Annual Report 2006 - Venture Corporation Limited

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notes to financial statements December 31, 2006 23 SHARE CAPITAL AND RESERVES (Cont’d) The total number of options outstanding to subscribe for ordinary shares as at end of the year was 12,103,000 (2005: 14,607,000). INVESTMENTS REVALUATION RESERVE This represents gains and losses arising from changes in fair values (except for impairment losses which are recognised directly in profit and loss) for available-for-sale investments (Note 7). RESERVE FUND This represents a part of the profit after tax of a subsidiary operating in the People’s Republic of China (“PRC”) transferred to the reserve fund in accordance with local requirements. This legal reserve cannot be distributed or reduced except where approval is obtained from the relevant PRC authority to apply the amount either in setting off accumulated losses or increasing capital. 24 REVENUE The Group 2006 2005 $’000 $’000 Rendering of electronic manufacturing, engineering, design and fulfilment services 3,124,165 3,237,525 Dividend income 687 510 3,124,852 3,238,035 25 OTHER OPERATING INCOME The Group 2006 2005 $’000 $’000 Commission received 29 57 Fair value gain on derivative financial instruments 23,620 4,600 Government grants 37 46 Gain on disposal of associates - 621 Gain on disposal of available-for-sale investments - 3,330 Rental income - 51 Other income 1,813 3,934 Total 25,499 12,639 26 INVESTMENT REVENUE The Group 2006 2005 $’000 $’000 Interest on bank deposits 19,554 13,575 Interest on debt securities 2,554 3,179 Interest on credit derivative notes 8,452 8,568 Total 30,560 25,322 78 venture corporation limited
notes to financial statements December 31, 2006 27 INCOME TAX EXPENSE The Group 2006 2005 $’000 $’000 Income tax on profit for the year: Current year - Singapore 10,800 4,256 - Foreign 2,883 2,855 Overprovision in prior years (1,461) (576) Deferred income tax (Note 21): Current year (584) (18) Overprovision of deferred tax liabilities in prior years - (1,108) Total 11,638 5,409 The income tax expense varied from the amount of income tax expense determined by applying the Singapore income tax rate of 20% (2005: 20%) to profit before income tax as a result of the following differences: The Group 2006 2005 $’000 $’000 Income tax expense at statutory tax rate 50,516 41,417 Non allowable items 872 3,378 Overprovision of income tax in prior years, net (1,461) (1,684) Prior year’s tax loss carryforwards utilised (2) (1,479) Deferred tax benefits not recognised 236 2,511 Effect of different tax rates of overseas operations 8,863 9,327 Tax exempt income (47,352) (48,126) Utilisation of deferred tax benefits previously not recognised (22) - Other items (12) 65 Total income tax expense 11,638 5,409 Effective tax rate 4.61% 2.61% The income tax expense for the group is less than the amount determined by applying the statutory tax rates primarily due to tax incentives granted to the company and its subsidiaries. The Economic Development Board (“EDB”) of Singapore granted the company for a period of five years commencing August 1, 1999, with an extension of two years to the pioneer status if it satisfies additional conditions stipulated. With the expiry of the Pioneer Status on July 31, 2006, the company has applied for new tax incentive and has provided for tax at 20% on taxable profits from August 1, 2006 to December 31, 2006. EDB has also granted a subsidiary, Venture Electronics Solutions Pte Ltd, Pioneer Status and Development and Expansion Incentive for qualifying activities subject to the fulfilment of certain conditions, for a period of five years commencing on July 1, 2002. annual report 2006 79
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v e n t u r e c o r p o r a t i o n
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We aim to be the best and most reli
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group of companies SINGAPORE Ventur
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2006 was one of the best years in p
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“Our people remain a core busines
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The Group has high expectations for
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GOH GEOK LING Non-Executive Directo
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corporate information Registered Of
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corporate governance The Company co
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