charms industries ltd share price Management discussions


GLOBAL ECONOMY

Following a turbulent year in 2022, the global economy is seen demonstrating signs of resilience in 2023. The geopolitical tensions caused by the prolonged Russia-Ukraine war, supply chain disruptions, higher inflation, and tighter monetary conditions made it hard to complete the economic recovery in 2022-23. Economic growth remains low by historical standards and financial risks have increased. International trade was also severely impacted in 2022-23 due to global economic slowdown, persistent inflation, supply chain bottlenecks, and subdued consumer sentiments. However, economic conditions have started showing signs of stabilisation in early 2023.The Economic Survey 2022-23 comes when global uncertainties are rife. Barely had the pandemic receded, and the war in Ukraine broke out in February 2022. Prices of food, fuel and fertilizer rose sharply. As inflation rates accelerated, central banks of advanced countries scrambled to respond with monetary policy tightening. Many developing countries, particularly in the South Asian region, faced severe economic stress as the combination of weaker currencies, higher import prices, the rising cost of living and a stronger dollar, making debt servicing more expensive, proved too much to handle.

INDIAN ECONOMY

For India, 2022 was special. It marked the 75th year of Indias Independence. India became the worlds fifth largest economy, measured in current dollars. Come March, the nominal GDP of India will be around US$ 3.5 trillion. In real terms, the economy is expected to grow at 7.8 percent for the year ending March 2023. This follows an 8.7 per cent growth in the previous financial year. The rise in consumer prices has slowed considerably. The annual rate of inflation is below 6 per cent. Wholesale prices are rising at a rate below 5 per cent. The export of goods and services in the first nine months of the financial year (April - December) is up 16 per cent compared to the same period in 2021-22. Although the high oil price this year compared to last inflated Indias import bill and caused the merchandise trade deficit to balloon, concerns over the current account deficit and its financing have ebbed as the year rolled on. Foreign exchange reserve levels are comfortable and external debt is low.

Indias foreign exchange reserves, which were at an all-time high at USD 645 billion in October 2021 have declined to 471.496 billion in October 2022. This is because of the appreciation of the dollar, the RBI selling dollars to protect the rupee from depreciating too much and the higher prices the country has to pay for imports of oil, gas and other goods and services. The large reduction in Indias foreign exchange reserves is a cause for concern and can affect the economy.

India is contributing more than 12% to global growth on average during the last five years. This makes India among the fastest-growing major economies in the world.

The Indian economy is expected to have recorded a growth of 7% in real GDP in 2022-23. This can be accredited to strong global headwinds. The slew of measures announced by Reserve Bank of India (RBI) to enhance foreign exchange inflows should help rupee to outperform its peers in emerging market economies, experts said. RBI said it has been closely and continuously monitoring the liquidity conditions in the forex market and has stepped in as needed in all its segments to alleviate dollar tightness with the objective of ensuring orderly market functioning. It announced five measures to enhance foreign exchange inflows. The Indian rupee depreciated by 36 paise to close at a three-week low of 81.88 against the US dollar after the Economic Survey 2022-23.

After COVID-19 was delivered an enormous global shock, leading to steep recessions in many countries. Many countries have provided large- scale macro-economic support to alleviate the economic blow, which has contributed to a recent stabilization in financial markets. Central banks in advanced economies have cut policy rates and taken other far-reaching steps to provide liquidity and to maintain investor confidence. Stronger multilateral cooperation and a more balanced policy mix at the national level, considering available monetary and fiscal space, are essential for strengthening economic activity and forestalling downside risks. Building financial resilience, strengthening growth potential, and enhancing inclusiveness remain overarching goals.

COMPANY BUSINESS:

The Company is a RBI registered Full Fledge Money Changer.

In money changing, the Company provides an array of products and services including buying and selling of foreign currency notes, servicing of co-branded International prepaid multi currency travel cards, issuance of foreign currency demand drafts, travellers cheques and outward telegraphic remittances, including outbound remittances towards student fees, film shoots, tour remittances etc. and also extend encasements of foreign currency demand drafts, travellers cheques and forex prepaid cards.

OUTLOOK, OPPORTUNITIES AND THREATS:

Every year sees global currencies jostle for position, although lately it has been a race to the bottom, with more than 30 central banks around the world cutting interest rates in a desperate bid to avoid falling into recession.

Low interest rates typically mean a weak currency, as investors can get a better return on their money elsewhere.

The Government of Indias initiatives in boosting up its public expenditure on Infrastructure development will give an impetus to its "MAKE IN INDIA policy. India is being the most sought after Investment destination for many Investors world over. Hence, this augurs well for the Company business as there will be inflow of Capital Investment giving a boost to Companys Money changing business.

Also surge in growth of travel and hotel industry shall lead to betterment of companys operations and the company is looking forward for the same.

Further, the comparative slower growth globally as compared to Asian Countries coupled with the challenges faced through the advancement of the world digital economy and India too encouraging digitisation, the Companys management though expects new challenges, it does not foresee any immediate threat to its core business activities and in fact its efforts are being channelized to seize the newer methodologies to counter the challenges faced.

RISKS AND CONCERNS:

Company has laid down a detailed risk management policy, customer identification and acceptance procedure. The financial risks involved are evaluated through a well laid down procedure. However, all the inherent business risks are adequately insured by the Company. Exchange rate volatility is not only faced by the Company but is attuned to the forex industry globally. To mitigate the said risks Company closely monitors the exchange rate movement.

INTERNAL CONTROL SYSTEM:

The Company has already put in place an elaborate Internal Control and Internal Audit systems. The system ensures adequate periodical checks and balances are exercised. Continuous monitoring by the Internal Audit team of these checks and balances due to the inherent risks associated with the nature of Companys activities ensures compliance of the regulatory framework of RBI & FIU. The Audit team is suitably guided and updated by the Audit Committee of the various regulatory requirements from time to time. The Company has put in place a strict credit policy for extending credit to its corporate customers. The same is continuously monitored and reviewed periodically for any updations to ensure funds at Companys disposal are being judiciously utilized and efficiently managed vis- a-vis the business requirements. The Management Discussion and Analysis explaining the objectives of the Company, the opportunities and threats, the outlook for the future, the risks and concerns have to be read with the meaning of relevant applicable laws and regulations. The actual above. As in any other business the performance of the Company is totally dependent on the market conditions of demand and supply, the volatility in exchange rate, the Government policy & regulations, the economy of the country and other factors.

FINANCIAL PERFORMANCE

This year had a very bad impact on companys financial as well as operational performance

The Company has incurred Net loss for the year ended 31st March 2023 of Rs.-0.04/- Lakhs. Further there has been no significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios of the Company.

The company is in process to take important steps in the area of managing the business as the amount of losses in the company is increasing from last some years and unable to recover any amount.

The company have filed application for Capital reduction of the company and scheme of Capital Reduction Provides for 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 unrepresented 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/-.

Further 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.

Details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations there for, including:

Sr No. Particulars of Ratio

As at 31st March, 2023 As at 31st March, 2022

1. Debtors Turnover

- -

2. Inventory Turnover

- -

3. Interest Coverage Ratio

- -

4. Current Ratio

0.76 1.55

5. Debt Equity Ratio

0.05 0.01

6. Debt service Coverage ratio

- -

7. Operating Profit Margin (%)

- -

8. Net Profit Margin (%)

- -

9. Net capital Turnover Ratio

-0.34 -

10. Trade payable Turnover Ratio

- -

Details of any change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof: Not Applicable

SEGMENT WISE PERFORMANCE:

Our companys operations belong to a single segment and therefore no segment wise performance given.

MATERIAL DEVELOPMENT IN HUMAN RESOURCES:

Your Company being part of the sector, human resources has always been the main pillar for all the activities of the Company. Customer Satisfaction being the ultimate objective of the Company, to ensure sustained business growth. Companys focus has been to improve the staffs contribution towards the various services offered. To achieve this objective Company has ensured that all its employees receive continuous update on the Companys policies as well as the regulatory framework.

For and on behalf of the Board Sd/-

HarsadShantilal Gandhi

Chairman & Director (DIN: 01056779)

Place: Ahmedabad Date: 04/09/2023

Disclosures Regarding Remuneration Required Under Section 197(12) Of The Companies Act, 2013 Read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

Sr. No. Requirements

Disclosure

I. The ratio of remuneration to each director to the median remuneration of the employees for the financial year

MD NIL

II. The percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary in the financial year

- NIL

III. The percentage increase in the median remuneration of employees in the financial year

No Increase

IV. The number of permanent employees on the rolls of the Company as on 31st March, 2023.

3

V. Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration.

Nil

VI. Affirmation that the remuneration is as per the remuneration policy of the Company

Yes, it is confirmed

For and on behalf of the Board Sd/-

Harsad Shantilal Gandhi Chairman & Director (DIN: 01056779)

Place: Ahmedabad Date: 04/09/2023