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The income tax charge is based on profit for the year and considers deferred
taxation. Deferred taxes are calculated using the balance sheet liability method. Deferred income taxes
reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities
for financial reporting purposes and the amounts used for income tax purposes. Deferred tax assets and
liabilities are measured using the tax rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or settled, based on tax rates (and tax laws)
that have been enacted or substantively enacted by the balance sheet date. The measurement of deferred
tax liabilities and deferred tax assets reflects the tax consequences that would follow from the manner
in which the enterprise expects, at the balance sheet date, to recover or settle the carrying amount
of its assets and liabilities. Deferred tax assets and liabilities are recognised
regardless of when the timing difference is likely to reverse. Deferred
tax assets are recognised when it is probable that sufficient taxable profits will be available against
which the deferred tax assets can be utilised. At each balance sheet date, the Group reassesses unrecognised
deferred tax assets and the carrying amount of deferred tax assets. The enterprise recognises a previously
unrecognised deferred tax asset to the extent that it has become probable that future taxable profit
will allow the deferred tax asset to be recovered. The Group conversely reduces the carrying amount
of a deferred tax asset to the extent that it is no longer probable that sufficient taxable profit will
be available to allow the benefit of part or all of that deferred tax asset to be utilised. Deferred
tax is charged or credited directly to equity if the tax relates to items that are credited or charged,
in the same or a different period, directly to equity, including exchange differences arising on the
translation of inter-company loans.
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