Eng - IOI Group

notestothefinancialstatements cont’d9 TAXATION cont’dThe numerical reconciliation between the average effective tax rate and the applicable tax rate are as follows:In %GroupCompany2003 2002 2003 2002Average applicable tax rate 28.00 28.00 28.00 28.00Tax effect in respect of:Non allowable expenses 3.80 1.68 9.15 1.82Non taxable income (0.74) (2.69) (2.96) (7.75)Revenue expenses capitalised (0.19) (0.19) (0.05) (0.10)Tax exempt income (1.86) (1.61) (4.92) (3.82)Tax incentives and allowances (6.77) (4.18) (0.35) (0.55)Utilisation of previously unregonised tax lossesand capital allowances (0.62) (0.72) - -Double deduction (0.29) (0.43) (0.35) (0.47)Revaluation deficit 0.37 - - -Deferred tax assets recognised (0.57) (0.33) - -Different tax rate in foreign jurisdiction (0.16) (0.06) - -Other items 0.11 0.79 - -Average effective tax rate 21.08 20.26 28.52 17.13(Over)/under provision in prior years (1.26) 0.03 (1.37) (3.38)19.82 20.29 27.15 13.75The amount of tax savings arising from the utilisation of unrecognised brought forward unabsorbed tax losses forthe Group amounted to approximately RM2,893,000 (2002 - RM3,957,000).Subject to agreement with the tax authorities, certain subsidiaries of the Group have unabsorbed tax losses ofapproximately RM358,121,000 (2002 - RM400,871,000), for which the related tax effects have not beenrecognised in the financial statements. These losses are available to be carried forward for set off against futurechargeable income when these subsidiaries derive future assessable income of a nature and amount sufficient forthe tax losses to be utilised.IOI Corporation BerhadAnnual Report 2003152