The provision (benefit) for income taxes was comprised of the following:

Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the net deferred tax assets (liabilities) were as follows:

The Company has not recorded incremental deferred income taxes on the undistributed earnings of its foreign subsidiaries because it is management's intention to reinvest such earnings for the foreseeable future. At January  31, 2013, the undistributed earnings of foreign subsidiaries amounted to approximately $3.5 million. Upon distribution of these earnings in the form of dividends or otherwise, the Company would be subject to U.S. income taxes and foreign withholding taxes, reduced by certain foreign tax credits.  If all these earnings were to be repatriated at one time, the incremental income tax would be immaterial.

A reconciliation of the federal statutory rate and the Company's effective tax rate is presented as follows:

The Company follows the provisions of FASB ASC Topic 740, "Income Taxes", and recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit.  For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority.  The Company applies ASC Topic 740 to all tax positions for which the statute of limitations remains open.

As of January 31, 2012, the Company had an unrecognized tax benefit of $49,000 to account for state tax matters in the U. S. as a result of changes in tax positions with relevant tax authorities. The Company filed returns with the relevant state tax authorities during fiscal 2013 upon which the $49,000 unrecognized tax benefit was determined, thereby concluding that it did not have an unrecognized tax benefit. The Company has determined that there have been no additional changes in its tax positions in the fiscal year ended January 31, 2013.

A reconciliation of the beginning and ending balances of the amounts of unrecognized tax benefits is as follows:

The Company and its subsidiaries are subject to income taxes in the U.S. federal jurisdiction, various states and foreign jurisdictions.  Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply.  The following table summarizes tax years that remain subject to examination by major jurisdictions: