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Notes to the Consolidated Financial Statements31 December 2024ESR Group Limited Annual Report 2024155STRATEGIC REPORTSCORPORATE GOVERNANCEFINANCIAL STATEMENTS2.4MATERIAL ACCOUNTING POLICIES (continued)Cash and cash equivalentsCash and cash equivalents in the statement of financial position comprise cash on hand and at banks, and shortterm highly liquid deposits with a maturity of generally within three months that are readily convertible into known amounts of cash, subject to an insignificant risk of changes in value and held for the purpose of meeting short-term cash commitments.For the purpose of the statements of cash flows, cash on hand and at banks, restricted cash, and short-term deposits as defined above, less bank overdrafts which are repayable on demand and form an integral part of the Group%u2019s cash management.ProvisionsA provision is recognised when a present obligation (legal or constructive) has arisen as a result of a past event and it is probable that a future outflow of resources will be required to settle the obligation, provided that a reliable estimate can be made of the amount of the obligation.When the effect of discounting is material, the amount recognised for a provision is the present value at 31 December 2024 expenditures expected to be required to settle the obligation. The increase in the discounted present value amount arising from the passage of time is included in finance costs in profit or loss.Income taxIncome tax comprises current and deferred tax. Income tax relating to items recognised outside profit or loss is recognised outside profit or loss, either in other comprehensive income or directly in equity.Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities, based on tax rates (and tax laws) that have been enacted or substantively enacted by 31 December 2024, taking into consideration interpretations and practices prevailing in the countries in which the Group operates.Deferred tax is provided, using the liability method, on all temporary differences at 31 December 2024 between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes, except that deferred tax is not recognised for the Pillar Two income taxes.Deferred tax liabilities are recognised for all taxable temporary differences, except:%u2022%u0009 whenthedeferredtaxliabilityarisesfromtheinitialrecognitionofgoodwilloranassetorliabilityinatransaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss and does not give rise to equal taxable and deductible temporary differences; and%u2022%u0009 inrespectoftaxabletemporarydifferencesassociatedwithinvestmentsinsubsidiaries,associatesandjointventures, when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.