Notes to the annual financial statements

FOR THE YEAR ENDED 31 MARCH 2009

« Note 9 Note 11 »
         
10. TAXATION    
      2009   2008  
      R million   R million  
  10.1 Deferred taxation     
    Deferred taxation liability 825   1 454  
       Property, plant and equipment 359   334  
       Intangibles 10   13  
       Inventories 152   109  
       Provisions (61)  (68) 
       Biological agricultural assets 38   26  
       Investments (accounted for directly in equity) 372   1 027  
       Tax losses (25)  (38) 
       Future capital gain taxable 32   35  
       Other (52)  16  
    Deferred tax asset (10)  (4) 
       Property, plant and equipment 21   (2) 
       Inventories 4   –  
       Provisions (2)  (2) 
       Tax losses (25)   –  
       Other (8)   –  
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    Net deferred taxation  815   1 450  
    The movement between balances of deferred taxation at the    
    beginning and end of the year can be analysed as follows:    
    Beginning of the year 1 450   1 081  
    Rate change –   (25) 
    As per income statement (14)  79  
    Direct in equity (621)  315  
      815   1 450  
   

No deferred tax is provided on temporary differences relating to investments in subsidiary companies and joint ventures as Remgro controls the dividend policy of these companies and consequently also controls the reversal of the temporary differences.

Deferred taxation on capital distributions received from 1 October 2001 to 30 September 2007 is provided at 14.0%, as a result of the promulgation of retrospective legislation.
      2009   2008  
      R million   R million  
  10.2 Tax lossess    
    Estimated tax losses available for set-off against future taxable income 118   189  
    Utilised to create deferred tax asset (36)  (135) 
      82   54  
     
    The calculated capital losses on 31 March, which could be set off against future capital gains
    of the Company, amount to R3 906 million.
         
  10.3 Secondary taxation on companies (STC)    
         
    The STC credits on 31 March, which could be set off against future    
       dividend payments, amount to    
       – The Company 3 260   76  
       – Subsidiary companies 2 595   2 970  
    Unutilised STC credits 5 855   3 046  
     
    Remgro’s history of dividends received compared to ordinary dividends paid suggests
    increasing STC credits over time. It is therefore unlikely that Remgro’s STC credits will
    be utilised against ordinary dividends paid in the foreseeable future, and consequently    
    no deferred tax asset has been created for the Company’s unutilised STC credits.    
         
  10.4 Taxation in income statement    
   
Consolidated    
Current   261   313  
– current year – South African normal taxation 246   290  
  – Taxation on capital gain 2   17  
  – South African normal taxation 7   8  
    255   315  
– previous year – South African normal taxation 6   (2) 
   
Secondary taxation on companies – current 21   27  
Deferred – current year –   56  
  – previous year (10)  1  
  – rate change –   (13) 
  – tax on capital gain (4)  35  
    268   419  
   
The Company
Secondary taxation on companies – current 686   – 
         
  10.5 Reconciliation of effective tax rate of the Company and its    
    subsidiaries with standard rate %   %  
    Effective tax rate 21.6   12.9  
    Reduction/(increase) in standard rate as a result of:
       Exempt dividend income 7.9   2.3  
       Non-taxable capital profit 0.6   13.5  
       Other non-taxable income 2.0   3.6  
       Foreign taxation (2.7)  (1.7) 
       Previous year taxation 0.2   –  
       Rate change –   0.4  
       Future capital gain payable 0.1   (1.2) 
       Secondary taxation on companies (1.7)  (0.8) 
    Standard rate 28.0   29.0