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