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notes to the financial Statements
for the year ended 31 March 2012
b) Business combinations
The acquisition of subsidiaries is accounted for using the acquisition method. On acquisition, the assets,
liabilities and contingent liabilities of a subsidiary are measured at their fair values at the date of acquisition.
Any excess of the cost over acquisition value is recognised as goodwill. If, after reassessment, the fair values
of the identifiable net assets acquired exceed the cost of acquisition the surplus is recognised immediately in
profit or loss. Acquisition costs are expensed as incurred.
c) Construction contracts
When the outcome of a construction contract can be estimated reliably, contract revenue and costs are
recognised in proportion to the stage of completion of the contract activity at balance date. This is measured
as the proportion that contract costs for work performed to date bear to the total contract costs, except where
this would not be representative of the stage of completion. Variations in contract work, claims and incentive
payments are included to the extent that they have been agreed with the customer.
When the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised
only to the extent of contract costs incurred that are likely to be recoverable. Contract costs are recognised
as expenses in the period in which they are incurred. When it is expected that total contract costs will exceed
total contract revenue, the expected loss is recognised immediately in profit or loss.
d) Employee benefits
Provision is made for benefits accruing to employees in respect of wages and salaries, annual leave, long
service leave and sick leave when it is probable that settlement will be required and they are capable of being
measured reliably.
Provisions made in respect of employee benefits expected to be settled within 12 months are measured at
their nominal values using the remuneration rate expected at the time of settlement.
Provisions made in respect of employee benefits that are not expected to be settled within 12 months are
measured as the present value of the estimated future cash outflows to be made by the Group in respect of
services provided by employees up to balance date.
Defined contribution plans
Contributions to defined contribution superannuation plans are expensed when incurred.
Defined benefit plans
The Group makes no contributions to defined benefit plans for any employees.
e) Foreign currencies
In preparing the financial statements, transactions in currencies other than the entity’s functional currency
(foreign currencies) are recorded at the rates of exchange prevailing at the dates of the transactions. At each
balance sheet date, monetary items denominated in foreign currencies are retranslated at the rates prevailing
at the balance sheet date. Non-monetary items carried at fair value that are denominated in foreign currencies
are retranslated at the rates prevailing at the date when the fair value was determined. Non-monetary items
that are measured in terms of historical cost in a foreign currency are not retranslated.
Exchange differences are recognised in profit or loss in the period in which they arise except for exchange
differences on transactions entered into in order to hedge certain foreign currency risks.
f) Goods and services tax
Revenues, expenses and assets are recognised net of the amount of Goods and Services Tax (GST), except for
receivables and payables, which are recognised inclusive of GST.
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