1 Statement of Significant  Accounting Policies The financial report is a general purpose financial report that has been prepared in accordance with Accounting Standards, Urgent Issues Group Consensus Views and other authoritative pronouncements of the Australian Accounting Standards Board. The financial report has been prepared on an accruals basis and is based on historical costs and does not take into account changing money values or, except where stated, current valuations of non-current assets. Cost is based on the fair values of the consideration given in exchange for assets. The accounting policies have been consistently applied, unless otherwise stated. The financial report covers the economic entity of Cabcharge Australia Limited and controlled entities and Cabcharge Australia Limited as an individual parent entity. Cabcharge Australia Limited is a listed public company, incorporated and domiciled in Australia. The following is a summary of the material accounting policies adopted by the economic entity in the preparation of the financial report. The consolidated accounts comprise the accounts of Cabcharge Australia Limited and all of its controlled entities. A controlled entity is any entity controlled by Cabcharge Australia Limited. Control exists where Cabcharge Australia Limited has the capacity to dominate the decision-making in relation to the financial and operating policies of another entity so that the other entity operates with Cabcharge Australia Limited to achieve the objectives of Cabcharge Australia Limited. A list of controlled entities is contained in Note 23 to the financial statements.  All inter-company balances and transactions between entities in the economic entity, including any unrealised profits or losses, have been eliminated on consolidation. Where controlled entities have entered or left the economic entity during the year, their operating results are included from the date control was obtained or until the date control ceased. Outside interests in the equity and results of the entities that are controlled are shown as a separate item in the consolidated financial report. The economic entity adopts the liability method of tax-effect accounting whereby the income tax expense is based on  the profit from ordinary activities adjusted for any  permanent differences.  Timing differences which arise due to the different accounting periods in which items of revenue and expense are included in the determination of accounting profit and taxable income are brought to account as either deferred tax asset or deferred tax liability at the rate of income tax applicable to the period in which the benefit will be received or the liability will become payable.  Deferred tax assets are not brought to account unless realisation of the asset is assured beyond reasonable doubt. Deferred tax assets in relation to tax losses are not brought  to account unless there is virtual certainty of realisation of  the benefit.  The amount of benefits brought to account or which may be realised in the future is based on the assumption that no adverse change will occur in income taxation legislation and the anticipation that the economic entity will derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law. Foreign currency transactions during the year are converted to Australian currency at the rates of exchange applicable at the dates of the transactions. Amounts receivable and payable in foreign currencies at balance date are converted at the rates of exchange ruling at that date. The gains and losses from conversion of short-term assets and liabilities, whether realised or unrealised, are included in profit from ordinary activities as they arise. The assets and liabilities of the overseas controlled entities, which are self-sustaining, are translated at year-end rates and operating results are translated at the rates ruling at the end of each month. Gains and losses arising on translation are taken directly to the foreign currency translation reserve. The cost method of accounting is used for all acquisitions of assets regardless of whether shares or other assets are acquired. Cost is determined as the fair value of the assets given up at the date of acquisition plus costs incidental to the acquisition. Where goodwill arises it is brought to account on the basis described in note 1(i). Land and Buildings are revalued at regular intervals. Independent assessments are obtained of the fair market value of land and buildings and such assessments are used as a guide when revaluations are made. Revaluation increments are credited directly to the asset revaluation reserve. Revaluations do not result in the carrying value of land or buildings exceeding the net amount expected to be recovered through the net cash inflows arising from their continued use and subsequent disposal ("recoverable amount"). The expected net cashflows have not been discounted to present values in determining recoverable amounts. Where the carrying amount of an individual non-current asset is greater than its recoverable amount the asset is revalued to its recoverable amount. To the extent that the revaluation decrement reverses a revaluation increment previously credited (a) Principles of Consolidation (c) Foreign Currency Transactions and Balances (d) Acquisitions of Assets (e) Revaluation of Non-Current Assets (b) Income Tax CABCHARGE AUSTRALIA LIMITED  AND CONTROLLED ENTITIES 20 ABN 99 001 958 390 NOTES TO THE FINANCIAL STATEMENTS  for the year ended 30 June 2001