Annual Report 2007 - Antofagasta plc

Notes to the Financial Statements continued25 Post-Employment Benefit Obligations continuedb) Severance provisions continuedAmounts included in the income statement in respect of severance provisions are as follows:2007 2006US$m US$mCurrent service cost (charge to operating profit) (1.8) (5.1)Actuarial gains and losses (charge to operating profit) (3.5) (2.6)Interest cost (charge to interest expenses) (0.7) (0.8)Foreign exchange ((charge)/credit to other finance items) (2.1) 0.8Total charge to income statement (8.1) (7.7)Movement in the present value of severance provisions were as follows:2007 2006US$m US$mBalance at the beginning of the year (24.1) (20.6)Current service cost (1.8) (5.1)Actuarial gains and losses (3.5) (2.6)Interest cost (0.7) (0.8)Paid in the year 3.1 4.2Foreign currency exchange difference (2.1) 0.8Balance at the end of the year (29.1) (24.1)26 Deferred TaxThe following are the major deferred tax liabilities and assets recognised by the Group and movements thereonduring 2006 and 2007.Accelerated Timingcapital differences Withholding Short-term Mining taxallowances on provisions tax differences (Royalty) Tax losses TotalUS$m US$m US$m US$m US$m US$m US$mAt 1 January 2006 (181.8) 0.8 (52.4) 9.8 (0.5) 5.2 (218.9)(Charge)/credit to income (17.1) 32.0 (72.2) (11.6) 1.2 (4.5) (72.2)Acquisition (see Note 30) – (29.0) – – – – (29.0)At 1 January 2007 (198.9) 3.8 (124.6) (1.8) 0.7 0.7 (320.1)(Charge)/credit to income (36.0) 17.3 (30.8) 0.7 (0.8) 8.8 (40.8)At 31 December 2007 (234.9) 21.1 (155.4) (1.1) (0.1) 9.5 (360.9)The charge to the income statement of US$40.8 million (2006 – US$72.2 million) includes a charge for foreignexchange differences of US$1.1 million (2006 – net of a credit of US$0.5 million).FINANCIAL STATEMENTSCertain deferred tax assets and liabilities have been offset. The following is the analysis of the deferred taxbalances (after offset):2007 2006US$m US$mDeferred tax assets 14.7 3.1Deferred tax liabilities (375.6) (323.2)Net deferred tax balances (360.9) (320.1)124Antofagasta plc Annual Report and Financial Statements 2007