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A N N U A L R E P O R T 2 0 0 6 - 2 0 0 7

2T h e i m a g e s h o w n o n t h e c o v e r i s o f a t y p i c a l G o l f Vi l l a a t S u s h a n t G o l f C i t y, L u c k n o w d e s i g n e d b y K T Y G o f T h a i l a n d .

V I S I O NTo fulfill growing aspirations ofour customers by bui ld ingworld-class real estate solutionsand redefining lifestyle standards.

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The success and prestige of Ansal API began as the dream of one man

that later transformed into the dream of many. We endeavor to open new

vistas in the field of realty that far exceed the expectations of our patrons.

All geared up for the future, we have the key factors for success necessary

to withstand the winds of change. Recently Ansal API initiated ‘Green

Power’ revolution and became the first in the realty sector to use non-

conventional energy sources like solar power for lighting and heating

purposes, and bio-diesel for generators. With the aim of further diversification

to reach other local and regional markets, we have a bouquet of SEZ

projects. We build and maintain trust, integrity and transparency in every

project we undertake, to extend further our credibility across the global

market. This is demonstrated through our association with renowned

groups like Deeyar, and UEM, Malaysia’s largest conglomerate. These

liaisons will bring more advanced technology and engineering acumen

to the company. With our well-recognized market presence with a strong

portfolio in lifestyle, hospitality and entertainment segments, you can

keep expecting more from us. Needless to say, we will continue to strive

and accomplish our dreams and goals to usher in a resplendent future.

C H A I R M A N ’ S M E S S A G E

Mr. Sushil Ansal (Chairman) & Mr. Pranav Ansal (MD & Vice Chairman)

Sushil AnsalChairman, Ansal API

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Board of Directors & Company Informations 5

Notice of Annual General Meeting 6-15

Directors’Report 16 -28

Corporate Governance Report 29-48

Management Discussion & Analysis 49-54

Auditors’ Report 55-58

Balance Sheet 59

Profit & Loss Account 62

Cash Flow Statement 65

Schedules 68-82

Balance Sheet Abstract & Business Profile 83

Consolidated Accounts 84-107

Information of Subsidiary Companies as per 108-110approval u/s 212 (8) of Companies Act, 1956

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BOARD OF DIRECTORSMr. Sushil Ansal ChairmanMr. Anil Kumar Whole Time Director & Chief Executive OfficerMr. Pranav Ansal DirectorMr. D.N. Davar DirectorDr. R. C. Vaish DirectorACM O. P. Mehra (Retd.) DirectorMr. Rahul C. Kirloskar DirectorMr. Lalit Bhasin DirectorMr. P. R. Khanna Director

AUDIT COMMITTEE MEMBERSMr. D.N. Davar ChairmanDr. R. C. Vaish Vice-ChairmanACM O. P. Mehra (Retd.) MemberMr. P. R. Khanna Member

SR. VICE PRESIDENT (CORP. AFFAIRS)& COMPANY SECRETARYMr. Amitav Ganguly

CHIEF FINANCIAL OFFICERMr. Anup Kapoor

STATUTORY AUDITORSM/s Khanna & AnnadhanamChartered AccountantsNew Delhi

FINANCIAL INSTITUTIONSHousing Development Finance Corporation LimitedInfrastructure Leasing & Financial Services Limited

BANKERSPunjab National BankUCO BankThe Jammu & Kashmir Bank Ltd.Oriental Bank of CommerceSyndicate BankYes Bank Ltd.

REGISTERED OFFICE115, Ansal Bhawan16, Kasturba Gandhi MargNew Delhi-110001

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NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the 40th Annual General Meeting of the Company will be held on Saturday, the 22ndday of September, 2007 at 11.00 A.M. at Sri Sathya Sai International Centre & School, Lodhi Road, New Delhi-110003 to transact the following business :

ORDINARY BUSINESS

1. To receive, consider and adopt the Audited Balance Sheet as at 31st March, 2007 and the Profit & Loss Accounttogether with the Consolidated Financial Statement of Accounts for the year ended on that date, together with theDirectors’ Report and Auditors’ Report thereon.

2. To confirm Interim Dividend already declared and paid, and, to declare Final Dividend on Equity Shares.3. To appoint a Director in place of Mr. D.N. Davar who retires by rotation and, being eligible, offers himself for re-

appointment.4. To appoint a Director in place of Mr. Rahul C. Kirloskar who retires by rotation and, being eligible, offers himself for

re-appointment.5. To appoint a Director in place of Mr. P.R. Khanna, who retires by rotation and, being eligible, offers himself for re-

appointment.6. To appoint Statutory Auditors of the Company and to fix their remuneration.

SPECIAL BUSINESS

7. To approve and authorize issue of securities on public issue / rights / qualified institutions placement basis/ any other basis.

To consider and if thought fit, to pass with or without modification/s, the following resolution as a SPECIAL RESOLUTION:

“RESOLVED as a Special Resolution that in accordance with the provisions of Section 81(1A) and other applicableprovisions, if any, of the Companies Act, 1956, (including any amendment to or re-enactment thereof), the provisions ofMemorandum and Articles of Association of the Company, and the provisions of any other applicable law/s includingForeign Exchange Management Act, 1999, and, subject to the approval of the Government of India, Reserve Bank of India(“RBI”), Securities and Exchange Board of India (“SEBI”), Foreign Investment Promotion Board or any other regulatoryauthority/institutions, as may be necessary, and, subject also to the consents, permissions and sanctions of such otherappropriate authorities, institutions or bodies, whether in India and/or abroad, as may be necessary; consent, authorityand approval of the Company be and is hereby accorded to the Board of Directors of the Company (hereinafter referred toas “the Board” which term shall be deemed to include any Committee to which the Board may or have delegated all or anyof its powers) to offer, issue and allot on rights basis and/or public issue basis and/or private placement basis and/or byway of preferential allotment and/or any other basis, through Green Shoe Option and/or any other option/method, equityshares / preference shares / debentures / bonds / warrants / securities, fully or partly convertible into equity / preferenceshares / securities linked to equity / preference shares, the right of conversion or to receive securities, at the option of theCompany and/or the holders thereof, or otherwise, American Depository Receipt/s (“ADR”) / Global Depository Receipt/s(“GDR”) / Foreign Currency Convertible Bond/s (“FCCB”), in Indian currency and/or foreign currency, in India and/orabroad, (hereinafter collectively referred to as “the Securities”), as the Company may be advised, to the shareholders /beneficial owners of shares of the Company, public, any other person/s including Foreign Institutional Investors (FIIs),Non-Resident Indians (NRIs), Mutual Funds, Trusts or any other non residents, promoters, promoter group, personsacting in concert, their relatives, associates, associate companies, their shareholders, trusts, societies, mutual funds,financial institutions, banks, companies, firms, body corporates and employees of the Company or subsidiary/ies orassociates/associate companies, as the Board may in its absolute discretion decide (hereinafter collectively referred to as“the Investors”), whether or not the Investors are members of the Company, to all or any of them, jointly or severally, suchoffer, issue and allotment to be made at such time/s, in such tranch or tranches, at such price/s, at a discount or premium,and in such manner and form including in physical/demat, and on such terms and conditions as the Board may in itsabsolute discretion think fit and proper and in accordance with the laws, rules, regulations and guidelines prevailing in thisregard, provided that, the aggregate value of all securities issued and allotted or to be issued and allotted on conversionand/or on exercise of option by the Company and/or Investors, shall not exceed Rs. 5000 crores.

RESOLVED FURTHER THAT within the aforesaid limit, approval of the Company be and is hereby given, to issue andallot the securities, through Qualified Institutions Placement (“QIP”) basis to Qualified Institutional Buyers (“QIB”) pursuantto Chapter XIIIA of SEBI (Disclosure and Investor Protection) Guidelines, 2000 so that the securities so issued andallotted through such basis shall not exceed 5 times the net worth of the Company as at 31.03.2007, and, that theRelevant Date for the purpose of pricing of issue of securities, issued and allotted through QIP basis to QIB is August 23,2007, being 30 days prior to September 22, 2007 (i.e., the date on which this Annual General Meeting of the Company inrelation to the proposed issue under Section 81(1A) of the Companies Act 1956, is held).

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RESOLVED FURTHER THAT the Board be and is hereby authorized to issue and allot such number of shares as may berequired to be issued and allotted upon conversion of any Securities and/or on exercise of option by the Company and/orInvestors or as may be necessary in accordance with the terms of the above offerings and/or issues, subject to theprovisions of applicale law/s.

RESOLVED FURTHER THAT in the event of the Company making a bonus issue of shares or rights issue of shares/debentures prior to allotment of equity/preference shares on exercise of rights attached to the Securities/conversion ofSecurities, the holders of such Securities shall be entitled to all bonus shares or right shares/debentures, in such proportion/s as may be decided by the Board, at any time after the date of issue of the Securities with rights attached or convertiblesecurities, subject to such terms and conditions as the Board may deem fit and proper, and also subject to the provisionsof applicale law/s.

RESOLVED FURTHER THAT the Company and/or any agency or body authorized by the Company may issue GDR/s/ADR/s and/or other form of securities mentioned herein above representing the underlying Equity Shares issued by theCompany in registered or bearer form with such features and attributes as are prevalent in capital markets for instrumentsof this nature and to provide for the tradeability or free transferability thereof as per the prevailing practices and regulationsin the capital markets.

RESOLVED FURTHER THAT subject to necessary approval, consent, permission, the Board be and is hereby authorized toconvert the GDR/s/FCCB/s, into ADR/ADS and to list them at NASDAQ/NYSE or in any other Overseas Stock Exchange/s.

RESOLVED FURTHER THAT the shares so issued and allotted shall rank pari passu in all respects with the existingshares of the Company.

RESOLVED FURTHER THAT for the purpose of giving effect to the above, the Board be and is hereby authorised toagree to and to make and accept all such conditions, modifications and alterations stipulated by any relevant authoritieswhile according appovals or consents to the issue, as may be required/considered necessary, proper or expedient, and totake all such actions/steps as may be necessary, desirable or expedient, including to take further consent/authority/approval of members through postal ballot/s, if required/necessary, under any law/s or otherwise, and, to resolve andsettle all questions and difficulties that may arise in the proposed issues and allotments of the Securities, and, to do allacts, deeds, matters and things which are incidental and consequential, as the Board may at its absolute discretion deemnecessary or desirable for such purposes, including, if necessary, creation of such mortgages and/or charges in respectof the Securities on the whole or any part of the undertaking/s or uncalled capital of the Company, if any, under Section293(1)(a) and other applicable provisions of the Companies Act, 1956, and, to execute such documents or writings asBoard may consider necessary or proper or incidental to give effect to this Resolution.”

8. To approve and authorize for increasing the limit of 24% for holding by registered FII up to Sectoral Cap /Statutory ceilings.

To consider and if thought fit, to pass with or without modification/s, the following resolution as a SPECIAL RESOLUTION:

“RESOLVED as a Special Resolution that in accordance with Regulation 5(2) of Foreign Exchange Management (Transferor Issue of Security by a Person resident outside India) Regulations, 2000 read with Schedule 2 thereof regarding purchase/ sale of shares/ convertible debentures of an Indian Company by a registered Foreign Institutional Investors (FIIs) underPortfolio Investment Scheme (PIS) and other applicable provisions, if any, of Foreign Exchange Management Act, 1999(including any amendment to or re-enactment thereof), the provisions of Memorandum and Articles of Association of theCompany, and the provisions of any other applicable law/s, and, subject to the approval of the Government of India,Reserve Bank of India (“RBI”), Securities and Exchange Board of India (“SEBI”), Foreign Investment Promotion Board orany other regulatory authority/institutions, as may be necessary, and, subject also to the consents, permissions andsanctions of such other appropriate authorities, institutions or bodies, whether in India and/or abroad, as may be necessary,and also subject to such policies , notifications , clarifications, regulatory frame work and the like of the Government asmay be in force from time to time; consent, authority and approval of the Company be and is hereby accorded to increasethe maximum limit of holding, by registered FIIs, of 24% of the paid up equity capital of the Company up to the Sectoralcap / statutory ceilings, as applicable at the relevant time.

RESOLVED FURTHER THAT for the purpose of giving effect to the above, the Board of Directors of the Company (hereinafterreferred to as “the Board” which term shall be deemed to include any Committee to which the Board may or have delegatedall or any of its powers) be and is hereby authorised to agree to and to make and accept all such conditions, modificationsand alterations stipulated by any relevant authorities while according appovals or consents, as may be required/considerednecessary, proper or expedient, and to take all such actions/steps as may be necessary, desirable or expedient, includingto take further consent/authority/approval of members through postal ballot/s, if required/necessary, under any law/s orotherwise, and, to resolve and settle all questions and difficulties that may arise, and, to do all acts, deeds, matters andthings which are incidental and consequential, as the Board may at its absolute discretion deem necessary or desirablefor such purposes and, to execute such documents or writings as the Board may consider necessary or proper or incidentalto give effect to this Resolution.”

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9. To approve increase in the Authorized Share Capital of the Company from Rs. 110 crores to Rs. 150 crores.

To consider and if thought fit, to pass with or without modification(s), the following resolution as an ORDINARYRESOLUTION:

“RESOLVED as an Ordinary Resolution that pursuant to the provisions of Section 94 of the Companies Act, 1956, andother applicable provisions, if any, and Article No 59 and other applicable articles of the Articles of Association of theCompany, consent of the Company be and is hereby accorded to increase the Authorized Share Capital of the Companyfrom Rs. 110,00,00,000/- (Rupees One Hundred Ten Crore only) {divided into 16,00,00,000 (Sixteen Crore) Equity Sharesof Rs. 5/- (Rupees Five) each and 30,00,000 (Thirty Lacs) Preference Shares of Rs. 100/- (Rupees Hundred) each} to Rs.150,00,00,000/- (Rupees One Hundred Fifty Crores only) {divided into 24,00,00,000 (Twenty Four Crore) Equity Shares ofRs. 5/- (Rupees Five) each and 30,00,000 (Thirty Lacs) Preference Shares of Rs. 100/- (Rupees Hundred) each} by wayof addition of 8,00,00,000 (Eight Crore) Equity Shares of Rs. 5/- (Rupees Five) each ranking pari-passu in all respects tothe existing Equity Shares of the Company.

RESOLVED FURTHER THAT Clause V of the Memorandum of Association of the Company be substituted with thefollowing new Clause:

V. The Authorized Share Capital of the Company is Rs. 150,00,00,000/- (Rupees One Hundred Fifty Crores only)divided into 24,00,00,000 (Twenty Four Crore) Equity Shares of Rs. 5/- (Rupees Five) each and 30,00,000(Thirty Lacs) Preference Shares of Rs. 100/- (Rupees Hundred) each with rights, privileges and conditionsattached thereto as provided by the regulations of the Company for the time being in force and with power toincrease and reduce the Capital of the Company and to divide the shares in the Capital for the time being intoseveral classes and to attach thereto respectively such preferential rights, privileges or conditions, as may bedetermined by or in accordance with the regulations of the Company and to vary, modify or abrogate any suchrights, privileges or conditions in such manner as for the time being be provided by the regulations of theCompany and in adherence to all the prevailing laws.

RESOLVED FURTHER THAT the Board of Directors of the Company or its Committee, to which the Board may delegateits powers, from time to time, be and are hereby authorized to do all the necessary acts/ deeds/ things and to take all suchconsequential and incidental steps as may be required to give effect to this Resolution.”

10. Authorization to Board for creation of charge etc. in terms of Section 293{1}{a} of the Companies Act, 1956.

To consider and, if thought fit, to pass with or without modification(s), the following resolution as an ORDINARYRESOLUTION:

“RESOLVED THAT, in superssession of the Ordinary Resolution passed by the Members at their Annual General Meetingheld on September 28, 2006, and pursuant to the provisions of section 293{1}{a} of the Companies Act, 1956, as may beamended from time to time, and other applicable provisions, if any, of the Companies Act, 1956, and the Articles ofAssociation of the Company; approval and consent of the Company be and is hereby accorded to the Board of Directorsof the Company to charge / mortgage / create security/encumber in respect of the whole or substantially the whole of theundertaking/s of the Company including all or any of its moveable or immoveable property{ies}, both present and future,from time to time, on behalf of the Company, for securing the loan(s) up to Rs. 3000 crores availed / to be availed by theCompany, in any form or manner or otherwise, in one or more tranches, from any bank/ financial institution/other lenders,on such terms and conditions, as may be decided by the Board of Directors, from time to time.

RESOLVED FURTHER THAT the Board of Directors of the Company or its Committee/s to which the Board may delegateits powers, from time to time, be and are hereby authorized and empowered, on behalf of the Company, to do or causeto be done all such acts, deeds, things and matters, as may be necessary, and, also incidental thereto to give effect to thisResolution which include, to finalize, sign and/or execute any document(s)/ agreement(s), other deeds or writings, andaffixing the common seal of the Company on such paper/s, as may be necessary, as per the provisions of the Articles ofAssociation of the Company”.

11. Increasing the borrowing powers of the Board in terms of Section 293{1}{d} of the Companies Act, 1956,

To consider and, if thought fit, to pass with or without modification(s), the following resolution as an ORDINARYRESOLUTION:

“RESOLVED THAT, in superssession of the Ordinary Resolution passed by the members at their Annual General Meetingheld on the September 28, 2006 and pursuant to the provisions of section 293{1}{d} of the Companies Act, 1956, as may

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be amended from time to time, and other applicable provisions, if any, of the Companies Act, 1956, and the Articles ofAssociation of the Company ; approval and consent of the Company be and is hereby accorded to the Board of Directorsof the Company, to borrow money(s), from time to time, for and on behalf of the Company, from any bank/ financialinstitution/lenders, in any form or manner or otherwise, in one or more tranches, whether as unsecured or secured, onsuch terms and conditions as may be decided by the Board of Directors, notwithstanding that the moneys to be borrowedtogether with money(s) already borrowed by the Company {apart from the temporary loans obtained / to be obtained fromthe Company’s bankers in the ordinary course of business} exceed the aggregate of paid up share capital and freereserves of the Company, { i.e. reserves not set apart for any specific purpose}, provided that the total amount of theborrowings by the Board of Directors, at any time, shall not exceed the limit of Rs. 3000 crores over and above theaggregate of paid up share capital and free reserves of the Company.

RESOLVED FURTHER THAT the Board of Directors of the Company or its Committee/s to which the Board may delegateits powers, from time to time, be and are hereby authorized and empowered, on behalf of the Company, to do or causeto be done all such acts, deeds, things and matters, as may be necessary, and, also incidental thereto to give effect to thisResolution which include, to finalize, sign and/or execute any document(s)/ agreement(s), other deeds or writings, andaffixing the common seal of the Company on such paper/s, as may be necessary, as per the provisions of the Articles ofAssociation of the Company”.

12. To approve the increase in remuneration of Mr. Anil Kumar, Whole Time Director & CEO and revise hisgrade.

To consider and, if thought fit, to pass with or without modification(s), the following resolution as an ORDINARYRESOLUTION:

“RESOLVED THAT pursuant to the provisions of Sections 198, 309 and 310 read with Schedule-XIII of the CompaniesAct, 1956, as amended from time to time, and other applicable provisions, if any, of the Companies Act, 1956, andprovisions of Articles of Association of the Company, the salary grade of Mr. Anil Kumar, Whole Time Director & CEO,which has been revised and extended, as follows, by the Board of Directors, on the basis of the recommendation madeby the Compensation/ Remuneration Committee at their respective Meetings held on August 24, 2007, in terms ofauthorization conferred on them by the Members vide the Ordinary Resolution passed at Annual General Meeting held onthe 26th September, 2005, be and is hereby approved with effect from 1st January 2008:-

Existing salary grade Revised and extended salary gradew.e.f. 1-1-2008

Rs. 1,20,000-8500-3,32,500 Rs. 1,20,000-8500-3,32,500-20,000-8,32,500

RESOLVED FURTHER THAT pursuant to the provisions of Sections 198, 309 and 310 read with Schedule-XIII of theCompanies Act, 1956, as amended from time to time, and other applicable provisions, if any, of the Companies Act, 1956,and provisions of Articles of Association of the Company, the following increased remuneration of Mr. Anil Kumar, WholeTime Director & CEO, by way of revision w.e.f. 01.01.2008, which is within the limits of Schedule XIII of the Companies Act,1956 and in accordance with the revised and extended grade, and which also has been approved by the Board of Directorsfollowing the approval from the Compensation/ Remuneration Committee recorded at their respective Meetings held onAugust 24, 2007, in terms of authorization conferred on them by the Members vide the Ordinary Resolution passed atAnnual General Meeting held on the 26th September, 2005, be and is hereby confirmed and approved:-

Revised remuneration of Mr. Anil Kumar, Whole Time Director & CEO payable w.e.f. 1st January 2008.

Salary & Perquisites

Sl. Particulars Amount (Rupees)

No. Existing Revised w.e.f. 01.01.20081. Basic Salary Rs. 3,24,000/- p.m. Rs.5,32,500/- p.m.

(Rs.1,20,000-8500-3,32,500) (Rs. 1,20,000-8500-3,32,500-20,000-8,32,500)

2. House Rent Allowance / Rent Rs. 30,000/- p.m. No ChangeFree Accommodation upto

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RESOLVED FURTHER THAT Mr. Anil Kumar, Whole Time Director & CEO shall also be entitled to membership of clubssubject to a maximum of two clubs.

RESOLVED FURTHER THAT other terms and conditions of appointment and remuneration of Mr. Anil Kumar, WholeTime Director & CEO shall remain the same and unchanged.”

Regd. Office: By Order of the Board115, Ansal Bhawan, for Ansal Properties & Infrastructure Ltd.16, Kasturba Gandhi Marg,New Delhi - 110 001

( Amitav Ganguly )Dated: 24th August, 2007 Sr. Vice President (Corp. Affairs) & Co. Secretary

NOTES:

a) A Member entitled to attend and vote is entitled to appoint a proxy to attend and vote instead of himself/herself andthe proxy need not be a member. Proxies in order to be effective must be received at the Registered Office of theCompany not less than forty-eight hours before the Annual General Meeting.

b) The relevant Explanatory Statement pursuant to Section 173(2) of the Companies Act, 1956, in regard to SpecialBusiness set out in item Nos. 7 to 12 is annexed herewith.

c) The Register of Beneficial Owners, Register of Members and the Share Transfer Books of the Company shall remainclosed from Thursday, September 13, 2007, to Saturday, September 22, 2007 (both days inclusive).

d) i) Dividend, if declared, will be payable to those members whose names appear in the Register of Members/Beneficial Owners as will be provided by the Depository (i.e. National Securities Depositories Ltd. (NSDL) andCentral Depository Services (India) Ltd. (CDSL)) at the close of business hours on the 22nd September, 2007,for this purpose.

ii) No tax at source shall be deducted from the Dividend amount payable to the members. Tax will be paid by theCompany at the flat rate of 15% and surcharge there on @ 10% of tax and cess @ 3% of tax and surcharge(aggregating to 16.995%).

e) Members are already aware that the Company has appointed M/s. Intime Spectrum Registry Limited, A-40, NarainaIndustrial Area, Phase-II, Near Batra Banquet Hall, New Delhi-110028, as Share Transfer Agent (STA), both forelectronic connectivity and Share Transfer work w.e.f. 30th January, 2003. Members can make correspondencewith STA for Share Transfer requests; dividend and change of address related queries.To avoid misuse of Dividend Warrants/ Cheques, members are requested to send details of Bank / its address andAccount number, for printing on Dividend Warrants/Cheques. This should be sent to reach the Registered Office ofthe Company before the Annual General Meeting.

f) Members having multiple accounts in identical names or joint accounts in the same order are requested to intimatethe Company / STA, the ledger folio of such accounts to enable the Company to consolidate all such shareholdingsinto one account.

g) Members are hereby informed that pursuant to Section 205A (5) of the Companies Act, 1956, (the Act) the Companyis obliged to transfer any money lying in the Unpaid Dividend Account, which remains unpaid or unclaimed for aperiod of seven years from the date of such transfer to the unpaid Dividend Account, to the credit of InvestorsEducation and Protection Fund established by the Central Government under sub section (1) of Section 205C of theAct. No claim shall lie against the Company or the Fund in respect of individual amounts of dividends remainingunclaimed and unpaid for a period of seven years and transferred to the Fund, as aforesaid.In accordance with above provisions, unclaimed / unpaid Dividend amount for the years ended 31st March, 1995,31st March, 1996, 31st March, 1997, 31st March, 1998 & 31st March, 1999 have been transferred to InvestorEducation and Protection Fund. Dividend for the year ended 31st March, 2000, declared in the 33rd Annual GeneralMeeting of the Company held on the 25th September, 2000, shall be transferred to the said Fund within 30 days ofNovember 10, 2007 as per aforesaid provisions.

h) Pursuant to Section 205A of the Companies Act, 1956 all unclaimed dividends up to the dividend for the periodended 31st March, 1994 have been transferred to the General Revenue Account of the Central Government. Anyclaim for payment of such unclaimed dividend should be made by an application in the prescribed form to theRegistrar of Companies, NCT of Delhi & Haryana, New Delhi, at the address: Paryavaran Bhawan, IInd Floor,CGO Complex, Lodhi Road, New Delhi - 110003.

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i) Those Members who have not so far encashed their Dividend Warrants/cheques for the Accounting Year ended 31stMarch, 2000, or any subsequent years may immediately approach the Company / STA for revalidation of UnclaimedDividend Warrants/cheques or for fresh Warrants/ cheques. Dividend for the year ended 31st March, 2000, shall betransferred to Investor Education and Protection Fund, very shortly, as stated in note (g) above.

j) The Company is registered with the following depositaries for dematerialization of its Equity Shares:-i) National Securities Depositories Ltd. (NSDL) at Trade World, 4th Floor, Kamala Mills Compound, Senapati

Bapat Marg, Lower Parel, Mumbai- 400013ii) Central Depository Services (India) Ltd. (CDSL), at Phiroze Jeejeebhoy Towers, 28th Floor, Dalal Street, Mumbai-

400001

The Registration no. granted by NSDL & CDSL is ISIN INE-436A01026.k) As per the provisions of Section 109A of the Companies Act, 1956, facility for making nominations is available to the

Members, in respect of Equity Shares, held by them. Requests for nomination facility should be made in the prescribedform (Form 2B) a copy of which can be obtained on request from the Registered Office of the Company.

l) Members desiring any information/clarification on the Annual Accounts are requested to write to the Company at itsRegistered Office at least 15 days before the date of Annual General Meeting so that the same may be attended to,well in advance.

m) The relevant information of Directors, by way of brief resume, seeking reappointment/appointment under items no.3to 5 of the notice as required under Clause – 49 of the Listing Agreement entered with the Stock Exchanges is givenherein below:

Name of the Director/s

Date of Birth

First date of appointment

Expertise in specificfunctional areas

Qualification/s

Mr. D.N. Davar

08.08.1934

16.08.1995

Mr. Davar is an eminent professionalwho had started his career fromPunjab National Bank as SuperiorService Officer and left the servicesof PNB as Sr. Manager – In-chargeof the Loan Department in 1968.Thereafter, he Joined the IFCI, awell known financial institution, asSr. Manager in 1968 and retired asits Executive Chairman in 1992. Hewas also on the Board andExecutive Committee of IDBI, IRBI,other top financial institutions, fornearly 8 years and also on the Boardof LIC Housing Finance Co. He hadbeen part time Consultant to theWorld Bank, UNIDO and KFW.Presently, he is on the Board ofseveral reputed companies, traininginstitutions and non-governmental(social) organizations.

B. Com (Pass)·M.A. (Economics)·Certified Associate of IndianInstitute of BankersFellow of EconomicsDevelopment Institute of theWorld Bank

Mr. Rahul C. Kirloskar

07.07.1963

11.02.1992

Mr. Kirloskar, a renownedindustrialist, is associated withKirloskar Group of Companies formore than fifteen years at verysenior levels in different capacities.Being Director – Export, he makesall efforts to enhance the productsof Kirloskar Group in highlycompetitive International markets.On having extensively participatedin Total Quality Management (TQM)systems in international forums, hehas given focus in this critical area.He has also given a lot of thrust forreducing costs and thereby furtherimprove the profitability and makethe Kirloskar products morecompetitive. He is also involved asthe Chairman of CII, at Pune region.·

B.S.C.(Mechanical Engineer)

Mr. P. R. Khanna

02.08.1933

30.08.2003

Mr. Khanna, a highly respectedprofessional, has vastexperience in the areas offinancial management andauditing. He was Director ofState Bank of India and alsoTrustee of UTI prior to re-organization of UTI. He was theCentral Council member of theInstitute of CharteredAccountants of India (ICAI).

Chartered Accountant

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Name ofCompanies inwhich Directorshipis held

1. Sandhar Technologies Limited2. Sandhar Infosystems Limited3. OCL India Limited4. HEG Limited5. Indo – Continental Hotels &

Resorts Limited6. Hero Honda Finlease Limited7. Jai Prakash Power Ventures

Limited8. Jai Prakash Associates

Limited9. Adyar Gate Hotels Limited10.Jai Prakash Hydro Power

Limited11. Rajasthan Spinning & Weaving

Limited12. Maral Overseas Limited13. Ahlcon Parenterals (India) Ltd.14. Titagarh Wagon Limited15. S.P. Wahi Technology &

Management ConsultantsPrivate Limited

16. Sandhar Steady Stream TollingPrivate Limited

17. ITIDA CAD Services PrivateLimited

1. Kirloskar Pneumatic CompanyLimited

2. Kirloskar Brothers Limited3. Quadrant Communications

Limited4. Kirloskar Oil Engines Limited5. Kirloskar Services Private

Limited6. Alpak Investments Private

Limited7. Pratibha Communications

Private Limited8. Kirloskar Kenya Limited, Kenya9. Kirloskar Drilling Company

Limited, Kenya10. Kirloskar Services Kenya

Limited, Kenya11. Kirsons Tradings (S.A.) (Pte)

Limited.

1. Indag Rubber Limited2. Uniproducts India Limited3. DCM Shri Ram Industries

Limited4. Control & Switchgears

Contractors Limited5. UTI Assets Management

Company Private Limited6. Nabha Development Initiative

(Registered u/s 25 of theCompanies Act, 1956)

13

EXPLANATORY STATEMENT AS REQUIRED U/S. 173(2) OF THE COMPANIES ACT, 1956.

Item No. 7In view of the expansion and diversification of the business of the Company, by way of development of residential /integrated townships, commercial complexes, shopping malls and other real estate activities, at various cities / towns, theBoard of Directors of your Company considers it advisable to raise funds through further issue of capital by way of equityshares / preference shares / debentures / bonds / warrants / securities, fully / partly convertible into equity / preferenceshares and/or securities linked to equity / preference shares, ADRs / GDRs / FCCBs, on rights basis / public issue basis/ any other basis, keeping in view the applicable law/s.Your Board also considers it advisable to have authority from the shareholders to raise funds through Qualified InstitutionsPlacement (“QIP”) basis pursuant to Chapter XIIIA of SEBI (Disclosure and Investor Protection) Guidelines, 2000. Thespecified securities which may be issued shall not exceed 5 times the net worth of the Company. As per the said ChapterXIIIA, issue of specified securities on a QIP basis to Qualified Institutional Buyers can be made at a price not less than thehigher of the following:(i) The average of the weekly high and low of the closing prices of the related shares quoted on the stock exchange

during the six months preceding the “Relevant Date”; or(ii) The average of the weekly high and low of the closing prices of the related shares quoted on a stock exchange

during the two weeks preceding the “Relevant Date”.

The Relevant Date for the purpose of pricing of issue of securities, issued through QIP basis is August 23, 2007, being 30days prior to September 22, 2007 (i.e. the date on which this Annual General Meeting of the Company in relation to theproposed issue under Section 81(1A) of the Companies Act 1956, is to be held).

For making any further issue of shares to any person/s other than existing Equity Shareholders of the Company, approvalof Shareholders is required to be obtained by way of passing a Special Resolution, in pursuance to the provisions ofsection 81 (1A) of the Companies Act, 1956 (the Act). Therefore, the Board of your Company has recommended theResolution contained in Item No. 7 to be passed by the shareholders, so as to enable it to make further issue of shares asdetailed in the said resolution up to the maximum extent of Rs. 5000 crores which will include issue on QIP basis.

The shareholders at their Extra Ordinary General Meeting held on the 18th November, 2006 had passed a special resolutionfor the issue of securities to the extent of Rs. 2500 crores. Against this resolution your Company had issued and allottedEquity Shares amounting to Rs 681.75 crores in December 2006. However, due to increasing requirement of funds thisresolution at item no. 7 has been proposed.

The said special resolution is only an enabling one seeking authority to the Board to raise funds from time to time as maybe required.

Your Directors recommend passing of the Resolution contained in Item No. 7 as a Special Resolution.

The Memorandum and Articles of Association of the Company shall be available for inspection by the shareholders duringoffice hours on all working days at the Registered Office of the Company and at the Annual General Meeting.

None of the Directors is interested or concerned in the proposed resolution except to the extent that the Equity Shares asmay be offered or allotted to them or to their relatives or the company/ies in which they or their relatives may be shareholdersor Directors.

Item No. 8As per the provision of Regulation 5(2) of Foreign Exchange Management (Transfer or Issue of Security by a PersonResident Outside India) Regulations, 2000 read with Schedule 2 thereof regarding purchase / sale of shares/ convertibledebentures of an Indian Company by a registered Foreign Institutional Investors (FIIs) under Portfolio Investment Scheme(PIS), the aggregate of holding of the share and / or convertible debentures of an Indian company by the registered FIIsshall not exceed 24% of the paid up equity capital and / or paid up value of each series of convertible debentures.However, in view of the increasing interest of the registered FIIs in the shares of your Company in the stock exchanges,the Board of your Company considers it advisable to increase the said limit of 24% upto Sectoral cap / statutory ceilings,as may be applicable at the relevant time. For increasing the said limit, approval of the Shareholders is required to be

14

obtained, by way of passing a Special Resolution, in pursuance to the of provisions of above referred schedule. The Boardof your Company has also approved the increase as is required under the said schedule. However, the increase shall beeffected only in terms of the policies and procedures of the Government, prevailing from time to time, in this regard, and,if necessary with the approval/s of the Government. This will be an enabling resolution.It is recommended to pass the Resolution contained in item No. 8 as a Special Resolution as this will be in the interest ofyour Company.None of the Directors is interested or concerned in the proposed Resolution.

Item No. 9The Present Authorised Share Capital of your Company is at Rs. 110,00,00,000/- (Rupees One Hundred Ten Crore only){divided into 16,00,00,000 (Sixteen Crore) Equity Shares of Rs. 5/- (Rupees Five) each and 30,00,000 (Thirty Lacs)Preference Shares of Rs. 100/- (Rupees Hundred) each}.Keeping in view the future requirements of funds for expansion and diversification, the Board of Directors have decided,subject to the approval of the shareholders, to increase the Authorized Share Capital of the Company from its present Rs.110,00,00,000/- (Rupees One Hundred Ten Crore only) to Rs. 150,00,00,000/- (Rupees One Hundred Fifty Crores only).The proposed increase shall be met by way of addition of 8,00,00,000 (Eight Crore) Equity Shares of Rs. 5/- (Rupees five)each as set out in the proposed resolution as contained in Item No. 9Consequent upon the increase in the Authorized Share Capital of the Company, Clause V, regarding Authorised ShareCapital of the Memorandum of Association of the Company shall be altered as mentioned in the item No. 9 of the Notice.For increasing the Authorised Share Capital of the Company from Rs. 110 crore to Rs. 150 crore and subsequent alterationsin Clause V of the Memorandum of Association of the Company, approval of the Shareholders is required to be obtainedin terms of Article No. 59 of the Articles of Association of the Company and Section 94 of the Companies Act, 1956.Therefore, the Board has recommended the resolution contained in Item No. 9 to be passed by the shareholders as anOrdinary Resolution.The Memorandum and Articles of Association of the Company shall be available for inspection by the shareholders duringoffice hours on all working days at the Registered Office of the Company and at the Annual General Meeting.None of the Directors is interested or concerned in the proposed Resolution.

Item No. 10 In terms of the provisions of section 293{1}{a} of the Companies Act, 1956 {The Act}, the consent of a public company isrequired by way of passing an ordinary resolution in a general meeting to sell, lease or otherwise dispose off the whole,or substantially the whole of the undertaking of the company. The creation of charge/ mortgage/other security/encumbranceby a company of its undertakings/ properties in favor of lending institutions/other lenders from which it borrows moneys, iscovered under this provision.Keeping in view the above referred provisions, the Board of Directors of your Company had been authorized by theshareholders, by way of passing an ordinary resolution at their previous Annual General Meeting held on September 28,2006, to charge/mortgage the undertaking/s including properties of the Company to secure the loan/s up to Rs. 2000crores in favor of lender/s. However, your Company is in the process of expansion and diversification and therefore,requirements for raising more funds are arising, from time to time. Hence, the Board of Directors at their meeting held onAugust 24, 2007 has approved the charging/mortgaging/creating security/ encumbering of the undertaking/s of the Companyincluding its properties for an increased limit of borrowing up to Rs 3000 crores, subject to the approval of shareholders byway of an ordinary resolution under the aforesaid section and other applicable section/s, if any. This is only an enablingresolution so that the Board can take relevant decision/s for giving security for its borrowings, at appropriate time(s).The Memorandum and Articles of Association of the Company shall be available for inspection by the shareholders duringoffice hours on all working days at the Registered Office of the Company and at the Annual General Meeting.Your Directors recommend to pass the proposed Resolution given in item no. 10 as an Ordinary Resolution.None of the Directors is interested in the proposed Resolution.

Item No. 11In terms of the provisions of section 293{1} {d} of the Companies Act, 1956 {The Act}, the Board of Directors of a publiccompany shall not borrow, together with moneys already borrowed, {excluding temporary loans from bankers in the

15

ordinary course of business}, exceeding the aggregate of paid-up share capital and free reserves of the company, withoutthe prior approval of the Company by way of passing an ordinary resolution in a general meeting.

Keeping in view the above referred provisions, the Board of Directors of your Company had been authorised by theshareholders, by way of passing an ordinary resolution at their previous Annual General Meeting held on September 28,2006, to borrow money to the maximum extent of Rs. 2000 crores. However, your Company is in the process ofexpansion and diversification and therefore, requirements for raising more funds are arising, from time to time. Hence, theBoard of Directors at their meeting held on August 24, 2007 has decided to increase the said borrowing limit from Rs.2000 crores to Rs. 3000 crores which shall be over and above the aggregate of paid up share capital and free reservesof your Company. The aforesaid Board resolution has been passed keeping in view the provisions of said section 293{1}{d}and other applicable provisions of the Companies Act, 1956, if any, and the said decision is subject to the approval ofshareholders, by way of an ordinary resolution. This is only an enabling resolution so that the Board can take relevantdecision/s for borrowing/s, at appropriate time(s).The Memorandum and Articles of Association of the Company shall be available for inspection by the shareholders duringoffice hours on all working days at the Registered Office of the Company and at the Annual General Meeting.Your Directors recommend to pass the proposed Resolution given in item no.11 as an Ordinary Resolution.None of the Directors is interested in the proposed Resolution.

Item No. 12Mr. Anil Kumar was appointed as Whole Time Director & CFO (re-designated as WTD & CEO w.e.f. 14.12.2005) for aperiod of five years w.e.f. 01.04.2005 by the shareholders, by way of passing an Ordinary Resolution at the AnnualGeneral Meeting of the Company held on September 26, 2005. Through the said resolution, the Board of Directors hasalso been authorised, to vary and/or modify his remuneration within the limits laid down in the Schedule XIII of theCompanies Act, 1956, during his tenure of five years, after getting approval from the Compensation / RemunerationCommittee of the Company.

Pursuant to the said authorization, the Board, on approval of the Compensation/ Remuneration Committee, has increasedthe remuneration of Mr. Anil Kumar w.e.f. 01.04.2006 and thereafter w.e.f. 01.01.2007. In view of increased activities of theCompany and more responsibilities being entrusted to him and also based on his performance, the Compensation/Remuneration Committee and the Board, subject to the approval of the shareholders, have now increased the remunerationof Mr. Anil Kumar, by way of graded increments, payable w.e.f. 01.01.2008. However, the existing salary grade of Mr. AnilKumar being inadequate to fit his increased remuneration has been revised and extended. The details are appearing inthe resolution. The increased remuneration of Mr. Anil Kumar, and changed grade, which are subject to the approval of theshareholders, in terms of the decisions of the Compensation/ Remuneration Committee and the Board and the provisionsof the Companies Act, 1956, be regarded as an abstract of the variations of terms of his remuneration, and Memorandumof Interest of the Director under Section 302 of the Companies Act, 1956.

Your Directors recommend to pass the proposed Resolution given in item no. 12 as an Ordinary Resolution.

None of the Directors except Mr. Anil Kumar, is interested in the proposed Resolution.

The Memorandum and Articles of Association of the Company shall be available for inspection by the shareholders duringoffice hours on all working days at the Registered Office of the Company and at the Annual General Meeting.

16

Dear Members,

Your Directors are pleased to present the fortieth Annual Report along with the Audited Statements of Accounts of yourCompany for the Financial Year ended the 31st March, 2007.

1. COMPANY’S PERFORMANCE

A. Financial Highlights (Rs. in Lacs)

Particulars For the year For the yearended ended

31.03.2007 31.03.2006

Sales & Other Income 76614 35515Profit (Before Interest, Depreciation Exceptional 22018 8262

Item and Taxes)Less : Interest 1943 1204

Depreciation 311 2254 213 1417Profit Before Tax & Exceptional Item 19764 6845

Less : Provision for taxation 6573 1761Profit After Tax and before Exceptional Item 13191 5084Less : Exceptional Item (net of tax) - 1028

Net profit 13191 4056Add : Surplus Profit brought 2346 1689 forward from previous year

Disposable Profit 15537 5745APPROPRIATIONS- Interim Dividend including Dividend Tax 485 -- Proposed Dividend including Dividend Tax 664 399- Transfer to General Reserve 7500 3000Surplus carried to Balance Sheet 6888 2346

B. Operations

Net Profit for the year 2006-07 stood at Rs 13,191 Lacs as against 4,056 Lacs in the year 2005-06, thus showing anincrease of 225%. Further the total turnover for the year ended March 31, 2007 saw a sharp rise to Rs 76,614 Lacs,compared to Rs 35,515 Lacs for 2005-06, posting a robust growth of 115%.Earning Per Share (EPS) has increased from Rs. 7.80 to Rs. 25.36, thus showing a noteworthy rise of 225% as on yearto year basis.The table given below illustrates the rapid growth of the Company during the last Five years

40.56

13.625.8410.38

131.91

355.15

212.87170.68161.46

766.14

0

20

40

60

80

100

120

140

2002-03 2003-04 2004-05 2005-06 2006-07

Years

Prof

it af

ter t

ax (R

s. in

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0100200300400500600700800900

Turn

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(Rs.

in C

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Prof it after tax Turnover

17

2. AMALGAMATION OF ATPL (UNLISTED COMPANY) WITH THE COMPANY

Scheme of Amalgamation and Arrangement of Ansal Township & Projects Ltd (“ATPL”) with Ansal Properties &Infrastructure Ltd (“APIL”) as approved by the Board of Directors on the April 22, 2006, has been approved by theHon’ble High Court of Judicature at Delhi vide its Order dated the August 31, 2006 in terms of the relevant provisionsof the Companies Act 1956. In this regard, the Order had been filed with Registrar of Companies, NCT of Delhi &Haryana, New Delhi {ROC} on the September 12, 2006, which became the effective date of Amalgamation, and,upon filing of this Order with ROC, all the Assets and Liabilities of ATPL had vested with the Company w.e.f. 01.04.2006which was the appointed date fixed under the Scheme. Pursuant to the said Order, the Authorised Share Capital ofATPL had also been merged with that of the Company and accordingly, the same stood increased by Rs. 10 croresto Rs 110 crores (i.e. increased from Rs. 100 crores to Rs. 110 crores).As per the said Scheme, 1 (one) Equity Share of face value of Rs. 5/- each (fully paid up) of the Company againstevery 2 (two) Equity Shares of face value of Rs. 2/- each { fully paid up} of ATPL were required to be allotted to theshareholders of ATPL. Accordingly 158,47,500 Equity Shares of the Company had been issued and allotted onOctober 20, 2006 to the Equity Shareholders of ATPL, whose names appeared in the Register of Members of ATPLas on the 19th September, 2006 (i.e. Record Date fixed by the Company).

3. ANSAL API EMPLOYEES / DIRECTORS STOCK OPTION SCHEME

During the year, in terms of the approval given by the members at their extra ordinary general meeting held on the2nd May, 2006, the Board of Directors on October 20, 2006 approved the Employee Stock Option Scheme, 2006(ESOS, 2006) and the Compensation / Remuneration Committee of the Board have approved and granted 1,16,700Stock Options on the October 26, 2006 to the employees / directors of the Company and its wholly owned subsidiary,Star Estates Management Limited in accordance with the SEBI (Employee Stock Option Scheme and EmployeeStock Purchase Scheme) Guidelines, 1999 (“Guidelines”) and ESOS, 2006 of the Company named as Ansal APIEmployees / Directors Stock Option Scheme, 2006. Pursuant to this Scheme, the Company has received , onapplication, 10% of the share price of Rs 582/- per share { Face value of Rs 10/- each} which was at 20% discountto the price as on 24.10.2006 being the latest available closing price on Bombay Stock Exchange.

In-principle approvals have been received from National Stock Exchange of India Limited (“NSE”), The BombayStock Exchange Ltd. (“BSE”) and Delhi Stock Exchange Association Limited (“DSE”) under Clause 24(a) of ListingAgreement for listing maximum of 3,50,000 Equity Shares (against Options) to be issued and allotted under ESOS,2006. Details of the Options granted upto March 31, 2007 and other disclosure as required under Clause 12 of thereferred guidelines are enclosed as Annexure - A. Moreover, the complete scheme is available on the website ofyour Company, viz. www.ansalapi.com

M/s Khanna & Annadhanam, Statutory Auditors of the Company and DSP Merrill Lynch, the Merchant Bankers,have certified that the Scheme has been implemented in accordance with referred Guidelines and the resolutionpassed by the members, in this regard.

4. ISSUE AND ALLOTMENT OF ROCD ON PREFERENTIAL ALLOTMENT BASIS

In terms of the approval of members given u/s 81 (1A) of the Companies Act, 1956, at an extraordinary generalmeeting (EGM) held on November 18, 2006, 8,19,659 (Eight Lacs Nineteen Thousand Six Hundred Fifty Nine) nos.of Zero Coupon Secured Redeemable Optionally Convertible Debentures (“ROCD”) of Rs 100/- each were issuedand allotted, on preferential basis, on November 28, 2006 to M/s HDFC Venture Trustee Company Limited at a priceof Rs. 610.01/- per ROCD (aggregating to Rs. 50 crores) calculated in terms of Chapter XIII of SEBI {DIP} Guidelines2000. The approval given by the members at the said EGM in respect of issue of equity shares, on preferentialbasis, to M/s Citigroup Banking Corporation, Bahrain, / Citigroup Venture Capital International Growth PartnershipMauritius Ltd, registered FIIs, and certain Co Investment Trusts , could not be proceeded with, as requisite statutoryapprovals were not forthcoming and the parties had mutually concluded not to take any further action in this regard.Due intimations to the stock exchanges have been given.

National Stock Exchange of India Limited (“NSE”), The Bombay Stock Exchange Ltd. (“BSE”) and Delhi Stock ExchangeAssociation Limited (“DSE”) have given the requisite approval under Clause 24(a) of the Listing Agreement.

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5. ISSUE AND ALLOTMENT OF EQUITY SHARE UNDER QIP

In terms of the approval of members given u/s 81 (1A) of the Companies Act, 1956 at an extraordinary generalmeeting (EGM) dated the November 18, 2006, 67,50,000 Equity Shares of Rs. 5/- each have been issued andallotted on December 12, 2006 at a price of Rs. 1010/- per shares, aggregating to Rs. 681.75 crores, derivedthrough book building process, under Qualified Institutional Placement basis in accordance with the provisions ofChapter XIII-A of the SEBI (Disclosure and Investor Protection) Guidelines, 2000.

The said shares were listed and became tradeable on 14.12.2006 on National Stock Exchange of India Limited(“NSE”) and The Bombay Stock Exchange Ltd. (“BSE”) and on 31.01.2007 on Delhi Stock Exchange AssociationLimited (“DSE”). However, there is no trading at DSE.

All funds raised through referred allotment, have been utilized for intended purposes during the year / subsequentto close of the year.

6. ALLOTMENT OF BONUS EQUITY SHARES

The Board of Directors of your Company had recommended the issuance of 5,76,86,909 fully paid up Bonus EquityShares of Rs 5/- each in the ratio of 1:1 {i.e. one equity share for every one equity shares held as on a record date}at its meeting held on February 12, 2007. The approval of the members had been obtained, on 19.03.2007, by wayof voting through Postal Ballot in terms of the provisions of section 192A of the Companies Act, 1956 and Rulesmade there under. Out of the 5,76,86,909 Equity Shares to be issued and allotted as Bonus Shares, 5,67,50,550Equity Shares had been issued and allotted on May 4, 2007 and the balance have been kept in reserve.

The details of the numbers of Equity Shares allotted and kept reserved for debenture holders and option holders areas follows:

Sl. Particulars Pre Bonus Bonus (1:1)

No. No of shares No of Bonus shares No. of shares Amount in Rs./ ROCD / allotted to members reserved and tooptions held (other than debenture be allotted pursuant toprior to holders and conversion of ROCDBonus Issue option holders) and upon exercise

of options byoption holders

1. Existing total 56,750,550 56,750,550 - 283,752,750no. of shares

2. Zero Coupon 819,659 - 819,659 4,098,295Secured RedeemableOptionally ConvertibleDebentures (“ROCD”)allotted to M/s HDFCVentures TrusteeCompany Limited(“debenture holders”)

3. Options grantedto the employees /directors of theCompany and itsSubsidiary(“option holders”)in pursuance toAnsal ApiEmployees StockOption Scheme,2006 ofthe Company 116,700 - 116,700 583,500

Total:- 288,434,545 or5,76,86,909

equity sharesof Rs 5/- each.

19

The Bonus Shares had been duly dispatched / credited to the members of the Company who were entitled toreceive the same.

The said shares were listed and became tradeable on 22.05.2007 on National Stock Exchange of India Limited(“NSE”) and The Bombay Stock Exchange Ltd. (“BSE”) and on 30.05.2007 Delhi Stock Exchange Association Limited(“DSE”). However, there is no trading at DSE.

7. CHANGE IN CAPITAL STRUCTURE

Consequent upon the various Corporate Actions, as aforesaid, from the end of previous Financial Year on 31.03.2006,the following changes have taken place in paid up Equity Share Capital of your Company:-

Sl. No. Corporate Action No. of Shares Cumulative No.

1. No. of Share as on 31.03.2006 1,74,99,825

2. Subdivision of Equity Shares from 1,74,99,825 3,49,99,650Rs. 10/- each, fully paid up, toRs. 5/- each, fully paid up w.e.f.17.05.2006

3. Allotment of Equity Shares of the 1,58,47,500 5,08,47,150Company on 20.10.2006 pursuant tothe Scheme of Amalgamation of AnsalTownship & Projects Ltd. (ATPL) with the Company

4. Cancellation of Equity Shares of the 8,46,600 5,00,00,550Company held by ATPL on 20.10.2006

5. Allotment of Equity Shares on 67,50,000 5,67,50,55012.12.2006 under QualifiedInstitutions Placement (QIP) Basis

6. Allotment of Bonus Equity Shares on04.05.2007 in the ratio of 1:1 5,67,50,550 11,35,01,100

8. DIVIDEND

During the Financial Year 2006-07, the Board of Directors of your Company has declared and paid an InterimDividend @ 15% on the paid up equity share capital of Rs 28,37,52,750/- {Pre Bonus Shares} based on the financialresults for the period ended the December 31, 2006. This has absorbed Rs. 485 lacs including Dividend Tax. Thepayment of interim dividend was made in March, 2007.

In addition to the payment of Interim Dividend, your Directors are pleased to recommend, for approval of the membersat the ensuing 40th Annual General Meeting, payment of the Final Dividend at the rate of 10% on the enhancedpaid up equity share capital of Rs. 56,75,05,500/- { Post Bonus Shares} for the year ended the 31st March, 2007{thereby aggregating 25% as compared to 20% in the previous year} which, if approved, will absorb Rs. 664 lacsincluding Dividend Tax.The Bonus Shares have been allotted subsequent to the closure of financial year.

9. BUSINESS

Your Company is one of the leading Real Estates Development Companies in India. The business of real estatescomprises of development of residential or commercial estates on its own as well through joint ventures andcollaborations. As a leading developer, the Company has successfully developed the entire range of real estate fromplots, single homes, multifamily homes, group housing, residential colonies, commercial properties to farm land andresorts. The Management Discussion and Analysis Report forming the part of Director’s Report gives a detailedoverview about the business and performance of the Company. Your Company also has ambitious growth plans tobe achieved both by expansion of existing real estate activities as well as through diversifying into new fields suchas power business, hospitality, and medicity, education etc. as mentioned in the subsequent paragraphs.

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10. NEW BUSINESS INITIATIVES

(a) POWER / IT / ITES

Your Company is diversifying into the business of Power. In this respect in pursuant to the provisions of theCompanies Act, 1956, necessary amendments have been made in the Memorandum of Association of theCompany by way of insertion of new sub clauses in the Other Objects Clause relating to the business of Powerand Information Technology/ Information Technology Enabled Services (IT/ITES) in terms of the approval ofthe members {by way of special resolution} received on July 10, 2007 by way of voting through Postal Ballotand consequent registration of the said special resolution by the Registrar of Companies, Delhi & Haryana.The members have also approved (on July 10, 2007), by way of special resolution, the commencement of saidnew business in terms of the provisions of the Companies Act, 1956.

In furtherance to this, the Company has initiated the process for setting up a Wind Power Project in Gujrat andalso placed the order for purchase of Wind Mills of 12MW.

Along with new business of Power, your Company is also planning to diversify into business of IT/ITES andsimilarly amendment of Objects clause has been effected and requisite approvals of members have beenreceived.

(b) MEDICITY

Your Company has signed an Agreement with Fortis Healthcare Holding Limited, {Fortis} for setting up a worldclass Medicity at its Project, Sushant Golf City, located in Lucknow. {U.P.}. Fortis shall set up facility formedical treatment and teaching at the Sushant Golf City, Lucknow. The Medicity is planned to be spread over52 acres of land to be completed in about 7 years. It will have an 800 bed ultra modern hospital along withteaching facilities. There will be Medical College, Dental College, College of Pharmacy, Nursing College ofPhysical Medicine and Rehabilitation, College of Rehabilitative Medicine, and also a College of Allied MedicalScience offering Para medical and technical training. The Colleges will offer graduation, post graduation anddoctoral education. The entire facility will be based on the norms set by Medical Council of India, DentalCouncil of India, Indian Nursing Council, Rehabilitation Council of India and Pharmacy Council of India.

(c) HOSPITALITY

Your Company is in the process of forming a Special Purpose Vehicle Company {in short SPV} for foray in thehospitality sector by setting up around 30 hotels over the next 10 years. The Company proposes to hold about80% equity in the proposed SPV and the balance 20% will be held by Ambience Hospitality Management Pvt.Ltd, a company owned by Mr. Vipin Luthra, a well known entrepreneur in the hospitality business with chain ofrestaurant/clubs under the brand name “Geoffrey’s”, “The Oriental Bloom” and “The Palms –Town and CountryClub”, and he is also involved in developing townships in various parts of the country.

The proposed SPV will set up hotels in the 5 star and 4 star categories including palace hotels, businesshotels, leisure hotels, golf resorts, spas, clubs and serviced apartments. The SPV proposes to own andmanage the palace resorts, the golf resorts and clubs under its own brand and it shall enter into discussionswith leading international hotel chains for management and branding tie ups for their business and leisurehotels. Among the first hotels/resorts to be set up, will be a palace hotel in Jodhpur, {Rajasthan}, and the golfresort in Lucknow {UP}, both of which will operate in the luxury segment.

Your Company proposes to invest an amount of approx.Rs.2000 crores in the hospitality business over thenext few years.

The members have already given their consent for commencement of hospitality business by way of passinga special resolution on May 2, 2006 as per the provisions of the Companies Act 1956.

11. CORPORATE SOCIAL RESPONSIBILITY

The importance of Corporate Social Responsibility arises when we embark on the responsibility to contribute to thesociety where we exist. Therefore the essential component of our corporate responsibility is to take due care for thecommunity. We endeavour to make a positive contribution to the underprivileged communities by supporting socio-economic initiatives. At the out set your Company acknowledges the right to housing for everyone and offers full

21

support to Governments’ schemes for economically weaker sections. In addition, environmental issues have alwaysbeen given due significance. All our projects are aimed at environmental protection, up gradation, conservation,water harvesting etc. and plantation of trees etc. which are important steps in this direction. It is the strong faith ofyour Company that benefit comes as much from its strong organizational pledge to Corporate Governance, as fromits pursuit and fulfillment of Corporate Social Responsibility.

12. SUBSIDIARY COMPANIES

During the year under review, the Company has invested in the Equity Shares of Ansal SEZ Projects Limited andAnsal Township & Infrastructure Limited consequent upon which the said Companies have become the WhollyOwned Subsidiaries (WOS) of the Company.

In terms of the approval granted by the Ministry of Corporate Affairs (MCA), Government of India, vide its letters No.47/295/2007 – CL – III dated July 4, 2007, the provisions of section 212 (8) of the Companies Act, 1956, shall notapply in respect of all the six Subsidiaries of the Company as mentioned below. The said exemption has beengranted on the condition of preparing and circulating the Audited Consolidated Accounts of your Company and itsSubsidiary Companies along with the stand-alone Audited Accounts of the Company. Accordingly, the AuditedBalance Sheets as at the March 31, 2007 and Profit and Loss Accounts for the year ending as on that date togetherwith the Reports of Directors’ and Auditors’ thereon of the said Subsidiaries have not been attached with the BalanceSheet of the Company for the financial year ended March 31, 2007.

Sl. No. Name of the Company Status1 Delhi Towers Ltd. (DTL) Wholly Owned Subsidiary2 Star Estates Management Ltd. Wholly Owned Subsidiary3 Ansal IT City & Parks Ltd. Subsidiary4 Ansal SEZ Projects Pvt. Ltd. Wholly Owned Subsidiary5 Ansal Township & Infrastructure Pvt. Ltd. Wholly Owned Subsidiary6 Ansal Condominium Ltd. Wholly Owned Subsidiary of DTLHowever, the Annual Accounts of Subsidiary Companies and related detailed information can be inspected by /shall be made available to the members of the Company and its subsidiaries, seeking such accounts/ information, atany time, during the working hours at the Registered office of the Company and at the offices of the respectiveSubsidiaries.As per another condition for grant of exemption, information relating to the capital, reserves, assets, liabilities andturnover etc. of the Subsidiary Companies is given at the end of the Consolidated Balance Sheet of the Company.The Statement pursuant to Section 212 of the Companies Act, 1956, containing the details of the Subsidiary Companiesas on the 31st March 2007 is enclosed and marked as Annexure-B.Subsequent to the end of the Financial Year 2006-2007 your company has invested in 50,000 Equity Shares of Rs.10/-each (at par) of Ansal API Power Ltd. on 26.07.2007, consequent upon which the said company has become the WhollyOwned Subsidiary of your Company.

13. STATUTORY STATEMENTS

A. Conservation of energy and technology absorption

The information relating to Conservation of Energy and Technology Absorption as required to be disclosedunder Section 217(1)(e) of the Companies Act, 1956, read with Rule 2 of the Companies (Disclosure of Particularsin the Report of Board of Directors) Rules, 1988, is not applicable to the Company.

B. Foreign Exchange Earnings and outgo

Information about the foreign exchange earnings and outgo, as required to be given under Section 217(1)(e)of the Companies Act, 1956 read with Rule 2(c) of the Companies (Disclosure of Particulars in Report of Boardof Directors) Rules, 1988, is given as follows:-

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{Rs. In lacs}

Sl. No. Particulars For the Year For the Yearended on ended on

31.03.2007 31.03.2006(i) Expenditure in Foreign Currency

Traveling expenses 27.94 9.76Payment to contractors/cost of lift 584.80 263.39Professional Fee 163.90 -Advertisement 7.21 -Architect Fee 195.01 6.69Membership Fee 1.63 -

(ii) Earnings in Foreign CurrencySale of Flats/Plots/Farms etc. 587.75 839.18

During the Financial Year 2006-07, an amount of Rs. 0.01 lacs is due to small scale industrial undertakings ason March 31, 2007, (previous year Rs. 2.99 lacs) and the same has also been disclosed in the financialstatement.

C. Particulars of Employees

During the year under review, six (6) employees/directors were in receipt of remuneration of Rs. 24 lacs ormore per annum. In accordance with the provisions of Section 217(2A) of the Companies Act, 1956 and therules made thereunder, the names and other particulars of employees are set out in the annexure to theDirectors Report (Annexure - C)

14. CORPORATE GOVERNANCE

Your Company believes that for its sustainable and extended growth and that of every stake holder, the essentialrequirements are the judicious and effectual uses of available resources, unswerving effort to attain excellence inbusiness along with active participation in the growth of society, building of environmental balance, noteworthycontribution to the economic growth, and laying emphasis on integrity, accountability, and regulatory compliances.Moreover, the Corporate Governance practice embodies the dual goals of protecting the interests of all stakeholderswhile respecting the duty of the Board to oversee the affairs of the Company in the best interest of its business. YourCompany constantly strives to uphold high standards of Corporate Governance norms.a) A report on Corporate Governance together with a certificate received from M/s Khanna & Annadhanam,

Statutory Auditors of the Company, confirming the compliance with the tenets of Corporate Governance asstipulated in Clause 49 of the Listing Agreement are given separately which forms part of this Report,

b) Managements’ Discussion and Analysis Report is also given separately and also forms part of this Report.

15. FIXED DEPOSITS

As on March 31, 2007 fixed deposits stood at Rs. 727.48 lacs as against Rs. 1062 lacs in the previous year. Depositsamounting to Rs. 6.57 lacs (as on 31.03.2007) have not been claimed by the depositors. Since then deposit amountingto Rs. 3.67 lacs have been renewed or claimed during the current year. Depositors are being intimated regarding thematurity of deposit with a request to either renew or claim their deposits.Your Company has track record of extending consistently good services to its fixed deposit holders. Therefore, thepayment of deposits on maturity and interest thereon, in terms of the Company’s Deposit Schemes, has beentimely.

16. TRANSFER OF UNCLAIMED DEPOSIT / DIVIDEND TO IEPF

As per the provisions of Section 205C of the Companies Act, 1956, deposits / dividend remaining unclaimed for aperiod of seven years from the date they become due for payment have to be transferred to Investors Education &Protection Fund (IEPF) established by the Central Government.Accordingly during the year under review, an amount unclaimed matured deposit along with interest thereon of Rs.45,146/- has been transferred to IEPF. The Unclaimed Dividend for the Financial Year 1994-95, 1995-96, 1996-97,1997-98 & 1998-99 have also been transferred to said IEPF.

23

17. DIRECTORS

In accordance with the provisions of the Companies Act, 1956, Mr. D.N. Davar, Mr. Rahul C. Kirloskar and Mr. P.R.Khanna, Directors of the Company are to retire by rotation at the ensuing AGM. They are eligible for re-appointment.The matter of re-appointing them appears as Agenda items in the Notice of the 40th Annual General Meeting.None of the Directors is disqualified from being appointed / re-appointed as Directors in terms of Section 274(1)(g)of the Companies Act, 1956.

18. AUDITORS’ REPORT AND AUDITORS

The Notes to Accounts, forming part of Balance Sheet as at 31st March, 2007 and Profit & Loss Account for the yearended on that date, referred to in the Auditors’ Report are self explanatory. During the year, all the audit qualificationswere resolved.

M/s. Khanna & Annadhanam, Chartered Accountants, New Delhi, who will retire at the conclusion of this AnnualGeneral Meeting, are eligible for re-appointment. The Company has received Certificate dated August 1, 2007 fromthe Statutory Auditors to the effect that their appointment, if made, would be within the limit prescribed under Section224 of the Companies Act, 1956.

The Board of your Company recommends their re-appointment for the Financial year 2007-08.

19. LISTING INFORMATION

During the year under review, the Company has issued and allotted Equity Shares. The said Shares have beenlisted and permitted to trade at DSE, BSE & NSE. There has been no trading at DSE since considerable number ofyears. The details of allotment and listing of Shares are given below:-

Particulars Date of No. of Share Date of listing Date of TradingAllotment approval (w.e.f.)

Allotment of Equity Shares 20.10.2006 1,58,47,500 11.12.2006 –BSE 12.12.2006 –BSEpursuant to Scheme of 13.12.2006 - NSE 13.12.2006 -NSEAmalgamation of AnsalTownship & Projects Limited 06.01.2007 - DSE 10.01.2007- DSEwith the Company.

Allotment of Equity Shares 12.12.2006 67,50,000 13.12.2006 –BSE 14.12.2006 –BSEunder Qualified Institution & NSE & NSEPlacement Basis as per 31.01.2007- DSE 31.01.2007- DSEprovisions of Chapter XIII-Aof SEBI (DIP) Guidelines.

Allotment of Bonus Equity 04.05.2007 5,67,50,550 21.05.2007 –BSE 22.05.2007 –BSE &Shares in the ratio of 1:1 in & NSE NSEterms of approval of the 30.05.2007 -DSE 30.05.2007-DSEmembers given on 19.03.2007

Listing fees for the Financial Year 2007-08 have been paid by the Company to all the Stock Exchange (i.e. DSE, BSE &NSE) and nothing is outstanding.

20. CONSOLIDATED FINANCIAL STATEMENT

In accordance with Accounting Standard (AS -21) on Consolidated Financial Statement, your Directors provide theAudited Consolidated Financial Statement in the Annual Report. These Statements have been prepared on thebasis of financial statements received from subsidiaries and joint venture companies, as approved by their respectiveBoards.

24

21. DIRECTORS’ RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 217(2AA) of the Companies Act, 1956 and based on the informationprovided by the Management, your Directors hereby confirm :

i) That in the preparation of the Annual Accounts, the applicable Accounting Standards have been followed andno material departures have been made from the same.

ii) That appropriate accounting policies have been selected and applied them consistently, and, judgments andestimates that are reasonable and prudent have been made so as to give a true and fair view of the state ofaffairs of the Company as at the end of the financial year on March 31, 2007 and of the profit or loss of theCompany for the year ended on that date.

iii) That proper and sufficient care has been taken for maintenance of adequate accounting records in accordancewith the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventingand detecting fraud and other irregularities.

iv) That the Annual Accounts have been prepared on a going concern basis.

22. ACKNOWLEDGMENT

Your Directors would like to express their sincere appreciation and gratitude to:-

all Bankers and Financial Institutions, the Central and State Governments as well as their respectiveDepartments and Development Authorities in India and abroad connected with the business of theCompany for their co-operation and continued support.the members, depositors, suppliers, contractors and customers for the trust and confidence reposed bythem in the Companyall the regulatory authorities including SEBI, Stock Exchanges, Ministry of Corporate Affairs, Registrar ofCompanies and the Depositories.

Your Directors also deeply appreciate the hard work, competence, loyalty, cooperation and professionalism of theemployees of the Company and its subsidiaries, at all levels. The employees continue to remain the Company’smost valuable assets and their relentless efforts have enabled the Company to achieve praiseworthy growth duringthe year under review.

Regd. Office: For and on behalf of the Board115, Ansal Bhawan16, Kasturba Gandhi Marg,New Delhi-110001

( Sushil Ansal )Date:24th August, 2007 Chairman

25

ANNEXURE- AStatement as at March 31, 2007, pursuant to Clause 12 regarding disclosure in the Director’s Report of the SEBI(Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999:-

a) Total number of Options granted 1,16,700 nos. granted on 26.10.2006

b) Pricing Formula The pricing formula, as approved by the members of the Companyon 02.05.2006, is at a 20% discount of the latest available closingprice of the Equity shares traded on Bombay Stock Exchange onthe date of grant of Option, calculated as rounded off to the nearestinteger.Upfront payment of 10% of the price, received at time ofgrant of option.

c) Options Vested NIL

d) Options Exercised NIL

e) The Total number of shares arising as a results NAof exercise of options

f) Options lapsed NA

g) Variations of the terms of Options

h) Money realized by exercise of options NIL

i) Total number of options in force 1,16,700 nos.

j) Employees wise details of options granted to:- As per details given below:-

i) Senior Managerial Personnel of the Company (APIL) and Star Estates Management Limited (SEML), Wholly OwnedSubsidiary:-

Name Designation No. of Options grantedEmployees of APIL1. Mr. P.N. Misra Executive Director 80002. Mr. V.K. Saigal Executive Director 100003. Mr. R.C. Roongta Executive President 40004. Mr. N.K. Sehgal President 3005. Mr. Deepak Khanna Chief Operating Officer 80006. Mr. Amitav Ganguly Sr. V.P. (Corp. Affairs) 1000

& Company Secretary7. Mr. Narinder Kumar Sr. Vice President 4008. Mr. Lalit Rustagi Addl. Vice President 60009. Mr. Surinder Kapoor Dy. General Manager 500010. Mr. Z. Khan Dy. General Manager 5000Employee of SEML11. Brgd. Deepak Kapoor General Manager 250012. Mr. Vivek Arora Company Secretary of SEML 500Directors of APIL1. Dr. Ramesh C. Vaish Director 100002. Mr. Prithvi Raj Khanna Director 100003. Mr. Lalit Bhasin Director 100004. ACM O.P. Mehra Director 100005. Mr. D.N. Davar Director 100006. Mr. Anil Kumar Whole Time Director & CEO 10000Director of SEML7. Mr. Rajat Biswas Whole Time Director 6000

ii) Any other employees of the Company who receivesa grant in any one year of option amounting to 5% ormore of the options granted during that year

iii) Identified employees who were granted options,during any one year, equal to or exceeding 1% of theissued Capital (excluding outstanding warrant andconversions) of the Company at the time of grant.

None

None

26

k) Diluted Earning Per Share (EPS) pursuantto issue of shares on exercise of share onexercise of option calculated inaccordance with AS 20.

l) (i) Method of Calculation of employeesCompensation cost.

(ii) The difference between the employeecompensation cost so computed at (i)above and the employee compensationcost that shall have recognized if it hadused the fair value of the options, shall bedisclosed.

(iii) the Impact of this difference on profits andon EPS of the Company.

m) Weighted –average exercise prices andweighted average fair values of the optionsgranted for option whose exercise priceeither equals or exceeds or is less thanthe market price of the Stock.

n) A description of the method and significantassumptions used during the year toestimate the fair values of options

Rs. 11.93

The employee Compensation cost has beencalculated using the intrinsic value method ofaccounting to account for Options issued un-der the “Ansal Api Employee/Directors StockOption Scheme”. The stock based compensa-tion as per the intrinsic value method for thefinancial year 2006-07 is Rs.45.97 lacs

Rs. 39.96 lacs

The effect on the net income and earning per share,has the fair method been adopted, is presentedbelow:

Rs. in lacsNet Income 13190.71Add: Intrinsic value compensation cost 45.97Less: Fair value compensation cost 85.93 (Black-Scholes method) ——————Adjusted Net Income 13150.75 ————— (Rs.)Earning per share Basic DilutedAs reported 25.36 11.93As adjusted 25.28 11.89

(In Rs.)Weighted average exercisePrice per option 145.45 Weighted average fair valuePer option 271.88

The fair value of each option is estimated using theBlack-Scholes option pricing model after applying thefollowing key assumption on a weighted averagebasic:

(i) Risk free interest rate 6.56%(ii) Expected life 4 years(iii) expected volatility 4.86%(iv) Expected Dividend Rs. 1.67(v) Price of the under lying shares Rs. 727.45

in market at the time ofoption grant.

27

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28

ANNEXURES TO DIRECTORS’ REPORTANNEXTURE C

Particulars of employees as required under as per Section 217(2A) of the Companies Act, 1956 read with the Companies (Particularsof Employees) Rules, 1975 as amended by Amendment Rules, 2002 and forming part of the Directors’ Report for the period ended 31stMarch, 2007.

Name of Designation/ Age Gross Qualification Experience Date of Previous Period duringEmployee Nature of (Year) Remunera (Year) Commen- Employment which post

Duties -tion (Rs.) cement of & position held held in lastemployment employment.

EMPLOYED FOR THE WHOLE YEAR

Ansal Sushil Chairman 67 4,88,36,477 B. A (Hons.) 42 30.06.1967 Self Employment N. A.Whole TimeDirector

Kumar Anil Whole Time 48 42,35,400 D.C.L. 08.07.1999 Superior Air 15 yearsDirector & F.C.A. 23 as Vice Product Ltd.CEO A.C.S. President As Vice President

LL.B (Finance) & Secretary

Saigal Vinod Executive 69 36,96,076 B.Sc, B.Sc. 29 01.08.1998 Maxwin Ansal 7 YearsKumar Director (Mechanical As President Limited

(Projects) Engineering) (Projects) As ResidentDirector

Jain Rakesh Executive 48 24,11,604 B.Sc.C.A. 23 01.02.2006 Omaxe 21 yearsKumar Director As Executive Construction Ltd

(Marketing) Director As President(Marketing)

Sachdev Chief 47 24,80,702 B.Sc.PGDM 26 16.04.2003 AEZ Group 2 YearsDeepak Operating As Addl. Head of Business

Officer Vice Development and(Punjab) President Sale & Marketing

Khanna Chief 53 39,63,262 MBA 27 01.08.2005 Omaxe 3 MonthsDeepak Operating - Marketing As Whole Construction

Officer TimeDirector and Real Estate (Rajasthan) of ATPL Ltd.

As C.O.O

NOTES:-

a) Gross remuneration includes Basic Salary, House / HRA, Employer’s contribution to Provident Fund and Family Pension Fund, L.T.A.,medical reimbursement, club fees, electricity expenses, personal accident insurance and commission. Also entitled to gratuity.

b) The appointments of Mr. Sushil Ansal, Chairman & Whole Time Director and Mr. Anil Kumar, Whole Time Director & CEO arecontractual and as per Company Rules. Their nature of duties includes supervision and control of affairs of the Company subjectto superintendence, control and directions of the Board of Directors. Appointments of Mr. Vinod Kumar Saigal, Mr. Rakesh KumarJain, Mr. Deepak Khanna and Mr. Deepak Sachdev are regular and as per Company Rules and their duties as assigned to them,from time to time, include supervision and control of various projects, marketing and operation of the Company.

c) There is no employee who holds by himself or along with his spouse and dependent children, not less than 2% equity share of theCompany and has been in receipt of remuneration in excess of that drawn by the Whole-time Director/s.

29

1. COMPANY’S PHILISOPHY ON CORPORATE GOVERNANCEYour Company’s commitment to good corporate governance for enhancing the shareholders’ value remainsundiminished. More so, its belief that such governance is critical in supporting corporate development, improvingaccess to capital and increasing productivity and competitiveness. To enable attainment of the avowed objectivesof the good corporate governance, the Company is continuing to follow transparency in its dealings and layingemphasis on integrity, accountability and regulatory compliances. Moreover, improvements in quality of life andmeeting social responsibility have been its important objective. The Company genuinely foretells that good corporategovernance would protect, augment and meet the trust and expectations of the shareholders, customers, employees,suppliers, government agencies and the society. Your Board of Directors fully support and endorse corporategovernance practices in accordance with the provisions of Clause 49 of the listing agreement and generally in all itsaspects and implications. Your Company has complied with the mandatory requirements of the said Clause.

2. BOARD OF DIRECTORSThe Board represents the interests of all the Company’s stakeholders and provides the Company with strategicdirections, reviews corporate performance, authorize and monitor strategic investments, ensures regulatorycompliances and safeguard interests of all stakeholders.

a) The composition of the BoardThe Board has an optimum combination of Executive, Non-Executive and Independent Directors. The Board of yourCompany consists of 9 (Nine) Directors comprising 2 (two) executive directors, 5 (five) non executive and independentdirectors and 2 (two) non executive promoter related directors. More than 50% of the Directors are non executiveand independent. Therefore, the composition of the Board, which is as follows, is in conformity with the requirementsof the Listing Agreement:-

* excludes Directorships in private companies and foreign companies, and companies registered under section 25 ofthe Companies Act, 1956.

** Represents Memberships/Chairmanships of Audit Committee and Shareholders / Investor Grievance Committee ofother Indian Companies.

b) Meetings held in Financial Year 2006-07 and attendance of the Directors in the Board Meetings and lastAnnual General Meeting (AGM):The Board of your Company comprises professionals, experienced and active members. The presence of IndependentDirectors brings to the Company a wide spectrum of experience, knowledge and judgment in view of their vastknowledge and expertise both in their fields and boardroom practices. The Board meetings are held regularly to

Sl. Name of Director Status (Executive / No. ofNo. Non-Executive Other Other Committee

and Independent) Director memberships**ships*

As As MemberMember & Chairman

1. Mr. Sushil Ansal Chairman, Executive 1 - - 13671000 -2. Mr. Anil Kumar Whole Time Director 1 - - 0 10000

& CEO, Executive

3. Mr. Pranav Ansal Non Executive 1 - - 9743500 -

4. Mr. D. N. Davar Non Executive 14 5 4 0 10000& Independent

5. Dr. R. C. Vaish Non Executive 5 1 - 0 10000& Independent

6. ACM O. P. Mehra Non Executive 3 2 - 0 10000(Retd.) & Independent

7. Mr. Lalit Bhasin Non Executive 9 6 - 0 10000& Independent

8. Mr. Rahul C. Kirloskar Non-Executive 4 1 - 1350 -

9. Mr. P. R. Khanna Non-Executive 4 3 1 0 10000& Independent

No. ofSharesheld in

theCompany

No. ofOptionsgranted

on26.10.06

30

review strategic, operational and financial matters and to chart out policies and practices. All the key issues includedin the Agenda for consideration of the Board are backed by detailed background information to enable the Board totake informed decisions and the Chairman ensures that all the Directors are properly briefed on the matters beingdiscussed. Wherever appropriate, the Board delegates its authority to Committee/s of Directors and officers.Board Meetings are scheduled well in advance, dates of the Board meetings are usually informed to all directors,auditors and other concerned officer/s two to three weeks in advance and agenda papers are circulated about fiveto six days prior to the meeting. The minutes of each board/committee meeting are recorded and draft minutescirculated to all Directors for their confirmation before being recorded in the Minute Books. All circulatory resolutionspassed by the Directors are also placed before the Board, for noting. The Board periodically reviews compliancereports of all laws applicable to the Company and takes steps to rectify non-compliances, if any. The Board alsoregularly considers the compliance of code of conduct for the Board members and senior management and also thenorms of the Corporate Governance. The members of the Board have access to all information of the Company. Themembers of the Board are also free to recommend inclusion of any matter in the agenda for discussion. Seniorofficers / Head of Departments are invited to attend the Board Meetings so as to provide additional inputs to theitems being discussed by the Board. Every Board Meeting is well attended by sufficient number of Directors.The Board meets at least once in a quarter to consider, inter alia, the yearly/ half yearly/ quarterly financial results.During the Financial Year 2006-07, the Board Meetings were held on the 7th April, 2006, 14th April, 2006, 21st April,2006, 22nd April, 2006, 29th June, 2006, 31st July, 2006, 28th August, 2006, 20th October, 2006, 28th November, 2006,30th January, 2007, 12th February, 2007 and 13th March, 2007. Your Company ensures that the gap between twoconsecutive meetings is not more than four months. The provisions of the Companies Act, 1956 and the requirementsof the Listing Agreement are duly complied.All the five Non-Executive and Independent Directors have extensive professional and business experience andthey are free from any material business or other relationships with the company, which could interfere with theexercise of their independent judgments.

The attendance of each Director at these meetings and at the last Annual General Meeting was as follows:

Dates of Name of DirectorsBoard Mr Sushil Mr Anil Mr Pranav Mr D N Dr R C ACM O P Mr Lalit Mr Rahul C Mr P RMeeting Ansal, Kumar, Ansal Davar Vaish Mehra Bhasin Kirloskar Khanna

Chairman WTD & (Retd)CEO

07.04.06 Yes Yes Appointed Yes No Yes Yes No Yes

14.04.06 Yes Yes w.e.f. Yes Yes Yes No No Yes

21.04.06 Yes Yes 22.04.06 Yes No Yes Yes No Yes

22.04.06 Yes Yes Yes Yes Yes Yes Yes No Yes

29.06.06 Yes Yes Yes No Yes Yes Yes No Yes

31.07.06 Yes Yes Yes Yes Yes No Yes No Yes

28.08.06 Yes Yes Yes Yes Yes Yes Yes No Yes

20.10.06 Yes Yes Yes Yes No Yes Yes No Yes

28.11.06 Yes Yes Yes Yes No Yes Yes No Yes

30.01.07 Yes Yes No Yes Yes Yes Yes No Yes

12.02.07 Yes Yes Yes Yes Yes Yes Yes Yes Yes

13.03.07 Yes Yes Yes Yes No Yes Yes No Yes

Attendance Yes Yes Yes Yes No Yes No No YesAt the lastAGM heldOn 28.9.06

3. VARIOUS COMMITTEES OF DIRECTORSThe Board of your Company have constituted various Committees to deal with a variety of specialized issues withappropriate delegations for better and more focused attention to the affairs of the Company. The role and thefunctions of the Committees of the Board are described hereunder:

(a) The Audit Committee

The Audit Committee of the Company was constituted on the 31st January, 2001 as per the provisions of Section292A of the Companies Act, 1956 and it was reconstituted on the 31st January, 2002 in consonance with Clause 49

31

of the Listing Agreement. The Audit Committee is responsible for effective supervision of the financial reportingprocess, ensuring financial and accounting controls and compliance with financial policies of the Company.The Audit Committee solely comprises non-executive and independent Directors, as detailed here-in-below. TheChairman of the Committee and other members have accounting and financial management expertise/background.The scope of the Audit Committee function includes review of the systems and procedures and overseeing thefunctioning of the internal audit, the effectiveness of control and regulatory compliances. It also reviews changes inaccounting policy/ies and practices, major accounting entries, auditors’ qualifications and their removal, mattersrelating to disclosure of financial information, business plans, etc. After the review, the matters are submitted to theBoard for consideration.The Minutes of the Audit Committee meeting/s are placed before the Board meeting for noting and wherever requiredfurther deliberations, and the Chairman of the Committee apprises the Board on the recommendations made by theCommittee.Dates of the meetings are fixed two to three weeks in advance and advised to all including the Auditors and theagenda is circulated to the Directors about five to six days in advance. Statutory / Internal Auditors also attend theAudit Committee meeting/s. During the year under review, five meetings of the Audit Committee were held in duecompliance with the Listing Agreement and other relevant laws and adequate quorum was present at every AuditCommittee Meeting.The composition of the Committee, which comprises of Independent Directors only, and the attendance of eachmember, at the Committee meetings, is as follows:

Broad Terms of Reference of the Audit Committee:

i) The members of the Audit Committee shall have discussion/s with the Auditors periodically about adequacy ofinternal control systems and control procedures, scope of audit including the observations of the Auditors, andreview the quarterly / half yearly and annual financial statements, before submission to the Board, and also ensurecompliance of internal control systems.

ii) The Audit Committee shall have authority to investigate into any matter in relation to the items specified in Section292A of the Companies Act, 1956 or referred to it by the Board and for this purpose it shall have full access toinformation contained in the records of the Company.

iii) Any recommendation given by the Audit Committee on any matter relating to financial management including theAudit report, shall be binding on the Board. If any recommendation is not accepted by the Board, it shall record thereasons therefor and also communicate such reasons to the members.

iv) The Audit Committee shall meet periodically and carry out the functions as may be prescribed under the rulesframed by the Central Government and/or as required by the Listing Agreement with Stock Exchanges, from time totime. However, it will be essential to have such meetings for review of quarterly / half yearly and annual financialstatements, before these are submitted to the Board.The Chairman of Company, WTD & CEO, CFO, Statutory Auditors and Internal Auditors, and senior officers areinvited to the Audit Committee meetings on regular basis. Company Secretary acts as the Secretary of the AuditCommittee.

The Audit Committee reviews/ notes/ recommends/decides various matters as required under Clause 49 of the ListingAgreement which includes, among others, management discussion & analysis of the business, significant related partytransactions, internal audit reports, directors responsibility statements, Directors report, Statutory Auditors remuneration,etc. and also the internal audit function, and, has already put in place the Chief Internal Audit Co-ordinator.

Sl. Name of the Dates of the Audit Committee MeettingNo. Director

29.06.06 31.07.06 28.08.06 28.11.06 30.01.07

1. Mr. D.N. Davar, No Yes Yes Yes YesChairman

2. Dr. R. C. Vaish, Yes Yes Yes No YesVice Chairman

3. ACM O.P. Mehra Yes No Yes Yes Yes(Retd.), Member

4. Mr. P.R. Khanna, Yes Yes Yes Yes YesMember

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(b) The Compensation / Remuneration Committee

The Remuneration Committee was constituted by the Board of Directors on the 25th June, 2002 to consider and approvethe remuneration package payable to Executive Director(s) of the Company. The Committee sets the overall policy of theremuneration and other terms of the employment of the Executive Directors. This Committee was renamed by the Boardon the 31st January 2006.

The composition of the Committee, which comprises Independent Directors only, and the attendance of each member, atthe Committee meetings, are as follows:

Sl.No Name of the Director Dates of the Remuneration Committee Meeting07.04.06 29.06.06 28.08.06 26.10.06 30.01.07

1. ACM O.P.Mehra Yes Yes Yes Yes Yes(Retd.), Chairman

2. Mr. P.R. Khanna, Yes Yes Yes Yes YesMember

3. Mr. Lalit Bhasin, Yes Yes Yes Yes YesMember

Dates of the meeting/s are fixed in advance and agenda is circulated to the Directors about five to six days in advance.The Minutes of the Remuneration Committee meeting/s are placed before the following Board meeting and the Chairmanof the Committee apprises the Board on the recommendations made by the Committee.

Remuneration Policy:

The Company is transparent in the Remuneration Policy of the Directors. The Committee recommends remunerationpackage of the Executive Directors to the Board after considering the relevant provisions of the Companies Act, 1956 andtheir performance, experience and market conditions with a view to providing a package which is appropriate for theresponsibilities involved and which is aimed at attracting and retaining the best manpower talent keeping in view theircriticality to the attainment of the corporate goals and targets.

Ansal API Employees / Directors Stock Option Scheme, 2006

During the year, the Board on October 20, 2006 has approved the Employee Stock Option Scheme, 2000 (ESOS, 2000)and the Compensation / Remuneration Committee of the Board have approved and granted 1,16,700 Stock Options onOctober 26, 2006 to the Employees / Directors of the Company and its Wholly Owned Subsidiary, Star Estates ManagementLimited in accordance with the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines,1999 (“Guidelines”) and ESOS, 2006 of the Company named as Ansal API Employees / Directors Stock Option Scheme,2006. The grant of options was made in pursuance to the approval of the Members accorded at their Extra OrdinaryGeneral Meeting held on May 2, 2006.

The options were granted at a price of Rs. 582/- i.e. the price as computed at 20% discount to the closing price of sharesof the Company as on October 24, 2006 viz. the last trading day prior to the date of grant of option viz. the October 26,2006, on the Bombay Stock Exchange Limited.

The complete Ansal API Employees / Directors Stock Option Scheme, 2006 is available on the web site of your Companyviz www.ansalapi.com.

Details of remuneration paid to the Executive / Whole Time Director(s) during the Financial Year 2006-2007 are as follows:(Amount in Rupees)

Name of the Position Held Salary HRA Perqui Commi Total No. ofDirector(s) sites@ -ssion# Options

Granted*

Mr. Sushil Chairman & 51,00,000 25,50,000 19,67,477 3,92,19,000 4,88,36,477 -Ansal Whole Time

DirectorMr. Anil Kumar Whole Time 29,70,000 3,60,000 9,05,400 0 42,35,400 10,000

Director & CEO

Total 80,70,000 29,10,000 28,72,877 3,92,19,000 5,30,71,877 10,000

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@ Perquisites include Company’s contribution towards provident fund and family pension fund, club fees, medicalreimbursement, leave travel assistance, electricity expenses and personal accident insurance, also Gratuity as perCompany Rules. {As may be applicable in each case}.# Commission @ 2% on the Net Profit {computed in accordance with the provisions of Section 349 & 350 of theCompanies Act, 1956} for the year ended 31.03.2007, paid to Mr. Sushil Ansal in terms of his remuneration approvedby the Members at the Annual General Meeting held on the 26th September, 2005.*Pursuant to Ansal API Employees / Directors Stock Option Scheme, 2006 of the Company.

The Non-Executive Directors do not draw any remuneration from the Company other than sitting fees. Reimbursement ofthe conveyance expenses is made for attending the Board/ Committee meeting(s). Sitting fees is paid @ Rs. 20,000/- permeeting for the Board / Audit / Directors Committee, and for other Committee/s {other than Share Transfer Committee} @Rs. 7,500/- per meeting. This is subject to revision/s as per applicable law/s prevailing from time to time.

(c) The Share Transfer CommitteeThe Board at its Meeting held on the 20th March, 1993 constituted the Share Transfer Committee to approve transfer /transmission / transposition /replacement of mutilated share certificates etc. Thereafter, for operational convenience, ithas been re-constituted, from time to time, as and when required, (lastly reconstituted on the 30th June, 2003) and keepingin view the various statutory provisions.

The Board at its meeting held on the 30th March, 2005 also authorized the Committee for subdividing and consolidation ofEquity Shares of the Company. The Committee also approves the dematerialization / rematerialization of Equity shares ofthe Company.

The Committee consists of following members:

1. Mr. Sushil Ansal - Chairman & Whole Time Director2. Mr. Anil Kumar - Whole Time Director & CEO3. Mr. Amitav Ganguly - Sr. V.P. (Corp. Affairs) & Company Secretary

Mr. Amitav Ganguly, Sr. Vice President (Corporate Affairs) & Company Secretary of the Company acts as ‘ComplianceOfficer’ to monitor the share transfer process and liaison with regulatory authorities.Requests received for transfer of Equity Shares in physical mode are registered, after satisfying the required compliances,and Share Certificate/s are returned within 30 days from the date of receipt. The Share Transfer Committee meetsapproximately once in a fortnight. During the Year under review, 25 (twenty five) Share Transfer Committee meetings wereheld on the following dates:

14.04.2006, 28.04.2006, 17.05.2006, 31.05.2006, 13.06.2006, 29.06.2006, 14.07.2006, 28.07.2006, 14.08.2006,28.08.2006, 19.09.2006, 28.09.2006, 14.10.2006, 31.10.2006, 08.11.2006, 15.11.2006, 28.11.2006, 14.12.2006,27.12.2006, 15.01.2007, 30.01.2007, 15.02.2007, 28.02.2007, 15.03.2007, 22.03.2007.

The decisions of the Share Transfer Committee are noted by the Board, subsequently.

(d) The Shareholders/Investors Grievance Committee

The Board in its meeting held on the 26th April, 2002 constituted a Shareholders/ Investors Grievance Committee ofDirectors.

The Committee specifically looks into redressing of the complaints/grievances received from the shareholders of theCompany like transfer/ transmission of Shares, non-receipt of Balance Sheet, non- receipt of Dividend and other relatedissues etc., under the Chairmanship of a non- executive and independent Director, in compliance with the requirements ofthe Listing Agreement, and, to strengthen investor relations.

The composition of the Committee is as follows:-

Sl. Name of Member Chairman / Nature of DirectorshipNo. Member1. ACM O. P. Mehra (Retd.) Chairman Non-Executive Independent Director2. Mr. P. R. Khanna Member Non-Executive Independent Director3. Mr. Lalit Bhasin Member Non-Executive Independent Director

34

The Company addresses all the complaints/grievances of the shareholders/ investors expeditiouslyand the replies are sent/ issues are resolved promptly, as and when received by your Company andits Registrar, and, it is a continuing process. A meeting of the Committee was held on the 13.03.2007to take note of the overall status of the complaints received and redressed.Mr. Amitav Ganguly, Sr. Vice President (Corporate Affairs) & Company Secretary is the ‘ComplianceOfficer’ of the Company and he regularly monitors for providing best investor services.During the Financial Year 2006-07, status of the complaints/grievances received and redressedwere as follows:-

Sl. Nature of complaint No. of complaints No. of complaintsNo. received resolved1. Non-receipt of Balance Sheets {Annual Report}

which were duly sent to all the members on time. 06 062. Transfer / transmission of shares 04 043. Non-receipt of Dividend Demand Drafts relating

to the Dividend for the year ended 31.03.2006and Interim Dividend for the period ended31.12.2006, duly sent to all the members on time 07 07

4. Non-receipt of Bonus Shares */Split Shares# 43 435. Issue of Duplicate Share Certificates 14 14

6. Others 18 18

* Your Company had allotted the Bonus Shares on the 4th May, 2007 in pursuance of the approvalgiven by the Members on the 19th March, 2007 by way of voting through postal ballot process.

# Your Company had subdivided the shares from Rs 10/- each to Rs 5/- each in pursuance ofthe approval given by the Members on May 02, 2006.

The particulars of the investors’ grievances / complaints received and redressed, during the year,are also published by the Company in its quarterly/half yearly/annual financial results on a regularbasis as per the requirement of the Listing Agreement.

(e) The Directors CommitteeThe Board in its meeting held on 31st January, 2006 re-constituted the Directors Committee toexpedite the day to day functioning and exercise of delegated powers of the Board. The Committeemeets, as and when required, to take decisions on the policy matters and also to provide guidanceto the operating management. They also monitor and control the actions of the operatingmanagement.The various decisions taken by the Directors Committee are confirmed and noted by the Board andthe minutes of the Directors Committee Meeting/s are placed before the Board, subsequently.

The composition of the Committee is as follows:-

S.No Name of the Director Chairman/ Member1. Mr. Sushil Ansal Chairman2. Mr. D.N. Davar Member3. Dr. R.C. Vaish Member4. ACM O.P.Mehra (Retd.) Member5. Mr. P. R. Khanna Member6. Mr. Anil Kumar Member

During the year under review, no meeting of Directors Committee was held.

(f) Resource Planning and Review Committee

The Board at its meeting held on the 28th August, 2006 constituted the Sub Committee of Directors(i.e. Issue Committee) to take necessary action/s, inter alia, to make a follow on public offer and/ orany other offer of Equity shares of the Company. The name of the Committee has been changedfrom Issue Committee to the “Resource Planning and Review Committee” by the Board at itsmeeting held on October 20, 2006. The composition of the Committee is as follows:-

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S. No Name of the Director Chairman/ Member1. Mr. Sushil Ansal Chairman2. Mr. Anil Kumar Member3. Mr. Pranav Ansal Member4. Mr. P. R. Khanna Member5. Mr. Lalit Bhasin Member

A meeting of the Committee was held on the 12.12.2006 to allot 67,50,000 equity shares on Qualified InstitutionalPlacement (QIP) basis and to take decision on utilizing the funds of the Company.

4. GENERAL BODY MEETINGS

(a) Last Annual General Meeting/s

During the last three years the Annual General Meetings {AGM} of the Company have been held at the following venue:-

For the Venue Day and date TimeFinancialYear2005-06 Sri Sathya Sai International Centre Thursday, the 28th September,2006 10.00 A.M.

& School, Lodhi Road, New Delhi-1100032004-05 FICCI Auditorium, Tansen Marg, Monday, the 26th September,2005 10.00 A.M.

New Delhi – 110 0012003-04 Sri Sathya Sai International Centre Tuesday, the 28th September,2004 10.00 A.M.

& School, Lodhi Road, New Delhi-110003

The following were the Special Resolutions duly passed during the previous three AGMs

Financial Year Date of AGM Particulars2005-06 28th September, 2006 NIL

2004-05 26th September, 2005 NIL

2003-04 28th September, 2004 (i) Change of name of the Company from AnsalProperties & Industries Ltd. to Ansal Properties &Infrastructure Ltd.

(ii) Amendment in the Article No. 48 of Articles ofAssociation of the Company.

All the other Ordinary resolutions as set out in the respective AGM notices were duly passed by the members.

(b) Resolutions passed through Postal Ballot ProcessDuring the period under review, the following resolutions have been passed by way of voting through Postal BallotProcess as per the procedure prescribed under the provisions of Section 192A of the Companies Act, 1956 readwith the Companies (Passing of Resolution by Postal Ballot) Rules, 2001 and other applicable provisions, if any.

(i) Special Resolutions duly passed on 19th March, 2007Issue and allotment of Bonus Shares in the ratio of 1:1 by way of capitalization of reserves in terms ofthe relevant provisions of the Companies Act, 1956 and Securities & Exchange Board of India (Disclosureand Investor Protection) Guidelines, 2000; andInvestment up to Rs. 300 crores by way of acquiring the shares/securities of / making loans to/providingguarantees/security for Special Purpose Vehicle Company (“SPV”) namely “ANSAL HI-TECHTOWNSHIPS LTD” under section 372A of the Companies Act, 1956.

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Voting Pattern of the votes cast by the shareholders of the CompanyParticulars Resolution No. 1 Resolution No. 2

Number of Valid Postal Ballot Forms received 893 893Votes in favor of the Resolution 3,78,70,357 3,78,42,905

(99.998%) (99.990%)Votes against the Resolution 450 3846

(0.002%) (0.010%)

(ii) Special Resolutions duly passed on 10th July, 2007

Approve the alteration of Memorandum of Association by way of insertion of new Objects relating toPower and IT/ITES Business in “Other Objects” Clause.Approve the commencement of such new business u/s 149 (2A) of the Companies Act, 1956.

Voting Pattern of the votes cast by the shareholders of the Company

Particulars Resolution No. 1 Resolution No. 2

Number of Valid Postal Ballot Forms received 659 659Votes in favor of the Resolution 7,52,02,815 7,51,74,107

(99.9995%) (99.9996%)Votes against the Resolution 400 300

(0.0005%) (0.0004%)

In both the above cases, Mr V. P. Kapoor, B.A., LL.B., FCS, AICWA, Company Secretary in practice, New Delhi, wasappointed as Scrutinizer for conducting the Postal Ballot process in a fair and transparent manner

(c) Extra Ordinary General Meeting

An Extra Ordinary General Meeting (EGM) was held on Saturday, the 18th November, 2006 at 11.00 A.M. at FICCIAuditorium, Tansen Marg, New Delhi-110001 to seek , the approval of the Members of the Company for the followingby way of special resolutions:-

Authorization for issue of securities on public issue / right / qualified institutions placement basis / any otherbasis;

Authorization for issue of Zero Coupon Secured Redeemable Optionally Convertible Debentures by way ofPreferential Issue to M/s HDFC Ventures Trustee Company Limited;

Authorization for issue of Equity Shares by way of Preferential Issue to M/s Citigroup Banking Corporation,Bahrain, Citigroup Venture Capital International Growth Partnership Mauritius Ltd, registered FIIs, and certainCo invest Trusts .

The attendance of each Director at the aforesaid EGM was as follows:

Sl. No. Name of Director Attendance at last EGMheld on 18.11.2006

1. Mr. Sushil Ansal Present2. Mr. Anil Kumar Present3. Mr. Pranav Ansal Present4. Mr. D. N. Davar Present5. Dr. R. C. Vaish Not Present6. ACM O. P. Mehra (Retd.) Present7. Mr. Lalit Bhasin Present8. Mr. Rahul C. Kirloskar Present9 Mr. P. R. Khanna Present

All the special resolutions as set out in the notice of the said EGM were duly passed by the Members.

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5. DISCLOSURES

a) Disclosures on materially significant related party transactionsNo transaction of material nature has been entered into by the Company with its promoters, directors, management ortheir relatives etc. that may have potential conflict with the interest of the Company. The Transactions with related partiesas per requirement of Accounting Standard No. 18 of ICAI are disclosed in Schedule 17, Financial Notes of Balance Sheetforming part of the Annual Report.

b) Legal ComplianceNo penalties or strictures have been imposed by SEBI or Stock Exchanges or any other statutory authorities on mattersrelating to capital markets during the last three years. All the requirements of the Listing Agreements with the StockExchanges as well as regulations and guidelines of SEBI are strictly being followed.

c) Code of ConductThe Board at its meeting held on the 31st October, 2005, had approved the Code of Conduct for the Board Members andSenior Management (i.e. from the ranks of General Manager and above) and the same has been posted on the Company’swebsite. The Board Members and Senior Management Personnel have given the declaration affirming compliance andadherence to the said Code of Conduct for the year ended the 31st March, 2007.The Annual Report also contains a declaration that the Code of Conduct has been complied with by the Board Membersand the Senior Management.

d) Risk Management Policy.The Board at its meeting held on the 31st October, 2005, had approved the Risk Management Policy for Risk Assessmentand its Minimization and the same has been posted on the Company’s website. During the year, the Board has reviewedthe matter and decided to take the services of a Risk Management Consultant to appraise the efficacy of the RiskManagement Policy of the Company, the key risks associated with the business of the Company and the measuresadopted to minimize the same.

e) CEO/ CFO CertificateIn compliance with Clause 49 of the Listing agreement, a Certificate dated June 21, 2007 certifying:

(i) truthfulness of the financial statements of the Company;(ii) fairness and legality of the financial statements of the Company;(iii) adequacy and effectiveness of the internal controls of the Company; and(iv) availability of adequate information to the auditors and the Audit Committee of the Company.

has been given, jointly by Mr. Anil Kumar, Whole Time Director & CEO and Mr. Anup Kapoor, CFO of the Company, for theyear ended the 31st March 2007 and placed before the Board at its meeting held on the 25th June 2007, when the Boardapproved the Audited Accounts for the year ended on the said date. The Annual Report also contains the said Certificate.

6. MEANS OF COMMUNICATION

a) Financial Results

During the Financial Year 2006-2007, the quarterly/half-yearly unaudited financial results subjected to limited review /audit by the Statutory Auditors and the annual audited financial results have been placed on Company’s web site: http://www.ansalapi.com and also posted on SEBI’s Electronic Data Information Filing and Retrieval (EDIFAR) website to complywith Clause 51 of the Listing Agreement, on a regular basis.

The Company’s web site has also other information on its business/projects and management, and also for the investors.It also has the Company’s policy and code for dealing in the securities of the Company as per SEBI (Prohibition of InsiderTrading) Regulations, 1992. Moreover, the share holding pattern, financial results and other related information is alsouploaded on the Company’s website on regular basis.

The Financial Results are published in leading national newspapers as detailed here-in-below, on regular basis as per therequirement of the Clause 41 of the Listing Agreement:-

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Quarter Name of the Newspaper Date of Publication Quarter ended 30.06.2006 The Financial Express (English) August 2, 2006

Jansatta (Hindi)Quarter/half yearended The Times of India November 30, 200630.09.2006 (Audited) & The Economic Times(BothEnglish)

Jansatta (Hindi)Quarter ended The Financial Express January 31, 200731.12.2006 (Audited) & The Economic Times (English)

Jansatta (Hindi)Quarter /year ended The Financial Express June 26, 200731.03.2007 (Audited) & The Economic Times (Both English)

Jansatta (Hindi)Quarter ended 30.06.2007 The Financial Express (Both English) July 30, 2007

Jansatta (Hindi)

b) Other information

Various notices/other information required to be published as per the provisions of the Companies Act, 1956 / ListingAgreement etc., are published in the leading newspapers, from time to time.Presentation are made, from time to time, to potential investors / research analysts.The investor/others can have e-mail communication with the Company at email ID info@ansalapi.com /shareholderservice@ansalapi.com. They may also directly write to the Company at its Registered Office in New Delhi.

c) Managements’ Discussion and Analysis ReportThe Managements’ Discussion and Analysis Report is placed in the separate section of the Annual report.

7. GENERAL SHAREHOLDERS INFORMATION

a) Forthcoming Annual General Meeting

Day, Date and Time Saturday, the 22nd September, 2007 At 11.00 A.M.Venue Sri Sathya Sai International Centre & School, Lodhi Road,

New Delhi-110003

b) Directors retiring by rotation and eligible for re-appointment:

i) Mr. D.N. Davar :

Mr. D. N. Davar, 73 years, B.Com (Hons.), M.A. (Eco.), CAIIB and a Fellow member of EconomicDevelopment Institute of World Bank, is an eminent professional, formerly Chairman of IFCI andpresently on the Board of a number of reputed companies, has vast experience and expertise infinance, banking and corporate laws. He joined the Board of the Company on August 16, 1995, asan independent Director and was last re-appointed as director, liable to retire by rotation, at theAnnual General Meeting held on the September 26, 2005. He is due to retire by rotation in theensuing Annual General Meeting. He is the Chairman of the Audit Committee of the Company.His Directorships in other companies (as per latest declaration given u/s. 299/305 of the CompaniesAct, 1956) are as follows:1. Sandhar Technologies Ltd.2. Sandhar Infosystems Ltd.3. OCL India Limited*4. HEG Limited*5. Indo –Continental Hotels & Resorts Ltd.6. Hero Honda Finlease Limited*7. Jai Prakash Power Ventures Ltd.*8. Jai Prakash Associates Ltd.*9. Adyar Gate Hotels Ltd.*10. Jai Prakash Hydro Power Ltd.11. Rajasthan Spinning & Weaving Ltd.*12. Maral Overseas Ltd.*13. Ahlcon Parenterals (India) Ltd14. Titagarh Wagons Ltd.15. S.P. Wahi Technology & Management Consultants Pvt. Ltd.16. Sandhar Steady Stream Tolling Pvt. Ltd.17. ITIDA CAD Services Pvt. Ltd.

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ii) Mr. Rahul C. Kirloskar :

Mr. Rahul C. Kirloskar, 44 years, B. Sc (Mechanical Engineer) is a well-known industrialist and ison the Board of several reputed Companies in Kirloskar Group. He joined the Board of the Companyon 11th February, 1992 and was last re-appointed as a director, liable to retire by rotation, at theAnnual General Meeting held on the 26th September, 2005, and is due to retire by rotation in theensuing Annual General Meeting.

His Directorships in other companies (as per latest declaration given u/s. 299/305 of the CompaniesAct, 1956) are as follows:1. Kirloskar Pneumatic Co. Ltd.*2. Kirloskar Brothers Ltd.3. Quadrant Communications Ltd.4. Kirloskar Oil Engines Ltd.5. Kirloskar Services Pvt. Ltd.6. Alpak Investments Pvt. Ltd.7. Pratibha Communications Pvt. Ltd8. Kirloskar Kenya Ltd., Nairobi, Kenya9. Kirloskar Drilling Co. Ltd., Kenya10. Kirloskar Services Kenya Ltd, Kenya11. Kirsons Tradings (S.A.)(Pte.) Ltd.

iii) Mr. P. R. Khanna:

Mr. P. R. Khanna, 74 years, is a Fellow Member of the Institute of Chartered Accountants of India,having over 40 years of experience in practice. He had been a member of the Central Council of theInstitute of Chartered Accountants of India and was also a Trustee of the Unit Trust of India. Hejoined the Board of the Company on August 30, 2003 as an independent director and was lastreappointed as Director, liable to retire by rotation, at the Annual General Meeting held on theSeptember 26, 2005, and is due to retire by rotation in the ensuing Annual General Meeting.

His Directorships in other companies (as per latest declaration given u/s. 299/305 of the CompaniesAct, 1956) are as follows:

1. Indag Rubber Ltd.*2. DCM Shriram Industries Ltd.*3. Uniproducts (India) Ltd.4. UTI Asset Management Co. Pvt. Ltd.5. Control & Switchgears Contractors Ltd.*6. Nabha Development Initiative (Sec 25 Co.)

He is also a member of the Governing Body of the following:

1. Shriram College of Commerce2. Shriram Scientific and Industrial Research Foundation.

He is also a Trustee of the following Trusts :1. ICRA Employee Welfare Trust2. Nabha Foundation

* Represents the Membership(s)/ Chairmanship(s) of the Committee/s formed by these Companies.

c) Financial Calendar

Calendar of the events for the Financial Year 2007-08 (April, 2007 to March,2008), excluding Extra Ordinary GeneralMeeting, if any, that may be required to be held:-

Results for Quarter and for Approved by the Board on the 25th June, 2007the Year ended 31.03.2007.

First Quarter Results – 30.06.2007 Approved by the Board on the 28th July, 2007

Annual General Meeting 22nd September, 2007Second Quarter / half yearly Will be considered by the Board during theResults - 30.09.2007 3rd/4th week of October, 2007 (indicative)Third Quarter Results - 31.12.2007 Will be considered by the Board during the 3rd/

4th week of January, 2008 (indicative)

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d) Dividend

The Board of Directors of the Company has paid an Interim Dividend @ 15% on the paid up equity share capital of Rs28,37,52,750/- {Pre Bonus Shares} on the basis of financial results for the period ended the December 31, 2006. Thepayment was made in March, 2007.In addition to the payment of Interim Dividend, the Board of Directors at its meeting held on the 25th June, 2007 hasrecommended Final Dividend @ 10% on the enhanced paid up equity share capital of Rs. 56,75,05,500/- { Post BonusShares} for the year ended the 31st March, 2007 and it will be paid, on approval, to the Members whose names shallappear on the Company’s Register of Members / Register of Beneficial Owners as on the last date of the book closure i.e.September 22, 2007 if approved at the Annual General Meeting to be held on the 22nd September 2007.

e) Book Closure/ Record Dates19th September, 2006 was fixed as record date for the purpose of issue and allotment of equity shares to theshareholders of Ansal Township Projects Ltd. (ATPL), the transferor Company, consequent upon theamalgamation of ATPL with the Company in terms of the Order of the Delhi High Court.

21st March, 2007 was fixed as record date for the purpose of payment of Interim Dividend.

24th April, 2007 was fixed as record date for the purpose of crediting the bonus shares.

Your Company’s Register of Beneficial Owners, Register of Members and Share Transfer Books shall remainclosed for the purpose of payment of dividend from Thursday, the 13th September, 2007, to Saturday the22nd September, 2007 (both days inclusive).

The Company’s Equity Shares Address of the Stock Exchangesare listed on theStock Exchanges located at

Delhi (DSE) The Delhi Stock Exchange Asso. Ltd.D.S.E. House, Turkman Gate,3/1, Asaf Ali Road,New Delhi - 110 002

Mumbai (BSE & NSE)i) Bombay Stock Exchange Ltd (BSE)

25, P J Towers, Dalal Street, Mumbai – 400 001

ii) National Stock Exchange of India Ltd. (NSE)Exchange Plaza, Bandra – Kurla Complex,Bandra (East) Mumbai – 400 051

500013 – BSE01188 – DSEANSAL INFRA - NSE.

INE-436A01026 as allotted by NSDL & CDSLafter subdivision of Equity Shares(INE-436A01018 – old ISIN before subdivision ofEquity Shares)

i) National Securities Depository Limited(NSDL)

ii) Central Depository Service (India) Limited(CDSL)

Stock Code/ Symbol for EquityShares

ISIN No. of the Company’sEquity Shares in the DematForm

Depositories Connectivity

Listing fee has been duly paid to all the Stock Exchanges for the Financial Year 2007-08

f) Listing on the Stock Exchanges

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g) Market Price Data

(i) The Market Price data and volume of the Company’s shares traded in Bombay Stock Exchange Ltd, during the FinancialYear 2006-2007 and during the 1st quarter of the Financial year 2007-2008 were as follows:-

Month/Year Open High (Rs.) Low Close No. of Shares No. of Net Turnover (Rs.) (Rs.) (Rs.) Traded Trades (Rs.)

(During the Financial Year 2006-2007)

April, 2006 734.95 1213.60 734.95 1213.60 768468 14933 652,576,393.00

May, 2006 1274.25 1626.15 621.80 668.70 1975794 25986 1,786,505,243.00

June, 2006 669.50 699.00 343.95 412.80 1927075 24594 833,450,841.00

July, 2006 425.10 477.80 307.00 386.55 2963425 55040 1,204,966,180.00

August, 2006 388.70 524.90 367.50 440.70 2327369 50400 1,048,840,087.00

Sep, 2006 439.95 585.95 400.00 585.70 2768711 43459 1,341,950,404.00

Oct, 2006 583.40 884.10 548.50 827.40 4545847 89079 3,018,493,854.00

Nov, 2006 863.00 1104.00 790.00 964.05 5975320 122259 5,566,521,632.00

Dec, 2006 972.70 1134.45 843.00 890.60 4190858 92449 4,111,888,583.00

Jan, 2007 899.45 1004.80 775.90 781.35 1997495 45978 1,791,510,412.00

Feb, 2007 799.00 879.55 545.95 581.25 2840600 50381 1,992,076,688.00

March, 2007 577.00 598.00 564.00 585.95 64755 1923 37,550,205.00

During the Quarter ended 30th June, 2007 (i.e. 1st quarter of the financial year 2007-08)

April, 2007 515.50 515.90 250.00 287.70 2008944 37499 835,555,974.00

May, 2007 294.90 366.95 270.05 330.90 3432658 64413 1,124,460,795.00

June, 2007 335.05 347.00 255.00 267.15 4674487 92188 1,358,794,266.00

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(ii) Performance of the Share price of the Company in comparison to BSE Sensex

Year BSE Sensex Share Price of the % ChangeCompany (Rs.) (as compared to last year)

Sensex Shares Price2002 3377.28 11.30 3.523% 36.144%2003 5838.96 38.15 72.889% 237.610%2004 6602.69 74.00 13.080% 93.971%2005 9397.93 378.70 42.335% 411.756%2006 13786.91 890.60 46.70% 135.17%2007 14424.87 238.55 4.62% * Not comparable as

price is ex-bonus

Source: BSE Website (Closing Price) {no specific date mentioned in historical data}* The Company has issued and allotted on 04.05.2007 Bonus Equity Shares in the ratio of 1:1

h) Entry of Equity Shares of the Company in Futures & Options Segment

The Stock Exchanges (BSE & NSE), on the direction issued by SEBI, has permitted the trading of Equity Shares ofthe Company in Futures and Options Segment w.e.f. 14.05.2007

i) BSE Realty IndexThe Bombay Stock Exchange Ltd. (BSE) in recognition of the growing importance of the Real Estate Sector in theIndian Economy and to meet the needs of the Investors, had announced the launch of “BSE Realty Index” on July9, 2007. Your Company has been recognized as one of the constituents of the BSE Realty Index.

j) Category of Shareholders as on the 30.06.2007

Sl. No. Category No. of Shares held % Shareholding

A. Shareholding of Promoter andPromoter Group

1. Indian Promoters: Individual / HUF 47868050 42.17 Bodies Corporate 26940870 23.74

2. Foreign Promoters 0 0B Public Shareholding1. Institution(a) Mutual Funds/UTI 8167244 7.20(b) Financial Institutions/Banks 1186700 1.04(c ) Central Government/State Government(s) 0 0(d) Venture Capital Funds 0 0(e) Insurance Companies 580000 0.51(f) Foreign Institutional Investors 14493299 12.77(g) Foreign Venture Capital Investors 0 02. Non-institutions(a) Bodies Corporate 3042549 2.68(b) Individuals-

i) Individual shareholders holding 9078736 8.00 nominal share capital upto Rs.1 lacii) Individual shareholders holding nominal 1453728 1.28 share capital in excess of Rs.1 lac

(c) Others-i) Non Resident Indians 213799 0.19ii) Clearing Members 205974 0.18iii) Hindu Undivided families 270151 0.24

Total :- 113501100 100

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Sl. Shareholding of Shareholders holding Nominal value of Shares % of Equity CapitalNo. Nominal Value * Shares in each category held in each category held in each category

of Rs. No. % Physical Demat Physical DematForm Form Form Form

01. 1 to 2500 30414 84.033 1165155 14123880 0.21 2.49

02. 2501 to 5000 4229 11.685 7856520 9288370 1.38 1.64

03. 5001 to 10000 790 2.183 732000 5355030 0.13 0.94

04. 10001 to 20000 323 0.892 388250 4469670 0.07 0.79

05. 20001 to 30000 127 0.351 127500 3067685 0.02 0.54

06. 30001 to 40000 53 0.146 36000 1803295 0.01 0.32

07. 40001 to 50000 42 0.116 0 1957910 0 0.35

08. 50001 to 100000 83 0.229 258000 5697020 0.04 1.00

09. 100001 and above 132 0.365 0 511179215 0 90.07

Total 36193 100.000 10563425 556942075 1.86 98.14

Net Total of both columns 567505500 100

* Nominal Value of each share is Rs. 5/- each fully paid up.

k) Distribution of Shareholding as on the 30.06.2007

Shareholding Pattern

Promoters, 65.91%

Fis and Bank, 1.04%

Others, 0.61%

Insurance Cos., 0.51%

Private Corporate Bodies, 2.68%

Indian Public (Individuals), 9.28%

FIIs, 12.77%

Mutual Funds and UTI, 7.20%

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l) Share Transfer Process

Equity Shares of your Company being in compulsory demat mode are traded / transferable throughthe depository system. M/s Intime Spectrum Registry Ltd., having its office at A-40, 2nd Floor, NarainaIndustrial Area, Phase-II, Near Batra Banquet Hall, New Delhi-110028 is the Share Transfer Agentfor all the work related to share registry both in terms of physical and electronic, in terms of theSecurities & Exchange Board of India’s (SEBI) Circular No. D&CC/FITTC/CIR-15/2002 dated 27th

December, 2002.Requests received for registration of transfer of shares in physical form, after being found in orderin all respect, are recommended for approval of registration of transfer to “Share Transfer Committee”of your Company. The Committee meets approximately once in a fortnight and transfer process isgenerally completed within 30 days.Your Company is adhering to all the guidelines /regulations issued by SEBI/Stock Exchanges inrelation to or in connection with transfer/ transmission, dematerialization/ rematerialization of sharesand has adopted administrative set up, which is always investors’ friendly.

m) Dematerialization of SharesThe trading in the Equity Shares of the Company in dematerialized form became mandatory w.e.f.28th May, 2001 and to facilitate trading in this form your Company has entered into the agreementwith depository system of the both National Securities Depository Limited (NSDL) and CentralDepository Service (India) Limited (CDSL).All the Requests for dematerialization of shares are processed and recorded through Intime SpectrumRegistry Ltd. (STA) with NSDL and CDSL Depositories. The dematerialization takes place within21 days of generation of Demat Registration Request. The positions of dematerialized shares as well as physical shares as on 30th June, 2007, are asunder:-

Particulars No. of Shares % of total Shares

Shares in Physical mode 21,12,685 1.86Shares in Demat mode:-

NSDL 10,92,19,053 96.23CDSL 21,69,362 1.91 Total : 11,35,01,100 100.00

1.91% 1.86%

96.28%Shares in Physical mode NSDL CDSL

96.23%

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n) Address for Correspondence/information

Address of Registrar/ Statutory Auditors

Registrar and Share Transfer Agent Statutory AuditorsMr. J. Mitra M/s Khanna & AnnadhanamM/s. Intime Spectrum Registry Ltd., Chartered AccountantsA-40, 2nd Floor, Naraina Industrial Area, Phase-II, 706, Akash Deep Building,Near Batra Banquet Hall, New Delhi-110028 Barakhamba Road,New Delhi- 110001Tel. No. 41410592-94 Tel. No. 23315110, 119Email- delhi@intimespectrum.com

8. SECRETARIAL AUDIT REPORT

Pursuant to circular No. D&CC/ITCC/CIR/ 16/2002/ 31.12.2002 of SEBI, a qualified Practicing Company Secretarycarries out the Secretarial Audit for reconciliation of total shares of the Company held in Depositories (i.e. with theNSDL or CDSL) and in Physical Form, tallying with the admitted, issued / paid-up and listed capital the total admittedcapital. The audit is carried out every quarter and the Report thereon is submitted to the Stock Exchanges and isalso place before the Board of Directors. The audit, inter alia, confirms that the total listed and paid – up capital ofthe Company is in agreement with the aggregate of the total number of shares in dematerialized form (held withNSDL and CDSL) and total number of shares in physical form.

9. NON-MANDATORY REQUIREMENTS UNDER CLAUSE 49 OF THE LISTING AGREEMENT

The status of compliance with the non-mandatory requirements of Clause 49 of the Listing Agreement is providedbelow:

1. Non- Executive Chairman’s Office: The Chairman of your Company holds the position of the ExecutiveChairman and hence this provision is not applicable.

2. Tenure of Independent Directors: In terms of the Governance Policy of the Company, all Directors, includingIndependent Directors, are appointed/ re-appointed in terms of the provisions of Companies Act, 1956. Nomaximum tenure for Independent Directors has been specifically determined by the Board.

3. Remuneration Committee: The Company has a Remuneration Committee under the nomenclature‘Compensation/ Remuneration Committee’, the details of which are provided in this Report under the section‘Committees of the Board – Compensation/ Remuneration Committee’.

4. Shareholder Rights: The quarterly, half-yearly and annual financial results of the Company are published innewspapers on an all India basis and are also posted on the Company’s corporate websiteviz.www.ansalapi.com. Significant events are also posted on this website. The complete Annual Report is sent toevery Shareholder of the Company.

5. Audit Qualifications: It is always the Company’s endeavor to present unqualified financial statements.

Registrar and Share Transfer Agent(for Dematerialization and Sharetransfer related queries)M/s. Intime Spectrum Registry Ltd.A-40,2nd Floor,Naraina IndustrialArea, Phase -II,Near Batra Banquet HallNew Delhi - 110028Tel. No. 41410592-94

Company(for dividend, Annual Report, and any otherrelated matters)Company SecretaryAnsal Properties & Infrastructure Ltd.115, Ansal Bhawan, 16 Kasturba Gandhi Marg,New Delhi - 110001Tel. : 23353550, 66302269-77

Corporate Website: http://www.ansalapi.com E.mail: info@ansalapi.com shareholderservice@ansalapi.com

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6. Training of Board members: The Board of Directors of the Company is briefed, on regular basis, by theChairman and Whole Time Director & CEO, with the development and performance of the Company so as toenable them to monitor the same at regular intervals.

7. Mechanism for evaluation of Non-Executive Directors: The Board of Directors including non-executivedirectors are vested with responsibility of strategic supervision of your Company. In view of the same, theBoard, informally, evaluates non-executive directors on the basis of individual contribution towards fulfillmentof this responsibility.

8. Whistle-Blower Policy: The Company encourages an open door policy where employees have access to thesenior management. In terms of APIL’s Code of Conduct, any instance of non-adherence to the Code is to bebrought to the attention of the immediate reporting authority, who is required to report the same appropriatelyto the Board.

Declaration for compliance of Code of Conduct

I, Anil Kumar, Whole Time Director & CEO of the Company hereby confirm that all the Board Members and SeniorManagement have affirmed, individually compliance with the Code of Conduct for the period ended the 31st March, 2007.

For Ansal Properties & Infrastructure Ltd

(Anil Kumar)Whole Time Director & CEO

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Certificate under clause 49 (V) of the Listing Agreement

The Board of DirectorsAnsal Properties & Infrastructure Ltd.115, Ansal Bhawan16, K G MargNew Delhi – 110 001

We, the undersigned certify to the Board that:

(a) We have reviewed the financial statements and the cash flow statement for the financial yearending 31st March, 2007 and that to the best of our knowledge and belief:

(i) These statements do not contain any materially untrue statement or omit any materialfact or contain statements that might be misleading;

(ii) These statements together present a true and fair view of the company’s affairs andare in compliance with existing accounting standards, applicable laws and regulations.

(b) There are, to the best of our knowledge and belief, no transactions entered into by the Companyduring the year which are fraudulent, illegal or violative of the Company’s code of conduct.

(c) We accept responsibility for maintaining the internal controls in the Company and that we haveevaluated the effectiveness of the internal control systems of the Company and to the best ofour knowledge and belief, there are no deficiencies in the design or operation of internal controls,of which we are aware and which are needed to be disclosed to the auditors and the AuditCommittee.

(d) We have indicated to the auditors and the Audit Committee, as may be applicable:

(i) Significant changes in internal control during the year;

(ii) Significant changes in accounting policies during the year and that the same havebeen disclosed in the notes to the financial statements; and

(iii) Instances of significant fraud of which we have become aware and the involvementtherein, if any, of the management or an employee having a significant role in theCompany’s internal control system.

For Ansal Properties & Infrastructure Ltd.

(Anil Kumar) (Anup Kapoor)Whole Time Director & CEO Chief Financial Officer

Place : New DelhiDate : 21st June, 2007

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Compliance Certificate from the Statutory Auditors of the Company

The Members ofAnsal Properties & Infrastructure Ltd.,New Delhi.

We have examined the compliance of conditions of Corporate Governance by Ansal Properties& Infrastructure Limited for the year ended 31st March, 2007, as stipulated in Clause 49 of theListing Agreement of the said Company with the Stock Exchanges in India.

We have conducted our examination on the basis of the relevant records and documentsmaintained by the Company for the year ended 31st March, 2007 and furnished to us for thepurpose of the review and the information and explanations given to us by the Companyduring the course of such review.

The compliance of conditions of Corporate Governance is the responsibility of themanagement. Our examination was limited to procedures and implementation thereof, adoptedby the Company for ensuring the compliance of the conditions of the Corporate Governance.It is neither an audit nor an expression of opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us,we certify that the Company has, in all material respect complied with the conditions ofCorporate Governance as stipulated in the above mentioned Listing Agreement.

We further state that such compliance is neither an assurance as to the future viability of theCompany nor the efficiency or effectiveness with which the management has conducted theaffairs of the Company.

for Khanna & Annadhanam Chartered Accountants

Place : New Delhi. ( P. S. Pabreja )Dated : 24th August, 2007 Partner

Membership No. 10692

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1. Operating Results of the CompanyThe Company has achieved a commendable growth during the year under review.Net Profit for the year 2006-07 stood at Rs 13,191 Lacs as against 4,056 Lacs in the year 2005-06, thus showing anincrease of 225%. Further the total turnover for the year ended March 31, 2007 stood at notably increased level ofRs 76,614 Lacs, as compared to Rs 35,515 Lacs for 2005-06, posting a 115% increase.Earning Per Share (EPS) has increased from Rs. 7.80 to Rs. 25.36, thus showing robust increase of 225% ascompared to year on year basis.The Company has paid an Interim Dividend @ 15% on the paid up equity share capital of Rs 28,37,52,750/- {PreBonus Shares} on the basis of financial results for the period ended the December 31, 2006, which has absorbedRs. 485 lacs including Dividend Tax. In addition to Interim Dividend, your Directors have recommended for yourapproval in the ensuing Annual General Meeting, payment of the Final Dividend at the rate of 10% on the enhancedpaid up equity share capital of Rs. 56,75,05,500/- { Post Bonus Shares} for the year ended the 31st March, 2007,and, an amount of Rs. 7500 lacs has been transferred to General Reserve.

2. Industry Structure and DevelopmentThe growth story for the Indian economy continues with a compounded annualized GDP growth of around 8.6 %over the last four years. The GDP growth in the last two years have been over 9 %, i.e. at around 9.4% in the year2006- 2007 and 9% in the year 2005- 2006. The growth has been wide spread and has moved away from thetraditional sectors.The story for India, however, has just begun and the economists believe that this is just the beginning. The GDPgrowth is expected to sustain at a CAGR of over 8.5% in the foreseeable future. Investments in the infrastructuresector have been buoyant over the last couple of years and the trend is likely to continue for the foreseeable future.Given the trend of the growth and more and more investments being pumped into the infrastructure sector it isexpected that the Country will be on a double digit growth path by the time the Eleventh Five Year Plan ends. Real estate will be a key driver and over USD 435 Bn. investment is expected in this sector over the next 5 years(Edelweiss Research). The growth in the economy is leading to a growing demand across the real estate verticals –be it the residential, commercial or retail.Real estate is also the second largest employment driver, next only to agriculture. This is because of the chain ofbackward and forward linkages that the sector has with other sectors of the economy. About 250 ancillary industriessuch as cement, steel, brick, timber, building material etc. are dependent on the real estate industry. An unit increasein expenditure in this sector has a multiplier effect and the capacity to generate income as high as five times.Demand for residential, commercial and retail real estate is rising throughout India, accompanied by increaseddemand for hotel accommodation and improved infrastructure.HousingThe market remains fundamentally bullish in this sector because the primary drivers for the sector still remainstrong. Indian Household consumption accounts for 65% of the GDP. The share of construction as a percentage ofGDP has risen from 5.2% in 2003 to over 7% currently. The housing sector has been growing at an average of 34%annually, while the hospitality industry grew 10-15% last year.As per the Tenth Five Year Plan, the housing shortage by the year 2007 is expected to be around 22.7 Mn units. Theinvestment required to fulfill this shortfall is well over Rs. 4,00,000 crore. Predominantly, the demand is in the Lowend to Medium Income Level housing units. The increasing level of prosperity and the ease in discounting the futureearnings – banks loan – makes it easier for buying a house. Another major contributing factor to boost the growth ofresidential housing property is income tax incentives on housing loans.CommercialThe IT / ITES / BPO industry demand is expected to grow at around 75-80 Mn sq ft of area every year over the next5 years. This sector alone makes up 80% of the commercial space demand in India. With the IT / ITES sectorexpected to grow significantly over the next few years the demand will principally be driven by the growth in thenumbers in the sector. The number of people employed in the IT / ITES sector is expected to grow from around 1.3Mn people currently to around 4.1 Mn over the next 5 years. Apart from the IT / ITES sector the office space growthwill also be driven by the Financial sector, including Services, Insurance and Banking, Bio technology, among others.At present the major cities occupy the foremost office space for these sectors. However, the need for low costalternatives is seeing other destinations predominantly in the Tier II cities.RetailRetail with a turnover of around USD 7.2 Mn is the biggest industry in the world. In India the organized retail isaround 5 % of the total volume. With almost all the big international names lined up for an entry in India the organizedretail is expected to grow to over 10 % in the next 5 years. The organized retail is also being driven by the increasingfocus of malls in the smaller cities, increasing disposable incomes and rising consumption rates.

*

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It is estimated that presently, an additional 46 million sq. feet for malls and multiplexes is being added in India, outof which 32 million sq. feet is spread over across seven major Indian cities. As many as 45 malls with over 9.5 millionsq. feet of retail real estate are expected to come up shortly in tier-2 cities like Jaipur, Chandigarh, Ludhiana,Nagpur, Baroda, Surat and Kochi.There is a need for opening up FDI in the retail business. It is expected that the Government would consider permittingliberalized FDI in retail, which would further increase demand for shopping malls, multiplexes, etc. in the Country.The entry of international retailers would bring in the required expertise to set the supply chain in place resulting inelimination of wastage, lower prices and better quality for consumers.Retail rents in India are still the lowest in the world. However, opening up of FDI in retail trading will not necessarilycause rents to rise, as this new demand will be more than offset by the additional stock.

Tier -2 citiesA significant shift in the real estate market has been a move from metros to its suburbs and to tier two cities havinga population of about one million and it is expected that there will be a gradual shift to tier three cities and to ruralareas. A number of townships are being developed in tier two cities all over the Country and over 100 such townships,each with over one hundred acres of land in various stages of planning and development. There is tremendousscope for more townships to come up in the next three to four years.

Special Economic Zones {SEZ}SEZs are specifically delineated duty free enclaves deemed to be foreign territories for purposes of Indian customcontrols, duties and tariffs. There are three main types of SEZs: integrated SEZs, which may consist of a number ofindustries; services SEZs, which may operate across a range of defined services; and sector specific SEZs, whichfocus on one particular industry line. SEZs, by virtue of their size, are expected to be a significant new source of realestate demand. In the next three years, SEZs are projected to generate $2 billion. An employment hub, SEZs arealso expecting employment growth of 50%. The employment figure currently stands at 95,000. SEZs can help createhigh quality infrastructure in pockets, provide a liberal and supportive business policy environment, thus giving afillip to the industry.

Price trendsProperty prices in India have sharply risen in the recent past. The Reserve Bank of India (RBI) has been trying toslow credit growth to the housing sector and interest rates are moving up. However, it is believed that the prices willremain steady and could be on a secular uptrend over the long term given the strength of the economy. We seeother drivers for property prices as relaxation in FDI and demand from real estate mutual funds and REITs.FDI in real estateIn March 2005, the Indian Government permitted FDI under the automatic route in the real estate sector to helporganize the real estate sector, bridge demand and supply gap, create more professionalism, bring superior technology,induce healthy competition and ensure availability of funds. This will also facilitate in the growth of the Country’sGDP. A large number of companies are looking at an opportunity to invest in India and some of the foreign playershave already tied up with Indian developers. A number of real estate venture capital funds are also looking at Indiaas the returns here are higher, as compared to returns from their own home countries.It is the view that time has arrived that the Indian Government allows real estate mutual funds and real estateinvestment trusts to start operating, so as to facilitate availability of funds in this sector, as is permitted overseas.Some private funds have applied to SEBI for approval.It is understood that few have received approval and startedinvesting in real estate. This will definitely ensure more availability of funds to the developers and faster growth ofthe real estate sector.

The Changing Face of Indian Real Estate:The Central Government is supporting repeal of the Urban land Ceiling & Regulation Act (ULCRA). Nine Stateshave since repealed the Act.Modification of Rent Control Act enabling greater freedom to the home owners who were earlier wary of rentingout flats, especially in large cities.Rationalization of property tax in some states and computerization of land records.Liberalization of FDI into real estate leading to a strong multiplier effect for the sector.The Central Government is understood to be planning to allocate USD 1.5 Bn for 60 cities to modify thelegislations and processes that are stalling the development of the sector. This assistance to States under theNational Urban Renewal Mission is subject to repealing the ULCRA, amending Rent Control Laws and reducingstamp duty to 5%. The Government is also understood to be working towards simplifying the procedures forprocurement of land, bringing down land cost and easing the various approval and clearance norms to lowergestation period.

3. Opportunities

The Real Estate Sector in India has assumed growing importance with the liberalization of the economy. Developmentsin the real estate sector as a whole are being driven by demand for:

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Ø more housing units in cities and towns because of growing urbanization of Indian population, burgeoningmiddle class, increased disposable income, easy availability of housing finance at cheaper rate and taxincentives;

Ø office premises by growing IT/ITES industry especially BPO;Ø shopping malls by growing retail segment;Ø multiplexes by evolving entertainment and hospitality sectors;Ø hotels/resorts by growing tourism industry;Ø SEZs by various sectors; andØ better infrastructure by the growing Indian Economy through all its sectors.

Opportunities seen in the Indian real estate sector are as follows:The Real Estate Market is projected to grow to $50 billion by 2010.CAGR of over 30% p.a. is expected over the next five years. A shortage of 12 million housing units in urban areas.Scope for 400 township projects over the next five years spread across 30 to 35 cities, each having a populationof about 0.5 million.Total project value dedicated to low and middle income housing in the next seven years is estimated at $40billion.The retail market for mortgages is currently valued at slightly over $5 billion.Considering that the outstanding loan to GDP ratio in India is less than 2%, the mortgage market is expectedto grow in excess of 25% over the next five years, so as to be at par with Asian peers.Income classes with annual incomes between Rs. 2 million and Rs. 5 million per year, Rs. 5 million and Rs. 10million per year, and in excess of Rs. 10 million per year are expected to increase in size by 23%, 25% and28% respectively from fiscal 2005 to fiscal 2010.The recently announced Urban Infrastructure Renewal Mission is expected to give a boost to the sector,wherein $11.5 billion has been earmarked over the next five years for 60 cities.Investment opportunities exist in almost every segment of the business:-Housing: About 20 million new units expected to be built in five years.Office Space for IT/ITES: Five-fold increase in office space requirement over the next three years.Commercial space for organized retailing: 200 million sq. feet by 2010.Hotels & Hospitality: Over 50,000 new rooms in the next 5 years.

4. ThreatsFollowing one or more of the perceived threats could negatively affect the business of your Company:-o Sanctioning process through the authorities is slow and time consuming.o Archaic tenancy laws.o The industry is highly disjointed and competitive and increased competitive pressure may adversely affect our

results.o Fluctuations in market conditions may affect our ability to sell our projects at expected prices, which could

adversely affect our revenues and earnings.o The projects in the real estate business involve purchasing small parcels of lands within a large area and

failure to purchase any strategically located parcels may lead to failure of the entire project.o The Company may suffer if compulsory price correction is exercised by the Government.o Certain tax benefits under the provisions of the I.T. Act, may, if withdrawn, adversely affect the Company’s

financial condition and results of operations.o The growth of the Company requires further capital, which may not be available on terms acceptable to it.o Potential limitations on the supply of land could reduce our revenues or negatively impact the results of the

Company’s operations.o Considerable increases in prices or shortage of building materials could harm the Company’s results of

operations and financial condition.o The Company undertakes projects jointly with third parties, which involve certain risks.o The Company is reliant on its directors and senior management team and the loss of key members or failure

to attract skilled personnel may adversely affect the busineso The Company conducts due diligence and assessment exercises prior to undertaking a project, but may not be

able to assess or identify certain risks and liabilities.o The business is subject to extensive statutory or governmental regulations.

52

o A number of the Company’s projects in the real estate business and construction business are not covered byinsurance or such insurance as in place may not be sufficient to cover all risks in these projects.

o The ability to sell the Company’s products will be adversely affected by the availability of finances at reasonablecost to potential customers, especially buyers of residential properties.

o The Company is dependent on various sub-contractors or specialist agencies to construct and develop projects.o Covenants with institutional lenders and other contractual commitments may restrict operations and ability to

expand which may hurt the business and results of operations and financial condition.o Work stoppages and other labour problems could adversely affect the businesso Change in the business policies of the Government.

5. PerformancePresently your Company is undertaking its Projects mainly in four states of India i.e. Uttar Pradesh, Haryana, Rajasthan& Punjab on its own or through joint ventures/collaborators. Some of the projects in the process of various stages ofdevelopment in these States are as follows:-

Projects in the State of Uttar Pradesh

IT SEZ, Greater NoidaHi-Tech City, DadriSushant Taj City, AgraAquapolis Lake Front township, GhaziabadAnsal Plaza, Greater NoidaSushant City, MeerutSushant Golf City, Lucknow

Projects in the State of HaryanaAnsal Highway Plaza, SonepatSushant City, KundliSunshine County, KundliSushant Royal, KarnalGreenscape, SonepatSushant City, PanipatRoman Court, SonepatSushant Homez, SonepatSushant Homes, PanipatGalaxy Court, PanipatAnsal Plaza-Palam Vihar, GurgaonAnsal Plaza, PanipatValley View Estate, GawalpahariJade Gardens, Palam ViharCozy Homez, Palam Vihar

Projects in the State of RajasthanSushant City, AjmerSushant City, JaipurAnsal Plaza, JodhpurAnsal Plaza, Ajmer

Projects in the State of Punjab

Boulevard, LudhianaOrchard County, MohaliGolf links MohaliHampton Court, LudhianaThe Ansal Highway Plaza, Jalandhar

6. Prospect & Outlook

The important thrust area of your Company, being smaller cities or better known as Tier 2 cities, is proving to be abenign step. In its attempt to provide the residents of these cities with world-class real estate solutions your Companyhas undertaken / is under the process of launching the projects in various States like Rajasthan, Haryana, U.P.,Punjab, NCR regions. It is in the process of developing Integrated Townships in cities like Meerut, Karnal, YamunaNagar, Kurukshetra, Agra, Ambala, Ghaziabad, Lucknow, Bhatinda etc.

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Your Company is also growing its competitive benefit by moving to strategic segments i.e. Special Economic Zones(SEZ) and IT Parks. It has recognized potential locations for establishing world class IT Parks and SEZs all overNorthern India. The IT Park at Greater Noida has been notified as SEZ for IT and/or ITES by Central Government. Ithas also received in principle approval for multi product SEZ in Rajasthan, formal approval for single productengineering goods in Sonepat and a formal approval for an IT SEZ in Gurgaon.Your Company continues to emphasize and build upon its well acknowledged brand image of “Ansal Plaza” and“Sushant City”. It has successfully launched Ansal Plaza, Greater Noida (under development) and is in advancestages of launching Ansal Plazas in various locations like Meerut, Agra, Lucknow, Panipat to name a few. Similarlythe Company has successfully launched Sushant City projects in various Tier-II cities like Meerut, Sonepat. It is alsoproposing to develop an integrated industrial estate in Gurgaon, NCR region.Quality being the most emphatic priority of your Company, all efforts are being made to use the best of construction,architecture and allied inputs, both from highly reputed national and international companies. Some of these areShahpurjee Palanjee, Ahluwalia Construction, VRM Global, Enersave Consultants, Toronto, Canada, APA Architect,New York, USA, ACL Pte Ltd., Singapore. This will further enhance the prospects of your Company in an intenselycompetitive environment and make the outlook better.

7. Risks and concernsØ Price riskØ Demand riskØ Increased cost of developmentØ Rising interest rateØ Phasing out of tax incentivesØ Political risk

Price: Real estate price cycles have the greatest impact on the margins of the developers, because land costsaccount for a large portion of the constructed property. Real estate prices in the past have fluctuated in respect ofprocuring land, construction of the project and its eventual completion, thereby exposing project developers to thevolatility of prices.

Demand : Demand risk for real estate developers indicates the ability to sell properties based on location, brand,track record, quality and timeliness of completion. Most real estate developers try to address this risk by undertakingmarket surveys in order to assess the demand for their properties. In addition, demand is also strongly influenced bypolicy decisions relating to housing incentives.Cost of development: The costs in a housing project consist of land costs, construction costs and employee costs.As per the industry source, the prices of steel and cement, which comprise a major portion of the construction cost,are expected to rise in coming 1-2 years. This increase in cost, however, is expected to be outpaced by the growthrate of individual disposable income and therefore is not likely to depress the demand growth for housing units.Interest rate: The interest rates have already increased by more than 400 basis point over the low achieved in 2006.Banks are already seeing a lesser off take in the housing loans and this may adversely effect the sales of yourCompany.Tax incentives: The existing tax incentives available for housing loans is also one of the major demand boosters.These tax incentives, however, based on recommendations of various committees/panels and possibilities of beingmodified or withdrawn could never be ruled out.Political risk: Change in the government may lead to change in the policies of the state. This may lead to delay inthe sanctioning of the projects or adversely effect the growth plans of the Company.

8. Internal control system and their adequacyYour Company has laid down proper and adequate internal controls systems to ensure effectiveness of operations,accuracy and promptness of financial reporting and observance based on the guidelines, laws & regulations. YourCompany remains steadfast in ensuring an efficient internal control environment that provides assurance in respectof the efficiency of operations and security of assets.The internal audit processes, both at business and corporate levels, continuously check the effectiveness andadequacy of the internal control environment across the Company. Internal audit functions are done by the in- houseinternal auditor and also by external and independent Chartered Accountants firm.During the year under review, five meetings of the Audit Committee of the Board (which comprises independent andnon executive Directors) were held to review, inter alia, the internal audit reports along with management commentsand the follow up actions taken thereon. Hence implementation of the suggestions / recommendation of internalauditors are also continuously monitored by the Audit Committee.

9. Financial Performance (1st April, 2006 to 31st March, 2007)a) Share Capital

As on March 31, 2007, paid up equity share capital of your Company stood at Rs. 28,37,52,750/- (i.e. 5,67,50,550Equity Shares of Rs. 5/- each, fully paid up). However, consequent upon the issue and allotment of BonusEquity Shares on 04.05.2007 in the ratio of 1:1 in terms of the approval of members received on 19.03.2007 by

54

voting through postal ballot, the paid up share capital of the Company increased from Rs. 28,37,52,750/- to Rs.56,75,05,500/- (i.e. 11,35,01,100 Equity Shares of Rs. 5/- each, fully paid up).

b) Reserve & Surplus An amount of Rs.7500 lacs has been transferred to General Reserve out of the Net Profit for the year ended31.03.2007 as compared to the Rs. 3000 lacs in the previous year.

c) LoansSecured loans stood at Rs. 23361.37 lacs as compared to Rs. 8930.98 lacs in the previous year. This includesan amount of Rs. 5000 lacs raised by issue of 819659 no. of Zero Coupon Secured Redeemable OptionallyConvertible Debentures (“ROCD”) of Rs 100/- each to HDFC.

Unsecured loans stood at Rs. 720.91 lacs as compared to Rs. 1054.46 lacs in the previous year.d) Current Assets

i) Inventories : During the year, Inventory level has increased by Rs. 18821.83 lacs i.e. from Rs. 30639.53lacs to Rs. 49461.36 lacs

ii) Sundry Debtors: There is also an increase in Sundry Debtors of Rs. 7167.21 lacs i.e. from Rs. 6039.98lacs to Rs. 13207.19 lacs.

iii) Loans & Advances : During the year, the loans and advances also increased by Rs. 60519.86 lacs i.e.from Rs. 30844.72 lacs to Rs. 91364.58 lacs.

iv) Current Liabilities : Current Liabilities stood at Rs. 63532.75 lacs as compared to Rs. 49500.91 lacs inthe previous year.

e) Net Current Assets

During the year, the net current assets of the Company have increased by Rs. 92492.75 lacs i.e. from Rs.20486.94 lacs as compared to Rs. 112979.69 lacs

f) Interest

During Financial 2006-07, Company has paid an amount of Rs. 1943.41 as interest as compared to Rs.1203.68 lacs in the previous year.

g) Staff Expenses

During the year, the staff cost of the Company stood at Rs. 2255.96 lacs as compared to Rs. 952.08 lacs in theprevious year. This includes Employees Stock Option Compensation Expenses of Rs. 45.97 lacs pursuanceto grant of 1,16,700 Options on 26.10.2006 in terms of the approval of the members received on 02.05.2006.

h) Depreciation

During Financial 2006-2007, depreciation increased from Rs. 213.14 lacs to Rs. 310.64 lacs.

10. Human ResourcesYour Company believes that its employees are the most valuable assets and keeps focus on its human resource.Training programmes are conducted, on a regular basis, for the employees at all levels, for improvement of jobskills, growth and quality of their work, empowering and motivating them, and thereby raising their productivity. Thedelegation of authorities and responsibilities are also key to the empowerment of the employees. A system of evaluationof employees, their performance, need for training and consequent rewards by way of increased salaries andperquisites, and their advancement through promotion/elevation in the hierarchy, is well established.With the economy in an optimistic mode, as also the enhanced real estate activities of your Company, calling forincreased need for skilled man power for timely and effective delivery, efforts are being made and achieved towardsbuilding teams. This is being done on a continuous basis after analyzing varied sets of skills, knowledge, attitudeand behavior of manpower of the Company. All steps are also being taken for retaining best talents. Increasedbenefits and remuneration to the employees are going a long way to your Company remaining competitive in ahighly demanding man power environment. There has been continuous increase in the manpower strength and asof present there are about 840 employees on the rolls of the Company. They are working in a harmonious andteamwork atmosphere and employee relations are at all time high.

* NoteStatements in this Report on Management’s Discussion and Analysis describing the Company’s objectives, projections,estimates and expectations may be termed as forward looking statements within the meaning of applicable laws andregulations. Actual results may differ substantially or materially from those expressed or implied. Importantdevelopments that could affect your Company’s operations include, apart from any force majeure situation, adowntrend in the real estate sector, significant changes in political and economic environment in India or tax laws,litigation, labour relations, interest and other costs.

55

AUDITORS’ REPORT

1. We have audited the attached Balance Sheet of Ansal Properties Infrastructure Limited as at 31st March, 2007, theannexed Profit and Loss Account and Cash Flow Statement of the Company for the year ended on that date. Thesefinancial statements are the responsibility of the Company’s management. Our responsibility is to express an opinionon these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. These standards requirethat we plan and perform the audit to obtain reasonable assurance whether the financial statements are free ofmaterial mis-statement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosuresin the financial statements. An audit also includes assessing the accounting principles used and significant estimatesmade by management, as well as evaluating the overall financial statement presentation. We believe that our auditprovides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms ofsub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the mattersspecified in paragraphs 4 and 5 of the said order to the extent applicable.

4. Subject to our comments in the annexure referred to in paragraph 3 above, we report that:-

a) We have obtained all the information and explanations which to the best of our knowledge and belief werenecessary 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 appearsfrom our examination of the books.

c) The Balance Sheet and Profit & Loss Account dealt with by this report are in agreement with the books ofaccount.

d) In our opinion, the Balance Sheet and Profit & Loss account dealt with by this report comply with AccountingStandards referred to in Section 211 (3C) of the Companies Act, 1956.

e) On the basis of the written representations received from the directors, we report that none of the directors isdisqualified as on 31st March, 2007, from being appointed as a director in terms of clause (g) of sub-section (1)of Section 274 of the Companies Act, 1956

f) the accounts read with Accounting Policies and other notes in our opinion and to the best of our informationand according to the explanations given to us, give the information required by the Companies Act, 1956 in themanner so required and give a true and fair view in conformity with the Accounting Principles generally acceptedin India:-i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2007 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 Cash-Flow Statement, of Cash Flows for the year ended on that date.

For KHANNA & ANNADHANAMCHARTERED ACCOUNTANTS

Place : New Delhi ( P.S. Pabreja )Dated: 25th June 2007 Partner

Membership No.10692

56

ANNEXURE TO THE AUDITORS’ REPORT(REFERRED TO IN PARAGRAPH 3 THEREOF)

1. In respect of its fixed assets :

(a) The Company has maintained proper records showing full particulars including quantitative details and situation offixed assets.

(b) As explained to us all the fixed assets have been physically verified by the management in a phased periodicalmanner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. Nomaterial discrepancies were noticed on such physical verification.

(c ) In our opinion, the Company has not disposed of a substantial part of its fixed assets during the year and the goingconcern status of the Company is not affected.

2. In respect of its inventories

(a) The inventory has been physically verified during the year by the management. In our opinion, the frequency ofverification is reasonable.

(b) In our opinion and according to the explanations given to us, the procedures of physical verification of inventoriesfollowed by the management are reasonable and adequate in relation to the size of the Company and the nature ofits business.

(c) The Company has maintained proper records of inventory. As explained to us, there were no material discrepanciesnoticed on physical verification of inventory as compared to the book records.

3.(a) According to the information and explanations given to us, the company has not granted any loans, secured orunsecured to Companies, firms or other parties covered in the register maintained under section 301 of the CompaniesAct,1956. Accordingly, the provisions of clause 4(iii) (b), (c ) and (d) of the above said Order are not applicable to theCompany.

(b) According to the information and explanations given to us, the Company has taken loan and deposit from partiescovered in the register maintained under section 301 of the Companies Act, 1956.

(c) In our opinion and according to the information and explanations given to us, the rate of interest and other terms andconditions of such loans taken are not, prima facie, prejudicial to the interest of the Company.

(d) The Company is regular in payment of principal and interest.

4. In our opinion and according to the information and explanations given to us, there is a adequate internal controlsystem commensurate with the size of the Company and the nature of its business with regard to the purchase ofinventory and fixed assets and for the sale of goods and services. Further, on the basis of our examination of thebooks and records of the Company and according to the information and explanation given to us, we have neithercome across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internalcontrol procedures.

5.(a) According to information and explanation given to us and the books and records examined during the course of ouraudit, we are of the opinion that particulars of contracts or arrangements referred to in Section 301 of the CompaniesAct have been entered in the register required to be maintained under the section.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance ofcontracts or arrangements entered into the register in pursuance of section 301 of the Companies Act,1956 andexceeding the value of Rs.5,00,000/- in respect of any party during the year have been made at prices which arereasonable having regard to the prevailing market prices at the relevant time.

6. In our opinion and according to the information and explanations given to us, the company has complied with theprovisions of section 58A,58AA or any other relevant provisions of the Companies Act,1956 and the Companies(Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. According to theinformation and explanations given to us, in this regard, no order under aforesaid sections has been passed by theCompany Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunalon the Company.

7. In our opinion and according to the information and explanations given to us, the Company has an internal auditsystem which is commensurate with its size and nature of its business.

57

8. The Central Government has not prescribed the maintenance of cost records U/s209 (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 the records of the Company examined by us, in ouropinion, the Company is generally regular in depositing with appropriate authorities undisputed statutory duesincluding Provident Fund, Investor Education and Protection Fund, Employees’ State Insurance, Income-Tax, SalesTax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other statutory dues, wherever applicable.

(b) According to the information and explanations given to us and the records of the Company examined by us, thedisputed amounts in respect of income-tax, sales tax, wealth tax, service tax, custom tax and excise duty / cess notdeposited with the appropriate authorities are as follows.

Sr.No. Name of Statute Nature of Dues Amount Assessment Forum where(Rs.in Lacs) Year pending

(i) Income Tax miscellaneous 4.18 1995-96 Deputy Commissionermatters of Income Tax

(Appeals)(ii) Income Tax Disallowance of 59.70 2003-04 Commisioner of

expenses claimed of Income Tax& miscellaneous (Appeals)matters

(iii) Income Tax Disallowance of 220.38 2004-05 Commissioner ofexpenses claimed Income Tax& miscellaneous (Appeals)matters

(iv) Income Tax Disallowance of 200.60 2005-06 Commissioner ofexpenses claimed Income Tax& miscellaneous (Appeals)matters

(v) Wealth Tax Re-computation 2.15 1992-93 Deputy Commissionerof deductions as of Wealth Taxper appeal order.

(vi) Wealth Tax Re-computation 0.26 1993-94 Deputy Commissionerof deductions as of Wealth Taxper appeal order.

(vii) Wealth Tax Re-computation 0.22 1994-95 Deputy Commissionerof deductions as of Wealth Taxper appeal order.

(viii) Wealth Tax Re-computation 0.36 1995-96 Deputy Commissionerof deductions as of Wealth Taxper appeal order.

(ix) Wealth Tax Re-computation 0.65 1997-98 Deputy Commissionerof deductions as of Wealth Taxper appeal order.

(x) Wealth Tax Re-computation of 0.96 2000-01 Deputy Commissionerdeduction as per of Wealth Taxappeal order.

(xi) Haryana Local Local Area 8.72 2003-2004 Excise & TaxationDevelopment Development Tax Officer cum Assessing

officer

58

10. The Company does not have any accumulated losses. The Company has not incurred cash losses during thefinancial year covered by our audit and in the immediately preceding financial year.

11. According to the records of the Company examined by us and the information and explanations given to us, theCompany 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 onthe 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 applicableto 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 other Companies from Banks or Financial Institutions duringthe year. In our opinion and based on the information and explanations received, the terms and conditions of theguarantees are prima facie not prejudicial to the interest of the Company.

16. In our opinion and according to the information and explanations given to us, term loans obtained for financing realestate projects have been used for the real estate projects on an over all basis.

17. On the basis of an overall examination of the Balance Sheet of the Company, in our opinion, and according to theinformation and explanations given to us, there are no funds raised on short term basis which have been used forlong term investments.

18. The Company has not made any preferential allotment of shares during the year to parties and companies coveredin the Register maintained under section 301 of the Companies Act,1956.

19. According to the information and explanations given to us during the year the Company has created security inrespect of nominal amount of debentures in terms of the Debenture Trust Deed.

20. We have verified the end use of money raised by the Company on issue of equity shares under Qualified InstitutionalPlacement Scheme of SEBI and details are as disclosed in Note No.3.

21. According to the information and explanations given to us, no fraud on or by the Company has been noticed orreported during the year.

For Khanna & Annadhanam Chartered Accountants

(P. S. Pabreja) Partner

Membership No.10692Place: New DelhiDate : 25th June, 2007

59

BALANCE SHEET AS AT 31ST MARCH, 2007As at As at

31st March, 2007 31st March, 2006SCHEDULE Rs. in Lacs Rs. in Lacs

SOURCES OF FUNDS

Shareholders FundsShare Capital 1 2,837.53 1,749.98Reserves & Surplus 2 9,0353.07 93,190.60 12,443.54 14,193.52

Loan FundsSecured Loans 3 19,181.03 8,930.98Unsecured Loans 4 4,901.25 24,082.28 1,054.46 9,985.44

Total funds employed 117,272.88 24178.96

APPLICATION OF FUNDSFixed assets 5Gross Block 5,013.01 4,085.30Less: Depreciation 1,986.28 1,580.80Net Block 3,026.73 2,504.50Investments 6 1,121.57 902.73Deferred Tax Asset (Net) 144.89 284.79

Current Assets, Loans & AdvancesInventories 7 49,461.36 30,639.53Sundry Debtors 8 13,207.19 6,039.98Cash & Bank Balances 9 22,479.31 2,463.62Loans & Advances 10 91,364.58 30,844.72

176,512.44 69,987.85Less : Current Liabilities & ProvisionsCurrent Liabilities 11 61,465.42 47,516.54Provisions 12 2,067.33 1,984.37

NET CURRENT ASSETS 63532.75 112,979.69 49,500.91 20,486.94

Total Assets (Net) 1,17,272.88 24,178.96

Accounting Policies & Notes 17

As per report of even date attached For and on behalf of the Board

for KHANNA & ANNADHANAMChartered Accountants

SUSHIL ANSAL ANIL KUMARChairman Whole Time Director & CEO

(P. S. PABREJA)PartnerMembership No.10692

AMITAV GANGULY ANUP KAPOORSr. V.P. (Corporate Affairs) Chief Financial Officer& Company Secretary

Place : New DelhiDated : 25th June, 2007

60

PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2007

SCHEDULE 2006-07 2005-06Rs. in Lacs Rs. in Lacs

INCOMESales & Other Income 13 76,614.37 35,515.09Increase/(Decrease) in Stocks 14 (659.08) 75,955.29 373.42 35,888.51

EXPENDITURECost of Construction 15 46,690.12 24,092.46Selling & Administrative Expenses 16 9,135.53 4,619.59Purchase of Traded Goods 12.29 104.04Depreciation 5 310.64 56,148.58 213.14 29,029.23Profit before Tax, Prior Period adjustments 19,806.71 6,859.28and exceptional ItemsLess: Prior Period adjustments (Net) 42.77 14.24

19,763.94 6,845.04Less : Provision for Tax Current Tax 6,353.81 1,862.92 Deferred Tax 138.28 (100.32) Fringe Benefit Tax 51.00 28.10

13,220.85 5,054.34(Add)/Less Income Tax Pertaining to Earlier Years 30.14 (29.83)

Profit for the Year before exceptional Items 13,190.71 5,084.17Exceptional Items (Net of Tax) - 1,028.64Profit for the year 13,190.71 4,055.53Provision for amounts relating to earlier years 698.70 -Less: Amounts adjusted from General reserve 698.70 - - -(See Note No. 6 ) 13,190.71 4,055.53Add: Profit brought forward 2,345.60 1689.15Balance available for appropriation 15,536.31 5,744.68

AppropriationsFinal / Interim Dividend 993.13 350.00Dividend Tax 156.14 49.08Transferred to General Reserve 7,500.00 8,649.27 3000.00 3,399.08Profit carried Forward 6,887.04 2,345.60Earning Per Share (Rs.)(See Note 19)-Basic 25.36 7.80-Diluted 11.93 3.67Accounting Policies & Notes 17

As per report of even date attached For and on behalf of the Board

for KHANNA & ANNADHANAMChartered Accountants

SUSHIL ANSAL ANIL KUMARChairman Whole Time Director & CEO

(P. S. PABREJA)PartnerMembership No.10692

AMITAV GANGULY ANUP KAPOORPlace : New Delhi Sr. V.P. (Corporate Affairs) Chief Financial OfficerDated : 25th June, 2007 & Company Secretary

61

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH 2007

2006-07 2005-06A. Cash flow from Operating Activities : (Rs. in lacs) (Rs. in lacs)Net profit before tax, prior period adjustments & exceptional Items 19,806.71 7,969.56Adjusted for Adjustments pertaining to earlier years (42.77) (14.24)Assets written off/Impairment of Fixed Assets - 17.97Depreciation 310.64 253.56Deferred Expenses 0.26 -Employee stock option expenses 45.97 -Provision for Doubtful Debts - 84.12Interest Expenses 1,943.41 1,222.76Interest Income (1,827.78) (1,216.80)Amounts Written back (441.57) (248.21)Amounts written off 370.12 911.46Loss on Sale of Investments - 0.01Dividend Income (110.62) (9.17)Loss on sale of Fixed Assets 0.44 0.92Profit on sale of Fixed Assets (2.00) (11.32)Exchange Loss - 246.10 19.80 1,010.86Operating Profits before Working Capital Changes 20,052.81 8,980.42 Adjusted forTrade Payables & Others 1,214.81 7,150.23Inventories (11,708.83) 3,356.30Trade and Other Receivables (7,439.55) (581.65)Loans and Advances (53,824.95) (71,758.52) (12,102.10) (2,177.22)Cash generated from Operations (51,705.71) 6,803.20Taxes Paid (7,321.55) (1,555.02)Cash flow from operating activities before exceptional items (59,027.26) 5,248.17Exceptional Items - (1,550.56)CASH FLOW FROM OPERATIONS (59,027.26) 3,697.62B. Cash flow from Investing Activities :Dividend received 110.62 9.17Interest received 1,827.78 994.22Sale of Fixed Assets 7.66 22.54Purchase of Fixed Assets (659.50) (294.24)Sale of Investments - 568.51Purchase of Investments (160.00) (254.00)NET CASH FROM INVESTING ACTIVITIES 1,126.56 1,046.20C. Cash Flow from Financing Activities :Interest & Finance Charges (1,786.59) (1,291.49)Proceeds from issue of shares (Net) 66,438.42 -Proceeds from Long Term Borrowings 39,096.72 1,898.62Repayment of Long Term Borrowings (25,361.96) (4,256.49)Dividend paid including Dividend Tax (874.75) (99.77)

-NET CASH USED IN FINANCING ACTIVITIES 77,511.84 (3,749.13)NET INCREASE IN CASH AND CASH EQUIVALENTS 19,611.14 994.69CASH AND CASH EQUIVALENTS (at the beginning of the year) 2,868.17 1,873.47CASH AND CASH EQUIVALENTS (at the clossing of the year) 22,479.31 2,868.17

Note:1.Previous year figures have been regrouped/rearranged, wherever considered necessary, to make them comparable with currentyear’s figures.2Interest received from Banks on deposits and from Customers for delayed payments is classified as Cash flow from InvestingActivities.

As per report of even date attached For and on behalf of the Board

for KHANNA & ANNADHANAMChartered Accountants

SUSHIL ANSAL ANIL KUMARChairman Whole Time Director & CEO

(P. S. PABREJA)PartnerMembership No.10692

AMITAV GANGULY ANUP KAPOORPlace : New Delhi Sr. V.P. (Corporate Affairs) Chief Financial OfficerDated : 25th June, 2007 & Company Secretary

62

SCHEDULE- 1 As at As atSHARE CAPITAL 31st March, 2007 31st March, 2006

Rs. in Lacs Rs.in Lacs

AUTHORISED (See note below)16,00,00,000 (Previous Year 5,00,00,000) 8,000.00 5,000.00Equity Shares of Rs.5/- each(Previous Year Rs 10/-each)

30,00,000 (Previous year 15,00,000) 3,000.00 1,500.00Preference Shares of Rs.100/- each

11,000.00 6,500.00

ISSUED, SUBSCRIBED AND PAID UP5,67,50,550 (Previous Year 1,74,99,825) 2,837.53 1,749.98Equity Shares of Rs 5 each fully paid up(Previous Year of Rs 10/-each )

2,837.53 1,749.98

Notes(1) 1,50,07,125 Equity Shares of Rs. 10/- each issued as Bonus Shares by capitalisation of Share Premium / General Reserves.(2) During the year 1,74,99,825 Equity Shares of Rs.10/- each fully paid were divided into the 3,49,99,650 Equity Shares of Rs. 5/-

each fully paid .

(3) Authorised Capital of the Company has increased as under :(a) Equity shares from 5,00,00,000 to 14,00,00,000 of Rs. 5/- each and Preference Shares from 15,00,000 to 30,00,000 in the

Extra Ordinery General Meeting held on 2.5.2006.(b) Equity shares from 14,00,00,000 to 16,00,00,000 of Rs.5/- each vide Hon’ble High Court order dated 31.8.2006 consequent

to the merger of Ansal Township & Projects Limited with the company. (Refer Note- 2 )(4) During the year the Company has issued and allotted 67,50,000 Equity Shares under Qualified Institutions Placement Scheme.

SCHEDULE - 2 As at As atRESERVES & SURPLUS 31st March, 2007 31st March, 2006

Rs. in Lacs Rs. in Lacs

Capital Reserve # 160.50 160.50Securities Premium Account As per last Balance Sheet 118.87 702.20Add: Received during the year 67,837.50 -Less: Expenses incurred on issue of 1,804.50 -shares under QIP scheme (Refer Note -3)Less: Utilised for Issue of Bonus Shares - 66,151.87 583.33 118.87Revaluation Reserve As per last Balance Sheet 524.80 552.42Less: Transferred to Profit & Loss Account 26.24 498.56 27.62 524.80General Reserve As Per last Balance Sheet 9,293.77 6293.77Add : Transfer from Profit & Loss Account 7,500.00 3,000.00Add : Adjustment on merger of 560.03 - ATPL with the company[Refer Note 2(c)(ii)]Less: Transfer to Profit & Loss Account 698.70 - against provision for amounts 16,655.10 9,293.77 relating to earlier years (Refer Note No. 6)

Profit and Loss Account - Balance 6,887.04 2,345.6090,353.07 12,443.54

# Represents forfeiture of Warrants.

63

SCHEDULE - 3 As at As atSECURED LOANS* 31st March, 2007 31st March, 2006

Rs. in Lacs Rs. in Lacs

0% Redeemable OptionallyConvertible Debentures - Nominal value 819.66 -( See Note - 9 )

From Banks-Cash Credits 2,335.12 3,562.80-Term Loans 6,058.73 --Vehicle Loans 228.50 8,622.35 185.00 3,747.80

From Corporate Bodies - Term Loan 9,739.02 5,183.1819,181.03 8,930.98

* Due within one year (in Lacs) 6,735.99 1,652.56

Securities

1. Nominal value of Debentures is secured by mortgage of flats owned by the Company2. Loans from Banks are secured by mortgage/hypothecation of immovable/movable assets on parri-passu basis, assignment of

receivables including rent etc and Land & Buildings belonging to subsidiaries / associate Companies . The loans are additionallysecured by the personal guarantee of the two Directors who are shown Promoter directors as per SEBI disclosure.

3. Term Loans from Corporate Bodies are secured by mortgage/hypothecation of immovable/movable assets of the Company andLand & Building belonging to associate Companies and charge on future rents. The loans are additionally secured by personalguarantee of the two Directors and pledge of shares of the company owned by promoters/ persons acting in concert with promotersin respect of loan taken from Housing Development Finance Corporation Ltd.

4. Vehicle loans are secured by hypothecation of vehicles.

SCHEDULE - 4 As at As atUNSECURED LOANS* 31st March, 2007 31st March, 2006

Rs. in Lacs Rs. in Lacs

0% Redeemable Optionally 4,180.34 -Convertible Debentures( See Note - 9 )

FIXED DEPOSITS

From Shareholders 6.03 13.02From Public 714.88 720.91 1,041.44 1,054.46

4,901.25 1,054.46

* Due within one year( in Lacs) 4,768.96 815.27

64

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65

(Rs. in Lacs)SCHEDULE - 6INVESTMENTS

Number of Face value As at Additions Additions Deletions Balance asShares of Rs.10/- 01.04.2006 on during the during the at 31.03.2007

unless merger of year year otherwise ATPL

stated

INVESTMENTS [AT COST] - LONG TERM(A) SHARES IN COMPANIES (a) UNQUOTED TRADE(i) Nirman Overseas Pvt. Ltd. 1,000 100 1.00 - - - 1.00 (b) QUOTED OTHER THAN TRADE(i) Ballarpur Industries Ltd. 100 0.13 - - - 0.13(ii) ITC Ltd. 341,175 1 552.74 - - - 552.74(iii) PNB Principal Mutual Fund 1,000,000 - - 100.00 - 100.00(B) SHARES IN SUBSIDIARY COMPANIES UNQUOTED

TRADE (i) Star Estate Management Ltd. 55,000 100 83.88 - - - 83.88(ii) Delhi Towers Ltd. 5,000 100 19.82 - - - 19.82 (iii) Ansal IT City & Parks Ltd. 15,30,000 153.00 - - - 153.00 (iv) Ansal Township & 50,000 - - 5.00 - 5.00 Infrastructure Ltd. (v) Ansal Sez Projects Ltd. 50,000 - - 5.00 - 5.00(C) SHARES IN JOINT VENTURE COMPANIES UNQUOTED TRADE(i) Ansal Mittal Township Pvt. Ltd. 255,000 0.50 - 25.00 - 25.50(ii) Ansal Landmark Township 400,000 66.66 33.34 - - 100.00 Pvt Ltd. (iii) Green Max Estates Pvt. Ltd. 250,000 25.00 - - - 25.00(iv) Ansal Lotus Melange Project 5,000 - 0.50 - - 0.50 Pvt. Ltd. (Formerly: Melange Colonizers Pvt. Ltd)(v) Ansal Seagull Sez 500,000 - - 50.00 - 50.00 Developers Ltd.

902.73 33.84 185.00 - 1,121.57

Current Year Previous YearRs. In lacs Rs. In lacs

Cost of quoted shares 652.87 552.87 Market value of quoted shares 612.13 662.18 Cost of Unquoted Shares 468.70 349.86

66

SCHEDULE - 7 As at As atINVENTORIES 31st March, 2007 31st March, 2006

Rs. in Lacs Rs. in Lacs

(As taken, valued and certified by the Management)

Building materials, Stores & Spare Parts 249.22 169.45

Flats/Shops/Houses/Farms/Traded Goods etc. 3,554.28 2,998.29

Projects/Contracts/ Work in Progress (Schedule 15) 45,657.86 27,471.79

49,461.36 30,639.53

NOTE :- For valuation of Inventories, refer Accounting Policy No -5

SCHEDULE - 8 As at As atSUNDRY DEBTORS (UNSECURED) 31st March, 2007 31st March, 2006

Rs. in Lacs Rs. In Lacs

OUTSTANDING FOR A PERIODEXCEEDING SIX MONTHS

Considered Good * 983.87 2,952.94

Considered Doubtful 698.70 77.88

Less: Provision for Doubtful Debts (698.70) 983.87 (77.88) 2,952.94(Refer Note 6)

OTHER DEBTS

Considered Good 12,223.32 3,087.04

13,207.19 6,039.98

* Includes amount due from a Subsidiary Company (in lacs) 216.48 284.87

SCHEDULE - 9 As at As atCASH AND BANK BALANCES 31st March, 2007 31st March, 2006

Rs. in Lacs Rs. in Lacs

Cash in Hand 1,295.36 147.10

BANK BALANCES:

With Scheduled Banks:

- In Current Accounts 2,597.40 1,202.91- In Fixed Deposit Accounts * 18,299.13 1,075.08Add: Interest Accrued 287.42 21,183.95 38.53 2,316.52

22,479.31 2,463.62

* Deposits under Bank lien for issue of Bank Guarantee (Rs. in lacs) 2005.20 956.08

67

SCHEDULE - 10 As at As atLOANS & ADVANCES 31st March, 2007 31st March, 2006

Rs. in Lacs Rs. in LacsUnsecured considered good unless otherwise stated.

LoansConsidered Good Subsidiary Company 152.01 250.80 Joint Venture Company 1,677.18 2,688.55 Others 2.24 1,831.43 401.61 3,340.96

Advances* For purchase of land (See Note 5(a))- Subsidiary Companies 7,889.97 2,009.26 - Land holding Companies 40,822.57 10,974.92 -Collaborators 18,842.36 7,695.79 -Others 8,018.23 75,573.13 996.18 21,676.15

Security Deposit 4,879.77 891.53Payment to Suppliers/Contractors 6,056.41 1,077.29Advance Tax paid (Net of provisions) 521.41 - Advances recoverable in Cash or in kindor for value to be received 2,502.43 3,858.79Considered Doubtful - 372.12Less: Provision for Doubtful Advances - - (372.12)

91,364.58 30,844.72 -

Rs.. In Lacs Rs.. in Lacs * Includes advance for purchase of land to a 26.45 76.06 Private Limited Company in which a Director of the company is a Director.

SCHEDULE - 11 As at As atCURRENT LIABILITIES 31st March, 2007 31st March, 2006

Rs. in Lacs Rs. in Lacs

Sundry Creditors 1 14,441.89 7,234.25Advances from Customers against 42,094.75 36,704.85Flats/Shops/Houses/Plots etc. 2Security Deposit from Contractors/ 3,306.08 2,375.38Customers/Suppliers etc.Other Liabilities 1386.35 1122.53

Interest accrued but not due on -Loans 179.15 12.65- Deposits 57.20 66.88

236.35 79.5361,465.42 47,516.54

There are no amount due and outstanding to be Credited to the Investor Education and Protection fund.

1 Includes dues to Small Scale (Rs. in Lacs) 0.01 2.99 Industrial Undertaking.2 Represents advances of Long Term Nature adjustable against sale consideration of plot / flats / houses etc.

68

SCHEDULE - 12 As at As atPROVISIONS 31st March, 2007 31st March, 2006

Rs. in Lacs Rs. in Lacs

Proposed Dividend including Dividend Tax 663.95 399.08

Stamp duty 902.75 902.75

Gratuity 378.55 252.02

Leave Encashment 102.23 53.26

Superannuation 19.85 19.85(Discontinued Scheme)

Taxes (Net of advance Tax/Tax deducted at source) - 357.41

2067.33 1,984.37

SCHEDULE -13 2006-07 2005-06SALES & OTHER INCOME Rs. in Lacs Rs. in Lacs

Sales 71,825.36 31,907.56Sales- Traded Goods 17.66 159.65Know how fee 549.82 580.68Interest Received (Gross)

- Deposits with Banks(TDS Rs.144.63 lacs in previous year Rs.8.60 lacs) 660.69 44.29- Delayed payments from Customers 779.17 473.67 (TDS Rs.0.63 lacs previous year 0.89 lacs)- Loans (TDS Rs.66.04 lacs in previous year Rs.68.58 lacs) 294.34 305.65- On Income Tax Refund 91.25 66.75- Others 2.32 298.73

1,827.78 1,189.09Rent Received (Gross) 966.71 648.85(Tax Deducted at Source Rs. 199.74 lacs.Previous Year Rs. 178.57 lacs)Administration Charges 719.80 530.38

Forfeitures 6.88 47.57Other Receipts 147.57 184.73

(Tax Deducted at source Rs. 1.68 lacsPrevious year Rs.1.38 lacs)

Amounts written Back 441.57 248.21

Profit on Sale of Fixed Assets 0.60 11.32

Dividend from Investments 110.62 7.05

76,614.37 35,515.09

69

SCHEDULE - 14INCREASE / (DECREASE) IN STOCKS

2006-07 2005-06Rs. in Lacs Rs. in Lacs

Stocks as on 01.04.2006 2,998.30 4,122.57(Flats/Shops/Houses/Plots/Farm /Traded Goods etc.)

Less: Capitalised during the year - 1,497.70Add : addition on Merger of ATPL 1,215.06 4213.36 - 2,624.87

Less : Stocks As on 31.03.2007 3554.28 2,998.29(Flats/Shops/Houses/Plots/Farm /Traded Goods etc.)

(659.08) 373.42

SCHEDULE - 15COST OF CONSTRUCTION / PROJECTS /CONTRACTS IN PROGRESS 2006-07 2005-06

Rs.in Lacs Rs.in Lacs

Balance as per last Year 27,471.78 34054.47Addition on merger of ATPL 5859.09 -Cost of Land 9571.88 6549.12Materials Consumed 4949.54 3388.32Salaries, Wages & Other Amenities to Employees 677.78 312.13Surrender of Rights 749.49 321.11Commission & Brokerage 1468.70 871.85Expenses through Collaborators 2309.05 101.33Expenses through Contractors 17,425.41 8681.06External /Infrastructure Development Charges 9282.31 3227.69Architect Fees 842.33 150.66Miscellaneous Expenses 2523.20 1125.41Licence/Scrutiny /Conversion Charges 9692.70 3001.84Compounding Fee 1.21 13.77Commercialisation charges 11.52 -Projects Completion Expenses - 271.26Interest on Loans/deferred credits 1455.26 94,291.25 238.76 62,308.78

Less: - Miscellaneous Income/Adjustments 73.36 40.97

- External development Charges relating to 1637.21 5729.18 completed projects recovered from customers and included in advances adjusted (Refer Note 8)

-Expenditure relating to Sushant Lok III Project - 4974.38-transferred

- Expenditure related to other projects transfer- red to Other entities 232.70 -

- Cost of construction charged 46,690.12 48,633.39 24,092.46 34,836.99 to Profit & Loss Account

Balance Carried to Balance Sheet 45,657.86 27,471.79

70

SCHEDULE - 16 2006-07 2005-06SELLING & ADMINISTRATIVE EXPENSES Rs.in Lacs Rs.in Lacs

Salaries, Wages , Allowances & Commission 1693.38 773.78Contribution to Gratuity, Provident and other Funds 283.84 115.94Other benefits to employees 232.78 62.36Employee Stock Option Compensation Expenses 45.97 -Rent 205.23 107.05Lease Rental, Hire & Other charges 23.79 15.96Rates & Taxes 9.53 0.05Advertisement & Publicity 830.37 57.12Discounts & Rebates 200.25 144.57

Interest on- Public Deposits 89.20 136.01- Debentures 168.49 -- Term Loans 1810.94 392.31- Others 1088.03 904.92Less : Interest on borrowed funds transferred (1213.25) 1943.41 (229.56) 1203.68 to cost of constructionRepairs and Maintenance- Machinery 5.48 1.36 - Building 39.74 14.53- Others 210.76 255.98 78.42 94.31Directors’ Meeting Fees 13.34 4.78Traveling & Conveyance 413.27 225.43Stationery & Printing 194.50 70.05Postage, Telegrams, & Telephone 111.96 64.40Legal & Professional Charges 3391.11 124.36Less : Relating to Share issue Expenses adjusted against 1804.50 1586.61 - 124.36 securities premium accountInsurance 91.99 73.18Bank Commission & Other Charges 187.17 166.54Electricity Expenses 48.87 29.81Amounts Written Off 820.12 911.33Less : Provision made in earlier year 450.00 370.12 - 911.33Provision for Doubtful Debts , Advances & Others - 84.12House Tax 31.12 33.86Ground Rent 99.81 128.00Impaired/Lost Assets written off - 17.97Miscellaneous Expenses 262.24 91.14Exchange Loss - 19.80

9,135.53 4,619.59

71

SCHEDULE 17ACCOUNTING POLICIES AND NOTES

A. SIGNIFICANT ACCOUNTING POLICIES

1. NATURE OF OPERATIONAnsal Properties and Infrastructure Ltd. (“APIL” or the “Company” ), was incorporated in 1967. APIL,s main business isreal estate promotion and development in both residential and commercial segments.

2. Basis of Preparation of AccountsThe Financial Statements have been prepared to comply in all material respects with the mandatory AccountingStandards issued by the Institute of Chartered Accountants of India (ICAI) and the relevant provisions of the CompaniesAct, 1956. The Financial statements have been prepared under the historical cost convention, on the basis of goingconcern and on an accrual basis except as stated elsewhere.

3. USE OF ESTIMATESThe preparation of financial statements in conformity with generally accepted accounting policies requires managementto make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingentassets and liabilities at the date of the financial statements and the reported accounts of revenues and expenses for theyear presented. Actual result could differ from these estimates.

4. FIXED ASSETSFixed Assets are stated at cost less accumulated depreciation. Flats held by Company which have been revalued arestated at revalued amount.

5. INVENTORIESInventories are valued as under:-i) Building Materials, Stores, Spare parts at cost on FIFO Basisii) Shuttering & Scaffolding materials at depreciated costiii) Apartments / Houses / Shops/

Flats (unsold)/Traded Goods at lower of cost or market valueiv) Projects / Contracts work in progress at cost

6. DEPRECIATIONDepreciation is provided on pro-rata basis at rates prescribed in Schedule-XIV of the Companies Act, 1956 on writtendown value method. Shuttering and Scaffolding material is depreciated at 30% of original cost. Assets costing up-toRs.5,000/- are fully depreciated in the year of purchase.

7. INVESTMENTSCurrent investments are stated at lower of cost and market value. Long term investments are stated at cost. Decline invalue of long term investments is recognized, if considered other than temporary.

8. REVENUE RECOGNITIONa) The Company follows “Percentage of Completion Method” of accounting for contracts and constructed residential,

Institutional and commercial properties. As per this method, the revenue is recognized in proportion to the actualcost incurred as against the total estimated cost of the projects under execution subject to actual cost being 30%or more of the total estimated cost.

b) The revenue on sale of residential, institutional and commercial plots is recognized on a proportionate basiswhen 50 % of the progress has been achieved as measured in terms of actual cost incurred to total estimatedcost.

c) Income from know how fee is recognized in terms of the agreement with the recipient of know how.d) The estimates relating to saleable area, sale value, estimated costs etc., are revised and updated periodically by

the management and necessary adjustments are made in the current year’s accounts.e) Indirect costs (as detailed in Schedule 16) are treated as “Period Costs” and are charged to the Profit & Loss

Account in the year incurred.f) Surrender of flats by buyers are valued at cost and accounted for as ‘Cost of Construction’. When sold, proceeds

are treated as ‘Sales’.g) For recognizing income and working out related cost of construction, major self contained residential township

projects are divided into following broad categories i.e. ConstructedHouses, Institutional, Commercial Flats and Institutional, Commercial, Residential Plots.

h) Whereas all income and expenses are accounted for on accrual basis, interest on delayed payments by customersagainst dues is taken into account on acceptance or realization owing to practical difficulties and uncertaintiesinvolved.

i) Repair, maintenance and other costs incurred after the completion of the project are charged to the cost ofconstruction in the year of incurrence..

72

9. RETIREMENT AND OTHER BENEFITSa) Contribution to the Provident Fund is charged to the revenue each year.b) Provisions for Gratuity and leave encashment are made on the basis of actuarial valuation at the year end.

10. FOREIGN CURRENCY TRANSLATION / CONVERSIONForeign Currency assets and liabilities are restated at the year end rate and the differences are dealt with in the profitand loss account.

11. BORROWING COSTSBorrowing costs which have a direct nexus and are directly attributable to the construction projects are charged to theproject and other borrowing costs are expensed as period costs.

12. TAXES ON INCOMEIncome tax expenses are accounted for in accordance with AS-22, Accounting for Taxes on Income, as stated below;a) Provision for current tax is made based on taxable income for the year computed in accordance with provision of

Income Tax Act, 1961.b) i) Deferred tax is recognized, subject to the consideration of prudence, on timing differences, being the

difference between taxable income and accounting income that originate in one period and are capable ofreversal in one or more subsequent years.

ii) Deferred tax assets are recognized and carried forward to the extent that there is a reasonable certainty,except arising from unabsorbed depreciation and carry forward losses where deferred tax assets arerecognized to the extent that there is virtual certainty, that sufficient future taxable income will be availableagainst which such deferred tax assets can be realised.

13. IMPAIREMENTAt each Balance Sheet date, the management reviews the carrying amounts of its Fixed Assets to determine whetherthere is any indication that these assets suffered an impairment loss. If any such indication exists, the recoverableamount of the asset is estimated in order to determine the extent of impairment loss and necessary provisions thereagainst .Reversal of impairment loss is recognized as income in the Profit & Loss Account.

B. FINANCIAL NOTES1. Contingent Liabilities.

As at As at31st March, 2007 31st March, 2006

(Rs. in lacs) (Rs. in lacs)

(i) Claims by customers/ex-employees for interest, 1924 1405damages etc. (to the extent quantified)(See foot note i)

(ii) Claims by local authorities etc.a) House Tax. — 7b) Ground Rent HUDCO — 1183c) Ground Rent – others 291 291d) Other Claims 62 345

(iii) Income/Wealth Tax Demands disputed by theCompany. (See foot note ii (a) & ii(b))On completion of regular assessment. 667 534On Completion of block assessment. 1884 1884

iv) Guarantees given by the Company to Banks / Institutions on behalf of other 14819 5399Companies

NOTE(i) In respect of claims at (i) above, the management is of the opinion that in majority of the cases claims will be

successfully resisted or settled out of court on payment of nominal compensation.(ii) a) In the case of Income / wealth tax demands of Rs.667 lacs disputed by the Company, similar demands have

been set aside by the Appellate Authorities in most of the cases in the past.b) In respect of block assessment for the year 1.4.1989 to 12.2.2000, cross appeals filed by the Company and

the tax department, Income Tax Appellate Tribunal (ITAT) has given full relief to the Company and rejecteddepartment’s grounds of appeal and tax claim of Rs.4,409 lacs. The department has gone for further referenceto the High Court. The Company, based on an arbitration award, had accounted for income of Rs. 4,200lacs in the year 2002-03 and paid/provided income tax accordingly. The contingent liability not provided in

73

the accounts in respect of block assessments is estimated at Rs1884 lacs. The Company has been legallyadvised that it has a good case to succeed in the High Court.

(iii) Though there is uncertainty as to resolution of various disputes / claims / demands etc., based on management’sassessment, there will be no material outgo of resources on account of various contingent liabilities.

2. (a) In terms of the Scheme of Amalgamation & Arrangement (The Scheme) approved by order dated 31st August,2006 by Hon’ble High Court of Delhi, Ansal Township & Projects Limited (ATPL) (whose core business is realestate development) has been amalgamated with the Company with effect from 1st April, 2006.

(b) The amalgamation has been accounted for under the “Pooling of Interest Method” as prescribed by AccountingStandard (AS-14) – ‘Accounting for Amalgamations’ issued by the Institute of Chartered Accountants of India.

(c) In accordance with the said Scheme:

i) All the assets other than shares of the Company held by ATPL, debts, liabilities, and obligations of ATPL havebeen vested in the Company with effect from 1st April, 2006 and have been recorded at their respective bookvalues. There were no material difference in the accounting policies of ATPL and the Company.1,58,47,500 equity shares of Rs.5/- each have been allotted to the shareholders of ATPL in the ratio of one equityshare of Rs.5/- each of the Company for every two equity shares of Rs.2/- each of ATPL. The Company’s paid upcapital has accordingly increased by Rs.750.04 lacs. These equity shares rank pari-passu with the existing equityshares of the Company.

ii) Excess of Net Asset Value taken over by the Company amounting to Rs.560 lacs over the paid up value of equityshares to be issued and allotted to ATPL shareholders has been transferred to the General Reserve.

iii) Equity Shares of the Company have been increased from 14,00,00,000 to 16,00,00,000 of Rs. 5/- each .iv) As per the accounting treatment in the scheme approved by the Hon’ble High Court, the Company is required to

record assets and liabilities of ATPL at fair values. Board of Directors of the Company are of the opinion that fairvalue of assets and liabilities of ATPL generally correspond to the book values of these assets and liabilities andtherefore, these have been accounted for at book values in the books of the company, in compliance with theaccounting treatment as per AS-14 referred to in para 2(b).

v) The Financial Statements for the year include figures of ATPL also and are therefore, not strictly comparable withthose of the previous year.

3. During the year the Company has issued and allotted 6,750,000 equity shares of Rs.5/- each at a premium of Rs.1005per share under Qualified Institutions Placement Scheme (QIP) as per guidelines issued by SEBI in this regard.Expenditure in connection with the issue of shares under QIP Scheme amounting to Rs.1804.50 lakhs has beenappropriated from the Share Premium Account. The proceeds of shares issued were utilized as under :

Nature of expenses Amounts(Rs.in lacs)

Acquisition of land 22,396Construction and development in various projects 10,859Repayment of borrowings 10,808Working capital purpose 8,208QIP issue expenses 1,804Fixed deposits with banks * 14,000Investment in Mutual fund * 100Total 68,175

* These amounts have been utilised subsequent to the close of the year.

4. a) In accordance with the Guidance Note on “Recognition of Revenue by Real Estate Developers” issued by the ICAIto rationalize revenue recognition from large projects being implemented by the Company, with effect from 1st

April, 2006, the revenue from sale of plots is recognized on proportionate basis when 50% of the progress hasbeen achieved as against 2/3rd of the progress achieved in earlier years.

b) Upto 31.03.2003 revenue on account of sale of residential, commercial and institutional plots was recognized onexecution of sale deed and thereafter on proportionate basis. To bring in uniformity in accounting, revenue fromunregistered plots sold upto 31.03.2003 has also been recognized during the year on the revised basis as statedin Note 4(a).

74

c) Due to above change in the basis of accounting, the sales for the year are higher by Rs.18826 lacs and profit aftertax for the year is higher by Rs.6187 lacs.

5 a) Advances include Rs. 75573.13 lacs (previous year Rs. 21676.15 lacs) representing payments to subsidiaries,certain land holding companies, collaborators and others towards cost of land acquired / to be acquired undercollaboration / other arrangements. The land acquired by landholding companies is registered in the name ofthese companies but under possession, control of the company and are being developed and sold by the Company.Advances against purchase of land are adjustable against sale proceeds of land/ flats / houses etc., developed bythe Company in terms of the collaboration agreements entered into with these Companies.

(b) Advances include:i) Rs.2400 lacs (previous year Rs 1132 lacs) for purchase of land for which agreements are under execution.ii) Rs.418.76 lacs (previous year Rs 860 lacs) for purchase of land and other advances which are more than

three year old but considered good by the Management.6. During the year the Company has made provision of Rs.699 lacs recoverable in respect of Iraqi Project. As the amount

represents adjustment relating to earlier years, the provision against this amount has been shown in the Profit & LossAccount after determination of current net profit as permitted by AS-5 (Net Profit or Loss for the Period, Prior Perioditems and Changes in Accounting Policies). An equal amount has been transferred from the General Reserves to theProfit & Loss Account.

7. In view of the Hon’ble Supreme Court judgement in the case of DLF Vs. State of Haryana and others, the company hasa right to sell / lease community buildings like schools, clubs, hospitals etc. The Company has recognized the developmentcosts incurred on these properties during the current year. This has resulted in increase in work in progress and profitsof the year after tax by Rs.1211.05 lacs.

8. On reconciliation of Sushant Lok Project adjustments have been made towards external development charges etc.amounting to Rs.1637 lacs recovered from the customers and included in advances from customers and cost ofconstruction / work in progress in the earlier years.

9. During the year the company has Issued and allotted 8,19,659 Zero Coupon secured Redeemable OptionallyConvertible Debenture (ROCD’s), of face value of Rs. 100/- each at a premium of Rs. 510.01 per ROCD aggregatingto Rs. 5000 Lacs. Out of this amount, nominal value of debentures of Rs. 819.66 lacs which is secured by mortgageof flats belonging to the Company has been treated as secured loan and balance amount of Rs. 4180.34 lacs asunsecured loans, by way of Preferential Issue to HDFC Venture Trustee Company Limited (‘’ Hi- REF” ) as per theSEBI (DIP) Guidelines 2000. The ROCD’s are optionally convertible into equity shares at a premium of Rs 605.01per share or are redeemable between 12 months to 18 months from the date of allotment of debentures i.e., 28November 2006.

10. During the year, the Company has approved and granted 116,700 stock options to the employees of the Companyand its wholly owned subsidiary and Directors of the Companies, Star Estate Management Limited. in accordancewith the SEBI (Employee Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999 and theEmployees stock Option Scheme ,2006 of the company. The excess of latest available closing price on BombayStock exchange (“BSE”) prior to the date of grant of options over the price at which they were granted, has beenrecognized as Employees Compensation Cost to be proportionately charged to the profit & loss account over thevesting period. The amount expensed during the year is Rs.45.97 lacs

11. In respect of Mohali Project in Punjab, the State Government has withdrawn the Licence for Development of theProject .Upto 31.03.2007 an expenditure of Rs.9763 lacs (including Rs.5166 lacs on Licence Fee and externaldevelopment charge paid to the State Government Authorities) have been incurred and is carried forward in work-in-progress.

12. Prior Period Income/ Expenses (Rs.in lacs)Current Year Previous Year

Expenses 43.41 17.44Income (0.64) (3.20)Net Adjustments 42.77 14.24

13. a) The information about Small scale Industrial Undertakings to whom amounts are due, has been determined to theextent information is available with the company and is given below:

(i) Rubyco International (ii) Jagjit Engineering Industries (P) Ltd.

b) The Company has not received intimation from suppliers regarding the status under Micro Small and MediumEnterprises Development Act, 2006 and hence disclosure if any, relating to the amounts unpaid at the year endtogether with interest payable as required under the said Act have not been given

75

14. Construction Contracts.In accordance with Accounting Standard (AS-7), following disclosure is being made relating to Construction contracts:

Current Year Previous Year(Rs.in lacs) (Rs.in lacs)

Revenue recognition 1087 877Aggregate amount of costs incurred upto the reporting date 1004 958Surplus / (Losses) recognised upto the reporting date 83 (151)Advances received 1568 113Amount retained by contractees 423 NIL

15. Payment to auditors (Amount in Rs.)Current Year Previous Year

Payment to Auditors includesAudit fee 13,00,000 6,50,000Tax Audit Fee 1,50,000 1,30,000Fee for Limited Review/quarterly audit 9,25,980 2,46,300For Certification/Other Services 7,69,698 3,32,250

16. Deferred Tax Adjustments (Net)Deferred Tax Debit (Net) of Rs 138.28 lacs arising on account of timing differences as per Accounting Standard-22 forthe current year (previous year deferred tax credit (net) of Rs.100.32 lacs) has been recognized in the accounts.Calculation of Deferred Tax Asset (Net) as on 31st March, 2007 is as given below:

Particulars Current Year Previous Year(Rs. in lacs) (Rs. in lacs)

Deferred Tax Asset/Liabilities Expenses allowable on actual payment under Section 43 B of the Income Tax Act 175.01 117.55Provision for doubtful debts - 151.47Deferred Tax Asset / (Liabilities)Depreciation (30.12) 15.77Deferred Tax Assets (Net) 144.89 284.79

17. Leases

(a) Total of future minimum lease payments for non-cancelable leases is Rs. Nil (previous year Rs. 24 lacs). Leasepayments debited to the Profit & Loss Account during the year are Rs. 36 lacs (previous year Rs. 36 lacs). TheCompany has also taken houses on lease for its employees. The rent paid during the year and charged to theProfit & Loss Account for such lease is Rs.12.81 lacs (previous year Rs. 8 lacs).

(b) Total of future minimum hire charges for non-cancelable hire charges on assets on which hire charges are paid isRs. 87.98 lacs (previous year Rs.21 lacs). Hire charges debited to the Profit & Loss Account during the year areRs. 21.04 lacs (previous year Rs.13 lacs).

18. Segmental ReportingHaving regard to integrated nature of real estate development of the company, the requirement of “Segmental Reporting”pursuant to Accounting Standards (As- 17) is not applicable.

19. Earning per shareBasic as well as Diluted earning per share calculated in accordance with the provisions of Accounting Standard 20-”Earnings Per Share” are given hereunder-

Particulars of earnings per share Current Year Previous YearNet Profit after Tax (Rs. in Lacs) 13190.71 4056.38Weighted Average Number of Equity shares 52016303 52016303Diluted Number of Equity Share 110592905 110592905Nominal value of the share (Rs.) 5.00 10.00Basic earning Per Share (Rs.) 25.36 7.80 *Diluted earning Per Share (Rs.) 11.93 3.67 ** Consequent to split in Share & Issue of further share during the year, earning per share of previous year has beenrecalculated to make it comparable with the current year.*Previous year’s EPS has been calculated on net profit after charging exceptional items .

76

20. Related party Transactions(A) Name of related parties and description of relationship:

i) Subsidiaries: OwnershipStar Estate Management Ltd 100%Delhi Towers Ltd 100%Ansal I .T. City &Park Ltd 66.23%Ansal Township Infrastructure Ltd 100%Ansal SEZ Projects Ltd 100%Ansal Condominium Ltd. 100% Subsidiary of Delhi Towers Ltd.

ii) Interests in Joint Ventures:The Company’s interest, in venture jointly controlled entities is given below:

Name Country of Percentage of ownershipIncorporation interest as at 31st March, 2007

Ansal Landmark Township Pvt. Ltd. India 49.38%Green Max Estates Pvt. Ltd. India 50%Ansal Mittal Township Pvt. Ltd. India 50%Ansal Seagull SEZ Developers Ltd India 50%Ansal Lotus Melange Pvt Ltd India 50%iii ) Associates

The following are the enterprises where common control exists:-Amba Bhawani Properties Pvt. Ltd.,Ansal Colonisers & Developers Pvt. Ltd.,Ansal Housing & Estates Pvt. Ltd.,Ansal Infrastructure Projects Ltd.,Ansal Project & Developers Ltd.,Ansal Theatres & Clubotels Pvt. Ltd.,Ansal Townships Infrastructure Ltd.,Apna Ghar Properties Pvt. Ltd.,Badrinath Properties Pvt. Ltd.,Bajrang Realtors Pvt. Ltd.,Chamunda Properties Pvt. Ltd.,Chandi Properties Pvt. Ltd.,Chiranjiv Investments Pvt. Ltd.,Kalka Properties Pvt. Ltd.,Naurang Investment & Financial Services Pvt. Ltd.,New Line Properties & Consultants Pvt. Ltd.,Plaza Software Pvt. Ltd.,Prime Golf Ranking Pvt. Ltd.,Prime Maxi Mall Management Pvt. Ltd.,Sampark Hotels Pvt. Ltd.,Satrunjaya Darshan Construction Co. Pvt. Ltd.,Singa Real Estates Ltd.,Sithir Housing & Constructions Pvt. Ltd.Delhi Towers & Estates Pvt. Ltd.,Winsum Software Pvt. Ltd.

iv) Associates in which there is “significant influence “Ansal Buildwell Ltd,.Ansal Engineering Projects Ltd.,Glorious Properties Pvt. Ltd.,Midair Properties Pvt.Ltd.,Saya Plantation Pvt. Ltd.,Sankalp Hotel Private Ltd.,Ansal Housing & Construction Ltd .Glorious Hotel Pvt LtdGlobal Consultants & Designers Pvt LtdAPM Buildcon Pvt Ltd.,Faber Star Facilities Management Ltd.,Kamdhenu Agro Ltd.

v) Key Managerial Personnel and their relatives ;Mr. Sushil Ansal, Mr. Pranav Ansal, Mr. Anil Kumar, Dr (Mrs) Kusum Ansal, Mrs Archana Luthra, Mrs. AlpanaKirloskar, Mr Deepak Ansal, Mr. Gopal Ansal, Mrs Indra Puri, Mrs Meenakshi Verma, Mrs Sheetal Ansal, AyushAnsal, Ms Anuksha Ansal, Mrs Seema Kumar, Maghav Kumar, Nikita, Sanya, Mr Ashwani Kumar, Mr AshokKumar and Mrs Asha Nandwani

77

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21. Computation of net profit in accordance with section 198 of the Companies Act, 1956 and the commission payable toChairman –Cum-Whole Time Director.

(Rs in Lacs )Current year Previous year

Profit as per profit and Loss Account 19763.94 6845.04Les : Exceptional item / Amounts realting to earlier year 698.70 (1550.55)Add : Commission to chairman and whole time director 392.19 110.00

Director‘s remuneration 138.52 112.33Director‘s fee 13.34 4.78

Net Profit as per sec 349 of the companies act ,1956 19609.30 5521.60Commission @ 2 % 392.19 110.00

22. Details of managerial remuneration(Chairman and Whole time Director)(Included in schedule No .16)

(Rs in Lacs)Current year Previous year

Salary & Allowance 109.80 83.55Perquisites & benefits 19.04 20.88Contribution to Provident & Other Funds 9.68 7.90Commission 392.19 110.00Total 530.71 222.33

Notes:a) Perquisites include company’s contribution towards provident fund and family pension fund, club fees, medical

reimbursement , leave travel assistance, leave encashment and personal accident insurance and gratuity as perCompany Rules and as may be applicable in each case .

b) Provision for incremental gratuity liability and leave encashment for the current year in respect of directors has notbeen considered above, since the provision is based on an actuarial basis for the company as a whole.

23. (a) Consumption of building materials for construction.

Current Year Previous YearUnit Quantity Rs. in Lacs Quantity Rs. in Lacs

Bricks Nos. 159350 4 26170 1Cement M.T. 15213 739 18122 565Iron & Steel M.T. 9022 2362 8025 1952

Electrical Goods* *747 *429

Others* (Sand, Stone, *1098 *442Grit, Badarpur, Timber,Boulder, Morum, OversizeMetal & Other consumable stores)

* Other items being too many, quantitive details are not possible. Rs. in Lacs(b) Expenditure in Foreign Currency Current Year Previous Year

Travelling Expenses 27.94 9.76Payment to contractors/cost of lifts 584.80 263.39Professional Fee 163.90 -Advertisement 7.21 -Architect fee 195.01 6.69membership Fee 1.63 -

81

Rs. in LacsCurrent Year Previous Year

(c) Earnings in foreign currencySale of Flats/Plots Farms etc. 587.75 839.18

(d) Iimported and indigenous materials consumed.

Current Year Previous Year(Rs. in lacs) % (Rs.in lacs) %

Indigenous 4950 100 3389 100Imported - - - - -

(e) Details of purchases, turnover, opening stock and closing stock of goods traded in:

Particulars Opening Stock Purchases Sales Closing StockQty. Amount Qty. Amount Qty Amount Qty. Amount

(Rs. in (Rs. in (Rs. in (Rs. inLacs) Lacs) Lacs) Lacs)

Audio Portable System 3 0.004 - - 3.00 Nil - -Colour Televisions 3 - - - - - 3 -Other Electronics Items* - 1.24 - - - 0.14 - 1.07Shoes & Leather Goods* - 1.71 - 12.30 - 17.60 - -T O T A L 2.99 12.30 17.74 1.07

* Other items being too many, quantitative details are not possible.

24. Loans & Advances in the nature of Loans (including interest) given to Subsidiaries, Joint venture, Associates andOthers:-

(Rs in lacs)As at Maximum

31.03.2007 Balance during the year

I. Subsidiaries Ansal IT City & Parks Ltd. 152.01 250.79

TOTAL 152.01 250.79II. Joint Venture Companies

Ansal Landmark Township Pvt. Ltd. 1677.19 2688.56

TOTAL 1677.19 2688.56

III. Other AssociatesGlobal Consultants & Designers (P) Ltd. - 90.99Glorious Properties (P) Ltd. - 194.82Midair Properties (P) Ltd. - 77.78Sankalp Hotels Ltd. - 2.36Saya Plantation & Resorts (P) Ltd. - 0.04

TOTAL - 365.99

TOTAL ( I+II+III) 1829.20 3305.34

25. The Company’s interest in venture jointly controlled entities is given below:

Name Country Percentage of ownershipof Incorporation interest as at 31st March, 2007

Ansal Landmark Township Pvt. Ltd. India 49.38%Green Max Estates Pvt. Ltd. India 50%Ansal Mittal Township Pvt. Ltd. India 50%Ansal Seagull SEZ Developers Ltd India 50%Ansal Lotus Melange Pvt Ltd India 50%

82

26. The proportionate share of assets & liabilities, income & expenditure of the joint Venture Companies is given below(Rs. in lacs)

Current Year Previous YearI ASSETS

Net Fixed Assets 97.30 29.14Investments 159.78 -Deferred tax Assets (net) 2.21 -Current Assets, Loans & advances(a) Inventories 19792.12 11834.07(b) Cash and Bank Balances 620.89 400.69(c) Loans & advances 1798.10 3357.32(d) Debtors 464.92 0 Miscellaneous Expenditure to the extent 0.49 0.42not written off

II LIABILITIESReserves & surplus 60.72 (37.32)Secured Loans 9109.47 2248.99Unsecured Loans 2362.61 1819.44Current Liabilities and provisions -(a) Current Liabilities 10920.13 11537.60(b) Provisions 281.88 0.78

III IncomeSales 7957.34Other Income 14.39 40.43

IV. ExpenditureCost of Construction 7160.17 -Operating & Other expenses 42.15 8.92Interest & Finance Charges 34.78 81.69Depreciation 13.27 2.46Taxes 280.50 0.84

V Contingent liabilities 83.86 79.00

27. Previous year figures have been regrouped/rearranged wherever considered necessary, to make them comparablewith Current Year’s figures.Since current year figures include figures of ATPL merged with effect from 1st April2006, these are not strictly comparable with those of the previous year.

For and on behalf of the Board

SUSHIL ANSAL ANIL KUMARChairman Whole Time Director & CEO

AMITAV GANGULY ANUP KAPOORSr. V.P. (Corporate Affairs) Chief Financial Officer& Company Secretary

Place : New DelhiDated : 25th June, 2007

83

PART IV OF SCHEDULE VI TO THE COMPANIES ACT, 1956

BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILERs. In Lacs

Registration Details State Code 55Registration No.4759Balance Sheet date 31.03.2007

Capital raised during the yearPublic Issue : Nil

Right Issue : Nil

Bonus Issue : Nil Private Placement : 68175

Position of Mobilisation and Deployment of Funds

Total Liabilities Total Assets117272.88 117272.88

Sources of FundsPaid up capital Reserves and Surplus2837.53 90353.07

Secured Loans Unsecured Loans19181.03 4901.25

Application of FundsNet Fixed Assets Investments3026.73 1121.57

Net Current Assets Misc.Expenditure112979.69 -

Performance of the Company Total ExpenditureTurnover 56850.4376614.37

Profit/(Loss) before Tax Profit/(Loss) after Tax19763.94 13190.71

Earnings per Share (Rs.) Dividend Rate25.36 Basic 25% 11.93 Diluted

Generic Names of three Principal Products/Services of CompanyItem Code No. (ITC Code) N.AProduct Description Real Estate Development/

Promotion & Investment

For and on behalf of the Board

SUSHIL ANSAL ANIL KUMARChairman Whole Time Director & CEO

AMITAV GANGULY ANUP KAPOORPlace : New Delhi Sr. V.P. (Corporate Affairs) Chief Financial OfficerDated : 25th June, 2007 & Company Secretary

84

TO THE BOARD OF DIRECTORS OF THE ANSAL PROPERTIES & INFRASTRUCTURE LIMITED ON THECONSOLIDATED FINANCIAL STATEMENTS OF THE GROUP

1. We have audited the attached consolidated Balance Sheet of Ansal Properties & Infrastructure limited (APIL), itssubsidiaries and joint ventures as at 31st March 2007, consolidated Profit & Loss Account and the consolidatedCash Flow Statement for the year ended on that date.

2. These consolidated financial statements are the responsibility of the Company’s management and have beenprepared by the management on the basis of separate financial statements of the Parent Company, its Subsidiariesand Joint Ventures for the year ended 31st March, 2007. Our responsibility is to express an opinion on theconsolidated financial statements based on our audit.

3. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standardsrequire that we plan and perform the audit to obtain reasonable assurance about whether the financial statementsare free of material misstatement. An audit also includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financial statement presentation. We believethat our audit and the reports of other auditors provide a reasonable basis for our opinion. -

4. We did not audit the financial statements of four Subsidiaries - Star Estate Management Ltd., Delhi TowersLimited, Ansal Township & Infrastructure Limited, Ansal SEZ Projects Limited and two joint venture CompaniesAnsal Lotus Melange Projects Limited and Ansal Seagull SEZ Developers Limited, whose financial statementsreflect total assets of Rs.34699.51 lacs as at 31st March 2007 and total revenue of Rs.3670.63 lacs for the yearthen ended and net cash flows from operating activities of Rs.(9532.80) lacs. These financial statements havebeen audited by other auditors whose reports have been furnished to us, and our opinion, in so far as it relatesto the amounts included in respect of these subsidiaries and Joint Ventures is based solely on the report of theother auditors.

5. We report that the consolidated financial statements have been prepared by the Company in accordance withthe requirements of Accounting Standard 21- “ Consolidated Financial Statements” and Accounting Standard27-”Financial Reporting of Interests in Joint Ventures” issued by the Institute of Chartered Accountants of India,on the basis of the separate financial statements of the Company, its Subsidiary companies and Joint Venturesincluded in the Consolidated Financial Statements.

6. To the best of our information and according to the explanations given to us and on consideration of the separateaudit reports on individual audited financial statements of the Company and the aforesaid subsidiaries and JointVenture Companies, in our opinion the attached consolidated financial statements read with accounting policiesand notes thereon give a true and fair view in conformity with the accounting principles generally accepted inIndia :

(i) in the case of Consolidated Balance Sheet, of the state of affairs of the Group as at 31st March 2007.

(ii) in the case of Consolidated Profit & Loss Account, of the profit of the Group for the year ended on thatdate.

(iii) In the case of Consolidated Cash Flow Statement, of consolidated cash flows of the Group, for the yearended on that date.

For KHANNA & ANNADHANAMCHARTERED ACCOUNTANTS

Place : New Delhi (P.S. Pabreja )Dated : 25th June 2007 Partner

Membership No.10692

85

CONSOLIDATED BALANCE SHEET AS AT 31ST MARCH, 2007

Schedule As at As at31st March, 2007 31st March,2006

Rs. in Lacs Rs. in LacsSOURCES OF FUNDS Shareholders Funds Share Capital 1 2,837.53 1,749.98 Share Application Money - 25.00 Reserves & Surplus 2 91,240.40 94,077.93 13,295.02 15,070.00Minority Interest 439.69 439.95 Loan Funds Secured Loans 3 39,864.64 11,933.31 Unsecured Loans 4 7,325.69 47,190.33 2,512.29 14,445.60Total funds employed 141,707.95 29,955.55

APPLICATION OF FUNDS

Fixed assets 5 Gross Block 7,683.46 8,061.80 Less: Depreciation 2,500.59 2,582.39 Net Block 5,182.87 5,479.41Investments 6 2,333.45 573.15 Deferred Tax Asset (Net) 144.33 282.61

Current Assets, Loans and Advances

Inventories 7 74,593.16 47,541.04 Sundry Debtors 8 15,641.96 7,660.49 Cash & Bank Balances 9 23,522.17 3,456.32 Loans & Advances 10 103,797.48 33,274.14

217,554.77 91,931.99 Less: Current Liabilities & Provisions

Current Liabilities 11 81,380.09 66,313.66 Provisions 12 2,128.01 1,998.58

83,508.10 68,312.24 NET CURRENT ASSETS 134,046.67 23,619.75

Miscellaneous Expenses 17 (to the extent not written off of adjusted) 0.63 0.63Total Assets (Net) 141,707.95 29,955.55

ACCOUNTING POLICIES AND NOTES 18

As per report of even date attached For and on behalf of the Board

for KHANNA & ANNADHANAMChartered Accountants

SUSHIL ANSAL ANIL KUMARChairman Whole Time Director & CEO

(P. S. PABREJA)PartnerMembership No.10692

AMITAV GANGULY ANUP KAPOORPlace : New Delhi Sr. V.P. (Corporate Affairs) Chief Financial OfficerDated : 25th June, 2007 & Company Secretary

86

CONSOLIDATED PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2007SCHEDULE 2006-07 2005-06

Rs. in Lacs Rs. in LacsINCOME Sales, Maintenance charges recovered 13 88,155.68 37,702.55& Other Income Increase/(Decrease) in Stocks 14 (659.08) 87,496.60 373.42 38,076.97

EXPENDITURE Cost of Construction 15 53,842.63 24,083.43 Selling , Maintenance 16 12,339.80 6,954.59& Administrative ExpensesPurchase of Traded Goods 12.29 104.04 Depreciation 5 375.37 66,570.09 302.36 31,444.42

Profit before Tax , Prior Period adjustments 20,926.51 6,631.55and exceptional ItemsLess: Prior Period Adjustments (Net) 64.30 14.24

20,862.21 6,617.31 Less: Provision for Tax Current Tax 6,803.84 1,947.87 Deferred Tax 136.65 (99.94) Fringe Benefit Tax 56.40 32.27

13,865.32 4,737.11(Add)/Less Income Tax Pertaining to Earlier Years 38.10 (29.83)

Profit for the Year before exceptional Items 13,827.22 4,766.94 Exceptional Items (Gross) (Previous year net of tax) 616.43 1,028.64 Profit for the year 13,210.79 3,738.30 Provision for amounts relating to earlier years 698.70 -Less: Amounts adjusted from General Reserve 698.70 - - - (See Note No. 6 ) 13,210.79 3,738.30 Add: Adjustments on consolidation (0.82) 21.65 Add: Balance of Profit from Previous Year 1,963.94 1,596.29 Balance available for appropriation 15,173.91 5,356.24 Add: Minority Interest 0.25 6.78 AppropriationsFinal/ Interim Dividend Including dividend Tax 993.13 350.00Dividend Tax 156.14 49.09 Transferred to General Reserve 7,500.00 8,649.28 3,000.00 3,399.08

Balance Carried to Balance Sheet 6,524.88 1,963.94 Earning per share (Rs.) (See Note 18)-Basic 25.40 7.19-Diluted 11.95 3.38

Accounting Policies & Notes 18

As per report of even date attached For and on behalf of the Board

for KHANNA & ANNADHANAMChartered Accountants

SUSHIL ANSAL ANIL KUMARChairman Whole Time Director & CEO

(P. S. PABREJA)PartnerMembership No.10692

AMITAV GANGULY ANUP KAPOORPlace : New Delhi Sr. V.P. (Corporate Affairs) Chief Financial OfficerDated : 25th June, 2007 & Company Secretary

87

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH 20072006-07 2005-06

Rs. in Lacs Rs. in LacsA. Cash flow from Operating Activities :

Net profit before tax, prior period adjustments & exceptional Items 20,926.51 7,741.82Adjusted for Adjustments pertaining to earlier years (64.30) (14.24)Assets written off/Impairment of Fixed Assets - 17.97Depreciation 381.95 347.93Deferred Expenses 0.26 2.76Employee stock option expenses 45.97 -Provision for Doubtful Debts - 84.12Interest Expenses 2,048.28 1,389.78Interest Income (2,333.09) (1,391.70)Amounts Written back (441.57) (248.21)Amounts written off 370.12 911.46Profit on Sale of Investments - (0.89)Dividend Income (159.26) (13.47)Loss on Sale of Fixed Assets 710.08 0.92Profit on sale of Fixed Assets (2.00) (11.32)Exchange Loss - 556.44 19.80 1,094.92Operating Profits before Working Capital Changes 21,482.95 8,836.74Adjusted forTrade Payables & Other 2,075.63 20,646.50 Inventories (19,939.12) (11,179.63)Trade and Other Receivables (8,173.67) (970.88)Loans and Advances (64,231.55) (90,268.71) (14,634.34) (6,138.35)Cash generated from Operations (68,785.76) 2,698.39Taxes Paid (7,432.62) (1,650.35)CASH FLOW BEFORE EXCEPTIONAL ITEMS (76,218.38) 1,048.04Exceptional Items (616.43) (1,550.56)Cash flow from operations (76,834.81) (502.52)

B. Cash flow from Investing Activities :Dividend received 159.26 13.47Interest received 2,333.09 1,169.11Adjustments on consolidation 42.44 22.19Sales of Fixed Assets 177.67 23.84Purchase of Fixed Assets (784.77) (363.32)Sales of Investments 2.60 614.16Purchase of Investments (1,762.90) (63.44)NET CASH FROM INVESTING ACTIVITIES 167.39 1,416.00

C. Cash Flow from Financing Activities :Interest & Finance Charges (1,608.56) (1,373.18)Proceeds from Share capital (Net) 66,438.42 1,195.00Proceeds from Long Term Borrowings 58,650.07 5,579.07Repayment of Long Term Borrowings (26,276.45) (4,471.65)Dividend paid including Dividend Tax (874.75) (99.77)Interim Dividend including Dividend TaxNET CASH USED IN FINANCING ACTIVITIES 96,328.73 829.47NET INCREASE IN CASH AND CASH EQUIVALENTS 19,661.31 1,742.96CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 3,860.86 2,117.91CASH AND CASH EQUIVALENTS AT THE CLOSING OF YEAR 23,522.17 3,860.86

Note:1. Previous year figures have been regrouped/rearranged, wherever considered necessary, to make them comparable with current year’s figures.2 Interest received from Banks on deposits and from Customers for delayed payments is classified as Cash flow from Investing Activities.3 The Cash flow Statement has been prepared under indirect method as perAccounting standard (AS-3 ) ‘Cash flow Statement’ issued by ICAI.

As per report of even date attached For and on behalf of the Board

for KHANNA & ANNADHANAMChartered Accountants

SUSHIL ANSAL ANIL KUMARChairman Whole Time Director & CEO

(P. S. PABREJA)PartnerMembership No.10692 AMITAV GANGULY ANUP KAPOOR

Sr. V.P. (Corporate Affairs) Chief Financial OfficerPlace : New Delhi & Company SecretaryDated : 25th June, 2007

88

SCHEDULE- 1 As at As atSHARE CAPITAL 31st March, 2007 31st March, 2006

Rs. in Lacs Rs.in Lacs

AUTHORISED (See note below)16,00,00,000 (Previous Year 5,00,00,000) 8,000.00 5,000.00Equity Shares of Rs.5/- each(Previous Year Rs 10/-each)

30,00,000 (Previous year 15,00,000) 3,000.00 1,500.00Preference Shares of Rs.100/- each

11,000.00 6,500.00ISSUED, SUBSCRIBED AND PAID UP5,67,50,550 (Previous Year 1,74,99,825) 2,837.53 1,749.98Equity Shares of Rs 5 each fully paid up(Previous Year of Rs 10/-each )

2,837.53 1,749.98

Notes(1) 1,50,07,125 Equity Shares of Rs. 10/- each issued as Bonus Shares by capitalisation of Share Premium / General Reserves.(2) During the year 1,74,99,825 Equity Shares of Rs.10/- each fully paid were divided into the 3,49,99,650 Equity Shares of Rs. 5/-

each fully paid .

(3) Authorised Capital of the Company has increased as under :(a) Equity shares from 5,00,00,000 to 14,00,00,000 of Rs. 5/- each and Preference Shares from 15,00,000 to 30,00,000 in theExtra Ordinary General Meeting held on 2.5.2006.(b) Equity shares from 14,00,00,000 to 16,00,00,000 of Rs.5/- each vide Hon’ble High Court order dated 31.8.2006 consequent tothe merger of Ansal Township & Projects Limited with the company. (Refer Note- 2 )

(4) During the year the Company has issued and allotted 67,50,000 Equity Shares under Qualified Institutions Placement Scheme.

SCHEDULE - 2 As at As atRESERVES & SURPLUS 31st March, 2007 31st March, 2006

Rs. in Lacs Rs. in Lacs

Capital Reserve # 160.50 160.50As per last Balance Sheet 18.27 15.83Add: Addition during the year 16.35 2.44

195.12 - 178.77Securities Premium AccountAs per last Balance Sheet 842.14 702.20Add Received during the year 67,837.50 723.27Less: Expenses incurred on issue ofshares under QIP scheme 1,804.50 (Refer Note 3) - 66,875.14 583.33 842.14Less: Utilised for issue of Bonus SharesAmalgamation ReserveAs Per last Balance sheet 530.14 530.14Revaluation ReserveAs Per last Balance sheet 524.80 552.42Less: Transfer to Profit & Loss Account 26.24 498.56 27.62 524.80General Reserve As Per last Balance Sheet 9,255.23 6255.23Add : Transfer From Profit & Loss Account 7,500.00 3,000.00Add : Adjustment on merger of 560.03 - ATPL with the Company (Refer Note 2(c)(ii))Less: Transfer to Profit & Loss Account 698.70 - against provision for amounts 16,616.56 9,255.23 relating to earlier years (Refer Note No. 6)

Profit and Loss Account - Balance 6,524.88 1963.9491,240.40 13,295.02

# Represents forfeiture of Warrants.

89

SCHEDULE - 3 As at As atSECURED LOANS* 31st March, 2007 31st March, 2006

Rs. in Lacs Rs. in Lacs

0% Redeemable OptionallyConvertible Debentures- Nominal value 819.66 - (See Note No. 9)

From Banks-Cash Credits, 2,335.13 3,562.80-Term Loans 13,432.48 752.16-Vehicle Loan 266.75 16,034.36 190.32 4,505.28

From Corporate Bodies - Term Loan 23,010.62 7,428.0339,864.64 11,933.31

* Due within one year Rs. 15,361.40 Rs..1,953.99

Securities

1. Nominal value of Debentures is secured by mortgage of flats owned by the Parent Company.2. Loans from Banks are secured by mortgage/hypothecation of immovable/movable assets on parri-passu basis, assignment of

receivables including rent etc and Land & Buildings belonging to subsidiaries / associate Companies . The loans are additionallysecured by the personal guarantee of the two Directors who are shown Promoter directors as per SEBI disclosure.

3. Term Loans from Corporate Bodies are secured by mortgage/hypothecation of immovable/movable assets of the Company andLand & Building belonging to associate Companies and charge on future rents. The loans are additionally secured by personalguarantee of the two Directors and pledge of shares of the company owned by promoters/ persons acting in concert with promotersin respect of loan taken from Housing Development Finance Corporation Ltd.

4. Vehicle loans are secured by hypothecation of vehicles.

SCHEDULE - 4 As at As atUNSECURED LOANS * 31st March, 2007 31st March, 2006

Rs. in Lacs Rs. in Lacs

0% Redeemable Optionally 4180.34 -Convertible Debentures( See Note - 9 )

From Corporate Bodies 1,895.97 1,189.57Add: Interest accrued and due 30.41 1,926.38 21.37 1,210.94From Shareholders (of joint venture company)

498.06 246.89

FIXED DEPOSITS

From Shareholders 6.03 13.02From Public 714.88 720.91 1,041.44 1,054.46

7,325.69 2,512.29

* Due within one year Rs.4768.96 lacs Rs.. 815.27 Lacs

90

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91

(Rs. in Lacs)SCHEDULE - 6INVESTMENTS

Number of Face value As at Additions Deletions Balance asShares of Rs.10/- 01.04.2006 during the during the at 31.03.2007

each unless year year otherwise

stated

INVESTMENTS [AT COST] - LONG TERM

(A) SHARES IN COMPANIES

(a) UNQUOTED

TRADE

(i) Nirman Overseas Pvt. Ltd. 1000 100 3.60 - 2.60 1.00(ii) Swede (India) Teletronics Ltd. 20000 2.00 - - 2.00(iii) Pentagon Screw & Fastners Ltd. 5000 0.50 - - 0.50(iv) Televista Electronics Ltd. 775 100 3.12 - - 3.12(v) Ansal Housing & Estates pvt. Ltd. 100 1,000 1.00 - - 1.00(vi) Singa Real Estates Ltd. 9500 9.60 - - 9.60

(vii) winsum Overseas Pvt. Ltd - 0.25 - 0.25(b) QUOTED

OTHER THAN TRADE

(i) Ballarpur Industries Ltd. 100 0.13 - - 0.13

(ii) ITC Ltd. 341,175 1 552.74 - - 552.74 MUTUAL FUNDS-

(i) PNB Principal Mutual Fund - 594.50 - 594.50(ii) Principal Large Cap Fund (Dividend Payout) 0.26 - - 0.26 (iii) Kotak Opportunities Fund - 2.68 - 2.68(iv) Prudential ICICI Floating rate Fund - 26.15 - 26.15(v) Reliance Equity Opportunities Fund - 28.35 - 28.35(vi) Reliance Floating Rate Fund - 26.22 - 26.22(vii) Sundaram Floating Rate Fund - 26.05 - 26.05(viii) Sundaram India Leadership Fund - 5.81 - 5.81(ix) Templeton Floating Rate Fund - 44.51 - 44.51(x) Reliance Floating Rate Fund - 1,008.38 - 1,008.38(C) IN PARTNERSHIP FIRM - TRADE Ansal Industrial Financial Corporation. 0.20 - - 0.20

573.15 1,762.90 2.60 2,333.45

Current Year Previous YearRs. In lacs Rs. In lacs

Cost of quoted shares 2,315.78 553.13 Market value of quoted shares 2,275.05 662.18 Cost of Unquoted Shares 17.67 20.02

92

SCHEDULE - 7 As at As atINVENTORIES 31st March, 2007 31st March, 2006

Rs. in Lacs Rs. in Lacs

(As taken, valued and certified by the Management)

Building materials, Stores & Spare Parts 388.58 210.82

Flats/Shops/Houses/Farms/Traded Goods etc. 3,665.86 3,109.88

Projects/Contracts Work in Progress (Schedule 15) 69,785.51 42,438.44

Land for Projects 753.21 1,781.90

74,593.16 47,541.04

NOTE :- For valuation of Inventories, refer Accounting Policy No -5

SCHEDULE - 8 As at As atSUNDRY DEBTORS (UNSECURED) 31st March, 2007 31st March, 2006

Rs. in Lacs Rs. In Lacs

OUTSTANDING FOR A PERIODEXCEEDING SIX MONTHS

Considered Good 2,421.56 4018.92

Considered Doubtful 698.70 77.88

Less: Provision for Doubtful Debts (698.70) 2,421.56 (77.88) 4,018.92(Refer Note 6)

OTHER DEBTS

Considered Good 13,220.40 3,641.57

15,641.96 7,660.49

SCHEDULE - 9 As at As atCASH AND BANK BALANCES 31st March, 2007 31st March, 2006

Rs. in Lacs Rs. in Lacs

Cash in Hand 1,498.75 159.33

BANK BALANCES:

With Scheduled Banks:

- In Current Accounts 3,287.76 2,097.64- In Fixed Deposit Accounts * 18,442.25 1,160.16Add: Interest Accrued 293.41 22,023.42 39.19 3,296.99

23,522.17 3,456.32

* Deposits under Bank lien for issue of Bank Guarantee(in Lacs) Rs. 2141.53 Rs.956.08

93

SCHEDULE - 10 As at As atLOANS & ADVANCES 31st March, 2007 31st March, 2006Unsecured considered good unless otherwise stated. Rs. in Lacs Rs. in Lacs

LoansConsidered Good 2582.91 5212.48 Advances For purchase of land (See Note 5(a))* - Land holding Companies 48,678.67 14,796.54 -Collaborators 19,142.35 7,695.79 -Others 18,991.67 86,812.69 2,585.37 25,077.70

Security Deposits 4,959.53 968.95 Payment to Suppliers/Contractors 6,440.02 1,314.30Advance Tax paid (Net of provisions) 198.44 -Advances recoverable in Cash or in 2,803.89 700.71kind or for value to be receivedConsidered Doubtful - 372.12 Less: Provision for Doubtful Advances - - (372.12)

103,797.48 33,274.14

Rs.. In Lacs Rs.. in Lacs * Includes advance for purchase of land to a 26.45 76.06 Private Limited Company in which a Director of the company is a Director (in lacs).

SCHEDULE - 11 As at As atCURRENT LIABILITIES 31st March, 2007 31st March, 2006

Rs. in Lacs Rs. in Lacs

Sundry Creditors 1 16,508.17 16,290.18Advances from Customers against 56,068.10 43,289.87flats / shops / houses / plots etc.2Common Assets replacement funds 1,870.59 1,631.81As per last balance sheet 408.48 367.34(Less) Assets replaced during the year (151.28) 2,127.79 128.56 1,870.59Fire Protection and other funds 127.44 94.53Security Deposits from Contractors/ Suppliers etc 3,641.14 2,721.11Advances from employes againststock options 67.92 - Other Liabilities 2,243.98 1,882.51Interest accrued but not due on -Loans 538.35 97.98- Deposits 57.20 595.55 66.88 164.86

81,380.09 66,313.66

There are no amount due and outstanding to be Credited to the Investor Education and Protection fund.

1 Includes dues to Small Scale Industrial Undertaking. Rs. 49.23 Lacs Rs. 2.99 Lacs2 Represents advances of Long Term Nature adjustable against sale consideration of plot / flats / houses etc.

94

SCHEDULE - 12 As at As atPROVISIONS 31st March, 2007 31st March, 2006

Rs. in Lacs Rs. in Lacs

Proposed Dividend including Dividend Tax 663.95 399.08Stamp duty 902.75 902.75Gratuity 426.81 283.35Leave Encashment 114.65 65.48Superannuation 19.85 19.85(Discontinued Scheme)Taxes (Net of advance Tax/Tax deducted at source) - 328.07

2,128.01 1,998.58

SCHEDULE -13SALES & MAINTENANCE CHARGES &OTHER INCOME As at As at

31st March, 2007 31stMarch, 2006 Rs. in Lacs Rs. in Lacs

Sales 79,782.69 31,907.56Sales- Traded Goods 17.66 159.65Know how fee 440.68 389.53Maintenance Charges recovered 3,093.58 2,219.50Interest Received (Gross)- Deposits with Banks 685.39 44.78- Delayed payments from Customer 1,259.78 624.12- Loans 294.34 329.13- On Income Tax Refund 91.25 66.75- Others 2.33 299.19

2,333.09 1,363.98Rent Received (Gross) 934.00 621.59Administration Charges 780.16 557.44Forfeitures 6.88 47.57Other Receipts 133.71 163.96

Amounts written Back 441.57 248.21Profit on sale of fixed assets 0.60 11.32Profit on Sale of Investment 31.80 0.89Dividend from Investments 159.26 11.35

88,155.68 37,702.55

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SCHEDULE - 14INCREASE / (DECREASE) IN STOCKS As at As at

31st March,2007 31stMarch, 2006Rs.in Lacs Rs.in Lacs

Stocks As on 01.04.2006 3,109.88 4,122.57(Flats/Shops/Houses/Plots/Farm /TradedGoods etc.)Less: Capitalised during the year - 1,497.70Add : Adjustments on Merger of ATPL 1,215.07 4324.95 - 2,624.87Less : Stocks As on 31.03.2007 3,665.87 2,998.30(Flats/Shops/Houses/Plots/Farm /Traded Goods etc.)

(659.08) 373.42

SCHEDULE - 15COST OF CONSTRUCTION / PROJECTS / As at As at

31st March, 2007 31st March, 2006 Rs.in Lacs Rs.in Lacs

CONTRACTS IN PROGRESSBalance As per last Year 42,438.44 34,054.47Adjustments on consolidation - 1,277.24of joint venturesAddition on merger of ATPL 10,997.88 -Cost of Land 14594.65 19,194.40Materials Consumed 5,881.99 3,388.32Salaries, Wages &Other Amenities to Employees 820.54 339.09Surrender of Rights 749.49 321.11Commission & Brokerage 1,763.65 872.13Expenses through Collaborators 2,309.04 101.33Expenses through Contractors 18,365.77 8,885.59External /InfrastructureDevelopment Charges 9,826.73 3,337.09Architect Fees 1,143.67 259.14Miscellaneous Expenses 3,226.56 1,439.13Licence/Scrutiny /Conversion Charges 10,287.60 3,084.30Compounding Fee 1.21 13.77Commercialisation charges 41.11 -Projects Completion Expenses - 271.26Interest on Loans/deferred credits 3,121.23 422.89Depreciation 1.85 125,571.41 5.15 77,266.41

Less: - Miscellaneous Income/Adjustments 73.36 40.98- External development charges relating to 1637.21 5,729.18 completed projects recovered from customers and included in advances adjusted ( Refer Note 8)-Expenditure relating to Sushant Lok III Project - 4974.38 transferred- Expenditure related to other projects tansferred 232.70 - to Other entities - Cost of construction charged 53,842.63 24,083.43 to Profit & Loss Account

55,785.90 34,827.97

Balance Carried to Balance Sheet 69,785.51 42,438.44

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SCHEDULE - 16SELLING MAINTENANCE & ADMINISTRATIVE EXPENSES As at As at

31st March, 2007 31st March, 2006Rs.in Lacs Rs. in Lacs

Salaries, Wages , Allowances & Commission 1,979.72 998.52Contribution to Gratuity, Provident and other Funds 333.32 149.64Other benefits to employees 315.75 96.77Employee Stock Option Compensation Expenses 45.97 -Rent 195.11 67.62Lease Rental, Hire & Other charges 24.23 15.96Rates & Taxes 9.53 0.05Advertisement & Publicity 830.37 57.12Discounts & Rebates 342.05 168.57Interest on- Public Deposits 89.20 136.01- Debentures 168.49 -- Term Loans 1915.81 559.33- Others 1088.03 904.92 Less : Interest on borrowed funds transferred (1213.25) 2,048.28 (229.56) 1370.70 to cost of constructionRepairs and Maintenance- Machinery 160.68 129.86 - Building 448.22 405.28- Others 967.22 292.03 827.17

1,576.12Directors’ Meeting Fees 13.34 4.78Traveling & Conveyance` 428.23 239.47Stationery & Printing 205.05 82.50Postage, Telegrams, & Telephone 130.46 79.59Legal & Professional Charges 3,411.43 136.45 -Less : Share issue Expenses adjusted against (1804.50) 1,606.93 - 136.45 securities premium accountInsurance 123.57 90.76Bank Commission & Other Charges 189.81 168.55Electricity and Water Expenses 677.93 745.04Amounts Written Off 820.12 911.33Less : Provision made in earlier year 450.00 370.12 - 911.33Provision for Doubtful Debts , Advances & Others 5.50 84.12Security expenses 293.58 269.99House Tax 31.12 33.86Ground Rent 99.81 128.00Miscellaneous Expenses written off - 0.20impaired/Lost Assets written off - 17.97Miscellaneous Expenses 370.69 171.72Exchange Loss - 19.80Loss on sale of fixed assets 93.21 -Loss on sale of Investments - 18.34

12,339.80 6,954.59

SCHEDULE 17 As at As atMISCELLANEOUS EXPENDITURE 31st March, 2007 31st March, 2006(to the extent not written off /adjusted) Rs. in lacs Rs. in lacs

Preliminary Expenses 0.63 3.39Add: Expenses during the year 0.72 0.67Less: Adjustments on consolidation - 3.23Less: Written off during the year 0.72 0.20Balance carried to Balance Sheet 0.63 0.63

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SCHEDULE 18ACCOUNTING POLICIES AND NOTES(CONSOLIDATED)

A. SIGNIFICANT ACCOUNTING POLICIES1. Group Companies

Ansal Properties & Infrastructure Limited (The Company) has six subsidiaries, five of them are wholly owned andfive joint venture companies (the Group), as given in the following table :

S. Name of Company Country of Percentage ofNo. Incorporation ownership

interest as on31st March, 2007

Subsidiaries1 Delhi Towers Limited India 1002 Start Estates Management Limited India 1003 Ansal Township Infrastructure Limited India 1004 Ansal SEZ Projects Limited India 1005 Ansal IT City and Parks Limited India 66.236 Ansal Condominium Ltd. India 100% Subsidiary

of Delhi Towers Ltd.Joint Ventures

1 Ansal Landmark Townships Private Limited India 49.382 Green Max Estates Private Limited India 503 Ansal Mittal Township Private Limited India 504 Ansal Lotus Melange Projects Limited India 505 Ansal Seagull SEZ Developers Limited India 50

2. BASIS OF PREPARATION OF ACCOUNTSThe Financial Statements have been prepared to comply in all material respects with the mandatory AccountingStandards issued by the Institute of Chartered Accountants of India (ICAI) and the relevant provisions of theCompanies Act, 1956. The Financial Statements have been prepared under the historical cost convention, on thebasis of going concern and on an accrual basis except as stated elsewhere.

3. USE OF ESTIMATESThe preparation of financial statements in conformity with generally accepted accounting policies requiresmanagement to make estimates and assumptions that affect the reported amounts of assets and liabilities anddisclosure of contingent assets and liabilities at the date of the financial statements and the reported accounts ofrevenues and expenses for the year presented. Actual result could differ from these estimates.

4. FIXED ASSETSFixed Assets are stated at cost less accumulated depreciation. Flats held by Company, which have been revalued,are stated at revalued amounts.

5 INVENTORIESInventories are valued as under:-i) Building Materials, Stores, Spare Parts at cost on FIFO basisii) Shuttering & Scaffolding Materials at depreciated costiii) Apartments / Houses / Shops/

Flats (unsold)/Traded Goods at lower of cost or market valueiv) Projects / Contracts Work in Progress at cost

6. DEPRECIATIONDepreciation is provided on pro-rata basis at rates prescribed in Schedule-XIV of the Companies Act, 1956 onwritten down value method. Shuttering and Scaffolding material is depreciated at 30% of original cost. Assetscosting up-to Rs.5, 000/- are fully depreciated in the year of purchase.

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7. INVESTMENTSCurrent investments are stated at lower of cost and market value. Long term investments are stated at cost. Declinein value of long-term investments is recognized, if considered other than temporary.

8. REVENUE RECOGNITIONa) The Group follows “Percentage of Completion Method” of accounting for contracts and constructed residential,

Institutional and commercial properties. As per this method, the revenue is recognized in proportion to theactual cost incurred as against the total estimated cost of the projects under execution subject to actual costbeing 30% or more of the total estimated cost.

b) The revenue on sale of residential, institutional and commercial plots is recognized on a proportionate basiswhen 50 % of the progress has been achieved as measured in terms of actual cost incurred to total estimatedcost.

c) Income from know how fee is recognized in terms of the agreement with the recipient of know how.d) The estimates relating to saleable area, sale value, estimated costs etc., are revised and updated periodically

by the management and necessary adjustments are made in the current year’s accounts.e) Indirect costs (as detailed in Schedule 16) are treated as “Period Costs” and are charged to the Profit & Loss

Account in the year incurred.f) Surrender of flats by buyers are valued at cost and accounted for as ‘Cost of Construction’. When sold,

proceeds are treated as ‘Sales’.g) For recognizing income and working out related cost of construction, major self-contained residential township

projects are divided into following broad categories i.e. Constructed Houses, Institutional, Commercial Flatsand Institutional, Commercial, Residential Plots.

h) Whereas all income and expenses are accounted for on accrual basis, interest on delayed payments bycustomers against dues is taken into account on acceptance or realization owing to practical difficulties anduncertainties involved.

i) Repair, maintenance and other costs incurred after the completion of the project are charged to the cost ofconstruction in the year of incurrence.

j) Income from maintenance services is recognized on accrual basis.

9. RETIREMENT AND OTHER BENEFITS

a) Contribution to the Provident Fund is charged to the revenue each year.b) Provisions for Gratuity and leave encashment are made on the basis of actuarial valuation at the year end.

10. FOREIGN CURRENCY TRANSLATION / CONVERSIONForeign currency assets and liabilities are restated at the year end rate and the differences are dealt with in the profitand loss account.

11. BORROWING COSTSBorrowing costs which have a direct nexus and are directly attributable to the construction projects are charged tothe project and other borrowing costs are expensed as period costs.

12. TAXES ON INCOME

Income tax expenses are accounted for in accordance with AS-22, Accounting for Taxes on Income, as stated below:a) Provision for current tax is made based on taxable income for the year computed in accordance with provisions

of the Income Tax Act, 1961.b) (i) Deferred tax is recognized, subject to the consideration of prudence, on timing differences, being the difference

between taxable income and accounting income that originate in one period and are capable of reversal in oneor more subsequent years.

ii) Deferred tax assets are recognized and carried forward to the extent that there is a reasonable certainty,except arising from unabsorbed depreciation and carry forward losses where deferred tax assets are recognized,to the extent that there is virtual certainty, that sufficient future taxable income will be available against whichsuch deferred tax assets can be realized.

13. IMPAIRMENTAt each Balance Sheet date, the management reviews the carrying amounts of Fixed Assets to determine whetherthere is any indication that these assets suffered an impairment loss. If any such indication exists, the recoverableamount of the asset is estimated in order to determine the extent of impairment loss and necessary provisions thereagainst. Reversal of impairment loss is recognized as income in the Profit & Loss Account.

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B. FINANCIAL NOTES

1. Contingent Liabilities. (Rs.in lacs)

Particulars As at As at31.03.2007 31.03.2006

(i) Claims by customers/ex-employees for interest, damages etc. (to the extent quantified) (See foot note i) 1924 1405(ii) Claims by local authorities etc. a) House Tax. 428.84 379

b) Ground Rent HUDCO — 1183 c) Ground Rent – others 291 291 d) Other Claims 84.59 368

(iii) Income/Wealth Tax Demands disputed by the Company. (See foot note ii (a) & (b)) On completion of regular assessment. 667 534 On Completion of block assessment. 1,884 1,884iv) Guarantees given by the Company to Banks / 52,548 38,945 Institutions on behalf of other Companies

NOTE(i). In respect of claims at (i) above, the management is of the opinion that in majority of the cases claims will be

successfully resisted or settled out of court on payment of nominal compensation.(ii) a) In the case of Income / wealth tax demands of Rs.667 lacs disputed by the Company, similar demands have been

set aside by the Appellate Authorities in most of the cases in the past. b) In respect of block assessment for the year 1.4.1989 to 12.2.2000, cross appeals filed by the Company and the tax

department, Income Tax Appellate Tribunal (ITAT) has given full relief to the Company and rejected department’sgrounds of appeal and tax claim of Rs.4,409 lacs. The department has gone for further reference to the High Court.The Parent Company, based on an arbitration award, had accounted for income of Rs. 4,200 lacs in the year 2002-03 and paid/provided income tax accordingly. The contingent liability not provided in the accounts in respect of blockassessments is estimated at Rs1884 lacs. The Company has been legally advised that it has a good case to succeedin the High Court.

(iii) Though there is uncertainty as to resolution of various disputes / claims / demands etc., based on management’sassessment, there will be no material outgo of resources on account of various contingent liabilities.

2. (a) In terms of the Scheme of Amalgamation & Arrangement (The Scheme) approved by order dated 31st August,2006 by Hon’ble High Court of Delhi, Ansal Township & Projects Limited (ATPL) (whose core business is realestate development) has been amalgamated with the Company with effect from 1st April, 2006.

(b) The amalgamation has been accounted for under the “Pooling of Interest Method” as prescribed by AccountingStandard (AS-14) – ‘Accounting for Amalgamations’ issued by the Institute of Chartered Accountants of India.

(c) In accordance with the said Scheme:i) All the assets other than shares of the Company held by ATPL, debts, liabilities, and obligations of ATPL

have been vested in the Company with effect from 1st April, 2006 and have been recorded at their respectivebook values. There were no material difference in the accounting policies of ATPL and the Company.1,58,47,500 equity shares of Rs.5/- each have been allotted to the shareholders of ATPL in the ratio ofone equity share of Rs.5/- each of the Company for every two equity shares of Rs.2/- each of ATPL. TheCompany’s paid up capital has accordingly increased by Rs.750.04 lacs. These equity shares rank pari-passu with the existing equity shares of the Company.

ii) Excess of Net Asset Value taken over by the Company amounting to Rs.560 lacs over the paid up valueof equity shares to be issued and allotted to ATPL shareholders has been transferred to the GeneralReserve.

iii) Equity Shares of the Company have been increased from 14,00,00,000 to 16,00,00,000 of Rs. 5/- each.

iv) As per the accounting treatment in the scheme approved by the Hon’ble High Court, the Company isrequired to record assets and liabilities of ATPL at fair values. Board of Directors of the Company are ofthe opinion that fair value of assets and liabilities of ATPL generally correspond to the book values ofthese assets and liabilities and therefore, these have been accounted for at book values in the books ofthe company, in compliance with the accounting treatment as per AS-14 referred to in para 2(b).

100

v) The Financial Statements for the year include figures of ATPL also and are therefore, not strictly comparablewith those of the previous year.

3. During the year the Company has issued and allotted 6,750,000 equity shares of Rs.5/- each at a premium ofRs.1005 per share under Qualified Institutions Placement Scheme (QIP) as per guidelines issued by SEBI in thisregard. Expenditure in connection with the issue of shares under QIP Scheme amounting to Rs.1804.50 lakhs hasbeen appropriated from the Share Premium Account. The proceeds of shares issued were utilized as under :

Nature of expenses Amounts(Rs.in lacs)

Acquisition of land 22,396Construction and development in various projects 10,859Repayment of borrowings 10,808Working capital purpose 8,208QIP issue expenses 1,804Fixed deposits with banks * 14,000Investment in Mutual fund * 100Total 68,175* These amounts have been utilised subsequent to the close of the year.

4 a) In accordance with the Guidance Note on “Recognition of Revenue by Real Estate Developers” issued by theICAI and to rationalize revenue recognition from large projects being implemented by the Company, witheffect from 1st April, 2006, the revenue from sale of plots is recognized on proportionate basis when 50% of theprogress has been achieved as against 2/3rd of the progress achieved in earlier years.

b) Upto 31.03.2003 revenue on account of sale of residential, commercial and institutional plots was recognizedon execution of sale deed and thereafter on proportionate basis. To bring in uniformity in accounting, revenuefrom unregistered plots sold upto 31.03.2003 has also been recognized during the year on the revised basisas stated in Note 4(a).

c) Due to the above changes in the basis of accounting, the sales for the year are higher by Rs.18826 lacs andprofit after tax for the year is higher by Rs.6187 lacs.

5. a) Advances include Rs.86812.69 lacs (previous year Rs.18670.70 lacs) representing payments to subsidiaries,certain land holding companies, collaborators and others towards cost of land acquired / to be acquired undercollaboration / other arrangements. The land acquired by landholding companies is registered in the name ofthese Companies but under possession, control of the Company and are being developed and sold by theCompany. Advances against purchase of land are adjustable against sale proceeds of land/ flats / housesetc., developed by the Company in terms of the collaboration agreements entered with these Companies.

b) Advances also include:i) Rs.2400 lacs (previous year Rs.1132 lacs) for purchase of land for which agreements are under execution.ii) Rs.418.76 lacs (previous year Rs 860 lacs) for purchase of land and other advances which are more

than three year old but considered good by the Management.iii) Rs.1672 lacs being proportionate share of the Parent Company given to the other parties (including in

the earlier years also). The advances have been made for commercial space in present and futureprojects which have not been identified. The Companies to whom these advances have been given havenot taken up any real estate project so far. No interest is being charged on these advances.

6. During the year the Parent Company has made provision of Rs.699 lacs recoverable in respect of Iraqi Project. Asthe amount represents adjustment relating to earlier years, the provision against this amount has been shown in theProfit & Loss Account after determination of current net profit as permitted by AS-5 (Net Profit or Loss for the Period,Prior Period items and Changes in Accounting Policies). An equal amount has been transferred from the GeneralReserve to the Profit & Loss Account.

7. In view of the Hon’ble Supreme Court judgment in the case of DLF Vs. State of Haryana and others, the ParentCompany has a right to sell / lease community buildings like schools, clubs, hospitals etc.,. The Parent Companyhas recognized the development costs incurred on these properties during the current year. This has resulted inincrease in work in progress and profits of the year after tax by Rs.1211.05 lacs.

8. On reconciliation of Sushant Lok Project adjustments have been made towards external development charges etc.amounting to Rs.1637 lacs recovered from the customers and included in advances from customers and cost ofconstruction / work in progress in the earlier years.

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9. During the year the parent Company has Issued and allotted 8,19,659 Zero Coupon secured Redeemable OptionallyConvertible Debenture (ROCD’s), of face value of Rs. 100/- each at a premium of Rs. 510.01 per ROCD agreegatingto Rs. 5000 Lacs. Out of this amount, nominal value of debentures of Rs. 819.66 lacs which is secured by mortgageof flats belonging to the parent Company has been treated as secured loan and balance amount of Rs. 4180.34 lacsas unsecured loans, by way of Preferential Issue to HDFC Venture Trustee Company Limited (‘’ Hi- REF” ) as perthe SEBI (DIP) Guidelines 2000. The ROCD’s are optionally convertible into equity shares at a premium of Rs605.01 per share or are redeemable between 12 months to 18 months from the date of allotment of debentures i.e.,28 November 2006.

10. During the year, the Parent Company has approved and granted 116,700 stock options to the employees of theCompany and its wholly owned subsidiary and Directors of the Companies, Star Estate Management Limited. inaccordance with the SEBI (Employee Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines,1999 and the Employees stock Option Scheme ,2006 of the company. The excess of latest available closing price onBombay Stock exchange (“BSE”) prior to the date of grant of options over the price at which they were granted, hasbeen recognized as Employees Compensation Cost to be proportionately charged to the profit & loss account overthe vesting period. The amount expensed during the year is Rs.45.97 lacs

11. In respect of Mohali Project in Punjab, the State Government has withdrawn the Licence for Development of theProject .Upto 31.03.2007 an expenditure of Rs.9763 lacs (including Rs.5166 lacs on Licence Fee and externaldevelopment charge paid to the State Government Authorities) have been incurred and is carried forward in work-in-progress. The amount included in the consolidated results are Rs. 11017 lacs and Rs. 5441 lacs respectively.

12. During the year SEML, one of the subsidiaries of the Company has sold certain flats owned by it resulting in a lossof Rs.616.43 lacs. This has been treated as an exception item and shown as such in the profit & loss account.

13. Prior Period Income/ Expenses(Rs . in lacs )

Current Year Previous YearExpenses 68.50 17.44Income (4.20) (3.20)Net Adjustment 64.30 14.24

14. Construction Contracts.In accordance with Accounting Standard (AS-7), following disclosure is being made relating to Construction contracts:

Current year Previous year(Rs . in lacs ) (Rs.in lacs)

Revenue recognition 1087 877Aggregate amount of cost incurred up to the reporting date 1004 958Surplus /(Losses ) recognized up to the reporting date 83 (151)Advance received 1568 113Amount retained by contractees 423 Nil

15. Payment to Auditors Amount in Rs.

Current year Previous yearAudit fee 1,991,929 7,35,000Tax audit fee 160,080 1,57,000Limited Review/ quarterly audit 925,980 2,46,000For Certification / Other services 958,318 4,93,000Out of pocket expenses 10,000 -

16. Deferred Tax Adjustments (Net)

Deferred Tax Debit (Net) of Rs.136.65 lacs arising on account of timing differences as per Accounting Standard-22for the current year (previous year deferred tax credit (net) of Rs.99.94 lacs) has been recognized in the accounts.Calculation of Deferred Tax Asset (Net) as on 31st March, 2007 is as given below:

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(Rs.in lacs)Particulars Current year Previous year

Deferred Tax Asset/Liabilities Expenses allowable on actual payment under Section 43 B of the Income Tax Act 177.71 117.55Provision for doubtful debts - 151.47Deferred Tax Asset / (Liabilities)Depreciation (33.38) 13.59

Deferred Tax Assets (Net) 144.33 282.61

17. Segmental ReportingHaving regard to integrated nature of real estate development business of the Group, the requirement of “SegmentalReporting” pursuant to Accounting Standards (AS- 17) is not applicable. The group has no other reportable segment.

18. Earning per shareBasic as well as Diluted earnings per share calculated in accordance with the requirements of Accounting Standard20-”Earnings Per Share” -

Particulars of earnings per share Current Year Previous YearNet Profit after Tax (Rs. in Lacs) * 13210.79 3738.30Weighted Average Number of Equity shares 52016303 52016303Diluted Number of Equity Share 110592904 110592904Nominal value of share (Rs.) 5 10Basic earning per share (Rs.) 25.40 7.19#Diluted earning per share (Rs.) 11.95 3.38#* - The figures are after exceptional items.# Consequent to split in Share and issue of further share during the year, earning per share of previous year hasbeen recalculated to make it comparable with the current year.

19. The effect of acquisition of the subsidiaries during the year on the consolidated financial statements are as under :

(Rs.in lacs)Name of the subsidiary Effect on Effect on

Group profit Group net assets

Ansal SEZ Project Limited Decreased by Rs.0.50 Increased by Rs.4.49Ansal Township and Infrastructure Ltd. Increased by Rs.23.42 Increased by Rs.5028.41

20. Related Party Transactions(A) Names of related parties and description of relationship:

i) Subsidiaries: OwnershipStar Estates Management Ltd 100%Delhi Towers Ltd * 100%Ansal I .T. City & Parks Ltd 66.23% Ansal Townships Infrastructure Ltd 100% Ansal SEZ Projects Ltd 100%

* - Ansal Condominium is 100% wholly owned subsidiary of Delhi Towers Ltd.

ii) Interests in Joint Ventures:The Company’s interest in venture, jointly controlled entities is given below:

Name Country of Percentage ofIncorporation ownership interest

as at 31st March, 2007Ansal Landmark Township Pvt. Ltd.* India 49.38%Green Max Estates Pvt. Ltd. India 50%Ansal Mittal Township Pvt. Ltd. India 50%Ansal Seagull SEZ Developers Ltd India 50%Ansal Lotus Melange Pvt Ltd India 50%* - contains nine wholly owned subsidiaries as under :

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Name Country of Percentage ofIncorporation ownership interest

as at 31st March, 2007Vridhi Properties Private Limited India 100%SIA Properties Private Limited India 100%Arena Constructions Private Limited India 100%Aerie Properties Private Limited India 100%Arezzo Developers Private Limited India 100%Lilac Real Estate Developers Pvt. Ltd. India 100%Sarvsanjhi Constructions Pvt. Ltd. India 100%Sphere Properties Private Limited India 100%Vriti Constructions Private Limited India 100%

iii) AssociatesThe following are the enterprises where common control exists:-Amba Bhawani Properties Pvt. Ltd., Ansal Colonisers & Developers Pvt. Ltd.,Ansal Housing & Estates Pvt. Ltd.,Ansal Infrastructure Projects Ltd., Ansal Project & Developers Ltd., Ansal Theatres & Clubotels Pvt. Ltd., AnsalTownships Infrastructure Ltd., Apna Ghar Properties Pvt. Ltd., Badrinath Properties Pvt. Ltd., Bajrang Realtors Pvt.Ltd., Chamunda Properties Pvt. Ltd., Chandi Properties Pvt. Ltd., Chiranjiv Investments Pvt. Ltd., Kalka PropertiesPvt. Ltd., Naurang Investment & Financial Services Pvt. Ltd.,New Line Properties & Consultants Pvt. Ltd., PlazaSoftware Pvt. Ltd., Prime Golf Ranking Pvt. Ltd., Prime Maxi Mall Management Pvt. Ltd., Sampark Hotels Pvt. Ltd.,Satrunjaya Darshan Construction Co. Pvt. Ltd., Singa Real Estates Ltd., Delhi Towers & Estates Pvt. Ltd., SithirHousing & Constructions and Winsum Software Pvt. Ltd.

iv) Associates in which there is “significant influence’’Ansal Buildwell Ltd,.Ansal Engineering Projects Ltd., Glorious Properties Pvt. Ltd., Midair Properties Pvt.Ltd., SayaPlantation Pvt. Ltd., Sankalp Hotel Private Ltd., Ansal Housing & Construction Ltd .Glorious Hotel Pvt Ltd GlobalConsultants & Designers Pvt Ltd APM Buildcon Pvt Ltd., Feber Star facilities Management Ltd., and KamdhenuAgro Ltd.

v) Key Managerial Personnel and their relatives ;

Mr. Sushil Ansal, Mr. Pranav Ansal, Mr. Anil Kumar, (Dr) Mrs Kusum Ansal, Mrs Archana Luthra, Mrs. Alpana Kirloskar,Mr Deepak Ansal, Mr. Gopal Ansal, Mrs.Indra Puri, Mrs Meenakshi verma, Mrs Sheetal Ansal, Ayush Ansal,MsAnuksha Ansal, Mrs Seema Kumar, Maghav Kumar, Nikita, Sanya, Mr. Ashwani kumar, Mr.Ashok Kumar and Mrs.AshaNandwani.

vi) Enterrpises in which parties having significant influence in joint venture Companies / their relativesexercisesignificant influence.

Bhatinda Chemicals Ltd, Green valley Constructions Pvt. Ltd., Sarva Priya Constructions Pvt. Ltd., national SyntheticsLtd., landmark Colonizers Pvt. Ltd., First Capital Pvt. Ltd., Silverlines Holding Pvt. Ltd., Kishan Fats Ltd. and R. K.Exports.

vii) Joint ventures (of joint venture companies)

OCL India Ltd., Silverglades Investment Pvt. Ltd.,

viii) Parties having significant influence in joit venture companies

Mr. Rajendre Mittal, Mr. Manoj Mittal, M/s. Mridu Hari Dalmia (HUF), Mr. Mridu Hari Dalmia and Mrs. Abha Dalmia

ix) Relatives of parties having significant influence in joint venture companies

Mrs. Swati Mittal, Mrs. Garima Mittal, Mr. Kushal Mittal, Mrs. Sweta Mittal and Mr. Gaurav Dalmia

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21. The proportionate share of assets & liabilities, income & expenditure of the Joint Venture Companies included in theconsolidated financial statements are given below :

(Rs. In Lacs)

Current Year Previous YearI ASSETS

Fixed Assets (Net) 97.30 29.14Investments 159.78 -Deferred Tax Asset (Net) 2.21 -Current Assets, Loans & Advances(a) Inventories 19792.12 11834.07(b) Cash and Bank Balances 620.89 400.69(c) Loans & advances 1798.10 3357.32(d) Debtors 464.92 -Miscellaneous Expenditure to the extent not written off 0.49 0.42

II LIABILITIESReserves & surplus 60.72 (37.32)Secured Loans 9109.47 2248.99Unsecured Loans 2362.61 1819.44Current Liabilities and provisions(a) Current Liabilities 10920.13 11537.60(b) Provisions 281.88 0.78

III INCOMESales 7957.34 -Other Income 14.39 40.43

IV EXPENDITURECost of construction 7160.17 -Operating & Other expenses 42.15 8.92Interest & Finance Charges 34.78 81.69Depreciation 13.27 2.46Taxes 280.50 0.84

V Contingent liabilities 83.86 79.00

22. Previous year figures have been regrouped/rearranged wherever considered necessary, to make them comparablewith Current Year’s figures. Since current year figures include figures of ATPL merged with effect from 1 April 2006,these are not strictly comparable with those of the previous year.

For and on behalf of the Board

SUSHIL ANSAL ANIL KUMARChairman Whole Time Director & CEO

AMITAV GANGULY ANUP KAPOORSr. V.P. (Corporate Affairs) Chief Financial Officer

Place : New Delhi & Company SecretaryDated : 25th June, 2007

108

PARTICULARS OF SUBSIDIARY COMPANIES OF ANSAL PROPERTIES & INFRASTRUCTURE LTD.(Disclosure of information under terms & conditions of approval under Section 212(8) of the Companies Act, 1956 vide Letter No. 47/295/2007-CL-III dt. 04.07.2007 of Government of India, Ministry of Company Affairs, Shastri Bhawan, 5th Floor, “A” Wing, Dr. R. P. Road New,Delhi-110001).SUBSIDIARY COMPANIES

A) STAR ESTATES MANAGEMENT LTD. A wholly owned subsidiary Company of Ansal Properties & Infrastructure Ltd.

31.03.07 31.03.06SL.NO. PARTICULARS AMOUNT AMOUNT

1 Capital 55.00 55.002 Reserves (342.87) 43.233 Tota l Assets 289.09 853.744 Total Liabilities 289.09 853.745 Investments (excluding investments - -

in subsidiary companies)

6 Turnover 3,550.32 2573.167 Profit before taxation 372.56 184.438 Provision for taxation 142.23 79.979 Profit after tax 230.33 104.4610 Exceptional Items (616.43) -

11 Profit/(Loss) for the Year (386.10) 104.4612 Proposed Dividend Nil Nil

B) DELHI TOWERS LTD. (CONSOLIDATED WITH ANSAL CONDOMINIUM LTD.) A wholly owned subsidiary Company of Ansal Properties & Infrastructure Ltd.

Rs. in lacs31.03.07 31.03.06

SL.NO. PARTICULARS AMOUNT AMOUNT1 Capital 5.00 5.002 Reserves 485.95 538.083 Total Assets 6,526.36 569.464 Total Liabilities 6,526.36 569.465 Investments(excluding investments in 1025.31 19.27

subsidiary companies)

6 Turnover 88.21 38.847 Profit before taxation 15.86 0.508 Provision for taxation (36.26) 8.509 Profit after tax (52.12) (8.00)10 Proposed Dividend Nil Nil

Note: Previous year figures are stand alone of Delhi Towers Limited as Ansal Condominium Ltd is incorporated on6.11.2006

Rs. in lacs

109

c) ANSAL IT CITY & PARKS LTD. A subsidiary Company of Ansal Properties & Infrastructure Ltd.

Rs. in lacs31.03.07 31.03.06

SL.NO. PARTICULARS AMOUNT AMOUNT

1 Capital 231.00 231.00

2 Reserves 1,071.10 1,092.00

3 Total Assets 1,537.65 3,607.33

4 Total Liabilities 1,537.65 3,607.33

5 Investments(excluding investments in - -

subsidiary companies)

6 Turnover 0.50 0.92

7 Profit before taxation (0.27) (20.08)

8 Provision for taxation (0.47) -

9 Profit after tax (0.74) (20.08)

10 Proposed Dividend Nil Nil

D) ANSAL SEZ PROJECTS LTD. A wholly owned subsidiary Company of Ansal Properties & Infrastructure Ltd.

Rs. in lacs31.03.07 31.03.06

SL.NO. PARTICULARS AMOUNT AMOUNT

1 Capital 5.00 Not Applicable

2 Reserves (0.50) ,,

3 Total Assets 5.00 ,,

4 Total Liabilities 5.00 ,,

5 Investments(excluding investments in - ,,subsidiary companies)

6 Turnover - ,,

7 Profit before taxation (0.50) ,,

8 Provision for taxation - ,,

9 Profit after tax (0.50) ,,

10 Proposed Dividend Nil ,,

Not Applicable : Ansal SEZ Projects Ltd was incorporated as Private Limited Company on 31.01.07

110

E) ANSAL TOWNSHIPS & INFRASTRUCTURE LTD. A wholly owned subsidiary Company of Ansal Properties & Infrastructure Ltd.

Rs. in lacs

31.03.07 31.03.06

SL.NO. PARTICULARS AMOUNT AMOUNT

1 Capital 5.00 Not Applicable

2 Reserves 23.41 ,,

3 Total Assets 5,028.41 ,,

4 Total Liabilities 5,028.41 ,,

5 Investments(excluding investments in 494.50 ,,subsidiary companies)

6 Turnover 31.79 ,,

7 Profit before taxation 25.71 ,,

8 Provision for taxation 2.30 ,,

9 Profit after tax 23.41 ,,

10 Proposed Dividend Nil ,,

Not Applicable : Ansal Township & infrastructure Ltd. was incorporated as a Private Limited Company on the24.01.2007.

Note : Previous year figures have been regrouped/rearranged, wherever considered necessary, to make themcomparable with current years figures.

For and on behalf of the Board

SUSHIL ANSAL ANIL KUMARChairman Whole Time Director & CEO

AMITAV GANGULY ANUP KAPOORSr. V.P. (Corporate Affairs) Chief Financial Officer

Place : New Delhi & Company SecretaryDated : 25th June, 2007

111

OFFICES

Ansal Properties & Infrastructure Ltd.Ansal Institute of Technology, Chiranjiv Charitable Trust, Star Estates Management Ltd.

HEAD OFFICE

115, Ansal Bhawan, 16, Kasturba Gandhi Marg, New Delhi - 110001 Tel.: 011-23353550, 66302269-77

REGIONAL OFFICES

Delhi & NCR: Faridabad, Gurgaon, DelhiHaryana: Karnal, Kurukshetra, Panipat, Sonepat

Punjab: Amritsar, Bhatinda, Jalandhar, Ludhiana, MohaliRajasthan: Ajmer, Bhilwara, Jaipur, Jodhpur

Uttar Pradesh: Agra, Lucknow, Meerut, Greater Noida, Ghaziabad

REPRESENTATIVE

DUBAI

Ankur SethCity Light Real Estate Broker, Hamrain Center, Gate No. 7, Third Floor, Deira, Dubai, UAE

Mob: 050-6399922, Off.: 2661010, Fax: 04-2660166

UK

Salil KumarC/o London Residentials, 231 Barking Road, London E6 1LB

Mob: +44 (0) 7725 500554, Off.: +44 (0) 20 8470 5454, Fax: +44 (0) 20 8470 0922

USA

Savita Leekha - Larry LevineCentury 21 Universal Real Estate, 7300 N Western Ave, Chicago IL 60645Savita Leekha (Mob): (847) 477-7106, E-mail: savita.leekha@yahoo.com

Larry Levine (Mob): (847) 894-1300, E-mail: lar.levine@yahoo.comFax: (773) 433-2111

WEBSITE

www.ansalapi.com