13:08 HYSAN DEV<00014> - Results Announcement (2) 3. PROFIT FROM OPERATIONS 2004 2003 HK$'000 HK$'000 Profit from operations has been arrived at after charging (crediting): Staff costs 127,932 122,494 Depreciation 4,942 4,643 Auditors' remuneration 1,629 1,866 Rental income arising from operating leases less out-goings of HK$248,011,085 (2003:HK$235,177,762) (902,174) (899,948) Dividends from - listed investments (20,275) (19,795) - unlisted investments (4,672) (2,818) Interest income (1,229) (1,926) Loss (gain) on disposal of property, plant and equipment 40 (46) Exchange loss 37 1,631 ========================= 4. REVERSAL OF IMPAIRMENT LOSS ON INVESTMENTS IN SECURITIES The Directors reviewed the carrying amount of investment in the equity interests of unlisted investees whose business activity is property development at 31 December 2004. In the light of the improved property market during 2004, the Directors considered an impairment loss of HK$63, 000,000 (2003: nil) should be reversed. 5. TAXATION 2004 2003 HK$'000 HK$'000 (restated) Hong Kong Profits Tax for the year 49,737 51,532 Underprovision in prior years 66 158 Provision arising from prior years additional assessments 55,000 48,000 ------------------------ 104,803 99,690 Deferred tax - current year 35,473 55,408 - attributable to change in tax rate - 10,126 ------------------------ Taxation attributable to the Company and its subsidiaries 140,276 165,224 Share of deferred tax attributable to an associate 19,495 8,310 ------------------------ 159,771 173,534 ======================== Hong Kong Profits Tax is calculated at 17.5% (2003: 17.5%) of the estimated assessable profit for the year. In addition to the amount charged to the income statement, deferred tax relating to the revaluation of the Group's properties has been charged directly to equity. The Company received notices of additional assessment from the Hong Kong Inland Revenue Department ("IRD") disallowing the deduction claim for interest expenses in prior years. Management has reviewed the basis on which the interest expenses were disallowed, and an additional tax provision of HK$55 million was made accordingly during the year. At the date of issue of the accounts, certain subsidiaries of the Group have disputes with IRD regarding additional tax assessments disallowing certain expense deductions claimed in the tax returns for years of assessment 1995/1996 to 1999/2000 (total tax claimed by IRD: HK$193 million). Having taken separate legal advice from two leading counsels, the Directors are of the view that there were ample grounds to contest the assessments and such Group subsidiaries are pursuing objection against the additional assessments vigorously. Accordingly, no further provision was made during the year under review. Karrie International Holdings Limited announced on 08/03/2005: (stock code: 01050 ) Year end date: 31/03/2005 Currency: HKD Auditors' Report: N/A Interim and Quarterly report reviewed by: Audit Committee (Unaudited ) (Unaudited ) Last Current Corresponding Period Period from 01/04/2004 from 01/04/2003 to 31/12/2004 to 31/12/2003 Note ('000 ) ('000 ) Turnover : 1,856,796 1,250,304 Profit/(Loss) from Operations : 124,697 70,487 Finance cost : (5,583) (5,249) Share of Profit/(Loss) of Associates : (3,048) N/A Share of Profit/(Loss) of Jointly Controlled Entities : N/A N/A Profit/(Loss) after Tax & MI : 105,643 59,530 % Change over Last Period : +77 % EPS/(LPS)-Basic (in dollars) : 0.2617 0.1526 -Diluted (in dollars) : 0.2591 0.1475 Extraordinary (ETD) Gain/(Loss) : N/A N/A Profit/(Loss) after ETD Items : 105,643 59,530 3rd Quarter Dividend : NIL NIL per Share (Specify if with other : N/A N/A options) B/C Dates for 3rd Quarter Dividend : N/A Payable Date : N/A B/C Dates for (-) General Meeting : N/A Other Distribution for : N/A Current Period B/C Dates for Other Distribution : N/A Remarks: Earnings per share The calculation of the basic and diluted earnings per share is based on the following data: For the nine months ended 31 December 2004 2003 HK$'000 HK$'000 (Unaudited) (Unaudited) Profit attributable to shareholders for the purpose of calculating basic earnings per share and diluted earnings per share 105,643 59,530 ======== ======= Number of shares '000 '000 Weighted average number of ordinary shares for the purpose of calculating basic earnings per share 403,635 390,127 Effect of dilutive share options 4,038 13,358 -------- --------- Weighted average number of ordinary shares for the purpose of calculating diluted earnings per share 407,673 403,485 ======== ==========