Transurban Group Essay Example | Topics and Well Written Essays - 1000 words

Transurban Group - Essay Example The name of the company is Transurban Group and its ASX code is TCL.The main office is located at 505 Little Collins Street, Melbourne, Victoria, Australia.The reporting period of the company starts from 1st July and ends on 30th June of subsequent year The article â€Å"Transurban rejects Canadian takeover bids† appeared on May 12, 2010 and outlines the refusal of the group to accept two takeover bids on different grounds. (The Sunday Morning Herlad, 2010). The new article discusses about the two new takeover bids by the two pension funds from Canada and one from Australia and why Transurban Group has actually refused to accept the bids based on the value offered owing to its past performance and future prospects. Article however, mentions that the firm is willing to work with these firms in terms of due diligence and may also consider the options if the right price is offered. The article has also mentions the capital raising efforts of the firm to expand the business and ho w same may have an impact on the overall price offered by the acquiring firms. This article is interesting in the sense that it provides a concise picture of the details about the potential deals in which Transurban Group may be involved in near future. 4) The stock price on 5th April 2011 was $5.340 per share whereas the price on 8th April 2011 was $5.350 per share. The net change in the share price was $0.10 per share during the period. 5) The net profit as on 30th June 2010 was $59.605 M whereas the same was ($16.134m) during 2009. (Transurban, 2010, 51). Considering the above figures, it is evident that the firm was incurring losses during 2009 and it recorded an overall net profit of more than $59M during 2010. Net profit margin in 2010 therefore is 7.93% showing impressive performance considering the fact that the firm has incurred losses during 2009. It is also important to understand that the improvement in the profitability of the firm has become possible owing to the cost control. Firm has been able to reduce its key costs such as business development costs and corporate costs in order to improve the profitability of the firm. It could therefore be concluded that the firm has been able to achieve increase in profitability with better management of its costs and expenses. 6) The largest liability of the firm is borrowings which is to tune of $4.005 B and it is non-current liability. Note 16 of the notes to accounts indicates that these liabilities include infrastructure facilities, term loans, capital markets debt, US Private placement as well as the syndicated facilities. The infrastructure loans have been taken for the purpose of building and expanding the existing infrastructure base whereas other facilities have been taken for various purposes over the period of time. Borrowings also included working capital facilities having expiry of more than one year therefore they are reported in the non-current liabilities.(Transurban, 2010, 52) 7) There are four different streams of revenue reported in the annual accounts of the firm and each stream of revenue is recognized in the books based on different criteria. The revenue generated from the toll and fee is recognized when the actual charge is made by the user whereas other road revenues include advertising, rental and other associated revenue which is recognized as per the normal criteria. Construction revenue is recorded by the firm when the intangible asset is its construction phase whereas the development assets are recognized in sales when they are sold to third parties. Business development revenue is based on the provision of business support services and revenue is recognized accordingly. (Transurban, 2010, 74) 8) PriceWaterhouseCoopers is the auditor of the firm and based on the Independence of External Auditors Policy of the firm, the external auditors are not involved in any other activity on behalf of the firm. During the year, auditors have been paid to the