Ann: Quarterly Activities Report - Period Ending 31 July 2018, page-6

"The main thing I found out is that we owe the ATO $1 million"

These things always make me mad.

These things have a way of chewing up Management's time and energy, and putting HAV (and its subsidiaries) on the ATO's radar for further audits: income tax, FBT, GST, superannuation etc.

In the release, it said that an AusIndustry review has been carried out on Havilah’s R&D projects registered for the income years ended 31 July2013 and 31 July 2014 (the only two years in which Havilah claimed R&D expenditure).

I went back and had a look at the respective HAV Annual Reports for those 2 years plus the next year:

2013 - $Nil
2014 - $Nil
2015 - $1,226,407 disclosed in the Consolidated Statement of Cash Flows (Research and Development Tax Incentives Received, shown as a cash flow from investing activities)

The Company said it engaged a Top Four accounting firm to prepare and lodge the applications and prepare the R&D Tax Incentive Schedules.

The ultimate responsibility lies with HAV Management to sign-off on these R&D incentive returns. Just like for the Company Income Tax Return, FBT return, GST return etc.

IF we are required to repay any R&D incentivises back to the ATO, this will be another 'black mark' against Management.

The Top 4 firm walks away with its large fee. Good luck trying to get that fee back, IF the R&D incentive monies are paid back to the ATO.

Cheers

These are only my random thoughts and it does not constitute investment advice. Before acting on any information you read and before making any financial or investment decisions, you should always consult your advisor(s) or other relevant professional experts.

HAV fanboy: still drinking the Kool-Aid