Notice of Annual General Meeting - Announcements - Bursa Malaysia

38
ANNUAL REPORT 2012 GROMUTUAL BERHAD (Company No. 625034-X)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012 (continue)
(ii) Defined Contribution Plans
The Group and the Company are required by law to make monthly contributions to the Employees'
Provident Fund (“EPF”), a statutory defined contribution plan for all their eligible employees based
on certain prescribed rates of the employees' salaries. The Group's and the Company's contributions
to EPF are disclosed separately. The employees' contributions to EPF are included in salaries and
wages. Once the contributions have been paid, there are no further payment obligations.
Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as
reported in the statements of comprehensive income because it excludes items of income or
expense that are taxable or deductible in other years and it further excludes items that are never
taxable or deductible. The Group’s and the Company’s liability for current tax is calculated using tax
rates that have been enacted or substantively enacted by the end of reporting period.
Deferred tax
Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the
financial statements and the corresponding tax bases used in the computation of taxable profit.
Deferred tax liabilities are generally recognised for all taxable temporary differences, and deferred tax
assets are generally recognised for all deductible temporary differences, unused tax losses and unused
tax credits to the extent that it is probable that taxable profits will be available against which deductible
temporary differences, unused tax losses and unused tax credits can be utilised. Such assets and
liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition
(other than in a business combination) of other assets and liabilities in a transaction that affects neither
the taxable profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at end of each reporting date and reduced to
the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part
of the asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period
in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been
enacted or substantively enacted by the end of each reporting date. The measurement of deferred tax
liabilities and assets reflects the tax consequences which the Group and the Company expect, at the
end of each reporting date, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax
assets against current tax liabilities and when they relate to income taxes levied by the same taxation
authority and the Group and the Company intend to settle its current tax assets and liabilities on a net
basis.
Current and deferred tax for the year
Current and deferred tax are recognised as an expense or income in profit or loss, except when they
relate to items credited or debited outside profit or loss (either in other comprehensive income or directly
in equity), in which case the tax is also recognised outside profit or loss (either in other comprehensive
income or directly in equity), or where they arise from the initial accounting for a business combination.
In the case of a business combination, the tax effect is included in the accounting for the business
combination.
Property, Plant and Equipment
Property, plant and equipment are stated at cost less accumulated depreciation and accumulated
impairment losses, if any.
Gains or losses arising from the disposal of an asset are determined as the difference between the
estimated net disposal proceeds and the carrying amount of the asset, and are recognised in profit or
loss.
Property, plant and equipment are depreciated on a straight-line method to their residual values at
rates based on the estimated useful lives of the various assets.
The annual rates of depreciation are as follows:
Motor vehicles 20%
Office equipment 10% to 25%
Furniture and fittings 10% to 20%
Renovations 10%