RETICULATION products supplier Hugall and Hoile has posted a $643,359 net after tax profit, down from the $774,000 the company posted in 2002-03.
The company’s group net profit before write offs and income tax was $1.15 million, however, the company decided to write off intangible assets of $511,282 to prepare for the introduction of International Financial Reporting Standards that take effect in the June 30 2005 financial year.
Adding confusion to its announcement, however, was the company’s statement that income tax relating to its profit would be offset by losses carried forward from previous periods.
In its preliminary final report to the Australian Stock Exchange the company records a tax expense of about $120,000, dropping its net, after tax profit to $523,000.
Hugall and Hoile director Rohan Hardy said that tax expense had to be included in the report for accounting purposes.
"We had to book a tax expense. However, with losses carried forward we won’t have to pay that [tax]," he said.
The company reported reduced sales, largely due to the introduction of total domestic irrigation bans in drought affected Victoria, parts of Queensland and, the Australian Capital Territory and New South Wales.