Notes 21-25
Back to top21. Investments
During the year ended 30 June 2009 the group wrote-off $8 million of the investment in Dongwha Pattina NZ Limited held by Laminex. This is the result of the annual impairment review undertaken by the group. The review indicated that the value of the asset has been adversely impacted due to the deterioration in current market conditions and a more cautious outlook of the company’s sustainable mid-cycle earnings. See note 4.
Back to top22. Provisions
During the year the group provided for $51 million in respect of restructuring obligations at certain businesses, primarily in the Laminates & Panels division, which are expected to be utilised over the next two years. Construction claims relate to disputes on jobs and provisions in regard to the wind-down of overseas operations and are expected to be utilised over the next two years. Property provisions relate to onerous lease obligations and are expected to be utilised over two years. Warranty and environmental provisions relate to products sold and services provided and are expected to be utilised over the next three years. Other provisions relate to miscellaneous matters with no individual amounts being significant.
Back to top23. Creditors and accruals
The non current portion of creditors and accruals relates to long service employee entitlement obligations.
Back to top24. Contracts
Included in sales is $973 million of contract revenue (June 2008 $803 million).
Back to top25. Taxation
Provision for deferred taxation:
There are no significant deferred tax liabilities in respect of the undistributed profits of subsidiaries and associates.
The group has recognised tax losses available in Australia, United Kingdom, Spain, Finland and other jurisdictions on the basis that the respective companies will have future assessable income. Where necessary, the companies' financial affairs have been restructured during the year to assist in generating future assessable income. Further tax planning opportunities are available and will be utilised to ensure that the tax losses will be realised. The tax losses have been recognised on the basis of the forecasted operating earnings set out in the companies' strategic plans approved by the directors and the discounted cashflows prepared for the purposes of impairment testing. The group will review this situation annually and will consider further opportunities to assist the companies should it be necessary. If the forecasted operating earnings are not achieved the asset may have to be written-off.
During the year ended 30 June 2009 the group wrote-off $60 million of tax losses recognised in Formica USA and Formica Europe. This was due to the companies concerned having a history of incurring tax losses which continued in the current year. Although the companies are forecasting that they will earn taxable profits when the current economic conditions improve, as required by NZ IFRS, the company has written-off these tax losses as their realisation is likely to be significantly delayed. Notwithstanding this write-down, the benefit of these tax losses is expected to be realised in future years as taxable earnings are generated.
Formica has not recognised tax losses in the United States, France, Spain and Sweden of $138 million ($414 million of gross tax losses). This comprises $60 million of tax losses written-off during the year and $78 million of losses not recognised at acquisition.
