13:46     CHINA INSURANCE<00966> - Results Announcement (4)                   

                                                                              
    6.      (Loss)/profit from ordinary activities before taxation            
    (Loss)/profit from ordinary activities before taxation is arrived at after
                      charging:                                               
                                                                              
                                                    2004            2003      
                                                    $'000           $'000     
    (a)     Finance costs:                                                    
                                                                              
            Interest on interest-bearing notes      78,985          11,218    
            Interest on other loans                  5,429           8,620    
                                                    -----------------------   
                                                    84,414          19,838    
                                                    =======================   
    (b)     Staff costs:                                                      
                                                                              
            Salaries, wages and other benefits      320,525         163,664   
            Contributions to defined contribution plan                        
                                                     30,687          15,629   
                                                    -----------------------   
                                                    351,212         179,293   
                                                    =======================   
    (c)     Other items:                                                      
                                                                              
            Amortisation of goodwill :                                        
            - subsidiaries                           27,767          27,767   
            - associate                               3,745           3,745   
            Auditors' remuneration                                            
            - audit services                          2,336           1,931   
            - tax services                              227             258   
            - other services                              -             203   
            Depreciation                             26,516          17,021   
            Operating lease charges in respect of properties                  
                                                     57,984          40,091   
            Issue costs in respect of interest-bearing notes issued           
                                                          -          10,424   
                                                    =======================   
                                                                              
    7.  Income Tax                                                            
                                                                              
    Taxation in the consolidated income statement represents:                 
                                                                              
                                                    2004            2003      
                                                    $'000           $'000     
    Current tax - Provision for Hong Kong Profits Tax                         
                                                                              
    Tax for the year                                16,510          24,052    
    Over-provision in respect of prior years          (307)           (823)   
                                                    -----------------------   
                                                    16,203          23,229    
                                                    -----------------------   
    Current tax - Outside Hong Kong                                           
                                                                              
    Tax for the year                                   397               -    
    Under-provision in respect of prior years          328               -    
                                                    -----------------------   
                                                       725               -    
                                                    -----------------------   
    Deferred tax                                                              
                                                                              
    Origination and reversal of temporary differences                         
                                                   (69,179)            200    
    Effect of increase in tax rate on deferred tax balances at 1 January      
                                                         -            (311)   
                                                    ------------------------  
                                                   (69,179)           (111)   
                                                    ------------------------  
                                                                              
    Share of associates' taxation                      440             201    
                                                    ========================  
                                                    (51,811)        23,319    
                                                    ========================  
                                                                              
    The provision for Hong Kong Profits Tax represents the Group's estimated  
    Profits Tax liability calculated at the standard tax rate of 17.5% (2003: 
    17.5%) on its assessable profits from reinsurance, asset management and   
    insurance intermediaries businesses except for its assessable profits from
    the business of reinsurance of offshore risks, which is calculated at 8.  
    75% (2003: 8.75%), one-half of the standard tax rate.                     
                                                                              
    Taxation outside Hong Kong is calculated at the rates prevailing in the   
    respective jurisdictions.