Ansal Buildwell Ltd Management Discussions.

We have pleasure in submitting hereunder the Management Discussion & Analysis Report on business of the Company. We have attempted to include discussions on the matters to the extent relevant.

OVERVIEW - INDIAN ECONOMY, REAL ESTATE AND IMPACT OF COVID-19

As per provisional National Income estimates released by the National Statistical Office. Indias Gross Domestic Product (GDP) contracted 7.3% in 2020-21. The Economic Survey 2020-21 elucidates how India has resolutely battled the unprecedented crisis triggered by COVID-19 pandemic.

The Governments endeavours to accelerate vaccination brings optimism for the future. This, undoubtedly, is most critical to restore normalcy and all efforts must be made to increase the pace. The crisis, however, is far from over. The distress caused by the pandemic continues to be of concern for lives and livelihoods as well as for economic growth. Despite near-term uncertainties, the Indian economy holds immense promise. The visionary Budget, which announced path-breaking reforms, enhanced capital expenditure and heightened spends on agriculture, will over a time foster competitiveness and spur economic activity. Our deepest gratitude to all the doctors and healthcare professionals across the country for the extraordinary fortitude displayed in serving humanity. It has also been immensely reassuring to see society rise as one to lend its shoulders to the endeavours made by the Central and State Governments, to address the colossal challenge.

The economic impact of COVID-19 is very disturbing. No one has been spared of its ill effects. Economies of most of countries have been destroyed out of which some of them have asked for monetary help form IMF. Business across the world namely, Real Estate, Hospitality, Entertainment, Aviation etc. have seen a major negative impact.

A global recession now seems inevitable. But how deep and long the downturn will be depends on the success of measures taken to prevent the spread of COVID-19, the effects of government policies to alleviate liquidity problems in SMEs and to support families under financial distress

Hiring labour for the realty and construction industries is also challenging. Partial lockdown due to the COVID-19 pandemic has created an unprecedented predicament. Since millions of workers have migrated to their hometowns due to lack of work, employers are dreading a nightmare scenario. Even when the lockdown is lifted, kick-starting operations will be extremely difficult for almost all sectors. In such uncertain conditions, the only way developers and contractors could recruit workers is by offering extra wages or incentives, including extra safe working conditions also with work suspended, inventories are rising and as profitability is dropping every month.

Presently, homebuyers are reluctant to book in under-construction projects and preferring ready-to-move-in flats, since it minimises risks.

No easy answers exist as COVID-19 is a constantly-evolving crisis. Even if the Corona Pandemic is fully controlled, migrant workers could remain reluctant to return because of the uncertainties involved, especially since the corona virus threat still looms large over the country. In some instances, migrant workers may still be stuck in cities if they are unable to manage transport back home or are not allowed to move out of their current workplaces. Again, developers may not be able to capitalize on the presence of such ‘captive workers.

PERFORMANCE

The year 2020-21 shall always be remembered as the year of the Pandemic. It has been a tough time for the entire world, where each and almost every country has been affected by the Covid Pandemic. Now on the Covid-19 graph has started to see a decline in recent months, there is hope that normalcy would return soon. People of India have stood strong and optimistic in there difficult conditions. The peak in the second wave has flattened and we can surely hope for the sun to shine real soon in all aspects of our lives.

With lockdowns and drastic changes in the working environment, most people in urban cities have been working from home itself. Seeing this new working trend, the housing demand is reviving and infrastructure development is set to pick up. Real estate prices are seeing an upswing due to the anticipated rise in the cost of raw materials, particularly steel and cement. Demand in residential sector has already started gaining strength.

Reforms introduced by the Government including implementation of RERA and move to build more Smart Cities across the country have already pushed real estate sector towards more transparency. Affordable housing is also the chosen preference for the end users who were earlier not coming forward due to the stagnation in Real Estate market. Property values are seeing an appreciation and the trend is likely to continue over the years to come. Also on the buyers part, the consumer affordability is at a high point due to steady income, lowest ever interest rates & low registry cost with benefits in many states. Adding on to the favors on the buyers side, the real estate industry hasnt actually seen a price increase in over 5-6 years, making it the best time to buy. Considering all scenarios and facts we can easily say that it is the perfect time to join in as an investor or as an end user in real estate market. Every month of delay could lead to depreciation in investment value as the property value will keep on increasing.

As is evident from the market trends Real Estate is poised to benefit from the ongoing government policies which are towards more transparency and speedy completion of the projects including infrastructure projects at various locations.

Reforms like RERA and GST are definitely helping to enhance transparency and faith in real estate market, which had taken a dent during past couple of years. We have to remain positive and try to collectively contribute for stabilizing the Industry which has lately taken a hit due to the crisis created by the Pandemic.

We had limited new Project launches this year as projects at on advance stage of construction and nearing completion were given priority for completion. In the commercial complex in ‘F Block, Sushant Lok-II - Gurugram, "Florence Triangle" (Construction of RCC retaining wall of ramp area was completed from entry to exit point.) Construction of Premium Floors which are high-end four Bed Room independent floors, which were launched in "F" Block, Sushant Lok-II are also going on but at the desired pace due to covid pandemic, Lockdown and shortage of labour has hampered the pace of construction activities.

Commercial complex-"Boom Plaza" Situated in Sushant Lok-III, Sector-57 is established as a nice commercial outlet in the area which is having running business outlets of well known brands now. It has consistently gained popularity and it is expected to do well in near future, being very near to new developing sectors of south Gurgaon. Residents are satisfied with the products available in the commercial complex and many shop owners are happy to get good returns of their Investments and some of them have already started their own business now.

Our prestigious hospitality Venture "Club Florence" which is situated in Sushant Lok-II, Sector - 56 is doing well and the confidence of the old members has been regained with improvement in services and overall activities planned in the calendar year. Booking by members is on the increase and banqueting activities have also considerably increased despite earlier hiccups due to lockdown. Efforts to increase Club membership and participation from corporate houses are being constantly done. Indoor sports facilities are gaining popularity with our new members, who are regularly participating in these activities. Members keenly await and want to be part of the scheduled events in the club. Operations of areas including Guest rooms, Banquet Hall, Cards room, Billiards room, Table tennis room etc are being taken care by our Hospitality team. Members are actively participating in the health Club initiatives and activities proposed and held in our Health Club building, where we have tied up with new Gym Partners who have professional trainers.

Group housing residential project in Ansal City, Kochi by the name of "Florence Heights" has been completed and possession given to many (Specify exact nos.) clients who are happily living in the serene atmosphere of Ansal city complex. This Eleven storey Group Housing residential complex has a total built-up area of approx. 1,00,000 sqft and it has come-up very well with water front on two sides. Resident Welfare Association / (RWA) has also been formed which are actively taking part in managing the affairs of the group housing complex. Development works in area beyond Thodu (river let) in the main Township Project has also been initiated where we are proposing to construct towers for the mid segment of the society. Plans for one Tower have been approved and clearances from Local Level Monitoring Committee (LLMC), which was related to change in revenue records in Data Bank register have also been accomplished. Construction work in second phase of "City Homes" Project, which are smaller flats of approx. 1,000 sft area had got delayed due to lockdown and slump in the market has again started and remaining finishing works for some flats will be completed soon. Construction is also going ahead on the plots where many Clients had started constructing their own Villas & Houses. Sale of balance unsold plots is also expected to pick-up now as certain restrictions due to some regulations with respect to building plans & change in data bank have been taken-up and cleared with the concerned authorities. Measures for procurement of balance land pockets within the Ansal City are also on top priority and we have initiated negotiations with the concerned parties in this regard. Plans for developing a club building at the entrance of Ansal city has also been freezed and drawings approved in this regard. Structural drawings are under preparation and construction may start any time now for which the funds are also being arranged. Augmenting the existing Club facilities at "Ansal Riverdale" is under consideration with the Resident Welfare Association which can help in increasing the activities and overall membership & foot fall in our Riverdale Club.

Development works in Project titled "Ansal City- Amritsar", Punjab, which is spread over an area of about 65 acres has been completed. Civil works of STP (Phase-I) and construction of U/G water tank has also been completed. 10 nos. of Units have been handed over to clients. Offer of Possession for four hundred seventy three (473) plots have been sent to customers. Street poles and Installation of HT/LT equipment has also been completed. Development of Park No 3 and cricket ground completed while development work for park No 5 & 6 is under progress. Development works for making Hockey field operational are also in Progress. Individual plot owners have also started constructing houses on their respective plots. Part completion certificate has been received from Competent Authority (ADA).

For residential project namely "Florence Estate" in Amritsar, the construction of Site office and Sample flat has been completed. Demarcation and Zoning has also been approved. This project is spread over an area of 16.12 Acres (Approx.) of land and development works are expected to commence now. Revised plans to convert this Group Housing into Plotted have been submitted to the authorities.

In "Florence City" Project Pathankot, Construction of two Sample villas has been completed. Construction of bridge had commenced last year got delayed due to pandemic and continued lockdown. Construction work has again started now and work is in progress. External public health services like sewerage and drainage work have also started while work for electrification, road and horticulture work is in progress. Construction of villas is in full swing. Zoning plan has been approved by the competent authority. .

In the joint venture residential township Project in Jaipur name "Florence Town" spread over One hundred fifty two (152) Acres of land situated on Phagi Road in collaboration with M/s. JKD Pearl Developers, patta Camps by JDA have been organized for "A", "B", "C", "E" & "F" Blocks. Electrical scheme in all blocks have been completed. Roads have been laid, carpeting work in blocks "A" "B" "C" & "E" is completed. Kerb stone work is in progress in A & E block. Demarcation of road in Block F has been completed. Main Park has been developed and Horticulture works in other areas is in progress.

"Ansal Basera City", Jhansi, UP is a Township project spread over an area of Approximately 80.65 acres of land for which development works are going in full swing. The sample villa with interiors is nearly completion. The revised estimate for External Electrification scheme and Electric load has been submitted to UPPCL. EIA approval of environmental clearance has been obtained on 16/07/2020. UPRERA registration had been extended upto 31.03.2021 which will be further extended. Project "Ansal Basera City" has been registered in UP - RERA.

"Ansal Basera Estate", Jhansi, UP, is another Row Housing project on Gwalior road for which we have constructed high-end Villas. The all services of colony has been commenced and the completion certificate from JDA was received on 22/12/2019. The occupancy in the colony has been reach about 90%.

A Collaboration project namely "Ansal Aditya Aryan Vatika", Gwalior had been planned for development of Farm Houses and is spread over an area of approx. 150 acres. Routine maintenance works for horticulture and landscape at main entrance gate/ site office and sample cottage is being completed. Work held-up due to some legal issues regarding the purchase of patta land, which are currently going-on in Supreme Court.

A Group Housing residential project in SADA, Gwalior, MP had been allotted through a design completion and competitive bidding. Our company has filled a writ appeal in the M.P High Court to set aside the cancellation order by SADA and allowed us to develop the Project as per the original conceptual plan submitted. Group Housing / residential plots of 41.94 acres were allotted through competitive bidding to Ansal Buildwell Ltd by SADA, Gwalior. Court has admitted the writ appeal and asked the State to file the reply, which is still awaited.

"Ansal Crown Heights", is a Joint Venture Group Housing residential Project in Sec-80, Faridabad with M/s Crown Group, Faridabad. External electrification and Fire fighting work for Phase-I are under Progress. Presently three contractors are working on the Project. Licence of the project had been revalidated upto 17.09.2025 and Building plans of all towers has submitted for re-validated. Structure of work of EWS block-B (terrace floor) has been substantially completed. NOC EIA has been received. The application for completion certificate of Phase-I comprising of Tower nos. 7,8,9,10, Convenient shopping and EWS has been submitted to T & CP Chandigarh. License has been renewed upto 17/09/2025. Proposed date of completion for Phase-I: which was 31st March 2021 is being extended now which is as for Phase-II: it is 31st Dec, 2023 (Rev) The registration of the project with HRERA has been received.

The work on our Sub Contracted Spillway Project at Thoubal, Manipur has been completed in spite of continuous instability & insurgency. Spillway work has been completed. Gantry Crane has been erected. All four radial gates are working mechanically. For intake and water conductor system, work for hoisting arrangement is pending due to non payment of bill from IFCD. Work will be completed only after receipt of payment. For payments arbitration case is already going on in Court.

For the already completed C-Dot Project two sets of claims are under arbitration. Arbitrator has been appointed for setting aside the claims for the secretariat building/complex at Dispur, Guwahati. Statement of facts and claims are to be submitted to the arbitrator tribunal.

Claims have also been submitted to our client (NEIGRIHMS) for the construction of Housing complex in Shillong. Arbitration is under process and hearing for Bank Guarantee case is also scheduled.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company is putting in place standard operating procedures specific to the various processes of business. The effectiveness of internal control mechanism is reviewed by independent Internal Auditors at regular intervals.

The Company has formulated a Policy framework on internal control for identifying and rectifying internal control weaknesses and to monitor the same and report to corporate management. The Company has Audit Committee consisting of independent directors having expert knowledge and vast experience in the field of their area of operations. They do periodic review accounting records and various statements/Accounts prepared by the accounting department. They advise time to time to the senior management of the Company and interact with them.

During the year under review, four meetings of Audit Committee were held to review, inter alia, the internal audit/controls along with management comments and follow up actions thereon.

It reviewed, inter-alia the adequacy and effectiveness of the internal control systems and monitored implementation of Internal Audit recommendations.

Your Company has in place adequate Internal Control systems and procedures commensurate with the size and nature of business. These procedures are designed to ensure that:

• Effective & Adequate Internal Control environment is maintained across the Company.

• All assets and resources are acquired economically, used efficiently and are adequately protected.

• Significant financial, managerial and operating information is accurate, reliable and is provided timely; and

• All internal policies and statutory guidelines are complied with.

The Company has a proper and adequate system of internal controls to ensure that all assets are safeguarded and protected against loss from unauthorised use or disposition and that transactions are authorised, recorded and reported correctly.

The Board of Directors had appointed M/s Shailender K. Bajaj & Co., Chartered Accountants, 2E/45, Connaught Place, New Delhi-110 001 represented by Mr. Shailender Bajaj as internal auditors of the Company to effective internal control/audit to cover various risks as they will identify in the process of internal audit, monitor and advise Audit Committee/Board of Directors from time to time to take strategic steps to control them.

The Companys internal control systems are further supplemented by an extensive programme of internal audit by an independent department of competent executives and periodic review by Management.

The Company has clearly laid down policies, guidelines and procedures which form part of its internal control system.

PROSPECTS & FUTURE OUTLOOK

In the last couple of year developers have mainly cleared their existing inventories along-with focusing on the new policy requirements / compliances, which had become mandatory. The stringent measures enforced by Real Estate Regulatory Authority (RERA) and other regulatory bodies have helped to increase transparency giving a boost to the entrenched and serious investors who are again poised for new investments. Real estate body CREDAI is playing an excellent role to stop cartelization in the prices of steel, cement, and other raw materials of construction Industry. There has been an inevitable increase in the construction cost which has impacted our industry to large extent, stalling projects in some cases, creating a delay in delivery and thereby impacting the homebuyers at large.

With strict implementation of the laws by the regulatory bodies, non serious developers and players are out of the market now. Only credible developers with proven track record are expected to drive the market now with increased transparency and accountability. This efficient environment has found favour with domestic, international and institutional investors. This is expected to continue in the coming years and we will see more established brands and names further capitalize on the deals including joint venture partnerships with smaller players.

As we all know there has been massive push for infrastructure building by the Government and lot of money is being spent for construction of roads, bridges, railway projects, new smaller airports and expansion of schools & hospitals in sub-urban segments which include Tier-2/3 cities. This will ensure better connectivity to these areas by which developers can explore and start new projects at much cheaper prices.

Property prices remaining stable, interest rate hovering around 15-year low, and ample ready-to-move-in property or near-completion projects being available in the market are some of the reasons which ideally make it one of the best times to invest in a piece of property. For many consumers, real estate investments are usually once in a lifetime investment. Buying property from genuine developers ensures high returns on your investment. Its important to not fall into the trap of sham deals and over-discounted properties but instead to invest money with reputed developers where Investment remains in safe hands. Better constructed homes, low maintenance, on-time deliveries are deemed to give better property appreciation. Also it is very important to mention about the interest which the NRI community is showing in Investments in country of their Origin which is further leading to the growth of the real estate business in our country.

Investing in Real Estate can be really fruitful right now as overall inflation in the property rates is bound to happen following the price hike in the raw materials. Let us forget the past couple of bad Years and remain positive for times to come.

OPPORTUNITIES AND THREATS

The long term view on the Indian Real Estate Industry is positive, as fundamental demand drivers such as increasing urbanization, favourable demographics, growth of the service sector, and rising incomes are still intact.

Demand-supply gap in affordable housing exists, with demand fuelled by tax incentive and growing middle class with higher savings. Increasing demand for commercial and office space especially from the rapidly growing Retail, IT and Hospitality Sectors etc. also exists.

Real estate business of the Company is dependent on the performance of the real estate market in India. Fluctuations in market conditions may affect capacity of the Company to sell projects at expected prices, which could unfavorably effect our revenues and earnings.

The Company may not be able to increase the prices of its products in order to pass costs on to its customers in the background of inflation, and its profits might decline.

Potential limitations on the supply of land could reduce revenues of the Company or negatively impact the results of its operations

The business is subject to extensive statutory or governmental regulations. Change in the business policies of the Government, may have effect on the prospects of the business.

Work stoppages and other labour problems could adversely affect the business.

Sanctioning process through the authorities is slow and time consuming. Fluctuations in market conditions may affect our ability to sell our projects at expected prices, which could adversely affect our revenue and earnings. Potential limitations on the supply of land could reduce our revenue or negatively impact the results of Companys operations.

RISK AND CONCERNS

A big risk which the developers are facing is price risk. Real estate price cycles have the maximum impact on the margins of the developers, because land costs account for a large portion of the constructed property. The other risk to which the developers are exposed is demand risk which indicates the ability to sell properties based on location, brand, track record, quality and timelines of completion. Most real estate developers try to address this risk by undertaking market surveys in order to assess the demand for their properties. There is Finance Risk also. Low availability of funds is also a major risk for real estate industry. Uncertain interest rates lead to uncertainty in the real estate market. Demonetisation may dampen the growth rate of demand for housing units. Change in Government Policies including change in Tax structure will also affect the Progress of the Real Estate Industry.

During the year under review, the Compnay had faced the risk of COVID-19 Pandamics and after effects of partial lockdown. The above factors affected the demand of the real estate sector of the economy.

The impact of the Real Estate (Regulation and Development) Act, 2016 is very uncertain. It is very difficult to say how the Real Estate Market and consumers will react upon it.

Although major initiatives in the infrastructure of road and transportation have been made, yet the availability of Power still needs the attention of policy makers.

The lack of uniformity in the regulatory environment concerning the real estate, as also the availability of quality manpower, and reliable databases on industry, are concerns that need to be addressed for attracting FDI inflows in the industry.

CAUTIONARY STATEMENT

Statements in this report on Managements Discussion & Analysis are based on certain assumptions and expectations of future events. Some statements may be consistent and repetition of the earlier years as there was no change in the circumstantial positions. Actual results could, however, differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include global as well as domestic demand-supply conditions, raw material cost & availability, changes in Government regulations and tax structure, economic development within India and world-wide and other relevant factors.