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Notes to the Consolidated Financial Statements

31st March 2017

11 INCOME TAX EXPENSE

Hong Kong profits tax has been provided at the rate of 16.5% (2016: 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.

2017 2016
HK$’000 HK$’000

Current income tax
– Hong Kong profits tax 16 13,057
– PRC corporate income tax 530 –
– Overseas corporate income tax 60 –
– Over provision in prior years (16) (115)
Deferred income tax expense 3,397 6,440

Income tax expense 3,987 19,382

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:

2017 2016
HK$’000 HK$’000

Profit before income tax 77,879 525,401
Tax calculated at a tax rate of 16.5% (2016: 16.5%) 12,850 86,691
Effect of different tax rates in other countries (12) (427)
Income not subject to tax (14,726) (77,376)
Expenses not deductible for tax purposes 5,881 10,601
Over provision in prior years (16) (115)
Tax losses for which no deferred income tax asset
was recognised 10 8
Income tax expense 3,987 19,382

84 ALCO HOLDINGS LIMITED ANNUAL REPORT 2017