Management Responsibility for the Financial Statements

1. Management is responsible for the preparation of these financial statements that give a true and fair view of financial position, financial performance of the company in accordance with the accounting standards referred to in sub -section (3C) of section 211 of the Companies Act 1956 ("the Act"); read with General Circular 812014 dated 4 April 20I4,issued by the Ministry of Corporate Affairs: and The responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of financial statements that give a time and fair view and are free from material misstatements, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the standards on auditing issued by the Institute of Chartered Accountants of India. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from misstatements.

Audit involves performing procedure to obtain audit evidence about the amounts and disclosure in the financial statements. The procedure selected depend upon auditor's judgement, including the assessment of the risk of material misstatements of the financial statements, whether due to fraud or error. In making those risk assessment, the auditor considers internal control relevant to the Company's preparation and fair presentation of the financial statements in order to design audit procedure that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of financial statements.

We believe that audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In ouropinion and to the best of our information and according to the explanations given to us, the financial statements give 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:

Annexure to the Auditors' Report

Annexure referred to in paragraph 3 of the Auditors' Report to the Members of M/s KLK Electrical Limited on the accounts for the year ended 31"t, March,20I4 On the basis of such checks as we considered appropriate and according to the inform5.tion and explanation given to us during the course of our audit, we report that;

01. Fixed Assets

(a) The company has maintained proper records showing full particulars including quantitative details and situation of its fixed assets.

(b) As explained to us, fixed assets have been physically verified by the management at reasonable intervals: no material discrepancies were noticed on such verification.

(c) In our opinion and according to the information and explanations given to us, no fixed asset has been disposed during the gear and therefore does not affect the going concern assumption.

02. Inventory

According to the information and explanations given to us and on the basis of our examination of the books of accounts, the Company does not have any inventories hence not applicable.

03. Loans Granted/taken

(a) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has not granted any loans, secured or unsecured, to companies, firms or other parties listed in the register maintained under Section 301 of Companies Act, 1956. Consequently, the provisions of clauses iii (b),iiicand iii(d) of the order are not applicable to the company.

(b) According to the information and explanations given to us and on the basis of our examination of the books of accounts, the Company has not taken loans from companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956,thus sub clauses 9(f) & (g) are not applicable to the company,

04. Internal Control System

In our opinion and according to the information and explanations given to us, there are adequate internal control procedures 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 and services, during the course of our audit, no major instance of continuing failure to correct any weaknesses in the internal controls has been noticed.

05. Related Party transactions

(a) In our opinion and according to the information and explanations provided by the management, we are of the opinion that the transactions that need to be entered into the register maintained under Section 301 have been so entered.

(b) In our opinion and according to the information and explanations given to us, there are no transactions made in pursuance of contracts or arrangements entered in the registers maintained under Section 30 1 and has been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

06. Deposits:

The company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA or any other provisions of the act and the rules framed there under.

07. Internal Audit

As per information & explanations given by the management, the company has an internal audit system commensurate with its size and the nature of its business.

08. Cost Records

According to the information and explanations given to us and on the basis of our examination of the-bboks of accounts Maintenance of cost records not applicable to this company since the company not commenced production activities

09. Stafittont Dues

(a) According to the records of the company, 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 to the extent applicable and any other statutory dues have generally been regularly deposited with the appropriate authorities, According to the information and explanations given to us there were no outstanding statutory duesason3l st of March,2014 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 is no amounts payable in respect of Income tax, wealth tax, service tax, sales tax, customs duty and excise duty which have not been deposited on account of any disputes.

10. Accumulation of Losses

The company have accumulated losses of Rs 99.12 lacs and has incurred cash losses during the financial year covered by our audit Rs. 3.87 lacs and Rs. 3.46 lacs in the immediately preceding financial year.

11. Dues to Financial Institutions

Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that the company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

12. Security against Loans

According to the information and explanations given to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. Applicability of Special Status

The Company is not a chit fund or a nidhi / mutual benefit fund/society. Therefore the provisions of this clause of the Companies (Auditor's Report) Order, 2003(as amended is not applicable to the Company

14. Maintenance of Proper Records for Security Transactions

The company is not a dealer or trader in shares, securities, debentures and other investments.

15. Guarantees Given

According to the information and explanations given to us, The company has not given any guarantee for loans taken by others from bank or financial institutions.

16. Term Loans

Based on our audit procedures and on the information given by the management we report that the company has not raised any term loans during the year: hence utilization of funds does not arise.

17. Utilization of Short, term Funds

Based on information and explanations given to us and on an overall examination of the Balance Sheet of the company as at 3Lst March,2014,we report that no funds raised on short-term basis have been used for long-term investment by the company

18. Preferential Allotment

We are informed that the company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

19. Security / Charges for Debentures

The company has not issued debentures and hence requirement of reporting regarding creation of security in respect of debentures issued does notarise.

20. Frauds

Based upon the audit procedures performed and as per information and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during the year.

(a) in case of the Balance Sheet, of the state of affairs of the Company as at 3l'st March'2014;

(b) in case Statement of Profit and Loss Account, of the for the year ended on that date; and

(c) in case of the Cash Flow Statements, of the cash flows for the year ended on that date

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order,2003("the order") issued by Central Government of India in terms of sub-section (4A) of section 227 of the Act, We give in the Annexure a statements on the matters specified in paragraphs 4 and 5 of the order.

2. As required by section 227(3) of the Act, we report that:

a. We have obtained all information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b. In our opinion proper books of account as required by l-arv have been kept by the Company so far as appears from our examinations of those books;

c. the Balance Sheet, Statement of Profit and Loss, and Cash Flow statement dealt with by this Report are in agreement with the books of account;

d. In our opinion , the Balance Sheet, Statement of Profit and Loss, comply with the Accounting Standards referred to in sub-section(3C) of section 2I I of the Companies Act,1956; read with General Circular 8/2014 dated 4 April 20l4,issued by the Ministry of Corporate Affairs: and

e. On the basis of written representations received from the directors as on March,3I.20I4 and taken on record by the Board of Directors, none of the director is disqualified as on, from being appointed as a director in terms of clause (g) of sub section (1) of section 274 of the Companies Act, 1956.

Date : 15/05/2014
Place: CHENNAI 
                                                For Chitta & Associates
                                                 Chartered Accountants
                                                      FRN:009490S

                                                Chitta Nageswara Sastry
                                                      Proprietor
                                                     M.NO.210531