Frontken Berhad Annual Report 2019

103 Frontken Corporation Berhad (651020-T) ANNUAL REPORT 2019 16. DEFERRED TAX ASSETS/LIABILITIES (CONT’D) As mentioned in Note 3, the tax effects of deductible temporary differences, unused tax losses and unused tax credits which would give rise to deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. As of 31 December 2019, the estimated amount of net deferred tax assets, calculated at the current tax rate which has not been recognised in the financial statements of the Group due to uncertainty of its realisation, is as follows:- The Group Deferred Tax Assets/(Liabilities) 2019 2018 RM RM Unutilised tax losses 1,020,037 1,197,575 Unabsorbed capital allowances - 130,084 Temporary differences arising from property, plant and equipment 254,880 14,160 1,274,917 1,341,819 The unutilised tax losses and unabsorbed capital allowances are subject to the agreement of the tax authorities. 17. FIXED DEPOSITS WITH LICENSED BANKS Fixed deposits with licensed banks of the Group at the end of the reporting period bore effective interest rates ranging from 0.25% to 3.35% (2018: 0.25% to 3.35%) per annum. The fixed deposits of the Group have maturity periods ranging from 30 to 365 days (2018: 30 to 365 days). The fixed deposits of the Group amounting to RM2,068,434 (2018: RM1,961,948) are pledged to licensed banks as security for banking facilities granted to the Group as disclosed in Note 25 to the financial statements. In the previous financial year, pursuant to the Service Agreements entered between TTES and its customer, TTES was required to pledge the fixed deposits with licensed bank amounted to RM1,176,576 as security for the bank guarantee which were provided for projects that were secured by TTES. As the availability period of the bank guarantee facility for these projects were more than a year, hence the fixed deposits with licensed banks were classified as non-current assets. 18. INVENTORIES The Group 2019 2018 RM RM Raw materials 4,945,032 4,119,988 Work-in-progress 5,001,806 3,257,330 Finished goods 5,154,611 6,333,353 15,101,449 13,710,671 Recognised in profit or loss:- Inventories recognised as cost of sales 26,149,118 27,330,731 Reversal of inventories previously written down (6,208) - The reversal of write-down was in respect of inventories sold above their carrying amounts during the financial year. Notes To The Financial Statements (cont’d)