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
