Sunny Tew

NOTES TO THE FINANCIAL STATEMENTSFOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2007 (Continued)14. Deferred tax assets/(liabilities)The Group and the CompanyThe GroupThe Company2007 2006 2007 2006$ $ $ $Deferred tax asset 480,133 974,000 480,133 974,000Deferred tax liabilities (378,511) (386,611) (56,033) (56,033)101,622 587,389 424,100 917,967Movement in deferred tax assets are follows:The GroupThe Company2007 2006 2007 2006$ $ $ $Balance at beginning of financial year 974,000 - 974,000 -Recognised in equity (493,867) 974,000 (493,867) 974,000Balance at end of financial year 480,133 974,000 480,133 974,000Deferred tax asset is in respect of the hedging reserve.Movements in deferred tax liabilities are as follows:GroupCompany2007 2006 2007 2006$ $ $ $Balance at beginning of financial year 386,611 332,080 56,033 56,033Recognised in income statement (8,100) 54,531 - -Balance at end of financial year 378,511 386,611 56,033 56,033Deferred tax liability arises as a result of tax effect of the excess of tax over book depreciation of certain property, plant and equipment.80 HG METAL MANUFACTURING LIMITED ANNUAL REPORT 2007