NBCC (India) Ltd Auditors Report.

TO THE MEMBERS OF NBCC (India) Limited

(Formerly National Buildings Construction Corporation Limited)

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

1. We have audited the accompanying standalone Ind AS financial statements of NBCC (India) Limited (Formerly National Buildings Construction Corporation Limited) ("the Company"), which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Managements Responsibility for the Standalone Ind AS Financial Statements

2. 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 to give a true and fair view of the financial position, financial performance (including other comprehensive income), cash flows and changes in equity of the Company in accordance with the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, and other accounting principles generally accepted in India.

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

Auditors Responsibility

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

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

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

6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the 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.

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

Opinion

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

Report on Other Legal and Regulatory Requirements

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

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

11. As required by Section 143 (3) of the Act, based on our audit, we report that:

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

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

c) The Balance Sheet, the Statement of Profit and Loss (including other comprehensive income), the Cash Flow Statement and the Statement of Changes in equity dealt with by this Report are in agreement with the books of account.

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

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

f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in Annexure A. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the companys internal financial controls over financial reporting.

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

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

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

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

For JAGDISH CHAND & CO.
Firm Registration Number: 000129N
Chartered Accountants
Sd/-
Place of signature: New Delhi (Praveen Kumar Jain)
Date: 25.05.2018 Partner
Membership Number: 085629

Annexure A to Independent Auditors Report

Referred to in paragraph 11 (f) of the Independent Auditors Report of even date to the members of NBCC (India) Limited (Formerly National Buildings Construction Corporation Limited) on the standalone Ind AS financial statements for the year ended 31 March, 2018

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

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

2. 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

3. 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 deemed to be prescribed under section 143(10) of the Act to the extent applicable to an audit of internal financial controls, both applicable to an audit of internal financial controls and both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

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

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

Meaning of Internal Financial Controls Over Financial Reporting

6. 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 (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

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

Opinion

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

For JAGDISH CHAND & CO.
Firm Registration Number: 000129N
Chartered Accountants
Sd/-
(Praveen Kumar Jain)
Place of signature: New Delhi Partner
Date: 25.05.2018 Membership Number:085629

Annexure B to Independent Auditors Report

Referred to in paragraph 9 of the Independent Auditors Report of even date to the members of NBCC (India) Limited (Formerly National Buildings Construction Corporation Limited) on the standalone Ind AS financial statements as of and for the year ended 31 March, 2018 i. (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation, of fixed assets.

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

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

- In case of Land :-

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

- In case of Buildings :-

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

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

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

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

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

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

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

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

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

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

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

x. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the Management.

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

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

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

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

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

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

For JAGDISH CHAND & CO.
Firm Registration Number: 000129N
Chartered Accountants
Sd/-
(Praveen Kumar Jain)
Place of signature: New Delhi Partner
Date: 25.05.2018 Membership Number:085629

Annexure C to Independent Auditors Report

Directions and Sub-Directions indicating the areas to be examined by the Statutory Auditors during the course of audit of Annual Accounts of the NBCC (India) Limited (Formerly National Buildings Construction Corporation Limited) for the year 2017-18 issued by the Comptroller & Auditor General of India under section 143 (5) of the Companies Act, 2013.

Referred to in paragraph 10 of the Independent Auditors Report of even date to the members of NBCC (India) Limited (Formerly

National Buildings Construction Corporation Limited) on the standalone Ind AS financial statements as of and for the year ended 31 March, 2018

Directions / Sub-directions
Action Taken Impact on financial statement
A Directions
1 Whether the company has clear title/lease deeds for freehold and leasehold respectively? If not please state the area of freehold and leasehold land for which title/lease deeds are not available? The company has clear title/ lease deed for free hold/ lease hold land except as per the details given below: NIL
Free hold Land: 8,437 sq mt.
Lease hold Land: 1,83,945 sq mt.
(This information is in respect of Land included in "Property Plant & Equipment" of the Company)
2 Whether there are any cases of waiver/write off of debts/loans/interest etc., if yes, the reasons there for and amount involved. There is a write off Loans and Advances amounting to Rs 21.42 lakhs during the financial year 2017-18. Advances are written off as and when considered unrealizable. Already accounted
3 Whether proper records are maintained for inventories lying with third parties & assets received as gift/grant(s) from the Government or other authorities. As per information & explanation given to us there is no inventory lying with third parties and no assets received as gift from Government or other authorities. NIL
B Sub Directions : NIL
For JAGDISH CHAND & CO.
Firm Registration Number: 000129N
Chartered Accountants
Sd/-
(Praveen Kumar Jain)
Partner
Place of signature: New Delhi Membership Number:085629
Date: 25.05.2018