Ansal Properties & Infrastructure Ltd Auditors Report.

To the Members of Ansal Properties & Infrastructure Limited Report on the Standalone Ind AS Financial Statements

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

Managements Responsibility for the Financial Statements

The Companys 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 that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act read with relevant Rules issued thereunder.

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

Auditors Responsibility

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

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

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

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone 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 Companys 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 Companys Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.

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

Opinion

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

Emphasis of Matter

We draw attention to:

(i) Note No. 41 to the standalone Ind AS financial statements wherein the Company had claimed a cumulative exemption of Rs. 3,448 lakhs up to the period ended March 31,2011, continuing up to the end of current period, under section 80 IA of the Income Tax Act, 1961 being tax profits arising out of sale of Industrial Park units, pending the notification of the same

by Central Board of Direct Taxes (Competent Authority). The Competent Authority rejected the initial application against which the Company has filed review petition. The Company has taken opinion from a senior counsel that its review petition satisfies all the conditions specified in the said Scheme of Industrial Park under Industrial Park (Amendment) Scheme, 2010. No exemption is claimed during the current year as there are no sales of industrial park units.

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

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

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

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

Report on Other Legal and Regulatory Requirements

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

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

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

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

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

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

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

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

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

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

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

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

For S. S. KOTHARI MEHTA & Co.
Chartered Accountants
FRN - 000756N
Sunil Wahal
Date : May 30, 2018 Partner
Place: New Delhi Membership No. 087294

Annexure A to the Independent Auditors Report to the Members of Ansal Properties & Infrastructure Limited dated

May 30, 2018 on its Standalone Ind AS Financial Statements.

Report on the matters specified in paragraph 3 of the Companies (Auditors Report) Order, 2016 ("the Order) issued

by the Central Government of India in terms of section 143(11) of the Companies Act, 2013 ("the Act") as referred to

in paragraph 1 of ‘Report on Other Legal and Regulatory Requirements section.

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

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

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

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

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

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

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

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

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

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

S.

No.

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

Year

Forum where pending
1 Sales Tax Act Delhi Sales Tax 4.47 1999-2000 Assessing Authority Special Zone, Delhi
2 Sales Tax Act UP Sales Tax 0.29 2006-2007 Additional Commissioner (Appeal), Ghaziabad
3 Sales Tax Act UP Sales Tax 1.08 2008-2009 Commercial Tax Tribunal Ghaziabad
4 Local Area Development Tax Act Local Area Development Tax 8.73 2003-2004 Joint Excise & Taxation Commissioner (Appeal), Gurgaon
5 UP Trade Tax Act UP Sales Tax 0.06 2007-2008 Additional Commissioner (Appeal), Ghaziabad
6 UP Trade Tax Act UP Sales Tax 8 2011-2012 Commercial Tax Tribunal Ghaziabad
7 UP Trade Tax Act Work Contract Tax 61.64 2009-2010 Commercial Tax Tribunal Ghaziabad
8 UP Trade Tax Act UP Sales Tax 14.45 2011-2012 Additional Commissioner of Commer cial Tax (Appeal)
9 Income Tax Act, 1961 Income Tax 2858.89 2010-2011 Commissioner of Income Tax, New Delhi
10 Income Tax Act, 1961 Income Tax 675.68 2011-2012 Deputy Commissioner of Income Tax
11 Income Tax Act, 1961 Income Tax 313.03 2012-2013 ITAT, New Delhi
12 Income Tax Act, 1961 Income Tax 594.35 2013-2014 ITAT, New Delhi
13 Income Tax Act, 1961 Income Tax 1,240.00 1988-1989 to 2014-2015 Supreme Court
14 Income Tax Act, 1961 Income Tax 1,070.94 2014-2015 ITAT, New Delhi
15 Wealth Tax Act, 1957 Wealth Tax 0.45 1992-1993 Asstt. Commissioner of Wealth Tax, New Delhi
16 Wealth Tax Act, 1957 Wealth Tax 0.50 1997-1998 Deputy Commissioner of Wealth Tax, New Delhi
17 Wealth Tax Act, 1957 Wealth Tax 0.96 2000-2001 Deputy Commissioner of Wealth Tax, New Delhi

viii. On the basis of the audit procedures performed by us, the information & explanations furnished and representations made by the management, the Company has delays in repayment of dues including interest to banks and financial institutions. The defaults which have remained outstanding at the year-end are given in the table below. There are no outstanding debentures or Government loans at year end.

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

Particulars

Period of Delay

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

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

1 - 31 Days 32 - 60 Days

61 - 89 Days

90-182 Days

Above 183 Days Total
Inter Company Deposits
Dalmia Group Holdings - -

-

-

140.00 140.00
Charismatic Infratech Pvt. Ltd. 346.26 -

-

-

- 346.26
Sainik Finance & Industries Ltd. - -

-

-

300.00 300.00
Against Principal
Dalmia Group Holdings 2.25 2.03

2.25

6.67

52.97 66.17
C. R. Foods India Pvt. Ltd. 0.50 0.45

0.50

1.47

- 2.92
Charismatic Infratech Pvt. Ltd. 51.84 96.76 44.33

-

-

192.93
Sainik Finance & Industries Ltd. 3.90 3.52 3.90

11.57

37.43

60.32

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

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

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

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

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

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

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

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

For S. S. KOTHARI MEHTA & Co
Chartered Accountants
FRN - 000756N
Sunil Wahal
Partner
Date : May 30, 2018 Membership No. 087294
Place: New Delhi

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

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

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

Managements Responsibility for Internal Financial Controls

The Companys 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 companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditors Responsibility

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

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

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

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

Meaning of Internal Financial Controls over Financial Reporting

A companys 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 companys internal financial control over financial reporting includes those policies and procedures that:

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

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

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

Inherent Limitations of Internal Financial Controls over Financial Reporting

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

Opinion

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

For S.S.KOTHARI MEHTA & Co.

Chartered Accountants

Firms Registration No. 000756N

SUNIL WAHAL

Partner

Membership No. 087294

Place: New Delhi

Date: May 30, 2018