EQ Resources Limited Annual Report 2021

EQ Resources Limited Annual Report 2021 47 ANNUAL Report June 2021 Notes to the Consolidated Financial Statements 33 2. REVENUE AND OTHER INCOME Revenue 2021 $ 2020 $ Sales and hire income 4,522,982 735,480 Sub-lease rent (unincorporated joint venture) 17,578 1,455 Interest received – other persons/corporation 6,520 11,643 4,547,080 748,578 Other income: Government subsidies (various) 69,872 107,228 R&D tax offset 610,106 199,186 Diesel fuel rebates 191,642 32,453 Other income - - 871,620 338,867 Total revenue and other income 5,418,700 1,087,445 3. INCOME TAX 2021 $ 2020 $ (a) Reconciliation of income tax expense to prima facie tax payable Profit / (loss) before income tax (4,574,191) (3,015,680) Tax at the Australian rate of 26.0% (30 June 2020: 27.5%) (1,189,290) (829,312) Tax effect of amounts which are not taxable in calculating taxable income: Non-deductible expenses 72,656 11,725 Non-assessable income (170,003) (54,776) Deferred tax assets not recognised 1,286,637 872,363 - - (b) Unrecognised deferred tax assets Balance at beginning of year 5,219,268 5,583,942 Current year not recognized 669,121 872,363 Adjustments in respect of prior year tax balances (593,284) (876,769) Tax rate change 26% to 25% (Prior Year: Tax rate change from 27.5% to 26%) (171,333) (360,268) Balance at end of year 5,123,772 5,219,268 Deferred tax assets have not been recognized in respect of the following items: Tax losses 7,112,830 6,278,688 Less: other timing differences (1,989,058) (1,059,420) Net deferred tax assets 5,123,772 5,219,268 No provision for income tax is considered necessary in respect of the Company for the period ended 30 June 2021. Deferred tax assets have not been recognised in respect of these items because it is not probable in the short to medium term that these assets will be realised. The Group has total tax losses at 30 June 2021 of $28,451,322 (2020: $24,148,795). A future income tax benefit which may arise from tax losses of 26% of approximately $7,112,830 will only be obtained if:  the parent and the subsidiaries derive future assessable income of a nature and of an amount sufficient to enable the benefit from the deductions for the losses to be realised;  the parent and the subsidiaries continue to comply with the conditions for deductibility imposed by the law; and  no changes in tax legislation adversely affect the Parent and the Subsidiaries in realising the benefit from the deductions for the losses, i.e. current tax legislation permits carried forward tax losses to be carried forward indefinitely.