CFSL - Annual report 2018

EXPLANATORY NOTES 30 SEPTEMBER 2018 10. ALLOWANCE FOR CREDIT IMPAIRMENT GROUP COMPANY Sep-18 Sep-17 Sep-18 Sep-17 MUR m MUR m MUR m MUR m Net provision for credit impairment - Leases (1.5) 17.8 - - - Other credit agreements 153.5 126.4 - - - Loans and advances 67.0 49.4 - - Bad debts written off for which no provision was made - Leases - 0.7 - - Bad debts recovered - Leases (0.2) (0.8) - - - Other credit agreements (3.0) (3.5) - - - Loans and advances (1.5) (3.7) - - 214.3 186.3 - - 11. TAXATION GROUP COMPANY Sep-18 Sep-17 Sep-18 Sep-17 (a) Income tax expense/(credit) MUR m MUR m MUR m MUR m Current income tax at 15% (2017:15%) 91.3 83.5 - - Corporate social responsibility tax at 2% (2017 : 2%) 13.5 19.6 - - (Under)/over provision in previous year 1.6 (0.5) - - Deferred tax (credit)/expense (17.1) 4.7 - (0.5) Income tax expense/(credit) 89.3 107.3 - (0.5) The tax charge shown in profit or loss differs from the tax charge that would apply if all profits had been charged at the Company’s statutory rate. A reconciliation between the tax expense and the accounting profit at 17% is as follows: GROUP COMPANY Sep-18 Sep-17 Sep-18 Sep-17 MUR m MUR m MUR m MUR m Accounting profit before tax 441.4 411.5 4.5 2,836.5 Statutory income tax rate of 15% (2017: 15%) 66.1 61.7 0.7 425.5 Corporate social responsibility tax at 2% (2017: 2%) 13.5 19.6 - - Tax losses utilised 1.1 (3.1) - (2.1) Deferred tax not recognised 6.7 12.3 0.5 - Deferred tax rate differential arising on Corporate social responsibility tax (1.4) (2.3) - - Under provision in previous years 1.6 - - - Income not subject to tax (9.3) (3.3) (9.8) (445.9) Non–deductible expenses 11.0 22.4 8.6 22.0 Income tax expense/(credit) 89.3 107.3 - (0.5) Main items of non deductible expense include unrealized exchange losses, fair value loss on financial asset and expense attributable to exempt income. Income not subject to tax includes fair value gain on land classified as investment properties, dividend income and net gain on business combination. (b) Income tax liabilities GROUP COMPANY Sep-18 Sep-17 Sep-18 Sep-17 MUR m MUR m MUR m MUR m At 1 October, 28.3 45.5 - - Paid during the year (88.4) (112.0) - - Charge for the year 91.3 106.6 - - Over/(under) provision in previous year 1.6 (0.5) - - Disposal of subsidiaries - (11.3) - - Acquisition of subsidiaries 0.2 - - - 33.0 28.3 - - 95 CIM FINANCIAL SERVICES LTD ANNUAL REPORT 2018