City Rail Link Limited Annual Report 2021 by City Rail Link Ltd

City Rail Link Limited Annual Report 2021

Use of te reo Māori in this document: Our commitment to te reo Māori means that you will see the use of words and phrases in reo Māori throughout this document as normal practice. Some definitions: Aotearoa – New Zealand

Tapu – a state that is sacred, prohibited, restricted, under

Atua – ancestors, a god, supernatural being, deity

atua protection

Kai – food

Tāmaki Makaurau – Auckland

Karakia – words or incantations chanted to invoke spiritual guidance and protection

Te Ao Māori – the Māori world view

Mahi – work

Te reo Māori – the Māori language

Māori mātauranga – Māori knowledge, wisdom, understanding and/or skill

Tikanga – Māori practices and ways of doing things

Ngahere – forest

Waiata – song

Pepeha – a way of introducing yourself in reo Māori

Whānau – all families

Rangatahi – youth

Whakanoa – to remove tapu

Dame Whina Cooper's daughter, Hinerangi Cooper-Puru, at the Tunnel Boring Machine unveiling event

Contents Foreword 4 City Rail Link Ltd Board

Senior Leadership Team

Project Overview

Project Benefits

Statement of Performance

Project Delivery

Progress Highlights

Health and Safety

Sustainability and Social Outcomes

CRL Ltd as a Good Employer

Heritage 34 Development Opportunities

Communications and Engagement

CRL Mana Whenua Partnership

Financial Statements, Notes, Governance and Remuneration Disclosures

Corporate Directory

Statement of Responsibility

Notes to the Financial Statements

Governance and Remuneration Disclosures

Independent Auditor's Report

Foreword City Rail Link Limited's 2020-2021 Annual Report reflects a year of exciting change. City Rail Link (CRL) has finished the

connect CRL to the Western Line are

workers will be required for the

year with a dramatically changed

well advanced at Mt Eden

complex phase of fitting out the

project landscape in 12 breath-taking months - a project at peak production forging ahead; one successfully managing the challenges of the Covid-19 pandemic; one that can demonstrate significant contributions during the year to a more vibrant and sustainable Auckland. Hard work by many is responsible for rapid progress and construction sites are unrecognisable from a year ago. Hitting peak production saw the project’s workforce increase from an early estimate of 1,600 to around 2,500. At Mt Eden, some 25 pieces of big and busy machinery, not counting CRL’s Tunnel Boring Machine (TBM), Dame Whina Cooper, were in action – a ‘heavy metal’ reminder of pace and

• At Karangahape, what will become New Zealand’s deepest railway

The project will have a more definitive

station, work started on platform

view on the pandemic’s impact,

excavation 32 metres below city

including the most recent August

streets

2021 lockdown, on the construction

• The Aotea site began underground station work while continuing to manage challenges around relocating utilities, keeping traffic moving and central Auckland open, and the impact on neighbouring businesses. Importantly, CRL Ltd and Link Alliance signed two contract variations, C5 and C7, that covered redevelopment work around Mt Eden Station, and the installation of rail systems. Contract costs of $825 million are included in the overall $4.4 billion cost of the project.

progress.

CRL Ltd is indebted to the commitment

Anticipation marked the start of CRL

shown by the Link Alliance during

Ltd’s financial year with the arrival from a challenging year. The agility demonstrated by the Link Alliance to China of the TBM, built specifically for Auckland’s soil conditions. Its reassembly, the generous support

adapt to new Covid-related working

conditions was a significant contributor

from Dame Whina Cooper's whānau

to the year’s advances.

at the machine’s public unveiling, the

Despite outstanding progress, the

recommissioning and official launch, and the start of tunnel excavation marked a pivotal and symbolic shift away from years of enabling works to a new focus on construction - building the tunnels, stations and installing the rail systems. The start of tunnel excavation underlined a year for a project that is up and running and starting to take shape, above and below ground. Work continued at pace across CRL’s biggest construction sites: • Tunnel excavation, building a new station and extensive work to 4

stations and tunnels.

Covid-19 shadow remains a long one. Through the Construction Accord, the project raised wider infrastructure

timetable and costs when tunnel excavations are finished, and station construction is substantially completed. As construction shifted up a gear, people had a glimpse elsewhere of the benefits a completed CRL will deliver. The historic Chief Post Office (CPO) resumed its role as the ‘front door’ to the Britomart Station after four years of CRL-related closure, innovative construction and meticulous restoration. The project was joint winner of the prestigious Arthur Meade Engineering NZ award which recognised the skills used successfully to build rail tunnels below the Category 1 heritage-listed building. CRL Ltd adds its congratulations to the team for pushing the boundaries of existing construction techniques to achieve an outstanding outcome. A striking new traffic-free square known as Te Komititanga, which features traditional Māori design, was opened in front of the CPO as part of

industry concerns to Government and

the project.

its officials about difficulties providing

Our C2 contract in lower Albert

access for skilled international workers.

Street ended positively with the

Some progress was made, but there is

Infrastructure Sustainability Council

still some way to go. The time it takes

of Australia awarding an 'Excellent'

to cross the border remains an urgent

'as-built' rating, reflecting the quality

challenge.

of construction. Our contractors,

While nearly all the overseas expertise required for the construction

Connectus, left this part of central Auckland a more attractive destination.

programme such as the TBM operation

On the wider rail network, work

was able to enter New Zealand this

was completed to future-ready the

year, a new tranche of international

Ōtāhuhu Station in south Auckland CITY RAIL LINK LIMITED ANNUAL REPORT 2021

when CRL opens. Te Komititanga was one illustration of the beneficial partnership CRL Ltd has with Auckland iwi. The square’s merge, was gifted by Ngāti Whātua Ōrākei and the project’s Mana Whenua Forum. The forum continued its essential contributions through traditional blessings at project sites, and by ensuring the values of Tāmaki Makaurau are reflected in designs that will give CRL a unique cultural identity. The project does not take the continuing goodwill of Aucklanders for granted. The city’s support is highly valued, particularly for a project of this size and scale that has not been undertaken before in the centre of a New Zealand city. The continued commitment to being

Architecture, Engineering and

to leave a positive social and cultural

Construction Excellence award

legacy is a core CRL value. CRL Ltd

for innovative use of computer-

accepted the third intake of Māori and

based technology. The Public

Pasifika rangatahi for its job-training

Relations Institute of New Zealand

Progressive Employment Programme.

acknowledged the nationwide initiative

CRL Ltd is proud that 14 graduates

of our communications team to involve

from the programme are now working

people in the search for a significant

for the project. The project awarded

name for our TBM.

16 contracts to Māori and Pasifika businesses as part of a supply chain diversity initiative.

The project’s workforce provided the foundation for an exciting year of progress. CRL Ltd welcomed the

The opening of the Link Alliance’s Te

support, commitment and flexibility

Manawa training facility reflected the

from its own team, the Link Alliance

focus on safety as construction work

and from other contractors, especially

accelerated around busy streets, live

during the management of the

rail lines and constrained work sites.

pandemic. Together, they achieved

CRL Ltd became a foundation partner

much and have much to be proud of.

of MATES in Construction NZ, a

Their contribution will not diminish as

charitable organisation supporting the

construction progresses at pace.

wellbeing of workers.

After the next 12 months, Aucklanders

the best neighbour possible saw the

A completed CRL will help transform

will have a more explicit illustration

introduction of initiatives to offset the

Auckland’s future, but the project did

of how New Zealand’s largest

impact construction has on residents,

not lose sight of the city’s past.

infrastructure project will look, and

businesses and road users. Those

A 19th-century bluestone seawall was

how it will add to the city's growth

initiatives included CRL Ltd’s Business

uncovered in lower Queen Street.

and prosperity.

Hardship Programme providing rent

It will remain in place. The historic

assistance for C2 construction delays. The project also acknowledges the support it received from all stakeholders including Community Liaison Groups and our Sponsors, the Crown and Auckland Council. The project collaborated with Auckland Council and Auckland Transport to help keep people safe from the impact

bluestone wall in Albert Street was deconstructed block by block to make room for CRL construction. The wall

Dr Sean Sweeney

will be re-erected.

Chief Executive Officer

Alongside the CPO and Albert Street awards, there was welcome recognition elsewhere that reflected the quality of CRL work. Internationally, the

Sir Brian Roche KNZM

Link Alliance won an influential

Board Chair

of construction on pedestrian and traffic access, and to promote city areas as places to visit, and to support businesses there. CRL is a key part of Auckland Council’s “Auckland’s Future in Progress” campaign, and the project supported the campaign through its communications and branding. Alongside spades in the ground and ribbon cuttings, there was much more that reflected CRL’s scope and scale. CITY RAIL LINK LIMITED ANNUAL REPORT 2021

EXECUTIVE REPORT

name, which means to mix or to

Achieving sustainability excellence

City Rail Link Limited Board

Sir Brian Roche

Chair

Russell Black

Director

Sir Brian has an extensive background in governance and leadership that includes the Government and business sectors, transport, health and sport. Alongside his CRL Ltd role, Sir Brian is currently Chair of Waka Kotahi New Zealand Transport Agency.

Russell is a civil engineer with extensive client delivery management experience on major infrastructure projects - predominantly urban and underground railways in Hong Kong, Singapore, London and China. Russell provides client governance

Brian Harrison

Anne Urlwin

Director

Brian has a legal background with extensive domestic and international experience advising corporates, financiers, multilaterals and Government bodies on major projects and infrastructure in a broad range of sectors.

and consultancy services on Australian urban rail projects.

Karen Jordan

Director

Karen is a Director experienced across private, public and not-forprofit sectors. She is a Chartered Member of the IODNZ and a Fellow of CIMA. She has over 20 years experience as a corporate executive in UK energy infrastructure. Karen is currently a Board Director and Audit Committee Chair of Steel & Tube Holdings Ltd, an Independent Member of NZDF Risk and Assurance Committee and of the NZ IRD Risk and Assurance Committee.

Director

Anne is a professional Director and chartered accountant with wideranging governance experience, including the infrastructure and construction sectors. Her current roles include directorships of Summerset Group Holdings Ltd, Precinct Properties New Zealand Ltd and Queenstown Airport Corporation Ltd. Anne is a former Director of Chorus Ltd, Tilt Renewables Ltd and Steel & Tube Holdings Ltd and she is a former Chair of national commercial construction group Naylor Love. She has served on several central and local Government entity boards.

CITY RAIL LINK LIMITED ANNUAL REPORT 2021

Senior Leadership Team EXECUTIVE REPORT

Left to right -

Caroline Beaumont

Rob Mair

Gerry Goodwin

General Counsel

General Manager Health, Safety, Environment & Sustainability

Assurance Manager Tunnels & Stations

Dr Sean Sweeney

Sandip Ranchhod

Chief Executive Officer

Owner Interface Manager

Patrick Brockie Chief Financial Officer

Sumi Eratne Programme Delivery Director

Kirsten Mayne Head of People & Capability

Russell McMullan General Manager Assurance & Integration

Elgan Davies

Steve Brunell Programme Performance & Controls Director

Victoria Jessop General Manager Corporate Relations & Communications

Assurance Manager Rail Systems

CITY RAIL LINK LIMITED ANNUAL REPORT 2021

Angel works alongside our health, safety and environmental advisors at the Mt Eden Station 8

Project Overview 10

Statement of Performance

Project Delivery

Progress Highlights

Health and Safety

Sustainability and Social Outcomes

CRL Ltd as a Good Employer

Heritage

Development Opportunities

Communications and Engagement

Mana Whenua Partnership

PROJECT OVERVIEW

Project Benefits

City Rail Link driving significant benefits for Auckland This world-class rail service will revolutionise the way people get around New Zealand’s busiest and most densely populated region, while helping to put Auckland on the map as a truly international city. The $4.4 billion project will deliver a multitude of benefits for New Zealand and its most populous city. By modernising Auckland’s rail service, CRL will not only improve travel options for people, its construction will provide jobs for about 2,500 during peak construction, upskill the local labour force and increase growth and accessibility of New Zealand’s most productive business district – central Auckland. The project joins the dots between two key destinations, Britomart in downtown Auckland and the suburban Mt Eden Station. The two will be connected by twin underground tunnels 3.45 kilometres-long that also include two brand new underground stations – Aotea and Karangahape – to improve central city access. Britomart Station will no longer be a dead-end stop. Its redevelopment into a two-way through station will unlock Auckland’s entire rail network. Servicing the central city’s midtown district, the new Aotea Station is predicted to be the country’s busiest. The station concourse will run under Albert Street with entrances at Wellesley and Victoria Streets.

Karangahape Station will hold the title of the country’s deepest station - with entrances at Beresford Square and Mercury Lane. The current Mt Eden Station will also undergo a massive redevelopment to accommodate the new connections needed between CRL and the Western line, and construction of a modern station building. A completed CRL will double the capacity of Auckland’s rail network, allowing it to carry up to 54,000 passengers an hour during morning and afternoon peak times when fully operational. To move the same number by bus or car would require another three Auckland Harbour Bridges or 16 extra traffic lanes into the city centre. Better travel choices will help to ease pressure on roads and create health benefits which include cleaner air with more people using electric trains. Once built, CRL will double the number of people who live within 30 minutes travel of New Zealand’s biggest employment hub, central Auckland. Public spaces around CRL stations are being designed to be community focused and visually stunning. CRL will also be the catalyst for significant development of new commercial properties, and thousands of homes will be built around its stations, providing people with better access to housing and employment opportunities.

At over 30 metres below street level, the new 10

CITY RAIL LINK LIMITED ANNUAL REPORT 2021

100 year

4.42

4 stations

billion

project cost

asset life

with enhanced streetscapes around stations and along Albert Street

NEW

Aotea Station NEW

Karangahape Station

REDEVELOPED

PROJECT BENEFITS

Britomart Station

REDEVELOPED

Mt Eden Station

suburban stations improved wider network improvements at The Strand, Ōtāhuhu and Newmarket

42 metres

trains per hour

9car

electric trains

capacity built

maximum depth of tunnels

on Auckland’s network in peak travel times

3.45km CITY RAIL LINK LIMITED ANNUAL REPORT 2021

twin track underground tunnels connecting Britomart to Mt Eden

Workers in the Karangahape Station mined tunnel caverns

Statement of Performance This section describes the 2020-2021 progress made towards achieving the identified performance measures as outlined in the Statement of Performance Expectations (SPE). CRL Ltd has one output class and six output areas. The results reported within this section should be read in conjunction with the results reported against the Statement of Intent (SOI) on pages 13-18*. CRL Ltd’s performance against some Key Performance Indicators (KPIs), largely in regard to Project Delivery, have been impacted by Covid-19 Government-imposed restrictions during Alert Level 3 (12 August 2020, 14 and 28 February 2021) and Alert Level 2 (30 August and 23 September 2020, 17 February and 7 March 2021). New health and safety protocols, such as physical distancing, were in place during Alert Levels 3 and 2 which impacted the speed of construction on CRL’s sites. Note 1.17 (v) in the Financial Statements provides a more fulsome description of the financial impact of Covid-19 on CRL Ltd.

Funding Envelope

KPI 2021

Actual 2021

Achieve fiscal efficiency

Meet delivery targets within approved

Achieved. Remained within the funding

Appropriation

budget for the project

Timely financial reporting of project costs on a

Achieved

cost to complete basis Operate CRL Ltd’s corporate functions within

Achieved. These costs are monitored

the approved budget

monthly

*Because the SPE and SOI were prepared at different times, some of the targets set out in the document do not align.

CITY RAIL LINK LIMITED ANNUAL REPORT 2021

Health and Safety

KPI 2021

Actual 2021

Build an underground rail

An externally validated maturity

Achieved. An independent assessment of the Health

link that is safe for

assessment of the CRL Health and

and Safety maturity across CRL has achieved Level 3,

constructors, operators,

Safety Management System (HSMS)

‘Standardised’. See page 25 for further detail

maintainers and users

using the Risk Management Maturity Model (RM3) will achieve Level 3 (standardised) by June 2021 Total Recordable Injury Frequency

Achieved. Project TRFIR rate was 3.8 injuries per million

Rate (TRIFR) at or below seven

hours worked. Increased health and safety monitoring

injuries per million hours worked

and support have been put in place

Staff wellbeing survey completed and

Achieved

action plan in place Publish annual safety assurance

Achieved. Published June 2021

summary report by June 2021 to assure safety for operations, maintenance and users

KPI 2021

Actual 2021

Achieve sustainability

Achieve C1 and C2 'Excellent'

Achieved C2 certified with 'Excellent' rating.

excellence including

Infrastructure Sustainability (IS)

C1 final rating 'in progress' now expected early next year

social outcomes

'as-built' rating 95 per cent of construction

Achieved. Over 99 per cent construction and demolition

demolition waste diverted

waste (including spoil) has been diverted from landfill for

from landfill*

C1 and C2 over the last year

C1 and C2: 10 per cent reduction in

Achieved. 24 per cent reduction in embodied carbon of

embodied carbon of construction

construction materials for C1 and C2

material C3: 15 per cent reduction in embodied

Achieved. 22.9 per cent reduction in embodied carbon of

carbon of construction material

concrete compared to the base case

Deliver the Link Alliance Progressive

Achieved. The Link Alliance Progressive Employment

Employment Programme

Programme started in July 2020 with six rangitahi (young people). Graduation was held in November 2020

Six Link Alliance construction contracts Achieved. The Link Alliance has awarded 16 contracts to to be awarded to Māori and/or Pasifika Māori and Pasifika small and medium size businesses small and medium sized businesses *Other contracts such as C8 Ōtāhuhu were monitored but excluded from this reporting due to materiality.

CITY RAIL LINK LIMITED ANNUAL REPORT 2021

STATEMENT OF PERFORMANCE

Sustainability and Social Outcomes

Project Delivery

KPI 2021

Actual 2021

Deliver a safe,

Complete C8 Ōtāhuhu Station by

Achieved. Completion* of station works was reached

operable and quality

October 2020

on 22 September 2020. The related track works were

underground rail link in a timely manner

completed in October 2020 Project Alliance Agreement (PAA)

Achieved. The PAA Variation Agreement was signed 20

Variation Agreement approved for

October 2020

inclusion of C5/C7 contracts by December 2020 Complete C2 by February 2021

Achieved. Completion* is for C2 separable portions (SPs), SP1A tunnel box, SP1 cut & cover tunnel works and SP4 Lower Queen Street Public Realm

Complete C5 Western Line Enabling

Achieved. Completion* was reached on 25 July 2020

Works by October 2020 TBM drive commences at Mt Eden by

Achieved. Commenced on 27 May 2021

June 2021 *Completion means that practical completion (PC) has been achieved. PC means the contract works are substantially complete and the asset involved is available for use. For contracts with KiwiRail as contractor, Completion refers to that works are “fit for service”.

Oversite Development

KPI 2021

Actual 2021

Realisation of

CRL Ltd to contribute to the planning and

Achieved. Working collaboratively with the Eke

development potential

successful transition to a new entity to

Panuku and Kāinga Ora-led development

in and around CRL

implement the agreed value creation and

project sites

capture strategy – timeframe to be decided by the Sponsors

Community & Stakeholder Engagement

KPI 2021

Actual 2021

Deliver a high level of

Efficiently respond to and process applications

Achieved. All applications for the BHP processed

communications and

for access to the Albert Street Business

and businesses advised of outcome. The BHP

engagement

Hardship Programme (BHP)

ceased with completion of the C2 works (October 2020)

Increased public participation through events

Achieved. Notwithstanding Covid-19, 13 events and

(target 8) and site tours (target 25)

120 site tours were held

Build positive profile of project with videos

Achieved. In excess of 5 social media posts per

(target 10), social media (target at least 5 posts

week, 116 videos, 41 media releases and 12

a week), proactive media releases (target 25)

community newsletters over the year

and community newsletter (target 12) Responsiveness (target 2 working days

Achieved. All enquiries acknowledged within two

response to public enquiries)

working days*

*Detailed response timing is dependent on the nature and complexity of the enquiry. 14

CITY RAIL LINK LIMITED ANNUAL REPORT 2021

Aotea Station, beneath Wellesley Street West

Revenue Total revenue Total expenses Net surplus/(deficit)

Actual 2021

Budget 2021

Actual 2020

3,098

653

1,954

83,001

55,305

114,956

(79,903)

(54,652)

(113,002)

*Variance of Actual deficit to Budget FY21 was driven by timing of asset transfers.

Auckland City Rail Link Non-Departmental Capital Expenditure The Crown is a 51 per cent shareholder of CRL Ltd and funds CRL Ltd on 50:50 basis with Auckland Council. The Crown and Auckland Council fund CRL Ltd by subscribing to equity in the company. During 2020-21, the Crown contributed $395 million against the revised appropriation of $410 million. This appropriation is to achieve construction and operational readiness of the CRL project. An explanation of the variances from budget can be found in note 16 of the Financial Statements within this Annual Report.

Assessment of Performance City Rail Link Ltd

Actual 2021

Target 2021

Deliver the CRL project by 2024

Progressing activities described on pages 16 - 21 against

Project delivery

Statement of Intent (SOI) targets (taken from schedule 5 of

target met

the Project Delivery Agreement (PDA))

CITY RAIL LINK LIMITED ANNUAL REPORT 2021

STATEMENT OF PERFORMANCE

Output Class Cost of Service Statement – City Rail Link Development $(000)

Project Delivery Delivering a quality, underground rail link in a timely manner The project was initially split into nine delivery contracts. These were later realigned into seven contracts with the combining of C3, C5 and C7 into a single Alliance contract. Three of the six contracts are underway (C1, C3 and C8), and three - Downtown Shopping Centre (DSC), C2 and C6 - have been completed. Contract C8 is broken into three different station upgrades of which two, Ōtāhuhu and the Strand, have been completed leaving only Newmarket to be undertaken. The expected milestones agreed in the Project Delivery Agreement (PDA) and Statement of Intent (SOI) are included in this section with progress up to 30 June 2021 noted. The PDA provides more detailed project delivery dates than the SOI. The PDA and SOI originally anticipated design and construct contract models for contracts C3, C5, and C7. These have been changed to a proposed overarching alliance contract to be delivered by the Link Alliance. CRL Ltd remains compliant with all consent conditions obtained for successful delivery of the project. UNDER CONSTRUCTION

 Contract 1

Britomart Station

Removal of temp works and

minor station reinstatement

Contract 3 - Alliance

 Stations and tunnels  Western Line connection --- Rail Systems

 Britomart East

Queen Street

Aotea Station

 Contract 8 not shown • Newmarket • The Strand (complete) • Ōtāhuhu (complete) COMPLETE

Karangahape Station

 Contract 1

Chief Post Office reinstatement

and Te Komititanga

 Contract 2

Albert St - Customs to

Wyndham Sts

--- Contract 6 Mt Eden Station

Mt Eden Stormwater Main

 DSC Downtown Shopping Centre

Te Komititanga pavers depicting a whāriki or woven welcome mat design CITY RAIL LINK LIMITED ANNUAL REPORT 2021

 Contract C1 Britomart Station/Lower Queen St contract delivered by Downer Soletanche Bachy Joint Venture (DSBJV) Scope: Creation of a temporary Britomart Station passenger facility, construction of underground tunnels from Britomart Station to the DSC site, reinstatement of the historic Chief Post Office (CPO) and streetscape enhancement around Britomart Station. The SOI target delivery date for this contract was July 2021. However, as a result of confirmed streetscape works and delays associated with the New Zealand Government Covid-19 Alert Level 4 lockdown and reduced productivity during Alert Levels 3 and 2, the contract delivery date has been moved to November 2021. In December 2020, C1 celebrated the opening of Te Komititanga, this Lower Queen Street transformation included pavers designed using a whāriki pattern created by Mana Whenua weavers. The pattern represents a welcome mat for Auckland’s visitors from the sea and waves that represent Wai Horotiu meeting the Waitematā Harbour. PROJECT DELIVERY

In April 2021, C1 completed the mechanical and electrical works, station management systems and architectural finishes to the Britomart Station. This allowed the reopening of the CPO to the public and for use as the main entrance into the Britomart Station. The re-opening marked the end of outstanding and innovative engineering and restoration in a challenging and confined environment, to build two rail tunnels without damage to the Category 1 heritage-listed CPO above. Ongoing work involves the removal of temporary works from within the station and rebuild of station areas which was only possible after temporary works removal. Completion is forecast for September 2021. DSBJV have completed Tyler and Galway streetscape works as far as the rear façade of the CPO. A small portion of Tyler and Galway Street reinstatements is now being undertaken by Auckland Council. Milestone

Completion

Te Komititanga streetscape enhancement

December 2020

Chief Post Office reinstatement and Britomart

April 2021

Station works Removal of temporary works and minor station

September 2021

reinstatement Target Delivery Date

CITY RAIL LINK LIMITED ANNUAL REPORT 2021

September 2021

 Downtown Shopping Centre (DSC) delivered by Precinct Properties

Scope: Construction of CRL tunnels below the Commercial Bay retail and tower development site. This contract is complete. Milestone

Completion

Delivery date

April 2019

 C2 Albert St (Customs St to Wyndham St) delivered by Connectus Joint Venture (McConnell Dowell/Hawkins) Scope: Trenching and tunnelling from the DSC site (corner Customs and Albert Streets) to the Wyndham Street intersection on Albert Street, as well as the pipe-jack contract for the relocation of the stormwater main on Albert Street and strengthening the Ōrākei Main Sewer that intersects it. The C2 contract was completed in October 2020 two months ahead of its SOI target date of December 2020. Connectus completed the backfilling above the tunnel boxes and the re-building of the Albert Street urban realm. The new urban realm provides wider paved footpaths to make the area more pedestrian-friendly and provide businesses the opportunity to offer extended outdoor dining. A further 15 mature native trees were planted along Albert Street making a total of 23 trees planted on the contract. Milestone

Completion

Delivery date

October 2020

 Contract C3, C5 and C7 Alliance Tunnels and Stations package

delivered by the Link Alliance (Vinci Construction Grands Projets SAS, Downer New Zealand Limited, Soletanche Bachy International (NZ) Limited, WSP New Zealand Limited, AECOM New Zealand Limited, Tonkin + Taylor Limited, CRL Ltd) Scope: Excavating tunnels on Albert Street from just south of Wyndham Street to the Western Line at Mt Eden, building two underground stations (Aotea and Karangahape) and redeveloping Mt Eden Station (original C3 scope). Inclusion of original C5 scope (Western Line works, including connection of tunnels to existing live rail corridor environment and line-wide systems) and original C7 scope (rail systems integration, testing and commissioning from Britomart Station to Mt Eden Station). 18

The Mt Eden Station from above CITY RAIL LINK LIMITED ANNUAL REPORT 2021

The variation to the C3 contract to incorporate the C5 and C7 scopes was completed in October 2020. Demolition works and site clearance for Aotea, Karangahape and Mt Eden Station sites have been completed and, where possible, utilities diverted outside the footprint of the station structures. The Mt Eden portal and the preparation for launching the Tunnel Boring Machine (TBM) have been completed. The TBM, named in honour of Dame Whina Cooper, has been delivered and assembled. It commenced the first tunnel drive to Aotea Station, via Karangahape Station, in May 2021. The logistical support to the TBM is located at Mt Eden and includes concrete tunnel lining segment storage and stockpile for the excavated material. The TBM is planned to bore an average of 15 metres drive per day and up to 100 metres per week. Work along the North Auckland Line (NAL) has continued with the construction of one half of the structures. Over the December 2021 Christmas period the single line along the NAL will be realigned onto the new structures allowing the remainder to be constructed.

The temporary access shaft at Karangahape Station has been completed, and the first of the two station platform tunnels mined, with excavation of the second platform tunnel commenced. Construction of the Beresford Square and Mercury Lane permanent station shafts continue. Aotea Station piling and diaphragm wall construction has progressed well over the last year with significant sections of the perimeter structure complete. Excavation of the southern end of the Aotea Station box has commenced in preparation for the first tunnel drive TBM arrival in late 2021. Construction of the station structure under Wellesley Street has been completed to allow the road to reopen. The closure of nearby Victoria Street will allow the northern end of the station box to be completed. The Bluestone Wall along Albert Street has been carefully removed and stored in preparation for the wall to be rebuilt one metre to the east of its original position once the station structure has been completed.

CITY RAIL LINK LIMITED ANNUAL REPORT 2021

PROJECT DELIVERY

Up to 14 cranes have been working across the Mt Eden and adjacent NAL sites, these have enabled the diversion of the Huia 2 sewer and the construction of a significant portion of the connecting structures between the new bored tunnels and the NAL. The Mt Eden site will continue to be developed during the next year while also providing logistical support for tunnel boring to Aotea Station.

 Contract C6 Mt Eden Stormwater Main delivered by March Bessac Joint Venture Scope: Stormwater line replacement in Mt Eden, prior to the start of C3 works. This contract is complete. Milestone

Completion

Delivery date

August 2019

 Contract C8 Wider network improvements delivered by KiwiRail and CRL Ltd

Scope: Additional platforms and turn-back facilities at The Strand, Ōtāhuhu and Newmarket. The C8 Ōtāhuhu works were completed in October 2020 with the opening of the new platform and trackworks. The detailed design for the C8 Newmarket works has been completed and early construction works have commenced by KiwiRail. The SOI delivery date for the C8 contract is November 2022. Potential works at Henderson, along with other options, are being reviewed by Auckland Transport. Milestone

Commence

Completion

The Strand delivery

Completed

January 2019

Ōtāhuhu delivery

Completed

October 2020

Newmarket delivery

Underway

June 2023

Target delivery date

Underway

June 2023

 Contract C9 Britomart East Scope: Additional connections, platform widening and track modification at the eastern end of Britomart Station required once the CRL is operational. A KiwiRail early works contract was completed over the Christmas 2020 block of line with the installation of a new rail switch and crossing in the Britomart tunnel. Design works for the remaining portions of the contract have been completed. The works will now be tendered for bid. It is planned to complete the award of the work by December 2021.

Milestone

Completion

Award of C9 Britomart East Works

December 2021

CITY RAIL LINK LIMITED ANNUAL REPORT 2021

Underground in the Karangahape mined tunnels CITY RAIL LINK LIMITED ANNUAL REPORT 2021

Progress Highlights

July 2020

August 2020

September 2020

A special, noise-insulated shed was built above the Karangahape shaft on Mercury Lane to allow teams to work 24/7 underneath, creating less disruption and noise for the nearby community.

CRL’s Tunnel Boring Machine, named Dame Whina Cooper, arrived from China in sections for reassembly at the Mt Eden site.

The first cuts were made underground at Karangahape Station to excavate the caverns that would eventually form the station concourse and connecting tunnels.

January 2021

February 2021

March 2021

A bright green visitor centre named Te Pūkaki opened by Aotea Station in Wellesley Street as a shared space for people to learn more about the CRL.

Construction across all CRL sites continued to forge ahead, adhering to strict health and safety protocols, despite the Covid-19 Alert Level 3 lockdown in Auckland earlier in the month.

Te Manawa, CRL’s state-of-theart training facility and visitor information centre, opened in Auckland’s Uptown district.

CITY RAIL LINK LIMITED ANNUAL REPORT 2021

November 2020

December 2020

The project celebrated completion of one of its first big contracts. C2 included tunnel construction below lower Albert St and streetscape works at ground level.

Thousands of Aucklanders got up close and personal with the TBM at the “Boring Day Out”. This month also saw the completion of C8 works at Ōtāhuhu Station.

Delivered by the C1 team, the city’s newest destination, the traffic-free square known as Te Komititanga next to Britomart Station, was officially opened by project Sponsors.

April 2021

May 2021

June 2021

The stunningly refurbished Chief Post Office reopened and resumed its role as the 'front door' to Britomart Station after a four-year CRL-related closure.

The TBM, the project’s mechanical star, began the first of its two 1.6 kilometre underground drives from Mt Eden Station to Aotea Station, via Karangahape Station.

To accommodate Aotea Station construction, the project re-opened the Wellesley Street intersection with Albert Street, and closed the nearby Victoria Street intersection.

CITY RAIL LINK LIMITED ANNUAL REPORT 2021

PROGRESS HIGHLIGHTS

October 2020

Workers winched in and out of the Karangahape shaft

Health and Safety CRL Ltd aspires to Health and Safety (H&S) excellence in everything it does This is an ambitious and challenging goal, and one which requires continued effort and focus from all those involved in CRL to achieve excellence. CRL Ltd’s Health and Safety Strategy 2019-21 sets out its vision ‘Mahia te mahi, hei painga hei oranga mo tātou katoa - To do the work for the good of everyone’. To achieve this vision, four strategic priorities have been identified: • enhance the maturity of the H&S management systems • support and embed safer working behaviours • establish improved H&S performance measurements • enable continuous H&S improvement

CITY RAIL LINK LIMITED ANNUAL REPORT 2021

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CITY RAIL LINK LIMITED ANNUAL REPORT 2021

5 MRS

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The project’s second annual independent RM3 assessment took place in 2021 and involved CRL Ltd and its construction partner, Link Alliance. The assessment included interviews, reviews of safety plans and procedures, and on-site observations. The project achieved an average of ‘Standardised’. This means that ‘good practice has been synthesised into standard processes’. There has been significant improvement in the maturity of the safety management system compared with the first assessment in 2020.

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Under RM3 the project will continue to review and improve its H&S systems while delivering well-defined, consistent, and replicable outcomes that can be externally verified. CRL Ltd wants its people to know what the expected outcomes are, what they are responsible for, and to work together to continue achieving H&S excellence with no gaps, overlap or duplication.

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CRL is the first project in New Zealand to adopt the United Kingdom’s Risk Management Maturity Model (RM3) to assess its H&S management systems. RM3 was selected because of its innovative approach, one with built-in mechanisms to continue pushing the envelope, together with continued opportunity to learn and seek improvement in how H&S outcomes are delivered.

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Weighted average of CRL Ltd and its construction partners' RM3 results

H&S indicators 1

Leadership

Competence Management System

Health & Safety Policy

Risk Assessment and Management

Board Governance

Objective/Target Setting

Written SMS

Workload Planning

Allocation of Responsibilities

Safe Systems of Work

Management and Supervisory

Management of Assets -

Construction Assets

Organisational Structure

Change Management

Internal Communication

20 Control

Accountability 7 8

of Contractors/Suppliers

Arrangements

Emergency Planning

System Safety and Interface

Proactive Monitoring Arrangements

Audit

Incident Investigation

Management Review

Corrective Action

Arrangements

Organisational Culture

Record Keeping, Documentation,

Control and Knowledge Management 24

Worker Involvement and Internal

Co-operation

Exclusion and restricted zones are an important part of our H&S practices

Support and embed safer working behaviours

Establish improved H&S performance measurement

The Link Alliance’s induction to main works is the first experience for workers joining the CRL team. The induction is designed to communicate the project’s values and objectives, and give workers an idea of what they can expect when they arrive on-site.

CRL Ltd 's safety management system enables efficient collection and analysis of health, safety and environment data.

An integral part of the induction is concentrated on safety outcomes. It includes an interactive behavioural safety module which focuses on how workers can respond positively when potentially unsafe situations occur, by illustrating where work conditions or activities might deviate from what was originally planned. During the induction, attendees are put into teams to discuss how they would react in each situation. The facilitator then uses those discussions to reinforce the Link Alliance’s ‘Golden Actions’, which are the core behavioural attributes promoted and encouraged across all its worksites.

The current industry standard measurement of H&S performance is the Total Recordable Injury Frequency Rate (TRIFR). As of June 2021, the TRIFR rate was 3.8 per million hours worked on the CRL project, which is below the Statement of Performance Expectations target of 7.0 per million hours worked. All incidents are investigated and preventative actions are put in place, which CRL Ltd monitors through to completion. CRL Ltd conducts regular inspections of all project construction sites to ensure that minimum H&S requirements are being met. CRL Ltd monitors 26 individual H&S performance indicators. They cover all activities from design through to commissioning and are critical for the project to effectively manage potential H&S risks. Proactive or ‘leading’ indicators, like heavy goods vehicle safety checks, are also recorded along with reactive or ‘lagging’ measures such as near misses. This data is aggregated into the H&S Performance Index (HSPI) which creates a detailed and accurate picture of the project’s overall H&S performance.

CITY RAIL LINK LIMITED ANNUAL REPORT 2021

Workers at a daily pre-start meeting

3.9

4.1

3.8 2.7

2.6 1.9

0 Jul 2020

Aug 2020

Sep 2020

Oct 2020

Lost Time Injury

Nov 2020

Dec 2020

Jan 2021

2.3 3

2.6 2 1

1 Feb 2021

Mar 2021

Medical Treatment Injury

Apr 2021

3.8 2 2 1

May 2021

HEALTH AND SAFETY

Frequency Rate

Quantity

Injuries by Classification and Global TRIFR (per million hours)

Jun 2021

TRIFR

Enable continuous H&S improvement Great H&S performance in the construction industry comes from doing simple things right every day. The project works hard to eliminate everyday pressures and distractions that can sometimes result in mistakes.

showcase workers talking about the safety measures which are in place to protect against critical risks. In 2020, these focused on the use of plant/people zones to segregate people and machinery on-site.

To re-energise the team’s commitment to the project's H&S vision, CRL Ltd and the Link Alliance run a biannual ‘Mahia te Mahi’ H&S engagement week. Each site runs a programme of activities which include quizzes, toolbox talks, visits, tours by management, and photo competitions to capture workers adopting good H&S management practices. Short videos are made which

CRL Ltd has established a project health, safety & environment leadership group to ensure relevant lessons from incidents are shared and improvements are adopted. CRL Ltd also plays an active role in several New Zealand construction industry H&S initiatives.

CITY RAIL LINK LIMITED ANNUAL REPORT 2021

Concrete is crushed and reused at the Mt Eden site

Sustainability and Social Outcomes The project aims to achieve sustainability excellence by being careful with the resources it uses, optimising its carbon footprint, avoiding waste and leaving a positive social and cultural legacy for Tāmaki Mākaurau CRL Ltd and its construction partners continue their commitment to optimising the use of materials, energy and water, striving for zero waste to landfill during construction. One of the project’s early contracts has already achieved the targeted 'Excellent' Infrastructure Sustainability (IS) rating. The project also continues to support opportunities for training, employment, and supply chain diversity during construction. The project’s sustainability performance is being externally verified by Infrastructure Sustainability Council (ISC) - using Mahi Rauora Aratohu a world-first, custom-made IS technical manual that incorporates Mana Whenua cultural values, developed together with the CRL Mana Whenua Forum.

Contract 2 is now complete and was awarded an 'Excellent' IS 'as-built' rating, providing independent verification of the project’s outstanding sustainability outcomes. With C1 close to completion, this contract is tracking well to deliver on its targeted IS rating, which can only be obtained once the contract reaches practical completion. The ISC rating tool is also being used by the Link Alliance to verify progress on its ambitious sustainability targets for C3. Because the C3 contract makes up 85 per cent of the entire project, the opportunity to achieve sustainability outcomes is equally immense.

CRL Ltd’s sustainability objectives focus on

Reducing Resource Consumption 28

Zero Waste to Landfill

Social Outcomes

Mana Whenua

Governance and Reporting

CITY RAIL LINK LIMITED ANNUAL REPORT 2021

Reducing resource consumption Once complete, the CRL will be a low-carbon travel option for Aucklanders. However, it comes with a significant up-front ‘cost’ to build - namely in energy, material and water use. To combat this, the project aims to use the least amount of resources possible during delivery and over the infrastructure’s 100-year life time through efficient design and construction methodology. To track the project’s success, an estimate called the ‘base case’ was created for each construction package. This measures the amount of energy and materials that would be used to build and operate the CRL using a business-as-usual approach, without sustainability interventions.

The completion of C2 has enabled the project to reflect on the sustainability outcomes achieved and review how sustainable thinking was applied during design and construction. Delivered by Connectus, C2 achieved a 23 per cent reduction in GHG emissions (4008kWh) through initiatives such as replacing diesel generators on-site with grid electricity. Some 11 per cent reduction in materials consumed was achieved through using recycled concrete for back filling rather than flowable fill

C1 remains on track to achieve targeted reductions in energy and materials-related greenhouse gas emissions (CRL's carbon footprint). The water recycling system installed for C1 in November 2018 has meant that to date, more than one million litres of potable water has been saved. Link Alliance has a target of reducing emissions associated with running CRL stations and tunnels by 25 per cent from a base case. This will largely be achieved through design of efficient mechanical and electrical systems. C3 is already on track to reduce materials use by rationalising the large number of piles needed, reducing the size and changing the shape of mined station caverns, replacing reinforcing bar with steel fibres and constructing diaphragm walls rather than piling where appropriate.

SUSTAINABILITY

A ‘detailed design’, which includes initiatives to reduce resource consumption was then developed. The ability to compare the detailed design against the base case enables the project to quantify improvements in resource use.

and using fly-ash as a cement replacement in concrete, among other things. Lastly, a nine per cent reduction in water use was achieved through initiatives such as changing construction methodology to eliminate the need for wheel washing, and planting drought-resistant native trees.

Materials efficiency, such as using fly-ash, has contributed to a 23.7 per cent reduction in the embodied carbon (12,000tCO2e) of concrete used on-site so far.

CARBON FOOTPRINT

Resource use for C1, C2 and C3 to 30 June 2021 C1 & C2 materials emissions reduction

Target 12%

C1 & C2 energy emissions reduction

Target 30%

C3 reduction in embodied carbon of concrete

Target 15%

C1 & C2 water use reduction

Target 25%

C1 & C2 construction and demolition waste diverted from landfill

Target 90%

C1 & C2 spoil diverted from landfill

Target 95%

Achieved 24% Achieved 23% Achieved 23.7% Achieved 11% Achieved 96% Achieved 98%

C3 construction demolition Target 95% waste (including spoil) Achieved 99%* diverted from landfill*

0 * Excludes contaminated waste. CITY RAIL LINK LIMITED ANNUAL REPORT 2021

100

Zero waste to landfill Construction and demolition material makes up around 50 per cent of New Zealand’s total waste to landfill. As the country’s largest infrastructure project, it is not only important for CRL to reduce its waste, but also to enable the reuse and recycling of as much waste as possible, playing a leadership role for other infrastructure projects. On C1, C2 and C3 contracts, more than 16,785 tonnes of construction demolition has been diverted from landfill for recycling or reuse this financial year. Across all CRL contracts, 580,597 tonnes of waste, including spoil, has been diverted to date. Diversion was achieved through a number of initiatives. These include diverting materials for reuse through Auckland’s Community Recycling Centres, gifting basalt rock from Mt Eden to Mana Whenua, backfilling the C2 tunnels with crushed concrete and sending spoil from both C1 and C2 to Three Kings to remediate the closed quarry. This year, CRL Ltd and its construction partners also identified a number of opportunities where materials that might have been sent to landfill were salvaged and reused for communities in New Zealand and in the Pacific. The Link Alliance has already diverted over 4,000 tonnes of resources for reuse that would otherwise have been destined for landfill. To prepare for construction at Mt Eden, by far CRL’s largest site, more than 40 commercial buildings, workshops and small factories had to be cleared. Land at Karangahape was also cleared. Items saved from landfill at both sites included two buildings - an historic cottage that was relocated to the Waikato and a bar/café that was dismantled and then made a 2,000 kilometre journey to Niue to be repurposed as a pizza parlour - as well as thousands of items including desks, toilet, ceiling panels, benches and tables.

Native trees planted along lower Albert Street 30

CITY RAIL LINK LIMITED ANNUAL REPORT 2021

Social Outcomes

Social Procurement

Pou Ārahi Māori

CRL Ltd is an Aukokiri member with Amotai, (formally He Waka Eke Noa). Membership gives the Link Alliance access to an online register of Māori and Pasifika businesses, a dedicated relationship manager and a network of resources. Amotai continues to be an important intermediary between the Link Alliance and those businesses.

Māori culture is slowly being woven into the fabric that makes up the Link Alliance. Fortnightly team briefings start and end with karakia, events like Māori Language Week and Matariki are celebrated and many people across the Link Alliance know their Pepeha. To date the greatest achievement has been the te reo Māori classes which started in March 2021. Twenty-five staff members are enrolled on the Te Whare Wananga o Awanuiarangi 30-week te reo Māori course. The course teaches language and customs, and also provides the opportunity for people to be welcomed onto a marae. Everyday use of te reo Māori is growing.

Employment

The second programme saw three young women graduate in June 2021. Two of them will be carpentry trainees and will enter apprenticeships, and the third secured a role as a health and safety assistant.

Training Career Development Plans (CDPs) have been created for the majority of the Focus Group (Mana Whenua, Māori, Pasifika, and youth) that are based at the Link Alliance Newmarket office. Creating plans for site-based workers is a little more challenging. The Link Alliance has created bespoke training for frontline leaders. Delivered by AMA Training, the course is grounded on Māori values and aims to give participants formal qualifications at the end of the programme. These include: New Zealand Certificate in Business (Introduction to Team Leadership - Level 3), or New Zealand Certificate in Business (First Line Management - Level 4).

CITY RAIL LINK LIMITED ANNUAL REPORT 2021

or Pasifika owned businesses have been awarded construction-related contracts. In addition, three Mana Whenua Māori-owned design businesses are contracted to provide the cultural design elements of the stations. The Link Alliance supports Socially Innovative Businesses and Social Enterprises and has engaged with different businesses on more than 10 occasions this year. The total accumulative spend to date of these contracts is over $10 million. The Link Alliance will continue to drive supplier diversity on the project, identifying opportunities for Māori and Pasifika businesses and supporting them throughout that journey.

Future Workforce This year, in addition to over 20 engagements with high school and tertiary groups, the Link Alliance extended its reach with the pilot of the LEARNZ virtual field trip. Rangatahi from across Aotearoa as far south as Otago were able to 'join' virtually in Link Alliance site tours and presentations to learn more about the people and careers required to deliver the CRL project.

SUSTAINABILITY

The first Link Alliance Progressive Employment Programme started in July 2020 and all six interns graduated in November with full time employment offers. Five joined the Link Alliance, with roles covering construction, surveying, risk assessment, human resources and procurement.

The Link Alliance is on track to achieving exceptional social procurement KRA targets. Sixteen Māori

Big machinery operating in the Karangahape mined tunnels 32

CITY RAIL LINK LIMITED ANNUAL REPORT 2021

Our environmental team on a volunteer day cleaning up a stream in Māngere

CRL Ltd as a Good Employer

As CRL Ltd employees are based in different offices, it is important that they regularly reconnect with colleagues from their home organisation. All employees are encouraged to attend a monthly CRL Ltd team briefing, where successes and milestones are acknowledged, and awards are presented to those who have gone above and beyond, as recognised by peers. The latest employee survey provided consistent results that reassures the CRL Ltd leadership team that the company’s engagement strategy is heading in the right direction. The survey results showed a vast majority agreed that CRL Ltd has a clear purpose, and our employees have a good understanding on how their own role contributes to the overall success of the project. CRL Ltd partnered with The Resilience Project to enhance its internal Wellbeing Programme. The Resilience Project focuses on supporting the mental health and wellbeing of employees by using evidencebased research to provide practical day-to-day strategies. A monthly Wellbeing newsletter, each one centered on different themes, shares relevant articles, stories and promotes local businesses that CRL Ltd employees can support. Wellbeing activities have included on-site mindfulness training, a financial workshop, health checks and a competitive step challenge. CRL Ltd recognises that wellbeing initiatives CITY RAIL LINK LIMITED ANNUAL REPORT 2021

help people live healthier lives and create positive working environments where individuals can thrive. In 2021, a Resilience Workshop was held to acknowledge the difficulties of Covid-19 lockdowns. CRL Ltd employees had open and honest conversations about personal experiences and responding to lockdowns. Employees worked in teams to brainstorm and discuss strategies to effectively work from home and prepare for the continued impact of Covid-19 in the year ahead. CRL Ltd’s leadership team listened to feedback, which in turn informed plans to ensure teams continue to feel connected and informed. CRL Ltd actively encourages its employees to seek relevant training to develop their skillset. CRL Ltd acknowledges it is a limited life project-based company and continuously looks to offer growth opportunities. Investing in our people strengthens our internal talent pipeline and lays a solid foundation for employee’s next career steps. It is important to retain skilled employees and attract key talent to work alongside our close-knit team. CRL Ltd is proud of its people, who continue to demonstrate the company’s core values by fronting as a united team while doing the work for the good of everyone.

CRL AS A GOOD EMPLOYER

CRL Ltd’s employees continue to maintain a clear focus on what is important for the CRL project. Around half of the company’s employees are integrated within Link Alliance to support the delivery of the main tunnels and station work. CRL Ltd employees are working collaboratively with the Link Alliance to ensure the contracts are well supported and delivered on time for future users

Bluestone wall

Heritage The project is committed to preserving and protecting culture, heritage and local character while it builds the CRL. This includes the protection of historic buildings as well as respecting and recording archaeological discoveries Bluestone wall deconstruction Work started in November 2020 to temporarily remove one of Auckland's oldest pieces of road construction in order to make room for the project. The 140-year-old bluestone wall along the eastern side of Albert Street has been shifted block by block out of the way of CRL construction. The historic wall is built from local material - basalt, also known as bluestone - and was erected on the eastern side of Albert Street between Wyndham and Victoria streets in 1881.

When the wall is re-erected, it will have moved one metre further east - towards Queen Street - from its original location. This is due to the size of the tunnel and Aotea Station. The public toilet will not re-open, however, the wrought iron railings and ornamental arch will be incorporated into a maintenance access entry required for CRL.

The wall's underground public toilet was one of the city's first. The wrought iron railings, piers and the ornamental arch over the stairs on the side of the wall are some of Auckland's last remaining examples of street furniture dating back to the Victorian age. Dismantling the wall has taken three months. Stonemasons cut it into 1,800 separate blocks, numbered each block and stored them safely off-site until the wall can be rebuilt in 2023 as part of urban realm improvements when the station tunnel box below has been built. 34

Careful deconstruction of bluestone wall underway

CITY RAIL LINK LIMITED ANNUAL REPORT 2021

The MRCB development will bring new homes, commercial and retail spaces to Aotea precinct

“City Rail Link is the foremost transformational place-shaping project in Auckland” – The Auckland Plan 2050 Investment in CRL transport infrastructure has unlocked an opportunity to develop exemplary, sustainable urban growth on public landholding around CRL stations at Aotea, Karangahape and Mt Eden. Last year, CRL Ltd delivered development options to its Sponsors as well as a value capture strategy and master plans for each station precinct. With the groundwork for oversite development laid, the project has now entered the next phase of work which is being jointly led by Eke Panuku and Kāinga Ora with assistance from CRL Ltd. This will involve community and stakeholder engagement leading to the finalisation of a development response for the station precincts, including confirmation of the delivery mechanisms and programme.

The significant opportunity offered by these development sites was reflected in the highly successful sale of the leasehold rights to the Aotea Station development opportunity to the Malaysian development company Malaysian Resources Corporation Berhad (MRCB). MRCB has announced plans to construct a major residential and commercial building on the site once the CRL is completed, which will significantly add to the vitality and amenities of the area around the station.

CRL Ltd is now actively progressing work with Auckland Council, Auckland Transport, Watercare and other utility providers to determine the capacity of the infrastructure needed to enable the development on the public landholdings around the stations.

CITY RAIL LINK LIMITED ANNUAL REPORT 2021

DEVELOPMENT OPPORTUNITIES

Development Opportunities

Thousands of Aucklanders visited our TBM during the Boring Day Out

Communications and Engagement The City Rail Link will deliver significant benefits for Aucklanders and New Zealand when it is completed People will benefit from better transport options, better places to work, live and play and from a transformed Auckland that is truly international. CRL Ltd is committed to bringing people on the journey as it works towards delivering on that promise. And it is committed to doing what it can to manage the impacts on neighbours as much as it can in a complex building environment.

Core Communication Channels

5+ social media posts per week 36

25+ stakeholder presentations

The TBM was switched on by Transport Minister Michael Wood and Auckland Mayor Phil Goff

41 media releases Whenua hui 18 Mana

120 site tours

CITY RAIL LINK LIMITED ANNUAL REPORT 2021

Anything but boring CRL Ltd and the Link Alliance created a 'not-soboring' engagement strategy around the TBM to build excitement, increase awareness, celebrate milestones and give New Zealanders a sense of ownership of their biggest-ever transport project. The mechanical star of the project has been used as a platform to engage people in the project, aligned with major progress milestones. In December 2020, 5,000 people were able to get up close and personal to the TBM at the project’s inaugural Boring Day Out event. In May 2021, the Public Relations Institute of New Zealand recognised the project for its engagement work around the TBM and awarded CRL Ltd a Bronze in the Community Relations and Engagement category at its annual awards.

Events

ENGAGEMENT

Despite the challenges of the ongoing pandemic, CRL Ltd has continued to share the project’s progress and celebrate milestones through a series of public events. In December 2020 the project held a moving dawn blessing event as it opened Te Komititanga – Auckland’s newest civic square in the heart of the city’s downtown – after more than four years of construction. In April 2021, the project celebrated the opening of Auckland’s historic Chief Post Office with Mana Whenua, industry partners, elected officials, businesses and stakeholders as it resumed its role as the ‘front door’ to the Britomart Station.

Business hardship The Business Hardship Programme (BHP) recognises that some businesses on lower Albert Street (between Victoria and Customs Streets) have experienced a greater length of disruption than originally planned for the C2 works. The Programme provided rent relief in 2020-21 for small businesses impacted by delays until C2 was completed in October 2020.

2 working days

to acknowledge enquiries

Community Liaison Group meetings

CITY RAIL LINK LIMITED ANNUAL REPORT 2021

116 videos 12

community newsletters

13 events 37

Communications photo

An art hoarding around our Mt Eden site, called “Around the Maunga”, depicts a range of stories, people and places from the local area 38

CITY RAIL LINK LIMITED ANNUAL REPORT 2021

Development response Constructing a 3.45 kilometre underground railway in the middle of a busy urban environment brings a unique set of challenges. The project has a comprehensive development response programme in place to help support businesses through construction. Through 2020-21 there has been a concentrated effort to activate areas around the construction sites to bring people into the area. In February 2021, CRL’s Mt Eden site and Auckland’s Uptown Business Association 'shared the love' with a community festival - Aroha in Uptown. The festival included free Ceroc lessons, pet photos, hearing the ‘love story’ between plants and microbes, and making a seedloveball at the community’s Organic Market Garden. It also featured live music and tours for people to visit artwork around the Mt Eden construction site. Other initiatives in the development response programme include a new business support package. It provides the tools, including advice from an independent specialist, to help people adapt their businesses during construction. Treatment of hoardings, good wayfinding and face-to-face engagement with businesses continue to be mainstays of the development response programme.

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This section of Wellesley Street is one way east bound for cars. Two way for buses

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Crowne Plaza Hotel Atrium carpark

Wellesley Centre

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Vehicle access to Crowne Plaza Hotel maintained ET

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Auckland Council

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Local access only

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SkyCity Grand Hotel

SkyCity Theatre

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Access to Bledisloe House & Civic carpark

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Grand Millennium Auckland

Auckland Town Hall E AV EN U EY S

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Te Manawa information centre

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SkyCity Casino

SkyCity carpark

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Sky Tower

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It is a key priority that the public is well informed about the project’s impacts to travel and the steps in place to mitigate the disruption. Achieving this has meant a combined effort with integrated campaigns between CRL Ltd, the Link Alliance, Auckland Council, Auckland Transport and KiwiRail. In June 2021, the Victoria Street intersection was closed for two years to enable the construction of the Aotea Station. The closure was successfully implemented following a collaborative campaign to ensure widespread understanding well in advance of the closure. The closure was preceded by the successful reopening of the neighbouring Wellesley Street intersection which had been closed since March 2020.

STR E

ENGAGEMENT

Disruption campaigns

VIC

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Use Nelson Street for northbound travel

STRE

Motorway access via Hobson Street and Nelson Street

HAM

Auckland District Court

KIN

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In February 2021, the project opened the Te Manawa visitor information centre. Te Manawa translates as 'the heart' and this is where the heart of project information can be found. The centre is a multi-sensory, tactile space accessible to all and provides an interactive way for the community to learn more about the project and Auckland’s rail history. The centre is also a multipurpose facility. It is used for school groups learning about opportunities in the infrastructure industry, hosting groups like Engineering NZ and the French Chamber of Commerce, and facilitates induction and training for CRL workers.

CITY RAIL LINK LIMITED ANNUAL REPORT 2021

The dawn blessing of Albert Street and Te Komititanga before its opening ceremony

CRL Mana Whenua Partnership A partnership between CRL Ltd and Mana Whenua has been established through the CRL Mana Whenua Forum

Paoa ki uta, Paoa ki tai, Paoa ki tua

Ngāti Maru

This partnership began in 2012. Over the years the contribution of Māori mātauranga (cultural values) from Mana Whenua has been significant and has benefited the project as a whole. The CRL Mana Whenua Forum, made up of eight Auckland iwi, provides a structure to realise the partnership between iwi Mana Whenua and CRL Ltd. The contribution of Māori mātauranga and sharing of cultural values continues to deliver better sustainability, environmental, design, health and safety outcomes.

ISC rating to align with Te Ao Māori Mahi Rauora Aratohu (guidance for the work on the health of all things) is a world-first, custom-made ISC Infrastructure Sustainability technical manual that incorporates Mana Whenua cultural values.

Link Alliance in 2019 when construction on the project’s main works began. The manual ensures that as the project drives its sustainability outcomes and measures its performance, it takes the cultural context of Aotearoa into account and uses sustainability criteria that is compatible with Te Ao Māori. This year a sustainability sub-group of the CRL Mana Whenua Forum was re-established to support and guide the Link Alliance as it gives effect to cultural criteria embedded within the technical manual. Establishing processes for Mana Whenua involvement in project decision-making, procurement, cultural monitoring and accidental discoveries protocols are some of the mahi undertaken by the sub-group.

Developed together with the CRL Mana Whenua Forum in 2016/2017, Mahi Rauora Aratohu was adopted by the

CITY RAIL LINK LIMITED ANNUAL REPORT 2021

Tane Mahutas Triumph, copyright Jane Crisp 2007

Embedding Mana Whenua cultural narratives in design From the very beginning, the Mana Whenua Forum came together to express kaitiakitanga through a holistic design process. The stories gifted by Mana Whenua shape CRL Ltd's ability to deliver a transport system that connects the city's history and its future.

Mana Whenua narratives will be expressed within each of the station’s designs by including a sky element, an earth element, and a fourth element (which separates earth and sky), as well as other integrated opportunities such as visible structures and paneling.

Aotea Station

Karangahape Station

Mt Eden Station

Te Wai Horotiu – the stream that runs

Tāne Mahuta – atua of forests and birds

Karā / basalt rock

Insects

Whau tree

Native birds

Matāoho the volcanic atua/deity who

underneath Queen Street Rongo-mā-Tane – atua of kūmara and cultivated food Matariki – the nine-star constellation in the north-eastern sky that signals the

Indigenous ngahere/forest in the area Barks and textures of trees originally

beginning of the Māori year. This is part

found in the area

of the response to Rongo-mā-Tane

Hape – Tainui ancestor who Karanga

Maramataka – calendar for planting

ā Hape is named for. He rode on the

and fishing

CITY RAIL LINK LIMITED ANNUAL REPORT 2021

MANA WHENUA

The overall theme for the project’s concept design is the Māori creation narrative of primordial parents Ranginui (sky father) and Papatūānuku (earth mother), and the emergence of Te Ao Mārama from Te Pō (the darkness) and Te Kore (the realm of potential being, the void).

resided in the crater of Maungwhau and is associated with many of the volcanic features of Tāmaki Makaurau Volcanoes and volcanic features for Maungawhau

back of a stingray which was gifted by Tangaroa to Aotearoa

The Chief Post Office at dawn during the official Te Komititanga opening ceremony

Te Komititanga The new civic square built by the Downer NZ Soletanche-Bachy JV (DSBJV) where Lower Queen Street used to sit was officially named Te Komititanga, which means ‘to mix’ or ‘to merge’ in te reo Māori. This name was gifted by Mana Whenua and was officially adopted by the Waitematā Local Board. As well as the mixing of people, the name reflects that the square’s location had been where the waters of Waitematā and Wai Horotiu, the stream that once ran into the harbour and still exists beneath Queen Street, once merged.

CITY RAIL LINK LIMITED ANNUAL REPORT 2021

Karakia at significant milestones CRL Ltd and its contractors look to Mana Whenua to inform the project when karakia should take place. Over the past year, karakia has been performed for many significant CRL events. These include dawn blessings before Te Komititanga was given back to the public in December 2020, and before the Chief Post Office once again became the main entrance to Britomart Station. Mana Whenua also led karakia and the celebration for the Dame Whina Cooper TBM unveiling in December 2020 and its launch in May 2021. Ōtāhuhu Station completion of works and the reopening of the Albert/ Wellesley street intersection were also led by Mana Whenua.

MANA WHENUA

Planting a ngahere around CRL sites Mana Whenua, together with CRL Ltd and Auckland Council's arborist, selected the species of trees planted in the upgraded urban realm around CRL sites. Native tree species are chosen that support the uses of each space and add to its narrative. Streetscape improvements as part of C1 and C2 were completed this year. This saw five mature pōhutukawa planted within Te Komititanga in Lower Queen Street, and a mix of 23 pōhutukawa, tōtara, golden tōtara and pūriri planted in Albert Street. The tree species chosen acknowledge the historic foreshore prior to reclamation and represent the ngahere that would have been present prior to settlement. There will be more opportunities to plant native trees as the streetscapes around CRL's Aotea, Karangahape and Mt Eden Station sites are reinstated.

CITY RAIL LINK LIMITED ANNUAL REPORT 2021

Pātuitanga Mana Whenua CRL Kua whakatūhia he pātuitanga i waenga i te CRL Ltd me te Mana Whenua mā te Rūnanga Mana Whenua CRL.

Paoa ki uta, Paoa ki tai, Paoa ki tua

Ngāti Maru

I tīmata tēnei pātuitanga i te tau 2012. He nui te mātauranga Māori kua tukuna e te Mana Whenua, ka mutu ko te kaupapa whānui i whai hua. He āhuatanga te Rūnanga Mana Whenua CRL, he kāhui nō ngā iwi e waru o Tāmaki Makaurau, e taea ai te whakatutuki te pātuitanga i waenga i ngā iwi Mana Whenua me te CRL Ltd. Nā runga i tā rātou whāngai haere mai i te mātauranga Māori me ngā tikanga Māori kua taea ngā putanga toitūtanga, taiao, hoahoa, hauora me te haumaru pai ake.

Me hāngai te whakatauranga ISC ki Te Ao Māori? He kaupapa whakaihuwaka te Mahi Rauora Aratohu, he aratohu hangarau Toitū Hanganga ISC tino hāngai e whakauru mai ana i ngā tikanga o te Mana Whenua.

Ko tā tēnei aratohu he whakarite ka kōkirihia e te kaupapa ngā putanga toitūtanga me te tātari i tana whakatutukitanga, ā, ka whai whakaaro ki te horopaki ahurea o Aotearoa me te whakamahi i ngā whakaritenga toitūtanga e hāngai ana ki Te Ao Māori. I tēnei tau i whakatūria anōtia he rōpū-iti nō te Rūnanga Mana Whenua CRL mō te toitūtanga hei tautoko me te ārahi i te Link Alliance mō te āhuatanga o te whakamana i ngā whakaritenga ahurea kua whakaurua atu ki te aratohu hangarau. Ko ētahi o ngā mahi ka whakahaeretia e te rōpū-iti nei ko te whakatū i ngā hātepe mō te whakauru mai i te Mana Whenua ki ngā tikanga whakatau, te whai ratonga, te tirotiro i ngā tikanga me te kawa e pā ana ki ngā tūhuratanga ohorere.

I hangaia i te taha o te Rūnanga Mana Whenua CRL i te 2016/2017, i whakamanatia te Mahi Rauora Aratohu e te Link Alliance i te tau 2019 i te tīmatanga o te wāhanga matua o te kaupapa. 44

CITY RAIL LINK LIMITED ANNUAL REPORT 2021

Tane Mahutas Triumph, copyright Jane Crisp 2007

Te whakapūmau i ngā kōrero tuku iho a te Mana Whenua ki ngā mahi hoahoa Mai i te tīmatanga, i kotahi mai te Rūnanga Mana Whenua ki te whakatinana i te kaitiakitanga mā tētahi hātepe hoahoa matawhānui. Ko ngā kōrero i takohatia mai e te Mana Whenua ka whakaawe i te kaha o City Rail Link Ltd ki te whakarato i tētahi pūnaha ikiiki e hono ana i tō tātou onamata ki tō tātou anamata.

Ka kitea ngā kōrero a te Mana Whenua i roto i ngā hoahoa o tēnā teihana, o tēnā teihana mā te whakauru mai i tētahi āhuatanga o te rangi, te whenua me te āhuatanga tuawhā (e wehe ana i te rangi me te whenua) me ētahi atu whai wāhitanga pērā i ngā hanganga me ngā pūkiore ka kitea.

Teihana o Aotea

Teihana o Karangahape

Teihana o Maungawhau

Te Wai Horotiu – ko te kōawa e rere ana

Tāne Mahuta – atua o te ngahere me

Karā

i raro o Te Tiriti o Queen

ngā manu

Rongo-mā-Tane – te atua o te kūmara

Ngārara

me ngā kai o te māra Matariki – ko te kāhui whetū ka kitea i te taha pāwhakarua o te rangi e tohu ana i te tau hou o te Māori. Kei roto tēnei i te

Ngā manu taketake Te ngahere o te takiwā Ngā kirirākau me ngā kākano o ngā rākau

urupare ki a Rongo-mā-Tāne

taketake o te rohe

Maramataka – maramataka mō te

Hape – he tipuna nō Tainui mōna te

whakatipu kai me te hī

MANA WHENUA

Ko te kaupapa whānui mō te hoahoa ariā whānui ko ngā kōrero mō te ōrokohanga o te ao a te Māori, arā mō Ranginui rāua ko Papatūānuku me te putanga ki Te Ao Mārama mai i Te Pō me Te Kore.

Rākau whau Ko te Matāoho te atua puia i noho i te pārua o Maungawhau, ā, e hono ana ia ki te maha o ngā āhuatanga puia o Tāmaki Makaurau Ngā puia me ngā āhuatanga puia mō Maungawhau

ingoa Karanga-a-Hape. Nā Tangaroa i tuku te whai ki a ia hei haerenga mai mōna ki Aotearoa

CITY RAIL LINK LIMITED ANNUAL REPORT 2021

The Chief Post Office at dawn during the official Te Komititanga opening ceremony

Te Komititanga Ko te ingoa tuatahi i tukuna o te ātea tūmatanui i hangaia e te Downer NZ Soletanche-Bachy JV (DSBJV) i te wāhi tawhito o te taha whakararo o te Tiriti o Queen ko Te Komititanga. Nā te Mana Whenua i tuku tēnei ingoa, ā, ka whakamanatia e te Poari o Waitematā. I tua atu i te komititanga o te tangata, e tohu ana tēnei ingoa i te wāhi o te ātea, ko te pātahitanga o mua tērā o ngā wai o Te Waitematā me Te Wai Horotiu, te kōawa i rere ki te whanga, ā, e rere tonu ana i raro i te Tiriti o Queen.

CITY RAIL LINK LIMITED ANNUAL REPORT 2021

Ngā karakia i ngā wā hira Ka whakawhirinaki atu a CRL Ltd ki te Mana Whenua mō āhea tū ai ngā karakia. I tēnei tau kua hipa, he maha ngā karakia i whakahaerehia mō ngā āhuatanga hira a CRL. Arā, ko ngā karakia o te atatū i mua i te whakahokinga atu o Te Komititanga ki te iwi whānui i te Tīhema 2020, ā, i mua i te whakatuwheratanga anō o te Poutāpeta Matua hei tomokanga ki te Teihana o Britomart. Nā te Mana Whenua anō i ārahi ngā karakia me te huranga o te Mīhini Kari Whenua a Kahurangi Whina Cooper i te Tīhema 2020 me te whakarewatanga i te Mei 2021. Nā te Mana Whenua anō i whakahaere te whakaotinga o ngā mahi o te Teihana o Ōtāhuhu me te whakatuwheratanga anō o te kūititanga o ngā tiriti Albert/Wellesley.

MANA WHENUA

Te whakatipu ngahere i ngā wāhi CRL Ka whiria e te Mana Whenua, i te taha o te CRL Ltd me ngā mātanga rākau, ngā momo rakau ka whakatipuhia i te ātea tāone e pae ana i ngā wāhi CRL. Ka tohua ko ngā momo rākau taketake e tautoko ana i te whakamahinga o ia wāhi me te hāpai i ōna kōrero. Ngā whakarākeitanga ki ngā tiriti i roto i Ngā Kirimana. I oti te mea 1 me te mea 2 i tēnei tau. E rima ngā pohutukawa pakeke i whakatōhia i roto i Te Komititanga i te taha whakararo o te Tiriti o Queen, me ngā rākau 23 o te pōhutukawa, tōtara, me te pūriri i te Tiriti o Albert. E tohu ana ngā momo rākau i tohua i te takutai o nehe i mua o te whakawhānuitanga o te whenua me te whakaatu i te ngahere i reira i ngā rā o nehe. Arā atu anō ngā whai wāhitanga mō te whakatipu i ngā rākau māori i te whakahokitanga atu o ngā wāhi tiriti o CRL e pae ana i ngā teihana o Aotea, Karangahape, me Maungawhau.

CITY RAIL LINK LIMITED ANNUAL REPORT 2021

Financial Statements, Notes, Governance and Remuneration Disclosures Corporate Directory

Statement of Responsibility

Statement of Financial Performance

Statement of Financial Position

Statement of Changes in Equity

Statement of Cash Flows

Notes to the Financial Statements

Governance and Remuneration Disclosures

Independent Auditor's Report

FINANCIAL REPORT

CITY RAIL LINK LIMITED ANNUAL REPORT 2021

Corporate Directory Board

Sir Brian Roche Russell Black Brian Harrison Karen Jordan Anne Urlwin

Chair

Senior Management

Sean Sweeney Caroline Beaumont Patrick Brockie Steve Brunell Elgan Davies Sumi Eratne Gerry Goodwin Victoria Jessop Rob Mair Kirsten Mayne Russell McMullan Sandip Ranchhod

Chief Executive Officer General Counsel Chief Financial Officer Programme Performance & Controls Director Assurance Manager Rail Systems Programme Delivery Director Assurance Manager Tunnels & Stations GM Corporate Relations & Communications GM Health, Safety, Environment & Sustainability Head of People & Capability GM Assurance & Integration Owner Interface Manager

Bankers

Bank of New Zealand Queen Street Auckland ANZ Albert Street Auckland

Auditor

Audit New Zealand on behalf of the Auditor-General

Registered Office

Level 2, Coffey House 25 Teed Street Newmarket Auckland 1023

Solicitors

Bell Gully Buddle Weir Chapman Tripp

CITY RAIL LINK LIMITED ANNUAL REPORT 2021

Statement of Responsibility We are responsible for the preparation of City Rail Link Limited (the Company’s) financial statements and statement of performance, and for the judgements made in them. We are responsible for any end of year performance information provided by the Company under section 19A of the Public Finance Act 1989. We have the responsibility for establishing and maintaining a system of internal control designed to provide reasonable assurance as to the integrity and reliability of financial reporting. In our opinion, these financial statements and statement of performance fairly reflect the financial position and operations of the Company for the year ended 30 June 2021.

Sir Brian Roche KNZM Chair

Anne Urlwin Director

21 September 2021

FINANCIAL REPORT

CITY RAIL LINK LIMITED ANNUAL REPORT 2021

Statement of Financial Performance for the year ended 30 June 2021 Actual 2021 $(000)

Actual 2020 $(000)

Rental revenue

123

276

Interest revenue

472

1,566

Other revenue

2,503

112

Total revenue

3,098

1,954

3,171

3,598

Professional services

571

486

IT expenses

125

183

14,111

35,530

484

24,459

General expenses

3,971

3,051

Insurance expenses

8,682

4,314

(97)

233

2, 3

5,728

3,764

Vested asset expense

43,910

39,435

Impairment expenses

2,181

Total expenditure

83,001

114,956

Deficit for the year

(79,903)

(113,002)

(79,903)

(113,002)

Note Revenue

Expenses Employment expenses

Third party works

12b

1.8

Capital expenditure write-offs

Credit losses and allowances Lease payments Depreciation and amortisation expenses

Other comprehensive revenue and expense Total comprehensive revenue and expense for the year

This statement is to be read in conjunction with the notes to the financial statements. Refer to note 16 on page 71 for comparatives to budget. 52

CITY RAIL LINK LIMITED ANNUAL REPORT 2021

Statement of Financial Position as at 30 June 2021

Note

Actual 2021 $(000)

Actual 2020 $(000)

Cash and cash equivalents

18,374

41,962

Trade and other receivables

9,319

14,187

Assets held for transfer

174,612

FX hedging - receivables

374

8,292

7,232

210,971

63,381

Assets

Prepayments Total current assets Capital work in progress

1,511,844

927,374

FX hedging - receivables

126

Prepayments

24,555

31,709

Property, plant and equipment

130,415

134,105

Intangibles

189

338

Total non-current assets

1,667,129

1,093,526

Total assets

1,878,100

1,156,907

Liabilities 7

69,867

58,921

Current employee entitlements

903

1,138

374

7, 12

146

71,175

60,205

126

71,301

60,205

1,806,799

1,096,702

2,058,280

1,268,280

(251,481)

(171,578)

1,806,799

1,096,702

FX derivative liability Related party payables Total current liabilities FX derivative liability

Total non-current liabilities Total liabilities Net assets

FINANCIAL REPORT

Accounts payable and accruals

Equity Contributed capital Retained earnings Total equity

This statement is to be read in conjunction with the notes to the financial statements. Refer to note 16 on page 71 for comparatives to budget. CITY RAIL LINK LIMITED ANNUAL REPORT 2021

Statement of Changes in Equity for the year ended 30 June 2021

Retained earnings $(000)

Contributed capital $(000) Note 17

(171,578)

1,268,280

1,096,702

(79,903)

790,000

Balance at 30 June 2021

(251,481)

2,058,280

1,806,799

Balance at 30 June 2019

(58,576)

752,280

693,704

(113,002)

516,000

(171,578)

1,268,280

1,096,702

Balance at 30 June 2020 Total comprehensive revenue and expense for the year

Total $(000)

Owner transactions: Funding received for B class share issues

Total comprehensive revenue and expense for the year Owner transactions: Funding received for B class share issues Balance at 30 June 2020

This statement is to be read in conjunction with the notes to the financial statements. Refer to note 16 on page 71 for comparatives to budget. 54

CITY RAIL LINK LIMITED ANNUAL REPORT 2021

Statement of Cash Flows for the year ended 30 June 2021

Actual 2021 $(000)

Actual 2020 $(000)

105

507

(39,818)

(92,062)

472

1,545

(39,241)

(90,010)

(774,011)

(380,525)

Acquisition of property, plant and equipment

(232)

(8,650)

Acquisition of intangibles

(104)

(89)

(774,347)

(389,264)

790,000

516,000

Net cash from financing activities

790,000

516,000

Net (decrease)/increase

(23,588)

36,726

Opening cash and cash equivalents

41,962

5,236

Closing cash

18,374

41,962

18,374

41,962

18,374

41,962

Note Cash flows from operating activities Cash received from customers Cash paid to suppliers and employees Interest received Net cash from operating activities Cash flows from investing activities Acquisition of capital work in progress

Net cash from investing activities Cash flows from financing activities Proceeds from issue of contributed capital

Made up of Bank balances Total cash

FINANCIAL REPORT

This statement is to be read in conjunction with the notes to the financial statements. Refer to note 16 on page 71 for comparatives to budget. CITY RAIL LINK LIMITED ANNUAL REPORT 2021

Notes to the Financial Statements 1. Statement of accounting policies 1.1 Reporting entity City Rail Link Limited (the ‘Company’ or 'CRL Ltd') is a Crown Entity, registered under schedule 4A of the Public Finance Act and is domiciled in New Zealand. The Company was incorporated on 13 April 2017. The Company is owned by the Crown (51 per cent shareholder through the Minister of Transport and Minister of Finance) and Auckland Council (49 per cent). The Company’s purpose is to govern and manage the delivery of the City Rail Link project. CRL Ltd commenced operations with effect from 1 July 2017. The financial statements of the Company are for the year ended 30 June 2021. These financial statements were authorised by the CRL Ltd Board on the date specified on page 51.

1.2 Basis of preparation The financial statements have been prepared on a going concern basis and the accounting policies have been applied consistently throughout the year. The financial statements of the Company have been prepared in accordance with the requirements of the Crown Entities Act 2004, which includes the requirement to comply with generally accepted accounting practice in New Zealand (NZ GAAP) and the Companies Act 1993. The Company is a Public Benefit Entity (PBE) for financial reporting purposes and reports under Tier 1 PBE standards. The financial statements are presented in New Zealand Dollars ($000), which is the Company’s functional currency and have been prepared on an accrual and historical cost basis.

1.3 Standards issued, not yet effective and not early adopted The standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Company's financial statements are unlikely to have an impact on the Company's financial position, performance, and/or disclosures.

Amendment to PBE IPSAS 2 Cash flow statement An amendment to PBE IPSAS 2 requires entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes. This amendment is effective for 56

the year ending 30 June 2022, with early application permitted. This amendment will result in additional disclosures. CRL Ltd does not intend to early adopt the amendment.

PBE IPSAS 41 Financial instruments PBE IPSAS 41 Financial Instruments was issued in March 2019. This standard supersedes PBE IFRS 9 Financial Instruments, which was issued as an interim standard. It is effective for reporting periods beginning on or after 1 January 2022. CRL Ltd has assessed the effect of the new standard and it does not expect any significant changes as the requirements are similar to PBE IFRS 9. PBE IPSAS 41 Amendment was issued in February 2020. These amendments are in relation to PBE Interest Rate Benchmark reform. CRL Ltd has chosen not to early adopt PBE IPSAS 41. There are no significant changes expected upon adoption in January 2022.

PBE FRS 48 Service Performance Reporting PBE FRS 48 replaces the service performance reporting requirements of PBE IPSAS 1 and is effective for reporting periods beginning on or after 1 January 2022. CRL Ltd has assessed the effect of the new standard and it does not expect any significant changes.

1.4 Cash and cash equivalents Cash comprises cash at bank and short-term deposits with a maturity of three months or less.

1.5 Financial instruments A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Acting on behalf of the Link Alliance OAPs (for the C3/5/7 works per the Project Alliance Agreement and the Project Alliance Agreement Variation), CRL Ltd has entered into foreign exchange forward contracts to hedge payment obligations for the import of key plant and services (foreign currency exposures are predominately in EUR, AUD and USD). CRL Ltd is not taking direct foreign exchange exposure but is acting as an intermediary between the Link Alliance and the bank in order to facilitate hedging of these exposures. CRL Ltd recognises the foreign exchange forward transactions at fair value on the day they are entered into with the bank with an equivalent contra transaction recognised with Link Alliance at the same time. CRL Ltd are invoiced by Link Alliance in foreign currency for all settlements in order to fully clear the foreign currency on settlement. Link Alliance is CRL Ltd's counterparty in these transactions and remains CRL Ltd's counterparty for the C3/5/7 works. Overseas payment

obligations incurred by the Link Alliance for the C3/5/7 works are required to be fully settled by CRL Ltd and hence there is no additional credit exposure for CRL Ltd. CRL Ltd does not enter into derivatives for trading or speculative purposes. The derivatives are presented as current assets and liabilities to the extent they are expected to be settled within 12 months after the end of the reporting period.

Financial assets Financial assets were initially recognised at fair value. Trade and other receivables are usually received within 30 days of recognition. CRL Ltd actively manages unpaid debtors beyond 30 days. After initial measurement, such financial assets are subsequently measured at amount due less an allowance for credit losses. Derivative financial instrument assets are initially recognised at fair value on the day they are entered into. Subsequent to initial recognition, derivatives are remeasured to fair value with the resulting gain or loss recognised in surplus or deficit.

Financial liabilities Financial liabilities are classified as payables. The Company's financial liabilities include trade and other payables. Trade and other payables are unsecured and are usually paid within 30 days of recognition. Due to their shortterm nature they are not discounted. A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires. Derivative financial instrument liabilities are initially recognised at fair value and remeasured to fair value at each reporting date with the resulting gain or loss recognised in surplus or deficit. CRL Ltd's derivative financial instrument assets are equivalent (equal and opposite) to CRL Ltd's derivative financial instrument liabilities.

1.6 Capital work in progress (WIP)

CRL Ltd also capitalises a portion of the overhead costs that is deemed to be required to support the construction of the actual physical works. This allocation of cost is reviewed regularly to ensure the method adopted remains appropriate for the stage of the project. When separable assets within the project are completed there is an agreed handover procedure to the new recipient of the asset. The asset is then removed from CRL Ltd's WIP and vested to the new owner.

1.7 Assets held for transfer An asset is classified as held for transfer if it has been handed over to the receiving party for operational use and is still awaiting formal sign-off and acceptance as per the asset transfer process with individual receiving parties. The asset is measured at the lower of cost or net realisable value. An asset is not depreciated or amortised while classified as held for transfer. The asset transfer will be completed within 12 months of being classified as 'held for transfer'.

1.8 Third party works In the 2021 financial year CRL Ltd funded work undertaken by KiwiRail Holdings Limited (KiwiRail), on the KiwiRail network at Ōtāhuhu, Mt Eden, Newmarket and Britomart East. As part of the overall project, CRL Ltd will undertake or fund construction work, such as that at Ōtāhuhu, Mt Eden, Newmarket and Britomart East, across the wider Auckland rail network. This will enable the network to manage the larger volumes of rail passengers arising from the completion of the project. The nature of the work done, and the ownership of the assets constructed, means that they do not form part of the CRL Ltd assets, in accordance with NZ GAAP.

1.9 Third party funding CRL Ltd receives additional funding from third parties (including the Sponsors and potentially related parties) for the construction of agreed specific works that are in addition to existing scope. The third party funding is used to reimburse CRL Ltd for the works so that CRL Ltd is kept financially neutral. In facilitating these works CRL Ltd is effectively acting in an agency capacity.

1.10 General expenses General expenses includes costs such as operating leases, rates, Directors' fees, telecommunications and other office operating costs.

1.11 Property, plant and equipment Property, plant and equipment consist of land, buildings, temporary buildings, subterranean land, furniture and fittings, computer hardware and office equipment.

Recognition and measurement Property, plant and equipment is measured initially at cost. Cost includes expenditure that is directly attributable to the acquisition of the items. The cost of an item of property plant and equipment is recognised only when it is probable that future economic benefit or service potential 57

NOTES TO THE FINANCIAL STATEMENTS

CRL Ltd capitalises those costs directly attributable to the construction of the project. These are captured under 'Capital work in progress' in note four below.

Where an asset is identified for handover, the process for this transfer is advanced and expected to complete, CRL Ltd will report this separately under 'Assets held for transfer'.

associated with the item will flow to the Company, and the item’s cost can be measured reliably. The majority of capital expenditure will remain as 'Capital work in progress' for the duration of the project.

Subsequent expenditure Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the entity. Repairs and maintenance costs are recognised as expenditure as incurred.

Depreciation Land, buildings and subterranean land held for the development of rail tunnels and stations are not depreciated. All other assets (including temporary buildings constructed) are depreciated on a straight-line basis over the useful life of the asset. Depreciation is charged at rates calculated to allocate the cost or valuation of the asset less any estimated residual value over its remaining useful life. The estimated useful lives of buildings, property, plant and equipment are as follows: Land and buildings Temporary buildings Subterranean land Furniture and fittings Office equipment Computer hardware

Not depreciated 4 years Not depreciated 5 years 5 years 5 years

The assets' residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at each financial year end.

Derecognition An item of property, plant and equipment is derecognised upon disposal, demolition or when no further future economic benefits or service potential are expected from its use or disposal. Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These are included in surplus or deficit.

Impairment of non-cash generating assets For non-financial, non-cash-generating assets, CRL Ltd assesses at each reporting date whether there is an indication that a non-cash-generating asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, CRL Ltd estimates the asset’s recoverable service amount. An asset’s recoverable service amount is the higher of the non-cash-generating asset’s fair value less costs to sell and its value in use. Where the carrying amount of an asset exceeds its recoverable service amount, the asset is considered 58

impaired and is written down to its recoverable service amount. In assessing value in use, CRL Ltd has adopted the depreciation replacement cost approach. Under this approach, the present value of the remaining service potential of an asset is determined as the depreciated replacement cost of the asset. The depreciated replacement cost is measured as the reproduction or replacement cost of the asset, whichever is lower, less accumulated depreciation calculated on the basis of such cost, to reflect the already consumed or expired service potential of the asset. In determining fair value less costs to sell, the price of the asset in a binding agreement in an arm's length transaction, adjusted for incremental costs that would be directly attributed to the disposal of the asset, is used. If there is no binding agreement, but the asset is traded on an active market, fair value less cost to sell is the asset's market price less cost of disposal. If there is no binding sale agreement or active market for an asset, CRL Ltd determines fair value less cost to sell based on the best available information. Impairment losses are recognised immediately in surplus or deficit. For each asset, an assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, CRL Ltd estimates the asset's recoverable service amount. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable service amount since the last impairment loss was recognised. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable service amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such a reversal is recognised in surplus or deficit.

1.12 Intangible assets Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses. The Company has no internally generated intangible assets. The useful lives of intangible assets are assessed as finite. Intangible assets with finite lives are amortised over their useful economic lives and assessed for impairment whenever there is an indication that the intangible assets may be impaired. The amortisation period and the amortisation method for

an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits or service potential embodied in the asset are considered to modify the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in surplus or deficit. Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in surplus or deficit when the asset is derecognised.

Software The Company holds several computer software packages for internal use, including purchased software. Purchased software is recognised and measured at the cost incurred to acquire the software. A summary of the policies applied to the Company’s intangible assets is as follows: Intangible asset Software

Useful life 5 years

Amortisation method Straight-line basis

1.13 Leases The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement at inception date. The substance of the arrangement depends on whether the fulfilment of the arrangement is dependent on the use of a specific asset or assets or the arrangement conveys a right to use the asset, even if that right is not explicitly specified in an arrangement.

Company as a lessee Operating leases are leases that do not transfer substantially all the risks and benefits incidental to ownership of the leased items to the Company. Operating lease payments are recognised as an operating expense in surplus or deficit on a straight-line basis over the lease term.

Rent received from an operating lease is recognised as income on a straight-line basis over the lease term. Contingent rents are recognised as revenue in the periods in which they are earned.

1.14 Employee benefits Liabilities for wages and salaries (including non-monetary benefits) and annual leave are recognised in surplus or deficit during the periods in which the employees rendered the related services, and are generally expected

1.15 Equity Equity is made up of accumulated comprehensive revenue and expense, and contributed capital. Accumulated comprehensive revenue and expense is the Company’s accumulated surplus or deficit since the formation of the Company. Contributed capital represents the transfer of project costs based on a Settlement Agreement between the Crown and Auckland Council as well as shares issued to the shareholders, the Crown and the Auckland Council for funding of the project. 1,000 Ordinary shares were issued for the contributed capital with B Class shares being issued for funding. Each funding share represents one New Zealand dollar.

1.16 Revenue Revenue is recognised to the extent that it is probable that the economic benefit will flow to the Company and revenue can be reliably measured. Revenue is measured at the fair value of the consideration received. The following specific recognition criteria must be met before revenue is recognised.

Rental revenue Rental revenue arising from operating leases on investment properties is accounted for on a straight-line basis over the lease term and is included in revenue in the statement of financial performance due to its operating nature. Outstanding customer receivables are monitored monthly and balances >30 days are followed up for recovery. As at 30 June 2021, there were no property debtors with outstanding balances (2020: 5). No provision for credit losses or allowances have been accounted for as a result.

Interest revenue Interest is received on the cash held at bank and short-term deposits maturing within less than three months. Interest income is included in revenue in the statement of financial performance.

1.17 Tax CRL Ltd is a Public Entity in accordance with the Income Tax Act 2007 and consequently is exempt from the payment of income tax. Accordingly, no provision has been made for income tax. Items in the financial statements are presented exclusive of GST, except for receivables and payables which are presented on a GST inclusive basis. 59

NOTES TO THE FINANCIAL STATEMENTS

Company as a lessor

to be settled within 12 months of the reporting date. The liabilities for these short-term benefits are measured at the amounts expected to be paid when the liabilities are settled. Expenses for sick leave are recognised when the leave is taken and are measured at the rates paid.

Where GST is not recoverable as input tax, it is recognised as part of the related asset or expense. The net amount of GST recoverable from the IRD is included as part of receivables in the statement of financial position.

iv. Useful lives and residual values The useful lives and residual values of assets are assessed using the following indicators to inform potential future use and value from disposal:

The net GST paid to, or received from, the IRD, including the GST relating to investing and financing activities, is classified as a net operating cash flow in the statement of cash flows.

• The condition of the asset based on the assessment of experts employed by the Company

Commitments and contingencies are disclosed exclusive of GST.

• Changes in the market in relation to the asset

1.18 Significant accounting judgements, estimates and assumptions The preparation of the Company’s financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenue, expenses, assets and liabilities, the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amounts of assets or liabilities affected in future periods. i. Judgements In the process of applying the Company’s accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognised in the financial statements: ii. Operating lease commitments – Company as lessor The Company has entered into commercial and rental property leases on its property portfolio. The Company has determined, based on an evaluation of the terms and conditions of the arrangements, such as a lease term not constituting a substantial portion of the economic life of a property, that it retains all the significant risks and rewards of ownership of these properties and accounts for the contracts as operating leases. The bulk of these properties have been demolished in preparation for the new stations being constructed on these sites. iii. Estimates and assumptions The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, which have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising beyond the control of the Company. Such changes are reflected in the assumptions when they occur. 60

• The nature of the asset and its susceptibility and adaptability to changes in technology and processes • The estimated useful lives of the asset classes held by the Company are listed in notes 1.10 and 1.11 v. Covid-19 There were a number of Covid-19 Alert Level announcements by the New Zealand Government over the course of the 2020-21 financial year. The Alert Levels ranged from Level 1, 2 and 3, in some cases were specifically applicable to the Auckland area and therefore were directly relevant to the work of the CRL project.

Contract types CRL Ltd has entered into three types of contracts that are subject to Covid-19 claims and each form of contract has been reviewed for Covid-19 cost impact: i. Construct Contracts (per NZS3910 form of contract) for C1, C2 and C8 Ōtāhuhu Station Works; ii. Cost reimbursable in the form of Funding Agreements with KiwiRail Holdings Limited for C8 Ōtāhuhu Track Works and C5 Mt Eden Single Line Enabling Works (MESLEW); and iii. Project Alliance Agreement (PAA) with Link Alliance for C3. At 30 June 2021 CRL Ltd has paid Covid-19 related claims totalling $2.22m (excluding GST) across the C1, C2, C8 station works and C5 MESLEW contracts. These are based on assessments by the engineer to the contract. The claims received and paid are contract variations for extension of time and costs caused by the change in law and per the terms of NZS3910 Conditions of contract for building and civil engineering construction which is the standard form of contract used in the New Zealand construction market. All claims paid under NZS3910 contracts are assessed and capitalised or expensed based on the nature of the work performed and including but not limited to, if the cost is directly attributable to the construction and completion of that asset. CRL Ltd's cost reimbursable contracts are currently the form of contract used for work performed by KiwiRail. All work undertaken by KiwiRail is treated as third party works and is expensed in the year they are incurred.

CRL Ltd has not paid any Covid-19 claims to Link Alliance in the financial year ended 30 June 2021. High level indications of costs incurred by Link Alliance have been received but they have not yet been substantiated with adequate supporting information to allow a provision to be made for these costs in the FY2021 accounts. Notwithstanding the full cost impact of Covid-19 is yet to be finally determined across CRL Ltd's construction contracts, at this stage the expectation is that such costs will be able to be accommodated within the existing project

budget. The claims not yet received will represent costs incurred in CRL Ltd's financial statements for 2021/22. CRL Ltd expects to incur further Covid-19 costs (for example delays related to access to skilled workers from offshore) which are not able to be quantified at this stage. The assessment of the impact of Covid-19 on CRL Ltd's 'Statement of Financial Performance' and 'Statement of Financial Position' is set out below based on information available at the time of preparing the financial statements.

Financial Statements

Covid-19 Assessment

Rental revenue

There has been no material impact on rental revenues due to Covid-19. The rental revenue budget for 2020-21 is materially lower due to demolition of the majority of the buildings purchased.

Trade receivables

CRL Ltd has reviewed trade receivables and does not expect any credit losses resulting from Covid-19. The majority of trade receivables consist of GST refunds.

Property, plant

Plant and equipment are stated at historical cost less depreciation and impairment. CRL Ltd has

and equipment

completed an impairment assessment and concluded that no impairment is required. This is supported by updated land valuations obtained late 2020. Property is valued at historical cost and consists largely of land values.

Capital work

CRL Ltd capitalises those costs directly attributable to the construction of the project including

in progress

payments to contractors for construction works, resource consents and compliance requirements. CRL Ltd has completed a review of these costs and concluded that no impairment is required. Capital work in progress is measured at lower of cost or net realisable value.

Third party works

These are works in progress by KiwiRail. All Covid-19 related costs are included in these third party works costs. CRL Ltd has completed a review of these costs and concluded that no impairment is required.

Proceeds from issue

The Crown and Auckland Council (the “Sponsors”) provide all funding for the project. The Crown

of contributed capital

has made appropriation for funding for 2021/22 (per Vote Transport). Auckland Council has budgeted the required funding for CRL Ltd in 2021/22. The Sponsors remain committed to meet all currently forecast funding requirements of the project until project completion.

vii. Asset transfers As CRL Ltd completes certain contracts it may transfer separable assets (including assets related to a number of utility services) from CRL to the Sponsors or their subsidiaries as those assets are commissioned for use. However, the ownership of the majority of CRL Ltd's key assets will stay with CRL Ltd until the completion of the project. Therefore, they will remain as CRL Ltd Capital work in progress until that time. Per PBE IPSAS 37 Joint Arrangements, CRL Ltd continues to be classified as a joint venture (as opposed to joint operation) by the Sponsors as the ultimate ownership of the CRL assets is yet to be determined. Any separable assets transferred prior to project completion will transfer without compensation and hence will be treated as a vested asset in the period in which the asset transfer occurs. CRL Ltd will recognise a vested asset expense on transfer of the asset.

NOTES TO THE FINANCIAL STATEMENTS

vi. Business Hardship Programme The Business Hardship Programme (BHP) was launched in December 2019. The programme was set up to provide assistance to small retail businesses that were directly impacted by the delay to completion of the C2 contract works within the Albert Street Impact Zone (between the Victoria and Customs Street intersections). The C2 works completed in October 2020.

2. Property, plant and equipment 30 June 2021

Subterranean

Land and

Temporary

Furniture

Office

land

buildings

and fittings

equipment

Cost

$(000)

Balance at 1 July 2020

13,282

117,098

13,580

164

480

144,604

2,037

533

597

(751)

(9)

(760)

13,064

117,143

15,617

166

488

146,478

Balance at 1 July 2020

10,185

223

10,499

Depreciation for the year

5,432

5,564

Disposals and demolitions

Balance at 30 June 2021

15,617

127

319

16,063

13,064

117,143

169

130,415

Subterranean

Land and

Temporary

Furniture

Office

Total

land

buildings

and fittings

equipment

$(000)

4,465

141,102

13,580

601

517

160,265

(24)

(97)

(116)

8,841

8,857

(23,907)

(437)

(58)

(24,402)

13,282

117,098

13,580

164

480

144,604

Balance at 1 July 2019

6,790

228

141

7,159

Depreciation for the year

3,395

101

3,567

Disposals and demolitions

(208)

(19)

(227)

Balance at 30 June 2020

10,185

223

10,499

13,282

117,098

3,395

257

134,105

Transferred/reclassified assets Additions Disposals and demolitions Balance at 30 June 2021

Total

Depreciation

Net book value at 30 June 2021

30 June 2020 Cost Balance at 1 July 2019 Transferred/reclassified assets Additions Disposals and demolitions Balance at 30 June 2020 Depreciation

Net book value at 30 June 2020

Land and buildings disposals in 2019/20 include the impact of building demolitions. These demolitions were required to allow Link Alliance works to commence, particularly at Mt Eden. There are no items of property, plant and equipment (PPE) where title has been restricted or that have been used for security against liabilities.

3. Intangibles Software

30 June 2021

30 June 2020

$(000)

817

1,237

Additions

Disposals

(420)

832

817

Balance at 1 July

479

416

Amortisation for the year

164

199

(136)

Balance at 30 June

643

479

Net book value at 30 June

189

338

30 June 2021

30 June 2020

$(000)

Balance at 1 July

954,470

580,591

Vested assets

(43,910)

(39,435)

(174,612)

(2,037)

807,210

413,314

1,541,121

954,470

27,096

2,181

29,277

27,096

1,511,844

927,374

Cost Balance at 1 July

Balance at 30 June Amortisation

Disposals

There are no intangible assets where title is restricted or pledged as security for liabilities.

4. Capital work in progress Capital work in progress is measured at the lower of cost or net realisable value. Cost

Assets held for transfer Transfers to PPE Additions Balance at 30 June Impairment Balance at 1 July Impairment for the year Balance at 30 June Net book value at 30 June

NOTES TO THE FINANCIAL STATEMENTS

Capital work in progress costs include payments to contractors for the actual construction works, resource consents, compliance requirements and costs incurred in the design, procurement and supervision of the works. CRL Ltd also capitalises a portion of the overhead costs that it deems is required to support the construction of the actual physical works. Examples of these overhead costs include CRL Ltd staff costs and operating costs such as rent and utilities. For 2021 the total value of overhead costs capitalised is $9.8m (2020: $10.3m). CRL Ltd reviews its capital work in progress bi-annually to identify any impairment of the carrying value of its assets. Vested assets refer to those assets transferred to the Sponsors on contract completion (see note 1.17 (vii)). Two assets were transferred to Auckland Council during FY21. They consisted of balance of C2 (C2 SP2 transferred in FY20), and C8 Ōtāhuhu Station Works. Assets held for transfer include C1 SP3 (Chief Post Office and Britomart Station restoration) and C1 SP5 (Urban Realm). We expect to vest these assets within FY22. 63

5. Cash and cash equivalents Cash comprises cash at bank and short-term deposits with a maturity of three months or less.

Cash at bank

30 June 2021

30 June 2020

$(000)

18,374

4,462

37,500

18,374

41,962

Short-term deposits Total

Cash at bank earns interest at floating rates based on daily bank deposit rates. Short-term deposits are made for varying periods of between one day and three months, depending on the immediate cash requirements of the Company and earn interest at the respective short-term deposit rates. Deposits are placed with Bank of New Zealand and/or ANZ Bank New Zealand Limited. Both banks have AA- long-term credit ratings from Standard & Poor's rating agency. While cash and cash equivalents at 30 June 2021 are subject to the expected credit loss requirements of PBE IFRS 9, no loss allowance has been recognised because the estimated loss allowance for credit losses is trivial.

Reconciliation of operating surplus with net cash from operating activities 30 June 2021

30 June 2020

$(000)

(79,903)

(113,002)

5,728

3,764

(3,370)

(97)

(21)

484

24,459

43,910

39,435

2,181

(Increase) in accounts receivable, prepayments and other assets

(2,964)

(44,691)

(Decrease) in accounts payable, accruals and other liabilities

(5,307)

143

(39,241)

(90,010)

Surplus/(deficit) for the year Adjustments for: Depreciation and amortisation Increase in provisions Interest accrued (not received) Write-off on property, plant and equipment Vested asset transfer Impairment of Capital work in progress Working capital movements:

Cash generated from operating activities

6. Trade and other receivables Short-term receivables are recorded at the amount due, less an allowance for credit losses. CRL Ltd applies the simplified expected credit loss model of recognising lifetime expected credit losses for receivables. In measuring expected credit losses, short-term receivables have been assessed on a collective basis as they possess shared credit risk characteristics. These have been grouped based on the days past due. Short-term receivables are written off when there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include the debtor being in liquidation.

Current Trade receivables GST receivable Sundry receivables Prepayments

30 June 2021

30 June 2020

$(000)

898

5,906

8,389

8,260

8,292

7,232

17,611

21,419

24,555

31,709

42,166

53,128

Non-Current Prepayments

As at 30 June, the aging analysis of trade receivables was: $(000)

$(000)

0 - 30 days

30 - 60 days

60 - 90 days

>90 days

Trade receivables 30 June 2021

895

Trade receivables 30 June 2020

5,894

There have been no changes in the estimation techniques or significant assumptions used in measuring the loss allowance during the reporting period. Related party receivables relate to reimbursable expenses as agreed by contract with Auckland Council as per normal arm's length transactions. Prepayments relates to insurance premiums paid in advance for the works undertaken by Link Alliance over the estimated life of the works and are recognised as both current and non-current assets. The insurance provides for contract works, public liability and professional indemnity insurance.

7. Accounts payable and accruals Accounts payable and accruals represent liabilities of goods and services provided to the entity that have not been paid at the end of the financial year. Accounts payable and accruals are classified as other liabilities and are measured at amortised cost. Note

Related parties payables Sundry payables and accruals

30 June 2020

$(000)

2,718

2,713

146

67,149

56,208

69,898

59,067

Terms and conditions of the above financial liabilities: •

Trade payables are non-interest bearing and are normally settled on the 20th of the month following

•

Related party payables mainly relate to accruals for Land & Property Specialist Services and printing services procured from Auckland Council

•

Sundry payables and accruals are non-interest bearing and have an average term of three months

NOTES TO THE FINANCIAL STATEMENTS

Trade payables

30 June 2021

8. Employee entitlements 30 June 2021

30 June 2020

$(000)

Annual leave

764

551

Accrued salaries and wages

139

587

903

1,138

9. Commitments and contingencies Operating lease commitments - Company as a lessee The Company has entered into commercial leases. These leases have an average life of between three and five years, with renewal options included in the contracts. There are no restrictions placed upon the Company by entering into these leases. Future minimum rentals payable under non-cancellable operating leases as at 30 June are, as follows:

Less than one year One to five years More than five years

30 June 2021

30 June 2020

$(000)

996

1,046

2,566

3,608

3,562

4,654

Operating lease commitments - Company as a lessor The Company has entered into commercial and rental property leases on its property portfolio consisting of the Company's buildings. These non-cancellable leases have remaining terms of between one and three years. Each lease includes a clause to enable upward revision of the rental charge on an annual basis according to prevailing market conditions. Future minimum rentals receivable under non-cancellable operating leases as at 30 June are as follows:

Less than one year One to five years More than five years

30 June 2021

30 June 2020

$(000)

119

106

198

150

317

Commitments As of 30 June 2021, the Company had commitments of $1.676b (2020: $1.598b) relating to the project (in relation to capital work in progress). The increase in commitments primarily reflects the execution of the PAA Variation Agreement with Link Alliance.

Contingencies As of 30 June 2021, CRL Ltd is a party to various claims and sundry disputes. Where it has been assessed that the likelihood of having to make a payment meets the recognition criteria for a provision, this has been included in the financial statements (2020: $Nil). As of 30 June 2021 there were three claims before the courts for which CRL Ltd is a directly or indirectly involved party. These include (i) Auckland Council v Samson Corporation Limited appeal of a Land Value Tribunal (LVT) decision on the level of compensation relating to subterranean access rights for the CRL tunnel construction; and (ii) YMCA North Incorporation v Auckland Council claim with LVT in relation to compensation for subterranean access rights for the CRL tunnel construction; (iii) Wilson Parking Ltd PWA compensation claim relating to the CRL works in the vicinity of Durham Street, Auckland. There is the likelihood of additional claims for Covid-19 costs. We anticipate settlement of the current claims in the 2021/2022 financial year but this may extend beyond this timeframe subject to future Covid-19 impacts including the Level 4 lockdown that commenced on 17 August 2021. The expectation is that such costs will be able to be accommodated within the existing project budget. 66

10. Financial assets and liabilities and financial risk management The table below summarises the maturity profile of the Company's financial liabilities which show the timing of the cash outflows and the maturity profiles of financial assets held by the Company which are readily saleable or expected to generate cash inflows to meet the cash outflows of the financial liabilities. The amounts disclosed are undiscounted contractual cashflow. 30 June 2021

30 June 2020

$(000)

18,374

41,962

9,222

13,159

27,596

55,121

69,898

59,067

69,898

59,067

Financial assets (at amortised cost) Cash Receivables

Financial liabilities (at amortised cost) Financial liabilities

Carrying amount

On demand

Less than six months

Six to twelve months

Total contractual cashflows

Non derivative financial assets

$(000)

Cash

18,374

9,222

5,288

3,934

9,222

27,596

18,374

5,288

3,934

27,596

Financial liabilities at amortised cost

69,898

Total non derivative financial liabilities

69,898

Net contractual cashflows

(42,302)

18,374

(64,610)

3,934

(42,302)

30 June 2020

Carrying amount

On demand

Less than six months

Six to twelve months

Total contractual cashflows

Non derivative financial assets

$(000)

Cash

41,962

4,462

37,500

41,962

Receivables

13,159

8,925

4,234

13,159

Total non derivative financial assets

55,121

4,462

46,425

4,234

55,121

Financial liabilities at amortised cost

59,067

Total non derivative financial liabilities

59,067

Net contractual cashflows

(3,946)

4,462

(12,642)

4,234

(3,946)

30 June 2021

Receivables Total non derivative financial assets Non derivative financial liabilities

NOTES TO THE FINANCIAL STATEMENTS

Non derivative financial liabilities

The Company’s risk management policies identify and analyse the risks faced by the Company and set appropriate risk levels and controls to monitor those risks.

Market risk Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: currency risk, interest rate risk and other price risk.

ii. Credit risk Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party, by failing to discharge an obligation. The Company is mainly exposed to credit risk from its financial assets, and the maximum exposure to credit risk at balance date is represented by the total amount of financial assets in the statement of financial position: • Cash and cash equivalents • Trade receivables The Company manages credit risk by analysing the credit worthiness of its customers, including external ratings if available. Deposits are placed with Bank of New Zealand and/or ANZ Bank New Zealand Limited, both with long-term AA- credit ratings by Standard & Poor's rating agency. Foreign exchange transactions are undertaken with financial institutions with a minimum long-term AA- credit rating by Standard & Poor’s rating agency. iii. Liquidity risk Liquidity risk is the risk that the Company will have difficulty meeting the obligations associated with its financial liabilities. CRL Ltd’s approach to managing liquidity is to ensure that it has sufficient liquidity to meet its liabilities when they are due. Funding will be made available upon request in a prescribed format from the shareholders of the Company and therefore the Company has no significant exposure to liquidity risk. The Company does not expect liquidity risk in regard to foreign exchange transactions as these are funding obligations the Company incurs and forecasts for as part of meeting expected project costs. Contractual maturity analysis of derivative financial liabilities The table below analyses derivative financial instrument liabilities that are all gross settled derivatives into their relevant maturity groupings based on the remaining period at balance date to the contractual maturity date. The amounts disclosed are the undiscounted contractual cash flows. Liability carrying amount

Asset carrying amount

Contractual cash flows

Less than six months

Six to twelve months

One to two years

$(000)

(500)

(149)

(225)

(126)

500

149

225

126

(500)

500

Liability carrying amount

Asset carrying amount

Contractual cash flows

Less than six months

Six to twelve months

One to two years

$(000)

Outflow

Inflow

30 June 2021 Forward foreign exchange costs Outflow Inflow

30 June 2020 Forward foreign exchange costs

The notional principal amounts of outstanding forward foreign exchange contracts were NZ $24.8m (2020: $Nil). These foreign currencies include Euro (EUR), Australian (AUD), and United States (USD) dollars. The foreign currency principal amounts were EUR $11.6m (2020: $Nil), AUD $4m (2020: $Nil) and USD $0.6m (2020: $Nil). The fair values of forward foreign exchange contracts have been determined using a discounted cash flows valuation technique based on quoted market prices. The fair value is determined using independently sourced market currency rates based on forward foreign exchange contract prices at balance date valued on a mark-to-market basis. These foreign exchange derivatives have been determined to be within Level 2 of the fair value hierarchy as all significant inputs required to ascertain their fair value are observable.

iv. Counterparty risk Counterparty risk is the likelihood or probability that one of those involved in a transaction might default on its contractual obligations. CRL Ltd has a number of key contractual counterparties. CRL Ltd receives financial information from and regularly monitor the financial creditworthiness of these counterparties to ensure there is no risk of disruption to the project and that those counterparties being able to continue to satisfy their current and future commitments under their contracts with CRL Ltd. In reviewing financial creditworthiness, CRL Ltd considers financial performance (including rating agency reports where available) of both the counterparty and as applicable their parent.

11. Sensitivity analysis As CRL Ltd does not have a net exposure to a change in any of these currencies (EUR, AUD, and USD), at 30 June 2021 (and at 30 June 2020), if the NZD had weakened/strengthened against any of these currencies, with all variables held constant, there would be no impact on CRL Ltd’s deficit or surplus for the year.

12. Related parties i. Key management personnel Key management personnel include the senior management team and the Board of Directors. Remuneration and benefits: Senior management Directors

Number of personnel

30 June 2021 $(000)

Number of personnel

30 June 2020 $(000)

4,008

3,495

294

4,302

3,789

Key management personnel did not receive any remuneration or compensation other than in their capacity as key management personnel. If the number of personnel were reported as FTE the number of Senior Managers would have been 11.9 FTE (2020: 10 FTE). The Company did not provide any compensation at non-arm’s length terms to close family members of key management personnel during the year. The Company did not provide any loans to key management personnel or their close family members. No Directors received compensation or other benefits in relation to cessation (2020: $Nil). ii. Employment expenses 30 June 2021

30 June 2020

$(000)

1,025

1,403

262

245

1,662

1,673

222

277

3,171

3,598

Salaries and wages KiwiSaver employer contributions Annual leave taken and other costs Other employment related costs

CRL Ltd capitalises a portion of employment expenses and hence the employment expenses shown above are net of capitalisation. No termination benefits relating to severance amounts were paid to employees in 2021 (2020: 1) as a result of reorganisation of the Company. The total termination amounts paid by the Company to employees was $0 (2020: $23k). Redundancy payments No termination benefits relating to redundancy amounts were paid in 2021 (2020: Nil) as a result of the reorganisation of the Company. The total redundancy amounts paid by CRL Ltd to employees was $0 (2020: $Nil). iii. Related party transactions and balances Related party transactions other than remuneration of key management personnel All related party transactions that the Company entered into during the year occurred within normal client/supplier relationship and under terms equivalent to those that prevail in arm’s length transactions in similar circumstances.

NOTES TO THE FINANCIAL STATEMENTS

Severance payments

CRL Ltd funded work by KiwiRail in relation to C8 Ōtāhuhu (track works), C5 Mt Eden Single Line Enabling Works (MESLEW), C8 Newmarket and C9 Britomart East. The terms of these agreements were on an arm's length commercial basis. CRL Ltd transferred two assets to Auckland Council during FY21. These assets were the balance of C2 (C2 SP2 was transferred in FY20) and C8 Ōtāhuhu Station Works. Balances at year end

Due from

Owed to

$(000)

Crown

Auckland Council

5,020

146

5,020

146

30 June 2021

30 June 2020 Crown Auckland Council

13. Auditor's remuneration 30 June 2021

30 June 2020

$(000)

Audit New Zealand fees paid for the audit of the financial statements - Current Year

254

245

Internal audit fees paid to PwC

100

354

248

Audit New Zealand fees paid for the assurance audit of projects C3 and C7

The Office of the Auditor-General undertook a governance review of CRL Ltd over the course of 2020 and 2021. This work has not yet been completed. No costs have been incurred by CRL Ltd in the preparation of this report.

14. Capital management CRL Ltd's capital is its equity, which comprises capital and accumulated surplus/(deficit). Equity is represented by net assets. CRL Ltd is subject to the financial management and accountability provisions of the Crown Entities Act 2004, which impose restrictions in relation to borrowings, acquisition of securities, issuing guarantees and indemnities, and the use of derivatives. CRL Ltd manages its equity by prudently managing revenues, expenses, assets, liabilities, investments and general financial dealings to ensure the company effectively achieves its objectives and purpose.

15. Subsequent events CRL Ltd expects to complete the transfer of the C1 SP3 (Chief Post Office) and SP5 (Urban Realm) assets by 30 September 2021 or not long thereafter. These assets are to vest to Auckland Council and Auckland Transport. CRL Ltd also expects to complete in September 2021 the signing of a Funding Agreement with KiwiRail for the Stage 2a and 3a works related to C9 Britomart East. These works include track and civils, overhead line supply and installation and signalling works and equipment. In addition the CRL project has been impacted by the Covid-19 Level 4 lockdown announcement effective 11.59pm on 17 August 2021. This has caused a shutdown of works on all work sites with the exception of the limited operation of the Tunnel Boring Machine. It is too early to gauge the financial impact of this current lockdown. No adjustments have been made to the financial statements. On 3 September 2021, Transport Minister Michael Wood and Auckland Mayor Phil Goff announced that a new Targeted Hardship Fund will be established to help small businesses impacted by disruption from the construction of CRL. Additional funding of up to $12m will be provided from the Sponsors over the next two years. CRL Ltd will administer the fund with an independent third party assessor providing input and advice. 70

16. Explanation of major variances against budget Major variations from the Company’s budget figures are explained below:

Statement of Financial Performance and Statement of Other Comprehensive Revenue and Expense 30 June 2021

Budget

Actual

Variance

$(000)

Rental revenue

163

123

(40)

Interest revenue

490

472

(18)

2,503

653

3,098

2,445

4,123

3,171

952

Professional services

640

571

IT expenses

586

125

461

23,536

14,111

9,425

484

(484)

General expenses

4,298

3,971

327

Insurance expenses

7,514

8,682

(1,168)

196

129

3,408

5,728

(2,320)

Vested asset expense

11,004

43,910

(32,906)

Impairment expenses

2,181

(2,181)

55,305

83,001

(27,696)

Surplus/(deficit)

(54,652)

(79,903)

(25,251)

Total comprehensive revenue and expense

(54,652)

(79,903)

(25,251)

Revenue

Other revenue Total revenue Expenditure Employment expenses

Third party works Capital expenditure write-offs

Credit losses and allowances Lease payments Depreciation and amortisation expenses

Total expenditure

The Company’s net deficit was $25.3m higher than budgeted (2020: $103.2m). Expenses were higher than budgeted at $27.7m (2020: $103.8m). The major variance was (i) the unbudgeted transfer of the completed C2 Works (valued at $21.3m) to Auckland Council for further vesting to Auckland Transport and Healthy Waters and (ii) higher budget for non-construction third party works costs on C8 Ōtāhuhu and C5 MESLEW works reflected under third party works.

NOTES TO THE FINANCIAL STATEMENTS 71

Statement of Financial Position 30 June 2021

Budget

Actual

Variance

$(000)

7,619

18,374

10,755

13,321

9,319

(4,002)

Assets held for transfer

174,612

FX hedging - receivables

374

6,613

8,292

1,679

27,553

210,971

183,418

Capital work in progress

1,759,443

1,511,844

(247,599)

FX hedging - receivables

126

25,113

24,555

(558)

133,909

130,415

(3,494)

176

189

Total Non-Current Assets

1,918,641

1,667,129

(251,512)

Total Assets

1,946,194

1,878,100

(68,094)

81,117

69,867

11,250

798

903

(105)

FX hedging - payables

374

(374)

Related party payables

(31)

81,915

71,175

10,740

FX derivative liability

126

Total Non-Current Liabilities

126

81,915

71,301

10,614

1,864,279

1,806,799

(57,480)

2,090,280

2,058,280

(32,000)

(226,001)

(251,481)

(25,480)

1,864,279

1,806,799

(57,480)

Assets Current Assets Cash and cash equivalents Trade and other receivables

Prepayments Total Current Assets Non-Current Assets

Prepayments Property, plant and equipment Intangible assets

Liabilities Current Liabilities Accounts payable and accruals Current employee entitlements

Total Current Liabilities Non-current Liabilities

Total Liabilities Net Assets Equity Contributed capital Retained earnings Total Equity

Refer to same answer above.

Statement of Cash Flows 30 June 2021

Budget

Actual

Variance

$(000)

170

105

(65)

(21,252)

(39,818)

(18,566)

490

472

(18)

(20,592)

(39,241)

(18,649)

(836,028)

(774,011)

62,017

(2,941)

(232)

2,709

(91)

(104)

(13)

(839,060)

(774,347)

64,713

Proceeds from issue of contributed capital

822,000

790,000

(32,000)

Net cash from financing activities

822,000

790,000

(32,000)

Net (decrease)/increase

(37,652)

(23,588)

14,064

45,271

41,962

(3,309)

7,619

18,374

10,755

Bank balances

7,619

18,374

10,755

Total cash

7,619

18,374

10,755

Cash flows from operating activities Cash received from customers Cash paid to suppliers and employees Interest received Net cash from operating activities Cash flows from investing activities Acquisition of capital work in progress Acquisition of property, plant and equipment Acquisition of intangibles Net cash from investing activities Cash flows from financing activities

Opening cash and cash equivalents Closing cash Made up of:

The Link Alliance spend during FY21 was approximately $40m lower than budgeted due to incorrect Christmas period work assumptions, timing of plant purchases and Covid-19 impact. The later than assumed commencement of the C9 Britomart East works was also a factor.

NOTES TO THE FINANCIAL STATEMENTS 73

17. Equity Equity is measured as the difference between total assets and total liabilities. Equity is classified into the following components: • Contributed capital (Ordinary shares) • Surplus/(deficit) • Funding received for B Class shares Shares Ordinary shares: The initial shareholding for the creation of CRL Ltd comprised 1,000 Ordinary shares. Ordinary shares related to the initial set up of the company have voting rights attached but no par value. There have been no movements in Ordinary shares. The shareholding was split as per the table below. B Class shares: Shareholders receive 1 share for every dollar of funding received. Funding is applied for on a quarterly basis supported by future forecast cash requirements. All B Class shares are authorised, issued and fully paid. They have no voting rights attached. Minister of Finance

Minister of Transport

Auckland Council

Total number of shares

Total value of shares $(000)

255

490

1,000

108,932

108,933

217,865

208,137,561

416,275,122

832,550,244

832,550

197,500,000

395,000,000

790,000,000

790,000

405,637,561

811,275,122

1,622,550,244

1,622,550

Ordinary shares 2021 Number of shares Total value of shares ($000)

435,730

B Class shares 2021 Shares issued 1 July 2020 Shares issued relating to prior year Shares issued during the year Shares paid not yet issued Total B Class shares 30 June 2021 Total Contributed Capital 2021

2,058,280 Minister of Finance

Minister of Transport

Auckland Council

Total number of shares

Total value of shares $(000)

255

490

1,000

108,932

108,933

217,865

79,137,561

158,275,122

316,550,244

316,550

129,000,000

258,000,000

516,000,000

516,000

208,137,561

416,275,122

832,550,244

832,550

Ordinary shares 2020 Number of shares Total value of shares ($000)

435,730

B Class shares 2020 Shares issued 1 July 2019 Shares issued relating to prior year Shares issued during the year Shares paid not yet issued Total B Class shares 30 June 2020 Total Contributed Capital 2020

1,268,280

Governance and Remuneration Disclosures 18. Directors’ interests Directors made the following entries in the Directors’ Interests Register pursuant to section 140 of the Companies Act 1993 during the year ended 30 June 2021. Director

Board/Committee Memberships

Sir Brian Roche

Became a Director at Whangahaumaru GP Limited

(Chair)

Became a Director of Marist Holdings (Greenmeadows) Limited Became a Director of Winery Concert Holdings Limited Became Interim Chair of Ngāpuhi Investment Fund Limited

Karen Jordan

Became Independent Member Risk and Assurance Committee at Inland Revenue Became a Director of Steel & Tube Holdings Limited

Anne Urlwin

Ceased as Director of Steel & Tube Holdings Limited Became a Director of Queenstown Airport Corporation Limited

Russell Black

Ceased as Advisor to Melbourne Metro Rail Authority

Brian Harrison

Became a Director of Stonebridge Management Limited

19. Directors' remuneration (included in General expenses in the Statement of Financial Performance) 30 June 2021

30 June 2020

$(000)

Sir Brian Roche (Chair)

Russell Black

Brian Harrison

Karen Jordan

Anne Urlwin

294

20. Directors’ meeting attendance During the year, nine Board, four Audit & Risk Committee and zero People & Remuneration Committee meetings were held. Attendance by each Director was as follows: Audit & Risk Committee

People & Remuneration Committee

Total meetings held

Sir Brian Roche (Chair)

Russell Black

Brian Harrison

Karen Jordan

Anne Urlwin

NOTES TO THE FINANCIAL STATEMENTS

Board meetings

21. Indemnities and insurance In accordance with section 162 of the Companies Act 1993 and CRL Ltd's Constitution, CRL Ltd has provided a deed of indemnity to Directors for certain activities undertaken in the performance of CRL Ltd's functions. CRL Ltd has taken out Directors' and Officers' Liability and Professional Indemnity insurance cover during the financial year in respect of the liability or cost of Directors and employees.

22. Information used by Directors There were no notices from Directors requesting to disclose or use Company information received in their capacity as Directors that would not otherwise have been available to them.

23. Employee remuneration bands The number of employees, contractors or former employees and contractors who received remuneration and other benefits exceeding $100,000 during the year to 30 June 2021 are specified in the following table. Remuneration includes salary, any performance incentive payments, redundancy payments, employer contributions to superannuation and other sundry benefits received in their capacity as employees or former employees of the Company or payments to Contractors at their agreed rates in their capacity of filling roles that would otherwise have been filled by an employee. 30 June 2021

30 June 2020

Number of employees

$100,000 - $109,999

$110,000 - $119,999

$120,000 - $129,999

$130,000 - $139,999

$140,000 - $149,999

$150,000 - $159,999

$160,000 - $169,999

$170,000 - $179,999

$180,000 - $189,999

$190,000 - $199,999

$200,000 - $209,999

$210,000 - $219,999

$220,000 - $229,999

$230,000 - $239,999

$240,000 - $249,999

$250,000 - $259,999

$260,000 - $269,999

$270,000 - $279,999

$290,000 - $299,999

$300,000 - $309,999

$310,000 - $319,999

$330,000 - $339,999

$350,000 - $359,999

$360,000 - $369,999

$400,000 - $409,999

$650,000 - $659,999

$690,000 - $699,999

24. Chief Executive & Executive remuneration Number of Personnel

Fixed Remuneration

Short Term Incentive

Other Benefits

$(000)

Sean Sweeney (Chief Executive) FY21

607

FY20

610

FY21

3,358

FY20

2,885

103

Executive remuneration (excluding Chief Executive)

The Chief Executive remuneration consists of fixed remuneration and a Short Term Incentive (STI). The STI is an at-risk payment based on CRL Ltd’s performance, as outlined in the SPE and on individual KPIs as determined by the Board. The STI paid in FY21 relates to the CEO’s performance against the SPE and agreed KPIs for FY20. These measures are reviewed annually by the Board. The STI covers areas of Heath and Safety, Oversite Development, Project Delivery, Funding Envelope, Sustainability and Social Outcomes, Community and Stakeholder Engagement, Sponsors and Delivery Partners. If the number of personnel were reported as FTE the number of Senior Managers would have been 11.9 FTE (2020: 10 FTE).

NOTES TO THE FINANCIAL STATEMENTS 77

Independent Auditor’s Report To the readers of City Rail Link Limited’s financial statements and performance information for the year ended 30 June 2021 The Auditor-General is the auditor of City Rail Link Limited (the company). The Auditor-General has appointed me, JR Smaill, using the staff and resources of Audit New Zealand, to carry out the audit of the financial statements and the performance information, including the performance information for an appropriation, of the company on his behalf.

Opinion We have audited: •

the financial statements of the company on pages 52 to 77 that comprise the statement of financial position as at 30 June 2021, the statement of financial performance, statement of changes in equity and statement of cash flows for the year ended on that date and the notes to the financial statements including a summary of significant accounting policies and other explanatory information; and

•

the performance information of the company on pages 12 to 31.

In our opinion: •

the financial statements of the company on pages 52 to 77: ¡

•

present fairly, in all material respects: •

its financial position as at 30 June 2021; and

•

its financial performance and cash flows for the year then ended; and

comply with generally accepted accounting practice in New Zealand in accordance with Public Benefit Reporting Standards; and

the performance information on pages 12 to 31: ¡

presents fairly, in all material respects, the company’s performance for the year ended 30 June 2021, including: •

for each class of reportable outputs: •

its standards of delivery performance achieved as compared with forecasts included in the statement of performance expectations for the financial year; and

•

its actual revenue and output expenses as compared with the forecasts included in the statement of performance expectations for the financial year; and

what has been achieved with the appropriation; the actual expenses or capital expenditure incurred compared with the appropriated or forecast expenses or capital expenditure; and

complies with generally accepted accounting practice in New Zealand.

Our audit was completed on 21 September 2021. This is the date at which our opinion is expressed. The basis for our opinion is explained below. In addition, we outline the responsibilities of the Board and our responsibilities relating to the financial statements and the performance information, we comment on other information, and we explain our independence.

Basis for our opinion We carried out our audit in accordance with the Auditor-General’s Auditing Standards, which incorporate the Professional and Ethical Standards and the International Standards on Auditing (New Zealand) issued by the New Zealand Auditing and Assurance Standards Board. Our responsibilities under those standards are further described in the Responsibilities of the auditor section of our report. We have fulfilled our responsibilities in accordance with the Auditor-General’s Auditing Standards. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Responsibilities of the Board for the financial statements and the performance information The Board is responsible on behalf of the company for preparing financial statements and performance information that are fairly presented and comply with generally accepted accounting practice in New Zealand. The Board is responsible for such internal control as it determines is necessary to enable it to prepare financial statements and performance information that are free from material misstatement, whether due to fraud or error.

AUDIT REPORT

In preparing the financial statements and the performance information, the Board is responsible on behalf of the company for assessing the company’s ability to continue as a going concern. The Board is also responsible for disclosing, as applicable, matters related to going concern and using the going concern basis of accounting, unless there is an intention to merge or to terminate the activities of the company, or there is no realistic alternative but to do so. The Board’s responsibilities arise from the Crown Entities Act 2004 and the Public Finance Act 1989.

Responsibilities of the auditor for the audit of the financial statements and the performance information Our objectives are to obtain reasonable assurance about whether the financial statements and the performance information, as a whole, are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit carried out in accordance with the Auditor-General’s Auditing Standards will always detect a material misstatement when it exists. Misstatements are differences or omissions of amounts or disclosures, and can arise from fraud or error. Misstatements are considered material if, individually or in the aggregate, they could reasonably be expected to influence the decisions of readers, taken on the basis of these financial statements and the performance information. For the budget information reported in the financial statements and the performance information, our procedures were limited to checking that the information agreed to the company’s statement of performance expectations. We did not evaluate the security and controls over the electronic publication of the financial statements and the performance information. As part of an audit in accordance with the Auditor-General’s Auditing Standards, we exercise professional judgement and maintain professional scepticism throughout the audit. Also:

•

We identify and assess the risks of material misstatement of the financial statements and the performance information, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

•

We obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control.

•

We evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Board.

•

We evaluate the appropriateness of the reported performance information within the company’s framework for reporting its performance.

•

We conclude on the appropriateness of the use of the going concern basis of accounting by the Board and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements and the performance information or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence

obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern. •

We evaluate the overall presentation, structure and content of the financial statements and the performance information, including the disclosures, and whether the financial statements and the performance information represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with the Board regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Our responsibilities arise from the Public Audit Act 2001.

Other information The Board is responsible for the other information. The other information comprises the information included on pages 1 to 11, pages 32 to 51 and page 83, but does not include the financial statements and the performance information, and our auditor’s report thereon. Our opinion on the financial statements and the performance information does not cover the other information and we do not express any form of audit opinion or assurance conclusion thereon. In connection with our audit of the financial statements and the performance information, our responsibility is to read the other information. In doing so, we consider whether the other information is materially inconsistent with the financial statements and the performance information or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on our work, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Independence We are independent of the company in accordance with the independence requirements of the Auditor-General’s Auditing Standards, which incorporate the independence requirements of Professional and Ethical Standard 1: International Code of Ethics for Assurance Practitioners issued by the New Zealand Auditing and Assurance Standards Board. In addition to the audit we have carried out a performance audit of the City Rail Link project’s governance arrangements which are compatible with those independence requirements. Other than the audit and the performance audit, we have no relationship with or interests in the company. AUDIT REPORT

JR Smaill Audit New Zealand On behalf of the Auditor-General Auckland, New Zealand 81

Francois Dudouit, Link Alliance Project Director

Printed on recycled paper

City Rail Link Limited Annual Report 2021

Articles inside

Independent Auditor's Report

Notes to the Financial Statements

CRL Ltd as a Good Employer

Progress Highlights

Heritage

Statement of Performance

City Rail Link Ltd Board

Development Opportunities

Foreword

CRL Mana Whenua Partnership