charms industries ltd share price Directors report

To,

The Members of Charms Industries Limited.

The Directors are presenting this 31^thAnnual Report and the Audited Statement of Accounts for the year ended March 31,2023.

1. FINANCIAL PERFORMANCE

Particulars	FOR THE YEAR ENDED MARCH 31,2023	FOR THE YEAR ENDED MARCH 31,2022
	(RS In THOUSAND)	(RS In THOUSAND)
Income	255.00	-
Other Income	13.35	575.08
Total Income	268.35	575.08
Less : Expenditure	(1666.35)	(1237.93)
Profit/Loss before Interest , Depreciation and tax	(1454.80)	(737.85)
Less : Interest	0	0
Less : Depreciation & Amortization Cost	(28.40)	(37.50)
Profit/ Loss Before Tax	(1426.40)	(700.35)
Less : Tax Expenses	1.14	0.13
Profit / Loss after Tax	(1427.54)	(700.48)

The Financial Statements of the Company are prepared in accordance with Indian Accounting Standards (IND AS) including the Rules notified under the relevant provisions of the Companies Act, 2013, form part of the Annual Report and Accounts.

2. HIGHLIGHTS OF FINANCIAL SUMMERY

During the year under review, the company has incurred a loss of Rs.1427.54 thousand/-, which has been increased as compared to the last F.-Y. 2021-22 i.e. Rs. 700.48 thousand/-. The Company has faced many difficulties due to International travel restrictions during the financials year 2022-23, however now government has lift the travel restrictions and the management is optimising that the growth of the company will be on better track and doing well in the upcoming Financial Year.

3. DIVIDEND

Since the company incurred loss during the year ended on March 31,2023, the Board of Directors has not recommended any dividend for the year.

4. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND:

Since there was no unpaid/unclaimed Dividend declared and paid last year, the provisions of Section 125 of the Companies Act, 2013 do not apply.

5. RESERVES

The Company has not transferred any amount to Reserves.

6. CHANG OF REGISTERED OFFICE

During the year under review, there was no change in address of Registered office of the Company.

7. SHARE CAPITAL

The Authorized share capital of the Company is Rs.4,50,00,000 consisting of 45,00,000 Equity Shares of Rs.10 each.

During the year under review, there was no change in the Authorized Share Capital of the Company.

The Issued, Subscribed and paid Up Capital of the Company is Rs.4,10,61,000 consisting of 41,06,100 Equity Shares of Rs.10 each.

There was no change in the Issued, Subscribed and paid Up Capital Share Capital of the Company during the year under review.

8. SCHEME OF ARRANGEMENT

The Board of directors in their Board Meeting held on 01.07.2023 has approved the Draft Scheme of Capital Reduction under Section 66 read with applicable rule & regulations and other applicable provisions of the Companies Act, 2013 subject to the necessary approvals.

This Scheme provides for undertaking of capital reduction of Charms Industries Limited (hereinafter referred as "CIL or "the Company"), whereby the paid-up share capital of the "CIL" shall be reduced from Rs.4,10,61,000/- divided into 41,06,100 Equity Shares of Rs.10/- each fully paid-up to Rs.41,06,100/- divided into 41,06,100 equity shares of Re.1/-each fully paid-up and that such reduction be effected by cancelling the paid up capital amounting to Rs 3,69,54,900 which has lost or is unrepresentative by available tangible assets. Further, the Company also propose to cancel the capital reserve account of Rs.31,46,530 by adjustment in debit balance of Profit & Loss Account and therefore the total amount of adjustment in debit balance of Profit & Loss Account is aggregating to Rs.4,01,01,430, subject to all necessary approvals.

The reduction will be to the extent of Rs.9/- per share upon each of the 41,06,100 equity shares which have been issued by reducing the paid-up value of all the shares in the capital of the Company from Rs.10/- per share to Re.1/- per share. The debit balance of Profit & Loss Account of the Company will be written off to the extent of amount of the aforesaid reduction of share capital and Capital Reserve.

Further, the Scheme of Reduction of Capital does not result in any benefits to the Promoter / Promoter Group/Group Companies as there is no Change in percentage (%) of their shareholding.

The Company has filed an application to designated stock exchange i.e. BSE Limited under Regulation 37 of SEBI (LODR), Regulations 2015 for their observation letter. The application is under process with Stock Exchange.

• BACKGROUND AND RATIONALE TO THE SCHEME

Some of the rationales of the proposed Scheme are as under;

> The balance in Profit & Loss Account (debit) as at 31^st March, 2023 was Rs.4,12,35,570/- - (Rupees Four Crores Twelve Lakhs Thirty-five Thousand Five Hundred Seventy Only).

> The proposed reduction of the equity share capital of the Company would not have any adverse effect on the creditors of the Company or the Companys ability to full fill its commitments or meet its obligations in the ordinary course of business.

> The Scheme does not provide any cash pay out to affect the Reduction of Capital, therefore the scheme will not adversely affect the liquidity and/or financial position of the Company.

> The financial restructuring will help the Company to reflect better its operational efficiency, improvements in the future years and reflect the true share value.

> The Issued, Subscribed and Paid-up Share Capital, post reduction will be Rs.41,06,100/- divided into 41,06,100 equity shares of Re.1/- each fully paid-up.

9. LISTING

The Equity Shares of the Company are continued to be listed and actively traded on the Bombay Stock Exchange Limited (BSE). The company has paid listing fees to the Stock Exchanges (BSE).

10. DEMATERIALIZATION OF SHARES:

As on March 31,2023, there were 32,16,760 Equity Shares dematerialized through depositories viz. National Securities Depository Limited and Central Depository Services (India) Limited, which represents about 78.50% of the total issued, subscribed and paid-up capital of the Company.

11. SUBSIDIARY / ASSOCIATE / JOINT VENTURE COMPANIES

The Company does not have any Subsidiary/Associate/Joint venture Companies.

12. CHANGE IN NATURE OF BUSINESS

The Company is engaged in the business of Money Changer. There was no change in the nature of business activities of the Company during the year under review

13. DIRECTORS AND KEY MANAGERIAL PERSONNEL

The boards consist of adequate number of directors as per the Companies act 2013, SEBI Regulations, and other applicable laws.

A. Composition of Board

Name of Directors	Designation	Category	No. of Board Meeting Held	No. of Board Meeting Attended
Shivkumar R. Chauhan	Managing Director	Promoter Executive	5	4
Harshad Shantilal Gandhi	Chairman & Independent Director	Non-Executive, Independent	5	4
Parth Shiv kumar Chauhan	Director	Promoter Non Executive	5	4
Nishit Madhavbhai Rupapara	Independent Director	Non-Executive, Independent	5	4
Nehal Shivkumar Chauhan	Director	Promoter Non Executive	5	4

B. Retirement by rotation

In accordance with the provisions of the Articles of Association of the Company and Companies Act, 2013, Mrs. Nehalben Shivkumar Chauhan (DIN: 02901331) retires by rotation and being eligible have offered himself for reappointment.

C. Changes in the Board during the year: There is no change During the year

D. Changes in the Board during the year: There is no change During the year

E. Declaration of Independent Director:

Mr. Harsad S. Gandhi (DIN: 01056779) and Mr. Nishit Rupapara (DIN:02859031) are the existing Independent Directors the Company and the Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under the provisions of the Companies Act, 2013 read with the Schedules and Rules issued there under as well as Regulation 16(1)(b) of Listing Regulations (including any Statutory modification(s) or re-enactment(s) for the time being in force).

F. Evaluation of Boards Performance

Pursuant to provisions of the Companies Act and the Listing Regulations, the Board has carried out the annual performance evaluation of its own performance, performance of the Chairman, the Committees and independent Directors without Participation of the relevant Director. The Nomination and Remuneration Committee of the Board continuously evaluates the performance of the Board and provides feedback to the Chairman of the Board. The independent directors had a separate meeting without the presence of any non-independent directors and management and considered and evaluated the Boards performance, performance of the Chairman and other non-independent directors and shared their views with the Chairman. The Board had also separately evaluated the performance of the Committees and independent directors without participation of the relevant director.

G. Profile of Directors Seeking Appointment / Reappointment

As required under regulation 36(3) of SEBI (LODR), 2015, particulars of the Directors retiring and seeking reappointment at the ensuing Annual General Meeting is annexed to the notice convening31^st Annual General Meeting.

14. NUMBER OF MEETINGS OF THE BOARD

Regular meetings of the Board are held to discuss and decide on various business policies, strategies, financial matters and other businesses. During the year, the Board duly met Five (5) times on 27/05/2022, 10/08/2022, 14/10/2022, 26/12/2022 and 06/02/2023 in respect of said meetings proper notices were given and proceedings were properly recorded and signed in the Minute Book maintained for the purpose.

15. STATE OF THE COMPANYS AFFAIRS

The state of the Company affairs forms an integral part of Management Discussion and Analysis Report is furnished in "Annexure-B" and is attached to the report.

16. ANNUAL RETURN AS PER SECTION 92(3) OF COMPANIES ACT, 2013.

In terms of Section 92(3) of the Companies Act, 2013and Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company shall be available on the website of the Company at www.charmsindustries.co.in.

17. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134(3) of the Companies Act, 2013, your Directors confirm:

i) That in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any;

ii) That the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

iii) That the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company for preventing and detecting fraud and other irregularities;

iv) That the Directors had prepared the annual accounts on a going concern basis.

v) That the Directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and

vi) The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively;

18. DISCLOSURE OF VARIOUS COMMITTEES OF BOARD OF DIRECTORS

a. AUDIT COMMITTEE:

The Audit Committee of Directors was constituted pursuant to the provisions of Section 177 of the Companies Act, 2013. The composition

of the Audit Committee is in conformity with the provisions of the said section.

Name of Directors	Category of directorship	Position	Number of Meetings
			Held	Attended
Mr. Harsad S. Gandhi	Independent and Non-Executive	Chairman	4	4
Mr. Nishit M. Rupapara	Independent and Non-Executive	Member	4	4
Mr. Shivkumar R. Chauhan	Promoter and Managing Director	Member	4	4

Recommendations by the Audit Committee:

All the recommendations made by the Audit Committee are accepted and implemented by the Board of Directors.

> The broad terms of reference of the Audit Committee are as under:

> Reviewing of the Companys financial reporting process and the disclosure of its financial information to ensure that statement is correct, sufficient and credible.

> Recommending the appointment, remuneration and terms of appointment of external Auditor. Review and monitor independence and performance and effectiveness of audit process.

> Approval or any subsequent modification of transactions of the company with related parties

> Scrutiny of inter-corporate loans and investments

> Valuation of undertakings or assets of the Company, wherever it is necessary.

> Monitoring the end use of funds raised through public offers and related matters.

> Reviewing with management the Annual financial statements and half yearly and Quarterly financial results before submission to the Board.

> Reviewing periodically the adequacy of the internal control system.- Discussions with Internal Auditor on any significant findings and follow up there on.

MEETINGS:

During the year, 4(four) meeting of the committee was held on 27/05/2022, 10/08/2022, 14/10/2022 & 6/02/2023. The necessary quorum was present at the Meetings.

B. NOMINATION AND REMUNERATION COMMITTEE:

The Nomination and Remuneration Committee of Directors was constituted pursuant to the provisions of Section 178 of the Companies Act, 2013. The composition of the Committee is in conformity with the provisions of the said section.

The details of composition of Nomination and Remuneration Committee are as follows:

Name of Directors	Designation	Category	No. of Board Meeting Held	No. of Board Meeting Attended
Mr. Harsad S. Gandhi	Independent Non Executive	Chairman	3	3
Mr. Nishit M. Rupapara	Independent Non Executive	Member	3	3
Mrs. Nehal S. Chauhan	Promoter Non-Executive	Member	2	2

Terms of reference of the broad terms of reference of the Nomination and Remuneration Committee are as under:

> Formulation of the criteria for determining the qualifications, positive attributes and independence of Director;

> Devising a policy on Board diversity;

> Formulation of Remuneration policy;

> Review the structure, size and composition of the Board;

> Identifying and selection of candidates for appointment as Directors;

> Identifying potential individuals for appointment as Key Managerial Personnel and Senior Management;

> Formulation of criteria for evaluation of Independent Directors and the Board.

Meetings:

During the Year, 3 (Three) meeting of the committee was held on 27/05/2022, 10/08/2022 and 14/10/2022

The Board has on the recommendation of Nomination and Remuneration Committee framed a policy on directors appointment and remuneration of Directors including criteria for determining qualification, positive attributes, independence of directors and remuneration for Directors, Key Managerial Personnel and Other Employees.

Policy on Directors Appointment & Remuneration

The Board has in accordance with the provisions of sub-section (3) of Section 178 of the Companies Act, 2013, formulated the policy setting out the criteria for determining qualifications, positive attributes, independence of a Director and policy relating to remuneration of Directors, Key Managerial Personnel and other employees. The said policy is accessible on the Companys official website at www.charmsindustries.co.in

We affirm that the remuneration paid to the Directors is as per the terms laid out in the Remuneration Policy of the Company.

Annual Evaluation of Board, Committees and Individual Directors:

Pursuant to the provisions of the Act, Listing Regulations, 2015 and the Remuneration Policy of the Company, the Board of Directors/ Independent Directors/ Nomination and Remuneration Committee (as applicable) has undertaken an evaluation of its own performance, the performance of its Committees and of all the individual Directors including the Chairman of the Board of Directors based on various parameters relating to roles, responsibilities and obligations of the Board, effectiveness of its functioning, contribution of Directors at meetings and the functioning of its Committees. Such evaluation is presented to the Nomination and Remuneration Committee and the Board of Directors (as applicable).

Directors express their satisfaction with the evaluation process

H. STAKEHOLDERS RELATIONSHIP COMMITTEE:

The Stakeholders Relationship Committee is constituted in compliance with the requirements of Section 178 of the Companies Act, 2013. Company Secretary is the Compliance Officer, who acts as the Secretary to the Committee and the Members of the Committee are:

Name of Directors	CATEGORY OFDIRECTORSHIP	Category	Number of meeting held	Number of meeting attended
Mr. Harsad S.Gandhi	Independent Non-Executive	Chairman	1	1
Mr. Shivkumar R. Chauhan	Promoter and Managing Director	Member	1	1
Mr. Parth Shivkumar Chauhan	Non-Executive	Member	1	1

The broad terms of reference of the Stakeholders Relationship Committee are as under:

> Oversee and review all matters connected with the transfer of the Companys securities.

> Monitor redressal of investors / shareholders / security holders grievances.

> Oversee the performance of the Companys Registrar and Transfer Agents.

> Recommend methods to upgrade the standard of services to investors.

> Carry out any other function as is referred by the board from time to time or enforced by any statutory notification/ amendment or modification as may be applicable.

Details of Investors grievances/ Complaints:

The Company has not received any complaints during the year. The pending complaints of the Shareholders/Investors registered with SEBI at the end of the current financial year ended on 31^stMarch, 2023 are NIL .Mr. Dileep Panchal is the Company Secretary and Compliance Officer of the Company for the above purpose.

Meeting of stakeholders relationship committee

The Committee duly met 01 (one) times on 10/08/2022

19. INDEPENDENT DIRECTORS MEETING:

The Independent Directors of the Company met during the year on 26/12/2022 without the attendance of non-Independent Directors and members of the Board.

The Independent Directors reviewed the performance of the non-independent Directors and Board as whole. the performance of the Chairman taking into account the views of executive Directors and non-executive Directors and assessed the quality, quantity and timeline of flow of information between company management and board.

20. Auditors

The matters related to Auditors and their Reports are as under:

A. Statutory Auditors:

Pursuant to the provisions of Section 139 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, as amended from time to time, The present Auditors of the Company are M/s. Ashit N Shah & Co. & Associates, Chartered Accountants, having registration number FRN No. 100624W were appointed as Statutory Auditors of the Company to hold office from the conclusion of 29^th Annual General Meeting (AGM) till the conclusion of 33^rd Annual General Meeting of the Company to be held in the year 2025.

Pursuant to amendments in Section 139 of the Companies Act, 2013, the requirements to place the matter relating to such appointment for ratification by members at every AGM, is not required. Hence, the resolution relating to ratification of Auditors appointment is not included in the notice of the ensuing AGM. The Auditors have confirmed that they are not disqualified from continuing as Auditors of the Company and they hold a valid certificate issued by the ICAI.

They have confirmed their eligibility and qualifications required under the Act for holding office as Auditor of the Company.

During the financial year 2022-23, no frauds have either occurred or noticed and/or reported by the Statutory Auditors under Section 143(12) of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014 (as amended from time to time). Therefore, no detail is required to be disclosed under Section 134 (3) (ca) of the Act.

The Notes to the financial statements referred in the Auditors Report are self-explanatory. There are no qualifications or reservations or adverse remarks or disclaimers given by Statutory Auditors of the Company and therefore do not call for any comments under Section 134 of the Companies Act, 2013. The Auditors Report is enclosed with the financial statements in this Annual Report.

It is to be noted that Audit Report given by the Auditor is not qualified.

B. Cost Auditor:

As the cost audit is not applicable to the Company, therefore the Company has not appointed the Cost Auditor pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014.

Further, maintenance of cost records as specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013, is not required by the Company and accordingly such accounts and records are not made and maintained.

C. Internal Auditor

The Board of Directors was on the recommendation of Audit Committee, and pursuant to the provision of Section 138 of the Companies Act 2013 appointed Mr. Paresh Popatlal Joshi as an Internal Auditor of the Company

D. Secretarial Auditor:

Provisions of Section 204 read with Section 134(3) of the Companies Act, 2013, mandates to obtain Secretarial Audit Report from Practicing Company Secretary. M/s. Vishwas Sharma & Associates, Practicing Company Secretaries had been appointed to issue Secretarial Audit Report for the Period ended on 31^st March, 2023.

The Board of Director appointed M/s. Vishwas Sharma & Associates, practicing company secretary as secretarial auditor of the Company for F.Y. 2023-2024 & 2024-2025.

• Secretarial Audit Report :

Provisions of Section 204 read with Section 134(3) of the Companies Act, 2013, mandates to obtain Secretarial Audit Report from Practicing Company Secretary. M/s. Vishwas Sharma and Associates, Company Secretaries had been appointed to issue Secretarial Audit Report for the Period ended on March 31, 2023. Secretarial Audit Report issued by M/s. Vishwas Sharma and Associates,, Company Secretaries for the year ended on March 31,2023 in Form MR-3 attached and marked as Annexure "A" for the period under review, forms part of this report.

The said report contains observation or qualification which is mentioned as below:

Qualification	Explanations
According to the Regulation 31(2) of the SEBI (Listing Obligation and Disclosures Requirements) Regulations, 2015, the listed entity shall ensure that hundred percent of shareholding of promoter(s) and promoter group is in dematerialised form and the same is maintained on a continuous basis in the manner as specified by the Board.	The Board would like to clarify that the Company has approached to concern promoter various time and she assured the Company to finish the process of dematerialization.
The Company failed to comply with the provisions of Regulation 3(5) and 3(6) of SEBI (PIT) Regulations, 2015 related to Structured Digital Database (SDD). The Company had maintained all the entries as per the prescribed regulations into Excel format and hence is tamper able in nature.	The Board of Directors of the Company would like to clarify that the entries were maintained into Excel Format and we strictly implemented the Password of file to maintain its non-tamperable nature. Further, the Company has installed necessary SDD software which meets the requirements provided in SEBI (Prohibition of Insider Trading) Regulations, 2015 and now, the Company maintains all entries in the software to comply with said regulations.
The Company failed to submit financial result along with the outcome of board meeting required to be submitted under Regulation 30 of SEBI LODR Regulations within 30 minutes from the conclusion of the board meeting for the quarter ended on September 30, 2022.	The Board of Directors of the Company would like to Clarify that due to inadvertence and clerical error, the Company missed to attach Financial Results. It is to be noted the mistake was inadvertent in nature and Company will be more cautious in future while complying applicable SEBI (LODR) Regulation 2015
The Company has failed to Submit Voting result within 2 working days from the conclusion of Annual General Meeting as per regulation 44(3) of SEBI (LODR) Regulation, 2015. BSE has imposed a penalty of Rs.10,000/- on the Company for Non-submission of the voting results within the period provided under this regulation.	The Board of Directors of the Company informed that the mistake was inadvertent in nature and Company will be more cautious in future while complying applicable SEBI (LODR) Regulation 2015 and company has paid the imposed fine within the given time.

21 COMPANY SECRETARY:

Mr. Dileep Panchal is appointed as whole time company secretary and Compliance Officer of the company.

21. ESTABLISHMENT OF VIGIL MECHANISM

The company has in place a vigil mechanism pursuant to which a Whistle Blower Policy is also in vogue. Whistle Blower Policy covering all stakeholders including employees and directors of the company is hosted on companies website http://www.charmsindustries.co.in

22. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATION IN FUTURE

There were no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and companys operation in future.

23. RISK MANAGEMENT:

The Company does not have any Risk Management Policy or any statement concerning development and implementation of risk management policy of the company as the elements of risk threatening the Companys existence is very minimal.

24. COMPLIANCE WITH THE PROVISIONS OF SECRETARIAL STANDARD:

The Directors have devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems are adequate and operating effectively. The Company confirms Compliance with the applicable requirements of Secretarial Standards 1 and 2.

25. CORPORATE GOVERNANCE:

As per the provisions of SEBI (Listing Obligations and Disclosures requirement) Regulation, 2015, the annual report of the listed entity shall contain Corporate Governance Report and it is also further provided that if the Company is not having the paid up share capital exceeding Rs.10 crore and Net worth exceeding Rs.25 crore, the said provisions are not applicable. As our Company does not have the paid up share capital exceeding Rs.10 crore and Net worth exceeding Rs.25 crore, the Corporate Governance Report is not applicable and therefore not provided by the Board.

26. CORPORATE SOCIAL RESPONSIBILITY (CSR):

The provision of section 135(1) of Companies Act 2013 i.e. Corporate Social Responsibility is not applicable on the company. Therefore the company has not constituted CSR committee.

27. PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE:

As per the requirement of The Sexual Harassment of Women at Workplace (Prevention, Prohibition &Redressal) Act, 2013 and rules made there under, your Company has constituted Internal Complaints Committee (ICC) which is responsible for redressal of complaints related to sexual harassment. The ICs includes external members with relevant experience. The ICs, presided by senior women, conduct the investigations and make decisions at the respective Annual Report - 2022-23 45 locations. The ICs also work extensively on creating awareness on relevance of sexual harassment issues, including while working remotely. Your Directors declared and confirm that, during the year under review, there is no case filed under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. All new employees go through a detailed personal orientation on anti-sexual harassment policy adopted by the Company.

28. VIGIL MECHANISM / WHISTLE BLOWER POLICY:

The Company believes in the conduct of its affairs in a fair and transparent manner to foster professionalism, honesty, integrity and ethical behavior in its employees & stakeholders. The Company has adopted a Whistle Blower Policy as a part of vigil mechanism. Also, the Code of Business Conduct (Code) lays down important corporate ethical practices that shape the Companys value system and business functions and represents cherished values of the Company.

29. STATEMENT OF FORMAL ANNUAL EVALUATION

Nomination and Remuneration Committee annually evaluates the performance of individual Directors, Committees, and of the Board as a whole in accordance with the formal system adopted by it. Further, the Board also regularly in their meetings held for various purposes evaluates the performance of all the Directors, committees and the Board as a whole. The Board considers the recommendation made by Nomination and Remuneration Committee in regard to the evaluation of board members and also tries to discharge its duties more effectively. Each Board members contribution, their participation was evaluated and the domain knowledge they bring. They also evaluated the manner in which the information flows between the Board and the Management and the manner in which the board papers and other documents are prepared and furnished.

30. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope of the Internal Audit function is defined in the Internal Audit Manual. The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies of the Company. The Internal Audit also includes both physical as well as online transaction audit. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and recommendations along with corrective actions thereon are presented to the Audit Committee of the Board.

32. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

Management Discussion and Analysis Report as required under the Listing Agreement with stock exchanges is annexed as a separate Annexure "B" forming part of this Report.

33. PARTICULARS REGARDING EMPLOYEES:

The information required under Section 197 of the Companies Act, 2013 read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in the Report and marked as Annexure- "c". No employee of the Company of the Company was in receipt of the remuneration exceeding the limits prescribed in the rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

35. DEPOSITS

During the year under review, the Company has not accepted or renewed any deposits within the meaning of Section 73 and 76 of the Companies Act 2013 read with the Companies (Acceptance deposits Rules), 2014. There was no deposit which remained unclaimed and unpaid at the end of the year.

36 PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES PURSUANT TO SECTION 188(1) OF THE COMPANIES ACT, 2013:

There were no contracts or arrangements or transactions with any related parties which could be considered material in accordance with the policy of the Company during the year under review. Hence, the Company is not required to disclose details of the related party transactions in Form AOC-2 pursuant to clause (h) of sub-section (3) of Section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014.

37. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013:

The company has not made any loans, guarantees or investments covered under the provisions of section 186 of the Companies Act, 2013 during the financial period under review.

38. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

A. Conservation of Energy:

I. the steps taken or impact on conservation of energy: Nil

ii. The steps taken by the company for utilizing alternate sources of energy: None

iii. The capital investment on energy conservation equipments: Nil

B. Technology Absorption:

I. the efforts made towards technology absorption: None

ii. The benefits derived like product improvement, cost reduction, product development or import substitution: None

iii. in case of imported technology (imported during the last three years reckoned from the beginning of the financial year)

a) The details of technology imported: None

b) The year of import: N.A.

c) Whether the technology has been fully absorbed: N.A.

d) If not fully absorbed, areas where absorption has not taken place, and the reasons thereof: N.A.

iv. The expenditure incurred on Research and Development: Nil

C. FOREIGN EXCHANGE EARNING & OUTGO:

i) Foreign Exchange Earning: NIL

ii) Foreign Exchange Outgoing: NIL

39. DIRECTORS DISQUALIFICATION

All the directors of the Company have confirmed that they are not disqualified from being appointed as directors in terms of Section 164 of the Companies Act, 2013.

40. INSOLVENCY AND BANKRUPTCY CODE:

During the Financial Year ended on March 31, 2023, there is no application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016

41. MATERIAL CHANGES AND COMMITMENT, IF ANY, AFFECTING THE FINANCIAL POSITION OF THECOMPANY OCCURRED BETWEEN THE END OF THEFINANCIAL YEAR TO WHICH THISE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT:

No material changes and commitments affecting the financial position of the Company occurred between the ends of the financial year to which these financial statements relate on the date of this report.

42. GENERAL:

a. Your Company has not issued any equity shares with differential rights as to dividend, voting or otherwise; and

b. Your Company does not have any ESOP scheme for its employees/Directors

c. The company has not issued any sweat equity Shares.

d. There was no revision in the Financial statement.

43. ACKNOWLEDGEMENT

Your Directors place on record the valuable co- operation and assistance extended by Reserve Bank of India, Western Union Financial services Inc., Government Authorities, Bankers, lending Institutions, suppliers and Customers during the year under review. Your Directors also place on record their appreciation for the committed services of the executives and staff of the Company.

For and on behalf of the Board Sd/-

Harsad Shantilal Gandhi

Chairman & Director (DIN: 01056779)

Place: Ahmedabad Date: 04/09/2023

SECRETARIAL AUDIT REPORT

FORM NO. MR-3

For the financial year ended on 31^st March, 2023

[Pursuant to section 204(1) of the Companies Act, 2013 and rule No. 9 of the Companies (Appointment and Remuneration Personnel)

Rules, 2014]

To,

The Members,

CHARMS INDUSTRIES LIMITED,

(CIN: - L72900GJ1992PLC017494)

108-B/109 SAMPADA BUILDINGMITHAKHALI SIX ROADS OPP- HARE KRISHNA COMPLEX B/H KIRAN MOTORS AHMEDABAD Ahmedabad GJ 380009

I have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by Charms Industries Limited (hereinafter referred to as the Company). Secretarial Audit was conducted in a manner that provided me a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing my opinion thereon.

Based on my verification of the Companys books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, I hereby report that in my opinion, the Company has, during the audit period covering the financial year ended on March 31,2023(Audit Period) complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter::

I have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on March 31, 2023 according to the provisions of:

i. The Companies Act, 2013 ("the Act") and the Rules made there under;

ii. The Securities Contracts(Regulation) Act, 1956 (SCRA) and the Rules made thereunder;

iii. The Depositories Act, 1996 and the Regulations and bye-laws framed thereunder;

iv. Foreign Exchange Management Act, 1999 and the Rules and Regulations made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowing. (not applicable to the company during the audit period);

v. The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (SEBI Act):-

a. The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;

b. The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015.

c. The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 ; ( Not applicable during the audit period)

d. The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2021; (Not applicable during the audit period)

e. The Securities and Exchange Board of India (Issue and Listing of non-convertible securities) Regulations, 2021 ;( Not applicable during the audit period)

f. The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client;

g. The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2021 ;( Not applicable during the audit period)

h. The Securities and Exchange Board of India (Buyback of Securities) Regulations, 2018 ;( Not applicable during the audit period)

i. Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015;

I have relied on the representation made by the company and its officers for systems and mechanisms formed by the companies for compliances system prevailing in the company and on examination of the relevant documents and record in pursuance thereof, on the test-check basis, the company is engaged in business of Full Fledge Money Changer and holds a valid License issued by the RBI, Ahmedabad vide License No. FE. AH. AM. 02/99, therefore the Company has to follow the RBI Act and rules and regulations there under as applicable to those holding License to carry on the business of FFMC.

I have also examined compliance with the applicable Clauses of the following:

(i) Secretarial Standards issued by The Institute of Company Secretaries of India;

(ii) The Uniform Listing Agreement entered into by the Company with BSE Limited (BSE).

During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above and subject to the following observations;

a. According to the Regulation 31(2) of the SEBI (Listing Obligation and Disclosures Requirements) Regulations, 2015,the listed entity shall ensure that hundred percent of shareholding of promoter(s) and promoter group is in dematerialized form and the same is maintained on a continuous basis in the manner as specified by the Board.

b. The Company failed to comply with the provisions of Regulation 3(5) and 3(6) of SEBI (PIT) Regulations, 2015 related to Structured Digital Database (SDD). The Company had maintained all the entries as per the prescribed regulations into Excel format and hence is tamper able in nature.

c. The Company failed to submit financial result along with the outcome of board meeting required to be submitted under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 within 30 minutes from the conclusion of the board meeting for the quarter ended on September 30, 2022.

d. The Company has failed to Submit Voting result within 2 working days from the conclusion of Annual General Meeting as per Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 BSE has imposed a penalty of Rs.10,000/- on the Company for Non-submission of the voting results within the period provided under this regulation

I further report that:

The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non- Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.

Adequate notice is given to all the directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting Boards take decision by majority of directors while the dissenting directors views are captured and recorded as part of the minutes.

I further report that There are adequate systems and processes in the company commensurate with the size and operations of the company to monitor and ensure compliance with applicable Laws, Rules, Regulations and Guidelines.

I further report that the Company has altered Memorandum of Association (MOA) by adding new objects in addition to the existing main object of the Company by alteration of Clause -lllA of Memorandum of Association of the Company during the reporting period.

I further report that during the audit period, there were no instances of:

(i) Public/Rights/Preferential issue of Shares/debentures/sweat equity.

(ii) Redemption/buy-back of securities.

(iii) Major Decisions taken by the members in pursuant to section 180 of the Companies Act, 2013

(iv) Merger/ amalgamation/ reconstruction etc.

(v) Foreign technical collaborations.

For, Vishwas Sharma and Associates, Company secretaries, SD/-

Vishwas Sharma Proprietor FCS:12606 COP No.:16942. UDIN:F012606E000933449 PR.No.: 854/2020

Place: Ahmedabad Date: 04/09/2023

Note: This report is to be read with my letter of even date which is annexed as Annexure herewith and forms and integral part of this report

ANNEXURE TO SECRETARIAL AUDIT REPORT

To,

The Members,

CHARMS INDUSTRIES LIMITED,

My report of even date is to be read along with this letter.

1. Maintenance of secretarial records is the responsibility of the management of the Company. My responsibility is to express an opinion on these secretarial records based on my audit.

2. I have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records. I believe that the processes and practices, I followed provide a reasonable basis for my opinion.

3. I have not verified the correctness and appropriateness of financial records and Books of Accounts of the Company.

4. Wherever required, I have obtained the Management representations about the compliance of Laws, Rules and Regulations and happening of events etc.

5. The compliance of the provisions of corporate and other applicable Laws, Rules, Regulations and Standards is the responsibility of management. My examination was limited to the verification of procedures on test basis.

6. The Secretarial Audit report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with which the management has conducted the affairs of the Company.

For, Vishwas Sharma and Associates, Company secretaries, SD/-

Vishwas Sharma Proprietor FCS:12606 COP No.:16942. UDIN:F012606E000933449 PR.No.: 854/2020

Place: Ahmedabad Date: 04/09/2023