notes to the financial statements - Investor Relations

NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2011
38 INCOME TAX EXPENSE (CONT’D)
Reconciliation of effective tax rate
Annual Report 2011
119
Group
2011 2010
$’000 $’000
Profit before income tax 65,082 189,379
Tax calculated using Singapore tax rate of 17% (2010: 17%) 11,064 32,254
Effect of different tax rates in other countries (1,839) (60)
Income not subject to tax (8,565) (30,598)
Tax incentives (436) –
Effect of utilisation of tax losses and wear and tear allowances not previously recognised
as deferred tax assets (63) (526)
Expenses not deductible for tax purposes 5,770 1,895
Effect of deferred tax assets not recognised 2,882 4,128
Over provision in prior years (3,204) (127)
5,609 6,966
Certain of the tax returns of the Group entities (including the Company) for prior years have not yet been finalised with the
respective tax authorities. In arriving at the current tax expense of the Group, management establishes the best estimate of
the expenditure required to settle its current tax liabilities based on its actual experience of similar transactions in the past,
and in some cases, advice from its legal advisors on certain transactions.
In respect of the gains recognised on sale and leaseback of certain leasehold buildings, the Group continues to treat the
disposals of the leasehold buildings as capital transactions and accordingly, the gains on disposal of leasehold buildings
including the accretion of the deferred gain over the leaseback period are therefore not subject to tax.
Subsequent to the tax affairs being finalised by the tax authorities, there may be significant adjustments affecting the Group’s
results in future periods as there is no absolute certainty that the relevant tax authorities would accept the tax treatments of
certain income and expenses submitted by the Group.
39 EARNINGS PER SHARE
Group
2011 2010
$’000 $’000
The basic and diluted earnings per share are based on:
Profit for the year attributable to shareholders 57,145 178,967
No. of shares
2011 2010
’000 ’000
Issued ordinary shares in issue at beginning of the year 590,305 574,305
Weighted average number of ordinary shares in issue during the year 595,044 588,814
The Company does not have any dilutive potential ordinary shares in existence for the current and previous financial years.