Z.

AGS Transact Technologies Limited

Annexure V - Basis of preparation and Significant Accounting Policies

Notes to the Revised Restated Consolidated Financial Information

tax consequences that would follow from the manner in which the Group expects, at the reporting date, to recover or
settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and
assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax
entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will
be realised simultaneously.

Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the
form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the
Group will pay normal income tax. Accordingly, MAT is recognised as an asset in the Balance Sheet as a deferred
tax asset when it is highly probable that future economic benefit associated with it will flow to the Group.

Borrowing costs

Borrowing costs are interest and other costs (including exchange differences relating to foreign currency borrowings
to the extent that they are regarded as an adjustment to interest costs) incurred in connection with the borrowing of
funds. Borrowing costs directly attributable to acquisition or construction of an asset which necessarily takes a
substantial period of time to get ready for its intended use are capitalised as part of the cost of that asset. Other
borrowing costs are recognised as an expense in the period in which they are incurred.

AA. Finance cost

Finance costs includes interest and other borrowing costs incurred in connection with the borrowing of funds.
Interest cost on financial liabilities are measured at amortized cost such as borrowings from banks and others or
bonds or similar instruments etc. calculated as per the effective interest method. Interest and other dues on statutory
liabilities that are compensatory in nature are measured at the interest rates as applicable under the statute. Other
borrowing cost includes processing fees, commission or charges paid for letter of credit and bank guarantees,
exchange differences relating to foreign currency borrowings to the extent that they are regarded as an adjustment to
interest costs etc.

AB. Operating segments

(i) Basis for segmentation

An operating segment is a component of the entity that engages in business activities from which it may earn and
incur expenses, including revenues and expenses that relate to transactions with any of the Group's other
components and for which discrete financial information is available. Such decision is taken by chief operating
decision maker (CODM). Operating segments are reported in a manner consistent with the internal reporting
provided to the CODM.

(ii) Business segment

The Group’s operating businesses are organised and managed separately according to the nature of products and
services provided, with each segment representing a strategic business unit that offers different products or services
and serves different markets. Accordingly, the Group has identified ‘Payment Solutions’, ‘Banking Automation
Solutions’ and ‘Other Automation Solutions’ segments as the primary reportable segments.

(iii) Geographical segment

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