0175 Geely Automobile Holdings Limited Annual Report 2011

Annual Report 2011Geely Automobile Holdings LimitedNOTES TO THE CONSOLIDATEDFINANCIAL STATEMENTSFor the year ended 31 December 201127. Deferred TaxationThe following is the deferred taxation recognised and movements thereon during the year:2011 2010RMB’000RMB’000At 1 January 73,013 37,727Exchange differences 7 523Charge to the consolidated income statement (note 11) 19,174 34,763At 31 December 92,194 73,013Deferred tax assets in respect of provisions2011 2010RMB’000RMB’000At 1 January 17,965 14,259Exchange differences (850) 1,581Credit to the consolidated income statement 4,062 2,125At 31 December 21,177 17,965The deferred tax assets have been offset against certain deferred tax liabilities on the consolidated balance sheetas they are related to the same group entity and related to tax levied by the same tax authority.Deferred tax liabilitiesUndistributedprofit of Acceleratedsubsidiaries tax depreciation TotalRMB’000 RMB’000 RMB’000At 1 January 2010 32,281 19,705 51,986Exchange differences – 2,104 2,104Charge to the consolidated income statement 34,966 1,922 36,888At 1 January 2011 67,247 23,731 90,978Exchange differences – (843) (843)Charge to the consolidated income statement 29,156 (5,920) 23,236At 31 December 2011 96,403 16,968 113,371Withholding tax is imposed on dividends declared in respect of profits earned by PRC subsidiaries from 1 January2008 onwards. Deferred taxation has been provided for in the consolidated financial statements in respect oftemporary differences attributable to the profits earned by the PRC subsidiaries based on the expected dividendspayout ratio of these PRC subsidiaries. The unrecognised temporary differences attributable to the profits earnedby the PRC subsidiaries amounting to approximately RMB1,602 million (2010: RMB1,921 million).At the balance sheet date, the Group has unused tax losses of approximately RMB168 million (2010: RMB324million) available for offset against future profits that may be carried forward for 5 years from the year of incurringthe loss. No deferred tax asset has been recognised in respect of the tax losses due to the unpredictability offuture profit streams.103