Cellmid 2017 Annual Report

NOTES TO THE

FINANCIAL STATEMENTS

CONTINUED

5. INCOME TAX (CONTINUED)

2017 2016

$ $

(a) The major components of income tax expense comprise:

Income tax expense (35,597) (11,045)

(b) Numerical reconciliation of income tax expense to accounting loss:

Loss for year before income tax expense (4,434,539) (3,487,871)

Prima facie tax beneﬁt on loss from ordinary activities before income tax at 30.58%

(2016: 29.89%) (1,356,082) (1,042,630)

Add / (less) tax effect of:

Share based payment 4,925 52,837

Sundry items 96,656 46,743

Research and development expenditure 583,376 562,650

Research and development core technology expenditure - (190,438)

Tax losses not brought to account 635,528 559,793

Income tax expense (35,597) (11,045)

The Group operates across three tax jurisdictions being Australia, Japan and USA each with different corporate tax rates. The

applied tax rate of 30.58% represents the average tax rate applicable to the Group for the ﬁnancial year ended 30 June 2017.

Australia Japan USA Total

Movements in unused tax losses $ $ $ $

Carried forward unused tax losses at the

beginning of the ﬁnancial year 17,043,489 2,168,282 - 19,211,771

Prior period differences between tax

calculation and income tax return 79,152 - - 79,152

Actual carried forward unused tax losses at

the beginning of the ﬁnancial year 17,122,641 2,168,282 19,290,923

Current unused tax losses for which no deferred

tax asset has been recognised 2,581,739 (211,213) 547,825 2,918,351

Carried forward unused tax losses at the

end of the ﬁnancial year 19,704,380 1,957,069 547,825 22,209,274

Notional tax rate 30.00% 34.06% 38.90%

Potential future tax beneﬁt 5,911,314 666,577 213,104 6,790,995

Consolidated