UEM EDGENTA BERHAD ANNUAL REPORT 2021 1 2 3 4 5 6 7 273 272 NOTES TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS FINANCIAL STATEMENTS 29. DEFERRED TAX (CONTD.) Deferred tax assets have not been recognised in respect of the following items: Malaysian Companies Group Company 2021 RM’000 2020 RM’000 2021 RM’000 2020 RM’000 Unused tax losses 172,135 131,951 90,369 73,806 Unabsorbed capital allowances 45,291 30,832 38,769 28,370 Others 17,952 16,838 8,589 8,039 235,378 179,621 137,727 110,215 Deferred tax of 24% 56,491 43,109 33,054 26,452 Deferred tax assets have not been recognised in respect of these items for certain subsidiary companies as it is not probable that taxable profits of the subsidiary companies would be available against which the unutilised tax losses, unabsorbed capital allowances and other deductible temporary differences could be utilised. The unutilised capital allowance of the Group are available indefinitely for offsetting against future taxable profits of the respective entities within the Group, subject to no substantial changes in shareholdings of those entities under the Income Tax, 1967 and guidelines issued by the tax authority. On the other hand, the Malaysia Finance Act gazetted on 27 December 2018 has imposed a time limitation to restrict the carry forward of the unutilised tax losses for Malaysian entities. Based on the latest Malaysian Finance Act, gazetted on 31 December 2021, the time limit for the carry forward of the unutilised tax losses has been extended from 7 years to 10 years. As a result of this change, the unutilised tax losses accumulated up to the year of assessment 2018 are allowed to be carried forward for 10 consecutive years of assessment (i.e. from years of assessment 2019 to 2028) and any balance of the unutilised tax losses therefore shall be disregarded. The foreign unutilised losses and unabsorbed capital allowances applicable to foreign incorporated subsidiary companies, if any, are pre-determined by and subject to the tax legislations of the respective countries. 30. SHARE CAPITAL Number of ordinary shares Amount 2021 ‘000 2020 ‘000 2021 RM’000 2020 RM’000 Group and Company Issued and fully paid up At 1 January/31 December 831,624 831,624 268,074 268,074 The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company. All ordinary shares rank equally with regard to the Company’s residual assets. 31. CAPITAL AND OTHER MERGER RESERVE The acquisitions of OGB and EPB in prior years, which was accounted for using the pooling of interest method, gave rise to the following: (a) Capital reserve This reserve represents the excess of issue price of the Company’s shares over the par value in accordance with Section 60(4)(a) of the Companies Act, 1965. This reserve had been partially set off against the merger deficit reserve in prior years for the purpose of presentation in the financial statements of the Group. (b) Other merger reserve This reserve represents the excess of fair value of the Company’s shares at the acquisition date over the issue price. This reserve had been fully set off against the merger deficit reserve for the purpose of presentation in the financial statements of the Group.
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