Annual Report - Končar Distribution and Special Transformers Inc.

Notes to the financial statements - continued
15. CORPORATE INCOME TAX
The Company calculates its corporate income tax liability at the preferential rate of 7% as it is the beneficiary of incentives in
line with the Law on incentives for the “High-Voltage Laboratory - Development of the Laboratory and extension of production
capacities” project. The Government issued a confirmation that the aforementioned investments fulfil the requirements
in accordance with the Law on incentives on 3 September 2010 and that the Company can use these incentives. The
maximal amount of granted incentive amounted to HRK 37,327 thousand. In 2011 the Company calculated the corporate
income tax liability at the preferential rate of 9%.
The adjustment of accounting income to taxable income is as follows:
Accounting profit before taxation
Corporate income tax at 20%
Non-allowable expenses (20%)
Decreases of taxable basis (20%)
Adjusted corporate income tax
Incentive
Tax liability
Effective tax rate
Advances paid
Tax receivable
Tax payable
Notes 2012 in HRK 2011 in HRK
35,644,632 37,019,784
7,128,926 7,403,957
1,191,338 3,406,984
(1,596,060) (1,188,653)
6,724,204 9,622,288
(4,370,732) (6,254,487)
2,353,472 3,367,801
7% 9%
1,683,900 1,712,513
— —
34 669,572 1,655,288
16. EARNINGS PER SHARE
Net profit for the year
Weighted average number of shares (ordinary and preference)
Earnings per share in HRK
2012 in HRK 2011 in HRK
33,291,160 33,651,983
255,616 255,616
130.24 131.65
42