16 Deferred tax asset

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income tax assets and liabilities relate to income taxes levied by the same taxation authority on either the taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.

A deferred tax asset arises as a result of the fair value adjustment to the carrying value of intangible assets at the time of the acquisition of Groupe CS Dermatologie SAS and the subsequent amortisation of the intangible assets. The movement in the Group’s deferred tax asset during the year is as follows:

Group

Fair value

adjustment

on intangible

assets

£’000

Tax

losses

£’000

Other

£’000

Total

£’000

Cost

At 1 July 2008

633

48

27

708

Exchange adjustments

65

6

2

73

Credited/(charged) to the income statement

352

195

(24)

523

At 30 June 2009

1,050

249

5

1,304

Unprovided deferred tax

The group has a potential deferred tax asset, which has not been recognised in the financial statements, due to uncertainties surrounding suitable future taxable profits. This potential deferred tax asset is analysed as follows:

2009

£’000

2008

£’000

Tax losses

2,934

2,908

Accelerated capital allowances

188

198

Future tax relief for share based remuneration

402

507

Other temporary differences

535

618

Unprovided deferred tax asset

4,059

4,231

No deferred tax is recognised on the distributed profits of subsidiaries and joint ventures as they are reinvested by the Group and no tax is expected to be payable on them for the foreseeable future. Since acquisition, subsidiaries have earned profits of £2,313,000 (2008: £1,024,000) that have not been remitted to the Company.