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Auditor Report of Charms Industries Ltd.

Mar 31, 2014

Report on Financial Statement

We have audited the accompanying financial statements of Charms Industries Ltd ("the company"), which comprise the Balance Sheet as at March 31, 2014, and the Statement of Profit and Loss for the year then ended, and summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statement

Management is responsible for the preparation of these financial statements that give true and fair view of the financial position and financial performance of the Company in accordance with the Accounting Standard referred to in sub-section (3C) of section 211 of the Companies Act,1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, 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 Standard 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 whether the financial statements are free from material misstatement.

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

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

Opinion

In our opinion and to the best of our information and according to the explanation given to us, the financial statements give the information required by the Act in the manner so required and give true and fair view in conformity with accounting principles generally accepted in India subject to following remark :-

Loans & Advances amounting Rs. 39,60,663 are cumulative amounts given as loan in last 5/6 years (except Rs. 6 lacs given during the year). All such amounts were advanced as Short Term Loans. However, the same are still remains outstanding as not received back as per stipulation. The management is taking all steps required including Legal Actions for their recovery. The management are hopeful for the recovery and hence they are treated as good of recovery. As principal loan amounts are not received in time, the interest thereon has not accounted in books of accounts. However, due to passing of long time of loan given, we are of the opinion that they appears to be doubtful loans for which no provision has been made and to that extent, this year profit & accumulated loss have been under stated.

a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31,2014; and b) in the case of Profit and Loss Account, of the profit/loss for the year ended on that date;

Report on the Legal & Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in Annexure a statement 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 the 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 the law have been kept by the company so far as appears from our examination of those books

c) the Balance Sheet and Statement of Profit and Loss dealt with by this Report are in agreement with the books of account.

d) in our opinion, the Balance Sheet and Statement of Profit and Loss comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act,1956.

e) on the basis of written representation received from the directors as on March 31,2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of Companies Act,1956.

f) Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

ANNEXURE REFERRED TO IN PARAGRAPH (1) OF THE AUDITOR''S REPORT TO THE MEMBERS OF CHARMS INDUSTRIES LIMITED FOR THE YEAR ENDED MARCH 31, 2014

1. FIXED ASSETS:-

i) The Company has maintained the record of Fixed Assets showing full particulars of quantitative details and location.

ii) The same have physically verified and no discrepancy has been noticed.

iii) During the year, the Company has not sold any Fixed Assets.

2. NATURE OF BUSINESS:-

The Company is doing the business as Money Changer (Trading in Foreign Currency & Travellers'' Cheques & Software Services ) Under the circumstances, the following matters are not applicable :-

i) Procedure for the purchases of stores / raw materials & finished products and its compression with record.

ii) Physical verification of above items.

iii) Maintenance of records of scrap / waste generated from the manufacturing activities.

iv) Maintenance of Cost Records.

v) Valuation of above items.

3. According to the information and explanations given to us the Company has not granted any loans to companies covered in the register maintained under Section 301 of the Companies Act, 1956.

4. According to the information and explanations given to us, the Company has not taken any loans from companies, firms or other parties listed in the register maintained under Section 301 (1B) of the Companies Act, 1956.

5. According to the information and explanations given to us, the Company has not accepted any deposits from the public. Therefore, the provisions of Clause (vi) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

6. According to the information and explanations given to us, no personal expenses of employees or directors have been charged to revenue account, other then those payable under contractual obligations or in accordance with generally accepted business practice.

7. The company is not a sick industrial company within the meaning of clause (0) of sub-section (1) of Section 3 of the Sick Industrial Companies (Special Provisions) Act, 1956.

8. Since the Company is not a chit fund or nidhi / mutual benefit fund/society, paragraph 4 (xiii) of the order is not applicable.

9. As the Company is not dealing or trading is shares, securities, debentures and other investments, paragraph 4 (x iv) of the order is not applicable.

10. According to the records of the Company examined by us and on the basis of information & explanations give to us, the Company has:

i. Not taken any loans from bank or financial institution.

ii. Not granted any loans and advances on the basis of security by way pledge of shares, debentures and other securities during the year.

iii. Not given any guarantee for loans taken by others or financial institutions during the year.

11. Based upon the audit procedures performed and information & explanations given by the management, no fraud on or by the Company has been notice during the year under audit.

For, Praful N. Shah & Co. Chartered Accountants (F.R.N. - 108057W)

Praful N. Shah Place : Ahmedabad Proprietor Date : 30/05/2014 Membership No. : 15591


Mar 31, 2013

1. We have audited the attached Balance Sheet of CHARMS INDUSTRIES LTD. as at 31st March, 2013 & the Statement of Profit & Loss and the Cash Flow Statement of the Company for the year ended on that date, annexed thereto. 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.

2. We conducted our audit in accordance with the 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 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 the management, as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the manufacturing and other Companies (Auditor''s Report) order, 2004 (together the "Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies act, 1956, and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we enclose in the Annexure a statements on the matters specified in paragraphs 4 and 5 of the said order.

4. (a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit.

(b) 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 those books.

(c) The Balance sheet, the Statement Profit & Loss t and Cash flow Statement dealt with this report are in agreement with the books of accounts.

(d) In our opinion, the Balance Sheet, the Statement Profit & Loss and Cash flow Statement dealt with by this report comply with the applicable Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956.

(e) On the basis of written representations received from the directors, as on 31st March, 2013 and taken on records by the Board of Directors, we report that none of directors is disqualified as on 31st March, 2013 from being appointed as director in terms of clauses (g) of subsection (1) of section 274 of the Companies Act, 1956.

(f) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements, together with the notes thereon and attached thereto give in the prescribed manner the information required by the Act and a true and fair view in conformity with the accounting principles generally accepted in India, subject to Para: 6 of Note: 16 ( regarding loans / advances and especially of old loan amounts Rs. 20,16,674/-, which has been considered as good of recovery by the management but due to no recovery till date, they appears to be doubtful. Likewise a sum of Rs. 2,74,411/- recoverable from Stock Exchange, paid as Security at the time of Public Issue, also appears to be doubtful of recovery. For these amounts of Rs. 22,91,085/- no provision have been made in the accounts and due to non-provision, the profit of the year has been overstated to that extent.

Subject to above Remark :-

i) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013.

ii) In the case of the Profit and Loss Account, of the Profit of the year ended on that date.

iii) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

1. FIXED ASSETS:-

i) The Company has maintained the record of Fixed Assets showing full particulars of quantitative details and location.

ii) The same have physically verified and no discrepancy has been noticed.

iii) During the year, the Company has not sold any Fixed Assets.

2. NATURE OF BUSINESS:-

The Company is doing the business as Money Changer (Trading in Foreign Currency & Travelers'' Cheques & Software Services ) Under the circumstances, the following matters are not applicable :-

i) Procedure for the purchases of stores / raw materials & finished products and its compression with record.

ii) Physical verification of above items.

iii) Maintenance of records of scrap / waste generated from the manufacturing activities.

iv) Maintenance of Cost Records.

v) Valuation of above items.

3. According to the information and explanations given to us the Company has not granted any loans to companies covered in the register maintained under Section 301 of the Companies Act, 1956.

4. According to the information and explanations given to us, the Company has not taken any loans from companies, firms or other parties listed in the register maintained under Section 301 (1B) of the Companies Act, 1956.

5. According to the information and explanations given to us, the Company has not accepted any deposits from the public. Therefore, the provisions of Clause (vi) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

6. According to the information and explanations given to us, no personal expenses of employees or directors have been charged to revenue account, other than those payable under contractual obligations or in accordance with generally accepted business practice.

7. The company is not a sick industrial company within the meaning of clause (0) of sub-section (1) of Section 3 of the Sick Industrial Companies (Special Provisions) Act, 1956.

8. Since the Company is not a chit fund or nidhi / mutual benefit fund/society, paragraph 4 (xiii) of the order is not applicable.

9. As the Company is not dealing or trading in shares, securities, debentures and other investments, paragraph 4 (x

iv) of the order is not applicable.

10. According to the records of the Company examined by us and on the basis of information & explanations give to us, the Company has:

i. Not taken any loans from bank or financial institution.

ii. Not granted any loans and advances on the basis of security by way pledge of shares, debentures and other securities during the year.

iii. Not given any guarantee for loans taken by others or financial institutions during the year.

11. Based upon the audit procedures performed and information & explanations given by the management, no fraud on or by the Company has been notice during the year under audit.

For, Praful N Shah & Co.

Chartered Accountants

Praful N. Shah

(Proprietor)

Place : Ahmedabad M. No. :-15591

Date : 30/05/2013 F.R.N.-108057W


Mar 31, 2012

1. We have audited the attached Balance Sheet of CHARMS INDUSTRIES LTD. as at 31st March, 2012 and also the Statement of Profit and Loss and the Cash Flow Statement of the Company for the year ended on that date, annexed thereto. 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.

2. We conducted our audit in accordance with the 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 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 the management, as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the manufacturing and other Companies (Auditor's Report) order, 2004 (together the "Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies act, 1956, and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we enclose in the Annexure a statements on the matters specified in paragraphs 4 and 5 of the said order.

4 (a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit.

(b) 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 those books.

(c) The Balance sheet, the Statement of Profit and Loss and Cash Flow Statement dealt with this report are in agreement with the books of accounts.

(d) In our opinion, the Balance Sheet and the Statement of Profit and Loss and Cash Flow Statement dealt with by this report comply with the applicable Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956.

(e) On the basis of written representations received from the directors, as on 31st March, 2012 and taken on records by the Board of Directors, we report that none of directors is disqualified as on 31st March, 2012 from being appointed as director in terms of clauses (g) of subsection (1) of section 274 of the Companies Act, 1956.

(g) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements, together with the notes thereon and attached thereto give in the prescribed manner the information required by the Act and a true and fair view in conformity with the accounting principles generally accepted in India, subject to Para : 6 of Note 16 ( regarding loans/advances and especially of old loan amounts Rs. 16,66,674/-, which has been considered as good of recovery by the management but due to no recovery till date, they appears to be doubtful and due to its non-provision, the profit of the year has been overstated to that extent.

i) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2012 AND

ii) In the case of the Profit and Loss Account, of the Profit of the year ended on that date.

iii) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

ANNEXURE REFERRED TO IN PARAGRAPH (1) OF THE AUDITOR'S REPORT TO THE MEMBERS OF CHARMS INDUSTRIES LIMITED FOR THE YEAR ENDED MARCH 31, 2012:-

1. FIXED ASSETS:-

i) The Company has maintained the record of Fixed Assets showing full particulars of quantitative details and location.

ii) The same have physically verified and no discrepancy has been noticed.

iii) During the year, none of the Fixed Assets have been sold.

2. NATURE OF BUSINESS:-

The Company is doing the business as Money Changer (Trading in Foreign Currency & Travellers' Cheques & Software Services) Under the Circumstances, the following matters are not applicable:-

i) Procedure for the purchases of stores/raw materials & finished products and its compression with record.

ii) Physical verification of above items.

iii) Maintenance of records of scrap/waste generated from the manufacturing activities.

iv) Maintenance of Cost Records.

v) Valuation of above items.

3. According to the information and explanations given to us the Company has not granted any loans to companies covered in the register maintained under Section 301 of the Companies Act, 1956.

4. According to the information and explanations given to us, the Company has not taken any loans from companies, firms or other parties listed in the register maintained under Section 301 (1B) of the Companies Act, 1956.

5. According to the information and explanations given to us, the Company has not accepted any deposits from the public. Therefore, the provisions of Clause (vi) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

6. According to the information and explanations given to us, no personal expenses of employees or directors have been charged to revenue account, other than those payable under contractual obligations or in accordance with generally accepted business practice.

7. The company is not a sick industrial company within the meaning of clause (0) of sub-section (1) of Section 3 of the Sick Industrial Companies (Special Provisions) Act, 1956.

8. Since the Company is not a chit fund or nidhi/mutual benefit fund/society, paragraph 4 (xiii) of the order is not applicable.

9. As the Company is not dealing or trading is shares, securities, debentures and other investments, paragraph 4 (x iv) of the order is not applicable.

10. According to the records of the Company examined by us and on the basis of information & explanations give to us, the Company has:

i) Not taken any loans from bank or financial institution.

ii) Not granted any loans and advances on the basis of security by way pledge of shares, debentures and other securities during the year.

iii) Not given any guarantee for loans taken by others or financial institutions during the year.

11. Based upon the audit procedures performed and information & explanations given by the management, no fraud on or by the Company has been notice during the year under audit.

For, Praful N Shah & Co. Chartered Accountants

Praful N. Shah (Proprietor) M. No. :-15591 F.R.N.- 108057W

Place : Ahmedabad Date : 14/06/2012


Mar 31, 2011

1. We have audited the attached Balance Sheet of CHARMS INDUSTRIES LTD. as at 31st March, 2011 & the Profit & Loss Account and the Cash Flow Statement of the Company for the year ended on that date, annexed thereto. 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.

2. We conducted our audit in accordance with the 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 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 the management, as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the manufacturing and other Companies (Auditor's Report) order, 2004 (together the "Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies act, 1956, and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we enclose in the Annexure a statements on the matters specified in paragraphs 4 and 5 of the said order.

4. (a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit.

(b) 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 those books.

(c) The Balance sheet and Profit & Loss Account dealt with this report are in agreement with the books of accounts.

(d) In our opinion, the Balance Sheet, and Profit & Loss Account and cash flow statement dealt with by this report comply with the applicable Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956.

(e) On the basis of written representations received from the directors, as on 31st March, 2011 and taken on records by the Board of Directors, we report that none of directors is disqualified as on 31st March, 2011 from being appointed as director in terms of clauses (g) of subsection (1) of section 274 of the Companies Act, 1956.

(g) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements, together with the notes thereon and attached thereto give in the prescribed manner the information required by the Act and a true and fair view in conformity with the accounting principles generally accepted in India, subject to Para : 6 of Schedule : 9 ( regarding laons / advances and especially of old loan amounts Rs. 7,40,000/- ( last year's balance Rs. 21,15,000 less Rs. 13,75,000 received before singing of balance sheet) which has been considered as good of recovery by the management but due to no recovery till date, they appears to be doubtful and due to its non-provision, the profit of the year has been overstated to that extent.

i) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2011 and

ii) In the case of the Profit and Loss Account, of the Profit of the year ended on that date.

iii) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

ANNEXTURE REFERRED TO IN PARAGRAPH (1) OF THE AUDITOR'S REPORT TO THE MEMBERS OF CHARMS INDUSTRIES LIMITED FOR THE YEAR ENDED MARCH 31, 2011:-

1. FIXED ASSETS :-

i) The Company has maintained the record of Fixed Assets showing full particulars of quantitative details and location.

ii) The same have physically verified and no discrepancy has been noticed.

iii) During the year, the Company has sold one Motor Car.

2. NATURE OF BUSINESS :-

The Company is doing the business as Money Changer (Trading in Foreign Currency & Travelers' Cheques & Software Services ) Under the circumstances, the following matters are not applicable :- i) Procedure for the purchases of stores / raw materials & finished products and its compression with record. ii) Physical verification of above items.

iii) Maintenance of records of scrap / waste generated from the manufacturing activities.

iv) Maintenance of Cost Records.

v) Valuation of above items.

3. According to the information and explanations given to us the Company has not granted any loans to companies covered in the register maintained under Section 301 of the Companies Act, 1956.

4. According to the information and explanations given to us, the Company has not taken any loans from companies, firms or other parties listed in the register maintained under Section 301 (1B) of the Companies Act, 1956.

5. According to the information and explanations given to us, the Company has not accepted any deposits from the public. Therefore, the provisions of Clause (vi) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

6. According to the information and explanations given to us, no personal expenses of employees or directors have been charged to revenue account, other then those payable under contractual obligations or in accordance with generally accepted business practice.

7. The company is not a sick industrial company within the meaning of clause (O) of sub-section (1) of Section 3 of the Sick Industrial Companies (Special Provisions) Act, 1956.

8. Since the Company is not a chit fund or nidhi / mutual benefit fund/society, paragraph 4 (xiii) of the order is not applicable.

9. As the Company is not dealing or trading is shares, securities, debentures and other investments, paragraph 4 (x iv) of the order is not applicable.

10. According to the records of the Company examined by us and on the basis of information & explanations given to us, the Company has:

i) Not taken any loans from bank or financial institution.

ii) Not granted any loans and advances on the basis of security by way pledge of shares, debentures and other securities during the year.

iii) Not given any guarantee for loans taken by others or financial institutions during the year.

11. Based upon the audit procedures performed and information & explanations given by the management, no fraud on or by the Company has been noticed during the year under audit.

FOR PRAFUL N. SHAH & CO. Chartered Accountants,

F.R.N.- 708057W

PRAFUL N. SHAH

Place : Ahmedabad PROPRIETOR

Date : 12/08/2011 Membership No.: 15591


Mar 31, 2010

1. We have audited the attached Balance Sheet of CHARMS INDUSTRIES LTD. as at 31st March, 2010 & the Profit & Loss Account and the Cash Flow Statement of the Company for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the 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 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 the management, as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the manufacturing and other Companies (Auditors Report) order, 2004 (together the "Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies act, 1956, and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we enclose in the Annexure a statements on the matters specified in paragraphs 4 and 5 of the said order.

4. (a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit.

(b) 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 those books. I

(c) The Balance sheet and Profit & Loss Account dealt with this,report are in agreement with the books of accounts.

(d) In our opinion, the Balance Sheet, and Profit & Loss AccouVit and cash flow statement dealt with by this repqrt comply with the applicable Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956.

(e) On the basis of written representations received from the directors, as on 31st March, 2010 and taken on records by the Board of Directors, we report that none of directors is disqualified as on 31st March, 2010 from being appointed as director in terms of clauses (g) of subsection (1) of section 274 of the Companies Act, 1956.

(g) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements, together with the notes thereon and attached thereto give in the prescribed manner the information required by the Act and a true and fair view in conformity with the accounting principles generally accepted in India, subject to Para : 6 of Schedule : 9 ( Notes forming part of Accounts ) Re : Non-provision of certain overdue advances aggregating to Rs.21,15,000/- classified by the management though as good of recovery, but due to no recovery till date, they appears to be doubtful and due to its non-provision, the loss of the year has been understated to that extent.

i) In the case qf the Balance Sheet, of the state of affairs of the Company as at March 31, 2010 AND

ii) In the case of the Profit and Loss Account, of the Profit of the year ended on that date.

iii) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

ANNEXTURE REFERRED TO IN PARAGRAPH (1) OF THE AUDITORS REPORT TO THE MEMBERS OF CHARMS INDUSTRIES LIMITED FOR THE YEAR ENDED MARCH 31, 2010 -

1. FIXED ASSETS :-

i) The Company has maintained the record of Fixed Assets showing full particulars of quantitative details and location.

ii) The same have physically verified and no discrepancy has been noticed.

iii) During the year, the Company has not sold any Fixed Assets.

2. NATURE OF BUSINESS :-

The Company is doing the business as Money Changer (Trading in Foreign Currency & Travellers Cheques) Under the circumstances, the following matters are not applicable :-

i) Procedure for the purchases of stores / raw materials & finished products and its compression with record.

ii) Physical verification of above items.

iii) Maintenance of records of scrap / waste generated from the manufacturing activities.

iv) Maintenance of Cost Records.

v) Valuation of above items.

3. According to the information and explanations given to us the Company has not granted any loans to companies covered in the register maintained under Section 301 of the Companies Act, 1956.

4. According to the information and explanations given to us, the Company has not taken any loans from companies, firms or other parties listed in the register maintained under Section 301 (1B) of the Companies Act, 1956.

5. According to the information and explanations given to us, the Company has not accepted any deposits from the public. Therefore, the provisions of Clause (vi) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

6. According to the information and explanations given to us, no personal expenses of employees or directors have been charged to revenue account, other then those payable under contractual obligations or in accordance with generally accepted business practice.

7. The company is not a sick industrial company within the meaning of clause (0) of sub-section (1) of Section 3 of the Sick Industrial Companies (Special Provisions) Act, 1956.

8. Since the Company is not a chit fund or nidhi / mutual benefit fund/society, paragraph 4 (xiii) of the order is not applicable.

9. As the Company is not dealing or trading is shares, securities, debentures and other investments, paragraph 4 (x iv) of the order is not applicable.

10. According to the records of the Company examined by us and on the basis of information & explanations give to us, the Company has:

i) Not taken any loans from bank or financial institution.

ii) Not granted any loans and advances on the basis of security by way pledge of shares, debentures and other securities during the year.

iii) Not given any guarantee for loans taken by others or financial institutions during the year.

11. Based upon the audit procedures performed and information & explanations given by the management, no fraud on or by the Company has been notice during the year under audit.



FOR PRAFUL N. SHAH & CO.

Chartered Accountants,

PRAFUL N.SHAH

Place : Ahmedabad PROPRIETOR

Date : 13/08/2010 Membership No.: 15591

F.R.N. -708057W


Mar 31, 2009

1 We have audited the attached Balance Sheet of CHARMS INDUSTRIES LTD as at 31st March, 2009 & the Profit & Loss Account and the Cash Flow Statement of the Company for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on Our audit

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain, reasonable] assurance about whethere the financial statements are free of material misstatement. An audit includes examining, on a lest 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 the management, as well as evaluating the overall financial statements presentation. We believe that our audit provides a reason able basis for our opinion.

3. As required by manufacturing and other Companies (Auditors Report) order, 2004 (together the "Order) issued by the Central Government of India in terms of sub-section (4A) of section ; 227 of the Companies act. 1959, and on the basis of such cheeks of the books and records of live Company as we considered appropriate and according to the information and explanations given to us. we enclose in the Annexure a statements on the matters specified in paragraphs 4 and 5 of the said order.

A. (a) We have obtained all the information and explanations, which to the beat of our knowledge and belief were necessary for the purposes of our audtit.

(b) 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 those books.

(c) The Balance sheet and Profit & Loss Account dealt With this report are in agreement with the books of accounts.

(d) In our opinion, the Balance Sheet, and Profit & Loss Account and cash flow statement dealt with by this report comply with the applicable Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956.

(e) On the basis of written representations received from the directors, as on 31st March. 2009 and taken on records by the Board of Directors, we report that none of directors is disqualified as on 31st March, 2009 from, being -appointed as director in terms of clauses (g) of subsection (1) of section 274 of the Companies Act. 1955.


i) Loans & Advances Rs. 2,53,45,153/-

ii) Advances paid for the purchases of Machineries Rs. 48,50,000/-

iii} Shortfall in the Value of Investments Rs. 30,00,000/-

Having regard to this, the Balance Sheet & Profit & Loss Account and Cash Flow Statement dealt by this report are in compliance with the Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956.

(g) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes thereon and attached thereto give in the prescribed manner the Information required by the Act and a true and fair view in conformity with the accounting principles generally accepted in India -

I) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2009 AND

II) In the case of the Profit and Loss Account, of the Profit of the year ended on that date.

III) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

ANNEXTURE REFERRED TO IN PARAGRAPH |1) OF THE AUDITORS REPORT TO THE MEMBERS OF CHARMS INDUSTRIES LIMITED FOR THE YEAR ENDED MARCH 31, 2009 :-

1:. FIXED ASSETS :-

i) The Company has maintained the record of Fixed Assets showing full particulars of quantitative details and location.

a) The same have physically verified and no discrepancy has been noticed-

ii) During the year, the Company has not sold any Fixed Assets.

2. NATURE OF BUSINESS :-

The Company is doing the business as Money Changer (Trading in Foreign Currency & Travellers Cheques.) Under the circumstances, the following matters are not applicable :-

I) Procedure tor the purchases of stores draw materials & furnished products and its comparison with record,

II) Physical verification of above items.

III) Maintenance of records of scrad waste generated tram the manufacturing activities.

IV) Maintenance of Cost Records.

V) Valuation of above items.

1. According to the information and explanations given to us the Company has not granted any loans to companies covered in the register maintained under Section 301 of the Companies Act, 1956.

4. According to the information and explanations given to us, the Company has not taken any loans train companies. firms or other parlies listed in the register maintained under Section 301 (1B) of the Companies Act, 1956.

5. According to the information and explanations given to us, the Company has not accepted any deposits from the public. Therefore, the provisions of Clause (VI) of the Companies [Auditors Report) Order. 2003 are not applicable to the Comoany

6. According to the information and explanations given to us, no personal expenses of employees or directors have been charged to revenue account, other then those payable under contractual obligations or in accordance with generally accepted business practice.

7. The company is not a sick industrial company within the meaning of clause (Q) of sub-section (1) of Section 3 at the Sick Industrial Companies (Special Provisions) Act. 1956:

8 Since the Company is not a chit fund or nidhi / mutual -benefit fund/Society, paragraph & (xiii) of the is not applicable.

9. As the Company is not dealing or trading is shares, Securities, debentures and other investments, paragraph 4 (x iv) of the older is not applicable.

10, According to the records of the Company examined by us and on the basis of Information & explanations give la us. the Company has;

I] Not taken any loans from bank or financial institution.

ii) Not granted any loans and advances on the basis of security by way pledge of shares, debentures and other; securities during the year,

iii) Not given any guarantee tor loans taken by others or financial Institutions during the year.

Based upon the audit procedures performed and information & explanations given by the management, no fraud on of by the Company has been notice during the year under audit.

FOR PRAFUL N. SHAH & CO. Chartered Accountants,

PRAFUL N. SHAH

Place : Ahmadabad. PROPRIETOR

Date : 31-03-2009 Membership No.: 16591


Mar 31, 2003

We have audited the attached Balance Sheet of CHARMS INDUSTRIES LIMITED of Ahmedabad as at 31-03-2003 and the Profit & Loss Account for the year ended on that date, annexed thereto and report that :-

(1) As required by the Manufacturing and other Companies (Auditors Report) Order. 1988, we enclose herewith the Annexture a statement on the matters specified in Paragraph 4 & 5 of the said order.

(2) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

(3) 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 the books;

(4) The Balance Sheet and Profit and Loss Account detail with this report are in agreement with the books of account ;

(5) In our opinion, the profit A- loss account and the balance sheet comply with the Accounting Standards referred to in subsection (3C) of Section 211 of the Companies Act, 1956.

(6) Attention is further invited to the following notes in schedule : 7-

(a) Note No. : B (6) (i) regarding non-credit of accured interest on loans and Advances.

(b) Note No.: B (6) (ii) regarding non provision of doubtful loans and advances.

(c) Note No.: B (6) (iii) regarding non provision of doubtful advance payments to machinery suppliers.

SUBJECT TO THE FOREGOING stated in paragraph 6 (a), the Consequential effect of which is not ascertainbale at this stage and paragraphs 6 (b) & (c) in our opinion and to the best of our information and according to the explanations given to us the said accounts read together with other notes of schedule : 7 give the information required by the Companies Act, 1956 in the manner so required and give true and fair view :

(i) In the case of the Balance Sheet of the state of affairs of the Company as at 31-03-2003

and

(ii) in the case of the Profit and Loss Account, of the profit for the year ended on that date.

ANNEXURE REFERRED TO IN PARAGRAPH (1) OF AUDITORS REPORT TO THE MEMBERS OF CHARMS INDUSTRIES LTD. ON THE ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2003.

1. The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. As explained to I us, the company has a system of physical verification of fixed assets once in

a year and in accordance therewith physical verification is reasonable having regard to the size of the Company and the nature of its fixed assets. The discrepancies noticed on verification were not material and have been properly dealt with in the books of account.

2. None of the fixed assets have been revalued during the year.

3. The companys activities are of servicing nature. Under the circumstances on following matters there is no necessity of reporting:-

Physical verification, its frequency, its procedure, the discrepancy, its | valuation its purchase procedure, maintenance of Register U/s 301 of the Companies Act, 1956, determination on unserviceble, or damaged goods of stores, raw materials spareparts and finished goods and maintenance of records for the sale and disposal of scrap and by-products.

4. According to the information and explanations given to us, the Company has not taken any loans from companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act. 1956 and/or from the companies under the same management as defined under Section 370 (IB) of the Companies Act. 1956.

5. According to the information and explanations given to us, the Company has not granted any loans to companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act. 1956 and/or from the companies under the same management as defined under Section 370 (IB) of the Companies Act, 1956.

6. The company has given loans to Companies and other firms and parties. The company has also given security deposits to one company in terms of Development Agreement for the development/construction of their land. All such balance are interest carrying. As referred to in Para (6) of Schedule 7 the interest and the principal amounts of such loans / deposits are not regular in repayment. The interests have not been received as per stipulations. The original loan amounts are also overdue. However, no provision for accured interest from such loans, has been made in the accounts. In the opinion of Board of Directors, the principal amounts are not doubtful of recovery and hence no provision for such amounts have been made in the accounts. The rate of interest has not been found prejudicial to the interest of the company.

For, Praful N. Shah & Co.

Chartered Accountants

(P.N. Shah)

Proprietor.

Place : Ahmedabad

Date : 21-05-2003

 
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