Auditor Report of Kamanwala Housing Construction Ltd.

Mar 31, 2014

We have audited the accompanying financial statements of KAMANWALA HOUSING CONSTRUCTION LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2014, the Statement of Profit and Loss and Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

The Company''s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards notified under the Companies Act, 1956 (the Act) read with the General circular 15/2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013 and in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issue by The Institute of Chartered Accountants of India. Those Standards required that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatements.

An audit involves performance procedures to obtain audit evidence about the amount and disclosures in the financial statements. The procedures selected depend on the auditors'' judgment, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparations and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required and read with note no. 34 recognising interest income of Rs. 2,10,64,000/-, note no. 35 considering interest income of Rs. 6,07,62,694/- for the period 14.06.2011 to 31.03.2014 and note no. 36 regarding non-availability of information of disclosure requirement under MSMED Act, 2006 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2014;

(b) In the case of Statement of Profit and Loss of the ''Profits'' of the Company for the year ended on that date; and

(c) In the case of Cash Flow Statement, of the cash flows for the year ended on that date.

Report on other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of Section 227(4A) of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by Section 227(3) of the Act, we report that:

a. We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

b. In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books of account.

c. The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

d. I n our opinion, the Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards notified under the Act read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013.

e. On the basis of the written representations received from the Directors as on March 31, 2014, taken on record by the Board of Directors, none of the Directors is disqualified as on March 31, 2014, from being appointed as a Director in terms of Section 274(1)(g) of the Act.

ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT

1) (a) The Company is maintaining proper records to show full particulars including quantitative details and situation of fixed assets.

(b) As per information and explanations given to us, physical verification of major items of fixed assets has been carried out in terms of the phased programme of verification of its fixed assets adopted by the Company and no material discrepancies were noticed on such verification. In our opinion the frequency of verification is reasonable having regard to the size of the Company and nature of its business.

(c) No Fixed Assets were disposed off during the year.

2) (a) The inventories have been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

(b) I n our opinion, the procedure followed by the management for such physical verification is reasonable and adequate in relation to the size of the Company and nature of its business.

(c) In our opinion and according to the information and explanation given to us, the Company is maintaining proper records of Inventories. No discrepancies were noticed on verification between physical Inventories and the books records.

3) (a) The Company has not granted secured or unsecured loans to any of the Companies covered in the register, maintained under Section 301 of the Companies Act, 1956, therefore Clause (3) (a),(b),(c) and (d) of Paragraph 4 of the Order are not applicable.

(b) The Company has taken unsecured loans from thirty parties covered in the register maintained under Section 301 of the Companies Act, 1956 during the year and maximum amount involved during the year was Rs. 54,00,69,329/- and the year end balance of loans taken from such parties was Rs. 48,21,58,726/-.

(f) Based on the information and explanation given to us, we are of the opinion that rate of interest and other terms and conditions of loans taken by the Company from such parties are prima-facie is not pre-judicial to the interest of the Company.

(g) The Company is regular in payment of principal amount and interest wherever stipulated.

4) In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business for purchases of inventories and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weakness in the Internal Control System.

5) (a) In our opinion and according to the information and explanation given to us, the transactions made in pursuance of contracts or arrangements that need to be entered in the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the companies Act, 1956 and exceeding the value of Rs. 5,00,000/- in respect of each party during the year have been made at prices which appear reasonable as per information available with the Company.

6) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of Section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the Rules framed thereunder. Hence Clause (vi) of the Order is not applicable.

7) In our opinion, the Company has internal audit system commensurate with the size and nature of its business.

8) As informed to us, the maintenance of cost records has not been prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956, in respect of the activities carried on by the Company.

9) (a) According to the information and explanations given to us and the records examined by us, the Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income tax, sales tax, wealth tax, custom duty, excise duty, cess and other statutory dues.

(b) According to information and explanation given to us there are no disputed dues in respect of sales tax, wealth tax, service tax, custom duty, excise duty and cess as at last day of the Financial Year.

10) The Company has no accumulated losses at the end of the financial year and it has not incurred any cash losses in the current and immediately preceding financial year.

11) According to the information and explanations given to us and the records examined by us, the Company has not defaulted in repayment of dues to financial institutions or banks or debenture holders.

12) In our opinion and according to the information and explanation given to us, no loans and advances have been granted by the Company on the basis of security by way of pledge of Shares, Debentures and other Securities.

13) In our opinion the Company is not a Chit fund or a Nidhi/Mutual Benefit Fund/Society. Therefore Clause 4(XIII) of the Companies (Auditor''s Report) Order 2003 is not applicable to the Company.

14) The Company has maintained proper records of transactions and contracts in respect of trading in securities, debentures and other investments and timely entries have been made therein. All shares, debentures and other investments have been held by the Company in its own name.

15) According to the information and explanations given to us, the Company has not given Corporate Guarantee to any Bank.

16) In our opinion and according to the information and explanations given to us and the records examined by us, the term loans have been applied for the purposes for which they were obtained.

17) On the basis of an overall examination of the Balance Sheet and Cash Flow of the Company and the information and explanations given to us, we report that the Company has not utilised any funds raised on short-term basis for long-term investments.

18) The Company has not made any preferential allotment of shares during the year.

19) The Company has not issued any debentures.

20) The Company has not raised any money by way of public issue during the year.

21) In our opinion and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year that causes the financial statements to be materially misstated.



Chartered Accountants Firm Registration No. : 106456W M. Mehta

Partner M. No.42990

Place : Mumbai Dated: 27th May, 2014.

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Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying fnancial statements of KAMANWALA HOUSING CONSTRUCTION LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2013, the Statement of Proft and Loss and Cash Flow Statement for the year then ended and a summary of signifcant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these fnancial statements that give a true and fair view of the fnancial position, fnancial performance and cash fows of the Company in accordance with the accounting principles generally accepted in India including Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation of the fnancial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these fnancial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by The Institute of Chartered Accountants of India. Those Standards required that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the fnancial statements are free from material misstatements.

An audit involves performance procedures to obtain audit evidence about the amount and disclosures in the fnancial statements. The procedures selected depend on the auditor''s judgment, including the assessment of risks of material misstatement of the fnancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparations and fair presentation of the fnancial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the fnancial statements.

We believe that the audit evidence we have obtained is suffcient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid fnancial statements give the information required and read with note no. 33 regarding disclosure requirement under MSMED Act, 2006 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013;

(b) In the case of Statement of Proft and Loss of the ''Profts'' of the Company for the year ended on that date; and

(c) In the case of Cash Flow Statement, of the cash fows for the year ended on that date.

Report on other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the order") issued by the Central Government of India in terms of Section 227(4A) of the Act, we give in the Annexure a statement on the matters specifed in paragraphs 4 and 5 of the Order.

2. As required by Section 227(3) of the Act, we report that:

a. We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b. In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books of account.

c. The Balance Sheet, the Statement of Proft and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

d. In our opinion, the Balance Sheet, the Statement of Proft and Loss, and the Cash Flow Statement comply with the Accounting Standards referred to in Section 211(3C) of the Act except AS-15 wherein liability towards gratuity payment has been provided is without actuarially valued.

e. On the basis of the written representations received from the Directors as on March 31, 2013, taken on record by the Board of Directors, none of the Directors is disqualifed as on March 31, 2013, from being appointed as a Director in terms of Section 274(1)(g) of the Act.

ANNEXURE TO THE AUDITOR''S REPORT

1) (a) The Company is maintaining proper records to show full particulars including quantitative details and situation of fxed assets.

(b) As per information and explanations given to us, physical verifcation of major items of fxed assets has been carried out in terms of the phased programme of verifcation of its fxed assets adopted by the Company and no material discrepancies were noticed on such verifcation. In our opinion the frequency of verifcation is reasonable having regard to the size of the Company and nature of its business.

(c) Fixed Assets disposed off during the year were not substantial. According to the information and explanation given to us, we are of the opinion that the disposal of fxed assets has not affected the going concern status of the Company.

2) (a) The inventories have been physically verifed during the year by the management. In our opinion, the frequency of verifcation is reasonable.

(b) In our opinion, the procedure followed by the management for such physical verifcation is reasonable and adequate in relation to the size of the Company and nature of its business.

(c) In our opinion and according to the information and explanation given to us, the Company is maintaining proper records of Inventory. No discrepancies were noticed on verifcation between physical Inventory and the books records.

3) (a) The Company has not granted secured or unsecured loans to any of the Companies covered in the register, maintained under Section 301 of the Companies Act, 1956, therefore Clause (3)(a)(b)(c)(d) of paragraph 4 of the Order are not applicable.

(b) The Company has taken unsecured loans from thirty parties covered in the register maintained u/s. 301 of the Companies Act, 1956 during the year and maximum amount involved during the year was Rs. 35,45,58,748/- and the year end balance of loan taken from such parties was Rs. 29,11,84,911/-.

(f) Based on the information and explanation given to us, we are of the opinion that rate of interest and other terms and conditions of loans taken by the Company from such parties are prima-facie not pre-judicial to the interest of the Company.

(g) The Company is regular in payment of principal amount and interest wherever stipulated.

4) In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business for purchases of inventory and fxed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weakness in the lnternal Control System.

5) (a) In our opinion and according to the information and explanation given to us, the transactions made in pursuance of contracts or arrangements that need to be entered in the Register maintained under Section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the Register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of Rs. 5,00,000/- in respect of each party during the year have been made at prices which appear reasonable as per information available with the Company.

6) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of Section 58A and 58AA or any other relevant provisions of the Companies Act 1956 and the Rules framed there under. Hence Clause (vi) of the Order is not applicable.

7) In our opinion, the Company has internal audit system commensurate with the size and nature of its business.

8) As informed to us, the maintenance of cost records has not been prescribed by the Central Government u/s. 209(1)(d) of the Companies Act, 1956, in respect of the activities carried on by the Company.

9) (a) According to the information and explanations given to us and the records examined by us, the Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income tax, sales tax, wealth tax, custom duty, excise duty, cess and other statutory dues except in the following cases.

Sr. No. Statutory Dues Period/Due Amount Due Date Rs.

1. VAT AY 2012-13 7,22,889

2. Service Tax AY 2013-14 7,68,469

3. Income Tax AY 2007-08 1,69,763

AY 2008-09 2,32,727

According to the information and explanations given to us, no undisputed arrears of statutory dues except, above tabulated undisputed dues outstanding for more than six month as at 31st March, 2013 from the date they became payable.

(b) According to information and explanation given to us, there are no disputed dues in respect of sales tax, wealth tax, service tax, custom duty, excise duty and cess as at last day of the fnancial year.

10) The Company has no accumulated losses at the end of the fnancial year and it has not incurred any cash losses in the current and immediately preceding fnancial year.

11) According to the information and explanations given to us and the records examined by us, the Company has not defaulted in repayment of dues to fnancial institutions or banks or debenture holders.

12) In our opinion and according to the information and explanation given to us, no loans and advances have been granted by the Company on the basis of security by way of pledge of Shares, Debentures and other securities.

13) In our opinion the Company is not a Chit Fund or a Nidhi/Mutual Beneft Fund/Society. Therefore Clause 4(xiii) of the Companies (Auditor''s Report) Order 2003 is not applicable to the Company.

14) The Company has maintained proper records of transactions and contracts in respect of trading in securities, debentures and other investments and timely entries have been made therein. All shares, debentures and other investments have been held by the Company in its own name.

15) According to the information and explanations given to us, the Company has given Corporate Guarantee of Rs. 17,00,00,000/- to Bank for the Loan taken by a Firm in which the Company is Partner, the terms and condition whereof are not prima-facie prejudicial to the interest of Company.

16) In our opinion and according to the information and explanations given to us and the records examined by us, the term loans have been applied for the purposes for which they were obtained.

17) On the basis of an overall examination of the Balance Sheet and Cash Flow Statement of the Company and the information and explanations given to us, we report that the Company has not utilised any funds raised on short-term basis for long-term investments.

18) The Company has not made any preferential allotment of shares during the year.

19) The Company has not issued any debentures.

20) The Company has not raised any money by way of public issue during the year.

21) In our opinion and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year that causes the fnancial statements to be materially misstated.

M. Mehta

Partner M. No. 42990

For and on Behalf of MITTAL & ASSOCIATES Chartered Accountants

Firm Registration No. : 106456W

Place : Mumbai

Dated : 30th May, 2013.

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Mar 31, 2011

We have audited the attached Balance Sheet of KAMANWALA HOUSING CONSTRUCTION LIMITED as at 31st March, 2011 and also the Profit and Loss Account for the year ended on that date annexed thereto and the Cash Flow Statement for the year ended on that date. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with Auditing Standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies (Auditor’s Report) Order, 2003 issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, as amended by Companies (Auditor’s Report) (Amendment) Order, 2004 and on the basis of such checks of the books and records of the Company, as we considered appropriate, we enclose in the Annexure a statement on the matters specified in the said Order to the extent applicable.

Further to our comments in the Annexure referred to above, we report that:

i) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit.

ii) In our opinion, proper books of account as required by Law have been kept by the Company so far as appears from our examination of those books.

iii) The Balance Sheet and the Profit and Loss Account dealt with by this Report are in agreement with the books of account.

iv) In our opinion, the Profit and Loss Account and the Balance Sheet comply with the Accounting Standards referred in Sub-section 3(c) of Section 211 of the Companies Act, 1956 except compliance with Accounting Standard – 15, Employees Retirement Benefits for the provision of gratuity.

v) On the basis of written representations received from the Directors, as on 31st March, 2011 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2011 from being appointed as a Director in terms of clause (g) of Sub-section (1) of Section 274 of the Companies Act, 1956.

vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts subject to notes appearing in Schedule ’19’ read together with significant Accounting Policies and other notes appearing elsewhere, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2011;

b) in the case of the Profit and Loss Account, of the ‘Profit’ for the year ended on that date; and

c) in the case of Cash Flow Statement, of the cash flows for the year ended on that date.

ANNEXURE TO THE AUDITORS' REPORT

Annexure referred to in paragraph 3 of the Auditors’ Report to the Members of KAMANWALA HOUSING CONSTRUCTION LIMITED, on the accounts for the year ended 31st March, 2011.

1) (a) The Company is maintaining proper records to show full particulars including quantitative details and situation of fixed assets.

(b) As per information and explanations given to us, physical verification of fixed assets has been carried out in terms of the phased programme of verification of its fixed assets adopted by the Company and no material discrepancies were noticed on such verification. In our opinion, the frequency of verification is reasonable having regard to the size of the Company and nature of its business.

(c) During the year the Company has not disposed off substantial fixed assets.

2) (a) The management has conducted physical

verification of inventory at reasonable intervals.

(b) In our opinion, the procedure followed by the management for such physical verification is reasonable and adequate in relation to the size of the Company and nature of its business.

(c) The Company is maintaining proper records of Inventory. No discrepancies were noticed on verification between physical Inventory and the books of account.

3) (a) The Company has not granted secured or

unsecured loans to any of the Companies covered in the register maintained under Section 301 of the Companies Act, 1956 and therefore Clause (3)(a)(b)(c)(d) of paragraph 4 of the Order are not applicable.

(e) The Company has taken loans from forteen parties covered in the register maintained u/s. 301 of the Companies Act, 1956 and maximum amount involved during the year was Rs. 1382.33 Lacs and the year end balance of loan taken from such parties was Rs. 1111.78 Lacs.

(f) The rate of interest and other terms and conditions of loans taken by the Company from such parties are prima facie is not pre- judicial to the interest of the Company.

(g) The Company is regular in payment of principal amount and interest wherever stipulated.

4) In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business for purchases of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weakness in the Internal Control System.

5) (a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that Section.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of Rs. 5.00 Lakhs in respect of any party during the period, have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

6) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of Section 58A and 58AA or any other relevant provisions of the Companies Act 1956 and the Rules framed there under. Hence Clause (vi) of the Order is not applicable.

7) In our opinion, the Company has internal audit system commensurate with the size and nature of its business.

8) As informed to us, the maintenance of cost records has not been prescribed by the Central Government u/s. 209(1)(d) of the Companies Act, 1956, in respect of the activities carried on by the Company.

9) (a) According to the information and explanations given to us and the records examined by us, the Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and other statutory dues wherever applicable. According to the information and explanations given to us, no undisputed arrears of statutory dues were outstanding as at 31st March, 2011 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no disputed dues in respect of sales tax, wealth tax, income tax, service tax, custom duty, excise duty and cess as at last day of the Financial Year.

10) The Company has no accumulated losses at the end of the financial year and it has not incurred any cash losses in the current and immediately preceding financial year.

11) According to the information and explanations given to us and the records examined by us, the Company has not defaulted in repayment of dues to financial institutions or banks or debenture- holders except in case of Indian Overseas Bank wherein the payment was due on March 31st, 2011, but was actually paid in April, 2011.

12) In our opinion and according to the information and explanations given to us, no loans and advances have been granted by the Company on the basis of security by way of pledge of Shares, Debentures and other securities.

13) In our opinion the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, Clause 4(xiii) of the Companies (Auditor’s Report) Order, 2003 is not applicable to the Company.

14) The Company has maintained proper records of transactions and contracts in respect of trading in securities, debentures and other investments and timely entries have been made therein. All shares, debentures and other investments have been held by the Company in its own name.

15) According to the information and explanations given to us and the records examined by us, the Company has not given any guarantees for loans taken by others from banks or financial institutions, the terms and conditions whereof are prima-facie prejudicial to the interest of the Company.

16) In our opinion, the term loans have been applied for the purposes for which they were obtained.

17) On the basis of an overall examination of the Balance Sheet and Cash Flows of the Company and the information and explanations given to us, we report that the Company has not utilised any funds raised on short-term basis for long-term investments.

18) The Company has not made any preferential allotment of shares during the year.

19) The Company has not issued any debentures.

20) The Company has not raised any money by way of public issue during the year.

21) In our opinion and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year that causes the financial statements to be materially misstated.

For MITTAL & ASSOCIATES Chartered Accountants FRNo. : 106456W

M. Mehta Partner M. No 42990 Place: Mumbai Dated: 11th August, 2011.

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Mar 31, 2010

We have audited the attached Balance Sheet of KAMANWALA HOUSING CONSTRUCTION LIMITED as at 31st March, 2010, the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexed thereto.These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

1. As required by the Companies (Auditors Report) Order, 2003, and as amended by the Companies (Auditor’s Report) (Amendment) Order, 2004 (the Order) issued by the Central Government of India under sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order.

2. Further to our comments in the Annexure referred to above, we report that :

(a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

(b) In our opinion, proper books of account as required by Law have been kept by the Company so far as appears from our examination of those books;

(c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this Report are in agreement with the books of account; and

(d) In our opinion, the Profit & Loss Account, the Balance Sheet and Cash Flow Statement dealt with by this Report comply with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956.

3. Directors Disqualification:

On the basis of the written representations received from Directors of the Company as at 31st March, 2010 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as at 31st March,2010 from being appointed as a Director in terms of Section 274 (1) (g) of the Companies Act, 1956.

4. Subject to the above, in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010;

(ii) in the case of the Profit and Loss Account, of the profit of the Company for the year ended on that date; and

(iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT (Referred to in paragraph 1 of our Report of even date)

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets on the basis of available information.

(b) As explained to us, the fixed assets have been physically verified by the management during the year in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such physical verification.

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

(ii) (a) As explained to us, the inventories have been physically verified by the management at regular intervals during the year.

(b) In our opinion and according to the information and explanations given to us, the procedure of physical verification of Inventories followed by the management is reasonable and adequate in relation to the size of the Company and the nature of its business.

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

(iii) (a) As informed to us, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Act.

(b) In our opinion and according to the explanations given to us, the rate of interest, wherever applicable and other terms and conditions are not prima facie prejudicial to the interest of the Company.

(c) In respect of the loans granted, other than as mentioned in Clause iii (a), the payment of principal amount and interest are regular. In respect of the loan taken, the payment of principal amount and interest are regular.

(d) There is no overdue amount in respect of loans taken by the Company. In respect of loans given by the Company, these are repayable on demand and therefore, takes reasonable steps where over dues are more than rupees one lac.

(iv) In our opinion and according to the explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and for the sale of flats. During the course of our audit, we have not observed any major weakness in internal controls.

(v) In respect of transactions entered in the register maintained in pursuance of Section 301 of the Companies Act, 1956:

(a) Based on audit procedures applied by us, to the best of our knowledge and belief and according to the information and explanations given to us, we are of the opinion that the transactions that needed to be entered into the register maintained under Section 301 have been so entered.

(b) According to the information and explanations given to us and excluding certain transactions of purchase of goods and material of special nature for which alternate quotations are not available, where each of such transactions is in excess of Rs.5.00 Lacs in respect of any part, in our opinion, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

(vi) In our opinion and according to the explanations given to us, the Company has not accepted any deposit from the public within the meaning of Section 58A and 58AA of the Companies Act, 1956 and the rules framed thereunder.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and the nature of its business.

viii) As information given to us, the maintenance of cost records has not been prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956, in respect of the activities carried on by the Company.

(ix) (a) According to the records of the Company and information and explanations given to us, the Company has been regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, E.S.I., Income-tax, Sales-tax, Wealth-tax, Custom Duty, Excise Duty, Cess and other statutory dues with the appropriate authorities during the year.

(b) According to the records of the Company and information and explanations given to us, there are no dues to Sales-tax, Customs Duty, Wealth- tax, Excise Duty or Cess outstanding.

(x) The Company has not accumulated losses and has not incurred any cash losses during the financial year covered by our audit or in the immediately preceding financial year.

(xi) Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions or banks.

(xii) In our opinion and according to the information and explanations given to us, no loan has been granted by the Company on the basis by way of pledge of shares, debentures or other securities.

(xiii) In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, Clause 4(xiii) of the Companies (Auditors Report) Order, 2003 is not applicable to the Company.

(xiv) According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the provisions of Clause 4(xiv) of the Companies (Auditor’s Report) Order, 2003 are not applicable to the Company.

(xv) The Company has not given any guarantees for loans taken by others from banks or financial institutions, the terms and conditions, whereof, in our opinion, are prima facie, prejudicial to the interest of the Company.

(xvi) According to the information and explanations given to us, the term loans have been applied for the purpose for which they were raised.

(xvii) According to the information and explanations given to us, the funds raised on short-term basis have not been used for long term investment and vice versa.

(xviii) During the year, the Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act,1956.

(xix) The Company has not created any securities in respect of debentures as no debentures have ever been issued by the Company.

(xx) The Company has not raised money by any public issues during the year and, hence, the question of disclosure and verification of end use of such money does not arise.

(xxi) In our opinion and according to the explanations given to us, no fraud on or by the Company has been noticed or reported during the year, that causes the financial statement to be materially misstated.

For VIMAL PUNMIYA & CO., Chartered Accountants,

Place: Mumbai Dated: 31st July, 2010. VIMAL C. PUNMIYA Proprietor. M. No. 16574