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Ansal Housing Ltd.

BSE: 507828 Sector: Infrastructure
NSE: ANSALHSG ISIN Code: INE880B01015
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OPEN 6.79
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VOLUME 35557
52-Week high 13.91
52-Week low 5.95
P/E
Mkt Cap.(Rs cr) 42
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Ansal Housing Ltd. (ANSALHSG) - Auditors Report

Company auditors report

To

The Members of Ansal Housing Limited

Report on the Audit of the Standalone Financial Statements

Qualified Opinion

We have audited the accompanying standalone financial statements ofAnsal Housing Limited ("the Company") which comprise the Balance Sheet as at31st March 2021 and the Statement of Profit and Loss (including Other ComprehensiveIncome) statement of changes in equity and statement of cash flows for the year thenended and notes to the financial statements including a summary of significant accountingpolicies and other explanatory information (hereinafter referred to as "standalonefinancial statements").

In our opinion and to the best of our information and according to theexplanations given to us except for the possible effects of the matter described in Basisfor Qualified opinion section when reporting in accordance with a fair presentationframework the accompanying financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at 31stMarch 2021 and loss (financial performance including other comprehensive income) changesin equity and its cash flows for the year ended on that date.

Basis for Qualified Opinion

We draw attention to Note 17.9 to the Standalone financial statementswhich describe that IFCI Limited has revoked the restructuring and recalled repayment ofoutstanding dues amounting Rs.11296.77 Lakh (including default interest). Company has notrecognized the default interest cost amounting Rs.805.35 Lakh for the year ended 31stMarch 2021 considering covid-19 and other factors. The company is in discussion with thelender to resolve the matter in best possible manner. The Company's records indicate thathad management recognized the default interest an amount of Rs.805.35 Lakh would havebeen required to provide for as finance cost. Accordingly Finance Cost Deferred taxassets and Loss after tax would have been increased by Rs.805.35 Lakh Rs.224.05 Lakh andRs.581.30 Lakh respectively and shareholder's fund would have been reduced by Rs.581.30Lakh for the year ending 31st March 2021.

We conducted our audit in accordance with the Standards on Auditing(SAs) specified under section 143(10) of the Companies Act 2013 (the Act). Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the audit of financial statements section of our report. We areindependent of the Company in accordance with the Code of Ethics issued by the Instituteof Chartered Accountants of India together with the ethical requirements that are relevantto our audit of the Standalone Financial statements under the provisions of the CompaniesAct 2013 and the Rules there under and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the ICAI's Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our qualified opinion.

Emphasis of Matter

1. We draw attention to Note 17.8 of the the standalone financialstatements regarding loan from financial institution aggregating Rs.18869.83 Lakh(including overdue interest thereon) which is subject to confirmation as on March 312021.Adjustments if any will be accounted for on confirmation/reconciliation of the same 32Ansal Housing Ltd. Annual Report 2020-21 which in the opinion of the management will nothave a material impact.

2. We draw attention to Note 55 of the the standalone Financialstatements which describes the management's assessment of the impact of the outbreak ofCovid-19 on property plant & equipment revenue trade receivables unbilled revenueadvances investments and other assets. The management believes that no adjustments arerequired in the standalone financial statements as there is no impact in the currentfinancial year. However in view of highly uncertain economic environment and its likelyeffect on future revenues due to Covid-19 a definitive assessment of the impact on thesubsequent years is dependent upon circumstances as they evolve.

3. We draw attention to Note 43 to the the standalone financialstatements regarding Company's investment of Rs. 491.67 lakh in Housing and ConstructionLanka Private Limited (a wholly-owned subsidiary company located at Sri Lanka) by way ofequity shares. The Board of Investment ("BOI") has terminated the agreements fordevelopment of integrated township in Sri Lanka between the subsidiary and the BOI. Thesubsidiary company had filed an arbitration claim against the BOI of Sri Lanka. During theF.Y.2017-18 the management of the subsidiary company has written off all assets. Now thesubsidiary company does not have enough assets to redeem the said investment butmanagement of the company is of the opinion that they will be able to redeem the saidinvestment and write down of Investment is not required at this stage.

4. We draw attention to Note 54 of the standalone financial statementswhich describe that the Company is in collaboration with Samyak Projects Private Limited("Samyak'') for developing a project at Ansal Hub 83-II Gurugram. Samyak took anInter Corporate Deposit of Rs 2500 Lakh from the company for making the payment relatedto project under collaboration and failed to discharge its obligations for the repayment.The company has approached the NCLT for initiation of the Corporate Insolvency ResolutionProcess and the management is of the view that the full amount of Rs. 5795.20 Lakhs(including accrued interest till 31.03.2020) is recoverable from the party and hence noprovision for the same has been made in the books of accounts.

5. We draw attention to Note 58 to the standalone financial statementsregarding pending litigation matters with Court/ Appellate Authorities. Due to thesignificance of the balance to the Standalone financial statements as a whole and theinvolvement of estimates and judgement in the assessment which is being technical innature the management is of the opinion that the company will succeed in the appeal andthere will not be any material impact on the the Standalone financial statements onaccount of probable liability vis-a-vis the provisions already created in the books.

6. We draw attention to Note 53 of the standalone financial statementswhich describes that the Company have a system of obtaining periodic confirmation ofbalances from various parties (other than disputed parties). The External BalanceConfirmations were sent to banks and parties and certain party's balances are subject toconfirmation / reconciliation.

Adjustments if any will be accounted for on confirmation/reconciliation of the same which in the opinion of the management will not have amaterial impact.

7. We draw attention to Note 59 of the standalone financial statementsregarding the net recoverable value of advances/ security deposits paid by company foracquisition of land/project development is based on the management's estimates andinternal documentation which include among other things the likelihood when the landacquisition would be completed the expected date of plan approvals for commencement ofproject expected date of completion of project and the estimation of sale prices andconstruction costs. Due to the significance of the balance to the standalone financialstatements as a whole and the involvement of estimates and judgement in the assessmentwhich is being technical in nature the management is of the opinion that entire amount isrecoverable/adjustable against the land procurement/amount payable to collaborator undercollaboration agreement and hence no provision is required at this stage.

Our opinion is not modified in respect of these matters.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements of thecurrent period. These matters were addressed in the context of our audit of the standalonefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters.

We have determined the matters described below to be the key auditmatters to be communicated in our report

The Key Audit Matter How our audit addressed the key audit matter
Assessing the carrying value of Inventory
The Company's inventory comprises of ongoing and completed real estate projects Land flats Farm Land Building materials etc. As at 31st March 2021 the carrying values of inventories amounts to Rs.180878.76 Lakh. Our audit procedures/ testing included among others:
The inventories are carried at the lower of the cost and net realizable value ('NRV'). The determination of the NRV involves estimates based on prevailing market conditions current prices and expected date of commencement and completion of the project the estimated future selling price cost to complete projects and selling costs. • We read and evaluated the accounting policies and disclosures made in the standalone financial statements with respect to inventories;
Considering significance of the amount of carrying value of inventories in the standalone financial statements and the involvement of significant estimation and judgement in such assessment of NRV the same has been considered as key audit matter. Refer Note 1.11 & Note 1.19(b) to the Standalone Financial Statements. • We understood and reviewed the management's process and methodology of using key assumptions for determination of NRV of the inventories;
• We have tested the NRV of the inventories to its carrying value in books on sample basis.
Evaluation of uncertain tax positions
The company has material uncertain tax positions including matters under dispute which involves significant judgment to determine the possible outcome of these disputes. Our audit procedures include the following substantive procedures:
Refer Note no. 34 and 1.19(d) of the standalone financial statements. • Obtained understanding of key uncertain tax positions
Due to complexity involved in these litigation matters management's judgement regarding recognition and measurement of provisions for these legal proceedings is inherently uncertain and might change over time as the outcomes of the legal cases are determined. Accordingly it has been considered as a key audit matter. • Analyzed the all correspondence available on record for uncertain key tax positions; and
• Discussed with appropriate senior management and evaluate the management key assumptions in estimates of tax provisions where required.
Alternate audit procedure carried out in light of COVID- 19 outbreaks
Due to the outbreak of COVID-19 pandemic the consequent lockdown/curfew and travel restrictions imposed by the Government/ local administration during the audit period the audit processes could not be carried out physically at the Group's premises. As a part of alternative audit procedure the company has made available the following information/ records/ documents/ explanations to us through e-mail and remote secure network of the company:
The statutory audit was conducted via making arrangements to provide requisite documents/ information through electronic medium as an alternative audit procedure. We have identified such alternative audit procedure as a key audit matter a) Scanned copies of necessary records/documents deeds certificates and the related records made available electronically through e-mail or remote secure network of the Company; and
b) By way of enquiries through video conferencing dialogues and discussions over phone e-mails and similar communication channels.
It has also been represented by the management that the data and information provided electronically for the purpose of our audit are correct complete reliable and are directly generated from the accounting system of the Company extracted from the records and files without any further manual modifications so as to maintain its integrity authenticity readability and completeness. In addition based on our review of the various internal audit reports/inspection reports nothing has come to our knowledge that make us believe that such alternate audit procedure would not be adequate.

Information Other than the standalone financial statements andAuditor's Report Thereon

The Company's Board of Directors is responsible for the otherinformation. The other information comprises the information included in the ManagementDiscussion & Analysis Board's Report including Annexures to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the standalone financial statements and our auditor's report thereon.

Our opinion on the standalone financial statements does not cover theother information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statementsour responsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained in the audit or otherwise appears to be materially misstated.

If based on the work we have performed we conclude that there is amaterial misstatement of this other information we are required to report that fact. Wehave nothing to report in this regard. Responsibility of Management for StandaloneFinancial Statements

The Company's Board of Directors is responsible for the matters statedin section 134(5) of the Companies Act 2013 ("the Act") with respect to thepreparation of these standalone financial statements that give a true and fair view of thefinancial position financial performance changes in equity and cash flows of the Companyin accordance with the accounting principles generally accepted in India including theaccounting Standards specified under section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate implementationand maintenance of accounting policies; making judgments and estimates that are reasonableand prudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the financialstatement that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the standalone financial statements management isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing thecompany's financial reporting process.

Auditor's Responsibilities for the Audit of Standalone FinancialStatements

Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of thestandalone financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

• Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)(i) of the Companies Act 2013 we are also responsible for expressing ouropinion on whether the company has adequate internal financial controls system in placeand the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the standalone financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditions maycause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of thestandalone financial statements including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the standalonefinancial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication. Other Matter

Attention is invited to Note 1.19 (a) & (b) of standalone FinancialStatements the status of various ongoing projects recognition of expense and income andthe realizable value of the costs incurred are as per the judgment of Management of theCompany and certified by their technical personnel and being of technical nature havebeen relied upon by us.

Our opinion is not modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016("the Order") issued by the Central Government of India in terms of sub-section(11) of section 143 of the Companies Act 2013 we give in the "Annexure A"statement on the matters specified in paragraphs 3 and 4 of the Order to the extentapplicable.

2. With respect to the other matters to be included in the Auditor'sReport in accordance with the requirements of section 197(16) of the Act as amended:

In our opinion and to the best of our information and according to theexplanations given to us the remuneration paid by the Company to its directors during theyear is in accordance with the provisions of section 197 of the Act.

3. As required by Section 143(3) of the Act we report that:

(a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.

(b) In our opinion proper books of account as required by law havebeen kept by the Company so far as it appears from our examination of those books

(c) The Balance Sheet the Statement of Profit and Loss the Cash FlowStatement and statement of changes in equity dealt with by this Report are in agreementwith the books of account.

(d) In our opinion the aforesaid standalone financial statementscomply with the Accounting Standards specified under Section 133 of the Act read withRule 7 of the Companies (Accounts) Rules 2014.

(e) On the basis of the written representations received from thedirectors as on 31st March 2021 taken on record by the Board of Directors none of thedirectors is disqualified as on 31st March 2021 from being appointed as a director interms of Section 164 (2) of the Act.

(f) With respect to the adequacy of the internal financial controlsover financial reporting of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure B".

(g) With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on itsfinancial position in its financial statements - Refer Note 34 to the standalone financialstatements;

ii. The Company has made provision as required under the applicablelaw or accounting standards for material foreseeable losses if any on long-termcontracts including derivative contracts. Further the company did not have any derivativecontract.

iii. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company

ANNEXURE-A TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph - 1 under the heading of "Report onOther Legal and Regulatory Requirements" of our Report of even date.)

Based on the audit procedures performed for the purpose of reporting atrue and fair view on the standalone financial statements of the Company and taking intoconsideration the information and explanations given to us and the books of account andother records examined by us in the normal course of audit and to the best of ourknowledge and belief we report that: -

(i) (a) The company has maintained proper records showing fullparticulars including quantitative details and situation of property plant and equipment.

(b) As explained to us the Property Plant and Equipment have beenphysically verified by the management in accordance with a regular programme ofverification which in our opinion is reasonable having regard to the size of the Companyand nature of its assets. According to the information and explanations given to us nomaterial discrepancies were noticed on such physical verification.

(c) The title deeds of immovable properties included in Property Plant& Equipment of the company are held in the name of the Company except as stated inNote- 2 of the standalone financial statement.

(ii) The inventory of building materials stores and sparesrestaurant's provisions beverages etc. land and flats/shops/ houses etc. at majorlocations has been physically verified during the year by the management. In our opinionthe frequency of verification is reasonable. According to the information and explanationsgiven to us keeping in view the nature of the operations of the company inventory ofwork-in-progress cannot be physically verified. As explained to us there was no materialdiscrepancies noticed on physical verification of inventory.

(iii) The company has not granted loans secured or unsecured tocompanies firms limited liability partnerships or other parties covered in the registermaintained under section 189 of the Companies Act 2013. Therefore the provisions ofClause 3(iii) (a) (b) and (c) of the said Order are not applicable to the company.

(iv) In our opinion in respect of loans investments guarantees andsecurity provisions of section 185 and 186 of the Companies Act 2013 have been compliedwith.

(v) The National Company Law Tribunal (NCLT) vide its order dated 11thJuly 2019 has permitted to pay Rs.75.00 Lakh per month till the end of March 2020 andRs.100.00 Lakh per month till the end of March 2021. The Company has not been able tocomply with the said order in respect of repayment for the period February 2020 to March2021. Further company is not able to maintain statutory margin money as liquid assets inthe deposit redemption reserve till March 2021. However company has filed applicationfor seeking relief in respect of above defaults & further extensions in repaymentschedule and same is pending for hearing. The management is of the opinion that thecompany will get relief from the NCLT and there will not be any material impact on thestandalone financial statements. (Refer note 17.6 of the standalone financial statements)

Further in our opinion and according to the information andexplanations given to us the provision of sections 73 to 76 or any other relevantprovisions of Companies Act 2013 and the rules framed thereunder wherever applicablehave been complied with by the Company.

(vi) We have broadly reviewed the books of account maintained by thecompany pursuant to the Rules made by the Central Government for the maintenance of costrecords under section 148 of the Act and are of the opinion that prima facie theprescribed accounts and records have been made and maintained. However we have not norwe are required carried out detailed examination of such accounts and records.

(vii) (a) On the basis of our examination of the records of thecompany amounts deducted/accrued in the books of account in respect of undisputedstatutory dues including provident fund employees' state insurance income-taxsales-tax service tax duty of customs duty of excise value added tax cess and anyother statutory dues have not been regularly deposited during the year by the company withthe appropriate authorities and there have been delay in a large number of cases. We areinformed that the Company's operations during the year did not give rise to any liabilityfor custom duty and excise duty.

In our opinion no undisputed amounts payable in respect of providentfund income tax sales tax value added tax duty of customs service tax cess and othermaterial statutory dues were in arrears as at 31st March 2021 for a period of more thansix months from the date they became payable except the following dues:-

Name of the Statute Nature of Dues Amount (Rs. In Lakh) Period to which the amount relates Due Dates Date of Payment(s) Remarks
Haryana VAT Act. Value Added Tax (including interest) 668.33 Apr 14 - June 17 Monthly Unpaid -
Building and Other Construction Workers Act Labour Cess 627.43 Up to March 2021 Yearly Unpaid -
Income Tax Tax Deducted at Source (excluding Interest) 6.81 July 2020 & August 2020 Monthly 14/07/2021 -
Income Tax Interest on Tax Deducted at Source 44.29 June 2019 to September 2020 Monthly Unpaid -
Employees Provident Fund Act Provident Fund (excluding interest) 65.93 February 2020 to August 2020 Monthly Paid between 28/06/2021 to 30/06/2021
Employees Provident Fund Act Interest on Provident Fund 42.43 June 2019 to September 2020 Monthly Unpaid -

(b) On the basis of our examination of the books of accounts andrecords the details of the dues of income tax or sales tax or service tax or duty ofcustoms or duty of excise or value added tax or cess which have not been deposited onaccount of any dispute are as under: -

Name of the Statute Nature of dues Amount (Rs. In Lakh)* Period to which the amount relates Forum where dispute is pending
Income Tax Act Income tax 848.12 AY 1989-90 to 1997-98 & 2002-03 to 2006-07 Supreme Court
Income Tax Act Income tax 132.90 AY 2006-07 2012-13 to 2014-15 & 2018-19 Income Tax Appellate Tribunal (New Delhi)
Income Tax Act Income tax and Penalty 3340.14 AY 2004-05 to 2006-07 2013-14 2015-16 to 2016-17 & 2019-20 Commissioner of Income Tax (Appeals) New Delhi
UP Sales Tax Act Sales Tax 49.81 Assessment Years 2004-05 to 2006-07 Tribunal Commercial Tax Ghaziabad
MP Value Added Tax Act Sales Tax 5.00 Assessment Year 2008-09 Tribunal Commercial Tax Bhopal

*Figures after adjustment of amount paid under protest.

(viii) On the basis of our examination of the books of accounts andrecords and explanations given to us we are of the opinion that the Company has defaultedin the repayment of dues including interest to banks and financial institutions covered bythe Order during the year. While there were delays in repayment on different occasionsduring the year the relevant amounts have been paid to the respective banks and financialinstitutions during the year or loans have been restructured during the year. The defaultswhich have remained outstanding at the year-end are given below:

Particulars Amount of default as on Balance Sheet Date (Rs. In Lakh) Period of Default
Principal Interest Principal Interest
Due to Financial Institutions:
- IFCI Ltd.* 7939.76 2412.02 > 365 days > 365 days
- India Bulls Commercial Credit Ltd. 14985.00 3884.84 31 to 639 days 31 to 737 days
- Punjab National Bank 45.73 - 31 days N.A.

*Refer note 17.9 of standalone financial statements

(ix) In our opinion the Company did not raise any money by way ofinitial public offer or further public offer (including debt instruments) during the yearand term loans obtained for financing real estate projects in our opinion were used forthe real estate projects on an overall basis.

(x) In our opinion no material fraud by the company or on the Companyby its officers or employees has been noticed or reported during the course of our audit.

(xi) In our opinion and according to the information & explanationsgiven to us and based on our examination of the records of the company Managerialremuneration has been paid or provided in accordance with the requisite approvals mandatedby the provisions of section 197 read with schedule V to the Companies Act.

(xii) In our opinion the Company is not a Nidhi company. Henceparagraph 3(xii) of the Order is not applicable.

(xiii) Based on our examination of the records of the Company and inour opinion transactions with the related parties are in compliance with sections 177 and188 of the Act where applicable and details of such transactions have been disclosed inthe standalone financial statements as required by the applicable Indian AccountingStandards.

(xiv) Based on our examination of the records of the Company theCompany has not made any preferential allotment or private placement of shares or fully orpartly convertible debentures during the year.

(xv) Based on our examination of the records of the Company theCompany has not entered into non-cash transactions with directors or persons connectedwith him.

(xvi) Based on our examination of the records of the Company theCompany is not required to be registered under section 45-IA of the Reserve Bank of IndiaAct 1934.

ANNEXURE - B TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THESTANDALONE FINANCIAL STATEMENTS OF ANSAL HOUSING LIMITED

Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financialreporting of Ansal Housing Limited ("the Company") as of March 312021 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") and the Standards on Auditing issued by ICAIand deemed to be prescribed under section 143(10) of the Companies Act 2013 to theextent applicable to an audit of internal financial controls both applicable to an auditof Internal Financial Controls and both issued by the Institute of Chartered Accountantsof India. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgement including the assessment of therisks of material misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internal financialcontrols system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting Acompany's internal financial control over financial reporting is a process designed toprovide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that

(1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany;

(2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorisations of management and directors of thecompany; and

(3) provide reasonable assurance regarding prevention or timelydetection of unauthorised acquisition use or disposition of the company's assets thatcould have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over FinancialReporting

Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at March 31 2021 basedon the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.

Statement on Impact of Audit Qualifications (for audit report withmodified opinion) submitted along- with Annual Audited Financial Results - (Standalone)

Statement on Impact of Audit Qualifications for the Financial Yearended March 31 2021 [See Regulation 33 of the SEBI (LODR) (Amendment) Regulations 2016]

(Figures in Lakhs)

Sl. No. Particulars Audited Figures (as reported before adjusting for qualifications) Adjusted Figures (audited figures after adjusting for qualifications)
1. Turnover / Total income 14160.66 14160.66
2. Total Expenditure (including Tax) 18580.16 19161.46
3. Net Profit/(Loss) -4419.50 -5000.80
4. Earnings Per Share -7.44 -8.42
5. Total Assets 232199.59 232423.64
6. Total Liabilities 215198.16 216003.51
7. Net Worth 17001.43 16420.13
8. Any other financial item(s) (as felt appropriate by the management) N.A. N.A.
II Audit Qualification:
a. Details of Audit Qualification: Please refer Independent Auditor's Report on audit of Annual Standalone Financial Results and review of Quarterly Financial Results under the heading "Basis for Qualified Opinion on the Audited Annual Standalone Financial Results for the year ended 31st March 2021" as under: "IFCI Limited has revoked the restructuring and recalled repayment of outstanding dues amounting Rs.11296.77 Lakh (including default interest). The Company has not recognized the default interest cost amounting Rs.805.35 Lakh for the year ended 31st March 2021 considering covid-19 and other factors. The company is in discussion with the lender to resolve the matter in best possible manner. The Company's records indicate that had management recognized the default interest an amount of Rs.805.35 Lakh would have been required to provide for as finance cost. Accordingly Finance Cost Deferred tax assets and Loss after tax would have been increased by Rs.805.35 Lakh Rs.224.05 Lakh and Rs.581.30 Lakh respectively and shareholder's fund would have been reduced by Rs.581.30 Lakh for the year ending 31st March 2021"
b. Type of Audit Qualification : Qualified Opinion
c. Frequency of qualification: Appeared first time
d. For Audit Qualification(s) where the impact is quantified by the auditor Management's Views: It has been a very tough time for the Real Estate industries considering various regulatory changes during the past few years which has got worse than ever before due to the spread of the COVID 19 pandemic. There is a difference of recognition of interest cost amounting to Rs. 805.35 Lakhs as quantified by the auditors with regard to outstanding dues amounting Rs. 11296.77 Lakhs as recalled by the lender namely IFCI Limited. The management is in negotiations with the lender in this regard and has denied the revocation during COVID affected period. The management is very much hopeful that the request will be considered by the lender particularly when we are in proactive discussion with IFCI since Mar'20 to work out the resolution on this matter.
e. For Audit Qualification(s) where the impact is not quantified by the auditor: N.A.
(i) Management's estimation on the impact of audit qualification: N.A.
(ii) If management is unable to estimate the impact reasons for the same: N.A.
(iii) Auditors' Comments on (i) or (ii) above: N.A.

III Signatories:

• CEO Mr. Kushagr Ansal
• CFO Mr. Tarun Kathuria
• Audit Committee Chairman Mr. S.L. Kapur
• Statutory Auditor M/s. Dewan P.N. Chopra & Co. Chartered Accountants
Firm Registration No.000472N Mr. Sandeep Dahiya Partner
M.No. 505371

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