Notes to the combined and consolidated financial statements - Mondi

Notes to the combined and
consolidated financial statements continued
for the year ended 31 December 2009
8 Tax charge (continued)
(b) Factors affecting tax charge for the year
The Group’s effective rate of tax before special items for the year ended 31 December 2009, calculated on profit before tax before
special items and including net income from associates, is 32% (2008: 29%).
The Group’s total tax charge for the year can be reconciled to the tax on the Group’s profit/(loss) before tax at the UK corporation
tax rate of 28% (2008: 28.5%), as follows:
E million 2009 2008
Profit/(loss) before tax 49 (103)
Tax on profit/(loss) before tax calculated at UK corporation tax rate of
28% (2008: 28.5%) 14 (29)
Tax effect of net income from associates, calculated at 28% (2008: 28.5%) (1) (1)
Tax effects of:
Expenses not deductible for tax purposes 27 86
Intangible amortisation and non-qualifying depreciation (4) (8)
Non-deductible expenses included in special items 22 80
Other non-deductible expenses 9 14
Non-taxable income (1) –
Other non-taxable income (1) –
Temporary difference adjustments 20 38
Changes in tax rates 1 (1) (8)
Current year tax losses and other temporary differences not recognised 30 55
Prior period tax losses and other temporary differences not previously recognised (9) (9)
Other adjustments (7) (16)
Current tax prior period adjustments 3 –
South African Secondary Tax on Companies 1 3
Effect of differences between local rates and UK rate (13) (22)
Other adjustments 2 3
Tax charge for the year 52 78
Note:
1
Principally relates to adjustments made to deferred tax balances based on substantively enacted future reductions in corporation tax rates in Israel (2008: relates to
reductions in corporation tax rates in Russia and South Africa).
IAS 1 requires income from associates to be presented net of tax on the face of the combined and consolidated income
statement. The Group’s share of its associates’ tax is therefore not presented within the Group’s total tax charge. The associates’
tax charge included within ‘Net income from associates’ for the year ended 31 December 2009 is E1 million (2008: E1 million).
114 Annual report and accounts 2009 Mondi Group