Corporate Report for the year ended 30 June 2022
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Governance and risk
Directors’ report
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Section B: Notes to the Group financial statements for the year ended 30 June 2022
Section B: Notes to the Group financial statements for the year ended 30 June 2022
Items not recognised B28 Contingencies
Contingent assets are possible recoveries whose existence will only be confirmed by uncertain future events not wholly within the control of the Group. Contingent assets are not recognised on the balance sheet unless they are virtually certain but are disclosed if the inflow of economic resources is probable. Contingent liabilities are possible obligations whose existence will only be confirmed by uncertain future events and present obligations where the transfer of economic resources is not probable or cannot be reliably estimated. Contingent liabilities are not recognised on the balance sheet unless they are probable but are disclosed if the outflow of economic resource is possible. The Group (including its equity accounted investments) is exposed to direct and indirect construction risk including through its third party contractors. Construction risk includes exposure to claims made on the Group (including its equity accounted investments) and claims that the Group (including its equity accounted investments) may pass through or initiate on others. From time to time it is possible payments may be made that are in excess of, or separate to, D&C subcontracted amounts to facilitate the continued progression of the project. Contingent assets and liabilities may exist in respect of actual or potential claims and commercial payments and recoveries arising from overseeing construction projects. Disclosures are made for these matters in accordance with accounting standards, or other legal disclosure obligations. This may be applicable for a number of projects overseen by Transurban and the Group’s equity accounted investments. As at 30 June 2022 any possible payment or possible claim settlement cannot be reliably estimated and/or is not considered probable of being made. KEY ESTIMATE AND JUDGEMENT The Group has a number of existing claims that it has brought against other parties with respect to the Group’s obligations under its contractual arrangements. As at 30 June 2022 these claims are not considered probable and cannot be reliably estimated. Additionally, the Group (including its equity accounted investments) has received claims in connection with its construction projects. Many of these claims have been passed through. In other instances, the Group has initiated claims on others. In overseeing construction projects, from time to time payments may be made in excess of contracted amounts to facilitate their continued progression. Further, as at 30 June 2022, there continues to be a risk from claims linked to COVID-19, with claims activity observed across the construction industry owing to the impact of COVID-19 on construction schedules. The Group (including its equity accounted investments) assess each claim that they are party to for the purposes of preparing financial statements in accordance with the accounting standards. Contingent assets and liabilities may exist in respect of actual or potential claims and commercial payments and recoveries arising from these matters. Disclosures are made for these matters in accordance with accounting standards, or other legal disclosure obligations. As at 30 June 2022 any possible payments relating to actual or potential future claims or possible commercial payments to third parties in excess of, or separate to the amounts stipulated in the D&C subcontracts or other contracts, cannot be reliably estimated and/or is not considered probable of being made.
Parent entity The Parent entity does not have any contingent liabilities at reporting date.
B29 Commitments The Group’s capital commitments as at 30 June 2022 are $1,428 million (2021: $177 million) and relate primarily to the West Gate Tunnel Project. On 23 March 2022, the Group finalised the settlement with the State of Victoria and the D&C Subcontractor on revised terms for the delivery of the West Gate Tunnel Project, including a new expected completion date of late 2025. The total cost of the D&C Subcontract has increased by $3,440 million, with Transurban and the State each contributing $1,720 million. Transurban's share is being accounted for as capital expenditure (increasing the concession intangible asset as the expenditure is incurred). Share of commitments related to equity accounted investments
AM Partners 60%
STP JV 50%
TC 50% 2021
Total
2022 2021 $M $M $M $M $M $M $M $M 2021 2022 2021 2022 2022
Capital commitments (at Group’s effective ownership interest)
86
118
60
—
746
644
892
762
The Group’s share of commitments relating to equity accounted investments as at 30 June 2022 primarily relate to WestConnex M4-M5 Link in STP JV, Fredericksburg Extension and the 495 Express Lanes Northern Extension in TC and Maryland Express Lanes in AM Partners (2021: WestConnex M4-M5 Link in STP JV and Fredericksburg Extension in TC). B30 Subsequent events Other than as disclosed elsewhere in this report, there has not arisen in the interval between the end of the financial year and the date of this report any matter or circumstance that has significantly affected, or may significantly affect, the Group’s operations, the results of those operations, or Group’s state of affairs, in the future years.
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