AGS Transact Technologies Limited

Annexure V - Basis of preparation and Significant Accounting Policies

Notes to the Revised Restated Consolidated Financial Information

Key estimates and assumptions

While preparing the Revised Restated Consolidated Financial Information in conformity with Ind AS, the
management has made certain estimates and assumptions that require subjective and complex judgments. These
judgments affect the application of accounting policies and the reported amount of assets, liabilities, and disclosure
of contingent liabilities at the reporting date and the reported amount of income and expenses for the reporting
period. Future events rarely develop as forecasted and the best estimates require adjustments, as actual results may
differ from these estimates under different assumptions or conditions.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised prospectively.

Judgement, estimates and assumptions are required in particular for:
Revenue recognition

The Company's contracts with customers include promises to transfer multiple products and services to a customer.
Judgment is required to determine the transaction price for the contract. The transaction price could be variable
consideration with elements such as net of returns, service level agreement adjustments / credits, non-current
warranties, trade discounts, volume rebates, where applicable.

Determination of the estimated useful lives

Useful lives of property, plant and equipment are based on the life prescribed in Schedule II of the Act. In cases,
where the useful lives are different from that prescribed in Schedule II and in case of intangible assets, they are
estimated by management based on technical advice, taking into account the nature of the asset, the estimated usage
of the asset, the operating conditions of the asset, past history of replacement, anticipated technological changes,
manufacturers’ warranties and maintenance support. All useful lives are reviewed at each reporting period and
revised if required.

Recognition and measurement of defined benefit obligations

The obligation arising from defined benefit plan is determined on the basis of actuarial assumptions. Key actuarial
assumptions include discount rate, trends in salary escalation, actuarial rates and life expectancy. The discount rate
is determined by reference to market yields at the end of the reporting period on government bonds. The period to
maturity of the underlying bonds correspond to the probable maturity of the post-employment benefit obligations.
Due to complexities involved in the valuation and its long term nature, defined benefit obligation is sensitive to
changes in these assumptions. All assumptions are reviewed at each reporting period.

Recognition and measurement of other provisions
The recognition and measurement of other provisions are based on the assessment of the probability of an outflow of
resources, and on past experience and circumstances known at the closing date. The actual outflow of resources at a

future date may therefore vary from the amount included in other provisions.

Discounting of long-term financial assets / liabilities

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