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2.
Significant accounting policies (continued)
2.10 Income Taxes
Current income tax liabilities and assets for the current and prior periods are measured 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 tax is provided using the liability method on temporary differences at the end of the reporting period between the
tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred tax liabilities are recognised for all temporary differences, except:
– Where the deferred tax liability arises from the initial recognition of an asset or liability in a transaction that is not a
business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and
unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary
differences, and the carry forward of unused tax credits and unused tax losses can be utilised except:
– Where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an
asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither
the accounting profit nor taxable profit or loss.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it
is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised.
Unrecognised deferred tax assets are reassessed at the end of each reporting period and are recognised to the extent that
it has become probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is
realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the
end of each reporting period.
Current and deferred taxes are recognised as income or expense in profit or loss, except to the extent that the tax arises
from a business combination or a transaction which is recognised directly in equity. Deferred tax on temporary differences
arising from fair value gains and losses on available-for-sale financial assets are charged or credited directly to equity in the
same period the temporary differences arise.
Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current income tax assets
against current income tax liabilities and the deferred taxes relate to the same taxable entity and the same tax authority.
2.11 Provisions for Other Liabilities and Charges
Provisions for other liabilities and charges are recognised when the Company has a present obligation (legal or constructive)
as a result of past events, it is probable that an outflow of resources embodying economic benefits will be required to settle
the obligation and the amount can be reliably estimated.
Provisions are reviewed at the balance sheet date and adjusted to reflect the current best estimate. If it is no longer probable
that an outflow of economic resources will be required to settle the obligation, the provision is reversed. If the effect of the
time value of money is material, provisions are discounted using a current pre tax rate that reflects, where appropriate, the
risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised
as a finance cost.
