ENRA Group Berhad Annual Report 2018

105 A N N U A L R E P O R T 2 0 1 8 NOTES TO THE FINANCIAL STATEMENTS 31 March 2018 cont’d 32. TAX EXPENSE (Cont’d) (c) The numerical reconciliations between the tax expense and the product of accounting (loss)/profit multiplied by applicable tax rate of the Group and of the Company are as follows: Group Company 2018 2017 2018 2017 RM’000 RM’000 RM’000 RM’000 Continuing operations (Loss)/Profit before tax (781) 28,521 7,297 (5,574) Tax at Malaysian statutory tax rate of 24% (2017: 24%) (187) 6,845 1,751 (1,338) Difference in tax rate 13 12 - - Non-allowable expenses 1,593 2,673 1,813 1,940 Non-taxable income (583) (1,059) (4,405) (757) Effects of share of results in an associate - 4 - - Deferred tax assets not recognised 1,355 468 841 155 2,191 8,943 - - (Over)/Under provision in prior years: - income tax (1,740) 35 - - - deferred tax 1,693 11 - - 2,144 8,989 - - 33. DISCONTINUED OPERATIONS (a) On 15 May 2017, the Company had entered into six (6) agreements to dispose of the Group’s property, plant and equipment, investment properties and the entire equity interests in Nautical Gold Sdn. Bhd. (“NGSB”), Evergreen Sprint Sdn. Bhd. (“ESSB”) and Essential Vista Sdn. Bhd. (“EVSB”) for a total cash consideration of RM85,149,000. The decision to dispose these investment properties and investment assets was caused by low net rental income and rental yields and the disposal will provide an avenue for the Group to realise substantial cash proceeds which is intended to be utilised for repayment of bank borrowings associated with these investment properties, defrayment of expenses relating to the disposal, investment in new businesses, project and acquisition, and to fund the working capital. (b) An analysis of the results of the discontinued operations are as follows: Group Company 2018 2017 2018 2017 RM’000 RM’000 RM’000 RM’000 Revenue 9,523 9,628 9,622 9,760 Cost of sales (3,621) (3,618) (3,621) (3,618) Gross profit 5,902 6,010 6,001 6,142 Other income 56 57 56 57 Expenses (141) (87,500) (132) (87,092) Finance costs (2,527) (2,727) (2,527) (2,727) Profit/(Loss) before tax 3,290 (84,160) 3,398 (83,620) Taxation (71) 149 (71) 145 Profit/(Loss) for the financial year 3,219 (84,011) 3,327 (83,475)