KENANGA ANNUAL REPORT 2018

NOTES TO THE FINANCIAL STATEMENTS 31 December 2018 217 ANNUAL REPORT 2018 40. TAXATION AND ZAKAT (CONT’D.) A reconciliation of taxation applicable to profit before taxation at the statutory income tax rate to taxation at the effective tax rate of the Group and of the Bank is as follows: Group Bank 2018 2017 2018 2017 RM’000 RM’000 RM’000 RM’000 Profit before taxation and zakat 28,851 40,619 38,563 61,608 Taxation at Malaysian statutory income tax rate of 24% (2017: 24%) 6,924 9,748 9,255 14,786 Effect of income not subject to tax (1,527) (2,148) (399) (1,709) Effect of expenses not deductible for tax purposes 7,754 4,488 3,926 2,373 Loss not deductible for tax purposes - 3,205 - - Utilisation of previously unrecognised tax loss and unabsorbed capital allowances - (366) - - Deferred tax asset not recognised on unutilised business losses (221) - - - Deferred tax asset not recognised on unabsorbed capital allowances (177) 41 - - Deferred tax asset not recognised on balancing allowance - 196 - - Over provision of deferred tax assets in prior financial years 1,104 1,134 1,247 556 Under/(Over) provision of income tax expense in prior financial years 2,668 (55) 847 11 Tax expense for the financial year 16,525 16,243 14,876 16,017 Zakat 415 210 340 210 Tax expense and zakat for the financial year 16,940 16,453 15,216 16,227