Notes to the Financial Statements
68
www.kingsgate.com.au
Notes to the  
Financial Statements
for the year ended 30 June 2013
The Financial Report of Kingsgate Consolidated 
Limited (Kingsgate or the “Company”) for the 
year ended 30 June 2013 was authorised for 
issue in accordance with a resolution of 
Directors on 23 September 2013.
Kingsgate is a Company limited by shares incor-
porated in Australia whose shares are publicly 
traded on the Australian Securities Exchange 
using the ASX code KCN. The consolidated 
financial statements of the Company as at and 
for the year ended 30 June 2013 comprise the 
Company and its subsidiaries (together referred 
to as the “Group” and individually as “Group 
entities”). A description of the nature of the 
Group’s operations and its principal activities  
is included in the Directors’ Report.
1. BASIS OF PREPARATION
The general purpose financial statements have 
been prepared in accordance with Australian 
Accounting Standards, other authoritative 
pronouncements of the Australian Accounting 
Standards Board and the Corporations Act 2001. 
The Company is a for-profit entity for the 
purpose of preparing the financial statements.
Compliance with IFRS
The financial statements comply with 
International Financial Reporting Standards 
(IFRS) adopted by the International Accounting 
Standards Board (IASB).
Historical cost convention
The financial statements have been prepared 
under the historical cost convention, as modi-
fied by the revaluation of available-for-sale 
financial assets and financial instruments 
(including derivative instruments) at fair value 
through profit or loss.
Functional and presentation currency
The financial statements of the Group entities 
are measured using the currency of the primary 
economic environment in which the entity 
operates (“the functional currency”). The 
consolidated financial statements are presented 
in Australian dollars, which is the Company’s 
functional currency and presentation currency.
Rounding of amounts
The Company is of a kind referred to in ASIC 
Class Order 98/100 dated 10 July 1998 and in 
accordance with that Class Order, all financial 
information presented in Australian dollars has 
been rounded to the nearest thousand, or in 
certain cases, the nearest dollar.
Critical accounting estimates
The preparation of financial statements requires 
the use of certain critical accounting estimates. 
It also requires management to exercise its 
judgement in the process of applying the 
Group’s accounting policies. The areas involving 
a higher degree of judgement or complexity, or 
areas where assumptions and estimates are 
significant to the financial statements are 
disclosed in Note 3.
2.  SIGNIFICANT ACCOUNTING 
POLICIES
The principal accounting policies adopted in the 
preparation of the financial statements are set 
out below. These policies have been consistently 
applied to all the years presented.
a . Principles of consolidation 
(i) Business combinations
Business combinations are accounted for using 
the acquisition method as at the acquisition 
date, which is the date on which control is 
transferred to the Group. Control is the power to 
govern the financial and operating policies of an 
entity so as to obtain benefits from its activities. 
In assessing control, the Group takes into 
consideration potential voting rights that 
currently are exercisable.
The consideration transferred for the acquisition 
of a subsidiary comprises the fair values of the 
assets transferred, the liabilities incurred and 
the equity interests issued by the Group. The 
consideration transferred does not include 
amounts related to the settlement of a pre-
existing relationship. Such amounts are gener-
ally recognised in profit or loss.
Costs related to the acquisition, other than 
those associated with the issue of debt or equity 
securities, that the Group incurs in connection 
with a business combination are expensed as