Cellmid 2018 Annual Report

NOTES TO THE

FINANCIAL STATEMENTS

CONTINUED

5. INCOME TAX (CONTINUED)

2018 2017

$ $

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

Income tax expense (2,430) (35,597)

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

Loss for year before income tax expense (3,730,185) (4,446,676)

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

27.50% (2017: 27.50%) (1,025,801) (1,222,836)

Add / (less) tax effect of:

Adjustment for tax-rate differences in foreign jurisdictions (18,878) (136,957)

Share-based payments 30,632 4,925

Sundry items 243,684 350,878

Research and development expenditure 159,715 329,154

Tax losses not brought to account 608,218 639,239

Income tax expense (2,430) (35,597)

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

Australia Japan USA Total

Movements in unused tax losses $ $ $ $

Carried forward unused tax losses at the

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

Prior period differences between tax

calculation and income tax return (144,755) - - (144,755)

Actual carried forward unused tax losses at the

beginning of the ﬁnancial year 19,559,625 1,957,069 547,825 22,064,519

Current unused / (used) tax losses for which no

deferred tax asset has been recognised 2,281,965 (344,783) 274,520 2,211,702

Carried forward unused tax losses at the end

of the ﬁnancial year 21,841,590 1,612,286 822,345 24,276,221

Notional tax rate 27.50% 27.80% 21.00%

Potential future tax beneﬁt 6,006,437 448,216 172,693 6,627,346