3264 NEW ZEALAND GAZETTE No. 122

2.5 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS (continued)

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Operating surplus before interest and income tax | 192,004 | 170,362 |

INTEREST EXPENSE

Interest expense on borrowings | 56,862 | 64,200 |
Financing charges related to finance leases | - | - |
Other interest expense not listed above | - | - |
Total interest expense | 56,862 | 64,200 |

Operating surplus before income tax | 135,142 | 106,162 |

Income tax | 39,954 | 26,712 |

Net surplus after tax | 95,188 | 79,450 |

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TAXATION
Surplus from operations before taxation | 135,142 | 106,163 |
Taxation at 33% | 44,597 | 35,034 |
Permanent differences | 751 | 2,032 |
Net benefit of tax losses transferred from group companies | (5,394) | (10,354) |
Taxation charge | 39,954 | 26,712 |

The taxation charge is represented by

Non-current taxation assets

Prepaid tax | 41,156 | 33,293 |
Provision for Tax | (43,501) | (14,180) |
Deferred tax asset | 46,749 | 45,570 |

Deferred taxation reconciliation
Opening balance | 45,570 | 28,225 |
Adjustment to opening balance | (11,979) | - |
Current period tax charge movement | 13,158 | 17,345 |
Closing balance | 46,749 | 45,570 |

Imputation credit account
Opening balance | - | - |
Imputation credits attached to dividends received | 3,360 | 2,383 |
Taxation paid - current period | 15,188 | 20,032 |
Imputation credits attached to dividends paid | (18,548) | (22,415) |
Imputation credits available to shareholders | - | - |

In respect of the valuation, there is a deferred tax liability for tax depreciation recovered amounting to approximately $93 million (2001: $44.4 million), which would crystallise if all the revalued assets were disposed of for their carrying value. This liability has not been recognised in the financial statements.
The amount charged by the holding company for gross tax losses of $18.75 million (2001: $31.4 million) purchased during the year is $2.4 million (2001: $4.7 million).
The subsequent realisation of the future income tax benefit is subject to the necessary shareholder continuity and other requirements of income tax legislation being met.

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SHARE CAPITAL
151,469,342 (2001: 151,469,342)
Ordinary shares fully paid

Each ordinary share entitles the holder to vote at any general meeting of the company and to participate in the share of any surplus upon winding up.