TO THE MEMBERS OF KLK ELECTRICAL LIMITED
Ladies & Gentlemen,
I I have audited the attached Balance Sheet of M/s. KLK ELECTRICAL LIMITED, CHENNAI,as at March 31, 2012 and also the Profit and Loss Account and Cash flow Statement forthe year ended on that date annexed thereto all of which I have signed under reference tothis report. These financial statements are the responsibility of the Company'smanagement. my responsibility is to express an opinion on these financial statements basedon my audit.
II I conducted my audit in accordance with the auditing statement standards generallyaccepted in India. Those Standards require that I plan and perform the audit to obtainreasonable assurance about whether the financial statements are free of materialmisstatement. An audit includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financial statementpresentation. I believe that my audit provides a reasonable basis for my opinion.
Ill As required by the Companies (Auditors' Report) Order, 2003 issued by the CentralGovernment of India in terms of Sub-Section (4A) of Section 227 of the Companies Act,1956,1 give below, a statement on the matters specified in paragraph 4 & 5 of the saidOrder.
1. The Company has maintained proper records showing full particulars includingquantitative details and the situation of its fixed assets. There are no tangible fixedassets in the company physical verification at the year-end of the same does not arise..
2. (a) During the year there was no inventory at the year-end and hence the physicalverification of inventory is not applicable.
(b) On the basis of my examination of the records of inventory, I am of the opinionthat the company is maintaining proper records of inventory. The discrepancies if any,noticed on verification of physical stocks and the book record does not arise.
3. (a) The company had not granted any loan, secured or unsecured, to other companies,firms or persons covered in the register maintained under section 301 of the CompaniesAct, 1956.
(b) The company had taken interest free unsecured loan from three parties listed in theregister maintained u/s.301 of the Act. The maximum amount due during the year wasRs.4,241,135/- and the balance outstanding as at the end of the financial year isRs.15,000/-
(c) No interest is payable on such loans taken from them and the other terms andconditions with regard to repayment are, in my opinion prima facie, not prejudicial to theinterest of the Company.
4. In my opinion and according to the information and explanation given to me, thereare adequate internal control procedures commensurate with the size of the company and thenature of its business with regard to purchases of inventory and with regard to the saleof goods. During the course of my audit, no major weakness has been noticed in theinternal controls.
5. Based on the audit procedures applied by me and according to the information andexplanations provided by the management, I am of the opinion that the transactions thatneed to be entered into the register maintained under section 301 have been so entered.
6.In my opinion and according to the information and explanations given to me, thatthere are no transactions made in pursuance of contracts or arrangements, entered in theregisters maintained under section 301 and exceeding the value of 5 Lakh rupees during theyear.
7.ln my opinion and according to the information and explanations given to me, thecompany has not accepted deposits from public under sections 58A and 58AA of the CompaniesAct, 1956 during the year.
8.The company has an internal audit system during the year commensurate with the sizeof the company and nature of its business.
9.ln my opinion and according to the information and explanations given to me, theCentral Government has not prescribed any rules under clause (d) of sub-section (1) ofSection 209 of the Act for the maintenance of cost records in respect of the productsdealt with by the company.
10(a) According to the records of the company, there is no amount payable in respect ofsale tax, income tax, customs tax or wealth tax, excise duty / cess which are outstandingas at March 31,2012 for a period of more than six months from the date they becomepayable.
(b) According to the records of the company, there are no dues of sale tax, income tax,customs tax or wealth tax, excise duty / cess which have not been deposited on account ofany dispute.
11. The company has incurred cash losses during the financial year covered by my auditas well as in the financial year immediately preceding the financial year. The accumulatedloss has not exceeded 50% of the net worth of the company.
12. Based on my audit procedures and on the information and explanations given by themanagement, I am of the opinion that the company has not defaulted in repayment of dues toa bank. The company does not have any debenture holders.
13. Based on my examination of documents and records, I am of the opinion that thecompany has not granted during the year any loans or advances on the basis of security byway of pledge of shares, debentures and other securities.
14. Based on my examination of documents and records, I am of the opinion the companyis not carrying on any activity relating to chit fund, nidhi, mutual benefit fund/society,no special statute is applicable to the company.
15. Based on my examination of the records and evaluation of the related internalcontrols, I am of the opinion that the company is not dealing or trading in shares,securities, debentures and other investments and hence the question of maintenance ofadequate records relating to the same does not arise.
16. The company has not given any guarantee for loans taken by others from bank orfinancial institutions.
17. The company has not raised any term loans during the year and hence the applicationof the funds for the purpose for which they were raised does not arise.
18. According to the information and explanations given to me and on an overallexamination of the balance sheet of the company, I report that no funds raised onshort-term basis have been used for long-term investment. No long-term funds have beenused to finance short-term assets.
19. Based on my examination of records and the information provided to me by themanagement, I report that the company hast made preferential allotment of shares duringthe year and the same are not prejudicial to the interest of the company or its members.
20. During the period covered by my audit report, the company had not issued anydebentures and hence the question of creation of any security in the respect of thesedebentures does not arise.
21. The company had not raised any money through public issues during the year underaudit.
22. Based upon the audit procedures performed and information and explanations given bythe management, I report that no fraud on or by the company has been noticed or reportedduring the course of my audit.
IV.Further to my comments in Para III above, I report that:
a) l have obtained all the information and explanations, which to the best of myknowledge and belief were necessary for the purpose of my audit;
b) ln my opinion, proper books of account as required by law have been kept by thecompany so far as appears from my examination of those books.
c) The Balance Sheet, Profit and Loss Account and cash flow statement dealt with bythis report are in agreement with the books of account.
d) ln my opinion, the balance sheet and the profit and loss account dealt with by thisreport comply with the accounting standards referred to in sub-section (3C) of section 211of the Companies Act, 1956;
e) On the basis of written representation received from the Directors as on 31s1 March,2012 and taken on record by the Board of Directors, I report that none of the Director isdisqualified as on 31st March 2012 from being appointed as a director in terms of clause(g) of Section 274 of the Companies Act, 1956;
f)ln my opinion and to the best of my information and according to the explanationsgiven to me, the said accounts give the information required by the Companies Act, 1956,in the manner so required:
i. ln the case of Balance Sheet of the State of Affairs of the Company as at March 31,2012;
ii. In the case of the profit and loss account, of the Profit for the year ended onthat date; and
iii. ln the case of the cash flow statement for the year ended on that date.
|03-11-12 ||N.Subramanian |
|Chennai ||Chartered Accountant |
| ||Mem. No. 21628 |