ST Engineering Annual Report 2020

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2020 (CURRENCY – SINGAPORE DOLLARS UNLESS OTHERWISE STATED) B6 Taxation (continued) (ii) Deferred tax assets and liabilities (continued) (b) Unrecognised deferred tax assets Deferred tax assets have not been recognised in respect of the following items: Group 2020 2019 $’000 $’000 Tax losses 505,322 477,912 Deductible temporary differences 37,537 30,571 Unabsorbed wear and tear allowance and investment allowance 5,286 5,456 548,145 513,939 The Group has the above unrecognised deferred tax assets which have no expiry date except for the amount of $54,135,000 which will expire from 2023 to 2038. The unrecognised deferred tax assets can be carried forward and used to offset against future taxable income subject to meeting certain statutory requirements by companies with unrecognised tax losses and capital allowances in their respective countries of incorporation. (c) Unrecognised temporary differences relating to investments in subsidiaries As at 31 December 2020, a deferred tax liability of $126,397,000 (2019: $133,105,000) for temporary difference of $521,403,000 (2019: $559,899,000) related to undistributed earnings of certain subsidiaries was not recognised as the Group has determined that the undistributed profits of its overseas subsidiaries will not be remitted to Singapore in the foreseeable future, but will be retained for organic growth and acquisitions. 17 3 ANNUAL REPORT 2 0 2 0 / CORPORATE OVERVI EW PERFORMANCE REVI EW SUSTAINABI L ITY CORPORATE GOVERNANCE F INANCIAL REPORT