Accounting Policies of Viksit Engineering Ltd. Company

Mar 31, 2024

SIGNIFICANT ACCOUNTING POLICES

A. CORPORATE INFORMATION

VIKSIT ENGINEERING LIMITED (''the Company'') is a Limited Company, domiciled in India
and incorporated under the provision of the Companies Act, 1956 having its registered office at
Room No-1-2, Kapadia Chamber, 51 Bharuch Street Masjid Bunder (E), Mumbai City, MH,
400009 IN and listed on the Bombay Stock Exchange (BSE). The company is registered with the
Ministry of Corporate Affairs. The registration details are as follows:

Corporate Identity Number (CIN) - L99999MH1983PLC029321

A financial creditor of the Company, Epoch Mercantile Private Limited, has initiated
proceedings against the Company under section 7 under Insolvency & Bankruptcy Code 2016,
whereby application has been accepted by the Adjudicating Authority. The Company is under
the Corporate Insolvency Resolution Process ("CIRP") under the provisions of the Insolvency &
Bankruptcy Code 2016 ("The Code") vide order C.P.(IB)811(MB)/2023 dated 08.12.2023 passed
by the National Company Law Tribunal ("NCLT") and Mr. Dinesh Kumar Deora, having
Insolvency Professional Registration no. IBBI/IPA-002/IPN00958/2020-21/13041 has been
appointed as Interim Resolution Professional ("IRP"). The powers of the Board of Directors
stand suspended as per section 17 of the Code and such powers are being exercised by IRP/RP.
Further, in the 1^st CoC, Mr. Dinesh Kumar Deora, having Insolvency Professional Registration
no. IBBI/IPA-002/IPN00958/2020-21/13041 has been confirmed as Resolution Professional
("RP").

B. 1 ACCOUNTING POLICIES

a) Basis of Preparation and Presentation

The Financial Statements have been prepared to comply with the Indian Accounting Standards
(hereinafter referred to as the ''Ind AS'') as notified by Ministry of Corporate Affairs pursuant to
Section 133 of the Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting
Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules,
2016.The financial statements have been prepared on accrual and going concern basis. The
accounting policies are applied consistently to all the periods presented in the financial
statements. All assets and liabilities have been classified as current or non-current as per the
Company''s normal operating cycle and other criteria as set out in the Division II of Schedule III
to the Companies Act, 2013.

The Financial Statements are presented in Indian Rupees and all values are rounded to the
nearest lakhs (00,000) except when otherwise indicated.

B.2 Summary of Significant Accounting Policies

a) Current and Non-Current Classification

The Company presents assets and liabilities in the Balance Sheet based on Current/ Non¬
Current classification. An asset is treated as Current when it is -

- Expected to be realized or intended to be sold or consumed in normal operating cycle;

- Held primarily for the purpose of trading;

- Expected to be realized within twelve months after the reporting period, or

- Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for
at least twelve months after the reporting period.

All other assets are classified as non-current.

A liability is current when:

- It is expected to be settled in normal operating cycle;

- It is held primarily for the purpose of trading;

- It is due to be settled within twelve months after the reporting period, or

- There is no unconditional right to defer the

b) Revenue Recognition

i) The Company generally follows the mercantile system of accounting and recognizes income
and expenditure on an accrual basis except those with significant uncertainties.

ii) Claims made by the Company and those made on the company are recognized in the profit
and loss Account as and when the claims are accepted.

c) Property, Plant and Equipment (PPE)

Measurement at recognition:

i. Property plant and equipment are stated at cost less accumulated depreciation and
accumulated impairment losses, if any. Subsequent costs are included in the asset''s
carrying amount.

ii. All property, plant and equipment are initially recorded at cost. Cost comprises
acquisition cost, borrowing cost if capitalization criteria are met, and directly
attributable cost of bringing the asset to its working condition for the intended use.

iii. Subsequent expenditure relating to property, plant and equipment is capitalized only
when it is probable that future economic benefit associated with these will flow with the
Company and the cost of the item can be measured reliably.

iv. Any gain or loss on disposal of an item of property, plant and equipment is recognized
in statement of profit and loss.

v. The Company has opted to elect to continue with the carrying value for all its property,
plant and equipment as recognized in the financial statements as at the date of transition
to IND AS, measured as per the previous GAAP and use that as its deemed cost as at the
date of Transition.

Depreciation:

i. Depreciation provided on property, plant and equipment is calculated on a Straight-Line
Method (SLM) basis using the rates arrived at based on the useful lives estimated by
management.

ii. Depreciation on assets is provided on a Straight-Line Method (SLM) as per the rates
prescribed in Schedule II to the Companies Act, 2013. Depreciation on additions to fixed
assets is provided on a pro-rata basis from the date the asset is available for use.
Depreciation on sale / deduction from fixed assets is provided for up to the date of sale
/ deduction / scrapping.

iii. The residual values, estimated useful lives and methods of depreciation of property,
plant and equipment are reviewed at the end of each financial year and changes if any,
are accounted for on a prospective basis.

iv. The Company has elected to measure all its property, plant and equipment at the
previous GAAP carrying amount as its deemed cost on the date of transition to Ind AS.

d) Financial Instruments

The Company recognizes all the financial assets and liabilities at its fair value on initial
recognition; In the case of financial assets not at fair value through profit or loss, transaction costs
that are directly attributable to the acquisition or issue of the financial asset are added to the fair
value on initial recognition. The financial assets are accounted on a trade date basis.

For subsequent measurement, financial assets are categorized into:

Amortized cost: The Company classifies the financial assets at amortized cost if the contractual
cash flows represent solely payments of principal and interest on the principal amount
outstanding and the assets are held under a business model to collect contractual cash flows. The
gains and losses resulting from fluctuations in fair value are not recognized for financial assets
classified in amortized cost measurement category.

Fair Value through Other Comprehensive Income (FVOCI): The Company classifies the
financial assets as FVOCI if the contractual cash flows represent solely payments of principal
and interest on the principal amount outstanding and the Company''s business model is achieved
by both collecting contractual cash flow and selling financial assets. In case of debt instruments
measured at FVOCI, changes in fair value are recognized in other comprehensive income. The
impairment gains or losses, foreign exchange gains or losses and interest calculated using the
effective interest method are recognized in profit or loss. On de-recognition, the cumulative gain
or loss previously recognized in other comprehensive income is re- classified from equity to
profit or loss as a reclassification adjustment. In case of equity instruments irrevocably designated
at FVOCI, gains / losses including relating to foreign exchange, are recognized through other
comprehensive income. Further, cumulative gains or losses previously recognized in other
comprehensive income remain permanently in equity and are not subsequently transferred to
profit or loss on derecognition.

Fair value through profit or loss (FVTPL): The financial assets are classified as FVTPL if
these do not meet the criteria for classifying at amortized cost or FVOCI. Further, in certain cases to
eliminate or significantly reduce a measurement or recognition inconsistency (accounting
mismatch), the Company irrevocably

designates certain financial instruments at FVTPL at initial recognition. In case of financial assets
measured at FVTPL, changes in fair value are recognized in profit or loss.

Profit or Loss on sale of investments is determined based on first-in-first-out (FIFO) basis.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date. The fair value
measurement is based on the presumption that the transaction to sell the asset or transfer the
liability takes place either:

In the principal market for the asset or liability, or

In the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible by the Company.

The fair value of an asset or a liability is measured using the assumptions that market
participants would use when pricing the asset or liability, if market participants act in their
economic best interest.

A fair value measurement of a non- financial asset considers a market participant''s ability to
generate economic benefits by using the asset in its highest and best use or by selling it to another
market participant that would use the asset in its highest and best use.

In order to show how fair values have been derived, financial instruments are classified based on
a hierarchy of valuation techniques, as summarized below:

Level 1 - The fair value hierarchy have been valued using quoted prices for instruments in an
active market.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable either
directly (i.e., as prices) or indirectly (i.e., derived from prices).

Level 3: Inputs that are unobservable. This category includes all instruments for which the
valuation technique includes inputs that are not observable and the unobservable inputs have a
significant effect on the instrument''s valuation.

Based on the Company''s business model for managing the investments, the Company has
classified its investments and securities for trade at FVTPL. Investment in subsidiaries is carried at
deemed cost (previous GAAP carrying amount) as per Ind AS 27.

Impairment of financial assets: In accordance with Ind AS 109, the Company applies Expected
Credit Loss model (ECL) for measurement and recognition of impairment loss. The Company
recognizes lifetime expected losses for all contract assets and / or all trade receivables that do
not constitute a financing transaction. At each reporting date, the Company assesses whether the
loans have been impaired. The Company is exposed to credit risk when the customer defaults
on his contractual obligations. For the computation of ECL, the loan receivables are classified into
three stages based on the default and the aging of the outstanding.

If the amount of an impairment loss decreases in a subsequent period, and the decrease can be
related objectively to an event occurring after the impairment was recognized, the excess is written
back by reducing the loan impairment allowance account accordingly. The write-back is
recognized in the statement of profit and loss.

The Company recognizes life time expected credit loss for trade receivables and has adopted the
simplified method of computation as per Ind AS 109.

For subsequent measurement, financial liability is categorized into:

All financial liabilities are initially recognized at fair value net of transaction cost that are
attributable to the separate liabilities. All financial liabilities are subsequently measured at
amortized cost using the effective interest method or at FVTPL.

Financial liabilities are classified as at FVTPL when the financial liability is either
contingent consideration recognized by the Company as an acquirer in a business
combination to which lnd AS 103 applies or is held for trading or it is designated as at
FVTPL.

Financial liabilities that are not held-for- trading and are not designated as at FVTPL
are measured at amortized cost. The carrying amounts of financial liabilities that are
subsequently measured at amortized cost are determined based on the effective
interest method.

The effective interest method is a method of calculating the amortized cost of a financial
liability and of allocating interest expense over the relevant period. The effective interest
rate is the rate that exactly discounts estimated future cash payments (including all fees
paid or received that form an integral part of the effective interest rate, transaction costs
and other premiums or discounts) through the expected life of the financial liability, or
(where appropriate) a shorter period, to the amortized cost of a financial liability.

Equity instruments:

An equity instrument is any contract that evidences a residual interest in the assets of
an entity after deducting all its liabilities. Equity instruments issued by the Company
are recognized at the proceeds received, net of direct issue costs.

Derecognition:

A financial liability is derecognized when the obligation under the liability is discharged
or cancelled or expires. When an existing financial liability is replaced by another from
the same lender on substantially different terms, or the terms of an existing liability are
substantially modified, such an exchange or modification is treated as the derecognition
of the original liability and the recognition of a new liability. The difference between
the carrying amount of the financial liability derecognized and the consideration paid
is recognized in the Statement of Profit and Loss.

e) Employee Benefits

a) short term employee benefits are recognized as an expense at the undiscounted amount in
the profit and loss Account of the year in which the related service is rendered.

b) Termination benefits are recognized as an expense as and when incurred.

f) Borrowing Costs

Borrowing costs attributable to the acquisition or construction of qualifying assets are
capitalized as a part of such assets. All other borrowing costs are charged to revenue. A
qualifying asset is an asset that necessarily requires substantial period to get ready for its
intended use or sale.

g) Cash Flow Statement

Cash flow statement has been prepared in accordance with the indirect method prescribed in
Indian Accounting Standard 7- Statement of Cash Flow issued by the Institute of Chartered
Accountants of India.

h) Investments

Investments held as long-term investments are stated at Fair market value through FVTPL.
Investment in unquoted shares of related parties is carried at Amortized cost as per IND AS 27.

i) Taxes on Income

a) Current tax is determined as the amount of tax payable in respect of taxable income for the
year as determined in accordance with the provisions of the Income Tax Act, 1961/ relevant tax
regulations applicable to the Company.

Current tax assets and liabilities are offset only if, the Company:

-The entity has legally enforceable right to set off the recognized amounts; and

-Intends either to settle on a net basis, or to realize the asset and settle the liability
simultaneously.

b) Minimum Alternate Tax (MAT), if paid, in accordance with the tax laws, which give future
economic benefits in the form of adjustment to future income tax liability, is considered as an
asset, if there is convincing evidence that the Company will pay normal income tax.
Accordingly, MAT is recognized as an asset in the Balance Sheet when it is probable that future
economic benefit associated with it will flow to the Company.

c) Deferred Tax is recognized on temporary differences between the carrying amounts of assets
and liabilities in the financial statements and the corresponding tax bases used in the
computation of taxable profit.

Deferred Tax Assets are recognized to the extent it is probable that taxable profit will be
available against which the deductible temporary differences, and the carry forward of unused
tax losses can be utilized.

Deferred tax assets and liabilities are offset only if:

The entity has legally enforceable right to set off current tax assets against current tax liabilities;
and

The deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same
taxation authority on the same taxable entity.

Deferred Tax Liabilities and Assets are measured at the tax rates that are expected to apply in
the period in which the liability is settled or the asset realized, based on tax rates (and tax laws)
that have been enacted or substantively enacted by the end of the reporting period. The

carrying amount of deferred tax liabilities and assets are reviewed at the end of each reporting
period.

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Mar 31, 2014

1. Accounting Convention

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 notified under Sec 211(3C) of the Companies Act, 1956("the 1956 Act") read with General Circular 15/2013 dated 13 September, 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act 2013 and the relevant provisions of the Companies Act, 1956/2013 Act, as applicable. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

All assets and liabilities are classified into current and non-current generally based on criteria of realisation/settlement month''s period from the Balance Sheet date.

2. Fixed Assets and Depreciation

Tangible Assets are carried at cost of acquisition including freight, duties, taxes and incidental expenses until the fixed assets are ready to put to use less accumulated depreciation, Impairment loss, if any, ascertained as per the Accounting Standard of the Companies (Accounting Standards) Rules, 2006 is recognized.

Depreciation on Fixed Assets is provided under the Written Down Value Method at the rates provided by schedule XIV to the Companies Act, 1956. Depreciation on additions during the year is being calculated on pro rata basis.

3. Impairment

At each Balance Sheet date, the management reviews the carrying amounts of each cash generating unit to determine whether there is any indication that those assets were impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of impairment loss. Recoverable amount is the higher of an asset''s net selling price use. In assessing value in use, the estimated future cash flows expected from the continuing use of the asset and from its disposal are discounted to their present value using a pre-tax discount rate that reflects the current market assessments of time value of money and the risks specific to the asset.

Reversal of impairment loss is recognized as income in the statement of profit and loss.

4. Investments

Investments wherever readily realizable and intended to be held not more than one year from the date of such investments are made, are qualified as current investments. Current investments are carried at lower of cost and quoted/fair value, computed category- wise.

Long term investments are stated at cost. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary.

5. Inventories

Inventories are valued at cost or net realizable value whichever is lower. Cost of inventories is computed on the First-In-First-Out (FIFO) basis.

6. Sales

Sales are exclusive of sales tax.

7. Revenue Recognition

The Company follows the mercantile system of accounting and recognizes income and expenditure on accrual basis.

Dividend income is recognized when the right to receive payment is established.

Interest income is recognized on time proportion basis taking into account the amount outstanding and rate applicable.

8. Taxes on Income

Current tax is determined as the amount of tax payable in respect of taxable income for the year. Credit in respect of Minimum Alternate Tax paid is recognized only if there is convincing evidence of realization of the same.

Deferred Tax, which is computed on the basis of enacted/ substantively enacted rates, is recognized on timing differences, being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent period. Where there is unabsorbed depreciation or carry forward losses, deferred tax assets are recognized only if there is virtual certainty of realization of such assets. Other deferred tax assets are recognized only to the extent there is reasonable certainty of realization in future.

9. Provisions

A provision is recognized when the Company has a present obligation as a result of past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.

10. Contingent Liabilities

Contingent Liabilities are recognized only when there is a possible obligation arising from past events due to occurrence or non-occurrence or one or more uncertain future events, not wholly within the control of the company, or where any present obligation cannot be measured in terms of future outflow resources or where a reliable estimate of the obligation cannot be made. Obligations are assessed on an ongoing basis and only those having a largely probable outflow of resources are provided for. Contingent Assets are not recognized in the financial statements.

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Mar 31, 2010

1. Accounting Convention

The accounts have been prepared on historical cost basis.

2. Sales

Sales are exclusive of sales tax.

3. Revenue Recognition

The Company follows the mercantile system of accounting and recognizes income and expenditure on accrual basis.

4. Valuation of Inventories

Traded Goods : At cost or market value whichever is less.

5. Depreciation :

Depreciation on Fixed Assets is provided under the WDV Method at the rates provided by schedule XIV to the Companies Act. 1956. Depreciation on additions during the year is being calculated on pro rata basis.

6. Taxation :

(a) The Minimum Alternate Tax (MAT) provided during the year is as per provisions of section 115 JB of the Income Tax Act, 1961 and same is eligible for set off in the subsequent seven assessment years as per the provisions of the Income Tax Act, 1961.

(b) The current year charge for income tax is calculated in accordance with the relevant tax regulations applicable to the Company. Deferred tax assets/ liabilities are recognized for future tax attributable to the timing differences that result between the profit offered for income tax and the profit as per the financial statements.

7. INVESTMENTS :

investment are valued at cost. In case of Investments in Unquoted shares, market value is not applicable.

8. Fixed Assets :

Fixed Assets are stated at cost less accumulated depreciation, cost comprises, purchase price, duties, levies and other cost relating to the acquisition and installation of the Asset.

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Mar 31, 2009

1 Accounting Convention

The accounts have been prepared on historical cost basis

2 Sales

Sales are exclusive of sales tax

3. Revenue Recognition

The Company follows the mercantile system of accounting and recognizes income and expenditure on accrual basis

4 Valuation of Inventories

Traded Goods : At cost or market value whichever is less.

5. Depreciation:

Depreciation on Fixed Assets is provided under the WDV Method at the rates provided by schedule XIV to the Companies Act, 1956. Depreciation on additions during the year is being calculated on pro rata basis

6. Taxation:

(a) The Minimum Alternate Tax (MAT) provided during the year is as per provisions of section 115 JB of the Income Tax Act, 1961 and same is eligible for set off in the subsequent seven assessment years as per the provisions of the Income Tax Act, 1961

(b) The current year charge for income tax is calculated in accordance with the relevant tax regulations applicable to the Company. Deferred tax assets/ liabilities are recognized for future tax attributable to the timing differences that result between the profit offered for income tax and the profit as per the financial statements.

7. INVESTMENTS :

investment are valued at cost. In case of Investments in Unquoted shares, market value is not applicable.

8. Fixed Assets :

Fixed Assets are stated at cost less accumulated depreciation, cost comprises, purchase price, duties, levies and other cost relating to the acquisition and installation of the Asset.