Accounting Policies of Lords Mark Industries Ltd. Company

Mar 31, 2026

3. Material Accounting Policies

a) Use of Estimates and Judgements

In preparing these financial statements, management has made judgements, estimates and
assumptions that affect the application of accounting policies and the reported amounts of
assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to

accounting estimates are recognized prospectively.

Assumptions and Estimation Uncertainties

Assumptions and estimation uncertainties that have a significant risk of resulting in a
material adjustment recognized in the financial statements are as under:

â¢ measurement of useful life, residual values and impairment of property, plant and
equipment and intangible assets.

â¢ recognition of deferred tax assets: availability of future taxable profit against which
tax losses carried forward can be used.

â¢ measurement of defined benefit obligations: key actuarial assumptions.

â¢ impairment of financial assets and non-financial assets.

â¢ revenue and margin recognition on construction contracts and related provision.

â¢ expected credit losses on trade receivables

â¢ estimation of cost to complete and provision for contract losses

â¢ lease: identification of lease, lease term and applicable discount rate.

b) Measurement of Fair Values

A number of accounting policies and disclosures require measurement of fair values, for
both financial and non-financial assets and liabilities.

Fair values are categorized into different levels in a fair value hierarchy based on the inputs
used in the valuation techniques as follows:

â¢ Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

â¢ Level 2: inputs other than quoted prices included in Level 1 that are observable for the
asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

â¢ Level 3: inputs for the asset or liability that are not based on observable market data
(unobservable inputs).

The Company has an established control framework with respect to the measurement of
fair values. This includes a finance team that has overall responsibility for overseeing all
significant fair value measurements, including Level 3 fair values, and report directly to
chief financial officer.

The finance team regularly reviews significant unobservable inputs and valuation
adjustments. If third party information, is used to measure fair values, then the finance
team assesses the evidence obtained from the third parties to support the conclusion that
these valuations meet the requirements of Ind AS, including the level in the fair value
hierarchy in which the valuations should be classified.

Significant valuation issues are reported to the Company''s Board of Directors.

When measuring the fair value of an asset or a liability, the Company uses observable
market data as far as possible. If the inputs used to measure the fair value of an asset or a
liability fall into different levels of the fair value hierarchy, then the fair value measurement
is categorized in its entirety in the same level of the fair value hierarchy as the lowest level
input that is significant to the entire measurement.

The Company recognizes transfers between levels of the fair value hierarchy at the end of
the reporting period during which the change has occurred.

Further information about the assumptions made in measuring fair values used in
preparing financial statements is included in the respective notes.

c) Property, Plant and Equipment (PPE)

Items of property, plant and equipment are stated at cost less accumulated depreciation
and accumulated impairment losses, if any. Cost includes purchase price including import
duties and non-refundable purchase taxes after deducting trade discounts and rebates, if
any, directly attributable cost of bringing the item to its location and condition for its
intended use and estimated costs of dismantling and removing the item and restoring the
site on which it is located.

If significant parts of an item of property, plant and equipment have different useful lives,
then they are accounted for as separate items (major components) of property, plant and
equipment.

Gains or loss arising from disposal or retirement of property, plant and equipment are
measured as the differences between the net disposal proceeds and the carrying amount of
the property, plant and equipment and are recognized in the statement of profit and loss.

Subsequent costs are included in the asset''s carrying amount or recognized as a separate
asset, as appropriate, only when it is probable that future economic benefits associated with
the item will flow to the entity and the cost of the item can be measured reliably. The
carrying amount of any component accounted for as a separate asset is derecognized when
replaced. All other repairs and maintenance are charged to the statement of profit and loss
during the reporting period in which they are incurred.

The cost of property, plant and equipment not ready for their intended use is recorded as
capital work-in-progress before such date. Cost of construction that relate directly to
specific property, plant and equipment and that are attributable to construction activity in
general and can be allocated to specific property, plant and equipment are included in
capital work-in-progress.

Depreciation methods, estimated useful lives and residual value

Depreciation on property, plant and equipment has been provided as per the rates
prescribed in Part C of Schedule II to the Companies Act, 2013. Asset''s useful lives are
reviewed at each financial year end, considering the physical condition of the assets and
benchmarking analysis or whenever there are indicators for review and adjusted
prospectively.

d) Intangible Assets and Amortisation

Intangible assets are stated at acquisition cost, net of accumulated amortisation and
accumulated impairment losses, if any. Intangible assets acquired separately are measured
on initial recognition at cost. After initial recognition, intangible assets are carried at cost
less any accumulated amortisation and accumulated impairment losses, if any.

Gains or losses arising from derecognition of assets are measured as the differences
between the net disposal proceeds and the carrying amount of the assets and are

recognized in the statement of profit and loss when the asset is derecognized.

Amortisation methods, estimated useful lives and residual value

Intangible assets are amortised on a straight-line basis over their estimated useful lives.
The amortisation period and the amortisation method are reviewed at least at each
financial year end. If the expected useful life of the asset is significantly different from
previous estimates, the amortisation period is adjusted prospectively.

The Company amortizes intangible assets as per the rates prescribed in Part C of Schedule
II to the Companies Act, 2013

e) Leases

The Company lease asset consist of leases for building. The Company assesses whether a
contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the
contract conveys the right to control the use of an identified asset for a period of time in
exchange for consideration. To assess whether a contract conveys the right to control the
use of an identified asset, the Company assesses whether: (i) the contract involves the use
of an identified asset (ii) the Company has substantially all of the economic benefits from
use of the asset through the period of the lease and (iii) the Company has the right to direct
the use of the asset.

At the date of commencement of the lease, the Company recognizes a right-of-use asset
("ROU") and a corresponding lease liability for all lease arrangements in which it is a lessee,
except for leases with a term of twelve months or less (short-term leases) and low value
leases. For these short-term and low value leases, the Company recognizes the lease
payments as an operating expense on a straight-line basis over the term of the lease. Certain
lease arrangements include the options to extend or terminate the lease before the end of
the lease term. ROU assets and lease liabilities includes these options when it is reasonably
certain that they will be exercised.

The right-of-use assets are initially recognized at cost, which comprises the initial amount
of the lease liability adjusted for any lease payments made at or prior to the commencement
date of the lease plus any initial direct costs less any lease incentives. They are subsequently
measured at cost less accumulated depreciation and impairment losses.

Right-of-use assets are depreciated from the commencement date on a straight-line basis
over the shorter of the lease term and useful life of the underlying asset. Right of use assets
are evaluated for recoverability whenever events or changes in circumstances indicate that
their carrying amounts may not be recoverable. For the purpose of impairment testing, the
recoverable amount (i.e., the higher of the fair value less cost to sell and the value-in-use)
is determined on an individual asset basis unless the asset does not generate cash flows
that are largely independent of those from other assets. In such cases, the recoverable
amount is determined for the Cash Generating Unit (CGU) to which the asset belongs.

The lease liability is initially measured at amortized cost at the present value of the future
lease payments. The lease payments are discounted using the interest rate implicit in the
lease or, if not readily determinable, using the incremental borrowing rates in the country
of domicile of these leases. Lease liabilities are remeasured with a corresponding
adjustment to the related right of use asset if the Company changes its assessment if

whether it will exercise an extension or a termination option.

Lease liability and Right of use assets have been separately presented in the Balance Sheet
and lease payments have been classified as financing cash flows.

f) Impairment of Non-financial Assets

Assessment is done at each Balance Sheet date as to whether there is any indication that an
asset (property, plant and equipment and intangible) may be impaired. For the purpose of
assessing impairment, the smallest identifiable group of assets that generates cash inflows
from continuing use that are largely independent of the cash inflows from other assets or
groups of assets, is considered as a cash generating unit. If any such indication exists, an
estimate of the recoverable amount of the asset/cash generating unit is made. Assets whose
carrying value exceeds their recoverable amount are written down to the recoverable
amount. Recoverable amount is higher of an asset''s or cash generating unit''s (CGU) fair
value less cost of disposal and its value in use. Value in use is the present value of estimated
future cash flows using a pre-tax discount rate that reflects current market assessment of
the time value of money and risk specific to the CGU (or the asset) expected to arise from
the continuing use of an asset and from its disposal at the end of its useful life.

Assessment is also done at each Balance Sheet date as to whether there is any indication
that an impairment loss recognized for an asset in prior accounting periods may no longer
exist or may have decreased. Such a reversal is made only to the extent that the asset''s
carrying amount does not exceed the carrying amount that would have been determined,
net of depreciation or amortisation, if no impairment loss had been recognized.

After impairment, depreciation/ amortisation is provided on the revised carrying amount
of the asset over its remaining useful life.

g) Cash and Cash Equivalents

Cash and cash equivalent comprises cash at bank and demand deposits with banks, other
short term highly liquid investment with an original maturity of three months or less that
are readily convertible into known amounts of cash and which are subject to insignificant
risk of changes in value.

h) Inventories

Cost of inventories comprises cost of purchase (net of recoverable taxes where applicable),
and other cost incurred in bringing the inventories to their respective present location and
condition. The cost of inventories is determined on the weighted average method.

i) Employee Benefits

Employee benefits include Provident Fund, Gratuity, compensated absences and
incentives:

i. Short-term Employee Benefits

Short-term employee benefit obligations are measured on an undiscounted basis and are
expensed as the related service is provided. A liability is recognized for the amount
expected to be paid e.g., under short-term cash bonus, if the Company has a present legal
or constructive obligation to pay this amount as a result of past service provided by the

employee, and the amount of obligation can be estimated reliably.

ii. Post-employment Obligations

Defined Contribution Plans

Provident fund: Contribution towards provident fund for certain employees is made to the
regulatory authorities, where the Company has no further obligations. Such benefits are
classified as defined contribution schemes as the Company does not carry any further
obligations, apart from the contributions made on a monthly basis.

Defined Benefit Plans

Liabilities towards Defined Benefit Schemes viz. Gratuity benefits are determined using
the Projected Unit Credit Method. Actuarial valuations under the Projected Unit Credit
Method are carried out at the Balance Sheet date. Actuarial gains and losses are recognised
immediately in the Balance Sheet with a corresponding effect in the Statement of Other
Comprehensive Income. Past service cost is recognised immediately in the Statement of
Profit and Loss.

iii. Other Long-term Employee Benefit Obligations

Compensated absences: The employees can carry-forward a portion of the unutilised
accrued compensated absences and utilise it in future service periods or receive cash
compensation on termination of employment. Since, the compensated absences do not fall
due wholly within twelve months after the end of the period in which the employees
render the related service and are also not expected to be utilised wholly within twelve
months after the end of such period, the benefit is classified as other long-term employee
benefit. The Company records an obligation for such compensated absences in the period
in which the employee renders the services that increase their entitlement. The obligation
is measured on the basis of independent actuarial valuation using the projected unit credit
method on the Balance Sheet date.

Changes in actuarial gains or losses are charged or credited to other comprehensive income
in the period in which they arise.

j) Foreign Currency Transactions and Translation

Transactions in foreign currencies are translated into the respective functional currencies
of Company at the exchange rates at the dates of the transactions or an average rate if the
average rate approximates the actual rate at the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies are translated into the
functional currency at the exchange rate at the reporting date. Non-monetary assets and
liabilities that are measured at fair value in a foreign currency are translated into the
functional currency at the exchange rate when the fair value was determined. NonÂ¬
monetary assets and liabilities that are measured based on historical cost in a foreign
currency are translated at the exchange rate at the date of the transaction. Exchange
differences are recognized in statement of profit and loss.

k) Financial Instruments

i. Recognition and Initial Measurement

Trade receivables issued are initially recognized when they are originated. All other
financial assets and financial liabilities are initially recognized when the Company becomes
a party to the contractual provisions of the financial instrument.

A financial asset or financial liability is initially measured at fair value plus transaction
costs that are directly attributable to its acquisition or issue for an item not at fair value
through profit and loss (FVTPL).

ii. Classification and Subsequent Measurement
Financial Assets

On initial recognition, a financial asset is classified as measured at

â¢ Amortised cost

â¢ FVTPL (fair value through statement of profit and loss)

Financial assets are not reclassified subsequent to their initial recognition, except if and in
the period the Company changes its business model for managing financial assets.

A financial asset is measured at amortised cost if it meets both of the following conditions
and is not designated as at FVTPL:

â¢ the asset is held within a business model whose objective is to hold assets to collect
contractual cash flows; and

â¢ the contractual terms of the financial asset give rise on specified dates to cash flows
that are solely payments of principal and interest on the principal amount
outstanding.

All financial assets not classified as measured at amortised cost as described above are
measured at FVTPL. This includes all derivative financial assets. On initial recognition, the
Company may irrevocably designate a financial asset that otherwise meets the
requirements to be measured at amortised cost as at FVTPL if doing so eliminates or
significantly reduces an accounting mismatch that would otherwise arise.

Financial Assets: Business Model Assessment

The Company makes an assessment of the objective of the business model in which a
financial asset is held at a portfolio level because this best reflects the way the business is
managed and information is provided to management. The information considered
includes:

â¢ the stated policies and objectives for the portfolio and the operation of those policies
in practice. These include whether management''s strategy focuses on earning
contractual interest income, maintaining a particular interest rate profile, matching
the duration of the financial assets to the duration of any related liabilities or expected
cash outflows or realising cash flows through the sale of the assets;

â¢ how the performance of the portfolio is evaluated and reported to the Company''s
management;

â¢ the risks that affect the performance of the business model (and the financial assets
held within that business model) and how those risks are managed;

â¢ the frequency, volume and timing of sales of financial assets in prior periods, the
reasons for such sales and expectations about future sales activity.

Financial assets that are held for trading or are managed and whose performance is
evaluated on a fair value basis are measured at FVTPL.

Financial Assets: Assessment whether Contractual Cash Flows are Solely Payments of
Principal and Interest

For the purposes of this assessment, ''principal'' is defined as the fair value of the financial
asset on initial recognition. ''Interest'' is defined as consideration for the time value of money
and for the credit risk associated with the principal amount outstanding during a particular
period of time and for other basic lending risks and costs (e.g. liquidity risk and
administrative costs), as well as a profit margin.

In assessing whether the contractual cash flows are solely payments of principal and
interest, the Company considers the contractual terms of the instrument. This includes
assessing whether the financial asset contains a contractual term that could change the
timing or amount of contractual cash flows such that it would not meet this condition. In
making this assessment, the Company considers:

â¢ contingent events that would change the amount or timing of cash flows;

â¢ terms that may adjust the contractual coupon rate, including variable interest rate
feature

â¢ prepayment and extension features; and

â¢ terms that limit the Company''s claim to cash flows from specified assets (e.g. nonÂ¬
recourse features).

Financial Assets: Subsequent Measurement and Gains and Losses
Financial assets at FVTPL: These assets are subsequently measured at fair value. Net gains
and losses, including any interest or dividend income, are recognized in statement of profit
and loss.

Financial assets at Amortised cost: These assets are subsequently measured at amortised
cost using the effective interest method. The amortised cost is reduced by impairment
losses. Interest income, foreign exchange gains and losses and impairment are recognized
in profit or loss. Any gain or loss on derecognition is recognized in statement of profit and
loss.

Financial Liabilities: Classification, Subsequent Measurement and Gains and Losses

Financial liabilities are classified as measured at amortised cost or FVTPL. A financial
liability is classified as at FVTPL if it is classified as held for trading, or it is a derivative or
it is designated as such on initial recognition. Financial liabilities at FVTPL are measured
at fair value and net gains and losses, including any interest expense, are recognized in
statement of profit and loss. Other financial liabilities are subsequently measured at
amortised cost using the effective interest method. Interest expense and foreign exchange
gains and losses are recognized in statement of profit and loss. Any gain or loss on
derecognition is also recognized in statement of profit and loss.

iii. Impairment of Financial Assets

The Company recognizes impairment loss on trade receivables using expected credit loss
model, which involves use of a provision matrix constructed on the basis of historical credit

loss experience as permitted under Ind AS 109. In case of other assets, the Company
determines if there has been a significant increase in credit risk of the financial asset since
initial recognition. If the credit risk of such assets has not increased significantly, an amount
equal to 12-month expected credit loss (ECL) is measured and recognized as loss
allowance. However, if credit risk has increased significantly, an amount equal to lifetime
ECL is measured and recognized as loss allowance.

iv. Derecognition
Financial Assets

The Company derecognizes a financial asset when the contractual rights to the cash flows
from the financial asset expire, or it transfers the rights to receive the contractual cash flows
in a transaction in which substantially all of the risks and rewards of ownership of the
financial asset are transferred or in which the Company neither transfers nor retains
substantially all of the risks and rewards of ownership and does not retain control of the
financial asset.

Financial Liabilities

The Company derecognizes a financial liability when its contractual obligations are
discharged or cancelled or expired.

The Company also derecognizes a financial liability when its terms are modified and the
cash flows under the modified terms are substantially different. In this case, a new financial
liability based on the modified terms is recognized at fair value. The difference between
the carrying amount of the financial liability extinguished and the new financial liability
with modified terms is recognized in statement of profit and loss.

v. Offsetting

Financial assets and financial liabilities are offset and the net amount presented in the
balance sheet when, and only when, the Company currently has a legally enforceable right
to set off the amounts and it intends either to settle them on a net basis or to realise the
asset and settle the liability simultaneously.

l) Income Tax

The income tax expense or credit for the period is the tax payable on the current period''s
taxable income based on the applicable income tax rate for applicable jurisdiction adjusted
by changes in deferred tax assets and liabilities attributable to temporary differences and
to unused tax losses.

i. Current Tax

Current tax comprises the expected tax payable or receivable on the taxable income or loss
for the year and any adjustment to the tax payable or receivable in respect of previous
years. The amount of current tax reflects the best estimate of the tax amount expected to be
paid or received after considering the uncertainty, if any, related to income taxes. It is
measured using tax rates (and tax laws) enacted or substantively enacted by the reporting
date. Company has used judgement, to determine whether each tax treatment should be
considered separately or whether some can be considered together. The decision based on
the approach which provides better predictions of the resolution of the uncertainty.

Company has assumed that the taxation authority will have full knowledge of all relevant
information while examining and has considered the probability of the relevant taxation
authority accepting the tax treatment and the determination of taxable profit (tax loss), tax
bases, unused tax losses, unused tax credits and tax rates would depend upon the
probability.

Current tax assets and current tax liabilities are offset only if there is a legally enforceable
right to set off the recognized amounts, and it is intended to realise the asset and settle the
liability on a net basis or simultaneously.

ii. Deferred Tax

Deferred tax is recognized in respect of temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes and the corresponding
amounts used for taxation purposes. Deferred tax is also recognized in respect of carried
forward tax losses and tax credits.

Deferred tax assets are recognized for all deductible temporary differences and unused tax
losses only if it is probable that future taxable amounts will be available to utilise those
temporary differences and losses.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset
current period tax assets and liabilities and when the deferred tax balances relate to the
same taxation authority. Current tax assets and tax liabilities are offset where the entity has
a legally enforceable right to offset and intends either to settle on a net basis, or to realise
the asset and settle the liability simultaneously.

Current period tax and deferred tax is recognized in the statement of profit and loss, except
to the extent that it relates to items recognized in other comprehensive income or directly
in equity. In this case, the tax is also recognized in other comprehensive income or directly
in equity, respectively.

Deferred tax assets are recognized to the extent that it is probable that future taxable profits
will be available against which they can be used. Therefore, in case of a history of recent
losses, the Company recognizes a deferred tax asset only to the extent that it has sufficient
taxable temporary differences or there is convincing other evidence that sufficient taxable
profit will be available against which such deferred tax asset can be realised. Deferred tax
assets - unrecognized or recognized, are reviewed at each reporting date and are
recognized/ reduced to the extent that it is probable/ no longer probable that the related
tax benefit will be realised.

Minimum Alternative Tax (MAT) credit is recognized as an asset only when and to the
extent there is convincing evidence that the company will pay normal income tax during
the specified period. Such asset is reviewed at each Balance Sheet date and the carrying
amount of the MAT credit asset is written down to the extent there is no longer a
convincing evidence to the effect that the Company will pay normal income tax during the
specified period.

m) Revenue from Contracts with Customers

Revenue from contracts with customers is recognised when control of the goods or services
are transferred to the customer at an amount that reflects the consideration entitled in
exchange for those goods or services. The Company is generally the principal as it typically
controls the goods or services before transferring them to the customer.

Revenue is measured at the amount of consideration which the Company expects to be
entitled to in exchange for transferring distinct goods or services to a customer as specified
in the contract, excluding amounts collected on behalf of third parties (for example taxes
and duties collected on behalf of the government). Consideration is generally due upon
satisfaction of performance obligations and a receivable is recognised when it becomes
unconditional.

Generally, the credit period varies from customer to customer or delivery of goods or
completion of services as the case may be. The Company provides volume rebates to
certain customers once the quantity of products purchased during the period exceeds a
threshold specified and also accrues discounts to certain customers based on customary
business practices which is derived on the basis of crude price volatility and various market
demand - supply situations. Consideration are determined based on its most likely
amount.

n) Earnings per Share

a) Basic earnings per share is calculated by dividing the net profit or loss after tax for the
year attributable to equity shareholders by the weighted average number of equity
shares outstanding during the year.

b) For the purpose of calculating diluted earnings per share, the net profit or loss after
tax for the period attributable to equity shareholders and the weighted average
number of shares outstanding during the period is adjusted for the effects of all
dilutive potential equity shares.

Mar 31, 2024

1. Significant Accounting Policies

1.1 Basis of preparation of financial statements

The financial statements have been prepared and presented in accordance with Indian
Accounting Standards (âInd AS'') notified under Section 133 of the Companies Act, 2013, read
together with the Companies (Indian Accounting Standards) Rules, 2015.

These financial statements have been prepared and presented under the historical cost
convention, on the accrual basis of accounting except for certain financial assets and financial
liabilities that are measured at fair values at the end of each reporting period, as stated in the
accounting policies set out below. The accounting policies have been applied consistently over
all the periods presented in these financial statements.

1.2 Current / Non - Current Classification

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 under Ind AS and in the Schedule III to the
Act. Based on the nature of the services and their realisation in Cash and Cash Equivalents,
the Company has ascertained its operating cycle as twelve months for the purpose of current
or non-current classification of assets and liabilities.

1.3

a) Property, Plant and Equipment
Measurement at recognition:

An item of property, plant and equipment that qualifies as an asset is measured on initial
recognition at cost. Following initial recognition, items of property, plant and equipment are
carried at its cost less accumulated depreciation and accumulated impairment losses. The
cost of an item of property, plant and equipment includes taxes, duties, freight and other
incidental expenses but net of Cenvat availed.

Depreciation:

Depreciation on each part of an item of property, plant and equipment is provided on a proÂ¬
rata basis using the Straight Line Method based on the useful life of the asset as estimated
by the management and is charged to the statement of Profit and Loss as per the
requirement of Schedule II of the Companies Act, 2013. The estimate of the useful life of
the assets has been assessed based on technical advice which considers the nature of the
asset, the usage of the asset, expected physical wear and tear, and maintenance support,
etc.

b) Revenue Recognition

All income and expenditure have a material bearing on the financial statements and are
recognised on accrual.

Operational income represents income earned from activities incidental to the business and
is recognised when the right to receive the income is established as per the terms of the
contract.

Interest income on deposits, securities and loans is recognised at the agreed rate on time
proportion basis.

Dividend income is recognised when the Company''s right to receive payment is established.
During the earlier periods, the Company has undertaken Work Contract activities and
Its income are recognized based on actual work completion.

c) Financial Instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a
financial liability or equity instrument of another entity.

Financial Assets

The Company recognizes a financial asset in its Balance Sheet when it becomes party to
the contractual provisions of the instrument. All financial assets are recognized initially at
fair value, plus in the case of financial assets not recorded at fair value through profit and
loss (FVTPL), transaction costs that are attributable to the acquisition of the financial asset.

Where the fair value of a financial asset at initial recognition is different from its transaction
price, the difference between the fair value and the transaction price is recognized as a gain
or loss in the Statement of Profit and Loss at initial recognition if the fair value is determined
through a quoted market price.

Financial Liabilities

The Company recognizes a financial liability in its Balance Sheet when it becomes party to
the contractual provisions of the instrument. All financial liabilities are recognized initially at
fair value minus, in the case of financial liabilities not recorded at fair value through profit
and loss (FVTPL), transaction costs that are attributable to the acquisition of the financial
liability.

Where the fair value of a financial liability at initial recognition is different from its
transaction price, the difference between the fair value and the transaction price is
recognised as a gain or loss in the Statement of Profit and Loss at initial recognition if the
fair value is determined through a quoted market price.

d) Fair Value

The Company measures financial instruments at fair value in accordance with the
accounting policies mentioned. 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. _

e) Investment

Investments that is intended to be held for more than a year from the date of acquisition are
classified as long term investment and are carried at cost less any provision for permanent
diminution in value. On disposal of investment, the difference between its carrying and net
disposal proceeds is charged or credited to the statement of profit and loss.

Mar 31, 2018

Corporate Information

Kratos Energy & Infrastructure Limited (the ''Company'') is a public limited Company domiciled and incorporated in India under the Companies Act. The registered office of the Company is located at 317, Maker Chamber V, 221, Nariman Point, Mumbai, India.

The company''s equity shares are listed on BSE Ltd. in India. The Company''s main business activity is consultancy in various fields.

1. Significant Accounting Policies

1.1 Basis of preparation of financial statements

The financial statements have been prepared and presented in accordance with Indian Accounting Standards (''Ind AS'') notified under Section 133 of the Companies Act, 2013, read together with the Companies (Indian Accounting Standards) Rules, 2015.

For all periods up to and including the year ended 31^st March, 2017, the Company had prepared its financial statements in accordance with Accounting Standards notified under the Section 133 of the Companies Act, 2013, read together with Rule 7 of the Companies (Accounts) Rules, 2014 (''Previous GAAP''). Detailed explanation on how the transition from previous GAAP to Ind AS has affected the Company''s Balance Sheet, financial performance and cash flows is shown in the Notes to Accounts.

These financial statements have been prepared and presented under the historical cost convention, on the accrual basis of accounting except for certain financial assets and financial liabilities that are measured at fair values at the end of each reporting period, as stated in the accounting policies set out below. The accounting policies have been applied consistently over all the periods presented in these financial statements.

1.2 Current / Non - Current Classification

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 under Ind AS and in the Schedule III to the Act. Based on the nature of the services and their realization in Cash and Cash Equivalents, the Company has ascertained its operating cycle as twelve months for the purpose of current or non-current classification of assets and liabilities.

1.3

a) Property, Plant and Equipment Measurement at recognition:

An item of property, plant and equipment that qualifies as an asset is measured on initial recognition at cost. Following initial recognition, items of property, plant and equipment are carried at its cost less accumulated depreciation and accumulated impairment losses. The cost of an item of property, plant and equipment includes taxes, duties, freight and other incidental expenses but net of Cenvat availed.

Depreciation:

Depreciation on each part of an item of property, plant and equipment is provided ona prorate basis using the Straight Line Method based on the useful life of the asset as estimated by the management and is charged to the statement of Profit and Loss as per the requirement of Schedule II of the Companies Act, 2013. The estimate of the useful life of the assets has been assessed based on technical advice which considers the nature of the asset, the usage of the asset, expected physical wear and tear, and maintenance support, etc.

b) Revenue Recognition

All income and expenditure have a material bearing on the financial statements and are recognized on accrual.

Operational income represents income earned from activities incidental to the business and is recognized when the right to receive the income is established as per the terms of the contract.

Interest income on deposits, securities and loans is recognized at the agreed rate on time proportion basis.

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

c) Financial Instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

Financial Assets

The Company recognizes a financial asset in its Balance Sheet when it becomes party to the contractual provisions of the instrument. All financial assets are recognized initially at fair value, plus in the case of financial assets not recorded at fair value through profit and loss (FVTPL), transaction costs that are attributable to the acquisition of the financial asset.

Where the fair value of a financial asset at initial recognition is different from its transaction price, the difference between the fair value and the transaction price is recognized as a gain or loss in the Statement of Profit and Loss at initial recognition if the fair value is determined through a quoted market price.

Financial Liabilities

The Company recognizes a financial liability in its Balance Sheet when it becomes party to the contractual provisions of the instrument. All financial liabilities are recognized initially at fair value minus, in the case of financial liabilities not recorded at fair value through profit and loss (FVTPL), transaction costs that are attributable to the acquisition of the financial liability.

Where the fair value of a financial liability at initial recognition is different from its transaction price, the difference between the fair value and the transaction price is recognized as a gain or loss in the Statement of Profit and Loss at initial recognition if the fair value is determined through a quoted market price.

d) Fair Value

The Company measures financial instruments at fair value in accordance with the accounting policies mentioned. Fair value is the price that would be received to sellan asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

e) Investment

Investments that is intended to be held for more than a year from the date of acquisition are classified as long term investment and are carried at cost less any provision for permanent diminution in value. On disposal of investment, the difference between its carrying and net disposal proceeds is charged or credited to the statement of profit and loss.

f) Provisions and Contingent Liabilities

The Company creates a provision when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is 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 a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

g) Income Taxes Current Taxes

Income tax expense for the year comprises of current tax and deferred tax. Income Tax is recognized in Statement of Profit and Loss, except to the extent that it relates to items recognized in the comprehensive income or in equity. In which case, the tax is also recognized in other comprehensive income or equity.

Current tax is the expected tax payable/receivable on the taxable income/ loss for the year using applicable tax rates at the Balance Sheet date, and any adjustment to taxes in respect of previous years. Management periodically evaluates positions taken in tax return with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate

Deferred Taxes

Deferred tax is recognized in respect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the corresponding tax base used for computation of taxable Income.

A deferred tax liability is recognized based on the expected manner of realization or settlement of the carrying amount of assets and liabilities, using tax rates enacted, or substantively enacted, by the end of the reporting period. Deferred tax assets are recognized only to the extent that it is probable that future taxable profits will be available against which the asset can be utilized. Deferred tax assets are reviewed at each reporting date and reduced to the extent that it is no longer probable that the related tax benefit will be realised.

Deferred tax relating to items recognized outside profit or loss is recognized outside profit or loss (either in OCI or in equity).

Minimum Alternate Tax

MAT (Minimum Alternate Tax) is recognized as an asset only when and to the extent it is probable evidence that the Company will pay normal income tax and will be able to utilize such credit during the specified period. The credit available under the Act in respect of MAT paid is recognized as an asset only when and to the extent there is convincing evidence that the company will pay normal income-tax during the period for which the

MAT credit can be carried forward for set-off against the normal tax liability. MAT credit recognized as an asset is reviewed at each Balance Sheet date and written-down to the extent the aforesaid convincing evidence no longer exists.

h) Employee Benefits Short-term employee benefits

Employee benefits payable wholly within twelve months of availing employee service are classified as short-term employee benefits. This benefit includes salaries and wages, bonus and ex- gratia. The undiscounted amount of short-term employee benefits to be paid in exchange of employees'' services are recognized in the period in which the employee renders the related service.

i) Earnings per share (EPS)

In determining Earnings per Share, the Company considers net profit after tax and includes post tax effect of any exceptional item. Number of shares used in computing basic earnings per share is the weighted average number of the shares, excluding the shares owned by the Trust, outstanding during the period. Dilutive earning per share is computed and disclosed after adjusting effect of all dilutive potential equity shares, if any except when result will be anti - dilutive. Dilutive potential equity Shares are deemed converted as at the beginning of the period, unless issued at a later date.

j) Provisions, contingent liabilities and contingent assets

The Company creates a provision where there is present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible or a present obligation that may, but probably will not require an outflow of resources. When there is a possible obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made. Contingent Assets are disclosed only when an inflow of economic benefit is probable.

k) Cash and cash equivalents

Cash and cash equivalents comprise cash and cash on deposit with banks and corporations. The Company considers all highly liquid investments with a remaining maturity at the date of purchase of three months or less and that are readily convertible to known amounts of cash to be cash equivalents.

1.4 First Time Adoption of Ind AS

The Company has adopted Ind AS with effect from 01 April 2016 with comparatives being restated. Accordingly, the impact of transition has been provided in the Retained earnings as at 01 April 2016. The figures for the previous period have been restated, regrouped and reclassified wherever required to comply with the requirements of Ind AS and Schedule III.

Mar 31, 2013

A) Basis of Accounting

The financial statements have been prepared under historical cost convention on an accrual basis & comply with the Accounting Standards referred to in section 211 (3C) of the Companies Act, 1956. (Except provision for retirement benefits of the Employee, Leave Salary & Bonus which are recorded on Cash Basis).

b) Revenue Recognition

All income and expenditure have a material bearing on the financial statements are recognised on accrual basis except Interest on Government Securities and Dividend which have been accounted on receipt basis.

c) Fixed Assets

Fixed Assets are stated at cost of acquisition or construction less accumulated depreciation. The cost of fixed assets includes taxes, duties, freight and other incidental expenses but net of Cenvat availed related to acquisition and installation of the respective fixed assets.

d) Impairment of Fixed Assets:

At the end of each year, the Company determines whether a provision should be made for impairment loss on fixed assets by considering the indication that an impairment loss may have occurred in accordance with Accounting Standard 28 on "Impairment of Assets" issued by the ICAI. Where the recoverable amount of any fixed assets is lower than its carrying amount, a provision for impairment loss on fixed assets is made for the difference

e) Depreciation

Depreciation on Fixed Assets has been provided on ''Written Down Value Method'' as per the rates and in the manner specified in Scheduled XIV of the Companies Act, 1956. Depreciation on Additions / deletions has been accounted on pro-rata basis.

f) Valuation of Inventories

As informed by management there is no stock in hand in existence at the year end.

g) Investment

Investments that is intended to be held for more than a year from the date of acquisition are classified as long term investment and are carried at cost less any provision for permanent diminution in value.

h) Provisions and Contingent Liabilities

The Company creates a provision when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is 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 a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

i) Accounting for Taxation on Income :

Current Taxes

Provision for current income-tax is recognized in accordance with the provisions of Indian Income- tax Act, 1961 and is made annually based on the tax liability after taking credit for tax allowances and exemptions. No provision for taxation has been made under section 115JB of the Income Tax Act, 1961, even though there is taxable income earned for the year, as there are carried forward losses under the Income Tax Act,1961 of the previous years which are brought forward for set off against the current year''s income.

Deferred Taxes

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to timing differences that result between the profits offered for income taxes and the profits as per the financial statements. Deferred tax assets and liabilities are measured using the tax rates and the tax laws that have been enacted or substantially enacted at the balance sheet date. The effect of a change in tax rates on deferred tax and assets or liabilities are recognized in the period that includes the enactment date. Deferred tax Assets are recognized only to the extent there is reasonable certainty that the assets can be realized in the future.

Mar 31, 2010

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