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Notes To The Consolidated Financial Statements
(Expressed in Renminbi)
1
/ China Communications Services Corporation Limited
10 Income tax
(continued)
(b) Reconciliation between tax expense and accounting profit at applicable
tax rates:
2011
2010
RMB’000
RMB’000
(Restated)
Profit before tax
2,640,064
2,260,362
Expected income tax expense at a statutory tax rate of 25% (2010:
25%) (note (i))
660,016
565,091
Differential tax rates on subsidiaries’ income (note (i))
(181,472)
(163,099)
Non-deductible expenses (note (ii))
52,229
49,399
Non-taxable income
(28,224)
(13,154)
Tax losses not recognised
39,402
28,292
Utilisation of previously unrecognised tax losses
(5,413)
(9,705)
Effect on opening deferred tax resulting from a reduction in PRC
statutory tax rate (note (iii))
(2,346)
1,199
Income tax
534,192
458,023
Notes:
(i)
The provision of income tax of the Group is calculated based on a statutory rate of 25% of the
assessable profit of the Group as determined in accordance with the relevant PRC income tax rules
and regulations for the year ended 31 December 2011 and for the year ended 31 December 2010,
except for certain subsidiaries of the Group, which are taxed at preferential rates of 15% or 24%.
(ii)
The amount includes personnel and other miscellaneous expenses in excess of statutory deductible
limits for tax purposes.
(iii)
The amounts in the years ended 31 December 2011 and 2010 represent the tax effect on opening
balances of deferred tax assets arising from the change in the enterprise income tax rate applicable
to certain subsidiaries due to changes in preferential tax qualification during the years concerned. The
deferred tax assets were remeasured for the change in applicable tax rates.
11 Other comprehensive income
Available-for-sale securities
2011
2010
RMB’000
RMB’000
Changes in fair value recognised during the period
(24,408)
(18,426)
Net deferred tax credited to other comprehensive income
6,103
1,392
Net movement in the fair value reserve during the period recognised in
other comprehensive income
(18,305)
(17,034)