the amounts used for taxation purposes. The 
amount of deferred tax provided is based on the 
expected manner of realisation or settlement of 
the carrying amount of assets and liabilities, 
using tax rates enacted or substantively enacted 
at the reporting date. 
A deferred tax asset is recognised for unused tax 
losses, tax credits and deductible temporary 
differences, to the extent that it is probable that 
future taxable profits will be available against 
which they can be utilised. Deferred tax assets 
are reviewed at each reporting date and are 
reduced to the extent that it is no longer prob-
able that the related tax benefit will be realised.
Deferred tax is not recognised for:
〉〉 temporary differences on the initial recogni -
tion of assets or liabilities in a transaction 
that is not a business combination and that 
affects neither accounting nor taxable profit 
or loss;
〉〉 temporary differences related to invest-
ments in subsidiaries where the Company is 
able to control the timing of the reversal of 
the temporary differences and it is probable 
that they will not reverse in the foreseeable 
future; and
〉〉 taxable temporary differences arising on the 
initial recognition of goodwill.
Deferred tax assets and liabilities are offset if 
there is a legally enforceable right to offset 
current tax liabilities and assets, and they relate 
to income taxes levied by the same tax authority 
on the same taxable entity.
Additional income tax expenses that arise from 
the distribution of cash dividends are recognised 
at the same time that the liability to pay the 
related dividend is recognised.
Tax consolidation 
The Company and its wholly-owned Australian 
resident entities formed a tax-consolidation 
group with effect from 1 July 2003 and are 
therefore taxed as a single entity from that date. 
The head entity within the tax-consolidation 
group is Kingsgate Consolidated Limited.
Current tax expense or benefit, deferred tax 
assets and deferred tax liabilities arising from 
temporary differences of the members of the 
tax-consolidation group are recognised in the 
separate financial statements of the members  
of the tax-consolidation group using the “stand 
alone taxpayer” approach by reference to the 
carrying amounts in the separate financial 
statements of each entity and the tax values 
applying under tax consolidation.
Current tax assets or liabilities and deferred tax 
assets arising from unused tax losses assumed 
by the head entity from the subsidiaries in the 
tax-consolidation group, are recognised as 
amounts receivable or payable to other entities 
in the tax-consolidation group in conjunction 
with any tax funding agreement amounts.
The Company recognises deferred tax assets 
arising from unused tax losses of the tax-consoli-
dation group to the extent that it is probable 
that future taxable profits of the tax-consolida-
tion group will be available against which the 
asset can be utilised.
Tax funding and sharing agreements
The members of the tax-consolidation group 
have entered into a funding agreement that sets 
out the funding obligations of members of the 
tax-consolidation group in respect of tax 
amounts. The tax funding arrangements require 
payments to or from the head entity equal to 
the current tax liability or asset assumed by the 
head entity and any deferred tax asset assumed 
by the head entity, resulting in the head entity 
recognising an intra-group receivable or payable 
in the separate financial statements of the 
members of the tax-consolidation group equal in 
amount to the tax liability or asset assumed. The 
intra-group receivables or payables are at call.