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E. Other Information

This section provides details on other required disclosures relating to the Company to comply with the accounting standards and other pronouncements.

  • E.1 Notes to Statement of cash flows
  • E.2 Provisions
  • E.3 Income tax expense
  • E.4 Lease commitments
  • E.5 Remuneration of auditors
  • E.6 Related party disclosures
  • E.7 Events after the reporting date

E.1 Notes to Statement of Cash Flows

(a) Cash and cash equivalents

2019
$000

2018
$000

Cash on hand

50,131

41,097

Total

50,131

41,097

Cash and cash equivalents include cash on hand held at call with financial institutions.

(b) Reconciliation of net profit to net cash provided by operating activities

2019
$000

2018
$000

Loss for the period

(251,991)

(279,967)

Adjustments for non-cash items:

Depreciation and amortisation

679

182

CPA

99,600

146,100

Finance costs

48

31

Change in operating assets and liabilities:

Accrued interest

14

(97)

Prepayments

(13,360)

(11,486)

Provisions

(493)

25,143

Trade and other payables

(11,254)

29,611

Employee liabilities

3,481

293

Net cash used in operating activities

(173,277)

(90,190)

E.2 Other Provisions

2019
$000

2018
$000

Decontamination provision

Carrying amount at start of year

25,144

-

Charged to profit and loss

20,416

25,144

Amounts used during the year

(20,910)

-

Carrying amount at end of year

24,650

25,144

Current

19,978

17,221

Non-current

4,672

7,923

The decontamination provision represents costs to be incurred in the removal of contaminated materials, primarily asbestos, decontamination of the Airport site, as well as management and remediation of contaminated materials that have been temporarily stockpiled.

During the year, additional site surveys have been completed which have provided more information that has been used to inform the estimates required for the remaining remediation activities. As earthworks progress, the estimate of costs required for remediation will become more accurate as specific amounts and types of contamination are identified.

Recognition and measurement

Provisions are recognised when:

  • There is a present legal or constructive obligation to make a future sacrifice of economic benefits, as a result of past transactions or events;
  • It is probable that a future sacrifice of economic benefits will arise; and
  • A reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.

Key estimate and judgment

Determination of provisions

The estimations of the expenditure required to settle the present obligation are reviewed at each reporting date using external advice obtained in the course of meeting the Company’s remediation obligations. If they need to be modified, any adjustment to the provision will be charged to profit and loss.

Such revisions are generally required when more accurate information becomes available including the total quantity, types of contamination and method of management for remediation activities which may eventuate in the course of significant earthworks on the site

E.3 Income tax expense

(a) Reconciliation of income tax expense

The prima facie income tax expense on profit before income tax reconciles to the income tax expense in the financial statements as follows:

2019

$000

2018

$000

Loss from continuing operations

(251,991)

(279,967)

Tax at the Australian tax rate of 30%

(75,597)

(83,990)

Non-temporary differences

2

2

Current year tax losses not recognised

-

-

Temporary difference not recognised

75,595

83,988

Income tax expense

-

-

Current tax

-

-

Deferred tax

-

-

(b) Tax losses not bought to account

2019

$000

2018

$000

Unused tax losses for which no deferred tax asset has been recognised

135,190

-

Potential tax benefit @ 30%

40,557

-

Subsequent to lodgment of the Company’s 2018 tax return, $51.0m of tax losses has been brought forward and included in the 2019 balance of unrecognised tax losses.

The cumulative amount of unrecognised tax losses of $135.2m may be available to offset against future income tax assessments when the Company generates taxable income.

(c) Unrecognised temporary differences

The movements in deferred tax balances for the Company shown in the table below

2019

$000

2018

$000

Deferred tax assets / (liabilities):

Tax losses

40,557

-

Revenue received in advance

-

1,500

Expenses to be capitalised for tax

106,674

82,469

Other

12,354

19

Net deferred tax assets / liabilities

159,585

83,988

Effective tax rate

The non-recognition of deferred tax assets for deductible temporary differences and tax losses has led to WSA having an Australian accounting effective tax rate (ETR) of “0” per cent. If deferred tax assets had been fully recognised for deductible temporary differences and tax losses, WSA’s Australian ETR would have been 30 per cent.

The above ETR has been calculated on the basis of income tax expense divided by accounting profit, in accordance with the requirements of the Board of Taxation’s Tax Transparency Code.

Recognition and measurement

The income tax expense or benefit for the period is the tax payable or receivable on the current period’s taxable income based on the applicable income tax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses. The current income tax expense or benefit is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is recognised in other comprehensive income or directly in equity, respectively.

Voluntary Tax Transparency Code

WSA’s Management continues to assess the adoption of the voluntary tax transparency code in line with the establishment of associated policies and Company maturity.

E.4 Lease commitments

The Company in its capacity as lessee has entered into a non-cancellable lease for office space at 45-47 Scott Street, Liverpool, where the day-to-day operations and management of the Company take place.

During the current financial year, the Company in its capacity as lessee has entered into a non-cancellable lease for two motor vehicles.

The minimum lease payments under this lease are as follows:

2019
$000

2018
$000

Within 1 year

430

210

Between 1 to 5 years

184

314

More than 5 years

-

-

Total lease commitments

614

524

Recognition and Measurement

AASB 16 Leases has been adopted early by WSA and implemented on the date of incorporation.

At the time of adoption there were no lease arrangements in place. Subsequent to incorporation the above lease arrangements were entered into which resulted in the recognition of lease liabilities and right-of-use assets.

The lease liabilities were measured at the present value of the remaining lease payments, discounted using WSA’s incremental borrowing rate at the time of entering into the lease arrangement.

E.5 Remuneration of auditors

Under Section 98 of the PGPA Act, the Auditor-General is responsible for auditing the financial statements of WSA Limited.

2019

2018

Australian National Audit Office

Audit of annual financial statements

97,000

65,000

Total amount paid or payable to auditors

97,000

65,000

E.6 Related party disclosures

The entity is a Government Business Enterprise (GBE) which is controlled by the Australian Government. Related parties to this entity are Directors, Department of Infrastructure, Transport, Cities and Regional Development (Department of Infrastructure), Department of Finance, Portfolio Ministers and other Australian Government entities.

The following transactions occurred with related parties:

2019
$000

2018
$000

Equity injections by the Commonwealth of Australia

318,307

275,730

Receipt of contributions for visitors centre from Department of Infrastructure

-

5,500

Receipt of contributions for fencing from Department of Infrastructure

7,823

Purchases of various goods and services from the Commonwealth of Australia

2,298

6,166

On 17 May 2018, WSA was formally granted a 99-year lease (a 50-year lease with a 49-year option to extend) of the Airport site by the Australian Government. As part of the lease grant conditions, WSA have taken the responsibility to develop and construct the Functional Specifications of Western Sydney International Airport. Refer to Note A.

E.7 Events after the reporting period

On 30 August 2019, the following contracts were approved for award by the Board:

  • Bulk Earthworks and Airside Civils (BEAC) package to level the Airport site and trunk drainage construction by moving over 20 million cubic metres of earth.
  • Independent Certifier to perform review and certification of design and construction activities.

No other matters or circumstance have arisen since 30 June 2019 that have significantly affected the Company’s operations, results or state of affairs or may do so in future years.