Senwes Annual Financial Statements 2022 | Page 53

SENWES ANNUAL FINANCIAL STATEMENTS 2022
18 . INCOME TAX 18.1 Tax expense
GROUP 2022 R ' m
2021 R ' m
COMPANY 2022 R ' m
SA normal tax – current year
174
166
26
-
Decrease in deferred tax ( liability )/ asset
34
20
14
28
Change in tax rate
( 6 )
-
( 3 )
-
Previous year adjustment to deferred tax
-
( 9 )
-
-
Previous year adjustment on income tax
-
( 1 )
-
( 1 )
Total tax expense
202
176
37
27
18.2 Deferred tax asset /( liability )
GROUP 2022 R ' m
* 2021 R ' m
COMPANY 2022 R ' m
The main temporary differences : Property , plant and equipment
( 255 )
( 260 )
( 73 )
( 76 )
Inventory provisions
40
25
13
20
Trade and other receivables
13
9
9
8
Other provisions
65
62
45
26
AgriRewards
( 95 )
( 60 )
( 81 )
( 58 )
Share incentive
( 6 )
( 3 )
( 6 )
( 3 )
IFRS 16 adjustment
3
-
-
-
Operational losses carried forward **
44
96
-
3
CGT losses carried forward ****
52
37
18
19
Other
5
-
5
-
Investment in subsidiaries ***
( 27 )
( 35 )
( 33 )
-
Investment in joint ventures and associates
17
17
-
( 34 )
Deferred tax liability
( 144 )
( 112 )
( 103 )
( 95 )
* Refer to note 6.1 for details regarding adjusted prior year figures ** The operational losses carried forward relate mainly to Hinterland SA ( Pty ) Ltd`s (" Hinterland SA ") and Agri Credit Solutions ( Pty ) Ltd`s (" ACS ") assessed losses . The deferred tax asset of ACS was recognised in full while the recognition of Hinterland SA ' s asset is only a portion of the total . For IFRS purposes an asset can be recognised to the extent that it is probable that the asset will be able to be utilised through future profits , no time limit on utilisations exists for recognition . ACS realised a profit during the year under review and the forecast and budget of the company reflects a profit for the foreseeable future . Hinterland SA also realised a profit in the current year . The actual recognition was based on the budget and forecast of the following year . The situation will be monitored and if profits don ' t realise as expected in the following years , the asset will be reconsidered . *** Consists of deferred tax on the Hinterland Holdings ( Pty ) Ltd (" Hinterland ") investment and provisions carried over to Hinterland as part of the merger transaction . **** At group level , on 30 April 2022 , R29 million relate to Africum ( Pty ) Ltd`s CGT losses carried forward ( 2021 : R15 million ).
The deferred tax asset and liability are disclosed in the statement of financial position as follows :
GROUP
COMPANY
2022 R ' m
* 2021 R ' m
2022 R ' m
2021 R ' m
Deferred tax asset
96
148
-
-
at normal tax rate
27
94
-
-
at capital gains tax rate
69
54
-
-
Deferred tax liability
( 240 )
( 260 )
( 103 )
( 95 )
at normal tax rate
16
-
( 48 )
( 38 )
at capital gains tax rate
( 256 )
( 260 )
( 55 )
( 57 )
Deferred tax liability
( 144 )
( 112 )
( 103 )
( 95 )
Reconciliation of deferred tax asset /( liability ) balance : Balance at the beginning of the year
( 112 )
( 85 )
( 95 )
( 68 )
Temporary differences - change in capital gains tax rate
6
-
3
-
Temporary differences - movements during the year
( 34 )
( 20 )
( 14 )
( 27 )
Previous year adjustment to deferred tax
-
9
-
-
Current year subsidiary acquisitions and PPA adjustments **
( 9 )
( 16 )
-
-
Revaluations and other movements through equity
5
-
3
-
Deferred tax liability
( 144 )
( 112 )
( 103 )
( 95 )
* Refer to note 6.1 for details regarding adjusted prior year figures
** This relates to the acquisition of Suidwes Holdings ( Pty ) Ltd as well as the step acquisition of Hinterland Holdings ( Pty ) Ltd during the previous year .
18.3 Reconciliation of the tax rate
GROUP 2021
%
2021 %
COMPANY 2021
%
Standard tax rate
28.0
28.0
28.0
28.0
Adjusted for : Non-taxable income ( dividends , accounting profits , impairment reversals )
( 1.5 )
( 5.9 )
( 6.4 )
( 7.9 )
Other incentive allowances
( 0.2 )
( 0.1 )
( 0.4 )
( 0.3 )
Non-deductable expenses ( capital expenditure , donations , JV profits or losses )
0.3
5.6
1.1
4.4
Other
-
0.4
-
-
Utilisation of losses previously not recognised
( 2.0 )
-
-
-
Prior year adjustment
-
( 1.3 )
0.1
( 1.0 )
Take-on balances due to acquisition of subsidiaries
( 0.6 )
( 3.9 )
-
( 1.9 )
Change in tax rate
( 0.7 )
-
( 1.4 )
-
Effective tax rate
23.3
22.8
21.0
21.3
2021 R ' m
2021 R ' m
2021 %

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