We have audited the attached Balance Sheet of Ansal Properties &
 Infrastructure Limited as at March 31, 2011 and also the Profit & Loss
 Account and the Cash Flow Statement of the Company 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.
 
 We have 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, evidence supporting the amounts
 and disclosures in the financial statements. An audit also includes
 assessing the accounting principles used and significant estimates made
 by the management, as well as evaluating the overall financial
 statement presentation. We believe that our audit provides a reasonable
 basis for our opinion.
 
 As required by the Companies (Auditors'' Report) Order, 2003 as amended
 by the Companies (Auditors'' Report) (Amendment) Order, 2004
 (collectively the Order) issued by the Central Government of India in
 terms of Section 227 (4A) of the Companies Act, 1956 and on the basis
 of such checks as we considered appropriate and according to the
 information and explanations given to us, we enclose in the Annexure a
 statement on the matters specified in paragraphs 4 and 5 of the said
 Order.
 
 Further to our comments in the Annexure referred to 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
 those books;
 
 c) The Balance Sheet, Profit & 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 & Loss Account and Cash
 Flow Statement, dealt with by this report, comply with the Accounting
 Standards referred to in sub - section (3C) of Section 211 of the
 Companies Act, 1956.
 
 e) On the basis of written representations received from the directors
 as on March 31, 2011 and taken on record by the Board of Directors, we
 report that none of the directors is disqualified as on March 31, 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) Without qualifying our opinion, we draw attention to :
 
 i.  Note no. B(4) of Schedule 17 wherein the company has claimed
 exemption of Rs. 39.91 lacs during the year in addition to exemption
 accounted for upto March 31, 2010 of Rs. 3408 lacs under section 80 IA
 of the Income Tax Act, 1961 being tax profits arising out of sale of
 Industrial Park units, pending the notification of the same by Central
 Board of Direct Taxes. Further the company has taken opinion from a
 senior counsel that its application satisfies all the conditions
 specified in the said Scheme of Industrial Park. We have relied on
 management contention.
 
 ii.  Note no. B - 6(b) of Schedule 17 wherein the company is carrying
 project inventory of Rs. 16719 lacs for one of its Group Housing
 projects. The company has applied to the Authority for developing the
 project on the basis of revised Scheme announced by the Authority which
 is pending approval. The management is of the view that there is no
 impairment in the value of land/project and we have relied on
 management contention.
 
 iii.  Note no. B -6 (a) of Schedule 17 wherein the company has given
 advances to land owning companies/ collaborators/ others for purchase
 of land/ others of Rs.16603 lacs. In the absence of details of land
 purchased/ end use for intended purposes and financial position of
 these parties, we understand from management that such advances are
 given in respect of ongoing transactions and are regarded as being in
 the normal course of business. We have relied on management contention.
 
 g) The company has not considered for the estimated cost of land to be
 incurred in future for one of its large Township projects and also not
 considered borrowing costs to be incurred in future in general for
 determining the project revenues, project inventory and debtors.
 Referring Note no. B-2 of Schedule 17, wherein according to the
 management the amount of these items cannot be determined at this
 stage, we are unable to comment on the consequential impact thereof on
 the carrying value of project inventory, revenue recognition and
 outstanding debtors and other adjustments that may be necessitated on
 this account.
 
 h) The Company has, during last year, changed its accounting policy in
 respect of accounting for certain costs in the nature of administration
 and selling costs by charging them off to Profit & Loss against the
 earlier policy of treating them as part of project cost for determining
 project inventory, revenue and debtors.  Expenditure of such nature
 incurred in earlier years and considered as part of project inventories
 under Projects/ Contract work in progress upto 31st March, 2009 has
 been carried forward as such. Such amount has not been determined by
 the management in view of the practical difficulties involved, as
 explained. In the absence of availability of these amounts relating to
 the period upto 31st March 2009, we are unable to comment on the impact
 thereof on the carrying value of project inventories, revenue
 recognition and outstanding debtors and other adjustments that may be
 required.
 
 Subject to that stated in clause g) and h) above having its impact as
 aforesaid, in our opinion and to the best of our information and
 according to the explanations given to us, the said accounts read with
 the Accounting policies and Notes thereon give the information required
 by the Companies Act, 1956 in the manner so required and give a true
 and fair view in conformity with the accounting principles generally
 accepted in India:
 
 i) In the case of Balance Sheet, of the state of affairs of the Company
 as at March 31, 2011;
 
 ii) In the case of Profit and Loss Account, of the Profit for the year
 ended on that date; and
 
 iii) In the case of Cash Flow Statement, of the Cash flows for the year
 ended on that date.
 
 ANNEXURE TO AUDITORS'' REPORT
 (Annexure referred to in our report of even date)
 
 1.  (a) The Company has maintained proper records showing full
 particulars, including quantitative details and situation of fixed
 assets.
 
 (b) The Company has a phased programme of physical verification of its
 fixed assets which, in our opinion, is reasonable having regard to the
 size of the Company and the nature of its assets. All the fixed assets
 identified during the year for verification have not been physically
 verified by the management. However, discrepancies noticed during
 physical verification have been recorded and accounted for in the books
 of account to the extent of verification carried out.
 
 (c) Fixed assets disposed off during the year were not substantial.
 
 2.  (a) As explained to us, physical verification has been conducted by
 the management at reasonable intervals in respect of building material,
 stores & spares and inventory of shops/ flats/ houses. In our opinion,
 the frequency of such verification is reasonable.
 
 (b) The procedures for the physical verification of inventory followed
 by the management are, in our opinion, reasonable and adequate in
 relation to the size of the Company and nature of its business.
 
 (c) In our opinion, the Company is maintaining proper records of
 inventory.  The discrepancies noticed on physical verification of
 inventory as compared to book records were not material and have been
 properly dealt with in the books of account.
 
 3.  (a) The company has not granted any loans, secured or unsecured, to
 companies, firms or other parties listed in the register maintained
 under section 301 of the Companies Act, 1956.
 
 (b) Since there are no such loans, the comments regarding repayment of
 the principal amount and interest due thereon and overdue amounts are
 not required.
 
 (c) The company has taken deposits from one of the directors covered in
 the register maintained under section 301 of the Companies Act, 1956.
 In our opinion the rate of interest and other terms and conditions of
 such deposits are not prima facie, prejudicial to the interest of the
 company. The maximum amount of deposit during the year was Rs. 9 lacs
 and the year end balance was also Rs. 9 lacs.
 
 (d) In respect of deposits taken, repayment of the principal and
 interest has been regular. There are no overdue amounts at the year
 end.
 
 4.  In our opinion, and according to the information and explanations
 given to us during the course of audit, there are adequate internal
 control systems commensurate with size of the Company and the nature of
 its business with regard to purchase of inventory and fixed assets and
 for the sale of services. Further, on the basis of our examination of
 the books & records of the company, carried out in accordance with the
 generally accepted auditing practices in India, we have neither come
 across nor have we been informed of any instance of major weaknesses in
 the aforesaid internal control systems. The company''s activity does not
 qualify for sale of goods. However, the internal control systems with
 regard to documentation of advances given to land owning companies/
 collaborators/ associates/ others need improvement.
 
 5.  (a) To the best of our knowledge and belief and according to the
 information and explanations given to us, we are of the opinion that
 particulars of contracts or arrangements that need to be entered into
 the register maintained under 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 with parties in pursuance of contracts or
 arrangements, with whom transactions exceeding the value of Rupees Five
 Lacs in respect of each party have taken place during the financial
 year, are at prices, which are reasonable, having regard to the
 prevailing market prices at the relevant time where such market prices
 are available.
 
 6.  In respect of fixed deposits accepted from the public, the
 provisions of section 58A and 58AA or any other relevant provisions of
 the Companies Act, 1956 including the Companies (Acceptance of Deposit)
 Rules, 1975 have been complied with. We have been informed that no
 order has been passed by Company Law Board or National Company Law
 Tribunal or RBI or any Court or any other Tribunal in this regard.
 
 7.  In our opinion, the Company has an internal audit system
 commensurate with the size & nature of its business.
 
 8.  The Central Government has not prescribed for maintenance of Cost
 Accounting records pursuant to the requirements of clause (d) of
 sub-section (1) of section 209 of the Companies Act, 1956 for any of
 the activities of the company.
 
 9.  (a) In our opinion and according to the information and
 explanations given to us, according to the records of the Company,
 undisputed statutory dues including Provident Fund, Investor Education
 and Protection Fund, Employees State Insurance, Sales tax, Wealth-tax,
 Custom Duty, Excise Duty, Cess and other material statutory dues,
 wherever applicable, have been generally regularly deposited with the
 appropriate authorities except in certain cases of delays of Service
 Tax, Employees State Insurance and Tax deducted at source which have
 been deposited with interest. However there are no such undisputed
 statutory dues payable for a period of more than six months from the
 date they became payable as at March 31, 2011.
 
 (b) According to the information and explanations given to us and as
 per the books and records examined by us, there are no dues of Customs
 duty, Excise duty, Service tax and Cess which have not been deposited
 on account of any dispute, except the following in respect of disputed
 Sales tax, Wealth tax and Income Tax along with the forum where dispute
 is pending:
 
 S.
 No. Name of Statute Nature of Dues   Amount Assessment Forum where 
                                                        pending
                                      (Rs.in 
                                       lacs)    Year
 
 (i) Income Tax Act  Interest on FBT    0.49   2006-07  Asstt. 
                                                        Commissioner
                                                        of Income Tax,
                                                        New Delhi
 
 (ii) Wealth Tax Act Wealth Tax         0.45   1992-93  Asstt. 
                                                        Commissioner
                                                        of Wealth Tax,
                                                        New Delhi
 
 (iii) Wealth Tax 
       Act           Wealth Tax         0.50   1997-98  Deputy 
                                                        Commissioner
                                                        of Wealth Tax,
                                                        New Delhi
 
 (iv) Wealth Tax Act Wealth Tax         0.96   2000-01  Deputy 
                                                        Commissioner
                                                        of Wealth Tax, 
                                                        New Delhi
 
 (v) Local Area      Local Area         8.73   2003-04  Joint Excise & 
                                                        Taxation
     Development 
     Tax Act         Development Tax                    Commissioner 
                                                        (Appeal),
                                                        Gurgaon
 
 (vi) Sales Tax Act  Delhi Sales Tax    4.47 1999-2000  Assessing Officer
                                                        Delhi
 
 (vii) Sales Tax Act Delhi Sales Tax   33.17  2004-05   Sales Tax 
                                                        Tribunal, Delhi
 
 (viii) Sales Tax 
      Act            Haryana Sales Tax 11.68  2005-06   Joint 
                                                        Commissioner
                                                        (Appeal), Gurgaon
 
 (ix) Sales Tax Act  UP Sales Tax      55.02  2005-06   Trade Tax 
                                                        Tribunal,
                                                        Ghaziabad
 
 (x) Sales Tax Act   UP Sales Tax      96.04  2006-07   Trade Tax 
                                                        Tribunal,
                                                        Ghaziabad
 
 (xi) Sales Tax Act  UP Sales Tax       0.29  2006-07   Additional
                                                        Commissioner
                                                        (Appeal),
                                                        Ghaziabad
 
 (xii) Sales Tax Act UP Sales Tax       2.38  2008-09   Additional
                                                        Commissioner
                                                        (Appeal), 
                                                        Ghaziabad
 
 (Xiii) Sales Tax 
 Act                 UP Sales Tax       1.08  2008-09   Additional
                                                        Commissioner
                                                        (Appeal), 
                                                        Ghaziabad
 
 (xiv) Sales Tax Act UP Sales Tax      62.19  2007-08   Trade Tax 
                                                        Tribunal,
                                                        Ghaziabad
 
 10.  There are no accumulated losses of the Company as at the end of
 the financial year. There are no cash losses during the financial year
 and in the immediately preceding financial year
 
 11.  According to the information and explanations given to us and as
 per the books and records examined by us, we report as follows:
 
 a) In respect of payments due for Debentures on account of Principal,
 Premium and Interest aggregating Rs 1350 lacs to LIC Mutual Fund and Rs
 1000 Lacs to HDFC India Real Estate Fund (HIREF), payments were delayed
 from 1 day to 341 days and these dues were cleared upto the close of
 financial year. Other amount due in respect of Debentures to LIC Mutual
 Fund aggregating Rs 9379 Lacs and HIREF of Rs 2008 Lacs have been
 outstanding for 1 day to 250 days as at the close of financial year and
 are outstanding as on date.
 
 b) Amounts due in respect of Term Loans from Banks / Financial
 Institutions on account of Principal & Interest aggregating Rs 22739.03
 Lacs (as per detail noted here under) were delayed and have been fully
 paid.
 
 c) In respect of other amounts due to Banks / Financial Institutions
 aggregating to Rs 4983.63 Lacs (as per details noted hereunder), the
 payments have been delayed from 1 days to 355 days and are outstanding
 as on date.
 
 As explained by the management, the delays are attributable to the
 delays in processing of Company''s proposal for rescheduling and
 restructuring in several cases.
 
 Note: - 1. The detail of amounts referred to in Clause (b) above 
 
 LIC of India 2 instances of Rs.1780.61 Lacs (Rs 1680.61 Lacs during the
 financial year and Rs 100 Lacs subsequently) with delay ranging from 1
 to 345 days
 
 IDBI Bank Ltd. 9 instances of Rs. 660.41 lacs (Rs 589.44 Lacs during
 the financial year and Rs 70.97 Lacs subsequently) with delay ranging
 from 1 to 90 days,
 
 Central Bank of India 10 instances of Rs. 912.49 lacs (Rs 626.28 Lacs
 during the financial year and Rs 286.21 Lacs subsequently) with delay
 ranging from 1 to 69 days,
 
 United Bank of India 10 instances of Rs. 1358.87 lacs (Rs 1124.72 Lacs
 during the financial year and Rs 234.15 Lacs subsequently) with delay
 ranging from 6 to 89 days,
 
 UCO Bank 10 instances of Rs. 5632.71 lacs (Rs 1059.83 Lacs during the
 financial year and Rs 4572.88 Lacs subsequently) with delays ranging
 from 1 to 90 days, 
 
 Yes Bank Ltd. 2 instances of Rs. 1897.42 lacs (Rs 1116.71 Lacs during
 the financial year and Rs 780.71 Lacs subsequently) with delays ranging
 from 1 to 86 days,
 
 Punjab National Bank 5 instances of Rs. 2974.05 (Rs 2441.18 Lacs during
 the financial year and Rs 532.87 Lacs subsequently) with delays ranging
 from 1 to 89 days,
 
 Syndicate Bank 5 instances of Rs. 362.14 lacs (Rs 353.71 Lacs during
 the financial year and Rs 8.43 Lacs subsequently) with delays ranging
 from 1 to 50 days,
 
 DSP MLC 4 instances of Rs. 515.91 Lacs (during the financial year) with
 delays ranging from 1 to 60 days,
 
 IFCI Factors Limited 4 instances of Rs.79.42 lacs (Rs 77.07 Lacs during
 the financial year and Rs 2.35 Lacs subsequently) with delays ranging
 from 1 to 10 days,
 
 HDFC Limited 35 instances of Rs. 4159.40 lacs (Rs 3984.56 Lacs during
 the financial year and Rs 174.84 Lacs subsequently) with delays ranging
 from 1 to 70 days, and
 
 LIC Housing Finance Limited 12 instances of Rs.  2405.59 lacs (Rs
 2061.59 Lacs during the financial year and Rs 344 Lacs subsequently)
 with delays ranging from 1 to 33 days.
 
 2.  The Detail of amounts referred to in Clause c) above
 
 LIC of India 3 instances of Rs.1752.67 lacs ,
 
 United Bank of India 2 instances of Rs. 479.99 lacs, and
 
 HDFC Limited 1 instance of Rs. 2750.96 lacs,
 
 12.  According to the information and explanations 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 Company does not fall within the category of Chit fund / Nidhi
 / Mutual Benefit fund / Society and hence the related reporting
 requirements of the Order are not applicable.
 
 14.  According to the information and explanations given to us, the
 Company is not dealing or trading in shares, securities, debentures and
 other investments and hence the related reporting requirements of the
 Order are not applicable.
 
 15.  The Company has given guarantees against loans taken by others
 from banks & financial institutions; the terms & conditions of such
 guarantees are not, prima facie, prejudicial to the interest of the
 company.
 
 16.  In our opinion and according to the information and explanations
 given to us, the term loans raised during the year by the Company have
 been generally applied for the purpose for which the said loans were
 obtained and for overall project related activity in general.
 
 17.  According to the information and explanations given to us and as
 per the books and records examined by us, on an overall examination of
 the Balance Sheet of the company, the funds raised by the Company on
 short-term basis have not been applied for long-term investment.
 
 18.  The Company has not made any preferential allotment of shares to
 parties and Companies covered in the register maintained under section
 301 of the Companies Act, 1956.
 
 19.  According to the information and explanations given to us and the
 records examined by us, the company has created necessary securities
 for the debentures issued except those issued to one of the lenders
 wherein the security provided by the company is less than the total
 amount of debentures necessitating classification of the balance amount
 of debentures as unsecured. We are explained that the said lender is
 not pursuing for any additional security.
 
 20.  The Company has raised funds by way of preferential and QIP issues
 during the year, the funds having been utilized for repayment of loans
 and other corporate purposes as defined in the terms of respective
 issues.
 
 21.  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, we have neither come across any instance
 of fraud on or by the Company, noticed and reported during the year,
 nor have we been informed of such case by the management.
 
 
                                         For S. S. KOTHARI MEHTA & CO.
 
                                                Chartered Accountants
 
                                                Firm Reg. No. 000756N
 
                                                    ( ARUN K. TULSIAN )
 
                                                              Partner
 
                                                 Membership No. 89907
 
 
 Place : New Delhi
 
 Dated: 26th May, 2011