Ansal Properties & Infrastructure Ltd Management Discussions.

GLOBAL AND INDIAN ECONOMY- OVERVIEW

Global growth is expected to show downward trend over the next two years after reaching 3.1 percent in both 2017 and 2018, as global trade and investment moderate and financing conditions tighten. There exist the possibility of disorderly financial market movements, escalating trade protectionism, heightened policy uncertainty and rising geopolitical tensions. Amid moderating international trade and tightening global financing conditions, growth in emerging market and developing economies (EMDEs) is projected to plateau, reaching 4.7 percent in 2019 and 2020, up from 4.5 percent in 2018.

India has emerged as the fastest growing major economy in the world as per the Central Statistics Organisation (CSO) and International Monetary Fund (IMF) and it is expected to be one of the top three economic powers of the world over the next 10-15 years, backed by its strong democracy and partnerships. Indias GDP is estimated to have increased 6.6 per cent in 2017-18 and is expected to grow 7.3 per cent in 2018-19.

GDP growth in India

As per the second advance estimates of national income released by the Central Statistics Office in February, 2018, real Gross Domestic Product (GDP) at constant prices is estimated to grow at 6.6% for Financial Year 2017-18. The Indian economy achieved an impressive growth rate of 7.2%, a five-quarter high during the third quarter (Oct-Dec) of Financial Year 2017-18 as opposed to 6.5% in the second quarter. India also regained its tag of the fastest growing major economy in the third quarter.

The robust growth registered in the third quarter of the Financial Year 2017-18 was primarily on account of the good performance of the manufacturing and construction sectors. The manufacturing sector has registered a growth rate of 8.1% as compared to 6.9% in the previous quarter while the construction sector has recorded a growth rate of 6.8% in contrast to 2.8% during the previous quarter.

This growth has been achieved in a milieu of lower inflation, improved current account balance and notable reduction in the fiscal deficit to GDP ratio makes it more creditable. In addition to the introduction of GST, the year also saw significant steps being undertaken towards resolution of problems associated with non-performing assets of the banks, further liberalization of FDI, etc., thus strengthening the momentum of reforms. After staying in negative territory for a couple of years, growth of exports rebounded into positive one during 2016-17 and strengthened further in 2017-18.

Real estate contribution to Indias Gross Domestic Product (GDP) is estimated to increase to about 13 per cent by 2028, on the back of increasing industrial activity, improving income level and urbanization.

INDIAS REAL ESTATE SECTOR

The Indian real estate sector has been a major beneficiary of the strong economic growth witnessed in India since the year 2000.

The real estate sector comprises of four sub sectors - housing, retail, hospitality and commercial. The growth of this Sector is well complemented by the growth of the corporate environment and the demand for office space as well as urban and semi-urban accommodations.

Real estate in India is being recognized to drive the economic growth engine of the Country. The Sector, if channelized properly, could catapult the growth of several other sectors in India through its backward and forward linkages.

The growth in the sector, supported by series of reforms, has not only resulted in significant residential and commercial real estate, but also complemented the development of physical and social infrastructure of India.

The entry of major private players in the education sector has created vast opportunities for the real estate sector. Emergence of nuclear families and growing urbanization has given rise to several townships that are developed to take care of the elderly. Growth in the number of tourists has resulted in demand for service apartments. This demand is likely to be on the uptrend and presents opportunities for the unorganized sector.

The real estate sector including construction is a pivotal cog of economic growth for India, as it contributes the third highest share to the Indian economy and is also the third largest employer (after agriculture and manufacturing). With forward and backward linkages to over 250 sectors and ancillary industries, the real estate sector is the third-highest contributor to the economy. It employed over 52 million work-force till 2017, and as per projections is slated to employ over 67 million workforce by 2022.

The Indian real estate market is expected to touch US$ 180 billion by 2020. The housing sector alone contributes 5-6 per cent to the Countrys Gross Domestic Product (GDP). In the Financial Years from 2008-2020, the market size of this Sector is expected to increase at a Compound Annual Growth Rate (CAGR) of 11.2 per cent. Retail, hospitality, and commercial real estate are also growing significantly, providing the much-needed infrastructure for Indias growing needs.

HOUSING

The housing industry of India is one of the fastest growing sectors. A large population base, rising income level and rapid urbanization leads to growth in this sector. As per Indian Constitution the matters about the housing and urban development have been assigned to the State Governments. However, the Union government is responsible for formulation and implementation of social housing schemes. It is also an important sector for the economy as it has inter-linkages with many other industries as stated earlier. The development of housing sector can have direct impact on employment generation, GDP growth and consumption pattern in the economy.

For the Indian residential sector, Financial Year 2017-18 was not a very good year due to pressures of increasing unsold inventory, delay in possession, high property prices, low demand, cautious buyer approach and a liquidity crunch. These have resulted in limited numbers of project launches in most of the cities despite of increase in the freebies being offered to sell the property, such as different innovative payment plans, discounts and gifts with bookings etc.

Housing has always been an important agenda for the Government of India over the years because it is a visible output where the development can be seen and a vital sector of the national economy creating jobs and generating taxes and wages that positively influence the quality of life. Presently, affordable housing is basically targeting the economically weaker class and low-income groups and constitutes majority of the Indian Housing Industry, both in terms of value and volume. Besides, luxury housing is also expected to witness significant growth in the coming years as this market segment is comparatively very small and possesses enormous potential for further developments.

Residential launches across top 14 cities in India during Financial Year 2017-18 fell to the lowest in past five years to about 58,000 units as per the National Real Estate Development Council (NAREDCO).

At present your Companys projects are under various stages of implementation across residential, commercial, retail and others. It focuses on mixed use development, particularly in residential projects, and, has a leading position in the housing segment, particularly in key cities in northern India. Your Company continues to follow the strategy of developing integrated townships in key cities in North India.

TOWNSHIP DEVELOPMENT

The positive perception of township generally happens when there is growing demand for luxury apartments along with attendant facilities comprising in formation of integrated townships. There has been shifting of necessities and standards of living of Indias residential property buyers who do not want just a modest home but a dream house.

Townships have become the most sought after even though they cost much higher than individual buildings. Complexes built in large area of lands with all facilities including schools, hospitals, shopping malls, gymnasium, club, health spa etc. provide the unique living experience that people demand these days.

With these changes in consumer preferences it is but apparent that the townships are the next big thing in the Indian real estate development industry. As land prices peak in key cities and basic infrastructures lag to balance with increasing populace, real estate property developers are building cities away from the city to help better quality lifestyles.

Your Company is fully into development of Townships and it along with its subsidiaries, joint venture partners/associates etc. is developing and promoting several fully Hi- Tech, integrated and other townships, notably "Sushant Golf City" in Lucknow, the "Sushant Aquapolis" in Ghaziabad, "Esencia" in Gurgaon, "Sushant Serene Residency" in Greater Noida etc.

OTHER SECTORS

Commercial

Your Companys commercial real estate business includes developing and constructing high rise office blocks and IT/ITES parks. Commercial space offerings are a mix of "built to suit" offices, customized facilities, and pure multi-tenanted facilities.

Retail

Your Companys retail business model includes both the leasing and sale of retail developments. It has developed many modern shopping malls and other retail spaces under the "Ansal Plaza" brand name such as Ansal Plaza in Palam Vihar, Greater Noida, Jalandhar, Ludhiana, Jodhpur, Ajmer, Gurgaon, Sonepat and also in the process of developing number of shopping malls in Panipat, Lucknow, Meerut and Ghaziabad. These retail spaces are characterized by better design, high quality infrastructure as well as have leisure and entertainment amenities such as multiplexes, food courts and restaurants etc.

Hospitality

Built on the foundations of its image in real estate; your Company through its subsidiaries/associates has forayed into the hospitality segment elevating luxury standards to high levels. Presently the group has operational clubs in Ajmer, Jaipur & Lucknow.

Facilities Management

Facilities Management (FM) is an interdisciplinary business function that coordinates space, infrastructure, people and organization. It is about managing people and places like commercial complexes, malls, hospitals, residential developments etc. to achieve best value for money by balancing between needs of the users and the business to achieve ideal satisfaction and effectiveness.

Your Company provides/facilitates adequate facilities management for properties developed by it.

INDIAN REAL ESTATE: OPPORTUNITIES AND CHALLENGES/ THREATS/STRATEGIES Opportunities

Over the next few quarters, there are expectations from both buyers and developers with new government policies. The ultimate aim would be to keep the industry organized and boost the housing segment. Also, there is the projection of receiving Private Equity (PE) investment of about US $4 billion during the fiscal year. The financial year 2017-18 was a roller-coaster for the Indian real estate sector, with too many things happening around. The effect of demonetization was still visible in year 2018. The Central government in the Union Budget 2017-18 introduced "Housing for All by 2022" which came with several benefits like availability of prime land parcels, access to funds and fast approval of incentivizing for the affordable housing projects. The government later introduced Real Estate (Regulation and Development) Act, 2016 {RERA} to bring complete transparency between buyers and sellers. This act has raised the interests of home buyers and confidence among the consumers. Mandatory registration, strong penalties and complete transparency are some of the features of RERA.

Furthermore, the introduction of GST in July 2017 aimed to dismantle multiple tax system. This has helped increase in the FDI and further growth of the industry.

Though, there are positive and negative things taking place in the real estate sector, it will face challenges and opportunities throughout the year.

• Major Focus on Selling and Delivery:

In the year 2018, developers will majorly focus on selling and completing the existing projects within the deadline. Hence, the year 2018 will witness major sales and delivery in the residential market. rErA has given opportunities to developers to stay transparent and complete the project by the mentioned deadline.

• Past year reforms to shape the future:

There have been many reforms set by the government, including RERA and GST which will affect the industry in 2018 too. For both, home buyers and real estate developers, these reforms will change the face of the industry. There are some big questions from home buyers regarding the project which is under-construction or readily available. With complete transparency, home buyers and developers can have an easy business.

• Clean Capital:

Due to lack of transparency in the sector, it was difficult to get clean capital from financial institutes. But times have changed since RERA and Demonetization have come to the effect there has been a complete change in the process of buying and selling of a home. Investors and financial institutes have opened up the avenue for clean capital. This certainly shows the positive picture in 2018.

• Pradhan Mantri Awas Yojana (PMAY) to shape up Housing for All:

The ambitious plan of Prime Ministers to build homes for all by 2022 will certainly bring a major change in economic with $1.3 trillion. This will create 60 million new houses and 2 million jobs over the next 4-5 years. Every project is now getting registered under PMAY scheme; the urban realty sector will see a major boost in 2018. Affordable housing could emerge as the defining trend in 2018. Also, it shall boost the growth of industries auxiliary to real estate, viz. cement, sanitary ware, paints, etc.

With increasing FDI, government schemes and transparency, the real estate sector in India is set to change dramatically. Though there are challenges and opportunities for developers and home buyers, according to which they need to plan out for easy flow and have a positive long-term effect.

Government Initiatives

The Governments intention is to spur the real estate sector and it has taken commendable but measured steps. To accord the housing sector, industry status, has been a long-standing demand. Though only the affordable housing has been given this much-coveted and all-important status, it is definitely a shot in the arm for the sector. Suddenly, the Governments objective of providing Housing for All by 2022 looks very much achievable.

• The reduction of the corporate tax to 25% for MSMEs (Micro, Small and Medium Enterprises) earning up to 250 crores is a positive sign for several businesses in their nascent stage. This means more attraction for upcoming startups which further indicates more investment in corporate reality.

• Government is doing its best to boost the source of affordable housing through various tax incentives and other reforms. Union Cabinet has decided to increase the carpet area of the unit like 120 sq.m and 150 sq.m for MIG-I (income category of 6-12 lakhs), MIG-II (category of 12-18 lakhs pa). This will also come with interest subsidy of 4%, further boosting buying and selling of a home.

• Tier 2 and 3 cities are soon going to be the next hotspots for property investments due to efficiently carrying on the proposal of developing the 4 lakhs KM road and rural infrastructure.

• In March, 2018, construction of 321,567 additional houses across 523 cities under the Pradhan Mantri Awas Yojana (Urban) has been approved by the Ministry of Housing and Urban Poverty Alleviation, Government of India with an allocation of Rs 18,203 crore.

• In February, 2018, The Union Cabinet Committee has approved setting up of National Urban Housing Fund (NUHF) for Rs 60,000 crore (US$ 9.3 billion) which will help in raising requisite funds in the next four years.

• The target of an Open Defecation Free (ODF) India will be achieved by October 2, 2019 as adequate funding is available to the Swachh Bharat Mission (Gramin).

• The Government of India has succeeded in providing road connectivity to 85 per cent of the 178,184 eligible rural habitations in the country under its Pradhan Mantri Gram Sadak Yojana (PMGSY) since its launch in 2014.

• The Government of India has decided to invest Rs 2.11 trillion (US$ 32.9 billion) to recapitalise public sector banks over the next two years and Rs. 07 trillion (US$ 109.31billion) for construction of new roads and highways over the next five years.

• The India-Japan Act East Forum, under which India and Japan will work on development projects in the NorthEast Region of India will be a milestone for bilateral relations between the two countries.

• The Government of India and the Government of Portugal have signed 11 bilateral agreements in areas of outer space, double taxation, and nano technology, among others, which will help in strengthening the economic ties between the two countries.

• Indias revenue receipts are estimated to touch Rs. 28-30 trillion (US$ 436- 467 billion) by 2019, owing to Government of Indias measures to strengthen infrastructure and reforms like demonetisation and Goods and Services Tax (GST).

• Housing schemes - Affordable housing to be given infrastructure status

• National Housing Bank will refinance individual housing loans of about Rs. 20,000 crore in 2017-18

CHALLENGES/THREATS

The real estate sector is a critical sector of the economy. It has a huge multiplier effect and therefore, is a big driver of economic growth. The key challenges that the Indian real estate industry is facing today are, inter alia, as follows:

• Regulatory Pressure:

In 2017, some regulatory rules by the government have impacted the industry, positively and negatively. So, in 2018 too, developers will face the impact of RERA, restricting to new construction and focusing more on completing the projects. As the supply of ready-to-move-in properties will increase, developers will face the challenge of completing the project on mentioned deadline.

• Single Window Clearance:

The major obstacle a real estate developer faces is the matter of obtaining various approvals and that usually takes 18 to 36 months. The delay happens when authorities take months to reply and respond. Single Window Clearance is the biggest challenge faced by the real estate developers. So, implementing this method will not only bring down the project delivery deadline delay but also the cost of the project implementation. By going online, it will boost the transparency and curb the scope of undue gratification.

• Getting limit on Home Loan Interest:

The home loan interest tax is the major issue faced by the home buyers. The government need to raise tax deduction limit for up to 05 lakhs from the present 02 lakh per annum. So, this will certainly give a huge relax to home buyers in saving money on the home loan.

• The GST Rate:

Since the establishment of GST, the real estate has been facing huge roadblock due to high GST rate. As home buying is a huge investment, the government should bring down the GST rate by 6% to encourage buyers to invest in new projects.

• Rising Input Cost:

Real estate is a capital and labour intensive industry, thus a rise in the cost of labour creates issues in the development of the project. Furthermore, unfair practice of certain sections of distributors and cement industry by raising the price creates issues in the project completion.

• Other Challenges are as follows:-

• Projects of the Company are subject to many approvals/licenses. Obtaining formal clearances and approvals from Government authorities is slow and time consuming and may cause delays/ interruption in project execution or even rework/ modifications as Single window clearance mechanism not in place.

• Projects in Real Estate business involve buying small parcels of contiguous lands within a large area and failure to purchase any contiguous/strategically located parcels may lead to delay of the launch of the proposed project. The land titles are not clear because of poor record keeping and division of land in many parts till independence. The slow pace of modernization of land records is further aggravating the problem. Delays in project launch and completion leads to cost and time overruns.

• The prices of land and real estate in India has increased exponentially during last decade and caused overpricing of commercial and residential properties. In recent times, the real estate has been the most favorable destination for investments in India and far ahead than equity or gold. Notably, real estate agents or brokers buy or sell property frequently with their own investments and cause of surging prices in properties which do not reflect genuine public demand.

• Finance is the key for development of any industry. Due to poor image of Real Estate sector, banks are becoming reluctant to give loans and making regulation tougher to avoid the bad loans. Alternate sources of finance are very costly and ultimately impact total cost of the project.

• Further government intervention of building minimum 20% affordable housing putting extra burden on developers and ultimately on the rest 80%.

• Indebtedness of Company and the covenants with institutional lenders and other contractual commitments imposed by the lenders could restrict for expansion which may hurt the business and results of operations and financial condition.

• The Company is reliant on its directors and senior management team and loss of key members or failure to attract skilled personnel may adversely affect the business.

• The Company may not be able to raise adequate funds at competitive rates to fuel its development plans. The growth of the Company needs further capital, which may not be available on terms acceptable to it.

• Weather-related catastrophes have a similar stifling effect on the real estate market to global crises.

• Real estate is the most famous sector for soaking the black money without any ambit.

THE ROAD AHEAD / POSITIVE APPROACH

Prospects

The prospects for Indian economy for the year 2018-19 need to be assessed in the light of emerging global and domestic developments. Indications are that global economic growth is gradually picking up.

Indias economy is projected to grow 7.6 per cent in fiscal year 2018-19, indicating that it is the fastest growing economy in the world, as robust private consumption and benefits from past reforms help the countrys GDP gain momentum but sustained recovery in private investment still is a crucial challenge.

The growth during 2018-19 could be higher, depending on several factors. On the positive side, as per IMFs World Economic Outlook released in October 2017, the global growth is expected to accelerate to 3.7 per cent in 2018 from 3.6 percent in 2017. This can be expected to provide further boost to Indias exports, which have already shown acceleration in the current financial year. There are signs of revival of investment activity in the economy and the recent pick up in the growth of fixed investment can be expected to keep momentum in the coming year.

The policy rates can be expected to remain fairly stable if the inflation rate does not deviate much from its current levels. This, along with the still favorable interest rate regime prevailing in the global markets could provide greater certainty to the investment climate. The reform measures undertaken in 2017-18 can be expected to strengthen further in 2018-19 and reinforce growth momentum.

On the other hand, downside risk to higher growth emanate from higher crude oil prices, which (going by current indications) can be expected to increase by about 10-15 per cent over and above the likely average price of around US$ 56-57 per barrel (for Indian basket) for 2017-18. Protectionist tendencies in some of the countries could have an impact on exports growth, while the possibility of tightening of monetary conditions in the developed countries could lead to lower capital inflows. This monetary tightening could also lead to the possibility of financial stress and therefore can be a downside risk. On balance, there is a strong possibility of growth in 2018-19 to be higher than what it is expected to be in 2017-18. Growth of GDP in 2018-19 could be in the range of 7.0 to 7.5 per cent.

India has enormous potential to attract large foreign investments into real estate. The growing flow of FDI into Indian real estate is encouraging increased transparency. Developers, to attract funding, have revamped their accounting and management systems to meet due diligence standards.

Strategies

The Companys strategy for long-term growth is based on continuing to scale, strengthen its core business and grow in new areas of business. The key elements of your Companys business strategy are as follows:

• The Company is focusing on high growth markets in NCR as well as in other states of Northern India by expanding

its existing townships to increase returns through economies of scale as well as entering into collaboration for new projects in order to conserve capital deployment in land aggregation and to achieve better realizations.

• Accelerating its cash flows by monetizing its assets from finished stock sales, to consider sale /exit from non-core

assets /slow moving investments if fetching better value and to reduce the debt.

• The Company is focusing on the Northern India Territory for township development and has accelerated the development and sales efforts in all the townships that were launched in the past few quarters.

• The Company is giving priority in completing and delivering the projects of good quality on time and building further saleable area(s) in these states by expanding the existing townships.

• The Company is improving its financial parameters through better performance and ensures prompt repayment of principal and interest amount, to attract more funds.

• The Company is reducing the interest cost burden by bringing in proper mixture of funding from Banks/ others.

In addition, your Company is constantly trying to look for more private equity participation and other funding sources to increase the execution process and further mitigate its risks.

PERFORMANCE

You are already aware that, your Company has significant presence in North Indian States i.e. Uttar Pradesh, Haryana, Rajasthan and Punjab.

Your Company along with its subsidiary/associate/joint venture companies have range of real estate business verticals such as Hi -Tech and Integrated Townships, Condominiums/ Group Housings, Malls/ Shopping Complex, Hotel, and Clubs.

The Company intends to take advantage of Indias increasing urbanization by investing in the development of townships on the peripheries of cities throughout northern India, and searching for opportunities to expand existing townships by purchasing and developing or by acquiring under joint development arrangements adjacent land on the existing infrastructure.

Some of the projects in the process of various stages of development are as follows:-

• Projects in the State of Uttar Pradesh

Housing/Townships

Sushant Golf City (Hi-Tech City)-Lucknow, Sushant Megapolis (Hi-Tech City) Dadri - Adjoining Greater Noida, Sushant Taj City - Agra , Sushant Aquapolis-Ghaziabad, Sushant City - Meerut , Sushant Serene Residency- ETA -II, Greater Noida.

Commercial

Shopping Square Sector D, Shopping Square Sector A -Lucknow, Ansal Shopping Arcade- Lucknow, Ansal Zenith Towers - Lucknow, Shopping Square 3A - Megapolis, Local Shopping Complex - Ghaziabad, Local Shopping Complex - Meerut.

Retail/ Industrial Park / Other

Ansal Plaza - Greater Noida, IT Park - Greater Noida (The Campus), Corporate Park - Sector 142, Noida.

• Projects in the State of Haryana

Housing/Townships

Esencia, Sector - 67, Gurgaon, Versalia, Sector - 67A, Gurgaon, The Fernhill- Gurgaon, Sushant City- Kundli, Sunshine County- Kundli, Havanna Heights- Kundli, Europa Residency- Kundli, Sushant City- Panipat, Sushant City- Kurukshetra, Sushant City- Yamuna Nagar, Green Escape- Sonepat.

Commercial

Spanish Court- Gurgaon, Palam Corporate Plaza- Gurgaon, Palam Triangle- Gurgaon, Galaxy Court- Panipat , Roman Court- Kundli, Sushant Shopping Arcade (Sushant Lok Gurgaon), Sushant Vyapar Kendra (Sushant Lok), Palam Vyapar Kendra -Palam Vihar Gurgaon.

Retail/ Industrial Park / Other

Ansal Highway Plaza- Sonepat, Ansal Plaza-Palam Vihar, Gurgaon, Pioneer Industrial Park - Pathredi, Ansal Plaza, Khelgaon.

• Projects in the State of Punjab

Housing/Townships

Golf Links-I, Golf Links-II, Orchard County, Mohali, Palm Grove , Bhatinda.

Commercial/Retail/ Industrial Park / Other

Ansal Plaza -Ludhiana, The Boulevard -Ludhiana, Ansal Plaza -Uptown Jalandhar, City Centre, Celebrity Suites(Studio Apartments Part of City Centre), Court Yard (Commercial Built Up Booths Part Of Golf Links -I).

• Projects in the State of Rajasthan

Housing/Townships

Sushant City -Ajmer, Sushant City-I Jaipur, Sushant City-II Jaipur, Anand Lok -Jaipur, Anand Lok Extn. Jaipur, Sushant City -Jodhpur, Sushant Lok -Jodhpur, Anand Lok -Jodhpur, Sushant City -Bikaner, Sushant City -Bhilwara.

Commercial

Sushant City - I Jaipur , Sushant Plaza (Orchid & Tulip), Sushant City Ajmer, Ansal Courtyard, Sushant Haat, Sushant Plaza, Sushant City Jodhpur, Sushant Haat;

Retail/ Industrial Park / Other

Ansal Royal Plaza, Jodhpur

PROSPECTS & OUTLOOK

Over the years the Companys long -term strategy continues to focus on smaller cities or better known as Tier 2 cities. This strategy has proved to be beneficial considering both i.e. its performance and priority in overall development. As already said, the Company is developing many Hi- Tech and Integrated Townships.

Customer satisfaction being the most emphatic priority of your Company, all efforts are continued to be made to use the best of construction, architecture and allied inputs, both from highly reputed national and international Companies to provide quality products to customers at all the times. Sensing the need for the focus on quality and timely delivery, the Company has tied up with highly reputed construction contractors and other expert service providers.

Your Company is always looking forward to new opportunities. It continues to emphasize and build upon its well acknowledged brand image of "Ansal Plaza" and "Sushant City". It has successfully launched various Townships and commercial Projects under the Brand Name of "Sushant City" and "Ansal Plaza", respectively.

The said Projects and the following Townships are expected to yield high visibility, status and effectiveness to your Company:-

• SUSHANT GOLF CITY - one of Asias largest Hi-Tech Townships- Lucknow

The development of your Companys premiere Hi-Tech Residential Township, Sushant Golf City in Lucknow, Uttar Pradesh sprawling across 6465 acres of land is in full swing. It is well known that this ultra- modern township offers wide range of residential/commercial properties with world class facilities. Located along the Amar Shaheed Path on one side & NH-56, Lucknow-Varanasi Highway on the other, located within a very short drive from Lucknow International Airport; Sushant Golf City has already become a preferred destination to live in Lucknow. It has eco-friendly environment with various other world class amenities and gives rise to opportunities for employment, trade and commerce. It has about 400 acres of land dedicated only to greenery with a world class 18 hole Golf Course designed by Dr. Martin Hawtree, U.K and hence this mega Township makes life on the greens a reality. This golf course is now a preferred destination for PGA Tours. The Golf Habitat villas are state-of-the-art designer villas and have features which not only match with the international class but also redefine luxury in the true sense of the word. Overall, its a perfect abode for modern living full of amenities.

Notably, possession has been offered for more than 3500 units in various categories of plots, built-ups and group housings and more than 1200 families have started residing in the township.

Your Company through its group/associates has already launched its established brand "The Palms Golf Club & Resorts" at Lucknow. Some reputed institutions and business centers have also started operating, for example, Ansal Institute of Technology and Management, G D Goenka Public School, S J International School, Jaipuria School, and Kunskapkollon School-A Swedish School in the Township. The retail giant, Walmart, bulk market place is also operational in the township.

"Medanta, The Medicity" has started construction of its 800-900 bedded, multi-super specialty hospital in your Companys Complex which itself will not only upgrade the stature of Sushant Golf City but will provide quality health care to the other residents of Lucknow city.

Iskcons Spiritual Centre at your Companys complex at Lucknow has become a famous spot that attracts devotees from far flung areas.

Sushant Golf City has been acknowledged by the people in Lucknow and in the State of Uttar Pradesh as "New Lucknow" as it gives quality housing, employment and opportunities to make profitable investments in the Real Estate sector.

Helipad services have been introduced to the township in the year 2016.

I.T hub in the close vicinity of Sushant Golf City, Lucknow, is being developed as Joint Venture between U.P Govt. and HCL, Indias fourth largest Information Technology services company, which is spread over 1600 acres which is integrated with Sushant Golf City. An Oncology Hospital has already started its OPD. The well- known brand "Amul" has a factory which has begun production.

Out of nine ambitious projects initiated under the Hi-Tech Township policy within the State of Uttar Pradesh, your Company is the unquestioned leader and today the Companys Sushant Golf City at Lucknow is known as one of the best and largest township being developed by any real estate company.

• ESENCIA - Green Township of Tomorrow in GURGAON

Your Company is to achieve one more "first" with the ESENCIA a Township Project. The aim is to build and sustain a "self-reliant community". Every aspect of the Township is designed to conserve natural resources and has minimal adverse impact on the environment. The emphasis is on protection, use and recycling of natural resources.

ESENCIA offers well-designed homes with the best amenities. Strategically located at Sector 67/67A, Golf Course Extension Road, Gurgaon, ESENCIA is spread over an area of approx. 142 acres. The Township has been registered as the pilot project for rating under GRIHA* (Green Rating for Integrated Habitat Assessment), in India. ADARSH (Association for Development and Research of Sustainable Habitats), an independent, registered society, constituted by the MNRE (Ministry of New and Renewable Energy) and TERI (The Energy & Resources Institute), is helping your Company in this endeavor.

ESENCIA has been conceived and designed to create a balance between modern and environmentally conscious living. This Township will offer many leisure and recreational activities like medical center, high school, primary and secondary schools, clubs, sports complex and convenience stores. The Township is fast approaching completion. It has eight fully developed parks with automatic sprinkler system, jogging tracks and landscaped surroundings. Flora in these parks will not only give a visual treat but will have indigenous species which will balance the eco-system.

• Green Escape

Green Escape is being developed by your Company on an area admeasuring 30 acres and strategically located at 8-lane Kundli-Manesar-Palwal expressway at Sonepat (Haryana). It is being created with a vision of an awe-inspiring city-within city that will delight residents with its cosmopolitan, free-spirited atmosphere and unique, invigorating lifestyle. It offers an opportunity to escape from the humdrum and fierce harshness of the urban concrete jungle into the soft, flowing natural lushness of nature. This Project has world class facilities. It is in close vicinity of Indias largest Educational City- Rajeev Gandhi Education City.

• Golf Link I and II - Integrated Townships in Mohali

Your Company is developing two integrated townships in Mohali, {Punjab}. First Township is Golf Links I, spread in 240 acres and situated in Sector 114, Mohali, where- in the Company has handed over possession of plots, independent floors, and commercial. Army Welfare Housing Organization which had purchased FSI from your Company is building Group Housing consisting of 1000 high rise units which are expected to be handed over shortly.

The second Township is Golf Links II, spread over 106 acres and situated in Sector 116 where the development work is complete, and the Company is in the process of handing over possession of residential plots, and, it also expects to hand over possession of independent floors in due course. In the coming months, your Company proposes to launch Premium Group Housing project at the entrance to Golf Links I; this Project will be crowning jewel of the Sector and will make the area a destination point.

• Orchard County

TThis Project is being developed on an area admeasuring 11.87 acres and strategically located on the main city road (Kharar-Landran Road), Mohali. The Project is being made to luxurious specifications. It offers well designed homes with best amenities.

There are two sections of this Project; One is known as "Palm Grove",:- there are Ground + {Plus} 03 floors, and all 128 floors are offered for possession.

Another section is known as "Orchard County" flats:- which has 12 towers, wherein 10 towers have been offered for possession, 01 is ready for possession and in 02 the Company has started the construction. All in all, in these flats it has already offered possession to 315 flats and in the process of handing over possession of further 36 apartments. Rest of 104 flats is under construction.

In total, in sector 115, your Company has already offered for possession of over 443 apartments.

• Other Integrated Townships and Education

Your Companys other integrated townships are Sushant City, Ajmer, Sushant City, Jaipur, Sushant City, Jodhpur, Sushant City, Agra, Sushant City, Meerut and others. The facilities in these townships include health centres, shopping complexes, schools, parks, community centres, and underground parking systems.

Your Companys strategy is to focus on high growth markets in NCR as well as in other states of Northern India by expanding its existing townships to increase returns through economies of scale as well as entering into collaboration for new projects to conserve capital deployment in land aggregation and to achieve better realizations.

In the last few years, the education sector of India has seen a number of dramatic changes which resulted in substantial increase in the market share of the education sector. With availability of enhanced technology, it is extremely essential to expand the Indian education sector in order to contribute to the economic growth of the Country. Education is also designed to be an important driver for the future, and, your Company, through its associates/ Trust, has ushered in the field of education and has built eminent Institutes like Sushant School of Architecture and Sushant School of Design. The Institutes run under the Ansal brand name and have in recent times acquired the status of a University called "Ansal University" under the Haryana Private Universities Act, 2006. All these have also footprints in the Corporate Social Responsibility of your Company.

In line with its motto of improving the lifestyle standards of people and the quality of life through creating state-of-the - art realty and infrastructure facilities and projects, your Company is committed to take on increasingly challenging tasks in its area of operations with intensified focus and dedication, in the coming years.

OUTLOOK ON RISKS & CONCERNS

Your Company is aware that the first step in earning rewards in business is to mitigate the risk involved in business decisions. Throughout its long existence your Company has managed its business risks effectively. The management of risk and opportunities is the inherent responsibility of your Company. Many of the risks include uncertainties or emerging risks, which are difficult to quantify or control. Nonetheless, it is important that these are identified so that the Company can have options to deal with them.

Enterprise Risk Management Framework has been successfully implemented within the Organization of your Company with an overall goal to measure the progress in risk mitigation through quantifiable means. The process is constantly reviewed for improvement.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

IInternal controls and systems serve multiple needs in any organisation. Well- designed Internal control systems lay down the framework for day-to-day operations, and provide guidelines for employees and, most importantly, provide a certain level of security against a variety of risks such as fraud and misappropriation.

The primary responsibility for the development and maintenance of internal control rests with an organizations management. Internal control evaluation involves everything management does to control the organization in the effort to achieve its objectives.

Your Companys control system and procedures are regularly reviewed for relevance and effectiveness and changed as per the need of business environment.

The Company has an efficacious Audit Committee consisting of Independent Directors, the details of which have been given in the Corporate Governance Report. Independent Chartered Accountant firm has been appointed as Internal Auditors and effectiveness of internal control mechanism is reviewed by Internal Auditors at regular intervals. The Audit Committee reviews audit reports submitted by the Internal Auditors on a regular basis.

Suggestions for improvement are considered by the Audit Committee and its decisions are followed by the Management through implementation of the corrective actions and improvements in business processes. The Committee also meets, from time to time, the Companys Statutory Auditors to ascertain, inter-alia, their views on the adequacy of internal control systems in the Company and also keeps the Board of Directors informed of its major observations on a regular basis.

During the year under review, 6 {Six}meetings of the Audit Committee were held to review, inter-alia, the internal audit reports along with management comments and the follow up actions taken thereon.

Operating Results of the Company

Overview

The Financial Statements have been prepared in compliance with the requirements of the Companies Act, 2013, guidelines issued by Securities and Exchange Board of India (SEBI) and Generally Accepted Accounting Principles (GAAP) in India. The estimates and judgments relating to the financial statements have been made on a prudent and reasonable basis, so that the financial statements reflect in a true and fair manner the form and substance of transactions and reasonably present your Companys state of affairs, profits and cash flows for the year.

Net loss

Net loss for the Financial Year 2017-18, on standalone basis is Rs (3831.31) lakhs as against profit of Rs. 929.38 lakhs

in the previous Financial Year 2016-17. This represents (6.74 %) and 1.36 % of the total income for the Financial Year 2017-18 and 2016-17, respectively.

Earning Per Share (EPS)

Basic Earning Per Share {EPS}, on a Standalone basis, of your Company has decreased by Rs. 3.02 during the Financial Year 2017-18 to Rs. (2.45) per share from Rs. 0.57 per share in the previous Financial Year 2016-17. The outstanding shares used in computing the basic EPS is 15,74,04,876 for the year ended on the 31st March, 2018

Financial Performance {Standalone} (1st April, 2017 to 31st March, 2018)

Share Capital:

At present, there is only one class of Equity shares of Rs. 5/- each. The Authorised Share Capital of the Company is Rs. 15000 lakhs divided in to 2400 lakhs Equity shares of Rs. 5/- each and 30 lakhs Preference shares of Rs. 100/- each.

The Issued, Subscribed and Paid up Equity share Capital of your Company, as on the 31st March, 2018 stood at Rs. 7870.24 lakhs (i.e. 15,74,04,876 Equity shares of Rs. 5/- each, fully paid up).

Reserve & Surplus (R&S):

The total balance of R&S stood at Rs. 157,974.86 lakhs as on the 31st March, 2018 as compared to Rs. 161,806.16 lakhs as on the 31st March, 2017.

Loans:

During the Financial Year 2017-18, the Company has put its efforts not to increase the debt to meet the fund requirements for its expansion plans. Therefore, the loan has been decreased by Rs.7923 lakhs i.e. from Rs.75,917 lakhs in the previous Financial year 2016-17, to Rs.67994 lakhs in 2017-18.

Current Assets:

Inventories:

During the Financial Year 2017-18, Inventory level has decreased by Rs.16719.42 lakhs i.e. from Rs.2,32,756.15 lakhs in 2016-17 to Rs.2,16,036.73 lakhs in 2017-18.

Sundry Debtors:

Sundry Debtors stood at Rs. 51,402.53 lakhs as on the 31st March, 2018 as compared to Rs.58,873.71 lakhs as on the 31st March, 2017. Accordingly, there is decrease of Rs.7471.18 lakhs. These debts are considered good and realizable.

Loans & Advances :

During the Financial year 2017-18, the loans and advances have been increased by Rs. 1085.30 lakhs i.e. from Rs.1,75,755.16 lakhs in 2016-17 to Rs.1,76,840.46 lakhs as on the 31st March, 2018.

Current Liabilities & Trade Payable:

Current Liabilities for the Financial Year 2017-18 stood at Rs.3,25,054.45 lakhs as compared to Rs.3,31,566.40 lakhs in the previous Financial year 2016-17.

Net Current Assets:

During the Financial Year 2017-18, the net current assets of the Company have been decreased by Rs. 20815.30 lakhs i.e. from Rs. 96,861.15 lakhs to Rs.76,045.85 lakhs as on the 31st March, 2018.

Finance Cost:

Interest amount paid by the Companys finance has been increased from Rs. 14654.29 lakhs in the year ended 31st March, 2017 to Rs.15,110.12 lakhs as on the 31st March, 2018.

Staff Expenses:

During the Financial year 2017-18, the staff cost of the Company stood at Rs.2287.72 lakhs in 31st March 2018 as compared to Rs 2703.35 lakhs in the previous Financial year 2016-17.

Depreciation:

The Company has provided an amount of Rs.331.97 lakhs for depreciation for Financial Year 2017-18 as compared to Rs.386.56 lakhs in the previous Financial Year 2016-17.

HUMAN RESOURCES

Human Resources is just what it says: "Resources of humans" (in workplace). Its main objective is to meet the organizational needs of the company it represents and the needs of the people hired by the company. In short, it is the hub of the organization serving as a liaison between all concerned. As the cultural up keeper of the Organization it manages the following roles:-

• The process of recruiting and keeping suitable candidates for the organization.

• Identifying and meeting the training needs of existing staff.

• Ensuring employee welfare and employee relations are positive.

• Ensure the working environment is safe for employees.

• Raising awareness of current workplace legislation.

During the Financial year 2017-18, your Company has focused on consolidation, improvement and reorganisation to meet the existing challenges. While there was an emphasis on the cost side, talent acquisition initiatives were also carried out to fill up specific positions arising out of the business orientation. Initiatives undertaken earlier to improve the human resources effectiveness, continued.

Human Resource function is successful since cordial relations are continued to be maintained in respect of the internal as well as external environment for smooth running of the Organization, and, it is also playing on a sustainable basis a significant role in achieving sustainable competitive advantage and excellence in value creation through engaging and involving the organizational workforce.

The strength at present stands at about 424 employees on the rolls of the Company and about 689 at group level. They are working in a harmonious and affable atmosphere.

* Cautionary Statement

Statements in this Report on Managements Discussion and Analysis describing the Companys objectives, projections, estimates and expectations may be termed as forward -looking statements within the meaning of applicable laws and regulations. Actual results /outcome may differ substantially or materially from those expressed or implied. Important developments that could affect your Companys operations include, apart from any force majeure situation, significant changes in political and economic environment in India or tax laws, litigation, labour relations, interest and other costs.

Regd. Office: For and on behalf of the Board
115, Ansal Bhawan
16, Kasturba Gandhi Marg,
New Delhi-110001
CIN L45101DL1967PLC004759 Sd/-

(Sushil Ansal)

Chairman & Whole Time Director

DIN: 00002007

Vishranti 26, Feroz Shah Road, New Delhi - 110 001

Date: 13th August, 2018

Place : New Delhi