4. Income Tax  Income Tax Expense  The difference between income tax expense provided in the financial statements and the prima facie  income tax is reconciled as follows:  This future income tax benefit will only be obtained if:  (a)  future assessable income is derived of a nature and of an amount sufficient to enable the benefit to be realised; (b)  the conditions for deductibility imposed by tax legislation continue to be complied with; and  (c)  no changes in tax legislation adversely affect the consolidated entity in realising the benefit.  Profit from ordinary activities  233,289  189,410  135,995  202,519  Prima facie tax thereon  at 30%  69,987  56,823  40,799  60,756  Tax effect of permanent and other differences:  Amortisation of intangible assets  196  179  -  -  Building depreciation 103  379  98  96  Non deductible asset write offs  96  232  -  -  Sundry items 219  213  15  44  Amounts (over)/under provided in prior years 148  (142)  (37)  11  Effect of different rates of tax on overseas  income and exchange rate differences  78  1,477  -  -  Restatement of deferred tax balances due to  income tax rate changes  -  59  -  59  Other adjustments to deferred tax balances  (512)  270  -  270  Utilisation of tax losses  (857)  (303)  -  -  Benefit of tax losses and timing differences  for the current year not brought to account  963  -  -  -  Non deductible provisions relating to overseas entities  1,192  1,164  -  -  Dividends received -  -  (27,340)  (48,992)  Total tax effect of permanent and other  differences: 1,626  3,528  (27,264)  (48,512)  Total income tax attributable to profit from  ordinary activities  71,613  60,351  13,535  12,244  36  HARVEY NORMAN HOLDINGS LIMITED AND ITS CONTROLLED ENTITIES – ANNUAL REPORT 2003  Tax Consolidation Effective 1 July 2002, for the purposes of income taxation, Harvey Norman Holdings Limited and its 100% owned subsidiaries have formed a tax consolidated group. The transitional method of existing tax values will be adopted in determining the tax cost of assets owned by entities forming part of the consolidated group. At balance date, there has been no material effect on the future income tax benefit of $7.9 million and the provision for income tax of $26.0 million. Harvey Norman Holdings Limited has not formally notified the Australian Taxation Office of its adoption of the tax consolidation regime. Effective Tax Rate (%) 34 .67% 31.86% 30.70% 2001 2002 2003 CONSOLIDATED PARENT 2003  2002  2003  2002  $000  $000  $000  $000  Notes to the Financial Statements (continued) 