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Notes to the

financial statements

for the year ended 30 September 2015


4. Summary of significant accounting

policies (continued)

Foreign currency transactions

Transactions in foreign currencies are translated into

the functional currency of the Company using the

exchange rates prevailing at the dates of the transactions.

Exchange differences arising from the settlement of

such transactions and from the retranslation at the year-

end exchange rates of monetary assets and liabilities

denominated in foreign currencies are recognised in profit

or loss.

Employee benefits

Salaries, annual bonuses, paid annual leave,

contributions to superannuation and the cost of non-

monetary benefits are accrued in the year in which the

associated services are rendered by employees. Where

payment or settlement is defined and the effect would be

material, these amounts are stated at their present values.

Superannuation is paid in accordance with applicable

local government legislation.

Short-term employee benefits

Provision is made for the Company’s obligation for

short-term employee benefits. Short-term employee

benefits are benefits (other than termination benefits)

that are expected to be settled wholly before 12 months

after the end of the annual reporting period in which the

employees render the related service, including wages,

salaries and sick leave. Short-term employee benefits are

measured at the (undiscounted) amounts expected to be

paid when the obligation is settled.

The Company’s obligations for short-term employee

benefits such as wages, salaries and sick leave are

recognised as a part of current trade and other payables

in the statement of financial position. The Company’s

obligations for employees’ annual leave and long service

leave entitlements are recognised as provisions in the

statement of financial position.

Other long-term employee benefits

Provision is made for employees’ long service leave and

annual leave entitlements not expected to be settled

wholly within 12 months after the end of the annual

reporting period in which the employees render the

related service. Other long-term employee benefits are

measured at the present value of the expected future

payments to be made to employees. Expected future

payments incorporate anticipated future wage and salary

levels, durations of service and employee departures

and are discounted at rates determined by reference

to market yields at the end of the reporting period

on government bonds that have maturity dates that

approximate the terms of the obligations. Any

re-measurements for changes in assumptions of

obligations for other long-term employee benefits are

recognised in profit or loss in the periods in which the

changes occur.

The Company’s obligations for long-term employee

benefits are presented as non-current provisions in

its statement of financial position, except where the

Company does not have an unconditional right to defer

settlement for at least 12 months after the end of the

reporting period, in which case the obligations are

presented as current provisions.

Share-based compensation

The fair value of share options granted to employees is

recognised as an employee cost with a corresponding

increase in a reserve within equity. The fair value of shares

granted to service providers is recognised as an expense.

The fair value is measured at grant date using the

binomial lattice model or the Black Scholes option pricing

model, as appropriate, taking into account the terms and

conditions upon which the options were granted. Where

the employees have to meet vesting conditions before

becoming unconditionally entitled to the options, the

total estimated fair value of the options is spread over the

vesting period, taking into account the probability that the

options will vest.

During the vesting period, the number of share options

that is expected to vest is reviewed. Any adjustment

to the cumulative fair value recognised in prior years

is charged or credited to the profit or loss for the year

of the review, unless the original employee expenses

qualify for recognition as an asset, with a corresponding

adjustment to the reserve. On vesting date, the amount

recognised as an expense is adjusted to reflect the

actual number of options that vest (with a corresponding

adjustment to the reserve) except where forfeiture is

only due to not achieving vesting conditions that relate

to the market price of the Company’s shares. The equity

amount is recognised in the reserve until either the

option is exercised (when it is transferred to the share

premium account) or the option expires (when released

to accumulated losses).

Goods and services tax (GST)

Revenue, expenses and assets are recognised net of the

amount of goods and services tax (GST), except where

the amount of GST incurred is not recoverable from the

taxation authority. In these circumstances, the GST is

recognised as part of the cost of acquisition of the asset

or as part of the expenses. Receivables and payables are

stated with the amount of GST included. The net amount

of GST recoverable from, or payable to, the taxation

authority is included as a current asset or liability in the

end of the reporting period.

Cash flows are included in the statement of cash flows

on a gross basis. The GST components of cash flows

arising from investing and financing activities which are

recoverable from, or payable to, the taxation authority are

classified as operating cash flows.