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Auditor Report of NBCC (India) Ltd.

Mar 31, 2023

NBCC (India) Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying Standalone Financial Statements of NBCC (India) Limited (herein referred to as "the Company"), which comprise the standalone balance sheet as at March 31, 2023, the standalone statement of profit and loss (including other comprehensive income), the standalone statement of changes in equity and the standalone statement of cash flows for the year then ended and notes to the standalone financial statements including a summary of the significant accounting policies and other explanatory information, in which is included the unaudited financial statements of 3 foreign branches of the Company located at Mauritius, Maldives and Seychelles for the year ended on that date (as certified by the management) (hereinafter referred to as "the Standalone Financial Statements").

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 Companies Act, 2013, as amended (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, 2023, and its profit and other comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit of the Standalone Financial Statements in accordance with the Standards on Auditing (SA''s) specified under Section 143(10) of the Act. Our responsibilities under those Standards are further described in the ''Auditors Responsibilities for the Audit of the Standalone Financial Statements'' section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India ("the ICAI") together with the ethical requirements that are relevant to our audit of the Standalone Financial Statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI''s Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the Standalone Financial Statements.

Emphasis of Matters

We invite attention to the following matters in the notes to the Standalone Financial Statement:

(i) Note No. 53(i) regarding the purchase a Group Housing plot in Naya Raipur from Naya Raipur Development Authority (NRDA) on lease for a sum of '' 2,099.37 Lakh in the year 2014. The lease deed shall be executed between the owner of association/housing society and NRDA as per the terms of the Development Agreement. However, the construction on the said land was kept abeyance up to previous Financial Year. The development of plot is yet to start subject to the favorable market condition.

(ii) Note No. 53 (ii) regarding the non-execution of conveyance deed in favour of the Company and other matters incidental thereto, in respect of the land at Faridabad (Haryana), forming part of the land bank (inventory) involving, in aggregate, a sum of '' 13,178.41 Lakh;

(iii) Note No. 53(iii) regarding payment by the Company to Land & Development Office, Ministry of Housing and Urban Affairs as premium for availing additional ground coverage at Company''s built up and sold project "NBCC Plaza" and incurring of other construction cost and consequential expenses thereon for project which is stuck up on account of similar demand of '' 3,224.45 Lakh, raised by Municipal Corporation of Delhi (Erstwhile South Delhi Municipal Corporation) in respect of additional ground coverage, in the year 2015.

(iv) Note No. 53(vi) regarding developed real estate projects costing '' 5,766.21 Lakh. The Company initiated the sale of the project in year 2014-15, however no sale could be affected. The net realisable value of the project deteriorated, and the Company has made provision of '' 641.21 Lakh towards impairment in cost of the work in progress.

(v) Note No. 53(viii) regarding developed real estate project Sector- 37 D, Gurugram, which exhibited structural cracks. The management has decided to settle with all the home buyers/allottees by way of buyback of their flats/units by paying their settlement amount. In view of the same, the Company has made a provision for expected loss of '' 16,060.86 Lakh for the year ended March 31, 2023 against the sale of flats/units, towards cost of stamp duty and registration charges for execution of flats/units in favour of the Company. Further, claims of homebuyers/allottees and contractor which is sub-judice and are pending at various forums amounting to '' 6,187.20 Lakh including the Company''s counter claims regarding the recovery of '' 75,000 Lakh in this matter from the contractors and others.

(vi) Note No. 54(c) regarding the purchase of land at Koyal Enclave from Ghaziabad Development Authority (GDA) in the year 2015 and the Company has incurred a total cost of '' 5,503.13 Lakh (including provision for stamp duty). The lease deed and the possession in respect of this land have not yet executed. Consequent to the opinion issued from the Expert Advisiory Committee of the Institute of Chartered Accountants of India, amount paid to GDA has been reclassified from Land Inventory to advance paid for Land.

(vii) Note No. 41 (A) (b) (i) and (B) (i) regarding the ongoing litigation in respect of the demand of Value Added tax including interest and penalty (DVAT Demand) as per the demand notice order from Delhi Value Added Tax Authority for '' 40,480.01 Lakh in earlier years. During the current Financial Year, the said DVAT Demand has been set aside by Hon''ble Appellate Tribunal and remanded back for recalculation of the said tax liability.

Our opinion is not modified in respect of above matters.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Standalone Financial Statements of the current period. These matters were addressed in the context of our audit of the Standalone Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Description of Key Audit Matter

Accuracy of recognition, measurement, presentation and disclosures of revenues and other related balances in respect of "Revenue from contracts with Customers" under Ind AS 115 (Revenue Accounting Standard)

The key audit matter

How the matter was addressed in our audit

The application of this accounting standard involves certain key judgments relating to identification of distinct performance obligations, determination of transaction price of identified performance obligations, the appropriateness of the basis used to measure revenue recognized over a period, and disclosures including presentations of balances in the financial statements.

An estimated effort is a critical estimate to determine revenue, as it requires consideration of progress of the contract. Efforts incurred till date; efforts required to complete the remaining performance obligation.

Refer Note No. 27 to the Standalone Financial Statements

Principal Audit Procedures

Our audit approach consisted testing of the design and operating effectiveness of internal controls and procedures as follows:

Evaluated the effectiveness of control over the preparation of information that are designed to ensure the completeness and accuracy.

â¢ Selected a sample of existing continuing contracts and new contracts, and tested the operating effectiveness of the internal control, relating to identification of the distinct performance obligations and determination of transaction price.

â¢ Tested the relevant information, accounting systems and change relating to contracts and related information used in recording and disclosing revenue in accordance with the Ind AS 115.

â¢ Reviewed some sample contracts to identify possible delays in achieving milestones which require change in estimated efforts to complete the remaining performance obligation.

â¢ Performed analytical procedures and test of details for reasonableness and other related material items.

The key audit matter	How the matter was addressed in our audit
Assessment and recoverability of trade receivables
The Company has net trade receivables outstanding of '' 1,57,721.07 Lakh at the end of March 31, 2023. These balances are related to revenue recognized in line with Ind AS for ongoing contracts and completed contracts. The assessment of its recoverability is a key audit matter in the audit due to its size and high level of management judgment. Refer Note No. 11 to the Standalone Financial Statements.	Principal Audit Procedure We assessed the Company''s internal process to recognize the revenue and review mechanism of trade receivables. Our audit approach consisted testing of the design and operating effectiveness of internal controls and procedures as follows: â¢ Evaluated the process of invoicing, verification, and reconciliation with customer. â¢ Obtained the list of project wise outstanding details and its review mechanism by the management. â¢ Reviewed the guidelines and policies of the Company for impairment of trade receivables. â¢ Tested the accuracy of ageing of trade receivables at the year-end on sampling basis. â¢ Performed analytical procedures and test of data, their reasonableness and recoverability and other material items.
Assessing the carrying value of Inventory and advances paid for land procurements
The Company''s inventory comprises of Land bank, Real Estate completed projects and Real Estate Construction Work in progress. As at March 31, 2023 the carrying values of inventories amounts to '' 1,40,770.69 Lakh. The inventories are carried at the lower of the cost and net realizable value (''NRV''). The determination of the NRV involves estimates based on prevailing market conditions, current prices, and expected date of commencement and completion of the project, the estimated future selling price, cost to complete projects and selling costs. Considering significance of the amount of carrying value of inventories in the Standalone Financial Statements and the involvement of significant estimation and judgement in such assessment of NRV, the same has been considered as key audit matter. Further, the Company has made various advances and deposits to the seller/intermediaries towards purchase of land during the course of obtaining clear and marketable title, free from all encumbrances and transfer of legal title to the Company, where upon it is transferred to land stock under inventories. With respect to land advance given, the net recoverable value is based on the management''s estimates and internal documentation, which include, among other things, the likelihood when the land acquisition would be completed, the expected date of plan approvals for commencement of project, estimation of sale prices and construction costs and Company''s business plans in respect of such planned developments. The Company has reassessed its future business plans and key assumptions as at March 31, 2023 while assessing the adequacy of carrying value of inventories and land advances. Refer Note No. 9 to the Standalone Financial Statements.	Principal Audit Procedures Our audit procedures/testing included, among others: â¢ Read and evaluated the accounting policies and disclosures made in the Standalone Financial Statements with respect to inventories. â¢ Understood and reviewed the management''s process and methodology of using key assumptions for determination of NRV of the inventories. â¢ Tested the NRV of the inventories to its carrying value in the books on sample basis. â¢ Where the Company involved specialists to perform valuations, we also performed the following procedures: â¢ Obtained and read the valuation report used by the management for determining the NRV. â¢ Considered the independence, competence and objectivity of the specialist involved in determination of valuation. â¢ Involved experts to review the assumptions used by the management specialists In respect of land advances, our audit procedures included the following: â¢ Obtained status update from the management and verified the underlying documents for related developments. â¢ Compared the acquisition cost of the underlying land with current market price in similar locations. â¢ Evaluated the management assessment with respect to recoverability of those advances and changes if any, in the business plans relating to such advances.

The key audit matter

How the matter was addressed in our audit

Provisions and Contingent Liabilities

The Company is involved in various taxes and other disputes for which final outcomes cannot be easily predicted and which could potentially result in significant liabilities. The assessment of the risks associated with the litigations is based on complex assumptions, which require the use of judgment and such judgment relates, primarily, to the assessment of the uncertainties connected to the prediction of the outcome of the proceedings and to the adequacy of the disclosures in the financial statements. Because of the judgment required, the materiality of such litigations and the complexity of the assessment process, the area is a key matter for our audit.

Refer Note No. 41 to the Standalone Financial Statements.

Principal Audit Procedures

Our audit procedure in response to this key Audit Matter included,

among others:

â¢ Assessment of the process and relevant controls implemented to identify legal and tax litigations and pending administrative proceedings.

â¢ Assessment of assumptions used in the evaluation of potential legal and tax risks performed by the legal and tax department of the Company considering the legal precedence and other rulings in similar cases.

â¢ Inquiry with legal and tax departments of the Company regarding the status of the most significant disputes and inspection of the key relevant documentation.

â¢ Analysis of opinion received from the experts, wherever available.

â¢ Review of the adequacy of the disclosures in the notes to the financial statements.

Information other than the Standalone Financial Statements and Auditors'' Report thereon

The Company''s management and Board of Directors are responsible for the preparation of other information. The other information comprises the information included in Management Discussion and Analysis Report, Board''s Report including Annexures to Board Report, Business Responsibility and Sustainability Report, Corporate Governance and Shareholder''s information but does not include the Standalone Financial Statements and our audit report thereon. The other information is expected to be made available to us after the date of this auditor''s report.

Our opinion on the Standalone Financial Statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the Standalone Financial Statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the Standalone Financial Statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements

The Company''s management and Board of Directors are responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these Standalone Financial Statements that give a true and fair view of the financial position, financial performance, including other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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 Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the Standalone Financial Statements, management and Board of Directors are responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors are also responsible for overseeing the Company''s financial reporting process.

Auditors'' Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the Standalone Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors'' report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Standalone Financial Statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

â¢ Identify and assess the risks of material misstatement of the Standalone Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

â¢ Obtain an understanding of internal financial control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.

â¢ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management and Board of Directors.

â¢ Conclude on the appropriateness of management''s and Board of Directors use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors'' report to the related disclosures in the Standalone Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors'' report. However, future events or conditions may cause the Company to cease to continue as a going concern.

â¢ Evaluate the overall presentation, structure, and content of the Standalone Financial Statements, including the disclosures, and whether the Standalone Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the Standalone Financial Statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the Standalone Financial Statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the Standalone Financial Statements.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Standalone Financial Statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Other Matters

a) We did not audit the financial statement/information of 2 foreign branches namely Mauritius and Maldives included in the Standalone Financial Statements of the Company whose financial statements/financial information reflect total assets of '' 24,878.47 Lakh (Previous Year '' 25,958.78 Lakh) as on March 31, 2023 and total revenue of '' 25,224.55 Lakh (Previous Year '' 7,591.20 Lakh) for the year ended on that date, as considered in the Standalone Financial Statements. The financial statements/information of said branches have not been audited either by us or by other auditors and our opinion, so far as it relates to the amounts and disclosures included in respect of said branches duly certified by the management have been furnished to us, are solely based on the management certified financial statements/ information. Further, the branch at Seychelles has not yet commenced any activity and management has confirmed that there is no financial transaction in the said branch yet.

b) The comparative Standalone Financial Statements of the Company for the corresponding year ended March 31, 2022 was audited by predecessor auditor who expressed unmodified opinion on those Standalone Financial Statements in their audit report dated May 30, 2022.

Our opinion is not modified in respect of above said matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2020 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in Annexure A, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

2. As required by Section 143(3) of the Act, we report to the extent applicable 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 and proper returns adequate for the purpose of our audit have been received from the branches not visited by us.

(c) The unaudited financial statements/financial information on the accounts of two branches of the Company has been provided to us duly certified by the management of the Company and have been received, properly dealt with by us in preparing this report.

(d) The Standalone Balance Sheet, the Standalone Statement of Profit and Loss including Standalone Other Comprehensive Income, the Standalone Statement of Changes in Equity and the Standalone Statement of Cash Flows dealt with by this report are in agreement with the books of account.

(e) In our opinion, the aforesaid Standalone Financial Statements comply with the Indian Accounting Standards specified under Section 133 of the Act read with the Companies (Accounting Standards) Rules, 2015 as amended;

(f) The Company being a Government Company, the provisions of Section 164(2) of the Act in respect of disqualification of directors are not applicable to the Company in terms of notification no. G.S.R.463(E) dated 5th June, 2015 issued by Ministry of Corporate Affairs, Government of India;

(g) With respect to the adequacy of the internal financial controls with reference to Standalone Financial Statements of the Company and the operating effectiveness of such controls, refer to our separate report in Annexure B. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls with reference to Standalone Financial Statements.

(h) With respect to the other matters to be included in the Auditor''s Report in accordance with the requirements of section 197(16) of the Act, as amended, we are informed that the Company being a Government Company, the provisions of section 197 read with schedule V of the Act, relating to managerial remuneration are not applicable to the Company in terms of Notification No. G.S.R. 463(E) dated 5th June 2015.

(i) With respect to the other matters to be included in the Auditors'' Report in accordance with the requirements of Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, 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 litigations on its financial position in its Standalone Financial Statements - Refer Note 41 to the Standalone Financial Statements;

(ii) The Company has made provisions, as required under the applicable laws or Indian Accounting Standards for material foreseeable losses, if any, on long-term contracts;

(iii) There has been no delay in transferring the amounts, required to be transferred to the Investor Education and Protection Fund were by the Company in accordance with the relevant provisions of the Act and Rules made thereunder;

(iv) (a) The management has represented that, to the best of its knowledge and belief, as stated in note 54 (a) (iv) to Standalone Financial Statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity (ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(b) The management has represented that, to the best of its knowledge and belief, as stated in note 54 (a) (iv) to the Standalone Financial Statements, no funds have been received by the Company from any person(s) or entity (ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(c) Based on such audit procedures that we considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (a) and (b) above contain any material misstatement;

(v) As stated in Note 42 to the Standalone Financial Statements;

a) The final dividend proposed in the previous year, declared, and paid by the Company during the year, is in accordance with Section 123 of the Act, as applicable.

b) The Board of directors of the Company have proposed final dividend for the year which is subject to the approval of the members at the ensuing annual general meeting. The amount of dividend proposed is in accordance with section 123 of the Act, as applicable.

(vi) As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable for the Company only with effect from April 1, 2023, reporting under clause (g) of Rule 11 is not applicable.

3. We are enclosing our report in terms of Section 143(5) of the Act, on the basis of such verification of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, in Annexure C on the directions issued by the Comptroller and Auditor General of India.

For ASA & Associates LLP

Chartered Accountants

Firm Registration No. 009571N/N500006

Sd/-

PARVEEN KUMAR

Partner

Membership No. 088810

UDIN: 23088810BGTOQI9501

Place: New Delhi

Date: May 29, 2023

Mar 31, 2022

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of NBCC (India) Limited (herein referred to as "the Company"), which comprise the balance sheet as at March 31, 2022, the statement of profit and loss (including other comprehensive income), the statement of changes in equity and the statement of cash flows for the year then ended and notes to the financial statements including a summary of the significant accounting policies and other explanatory information, in which is included the unaudited financial statements of 3 foreign branches of the company located at Mauritius, Maldives and Seychelles for the year ended on that date (as certified by the management) (hereinafter referred to as "the standalone financial statements").

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 Companies Act, 2013 ("the Act'') in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015, as amended, ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the company as at March 31, 2022, its profit, total comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs) specified under section 143 (10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditor''s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India ("ICAI") together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI''s Code of Ethics. We believe that the audit evidence, we have obtained, is sufficient and appropriate to provide a basis for our opinion on the standalone financial statements.

Emphasis of Matters

We invite attention to the following matters in the notes to the standalone financial statement:

i) Note No. 52(i) and 52(ii) regarding non-execution of conveyance deed in favour of the company and Note No. 52(iii) and 52(iv) regarding non handing over of possession and non-execution of lease deed(s) and other matters incidental thereto, in respect of various properties, forming part of the land bank (inventory) involving, in aggregate, a sum of Rs. 21,942.11 Lakh;

ii) Note No. 52(v) regarding payment by the company to L&DO, MoHUA as premium for availing additional ground coverage at company''s built up and sold project "NBCC Plaza" and incurring of other construction cost and consequential expenses thereon for project which is stuck up on account of similar demand raised by South Delhi Municipal Corporation in respect of additional ground coverage, in the year 2015;

iii) Note No. 52(vi) regarding developed real estate project having a carrying value of Rs. 8,701.85 Lakh and remaining unsold for want of environmental clearance;

iv) Note No. 52(vii) regarding developed real estate projects having a carrying value of Rs. 916.96 Lakh and remaining unsold due to unfavorable market conditions;

v) Note No. 52(viii) regarding developed real estate projects costing Rs. 5,766.21 Lakh and remaining unsold for over five years due to unfavorable market conditions resulting in deterioration in value by Rs. 1,005.81 Lakh;

vi) Note no. 52(x) regarding developed real estate project which exhibited structural cracks requiring vacation of 392 sold out units, resulting in write off of inventory amounting to Rs. 9,979.83 Lakh and further unascertained liabilities towards home buyers, which have not been provided due to pending decision by the management and the courts. The matter is also under investigation by vigilance department. [amount not ascertainable];

vii) Note No. 53(b) regarding the balances of trade receivables, loans and advances, security deposits, earnest money deposits, deposits and trade payables being subject to reconciliation, confirmation and consequential adjustments thereof.

viii) Note No. 53(d) regarding uncertainties arising out of the outbreak of COVID - 19 pandemic and disruptions in regular business operations due to lockdown and consequential assessment made by the management on its business and its associated financial risks;

Our opinion is not modified in respect of above matters.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

Key Audit Matters

Auditor''s Response

The application of this accounting standard involves certain key judgments relating to identification of distinct performance obligations, determination of transaction price of identified performance obligations, the appropriateness of the basis used to measure revenue recognized over aperiod, and disclosures including presentations of balances in the financial statements.

Refer Note No. 26 to the standalone financial statements.

Principal Audit Procedures

Our audit approach consisted testing of the design and operating effectiveness of internal controls and procedures as follows:

Evaluated the effectiveness of control over the preparation of information that are designed to ensure the completeness and accuracy.

Â¦ Selected a sample of existing continuing contracts and new contracts, and tested the operating effectiveness of the internal control, relating to identification of the distinct performance obligations and determination of transaction price.

Â¦ Tested the relevant information, accounting systems and change relating to contracts and related information used in recording and disclosing revenue in accordance with the Ind AS 115.

Â¦ Reviewed some sample of contracts to identify possible delays in achieving milestones which require change in estimated efforts to complete the remaining performance obligation.

Â¦ Performed analytical procedures and test of details for reasonableness and other related material items.

Assessment and recoverability of trade receivables

The company has net trade receivables outstanding of Rs. 1,60,910.15 Lakh at the end of 31^stMarch 2022.

These balances are related to revenue recognized in line with Ind AS for ongoing contracts and completed contracts. The assessment of its recoverability is a key audit matter in the audit due to its size and high level of management judgment.

Refer Note No. 10 to the standalone financial statements.

Principal Audit Procedures

We assessed the company''s internal process to recognize

the revenue and review mechanism of trade receivables.

Our audit approach consisted testing of the design

and operating effectiveness of internal controls and

procedures as follows:

Â¦ Evaluated the process of invoicing, verification and reconciliation with customer.

Â¦ Obtained the list of project wise outstanding details and its review mechanism by the management.

Â¦ Reviewed the guidelines and policies of the company for impairment of trade receivables.

Â¦ Tested the accuracy of ageing of trade receivables at the year end on sampling basis.

Â¦ Performed analytical procedures and test of data, their reasonableness and recoverability and other material items.

Provisions and Contingent Liabilities

The company is involved in various taxes and other disputes for which final outcomes cannot be easily predicted and which could potentially result in significant liabilities. The assessment of the risks associated with the litigations is based on complex assumptions, which require the use of judgment and such judgment relates, primarily, to the assessment of the uncertainties connected to the prediction of the outcome of the proceedings and to the adequacy of the disclosures in the financial statements. Because of the judgment required, the materiality of such litigations and the complexity of the assessment process, the area is a key matter for our audit.

Refer Note No. 40 to the standalone financial statements.

Principal Audit Procedures

Our audit procedure in response to this key Audit Matter

included, among others:

Â¦ Assessment of the process and relevant controls implemented to identify legal and tax litigations, and pending administrative proceedings.

Â¦ Assessment of assumptions used in the evaluation of potential legal and tax risks performed by the legal and tax department of the company considering the legal precedence and other rulings in similar cases.

Â¦ Inquiry with legal and tax departments of the company regarding the status of the most significant disputes and inspection of the key relevant documentation.

Â¦ Analysis of opinion received from the experts, wherever available.

Â¦ Review of the adequacy of the disclosures in the notes to the financial statements.

Information Other than the Standalone Financial Statements and Auditor''s Report Thereon

The company''s management is responsible for the preparation of the other information. The other information comprises the information included in director''s report and annexure but does not include the standalone financial statements and our auditor''s report thereon. The director''s report and annexure is expected to be made available to us after the date of this auditor''s report.

Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

When we read the ''Other information'', if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance and take appropriate actions, if required.

Management''s Responsibility and Those Charged with Governance for the Standalone Financial Statements

The management of the company and the board of directors are 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 including other comprehensive income and changes in equity and cash flows of the company in accordance with the Ind AS and other accounting principles generally accepted in India. 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 financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, the management of the company is responsible for assessing the company''s ability to continue as a going concern; disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the management of the company either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.

The board of directors is responsible for overseeing the company''s financial reporting process.

Auditor''s Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditor''s Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

â¢ Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

â¢ Obtain an understanding of internal financial controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Companies Act, 2013, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls system in place and the operating effectiveness of such controls.

â¢ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

â¢ Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our Auditor''s Report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion.

Our conclusions are based on the audit evidence obtained up to the date of our Auditor''s Report. However, future events or conditions may cause the company to cease to continue as a going concern.

â¢ Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore, the key audit matters. We describe these matters in our Auditor''s Report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Other Matters

We did not audit the financial statement/information of 2 foreign branches namely Mauritius and Maldives included in the standalone financial statements of the company whose financial statements/financial information reflect total assets of Rs. 25,958.78 Lakh (Previous Year Rs. 6,253.05 Lakh) as on 31st March 2022 and total revenue of Rs. 7,591.20 Lakh (Previous Year Rs. 12,544.23 Lakh) for the year ended on that date, as considered in the standalone financial statements. The financial statements/information of said branch has been furnished to us, and our opinion, so far as it relates to the amounts and disclosures included in respect of said branches duly certified by the management have been furnished to us, are solely based on the management certified financial statements/information. Further, the branch at Seychelles has not yet commenced any activity and management has confirmed that there is no financial transaction in the said branch yet.

Our opinion is not modified in respect of above said matter.

Report on Other Legal and Regulatory Requirements

(1) As required by the Companies (Auditor''s Report) Order, 2020 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

(2) As required by Section 143 (3) of the Act, based on our audit,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 and proper returns adequate for the purposes of our audit have been received from the branch(es) not visited by us;

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

d. In our opinion, the aforesaid standalone financial statements comply with the Indian Accounting Standards prescribed under Section 133 of the Act, read with the companies (Indian Accounting Standards) Rules 2015 as amended;

e. The company being a Government Company, the provisions of Section 164(2) of the Act in respect of disqualification of directors are not applicable to the company in terms of notification no. G.S.R.463(E) dated 5th June, 2015 issued by Ministry of Corporate Affairs, Government of India;

f. With respect to the adequacy of the internal financial controls with reference to standalone financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B".

g. With respect to the other matters to be included in the Auditor''s Report in accordance with the requirements of section 197(16) of the Act, as amended, we are informed that the company being a Government Company, the provisions of section 197 read with schedule V of the Act, relating to managerial remuneration are not applicable to the company in terms of Notification No. G.S.R. 463(E) dated 5^th June 2015.

h. 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 litigations on its financial position in its standalone financial statements. Refer Note No. 40 to the financial statements.

ii) The company has made provision, as required under the applicable laws or Indian Accounting Standards for material foreseeable losses, if any, on long-term contracts.

iii) There has been no delay in transferring the amounts, required to be transferred to the Investor Education and Protection Fund by the company in accordance with the relevant provisions of the Act and Rules made thereunder.

iv) (a) The management has represented that, to the best of its knowledge and belief, as disclosed in the

note 53(iv) to the accounts, no funds (which are material either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entity ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the ultimate beneficiaries;

(b) The management has represented, that, to the best of its knowledge and belief, as disclosed in the note 53(iv) to the accounts, no funds (which are material either individually or in the aggregate) have been received by the Company from any person or entity, including foreign entity ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the ultimate beneficiaries;

(c) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement.

i. As stated in Note 41 to the standalone financial statements;

(a) The final dividend proposed in the previous year, declared and paid by the company during the year, is in accordance with Section 123 of the Act, as applicable.

(b) The board of directors of the company have proposed final dividend for the year which is subject to the approval of the members at the ensuing annual general meeting. The amount of dividend proposed is in accordance with section 123 of the Act, as applicable.

(3) On the basis of such checks of the books and records of the company, as we considered appropriate and according to the information and explanations given to us, we are enclosing our report in terms of section 143(5) of the Act, on the directions issued by the Comptroller and Auditor General of India, in "Annexure C" attached.

For Dhawan & Co.

Chartered Accountants

ICAI Firm Registration No. 002864N

Sd/-

Deepak Kapoor (Partner)

Membership No. 072302

ICAI UDIN Reference No: 22072302AJXFVY1537

Place : New Delhi

Date : May 30, 2022

Mar 31, 2021

Report on the Audit of the Standalone Financial Statements Opinion

We have audited the accompanying standalone financial statements of NBCC (India) Limited (herein referred to as "the Company"), which comprise the balance sheet as at March 31, 2021, the statement of profit and loss (including other comprehensive income), the statement of changes in equity and the statement of cash flows for the year then ended and notes to the financial statements including a summary of the significant accounting policies and other explanatory information, in which is included the unaudited financial statements of 2 foreign branches of the company located at Mauritius and Maldives for the year ended on that date (as certified by the management) (hereinafter referred to as "the standalone financial statements").

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 Companies Act, 2013 ("the Act'') in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015, as amended, ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the company as at March 31, 2021, its profit, total comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs) specified under section 143 (10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditor''s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI''s Code of Ethics. We believe that the audit evidence, we have obtained, is sufficient and appropriate to provide a basis for our opinion on the standalone financial statements.

Emphasis of Matters

We invite attention to the following matters in the notes to the standalone financial statement:

i) Note No. 47(i) and 47(ii) regarding non-execution of conveyance deed in favour of the company and Note No. 47(iii) and 47(iv) regarding non handing over of possession and non execution of lease deed and other matters incidental thereto, in respect of various properties, forming part of the land bank (inventory) involving in aggregate a sum of '' 21,894.66 Lakh;

ii) Note No. 47(v) regarding payment by the company to L&DO, MoHUA as premium for availing additional ground coverage at company''s built up and sold project "NBCC Plaza" and incurring of other construction cost and consequential expenses thereon for project which is stuck up on account of similar demand raised by South Delhi Municipal Corporation in respect of additional ground coverage, in the year 2015;

iii) Note No. 47(vi) regarding developed real estate project having a carrying value of '' 8699.87 Lakh and remaining unsold for want of environmental clearance;

iv) Note No. 47(vii) regarding developed real estate projects having a carrying value of '' 916.96 Lakh and remaining unsold due to unfavourable market conditions;

v) Note No. 47(viii) regarding developed real estate projects costing '' 5775.82 Lakh and remaining unsold for over five years due to unfavourable market conditions resulting in deterioration in value by '' 1172.23 Lakh;

vi) Note No. 47(x) regarding developed real estate partially sold and occupied project, remaining unsold due to structural and other defects. The matter is also under investigation by vigilance department;

vii) Note No. 48(ii) regarding irregularities in the project being executed by the company and consequent referral of the matter to vigilance department;

viii) Note No. 48(iii) regarding the balances of Trade Receivables, Loans and Advances, Security Deposits, Earnest Money Deposits, Deposits and Trade Payables being subject to reconciliation, confirmation and consequential adjustments thereof.

ix) Note No. 48(v) regarding uncertainties arising out of the outbreak of COVID - 19 pandemic and disruptions in regular business operations due to lockdown and consequential assessment made by the management on its business and its associated financial risks;

Our opinion is not modified in respect of above matters.

Key Audit Matters

Key Audit Matters	Auditor''s Response
Accuracy of recognition, measurement, presentation	Principal Audit Procedures
and disclosures of revenues and other related	Our audit approach consisted testing of the design and
balances in respect of "Revenue from contracts with	operating effectiveness of internal controls and procedures
Customers" under Ind AS 115 (Revenue Accounting	as follows:
Standard)	Evaluated the effectiveness of control over the preparation of information that are designed to ensure the completeness and
The application of this accounting standard involves	accuracy.
certain key judgments relating to identification of	â¢ Selected a sample of existing continuing contracts and
distinct performance obligations, determination	new contracts, and tested the operating effectiveness
of transaction price of identified performance	of the internal control, relating to identification of the
obligations, the appropriateness of the basis used	distinct performance obligations and determination of
to measure revenue recognized over a period, and	transaction price.
disclosures including presentations of balances in the	â¢ Tested the relevant information, accounting systems and
financial statements.	change relating to contracts and related information
An estimated effort is a critical estimate to determine	used in recording and disclosing revenue in accordance
revenue, as it requires consideration of progress of	with the Ind AS 115.
the contract. Efforts incurred till date; efforts required	â¢ Reviewed some sample of contracts to identify possible
to complete the remaining performance obligation.	delays in achieving milestones which require change in estimated efforts to complete the remaining performance
Refer Note No. 25 to the standalone financial	obligation.
statements.	â¢ Performed analytical procedures and test of details for reasonableness and other related material items.
Assessment and Recoverability of trade receivables	Principal Audit Procedures
The company has net trade receivables outstanding of	We assessed the company''s internal process to recognize the
'' 163854.35 Lakh at the end of March 2021.	revenue and review mechanism of trade receivables. Our audit approach consisted testing of the design and operating
These balances are related to revenue recognized in line with Ind AS for ongoing contracts and completed contracts. The assessment of its recoverability is a key audit matter in the audit due to its size and high level	effectiveness of internal controls and procedures as follows: â¢ Evaluated the process of invoicing, verification and reconciliation with customer.
of management judgment.	â¢ Obtained the list of project wise outstanding details and its review mechanism by the management.
Refer Note No. 10 to the standalone financial	â¢ Reviewed the guidelines and policies of the company for
statements.	impairment of trade receivables. â¢ Tested the accuracy of ageing of trade receivables at the year end on sampling basis. â¢ Performed analytical procedures and test of data, their reasonableness and recoverability and other material items.

Key Audit Matters	Auditor''s Response
Provisions and Contingent Liabilities	Principal Audit Procedures
The company is involved in various taxes and other	Our audit procedure in response to this key Audit Matter included,
disputes for which final outcomes cannot be easily	among others:
predicted and which could potentially result in	â¢ Assessment of the process and relevant controls
significant liabilities. The assessment of the risks	implemented to identify legal and tax litigations, and
associated with the litigations is based on complex	pending administrative proceedings.
assumptions, which require the use of judgment and such judgment relates, primarily, to the assessment of the uncertainties connected to the prediction of the outcome of the proceedings and to the adequacy of the disclosures in the financial statements. Because of the judgment required, the materiality of such litigations and the complexity of the assessment process, the area is a key matter for our audit.	â¢ Assessment of assumptions used in the evaluation of potential legal and tax risks performed by the legal and tax department of the company considering the legal precedence and other rulings in similar cases. â¢ Inquiry with legal and tax departments of the company regarding the status of the most significant disputes and inspection of the key relevant documentation. â¢ Analysis of opinion received from the experts, where
Refer Note No. 38 to the standalone financial	available.
statements.	â¢ Review of the adequacy of the disclosures in the notes to
	the financial statements.

Information Other than the Standalone Financial Statements and Auditor''s Report Thereon

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

When we read the ''Other reports'', if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance and take appropriate actions, if required.

Management''s Responsibility and Those Charged with Governance for the Standalone Financial Statements

The board of directors is responsible for overseeing the company''s financial reporting process.

Auditor''s Responsibilities for the Audit of the Standalone Financial Statements

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

â¢ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

Other Matters

We did not audit the financial statement/information of 2 foreign branches included in the standalone financial statements of the company whose financial statements / financial information reflect total assets of '' 6253.05 Lakhs as on 31st March 2021 and total revenue of '' 12544.23 Lakhs for the year ended on that date, as considered in the standalone financial statements. The financial statements/information of said branch has been furnished to us certified by the management, and our opinion, so far as it relates to the amounts and disclosures included in respect of said branch, is based solely on the management certified financial statements / information.

Our opinion is not modified in respect of above said matter.

(1) As required by the Companies (Auditor''s Report) Order, 2016 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

(2) As required by Section 143 (3) of the Act, based on our audit, 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;

i) The company has disclosed the impact of pending litigations on its financial position in its standalone financial statements. Refer Note No. 38 to the financial statements.

ii) The company has made provision, as required under the applicable laws or Indian Accounting Standards for material foreseeable losses, if any, on long-term contracts. Further, the company does not have any derivative contract as at March 31, 2021.

For Dhawan & Co.

Chartered Accountants

ICAI Firm Registration No.: 002864N

Sd/-

SUNIL GOGIA

(Partner)

M. No. : 073740

ICAI UDIN : 21073740AAAACK7956

Place : New Delhi Date : June 29, 2021

Mar 31, 2018

INDEPENDENT AUDITORS'' REPORT

TO THE MEMBERS OF NBCC (India) Limited

(Formerly National Buildings Construction Corporation Limited)

Report on the Standalone Indian Accounting Standards (Ind AS) Financial Statements

1. We have audited the accompanying standalone Ind AS financial statements of NBCC (India) Limited (Formerly National Buildings Construction Corporation 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.

Management''s Responsibility for the Standalone Ind AS Financial Statements

2. 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 standalone Ind AS financial statements to 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 Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, and other accounting principles generally accepted in India.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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.

Auditors'' Responsibility

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

4. In conducting our audit, we have taken into account the provisions of the Act and the Rules made thereunder including 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 there under.

5. We conducted our audit of the standalone Ind AS financial statements 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 standalone Ind AS financial statements are free from material misstatement.

6. 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 auditors'' 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.

7. 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

8. 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 profit (including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.

Report on Other Legal and Regulatory Requirements

9. As required by the Companies (Auditor''s Report) Order, 2016, issued by the Central Government of India in terms of subsection (11) of section 143 of the Act ("the Order"), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure B a statement on the matters specified in paragraphs 3 and 4 of the Order.

10. We enclose our report in terms of Section 143 (5) of the Act, on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, in the Annexure C on the directions and sub directions issued by the Comptroller and Auditor General of India.

11. As required by Section 143 (3) of the Act, based on our audit, 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 a sit appears from our examination of those books.

c) The Balance Sheet, the Statement of Profit and Loss (including other comprehensive income), the Cash Flow Statement 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.

e) As per Notification No. GSR 463(E) dated June 5^th 2015, issued by Ministry of Corporate Affairs, Government of India, provisions of Section 164 (2) of the Companies Act, 2013, are not applicable to the company.

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 Annexure A. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the company''s internal financial controls over financial reporting.

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 knowledge and belief and according to the information and explanations given to us:

i. The Company has disclosed the impact of pending litigations as at 31^st March, 2018 on its financial position in its standalone Ind AS financial statements - Refer Note No. 35 (a).

ii. The Company has made provision, as required under the applicable law or Indian accounting standards, for material foreseeable loss on long term contracts - Refer Note No. 21A. The company has no derivative contracts as at 31^st March, 2018

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company during the year ended 31^st March, 2018

Referred to in paragraph 11 (f) of the Independent Auditors'' Report of even date to the members of NBCC (India) Limited

(Formerly National Buildings Construction Corporation Limited) on the standalone Ind AS financial statements for the year ended 31^st March, 2018

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Act

1. We have audited the internal financial controls over financial reporting of NBCC (India) Limited (Formerly National Buildings Construction Corporation Limited) ("the Company") as of 31^st March, 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

2. The Company''s management is responsible for establishing and maintaining internal financial controls 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). 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

3. 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 "Guidance Note") and the Standards on Auditing 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 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.

4. 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.

5. 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

6. 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 (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) 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 (3) 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

7. 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

8. In our opinion, to the best of our information and according to the explanations given to us, 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 31^st March, 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.

Referred to in paragraph 9 of the Independent Auditors'' Report of even date to the members of NBCC (India) Limited (Formerly National Buildings Construction Corporation Limited) on the standalone Ind AS financial statements as of and for the year ended 31^st March, 2018

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

(b) The fixed assets of the Company have been physically verified by the Management during the year. The discrepancies noticed on such verification were not material and have been properly dealt with in the books of account. In our opinion, the frequency of verification is reasonable.

(c) The title deeds of immovable properties, as disclosed in Note 2 on fixed assets to the financial statements, are held in the name of the Company, except for details as given below

- In case of Land :-

Total number of cases:	03	01
Whether lease hold/ free hold:	Lease Hold	Free Hold
Gross Carrying Amount ( at cost, as at 31.03.2018):	'' 664.69 Lakhs	'' 1138.99 Lakhs
Net Book value (as at 31.03.2018)	'' 654.25 Lakhs	'' 1138.99 Lakhs

- In case of Buildings :-

Total number of cases:	02
Whether lease hold/ free hold:	Free Hold
Gross Carrying Amount ( at cost) &	''364.74 Lakhs	'' 348.78 Lakhs
Net Book value (as at 31.03.2018):	Gross Carrying Amount (at cost)	Net Book value

ii. The physical verification of inventory has been conducted at reasonable intervals by the Management during the year. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

iii. The Company has not granted any loans, secured or unsecured, to companies, firms, limited liability partnerships or other parties covered in the register maintained under Section 189 of the Act. Therefore, the provisions of Clause 3(iii), (iii)(a), (iii)(b) and (iii)(c) of the said Order are not applicable to the Company.

iv. The Company has not granted any loans or made any investments, or provided any guarantees or security to the parties covered under Section 185 and 186. Therefore, the provisions of Clause 3(iv) of the said Order are not applicable to the Company.

v. According to the information and explanations given to us and the records examined by us, the Company has not accepted any deposits from the public. Accordingly, the Paragraph 3(v) of the order is not applicable to the company.

vi. We have broadly reviewed the books of account maintained by the Company in respect of Engineering, Procurement and Construction (EPC) division and Real Estate division where, pursuant to the rules made by the Central Government of India, the maintenance of cost records has been specified under sub-section (1) of Section 148 of the Act, and are of the opinion that, prima facie, the prescribed accounts and records have been so made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete. For Project Management and Consultancy (PMC) division we have been informed that these activities are carried on back to back basis by sub contractors appointed by the Company, hence, Company is not required to maintain cost records for this division.

vii. (a) According to the information and explanation given to us and the records of the company examined by us, in our opinion, the company is generally regular in depositing undisputed statutory dues, including Goods and Services Tax, Service Tax, Provident Fund, Value Added Tax/Sales Tax, Cess, Income Tax and other material statutory dues, as applicable, with the appropriate authorities though there has been delays in few cases in depositing Goods and Services Tax dues. However, no Goods and Services tax dues were payable for a period of more than six months from the date they became payable as at year end. We have been informed that the provisions of the Employees State Insurance Act are not applicable to the Company.

(b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of Income Tax, Service Tax, Value Added Tax/ Sales Tax, as at 31^st March, 2018 which have not been deposited on account of a dispute are as follows:

Name of the Statutea	Nature of Dues	('' in Lakhs)	Period to which the amount relates	Forum where the dispute is pending
Jharkhand VAT Act, 2005	Value Added Tax (VAT)	5,882.82	2008-09 to 2014-15	Joint Commissioner of Commercial Taxes
Delhi VAT Act, 2004	Value Added Tax (VAT)	40,480.18	2013-14 to 2014-15	Appellate Tribunal VAT, New Delhi
Karnatka VAT Act, 2003	Value Added Tax (VAT)	49.23	2007-08	Karnataka Appellate Tribunal
Haryana VAT Act, 2003	Value Added Tax (VAT)	45.36	2012-13	Haryana Tax Tribunal
Maharashtra VAT Act, 2002	Value Added Tax (VAT)	176.54	2012-13 to 2013-14	Commissioner of Sales Tax Department
Madhya Pradesh VAT Act, 2002	Value Added Tax (VAT)	45.07	2012-13	Appellate Deputy Commissioner of Commercial Tax
Madhya Pradesh VAT Act, 2002	Value Added Tax (VAT)	100.51	2013-14	Appellate Deputy Commissioner of Commercial Tax
Uttar Pradesh VAT Act, 2008	Value Added Tax (VAT)	22.46	2010-11	Additional Commissioner of Commercial Tax
		52.13	2011-12
		18.72	2012-13
		9.23	2010-11	Deputy Commissioner of Commercial Tax
		13.42	2011-12	Deputy Commissioner of Commercial Tax
West Bengal VAT Act, 2003	Value Added Tax (VAT)	49.87	2008-09	West Bengal Tax, Tribunal
		3,837.58	2009-10 to 2014-15
		42.72	2009-10
Income Tax Act, 1961	Income Tax Act	154.74	2012-13	Commissioner (Appeal)
		34.33	2014-15	Commissioner (Appeal)
		226.93	2007-08	Appellate Tribunal
		86.73	2010-11
		917.63	2010-11
		54.14	2011-12
		194.53	2013-14
		58.47	2002-03	Delhi High Court
Finance Act 1994	Service Tax	835.48	2005-06 to 2007-08	High Court Ranchi
		1,180.33	2004-05 to 2013-14	CESTAT, Delhi
		832.35	2001-02 to 2011-12	CESTAT, Kolkata
		142.66	2010-11 to 2014-15	CESTAT, Allahabad, U.P.
		24.60	2008-09	Appeal to be filed to CESTAT, Kolkata
		11.62	2014-15	Addl. Commissioner of Service Tax, Delhi
		153.74	2007-08 to 2011-12	Commissioner (Appeals) of Service Tax, Ranchi
		166.86	2015-16	Commissioner (Appeals) of Service Tax, West Bengal
		17.44	2015-16	Commissioner (Appeals), Uttar Pradesh
		7.37	2012-13 to 2014-15	Commissioner of Service Tax, Noida
		19.46	2013-14 to 2015-16	Commissioner of Service Tax, Chennai
		871.00	2010-11 to 2014-15	Commissioner of Service Tax, Patna

viii. As the Company does not have any loans or borrowings from any financial institution or bank or Government, nor has it issued any debentures as at the balance sheet date, the provisions of Clause 3(viii) of the Order are not applicable to the Company.

ix. The Company has not raised any moneys by way of initial public offer, further public offer (including debt instruments) and term loans. Accordingly, the provisions of Clause 3(ix) of the Order are not applicable to the Company.

x. 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, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the Management.

xi. The provisions of Section 197 read with Schedule V to the Act are not applicable to Government Companies. Accordingly, the provisions of Clause 3(xi) of the Order are not applicable to the Company.

xii. As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it, the provisions of Clause 3(xii) of the Order are not applicable to the Company.

xiii. The Company has entered into transactions with related parties in compliance with the provisions of Sections 177 and 188 of the Act. The details of such related party transactions have been disclosed in the financial statements as required under Indian Accounting Standard (Ind AS) 24, Related Party Disclosures specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014, to the extent applicable to state controlled entities.

xiv. The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly, the provisions of Clause 3(xiv) of the Order are not applicable to the Company.

xv. The Company has not entered into any non cash transactions with its directors or persons connected with him. Accordingly, the provisions of Clause 3(xv) of the Order are not applicable to the Company.

xvi. The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the provisions of Clause 3(xvi) of the Order are not applicable to the Company.

For JAGDISH CHAND & CO.

Firm Registration Number: 000129N

Chartered Accountants

Sd/-

(Praveen Kumar Jain)

Place of signature: New Delhi ^Partner

D_at_e: 25.05.2018 Membership Number:085629

Mar 31, 2017

Report on the Standalone Indian Accounting Standards (ind AS) Financial Statements

1. We have audited the accompanying standalone financial statements of NBCC (India) Limited (Formerly National Buildings Construction Corporation Limited) (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2017, 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.

Managementâs Responsibility for the Standalone Ind AS Financial Statements

2. The Companyâs Board of Directors is responsible for the matters stated in Section 134(S) of the Companies Act, 2013(â the Actâ) with respect to the preparation of these standalone Ind AS financial statements to 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 specified In the Companies (Indian Accounting Standards) Rules, 2015 (as amended) under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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.

Auditorsâ Responsibility

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

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

5. We conducted Our audit of the standalone Ind AS financial Statements in accordance with the standards on Auditing specified under Section 143 (10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements require that we comply with ethical requirement and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.

6. 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 auditorsâ 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 Companyâs 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 Companyâs Directors, as well as evaluating the overall presentation of the standalone Ind As financial statements.

7. 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

8. 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 info r mat ion 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, 2017, and its profit (including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.

Emphasis of Matter

9. We draw attention to

a) No provision has been made for penal levy amounting to Rs. 1654.93 Lakhs (previous year Rs.1654.93 Lakhs) for gurantees given by the government for loans taken in earlier years by the company in view of issue being under dispute though the same has been shown as contingent liability. (Refer Note 36)

b) Other Financial Assets include outstanding advance of Rs. 13.00 Lakhs recoverable from Indian Drugs & Pharmaceuticals Limited (IDPL) a public sector undertaking (PSU). M/s IDPL was declared sick by Board for Industrial and Financial reconstruction (BIFR). The companyâs claim was admitted by IDPL during BIFR proceedings. However, BIFR has been wound up by Government of India via Notification dated 25.11.2016 during the year and company is evaluating Other alternatives to recover this amount from IDPL. Since the amount had earlier been admitted by IDPL during BIFR proceeding, the company considers advance of Rs. 1300.00 Lakhs recoverable from IDPL as good for recovery. (Refer Note 13)

Our opinion is not modified in respect of these matters.

Other Matter

10. The financial information of the Company for the year ended March 31,2016 and the transition date opening balance sheet as at April 1, 2015 included m these standalone Ind A5 financial statements, are based on the previously issued statutory financial statements for the years ended March 31, 2016 and March 31, 2015 prepared in accordance with the Companies (Accounting Standards) Rules, 2006 {as amended) which were audited by us , on which we expressed an unmodified opinion dated May 16, 2016 and May 22, 2015 respectively. The adjustments to those financial statements for the difference in accounting principles adopted by the Company on transition to the Ind AS have been audited by us.

0ur opinion is not modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

11. As required by the Companies (Auditorâs Report) Order, 2016, issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act (the Orderâ), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure 6 a statement on the matters specified in paragraphs 3 and 4 of the Order.

12. We enclose our report in terms of Section 143 (5) of the Act, on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, in the Annexure C on the direct ions and sub directions issued by the Comptroller and Auditor General of India.

13. As required by Section 143 (3) of the Act, we report, to the extent applicable, 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.

d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act.

e) As per Notification No. GSR 463(E) dated June 5th 2015, issued by Ministry of Corporate Affairs, Government of India, provisions of Section 164 (2) of the Companies Act, 2013, are not applicable to the company.

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

i. The Company has disclosed the impact of pending litigations as at March 31, 2017 on its financial position in its Standalone Ind AS financial Statements - Refer Note No. 36(a).

ii. The Company has made provision, as required under the applicable law or Indian accounting standard for material foreseeable loss on long term contracts- Refer Note No.22A . The company has no derivative contracts as at March 31,2017

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company during the year ended March 31,2017

iv. The company has provided requisite disclosures in its financial statements as to holdings as well as dealing in Specified Bank Notes during the period from November 8_r 2016 to December 30, 2016 and these are in accordance with the books of accounts maintained by the company (Refer Note 38)

Annexure B to Independent Auditorsâ Report

Referred to in paragraph 11 of the independent Auditorsâ Report of even date to the members of NBCC (India) Limited (Formerly National Buildings Construction Corporation Limited) on the standalone Ind AS financial statements as of and for the year ended March 31,2017

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

(c) The title deeds of immovable properties, as disclosed in Note 2 on fixed assets to the financial statements, are held in the name of the Company, except for details as given below

- In case of Land

Total number of cases:	03	01
Whether lease hold/ free hold:	Lease Hold	Free Hold
Gross Carrying Amount (at cost, as at 31.03,2017):	Rs. 664.69 Lakhs	Rs. 1138.99 Lakhs
Net Book value (as at 31.03.2017)	Rs. 657,73 Lakhs	Rs. 1138.99 lakhs

- In case of Buildings

Total number of cases:	02
Whether lease hold/ free hold:	Free Hold
Gross Carrying Amount (at cost) &	*364.74 Lakhs	Rs. 354.58 Lakhs
Net Book value (as at 31.03,2017);	Gross Carrying Amount (at cost)		Net Book value

iii. The Company has not granted any loans, secured or unsecured, to companies, firms, limited liability partnerships Dr other parties covered in the register maintained under Section 189 of the Act. Therefore, the provisions of Clause 3(iii), (iii)(a), (iii)(b) and (iii}(c) of the said Order are not applicable to the Company.

iv. The Company has not granted any loans or made any investments, or provided any guarantees or security to the parties covered under Section 185 and 136. Therefore, the provisions of Clause 3(iv) of the said Order are not applicable to the Company.

vii.(a) According to the information and explanation given to us and the records of the company examined by us, in our opinion, the company is generally regular in depositing undisputed statutory dues, including Service Tax, Provident Fund, Value Added Tax/Sales Tax, Cess, Income Tax and other material statutory dues, as applicable, with the appropriate authorities though there has been delays in few cases in depositing Service Tax dues and Tax Deducted at Source dues. However, no Service Tax dues or Tax Deducted at Source dues were payable for a period of more than six months from the date they became payable as at year end. We have been informed that the provisions of the Employees State Insurance Act are not applicable to the Company.

(b) According to the information and explanations given to u$ and the records of the Company examined by us_r the particulars of dues of Income Tax, Service Tax, Value Added Tax/ Sales Tax, as at March 31, 2017 which have not been deposited on account of a dispute are as follows:

Name of the Statute	Nature of Dues	{Rs. in Lakhs)	Period to which the amount relates	Forum where the dispute is pending
Jharkhand VAT Ad, ZOOS	VAT	28.79	201.1â12	Joint Commissioner of Commercial Taxes
		716.21	2012-13	Joint Commissioner of Commercial Taxes
		14.14	2013-14	Joint Commissioner of Commercial Taxes
Delhi VAT Act, 2004	VAT	40,480.18	2013-14 to 2014-15	Special Commissioner, VAT Delhi
Karnataka VAT Act, 2003	VAT	43.23	2007-0*	Karnataka Appellate Tribunal
Haryana VAT	VAT	8 99	2003-09	Haryana Tax Tribunal
Act, 2003		45.35	2012-13	Haryana Tax Tribunal
		31.03	2009-10	Excise & Taxation Officer
Madhya Pradesh VAT Act, 2002	VAT	45..07	2012-13	Appellate Deputy Commissioner of Commercial Tax
		100.51	2013-14	Appellate Deputy Commissioner of Commercial Tax
Uttar Pradesh VAT Act, 2008	VAT	22.40	2010-11	Additional Commissioner of Commercial Tax
		52.13	2011*12	Additional Commissioner of Commercial Tax
		18.72	2012-13	Additional Commissioner of Commercial Tax
		158.93	2003-09	Deputy Commissioner of Commercial Tax
		143.83	2009-10	Deputy Commissioner of Commercial Tax
		39.20	2010-11	Deputy Commissioner of Commercial Tax
		13.10	2011-12	Deputy Commissioner of Commercial Tax

West Bengal	VAT	49.87	2008-09	West Bengal Tax, Tribunal
VAT Act, 2003		42.72	2009-10	West Bengal Tax, Tribunal
Income Tax	Income Tax Act	157.64	2012-13	Commissioner (Appeal)
Act, 1961		154.74	2013-14	Commissioner (Appeal)
		215.92	2014-15	Commissioner (Appeal)
		1,582 18	2007-08	Appellate Tribunal
		226.93	2003-09	Appellate Tribunal
		86-73	2011-12	Appellate Tribunal
		4.18	2008-09	Delhi High Court
		31.45	2009-10	Delhi High Court
Finance Act 1994	Service Tax	574.00	2001-02 to 2004-05	CESTAT. Kolkata
		137.62	2004-05	CESTAT, Delhi
		699.83	2007-08 to 2011-12	CE5TAT, Delhi
		153.74	2007-08 to 2011*12	Appeal to be filed
		84.44	2008-09	CESTAT, Kolkata
		92.43	2012-13	CESTAT, Delhi
		7.37	2012-13 to 2014-15	Commissioner of Service Tax
		250.45	2013-14	CESTAT, Delhi
		11.62	2014-15	Addl. Commissioner of Service Tax

viii. As the Company does not have any loans or borrowings from any financial institution or hank or Government, nor has it issued any debentures as at the balance sheet date, the provisions of Clause 3(viii) of the Order are not applicable to the Company.

ix. The Company has not raised any money s by way of initial public offer, further public offer (including debt instruments) and term loans. Accordingly, the provisions of Clause 3(ix) of the Order are not applicable to the Company.

x. 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,, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the Management.

xii. As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it, the provisions of Clause 3(xii) of the Order are not applicable to the Company.

xiv. The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly the provisions of Clause 3(xiv) of the Order are not applicable to the Company.

w. The Company has not entered into any non Cash transactions with its directors or persons connected with him. Accordingly, the provisions of Clause 3(xv) of the Order are not applicable to the Company.

xvi. The Company is not required to be registered under Section 4 5-I A of the Reserve Bank of India Act, 1934. Accordingly, the provisions of Clause 3(xvi) of the Order are not applicable to the Company,

For JAGDISH CHAND & CO.

Firm Registration Number: 000129N

Chartered Accountants

Place of signature; New Delhi

Date: 26th May, 2017 Sd/-

(Praveen Kumar Jain)

Partner

Membership Number:085629

Mar 31, 2016

Report on the Standalone Financial Statements

1. We have audited the accompanying standalone financial statements of National Buildings Construction Corporation Limited (âthe Companyâ), which comprise the Balance Sheet as at 31st March, 2016, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management''s Responsibility for the Standalone Financial Statements

2. The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (â the Actâ) with respect to the preparation of these standalone financial statements to 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 of 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 financial statements that give a true and fair view and are free from material misstatement, whet her due to fraud or error.

Auditor''s Responsibility

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

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

5. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements 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.

6. An audit involves performing procedures to obtain audit evidence about the amounts and the 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, whet her due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the 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 financial statements.

7. 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

8. 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

9- We draw attention to

a) Trade Receivables include Rs,4768.07 Lakhs (previous year Rs,6025.07 Lakhs) in respect of closed inland projects, which are more than three years old including an amount of ''2647.20 Lakhs (previous year Rs,3399.00 Lakhs) under litigation /arbitration. The same have been shown as good for recovery (Refer Note No 14A)

b) Trade Receivables include Rs,42824.98 Lakhs recoverable from Employee State Insurance Corporation (ESIC), Government of India, for works executed for them. In opinion of the management this amount is considered good for recovery (Refer Note No. 14B)

c) Short terms loans and advances include outstanding advance of Rs,1300.00 Lakhs recoverable from Indian Drugs & Pharmaceuticals Limited (IDPL). M/s IDPL has already been declared sick by Board for Industrial & Financial Reconstruction (BIFR). The company''s claim has been admitted by BIFR appointed operating agency (IDBI Bank) and IDPL.

In view of above the company considers advance of Rs,1300.00 Lakhs recoverable from IDPL is good for recovery. (Refer Note No. 16A)

d) No provision has been made for penal levy of Rs,1654.93 Lakhs (previous year Rs,1654.93 Lakhs) for guarantees given by the government for loans taken in earlier years by the Company in view of issue being under dispute though the same has been shown as contingent liability (Refer Note No. 29)

Our opinion is not modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

11. As required by ''the Companies (Auditor''s Report) Order, 2016'', issued by the Central Government of India in terms

of sub-section (11) of section 143 of the Act (hereinafter referred to as the âOrderâ), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure B a statement on the matters specified in paragraphs 3 and 4 of the Order.

12. We enclose our report in terms of Section 143 (5) of the Act, on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, in the Annexure C on the directions and sub directions issued by the Comptroller and Auditor General of India.

13. 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 the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e) As per Notification No. GSR 463(E) dated June 5, 2015, issued by Ministry of Corporate Affairs, Government of India, provisions of Section 164 (2) of the Companies Act, 2013, are not applicable to the company.

i. The Company has disclosed the impact of pending litigations as at March 31, 2016 on its financial position in its standalone financial statements - Refer Note No. 29;

ii. The Company did not have any long-term contracts including derivative contracts as at March 31, 2016

iii. There were no amounts which were required to be transferred to the Investor Education and Protection fund by the Company during the year ended March 31, 2016

Referred to in paragraph 13 (f) of the Independent Auditors'' Report of even date to the members of NATIONAL BUILDINGS CONSTRUCTION CORPORATION LIMITED on the standalone financial statements for the year ended 31st March, 2016

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Act

1. We have audited the internal financial controls over financial reporting of NATIONAL BUILDINGS CONSTRUCTION CORPORATION LIMITED (âthe Companyâ) as of 31st March, 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Management''s Responsibility for Internal Financial Controls

2. The Company''s management is responsible for establishing and maintaining internal financial controls 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). 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

3. 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 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 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.

Meaning of Internal Financial Controls Over Financial Reporting

(2) 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 (3) 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

Opinion

8 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 31st March, 2016, 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.

Referred to in paragraph 11 of the Independent Auditors'' Report of even date to the members of National Buildings Construction Corporation Limited on the standalone financial statements as of and for the year ended 31st March, 2016

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

(c) The title deeds of immovable properties, as disclosed in Note 8 on fixed assets to the financial statements, are held in the name of the Company, except for details as given below In case of Land:-

Total number of cases:	04		01
Whether lease hold/ free hold:	Lease Hold		Free Hold
Gross block (as at March 31, 2016):	Rs,1819.81 Lakhs		''8.62 Lakhs
In case of Buildings:-
Total number of cases:		02
Whether lease hold/ free hold:		Free Hold
Gross block and net block (as at March 31, 2016):		(Gross Block)	(Net Block)
		Rs,369.19 Lakhs	Rs,360.38 Lakhs

ii. The physical verification of inventory have been conducted at reasonable intervals by the Management during the year. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

v. The Company has not accepted any deposits from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the rules framed there under to the extent notified.

vi. We have broadly reviewed the books of account maintained by the Company in respect of Engineering, Procurement and Construction (EPC) division and Real Estate division where, pursuant to the rules made by the Central Government of India, the maintenance of cost records has been specified under sub-section (1) of Section 148 of the Act, and are of the opinion that, prima facie, the prescribed accounts and records have been so made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete. For Project Management and Consultancy (PMC) division we have been informed that these activities are carried on back to back basis by sub-contractors appointed by the Company, hence, Company is not required to maintain cost records for this division.

vii. (a) According to the information and explanation given to us and the records of the company examined by us,

in our opinion, the company is generally regular in depositing undisputed statutory dues, including Service Tax, Provident Fund, Value Added Tax/Sales Tax, Cess, Income Tax and other material statutory dues, as applicable, with the appropriate authorities though there has been delays in few cases in depositing Service Tax dues. However, no service tax dues were payable for a period of more than six months from the date they became payable as at year end. We have been informed that the provisions of the Employees State Insurance Act are not applicable to the Company.

(b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of Income Tax, Service Tax, Value Added Tax/ Sales Tax, as at March 31, 2016 which have not been deposited on account of a dispute are as follows:

Name of the	Nature of	(Rs,in Lakhs)	Period to which the	Forum where the dispute
statute	dues		amount relates	is pending
Sales Tax Act	Sales Tax	619.62	2008-09 to 2013-14	Joint Commissioner, Commercial Taxes, Jharkhand
		652.90	2012-13	Joint Commissioner, Commercial Taxes, Jharkhand
		3439	2007-08	Joint Commissioner, Commercial Taxes, Koramangala Bengaluru
		40480.18	2013-14 to 2014-15	Spl. Commissioner, VAT Delhi
		15474	2012-13	Commissioner (Appeals)
Income Tax	Income Tax	157.64	2011-12	Commissioner (Appea ls)
Act, 1961		86.73	2010-11	Appellate Tribunal
		66.57	2008-09	Appellate Tribunal
		5.67	2007-08	Appellate Tribunal
		226.93	2007-08 (Re-Assessment)	Commissioner (Appeals)
		1582.18	2006-07 (Re-Assessment)	Appellate Tribunal
		1076.66	2007-08 to	CESTAT
Finance Act,	Service Tax		2013-14
1994		84.44	2010-11	CESTAT
		871.02	2009-10 to 2014-15	Appeal not filed yet
		574.00	2001-02 to 2004-2005	CESTAT

ix. The Company has not raied any moneys by way of initial public offer, further public offer (including debt instruments) and term loans, Accordingly, the provisions of Clause 3(ix) of the Order are not applicable to the Company.

xii. As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it, the provisions of Clause 3(xii) of the Order are not applicable to the Company.

xiii. The Company has entered into transactions with related parties in compliance with the provisions of Sections 177 and 188 of the Act. The details of such related party transactions have been disclosed in the financial statements as required under Accounting Standard (AS) 18, Related Party Disclosures specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014, to the extent applicable to state controlled entities.

For JAGDISH CHAND & CO.

Firm Registration Number: 000129N

Chartered Accountants

Sd/-

(Praveen Kumar Jain)

Place: New Delhi Partner

Date: May 16, 2016 Membership Number: 085629

Mar 31, 2015

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

Management''s Responsibility for the Standalone Financial Statements

2. 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 standalone financial statements to 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 of 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 financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

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

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

5. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements 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.

6. An audit involves performing procedures to obtain audit evidence about the amounts and the 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 control relevant to the Company''s preparation of the 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.

7. 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

8 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, 2015, and its profit and its cash flows for the year ended on that date.

Emphasis of Matter

9. We draw attention to

a) There are outstanding dues on account of Trade Receivables amounting to Rs. 6025.07 Lakhs (previous year Rs. 4791.25 Lakhs) in respect of closed inland projects, which are more than three years old including an amount of Rs. 3399.00 Lakhs (previous year Rs. 3598.52 Lakhs) under litigation/arbitration. The same have been shown as good for recovery (Refer Note No 14 )

b) No provision has been made for penal levy amounting to Rs. 1654.93 Lakhs (previous year Rs. 1654.93 Lakhs) for guarantees given by the government for loans taken in earlier years by the Company in view of issue being under dispute though the same has been shown as contingent liability (Refer Note No. 29)

Our opinion is not qualified in respect of these matters.

Other Matter

10. The standalone financial statements of the Company as at 31st March, 2014 and for the year then ended were audited by another firm of chartered accountants under the Companies Act, 1956 who, vide their report dated 26th May, 2014, expressed an unmodified opinion on those financial statements.

Report on Other Legal and Regulatory Requirements

11. As required by ''the Companies (Auditor''s Report) Order, 2015'', issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act (hereinafter referred to as the "Order"), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.

12. We enclose our report in terms of Section 143 (5) of the Act, on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, in the Annexure II on the directions and sub directions issued by the Comptroller and Auditor General of India.

13. 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 the 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 representation received from the directors as on 31st March, 2015, taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 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 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 knowledge and belief and according to the information and explanations given to us:

i The Company has disclosed the impact of pending litigations as at 31st March, 2015 on its financial position in its standalone financial statements - Refer Note No. 29;

ii. The Company did not have any long-term contracts including derivative contracts as at 31st March, 2015

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company during the year ended 31st March, 2015

Annexure I to Independent Auditors'' Report

Referred to in paragraph 11 of the Independent Auditors'' Report of even date to the members of National Buildings Construction Corporation Limited on the standalone financial statements as of and for the year ended 31st March, 2015

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

(b) The fixed assets of the Company have been physically verified by the Management during the year. The discrepancies noticed on such verification were not material and have been properly dealt with in the books of account. In our opinion, the frequency of verification is reasonable.

ii. (a) The inventory has been physically verified by the Management during the year. In our opinion, the frequency of verification is reasonable.

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

(c) On the basis of our examination of the inventory records, 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.

iii. The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 189of the Act. Therefore, the provisions of Clause 3(iii), (iii)(a) and (iii)(b) of the said Order are not applicable to the Company.

iv. In our opinion, and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across, nor have been informed of, any continuing failure to correct major weaknesses in the aforesaid internal control system.

v. The Company has not accepted any deposits from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the rules framed there under to the extent notified.

vi. We have broadly reviewed the books of account maintained by the Company in respect of Engineering, Procurement and Construction (EPC) division where, pursuant to the rules made by the Central Government of India, the maintenance of cost records has been specified under sub-section (1) of Section 148 of the Act, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete. For Project Management and Consultancy (PMC) and Real Estate division we have been informed that these activities are carried on back to back basis by sub contractors appointed by the Company, hence, Company is not required to maintain cost records for these divisions.

vii. (a) According to the information and explanation given to us and the records of the company examined by

us, in our opinion, the company is generally regular in depositing undisputed statutory dues, including Provident Fund, Value Added Tax/Sales Tax, Service Tax, Cess, Income Tax, Wealth Tax and other material statutory dues, as applicable, with the appropriate authorities. We have been informed that the provisions of the Employees state Insurance Act are not applicable to the Company.

(b)According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of Income Tax, Service Tax, Value Added Tax /Sales Tax as at 31st March, 2015 which have not been deposited on account of a dispute are as follows:

Name of Nature of dues Rs.(in lakhs) Period to which the statute the amount relates

Sales Tax Act Sales Tax 619.62 2008-09 to 2013-14

Income Tax Income Tax 157.64 2011-12

Act, 1961 86.73 2010-11

66.57 2008-09

5.67 2007-08

226.93 2007-08 (Re-Assessment)

1582.18 2006-07 (Re-Assessment)

Finance Service Tax 1076.66 2007-08 to 2013-14

Act, 1994 84.44 2010-11

871.02 2009-10 to 2014-15

Name of Forum where the the statute dispute is pending

Sales Tax Act Joint Commissioner,

Commercial Taxes

Income Tax Commissioner (Appeals)

Act, 1961 Appellate Tribunal

Appellate Tribunal

Appellate Tribunal

Commissioner (Appeals)

Appellate Tribunal

Finance CESTAT

Act, 1994 CESTAT

Appeal not filed yet

(c) There are no amounts required to be transferred by the Company to the Investor Education and Protection Fund in accordance with the provisions of the Act, and the rules made there under.

viii. The Company has no accumulated losses as at the end of the financial year and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

Ix. As the Company does not have any borrowings from any financial institution or bank nor has it issued any debentures as at the balance sheet date, the provisions of Clause 3(Ix) of the Order are not applicable to the Company.

x. In our opinion, and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions during the year. Accordingly, the provisions of Clause 3(x) of the Order are not applicable to the Company

xI. The Company has not raised any term loans. Accordingly, the provisions of Clause 3(xI) of the Order are not applicable to the Company.

xII. 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, and according to the information and explanations given to us, we have neither come across any instance of material fraud on or by the Company, noticed or reported during the year, nor have we been informed of any such case by the Management.

Annexure II to Independent AuditorsÂ Report

Directions and sub directions indicating the areas to be examined by the Statutory Auditors during the course of audit of Annual Accounts of the National Buildings Construction Corporation Limited for the year 2014-15 issued by the Comptroller & Auditor General of India under section 143 (5) of the Companies Act, 2013.

Referred to in paragraph 12 of the Independent Auditors'' Report of even date to the members of National Buildings Construction Corporation Limited on the standalone financial statements as of and for the year ended 31st March, 2015

Sl. Directions/Sub Directions Action Taken No.

A. Directions

1 If the company has As per information & explanation been selected for given to us the Department of disinvestment, a Disinvestment through complete status Ministry of Urban Development report in terms of decided 10% disinvestment valuation of Assets of government equity in the (including intangible company through public issue assets and land) which closed on 27.03.2012. and liabilities (including There is no further Committed & disinvestment by Govt. General Reserves) may be of India during the examined including the mode year 2014-15 and present stage of disinvestment process?

2 Please report whether there There is a write off of the are any cases of waiver/write Trade Receivable amounting off debits/loans/interest etc., Rs. 396.07 lacs and Loans and if yes, the reasons there for Advances amounting to Rs. 35.66 and the amount involved? lacs during the financial year 2014-15. These debts are under constant pursuation for realization till final settlement made with client or in case of dispute, verdict is passed by the arbitrator/court. Necessary provision against doubtful debts/loans and advances is made based on the previous experience of management. Receivable/ Advances are written off as and when considere unrealizable. It is pertinent to mention that all these dues which have been written off during the year pertain to the Govt. Departments.

3 Whether proper records As per information & are maintained for inventories explanation given to us NIL lying with third parties & there is no inventory lying assets received as gift with third parties from Government or other and no assets received as authorities? gift from Government or other authorities.

4 A report on age-wise There are 235 pending analysis of pending legal/arbitration cases NIL legal/arbitration cases against/by the company. including the reasons of The age-wise pendency and existence/ classification obtained effectiveness of a monitoring from the management mechanism for expenditure on is as under- all legal cases (foreign and local) may More : 2 be given? than 25 years

A. Directions

Fifteen to Twenty Five years : 20

Five to Fifteen years : 91

Less than Five years : 122

The cases are under sub judiciary & the company does not have any control on the procedures/ methods adopted by Arbitrators/courts for the settlement. The company has a separate legal cell which maintains a penal of lawyers who are prosecuting / defending the cases on behalf of the company. The legal cell maintain status of pending cases & coordinate with the advocates by providing necessary documents/information in order to safeguard the interest of the company. The company is maintaining a penal of advocates & schedule of pre approved fee. Hence the expenditure on legal fee is being monitored/ controlled by law division of the company.

B Sub Directions : NIL

Sl. Directions/Sub Directions Impact on No. financial statement A. Directions

1 If the company has Not been selected for Applicable disinvestment, a complete status report in terms of valuation of Assets (including intangible assets and land) and liabilities (including Committed & General Reserves) may be examined including the mode and present stage of disinvestment process?

2 Please report whether there are any cases of waiver/write Already off debits/loans/interest etc., accounted if yes, the reasons there for and the amount involved?

3 Whether proper records are maintained for inventories Nill lying with third parties & assets received as gift from Government or other authorities?

4 A report on age-wise analysis of pending legal/arbitration cases Nill including the reasons of pendency and existence/ effectiveness of a monitoring mechanism for expenditure on all legal cases (foreign and local) may be given?

A. Directions

For JAGDISH CHAND & CO. Firm Registration Number: 000129N Chartered Accountants

Sd/- (J.C. Gupta) Place of signature: New Delhi Partner Date: 22nd May, 2015 Membership Number :006107

Mar 31, 2014

We have audited the accompanying financial statements of National Buildings Construction Corporation Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2014, the Statement of Profit and Loss and 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

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 control 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.

Auditor''s 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 misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our 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, we consider 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 the 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 the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2014;

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

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

Emphasis of Matter

We draw attention to the following:-

a) Offices/projects outside India have not been visited by us. Investment, turnover and profit in respect of such foreign projects has been incorporated based on the records available at Head Office and as certified by the Management.

b) Adjustments that may arise on account of final settlement of accounts with various Clients, PRWs, Suppliers & others and their balances are subject to reconciliation and confirmation (Refer Note 3 and Note 33 of Notes of Financial Statements).

Report on Other legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the 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 subsection (3C) of section 211 of the Companies Act, 1956 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.

e) As per Notification No. GSR 829(E) dated 21.10.2003 issued by the Department of Companies Affairs, the provisions of Section 274(1)(g) of the Companies Act, 1956 are not applicable to the Company.

f) Further to our comments above, we are unable to ascertain and report the impact on the state of affairs / profitability on account of the following:-

i) There are outstanding dues on account of book debts amounting to Rs.4791.25Lakhs (previous year Rs.5534.81 Lakhs) in respect of closed inland projects, which are more than three years old including an amount of Rs.3598.52 Lakhs (previous year Rs. 1360.88 Lakhs) under litigation/arbitration. The same have been shown as good for recovery (Refer Note 12 of Financial Statements).

ii) No provision has been made for penal levy amounting to Rs.1654.93 Lakhs (previous years Rs. 1654.93 Lakhs) for guarantees given by the government for loans taken by the Company in view of issue being under dispute though the same has been shown as contingent liability (Refer Note 30 of Financial Statements).

Annexure to Auditor''s Report

With reference to the Annexure referred to in the Auditor''s report, to the members of the company on the financial statements for the period ended 31st March 2014, we report that:

1. In respect of its fixed assets:

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

b) All the assets have been physically verified by the Management during the year according to a regular program of verification, which in our opinion is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies have been noticed on such physical verification.

c) The Company has not disposed off any substantial part of its fixed assets during the year, which may have any impact on the going concern nature of the company.

2. In respect of its inventories:

a) According to the information and explanations given to us, inventories have been physically verified during the year by the management, except those lying with outside parties or under custody of clients.

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

c) In our opinion and according to the information and explanations given to us, the Company is maintaining proper records of inventory and no material discrepancies were noticed on verification between the physical stocks and the book records.

3. a) The Company has not granted any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Act. Therefore, the provisions of sub- clauses (a), (b), (c) and (d) of clause 4(iii) of the order are not applicable to the company.

b) The Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Act. Therefore, the provisions of sub-clauses (a), (b), (c) and (d) of clause of 4(iii) of the order are not applicable to the company.

4. In our opinion, and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business, for the purchase of inventory and fixed assets and for sale of goods and services. During the course of our audit, we have not observed any instance of major weaknesses in such internal controls.

5. Based on the audit procedures applied by us and according to the information and explanations given to us, there are no transactions that need to be entered into a register in pursuance of Section 301 of the Act. Accordingly, clause 4(v)(b) of the Order is not applicable to the company.

6. The Company has not accepted any deposits from the public within the meaning of Section 58A and 58AA of the Companies Act, 1956 and the rules framed there under.

7. On the basis of the internal audit reports broadly reviewed by us, we are of the opinion that, the coverage of Internal audit system carried out by the firms of Chartered Accountants appointed by the management and by the Internal Audit department of the company, has further scope for improvement to be commensurate with the size of the company and nature of the its business.

8. We are of the opinion that prima facie, the Cost records have been prescribed by the Central Government under clause (d) of sub section (I) of Section 209 of the Act. For the Financial year 2013-14, cost records are under preparation.

9. a) According to the information and explanations given to us and the records of the Company examined by us, we are of the opinion that, statutory dues like Sales Tax/ Value Added Tax, Income Tax, Provident Fund, Investor Education and Protection Fund, Wealth Tax, Service Tax, Custom Duty, Labour Welfare Cess, and other material statutory dues applicable to the company, have been generally regularly deposited during the year with the appropriate authorities. There were no dues on account of Cess under Section 441A of the Companies Act, 1956 since the aforesaid section has not yet been made effective by Central Government. According to the informations and explanations given to us, no undisputed amounts payable in respect of above were in arrears, as at 31st March , 2014 for the period of more than six months from the date on which they became payable. We have been informed that the provisions of the Employees State Insurance Act are not applicable to the company.

b) According to information and explanations given to us and the records of the company examined by us, the particulars of dues of sales tax, income tax, and service tax, as at 31st March 2014 which have not been deposited on account of a dispute, are as follows:-

Name of the Statute Nature of dues Amount (Rs) Period Forum where dispute is pending

Sales Tax Act Sales Tax 16.26 2012-13 HIGH COURT, JAIPUR

Central Board of Excise Service Tax 128.03 2011-12 CIT (A) and Customs

Service Tax 1119.73 2010-11 CESTAT

Service Tax 66.57 2009-10 ITAT

Service Tax 11.49 2008-09 ITAT

Service Tax 226.93 2008-09 (Re-open) CIT (A)

Service Tax 2534.5 2007-08 (Re-open) CIT (A)

Income Tax Act, 1961 Income Tax 152 2007-08 CIT (A)

Income Tax 14.47 2006-07 ITAT

Income Tax 348.58 2004-05 ITAT

Income Tax 2003-04 ITAT

Income Tax 2000-01 ITAT

Income Tax 58.47 2003-04 (Re-open) ITAT

Income Tax 120.00 2002-03 ITAT

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

11. In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to bank and financial institution. Asthe company has not borrowed any sums by way of debentures or otherwise.

12. According to the information and explanations given to us and based on the documents and records produced 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 is not a chit fund or a Nidhi or a mutual benefit society. Therefore, the provisions of sub para (xiii) of para-4 of the order are not applicable to the company.

14. According to the information and explanations given to us, the Company has not dealt/traded in shares, securities, debentures and other investments except investments in UTI Liquid fund cash plan, IDBI Liquid fund plan, SBI Premier Liquid fund plan and Canara Robeco Liquid fund plan. In our opinion and according to the information and explanations given to us, proper records have been maintained for the said investments and the same has been held by the company, in its own name.

15. According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from bank or financial institutions.

16. According to the information and explanations given to us there is no loan outstanding as at the end of the year. The company has not obtained any terms loan during the year.

17. According to the information and explanations given to us, and on an overall examination of the balance sheet of the company, we are of opinion that there are no funds raised on short-term basis that have been used for long-term investment.

18. According to information and explanation given to us, the Company has not made any preferential allotment of shares during the year to parties and companies to parties covered in the register maintained under section 301 of the Companies Act, 1956.

19. The Company has not issued any debentures during the year. Accordingly, paragraph 4(xix) of the Order is not applicable.

20. The Company has not raised money by way of Public Issue during the year. Accordingly, paragraph 4(xx) of the order is not applicable.

21. During the course of our examination of the books and records of the Company, and according to the information and explanations given to us by the management, we report that no material fraud on or by the Company has been noticed or reported during the course of our audit, nor we have been informed of such case by the management.

For Sharma Goel & Co.LLP

Chartered Accountants FRN:000643N

Sd./-

Place : New Delhi Amar Mittal

Date : 26.05.2014 (Partner)

M.No.017755

Mar 31, 2012

1. We have audited the attached Balance Sheet of National Buildings Construction Corporation Limited as at 31st March, 2012 and also the Profit & Loss Account and the Cash-Flow Statement 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.

2. We 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 misstatements. 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 over- all financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors' Report) Order, 2003 as amended by Companies( Auditors' Report) (Amendment) order, 2004( hereinafter referred to as 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 of books and records of the Company as we considered appropriate and according to the explanations given to us, we annex hereto a statement on matters specified in paragraphs 4 & 5 of the said Order.

4. Further to our comments in the annexure referred to in paragraph-3 above and subject to what is stated here in below vide paragraph- (vi), we report that:-

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

ii) In our opinion, proper books of accounts as required by law have been kept by the Company in so far as appears from our examination of the books;

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

iv) In our opinion, Balance Sheet, Profit & Loss Account and Cash Flow Statement have been drawn in accordance with the Accounting Standards referred to clause 3(c) of Section 211 of the Companies Act, 1956;

v) Since Section 274(1)(g) of the Companies Act, 1956 is not applicable to the Government Companies, as per Notification No. GSR 829(E) dated 21/10/2003 issued by Department of Companies Affairs; we have no comments regarding disqualification for appointment of directors;

vi) Further to our comments above, we are unable to ascertain and report the impact on the state of affairs/profitability on account of the following:-

a) Offices/projects outside India have not been visited by us. As per the information given to us, some works have been performed under overseas projects during the year. Exchange fluctuation and other income/ expenditure transactions have taken place in respect of such Overseas Projects and the same has been accounted for. Investment in respect of such foreign project has been incorporated based on the records available at Head Office and as certified by the Management.

b) Adjustments that may arise on account of reconciliation and final settlement of accounts with various Clients, PRWs, Suppliers and others (Refer Note No. 4 of Notes on Financial Statements).

c) There are outstanding dues on account of book debts amounting to Rs. 5858.36 lakhs (previous year Rs. 4045.37 lakhs) in respect of closed inland projects, which are more than three years old including an amount of Rs. 1742.30 lakhs (previous year Rs. 1756.18 lakhs) under litigation/arbitration. The same have been shown as good for recovery (Refer Note No. 12 of Notes on Financial Statements).

d) Balances of trade receivables, trade payables and loans and advances are subject to reconciliation and confirmation (Refer Note No. 35 of Notes on Financial Statements).

e) Investment towards equity participation of NBCC in Joint Venture has been accounted for on payment /adjustment basis. The aggregate amount of each of the Assets, Liabilities, Income and expenses related to interest in Joint Venture has not been incorporated (Refer Note No. 9A of Notes on Financial Statements).

f) The Company has written-back certain old unclaimed credit balances of Rs. 1308.71 lakhs (previous year Rs. 404.03 lakhs) based on review/ assessment done by the management (Refer Note No. 21 of Notes on Financial Statements).

g) No provision has been made for penal levy amounting to Rs. 1654.93 lakhs (previous years Rs. 1654.93 lakhs) for guarantee given by the government for loans taken by the Corporation in view of issue being under dispute though the same has been shown as contingent liability (Refer Note No. 31 of Notes on Financial Statements ).

Subject to what is stated in paragraph 4 (vi) (a) to (g), in our opinion and to the best of our information and according to the information and explanations given to us, the said accounts, read with notes to financial statements, 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 31st March 2012.

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

c) In the case of the Cash-Flow statement, of the cash flow for the year ended on that date.

ANNEXURE TO THE AUDITORS' REPORT

(Referred to in Paragraph '3' of the Auditors' Report of even date)

i) (a) In terms of information and explanations given to us and the books and records examined by us in the normal course of audit, we report that, the Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(b) According to the information and explanations given to us, there is a regular programme of verification of fixed assets, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Fixed assets have been physically verified by the management during the year and no material discrepancies were noticed on such verification.

c) The Company has not disposed off any substantial part of its fixed assets during the year, which may have any impact on the going concern nature of the company.

ii) a) According to information and explanations given to us, inventories have been physically verified during the year by management, except those lying with outside parties or under custody of clients.

b) In our opinion and according to the explanations provided to us, the procedures adopted for physical verification of inventory are reasonable and adequate in relation to the size of the company and the nature of its business.

c) The company has generally maintained proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material and these have been properly dealt with in the books of accounts.

iii) a) The Company has not granted any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Act. Therefore, the provisions of sub-clauses (a), (b), (c) and (d) of clause 4(iii) of the order are not applicable to the company.

b) The Company has not taken any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Act. Therefore, the provisions of sub-clauses (a), (b), (c) and (d) of clause 4(iii) of the order are not applicable to the company.

iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods. During the course of our audit, we have not observed any continuing major weakness in such internal controls.

v) Based on the audit procedures applied by us and according to the information and explanations given to us, there are no transactions that need to be entered into a register in pursuance of Section 301 of the Act. Accordingly, clause 4(v) (b) of the Order is not applicable to the Company.

vi) The Company has not accepted any deposits from the public under the provisions of Section 58A and 58AA of the Companies Act, 1956 and the rules framed there under.

vii) On the basis of the internal audit reports broadly reviewed by us, we are of the opinion that, the coverage of internal audit system carried out by the firms of Chartered Accountants appointed by the management and by the Internal Audit department of the company, has further scope for improvement to commensurate with the size of the company and the nature of its business.

viii) Cost records have been prescribed by the Central Government under clause(d) of Sub Section (I) of Section 209 of Act. However as NBCC is engaged in contracting or sub-contracting activities and is paid only the job work or conversion charges the company is not covered under Companies(Cost Accounting Records) Rules 2011.

ix) a) According to the information and explanations given to us and the records of the Company examined by us, we are of the opinion that, statutory dues like Sales Tax/Value Added Tax, Income Tax, Provident fund, Wealth Tax, Service Tax, Custom Duty, Labour Welfare Cess and other material statutory dues applicable to the company, have been generally regularly deposited during the year with the appropriate authorities subject to an exception of undeposited amount of Labour Welfare Cess to the tune of Rs. 1996.27 lakhs disclosed in Note 6 of the Notes to financial statements under the head other Current Liabilities. According to the information and explanations given to us, no undisputed amounts payable in respect of above were in arrears, as at March 31, 2012 for the period of more than six months from the date on which they became payable except in the case of undeposited amount of Rs. 1996.27 lakhs pertaining to Labour Welfare Cess as mentioned above. We have been informed that the provisions of the Employees State Insurance Act are not applicable to the Company.

b) According to the information and explanations given to us and the records of the company examined by us, the particulars of dues of sales-tax, income-tax & service tax, as at 31st March, 2012 which have not been deposited on account of a dispute, are as follows:-

Nature of dues Amount Due (Rs. Lakhs) (Forum where Lakhs) disputes are pending

Sales Tax 16.26 Sales Tax Board, Jaipur

Income Tax 514.93 ITAT

Service Tax 1119.73 CESTAT

Total 1650.92

x) The company does not have any accumulated losses at the end of the financial year and has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

xi) According to the information and explanation given to us and the records examined by us, the company has not defaulted in repayment of dues to Govt. of India, financial institutions, banks or debenture holders.

xii) 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 share, debentures and other securities.

xiii) The Company is not a chit fund or a nidhi or a mutual benefit society. Therefore, the provisions of sub para (xiii) of para-4 of the order are not applicable to the company.

xiv) According to the information and explanations given to us, the Company has not dealt/traded in shares, securities, debentures and other investments except investments in UTI Liquid Fund Cash Plan and lDBI Liquid Fund Cash Plan. In our opinion and according to the information and explanations given to us proper records have been maintained for the said investments and the same has been held by the company, in its own name.

xv) According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from bank or financial institutions.

xvi) According to the information and explanations given to us there is no loan outstanding as at the end of the year. The Company has not obtained any term loan during the year.

xvii) According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, We report that the company has not used funds raised on short term basis for long term investments.

xviii) According to the information and explanations given to us, the company has not made any preferential allotment of shares during the year to parties and companies covered in the register maintained under Section 301 of the Companies' Act, 1956.

xix) According to the information and explanations given to us, the Company has not issued any debentures during the year and therefore the question of creating security in respect thereof does not arise.

xx) According to the information and explanations given to us, the Company during the year has not raised any fund by way of public issue.

xxi) 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, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company, has been noticed or reported during the year, nor we have been informed of such case by the Management.

For Amit Ray & Co.,

Chartered Accountants

(ICAI Firm No. 000483C)

Amitava Ray

Place : New Delhi Partner

Dated : 29.05.2012 Membership No. 6947

Mar 31, 2008

Not Available

Mar 31, 2006

1. We have audited the attached Balance Sheet of National Buildings Construction Corporation Limited as at 31st March 2006 and also the Profit & Loss Account and the Cash-Flow Statement 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.

2. We 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 misstatements. 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 over-all financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors' Report) Order, 2003, issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956, we annex hereto a statement on matters specified in paragraphs 4 & 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 here in above and subject to what is stated here-in below vide paragraph (vi), we report that :-

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

(ii) In our opinion, proper books of accounts as required by law have been kept by the Company in so far as appears from our examination of the books.

(iii) The Balance Sheet and Profit and Loss Account dealt with by this report are in agreement with the books of accounts.

(iv) In our opinion, Balance Sheet and Profit & Loss Account have been drawn in accordance with the Accounting Standards referred to clause 3(c) of Section 211 of the Companies Act, 1956 except for Accounting Standards in respect of the following matters :

(A) Accounting policy No. 6(a)(iii) has been followed in preference to Accounting Standard

11 (AS 11) Accounting for the Effects of changes in Foreign Exchange Rates issued by the Institute of Chartered Accountants of India regarding conversion of accounts of Libyan and Iraqi projects into Indian Currency. (Refer Para (vi)(d) below)

(v) Since Section 274(1)(g) of the Companies Act, 1956 is not applicable to the Government Companies, as per Notification No. GSR 829 (E) Dated 21/10/2003 issued by Department of Companies Affairs, we have no comments regarding disqualification for appointment of directors.

(vi) Further to our comments in annexure referred to in Para-3 and Para-4 above, we are unable to ascertain and report the impact on the state of affairs / profitability on account of the following :-

a) Offices / projects outside India have not been visited by us. The value of work done, exchange fluctuations, other income / expenditure transactions and other balances in respect of foreign projects have been incorporated based on the records available at Head Office as received from these projects and as certified by the Management.

b) Adjustments that may arise on account of reconciliation and final settlement of accounts with various clients, PRWs, Suppliers and others (Refer Para 10 of Schedule 22).

c) There are outstanding dues on account of book debts amounting to Rs. 5601.01 lacs in respect of closed inland projects, which includes an amount of Rs. 1969.80 lacs under litigation/arbitration. The same have been shown as good for recovery. (Refer Para 5 of Schedule-22).

d) The accounts of Iraqi and Libyan projects have been translated into Indian currency at the effective buying rate prevailing as on 31.3.2001 (Refer Para 15 of Schedule 22).

e) Dues in respect of projects in Iraq amounting to a sum of Rs. 5234.41 lakhs are shown as good for recovery. (Refer para No.6 of Schedule-22).

f) Dues including security deposit in respect of Libyan projects amounting to Rs.5712.40 lacs are shown as good for recovery. ( Refer Para 7 & 8 of schedule 22)

g) Balances of Debtors, Creditors and loans and advances are subject to confirmation. (Refer Para 11 of Schedule 22).

h) In accordance with Para 17 of Schedule 22 regarding redemption of 7% non-cumulative preference shares same are redeemable in 10 years upto 31.03.2007.

i) The amount payable towards equity participation of NBCC in Joint Venture Co-Jamal-NBCC International Private Limited has not been accounted for. (Refer Para 23 of Schedule 22).

j) The company has written back certain old unclaimed credit balances of Rs.430.40 lacs based on review/assessment done by the management ( Refer Para 14 of schedule 22).

k) An amount of Rs. 1128.60 lacs lying with Rasheed Bank, Iraq has been shown as good for recovery. (Refer Para No. 3 of Schedule 22)

l) No provision has been made for penal levy amounting to Rs. 1531.19 lacs (including Rs. 63.58 lacs for the current year ) for guarantee given by the government for loans taken by the Corporation in view of issue being under dispute.

Subject to what is stated in paragraph 4(iv) (A) and paragraph (vi) (a) to (l), in our opinion and to the best of our information and according to the information and explanations given to us, the said accounts, read with notes thereon, give a true and fair view:-

a) In the case of Balance Sheet, of the state of affairs of the Company as at 31st March, 2006 and

b) In the case of Profit & Loss Account, of the profit of the company for the year ended on that date.

c) In the case of the Cash-Flow statement, of the cash flow for the year ended on that date.

ANNEXURE TO THE AUDITOR'S REPORT

(Referred to in paragraph '3' of our report of even date)

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

(b) As explained to us, physical verification of fixed assets was conducted by the management at the end of the financial year.

(c) The company has not disposed off any substantial part of its fixed assets during the year, which may have any impact on the going concern nature of the company.

(ii) (a) According to information and explanations given to us, inventories have been physically verified during the year by management (except those lying with outside parties or under custody of clients).

(b) The procedures adopted for physical verification of inventory in our opinion are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) The company has generally maintained proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material and these have been properly dealt with in the books of accounts.

(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 301 of the Act. Therefore, the provisions of sub-clauses (a), (b), (c) and (d) of clause 4(iii) of the order are not applicable to the company.

(b) The company has not taken any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Act. Therefore, the provisions of sub-clauses (a), (b),(c) and (d) of clause 4(iii) of the order are not applicable to the company

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods. During the course of our audit, we have not observed any continuing major weakness in such internal controls.

(v) Based on the audit procedures applied by us and according to the information and explanations given to us, there are no transactions that need to be entered into a register in pursuance of Section 301 of the Act. Accordingly, clause 4(v) (b) of the Order is not applicable to the Company.

(vi) The company has not accepted any deposits under the provisions of Section 58A and 58AA of the Companies Act, 1956 and the rules framed thereunder.

(vii) On the basis of the internal audit reports broadly reviewed by us, we are of the opinion that, the coverage of internal audit function carried out by the firms of Chartered Accountants appointed by the management is commensurate with the size of the company and the nature of its business.

(viii) We have been informed that the Central Govt. has not prescribed the maintenance of Cost Records under clause (d) of sub-section (I) of Section 209 of the Companies Act, 1956.

(ix) (a)According to the information and explanations given to us and the records of the Company examined by us, in our opinion, statutory dues like Sales Tax and Income Tax Deducted at source have been regularly deposited by the company with the appropriate authorities during the year. We have been informed that the provisions of the Employees State Insurance Act are not applicable to the Company.

(b) According to the information and explanations given to us and the records of the company examined by us, the particulars of dues of sales-tax, income-tax, customs duty, wealth tax, excise duty and cess as at 31st March, 2006 which have not been deposited on account of a dispute, are as follows :-

Nature of dues Amount due Forum where pending (Rs. in lacs)

Sales Tax 26.42 Commissioner (Sales Tax), Jaipur & Dy.Commissioner(Sales Tax), Lilabari (Guwahati)

Income Tax 47.79 Income Tax Appellate Tribunal (New Delhi)

(x) Accumulated losses of the Company as at March 31, 2006 does not exceeds the fifty percent of net worth of the Company as at that date. However, the Company has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

(xi) According to information and explanation given to us and the records examined by us, the company has defaulted in repayment of dues to Govt. of India in respect of interest on Government of India loan amounting to Rs. 6713.57 lacs.

(xii) 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 share, debentures and other securities except to its employees for vehicle against execution of necessary documents as per laid down policy of the Company.

(xiii) The Company is not a chit fund or a nidhi or a mutual benefit society. Therefore, the provisions of sub para (xiii) of para - 4 of the order are not applicable to the company.

(xiv) As informed and explained to us, the Company has not dealt/traded in shares, securities, debentures and other investments except investments in fixed deposits with the banks. In our opinion and according to the information and explanations given to us proper records have been maintained for investments in fixed deposits and such fixed deposits have been held by the company, in its own name.

(xv) According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from bank or financial institutions.

(xvi) As per information given to us the loan outstanding as at the end of the year were raised and utilized in the period prior to our audit. Hence we are unable to comment whether the same have been applied for the purpose for which they have been raised. The Company has not obtained any term loan during the year.

(xvii) According to information and explanations given to us and on an overall examination of the Balance Sheet of the Company, We report that the company has not used funds raised on short term basis for long term investments and vice versa.

(xviii) According to information and explanations given to us, the company has not made any preferential allotment of shares during the year to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956.

(xix) According to the information and explanations given to us , the Company has not issued any debentures during the year and therefore the question of creating security in respect thereof does not arise.

(xx) According to the information and explanations given to us, the Company has not raised any fund by way of public issue.

(xxi) 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, and according to the information and explanations given to us, we have neither come across any instance or fraud on or by the Company, notices or reported during the year, nor have we been informed of such case by the Management.

For Dinesh Mehta & Company

Chartered Accountants.

PLACE : NEW DELHI.

DATED : 11th July, 2006

(ANUP MEHTA)

PARTNER

M.No. 93133

Mar 31, 2005

We have audited the attached Balance Sheet of National Buildings Construction Corporation Limited as at 31st March,2005 and also the Profit & Loss Account and the Cash-Flow Statement 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 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 misstatements. 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 over-all financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

1. As required by the Companies (Auditors' Report) Order, 2003, issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956, we annex hereto a statement on matters specified in paragraphs 4 & 5 of the said Order.

2. Further to our comments in the annexure referred to in paragraph-1 here in above and subject to what is stated here in below vide paragraph-3, we report that:-

a) We have obtained all 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 accounts as required by law have been kept by the Company in so far as appears from our examination of the books.

c) The Balance Sheet and Profit and Loss Account dealt with by this report are in agreement with the books of accounts.

d) In our opinion, Balance Sheet and Profit & Loss Account have been drawn in accordance with the Accounting Standards referred to clause 3(c) of Section 211 of the Companies Act, 1956 except for Accounting Standards in respect of the following matters:

i) Accounting policy No.6(a)(iii) has been followed in preference to Accounting Standard-11 (AS-11) Accounting for the Effects of changes in Foreign Exchange Rates issued by the Institute of Chartered Accountants of India regarding conversion of accounts of Libyan and Iraqi Projects into Indian Currency. (Refer Para-3(a)(iv) below).

ii) No provision has been made for foreseeable losses which is not in agreement with Accounting Standard 7(AS 7) Accounting for Construction Contracts (Refer Para 3(b)(i) below)

e) Since Section 274(1)(g) of the Companies Act, 1956 is not applicable to the Government Companies, as per Notification No.GSR 829(E) dated 21.10.2003 issued by Department of Companies Affairs, we have no comments regarding disqualification for appointment of directors.

3) Further to our comments in annexure referred to in Para-1 and Para-2 above, we report as under:-

a) We are unable to ascertain and report the impact on the state of affairs/profitability on account of the following:-

i) Office/projects outside India have not been visited by us. The value of work done, exchange fluctuations, other income / expenditure transactions and other balances in respect of foreign projects have been incorporated based on the records available at Head Office as received from these projects and as certified by the Management.

ii) Adjustments that may arise on account of reconciliation and final settlement of accounts with various clients, PRWs, Suppliers and others (Refer Para 12 of Schedule 22).

iii) There are outstanding dues on account of book debts amounting to Rs.61,32,23 thousands in respect of closed inland projects, which includes an amount of Rs.24,88.23 thousand under litigation/arbitration. The same have been shown as good for recovery. (Refer Para 6 of Schedule-22).

iv) The accounts of Iraqi and Libyan projects have been translated into Indian Currency at the effective buying rate prevailing as on 31.03.2001 (Refer Para 18 of Schedule-22).

v) Dues in respect of projects in Iraq amounting to a sum of Rs.70,01,44 thousand are shown as good for recovery. (Refer Para No.7 of Schedule-22).

vi) Dues including security deposit in respect of Libyan projects amounting to Rs.57,12,40 thousand are shown as good for recovery. (Refer Para 8(i) and 9(i) of Schedule-22).

vii) Balances of Debtors, Creditors and loans and advances are subject to confirmation. (Refer Para 13 of Schedule-22).

viii) Para 21 of Schedule-22 regarding redemption of 7% non-cumulative preference shares.

ix) The amount payable towards equity participation of NBCC in Joint Venture Co-Jamal-NBCC International Private Limited has not been accounted for. (Refer Para 31 of Schedule-22).

x) The Company has written-back certain Old unclaimed credit balances of Rs.1,34,92 thousand based on review/ assessment done by the management (Refer Para 17 of Schedule-22).

xi) There are instances where penal action may be initiated by the concerned statutory authorities.

xii) The grant receivable from Govt. of India, Ministry of Urban Development for Rs.13,00,00 thousand has been considered receivable from Government in view of letter No.0-17031/22/80-PS dated 13.07.2005 confirming that the settlement of interest due is under consideration of the Government. (Refer Para No.10 Schedule-22).

xii) An amount of Rs.11,28,60 thousand lying with Rushed Bank, Iraq has been shown as good for recovery. ( Refer Para No.3 of Schedule-22)

xiii) The liability of Rs.7,63,08 thousand has not been considered in terms of sanction from the Government of India, Ministry of Urban Development. (Refer Para No.19 of Schedule -22).

xiv) No provision has been made for guarantee fees and penal levy amounting to Rs.22,50,35 thousand (including 1,27,17 thousand for current year) for guarantee given by the government for loans taken by the Corporation in view of issue being under dispute.

xv) Provision of Rs.22,55,29 thousand has not been considered because the award is under dispute and not acceptable to both the parties (Refer para 8(ii) and 9(ii) of Schedule-22).

xvi) Advances given by the Corporation to contractors for Libyan/Iraqi/Mauritius projects amounting to Rs.5,10,11 thousand are doubtful of recovery being under dispute/litigation/ arbitration. Moreover, there are advances amounting to Rs.90,30 thousand for Libyan Projects which are very old and no recovery made by the Corporation so far, though shown as good instead of doubtful.

b) Reference is invited to the Notes forming part of accounts for the year ended 31st March, 2005 (Schedule-22) and other points as mentioned here in below, for which neither expenditure was booked nor provision for liabilities made in the accounts:

i) Provision of Rs.2,81,62 thousand arising due to arbitration/court award has not been provided for in the accounts.

ii) No provision has been made for foreseeable losses of Rs.2,22,77 thousand as per Accounting Standard-7. (Refer Para 14 of Schedule- 22).

The effect of the various qualifications given above on the profit as well as assets and liabilities of the company could not be ascertained for want of details. However due to qualifications contained in Para No.3(b)(i) and (ii) the profit for the year is overstated by Rs.5,04,39 thousand, liabilities are under stated by Rs.2,22,77 thousand and assets are over stated by Rs.2,81,62 thousand.

Subject to what is stated in paragraph 2(d) (i) and 2(d)(ii) and paragraph 3(a)(i) to (xvii) and 3(b)(i) & (ii) supra, in our opinion and to the best of our information and according to the information and explanations given to us, the said accounts, read with notes thereon, give a true and fair view:-

i) In the case of Balance Sheet, of the state of affairs of the Company as at 31st March,2005 and

ii) In the case of Profit & Loss Account, of the profit of the company for the year ended on that date.

iii) In the case of the Cash-Flow statement, of the cash flow for the year ended on that date.

ANNEXURE TO THE AUDITORS'S REPORT

(Referred to in paragraph '1' of our report of even date)

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

(b) According to information and explanations given to us, the fixed assets were physically verified by the Management at the end of the financial year. Physical verification report of fixed assets is pending reconciliation with the book records.

(c) Although some of the fixed assets have been disposed of during the year. In our opinion and according to the information and explanations given to us, the ability of the Company to continue as a going concern is not affected.

(ii)(a) According to information and explanations given to us, inventories have been physically verified during the year by management (except those lying with outside parties or under custody of clients).

(b) The procedures adopted for physical verification of inventory in our opinion are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) The company has generally maintained proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material and these have been properly dealt with in the books of accounts.

(iii) The company has neither granted nor taken any loans, secured or unsecured to / from companies, firms or other parties covered in the register maintained under section 301 of the Act. Since the Company has neither granted nor taken any loans, secured or unsecured to / from companies firms or other parties covered in the register maintained under section 301 of the Companies Act 1956, accordingly, clause 4(iii)(b)(c) and (d) of the order are not applicable.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods. Further on the basis of our examination of the books and records of the Company and according to the information and explanations given to us, we have neither come across nor have been informed of any instances of major weaknesses in the aforesaid internal control procedures.

(v) Based on the audit procedures applied by us and according to the information and explanations given to us, there are no transactions that need to be entered into a register in pursuance of Section 301 of the Act. Accordingly, clause 4(v) (b) of the order is not applicable to the Company.

(vi) The company has not accepted any deposits under the provisions of Section 58A and 58AA of the Act and the rules framed thereunder.

(vii) On the basis of the internal audit reports broadly reviewed by us, we are of the opinion that, the coverage of internal audit function carried out by the firms of Chartered Accountants appointed by the management is commensurate with the size of the company and the nature of its business.

(viii) We have been informed that the Central Govt. has not prescribed the maintenance of Cost Records under clause (d) of sub-section(I) of section 209 of the Act.

(ix)(a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, certain undisputed statutory dues like Sales Tax and Income Tax Deducted at source have not been regularly deposited by the company with the appropriate authorities during the year. We have been informed that the provisions of the Employees State Insurance Act are not applicable to the Company.

(b) According to the information and explanations given to us and the records of the company examined by us, the particulars of dues of sales-tax, income- tax, customs duty, wealth tax, excise duty and cess as at 31st March,2005 which have not been deposited on account of a dispute, are as follows:-

Nature of Amount Forum where dues due pending (Rs. in '000)

Sales Tax 1792 Commissioner (Sales Tax), Raipur

Income Tax 4741 Income Tax Appellate Tribunal(Delhi)

(x) Accumulated losses of the Company as at March 31, 2005 exceeds the net worth of the Company as at that date. However, the Company has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

(xi) According to information and explanation given to us and the records examined by us, the company has defaulted in repayment of dues to bank and Govt. of India in respect of the following:-

Name of Bank/ Nature of Amount Financial Inst. payment (Rs. in '000)

Syndicate Bank Interest on 4,82,90 Delhi. Spl.Rupee loan Govt. of India Interest on GOI 67,13,57 Loan

Govt. Bodies Interest 5,60,00 accrued and due

(xii) 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 share, debentures and other securities except to its employees for vehicle against execution of necessary documents as per laid down policy of the Company.

(xiii) The Company is not a chit fund or a nidhi or a mutual benefit society. Therefore, the provisions of sub para (xiii) of para-4 of the order are not applicable to the company.

(xiv) As informed and explained to us, the Company has not dealt/traded in shares, securities, debentures and other investments except investments in fixed deposits with the banks. In our opinion and according to the information and explanations given to us proper records have been maintained for investments in fixed deposits and such fixed deposits have been held by the company, in its own name.

(xv) According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from bank or financial institutions.

(xvi) As per information given to us the loan outstanding as at the end of the year were raised and utilized in the period prior to our audit. Hence we are unable to comment whether the same have been applied for the purpose for which they have been raised. The Company has not obtained any term loan during the year.

(xvii) According to information and explanations given to us and on an overall examination of the Balance Sheet of the Company, We report that the company has not used funds raised on short term basis for long term investments and vice versa.

(xviii) According to information and explanations given to us, the company has not made any preferential allotment of shares during the year to parties and companies covered under Section 301 of the Companies' Act, 1956.

(xix) According to information and explanations given to us, the Company has not issued any debentures during the year and therefore the question of creating security in respect thereof does not arise.

(xx) According to the information and explanations given to us, the Company has not raised any fund by way of public issue.

(xxi) 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, and according to the information and explanations given to us, we have neither come across any instance or fraud on or by the Company, notices or reported during the year, nor have we been informed of such case by the Management.

For Dinesh Mehta & Company Chartered Accountants

Place: New Delhi Sd/-

Date: 25.07.2005 (ANUP MEHTA) PARTNER Membership No.93133

Mar 31, 2004

We have audited the attached Balance Sheet of National Buildings Construction Corporation Limited as at 31st March, 2004 and also the Profit & Loss Account and the Cash-Flow Statement 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 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 misstatements. 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.

In accordance with the provisions of Section 227 of the Companies Act, 1956, we report as under:

1. As required by the Companies (Auditors' Report) Order, 2003, issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956, we annex hereto a statement on matters specified in paragraphs- 4 & 5 of the said Order.

2. The accumulated losses of the Corporation stand at Rs. 89,82,62 thousands as on 31.03.2004. The Corporation has defaulted in timely discharge of statutory dues, repayment of banks and financial institutions loans and interest thereon and Government loan instalments.

3. Further to our comments in annexure referred to in Para-1 and Para-2 above, we report as hereunder.

a) We are unable to ascertain and report the impact on the state of affairs / profitability on account of the following.

i) Offices / projects outside India have not been visited by us. The value of work of done, exchange fluctuations, other income/expenditure transactions and other balances in respect of foreign projects have been incorporated based on the records available at Head Office as received from these projects and as certified by the Management.

ii) Adjustments that may arise on account of reconciliation and final settlement of accounts with various clients, PRWs, Suppliers and others (Refer Para 14 of Schedule 21).

iii) There are outstanding dues on account of book debts amounting to Rs.33,12,30 thousands in respect of closed inland projects which are not under arbitration disputes and are very old. These have been shown as good for recovery.

iv) A sum of Rs. 6,75,70 thousands has been shown as advance turnover tax, adjustment of which in the books of accounts, would be made on final assessment.

v) The accounts of Iraqi & Libyan projects have been translated into Indian - currency at the effective buying rate prevailing as on 31.03.2001 (Refer Para 20 of Schedule 21)

vi) Bank balances in Iraq and outstanding dues including security deposits with clients in respect of projects completed in Iraq & Libya, realisations of which are subject to lifting of sanctions and outcome of negotiation with the two countries. (Refer Paras 4, 9, 10 (i) and 11 (i) of Schedule 21).

vii) The Company has written-back certain old unclaimed credit balances without proper identification, based on the review/assessment done by the management, as not payable (Refer para 19 of Schedule-21).

viii) Balances of Debtors, Creditors and loans & advances are subject to confirmation. (Refer Para 15 of Schedule 21)

ix) In the absence of working of billwise/agewise details of dues, we are unable to verify the classification of Sundry Debtors under 'more than six months & others'.

x) Corporation has transferred its consultancy and overhead expenses of Rs. 68,71 thousands, being 10% of the prime cost, to the value of work done in respect of MPLADS Gujarat School Works, awarded by the Government of India. These expenses were met by the Corporation out of interest on advance money receipt from the Government of India which had been kept in fixed deposits with banks. Confirmation from the Government for such utilisation by the Corporation is pending.

xi) Non-deduction of tax on amounts payable to professionals, contractors, rent etc. at the time of credit.

xii) Para 26 of Schedule 21 regarding redemption of 7% non cumulative preference shares.

xiii) Inventory worth Rs. 1,30,00 thousands which are surplus to the requirement of certain units, have been transferred to the stockyard at Ghitorni, Delhi and lying in the open unreconciled/unverified. There is a considerable diminution in the value of this stock, financial impact of which is yet to be ascertained by the Corporation.

xiv) Current liabilities do not include amount payable towards equity participation of NBCC in Joint Venture Co -Jamal-NBCC International Private Limited (Para 30 of Schedule 21).

xv) The company has not identified those fixed assets which are not in active use. As per AS-10 Material items retired from active use and held for disposal should be stated at the lower of their net book value and net realisable value and shown separately in the financial statements. Non-adherence to the requirements of AS-10 resulted in Fixed Assets (Gross Block in Active use) being overstated.

xvi) The accounting policy (Reference 9 of Schedule 20 and para 24 of Schedule 21) has been changed to make provision for leave encashment and gratuity in respect of all the employees on actuarial valuation. The impact of this change is unascertainable.

xvii) Corporation has reconstructed a bridge on Daman Ganga for which Value of work done booked during the year was for Rs. 4,82,00 thousand. It is reported that the bridge has recently collapsed. Further liability of the Corporation in this respect is not known.

xviii) Loans and advances include Rs. 2,37,44 thousands for expenses and other loans to Staff for which adjustments have not been made.

b) Reference is invited to the Notes forming part of accounts for the year ended 31st March, 2004 (Schedule 21) and other points as mentioned here in below, for which neither expenditure was booked nor provision for liabilities made in the accounts:

i) Para 3 regarding non-provision against inventory valuing Rs. 21,89 thousands and plant and machinery valuing Rs. 2,08 thousands which are impounded and under the custody of the clients.

ii) Current assets representing outstanding book debts/advances/ security deposits etc. in respect of closed inland projects due from clients/contractors amounting to Rs. 34,63,43 thousands are under litigation / arbitration. Further, current assets amounting to Rs. 87,75 thousands recoverable from parties / clients are in dispute. Corporation has shown these dues as good for recovery and has not made any provision.

iii) Included in sundry debtors of a running project is an amount of Rs.6,64,27 thousands which has not been accepted by the client, but this amount is still shown as good instead of doubtful.

iv) Para 10(ii) and 11 (ii) regarding amounts recoverable from Airport Authority of India (AAI) Rs. 14,06,78 thousands and Rs. 10,24,57 thousands respectively, thus aggregating to Rs. 24,31,35 thousands in respect of Libyan projects, which were subject matter for arbitration. The arbitration award had since been obtained in favour of the Corporation for amounts aggregating to Rs. 1,76,06 thousands only. Balance amount of Rs. 22,55,29 thousands is not recoverable, though this amount has been shown as good for recovery.

v) Advances given by the Corporation to contractors for Libyan / Iraqi / Mauritius projects amounting to Rs. 5,10,11 thousands are doubtful of recovery being under dispute / litigation / arbitration. Moreover, there are advances amounting to Rs. 90,30 thousands for Libyan projects which are very old and no recovery made by the Corporation so far, though shown as good instead of doubtful.

vi) There are arbitration awards against the Corporation and favouring contractors amounting to Rs. 49,10 thousands in respect of which the Corporation did not give effect in the accounts.

vii) Para 27 regarding non-provision of interest amounting to Rs.6,32,14 thousands on special rupee loan from the Syndicate Bank.

viii) Para 8 in respect of 1,89,54 thousands withheld by the clients on account of liquidated damages for delay in completion of projects.

ix) Para 16(i) regarding foreseeable losses on contracts which have been worked out to be Rs. 9,33,19 thousands.

x) Para 12 regarding amount of Rs. 13,00,00 thousands receivable from Ministry of Urban Development & Poverty Alleviation, towards grant for repayment of OIDB loan.

xi) Para 21 in respect of interest of Rs. 46,15,39 thousands (including Rs. 6,12,54 thousands for the current year) payable on land cost at Pragati Vihar, New Delhi which has not been paid / provided in terms of the allotment letter.

xii) Para 22 regarding reversal of a sum of Rs.7,63,08 thousands in 2000-2001 being liability to the Ministry of Urban Development without the Ministry's approval for waiver of such liability.

xiii) Provision has not been made for non payment of guarantee fees and penal levy amounting to Rs. 21,23,18 thousand (including Rs. 1,27,17 thousand for the current year) in respect of guarantee given by the Government for loans taken by the Corporation.

xiv) Provision has not been made for stamp duty of Rs. 20,44 thousands in respect of land at Ghitorni resulting understatement of fixed assets and current liabilities.

xv) Corporation has shown ex-gratia expenses to VRS employees amounting to Rs. 1,22,03 thousands as current year expenses instead of prior period expenses.

xvi) Value of work done includes sale of real estate to a party for Rs. 4,29,88 thousand without executing deed of sale / agreement to sell and even delivery of possession by 31st March, 2004. This has resulted in the overstatement of value of work done by Rs. 4,29,88 thousands and corresponding expenses by Rs. 78,16 thousands.

xvii) Accounting policy relating to the value of work done ( Para 2 of Schedule 20) is not in conformity with the Para 30(a) of AS-7 as laid down by the Institute of Chartered Accountants of India. It includes Rs. 2,36,78 thousands value of which was taken in respect of costs incurred in the year in connection with future activity on contracts. This has resulted in overstatement of VWD by Rs. 2,36,78 thousands, overstatement of expenses by Rs. 1,59,92 thousands and consequential overstatement of profit by Rs. 76,86 thousands.

xviii) Value of work done is overstated by Rs. 45,17 thousands which are neither admissible by nor probable of recovery from the client.

xix) Balances lying with Canara Bank and Syndicate Bank London at the year end have not been translated at the closing rate, thus resulting in excess bank balance by Rs. 4,41 thousand.

4. Subject to the above.

a) We have obtained all 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 accounts as required by law have been kept by the Company in so far as appears from our examination of the books.

c) The Balance Sheet and Profit & Loss Account dealt with by this report are in agreement with the books of account.

d) In our opinion, Balance Sheet & Profit & Loss Account have been drawn in accordance with the Accounting Standards referred to clause 3(c) of Section 211 of the Companies Act, 1956 except for Accounting Standards in respect of the following matters:

i) AS-5-Refer Para 3(b)(xv)

ii) AS-7-Refer Para 3(b)(viii), 3(b)(ix), 3(b)(xvii) & 3(xviii)

iii) AS-9-Refer Para 3(b)(xvi)

iv) AS-11 -Refer Paras 3(a)(v) & 3(b)(xix)

e) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the Accounting Policies and notes thereon give the information required by the Companies Act, 1956 in the manner so required. In respect of observations contained in Paragraph 3(a), we are unable to express our opinion regarding effect on the accounts in respect of the matter specified therein. Further, due to impact of qualifications contained in paragraph 3(b)(i) to (xix) profit of Rs. 14,97,20 thousands shall be converted into loss of Rs.97,97,94 thousands and in addition there will be prior period loss of Rs. 68,85,62 thousands. The total net current assets would have been (-) Rs. 42,31,35 thousands (as against the reported figure of Rs. 139,65,91 thousands) and the net fixed assets would have been Rs. 10,03,36 thousands (as against the reported figure of Rs. 9,86,86 thousands). The accumulated losses would have been Rs. 271,63,38 thousands (as against the reported figure of Rs. 89,82,62 thousands). Accordingly, considering the effect of aforesaid qualifications, we report that the said accounts do not reflect a true and fair view:

i) In the case of Balance Sheet, of the state of affairs of the Company as at 31st March 2004 and

ii) In the case of Profit & Loss Account, of the profit disclosed for the year ended on that date.

iii) In the case of the Cash Flow statement, of the cash flow for the year ended on that date.

5. As per information provided to us, the provisions of section 274(1)(g) of the Companies Act, 1956 are not applicable to the Directors of the Company in view of CL V General Circular No.8/2002 dated 22.03.2002.

ANNEXURE TO THE AUDITOR'S REPORT

(Referred to in paragraph 'I' of our report of even date)

(i) (a) The company has generally maintained proper records to show full particulars including quantitative details and situation of fixed assets.

(b) According to information and explanations given to thus, the fixed assets (except those under custody of clients) were physically verified by the management at the end of the financial year. Physical verification report of fixed assets is pending for reconciliation with the book records.

(c) Substantial part of fixed assets has not been disposed of by the company during the year.

(ii) (a) According to information and explanations given to us, physical verification of inventory is conducted at the year end (except those lying with outside parties or under custody of clients) by a team of officials. However, no such physical verification and reconciliation had taken place in respect of materials lying at the company's main stockyard at Ghitorni, Delhi (refer para 3(a)(xiii) of audit report).

(b) The procedures adopted for physical verification of inventory are generally reasonable and adequate in relation to the size of the company and the nature of its business.

(c) The company has generally maintained proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material and these have been properly dealt within the books of accounts.

(iii) The company has neither granted nor taken any loans, secured or unsecured to/from companies, firms or other parties covered in the register maintained under section 301 of the Act.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedure commensurate with the size of the company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods, except in respect of acquisition of motor vehicles and other assets at the cost of contractor in one of the units. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control.

(v) Based on the audit procedures applied by us and according to the information and explanations given to us, there are no transactions that need to be entered into a register in pursuance of section 301 of the Act. However, the company does not maintain any register as required under section 301 of the Act.

(vi) The company has not accepted any deposits under the provisions of section 58-A and 58AA of the Act and the rules framed there under.

(vii) Internal audit department is headed by a senior officer, but for the purpose of internal audit work, staff are drawn from the other departments specially from the finance department, hence to this extent the internal audit is not fool proof. Running units have not been adequately covered under Internal Audit purview during the year. Follow-ups of the reports are not prompt enough. In our opinion, internal audit system needs to be strengthened and improved commensurate with the size of the company and nature of its business.

(viii) We have been informed that the Central Government has not prescribed the maintenance of Cost Records under clause (d) of sub-section(I) of section 209 of the Act.

(ix) (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, certain undisputed statutory dues like Provident Fund, Sales Tax and Income Tax Deducted at Source have not been regularly deposited by the company with the appropriate authorities during the year. We have been informed that the provisions of the Employees State Insurance Act are not applicable to the company. Further the company is not required to remit any amount to Investor Education and Protection Fund.

(b) According to the information and explanations given to us and the records of the company examined by us, the particulars of dues of sales-tax, income tax, customs duty, wealth tax, excise duty and cess as at 31st March, 2004 which have not been deposited on account of a dispute, are as follows:

Nature of dues Amount due Forum where pending (Rs. in '000)

Sales Tax 65,60 Commissioner (Sales Tax), Jaipur

(x) The accumulated losses of the Company stand at Rs. 89,82,62 thousands as at 31st March, 2004 and such accumulated losses are more than fifty percent of its net worth. The Company has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

(xi) The company has defaulted in repayment of dues to bank and Govt. of India. The period and amount of default is as under:

Name of Bank / Financial Nature of payment Amount Institution (Rs. in '000) (Rs. in '000)

Syndicate Bank, Delhi Interest on Special Rupee Loan 4,82,90 Govt. of India GOI Loan 53,70,84 Govt. Bodies Interest accrued and due 4,60,00

(xii) The company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The company is not a chit fund or a nidhi or a mutual benefit society. Therefore, the provisions of sub para (xiii) of para 4 of the order are not applicable to the company.

(xiv) In our opinion, the company is not dealing or trading in shares, securities, debentures and other investments except investments in fixed deposits with the banks for which proper records have been maintained of the transactions and such fixed deposits have been held by the company, in its own name.

(xv) The company has not given any guarantee for loans taken by others from bank or financial institutions.

(xvi) The company has not obtained any term loan during the year.

(xvii) On the basis of an overall examination of the balance sheet of the Company, in our opinion and according to the information and explanations given to us, there are no funds raised on short-term basis which have been used for long-terms investment and vice versa.

(xviii) The company has not made any preferential allotment of shares during the year to parties and companies covered under section 301 of the Companies' Act, 1956.

(xix) The company has not issued any debentures during the year and therefore the question of creating security in respect thereof does not arise.

(xx) The company has not made any public issue of any securities during the year and therefore the question of disclosing the end-use of money raised by any public issue does not arise.

(xxi) 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, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the management.

For Jindal & Company

Chartered Accountants

Sd/-

(AKHIL JINDAL)

Partner

Place: New Delhi

Dated: 25.08.2004

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