Lead Manager

BABCOCK & BROWN PROSPECTUS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of Preparation
These historical consolidated pro-forma financial statements have been prepared as a special purpose financial
report in connection with the IPO of Babcock & Brown Limited (Babcock & Brown).The consolidated
pro-forma financial statements are those of the consolidated entity, comprising Babcock & Brown Limited (the
parent company) and all entities that Babcock & Brown will control subsequent to the restructure and IPO.The
historical consolidated pro-forma financial statements have been prepared in accordance with the measurement,
but not all the disclosure requirements of Accounting Standards and other mandatory professional reporting
requirements, including Urgent Issues Group Consensus Views, in Australia (AGAAP).
There have been departures from the disclosure requirements of Australian accounting standards where the
disclosures are not considered applicable given the pro-forma nature of these financial statements and the nature
of the restructured group subsequent to the IPO. Accordingly, the historical consolidated pro-forma financial
statements include some, but not all of the disclosure requirements of the following pronouncements:
• AASB 1005 Segment Reporting
• AASB 1008 Leases
• AASB 1016 Accounting for Investments in Associates
• AASB 1017 Related Party Disclosures
• AASB 1026 Statement of Cash Flows
• AASB 1033 Presentation and Disclosure of Financial Instruments
• AASB 1046 Director and Executive Disclosures by Disclosing Entities
These pro-forma financial statements comprise pro-forma statements of financial performance for the years
ending 31 December 2001, 2002 and 2003, pro-forma statements of cash flows for the years ending 31 December
2002 and 2003 and a pro-forma statement of financial position as at 31 December 2003 for Babcock & Brown
Limited and the entities it will control following the proposed public listing. A list of those entities is included in
note 36.
Information concerning the nature of pro-forma adjustments has been included at note 2.
(b) Presentation of a consolidated Pro-forma Balance Sheet and Income Statement prepared in
Accordance with Australian IFRS
Included within this special purpose financial report is a consolidated pro-forma Balance Sheet as at
31 December 2003 and a consolidated pro-forma Income Statement for the period ended 31 December 2003
prepared in accordance with the Australian equivalents to International Financial Reporting Standards (Australian
IFRS).The Australian IFRS consolidated pro-forma balance sheet and income statement have been reconciled to
the consolidated pro-forma statements of financial position and performance prepared under AGAAP.
Adjustments from AGAAP to Australian IFRS have been detailed at notes 5 and 6.
All other notes have been prepared in accordance with AGAAP.
(c) Reporting Currency
All numbers are reported in Australian dollars unless otherwise stated.
(d) Principles of Consolidation
The consolidated pro-forma financial statements are those of the consolidated entity, comprising Babcock &
Brown Limited (the parent company) and all entities that Babcock & Brown will control subsequent to the
restructure and IPO.
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