Osim FR 050407.indd

Notes to the Financial Statements - 31 December 2006 (cont’d)35. Taxation (cont’d)Deferred tax assets and liabilities are offset when there is a legally enforceable right to set-off current tax against current tax liabilitiesand when the deferred taxes relate to the same taxation authority. The amounts determined after appropriate offsetting are includedin the balance sheets as follows:GroupCompany2006 2005 2006 2005$’000 $’000 $’000 $’000Net deferred tax assets 4,910 3,281 – –Net deferred tax liabilities (4,254) (4,084) (1,066) (30)656 (803) (1,066) (30)Unrecognised tax lossesThe Group has tax losses approximately $3,931,000 (2005 : $4,650,000) that are available for offset against future taxable profi ts ofthe companies in which the losses arose, for which no deferred tax asset is recognised due to uncertainty of its recoverability. Theuse of these tax losses is subject to the agreement of the tax authorities and compliance with certain provisions of the tax legislationof the respective countries in which the companies operate.Tax consequences of proposed dividendsThere are no income tax consequences attached to the dividends to the shareholders proposed by the Company but not recognisedas a liability in the fi nancial statements (Note 37).Group and CompanyOn 25 January 2002, the Company was awarded the Development and Expansion Incentive (“DEI”) under the Business Headquarters(“BHQ”) Programme for 6 years with effect from 1 January 1999. The qualifying income from BHQ activities during the 6-yearperiod will enjoy a concessionary tax rate, subject to the fulfi llment of the criteria as stipulated in Economic Development Board’soffer letter.The Company was awarded the DEI under the International Headquarters (“IHQ”) Award on 8 September 2004. The commencementdate is 1 January 2005 and is for a period of 5 years. The qualifying income from IHQ activities during the 5-year period will enjoya concessionary tax rate, subject to fulfi llment of the criteria as stipulated in the Economic Development Board’s offer letter.On 15 February 2007, the Singapore Government announced a revision in the Singapore corporate tax rate from 20% to 18%.In accordance with FRS 12, Income Taxes, and FRS 10, Events After the Balance Sheet Date, this is a non-adjusting subsequentevent.Notes to the Financial Statements 150Annual Report 2006