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Notes to the Consolidated Financial Statements

31st March 2017

27 DEFERRED INCOME TAX

Deferred income tax is calculated in full on temporary differences under the liability method using a
principal tax rate of 16.5% (2016: 16.5%).

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 taxes relate to the same
fiscal authority.

2017 2016
HK$’000 HK$’000
Deferred income tax assets to be recovered
after more than 12 months 35,460 38,511
Deferred income tax liabilities to be settled
after more than 12 months (7,235) (6,140)

Deferred income tax assets, net 28,225 32,371

The movement in deferred tax assets during the year is as follows:

Accelerated
tax
Deferred income tax assets/(liabilities) Tax losses depreciation Others Total
HK$’000 HK$’000 HK$’000 HK$’000
At 1st April 2015 10,030 (1,276) 30,057 38,811
Credited/(charged) to consolidated
income statement 5,114 136 (11,690) (6,440)

At 31st March 2016 15,144 (1,140) 18,367 32,371

At 1st April 2016 15,144 (1,140) 18,367 32,371
Credited/(charged) to consolidated
income statement 6,683 (572) (9,508) (3,397)
Exchange difference (271) (272) (206) (749)

At 31st March 2017 21,556 (1,984) 8,653 28,225

Deferred income tax assets are recognised for tax losses carried forward to the extent that the
realisation of the related tax benefit through future taxable profits is probable. The Group did not
recognise deferred income tax assets of approximately HK$2,104,000 (2016: HK$2,213,000) in
respect of tax losses amounting to approximately HK$5,751,000 (2016: HK$6,036,000) that can be
carried forward against future taxable profit. Approximately HK$381,000 (2016: HK$378,000) of the
unrecognised tax losses have no expiry date and the remaining balance of HK$5,370,000 (2016:
HK$5,658,000) will be expired at various dates up to and including 2036 (2016: 2035).

ALCO HOLDINGS LIMITED ANNUAL REPORT 2017 99