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Annual Report 2017


Notes to the

financial statements

31 march 2017


Significant accounting policies (cont’d.)

2.4 Significant accounting estimate and judgement

Estimates, assumptions concerning the future and judgements are made in the preparation of the financial statements.

They affect application of the Group’s accounting policies, reported amounts of assets, liabilities, income and expenses,

and disclosures made. They are assessed on an on-going basis and are based on experience and other relevant factors,

including expectations of future events that are believed to be reasonable under the circumstances.

Key sources of estimation uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that

have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next

financial year are discussed below:


Classification between investment properties and property, plant and equipment

The Group developed certain criteria in making judgement whether a property qualifies as an investment property.

Investment property is a property held to earn rentals or for capital appreciation or both.

Some properties comprise a portion that is held to earn rentals or for capital appreciation and another portion that

is held for use in the production or supply of goods or services or for administrative purposes. If these portions

could be sold separately (or leased out separately under a finance lease), the Group would account for the portions

separately. If the portions could not be sold separately, the property is an investment property only if an insignificant

portion is held for use in the production or supply of goods or services or for administrative purposes. Judgement

is made on an individual property basis to determine whether ancillary services are so significant that a property

does not qualify as investment property.

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 purposes.


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 RM34,243,000 (2016: RM31,671,000) and RM3,099,000 (2016: RM820,000)

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 2017 is RM6,966,000 (2016: RM8,394,000) as disclosed in Note 28.