ANNUAL REPORT 2025 FINANCIAL STATEMENTS Notes to the Financial Statements (Cont’d) For the Financial Year Ended 31 March 2025 158 12. DEVELOPMENT EXPENDITURE (CONT’D) The development expenditure consist of:- (a) direct and related costs for overhead and software solutions incurred in the process of development, and attributable to the Group’s customised smart card solutions (“CSCS”) reportable segment. Their amortisation charges are recognised in profit or loss under Cost of Sales line item; and (b) software and staff salaries of research and development incurred in the process of software development of IHSB Group. (c) proprietary technology and software of IHSB. IHSB’s identity verification of its proprietary technology and software represents a unique solution that is not easily replicable in the market. It has distinctiveness and legal protection, such as patents and certificates make it an asset with clear boundary for the valuation. As this technology and software is crucial in the development of the IHSB’s products and services, this intangible asset contributes to the revenue generation and competitive advantage of IHSB. Thus, the Group acquired the readily available digital ID assurance and digital onboarding businesses of IHSB to complement and enhance the Group’s existing business as an ICT solutions provider. 13. DEFERRED TAX ASSETS/(DEFERRED TAX LIABILITIES) Group 2025 2024 RM’000 RM’000 Deferred Tax Assets At 1 April 2024/2023 - - Acquisition of a subsidiary (Note 44) 483 - At 31 March 2025/2024 483 - The deferred tax assets recognised in the financial statements consist of the tax effects of temporary differences arising from the following item:- Group 2025 2024 RM’000 RM’000 Unutilised tax losses 189 - Lease liabilities 20 - Deferred income 274 - At 31 March 2025/2024 483 - Group 2025 2024 RM’000 RM’000 Deferred Tax Liabilities At 1 April 2024/2023 4,692 5,183 Acquisition of a subsidiary (Note 44) 11,363 - Recognised in profit or loss (Note 42) (1,438) (491) At 31 March 2025/2024 14,617 4,692
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