FGV Annual Report 2013

Felda Global Ventures Holdings Berhad 227 14 TAXATION Group Company 2013 2012 2013 2012 RM’000 RM’000 RM’000 RM’000 Malaysian income tax: - In respect of current financial year 139,205 221,352 - 2,639 - In respect of prior financial year 12,557 3,665 (2,168) - Foreign income tax: - In respect of current financial year 820 20,427 - - Deferred tax (Note 48) 214,077 (40,862) (14,822) 1,498 Tax expense/(income) 366,659 204,582 (16,990) 4,137 A reconciliation of income tax expense applicable to profit before taxation after zakat at the Malaysian statutory income tax rate to income tax expense at the effective income tax rate of the Group and of the Company is as follows: Group Company 2013 2012 2013 2012 RM’000 RM’000 RM’000 RM’000 Profit before taxation after zakat 1,503,710 1,077,089 594,361 440,118 Malaysian corporate tax rate of 25% (2012: 25%) 375,928 269,272 148,590 110,030 Tax effect of: - different tax rates in other countries 3,889 (6,761) - - - expenses not deductible for tax purposes 25,167 132,519 42,318 89,472 - changes in tax rate 38,687 - - - - income not subject to tax (108,376) (97,994) (204,575) (195,949) - deferred tax assets not recognised during the year 20,184 4,286 - - - under provision of income tax in prior year 12,557 3,665 (2,168) - - recognition of previously unrecognised deferred tax assets - (100,018) - - - others (1,377) (387) (1,155) 584 Tax expense/(income) 366,659 204,582 (16,990) 4,137 15 (LOSS)/PROFIT FROM DISCONTINUED OPERATIONS On 28 June 2013, Twin Rivers Technologies Enterprise De Transformation De Graines Oleagineuses Du Quebec Inc. (“TRT ETGO”), a wholly- owned subsidiary of Twin Rivers Technologies Holdings Enterprise De Transformation De Graines Oleagineuses Du Quebec Inc. (“TRTH ETGO”), which in turn is a wholly-owned subsidiary of the Company through FGVD and Felda Global Ventures North America Sdn. Bhd. (“FGVNA”), terminated its joint venture with Bunge Ventures Canada L.P. (“Bunge”), comprising the business of the joint venture and dissolving the joint venture entity and terminating the various agreements and arrangements among the parties related to the joint venture including the tolling agreement entered into between Bunge ETGO L.P. and TRT ETGO. The parties entered into a Termination Agreement setting out the manner in which the joint venture and partnership will be wound down and dissolved. The business of the joint venture terminated on 31 August 2013 and the entity was dissolved on 30 November 2013. Following the termination, effective 1 September 2013, TRT ETGO’s activities include the commercial operation of the business as well as the crushing and processing operations and as such, TRT ETGO has recognised revenue from the sale of soybean and canola products and costs of sales from the purchase of soybeans and canola seeds instead of tolling fees. As at 31 December 2013, the results of Bunge ETGO recognised as a loss from discontinuing operations of RM28.75 million in the statements of comprehensive income, with the prior period re-presented accordingly. The discontinued operations were part of the Downstream reportable segment as disclosed in Note 18.