INDEPENDENCE GROUP NL ANNUAL REPORT 2017

Notes to the consolidated financial statements 30 June 2017 (continued) 5 Income tax (continued) (b) Amounts recognised directly in equity 2017 $'000 2016 $'000 Deferred income tax benefit (expense) related to items charged or credited to other comprehensive income or directly to equity: Recognition of hedge contracts 104 173 Costs associated with capital raising (2,258) - Income tax expense reported in equity (2,154) 173 (c) Numerical reconciliation of income tax expense to prima facie tax payable 2017 $'000 2016 $'000 Profit (loss) from continuing operations before income tax expense 26,417 (59,212) Tax expense (benefit) at the Australian tax rate of 30% (2016: 30%) 7,925 (17,764) Tax effect of amounts which are not deductible (taxable) in calculating taxable income: Share-based payments 51 (1,378) Non-deductible costs associated with acquisition of subsidiary 1,173 19,234 Other non-deductible items - 17 Capital losses not brought to account 84 - Previously unrecognised capital losses brought to account - (721) Difference in overseas tax rates 46 20 Overseas tax losses not brought to account 126 56 Adjustments for current tax of prior periods 1 94 Income tax expense (benefit) 9,406 (442) (35,823) 59,654 (d) Reconciliation of carry forward tax losses, income tax paid and effective income tax rate 2017 $'000 2016 $'000 Tax effected balances at 30% Carry forward tax losses at the beginning of the year 166,506 92,958 Tax losses arising (recouped) from current income tax benefit (expense) 32,065 17,529 Tax losses acquired through business combination - 56,019 Income tax paid during the year - - Carry forward tax losses at the end of the year 198,571 166,506 Effective income tax rate -% -% Independence Group NL 46 76 — IGO ANNUAL REPORT 2017 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017