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NOTES TO THE FINANCIAL STATEMENTS FOR YEAR ENDED 30 JUNE 2015 Key Numbers 1. Summary of Significant Accounting Policies The principal accounting policies adopted in the preparation of these consolidated financial statements are set out below. In addition significant and other accounting policies that summarise the measurement basis used and that are relevant to an understanding of the financial statements are provided throughout the notes to the financial statements. These policies have been consistently applied to all the years presented unless otherwise stated. The financial statements are for the consolidated entity consisting of Southern Cross Media Group Limited the Company and its subsidiaries the Group. Basis of preparation This general purpose financial report has been prepared in accordance with Australian Accounting Standards and the Corporations Act 2001 where applicable. The Group is a for-profit entity for the purpose of preparing the financial statements. Information in respect of the parent entity in this financial report relates to Southern Cross Media Group Limited. i Compliance with IFRS Compliance with Australian Accounting Standards ensures that the financial statements and notes of the Group comply with International Financial Reporting Standards IFRS as issued by the International Accounting Standards Board IASB. Consequently this financial report has also been prepared in accordance with and complies with IFRS as issued by the IASB. ii Historical cost convention These financial statements have been prepared under the historical cost convention as modified by the revaluation of certain financial assets and liabilities including derivative instruments at fair value through profit or loss. All amounts are presented in Australian dollars unless otherwise noted. iii Comparative figures Where necessary comparative figures have been adjusted to conform to changes in presentation in the current year. a Principles of consolidation The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of the Company as at 30 June 2015 and the results of all subsidiaries for the year then ended. Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to or has rights to variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. The effects of all transactions between entities in the Group are eliminated in full. The purchase method of accounting is used to account for the acquisition of subsidiaries by the Group except as follows At the time of Initial Public Offering IPO Southern Cross Media Australia Holdings Pty Limited SCMAHL was deemed to be the accounting acquirer of both Southern Cross Media Group Limited SCMGL and Southern Cross Media Trust SCMT which was neither the legal parent nor legal acquirer and This reflects the requirements of AASB 3 that in situations where an existing entity SCMAHL arranges to be acquired by a smaller entity SCMGL for the purposes of a stock exchange listing the existing entity SCMAHL should be deemed to be the acquirer subject to consideration of other factors such as management of the entities involved in the transaction and relative fair values of the entities involved in the transaction. This is commonly referred to as a reverse acquisition. At the time of IPO in November 2005 the reverse acquisition guidance of AASB 3 was applied to the Group and the cost of the Business Combination was deemed to be paid by SCMAHL to acquire SCMGL and SCMT. The cost was determined by reference to the fair value of the net assets of SCMGL and SCMT immediately prior to the Business Combination. The investment made by the legal parent SCMGL in SCMAHL to legally acquire the existing radio assets is eliminated on consolidation. In applying the guidance of AASB 3 this elimination results in a debit of 77.4 million to other equity transactions. This does not affect the Groups distributable profits. Rounding of amounts The Group and the Company are of a kind referred to in Class Order 98100 issued by the Australian Securities and Investments Commission relating to the rounding off of amounts in the financial report. Amounts in the financial report have been rounded off in accordance with that Class Order to the nearest thousand dollars unless otherwise indicated. Critical accounting estimates and judgement The preparation of the financial report in accordance with Australian Accounting Standards requires the use of certain critical accounting estimates. It also requires management to exercise judgement in the process of applying the accounting policies. Estimates and judgements are continually evaluated and are based on historical experience and other factors including expectations of future events that may have a financial impact on the entity and that are believed to be reasonable under the circumstances. Management believes the estimates used in the preparation of the financial report are reasonable. Actual results in the future may differ from those reported. Judgements and estimates which are material to the financial report are found in the following notes Note 7 Non-Current Assets Intangible Assets Page 49 Note 8 Impairment Page 50 Notes to the financial statements The notes to the financial statements have been restructured to make the financial report more relevant and readable with a focus on information that is material to the operations financial position and performance of the Group. Additional information has also been included where it is important for understanding the Groups performance. Notes relating to individual line items in the financial statements now include accounting policy information where it is considered relevant to an understanding of these items as well as information about critical accounting estimates and judgements. Details of the impact of new accounting policies and all other accounting policy information are disclosed at the end of the financial report in Note 25. 44 SOUTHERN CROSS AUSTEREO ANNUAL REPORT 2015