NOTES TO THE FINANCIAL STATEMENTS Cont’d 11. Deferred tax assets/(liabilities) cont’d Estimation uncertainty and significant judgements In October 2013, PMBTU was awarded Pioneer Status by the Malaysian Investment Development Authority (“MIDA”), which entitled PMBTU exemption from tax for a period of 15 years from 1 January 2013 to 31 December 2027 on 100% of statutory income derived from the production of aluminium products. The measurement of the net deferred tax liabilities of PMBTU amounting to RM270,700,000 (2021: RM189,404,000) is based on the assumptions below: (i) PMBTU will continuously achieve the conditions imposed in the MIDA’s approval to enjoy the Pioneer Status till the maturity on 31 December 2027; (ii) there will not be any substantial changes to the estimated useful lives of the property, plant and equipment of PMBTU nor will there be any significant disposals/write-off of existing property, plant and equipment up to 31 December 2027; and (iii) there will not be any substantial changes to the currently enacted tax rates. Unrecognised deferred tax assets Deferred tax assets have not been recognised in respect of the following items (stated at gross): Group 2022 2021 RM’000 RM’000 Tax loss carry-forwards 363,980 240,226 Capital allowance carry-forwards 367 - 364,347 240,226 Deferred tax assets are only recognised to the extent that it is probable that taxable profits will be available against which these assets can be utilised. The tax loss carry-forwards of Group entities (other than foreign subsidiaries) of RM302,078,000 (2021: RM163,870,000) can be carried forward up to 10 consecutive years of assessment (“YA”) following the enactment of the Finance Act 2021 from the YAs as shown below: Group 2022 2021 RM’000 RM’000 YA2018 and prior YAs 4,728 4,728 YA2021 83,896 159,142 YA2022 213,454 - 302,078 163,870 The other deductible temporary differences do not expire under current tax legislation. Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable profits will be available against which the Group entities can utilise the benefits therefrom. ANNUAL REPORT 2022 256
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