TenneT

5. Deferred tax assets

The deferred tax assets relate to temporary differences between the fiscal and carrying values of the non-current assets, financial instruments and provisions, and to losses which may be used for forward loss compensation.

Deferred tax assets and liabilities are presented on a net basis insofar as legally enforceable entitlements exist and the taxes are imposed by the same authority.

The movement in the deferred tax assets can be broken down as follows:

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	Non-current assets	Forward loss compensation	Financial instruments	Provisions	Total

Balance at 1 January 2007	27,347	2,081	533	17,340	47,301
Initial valuation of NOVEC B.V.	-	-	-	1,126	1,126
Recognised in the profit-and-loss account	2,647	-/- 337	-/- 877	-	1,433
Recognised in equity	-	-	408	-	408
Exchange rate differences	-	-/- 151	-	-	-/- 151
Balance at 31 December 2007	29,994	1,593	64	18,466	50,117
From acute position	-	-	79	-	79
Recognised in the profit-and-loss account	1,369	321	451	2,524	4,665
Balance from Endex N.V.	81	-	-	-	81
Recognised in equity	-	-	1,311	-	1,311
Exchange rate differences	-	-/- 414	-	-	-/- 414
Balance at 31 December 2008	31,444	1,500	1,905	20,990	55,839

The total of the deferred tax assets relates mainly to the tangible fixed assets within the 380 kV grid and the 150 kV grid. Realisation of the deferred tax assets will take place principally during the remaining useful lives of the tangible fixed assets (approximately twenty years). This means that the deferred tax assets are predominantly long-term in character.

The group has restricted fiscal losses available for forward loss compensation totalling EUR 3.6 million, for which no deferred tax asset has been created, because it is not yet certain that such an asset would be realised.

Of the deferred tax assets arising from fiscal losses available for loss compensation, EUR nil relates to losses which arose in 2007-2008.

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Annual Report 2008

5. Deferred tax assets