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NOTES TO THE FINANCIAL STATEMENTS CONTINUED

Balance Sheet Income Statement
The Group The Group

2007 2006 2007 2006
$’000 $’000 $’000 $’000
NOTE 7 — TAXATION (CONTINUED)
(c) Deferred income tax
Deferred tax liabilities — The Group
Deferred tax liabilities comprise:
Difference in depreciation and amortisation of property,
plant and equipment for accounting and income tax purposes 3,972 3,375 597 (511)
Investment properties 4,217 2,716 1,501 304
Available-for-sale investments 2,590 4,665 — —
Interest and holding charges capitalised 802 950 (148) (203)
Fair value of cash flow hedges 466 191 (5) —
Expenditure currently deductible for tax but deferred and
amortised for accounting purposes 995 821 174 193
Prepayments 200 184 16 80
Share-based payments deductible for tax but deferred and
amortised for accounting purposes 560 — 578 —
Share of partnership timing differences 1,148 1,696 (548) 911
Sundry items 136 267 (131) (167)
15,086 14,865
Less: Deferred tax liabilities of the tax-consolidated group offset
against deferred tax assets (13,843) (13,761)
1,243 1,104
Deferred tax assets — The Group
Deferred tax assets comprise:
Provisions and accrued employee benefits not currently deductible 4,722 6,392 1,670 1,654
Unrealised foreign exchange losses not currently deductible 156 49 (107) 65
Unrealised foreign exchange differences on hedge of net investment 6 — — —
Deferred revenue 1,740 2,157 417 (769)
Difference in depreciation and amortisation of property, plant and
equipment for accounting and income tax purposes 3,146 2,988 (158) 18
Lease termination payment not currently deductible 840 — (840) —
Share of partnership timing differences 5,450 4,443 (1,007) (2,645)
Capital losses carried forward 6,023 7,382 1,359 471
Sundry items 404 331 (73) 10
22,487 23,742
Less: Deferred tax liabilities of the tax-consolidated group offset against
deferred tax assets (13,843) (13,761)
8,644 9,981

Deferred tax income/(expense) — The Group

3,295 (589)

Balance Sheet Income Statement
Parent Entity Parent Entity

2007
$’000
2006
$’000
2007
$’000
2006
$’000
NOTE 7 — TAXATION (CONTINUED)
Deferred tax liabilities — Parent Entity
Deferred tax liabilities comprise:
Share-based payment deductible for tax but deferred and amortised
for accounting purposes
Difference in depreciation and amortisation of property, plant and
equipment for accounting and income tax purposes
Other investments
560
13
2,590
—
14
2,801
578
(1)
—
(41)
1,358
7
—
(2)
—
(78)
292
(15)
Less: Deferred tax liabilities offset against deferred tax assets
3,163
(3,163)
2,815
(2,815)
— —
Deferred tax assets — Parent Entity
Deferred tax assets comprise:
Provisions and accrued employee benefits not currently deductible
Tax losses carried forward
Sundry items
503
6,023
33
462
7,381
40
Less: Deferred tax liabilities offset against deferred tax assets
6,559
(3,163)
7,883
(2,815)
3,396 5,068
Deferred tax income — Parent Entity 1,901 197

At 30 June 2007, a deferred tax liability relating to investments in subsidiaries has not been recognised because the Parent Entity
controls whether the liability will be incurred and it is satisfied that it will not be incurred in the foreseeable future.

The Group Parent Entity

2007
$’000
2006
$’000
2007
$’000
2006
$’000
Unrecognised deferred tax assets
Capital losses
Revenue losses — foreign
Temporary differences — foreign
—
49,596
3,470
3,286
46,507
—
—
—
—
3,286
—
—
53,066 49,793 — 3,286

Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable profit will be
available against which the Group can utilise the benefits.

The Group has tax revenue losses arising in Germany of $130,516,000 (2006: $122,388,000) that are available for offset against
future taxable profits of the companies in which the losses arose. The availability of these tax losses is subject to certain utilisation
limits and ongoing availability tests under German tax law. These losses are not recognised as a deferred tax asset.

The Group has recognised a deferred tax asset in respect of capital losses available to offset fair value revaluation gains for
available-for-sale investments and investment properties. The Group has no remaining capital losses, arising in Australia, which
are yet to be recognised as a deferred tax asset.

At 30 June 2007, there is no recognised deferred income tax liability (2006: $nil) for taxes that would be payable on the unremitted
earnings of certain of the Group’s subsidiaries or associates.

Tax consolidation

The Parent Entity and its wholly-owned Australian resident subsidiaries have formed a tax-consolidated group with effect from
1 July 2002. Amalgamated Holdings Limited (Parent Entity) is the head entity for the tax-consolidated group. Members of the
group have entered into a tax sharing arrangement in order to allocate current and deferred tax amounts to the wholly-owned
subsidiaries using a ‘‘group allocation method approach’’. The Parent Entity recognises deferred tax assets arising from unused tax
losses (including capital losses) of the tax-consolidated group to the extent that it is probable that future taxable profits (including
capital gains) of the tax-consolidated group will be available against which the asset can be utilised. In addition, the agreement

provides for the allocation of income tax liabilities between the entities should the head entity default on its tax payment obligations.

 

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