## 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 

The principal accounting policies adopted in the preparation of these consolidated financial statements are set out below� These policies have been consistently applied to all the years presented, unless otherwise stated� 

## (a) New accounting standards and interpretations 

## (i) Changes in accounting policy and disclosures 

We have adopted the following new and amended Australian Accounting Standards and AASB Interpretations as of 1 January 2013� Adoption of these Standards and Interpretations did not have any effect on the financial position or performance of the Group� 

 AASB 2011-9 Amendments to Australian Accounting Standards – Presentation of Other Comprehensive Income [AASB 1, 5, 7, 101, 112, 120, 121, 132, 133, 134, 1039 & 1049] 

 AASB 10 Consolidated Financial Statements 

 AASB 11 Joint Arrangements 

 AASB 12 Disclosure of Interests in Other Entities 

 AASB 13 Fair Value Measurement 

 AASB 119 Employee Benefits 

 AASB 2012-5 Annual Improvements 2009–2011 cycle 

 AASB 2012-2 Amendments to Australian Accounting Standards – Disclosures – Offsetting Financial Assets and Financial Liabilities 

 AASB 2012-9 Amendment to AASB 1048 arising from the withdrawal of Australian Interpretation 1039 

 AASB 2012-10 Amendments to Australian Accounting Standards – Transition Guidance and Other Amendments 

## (ii) Accounting Standards and Interpretations issued but not yet effective 

There are a number of Standards and Interpretations that will be mandatory in future reporting periods� We have not elected to early adopt these Standards and Interpretations� We are yet to quantify the effect on the reported financial position or performance of the Group� 

The Standards and Interpretations that are of most relevance to the Group are set out below: 

 AASB 2012-3 Amendments to Australian Accounting Standards – Offsetting Financial Assets and Financial Liabilities 

 AASB 9 Financial Instruments 

## (b) Basis of consolidation 

The consolidated financial statements comprise the financial statements of Australian Agricultural Company Limited, and its subsidiaries (as outlined in note 25) as at 31 March each year� All intra-group balances and transactions, income and expenses and profit and losses resulting from intra-group transactions have been eliminated in full� 

Subsidiaries are all those entities which we control as a result of us being exposed, or have rights, to variable returns from our involvement with the subsidiary and we have the ability to affect those returns through our power over the subsidiary� Such control generally accompanies a shareholding of more than one-half of the subsidiaries voting rights� We currently hold 100% of the voting rights of all our subsidiaries� 

We consolidate subsidiaries from the date on which control commences and up until the date on which there is a loss of control� 

We account for the acquisition of our subsidiaries using the acquisition method of accounting� The acquisition method of accounting involves recognising at acquisition date, separately from goodwill, the identifiable assets acquired, the liabilities assumed and any non-controlling interest in the acquiree� The identifiable assets acquired and the liabilities assumed are measured at their acquisition date fair values� Any excess of the fair value of consideration over our interest in the fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities is recognised as goodwill� 

