Frontken Berhad Annual Report 2017

96 Frontken Corporation Berhad (651020-T) ANNUAL REPORT 2017 14. 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 2017, 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) 2017 2016 RM RM Unutilised tax losses 2,502,877 1,431,749 Unabsorbed capital allowances 295,533 173,851 Temporary differences arising from property, plant and equipment - (283,821) Others - (10,460) 2,798,410 1,311,319 The unutilised tax losses and unabsorbed capital allowances are subject to the agreement of the tax authorities. 15. FIXED DEPOSITS WITH LICENSED BANKS Fixed deposits with licensed banks of the Group earn effective interests ranging from 0.25% to 4.33% (2016: 0.25% to 3.45%) per annum. The fixed deposits of the Group have average maturity periods ranging from 30 to 365 days (2016: 10 to 365 days). Fixed deposits with licensed banks of the Company earn an effective interest of 2.95% (2016: 2.95%) per annum. The fixed deposits of the Company have a maturity period of 30 days (2016: 30 days). The fixed deposits of the Group and of the Company amounting to RM3,136,080 (2016: RM3,205,263) and RM1,104,683 (2016: RM1,072,697) are pledged to licensed banks as security for banking facilities granted to the Group and the Company. Pursuant to the Service Agreements entered between TTES and its customer, TTES is required to pledge the fixed deposits with licensed bank amounted to RM1,255,726 (2016: RM1,146,156) as security for the bank guarantee which are provided for projects that are secured by TTES. As the availability period of the bank guarantee facility for these projects are more than a year, hence, the fixed deposits with licensed banks are classified as non-current assets. 16. INVENTORIES The Group 2017 2016 RM RM Raw materials 4,617,245 4,486,336 Work-in-progress 2,971,259 3,275,442 Finished goods 5,886,388 3,214,349 13,474,892 10,976,127 Recognised in profit or loss: Inventories recognised as cost of sales 26,617,869 26,556,170 Inventories written off 137,087 492,724 Notes To The Financial Statements (cont’d)