AGS Transact Technologies Limited

Annexure V - Basis of preparation and Significant Accounting Policies

Notes to the Revised Restated Consolidated Financial Information

. Employee benefits
(i) Short-term employee benefits

All employee benefits payable wholly within twelve months of rendering the service are classified short-term
employee benefits and they are recognised in the year in which the employee renders the related services. For the
amount expected to be paid, the Group recognises an undiscounted liability if they have a present legal or
constructive obligation to pay the amount as a result of past service provided by employees, and the obligation can
be estimated reliably.

(ii) Defined contribution plan

A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a
separate entity and will have no legal or constructive obligation to pay further amounts. The Group makes specified
monthly contributions towards Government administered Provident Fund Scheme and Employee State Insurance
Corporations. The Group has no further legal or constructive obligation to pay once contributions are made.
Contributions made are charged to employee benefit expenses in the year in which the employment services
qualifying for the benefit are provided. Some of the foreign subsidiaries of the Group makes specified contributions
towards pension scheme. These contributions are recognised as an expense in the Revised Restated Consolidated
Statement of Profit and Loss, during the period in which the employee renders the related services.

(iii) Gratuity - Defined benefit plan

A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. Gratuity is a
defined benefit plan. The gratuity plan provides for a lump sum payment to vested employees at retirement, death,
incapacitation or termination of employment, of an amount based on the respective employee’s eligible salary and
the tenure of employment with the Group.

The calculation of defined benefit obligation is performed annually by a qualified actuary using the projected unit
credit method. When the calculation results in a potential asset for the Group, the recognised asset is limited to the
present value of economic benefits available in the form of any future refunds from the plan or reductions in future
contributions to the plan (‘the asset ceiling’).

Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan
assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognised in Other
Comprehensive Income. The Group determines the net interest expense (income) on the net defined benefit liability
(asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of
the annual period to the then net defined benefit liability (asset), taking into account any changes in the net defined
benefit liability (asset) during the period as a result of contributions and benefit payments. Net interest expense and
other expenses related to defined benefit plans are recognised in Revised Restated Consolidated Statement of Profit
and Loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to
past service (‘past service cost’ or ‘past service gain’) or the gain or loss on curtailment is recognised immediately in
Revised Restated Consolidated Statement of Profit and Loss. The Group recognises gains and losses on the
settlement of a defined benefit plan when the settlement occurs.

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