The following summarized statement of profit or loss has been obtained from the annual re port of MCC Ltd, a company engaged in the extraction and sale of copper in Zambia. MCC L td is wholly owned subsidiary company of Delia, an Indian based multinational mining com pany. The group prepares financial statements in United States dollars. MCC LTD STATEMENT OF PROFIT OR LOSS FOR THE YEAR ENDED 31 DECEMBER 2017 Sales Revenue (Note 1) Cost of Sales Gross Profit Operating expenses (Note 2) Finance cost (Note 3) Investment income (Note a) Profit before taxation Company income tax (5) Profit for the financial year K 49,000,000 (19,794,000) 29,794,000 (10,780,000) (2,000,000) 244,000 16,670,000 (2,917,926) 13,752,074 The following additional information is available: (1) The figure for sales revenue in the statement of profit or loss above represents the gr oss sales of copper based on the average London Metal Exchange cash price, which was above $6,000 throughout the tax year 2017, Mineral royalty paid during the tax y ear 2017 has not been accounted for in the statement of profit or loss shown above. (2) Operating expenses include K380,000 incurred on drilling boreholes in the local minin g township, K220,000 incurred on rehabilitation of the sewerage and drainage system in the local mining township and K90,000 incurred on the repair and installation of th e street lighting system in the mine township. (3) The company has a debt: equity ratio of 45% (4) Investment income comprises fixed deposit interest earned amounting to K54,000 an d dividends received from shares held in non-mining companies amounting to K190, 000. These were the gross amounts earned in all cases; withholding tax was deducte d at source. (5) (6) 1 The company income tax shown in the statement of profit or loss above represents t he provisional company income tax paid by the company in respect of the tax year 2 017. The company has had the following results from mining operations in recent years: Year ended 31 December 2014 K 2015 2016 K K Tax adjusted Mining profit/(loss) before loss relief (10,600,000) 8,190,476 7,340,000 (7) The (K/$) exchange rates published by the Bank of Zambia and approved by the Co mmissioner General are as follows: