AGS Transact Technologies Limited

Annexure V - Basis of preparation and Significant Accounting Policies

Notes to the Revised Restated Consolidated Financial Information

The Group has used number of practical expedients when applying Ind AS 116: - Short-term leases, leases of low-
value assets and single discount rate

The Group has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have a lease
term of 12 months or less and leases of low-value assets. The Group recognises the lease payments associated with
these leases as an expense on a straight-line basis over the lease term. The Group applied a single discount rate to a
portfolio of leases of similar assets in similar economic environment with a similar end date. The Group has used
hindsight when determining the lease term and did not recognise right of use asset for leases to which the lease term
end within 12 months of date of initial application.

Lease liability and ROU assets have been separately presented in The Revised Restated Consolidated Statement of
Assets and Liabilities and lease payments have been classified as financing cash flows.

Leases where the Group is lessor:

Leases in which the Group transfers substantially all the risks and benefits of ownership of the asset are classified as
finance leases. Assets given under finance lease are recognised as a receivable at an amount equal to the net
investment in the lease. After initial recognition, the Group apportions lease rentals between the principal repayment
and interest income so as to achieve a constant periodic rate of return on the net investment outstanding in respect of
the finance lease. The interest income is recognised in the Revised Restated Consolidated Statement of Profit and
Loss. Initial direct costs such as legal costs, brokerage costs, etc. are recognised immediately in the Revised Restated
Consolidated Statement of Profit and Loss.

Income tax

Income tax comprises current and deferred tax. It is recognised in Revised Restated Consolidated Statement of Profit
and Loss except to the extent that it relates to an item recognised directly in equity or in other comprehensive
income.

(i) Current tax

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any
adjustment to the tax payable or receivable in respect of previous years. It is measured using tax rates enacted or
substantively enacted at the reporting date. Current tax assets and current tax liabilities are offset only if there is a
legally enforceable right to set off the recognised amounts, and it is intended to realise the asset and settle the
liability on a net basis or simultaneously.

(ii) Deferred tax

Deferred tax is recognised in respect of temporary differences arising between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax assets are
recognised for unused tax losses, unused tax credits and deductible temporary differences to the extent that it is
probable that future taxable profits will be available against which they can be utilised.

Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that
the related tax benefit will be realised; such reductions are reversed when the probability of future taxable profits
improves. Unrecognised deferred tax assets are reassessed at each reporting date and recognised to the extent that it
has become probable that future taxable profits will be available against which they can be utilised.

Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse,
using tax rates enacted or substantively enacted at the reporting date. The measurement of deferred tax reflects the

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