Transurban Group - Essay Example

The of the company is Transurban Group and its ASX is TCL. The main office of the TCL is located at Level 3, 505 Little Collins Street,Melbourne, Victoria, Australia, 3000. The website address of the company is http://www.transurban.com.au . The reporting period of the company starts from 1st July and ends on 30th June of subsequent year. 3) The article “Transurban rejects Canadian takeover bids” appeared on May 12, 2010 and outlines the refusal of the group to accept two takeover bids on different grounds. (The Sunday Morning Herlad, 2010). The new article discusses about the two new takeover bids by the two pension funds from Canada and one from Australia and why Transurban Group has actually refused to accept the bids based on the value offered owing to its past performance and future prospects. Article however, mentions that the firm is willing to work with these firms in terms of due diligence and may also consider the options if the right price is offered. The article has also mentions the capital raising efforts of the firm to expand the business and how same may have an impact on the overall price offered by the acquiring firms. This article is interesting in the sense that it provides a concise picture of the details about the potential deals in which Transurban Group may be involved in near future. 4) The stock price on 5th April 2011 was $5.340 per share whereas the price on 8th April 2011 was $5.350 per share. The net change in the share price was $0.10 per share during the period. 5) The net profit as on 30th June 2010 was $59.605 M whereas the same was ($16.134m) during 2009. (Transurban, 2010, 51). Considering the above figures, it is evident that the firm was incurring losses during 2009 and it recorded an overall net profit of more than $59M during 2010. Net profit margin in 2010 therefore is 7.93% showing impressive performance considering the fact that the firm has incurred losses during 2009. It is also important to understand that the improvement in the profitability of the firm has become possible owing to the cost control. Firm has been able to reduce its key costs such as business development costs and corporate costs in order to improve the profitability of the firm. It could therefore be concluded that the firm has been able to achieve increase in profitability with better management of its costs and expenses. 6) The largest liability of the firm is borrowings which is to tune of $4.005 B and it is non-current liability. Note 16 of the notes to accounts indicates that these liabilities include infrastructure facilities, term loans, capital markets debt, US Private placement as well as the syndicated facilities. The infrastructure loans have been taken for the purpose of building and expanding the existing infrastructure base whereas other facilities have been taken for various purposes over the period of time. Borrowings also included working capital facilities having expiry of more than one year therefore they are reported in the non-current liabilities.(Transurban, 2010, 52) 7) There are four different streams of revenue reported in the annual accounts of the firm and each stream of revenue is recognized in the books based on different criteria. The revenue generated from the toll and fee is recognized when the actual charge is made by the user whereas other road revenues include advertising, rental and other associated revenue which is recognized as per the normal criteria. Construction revenue is recorded by the firm when the intangible asset is its construction phase whereas the development assets are recognized in sales when they are sold to third parties. Business development revenue is based on the provision of business support services and revenue is recognized accordingly. (Transurban, 2010, 74) 8) PriceWaterhouseCoopers is the auditor of the firm and based on the Independence of External Auditors Policy of the firm, the external auditors are not involved in any other activity on behalf of the firm. During the year, auditors have been paid to the extent of $1.496 M for their audit and other assurance services. Firm has also hired other external agencies to perform services such as review of financial statements; taxation etc. but these are not the official external auditors of the firm. 9) Sustainability reporting is a relatively new phenomenon and firms now regularly publish their sustainability reports every year. This drive has been made mostly due to the fact that environment is greatly affected by the operations of the firm therefore every organization is required to outline its efforts undertaken to contain the overall impact. Sustainability report therefore outlines the economic, environmental as well as the social performance of a firm. Through sustainability report, firms actually publically disclose this information and make it available to the public and shareholders to understand and explore the performance of the firm. Sustainability reporting therefore is a broader term outlining the efforts undertaken by the firm in order to develop sustainable business which is more conducive for conserving the resources of earth. As such sustainability report shall provide a comprehensive overview of the negative as well as the positive contribution made by the firm towards sustainability. 10) The main points of the sustainability report of the firm are: 1. Report has highlighted the core values of the firm and how they are being followed by the firm while operating in different business environments. 2. Firm has made a commitment to reduce its impact on the environment and has outlined the steps taken so far in order to reduce the environmental damage footprints of the firm on the environment. 3. Firm has taken steps to reduce the road congestion and has developed strategic alliance with the Australian state to develop innovative ways to manage the traffic. 4. Firm has also outlined its climate change strategy and has identified potential risks and opportunities for the firm as a result of the climate change. 5. Firm has also outlined different methods adapted by it in order to operate as a sustainable business. References 1. The Sunday Morning Herlad (2010). Transurban rejects Canadian takeover bids [online]. [Accessed 9th April 2011]. Available from: . 2. Transurban (2010). Sustainability Report 2010 [online]. [Accessed 9th April 2011]. Available from: . 3. Transurban (2010). Annual Accounts [online]. [Accessed 9th April 2011]. Available from: . 4. Transurban (2010). Annual Accounts [online]. [Accessed 9th April 2011]. Available from: 5. TRANSURBAN GROUP [online]. (2011) [Accessed 10 April 2011]. Available from: . 6. Non-audit services [online]. (2010) [Accessed 10 April 2011]. Available from: . Read More