ANNUAL REPORT 2006

NOTE 3: INCOME TAX
Consolidated
2006
$
2005
$
2006
$
Parent
2005
$
Income tax recognised in profit or loss - - - -
The prima facie income tax expense/benefit
on pre-tax accounting loss from operations
reconciles to the income tax expense in the
financial statements as follows:
Accounting loss before income tax (7,664,610) (3,186,373) (7,810,550) (3,186,373)
Income tax benefit calculated at 30% (2,299,383) (955,912) (2,343,165) (955,912)
Non - deductible expenses 48,983 210,425 48,983 210,425
Unrecognised tax losses 2,250,400 745,487 2,294,182 745,487
Income tax expense/benefit - - - -
A N N U A L R E P O R T 2 0 0 6
The Consolidated Entity has unconfirmed carried forward income tax losses of approximately $31,707,008 (2005:
$24,059,735). The potential deferred tax benefit of these tax losses has not been recognised as an asset because
recovery of the tax losses is not considered probable in the context of AASB 112. The Company tax rate is 30% in
the 2005-2006 income tax year (30%, 2004-2005). The tax rate for South African subsidiary companies is 29%.
Of the carried forward tax losses, $3,945,178 relate to South African operations. The benefit of these tax losses will
only be realised if:
a) the companies within the Consolidated Entity derive future assessable income of a nature and of an amount
sufficient to enable the benefit from the deduction for the losses to be realised;
b) the companies within the Consolidated Entity comply with the conditions for deductibility imposed by the law;
and
c) no changes in tax legislation adversely affect the companies within the Consolidated Entity in realising the
benefit from the deduction for the loss.
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