Integrated Reports Senwes Financial Review 2018 - Page 40

40 FINANCIAL REVIEW 16. The deferred tax asset and liability are disclosed in the statement of financial position as follows: GROUP 2018 R’m 2017 R’m Deferred tax asset 31 11 13 - Deferred tax liability (49) - (54) (17) Deferred tax (liability)/asset (18) 11 (41) (17) GROUP 2018 R’m 2018 R’m 2017 R’m 11 24 (17) 16 Temporary differences - movements during the year (29) (13) (24) (33) Deferred tax (liability)/asset (18) 11 (41) (17) Reconciliation of deferred tax (liability)/asset balance: GROUP 2017 % 2018 % 2017 % 28,0 28,0 28,0 28,0 Non-taxable income (dividends, accounting profits, impairment reversals) (0,1) (1,1) (0,3) (1,2) Other incentive allowances (0,4) (0,1) (0,5) (0,2) Other Total R’m 17 - 17 Increase in provision during the year 8 (14) (6) Balance as at 30 April 2017 Increase in provision during the year 8 - 3 3 11 3 - 6 4.2.5 Balance as at 30 April 2018 (8) - (8) 6 16.1 Grain risks The group is exposed to risks in the grain industry, which include the physical risk of holding inventory and non-compliance with grain contracts by counter-parties. Estimates for these risks are based on potential shortfalls and non-compliance with contracts at current market prices. AgriRewards is a deferred bonus scheme in terms of which Senwes will allocate a portion of its profits on an annual basis to customers to reward them for their loyalty during the year. The AgriRewards scheme was launched during August 2016. The scheme is not automatic and customers have to register to participate. All grain deliveries to Senwes silos from 1 May 2016 to 30 April 2017 were used as basis for this year's scheme. During April 2017 the board approved a credit of R54/ton for all registered customer deliveries. 1,0 0,5 4,6 0,9 - - - 0,1 Prior year adjustment (0,6) (0,1) (0,9) (0,2) Effective tax rate 27,9 27,2 30,9 27,4 The accumulated expense was reclassified to note 4.2.5 for the year ended April 2018. 17. DERIVATIVE FINANCIAL INSTRUMENTS GROUP 17.1 Current assets Forward purchase contracts 17.2 Current liabilities Forward purchase contracts Safex futures FINANCIAL REVIEW Grain risk R’m Balance as at 30 April 2016 Transferred to Other financial liabilities COMPANY 2018 % Non-deductable expenses (capital expenditure, donations, JV profits or losses) AgriRewards R’m 16.2 AgriRewards 15.3 Reconciliation of the tax rate Adjusted for: Note COMPANY 2017 R’m Standard tax rate GROUP AND COMPANY 2017 R’m 2018 R’m Balance at the beginning of the year PROVISIONS COMPANY COMPANY Notes 2018 R’m 2017 R’m 2018 R’m 2017 R’m 21.1.1.2; 21.5 53 128 37 1 66 169 13 167 21.1.1.2; 21.5 21.1.1.2; 21.5 56 10 165 4 3 10 163 4