KUB Malaysia Berhad Annual Report 2021

28. DEFERRED TAX LIABILITIES (cont’d) Under the Malaysian Finance Act 2018 which was gazetted on 27 December 2018, the Group’s and the Company’s unutilised tax losses will be imposed with a time limit of utilisation. Effective from the year of assessment 2018, unutilised tax losses in a year of assessment can only be carried forward for a maximum period of 7 consecutive years of assessment. Expiry date of the Group and the Company unutilised tax losses is summarised below: Group Company 30.6.2021 31.12.2019 30.6.2021 31.12.2019 RM’000 RM’000 RM’000 RM’000 Tax losses YA 2018 and before – will expire in 2025 67,806 70,220 8,496 10,905 Tax losses YA2019 (CY) – expire in 2026 11,980 24,593 6,070 6,070 Tax losses YA2020 (CY) – expire in 2027 1,217 - - - Tax losses YA2021 (CY) – expire in 2028 1,217 - - - Total 82,220 94,813 14,566 16,975 29. DERIVATIVE FINANCIAL LIABILITIES Group Contract Fair value notional of derivative amount liabilities RM’000 RM’000 30.6.2021 Forward currency contracts 18,001 (18) 31.12.2019 Forward currency contracts 22,309 (21) The Group uses forward currency contracts to manage some of the transaction exposure. These contracts are not designated as cash flow or fair value hedges and are entered into for periods consistent with currency transaction exposure and fair value changes exposure. Forward currency contracts are used to hedge the Group’s purchases denominated in United States Dollar (‘USD’) for which firm commitments existed at the end of the reporting period, extending to July 2021. During the financial period, the Group recognised a loss of RM17,760 (31.12.2019: loss of RM20,924) arising from fair value changes of derivative as at the end of the reporting period. The fair value changes are attributable to changes in foreign exchange spot and forward rate. Forward currency contracts are valued using valuation obtained from counterparties. NOTES TO THE FINANCIAL STATEMENTS 122 KUB MALAYSIA BERHAD