Ophir Energy plc Annual Report and Accounts 2011

76
Ophir Energy plc Annual Report 2011
Notes to the financial statements continued
8 Taxation continued
(b) Reconciliation of the total tax charge
The tax benefit not recognised in the income statement is reconciled to the standard rate of corporation tax in the
UK of 26.5% (2010: 28%). The differences are reconciled below:
Year ended
31 Dec 2011
US$’000
Group
Year ended
31 Dec 2010
US$’000
Loss on operations before taxation (19,075) (19,278)
Loss on operations before taxation multiplied by the UK standard rate of corporation
tax of 26.5% (2010: 28%) (5,055) (5,398)
Non-deductible expenditure 36 35
Share-based payments 720 233
Non taxable income (3,669) –
Expenditure in tax exempt jurisdictions 216 3,281
Unrecognised deferred tax assets 7,761 1,886
Other (9) (37)
Total tax expense in the income statement – –
(c) Deferred income tax
Deferred income tax balances at 31 December relate to the following:
Year ended
31 Dec 2011
US$’000
Group
Year ended
31 Dec 2010
US$’000
Deferred tax liabilities:
Property plant and equipment (96) (34)
Deferred tax assets:
Revenue tax losses 96 34
– –
(d) Unrecognised tax losses
The Group has further tax losses arising in the UK and Australia totalling US$55,656,114 (2010: US$42,982,226)
that are available to carry forward indefinitely to offset against future taxable profits of the companies in which
the losses arose. Deferred tax assets have not been recognised in respect of these losses as there is not sufficient
certainty that taxable income will be realised in the future due to the nature of the Group’s international
exploration activities and the long lead times in either developing or otherwise realising exploration assets.
(e) Other unrecognised temporary differences
The Group has other unrecognised temporary differences in the UK, Australia and various African countries
totalling US$148,534,880 (2010: US$130,340,205) in respect of provisions and exploration expenditure for which
deferred tax assets have not been recognised.
(f) Change in corporation tax rate
Deferred tax has been calculated at the rates substantively enacted at the balance sheet date.
The main United Kingdom rate of corporation tax decreased from 28% to 26% with effect from 1 April 2011, and
legislation to reduce the rate to 25% with effect from 1 April 2012 has been substantively enacted during the year.
In addition, the United Kingdom Government announced on 23 March 2011 as part of its 2011 Budget that the
corporation tax rate was to be reduced to 24% from 1 April 2013 and to 23% from 1 April 2014. These reductions
have not been reflected in the deferred tax figures as legislation had not been substantively enacted at the
balance sheet date.