2018 UEM Edgenta Annual Report

32. DEFERRED TAX (CONT’D.) Unused tax losses At the reporting date, the Group has tax losses of approximately RM37.1 million (2017: RM34.1 million) that are available for offset against future taxable profits of the companies in which the losses arose, for which no deferred tax asset is recognised due to uncertainty of its recoverability. The availability of unused tax losses for offsetting against future taxable profits of the respective subsidiaries in Malaysia is subject to no substantial changes in shareholdings of those subsidiaries under the Income Tax Act, 1967 and guidelines issued by the tax authority. Effective from year of assessment 2019 as announced in the Annual Budget 2019, the unused tax losses of the Company as at 31 December 2018 and thereafter will only be available for carry forward for a period of 7 consecutive years. Upon expiry of the 7 years, the unabsorbed losses will be disregarded. The use of tax losses of subsidiaries in other countries is subject to the agreement of the tax authorities and compliance with certain provisions of the tax legislation of the respective countries in which the subsidiaries operate. Unrecognised temporary differences relating to investments in subsidiaries and associates At the reporting date, no deferred tax liabilities have been recognised that would be payable on the undistributed profits of subsidiaries and associates of the Group. The Group has determined that these undistributed profits will not be distributed in the foreseeable future. 33. SHARE CAPITAL AND SHARE PREMIUM Number of ordinary shares Amount 2018 2017 2018 2017 ‘000 ‘000 RM’000 RM’000 Group and Company Issued and fully paid up At 1 January 831,624 831,624 268,074 207,906 Transition to no par value regime – – – 60,168 31 December 831,624 831,624 268,074 268,074 Share premium At 1 January – 60,168 Transition to no par value regime – (60,168) 31 December – – The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company. All ordinary shares rank equally with regard to the Company’s residual assets. No par value regime The Companies Act 2016 (“Act”), which came into effect on 31 January 2017, abolished the concept of authorised share capital and par value of share capital. Consequently, the amounts standing to the credit of the share premium account becomes part of the Company’s share capital pursuant to the transitional provisions set out in Section 618(2) of the Act. Notwithstanding this provision, the Company may within 24 months from the commencement of Section 74 of the Act, use the amount standing to the credit of its share premium account of RM60.2 million for purposes as set out in Section 618(3) of the Act. There is no impact on the number of ordinary shares in issue or the relative entitlement of any of the members as a result of this transition. NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2018 Management Discussion & Analysis UEM Edgenta Berhad Annual Report 2018 About UEM Edgenta Chairman’s Statement 228