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Notes to the Consolidated Financial Statements

31st March 2016

11 INCOME TAX EXPENSE

Hong Kong profits tax has been provided at the rate of 16.5% (2015: 16.5%) on the estimated
assessable profits for the year. Taxation on overseas profits has been calculated on the estimated
assessable profits for the year at the rates of taxation prevailing in the countries in which the Group
operates.

2016 2015
HK$’000 HK$’000

Current income tax
– Hong Kong profits tax 13,057 8,713
– Over provision in prior years (115) (92)
– PRC corporate income tax – 3,900
Deferred income tax expenses/(credit) 6,440 (2,119)
Income tax expense 19,382 10,402

The tax on the Group’s profit before income tax differs from the theoretical amount that would arise
using the tax rate of Hong Kong as follows:

2016 2015
HK$’000 HK$’000

Profit before income tax 525,401 124,577
Tax calculated at a tax rate of 16.5% (2015: 16.5%) 86,691 20,555
Effect of different tax rates in other countries (427) 3,458
Income not subject to tax (77,376) (16,712)
Expenses not deductible for tax purposes 10,601 3,181
Over provision in prior years (115) (92)
Tax losses for which no deferred income tax asset
was recognised 8 12

Income tax expense 19,382 10,402

ALCO HOLDINGS LIMITED ANNUAL REPORT 2016 65