Annual Report 2007 - The Link REIT

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100 The Link Real Estate Investment Trust Annual Report 2007 Notes to the Consolidated Financial Statements 11 Taxation Current taxation has not been provided as the Group has no estimated assessable profit for the year (Period ended 31 March 2006: Nil). The amount of taxation charged to the consolidated income statement represents: Year ended Period ended 31 March 2007 31 March 2006 HK$’M HK$’M Current taxation – – Deferred taxation 915 443 915 443 The differences between the Group’s expected tax charge, using the Hong Kong profits tax rate and the Group’s taxation for the year/period were as follows: Year ended Period ended 31 March 2007 31 March 2006 HK$’M HK$’M Profit before taxation 5,269 2,524 Expected tax calculated at the Hong Kong profits tax rate of 17.5% 922 442 Tax effect of non-deductible expenses 3 2 Tax effect of non-taxable income (10) (1) Taxation 915 443 12 Earnings per unit based upon profit after taxation and before transactions with unitholders Year ended Period ended 31 March 2007 31 March 2006 Profit for the year/period, before transactions with unitholders HK$4,354 million HK$2,081 million Number of units outstanding at the end of the year/period 2,137,454,000 2,137,454,000 Earnings per unit based on profit after taxation, before transactions with unitholders, basic and diluted HK$2.04 HK$0.97
Annual Report 2007 The Link Real Estate Investment Trust 101 Notes to the Consolidated Financial Statements 13 Investment properties (a) Details of the movements of investment properties are as follows: Retail properties Carparks Total HK$’M HK$’M HK$M At 6 September 2005 – – – Acquisition of RC Operations 27,257 6,545 33,802 Additions 20 1 21 Change in fair values 1,821 128 1,949 At 31 March 2006 29,098 6,674 35,772 At 1 April 2006 29,098 6,674 35,772 Additions 239 32 271 Change in fair values 2,914 600 3,514 At 31 March 2007 32,251 7,306 39,557 (b) Government leases The properties included as investment properties on the balance sheet comprise properties where the Group has legal title under government leases for afi xed number of years (with renewal rights in one case), and other properties where the granting of the government leases and legal title is in progress. The remaining lease periods of the government lease profile of these properties with Government Leases granted range from 36 to 50 years. By virtue of the Property Agreement with the Hong Kong Housing Authority in respect of the acquisition of the RC Operations, the Group as the beneficial owner, is legally entitled to operate all these properties as if it was the legal owner. (c) Fair values The investment properties were revalued on a market value basis as at 31 March 2007 and 2006, by CB Richard Ellis Limited (“CBRE”), an independentfirm of professional qualified valuers. To arrive at the market valuations of the investment properties, CBRE valued each property individually at market value as of the balance sheet date, using a number of valuation methodologies, as further set out in note 4. In arriving at the market values, CBRE has assumed, inter alia, that legal titles to the properties are in place as of the property valuation date, notwithstanding that legal titles to certain of the properties have not been granted as of the balance sheet date (see note (b) above). (d) REIT Code restrictions In accordance with the REIT Code, the Group is prohibited from disposing of its properties for at least two years from the time such properties are acquired, unless unitholders have passed a special resolution consenting to the proposed disposal. (e) Security for the Group’s loan facilities As at 31 March 2007, certain of the Group’s investment properties, amounting to approximately HK$4 billion (2006: Nil), were pledged to secure the Group’s loan facilities.
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