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(11817-V) |

Annual Report



2.4 Significant Accounting Estimate and Judgement (Cont’d)

Key Sources of Estimation Uncertainty (Cont’d)

(i) Classification between investment properties and property, plant and equipment (Cont’d)

The Group has sub-let portion of a building but has decided to classify the entire building as

property, plant and equipment as this portion cannot be sold separately and significant portion of

the building is held for use in the production or supply of goods or services or for administrative


(ii) Income Tax

The Group and the Company are subject to income taxes in Malaysia and other countries.

Significant judgement is required in determining the allowances and deductibility of certain

expenses during the estimation of the provision for income taxes. There are many transactions

and calculations for which the ultimate tax determination is uncertain during the ordinary course of

business. The Group and the Company recognise liabilities for anticipated tax matters based on

estimates of whether additional taxes will be due. Where the final tax outcome of these matters

is different from the amounts that were initially recorded, such differences will impact the income

tax and deferred tax provisions in the period in which the determination is made. The Group’s and

the Company’s tax expense for the current financial year is RM31,671,000 (2015: RM38,285,000)

and RM820,000 (2015: RM1,336,000) respectively, as disclosed in Note 10.

(iii) Deferred Tax Assets

Deferred tax assets are recognised for all deductible temporary differences to the extent that it is

probable that taxable profit will be available against which the deductible temporary differences can

be utilised. Significant management judgement is required to determine the amount of deferred

tax assets that can be recognised, based upon the likely timing and level of future taxable profits

together with future tax planning strategies. The Group’s deferred tax assets as at 31 March 2016

is RM8,394,000 (2015: RM5,445,000) as disclosed in Note 30.

(iv) Useful lives and depreciation of property, plant and equipment

Management uses key source of estimation and critical judgement in the process of applying the

Group’s accounting policies for depreciation in respect of plant and machinery.

The cost of plant and machinery is depreciated on a straight-line basis over the assets’ useful

lives. Management estimates that the useful lives of the plant and machinery to be within 3 to 25

years. These are common life expectancies applied in the industry.

Changes in the expected level of usage and technological developments could impact the economic

useful lives and the residual values of these assets, therefore future depreciation charges could be