We have audited the attached Balance Sheet of, KAMANWALA HOUSING
CONSTRUCTION LIMITED as at 31st March, 2012 and also the Statement
of Profit and Loss for the year ended on that date annexed thereto
and 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
As required by the Companies (AuditorRss Report) Order, 2003 issued by
the Central Government in terms of section 227(4A) of the Companies
Act, 1956, as amended by Companies (AuditorRss Report) (Amendment)
Order, 2004, and on the basis of such checks of the books and records
of the company, as we considered appropriate, we enclosed in the
annexure a statement on the matters specified in the said order to the
Further to our comments in the Annexure referred to above, we report
(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
(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
(iii) The Balance Sheet and Statement of Profit and Loss dealt with by
this report are in agreement with the books of account.
(iv) In our opinion, the Statement of Profit & Loss and Balance Sheet
comply with the Accounting Standards referred in sub-section 3(c) of
section 211 of the Companies Act, 1956.
(v) On the basis of written representations received from the
Directors, as on 31st March, 2012 and taken on record by the Board of
Directors, we report that none of the Directors is disqualified as on
2012 from being appointed as a Director in terms of clause (g) of
sub-section (1) of section 274 of the Companies Act, 1956.
(vi) I n 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 note no. 1 of notes annexure herewith 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, 2012;
(b) In the case of the Statement of Profit and Loss, 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 AUDITORSRs REPORT
Annexure referred to in paragraph 3 of the AuditorsRs Report to the
Members of KAMANWALA HOUSING CONSTRUCTION LIMITED, on the accounts for
the year ended 31st March, 2012.
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
(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 fixed assets has not affected the going
concern status of the company.
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 Inventory. No
discrepancies were noticed on verification 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 and therefore
Clause (3)(a)(b)(c)(d) of paragraph 4 of the Order are not applicable.
(e) The Company has taken unsecured loans from Nine 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 661.16 Lacs and the year end balance of loan taken from
such parties was Rs 102.72 Lacs.
(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
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
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
(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
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 except in
case of service tax, arrears of statutory dues i.e. interest on service
tax which is equal to Rs 11,25,506/-. According to the information and
explanations given to us, no undisputed arrears of statutory dues were
outstanding as at 31st March, 2012 for a period of more than six months
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 except income tax as at last day of the
Financial Year. According to records of the Company, income tax which
have not been deposited in the accounts of dispute are given below:
Assessment Year Amount Dateoforder
2007-08 Rs 1,69,763/- 21/12/2009
2008-09 Rs 2,32,724/- 20/12/2010
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 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
13) I n our opinion the Company is not a chit fund or a nidhi / mutual
benefit fund / society. Therefore, Clause 4(xiii) of the Companies
(AuditorRss 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
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 areprima-facie prejudicial to the interest of
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
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
For MITTAL & ASSOCIATES
FRNo. : 106456W
Partner M. No. 42990
Dated: 30th May, 2012.