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.