Notes to the annual financial statements
FOR THE YEAR ENDED 31 MARCH 2010
| « Note 10 | Note 12 » |
11. |
TAXATION |
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| 11.1 | Deferred taxation | |||
| 2010 R million |
2009 R million |
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| Deferred taxation liability | 1 162 | 825 | ||
| Property, plant and equipment | 432 | 359 | ||
| Intangibles | 4 | 10 | ||
| Inventories | 173 | 152 | ||
| Provisions | (48) | (61) | ||
| Biological agricultural assets | 46 | 38 | ||
| Investments | 614 | 372 | ||
| Tax losses | (14) | (25) | ||
| Future capital gain taxable | 46 | 32 | ||
| Other | (91) | (52) | ||
| Deferred tax asset | (6) | (10) | ||
| Property, plant and equipment | (1) | 21 | ||
| Inventories | – | 4 | ||
| Provisions | (3) | (2) | ||
| Tax losses | – | (25) | ||
| Other | (2) | (8) | ||
| Net deferred taxation | 1 156 | 815 | ||
| The movement between balances of deferred taxation at the | ||||
| beginning and end of the year can be analysed as follows: | ||||
| Beginning of the year | 815 | 1 450 | ||
| Businesses acquired | 5 | – | ||
| As per income statement | 117 | (14) | ||
| Accounted for in other comprehensive income | 219 | (621) | ||
| 1 156 | 815 | |||
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.
| 11.2 | Tax losses | |||
| 2010 R million |
2009 R million |
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| Estimated tax losses available for set-off against future taxable income | 215 | 118 | ||
| Utilised to create deferred tax asset | (128) | (36) | ||
| 87 | 82 | |||
| The calculated capital losses on 31 March, which could be set off against future capital | ||||
| gains of the Company, amount to R3 906 million (2009: R3 906 million). | ||||
| 11.3 | Secondary taxation on companies (STC) | |||
| The STC credits on 31 March, which could be set off against future dividend payments, | ||||
| amount to | ||||
| – The Company | 4 727 | 3 260 | ||
| – Subsidiary companies | 1 794 | 2 595 | ||
| Unutilised STC credits | 6 521 | 5 855 | ||
| 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. |
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| 11.4 | Taxation in income statement | |||
CONSOLIDATED |
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| Current | 172 | 261 | ||
| – current year – South African normal taxation | 167 | 246 | ||
| – Taxation on capital gain | – | 2 | ||
| – Foreign taxation | 8 | 7 | ||
| 175 | 255 | |||
| – previous year – South African normal taxation | (3) | 6 | ||
| Secondary taxation on companies – current | 20 | 21 | ||
| Deferred – current year | 107 | – | ||
| – previous year | 2 | (10) | ||
| – tax on capital gain | 8 | (4) | ||
| 309 | 268 | |||
THE COMPANY |
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| Secondary taxation on companies – current | – | 686 | ||
| 11.5 | Reconciliation of effective tax rate of the Company and its subsidiaries with standard rate | % | % | |
| Effective tax rate | 36.1 | 33.5 | ||
| Reduction/(increase) in standard rate as a result of: | ||||
| Exempt dividend income | 4.0 | 12.2 | ||
| Non-taxable capital profit | – | 0.9 | ||
| Other non-taxable expenditure | (8.2) | (12.3) | ||
| Foreign taxation | (0.9) | (4.2) | ||
| Previous year taxation | 0.2 | 0.3 | ||
| Future capital gain payable | (0.9) | 0.2 | ||
| Secondary taxation on companies | (2.3) | (2.6) | ||
| Standard rate | 28.0 | 28.0 |