1.  We have audited the attached Balance Sheet of M/s Ansal Housing &
 Construction Ltd. as at 31st March 2011 and also the Profit and Loss
 Account and the Cash Flow Statement for the year ended on that date
 annexed thereto. These financial statements are the responsibility of
 the Company’s management. Our responsibility is to express an opinion
 on these financial statements based on our audit.
 
 2.  We conducted our audit in accordance with auditing standards
 generally accepted in India. Those Standards require that we plan and
 perform the audit to obtain reasonable assurance about whether the
 financial statements are free of material misstatement. An audit
 includes examining, on a test basis, evidences supporting the amounts
 and disclosures in the financial statements. An audit also includes
 assessing the accounting principles used and significant estimates made
 by management as well as evaluating the overall financial statement
 presentation. We believe that our audit provides a reasonable basis for
 our opinion.
 
 3.  As required by the Companies (Auditor’s Report) Order, 2003 as
 amended by (Amendment) Order, 2004 issued by the Central Government of
 India in terms of sub-section (4A) of section 227 of the Companies Act,
 1956, we enclose in the Annexure, a statement on the matters specified
 in paragraphs 4 and 5 of the said order.
 
 4.  Without qualifying our opinion, we draw attention to Note No.  5 in
 Schedule 15 to the financial statements. The Company has advanced Rs.
 751.02 lacs to certain parties /collaborators which have been accounted
 for as ‘advances for land’. In the absence of underlying contract /
 agreement in this regard, we have relied on the management’s
 representation that the advances are good and recoverable.
 
 5.  Further to our comments in the Annexure referred to in paragraph 3
 and 4 above, we report that :
 
 a) We have obtained all the information and explanations which to the
 best of our knowledge and belief were necessary for the purpose of our
 audit.
 
 b) In our opinion, proper books of account as required by law have been
 kept by the Company so far as appears from our examination of the
 books.
 
 c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
 dealt with by this report are in agreement with the books of account.
 
 d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
 Flow Statement dealt with by this report comply with accounting
 standards referred to in sub section (3C) of Section 211 of the
 Companies Act, 1956.
 
 e) On the basis of the written representations received from the
 directors as on 31st March, 2011 and taken on record by the Board of
 Directors, we report that none of the directors is disqualified as on
 31st March 2011 from being appointed as a director in terms of clause
 (g) of sub- section (1) of section 274 of the Companies Act, 1956.
 
 f) In our opinion and to the best of our information and according to
 the explanations given to us, the accounts read with accounting
 policies and other notes, give the information required by the
 Companies Act, 1956, in the manner so required and give true and fair
 view in conformity with the accounting principles generally accepted in
 India:
 
 i) in the case of the Balance Sheet, of the state of affairs of the
 Company as at 31st March, 2011 and ;
 
 ii) in the case of the Profit and Loss Account, of the profit for the
 year ended on that date.
 
 iii) in the case of the cash flow statement, of the cash flows for the
 year ended on that date.
 
 Annexure to the Auditors'' Report
 (Referred to in Paragraph 3 thereof)
 
 Based on the audit procedures performed for the purpose of reporting a
 true and fair view on the Financial Statements of the Company and
 taking into consideration the information and explanations given to us
 and the books and accounts and other records examined by us in the
 normal course of audit, we report that:
 
 1.  a) The Company has maintained proper records showing full
 
 particulars including quantitative details and situation of fixed
 assets.
 
 b) As explained to us, the fixed assets are physically verified by the
 management in a phased periodical manner, which in our opinion is
 reasonable, having regard to the size of the Company and nature of its
 assets. No material discrepancies were noticed on such physical
 verification.
 
 c) The Company has not disposed of a substantial part of the fixed
 assets during the year and hence the going concern assumption is not
 affected.
 
 2.  a) As per information and explanations given to us, the inventory
 of building materials, stores and spares, restaurant''s provisions,
 beverages etc. and fats/shops/ houses etc. at major locations has been
 physically verified during the year by the management. In our opinion,
 the frequency of verification is reasonable. According to the
 information and explanations given to us, keeping in view the nature of
 the operations of the Company, inventory of work-in-progress can not be
 physically verified.
 
 b) In our opinion and according to the explanations given to us, the
 procedures of physical verification of inventories followed by the
 management are reasonable and adequate in relation to the size of the
 Company and the nature of its business.
 
 c) The Company has maintained proper records of inventory.  As
 explained to us, there were no material discrepancies noticed on
 physical verification of inventory as compared to the book records.
 
 3.  a) The Company has granted unsecured interest free loan to a wholly
 owned subsidiary company. The maximum amount involved during the year
 and year end balance of loan was Rs. 500 lacs.
 
 b) The loan is interest free being given to a wholly owned subsidiary.
 
 c) In respect of loan given to the wholly owned subsidiary, there is no
 stipulation regarding repayment.
 
 d) The Company has not taken any loans, secured or unsecured, from
 companies, firms or other parties covered in the register maintained
 under section 301 of the Companies Act, 1956.
 
 4.  In our opinion and according to the information and explanations
 given to us, there is an adequate internal control procedure
 commensurate with the size of the Company and the nature of its
 business for purchase of inventory and fixed assets and for sale of
 goods and services. During the course of audit, we have neither come
 across nor have been informed of any continuing failure to correct
 major weakness in the aforesaid internal control procedures.
 
 5.  a) According to information and explanation given to us, we are of
 the opinion that the transactions that need to be entered into the
 register in pursuance of section 301 of the Companies Act, 1956 have
 been so entered.  b) In our opinion and according to the information
 and explanations given to us, the transactions made in pursuance of
 contracts or arrangements entered into the register in pursuance of
 section 301 of the Companies Act, 1956 and exceeding the value of Rs.
 five lakhs in respect of each party during the year have been made at
 prices which are reasonable having regard to the prevailing market
 prices at the relevant time where such market prices are available.
 
 6.  In our opinion and according to the information and explanations
 given to us, the Company has complied with the provisions of sections
 58A and 58AA or any other relevant provisions of the Companies Act,
 1956 and the Companies Acceptance of Deposits Rules, 1975. According to
 the information and explanations given to us, in this regard, no order
 under the aforesaid sections has been passed by the Company Law Board
 or National Company Law Tribunal or Reserve Bank of India or any Court
 or any other Tribunal on the Company.
 
 7.  In our opinion the Company has an internal audit system
 commensurate with the size and nature of its business.
 
 8.  The Central Government of India has not prescribed the maintenance
 of cost records U/s 209 (1) (d) of the Companies Act, 1956 for any of
 the products of the Company.
 
 9.  a) According to the information and explanations given to us and
 records of the Company examined by us, in our opinion, the Company is
 generally regular in depositing with appropriate authorities undisputed
 statutory dues relating to provident fund, investor education and
 protection fund, employees state insurance, income-tax, sales tax,
 wealth tax, service tax, custom duty, excise duty, cess and other
 statutory dues, wherever applicable.  However, in the case of service
 tax payable on construction services levied w.e.f. 1st July, 2010 vide
 amendment in Finance Act, 2010, the same was deposited in the month of
 March 2011 as the matter was pending in High Court about constitutional
 validity of the amendment. No undisputed amounts payable in respect of
 these dues were outstanding at the year end for a period of more than
 six months from the date they became payable.
 
 b) According to the information and explanations given to us and the
 records of the Company examined by us, the disputed amounts payable in
 respect of income-tax, sales tax, wealth tax, custom tax and excise
 duty / cess not deposited with the appropriate authorities are as
 follows:
 Nature of dues   Amount       Period to which the  Forum where
                 (Rs.In lacs)  relates              dispute is 
                                                    pending
 
 
 Wealth Tax              0.49  Assessment Year      CWT (Appeals)-I, 
                               2004-05              New Delhi
 
 Sales Tax              20.37  Assessment Year      Tribunal, 
                        31.50  - 2003-04            Commercial Tax,
                        63.64  - 2004-05            Ghaziabad.
                               - 2005-06
 
 Sales Tax              43.87  Assessment Year      Deputy 
                        39.70  -2006-07             Commissioner of 
                               -2010-11             Trade Tax, 
                                                    Ghaziabad.
 
 Sales Tax             638.70  Assessment Year      Joint 
                               2007-08              Commissioner of 
                                                    Trade Tax, 
                                                    Ghaziabad.
 
 Provident Fund         66.78  June 1994 to         Employees 
                               March 2006           Provident Fund
                                                    Appellate 
                                                    Tribunal
 
 Employee State          2.97  June 1998 to         District Courts,
 Insurance                     April 1999           Tees Hazari, 
                                                    Delhi
 
 Service Tax           271.31  October 2003 to      *
                               March 2010 
 
 * As informed to us, the Company is in the process of fling an appeal
 against the service tax demand which has been received on 28th April,
 2011.
 
 10. The Company does not have any accumulated losses and has not
 incurred cash losses during the financial year covered by our audit and
 the immediately preceding financial year.
 
 11. According to the records of the Company examined by us and the
 information and explanations given to us, the Company has not defaulted
 in the repayment of dues to financial institutions and banks during the
 year.
 
 12. According to the information and explanation given to us, the
 Company has not granted any loans and advances on the basis of security
 by way of pledge of shares, debentures, and other securities.
 
 13. The provisions of any special statute applicable to chit fund /
 nidhi / mutual benefit fund / societies are not applicable to the
 Company.
 
 14. In our opinion, the Company is not a dealer or trader in shares,
 securities, debentures and other investments.
 
 15. The Company has given guarantees for loans taken by its wholly
 owned subsidiaries and other companies from banks or financial
 institutions. In our opinion and based on the information and
 explanations given to us, the terms and conditions of the guarantees
 are not, prima facie, prejudicial to the interest of the Company.
 
 16. According to the information and explanations given to us and the
 records examined by us, terms loans obtained for financing real estate
 projects, in our opinion, on an overall basis, were used for the real
 estate projects.
 
 17. On the basis of an overall examination of the Balance sheet of the
 Company, in our opinion and according to the information and
 explanations given to us, there are no funds raised on short term basis
 which have been used for long term invest- ments.
 
 18. The Company has made preferential allotment of shares during the
 year to parties and companies covered in the Register maintained under
 section 301 of the Companies Act, 1956. In our opinion and according to
 the information and explanations given to us, the price at which shares
 have been issued to these parties is not prejudicial to the interest of
 the Company.
 
 19. The Company has not issued any debentures during the year.
 
 20. The company has not raised any money by public issue during the
 year.
 
 21. According to the information and explanations given to us, during
 the year, no fraud on or by the Company has been noticed or reported
 during the course of our audit.
 
                                              For Khanna & Annadhanam
 
                                                Chartered Accountants
                                      (Firm Registration No. 001297N)
 
                                                   (Jitender Dhingra)
 
                                                              Partner
                                                 Membership No. 90217
 
 Place : New Delhi 
 Date  : 30th May, 2011