2008 Annual Report - Kenford Group Holdings Limited

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Notes to the Financial Statements For the year ended 31 March 2008 11. INCOME TAX EXPENSE (Continued) No provision for profi t tax in the Cayman Islands or British Virgin Islands has been made as the Group had no income assessable for profi t tax in these jurisdictions for the year. Hong Kong Profi ts Tax is calculated at 17.5% (2007: 17.5%) of the estimated assessable profi ts for the year. On 27 February 2008, the Financial Secretary of the Hong Kong Special Administrative Region Government proposed a reduction in the Hong Kong Profi ts Tax rate from 17.5% to 16.5% with effect from the fi scal year 2008/09. As a result of the change in tax rate, the change in the carrying amounts of deferred tax assets and liabilities is refl ected in the consolidated fi nancial statements of the Group for the year. Pursuant to the relevant laws and regulations in the People’s Republic of China (“PRC”), Dongguan Kario Electrical Appliance Co., Ltd. (“DG Kario”), being a foreign investment enterprise, is subject to EIT rate of 24%, together with the local EIT at a rate of 3%, DG Kario is subject to the aggregate EIT at a rate of 27%. DG Kario is also exempted from enterprise income tax for two years starting from the fi rst year of profi table operations in 2003 after off-setting prior year tax losses, followed by a 50% reduction in the applicable tax rate for the next three years. Pursuant to the PRC EIT law passed by the Tenth National People’s Congress on 16 March 2007, the EIT rates for domestic and foreign enterprises are unifi ed at 25% and was effective from 1 January 2008. All the Group’s subsidiaries in PRC are subject to Mainland China Enterprise Income Tax at rate of 25% (2007: 27%). The income tax expense for the year can be reconciled to the profi t per the consolidated income statement as follows: 2008 2007 HK$’000 HK$’000 Profi t before income tax expense 17,925 50,508 Tax calculated at the Hong Kong Profi ts Tax rate of 17.5% (2007: 17.5%) 3,137 8,839 Effect of different tax rates of a subsidiary operating in other jurisdiction 374 228 Tax concessions of a PRC subsidiary (467) (420) Tax effect of income not taxable in determining taxable profi t (Note (i)) (1,631) (4,327) Effect on deferred tax balances resulting from decrease in tax rate (113) – Utilisation of temporary differences previously not recognised (631) (600) Tax effect of expense not deductible for tax purpose 508 181 (Over)/under provision of deferred tax liability in prior years (848) 76 Under provision of current tax in respect of prior years 198 58 Others (292) 158 Income tax expense 235 4,193 Note: (i) This amount mainly represented the tax effect of the 50% of assessable profi ts of a subsidiary, Kenford Industrial Company Limited (“Kenford HK”) which was exempted under Departmental Interpretation and Practice Notes No. 21 issued by the Inland Revenue Department of Hong Kong in respect of claiming 50% of all the Kenford HK manufacturing profi ts as offshore in nature and non-taxable. 12. PROFIT ATTRIBUTABLE TO SHAREHOLDERS Profi t attributable to shareholders includes an amount of HK$9,654,000 (2007: HK$20,712,000) which has been dealt with in the fi nancial statements of the Company. Annual Report 2008 57
Notes to the Financial Statements For the year ended 31 March 2008 13. DIVIDENDS 2008 2007 HK$’000 HK$’000 Interim, paid HK$0.023 (2007: HK$0.015) per share 9,967 6,000 Final, proposed HK$0.015 (2007: HK$0.02) per share 6,500 8,000 Special, proposed HK$Nil (2007: HK$0.01) per share – 4,000 16,467 18,000 The Directors recommended a fi nal dividend of HK$0.015 (2007: a fi nal dividend of HK$0.02 and a special dividend of HK$0.01). This proposed dividend is not refl ected as a dividend payable at 31 March 2008. It is refl ected as an appropriation of retained profi ts for the year ended 31 March 2008 according to the HKAS 10 “Events After the Balance Sheet Date”. 14. EARNINGS PER SHARE The calculation of the basic and diluted earnings per share attributable to the ordinary equity holders of the Company is based on the following data: 2008 2007 HK$’000 HK$’000 Earnings: Earnings for the purposes of basic and diluted earnings per share (profi t for the year attributable to equity holders of the Company) 17,690 46,315 Number of shares Number of shares Weighted average number of ordinary shares for the purpose of basic earnings per share 407,362 400,000 Effect of dilutive potential ordinary shares: Share options – 701 Weighted average number of ordinary shares for the purpose of diluted earnings per share 407,362 400,701 Basic earnings per share (HK cents) 4.343 11.579 Diluted earnings per share (HK cents) 4.343 11.558 58 KENFORD GROUP HOLDINGS LIMITED
Page 2 and 3:
Contents Page 1. Corporate Informat
Page 4 and 5:
Chairman’s Statement On behalf of
Page 6 and 7:
Management Discussion and Analysis
Page 8 and 9: Management Discussion and Analysis
Page 10 and 11: Report of the Directors PROPERTY, P
Page 12 and 13: Report of the Directors DIRECTORS
Page 14 and 15: Report of the Directors SUBSTANTIAL
Page 16 and 17: Report of the Directors SHARE OPTIO
Page 18 and 19: Report of the Directors SHARE OPTIO
Page 20 and 21: Report of the Directors TAXATION OF
Page 22 and 23: Directors' and Senior Management's
Page 24 and 25: Directors' and Senior Management's
Page 26 and 27: Corporate Governance Report BOARD O
Page 28 and 29: Corporate Governance Report CHAIRMA
Page 30 and 31: Corporate Governance Report NOMINAT
Page 32 and 33: Corporate Governance Report INVESTO
Page 34 and 35: Corporate Structure CORPORATE STRUC
Page 36 and 37: Independent Auditor’s Report OPIN
Page 38 and 39: Consolidated Balance Sheet As at 31
Page 40 and 41: Consolidated Statement of Changes i
Page 42 and 43: Notes to the Financial Statements F
Page 84 and 85: Five Years Financial Summary CONSOL
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2008 Annual Report - Kenford Group Holdings Limited

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