Financial statements
Section B: Notes to the Group financial statements for the year ended 30 June 2024
Section B: Notes to the Group financial statements for the year ended 30 June 2024
B3
Basis of preparation (continued)
Going concern The financial statements have been prepared on a going concern basis, which assumes the continuity of normal operations, in particular over the next 12 months from the financial statements release date of 8 August 2024. This is notwithstanding that the Group's consolidated balance sheet indicates a net current liability position as at 30 June 2024 of $890 million (2023: $755 million). In determining the appropriateness of the going concern basis of preparation, the Directors have considered the uncertainties related to the macroeconomic environment on the Group’s liquidity and operations. The Directors consider near-term interest rate fluctuations to be primarily limited to new borrowing facilities due to the Group’s hedging policy and profile. In addition, a number of the Group’s toll roads have toll escalations of CPI or greater which provides revenue protection in an inflationary environment. The Group has assessed cash flow forecasts and its ability to fund its net current liability position as at 30 June 2024. This assessment indicates that the Group is expected to be able to continue to operate within available liquidity levels and the terms of its borrowing facilities, and to fund its net current liability position as at 30 June 2024, for the 12 months from the date of this report. The Group has also forecast that it does not expect to breach any financial covenants within the 12 months from the date of this report. Financial covenant forecasts utilised the same underlying cash flow forecasts as those used in the going concern assessment. Furthermore, the Directors have also taken the following matters into consideration in forming the view that the Group is a going concern: • The Group has cash and cash equivalents of $2,041 million as at 30 June 2024 • The Group has available a total of $2,650 million of undrawn working capital and general purpose borrowing facilities and $212 million letter of credit facilities across a number of financial providers with a maturity beyond 12 months • The Group is expected to have the ability to fund its net current liability position through the generation of free cash and the use of undrawn borrowing facilities in the 12 months from the date of this report • Payment of future dividends and distributions remains at the discretion of the Board. Foreign currency translation accounting policy Transactions and balances Transactions and monetary items denominated in foreign currencies are translated into the functional currency as follows: Foreign currency item Exchange rate Transactions Date of transaction Monetary assets and liabilities Reporting period-end rate Non-monetary items measured at fair value Historical rate (when fair value was determined) Translation differences on transactions and monetary assets and liabilities are recognised in the profit and loss, except for qualifying cash flow hedges and qualifying net investment hedges or that are attributable to part of the net investment in a foreign operation (which are deferred in equity). Translation differences on non-monetary items measured at fair value are reported as part of the fair value gain or loss. Foreign operations Transactions related to the Group’s foreign operations are conducted in a number of foreign currencies, where the foreign operations have determined US dollars or Canadian dollars as the functional currency. On consolidation, the income, expenses, assets and liabilities of foreign operations with non-Australian dollar functional currencies are translated into Australian dollars (the Group's presentation currency) using the following applicable exchange rates: Foreign currency amount Exchange rate Income and expenses Average rate (or dates of transactions, where average rate is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates) Assets and liabilities Reporting period-end rate Equity and reserves Historical rate The resulting exchange differences are initially recognised in other comprehensive income and subsequently transferred to the income statement on disposal of a foreign operation. On consolidation, exchange differences arising from the translation of any net investment in foreign operations and of borrowings and other financial instruments designated as hedges of such investments, are taken to other comprehensive income.
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