statement of Profit and loss on accrual basis. The Company recognises contribution payable to the provident fund
scheme as an expenditure, when an employee renders the service entitling them to the contributions.

The Company has no obligation, other than the contribution payable to the provident fund.
Retirement benefit costs and termination benefits

Liabilities for gratuity funded in terms of a scheme administered by the LIC are determined using the projected
unit credit method, with actuarial valuations being carried out at each balance sheet date. Remeasurement,
comprising actuarial gains and losses and the return on plan assets (excluding net interest), is reflected
immediately in the balance sheet with a charge or credit recognised in other comprehensive income in the period
in which they occur. Remeasurement recognized in other comprehensive income is reflected immediately in
retained earnings and is not reclassified to the statement of profit and loss. Past service cost is recognized in the
statement of profit and loss in the period of a plan amendment. Net interest is calculated by applying the discount
rate at the beginning of the period to the net defined benefit liability or asset. Defined benefit costs are categorized
as follows:

- Service cost (including current service cost, past service cost, as well as gains and losses on curtailments and
settlements);

- Net interest expense or income; and

- Remeasurement

The Company presents the first two components of defined benefit costs in the statement of profit and loss in the
line item ‘Employee benefits expense’. Curtailment gains and losses are accounted for as past service costs.

The retirement benefit obligation recognised in the balance sheet represents the actual deficit or surplus in the
Company’s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any
economic benefits available in the form of refunds from the plans or reductions in future contributions to the plans.

A liability for a termination benefit is recognised at the earlier of when the entity can no longer withdraw the offer
of the termination benefit and when the entity recognizes any related restructuring costs.

Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax. Current and deferred tax are
recognized in the statement of profit and loss, except when they relate to items that are recognised in other
comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in
other comprehensive income or directly in equity respectively.

Current tax

The tax currently payable is based on estimated taxable profit for the year. Estimated taxable profit differs from
‘profit before tax’ as reported in the statement of profit and loss because of items of income or expense that are
taxable or deductible in other years and items that are never taxable or deductible. The Company’s current tax is

calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax

 

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the
financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax
liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally
recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be
available against which those deductible temporary differences can be utilized. Such deferred tax assets and
liabilities are not recognised if the temporary difference arises from the initial recognition of assets and liabilities
in a transaction that affects neither the taxable profit nor the accounting profit.

 

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 profits will be available to allow all or part of the asset
to be recovered.

334
