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Notes to the Consolidated Financial Statements

31st March 2017

28 NOTE TO CONSOLIDATION STATEMENT OF CASH FLOWS

(a) Reconciliation of profit before income tax to cash (used in)/generated from operations:

2017 2016
HK$’000 HK$’000

Profit before income tax 77,879 525,401
Interest income (9,875) (13,276)
Interest expense on bank borrowings and
trust receipt loans 10,268 8,695
Amortisation of intangible assets 7,800 7,800
Loss/(gain) on disposal of plant and equipment 662 (40)
Gain on disposal of properties – (221,318)
Amortisation of deferred gain (17,450) (1,454)
Depreciation of property, plant and equipment 37,326 34,645
(Write-back of)/provision for impairment of inventories (17,440) 1,924
Amortisation of leasehold land and land use rights 281 289
Fair value gain on investment properties (11,068) (60)

Operating profit before working capital changes 78,383 342,606
(Increase)/decrease in inventories (140,740) 85,977
Increase in trade and other receivables (30,849) (112,880)
Decrease in trade and other payables (25,052) (163,682)
Net cash (used in)/generated from operations (118,258) 152,021

(b) In the consolidated statement of cash flows, proceeds from disposal of properties, plant and
equipment comprise:

2017 2016
HK$’000 HK$’000

Net book amount (Notes 14 and 15) 1,690 271,126
(Loss)/gain on disposal of plant and equipment (Note 7) (662) 40
Gain on disposal of properties (Note 29) – 221,318
Amortisation of deferred gain – 1,454
Deferred gain – 50,896
Proceeds from disposal of properties, plant and
equipment 1,028 544,834

Representing:
Proceeds from disposal of properties (Note 29) – 533,769
Proceeds from disposal of plant and equipment 1,028 11,065

1,028 544,834

100 ALCO HOLDINGS LIMITED ANNUAL REPORT 2017