1. NATURE OF OPERATIONS

Ahluwalia Contracts (India) Limited (hereinafter referred to as "the Company") is a Public Ltd. Company in India and incorporated under the provisions of the Companies Act, 1956. The Company is primarily engaged in the business of construction activities. The company has also diversified into Built Operate Transfer (BOT) operations by building and operating commercial complex under concession service arrangements.

2. SIGNIFICANT ACCOUNTING POLICIES

(A) BASIS OF brPARATION OF FINANCIAL STATEMENTS

(i) Basis of Preparation :- The financial statements of the company have been brpared in accordance with generally accepted accounting principles in India (Indian GAAP). The company has brpared these financial statements to comply in all material respects with the accounting standards notified under section 133 of the Companies Act, 2013 read together with paragraph 7 of the Companies (Accounts) rules, 2014. The financial statements have been brpared under the historical cost convention on an accrual basis except in case of assets for which revaluation is carried out. The accounting policies adopted in the brparation of financial statements are consistent with those of brvious year, except for the change in Accounting Policy as explained below.

(ii) Change in Accounting Policy :- Till the year ended March 31, 2014, schedule XIV to the Companies Act 1956, brscribed requirements concerning debrciation of fixed assets. From the current year, Schedule XIV has been replaced by Schedule II to the Companies Act, 2013. The applicability of Schedule II has resulted in the following changes related to debrciation of fixed assets. Unless stated otherwise, the impact mentioned for the current year is likely to hold good for future years also.

(iii) Accounting for Additional Debrciation on Account of Revaluation of Assets :- Till year ended March 31, 2014, the Guidance Note on Treatment of Reserve Created on Revaluation of Fixed Assets issued by the ICAI allowed companies to transfer an amount equivalent to the additional debrciation arising due to upward revaluation of fixed assets from revaluation reserve to the statement of profit and loss. Accordingly, the company was transferring an amount equivalent to additional debrciation arising due to upward revaluation of building from  revaluation reserve to the statement of profit and loss. In contrast, Schedule II to the Companies Act, 2013 applicable from the current year, states that debrciable amount of an asset is the cost of an asset or other amount substituted for cost. Hence, in case of revalued assets, debrciation computed on the revalued amount needs to be charged to the statement of profit and loss, without any recoupment from revaluation reserve. Consequently, to comply with the Schedule II requirement, the company has discontinued the practice of recouping the impact of additional debrciation from revaluation reserve. The management has decided to apply the revised accounting policy prospectively from accounting periods commencing on or after April 1, 2014.

Had the company continued its earlier policy of recouping the additional debrciation arising due to upward revaluation of fixed assets from revaluation assets, profits for the current year would have been higher by Rs.1.68 Lacs. However, the change in accounting policy did not have any impact on reserves and surplus as at March 31, 2015.

(iv) The company generally follows Mercantile System of accounting and recognizes items of Income and Expenditure on accrual basis except:-  Works contract tax deducted at source included in advances by clients are charged to statement of profit and loss in the year of deduction and the refunds, if any, are accounted for in the year of receipt.

(v) Expenditure incurred in respect of additional costs/ delays is accounted in the year in which they are incurred. Claims made in respect thereof are accounted as work receipts in the year of receipt of arbitration award or acceptance by client or evidence of acceptance received from the client.

(B) USE OF ESTIMATES

The brparation of financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the management's best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets and liabilities in future periods

(C) REVENUE RECOGNITION

(i) Revenue recognition and valuation of the contract Work In Progess are as per Accounting Standard - 7. Work receipts are taken on percentage completion method, stated on the basis of physical measurement of work actually completed at the balance sheet date, taking into account the contractual price and revision thereto. The site mobilisation expenditure is apportioned over the period of contract in proportion to value of work done. Foreseeable losses are accounted for when they are determined except to the extent they are expected to be recovered through claims brsented or to be brsented to the customers or in arbitration.

(ii) In respect of Real Estate projects the sales are accounted for at the time of handing over the possession of the flat / space to the buyers.

(iii) Stage / percentage of completion is determined with reference to the certificates given by the Clients / Consultants appointed by Clients as well as on the billing schedule agreed with them for the value of work done during the year.

(iv) Dividend is recognized when the shareholders' right to receive payment is established by the balance sheet date.

(v) Interest income is recognized on a time proportion basis taking into account the amount outstanding and the applicable interest rate.

(vi) Rent and other related services are accounted for accrual basis.

(D) FIXED ASSETS

(i) Fixed Assets are stated at Cost of acquisition. Fixed Assets acquired under Hire Purchase Schemes are capitalised at their principal value and hire (finance) charges are charged off as revenue expenditure.

Borrowing cost relating to acquisition of fixed assets which take substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready to be put to use.

(ii) Company's Land &Buildings have been revalued as on 31-03-1992 by Government approved registered valuer on the basis of their brvailing day value. Difference between the total value of these assets on revaluation and written down value as on 31.03.1992 of f 10,691,246/- had been credited to revaluation reserve account.

(E) DEbrCIATION / AMORTISATION

(i) Debrciation has been provided on straight line method on pro-rata basis in accordance with Schedule II of the Companies Act, 2013.

(ii) The debrciation on Plant & Machinery (shuttering material) has been provided @ 25% on pro-rata basis based on technical estimates made by the management

(iii) Lease hold land is amortised over the period of lease.

(iv) Effective from April 01, 2014, the company has charged debrciation based on the revised remaining useful life of the assets as per the requirement of schedule II of the Companies Act, 2013. Due to above, debrciation charged for the year ended March 31, 2015 is higher by f 885.36 lacs. Further based on transitional provision provided in note 7(b) of schedule II of the Companies Act, 2013, an amount of f 244.97 lacs (net of deferred tax) has been adjusted with retained earnings.

(F) INTANGIBLES

Software costs relating to acquisition of initial software licence fee and installation cost are capitalized in the year of purchase and amortized on straight line basis over its useful life, which is considered to be of a period of five years.

(G) IMPAIRMENT OF ASSETS

The company makes an assessment of any indicator that may lead to impairment of assets on an annual basis. An impairment loss is recognised wherever the carrying amount of the assets exceeds its recoverable amount. The recoverable amount is greater of the net selling price and value in use. In assessing value in use, valuation is done by the estimated future cash flows (discounted to their brsent value, based on an appropriate discounting factor) are used. Impairment losses are recognised in the statement of Profit and Loss.

(H) BORROWING COST

Borrowing cost includes interest and amortization of ancillary costs incurred in connection with the arrangement of borrowings. Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur.

(I) INVESTMENTS

Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long  term investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long term investments are carried at cost. However, provision for diminution in value is made to recognize a decline, other than temporary, in the value of such investments.

(J) INVENTORIES

(i) Inventories are valued at cost or net realisable value whichever is lower.

(ii) Unbilled revenue and uncertified bills are considered as Work-in-progress which is valued on the basis of expenditure directly related to project.

(K) EMPLOYEE BENEFITS

(a) Short-term employee benefits:

All employee benefits payable wholly within twelve months of rendering the service are classified as short-term employee benefits. These benefits include compensated absences such as paid annual leave.The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees is recognized during the period.

(b) Post-employment benefits:

(i) Retirement benefits in the form of the Company's contribution to Provident Fund etc. are charged to the statement of Profit & Loss of the year when the contributions to the respective funds are due.

(ii) The Company's gratuity benefit scheme is a defined benefit plan. The Company's net obligation in respect of the gratuity benefit scheme is calculated by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its brsent value, and the fair value of any plan assets is deducted.The brsent value of the obligation under such defined benefit plan is determined based on actuarial valuation using the projected unit credit method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

The obligation is measured at the brsent value the estimated future cash flows. The discount rates used for determining the brsent value of the obligation under defined benefit plans, are based on the market yields on government securities as at the balance sheet date.

When the calculation results in a benefit to the company, the recognized asset is limited to the net total of any unrecognized actuarial losses and past service costs and the brsent value of any future refunds from the plan or reductions in future contributions to the plan.

Actuarial gains and losses are recognized immediately in the statement of profit & loss.

(L) FOREIGN EXCHANGE TRANSACTIONS

(i) Transactions arising in Foreign Currency are converted at the exchange rates brvailing as on date of transactions. Monetary Assets & Liabilities denominated in Foreign Currencies are restated at year end exchange rates. All exchange difference arising on conversion are charged to statement of Profit & Loss.

(ii) Forward Exchange Contracts (Derivative Instruments) not intended for trading or speculation purposes

The Company uses derivative financial instruments including forward exchange contracts to hedge its risk associated with foreign currency fluctuations. The brmium or discount arising at the inception of forward exchange contracts is amortized as expense or income over the life of the contract. Exchange differences on such contracts are recognized in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or as expense for the year.

(M) CONCESSION ARRANGEMENT

Judgments and estimates are continually evaluated and are based on historical experience and other factors, including expectations of future events that are reasonable under the circumstances.

The company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal to the related actual results. Significant assumptions used in accounting for the intangible asset are given below:

The intangible assets are measured at cost, i.e. fair value of the construction service. The exchange of construction services for an intangible asset is regarded as a transaction that generates revenue and costs, which will be recognized by reference to the stage of completion of the Construction. The intangible asset is assumed to be received only upon completion of construction and recognized on such completion. Until then, the expenditure incurred on this project will be debited as "Intangible Assets under development" under the main head of "Fixed Assets". The value of the intangible asset shall be amortized over the estimated useful life.

The carrying value of intangible asset is reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable.

(N) INCOME TAXES

Tax expense comprises current and deferred tax. Current income-tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act 1961 enacted in India. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.

Deferred income taxes reflect the impact of timing differences between taxable income and accounting income originating during the current year and reversal of timing difference for the earlier years. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted at the reporting date.

Deferred tax liabilities are recognized for all taxable timing differences. Deferred tax assets are recognized for deductible timing differences only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. In situations where the Company has unabsorbed debrciation or carry forward tax losses, all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits.

(O) PROVISIONS

A provision is recognized when an enterprise has a brsent obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its brsent value and are determined based on best management estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current management estimates.

(P) LEASES

(i) Where the Company is lessee,Finance leases, which effectively transfer to the Company substantially all the risks and benefits incidental to ownership of the leased items, are capitalized at the lower of the fair value and brsent value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between the finance charges and reduction of the lease liability based on the implicit rate of return. Finance charges are charged directly against income. Lease management fees,  legal charges and other initial direct costs are capitalized.

If there is no reasonable certainty that the Company will obtain the ownership by the end of the lease term, capitalized leased assets are debrciated over the shorter of the estimated useful life of the asset or the lease term.

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item are classified as operating leases. Operating lease payments are recognized as an expense in the statement of Profit & Loss on a straight-line basis over the lease term.

(ii) Where the company is lessor, assets subject to operating leases are included under fixed assets or current assets as appropriate. Rent (lease) income is recognized in the statement of Profit and Loss on a straight-line basis over the lease term. Direct costs, including debrciation are recognized as an expense in the statement of profit and loss.

(Q) EARNINGS PER SHARE

Basic earnings per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders (after deducting brference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the year. For the purpose of calculating Diluted Earnings per Share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential Equity shares.

(R) CASH AND CASH EQUIVALENTS

Cash and cash equivalents for the purpose of cash flow statement comprise cash at bank, cash in hand and short term investments with an original maturity of three months or less.

(S) CONTINGENT LIABILITY

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a brsent obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence in the financial statements.

1. Pursuant to Section 135 of the Companies Act, 2013 and rule made thereunder, the Board of Directors has constituted a Corporate Social Responsibility (CSR) Committee. The Committee has adopted a Corporate Social Responsibility Policy. As per Section 135(5) of the Act, the Company needs to ensure at least 2% of the average net profit of brceding three financial years to be spent on CSR activities as mentioned in CSR Policy. However, due to losses incurred in past,the average result of brceding three financial years (2011-12, 2012-13 and 2013-14) is in loss, consequently the Company is not required to spend any amount on CSR for the current year.

2. brVIOUS YEAR FIGURES

The company has reclassified brvious year figures to conform to this year's classification.

As per our report of even date annexed

For ARUN K. GUPTA & ASSOCIATES

Firm Registeration No. 000605N

CHARTERED ACCOUNTANTS

BIKRAMJIT AHLUWALIA

Chairman & Managing Director (Chief Executive Officer)

DIN No. 00304947

SHOBHIT UPPAL

Dy. Managing Director

DIN No. 00305264

SACHIN KUMAR

Partner

M.No. 503204

VIPIN KUMAR TIWARI

G.M. (Corporate) & Company Secretary ACS.10837

SATBEER SINGH

Chief Financial Officer PAN: ARLPS6573L

Place : New Delhi

Date : 21-05-2015