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
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.
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
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit 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;
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
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
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
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
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.
(F.R.N. - 108057W)
Praful N. Shah
Place : Ahmedabad Proprietor
Date : 30/05/2014 Membership No. : 15591