We have audited the attached Balance Sheet of M/s. KMF BUILDERS &
 DEVELOPERS LTD., as on 31st March 2012 and also the Profit and Loss
 Account and the Cash Flow Statement for the year ended as on that date
 annexed thereto (collectively called as the financial statements).
 These financial statements are the responsibility of the Company''s
 management. Our responsibility is to express our opinion on these
 financial statements based on our audit.
 
 We conducted ouraudit 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 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 (Auditors Report) Order, 2003 issued by
 the Central Government of India in terms of 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.
 
 Further to our comments in the Annexure referred to in Paragraph above,
 We report that:
 
 a) We have obtained all the information and explanations to the best of
 our knowledge and belief that 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 it appears from our examination of the
 books of the company.
 
 c) The Balance Sheet and Profit and Loss Account dealt with by this
 report are in agreement with the books of account of the. Company.
 
 d) On the basis of written representation received from the directors,
 as on 31st March, 2012 and taken on record by the Board of Directors,
 none of the directors is disqualified as on 31st March, 2012 from being
 appointed as a director in terms of clause (g) of sub-section (1) of
 Section 274 of the Act;
 
 e) In our opinion and to the best of our information and according to
 the explanation given to us, the financial statements dealt with by
 this report comply with the accounting standard referred to in sub-
 section (3c) of Section 211 of the Companies Act, 1956 and the rules
 framed there under and. gives the information required by the Act 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 Balance Sheet, of the State of Affairs of the Company
 as on 31 st March, 2012, and
 
 ii) In the case of Profit and Loss Account, of the PROFIT for the year
 ended on that date.
 
 iii) In the case of Cash Flow Statement, of the Cash Flows for the year
 ended on that date.
 
 ANNEXURE TO AUDITORS REPORT
 
 Annexure to the Auditor''s Report of even date to the members of M/s KMF
 BUILDERS & DEVELOPRS LTD. for the year ended 31st March,2012.
 
 Based on the audit procedure performed for the purpose of reporting a
 true and fair view on the financial statements of the company and
 taking into consideration the information and explanation given to us
 and books of account and other records examined by us in the normal
 course of audit, we report that:
 
 1 a) The Company has maintained proper records showing full particulars
 including quantitative
 
 details and situation of fixed records.
 
 b) The company has a regular programme of physical verification of its
 fixed assets on yearly basis. In our opinion, is reasonable having
 regard to the size of the company and the nature of its assets. No
 material discrepancies were noticed on such verification.
 
 c) In our opinion and according to the information and explanation
 given to us, a substantial part of fixed assets has not been disposed
 of by the company during the year.
 
 2 a) According to the information and explanations given to us, the
 stocks of building materials,spare parts and the materials have been
 physically verified during the year by the management.  In our opinion,
 the frequency of verification is reasonable.
 
 b) The Procedures of physical verification of inventories followed by
 the management are reasonable and adequate in relation to the size of
 the company and the nature of its business.
 
 c) The company is maintaining proper records of inventory. The
 discrepancies noticed on verification between the physical stocks and
 the book records were not material.
 
 3 The Company has not taken/granted unsecured loans from Companies
 listed in the register maintained under section 301 of the Companies
 Act, 1956. According to the information and explanations furnishing to
 us, the Inter Corporate Deposit granted to M/s KMF Securities Ltd and
 M/s Manu Investment was interest free loan. Other than this no other
 loan taken/granted by the company.
 
 4 In our opinion and according to the information and explanations
 given to us, there are adequate internal control procedure commensurate
 with the size of the company and the nature of its business with regard
 to purchases of inventory, fixed assets and with regard to the sale of
 goods. During the course of our audit, we have not observed any
 continuing failure to correct major weaknesses in internal control.
 
 5 a) According to the information and explanations given to us, the
 particulars of contracts or arrangements referred to in Section 301 of
 the Act have been entered in the register required ifc be maintained
 under that section.
 
 b) In our opinion and according to the information and explanations
 given to us, there are no transactions made in pursuance of such
 contracts or arrangements and exceeding the value of Rupees Five lacs
 in respect of any party during the year, which have been made at prices
 which are not reasonable 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 not , accepted any deposits from the
 public during the year covered under section 58A of the Companies Act,
 1956 and the rules framed there under.
 
 7 In our opinion and according to the information and explanations
 given to us, the company has not introduced internal audit system
 during the year.
 
 8 According to the information and explanations given to us, the
 Central Government has not prescribed the maintenance of costs records
 by the company under section 209 (1 )(d) of the Companies Act, for the
 products of the company.
 
 9 a) According to the information and explanation given to us and the
 records of the company examined by us, in our opinion, the company is
 generally regular in depositing the undisputed statutory dues including
 income-tax, tax deduction at source, and other material statutory dues
 with the appropriate authorities.
 
 b) According to the information and explanation given to us, no
 undisputed amounts payable in respect of income-tax, sales tax, customs
 duty, excise duty and cess were in arrears, as at 31 st March 2012 for
 a period of more than six months from the date they became payable.
 
 c) According to the information and explanation given to us, there are
 no dues of income-tax, sales tax, customs duty, excise duty and cess
 which have not been depositing on account of any dispute. .
 
 10. The company has no accumulated loss as on 31 st March, 2012 and it
 has not incurred any cash loss in the financial year ended on that date
 or in the immediately preceding financial year.
 
 11. In our opinion and according to the information and explanation
 given to us, the company has not taken any loans from financial
 institution and banks except car loans from HDFC Bank. Company has not
 defaulted in repayment of dues to a bank or a financial institution as
 at the balance sheet date.
 
 12. The company has not granted any loans and advances on the basis of
 security by way of pledge of shares, debentures and other securities
 other than its employees.
 
 13. In our opinion, the company is not a chit fund or a nidhi mutual
 benefit fund/society. Therefore, the provisions of clause 4(xiii) of
 the Companies (Auditor''s Report) Order, 2003 are not applicable to the
 company.
 
 14. In our opinion, the company is not dealing in or trading in shares,
 securities, debentures and other investments. Accordingly, the
 provisions of Claus 4(xiv) of the companies (Auditor''s Report) Order,
 2003 are not applicable to the company.
 
 15. According to the information and explanations given to us, the
 company has not given guarantees for loans taken by others from banks
 or financial institutions.
 
 16. In our opinion, the company do not have any term loans except car
 loans.
 
 17. According to the information and explanation given to us, and on an
 overall examination of the balance sheet of the company, we report that
 no funds raised on short terms basis have been used for long term
 investment. No long term funds have been used to finance short term
 assets.
 
 18. According to the information and explanations given to us, the
 company has not made preferential allotment of shares to parties and
 companies covered in the register maintained under section 301 of the
 Act.
 
 19. According to the information and explanations given to us, during
 the period covered by our audit report, the company has not issued any
 debentures.
 
 20. The company has not raised from the any money from the public
 issues during the year.
 
 21. During the course of our examination of the books and records of
 the company, carried out in accordance with the generally accepted
 auditing practices in India, and according the information and
 explanations given to us, we have neither come across any instance of
 fraud on or by the Company, noticed or reported during the year, nor
 have we been informed of such case by the management.
 
                                         ForBSreenivasa&Co., 
                                         Chartered Accountants 
                                         Firm Reg No. 009287S
 
                                                Sd/-
 
                                         CA B Sreenivasa Setty
 
 PLACE: BANGALORE                        Proprietor
 
 DATED: 02/06/2012                       Membership No. 205645