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19242. TAXATIONGroup2007 2006$’000 $’000Current income taxCurrent year 123,208 115,321Overprovision in respect of prior years (13,394) (13,762)Associated companies and joint ventures 5,641 7,748115,455 109,307Deferred income taxCurrent year (1,532) 894Overprovision in respect of prior years (8,867) (1,306)Effect of reduction in tax rate 9,550 –114,606 108,895Deferred income tax related to items charged or credited directly to equity:Net change in fair value of available-for-sale financial assets (4,675) 3,344Net change in fair value of derivative financial instruments designated in cash flow hedges 500 (161)Effect of reduction in tax rate 109 –(4,066) 3,183The GroupUnrecognised tax lossesAs at 31 December 2007, subsidiaries of the Group have potential tax benefits of approximately $24,731,000 (2006:$40,707,000) arising from unutilised tax losses, unabsorbed wear and tear allowances and other temporary differences, whichare available for set-off against future taxable profits. These tax benefits have not been recognised in the financial statementsdue to the uncertainty of its recoverability. The use of these potential tax benefits is subject to the agreement of the taxauthorities and compliance with certain provisions of the tax legislation of the respective countries in which the subsidiariesoperate.Unrecognised temporary differences relating to investments in subsidiariesAt the balance sheet date, no deferred tax liability (2006: $nil) has been recognised for taxes that would be payable on theundistributed earnings of certain of the Group’s subsidiaries as the Group has determined that the undistributed profits ofsome of its overseas subsidiaries will not be remitted to Singapore in the foreseeable future, but be retained for organicgrowth and acquisitions.