6. INCOME TAX (CONTINUED) Unrecognised deferred tax asset Deferred tax is recognised on the basis there is probable realisation through future profits. The future income tax benefit of tax losses and other deferred tax assets in relation to temporary timing differences, have therefore not been recognised at 31 December 2022. Opening balance $’000 Recognised in profit or loss $’000 Closing balance $’000 2022 Patents (217) 34 (183) Capital raising costs (403) 127 (276) Employee benefits (76) (16) (92) Unrealised foreign exchange – (177) (177) Other temporary differences (10) 47 37 (706) 15 (691) Deferred tax not recognised 706 (15) 691 Net deferred tax asset – – – 2021 Patents (208) (9) (217) Capital raising costs (234) (169) (403) Employee benefits (55) (21) (76) Other temporary differences (4) (6) (10) (501) (205) (706) Deferred tax not recognised 501 205 706 Net deferred tax asset – – – 2022 $’000 2021 $’000 Gross tax losses for which no deferred tax asset has been recognised (a) 106,115 110,750 (a) Of these gross tax losses, $62.6 million (2021: $63.3 million) relates to New Zealand tax losses, which are unlikely to be utilised unless future taxable income is generated in New Zealand. The movement is due to the New Zealand tax losses being translated at the closing foreign exchange rate at each reporting date. There are no franking credits available for use as at 31 December 2022 (2021: nil). 7. EARNINGS PER SHARE Basic earnings per share is calculated by dividing the profit for the year attributable to the equity holders of the company by the weighted average number of ordinary shares on issue during the year excluding shares held as treasury stock. Diluted earnings per share is calculated by dividing the profit attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares. 2022 2021 Earnings/(loss) after income tax attributable to equity holders (basic) - ($'000) 184 (7,794) Weighted average shares outstanding (basic) - (No.) 125,965,676 117,770,052 Basic earnings/(loss) per share $0.001 ($0.066) Earnings/(loss) after income tax attributable to equity holders (diluted) - ($'000) 184 (7,794) Weighted average shares outstanding (diluted) - (No.) 128,908,995 118,524,002 Diluted earnings/(loss) per share $0.001 ($0.066) NOTES TO THE CONSOL I DATED F I NANC I A L STATEMENTS CON T I NU E D Neuren Pharmaceuticals Limited Annual Repor t 2022 37
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