MKH Annual Report 2017

8. TAX EXPENSE (continued) A reconciliation of tax expense applicable to profit before tax at the applicable statutory income tax rate to tax expense at the effective income tax rate of the Group and of the Company is as follows: The Group The Company 2017 2016 2017 2016 RM RM RM RM Profit before tax 193,592,301 304,668,805 50,665,944 70,203,441 Tax calculated using Malaysian tax rate of 24% 46,462,200 73,120,500 12,159,800 16,848,800 Tax effects of: Non-deductible expenses 11,837,430 8,682,056 1,742,000 1,419,056 Non-taxable income (2,862,615) (1,899,207) (10,648,800) (15,754,800) Share of results of associates 529,475 196,446 - - Effect of changes in tax rate: Real property gains tax (567,696) (947,000) - - Effect of changes in overseas tax rate: The People’s Republic of China 10,389 20,833 - - Republic of Indonesia 156,638 646,596 - - Deferred tax assets not recognised 9,180,863 12,928,706 - - Reversal of deferred tax asset recognised in prior year - - - 737,800 Realisation of deferred tax assets not recognised in prior financial years (1,851,706) - - - Utilisation of reinvestment allowance (516,000) (1,008,000) - - Under/(Over)provision in prior financial year: Current tax 7,624,262 (1,635,843) 6,546 (11,058) Deferred tax (1,254,197) 385,679 - - Tax expense 68,749,043 90,490,766 3,259,546 3,239,798 As mentioned in Note 3, the tax effects of deductible temporary differences, unused tax losses and unused tax credits which would give rise to net 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 30 September 2017, the estimated amount of deductible temporary differences, unused tax losses and unused tax credits, for which the net deferred tax assets are not recognised in the financial statements due to uncertainty of realisation, is as follows: The Group 2017 2016 RM RM Unused tax losses 23,609,232 22,309,254 Unabsorbed capital allowances 34,620 23,920 Other temporary differences 78,621,319 49,393,843 102,265,171 71,727,017 Notes to the Financial Statements For the Financial Year ended 30 September 2017 124 MKH Berhad • Annual Report 2017