2006 - Eastern Caribbean Securities Exchange

Notes to the Consolidated Financial Statementsfor the year ended 31st December, 2006Expressed in Thousands of Trinidad and Tobago dollars5. Taxation (continued)b) Reconciliation of applicable tax charge to effective tax charge (continued)In 2005, the authorities in Trinidad and Tobago enacted a reduction in the rate of corporationtax from 30% to 25% effective from fiscal year 2006. Accordingly, the deferred tax balances ofTrinidad and Tobago resident companies were recalculated using the lower 25%, being the rateat which the deferred tax balances are expected to be settled or realised. This has resulted in adeferred tax credit of $25.4 million in the statement of earnings of the Group for 2005.Trinidad Cement Limited has tax losses of $288 million (2005-$207 million) available for set offagainst future taxable profits.Arawak Cement Company Limited is exempt from the payment of corporation tax of up to atotal of $11.8 million (2005-$22.5 million) for the period up to September 2007.Caribbean Cement Company Limited and its subsidiaries have tax losses of $70.5 million (2005- $43.2 million) available for set off against future taxable profits.Readymix (West Indies) Limited and its subsidiaries have tax losses of $29.2 million (2005 - $42.4million) available for set off against future taxable profits.c) Movement in deferred tax net balance:2006 2005Net balance at 1st January (104,674) (181,154)Exchange rate and other adjustment 155 2,017Impact of tax rate change – 25,476Valuation adjustment of deferred tax balances – 42,025Charge/(credit) to earnings (3,626) 6,962Net balance at 31st December (108,145) (104,674)Annual Report 200617