KMF BUILDERS & DEVELOPERS LIMITED

DIRECTORS' REPORT

To the Members of KMF Builders and Developers Limited

Your Directors have pleasure in presenting the 20th Annual Report together with the Audited Statement of accounts for the financial year ended 31st March, 2015.

2.FUTURE OUTLOOK

The Real estate sector is quite promising with various advantages like Construction of the multi building projects on the feasible location in the country, good structured national network facilities the boom of construction industry.Real estate development is on high and it is attracting the focus of the industry towards construction. Our running projects are Residential Apartments "GokulDham" at Mathura and "Purab Manor" at Bangalore. Yours Directors are quite hopeful for the success of both the projects as well and will earn excellent earning out of it.

3. DIVIDEND

Your Directors do not recommend any dividend for the Financial Year 2014-15.

4. TRANSFER TO RESERVES

The Company has not transferred any amount to the Reserves for the Financial Year 2014-15.

5. CHANGEINTHENATUREOFBUSINESS

There is no change in the nature of the business of the Company during the Financial Year 2014-15.

6. CHANGE IN SHARE CAPITAL DURING THE FINANCIAL YEAR 2014-15

There is no change in share capital structure of the Company during the financial Year 2014-15.

7. HUMAN RESOURCES DEVELOPMENT

The Company has continuously adopted structures that help attract best external talent and promote internal talent to higher roles and responsibilities. KMF Builders and Developers's people centric focus providing an open work environment fostering continuous improvement and development helped several employees realize their career aspirations during the year. Company's Health and Safety Policy commits to provide a healthy and safe work environment to all employees. The Company's progressive workforce policies and benefits, various employee engagement and welfare initiatives have addressed stress management, promoted work life balance.

8. DOCUMENTS PLACED ON THE WEBSITE (www.kmfbuilders.com)

The following documents have been placed on the website in compliance with the Act:

¦ Financial statements of the Company alongwith relevant documents

¦ Details of vigil mechanism for directors and employees to report genuine concerns as per proviso to Section 177(10).

¦ The terms and conditions of appointment of independent directors as per Schedule IV to the Act

9. SUBSIDIARYCOMPANIES

The Company does not have any Subsidiary Company.

10. CORPORATE GOVERNANCE REPORT, MANAGEMENT DISCUSSION & ANALYSIS AND OTHER INFORMATION REQUIRED UNDER THE COMPANIES ACT, 2013 AND LISTING AGREEMENT

As per Clause 49 of the listing agreement entered into with the stock exchanges, Corporate GovernanceReport with Auditors' certificate thereon and Management Discussion and

11. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement of Section 134(5) the Act, and based on the representations received from the management, the directors hereby confirm that:

i. In the preparation of the annual accounts for the financial year 2014-15, the applicable accounting standards have been followed and there are no material departures;

ii. They have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the financial year;

iii. They have taken Proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Act. They confirm that there are adequate systems and controls for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. They have prepared the annual accounts 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 operating properly; 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.

12. AUDITORS

STATUTORY AUDITORS

Pursuant to the provisions of Section 139 of the Act and the rules framed thereunder, B Sreenivasa & Co. Chartered Accountants (Firm Registration No. 009287S), were appointed as statutory auditors of the Company from the conclusion of the 19th Annual General Meeting (AGM) of the Company held till the conclusion of the 22nd AGM to be held in the year 2017, subject to ratification of their appointment at every AGM.

SECRETARIAL AUDITOR

Pursuant to provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the company has appointed Mr. P. K. Sahoo, a firm of Company Secretaries inpractice to undertake the Secretarial Audit of the Company.

INTERNAL AUDITOR

The Company has appointed Mrs. Poonam Sharma wife of Mr. Atul Sharma as Internal Auditor of the Company for the Financial Year 2014-2015.

13.AUDITORS AND SECRETARIAL AUDITORS REPORT

There are no disqualifications, reservations or adverse remarks or disclaimers in the Auditors and Secretarial Auditors Report.

14. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGSAND OUTGO

The particulars as prescribed under Rule 8(3) of the Companies (Accounts) Rules, 2014, are set out in an Annexure-1 to this Report.

15. EXTRACT OFANNUAL RETURN

The extract of Annual Return as provided under Sub-Section (3) of Section 92 of the Companies Act, 2013 ( the "Act") is enclosed at Annexure-2 in the prescribed form MGT-9 and forms part of this Report.

16. DEPOSIT FROM PUBLIC

The Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet.

17. DIRECTORS

Mrs. Kavita Chadha, Director, retires by rotation and being eligible, has offered herself for reappointment. The Board recommends the same for your approval.

Mr. Anil Rishiraj, Mr. Ravinder Kumar Sharma and Mr. Shyam Sunder Mittra who are Independent Directors, have submitted a declaration that each of them meets the criteria of independence as provided in Sub-Section (6)of Section 149of theActand revised Clause49of the Listing Agreements. Further, there has been no change in the circumstances which may affect their status as independent director during the year.

Company's policy on Directors' appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under section 178(3) of the Act are covered in Corporate Governance Report which forms part of this Report. Further, information about elements of remuneration package of individual directors is provided in the extract ofAnnual Return as provided under Section 92(3) of the Act, is enclosed at Annexure-2 in the prescribed form MGT-9 and forms part o this Report.

18. BOARD EVALUATION

The performance evaluation of the Board, its Committees and individual directors was conducted and the same was based on questionnaire and feedbackfrom all the Directors on the Board as a whole, Committees and self-evaluation. Directors, who were designated, held separate discussions with each of the Directors of the Company and obtained theirfeedback on overall Board effectiveness as well as each of the other Directors.

Based on the questionnaire and feedback, the performance of every director was evaluated in the meeting of the Nomination and Remuneration Committee (NRC).

A separate meeting of the independent directors ("Annual ID meeting") was convened, which reviewed the performance of the Board (as a whole), the non-independent directors and the Chairman. Post the Annual ID meeting, the collective feedback of each of the Independent Directors was discussed by the Chairman of the NRC with the Board's Chairman covering performance of the Board as a whole; performance of the non-independent directors and performance of the Board Chairman.

Some of the key criteria for performance evaluation are as follows -Performance evaluation of Directors:

¦ Attendance at Board or Committee meetings

¦ Contribution at Board or Committee meetings

¦ Guidance/supportto management outside Board/Committee meetings Performance evaluation ofBoard and Committees:

¦ Degree of fulfilment of key responsibilities

¦ Board Structure and composition

¦ Effectiveness of Board Processes, information and functioning

¦ Board culture and dynamics

¦ Quality of relationship between Board and Management

¦ Efficacy of communication with external stakeholders

19. NUMBER OF MEETINGS OF THE BOARD

5 meetings of the Board of Directors of the Company were held during the year. For detail of the meetings, please refer to clause III(D) of the Corporate Governance Report, which forms part of this Report.

20.CODE OF CONDUCT FOR DIRECTORSAND SENIOR MANAGEMENT

The Directors and members of Senior Management have affirmed compliance with the Code of Conduct for Directors and Senior Management of the Company. A declaration to this effect has been signed by Mr. Gorve Chadha, Managing Director and forms part of the Annual Report.

21. PREVENTION OF INSIDER TRADING

The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading insecurities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Company's shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code. All Board Directors and the designated employees have confirmed compliance with the Code.

22. PARTICULARS OF LOANS, GUARANTEESAND INVESTMENTS

The details of loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the financial statement.

23. TRANSACTIONS WITH RELATED PARTIES

All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm's length basis. Thus, the provisions of Section 188(1) of the Companies Act, 2013 are not applicable. During the year, the Company has not entered into any contract / arrangement / transaction of material nature with any of the related parties which are in conflict with the interest of the Company. Related party disclosures are given in the notes to the financial statement.

24. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.

25. INTERNAL CONTROL

The information about internal controls is set out in the Management Discussion & Analysis report which is attached and forms part of this Report.

26. RISK MANAGEMENT

The Risk Management is overseen by the Audit Committee of the Company on a continuous basis. The Committee oversees Company's process and policies for determining risk tolerance and review management's measurement and comparison of overall risk tolerance to established levels. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuous basis. For details, please refer to the Management Discussion and Analysis report which form part of the Board Report.

27. FAMILIARIZATION PROGRAM FOR INDEPENDENT DIRECTORS

The Company has practice of conducting familiarization program of the independent directors as detailed in the Corporate Governance Report which forms part of the Annual Report.

28. DISCLOSURE ON THE NOMINATION AND REMUNERATION POLICY OF THE COMPANY PURSUANT TO SECTION 134(3) (e) AND SECTION 178 (3)

The Board of Directors of your Company in its meeting held on 30th May, 2014 has constituted the Nomination and Remuneration Committee. Prior to this, the Board has constituted Remuneration Committee but due to introduction of Companies Act, 2013 the new Committee namely Nomination and Remuneration Committee has been constituted. Details of the Nomination and Remuneration Committee and Nomination and Remuneration Policy have been provided under Corporate Governance Report, which forms part of this Annual Report.

29. VIGILMECHANISM

The Company has established a vigil mechanism for Directors and employees to report their genuine concerns. For details, please refer to the Corporate Governance Report attached to this Report.

30. PARTICULARSOFEMPLOYEES

The information required under the provisions of Rules 5(2) & 5(3) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 are not applicable to the Company as there was no Personnel who was in receipt of remuneration aggregating to Rs. 60,00,000/- per annum if employed throughout the financial year and Rs. 5,00,000/- per month if employed for a part of financial year.

32. PECUNIARY RELATIONSHIP ORTRANSACTIONS OF NON-EXECUTIVE DIRECTORS

During the year, the Non-Executive Directors of the Company had no pecuniary relationship or transactions with the Company.

33. LISTING

The Equity shares of your company were listed at Bombay Stock Exchange Limited and Delhi Stock Exchange Limited. However, the Delhi Stock Exchange Limited has been de-recognized as a Stock Exchange during the year, so, presently the Company is listed on Bombay Stock Exchange Limited only. The Company has paid listing fees to the Bombay Stock Exchange for the year 2014-15.

34. ACKNOWLEDGEMENTS

The Directors wish to convey their appreciation to business associates for their support and contribution during the year. The Directors would also like to thank the employees, shareholders, customers, suppliers, alliance partners and bankers for the continued support given by them to the Company and their confidence reposed in the management.