Corporate Report for the year ended 30 June 2022
Introduction and overview
Business performance
Governance and risk
Directors’ report
Remuneration report
Financial statements
Sustainability supplement
Security holder information
Service concession arrangements Service concession arrangements
Group – Notes B17 – B21 Concession assets: $16,632m Group – Notes B17 – B21 Concession assets: $16,632m
THT – Notes D12, D14 Concession assets: $8,659m Assets under construction: $327m Concession notes receivable: $1,142m Construction obligation liability: $84m Other liabilities: $80m THT – Notes D12, D14 Concession assets: $8,659m Assets under construction: $327m Concession notes receivable: $1,142m Construction obligation liability: $84m Other liabilities: $80m
TIL – Notes D12 – D13 Concession assets: $1,224m Concession financial asset: $369m Maintenance provision: $35m TIL – Notes D12 – D13 Concession assets: $1,224m Concession financial asset: $369m Maintenance provision: $35m
Assets under construction: $4,009m Concession financial asset: $369m Maintenance provision: $1,128m Construction obligation liability: $796m Other liabilities: $140m Assets under construction: $4,009m Concession financial asset: $369m Maintenance provision: $1,128m Construction obligation liability: $796m Other liabilities: $140m Key audit matter
How our audit addressed the key audit matter We evaluated the concession agreements for each toll road to develop an understanding of the nature of the agreements with the concession grantors and assessed the accounting implications of the contractual arrangements. Our procedures included, amongst others: Our procedures included, amongst others: Considering the relevant obligations in the concession agreements having regard to the calculations in the models and corresponding balance sheet line items. Obtaining an understanding of the status of ongoing construction projects, including claims made on the Group and claims the Group may pass onto other parties. Performing tests of the design and operation of controls over a selection of the forecast and budgeting processes impacting the models in the COVID-19 environment. Evaluating the impairment indicator assessment. Involving valuation experts to assess the appropriateness of selected key assumptions used within the models. Assessing the appropriateness of key Performing tests of the design and operation of controls over a selection of the forecast and budgeting processes impacting the models in the COVID-19 environment. Evaluating the impairment indicator assessment. Involving valuation experts to assess the appropriateness of selected key assumptions used within the models. Assessing the appropriateness of key assumptions such as discount rates and inflation rates used in determining maintenance liabilities and concession note liabilities. Assessing the adequacy of the disclosures in the financial report in respect of contractual arrangements having regard to the requirements of Australian Accounting Standards Obtaining an understanding of the status of ongoing construction projects, including claims made on the Group and claims the Group may pass onto other parties. How our audit addressed the key audit matter We evaluated the concession agreements for each toll road to develop an understanding of the nature of the agreements with the concession grantors and assessed the accounting implications of the contractual arrangements. Considering the relevant obligations in the concession agreements having regard to the calculations in the models and corresponding balance sheet line items. assumptions such as discount rates and inflation rates used in determining maintenance liabilities and concession note liabilities. Assessing the adequacy of the disclosures in the financial report in respect of contractual arrangements having regard to the requirements of Australian Accounting Standards
Key audit matter Each of the concession assets in the Transurban Group’s portfolio represents a contractual right under a concession agreement to toll a road in return for the capital and expertise needed to build, maintain and operate the road. Each of the concession assets in the Transurban Group’s portfolio represents a contractual right under a concession agreement to toll a road in return for the capital and expertise needed to build, maintain and operate the road. Every concession asset is governed by its own concession agreement between the Group and the concession grantor (typically the government or a local transport authority of the region in which the concession is granted). As a result, the Transurban Group is subject to a number of contractual obligations, some of which have a direct impact on the financial statements. Whenever the Group undertakes a new project to construct, acquire or upgrade the asset, its contractual arrangements with concession grantors are altered either through a new concession agreement or an amendment of the existing concession agreement. Every concession asset is governed by its own concession agreement between the Group and the concession grantor (typically the government or a local transport authority of the region in which the concession is granted). As a result, the Transurban Group is subject to a number of contractual obligations, some of which have a direct impact on the financial statements. Whenever the Group undertakes a new project to construct, acquire or upgrade the asset, its contractual arrangements with concession grantors are altered either through a new concession agreement or an amendment of the existing concession agreement. The right to receive future economic benefits is recognised on the balance sheet as a concession asset. The asset is recognised at the cost of construction or price paid at acquisition. The right to receive future economic benefits is recognised on the balance sheet as a concession asset. The asset is recognised at the cost of construction or price paid at acquisition. Assets under construction include the construction of the West Gate Tunnel. The Group is exposed to direct and indirect construction risk including through its third party contractors. Construction risk includes exposures to claims made on the Group and claims that the Group may pass through or initiate on others. The concession agreements also contain clauses that require the Transurban Group to make cash outflows in the future, resulting in the recognition of concession liabilities such as maintenance liabilities and concession note liabilities. The concession agreements also contain clauses that require the Transurban Group to make cash outflows in the future, resulting in the recognition of concession liabilities such as maintenance liabilities and concession note liabilities. Assets under construction include the construction of the West Gate Tunnel. The Group is exposed to direct and indirect construction risk including through its third party contractors. Construction risk includes exposures to claims made on the Group and claims that the Group may pass through or initiate on others.
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