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Auditor Report of Ansal Properties & Infrastructure Ltd.

Mar 31, 2018

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of Ansal Properties & Infrastructure Limited (''the Company''), which comprise the balance sheet as at March 31, 2018, the statement of profit and loss (including other comprehensive income), the cash flow statement and the statement of changes in equity for the year then ended and a summary of the significant accounting policies and other explanatory information (herein after referred to as âInd AS financial statementsâ).

Management''s Responsibility for the Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act read with relevant Rules issued thereunder.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2018, and its loss ( including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.

Emphasis of Matter

We draw attention to:

(i) Note No. 41 to the standalone Ind AS financial statements wherein the Company had claimed a cumulative exemption of Rs. 3,448 lakhs up to the period ended March 31, 2011, continuing up to the end of current period, under section 80 IA of the Income Tax Act, 1961 being tax profits arising out of sale of Industrial Park units, pending the notification of the same by Central Board of Direct Taxes (Competent Authority). The Competent Authority rejected the initial application against which the Company has filed review petition. The Company has taken opinion from a senior counsel that its review petition satisfies all the conditions specified in the said Scheme of Industrial Park under Industrial Park (Amendment) Scheme, 2010. No exemption is claimed during the current year as there are no sales of industrial park units.

(ii) Note No. 64 to the standalone Ind AS financial statements wherein the Company is carrying project inventory of Rs. 11,043 lakhs for one of its Group Housing projects. The Company had applied to the Authority for developing the project on the basis of revised Scheme announced by the Authority for which approval has been received envisaging developing the project on a smaller piece of land equivalent to the amount paid and surrender balance project land subject to certain conditions. Pending final decision of the Authority in the matter and fulfillment of conditions precedent, the management is of the view that there is no impairment in the value of land/ project and we have relied on management contention.

(iii) Note No. 58 to the standalone Ind AS financial statements wherein the Company pursuant to Orders of the Company Law Board {CLB} dated the December 30, 2014 and April 28, 2016, the Company was required to refund all its public deposits as per the schedule. Further, as per National Company Law Tribunal Order dated January 13, 2017, in response to an application filed by the Company, as amended/extended from time to time, the Company was required to repay Rs 400 lakhs per month as per revised schedule. As on March 31, 2018 an amount of Rs 1,530 lakhs is overdue on account of what was payable as per schedule.

(iv) Note No. 45 to the standalone Ind AS financial statements wherein the Company Prescribed Norms issued by Reserve Bank of India (RBI) and exercise of powers conferred on the Bank under Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SREAFAESI), two lender banks of the Company have classified the bank accounts of the Company as Non - Performing Assets (NPA) and have demanded the entire amount of Rs. 19,246 lakhs due towards the banks outstanding excluding interest and penal charges. As explained to us, the Company is not in agreement with the contention of the lender banks and is in discussions with the lender banks to resolve this matter.

Our opinion is not qualified in respect of the above matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of section 143(11) of the Act, we give in the Annexure A, a statement on the matters specified in the paragraph 3 and 4 of the Order.

2. As required by Section 143(3) of the Act, we report that:

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

c) The balance sheet, the statement of profit and loss (including other comprehensive income), the statement of cash flows and the statement of changes in equity dealt with by this Report are in agreement with the books of account;

d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act, read with relevant Rules issued thereunder;

e) On the basis of the written representations received from the directors as on March 31, 2018 and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018 from being appointed as a director in terms of Section 164 (2) of the Act;

f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ; and

g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigation on its financial position as referred to in Note 39 to the standalone Ind AS financial statements.

ii. The Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses;

There has been no delay in transferring amounts required to be transferred to the Investor Education and Protection Fund by the Company.

Annexure A to the Independent Auditor''s Report to the Members of Ansal Properties & Infrastructure Limited dated May 30, 2018 on its Standalone Ind AS Financial Statements.

Report on the matters specified in paragraph 3 of the Companies (Auditor''s Report) Order, 2016 (âthe Order'') issued by the Central Government of India in terms of section 143(11) of the Companies Act, 2013 (âthe Actâ) as referred to in paragraph 1 of âReport on Other Legal and Regulatory Requirements'' section.

i. (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) The Company has a phased program of physical verification of its fixed assets which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. All the fixed assets identified during the year for verification have not been physically verified by the management. However, discrepancies noticed during physical verification have been recorded and accounted for in the books of account to the extent of verification carried out.

(c) In our opinion, and according to the information and explanations given to us, the title deeds of immovable properties are held in the name of the Company.

ii. The Management has conducted physical verification of inventory at reasonable intervals during the year and no material discrepancies were noticed on such physical verification.

iii. The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under section 189 of the Act. Accordingly, provisions of clause 3(iii) of the Order are not applicable.

iv. In our opinion and according to the information and explanations given to us, provisions of section 185 and 186 of the Act in respect of loans to directors including entities in which they are interested and in respect of loans and advances given, investments made and, guarantees, and securities given have been complied with by the Company.

v. In the previous year, the Company had filed with Company Law Board (CLB) a scheme for extension of time for repayment of its fixed deposits. CLB had approved extension of time for repayment of fixed deposits with certain conditions vide Order dated December 30, 2014 and April 28, 2016 under sections 74(2) of the Act. As per National Company Law Tribunal Order dated January 13, 2017, in response to an application filed by the Company, as amended/extended from time to time, the Company was required to repay Rs. 400 lakhs per month as per revised schedule. As on March 31, 2018 an amount of Rs 1,530 lakhs is overdue on account of what was payable as per schedule. Further, provisions of section 73 to 76 or any other relevant provisions of the Act, whichever is applicable have been complied with by the Company [refer para (iii) of Emphasis of Matter para of main independent auditors report].

vi. The Central Government has prescribed for maintenance of Cost Accounting records pursuant to the requirements of sub-section (1) of section 148 of the Act with regard to the activities of the Company. The Company is in the process of making and maintaining those records. However, we are not required to carry out a detailed examination of the same.

vii. a. According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is generally irregular in depositing the undisputed statutory dues including provident fund, employees state insurance, income tax, sales tax, service tax, goods and service tax (GST), duty of customs, duty of excise, value added tax, cess, professional tax and other material statutory dues, as applicable, with the appropriate authorities, during the year. However, there are no such undisputed statutory dues payable for a period of more than six months from the date they became payable as at March 31, 2018 except income tax payable of Rs. 1366.92 lakhs, Tax Deducted at Source of Rs. 388.03 lakhs and Works contract tax of Rs. 62.52 lakhs.

(b) According to the information and explanations given to us and as per the books and records examined by us, there are no dues of income tax, sales tax, value added tax, service tax, goods and service tax (GST), duty of customs, duty of excise which have not been deposited with the appropriate authorities on account of any dispute and the forum where the dispute is pending, are as under:

S. No.	Name of Statute	Nature of Dues	Amount (Rs. in lacs)	Assessment Year	Forum where pending
1	Sales Tax Act	Delhi Sales Tax	4.47	1999-2000	Assessing Authority Special Zone, Delhi
2	Sales Tax Act	UP Sales Tax	0.29	2006-2007	Additional Commissioner (Appeal), Ghaziabad
3	Sales Tax Act	UP Sales Tax	1.08	2008-2009	Commercial Tax Tribunal Ghaziabad
4	Local Area Development Tax Act	Local Area Development Tax	8.73	2003-2004	Joint Excise & Taxation Commissioner (Appeal), Gurgaon
5	UP Trade Tax Act	UP Sales Tax	0.06	2007-2008	Additional Commissioner (Appeal), Ghaziabad
6	UP Trade Tax Act	UP Sales Tax	8	2011-2012	Commercial Tax Tribunal Ghaziabad
7	UP Trade Tax Act	Work Contract Tax	61.64	2009-2010	Commercial Tax Tribunal Ghaziabad
8	UP Trade Tax Act	UP Sales Tax	14.45	2011-2012	Additional Commissioner of Commer cial Tax (Appeal)
9	Income Tax Act, 1961	Income Tax	2858.89	2010-2011	Commissioner of Income Tax, New Delhi
10	Income Tax Act, 1961	Income Tax	675.68	2011-2012	Deputy Commissioner of Income Tax
11	Income Tax Act, 1961	Income Tax	313.03	2012-2013	ITAT, New Delhi
12	Income Tax Act, 1961	Income Tax	594.35	2013-2014	ITAT, New Delhi
13	Income Tax Act, 1961	Income Tax	1,240.00	1988-1989 to 2014-2015	Supreme Court
14	Income Tax Act, 1961	Income Tax	1,070.94	2014-2015	ITAT, New Delhi
15	Wealth Tax Act, 1957	Wealth Tax	0.45	1992-1993	Asstt. Commissioner of Wealth Tax, New Delhi
16	Wealth Tax Act, 1957	Wealth Tax	0.50	1997-1998	Deputy Commissioner of Wealth Tax, New Delhi
17	Wealth Tax Act, 1957	Wealth Tax	0.96	2000-2001	Deputy Commissioner of Wealth Tax, New Delhi

a. Defaults in repayment of dues to bank and financial institutions existing as at March 31, 2018 are as under:

Particulars	Period of Delay
	1 - 31 Days	32 - 60 Days	61 - 89 Days	90-182 Days	Above 183 Days	Total
Term loans from banks
Against principal Amount
Bank of Maharashtra - Lucknow	-	-	-	-	317.23	317.23
Bank of Maharashtra - Delhi	604.00	-	604.00	1,208.00	858.21	3,274.21
Bank Of India	-	-	100.00	-	-	100.00
Indian Bank	-	-	321.43	321.43	292.86	935.71
Allahabad Bank	937.50	-	937.50	1,875.00	866.95	4,616.95
Punjab National Bank	-	-	-	-	-	-
Against Interest
Bank of Maharashtra - Lucknow	12.16	4.88	4.88	17.29	59.45	91.77
Bank of Maharashtra - Delhi	109.40	55.61	60.78	176.13	681.74	1,090.56
Bank Of India	11.26	-	-	-	-	11.26
Indian Bank	53.07	47.35	51.50	149.04	305.18	606.13
Allahabad Bank	134.86	121.83	134.88	403.05	879.38	1,674.00
Punjab National Bank	-	-	-	-	-	-
Term Loans from Financial Institutions
Against Principal Amount
Housing Development Finance Corporation	60.59	45.94	10.37	-	-	116.90
DMI Finance Pvt. Ltd.	119.13	-	-	-	-	119.13
Capital India Finance Ltd.	55.56	-	-	-	-	55.56
Against Interest
DMI Finance Pvt. Ltd.	38.98	34.81	31.42		-	105.20
Capital India Finance Limited	12.99	11.74	33.16	-	-	57.89

b. Defaults in repayment of dues of inter Company deposits existing as at March 31, 2018 are as under:

	1 - 31 Days	32 - 60 Days	61 - 89 Days	90-182 Days	Above 183 Days	Total
Inter Company Deposits
Dalmia Group Holdings	-	-	-	-	140.00	140.00
Charismatic Infratech Pvt. Ltd.	346.26	-	-	-	-	346.26
Sainik Finance & Industries Ltd.	-	-	-	-	300.00	300.00
Against Principal
Dalmia Group Holdings	2.25	2.03	2.25	6.67	52.97	66.17
C. R. Foods India Pvt. Ltd.	0.50	0.45	0.50	1.47	-	2.92

Charismatic Infratech Pvt. Ltd.	51.84	96.76	44.33	-	-	192.93
Sainik Finance & Industries Ltd.	3.90	3.52	3.90	11.57	37.43	60.32

ix In our opinion, and according to the information and explanations given to us, the Company has not raised any money way of initial public offer / further public offer. Further, the term loans raised during the year by the Company have been generally applied for the purpose for which the said loans were obtained and for overall project related activity in general.

x. In our opinion, and according to the information and explanations given to us, we report that no fraud by the Company or on the Company by the officers and employees of the Company has been noticed or reported during the year.

xi. In our opinion, and according to the information and explanations given to us, managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of section 197 of the Act read with Schedule V to the Act.

xii. The Company is not a Nidhi Company. Therefore, the provisions of clause 3(xii) of the Order are not applicable to the Company.

xiii In our opinion, and according to the information and explanations given to us during the course of audit, transactions with the related parties are in compliance with section 177 and section 188 of the Act, where applicable and the details have been disclosed in the notes to the standalone Ind AS financial statements, as required by the applicable Indian Accounting Standards.

xiv According to the information and explanations given to us and on an overall examination of the books of account, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under audit and hence not commented upon.

xv In our opinion, and according to the information and explanations given to us, the Company has not entered into any non-cash transactions with directors or persons connected with him as referred to in Section 192 of the Act.

xvi According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.

Annexure B to the Independent Auditor''s Report to the Members of Ansal Properties & Infrastructure Limited dated May 30, 2018 on its standalone Ind AS financial statements .

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ) as referred to in paragraph 2(f) of âReport on Other Legal and Regulatory Requirements'' section

We have audited the internal financial controls over financial reporting of Ansal Properties & Infrastructure Limited (âthe Companyâ) as of March 31, 2018 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.

Management''s Responsibility for Internal Financial Controls

The Company''s management is responsible for establishing and maintaining internal financial controls based on âthe internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by The Institute of Chartered Accountants of India (ICAI)â. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditors'' Responsibility

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit.

We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by The Institute of Chartered Accountants of India (ICAI). Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness.

Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that:

a) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

b) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and

c) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by The Institute of Chartered Accountants of India (ICAI).

For S.S.KOTHARI MEHTA & Co.

Chartered Accountants

Firm''s Registration No. 000756N

SUNIL WAHAL

Partner

Membership No. 087294

Place: New Delhi

Date: May 30, 2018

Mar 31, 2016

Independent Auditors'' Report

To the Members of Ansal Properties & Infrastructure Limited Report On the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Ansal Properties & Infrastructure Limited(âthe Companyâ) which comprises the balance sheet as at March 31, 2016, the statement of profit and loss, the cash flow statement for the year then ended,and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134 (5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the company and for preventing and detecting fraud & other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are responsible and prudent; and design, implementation and maintenance of adequate internal controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records relevant to the preparation and presentation of standalone financial statements that give a true and fair view and are free from material misstatements, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and the matters which are required to be included in the audit report under the provisions of the Act and the rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the standalone financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the standalone financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2016, and its profit and its cash flows for the year ended on that date.

Emphasis of Matter

We Draw Attention to:

i. Note No. 31 to the standalone financial statements wherein the Company had claimed a cumulative exemption of Rs. 3,448 lacs up to the period ended March 31, 2011, continuing up to the end of current period, under section 80 IA of the Income Tax Act, 1961 being tax profits arising out of sale of Industrial Park units, pending the notification of the same by Central Board of Direct Taxes (Competent Authority). The Competent Authority rejected the initial application against which the Company has filed review petition. The Company has taken opinion from a senior counsel that its review petition satisfies all the conditions specified in the said Scheme of Industrial Park under Industrial Park (Amendment) Scheme, 2010. No exemption is claimed during the current year as there are no sales of industrial park units.

ii Note No. 32 to the standalone financial statements wherein the Company is carrying project inventory of Rs. 18,192 lacs for one of its Group Housing projects. The Company had applied to the Authority for developing the project on the basis of revised Scheme announced by the Authority for which approval has been received envisaging developing the project on a smaller piece of land equivalent to the amount paid and surrender balance project land subject to certain conditions. Pending final decision of the Authority in the matter and fulfillment of conditions precedent, the management is of the view that there is no impairment in the value of land/ project and we have relied on management contention.

However, our opinion is not qualified in respect of above matters.

Report on Other Legal and Regulatory Requirements

1 As required by the Companies (Auditor''s Report) Order, 2015 (''the Order'') issued by the Central Government of India in terms of section 143 (11) of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order;

2. As required by Section 143 (3) of the Act, we report that:

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion, proper books of account as required by law have been kept by the company so far as it appears from our examination of those books.

c) The balance sheet, the statement of profit and loss, and the cash flow statement dealt with by this report are in agreement with the books of account.

d) In our opinion, the aforesaid standalone financial statements comply with accounting standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e) On the basis of written representations received from the directors as on March 31, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2016 from being appointed as director in terms of Section 164 (2) of the Act.

g) With respect to the other matters to be included, in the Auditors Report in accordance with Rule 11 of the Companies(Audit and Auditors) Rules, 2014, in our opinion and to best of our information and accordingly to explanations given us;

i) The Company has disclosed the impact of pending litigation on its financial position as referred to in Note 29 to the standalone financial statements.

ii) The Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses.

iii) There has been no delay in transferring amounts required to be transferred to the Investor Education and Protection Fund by the Company.

Annexure A to the Independent Auditor''s Report to the Members of Ansal Properties & Infrastructure Limited Dated May 28. 2016.

i. a. The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

b. The Company has a phased programme of physical verification of its fixed assets which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. All the fixed assets identified during the year for verification have not been physically verified by the management. However, discrepancies noticed during physical verification have been recorded and accounted for in the books of account to the extent of verification carried out.

c. In our opinion, and according to the information and explanations given to us, the title deeds of immovable properties are held in the name of the Company.

ii. a. As explained to us, physical verification has been conducted by the management at reasonable intervals in respect of building material, stores & spares and inventory of shops/ flats/ houses. In our opinion, the frequency of such verification is reasonable.

b. The procedures for the physical verification of inventory followed by the management are, in our opinion, reasonable and adequate in relation to the size of the Company and nature of its business.

c. In our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material and have been properly dealt with in the books of account.

iii. a. The company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under section 189 of the Act. Accordingly clauses 3(iii) (a) & (b) of the Order are not applicable.

b. Since there are no such loans, the comments regarding repayment of the principal amount & interest due thereon and overdue amounts are not required.

iv) In our opinion and according to the information and explanations given to us, provisions of section 185 and 186 of the Act, as applicable, in respect of loans to directors including entities in which they are interested and in respect of loans and advances given, investments made and, guarantees, and securities given have been complied with by the company.

v) During the previous year, the Company had filed with Company Law Board (CLB) a scheme for extension of time for repayment of its fixed deposits. CLB had approved extension of time for repayment of fixed deposits with certain conditions vide Order dated 30.12.2014 under sections 74(2) of the Act. In continuation of the previous CLB Order the CLB has further directed the Company vide Order dated 28.04.2016 for repayment of all overdue of Rs. 30 crore over the next four month starting May 2016 along with current maturities of fixed deposits. The Company is in process of complying with above CLB Orders. Further, provisions of section 73 to 76 or any other relevant provisions of the Act, whichever is applicable have been complied by the company.

vi) The Central Government has prescribed for maintenance of Cost Accounting records pursuant to the requirements of sub-section (1) of section 148 of the Act with regard to the activities of the Company. The Company is in the process of making and maintaining those records. However, we are not required to carry out a detailed examination of the same.

vii) a. In our opinion and according to the information and explanations given to us, according to the records of the Comp-any, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Sales tax, Wealth-tax, Custom Duty, Excise Duty, Cess and other material statutory dues, wherever applicable, have been generally regularly deposited with the appropriate authorities during the year.

However, there are no such undisputed statutory dues payable for a period of more than six months from the date they became payable as at March 31, 2016.

b. According to the information and explanations given to us and as per the books and records examined by us, there are no dues of Customs duty, Excise duty and Service tax which have not been deposited on account of any dispute and the forum where the dispute is pending, are as follows:

S. No.	Name of Statute	Nature of Dues	Amount (Rs.in lacs)	Assessment Year	Forum where pending
1.	Sales Tax Act	Delhi Sales Tax	4.47	1999-00	Assessing Authority Special Zone, Delhi
2.	Sales Tax Act	UP Sales Tax	0.29	2006-07	Additional Commissioner (Appeal), Ghaziabad
3.	Sales Tax Act	UP Sales Tax	1.08	2008-09	Commercial Tax Tribunal Ghaziabad
4.	Local Area Development Tax Act	Local Area Development Tax	8.73	2003-04	Joint Excise & Taxation Commissioner (Appeal),Gurgaon
5.	UP Trade Tax Act	UP Sales Tax	0.06	2007-08	Additional Commissioner (Appeal), Ghaziabad
6.	UP Trade Tax Act	UP Sales Tax	8.00	2011-12	Commercial Tax Tribunal Ghazi bad
7.	UP Trade Tax Act	Work Contract Tax	61.64	2009-10	Commercial Tax Tribunal Ghaziabad
8.	UP Trade Tax Act	UP Sales Tax	14.45	2011-12	Additional Commissioner of Commercial Tax (Appeal)
9.	Sales Tax Act	Haryana Sales Tax	50.28	2008-09	Deputy Excise & Taxation Commissioner Cum Revisional Authority Gurgaon, Haryana
10.	Sales Tax Act	Haryana Sales Tax	172.42	2009-10	Deputy Excise & Taxation Commissioner Cum Revisional Authority Gurgaon, Haryana
11.	Sales Tax Act	Haryana Sales Tax	49.28	2010-11	Deputy Excise & Taxation Commissioner Cum Revisional authority Gurgaon, Haryana
12.	Sales Tax Act	Haryana Sales Tax	5352.18	2011-12	Joint Excise and taxation Commissioner (Appeal) Gurgaon, Haryana
13.	Sales Tax Act	Haryana Sales Tax	739.09	2012-13	Joint Excise and taxation Commissioner (Appeal) Gurgaon, Haryana
14.	Sales Tax Act	Haryana Sales Tax	325.56	2013-14	Joint Excise and taxation Commissioner (Appeal) Gurgaon, Haryana
15.	Income Tax Act, 1961	Income Tax	2858.89	2010-11	Commissioner of Income Tax, New Delhi
16.	Income Tax Act, 1961	Income Tax	675.68	2011-12	Deputy Commissioner of Income Tax
17.	Income Tax Act, 1961	Income Tax	313.03	2012-13	ITAT, New Delhi
18.	Income Tax Act, 1961	Income Tax	601.49	2013-14	ITAT, New Delhi
19.	Income Tax Act, 1961	Income Tax	1,240.00	1988-89 to 2014-15	Supreme Court

S. No.	Name of Statute	Nature of Dues	Amount (Rs.in lacs)	Assessment Year	Forum where pending
20.	Wealth Tax Act, 1957	Wealth Tax	0.45	1992-93	Asstt. Commissioner of Wealth Tax, New Delhi
21.	Wealth Tax Act, 1957	Wealth Tax	0.50	1997-98	Deputy Commissioner of Wealth Tax, New Delhi
22.	Wealth Tax Act, 1957	Wealth Tax	0.96	2000-01	Deputy Commissioner of Wealth Tax, New Delhi

viii. On the basis of the audit procedures performed by us, the information & explanations furnished and representations made by the management, the Company has delays in repayment of dues including interest to banks and financial institutions. While such delays were there on different occasions during the year, the relevant amounts have been paid to the respective banks and financial institutions and the delay events have been made good, such delays which have remained outstanding at the year end are enumerated in note 33 to the financial statements. There are no outstanding debentures at year end.

ix. In our opinion, and according to the information and explanations given to us, the Company has not raised any money way of initial public offer / further public offer. Further, the term loans raised during the year by the Company have been generally applied for the purpose for which the said loans were obtained and for overall project related activity in general.

x. In our opinion, and according to the information and explanations given to us, we report that no fraud by the company or on the company by the officers and employees of the Company has been noticed or reported during the year.

xii The Company is not a Nidhi company. Therefore, the provisions of clause 3(xii) of the Order are not applicable to the Company.

xiii. In our opinion, and according to the information and explanations given to us during the course of audit, transactions with the related parties are in compliance with section 177 and section 188 of the Act, where applicable and the details have been disclosed in the notes to the financial statements, as required by the applicable accounting standards.

xiv. According to the information and explanations given to us and on an overall examination of the books of account, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under audit and hence not commented upon.

xv. In our opinion, and according to the information and explanations given to us, the Company has not entered into any non-cash transactions with directors or persons connected with him.

xvi. According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.

For S. S. KOTHARI MEHTA & Co.

Chartered Accountants

FRN - 000756N

Sunil Wahal

Partner

Date : 28th May, 2016 Membership No. 087294

Place: New Delhi

Mar 31, 2015

We have audited the accompanying standalone financial statements of Ansal Properties & Infrastructure Limited ("the Company") which comprise the Balance Sheet as at March 31, 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134 (5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the company and for preventing and detecting fraud & other irregularities, selection and application of appropriate accounting policies, making judgments and estimates that are reasonable and prudent, and design, implementation and maintenance of adequate internal controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records relevant to the preparation and presentation of financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and the matters which are re- quires to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143 (10) of the Act. Those Stan- darks require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial controls relevant to the Company's preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the Company as at March 31, 2015 and its profit and its cash flows for the year ended on that date.

Emphasis of Matter

We draw attention to :

i. Note No. 30 wherein the Company has claimed a cumulative exemption of Rs. 3448 lacs upto the period ended March 31, 2011, continuing upto the end of current financial year, under section 80 IA of the Income Tax Act, 1961 being tax profits arising out of sale of Industrial Park units, pending the notification of the same by Central Board of Direct Taxes (Competent Authority). The Competent Authority rejected the initial application against which the Company has fled review petition. The Company has taken opinion from a senior counsel that its review petition satisfies all the conditions specified in the said Scheme of Industrial Park under Industrial Park (Amendment) Scheme, 2010. No exemption is claimed during the current year as there are no sales of industrial park units.

ii. Note No. 31 wherein the Company is carrying project inventory of Rs. 16374 lacs for one of its Group Housing projects. The Company had applied to the Authority for developing the project on the basis of revised Scheme announced by the Authority for which approval has been received envisaging developing the project on a smaller piece of land equivalent to the amount paid and surrender balance project land subject to certain conditions. Pending final decision of the Authority in the matter and fulfllment of conditions precedent, the management is of the view that there is no impairment in the value of land/ project and we have relied on management contention.

iii. Note no 42(b) wherein due to the reasons stated therein, the Company has not recognised the assets sale relating to its wind business owing to the uncertainty involved in consummating the transaction due to certain pre-conditions and, therefore, possible impairment in the value of these assets of Rs. 1500 lacs.

However, our opinion is not qualified in respect of above matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2015 ('the Order') issued by the Central Government of India in terms of section 143 (11) of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by Section 143 (3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

(b) In our opinion, proper books of account as required by law have been kept by the company so far as it appears from our examination of those books;

(c) The Balance Sheet, the Statement of Profit and Loss and the Cash Flow statement dealt with by this report are in agreement with the books of account;

(d) In our opinion, the aforesaid standalone financial statements comply with accounting standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014; and

(e) On the basis of written representations received from the directors as on March 31, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2015 from being appointed as a director in terms of Section 164 (2) of the Act.

(f) With respect to the other matters to be included in the Auditors' Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and accordingly to the explanations given to us:

i) The Company has disclosed the impact of pending litigation on its financial position in its financial statements as referred to in Note no 27 to the financial statements;

ii) Read with our comments in the Emphasis of Matter paragraph above and Note no. 42(b) to the financial statements, the Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses; and

iii) There has been no delay in transferring amounts required to be transferred to the Investor Education and Protection Fund by the Company.

Annexure referred to in paragraph 1 of 'Report on Other Legal and Regulatory Requirements' of the Independent Auditors' Report of even date to the members of Ansal Properties & Infrastructure Limited on its financial statements as of and for the year ended March 31, 2015

1. a. The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

b. The Company has a phased programme of physical verification of its fixed assets which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. All the fixed assets identified during the year for verification have not been physically verified by the management. However, discrepancies noticed during physical verification have been recorded and accounted for in the books of account to the extent of verification carried out.

2. a. As explained to us, physical verification has been conducted by the management at reasonable intervals in respect of building material, stores & spares and inventory of shops/ fats/ houses. In our opinion, the frequency of such verification is reasonable.

b. The procedures for the physical verification of inventory followed by the management are, in our opinion, reasonable and adequate in relation to the size of the Company and nature of its business.

c. In our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material and have been properly dealt with in the books of account.

3. a. The company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under section 189 of the Act. Accordingly clauses 3(iii) (a) & (b) of the Order are not applicable.

b. Since there are no such loans, the comments regarding repayment of the principal amount &interest due thereon and overdue amounts are not required.

4. According to the information and explanations given to us during the course of audit, there are adequate internal control systems commensurate with size of the Company and the nature of its business with regard to purchase of inventory and fixed assets and for the sale of services. Further, on the basis of our examination of the books & records of the Company, carried out in accordance with the generally accepted auditing practices in India, we have neither come across nor have we been informed of any instance of major weaknesses in the aforesaid internal control systems. The Company's activity does not qualify for sale of goods.

5. During the year, the Company has fled a scheme for extension of time for repayment of its fixed deposits with Company Law Board (CLB). CLB has approved extension of time for repayment of fixed deposits with certain conditions vide Order dated 30.12.2014 under sections 74(2) of the Act (CLB Order). The Company has complied with the CLB Order. Further, provisions of section 73 to 76 or any other relevant provisions of the Act, as applicable, have been complied with by the company.

6. We have broadly reviewed the cost accounting records maintained by the Company pursuant to the Rules made by the Central Government under section 148(1) of the Act, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. However, we are not required to make a detailed examination of such records.

7. a. According to the information and explanations given to us, and records of the Company examined by us, the company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Sales tax, Wealth-tax, Custom Duty, Excise Duty, Value Added Tax, Cess and other material statutory dues, as applicable, with the appropriate authorities during the year. There are no such dues outstanding at the year end for a period of more than six months from the date they became pay- able.

b. According to the records of the Company, the details of dues of Income-tax, Sales-tax, Wealth-tax, Service-tax, Customs Duty, Excise Duty, Value added tax and Cess which have not been deposited on account of any dispute and the forum where the dispute is pending, are as follows :

S.No. Name of Statute Nature of Dues Amount (Rs.in lacs)

(i) Sales Tax Act Delhi Sales Tax 4.47

(ii) Sales Tax Act UP Sales Tax 0.29

(iii) UP Trade Tax Act UP Sales Tax 1.08

(iv) Local Area Local Area 8.73 Development Development Tax,

(v) Sales Tax Act Delhi Sales Tax 33.17

(vi) UP Trade Tax Act UP Sales Tax 0.06

(vii) UP Trade Tax Act UP Sales Tax 8.00

(viii) UP Trade Tax Act Work Contract 98.29 Tax

(ix) Income Tax Act, Income Tax, 1,493.10 1961

(x) Income Tax Act, Income Tax, 504.28 1961

(xi) Income Tax Act Income Tax 140.00 1961

(xii) Income Tax Act Income Tax 1,240.00 1961

(xiii) Wealth Tax Act Wealth Tax 0.45

(xiv) Wealth Tax Act Wealth Tax 0.50

(xv) Wealth Tax Act Wealth Tax 0.96

Name of Statute Assessment Forum where pending Year

Sales Tax Act 1999-00 Assessing Authority Special Zone, Delhi

Sales Tax Act 2006-07 Additional Commissioner (Appeal), Ghaziabad

UP Trade Tax Act 2008-09 Commercial Tax Tribunal Ghaziabad

Local Area Development 2003-04 Joint Excise & Taxation Commissioner (Appeal), Gurgaon

Sales Tax Act 2004-05 Trade Tax Tribunal, Delhi

UP Trade Tax Act 2007-08 Additional Commissioner (Appeal), Ghaziabad

UP Trade Tax Act 2011-12 Commercial Tax Tribunal Ghaziabad

UP Trade Tax Act 2009-10 Commercial Tax Tribunal Ghaziabad

Income Tax Act, 1961 2010-11 ITAT. New Delhi

Income Tax Act, 1961 2011-12 ITAT. New Delhi

Income Tax Act, 1961 2012-13 ITAT. New Delhi

Income Tax Act, 1961 1988-89 ITAT. New Delhi to 2014-15

Wealth Tax Act 1992-93 Asst. Commissioner of Wealth Tax, New Delhi

Wealth Tax Act 1997-98 Deputy Commissioner of Wealth Tax, New Delhi

Wealth Tax Act 2000-01 Asst. Commissioner of Wealth Tax, New Delhi

c. The company does not have any amount which is required to be transferred to Investor Education and Protection Fund during the year in accordance with relevant provisions of Companies Act, 1956 ( 1 of 1956) and Rules made thereunder.

8. The Company does not have accumulated losses as at the end of the financial year. The Company has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

9. On the basis of the audit procedures performed by us, the information & explanations furnished and representations made by the management, the Company has delays in repayment of dues including interest to banks and financial institutions. While such delays were there on different occasions during the year, the relevant amounts have been paid to the respective banks and financial institutions and the delay events have been made good, such delays which have remained outstanding at the year end are enumerated in note 32 to the financial statements. There are no outstanding debentures at yearend.

10. According to the information and explanations given to us, the Company has given guarantees against loans taken by others from banks & financial institutions; the terms & conditions of such guarantees are not, prima facie, prejudicial to the interest of the Company.

11. In our opinion and according to the information and explanations given to us, the term loans raised during the year by the Company have been generally applied for the purpose for which the said loans were obtained and for overall project related activity in general.

12. During the course of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India, we have neither come across any instance of fraud on or by the Company, noticed and reported during the year, nor have we been informed of such case by the management.

For S. S. KOTHARI MEHTA & Co.

Chartered Accountants

FRN Â 000756N

ARUN K TULSIAN

Date: 16th May, 2015 Partner

Place: New Delhi Membership No. 89907

Mar 31, 2014

We have audited the accompanying Financial Statements of Ansal Properties & Infrastructure Limited (''the Company''), which comprise the Balance Sheet as at March 31, 2014, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and Notes to Financial Statements comprising of a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act") read with the General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal controls relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) In case of Balance Sheet, of the state of affairs of the Company as at March 31, 2014;

b) In case of Statement of Profit and Loss, of the profit for the year ended on that date; and

c) In case of Cash Flow Statement, of the cash flows for the year ended on that date. Emphasis of Matter

We draw attention to :

i. Note No. 31 wherein the Company has claimed exemption of Rs. 3448 lacs upto March 31, 2013 under section 80 IA of the Income Tax Act, 1961 being tax profits arising out of sale of Industrial Park units, pending the notification of the same by Central Board of Direct Taxes (Competent Authority). The Competent Authority rejected the initial application against which the Company has filed review petition. The Company has taken opinion from a senior counsel that its review petition satisfies all the conditions specified in the said Scheme of Industrial Park under Industrial Park (Amendment) Scheme, 2010. No exemption is claimed during the current year as there are no sales of industrial park units.

ii. Note No. 32 wherein the Company is carrying project inventory of Rs. 16733 lacs for one of its Group Housing projects. The Company had applied to the Authority for developing the project on the basis of revised Scheme announced by the Authority for which approval has been received envisaging developing the project on a smaller piece of land equivalent to the amount paid and surrender balance project land subject to certain conditions. Pending final decision of the Authority in the matter and fulfillment of conditions precedent, the management is of the view that there is no impairment in the value of land/ project and we have relied on management contention.

However, our opinion is not qualified in respect of above matters.

Report on Other Legal and Regulatory Requirements

1) As required by the Companies (Auditors'' Report) Order, 2003 (''the Order'') issued by the Central Government of India in terms of section 227 (4A) of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

2) As required by section 227(3) of the Act, we report that:

a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b) In our opinion proper books of account, as required by law, have been kept by the Company so far as appears from our examination of those books;

c) The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

d) In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Act read with the General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013 ; and

e) On the basis of written representations received from the directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Act.

ANNEXURE TO THE AUDITORS'' REPORT (Annexure referred to in our report of even date) Re: Ansal Properties & Infrastructure Limited

1. a. The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

b. The Company has a phased programme of physical verification of its fixed assets which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. All the fixed assets identified during the year or verification have not been physically verified by the management. However, discrepancies noticed during physical verification have been recorded and accounted for in the books of account to the extent of verification carried out.

c. Fixed assets disposed off during the year were not substantial.

2. a. As explained to us, physical verification has been conducted by the management at reasonable intervals

in respect of building material, stores & spares and inventory of shops/ flats/ houses. In our opinion, the frequency of such verification is reasonable.

b. The procedures for the physical verification of inventory followed by the management are, in our opinion, reasonable and adequate in relation to the size of the Company and nature of its business.

c. In our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material and have been properly dealt with in the books of account.

3. a. The Company has not granted any loans, secured or unsecured, to companies, firms or other parties listed

in the register maintained under section 301 of the Act.

b. Since there are no such loans, the comments regarding repayment of the principal amount & interest due thereon and overdue amounts are not required.

c. The Company has taken deposits from one of the directors and his relative and interest bearing advances from two directors and their four relatives covered in the register maintained under section 301 of the Act. In our opinion the rate of interest and other terms & conditions of such deposits and advances are not, prima facie, prejudicial to the interest of the Company. The maximum amount of such deposits and advances during the year was Rs. 6976.41 lacs and the year end balance was Rs. 5438.64 lacs.

d. In respect of deposits and advances taken, repayment of the principal and interest has been regular as per stipulations wherever made. There are no overdue amounts at the year end.

4. According to the information and explanations given to us during the course of audit, there are adequate internal control systems commensurate with size of the Company and the nature of its business with regard to purchase of inventory and fixed assets and for the sale of services. Further, on the basis of our examination of the books & records of the Company, carried out in accordance with the generally accepted auditing practices in India, we have neither come across nor have we been informed of any instance of major weaknesses in the aforesaid internal control systems. The Company''s activity does not qualify for sale of goods.

5. a. To the best of our knowledge and according to the information and explanations given to us, we are of the

opinion that particulars of contracts or arrangements that need to be entered into the register maintained under section 301 of the Act have been so entered.

b. In our opinion and according to the information and explanations given to us, the transactions with parties in

pursuance of contracts or arrangements, with whom transactions exceeding the value of Rupees Five Lacs in respect of each party have taken place during the financial year, are at prices which are reasonable having regard to the prevailing market prices at the relevant time where such market prices are available.

6. In respect of fixed deposits accepted from the public, the provisions of section 58A and 58AA or any other relevant provisions of the Act including the Companies (Acceptance of Deposits) Rules, 1975 (the Rules) have been complied with except for not maintaining liquid assets to the extent of Rs. 1269 lacs within the stipulated time as required by the provisions of Rule 3A of the Rules; the amount was maintained in a fixed deposit account after the stipulated time. We have been informed that no order has been passed by Company Law Board or National Company Law Tribunal or RBI or any Court or any other Tribunal in this regard.

7. In our opinion, the Company has an internal audit system commensurate with the size & nature of its business.

8. The Central Government has prescribed for maintenance of Cost Accounting records pursuant to the requirements of clause (d) of sub-section (1) of section 209 of the Act with regard to the activities of the Company. The Company is in the process of making and maintaining those records. However, we are not required to carry out a detailed examination of the same.

9. a. In our opinion and according to the information and explanations given to us, according to the records of the Company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Sales tax, Wealth-tax, Custom Duty, Excise Duty, Cess and other material statutory dues, wherever applicable, have been generally regularly deposited with the appropriate authorities during the year. However, there are no such undisputed statutory dues payable for a period of more than six months from the date they became payable as at March 31, 2014 except Income Tax amounting to Rs. 662 lacs which has since been deposited.

b. According to the information and explanations given to us and as per the books and records examined by us, there are no dues of Customs duty, Excise duty, Service tax and Cess which have not been deposited on account of any dispute, except the following in respect of disputed Sales tax, Wealth tax and Income Tax along with the forum where dispute is pending:

SN Name of Statute Nature of Dues Amount (Rs.in lacs)

(i) Sales Tax Act Delhi Sales Tax 4.47

(ii) Sales Tax Act UP Sales Tax 0.29

(iii) UP Trade Tax Act UP Sales Tax 1.08

(iv) Local Area Local Area 8.73 Development Development Tax Tax Act Haryana

(v) Sales TaxAct Delhi Sales Tax 33.17

(vi) UP Trade TaxAct UP Sales Tax 0.06

(vii) UP Trade TaxAct UP Sales Tax 8.00

(viii) Income TaxAct FBT 2.14

(ix) Income TaxAct Interest on FBT 0.49

(x) Income TaxAct Income Tax 1160.66

(xi) Income TaxAct Income Tax 497.03

(xii) Income TaxAct Income Tax 1240.00

(xiii) Wealth TaxAct Wealth Tax 0.45

(xiv) Wealth TaxAct Wealth Tax 0.5

(xv) Wealth TaxAct Wealth Tax 0.96

SN Name of Statute Assessment Forum where pending Year

(i) Sales Tax Act Delhi 1999-00 Assessing Authority Special Zone, Delhi

(ii) Sales Tax Act UP 2006-07 Additional Commissioner (Appeal), Ghaziabad

(iii) UP Trade Tax Act UP 2008-09 Commercial Tax Tribunal Ghaziabad

(iv) Local Area Development 2003-04 Joint Excise & Taxation Tax Act Commissioner (Appeal), Gurgaon

(v) Sales TaxAct Delhi 2004-05 Trade Tax Tribunal, Delhi (vi) UP Trade TaxAct 2007-08 Additional Commissioner (Appeal), Ghaziabad

(vii) UP Trade TaxAct 2011-12 Commercial Tax Tribunal Ghaziabad

(viii) Income TaxAct 2007-08 Deputy Commissioner of Income Tax

(ix) Income TaxAct 2006-07 Asstt. Commissioner of Income Tax, New Delhi

(x) Income TaxAct 2010-11 Commissioner of Income Tax, New Delhi

(xi) Income TaxAct 2011-12 Deputy Commissioner of Income Tax

(xii) Income TaxAct 1988-89 to Supreme Court, New Delhi 2014-15

(xiii) Wealth TaxAct 1992-93 Asstt. Commissioner of Wealth Tax, New Delhi

(xiv) Wealth TaxAct 1997-98 Deputy Commissioner of Wealth Tax, New Delhi

(xv) Wealth TaxAct 2000-01 Deputy Commissioner of Wealth Tax, New Delhi

10. There are no accumulated losses of the Company as at the end of the financial year. There are no cash losses during the financial year and in the immediately preceding financial year.

11. On the basis of the audit procedures performed by us, the information & explanations furnished and representations made by the management, the Company has delays in repayment of dues including interest to banks and financial institutions. While such delays were there on different occasions during the year, the relevant amounts have been paid to the respective banks and financial institutions and the delay events have been made good, such delays which have remained outstanding at the year end are enumerated in note 33 to the financial statements. There are no outstanding debentures at yearend.

12. According to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The Company does not fall within the category of Chit fund / Nidhi / Mutual Benefit fund / Society and hence the related reporting requirements of the Order are not applicable.

14. According to the information and explanations given to us, the Company is not dealing ortrading in shares, securities, debentures and other investments and hence the related reporting requirements of the Order are not applicable.

15. The Company has given guarantees against loans taken by others from banks & financial institutions; the terms & conditions of such guarantees are not, prima facie, prejudicial to the interest of the Company.

16. In our opinion and according to the information and explanations given to us, the term loans raised during the year by the Company have been generally applied for the purpose for which the said loans were obtained and for overall project related activity in general.

17. According to the information and explanations given to us and as per the books and records examined by us, on an overall examination of the Balance Sheet of the Company, the funds raised by the Company on short-term basis have not been applied for long-term investment.

18. The Company has not made any preferential allotment of shares to parties and Companies covered in the register maintained under section 301 of the Act.

19. According to the information and explanations given to us and the records examined by us, the Company has neither issued any debentures during the year nor has any outstanding debentures

20. The Company has not raised any money by way of public issue during the year.

21. During the course of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India, we have neither come across any instance of fraud on or by the Company, noticed and reported during the year, nor have we been informed of such case by the management.

ForS.S.KOTHARI MEHTA& Co. Chartered Accountants FRN-000756N

ARUN K.TULSIAN Partner Membership No. 89907

Date :27th May, 2014 Place: New Delhi

Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying Financial Statements of Ansal Properties & Infrastructure Limited (''the Company''), which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and Notes to Financial Statements comprising of a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 (''the Act''). This responsibility includes the design, implementation and maintenance of internal controls relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatements, whether due to fraud or error.

Auditors'' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Basis for Qualified Opinion

a) The Company has not considered for the estimated borrowing costs to be incurred in future in general for determining the project revenues, project inventory and debtors. According to the management the amount of these items cannot be determined at this stage, and therefore, we are unable to comment on the consequential impact thereof on the carrying value of project inventory, revenue recognition and outstanding debtors and other adjustments that may be necessitated on this account in the financial statements.

b) The Company had, during the year ended March 31, 2010, changed its accounting policy in respect of accounting for certain costs in the nature of administration and selling costs by charging them off Statement of Profit & Loss against the earlier policy of treating them as part of project cost for determining project inventory, revenue and debtors. Expenditure of such nature incurred in earlier years and considered as part of project inventories under Projects/ Contract work in progress upto March 31, 2009 has been carried forward as such. Such amount has not been determined by the management in view of the practical difficulties involved, as explained. In the absence of availability of these amounts relating to the period upto March 31, 2009, we are unable to comment on the impact thereof on the carrying value of project inventories, revenue recognition and outstanding debtors and other adjustments that may be required in the financial statements.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion paragraph, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) In case of Balance Sheet, of the state of affairs of the Company as at March 31, 2013;

b) In case of Statement of Profit and Loss, of the profit for the year ended on that date; and

c) In case of Cash Flow Statement, of the cash flows for the year ended on that date.

Emphasis of Matter

We draw attention to :

i. Note No. 31 wherein the Company has claimed exemption of Rs. 3447.91 lacs upto March 31, 2012 under section 80 IA of the Income Tax Act, 1961 being tax profits arising out of sale of Industrial Park units, pending the notification of the same by Central Board of Direct Taxes. Further the Company has taken opinion from a senior counsel that its application satisfies all the conditions specified in the said Scheme of Industrial Park. We have relied on management contention. However, no exemption is claimed during the current year as there are no sales of industrial park units.

ii. Note No. 32 wherein the Company is carrying project inventory of Rs. 18718.98 lacs for one of its Group Housing projects. The Company had applied to the Authority for developing the project on the basis of revised Scheme announced by the Authority for which approval has been received envisaging developing the project on a smaller piece of land equivalent to the amount paid and surrender balance project land subject to certain circumstances. Pending final decision of the Authority in the matter, the management is of the view that there is no impairment in the value of land/ project and we have relied on management contention.

However, our opinion is not qualified in respect of above matters.

Report on Other Legal and Regulatory Requirements

1) As required by the Companies (Auditors'' Report) Order, 2003 (''the Order'') issued by the Central Government of India in terms of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

2) As required by section 227(3) of the Act, we report that:

a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b) In our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

c) The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

d) In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Act; and

e) On the basis of written representations received from the directors as on March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Act.

ANNEXURE TO THE AUDITORS'' REPORT (Annexure referred to in our report of even date)

Re: Ansal Properties & Infrastructure Limited

1. a. The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

b. The Company has a phased programme of physical verification of its fixed assets which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. All the fixed assets identified during the year for verification have not been physically verified by the management. However, discrepancies noticed during physical verification have been recorded and accounted for in the books of account to the extent of verification carried out.

c. Fixed assets disposed off during the year were not substantial.

2. a. As explained to us, physical verification has been conducted by the management at reasonable intervals in respect of building material, stores & spares and inventory of shops/ flats/ houses. In our opinion, the frequency of such verification is reasonable.

b. The procedures for the physical verification of inventory followed by the management are, in our opinion, reasonable and adequate in relation to the size of the Company and nature of its business.

c. In our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material and have been properly dealt with in the books of account.

3. a. The Company has not granted any loans, secured or unsecured, to companies, firms or other parties listed in the register maintained under section 301 of the Act.

b. Since there are no such loans, the comments regarding repayment of the principal amount and interest due thereon and overdue amounts are not required.

c. The Company has taken deposits from one of the directors and his relative covered in the register maintained under section 301 of the Act. In our opinion the rate of interest and other terms and conditions of such deposits are not prima facie, prejudicial to the interest of the Company. The maximum amount of deposit during the year was Rs. 21 lacs and the year end balance was also Rs. 21 lacs.

d. In respect of deposits taken, repayment of the principal and interest has been regular. There are no overdue amounts at the year end.

4. In our opinion, and according to the information and explanations given to us during the course of audit, there are adequate internal control systems commensurate with size of the Company and the nature of its business with regard to purchase of inventory and fixed assets and for the sale of services. Further, on the basis of our examination of the books & records of the Company, carried out in accordance with the generally accepted auditing practices in India, we have neither come across nor have we been informed of any instance of major weaknesses in the aforesaid internal control systems. The Company''s activity does not qualify for sale of goods.

5. a. To the best of our knowledge and belief and according to the Information and explanations given to us, we are of the opinion that particulars of contracts or arrangements that need to be entered into the register maintained under section 301 of the Act have been so entered.

b. In our opinion and according to the information and explanations given to us, the transactions with parties in pursuance of contracts or arrangements, with whom transactions exceeding the value of Rupees Five Lacs in respect of each party have taken place during the financial year, are at prices,which are reasonable, having regard to the prevailing market prices at the relevant time where such market prices are available.

6. In respect of fixed deposits accepted from the public, the provisions of section 58A and 58AA or any other relevant provisions of the Act including the Companies (Acceptance of Deposit) Rules, 1975 have been complied with. We have been informed that no order has been passed by Company Law Board or National Company Law Tribunal or RBI or any Court or any other Tribunal in this regard.

7. In our opinion, the Company has an internal audit system commensurate with the size & nature of its business.

8. The Central Government has recently prescribed for maintenance of Cost Accounting records pursuant to the requirements of clause (d) of sub-section (1) of section 209 of the Act with regard to the activities of the Company.

The Company is in the process of making and maintaining those records. However, we are not required to carry out a detailed examination of the same.

9. a. In our opinion and according to the information and explanations given to us, according to the records of the Company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Sales tax, Wealth-tax, Custom Duty, Excise Duty, Cess and other material statutory dues, wherever applicable, have been generally regularly deposited with the appropriate authorities. However, there are no such un disputed statutory dues payable for a period of more than six months from the date they became payable as at March 31, 2013. b. According to the information and explanations given to us and as per the books and records examined by us, there are no dues of Customs duty, Excise duty, Service tax and Cess which have not been deposited on account of any dispute, except the following in respect of disputed Sales tax, Wealth tax and Income Tax along with the forum where dispute is pending:

S. No. Name of Statute Nature of Dues Amount (Rs.in lacs)

(i) Income Tax Act FBT 2.14

(ii) Income Tax Act Interest on FBT 0.49

(iii) Income Tax Act Income Tax 1783.05

(iv) Income Tax Act Income Tax 463.29

(v) Wealth Tax Act Wealth Tax 0.45

(vi) Wealth Tax Act Wealth Tax 0.50

(vii) Wealth Tax Act Wealth Tax 0.96

(viii) Local Area local Area 8.73

Development Development Tax Tax Act

(ix) Sales Tax Act Delhi Sales Tax 33.17

(x) Sales Tax Act UP Sales Tax 0.29

(xi) UP Trade Tax Act UP Sales Tax 2.38

(xii) UP Trade Tax Act UP Sales Tax 1.08

(xiii) UP Trade Tax Act UP Sales Tax 0.06

(xiv) UP Trade Tax Act UP Sales Tax 8.00

NAME Assessment Forum where pending Year

Income Tax Act 2007-08 Deputy Commissioner of Income Tax

Income Tax Act 2006-07 Asstt. Commissioner of Income Tax, New Delhi

Income Tax Act 2010-11 Commissioner of Income Tax, New Delhi

Income Tax Act 2009-10 Deputy Commissioner of Income Tax

Income Tax Act 1992-93 Asstt. Commissioner of wealth Tax, New Delhi

Income Tax Act 1997-98 Deputy Commissioner of Wealth Tax, New Delhi

Income Tax Act 2000-01 Deputy Commissioner of Wealth Tax, New Delhi

Income Tax Act 2003-04 Joint Excise & Taxation Commissioner (Appeal), Gurgaon

Income Tax Act 2004-05 Trade Tax Tribunal, Delhi

Income Tax Act 2006-07 Additional Commissioner (Appeal), Ghaziabad

Income Tax Act 2008-09 Additional Commissioner (Appeal), Ghaziabad

Income Tax Act 2008-09 Additional Commissioner (Appeal), Ghaziabad

Income Tax Act 2007-08 Additional Commissioner (Appeal), Ghaziabad

Income Tax Act 2011-12 Additional Commissioner (Appeal), Ghaziabad

10. There are no accumulated losses of the Company as at the end of the financial year. There are no cash losses during the financial year and in the immediately preceding financial year.

11. On the basis of the audit procedures performed by us, the information & explanations furnished and representations made by the management, the Company has delays in repayment of dues including interest to banks and financial institutions. While such delays were there on different occasions during the year, the relevant amounts have been paid to the respective banks and financial institutions and the delay events have been made good, such delays which have remained outstanding at the year end are enumerated in note 33 to the financial statements. However, there were no delays in payment of dues to debenture holders.

12. According to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities

13. The Company does not fall within the category of Chit fund / Nidhi / Mutual Benefit fund / Society and hence the related reporting requirements of the Order are not applicable.

14. According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments and hence the related reporting requirements of the Order are not applicable.

15. The Company has given guarantees against loans taken by others from banks & financial institutions; the terms & conditions of such guarantees are not, prima facie, prejudicial to the interest of the Company.

16. In our opinion and according to the information and explanations given to us, the term loans raised during the year by the Company have been generally applied for the purpose for which the said loans were obtained and for overall project related activity in general.

17. According to the information and explanations given to us and as per the books and records examined by us, on an overall examination of the Balance Sheet of the Company, the funds raised by the Company on short-term basis have not been applied for long-term investment.

18. The Company has not made any preferential allotment of shares to parties and Companies covered in the register maintained under section 301 of the Act.

19. According to the information and explanations given to us and the records examined by us, the Company has created necessary securities for the debentures issued except those issued to one of the lenders wherein the security provided by the Company is less than the total amount of debentures necessitating classification of the balance amount of debentures as unsecured. We are explained that the said lender is not pursuing for any additional security.

20. The Company has not raised any money by way of public issue during the year.

21. During the course of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India, we have neither come across any instance of fraud on or by the Company, noticed and reported during the year, nor have we been informed of such case by the management.

For S.S. KOTHARI MEHTA& Co.

Chartered Accountants

FRN - 000756N

ARUN K. TULSIAN

Partner

Membership No. 89907

Date : 27th May, 2013

Place : New Delhi

Mar 31, 2012

We have audited the attached Balance Sheet of Ansal Properties & Infrastructure Limited as at March 31, 2012 and also the Statement of Profit and Loss and the Cash Flow Statement of the Company for the year ended on that date, annexed thereto. These Financial Statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We have conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies (Auditors' Report) Order, 2003 as amended by the Companies (Auditors' Report) (Amendment) Order, 2004 (collectively the Order) issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956 and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

Further to our comments in the Annexure referred to above, we report that:

a) We have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purpose of our audit;

b) In our opinion, proper books of account, as required by law, have been kept by the Company so far as appears from our examination of those books;

c) The Balance Sheet, Statement of Profit & Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account;

d) In our opinion, the Balance Sheet, Statement of Profit & Loss and Cash Flow Statement, dealt with by this report, comply with the Accounting Standards referred to in sub - section (3C) of Section 211 of the Companies Act, 1956.

e) On the basis of written representations received from the directors as on March 31, 2012 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 2012 from being appointed as a director in terms of clause (g) of sub section (1) of section 274 of the Companies Act, 1956.

f) Without qualifying our opinion, we draw attention to:

i. Note No. 30 wherein the Company has claimed exemption of Rs. 3448 lacs in earlier years under section 80 lA of the Income Tax Act, 1961 being tax profits arising out of sale of Industrial Park units, pending the notification of the same by Central Board of Direct Taxes. Further the company has taken opinion from a senior counsel that its application satisfies all the conditions specified in the said Scheme of Industrial Park. We have relied on management contention. However, no exemption is claimed during the current year as there are no sales of industrial park units.

ii. Note No. 32(b) wherein the Company is carrying project inventory of Rs. 16833 lacs for one of its Group Housing projects. The company had applied to the Authority for developing the project on the basis of revised Scheme announced by the Authority for which approval has been received envisaging developing the project on a smaller piece of land equivalent to the amount paid and surrender balance project land subject to certain conditions. Pending final decision of the Authority in the matter, the management is of the view that there is no impairment in the value of land/ project and we have relied on management contention.

iii. Note No. 32(a) wherein the Company has given advances to land owning companies / collaborators I others for purchase / aggregation of land / for others to the tune of Rs.13707 lacs. This includes Rs. 10000 lacs as security deposits, the recoverability / adjustment of which is dependent upon the future events such as launch of project(s) for which steps have been or are being taken by the Company. As regards the balance amount of Rs.3707 lacs, pending details of land purchased and financial position of these parties, we understand from management that these advances are given in respect of on going transactions with collaborators / other parties and are regarded as being in the normal course of business. We have relied on management contention.

g) The Company has not considered for the estimated borrowing costs to be incurred in future in general for determining the project revenues, project inventory and debtors. According to the management the amount of these items cannot be determined at this stage, and therefore, we are unable to comment on the consequential impact thereof on the carrying value of project inventory, revenue recognition and outstanding debtors and other adjustments that may be necessitated on this account in the financial statements.

h) The Company had, during the year ended March 31, 2010, changed its accounting policy in respect of accounting for certain costs in the nature of administration and selling costs by charging them off to Profit & Loss against the earlier policy of treating them as part of project cost for determining project inventory, revenue and debtors. Expenditure of such nature incurred in earlier years and considered as part of project inventories under Projects/ Contract work in progress upto March 31, 2009 has been carried forward as such. Such amount has not been determined by the management in view of the practical difficulties involved, as explained. In the absence of availability of these amounts relating to the period upto March 31, 2009, we are unable to comment on the impact thereof on the carrying value of project inventories, revenue recognition and outstanding debtors and other adjustments that may be required in the financial statements.

Subject to that stated in clause g) and h) above having its impact as aforesaid, in our opinion and to the best of our information and according to the explanations given to us, the said accounts read with the Accounting policies and Notes thereon give the information required by the Act, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) In the case of Balance Sheet, of the state of affairs of the Company as at March 31,2012;

b) In the case of Statement of Profit and Loss, of the Profit for the year ended on that date; and

c) In the case of Cash Flow Statement, of the Cash flows for the year ended on that date.

ANNEXURE TO AUDITORS' REPORT

(Annexure referred to in our report of even date) Re: Ansal Properties & Infrastructure Limited

1. a. The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

b. The Company has a phased programme of physical verification of its fixed assets which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. All the fixed assets identified during the year for verification have not been physically verified by the management. However, discrepancies noticed during physical verification have been recorded and accounted for in the books of account to the extent of verification carried out.

c. Fixed assets disposed off during the year were not substantial.

2. a. As explained to us, physical verification has been conducted by the management at reasonable intervals in respect of building material, stores & spares and inventory of shops/flats/houses. In our opinion, the frequency of such verification is reasonable.

b. The procedures for the physical verification of inventory followed by the management are, in our opinion, reasonable and adequate in relation to the size of the Company and nature of its business.

c. In our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material and have been properly dealt with in the books of account.

3. a. The company has not granted any loans, secured or unsecured, to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956.

b. Since there are no such loans, the comments regarding repayment of the principal amount & interest due thereon and overdue amounts are not required.

c. The company has taken deposits from one of the directors and his relative covered in the register maintained under section 301 of the Companies Act, 1956. In our opinion the rate of interest and other terms and conditions of such deposits are not prima facie, prejudicial to the interest of the company. The maximum amount of deposit during the year was Rs. 21 lacs and the yearend balance was also Rs. 21 lacs.

d. In respect of deposits taken, repayment of the principal and interest has been regular. There are no overdue amounts at the year end.

4. In our opinion, and according to the information and explanations given to us during the course of audit, there are adequate internal control systems commensurate with size of the Company and the nature of its business with regard to purchase of inventory and fixed assets and for the sale of services. Further, on the basis of our examination of the books & records of the company, carried out in accordance with the generally accepted auditing practices in India, we have neither come across nor have we been informed of any instance of major weaknesses in the aforesaid internal control systems. The company's activity does not qualify for sale of goods. However, the internal control systems with regard to documentation of advances given to land owning companies/ collaborators/ associates/ others need improvement.

5. a. To the best of our knowledge and according to the information and explanations given to us, we are of the opinion that particulars of contracts or arrangements that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered, b. In our opinion and according to the information and explanations given to us, the transactions with parties in pursuance of contracts or arrangements, with whom transactions exceeding the value of Rupees Five Lacs in respect of each party have taken place during the financial year, are at prices, which are reasonable, having regard to the prevailing market prices at the relevant time where such market prices are available.

6. In respect of fixed deposits accepted from the public, the provisions of section 58A and 58AA or any other relevant provisions of the Act including the Companies (Acceptance of Deposits) Rules, 1975 have been complied with. We have been informed that no order has been passed by Company Law Board or National Company Law Tribunal or RBI or any Court or any other Tribunal in this regard.

7. In our opinion, the Company has an internal audit system commensurate with the size & nature of its business.

8. The Central Government has during the year prescribed for maintenance of Cost accounting records pursuant to the requirements of clause (d) of sub-section (1) of section 209 of the Companies Act, 1956 with regard to the activities of the company. The Company is in the process of making and maintaining those records. However, we are not required to carry out a detailed examination of the same.

9. a. In our opinion and according to the information and explanations given to us, according to the records of the Company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Sales tax, Wealth-tax, Custom Duty, Excise Duty, Cess and other material statutory dues, wherever applicable, have been generally regularly deposited with the appropriate authorities except in certain cases of delays of Service Tax which have been deposited with interest. However there are no such undisputed statutory dues payable for a period of more than six months from the date they became payable as at March 31,2012.

b. According to the information and explanations given to us and as per the books and records examined by us, there are no dues of Customs duty, Excise duty, Service tax and Cess which have not been deposited on account of any dispute, except the following in respect of disputed Sales tax, Wealth tax and Income Tax along with the forum where dispute is pending:

S.No. Name of Statute Nature of Dues

(i) Income Tax Act FBT

(ii) Income Tax Act Interest on FBT

(iii) Wealth Tax Act Wealth Tax

(iv) Wealth Tax Act Wealth Tax

(v) Wealth Tax Act Wealth Tax

(vi) Haryana Local Area Local Area Development Tax Act Development Tax

(vii) Sales Tax Act Delhi Sales Tax

(viii) Sales Tax Act Delhi Sales Tax

(ix) Sales Tax Act UP Sales Tax

(x) UP Trade Tax Act UP Sales Tax

(xi) UP Trade Tax Act UP Sales Tax

Name of Statute Amount Assessment Forum where pending (Rs.in lacs) Year

Income Tax Act 2.14 2007-08 Deputy Commissioner of Income Tax

Income Tax Act 0.49 2006-07 Asstt. Commissioner of Income Tax, New Delhi

Wealth Tax Act 0.45 1992-93 Asstt.Commissioner of Wealth Tax, New Delhi

Wealth Tax Act 0.50 1997-98 Deputy Commissioner of Wealth Tax, New Delhi

Wealth Tax Act 0.96 2000-01 Deputy Commissioner of Wealth Tax, New Delhi

Haryana Local Area Development Tax Act 8.73 2003-04 Joint Excise & Taxation Commissioner (Appeal), Gurgaon

Sales Tax Act 4.47 1999-2000 Assessing Officer, Delhi

Sales Tax Act 33.17 2004-05 Trade Tax Tribunal, Delhi

Sales Tax Act 0.29 2006-07 Additional Commissioner (Appeal), Ghaziabad

U P Trade Tax Act 2.38 2008-09 Additional Commissioner (Appeal), Ghaziabad

U P Trade Tax Act 1.08 2008-09 Additional Commissioner (Appeal), Ghaziabad

10. There are no accumulated losses of the Company as at the end of the financial year. There are no cash losses during the financial year and in the immediately preceding financial year.

11. According to the information and explanations given to us and as per the books and records examined by us, we report as follows:

(a). In respect of payments due for Debentures on account of Principal, Premium and Interest aggregating Rs 5224.15 lacs to LIC Mutual Fund and Rs. 750.00 lacs to HDFC India Real Estate Fund (HIREF), payments were delayed from 1 day to 343 days and these dues were cleared upto the close of financial year except for Rs 819.23 lacs, which was paid to LIC Mutual Fund subsequently. Other amount due in respect of Debentures to HIREF aggregating of Rs 1559.62 lacs have been outstanding for 1 day to 275 days as at the close of financial year and are outstanding as on date.

(b). Amounts due in respect of Term Loans from Banks / Financial Institutions on account of Principal & Interest aggregating Rs. 59018.91 lacs were delayed and have been fully paid. These include amounts* due to LIC of India (7 instances of Rs.3299.31 lacs-(i) Rs 3199.31 lac, (ii) Rs 100.00 lac, (iii) 1 to 576 days), IDBI Bank Limited (14 instances of Rs. 951.62 lacs- (i) Rs 862.35 lacs, (ii) Rs 89.27 lacs and (iii) 1 to 120 days), IFCI Limited (16instances ofRs.4628.52 lacs - (i) Rs 4578.52 lacs, (ii) Rs 50.00 lacs and (iii) 1 to 89 days), IFCI Factors Limited (14 instances of Rs.721.02lacs- (i) Rs 671.02 lacs, (ii) Rs 50.00 lacs and (iii) 1 to 86 days), HDFC Limited(119instances ofRs.14877.29 lacs - (i) Rs 14367.00 lacs, (ii) Rs 510.29 lacs and (iii) 1 to 99 days), LIC Housing Finance Limited (22 instances ofRs. 8106.54 lacs-(i) Rs 6740.85 lacs, (ii) Rs 1365.69 lacs and (iii) 1 to 159days), Central Bank of India (11 instances of (i) Rs. 1878.77 lacs and (iii) 1 to40days), United Bank of India (14 instances of Rs. 2402.92 lacs- (i) Rs 1855.55 lacs, (ii) Rs 547.37 lacs and (iii) 1 to 149 days), UCO Bank (22 instances of Rs. 5718.95 lacs-(i) Rs 5531.80 lacs, (ii) Rs 187.15 lacs and (iii) 1 to 97 days), Yes Bank Limited (26 instances of Rs.5440.46 lacs-(i) Rs 4938.99 lacs, (ii) Rs 501.47 lacs and (iii) 1 to90days), Punjab National Bank (21 instances of Rs.10301.59 lacs-(i) Rs 10151.59 lacs, (ii) Rs 150.00 lacs and (iii) 1 to 139days) and Syndicate Bank (3 instances of (i) Rs. 691.92 lacs and (iii) 1 to45days).

(C). In respect of other amounts due to Banks/Financial Institutions aggregating to Rs.6855.77 lacs, the payments have been delayed from 1 day to 183 days and are outstanding as on date. These include amounts due to LIC of India (8 instances of Rs.697.28 lacs), LIC Housing Finance Limited (5 instances ofRs. 1795.43 lacs), IFCI Limited (2 instances ofRs.107.53 lacs), IFCI Factors Limited (2 instances ofRs. 270.67 lacs), HDFC Limited (2 instances of Rs. 2339.66 lacs), UCO Bank (1 instance of Rs.87.00 lacs), Yes Bank Limited (1 instance of Rs.321.56 lacs) and Punjab National Bank (4 instances ofRs.1236.64 lacs), explained by the management, the delays are attributable to the delays in processing of Company's proposal for rescheduling and restructuring in several cases. *

(i). Amount paid during the financial year.

(ii). Amount paid subsequent to the close of financial year.

(iii). Delay ranging in days.

12. According to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities

13. The Company does not fall within the category of Chit fund I Nidhi/Mutual Benefit fund/Society and hence the related reporting requirements of the Order are not applicable.

14. According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments and hence the related reporting requirements of the Order are not applicable.

15. The Company has given guarantees against loans taken by others from banks & financial institutions; the terms & conditions of such guarantees are not, prima facie, prejudicial to the interest of the company.

16. In our opinion and according to the information and explanations given to us, the term loans raised during the year by the Company have been generally applied for the purpose for which the said loans were obtained and for overall project related activity in general.

17. According to the information and explanations given to us and as per the books and records examined by us, on an overall examination of the Balance Sheet of the company, the funds raised by the Company on short-term basis have not been applied for long-term investment.

18. The Company has not made any preferential allotment of shares to parties and Companies covered in the register maintained under section 301 of the Companies Act, 1956.

19. According to the information and explanations given to us and the records examined by us, the company has created necessary securities for the debentures issued except those issued to one of the lenders wherein the security provided by the company is less than the total amount of debentures necessitating classification of the balance amount of debentures as unsecured. We are explained that the said lender is not pursuing for any additional security.

20. The company has not raised any money by way of public issues during the year.

21. During the course of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India, we have neither come across any instance of fraud on or by the Company, noticed and reported during the year, nor have we been informed of such case by the management.

For S. S. KOTHARI MEHTA & CO.

Chartered Accountants

Firm Reg. No. 000756N

(ARUN K. TULSIAN)

Partner

Membership No. 89907

Date : 26th May, 2012

Place : New Delhi

Mar 31, 2011

We have audited the attached Balance Sheet of Ansal Properties & Infrastructure Limited as at March 31, 2011 and also the Profit & Loss Account and the Cash Flow Statement of the Company for the year ended on that date, annexed thereto.

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We have conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies (Auditors' Report) Order, 2003 as amended by the Companies (Auditors' Report) (Amendment) Order, 2004 (collectively the Order) issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956 and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

Further to our comments in the Annexure referred to above, we report that:

a) We have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purpose of our audit;

b) In our opinion, proper books of account, as required by law, have been kept by the Company so far as appears from our examination of those books;

c) The Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

d) In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statement, dealt with by this report, comply with the Accounting Standards referred to in sub - section (3C) of Section 211 of the Companies Act, 1956.

e) On the basis of written representations received from the directors as on March 31, 2011 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 2011 from being appointed as a director in terms of clause (g) of sub section (1) of section 274 of the Companies Act, 1956.

f) Without qualifying our opinion, we draw attention to :

i. Note no. B(4) of Schedule 17 wherein the company has claimed exemption of Rs. 39.91 lacs during the year in addition to exemption accounted for upto March 31, 2010 of Rs. 3408 lacs under section 80 IA of the Income Tax Act, 1961 being tax profits arising out of sale of Industrial Park units, pending the notification of the same by Central Board of Direct Taxes. Further the company has taken opinion from a senior counsel that its application satisfies all the conditions specified in the said Scheme of Industrial Park. We have relied on management contention.

ii. Note no. B - 6(b) of Schedule 17 wherein the company is carrying project inventory of Rs. 16719 lacs for one of its Group Housing projects. The company has applied to the Authority for developing the project on the basis of revised Scheme announced by the Authority which is pending approval. The management is of the view that there is no impairment in the value of land/project and we have relied on management contention.

iii. Note no. B -6 (a) of Schedule 17 wherein the company has given advances to land owning companies/ collaborators/ others for purchase of land/ others of Rs.16603 lacs. In the absence of details of land purchased/ end use for intended purposes and financial position of these parties, we understand from management that such advances are given in respect of ongoing transactions and are regarded as being in the normal course of business. We have relied on management contention.

g) The company has not considered for the estimated cost of land to be incurred in future for one of its large Township projects and also not considered borrowing costs to be incurred in future in general for determining the project revenues, project inventory and debtors. Referring Note no. B-2 of Schedule 17, wherein according to the management the amount of these items cannot be determined at this stage, we are unable to comment on the consequential impact thereof on the carrying value of project inventory, revenue recognition and outstanding debtors and other adjustments that may be necessitated on this account.

h) The Company has, during last year, changed its accounting policy in respect of accounting for certain costs in the nature of administration and selling costs by charging them off to Profit & Loss against the earlier policy of treating them as part of project cost for determining project inventory, revenue and debtors. Expenditure of such nature incurred in earlier years and considered as part of project inventories under Projects/ Contract work in progress upto 31st March, 2009 has been carried forward as such. Such amount has not been determined by the management in view of the practical difficulties involved, as explained. In the absence of availability of these amounts relating to the period upto 31st March 2009, we are unable to comment on the impact thereof on the carrying value of project inventories, revenue recognition and outstanding debtors and other adjustments that may be required.

Subject to that stated in clause g) and h) above having its impact as aforesaid, in our opinion and to the best of our information and according to the explanations given to us, the said accounts read with the Accounting policies and Notes thereon give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

i) In the case of Balance Sheet, of the state of affairs of the Company as at March 31, 2011;

ii) In the case of Profit and Loss Account, of the Profit for the year ended on that date; and

iii) In the case of Cash Flow Statement, of the Cash flows for the year ended on that date.

ANNEXURE TO AUDITORS' REPORT (Annexure referred to in our report of even date)

1. (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) The Company has a phased programme of physical verification of its fixed assets which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. All the fixed assets identified during the year for verification have not been physically verified by the management. However, discrepancies noticed during physical verification have been recorded and accounted for in the books of account to the extent of verification carried out.

(c) Fixed assets disposed off during the year were not substantial.

2. (a) As explained to us, physical verification has been conducted by the management at reasonable intervals in respect of building material, stores & spares and inventory of shops/ flats/ houses. In our opinion, the frequency of such verification is reasonable.

(b) The procedures for the physical verification of inventory followed by the management are, in our opinion, reasonable and adequate in relation to the size of the Company and nature of its business.

(c) In our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material and have been properly dealt with in the books of account.

3. (a) The company has not granted any loans, secured or unsecured, to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956.

(b) Since there are no such loans, the comments regarding repayment of the principal amount and interest due thereon and overdue amounts are not required.

(c) The company has taken deposits from one of the directors covered in the register maintained under section 301 of the Companies Act, 1956. In our opinion the rate of interest and other terms and conditions of such deposits are not prima facie, prejudicial to the interest of the company. The maximum amount of deposit during the year was Rs. 9 lacs and the year end balance was also Rs. 9 lacs.

(d) In respect of deposits taken, repayment of the principal and interest has been regular. There are no overdue amounts at the year end.

4. In our opinion, and according to the information and explanations given to us during the course of audit, there are adequate internal control systems commensurate with size of the Company and the nature of its business with regard to purchase of inventory and fixed assets and for the sale of services. Further, on the basis of our examination of the books & records of the company, carried out in accordance with the generally accepted auditing practices in India, we have neither come across nor have we been informed of any instance of major weaknesses in the aforesaid internal control systems. The company's activity does not qualify for sale of goods. However, the internal control systems with regard to documentation of advances given to land owning companies/ collaborators/ associates/ others need improvement.

5. (a) To the best of our knowledge and belief and according to the information and explanations given to us, we are of the opinion that particulars of contracts or arrangements that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions with parties in pursuance of contracts or arrangements, with whom transactions exceeding the value of Rupees Five Lacs in respect of each party have taken place during the financial year, are at prices, which are reasonable, having regard to the prevailing market prices at the relevant time where such market prices are available.

6. In respect of fixed deposits accepted from the public, the provisions of section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 including the Companies (Acceptance of Deposit) Rules, 1975 have been complied with. We have been informed that no order has been passed by Company Law Board or National Company Law Tribunal or RBI or any Court or any other Tribunal in this regard.

7. In our opinion, the Company has an internal audit system commensurate with the size & nature of its business.

8. The Central Government has not prescribed for maintenance of Cost Accounting records pursuant to the requirements of clause (d) of sub-section (1) of section 209 of the Companies Act, 1956 for any of the activities of the company.

9. (a) In our opinion and according to the information and explanations given to us, according to the records of the Company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Sales tax, Wealth-tax, Custom Duty, Excise Duty, Cess and other material statutory dues, wherever applicable, have been generally regularly deposited with the appropriate authorities except in certain cases of delays of Service Tax, Employees State Insurance and Tax deducted at source which have been deposited with interest. However there are no such undisputed statutory dues payable for a period of more than six months from the date they became payable as at March 31, 2011.

(b) According to the information and explanations given to us and as per the books and records examined by us, there are no dues of Customs duty, Excise duty, Service tax and Cess which have not been deposited on account of any dispute, except the following in respect of disputed Sales tax, Wealth tax and Income Tax along with the forum where dispute is pending:

S. No. Name of Statute Nature of Dues Amount Assessment Forum where pending (Rs.in lacs) Year

(i) Income Tax Act Interest on FBT 0.49 2006-07 Asstt. Commissioner of Income Tax, New Delhi

(ii) Wealth Tax Act Wealth Tax 0.45 1992-93 Asstt. Commissioner of Wealth Tax, New Delhi

(iii) Wealth Tax Act Wealth Tax 0.50 1997-98 Deputy Commissioner of Wealth Tax, New Delhi

(iv) Wealth Tax Act Wealth Tax 0.96 2000-01 Deputy Commissioner of Wealth Tax, New Delhi

(v) Local Area Local Area 8.73 2003-04 Joint Excise & Taxation Development Tax Act Development Tax Commissioner (Appeal), Gurgaon

(vi) Sales Tax Act Delhi Sales Tax 4.47 1999-2000 Assessing Officer Delhi

(vii) Sales Tax Act Delhi Sales Tax 33.17 2004-05 Sales Tax Tribunal, Delhi

(viii) Sales Tax Act Haryana Sales Tax 11.68 2005-06 Joint Commissioner (Appeal), Gurgaon

(ix) Sales Tax Act UP Sales Tax 55.02 2005-06 Trade Tax Tribunal, Ghaziabad

(x) Sales Tax Act UP Sales Tax 96.04 2006-07 Trade Tax Tribunal, Ghaziabad

(xi) Sales Tax Act UP Sales Tax 0.29 2006-07 Additional Commissioner (Appeal), Ghaziabad

(xii) Sales Tax Act UP Sales Tax 2.38 2008-09 Additional Commissioner (Appeal), Ghaziabad

(Xiii) Sales Tax Act UP Sales Tax 1.08 2008-09 Additional Commissioner (Appeal), Ghaziabad

(xiv) Sales Tax Act UP Sales Tax 62.19 2007-08 Trade Tax Tribunal, Ghaziabad

10. There are no accumulated losses of the Company as at the end of the financial year. There are no cash losses during the financial year and in the immediately preceding financial year

11. According to the information and explanations given to us and as per the books and records examined by us, we report as follows:

a) In respect of payments due for Debentures on account of Principal, Premium and Interest aggregating Rs 1350 lacs to LIC Mutual Fund and Rs 1000 Lacs to HDFC India Real Estate Fund (HIREF), payments were delayed from 1 day to 341 days and these dues were cleared upto the close of financial year. Other amount due in respect of Debentures to LIC Mutual Fund aggregating Rs 9379 Lacs and HIREF of Rs 2008 Lacs have been outstanding for 1 day to 250 days as at the close of financial year and are outstanding as on date.

b) Amounts due in respect of Term Loans from Banks / Financial Institutions on account of Principal & Interest aggregating Rs 22739.03 Lacs (as per detail noted here under) were delayed and have been fully paid.

c) In respect of other amounts due to Banks / Financial Institutions aggregating to Rs 4983.63 Lacs (as per details noted hereunder), the payments have been delayed from 1 days to 355 days and are outstanding as on date.

As explained by the management, the delays are attributable to the delays in processing of Company's proposal for rescheduling and restructuring in several cases.

Note: - 1. The detail of amounts referred to in Clause (b) above

LIC of India 2 instances of Rs.1780.61 Lacs (Rs 1680.61 Lacs during the financial year and Rs 100 Lacs subsequently) with delay ranging from 1 to 345 days

IDBI Bank Ltd. 9 instances of Rs. 660.41 lacs (Rs 589.44 Lacs during the financial year and Rs 70.97 Lacs subsequently) with delay ranging from 1 to 90 days,

Central Bank of India 10 instances of Rs. 912.49 lacs (Rs 626.28 Lacs during the financial year and Rs 286.21 Lacs subsequently) with delay ranging from 1 to 69 days,

United Bank of India 10 instances of Rs. 1358.87 lacs (Rs 1124.72 Lacs during the financial year and Rs 234.15 Lacs subsequently) with delay ranging from 6 to 89 days,

UCO Bank 10 instances of Rs. 5632.71 lacs (Rs 1059.83 Lacs during the financial year and Rs 4572.88 Lacs subsequently) with delays ranging from 1 to 90 days,

Yes Bank Ltd. 2 instances of Rs. 1897.42 lacs (Rs 1116.71 Lacs during the financial year and Rs 780.71 Lacs subsequently) with delays ranging from 1 to 86 days,

Punjab National Bank 5 instances of Rs. 2974.05 (Rs 2441.18 Lacs during the financial year and Rs 532.87 Lacs subsequently) with delays ranging from 1 to 89 days,

Syndicate Bank 5 instances of Rs. 362.14 lacs (Rs 353.71 Lacs during the financial year and Rs 8.43 Lacs subsequently) with delays ranging from 1 to 50 days,

DSP MLC 4 instances of Rs. 515.91 Lacs (during the financial year) with delays ranging from 1 to 60 days,

IFCI Factors Limited 4 instances of Rs.79.42 lacs (Rs 77.07 Lacs during the financial year and Rs 2.35 Lacs subsequently) with delays ranging from 1 to 10 days,

HDFC Limited 35 instances of Rs. 4159.40 lacs (Rs 3984.56 Lacs during the financial year and Rs 174.84 Lacs subsequently) with delays ranging from 1 to 70 days, and

LIC Housing Finance Limited 12 instances of Rs. 2405.59 lacs (Rs 2061.59 Lacs during the financial year and Rs 344 Lacs subsequently) with delays ranging from 1 to 33 days.

2. The Detail of amounts referred to in Clause c) above

LIC of India 3 instances of Rs.1752.67 lacs ,

United Bank of India 2 instances of Rs. 479.99 lacs, and

HDFC Limited 1 instance of Rs. 2750.96 lacs,

12. According to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The Company does not fall within the category of Chit fund / Nidhi / Mutual Benefit fund / Society and hence the related reporting requirements of the Order are not applicable.

14. According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments and hence the related reporting requirements of the Order are not applicable.

15. The Company has given guarantees against loans taken by others from banks & financial institutions; the terms & conditions of such guarantees are not, prima facie, prejudicial to the interest of the company.

16. In our opinion and according to the information and explanations given to us, the term loans raised during the year by the Company have been generally applied for the purpose for which the said loans were obtained and for overall project related activity in general.

17. According to the information and explanations given to us and as per the books and records examined by us, on an overall examination of the Balance Sheet of the company, the funds raised by the Company on short-term basis have not been applied for long-term investment.

18. The Company has not made any preferential allotment of shares to parties and Companies covered in the register maintained under section 301 of the Companies Act, 1956.

19. According to the information and explanations given to us and the records examined by us, the company has created necessary securities for the debentures issued except those issued to one of the lenders wherein the security provided by the company is less than the total amount of debentures necessitating classification of the balance amount of debentures as unsecured. We are explained that the said lender is not pursuing for any additional security.

20. The Company has raised funds by way of preferential and QIP issues during the year, the funds having been utilized for repayment of loans and other corporate purposes as defined in the terms of respective issues.

21. During the course of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India, we have neither come across any instance of fraud on or by the Company, noticed and reported during the year, nor have we been informed of such case by the management.

For S. S. KOTHARI MEHTA & CO.

Chartered Accountants

Firm Reg. No. 000756N

( ARUN K. TULSIAN )

Partner

Membership No. 89907

Place : New Delhi

Dated: 26th May, 2011

Mar 31, 2010

We have audited the attached Balance Sheet of Ansal Properties & Infrastructure Limited as at 31st March, 2010 and also the Profit & Loss Account and the Cash Flow Statement of the Company for the year ended on that date, annexed thereto.

These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on ouraudit

We have conducted ouraudit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basisforouropinion.

As required by the Companies (Auditors Report) Order, 2003 as amended by the Companies (Auditors Report) (Amendment) Order, 2004 (collectively the Order) issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956 and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

Further to our comments in the Annexure referred to above, we report that:

a) We have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary forthe purpose of our audit;

b) In our opinion, proper books of account, as required by law, have been kept by the Company so far as appears from our examination of those books;

c) The Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

d) In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statement, dealt with by this report, comply withtheAccountingStandardsreferredtoinsub-section(3C)ofSection211 ofthe Companies Act, 1956.

e) On the basis of written representations received from the directors as on 31st March, 2010 and taken on record by the Board of Directors, we report that none ofthe directors is disqualified as on 31 st March, 2010 from being appointed as a director in terms of clause (g) of sub section (1) of section 274 ofthe Companies Act, 1956.

f) Without qualifying our opinion, we draw attention to:

i. Note no.4 of Schedule 17 wherein the company has claimed exemption of Rs. 3408 lacs for the year under

section 80 lAof the Income Tax Act, 1961 being tax profits arising out of sale of Industrial Park units, pending the notification ofthe same by Central Board of Direct Taxes. Further the company has taken opinion from a senior counsel that its application satisfies all the conditions specified in the said Scheme of Industrial Park. We have relied on management contention.

ii. Note no. 5(b) of Schedule 17 wherein the company is carrying project inventory of Rs. 16675 lacs for one of its

Group Housing projects. The company has applied to the Authority for developing the project on the basis of revised Scheme announced by the Authority which is pending approval. The management is of the view that there is no impairment in the value of land/project and we have relied on management contention.

iii. Note no.5 (a) of schedule 17 wherein the company has given advances to land owning companies/ collaborators/ others for purchase of land/ others of Rs.36624 lacs. In the absence of details of land purchased/ end use for intended purposes and financial position of these parties, we understand from management that such advances are given in respect of ongoing transactions and are regarded as being in the normal course of business. We have relied on management contention.

iv. Note no. 5 (e) of Schedule 17 wherein sundry creditors of Rs. 19199 lacs outstanding towards purchase of land/ services/ others for which details and/ or reconciliations with the parties are not available with the company. We understand from management that the desired information is being complied and will not have material impact on the accounts. We have relied on management contention.

v. Note no. 5(c) of schedule 17 wherein in accordance with joint development agreement with a collaborator for developing a project, due to initial delays in starting the project and slow pace of construction, the collaborator having suffered financial and other business losses, entered into a settlement deed by virtue of which the company has paid Rs.6280 lacs towards compensation for these losses and considered the same as part of the project cost. We have relied on the management contention that such settlements arise in the normal course of business for purchase of collaborators right, project land and consequently transfer of licence in the name of the company.

g) The company has not considered for the estimated cost of land to be incurred in future for one of its large Township projects and also not considered borrowing costs to be incurred in future in general for determining the project revenues, project inventory and debtors. Referring Note no. 2 of schedule 17, wherein according to the management the amount of these items cannot be determined at this stage, we are unable to comment on the consequential impact thereof on the carrying value of project inventory, revenue recognition and outstanding debtors and other adjustments that may be necessitated on this account.

h) The Company has, during the year, changed its accounting policy in respect of accounting for certain costs in the

nature of administration and selling costs by charging them off to Profit & Loss against the earlier policy of treating them as part of project cost for determining project inventory, revenue and debtors. Expenditure of such nature incurred in earlier years and considered as part of project inventories under Projects/ Contract work in progress upto 31st March, 2009 has been carried forward as such. Such amount has not been determined by the management in view of the practical difficulties involved, as explained. In the absence of availability of these amounts relating to the period upto 31st March 2009, we are unable to comment on the impact thereof on the carrying value of project inventories, revenue recognition and outstanding debtors and other adjustments that may be required.

Subject to that stated in clause g) and h) above having its impact as aforesaid, in our opinion and to the best of our information and according to the explanations given to us, the said accounts read with the Accounting policies and Notes thereon give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

i) In the case of Balance Sheet, of the state of affairs of the Company as at 31 st March, 2010;

ii) ln the case of Profit and Loss Account,of the Profit for the year ende don that date ;and

iii) In the case of Cash Flow Statement,of the Cash flows for the year ended on that date.

ANNEXURE TO AUDITORSREPORT (Annexure referred to in our report of even date)

1. (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) The Company has a phased programme of physical verification of its fixed assets which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. All the fixed assets identified during the year for verification have not been physically verified by the management. However, no material discrepancies were noticed on the assets verified during the year to the extent of verification carried out.

(c) Fixed assets disposed off during the year were not substantial.

2. (a) As explained to us, physical verification has been conducted by the management at reasonable intervals in respect of building material, stores & spares and inventory of shops /flats /houses. ln our opinion, the frequency of such verification is reasonable.

(b) The procedures for the physical verification of inventory followed by the management are, in our opinion, reasonable and adequate in relation to the size of the Company and nature of its business.

(c) In our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material and have been properly dealt with in the books of account.

3. (a) The company has not granted any loans, secured or unsecured, to companies, firms or other parties listed in the register maintainedl under section 301 of the Companies Act, 1956.

(b) Since there are no such loans, the comments regarding repayment of the principal amount and interest due thereon and overdue amounts are not required.

(c) The company has taken deposits from one of the parties covered in the register maintained undersection 301 of the Companies Act, 1956. In our opinion the rate of interest and other terms and conditions of such deposits are not prima facie, prejudicial to the interest of the company. The maximum amount of deposit during the year was Rs. 2 lacs and the year end balance was also Rs. 2 lacs.

(d) In respect of deposit taken, repayment of the principal and interest has been regular. There are no overdue amountsattheyearend.

4. In our opinion, and according to the information and explanations given to us during the course of audit, there are adequate internal control systems commensurate with size of the Company and the nature of its business with regard to purchase of inventory and fixed assets and for the sale of services. Further, on the basis of our examination of the books & records of the company, carried out in accordance with the generally accepted auditing practices in India, we have neither come across nor have we been informed of any instance of major weaknesses in the aforesaid internal control systems. The companys activity does not qualify for sale of goods. However, the internal control systems with regard to documentation of advances given to land owning companies/collaborators/associates/others need improvement.

5. (a) To the best of our knowledge and belief and according to the information and explanations given to us, we are of the opinion that particulars of transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions with parties in pursuance of contracts or arrangements, with whom transactions exceeding the value of Rupees Five Lacs in respect of each party have been entered into during the financial year, are at prices, which are reasonable, having regard to the prevailing market prices at the relevant time where such market prices are available.

6. In respect of fixed deposits accepted from the public, the provisions of section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 including the Companies (Acceptance of Deposit) Rules, 1975 have been complied with. We have been informed that no order has been passed by Company Law Board or National Company Law Tribunal or RBI or any Court orany otherTribunal in this regard.

7. In our opinion, the Company has an internal audit system commensurate with the size & nature of its business.

8. The Central Government has not prescribed for maintenance of Cost Accounting records pursuant to the requirements of clause (d) of sub-section (1) of section 209 of the Companies Act, 1956 for any of the activities of the company.

9. (a) In our opinion and according to the information and explanations given to us, according to the records of the company, undisputed statutory dues including Provident Fund Investor Education and Protection Fund, Employees State Insurance, Sales tax, Wealth-tax, Custom Duty, Excise Duty, Cess and other material statutory dues, wherever applicable, have been generally regularly deposited with the appropriate authorities except in certain cases of delays of Service Tax and Tax deducted at source which have been deposited with interest. However there are no undisputed statutory dues payable for a period of more than six months from the date they became payable as at 31 st March,2010.

(b) According to the information and explanations given to us and as per the books and records examined by us, there are no dues of Custom duty, Excise duty and Wealth tax which have not been deposited on account of any dispute, except the following in respect of disputed Sales tax, Service tax, Cess and Income Tax along with the forum where dispute is pending:

S.No. Name of Statute Nature of Dues Amount Assessment Forum where pending

(Rs. In lacs) Year

(I) Income Tax Act Interest on FBT 0.49 2006-07 Asstt. Commissioner

of Income Tax, New Delhi

(ii) Wealth Tax Act Wealth Tax 0.45 1992-93 Asstt. Commissioner of Wealth Tax, New Delhi

(iii) Wealth Tax Act Wealth Tax 0.50 1997-98 Deputy Commissioner

of Wealth Tax, New Delhi

(iv) Wealth Tax Act Wealth Tax Act 0.96 2000-01 Deputy Commissioner of

Wealth Tax, New Delhi

(v) Local Area Local Area 8.72 2003-04 Joint Excise & Taxation

Development Tax Act Development Tax Commissioner (Appeal),

Gurgaon

(vi)Local Sales Tax Act Delhi Sales Tax 4.47 1999-2000 Assessing Officer, Delhi

(vii) Local SalesTax Act Delhi Sales Tax 33.17 2004-05 Sales Tax Tribunal, Delhi

(viii) Local SalesTaxAct Haryana SalesTax 13.16 2005-06 Joint Commissioner

(Appeal), Gurgaon.

(ix) Local Sales Tax Act VAT 39.93 2005-06 Additional Commissioner

(Appeal), Ghaziabad

(x) Local Sales Tax Act VAT 79.76 2006-07 Additional Commissioner

(Appeal), Ghaziabad

(xi) Local Sales Tax Act VAT 0.29 2006-07 Additional Commissioner

(Appeal), Ghaziabad

(xii) Local Sales Tax Act VAT 2.38 2008-09 Additional Commissioner

(Appeal), Ghaziabad

(xiii) Local Sales Tax Act VAT 1.08 2008-09 Additional Commissioner

(Appeal), Ghaziabad

10. There are no accumulated losses of the Company as at the end of the financial year. There are no cash losses during the financial yearand in the immediately preceding financial year.

11. According to the information and explanations given to us and as per the books and records examined by us, the Company has defaulted in repayment of dues to financial institutions, banks and debenture holders, for Term Loans (Principal & interest) LIC of India 6 instances ofRs. 829.10 lacs with delays ranging from 1 to 89 days,

IDBIBankLtd. 13 instances of Rs. 723.94 lacs with delays ranging from 1 to 87 days, Central Bank of India 10 instances ofRs. 443.88 lacs with delays ranging from 1 to 69 days, Debentures (Principal, redemption premium & interest) LIC mutual fund 15instancesofRs.3447.60 lacswith delays rangingfrom 1 to 127 days,

HDFC India Real Estate Fund (HI REF) 2 instances ofRs. 1399.98 lacs with delays ranging from 1 to 180 days,

The defaults having been cleared upto the close of the financial year, while for

Term Loans (Principal & interest)

LIC of India 4 instances of Rs.816.20 lacs,

IDBIBankLtd. 3 instances ofRs. 138.64lacs,

Central Bank of India 2 instances ofRs. 369.02 lacs,

United Bank of India 2 instances ofRs. 64.28 lacs,

UCO Bank Unstance ofRs. 58.80 lacs,

Yes Bank Ltd. 1 instance ofRs. 60.74 lacs,

Punjab National Bank Unstance ofRs. 63.50 lacs,

Debentures (Principal, redemption premium & interest)

LIC mutual fund 8 instances ofRs. 554.32 lacs,

HDFC India Real Estate Fund (HI REF)3 instances ofRs, 7401.29 lacs,

with delays ranging from 1 to 127 days and out of the total of the above dues outstanding as on 31st March 2010, an amount ofRs. 1869.92 lacs has been paid subsequent to the close of the year.

12. According to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares debentures and other securities.

13. The Company does not fall within the category of Chit fund / Nidhi / Mutual Benefit fund / Society and hence the related reporting requirements of the Order are not applicable.

14. According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments and hence the related reporting requirements of the Order are not applicable.

15. The Company has given guarantees against loans taken by others from banks & financial institutions; the terms & conditions of such guarantees are not, prima facie, prejudicial to the interest of the company.

16. In our opinion and according to the information and explanations given to us, the term loans raised during the year by the Company have been generally applied for the purpose for which the said loans were obtained and for overall project related activity in general.

17. According to the information and explanations given to us and as per the books and records examined by us, on an overall examination of the Balance Sheet of the company, the funds raised by the Company on short-term basis have not been applied for long-term investment.

18 The Company has not made any preferential allotment of shares to parties and Companies covered in the register maintained undersection 301 of the Companies Act, 1956.

19. According to the information and explanations given to us and the records examined by us, the company has created necessary securities for the debentures issued except those issued to one of the lenders wherein the security provided by the company is less than the total amount of debentures necessitating classification of the balance amount of debentures as unsecured. We are explained that the said lender is not pursuing for any additional security.

20. The Company has not raised any money by way of public issues during the year.

21. During the course of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India, we have neither come across any instance of fraud on or by the Company, noticed and reported during the year, nor have we been informed of such case by the management.

ForS.S.KOTHARI MEHTA & CO.

Chartered Accountants Firm Reg. No. 000756N

(ARUNK.TULSIAN)

Partner

Membership No. 89907 Place: New Delhi Dated: 31st May, 2010

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