Annual Report 2019

ANNUAL REPORT 2019 237 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 March 2019 36. DEFERRED TAXATION The major deferred tax liabilities (assets) recognised by the Group, and movements thereon during the current and prior years are as follows: Accelerated tax depreciation Revaluation of investment properties Revaluation of assets Fair value adjustments on business combination Tax losses Others Total HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 (note) At 1 April 2017 86,290 147,656 60,726 35,506 (64,659) 97,963 363,482 Charge (credit) to profit or loss 2,885 9,415 – (1,245) (5,134) 125,120 131,041 Charge to assets revaluation reserve – – 9,000 – – – 9,000 Exchange alignment (597) 19,259 6,724 – – 5,867 31,253 At 31 March 2018 88,578 176,330 76,450 34,261 (69,793) 228,950 534,776 Adjustments (note 2) – – – – – 16,026 16,026 At 1 April 2018 (restated) 88,578 176,330 76,450 34,261 (69,793) 244,976 550,802 (Credit) charge to profit or loss (2,411) 147,369 – (4,950) 236 72,509 212,753 Acquisition of subsidiaries (note 38(a)) – – – 15,921 – – 15,921 Exchange alignment 83 (17,246) (6,002) (319) 1,536 (11,940) (33,888) At 31 March 2019 86,250 306,453 70,448 44,913 (68,021) 305,545 745,588 Note: Others represent the temporary difference arising from the deduction of the interest expenses and development expenditure of overseas subsidiaries at the development stage. For the purposes of presentation of the consolidated statement of financial position, certain deferred tax (assets) liabilities have been offset. The following is the analysis of the deferred tax balances for financial reporting purposes: 2019 2018 HK$’000 HK$’000 Deferred tax assets (49,640) (48,410) Deferred tax liabilities 795,228 583,186 745,588 534,776 The Group recognises deferred tax in respect of the change in fair value of the investment properties located in the PRC and Australia, as these properties are held under a business model whose objective is to consume substantially all the economic benefits embodied in these investment properties over the time, i.e. through usage of such properties for rental purpose. No deferred tax is recognised in respect to the changes in fair value of the investment properties located in Hong Kong and Singapore, as those properties are presumed to be recovered entirely through sales. At 31 March 2019, the Group has unused tax losses of HK$1,447,678,000 (2018: HK$1,384,764,000) available to offset against future profits. A deferred tax asset has been recognised in respect of such losses to the extent of HK$292,873,000 (2018: HK$391,825,000). No deferred tax asset has been recognised in respect of the remaining tax losses of HK$1,154,805,000 (2018: HK$992,939,000) due to the unpredictability of future profit streams.