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The Board of Directors of AirAsia Berhad ("AirAsia" or the "Company") wishes to inform that the Group’s audited profit after tax and minority interests for the financial year ended 30 June 2006 has now been revised to RM88.4 million. The Group had in its fourth quarter announcement dated 29 August 2006 stated that the unaudited profit after tax and minority interests for the year ended 30 June 2006 was RM126.9 million. This gives rise to a deviation of RM38.5 million or 30.3%.

The deviation arose solely from the application of FRS 112 2004 on Income Taxes which does not recognise re-investment or other tax allowances in excess of its normal capital allowances. The Directors maintain the view that the application of FRS 112 2004 will not fairly present the financial position and performance of the Company because the unutilised capital allowances and investment tax allowances available to the Company are expected to accumulate to a very substantial amount and will shelter the Company from future tax liability for many years to come.

In the preparation of the fourth quarter announcement, the Company had adopted a conservative approach and recognised only part of the available investment tax allowances as deferred tax assets to offset the deferred tax liability. However, had the Company recognised the investment tax allowances in full as permitted under IAS 12, the Group and Company profit after tax and minority interest will be RM242.0 million and RM233.1 million respectively, bringing the shareholders funds to RM1.206 billion at Group level and RM1.203 billion at Company level as illustrated in the table below. This treatment is permitted under the International Financial Reporting Standards, principally IAS 12, and this has been confirmed by PricewaterhouseCoopers, the Company’s auditors.





Group	Adoption of IAS 12 (Full Recognition)	Partial Recognition Per 4th Quarter Announcement	Compliance with FRS 112 2004
	RM’000	RM’000	RM’000
Profit after tax and minority interests	242.0	126.9	88.4
Shareholders’ Funds	1,206	1,091	1,053
Basic Earnings Per Share	10.3	5.4	3.8


This announcement is dated 10 November 2006

Announcement Info