Accounting Policies of ROX Hi-Tech Ltd. Company

Mar 31, 2025

Note: 2 Significant Accounting Policies
1 Basis of preparation:

The financial statements of the Company have
been prepared in accordance with the Generally
Accepted Accounting Principles in India (Indian
GAAP) to comply with the Accounting Standards
specified under Section 133 of the Companies Act,
2013, read with Rule 7 of the Companies (Accounts)
Rules, 2014 and the relevant provisions of the
Companies Act, 2013. The financial statements
have been prepared on accrual basis under the
historical cost convention.

2 Revenue recognition:

The company derives its revenues primarily from
Sale of computer servers, laptops, hardware
pheripheral devices & derives service revenue
from sale of customized softwares . Revenue from
services provided under fixed price contracts,
where the outcome can be estimated reliably, is
recognized based on contract activity. Revenue on
time-and-material contracts are recognized as the
related services are performed and the revenues
from the end of the last billing to the balance sheet
date are recognized as unbilled revenues.

The Company''s contracts with customers include
contracts with multiple products and services.
The Company derives revenue from IT services
comprising software development and related
services, maintenance, consulting and package
implementation, licensing of software products and
platforms across the Company''s core and digital
offerings and business process management
services. In some cases, the company engages in
some fixed price development contracts, including
contracts with multiple performance obligations.

Revenue recognition in such contracts involve
judgments relating to identification of distinct
performance obligations, determination of
transaction price for such performance obligations
and the appropriateness of the basis used to
measure revenue over a period. In case of fixed
price development contracts where performance
obligations are satisfied over a period of time,
revenue is recognized based on management''s
estimate of contract efforts. The estimation of total
efforts or costs involves significant judgement
and is assessed throughout the period of the
contract to reflect any changes based on the latest
available information.

Revenue is recognized to the extent that it is
probable that the economic benefits will flow to
the Company and the revenue can be reliably

measured in accordance with AS-9, Revenue
Recognition. Sales are recognized on accrual basis,
and only after transfer of services to the customer.

Interest Income: Revenue is recognized on the
time proportion basis after taking into account the
amount outstanding and the rate applicable.

Dividend Income: Dividend Income is recognised
when the owners right to receive payment
is established.

Other Income : Other items of income and
expenditure are recognized on accrual basis and
as a going concern basis, and the accounting
policies are consistent with the generally accepted
accounting policies.

3 Property Plant and Equipment including

Intangible assets:

Property Plant and Equipments are stated at cost,
less accumulated depreciation. Cost includes
cost of acquisition including material cost, freight,
installation cost, duties and taxes, and other
incidental expenses, incurred up to the installation
stage, related to such acquisition. Property, Plant
and Equipments purchased in India by foreign
currency are recorded in Rupees, converted at the
exchange rate prevailed on the date of purchase.
Intangible assets that are acquired by the
Company are measured initially at cost. After initial
recognition, an intangible asset is carried at its
cost less any accumulated amortisation and any
accumulated impairment loss.

4 Depreciation & Amortisation:

The Company has applied the estimated useful
lives as specified in Schedule II of the Companies
Act 2013 and calculated the depreciation based
on useful life of assets. Depreciation on new
assets acquired during the year is provided from
the date of acquisition to the end of the financial
year. In respect of the assets sold during the year,
depreciation is provided from the beginning of the
year till the date of its disposal.

Intangible assets are amortised on a straight-line
basis over the estimated useful life as specified
in Schedule II of the Companies Act 2013.

The amortisation expense on intangible assets with
finite lives is recognised in the statement of profit
and loss. In respect of the assets sold during the
year, amortisation is provided from the beginning
of the year till the date of its disposal.

5 Impairment of assets:

The Management periodically assesses using,
external and internal sources, whether there is
an indication that an asset may be impaired.
An impairment loss is recognised wherever the
carrying value of an asset exceeds its recoverable
amount. The recoverable amount is higher of the
asset''s net selling price and value in use, which
means the present value of future cash flows
expected to arise from the continuing use of the asset
and its eventual disposal. Reversal of impairment
loss is recognised immediately as income in the
profit and loss account.

6 Use of estimates:

The preparation of the financial statements in
conformity with Generally Accepted Accounting
Principles requires the Management to make
estimates and assumptions that affect the reported
balances of assets and liabilities and disclosures
relating to contingent assets and liabilities as at the
date of the financial statements and the reported
amounts of income and expenses during the year.
Examples of such estimates include provisions for
doubtful debts, income taxes, post - sales customer
support and the useful lives of Property Plant and
Equipments and intangible assets.

7 Inventories:

Hardware, Software and Product
Components:

Product Components are valued at lower of cost or
net realizable value. Cost is determined on First-In¬
First Out basis.

Projects in Progress / Work in Progress:

Hardware equipments, softwares, development
cost and other items are carried at the lower of
cost and net realisable value. Cost is determined
on a specific identification basis. Cost includes
material cost, freight and other incidental expenses
incurred in bringing the inventory to the present
location / condition.

8 Trade Receivables:

A receivable represents the Company''s right to
an amount of consideration that is unconditional
(i.e., only the passage of time is required before
payment of the consideration is due).

9 Foreign currency transactions:

Domestic Operation:

I. Initial recognition :

A foreign currency transactions are recorded,
on initial recognition in the reporting currency,
by applying to the foreign currency amount
the exchange rate between the reporting
currency and the foreign currency at the date
of the transaction.

II. Measurement :

Foreign currency monetary items are reported
using the closing rate.

Non-monetary items which are carried in terms
of historical cost denominated in a foreign
currency are reported using the exchange rate
at the date of the transaction

Non-monetary items which are carried at fair
value or other similar valuation denominated
in a foreign currency are reported using the
exchange rates that existed when the values
were determined.

III. Treatment of Foreign exchange :

Exchange differences arising on settlement/
restatement of foreign currency monetary
assets and liabilities of the Company are
recognised as income or expenses in the
Statement of Profit and Loss

10 Employee Benefits:

A. Post-Employment benefits:

Defined benefit plan:

Gratuity liability is a defined benefit obligation
and is unfunded. The Company accounts for
liability for future gratuity benefits based on
the actuarial valuation using Projected Unit
Credit Method carried out as at the end of
each financial year.

Defined contribution Plan:

Provident Fund: Eligible employees receive
benefit from provident fund covered under the
Provident Fund Act. Both the employee and
the company make monthly contributions.
The employer contribution is charged off to
Profit & Loss Account as an expense.

11 Taxes on Income:

Income Tax expense is accounted for in accordance
with AS-22 "Accounting for Taxes on Income" for
both Current Tax and Deferred Tax stated below:

A. Current Tax:

Provision for current tax is made in accordance
with the provisions of the Income Tax Act, 1961.

B. Deferred Tax:

Deferred tax is recognised, subject to the
consideration of prudence, as the tax effect
of timing difference between the taxable
income and accounting income computed
for the current accounting year using the
tax rates and tax laws that have been
enacted or substantially enacted by the
balance sheet date.

Deferred tax assets are recognised and
carried forward to the extent that there is a
reasonable certainty, except arising from
unabsorbed depreciation and carried forward
losses, that sufficient future taxable income
will be available against which such deferred
tax assets can be realised.

---

Mar 31, 2024

Note: 1 Company Overview & Significant Accounting Policies

Company Overview

The Company was incorporated as a Private Limited Company on 13th March 2002 under the provisions of the Companies Act 1956, with CIN:U51506TN2002PTC048598 and having its registered office at Old No.101B, New No.160, 1st & 3rd Floor Mahalingapuram Main Road, Nungambakkam Chennai - 600034 India, with operating units across the Country. Subsequently, company was converted into Public Limited Company vide special resolution passed by our shareholders at the Extra Ordinary General Meeting held on 24th day of April, 2023 and the name of the company was changed to ROX HI-TECH LIMITED pursuant to issuance of Fresh Certificate of Incorporation on 23rd day of May, 2023 by Registrar of Companies, Chennai with Corporate Identification Number U51506TN2002PLC048598.

During the year, the Company has been listed on SME platform of NSE on 16th November, 2023 by way of Initial Public Offer ("IPO") of 60,17,600 fully-paid-up equity shares of face value Rs.10 each at a premium of Rs.83 each and subsequently Corporate Identification Number was changed to L51506TN2002PLC048598 Post listing.

The Company is engaged in the business of dealing in Computer Hardware components, pheripheral devices, all kinds of electronic data processing equipments, providing in all kinds of software, including packaged & Customized software & Implement software solutions in the domains like Customer Relationship Management(CRM), Supply chain Management (SCM) and Business Operations (BO) and to help the customers to solve the problems and challenges in business by implementing IBM''s ON — DEMAND Solutions. Further the company is also running Software/hardware training Centers, Software Consultancy, System Studies, Management consultancy, techno economic feasibility studies of projects, design and development of management information systems in India and outside India and to focus on Identification, selection, training of Software manpower for onsite placement in India and outside India for its own use and/or clients use and recruitment and job placement services in India and outside India.

Note: 2 Significant Accounting Policies 1. Basis of preparation:

The Statement of Assets and Liabilities of the Company as on March 31, 2024, and the Statement of Profit and Loss and Statements of Cash Flows for the financial year ended on March 31, 2024 and the annexure thereto (collectively, the "Financial Statements") have been compiled by the management from the Financial Statements of the

Company for the financial year ended on March 31, 2024. The Financial Statements have been prepared in accordance with Indian Generally Accepted Accounting Principles (IGAAP) under historical cost convention on the accrual basis. GAAP comprises mandatory accounting standards prescribed by the Companies (Accounting Standards) Rules, 2021.

2. Revenue recognition:

The company derives its revenues primarily from Sale of computer servers, laptops, hardware pheripheral devices & derives service revenue from sale of customized softwares . Revenue from services provided under fixed price contracts, where the outcome can be estimated reliably, is recognized based on contract activity. Revenue on time-and-material contracts are recognized as the related services are performed and the revenues from the end of the last billing to the balance sheet date are recognized as unbilled revenues.

The Company''s contracts with customers include contracts with multiple products and services. The Company derives revenues from IT services comprising software development and related services, maintenance, consulting and package implementation, licensing of software products and platforms across the Company''s core and digital offerings and business process management services. In some cases, the company engages in some fixed price development contracts, including contracts with multiple performance obligations.

Revenue recognition in such contracts involves judgments relating to identification of distinct performance obligations, determination of transaction price for such performance obligations and the appropriateness of the basis used to measure revenue over a period. In case of fixed price development contracts where performance obligations are satisfied over a period of time, revenue is recognized based on management''s estimate of contract efforts. The estimation of total efforts or costs involves significant judgement and is assessed throughout the period of the contract to reflect any changes based on the latest available information.

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured in accordance with AS-9, Revenue Recognition. Sales are recognized on accrual basis, and only after transfer of services to the customer.

Interest Income: Revenue is recognized on the time proportion basis after taking into account the amount outstanding and the rate applicable.

Dividend Income: Dividend Income is recognised when the owners right to receive payment is established.

Other Income : Other items of income and expenditure are recognized on accrual basis and as a going concern basis, and the accounting policies are consistent with the generally accepted accounting policies.

3. Property Plant and Equipment including Intangible assets:

"Property Plant and Equipments are stated at cost, less accumulated depreciation. Cost includes cost of acquisition including material cost, freight, installation cost, duties and taxes, and other incidental expenses, incurred up to the installation stage, related to such acquisition. Property, Plant and Equipments purchased in India by foreign currency are recorded in Rupees, converted at the exchange rate prevailed on the date of purchase. Intangible assets that are acquired by the Company are measured initially at cost. After initial recognition, an intangible asset is carried at its cost less any accumulated amortisation and any accumulated impairment loss."

4. Depreciation & Amortisation:

The Company has applied the estimated useful lives as specified in Schedule II of the Companies Act 2013 and calculated the depreciation based on useful life of assets. Depreciation on new assets acquired during the year is provided from the date of acquisition to the end of the financial year. In respect of the assets sold during the year, depreciation is provided from the beginning of the year till the date of its disposal.

Intangible assets are amortised on a straight-line basis over the estimated useful life as specified in Schedule II of the Companies Act 2013. The amortisation expense on intangible assets with finite lives is recognised in the statement of profit and loss. In respect of the assets sold during the year, amortisation is provided from the beginning of the year till the date of its disposal.

Useful life of Property, Plant and Equipments

Category	Useful life
Computer & Accessories	3-6 years
Furniture & Fittings	10 years
Office Equipments	8 years
Softwares	8-10 years
Plant & Machinery	15 years
Electrical Fittings	10 years
Vehicles	10 years

5. Impairment of assets:

The Management periodically assesses using, external and internal sources, whether there is an indication that an asset may be impaired. An impairment loss is recognised wherever the carrying value of an asset exceeds its recoverable amount. The recoverable amount is higher of the asset''s net selling price and value in use, which means the present value of future cash flows expected to arise from the continuing use of the asset and its eventual disposal. Reversal of impairment loss is recognised immediately as income in the profit and loss account.

6. Use of estimates:

The preparation of the financial statements in conformity with Generally Accepted Accounting Principles requires the Management to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to contingent assets and liabilities as at the date of the financial statements and the reported amounts of income and expenses during the year. Examples of such estimates include provisions for doubtful debts, income taxes, post - sales customer support and the useful lives of Property Plant and Equipments and intangible assets.

7. Inventories:

Hardware, Software and Product Components

Product Components are valued at lower of cost or net realizable value. Cost is determined on First-In-First Out basis.

Projects in Progress / Work in Progress:

Hardware equipments, softwares, development cost and other items are carried at the lower of cost and net realisable value. Cost is determined on a specific identification basis. Cost includes material cost, freight and other incidental expenses incurred in bringing the inventory to the present location / condition.

8. Trade Receivables:

A receivable represents the Company''s right to an amount of consideration that is unconditional (i.e., only the passage of time is required before payment of the consideration is due).

9. Foreign currency transactions:

Domestic Operation:

I . Initial recognition :

A foreign currency transactions are recorded, on initial recognition in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and

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II . Measurement :

Foreign currency monetary items are reported using the closing rate.

Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction

Non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.

III . Treatment of Foreign exchange :

Exchange differences arising on settlement/ restatement of foreign currency monetary assets and liabilities of the Company are recognised as income or expenses in the Statement of Profit and Loss

10. Employee Benefits:

A. Post-Employment benefits:

Defined benefit plan:

Gratuity liability is a defined benefit obligation and is unfunded. The Company accounts for liability for future gratuity benefits based on the actuarial valuation using Projected Unit Credit Method carried out as at the end of each financial year.

Defined contribution Plan:

Provident Fund: Eligible employees receive benefit from provident fund covered under the Provident Fund Act. Both the employee and the company make monthly contributions. The employer contribution is charged off to Profit & Loss Account as an expense.

11. Taxes on Income:

Income Tax expense is accounted for in accordance with AS-22 "Accounting for Taxes on Income" for both Current Tax and Deferred Tax stated below:

A. Current Tax:

Provision for current tax is made in accordance with the provisions of the Income Tax Act, 1961.

B. Deferred Tax:

Deferred tax is recognised, subject to the consideration of prudence, as the tax effect of timing difference between the taxable income and accounting income computed for the current accounting year using the tax rates and tax laws that have been enacted or substantially enacted by the balance sheet date.

Deferred tax assets are recognised and carried forward to the extent that there is a reasonable certainty, except arising from unabsorbed depreciation and carried forward losses, that sufficient future taxable income will be available against which such deferred tax assets can be realised.

12. Provisions and Contingent Liabilities:

A provision is recognised if, as a result of past event, the Company has a present legal obligation that can be estimated reliably and it is probable that an outflow of economic benefit will be required to settle the obligation. Provisions are determined by the best estimate of outflow of economic benefits required to settle the obligation at the reporting date. Where no reliable estimate can be made, a disclosure is made as contingent liability. A disclosure for a contingent liability is also made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is possible obligation or present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

13. Earnings Per Share:

Basic Earnings per share is computed by dividing the net profit after tax by the weighted average number of equity shares outstanding during the period. Diluted earnings per share is computed by dividing the net profit after tax by the weighted average number of shares considered for deriving basic earnings per share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. The diluted potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value which is the average market value of the outstanding shares. Dilutive potential equity shares are deemed converted as at the beginning of the period, unless issued at a later date. Dilutive potential equity shares are determined independently for each period presented.

14. Cash and Cash Equivalents:

The Company''s cash and cash equivalents consist of cash on hand and in banks , which can be withdrawn at any time, without prior notice or penalty on the principal. For the purposes of the statement of cash flows, cash and cash equivalents include cash on hand, in banks are considered part of the Company''s cash management system. In the balance sheet, bank overdrafts are presented under borrowings within current liabilities.

15. Cash Flow Statement:

Cash flows are reported using indirect method, whereby net profit/loss before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.

16. Investments

Investments, which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as longterm investments.