Accounting Policies of CSM Technologies Ltd. Company

The following paragraphs provide a list of significant accounting policies adopted by
the Company in preparation of the Financial statements. These policies have been
consistently applied over the reported years, unless otherwise stated.

2.1 Property, Plant and Equipment

Property, plant and equipment is stated at cost, net of accumulated depreciation and
impairment losses, if any. Such cost includes borrowing cost for long-term construction
projects. The cost of an item of property, plant and equipment comprises of:

a. Its purchase price, including import duties and non-refundable purchase taxes,
after deducting trade discounts and rebates.

b. Any costs directly attributable to bringing the asset to the location and
condition necessary for it to be capable of operating in the manner intended by
management.

Subsequent costs incurred are included in the carrying amount of assets or recognized as
separate assets, as appropriate, only when it is probable that future economic benefits
associated with them will flow to the Company and the cost of the item can be measured
reliably and it is expected to be used for more than one year.

An item of Property, plant or equipment is derecognized upon disposal or when no future
economic benefits are expected from the continued use of assets. Any gain or loss arising
on the disposal or retirement of an item of property plant and equipment is recognized in
statement of profit and loss.

Each part of an item of Property, plant and equipment with a cost that is significant in
relation to the total cost of the item is depreciated separately. Advance paid towards
the acquisition of Property, plant and equipment outstanding at each reporting date is
classified as capital advance under other non-current assets and the cost of assets not
put to use before such date are disclosed under ''Capital work in progress''.

The useful lives and residual values of Company''s assets are determined by management
at the time the asset is acquired and reviewed periodically, including at each financial
year end. The lives are based on historical experience with similar assets as well as
anticipation of future events, which may impact their life, such as changes in technology.
The estimated useful lives of assets are as follows:

The residual value of assets for depreciation purpose is considered at 5% of the original
cost of the asset. The estimated useful life of the assets is reviewed at the end of each
financial year.

Property, plant and equipment with finite life are evaluated for recoverability whenever
there is any indication that their carrying amounts may not be recoverable. If any such
indication exists, the recoverable amount (i.e. higher of the fair value less cost to sell
and the value-in-use) is determined on an individual asset basis unless the asset does
not generate cash flows that are largely independent of those from other assets. In such
cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to
which the asset belongs.

If the recoverable amount of an asset (or CGU) is estimated to be less than its carrying
amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount.
An impairment loss is recognised in the statement of profit and loss.

2.2 Intangible Assets (including intangible assets under development)

Intangible assets acquired separately are measured on initial recognition at cost.

Following initial recognition, intangible assets are carried at cost less any accumulated
amortization and accumulated impairment losses.

Research costs are expensed as incurred. Software development costs are expensed as
incurred unless technical and commercial feasibility of the project is demonstrated, future
economic benefits are probable, the Company has an intention and ability to complete
and use or sell the software and the costs can be measured reliably. The costs, which
can be capitalized include the cost of material, manpower cost, overhead costs that are
directly attributable to prepare the asset for its intended use.

Intangible assets comprising of computer software purchased from outside are
capitalised and amortised as per their estimated useful life of 3 years. Computer
softwares developed in-house and amortised over 3 years

Intangible assets with finite life are evaluated for recoverability whenever there is any
indication that their carrying amounts may not be recoverable. If any such indication
exists, the recoverable amount (i.e. higher of the fair value less cost to sell and the value-
in-use) is determined on an individual asset basis unless the asset does not generate
cash flows that are largely independent of those from other assets. In such cases, the
recoverable amount is determined for the cash generating unit (CGU) to which the asset
belongs.

If the recoverable amount of an asset (or CGU) is estimated to be less than its carrying
amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount.
An impairment loss is recognised in the statement of profit and loss.

2.3 Depreciation and Amortisation

Depreciation is charged on Property, plant and equipment on a straight-line basis so
as to expense the ''carrying cost less residual value'' over their estimated useful lives
as prescribed in Schedule II of the Companies Act, 2013 except in respect of certain
categories of assets, where the useful life of the assets has been assessed based on a
technical evaluation. The estimated useful lives and residual values are reviewed at the
end of each reporting financial year, with the effect of any change in estimate accounted
for on a prospective basis.

However, assets which are built/constructed on leased space is depreciated over the
period of lease or their useful lives whichever is shorter. Depreciation on addition to
property, plant and equipment is provided on pro-rata basis from the date the asset is
available for use.

Leasehold land is amortised over the period of lease.

Depreciation is not recorded on capital work-in-progress until construction and installation
are complete and the asset is ready for its intended use.

All assets costing R 5,000 or below are depreciated fully in the year of purchase.

The estimated useful life of an identifiable intangible asset is based on a number of
factors, including the effects of obsolescence, demand, competition, and other economic
factors (such as the stability of the industry, and known technological advances), and the
level of maintenance expenditures required to obtain the expected future cash flows from
the asset.

Intangible assets are amortized over their respective individual estimated useful lives on
a straight-line basis, from the date that they are available for use. However, if the useful
life estimated is not more than one year, the entire amount is amortised in the year in
which the software is purchased.

Amortization methods and useful lives are reviewed periodically including at each
financial year end.

2.4 Investment Property

Investment properties are properties held to earn rental income and/or for capital
appreciation. Investment property is initially recognized at cost, including transaction
costs. Subsequent to initial recognition, investment property is measured using the cost
model and is depreciated over its estimated useful life. Fair value of the investment
property is disclosed in the notes to the financial statements, as required by Ind AS 40.

2.5 Leases
Company as a Lessee

The Company''s lease assets classes primarily consist of lease for land & office space.

The Company assess whether a contract contains lease, at inception of the contract. A
contract is, or contains a lease, if the contract conveys the right to use of an identified
asset for a period of time in exchange of the consideration. To assess whether the
contract conveys right to control the identified asset, the Company assess whether:

The contract involves the use of an identified asset.

The Company has substantially all the economic benefits from the use of assets
through the period of the lease.

The Company has right to direct the use of asset.

Lease and non-lease components:

The Company has elected the practical expedient provided under Ind AS 116
to not separate lease and non-lease components for all classes of underlying assets.
Accordingly, the entire consideration is accounted for as a single lease component.

Right of Use Assets:

The Company recognises right-of-use asset representing its right to use the underlying
asset for the lease term at the lease commencement date. The cost of the right-of-use
asset measured at inception shall comprise of the amount of the initial measurement of
the lease liability adjusted for any lease payments made at or before the commencement
date less any lease incentives received, plus any initial direct costs incurred and an
estimate of costs to be incurred by the lessee in dismantling and removing the underlying
asset or restoring the underlying asset or site on which it is located.

The right-of-use asset is subsequently measured at cost less any accumulated
depreciation, accumulated impairment losses, if any and adjusted for any remeasurement
of the lease liability.

The right-of-use asset is depreciated using the straight-line method from the
commencement date over the shorter of lease term or useful life of right-of-use asset.
The estimated useful lives of right-of-use assets are determined on the same basis as
those of property, plant and equipment. Right-of-use assets are tested for impairment
whenever there is any indication that their carrying amounts may not be recoverable.
Impairment loss, if any, is recognised in the statement of profit and loss.

Lease Liability:

The Company measures the lease liability at the present value of the lease payments that
are not paid at the commencement date of the lease. The lease payments are discounted
using the interest rate implicit in the lease, if that rate can be readily determined. If
that rate cannot be readily determined, the Company uses incremental borrowing rate.
For leases with reasonably similar characteristics, the Company, on a lease-by-lease
basis, may adopt either the incremental borrowing rate specific to the lease or the
incremental borrowing rate for the portfolio as a whole. The lease payments shall include
fixed payments, variable lease payments, residual value guarantees, exercise price of a
purchase option where the Company is reasonably certain to exercise that option and
payments of penalties for terminating the lease, if the lease term reflects the lessee
exercising an option to terminate the lease.

The lease liability is subsequently remeasured by increasing the carrying amount to

reflect interest on the lease liability, reducing the carrying amount to reflect the lease
payments made and remeasuring the carrying amount to reflect any reassessment or
lease modifications or to reflect revised in-substance fixed lease payments. The Company
recognises the amount of the re-measurement of lease liability due to modification as an
adjustment to the right-of-use asset and statement of profit and loss depending upon the
nature of modification. Where the carrying amount of the right-of-use asset is reduced
to zero and there is a further reduction in the measurement of the lease liability, the
Company recognises any remaining amount of the re-measurement in statement of profit
and loss.

Short term leases and leases of low value assets :

The Company has elected not to apply the requirements of ''Ind AS 116 - Leases'' to short¬
term leases of all assets that have a lease term of 12 months or less and leases for which
the underlying asset is of low value. The lease payments associated with these leases are
recognised as an expense on a straight-line basis over the lease term.

Company as a Lessor

At the inception of the lease the Company classifies each of its leases as either an
operating lease or a finance lease. The Company recognises lease payments received
under operating leases as income on a straight-line basis over the lease term. In case
of a finance lease, finance income is recognised over the lease term based on a pattern
reflecting a constant periodic rate of return on the lessor''s net investment in the lease.
When the Company is an intermediate lessor it accounts for its interests in the head
lease and the sub-lease separately. It assesses the lease classification of a sub-lease with
reference to the right-of-use asset arising from the head lease, not with reference to the
underlying asset. If a head lease is a short-term lease to which the Company applies the
exemption described above, then it classifies the sub-lease as an operating lease.

If an arrangement contains lease and non-lease components, the Company applies Ind
AS 115 - Revenue from contracts with customers to allocate the consideration in the
contract.

2.6 Financial Instruments:

Financial assets and liabilities are recognised when the Company becomes a party to the
contractual provisions of the instrument. They are initially measured at fair value, except
for trade receivables, which are initially measured at the transaction price. Transaction
costs that are directly attributable to the acquisition or issue of financial assets and
liabilities (other than those at fair value through profit or loss) are added to or deducted
from the fair value at initial recognition.

The Company derecognises a financial asset only when the contractual rights to the cash
flows from the asset expire, or when it transfers the financial asset and substantially all
the risks and rewards of ownership to another entity. Financial liabilities are derecognised
when, and only when, the Company''s obligations are discharged, cancelled, or have
expired.

Cash and Cash Equivalents:

The Company considers all highly liquid investments that are readily convertible into
known amounts of cash and subject to an insignificant risk of changes in value to be
cash equivalents. Cash and cash equivalents consist of balances with banks that are
unrestricted in terms of withdrawal and usage. Cash and Cash equivalents in the balance
sheet comprise cash at bank and on hand and short-term deposits with an original
maturity of three months or less, which are subject to an insignificant risk of changes in
value.

Financial Assets at Amortised Cost

Financial assets are subsequently measured at amortised cost if they are held within
a business model whose objective is to hold assets in order to collect contractual cash
flows, and the contractual terms give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding.

Financial Assets at Fair Value through Other Comprehensive Income (FVTOCI)

Financial assets are measured at fair value through other comprehensive income if
they are held within a business model whose objective is achieved by both collecting
contractual cash flows (that are solely payments of principal and interest) and
selling financial assets. The Company has made an irrevocable election to present
subsequent changes in the fair value of equity investments not held for trading in other
comprehensive income.

Financial Assets at Fair Value through Statement of Profit & Loss (FVTPL)

Financial assets are measured at fair value through statement of profit & loss unless they
are measured at amortised cost or at fair value through other comprehensive income
upon initial recognition. Transaction costs directly attributable to the acquisition of
financial assets and liabilities at FVTPL are recognised immediately in the statement of
profit & loss.

Investment in Subsidiaries

Investments in subsidiaries are measured at cost, less impairment loss, if any.

Financial Liabilities

Financial liabilities are measured at amortised cost using the effective interest method.
While calculating the effective interest rate of loan liability, the company takes into
account the processing fees and other initial expenses incurred for obtaining the loan
if the amount so paid is in excess of R 0.50 lakh. Otherwise the same is charged to
Statement of Profit & Loss.

Equity Instruments

An equity instrument is a contract that evidences a residual interest in the assets of the
Company after deducting all liabilities. Equity instruments issued by the Company are
recognised at the proceeds received, net of direct issue costs.

Derecognition of Financial AssetsA financial asset or, where applicable, a part of a
financial asset or part of a Company of similar financial assets is primarily derecognized
when:a) The right to receive cash flows from the assets have expired, orb) The
Company has transferred its rights to receive cash flows from the asset or has assumed
an obligation to pay the received cash flows in full without material delay to a third
party under a ''pass-through'' arrangement and either (i) the Company has transferred
substantially all the risks and rewards of the asset, or (ii) the Company has neither
transferred nor retained substantially all the risks and rewards of the asset, but has
transferred control of the asset.

When the Company has transferred its rights to receive cash flows from an asset or
has entered into a pass-through arrangement, it evaluates if and to what extent it has
retained the risks and rewards of ownership. When it has neither transferred nor retained
substantially all of the risks and rewards of the asset, nor transferred control of the asset,
the Company continues to recognize the transferred asset to the extent of the Company''s
continuing involvement. In that case, the Company also recognizes an associated liability.
The transferred asset and the associated liability are measured on a basis that reflects
the rights and obligations that the Company has retained. Continuing involvement that
takes the form of a guarantee over the transferred asset is measured at the lower of the
original carrying amount of the asset and the maximum amount of consideration that the
Company could be required to repay.

Derecognition of Financial Liability:

A financial liability is derecognized when the obligation under the liability is discharged
or cancelled or expires. When an existing financial liability is replaced by another from
the same lender on substantially different terms, or the terms of an existing liability are
substantially modified, such an exchange or modification is treated as the derecognition
of the original liability and the recognition of a new liability. The difference between the
carrying amount of a financial liability (or part of a financial liability) extinguished or
transferred to another party and the consideration paid, including any non-cash assets
transferred or liabilities assumed, shall be recognized in Statement of Profit & Loss.

Reclassification of Financial Assets:

The Company determines classification of financial assets and liabilities on initial
recognition. After initial recognition, no reclassification is made for financial assets
which are equity instruments and financial liabilities. For financial assets which are debt
instruments, a reclassification is made only if there is a change in the business model for
managing those assets. Changes to the business model are expected to be infrequent.

The Company''s senior management determines change in the business model as a
result of external or internal changes which are significant to the Company''s operations.
Such changes are evident to external parties. A change in the business model occurs
when the Company either begins or ceases to perform an activity that is significant to
its operations. If the Company reclassifies financial assets, it applies the reclassification
prospectively from the reclassification date which is the first day of the immediately next

Impairment of Financial AssetsThe Company assesses, at each balance sheet date,
whether a financial asset or a group of financial assets is impaired. As per Ind AS 109,
expected credit losses are measured through a loss allowance. The Company recognises
lifetime expected credit losses for all contract assets and for all trade receivables that do
not constitute a financing transaction.

In determining the allowance for expected credit losses, the Company applies a practical
expedient by computing the expected credit loss allowance for trade receivables using
a provision matrix. This provision matrix considers the Company''s historical credit loss
experience and is adjusted to incorporate forward-looking information. The expected
credit loss allowance is based on the ageing of receivables and the allowance rates
applied through the provision matrix.

For all other financial assets, expected credit losses are measured at an amount equal to
either the 12-month expected credit losses or the lifetime expected credit losses, if the
credit risk on the financial asset has increased significantly since initial recognition.

2.7 Foreign Currency

The Company''s reporting currency and the functional currency for its operations is Indian
Rupees (3) being the principal currency of the economic environment in which it operates.

Transaction and Balances

A foreign currency transaction shall be recorded, on initial recognition in the functional
currency, by applying to the foreign currency amount the spot exchange rate, of the
date on which the transaction first qualifies for recognition as per Ind AS, between the
functional currency and the foreign currency at the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies outstanding at the
end of the reporting year are translated at the exchange rates prevailing as at the end
of reporting year. Non-monetary items that are measured in terms of historical cost
in a foreign currency are translated using the exchange rates at the dates of the initial
transactions. Non-monetary items measured at fair value in a foreign currency are
translated using the exchange rates at the date when the fair value is determined.

Exchange differences arising on the settlement of monetary assets and liabilities or on
translating monetary assets and liabilities at rates different from those at which they
were translated on initial recognition during the year or in previous financial statements
shall be recognized in statement of profit and loss in the year in which they arise. When
a gain or loss on a non-monetary item is recognized in other comprehensive income, any
exchange component of that gain or loss shall be recognized in other comprehensive
income. Conversely, when a gain or loss on a non-monetary item is recognized in
statement of profit & loss, any exchange component of that gain or loss shall be
recognized in Statement of Profit & Loss.

2.8 Fair Value Measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability
in an orderly transaction between market participants at the measurement date. The
Company uses valuation techniques that are appropriate in the circumstances and for
which sufficient data are available to measure fair value, maximizing the use of relevant
observable inputs and minimizing the use of unobservable inputs.

Fair value is the price that would be received to sell an asset or paid to transfer a liability

in an orderly transaction between market participants at the measurement date:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices included in level 1 that are observed for the
assets or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3: Inputs for the asset or liability that are not based on observable market data
(unobservable inputs).

The Company recognizes transfers between level of the fair value hierarchy at the end of
the financial year in which the change has occurred. The management has an established
control framework with respect to fair value measurement.

For the purpose of fair value disclosures, the Company has determined classes of assets
and liabilities on the basis of the nature, characteristics and risks of the asset or liability
and the level of the fair value hierarchy as explained above.

2.9 Revenue Recognition

The Company earns revenue primarily from providing IT services, consulting and business
solutions. The Company offers a consulting-led, cognitive powered, integrated portfolio
of IT, business and engineering services and solutions.

Revenue is recognised upon transfer of control of promised products or services to
customers in an amount that reflects the consideration which the Company expects to
receive in exchange for those products or services.

Revenue from Time & material and Job contracts are recognised on output basis
measured by units delivered, efforts expended, number of transactions processed, etc.

♦ Revenue related to fixed price maintenance and support services contracts where the
Company is standing ready to provide services is recognised based on time elapsed
mode and revenue is straight-lined over the period of performance.

♦ In respect of other fixed-price contracts, revenue is recognised using percentage-
of-completion method (''POC method'') of accounting with contract costs incurred
determining the degree of completion of the performance obligation. The contract
costs used in computing the revenues include cost of fulfilling warranty obligations.

♦ Revenue from the sale of distinct internally developed software and manufactured
systems and third party software is recognised upfront at the point in time when the
system / software is delivered to the customer. In cases where implementation and /
or customisation services rendered significantly modifies or customises the software,
these services and software are accounted for as a single performance obligation and
revenue is recognised over time on a POC method.

♦ Revenue from the sale of distinct third party hardware is recognised at the point in
time when control is transferred to the customer.

♦ The solutions offered by the Company may include supply of third-party equipment or

software. In such cases, revenue for supply of such third party products are recorded
at gross or net basis depending on whether the Company is acting as the principal or
as an agent of the customer. The Company recognises revenue in the gross amount of
consideration when it is acting as a principal and at net amount of consideration when
it is acting as an agent.

Revenue is measured based on the transaction price, which is the consideration, adjusted
for volume discounts, service level credits, performance bonuses, price concessions and
incentives, if any, as specified in the contract with the customer. Revenue also excludes
taxes collected from customers.

Contract fulfilment costs are generally expensed as incurred except for certain conditions
which meet the criteria for capitalisation. Such costs are amortised over the contractual
period or useful life of licence, whichever is less. The assessment of this criteria requires
the application of judgement, in particular when considering if costs generate or enhance
resources to be used to satisfy future performance obligations and whether costs are
expected to be recovered.

Contract Asset is recognized when the Company has transferred goods or completed
services to the customer but does not yet have an unconditional right to consideration.

In such case revenue is recognised in line with the contract price in proportion to work
executed by the company (net of discounts, rebates, returns, and taxes collected on
behalf of statutory authorities).

The billing schedules agreed with customers include periodic performance based
payments and / or milestone based progress payments. Invoices are payable within
contractually agreed credit period.

Contracts with customers includes subcontractor services or third-party vendor
equipment or software in certain integrated services arrangements. In these types of
arrangements, revenue from sales of third-party vendor products or services is recorded
net of costs when the Group is acting as an agent between the customer and the vendor,
and gross when the Group is the principal for the transaction. In doing so, the Group first
evaluates whether it controls the good or service before it is transferred to the customer.
The company considers whether it has the primary obligation to fulfil the contract,
inventory risk, pricing discretion and other factors to determine whether it controls the
goods or service and therefore, is acting as a principal or an agent.

A contract modification is a change in the scope or price, or both, of a contract that
is approved by the parties to the contract. A contract modification that results in the
addition of distinct performance obligations are accounted for either as a separate
contract if the additional services are priced at the standalone selling price or as a
termination of the existing contract and creation of a new contract if they are not
priced at the standalone selling price. If the modification does not result in a distinct
performance obligation, it is accounted for as part of the existing contract on a
cumulative catch-up basis.

The Company disaggregates revenue from contracts with customers by nature of
services and geography.

Government Grant

The Company recognizes government grants only when there is reasonable assurance
that the conditions attached to them are complied with, and the grants will be received.
Government grants related to revenue are presented as an offset against the related
expenditure in the Statement of Profit and Loss.

Interest income

Interest income is recognised using the effective interest method.

Dividend income

Dividend income is recognised when the right to receive payment is established.

Rent income

Rent income is recognised on accrual basis in accordance with the terms of the relevant
agreement.

Insurance Recoveries / Claims

Insurance claims with insurance company are recognised as income in the year in which
the right to receive the claim amount from insurance company is established.

2.10 Employee Benefits Expenses
Defined Contribution Plan:

The Company operates a defined benefit gratuity plan which requires contributions to be
made to a separately administered fund. The cost of providing benefits under the defined
benefit plan is determined using the projected unit credit method. Liability for gratuity
funded are determined by an independent actuarial valuation made at the end of each
financial year.

Re-measurements, comprising of actuarial gains and losses, the effect of the asset
ceiling, excluding amounts included in net interest on the net defined benefit liability and
the return on plan assets (excluding amounts included in net interest on the net defined
benefit liability), are recognized immediately in the balance sheet with a corresponding
debit or credit to retained earnings through other comprehensive income in the year in
which they occur. Re-measurements are not reclassified to profit or loss in subsequent
year.

Past service costs are recognized in statement of profit & loss on the earlier of:

The date of the plan amendment or curtailment

The date that the Company recognizes related restructuring costs

Net interest is calculated by applying the discount rate to the net defined benefit liability
or asset. The Company recognizes the following changes in the net defined benefit
obligation as an expense in the special purpose interim standalone statement of profit
and loss:

Service costs comprising current service costs, past-service costs, gains and losses
on curtailments and non-routine settlements; and

Net interest expense or income

Contributions to defined contribution plans are recognised as expense when employees
have rendered services entitling them to such benefits. Company''s contributions paid/
payable during the year to Provident Fund and Employee state insurance are recognized
in statement of profit and loss.

Short-term employee benefits:

All employee benefits payable wholly within twelve months of rendering the service
are classified as short-term employee benefits. Employee benefits including salary is
recognised in the year in which the employee renders the related service. A liability
is recognised for the amount expected to be paid when there is a present legal or
constructive obligation to pay this amount as a result of past service provided by the
employee and the obligation can be estimated reliably.

Gratuity:

Company provides for gratuity, a defined benefit retirement plan covering eligible
employees. In accordance with the Payment of Gratuity Act, 1972, the Gratuity Plan
provides a lump sum payment to eligible employees at retirement, death, incapacitation
or termination of employment, of an amount based on the respective employee''s salary
and the tenure of employment. The Gratuity Scheme is funded. Liability at each financial
year is determined and charged to the Statement of Profit & Loss on the basis of actuarial
valuation.

Provident fund:

All eligible employees of the Company are entitled to receive benefits from a provident
fund which is a defined benefit plan. The periodical contibutions are deposited in
Government administered provident fund by expensing to the statement of profit and loss
as and when the liability arises.

Compensated Absence :

As compensated absence, all employees are entitled to Earned Leave (EL). However, to
avail the EL the employee concerned should have put in at least 240 days of continuous
working.

At the end of each financial year, if the unutilized Earned leave balance of an employee is
15 or less, then the entire unutilised leave is carried over to the next year. If the unutilized
Earned Leave balnce is more than 15, then 15 Earned Leaves are carried over to the next

year and the remaining is encashed and paid to the employee based on the employee''s
basic pay.

2.11 Income Taxes

Income tax expense comprises current and deferred income tax. Income tax expense
is recognized in the Statement of Profit and Loss except to the extent that it relates
to items recognized directly in equity, in which case it is recognized in equity or other
comprehensive income.

Current income tax for current and prior periods is recognized at the amount expected
to be paid to or recovered from the tax authorities, using the tax rates and tax laws that
have been enacted or substantively enacted by the Balance Sheet date.

Deferred income tax assets and liabilities are recognized for all temporary differences
arising between the tax bases of assets and liabilities and their carrying amounts in the
financial statements. Deferred tax assets are reviewed at each reporting date and are
reduced to the extent that it is no longer probable that the related tax benefit will be
realized.

Deferred income tax assets and liabilities are measured using tax rates and tax laws
that have been enacted or substantively enacted by the Balance Sheet date and are
expected to apply to taxable income in the years in which those temporary differences
are expected to be recovered or settled. The effect of changes in tax rates on deferred
income tax assets and liabilities is recognized as income or expense in the period that
includes the enactment or the substantive enactment date. A deferred income tax asset
is recognized to the extent that it is probable that future taxable profit will be available
against which the deductible temporary differences and tax losses can be utilized.
Deferred income taxes are not provided on the undistributed earnings of subsidiaries
where it is expected that the earnings of the subsidiary will not be distributed in the
foreseeable future.

The Company offsets current tax assets and current tax liabilities, where it has a legally
enforceable right to set off the recognized amounts and where it intends either to settle
on a net basis, or to realize the asset and settle the liability simultaneously.