Page 130 - EXIM-Bank_Annual-Report-2022

128 eXIM BANK MALAYsIA ANNUAL REPORT 2022

Notes to the fiNaNcial statemeNts

2. sIGNIFICANt ACCouNtING PoLICIes (cont’d.)
2.4 Summary of significant accounting policies (cont’d.)

(o) Income tax (cont’d.)
Deferred tax is measured at the tax rate that is expected to apply in the year when the asset is realised or the
liability is settled, based on tax rate that has been enacted or substantively enacted at the balance sheet date.
Deferred tax is recognised as income or an expense and included in the statement of profit or loss for the year,
except when it arises from a transaction which is recognised directly in equity, in which case the deferred tax is also
charged or credited directly in equity, or when it arises from a business combination that is an acquisition, in which
case the deferred tax is included in the resulting goodwill or negative goodwill.
In determining the Group’s and the Bank’s tax charge for the year it involves estimation and judgement, which
includes an interpretation of local tax law and an assessment of whether the tax authority will accept the position
taken. The Group and the Bank provides for current tax liabilities at the best estimate based on all available
evidence and the amount that is expected to be paid to the tax authority where and outflow is probable.

The recoverability of the Group’s and the Bank’s deferred tax assets is based on management’s judgement of the
availability of future taxable profits against which the deferred tax will be utilised.

(p) Zakat

Zakat is payable by the Group and the Bank in compliance with the principle of Shariah and in line with National
Fatwa Committee regulations.
(i) Method applied

Zakat is calculated using the growth method which is based on the adjusted net asset of the Group and the
Bank, i.e. net asset excludes any items that do not meet the condition for zakat assets and liabilities.

(ii) Beneficiaries of zakat fund
The method of zakat distribution, as being practised by the Group and the Bank, is as follows:
• Zakat is paid to Pusat Pungutan Zakat (“PPZ”) based on certain percentage of the adjusted net asset of the
Bank and the Group;
• PPZ will determine a certain percentage of the zakat for the Bank’s own distribution; and
• The distribution of zakat will be allocated by the Bank to three (3) groups of people who are eligible to
receive zakat (asnaf):
a. The destitute (fakir);
b. The poor (miskin); and
c. Those in the cause of Allah (fi sabilillah).
(q) Foreign currencies

The Group’s consolidated financial statements are presented in Malaysian Ringgit, currency which is also the Bank’s
(i.e. parent company’s) functional currency. For each entity, the Group determines the functional currency and items
included in the financial statements of each entity are measured using that functional currency. The Group uses the
direct method of consolidation, the gain or loss that is reclassified to profit or loss reflects the amount that arises
from using this method.