9365206760

Valuation of former gas business environmental provisions - (contained within Environmental and Restoration provision of $83.9m) (continued)

Information available about the conditions at the individual sites; and - forward looking assumptions applied to futurę cash outflows associated with planned remediation activities for each site. The main assumptions include timing and value of expected costs, as well as futurę economic assumptions such as inflation and discount rates. Due to the comp!ex and specialised naturę of the activities to be undertaken, management engage external environmental remediation experts to assist in assessing planned remediation activities and the associated costs. We 3pend con&kJeiable tlme and effort during the audit assessing their work and management's analysis thereof. •

Environment Protection Authority and other regulatory bodies on such matters against management*s cash outflow assumptions; •    obtaining confirmations from the Group's solicitors as to significant legał proceedings to which the group was a party and we inspected relevant legał correspondence, to assess the accuracy and compłeteness of environmental provisions recorded by management; •    evaluating available reports by external environmentał remediation experts engaged by management as to planned remediation activities for each site and associated costs. We: -    assessed the competency, scope of work and findings of those experts, in particular the planned remediation aotivities identifiod ond ossociated foiecast costs; -    compared the reports with management's assumptions in the forecast cash outflow models for each site; and -    used our business and industry knowledge, correspondence from environmental and other bodies, and discussions with management to corroborate and challenge the reasonableness of management's assumptions as to the most likely courses of action and probability of futurę cash outflows.

Recognition of revenue ($1,754m)

Refer to the following notes to the financial report: Notę 2(d) Summary of significant accounting policies -Revenue recognition, Notę 4(vii) Critical accounting estimates and judgements - Revenue, and Notę 6 Revenue.

The key audit matter

How the matter was addressed in our audit

Revenue recognition is a key audit matter due to the: • naturę of the regulatory framework and billing process for the distribution of electricity and gas which adds complexity to our audit approach, in particular: - determining approved tariff rates, which are used to bill customers for the distribution of electricity and gas. The Group's regulatory determinations are promulgated by regulatory bodies, are routinely revised, require judgement to interpret and apply and are subject to legał proceedings;

Our procedures included, amongst others: •    involving our regulatory advisory specialists to consider the impact of relevant regulatory determinations on the Group's revenue, including developments in respect of the Australian Competition Tribunal rulings in connection with the Group's limited merits review; •    comparing system tariff rates charged to customers to regulator approved tariff rates for the time the services were provided; * •    evaluating the appropriateness of management's accounting policies for revenue recognition against accounting standard requirements; •    analysing revenue against historicai performance, regulatory determinations, and energy consumption data;

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