| CIM FINANCE. INTEGRATED REPORT 2022 120 EXPLANATORY NOTES 30 SEPTEMBER 2022 2. A CCOUNTING POLICIES (CONT’D) 2.7 Significant accounting policies (Cont’d) (k) Current and deferred income tax (Cont’d) (iii) Corporate Social Responsible (CSR) Tax Entities in the Group and the Company are required to set up a Corporate Social Responsibility (CSR) Fund of 2%of its taxable profit of the preceding year. If the amount spent on CSR activities is less than the amount provided under the Fund, the difference is payable to the tax authorities as a tax (“CSR tax”). The CSR tax is included in income tax expense and the net amount of CSR fund payable is included in other liabilities in the statement of financial position. (iv) Value Added Tax Revenue, expenses and assets are recognized net of the amount of value added tax except: • Where the value added tax incurred on a purchase of asset or service is not recoverable from the taxation authority, in which case, the value added tax is recognized as part of the cost of acquisition of the asset of as part of the expense item as applicable. • Receivables and payables that are stated with the amount of value added tax included. • The net amount of value added taxes recoverable from or payable to the taxation authority is included as part of receivables or payables in the statement of financial position (l) Impairment of non-financial assets The carrying amounts of assets are assessed at each reporting date to determinewhether there is any indication of impairment. Whenever events or changes in circumstances indicate that the carrying amount may not be recoverable, the asset is subject to impairment. The recoverable amount of the asset is estimated, being the higher of the asset’s net selling price and its value in use, to determine the extent of the impairment loss, if any, and the carrying amount of the asset is reduced to its recoverable amount. The impairment loss is recognised in profit or loss for the amount bywhich the asset’s carrying amount exceeds its recoverable amount. Non-financial assets that suffered an impairment are reviewed for possible reversal of the impairment at the end of each reporting period. (m) Post employment benefits (i) State plan and defined contribution pension plans A defined contribution plan is a pension plan under which the Group and the Company pay fixed contributions into a separate entity. The Group and the Company have no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods. Contributions to the National Pension Scheme and the Group’s and the Company’s defined contribution pension plan are expensed to profit or loss in the period in which they fall due.
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