AGS Transact Technologies Limited

Annexure V - Basis of preparation and Significant Accounting Policies

Notes to the Revised Restated Consolidated Financial Information

Derivatives are initially measured at fair value. Subsequent to initial recognition, derivatives are measured at fair
value, and changes therein are generally recognised in Revised Restated Consolidated Statement of Profit and Loss.
The gain or loss on such derivative is presented in the Revised Restated Consolidated Statement of Profit and Loss
in the same line item as the corresponding foreign exchange loss or gain arising from the hedged transaction.

Share capital
Ordinary equity shares

Incremental costs directly attributable to the issue of ordinary equity shares, are recognised as a deduction from
equity.

Treasury shares

The Company has created an AGSTTL Employees Welfare Trust (“Trust”) for providing share-based payment to its
employees. The Trust is used as a vehicle for distributing shares to employees under the employee remuneration
schemes. The Trust buys shares of the Company for giving shares to employees. The Company treats Trust as its
extension and shares held by Trust are treated as treasury shares. Treasury shares are recognised at cost and
deducted from equity. No gain or loss is recognised in Revised Restated Consolidated Statement of Profit and Loss
on the purchase, sale, issue or cancellation of the Company’s own equity instruments. Any difference between the
carrying amount and the consideration, if reissued, is recognised in Capital reserve. Share options exercised during
the reporting period are deducted from treasury shares.

Property, plant and equipment
(i) Recognition and measurement

Items of property, plant and equipment are measured at cost, less accumulated depreciation and accumulated
impairment losses, if any.

Cost of an item of property, plant and equipment comprises its purchase price, including import duties and non-
refundable purchase taxes, any directly attributable cost of bringing the item to its working condition for its intended
use and estimated costs of dismantling and removing the item and restoring the site on which it is located, after
deducting trade discounts and rebates if any.

Pre-operative expenses such as salaries, brokerage, legal and professional fees, etc. incurred during installation
period are capitalised under the respective asset head as part of the indirect installation cost, to the extent to which
the expenditure is allocable / apportioned to the asset-head. In case of composite contract involving acquisition of
property, plant and equipment and providing services, the property, plant and equipment are capitalised at the
respective fair value of the asset acquired.

Stores and spares includes tangible items used as rotables in supply of goods or services and are expected to be used
for a period more than 1 year.

Demo assets includes assets which are given for training, testing and demonstration to various current and
prospective customers for supply of goods or services and are expected to be used for a period more than 1 year.

Any gain or loss on disposal of an item of property, plant and equipment is recognised in the Revised Restated
Consolidated Statement of Profit and Loss.

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