KENANGA ANNUAL REPORT 2019

232 NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2019 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 2019 RM'000 2018 RM'000 2019 RM'000 2018 RM'000 Profit before taxation and zakat 42,951 28,851 40,376 38,563 Taxation at Malaysian statutory income tax rate of 24% (2018: 24%) 10,308 6,924 9,690 9,255 Effect of income not subject to tax (688) (1,527) (405) (399) Effect of expenses not deductible for tax purposes 2,549 4,671 2,675 3,926 Loss not deductible for tax purposes 1,818 3,083 - - Utilisation of previously unrecognised tax loss and unabsorbed capital allowances (110) (398) - - Deferred tax asset not recognised on unutilised business losses 525 - - - Deferred tax asset not recognised on unabsorbed capital allowances 18 - - - Over provision of deferred tax assets in prior years 1,429 1,104 1,428 1,248 Under provision of income tax expense in prior years 343 2,668 326 846 Tax expense for the year 16,192 16,525 13,714 14,876 Zakat 373 415 357 340 Tax expense and zakat for the financial year 16,565 16,940 14,071 15,216