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Notes to the Consolidated Financial Statements

31st March 2018

28 NOTES TO CONSOLIDATION STATEMENT OF CASH FLOWS

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

2018 2017
HK$’000 HK$’000
(Loss)/profit before income tax (71,299) 77,879
Interest income (8,045) (9,875)
Interest expense on bank borrowings 9,253 10,268
Amortisation of intangible assets 9,899 7,800
Loss on disposal of plant and equipment 1,399 662
Amortisation of deferred gain (33,446) (17,450)
Depreciation of property, plant and equipment 38,857 37,326
Provision for/(write-back of) impairment for inventories 4,486 (17,440)
Provision of doubtful debts 2,908 –
Amortisation of leasehold land and land use rights 283 281
Fair value gain on investment properties (3,500) (11,068)

Operating (loss)/profit before working capital changes (49,205) 78,383
Decrease/(increase) in inventories 65,742 (140,740)
Increase in trade and other receivables (126,748) (30,849)
Decrease in trade and other payables (102,562) (25,052)
Net cash used in operations (212,773) (118,258)

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

2018 2017
HK$’000 HK$’000

Net book amount (Note 14) 1,969 1,690
Loss on disposal of plant and equipment (Note 7) (1,399) (662)
Proceeds from disposal of plant and equipment 570 1,028

ALCO HOLDINGS LIMITED ANNUAL REPORT 2018 113