INDEPENDENCE GROUP NL ANNUAL REPORT 2017

Notes to the consolidated financial statements 30 June 2017 (continued) 5 Income tax (continued) (e) Deferred tax assets and liabilities Balance Sheet Profit or loss Equity Acquisition of Subsidiary 2017 $'000 2016 $'000 2017 $'000 2016 $'000 2017 $'000 2016 $'000 2017 $'000 2016 $'000 Deferred tax liabilities Capitalised exploration expenditure (13,285) (20,393) (7,108) (4,521) - - - - Mine properties (115,721) (73,270) 42,451 26,853 - - - 1,974 Deferred gains and losses on hedging contracts (197) (1,440) (1,544) (323) 301 296 - - Trade debtors (6,906) (3,932) 2,974 2,555 - - - - Consumable inventories (2,514) (1,700) 814 (48) - - - - Other (1,280) (214) 1,066 183 - - - - Gross deferred tax liabilities (139,903) (100,949) 38,653 24,699 301 296 - 1,974 Deferred tax assets Property, plant and equipment 17,965 21,370 3,405 (730) - - - - Deferred losses on hedged commodity contracts 365 1,711 1,543 (684) (197) (123) - - Concentrate inventories - - - 398 - - - - Business-related capital allowances 5,509 5,007 2,056 1,554 (2,258) - (300) (5,653) Provision for employee entitlements 4,740 2,654 (2,086) 46 - - - - Provision for rehabilitation 21,813 19,908 (1,905) (9,636) - - - (1,974) Mining information 715 1,022 307 370 - - - - Carry forward tax losses 198,571 166,506 (32,065) (17,529) - - - (56,019) Other 1,751 1,249 (502) 1,070 - - - - Gross deferred tax assets 251,429 219,427 (29,247) (25,141) (2,455) (123) (300) (63,646) Deferred tax expense (benefit) 111,526 118,478 9,406 (442) (2,154) 173 (300) (61,672) (f) Tax losses In addition to the above recognised tax losses, the Group also has the following capital tax losses for which no deferred tax asset has been recognised: 2017 $'000 2016 $'000 Unrecognised capital tax losses 280 - Potential tax benefit @ 30% (2016: 30%) 84 - (g) Recognition and measurement Current taxes The income tax expense or benefit for the period is the tax payable on the current period's taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses. Independence Group NL 47 IGO ANNUAL REPORT 2017— 77 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017