MATERIAL ACCOUNTING POLICIES
The material accounting poiicies used in the preparation of the standalone financiai statements have
been included in the reievant notes to the standalone financiai statements.
The accounting poiicies mentioned herein reiate to the standaione financiai statements of the
Company.
The Company uses the foilowing critical accounting Judgments, estimates, and assumptions in the
preparation of its financial statements:
i. Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable and net of
returns, trade aiiowances, rebates, and amounts coiiected on behalf of third parties. It excludes
the value of GST. r ,„„AT ____
For IYK0T HITECIgW|CIOM LTD.
Sale of products-
Revenue from the sale of products is recognized when significant risks and rewards of
ownership pass ,o the customer, as per the terms of the contract and It is probableThat the
economic benefits associated with the transaction will flow to the Company.
ii. Property, Plant, and Equipment
accumuteiidPd°PCrtV’ P'a"/ ^ Equipme,,t are !tated at tost of acquisition or construction less
taxes and H , er and ""Pa™"t, if any. Cost includes purchase price
asset a r ' C°S‘' and direc,'v attr|botobie overheads incurred up to the date the
availed oT ^ "* 'nte"ded H°Wever' ctBt exdudes G S T to the extent credit of tax is
—ir “re 'ndUded ,he °SSe,'S Carryi"g am°P"' °r recognized » separate assets,
„ W " 15 Pr0l,able that fu,urc ec°n0mic benefit associated with the item
Rows to the company and the cos. of the item can be measured reiiably. The carrying amoum
renairx T°nent aCcountetl f°r as 3 separate asset is derecognized when replaced. All other
Jh“Zrna"“ " Ctarged “ Pr°m and LOSS dUrine «- P-W in which
iii. Depreciation and amortization
1) Depreciation on tangible fixed assets is charged over the estimated useful life of the asset or
S°P r, AaSfThadrmSideri"8 d0Uble/triPle *"»>' 3
off durineCh d e 6 Companles Act' 2013- 0n tonglble fixed assets added/ disposed
date of dfe posaT"' PreC'a,l°n * Charged 0n a pra ra,a basis the date of addition/ till the
2) nr T dcp,eciated based on ,he qua">''V »f components manufactured and the life of
the toois, subject to a maximum of 5 years.
41 Dmm 317'““ 3nd reVieWed' 3nd ad'usled'if aPP™Priale, for each reporting period,
cia ion in respect of tangible assets costing iess than Rs. 5000/- is provided at 100%.
iv. Inventories
Inventories are valued at the lower of cost and net realizable value
as°cert°a nedW mate,laiS' COmP°"en,S' St0res' sPares- work-in-progress, and finished goods are
ascertained on a moving average basis.
2) aCplpria.neSnrod ^ T“"P** direct materials, direct labour and an
based o' norm r * ** ^ 'atter being allocated
on weighted"113 ^ "* aSSi8"ed '° indl',idual °f inventory based
1Z a “ C0SK- C°St! °f Pl,rchased in"entorV are determined after deducting
rebates and discounts. Net reaiizable value is determined as the estimated selling price “n I
necessary make.h SmrSMSS ^ e5tirT‘atec' cos,s °> “™P'eti°n a"d the estimated costs
ry to make the sale. Materials and supplies held for use in the production of inventories
t o ahr:: dT if ,h! ProdUttS "•**« <baV wii, be used are expected , 0 b e s^
duly provided for. n°n"’n°V"18 "",8r,al' otaote*."“. a"d defective inventories are
For lYlfOT HITECH.TOni Rnn.y im
v. Employee benefits
a- Short-term obligations:
Liabilities for wages and saiaries, including non-monetary benefits that are expected to be
settied wholly within 12 months after the end of the period in which the employees render the
related service are recognized in respect of employees' service up to the end of the reporting
period and are measured at the amounts expected to be paid when the iiabiiities are settled.
The liabilities are presented as current employee benefit obligations in the balance sheet. Such
liabilities are disposed of by way of monthly contributions to the fund administered by the
Regionai Provident Commissioner, Tamilnadu, and the Employees' State Insurance Corporation,
Tamilnadu Regionai Office.
b. Other long-term employee benefits:
The liabilities for earned ieave are settied on a cash payment basis as and when the same arises.
Uabiiity towards Gratuity is provided in the books on an accruai basis.
vi. Cash and Cash equivalents
For presentation in the cash fiows, cash and cash equivalents include cash on hand, deposits
held at cails with financial institutions, other short-term, highiy iiquid investments with original
maturities of three months or iess that are readiiy convertible to known amounts of cash and
which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank
overdrafts are shown within current iiabiiities in the baiance sheet.
vii. Trade receivabies
Trade receivabies are recognized initiaiiy at fair vaiue and subsequently measured at amortized
cost using the effective interest method, less provision for impairment.
viii. Taxes on Income
Tax expense comprises current and deferred taxes.
The income tax expense or credit for the period is the tax payable on the current period's
taxabie income based on the applicable income tax rate for each jurisdiction adjusted by
changes in deferred tax assets and iiabiiities attributable to temporary differences and unused
tax iosses.
The current income tax charge is calculated based on the tax laws enacted or substantively
enacted at the end of the end of the reporting period. The management periodically evaiuates
positions taken in tax returns for situations in which applicable tax regulation is subject to
interpretation. It establishes provisions where appropriate based on amounts expected to be
paid to the tax authorities.
Deferred income tax is provided in full, using the liability method, on temporary differences
arising between the tax bases of assets and liabilities and their carrying amount in financial
statements. However, deferred tax iiabiiities are not recognized if they arise from the initial
recognition of goodwill. Deferred income tax is not accounted for if it arises from the initial
recognition of an asset or liability in a transaction other than a business combination that at the
time of the transaction affects neither accounting profit nor taxabie profit or loss. Deferred
income tax is determined using tax rates (and iaws) that have been enacted or substantial
enacted by the end of the reporting period and are expected to appiy when the deferred
income tax asset is reaiized or the deferred income tax liability is settled.
Deferred tax assets are recognized oniy if it is probabie that future taxable amounls will be
available to utilize those temporary differences and losses.
Current and deferred tax is recognized in profit or loss, except to the extent that it relates to
items recognized in the other comprehensive income or directiy in equity. In this case, the tax is
also recognized in other comprehensive income or directly in equity, respectively.
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