%
98.1%
95.8%
98.4%
95.4%
96.1%
96.1%
99.2%
98.3%
95.4%
96.9%
97.9%
100.6%
99.7%
99.0%
100.8%
K–L
I–J
G–H
E–F
C–D
A–B
18.5%
24.1%
28.6%
27.0%
32.0%
31.0%
30.8%
32.9%
33.2%
43.2%
43.3%
48.7%
59.7%
55.4%
54.8%
61.6%
70.8%
72.7%
Average of averages
96.8%
96.3%
96.7%
Average of averages
40.1%
43.1%
44.8%
* K and L are our highest salary bands and A and B are our lowest.
* K and L are our highest salary bands and A and B are our lowest.
MERIDIAN INTEGRATED REPORT 2021CHAMPION
Keeping our technology
systems safe, stable and secure
Increasing digitalisation, a reliance on
fora to collaborate with government,
ICT systems, and flexible approaches
business partners and industry peers
to working throughout the COVID-19
in understanding and responding to
pandemic have made managing cyber
new and emerging threats.
risk an even greater priority for many
industries, including our own. A failure
to protect our technology systems,
information and people from cyber
In the past year we have continued
to invest in and strengthen our
cybersecurity capabilities, particularly
threats could have adverse impacts on
in terms of embarking on ‘zero
both our company and our customers.
trust’ architecture that includes:
Across the business, we apply a range
of measures to manage our cyber risk,
including policies and procedures,
cybersecurity capabilities, continuous
threat monitoring and event-detection
capabilities. To equip our people with
the knowledge and skills to combat
cyber threats, we have developed
a security training and awareness
programme covering topics such as
network segregation; identity and
access management; monitoring
and reporting; third-party risk
management; and training and
awareness for our people. We remain
focused on continually improving
our security capabilities to counter
dynamic and advanced cyber threats
through an outcome-driven approach.
By managing and securing our digital
phishing, incident reporting, passwords
environment, our goal is to give our
and keeping information and devices
people the confidence to understand
safe. We also conduct regular exercises
and manage cyber risk, realise new
to test our cyber resilience and
business opportunities, unlock value
business continuity processes. We
and continue to provide essential
are a contributing member of several
services to our customers.
81
MERIDIAN INTEGRATED REPORT 2021CHAMPION Rewarding
energy
8 2
MERIDIAN INTEGRATED REPORT 2021REWARDING ENERGY 8 3
MERIDIAN INTEGRATED REPORT 2021REWARDING ENERGY Our approach to
remunerating our people
Attracting, retaining and motivating talented
people, and rewarding them for delivering
desired business performance and long-term
shareholder value, are key to Meridian’s success.
8 4
MERIDIAN INTEGRATED REPORT 2021REWARDING ENERGY Our remuneration philosophy is guided by the principles that remuneration will:
Fixed remuneration is benchmarked to market remuneration data, and permanent
• be clearly aligned with our company values, culture and strategy
•
support us to attract, retain and engage employees
• be fair, equitable and flexible
• appropriately reflect market conditions and the organisational context
•
recognise and reward high performance
• align with creating shareholder value.
The People and Remuneration Committee regularly reviews remuneration
policy and practice and provides recommendations to the Board. The Board
approves the executive balanced scorecard objectives, and company financial
performance targets and outcomes on an annual basis.
employees may participate in a short-term incentive (STI) scheme at the discretion
and invitation of the Board. As a minimum, Meridian pays the Living Wage for all
permanent and fixed-term employees. A range of benefits is provided, including
employee insurance, enhanced parental leave provisions, the ability to purchase
additional leave, and access to purchasing discounts. The Executive Team and
Chief Executive also have the opportunity to participate in a long-term incentive
(LTI) plan. Both the STI scheme and LTI plan are variable, performance-based
incentives, awarded only if specific financial and non-financial performance
hurdles are met, and at the discretion of the Board.
8 5
MERIDIAN INTEGRATED REPORT 2021REWARDING ENERGY Fixed remuneration
Long-term incentive (LTI)
Fixed remuneration includes
An LTI plan is offered at the discretion
base salary and matched KiwiSaver
of the Board to the New Zealand
contributions of up to 4%. Salaries
Executive Team, to align executives’ and
are reviewed annually.
shareholders’ interests and optimise
Short-term incentive (STI)
The STI is an at-risk incentive that
may be offered for a specific year, by
invitation from the Board. Potential
STI payments reflect the achievement
of predetermined company profit
levels and individual performance
objectives aligned to business
strategies and goals, and are wholly
discretionary. An STI may be paid
subject to a behaviour gate and
company financial performance
hurdles, and at the discretion of
the Board.
long-term shareholder returns.
The LTI opportunity is 40% of salary
for the Chief Executive, and 30%
of salary for the Executive Team.
Vesting of the LTI is contingent on
their meeting both absolute and
relative Total Shareholder Return
(TSR) performance hurdles at the
conclusion of a three-year period.
Further details of the LTI plan are
provided on pages 156-157.
Employee share ownership
Employees are invited to join Meridian’s
employee share ownership plan,
The STI opportunity within total
MyShare. Under MyShare, Meridian
remuneration reflects the complexity
shares are purchased for participating
and level of the roles. In FY21 the
employees, funded by monthly pay
Chief Executive had an STI opportunity
deductions of between $500 and
of 50% of his salary, and the Executive
$5,000 per annum. After three years
Team STI opportunity was 30%.
participants may be eligible for award
shares subject to ongoing employment
(Tenure Award Shares) and the
company TSR outperforming a peer
group of competitors (Performance
Award Shares). In FY21, 58.5% of
employees participated in MyShare,
and this has increased to 60% for FY22.
8 6
MERIDIAN INTEGRATED REPORT 2021REWARDING ENERGY Employee remuneration range
The number of employees and
former employees of Meridian and its
subsidiaries (not including directors)
who during the year ended 30 June
2021 received cash remuneration
and other benefits (including at-risk
performance incentives, KiwiSaver
contributions and redundancy
compensation) exceeding $100,000
is outlined opposite:
Band
Total Group
100,000 – 109,999
110,000 – 119,999
120,000 – 129,999
130,000 – 139,999
140,000 – 149,999
150,000 – 159,999
160,000 – 169,999
170,000 – 179,999
180,000 – 189,999
190,000 – 199,999
200,000 – 209,999
210,000 – 219,999
220,000 – 229,999
230,000 – 239,999
240,000 – 249,999
250,000 – 259,999
260,000 – 269,999
270,000 – 279,999
280,000 – 289,999
290,000 – 299,999
97
64
68
56
43
38
26
300,000 – 309,999
310,000 – 319,999
330,000 – 339,999
340,000 – 349,999
350,000 – 359,999
360,000 – 369,999
370,000 – 379,999
30
380,000 – 389,999
390,000 – 399,999
490,000 – 499,999
520,000 – 529,999
530,000 – 539,999
610,000 – 619,999
820,000 – 829,999
830,000 – 839,999
2,030,000 – 2,039,999
Terminated employees
19
19
14
7
8
6
3
2
3
6
1
1
3
3
1
2
1
2
3
1
5
1
1
1
1
2
1
1
540
42
8 7
MERIDIAN INTEGRATED REPORT 2021REWARDING ENERGY Chief executive remuneration for performance periods
ending 30 june 2021 and 30 june 2020
Year
FY21
FY20
Base
salary
Taxable
benefits6
Fixed
rem7
MyShare8
Pay for performance
Total rem
STI9
LTI10
Subtotal
$1,071,125
$42,845
$1,113,970
$2,500
$527,910
$664,066
$1,191,976
$2,308,446
$1,071,125
$42,845
$1,113,970
$2,500
$517,216
$406,155
$923,371
$2,039,841
The Chief Executive is entitled to receive a matching employer KiwiSaver contribution of 4% of gross taxable earnings.
The company’s KiwiSaver contributions for the Chief Executive, paid within the FY21 period were $78,459.
Five-year remuneration summary
Year
FY21
FY20
FY19
FY18
FY17
Single figure rem
% STI
against maximum
% vested LTIs
against maximum
Span of LTI
Performance Period
$2,308,446
$2,039,841
$1,695,195
$2,156,484
$2,379,768
66.75%
78.69%
90.91%
72.8%
79.29%
100%
100%
100%
75%
100%
FY19–FY21
FY18–FY20
FY17–FY19
FY16–FY18
FY15–FY17
Neal Barclay was appointed as Chief Executive effective from 1 January 2018.
Chief Executive remuneration for FY18 therefore reflects the sum of Chief Executive remuneration for Neal Barclay
and previous Chief Executive Mark Binns.
Notes
The FY21 MyShare figure is the
$2,500 award shares related to
participation in the MyShare plan
for FY19, which vested in FY21.
The FY21 LTI figure is payment
relating to the vesting of the FY19
LTI plan. It is higher than the payment
received in FY20 given the FY18 offer
(which vested in FY20) was adjusted
to reflect the fact that the Chief
Executive had been appointed to
that role partway through FY18.
6 Taxable benefits are 4% company KiwiSaver contributions on salary.
7 Fixed remuneration is salary plus company KiwiSaver contributions.
8 MyShare is gross value of award shares received in the applicable period.
9 STI is the potential payment based on performance achieved for the applicable period and includes 4% company KiwiSaver contributions.
10 LTI is grossed up for PAYE, and in FY19 included 4% company KiwiSaver contributions. The LTI plan changed in FY20.
8 8
MERIDIAN INTEGRATED REPORT 2021REWARDING ENERGY Breakdown of Chief Executive pay for performance (FY21)
Description
Performance measures
STI
LTI
50% of base salary. Combination
of company result and a scorecard
of financial and non-financial
company measures
Conditional awards of shares
under LTI plan. 40% of base salary
60% weighting on company performance (company profit,
which comprises Group EBITDAF minus capital charge)
40% weighting on performance against a Board-approved
scorecard comprising financial and non-financial objectives,
as shown in the table below
% achieved
111.3%
70%
Absolute TSR over the relevant assessment period:
Hurdle met
• must be positive and >50th percentile/median TSR
of the peer group11
Relative TSR – if positive and:
100%
• >50th percentile TSR of peer group, at least 50% vests
• ≥75th percentile TSR, 100% vests
• between the 50th and 75th percentile TSRs of peer group,
progressively vests on a straight-line basis
Pay for Performance Scorecard Measures for FY21
For FY21, the Board-approved scorecard comprising up to 40% of the Chief Executive’s STI was measured as follows:
Performance area
Measures
Weighting
Employees
Customer
Risk
Trend in engagement score and TRIFR
Customer growth
Australian customer numbers and assets
Successful transition to accommodate significant market changes
Future development
Migration to single customer platform
20%
20%
20%
20%
20%
11 The peer group comprises AGL Energy, Origin Energy, Contact Energy, Mercury NZ, Trustpower and Genesis Energy.
8 9
MERIDIAN INTEGRATED REPORT 2021REWARDING ENERGY Five-year summary – TSR performance
(Meridian Energy vs peer group)
Chief Executive remuneration
performance pay for FY21
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
-10%
%
5
8
i
n
a
d
i
r
e
M
i
n
a
d
e
m
p
u
o
r
g
r
e
e
P
58%
%
9
5
43%
%
7
1
18%
%
4
1
9%
%
9
-8 %
FY17
FY18
FY19
FY20
FY21
3,000
2,500
2,000
1,500
1,000
500
0
$(000)
I
T
L
l
e
b
a
i
r
a
v
l
a
u
n
n
A
n
o
i
t
a
r
e
n
u
m
e
r
d
e
x
i
F
27%
30%
43%
18%
25%
57%
100%
Fixed Remuneratio n
Meets Expectations
Maximum
The TSR summary above illustrates the performance of Meridian’s
The chart above depicts elements of the Chief Executive’s
shares against a peer group of companies between 1 July 2017
remuneration design under various scenarios for the year ended
and 30 June 2021. TSR performance outcomes are independently
30 June 2021, as a proportion of total remuneration.
validated by external experts.
9 0
MERIDIAN INTEGRATED REPORT 2021REWARDING ENERGY
Other remuneration
report components
LTIS
The number of Share Rights that
the company’s TSR is equal to or lower
In August 2019 the Board approved
vest is dependent on the following
than the Absolute TSR Benchmark,
a new LTI plan to replace Meridian’s
Vesting Conditions:
• Meridian’s TSR over a three-year
performance period (Performance
Period) relative to Meridian’s cost
of equity and the TSR over the
Performance Period of a defined
group of NZX Main Board and
ASX listed peer companies
(Performance Hurdles).
no Absolute Share Rights will vest. If
the company’s TSR is greater than the
Absolute TSR Benchmark, 100% of the
Absolute Return Share Rights will vest.
The number of Relative Return Share
Rights that vest is determined by the
company’s TSR in the Performance
Period relative to the peer group.
For any of the Relative Return Share
•
If the participant continues to
Rights to vest, the company’s TSR
be employed by Meridian during
must be greater than or equal to the
the vesting period (Employment
Condition).
Under the new LTI plan, the company
issues rights to acquire ordinary shares
Performance hurdles
in the company (Share Rights) to
Share Rights are granted in two
eligible participants who accept the
tranches:
• Absolute Return Share Rights.
• Relative Return Share Rights.
For Absolute Return Share Rights
to vest, the company’s TSR must
be greater than the absolute TSR
50th percentile/median TSR of the
peer group. 100% of the Share Rights
will vest on meeting the 75th percentile
TSR of the peer group, with vesting
on a straight-line basis between
these two points.
For each three-year plan, an
independent external expert measures
the TSRs of Meridian and the peer group
of companies along with the outcome
on the progressive vesting scale.
previous LTI plan. Set out below is a
summary of the new LTI plan, which
was first offered in FY20 (for the
period commencing on 1 July 2019
and ending on 30 June 2022). A
summary of the previous LTI plan,
which was last offered in FY19 (for the
period commencing on 1 July 2018
and ending on 30 June 2021) is also
included below.
New LTI plan
offer to participate in the LTI plan. Each
Share Right entitles the holder to one
ordinary share in the company and an
additional number of shares equal to
the value of gross cash dividends per
share that would have been paid to a
New Zealand tax resident who held a
share for the duration of the vesting
period, calculated using a 10-day,
volume-weighted average price.
benchmark that is set at the beginning
Share Rights will lapse if the Vesting
of the vesting period with regard to the
Conditions are not satisfied (although
company’s cost of equity (Absolute TSR
Benchmark) on a compounding annual
basis over the Performance Period. If
this is subject to the Board’s discretion in
relation to the Employment Condition).
9 1
MERIDIAN INTEGRATED REPORT 2021REWARDING ENERGY Previous LTI plan
Other information
The previous LTI plan was a share
If the performance hurdles have
For each three-year plan, an
Meridian has a policy to ensure that
loan and cash bonus scheme, where
been achieved, a progressive vesting
independent external expert
the participants of the executive LTI
executives purchased Meridian shares
scale is applied to determine how
measures the TSRs of Meridian and
plan are not permitted to enter into
via an interest-free loan from the
many shares vest:
the peer group of companies along
transactions (whether through the
company, with the shares held on
trust by the LTI plan trustee. Any
shares awarded depend on whether
the following performance hurdles
are met over a three-year period:
•
If the company’s TSR over the
three-year period exceeds the
50th percentile TSR of the
benchmark peer group, at
least 50% of an executive’s
• The company’s absolute TSR,
shares will vest.
which must be positive.
•
100% shares will vest on meeting
• The company’s TSR compared
the 75th percentile TSR of the
to a benchmark peer group.
peer group, with vesting on a
straight-line basis between
these two points.
• No shares will vest if the company’s
TSR is less than the 50th percentile
TSR of the peer group.
Over the three-year period, any
dividends paid on the shares are
applied to the executive’s loan
balance. Once the vesting level has
been confirmed, a cash amount (after
the deduction of tax, but before other
applicable salary deductions) is used
to repay the executive’s outstanding
loan balance.
with the outcome on the progressive
use of derivatives or otherwise)
vesting scale. If a TSR is not positive
that limit the economic risk of
(i.e. in absolute terms is less than
participating in the plan.
Meridian has written agreements
with the Chief Executive and
executives setting out the terms
of their employment.
Neal Barclay will be employed as
Chief Executive until his employment
is terminated in accordance with his
employment agreement. Pursuant
to the employment agreement, the
Chief Executive and Meridian have
mutual rights of termination on the
provision of six months’ written
notice. Meridian may also terminate
the Chief Executive’s employment
on the grounds of redundancy or
serious misconduct or where an
act of bankruptcy is committed.
zero), or if a TSR does not meet the
peer group relative TSR hurdle of
50th percentile, the shares are
forfeited to the trustee and the
relevant executive receives no
benefits under the LTI plan. Where
the TSR is greater than the 50th
percentile of the benchmark peer
group, but below the 75th percentile,
shares that have not vested will also
be forfeited.
For the LTI plan that vested at the
end of 2021, the level of vesting
was 100% (2020: 100%). Therefore,
the outstanding balance of the
interest-free loans at 30 June 2021
of $0.65 million (2020: $0.5 million)
has now been repaid. A total
amount of 238,725 shares has been
transferred to the eligible participants
(2020: 208,707) and 96,173 shares
forfeited for executives who are
no longer employed by Meridian
(2020: 154,388).
9 2
MERIDIAN INTEGRATED REPORT 2021REWARDING ENERGY Approved director remuneration for FY21
Director remuneration is paid from the total director fee pool that was
approved by shareholders at the Annual Meeting of 28 October 2016.
Shareholder-approved annual director fee pool
Board fees
Committee fees
Total pool
Individual Board-approved annual fee breakdown
Position held
Chair
Deputy Chair
Director
FY20
FY21
$1,000,000
$1,000,000
$100,000
$100,000
$1,100,000
$1,100,000
FY20
FY21
$200,000
$196,500
$140,000
$137,550
$110,000
$108,075
Audit and Risk Committee Chair
$22,500
$ 22,106
Audit and Risk Committee member
$10,000
$9,825
Safety and Sustainability Committee Chair
$15,000
$14,738
Safety and Sustainability Committee member
$9,200
$9,039
People and Remuneration Committee Chair
$15,000
$14,738
People and Remuneration Committee member
$9,100
$8,941
For FY21, director remuneration for each position decreased from that payable in
FY20, as the total number of directors on the Board increased, and directors also
served on additional committees. However, the total director fee pool remained
unchanged from the amount approved by shareholders at the Annual Meeting
of 28 October 2016.
9 3
MERIDIAN INTEGRATED REPORT 2021REWARDING ENERGY Director remuneration received in FY21
Name of director
Board
fees
Audit & Risk
Committee
People &
Remuneration
Committee
Safety &
Sustainability
Committee
Total
remuneration
Mark Verbiest12 (Chair)
$196,500
–
Peter Wilson (Deputy Chair)
$137,550
$9,825
Mark Cairns
$108,075
–
Jan Dawson
$108,075
$9,825
Anake Goodall
$108,075
–
Michelle Henderson
$108,075
$9,825
Julia Hoare
$108,075
$22,106
(Chair)
–
–
–
$14,738
(Chair)
–
–
–
Nagaja Sanatkumar
$108,075
–
$8,941
–
$196,500
$9,039
$156,414
$14,738
(Chair)
$122,813
–
$132,638
$9,039
$117,114
$9,039
$126,939
–
–
$130,181
$117,016
Total
$982,500
$51,581
$23,679
$41,855
$1,099,615
Directors are reimbursed for all reasonable and properly documented expenses
incurred in performing their duties as Meridian directors. No additional payments
or benefits were received by directors in FY21.
Meridian employees appointed as directors of Meridian subsidiaries do not
receive any directorship fees.
94
12 Does not receive additional fees for Committee membership.
MERIDIAN INTEGRATED REPORT 2021REWARDING ENERGY Further disclosures
Further disclosures required by the
NZX Listing Rules, the Companies Act 1993
and other legislation and rules
9 5
MERIDIAN INTEGRATED REPORT 2021FURTHER DISCLOSURES Meridian Energy
The table opposite outlines the current
directors of Meridian Energy Limited.
There were no changes among the
Company name
Directors
Meridian Energy Limited
Mark Cairns, Jan Dawson, Anake Goodall, Michelle Henderson,
Julia Hoare, Nagaja Sanatkumar, Mark Verbiest, Peter Wilson
people who held office as directors of
The Board has determined that as at 30 June 2021, all Meridian directors are
Meridian Energy Limited during FY21.
independent. The factors relevant to this determination are that no director:
• has, within the past three years, been employed in an executive role
by Meridian or any of its subsidiaries
• has held, within the past 12 months, a senior role in a provider of
material professional services to Meridian or its subsidiaries
• has had, within the past three years, a material business relationship
with Meridian or its subsidiaries
•
is a substantial product holder of Meridian, or a senior manager of, or a
person otherwise associated with a substantial product holder of Meridian
• has had, within the past three years, a material contractual relationship
with Meridian or any of its subsidiaries
• has close family ties with anyone in the categories listed above
• has been a director of Meridian for a length of time that may
compromise independence.
Current Board
and Executive team
gender composition
In accordance with NZX Listing
Rules, the gender make-up of
Meridian’s directors and officers
as at 30 June 2021 is:
Number of directors
Percentage of directors
Number of officers
Percentage of officers
As at 30 June 2021
As at 30 June 2020
Female
Male
Female
Male
4
50%
4
36%
4
50%
7
64%
4
50%
4
40%
4
50%
6
60%
96
MERIDIAN INTEGRATED REPORT 2021FURTHER DISCLOSURES Meridian subsidiaries
New Zealand subsidiaries
The opposite and following tables list
Company name
Company number
Directors
Further information
the subsidiaries of Meridian Energy
Limited during the accounting period,
Dam Safety Intelligence Limited
6152623
Neal Barclay, Tania Palmer
No changes
and any changes to those subsidiaries
Flux Federation Limited
6292491
Neal Barclay, Michael Roan
No changes
and among the people who held office
as directors.
Meridian Energy Captive Insurance Limited
1612020
Neal Barclay, Michael Roan
No changes
Meridian Energy International Limited
1114014
Neal Barclay, Michael Roan
No changes
Meridian Limited
863312
Neal Barclay, Michael Roan
No changes
Meridian LTI Trustee Limited
4644639
Anake Goodall, Jan Dawson
No changes
Powershop New Zealand Limited
1978930
Neal Barclay, Michael Roan
Amalgamated with Meridian Energy Limited
on 30 April 2021 and has been removed from
the Companies Office register
Powershop New Zealand Limited
8184062
Neal Barclay, Michael Roan
Incorporated on 7 May 2021
Three River Holdings No. 1 Limited
1920517
Neal Barclay, Michael Roan
No changes
Three River Holdings No. 2 Limited
1920515
Neal Barclay, Michael Roan
No changes
9 7
MERIDIAN INTEGRATED REPORT 2021FURTHER DISCLOSURES Australian subsidiaries
Company name
Directors
Further information
Meridian Australia Holdings Pty Limited
Neal Barclay, Tony Sherburn, Mike Roan, Jason Stein
Meridian Energy Australia Pty Limited
Neal Barclay, Tony Sherburn, Mike Roan, Jason Stein
Meridian Energy Markets Pty Limited
Neal Barclay, Tony Sherburn, Mike Roan, Jason Stein
Meridian Finco Pty Limited
Neal Barclay, Tony Sherburn, Mike Roan, Jason Stein
Meridian Wind Australia Holdings Pty Limited
Neal Barclay, Tony Sherburn, Mike Roan, Jason Stein
Meridian Wind Monaro Range Holdings Pty Limited
Neal Barclay, Tony Sherburn, Mike Roan, Jason Stein
Meridian Wind Monaro Range Pty Limited
Neal Barclay, Tony Sherburn, Mike Roan, Jason Stein
Mt Millar Wind Farm Pty Limited
Neal Barclay, Tony Sherburn, Mike Roan, Jason Stein
Mt Mercer Windfarm Pty Limited
Neal Barclay, Tony Sherburn, Mike Roan, Jason Stein
Powershop Australia Pty Limited
Neal Barclay, Tony Sherburn, Mike Roan, Jason Stein
GSP Energy Pty Limited
Neal Barclay, Tony Sherburn, Mike Roan, Jason Stein
Rangoon Energy Park Pty Limited
Neal Barclay, Tony Sherburn, Mike Roan, Jason Stein
Wandsworth Wind Farm Pty Limited
Neal Barclay, Tony Sherburn, Mike Roan, Jason Stein
No changes
No changes
No changes
No changes
No changes
No changes
No changes
No changes
No changes
No changes
No changes
No changes
No changes
UK subsidiaries
Company name
Flux-UK Limited
Directors
Further information
Tania Palmer, Guy Waipara
No changes
9 8
MERIDIAN INTEGRATED REPORT 2021FURTHER DISCLOSURES Particulars of entries in the
interests register made during
the accounting period
Shareholders can review
Meridian Energy Limited’s full
interests register on request.
In accordance with sections 140 and
211(e) of the Companies Act 1993,
the table opposite lists the general
disclosures of interest by directors
of Meridian Energy Limited and
its subsidiaries.
Name
Position
Disclosures
Mark Cairns
Director, Meridian Energy Limited and
Meridian LTI Trustee Limited
Coda GP Limited, Director**
Freightways Limited, Director*
Northport Limited, Director**
Port of Tauranga, Employee**
Port of Tauranga Trustee Company Limited, Director**
Quality Marshalling Limited, Chair**
Sanford Limited, Director*
Jan Dawson
Director, Meridian Energy Limited and
Meridian LTI Trustee Limited
AIG Insurance New Zealand Limited, Director
Air New Zealand Limited, Bondholder**
Anake Goodall
Director, Meridian Energy Limited and
Meridian LTI Trustee Limited
Air New Zealand Limited, Director and Shareholder
Mercury NZ Limited, Shareholder
Westpac New Zealand Limited, Chair
Ekos, Chair**
Impax Environmental Markets, Shareholder
Moreton Resources Limited, Shareholder
Seed the Change – He Kākano Hāpai, Chair
Michelle Henderson Director, Meridian Energy Limited
Cycling New Zealand Incorporated, Board Member*
Fulton Hogan Australia (Management) Pty Limited, Director*
Fulton Hogan Australia Pty Limited, Director*
Fulton Hogan Construction Pty Limited, Director*
Fulton Hogan Industries Pty Limited, Director*
Fulton Hogan Land Development Limited, Director*
Fulton Hogan Limited, Director*
Fulton Hogan Quarries Pty Limited, Director*
Fulton Hogan Transport Pty Limited, Director*
Fulton Hogan Utilities Pty Limited, Director*
Southern Institute of Technology Engineering and Trades Advisory Committee, Member
Youthline Southland Charitable Trust, Trustee
Julia Hoare
Director, Meridian Energy Limited
Auckland International Airport Limited, Director and Shareholder
AWF Madison Limited (now known as Accordant Group Limited), Director**
External Reporting Advisory Panel, Member**
Institute of Directors, Vice President
Mercury NZ Limited, Shareholder
Port of Tauranga, Director and Shareholder*
Sustainable Finance Forum, Leaders’ Group, Member
The a2 Milk Company Limited, Deputy Chair and Shareholder
Watercare Services Limited, Deputy Chair**
9 9
MERIDIAN INTEGRATED REPORT 2021FURTHER DISCLOSURES Name
Position
Disclosures
Nagaja Sanatkumar Director, Meridian Energy Limited
Amazon.com, Inc, Shareholder
Cawthron Institute, Director*
First Fibre Bidco NZ Limited, Director*
First Fibre Midco Limited, Director*
Imagen8 Limited, Director
Mediaworks Investments Limited, Director*
Mercury NZ Limited, Shareholder*
New Zealand Post Limited, Director
Nova Digital Consulting Limited, Director and Principal
Trustpower Limited, Bondholder*
UFF Holdings Limited, Director*
Ultrafast Fibre Limited, Director*
Vector Limited, Bondholder*
Z Energy Limited, Bondholder*
Mark Verbiest
Director, Meridian Energy Limited
ANZ Bank New Zealand Limited, Director
Freightways Limited, Chair and Shareholder
Infratil Limited, Shareholder
Mycare Limited, Shareholder
NZ Treasury Advisory Board**
Southern Alps Rescue Trust, Trustee
Southern Lakes Art Festival Trust, Trustee
Willis Bond Capital Partners Limited, Chair and Shareholder**
Willis Bond General Partner Limited, Chair**
Peter Wilson
Director, Meridian Energy Limited
Arvida Group, Chair
Contact Energy Limited, Shareholder
Genesis Energy Limited, Shareholder and Bondholder
Infratil Limited, Shareholder
Mercury NZ Limited, Shareholder and Bondholder
* Entries added and effective during the year ended 30 June 2021.
** Entries removed during the year ended 30 June 2021.
1 0 0
MERIDIAN INTEGRATED REPORT 2021FURTHER DISCLOSURES During FY21, the disclosures opposite
were made in accordance with section
148 of the Companies Act 1993.
Director
Nature of
relevant interest
Date
Michelle Henderson
Beneficial interest
1) 22 March 2021
2) 21 April 2021
Acquisition/
Disposal
Acquisition
Julia Hoare
Beneficial interest
22 March 2021
Acquisition
Mark Verbiest
Beneficial interest
7 April 2021
Acquisition
Class
Shares
Shares
Shares
Number
acquired
Consideration
received per share
1) 1,781.7857
2) 1,742.882
1) $5.550
2) $5.725
4,000
$5.375
10,000
$5.266
Director indemnity
and insurance
Pursuant to section 162 of the
Companies Act 1993, as permitted
by Meridian’s constitution, Deeds
of Indemnity have been given to
directors for potential liabilities and
costs they might incur for actions or
omissions in their capacity as directors.
From 1 May 2021, Meridian’s directors’
and officers’ liability insurance was
renewed to cover risks normally
covered by such policies. Insurance is
not provided for dishonest, fraudulent,
malicious or wilful acts or omissions.
Donations
The Meridian Energy Group made
donations totalling $0.3 million during
FY21. Meridian does not make donations
to political parties. All donations must
be approved by the Board.
Auditor
Interests in Meridian securities
Senior managers’ equity holdings
The Auditor-General has appointed
In accordance with NZX Listing
As at 30 June 2021, the following
Mike Hoshek of Deloitte Limited as
Rule 3.7.1(d), as at 30 June 2021
senior managers had relevant interests
auditor of the company. Meridian
Meridian Energy Limited directors
in Meridian Energy Limited shares.
and its subsidiariets paid $0.8 million
had the following relevant interests
(2020: $0.8 million) to Deloitte Limited
in Meridian Energy Limited Quoted
as audit fees in FY21.
Financial Products.
The fees for other services under- taken
by Deloitte Limited during FY21 totalled
$0.1 million (2020: $0.1 million). These
related to other assurance activities,
including reviews of carbon emissions,
securities registers, vesting of the
executive LTI plan, the solvency return
Director
Number
of shares*
Number
of bonds
Mark Cairns
235,000
Jan Dawson
51,300
Anake Goodall
60,000
of Meridian Energy Captive Insurance
Michelle Henderson
3,525
Limited and trustee reporting.
Meridian has also paid $14,000
(2020: $14,000) to Deloitte Limited
Julia Hoare
4,000
Nagaja Sanatkumar
3,723
for administrative and other advisory
Mark Verbiest
45,000
services to the Corporate Taxpayers
Group (CTG), of which Meridian, along-
side a number of other organisations,
is a member. In addition to this, Meridian
has paid $5,000 (2020: nil) to Deloitte
Limited for consultancy services relating
to the CFO Vantage Programme.
Peter Wilson
99,170
* Rounded to the nearest whole number.
–
–
–
–
–
–
–
–
Senior manager
Neal Barclay
Chris Ewers
Mat Bayliss
Lisa Hannifin
Mike Roan
Jason Stein
Guy Waipara
Number
of shares
725,752
91,959
12,850
68,675
318,999
344,281
388,174
1 01
MERIDIAN INTEGRATED REPORT 2021FURTHER DISCLOSURES Twenty largest registered
holders of quoted financial
products as at the balance date
The table opposite lists the
company’s 20 largest registered
shareholders as at 30 June 2021.
Names
Number of shares
% of issued shares
Her Majesty the Queen in Right of New Zealand Acting by
and Through Her Minister of Finance and Minister for SOEs
HSBC Nominees (New Zealand) Limited
HSBC Nominees (New Zealand) Limited A/C State Street*
J.P. Morgan Chase Bank Na NZ Branch-Segregated Clients Acct*
Citibank Nominees (New Zealand) Limited*
Accident Compensation Corporation*
National Nominees Limited*
HSBC Nominees A/C NZ Superannuation Fund Nominees Limited*
BNP Paribas Nominees (NZ) Limited*
Custodial Services Limited
BNP Paribas Nominees (NZ) Limited*
JBWere (NZ) Nominees Limited
Custodial Services Limited
Forsyth Barr Custodians Limited
HSBC Custody Nominees (Australia) Limited*
BNP Paribas Nominees (NZ) Limited*
TEA Custodians Limited Client Property Trust Account*
New Zealand Depository Nominee Limited
Custodial Services Limited
ANZ Wholesale Australasian Share Fund*
1,307,586,374
131,033,565
113,085,329
91,811,900
89,840,670
52,164,972
34,622,131
31,667,841
29,950,059
28,771,467
25,301,457
24,059,850
23,098,774
18,451,631
18,162,568
18,141,529
17,514,992
17,104,009
16,025,175
14,455,001
51.01
5.11
4.41
3.58
3.50
2.03
1.35
1.23
1.16
1.12
0.98
0.93
0.90
0.72
0.70
0.70
0.68
0.66
0.62
0.56
* Held through New Zealand Central Securities Depository Limited (NZCSD). NZCSD provides a custodial service that allows electronic trading of securities by its members.
1 0 2
MERIDIAN INTEGRATED REPORT 2021FURTHER DISCLOSURES The table opposite lists the
company’s 20 largest registered
Names
holders of MEL030 retail fixed-rate
BNP Paribas Nominees (NZ) Limited*
bonds as at 30 June 2021.
BNP Paribas Nominees (NZ) Limited*
FNZ Custodians Limited
Forsyth Barr Custodians Limited
Citibank Nominees (New Zealand) Limited*
Mt Nominees Limited*
Investment Custodial Services Limited
Ning Gao
Custodial Services Limited
TEA Custodians Limited Client Property Trust Account*
Southern Cross Medical Care Society*
Custodial Services Limited
Hobson Wealth Custodian Limited
ANZ Custodial Services New Zealand Limited*
Custodial Services Limited
Custodial Services Limited
JBWere (NZ) Nominees Limited
FNZ Custodians Limited
University of Otago Foundation Trust
Custodial Services Limited
Number of shares
% of issued shares
23,047,000
21,605,000
14,557,000
11,941,000
9,552,000
4,000,000
3,566,000
3,331,000
3,132,000
3,035,000
3,000,000
2,769,000
2,733,000
2,638,000
2,451,000
2,139,000
2,100,000
1,709,000
1,400,000
1,268,000
15.36
14.40
9.70
7.96
6.37
2.67
2.38
2.22
2.09
2.02
2.00
1.85
1.82
1.76
1.63
1.43
1.40
1.14
0.93
0.85
1 0 3
* Held through New Zealand Central Securities Depository Limited (NZCSD). NZCSD provides a custodial service that allows electronic trading of securities by its members.
MERIDIAN INTEGRATED REPORT 2021FURTHER DISCLOSURES The table opposite lists the
company’s 20 largest registered
Names
holders of MEL040 retail fixed-rate
BNP Paribas Nominees (NZ) Limited*
bonds as at 30 June 2021.
Citibank Nominees (New Zealand) Limited*
BNP Paribas Nominees (NZ) Limited*
Custodial Services Limited
FNZ Custodians Limited
Custodial Services Limited
HSBC Nominees (New Zealand) Limited*
Forsyth Barr Custodians Limited
Custodial Services Limited
Custodial Services Limited
Hobson Wealth Custodian Limited
TEA Custodians Limited Client Property Trust Account*
NZPT Custodians (Grosvenor) Limited*
Custodial Services Limited
BNP Paribas Nominees (NZ) Limited*
Adminis Custodial Limited
Forsyth Barr Custodians Limited
ANZ Custodial Services New Zealand Limited*
FNZ Custodians Limited
Woolf Fisher Trust Incorporated
Number of shares
% of issued shares
21,149,000
13,940,000
11,450,000
8,980,000
8,048,000
7,349,000
7,060,000
6,700,000
4,818,000
3,956,000
3,810,000
3,446,000
3,000,000
2,636,000
2,500,000
2,357,000
1,842,000
1,789,000
1,321,000
1,300,000
14.10
9.29
7.63
5.99
5.37
4.90
4.71
4.47
3.21
2.64
2.54
2.30
2.00
1.76
1.67
1.57
1.23
1.19
0.88
0.87
* Held through New Zealand Central Securities Depository Limited (NZCSD). NZCSD provides a custodial service that allows electronic trading of securities by its members.
1 0 4
MERIDIAN INTEGRATED REPORT 2021FURTHER DISCLOSURES The table opposite lists the
company’s 20 largest registered
Names
holders of MEL050 retail fixed-rate
ANZ Custodial Services New Zealand Limited*
bonds as at 30 June 2021.
Number of shares
% of issued shares
39,603,000
19.80
FNZ Custodians Limited
Forsyth Barr Custodians Limited
HSBC Nominees (New Zealand) Limited A/C State Street*
BNP Paribas Nominees (NZ) Limited*
Hobson Wealth Custodian Limited
Custodial Services Limited
ANZ Custodial Services New Zealand Limited*
HSBC Nominees (New Zealand) Limited*
Investment Custodial Services Limited
Citibank Nominees (New Zealand) Limited*
Custodial Services Limited
Mint Nominees Limited*
Mt Nominees Limited*
Custodial Services Limited
Custodial Services Limited
JBWere (NZ) Nominees Limited
NZPT Custodians (Grosvenor) Limited*
TEA Custodians Limited Client Property Trust Account*
Custodial Services Limited
18,517,000
18,364,000
11,900,000
10,083,000
9,190,000
8,545,000
6,708,000
5,177,000
4,784,000
4,400,000
4,331,000
4,138,000
4,000,000
3,946,000
3,812,000
2,831,000
2,570,000
2,390,000
1,950,000
9.26
9.18
5.95
5.04
4.60
4.27
3.35
2.59
2.39
2.20
2.17
2.07
2.00
1.97
1.91
1.42
1.29
1.20
0.98
* Held through New Zealand Central Securities Depository Limited (NZCSD). NZCSD provides a custodial service that allows electronic trading of securities by its members.
1 0 5
MERIDIAN INTEGRATED REPORT 2021FURTHER DISCLOSURES Substantial security holder
The information opposite is given
Name
pursuant to section 293 of the Financial
Markets Conduct Act 2013 (FMCA).
Ordinary shares
Relevant interest
in number of shares
% of shares held
at the date of notice
Date of notice
According to notice given pursuant to
Her Majesty the Queen in Right of New Zealand
1,353,786,550
52,820
6 July 2015
section 280 of the FMCA, the substantial
security holder in the company and its
relevant interests as at the date of the
notice are noted opposite. The total
number of voting products in the class
as at 30 June 2021 was 2,563,000,00013.
Distribution of shareholders and
holdings as at 30 June 2021
Size of holding
Number of holders
%
Number of shares
Holding quantity %
The table opposite provides information
1–1,000
on the distribution of shareholders and
holdings of Meridian Energy Limited
ordinary shares as at 30 June 2021.
1,001–5,000
5,001–10,000
10,001–50,000
50,001–100,000
100,001–500,000
500,001 and over
Total
9,225
21,882
8,370
6,096
436
175
74
46,258
19.94
47.3
18.09
13.18
0.94
0.38
0.16
100
7,134,926
62,894,346
65,601,744
123,431,771
30,513,812
33,352,802
2,240,070,599
2,563,000,000
0.28
2.45
2.56
4.82
1.19
1.30
87.4
100
1 0 6
13 As at 30 June 2021, the total number of ordinary shares was 2,563,000,000, which included 885,842 ordinary shares held by Meridian as treasury stock.
MERIDIAN INTEGRATED REPORT 2021FURTHER DISCLOSURES Distribution of bondholders and
holdings as at 30 June 2021
Size of holding
The table opposite provides information
on the distribution of MEL030 retail
1,001–5,000
fixed-rate bonds as at 30 June 2021.
5,001–10,000
The table opposite provides information
on the distribution of MEL040 retail
fixed-rate bonds as at 30 June 2021.
10,001–50,000
50,001–100,000
100,001–500,000
500,001 and over
Total
Size of holding
1,001–5,000
5,001–10,000
10,001–50,000
50,001–100,000
100,001–500,000
500,001 and over
Total
Number of
bondholders
% of
bondholders
Number of
bonds
% of
bonds
73
168
364
31
43
28
707
10.33
23.76
51.49
4.38
6.08
3.96
100
365,000
1,601,000
10,096,000
2,601,000
8,945,000
126,392,000
150,000,000
0.24
1.07
6.73
1.73
5.96
84.26
100
Number of
bondholders
% of
bondholders
Number of
bonds
% of
bonds
36
104
404
66
31
29
670
5.37
15.52
60.30
9.85
4.63
4.33
100
177,000
973,000
10,770,000
5,090,000
7,432,000
125,558,000
150,000,000
0.12
0.65
7.18
3.39
4.95
83.71
100
1 07
MERIDIAN INTEGRATED REPORT 2021FURTHER DISCLOSURES The table opposite provides information
on the distribution of MEL050 retail
fixed-rate bonds as at 30 June 2021.
Size of holding
1,001–5,000
5,001–10,000
10,001–50,000
50,001–100,000
100,001–500,000
500,001 and over
Total
Number of
bondholders
% of
bondholders
Number of
bonds
% of
bonds
30
91
323
73
28
32
577
5.20
15.77
55.98
12.65
4.85
5.55
100
150,000
849,000
8,785,000
5,610,000
6,140,000
178,466,000
200,000,000
0.08
0.42
4.39
2.81
3.07
89.23
100
Waivers from NZX
Non-standard designation
Registration as a foreign company
On 31 January 2020, NZX Regulation
In New Zealand, Meridian Energy
Meridian has registered with the
published a waiver decision in respect
Limited has a ‘non-standard’ (NS)
Australian Securities and Investments
of Listing Rules 5.2.1 and 8.1.5, which
designation on the NZX Main Board.
Commission as a foreign company
re-documented a prior waiver decision
This is due to particular provisions of
and has been issued with the Australian
dated 18 September 2013. A copy of this
the company’s constitution, including
Registered Body Number of 151 800 396.
waiver decision and a summary of all
requirements that regulate the
waivers granted and published by the
ownership and transfer of Meridian
ASX disclosures
NZX or relied on by Meridian during
securities. The NS designation is also
Meridian holds a foreign exempt
the 12 months preceding 30 June 2021
required as a condition of any NZX
listing on the ASX. As a requirement
is available on Meridian’s website at:
waivers and approvals.
www.meridianenergy.co.nz/investors/
governance/nzx-waivers.
Credit rating as at 30 June 2021
S&P Global Ratings reaffirmed
Meridian Energy Limited’s credit rating
of BBB+/stable/A-2 on 30 June 2021.
of admission Meridian must make
the following disclosures:
• Meridian’s place of incorporation
is New Zealand.
• Meridian is not subject to Chapters
6, 6A, 6B and 6C of the Australian
Corporations Act 2001 dealing with
the acquisition of shares (including
substantial holdings and takeovers).
1 0 8
MERIDIAN INTEGRATED REPORT 2021FURTHER DISCLOSURES
Shareholding restrictions
10% limit
The Public Finance Act 1989 was
No person (other than the Crown) may
amended in June 2012 to include
have a ‘relevant interest’14 in more than
Determining whether
a breach has occurred
Effect of exceeding the 10% Limit
A person who is in breach of the 10%
restrictions on the ownership of
10% of the shares on issue (10% Limit).
The company has the power to
Limit must:
certain types of security issued
by each mixed-ownership-model
company (including Meridian) and
the consequences of breaching
those restrictions. The constitution
incorporates these restrictions and
mechanisms for monitoring and
enforcing them.
A summary of the restrictions on the
The company must not issue, acquire,
redeem or transfer any shares if it has
actual knowledge that such issue,
acquisition, redemption or transfer
will result in any person other than
determine whether a breach of the 10%
Limit has occurred. In broad terms, if:
•
the company considers that a
person may be in breach of the
10% Limit; or
the Crown exceeding the 10% Limit.
• a holder of shares fails to lodge
Ascertaining whether
a breach has occurred
a statutory declaration when
required to do so or lodges a
declaration that has not been
ownership of shares under the Public
If a holder of shares breaches the
completed to the reasonable
Finance Act and the constitution is set
10% Limit or knows or believes that a
satisfaction of the company,
out below. If in the future the company
person who has a relevant interest in
issues any other class of shares, or other
shares held by that holder may have
securities confer voting rights, the
a relevant interest in shares in breach
restrictions summarised below will
of the 10% Limit, the holder must
also apply to those other classes of
notify the company of the breach
shares or voting securities.
or potential breach.
Meridian is required to determine
whether or not the 10% Limit has been
breached and, if so, whether or not that
breach was inadvertent. The company
must give the affected shareholder the
opportunity to make representations
51% holding
The Crown must hold at least 51%
of the shares on issue.
The company must not issue, acquire
or redeem any shares if such issue,
acquisition or redemption would
result in the Crown falling below
this 51% holding.
Meridian may require a holder of
to the company before it makes a
shares to provide the company with
determination on these matters.
a statutory declaration if the Board
knows or believes that a person is, or is
likely to be, in breach of the 10% Limit.
That statutory declaration is required
to include, where applicable, details of
all persons who have relevant interests
in shares as a result of the shares held
by or on behalf of that holder.
•
comply with any notice that they
receive from the company requiring
them to dispose of shares or their
relevant interest in shares, or take
any other steps that are specified
in the notice, for the purpose of
remedying the breach and reducing
their holding below the 10% Limit
• ensure that they are no longer in
breach within 60 days after the
date on which they became aware,
or ought to have been aware, of
the breach. If the breach is not
remedied within that timeframe, the
company may arrange for the sale
of the relevant number of shares on
behalf of the relevant shareholder.
In those circumstances the company
will pay the net proceeds of sale,
after the deduction of any other
costs incurred in connection with
the sale (including brokerage and
the costs of investigating the breach
of the 10% Limit), to the relevant
shareholder as soon as practicable
after the sale has been completed.
14 In broad terms, a person has a ‘relevant interest’ in a share if the person (a) is the registered holder or beneficial owner of the share; or (b) has the power to exercise, or control the exercise of, a right to vote attached to the share or has the power
to acquire or dispose of, or to control the acquisition or disposition of, that share. A person may also have a ‘relevant interest’ in a share in which another person has a ‘relevant interest’ depending on the nature of the relationship between them.
1 0 9
MERIDIAN INTEGRATED REPORT 2021FURTHER DISCLOSURES If a relevant interest is held in any
The Board may refuse to register
shares in breach of the 10% Limit then,
a transfer of shares if it knows or
Trustee corporations
and nominee companies
NZX Corporate
Governance Code
for as long as that breach continues:
believes that the transfer will result
Trustee corporations and nominee
Meridian complied with the NZX
in a breach of the 10% Limit or where
companies (that hold securities on
Corporate Governance Code
the transferee has failed to lodge a
behalf of a large number of separate
recommendations in all material
statutory declaration requested from
underlying beneficial holders) are
respects during FY21 other than
it by the Board within 14 days of the
exempt from the 10% Limit provided
in respect of recommendation
date on which the company gave
that certain conditions are satisfied.
3.6 as the Board has determined,
notice to the transferee to provide
such statutory declaration.
Share cancellation
given Meridian’s status as a mixed-
ownership model company, that it
Crown directions
In certain circumstances shares can
is not appropriate or necessary for
be cancelled by Meridian through a
Meridian to adopt a takeover protocol,
The Crown has the power to direct
reduction of capital, share buyback
although there are protocols to ensure
the Board to exercise certain of the
or other form of capital reconstruction
compliance with the constitution.
powers conferred on it under the
approved by the Board and, where
Meridian has a separate Corporate
constitution. For example, where the
applicable, shareholders.
Crown suspects that the 10% Limit has
been breached but the Board has not
taken steps to investigate the suspected
breach, the Crown may require the
company to investigate whether a
breach of the 10% Limit has occurred
or to exercise a power of sale of the
relevant share that has arisen as
described under the heading ‘Effect
of exceeding the 10% Limit’ above.
Governance Statement available on
its website at www.meridianenergy.
co.nz/investors/governance. The
Corporate Governance Statement
outlines in detail Meridian’s compliance
with the NZX Corporate Governance
Code and is current as at 24 August 2021.
• no votes may be cast directly by a
shareholder in respect of any of the
shares in which a relevant interest
is held in excess of the 10% Limit
• a registered holder of shares in
which a relevant interest is held
in breach of the 10% Limit will not
be entitled to receive, in respect
of the shares in which a relevant
interest is held in excess of the
10% Limit, any dividend or other
distribution authorised by the
Board in respect of the shares.
However, if the Board determines
that a breach of the 10% Limit was not
inadvertent, or that it does not have
sufficient information to determine
that the breach was not inadvertent,
the restrictions on voting and the
entitlement to receive dividends and
other distributions described in the
preceding paragraphs will apply in
respect of all the shares (as applicable)
held by the relevant shareholder or
holder (and not just the shares in which
a relevant interest is held in excess of
the 10% Limit).
11 0
MERIDIAN INTEGRATED REPORT 2021FURTHER DISCLOSURES Trade associations
Largest contributions
Value to electricity customers
• Electricity Retailers’ Association of New Zealand
• Australian Energy Council
Sustainable business
• Sustainable Business Council
• Sustainable Business Network
• The New Zealand Initiative
Clean energy advocacy
• Melbourne Energy Institute
• Clean Energy Council
• New Zealand Wind Energy Association
• New Zealand Hydrogen Association
• Electricity Engineers’ Association
• Drive Electric
Other large business expenditure
• BusinessNZ
• The Hugo Group
• New Zealand Shareholders’ Association
111
MERIDIAN INTEGRATED REPORT 2021FURTHER DISCLOSURES Generating
returns
11 2
MERIDIAN INTEGRATED REPORT 2021FINANCIALS 11 3
MERIDIAN INTEGRATED REPORT 2021FINANCIALS Group financial statements
Notes to the Group financial statements
115
Income Statement
The income earned and operating
expenditure incurred by the Meridian
Group during the financial year.
115
Comprehensive Income Statement
Items of income and operating expense,
that are not recognised in the income
statement and hence taken to reserves
in equity.
119
121
123
About this report
Significant matters in the financial year
A. Financial performance
A1. Segment performance
A3. Expenses
A2. Income
A4. Taxation
129
B. Assets used to generate and sell electricity
B1. Property, plant and equipment
B2. Intangible assets
116
Balance Sheet
134
C. Managing funding
A summary of the Meridian Group
assets and liabilities at the end of the
financial year.
117
Statement of Changes in Equity
Components that make up the capital
and reserves of the Meridian Group
and the changes of each component
during the financial year.
118
Statement of Cash Flows
Cash generated and used by the
Meridian Group.
Key
114
Subsequent
event
Key judgements
and estimates
Risks
C1. Capital management
C6. Trade receivables
C2. Share capital
C7. Borrowings
C3. Earnings per share
C8. Green financing
C4. Dividends
C9. Lease liabilities
C5. Cash and cash equivalents
C10. Commitments
D. Financial instruments used to manage risk
D1. Financial risk management
E. Group structure
E1. Subsidiaries
F. Other
143
155
156
F1. Share-based payments
F4. Contingent assets and liabilities
F2. Related parties
F5. Subsequent events
F3. Auditors remuneration
F6. Changes in financial
reporting standards
161
Signed report
Independent auditor’s report
MERIDIAN INTEGRATED REPORT 2021FINANCIALS
Income Statement
For the year ended 30 June 2021
Comprehensive Income Statement
For the year ended 30 June 2021
Note
A2
A3
A3
A3
A3
D1
A3
A2
D1
A4
Operating revenue
Operating expenses
Earnings before interest, tax, depreciation, amortisation,
changes in fair value of hedges and other significant
items (EBITDAF)
Depreciation and amortisation
Reversal of previous impairment of assets
Gain/(loss) on sale of assets
Net change in fair value of energy hedges
Operating profit
Finance costs
Interest income
Net change in fair value of treasury hedges
Net profit before tax
Tax expense
Net profit after tax attributed
to the shareholders of the parent company
Earnings per share (EPS) attributed to
ordinary equity holders of the parent
2021
$M
Restated*
2020
$M
4,296
3,405
Net profit after tax
(3,567)
(2,552)
Other comprehensive income
Items that will not be reclassified to profit or loss:
Asset revaluation
Deferred tax on the above item
Items that may be reclassified to profit or loss:
Net (loss)/gain on cash flow hedges
Exchange differences arising from
translation of foreign operations
Income tax on the above items
Other comprehensive income for the year, net of tax
Total comprehensive income for the year, net of tax
attributed to shareholders’ of the parent company
729
(303)
6
(1)
169
600
(84)
–
79
595
(167)
853
(312)
(58)
–
(113)
370
(85)
1
(48)
238
(63)
428
175
Cents
Cents
Note
B1
A4
A4
2021
$M
428
Restated*
2020
$M
175
202
(58)
144
6
2
(2)
6
150
(22)
7
(15)
2
11
(1)
12
(3)
578
172
Basic and diluted earnings per share
C3
16.7
6.8
* Refer to Significant matters section for details on 2020 restatement.
The notes to the Group financial statements form an integral part of these financial statements.
11 5
MERIDIAN INTEGRATED REPORT 2021FINANCIALS Balance Sheet
As at 30 June 2021
Current assets
Cash and cash equivalents
Trade receivables
Customer contract assets
Financial instruments
Other assets
Total current assets
Non-current assets
Property, plant and equipment
Intangible assets
Deferred tax
Financial instruments
Other assets
Total non-current assets
Total assets
Note
2021
$M
Restated*
2020
$M
Note
2021
$M
Restated*
2020
$M
C5
C6
D1
B1
B2
A4
D1
148
491
25
192
61
917
176
323
24
100
42
665
8,598
8,594
84
35
214
8
8,939
9,856
64
34
265
–
8,957
9,622
Current liabilities
Payables and accruals
Employee entitlements
Customer contract liabilities
Current portion of term borrowings
Current portion of lease liabilities
Financial instruments
Current tax payable
Total current liabilities
Non-current liabilities
Term borrowings
Deferred tax
Provisions
Lease liabilities
Financial instruments
Term payables
Total non-current liabilities
Total liabilities
Shareholders’ equity
Share capital
Reserves
Total shareholders’ equity
Total liabilities and shareholder’s equity
C7
C9
D1
C7
A4
C9
D1
C2
577
25
23
378
7
63
37
364
24
23
88
7
63
79
1,110
648
1,298
1,940
23
90
131
40
3,522
4,632
1,595
3,629
5,224
9,856
1,600
1,850
17
97
279
49
3,892
4,540
1,598
3,484
5,082
9,622
For and on behalf of the Board of Directors who authorised the issue of the financial statements
on 24 August 2021.
Mark Verbiest,
Chair, 24 August 2021
Julia Hoare,
Chair, Audit and Risk Committee, 24 August 2021
* Refer to Significant matters section for details on 2020 restatement.
11 6
The notes to the Group financial statements form an integral part of these financial statements.
MERIDIAN INTEGRATED REPORT 2021FINANCIALS Statement of Changes in Equity
For the year ended 30 June 2021
$M
Balance at 1 July 2019
Net profit for the 2020 financial year
Other comprehensive income
Asset revaluation
Net gain on cash flow hedges
Exchange differences from translation of foreign operations
Income tax relating to other comprehensive income
Total other comprehensive income, net of tax
Total comprehensive income for the year, net of tax
Share-based transactions
Dividends paid
Balance at 30 June 2020 and 1 July 2020 (Restated)*
Net profit for the 2021 financial year
Other comprehensive income
Asset revaluation
Transferred to retained earnings on disposal
Net loss on cash flow hedges
Exchange differences from translation of foreign operations
Income tax relating to other comprehensive income
Total other comprehensive income, net of tax
Total comprehensive income for the year, net of tax
Share-based transactions
Dividends paid
Balance at 30 June 2021
Note
B1
A4
C2,F1
C4
B1
A4
C2,F1
C4
Share option
reserve
Revaluation
reserve
Foreign
currency
translation
reserve
Cash flow
hedge
reserve
1
5,068
(37)
–
–
–
–
–
–
–
–
–
–
(22)
–
–
7
(15)
(15)
–
–
–
–
–
11
–
11
11
–
–
(3)
–
–
2
–
(1)
1
1
–
–
Share
capital
1,599
–
–
–
–
–
–
–
(1)
–
Retained
earnings
Total equity
(1,171)
5,457
175
175
–
–
–
–
–
175
–
(546)
(22)
2
11
6
(3)
172
(1)
(546)
1,598
1
5,053
(26)
(2)
(1,542)
5,082
–
–
–
–
–
–
–
–
(3)
–
–
–
–
–
–
–
–
–
–
–
–
202
1
–
–
(58)
145
145
–
–
–
–
–
–
2
–
2
2
–
–
1,595
1
5,198
(24)
–
–
–
6
–
(2)
4
4
–
–
2
428
–
(1)
–
–
–
(1)
427
–
(433)
428
202
–
6
2
(60)
150
578
(3)
(433)
(1,548)
5,224
* Refer to Significant matters section for details on 2020 restatement.
The notes to the Group financial statements form an integral part of these financial statements.
117
MERIDIAN INTEGRATED REPORT 2021FINANCIALS S
L
A
I
C
N
A
N
I
F
Statement of Cash Flows
For the year ended 30 June 2021
Operating activities
Receipts from customers
Interest received
Payments to suppliers and employees
Interest paid
Income tax paid
Operating cash flows
Investing activities
Sale of property, plant and equipment
Purchase of property, plant and equipment
Purchase of intangible assets
Purchase of subsidiary
Investing cash flows
Financing activities
Term borrowings drawn
Term borrowings repaid
Lease liabilities repaid
Dividends paid
Shares purchased for long-term incentive
Financing cash flows
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Effect of exchange rate changes on net cash
Cash and cash equivalents at end of year
C5
Note
2021
$M
Restated*
2020
$M
4,164
3,375
–
1
(3,472)
(2,520)
C5
E1
C7
C7
C7, C9
C4
C2, F1
(82)
(179)
431
–
(76)
(38)
–
(114)
108
(10)
(7)
(433)
(3)
(345)
(28)
176
–
148
(79)
(173)
604
–
(43)
(19)
(2)
(64)
172
(60)
(7)
(546)
(2)
(443)
97
78
1
176
* Refer to Significant matters section for details on 2020 restatement.
11 8
The notes to the Group financial statements form an integral part of these financial statements.
MERIDIAN INTEGRATED REPORT 2021 About this report
In this section
The notes to the financial statements
Meridian Energy Limited is dual listed on
include information which is considered
the New Zealand Stock Exchange (NZX)
relevant and material to assist the
and the Australian Securities Exchange
reader in understanding changes
(ASX). As a mixed ownership company,
in Meridian’s financial position
majority owned by Her Majesty the
or performance. Information is
Queen in Right of New Zealand, it is
considered relevant and material if:
bound by the requirements of the
• the amount is significant because
Public Finance Act 1989.
of its size and nature;
These financial statements have
• it is important for understanding
been prepared:
the results of Meridian;
• it helps to explain changes in
Meridian’s business; or
• it relates to an aspect of Meridian’s
operations that is important to
future performance.
• in accordance with Generally
Accepted Accounting Practice
(GAAP) in New Zealand and comply
with International Financial Reporting
Standards (IFRS) and the New Zealand
equivalents (NZ IFRS), as appropriate
for a for-profit entity;
Meridian Energy Limited is a for-
• in accordance with the requirements
profit entity domiciled and registered
of the Financial Markets Conduct
under the Companies Act 1993 in
Act 2013;
New Zealand. It is an FMC reporting
entity for the purposes of the
Financial Markets Conduct Act 2013.
Meridian’s core business activities
are the generation, trading and
retailing of electricity and the sale of
complementary products and services.
The registered office of Meridian is Level
2, 55 Lady Elizabeth Lane, Wellington.
• on the basis of historical cost,
modified by revaluation of certain
assets and liabilities;
• in New Zealand dollars (NZD),
with all values rounded to millions
($M) unless otherwise stated; and
• using accounting policies as provided
throughout the notes to the financial
statements.
Key judgements and estimates
In the process of applying the Group’s accounting
policies and application of accounting standards,
Meridian has made a number of judgements
and estimates. The estimates and underlying
assumptions are based on historical experience
and various other factors that are considered to
be appropriate under the circumstances. Actual
results may differ from these estimates.
Judgements and estimates which are considered
material to understanding the performance of
Meridian are found in the following notes:
Note
A2 Income
B1
Property, plant and equipment
D1
Financial risk management
11 9
MERIDIAN INTEGRATED REPORT 2021NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2021 Basis of consolidation
Foreign currency
The Group financial statements
Transactions denominated in foreign
comprise the financial statements
currencies are converted at the exchange
of Meridian Energy Limited and its
rates at the date of the transactions.
subsidiaries and controlled entities,
Foreign currency monetary assets
as contained in Note E1 Subsidiaries.
and liabilities are translated at the rate
The financial statements of members of
prevailing at balance date, 30 June 2021.
the Group are prepared for the same
The assets and liabilities of international
reporting period as the parent company,
subsidiaries are translated to NZD at the
using consistent accounting policies.
closing rate at balance date. The revenue
In preparing the Group financial
statements, all material intra-group
transactions, balances, income and
expenses have been eliminated.
and expenses of these subsidiaries are
translated at rates approximating the
exchange rates at the dates of
the transactions.
Subsidiaries are consolidated from
When the financial statements of
the date on which control is obtained
subsidiaries are translated into NZD,
to the date on which control is lost.
exchange differences can arise. These
are recorded in the foreign currency
translation reserve (within equity). If an
international subsidiary is disposed of,
these cumulative translation differences
are recognised in the income statement
in the period in which that occurs.
The principal functional currency of
international subsidiaries is Australian
dollars; the closing rate at 30 June 2021
was 0.9311 (30 June 2020: 0.9349).
A full list of international subsidiaries
and their functional currencies are
provided in Note E1 Subsidiaries.
1 2 0
MERIDIAN INTEGRATED REPORT 2021NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2021 Significant matters
in the financial year
In this section
Significant matters which have
impacted Meridian’s financial
performance and an explanation
of non-GAAP measures used within
the notes to the financial statements.
New Zealand Aluminium
Smelter (NZAS) Exit
inflows dried up. The inflows from
COVID-19
1 December 2020 to 30 April 2021
On 9 July 2020, the New Zealand
were extremely low in the Waitaki River
Aluminium Smelter (NZAS) announced
and below average in the Waiau. From
plans to wind-down its operation
May a series of fronts returned to the
at Tiwai Point. NZAS terminated its
region and as a result Meridian finished
572MW electricity supply agreement
the year with near normal storage.
with Meridian, giving a 14-month notice
period through to 31 August 2021.
Generation structures
and plant revaluation
In light of the continuing uncertainty
around the economy Meridian
continues to hold a higher provision
for credit losses in the short to medium
term. Meridian will continue to assess
the level of the provision at each
reporting date to ensure it reflects
current economic conditions.
On 14 January 2021 NZAS accepted
At 30 June 2021, a valuation of
Meridian’s offer of an amended contract
Meridian’s generation structures and
covering an extended exit period and
plant assets has been undertaken, to
Meridian has also considered the
potential impact of COVID-19 as part
of our key assumptions when valuing
would continue operating through to
determine the fair value of the assets as
our property plant and equipment and
31 December 2024. As such, Meridian’s
at this date. The valuation has resulted
Group financial statements have been
in a net increase of $202 million from
prepared based on an extended NZAS
30 June 2020. Meridian uses an
financial instruments. However, there
was no impact when taking this into
consideration. Refer to Note B1 Property,
exit date of 31 December 2024.
independent valuer to determine a
plant & equipment and D1 Financial risk
Hydro inflows
Meridian started the financial year
with below average storage in our main
hydro storage lake, Pūkaki. A series of
large inflow events in September and
October lifted storage to average at
Lake Pūkaki and to spill levels in the
Waiau. However, from mid November
valuation range on which the Board’s
management for further detail.
ultimate valuation decision is based.
The valuation range is set using
discounted cash flows (DCFs) and an
income approach based primarily
on capitalisation of earnings.
For more information refer to Note B1
Property, plant and equipment.
1 2 1
MERIDIAN INTEGRATED REPORT 2021NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2021 Significant matters continued
Implementation of
IFRIC Agenda Decision
for an intangible asset. These costs
Non-GAAP measures
are recognised as intangible software
During the year, the Group revised its
assets and amortised over the useful
accounting policy in relation to upfront
life of the software on a straight-line
configuration and customisation costs
basis. The useful lives of these assets
incurred in implementing Software
are reviewed at least at the end of
as a Service (SaaS) arrangements in
each financial year, and any change
response to the IFRS Interpretations
accounted for prospectively as a
Committee (IFRIC) agenda decision
change in accounting estimate.
Meridian refers to non-GAAP financial
measures within these financial
statements and accompanying notes.
The limited use of non-GAAP measures
is intended to supplement GAAP
measures to provide readers with
further information to broaden their
understanding of Meridian’s financial
performance and position. They are
not a substitute for GAAP measures.
depreciation, amortisation, fair value
movements of hedging instruments
and other one-off or infrequently
occurring events and the effects
of Meridian’s capital structure and
tax position. This allows a better
comparison of operating performance
with that of other electricity industry
companies than GAAP measures
that include these items.
Energy margin
clarifying its interpretation of how
current accounting standards apply to
these types of arrangements. The new
accounting policy is presented below:
SaaS
SaaS arrangements are service
contracts providing the Group with
the right to access the cloud provider’s
application software over the contract
period. Costs incurred to configure or
customise, and the ongoing fees to
obtain access to the cloud provider’s
application software, are recognised
as operating expenses when the
services are received.
Some of these costs incurred are for
the development of software code
that enhances or modifies, or creates
additional capability to, existing
on-premise systems and meets the
definition of and recognition criteria
1 2 2
Historical financial information has
been restated to account for the
impact of the change in accounting
policy, as follows:
Financial Statement Item
As these measures are not defined
Energy margin provides a measure of
by NZ GAAP, IFRS, or any other body
financial performance that, unlike total
2020
$M
of accounting standards, Meridian’s
calculations may differ from similarly
revenue, accounts for the variability of
the wholesale electricity market and the
Statement of Financial Position
titled measures presented by other
broadly offsetting impact of wholesale
Intangible assets
Total assets
Retained earnings
Total equity
Income Statement
Operating expenses
Profit before tax
Statement of cashflows
Payments to suppliers
and employees
Net cash generated
by operating activities
Payments to acquire
intangible assets
Net cash used in investing activities
(1)
(1)
1
1
(1)
(1)
(1)
(1)
1
1
companies. The measures are
described below, including note
references for reconciliations to the
financial statements.
EBITDAF
Earnings before interest, tax,
prices on the cost of Meridian’s retail
electricity purchases and revenue from
generation. Meridian uses the measure
of energy margin within Meridian’s
segmental financial performance in
Note A1 Segment performance.
depreciation, amortisation, change
Net debt
in fair value of hedges, impairments
and gains or losses on sale of assets.
EBITDAF is reported in the income
statement, allowing the evaluation
of Meridian’s operating performance
without the non-cash impacts of
Net debt is a metric commonly used
by investors as a measure of Meridian’s
indebtedness that takes account of
liquid financial assets. Meridian uses this
measure within its capital management
and this is outlined in Note C1 Capital
management.
MERIDIAN INTEGRATED REPORT 2021NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2021 A
Financial
performance
In this section
This section explains the financial
additional information about
individual items in the income
statement, including:
a. accounting policies, judgements
and estimates that are relevant for
understanding items recognised
in the income statement; and
b. analysis of Meridian’s performance
for the year by reference to key
areas including: performance
by operating segment, revenue,
expenses and taxation.
performance of Meridian, providing
performance of each segment for the
A1 Segment performance
New Zealand retail
Australia
The Chief Executive (the chief operating
decision-maker) monitors the operating
• Retailing of electricity and
• Generation of electricity from
complementary products through
Meridian’s two wind farms and three
two brands (Meridian and Powershop)
hydro power stations, and acquired
purpose of making decisions on resource
in New Zealand.
allocation and strategic direction.
Electricity sold to residential, business
under power purchase agreements,
for sale into the Australian wholesale
The Chief Executive considers the
business according to the nature of the
products and services and the location
of operations, as set out below:
New Zealand wholesale
• Generation of electricity and
its sale into the New Zealand
wholesale electricity market.
• Purchase of electricity from the
wholesale electricity market and
and industrial customers on fixed
electricity market.
price variable volume contracts
• Retailing of electricity and gas,
is purchased from the Wholesale
mainly through the Powershop
segment at an average annual
brand in Australia.
fixed price of $88 per megawatt
hour (MWh) and electricity sold to
business and industrial customers
on spot (variable price) agreements
is purchased from the Wholesale
segment at prevailing wholesale
spot market prices.
• Development of renewable electricity
generation options in Australia.
Other and unallocated
• Other operations, that are not
considered reportable segments,
include licensing of the Flux developed
electricity and gas retailing platform.
• Activities and centrally based costs
that are not directly allocated to
its sale to the NZ Retail segment
Agency margin from spot sales is
and to large industrial customers,
included within “Contracted
including New Zealand Aluminium
sales, net of distribution costs”.
Smelter (NZAS) representing the
equivalent of 40% (30 June 2020:
38%) of Meridian’s New Zealand
generation production.
• Development of renewable
electricity generation opportunities
in New Zealand.
• Meridian provides front line customer
other segments.
and back office services for Powershop
The financial performance of the
Australia from New Zealand based
operating segments is assessed
offices. Revenue of $3 million has
using energy margin and EBITDAF
been recorded in ‘other revenue’ and
(a definition of these measures is
is eliminated on Group consolidation.
included within significant matters in
the financial year) before unallocated
central corporate expenses. Balance
sheet items are not reported to the
Chief Executive at an operating
segment level.
1 2 3
MERIDIAN INTEGRATED REPORT 2021NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2021
A
A1 Segment performance continued
Contracted sales, net of distribution costs
Cost to supply customers
Net cost of hedging
Generation spot revenue
Inter-segment electricity sales
Virtual asset swap margins
Other market revenue/(costs)
Energy margin
Other revenue
Dividend revenue
Energy transmission expense
Electricity metering expenses
Gross margin
Employee expenses
Other operating expenses
EBITDAF
Depreciation and amortisation
Impairment of assets
Gain/(Loss) on sale of assets
Net change in fair value of energy hedges
Operating profit
Finance costs
Interest income
Net change in fair value of treasury hedges
Net profit before tax
Tax expense
Net profit after tax
Reconciliation of energy margin
NZ Wholesale
2021
$M
489
2020
$M
531
(3,020)
(1,558)
NZ Retail
2021
$M
944
(782)
2020
$M
796
(625)
271
2,193
906
(3)
(5)
11
1,266
697
9
(6)
831
950
3
–
(82)
–
752
(29)
(59)
664
–
–
–
–
–
–
–
–
–
–
–
3
–
(116)
–
837
(32)
(61)
744
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1
163
14
–
–
(39)
138
(32)
(33)
73
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1
172
13
–
–
(36)
149
(32)
(34)
83
–
–
–
–
–
–
–
–
–
–
–
Australia
2021
$M
172
(115)
(9)
50
–
–
(1)
97
2
–
(5)
–
94
(15)
(41)
38
–
–
–
–
–
–
–
–
–
–
–
2020
$M
182
(139)
(9)
89
–
–
(1)
122
3
–
(7)
–
118
(13)
(39)
66
–
–
–
–
–
–
–
–
–
–
–
Energy sales revenue, net of hedging
3,178
2,271
1,663
1,453
Energy expenses, net of hedging
Energy distribution expenses
Energy margin
(2,347)
(1,320)
–
831
(1)
950
(914)
(586)
163
(714)
(567)
172
332
(130)
(105)
97
351
(142)
(87)
122
1 2 4
Other and Unallocated
2020
$M
2021
$M
–
–
–
–
–
–
–
–
55
52
–
–
107
(36)
(34)
37
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
32
27
–
–
59
(38)
(23)
(2)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Inter-segment
2021
$M
–
906
–
–
2020
$M
Total
2021
$M
2020
$M
–
1,605
1,509
697
(3,011)
(1,625)
–
–
262
2
2,243
1,355
(906)
(697)
–
–
–
(45)
(52)
–
–
(97)
–
14
(83)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(24)
(27)
–
–
(51)
–
13
(38)
–
–
–
–
–
–
–
–
–
–
–
–
(3)
(5)
–
9
(6)
1,091
1,244
29
–`
(87)
(39)
994
(112)
(153)
729
(303)
6
(1)
169
600
(84)
–
79
595
(167)
428
27
–
(123)
(36)
1,112
(115)
(144)
853
(312)
(58)
–
(113)
370
(85)
1
(48)
238
(63)
175
(906)
906
–
–
(697)
4,267
3,378
697
(2,485)
(1,479)
–
–
(691)
(655)
1,091
1,244
MERIDIAN INTEGRATED REPORT 2021NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2021 A
A2 Income
Operating revenue
Energy sales to customers
Generation revenue, net of hedging
Energy related services revenue
Other revenue
Total revenue by geographic area
New Zealand
Australia
United Kingdom
Total operating revenue
Interest income
Operating revenue
Energy sales to customers
Generation revenue, net of hedging
Revenue received or receivable from
Revenue received from:
residential, business and industrial
• electricity generated and sold into
customers. This revenue is influenced
the wholesale markets; and
by customer contract sales prices and
their demand for electricity and gas.
• net settlement of energy hedges sold
on futures markets, and to generators,
retailers and industrial customers.
This revenue is influenced by the
quantity of generation and the wholesale
spot prices. It is recognised at the time
of generation.
2021
$M
2,165
2,102
10
19
2020
$M
1,994
1,384
10
17
Key judgements and estimates – Revenue
Electricity consumption
Supply contract with NZAS
Meridian exercises judgement in
The agreement with New Zealand
4,296
3,405
estimating retail electricity sales,
Aluminium Smelters (NZAS) has
2021
$M
2020
$M
3,948
3,039
333
15
353
13
4,296
3,405
2021
$M
–
2020
$M
1
where customer electricity meters
been recognised in these financial
are unread at balance date. These
statements in a manner consistent
estimates of customer electricity
with fixed price supply agreements
usage in the unread period are
with other industrial customers.
based on the customers’ historical
Revenue is recognised as electricity
consumption patterns.
sales revenue in the income
Revenue is recognised at the time of
supply and customer consumption.
Elements of the sale price such
as discounts and credits given to
statement and the estimated future
cash flows are included in the fair
value of generation structures and
plant assets on the balance sheet.
customers and any incremental
Discounts and payment terms
costs incurred obtaining or retaining
a customer contract are deferred
to customer contract assets on
the balance sheet on a portfolio
basis and released to the income
Where a discount is offered,
revenue is initially recognised net
of estimated discount based on
accumulated experience used to
estimate the amount of discounts
statement over the contract tenure.
taken by customers.
There are no significant differences
between the payment terms and
this policy.
1 2 5
MERIDIAN INTEGRATED REPORT 2021NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2021
Note
B1
B2
Note
C7, C9
Note
B1
2021
$M
285
18
303
2021
$M
78
1
5
84
2021
$M
–
(6)
1
2020
$M
288
24
312
2020
$M
77
2
6
85
2020
$M
58
–
–
A
A3 Expenses
Operating expenses
Energy expenses, net of hedging
Energy distribution expenses
Energy transmission expenses
Employee expenses
Energy metering expense
Other expenses
Operating expenses
2021
$M
2,485
691
87
112
39
153
2020
$M
1,479
655
123
115
36
144
Depreciation and amortisation
Depreciation
Amortisation of intangibles
Finance costs
Interest on borrowings
3,567
2,552
Interest on electricity option premium
Interest on lease liabilities
Energy expenses, net of hedging
Energy metering expenses
The cost of:
• energy purchased from wholesale
markets to supply customers;
• net settlement of buy-side
energy hedges; and
• related charges and services.
The cost of electricity meters, meter
reading and data gathering of retail
customer electricity consumption in
New Zealand. Metering expenses in
Australia are bundled with electricity
distribution costs.
Energy expenses are influenced by
Employee expenses
quantity and timing of customer
consumption and wholesale spot prices.
Energy distribution expenses
The cost of distribution companies
transporting energy between
where energy is transmitted/stored
and customers’ properties.
Energy transmission expenses
Meridian’s share of the cost of the
Provisions are made for benefits owing
to employees in respect of wages and
salaries, annual leave, long service leave
and employee incentives for services
rendered. Provisions are recognised
when it is probable they will be settled
and can be measured reliably. They
are carried at the remuneration rate
expected to apply at the time of
settlement.
Impairment and gain on sale of assets
Impairment of property, plant and equipment
Remeasurement of Australian remediation assets and liabilities
(Gain)/Loss on sale on disposal of assets
Impairment of non-financial assets
Meridian reviews the recoverable
In 2020, $57 million of the impairment is
amount of its tangible and intangible
a result of the revaluation of our Australia
assets at each balance date. They are
generation structures and plant. Refer to
grouped into cash-generating units
Note B1 Property, plant and equipment
with separately identifiable cash flows.
for further detail.
The recoverable amount is the higher
of an asset’s fair value less costs to
sell, and present value of future cash
flows expected to be generated by the
assets (also known as value in use). If
the carrying value of an asset exceeds
the recoverable amount, an impairment
The Group recognises an asset and
liability for decommissioning its
Australian wind farm assets when they
reach the end of their useful lives.
Because of the long term nature of these,
there is considerable uncertainty in
estimating the costs that will be incurred.
In 2021, a $6 million gain was recorded
from changes in the assumptions used
to calculate this estimate.
high voltage direct current (HVDC) link
Contributions to defined contribution
expense is recognised in the income
between the North and South Islands of
plans (largely KiwiSaver) were $5 million
statement. For assets that are revalued
New Zealand and the cost of connecting
in 2021 (30 June 2020: $5 million).
refer to Note B1 Property, plant and
Meridian’s generation sites to the
national grid by grid providers.
1 26
equipment for specific treatment.
MERIDIAN INTEGRATED REPORT 2021NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2021 A
A4 Taxation
Tax expense
Current income tax expense
Adjustments to tax of prior years
Total current tax expense
Deferred tax
Other
Total tax
Reconciliation to profit before tax
Profit before tax
Income tax at applicable rates
Expenditure not deductible for tax
Income tax (over)/under provided in prior year
Other
Tax expense
2021
$M
137
–
137
30
–
167
595
166
2
–
(1)
2020
$M
169
(1)
168
(106)
1
63
238
65
–
(1)
(1)
167
63
Current tax expense
Tax expense components are current
income tax and deferred tax.
Current income tax expense is the
income tax assessed on taxable profit
for the year. Taxable profit differs
from profit before tax reported in the
income statement as it excludes items
of income and expense that are taxable
or deductible in other years, and also
excludes items that will never be taxable
or deductible. Meridian’s liability for
current tax is calculated using tax rates
enacted at balance date, being 28% for
New Zealand and 30% for Australia.
1 2 7
MERIDIAN INTEGRATED REPORT 2021NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2021 A
A4 Taxation continued
Deferred tax assets and liabilities
Balance at beginning of year
Temporary differences in income statement:
Depreciation/amortisation
Term payables
Financial instruments
Australia tax losses utilised
Customer contract assets
Other – payables & receivables
Temporary differences in other comprehensive income:
Revaluation reserve movements
Other
Balance at end of year
Made up of:
Property, Plant and Equipment
Term payables
Financial instruments
Customer contract assets
Other – payables & receivables
Deferred tax liability
Carried forward unused tax losses
Deferred income
Deferred tax asset
Total deferred tax
1 2 8
Deferred tax assets and liabilities
Unused tax losses
Deferred tax is income tax which is
The deferred tax asset relates to
expected to be payable or recoverable
unused tax losses from our Australian
in the future as a result of the unwinding
operations and will be utilised against
of temporary differences. These arise
future taxable income from retail and
from differences in the recognition
generation activities in that country.
2021
$M
1,816
2020
$M
1,928
(52)
9
70
(1)
–
3
29
58
2
(69)
5
(45)
7
1
(5)
(106)
(7)
1
of assets and liabilities for financial
reporting and from the filing of income
tax returns. Deferred tax is recognised
on all temporary differences, other
than those arising:
• from goodwill; and
• from the initial recognition of assets
and liabilities in a transaction (other
1,905
1,816
than in a business combination) that
affects neither the accounting nor
taxable profit or loss.
1,941
1,935
(13)
6
7
(1)
(22)
(64)
7
(6)
The majority of Meridian’s deferred
tax balance is made up of temporary
differences on the revaluation of
property, plant and equipment. This
1,940
1,850
balance will only reverse if the fair
(33)
(2)
(35)
(32)
(2)
(34)
1,905
1,816
value of these assets declines back
to their original historical cost.
Deferred tax is calculated at the tax
rates that are expected to apply to the
year when the liability is settled or the
asset realised, based on tax rates and
tax laws that have been enacted or
substantively enacted at balance date.
Deferred tax asset is recognised to the
extent it is probable that future taxable
profit will be available to use the asset.
This is reviewed at each balance date
and reduced to the extent that it is no
longer probable that sufficient taxable
profits will be available in the future to
utilise the deferred tax asset.
Offsetting deferred tax balances
Deferred tax assets and liabilities
are offset only if there are legally
enforceable rights to set off current tax
assets against current tax liabilities and
when they relate to the same taxable
entity and taxation authority.
MERIDIAN INTEGRATED REPORT 2021NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2021 B
Assets used to
generate and
sell electricity
In this section
This section shows the assets Meridian
uses in the production and sale of
electricity to generate operating
revenue. In this section of the notes
there is information about:
a. property, plant and equipment;
and
b. intangible assets.
B1 Property, plant and equipment
$M
Cost or fair value
Less accumulated depreciation
Net book value at 30 June 2019
Additions
Transfers – work in progress
Lease assets transferred on implementation of NZ IFRS 16
Lease assets recognised on implementation of NZ IFRS 16
Adjustment of Right of Use lease assets
Decommisioning Asset – remeasurement
Foreign currency exchange rate movements15
Generation structures and plant revaluations:
Decrease taken to revaluation reserve
Decrease taken to income statement
Depreciation expense
Net book value at 30 June 2020
Cost or fair value
Less accumulated depreciation16
Net book value at 30 June 2020
Additions
Transfers – work in progress
Adjustment of Right of Use lease assets
Decommisioning Asset – remeasurement
Disposals
Foreign currency exchange rate movements15
Generation structures and plant revaluation:
Increase taken to revaluation reserve
Depreciation expense
Net book value at 30 June 2021
Cost or fair value
Less accumulated depreciation16
Net book value at 30 June 2021
Generation
structures and
plant at fair value
Land and
buildings
at cost
Other plant
and equipment
at cost
Right of Use
Lease Assets
Work in
progress
at cost
8,655
(1)
8,654
–
24
–
–
6
14
(21)
(57)
(275)
8,345
8,593
(248)
8,345
–
4
–
11
(1)
4
202
(268)
8,297
8,314
(17)
8,297
20
(5)
15
–
–
–
–
–
–
–
–
–
15
20
(5)
15
–
1
–
–
–
–
–
–
(1)
15
21
(6)
15
160
(97)
63
–
5
(27)
–
–
1
–
–
(7)
35
130
(95)
35
–
17
–
–
(4)
–
–
(9)
39
143
(104)
39
–
–
–
–
–
27
75
1
–
–
–
–
(7)
96
111
(15)
96
1
–
1
–
(4)
–
–
–
(6)
88
109
(21)
88
96
(3)
93
38
(29)
–
–
–
–
–
–
1
103
105
(2)
103
79
(22)
–
–
–
–
–
–
(1)
159
162
(3)
159
Total
8,931
(106)
8,825
38
–
–
75
1
6
15
–
(21)
(57)
(288)
8,594
8,959
(365)
8,594
80
–
1
11
(9)
4
–
202
(285)
8,598
8,749
(151)
8,598
15 Through the foreign currency translation reserve in other comprehensive income.
16 Includes the reversal of accumulated depreciation on generation structures and plant at revaluation date.
1 2 9
MERIDIAN INTEGRATED REPORT 2021NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2021 B
B1 Property, plant and equipment continued
At 30 June 2021, had the generation
earnings to establish a valuation
Meridian engaged an independent
structures and plant not been carried
range on which the Board’s ultimate
valuer to assess its generation structures
at historical cost less accumulated
valuation decision is based.
and plant assets at 30 June 2021. At this
depreciation and accumulated
impairment losses, their carrying
amount would have been approximately
$2.0 billion (30 June 2020: $2.3 billion).
Any increase arising on revaluation
is credited to the revaluation reserve,
except to the extent that it reverses a
revaluation decrease for the same asset
date an independent valuer assessed
values using DCFs and capitalisation
of earnings when determining a
valuation range.
Recognition and measurement
previously recognised in the income
At 30 June 2021, the revaluation
Generation structures and plant
assets (including land and buildings)
are held on the balance sheet at their
fair value at the date of revaluation,
less any subsequent depreciation and
impairment losses. All other property,
plant and equipment are stated at
historical cost less accumulated
depreciation and any accumulated
impairment losses.
Fair value and revaluation of
generation structures and plant
Revaluations are performed with
sufficient regularity to ensure that
the carrying amount does not differ
statement. In that case the increase is
resulted in a net increase of $202 million
credited to the income statement to
(2020: net decrease of $78 million) in
the extent of the decrease previously
the carrying value of our generation
charged. A decrease in carrying
structures and plant assets. The impact
amount arising on revaluation is
of the revaluation was recognised as a
charged to the income statement to
increase of $202 million (2020: decrease
the extent that it exceeds the balance,
of $21 million) in the revaluation reserve
if any, held in the revaluation reserve
and a nil impairment expense (2020:
relating to a previous revaluation of
impairment expense of $57 million)
that asset.
Accumulated depreciation at
of generation assets recognised in
the income statement.
revaluation date is eliminated against
As a consequence of this revaluation,
the gross carrying amount so that
accumulated depreciation on most
the carrying amount after revaluation
generation assets is reset to nil.
represents the revalued amount.
Accumulated depreciation of two sites
materially from that which would be
Subsequent additions to generation
determined using fair values at
structures and plant assets are recorded
balance date.
Meridian uses an independent valuer,
who uses an income valuation approach
based primarily on discounted cash
flows (DCFs) and capitalisation of
at cost, which is considered fair value,
including costs directly attributable to
bringing the asset to the location and
condition necessary for its intended
purpose, and financing costs where
appropriate.
1 3 0
(Mt Millar and Mt Mercer) are not reset
to nil, as their current carrying value
was the same as the estimated fair
value at 30 June 2021. There was no
depreciation impact of this revaluation
in the income statement.
MERIDIAN INTEGRATED REPORT 2021NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2021
B
Key judgements and estimates –
Generation structures and plant
valuation techniques and key inputs
The Meridian Board uses its judgement
to decide on the appropriateness of
key valuation techniques and inputs for
fair value measurement. Judgement is
also used in determining the estimated
remaining useful lives of assets. As the
valuation of generation structures and
plant does not fully use observable
market data, it continues to be
fair value hierarchy defined in Note D1
future cashflows expected to be
which to capitalise Meridian’s historical
Financial risk management.
produced over a projection period
and forecast earnings is determined.
As discussed above, the independent
valuer uses an income approach which
including forecast revenues and
forecast future generation output.
In determining the maintainable
earnings, observable wholesale
involves incorporating two techniques
The capitalisation of earnings
electricity prices extracted from
in establishing a valuation range being
methodology calculates value by
the ASX have been used.
DCF and capitalisation of earnings.
reference to an assessment of future
The fair value adopted aligns closely
maintainable earnings and capitalisation
with the DCF and capitalisation of
multiples as observed from market
earnings value.
The DCF methodolgy involves
prices of listed companies with broadly
comparable operations to Meridian. In
preparing the capitalisation of earnings
valuation, an EBITDAF multiple range at
The impact of COVID-19 has been
considered as part of our key
assumptions when preparing this
years valuation however there was
no impact on the valuation when
taking this into consideration.
classified as Level 3 under Meridian’s
calculating the present value of
Key input to measure fair value
Description
Range ofunobservable inputs
Sensitivity
Impact on valuation
Future NZ wholesale electricity prices
The price received for NZ generation
$42MWh to $118MWh by 2035 (in real terms)
Future Australia wholesale electricity prices
The price received for Australian generation,
A$31MWh to A$104MWh by 2035 (in real terms)
inclusive of LGCs
Weighted Average Cost of Capital (WACC)
The discount rate takes into account the time
6.25% to 7.90%
value of money and relative risk of achieving
the cash flow forecast
New Zealand generation volume
Annual generation production
13,059GWh p.a. to 14,024GWh p.a.
Australian generation volume
Annual generation production
762GWh p.a. to 579GWh p.a.
Operating expenditure (excluding electricity
Meridian’s cost of operations
$280M p.a.
related expenditure – refer Note A3 Expenses)
EBITDAF earnings multiple
Valuation multiple (including control premium
14 x EBITDAF
of 20%) derived from earnings and valuations of
comparable companies
Sensitivities show the movement in fair value as a result of a change in each input (keeping all other inputs constant).
+ $3MWh
- $3MWh
+ 5%
- 5%
+ 0.5%
- 0.5%
+ 250GWh
- 250GWh
+ 5%
- 5%
+ $10M
- $10M
+ 0.5x
- 0.5x
$442M
($442M)
A$31M
(A$31M)
($693M)
$810M
$234M
($234M)
A$33M
(A$33M)
($124M)
$124M
$360M
($360M)
1 31
MERIDIAN INTEGRATED REPORT 2021NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2021
B
B1 Property, plant and equipment continued
Depreciation
Disposals or retirement
Depreciation of property, plant and
The gain or loss arising on the disposal
equipment assets, other than freehold
or retirement of an item of property,
land, is calculated on a straight-line
plant and equipment is determined
basis. This allocates the cost or fair
as the difference between the sale
value amount of an asset, less any
proceeds and the carrying amount
residual value, over its estimated
of the asset and is recognised in
remaining useful life.
the income statement. Any balance
attributable to the disposed asset
in the asset revaluation reserve is
transferred to retained earnings.
Right of Use Assets are depreciated
over the term of their underlying
lease arrangement.
Useful lives
Meridian uses its judgement in
determining the remaining useful lives
and residual value of assets, which are:
• generation structures and plant –
up to 80 years;
• buildings – up to 67 years;
• other plant and equipment –
up to 20 years; and
• right of use lease assets –
up to 27 years.
The residual value and useful lives
are reviewed, and if appropriate
adjusted, at each balance date.
1 3 2
MERIDIAN INTEGRATED REPORT 2021NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2021 v
B
B2 Intangible assets
$M
Cost or fair value
Less accumulated amortisation
Net book value at 30 June 2019
Additions
Amortisation expenses
Expensed to Income Statement17
Net book value at 30 June 2020
Cost or fair value
Less accumulated amortisation
Net book value at 30 June 2020
Additions
Expensed to Income Statement17
Amortisation expenses
Net book value at 30 June 2021
Cost or fair value
Less accumulated amortisation
Net book value at 30 June 2021
17 Adjustment for SaaS costs transferred to Income Statement
Goodwill
Software
–
–
–
5
–
–
5
5
–
5
–
–
–
5
5
–
5
158
(99)
59
25
(24)
(1)
59
182
(123)
59
40
(2)
(18)
79
220
(141)
79
Total
158
(99)
59
30
(24)
(1)
64
187
(123)
64
40
(2)
(18)
84
225
(141)
84
Software
Useful lives
Acquired computer software licences
Meridian uses its judgement in
(that are not considered an integral part
determining the remaining useful
of related hardware) are capitalised on
lives and residual value of intangible
the basis of the costs incurred to acquire
assets, which are:
and bring to use the specific software.
• electricity and gas retail platform
Additionally, costs directly associated
– up to 5 years;
with the production of identifiable
and unique software products that will
generate economic benefits beyond
one year are also recognised
• generation control – up to
10 years; and
• other software – up to 3 years.
as intangible assets.
These are reviewed, and, if appropriate,
adjusted at each balance date.
All these costs are amortised over their
useful lives on a straight-line basis.
Costs associated with maintaining
computer software programs are
recognised as an expense as incurred.
Goodwill
Goodwill represents the excess of
The goodwill recognised related
the cost of a business acquisition
to the acquisition of two wind farm
over the fair value of the identifiable
development sites in Australia. As these
assets and liabilities at the date of
are development sites, the impairment
acquisition. Goodwill is assessed as
test is based on comparing the carrying
having an indefinite useful life and is
value to the expected recoverable
not amortised. Instead, it is subject to
value of each site. Key inputs into the
impairment testing at each reporting
expected recoverable amount include
date or whenever there are indications
the potential generation capacity of
of impairment. Goodwill has been
each site, and a market value
allocated to the following business units:
multiple per unit of generation capacity
$M
2021
2020
Rangoon Energy Park Pty Ltd
Wandsworth Wind Farm Pty Ltd
4
1
5
4
1
5
($/MW). Potential capacity is revisited as
the development of each wind farm site
progresses. The market value multiple
is reassessed by analysing other similar
purchase transactions, where available.
1 3 3
MERIDIAN INTEGRATED REPORT 2021NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2021 C
Managing
funding
In this section
This section explains how Meridian
manages its capital structure and
working capital, the various funding
sources and how dividends are returned
to shareholders. In this section of the
notes there is information about:
a. equity and dividends;
b. net debt;
C1 Capital management
Capital risk management objectives
Share capital
Meridian’s objective when managing
Retained earnings
capital is to provide appropriate returns
Other reserves
to shareholders whilst maintaining a
capital structure that safeguards its
ability to remain a going concern
and optimise the cost of capital.
Drawn borrowings
Lease liabilities payable
Less: cash and cash equivalents
Capital is defined as the combination
of shareholders’ equity, reserves and
Net capital
c. receivables and payables; and
net debt.
d. leases and commitments.
Meridian manages its capital through
various means, including:
• adjusting the amount of dividends
paid to shareholders;
Net debt to EBITDAF
Drawn borrowings
Lease liabilities
• raising or returning capital; and
Less: cash and cash equivalents
• raising or repaying debt.
Add back: restricted cash
Add back: cash buffer18
Meridian regularly monitors its capital
requirements using various measures
Net debt (A)
EBITDAF (B)
which consider debt facility financial
Net debt to EBITDAF (times) (A/B)
covenants and credit ratings. The key
measures are net debt to EBITDAF and
interest cover. The principal external
measure is Meridian’s credit rating
from Standard & Poor’s.
Meridian is in full compliance with
EBITDAF Interest cover
EBITDAF (B)
Interest on borrowings
Interest on lease liabilities
debt facility financial covenants.
Interest (C)
EBITDAF interest cover (times) (B/C)
Note
C2
C7
C9
C5
Note
C7
C9
C5
C5
Note
A3
A3
2021
$M
1,595
(1,548)
5,177
5,224
2020
$M
1,598
(1,542)
5,026
5,082
1,589
1,491
97
(148)
1,538
6,762
104
(176)
1,419
6,501
2021
$M
2020
$M
1,589
1,491
97
(148)
97
13
1,648
729
2.3
2021
$M
729
78
5
83
8.8
104
(176)
67
27
1,513
853
1.8
2020
$M
853
77
6
83
10.3
1 3 4
Standard & Poor’s rating
BBB+
BBB+
18 The cash buffer is calculated as 25% of unrestricted cash and cash equivalents.
MERIDIAN INTEGRATED REPORT 2021NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2021
C
C2 Share Capital
C4 Dividends
Share capital
Shares issued
Shares
2021
$M
Shares
2,563,000,000
1,600
2,563,000,000
Treasury shares held
(1,359,011)
(5)
(1,212,448)
Share capital
2,561,640,989
1,595
2,561,787,552
2020
$M
1,600
(2)
1,598
Dividends declared and paid
Interim ordinary and special dividend 2021: 5.7cps (cents per share)
(2020: 8.14cps)
Final ordinary and special dividend 2020: 11.2cps (2019: 13.16cps)
Total dividends paid
2021
$M
146
287
433
2020
$M
209
337
546
All shares issued are fully paid and have equal voting rights. All shares participate
equally in any dividend distribution or any surplus on the winding up of the company.
Dividends declared and not recognised as a liability
Final ordinary dividend 2021: 11.2cps (2020:11.2cps)
287
287
The movement in Treasury shares relates to the purchase of shares by participants and
held on trust as part of a long-term equity settled incentive plan for New Zealand-
Imputation credit balance
based senior executives (refer to Note F1 Share-based payments) and to hedging
Imputation credits available for future use
89
94
of the new long term incentive scheme.
C3 Earnings per share
Basic and diluted earnings per share (EPS)
Profit after tax attributable to shareholders
of the parent company ($M)
Weighted average number of shares used
in the calculation of EPS
Dividend policy
Meridian’s dividend policy considers
free cash flow, working capital
requirements, the medium-term
2021
428
Restated*
2020
investment programme, maintaining
a BBB+ credit rating and risks from
175
short and medium-term economic,
market and hydrology conditions.
Subsequent event –
dividend declared
On 24 August 2021 the Board
declared a partially imputed
final ordinary dividend of
11.20 cents per share.
Basic and diluted EPS (cents per share)
16.7
6.8
* Refer to Significant matters section for details on 2020 restatement.
2,563,000,000
2,563,000,000
On 30 March 2021, the Board
approved a dividend reinvestment
plan offering shareholders the
Imputation credit balance
opportunity to reinvest the net
proceeds of their dividends from
Meridian shares into additional, fully
paid shares. This will apply from the
payment of the 30 June 2021 final
dividend on 15 October 2021.
Imputation credits allow Meridian to
pass on to its shareholders the benefit
of the New Zealand income tax it has
paid by attaching imputation credits
to the dividends it pays, reducing the
shareholders’ net tax obligations.
The imputation credits available
for future use reflect the balance
available on 24 August 2021, therefore
recognising any tax payments between
balance date and 24 August 2021.
1 3 5
MERIDIAN INTEGRATED REPORT 2021NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2021
C
C5 Cash and cash equivalents
Cash and cash equivalents
Current account
Money market account
Cash and cash equivalents
2021
$M
148
–
148
2020
$M
154
22
176
Cash and cash equivalents are made up of cash on hand, on-demand deposits
and other short-term, highly liquid investments that are readily convertible to a
known amount of cash and are not subject to a significant risk of change in value.
Restricted cash
Reconciliation of net profit after tax
to cash flows from operating activities
Net profit after tax
Adjustments for operating activities’ non-cash items:
Depreciation and amortisation
Movement in deferred tax
Net change in fair value of financial instruments
Electricity option premiums
Share-based payments
Meridian trades electricity hedges on the ASX using Macquarie as a broker.
Items classified as investing activities:
As a result, a proportion of the funds it holds on deposit are pledged as
Remeasurement of Australian remediation assets and liabilities
margin which varies depending on market movements and contracts held.
(Gain)/Loss on sale of assets
At 30 June 2021, this collateral was $97 million (30 June 2020: $67 million).
All other cash and cash equivalent balances are available for use.
Changes in working capital items:
(Increase) in accounts receivable
(Increase) in customer contract assets
(Increase) in other assets
(Decrease)/increase in payables and accruals/employee entitlements
Increase in customer contract liabilities
Increase/(decrease) in current tax payable
Working capital items in investing activities
Working capital items in financing activities and other non-cash items
2021
$M
428
303
29
(248)
(21)
2
65
(6)
1
(5)
(168)
(1)
(19)
214
–
(42)
(17)
(24)
(57)
2020
$M
176
312
(106)
161
(22)
1
346
58
–
58
(31)
(3)
(8)
68
7
(1)
(21)
14
25
Cash flow from operating activities
431
605
1 3 6
MERIDIAN INTEGRATED REPORT 2021NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2021 C
C6 Trade receivables
Trade receivables
Accrued receivables
Current billed
Past due 1 to 30 days
Past due 31 to 60 days
Past due 61 to 90 days
Past due greater than 90 days
Less: credit loss allowance
Total trade receivables
2021
$M
429
50
14
3
1
3
(9)
491
2020
$M
262
57
10
3
1
6
(16)
323
Accounts receivable past due but not impaired
12
10
Movement in provision for credit loss allowance
Opening provision
Provision released (created) in the year
Provision used in the year
Closing provision for credit loss allowance
(16)
3
4
(9)
(5)
(14)
3
(16)
Trade receivables,
measurement and recognition
Trade receivables are measured on
initial recognition at fair value, and are
subsequently carried at amortised cost.
The overdue amounts are largely related
to energy sales to retail customers in
New Zealand and Australia.
Credit losses
The allowance for credit losses are an
estimate of the Group’s expected credit
losses over the lifetime of the current
amounts receivable. Or rather, it is the
difference between the face value of
trade receivables and the future cash
flows we expect to receive. Additions
Trade receivables written off during
to the provision are recognised in the
the year were $4 million (30 June 2020:
income statement.
$3 million).
We estimate collective future cash flows
Receivables are written off at the point
by considering customer credit history,
where Meridian believe there is no
historical recovery performance and
reasonable expectation of recovery,
trends, through which we build default
which is typically a combination of an
matrices that apply a probability of
overdue amount, no communication
default given the ageing of debtors.
or response from the debtor, and no
Forward-looking employment statistics
payments received. Receivables written
are also monitored for both New Zealand
off are handed to collection agencies
and Australia, with a large rise in forecast
for enforcement.
unemployment acting as a trigger for
us to reconsider the probability rates
in our matrices.
As noted in the Significant matters
section, Meridian continues to hold
a higher provision for credit losses
in light of continuing economic
uncertainty in response to COVID-19.
1 37
MERIDIAN INTEGRATED REPORT 2021NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2021 C
C7 Borrowings
$M
Current borrowings
Unsecured borrowings
Unsecured borrowings
Total current borrowings
Non –current borrowings
Unsecured borrowings
Unsecured borrowings
Total non –current borrowings
Total borrowings
Currency
borrowed in
Drawn facility
amount
Transaction
costs paid
Fair value
adjustment
Carrying
amount
Drawn facility
amount
Transaction
costs paid
Fair value
adjustment
Carrying
amount
2021
2020
NZD
USD
NZD
USD
321
47
368
665
556
1,221
1,589
(1)
–
(1)
(1)
(1)
(2)
(3)
–
11
11
–
79
79
90
320
58
378
664
634
1,298
1,676
89
–
89
800
602
1,402
1,491
(1)
–
(1)
(2)
(1)
(3)
(4)
–
–
–
–
201
201
201
88
–
88
798
802
1,600
1,688
2020
$M
Fair
value
558
51
64
Borrowings, measurement and recognition
Borrowings are recognised initially at
effect is included in the “Fair value
the fair value of the drawn facility
adjustment” column in the table, along
amount (net of transaction costs paid)
with any amounts relating to fair value
and are subsequently held at amortised
hedge adjustments.
Fair value of items held
at amortised cost
Retail bonds
Floating Rate Notes
Unsecured term loan (EKF facility)
2021
$M
Carrying
value
2021
$M
Fair
value
2020
$M
Carrying
value
500
540
500
50
50
51
52
50
60
Meridian uses cross-currency interest
rate swap (CCIRS) hedge contracts to
manage its exposure to interest rates
and borrowings sourced in currencies
Within term borrowings there are
The Retail Bonds are listed instruments;
longer dated instruments which are
however, a lack of liquidity on the NZX
not in hedge accounting relationships.
precludes them from being classified
different to that of the borrowing entity’s
The carrying values and estimated fair
as Level 1 (a definition of hierarchy levels
reporting currency. More information on
values of these instruments are noted
is included in Note D1 Financial risk
Meridian’s risk management and hedge
in the table above.
management).
accounting practices can be found in
Section D Financial instruments used
to manage risk.
Fair value is calculated using a
Carrying value approximates fair value
discounted cash flow calculation and
for all other instruments within term
the resultant values would be classified
borrowings.
as Level 2 within the fair value hierarchy.
cost using the effective interest method.
Any borrowings which have been
designated as hedged items (USD
borrowings) are carried at amortised
cost plus a fair value adjustment under
hedge accounting requirements – refer
to Note D1 Hedge accounting section
for further detail on this. Any borrowings
denominated in foreign currencies are
retranslated to the functional currency
at each reporting date. Any retranslation
1 3 8
MERIDIAN INTEGRATED REPORT 2021NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2021 C
C7 Borrowings continued
Reconciliation of liabilities arising from financing activities
The table below details changes in the Group’s liabilities arising from financing activities, including both cash and non-cash changes.
$M
Unsecured borrowings – NZD
Unsecured borrowings – USD
Lease Liabilities
Total
$M
Unsecured borrowings – NZD
Unsecured borrowings – USD
Lease Liabilities
Total
Sources of funding – $M
Bank facilities
New Zealand bank funding19
EKF funding20
Total bank facilities
Other sources of borrowing
Retail bonds21
Floating rate notes19
Fixed rate bonds22
Commercial paper23
Total other sources of borrowing
Total sources of funding
2021
Balance at
30 June 2020
Term
borrowings
drawn
Term
borrowings
repaid
Valuation
adjustments
Foreign
Exchange
Transaction
costs paid
& accrued
Lease
liabilities
recognised
Lease
liabilities
paid
Lease
derecognition
Unwind of
discounting
Balance at
30 June 2021
886
802
104
108
–
–
1,792
108
(10)
–
–
(10)
–
(58)
–
(58)
–
(52)
–
(52)
–
–
–
–
–
–
1
1
–
–
(7)
(7)
–
–
(5)
(5)
–
–
5
5
984
692
97
1,773
2020
Balance at
1 July 2019
Term
borrowings
drawn
Term
borrowings
repaid
Valuation
adjustments
Foreign
Exchange
Transaction
costs paid
& accrued
Lease
liabilities
recognised
Lease
liabilities
paid
Lease
derecognition
Unwind of
discounting
Balance at
30 June 2020
775
695
32
1,502
172
–
–
172
(60)
–
–
(60)
–
80
(1)
79
–
27
(1)
26
(1)
–
–
(1)
–
–
75
75
–
–
(7)
(7)
–
–
–
–
–
–
6
6
886
802
104
1,792
2021
2020
Currency
borrowed in
Facility
amount
Drawn
facility
amount
Undrawn
facility
amount
Facility
amount
Drawn
facility
amount
Undrawn
facility
amount
NZD
NZD
NZD
NZD
USD
NZD
770
50
820
500
50
603
225
1,378
2,198
161
50
211
500
50
603
225
1,378
1,589
609
–
609
–
–
–
–
–
609
600
60
660
500
50
602
79
1,231
1,891
200
60
260
500
50
602
79
1,231
1,491
400
–
400
–
–
–
–
–
400
19 Funding bears interest at the relevant market
floating rate plus a margin.
20 EKF facility is an unsecured amortising term loan,
provided by the official export credit agency of
Denmark, for the construction of Te Uku wind farm.
21 Retail Bonds are senior unsecured retail bonds bearing
interest rates of 4.53%, 4.88% and 4.21%.
22 USD fixed rate bonds are unsecured fixed rate bonds
issued in the United States Private Placement Market.
23 NZD commercial paper comprises senior unsecured
short-term debt obligations paying a fixed rate of
return over a set period of time.
1 3 9
MERIDIAN INTEGRATED REPORT 2021NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2021 C
C8 Green Financing
To recognise Meridian’s commitment,
(CBS); and Asia Pacific Loan Market
Green Debt Instruments under Meridian’s Green Finance Programme
Green Debt allocated to the Hydro Pool24
30 June 2021
leadership and investment in renewable
Association Green Loan Principles
energy, Meridian has designed a Green
(GLP), (together the Market Standards).
Finance Programme which covers both
existing and future issuances of debt
instruments (Programme).
The proceeds of Meridian’s debt
instruments, outlined in the following
tables, have been allocated (directly
The Programme Framework
or notionally) to refinance eligible
(Framework) sets out the process,
wind and hydro projects and assets
criteria and guidelines under which
that meet the market standards.
Type – $M
USPP Series 2014-1 Tranche A25
USPP Series 2014-1 Tranche B25
USPP Series 2019-1 Tranche A25
USPP Series 2019-1 Tranche B25
USPP Series 2019-1 Tranche C25
Total USPP
Meridian intends to issue and/or
manage existing and future bonds
and loans under the Programme
which contribute towards achieving
Meridian’s sustainable objectives.
The Framework is aligned with the
following market standards as at
the date of the Framework:
Further information on the Green
Wholesale FRN – 10yr
Finance Programme, including the
Bank Facilities26
Programme framework document,
Commercial Paper27
opinions from DNV GL Business
Assurance Pty. Ltd, Climate Bonds
Standard Certification and Green
Asset and Debt registers are
available on Meridian’s website at
CUSIP/NZX
Code
Currency
borrowed in
Facility
amount
Drawn
facility
amount
Q5995*AA6
Q5995*AB4
Q5995#AE4
Q5995#AF1
Q5995#AG9
USD
USD
USD
USD
USD
NZD
NZD
NZD
47
117
183
183
73
603
50
770
225
47
117
183
183
73
603
50
161
225
Total Green Debt allocated to the Hydro Pool
1,648
1,039
Green Debt allocated to the Wind Pool28
30 June 2021
Type – $M
Retail Bond (Mar-23)
Retail Bond (Mar-24)
Retail Bond (Mar-25)
Total Domestic Bonds
EKF Amortising Facility
CUSIP/NZX
Code
Currency
borrowed in
Facility
amount
MEL030
MEL040
MEL050
NZD
NZD
NZD
NZD
150
150
200
500
50
Drawn
facility
amount
150
150
200
500
50
Total Green Debt allocated to the Wind Pool
Total Green Debt
550
2,198
550
1,589
24 Verified as meeting the criteria established for Meridian by DNV GL which align with the stated definition of Green
Bonds and Loans within the Green Bond/Loan Principles.
25 United States private placement (USPP) Notes are included as the NZD equivalent under the Cross-Currency Interest
Rate Swaps related to the Issue.
26 Committed Bank facilities are included at the face value of the facilities.
27 Commercial Paper is included as the amount on issue.
28 Climate Bonds Standard Certified
International Capital Markets
www.meridianenergy.co.nz/
Association (ICMA) Green Bond
investors/reports-and-
Principles (GBP); Climate Bonds
presentations/green-finance.
Standard currently version 3.0
14 0
MERIDIAN INTEGRATED REPORT 2021NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2021 C
C9 Lease Liabilities
Lease liabilities analysis
Minimum lease payments
Not later than 1 year
Later than 1 year and not later than 3 years
Later than 3 years and not later than 5 years
Later than 5 years
Gross future lease payables
Less future finance costs
Present value of lease liabilities
Analysed as:
Not later than 1 year
Later than 1 year and not later than 3 years
Later than 3 years and not later than 5 years
Later than 5 years
Present value of lease liabilities
Comprising:
Current
Non-current
Lease details
Meridian’s leases relate to office
spaces, transmission connection assets
at Mill Creek and Mt Mercer, and land
access arrangements at our Australian
generation and development sites.
Meridian reported interest expense
on lease liabilities of $5 million
(30 June 2020: $6 million) in the
income statement.
Refer to Note B1 Property, plant and
equipment for details of the related
right of use lease assets.
2021
$M
2020
$M
Lease liabilities, measurement
and recognition
10
19
18
99
146
(49)
–
97
7
13
12
65
97
7
90
97
10
20
19
109
158
(54)
104
7
14
13
70
104
7
97
104
Meridian recognises the present value
of expected lease payments under
lease arrangements as lease liabilities
payable. Subsequent repayments are
split between principal and interest
expense. The interest reflects a constant
periodic charge over the expected
term of the lease.
A number of our lease arrangements
contain options to extend. Where we
are reasonably certain of taking up those
options, they are included in the lease
liability. If there is any uncertainty around
whether a lease extension will be taken
up, it is excluded from the liability value.
Lease liabilities are classified as financial
liabilities at amortised cost.
The weighted average discount rate
applied in the calculation of lease
liabilities is 3.10% (30 June 2020: 3.11%).
141
MERIDIAN INTEGRATED REPORT 2021NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2021 C
C10 Commitments
Capital expenditure commitments
Property, plant and equipment
Software
Total capital expenditure commitments
Guarantees
Group
2021
$M
328
1
329
2020
$M
8
–
8
Various entities within the Group provide guarantees to external counterparties,
with these mostly relating to security for energy market clearing and lines
companies. The maximum liability under these guarantees is $166 million
(30 June 2020: $75 million).
In addition to the above Meridian Energy Limited has provided parent guarantees
for various construction and grid connection obligations of Mt Mercer Windfarm
Pty Limited. The maximum liability under these guarantees is $29 million
(30 June 2020: $30 million).
14 2
MERIDIAN INTEGRATED REPORT 2021NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2021 D
Financial
instruments used
to manage risk
In this section
This section explains the financial
risks Meridian faces, how these risks
affect Meridian’s financial position
and performance, and how Meridian
manages these risks. In this section
of the notes there is information:
a. outlining Meridian’s approach to
financial risk management; and
b. analysing financial (hedging)
instruments used to manage risk.
D1 Financial risk management
Financial instrument recognition
Meridian’s activities expose it to a
variety of financial risks. Its financial
risk management framework focuses on
the unpredictability of financial markets
and wholesale energy markets. The
Meridian designates or classifies
financial hedging instruments as:
Calculation of fair value
for financial instruments
Meridian uses quoted prices and/or
• Fair value hedge, hedges of the fair
a discounted cash flows approach in
value of recognised assets or liabilities
order to calculate fair values for financial
or a firm commitment; or
instruments. Fair value measurements
Board approves policies including Group
• Cash flow hedge, hedges of a
Treasury, Energy Hedging and Credit
Policies which set appropriate principles
and risk tolerance levels to guide
particular cash flow associated with a
recognised asset or liability or a highly
probable forecast transaction; or
process:
are grouped within a three-level
fair value hierarchy based on the
observability of inputs to the valuation
management in carrying out financial
risk management activities to minimise
• Held for trading, financial instruments
which have not been designated in a
potential adverse effects on the financial
hedging relationship.
performance and economic value of
the Group. The key risks managed are
discussed further below.
Meridian accounts for derivative
and certain designated financial
instruments as fair value through
In order to help balance certain risk
the income statement.
exposures, Meridian uses a variety of
financial instruments (hedges). Hedges
are categorised as either “Treasury”
or “Energy” related, based on their
underlying nature. A small number
of Treasury hedges are designated in
hedge accounting relationships (refer
to Hedge accounting section for further
detail). Meridian does not enter into
speculative trades.
Hedges are initially recognised at
fair value on the dates the contracts
are agreed, and are subsequently
remeasured on a periodic basis.
Remeasurement is recognised in
the income statement.
Realised flows on hedges are recognised
in the income statement within EBITDAF,
in the same line as the underlying
business/transactions being hedged.
Fair value (or unrealised) changes are
recognised in “Net change in fair value
of energy hedges” or “Net change in fair
value of treasury hedges”, depending
on the underlying business nature of
the hedge.
• Level 1 Inputs: quoted prices
(unadjusted) in active markets for
identical assets or liabilities that the
entity can access at reporting date;
• Level 2 Inputs: either directly (i.e. as
prices) or indirectly (i.e. derived from
prices) observable inputs other than
quoted prices included in Level 1; or
• Level 3 Inputs: inputs that are not
based on observable market data
(i.e. unobservable inputs).
Meridian has a number of energy
hedges that require management
estimation and judgement in order to
generate a fair value at each reporting
date. These estimates can have a
significant risk of material adjustment
in future periods. This is discussed in
more detail later in this section.
14 3
MERIDIAN INTEGRATED REPORT 2021NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2021 D
D1 Financial risk management continued
Credit risk
Meridian is exposed to the risk of
default in relation to energy sales
to wholesale and retail customers,
hedging instruments, guarantees
and deposits held with banks and
other financial institutions.
For wholesale customers, individual
credit limits are set based on internal
or external credit ratings in accordance
with limits set by the Board. Where
customers are not independently credit
rated, an assessment of credit quality
is made, taking into account financial
position, past experience and other
relevant factors. If appropriate, letters
of credit/guarantees are obtained from
Liquidity risk
Meridian is exposed to the
dynamic nature of energy
markets and weather patterns,
which can affect liquidity.
counterparties to reduce credit risk to
Meridian ensures flexibility in funding
acceptable levels. These assessments
by maintaining committed surplus credit
In addition to borrowings, Meridian has
entered into a number of letters of credit
and guarantee arrangements which
provide credit support of $166 million for
Meridian’s general operations (30 June
2020: $75 million). Meridian indemnifies
the obligations of the bank in respect
of the letters of credit and performance
guarantees issued by the bank to
counterparties of Meridian.
For retail customers, credit checks
and the utilisation of credit limits
are carried out before new customers
and security provided by wholesale
are accepted. The credit team oversees
customers are reviewed and monitored
the collection of receivables and
works with customers to minimise
the chances of bad debts occurring.
Management monitors the size and
nature of retail customer exposures
on a regular basis and acts to
mitigate the risk if deemed to
exceed acceptable levels.
For banks and financial institutions,
lines available of at least $200 million
(refer to Note C7 Borrowings for details
of undrawn facilities). This helps ensure
Meridian has sufficient headroom under
both normal and abnormal hydrological
by the Chief Financial Officer.
The carrying amounts of financial
assets recognised on the balance sheet
conditions.
best represent Meridian’s maximum
Meridian manages its term debt
likely exposure to credit risk at the date
requirements on a portfolio basis. To
of this report. Refer to Note C6 Trade
reduce concentration risk on any one
receivables for a description of how we
lender or funding type, Meridian uses
provide for any credit losses. Meridian
a range of different funding sources
does not have any significant credit risk
and currencies. Meridian also monitors
only independently related parties with
concentrations.
a minimum rating of ‘A’ are accepted.
contractual maturities and ensures these
are well spaced (or laddered) so that
refinancing risks are manageable.
14 4
MERIDIAN INTEGRATED REPORT 2021NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2021 D
D1 Financial risk management continued
Liquidity Risk –
Contractual maturities
The following tables are an analysis
of the contractual undiscounted cash
flows (settlements expected under
the contracts) relating to financial
2021
$M
Borrowings
Lease liabilities
Payables, accruals, provisions
and option premiums
liabilities and a reconciliation from total
Treasury hedges
undiscounted cash flows to carrying
Energy hedges
amounts. Meridian expects to meet
its future obligations from operating
cash flows and debt financing.
2020
$M
Borrowings
Lease liabilities
Payables, accruals, provisions
and option premiums
Treasury hedges
Energy hedges
Due
within
1 year
475
10
626
40
27
Due in
1 to 2 years
Due in
3 to 5 years
Due after
5 years
Total
undiscounted
cash flows
Impact of
other
non-cash
items
Impact of
interest/FX
discounting
2021
carrying
value
207
19
40
30
7
554
18
–
57
15
650
99
35
34
–
1,886
146
701
161
49
(3)
–
–
–
–
(207)
(49)
(13)
(16)
–
1,676
97
688
145
49
1,178
303
644
818
2,943
(3)
(285)
2,655
Due
within
1 year
144
10
410
43
27
634
Due in
1 to 2 years
Due in
3 to 5 years
Due after
5 years
Total
undiscounted
cash flows
Impact of
other
non-cash
items
Impact of
interest/FX
discounting
174
20
42
42
21
778
19
9
92
31
753
109
24
75
29
1,849
158
485
252
108
299
929
990
2,852
(4)
–
–
–
(1)
(5)
2020
carrying
value
1,688
104
477
238
104
(157)
(54)
(8)
(14)
(3)
(236)
2,611
14 5
MERIDIAN INTEGRATED REPORT 2021NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2021 D
Market risk
Foreign exchange risk
Interest Rate risk
Meridian is involved in both the energy
Meridian is exposed to foreign
Meridian is exposed to interest rate risk
and financial markets and as such is
exchange risk arising from sales and
arising from its funding portfolio, which
exposed to rises and falls in those
procurement of goods and services
is a mix of fixed and floating rate debt.
markets and the subsequent income
denominated in foreign currencies
statement volatility this can cause. The
and also from term debt raised in
main sub-types of market risk that we
foreign currencies.
are exposed to are discussed below.
Commodity price risk
Meridian trades in the wholesale energy
markets and so is exposed to volatility in
forward energy prices.
Being both a generator and a retailer
of energy means that Meridian has a
natural hedge for most of the exposure
to future energy prices.
Meridian also uses derivatives to help
manage its net energy position, some
of which are traded in quoted markets,
and some of which are traded directly
with other energy market participants.
Energy hedges are not placed in hedge
accounting relationships.
For exposures resulting from Meridian’s
general operations, foreign exchange
spot or forward contracts are used to fix
the value in reporting currency terms.
Material items may be placed in hedge
accounting relationships and can be
either fair value hedges or cash flow
hedges, depending on the nature of
the transaction/underlying exposure.
For term debt raised in US dollars, cross
currency interest rate swaps (CCIRS) are
used to convert the proceeds back to
functional currency. These derivatives
minimise foreign exchange risk on both
the notional and the coupon flows over
the life of the debt. CCIRS are placed in
both fair value and cash flow hedge
accounting relationships.
Meridian issues debt on both a fixed
and a floating basis and is thus exposed
to changes in interest rates over time.
A portfolio of interest rate swaps (IRS) is
then used to manage the net exposure
to interest rate risk, in line with a Board
approved hedging policy and profile.
Please also refer to the Foreign exchange
risk section for derivatives used for term
debt raised in foreign currencies.
Meridian swaps a significant portion
of its borrowings to floating rates
at loan inception, and hedges the
resulting interest rate exposure over a
tenure based profile of fixed IRS. This
is achieved using a combination of
CCIRS and IRS hedges. Where Meridian
borrows in foreign currency it uses
CCIRSs to swap all foreign currency
denominated interest and principal
repayments to the reporting currency.
This results in floating rate borrowings in
the entity’s reporting currency. Meridian
uses IRS hedges to fix floating interest
rates in line with the Board approved
hedging policy and profile.
14 6
MERIDIAN INTEGRATED REPORT 2021NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2021
Meridian groups its financial instrument into two categories –
Treasury hedges and Energy hedges.
$M
Treasury hedges
Energy hedges
of which
Current
Non Current
Fair value on the balance sheet
2021
2020
Assets
Liabilities
Assets
Liabilities
106
300
406
192
214
406
(145)
(49)
(194)
(63)
(131)
(194)
223
142
365
100
265
365
(238)
(104)
(342)
(63)
(279)
(342)
Further disclosure and analysis of these two categories are noted on the
following pages.
147
MERIDIAN INTEGRATED REPORT 2021NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2021 D
D1 Financial risk management continued
Treasury hedges
Treasury hedges – sensitivity analysis
Hedges in the Treasury category generally relate to management of the interest
The table below summarises the impact of changes in significant inputs (assuming
rate risk and foreign exchange risk that arise from Meridian’s funding activities
all other variables are held constant) on the valuation of Treasury hedges and
and from general Group operations.
therefore on Meridian’s after tax profit and equity.
The instruments used are CCIRS, IRS and forward exchange contracts (FX).
Note that changes in the fair value of the CCIRS are fully offset by opposite impacts
Fair value on the balance sheet
Fair value
movements
in the income
statement
Outstanding
aggregate
notional
principals34
2021
$M
2020
$M
2021
$M
2020
$M
2021
$M
2020
$M
Treasury hedges
Level
Assets Liabilities Assets Liabilities
from hedge accounting entries and the FX retranslation of the USD debt. Therefore,
the CCIRS P&L sensitivity is nil and is not shown in the below table.
The majority of the FX portfolio are designated in cash flow hedge relationships.
Changes in spot exchanges rates are fully offset by opposite impacts from hedge
accounting entries in the P&L. For these contracts the P&L sensitivity is nil.
CCIRS
– Interest Rate Risk29
– Basis and Margin Risk30
– Foreign Exchange Risk31
IRS32
FX33
62
(6)
28
84
16
6
2
2
2
–
–
–
–
118
(4)
80
194
–
–
–
–
(1)
(2)
–
–
–
–
(1)
(2)
602
602
Interest rates
Impact on after tax
profit & equity
2021
$M
2020
$M
Sensitivity
(145)
29
(238)
80
(46)
1,502
1,427
New Zealand benchmark bill rate
-100 basis points (bps)
–
–
–
–
–
165
16
+100 bps
-100 bps
+100 bps
-20%
+20%
(38)
38
(3)
3
(1)
1
(40)
44
(4)
4
–
–
Treasury hedges
106
(145)
223
(238)
79
(48)
Australian benchmark bill rate
Meridian uses CCIRS to hedge risks involved with long term debt issued in USD. In the above table the CCIRS are separated
into component parts as follows:
Foreign Exchange Rates
Effect of movement in foreign exchange
rates on foreign exchange contracts
29 Interest rate risk: this is the movement in value of the CCIRS due to changes in benchmark interest rates. The other side
of this movement is recorded in the income statement in the “Net change in fair value of treasury instruments”, together
with changes in the fair value hedge adjustments on the designated USD borrowings.
30 Basis and margin risk: this is the movement in the value of the CCIRS due to changes in basis (excluding foreign
exchange) and credit margin. The other side of this movement is recorded in the income statement in the “Net change
in fair value of treasury instruments”, together with cash flow hedge accounting adjustments that transfer effective
hedge portions to the Cash Flow Hedge Reserve within Equity.
31 Foreign Exchange Risk: this is the movement in value of the CCIRS due to changes in spot foreign exchange rates. The
impact of retranslation is recorded in the income statement in “Net change in fair value of treasury instruments” and is
offset by equal and opposite retranslation effects on the related borrowings.
32 Changes in fair value of IRS are recognised in the income statement within “Net change in fair value of treasury
instruments”.
33 Changes in fair value of FX contracts are recognised in the income statement within “Net change in fair value of treasury
instruments”, together with cash flow hedge accounting adjustments that transfer effective hedge portions to the Cash
Flow Hedge Reserve within Equity.
34 These cover multiple legs including offsetting legs and maturities out to 2036.
In the table above, fair value movements in the income statement are shown
net of any related hedge accounting adjustments and retranslation of foreign
currency borrowings.
Refer to the Hedge Accounting section of Note D1 Financial risk management
for further detail on fair value and cash flow hedge relationships.
14 8
MERIDIAN INTEGRATED REPORT 2021NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2021
D
D1 Financial risk management continued
Energy hedges
Hedges in this category relate to Meridian’s management of risk arising from
Meridian’s hedging strategy focuses on its net exposure by estimating both
the generation, purchase and sale of energy.
expected generation and energy purchases required to support contracted sales.
Meridian is exposed to changes in the spot price of electricity it receives for
electricity generated, or pays to buy electricity and gas to supply customers.
Additionally, inflows into Meridian’s storage lakes are variable, therefore the
volume of electricity required to supply customers may exceed (or fall short
of) generation production.
Execution of this strategy is guided by Board approved parameters. Changes in
the fair value of energy hedges are recognised in the income statement within
“Net change in fair value of energy hedges”. Hedge accounting is not applied to
Energy hedges.
Fair value on the balance sheet
2021
$M
2020
$M
Fair value movements in
the income statement
2021
$M
2020
$M
Outstanding aggregate
notional volumes35
2021
2020
Energy hedges
Market traded electricity hedges
Market traded gas hedges
Other electricity hedges
Other gas hedges
Electricity options
Large Scale Generation Certificates (LGCs)
LGC – Holdings created from wind farm generation
LGC – Hedges
Energy related hedges
35 These cover multiple legs including offsetting legs and maturities out to 2030
Level
Assets
Liabilities
Assets
Liabilities
1
1
3
2
3
1
2
149
–
113
3
29
5
1
6
300
(21)
–
(14)
–
–
–
(14)
(14)
(49)
57
–
27
–
50
6
2
8
(16)
(2)
(65)
(10)
–
–
(11)
(11)
47
2
132
13
(21)
(1)
(3)
(4)
142
(104)
169
(23)
(2)
(34)
(10)
(20)
1
(25)
(24)
(113)
20,158 GWh
16,982 GWh
322 TJ
549 TJ
13,734 GWh
21,086 GWh
3,749 TJ
3,678 TJ
1,722 GWh
2,855 GWh
0.2 million
0.1 million
2.2 million
2.1 million
The “Market traded electicity hedges” and “Market traded gas hedges” categories
The LGCs category has two sub-components. The first represents the Renewable
contain instruments that are traded on various exchange-based markets.
Energy Certificates (RECs) that Meridian’s Australian wind farms earn in the form
The “Other electricity hedges” and “Other gas hedges” categories contain over-the-
counter derivatives, where counterparties include customers, other energy market
participants and financial institutions. These hedges are generally longer-term,
larger volume contracts that manage specific risks that can not be managed
through exchange-based markets.
Meridian trades electricity options with other generators. These are used to
support the management of inflow and storage variability in the catchments
where it generates electricity.
of LGCs. Additionally, Powershop Australia is required to purchase and surrender
RECs. The second represents the derivatives used to firm prices received for LGCs
generated and consequently reduce the profit volatility of each wind farm. At the
time of generation, LGCs are recognised as income in energy margin at the prevailing
spot price. LGC holdings and hedges are all recognised as financial instruments on
the balance sheet at their fair value.
149
MERIDIAN INTEGRATED REPORT 2021NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2021 D
D1 Financial risk management continued
Energy hedges – sensitivity analysis
The table below summarises the impact of changes in significant inputs
(assuming all other variables are held constant) on the valuation of Energy
hedges and therefore on Meridian’s after tax profit and equity.
Energy hedges
Energy prices
Discount rates
Call volumes
LGC prices
Impact on after tax
profit & equity
2021
$M
2020
$M
(75)
76
1
(1)
(2)
2
2
(2)
(53)
55
(2)
2
(3)
3
2
(2)
Sensitivity
-10%
+10%
-100 bps
+100 bps
-10%
+10%
-10%
+10%
Settlements of energy hedges
The following provides a summary of the settlements through EBITDAF for Energy hedges:
2021
2020
Market-
traded
electricity
hedges
Market-
traded
gas hedges
Other
electricity
hedges
Other
gas hedges
Electricity
Options
LGC
related
Market-
traded
electricity
hedges
Market-
traded
gas hedges
Other
electricity
hedges
Other
gas hedges
Electricity
Options
LGC
related
Total
(126)
341
19
(16)
24
(50)
3
215
(26)
–
–
–
(14)
69
55
–
–
–
–
4
4
38
(15)
23
Total
48
8
56
Operating revenue
Operating expenses
Total settlements
in EBITDAF
(47)
58
11
–
(2)
(2)
(98)
225
127
–
1
1
–
75
75
1 5 0
MERIDIAN INTEGRATED REPORT 2021NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2021 D
Fair value technique and key inputs
inputs and assumptions are used by the
• calibration factor applied to forward
In estimating the fair value of an asset
valuation technique. These are:
price curves as a consequence of
or liability, Meridian uses market-
• forward price curves referenced to
initial recognition differences;
observable data to the extent that it is
the ASX for electricity, published
• NZAS continues to operate; and
available. The Audit and Risk Committee
market data on gas/oil prices,
• contracts run their full term.
of Meridian determines the overall
published market interest rates and
appropriateness of key valuation
published forward foreign exchange
techniques and inputs for fair value
rates;
measurement. The Chief Financial
Officer explains fair value movements in
his report to the Board.
• Meridian’s best estimate of electricity
volumes called over the life of
electricity options;
Where the fair value of a financial
• discount rates based on market
instrument is calculated as the present
wholesale interest rate curves,
value of the estimated future cash flows
adjusted for counterparty credit risk;
of the instrument (DCFs), a number of
The impact of COVID-19 has been
considered as part of the assumptions
when determining the fair value of our
financial instruments. However, there
was no impact on fair value when taking
this into consideration.
The table below describes any
additional key inputs and techniques
used in the valuation of Level 2 and 3
energy hedges.
Financial asset
or liability
Description of input
Range of significant
unobservable inputs
Relationship of
input to fair value
Other electricity
Price, where quoted prices are not available or not relevant
$26/MWh to $98/MWh
An increase in the forward
hedges, valued
(i.e. for long-dated contracts), Meridian’s best estimate of
(in real terms), excludes
wholesale electricity price
using DCFs
long-term forward wholesale electricity price is used. This is
observable ASX prices.
increases the fair value of buy
based on a fundamental analysis of expected demand and
the cost of new supply and any other relevant wholesale
market factors.
LGD forward
Price, based on a forward LGC price curve from a third party
A$8 to A$39
contracts & options
broker, and benchmarked against market spot prices.
valued using DCFs /
Black Scholes
Other factors, include:
• Calibration factor applied to forward price curves as a
consequence of initial recognition differences.
hedges and decreases the fair
value of sell hedges. A decrease in
the forward wholesale electricity
price has the opposite effect.
An increase in the forward LGC
price decreases the fair value of
sell hedges and increases the fair
value of buy hedges. A decrease
in the forward LGC price has the
opposite effect.
1 51
MERIDIAN INTEGRATED REPORT 2021NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2021
D
D1 Financial risk management continued
Level 3 financial instrument analysis
The following provides a summary of the movements through EBITDAF
and movements in the fair value of level three financial instruments:
2021
2020
Reconciliation of Level 3 fair value movements $M
Other
electricity
hedges
Electricity
options
Energy hedges settled in EBITDAF:
Operating revenue
Operating expenses
Total settlements in EBITDAF
Net change in fair value of energy hedges:
Remeasurement
Hedges settled
Total realised and unrealised losses on energy hedges
Balance at the beginning of the period
Fair value movements
Balance at the end of the year
(98)
225
127
264
(127)
137
(38)
137
99
–
75
75
54
(75)
(21)
50
(21)
29
Other
electricity
hedgess
Electricity
options
Total
(14)
69
55
21
(55)
(34)
(4)
(34)
(38)
–
4
4
(16)
(4)
(20)
70
(20)
50
(14)
73
59
5
(59)
(54)
66
(54)
12
Total
(98)
300
202
318
(202)
116
12
116
128
Fair value movements of Level 3 energy hedges in 2021 which are held at balance date total $85 million (30 June 2020: $52 million).
Movements in recalibration differences
arising from energy hedges
Opening difference
Initial differences on new hedges
Volumes expired and amortised
Recalibration for future price estimates and time
Closing difference
Initial recognition difference
2021
$M
2020
$M
An initial recognition difference arises when the modelled value of an energy
(1)
–
–
(1)
(2)
(3)
hedge differs from the transaction price (which is the best evidence of fair value).
–
1
1
(1)
This difference is accounted for by recalibrating the valuation model by a fixed
percentage to result in a value at inception equal to the transaction price. This
recalibration is then applied to future valuations over the life of the contract.
The resulting difference shown in the table reflects potential future gains or losses
yet to be recognised in the income statement over the remaining life of the contract.
1 5 2
MERIDIAN INTEGRATED REPORT 2021NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2021
D
D1 Financial risk management continued
Hedge accounting
risk on USD borrowings in fair value
This means that:
Foreign exchange risk
Meridian makes use of hedge
hedge accounting relationships.
• the CCIRS are revalued to the
accounting for USD borrowings, certain
This means that
highly probable forecast transactions
and the financial instruments that are
used to economically hedge these
exposures. Refer to the start of the Risk
Management section for a description
of the key risks Meridian manages.
• the carrying value of the USD
borrowings are adjusted for changes in
the fair value of the hedged risk – noted
as “hedge accounting adjustments” in
Note C7 Borrowings; and
• the CCIRS are revalued to the
Meridian only designates hedge
income statement for this same risk.
income statement for basis risk
and margin risk; and
Meridian has hedged highly
probable forecast capital expenditure
denominated in currencies other than
• the effective portions of the
NZD using forward exchange contracts.
hedge are moved from the income
The foreign currency exposures give
statement to the Cash Flow Hedge
rise to the risk of variability to future
Reserve within Equity.
cashflows. To mitigate this risk forward
accounting relationships where the
underlying exposure and the hedge
are eligible for hedge accounting and
are an economic match, where credit
risk is not expected to dominate the
fair value of the hedge, and where
we expect the hedge relationship
to remain effective over its life.
The USD borrowings (hedged items)
and the CCIRS (hedging instruments)
present Meridian with risks which we
account for in the following ways:
Interest rate risk
The USD borrowings are fixed rate
liabilities and thus present interest
rate risk, should benchmark interest
rates change. This risk is neutralised
by receiving the same fixed rate on
the USD leg of the matching CCIRS.
Meridian designates the interest rate
As noted earlier, there may be small
differences between the above entries
which result in hedge ineffectiveness
in the income statement.
As long as the hedge accounting
relationships remain effective, the
revaluations of both the hedged item
Refer to:
and hedging instrument should net
to a minimal amount in the income
statement. This residual difference is
• Note C7 Borrowings for the
carrying value of the hedged
items (USD borrowings);
referred to as hedge ineffectiveness.
• Note D1 Treasury hedges for
foreign exchange contracts have
been entered into. The cash flows
associated with these contracts are
timed to mature when the payment
for the capital expenditure is made.
For contracts designated as cash flow
hedges for accounting purposes, when
the cash flows occur Meridian adjusts
the carrying value of the asset acquired.
The accumulated life to date hedge
accounting adjustments on the USD
borrowing total $56 million (2020:
$114 million).
Basis and margin risk
further information on the hedging
Hedge ineffectiveness
instruments (CCIRS), including
The table below summarises hedge
notionals and changes in fair
ineffectiveness. This is included within
value during the period; and
“Net change in fair value of Treasury
• the Statement of Changes in
Hedges” in the income statement.
Equity for the balance of the
Impact on income statement
The combination of USD borrowings
Cash Flow Hedge Reserve and
and CCIRS economically results in
movements during the period.
Meridian having floating rate NZD
borrowings. This presents a risk of
variability in future cash flows. As
such, Meridian designates basis risk
(excluding FX) and margin risk into
cash flow hedge relationships.
On the balance sheet, USD borrowings
are included within Term Borrowings
and CCIRS are included within Financial
Instruments.
Hedge Ineffectiveness
2021
$M
–
2020
$M
(2)
Ineffectiveness is primarily caused by
credit counterparty risk on CCIRS. This risk
is part of the CCIRS fair value but is not
included in the hedge accounting entries.
1 5 3
MERIDIAN INTEGRATED REPORT 2021NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2021 D
D1 Financial risk management continued
Future cash flows
The table below estimates the contractual undiscounted future cash flows that we expect on hedge accounted items. Amounts noted include coupons and repayment/
exchange of notionals on maturity.
Currency as indicated below
USD Borrowings (shown in USD)
CCIRS
– USD leg (coupons and maturity flow – shown in USD)
– Functional currency leg (coupons and maturity flow – shown in NZD)
Foreign Exchange Contracts
– Foreign currency leg (shown in NZD)
– Functional currency leg (shown in NZD)
2021
$M
2020
$M
Due within
1 year
Due within
1–2 years
Due within
2–5 years
Due after
5 years
Due within
1 year
Due within
1–2 years
Due within
2–5 years
Due after
5 years
(56)
(16)
(47)
(454)
(17)
(56)
(47)
(469)
56
(58)
12
(11)
16
(13)
95
(90)
47
(53)
62
(59)
454
(638)
–
–
17
(11)
–
–
56
(57)
–
–
47
(34)
469
(627)
–
–
–
–
Functional currency coupons are set quarterly based on NZ and AU benchmark rates. They are shown in this table based
on market forward interest rates and translated to NZD equivalent using spot AUD/NZD exchange rates at reporting date.
The foreign currency leg of foreign exchange contracts is translated to NZD using spot exchange rates at reporting date.
Financial instruments which are offset
In certain circumstances Meridian offsets the fair value of financial instruments where it has legal agreements in place
that permit netting of positions and net settlement.
2021
$M
2020
$M
Gross Value
Value Offset
Carrying Value
Gross Value
Value Offset
Carrying Value
Financial instrument assets
– Energy hedges
– Treasury hedges
Total financial instrument assets
Financial instrument liabilities
– Energy hedges
– Treasury hedges
Total financial instrument liabilities
Net financial instruments
1 5 4
505
106
611
(254)
(145)
(399)
212
(205)
–
(205)
205
–
205
–
300
106
406
(49)
(145)
(194)
212
205
223
428
(167)
(238)
(405)
23
(63)
–
(63)
63
–
63
–
142
223
365
(104)
(238)
(342)
23
MERIDIAN INTEGRATED REPORT 2021NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2021 E
Group
structure
In this section
Name of entity
Meridian Energy Limited36
Principal activity
Functional Currency
2021
2020
Interest held
by the group
Powershop New Zealand Limited37
Electricity retailing
New Zealand dollar
This section provides information to
Flux Federation Limited
Software development
New Zealand dollar
help readers understand the Meridian
Group structure and how it affects
the financial position and performance
of the Group. In this section of the
notes there is information about
Meridian’s Subsidiaries.
E1 Subsidiaries
The consolidated financial statements
include the financial statements of
Meridian Energy Limited and the
subsidiaries listed below.
They all have share capital consisting
solely of ordinary shares that the Group
holds directly, and the proportion of
ownership interests held equals the
Group’s voting rights.
Meridian Energy Limited provides
support to its subsidiaries where
necessary in order to ensure they
meet their obligations as they fall due.
Flux-UK Limited
Licence holder
British pounds
Three River Holdings No. 1 Limited36
Holding company
New Zealand dollar
Three River Holdings No. 2 Limited36
Holding company
New Zealand dollar
Meridian Energy Australia Pty Limited36
Management services
Australian dollar
GSP Energy Pty Limited
Electricity generation
Australian dollar
Meridian Finco Pty Limited36
Financing
Australian dollar
Rangoon Energy Park Pty Limited38
Wind farm development
Australian dollar
Wandsworth Wind Farm Pty Limited38
Wind farm development
Australian dollar
Meridian Energy Markets Pty Limited36
Non-trading entity
Australian dollar
Meridian Wind Monaro Range Holdings Pty Limited36
Holding company
Australian dollar
Meridian Wind Monaro Range Pty Limited36
Holding company
Australian dollar
Mt Millar Wind Farm Pty Limited36
Electricity generation
Australian dollar
Meridian Australia Holdings Pty Limited36
Holding company
Australian dollar
Meridian Wind Australia Holdings Pty Limited36
Holding company
Australian dollar
Mt Mercer Windfarm Pty Limited36
Electricity generation
Australian dollar
Powershop Australia Pty Limited
Electricity retailing
Australian dollar
Dam Safety Intelligence Limited
Professional services
New Zealand dollar
Meridian LTI Trustee Limited
Meridian Energy Captive Insurance Limited
Trustee
Insurance
New Zealand dollar
New Zealand dollar
Meridian Limited
Non-trading entity
New Zealand dollar
Meridian Energy International Limited
Non-trading entity
New Zealand dollar
Powershop New Zealand Limited37
Non-trading entity
New Zealand dollar
36 Members of guaranteeing group.
37 On 30 April 2021, Powershop New Zealand Limited was amalgamated into Meridian Energy Limited. The Powershop entity
was removed from the companies office register and a new entity created (under the same name) for copyright purposes.
38 On 3 March 2020, Meridian Energy Australia Pty Ltd acquired 100% shareholdings in Rangoon Energy Park Pty Limited and
Wandsworth Wind Farm Pty Limited.
–
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
–
1 5 5
MERIDIAN INTEGRATED REPORT 2021NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2021
F
Other
In this section
F1 Share-based payments
If the performance hurdles have
is less than zero), or if TSR does not meet
This section includes the remaining
Long term incentive (LTI)
information relating to Meridian’s
financial statements which is
required to comply with financial
reporting standards.
In August 2019, the Board approved
a new LTI plan to replace Meridian’s
previous LTI plan. Set out below is a
summary of the previous LTI Plan which
was last offered in FY19 (for the period
commencing on 1 July 2018 and ending
on 30 June 2021). Also
set out below is a summary of the new
LTI plan which was first offered in FY20
(for the period commencing on 1 July
2019 and ending 30 June 2022).
Previous LTI Plan
The previous LTI is a share loan and
cash bonus scheme, where executives
purchase Meridian shares via an
interest-free loan from the company,
with the shares held on trust by the
LTI plan trustee. Any shares awarded
depend on whether the following
performance hurdles are met over
a three-year period:
• the company’s absolute total
shareholder return (TSR) must
be positive; and
• the company’s TSR compared
to a benchmark peer group.
been achieved, a progressive vesting
the peer group relative TSR hurdle of
scale is applied to determine how
50th percentile, all of the shares are
many shares vest:
forfeited to the trustee and the relevant
• if the company’s TSR over the
executive receives no benefits under the
three-year period exceeds the 50th
LTI. Where the TSR is greater than the
percentile TSR of the benchmark peer
50th percentile of the benchmark peer
group, at least 50% of an executive’s
group, but below the 75th percentile,
shares will vest.
• 100% shares will vest on meeting the
75th percentile TSR of the peer group,
shares are allocated on a percentage
basis and any that have not vested will
also be forfeited.
with vesting on a straight-line basis
For the LTI plan that vested at the
between these two points.
end of 2021, the level of vesting was
• no shares will vest if the company’s
100% (2020: 100%). Therefore, the
TSR is less than the 50th percentile
outstanding balance of the interest free
TSR of the peer group.
loans at 30 June 2021 of $0.7 million has
now been repaid (2020: $0.5 million).
A total amount of 238,724 shares
have been transferred to the eligible
participants (2020: 208,707). In 2020
154,388 shares were forfeited which are
now held in trust by Meridian LTI Trustee
Limited until reallocation.
Once the vesting level has been
confirmed, a cash amount (after the
deduction of tax), but before other
applicable salary deductions, is used
to repay the executive’s outstanding
loan balance.
For each three-year plan, an independent
external expert measures TSR of
Meridian and the peer group of
companies along with the outcome on
the progressive vesting scale. If TSR is
not positive (i.e. in absolute terms
1 5 6
MERIDIAN INTEGRATED REPORT 2021NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2021 F
F1 Share-based payments continued
New LTI Plan
Performance Hurdles
For each three-year plan, an
independent external expert measures
the TSR of Meridian and the peer group
of companies along with the outcome
on the progressive vesting scale.
Share Rights will lapse if the Vesting
Conditions are not satisfied (although
this is subject to the Board’s discretion in
relation to the Employment Condition).
In the current financial year, 476,168
share rights were issued to eligible staff,
238,084 being ABS Rights and 238,084
being REL Rights.
Under the new LTI plan, the company
Share Rights are granted in two tranches:
issues rights to acquire ordinary shares
• Absolute Return Share (ABS) Rights;
in the company (Share Rights) to eligible
and
participants who accept the offer to
participate in the LTI plan. Each Share
Right entitles the holder to one ordinary
share in the company and an additional
number of shares equal to the value
of gross cash dividends per share
which would have been paid to a
New Zealand tax resident who held a
share for the duration of the vesting
period, calculated using a 10-day
volume weighted average price.
The number of Share Rights that
vest is dependent on:
• Meridian’s total shareholder return
over a three-year performance
period (Performance Period) relative
• Relative Return Share (REL) Rights.
For ABS Rights to vest, the company’s
TSR must be greater than the absolute
TSR benchmark which is set at the
beginning of the vesting period
with regard to the company’s cost of
equity (Absolute TSR Benchmark) on
a compounding annual basis over the
Performance Period. If the company’s
TSR is equal to or lower than the
Absolute TSR Benchmark, no ABS
Rights will vest. If the company’s
TSR is greater than the Absolute TSR
Benchmark, 100% of the ABS Rights
will vest.
to Meridian’s cost of equity;
The number of REL Rights that vest is
• Meridian’s total shareholder return
over the Performance Period relative
to a defined group of NZX Main
Board and ASX listed peer companies
(Performance Hurdles); and
• if the participant continues to be
employed by Meridian during
the vesting period (Employment
Condition).
determined by the company’s TSR over
the Performance Period relative to the
peer group. For any of the REL Rights to
vest, the company’s TSR must be greater
than or equal to the 50th percentile /
median TSR of the peer group. 100% of
the REL Rights will vest on meeting the
75th percentile TSR of the peer group,
with vesting on a straight-line basis
between these two points.
1 57
MERIDIAN INTEGRATED REPORT 2021NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2021 F
F1 Share-based payments continued
Movement in zero-priced share options
Grant date
Vesting date
LTI Scheme & Type
Weighted average
fair value of option
Balance at
start of the year
Granted
during the year
Vested
during the year
Forfeited
during the year
Balance at the
end of the year
Number of options
–
–
238,084
238,084
204,834
204,834
238,724
648,392
–
–
334,897
266,922
601,819
–
–
–
476,168
204,834
204,834
–
–
–
–
–
–
(238,724)
(238,724)
–
–
–
(208,707)
–
–
–
–
–
–
–
(96,173)
(58,215)
238,084
238,084
204,834
204,834
–
885,836
204,834
204,834
238,724
–
409,668
(208,707)
(154,388)
648,392
2021
9/03/21
9/03/21
7/10/2019 & 28/2/20
7/10/2019 & 28/2/20
22/08/2018
Total
2020
7/10/2019 & 28/2/20
7/10/2019 & 28/2/20
22/08/2018
07/09/2017
Total
30/06/23
30/06/23
30/06/22
30/06/22
30/06/21
30/06/22
30/06/22
30/06/21
30/06/20
New – ABS
New – REL
New – ABS
New – REL
Previous
New – ABS
New – REL
Previous
Previous
$3.53
$3.75
$3.54
$3.36
$1.78
$3.54
$3.36
$1.78
$1.61
1 5 8
MERIDIAN INTEGRATED REPORT 2021NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2021 F
F2 Related parties
F3 Auditors remuneration
Meridian transacts with other Government-owned or related entities independently
and on an arm’s-length basis. Transactions cover a variety of services including trading
energy, transmission, postal, travel and tax.
Directors of the Group may be directors or officers of other companies or organisations
with which members of the Group may transact.
Compensation of key management personnel
The remuneration of directors and other members of key management during the
year was as follows:
Auditors remuneration to Deloitte Limited for:
Audit and review of New Zealand-based
companies’ financial statements
Audit of overseas-based companies’ financial statements
Total audit fees
Other assurance fees
Total auditor remuneration
Group
2021
$M
0.6
0.2
0.8
0.1
0.9
2020
$M
0.6
0.2
0.8
0.1
0.9
Directors' Fees
Chief executive officer, senior management team
and subsidiary chief executives
Salaries and short-term benefits
Long-term benefits
Group
2021
$M
1
7
1
8
2020
$M
1
8
1
9
The Board has adopted a policy to maintain the independence of the Company’s
external auditor, including a review of all other services performed by Deloitte
Limited and recommending to the Office of the Auditor-General that there be
lead partner rotation after a maximum of five years. The Auditor-General has
appointed Mike Hoshek of Deloitte Limited as auditor of the company.
The audit fee includes Office of the Auditor-General overhead contribution of
$37,000 (30 June 2020: $33,300).
Other assurance services undertaken by Deloitte Limited during the year included
reviews of greenhouse gas inventory and sustainability reporting assurance, review
of the interim financial statements, audit of the securities registers, vesting of the
executive long-term incentive plan, the solvency return of Meridian Energy Captive
Insurance Limited and supervisor reporting.
Meridian has also paid $14,000 (2020: $14,000) to Deloitte Limited for administrative
and other advisory services to the Corporate Taxpayers Group, of which Meridian,
alongside a number of other organisations, is a member. In addition to this, Meridian
has paid $5,000 (2020: nil) to Deloitte Limited for consulting services relating to the
CFO Vantage Programme.
1 59
MERIDIAN INTEGRATED REPORT 2021NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2021 F
F4 Contingent assets and liabilities
F6 Changes in financial reporting standards
There were no contingent assets or liabilities at 30 June 2021 (2020: Nil).
All mandatory amendments and interpretations have been adopted in the current
F5 Subsequent events
year. None have had a material impact on these financial statements. Refer to
Significant Matter section for details regarding the 2020 restatement as a result
of the IFRIC Agenda Decision.
In August 2021, the directors of Meridian Energy Limited released an Information
Meridian is not aware of any standards issued but not yet effective that would
Memorandum to interested parties for the sale of its investment in Meridian Energy
materially affect the amounts recognised or disclosed in the financial statements.
Australia (“MEA”) which is held by Three River Holdings No. 2 Limited (a 100% owned
subsidiary of Meridian Energy Limited). The MEA investment includes the ownership
and operation of wind and hydro assets and retail activities under the Powershop
brand. If we proceed, any potential transaction will likely be confirmed before the end
of December 2021. The financial performance of the MEA business is presented in
the Australia segment in Note A1 Segment performance. The carrying value of the
assets and liabilities of the MEA investment as at 30 June 2021 was $778 million
and $416 million respectively. A significant amount of uncertainty surrounds the
amount of any sale proceeds and therefore it is not possible to accurately estimate
the financial effect of the transaction if it proceeds.
In August 2021, the Electricity Authority (EA) released its final decision on actions
to correct the December 2019 Undesirable Trading Situation. This decision relates
to the floods of December 2019 when hydro generators were managing record
breaking inflows and spill past hydro power stations was inevitable. Meridian’s
financial statements have been prepared on the basis of the final EA decision
which resets prices during the trading periods concerned. The impact on the
financial statements by making this adjustment was insignificant.
There are no other subsequent events other than dividends declared on
24 August 2021 (refer to Note C4 Dividends for further details)
1 6 0
MERIDIAN INTEGRATED REPORT 2021NOTES TO THE FINANCIALS — FOR THE YEAR ENDED 30 JUNE 2021 Independent auditor’s report
To the shareholders of Meridian Energy Limited
for the year ended 30 June 2021
The Auditor-General is the auditor
30 June 2021 and its consolidated
New Zealand Auditing and Assurance
course of trading activities of the Group.
of Meridian Energy Limited and its
financial performance and its
Standards Board, and we have fulfilled
These services have not impaired our
subsidiaries (the Group). The Auditor-
consolidated cash flows for the
our other ethical responsibilities in
independence as auditor of the Group.
General has appointed me, Mike
year then ended in accordance
accordance with these requirements.
Other than these engagements and arm’s
Hoshek, using the staff and resources
with New Zealand equivalents to
of Deloitte Limited, to carry out the
International Financial Reporting
audit of the consolidated financial
Standards and International
statements on his behalf.
Financial Reporting Standards.
We believe that the audit evidence
we have obtained is sufficient and
appropriate to provide a basis for
our opinion.
length transactions, and in our capacity as
auditor acting on behalf of the Auditor-
General, we have no relationship with,
or interests in, the Group.
Opinion
We have audited the consolidated
financial statements of the Group on
pages 115 to 160, that comprise the
consolidated balance sheet as at
30 June 2021, the consolidated income
statement, consolidated comprehensive
income statement, consolidated
statement of changes in equity and
consolidated statement of cash flows
for the year ended on that date and
the notes to the consolidated financial
statements including a summary of
significant accounting policies and
other explanatory information.
In our opinion, the consolidated
financial statements present fairly, in
all material respects, the consolidated
financial position of the Group as at
Basis for our opinion
Other than the audit, our firm carries
Audit materiality
We conducted our audit in accordance
with the Auditor-General’s Auditing
Standards, which incorporate the
Professional and Ethical Standards
and the International Standards on
Auditing (New Zealand) issued by
the New Zealand Auditing and
Assurance Standards Board. Our
responsibilities under those standards
are further described in the Auditor’s
responsibilities for the audit of the
consolidated financial statements
section of our report. We are
independent of the Group in
out other assurance assignments for
the Group in the areas of greenhouse
gas inventory assurance, limited
assurance of the sustainability content
in the integrated report, review of the
interim financial statements, audit of
the securities registers, vesting of the
executive long-term incentive plan, the
solvency return of Meridian Captive
Insurance Limited and supervisor
reporting. We also carried out non-
assurance assignments for the Group
relating to the Corporate Taxpayers
Group and the CFO Vantage Programme,
accordance with the Auditor-General’s
Auditing Standards, which incorporate
which are compatible with those
independence requirements.
Professional and Ethical Standard 1:
In addition, principals and employees
International Code of Ethics for
of our firm deal with the Group on
Assurance Practitioners issued by the
arm’s length terms within the ordinary
We consider materiality primarily in terms
of the magnitude of misstatement in the
consolidated financial statements of the
Group that in our judgement would make
it probable that the economic decisions of
a reasonably knowledgeable person
would be changed or influenced (the
‘quantitative’ materiality). In addition, we
also assess whether other matters that
come to our attention during the audit
would in our judgement change or
influence the decisions of such a person
(the ‘qualitative’ materiality). We use
materiality both in planning the scope
of our audit work and in evaluating the
results of our work.
We determined materiality for the
Group consolidated financial statements
as a whole to be $16 million.
1 61
MERIDIAN INTEGRATED REPORT 2021INDEPENDENT AUDITOR’S REPORT Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated
financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matters
Valuation of Generation Structures and Plant
As explained in note B1 in the Group financial statements, generation structures and plant are
carried at fair value less any subsequent accumulated depreciation and impairment losses at
balance sheet date.
The net book value of generation structures and plant as reflected in note B1 is $8,297 million
(2020: $8,345 million).
The Group obtains an independent valuation every year to ensure that the carrying value does
not differ significantly from the fair value at balance date.
As a result of this independent valuation, generation structures and plant have been revalued this
year as at 30 June 2021. The revaluation resulted in an increase in value by $202 million. The impact
of the revaluation is recognised as an increase of $202 million in the revaluation reserve with no
income statement impact in the current period (2020: decrease of $21 million in the revaluation
reserve and $57 million impairment in the income statement was recorded).
The valuation methodology determines an enterprise value range by considering a primarily
discounted cashflow (DCF) approach, supported by a capitalisation of earnings approach. This is
with reference to a) a discounted cash flow valuation, which primarily focuses on free cash flows of
business units such as estimated future earnings before interest, tax, depreciation, amortisation,
changes in fair value hedges, impairments, and gains or losses on sale of assets (‘EBITDAF’), as well
as capital expenditure, working capital movements and cash tax amounts, as well as the discount
rate used within the model, and b) a capitalisation of earnings approach.The inputs do not fully use
observable market data and require significant judgement and estimates to be made by the valuer.
As outlined in note B1 the valuer has considered the impact of COVID-19 on the valuation.
We include valuation of generation structures as a key audit matter because of the inherent
technical and judgemental complexity associated with determining the fair value. Specifically,
the determination of the expected cashflows, in particular the determination of forward price
paths, as well as the appropriate discount rate.
Valuation of Level 3 Electricity Derivatives
As explained in note D1, the Group’s activities expose it to commodity price, foreign exchange
and interest rate risks which are managed using derivative financial instruments.
These instruments are carried at their fair value as at 30 June 2021.
At 30 June 2021, level 3 electricity derivative assets totalled $142 million (2020: $77 million) and
level 3 electricity derivative liabilities were $14 million (2020: $65 million).
We include valuation of level 3 electricity derivatives as a key audit matter for the following
reasons:
• The price used in the valuation of electricity hedges is based on the Group’s best estimate
of the long-term forward wholesale electricity price, which involves significant judgement
and estimates regarding discount factors, expected demand, cost of new supply, and other
relevant market factors; and
• The complexity and judgement involved in the valuation techniques and the judgement
involved in evaluating the long-term expected call volumes and discount factor used to
determine the fair value of electricity options and swaps.
How our audit addressed the key audit matters
Our audit procedures focused on:
• The reasonableness of the key assumptions used in the discounted cash flow (DCF) model,
specifically the reasonableness of the WACC rate used, and of the price paths utilised in the
models;
• The reasonableness of other free cash flows inputs such as estimates of EBITDAF and capital
expenditure; and
• The impact of COVID-19 on the estimates used within the valuation.
Our procedures included:
• Evaluating the Group’s processes for the independent valuation of the generation structures
and plant;
• Reviewing the valuation methodology and the reasonableness of the significant underlying
assumptions;
• Assessing the competence, objectivity and integrity of the independent registered valuer. We
assessed their professional qualifications and experience. We also obtained representation from
them regarding their independence and the scope of their work;
• Meeting with the valuer to understand the valuation process adopted to identify and challenge
the critical judgement areas in the valuation;
• Utilising our in-house valuation specialists to assess the appropriateness of the valuation
methodology and the reasonableness of the valuation range determined by the independent
valuer, including WACC rates, forward price path, and reasonableness of earnings multiples
applied;
• Evaluating the adequacy of the Group’s disclosures in respect of the valuation of generation
structures and plant.
Our audit procedures focused on:
• The appropriateness of the valuation techniques ;
• The reasonableness of the wholesale electricity price path;
• The reasonableness of the underlying assumptions and inputs in the valuation models;
• The impact of COVID-19 on the estimates used within the valuation.
Our procedures included:
•
In conjunction with our internal experts, evaluating the appropriateness of the methodology
applied in the valuation models for these electricity hedges, options and swaps and ensuring
that the methodology has been consistently applied with the prior year where appropriate;
• Challenging the key assumptions applied, including the long-term forward wholesale
electricity price, long-term expected call volumes, day one adjustments and discount rates;
• Agreeing underlying data to contract terms, specifically the contract term, price and volumes;
and
• Evaluating the adequacy of the Group’s disclosures in respect of the valuation of level 3
electricity derivatives.
1 62
MERIDIAN INTEGRATED REPORT 2021INDEPENDENT AUDITOR’S REPORT Directors’ responsibilities
for the consolidated
financial statements
Auditor’s responsibilities for
the audit of the consolidated
financial statements
The Directors are responsible on
Our objectives are to obtain
We also:
behalf of the Group for the
reasonable assurance about whether
• Identify and assess the risks of
preparation and fair presentation of
the consolidated financial statements,
material misstatement of the
the consolidated financial statements
as a whole, are free from material
consolidated financial statements,
in accordance with New Zealand
misstatement, whether due to fraud
whether due to fraud or error, design
Equivalents to International Financial
or error, and to issue an auditor’s report
and perform audit procedures
Reporting Standards and International
that includes our opinion.
Other information
The Directors on behalf of the Group
are responsible for the other information.
The other information comprises the
information included on pages 1 to 114,
and 167 to 174, but does not include
the consolidated financial statements,
and our auditor’s report thereon.
Our opinion on the consolidated
financial statements does not cover
the other information and we do not
express any form of audit opinion or
assurance conclusion thereon.
In connection with our audit of the
consolidated financial statements,
Financial Reporting Standards and for
such internal control as the Directors
determine is necessary to enable the
preparation of consolidated financial
statements that are free from material
misstatement, whether due to fraud
Reasonable assurance is a high level
of assurance, but is not a guarantee
that an audit carried out in accordance
with the Auditor-General’s Auditing
Standards will always detect a
material misstatement when it exists.
Misstatements can arise from fraud
our responsibility is to read the other
or error.
information and in doing so, we
consider whether the other information
is materially inconsistent with the
consolidated financial statements or
our knowledge obtained in the audit,
or otherwise appears to be materially
misstated. If, based on the work we have
performed, we conclude that there is
a material misstatement of this other
information, we are required to report
that fact. We have nothing to report
in this regard.
In preparing the consolidated
or error and are considered material
financial statements, the Directors
if, individually or in the aggregate,
are responsible on behalf of the
they could reasonably be expected to
Group for assessing the Group’s
influence the economic decisions of
ability to continue as a going concern,
shareholders taken on the basis of
disclosing, as applicable, matters
these consolidated financial statements.
related to going concern and using
the going concern basis of accounting
unless the Directors either intend
to liquidate the Group or to cease
operations, or have no realistic
alternative but to do so.
The Directors’ responsibilities arise
from the Financial Markets Conduct
Act 2013.
As part of an audit in accordance
with the Auditor-General’s Auditing
Standards, we exercise professional
judgement and maintain professional
scepticism throughout the audit.
responsive to those risks, and obtain
audit evidence that is sufficient and
appropriate to provide a basis for
our opinion. The risk of not detecting
a material misstatement resulting
from fraud is higher than for one
resulting from error, as fraud may
involve collusion, forgery, intentional
omissions, misrepresentations, or
the override of internal control.
• Obtain an understanding of internal
control relevant to the audit in order
to design audit procedures that are
appropriate in the circumstances, but
not for the purpose of expressing an
opinion on the effectiveness of the
Group’s internal control.
• Evaluate the appropriateness of
accounting policies used and the
reasonableness of accounting
estimates and related disclosures
made by management.
1 6 3
MERIDIAN INTEGRATED REPORT 2021INDEPENDENT AUDITOR’S REPORT • Conclude on the appropriateness
• Obtain sufficient appropriate
consolidated financial statements of
of the use of the going concern
audit evidence regarding the
the current period and are therefore
basis of accounting by the directors
financial information of the entities
the key audit matters. We describe
and, based on the audit evidence
or business activities within the
these matters in our auditor’s report
obtained, whether a material
Group to express an opinion on the
unless law or regulation precludes public
uncertainty exists related to events or
consolidated financial statements.
disclosure about the matter or when,
conditions that may cast significant
We are responsible for the direction,
in extremely rare circumstances, we
doubt on the Group’s ability to
supervision and performance of
determine that a matter should not be
continue as a going concern. If we
the group audit. We remain solely
communicated in our report because
conclude that a material uncertainty
responsible for our audit opinion.
the adverse consequences of doing
exists, we are required to draw
attention in our auditor’s report to the
related disclosures in the consolidated
financial statements or, if such
disclosures are inadequate, to modify
our opinion. Our conclusions are
based on the audit evidence obtained
up to the date of our auditor’s report.
However, future events or conditions
may cause the Group to cease to
continue as a going concern.
• Evaluate the overall presentation,
structure and content of the
consolidated financial statements,
including the disclosures, and
We communicate with the Directors
regarding, among other matters, the
planned scope and timing of the audit
so would reasonably be expected to
outweigh the public interest benefits
of such communication.
and significant audit findings, including
Our responsibilities arise from the
any significant deficiencies in internal
Public Audit Act 2001.
control that we identify during our audit.
We also provide the Directors with a
statement that we have complied with
relevant ethical requirements regarding
independence, and to communicate
with them all relationships and other
Mike Hoshek, Partner
for Deloitte Limited
On behalf of the Auditor-General
matters that may reasonably be thought
Wellington, New Zealand
to bear on our independence, and
where applicable, related safeguards.
24 August 2021
whether the consolidated financial
From the matters communicated
statements represent the underlying
with the Directors, we determine
transactions and events in a manner
those matters that were of most
that achieves fair presentation.
significance in the audit of the
1 6 4
MERIDIAN INTEGRATED REPORT 2021INDEPENDENT AUDITOR’S REPORT Independent accountant’s assurance report
To the directors of Meridian Energy Limited
Report on sustainability content
within the 2021 Integrated Report
Conclusion
Basis for Conclusion
This conclusion has been formed on the
Our engagement has been conducted
Our Independence
and Quality Control
Meridian Energy Limited (‘Meridian)
basis of, and is subject to, the inherent
in accordance with International
We have complied with the
and its subsidiaries’ (the ‘Group’)
limitations outlined elsewhere in this
Standard on Assurance Engagements
independence and other ethical
Integrated Report for the year ended
independent assurance report.
(New Zealand) 3000 (Revised):
requirements of Professional and
30 June 2021 (the ‘Integrated Report’)
includes sustainability content on pages
2 to 81, 111 and 167 to 170 (‘Sustainability
Content’) prepared in accordance
with the Global Reporting Initiative
Sustainability Reporting Standards
(the ‘GRI Standards’): Core option.
The subject of our limited assurance
engagement is the information included
on pages 2 to 81, 111 and 167 to 170 of
the integrated report, prepared in
accordance with Reporting Principles
of the GRI Standard 101 for defining
report content and report quality;
and the disclosures listed in the GRI
index on pages 167 to 170 prepared in
accordance with the GRI standards as
referenced in the GRI index on page
167 to 170. Our report does not cover
forward looking statements or
online supplements.
Based on the evidence obtained from
the procedures we have performed,
nothing has come to our attention
that causes us to believe that:
• the Sustainability Content on
pages 2 to 81, 111 and 167 to 170 of the
Integrated report for the year ended
30 June 2021, has not been prepared,
in all material respects, in accordance
with the Reporting Principles of GRI
Standard 101 for Defining the Report
Content: materiality, stakeholder
inclusiveness, sustainability
context and completeness and for
Defining Report Quality: balance,
comparability, accuracy, timeliness,
clarity and reliability; and
• the disclosures listed on the GRI
index on pages 167 to 170 has not
been prepared, in all material
respects, in accordance with the
GRI Standards referenced in the
GRI index on pages 167 to 170.
Assurance Engagements Other than
Ethical Standard 1 International Code
Audits or Reviews of Historical Financial
of Ethics for Assurance Practitioners
Information (‘ISAE (NZ) 3000 (Revised)’)
(including International Independence
issued by the New Zealand Auditing
Standards) (New Zealand) issued by the
and Assurance Standards Board.
New Zealand Auditing and Assurance
We believe that the evidence we have
Standards Board, which is founded on
obtained is sufficient and appropriate
fundamental principles of integrity,
to provide a basis for our conclusion.
objectivity, professional competence
Board of Directors’ Responsibility
The Board of Directors is responsible for:
• ensuring that the Sustainability
Content is prepared in accordance
with the GRI Standards: Core option
and specifically those GRI Standards
set out in the GRI Index;
• determining Meridian Energy
Limited’s objectives in respect
of sustainability reporting;
• selecting the material topics; and
• establishing and maintaining
appropriate performance
management and internal control
systems in order to derive the
Sustainability Content.
and due care, confidentiality and
professional behaviour.
Other than this engagement and our
role as auditor of the statutory financial
statements on behalf of the Auditor-
General, our firm carries out other
assurance assignments for the Group in
the areas of greenhouse gas inventory
assurance, review of the interim financial
statements, audit of the securities
registers, vesting of the executive long-
term incentive plan, the solvency return
of Meridian Captive Insurance Limited
and supervisor reporting. We also
carried out non-assurance assignments
for the Group relating to the Corporate
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MERIDIAN INTEGRATED REPORT 2021
Taxpayers Group and the CFO Vantage
come to our attention that causes us to
Programme, which are compatible with
believe that the Sustainability Content
those independence requirements.
has not been prepared, in all material
In addition, principals and employees
of our firm deal with the Group on
respects, in accordance with the GRI
Standards: Core option.
arm’s length terms within the ordinary
We did not evaluate the security and
course of trading activities of the Group.
controls over the electronic publication
These services have not impaired
of the Integrated Report.
our independence for the purposes
In a limited assurance engagement,
of this engagement. Other than
the assurance practitioner performs
these engagements and arm’s length
procedures, primarily consisting
transactions, we have no relationship
of discussion and enquiries of
with, or interests in, the Group.
management and others within the
The firm applies Professional and
Ethical Standard 3 (Amended): Quality
Control for Firms that Perform Audits
and Reviews of Financial Statements,
and Other Assurance Engagements
issued by the New Zealand Auditing
and Assurance Standards Board, and
entity, as appropriate, and observation
and walk-throughs, and evaluates the
evidence obtained. The procedures
selected depend on our judgement,
including identifying areas where the
risk of material non-compliance with
the GRI Standards is likely to arise.
accordingly maintains a comprehensive
Our procedures included:
system of quality control including
documented policies and procedures
regarding compliance with ethical
requirements, professional standards
and applicable legal and regulatory
requirements.
Independent Accountant’s
Responsibility
• Obtaining an understanding of the
internal control environment, risk
assessment process and information
systems relevant to the sustainability
reporting process;
• A review of the materiality process
followed to determine the material
topics chosen for inclusion in the
Sustainability Content;
accordance with the GRI Standards:
Core option; and
primarily of the responsible party, and
applying analytical and other review
• Evaluating whether the information
presented is consistent with our
overall knowledge and experience
of sustainability reporting processes
at Meridian Energy Limited.
procedures. The conclusion expressed
in this report has been formed on the
above basis.
A limited assurance engagement
does not provide assurance on whether
The procedures performed in a
compliance with the GRI Standards will
limited assurance engagement vary
continue in the future.
in nature and timing from, and are
less in extent than for, a reasonable
assurance engagement. Consequently,
the level of assurance obtained in
a limited assurance engagement is
substantially lower than the assurance
that would have been obtained had
a reasonable assurance engagement
been performed. Accordingly, we do
not express a reasonable assurance
opinion about whether Meridian Energy
Limited’s Sustainability Content has
been prepared, in all material respects,
in accordance with the GRI Standards:
Core option.
Inherent Limitations
Because of the inherent limitations of
any limited assurance engagement,
it is possible that fraud, error or
non-compliance may occur and not
be detected. A limited assurance
Use of Report
Our assurance report is made solely to
the directors of the Group in accordance
with the terms of our engagement.
Our work has been undertaken so that
we might state to the directors those
matters we have been engaged to state
in this assurance report and for no other
purpose. To the fullest extent permitted
by law, we do not accept or assume
responsibility to anyone other than the
directors of Meridian Energy Limited for
our work, for this assurance report, or
for the conclusions we have reached.
Chartered Accountants
Auckland, New Zealand
24 August 2021
Our responsibility is to conduct a
• Analytical review and other test
engagement is not designed to detect
limited assurance engagement in order
checks of the information presented;
all instances of non-compliance with
to express an opinion whether, based on
the procedures performed, anything has
• Checking whether the appropriate
indicators have been reported in
the GRI Standards: Core option as it
generally comprises making enquiries,
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MERIDIAN INTEGRATED REPORT 2021
GRI standards content index
This report has been prepared in accordance with the GRI Standards:
Core option. The specific GRI Standards reported against are in italics below.
GRI 101: Foundation 2016
GENERAL DISCLOSURES
GRI 102: General Disclosures 2016
ORGANISATIONAL PROFILE
102-1
Name of organisation
Front cover
102-2
Activities, brands, products, and services
22–23
102-3
Location of headquarters
102-4
Location of operations
102-5
Ownership and legal form
102-6
Markets served
173
22–23, 31
31
31
Pg #
Comment
102-13
Membership of associations
GENERAL DISCLOSURES
Pg #
Comment
102-12
External initiatives
Climate Leaders Coalition
NZ Initiative
EU1*
EU2*
EU3*
EU4*
EU5*
Installed capacity by primary energy
source and regulatory regime
Net energy output by primary energy
source and regulatory regime
127
61
61
Number of customer accounts across segments 23, 67–68
Transmission and distribution lines (length
of above and underground transmission
and distribution lines by regulatory regime)
Allocation of CO2e emissions allowances
or equivalent broken down by carbon
trading framework
n/a
Length insignificant
n/a
No emissions
allowances received
Scale of the organisation
21, 23, 31
STRATEGY
102-7
102-8
Information on employees and other workers
31, 74
102-9
Supply chain
51
102-10
Significant changes to the organisation
and supply chain
24–25,
39–45
102-11
Precautionary principle or approach
No seasonal variation. Data
sourced from Payroll system.
Includes MEL Group.
All our energy retailing brands
have very short supply chains
because the physical assets used
to distribute electricity and meter
its use are managed by national
and local lines and metering
companies. Our retail operations’
requirements are similar to those
of many corporate offices. They
include physical facilities and ICT,
sales and marketing, billing and
governance functions.
Relevant legislation takes a
precautionary principle-based
approach
102-14
Statement from senior decision-maker
30–45
ETHICS AND INTEGRITY
102-16
Values, principles, standards,
and norms of behaviour
22
Also see our
Code of Conduct
Governance
102-18
Governance structure
32–35
Includes MEL Group
STAKEHOLDER ENGAGEMENTS
102-40
List of stakeholder groups
102-41
Collective bargaining agreements
16
74
102-42
Identifying and selecting stakeholders
15–16
102-43
Approach to stakeholder engagement
15–16
102-44
Key topics and concerns raised
15–16
Also see our Stakeholder
Engagement Guidelines
See throughout report where
relevant. We take a purpose-
driven approach
* Disclosures starting with “EU” are from the Electric Utilities G4 Sector Disclosure.
1 67
MERIDIAN INTEGRATED REPORT 2021GRI STANDARDS CONTENT INDEX GENERAL DISCLOSURES
Pg #
Comment
MATERIAL TOPICS AND ASSOCIATED DISCLOSURES
Pg #
Comment
Pipeline of generation options**
GRI 103: Management Approach 2016*
EU10***
Planned capacity against demand**
ENVIRONMENTAL
Action on climate change**
Discussed throughout the
report where relevant
GRI 103: Management Approach 2016*
69–70
69–70
21, 49–51,
58, 70
REPORTING PRACTICE
102-45
Entities included in the consolidated
financial statements
102-46
Defining report content and topic Boundaries
31, 97, 98,
120, 155
15, 16, 19, 23,
30–32, 57, 65
102-47
List of material topics
102-48
Restatements of information
102-49
Changes in reporting
102-50
Reporting period
102-51
Date of most recent report
102-52
Reporting cycle
102-53
102-54
Contact point for questions
regarding the report
Claims of reporting in accordance
with the GRI Standards
16
16
30
34
32
26 August 2020
Annual
102-55
GRI content index
102-56
External assurance
167–170
165–166
MATERIAL TOPICS AND ASSOCIATED DISCLOSURES
Pg #
Comment
ECONOMIC
Financial performance**
GRI 103: Management Approach 2016*
Non-GRI** Various financial measures
Financial impacts of hydrology**
45
45
GRI 103: Management Approach 2016*
46, 84
Non-GRI** Financial implications of variability in hydrology 45, 60
Financial impacts of climate change
GRI 103: Management Approach 2016*
GRI 201: Economic Performance 2016
201-2
Financial implications and other risks and
opportunities due to climate change
19, 27
19, 27
See also Taskforce for
Climate-related Financial
Disclosures (TCFD) Report at
www.meridianenergy.co.nz/
who-we-are/sustainability/
climate-disclosures. NZ only.
Non-GRI** Proportion of Meridian Group generation
21, 58
from renewable resources
Non-GRI** Support for customers’ climate actions
70
Non-GRI** Support for our people’s climate actions
49–51
Non-GRI** Operational emissions reduction target
51
Operational carbon emissions
GRI 103: Management Approach 2016*
50–51
GRI 305: Emissions 2016
305-1
Direct (Scope 1) GHG emissions
50–51
305-2
Energy indirect (Scope 2) GHG emissions
50–51
See also Meridian GHG
Inventory Report FY20.Includes
MEL Group
305-3
Other indirect (Scope 3) GHG emissions
50–51
Impact on water
GRI 103: Management Approach 2016*
59, 63, 64
GRI 303: Water and Effluents 2018
303-1
Interactions with water as a shared resource
59, 63, 64
303-2
Management of water
discharge-related impacts
59, 63, 64
For both 303-1 and
303-2 and 303-5.
Includes MEL Group
1 6 8
* Each Disclosure of Management Approach (DMA) includes “103-1 Explanation of the material topic and
its Boundaries”, “103-2 The management approach and its components”, and “103-3 Evaluation of the
management approach”, in accordance with GRI 103: Management Approach 2016
** Non-GRI – some material topics and disclosures listed above are additional or alternatives to those covered in the GRI Standards.
*** Disclosures starting with “EU” are from the Electric Utilities G4 Sector Disclosure.
MERIDIAN INTEGRATED REPORT 2021GRI STANDARDS CONTENT INDEX MATERIAL TOPICS AND ASSOCIATED DISCLOSURES
Pg #
Comment
MATERIAL TOPICS AND ASSOCIATED DISCLOSURES
Pg #
Comment
303-3
Water withdrawal
303-4
Water discharge
303-5
Water consumption
Impact on biodiversity
GRI 103: Management Approach 2016*
GRI 304: Biodiversity 2016
304-2
Significant impacts of activities,
products, and services on biodiversity
Environmental compliance
GRI 103: Management Approach 2016*
GRI 307: Environmental Compliance 2016
Non-compliance with environmental
laws and regulations
307-1
SOCIAL
64
64
64
64
64
64
64
Water stress not tested this FY.
For NSW, storage release data
sourced from Water NSW. In NZ,
data is collected by Meridian
and independently audited each
month. There are no priority
substances that are present in
our water discharge. Total then
spilt into water that re-enters the
same river (nonconsumptive)
and water that is consumed
or diverted (consumptive).
Breakdown of total water
withdrawal and discharged not
categorised by 1000 mg/L total dissolved
solids. Includes MEL NZ
and Australia. Excludes Flux
403-1
Occupational health and safety
management system
77
403-2
Hazard identification, risk assessment,
and incident investigation
403-3
Occupational health services
403-4
Worker participation, consultation,
and communication on occupational
health and safety
403-5
Worker training on occupational
health and safety
403-6
Promotion of worker health
76–77
76–77
76
76
73
403-7
Prevention and mitigation of occupational
health and safety impacts directly linked
by business relationships
76–77
Excludes Australia
and Flux
403-8
Workers covered by an occupational
health and safety management system
403-9
Work-related injuries
44, 76–77
Excludes Flux and Powership
AU as not generators
The OHS System is not internally
nor externally audited, however
Meridian adheres to OSHA
standards and guidelines, as well
as adhering to NZS 7901:2014
Electricity and Gas Industries –
Safety management systems for
public safety
100% of NZ employees and
contractors are covered by
the OHS management system.
Data sourced from Safety
Manager database
Excludes Australia and Flux.
Contractors – 109,850.64 hours
Employees – 1,245,374.64 hours
Employee engagement**
Includes MEL Group
GRI 103: Management Approach 2016*
Non-GRI** Employee engagement surveys
73, 74
74
Occupational health and safety
Includes MEL Group
GRI 103: Management Approach 2016*
76–77
GRI 403: Occupational Health and Safety 2018
Non-GRI** Total recordable injury frequency rate (TRIFR)
76–77
Diversity and equal opportunity
GRI 103: Management Approach 2016*
77–80
GRI 405: Diversity and Equal Opportunity 2016
405-1
405-2
Diversity of governance bodies
and employees
Ratio of basic salary and
remuneration of women to men
Non-GRI** Women in people leadership
and senior specialist positions
78, 80
Includes MEL Group
Includes MEL Group
80
78
* Each Disclosure of Management Approach (DMA) includes “103-1 Explanation of the material topic and
its Boundaries”, “103-2 The management approach and its components”, and “103-3 Evaluation of the
management approach”, in accordance with GRI 103: Management Approach 2016
** Non-GRI – some material topics and disclosures listed above are additional or alternatives to those
covered in the GRI Standards.
*** Disclosures starting with “EU” are from the Electric Utilities G4 Sector Disclosure.
1 69
MERIDIAN INTEGRATED REPORT 2021GRI STANDARDS CONTENT INDEX MATERIAL TOPICS AND ASSOCIATED DISCLOSURES
Pg #
Comment
MATERIAL TOPICS AND ASSOCIATED DISCLOSURES
Pg #
Comment
Access to water**
Electricity pricing**
GRI 103: Management Approach 2016*
53–54, 67–69
Non-GRI** Price of electricity in AU and NZ
53
compared to other OECD countries
GRI 103: Management Approach 2016*
Non-GRI** Strength of relationships with
stakeholders interested in water
59–64
59–64
Contribution to local communities
GRI 103: Management Approach 2016*
63
Includes central government,
local government, Ngāi Tahu
and other iwi, local community
groups and the general public
GRI 413: Local Communities 2016
413-1
Operations with local community
engagement, impact assessments,
and development programs
55, 62– 63
78
13 out of our 17 power stations
have local community
engagement programmes (Mt
Millar and our Australian power
stations don’t) – 95% by MW
capacity. NZ only
Non-GRI** Contribution to local communities
in New Zealand and Australia
54–55, 62 Dedicated email and 0800 for
community issues
Non-GRI** Number of community fund grants
62–63
in New Zealand
Contribution to public policy
GRI 103: Management Approach 2016*
53–54
GRI 415: Public Policy 2016
415-1
Political contributions
Support for vulnerable customers
GRI 103: Management Approach 2016*
Non-GRI** Disconnections
Plant performance**
GRI 103: Management Approach 2016*
EU30***
Average plant availability factor by
energy source and regulatory regime
Process safety**
GRI 103: Management Approach 2016*
Non-GRI** Actions to improve process safety
Dam safety**
GRI 103: Management Approach 2016
Non-GRI** Actions to improve dam safety
Meridian does not donate to any
political parties
(as specified in our Code
of Conduct)
Information security**
Non-GRI** Expenditure on “lobbying” organisations
127
GRI 103: Management Approach 2016*
such as trade associations
Non-GRI** Key regulatory issues
41, 53
Customer satisfaction**
GRI 103: Management Approach 2016*
54–57
Non-GRI** Level of Customer satisfaction – Brand monitor 54–57
NZ data only
Non-GRI** Customer retention rates
68
Non-GRI** Actions to improve information security
53–54
54
60–61
60
76–77
76–77
80
80
TCFD report at
www.meridianenergy.co.nz/
who-we-are/sustainability/
climate-disclosures
Corporate Governance
Statement www.meridianenergy.
co.nz/investors/governance
170
* Each Disclosure of Management Approach (DMA) includes “103-1 Explanation of the material topic and
its Boundaries”, “103-2 The management approach and its components”, and “103-3 Evaluation of the
management approach”, in accordance with GRI 103: Management Approach 2016
** Non-GRI – some material topics and disclosures listed above are additional or alternatives to those covered in the GRI Standards.
*** Disclosures starting with “EU” are from the Electric Utilities G4 Sector Disclosure.
MERIDIAN INTEGRATED REPORT 2021GRI STANDARDS CONTENT INDEX 17 1
Generating change:
Changing generation
Change needs energy.
Directory
Registered office
Meridian Energy Limited
55 Lady Elizabeth Lane
Wellington Central
Wellington 6011
New Zealand
PO Box 10840
The Terrace
Wellington 6143
New Zealand
T +64 4 381 1200
F +64 4 381 1201
Offices
Quad 7, Level 2
6 Leonard Isitt Drive
Auckland Airport
Auckland 2022
New Zealand
PO Box 107174
Auckland Airport
Auckland 2150
New Zealand
T +64 9 477 7800
287-293 Durham Street North
Christchurch Central
Christchurch 8013
New Zealand
PO Box 2146
Christchurch 8140
New Zealand
T +64 3 357 9700
Corner of Market Place
and Mackenzie Drive
Twizel 7901
New Zealand
Private Bag 950
Twizel 7944
New Zealand
T +64 3 435 9393
Australian registered office
Meridian Energy
Australia Pty Limited
Level 15
357 Collins Street
Melbourne VIC 3000
Australia
T +61 3 8370 2100
F +61 3 9620 5235
Flux Federation offices
Level 11, NTT Tower
157 Lambton Quay
Wellington 6011
PO Box 25-180
Wellington 6140
T +64 4 389 0859
Suite 1, Level 3
104 Fanshawe Street
Auckland 1010
New Zealand
5th Floor
125 Colmore Row
Birmingham B3 3SD
United Kingdom
Powershop
55 Lady Elizabeth Lane
Wellington Central
Wellington 6011
New Zealand
PO Box 7651
Newtown
Wellington 6242
New Zealand
427 Queen Street
Masterton 5810
PO Box 392
Masterton 5810
T +64 0800 1000 60
Share Registrar New Zealand
Computershare
Investor Services Limited
Level 2
159 Hurstmere Road
Takapuna
Auckland 0622
New Zealand
Private Bag 92119
Victoria Street West
Auckland 1142
New Zealand
T +64 9 488 8777
F +64 9 488 8787
enquiry@computershare.co.nz
investorcentre.com/nz
Share Registrar Australia
Computershare
Investor Services Pty Limited
Yarra Falls
452 Johnston Street
Abbotsford
VIC 3037
Australia
GPO Box 3329
Melbourne VIC 3001
Australia
T 1800 501 366 (within Australia)
T +61 3 9415 4083 (outside Australia)
F +61 3 9473 2500
enquiry@computershare.co.nz
Auditor
Mike Hoshek, Partner
Financial audit on behalf of
the Office of the Auditor-General
Jason Stachurski
GRI Standards limited assurance
Deloitte Limited
PO Box 1990
Wellington 6140
New Zealand
Banker
Westpac Wellington
New Zealand
Directors
Mark Verbiest, Chair
Peter Wilson, Deputy Chair
Mark Cairns
Jan Dawson
Anake Goodall
Michelle Henderson
Julia Hoare
Nagaja Sanatkumar
Executive Team
Neal Barclay, Chief Executive
Chris Ewers
Lisa Hannifin
Nic Kennedy
Tania Palmer
Mike Roan
Claire Shaw
Jason Stein
Guy Waipara
Jason Woolley
If you have any questions
or comments, please email
investors@meridianenergy.co.nz or
service@meridianenergy.co.nz
Image pages 4-5: LINZ Data Service and licensed by Invercargill City Council, CC BY 4.0. Image page 171: LINZ Data Service and licensed by Environment Canterbury, CC BY 4.0.
Meridian.co.nz
Integrated Report
for the year ended
30 June 2021.
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ISSN 1173-6275 (print)
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