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Directors Report of Kamanwala Housing Construction Ltd.

Mar 31, 2014

Dear Members,

The Directors present their Thirtieth Annual Report on the business and operations of the Company along with the audited Financial Statements of Account for the year ended 31st March, 2014.

FINANCIAL HIGHLIGHTS:

The Summarized Financial Highlights of the Company are as follows:

For the For the

Year ended year ended 31-03-2014 31-03-2013 (Rs. In Lacs) (Rs. In Lacs)

Sales and Other Income 2684.39 8689.35

Gross Profit 207.12 291.19

Less: Depreciation 21.91 20.67

Miscellaneous Expenditure written off — —

Profit before Taxation 185.21 270.52

Provision for Taxation 32.00 85.00

Provision for Taxation for 0.81 — earlier years

Provision for Deferred Tax 3.23 —

Provision for Deferred Tax written back — (79.31)

Net Profit / (Loss) for the year 149.17 264.83

Balance brought forward from previous year 4540.71 4275.88

Profits available for Appropriations 4689.88 4540.71

Appropriations:

Balance carried to Balance Sheet 4689.88 4540.71

DIVIDEND:

With a view to conserve and plough back the resources of the Company, the Board of Directors has decided not to recommend any dividend for the Financial year 2013-14.

REVIEW OF OPERATIONS:

During the year under review, the Company reported the turnover of Rs. 2,684.39 Lacs as compared to Rs. 8,689.35 Lacs for the previous year. The Company earned profit after tax of Rs. 149.17 Lacs for the year as compared to Rs. 264.83 Lacs in the previous year.

The poor performance of the Company during the year under review, is largely attributable to adverse market conditions prevailing in the real estate market and delay in execution of ongoing projects on account of procedural difficulties in obtaining necessary approvals in time from the concerned local authorities. High input cost, heavy interest cost and cost overrun has eroded profit margin to a great extent which brought about strains on the Company''s cash flows. Besides these headwinds, deteriorated economic conditions in the country further contributed to the unsatisfactory performance of the Company.

In such difficult circumstances, your Directors have decided to clear the existing projects on hand and then lay down the plans for acquiring new projects.

With reasonably strong Balance Sheet fundamentals and debts well within reasonable limit, your Directors hope that the Company''s performance will improve in due course of time.

REPORT ON CORPORATE GOVERNANCE:

The Report on Corporate Governance is attached herewith as Annexure - I, which forms part of this Report. The Certificate from Practicing Company Secretary, Mr. Upendra C. Shukla, on compliance with Corporate Governance requirements by the Company is attached to the Report on Corporate Governance.

MANAGEMENT DISCUSSION & ANALYSIS REPORT:

Management Discussion & Analysis Report is attached herewith as Annexure - II and it forms part of this Report.

DIRECTORS:

Your Directors regret to report the sad demise of Mr. Jaipal Jain on 15th September, 2013. Mr. Jaipal Jain was one of the founders of the Company. With his acute business sense and able guidance, the Company had made a remarkable progress.

During the year Mr. B.R. Maheshwari resigned from the Board of Directors and accordingly, he ceased to be the Director and Chairman of your Company with effect from 1st October, 2013. Mr. Maheshwari was associated with your Company for 29 years. The Board places on record its appreciation of the valuable guidance and services rendered by him during his tenure as the Director/ Chairman of the Company.

Pursuant to the coming into force of Section 149 of the Companies Act, 2013 from 1st April, 2014, the Company has re-assessed the status of its Directors with a view to determining their qualifying for classification as Independent Directors in term of Section 149 (6) of the Companies Act, 2013. Accordingly, Mr. Bhanwarlal D. Jogani, Mr. Ramesh J. Patel, Mr. Satish Chandra Gupta and Mr. Narendra Kumar Gupta fulfill the criteria laid down in Section 149 (6) of the Companies Act, 2013.

Section 149(10) of the Companies Act, 2013 restrict the tenure of Independent director to two terms of upto ten years, with a single term not exceeding five years, which shall be effective from 1st April, 2014. The revised Clause 49 of the Listing Agreement issued by Securities and Exchange Board of India (SEBI) also contains the same provisions. Mr. Bhanwarlal D. Jogani retires by rotation at the forthcoming Annual General Meeting and being eligible, he offers himself for re-appointment as Independent Director of the Company to hold the office for a period upto 31st March, 2019.

Pursuant to the provisions of Section 161 of the Companies Act, 2013, read with the relevant provisions in the Articles of Association, the Board of Directors in its Meeting held on 12th November, 2013 had appointed Mr. Satish Chandra Gupta, Mr. Narendra Kumar Gupta and Mr. Vaibhav Jain as Additional Directors. They would hold the office as a Directors upto the date of the ensuing Annual General Meeting. Your Company has received notices in writing from some of its Members signifying intentions of proposing their candidature for the office of Directors. Mr. Satish Chandra Gupta and Mr. Narendra Kumar Gupta qualify for Independent Directorship in pursuance to the provisions of Section 149 (6) of the Companies Act, 2013.

As per Item No. "9" of the Notice for convening 30th Annual General Meeting, Mr. Amit Jain is being proposed to be re-appointed as a Whole-time Director of the Company w.e.f. 1st August, 2014.

Additional information and brief profiles as required under Clause 49 of the Listing Agreement with the BSE Ltd. for each of the above Directors, seeking re-appointment/ appointment, is annexed to the Notice of the Annual General Meeting.

DIRECTORS'' RESPONSIBILITY STATEMENT:

Pursuant to Section 134 of the Companies Act 2013, your Directors, based on the representations received from operating management and after due enquiry, confirm that:

(i) in the preparation of the annual accounts, the applicable Accounting Standards have been followed;

(ii) they have, in the selection of the accounting policies, consulted the Statutory Auditors and those have been applied consistently. Reasonable and prudent judgments and estimates have been made so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2014 and of the profit of the Company for the year ended on that date;

(iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for detecting and preventing the fraud and other irregularities;

(iv) the annual accounts have been prepared on a going concern basis;

(v) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

(vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

DEPOSITS:

Your Company has not accepted any Deposits from the public or its employees during the year under review. There was no outstanding Deposit repayable as on 31st March, 2014.

PARTICULARS OF EMPLOYEES:

The Company did not have any employee who was in receipt of remuneration exceeding Rs. 60,00,000/- per annum and if employed for a part of the year exceeding remuneration at the rate which in aggregate was Rs. 5,00,000/- per month.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

In view of the nature of activities which are being carried on by the Company, Provisions of Section 217(1)(e) of the Companies Act, 1956 read with to the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, regarding conservation of energy and technology absorption, are not applicable to the Company.

There was no foreign exchange earnings and expenses during the year under review.

AUDITORS'' REMARKS:

As regards Auditors'' remarks, in the Paragraph expressing their opinion, your Directors wish to state that the Notes Nos. 34, 35 and 36 forming part of the Annual Statements of Account are self-explanatory.

Statutory Auditors:

The Auditors, M/s. Mittal & Associates, Chartered Accountants, shall retire at the forthcoming Annual General Meeting. They have conveyed their decision of not seeking further appointment.

The Ministry of Corporate Affairs has notified the provisions of Section 139 of the Companies Act, 2013 for appointment of Auditors, which is effective form 1st April, 2014. Pursuant to Section 139(2) of the Companies Act, 2013 and the rules made thereunder, no listed company shall appoint or re-appoint an audit firm as auditor for more than two terms of five consecutive years. Further, the aforesaid appointment is subject to ratification by the Members of the Company in every Annual General Meeting. Further, the proviso under Section 139(2) provides that every company existing on or before the commencement of the Companies Act, 2013, has to comply with the requirement of this section within three years from the date of commencement of this Act.

As M/s. Mittal & Associates has conveyed their decision of not seeking further appointment, pursuant to Section 139(2) of the Companies Act, 2013, the Audit Committee has recommends the appointment of M/s. Majithia & Associates for a period of five years from the conclusion of the 30th Annual General Meeting subject to approval of the Members in the Annual General Meeting of the Company. M/s. Majithia & Associates have confirmed that their appointment if made, will comply with the eligibility criteria in terms of Section 141(3) of the Companies Act, 2013.

ACKNOWLEDGEMENTS:

your Directors would like to express their apprecia- tion for the co-operation and assistance received from Banks, Government authorities, customers, suppliers and shareholders during the year under review. your Directors also wish to place on record their deep sense of appreciation for the committed services rendered by all the employees of the Company.

For and on behalf of the Board SATISH CHANDRA GUPTA Chairman

Place : Mumbai Dated : 12th August, 2014.


Mar 31, 2013

Dear Shareholders,

The Directors have pleasure in presenting their Twenty Ninth Annual Report on the business and operations of the Company along with the audited Financial Statements of Account for the year ended 31st March, 2013.

FINANCIAL HIGHLIGHTS:

The Summarized Financial Highlights of the Company are as follows:

For the For the year ended Year ended 31-03-2013 31-03-2012 (Rs. In Lacs) (Rs. In Lacs)

Sales and Other Income 8,689.35 7,797.51

Gross Proft 291.19 587.29

Less: Depreciation 20.67 19.41

Miscellaneous Expenditure written off 1.40

Proft before Taxation 270.52 566.48

Provision for Taxation 85.00 172.48

Provision for Taxation for earlier years 2.52

Provision for Deferred Tax 1.68

Provision for Deferred Tax written back (79.31)

Net Proft / (Loss) for the year 264.83 389.80

Balance brought forward from previous year 4,275.88 3,886.08

Profts available for Appropriations 4,540.71 4,275.88

Appropriations:

Balance carried to Balance Sheet 4,540.71 4,275.88

DIVIDEND:

With a view to conserve and plough back the resources of the Company, the Board of Directors has decided not to recommend any dividend for the Financial Year 2012-13.

REVIEW OF OPERATIONS:

During the year under review, the Company recorded the turnover of Rs. 8,689.35 Lacs as compared to Rs. 7.797.51 Lacs for the previous year. The Company earned proft after tax of Rs. 264.83 Lacs for the year as compared to Rs. 389.80 Lacs in the previous year.

Amid the deteriorating macroeconomic fundamentals and sagging business confdence, your Company has performed better as compared to last year''s performance. But due to increased input costs, strains on cash fows and pressure on margins continued and adversely affecting the fnancial performance of the Company. During the year under review, in spite of slowing Indian Economy, deteriorating macroeconomic conditions worldwide and adverse market conditions, your Company has performed reasonably well in terms of sales turnover. But, proft margin has come under tremendous pressure due to rising input costs and cost overrun happening from delay in execution of projects which have occurred on account of inordinate delay on the part of local authorities in issuing necessary approvals. Construction work at the Company''s Residential Project at Malad (West), Mumbai is on the verge of completion. Construction work at Residential Joint Venture Project is going on in full swing and is scheduled to be completed in time.

Necessary approvals are being sought from the concerned authorities for other projects on hand. Amid the prevailing uncertain, unfavourable economic, fnancial, political and business conditions, your Directors are negotiating to acquire new projects. The Company has debt levels well within reasonable limits, your Directors hope that the Company will register performance in the future with healthy cash fows.

REPORT ON CORPORATE GOVERNANCE:

The Report on Corporate Governance is attached herewith as Annexure – I, which forms part of this Report. The Certifcate from Practicing Company Secretary, Mr. Upendra C. Shukla, on compliance with Corporate Governance requirements by the Company is attached to the Report on Corporate Governance.

MANAGEMENT DISCUSSION & ANALySIS REPORT:

Management Discussion & Analysis Report is attached herewith as Annexure – II and it forms part of this Report.

DIRECTORS:

Pursuant to the provisions of the Companies Act, 1956 and relevant Article of the Articles of Association of the Company, Mr. Jaipal Jain, Mr. Tarun Jain, Mr. Ramesh J. Patel and Mrs. Shobha Jain retire by rotation at the forthcoming 29th Annual General Meeting and being eligible they offer themselves for re-appointment. As per Item No. 7 of the Notice for convening the 29th Annual General Meeting, Mrs. Pushpa Jain is being proposed to be re-appointed as a Whole-time Director of the Company w.e.f. 1st February, 2013.

The Members are requested to approve their re- appointments.

DIRECTORS'' RESPONSIBILITy STATEMENT:

Pursuant to Section 217(2AA) of the Companies Act 1956, your Directors, based on the representations received from operating management and after due enquiry, confrm that:

(i) in the preparation of the annual accounts, the applicable Accounting Standards have been followed;

(ii) they have, in the selection of the accounting policies, consulted the Statutory Auditors and those have been applied consistently. Reasonable and prudent judgments and estimates have been made so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2013 and of the proft of the Company for the year ended on that date;

(iii) proper and suffcient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for detecting and preventing the fraud and other irregularities; and

(iv) the annual accounts have been prepared on a going concern basis.

DEPOSITS:

Your Company has not accepted any Deposits from the public or its employees during the year under review. There was no outstanding Deposit repayable as on 31st March, 2013.

PARTICULARS OF EMPLOyEES:

The Company did not have any employee who was in receipt of remuneration exceeding Rs. 60,00,000/- per annum and if employed for a part of the year exceeding remuneration at the rate which in aggregate was Rs. 5,00,000/- per month.

CONSERVATION OF ENERGy, TECHNOLOGy ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

In view of the nature of activities which are being carried on by the Company, Provisions of Section 217(1)(e) of the Companies Act, 1956 relating to the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, regarding conservation of energy and technology absorption, are not applicable to the Company.

There was no foreign exchange earnings and expenses during the year under review.

AUDITORS'' REMARKS:

As regards Auditors'' remarks, your Directors wish to state as under:

(i) Regarding Accounting Standard 15 (Employees Benefts):

The Company has provided and paid gratuity actuarially determined by the Life Insurance Corporation of India.

(ii) Regarding non-payment of MVAT of Rs. 7,22,889/- for F.Y. 2011-12 and Service Tax of Rs. 7,68,469/- for F.Y. 2012-13:

These statutory dues were not paid on due dates as the same could not be received from some customers and under the advice of tax consultants, the same were provided in the books of account at the end of the year. The said statutory dues have been paid in the current year and regarding Income Tax demand of Rs. 1,69,763/- for A.Y. 2007-08 and Rs. 2,32,727/- for A.Y. 2008-09, these demand raised by the Assessing Offcer, were subject to rectifcation. The rectifcation Orders have been received in the current year and accordingly, the Income Tax demand stand fully adjusted / paid in the current year.

AUDITORS:

M/s. Mittal & Associates, Chartered Accountants, the Auditors of your Company, retire at the forthcoming 29th Annual General Meeting. They are eligible for re-appointment. The Members are requested to appoint the Auditors of the Company for the current year and fx their remuneration.

ACKNOWLEDGEMENTS:

Your Directors would like to express their apprecia- tion for the co-operation and assistance received from Banks, Government authorities, customers, suppliers and shareholders during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services rendered by all the employees of the Company.

For and on behalf of the Board

B. R. Maheshwari

Chairman

Place : Mumbai

Dated : 12th August, 2013.

 
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